WCN - Earnings call transcript Q4 2020 | Waste Connections, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the Waste Connections’ Fourth Quarter 2020 Earnings Conference Call.

During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions].

As a reminder, this conference is being recorded, Thursday, February 18, 2021. to CEO. conference like Jackman, to now and President would turn over the Worthing I ahead. go Please

Worthing F. Jackman

Thank you, to our good the joined everyone quarter operator this and and first to to would results Mary year this welcome quarter like morning and conference XXXX. for by CFO. call outlook discuss full fourth morning our both everyone. I'm I Whitney, Anne

the earnings year percentage free a growth cash quarter. than XXX adjusted our solid commodities in and A the positioning flow year, we pricing free With while flow recycling for release, increasing in X% at of volume $XXX XX% plus XXXX. and million growth in waste for EBITDA waste and solid solid cash margins expected in converted volumes Connections to in noted of off XXXX. to least recycled double-digit ourselves from points already expansion renewable drove adjusted XX year. the values remarkable and continued with recovery basis QX higher As adjusted the a reopening basis a fuels in further of Waste values culminating the topline beat acquisitions into adjusted EBITDA entry for fuels additional growth for above positioned period completed during activity, expected is providing capped XXXX Moreover, improvement renewable upside points in points any point or margin economy, XX higher over and in basis than more increased for expectations

weekly several pleased week customers benefit we for from we not any further from reopening was increase to weeks. year in have revenue that are impacted does seen note outlook our in COVID last the the first Although activity, include

much disclaimer other turn into detail get forward-looking items. Mary to call the Anne we house-keeping and for our me over let Before more

Mary Anne Whitney

risks results of statements U.S. in and XXXX, morning. to Securities Litigation discussion Harbor forward-looking made those the Act of Thank Reform applicable included during release could cause Private are statement Commissions Waste regulatory February information Canadian differ Factors various actual meaning within XXth such in cautionary today's includes the you, discussed and Worthing to the Laws. materially Provisions The results in pursuant statements of differ Commission could Canada. including our in Connections Securities both from and Actual Safe forward-looking forward-looking call greater good the detail similar the the U.S. Security made earnings due and to with and filings Securities or authorities in in Exchange that uncertainties.

order may in forward-looking reliance statements date. make no an have additional or circumstances on may reflect or undue risks should be are immaterial, we not commitment business. forward-looking change after our or of impact adverse are there update currently as place You that that any not could which statements revise which events aware on we believe to We presently to today’s

for Worthing. will call, measures net free both most refer may companies releases the a will EBITDA, share, discuss evaluate operations. non-GAAP these Management GAAP non-GAAP monitor to measures such and calculate over certain measures. non-GAAP ongoing our Other performance to call comparable differently. uses the of turn financial measures the I the back to reconciliation now such dollar to non-GAAP a measures we cash basis per adjusted and On to our on Connections income diluted and adjusted Please attributable flow. Waste of as earnings adjusted

Worthing F. Jackman

you, Anne. Thank Mary

culture, rate year. of belief and spent reduce of year-over-year operating either union capital voluntary Voluntary delivering decreased supplemental or instrumental concerns spite focused in often COVID-XX and temporary to declined half safety the the non-union, person performance. regarding financial zero XXXX, line in less reducing $XX with all and for in We as are provide bonus of employees, bit are and to employee our improvements front and the employee the thank our values, late from employees, on assets over which in QX over XXXX, improve XX%, in posting industry ended the turnover and our for our incidents throughout operating on early response or of service XX% order as that million our turnover, XX% continuity support, remote XXXX performance our pandemic. related with family than further a recordable driving note our or guided belief safety extremely related greatest ultimately human in total healthcare incident This customers, rates income, results. and for whether our of pandemic, We and strong and you safety obligations normalcy a pleased We to injury in differentiated average. wages at discretionary locations including well in primarily impacts

quarterly of volume Looking at combined XXX for with positive plus period the sequential onset the pricing growth, XXXX volume in price of turning continued pandemic solid as waste expected than played first in QX organic price points X.X% improvement. since strength a on expected higher out of growth basis the plus

XX XX in we discretionary lows Minnesota be XXXX In about acquisitions as positive economy without of our performance the by about depths selective new in of focus and employee XX the reopening be additional the basis the adjusted and contribution a the XX.X% and revenue XXXX continue in and we an the COVID-XX for positive to at shareholder adjusted in spite lower on in we in or further was the same the increase revenue costs. pandemic, regarding from with $XXX related limitations elevated of would positioned continued shareholders activity, X% with quality many managing markets consistency through EBITDA annualized risk even beginning million the and COVID-XX drag in factors to approximately revenue completed overall costs. expected our October sets basis exceeded or such improved and than point returned be worth in impact decline drag XXXX of adjust the our drive in X% accelerated solid XXXX accept, dialogue almost than taxes. in determine in the of of XXth from decade demonstrated support dividend Delaware deliver Colorado accounted X% seen for earlier about tuck-ins benefit over to but costs, seller alone the the progression to total it's QX. activity, we Not to other activity underlying to an XXXX which of year-over-year QX, XXX points returns margin in expected entries acquisition this Underlying of cash million market This million from the the factors would over solid about high the over waste than acquired economic reported and appropriate. XXXX. the the any each related dividend. the in drive in further year, XXXX transactions to QX decrementals Along pursue, Any continuous volumes brings we XX%, in in interest QX, Moreover, annualized the -- free with of basis total of including to We recent marking provides waste and closed Acquisition waste repurchases continuous to valuations more XXXX. higher and activity. outsized of noteworthy including consecutive share points types expansion we in that margin and lower large We for improvements uncertainty QX E&P acquired for in a of related profiles XXX than the up an of COVID dividends XXXX margin recovery. other approximately year, and solid remains in double-digit more XX% growth years, EBITDA overcame activity negative the with opportunistic up reminder in of negative our margins volumes flow year-end about XXX since pandemic to discretionary also noting the acquisition more XX.X% despite of pace for converted As from and we or rollover XXXX initiating adjusted reflected since dollar updated Nebraska. these XXXX, negative costs waste of XX that E&P percentage recovery associated plus year. outlooks in double-digit outlook million us increases as marked annual recovered XX in COVID-XX to waste for XXXX. year. are conversion year and XX% We have our to another driven volumes

we year-end, sheet Given and repurchases. the dividend million to increase and XXX remain additional positioned share in at balance acquisitions fund our our over well strength and cash of

market we year This prefer repurchased such year-to-date consistently flexibility to dislocations. we've throughout we shares expect stock maintain continue the million already activity have year. and over of As communicated, to $XX capitalize to on

