Republic Services, Inc. (RSG) Earnings Call Transcript & Summary

Okay. So we are on to our last garbage company of the day. This is Republic Services. Joining us on the stage is going to be Jon Vander Ark, I'll call him JVA, who's the CEO as of last June; Brian DelGhiaccio, Del, CFO; Tim Stuart, Chief Operating Officer; Brian Bales; hey, Tim; who's the Chief Development Officer. And then we have Stacey Mathews, who has been for the last 2 years Vice President of Investor Relations, and we all get to announce that she's being promoted to Vice President of Finance for the environmental solutions group, which I basically keep telling her. She's the CFO of the environmental solutions business. Anyway, thank you all for being here with us and sharing the day.

Let me tie in a little bit about Stacey's promotion and congratulations.

Thank you.

Because it's a little about your culture. Sure. And so there's a multilayered aspect of this. I've been doing this now for 7.5 hours speaking, so here we go. So there's a couple of angles on this. In the first 9 months, you've spent $3 billion on buying industrial services businesses, announced a joint venture with a landfill-to-gas development. And lots of people go, "Oh my God, so what's going on?" And there's one part would be what's your next act because CEO is around for 10 years. So a lot happening in the first 12 months. But where this is really going is there's a long history of a cultural aspect of lots of these pieces. Her promotion as an example of that. Can we talk about that a little bit?

Yes. Sure.

Some of that out there, so people appreciate.

Yes, I'll give you a quick history. So Allied and Republic obviously came together, well, 13 year ago.

2008.

2008, 2009 kind of time frame. And so that was a really good marriage of a company of Allied that was, listen, had formerly BFI, so a lot of good processes, systems, tools, certainly people, but a challenged balance sheet at a real leverage challenge. And then Republic Services that had bought a lot of great smaller companies but was always going to buy to transact, to exit, and they didn't really have a lot of central management. So the company -- but had a great balance sheet. So you put those 2 companies together and really spent almost a decade creating a foundation of a modern Fortune 500 company. So we believe deeply in the benefit of a local team railing around a P&L. So it's a distributed business. We have 170 business units, and we believe that those -- that General Manager and team member should rally around that outcome. At the same time, we ought to take the benefit of scale. And so we ought to not figure out how to fix a truck on 170 different ways across the country, right? And so that's where things like One Fleet in our maintenance program and then PBS and really spent on sales and capture around pricing. And you spent really a decade thinking how do you get functional excellence in the context of a local and distributed business? In parallel to that, how do you think about talent, right? It's a hard business to learn. So you think about making sure that you've got a lot of people with a lot of industry knowledge. At the same time, we believe in great functional external thinking. So I started out a decade ago as Chief Marketing Officer and really blending that composite strength, blending industry knowledge with functional excellence and then career pathing and getting people in lots of different roles, and Stacey is a great example, that we believe IR isn't just something you go sit in for 20 years, but it is a great opportunity to learn a different angle of the business and then go into a higher and better role. And our CFO over here is a good example of that process coming to life.

10 years ago, he was sitting on that same chair.

We'll do that again. We've got another high potential that we'll announce soon that's going to be sitting as -- taking over Stacey soon.

So just share for everybody a little bit putting you on the spot of -- how long have you've been at Republic?

I've been with Republic for 14 years now.

And then was that first job out of graduate school or college or whatever?

It was.

Yes. So...

I started as an intern.

What's that?

I started as an intern.

Okay. Sorry. The -- and talk a little bit about that career path, your finance background, but...

Sure. Yes, sure. And the IR role is one of the many examples and probably the more outside obvious example of how Republic very deliberately develops talent at all levels of the organization. I started as an intern, I moved and teetered through operational finance, core FP&A, the M&A team with Brian there.

Foundation for her success.

Yes. And then actually out to our field organization as the finance leader over one of our 10 solid waste areas before Investor Relations. So again, I'm one of many examples in the company of very deliberate talent development.

Well, and we can point to you, we can point to Julia earlier, who spent a long time in FP&A only to move over to us.

I have to mention, I hired both of those.

Yes, I knew you were going to do that's why I had to set up for it there. All right. So I think it's important to get this cultural message out that, by the way, you've done all this stuff in the last 9 months, and I asked the smart aleck question of what's your next act? But there's a long process of how you got to...

