[Call Started Abruptly] future events and developments or otherwise. This call will include the discussion of certain non-IFRS measures, a reconciliation of these non-IFRS measures can be found in our filings with the Canadian U.S. Securities Regulators. I will now turn the call back over to Patrick who will start off on page 3 of the presentation..

Thank you, Luke. I would like to start by thanking all of you both equity and debt investors for sticking with through one of the biggest stock market decline since the Great Depressions. Given management's equity ownership we are in this together for the long haul to continue increasing shareholder value over the years to come.

When we took GFO public at the beginning of March none of us thought we were at the start of unprecedented global health crisis that has brought the personal and economic disruptions that we have seen from the shut-downs and other measures taken by governments across North America to stop the spread of COVID-19.

Despite the significant impact on general economic activity resulting from these measures we delivered an exceptionally strong quarter growing adjusted EBITDA by merely 25% to $223 million and completing over $1 billion in M&A in the quarter.

When we were on the road for the IPO in February our recurring message was about GFL's resilient growth profile. Our first quarter results are testament to our ability to deliver on that profile. Let me first and foremost importantly that none other success in managing through the pandemic would be possible without our employees.

Our top priorities since the start of this crisis was and as we began to navigate through the loosening of government restrictions continues to be ensuring the health and safety of our more than 13,000 employees.

To protect our employees we took an immediate steps including setting up risk management teams of our senior leadership and operational leads to identify, assess and respond to the changing internal and external dynamics on a daily basis and to provide real time direction for the fields to address issues as they arose.

We had implemented and continues to follow physical distancing protocols as recommended by public health authorities across all of our operations, including work from home arrangements were appropriate and we had limited all non-essential travel.

We have invested in hand [PPE] and sanitation practices and increase the frequency and depth of cleaning our facilities and our high [indiscernible] services at all of our facilities As an essential service many of our frontline employees have continued to come to work every day and the measures that we have implemented proven successful in keeping them safe.

The loyalty and dedication of our employees have continued to deliver our essential service during this unprecedented times is truly inspiring and something for which I am extremely grateful for. We have also been touched by the over-pouring of support from our employee shown by our customers and communities.

We have in turn, given back to our communities by continuing our financial support of local charities including through our first of our full circle project and the donations to local hospitals of medical grade [indiscernible] that we had sought to support local healthcare workers.

In terms of COVID-19, on our financial results for the quarter, the impacts we saw vary greatly by market and were largely depend on the characteristics of the rules of the shutdown that were imposed in each market.

The COVID-19 related impact on our solid waste revenue in Q1 was mostly attributable to the reduced of volume in our commercial and industrial collection business during the last two weeks of March. Restricted economic activity from regional shutdowns reduced demand for our ICI collection services.

With the timing and scope of the shutdowns driving the magnitude of their impact on revenue in each of the affected markets, our residential collection business held up very well and actually outperformed in most Canadian markets where we are paid by the time under municipal contracts.

Also a relatively lower proportion of our revenues coming from volume-based closed collection activities mitigating the overall revenue impact from the reduction in C and D and special waste volumes into our landfills in the quarter.

We saw the greatest volume impacts in the primary markets in which we operate, most notably Toronto and Montreal where stay at home orders were put in place earlier than other markets and covered a broader scope of service offerings.

Volumes in our secondary markets where we generated almost two-thirds of our solid waste revenues were far less impacted. Our pricing during the first quarter was very strong contributing 4.9% to revenue growth.

We continue to see pricing discipline in the industry and as of now we have not experienced any significant pricing related impacts from COVID.

As we said on our investor call in April because of the high proportion of our revenues coming from our service-based collection, we have highly variable cost structure, as volume slowed we reduced our operating cost by consolidating collection routes, parking trucks and reducing overtime hours while our disposal costs are, [indiscernible] and fuel costs naturally flex down with reduced volumes.

At the same time we reorganized our workforce across our service offerings and business lines to minimize the disruption to our employees. Because of our focus on the safety of our employees we did incur incremental cost in the quarter for the enhanced safety and hygiene protocols that we implemented that I described earlier.

We also looked at our SG&A cost and significantly reduced discretionary spending there as well. We have eliminated substantially all travel and entertainment costs as we postponed annual merit increase for salaried employees but not for our hourly employees until we have greater clarity on the impact of the virus on our operations.

We have taken these measures to avoid incremental headcount reductions recognizing that our employees are our number one asset and we want to continue having our engaged workforce ready to carry on once we get on the other side of this pandemic.

On capital expenditures, we have evaluated what can be eliminated or preferred for the remainder of the year. During the IPO Roadshow the view for 2020 was a total spend of approximately $440 million on capital expenditures, which included a significant component of discretionary replacement in growth capital.

As we have said before because of our relatively lower landfill concentration our replacement CapEx needs run at approximately 8% of revenue. And looking at our 2020 spend, we've identified $100 million of spend that we can eliminate for this year if we need to. Our actual spend will depend on how things evolve over the rest of the year.

We plan to continue to capitalize on attractive opportunities that may arise and like we have seen in the past, we expect that crisis will generate opportunity but we have this lever available to us ultimately to mitigate the impacts of a free cash flow line for the year if we need to use it.

In terms of M&A, we completed eight acquisitions during the quarter. Five of these contemplated at the time of the IPO including County and American waste and we closed three additional tuck-in acquisitions around the beginning of March.

We deployed $1.1 billion of capital on County and American and approximately 70 million of capital on the six tuck-in acquisitions. Although there have been some delays because of COVID-related travel restrictions, the integration of both County and American are progressing very well.

With the highly successful financing that we completed last month we have over $1.3 billion in liquidity and are ready to capitalize on opportunities as they arise.

We have temporarily delayed the closing of a few smaller tuck-in acquisitions since the onset of the pandemic but we continue to progress on several opportunities and our pipeline continues to be robust. Our focus on creating long-term shareholder value has not changed.

As we saw in managing through the downturns in 2008 and 09 and again in 2015 and ‘16 in Canada times of uncertainty and increased volatility can create great opportunities.