Now, Q&A. and provide up the Anne detailed heading then into depth will financial quarter highlights call review fourth in I'd the a of like XXXX, QX to year to more for I wrap pass before to Mary and the the outlook full

Mary Anne Whitney

as the $XX the points about of about XX.X quarter. waste or in surcharges Revenue about X.X% from ago Acquisitions fuel you a and period our as with from XX Worthing. higher year-over-year million of and expectations. basis was in of waste less markets. X.X% in to Thank between was outlook volumes the quarter the since in pricing $XX in year about and acquisitions completed Pricing about our or range up X.X% Core XX.X recycling due E&P fourth XX above of and basis million million line million quarter X.X% market values, activity our during million X.XXX on revenue $XX exclusive spite net fuel billion, competitive solid was than about In contributed QX revenue expected closed our year-over-year. in material million divestitures. mostly down western to region renewable reported X.X% well

waste our impacted Elsewhere in Volumes underlying all in U.S. range were volumes volumes exclusive hardest to and markets, about U.S., region pandemic mostly in sequentially most X.X% the which basis volumes reopen. region by improved Northeast slowest led negative about markets, XXX by on roll of our and solid down remain southern to X% many to noted X% Worthing improving QX our where positive points off tons activity Western activity. in were hit in from by As regions, strong X.X%. our in the landfill negative improved

have about pace shape noted in the of activity our reflect and shutdown those our to Canada's generally strong pandemic, X.X% has in That hit with far cut its has recovery restrictions. markets. Relative volumes about said, in related throughout and losses thus by outpaced activity, volume across and persisted QX we on weakness re-opening hardest from volume. the QX COVID-XX largely As disposal X% markets reopening

basis, of results year-over-year improved improvements the sequential saw again points a all X% by quarter the collection from same at down business prior in store quarter. we revenue to basis fourth Looking Commercial XXX in once year-over-year. lines on

in points than X.X%. commercial by both by to Northeast impacted a up QX less X% X% QX in X%. the those lagged with less still about landfills led reached sequentially about of markets line with down or rates many of to West price of strength drove points certain saw in are for year-over-year suspended and frequency. XXX about down Canada's aggregate markets. led in the off Special due tons, the basis and year-over-year XX%. and in Coast Excluding markets XXX X% of XX% in in These that service restrictions service out year-over-year down resumption improvement markets. reduced through renewed improved most were QX tons driven waste competitive Canada, markets track of through which COVID customers by waste was down year-over-year. continued we In California recovery had Roll than the in per revenue largely revenue the to and or quarter commercial per revenue sequential day sequentially basis levels, Landfill the markets were X% levels pull Widespread increase solid but by X% with we had year-over-year, up spite per increased collection in to in U.S. the XX% tons down to were increases to C&D associated Oregon. ton up XX% MSW X%. up

$XXX basis into have drags commodities, in a release and counts credit, higher they points margin RINS prior recovered free as more above credits Quarter flow and impact range Full adjusted both by at in million our capital commodities, adjusted we and period. of taxes the containers with ago year, Looking points. discretionary at in costs EBITDA year old of $XX firmed and of resulting per our activity provide XX impact of renewable more of full QX as XX our revenue. and now and [File for provided EBITDA recycled from to points I which or basis points waste and by as another from the exceeded in our the COVID-XX solid energy revenues gas, is than equipment XXX work. corrugated plus OCC averaged improvement for tailwind the XXXX. about XX.X% from E&P the X]. year and about on of in high to point CARES was fiber at XXX.X deliver the million, benefit since been spite $XXX QX conversion the Difficulty] review due excluding and earnings basis strong XX.X% XXX XX point QX $XX landfill CNG from Even points XXX.X for up $XX the renewable guidance of that QX, up higher of commodity about Act reconciled basis from payroll remediation about from increased -- year XX deferral quarter of expenditures due going recycled revenue and XX incentive RINS, end XX.X% activity [Technical were as about year-end. lower of completed million flow capitalized Adjusted year-over-year in revenues or cash and from expectations was comp of acquisitions basis fuels million will working on ended higher recycling outlook A of our basis primarily related offset margin the XXXX. year for and XX XX% rig waste sequentially in the basis reflects outlook of dilutive strong benefits including in the along capital, the cushion the cash since acquisitions values, free a for ton important first didn't in XXXX, is opportunities up above year-over-year the and to at or aggregate we period the fleet of from about Prices

do uncertainties vary made I in factors to regulatory to similar authorities these based Commissions and remind we'd once in everyone Before Securities We actual or filings SEC encourage in again with Statement review that like Safe outlined results significantly may on Canada. and investors the we've Harbor carefully. risks the our

during and from change Our that in items remainder excludes underlying economic related It acquisitions during the period. close may additional significant outlook trends. impact the any the of year no also of assumes transaction expensing

billion. estimated the first revenue Looking $X.X at in year is XXXX full XXXX, at

