Earnings Call: Q3 2020

Nov 5, 2020

Good morning, and welcome to the GSL Environment of Q3 Earnings Call. All participants will be in a listen only mode. After today's presentation, there Please note this event is being recorded. I would now like to turn the conference over to Mr. Patrick Davidge, CEO and Founder of GXL. Please go ahead, sir. Thank you, and good morning. I would like to welcome everyone to today's call, and thank you for joining us. This morning, we will be reviewing results for the Q3. We will also provide an update on lease and M and A activities and our outlook of what we expect to finish the year. I'm joined this morning by Luke Polosi, our CFO, who will take us through our forward looking disclaimer before we get into the details. Thank you, Patrick, and good morning, everyone, and thank you for joining. Please note that we have filed our earnings press release, which includes important information. The press release is available on our website. Also, we've prepared a presentation to accompany this call that is also available on our website. During this call, we'll 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 performance 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 GAAP measures. A reconciliation of these non GAAP 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. We are extremely pleased with the results we are sharing today, which we believe continue to demonstrate the resilient growth profile of our business. For the Q2 in a row, we delivered the highest revenue, adjusted EBITDA and adjusted EBITDA margin in GFL's history and nearly $180,000,000 in free cash flow, all despite the significant headwinds from COVID-nineteen across our footprint. Revenue increased over 15% compared to the prior year period, driven by continued sequential volume improvement and 4.2% growth from price, surcharge and commodity price increases in our solid waste business as well as the rollover impact of synergies realized from M and A completed in prior periods. Overall, solid waste organic revenue growth was 6.80 basis points greater in Q3 than in the Q2. Our sequential improvement in solid waste volumes tied to the easing of COVID-nineteen related restrictions drove 2.5% positive organic growth in our solid waste business. The impact of COVID-nineteen continued to vary by service line and region with our solid waste business continuing to show strong resilience. Negative volumes continue to be primarily attributed to our commercial and industrial collection and post collection business with residential collection and recycling volumes positive for the quarter. From a market perspective, our primary solid waste markets where we saw the greatest volume declines in Q2 were the markets that were had the greatest sequential improvements in Q3. For example, our Eastern Canada solid waste business that includes our Toronto and Montreal markets saw over 1,000 basis points of volume improvement sequentially over Q2. Volumes in our secondary markets also improved, although the sequential increases in these markets were more muted as the initial declines were less than what we saw in the primary markets. In our infrastructure, impact mitigation measures. Impact demand for our services, we also saw the impact of COVID related regulatory permitting delays impacting the start of new projects or project phases. Once again, the extent of the impact vary by region. Infrastructure and soil revenues in the U. S. Business, which is concentrated in the highly COVID impacted Northeast and California markets, saw greater volume impact than our Canadian business. Liquid waste revenues were a similar story with the volume recovery slower in our Midwest U. S. Market where COVID related disruptions had an outsized impact on our customers' demand for our services. Liquid waste revenues in Canada saw 1300 basis points of volume improvement sequentially over Q2, with volumes in Eastern Canada almost flat compared to the prior year. Across both the infrastructure and liquid businesses, we expect the volume decrease to simply be a timing shift and will return as our customers reset their budgets in 2021 and reengage on their capital and maintenance projects. We have a line of sight into a healthy backlog of work in these segments and anticipate volumes will continue to recover in conjunction with the market specific reopening activity. Looking at how the revenue impacts translated to the bottom line, the overall increase in revenue coupled with our ongoing focus on cost control and efficiencies resulted in 2 40 basis points of margin expansion in our solid waste business and 200 basis points for the company as a whole, resulting in the highest adjusted EBITDA margin in the company's history, as I mentioned earlier. Drivers of the margin expansion are the same themes we covered last quarter. Overarching are the impacts of our pricing, procurement and synergy realization initiatives we've discussed previously. We are also seeing the benefits of our continued COVID related focus on improved asset utilization and productivity coupled with cost control of discretionary SG and A costs. Finally, the macro factors of higher commodity and lower diesel fuel prices provided a net margin benefit as compared to the prior year. In terms of FX, with over half of our results being generated in U. S. Dollars, the transitional impact from fluctuating FX rates impacts our results, which are reported in Canadian dollars. The USDA cash change rate resulted in 0.5 revenue increase over the prior year, although the average exchange rate for the quarter was 300 basis points less than in the 2nd quarter. The offset to the lower revenue and profits reported during a period of weakening USD is that our USD denominated debt is also revalued at the lower FX rate, reducing our debt balance and leverage ratios. The expanded EBITDA margin, coupled with continued focus on working capital management and disciplined capital allocation, contributed to nearly $180,000,000 of free cash flow generated during the quarter. Our results in excess of our expectations and a new record for the company. Looking at working capital specifically, our previously discussed initiatives around order to cash cycle time continue to show improvements and you can clearly see the results in the year over year collection experience. The DSO improvements are something I know our whole team is very proud of and an area that we continue to believe there's incremental upside. Not to downplay the record financial performance, but the most impressive aspect of the quarter, and this is an exact repeat of what I said in our prior calls, is this continued dedication and capabilities of our employees to respond to the ever changing operating environment. Through the incremental risk management steps and protocols that we have implemented as outlined on our prior calls, we continue to prioritize the health and safety of our workforce. Safety related staff, absenteeism continue to be at some of our best levels ever, and I couldn't be more proud of how the team has come together in the face of these unprecedented challenges. In addition to the strong performance of our base business during the quarter, as you all know, we were all busy on the M and A front as well. We closed the WCA acquisition on October 1 and the acquisition of the Waste Management ADF divestitures last week. We have spoken about both of these deals several times. So I'll state the majority of the discussion on this topic for the Q and A session, but what I will say is the following. We remain very excited about these opportunities that these businesses and opportunities will bring to GFL. We have a well defined integration plan for both of these businesses that are already well underway. We are extremely confident that these assets will provide incremental platforms for us to continue to pursue our organic and acquisition growth strategies. During the quarter, we also closed 3 small tuck in transactions and asset closing. So now that that acquisition is closed, you will see us pursuing these opportunities. Before turning the call over to Luke to walk through the financial information in more detail, I wanted to walk everyone through Page 4 of the presentation, which we thought will be a helpful summary of the messages we have consistently delivered. On the left hand side of the page, we've listed the 5 key things that we communicated during the IPO and that we have consistently echoed since then. We have delevered the balance sheet from high 6s to low 4s. We've