GFL Environmental Inc (GFL) 2023 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the GFL Environmental 2023 Q2 Earnings Call. (Operator Instructions) Also note that the call is being recorded. And now I would like to turn the conference over to Patrick Dovigi. Please go ahead, sir.

早上好，女士們、先生們，歡迎參加 GFL Environmental 2023 年第二季度收益電話會議。 （操作員說明）另請注意，呼叫正在錄音。現在我想把會議交給帕特里克·多維吉。請繼續，先生。

Thank you, and good morning, everyone. Sorry for the slight delay as our conference operator is experiencing technical difficulties at the current time. So you may hear from others that they may have not been able to log in, but anyone that logged in prior to sort of 8:15 a.m. has the ability to log in. But it is -- the conference call is available sort of on the webcast, and whoever was logged in before 8:15 can certainly ask questions. So I'd like to welcome everyone to today's call and thank you for joining us.

謝謝大家，大家早上好。由於我們的會議運營商目前遇到技術困難，因此造成了輕微的延遲，對此我們深表歉意。因此，您可能會聽到其他人說他們可能無法登錄，但任何在上午 8:15 之前登錄的人都可以登錄。但事實是——電話會議可以在網絡直播，8點15分之前登錄的人當然可以提問。因此，我歡迎大家參加今天的電話會議，並感謝您加入我們。

This morning, we will be reviewing our results for the second quarter and updating our guidance for this year. I'm joined this morning by Luke Pelosi, our CFO, who will take us through our forward-looking disclaimer before we get into details.

今天早上，我們將審查第二季度的業績並更新今年的指導。今天早上，我們的首席財務官盧克·佩洛西 (Luke Pelosi) 與我一起，在我們詳細介紹之前，他將向我們介紹我們的前瞻性免責聲明。

Thank you, Patrick. Good morning, everyone, and thank you for joining. We have filed our earnings press release, which includes important information. The press release is available on our website. We have prepared a presentation to accompany this call that is also available on our website. During this call, we'll be making some forward-looking statements within the meaning of applicable Canadian and U.S. Securities Laws, including statements regarding events or developments that we believe or anticipate may occur in the future.

謝謝你，帕特里克。大家早上好，感謝您的加入。我們已經提交了收益新聞稿，其中包含重要信息。該新聞稿可在我們的網站上獲取。我們準備了一份伴隨本次電話會議的演示文稿，該演示文稿也可在我們的網站上獲取。在本次電話會議中，我們將做出一些適用加拿大和美國證券法含義內的前瞻性聲明，包括有關我們認為或預期未來可能發生的事件或發展的聲明。

These forward-looking statements are subject to a number of risks and uncertainties, including those set out in our filings with the Canadian and U.S. Securities Regulators. Any forward-looking statement is not a guarantee of future performance, and actual results may differ materially from those expressed or implied in the forward-looking statements. These forward-looking statements speak only as of today's date, and we do not assume any obligation to update these statements, whether as a result of new information, future events and developments or otherwise. This call will include a discussion of certain non-IFRS measures. A reconciliation of these non-IFRS measures can be found in our filings with the Canadian and U.S. securities regulators. I will now turn the call back over to Patrick.

這些前瞻性陳述受到許多風險和不確定性的影響，包括我們向加拿大和美國證券監管機構提交的文件中列出的風險和不確定性。任何前瞻性陳述都不是對未來業績的保證，實際結果可能與前瞻性陳述中明示或暗示的結果存在重大差異。這些前瞻性陳述僅代表今天的情況，我們不承擔任何更新這些陳述的義務，無論是由於新信息、未來事件和發展還是其他原因。本次電話會議將討論某些非國際財務報告準則措施。這些非國際財務報告準則措施的調節可以在我們向加拿大和美國證券監管機構提交的文件中找到。我現在將把電話轉回給帕特里克。

Thank you, Luke. In the second quarter, we continued to build on our strong start to the year with another quarter of double-digit core pricing and over 300 basis point expansion of underlying solid waste margins. Based on our strong performance in the first half, together with our optimistic outlook for the remainder of the year, we are increasing our already industry-leading guidance for 2023. Both, Q2 top line growth and margin expansion, were beyond our internal expectations and continue to demonstrate the strength of our best-in-class asset base and the ability of GFL's exceptional team to execute on our proven value creation strategies. With each passing quarter, I continue to be more humbled by the capacity of our 20,000-plus employees to drive our results, and I'm grateful to each and every one of them for their contribution to our success. The second quarter also saw the successful completion of our portfolio rationalization initiative that we committed to earlier in the year.

謝謝你，盧克。第二季度，我們繼續在今年強勁的開局基礎上再接再厲，核心定價又實現兩位數增長，基礎固體廢物利潤率擴大了 300 個基點以上。基於我們上半年的強勁表現以及對今年剩餘時間的樂觀前景，我們正在提高已經處於行業領先地位的 2023 年指導。第二季度的營收增長和利潤率擴張都超出了我們的內部預期，並且繼續展示我們一流的資產基礎的實力以及GFL 卓越團隊執行我們經過驗證的價值創造戰略的能力。每過一個季度，我都會對我們 20,000 多名員工推動我們取得成果的能力感到更加謙卑，我感謝他們每一個人為我們的成功做出的貢獻。第二季度還成功完成了我們在今年早些時候承諾的投資組合合理化計劃。

From these non-core divestitures, we realized gross proceeds of approximately $1.65 billion which is $150 million more than our original guidance. We also completed all three divestitures 1 quarter earlier than we had originally anticipated. Our ability to complete an initiative of this size and complexity over a short 6-month period is another testament to the capabilities of our team to successfully execute on our strategies.

通過這些非核心資產剝離，我們實現了約 16.5 億美元的總收益，比我們最初的指導多了 1.5 億美元。我們還比最初預期提前 1 個季度完成了所有三項資產剝離。我們有能力在短短 6 個月內完成如此規模和復雜的計劃，這再次證明了我們團隊成功執行戰略的能力。

The rationalization initiative was part of a broader, more comprehensive portfolio review that we undertook in 2022. As a result of that review, we recognized that while all the divested assets were of high quality, their forecasted return profiles were far less attractive relative to other outside accretive growth opportunities that we had identified in other areas of our business. We expect that the resulting geographic concentration of our portfolio after these divestitures will further support our ability to compound earnings and free cash flow industry-leading growth rates.

該合理化舉措是我們在2022 年進行的更廣泛、更全面的投資組合審查的一部分。審查的結果是，我們認識到，雖然所有剝離的資產都是高質量的，但與其他資產相比，它們的預測回報率遠不那麼有吸引力。我們在其他業務領域發現的外部增長機會。我們預計，在這些資產剝離之後，我們的投資組合在地理上更加集中，這將進一步支持我們實現複合收益和自由現金流行業領先增長率的能力。

The divestiture had the added benefit of accelerating our balance sheet deleveraging with the net proceeds from the sales applied to paying down our highest coupon floating rate debt. As a result of the pay down, we ended Q2 with our lowest net leverage in company history. The resulting enhanced strength of our balance sheet alongside our margin expansion and accelerated free cash flow generation sets us on a clear path to ending the year with net leverage at less than 4x and the opportunity to de-lever into the mid-3s by the end of 2024. As we have demonstrated, we remain committed to our stated deleveraging goals and are optimistic about the positive impact of the credit rating upgrades that we expect will occur along the way as our net leverage decreases, with an eventual path to investment-grade ratings.

此次剝離還有一個額外的好處，即加速我們的資產負債表去槓桿化，並將出售所得淨收益用於償還我們最高票面浮動利率債務。由於減薪，我們在第二季度末的淨槓桿率達到了公司歷史上最低的水平。由此帶來的資產負債表實力增強、利潤率擴張和自由現金流加速生成，使我們在年底前走上了一條清晰的道路，淨槓桿率低於4 倍，並有機會在年底前將槓桿率降至3 倍左右2024 年。正如我們所證明的那樣，我們仍然致力於實現既定的去槓桿化目標，並對信用評級升級的積極影響持樂觀態度，我們預計隨著我們的淨槓桿率下降，信用評級升級將會產生積極影響，最終將達到投資級評級。

On our Q2 operating performance, we achieved revenue growth of nearly 14%, including the impact of asset divestitures, driven by Solid Waste core pricing of 10.4%. The combination of open market pricing activity, the roll forward of our surcharge initiatives from last year and the continued elevated price increases on our CPI-linked revenue drove our core prices to close to 200 basis points higher than expectations. We expect that the strength of the pricing that we have experienced in the first half will position us to achieve a full year core price of over 9% compared to 8% that was the basis for our initial 2023 guide. Lower Solid Waste volumes in the quarter were in part driven by the pull forward of volumes in the first quarter, but also our exit from non-core service offerings, mostly in our Canadian business.

就我們第二季度的經營業績而言，我們實現了近 14% 的收入增長，其中包括資產剝離的影響，固體廢物核心定價為 10.4%。公開市場定價活動、去年以來附加費計劃的延續以及與 CPI 相關的收入價格持續上漲，共同推動我們的核心價格比預期高出近 200 個基點。我們預計，上半年的定價優勢將使我們能夠實現全年核心價格超過 9%，而我們最初的 2023 年指南的基礎價格為 8%。本季度固體廢物量下降的部分原因是第一季度產量的增長，以及我們退出非核心服務產品（主要是我們的加拿大業務）。

As part of our strategic portfolio review that I described earlier, we also decided to intentionally shed high-volume, low-quality revenue, primarily in our U.S. residential service line and to deploy our resources into other attractive opportunities. We believe that this quality of revenue focus is yet another example of our discipline around capital allocation and our returns on invested capital. The margin expansion that we are seeing in the first half of 2023 continues to demonstrate the impact of our diligent focus on optimizing price and our cost base to drive higher underlying profitability.

作為我之前描述的戰略投資組合審查的一部分，我們還決定有意放棄大量、低質量的收入，主要是在我們的美國住宅服務領域，並將我們的資源部署到其他有吸引力的機會上。我們相信，這種對收入質量的關注是我們在資本配置和投資資本回報方面遵守紀律的另一個例子。我們在 2023 年上半年看到的利潤率擴張繼續證明了我們致力於優化價格和成本基礎以推動更高的潛在盈利能力的影響。

Consolidated margins in the quarter expanded 130 basis points over the prior year. As the spread between price and cost inflation continues to widen, adjusted EBITDA margin expansion in our underlying Solid Waste business accelerated to 315 basis points in the quarter. In addition, our Solid Waste adjusted EBITDA margins were 60 basis points ahead of 2021, meaning we now have more than recovered our pre-cost inflation margin profile. The effectiveness of our fuel cost strategy initiatives can be seen in the quarter-over-quarter decrease in the margin impact of diesel prices.

該季度的綜合利潤率比上年同期增長了 130 個基點。隨著價格與成本通脹之間的差距持續擴大，本季度我們基礎固體廢物業務的調整後 EBITDA 利潤率擴張加速至 315 個基點。此外，我們的固體廢物調整後 EBITDA 利潤率比 2021 年提高了 60 個基點，這意味著我們現在已經恢復了成本通脹前的利潤率。我們的燃料成本戰略舉措的有效性可以從柴油價格對利潤率影響的季度環比下降中看出。

We are pleased with the progress we have made on the respect of fuel surcharges and see incremental opportunity as we continue to optimize the program across our platform. While commodity prices continue to be a margin headwind compared to the prior year, we believe an eventual price recovery will occur and the future benefit of margins as we go forward. As we anticipated, cost inflation, excluding fuel prices, continues to moderate, although we continue to see repair and maintenance cost pressures persist. We now expect to end the year 50 basis points above the original plan on the R&M expense line but with the overall cost trending in the right direction.

