Earnings Call: Q4 2020

Feb 23, 2021

Good morning, and welcome to the GFL Environmental 4th Quarter Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Patrick DiPigi, Founder and CEO. Please go ahead. Thank you, and good morning. I'd like to welcome everyone to today's call and thank you for joining us. This morning, we will be reviewing our results for the Q4. We will also provide our outlook for 2021 as well as additional considerations through to 2023. I'm joined this morning by Luke Poulosi, our CFO, who will take us through our forward looking disclaimer before we get into the details. Thank you, Patrick, and good morning, everyone. Please note that we have filed our earnings press release, which includes important information. The press release is available on our website. Also, we have prepared a presentation to accompany this Call that is also available on our website. During this call, we will be making some forward looking statements within the meaning of applicable Canadian and U. S. Securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward looking statements are subject to a number of risks and uncertainties, including those set out in our filings with the Canadian and U. S. Securities regulators. Any forward looking statement is not a guarantee of future Statements and actual results may differ materially from those expressed or implied in the forward looking statements. These forward looking statements speak only as of today's date, and we do not assume any obligation to update these statements whether as a result of new information, future events and developments or otherwise. This call will include a discussion of certain non IFRS measures. A reconciliation of these non IFRS measures can be found in our filings with the Canadian and U. S. Securities regulators. I will now turn the call back over to Patrick, who will start off on Page 3 of the presentation. Thank you, Luke. I want to start this morning with a recap of 2020 as I believe it has been an extraordinary year on many fronts. On Page 3 of the presentation, we have a summary of the many ways in which we have delivered on the commitments which we made at the time of our IPO. While the numbers speak for themselves, I want to acknowledge that none of these achievements could have been possible without the dedication, contributions, Countless hours and love that each employee has for this company. From our frontline workers to our employees who support our operations in the field And all of our corporate office employees, GFL is full of heroes. All of our employees did their part to help GFL navigate successfully through 2020, keeping each other safe and ensuring that we continue to meet our commitments to service all of our customers. There is no doubt that the most important part of any business is the people. If you have dedicated, loyal and hardworking employees, you will have a successful business. I have never been more proud of what our employees working together in the face of great uncertainty accomplished in 2020. It is truly inspirational. I have said many times over the years, never let a good crisis go to waste. But as we headed into Q2, we had no idea how much We would all be challenged by the impact of the COVID-nineteen pandemic, both personally and professionally, Or that we would be able to achieve so much in the face of a global crisis. Even as we face many obstacles, We're able to take advantage of market opportunities and deliver on the commitments we made to our stakeholders at the time of the IPO and more, including We expanded our EBITDA margins 100 basis points despite unprecedented COVID related volume declines across much of the platform. We deployed nearly $4,000,000,000 on strategic accretive acquisitions. We reduced our cost of debt by almost 200 basis points. We delevered our balance sheet by over 3 turns, and we accomplished all of this while being delivering the best safety stats in GFL's history. To expand on the M and A comment, the majority of the $4,000,000,000 that was deployed on 2 larger acquisitions in Q1 and the WCA WM ADS acquisitions in Q4. The WCA and WM ADS integrations remain on track, and we remain confident in the opportunities we previously outlined for these deals. The Q4 revenue contribution from both of these businesses exceeded our expectations and early indications from 2021 are also positive. During Q4, we also closed 7 smaller tuck in transactions and the pipeline is lined up such that 2021 could be another outsized year for M and A, something we will touch on more in the guidance portion of the call. During 2020, we were also able to make great progress on our sustainability initiatives. Sustainability has always been a core value of GFL. We recognized early on that providing customers with sustainable environmental solutions Would be a key value proposition for all of our stakeholders. To name a few of our most notable achievements in 2020, we published our 1st sustainability report, which highlights the many ways in which sustainability is in our DNA, something for which we are very proud of. Our PEG Merck was named the 2020 Recycling Facility of the Year by the National Waste and Recycling Association and our Environmental Innovation Program was recognized by with a 2020 Seal Environmental Initiative Award. We will be issuing specific goals and targets with our 2021 sustainability report, so stay tuned for that. From my perspective, the most exciting part of 2020 is how it has set us up for 2021 and beyond. We have assembled the pieces of the puzzle to build that we believe is a rock solid foundation that we can leverage for exceptional high quality growth over the next several years. And this is where we want to spend the majority of our time this morning, talking about not only our 2021 guidance, but also our outlook for incremental opportunities that we see going out to 2023. We believe that we have a unique set of circumstances for industry leading free cash flow growth over the midterm and want to highlight the basic building blocks for our plan. However, we get into 2021 and beyond, we will quickly summarize how I'll pass it over to Luke, who will take you through the details, but at a high level, we exceeded our plans on nearly every level. Despite even greater than expected COVID related headwinds in our Eastern Canadian business, revenue increased by 37% and the business as a whole will return to overall positive organic growth for the first time since the Q1. Solid waste pricing ended the year Strong, thanks to late Q3 pricing initiatives and volumes continue to show meaningful sequential improvements across all of our lines of business. Consistent with what we've said before, our liquid and infrastructure business have been the most impacted by COVID related volume declines, But we continue to believe that these volumes will return and the meaningful sequential improvements in the business during the quarter are supported by that view. At the adjusted EBITDA margin line, the 4th quarter saw expansion of 190 basis points, driven by continued margin expansion in our solid and business is partially offset by the compression in our infrastructure line. Our solid waste business ended the year as a whole at a 30% margin, an outcome in excess of what we had guided to toward an area where we think we can continue to build on. And lastly, We ended the year with nearly $360,000,000 of adjusted free cash flow. While we are extremely happy with this outcome, We see a clear path to more than doubling free cash flow over the next few years, and that's what we'll focus on as we continue to discuss guidance. I'll now pass the call over to Luke. Thanks, Patrick. I'll walk through the next couple of pages of the deck summarizing the Q4 results, and then I'll pass it back to Patrick as we get into the outlook section. On Page 4, we have provided our usual summary of revenue growth by operating segment. Revenue increased over 37% compared to the prior year period, driven by M and A contribution, strong solid waste pricing and continued sequential volume improvements. Overall, organic revenue growth was 320 basis greater than Q3 and was positive overall for the first time since Q1. For the quarter, we exceeded our expectations and realized 3.6% net price, Thanks to the pricing activity in late Q3. Again, our overall pricing in the solid waste business in the current year continues to be impacted by suppressed IC and I volumes And by negative CPI adjustments on certain municipal contracts. With Q4 as a result, however, we ended the year with 3.9% net price, An outcome we're very happy with and one that emboldens our confidence in being able to continue to deliver on our stated pricing goals as we look forward. Consistent with the Q3, we also realized an incremental 70 basis points by the commodity prices, where we realized a blended basket price nearly 40% Higher than that of the prior year and up over 15% from the Q3. As we continue moving our contracts towards a fixed price processing model, We will see less volatility in our results by the movements in OCC and other commodities. Solid waste collection volumes were down 3%, A 60 basis point