taken margins from 24.7% in 2019 to nearly 26% in year to date 2020. We completed the 2 larger shuttleweight transactions that we alluded to at the time of the IPO and continue to execute in our tuck in program. We adhere to our leverage commitments by bringing in new equity at attractive terms. And we've used our improved credit profile to reduce our cost of borrowings as demonstrated by our 3.75% August bond offering and the pending repricing of our revolver, bringing our average borrowing costs from mid-5s to high-4s with a clear path to low to mid-4s in the near term. On the right hand side of the page, we have listed the focus areas for us going forward. There are no larger acquisitions on Horizon, so now we will pivot to focus on integration while continuing our tuck in program. We remain extremely confident in our ability to leverage our platform and our strategic initiatives to continue to drive margin expansion. The free cash flow profile of the business going into 2021 will now accelerate the deleveraging of our balance sheet, and we will continue using our improved credit profile to reduce our cost of borrowings. I will now hand the call over to Luke who will walk through the financial results for the quarter in more detail. Thanks, Patrick. Turning to Page 5 of presentation, we have provided a summary of revenue growth by operating segment. Now I'm not going to repeat the words on the page, but I will add the following color. First, I think it's worth reiterating the fact that we had 2.5% positive organic revenue growth on our solid waste business in the quarter. In fact, if you look at the bottom table, you can see we had positive organic revenue growth in the year to date period, which we think is a pretty incredible outcome considering the backdrop. For the quarter, the 3.5% net price was slightly ahead of our expectations and was achieved despite the impact of volume decreases in the ICI service line, which are typically a big contributor to price. Our overall pricing excludes the impact of pricing initiatives of our 2020 M and A and continues to be impacted by negative CPI adjustments on certain municipal contracts. So altogether, we are very happy with the outcome on the pricing front and remain confident in our ability to deliver on our stated pricing goals for the year. In addition to the growth in core pricing, we realized an incremental 70 basis points commodity prices, where we realized a blended basket price nearly 30% higher than that of the prior year. Our blended basket was price in Q3 was down 30% from Q2, but remains above that realized in the prior year. On solid waste volumes, collection volumes were down 3.6%, which was comprised of a 7.5% decrease in IC and I, offset by nearly 2% positive volume in residential. Compares to a total collection volume decrease of 8.4% in Q2, so a meaningful improvement quarter over quarter. Post collection volumes were up 8.5%, largely on the strength of MRF processing volumes coming out of the successful leveraging of the 2019 Canada Fibers acquisition to establish our business as the leader in recycling processing in our volumes, post collection volumes were negative 6.9% for the quarter, a 7 90 basis point improvement from Q2. On infrastructure, soil remediation and liquid waste, I'm going to reiterate what Patrick highlighted. Due to a combination of regulatory and permit delays driven by the COVID related shutdowns and customers intentionally deferring certain activities as of their own COVID related mitigation strategies, we saw a delay in new projects starting and as a result, a more tempered recovery in volumes than what we've seen in our solid waste business. Again, the impacts were highly regionalized with soil volumes in the Northeast and liquid volumes in the Midwest U. S. Lagging the recoveries we've seen in our Canadian markets. What played out during the quarter and continues to play out in business lines is a more tempered recovery than we had anticipated based on the trend line we were seeing in late Q2, early Q3. Our guided assumed infrastructure would be negative low single digits and that liquid waste would be organically negative high single digits. As Patrick said, we expect the most part that this is a timing issue and we expect the volume return as we roll into 2021. Turning to Page 6, we summarize margins by segment. Solid waste adjusted EBITDA margin was 30.6% for the quarter, which was a 2 40 basis point increase over the same period in the prior year. Patrick provided the overall drivers of the expansion, but in terms of the specifics of the margin walk, the key components include 72 basis point benefit from lower diesel costs, 53 basis point benefits from higher commodity pricing. Offsetting these macro tailwinds was an approximately 10 basis point drive from incremental COVID related costs. Acquisitions were basically margin neutral, primarily attributable to Canadian tuck in acquisitions that have yet to achieve their anticipated margin profile, offset by margin accretive contributions from 2020 acquisitions in the U. S. Excluding these items, the base solid waste business drove 100 and basis points of organic margin expansion over the prior year despite the decremental impact of COVID volume declines. Consistent with what we said in the prior quarter, soil and infrastructure margins are being impacted by the change in business mix, reflecting reduced volumes from low volume high frequency customers. Recall that due to the relatively fixed cost structure of our solar mediation facilities, there's a higher decremental margin impact from reduced volumes. The relatively muted impact to margins year over year despite the $27,000,000 revenue decrease is attributable to the cost control strategies that we've implemented and are indicative of the underlying margin improvement we've been focusing on in this line of business. We expect that as volumes recover, we'll see significant margin expansion consistent with what we have previewed as the opportunity within this segment. Our liquid waste business continues to be the segment most impacted by COVID related disruptions. In response to the volume decreases, we flex over $7,000,000 of operating costs out of the base business on a like for like basis, mostly around direct labor and vehicle costs. This cost flex in conjunction with continued synergy realization and a nearly 13% increase in net new most selling prices drove the organic margin expansion as compared to the prior year. Similar to my commentary on the fixed cost nature of the soil segment, when you think about the $17,000,000 revenue decrease from lower liquid volumes on a year over year basis, the realized margin expansion highlights the underlying operating leverage we're realizing in this segment. Turning to Page 7, reported cash flows from operating activities were $257,000,000 in the quarter, a $125,000,000 sequential increase over the 2nd quarter, driven by lower interest costs and higher working capital as we have forecast. The 2 14% increase in cash flows as compared to the prior year is a combination of the increased scale of the business and capital structure as well as improvements in working capital management and ongoing payroll tax deferrals and tax refunds we realized in the current period under CARES program. As a reminder on working capital, we've historically seen a significant investment in the first half of the year and then a recovery in the back half driven by the seasonality of the business. The continued southern expansion of our U. S. Footprint and our active focus on optimizing our working capital processes is flattening this historical seasonal curve and providing an overall recovery of some of the historical investment in working capital. As Patrick mentioned, our efforts around our order to cash cycle time are improving DSO, which is also benefiting working capital. We continue to actively monitor our credit exposures in light of the uncertain landscape, but the quarter did not see any significant incremental credit losses outside of the normal course. Collections remain very strong. Now notwithstanding the strength in AR in collections, we've continued to actively manage our cash balances and pushing up AP balances at month end. In terms of investing activities, we closed 3 tuck in acquisitions late in the quarter representing approximately $20,000,000 in annualized revenues. The longer than expected delays with the Waste Management ADS divestiture pack assets push back the timing of some of the opportunities we've been working