We expect that having a strong balance sheet, a flexible capital structure and a very supportive group of both equity debt investors will position well to capitalize on these opportunities as they continue to arise. I will now pass it over to Luke who will discuss the financial results for the quarter..

Thanks Patrick. Turning to slide four on the presentation, revenue for the quarter was $931.3 million, a 29% increase compared to the prior year. Revenue from new acquisitions accounted for approximately $180 million of the increase with the balance of the growth coming from organic price and volume.

I will walk through the details of the price and volume growth by segments on the following page. Cost of sales as a percentage of revenue was 91.5%. Under IFRS depreciation amortization expense related operations as recognized within cost of sales.

Cost of sales excluding G&A and acquisition related cost was 67.5% of revenue as compared to 66.5% in the prior period. The year-over-year change is primarily attributable to the impact of acquisitions both in terms of business mix and margin profile.

The one extra day in 2020 attributable to the leap year also increased total cost of sales in amount and in percentage. Fuel cost as a percentage of revenue were 4.5% compared to 5% in the prior period; a decrease attributable to both revenue mix and diesel prices.

Diesel costs vary by region but were down approximately $0.04 as compared to the prior year. Commodity prices were down approximately 32% period-over-period which resulted in higher amounts paid to third-party processors of our recyclable volumes.

COVID related impacts including decremental margins on volume losses, incremental equipment rentals expense in our infrastructure business attributable to delays in receiving equipment and additional spending on enhanced safety and hygiene activities also increased cost of sales.

SG&A expense excluding IPO and acquisition transaction cost and depreciation expense. again IFRS requires us to recognize depreciation expense with SG&A was $96.7 million for the quarter or 10.4% as a percentage of revenue.

Total G&A expense was $221.8 million a period-over-period increase of $47 million which was driven by the incremental G&A expense associated with tangible and intangible assets acquired organically and through M&A since the prior period.

Interests and other finance costs were $269.4 million, an increase of $145.5 million as compared to the prior year. The increase is primarily attributable to refinancing costs incurred in relation to the IPO all of which were contemplated in the IPO offering documents.

The change in other income and expenses is primarily attributable to the non-cash foreign exchange fluctuations on our U.S. dollar denominated term loan and the mark-to-market revaluation of the purchase contract component of our tangible equity units.

With respect to income taxes, the change in the deferred tax recovery is largely attributable to the cost and credit respective to IPO, for current income taxes we continue to have minimal cash tax obligations. GAAP net loss was $0.77 as compared to a net loss per share of $0.64 in the prior period. On an adjusted basis net loss per share was $0.3.

Turning to page five, you'll notice summary of results by operating segments. In solid waste price and surcharges drove 4.9% growth as compared to 4% in the prior year period.

As we told you before, our focus on pricing is going to lead to incremental growth from this lever as compared to prior periods and this quarter’s results are a testament to that. As we've also told you our pricing activities are front-end loaded so this level of [PI] will taper down throughout the year.

Volume for the quarter was negative 0.1% but the volume story needs to be split into a couple of parts to be fully understood. First, volume for the first 10 weeks of the year was running positive 100 basis points. So we view this entirely as a COVID related impact.

Second the volume decline is largely attributable to our commercial industrial collection businesses as residential collection and the majority of our post collection businesses were positive or flat in March.

And third that declines very significantly by market with the Montreal and Toronto market seeing double-digit decreases starting in mid-March as compared to the prior year.

Current trends, however appear promising with sequential volume increases week after week and Patrick will speak more to that in a moment but these were the impacts we realized in the last few weeks of the quarter. Solid waste adjusted EBITDA margin was 28.5% for the quarter compared to 20.9% in the prior year.

Included in the current quarter margin is a 50 basis point declines in the extra leap day, a 40 basis point rise from commodity pricing and about 120 basis points derived from acquisitions. A decrease primarily attributable Canada Fibres acquisition that has yet to achieve the anticipated margin profile.

Excluding these items the base solid waste business drove nearly a 150 basis of organic margin expansion over the prior year consistent with our previously communicated expectations regarding the anticipated impact of our pricing and procurement initiatives both of which we've discussed with you in the past.

The disruptions from COVID both in terms of loss margin on volume declines and incremental health and safety related costs also served as a headwind to margins.

Looking at soil and infrastructure, the success of our previously discussed strategy continues to be demonstrated as we realize 6% organic revenue growth during the quarter despite certain projects being disrupted and/or put on hold in response to the government imposed COVID mitigation measures.

In terms of margins, the prior quarter benefited from several high margin specialty projects that did not repeat in the current quarter. Also delays in the acquisition of planned equipment purchases to support the growth of the infrastructure and soil remediation business resulted in increased equipment rental costs as compared to the prior quarter.

We believe these impacts to be the timing related and the margin profile the business will return to the historical trajectory in subsequent quarters. Our liquid waste business was our most impacted segment during the first quarter.

Revenue was impacted by not only COVID related volume disruptions but also depressed WTI prices and the impact on the used [motor oil] market as well as some difficult comps in the prior quarter where we benefited from an increased level high margin emergency response activities and a bulk sale of inventory of used motor oil that we had acquired in an acquisition in late 2018.

Used motor oil selling prices were down 19% in Canada and 12% in the U.S. in the quarter while we've modified our change for oil rates to mitigate the ultimate spread compression there's a time lag which ultimately impacts current period results. While volume sold in Canada were relatively comparable to the prior period U.S.

volumes were down 45% when considering the bulk sale in the prior period. Collected volumes in the quarter were down approximately 25% compared to the prior year, a decrease we believe is attributable of the COVID-19 disruptions.

Turning to page 6, reported cash flows from operating activities where use of $91.3 million in the current quarter as compared to $19.4 million in the comparable period of the prior year. The change was primarily attributable to costs incurred in connection with the IPO of $145 million.

Excluding these IPO costs and the changes in non-cash working capital cash flows from operating activities were positive of $108 million, an increase of 34% compared to the prior period that's attributable to the increase in adjusted EBITDA. On the point of working capital, we've yet to see any material impacts on cash collection activities.

We are actively monitoring our credit exposures but to-date have not seen any material changes. We did hold onto cash during the end of March pushing up AP balances at month end.