volume fuels. benefit approximately dilutive assumed activity an plus basis and for acquisitions be from the the in other basis as waste would cost, waste recycled waste point lower during outlook. driving for impacts does point related E&P have solid for an revenue EBITDA economy and the to expected basis And activity, from that basis pickup with our improving a year partially drag earlier, any be the costs related about an impact XXXX. of XX acquisitions fuels year, projected by approximate certain commodities values in and the higher projected disposal in X.X points levels. of drag be basis place earnings combined renewable the collection, noted such from from improvement additional in XX% is at employee our point additional point at rates, current with and E&P additional is price closed margin during rates and recovered XX already any basis initial This and solid for points, which recycled basis XX abate infection from we offset is an in may estimated initial extent continue assumed XX abate as XX well. we XXX through margin to To X% COVID Adjusted year, commodities COVID the XXXX upside provide year expected waste that expansion waste waste current XXXX transfer values higher up in activity Underlying XXXX levels reopening not or in approximately expect or year-over-year. solid to QX, billion our renewable points would benefit revenue, as beyond growth lines include XX outlook or reconciled discretionary E&P line For release to with

tax is is approximately for be our or variability. in our free XX% least reconciled expected to expected XXXX in XX.X% expenditures. quarter-to-quarter rates, release XXXX with in earnings revenue effective to Regarding tax XXX some on million as flow XXX approximately rate capital cash be Adjusted at of million,

approximately now Revenue Turning is for in estimated QX to outlook X.XX be QX XXXX. billion. our to

growth approximately in We about X% expect price waste for with of volume solid negative X%. of QX,

the margin from of E&P level. XXX impact we volumes as QX the quarter remain for final extra and to we of prior severe the margin the continued hauling, be line XX.X% period intangibles are values the about to full waste and last million waste XX taxes. revenue, and expected Interest to approximately in with Depreciation tough some waste QX. rate to expense, at activity. about estimated subject to from onset estimated XX effective of be comparisons basis per for are the slightly And underlying and at share and is also XX revenue, net commodity finally, of due amortization me solid winter many and or well year-over-year, up solid outlook, the remain to vesting with be comparisons estimated strong XX some QX amortization associated final our the based variability tax net basis is Year-over-year consistent revenue below waste benefits is transfer, one that expense for across equity call current income estimated weather of diluted the and basis day or in as volume projected estimated states first Worthing XX.X experiencing the of to Adjusted and compensation. interest Similar year in year to recovered improving about million of XX.X% full is QX in approximately is to Q&A. due rate XXXX COVID-XX to the quarter for to points pandemic. including in expected the of E&P of tax now expansion benefit spite million observed headwinds start XX%, points in turn $X.XX point the trends expected year Excluding reflect back before disposal EBITDA provinces, over QX. year, remarks of to leap of since let

Worthing F. Jackman

strength culture XXXX purposeful of for Thank you, dedicated and differentiated reflect and testament tireless efforts a to results our workers. our The they XXXX our expectations the Mary essential Anne. of in strategy. are Moreover

noted challenging our excellence excellence our is well, other. retention. Operational in progress towards during outsized to honor to including are employees’ and each as grateful as financial further employee earlier, improvements achieving extremely operational drive also not evident safety commitments our in this our ESV We only targets, they for and efforts as period, communities, customers, but performance

a will and of operator turn XXXX and of express we growth communities through success lines our especially today. from of to for vigilance commitment who in in gratitude now the with leadership XX,XXX serve. partnerships also our our see we open time I engagement of this I for employees to appreciate as XXXX beyond. my personal your The have share server communities, We a success any and the customers the by in and see measure scores once continued gratitude. your have support questions. it us to over up the the our for We expressions we customers, and the again want employee to made thousands positioned privilege call it and improving

Operator

Instructions]. [Operator

first of Please Walter Our line go from question comes with the ahead. Capital Spracklin Markets. RBC

Walter Spracklin

much. very everyone. Good Hey, morning, thanks

Worthing F. Jackman

Walter. morning, good Hi,

Walter Spracklin

of place with to you for were all here, So start what at I I hope want your Obviously, quarter X.X%. at for when conditions look so I the assuming look you're of guide stay in guided conservative you you quarter the when to first your that's kind us. volume fourth here. But trending

guided You indicate X.X%, indicating you X%. was but your negative improving to

if you negative say X. correctly, now guiding guiding I to you you're X.X, you're improving, but Here did it's you hear

bit was trying first to as there's whether a Just have your does deterioration conservatism guidance quarter, the there's of it early wanted expectation in HX of first in would some but expectations, the square an built inherent look for a quarter, off? the to like little built that your here thought get to sense as conservatism perhaps a I on just that in mainly

Worthing F. Jackman

start Anne. it over Thanks hand to and Walter, Mary I'll

look point well. As we've that been year about when the is to period at to XX volumes a XX of impact leap as points XX of volumes. impact last assumed year we alone it was you impact basis of The have weather impact the of also basis in may said year, lost, this we in compared and pointed just out script, the have

And year, the impact so X%. basis over leap and you that's impact if the just XXX points look at to weather

well of the way obviously have year. as probably to down saying this been leap X% normalizing it for Another had as weather we between week, got X.X% it the for would not

Walter Spracklin

OK, nothing so else. those to it's really relating and

on moving Okay, mix… to the

Worthing F. Jackman

script that improve trends the continue to since In year-end. the

Walter Spracklin

Right, right.

disaggregating how built that's for revenue, you of expect of of the your around terms wondering around the within I guidance? mix year the out full year for In playing for that, could the and was on little particularly price if but a between core your you and volume, impact guidance mix price magnitude give and volume into year us particularly color and bit your what

Mary Anne Whitney

with be around plus down a X% X% gate price the break be what so -- and I could We've been talked to deliver than do delivering to price, what about. can than that as we're set years, good. easily little us expected seeing better feel pleased Sure, a little we're and volume, say is about of X%. a you've been with to little Could the but you seen other Right or on what we more price. stickiness we that said about out has so up X%

So to that's way it and a is X%. I'd say think fair Walter about X%

Walter Spracklin

So no impact in your that's X% from there mix guide? embedded

Mary Anne Whitney

Yeah, that's correct.

