Good morning. My name is Jennifer, and I'll be your conference operator today. At this time, I would like to welcome, everyone, to the Fourth Quarter and Full Year 2016 Earnings Release Conference Call. And I would like to turn the conference over to Mr. Ed Egl, Director of Investor Relations. Sir, you may begin.

Thank you, Jennifer. Good morning everyone and thank you for joining us for our fourth quarter 2016 earnings conference call. With me this morning are Jim Fish, President and Chief Executive Officer; Jim Trevathan, Executive Vice President and Chief Operating Officer; and Devina Rankin, Acting Chief Financial Officer and Treasurer. You will hear prepared comments from each of them today. Jim Fish will cover high-level financials and guidance for 2017 and provide a strategic overview. Jim Trevathan will cover price and volume details and provide an operating overview. And Devina will cover the details of the financials. Before we get started, please note that we've filed a Form 8-K this morning that includes the earnings press release and is available on our website at www.wm.com. The Form 8-K, the press release and the schedule for the press release include important information. During the call, you will hear forward-looking statements which are based on current expectations, projections or opinions about future periods. Such statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and our filings with the SEC, including our most recent Form 10-K. Jim and Jim will discuss our results in the areas of yield and volume which, unless otherwise stated, are more specifically references to internal revenue growth or IRG from yield or volume. During the call, Jim and Jim and Devina will discuss our earnings per diluted share, which they may refer to as EPS or earnings per share, and they'll also address operating EBITDA and operating EBITDA margin as defined in our press release. Any comparisons, unless otherwise stated, will be with the fourth quarter of 2015. The fourth quarter of 2015 and full-year 2016 and 2015 results have been adjusted to enhance comparability by excluding certain items that management believes do not reflect our fundamental business performance or results of operations. These adjusted measures, in addition to free cash flow, are non-GAAP measures. Please refer to the earnings press release footnote and schedules, which can be found on the company's website at www.wm.com for reconciliations to the most comparable GAAP measures and additional information about our use of non-GAAP measures. This call is being recorded and will be available 24 hours a day beginning approximately 1:00 PM Eastern Time today until 5:00 PM Eastern on March 2. To hear a replay of the call over the Internet, access the Waste Management website at www.wm.com. To hear a telephonic replay of the call, dial 855-859-2056 and enter reservation code 55317607. Time-sensitive information provided during today's call, which is occurring on February 16, 2017, may no longer be accurate at the time of a replay. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Waste Management is prohibited. Now, I'll turn the call over to Waste Management's CEO, Jim Fish.

Thanks, Ed, and thank you, all, for joining us this morning. I'm opening on a somber note this quarter as we bid farewell to our Chairman, Bob Reum, who passed away last week after a brief but valiant battle with cancer. Bob brought a strategic sense and a naturally inquisitive approach to leading the Waste Management board and his intellect and guidance will be missed by me and by all who worked with him. We extend our heartfelt condolences to his wife, Sherry and his three children, Carson, Courtney and Halley. They've lost a wonderful husband and father, and we've lost a good friend. Thank you for joining me in a brief moment of silence for Bob. Thank you. On a much lighter note, my friend David Steiner completed a very successful and transformational career on Waste Management last year. Among many things that David brought to Waste Management including driving tremendous value through disciplined pricing, our recently completed 2017 Waste Management Phoenix Open was his brainchild. In fact, he played in our first Waste Management Pro-Am with a guy who would later become a good friend of his, Phil Mickelson. While he played with Phil before, Phil plays in lots of Pro-Ams and didn't remember David until David uncorked his infamous swing on the first tee, to which Phil said, now I remember you. Thank you, David, for your great contribution and your many years of service to Waste Management and we wish you well with that swing and all of your future endeavors. Now moving on to results: 2016 was a very successful year as we exceeded expectations across the board. Each of our operating income, operating EBITDA and net cash provided by our operating activities were at all-time highs and each showed the greatest year-over-year percentage and…

Thanks, Jim, and good morning. The fourth quarter of 2016 saw a continuation of a strong operating and financial results we saw throughout the year. Revenues in the quarter were $3.46 billion, an increase of $214 million, or 6.6% when compared to the fourth quarter of 2015. Once again, our revenue growth was driven by the successful execution of our price, customer service, disciplined growth strategies in our collection and disposal business. Fourth quarter revenue growth in our collection and disposal business from the combined impact of price and volume was $118 million. Fourth quarter revenues also benefited from higher recycling commodity prices, which drove a $51-million increase in recycling revenues. Acquisitions, net of divestitures also increased revenues for the quarter by $45 million. Fuel surcharges and foreign currency fluctuations did not significantly impact our revenue for the quarter. Looking at internal revenue growth in the fourth quarter, our collection and disposal core price was 5.1% and yield was 2.1%, with total volumes improving 2% and traditional solid waste volumes improving 1.7%. We saw revenue growth from volume contribute equally to price growth for the first time in over five years, but without compromising our pricing strategy or results. We focused on improving service to our customers, and our full-year churn improved 100 basis points to 9.1%. This is the lowest churn rate since 2002 when we were at 8.6%. We also saw service increases, exceeding service decreases for the 12 consecutive quarter, supporting continued commercial volume growth. The combined positive price and positive volume led to total company income from operations growing $42 million. Operating income margin expanding 10 basis points to 17.8% and operating EBITDA growing $54 million. Our collection lines of business continue to see the benefits from improving price and now volumes. In the fourth quarter,…

