Waste Management, Inc. (WM) Earnings Call Transcript & Summary

Good morning. It's Jeff Silber with BMO Capital Markets. I'm the analyst that covers Waste Management, WM is the ticker. We're thrilled to be joined this morning by 2 representatives of the company, Tara Hemmer, who is the Senior Vice President of Field Operations; and Ed Egl, who is the Senior Director of Investor Relations. Just to get some logistics out of the way, this is a fireside chat. I will be moderating it. We've got some questions that I've prepared in advance, but we also have the opportunity for you to ask questions as well. You'll see there should be a chat box that you can submit your questions, and I will be monitoring that. We'll be trying to intersperse those questions with mine. If, for some reason it doesn't work, feel free to send me an e-mail. It's Jeff, J-E-F-F dot Silber, S as in Sam, I, L, B as in boy, E, R, [email protected], and we'll be happy to ask questions on your behalf. So again, thank you all for joining us, and Tara and Ed, thank you, especially as well. I really appreciate that.

[ Happy ] to be here.

Maybe we can just -- sorry -- we can just start maybe just at a high level. I'm sure most -- everybody is familiar with what Waste Management does, but maybe you can just give us a brief overview of the company first.

Absolutely. So first and foremost, we are the largest environmental solutions provider in North America. We have a very diverse asset base and that also goes to our customer base as well. Very, very recession-resilient, which you've seen during the pandemic, and also a very strong cash generator. One of the things that I like to say when I'm talking to folks is our business, we make living in cities and communities possible. We take care of waste and recycling needs in an environmentally responsible way, and we do that through our unparalleled asset base. We have a very strong presence in 16 of the top 20 metropolitan markets. In North America, we have over 250 landfills, 300 transfer stations. And now when we talk about our greatest asset, our people, over 50,000-strong employees with the Advanced Disposal acquisition that's coming from [indiscernible]. Beyond that, we are a sustainability leader. I know this is an ESG conference and -- so we'll get into a lot of our sustainability platforms. But we run the largest fleet in North America of natural gas vehicles, and over 70% of our routed fleet now is C&D. We have over 125 different renewable energy plants, including 4 renewable natural gas plants and making a strong push for more of that closed loop opportunity. And then finally, the Advanced Disposal acquisition, which we completed in late October, and we're deep into the integration now, we see a whole lot of opportunity coming out of that acquisition to [ blend ] these 2 fantastic companies together. So that's the general overview.

Fantastic. I'm sure we're going to get into all those topics, so I appreciate the background. You mentioned the recession resiliency, so why don't we start with the pandemic. And I know the pandemic has had different impacts on various parts of your businesses, but maybe you can just kind of review that for us, that would be great.

Sure. I think what's really important to note is we have a very diverse customer base. We don't -- we're not really tied to 1 particular vector. So while of course, we service the airline industry and the hotel industry, we also serve grocery chains and logistics companies, which were some of the bigger winners when you look at what has happened throughout 2020. Obviously though, we do represent what happens in the broader economy. And when you look at what happened in Q2, our commercial volumes were down in the teens. Our industrial volumes were down about 20%. But we saw a really nice bounce back when you look at our Q3 numbers, where commercial volumes were down about 5% and industrial volumes being down 7%. And the most optimistic number, really, on the page was our landfill volumes, which in September for MSW or municipal solid waste, was up 2%. We also did see, obviously, as people move from their offices to their homes, we saw an [ impact ] on our residential line of business where our pounds per home or our weights per toter were up. And in some locations, up 20%, that's obviously normalized at this point and we're in that digits range. But these are things that we're trying to navigate. And I think the other important point here is that we've learned so much coming out of this pandemic on how we can run the business and how we can run the business more efficiently and really think through the new cost structure that's going to exist as volumes come back.

Why don't we talk about that? I was going to ask that later, but I think it's a good segue right now. What have you learned? What will the business look like post pandemic compared to prior?