我們對燃油附加費方面取得的進展感到高興，並在我們繼續優化整個平台的計劃時看到了更多的機會。雖然與上一年相比，大宗商品價格仍然是利潤率的阻力，但我們相信，隨著我們的前進，最終價格將會回升，並且利潤率的未來效益將會顯現。正如我們預期的那樣，儘管維修和維護成本壓力依然存在，但不包括燃油價格在內的成本通脹繼續放緩。我們現在預計年底 R&M 費用線將比原計劃高 50 個基點，但總體成本趨勢正確。

Labor costs continue to sequentially improve, and we are optimistic about further moderation in the back half of the year. Performance in our Environmental Services segment was equally impressive with a revenue growth of nearly 20% and adjusted EBITDA margin expansion of 100 basis points. We continue to believe our strategic focus on our revenue quality and asset utilization will yield meaningful incremental operating leverage in this segment over the coming years with a line of sight to [30%] segment EBITDA margins. Adjusted free cash flow was ahead of plan, inclusive of incremental interest expense as a result of the earlier debt payment, which was not previously factored into our guide. CapEx spend was slightly behind expectations, attributed to the timing differences. The CapEx for the quarter included spend on new projects incremental to the original plan.

勞動力成本繼續環比改善，我們對下半年進一步放緩持樂觀態度。我們的環境服務部門的業績同樣令人印象深刻，收入增長了近 20%，調整後的 EBITDA 利潤率擴大了 100 個基點。我們仍然相信，我們對收入質量和資產利用率的戰略重點將在未來幾年內為該細分市場帶來有意義的增量運營槓桿，並著眼於 [30%] 細分市場 EBITDA 利潤率。調整後的自由現金流量超出了計劃，包括因提前償還債務而產生的增量利息支出，這在我們的指南中之前並未考慮在內。由於時間差異，資本支出略低於預期。本季度的資本支出包括原計劃增量的新項目支出。

With the success of the divestiture transactions, we intend to allocate $200 million to $300 million of the proceeds to a number of incremental sustainability-related capital projects, primarily related to opportunities arising from extended producer responsibility legislation and renewable natural gas. In keeping with our strategy to maximize our returns on invested capital, we believe that these projects represent some of the highest quality near-term investment opportunities and are excited about the positive contribution that these investments will have across many facets of our strategy going forward.

隨著剝離交易的成功，我們打算將收益中的 2 億至 3 億美元分配給一些與可持續發展相關的增量資本項目，主要與擴大生產者責任立法和可再生天然氣帶來的機會有關。根據我們最大化投資資本回報的戰略，我們相信這些項目代表了一些最高質量的近期投資機會，並對這些投資將在我們未來戰略的許多方面做出的積極貢獻感到興奮。

On RNG, we had the ribbon cutting at our Arbor Hills RNG facility in June, marking the completion of its construction. The Arbor Hills RNG plant is the first and largest GFL renewables project that we have with OPAL Fuels and is expected to produce more than 2.5 million MMBTUs of RNG when it comes online later this quarter. We had said earlier in the year that we expected to have two projects in addition to the Arbor Hills online leader as part of this review. We now expect that we only have one of the additional projects to meet that timeline with the third project now expected to follow by the second half of 2024.

在 RNG 方面，我們於 6 月份在 Arbor Hills RNG 工廠進行了剪彩，標誌著其建設完成。 Arbor Hills RNG 工廠是我們與 OPAL Fuels 合作的第一個也是最大的 GFL 可再生能源項目，預計在本季度晚些時候上線時將生產超過 250 萬 MMBTU 的 RNG。我們在今年早些時候曾表示，作為本次審查的一部分，除了 Arbor Hills 在線領導者之外，我們預計還會有兩個項目。我們現在預計只有一個額外項目能夠滿足這一時間表，第三個項目預計將在 2024 年下半年完成。

The recent run-up that we have seen in the RIN prices is very positive for our investments in these project. But even without those larger, higher prices, we remain very excited about the contributions of EBITDA from our landfill gas energy project that we will begin to see this year and ramp into 2024 and 2025. We believe that our existing network of best-in-class assets and market selections positions us for high-quality organic profitable growth.

最近我們看到 RIN 價格的上漲對我們對這些項目的投資非常有利。但即使沒有那些更大、更高的價格，我們仍然對我們的垃圾填埋氣能源項目的EBITDA 貢獻感到非常興奮，我們將於今年開始看到該項目，並在2024 年和2025 年逐步實現。我們相信，我們現有的最佳網絡一流的資產和市場選擇使我們能夠實現高質量的有機盈利增長。

In the first half of this year, we have been very focused on completing the three non-core divestitures and harvesting the self-help opportunities in our existing platform. Our results demonstrate our success in implementing these initiatives. We continue to have a robust M&A pipeline. And given the enhanced strength of our balance sheet and free cash flow profile, we will again focus on our M&A strategy of densifying our existing footprint in North America. On the ESG front, we made progress in several areas. GFL was named Corporate Knights as one of the Canada's 50 Best Corporate Citizens and was awarded the SEAL Business Sustainability Award for the second time in 3 years for the RNG initiatives that we are implementing in our landfills.

今年上半年，我們非常專注於完成三項非核心剝離，收穫現有平台的自救機會。我們的結果證明了我們在實施這些舉措方面取得了成功。我們繼續擁有強大的併購渠道。鑑於我們資產負債表和自由現金流狀況的增強，我們將再次專注於加強我們在北美現有業務的併購戰略。在ESG方面，我們在多個領域取得了進展。 GFL 被評為加拿大 50 家最佳企業公民之一，並因我們在垃圾填埋場實施的 RNG 舉措而三年內第二次榮獲 SEAL 商業可持續發展獎。

These RNG projects are key pillars of our sustainability action plan and support our goals of reducing our own GHG emissions by increasing capture of landfill gas and displacing the use of virgin fuels in our fleet. We are also continuing to increase our ESG disclosure with the filing of our first CDP report this month. And we are on the path to completing our first comprehensive stand-alone report in line with the recommendation of the task force on climate-related financial disclosures by the end of the year. I'll now pass the call over to Luke, who will walk through the quarter in more detail, then I'll share some closing comments before we open it up for Q&A.

這些RNG項目是我們可持續發展行動計劃的關鍵支柱，並支持我們通過增加垃圾填埋氣的捕獲和取代我們車隊中使用的原始燃料來減少我們自己的溫室氣體排放的目標。我們還在本月提交第一份 CDP 報告，繼續增加 ESG 披露。我們正在按照氣候相關財務披露工作組的建議，在年底前完成第一份全面的獨立報告。我現在將把電話轉給盧克，他將更詳細地介紹本季度，然後在我們開始問答之前我將分享一些結束語。

Thanks, Patrick. For the following discussion, I will refer to our accompanying investor presentation, which provides supplemental analysis to summarize our performance in the quarter. Page 3 summarizes the bridge between realized revenue and our guidance, updated to reflect the impact of the divestitures consistent with our June press release. Excluding the impact of the steady appreciation of the Canadian dollar since the beginning of May when we provided this Q2 guide, revenue was $1.955 billion as compared to our pro forma guide of $1.95 billion.

謝謝，帕特里克。在接下來的討論中，我將參考我們隨附的投資者演示文稿，其中提供了補充分析來總結我們本季度的業績。第 3 頁總結了已實現收入和我們的指導之間的橋樑，並進行了更新，以反映與我們 6 月新聞稿一致的資產剝離的影響。排除自 5 月初我們提供第二季度指南以來加元穩步升值的影響，收入為 19.55 億美元，而我們的預估指南為 19.5 億美元。

When unpacking the out-performance, it is really a function of incremental Solid Waste pricing, which was about 175 basis points ahead of plan, offset by just under 200 basis points of incremental negative Solid Waste volume. Recycled commodity prices and higher revenue from our Environmental Services line contributed to the out-performance, but the amounts were relatively immaterial. Solid Waste core pricing continues to be strong in both our geographies.

在分析表現優異時，它實際上是增量固體廢物定價的函數，比計劃提前了約 175 個基點，被增量負固體廢物量略低於 200 個基點所抵消。回收商品的價格和環境服務線的收入增加導致了業績的出色表現，但金額相對較小。我們兩個地區的固體廢物核心定價繼續保持強勁。

Recall the normal and expected cadence of quarterly pricing is a peak in the first quarter and then a sequential step down thereafter. The 200 basis point deceleration in pricing from Q1 was less than expected as open market pricing remained constructive and our CPI-linked revenue continued to reset at elevated levels. Providing support to the relatively lower percentage price increases historically realized in the residential collection and post-collection lines of business. Q2 Solid Waste volumes was negative 3.5%, which included a certain amount of volume pulled forward into Q1, as we had suggested on the first quarter call as well as intentional shedding of low-margin work. Looking at the first half as a whole, which is more reflective of the underlying performance of the business, Solid Waste volume was negative 160 basis points.

回想一下，季度定價的正常和預期節奏是在第一季度達到峰值，然後依次下降。定價較第一季度下降 200 個基點低於預期，因為公開市場定價仍然具有建設性，而且我們與 CPI 相關的收入繼續重新設定在較高水平。為住宅徵收和徵收後業務線歷史上實現的相對較低百分比的價格上漲提供支持。第二季度固體廢物量為負 3.5%，其中包括將一定量的量提前到第一季度，正如我們在第一季度電話會議上所建議的那樣，以及有意削減低利潤工作。從上半年整體來看，固體廢物量負160個基點，更能反映業務的基本表現。

The components of this negative 160 breaks out as follows. Approximately 60 basis points relates to the exiting of non-core other revenues in our Canadian business. These are lower-margin ancillary services inherited through acquisitions that we have decided to no longer provide as a result of our ongoing strategic portfolio reviews that Patrick spoke to. Another 20 basis points relates to Special Waste volumes, which tend to vary in timing from 1 year to the next. And the other 100 basis points relates to non-regrettable losses, substantially all of which is in the collection line of business.

這個負 160 的組成部分如下所示。大約 60 個基點與我們加拿大業務中非核心其他收入的退出有關。這些是通過收購繼承的低利潤輔助服務，由於帕特里克談到的我們正在進行的戰略投資組合審查，我們決定不再提供這些服務。另外 20 個基點與特殊廢物量有關，其時間往往在一年與下一年之間有所不同。另外 100 個基點與不可遺憾的損失相關，基本上所有損失都在收款業務範圍內。

Our underlying volume growth for the first half was approximately 20 basis points. The vast majority of our customers are willing to pay for our high-quality services, and we continue to retain existing customers and win net new customers at appropriate prices every day. But as Patrick mentioned, we're electing to not renew contracts that do not meet our return thresholds, given our increased focus on quality of revenue. In the current operating environment, we believe that it's better use of our resources to focus on the many other accretive opportunities we see before us. The positive impact of our pricing and deliberate volume strategies can be seen in the underlying adjusted EBITDA margin expansion.