improvement over the 3rd quarter, which was driven by a 5% decrease in IC and I, offset by nearly flat volume in residential. IC and I volumes were 250 basis points better than in the 3rd quarter as we continue to see sequential improvements across nearly all of our markets. Post collection volumes were positive 10.5%, a 200 basis point improvement over the Q3 and once again largely on the strength of MRF processing volumes in Canada. Excluding Merck volumes, post collection volumes were negative 7.4% for the quarter, which was slightly behind the 6.9% decline we saw in Q3, but largely attributable to a tough comp in our organics processing servicing line as both transfer station and landfill volumes were meaningfully better than Q3. The volume story remains regional specific With our Eastern Canada solid waste business, where incremental COVID restrictions were implemented during Q4, continuing to lag our other markets, where reopening activities have progressed at a faster rate. As Patrick mentioned, the WMADS and WCA acquisitions contributed revenue just over US55 $1,000,000 on a same store basis, which was US10 $1,000,000 more than our original guidance, which we believe indicates the seasonality profile of the asset Not as pronounced as we had thought, but also an early validation of our expectation on those 2 acquisitions. To recap the solid waste volume story for the year, Q2 was negative 8.3%, Q3 was negative 2% and Q4 was basically flat. While the overall volume numbers were supported by the strength of our expanding RIF operations and the Canadian residential contracts where we repaid by the ton and benefited from heavier curb weights. We nonetheless think these results are a true testament to the resilience of our overall platform. Our Infrastructure and Liquid Waste businesses saw the greatest sequential improvements over Q3, and we remain encouraged by that trend line. We continue to believe that the combination of permit delays driven by COVID related shutdowns and temporary capital spending deferral by our Customers are yielding a slower volume recovery than we've seen in solid waste. 5, the volumes will return as reopening activities continue. The regional nuances we described in Q3 continue to be at play with soil volumes in the U. S. Northeast and liquid volumes in the U. S. Midwest lagging the recoveries we've seen in our Canadian markets. Used motor oil volumes continue to lag the prior year, but the gap continues to close from the low we In Q2, when we get to our outlook section, we'll see we're taking a more conservative view on the expected timing of the recovery of these businesses. But again, we believe it's just the timing and when the volume returns, we will enjoy above average growth as our customers catch up on previously deferred spending. On Page 5, we have presented margins by segment for the quarter and for the year as a whole. Once again, consistent with Q3, We ended solid waste margins by 2 40 basis points in the 4th quarter, an achievement we believe once again demonstrates the success we are having with our multi pronged strategy of leveraging the platform to drive incremental profitability. The key components of the The key components of the solid waste margin walk include 57 basis points from lower diesel costs and 45 basis points from commodity pricing, partially offset by 10 basis point headwind from incremental COVID related costs. Acquisitions were slightly margin accretive at the segment level as the recent M and A in the U. S, which contributed margins higher than our base business, Offset the drag from tuck ins in Canada that have yet to achieve what we believe is their full margin accretive potential. Excluding these items, Our base solid waste business continue to realize organic margin expansion despite ongoing COVID related volume headwinds. On Infrastructure and Soil, we continue to see margins impacted by the change in volume mix, whereby we are seeing a smaller proportion of total volumes coming from low volume, high frequency customers. This change in mix coupled with the relatively higher fixed cost structure of this segment resulted in margin compression despite our continued focus on cost control strategies. As we said last quarter, we fully expect that as volumes recover, we'll see significant margin expansion consistent with our view that this Our liquid waste business showed the strongest relative recovery of all of our segments with 9 10 sequential basis points improvement in organic revenue versus the Q3. We continue to flex operating costs out of the business And this focus on cost containment coupled with continued synergy realization and nearly 28% increase in net use motor oil selling prices drove the organic margin expansion as compared to the prior year. Similar to our commentary in Q3, when you think about the $9,000,000 revenue decrease from lower liquid Volumes on a year over year basis. The realized margin expansion highlights the underlying operating leverage we are realizing in this segment. We remain confident in our views that the Liquids segment can get better than mid-20s margin business in the near to mid term. Turning to Page 6. Adjusted cash flows from operating activities were $240,000,000 for the quarter $767,000,000 for the year, Results that exceeded our expectations in the guidance we previously provided. In the reconciliation, you will note that the calculation of our adjusted free cash flow, We backed up the net working capital investments we made in the Q4 on the 2 recent deals. As we highlighted in our Q3 call, the WM ADS Acquisition does not come with opening working capital, atypical for us on a transaction that size and a dynamic that was factored into our valuation. So So we view the initial investment in working capital as a financing activity and back the amount of the operating activities on that basis. Turning to broader working capital management, Our efforts around our order to cash cycle time are continuing to contribute to our success. Recall our guide was to end the year neutral in terms of working capital, And we ended up $5,000,000 positive, including the $60,000,000 net drag from the recent M and A. So like for like, we ended up plus $21,000,000 of the working capital line, outcome we're very happy with considering the backdrop. In terms of credit exposures, the quarter did not see any significant incremental bad debt. As we said before, we continue to When thinking about cash from operations in Q4 as compared to Q3, it's important to consider the timing of our Cash interest payments, Q4 included $126,000,000 of cash interest, excluding the $35,500,000 of debt prepayment penalties versus $36,000,000 of cash interest costs included in Q3. With recent refinancings, we've been thoughtful about equalizing the cash interest payment cadence across the quarters. Although there will still be some volatility in 2021, the cadence by the end of the year will be closer to a straight line pattern of interest payments. Net CapEx for the quarter was $117,000,000 Recall our guide for Q4 was $90,000,000 for the base business and additional approximately $50,000,000 For potential incremental organic growth and the Q4 acquisitions, both the integration CapEx and regular CapEx for those businesses. When you unpack the $117,000,000 what you have is the organic number right in line with guidance and the cash spend on the recent M and A coming in lower than expectations, but that's largely just a timing issue. We remain confident in the ongoing CapEx needs for these two businesses as previously communicated. We deployed an incremental $80,000,000 for During the quarter, over half of which was at December 31. We think these acquisitions will generate approximately $30,000,000 of annualized revenue. Although to clarify, over half of this revenue is already included in the rollover guide we provided in Q3. The main cash flow from financing activities are listed on Page 6. As you've seen, we've continued our strategy of pursuing opportunistic refinancings, and I think the success of that strategy is speaking for itself. Although there are costs associated with the refinancing, such as the $35,000,000 incurred in Q4, the interest rate differentials are so significant that the payback and returns analysis We are constantly evaluating opportunities to reduce our borrowing costs and you will see us continue to access the debt markets as attractive opportunities present themselves. We presented a full year adjusted free cash flow at the bottom of the page, but I would highlight the number there reflects both our pre and post IPO structure, And so it's not necessarily representative of our true current run rate. In the guidance section, we'll walk through where we think we can take adjusted free cash flow over the next couple of years. Quickly on Page 7, once again, we've included the summary of net leverage consistent with how we presented in the past. All I'll say here is that we ended the year in line with our previous messaging And we remain committed to the leverage philosophies we have discussed with each of you at length. We continue to have ample liquidity to support our growth goals