In terms of investing activities, as Patrick mentioned, we spent $1.1 billion on M&A during the quarter, the substantial majority of which was contemplated in the IPO offering documents. We also spent a $100 million on capital expenditures in the period which was below plan to delays and receiving certain equipment from overseas.

Cash flow from operating activities less capital expenditures was a use of $46 million from excluding the IPO cost; an improvement of 61% over the prior period.

As we've said before, the seasonality of our business coupled with the front-end loading of our CapEx results in a free cash flow of being generating in back half of the year with the IPO transaction cost behind us and our significantly reduced interest cost going forward we see a clear path to material free cash flow generation by the end of the year.

Cash flow from financing activities were the outcome of the IPO and the pre-closing capital transactions all of which were detailed in our perspectives. Additionally, subsequent to quarter end we issued a new U.S. $500 million, 4.25% five-year notes.

This was an opportunistic financing that lowered our overall interest cost and bolstered our liquidity which positions us favorably to capitalize on any opportunities that may arise. Turning to page 7, we have presented a summary of our net leverage at the end of the quarter.

As forecasted in the IPO offering documents net debt and net leverage materially decreased as a result of the application of the IPO proceeds to debt repayment. Substantially all of our long-term debt is denominated in U.S. and is hedged to Canadian at fixed rates. However, for financial reporting purposes our U.S.

dollar denominated debt is revalued to Canadian dollars at the FX rate at the end of the period.

During periods of foreign exchange volatility such as that we experienced during the end of the first quarter we may realize significant non-cash foreign exchange adjustments on our balance sheet that are in excess of the foreign exchange fluctuations realized on our P&L.

The foreign exchange rate was 1.42 at quarter end as compared to 1.3 at year-end, a change that resulted in incremental $395 million of long-term debt recognized on our balance sheet.

To facilitate the comparison of net leverage to the amounts that were presented as part of the IPO Roadshow we have presented our quarter and long term debt balances translated to U.S. dollars using the year-end foreign exchange rate which you can see in the middle column of the net leverage amount approximately 4 times at the end of the quarter.

Not reflected on this balance sheet is April bond offering which was a leverage neutral transaction. Considering that transaction we have over $1.3 billion of liquidity on hand with no material debt maturities in the near term. I will now pass it back to Patrick who will discuss the trends that we were seeing in the business..

Thank you, Luke. Despite the great first quarter I know everyone is more interested in what we think the second quarter and the balance of the year are going to look like.

Unfortunately, with the degree of uncertainty that still exists around the reopening of markets it's difficult to forecast with a great deal of precision as to what the future holds. However, the current trends appear promising so we want to shed some light on what we are currently seeing.

If you look at page 8 as noted in our press release April revenue was up 16% when compared to April of 2019. If you back out the M&A and FX adjustments we saw a 9.9% revenue decline on a like-for-like basis.

Looking at solid waste as I said earlier there the greater disparity and the COVID related impacts by market with our Canadian ICI business seeing the declines nearly 4 times greater than in our more secondary market focused promotional industrial business in the U.S. and Canada.

The impact of Canadian revenue is primarily the result of business shutdowns in Ontario, Quebec and British Columbia. I think it's important to emphasize that the revenues impacts we saw in April are heavily weighted towards our commercial and industrial collection volumes. Our municipal revenue in both Canada and U.S.

has not been significantly impacted and are relatively low landfill revenue translate to a lesser impact from the lost volume in that line of business.

So if you look at the activity is in the ICI and collection business starting the third week of March we saw [rolla] halts start to decline week over week until approximately the beginning of the third week of April at which point halts were down approximately 18% compared to the pre-COVID week.

Since the third week of April however we have seen weekly halt counts increase sequentially and although we are still not at the levels we saw in early March we are moving in the right direction day by day. It is a similar story to look at our commercial collection activity.

Starting in the second week of March we were seeing service level decreases and temporary suspensions and the decrease is increased sequentially through to mid-April. Since then we are now having customers re-engaged as they're preparing to reopen which is another sign we perceive as an indicating the worst is behind us.

Working in our daily trackers we expect this week's ICI collection revenues to show an increase over last week and next week to be even better assuming that the government's continue to loosen restrictions on the time table that have been announced.

Again ultimately only time will tell the full extent of the impact but from where we sit today we're feeling cautiously optimistic. Thinking about how these revenues impacts translates the margin, I think there's a few points that need to be teased out.

First is the revenue profile of our business with a larger proportion coming from the service based collection activities our lower level concentration results in a lower blended decremental margin impact than if we had a meaningful portion of our revenue defined tied to our very high margin landfill volumes.

As I said earlier, tied into that point, it’s the highly variable cost structure that comes with our revenue profile. Since this began we have reduced overtime hours by approximately 30%.

We have consolidated collection collecting routes and parked vehicles to improve asset utilization and in many markets of experience improved productivity thanks to reduced traffic patterns. Our safety stats have also improved with April being the best month of the year and our absenteeism is at all time lows.

All of these factors together with natural flex of our disposal costs RNM and fuel costs that I described earlier will contribute to mitigate the impact on margin on the revenue decline resulting from COVID related volume reductions. Finally, we have some macro tailwinds which we believe will further mitigate the margin impacts.

As you've heard from others commodities have had significant run over the past six weeks. With OCC commanding over $200 a ton in certain markets.

Fuel costs continue to be at historical lows which provides a margin benefiting both our residential and post collection service lines and FX continues to be higher than last year which improves our blended margin profile by translating the relatively higher margin U.S. business into Canadian dollars at a higher rate.

Looking at infrastructure and solar mediation as we have previously said the majority of the projects we are involved in have been deemed essential services and continue to progress. Based on what we're seeing today it's looking like May will be better than April and hopefully that trend continues.

And finally, on liquid waste as we previously told you we expect this segment will be the most impacted by the current market conditions.

On the used motor oil collection side of the business suppression of the oil related indices on which used oil selling prices are based combined with the reduced volumes being generated as a result of COVID-related shutdowns will continue to negatively impact revenues from this service line in the near term.

Regarding the core industrial service component of the business COVID related shutdowns have had a negative impact on the portion of our customer base which should have been deemed non-essential and therefore temporarily shut down in many markets.