Thanks, Jim, and good morning everyone. For the fourth quarter of 2016, as a percent of revenue, SG&A costs were 10.9%, which is an increase of 30 basis points from the fourth quarter of 2015. On the dollar basis, SG&A costs were $378 million in the fourth quarter, or $35 million higher than in the prior year period. The increased SG&A costs on both the margin and dollar basis are almost entirely related to higher costs for our incentive compensation plans, because we outperformed the goals set for the year. SG&A costs during the quarter also included a charge for executive severance costs, which negatively impacted EPS by $0.01 per share. So when we look at fourth quarter income from operations and operating EBITDA margin, the year-over-year comparison would have been 100 basis points better without the increase in these incentive compensation and severance costs. For the full year, we held our SG&A costs flat on a percent of revenue basis at 10.4% as we offset increased incentive compensation costs and higher SG&A costs from large acquisitions by reducing back office spend and finding greater efficiencies in our processes. We will continue to focus on our continuous improvement objectives and managing SG&A costs in the year to come and expect to hold SG&A costs flat in 2017 and for SG&A costs as a percentage of revenue to improve by about 40 basis points. Turning to cash flow. In the fourth quarter, cash provided by operating activities was $753 million compared to $526 million in the fourth quarter of 2015. This growth in operating cash flow was driven in part by an increase in operating EBITDA of $54 million, and this reflects the strength of our core operating performance in the year. For the full year, cash provided by operating activities…

Thanks, Devina. When we reflect on 2016, we're very pleased with our results. We successfully executed on our strategy of improving price, disciplined volume growth and controlling costs. Looking forward to 2017, we expect core price to be 4%, or greater and yield should be approximately 2%. We expect to achieve the same dollar amount of pricing in 2017 as we did in 2016, however, with the growth in our revenue and core pricing yield as a percent of revenue will moderate. We expect total company volumes to grow in the range of between 1.2% and 1.6% for the full year in 2017. We anticipate that we will lose some unprofitable recycling contracts in 2017 and that our 2016 landfill volume growth of more than 7.5% will moderate on tougher comparison with this year. In our recycling business, 2017 has seen a strong start to the year with current prices of our average commodity price per ton up $40 from the lows we experienced in January 2016. January of 2017's uptick over January of 2016 was driven primarily by strong cardboard pricing impacting our brokerage business. However, we're not forecasting that these elevated levels will be sustainable throughout 2017 and the comparisons in the back half of the year will become more difficult. But we still anticipate additional operating cost improvements. Add to that the strong commodity prices in Q1 and we expect a positive $0.03 impact on our EPS year-over-year when compared to 2016, with most of the contribution occurring in the first quarter of 2017. The real theme for our 2017 financial guidance is the continued strong operating EBITDA growth, which will be the foundation of our free cash flow. We expect that the solid execution of our strategic priorities will produce 2017 operating EBITDA growth of between…

And our first question comes from the line of Michael Feniger with Bank of America Merrill Lynch.

Good morning, Michael.

Good morning, guys. Thanks for taking my questions. I'll keep it at two. Just first on the pricing. So, you're guiding 4% for the full year. Q4 was very strong. So, just how much of this is just the tougher comps? Is price increases just getting more challenging now than they were in 2016? And how should we think about pricing kind of playing off through the year?

No. I think, Michael, it's the fact that we have I think several years said that that we'll be at a 2% yield and a 4% core price and we're kind of sticking to that. We think that's a pretty safe range for this. When you look at whether we saw any kind of sequential weakness we didn't – the four lines of business that ultimately showed price increases for us are commercial, industrial, resi and MSW. And when I looked at those sequentially commercial was up quarter-over-quarter 10 basis points, 50 basis points in industrial, we were down 40 basis points in resi, and then, we were up 20 basis points in MSW. So, collection and disposal sequentially was flat at 2.1%. So, I think what you're seeing in 2017 is just kind of a standard 2% and 4%, which is where we've guided I think over the last four years.

Okay. That helps. And I guess if we could just talk about inflation and CPI. Can you quantify the headwind that we saw in 2016? And what we should be expecting in 2017? If we see inflation starts to pick up over the next few months, is this more of a 2018 story? I hope you guys could kind of parse that out for us.

Yeah, Michael. Jim Trevathan here. CPI or index-driven pricing affects about 40% of our total business. So, to quantify that about a 50 basis point increase in CPI would impact our top-line by $28 million. But I also want to stress as Jim just did that we don't plan for CPI increases in our business plan. So, you're right, an increase has some upside to it, but we don't plan for a decrease either. Our core pricing strategy allows each area, and we ask them to overcome any CPI increase or decrease with more core pricing, we do that on, obviously, those open-market customers. So, we've overcome the low CPI rates in past years and you've not seen any impact to that core price. So, an increase – although it will occur, and I think you're right, it does have a roll-forward impact. It would be later in the years. You see it because our price increases don't come every month. They come especially on those CPI or index-driven price customers. They come periodically, July 1 or October 1 based on the contract term. So, that will be more of a late 2017, 2018 if we see that CPI increase. But I stress again, we generally have not let that affect us positively or negatively. We're going to go get core price.

There is a bit of a lag there too, Jim.

There is a lag.