while delevering our balance sheet and reducing our cost of borrowing along the way. I'll now turn the call over to Patrick, who will pick up on Page 9 of the presentation. Thanks, Luke. Before we get into guidance, I wanted to provide some context as we're going to do things a little bit different than some of our peers. Although we are managers, 1st and foremost, we are shareholders, And I believe we have some of the best incentive alignment in our industry. I started this company in 2007 with $250,000 which is all the money I had at the time. Since then, through a lot of blood, sweat and tears, both mine and our employees, the support of our various partners and a little bit of luck, we have grown The business into the 4th largest environmental services and waste management company in North America. I'm personally one of the largest single shareholders and I would argue no one is more incentivized to see GFL continue to succeed over the long term. And when you look at the broader management team, both the other and the other field level leaders, you'll also see best in class shareholder alignment as the broader management team has a material amount of equity in this business. As I've said before, this is a management team that knows how to create equity value. We've done it for over the past 13 years, and we see a very clear path to creating Material incremental equity value in the near to midterm. This is why in addition to providing our 2021 guidance, we are also going to provide our outlook through to 2023. We see clear opportunity to significantly grow our free cash flow and we want to make sure everyone has the same building blocks that we're thinking about. So turning to Page 10, we've laid out how we plan to do it. What's summarized on this page is the same as the 4 pillars of our strategy that we've been speaking of since our IPO. We will continue to speak to these over the next several years as we believe they are the cornerstones of our path to creating long term shareholder value. 1st, organic growth. As we said, we think our market and asset position together with where we are at Optimizing the pricing of our existing portfolio positions us for outsized organic growth compared to the industry as a whole. Continuing to leverage our position in many sustainable service offerings should add to our growth opportunities as regulations and sentiment continue to evolve on ESG related matters. And finally, we see opportunities for capital redeployment, where we look to divest certain non core assets around the edges of platform and reinvest those proceeds into organic growth initiatives in our core markets. This is a 4th lever we believe can incremental organic growth, particularly on the free cash flow line. 2nd, margin expansion. We've continuously said that we believe we have the path to raise margins across All of our segments and bring the blended business to a high 27%, low 28% margin over the next few years. I think we've proved our strategy is working in 2020, increasing margins by 100 basis points during a period where many others were going in the other direction. And what we did despite that compression in our infrastructure business, as Luke explained, we think we can expand margins in our base business another 80 to 90 basis points in 2021. And that's with our conservative views on volume growth and reopenings, which Luke will outline in a moment. When volume growth returns to what I would call more normal levels, We expect high incremental contributions, which can drive higher margin expansion even further. The 3rd pillar is reducing our cost of debt. We have decreased our average interest cost of long term debt by almost 200 basis points since 2019. And although we are very proud of that achievement, We still have an average cost of interest at about 4.5%, which is a number we think can significantly improve. We will outline what we think is the art of possible in this area, but we think there's easily another $50,000,000 of incremental free cash flow we can generate over the next several years from this lever alone. The final pillar is M and A. I will dive into this area in detail in a minute, but suffice to say, we believe there is significant opportunity to deploy capital to attract at attractive multiples for assets in the long run will be very accretive to our business. These four pillars are areas you'll hear us talk about a lot as we I'm now going to pass the call over to Luke, who will walk through the 2021 guide for our base business. I will then identify some incremental opportunities that allow we are not including in our although we're not including in our base guidance, Are areas that we believe can meaningfully impact our launch out point going into 2022. Okay. So on Page 11, we've shown the building blocks of our guide. What I'd say is that the outlook is based on the environment and market conditions we see today. We've not factored material easing of COVID related restrictions nor the anticipated volume increases that we expect to see with reopening activities. While we, like I'm sure many of you, are extremely hopeful that we can get to the other side of this pandemic as soon possible we perceive too much uncertainty, particularly in our Canadian markets, to make a call as to whether that will be 3, 6 or 9 months from now. So we've provided the guide on what we see today. Looking at the waterfall, we're assuming solid waste price in the 3.5% to 4% range, consistent with our past messaging. With continued restrictions in many of our Canadian markets and suppressed ICI volumes across the entire platform, we're not expecting to materially outperform this range in 2021. However, we continue to see outsized pricing opportunities within our portfolio that we intend to go after once normalcy returns. Inflationary expectations should offset some of the negative CPI adjustments we experienced in 2020 and ongoing discipline around ensuring any underpriced residential contracts are renewed at rates Our return thresholds should serve to support our pricing goals. On solid waste volumes, we're seeing approximately 0.5 point to a point of growth. Now we know some of the expectations for higher growth numbers here, but I remind everyone of the following two points. 1 is we had a lower volume decline during the year than much of the industry. So we're coming off of a higher low, if you will. And 2, we have a bigger proportion of our revenues coming from Canada, much of which is still under some of the most restrictive lockdowns. We think on average maybe a quarter or 2 behind the U. S. In terms of reopening timelines. From a cadence perspective, we anticipate in Q1 will be low single digits negative volume inclusive of the drag from the extra day in February 2020. Q2 should be low to mid single digits Positive on the easy comp and Q3 and Q4 flat to modest and positive. Again, should reopening activities accelerate and see a redone in P and I volumes from where we are today, that would be upside to the guide. Note that in respect of commodity pricing, as we continue to move more and more of our contracts to a fixed We're seeing less variability in our results from movements in commodity. The guidance in 2021 plays out the pricing we saw at the end of 2020, which equates to approximately $9,000,000 or $10,000,000 of incremental revenue that flows through with a high incremental margin. On Liquid and Infrastructure, We're taking a more tempered view in terms of when volumes return. Despite the significant sequential increases we've seen in the recovery of these segments, the tough comp over Q1 2020 and the concentration of revenue in some of the harder hit regions of the Northeast and in Canada and the lagging when customers' capital spending programs gear back up, All leads us to think 'twenty one in more conservative growth terms. We've shown the 2 segments together, but when you unpack it, we're thinking of liquid in the mid single digits And infrastructure basically flat. On the M and A roll forward, this reflects approximately $900,000,000 we previously communicated Plus the late December M and A reduced slightly in response to revised views on seasonality and the current winter situation in the South And then go to the 1.34 FX rate to be presented on a constant currency basis for 2020. We're providing our guidance in the 1.27 Great. So that last step being thrown on the page is to bring the Canadian equivalent of our roughly US2.4 billion dollars denominated revenue down from the average 2020 exchange rate of 1.34 to 1.27. That 4% for FX equates to about $170,000,000 and is roughly split $50,000,000 related to the rollover M and A and $120,000,000 on the base business. For every point move of FX, Revenue changes by approximately $24,000,000 and we'll provide details of impacts from FX as we report during the year. So that's the revenue bridge. For modeling considerations, remember, we still have relative seasonality in our business, largely driven by our more northern geographies. The Cadence of the annual revenue is expected to be approximately 22% to 23% in Q1, 24% to 25% in Q2, 26% to 27% in Q3 and the balance in Q4. In terms of the M