Welcome to the Waste Connections Third Quarter 2019 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 Tuesday, October 29, 2019. I would now like to turn the conference over to Worthing Jackman, President and CEO. Please go ahead.

Okay. Thank you, operator and good morning everyone. I like to welcome everyone to this conference call to discuss our third quarter 2019 results and provide a detailed outlook for the fourth quarter, as well as some early thoughts on 2020. I'm joined this morning, the morning of Game 6, Go Astros, by Mary Anne Whitney, our CFO and several other members of our senior management team. As noted in our earnings release, strong organic growth and solid waste and a sequential increase in E&P waste activity enabled us to deliver better than expected results in the period. Continued price led solid waste growth and a slight pull-forward of special waster activity drove underlying margin expansion in solid waste collection, transfer and disposal over an estimated 60 basis points in the quarter. More importantly, adjusted free cash flow of 763 million year-to-date or 18.9% of revenue and up almost 13% year-over-year puts up firmly on track to meet or exceed the adjusted free cash flow outlook for the full-year that we communicated in July. Relatively consistent solid waste organic growth, plus the contribution from acquisitions closed year-to-date or resets us up for overall revenue growth in the mid-to-high single digits and underlying margin expansion in solid waste connection, transfer, and disposal in the upcoming year. With additional expected to continue above average acquisition activity and any potential improvement commodity related activities providing further growth. Before we get into much more detail, let me turn the call over to Mary Anne, for our forward-looking disclaimer and other house-keeping items.

Thank you, Worthing and good morning. The discussion during today's call includes forward-looking statements made pursuant to the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements, due to various risks and uncertainties. Factors that could cause actual results to differ are discussed both in the cautionary statement on Page 3 of our October 28 earnings release and in greater detail in Waste Connections filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements and information as there may be additional risks of which we’re not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business. We make no commitments to revise or update any forward-looking statements and information in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAAP measures such as adjusted EBITDA, adjusted net income attributable to Waste Connections on both a dollar basis and per diluted share and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measure. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over to Worthing.

Thank you, Mary Anne. In the third quarter, solid waste price plus volume growth was 6.1%. Total price of 5.2% slightly exceeded our outlook for the quarter with a strength once again reflecting additional price increases implemented in 2018 and 2019 to address accelerating cost pressures and provide through collection pricing further recovery of the much-discussed seismic change in the recycling market. Pricing in Q3 range from about 3.5% in our more exclusive markets western region to over 5.5% in our more competitive market regions. We reported our strongest quarterly volume results in over two years in Q3 with volume growth better than expected at positive 90 basis points, due primarily to an outsized quarter of special waste activity. Some of that landfill activity have been expected to incur in Q4 when comparisons are tougher and therefore doesn’t change our outlook with respect to full-year volumes. Looking at year-over-year results by minor business on a same store basis in the third quarter, commercial collection revenue increased approximately 6% with a majority of related price increases, a portion of which were due to structural changes in recycling market. Looking at scheduled commercial business, which includes small and large container activity, net new business has increased in each quarter year-to-date. In addition, service increases have outstripped services decreases in each quarter this year. Roll-off revenue increased approximately 7%, and the U.S. pulls per day increased 2.3%, and revenue per pull was up 2.9%. In Canada, pulls per day increased by about 4%, and revenue per pull increased about 2.5%. Solid waste landfill tonnage increased about 5%, on increases in both MSW, up about 6% and special waste, up 10%, while C&D tons were down 4% year-over-year. MSW tons were up in most regions led by markets in our western and southern regions.…