With CPI, these contracts are tied to it, as Jim mentioned. But they have a look-back period, it tends to be 12 months. And then, of course, as Jim mentioned too, we've got these periodic increases that are kind of July 1 or January 1. So, that lag is probably at least 12 months and sometimes as long as 18 months.

That's really helpful. And just, if I could squeeze in my last one, Jim. What do you think is an appropriate incremental margin we should be thinking about at this point of cycle for Waste Management?

I mean, I think when you think about the fact that our landfill volume has been strong, our commercial volume has been the strongest we've had in at least four years. If you think about 50% flow-through to the EBITDA line, I think that's probably appropriate.

Okay. Thanks, guys.

Our next question comes from the line of Andrew Buscaglia with Credit Suisse.

Good morning, Andrew. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Hey, guys. Thanks for taking my question. I just want to dig into the recycling, you guys said that would help you guys about $0.03 in 2017 and looks like some of that is coming more so in Q1. Can you talk about – I would think that would be a little bit more of a benefit given where commodity prices are going. So, what are your assumptions around pricing for commodities and just generally for recycling?

Yes. So, when we think about commodity prices and particularly when we think about recycling line of business, 2017 is the first year in four years that we're actually budgeting some improvements. We're budgeting $0.03 per share for the year, $0.02 of that comes from price, $0.01 of it comes from continued cost improvements that we've baked into the plan. Now, most of that is in Q1, a little bit in Q2, but most of that is in Q1, and we do expect prices to come back down in the back half of the year. So, I think what this really amplifies is the point that we made last year, which is that commodity prices are difficult to predict and obviously, out of control. So, we need to de-risk the model, and we've done that over the last four quarters to six quarters. So that if prices do retreats, we've really protected the downside. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay. Okay.

We only have a couple of contracts that remain into 2017 that are significant contracts that will fall off and that will give some value there from them, but we have altered all of our agreements, the significant large ones, to make sure that our customers are providing the return or processing their material and then that commodity price impact is minimized. We're not taking that same risk. So, there's only a couple of those lifts. Our operating guys have done a really good work at putting in continuous improvement programs that let us see historically and also look at volumes coming in and just right-size our operations. So, we make sure we get that operating improvement that Jim mentioned. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay. All right. That's helpful. For volumes, I thought about 2% was pretty much better than I expected. Just looking at the breakdown, was there anything that surprised you within the breakout? MSW, C&D, and special, any one-time projects that are going away? Are there really just tough comps that you're basing your guidance for 2017 on?

I think you're right. When we look at landfill volumes for the year at MSW at 7.5%, that's pretty strong in a 2% economy, if you believe that the economy drives that. When you look at our C&D volume, I mean, C&D volume was – for the year was 18% – 18.7% I think. So, hard to repeat that. We're not seeing any weakness there, but hard to repeat that. Now, I would say on the positive there, if you believe that those are going to be difficult comparisons. On the positive side, I would say our special waste, which is driven by kind of the industrial economy was really only at about 3.9%, 4%. So, you may argue that we've got some upside there. Still not weak by any stretch of the imagination, but I do think that special waste that could provide some upside, particularly if something comes out of Washington that benefits the industrial economy. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay.

From a comparison perspective, the one thing I would add is that in the first quarter of 2016, we did see some MSW volume benefits from some of the waste-to-energy facilities, meeting their maximum capacity. And that will prove to be a bit of a tough comparison, but that's not something that would impact the full year. It just really impacted the first quarter. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay. And your commercial is very strong. What are your thoughts on that into 2017, because obviously that's an important piece to the puzzle?

Yeah. For the year, it was 0.8% volume on commercial. But sequentially, it was getting stronger. So, I think I mentioned in my script that it was really strong towards the end of the year at 2%. And as I look back, that's the strongest number I see on the page here all the way back to 2012. So, we like the direction of commercial. And I think Jim talked about the fact that our churn has been a success story for us too, and that, of course, affects commercial volume as well. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Yeah. And similar to that special waste piece you would think that the infrastructure or potential – something out of Washington could help that commercial side to as – may be some confidence to that.

It's more on the industrial line of business, honestly. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay.

But it certainly wouldn't hurt commercial, but I think the industrial economy for us with respect to collection tends to show up more in the industrial line of business. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay.

Yeah, Andrew, if you look back in our net commercial volume and you go back 6 or 8, 9, 10 quarters, in fact every quarter, we've had good improvement, leading to that 2%, and that's obviously what the economy hasn't driven much of that. Most of it has come from some of the actions that we've taken around service to our customers, process to handle customers that have issues and how we work through those. Our people in the field have done just a superb job in that regard to get that defection rate down pretty close to the lowest ever. And then, our customer acquisition methods are getting – we're just getting better at looking for the right kind of volume that Jim stressed to make sure that we still get the contribution from that and don't disrupt the marketplace. And that'd be the last thing we want to do. And we're focused really hard on that, picking the right locations that have a little more economy support, and make sure our resources, sales resources and operating resources align with that, so we can take advantage of that growth. And we're using some of our technology tools Jim mentioned to help us in that regard. And I think you'll see that continue. It's been fairly dramatic on one of our more profitable lines of business and we expect that to continue. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC: Okay. That's it for me. Thanks, guys.

Your next question comes from the line of Corey Greendale with First Analysis.

