Noah Kaye

Fish split the shortfall into collection and disposal, brokerage and RNG, and Reed quantified $250 million of volume revenue against $175 million of surcharges for a net $75 million.

Morris attributed it to cost control in C&D; Reed added that corporate and other improved sequentially on expense timing with the full-year EBITDA outlook unchanged.

Reed confirmed weather accounted for half of the 1.5% volume decline, a clear and concise clarification.

Hemmer reported RNG production nearly doubled. Higher pricing achieved, 80% of volume locked in for year (up from 60% at guidance). Three more plants expected online in Q2.

Morris emphasized slow and steady safety improvement with recordable injury rate under 3% as a milestone. Sees continued positive risk management translation.

Tara outlined first-half $60-65 range, back-half recovery. Green shoots on fiber side as remaining larger mills need material and tariff cloud lifts. No material movement expected on plastics. Full-year $70/ton assumption.

David attributed the gap to normalization of corporate expenses and technology costs allocated to other business units. These may or may not materialize but were included for prudence.

Devina expressed confidence in midpoint-to-upper-end margin outcome. Q4 strength driven by retention benefits, fleet investment, improved price-cost spread, strong landfill volumes, and Q4 RIN sales at effectively 100% margin accretion.

Jim noted industrial pickup was geographically even, partly from Healthcare Solutions hospital internalization. MSW strength reflected network strength, not price-for-volume trade. MSW yield was 6.7%. Special waste pipeline continues to look good.

Tara confirmed 90% of 2025 RNG locked, RIN price ~$2.55 above market. 2026 at 30% locked at ~$26. Margins expected similar through balance of 2025.

Rafa confirmed synergies tracking evenly with SG&A front-loaded. Internalization starting H2. Devina confirmed entering 2026 at ~$150M run rate (50% higher).

John confirmed $16M of actual P&L synergy capture in Q1.

John confirmed commodity impact and volume dip from event work. Sales-operations coordination has been corrected. Exploring full fee-for-service model leveraging WM's combined suite.

Devina confirmed still reviewing but views PFOS as more broadly an opportunity for WM through special waste and industrial waste volumes.

Rafa detailed that SG&A and OpEx categories saw meaningfully larger opportunities, while internalization stayed similar.

Devina explained the core price to yield conversion gap is driven by business mix, particularly lower-rate landfill volumes.

CEO said the business has substantially exceeded the pro forma and driven good returns, moving from 14-15% EBITDA margin toward higher levels, though not a straight line.

CEO credited strong cost management, labor productivity from RISE, maintenance cost discipline through MPower, and balanced pricing that plays a long game on customer retention.

Management provided clear timeline: pricing benefits in 2026, RISE routing scaling in 2027-2028 as the largest impact, customer service improving ratably across all three years.

Jon emphasized conservative posture until seasonal Q2 momentum is confirmed, noting 3-4 years of negative cyclical demand with some positive signs but no conviction yet.

Brian confirmed residential volume negative all year, creating headwind within the -40bps ex-landfill volume, with other lines expected to perform better.

Brian guided ES to roughly flat for 2026, negative in H1 from tough comps (including $15M Q1 ER rollover) and growth in H2.

Jon guided to cost inflation around CPI level with yield 75-100 basis points above, maintaining confidence in the spread for 2026.

Jon emphasized supply advantage from collection network and strong demand/pricing, noting longer ramp-up time is normal for new facilities.

Brian quantified $80M bonus depreciation benefit partially offset by $25M CapEx increase for tariff mitigation and lease buyouts.

Brian explained higher-margin landfill volumes offset lower-margin ES and collection declines, with Jon noting the overall margin resilience demonstrates long-term business strength.

Brian isolated January/February weather impact on ES margins, noting March showed expected organic growth and margin expansion patterns.

Brian clarified net fuel had zero margin impact year over year; the 40bps expansion was from price exceeding cost inflation, with workday accounting for 40bps.

John expressed confidence in exceeding the $1B M&A target given strong pipeline and first-quarter activity.

Jon guided to relatively consistent margin expansion across all quarters, slightly more first-half weighted, with expansion across all business types.

Jon confirmed ~4% cost inflation versus 5% yield on related revenue, implying approximately 100bps spread for 2025.

Michael quantified the new HCS volume assumption and said the 5% inflation guide holds because commodity, fuel and memory costs offset the February reprieve.

Alok credited a large portion to share gain from the new factory and emergency replacement, with an end-market that stopped declining after 17-18 months.

CFO confirmed both incremental costs and new pricing fall predominantly in H2. Price impact begins late Q2 with full effect in H2. Overall profitability splits by quarter expected to remain similar to prior year despite timing shifts.