on, but the pipeline is full and we're very actively pursuing several opportunities. On capital expenditures, we spent $86,000,000 for the quarter, which included approximately $8,000,000 in what I call remedial capital related to recent acquisitions, which was incremental to our original guide. Cash flows from financing activities are primarily comprised of the new US750 $1,000,000 3.5 percent 5 year notes we issued in August. Free cash flow for the quarter, calculated cash flow from operations less net capital expenditures was $177,100,000 which includes acquisition related costs and the soil, liquid and FX revenue impacts previously discussed. To summarize our cash flows in comparison to our previously provided guidance, recall we said the cash flow from operations for the back half of the year would be approximately $475,000,000 Q3 was $257,000,000 or approximately $275,000,000 excluding transaction acquisition costs incurred in the quarter that were not part of our original guidance. Before considering the impact of WCA and Waste Management EDS, which I'll touch on separately in a moment, I wanted to highlight that we remain confident in our ability to deliver on our targeted cash flow from operations for the year despite the revenue headwinds we saw in the quarter from soil and liquid volumes and FX, which based on the current environment may persist for the balance of the year. Additional shutdowns and reimposed restrictions like what we've recently seen in Quebec and Ontario may add to that headwind and those are obviously something that we're watching closely. On CapEx, the guide for the back half of the year was $160,000,000 We spent a net $80,000,000 in Q3 or just over $70,000,000 when excluding remedial CapEx that was effectively acquisition cost on recent deals, which leaves close to $90,000,000 for Q4 in order to hit our target. Based on the success we've been having in our recycling operations, in our recycling operations, again leveraging the expertise and assets we acquired through the K and F Fibers acquisition, we are evaluating net new opportunities to deploy an incremental $5,000,000 to $10,000,000 into our recycling operations during Q4. The timing of when the spend will occur is still up in the air. But excluding this incremental growth capital, we are on track to meet our CapEx target. Before turning the page, I will touch on the WCA and Waste Management ABS acquisitions, but I will be brief as it is early days on both of these transactions. As we've told you before, these assets have been performing very well this year and had great 3rd quarters. So we're very excited about the go forward opportunity. Our robust integration plans are well underway and we remain confident in our ability to deliver the underwritten synergies within the timeframes we've previously discussed. WCA will contribute a full quarter of revenue to our Q4 results and the Waste Management ADS assets will contribute 2 months of revenue. When thinking about the extent of their contribution, if you take the estimated annual revenues we previously disclosed pro rate and then seasonally adjust, I think that provides a good proxy. Keep in mind, there's a significant seasonality profile of the Waste Management ADS asset package, driven by the concentration of revenues in the Midwest and the absence of the more seasonally stable residential and permanent roll off revenues. Our current view is that the combined businesses will deliver $135,000,000 to $145,000,000 of revenue during the Q4. The inclusion of this incremental revenue in our 4th quarter results and the fact that we're able to close WCA 1 month earlier than previously expected will more than offset the headwinds from soil Liquids and FX and allow us to exceed our previous revenue guidance for the year. In terms of the cash flow statement impacts from these two deals, I'll provide the following color. The Waste Management ADS assets did not come with working capital, meaning that no AR came over with the transaction. So there will be a cash outlay cash outlay there over the 1st few months as we invest in a normal accounts receivable balance. This was a consideration that was factored into the purchase price. WCA came with normal working capital, so there may be some investment there, but there shouldn't be a material swing. Integration CapEx is expected to be about $3,000,000 to $5,000,000 primarily on IT spend. WCA CapEx is expected to be in the $18,000,000 to $20,000,000 range, which is inclusive $6,000,000 to $8,000,000 of growth CapEx that was committed to prior to closing and contemplated in the WCA purchase price. The CapEx needs for the Waste Management ADS assets are still being evaluated. There's no incremental cash interest to what is already included in the guide as a result of these transactions. And in addition to normal course integration costs, advisory related transaction costs for these 2 deals will be approximately $12,000,000 to $15,000,000 in Q4. We are deep into the process of forecasting our 2021 plan and we'll provide more specific updates when we report our Q4 results. What I will say now is, although there have and will be some puts and takes, namely around FX and the specialty waste volumes and the timing of the deal closings, we remain confident in our 2021 revenue and EBITDA jump off point that we provided as part of our guidance in August, subject to FX related fluctuations. Quickly turning to Page 8, we presented a summary of net leverage at the end of the quarter. We presented this page several times now, so I won't go over it again in detail, but I will highlight that we ended the quarter with net leverage in the low 4s and pro form a for the 2 acquisitions, we expect to end the year with leverage at the high end of mid 4s, all of which is consistent with our previous messaging. With the amendment to our revolver, free cash flow profile and refinancing opportunities, we have ample liquidity and opportunity to pursue our growth goals, further reduce our cost of borrowing and delever our balance sheet. With that, operator, we're ready to open the line for questions. Thank Your first question comes from Hamzah Mazari from Jefferies. Please go ahead. Hey, good morning, Patrick and Luke. My first question is, as you know, there was a short report thesis on the company. We didn't really hear GFL publicly sort of talk about their thoughts as to that validity of that thesis. So wanted to just give you this forum to kind of outline your views for investors on what you thought of that report that made very accounting, overpaying for assets and etcetera, etcetera? Okay. Well, I wasn't expecting this question. But yes, I mean, I think from my perspective, listen, my mother always told me, if you have nothing good to say, don't say anything. So I won't reference the short seller by name. I mean, the reality is, from our perspective, let the numbers talk and just deliver on the plan and deliver on the plan that we articulated to all the investors as part of the IPO. In life, there's always going to be haters and you know what, these guys take whatever position they take, but it's hard for me. You as an analyst spend a lot of time at the company trying to understand the company. What I will tell you is I've never spoken to the short seller, never heard from the short seller, whether it was before the report or even after the report. So other than seeing a bunch of tweets and a bunch of noise, I don't really have much interaction with them. The fact is we've delivered the highest margin, the highest EBITDA, the highest free cash flow in our history. I think we're one of the only, I think, peers in the comps that actually posted organic growth in our solid waste business. As we articulated, our margins are going to keep going higher. We delivered $177,000,000 $177,000,000 of free cash flow in the quarter. Our volume and pricing was extremely strong. And over 14 years, we've done nothing but make investors money. I mean, if you go back over the last 14 years, you had Genuity in health Care of a pension plan that made almost 7x their money. You had Roar Capital that made 3x their money. You had HPS that made almost 3.5x their money, and you had Macquarie make 2x their money. And you have a new shareholder group that has done extremely well as those guys. And I think if you look at what the path is and the trajectory of where we're going, we are on a path to do exactly what we said we were going to do. I think if you look at it today, I mean, let's put aside the character assassination for a