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EDITED TRANSCRIPT
BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
Call
EVENT DATE/TIME: APRIL 30, 2015 / 12:30PM GMT
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
Call
CORPORATE PARTICIPANTS
Chaya Cooperberg Progressive Waste Solutions Ltd. - VP IR & Corporate Communications
Joe Quarin Progressive Waste Solutions Ltd. - President, CEO
Ian Kidson Progressive Waste Solutions Ltd. - EVP, CFO
Kevin Walbridge Progressive Waste Solutions Ltd. - EVP, COO
CONFERENCE CALL PARTICIPANTS
Derek Spronck RBC Capital Markets - Analyst
Al Kaschalk Wedbush Securities - Analyst
Kevin Chiang CIBC World Markets - Analyst
Scott Levine Imperial Capital - Analyst
Damir Gunja TD Securities - Analyst
Bert Powell BMO Capital Markets - Analyst
Adam Baumgarten Macquarie Research - Analyst
Michael Hoffman Stifel Nicolaus - Analyst
Tyler Brown Raymond James & Associates - Analyst
PRESENTATION
Operator
Good morning. My name is Lori and I will be your conference operator today. At this time I would like to welcome everyone to the Progressive Waste Solutions Q1
2015 earnings call. (Operator Instructions) Thank you.
Chaya Cooperberg, Vice President Investor Relations and Corporate Communications, you may begin your conference.
Chaya Cooperberg - Progressive Waste Solutions Ltd. - VP IR & Corporate Communications
Great. Thank you, Lori, and thank you all for joining us this morning. With me on the call are Joe Quarin, President and Chief Executive Officer; and Ian Kidson,
Executive Vice President and Chief Financial Officer. We will be providing comments on our results for the three months ended March 31, 2015, and then we will open
the call up for Q&A.
Also available during the Q&A is Kevin Walbridge, Executive Vice President and Chief Operating Officer. The slide deck referenced during this call is available on our
website at progressivewaste.com.
Before we get started, I'll read our Safe Harbor statement that you can see on slide 2. Our remarks and answers to your questions today may contain forward-looking
information about future events or the Company's future performance. Although forward-looking statements are based on what management believes are reasonable
assumptions, the Company cannot assure shareholders that actual results will be consistent with these forward-looking statements.
The Company disclaims any intention or obligation to update or revise any forward-looking statements resulting from new information, future events, or otherwise. We
also do not commit to continue reporting on items or issues that arise either during our presentation or in the discussion that will follow, except as required by
applicable securities laws. This information by its nature is subject to risks and uncertainties that may cause actual events or results to differ materially; and please refer
to the bottom of our news release this morning for further information and to our first-quarter MD&A and Annual Information Form for a more complete description of
the risks affecting our business and our industry.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
Call
On this call we will discuss non-GAAP measures such as: adjusted operating income or adjusted operating EBIT; adjusted EBITDA; adjusted net income; and free cash
flow. Please refer to our news release for definitions of these non-GAAP measures. Management uses non-GAAP measures to evaluate and monitor the ongoing
performance of its operations, and other companies may calculate these non-GAAP measures differently.
There will be a telephone replay of this call until midnight on May 14, and all of those details are available in the news release. With that I will turn the call over to Joe.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Thank you, Chaya, and good morning, everyone. I'll start with an update on our strategic plan progress in the quarter. The first quarter was the first full year of our fiveyear plan for operational excellence. I'll then turn the call over to Ian to review our financial results in detail.
When we presented our plan last year, we identified meaningful opportunities to improve fleet productivity and field efficiencies. We established the team and
playbook. We set in place the foundation for continued revenue growth, EBITDA margin expansion, higher free cash flow, and higher return on invested capital.
This year, we have begun to execute on that plan. We're converting our fleet, and we are standardizing best practices. We are demonstrating disciplined capital
allocation, and we are growing strategically and allocating capital in a way that we believe maximizes shareholder value.
In the first quarter, we achieved a solid performance that was fundamentally in line with our expectations and gives us confidence in our 2015 outlook we provided two
months ago. We had strong organic revenue growth, excluding fuel surcharges and commodities, and are pleased with our progress on our operational excellence
program.