Hi. This is Ken Wang on for Corey. Thanks for taking my questions. I'm just wondering if you can talk a little bit about your M&A outlook, specifically any comments on what your plans are, what you're seeing in terms of seller expectations, and any commentary you can offer on pipeline.

Sure, Ken. Look, we'd like to do more of the RCIs, the Deffenbaughs, DSWs that we've done over the last couple of years, at reasonable prices. And that's I think the key. Obviously, return on invested capital is very important to us, so you're not going to see us pay 12 or 13 times EBITDA on a pre-synergy basis for companies. We continue to kind of comb the landscape and see if we can find those midsize acquisitions at what we think is a fair purchase price. If we don't find those, then 2017 is really going to be a year of tuck-in acquisitions in the $100 million to $200 million range.

Thanks. That's helpful. And any update on your EBITDA acquisition outlook for 2017?

We really only have tuck-ins built in to EBITDA. So, it's largely organic growth on the EBITDA line of business or on the EBITDA line in 2017. A little bit of carry-over from acquisitions in 2016 as well.

Great. That's all I had. Thank you.

Yeah.

Your next question comes from the line of Brian Maguire with Goldman Sachs. Derrick Laton - Goldman Sachs & Co.: Hey. Good morning. It's Derrick Laton on for Brian. Thanks for taking my questions. I wanted to see if we could get a quick update on how we should think about residential volumes. You mentioned those are down about 2.6% year-over-year, but looks like sequentially a small improvement. Was this mainly attributed to the progress you're making on moving to an inflation index that more kind of closely mirrors the waste industry? Maybe we can get an update on your progress there.

Yeah, Derrick. There's no doubt. That has been a positive impact to us as we change some of those contracts over to that wastewater and sewer increase instead of just CPI. That's a slow process with cities and counties and government entities because cost is so important to them. I think the other thing I'd mention is that that line of business is an extremely competitive line of business, especially with those midsized and smaller communities. They are always looking for savings. Now, what we've tried to do is look more at just return on invested capital. That line of business has such a strong impact on capital requirements as you retain a contract and that entity wants new trucks or with new business. So, return on invested capital's our primary focus there because it has such an effect on our return and that you all care about and we do as well. So, we don't look at it as a growth opportunity like we might other lines of business. We look contract by contract. And yeah, we choose to and we will improve that business. We're doing things using technology and trying to differentiate ourselves, especially on those larger franchise and larger contracts providing some self-service opportunities for customers, some things that local communities look for that we can add to websites both with regard to trash services, but other information that might again set us apart from some of our other competitors. Looking at increased automation, how can we help with those helpers on the back of the truck and get more focused on the drivers. Some of the shortages that we see with automation, we tend to retain drivers longer when they have that kind of truck, and we get better return for our shareholders as well. So all of those things I think will help that line of business, but I don't believe you'll see the dramatic change like you may have in whether it's MSW or special waste or commercial, industrial lines of business. We'll plod along and make good excellent returns for shareholders, but we'll do it spending money wisely. Derrick Laton - Goldman Sachs & Co.: Got it. That's really helpful. And then maybe just one more. So, you've mentioned that in 3Q leachate and waste water developments were kind of a headwind for the quarter. Are these issues squarely behind you now? Thanks. I'll turn it over.

Well, yes. So, you're right. Leachate was a headwind, and we talked about it a bit last year. We've lost some low cost disposal options for our sales with some of these POTWs, specifically the one we mentioned last year was in the State of Virginia, but it's not limited to Virginia. So, we've built a couple of our own plants. We built one outside of Philadelphia a couple years ago. We are in the process of bringing one up and online in Virginia. That will come online at the end of Q2 or maybe the beginning of Q3. So, that Virginia plant coming online in the back half of the year will have a run rate expense reduction of about $0.03 per share, $0.02 to $0.03 per share for the year. We've built in about $0.015 of expense reduction in leachate costs. And then of course, we also have the charge that we put into place last year that's helping us compensate for some of that increase in cost. Derrick Laton - Goldman Sachs & Co.: Great. That's helpful color. Thank you.

Our next question comes from the line of Joe Box with KeyBanc Capital Markets.

Hey. Good morning, everyone. So, I can appreciate you guys are taking a conservative approach to commodity prices. Now that you've restructured a lot of these contracts, can you maybe just give us an update and quantify what a $10 change or a 10% change in the commodity basket might mean?

So, $10 change, it's about $0.04 on an annual basis.

$0.04, okay.

Yeah.

$0.04 annual?

Yeah. Joe, as we've changed those contracts as exactly as you said, we're not taking as much of that risk on the downside. Therefore, we don't get as much on the upside. There's value to us when we do that, but it's not as dramatic as it was when we took all that upon ourselves. We're trying to make sure that the capital that we've spent at building these facilities provides a return for shareholders that's a reasonable return given the build, the spend. And then we'll share in that commodity value instead of take all that risk, and that's what you see happening. So, generally.

I understand. I'm sorry. I was just going to say – go ahead.