上半年我們的基礎銷量增長約為 20 個基點。我們絕大多數的客戶願意為我們的高質量服務付費，我們每天都以合適的價格持續留住現有客戶並贏得淨新客戶。但正如帕特里克所提到的，鑑於我們越來越關注收入質量，我們選擇不再續簽不符合回報門檻的合同。在當前的運營環境下，我們認為最好利用我們的資源來關注我們面前的許多其他增值機會。我們的定價和精心設計的銷量策略的積極影響可以從調整後的 EBITDA 利潤率擴張中看出。

On Page 4, we show the bridge of the 220 basis point year-over-year Solid Waste adjusted EBITDA margin expansion. Commodities continue to be a year-over-year headwind in a 110 basis point impact compared to the prior year. Due to our scale and the quality of the commodities we sell, we typically realize a selling price at a spread above market indices. However, periods of significant price volatility can temporarily cause spread compression such that the net price we realize can decrease even when the headline market indices increase, and that's what we saw in Q2. Although fiber prices have increased recently, the coincident rapid and significant decline in non-fiber prices yielded this type of spread compression during the end of Q2.

在第 4 頁，我們展示了固體廢物調整後 EBITDA 利潤率同比增長 220 個基點的橋樑。大宗商品仍然是同比逆風，與上年相比影響達 110 個基點。由於我們的規模和所銷售商品的質量，我們通常以高於市場指數的價差實現銷售價格。然而，價格大幅波動的時期可能會暫時導致價差壓縮，因此即使總體市場指數上漲，我們實現的淨價也會下降，這就是我們在第二季度看到的情況。儘管纖維價格最近有所上漲，但非纖維價格同時快速大幅下跌，在第二季度末導致了這種價差壓縮。

As a result, the average net commodity price we realized for the quarter was only very modestly above our initial guidance. Divestiture of the Colorado MRF, which had a blended basket of goods price higher than our company average, also impacted our average commodity price. The continued decline in non-fiber prices since quarter end results in a current basket price approximately equal to our original guide. The anticipated stabilization and subsequent recovery in commodity prices towards the end of the year should result in a reversal of this trend.

因此，我們本季度實現的平均商品淨價僅略高於我們的初始指導。科羅拉多 MRF 的一攬子混合商品價格高於我們公司的平均水平，剝離也影響了我們的平均商品價格。自季度末以來非纖維價格持續下跌，導致當前的一籃子價格大致等於我們最初的指導價。預計到年底大宗商品價格將趨於穩定並隨後回升，這應該會導致這一趨勢的逆轉。

The incremental effectiveness of our fuel cost recovery strategies is clearly evident on the bridge on Page 4 of the presentation with an 85 basis point sequential improvement to the net margin impact over Q1. With the substantial completion of the first phase of our surcharge initiative, we do not anticipate material negative margin impacts from future rapid increases in diesel costs. And we see additional upside from continued enhancements that we are implementing, including on the indirect fuel side. Also shown on the bridge is the impact of M&A and of receiving approximately $5 million of business interruption insurance from the MRF [fires] that we had in Canada last year.

我們的燃料成本回收策略的增量有效性在演示文稿第 4 頁的橋上顯而易見，第一季度淨利潤影響連續改善了 85 個基點。隨著我們的附加費計劃第一階段的基本完成，我們預計未來柴油成本的快速增長不會對利潤率產生重大負面影響。我們看到我們正在實施的持續改進帶來了額外的好處，包括間接燃料方面。橋上還顯示了併購以及去年我們從加拿大 MRF [火災] 獲得約 500 萬美元業務中斷保險的影響。

After excluding those items, base business solid waste margins expanded 315 basis points, a 125 basis point acceleration over Q1 and demonstrative of the widening spread between price and cost inflation that we forecast in the 2023 guide. The accretive margin impact of the non-regrettable revenue losses that Patrick and I just described also contributed to the margin expansion out-performance. Adjusted free cash flow for the quarter was $9 million, better than our plan despite incurring $10 million of incremental cash interest expense as a result of repaying our floating rate debt earlier than originally anticipated.

排除這些項目後，基礎業務固體廢物利潤率擴大了 315 個基點，比第一季度增加了 125 個基點，這表明我們在 2023 年指南中預測的價格與成本通脹之間的差距正在擴大。帕特里克和我剛才描述的不可遺憾的收入損失對利潤率的增值影響也促成了利潤率擴張的出色表現。本季度調整後的自由現金流為 900 萬美元，好於我們的計劃，儘管由於提前償還浮動利率債務而產生了 1000 萬美元的增量現金利息支出。

Adjusted cash flows from operating activities increased 18% despite a 32% increase in cash interest expense versus the prior year. On Page 5, we have summarized the impact of the now completed divestitures. Due to timing differences between in-year impact of divested adjusted EBITDA and the associated savings and interest cost and CapEx, the divestitures are modestly dilutive to 2023 results but are still anticipated to be accretive within the first 12 months. Cash taxes and transaction costs resulting from the asset sales will total just under $400 million, and the approximately $1.3 billion of proceeds were used to repay outstanding borrowings under our revolving credit facility and just under half of our term loan B.

儘管現金利息支出較上年增加 32%，但調整後的經營活動現金流量仍增加 18%。在第 5 頁，我們總結了現已完成的資產剝離的影響。由於剝離的調整後 EBITDA 的年內影響與相關的儲蓄和利息成本以及資本支出之間存在時間差異，剝離對 2023 年業績的影響略有稀釋，但預計仍將在前 12 個月內實現增值。資產出售產生的現金稅和交易成本總計略低於 4 億美元，約 13 億美元的收益用於償還我們的循環信貸安排下的未償還借款和略低於我們定期貸款 B 的一半。

As Patrick mentioned, with the transactions yielding $150 million more than the original plan and closing the quarter early, we are reallocating a portion of the proceeds towards attractive capital opportunities that we have been evaluating, which I will flesh out in more detail when we walk through the guidance update. As a result of the net debt repayment and the strong first half operating performance, we ended Q2 with net leverage of 4.18x. On Page 6, we have summarized our new debt profile, where it shows that now almost 80% of our debt is fixed rate, and the overall complex blends to a borrowing rate of approximately 5.2%, nearly 50 basis points better than before the debt pay down.

正如帕特里克所提到的，由於這些交易的收益比原計劃高出1.5 億美元，並且本季度提前結束，我們正在將部分收益重新分配給我們一直在評估的有吸引力的資本機會，我將在我們討論時更詳細地闡述這些機會。通過指導更新。由於淨債務償還和上半年強勁的經營業績，我們第二季度末的淨槓桿率為 4.18 倍。在第 6 頁，我們總結了我們的新債務概況，其中顯示我們現在幾乎 80% 的債務是固定利率，整體複雜的借款利率約為 5.2%，比債務之前高了近 50 個基點還清。

In terms of our updated guidance for the year, Page 8 provides the bridge from our original guidance by approximately $70 million on a like-for-like basis. The new guide assumes an FX rate of 1.32 for the balance of the year. So the last step on the bridge shows the impact of that change in FX rates. Underlying this new guide are the following assumptions. Solid Waste pricing goes to just under 9.5% from 8%. Surcharges go to negative 1% from flat, reflecting lower diesel prices, Solid Waste volumes go to negative 2% from flat with underlying volume growth of positive 20 basis points, offset by approximately 110 basis points of intentional shedding and approximately 90 basis points from exiting non-core ancillary services mostly in our Canadian business.

就我們今年更新的指導而言，第 8 頁在同等基礎上比我們最初的指導增加了約 7000 萬美元。新指南假設今年剩餘時間的外匯匯率為 1.32。因此，橋上的最後一步顯示了匯率變化的影響。本新指南的基礎是以下假設。固體廢物定價從 8% 降至略低於 9.5%。附加費從持平變為負1%，反映出柴油價格下降，固體廢物量從持平變為負2%，基本量增長為正20 個基點，被約110 個基點的有意排放和約90 個基點的退出所抵消非核心輔助服務主要集中在我們的加拿大業務中。

Commodity prices are expected to impact consolidated revenue by negative 60 basis points, while FX is expected to contribute positive 160 basis points. The new guide also assumes that Environmental Services organic growth improved 200 basis points to around 7% and the net impact of M&A decreases to 1.7%, reflecting the out-performance in the first quarter in new M&A during the year, offset by the impact of divestitures. The new guide assumes today's commodity price environment, as previously discussed, the net impact of which is broadly in line with our original guidance.

大宗商品價格預計將對綜合收入產生負 60 個基點的影響，而外匯預計將對綜合收入產生正 160 個基點的影響。新指南還假設環境服務有機增長提高 200 個基點，達到 7% 左右，併購的淨影響降至 1.7%，反映了今年第一季度新併購的出色表現，但被併購的影響所抵消。資產剝離。正如前面所討論的，新指南假設了當今的大宗商品價格環境，其淨影響與我們最初的指導大致一致。

The expected recovery of commodity prices should provide upside to the guide throughout the back half of the year. Page 9 completes the guidance update and shows the pieces to walk from revenue to free cash flow. Adjusted EBITDA increases $55 million using the same FX rate as our original guidance or $50 million at the new FX rate. And adjusted EBITDA margin expands an incremental 50 basis points over the original pro forma guide as the widening spread of price over cost, improved asset utilization and the accretive impact of shedding low-margin volume, all drive incremental margin. Cash interest expense reduces to $490 million as the in-year savings from the debt repayment are partially offset by the increased interest costs from floating interest rates and borrowing levels higher than originally anticipated.

大宗商品價格的預期復蘇將為今年下半年的指引提供上行空間。第 9 頁完成了指導更新，並展示了從收入到自由現金流的各個部分。使用與我們最初指導相同的匯率，調整後的 EBITDA 增加 5500 萬美元，或者按照新的匯率增加 5000 萬美元。調整後的EBITDA 利潤率比原預估指南增加了50 個基點，因為價格與成本之間的差距不斷擴大、資產利用率提高以及擺脫低利潤率銷量的累積影響，所有這些都推動了利潤率的增量。現金利息支出減少至 4.9 億美元，因為浮動利率和高於最初預期的借款水平導致的利息成本增加部分抵消了債務償還帶來的年內節省。

In 2024, the full year impact of the debt repayment will be realized, and cash interest expense will be closer to $400 million. On CapEx, as we said, we see highly compelling opportunities to redeploy a portion of the proceeds from the divestitures into incremental organic growth initiatives, which we anticipate will provide accretive returns on invested capital, long into the future and further improve our ability to generate high-quality, sustainable free cash flow growth. Some of these projects were already in our queue. And the incremental expenditure reflects the acceleration of investment that would have otherwise been made beyond 2023.

2024年，債務償還的全年影響將實現，現金利息支出將接近4億美元。在資本支出方面，正如我們所說，我們看到了非常有吸引力的機會，可以將資產剝離的部分收益重新部署到增量有機增長計劃中，我們預計這將在未來很長一段時間內為投資資本提供增值回報，並進一步提高我們的創造能力高質量、可持續的自由現金流增長。其中一些項目已經在我們的隊列中。增量支出反映了本應在 2023 年之後進行的投資的加速。

Others are net new opportunities that arose this year. As Patrick said, we expect that we'll be able to deploy an incremental $200 million to $300 million of CapEx before the year is done and have updated our guidance for this gross CapEx accordingly. The breakdown of the incremental investment is approximately $150 million to $200 million into 5 MRFs, 4 of which are in Canada and one in the U.S., $25 million to $50 million into RNG project development and another $25 million to $50 million for land and building infrastructure to support these initiatives. The payback on the RNG investments are well known. At today's RIN prices, the returns are even more attractive at sub 3-year paybacks. So we're obviously motivated to accelerate these projects as quickly as possible.

