Waste Management, Inc. (NYSE:WM) Q4 2022 Earnings Call Transcript

Devin Dodge: Okay. And then maybe just one kind of more detailed question. But in Q4, we saw that core price and yield in the collection and disposal business, they really converged, which is great. But it was a much tighter spread than we’ve seen in recent quarters. And then the 2023 guide suggested would widen back out again. Just can you provide some color on some of the factors that impacted that spread in Q4?.

Devina Rankin: Yes, it’s a great question. And when we wish we had a specific science towards being able to predict the Q4 results were best ever in terms of the difference between core price and yield. And in large part, that speaks to the strong churn that John mentioned during his prepared remarks, the 400 basis point improvement there is a really strong indicator that price is holding with our customers and that we’re doing — I’m sorry, the comment was on robot on churn, but our churn has been really strong as well. And our ability to hold on to every core price dollar and convert that to yield really was the best we’ve ever seen. In terms of our ability to predict that we’d still see those levels in 2023, I think it actually goes back to Stephanie’s question earlier about the macroeconomic outlook.

We used our long-term averages of converting our core price dollar to yield, rather than the fourth quarter launch pad. Because we view the macroeconomic environment is a little more uncertain than it is today, though we are seeing those signs of self-antigen done a good job of articulating. We do think that all indicators point to a soft recession in ’23, and we didn’t want to overpredict our ability to convert core price to yield in the year ahead.

Devin Dodge: Okay. Thanks, guys. Makes sense. I’ll leave it there.

Operator: Thank you. And I’m now showing any further questions at this time. I would now like to turn the call back over to Jim Fish for any closing remarks.

Jim Fish: Okay. Thank you. Well, we ran a bit long today, but we have a lot to cover. Thank you for your patience. Thanks for joining us and we will talk to you next quarter.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.