Republic Services at 11th Annual Waste Symposium: Strategic Growth and Challenges

On Thursday, 03 April 2025, Republic Services (NYSE: RSG) presented at the 11th Annual Waste and Environmental Symposium, providing a detailed overview of its current operations and future strategies. The company, a leader in environmental services, highlighted both opportunities and challenges, including its pricing strategies and operational efficiencies, while emphasizing its adaptability to regulatory changes.

Key Takeaways

• Republic Services aims to maintain pricing 100 basis points above cost inflation, with a target of 5% yield in 2025.
• The acquisition of US Ecology has significantly boosted the Environmental Solutions segment’s EBITDA margin.
• The company is investing in sustainability initiatives, including opening polymer centers for plastics circularity.
• Republic Services expects limited direct impact from tariffs and regulatory changes, focusing on state and local regulations.
• The ideal leverage ratio for the company is between 2.5x and 3x.

Financial Results

• Market Cap & Debt: Republic Services has a market capitalization of $76 billion and approximately $12 billion in net debt.
• Revenue Streams: Over 12% of the company’s revenue is derived from environmental solutions.
• US Ecology Acquisition Synergies: Initially expecting $40 million in cost synergies, the acquisition realized closer to $50 million.
• EBITDA Margin Expansion: Since acquiring US Ecology, the Environmental Solutions segment’s EBITDA margin has expanded from the mid-teens to the mid-20s.
• Tax Impact: The extension of bonus depreciation for 2025 could add $75 million to free cash flow, while the expiration of the CNG tax credit could impact the company by nearly $20 million.

Operational Updates

• Business Domains: Republic Services operates in traditional recycling and waste, environmental solutions, and sustainability innovation.
• US Ecology Acquisition: The acquisition added critical assets, including five hazardous waste landfills in the U.S. and Canada.
• Polymer Centers: Two polymer centers are operational, with a third announcement expected by midyear. These centers process collected plastics into reusable materials.
• Customer Loyalty: Republic Services boasts a customer loyalty rate of over 94%.

Future Outlook

• Cost Inflation & Pricing Power: The company anticipates 4% cost inflation in 2025 and aims to price 100 basis points above this.
• Margin Expansion: Targeting 30-50 basis points of EBITDA margin expansion.
• Regulatory and Tariff Impact: The company expects limited direct impact from regulatory changes and tariffs but is prepared for indirect effects on consumer health and manufacturing.
• Manufacturing Resurgence: A potential resurgence in manufacturing could positively influence the Environmental Solutions business and landfill special waste volumes.

Q&A Highlights

• Leverage Ratio: The company maintains an ideal leverage ratio of 2.5x to 3x to protect its investment-grade credit rating.
• Contracted Business: Over 85% of Republic Services’ customers are under contract, providing stability.
• Differentiation: The company differentiates itself by offering comprehensive environmental solutions, simplifying operations for manufacturing customers.

For a deeper understanding of Republic Services’ strategies and financial performance, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - 11th Annual Waste and Environmental Symposium:

Unidentified speaker: Increased responsibility across the business. Aaron joined in 02/2007 and took over investor relations in 02/2022. Republic has 312,000,000 shares, trades around $245 for a 76,000,000,000 market cap and about 12, billion of net debt. Gentlemen, welcome. I’ll sit down, and we’ll have a nice chat.

Thank you. Well, it’s great to see you guys. Thanks for being here and making the trip out. Sorry about the weather. It’s not Phoenix.

Well, maybe, you know, maybe we just can do just start off, Brian, for those maybe a little less familiar, could just give a quick, brief overview of what you guys do and how things are going.

Brian, Republic Services: Yeah. Republic Services. So we’re a leading provider of environmental services, predominantly in The U. S, but also in Canada. We operate primarily in three domains.

So our traditional recycling waste business, which is a vast majority of our business. A little over 12% of our revenue is in environmental solutions, so think industrial hazardous waste. And then increasingly more, we’re building out sustainability innovation. So these are putting businesses around both decarbonization as well as circularity.

Unidentified speaker: Sorry about that. Okay. Let’s maybe let’s talk about, you know, again, we’ll hold maybe hold the tariff discussion, which is beneficial to you guys till the end. You guys have done a lot of acquisitions recently, have grown in Environmental Solutions. Maybe you could sort of talk about your traditional business and then why you look pivot more into the environmental solutions industry.