Well I mean I think there's a couple of key categories, right? So on the operating side, what we've been able to do to run our business more efficiently is just tremendous. Obviously, we had to make some decisions very quickly when volumes were declining so rapidly on overtime. And we need a very strong people-first commitment to our frontline employees that we were going to provide them a 40-hour guarantee. They might have been getting 50 or 52 hours previously, but that 40-hour guarantee provided them some economic stability in really uncertain times. What that did for us though is we knew we were going to need our frontline employees as volumes came back. And it helped us to really think through how do we, as volumes come back, how do we change this overtime environment that we've been working in? So a great example of it is, I've talked about our volumes, commercial volumes being down about 5% while our overtime is down north of 20%. So we're finding ways to route our trucks more efficiently, schedule and plan our time more efficiently, and that's something we're looking at, holding on to, including looking at workforce evolution and how we can plan, schedule and do some dynamic things with different work weeks. The second piece is on SG&A. And we've learned that there are some things that perhaps that we were doing before that we don't need to be doing in the future, and travel is a great example. Of course, travel will increase in the future compared to what it was in 2020, but how we engage as a team will be different, leveraging video technology, like every other company. And then also looking at some of our capital allocation and ensuring that we're being disciplined in that regard as the business dynamically changes. And we parked over 800 trucks in the peak of the pandemic, and we've been very stingy about pulling them back. We're really looking at asset utilization.

Okay. That's really helpful. Maybe we can get back to what's going on now. Maybe I'm watching too much television, but you're seeing cases, unfortunately, rise in almost every area of the country. And with the increase in lockdowns that are starting and potentially coming, are you seeing any impact in -- on your business right now that might have differed from where we were a month or so ago?

Yes. I mean I think it's still a little bit too soon to tell. But obviously, one of my areas of responsibility is California, and California's lockdowns are pretty dramatic right now. So we -- there probably will be some volume impact. Our hope here in the backdrop in the news is that, but also what's happening with the vaccines and the vaccine distribution. And so we're optimistic about what 2021 is going to hold in that regard. But obviously, when you have communities that are going into lockdown, it will have impacts on volumes here and there. But at the same time, I think we're able to react much more nimbly than we did before.

So let's talk about when the vaccine comes and we start to get back to some sort of normalcy. I'm not going to ask for numbers or guidance, don't worry about that. But what areas of your business would be impacted first and how?

Yes. So it's interesting, so I just want to give a little bit of a plug to our employees, too, because our employees were essential workers, and we're working with NWRA, which is our national trade association, to make sure that they're towards the front of the line in getting a vaccine so they can continue to do the hard work that they've been doing. But obviously, when you look at the vaccine, one of the key things that clearly needs to happen as a society is we need to get our kids back to school. We need to get our kids back to school across the entire country in a live setting. And for us, if you look at our commercial volume, 8% to 10% of our commercial volume was school. It was about 3% to 4% of our revenue, and that includes -- some of that includes colleges and universities, so that would have a real positive impact. And then obviously, as the vaccine is distributed, it will give a little bit more comfort to do some of the things perhaps that they were uncomfortable doing before, which includes travel and leisure, both from a personal travel perspective, but business travel as well. So if you think about some of the sectors in the hospitality realm -- I happen to cover in my field operations role -- Florida and Orlando is one of my markets. And as people become comfortable going to those game parks and whatnot, that will have a positive impact on us.

Okay. That's helpful. So we've covered volumes to some extent. Why don't we talk about the other part of the equation, which is pricing? I think most folks have been surprised how resilient it's been because what we've seen coming out of past downturns, you don't necessarily see prices come down, but you see the rate of increase kind of slow a little bit. Can we talk about the current environment and why it may be different than the prior environments?

So I think what's important to talk about when we talk about pricing is customer loyalty, and we made decisions in the peak of the pandemic to take care of small businesses and provide them some relief, and that's really paid off when you look at how we measure customer loyalty. So we use Net Promoter Scores and our Net Promoter Scores on commercial more than doubled. When you have that type of customer loyalty, you can also articulate and communicate value, and it helps with prices being able to stick. The second piece is, we had been working well in advance of the pandemic on both landfill and residential pricing, and I'll speak to each of those in a moment. On landfills, one of the things that we were focused on is ensuring that we were priced based on the changing cost model. We have seen increases in costs related to region expenses and also cost of cell construction. And so we were taking very prescriptive, data-driven approaches to ensure that we were priced right. And you can see that in our result. On residential, we were working very hard with our public sector teams to provide information to our municipal customers on the value of having us as a service provider and making sure that we could make money and improve margins in that line of business. So a lot of that work had been underway, and obviously, that will continue post pandemic. If I had to sum it up, I think a lot of the customer loyalty elements that we had in our business, combined with the data-driven approach that we've been taking, has really helped us continue to drive price up.

Okay. You mentioned the public sector customers. Can you just remind us what percentage of the business that is? And do you think we might see pressure going forward? You typically see tax revenues lag in an economic recovery.