The ultimate impact will depend on the nature and shape of the recovery in each of the markets we service but again the trend line we are seeing today continues to be very positive and encouraging.

Before we open it up for questions, I want to end by saying thank you to all of the GFL employees who deserve all the credit for a great results in the quarter and to all the investors who support us on the IPO and since then. We thank you for your time and look forward to speaking with you as the quarters continue to come.

I will now turn the call over to the operator to open it up for any questions..

Thank you. [Operator Instructions] We'll take our first question from Tyler Brown with Raymond James..

Hey good morning guys..

Good morning, Tyler..

Good morning. Hey, appreciate the April details but I do want to come back to the comments on pricing. I think the 4.9% pricing was quite strong. You kind of touched on it, the big picture it feels that over the past couple years pricing has accelerated.

So I was hoping that you could talk a little bit about your go-to-market strategy and maybe philosophy around pricing as that changed with time and maybe should we be expecting this general level of pricing into the future?.

Yes. So I mean as we've discussed in the past, I mean previous to 2018 we did spend five minutes focusing on price as we were building the business.

There was a, we were much, there was much more of a cadence or growing volume and growing market share versus growing price and then post the acquisition of waste industries and watching how they increase the margins from sort of 23% to 24% up to sort of 27.5% to 28.5%, we took that playbook and started rationalizing our entire book of business in the nine provinces in Canada and 23 States in the US.

So pricing continues to be strong. I think as we've rationalized the existing book and level set that existing book we're going to continue being focused on prices as we've discussed in the past..

Yes. Okay. That's great to hear and then Luke so, I appreciate the comments that you have a highly variable cost model but there's a lot of moving pieces here.

So maybe to boil it down for simple people like me, could you run through at a high level maybe an incremental/decremental type of margin that we should think about by line?.

Yes. I mean there's a lot of moving pieces Tyler as you said, but I mean if you take the residential line out of the equation, I mean this probably puts or takes as we said on our April update call and in Canada maybe we're getting a little bit of benefit but in the U.S.

maybe it loads a little bit of heavier and so maybe you think about the residential from a margin profile as a bit of a wash. So then left with commercial and industrial, obviously the industrial or the roll-off line of business easier to flex by nature of the route days and what those look like.

So if you look at the amount of trucks and how quickly we can park the vehicles and therefore defray all of that, engine hour related cost, much more variable cost structure on that line and therefore a better ability to mitigate the sort of margin versus commercial while we have been parking some trucks in the markets that have been most significantly impacted as you know not as nimble to flex the operating structure of those routes and so you eat that a little bit more.

So and that collection and you think about a relatively lower landfill concentration, I mean you listen to all the others everyone is saying somewhere in the sort of 30% to 40% decrementals on a blended is what this margin is looking like.

I think given our cost structure we're on the lower end of that range but again it’s market specific and there's other factors that are offsetting some of this pain as Patrick said the lower traffic patterns as well as diesel we're getting some benefits from that.

So I think it's difficult to model it perfectly solid but hopefully that's helpful directional lines..

Yes. Sorry I was not much within solid waste but about the liquids and soil piece would those be 20% decremental, good way to think about it 25 something like that. A - Luke Pelosi I mean you're not giving too much forward again, if you look at infrastructure I don't really see margin decreasing coming from that sort of line of business.

I mean that cost structure flexes very well. On the liquid side, I think when you think that sort of what we're seeing, yes I think a reasonable number on the liquidity side is probably short of 25% today, when I sort of look at April and if that's the work that's going to get hopefully gets better from there but that's what we're seeing today. .

Okay. That's helpful. All right guys I'll turn it over. Thank you..

Thank you. We'll take our next question from Brian Maguire of Goldman Sachs..

Hey good morning Patrick, good morning Luke..

Good morning, Brian..

Glad to hear that we seem to have reached a bottom in April. I was just wondering if you could maybe provide a little bit of color on it's very early days but the size and shape of the recovery so far.

Are we seeing a decent sized rebound in some markets? I'm sure it's going to vary but given some of the harder hit markets like Toronto and Montreal, are we seeing a little bit of us a snap back so far? Are you kind of seeing more of a gradual a little bit of improvement but it's going to take some time to be able to call it a snap back? A - Luke Pelosi Yes.

I mean real data short of -- if you think about the, I mean the biggest impact we've seen in those markets is definitely on the roll off, the roll off line. We think about that, I mean if you think about the Toronto market for example that's a market where we would do somewhere between 450 and 475 lifts a day.

That dropped in the peak of the low to somewhere around 250. So 250 lists a day and if I look at where we sort of sit over the last week that trended back up to 300 to 325 lifts a day. So I think it's moving in the right direction and I would say the governments here have been far stricter than they've been in the U.S.

regarding a shutdown, this wasn't an optional stay at home you actually mandatorily have to stay at home. So as they rule out the phases here over the next six weeks I anticipate those numbers will continue to grow. But it's been decent. So I think over the next two months we'll see a good chunk of that come back in Toronto and Montreal..

Okay. It's very helpful. The next one is on the topic of the dropping crude oil prices. I mean, you guys have touched oil in a lot of different ways.

The UMO side, your own fuels cost, some of the Canadian provinces of exposure to [BNC] and an oil extraction, just as you think about it, it’s overall that's not something it was really concentrated at the time of the ICO either just how would you kind of frame the overall impact of the dropped oil prices in the bottom line or however you want to think about it.

There is a lot of moving parts there..

Yes. So I mean, when you look at, so first off we have no exposure directly to E&P wastes. So we have the macro exposure to what happens in Alberta but as it relates to direct E&P exposure we have none.

So start with that, obviously we have a natural hedge with our own diesel cost and dropping oil prices but I would say the biggest exposure and I would say Alberta which is when people worry about, Alberta's been depressed since 2015 and 2016, right? All the small junior producers have been out with, it's really been a business that's been run by the majors and those guys are still producing today.

Is there new development? No there's not new development but that wouldn't really affect our P&L anyways because we have virtually no exposure to that. And on the macro side, since really the crash in 2015-2016, the Alberta really hasn't recovered.