Brian, Republic Services: Yeah, if you think about why we expanded more broadly into environmental solutions, customers actually brought us into that business. So we have a $1,500,000,000 market vertical that’s focused on manufacturing end markets. And these customers were saying, you pick up the non hazardous waste material, the traditional recycling and the solid waste, why can’t you pick up this material as well? Right? So again, these customers, they value safety, right?

They value convenience, right? And they value performance. And so we got into the business in a smaller way. We bought a company, The US assets of Tervita, which was primarily in the upstream oil and gas business, I think the drilling muds. But they had a downstream business as well.

And we started to build out that downstream business, primarily in The Gulf, in a slightly it was a silent way, but we were building it out piece by piece, and we realized that these customers really did value the services that we were providing. So then we expanded into the Northeast, and we then looked and said, this is a there’s natural synergies, there’s cross sell opportunities between the non hazardous waste business and then this industrial waste business. So when US Ecology and again, this was a business that had irreplaceable assets. When you think about the post collection infrastructure, which tends to be the moat in both the traditional business as well as in the environmental solutions, they had five of the 18 landfills in The US and Canada. So 40% of every hazardous waste ton that goes to a landfill went to one of these five.

So irreplaceable assets, really strong culture around serving the customer, they just got into a little bit of a debt trap. The leverage was around five times, and they couldn’t get out of the way of the leverage itself. So it became a unique opportunity for us to expand into this business, but do it in a prudent way from an investment perspective. So we acquired that in May of twenty two. Right?

We predicated the deal on $40,000,000 worth of cost synergies. But we knew that there were revenue synergies above and beyond that. Again, just in any deal, we don’t pay for revenue synergies. The ability to cross sell between that $1,500,000,000 market vertical I mentioned as well as the ability to price. And what you’ve seen is that when we bought that business, it was kind of a mid teen EBITDA margin company, as you saw that the Environmental Solutions segment is now in the mid-20s, so we’ve moved that business nicely.

There’s still room to run. We’re going to settle into a more normal cadence right now as far as how we’re going to move that business, but we still think the EBITDA margin expansion opportunity in that business moves a little bit faster than what we see in the traditional recycling waste business.

Unidentified speaker: Well, you’ve done a great job. And looking back at all, it makes sense. But you guys nailed it with that. Well done. Maybe if we talk about the current outlook on volumes.

Obviously, going into this year, we’re seeing some trepidation with The U. S. Consumer. Maybe you could just talk about what you’re seeing right now with volumes and the outlook.

Brian, Republic Services: Yes, I think this is one of the benefits of having a high floor, right? A vast majority of our business is scheduled service, right, which isn’t necessarily impacted by changes in demand, at least in the short term, right? Because again, when you think about a majority of our business, you are charging for the frequency of service and the size of the container. We’re not charging based on weight for the most part. So in periods like this, again, that part of it, it continues to sit there.

We continue to provide a good quality service to our customer and we continue to see the same number of units, The cyclical portions of our business certainly can be impacted, right? So that includes construction activity, which really, if you take a look at construction activity in The U. S, it’s been in a negative demand environment for at least the last couple of years, And we’ve seen that in our volume performance, as well as on the manufacturing sector, even though kind of the progress I just mentioned of what we did with that US ecology business, that was in the backdrop of, I would say, a relatively weak manufacturing sector. I mean, I think we just saw ISM pop above 50 for two months, but it just fell back below. It was kind of a little bit of a head fake, right?

And for thirty months, it was south of 50, and we still were able to produce those results. When that returns, we will get that volume. Because most of what we’ve seen is we’ve kept a majority of our customers what we’ve seen is our existing customer decreasing the frequency of service. All the while, we’ve been expanding share and actually gaining new business. So we have more clients today than we did three years ago.

It’s just the units are down because the same store customers said instead of coming three days a week, I only need you to come two. So as manufacturing resumes, we will get those units. Right now, look, I think with the announcements last night and even the back and forth that was happening for the last thirty days or so, it’s kind of paralyzed, right, some of these customers. The good news for us, though, is that again, we’ve demonstrated this before is that when there is a decline in units, we can aggressively take the cost out of the business. And so while the cyclical units, while there may be a little bit of softness there, feel really good about our ability to do so and again, meet the commitments that we made on the bottom line results.

Unidentified speaker: Definitely improved in the past. You can do that. Maybe on the pricing side, inflation, obviously, it’s not it’s still sort of rearing its head. Your operating expenses, your spread, how are you able to how has it been going able to offset that cost inflation?