Right, right. And that's something that we're watching really closely. If you look at our municipal customers, a lot are -- almost all of our municipal contracts are tied to some sort of -- whether it's a CPI or water saver trash, and we've been successful in converting a lot. and we've been successful in converting a lot of them outside of that CPI environment. And so we're watching very closely what's happening with municipal tax revenues. But at the same time, again, I go back to that data-driven approach. We have to -- our job is to communicate to those municipalities what it takes for us to provide service. And so we have some examples where we might have had a customer who was with us for -- a municipal customer in Florida, a great example, have been with us 30 years and we looked at it and examined that it just wasn't priced the way it needed to be priced based on the service we're providing, and went to them with almost a 100% price increase. We ultimately lost the business to some -- another service provider, but I can assure you, when you look at our margins and our ROIC, we will be better off for it. So we likely may and will see a decline in the revenue and municipal business based on some of those decisions that we're going to have to make. But again, we know that our profitability [ will ] benefit.

And again, can you remind us roughly how large that business is for you?

Yes. Ed, can you just -- I know Ed's on, if you have that, that would be great.

It's about -- 18% to 20% of our total business is residential.

Okay. All right. That's great. That's helpful. Tara, at the beginning, you talked about the merger with Advanced, so I wanted to focus a little bit on there. I know it's been what, about 1.5 months or so, if I remember correctly, since it's closed. What's happened since the deal has closed? If you can get us up to speed, that will be great.

Absolutely. So one of the things that we always said was that success on day 1 for our customers and employees, it would look like nothing had happened, that it was seamless. Now the advantage to the delay, because this obviously went longer than we all anticipated, was we had a heck of a lot of time to plan for a successful day 1. And by any measure, day 1 was really successful. I spent a lot of time out in the field visiting some of our operations in Florida, Georgia and Alabama, and a lot of excitement about the new ADS employees coming on to the Waste Management team. So what we've been doing is really looking at those things that you would expect when you think about synergies. Where can we look at route optimizations? What are some of the disposal synergies that we think we'll be able to go after? And we've seen some of those occur, especially on the disposal synergy side early on. Some will take a little bit longer, depending upon what we've had to route. And then the second piece is looking at some of the other elements of SG&A and capital. Obviously, we had a view on what it is we thought we would be able to do now that the 2 companies are together. We are having much more robust discussions about where we thought those opportunities were and how we're going to go after them, and working very, very hard on making sure that we have a clear handle on what those synergies are and what the time line will be to Waste Management benefits, which that will occur in January, and they've been very complementary of the Waste Management benefits package. I mean the value of a WM job is huge, and we take great pride in how we treat our people. So we really were trying to make sure that we took a very prescriptive approach on making those employees feel that way because they've been under this cloud of uncertainty for many, many months, and we felt it was important to make them feel like they were a part of the WM family. So really, I mean, I don't have the stats in front of me, but based on what I'm hearing, no, we're not seeing issues.

Okay. It's another question coming in more people-related. Are you still providing the 40-hour guarantee to your employees? And does that apply to the ADSW employees as well?

We are still providing the 40-hour guarantee. At this point in time though, it really hasn't been triggered as much because the work has come back. As you can imagine, when our volumes were down 20% in industrial, that was much more necessary than when the volumes are -- they're not back to where they were, but only down 7%. So we have the flexibility to do that because if you look at the average overtime hours pre-pandemic at that 52- to 55-hour work week basis and bringing folks down to a 40-hour day and redistributing the work, because volume is ramping up, it's not as necessary. But it is still in there as a backstop.

Okay. One more people-related question before I move on to another topic. Did the 40-hour guarantee, did that help reduce employee turnover before the merger?

Oh well, I -- on the Waste Management side, absolutely. I can't speak to the ADS side. But if you look at our turnover, our turnover had been running in the -- it would bounce around between 21%, 22%. For Q3, it was between 18% and 19%, I believe, so that's a pretty significant reduction and big piece of that -- and in my field visits when I would talk to our drivers, they would say, "You didn't just take care of our health and safety, " because we were very prescriptive about our COVID-19 protocols, "but the fact that you came out early and took care of us economically and gave us that economic stability so we didn't have to worry about that when our friends and loved ones were being laid off or furloughed or fired, that went a long way." So we're definitely seeing that employee loyalty carry through.