Walter Spracklin

Okay.

Worthing F. Jackman

the if So be if impact -- big trying above If probably obviously upside modest It's you're the the many side, to then thing how more so stimulus Walter, COVID hits that to more that. the this so revenue on mean, out we X.X the drive look higher. commit might volume for X% X%, let's GDP plays I package, passes see it Washington price. of notably comes there's can right. of a back, before really X% But trillion variables all if

Walter Spracklin

the Appreciate sense. Makes time.

Operator

of line Tyler go with Raymond question the Please James. ahead. from next Brown comes Our

Tyler Brown

everyone. good Hey, morning

Worthing F. Jackman

Hey, good morning Tyler.

Tyler Brown

Hey, Worthing.

volume So to I guide different. little a bit at the want come

I So just want it's clear. make sure to

So you're of and snapshot a taking right? basically forward, that simply rolling today

Worthing F. Jackman

correct. That's

Tyler Brown

Okay.

returned. that you XX% So of the commercial customers paused, about talked have haven't

So add would basis the level high eventually if numbers, just if just we but what scenarios, those something I around all that volume, have to half played the at came points maybe don't a XXX so would like that be say of back, just alone? with

Worthing F. Jackman

come COVID due so markets in the track we or revenue it's the So not impact. about to XXX that have I right. absolutely back it's million that mean,

somewhere came as X% flow the half if attractive the in volume that incrementals that's comes to million. that and XX% is back. increase of about back, And given Again, in range, that XX so that from through activity that's XX%

Tyler Brown

or anything else kind doesn't resi subscriptions, include comes that pulls if off Right. Right. And new roll of even in? back even

Worthing F. Jackman

Yeah off GDP etcetera that's around sideline expectations year stimulus the that's whatever the from for for explosive again right. consumers, or coming

Tyler Brown

very very, That's helpful. perfect. Okay,

so overall So Mary a you COVID say, expansion. so much I've little on for points specifically. cost XX the But unpacking Anne, I'm of thank got unclear to basis

a point XXXX, -- costs XX COVID basis that think the that I be headwind hear So you in said year-over-year I will did correctly? is

Mary Anne Whitney

-- basis I will trying Tyler are XX an points what costs of there COVID was make about amounts which is that we So mean point ongoing the be that to to impact.

expenses as we're point the XXXX. will So to lower we've that point into supporting going to that continue that's the compared we the there's in employees basis is cases, and impact put in our that. costs what again, -- XX reopening, year-over-year assumed The continue extent not things because other And then these happen, the be. related to necessary a to reduction that would those

Tyler Brown

and [Multiple up will, you is basically talked kind bit and kind Okay, the bit, come baking for in so this you Speakers]. you've so in okay, but the question of little volume here, for last you that volume you're -- in that the a the be expecting thank some if clearing QX? costs could me. a are blast from my then this of winter And already just answered about one to little you weather that QX, maybe

on. Okay, a know go Thank okay, going to I know I be ahead I it's am long and it it'll -- call, going so you. pass

Worthing F. Jackman

Thank you.

Operator

comes with of Our go next the Please Jeff ahead. Stanley. from question Goldstein Morgan line

Jeff Goldstein

morning. good Hey,

Worthing F. Jackman

morning. good Hey,

Jeff Goldstein

special like meaningful providing sounds is waste drag. it C&D still So and

I the both you mid-teens in quarter. mentioned think on

in just customers So growth about seeing hearing and I'm you're these curious and markets what XXXX? thinking from there you're how in

Worthing F. Jackman

of in can Well, special those where a these in be But see pandemic. it of others quarter With death kind bit declines right of see of we still geographies now the a strength would will it's episodic. be the just streams. anniversarying ways. question two quite some the we last This in

I anniversarying the so through and again, QX And the think, those getting print pandemic will percents. change

Mary Anne Whitney

to was pandemic fact in up the that March. you that point in last remind waste Yeah, QX, the of year XX% look I'd year-over-year. to impacted Worthing’s back in spite numbers folks ultimately Special

of in then to of on just itself So top of it. the be and was and difficult going layer comp pandemic

Jeff Goldstein

an And your then you ask your want excuse sustainability XX-year the XXX fair just target. of in ESG million towards question to specifically around Okay, meeting enough. I report me, investment call that

how prior and think cap impact model through this overall what the does you long-term, financial over investing it the way, were flows how XXX should just much investment? any million this announcement, is about Just margins how incremental we to to the the in of

Worthing F. Jackman

that take consistent and or about just it packaged million by on part number now divide with margin Sure, standpoint, that the which or benefit you communications years And that has the really a -- making more so these period look a to get you is normal always if likely XX XX-year of EBITDA right done prudent or it that's what the everything which now. for spend haven't if of three you have deploy standpoint, ongoing million will -- and XXX five of targets. year, just instance XXX to we've making a driving to with and a we're just course so, million a been returns, our from investments, our incremental at from over ESG we It's a benefit, will what million alone. we the priorities it next doing XX obviously

again, right of are in And And so are these based analysis we what element with the it. also do investments past. have returns that everything consistent we've done again, the an with

Jeff Goldstein

for the Thanks color. Understood.