Brian, Republic Services: Yes, starting with the spread. So we look to price about 100 basis points ahead of our cost inflation, okay? So in an environment that we’re entering into 2025, we’re thinking our cost inflation is going to be circa 4%. So we’re looking to get 5% price or yield, average the change in average price per unit on our related revenue streams. And with that, we feel confident that we can generate 30 to 50 basis points of EBITDA margin expansion.

So we still believe that’s the case. Now the backdrop of inflation is actually a positive to our business. I mean, don’t think any business loves hyperinflation, right? But 34% inflation is the sweet spot for us to operate. What we don’t like is when we’re in a very low inflationary environment for a long period of time.

If we’re zero to 1%, that’s not great for us because we’ve got about 40% of our business that has a pricing restriction. Those pricing restrictions are generally with municipalities who subcontract work to us. And included in that contract, there’s a pricing mechanism, many of which have some sort of indices that back that pricing mechanism. So it could be headline CPI, it could be sub indices, water sewer trash, garbage trash. So if you’re getting a 01% price increase, but you think about our largest cost is the cost of people and we’re paying our people a fair wage increase every single year, 2.5 to 3%.

So getting 1% price increase with 3% cost is not a great environment. So we welcome inflation. And right now, we would sit there and say this kind of 3% to 4% is fine place for us

Aaron, Republic Services: to be. And Tony, when you think about how we’ve evolved that pricing model over time, you go back a decade ago, the vast majority of those restricted contracts were tied to headline CPI because that is just the traditional way the municipalities would contract. They would issue the RFP and contract with their service providers. About a decade ago, as Brian mentioned, coming out of the the Great Recession. The CPI environment was running in the kinda had a one handle on it for a number of years.

So we were you know, that compounding effect of year in and year out low inflationary, you know, indices driving our pricing mechanism was just putting pressure on margins in that portion of the business. So we made a concerted effort to move to these alternative indices or fixed rate increases of 4% or greater. And you have seen great progress there, which is giving us confidence in a better pricing backdrop as we move forward in that 40% of the revenue portfolio that is restricted.

Brian, Republic Services: Yes. And I mean just to put a little finer point on that. If you just you’ve seen headline CPI, you’ve seen that modulate, right? It was as high as 9% a couple of years ago and now with a 2.7%, I think, over the last six months. By moving to these alternative indices, one, we think they’re just again, it’s a more fair way to price based on our business because the cost structure is more aligned with what we do.

But they also tend to run a little bit higher than headline through the cycle. So garbage trash, which is one of those sub indices, that’s been running about 4% over the last six months, and water sewer trash closer to 5%. So as we look at our ability to produce that five percent yield on related revenue, supported by the fact that now a majority of our pricing mechanisms are tied to those sub indices, water, sewer, trash and garbage trash, over headline CPI, which gives us confidence that we can continue to maintain that price in excess of cost inflation.

Unidentified speaker: Yes. I guess that would be the definition of pricing power. You touched on it you touched on a little bit on the margin expansion algorithm and recycling and Environmental Solutions side, particularly. Could you maybe walk through in a little more detail how you I guess, on both sides on how you do it, but maybe particularly the Environmental Solutions, how you got it from teens to the 20s?

Brian, Republic Services: Yeah. As I mentioned, we didn’t pay for it, but we knew there was some pent up pricing opportunity in that business. I mean, are critical assets that can’t be replicated. And they just weren’t priced based on the value of the service that was being provided. So coming out of the gate, we were trying to do a little bit of price discovery and we did several double digit price increases.

I think we did four of them over a twenty four month period, really just to find where the ceiling was. And we really didn’t lose that many units. And I I that and I mentioned with with US Ecology prior to our acquisition, when they were when they were a little bit constrained because of the leverage and one of the things you have to realize is that that post collection infrastructure has a very high incremental margin. So their ability to price was limited because they were concerned if they priced that those units could exit the system. They could go to some sort of competitor, and now all of a sudden the leverage issue even becomes more pronounced.

Whereas, again, when we look at just maintaining the long term health of the business, we know that price emanates from that post collection infrastructure and you have to lead price with those assets. And so we were okay with some units exiting the system, but we really didn’t see that. We maintained most of those units, which is one of the reasons why you saw the margin expansion that you did. Obviously, we realized the cost synergies. We said we’d realized 40,000,000 was closer to $50,000,000 as well as there’s just opportunities to just bring our operational excellence that we had in recycling and waste and drive productivity improvements and increase asset utilization.