and A rollover, expect $250,000,000 to $260,000,000 in Q1, $270,000,000 ish in Q2, approximately $280,000,000 in Q3 and the balance in Q4. If you look at Page 12, we have shown what that revenue translates to in terms of adjusted EBITDA, free cash flow and leverage. Remember, none of this guidance includes any incremental M and A or refinancing For adjusted EBITDA, we forecast to be able to drive an incremental 90 basis points of margin expansion, and we're expecting that expansion pretty consistently across each of the segments. When you think about the EBITDA walk, using the middle of our guidance range, after adjusting for the 1.27 FX, we're expecting about $240,000,000 EBITDA from acquisition rollover. Recall that the majority of the rollover M and A is a blend to 28% margin, so we're expecting the 2020 M and A to be slightly accretive to the solid waste margin and slightly accretive to the overall margin. The EBITDA impact of $120,000,000 of FX On the base business is a headwind of about $37,000,000 Additionally, we have approximately $15,000,000 of incremental public company and risk costs on an increase basis. The balance of just under $100,000,000 is organic growth. At the margin line, when you think about the 90 or so basis points of expansion, M and A adds just under 30 basis points and commodity prices add another 10 basis points. The $15,000,000 of incremental public and risk costs are negative 30 basis points And the FX is negative 10 basis points. So all four of those items are basically a wash and what you're left with is all the expansion coming organically from the same levers that we've been pulling and expected to continue to pull as we go forward. From that adjusted EBITDA, we're guiding towards an adjusted free cash flow number of 4 $5,000,000 to $495,000,000 based on expected net capital expenditures of around $510,000,000 cash taxes of $10,000,000 a modest improvement in working capital Offset by repayment of carriers deferred dollars and some incremental M and A related investment, ARO spend of about $60,000,000 And cash interest of $300,000,000 which again is before considering the impact of any refinancing activity. So if you're thinking about an adjusted free cash flow walk, Again, using the midpoint of the guidance, take the $360,000,000 from 2020, add the 'twenty one incremental EBITDA, At just over $15,000,000 for changes in working cap, then deduct $100,000,000 for incremental CapEx, dollars 34,000,000 for the swing from CARES deferrals, $5,000,000 for incremental cash interest and about $40,000,000 for incremental ARO and cash taxes. And at the bottom of the page, if you run the math between where we've ended 2020 and what the model shows for 2021, you'll see the business will be levered down to the mid-4s. Thanks, Luke. What Luke just walked through is our base guidance. With our current platform, Capital structure and macro operating environment, we are confident we can deliver on that plan. However, on Pages 1213, we have highlighted opportunities over which we have a degree of conviction and that would be incremental to our plan. The first opportunity is incremental M and A. The integration of the Regent transaction is well on track and we remain confident in realizing the synergies we have underwritten. The business performed well in Q4 and early indications for 2021 are also looking very positive. Although we are We were able to achieve during 2020 clearly demonstrates our ability to continue to deliver. Even in the most challenging environments, 2021 is shaping up for what could be another Active year for M and A. We have a robust pipeline of actionable opportunities that fit our model, and we could envision deploying upwards of $500,000,000 of Capital across 25 to 30 tuck in transactions throughout our existing geographies. These smaller tuck in acquisitions can be entirely self financed, primarily with our own free cash flow, which will allow for deleveraging as we grow. We are also evaluating one larger opportunity, a business that we have known for years but was never actionable. It is entirely within our existing footprint and we believe would be highly complementary. Timing of that acquisition signing could be in the next few weeks with closing potentially in the second half of the year, and we would not need any equity to finance this potential transaction. Any impact from this acquisition will be additive to what I said about the tuck in acquisitions. In addition to M and A, on Page 14, we have laid out 2 additional areas of opportunity for 2021. The first is refinancing, which we think is a real opportunity to replace our 8.5% notes with much cheaper paper and reprice our term loan. We conservatively estimate that those initiatives could result in $20,000,000 to $30,000,000 of annual savings. As always, we will be opportunistic depending on market windows and there could be Even more savings here, but we think $20,000,000 to $30,000,000 is an achievable outcome. The other item is capital redeployment, And we think 2021 could be a year where we clean up our portfolio around the edges, realizing proceeds of $100,000,000 to 125,000,000 and redeploying those dollars into attractive organic growth initiatives in some of our key growth markets. The potential The assets that we are considering are ones that are underutilized in our portfolio and as a result suboptimal free cash flow generators. So while the impact of revenue and adjusted EBITDA would likely be somewhat muted, we think we'll be able to drive an incremental $10,000,000 to $15,000,000 of adjusted free cash flow from the redeployment. So if you turn to Page 15, we've shown a bridge of what the launch off point for 2022 could be for adjusted free cash flow. Now we intentionally have not incorporated the upside from these opportunities in our 2021 guidance as the timing and quantum The impact is still uncertain at this point. However, we feel highly confident in our ability to realize the upside by the end of the year And therefore, we're thinking about an adjusted free cash flow launch out point in 2022 somewhere in the $550,000,000 range, representing over 10% of revenue and approaching 40% conversion from adjusted EBITDA. Then to take it one step further, we present a similar exercise for 202023, obviously, 2023 is a few years out and that world may look a little bit different by then. But all we're trying to show on Page is at the inflection point we have reached and the power of the model that we've built. The top of the page lays out the organic growth impact Based on the same revenue growth drivers we've been talking about all along, assumptions I would characterize is highly conservative for 2022. When you think about the potential for outsides growth as we get on the other side of this pandemic. The middle of the page has M and A and Sumptions acquiring $160,000,000 to 2 $40,000,000 of revenue per year, which we think is also pretty conservative. I think the highlight on the M and A point is these deals become more and more free cash flow accretive as They truly tuck in to our largely self financed free cash flow model. And finally, at the bottom of the page, we have refinancing. As the legacy debt becomes callable, we believe we can replace this with cheaper options and drive another incremental of $20,000,000 to $30,000,000 of adjusted free cash flow through lower cash interest expense. On Page 17, we've laid out the waterfall and showing that in our view, you don't need to believe much to see a pretty clear path to 2024 free cash flow launch out point of around $800,000,000 We understand this approach is unconventional. We said that in the opening remarks, but it's our intent and everyone to go in to update their models for the upside opportunities as communicated. Our preference would be for people to think about these, The base businesses exist today and then we will update as and when we announce new transactions. We just see some very clear building blocks for how we can more than double our 2020 free cash flow over the next few years and wanted to lay those out on a piece of paper for all to see. I'm sure there's a couple of questions, so I'll turn it over to the operator to open up the line for Q and A. We will now begin the question and answer session. The first question comes from Hamzah Mazari from Jefferies. Please go ahead. Hey, good morning. Thank you for all the detail. Just on the free cash So the long term targets that you laid out with M and A, refinancing, etcetera, Could you maybe talk about how achievable you think these metrics are? I know investors don't have a lot of public history with you guys. So just talk about do you view these targets as conservative? Maybe just unpack the free cash flow growth a little bit for us. Yes. Hamzah, it's Luke. What I would say, I mean, the components are all laid on the page, It's right between the organic, the M and A and the refinancing. I mean, you're right, we have a short history in the public market window. And I think what the one thing we have picked up Is the under promise and over deliver strategy. And so when we looked about each of those levers, we think the opportunity to outperform On