其他則是今年出現的淨新機會。正如帕特里克所說，我們預計我們將能夠在今年結束之前部署增量 2 億至 3 億美元的資本支出，並相應更新了我們對該總資本支出的指導。增量投資的細目約為1.5 億至2 億美元，分為5 個MRF，其中4 個在加拿大，1 個在美國，2,500 萬至5,000 萬美元用於RNG 項目開發，另外2,500 萬至5,000 萬美元用於土地和建築基礎設施支持這些舉措。 RNG 的投資回報是眾所周知的。以今天的 RIN 價格計算，三年以下的投資回收期回報更具吸引力。因此，我們顯然有動力盡快加速這些項目。

And in certain instances, the incremental R&D capital as a result of a changing partnership economics, which we expect to be positive. On the MRFs spend, these projects are largely in response to existing EPR legislation and strategic positioning in markets where we expect EPR to arrive or where we have sufficient internal volumes. These new EPR contracts can be 10-year fee for processing-based models with accretive margin profiles and sub 5-year paybacks.

在某些情況下，由於合作夥伴經濟的變化而導致研發資本的增量，我們預計這將是積極的。在 MRF 支出上，這些項目主要是為了響應現有的 EPR 立法以及我們期望 EPR 到達或我們擁有足夠內部容量的市場的戰略定位。這些新的 EPR 合同可以是基於加工的模型的 10 年費用，具有增值的利潤概況和 5 年以內的投資回收期。

We view these investments as a reallocation of proceeds received from the divestitures. We think that offsetting this excess investment by a corresponding and equal allocation of divestiture proceeds yields an adjusted free cash flow metric that is more reflective of the current cash-generating capabilities of the business. The impacts of working capital and other operating cash flow items are expected to be close to 0, excluding the impact of the cash taxes associated with the divestitures, which we intend to exclude in our adjusted free cash flow reconciliation. The resulting balance sheet from the revised operational guide is net leverage of less than 4x exiting 2023, a level that should organically reduce another 50 to 70 basis points by the end of 2024, as shown on Page 11 of the presentation, putting us on a solid path toward an investment-grade rating in the medium term.

我們將這些投資視為對資產剝離所得收益的重新分配。我們認為，通過相應且平等地分配剝離收益來抵消這種超額投資，會產生調整後的自由現金流量指標，該指標更能反映企業當前的現金生成能力。營運資本和其他經營現金流項目的影響預計接近於 0，不包括與剝離相關的現金稅的影響，我們打算將其排除在調整後的自由現金流調節表中。修訂後的運營指南得出的資產負債表淨槓桿率低於2023 年退出時的4 倍，到2024 年底，這一水平應該會有機地再減少50 至70 個基點，如演示文稿第11 頁所示，這使我們處於中期取得投資級評級的堅實道路。

In relation to our specific expectations for the third quarter, we expect consolidated revenue of approximately $1.865 billion, just under 80% of which will be in Solid Waste. Keep in mind, the recent divestitures impact Q3 revenues by $115 million compared to the original guide, which is the driver of the atypical step-down from the second quarter. The recast FX rate also impacted sequential quarterly comparison by approximately $20 million. Solid Waste adjusted EBITDA margins are expected to be in line with the second quarter, reflecting underlying sequential expansion, offset by the 35 basis point benefit of insurance recoveries that we recognized in Q2.

就我們對第三季度的具體預期而言，我們預計綜合收入約為 18.65 億美元，其中近 80% 將來自固體廢物。請記住，與最初的指南相比，最近的資產剝離對第三季度收入產生了 1.15 億美元的影響，這是第二季度非典型下降的驅動因素。重新調整的匯率也對連續季度比較產生了約 2000 萬美元的影響。固體廢物調整後的 EBITDA 利潤率預計將與第二季度保持一致，反映出潛在的連續擴張，但被我們在第二季度確認的保險回收帶來的 35 個基點收益所抵消。

Environmental Services margins are expected to be between 30% and 31% through operating leverage realized on the peak third quarter revenues. Corporate cost margins are expected to be 10 basis points higher than Q2 on continued investment in IT development and the impact of the divested revenue. This results in adjusted EBITDA of approximately $525 million at consolidated margins of approximately 28%, representing over 200 basis points of expansion compared to the prior year. From that adjusted EBITDA, the components to get to adjusted free cash flow or cash interest costs of $115 million, a benefit from working capital net of other items of about $25 million and gross CapEx of $275 million to $300 million or approximately $160 million when incorporating the allocation that the divestiture proceeds previously discussed. That results in adjusted free cash flow for the third quarter of approximately $275 million. That's the summary of the guidance update.

通過第三季度收入峰值實現的運營槓桿，環境服務利潤率預計將在 30% 至 31% 之間。由於 IT 開發的持續投資以及收入剝離的影響，企業成本利潤率預計將比第二季度高 10 個基點。調整後的 EBITDA 約為 5.25 億美元，綜合利潤率約為 28%，與上一年相比擴張超過 200 個基點。從調整後的EBITDA 中，調整後的自由現金流或現金利息成本為1.15 億美元，扣除其他項目的營運資本收益約為2500 萬美元，資本支出總額為2.75 億美元至3 億美元，或合併時約為1.6 億美元之前討論過的剝離所進行的分配。這導致第三季度調整後的自由現金流約為 2.75 億美元。這是指南更新的摘要。

I will now pass the call back to Patrick, who will provide some closing comments before Q&A.

我現在將把電話轉給帕特里克，他將在問答之前提供一些結束語。

Thanks, Luke. This quarter shows the results of our focus on taking the exceptional platform we have built and continuing to enhance it to produce industry-leading results. We continue to use all of the self-help levers that we have at our disposal to improve asset utilization and cost efficiency. And the impact of that is demonstrated in the quarter-over-quarter underlying margin expansion. We are taking action across our network of assets to maximize the returns from our customer base. From each market area and from strategic capital investments, all confirming the relentless commitment of GFL's employees to long-term value creation for our shareholders.

謝謝，盧克。本季度展示了我們專注於利用我們已經建立的卓越平台並繼續增強它以產生行業領先的成果的結果。我們繼續利用我們擁有的所有自助手段來提高資產利用率和成本效率。其影響體現在季度環比的基本利潤率擴張中。我們正在整個資產網絡中採取行動，以最大限度地提高客戶群的回報。從每個市場領域到戰略資本投資，所有這些都證實了 GFL 員工為股東創造長期價值的不懈承諾。

As I said earlier, I'm extremely grateful to all of GFL's employees for their commitment to the success of Team Green. I will now turn the call over to the operator to open the line for Q&A.

正如我之前所說，我非常感謝 GFL 的所有員工為 Team Green 的成功做出的貢獻。我現在將把電話轉給接線員，以開通問答線路。

(Operator Instructions) Your first question will be from Michael E. Hoffman at Stifel.

（操作員說明）您的第一個問題將由 Stifel 的 Michael E. Hoffman 提出。

Patrick, let me start with price. So the whole industry has been enjoying this benefit. From your perspective, is it better retention of what you've been doing? Or did you come back through and looked for more? And then I'd like to talk about cadence because inflation is starting to ebb. So we do need to manage the thought about cadence.

帕特里克，讓我從價格開始。所以整個行業都在享受這個好處。從你的角度來看，保留你一直在做的事情是否更好？或者你回來尋找更多？然後我想談談節奏，因為通貨膨脹開始消退。所以我們確實需要管理節奏的想法。

Yes. So I think -- I mean, we had the benefit of, again, some of the surcharge programs and rationalizing the existing book that we had. We had -- a lot of that will be recognized in base -- the initial recognition that comes into base price. So that remains at elevated levels. But the -- we still have a good opportunity with the existing book of business with some underpriced customer bases, particularly on the commercial side and on the residential side to continue moving those up, coupled together with the CPI lags in the residential books of business.

是的。所以我認為——我的意思是，我們再次受益於一些附加費計劃並合理化了我們現有的書籍。我們已經——其中很多將在基礎價格中得到認可——初步認可進入基礎價格。因此，這一數字仍處於較高水平。但是，我們仍然有一個很好的機會，利用現有的業務和一些定價過低的客戶群，特別是在商業方面和住宅方面，繼續提高這些客戶群，再加上居民消費價格指數在住宅業務方面的滯後。

So all those put together, allowed us to sort of move up the guide, particularly on price, particularly with seeing where some of those CPI adjustments have been coming earlier in the year and where we think the balance of those re-rate. So we're in a good position. Obviously, with CPI coming down as that moderates, we've built that into our forecast. But I think from where we sort of sit today, we feel very comfortable with the guidance that we put out.

因此，所有這些加在一起，使我們能夠在一定程度上提高指南，特別是在價格方面，特別是在了解今年早些時候消費者物價指數調整的部分內容以及我們認為重新定價的平衡點的情況下。所以我們處於有利的位置。顯然，隨著消費者物價指數 (CPI) 的放緩而下降，我們已將其納入我們的預測中。但我認為，從我們今天的立場來看，我們對我們提出的指導感到非常滿意。

And how should we think about cadence through the second half and then into '24, because CPI is coming down? And that doesn't mean you won't maintain this really strong spread, just the rate of change will narrow.

由於 CPI 正在下降，我們應該如何考慮下半年以及 24 年的節奏？這並不意味著您不會維持這種真正強勁的利差，只是變化率會縮小。

Yes, Michael, it's Luke speaking. I think that's right. For the balance of '23, we expect that we'll call it kind of the normal cadence that sees Q3 stepping down, like another 200 basis points similar to Q1. And then the step down sort of moderates in Q4, and you're looking at sort of more like 100 basis point step down then. And then we're not in a position where we want to talk about 2024 in earnest. But as we've said historically, we think there is a constructive backdrop with the delays in CPI as well as the constructiveness of the open market dynamic to continue it but with the elevated levels of pricing. I don't think you're going to see it at 2023 levels.

是的，邁克爾，我是盧克。我認為這是對的。對於 23 年的餘額，我們預計我們會將其稱為第三季度下降的正常節奏，就像與第一季度類似的另一個 200 個基點。然後第四季度降息幅度有所放緩，你會看到降息幅度更像是 100 個基點。然後我們就不想認真討論 2024 年了。但正如我們歷史上所說，我們認為消費物價指數的延遲存在建設性的背景，而且公開市場動態也具有建設性，可以繼續上漲，但定價水平較高。我認為 2023 年你不會看到這種情況。

But to your point, we're going to be facing a cost inflation number that is well inside of what 2023 saw. So we think, as we've been saying for the last couple of quarters that there's an opportunity to continue to maintain is an outsized spread as compared to historical amounts.

但就您而言，我們將面臨的成本通脹數字遠低於 2023 年的水平。因此，我們認為，正如我們過去幾個季度一直所說的那樣，與歷史金額相比，有機會繼續維持巨大的利差。

Okay. And you have socialized in the past the idea by 2025, an adjusted cash number of $1 billion, but it would appear now that without adjustments that $1 billion is achievable by 2025. Are we looking at that correctly?

好的。過去你已經將這個想法社會化了，到 2025 年，調整後的現金數額為 10 億美元，但現在看來，如果不進行調整，到 2025 年就可以實現 10 億美元。我們的觀點正確嗎？

I would be disappointed if it wasn't there, for sure. I mean if you sort of look at what the math -- I mean, we said we think when you sort of layer in RNG and you layer in all the other aspects and now with the accelerated de-levering, I think we're certainly going to -- my expectation is we are definitely going to exceed the $1 billion in 2025.