So we’ve done a lot, but we still have quite a bit of opportunity remaining. Mean we’re just at the point this year where we’re going to be on a common platform on that system. I mean, the IT integration, for all the great things that we’ve been able to do with that business, the lack of integration, in particular on the system side, was a little bit of a negative surprise, if you will, once we got into that business. We are now close to having that on a common platform. That will provide the foundation from which we can sit there and drive more value into that business.

Unidentified speaker: Maybe separate from the announcement last night, but just impact on Republic from the new administration in D. C. Maybe you could sort of talk have you seen any changes, anything that happened after January?

Brian, Republic Services: Yeah. And I think the one thing to appreciate is that most of the regulation that governs what we do is at the state and local level, right? So at the federal level, it sets the minimum standard underneath which states have to adopt at least that standard, but many of which are more stringent. And so state to state, the regulations can vary. Okay?

And so that’s why when we took a look at what happened with the new administration, really for a majority of our business, nothing changed. Now, excuse me, there are elements of that, right, when you start talking about some of the things around some tax credits that were part of the Inflation Reduction Act, could those be at risk? Possibly. But when we made the decision to invest in, for example, the RNG portfolio, as well as some of the credits that exist for electrifying the fleet, we made the decision to do so before the Inflation Reduction Act existed. So that didn’t change our decision.

It was just going to be additive. I want to keep those credits. I like those tax credits. But if they go away, again, all it does, it brings a north of 20% type IRR into the high teens. Okay?

So though it was a little bit more on the margin, would say, direct impact to us. Now again, I think there’s some again, like anything, there’s puts and takes. The idea of, I would say, more fair regulation one of the things that was proposed under the prior administration with PFAS, for example, was that landfills, which are passive receivers, meaning we don’t generate PFAS, we manage it. Right? You want us in that food chain.

And there was a proposal to have the landfill operators, those that are privately owned like ours, to be responsible for treating that PFAS material. But the municipally owned landfills would have been exempt, which makes no sense. Right? So I think with, again, the current administration, I think there will be more fair regulation as it relates to put everyone on an equal playing field. So again, puts and takes, but by and large, I would sit there and say it’s not changing what we do.

We’ve operated under multiple administrations, and we’re going to continue to do what we do.

Unidentified speaker: Fair enough. Know, Aaron, Brian talked a little bit about tariffs. And as, like, our last presenter said, you know, it’s very early on. You know, I think in the waste industry in general, as you said, is a is a local local industry. But obviously, there are probably some impacts not purely insulated from tariffs.

Could you maybe talk through opportunities? I mean, obviously, there’s a lot of benefits and challenges to your industry of these potential tariffs.

Brian, Republic Services: Yeah. As I mentioned when we opened up here, we’re predominantly domestic or a services based company. So the direct impact of tariffs is relatively limited. I mean, some of the manufacturers that we they produce the trucks that we buy have components that are actually manufactured and assembled in Mexico, so that could increase the cost of some, not all of the trucks that we buy. So more I would say the impact for us from tariffs is more indirect, right?

So what that does to the health of the consumer, which as I mentioned, that takes a while to play out. There isn’t this direct impact that says, Okay, well now there’s less foot traffic, for example, in a restaurant that decreased my level of service next week. That could take quarters, even years, to move its way through the system. And the reason we know that is coming out of the Great Recession, we saw the business hold up very well. It wasn’t until 2011, ’20 ’12, so years after the beginning of the recession, that it started to impact businesses like ours.

And quite honestly, it’s just because for most of our customers, we represent a tiny percentage of their spend. So it takes a long time for them to dig through a P and L to get to a company like us. Now on the positive, if you think about tariffs, if it puts any level of inflation into the marketplace I mentioned that 40% of our business that has those pricing restrictions, many of which are tied to an indices that could actually give us better pricing while not directly impacting our cost structure. So like anything, there are pros and cons. We’ll wait to see how this all plays out.

But as far as direct impact in the immediate term for us, we

Aaron, Republic Services: think it’s somewhat limited. Yeah. Tony, from a demand standpoint, if you think of the long term implications and I think the goals of the Trump administration to bring manufacturing the manufacturing base back to The United States. You know, while that may take a little while for the supply chain to work its way out, manufacturing expansion to take place, we would be a direct beneficiary from a demand standpoint. Again, that may take a little bit of time, but between our recycling and waste business where we’ve got a $1,500,000,000 market share there and then the environmental solutions portion of the business, we would be a direct beneficiary as that reshoring and manufacturing expansion occurs here domestically.