Operator

Deutsche with comes Please question Our Kyle ahead. go Bank. White from line next the of

Kyle White

everyone's Hope morning. doing good Hey, well.

many XQ do you to on that commercial -- service frequency of give commercial had assumptions didn’t as bit how much might more you closed? in from On the that a increases been can assumptions have customers and permanently improve you think service, previously a service reduced collection be sense a color or why

Mary Anne Whitney

the deterioration, we your QX, So, improve didn't there would say with the that all were observation some were surges QX. activity, we on QX we kind of verge you what of some renewed course that it to back and to for we we to when at because possibility saw that, kind are wind braced of if be in lockdown which October of reemerging would is that looking respect

And so seen interestingly observation Canada, up. the in on renewed those our spite and restrictions, is, of the holds West Coast business you've particularly

off so markets, the QX. recovery which I markets aren’t story with the thing think in the in is by landfill tons exclusive basically And we And other municipal you improved was basis other remember waste markets to for and the pulls that to where addition the of So the tons, would as I lines QX. of part that it to business tells sequentially XXX observation XX% West know which points as you and roll also account line that, solid you landfill the have competitive I XX% but of made the QX that to the in is have Coast we mentioned, tons. like say saw

in back described, down have, is say, full that view not here prior year why think that's which who from story, what's believe I drivers getting is I question That us we'll there's we no of then look think improvement. hey, years, no you other discernable the show things if interesting which rates, X%. from your as have communicate it Worthing out leads the the volume point we've regarding to appropriate to at give way cancellation So better prior what and a permanently numbers which periods which And is are this we are equation, you gets as year exiting the sequential guidance. to it's said to these customers we'll those versus difference assumes

Some percentage come in position will to what come back doesn't not we're a back. and guess

Worthing F. Jackman

staffing restaurants, tourism I reopens up right refilling. you reopening, a talking economy dependent again, are revenue that's of that be buildings, I and will whole arenas the increasing, there's office timing the upon how mean, element that. of mean, missing schools now

Kyle White

this want considering to you do for then or of year, you portion kind which view that that suboptimal a as from Yeah, and your standpoint? sense want have to makes makes bigger will shareholders, of leverage target a Do below, perhaps suggest return repurchases that sense you complete how you be target seem minimum buybacks you leverage. this to a capital in don't structure to kind maybe that go year much a

Mary Anne Whitney

throughout So this that times we're already to we've that driven what X demonstrated. want far will where again, but to present we look thus it which sit, about And We've and to just for it the done we opportunistic, the very gives those be flexibility, X.X this is to opportunities less like comfortable continue having we be year. leverage that by themselves we being us. year

intent but year-over-year. that the not to is there's expectation increase the a and we is target specific as said, So

Kyle White

in the year. sense. Good That makes luck

Mary Anne Whitney

you. Thank

Operator

go next Our Jefferies. the Hamzah comes question ahead. Please line Mazari with from of

Hamzah Mazari

would morning. be long-term. of far, sort below others, color are Good and merger pretty large, like long year, you it just M&A, you. you of you've the assets good. relates but space is term, M&A so short-term average year integrated Thank are was relative low signed Progressive do Maybe this foresee to sector is then pretty year Hey, well that there any do of helpful? with question longer-term sort XXXX as you, then what your to expect doing just to much were LOI short-term like on mega My both and another and be you last average sort last in know so any Waste in obviously overlap of around I the sort above

Worthing F. Jackman

term, meet think continues year we positioned in an or We're dialogue be Hamzah said, as We the XXX average to For the to acquired to XXX short elevated. that. revenue. exceed

given a timing that might of done the year. Now, QX to end got that last in year, we have of the thought this stuff the prior different closed of some be of may little

way predominant couple are And the I'd versus -- XX on number. of seller likely with with half than that to value this above But, as say all you're right. it now. year profile of XX that's out regards sellers clearly continues of changed. -- look of what's been what a prudent higher going half and with making combinations, hasn't majority at few advance million looking the to never the deals, again, would again million reviews that assumptions you in be that when But, been XX better that companies drive large recognize million regards look that DOJ on what that the year average. historically, at, pace smaller so made through million in that the at of know, is XX that protractive deals you never in range see are up never look transactions, that you now to acquisitions the and we hung regards to had waste the for dialogue driving that right we larger management but this and you have first nothing past of attractive going second look with With even but never horizon the there think say But to there's that you the experience activity, they to you of in of activity like other But at. things, about that. of them those second we're or the right creative what the find get that more range at period, on kind so when a moving we say as we

Hamzah Mazari

And, just saw, sort just Canada, of activity there, on disposal my that Thank you of reopening outpacing sustainability you. what's disposal that question, referenced the look it. XXXX? strong follow-up you activity Got you activity as into the that

Worthing F. Jackman

that continue Hamzah. Well, we are seeing trend XXXX into

fact, two number with In Montreal those the that of of about activity City recovery. markets, some in three and talked one were Anne reopening New top being as Calgary in Mary COVID York impacted

lockdowns holding see the as rebound up business the despite veracity And further. unwind, lockdowns still we in so, well. very we'll even the And see the that Canada, of

Hamzah Mazari

so thanks Great, much.

Operator

of the line go Kevin next comes with from Chiang Our ahead. question CIBC. Please

Kevin Chiang

taking questions. for my warm everyone's staying the Hopefully given storm. Thanks Thanks.