all three of the buckets. Now the organic piece obviously is still time conditional on the timing of when Things reopen, but you've heard from others and I think the industry as a whole view is that it feels like things are about to take off like a rocket ship. It's just a matter of when that hits. And when it does, I think the volume component of that incremental free cash flow could be far in excess of what we've sort of laid out on the page. Look, the pricing strategy is there and that's working. The volume story, we think, will come and will be exciting when it does. We're just uncertain in the matter of when. If you think about the incrementals that are going to come from that volume, I think it could far outperform the modest organic free cash flow growth that's on that page. And then the sort of non organic piece, the financings and the M and A, I mean, again, we realize we've been in the public SPEAR for a short period of time, but we've been doing this for a long period of time. And what I would say is we have a high degree of conviction that we can Those two buckets, but we wanted to put down some conservative views so folks could at least see how we were thinking about it. Patrick, I'm not sure if there's any other pieces. Yes. But I would just say, from my perspective, this isn't A 6 to 9 month sort of I know has been a big focus on volume, but I think what you've seen over the last year that this Business has been really resilient and it's the whole sector, it's not just GFL. I mean, it's been subject to basic regional reopenings. And I think We've all performed, I would say, exceptionally well. And I think what this has proved is, like most businesses, I don't think what people understand is that Even with sort of volume declines, all of us were able to maintain price, which is not something you see in every industry. So I think when you layer that on and you look at the hockey stick effect that's going to come in late 2021 20222023, The sporting events reopening, hotels reopening, restaurants, schools, like just office buildings. I mean, There's just a big amount of volume that's going to come in. I think we're taking a very conservative approach to what we think organic is going to be, but I think we're in a very good place today. Got it. That's very helpful. Just on the volume piece, you mentioned you're kind of Extrapolating what you're seeing today. So the 2021 guide on volume growth, that doesn't include any vaccine Expectations or what's your sort of underlying economic assumptions for the volume guide? So just looking to see what potential upside is. So We've modeled basically what we saw in Q4 and what we saw in Q1. I mean, I think The U. S. Is probably moving quicker than clearly Canada. I mean, remember, 40% of our Revenue today is going to come from Canada. So Canada has been much more conservative. On the reopening, now I think that's going to ramp up significantly with vaccines here Over the next couple of months. So I think Canada is probably 4 to 5 months behind the U. S. But that being said, we haven't modeled any Significant improvement in where we are today. So that's why going back to Luke's point, I think we've taken a very conservative approach. And There's probably going to be upside to those numbers as things start coming back online relatively quickly here. Got you. And then you referenced Sort of the near term pipeline of M and A over the next 2 years. Could you maybe talk about longer term, Is there something larger you can do, Patrick? And what are your sort of long term plans as you think about A much, much larger transaction, long term, just given your overlap, with some of the other larger players In the public arena? Okay. Well, what I would say is, firstly, I'm a shareholder, right? And my job here is to create shareholder value. So at the end of the day, I'm not here to practice. We're here to win, which in turn means everybody on this call is going to win. So I mean, that's the way I think about it in my own mind. I mean in terms of our pipeline and opportunities of M and A, like Luke said, the pipeline is robust. If you look today, We have almost 13 tuck in transactions under LOI, again, which we haven't modeled. And like I said, we talked about one larger transaction, truthfully a business that we looked at over the last 7 years, but could just never get the deal over the line for whatever reason. And I'm not one to Surprise people in the public markets. I mean, I think that is an acquisition we're actively working on. And I think it could be Signing is weeks away, with closing will be in sort of Q3. So I mean that's what the pipeline sort of looks like For 2021, so you put that who knows, I guess, is probably the word. Sure. I mean, when you look at it as a shareholder, I mean, you really have to assess culturally, can 2 companies come together because that's where they're going to succeed or fail. And then financially, would it work? And can you make more money together Then apart. I mean, if you look at the industry as a whole, big deals have been successful over the years, at least since I've been in the industry, whether it was Republic Allied, whether it was Waste Connections and Progressive or whether it was recently WM and ADS, I think done right, you can make money. And I think All of those companies have done those well over the years. So I mean, who knows, but whether we're included in one of those or We happen to be the company that gets to pick up the divestitures from someone else merging would be a good outcome as well, but who knows. Well, you're a young guy. You've got a long road ahead of you. So that's great. Thank you. I'll turn it over. Thanks, Angela. Our next question comes from Mark Neville from Scotiabank. Please go ahead. Hi, good morning guys. I appreciate all the detail here. There's lots of chew through. Maybe just starting on the M and A, Just to clear the all the M and A that you sort of talked about, all the tuck in, again, it would be the plan itself on that, Maybe there is a need for some incremental debt but no equity, correct? Correct. So for the small tuck in M and A As well as the larger transaction, we would not need any incremental equity. We could self fund through Need a little bit more borrowing and using the free cash flow to offset any of the leverage related issues and again with the commitment to still Maintain leverage in the mid-4s. Right. So the larger deal that you've referenced doesn't change that equation? No equity would be required. I mean that shows that gives you from conviction from our on sort of the multiple we'd be paying and the synergy opportunity on the existing group of transactions that I said referencing That are under LOI plus the larger one. Is that larger one sold lease? I'm not going to get into detail on it, but I think it's safe to say a portion of it is. Okay. Maybe just on the margin. Again, just to be clear, the 2021, you haven't really seen much upside to volume, but there's a little bit baked in, in terms of volume recovery 2022, 2023 that sort of helps the margin Yes. Mark, this is Luke. I think that's right. Obviously, 90 bps of organic expansion in 2021, There is some positive volume. We think when the volume comes back, it's obviously at high sort of incrementals, but very modest conservative in the quantum of that sort of volume. I mean, if you look today and you think about What the sort of prize is to get back? I mean, on the solid side, we're probably missing $110,000,000 $130,000,000 of sort of revenue, Right. Like that's the sort of lost volume if you look through the year to what we would have had. I mean, when that comes back, we anticipate, particularly considering that's mostly in post collection and sort of IC and I, that's very margin accretive when that comes back. And so the IC and I, that's very margin accretive when that comes back. So we've been quite conservative in the portion of that, that we're anticipating back in 2021 And then the pretty plain vanilla growth in 2022 and 2023 that we put out there obviously isn't inclusive of any sort of hockey stick recovery there either. And then also on the liquid and infrastructure, I mean, you're probably missing the $60,000,000 in liquid and call it another $50,000,000 in infrastructure, which is very, very high accretive margins, right, just because of the sort of fixed cost nature of those businesses. So again, a little bit expansion of each of those businesses, but when that volume fully returns, whether that be late 2021, early 2022 or sometime thereafter, We think that represents meaningful upside to the numbers we've laid out. And again, just sort of just take on what you've said, I haven't been on the math yet, but this again, if you sort of the incremental margin, you spoke about from different lines of business. So to sort of get you to the targets that you sort of referenced earlier in the call for Low 20s, mid 20s and I think close to 30%. Is that sort of where you sort of land by 2023? Do you sort of hit all these targets? Yes. I think it's not just the volume, but also just looking at how we've been sort of flexing the business, realizing the synergies of all