The biggest exposure on oil will be the UMO collection business and again we can manage the spread as you've seen from clean harbors and others putting charge for oil in, etc. is accepting of the market and everybody is doing it. So for maintaining a spread that's not an issue today.

Really what the issue comes down to is servicing dealerships are servicing because they are ordered to close and not deemed an essential service as volumes you see volume defined are collected volume of sort of 40% to 35% that's where the sort of the gap is going to come. That will recover. That will come back.

It's just a question of when because at the end of the day people are going to need to get their car serviced as they start driving again but when you think about that in context of the grand scheme of the business, I mean we collect $75 million gallons in historical period selling that at $0.60 a gallon, $0.60 to $0.70 a gallon, it's not a material number in the overall grand scheme of $4 billion of revenue.

You're talking about $35 million to $40 million of revenue coming out of that service line. We don't shift a little bit because we're going to be getting more of our revenue from the charge for oil versus the actual selling of the oil but that's where we sort of sit today.

Going back to Q1 was in a really good comparative period because we did that acquisition in the U.S. there was almost 4 million gallons we inherited that were on the owners watch that we have to sell for in Q1. So the numbers look a lot but if you strip that 4 million gallons of the business performed relatively the same quarter-over-quarter.

So that's I don't see a big impact from oil dropping. I think at the end of the day we'll be in net benefit. What do you think about our overall fuel expense? We spend about $170 million on diesel in any one year. If you look at diesel pricing today down to the tune of almost 40%.

That far offsets any degradation we would see on used motor oil collection business..

On the diesel because a lot of the U.S. based guys [indiscernible] surcharges pretty quickly.

Do you think how much of is the lower diesel did you get cheaper and how much to passed through?.

Yes. So all the commercial -- if that floats with surcharges if it goes up we pass it on if it goes down we give it back. I think where the benefit is on some of these municipal contracts where you have ledge on the surcharges up or down on their annual adjustments versus monthly adjustment.

You'll win on the those and obviously with [pulse] collection operations here you're going to the fuel surcharges doesn't work exactly the same as it would be on the commercial business..

Thank you. We'll take our next question from Walter Spracklin of RBC Capital Markets..

Yes. Thanks very much. Good morning, everyone. .

Hi Walter..

So I think I would like to come back to the contracts that you have and the volume based ones that you’re enjoying -- you're benefiting up here in Canada.

Just curious and I know one of your competitors is signaled their intention to go back to municipalities with an effort to move to adjust their contracts before expiry, the more volume based and I was wondering if you have that opportunity among the U.S.

contracts where you're not volume based? Are you looking into or making efforts or getting some investments of the contracts [indiscernible] cost and higher cost?.

Yes. I mean it's a similar dynamic and what we experienced in 2018, really around the patent depressed commodity pricing.

Some municipalities you can rely on force majeure and other things that are in the contract to try and renegotiate which is always an opportunity and you'll get some municipalities that are open to realizing the issue and not wanting to get in an argument about it and then there's others that just say hey the contract is the contract and they're going to argue about it.

I mean when I look at our business, if I think about Canada on the residential collection side, it's either neutral to a benefit with increased volumes just because of the contracted nature and the structure of the municipal contracts in Canada. So it’s really not a negative impact on the Canadian residential book from increased volumes at the curb.

On balance, it be potentially a bit of a positive. If you think about the U.S. 40% of our U.S. residential business is subscription. So unless we have the ability to move pricing on a monthly or quarterly basis if we see increased volume so that is a better and then you have that sort of balance of the 60% of the U.S.

residential municipal contracts that are tied to house count versus volume where that could be a negative, a bit of a negative.

But if you think about what we've seen, I think again regional specific but if you look at the specific markets, I look at Toronto for example which is a big market you saw increased volumes of like sort of 12% to 15% in the last two weeks of March and then you slowly seen that taper down if people move to more normal state of not bulking up and stepping up in their house where I think where we look this where we said this week volumes are sort of sat around 6% to 7% versus the sort of 12% to 15% we saw right when the shut down happen.

And in the U.S., it's been a wide range where it’s been virtually no impact and there's been other markets that we see increased volume of sort of 15% like we've seen in Michigan that has similar orders that they have in Canada.

So we will work with the municipalities to try and get more money out of them but is it something I'm banking on given what we experienced in 2018 with the recycling I'm going to say it would be all added and bonus if we were able to get something..

Got it. Appreciate that color and just my second question here is on M&A trends.

Patrick can you give us a little bit of update on over the last since we last move how the tenor of the conversations have been, how the logistics been acting on a deal has improved or hasn't improved and what your thoughts are on the advanced disposal trends? Has there been any update regards to how enticing that might be to you and your ability to capitalize or take advantage of any of the best [indiscernible] out of the advanced disposal transaction? Thank you..

Sure. I mean I won't comment on specific M&A but going into the IPO, our pipeline was very fully has been a thesis of ours since we found I mean completing over 135 acquisitions since our founding. I think it's something we do well. When we looked at the pipeline before we closed on [80] plus opportunities in Q1.

As we said as part of the COVID update calls we were going to pause and have paused for the short of the last six to seven weeks.

Just trying to understand what the impact would be on April and I think know sitting here talking I think we're one of the fortunate industries and businesses and this is probably the reason why a lot of investors want to own this space is because we're talking about revenues being off 9% on an organic level when the bulk of other industries are all sort of 50% to 90%.

From a free cash flow perspective we believe that we can manage our free cash flow to the expectations that we saw as part of the IPO.

So when you think about it from that perspective, I think we're starting to feel more and more comfortable about where the base business is going and where the free cash flow generation of the business is going for the balance of the year which allow us to sort of maintain leverage.

So I think we're going to start we engaging on M&A here sort of over the next two or three weeks and sort of get back on. I think when you think about acquisitions, listen there's the way I think about it there's gold, silver and bronze people have asked about valuations.

I think valuations for the gold, I think is gold is always gold and I think valuations will not change much and some of those opportunities.

Again when you think about the silver and bronze and where the opportunities are, when you're thinking from a multiple perspective maybe necessarily return to turn and a half and maybe you get some more willing sellers that don't want to live through another downturn like we saw in 2008 2009 and 2015 and 2016.