Thank you, Worthing. In the third quarter, revenue was 1.412 billion, up 131.3 million, or 10.3% over the prior year period and about 7 million above our outlook for the quarter. Acquisitions completed since the ago period contributed 82.8 million of revenue in the quarter or 77.1 million net of divestitures. Adjusted EBITDA for Q3 as reconciled in our earnings release was 443.6 million or 1.6 million above our outlook for the period and up 26.8 million year-over-year. Adjusted EBITDA as a percentage of revenue was 31.4% in Q3, down 110 basis points year-over-year, due primarily to two factors, an estimated 115 basis points impact resulting from the year-over-year decrease in commodity-related recycling and landfill gas revenues noted earlier, and an estimated 55 basis points impact from lower margin acquisitions completed since the year ago period. The underlying adjusted EBITDA margin for solid waste collection transfer and disposal revenue was up an estimated 60 basis points year-over-year. Moreover, as noted in prior quarters, these results include about a 20-basis point impact from our increased 401(k) match, which will anniversary at year-end. Fuel expense in Q3 was about 3.8% of revenue and we averaged approximately $2.61 for diesel in the quarter, which was down about $0.11 from the year ago period and down about $0.05 sequentially from Q2. Depreciation and amortization expense for the third quarter was 13.4% of revenue, down 30 basis points year-over-year and about 10 basis points below our outlook on higher than expected revenue in the period. Interest expense in the quarter increased by 4.7 million over the prior year period to 36.8 million, due to the combination of higher total borrowings and higher interest rates as compared to the prior year period. Including higher interest income from invested cash balances, net interest expense increased by 4.1…

Thank you, Mary Anne. We’re extremely pleased with our year-to-date performance, particularly given the ongoing high margin headwinds from commodity-related activities. With our year-to-date adjusted free cash flow up almost 13% year-over-year we're firmly on track to meet or exceed the updated full-year adjusted free cash flow outlook we provided in July. We just announced another double-digit percentage increase of our regularly, quarterly cash dividend and remain well-positioned for potential significant increase in acquisition outlays later this quarter or early next year. Although we won’t provide our formal outlook for 2020 until next February, we’re able to provide some early thoughts assuming no change in the current economic environment. In summary, we believe that we could enter 2020 in a similar position to have started 2019 when we provided our outlook this past February at which time, we had approximately 200 million in revenue contribution in place from acquisitions, plus the potential for additional contribution from an active pipeline. Similarly, on organic growth, we believe that we remain in a price led solid waste organic growth range of between 4% and 6%, which should continue to drive underlying margin expansion in solid waste collection, transfer, and disposal in the upcoming year. Price is expected to remain around 5%, and our volume should reflect underlying trends in the macro economy. We're mindful of the protracted nature of the economic recovery, which has driven increasingly challenging year-over-year volume comparisons and therefore we believe it is prudent to remain guarded in our outlook for volume growth. All in, this could result in a potential top line growth for 2020 of between 8% and 10% from solid waste organic growth and acquisition contribution that could already be in place early in the New Year. At current recycled commodity and landfill gas values, the 2020 headwinds would be less than half of what we experienced in 2019 within a recovery in such values reducing that impact. We expect to have better visibility on the tone of the economy and expected acquisition contribution E&P waste activity and commodity driven revenue in February when we provide our formal outlook for the upcoming year. We appreciate your time today. I will now turn this call over to the operator to open up the lines for your questions. Operator?

Thank you. [Operator Instructions] And our first question comes from the line of Tyler Brown with Raymond James. Please proceed with your question.

Hi, good morning everyone.

Hi, good morning, Tyler.

Hi, Tyler.

Hi, Worthing. So, appreciate the color on the landfill tonnage, but I was wondering how pricing has been trending at the landfill, specifically MSW financial pricing? It just feels like there's some industry-wide there.

Yes. Obviously, the pricing varies by region in the country, right. Some regions are seeing what I would call 2x the average [Technical Difficulty] average right now is running about 3% and in some parts of the country you see that running as high as 5% or 6%.

Okay. That’s great. And then, just – I'm a little unclear on the landfill purchase, so will there be some CapEx associated with that landfill build out in 2020? And then, would it be an EBITDA contributor in 2021? Is that right, what do you think about it?