如果沒有它，我肯定會感到失望。我的意思是，如果你看一下數學——我的意思是，我們說我們認為當你在 RNG 中分層並在所有其他方面分層時，現在隨著加速去槓桿化，我認為我們肯定是我的預期是，到2025 年，我們的銷售額肯定會超過10 億美元。

Okay. And then the RNG projects that you're adding in the accelerated spend, do they qualify for investment tax credits? So I'm going to get that capital -- some of that anyway?

好的。然後，您在加速支出中添加的 RNG 項目是否有資格獲得投資稅收抵免？所以我會得到這筆資金——無論如何？

Yes.

是的。

And can you max it out at 50%, or should we think about it as 30%?

您能否將其最大限制為 50%，還是我們應該將其視為 30%？

30%. I mean we'll push to maximize that 50% but for conservatism perspective, we're using 30%.

30%。我的意思是，我們將努力最大化 50%，但從保守主義的角度來看，我們使用 30%。

All right. And then what gives you confidence you can spend all this money in '23, given the delays that happen in other stuff?

好的。那麼，考慮到其他事情發生的延誤，是什麼讓你有信心在 23 年花掉所有這些錢呢？

So yes, we're not certain. I think from our perspective, it was prudent to sort of bring it up. I think when you think about these incremental capital spend, as you know, we've been sort of a leader, particularly on the EPR front. And a lot of those contracts have come together over the last couple of months, and they are a combination of MRFs and hauling businesses to support those, not only in Ontario but supporting them in other parts of the country. And the way I would think about it, hey, if this was an acquisition, you're basically getting, call it, somewhere between $40 million and $50 million of EBITDA at very sort of high EBITDA margins for a spend of a couple of hundred million dollars, so you're paying sort of 4 to 5x.

所以是的，我們不確定。我認為從我們的角度來看，提出這個問題是明智的。我認為，當您考慮這些增量資本支出時，如您所知，我們一直是領先者，特別是在 EPR 方面。其中許多合同是在過去幾個月中達成的，它們是 MRF 和運輸業務的結合，以支持這些合同，不僅在安大略省，而且在全國其他地區也支持它們。我的想法是，嘿，如果這是一次收購，你基本上會得到，稱之為，大約 4000 萬到 5000 萬美元的 EBITDA，而且 EBITDA 利潤率非常高，花費幾百美元百萬美元，所以你要支付四到五倍的費用。

So I think -- from our perspective, we think we have the ability to deploy those dollars. Some of this has been in planning with the expectation that this would happen. Because these negotiations started last fall but have really come together over the last couple of months.

所以我認為，從我們的角度來看，我們認為我們有能力部署這些美元。其中一些已經在計劃中，預計會發生這種情況。因為這些談判於去年秋天開始，但在過去幾個月才真正走到一起。

And Michael, the uncertainty about the ability is also the basis for the wider range but 200 to 300 on that basis. You also have to remember, as Patrick said, a lot of this is an EPR and MRFs. And while machine (inaudible) and the likes may not be able to deliver all the equipment in certain instances, there's land building retrofitting existing properties, construction. So there's other costs that can be done in preparation for it. But you're absolutely right. It's a bit of uncertainty on that (inaudible) and hence, the wider range.

而邁克爾，能力的不確定性也是更廣泛範圍的基礎，但在此基礎上200到300。您還必須記住，正如帕特里克所說，其中很多都是 EPR 和 MRF。雖然機器（聽不清）等在某些情況下可能無法交付所有設備，但仍需要土地建設來改造現有的房產和建築。因此，還可以為此準備其他費用。但你是絕對正確的。這有點不確定（聽不清），因此範圍更廣。

Next question will be from Kevin Chiang at CIBC.

下一個問題將由 CIBC 的 Kevin Jiang 提出。

Maybe just on how to think about CapEx moving past 2023, gross CapEx -- and I appreciate you have offsets here given the successful asset divestitures. But if I think of what the gross CapEx intensive the business is in '24 and onwards? Should we be holding at these levels kind of 14%, 15% of revenue, just given the pipeline of opportunities?

也許只是關於如何考慮 2023 年之後的資本支出、總資本支出——考慮到成功的資產剝離，我很欣賞您在這裡進行了抵消。但如果我考慮一下 24 年及以後業務的總資本支出密集度是多少？考慮到機會的渠道，我們是否應該將收入的 14%、15% 保持在這些水平？

Or you kind of step back down to let's say, 10%, 11%, 12%, like you were assuming in the original forecast earlier this year?

或者你會退一步說，10%、11%、12%，就像你在今年早些時候最初的預測中所假設的那樣？

Yes, Kevin, it's Luke speaking. I think characterizing this year as an outlier is the appropriate approach, and it's really by function of these divestitures, proceeds being reallocated. The other component to this is RNG. And if you look at -- our total spend over all of the projects in totality might end up being at a sort of gross level in a sort of $500 million level. But when you think about 30% ITCs, you think about 40% to 50% project level financing. Your actual equity check at the end of the day is going to be materially less than that. But sometimes, there's timing differences as part of this year's spend is the ITCs are going to come next year, but we want to invest the capital this year.

是的，凱文，我是盧克。我認為將今年定性為異常值是適當的方法，這實際上是根據這些資產剝離的功能，收益被重新分配。另一個組成部分是 RNG。如果你看一下——我們所有項目的總支出最終可能會達到 5 億美元的水平。但當您想到 30% 的 ITC 時，您就會想到 40% 到 50% 的項目級融資。最終你的實際淨值支票將大大低於這個數字。但有時，時間上會存在差異，因為今年支出的一部分是 ITC 將於明年進行，但我們希望今年投入資金。

And so we are going to have a bit of this gross versus netting as we deploy into RNG, but I think when you look at our underlying business, you think about the relatively lower landfill concentration that we have because of the Canadian dynamic and the Environmental Services business that both run at lower capital intensity than industry averages. We see a clear path to live at that sort of 11% level, which is inclusive of the normal course growth. To the extent attractive, compelling opportunity to deploy capital arise, we'll talk about it at times like this. But I think the relative dollars at play as we go forward will become less impactful to the overall, and that in and around 11% is the right intensity to think about.

因此，當我們部署到RNG 時，我們將會有一些總收入與淨收入的對比，但我認為，當您查看我們的基礎業務時，您會想到由於加拿大的動態和環境因素，我們的垃圾填埋場集中度相對較低。服務業務的資本密集度均低於行業平均水平。我們看到了一條明確的道路，可以維持在 11% 的水平，其中包括正常的增長。如果出現有吸引力的、令人信服的資本配置機會，我們會在這樣的時候討論它。但我認為，隨著我們前進，相對美元對整體的影響將變得越來越小，而 11% 左右是值得考慮的正確強度。

Excellent. That's great color. And then you laid out a, I'll say, a target to mid-3x leverage exiting 2024. I guess when I think back to your Investor Day, you kind of laid out a number of acquisition scenarios. Just if you're able to share with us, which of those three should we be thinking about to enter the mid-3s? Are you kind of back to an elevated M&A scenario in your mid-3s? Or are you kind of in the middle of the pack? Does it assume no M&A? Any color there would be helpful?

出色的。那顏色真棒。然後，我想說，您制定了 2024 年槓桿率達到 3 倍中期的目標。我想，當我回想起您的投資者日時，您有點列出了一些收購方案。如果您能與我們分享一下，我們應該考慮這三個人中的哪一個進入中三？在你三歲左右的時候，你是否又回到了併購的高峰期？或者你屬於中間人嗎？是否假設沒有併購？任何顏色都會有幫助嗎？

Yes. Listen, I think from where we sit today, we have some wonderful acquisition opportunities that will be very compelling for us to execute on in the back half of this year. So we put out this guide. We've taken a conservative view on the guide. Obviously, every quarter since we've been public, our philosophy has been sort of under promise and over deliver. So I think that theme will continue. The backdrop is we've committed to this year, keeping leverage sort of around 4 terms. And we will do that with the model we have as well as executing on the M&A. So where we sort of sit from the company's first time in history, given the free cash flow profile of the business now and what that looks like for next year, we've thrown out a number next year for almost $875 million of free cash flow.

是的。聽著，我認為從我們今天的立場來看，我們有一些絕佳的收購機會，這對我們在今年下半年執行來說非常有吸引力。所以我們推出了這份指南。我們對該指南持保守看法。顯然，自從我們上市以來的每個季度，我們的理念都有點兌現不足。所以我認為這個主題將會繼續下去。背景是我們今年承諾將槓桿率保持在 4 個期限左右。我們將利用我們現有的模型以及執行併購來做到這一點。因此，考慮到公司現在的自由現金流狀況以及明年的情況，我們從公司歷史上第一次的情況來看，我們已經給出了明年近 8.75 億美元自由現金流的數字。 。

When you look at that, coupled together with the free cash flow in the back half of the year, we're going to be able to do both. The business is going to grow organically, it's going to naturally de-lever. M&A, taking a bunch of the free cash flow and reinvesting that into our M&A program. Again, they'll all be de-levering events. So we think we're going to get there irregardless of our normal sort of M&A spend.

當你看到這一點，再加上下半年的自由現金流，我們將能夠做到這兩點。業務將有機增長，自然會去槓桿化。併購，將大量自由現金流重新投資到我們的併購計劃中。同樣，它們都將是去槓桿化事件。因此，我們認為，無論我們的正常併購支出如何，我們都會實現這一目標。

And Kevin, the math today, I mean, it's pretty straightforward. If you think about organically, the business could de-lever to low 3s, how much M&A will temper that otherwise de-levering? It's roughly 4 basis points of leverage for every $25 million of EBITDA you buy. And so if you put that together, if you [5 50] to $100 million of EBITDA that has an impact of somewhere to the tune of sort of 10 to 20 basis points of incremental leverage.

凱文，我的意思是，今天的數學非常簡單。如果你從有機角度考慮，企業可以將槓桿率降低到 3 左右，那麼併購將在多大程度上緩和這種去槓桿化的情況？您每購買 2500 萬美元的 EBITDA，大約就有 4 個基點的槓桿。因此，如果你把它們放在一起，如果你 [5 50] 到 1 億美元的 EBITDA，這會對增量槓桿產生 10 到 20 個基點的影響。

Okay. So that's great color. I guess last one for me. Environmental Services, long-term target of getting to 30% EBITDA margin. You kind of hit that in certain quarters, at least very high-20s. Just when you think of getting there, I guess, on an annualized basis, is it trying to reduce the seasonality of the margins, which are a little bit lower in the shoulder quarters? Does everything have to come up by (inaudible) basis points?

好的。所以這是很棒的顏色。我想最後一張適合我。環境服務，長期目標是 EBITDA 利潤率達到 30%。你在某些方面達到了這個目標，至少是在 20 多歲的時候。就在你想到達到這個目標時，我想，按年化計算，它是否試圖減少利潤率的季節性，因為肩膀季度的利潤率略低一些？一切都必須以（聽不清）為基點嗎？

Or do you just have to kind of hit it out of the park even more so in the Q2 to Q3 quarter? Just wondering how you think about getting to that 30% overall, just given the seasonality in that profitability?

或者你是否需要在第二季度到第三季度更加努力？只是想知道，考慮到盈利能力的季節性，您如何看待總體上達到 30%？

Yes, there's always going to be a large element of seasonality in that business just because for the simple fact that it's levered to Canada. So we are going to have that normal cadence each and every year. That being said, there's going to be a high focus on quality of revenue and surcharges that we believe we should be getting in that line of business. So I think when you look at it, I think there's the ability to just really take up margins. The Q1 margins will obviously always be the lowest. Q4 will be the next roll up. And Q2 and Q3 will be the highest. We have to push Q2 and Q3 exceedingly above sort of where they are today, and we have to get those surcharges implemented to offset the sort of Q1 and Q4 dynamics. So it's going to be a bit of a mixed bag, but I think we have a clear path to sort of getting there. And I think you're seeing that come through quarter-over-quarter, year-over-year.