Okay. That's great. We've got another one from the line. I don't think this is referring to ADSW, I'm assuming this is referring to WM beforehand. Can you talk about trends in customer churn. Are you still seeing customers close shop?

That's a really interesting one because I think that there's this perception that, that's what we're seeing, but we're not -- we saw much more in the way of service decreases and customers coming to us and saying, "I need to reduce my service level or I need to pause my service level." We're not seeing that dramatic of an uptick in business closures. At least, not yet.

And in terms of those service decreases, are -- have most of them come back to some sort of normalcy?

Yes. Well I mean when we look at that, I would say in that 70% range, we've seen the volume come back. Obviously, there are certain sectors that -- and you could imagine, like hospitality is one of them where they're not at the same service schedule as they were pre-pandemic. But we consistently see those service days increase over time. So perhaps they were a customer who went 5 days a week and they moved out to every other week. We're seeing, over time, maybe they moved to once a week and then 2 times a week and 3 times a week and we're watching that closely.

Okay. All right. That's great. We'll step back a little bit. I know at the Investor Day, it may have been a couple of years ago already. Your company spent a lot of time talking about what you're doing from a digital perspective. Can you just remind us what you're doing? How it differs, your company, from some of the others? And where we might see some of the areas going forward?

Yes, I'm glad you brought that up because it was -- Investor Day, it does feel like many moons ago in May of 2019, about 18 months ago or more than that. And I'm glad you brought it up in that context, because digitizing the customer experience was something that was obviously, very clearly on our road map pre-pandemic. But what we learned, like many other companies, is there are some things that we did in 7 days that pre-pandemic, we would have thought would have taken us 7 months. So we're definitely accelerating some of our customer service digitalization efforts. And so well, what does that mean? What it really means is we want to make sure that our customers can communicate with us in their channel of choice. If they want to communicate with us online, they can do whatever they need to do with us online. So if they want to sign up for service, if they want to increase their service level, if they want to add a different location, if they want to pay their bill, all of that is in progress on digitizing that customer experience. I think the other key piece that's important is because we are, at our heart, a transportation and logistics company, we need to make sure that we're connecting the front end to the back end. And it's one thing to be able to provide all those capabilities, but our ground managers and drivers need to have that connection that digital thread between the 2. And so we're working hard on making sure that we have the platforms and our operations that connect to the front end. And that includes looking at how the tickets flow directly to our drivers. Does that happen in real time? Do we have the right container inventory platforms? What about enhancing and making our routing and logistics platforms more dynamic? So it's all of those. And I think that's a really important point because at the end of the day, we have to deliver on our commitments to our customers, and that happens in the operations realm. So it's really bolt in connecting the 2.

That's great. And actually, along those lines, I know some of the other industries that we cover, when they go through digital transformation, sometimes it's hard to get employees to buy in when they're used to operating without that. Can you talk about what you're doing on that end? Are you seeing any pushback? Is there training involved? Any color would be great.

Yes. It's interesting because several -- it probably goes back to 2011 when we put the onboard computing units, so basically, tablets in our trucks. Everyone was saying, "Oh, my gosh, the drivers are going to have such a tough time with this." They're used to the paper route sheets. After a day or 2, it was -- and there are a couple of drivers here or there back then who struggled, but for the most part, it was very intuitive. And now what we see is that this is more of a pull. Our employees are asking for many of these enhancements. When can I do that? When can I track my time on my onboard computing unit? In fact, throughout the pandemic, one of the things that we did was we rolled out, it's called the WM Now app, and it's a way where we can communicate in real time with our employees on their own time. And that's an example of how we're treating our employees from a benefit and communications perspective, but it's an example of the pull. And I think what you see -- because in our home lives, we're so accustomed to using our phone to do some of the most basic things, our employees feel the same way when they come to work. They want to be in a position to have those things work through in a seamless way on a computer or a tablet or a phone.

Yes, makes a lot of sense. It makes a lot of sense. We've got another question from the line around technology. We are hearing and seeing about a lot of disruptors coming into this industry. How will that impact your business?

Yes. So I mean I think that one thing that always gets asked of us is that we have -- there's this perception that there's this wide and deep moat, and it -- we do have to keep a wide and deep moat when it comes to our post-collection assets, our landfills and recycling facilities. But I will tell you that one of the things that we've always been very forward-thinking about is looking at, are there other technologies that are out there that could replace some of the assets that we have today. And so we have a group within our company called Corporate Development and Innovation, and they actually partner very closely with our sustainability team, too, to look at, are there technologies where we could be converting waste to some other product. We are invested in 3 funds so that we can have the access to some of the information and new technologies that might be on the horizon. And our CEO, Jim Fish, has been very clear that he wants Waste Management to be a part of that going forward. For now, landfills are the most cost-effective, environmentally responsible way to dispose of waste in North America, along with our emerging recycling platform. But if it is a replacement technology, we can see embedding that in our business.