second just because of Italian doesn't make me a lobster, but that's distasteful. I mean, whatever, it's hurtful, and it is what it is, but I'll park that aside. I mean, at the end of the day, he tried to blow up our financing, he failed. He tried to blow up our acquisitions, he failed. He tried to scare institutional investors away, he failed. He tried to match with our audit opinions and comfort letters with our auditor Deloitte, he failed. I mean, he told us we can't integrate businesses and we overpay for assets. I think that you're clearly seeing we've had 12 basically quarters in a row where we've delivered margin expansion. So if the model wasn't working, the business will be going backwards. It wouldn't be going forward. So again, I don't think about it. And in terms of overpaying, I mean, keep in mind, we've been under private equity partnership for 14 years. Private equity investors' expectations of return on equity and our return on invested capital are a lot higher truthfully than what the public markets do. And those investors create a significant discipline on us as a management team. And that goes from these moves to them. You have VC partners on Payroll Future's pension plan and GIC or insiders in this company who have to approve these substantial acquisitions. And believe me, if we weren't delivering on our returns on equity, our returns on our burns to invested capital, these acquisitions would not be approved. So that's what I would say on that. I think if you look at where we are, we told you, as Luke just said, we would deliver on the free cash flow profile of the business on the back half of the year. All of that is playing out exactly how we said it would. If you look at sort of 2021, which was the launch off point for 2021, for all intents and purposes today, not giving forward guidance, you have $500,000,000 plus of free cash flow for 2021. If you look at that today, what we're seeing today, we're trading at a 6 point percent to 7% free cash flow yield. The peer set is trading at 2.75% to a 4% free cash flow yield. That is $37, $38, $40 stock even at the lower number. And we're only in the 2nd innings here of a long baseball game. I mean, we're just getting started. We talk about different things from delevering, right? We delever. Now lower levels are lower than our average cost of capital, which is a big focus of ours going in. So again, I think all of the things we said, we're doing, we will continue to do. And at the end of the day, the overarching theme of this is if we have a shareholder group, The shareholder group, if they didn't have the confidence in management to deliver the plan, would have never allowed this company to go public. Nobody with sellers, they were a year and a half or 2 years into their investment where they normally hold things for 5 to 7 years. We know what we can do. We know that we will deliver and execute the plan over time. And we know we, along with all your I with the plan we have and how we are going to execute over time. So I don't know if that covers your question. I ran it long. Yes. No, that's very clear. I think the other question would be just now that these deals have closed, just frame for us execution risk, integration risk, integration plan. I know WCA Waste was owned by Macquarie, so was Waste Industries. So clearly, there's some institutional knowledge there. ADSW probably has some nice synergy with your waste industries platform. But just walk us through how you're thinking about how people should get comfortable around execution risk and integration and timeframe to integrate these assets? Sure. So on WCA, WCA was clearly way more straightforward. Synergies came from again the bulk of the corporate office, insurance, sort of health and benefits were the big synergies that we were going to get out of that asset. All the operational synergies were stuff we didn't even model that we know exist and we can talk about the different regions that are going to tuck into our existing business. So that has gone we anticipated and communicated to the market that we would close-up by November 1. I think with the DOJ and given the WM ADS process, we were able to persuade the DOJ that this made sense to make us an even stronger competitor in the U. S. Than we already were. And we were able to get clearance earlier and close that earlier. So 1 month ahead of schedule in terms of owning the asset. We have a full plan from our operating system, infrastructure, financial systems, customer experience, shared services, which are billing AR, cash AP, Workday, which is our HR platform with our GFL benefit and our maintenance platform to have that fully integrated by Q2 of 2021. I can tell you it's been an exceptional experience so far. Again, just the institutional knowledge that we've had with that company over the years and the replication of our systems and their systems along with WI systems over time has just made it a very straightforward process. In terms of the re chipping of the regions, I mean, at the end of the day, yes, there was some overlap with our existing business, particularly in Alabama and now with the WM asset in Florida and some overlap in Colorado. But largely for the most part, that act is a standalone. Like I said, the corporate synergy that we'll get out of that and we anticipate it will come out over the next sort of 6 to 12 months. So no issues with WCA. On the Waste Management ADS divestitures, which again, a little bit more complicated, you have an integration team here at planning and the ABS over the last 16 months have paid off in spades. If you look at where we are from integration standpoint today, we have all of our operating systems, financial systems, customer experience, shared services, billing AR, cash app and AP. And on our platform today, that was all done within sort of 24 hours of closing. And again, I credit our IT department and the great employees that came over with both WCA and ABS and Waste Management that helped us get through that very smoothly. We did a lot of dry runs, and that team, truthfully, without a lot of pain, was able to get us off and operating and basically sort of shut the taps off from any transition services agreement that we would have needed with Waste Management. Now we are still relying on them for some infrastructure related, IT related issues, but I think at the end of the day, the most important system, the operating system, financial systems and basically the shared services, 1,000,000,000 AR to CashAP are now on our system. So we feel extremely great and confident about where we are. And the integration process with the businesses in the markets where we have overlap is well underway. So the part that I guess could have been feared the most was the actual transition on the day of closing has gone exceptionally well. And again, it's by all the great work that everyone's done on our side as well as the Waste Management ADF team. And one thing I'll say is all of this is done in house. We are not using any 3rd party consultants to do this work for us. This is all done by people that are sitting in the company today and have executed on this very well. So we're in great shape from that perspective. Okay. Very helpful. Last question, I'll turn it over. Is the free cash flow number for next year, you guys guiding to $500,000,000 plus or what's the building blocks for free cash flow for next year? Hamzah, this is Luke. I think we're going to come out in Q4 with our guide for 2021. I think Patrick was just sort of speaking at a higher level and we can talk about the launch off point of where we see the end of this year ending, but we're not providing that guide at this time. I think Patrick just in his response to that first question was just sort of speaking more holistically and directionally. Got it. Okay, great. Thank you, guys. Your next question comes from Michael Poughlin at Stifel. Patrick, Luke, thanks for taking the questions. Could we dig into the solid waste operations and pull apart the difference in your experience between the U. S. And Canada on your organic growth? Canada had a better organic versus U. S. Can we talk about what's in your mix, your price, your volumes and why that is? And then we'll move on from there. Yes. So Michael, it's Lucie. What I would say, I think a key driver of the differentiation in Canada versus U. S. In this quarter was really on the strength of the Merck processing volumes that we referred to in the prepared remarks. I mean, if you think you go back to the Canada Fibers business, we saw as