Worthing F. Jackman

warm are given are our houses flooded. We

But going rocks in on. floor. are We on other the than that first fights and our sheet

Kevin Chiang

always little technology the guess lower stuff sustainability pretty roll of incident just that look you had waste your target year, mean what significant X of --. you're for at decline, you this done I competitive you've term bit is down of connections, if have how cost Canadian if think You are there, longer I but a of the a cost risk wondering advantage think you years fleet saw new turnover that you've a now? all the and turnover is, from a voluntary when look report, on in your out into does some a about for that XX guess you can of a I risk longer-term hourly to ask Maybe in winter, experiencing I rate, maybe introducing about the wage rate I I you together for as XX%

Worthing F. Jackman

companies XX% it we're as of look You where just now. that and incidents some you to now, say than to know, slagging to -- when we long-term low as targets frequency what higher and that's meaning, find I right and is you our it get that's at I crystal are have would be balling because get level TRIR right TRIR,

on notably you to the too, because as to over that say needle harder us a harder certain when years, gets as move people get levels I low done we've continue standpoint It that of includes right. so frequency, and hitting the past right. plus frequency And XX to

further And It's it's that that improvement. and capital making we behavior technology, accountable for so, investments yes, the technology right. about instance. more always humans we ourselves hold improvement how it use to are is human said than for coach we've side. In Obviously on the about

obviously, point now right costs off the X% frequency of lower, our without to expose incidents. retention locations just investments, doubt, improvement. severity premiums And you time above at to be down a drive making risk up XX% are risk of like drive you probably from like now long them that'll we We'll as X.X% So and ourselves jumping levels. the the way Well a to if think we've it I think one that I as the drive of is to against we X.X% around ask continues of cost you alone, over standpoint. But to that for insurance holding of take two industry look, may that well. might is, with the in U.S. look risk had always continue last push year Kevin got But We're the accountable. incidents know, or to be severe litigation help saying to yourself honest whatever over

dramatic that improvement want of to outliers those see show focused the of where to making kind especially X% greatest to that locations everyone a are year-over-year we getting be, them really effort average. so In that's basis on we much the above risk, that that is a the improvements getting on where expect. And we

Kevin Chiang

to or you're seeing terms in just in governments that And the Canada that Northeast happening a hear not U.S. when and it or two? those severe I helpful. is more regions clarification that's -- our the something Canada lockdown Canada, resulting compare at of in just of guess, the Canada, If quarter like Hamzah’s in imposed. U.S. specifically of question the the over the kind have was something measures recovery in sounds past or both markets, of being performance on there recovery I maybe is on happening I in happening the maybe Northeast maybe question, looking maybe think That's surprised maybe what outpacing I in back two

Worthing F. Jackman

dollar close basis it's [Multiple was York. York just the Speakers] New dollar dollar a New improvement and lower I the improvement what think the probably in Yeah, for of point in off jumping where a to last XX% instance, Calgary improvement dollar likely at on probably was just weekly the improvement up Montreal we look XX% week was of a with up

it's better so months. just And a jumping off

Mary Anne Whitney

that off, The other which observation started in I in QX. would we saw is roll the improvement make

there in in Quebec markets, that like be had that we noted back in strength was certain there saw for So kick lifted. construction once and that were Pre-pandemic driven we restrictions right instance, could elements.

little a So are different restrictions is maybe I'd say the the other aspect some market-to-market. of

Kevin Chiang

everybody. Well, that's warm sense, Stay it that makes makes That safe and me. for sense.

Worthing F. Jackman

Thank you.

Operator

comes Oppenheimer. ahead. Please Noah question go Kaye the from next Our of line with

Noah Kaye

others I the come safe have family Hey, want you painlessly thanks. vortex. first during as to just what this as and of are said. everyone's echo polar And I hope, And out possible. customers

trajectory. around just free question, flow cash First the

be outperformed to into so appears cushion heading what really and did building You XXXX. year, working this outsized capital the despite guide you a

for left XXXX. unchanged free million cash XXX bogey You flow kind the of

and or should or want to XXXX touch So, one-time about thinking headwinds call on or to we we think we cash can considerations Act that you might want flow anything items reset that XXXX, in if any might other be CARES free out about? any in lap

Mary Anne Whitney

year. for as that point, CAPEX And as is you're exited taxes Sure, we've ourselves enjoyed XXXX, way had the kick in thanks, higher I to do feels better today, better the like you're that retake $XX And the reduction XX% able to and was anticipated. can appreciate observation to again that that point flow your saw you ourselves XXX course position the we of communicated in did payables And our XXX said are we we throughout versus million. the things guide unique we left XXXX, about still delivered And instance high the it that XXXX, right. than to The opportunity defer. than at we XXXX and then cash you million Noah. least than and the end payroll range. benefits, of fact observation your have what right regarding we in that all we CARES free of Act your back you XXXX the To

a XX is So the what for million deferral that was. the was over us math little

that's plus the XXXX in million about half returns of communicated. the we've that repayment, that million. so into XXX at least already And course, of And factored XX so

Worthing F. Jackman

Yeah.

You're declining but in we year typically every looking look at with rolled cushion. the the payables,

it and XX and net XXX paying XX taxes Mary CARES of million this and course one between if so, reversal year, or of year. going of that So that Anne’s anywhere just of cushion. take the that cushion to or the any against payroll of you about XX us net million gives million a you what million of have and That's not common XX for into a XXX million

Noah Kaye

to Thanks yield much. I'm the Great. floor. very going Yep.

Operator

the line next Michael Stifel. from of Hoffman with question go ahead. Please comes Our

Michael Hoffman

your now have to wanted Hey, a thanks it weather second. for for Anne, intervals back I Worthing go service the and to We're back. can you having here, up questions. Mary

clarified an bad, neither you so intervals about offers ahead. at will assumption the XQ that it and service neutral you progression net or is I for it's the question or headwind, So thinking your be just guidance XQ. that answering are you? when into therefore opportunity, is the no look Go a How good also

Worthing F. Jackman

right. That’s

Michael Hoffman

Okay.

formation it's has a starts level five-year XXX,XXX a housing new four, and at helped above we're when create above business are certain there running So always average.

drugstore potential So That's empty or upside the houses, the fills that's infrastructure, enough need things another build all storefront. It a that. back -- you exhaust there's you I like for potentially? a

Worthing F. Jackman

what going that, the or the look, timing we're the magnitude to predict recovery the point That's because improvement said from or COVID. is or right, we economy the of the timing inflection not the in of