Our top-line performance was driven by both improved price and volume. Consolidated price increased 1.8%, which was higher in every service line, led by 3% growth
in commercial collection revenues. At the same time, revenues also benefited from volume growth of 1%, which was flat to up in every service line except for disposal.
Again, our commercial collection segment led the improvement, and organic commercial yards were up nearly 3%. We're seeing the early signs of improving
commercial volumes in some of our southern US markets. While encouraging, it's too early for us to tell if this is the start of a sustainable trend.
Our better sales execution is enabling us to capitalize on the healthier economic environment. We were seeing the tools, programs, and training we introduced in 2013
and 2014 enhance our ability to improve pricing and volume. We expect this momentum to carry through the balance of this year.
This performance in our hauling business was important, as it helped to offset the weakness in our disposal volumes, which were down 2.9% versus the same period a
year ago. For those who have been following our Company for some time, it will not come as a surprise that we experienced delayed volumes at our Canadian sites,
namely in Quebec, Ontario, and Alberta; and this was due to weather conditions.
While overall the winter was not as harsh as last year, the prolonged cold season has extended the weight restrictions on some Canadian roadways. For example, the
half-load season in Quebec was the longest in 10 years.
This is a timing issue. We have an excellent track record of managing our annual volume caps at our Canadian sites, and we don't expect this year to be any different.
The delayed disposal volumes represented approximately $1 million of EBITDA that we had expected in the quarter.
There was also a $3 million provision increase in the cost of insurable risk in the quarter, largely related to prior period incidences, which impacted our reportable
results. Nonetheless, we remain on track with our outlook for 2015, as we are confident in the operational improvements we are making through execution of our
strategic plan.
Operationally, I was pleased with our fleet improvement initiatives -- operationally, I was pleased to see our fleet improvement initiatives generate results in the markets
that we prioritized for rollout. In the first quarter, we added 54 automated trucks, 26 of which were CNG; and this was on top of the 117 automated and CNG trucks that
we added in 2014. These trucks are improving our productivity, safety, and cost performance in the markets where we introduce them.
A great example of this improvement is our Florida market. Florida was among the first areas in our Company to move to automation.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Our automated front loaders and side loaders first entered service in late 2013 with a municipal contract win. We followed that with a conversion of two city contracts
to automated collection in late 2014. We now have over 90 automated units throughout the state, with more to come.
And we've been converting to CNG engines as well. In Florida, 13% of our routed vehicles are now CNG fueled. As these trucks go in, we follow through with routing
optimization programs to achieve maximum productivity on each asset.
Our core operating metrics in Florida are demonstrating outstanding results. In the first quarter, Florida's labor and repairs and maintenance costs were flat as a
percentage of revenue, and our current operating safety performance trend is also quickly improving, which will reduce future expenses.
Overall, our core operating cost in Florida came in below budget, even as we handled higher collection and disposal volumes. As a result, our first-quarter gross
operating profit margin in Florida expanded by approximately 250 basis points, excluding a higher insurance provision largely for the prior-period claims. This
represented the best operating profit improvement in our Company in the quarter.
As we predicted, the conversion from manual to automated collection is initially a drag on results, as the driver and districts become familiar with the new equipment
and process. We saw that drag on Florida's performance in the fourth quarter; but the adjustment period is short-lived. What we are seeing now supports our
expectations that other key markets, as we implement our operating excellence program, will follow the same pattern.
We are executing on our plan at an appropriate pace. Change is often disruptive, and we are methodical in our approach to implementations so they have the right levels
of support and training.
In support of our plan, we announced in our press release this morning the opportunities we have to reorganize and take additional cost of our business. As you can see
on this slide, we are combining our Northeast region with the Eastern portion of our US South region to form the East region. The East region will be managed by Dean
DiValerio and will include the state of Florida, New York, New Jersey, Pennsylvania, Maryland, Virginia, and the District of Columbia.
The remainder of our South region will be renamed the West region and will include the states of Texas, Louisiana, Oklahoma, Arkansas, Missouri, Mississippi, and
Illinois. The West will be managed by John Lamanna, formerly our RVP in the Northeast. Our Canadian region remains unchanged, but we are renaming it the North
region with Marc Fox continuing to manage these operations.