Unidentified speaker: Good point. Brian, I think we just talked about it, but maybe just back to regulation tax reform. What are you seeing what are you hearing from maybe your lobbyists or the industry in D. C. Of where they think the administration is going?

I know you mentioned it probably less so with the PFAS for the private landfills, but are you seeing it as generally going in a positive direction for your industry, or how would you sort of sum that?

Brian, Republic Services: I think we’ve heard a little bit of everything, right? You you heard 21% going to 15%, then you heard 21% might go up, right, in order to sit there and to fund some of the other things that the administration wants to do. So I think there’s not a lot of clarity right now on that front. But right now, the 21% is law, right? So this isn’t something that expires like the personal tax rates.

That 21 is the law of the land. So it would have to require a change in law for that to move. That said, one of the things that certainly has been on the table is the prospects of bringing back bonus depreciation. So right now, depreciation is expiring. And just for ’twenty five alone, if that were to be extended just for this year, that would be an additional $75,000,000 worth of free cash flow by vis a vis reduction in cash taxes.

So we would certainly welcome the bonus depreciation. There’s other provisions that sometimes can be tacked on to that as well. For example, the CNG tax credit has expired, almost $20,000,000 impact to us. We did include that in our full year guidance. So if that were to be tacked on as part of the extender package, again, that would be $20,000,000 worth of upside.

So there’s a number of things that we think, at least based historically, that have been passed and approved in multiple administrations, like both bonus depreciation and the CNG tax credit, while we think that they could and would be extended, we’re just basing our full year plans and our guidance based on what we know.

Unidentified speaker: Maybe let’s move to areas of differentiation. Know, John’s just and the team has done a great job of, I think, sort of your pricing models. Maybe you could sort of talk about what differentiates Republic.

Brian, Republic Services: Well, I would say certainly, as we talked about going more broadly into environmental solutions so that we can provide all of the services, in particular to our manufacturing customers. So we’re the only one that can do that, So we can walk in, we can handle everything. And usually what you see is that the service providers are either focused on the recycling a waste portion or they’re focused on the industrial or the hazardous waste piece, but not both. And we think that gives us a competitive advantage because, again, back to my comment about what those manufacturing customers are looking for, right? They want simplicity.

They want convenience. Like I said, it represents a tiny percentage of their spend but can have a big impact on their operation if things go wrong. And so they want a provider like us with a great safety record. A lot of times we’re on-site, right? That is just absolute paramount for them as well as us, and they know that.

Being a good environmentally conscious company, right, they want that because they never want this waste to come back to them, right? And then if you can bring them some of the capabilities that we can around digital tools, just making it easier on these plant managers in order to do their job, they value that. And with that, then they’re willing to pay more and stay with you longer. So again, I would think right now, Tony, if you had asked me that question seven or eight years ago, it would have been a little bit tougher to differentiate amongst at least our larger peers. And now I think you’re seeing some of the most differentiation that probably you ever have in the history of this industry.

People are choosing different paths for growth, different structures, different ways in order to sit there and to go to market, and not to sit there and say that some of the other things that people are doing aren’t necessarily good. It’s just different.

Unidentified speaker: That’s a good summary and good point. Maybe we can shift to sort of update on your you guys have talked about your sustainability investments, plastic circularity, the polymer centers. Maybe you could just give us an update there. It seems like there’s a lot going on. And we’ve talked I know we talked about it, Aaron, the other day.

Brian, Republic Services: And you want to put polymer center? Go ahead.

Aaron, Republic Services: Yeah. From a polymer center standpoint, we now have two of our network of what we believe will be four polymer centers throughout The United States open, where we will take the plastics that we collect at the curb from residents or businesses. We process those through our traditional recycling centers, and we’ll move those ultimately through Polymer Center for further processing. So think of the PET water bottle, those bales of PET. We will create a hot wash, food grade flake that will be returned back into the converter or manufacturing stream for a new water bottle, new beverage container.