Yes, listen operate, all those investments into both people and functional excellence, right? Some of those things take months but years to put into place. And so we did the hard work because we understood where this thing could go. So when COVID hit, our business can get more challenged, it got better. And you've seen us expand our margins more than 200, almost 300 basis points at this point. And so I feel like we've got a very well-run company with a capacity to grow and to do more. And so back to acquisitions, time in place Board hugely supportive to say, "Hey, we've got a platform for growth." We can grow in a lot of different ways. We start with the recycling and solid waste. That's the foundation of who we are. But there's some...

I'll just remind everybody, you're a garbage company first.

Garbage company first. I'd like to say a sustainability company first. That happens to do with garbage. But we -- that's really the foundation, but there's other ways we can grow and those ways are not disconnected or synergistic, right? They help make the whole better than some of the parts.

Okay. Let's talk about this decision to do industrial services and what you think you bring to it. And you heard in the last panel, I mean, they're basically 6 players going to roll all the disposal assets. We've changed the ownership of one of them, but it's still 6 players. So what is the potential to bring the Republic way to this industry? And what should people look for as given you're going to do segment reporting as part of the tells on the success?

Yes. Listen, we're not impulsive, right? We're pretty thoughtful and deliberate. So we started out in this business. Really, the legacy is doing the Tervita deal, right, buying the U.S. assets of Tervita. And that was mostly upstream oil and gas, but they had some downstream. And that downstream we got into, and we figured out we could add a lot of value to that space in terms of material handling, safety, frontline labor management, just logistics. Those were things that we know how to do, and we're good at and we could really improve that part of the business. And customers were asking us to do more. They were saying as much as you can do for us, we want you to do that. Last year, we did the ACV deal. And largely building on our footprint in the Northeast. And same thing. We've got customers we can get into that we couldn't before. So for us, it starts with strategy and customers of what are they asking us to do? Where do we want to compete? And the idea of having a broader offering of environmental products and services was something that, again, they were asking us to do and we thought we could make money doing it. And then again, it's a very analogous business model in terms of collection, which is really field services and then post collection, which is incineration or disposal and understanding how to optimize those things together across the chain is something that US Ecology had this idea. They did the NRC deal, they did it right before COVID hit, but they didn't really have the opportunity to integrate those assets. And we see that opportunity, and we're really enthusiastic about what we're hearing from customers.

And things like One Fleet and Capture and what have you, have applications to this as well. I mean, this is a industry that is...

Yes, start with the talent agenda, right, people. We're cross-pollinating people. We've already built out the teams, right, staffed them up. So the leader, Rich King, is going to report it to Tim, right? He comes from our recycling and solid waste side, and then we're going to have 4 regions like we have 10 areas, 4 regions. And 3 of those 4 leaders are from US Ecology. So it's kind of, and the teams underneath there a full blend, so kind of best of both from a talent standpoint. And then again, the logistics, fleet, all the operational pieces, I think we'll certainly get some benefit out of. They do a great job on managing from a compliance standpoint, their post-collection assets. So we'll learn from them, and we've got that talent certainly coming on board with us. I think it's really on the commercial side of the business. In terms of go-to-market, revenue management, those are capabilities that we've invested a lot in, both from human knowledge as well as systems that will apply to that part of the business.

Okay. And when you think, Tim, in your side, from an operating side, you look at, like they were a very good landfill operator. I mean, so -- and you know a lot about landfills, all of that seems to be something that's net positive at the end of the day. I might miss...

No, I think you're right. We can obviously leverage off of what we do. But as Jon said, they have a lot of great knowledge and great engineering and compliance. I think building those teams together, we're going to learn a lot from each other.

Okay. And then there's more M&A to do. I think the hazardous waste place was meant to be in a consolidation phase. I'm curious if pulling this piece out of the cycle and doing what you've done, has it triggered more people raising your hand on the smaller side going, okay, I was thinking I was going to do this?

Yes. I mean, overall, I mean, completing the U.S. Ecology deal as a follow-on to ACV, I mean, it does create a disposal infrastructure platform for us to do the exact model that we did for decades in the solid waste space. And that's acquire tuck-in acquisitions to be able to tuck in around those disposal assets and be able to grow the business and then put that cross-sell model together that Jon was talking about.

Right, which you've alluded to $75 million to $100 million of overlapping revenue opportunity.

Conservatively.

Conservatively, right. So in the budget is $550 million of spend for M&A this year, having nothing to do with US Ecology, what's that appetite -- what's that market like -- look like? Is it -- can you successfully deploy that? Are there really enough sellers that meet your criteria from a financial standpoint?