So [indiscernible] guys to the table gets them a little bit more realistic and I think we're seeing that on some of our pipelines today where we had a little bit of a price gap.

I think the sellers are getting becoming a little bit more realistic and I think that'll lend itself through good bunch of execution opportunities over the next sort of six months here..

Okay. Appreciate the time. I hope everyone's staying healthy and safe. Thanks. .

Thanks Walter..

Thank you. We will take our next question from Rupert Merer of National Things..

Good morning guys. Congratulations on results and your first quarter as a public company..

Thanks Rupert..

Maybe too early to see but you have any sense of any permanent impairments of volumes that could come from the pandemic? Have you seen any abnormalities in terms of service cancellations?.

Sure. We've had very minimal service cancellations. Like we said with our service days revenue we have contracts whether there's a pound in the bid or whether there's a hundred pounds in a bid where there's a thousand pounds in the bid, we generally have to collect it, we're collecting that and charging for that.

I think obviously we want the bulk of our customers to be a growing concerns. So as customers have called in and asked to temporarily suspend their service because they're closed, we've worked with those customers on a case by case on a customer basics. So I would say there's been very little sort of out and out terminations.

I think if you look at the customer base today about 6% to 7% of the commercial customer base is called in it and asked to either temporarily suspend or change their frequencies.

So I don't think there's a permanent impairment but again it's still early days right like people don't understand, I mean I think our governments are struggling on actually how to reopen, easily shut it down but I think you're trying to understand how they actually reopen but we are seeing sort of material uptakes and people now wanting to get their service back online.

so it's going to take some time to get back to the service level that we're at but I think all in all from what we're seeing has been very little a termination of the services..

Great, thanks. Secondly on cost. Can give us a little more color on the puts and takes on what you're seeing on costs. You talked about some cost savings and discretionary costs but you've got increased cost of safety and hygiene.

Can you give us a little more color on those costs and exactly is there any sort of long-term benefits that could emerge from efficiencies you've realized over the last month?.

Yes. So Rupert, in terms of some of the puts and takes on the cost side, the common incremental sort of enhanced[ PP&E] but so there's incremental cost coming out of that.

You see we didn't add any of that back because I think there's also some offsetting sort of benefits from this unique environment when you think about sort of traffic and some of the productivity safety related in traffic level productivity.

So I mean if you think of how to quantify those exactly, I mean the incremental PP&E cost, we can put a dollar on that in Q2 but the incremental productivity is offsetting that. So don't have a COVID related ad back whether or not we will in the future sort of remains to be seen.

I think one of the -- the most natural levers we've seen is on the overtime side and really if you think about our normal overtime hour being sort of 15% to 20% of total hours, I mean we reduced over time by about sort of 30% where we sit a 27% for the quarter or 27% post-COVID impacts.

So I think that's the most natural sort of cost flex that we've had in sort of response to this in addition to the reduced direct variable costs. So anything about disposal fuel and RNM associated with the lower volume.

So we'll continue to monitor and use that lever to mitigate the impacts but the other puts and takes, I don't want to say perfectly offset but I think those things that sort of go both ways there and then obviously as we alluded to some of the discretionary SG&A, those are very quantifiable dollars. There's no travel.

There's been no merit increases, etc. Those are other levers that have been pulled offset as the free cash flow impacts of this..

Yes, and one thing we didn't touch on earlier but cash collections in April was [early] pre-March but cash collections were on target for us. We're worried about what the working capital impact on the business would be but as we got through April we were on plan and on target without a significant amount of any material defaults.

So again felt very good about the cash collection of the business over April..

Right. Thanks. I will leave with that..

Thank you. We will take our next question from Michael Hoffman of Stifel. .

Hey Patrick, Luke if we could circle back to the free cash flow and set some guardrails. So let's remind everybody what you thought it would look like for 2020 before the pandemic and then how do you think about how that trend.

I'm assuming that the decremental on the cash isn't any different than the decremental on the EBITDA?.

Yes. So Michael, I mean pre-COVID the IPO Roadshow there was a view just for round numbers that sort of realized EBITDA in the year was 1,1615 to 1,150. There was an interest expense on that of sort of 260 to 275. There was a CapEx expense on that of 420 to 440 and there was another for ARO cash taxes whatever of another sort of $50 million.

So that's where we were before and that brings you down to the sort of pre-TEU, pre-dividend, free cash flow number. Where we sit today I'm going to go backwards. I'm going to say we have an interest cost never mind Q1 which had all this sort of noise but really today actually the new bonds, we have an interest cost today of $236 million.

That's where we sit today. So I have that. I have CapEx number of 340 to 350 is what it was looking at today when you look at what we've sort of paused or deferred for the time being and then have 50 million-ish of sort of odds and sides and ARO cash, taxes, etc. So now that's we are considering working capital.

Working capital so that brings me to sort of $630 million cost against the free cash flow line, where I sit today and then working capital. Now in the quarter with a great Q1 cheerily better than the prior period from a working capital perspective. As many of you know we had, we're beginning to undertake a whole order to cash optimization process.

We believe working capital is a place we can drive incremental benefit with all the tapping and that's been sort of temporarily pause but we still think there's an opportunity to drive working capital improvements but even if we say, it doesn't get any better for the balance of years, so working capital is in the source. I stick with my minus 50.

I have $630 million against whatever the EBITDA number is going to be. Now we come out exactly said what the new EBITDA number is. I think the consensus estimate of the group today is somewhere around 1040, 1050.

So if you apply those costs, I said against that 1050 EBITDA I think that's a decent proxy for where your free cash flow is going to be on a normal 12 month run sitting where we sit today before considering the TEU and the dividend..

Terrific. Again just to be clear that actual reported [loss] of reflects on 150 million of IPO cash outflows and all that that were in the first quarter but on adjusted number would be the 1045 less [630]..

Yes correct. Again Q1, if you really want to adjust Q1, I mean there's 233 of EBITDA, I mean really the normal interest cost that should have been burden against that but just under $60 million Steve you think of our new sort of run rate and then $100 million of CapEx and there was a $50 million of ARO and working capital.