the recycling market was pivoting, we saw a good entrance point to enter the Canadian market with that acquisition late in 2019 and have been to the outsized growth in Canada in the quarter. If you look at the to the outsized growth in Canada in the quarter. If you look at the regular way IC and I volumes, whether it's collection, post collection, I think pretty similar across the geographies with the exception of the primary, non primary splits that we've said. And what I mean by that, in Canada, our primary markets still typically see greater impact than our more secondary. And that was the experience in the U. S. As well, albeit more of our U. S. Is sort of non primary. From a pricing perspective, I mean the U. S. Continues to be slightly stronger in the price. I think what you have there, one just again the primary, secondary split but also the residential business slightly different in the U. S. With a higher concentration of subscription, which will take the price versus in Canada, you don't have any subscription. And in fact, we're actually burdened with some negative CPI in Canada this quarter. So I think at the IC and I pricing comparable in the U. S. And Canada, but that residential pricing profile is different between the 2 geographies. And I'd characterize the differences between the regions. Okay. And then, I was trying to keep up with the pace of the data you're giving us, Luke. Can you just summarize for us the deal contribution in 4Q 'twenty is sales of $135,000,000 to $145,000,000 that's in Canadian dollars and then flat the EBITDA and the free cash flow? So the U. S. Dollar revenue from kind of the 2 deals, that's the expectation there. Again, slightly off the sort of straight prorated math, but that's for the seasonality that I spoke to. I mean, Michael, EBITDA margin was still early days coming with that. If you look at the blend of what we said for the annualized EBITDA margin for those, I think out in the gate with the seasonally low 2 months as well as just the integration, something a little bit less than what those blended averages we had said. But we're still sort of early days on the ABS WMPs. What I'd say on the cash flow is there's a couple of nuances I spoke about on the script and it's really some sort of catch up type CapEx, catch up is the wrong word, but some known CapEx spend and then this working capital component that are going to appear as cash flow items in our Q4 statements in the cash flow from operations, but are really purchase price sort of considerations. Mean if you look at the WCA business paying 12.12, I mean it really should have been more like 12.25 when you consider some of these puts and takes on capital and working cap. And then similarly, the purchase price of WMADS, part of that negotiation contemplated that there was no working capital and you have to invest $10,000,000 $15,000,000 into it. So those two items are going to appear as negative sort of cash flow from operations before. I would characterize them more sort of purchase price type items. So ex that with the EBITDA margin sort of direction I'm just providing, I think you see those as sort of cash flow neutral in the quarter, obviously excluding the deal related advisory costs. Okay. Originally, we were sort of mid to low or high 20s, those blended margins between the two businesses. You're suggesting with seasonality, we're probably low 20s to mid 20s? I mean, I think mid is probably the right way to be. I mean, I think that some of the synergies we'll be able to realize sooner than anticipated, which is going to help. But again, if you think about the Wisconsin type business, I mean, with the seasonal profile of their Q4 is a significantly lower margin than Q3 and Q3. Yes. You remember seeing that in ADSW when they reported. What's the rollover of all your M and A for on into 2021 sales so we get that number right? We will end the year about I mean again it's sort of FX sensitive, I mean just a backup in general on FX. I mean we're going to now have sort of call it $700,000,000 of EBITDA that's U. S. Dollar denominated at the revenue side. Think about that sort of $2,500,000,000 $2,600,000,000 of revenue. And I mean, so every penny there of FX has a significant impact. So if I look right now at well, the FX I had a few days ago, I have about $900,000,000 rolling in to 2021 as the rollover. That's really the WCA and WM dollars comprising sort of $800,000,000 plus of that and then the other small deal is the balance. If you think about the cadence of that rollover, you're going to see roughly a third and a third in Q2 in Q1 and Q2, a little bit higher in Q3 as the seasonality ramps up, so sort of mid-30s in Q3 and then a slight tail in Q4. But again, the rollover and the launch off point, there is just this FX consideration. If I look, I mean, when we provided the guide originally, our base business was at sort of 1.35 and the new deals I think we had in that guide at 1.34. I mean if I look this morning, we're now touching 1.30. I mean that sort of 5.10s there on our call it 700,000,000 dollars of EBITDA, that's a $35,000,000 swing there. So that's the one thing that will impact the launch off. We're going to work on some constant currency presentation to try and normalize that for folks going forward. But that's just the one caveat I'd provide. Okay, fair enough. But just so I'm clear, dollars 900,000,000 is it's the Canadian number. You've reflected the conversion? Correct. Dollars 900,000,000 rolling over in the cadence that I described. Got it. All right. And then Canada has taken aggressive shutdown again. So how do we think about how is that factored into your how you're leading us to the end of the your confidence in the free cash flow in the second half of CAD275,000,000 to CAD300,000,000 or the launching off into a CAD500,000,000 number as a baseline for 2021? Yes. I think I'm looking at Patrick, but the Canadian dynamic is very challenging to model and forecast because it seems to sort of flip every different day with different sort of guidance. Yes. Today, it's pin the tail on a donkey, right? It's just, oh, one day, we're open, one day, restaurants are open, one day, they're closed, one day, gyms are open, one day they're closed. I mean, at the end of the day, I mean, if you look today in Canada, you have Toronto and Montreal that have gone back into shutdowns and you have Winnipeg that has gone into shutdown. Now it's not anywhere near the extent of the shutdown that we saw in the spring of 2020. But yes, there's going to be impacts. But listen, at the end of the day, those impacts, I think, will be relatively muted in comparison to what they were in Q2. And we have the ability to outperform in other parts of the business that we think make up for that. But yes, it will be a small headwind, but from a free cash flow perspective, etcetera, I think we feel very confident of the numbers that we've laid out. Yes, Mike, I'd say, to Patrick's point, look, there's obviously a revenue, I mean, the FX impact and then you have this sort of incremental shortage shutdown. So now Look, there's going to be continued strength in our solid waste business like we saw in Q3 from the diversified offerings across recycling, etcetera. Soil and liquid are going to continue. I think we've assumed at the current levels. So if you think about our guide at the revenue line for the year, it was sort of 40, 60 in the middle, 40, 45 on the low end. I mean, I think FX alone sort of brings you to the low end and then the soil and liquid continues to sort of be a drag there. Now offsetting, we got WCA done a month earlier than anticipated. That provides some sort of offset and then again some of the strength in the other sort of solid waste services. So I think there could be puts or takes of the revenue and line driven by those changes. But as Patrick said, I think with some improved cash management and working capital performance, we can hold the line on the free cash flow line. Your next question comes from Kevin Chiang at CIBP. Maybe just 2 for me. First, just on the Canadian pricing, you saw some headwinds with CPI and in your disclosure, you talked about some temporary suspensions there. Just wondering how pricing looking like here. Are you starting to implement some of those delayed pricing? Should we see some positive momentum on the Canadian pricing front as we exit this year and looking into early 2021? Yes, But what I'd say on pricing is when we say the delay, I still want to bring that back to the context of this sort of latent pricing opportunity