Yes. I think as we said on the last earnings call, we've got about $400 million right now in addition to what we closed in the first quarter, that's in the late stages of closing and process. So I feel good about kind of this year, but valuations and the pipeline is still really robust. And I think it's important to know that a large majority of those transactions are in the recycling and waste side.

Right. Yes. I mean...

And that's great.

Yes. There's plenty to do still.

Plenty to do.

In solid waste consolidation.

A lot of runway.

If you think of the history, Michael, we used to say we're going to spend $100 million a year like that wasn't that long ago. We bumped up to $200 million. And if you look at the last 3 years, we did $2.2 billion, $1.5 billion of which was recycling and solid waste. And this year, I think in this year alone, we're going to probably inch close to $3 billion.

Right. Now the pace is going to settle back into...

For sure. There's not another big deal to do on the ES side for the near term, we're going to take that, integrate it, make sure that the thing is stabilized. There will be kind of tuck-in deals that naturally follow through on that. And then over time, are there more opportunities, and we'll see what that looks like.

So I always believe that good buyers have to be good sellers. Are there things that need to be cleaned up in the portfolio?

Yes. Well on the NRC side, the history of that was it was a PE-owned company that's backed and then US Ecology bought it and some different pieces. So they really had a field services business and upstream oil and gas business, emergency standby business and an international business. That international business we've put under strategic review. I think the likely conclusion to that will be somebody else is a more natural owner than us on that.

Nice little set of assets, but...

It is. But we're just -- we're not in Turkey and England, and there's a lot of transaction costs doing a subscale business there. And then the standby business will be a second one that we'll put under look. It's a great business, kind of annuity, coupon clipping kind of, again, emergency standby, most of it is standby, less emergency on that front. So we'll see what the connection is between some of the assets and other things. And if we're the natural owner, we'll keep it. If not, then we'll divest.

Okay. They had done some work around PFAS and you all have a different angle on the PFAS. So on your side from a leachate management, is there some technology or skills in there that crack open a window of -- I think solid waste is going to be a long-term part of the solution to PFAS anyway. But are there things that come with us that enhance that?

Yes, we do as well. This could end up being BPA could come out nationally or there could be some different legislation across the state standpoint. I think the benefit here is there's the portfolio of products that we have to offer and the solution we can provide is multifaceted. I also think they've got a lot of really interesting ideas that just given where their debt load was. They were capital constrained. We're not capital constrained, right? And so we're returns constrained and opportunity constrained because we won't do things that don't clear our hurdles, but there's some immediate projects on the landfill side that we think are interesting that we'll invest in, in the second half of this year.

Okay. So in business America and public markets, everybody wants to use the word digital and talk about something digital. Talk a little bit about the evolution of your infrastructure around the investments that have been made that we can point to real examples of what stood out and why our platform is so robust and healthy and puts you in this really good competitive advantage. And I'd argue maybe it's creating a little bit of separation.

Yes. I mean we spent a lot of time and energy and investment obviously on the digital side. So think about it from the customer standpoint and obviously alluding to what you're talking about in the operational side. Jon talked about Capture, and Capture, we've been talking about it for many years. But kind of through COVID and where we are today, that centralized pricing tool really gives us the opportunity to respond quickly kind of to the changing environment that the team does a lot of good things from the data and analytics, and we can be very surgical in our pricing side of that. On the operations side, we've built our RISE system. So think about from a dispatch standpoint, that visual tool for routing, that really gives the dispatchers the ability to be very dynamic in the routing and create the efficiencies. And for our drivers, they have tablets, that really make that proactive communication going from paper to paperless, and we're just getting lots of great feedback and positivity on that. We're about 2/3 of the way through that.

The rollout.

The rollout. We've got large and small container just got done, and we're jumping into residential right now.

And so rollout's one thing, capturing the advantage of, the operational advantage of it is, I mean, you've got to be early innings.

We are early innings. We were about 40% of what we thought we would get from a run rate standpoint. We said about $100 million, we're about 40% there. Again, we're just getting done. So we feel very confident that we're going to get to that part.

And just think about that rolling all the way into '24. So if you're actually deploying all the way through early mid-'23, you're not seeing full run rate benefit until...

Right.

And the run rate is a net benefit or a productivity offset to anything else that's going on.

Well, we think, again, we've talked about pricing in excess of our cost inflation before you even consider productivity, this is all added.

So this is all incremental. So there's $100 -- so if you're making $200 a day, you're going to make in $300 in 3 years, 2.5 years, is the way to think about it?