Yes. First, I agree with the confusion around it because, you know, in the old days, you know, that was treated as an acquisition outlay, but GAAP changed in 2008 to require us to book it as CapEx for acquisitions. So, while the nomenclature has changed, you know, the purpose of the outlay was to acquire new landfill. We’ll commence construction of that in the second half of next year. We’ll probably spend about $5 million or so in the calendar year next year and a little bit the following year to get it going. We expect that to be up and running in the first half of 2021.

Okay. That's very helpful. And then, Mary Anne, so, you know, and I appreciate the color on 2020, but to put a final point on it, just based on the M&A that you’ve done to-date, how should we [price mark] the roll over benefit to revenue next year from M&A?

Sure. So, on the M&A done to-date, $160 million acquired revenue in 2019 is about 1% roll over into next year, so about $55 million and that’s – about two thirds of it in Q1 with the balance in Q2. So, the drag – you know the drag to margins is about 10 basis points.

Right. Okay, great. And then, just a few baseline, the commodities where they are today in the RIM prices, would that be maybe a collective $25 million drag to EBITDA next year? Is that too much or too little?

No, that's a good way to think about at it. I’d say about 20 million in revenue and about 25 million in EBITDA.

For the combination of recycling and RIMs.

That’s correct.

Okay.

But most of that …

And again, heavily weighted in the first half of the year.

Right, right. Okay. Alright, I appreciate the time. Thanks.

And our next question comes from the line of Sean Eastman with KeyBanc Capital Markets. Please proceed with your question.

Hi, team. Thanks for taking my questions. First one for me is just on the E&P side, you guys have provided this $55 million to $60 million quarterly revenue run rate for the fourth quarter I believe you said. I’m just wondering how we’re looking into 2020 relative to that run rate? You know, I guess its assuming rig counts don’t continue to dribble down, is that kind of a number that should be sustainable into next year?

Yes. I mean we’re – we may be settling into that $55 million to $60 million if crude stays around that $55 to $57 a barrel. You know, I’ve always thought we’re one missile away from crude hitting [80], but two dozen [missiles flied] a few months ago when crude went down. So, it’s hard to call the trajectory of crude oil these days, but we do seem to be in that $55 million to $60 million range for the time being.

And then, you know, with the EBITDA implication around moving down into that $55 million to $60 million run rate on the revenue into next year?

Sure. Well, Sean, as you know it’s very high incrementals, and therefore, decrementals in E&P. the way to think about it would be about 70%, you know, EBITDA impact.

Okay, thanks. Okay. And then, on your acquisition contribution, I think, you guys said you could get to 8% to 10% topline all-in by the time you give formal guidance in 4Q. I think you guys have pretty much got 1% acquisition growth locked in for next year at this point. So, I just wondering, you know, maybe if you can parse out that 8% to 10% a little bit between the organic piece and acquisitions and maybe between price and volume? You know as much color as you would give would be great.

Sure. As we said, we’re in a 5% type of range on price and, you know, again, absent any other changes, we don't see why it wouldn’t be similar to that. And then, as you know, we – our volumes will reflect the tone of the underlying economy and activity level as we said. So, you know, we consider ourselves in the band of, you know, call it plus or minus one there gets you to the 4% to 6% organic growth rate that we talked about. So, that’s what’s implied by that. On top of that, as you said, we have 1% roll over contributions from acquisitions already in place, so that implies, as Worthing said, if we came into the year similar to last year, we could see another 3% in acquisition contribution, potentially as we enter the year. We’ll certainly know more in February, Sean, when we give our formal guidance.

But as we also said on the – in our prepared remarks, there’s a higher probability that would be in place by the time we give our guidance in February, so there are many additional acquisition activity for the remainder of the year, which as most of the year we’ll provide further upside to that.

Okay, thanks very much. I appreciate it.

And our next question comes from the line of Michael Hoffman with Stifel. Please proceed with your question.

Thank you very much for taking the questions. On free cash flow, am I thinking about this correctly, so you’re reaffirming the 915 million, but it includes $35 million for a contract win so the base run rate is $950 million? So, I think about your next year as starting on $950 million and then whatever the opportunity is?