That would be the real normalized number but I think as you framed it for the year that's correct before considering the IPO friction..

Okay.

And then did you help us just appreciate the 30% reduction [EOT] but what was [EOT] pre-COVID as a percentage of direct labor just so we understand the scope of what's coming down?.

From an hours perspective of 15% of total hours and the labor line low 20s in 2019. .

Okay and then do you think it's likely that you'll add incremental sales at a better incremental margin because you won't have to add costs as quickly? Is that getting lean like this has that kind of a benefit and let's have incremental costs lower than we add the sale?.

Yes. I think it will be a benefit moving forward on a multitude of fronts like these times that we're living in it when guys actually have to hunker down look at every single expense you really realize what [indiscernible] will you actually need to run the business.

So I think as the existing business that was temporarily suspended or temporarily lost comes back online and then you bolt on new business. Yes, I think you could see some outside sort of margin expansion that comes from it. So I want to quantify it today, no but intuitively that would make sense..

I am just curious if you thought you'd be able to hold on to that in the manner we just discussed. All right. Thanks for taking the questions..

Thanks Michael..

Thank you. We will take our next question from Mark Neville of Scotiabank..

Hey, good morning guys..

Good morning..

Maybe just want to start following up on commercial.

At peak, it sounds like roll off was off about 18% that's come back a bit as curious if you had sort of similar round ballpark numbers for the commercial line?.

Yes. When we look at the commercial line I think, it was as far last but thinking about 7%, was where we saw the commercial sort of revenue stream come off and that today is sitting at about 4% - 4.5%..

Okay. That's helpful. I think Patrick last time you spoke, I think you talked about you said roughly 80% of your site you were on with the restructure soil were up and running.

I am just curious if there's an updated number? I assume it’s gone a bit higher but just curious where it’s now?.

You see today yes today about 85%. We are expecting other sites to come back online in the next two weeks. There has been a bit of delay due to some postponements on some of the sites, just because of the municipalities not fully functioning.

So permit issuance on some of them has been slower than we’d like but again as municipalities come back online here over the next week or two hopefully that bottlenecks to removes itself..

Okay.

Maybe just some of the decremental, I want to make sure I understood, Luke I think you said with consolidated sort of in the range of 30% to 40% but sort of towards lower end and then liquid waste around 25%, did I understand all that correctly?.

Yes. So this always that what I'm saying the decrementals of period the sort of COVID impacts. So you take that lost revenue and you apply that. Now there's a bunch of tailwinds offsetting that if you look at the peel it all back look the organic margin expansion we're having the base business throughout the first sort of quarter.

I think is going to more than offset on a year-over-year basis but ,yes if you think about the volume loss on solid that's right way of thinking about it and then similarly on as Patrick said on liquid. Liquid you flex the rebate on the used motor oil side which ultimately mitigates a lot of that.

There is a bit of a timing difference but at the end of the day I think that's the right way of thinking about liquid margins..

Fair. If I could maybe ask one last question? Just last time you spoke, you talked about the COVID cleaning business, appreciate it’s small, but just sort of curious, how that's trended over the last six seven weeks and if it's something that maybe sticks around sort of the next [indiscernible]..

Yes. I mean it's become a new line of business.

I think as long as COVID around what we've seen the biggest uptick in that, I mean is really around large sort of industrial project and industrial businesses such as manufacturing plants, where they've had a few cases of COVID and potentially are concerned about COVID outbreaks and they shut down those facilities and go in the extensive amount of cleaning.

I think if you look at what we’ve done last six weeks it's sort of been in the range of about 1.5 million to 2 million of double what it was before and I think that continues to evolve and as businesses come back online I think that's going to continue to be an opportunity because as people like to start going back in offices and they want to do these new clean just going to continue to be in opportunity.

.

Thank you. We will take our next question from Kevin Chiang of CIBC..

Hi, good morning. Thanks for taking my question, Patrick and Luke. Maybe just about pricing question.

If I ask it in a different way, what percentage of your solid waste revenue do you think is underpriced or part of putting a bucket like what is the ultimate low hanging fruit that you think as you get to the crisis you should be able to go out and get significantly above average the pricing?.

Yes. So Kevin what we have said at the start of this was halfway through the process of optimizing that existing book we said there's now $25 million to go out and get. We probably got about $5 million of that since we last sort of spoke about that and so where we look is there's probably another over $20 million to come out of that.

So that's what we continue to view that opportunity to be and as we realize that, I think that's going to help sort of produce some of this outsized pricing release for us..

That's helpful and then last one from me. [indiscernible] with waste business mostly about 10% of your revenue it looks to be the most -- it's proven to be the most volatile I guess when you look at what's happened to the crisis here.

When you look out over the long term just how important this business as a growth vehicle for you or does it matters even smaller and maybe you can talk on the stable segments of infrastructure in solid waste term..

Yes. I mean it's obviously to continue becoming a smaller and smaller piece but I would say they were unfairly sort of penalized with what's happened just because it was things out of their control.

If there was an issue with the business particularly on used motor oil side on managing the spread then that's from my perspective as managing the business that's an issue but if dealership said everything were closed which is normally open, I think it's similar to what you experienced on the solid waste revenue when you saw 25% behind in the commercial business.

If you saw 25% to 30% less volume collected because dealerships are closed. I don't think it's a fair structural issue with the business. I just think it's a question of COVID-related issue with bad luck when it comes to the volumes that people couldn't collect instead because the spread hasn't changed in the business. We put on the charge for oil.

So we're still going to maintain that spread faster than we did historically as soon as WPI drops as quickly as it did we put in those, implement of those stop charges in charge more like immediately. So it's really just we need the businesses to reopen so we can start collecting the volume again..

And Kevin if you look at that business if you chart it out back to the beginning in 2011 and looked at that, I mean there's really been two material volatile spikes in it. It was 2015 when oil crashed and now so you do in the, but if you look at those they're really just a short-term in short term intra-quarter or intra-month period.

I mean if you look at the chart and in totality that business continues to grow at very attractive organic growth rates.

It is a great free cash flow generator and if you take out the noise of oil that seems to happen every sort of five years with these one-quarter spikes you have a very nice predictable sort of growth line coming out of that business with attractive free cash flows and great returns on capital.