that we spoke about being in our existing book of business, so the sort of catch up pricing that we said was going to provide a tailwind for the 1st sort of 12 to 18 months out the gate. That's really what's paused. Our otherwise sort of normal course pricing has continued. And I think that's why you're seeing our pricing roughly in line with our original guide, which came out the year very strong, but even Q2 had sort of high 3s, Q3 mid 3s and Q4 is going to be low 3s because that's going to end our year right in the sort of middle of that range where we said we intend to play. That's sort of 3 point 5% to 4% range. I think the Canadian dynamic, that opportunity still remains. We're not going to if we normally are doing our big sort of PIs in the beginning of the year, we haven't decided to now do those in Q4 instead. So you're not going to sort of see that catch up this year. But I think if the world continues on the path to more normalcy, we'll revisit the sort of harvesting of that opportunity in 2021 in sort of normal cadence of our regular pricing regimes by market. Okay, got you. That's super helpful. And maybe just a second one for me. I'm just trying to wrap my head around, what's the what's the run rate EBITDA margin for liquid waste, so a big margin quarter north of 20%. As you pointed out, organic growth has been challenging here, but a lot of that is revenue, I think, is pushed out in timing. So as that volume moves back, like how do we think about incremental margin given your launch points here off of Q3? Yes. So what I'd say Kevin goes back to what we said on the road even before COVID, I think still sort of holds true and there's been some sort of swings in the sort of COVID environment. But Q2 obviously that with the Now Q2 obviously that with the rapid volumes sort of loss we were behind that. You see in Q3 now picking some of that back up. I mean Q4 will be more muted. But I continue to believe that that holds true. We said there was sort of 200 basis points to 300 basis point expansion opportunity in both the liquid and soil businesses. We still think that that's the case. So that ends the year in the sort of mid-20s. I think our original plan pre COVID would have been we would have been moving that the ball down the field and then sort of more 26, 27 run rate. But I think we end the year ideally in the sort of mid-20s with still believing the opportunity as the volume returns to add the sort of 200 plus incremental basis points to that over the next sort of call it 2 to 3 years. Okay. That's helpful. That's it for me. Thank you very much. Thanks, Kevin. Thank you. Your next question comes from Tyler Brown at Raymond James. Please go ahead. Hey, good morning guys. Good morning, Tyler. Hey, so I really appreciate the operations map. I know it seems simple, but I think it's really helpful to see the big picture. So as I look at that map though, I'm kind of curious about a couple of things. So number 1, I mean, I know it's early and integration is the focus, but anecdotally, how is the morale of all of the folks that you brought over, particularly in those markets that you overlap? And then number 2, I think obviously if you look at it, there's a number of call it theaters of war here. And so should we simply think about tuck ins as kind of filling around those triangles? Yes. So on I mean, WCA, I mean, I think, again, there was a lot of nervousness for people just trying to understand what the plan was. I mean, because again, they knew a lot of those corporate functions weren't going to be needed in Houston, right? So I think people have settled down. I mean, from an operational perspective, listen, everyone's in their chairs, everybody's happy, everybody's relieved. The changes that have to get made at corporate has been well articulated. The individuals that are on that are staying for a period of time are on transition services agreements and have transition bonuses and state bonuses. So that's gone you never know it's going to go, but it's gone extremely well. On the WM and ADS front, I mean, it was like Forrest Gump sort of running the hole because that team was just so tired. That product has dragged out. I take my hat off to Richard, his entire team at ADS for being able to keep that grouped together for as long as he did because when that dragged over 70 months, it creates a lot of uneasiness with employees. So the employees that we kept and employees that Waste Management kept, everybody is so excited and relieved and just really looking forward to the future. So I would say the morale has probably never been better and everybody sort of energized and rejuvenated. I think when you look at the math, listen, some of its overlaps, some of its new beachheads, I think all in all, again, focus on the integration. But there's a very well defined tuck in program behind some of these beachheads that we acquired, particularly in the Midwest and parts of Florida and closing in the gap in parts of the Midwest, I think we have a very sort of well defined and articulated plan to continue this sort of tuck in program. Nothing of any sort of substantial size or scale, just all stuff that works well within the profile that we discussed earlier, which again is using free cash flow and borrowing, but at the same time delevering. And I think we've articulated that plan numerous times over the last year, and I still think that it will continue to prove it out. So I mean, we still have a plan to acquire. I think everyone's sort of modeled acquiring sort of $50,000,000 to $75,000,000 of EBITDA a year in those markets. I mean, I still think it's conceivable that we could acquire sort of $75,000,000 to $100,000,000 a year of EBITDA. I'm tuck ins around our existing platform and the new beachheads. But with COVID, things have slowed down. Everything seems to be just taking a little bit longer. But I think when you look particularly at the next few years, we're very well positioned to execute on that moving forward. Okay. And then where were the 3 tuck ins you closed this quarter? I'm just curious. So there was 2 in Ontario and 1 in the U. S. Okay. Okay. And then, Luke, I got a couple of modeling questions. So pro form a, I guess, or just layering in all the landfills, where do you think your closure post closure cash out the door will be annually? Sorry, something particular with the ADS side that we're working through right now. So you're can have to give me until we come back and the more sort of formal guide. So we're sort of providing the guidance for that sort of fully baked. But I mean, when you look at where we're at today, we're basically sort of doubling the overall sort of landfill capacity across it. So I mean, that's a simplified proxy from spending 25 to 30. If I'm spending 25 ish today, it's going to 50. But the actual sort of number as you know, there's some cadence and some timing with how that sort of shakes out. So I'll give you an actual 2021 number as we get the ADF sort of engineering all done. Okay. That'd be great. And then I just want to make sure I'm clear. So a penny move in the Canadian dollar, that's about $7,000,000 in annual EBITDA. Is that right? Correct. Yes. I mean if you look at the launch off point that we're driving on, I mean before I said a $13.40 launch off point, right? Again, that was sort of those 134, 135. I mean, there's $700,000,000 of U. S. Dollar denominated EBITDA in there. So every penny is $7,000,000 So if I now end at 1.30 flat where it looks today versus the 1.34, 1.35 sort of $25,000,000 $30,000,000 difference from what I had said before. Now, as I said, work on some constant currency to sort of carve that noise out. And truthfully, there might become a time where we flip the currency and you'll see everything in USD and might make it easier for you guys. But that's the those are the facts where we sit today. But just to reiterate the launch out point. Yes, we had said $13.40 as I said now, I think there's some puts and takes with this, but absent FX that holds true. I mean, but again with the FX it's that's the sensitivity I just said. Yes. Okay, perfect. And then just last one. Just to be clear, these deals, you don't expect them to change your cash taxpaying status anytime soon? No. I mean, again, we're still working on how to continue to push that out longer runway than we have today. But we still have the several years that we previously disclosed. And I mean adding this, there may be an opportunity to slightly sort of extend that. But it doesn't certainly doesn't accelerate anything from the