是的，該業務總​​是存在很大的季節性因素，只是因為它對加拿大有槓桿作用。因此，我們每年都會保持正常的節奏。話雖這麼說，我們將高度關注收入質量和附加費，我們認為我們應該進入該業務領域。所以我認為當你看到它時，我認為有能力真正佔據利潤。第一季度的利潤率顯然永遠是最低的。第四季度將是下一個匯總。 Q2和Q3將是最高的。我們必須將第二季度和第三季度的業績推至遠遠高於當前水平的水平，並且我們必須實施這些附加費以抵消第一季度和第四季度的動態。因此，這將是一個複雜的過程，但我認為我們有一條明確的道路可以實現這一目標。我認為你會看到這一點逐季度、逐年出現。

And Kevin, you got to remember the foundation of that business is largely predicated on these post-collection facilities we have across Canada that are very high fixed cost base in nature. And as you think about the revenue growth, we're now putting in the utilization improvement of those assets, you get a lot of operating leverage coming in that. You're seeing that this year. And as we roll that forward, what was used to be $500 million, $600 million of revenue in that segment, we're now going to be approaching $1.5 billion. And you're going to get meaningful operating leverage at a much more fixed cost base.

凱文，你必須記住，該業務的基礎很大程度上取決於我們在加拿大各地擁有的這些收後設施，這些設施本質上是非常高的固定成本基礎。當你考慮收入增長時，我們現在正在提高這些資產的利用率，你會從中獲得大量的運營槓桿。今年你就會看到這一點。當我們向前推進時，該領域過去的 5 億美元、6 億美元收入現在將接近 15 億美元。而且您將以更加固定的成本基礎獲得有意義的運營槓桿。

Next question will be from Jerry Revich at Goldman Sachs.

下一個問題將由高盛的傑里·雷維奇提出。

This is Adam Bubes on for Jerry Revich today. Can you talk to the incremental, I think it was $25 million to $50 million RNG investments. Does that include any new projects? And should that change how we're thinking about the cadence of projects beyond 2023?

我是 Adam Bubes，今天為 Jerry Revich 發言。你能談談增量投資嗎？我認為 RNG 的投資是 2500 萬到 5000 萬美元。這包括任何新項目嗎？這是否會改變我們對 2023 年以後項目節奏的看法？

So Adam, it's Luke speaking. Nothing is new in that number. There is one project that was previously going to be a partnership that we're now going to go alone, in that it was a partnership with not one of our core partners but a tertiary partner. And we've now bought them out, are going to go alone and accelerating some of the spend on that. So we're still looking at the same number of projects in totality -- the reality is, as I was speaking before, with a combination of timing of receipt of ITCs as well as project level financing, there's just a bit of a change in the cadence of our equity checks.

亞當，是盧克在說話。這個數字並不新鮮。有一個項目以前是合作夥伴關係，但我們現在要單獨進行，因為它不是與我們的核心合作夥伴之一合作，而是與第三合作夥伴合作。我們現在已經收購了它們，將單獨行動並加快部分支出。因此，我們仍然在關注相同數量的項目總數 - 現實是，正如我之前所說，結合收到 ITC 的時間以及項目級別融資，只有一點變化我們股權檢查的節奏。

And so I think when you get to the end of the next couple of years, the actual net investment will remain the same, but just there will be some lumpiness from quarter-to-quarter.

因此，我認為，當你到未來幾年末時，實際淨投資將保持不變，但每個季度都會出現一些波動。

Understood. And then with RIN fee prices now in $3 range, can you just update us on how you're thinking about your offtake strategy in RNG? Do you have a targeted percent that you intend to sell into transportation markets versus long-term arrangements?

明白了。 RIN 費用現在在 3 美元範圍內，您能否向我們介紹一下您在 RNG 中的承購策略的最新情況？與長期安排相比，您是否有計劃向運輸市場銷售的目標百分比？

Yes. So again, currently in process, I think our longer-term strategy may differ from the shorter-term strategy. But in the longer term, like we said, we want to get to a point where we basically have 60% to 65% of our offtake [parsed] off and sort of long-term agreements. Obviously, we want the right price for that. Obviously, with a $3 RIN, that helps the longer-term strategy for those longer offtake agreements. But we want to get to a point where we're going to be at sort of a longer-term offtake agreements in the sort of 60% to 65% range.

是的。因此，在目前的過程中，我認為我們的長期戰略可能與短期戰略有所不同。但從長遠來看，就像我們所說的那樣，我們希望達到這樣一個程度：我們基本上可以[解析] 60% 到 65% 的承購量並達成某種長期協議。顯然，我們想要合適的價格。顯然，3 美元的 RIN 有助於那些長期承購協議的長期戰略。但我們希望達成 60% 至 65% 範圍內的長期承購協議。

Got it. That's helpful. And then lastly, really strong margin performance in the quarter with margins well ahead of normal seasonality. Just looking at the back half guidance, it looks to be implying sequential margins basically in line with normal seasonality. And it also looks like your underlying inflation is decelerating much faster than price. So just any puts and takes around the sequential margin cadence from here relative to normal seasonal trends?

知道了。這很有幫助。最後，本季度的利潤率表現非常強勁，利潤率遠遠高於正常的季節性。僅看後半部分的指引，它似乎意味著連續利潤率基本上與正常的季節性相符。而且看起來你的潛在通貨膨脹的減速速度比價格的減速速度要快得多。那麼，相對於正常的季節性趨勢，是否有任何圍繞連續保證金節奏的看跌期權和看跌期權？

Yes. So I think last year sort of defied the normal seasonality by virtue of the inflationary ramp that was really more focused in the second half of this year. And so as that's unwinding, it's causing some impact the current year sort of seasonality cadence. But look, for the Q3 guide that we've put out, effectively saying Solid Waste continues to expand from where it is today, just normalized for the insurance recoveries that we received in Q2, which created about a 30, 40 basis point benefit to Q2. So if you're stripping that out, continued sequential improvement in Solid Waste. And that's really a function of that continuing widening spread. Yes, cost inflation is anticipated to moderate even further in Q3, and you're going to be in a mid-single-digit number.

是的。因此，我認為去年的通脹上昇在某種程度上違背了正常的季節性，而今年下半年的通脹上升更為集中。隨著這種情況的緩解，它會對今年的季節性節奏產生一些影響。但是，看看我們發布的第三季度指南，實際上是說固體廢物從今天的情況繼續擴大，剛剛對我們在第二季度收到的保險賠償進行了標準化，這為我們創造了大約30 到40個基點的收益Q2。因此，如果您要剔除這一點，請繼續持續改進固體廢物。這確實是傳播不斷擴大的結果。是的，預計第三季度成本通脹將進一步放緩，並且您的數字將處於中個位數。

And as pricing sort of comes down accordingly, I think you'll get a little bit more spread above those too. Environmental Services is similar to the comment we were saying before, really firing on all cylinders, but with the Q3 peak revenue, so you're going to get the sort of optimized operating leverage. And that's why we see now a path that margins in that segment for Q3 could touch 31%. And then Q4, obviously, as the seasonal cadence, you have a bit of a step down from there as you move into the winter season.

隨著價格相應下降，我認為您也會獲得比這些更高的價差。環境服務與我們之前所說的評論類似，確實在全力以赴，但隨著第三季度收入的峰值，因此您將獲得某種優化的運營槓桿。這就是為什麼我們現在看到第三季度該細分市場的利潤率可能達到 31% 的原因。然後是第四季度，顯然，隨著季節節奏的變化，當你進入冬季時，你會從那裡下降一些。

Next question will be from Tyler Brown at Raymond James.

下一個問題將來自雷蒙德·詹姆斯的泰勒·布朗。

Luke, I think you touched on it, but volumes were a bit weak in the quarter, it sounded a bit by design. You gave some color, but second half volumes are maybe down 2% on my math. Is that about right? And will there be any difference between 3 and 4?

盧克，我想你提到了這一點，但本季度的銷量有點弱，聽起來有點有意為之。你給了一些顏色，但根據我的計算，後半卷可能下降了 2%。是這樣嗎？ 3和4之間會有什麼區別嗎？

Yes. So I'd say your math is right, about what the second half is looking at. And it's really just a continuation of what we are articulating in the first. So as I said, I think the pull forward from Q2 into Q1. So I think looking at first half in totality makes more sense, negative 160 basis points of volume. If you break that down, you had about 60 basis points, which was $15 million of what I'm calling this non-core ancillary services. This is work stuff like wood shipping or gravel hauling and other ancillary type services, primarily in secondary markets that we've been doing for a while, but we really don't make any money there, and we're exiting that. So that's one component of it, and that will sort of basically maintain each quarter throughout the year until that work is gone. For the first half, we have about 20 basis points of the event-driven Special Waste volumes.

是的。所以我想說你的數學是正確的，關於下半年的內容。這實際上只是我們在第一篇中闡述的內容的延續。正如我所說，我認為從第二季度到第一季度的拉動。因此，我認為從整體上看上半年的情況更有意義，成交量下降了 160 個基點。如果你細分的話，你會發現大約有 60 個基點，相當於我所說的非核心輔助服務的 1500 萬美元。這是像木材運輸或礫石運輸和其他輔助類型服務這樣的工作，主要是在二級市場，我們已經做了一段時間了，但我們在那裡確實賺不到任何錢，我們正在退出。所以這是它的一個組成部分，並且基本上會在全年每個季度維持下去，直到這項工作完成。上半年，事件驅動的特殊廢物量增加了約 20 個基點。

If you look last Q2, Special Waste volumes or Landfill volume in the U.S. was plus 12%. I think we benefited from cleanup from some tornadoes and other events. That's always going to have a trend that are concerning there, but rather just the normal sort of change. So I'm anticipating by the end of the year, that sort of neutralized more back to sort of flat sort of level. And then what you're left with for the first half is this sort of 80 basis points or call it $20 million of the net of this intentional [resi] shedding offset by real underlying volume growth. And the intentional shedding, look, it's primarily in residential collection, although some is in IC&I. And this is a function of our strategy of price over volume. And I think, by and large, it's working and you can see it in the numbers and in the margin. But certain select handful of residential large accounts that are unwilling to pay for our service, we're going to walk away from, and we're happy to do so in this environment.

如果您查看上一季度，您會發現美國的特殊廢物量或垃圾填埋量增加了 12%。我認為我們從一些龍捲風和其他事件的清理工作中受益。總會有一種令人擔憂的趨勢，但這只是正常的變化。因此，我預計到今年年底，這種情況會恢復到平穩的水平。然後，上半年剩下的就是這種 80 個基點，或者稱之為 2000 萬美元，是由實際基礎交易量增長所抵消的故意 [resi] 削減的淨額。看起來，有意脫落的東西主要是在住宅收藏中，儘管有些是在 IC&I 中。這是我們的價格勝於數量策略的函數。我認為，總的來說，它正在發揮作用，你可以從數字和利潤中看到它。但某些選定的少數住宅大客戶不願意為我們的服務付費，我們將放棄，並且我們很樂意在這種環境下這樣做。

So for the back half of the year where you end up with the roughly 200 basis points or $100 million of negative volume for the year as a whole, you roughly have half of that as a result of the exiting the non-core ancillary services. Another so to call it $60 million from the non-regrettable losses or intentional shedding. And then you have an underlying $10 million, $20 million of positive growth from our normal course service level and increases in new customers.