That’s the way to give the math on the baseline here, that’s right.

Okay. And then, I get the noise around the RINs recycling and the prudence on E&P, I mean technically, you gave new guidance of $1.675 billion for EBITDA and now we’re looking at probably $1.660 billion is sort of the way to think of the year based on the fourth quarter?

Well if you look at the – taking the context of the entire half of the year, second half of the year, you know, that would be on that guided EBITDA. That’s, you know, 1%, 1.5% below the guided EBITDA, implied guided EBITDA for the second half of the year. And obviously you’ve seen us beat prior quarters this year. And so, to the extent we beat this current outlook, you see us close the gap that you are referring.

Okay. And then, what is it that you can do around pricing that gives confidence to the market that 5% is a sustainable number would help everybody remember what it is you can do about your business and why 5% a good number?

Well, first thing I’d point to is the fact that within our exclusive market model, there alone, you know, we’re printing 3.5%, right and that’s a market where you have effectively no churn and 100% stickiness. And so, just right off about right there, you know, we’ve reported kind of comparably better pricing than our peers. It’s just an exclusive market portion. If you look at our competitive market portion, we have a very high percentage of that being well over contribution from what we’ve already done year-to-date in 2019. And so, that puts you – you know, probably 70%, 60% to 70% on the way to delivering all the price between our exclusive markets, as well as the roll over before the year even starts, and majority of the balance and what we do, we do it early in the year. And so, by the time we get to our February call, you know, more likely 80%, 85% of what we can do for the full-year is already done and with remaining pricing for the year, at least as scheduled based on the contracts roll over or adjust. And obviously, you’ve seen us in prior years to the extent that something surprises us and we have go out and get it, you’ve seen our folks with a discipline and the focus on execution to go and get it. We’re not at – you know we’re not anticipating much of a seismic change in price and to the extent, you know, you saw us go to 5.2% in the most recent quarter. You know, so we’ve been holding sort of around that 5% now for the past almost two years.

Okay. Thank you on that. And then, on volume, you made a point of drawing out some specific data about trends in commercial, which I think are important that if you're getting service [center upgrades] that's an underlying volume driver. You pointed out the MSW strength, so the – when you talk about a negative one to positive one for fourth quarter or for next year as a range, underlying MSW is still stable and in-line with the economy indicative of what you said in your small container business and the variability is around C&D and special waste is what I'm assuming?

Well, I think you just answered your own question, that’s right. I mean that’s what the data shows us and it’s what we called out for Q3.

Okay. I just want to make sure the market’s not grasping a hold of a possible negative volume going oh! My gosh. There’s an economic indicator here when underlying MSW, which is driven by the consumer staple.

Right. But, you know, look, we’re always cautious. Look, we were cautious about the trajectory of the economy, but we are four and five years into the recovery, and that rate here is in the recovery and our cautiousness hasn’t changed. I mean we just – we believe it’s always prudent to run a business not assuming certain growth factors. And if we do get those factors, let that all be upside.

Okay. Thanks for taking my questions.

Sure.

[Operator Instructions] And our next question comes from the line of Derek Spronck with RBC. Please proceed.

Okay. Thank you for taking my questions. Worthing, pricing in Canada at 6.6% was pretty strong; U.S. 4.8%, any differences in the two regional dynamics there?

You know, I’d say, Canada, you know, we’re through, what I would call, kind of repricing the book that we inherited three years ago. I would certainly expect the pricing strength in Canada to moderate somewhat as we look at the upcoming year. You know, it’s similar to what we see in the competitive markets within the U.S. We also moved that pricing close to the 5%. Again, hats off to our guys for making the effort over the past three years for really getting the quality of revenue in line with the cost structure and the capital needs of the business.

Okay. And acquisition multiples, are you seeing any movement on – around some of your expectations around the acquisition multiples you're looking for?