forecast. Catches. Keep in mind, Kyle, WL and ADS doing a deal with structure, right? Asset deals provide a lot of cover too. Yes. Okay. All right. I appreciate the time guys. Thank you. Your next question comes from Walter Spracklin from RBC Capital Markets. Thanks so much, operator. Good morning, everyone. Good morning, Oliver. Yes. So I'll start here with your specialty waste side on the liquid infrastructure and so on. It sounded on your prepared remarks as though this is in order of magnitude a little deeper than what you were expecting as we went through COVID by now. If you could confirm that and perhaps I know, Patrick, you had kind of signaled that you expect it to come back. Luke, I think you signaled that yes, but it probably won't in the Q4. Let me know if I'm getting all this right. And then finally, what's your visibility? When can you say, okay, now we have clear visibility here, we're seeing those budgets come back. We can say with a higher degree of certainty that, yes, we'll see this level off and stabilize as of quarter X. So on the infrastructure side and the soil side, I mean, I think number 1, the government is going to deploy a significant a significant amount of capital into the infrastructure, which you've seen in many of the announcements. That all being said, I think a lot of it was permit driven like we talked about a quarter. We were seeing delays in people getting permits because these municipal offices, there's no one sitting in the office, they're all sitting at home, so time to get their permits, etcetera. But when I look at the infrastructure business alone, our current work in hand today is about $375,000,000 right? So that is probably the highest number we ever had going into a new year, right? So into 2021, dollars 375 ish million on hand. And our probability average weighted pipeline today is another $500,000,000 of work that we've priced that we believe we are going to be selected on getting now. Will 100% come in, in 2021? No. But I think from where we sit today and the conversations we're having, that's the ship is going to turn there. The one the 2 pieces that a little bit uncertain for, obviously, are Northeastern Soil operations and our soil operation in California have been very slow. Now I don't know if after the election things change and that sort of gets back on it gets back in action. But I think those are the 2 that again we're just waiting for sort of visibility on. But other than that, I think we're I think it's going to come back. I mean when you look at the liquids business in Canada, it's been very good. It's bounced back. Again, we were relatively flat sort of in the Q3. I mean the bulk of what we've had is some of the industrial cleaning business and then obviously used motor valves, those 2 have been sort of tailwinds or sort of headwinds from our perspective. But I think we think of the Enbridge of the World and some of these other companies that we do a lot of industrial work for that when the oil dropped, they were looking to conserve capital. I mean, at the end of the day, that work needs to be done. It's just a question of when. I mean, you can put it off for 6 months, you can put it off for 8 months, but at the end of the day, you have to do the work. So we believe we'll be doing the work. And they've communicated to us what we'll be doing the work, sort of calling it 2021 when we revise our budget. So all in all, I think it's yes, it's a little bit more than we thought, but at the end of the day, fairly consistent with what we've seen so far. Okay. And then moving to your solid waste, you referenced the monthly improvement as we continue here into the Q4. Is it fair to say from a modeling perspective now that your improvement that we should see a 4th quarter that's better than 3rd, still a weaker 1st quarter, but better than 4th and then obviously start lapping in the second quarter. Is that how your is that how should we look at it any different than that in terms of the cadence as we emerge as we go into early part of 2021? Walter, it's Luke. I'd say that's right. The only caveat being, I mean, you're here in Toronto and with the way the wind blows with some of these Canadians or the provincial governments, right? So I think on the current trend, yes, that's correct. Obviously, any material deviations from these current reopenings or material incremental restrictions could hamper that, but that's how I would be modeling it today. Okay, perfect. And finally on M and A here, you mentioned your pipeline is full with regards to tuck ins. Can you give us any indication as to region of focus, where would you like to see based on the pipeline that exists, which ones would you say you're going after as areas you really want to build some density and some added density into your current operation geographically? Yes. I mean, so when you I mean, again, big focus is obviously on tuck ins in the existing markets where we already EDS divestitures, If you look what we acquired, I mean, we acquired some excellent post collection operations and we acquired excellent sort of commercial front load routes that are some of the best businesses that all of us as lease peers own. Now what we have to do is, again, the focus is on building out the roll off side of our business and looking at adding incremental high margin volume to the landfill to those landfills that we've acquired in those markets. So that's what I think you'll see the focus on. I think that's where we'll get the best bang for our bucks in terms of dollar spend, particularly around the M and A front moving forward. Okay. I appreciate the time as always. Thanks, Walter. Thank you. Your next question comes from Mark Neville at Scotiabank. Please go ahead. Hey, good morning, guys. Good morning, Mark. Congrats on getting those deals across the finish line. Maybe just to round up the free cash flow discussion, just for the Q4, Luke, and the 2 deals aside from advisory are expected to be cash flow neutral, that's with all the sort of one time investment in working cap and CapEx that you spoke to, is that right? No, I would say ex all of those items. I mean like the working capital investment, again, that's really I've been made whole for that in the purchase price line that's going to show up as a drag on the cash flow line. I mean, if you think about $135,000,000 to $145,000,000 of revenue coming out of those businesses, you apply a sort of EBITDA margin the way we were talking about, that's your sort of starting point. If you have a bit of outsized CapEx, again, really just purchase price and then you have the investment in working capital on the WM assets, I mean that's going to be more than an offset against whatever that normal flow of cash flow from operations there was. So but again, I'm characterizing those I think is more purchase price adjustments as opposed to sort of true operational cash flow. They're just going to manifest themselves in that section of the cash flow statement. Sure. And it's just it's all sort of captured in the Q4, those investments, it doesn't spill over to the Q1? Well, I mean the CapEx no, will all be Q4. The working capital, I mean, yes, it might take 3 months to build up to a normal position, right? But think you'll see the majority of that investment in Q4. Maybe you got a little bit into January, but by that time you should be at that normal run rate of working capital. The reason I just say 3, because of the seasonality profile of that business, right, there'll be a little bit more investment as you come out of Q1. But I mean for the most part it will be a Q4 noise. And just on the solid waste on the margin, there is some good color on where you think the margin will end the year and where it goes. And just maybe just trying to understand the Q3, sort of what was there any sort of I don't know if the pricing spread or just what really explained the strength in Q3 and maybe why it will it step down and then Q4 or is there anything that sort of goes away I guess in Q4? Yes. So I think the margin as a whole, if you look at what's driving solid waste margins, I mean across all the geographies, what you have is meaningful expansion of operating margins in the collection businesses, offset today by sort of drag in the post collection businesses, which is just more of a sort of volumetric impact from COVID in those. So that's what's driving it. If you think of what's actually underlying in there, I it goes to the pricing strategy that we've been talking about and seeing the benefit of that coming from a collection. The