Okay. I think that's a good segue to ESG. That's one of the themes of this conference so maybe we can talk a little bit about that. Obviously, the E in ESG is environmental, that's what you guys do. But can you talk about what you're doing from an ESG perspective? What's important for investors to know?

Yes. I think this is great because a lot of folks do not know that Waste Management, before ESG, was even called ESG. Going back to 1993, that's when we issued our first environmental report. So we've been at this a while. I think that what we're starting to see, obviously, is the convergence in a very meaningful way of all 3. And for us, on the environmental side, we have pretty ambitious goals, and our ambitious goals are built and strengthened around the business. So when we think about it climate change and climate impacts, we already offset 3x the greenhouse gas emissions that we produce from the services that we provide and our goal is to get to 4x. We signed on to the We Are Still In pledge. And that pledge is converting now, with the President-elect, Biden, to, I believe, if we're still here and we're still committed to that climate pledge. And so we're embedding many of those things into our operations. I talked about our compressed natural gas vehicles platform getting to 70% of our routed fleet this year, and that's going to expand. Creating the closed loop on the environmental side where the landfill gas that's generated at our -- many of our facilities, really, 4 now and it's expanding, they're now -- we're now converting that to renewable natural gas, and that is now fueling our -- some of our trucks, and we're expanding that through partnering with other companies on using fuel from anaerobic digesters. On the recycling side, we continue to expand our number of recyclables that we handle and north of 15 million, when you include composting. And a lot of this is around the pull from our customers. Our customers are seeking this from us. And what we're doing now, it's not just good for the environment, it's good for business, good for our people. A great example of that, compressed natural gas trucks, when we first made that investment, natural gas prices were disconnected from diesel price. It was a lot cheaper and the economic benefits were there and the environmental benefits were there. Well now what we're seeing, obviously, the pricing is more connected. We're seeing these benefits as a result because there's a lower cost to maintain those vehicles and our drivers who drive those vehicles love them. They're quieter, and obviously, they're cleaner, and they want to be in that asset. So it's a great connection with our people. And that's a good segue to what we're doing in that regard because on the people side, we've been talking about inclusion and diversity for several years now. Not just talking about it, but really taking a prescriptive approach to ensure that the people that are working for us and leading our company, like the communities they serve.

Yes. We have a few questions from an ESG perspective. You actually answered a lot of them in your answer, but there were a couple that stood out. You mentioned the migration to CNG. What about the adoption of electric vehicles? Is that something the company is considering?

Yes. So we are -- we like to say we're sort of agnostic to the technology. Obviously, we're invested in CNG today because CNG is the technology that today can do the work on behalf of our customers and also has environmental benefits and economic benefits. With electric vehicles, we're watching electric vehicles closely for our industry. We have some pilots out there on more lighter-duty vehicles. But if electric vehicles, and we think they will get there, if they can have the range and the power output that we need for our business, we could quickly -- or we typically replace anywhere from 8% to 10% of our fleet every year. So we could take a district and make them an electric vehicle district. So we're watching the technology closely. And really for us, it's about the range of the vehicle.

Okay. You touched on recycling. Can we get an update where you are? What percentage of the waste is recycled? What's going on with commodity prices, et cetera?

Sure. So on the recycling side, we're really proud of the progress we've made. If you look back several years to where we are today, we really -- we're focused, and gotten very far on reframing the business model and making the business a fee-for-service model. So we have over 80% of our contracts are now in that fee-for-service model, and that took some time, but you're seeing it in the results. We also, through our battle against contamination process, which is a program where we're charging our customers if we're seeing things in the bin that should not be in the bin, and this is about improving profitability but changing customer behavior. We've had great success with that program, and we've also seen residents -- or the things that go through our plants that can't be recycled, that residue percentage, reduce. We still have a ways to go. If you look at our sustainability report, we have an interim goal to get to 10%. We're in the high teens at this point today. And one of the ways that we're going to get there is through technology. So we continue to make investments in recycling technology. We've invested over $200 million over the last couple of years, and we have a new state-of-the-art facility in Chicago. We have one that rolled out in Salt Lake City and now in Raleigh, North Carolina. And what we're bringing to the table with these facilities is advanced technology that can adapt to the different streams that are in the materials that show up on our doorstep. I think that's really important because if you go back 10 or 20 years when some of these facilities were built, people were reading newspapers in a paper form, and now no one is doing that. If you look at what's happening with everyone going to a work-from-home environment and Amazon and Walmart boxes showing up on people's doorsteps, that's a transition, and the municipal stream is changing as compared to what might have been in the commercial stream. So our systems have to adapt and technology can help us there, and it can also help us with labor, which historically, had been one of our largest costs in our marks.