I think we’ve been consistent over the past couple of year and without a doubt, multiples have moved up, you know, [about a turn or turn and a half]. And so, we have high quality acquisitions, but [it will be franchised] a larger integrated. We’re running, you know, two and three years ago in that 8 times, 8.5 times range. When you look at the quality of the assets that are now being bought because many purchases have been invest – reinvesting in and maybe sellers have been reinvesting at a high clip in their business. So, the quality of assets has moved multiples up for those companies that do have high quality assets, about half a turn. I’d say tax law changes has probably moved it up another turn as well, and so that gets you to that kind of 10 times plus or minus at half turn for high quality operations. You know, tuck-ins, really no change in that marketplace. Those still run between 4 times and 6 times. So, the overall multiple, you know, it will pay on any kind of portfolio of outlays really dependent upon, you know, the profile of what’s done in the year.

Okay. That’s helpful. And then…

You know folks have – it’s hard to deliver meaningful value creation. You know, as you see multiples creep much higher than that. And so, you know, you get kind of indifferent on buying back stock relative to outlays above those kind of multiples.

Okay, that’s good color. Thanks, Worthing. And just a couple more quickly for me, there was a $12 million impairment charge; maybe provide a little bit color on that? And then, special waste, maybe talk a little bit about the visibility you have and why you think it was a bit of a pull forward here in the third quarter? Thanks.

Sure. So, starting with the impairment charges, as you note, Derek, as Worthing said in his prepared remarks, we decided forego the opportunity to continue pursuing an E&P project in the Bakken. So that was the majority of that write-off. That was a permit we had held for a while and it made the determination not to move forward on it in the quarter. So, that’s the impairment. And then to your question on special waste, as you know, special waste can be lumpy. Its market dependent. We saw several markets in Q3 where you had outsized activity. You know in Q2, we talked about outsized special waste that may have been pent-up from earlier in the year. When you come through a few quarters like that where you don't see additional project backfilling, you – that’s when you tend to be more cautious and that’s what we’re facing right now. And so, when we look at tougher comps year-over-year in several market, and as I said, just having come through some, you know, increases in activity in those market that Worthing mentioned, included in the Midwest and Minneapolis and the Colorado market where we’ve had strong special waste for several quarters, we’re just cautious entering Q4 until we see the additional activity come.

Okay. Makes sense. Thanks, Worthing, and thanks, Mary Anne. I’ll turn it over.

Sure.

And our next question comes from Brian Maguire with Goldman Sachs. Please proceed with your question.

Good morning, everyone.

Hi, good morning.

Worthing, I was hoping to get an update on the progress on on-bordering some of those new contract wins you talked about last quarter. I know you spent some CapEx on it this year. Just wanted on how that progress is going and would you still expect that to be – I think you talked about a 40-basis point to 50-basis point benefit for volumes next year. Would that number be additive to the comments you made earlier about kind of the overall volume next year, you know, being in line with the overall economy, is that – you know there’s any business wins added to that? Or is that kind of included in that volume comment?

Yes. That’s the first half looking into next year when we say overall 4% to 6% and organic growth in the price plus volume with five of that being price. The good news is to your point, you’re right. We’ve already spotted, you know, 40 basis points to 50 basis points of volume growth because of those contract wins. And so, kind of that encourages me to think that, you know, we’re at the midpoint or better of that 4% to 6% range. But again, we’re not in 2020 yet. You know one of the contracts that’s in that we’re in the startup period right now on that. You know again, our folks in that marketplace have done a fantastic job going from no presence in the market and a cold start to get in the trucks, get in the containers, on-boarding, you know, whole new set of employees and successfully rolling out that contract, and you know, the first quarter is always the most challenging quarter in that, so we’re cautious about that. But I’d tell you, you know, when that thing turned on, our guys did a phenomenal job in the marketplace. And so, you're already seeing the benefit of one of those starting off here in Q4.

Okay, great. And I appreciate the color on volume and pricing for 2020. Any thoughts on where cost inflation might go? Or maybe kind of an exit rate as we’re leaving 2019 on contemplation?