And that compliment of how it fits in with our broader sort of solid waste service offering. I think is what we do --.

Yes and when you, just to put in perspective if that is -- you sort of look at the analyst model that is budgeted sort of just over $7 million of EBITDA for April. I mean even in the shut down that business did mid fives of EBITDA, so it’s off budget sort of like a $1.5 million on the EBITDA line because the cost structure is so flexible.

So again it's not something that went to zero. It was off a little bit but from a materiality perspective it was very minimal..

That's very helpful color. Thank you very much..

[indiscernible] continue getting to be smaller piece of the overall stream..

Makes a lot of sense. Thank you..

Thank you. We'll take our next question from Jeff Silbe of BMO Capital Markets..

Thank you so much. I know it’s like -- just had a quick question on the used motor oil business. Forgive me. I think you had mentioned in the prepared remarks, Luke that the volumes in Canada were relatively stable but they were down dramatically in the U.S.

Just if you can confirm that that'll be great I'm just wondering that's true why the discrepancy? Thank you..

Yes. So Jeff you are accurate with what I said in the comments about the volumes but the U.S. is really disproportionately impacted by what I'll call sort of one-time event in Q1 of last year and really if you think about the U.S.

business we bought in November of 2018 came with that a huge amount of oil inventory that the former vendor was just stockpiling, didn't want to sell it during the transaction. So when we got in Q1, we had this excess inventory that we all we sold in this one-time shot. So unseasonal large volume. So it just makes for a very tough comp.

I think if you back that out the U.S. volumes were slightly down period over period which is really the impact of late March as things started tightening up in and around the Midwest..

Okay. Appreciate you clarifying that. I thought for some reason there were some strange driving going on in the U.S. versus Canada. So I appreciate. Thanks..

Thank you. We will take our next question from Michael Feniger of Bank of America..

Thank you guys for taking my question. Can you just help me understand how you can select your [buyback]? I know you guys are [indiscernible] you acquired a lot of different businesses that might not have had fleet or equipment as young as yours but you guys also have a solar and landfill exposure like mentioned before.

So can you help me understand how you can select your CapEx decreased lower from longer type of demand environment..

Yes. So Mike if you think about and you go back to our April sort of update deck where we sort of show wheel if you will where we normally spend our CapEx with the lower landfill concentration just a lower need in that department and an overall lower base maintenance CapEx.

I mean we've said consistently is our maintenance CapEx spend is sort of 7.5% - 8% that's what we need. Now we've been growing as you said through M&A and organically and we've been deploying a lot of strategic incremental growth capital above and beyond that.

That's why our historical CapEx spend has been levels above that but if I have to keep the lights on, I can do so very easily with a sort of 7.5% to 8% spend which is again largely just predicated on the lower dollars going into landfills soil construction.

So when we looked at what we had in the plan for this year, we had some growth oriented items which are sort of more nice to have. We don't need to be doing.

And then I think we've always asserted we have a very sort of not aggressive but our replacement schedule is where we're maintaining what we believe to be a great fleet and then great set of facilities and so in a uncertain period such as this we can defray some of that replacement CapEx just a slightly different replacement schedule and I think those things together that gives us a lot of latitude within that original 440 number..

Okay. That's very helpful. And you mentioned that your [indiscernible] customer starts to reengage as public economy reopen.

I think customers engaged are they asking for any type of price concession or much lower service levels compared with pre-COVID? Do you see anything specific with customer bases in the hotel user space or education or airline [indiscernible]..

Yes. So no one price, no one's asked for reduced pricing. Well, I shouldn't say no, I'm sure everyone will ask if they get the opportunity presents itself but we haven't seen a material issue with in terms of people asking for price reductions. Again they're contracted revenue streams for three to five years.

Again we are working with individuals that were maybe getting service three times a week and now they want to reduce the one or two times a week as things slowly come back online. We are seeing, we don't have any real exposure to any of the airlines.

We do have a couple of airport contracts like in Denver, part of the Vancouver airports and a little bit of Pearson in Toronto. So obviously that has slowed but again it's insignificant in terms of dollars. We are seeing hotels come back online -- again our hardest affected markets where sort of Toronto and Montreal and Vancouver.

So even sort of in the pandemic they went down, [indiscernible] pandemic they were going down to sort of service once a week and we've seen in some of those they're now moving to sort of twice a week where historically there would have been three to four times a week.

So again it's all going to be on depending on how fast they open and how fast it is going to recover but we are seeing the uptick today and where they're moving..

Thank you..

Thank you. We will take our last question from David [indiscernible] Group..

Hi guys.

I am wondering if you can comment any discussions you may have had with your municipal city clients compared to smart cities initiative, something of which they're quite focused on these days, whether using technologies for data collection of garbage set out or other non-waste collections? So have you had any in that regard to what extend is that something that may not be on data between a participant [indiscernible]..

Yes. I would say it's very early days on that. I mean a Google owned entity sort of has been the pioneer in terms of trying to actually design sort of smart cities.

So there were some trials being done with Google and we had done a JV partnership with them and they'd utilized our single stream [indiscernible] to identify different sort of cradle-to-grave recycling streams particularly around the circular economy and extender producer responsibility, legislation that is coming out in Canada.

I would say in the U.S. it's been very sort of minimal to-date but recently that smart city project that Google is going to do they've recently pulled out of that, so when COVID hit it’s actually not going forward with that project. So I'm assuming that will subside over the next little while but we have explored that with some of those providers..

Thanks and just one more follow-up. Can you guys [indiscernible] from the period of --.

Sorry. Can you repeat the question? It was muffled. I apologize..

Yes. No problem. I will repeat. Just wondering if you have the metric on number of kilometers that your waste vehicles cover and whether you track that period-over-period.

-- number of road covered?.

We definitely track, it as part of our compliance but I don't have that number at my fingertips..

Fair. Thanks..

Okay. Now thank you very much, if there is no more questions operator, we will conclude this call and as always Luke and I are available to answer questions over the course of the day..

Thank you. Ladies and gentlemen this concludes today's conference. You may now disconnect..