True. Again, another question from the audience, and I'm assuming this is coming from one of our European or Canadian investors, and I'll just paraphrase this. Why is sustainability so not important to the U.S.? How do we change that behavior? How's that?

That's might be a topic for a whole other session. I think the answer to that question, because that's like an overarching statement, I think when you talk -- the way I would answer it is, I think when you talk to youth, what matters to youth -- and many of us probably on this phone have young kids or teens or kids in their young 20s. It -- this is probably, if not the #1 thing, it's typically the #1 or #2 of items that are important to them is the environment and climate change. And so while on its face, it appears like United States is not focused on it, I think this is something that is going to improve and increase as the youth voice is listened to.

Okay. It's just going to take some time, unfortunately. But it is what it is. Since this is an investor conference, maybe we can get some of the financial questions out of the way. So let's assume we are back to some type of normalcy in a year or so from now. What could we expect in terms of your long-term growth targets? And how do we get there price versus volume?

I think when you look at what we said at Investor Day, I think it's an important data point because it does really talk to a "normal" environment. And looking at the 3% to 4% revenue growth, 5% to 7% EBITDA growth, 5% to 7% free cash flow growth, and then obviously with our technology investments related to [ CSD ] and some of the other things that are on the horizon, we could see higher numbers in that, depending upon how those play out. So obviously, too, as we look at the Advanced Disposal acquisition, we have synergies associated with that in the $100 million realm that we're going to be going after in, obviously, 2021 and into 2022. I think what it comes down to is really looking at our cost structure, and we're going to evaluate our cost structure. We have been talking about M100 and some of those programs pre-pandemic. Those didn't go away. Maintenance and service, delivery optimizations, they didn't go away. We're still looking at how we're going to strip costs out of the system, and at the same time, on the top line, [ CSD ] and customer loyalty, we think we'll be able to grow our business on the volume side and then continue with price discipline.

Okay. I had to ask this question, since it seems to come up in every meeting. We had an election that I think most people have accepted, and it looks like we're going to have a change in administration. What impact, if any, do you think that will have on your business?

Yes. So I mean I think it's still a little bit soon -- too soon to tell. But what we'll say is that for us, we're a highly regulated industry and we hold ourselves, at Waste Management, to a very high standard. So typically, when there is increasing regulation, it actually benefits Waste Management. So we'll look to see what happens in a Biden administration on the environmental policy side. But we do think regulations could benefit us. The other key area where we think there will likely be a benefit, and I talked about our renewable natural gas plant, is on the renewable fuel standard policy. We think the Biden administration will stabilize that program and pricing on RINs will be favorable moving forward.

Okay. We got one more from the audience. Now that the ADS deal is done, will we see other acquisitions from your company? Are there any holes in your portfolio?

Yes. So obviously, our key focus is successfully integrating ADS. But if you look at where the ADS acquisition occurred, it really was everything east of the Mississippi that was impacted. And on the other side, there was no impact. So what I can tell you is we have a robust acquisition pipeline. We do think that there's going to be further consolidation. If you think about the investments that we're making on technology and then also still some of the pressures that exist in the labor pool, that could cause some companies to look towards selling, and we have a great team in place who looks at those opportunities.

And this is just sort of a segue off of that. Do you think we'll have any tax changes in the Biden administration that might accelerate that?

I think a lot of that depends on what happens, a, with Georgia, the 2 runoffs in Georgia and which direction they go. I think the tax policy change in a Republican [indiscernible] is probably less likely, at least in the immediate term, but it's something that we're watching closely. And if there is a tax policy change, we'll address it.

Okay. I think that's great. I see we're out of time. Again, Tara and Ed, really appreciate your time and those of you that dialed in from the audience, thanks so much for joining us and hope everybody has a great day. Take care.

Thank you.

Thank you, guys.