that we've brought together. So I think it's really all of those levers together. Our pricing programs are working on the middle and now the expectation of leveraging The sort of refined cost structure that we have as that new volume comes back, I think it's all those things together that now gives us further conviction of achieving those Sort of broader margin targets in totality and by segment as we have articulated. All right. I appreciate it. We'll get to it again guys. Thanks a lot. Thanks, Mark. Our next question comes from Michael Hoffman from Stifel. Please go ahead. Hey, Patrick, Luke, hope you're having a good day up there. Just to be clear, your 2021 to 23 plan doesn't in action fact pick up $210,000,000 of Pandemic loss business, but you're only showing 0.5 point to a point of volume growth. That is correct, Michael. Yes. Okay. So there's a double whammy here of do your job every day plus The upside of the reopening trade? Correct. Okay. Short now, I'm going to ask some short term questions. The $105,000,000 to $135,000,000 of year over year free cash flow growth, If you broke it into 3 buckets of cash interest, operating leverage and M and A, what how does that If you want to take the midpoint and split it up, how does that split up? So cash interest, Michael, I mean, if you look through the normalization we did in 2020, I'm effectively saying 2020's cash interest was, what, at $2.95 and now I'm telling We have a guide for next year $300,000,000 so there's a minus $5,000,000 from cash interest. You have The CapEx line year over year is going up by $100,000,000 So you have that. And then, sorry, the last number you referenced, Michael, you're talking about? So I would just give it more from a standpoint of operational leverage and then M and A. So just to clarify the business, what's the operational leverage to free cash, what's the M and A leverage to free cash offset by negative 5, 4? Yes. So if you go about it that way, I mean, if you take the M and A, I mean, effectively saying the M and A is adding The EBITDA from the M and A coming in sort of high 230s. If you incorporate that in a walk from 2020, You take 2020's number of $360,000,000 You normalize that for FX. Now the FX, you get some wins on the interest and CapEx line, but net net would have been a sort of $20,000,000 drag. And if you walk through that, what you're going to see, I think, is implied organic on the base number. You have a $60,000,000 $65,000,000 of organic sort of free cash flow in that level, which is sort of 17%, 18%. So I think when you strip out all the M and A and the other sort of noise, that's what you're really left with, the sort of operating leverage being driven by the business. Okay. And then the other number I'd like to 0 in on, your cash flow from ops range has improved as The percentage of revenue is pretty meaningfully from low double digits up to almost 20%. You're sort of 19.5%, 20% for 'twenty one. To hit a lot of what you're laying out, that cash flow from ops number needs to improve and it's not just net income doing that. So how much working capital do we have to play with that can come out of this model and help drive this into a 20 2 23 percent of revenues as cash flow come off. Yes. So the cash flow come off, like I say in 2020, I mean you really The adjusted number, obviously, in the Q1, a lot of sort of noise in that number. And so when you look at the adjusted and where it's at, the $770,000,000 we had For the year and where that's going, I think there's sort of less of a walk at that point, right? And so really what you're seeing here is The interest component, right, if there's a $300,000,000 drag at the interest line, we're really now leveraging that. We're going forward to adding all the sort of incremental net income, if you will, But without any incremental sort of interest coming off of that. So you're getting, I think, a lot of leverage on that line. Working capital, I mean, in the guide we're giving, This year, working capital is some noise with CARES, etcetera, but really just modeling a modest working capital improvement for next year. So sort of On the base business, if you will, kind of plus $10,000,000 to $15,000,000 We think the working capital prize, as we've said, in the business This far in excess of that, but again, a lot of that exists in our legacy sort of Canadian business. And just with the uncertainty on reopenings, We didn't think 2021 was the year to guide to a big sort of prize on that piece. It's still there. I think it's probably just more 2022 plus number. So really, I think once you've normalized and looked at our 2020 adjusted The cash comps as the starting point, you see it's really starting to leverage that sort of finance cost component of it, which historically has been a large drag And you're being able to see the sort of true sort of operating income margin of the business come through. Okay. And then back in the Q4 and several different virtual settings, Patrick, you offered up that liquids While it was a good business while you grew it, it isn't necessarily core to the long term strategy. Do you still maintain that thesis? I mean, like I said from before, if someone wanted to pay us a big price for it, I think It was something we would look at. I think where we sit today, the business is recovering exceptionally well. Canada almost hit budget for the actual year. I mean, our biggest impact was really in the Midwest operations and liquidate business. Our Canadian business ran at above mid-20s margins for the year, and I think it's recovering well, and I think it's set up To do exceptionally well this year. So I mean, our view is just sort of given the relative size and scale that we're going to keep we're going to My view is to keep it, it's a good gold vehicle, it's a good free cash flow generator. At this point, I don't see a reason that we would do something with it. But you would entertain it, it's paid the right value for What you're saying? Sure. Like anything, right? Any line of business, I guess, if someone wanted to Again, we would assess whatever that would be at any time. And then on the portfolio cleanup, What's the timing of those proceeds showing up? Or do you have a line of sight on that? Yes. So I mean, the view is, I think it's a first half Of 2021, so I mean, I think definitely a line of sight. The anticipation is we'll get it done in the first half of twenty twenty one. And then last one for me. Is there anything you can do to help take the volatility out of the infrastructure margins? I mean prior to COVID, I mean it was like a beautiful sort of little again, it's more of a regional issue, right? Like We have exposure to Ontario and Quebec and D. C. In that market, and the Northeast is where one of our facilities Now the amount of infrastructure dollars I can tell you that are being announced in Canada and even through the Northeast that we've bid on facilities. I mean, going back to your earlier point and the recovery, I don't know exactly when, but I would say by Late Q3, beginning of Q4, we're going to experience in that LOB what we've experienced really from 2016 through to 2019 when COVID hit. I mean, there is a significant backlog of projects and things that Are essential that actually has to move. If you look at the Ontario market and Quebec market, the amount of transportation spending that's been announced, I mean, which just sort of fits dead smack in the middle of where we receive a lot of the volumes and you look at a bunch of the opportunities on the West Coast and some of the Recent projects that have been priced to go into our Northeast facilities, I mean, I think it's going to be I'm pretty bullish about it. I mean, there's nothing you can really do today in this situation, but I think you're going to see that recover at faster rates than you see the rest of the business just because of the impact that we experienced for the last year in that business. Okay. Thank you very much. Thanks, Michael. Our next speaker is Walter Spracken and he From RBC Capital Markets, please go ahead. Thanks very much, operator. Good morning, everyone. So I'd like to come back on your thoughts on leverage and clarify a couple of things. So first of all, You ended the year 4.6%. You said you could deploy all of the capital, The $350,000,000 to $500,000,000 in a self kind of self financing way on the $350,000,000 to $500,000,000 But then there's the larger acquisition on I think you answered the question that you could do both without the need for equities of both the $350,000,000 to $500,000,000 plus the larger acquisition. And would that imply essentially you might go above 5 by the end of the year, but a line of sight to get back down to mid to low 4 1 year later, are we looking at that the right way? Or is there something you're thinking about? No. Yes. No, I mean, you're directionally correct, but Leverage would stay generally in the same range that it would be today if the larger acquisition got done. Walter, I think the thing to consider is we start the year at 4 point That's going to naturally delever. Even if you do the small tuck in M and A, you're still going to delever as you go throughout