Yeah. I was just going to say, look, Devina mentioned it's tough for us to predict what's going to happen with commodity prices. Every time we've tried, we've failed. So, we tried to predict first quarter, and we think that looks like it's going to play out the way we expected based on where we finished the year. But predicting, I'll pass that. I mean, you could look at the transition historically from Q3 to Q4 and historically there's been a big dip in commodity prices from Q3 to Q4. We didn't see that dip this year, and we actually thought it would happen and it just didn't. So, are we going to say that that's a new normal for us? I don't know. I think the problem is, as soon as we say that's the new normal, then we'll get back to normal and we'll see the big dip in Q4 next year. So, we expected it, that you might ask while we're being conservative with recycle pricing. That's why I did mention early on that it's the first year in four that we put anything into our budget in terms of improvement, in terms of recycling line of business from commodity prices. And we did put $0.02 in there, we put $0.03 in total, two of it is price-related. But, it's just – in our minds it's hard to predict what happens with commodity prices. 30% of our volume goes to China, really hard to tell what's going to happen overseas. So, while you may say it's conservative and we might even agree with that, I think we've got to make sure that we don't get ourselves in a bind the way we have in years past.

Right. And I get it's – you just don't have visibility on it. I think it's a prudent way to do it. I just wanted to check in the $10 change given you guys, have restructured contracts. Maybe switching gears. I think you guys snuck-in just a quick comment on an investment for New York City contract. Can you just give us a little bit of color around what that is and how much that investment might be?

Yeah .Sure, Joe. I should probably take the opportunity first to just recognize our team. That was some excellent long-term contract for us and gives us a real basis for supplying service to the New York City area for a long time, for 20 years in fact. So, a really good contract for us with a lot of work by that local team, we'll start accepting MTS, MSW in July of 2017. That waste will go to our Western New York High Acres landfill in early 2018 at the peak of volume, that's about 750,000 tons a year. We'll split that volume between our Western New York landfill and then one of our Virginia landfills. We'll spend money. We've already started a little bit. That's why you saw some of the capital spin that Devina mentioned going up in 2017, and it's in the $50 million range. It includes quite a bit of containers, primary amount of spin. Those MTS is, by the way, when they're fully operational the New York City – they're implementing, they're executing and building out those transfer stations. We'll end up handling 1.8 million tons for the city at the end of this in total given two MTS contracts, the long-term Bronx contract we have, the Brooklyn contract that we have, and the Queens contract we have. It's sizeable. Over a 20-year period, it's little over $3 billion in revenue.

Congrats on the win. So, can you maybe just talk about the return profile and the risk profile of the contract? Does it end up being accretive to overall Waste Management? And then, hopefully, I can circle up offline and get some more details on it. Thanks.

Yes, Joe. It absolutely is accretive to both 2016 or planned in 2017. It's a very good contract for us. It's primary – it's transportation and disposal at our site. It does not include collection. It's just the receipt of the material, the railing of the material, handling, and then disposal at the other end. So, that line of business is good for us, and this contract is very good for us.

Yeah. Because of the line of business, Joe, it ends up – that contract ends up being an accretive to margin contract because disposal is such a high margin for us.

Right. And from a risk standpoint, Joe, we've – just like all the other New York City contracts we have, we've got all the right components in there to make sure that we're covered if the city decides to go with different direction, and we don't expect that. But if they do, we're covered from a capital standpoint and from a cost standpoint. So, we don't see the risk that you might expect with that long-term contract. It has all the right escalators in that cover cost change. So, we're very pleased with the work our local team has done to win that project.

Great. Thank you, guys.

You bet.

Your next question comes from the line of Hamzah Mazari with Macquarie Capital. Hamzah Mazari - Macquarie Capital (USA), Inc.: Good morning. Just a question on longer-term capital allocation, it looks like you guys are not very levered. The dividend increase is lower than free cash flow growth and profile. When you think about M&A, you mentioned accretive acquisitions, are there anti-trust issues for you to grow in solid waste? And how do you think about prioritizing sort of industrial waste, energy waste, medical waste? Any sense of long-term capital allocation around M&A would be very helpful.

That was kind of four questions in one there. Let me tackle the capital allocation first. So, first of all, yeah, with respect to how we think about capital allocation for 2017, primarily for 2017, we look at that dividend coming out first, and we increased the dividend by 3.7%. You're right, it did not increase at the same level as free cash flow. You recall last year in January, we took kind of a 6.5% increase because we felt like our free cash flow had reached a new baseline. So, we said it had gone from kind of the 1.2%, 1.3% up to 1.4% last January, so we increased it by a higher-than-normal amount. And you could argue that we're now at somewhat of a higher base too at 1.5%. I think we like to have more than just a year's worth of data before we determine that we truly are at a higher base. So, 2017 will provide that data for us, we think, and then we'll readdress the dividend as we go into the latter part of this year or next year. So, once you take the dividend out, once you say, okay, then potentially your next use of capital would be acquisitions. And I talked about the fact that we'd love to get a mid-sized acquisition similar to an RCI or Deffenbaugh, but we've got to get it at the right price. We're looking for those. And to the extent that we can find them, then we would do that. And I think Devina has done a very good job getting the balance sheet in shape to be able to accept one of those should one come along. If it doesn't come along, then we'll do our standard $100 million to $200 million in tuck-ins, plus…

Thanks, Hamzah.

Your next question comes from the line of Barbara Noverini with Morningstar.

Hey. Good morning, everybody.

Hi, Barbara.

Good morning.

So I'm interested in some of your high-level thoughts about some of the policy talk coming out of Washington. Obviously, you mentioned that an uptick in the industrial economy would benefit you as would, of course, a lower corporate tax rate. But what do you make of some of the talk concerning regulation? I know particularly the EPN environment regulation, obviously, the new administration has been talking about the potential for simplifying or relaxing certain regulations?