The olefins that we have traditionally captured, we will do a further color sortation to create high value custom blends of those color sorted olefins. And those materials will move on to our joint venture with Revago blue polymers. So again, we have our Las Vegas center that opened just over a year ago and continues to ramp production, great customer demand, great quality product, kinda hitting our marks there, maybe slightly behind the original plan as far as the construction and permitting timeline, but that that plant continues to move forward. Had our grand opening for our Indianapolis Polymer Center 2 To 3 Weeks ago, kind of mid March. So expect volumes to begin ramping there and earnings contribution to begin occurring late this year.

Polymer Center three announcement should be coming from a location standpoint by midyear this year. But we are seeing great demand flow through and supporting the price outlook in that regard. You’ve got good state level regulation, EPR like regulation that is occurring in states such as California, Washington, New Jersey, Oregon that is supporting the requirement for minimum post consumer content in the single use plastics and helping us have a great visibility to the demand pull through and profile for these products we’re producing.

Brian, Republic Services: Yeah. So if you just think about it, the premium right now that you get for the upcycled product, right? So again, this rPET trades at a premium relative to virgin material. And if you think about what we were producing out of our recycling centers, we would bail it, but we would sell that at a discount to virgin. The spread between those two is what justifies the investment that we’re making in polymer center.

We’re in a unique position in order to make these investments because the material’s on our back. So others could invest in a polymer center, but then where do you get the feedstock? So again, we’re collecting this material. We collect something 5,000,000 times a day, which is why it puts us in a unique position to make this investment because we’ve got control of the feedstock itself. So most of what we’re going to do with these four polymer centers is material we’re already collecting.

Unidentified speaker: Seems like almost that would be, as you made a comment about the reason for the investment, that arguably would be almost as important, if not more important, to control the feedstock like we were talking about the other day, Aaron. Maybe I can open the questions up to the audience. First one is the

Aaron, Republic Services: leverage ratio.

Brian, Republic Services: Two and a half to three times, I would say, is ideal. We’ve done the work. And that’s again, I think anything significantly less than 2.5x, you become somewhat inefficient. If you go look, the assets can handle more, but as soon as you go north of 3.5 from a rating agency perspective, you could put the investment grade credit rating at risk. It’s not just the cost of the debt, but we provide $4,000,000,000 worth of financial assurance as well.

So there is a cost of not being investment grade in this business. Well, think you’ve seen the leverage, right? I mean, it was, what, 2019, we were a 28% margin business and now north of 31%. So I think you’ve certainly, as we’ve grown, you’ve seen the leverage on the business while acquiring something that structurally has a lower margin. That said, when you take a look from an overall incremental perspective, mean the portions of our business where we’ve seen, right, some of the the decline in volume have really been around the cyclical volumes.

So the construction activity. The construction activity itself, it’s not that that has a high incremental margin, it’s what it leads to that’s more exciting to us. It’s the construction event that leads to the household formation, and then more importantly, the business formation that follows. That’s what we wanna see in that cycle. Because that small business formation where you’ve got the the small container work, others refer to as commercial work, that is going to be your highest margin line of business within your collection operations.

Because that’s where route density matters. That’s where you can experience the most leverage. Yeah.

Aaron, Republic Services: And when you when you look at how the business is structured, this is a highly contracted business. So we talk about 40% of the revenue base having a pricing restriction. We are well over 85% of the actual customers are under some form of contract. So as an essential service, you know, provider of an essential service in the backdrop of the economy and in a highly contracted business, share will generally trade hands relatively slow from that standpoint. So when you look at the the leverage and the value creation through m and a, being able to tuck services, you know, competitors’ routes that overlays directly with ours, that is where you see tremendous value creation in this space.

And then customer loyalty, where we’re driving that customer loyalty rate 94% plus for a number of years now. That is really where the leverage and value creation in this business occurs.

Brian, Republic Services: And certainly, we would welcome, as we talked about earlier, resurgence of manufacturing activity because not only would that positively impact our Environmental Solutions business, so the customer facing service itself, but when you think about some of the byproducts. So a lot of what those manufacturing customers produce is not hazardous, and it turns into landfill special waste. So you think about the leverage that you gain at your landfills. As I mentioned, there’s a high incremental margin associated with it because it’s a highly fixed cost business. So that would be an area where if we all of a sudden get back into a consistently above 50 ISM, we would certainly see the leverage on that portion of the business.

Unidentified speaker: Well, gentlemen, that was a great overview. You guys have done obviously, you’ve been coming for eleven years now and done extremely well throughout that time. Thank you, Brian, for your support. Aaron, we hope to see you back next year. Thank you.

Okay,

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