the year. So if you get by the time you get in the back half, Which is when something larger would potentially close. You brought leverage down and then you're able to sort of do that acquisition with still respecting That high mid to high 4 is capped that we've talked about historically. Going above 5 is not in the cards. Got it. Perfect. Okay. That's great. Just a small one here. The free cash flow guide, you put refi as a kind of an opportunity for that $20,000,000 to 30,000,000 What is an opportunity and not built into your free cash flow guide? What would stop you from doing something like that in 2021? I think from our perspective, when we modeled it, it's just to be honest with you, it was just analyst models like of when that So you got to realize and we typically do it when there's an opportunistic point in time to do it. So that could happen next week. It could happen In May, it could happen in June. So I think the view was that we would just make everybody aware of it when it was done so people could update their models. But Our view is it's going to get done imminently whenever that is, when that market window is there for us To execute in the best way, but it's going to happen sooner rather than later. Yes. Walter, I don't think we characterize it much different than the sort of Outside volume recovery and M and A, we think those are both things that are probably going to happen in the year, but just don't know exactly when. And so we'd rather just articulate the art of the possible in terms of what that could look like. So we both could consider that on the side, but don't have it sort of taint, if you will, The base business guide of what we have today. That's really the sort of thought around it. Yes. That totally makes. Okay. And last question here is really on Strategic focus, when you look at your book of business right now in terms of what markets or not markets, but segments you're in, You mentioned the sale of non core. Can you give us some color around how you see your business side of your kind of the solid waste aspect? What areas do you like where you see opportunity to scale up? And what would be areas that really might be too small within your organization that you might look to divest? Yes. I mean, so from like we said before, there's a couple of markets that we've acquired with recent businesses that, again, they're good assets. They're just, In our view, probably more strategic value to some players in those markets where We just don't see a real opportunity for us to really want to deploy a significant amount of capital because we have better use for our capital. I think from an M and A perspective, I think, again, capital allocation. And like we said, All the capital that we have allocated for 2021 is going to go into the existing markets In the existing business lines that we're already in, so that's the 9 provinces in Canada and 27 states in the U. S, I think there is probably It's more a little bit heavily weighted to Canada today. And again, from my perspective, I think it's an attractive time To acquire in Canada, number 1, we get a lot in the U. S. And those guys are integrating and digesting. But in Canada, the guys have largely been sitting on the sidelines for a little bit. And I think it's an opportune time to acquire. I mean, You get to see the highs of some of these businesses that you were on in 2018 2019. You've watched the lows. You're valuing them off an LTM number that's Probably more reasonable than it was in 2018 2019. We have ultra low interest rates. And then we're going to have, in our view, a very strong recovery through 20222023. So I think now is the time to sort of deploy that capital. When you look At the borrowing rates, I mean, when you're borrowing money at we're talking borrowing money at 1.5% to 2.5%. I mean, one could argue, is that an asset Or is that actually a liability? Like and that's on a it's only going on a pretax basis. So I think we're in a very good spot today With the platform, again, I mean, the ones that are going to be the most accretive to us are going to be the ones within that footprint today. And given that platform that we have, I think we're just going to again juice as much of the fruit as we can Within that platform, I think that's going to be the most synergistic. Makes sense. Appreciate the time. Our next question comes from Adam Jonathan from ADW Capital. Please go ahead. Hey, Patrick. This is Adam Wyden, I guess they have Jonathan in there, our analyst. So, look, I think you guys have done a lot of numerical kind of conversation and I just want to take a step back. I mean, you're basically 1 year into your IPO And you still trade basically 3.5 turns cheap to waste connections. You clearly have a much Longer runway in front of you, your guidance and your shareholder value creation Kind of initiatives are far more ambitious than theirs. Can you talk a little bit about what you think you can do to narrow that gap in Communicating it and then I have a couple of questions kind of qualitatively about the tuck in program. Sure. Yes, I mean, from my perspective, it's just again continuing to execute on the strategy that We've deployed, I mean, I think from our perspective, again, continuing to grow free cash flow at double digit rates, Continuing to execute on the M and A, I mean, over time, the value from my perspective will accrete And we'll continue to close the gap. We started very far behind at the beginning of the year and the gap sort of closed over the next little while. And I think As we continue executing on the strategy, we'll continue to get the respect and trust of the public investor base. All right. So let me ask a question. We've been a shareholder now for almost a year. I mean, as most of you know, we do an enormous amount of primary research on our companies and on the industries. And What our observation has been is that these larger companies, whether it's look, risk management roll ups are not new to society, right? You've got Wayne Huizenga, you've got good, you've got bad. And it feels like you guys have been doing it a little bit differently. Based on our research, you guys have been very focused on mining platforms and then doing tuck ins. And without getting into specifics on different markets, I mean, our You buy an ASW, you buy a WCA, you were in Michigan, you bought Rizzo. It's our understanding that You can buy these things at whenever anywhere at the 7.5 times EBITDA. But once you roll in the back office and you can basically integrate the assets, you can get them It's kind of low singles, but even more importantly, if they're on an existing route, you can drive utilization on your existing trucks, I. E. Sell their trucks, Run them on your trucks and then increase the purchasing parts on future trucks. And so when we do our kind of our back of the envelope math, Your return on invested capital is far better than your peer group as a function of kind of how you do integrations. Can you talk about Kind of what you see in WCA and ADSW and your ability to drive return on invested capital and margin, Look, numbers are numbers, but I think it's really helpful for me as an investor and perhaps other people that are new to the waste management industry To qualitatively understand the strengths of your business model for your peers. Yes. Again, it's a simple model, right? I mean, You go in, you buy a platform, you buy post collection operations like landfills, transportation recycling facilities. You go in with a base of business And then you go in and the tuck in strategy works really well around those assets because the incremental margin that you get from the volume that you're into those existing facilities and eliminate going in, I mean, you have the SG and A savings out of the gate and then you have the operational synergies around facility consolidations And routing opportunities and that's where you're going to see the bulk of this year do. And when you do that, you're going to eliminate a significant amount of cost. You're going to do acquisitions and you're going to And you're going to delever naturally at the same time because of the actual effective purchase price of those acquisitions. So I think it all holds together. I think You're right in saying that's what it is. And I think from a scalability perspective and where we are in terms of the overall CAGR number, We're probably in a unique position because we're smaller than the larger big three today. And I think from a CAGR perspective, our number is going to look A lot larger just because we're in the we are where they were sort of 7, 8, 10 years ago. So I think We're in a great spot. I mean, I think we've done M and A well. The integration team is exceptional here. They've done countless times. The business development team is here. We have a very well oiled machine, as most of you know. We did a lot in we've done a lot previous to 2020, did a lot in 2020, And the factory continues to run here. So I think we're positioned very well for 2021 2022 for sure. But I mean, look, without throwing your competitors under the bus, I mean, I know you're doing business with them and you're selling them