That's a great question, Barbara. We've talked a lot about that internally. Environmental regulation, in a funny way, is a differentiator for us because we consider ourselves to be preeminent in terms of our protection of the environment within the waste disposal space. So, it is a question that we've had. Do we benefit or not? There's a second side to that coin. It's a bit hard to tell because we just don't know what's going to come out. We don't know what environmental regulation or reregulation or deregulation would come out of Washington. So, we really can't give you a very good answer to that. I would tell you that off-the-top that it would be – there's a potential opportunity we think out there to improve the Superfund program. So, that would be, I think, good for us. But over and above that, it's a bit hard to say because we just don't know where it would be coming from.

Sure. Yeah. No, interesting things. And then just one more. With the prices for recyclable commodities improving, are you starting to see local competition pick up again? And also, have you seen smaller competitors follow your lead and change their contracts, too, to include processing costs, contamination, reimbursement or what have you?

Yeah. Barbara, we have not seen dramatic change in competition there. It's a very competitive line of business. But we've not seen anything different recently. I mean, it's been such short time since they move forward. And I don't think that'll happen in the short term. It takes a lot high cardboard prices to make that happen and sustained. I think people have been burned enough that they're not going to spend capital with new facilities until we see the right direction. And, yes, I think in general, I mean, we don't change things because of what others do. But at the same time, from just hearsay, we think it's so prudent to do what we all have been doing around de-risking that business, and we don't see any signs of that changing.

Makes sense. Thanks a lot.

Thank you.

Your next question comes from the line of Noah Kaye with Oppenheimer. Noah Kaye - Oppenheimer & Co., Inc.: Hi. Good morning. Thanks so much for taking the question. We've talked early in the call about a couple of – maybe some special items on the capital spending side, on the CapEx side. You called out a $50 million swing from 2016 to 2017, the New York City spend, you mentioned the leachate spend. I guess, can we talk a little bit about how to think about a more normalized kind of CapEx level and the potential for CapEx spending moderation looking beyond 2017 because it does seem like there are a number of higher items impacting the year?

Yeah. Absolutely, Noah. What we've said for quite some time since I was in the CFO job, we've said that – we thought CapEx would be in a range of percent of revenue of about 9% to 10%. So, when you look at 2017 and the CapEx guidance that we gave of $1.4 billion to $1.5 billion, that's in that range for us. We do have, as we talked about, some CapEx that moved unexpectedly from 2016 into 2017. And then the rest of the increase is driven by the growth of the business and the two contracts that Jim Trevathan mentioned. Even with the $50 million that's moved from 2016 to 2017, we still think we're within that CapEx range. And I don't think you'll see us to really move much outside of that 9% to 10%. Noah Kaye - Oppenheimer & Co., Inc.: Okay. That's very helpful. And then maybe one quick follow-up, specifically on the tax reform discussion going on. Just wondering how that's impacting M&A discussions. Certainly, the potential for more cash to you and they also impact the economics of transactions for buyers and sellers. So, to what extent is that having an impact on discussion maybe on timing at all of transactions and how are you thinking about that as kind of impacting the M&A activity over the course of the year? Thank you so much.

Probably, Devina will have a better answer to this than I will. But with respect to how it's impacting our view of acquisitions, we haven't – I would tell you we haven't looked at that as an impediment at all. It's hard to say because – again, it's kind of like the environmental question. We don't really know what comes out of the administration. There's been a lot of conversation about interest deductibility going away. So, how would that impact the way we think about funding these acquisitions? There's also been some conversations about the grandfathering of debt that is – that you have on your balance sheets prior to kind of an April 1 or April 30. So, we hear a lot of this. It's probably just chatter amongst people who don't know. So, in that respect, I would tell you that it hasn't really influenced our decision. Our decision is going to be based much more on the purchase price than it is on the funding mechanism.

And then to the extent that it's impacting the way that sellers think about the landscape for moving forward with transactions at this point, we definitely think – as we've talked internally, we do think that our sellers are going to be influenced by the evolution of tax policy. And it certainly is going to be a factor in the way that they think about the optimal time to move away from their businesses. So, it's too early for us to say whether or not it can impact our ability to execute on that targeted $100 million to $200 million of tuck-in acquisitions or any other potential acquisitions that we may look at in the future. But we do think that with tax reform, you're going to see some sellers more motivated to move forward potentially, given that they'll likely have lower taxes to pay as a result of a transaction.

I told you, Noah. She'd give a better answer. Noah Kaye - Oppenheimer & Co., Inc.: Well, I appreciate the additional color. Thank you very much, and congrats on the quarter.

And your next question comes from the line of Tyler Brown with Raymond James. Patrick Tyler Brown - Raymond James & Associates, Inc.: Hey, good morning.

Hi, Tyler. Patrick Tyler Brown - Raymond James & Associates, Inc.: Hey, Jim. I know you don't give quarterly guidance, but if I recall, last Q1 was really strong on an extra day and I think mild weather. How should we be thinking about volumes here in Q1 versus the full-year guide of 1.2% and 1.6%?