If you were making $200 2 years ago. Now we're making $240, and we're about to make $300.

Yes.

Okay. Okay. Got it. All right. So it's an incremental $60 from here. Got it. Okay. Perfect. You all broke through what I think were the magic of 40% gross margin, 30% EBITDA, you reset your EBITDA to $32 million. And you didn't do it, you got 50% of the models indexed, you didn't do it on the backs of better indexing...

Because I mean that's you have to come.

Yes, yes, that's this fall and into next spring. This, I think this is, this stuff is what that helped drive that is it drove that ability to turn the screw a little tighter each quarter and push that?

Yes, I think you're absolutely right. We saw kind of a ratable improvement over the last 8 to 10 quarters in terms of margin expansion. Even this last quarter, a little bit of offset given it's a weird comp and coming out of the post-COVID world. But the underlying business expanded 70 basis points. I mean, overcoming a huge fuel headwind. So we're seeing it at the P&L.

As Jon mentioned, when we first started that we structurally left the pandemic, it's not fully over. But when you take look pre-pandemic to where we are now, we are a healthier company than we were before. And you can see that in the margin performance.

And that's the quality of the revenue dollar as well as the execution of the service.

Yes, 100%. So you got to start with the portfolio. Who is your customer right? We went, took some punches along the way about non-regrettable losses. But listen, some customers are loyal and some are not. So listen most of our portfolio is with customers who are willing to pay more and willing to stay longer, right? That we're not a low-cost provider. We're a premium provider. That's who we are, and we've worked really hard with our 1,000-plus sales team and all these tools to go to customers who want more. And it fits right into the US Ecology acquisition because that broader set of products and services but that's what they want because they're the most complex value buyers.

Got it. Okay. So if I talk about the current business operating conditions, the sort of the 2 -- well, there's big inflation, and then there's -- put it in the line items of wages, fuel and then all else. The fuel number basically, there's a surcharge that's well established. There might be a slight lag, but it's that, you put that to bed. The only thing you got to think about is it's dilutive to margins because it's pass-through.

I think 2 different aspects, right? It's not really a cash headwind. It's just a structural.

Just a structural. It's just math, right? The wages you're all running at an internal cost inflation, net of fuel at a low 4, you produce over 4 price. You made it clear that you're covering cost inflation ex productivity. Your wage inflation is one of the lowest in the industry. I think you all have been doing something differently. I think Castillo talked about it this morning as well of a path of -- or a pattern of market-based wages. Can you talk about the legacy of that and why you find yourself in this position versus some of the peers. And you don't have, I'm asking you to contrast yourself so much what you've done.

Sure. Yes. Yes. No, I'd say this with humility, this is a dynamic environment, right? And this is a market that most people have not seen or operated in terms of inflation and pace and labor market tightness, right? So we're -- this is a very dynamic market. I think what's helped us is, one, the fitness of our cost structure. Even when CPI was sub-1, we were always giving our people a 2-plus-percent wage increase, right? And if you kind of layer in benefits, we're probably closer to 3, right? Because we believe there are real costs are going up. And so we said we're always going to do that. We do market-based pricing. And so every year, we understand, and we do it by role. So we understand competitiveness of drivers and technicians in the local markets in which we operate on that front. When the pandemic hit, we took care of our people, and we spent a lot of time in being the place where the best people come to work, so our employee value proposition. And I think the most exciting number for me was we do an employee experience, employee engagement survey. We do it twice a year. And we're very unique in that it's mandatory, and people tell you never do mandatory because that's going to tank your scores because all that boobirds come out of the woodwork and give you 0s, and get you a low number. Our number went up, went up in the last 6 months in this environment, which gives you a good sense of just how we're treating our people on that front. So listen, right now, we're looking at a handful of markets where we see turnover maybe getting a little hot for us. And so we'll go and again, we'll look at wages, and that's part of the value proposition. We'll also look at the leadership, and we'll look at it from every angle and degree, but we do not paint with a broad brush, right? Tim and Sumona and the HR team do an unbelievably good job of getting very granular. And then so I think our overall number ends up being a pretty competitive one.

Okay. To switch gears to fleet conversion. I'm actually going to come at the operator from it. I know where your passion is, and I'm not disputing that you're all in on EV. How do you successfully go all in on EV and get, and do it with a battery as the power source versus -- I get the electric powertrain, but with the battery, wherever my phone is the one thing runs out of juice, like that. It's -- how do you do 11 hours and not give out payload. And the cost of the whole thing will come down as manufacturing goes up, I get all that. But it's hours of service and payload.