CFO said some absorption pressure continues into Q2 but by quarter-end, inventory normalization will be complete. Production was cut 30% in Q1. Absorption becomes a year-over-year tailwind in the second half.

CEO confirmed the $100M incremental above $125-$150M maintenance CapEx is temporary, funding deferred projects like innovation centers and digital tools that were delayed by A2L transition work. Expects reversion to maintenance levels after.

CFO sized Q1 absorption headwind at $10-$15 million. Cost actions and material productivity will partially mitigate. Absorption impact mostly concentrated in Q1, fading in Q2 as inventory normalizes.

CEO sized Samsung JV at half-point to full-point of growth in 2026 with multi-year expansion potential. CFO noted ductless is only 2% of Lennox sales versus 10% of industry, highlighting the long runway.

CEO indicated they are walking away from the lowest 10-15% of residential new construction volume over multiple months. Lennox was overweight on RNC in the one-step model and is shedding accounts where they were losing money.

CEO said no significant pull-forward expected as only 6-7% of units were impacted by the 25 SEER credit. Minimal mix impact expected in 2026 from expiration.

CFO explained inventory build was intentional to ensure product availability during 454B transition. Will normalize in second half with year-end still elevated for Samsung launch and emergency replacement positioning.

CEO outlined multiple contingency scenarios. A full Mexico tariff would shift mix toward premium US-made products, which are higher margin. Peso devaluation and pricing would offset remaining impact.

CEO provided comprehensive contingency planning across tariffs, labor, and consumer confidence. Lennox is a net beneficiary of China tariffs due to Samsung JV and reduced China sourcing.

Framed spend as capacity plus scaling acquisitions, and reiterated the CapEx-light characterization.

Quantified the expected margin cadence by quarter and flagged EMEA as a continuing drag.

Regnery explained they use multiple models, not just ACT. Believes market will trough in Q2 with upside in H2. Skeptical that trailer OEMs can handle ACT's projected 2027 ramp.

Regnery indicated reference designs are 12-24 months out. Discussed smarter chillers with weather pattern awareness, free cooling modes, and micro grid optimization for data centers.

CEO described some overlap but key value is modular factory-built chiller plants reducing on-site skilled labor. Currently data center focused but cross-sell opportunity into core verticals given skilled labor shortages.

CEO noted data centers skew heavily new construction while core verticals remain retrofit-dominant. Advised looking through window for cranes as indicator that majority of business remains retrofit.

CEO detailed BrainBox using Agentic AI for building optimization. Convenience store pilot saved north of 30% on energy costs. Subscription model drives accretive margins.

CEO and CFO emphasized discipline in M&A with toggle between acquisitions and buybacks when stock trades below intrinsic value. $5B remaining under repurchase authorization.

CFO described EMEA bolt-on acquisitions in transport and Commercial HVAC channels as modest in scale but strategically important for sustained market outperformance.

CFO quantified full-year pricing at slightly above 3 points including tariff pricing, with volume at approximately 5 points.

CEO confirmed retrofit at 65-70% of applied mix historically and agreed the shift toward retrofit is a reasonable assumption, but lacked granular data.

Smith confirmed starting to lap investment costs but running parallel operating systems for legacy and new platforms creates near-term margin drag. Margins expected to step up after conversion to new platforms.

Rumsey confirmed some prebuy assumed in second half of 2026, combined with natural truck cycle recovery and tariff stability. Cautioned supply base flexibility after dramatic production cuts is a constraint to watch.

Rumsey shifted focus toward battery opportunities over fuel cells. Stationary energy storage launched for data centers. Prime power investment decisions still being evaluated.

Rumsey expects R&D flat through 2026 launch, then declining post-2027. Not a significant tailwind next year due to natural inflation in people costs.

Rumsey confirmed one product launch delayed 6 months due to tariff/regulatory uncertainty. Some contingency engineering at lower levels. R&D expected to decline after 2027 launches.

Rumsey noted limited natural gas and stationary energy storage offerings launched. Microgrid space under strategic evaluation but no firm expansion decisions yet.

Expects more vertically dedicated teams beyond data centers within existing structure. Focused on verticals with larger growth opportunities. Approach proven at Danaher.

Framed as margin expansion dampener rather than headwind. Recovering costs dollar-for-dollar but not applying gross margin rate to protect customer relationships.

Current attachment rate 40s%, best-in-class at 60-70%. Long-term entitlement modeled on elevator and oil & gas industries which achieve 60-70%+.

Applied and industrial refrigeration leading. Controls, Fire & Security facing tougher H2 comps with flattish construction indicators.

Marc described the program as simplifying the cost structure and right-sizing the organization to improve resource deployment and the customer experience.