Tara J. Hemmer: I think we get the full value and the other thing to bear in mind is, you’re looking at spot prices. And while we do play in the spot market, we also have been very actively looking at how we can forward sell and really look at selling our RINs six months out, a year out. So, there’s a balance there.
James Schumm: Okay, great. Thank you. And then just lastly for me, I know that hazardous waste is a relatively small business for you, but I think you guys have a substantial market share of the hazardous landfills. The industry seems to be more profitable now and I was just hoping maybe you could help us quantify your business here and what’s the outlook?
James C. Fish: Yes. I mean, we’ve been in hazardous waste space for quite some time and it continues to be a valuable component of our portfolio. And we’ve got coverage nationally. We’ve got assets on the East Coast and then obviously to the South East and on the West Coast as well. And, I would tell you, we continue to look for opportunities to grow that business. I think one of the benefits we have is, we’ve got a tremendous network of transportation assets that allows us to access a lot of the prominent markets, I think the Southeast, the Gulf Coast is one where we are very, very well-positioned, in terms of our hazardous waste presence.
James Schumm: Great. Thank you very much.
Operator: Thank you. One moment for questions. Our next question comes from Walter Spracklin with RBC Capital Markets. You may proceed.
Walter Spracklin: Yes, thanks very much. Good morning, everyone. So, I guess I’ll start just on the price cost spread that you kind of alluded to in your opening remarks. You indicated that it improved and certainly that spread when costs were rising dramatically in 2022, it kind of contracted and then as costs moderated somewhat and your pricing held in, presumably it’s been widening here in 2023 or back in 2023. My question for you is what your view is on the go-forward of that spread, is that something that you believe you can maintain at a higher level than it’s been historically? Or is 2023 just bringing it back to where it was historically and that’s likely where it’s going to be going forward?
James C. Fish: Well, I think you’ve hit on the right focal point for us which is that price cost spread as opposed to just looking at price because obviously, in ‘22, price was higher. But as I said, we were really just combating this real high inflation in ‘22. ‘23 was as you said back to a point where the price cost spread starts to widen a bit. And so how much that widens is a little bit of a question mark. We don’t know exactly where inflation goes. This morning’s numbers were maybe a little disappointing to the market. But we feel good about the wage inflation. We feel like that is much more kind of something we have control of now, whereas two years ago, we really had less control over it. I think you’ll see the price cost spread stay pretty close to where it’s been in 2023. 2024 won’t be a big change from that standpoint.
Walter Spracklin: Okay, perfect. And when, I know with your sustainability initiatives, it does introduce a little bit of commodity price variability in there. When you look at the midpoint of your EBITDA guidance for ‘24 and you look at the growth in the dollar value of that, about a quarter of that I think is from sustainability initiatives of that growth. And some of those as you mentioned are back-end weighted. Can you talk to us from a risk standpoint as it relates to two, first, when an investor asks you what about the volatility that commodity prices brings in? Can you remind us about, how you lock in price and give us some assurances there? And then the second part of the risk profile, how much of it is related to permitting or completion of construction projects that might get delayed through the course of the year, how do you feel about that risk component to its contribution in 2024?
Tara J. Hemmer: I can go ahead and take it in two parts and I’ll speak to the commodity price piece first and then the timeline second. So, on the commodity price piece for recycling, I think one of the things that we’ve done really well is really change our model to be a fee-for-service model and we have 95% of our contracts through that, which is really insulated us a bit on the commodity side. And then on top of that, recall that a significant piece of the benefit is coming independent of commodity prices, really those labor cost improvements and also some price premiums that we get related to the automation benefit. On the renewable energy side, one of the things that we’ve been clear on is that we’re going to work towards an 80-40-20 framework where 80% of our volume would be locked up within one year, and that would be something that we would be working towards in 2026.
You heard me mention roughly a third of our off-take is already locked up. So, that gives us some confidence on the commodity price side. Related to projects, we’ve really been kicking this around, looking at our project timelines and making sure that we’re within a strong and confident range for 2024. We have two large projects that are coming online in Q3 and so feel confident in our ability to hit the project timelines on both the recycling and renewable energy side.
Walter Spracklin: Okay, that’s great. Really appreciate that color. Thank you.
Operator: Thank you. One moment for questions. Our next question comes from Toni Kaplan with Morgan Stanley. You may proceed.
Hilary Lee: Hi, this is Hilary Lee on for Toni Kaplan. Just wanted to ask on the sustainability EBITDA part, so if I recall correctly during the Sustainability Analyst Day, we were expecting around $600 million from RNG including the third-party e-RINs by 2026. So just wondering what is kind of that delta between the now [$510 million] (ph) versus the $600 million?
Tara J. Hemmer: I think you have to compare the $510 million to the $500 million, because the $500 million number was without the e-RINs and the third-party RNG projects. So, the best way to think about it is we’ve increased our target by $10 million for the renewable natural gas business.
Hilary Lee: Got it. Appreciate it. And just on for the recycling, the increase in the is that for essentially the two new projects in Canada?
Tara J. Hemmer: A portion of it is from the two new projects in Canada and then a mix of other benefits from our portfolio projects.
Hilary Lee: All right. Thank you.
Operator: Thank you. I would now like to turn the call back over to Jim Fish for any closing remarks.
James C. Fish: Okay. Well, thank you all for joining us. We’re very proud of the quarter we had, very proud of the year, excited about what 2024 holds for us, and we look forward to talking to you next quarter. Thank you very much.
Operator: Thank you for your participation. You may now disconnect.