You know, we’re still seeing – first I’d say the all-in wage escalation in 2020 should not be as heavy as we’re seeing in 2019 because part of wage escalation we’re seeing in 2019 is our 100% match in 401(k) right and that was – that’s been about 20 basis points drag on the overall margins of the company this year as we went till 100% match this year on 401(k) contributions. But if you strip that away for a second, because that will be a tailwind in 2020 on the actual wage escalations alone, you know there’s still – you know it can be ranging between 3% and 6% depending upon, you know, their profile, their position within the company or the region of the country its operating in. So, borrowing, you know, let something changes in the macro that, you know, or an immigration law, which I don't expect next year, you know, I don’t see any foreseeable change in the pressures on wages themselves.

Okay. Just last one for me, you know, based on the comments about the acquisitions being like 55 basis point drag on margins, it looks like those acquisitions are coming in at about a 23.5% EBITDA margin. Assuming that sounds about right, is that sort of representative of what we should expect on acquisitions in the current environment? And are the deals you’re doing today any different or better or worse than the deals you’ve done historically?

Yes. It really depends on the profile. First off, you’re right on what we’ve bought because the vast majority of what’s in the current numbers is collection-oriented, and as you know, collections can run in that 22% to 25% range depending upon the – part of the country. In some parts of the country, collection only can run, you know, 30% plus. So, it also depends on where we’re getting those collection deals done. You know, as Mary Anne said, we’re going to the year with about 1% topline growth on deals done to-date. That’s about 10 basis points drag as you look at next year's numbers from a margin standpoint. The pipeline right now is across the board. You know, there's collection-only that runs in the low-to-mid 20s. There's some integrated that run 30 plus. There’s some collection-only that runs 30 plus as well. And so, again, it’s not uncommon as you think about acquisitions in general where acquisitions that come in at margins that are lower than our integrated profile, and we generally move those margins up a little over time, but, you know, the entry – it’s hard to bring a 24% company to a 31% company, right, and maybe 24% becomes 26% in two or three years, but, you know, the – again the impact of margins next year will depend on a profile of what we announced in February.

Alright, thanks for the color.

And our next question comes from the line of Noah Kaye with Oppenheimer. Please proceed with your question.

Thanks. Hey, Worthing, just a follow-up on that last point. You gave good on the acquisition pipeline, but just so we understand, no super large targets I would imagine in there right in terms of, you know, potential acquired revenues. Imagine this is a fairly diversified mix that you have the $600 million in offers [indiscernible]?

Yes. I mean you’ve got, you know, companies as small as, you know, $10 million to $15 million, you split in couples of small traditional tuck-ins. You’ve got some new market entries that are $30 million to $40 million and, you know, a couple of them that we’re looking at there are potentially larger than that. But nothing – you know nothing like in America that’s $200 million -- $180 million or $200 million in revenue that we’re looking at right now. And again, you know, that – look, and we talk about things that we’re looking at. Obviously, we don't control anything that’s happening with advanced disposal. And so, nothing we talk about from a pipeline or from anything else like that whatever, including that’s that are around advanced.

Yes. Thanks for clarifying that for us. And then that kind of feeds into this next question around capital allocation, you mentioned it earlier, but, you know, I think even if you continue to spend this robust level on M&A that you're talking about, you know, your leverage is still going to be kind of on the lower end of what it’s been historically, and I know you’re not really constrained or dictated by leverage, but, you know, at what point do you feel it’s going to make sense to at least resume some share buybacks just given your comments earlier?