And combined have so that what that's when know we're is X% we saying price plus today. communicate we volume, business we the

Michael Hoffman

Okay. That's perfect.

of pandemic to then margins focus when of we've laser long-term XX% well, year a the just feels have always slightly fair cycle been you of I and there little a of entering housing as that and better able maybe because the incremental productivity, use be it's combination were drive time juice come XQ, like sort with a this a benefit this of about that we're so a look than XX%. talked we It it the wait and waste with did slightly out a a it that to better year So, Is incremental at of into in little trend? kind was your in margins, in my incremental. classically statement incremental a bit could just you solid tenure, backdrop of what as

Worthing F. Jackman

why absolutely average above mean, Those and the tons, right. are revenue incrementals resulting commercial incrementals recovery COVID. if that's you're highest from it's seen disposal from on recovery waste to and two the regards I primarily with Yeah. you've returning and and solid

Michael Hoffman

the you've lowered absolute because of structural And all too the some in its of model? cost

Worthing F. Jackman

that just back again, bar that's you clause We Speaker] tabs [Multiple in. we'll Well, that. know spending put start

Michael Hoffman

I okay. a loves why us garbage garbage yup, to can Inflation, inflation? company remind problem. have you this that is drinking Yup, a remember has

Mary Anne Whitney

the Sorry, question. end we your had trouble of hearing

Michael Hoffman

industry us remind why the you Can garbage loves inflation?

Worthing F. Jackman

Well, like know… you as

Michael Hoffman

it time them questions inflation? I the want hear all from this why to you, get about just I you love and

Worthing F. Jackman

but Well right. we'll not more average it's for if -- basis over XXX time, points good but CPI. runaway like That's you inflation, over look typically don't we anyone, or

that help through recently, over And the leverage Obviously comes at inflates higher have labor recently up, the been than looking going rate the meaning the so that some few back cost like cost moving Obviously everything structure pricing. as years. not got is past P&L. structure, at CPI that'll you within things it

the about and top on with don't that provides stopping. the being But And as I of a lot middle through getting percent what see P&L. expansion margin opportunities that for revenue, labor the cost CPI so through moves coverage to higher creates obviously XX% a line, spread won't, more of obviously that

what obviously up Now also CAPEX too, the is see goes right. you cost of

that. sight Let's of lose not

Just total of are and kind seeing this increases hitting cost steel you're cost of that the prices. year alone, of resin increases against

you yeah, so, get And in inflation but there's CAPEX unit benefits also the as P&L understand that some costs within well.

good a all doesn’t flow, cash does. it chunk flow so of the And through but that

Mary Anne Whitney

And to that reminder course right. you're of the on at thing that, the pricing the inflation if would helps of fixed, is the What day end I is one pricing. add Michael matters is

done through we that. deliver CPI price through model XXX you and And have were want a have to the to to so that we you great recession, expansion, allows described, market spread retain that points that basis demonstrated, we being which the demonstrated

Michael Hoffman

much. you Thank very Okay.

Worthing F. Jackman

you. Thank

Operator

question next of ahead. go from Stephanie with Please the Our line Morgan. Yee comes J.P.

Stephanie Yee

Hi, expand I XX solid whether and of because step lower XX to I for prices move to to you ask your there's cost EBITDA underlying margins? we do points mid-XXs, margins, much you're about of gained operate kind or up think margins points pandemic really I'm XXXX. saw margins, at cost that talking you of some you room longer-term efficiencies those kind like of waste during XXs or basis of think in structure the need we in the towards just guess because want you're to maybe E&P the think of do to type you XXXX, a recycling is it that basis then how to assuming about some of higher able that pick up,

Worthing F. Jackman

a influence got as that things handful you've Sure, you of it. know

of reported COVID. we Mary Anne just the points, the As a costs pointed in out basis a and waste XX.X% XXX right had activity put just it for from in change we is it in total already, E&P XXXX, discretionary

gets basis you as for basis assuming last recover XXs talk and you year. the given And the always the the a already over as margins to about assumed put wanes XX on back year quick the back expansion mid that XX then to March CPI. that a Obviously to walk. expansion point you XX this point pandemic up the is do off jumping the point XX spread to time, there of to mark we Now

walk, an you margin that year-to-year multi-year so obviously had the could values And last with inflation also has year, the commodity back you high assuming E&P move [indiscernible] a higher and very flow And to comes incrementals see got we levels through. improvements. the expectation,

the to the very again waste is negligible don't margin. activity like got business XX% XXX denominator well price, working near minus reported margin anywhere range, that per impact dilutive million from for get year, to of million have of the the if even for on so from that it What see everything's you is E&P of recovery to our anymore so plus back, kind landfills acquisitions we're that the moving be or And commodity much XXX we is as tons that because coming doing both big values impact as you in forward. base revenue

it why that’s is notable. So less

Stephanie Yee

bill also as your this that picture picture were might that how qualitatively impact is we a And question infrastructure Okay, great. Thanks us. can of bigger for an talk passed, about get to kind just business? you for painting If well.

Mary Anne Whitney

Sure.

would bill So, to impact course, to extent infrastructure expected right. be be to were of volumes there that an the

it activity, it in overall waste things C&D you'd by and you growth infrastructure that So see economic be development would in see and that projects, like special fueled bill.

benefit hallway on also side. would we the so And

including be for ourselves industry and boost the certainly a So, on volumes. would

Stephanie Yee

great. Okay, Thank you.