Well, you're absolutely right about that. Last year, was a very mild winter. So, we were a bit worried when we talked about Q1 last April that we would have told – the big question was how much volumes that we pull into Q1, particularly into the month of March because March was very strong. I mean, January and February were fine, but March was particularly strong last year. I would tell you that aside from the bad rains that we've seen on the West Coast, primarily in Northern California, that the weather has been kind of normal this year, not as mild as last year, but the weather has not had a dramatic impact on us so far. Now, we're only halfway through Q1, but I think so far, we're pleased with what we're seeing. It hasn't been a 2014 or whatever it was where we had the polar vortex or 2015 where New England had 50 feet of snow. It's been more of a normal winter, and hence our volumes have been kind of what we expected. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. Okay. That's a good color. And then you guys noted New York and I think LA as well as contract wins. I'm just curious how much of the volume growth this year is attributable to those?

Yes, you're right, Tyler. I didn't mention the LA contract, but it's a new agreement that we've been awarded. We've been awarded two of those zones that the City of LA has extended. We've got the exclusive commercial and multi-family franchise for the West Valley and Southeast Valley zones. The real good thing there is that they are contiguous with our current infrastructure, and it really fits our business. And we're very pleased with that. It's also a large contract, life of value of that contract. It's a 10-year deal. It's $1.3 billion at accretive margins to the company. But in our plan, I mean the LA is scheduled to start July 1, to the point of your question, July 1. We have until the end of the year, so until January of 2018, to make the transition. And the real issue there as opposed to New York City is that we currently have 8,500 customers in that open market of LA that's going to these franchises, we'll end up with 16,000 customers by roughly January of 2018. So, they'll piece their way into our structure during the course of the second half of 2017. Yeah, so.

Some hundred did go to other – it's not just an incremental 8,000.

That's right.

There's some swapping going on here, so.

A lot of operating involved.

So, there's a lot of logistics involved.

A lot of operating cost changes that'll occur in the second half of the year. So, I don't think you'll see dramatic value. And we haven't put that in our plan dramatically at to be at July 1 run rate. We've parsed that in throughout the months in the second half of this year. The same for New York City. Although it starts July 1, there's some work to be done at the MTSs and to get the rail capability right for High Acres and Atlantic. So, that'll piece its way in. They'll help our volumes, but there I think our volume forecast and guidance is about what we expect. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. No, that's helpful. And Devina, I know the K will print soon, but what were cash taxes paid in 2016? And is the expectation that cash taxes paid in 2017 will be roughly the same in terms of dollars? And is this kind of the right – I don't know if this is the right technical term – but kind of a cash tax as a percentage of pre-tax if that make sense?

Right. So cash taxes paid in 2016 were $470 million. We expect those to increase by about $125 million in 2017, and of course that will vary depending upon our pre-tax income and how the year actually comes in. So, I wouldn't say that 2016 is a normal year because we had a $100 million realization from the debt restructuring that we carried forward into 2016. So, look for 2017, again, it's too early to say what tax reform will do, but look for 2017 to be a more normal year at that $600 million level. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. Very helpful. Thanks, guys.

And our final question comes from the line of Michael Hoffman with Stifel. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Hi, Jim, Jim, Devina. Thanks for taking my questions. I mean, believe it or not, there's still some left. I have a question with regards to volumes. Given your urban model, your higher concentration of urban, there was a slower recovery in some of that commercial container volume, but it's clearly had showed up in 2016. And that's better quality business than C&D and special waste. So, as that shift is occurring, how do we think about the operating leverage to the business model of that, and where do you think you are in innings, if you will, if we would frame it that way?

So, Jim and I can take a shot at that. But I think you're right about that, and I think as you talk about the urban model, it really ultimately starts to show up in the commercial line of business I think. And that's why I think you've seen – that's a part of why I believe you've seen our commercial volume on a nice increasing trend over the past probably 12 quarters. But there are more pieces to that. There's the fact that we're doing a better job with customer service and so we're hanging on to a bigger percentage of our business. The churn has gone, as Jim mentioned, from a high of 11.5% or close to 12%, down to approaching 9%, and we think we've got the opportunity to get to 9% on a full-year basis or even below. But you're right, Michael. I think that this urbanization of the United States and Canada as well is resulting in these commercial volumes for an urban company like Waste Management. We're largely in kind of urban areas, is resulting in some of that volume growth. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: And so following through, the operating leverage, you should see this ongoing operating leverage as a result of this improving pattern that hasn't peaked yet.

Well that's right because, as you know, the commercial line of business has higher operating leverage than the other lines of business, particularly residential. So yeah, I think while we take some credit for this, when we look at OpEx as a percent of revenue, some of it is the efforts of our SDO and our MSDO, so a lot of it is what we are actually proactively doing. Some of it is just what you say, which is the as volume moves into the commercialized business, our operating, our flow-through really improves.

Hey, Michael. Three points to – that total agreement with Jim and your theory of, for example, our addition rate and that's largely driven by the commercial line of business, although it includes the industrial line as well, the permanent business on the industrial roll-off line. But we have flipped that addition rate and defection rate, so that we're net positive in number of new customers, starting roughly midyear to early third quarter last year. And that, we see that continuing of the add rate has gone up fairly dramatically, just as the defection rate has gone down. So those lines have crossed. And that's a really good sign for us, both in the selling process, but in the overall economy, as you mentioned. The other thing I mentioned earlier, is that service increases have outpaced decreases 12 consecutive quarters, and that's a real positive for us. And it bodes well given some of the economy improvements that we're seeing. And then lastly, the container weight issue has not changed dramatically for us up or down. I mean, it stayed about where it is. And that's, we think, a good sign. The economy is moving forward, and we think we will gain both revenue, but more importantly margin out of that growth. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: And that last point, is it flattish with a positive bias or flattish, just flattish?