Sure. We’ve been consistent over the past couple of years noting that we thought 2017 through 2020 would be periods of outsized M&A activity, and obviously, it’s uncertain how much we lay out, but, you know, we’ve been laying out in some cases $1 billion a year. And so, we feel fortunate in that. We’re able to make those outlays and still drive leverage lower number one. Number two, you know, it’s still not clear to us whether we spend, you know, $0.5 billion in the next 12 months or spend $1.5 billion in the next 12 months. And so, we – as we like the flexibility, we have around deploying our capital for properly priced and strategically consistent M&A and that remains no different. But obviously we’ll recognize that stock market doesn’t always go up into the right. I mean, it’s even [indiscernible] what happens if the Fed doesn't increase or decrease rates this coming week and what does that mean in the stock market? And so, by the way, it’s just – put simply it means that, you know, we like to step in and buy our stock when there is blood on the screen, and, you know, stocks dislocate, and, you know, we’ll just be patient around that. We’re the ultimate long-term holder of our stock and we can pick our stocks around that. But we do agree as say in the press release and in our prepared remarks that you’ll see us increase the majority of capital shareholders and that will be through optimistic share repurchases, and obviously at our low leverage, we can easily spend $1 billion to $1.5 billion on acquisitions and still spend $1 billion plus on stock repurchase if we wanted to and stay comfortably within any leverage targets that we have. So, we’re very fortunate in our flexibility.

Yes. Thanks very much for the color.

[Operator Instructions] And our next question comes from the line of Mark Neville with Scotiabank. Please proceed with your question.

Hi, good morning. I apologize, I just – as there's a few numbers I missed. I mean, I think you hit in a few in the prior question, but in terms of the M&A outlay, there is, I think you said $600 million of potential or outlays or offers made currently, which if hits would be sort of 3% revenue accretive for next year, do I have those numbers right?

Right. What we said was its already in place, about 1% roll over contribution from deals that we closed.

Right.

And then we said there’s a potential for that much more. That’s the right way to think about it, yes.

Okay. And that's tied to the $600 million, which again, the diversified mix and none of the advanced in there in terms of the pipeline?

That's correct.

Yes, okay. Okay. Maybe just on the margin for next year, again, you've said underlying expansion, so when I think about it, a 20 basis point sort of bounce in the absence of the 401 match, 10 basis point hit from rollover of M&A, so you’re sort of [10] and [indiscernible] you’ll get sort of pricing volume sort of lands where we may [indiscernible] is that – again, that's how to think about it?

Sure. That’s a fair way to think about it. And I’d remind you that for, instance, in Q3, we said the underlying margins in solid waste collection transfer and disposal were up about 60 basis points. Then of course, you’d want to layer in whatever your view is on RIMs and recycle commodities and, you know, what that does in current levels or whether or whatever you’re forecasting, and then, of course your E&P expectations will also impact margin, but those are the pieces, yes.

And the recycling this quarter was an 80-basis point hit?

That’s correct. Remember as we said, there is not only the decrease in the revenue associated with the sale of recycle commodities, but then, we actually have incremental expenses on top of that associated with third-party fees and the cost to get rid of some of the commodities, and that’s where you saw the decrementals of about 150% on that $9 million or $10 million decrease year-over-year in recycle commodities.

And we said that next year, the headwind is less than half of it for the full-year, which means it is probably all of that for the first half of the year or thereabouts because of the rollover and then assuming zero drag in the second half of the years were slightly positive.

Okay. I mean, I can go back and check my numbers, but what would be sort of, again the half sort of headwinds, and what would be sort of the anticipated full-year hit this year from sort of recycling and the RIM?

Sure. So, if I were to just look at recycling and RIMs at current levels, the headwinds for next year is about 20 million to 25 million. So, that’s revenue and EBITDA. Again, the EBITDA being a little worse than the revenue as I described.

And this year’s headwind was more than twice that.

That’s correct.

Okay. I’m sorry, I also missed the Q4 adjusted EBITDA guide.

That’s 405 million.

Okay. Alright, thank you for taking my questions.

Sure.

And Mr. Jackman, there are no other questions at this time, I will turn the call back over to you.

Terrific. Well, if there are no further questions, on behalf of our entire management team we appreciate your listening to and interest in the call today. Mary Anne and I are available today to answer any direct questions that we did not cover that we’re allowed to answer under Reg FD, Reg G, and the Applicable Securities Laws in Canada. We thank you again for your interest and we look forward to speaking with you at an upcoming investor conference, or on our next earnings call. Thank you.

That you. That does conclude the call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day.