massive. I mean, At least from our study of the industry historically, most people have not taken the approach to the industry that you have, I. E, they buy they've been bought bigger Since they run them independently, maybe they get purchasing synergies on trucks. But I mean, in terms of combining The level and scale of integration doesn't is somewhat unprecedented. I mean, you guys have a huge M and A team. Waste Connections has 2 guys. I mean, Look, I know you have to be careful what you say, though. Like, I think it's important to distinguish in an industry where it's capital intensive and trust in this and that you guys are doing it better And not just a little bit better, a lot better. I mean, can you comment on that? I don't know what the other competitors have in terms of their business development team. I know we do it well. Like I said earlier, we're not here to practice, we're here to win. So we will continue doing what we've done for the last 14 years. And like I said earlier, you guys We'll all be the benefactor of that. And this is again, this is not a sprint, sort of a marathon. So We'll continue executing the same way we have the last 14 years. Very good. Well, look, I look forward to seeing your Cost of capital payout to your peers. Obviously, you guys have proven that even without it, you've been able to create substantial shareholder value. So I appreciate all the hard work. Thanks Adam. Thanks Adam. Our next question comes from Taylor Brown from Raymond James. Please go ahead. Hey guys, good morning. Good morning, Todd. Hey, Todd. Hey, Luke, you may have mentioned this in the prepared remarks, But what is the expectation for closure post closure just out the door annually based on the landfill fleet today? $55,000,000 to $60,000,000 Okay. And since we're kind of on this, I don't know if you guys have this offhand, but again, based on the fleet today, how much annual And I don't know if you could split that between Canada and the U. S. Tyler, I'm going to have to I got I tried to purposely have my prepared remarks address all your questions, but you caught me off guard with that one. So I'm going to have to get back to you on that. Yes. No problem. No problem. And just my last I know this call has been long already, but at a very high level, How much of the revenue is tied to CPI? And I don't know if you can break that also into U. S. And Canada as well. Yes. So if you think about I mean CPI ultimately, but contractually, I mean, if you look at the residential revenue On that line of business, you have a $1,200,000,000 of revenue going into next year. Now you have about $300,000,000 in Canada, Which you'd think basically virtually all is some sort of CPI type escalator. Then you have the other 900 in the U. S. Now the other 900 in the U. S, You have about $300,000,000 of that $9,000,000 is subscription, right? So more like open market pricing. And therefore, you're left with that sort of $600 CAD, but in the U. S, that would be tied to a CPI type I know there's a lot of great work being done in the industry about moving to sort of sewer and water main and etcetera. And we Look forward to being sort of joining that train, but we are we have a de minimis amount of that today. So the vast majority of that 600 that's not subscription Would be CPI in the U. S. And you'd have a little bit of it in the MRFs and in the post collection where municipalities are using our landfills, but by and large, it's in that residential collection line. Yes. Okay. All right. Thank you for all the detail. Appreciate it. Thanks Tyler. Our next question comes from Kevin Chiang And he is from CIBC. Please go ahead. I'm sorry, the opportunity. Just wondering how that might change your cash tax profile over the next few years? Yes, Kevin, you were very difficult to hear, but I understand you're saying with all the guidance, what does that look like on the cash taxes line? That's the question. That's correct. Yes, that's correct. Yes. So if you look today, we continue to have meaningful sort of tax shield that's going to push out any meaningful Add taxes to sort of beyond 2024. Obviously, the extent to which we continue to invest in the business, both organically Inorganically, if there's any outsized investments, that can sort of augment and continue to push that out from a further sort of runway perspective. Let's say today in Canada, there's very clear path to going through 'twenty five and beyond with no meaningful cash taxes. The U. S. Absent some other M and A or other things, by the time you get to 2025, you'll eventually start sort of pivoting to a cash taxpayer. We continue to look at ways to be as effective and efficient as possible there. And obviously, incremental deployment of M and A dollars will help provide Additional buffer at that tax line. That's it from me. Thank you very much. Thanks, Kevin. Our next question comes from Tim James from TD Securities. Please go Thanks. Good morning. I was just wondering if you could talk about how you're seeing the resilience On the Canadian markets, and I'm thinking kind of liquid waste and so on infrastructure here in particular, just kind of a comparison between in terms of the resiliency to the restrictions, is there any difference there in how it's impacting the business? I mean, on the infrastructure side, the litter has really just been around mostly around delays. The backlog and the amount of work that Have to get done and continues to be announced is significant. And again, I think when you look at the U. S, again, it's very regional specific depending The regions where you're operating, we're in the Northeast in the U. S. So again, that was a little harder hit than some other markets in the Sun Belt where it's less impacted. Now It's all coming back and new projects are going and the facilities through the early part of the year are starting to see the volume come back. But I think in Canada, on the liquid waste side, particularly, I mean, listen, post the original shutdown, everything has basically stayed open. And Again, we don't have really any exposure to E and P. This is all really around sort of manufacturing, industrial type uses and all those have been deemed Essential and continues to stay open. So that business really largely tracked back to almost Hitting budget by the end of the year, which is an exceptional result. So, I think it's really just that. I think versus some of the other places in the U. S. Where we operate In the Midwest, it was more capital deferral. Again, so those projects will get done probably in the second half of twenty twenty one, but More of an impact, while people are going through their own capital mitigation procedures. Okay, thanks. And then just quickly in the morning, if you can just provide us with a bit of an update on the integration of your 2 big acquisitions from late last year. It sounds like The results that they generated in the Q4 were very good relative to your expectations. Just in terms of kind of the integration process, Anything kind of turning up that's better than expected or more challenging than expected? Yes. Tim, it's Luke here. I'd say quickly just the last minute or so before we have to end. I mean the ADSWM business, I think all things considered from both sides and I think WM made similar comments, was about as good as one could have expected. I mean, although the delays with The process there were painful. It did afford everyone a lot of time for planning and preparation. And I think that was about as seamless as one could hope. Yes, there's hiccups here and there. By and large, day 1, that was an asset deal moved over to our systems and platforms. And by December 31, I switched everything over. I think we rely on WM for some Internet services in some locations. Other than that, basically completely integrated on the back end, And now we're executing on operational overlap where we can drive sort of incremental cost savings in those markets that there was overlap. So I'd say that business and integration thereof went phenomenally successful, and we're very, very happy with how that came together. WCA was a bit more of a staggered approach. Again, there was really a back office consolidation there, minimal geographic overlap. So the integration was very much a sort of Corporate and back office 1, the first wave of that happened at the time of closing is really focused on the sort of C suite, which was And happened as per plan. And then it will be mid Q2 where we do the full conversion of the Corporate office into our existing shared services centers. So the planning for that, how they've been reporting in the meantime, I'd say all is very much on track. The synergy realization, approximately $15,000,000 that we've underwritten, also on track. And again, all these things have hiccups, but one of the experiences you get through all the practice we've had is figuring out how to sort of manage through those, which I think the team has done exceptionally well. And answer session. I would like to turn the conference back over to Patrick Davidge for closing remarks. Thank you very much, everyone, and look This Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.