Yeah, just flattish, it depends on quarter-by-quarter, it's changed some. But not so much with service increases. That's been very consistently positive. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then if we could shift gears to the sales outlook for 2017. If I take your comments about price volume, recycling, guess at what the deal rollover is, and I'm assuming you're somewhere around $50 million or $60 million a deal rollover, that puts you kind of in a $1.42 billion or I mean, $14.2 billion to $14.3 billion. But then if I hear your comment about capital spending as a percent of revenues, I take the midpoint, I'm at $14.5 billion. So I'm trying to understand, what's the right sales number for 2017?

We're thinking about revenues being just north of $14 billion in 2017. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: So, kind of $14.1 billion to $14.2 billion?

I would say on the low end of that, Michael. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. That seems very conservative. I mean, if you just take the price and volume assumptions you've given on the 13.6%, that puts you at 14.07%.

So, I would say the way that we're looking at it is the build of volumes of 1.2% to 1.6% price of right – or yields of right around 2%. And then we're not building in anything specific under recycling line of business from commodity price. We're not building in anything from foreign currency, either, and we also leave fuel flat. So, ultimately, that's what builds from this year's 13.6% to 14.05% to 100%, basically I would say.

And I think the lack of acquisition at the same level as what we've done with those three regionals that Jim mentioned, we have in there I think a little over $100 million, $150 million in tuck-in acquisitions. But we don't have acquisitions at the same level as the last three years in the plan. We'd love for them to happen, but we're not forecasting that today.

That's a great point, Jim.

You mentioned, Michael – I think you mentioned $50 million carryover on the top line, I think you were saying. And really because we did the acquisitions at the very beginning of 2016, we think there will be some carryover on the bottom line from some of the cost synergies, but the top-line really won't see – other than what Jim mentioned, won't see much in the form of inorganic growth. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. That's fair enough. That helps. Actually pulls that closer.

And the other piece of that, Michael, that might be helpful is that we've got to think about yield as being off of an $11 billion base of revenue rather than the $13 billion. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Got it.

Okay. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: That's a big part of it then. Okay. That's fair enough. And then, yeah, I just want to touch one quick question on the regulation. I mean, this industry has got very mature regulation. There's very little changing around the margin. Even if Scott Pruitt comes in and got the heck out of EPA, the regulation you've lived with are really very mature. So, there's a probably bigger probably that whatever happens, regulatory was going to impact your customer more than it's going to impact you directly. Isn't it – is that fair?

I completely agree with you. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay.

Whether it's MSW regulations that affect our landfills or whether it's regulatory impacts to our landfill structure or recycling or hazardous waste business. Those states are allowed to exceed the federal guidelines and some do, and I don't see that impacted. I just don't see states getting in and changing those kinds of regulations that would impact our business. Could something come out of the blue? I guess it could. But I have seen nothing, no discussion or no intonation that it's even close to affecting our business the way the question was worded.

Yeah. I think one exception to that would be the Superfund.

That's right.

Which is really regulated. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Right, which is the other side of that, which is if Pruitt rolls back the levering enforcement budget the way it was and using enforcement, so less enforcement to a lot of industrial players look at the project world and say this is the most favorable environment I'm ever going to have to clean things up, so let's get them done in the next four years.

Yeah.

But they still have to clean them up. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Yeah. And might as well do it with a friendly regulator than one that's been thumping near the head with the club.

That's the upside, right? Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Yeah. Right. Okay.

That we think that could come out of this, but as we've said to the earlier question, it's a little hard to tell because we just don't have real goods visibility yet. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Four weeks in. Last question, what – are you getting a blended average tip fee positive impact from being awarded the two Brooklyn Marine Transfer Stations when you think about where that volume is going?

One more time, Michael. I'm sorry. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: So, when you think about the implied tip fee that's in the total price that they're paying per ton, because there's – certain amount of it is for logistics, but the rest of it for – you can walk back to that logistics part out and get to what's the tip fee look like, are you getting a tip fee improvement as a result of the New York City contract at high acres or I'm assuming this is going down to, is it King George?

Yeah, down to the Atlantic landfill. Well, first of all, Michael, we don't publicize that number, we don't – the individual disposal component. It is an all-in price for transportation and disposal and includes a lot of handling up the material and moving the material. But it is not going to be a detrimental impact to the company on a margin basis. It is accretive in margin both EBIT, EBITDA. So, we are – that's – those two are very good contracts for us. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. Very good. Thank you.

Thank you.

All right. Thanks.

So, just to close here, 2016 really was a great year for us. And closing with such a strong year really gives us confidence that the business is hitting on all cylinders. I think we have the team, the strategy, the assets, the culture to make this year and years to follow successful really by any measure. So, we're pleased with where we stand right now, and thank you for joining us. We'll see you next quarter.

As a reminder, the on call replay for this call will be available in approximately two hours, beginning at 12:00 PM Central Standard Time and will last until March 2, 2017 at midnight. If you would like to access this replay, you may do so by dialing 1800-585-8367, 855-859-2056 or locally at 404-537-3406 and will use conference ID number 55317607 to access the replay. Thank you for your participation. This does conclude today's conference call, and you may now disconnect.