因此，在今年下半年，全年的成交量將出現大約 200 個基點或 1 億美元的負交易量，其中大約一半是由於非核心輔助服務的退出而造成的。另一項所謂的 6000 萬美元來自不可挽回的損失或故意剝離。然後，我們的正常課程服務水平和新客戶的增加將帶來 1000 萬美元、2000 萬美元的潛在正增長。

Okay. Very detailed, very helpful. I appreciate that. Patrick, I want to talk about repairs and maintenance, because it sounds like the OEs are starting to deliver. It seems like pulp prices are dis-inflating, and I think rentals might be down next year. But does R&M feel like it could be a uniquely good story in '24?

好的。非常詳細，非常有幫助。我很感激。帕特里克，我想談談維修和維護，因為聽起來原始設備已經開始交付。紙漿價格似乎正在回落，我認為明年的租金可能會下降。但 R&M 是否覺得它可能是 24 世紀一個獨特的好故事？

Yes. I mean we're -- we're still basically 100 -- almost 100 basis points more than where we've been historically. So yes, I think we're going to -- this year, it's going to be 50 basis points ahead of our -- what our original plan was at the beginning of the year, but things are certainly coming down. We're certainly getting more truck deliveries, and the timeliness of those truck deliveries is coming on board. Now from an OEM perspective, it's obviously moderating prices on supply of parts as well. So all of those coupled together are coming down. I mean, if you look at from us -- from a rental truck perspective, we are -- or we are renting a quarter amount of the truck that we were renting a year ago, right? So that's all in the R&M line. So yes, you're right. And I think as that moves into '24 and '25, that is certainly going to moderate and be a good news story as we move over those next 2 years.

是的。我的意思是，我們基本上仍然比歷史上的水平高出 100 個基點。所以，是的，我認為今年我們將比我們年初的原始計劃提前 50 個基點，但情況肯定會下降。我們肯定會收到更多的卡車交付，而且這些卡車交付的及時性正在提高。現在從原始設備製造商的角度來看，它顯然也在降低零部件供應的價格。所以所有這些耦合在一起的東西都會下來。我的意思是，如果你從我們的角度來看——從租賃卡車的角度來看，我們是——或者我們租賃的卡車數量是一年前租賃的四分之一，對嗎？這就是 R&M 系列的全部內容。所以是的，你是對的。我認為，隨著進入 24 和 25 年，這種情況肯定會有所緩和，並且在我們接下來的兩年中成為一個好消息。

Okay. We'll keep an eye on that. And then, Luke, on the $1.65 billion gross proceeds, I think you said $400 million maybe in taxes and transactions that's going to be out the door. Has any of that been paid? If not, when will that be paid? And where will that show up on the cash flow statement?

好的。我們會密切關注這一點。然後，盧克，關於 16.5 億美元的總收益，我想你說過 4 億美元可能來自稅收和交易，這些都將被排除在外。其中有沒有被支付過？如果沒有，什麼時候支付？這將顯示在現金流量表的什麼位置？

Yes. So maybe a modest amount of transaction costs have been paid roughly, I think of it, $360 million of taxes, $40 million of transaction costs, round numbers to get you to that $400 million. A modest amount of transaction costs would have been paid in Q2. The rest was accrued, and you can see that in the large transaction cost adjustment we have in the P&L. The balance of those transaction costs will be paid in Q3 and will show up in our normal transaction cost bucket. The cash taxes will be paid sort of roughly, call it, half in Q3 and half in Q4, maybe actually more like 60-40 towards Q3. And will show up in our cash tax section and the cash flow. We may have some incremental disclosure to break it out, so you can see the impact of what we're calling the sort of onetime versus ongoing.

是的。因此，我認為，也許已經支付了適量的交易成本，大概是 3.6 億美元的稅費，4000 萬美元的交易成本，四捨五入後就達到了 4 億美元。第二季度將支付少量的交易成本。其餘的都是應計的，您可以看到，在損益表中我們進行了較大的交易成本調整。這些交易成本的餘額將在第三季度支付，並將顯示在我們的正常交易成本桶中。現金稅將大致繳納，可以這麼說，一半在第三季度，一半在第四季度，實際上可能更像是第三季度的 60-40。並將顯示在我們的現金稅部分和現金流量中。我們可能會進行一些增量披露來打破它，這樣你就可以看到我們所說的一次性與持續的影響。

Okay. That's helpful. And then my last one, kind of another question along maybe a similar line. But a couple of your RNG plants are kind of in that initial start-up phase. But how much EBITDA contribution are you baking in on those facilities? And how is the accounting going to work?

好的。這很有幫助。然後是我的最後一個問題，可能是類似的另一個問題。但你們的一些 RNG 工廠正處於初始啟動階段。但您從這些設施中獲得了多少 EBITDA 貢獻？會計工作如何進行？

Are you guys (inaudible) consolidated, so will you just have some sort of an add-back in the EBITDA reconciliation? Or how is that going to work just practically?

你們（聽不清）是否已合併，那麼你們是否會在 EBITDA 調節中進行某種回加？或者說這實際上是如何運作的？

So for 2023, the guide anticipated an inclusion of an immaterial number, I think it was about $10 million in total, with the delays, I mean, that might be a little light, but the RIN pricing probably offset. So the 2020 number is sort of as per the original guide.

因此，對於 2023 年，該指南預計會包含一個無關緊要的數字，我認為總計約為 1000 萬美元，我的意思是，延遲可能有點輕，但 RIN 定價可能會抵消。因此，2020 年的數字與原始指南類似。

2023.

2023 年。

The 2023 number. As you get into 2024 and that starts ramping up, yes, Tyler, I think that's right. These are joint ventures that are unconsolidated. And our perspective is the GAAP-based accounting answer doesn't accurately reflect what our investors are looking for. So you will have an adjustment to remove the GAAP-based net income that you're picking up and replace it with your proportionate share of the EBITDA.

2023年的數字。進入 2024 年，這種情況開始加劇，是的，泰勒，我認為這是對的。這些是未合併的合資企業。我們的觀點是，基於 GAAP 的會計答案並不能準確反映我們投資者的需求。因此，您將需要進行調整，以刪除您所獲得的基於 GAAP 的淨利潤，並將其替換為您在 EBITDA 中的比例份額。

So we'll preview that as part of our 2024 guide to make sure everyone understands very clearly what we're showing there, but we anticipate something to that effect.

因此，我們將在 2024 年指南中對此進行預覽，以確保每個人都非常清楚地了解我們在那裡展示的內容，但我們預計會出現這種效果。

Next question will be from Walter Spracklin at RBC Capital Markets.

下一個問題將由加拿大皇家銀行資本市場部的 Walter Spracklin 提出。

So on the intentional shedding of business, we're hearing that from your peers as well. Just a basic question. Where is that being shed to? Are you seeing smaller players now picking up some of this? Is it going to some of the majors that are seeing a better opportunity through combining with their own operator? Just curious as to what your experience is where a couple of year -- or at least one of your peers is talking about some pretty significant, also intentional shedding of business as to where it's ending up?

因此，關於有意剝離業務，我們也從您的同行那裡聽到了這一點。只是一個基本問題。那東西流到哪裡去了？您是否看到較小的參與者現在正在接受其中的一些？是否會流向一些通過與自己的運營商合併看到更好機會的專業公司？只是好奇你的經歷是怎樣的，或者至少你的一位同行正在談論一些非常重要的、有意的業務剝離，以及它的結局是什麼？

Yes. I mean, for the most part, I mean, it's in very selective market. It's been a mixture of both. It's been some strategics that have some strategic opportunities there, whether that's internalization of streams into their landfills, et cetera. And in a couple of the markets, it's been municipality taking a chance on a smaller type collector in a market that's sort of a recent start-up. History tells us with those we always generally end up with the work coming back to us over the course of the next sort of 1 year to 1.5 years. And from our perspective, particularly in this OEM environment of getting new trucks, and the cost of capital, we want to be rewarded appropriately for it. So in some of these residential contracts came with acquisitions, et cetera, I tell everybody in the organization, we're a for-profit organization. We don't need to practice. So there's no sense in practicing on some of these residential contracts, particularly in this environment.

是的。我的意思是，在很大程度上，我的意思是，它是在非常有選擇性的市場中。這是兩者的混合體。一些戰略在那裡有一些戰略機會，無論是將水流內部化到垃圾填埋場，等等。在一些市場中，市政當局在一個新近成立的市場上嘗試購買小型收集器。歷史告訴我們，我們通常都會在接下來的 1 年到 1.5 年內將工作返還給我們。從我們的角度來看，特別是在這種獲得新卡車的 OEM 環境以及資本成本下，我們希望因此獲得適當的獎勵。因此，在其中一些住宅合同中附帶了收購等內容，我告訴組織中的每個人，我們是一個營利性組織。我們不需要練習。因此，在某些住宅合同上進行實踐是沒有意義的，特別是在這種環境下。

If we can take those good dollars and deploy them into things that we're -- actually we're going to make money from. So it's been a bit of a mixture of both.

如果我們能把這些好的錢投入到我們所做的事情上——實際上我們就能從中賺錢。所以這是兩者的混合體。

And there's no worry here that this is representative of a lack of discipline among smaller players or anything to that?

不用擔心這代表了小球員缺乏紀律或其他什麼？

No. No.

不，不。

Okay. On the margin, Luke, you mentioned margin spread expansion in 2023, and that comes after you saw some cost inflation really ramp in 2022. And your mechanisms kicking in nicely now in '23 to be able to allow for an expanding spread, whereas perhaps it was contracting last year or was pressured last year. How do you look at it for next year? Are you expecting more of a normalized -- in other words, is there less benefit from an expanding spread? Or could we see that spread last longer into 2024, based on how your mechanisms work?

好的。在邊際上，盧克，您提到了2023 年的保證金利差擴大，這是在您看到2022 年一些成本通脹確實上升之後。您的機制現在在23 年很好地發揮作用，能夠允許利差擴大，而也許去年是收縮的，或者是去年受到壓力的。您如何看待明年的情況？您是否期望更多的正常化——換句話說，擴大利差帶來的好處是否會減少？或者，根據你們的機制如何運作，我們是否可以看到這種傳播會持續更長時間到 2024 年？

Yes, Walter. So I think as we've been saying consistently, we anticipate '24 being another outsized year. And it's a combination of not just the natural spread expansion that you're going to have. But there's also -- I mean Patrick just signed an R&M. That is not going to get fully sorted this year and will represent an incremental tailwind. You can talk about commodities. I mean we are very optimistic. Commodities will start rebounding this year, but I think that's going to be a real tailwind going into next year. I'm not saying ample of what should be a tailwind.

是的，沃爾特。因此，我認為正如我們一直所說的那樣，我們預計 24 年將是另一個重要的一年。這不僅僅是您將要擁有的自然價差擴張的結合。但還有——我的意思是帕特里克剛剛簽署了一份 R&M。今年這個問題不會得到完全解決，並將代表增量順風。你可以談論商品。我的意思是我們非常樂觀。大宗商品今年將開始反彈，但我認為這將成為明年的真正推動力。我並不是說太多應該是順風的事情。

RNG, as that comes on for us, we have a relatively immaterial amount in the current consolidated results, and it's very high margin. So I think the natural price versus cost inflation spread dynamic unto itself, should provide an opportunity for outsized expansion. But when you start layering those other pieces on top, we see the setup for 2024 to be an exceptional year.