Yes. Obviously, those are important parts of it. So we're in the early stages of that. We're bullish that we think the OEMs and the battery manufacturers is going to get there. So we're testing out. We have about 5 trucks today. Some of them are running of complete route, albeit a smaller route, but we think the technology is going to get there. The battery life and capacity is going to continue to evolve. And we see in the next couple of years that those trucks are going to be just -- works just fine compared to the diesel engine.

And you're in, you're all in on EV. Again, that's the powertrain though, from my perspective. So the source of the power -- is there flexibility in the model if you have to?

There could be over time. But listen, we see like in line of sight with battery power on EV, that it's going to cover now. When we say all in, right, we're starting with resi and small container.

Yes. Well, that's the logical place from a...

Right, like logical place to start and then over time, listen, I think the dynamics, but it's probably Generation 2 there before we get to roll off their industrial side of the business. But we see line of sight to it. And again, there's limitations, right? There will be extreme cold weather environments or we'll probably stay out of it in the near term or extreme hot on the other end. But again, we've invested a lot of time and energy with our supply base, right, in terms of making sure this is feasible, and then this isn't just buying a truck. This is a whole ecosystem or whole environment. You got to put infrastructure in the environment. We have to get really good at incentives, which we are in terms of understanding where to go. And how to offset the initial cost of this. So we've spent a lot of time and energy, and we're enthusiastic. It doesn't mean there won't be setbacks or twists and turns in the road. That's what happens when you innovate. but we're going to get there.

Okay. What's the top pole in the tent right now on this?

I think it's a range, right? It's not weight, right? It does weighs more, but again, back to the state and being in a state and local business and having good relationships, getting offset for gross vehicle weight for a period of time, right, I feel pretty comfortable on that front. It's range. And listen, when you get to 150 miles of range, you cover a lot for us on that front. We're already running successfully kind of in the mid-80s on that front. So we're not that far away. And again, some of the other things that we're working on, which we'll announce later in the year, I think, get us further long.

Okay. Renewable energy. You just announced an interesting joint venture. We did a landfill-gas panel up here earlier today. Clearly, I came away going. I think you touched on the direction this is going on, where less capital, more economics. This first round, I mean, we've been managing gas for a long time. So there's an awful lot of your gas, I'm presuming is tied up. And that there's a limited number of things that you had options on, but is there an opening here for some of that current gas that's tied up to free up and some bigger things -- so bigger than a few thousand scfm and you could see some of these bigger 6, 7, 10.

Yes, for sure. So I guess historically, we've been opportunistic, I'd say, to be honest, that's not right or wrong, but just what we were, which is it dependent on the municipality or a developer coming to us or a site that was obviously large, like we go take advantage of that, mostly electric facilities versus natural gas facilities. Some of those are starting to come to their end of life, and coming off-line. So 3 of the 39 we announced are legacy projects that need to be recapped.

But they're still small.

That are going to get converted. Those are a little bit bigger on the front. But again, the average size is still pretty small. One of the benefits of this relationship or partnership is it lets us get after these sites more quickly. And some of the smaller sites probably would have been more marginal for us from a return standpoint. But when you put the portfolio together, right, we can get after it more quickly. And based on your point, the economics of how much you put in versus get out, we did the stand-alone analysis of this if we did it ourselves. And you're talking about you're kind of winning a couple of million bucks from an NPV standpoint, and this has doubled the IRR and half the payback period because we can get after more quickly with that.

Right. And when you think about other things that can be uncoupled those opportunities, what else sits inside the portfolio of the company that is there something incrementally on recycling that ought to be talked about? Or is there a Capture program or One Fleet program for containers, for instance. What else is out there?

Yes, I think if you think broadly, I mean, strategically, we announced the polymer center.

Right? And I want to talk about that.

Forward integrating into plastics, and we think that's going to be a great opportunity for us not only to drive circularity but drive economics. And now is this changing the dynamics and profile of the company? No, it's probably a $200 million investment as we build out 4 or 5 of these things and about $200 million, $180 million, $200 million of incremental revenue at an EBITDA higher than our company average. So attractive, right, great IRR, great returns. But that's really around rigids, right, PET and olefins. I think what's exciting is, right now, we're having the conversation, okay, what about flex, what about upgrading mixed paper? And what about thinking about these value chains, right, when they come out of our recycling centers that aren't very well configured and other people are coming to us because all of these recycling opportunities, right, they're all predicated on aggregation, right? Everyone said, I want to do this, but subject to aggregation, and we're in the value chain, and we have the material that actually provides a very unique opportunity. And our mindset isn't to go it alone, right? It's to partner with other people, right, and take kind of the best of best.