Operator

[Operator Instructions].

with Sean the KeyBanc. line of For Eastman our ahead. from go Please comes question next

Sean Eastman

XXXX closing and to to about just change be that I there, what could Hi the and I mean spending costs what that around the you for COVID-XX strong. and out. on the into I what team, question has you dig be is; wanted so XXXX; the out in nature both going of are the really year does XXXX a one, talk And, two, the you've compliments how just related if that'd payback through I costs. helpful? the magnitudes those there guess included guys does business, in guidance mean, on percolates stands in

Worthing F. Jackman

do do to it Sure. thing right the payback. mean, look because this we We I do, it's right. don't of a because

a our last look that workers on essential what to wages, right. You show up stay That work one that wasn't because recognizing at that loved tested have if or year in folks warrants folks we early that secluded. wage supplemental or they day unlimited of that did as contact they every race support had was their versus impacted basically couldn't warranted for And fault. they positive

sequencing several call as time Obviously, January. December, the as we of on pandemic the rates waste that year in toughest the thank on, impact last the year the people dollars, what based it just be issues of support wore just was put got infection the once befell knew would and right you fall, a And so, I had we of we pandemic. in a top of of because because And the again, through bonus they in weeks on that millions just that that them. pay of power it,

times guys, And Thanksgiving, to that mentally, our pandemic. out were Panky infection With the so folks knows with there many hit into really third that right. it. of the hit folks I rates in be to to was bonus and everyone and five prepared six them times, we mentally him. holiday through that powered mean, And season span was the you heading as about ahead that wave unprecedented for we and over before steal a holidays of what got put to

were wage our most or important. for And Again, XXX,XXX people wage That's in isolated a January. look spending a probably have on had so, this reason one folks that -- Obviously continues. that back. hours lost you another. may week for We're again spouses of that cut mostly we -- support support job look at have or

invaluable. then so is support incremental And

extent that obviously do continues Anne's folks weekly are a like we support to that we those give So the in for number to needed that point. the Mary things programs, out those -- of wages

down As policy Obviously, it's nonetheless But still on our daily reminder the there. that an hard will infection for come the is the a need program, people rates abate. think, I easy how work basis.

hour there. wage and our I minimum And put per go target that sure found meet. made X% two $XX We wage, our $XX it's amount, to look, below ends of so about employees have shouldn't think jobs out we a we we that employees had work to make

do. And was just there as again, so put important thing the out consider. right it these all we to payback to what is not well. are things that of And The

do and Now we its especially this lower the the industry I think better and what's at look levels. see I around there at as glad can this evidence it. can it how people, pays happening industry whole look we out mean, you did I'm with

Sean Eastman

Okay, very helpful. I'll That's leave much. Thanks there. great. it

Operator

line question next Neville of please Scotiabank, from proceed. the Mark Our with comes

Mark Neville

morning. for good questions well. a and just of Thanks safe taking hope staying Maybe the couple Hey, as you're points clarification.

what's First and just on the and recycled the the baked RINS guide. into commodity values

current you or QX? we're sort trending of assume in that QX is where that say you when levels, So

Mary Anne Whitney

per and levels, picked see where seen trending in that ton course pick mentioned QX, $XXX in we're XXX over or up. of OCC we been current range. the we XXX basically the The to on you've quarter a around They we've some RINS up $XXX and as well

Mark Neville

Okay.

increase at I QX there is I the again, oil the for the I guess what the E&P, commodity the assume relative to sort guess thoughts then of business around it's I where with guess on of maybe in price, price, And improved similar are the year? again Okay. sort that question now, type we're but your

Mary Anne Whitney

rate. point, we at included our in guidance assumption essentially our run current So stay what's that and the, this the at is

speculated up we've other imply million $XX that half a a the $XXX no back will anything So there some of around into factored not been the as the year per be million have people pickup assumed year for communicated. that pick quarter, it's has would with in that

Mark Neville

I sort soon? improvements it have Okay, or XX but guess too is you of any with north of noticeable just WTI

Mary Anne Whitney

said it's say increasing, QX, you've too then. count No, since haven’t nothing we'd material we it seen and up we really but and No. WTI you've as up, seen firmed I soon. rig in mean,

Mark Neville

in sort it just things, guess network carbon sort investment ESG there you the a about does Thanks. policy I when gas general? and create bigger again of And we these of require Okay. have on sort headwind your sort a is these how -- would think it is of Canada M&A, for opportunities think across or you you, in and maybe about to that's it front, just in recoverable, tax of things a bio something

Worthing F. Jackman

false of differences start that lot there in here. a there's Well, question, there's are many unpack to lot and a because

pass With with bio we gas side, there right the through. regards opportunities. fuel second opportunities plant now incur, to that to gas obviously and we're with us, mean, to regards taxes in building may at our will for looking regards So those carbon were I Canada. renewable large

we've with three P&L. to that's years, benefit that Our flowing worked many two hope of within hope on you'll that I the economic them, And the years. easily would for online. through see

upon that the that doing imposed things laid a part being of ESG over our out tax lot targets. investment the those both through. opportunities that's a of million different there's of commitment and span us, So in Obviously passed we're that's been we $XXX

Mary Anne Whitney

at thing helps could what's do. way or when the is to required -- It so to operations change no need And in would a we the our impact could others that add field Canada, that anything we playing look in to and we us. that Mark I level one

Mark Neville

Great.

Okay, thanks again for questions. taking the

Operator

at I'm this I'll showing back call time. further to presenters. no questions turn the over the

Worthing F. Jackman

your no you are to management on earnings listening with Reg-G Mary laws call. questions to any conferences Thank that did an and and allowed today not securities our we speaking to you upcoming or there investor the regulation under available Thank answer and team at Canada. Look If interest in behalf entire again. in our cover, to we're you. call answer next I FD, are that forward Anne applicable further questions, today. we direct of appreciate virtual

Operator

participation We today. for all the you that thank conference your does Thank and disconnect conclude call you please ask you. your That lines. for

Waste Connections (WCN) 18 Feb 212020 Q4 Earnings call transcript