RNG，對於我們來說，我們在當前的合併業績中的金額相對較小，而且利潤率非常高。因此，我認為自然價格與成本通脹的動態擴散本身應該為大規模擴張提供機會。但當你開始將其他作品疊加在一起時，我們會發現 2024 年將是非凡的一年。

Okay. That's fantastic. And the last question here is on the CapEx spend, and it seems like a larger number to happen all at once. And just curious, is this something you were always contemplating and just mindful of dollars spent and keeping everything in check? And with the proceeds now from the acquisition, you saw an opportunity to strike on this one. Or is it the opportunity and the capability and you hit as a result of that? Just curious as to how they came up.

好的。這太妙了。這裡的最後一個問題是關於資本支出的，而且這似乎是一個更大的數字會同時發生。只是好奇，這是否是您一直在考慮的事情，並且只關注花費的美元並控制一切？憑藉現在的收購收益，您看到了抓住這一機會的機會。或者是機會和能力，你因此而獲得成功？只是好奇他們是如何出現的。

Yes. So I think as part of the Divestiture program. We knew that there was going to be an opportunity particularly with where we saw the EPR opportunity going at the last half of the year, meaning in 2022. A lot of that work was tendered and developed with us in the sort of first quarter of 2023 and really formalized in the second quarter of 2023. So I think from our perspective, we -- our anticipation was that as we saw the divestiture sort of unfolding that we actually ran a little bit harder at the EPR opportunity than maybe we would have and taking on the amount of work that was available under that program. But listen, from where I sit today, there is no better use of capital, putting the RNG spend aside, then these partnerships that we've developed with the producers in Canada, particularly with some of these MRFs contracts ranging from 10 to 20 years (inaudible) to meet their sustainability goals. I mean they are -- it's a wonderful partnership. It's a win-win for both of us.

是的。所以我認為這是剝離計劃的一部分。我們知道將會有一個機會，特別是我們在今年下半年（即 2022 年）看到 EPR 機會。很多工作都是在 2023 年第一季度與我們一起招標和開發的並在2023 年第二季度真正正式化。所以我認為，從我們的角度來看，我們的預期是，當我們看到剝離的展開時，我們實際上比我們可能會更努力地抓住EPR 機會，並且承擔該計劃下可用的工作量。但是聽著，從我今天坐的位置來看，除了RNG 支出之外，我們與加拿大製作人建立的這些合作夥伴關係，特別是其中一些MRF 合同的期限從10 到20 年不等，沒有更好的資本利用方式了（聽不清）以實現他們的可持續發展目標。我的意思是他們是——這是一種美妙的合作關係。這對我們雙方來說都是雙贏的。

And the fact that we've moved these to fixed fee processing contract, so we don't have any commodity volatility. I mean, it's just -- it's a wonderful thing where you're basically going to be at around 4-year paybacks on these with 10- to 20-year contracts, coupled together with the vertical integration of now putting the collection contract together with them. Yes, we just didn't see a better opportunity to deploy those dollars. And given the fact that we even exceeded our internal expectations of getting an extra $150 million of proceeds. From what we anticipated when we started the process, this was just a logical place to put those dollars. And again, the setup that gives us for '24 and '25 is going to lead to a significantly above-average growth CAGR as we move out into '24 and '25.

事實上，我們已將這些轉移到固定費用處理合同中，因此我們沒有任何商品波動。我的意思是，這是一件美妙的事情，你基本上可以在 10 到 20 年的合同中獲得大約 4 年的回報，再加上現在將收集合同與他們。是的，我們只是沒有看到更好的機會來部署這些資金。事實上，我們甚至超出了我們獲得額外 1.5 億美元收益的內部預期。從我們開始這個過程時的預期來看，這只是放置這些資金的合乎邏輯的地方。再說一次，當我們進入“24 和 25 年”時，我們為“24 年”和“25 年”提供的設置將導致複合年增長率顯著高於平均水平。

Next question will be from Stephanie Yee at JPMorgan.

下一個問題將由摩根大通的 Stephanie Yee 提出。

Growth is price-driven and surcharge driven versus the processing volume side?

增長是價格驅動的還是附加費驅動的，而不是處理量方面的？

Yes, Stephanie, it's Luke speaking. I mean if you look at the typical sort of growth algorithm and its always business, you probably have 80% coming from price and 20% from volume. I think our Environmental Services business today is probably the inverse of that. Now it's not, it's homogenous of a mix, so it's harder to do exact, but it has certainly been a volumetric growth story and is only recently pivoting the price. So certainly a larger portion in this quarter versus the prior was price, and you're going to continue to see that migration towards a price-centric growth story. But that's what gets us excited about the opportunity. Because as we start being more thoughtful about the quality of revenue and ensuring we're getting priced appropriately, we see the opportunity for meaningful incremental operating leverage over where we are today.

是的，斯蒂芬妮，我是盧克。我的意思是，如果你看看典型的增長算法及其始終的業務，你可能有 80% 來自價格，20% 來自數量。我認為我們今天的環境服務業務可能與此相反。現在不是了，它是同質的混合物，所以很難準確地做到這一點，但它肯定是一個體積增長的故事，並且最近才開始改變價格。因此，與上一季度相比，本季度的更大一部分肯定是價格，您將繼續看到向以價格為中心的增長故事的轉變。但這正是讓我們對這個機會感到興奮的原因。因為當我們開始更加考慮收入質量並確保我們的定價適當時，我們看到了比我們今天的水平有意義的增量運營槓桿的機會。

Okay. Got it. That makes sense. And can you give us a sense of how the different business lines put in Environmental Services is doing?

好的。知道了。這就說得通了。您能否讓我們了解一下環境服務中不同業務線的表現如何？

I mean just at a high-level bifurcation, people have historically asked about our sort of oil and oil-related exposure and obviously, that business with a decrease in energy costs, is realizing revenues at a sort of lower point than it had sort of historically. But more and more the diversification efforts that we've undertaken, I mean that business is representing sub-10% of the overall as we go forward. So really, when you think about our broad-based sort of environmental services across the collection and processing, we continue to see strength that's particularly levered in Canada. I think the brand we have created and the quality of the service that we're offering is very valued by our customers, and we continue to see phenomenal sort of growth as you've seen over the past sort of 1 year or 2.

我的意思是，就在高水平的分歧上，人們歷來詢問我們的石油和與石油相關的風險敞口，顯然，能源成本下降的業務正在以比以前更低的水平實現收入。從歷史上看。但我們越來越多地採取多元化努力，我的意思是，隨著我們的前進，業務量佔整體業務的比例不到 10%。因此，實際上，當您考慮我們在收集和加工過程中提供的基礎廣泛的環境服務時，我們會繼續看到加拿大特別利用的優勢。我認為我們創建的品牌和我們提供的服務質量受到客戶的高度重視，並且我們繼續看到驚人的增長，正如您在過去的一兩年中所看到的那樣。

Okay. And would you consider expanding Environmental Services outside of Canada, more so into the U.S?

好的。您是否會考慮將環境服務擴展到加拿大以外的地區，尤其是美國？

If the right opportunity in the right markets presented themselves, for sure. I mean we have been fully expanding into the U.S. Obviously, the market selection and the right asset base is the most important part. But yes, I mean, we'll definitely look at opportunities. We're not shying away from different opportunities in the U.S. That's for sure.

如果正確的市場出現了正確的機會，那是肯定的。我的意思是我們已經全面擴展到美國。顯然，市場選擇和正確的資產基礎是最重要的部分。但是，是的，我的意思是，我們肯定會尋找機會。我們不會迴避美國的不同機會，這是肯定的。

(Operator Instructions) Your next question is from Michael Doumet at Scotiabank.

（操作員說明）您的下一個問題來自豐業銀行的 Michael Doumet。

The expectation for price cost spread to expand in the coming quarters, that's been well explained. I wonder despite inflation slowing, whether you think peak price cost spread will occur in 2024 rather than in the second half of 2022. This obviously excludes commodity and RNG piece.

價格成本價差在未來幾個季度將擴大的預期已經得到了很好的解釋。我想知道，儘管通脹放緩，您是否認為價格成本價差峰值將出現在 2024 年，而不是 2022 年下半年。這顯然不包括大宗商品和 RNG 部分。

Yes, Michael, it's Luke speaking. I think we could debate whether we'll be sort of Q4 of this year or Q2 that it's actually peaked. I think our perspective is the trend line is supportive of establishing a new wider spread than what we had before. And I think you're seeing that happening. I think if you think about the way the dynamics roll into 2024. There's clear math that supports continued wider spreads. But it's difficult to call the exact sort of when it's going to peak. We're just feeling very optimistic that 2024 will seem to be constructive.

是的，邁克爾，我是盧克。我認為我們可以討論今年第四季度還是第二季度真正達到頂峰。我認為我們的觀點是趨勢線支持建立比以前更廣泛的新價差。我想你正在看到這種情況的發生。我認為，如果你考慮一下進入 2024 年的動態，就會發現有明確的數學結果支持利差持續擴大。但很難判斷它何時會達到頂峰。我們只是感到非常樂觀，認為 2024 年似乎會具有建設性。

That's helpful. And then on 2024 EBITDA margins, maybe a little bit early to discuss, but if I were to exclude the full revenue and EBITDA contributions from the divestitures from the pro forma '23 EBITDA guidance, I get to a full year EBITDA margin of 27.1%. So just thinking if that's a fair starting point for 2024? And obviously, I would add, I don't know if it's 200 or 300 basis points of price/cost spread, RNG, et cetera. Just trying to get a sense from you on how to think about those numbers.

這很有幫助。然後是 2024 年 EBITDA 利潤率，討論可能有點早，但如果我從預計的 23 EBITDA 指導中排除剝離帶來的全部收入和 EBITDA 貢獻，我會得到 27.1% 的全年 EBITDA 利潤率。那麼想一想這對於 2024 年來說是否是一個公平的起點？顯然，我想補充一點，我不知道價格/成本利差、RNG 等是 200 還是 300 個基點。只是想了解一下您如何看待這些數字。

Yes, Michael. So we're not going to talk about 2024 today. We gave the 2023 guide, ending at $2 billion, 27% margin. I think normal course, historically, we've been saying 50 to 100 basis points of margin expansion. We think 2024 is an outsized year. So I think it's in that sort of directional ZIP code, but we're going to wait till we close out this year or at least another quarter before we start talking about 2024 guide in too much depth.

是的，邁克爾。所以我們今天不討論 2024 年。我們給出了 2023 年的指導，最終目標為 20 億美元，利潤率為 27%。我認為正常情況下，從歷史上看，我們一直在說利潤率擴張 50 到 100 個基點。我們認為 2024 年是非常重要的一年。所以我認為它是那種定向郵政編碼，但我們要等到今年結束或至少再過一個季度，然後才能開始深入討論 2024 年指南。

At this time, sir, we have no further questions registered. Please proceed with closing remarks.

先生，目前我們沒有提出任何其他問題。請繼續致結束語。

Thank you, everyone, for joining today. And sorry about the conference call. We started a little bit late given the issues with the operator, but we look forward to speaking with you after our Q3 results. Thank you.

謝謝大家今天的加入。對電話會議表示抱歉。考慮到運營商的問題，我們開始得有點晚，但我們期待在第三季度結果公佈後與您交談。謝謝。

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Have a good day.

謝謝。女士們、先生們，今天的電話會議到此結束。再次感謝您的出席。此時，我們確實要求您斷開線路。祝你有美好的一天。