synergy realization as we've brought those sort of businesses together and you're now sort of realizing that. And then, yes, you have some COVID benefit as you take in the most expensive hour, the most expensive truck, those costs out of the system. So the Q4 step down, if you will, is more just a function of the seasonal profile of the business, primarily from the Canadian market, where you just have lower activity and lower dollars contributing and therefore a sort of bigger fixed cost base that falling through. So the overall strategy of what's driving the margin expansion, I don't think that is changing in Q4. It's more just a sort of seasonality profile of why Q4 is typically a lower margin quarter, if that makes sense. So the question was just around liquid waste, like the Q3 to the Q4. But again, we can take that offline just in the interest of time. But again, thanks for taking my questions. No problem, Mike. Thank you. Your next question comes from Rupert Merer at National Bank. Just a quick question on the tuck ins that you made in the quarter. Can you talk about the multiples on those deals and how multiples are trending? Is there any deviation from your previous guidance? I mean, we said if you look, we deployed sort of $20,000,000 plus on these small little deals. As we said before, multiples in these deals isn't really a construct or consideration from a vendor or from a negotiation perspective. I mean they blend out to something in the sort of 5 to 6 times what we're acquiring them for. But as we said on these smaller ones, they're often not sort of thought about in that what is the multiple perspective from the vendors perspective. I just reiterate that guidance. What we've said and I think what we continue to say is we're not seeing any sort of differentiation from a multiple or from a valuation perspective on the small stuff. Obviously, the larger stuff over the last few years have sort of traded up. But the small sort of tuck in program, we continue to believe is sort of 6 to 7 times valuation is remains true and where you'll see us transacting at in the near term. And then just finally, given that you now have a broader platform, more geographies, I imagine the pipeline of opportunities is going to grow here. Are you seeing that? And does that end up giving you sort of a better pool of deals to select from? You think it's a high grade, the pipeline for you going forward? Yes. I mean, when we look at the sort of pipeline as it sits today, I mean, we sort of bucket them by sort of Tier A opportunities and Tier B, which are the most accretive and which are sort of less accretive to the to what the current strategy, which I just articulated is. But there's 29 opportunities that sort of sit in that tier A bucket and there's 18 that sit in the tier B bucket. And I mean these range from purchase prices of a couple of $1,000,000 to $60,000,000 So I think that pipeline is very full and highly synergistic. So I think we will work to sort of execute on that as we get through the integration process here over the next 3rd or 2 months, make sure any little bumps in the road gets smoothened out and everything is running the way we thought it was going to run and is meeting or exceeding our expectations. So yes, I mean, at the end of the day, for us, like we've talked about this numerous times, it's capital allocation, right? You can only put and do so much in one specific market at a specific time or something is going to fail, right? So whether it's your organic is suffering, whether the inorganic is suffering, whether the acquisition integration is suffering. So again, us allocating the capital amongst the 9 provinces in Canada and now the 27 states in the U. S. Is sort of going to be top of mind. And our integration team has to be ready. Like we've talked about before, we do it all internally. So that integration team has to be ready to take on more to be able to integrate into those new acquisitions. So getting those the 2 larger ones done in on the platform now is definitely paramount. And then we'll turn our attention back to the normal steady, Eddie, everyday sort of tuck in opportunities. Your next question comes from Tim Tran at TD Securities. Congratulations on the positive developments in the quarter. My first question, I'm just wondering if you feel now that the footprint you've built over the years is actually allowing you to capitalize. And I'm thinking in terms of organic growth as opposed to M and A and maybe more specifically Canada. But I'm wondering if that footprint, if you're seeing opportunities to capitalize on the challenges of some of your competitors during the pandemic? Or is it really too soon to gauge that at this point? Yes. I mean, certainly, there's been a little bit of that. What I see that is front and center, no. I mean, there are smaller competitors in markets that have been significantly affected by this and don't have the balance sheet to sort of ride it out. And those, again, create opportunities. But at the end of the day, this is a good resilient business and a lot of our competitors do it. I think what you're seeing now is just the people want to similar to what we saw in 2,008, 2,009 when we had the financial crisis, it's just like from people's perspective, their perspective on life changes, right? And they say, do I really want to live through another pandemic? And do I really want to live through another year of this? I sort of want to live my life. I want to enjoy my family. And that is more of the theme we're seeing from a lot of these family run businesses that have been huge focus of ours over time. So I think that's what we'll see and what's lending itself to the opportunities that we're seeing today. So I think that theme will continue to persist in the fall. I mean, I think some of the tax reform stuff that in the U. S. That people were focused on, I mean, I'm not exactly sure what happens with the election or whatever. I think it's sort of leaning towards Biden can't, but it looks like the Republicans have probably kept the Senate. So I'm not sure there'll be some sweeping tax reform that's going to drive people to try and get things done a lot quicker. But who knows if that seems to change on an hourly to daily basis. But I think the opportunity is just continues to be what I said. Okay. That's helpful. My next question, just looking at liquid waste in particular and the really impressive margin expansion in that business year over year, the presentation sites, and I think you walked through it, Luke, a couple of reasons for that. Is it possible to kind of quantify a little bit or rank the importance or significance of those impacts for driving that liquid waste margin expansion? Yes. So what I'd say is on the year over year basis, really what you have coming through is the sort of the synergy component of having the both U. S. And Canadian businesses sort of gel together, right? So the original sort of thesis was that there, as I said, 200 basis points of expansion just by bringing those sort of businesses together. I think that's sort of 1st and foremost. 2nd, in the quarter, I mean, obviously, the cost control measures implemented in Q2 as some of the volume came back sequentially in Q3, you benefited from that. I'd say that's probably the sort of second in terms of priority of what's driving. You'll give some of that back, but some of those cost control measures, as we said, are permanent. And therefore, we hope to be able to enjoy that sort of going forward on a more permanent basis. And then the third is you have the use more oil net pricing, right. So when you went from Q1 to Q2, pricing went backwards. You ended up that was margin decretive as you've now put the pricing and you have sort of a plus 13% on the overall blended net pricing. That's obviously becomes margin accretive as we realize that now. In the grand scheme of it, our used motor oil sales are relatively smaller part of the overall liquid waste business. So it doesn't have as much of an impact, but it's certainly a benefit and when you look sort of quarter over quarter. Okay, great. Thank you very much. Thank you. That concludes our question and answer session. I would now like to hand back for closing remarks. Well, thank you very much. We look forward to speaking with everyone after Q4. And as always, Luke and I are around to answer any call any questions or calls that anyone wants to catch up on. Thank you very much. Thank you. Ladies and gentlemen, thank you for participating today. You may now disconnect your lines.