Right. And why this area first?

It made sense for a lot of...

It's happening here in Las Vegas.

So we're building in Las Vegas, right? We happen to have a piece of land that's right next to our recycling center, right? So just practically the logistics made sense. We've got a big West Coast recycling footprint. So it's a hub-and-spoke model, so we can take all the things out of those recycling centers and feed those in Las Vegas, and we cover almost 1/3 of our recycling capacity in the center and the logistics makes sense. Again, I think we're going to end up having probably 3 more, and you think about something on the East Coast, something North and the Central and something probably in Texas.

Right. Okay. And this is -- basically, this is something that's happening. There's a middle market that does this already and you're internalizing it. There's not a...

No, this is a value chain that doesn't work as well. So we produce typically a PET bale, right, is mixed. Well, that PET bale is never perfectly PET. And so we send it to the person who wants that, and most of the time, that's going into pipes or park benches or things that it's getting down cycled. Now it's better than a landfill. But at the end of the life of that product, it is going to end up at a landfill. And by the way, when they get it, they probably toss 30% of the plastics away because we can't make a perfectly clean PET bale right now. Same thing on the olefins side, right? They want the olefins, right? They have to toss, the PET or whatever else is in there. This recycling center allows us to get capture higher yield, right? So we get the full yield coming out of that. We produce a clean flake at the end of the product, which the market doesn't offer right now, a perfectly clean flake, that comes straight out of the recycling stream from us. It gets diverted in another process.

And what's the yields of that -- when you say clean, we're having 3% contamination conversation or even less?

We'll get there, but...

It's probably around, call it, 2% to 3%. I mean it is a very pure bale of olefins and a very pure bale of rPET.

And the technology has advanced between optical sensors and specific gravity ways to separate the materials such that you can get to that level of...

Yes, absolutely. I mean this is being done in Europe right now. A little bit of difference in the model back to what Jon said with us being a natural aggregator. We've got the material on our back. We could go in and invest in all of our individual recycling facilities, but we're making the exact same product that we make today. What we're looking at a polymer center that we're looking to develop, it's a hub-and-spoke model where we're making new products that actually advance circularity for plastics. And it helps CPGs tell their story.

Okay. And we're investing the CapEx in one place versus 25 places.

Right.

Right, that's the benefit. That's kind of the unlock of it'd be prohibitive, not only from a cost standpoint, but from a space standpoint, we wouldn't have the space to do it in our existing recycling centers. So you could pull everything and the trans cost is easily overcome.

We can take a little bit of cost out of the recycling centers today just because you don't have...

To get to the highest level of quality at the bale.

Correct.

All right. Last item I need to touch on is -- it wasn't unique to you, but it was a little more visible is that the equity markets coming at you as a company from an environmental justice standpoint. And I'd like to give you an opportunity because I have this belief that, that perspective is starting with what the assets are, where they are physically today, and it doesn't remember that the asset was there 30 years ago, and there weren't anybody there, and now there are people around and what have you. So talk a little bit about what people need to understand about Republic and Culture and environmental justice and maybe that helps get a better perspective.

Yes, Broadcom, this is the season, right? So almost definitely. The company is facing. Proxies that they never had before because just the point in time we are and in terms of the political environment, and we had one environmental justice. We care a lot about the communities in which we live and operate. Again, the vast majority of our team members live in the communities where they work and do the work and do the service. And we have a standard operating model, standard oversight around those assets. And the underlying assumption is that these assets are harmful and they're not, right? We think of them as a benefit to the community. And I don't think you have to look too hard around the world to understand what the world looks like without a post-collections infrastructure in the environment. All that being said, we believe in transparency. And so we published all the information around where our footprint lies, and it's incredibly equitable in terms of socioeconomic and racial profile and ethnicity in terms of who has access to those facilities because we're 800 dots on the map we're incredibly distributed. So we feel really good about our track record. Again, this is probably being motivated from different angles, but we'll take the high road and keep doing what we do.

Okay. Well, again, we've run over time. I want to thank all of you. Congratulations on your new role, and I look forward to teaching another person about IR.

Thank you.