At the same time, we are optimizing our area management structure, reducing the number of areas from 14 to 12, and streamlining some of our corporate support
functions. This business alignment better positions us to realize our strategic plan and moves our management groups closer to our customer base.
We expect this reorganization to cost $3.5 million to $4.5 million, which we expect to incur largely in the second quarter of 2015. The annualized cost savings will be
between $3 million and $3.5 million.
Now, I'll close with some comments on our capital expenditures and capital allocation in the quarter. As we advised throughout 2014 and in our fourth-quarter call, our
capital expenditure budget is front-end loaded this year, so that we can start the year with our new automated and CNG trucks in place. Recall that some replacement
capital scheduled for 2014 slipped into Q1 of 2015.
By the end of the second quarter, we will have taken receipt of the bulk of our trucks on order -- in fact, almost all of the trucks, except those arriving in November for
the new municipal collection contract in Ontario that starts in January 2016. Therefore, you can expect that we will spend between 65% and 70% of our capital budget
in the first two quarters of 2015. This timing, combined with the associated cost savings contributing to EBITDA, will result in significantly higher EBITDA and free
cash flow in the second half of the year.
Turning to capital allocation, we only had one small acquisition in the first quarter this year, so our focus was on actively repurchasing our shares. We bought back
approximately 0.5 million shares in the quarter, and an additional 1.4 million shares through the month of April. Our total outstanding share count is now 110.5 million
shares.
Combined with the payment of our quarterly dividend, we have returned over $72 million to shareholders year-to-date. We remain well prepared to meet our objectives
this year.
I'm very pleased with our start in the first quarter of 2015 as we execute our five-year strategic plan. We are moving ahead on our path to creating meaningful
shareholder value.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
Call
With that, I would like to turn the call over to Ian.
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
Thank you, Joe, and good morning, everyone. I am going to review our performance by segment in the quarter, and I will be referencing the slide presentation available
on our website throughout my comments.
The average exchange rate in the quarter was nearly $0.81 for each Canadian dollar, compared to nearly $0.91 in the same period a year ago. This 11% decline impacts
our reportable results but, as mentioned on previous calls, has very little operational impact. So for comparative purposes I will often refer to constant currency in this
discussion, which translates current-period results at the prior-year exchange rate.
Starting on slide 7, you can see that we had a solid revenue performance in the quarter, up more than 2% over a year ago on a constant-currency basis. Foreign currency
translation represented a negative impact of $19 million, bringing reportable revenue to $460 million, which was in line with our expectations. Revenues include two
months of contribution from the Long Island, New York, assets, which we divested on February 28.
The components of our revenue growth are presented on a foreign exchange parity basis on slide 8 and include a consolidated price increase of 1.8% and a volume
increase of 1%. Like our peers in our sector, we experienced lower fuel surcharges and commodity revenue, both down 0.9% versus the year-ago period.
Both of these impacts were contemplated in the outlook that we provided for this year. Our two acquisitions completed late in the fourth quarter last year contributed
1.1% to our revenue growth.
On slide 9, I'll review revenue by segment. Starting with Canada, this segment delivered revenue of $154 million, a decline of 8% over last year; but on a constant
currency basis Canadian revenues grew 3.4%.
Higher pricing of 2.6% was driven largely by our commercial and industrial lines, offset by lower fuel surcharges and commodity pricing. Total volumes in our
Canadian segment were also strong this quarter, increasing 2.2%.
Every service line in Canada delivered volume growth, with the exception of landfills. We saw lower special waste volumes in our Alberta, Ontario, and Quebec
landfills, delayed due to the weather conditions that Joe referenced.
In our U.S. South segment, revenue was $237 million, up 7.1%. Acquisitions were the primary reason for the increase, but organic growth contributed here as well.
Price improvement was strongest in our commercial, residential, and landfill services, and we had higher volume in our collection service lines and at many of our
Texas, Missouri, and Florida-based landfills.
In the U.S. Northeast, revenue was $69 million, down 14.7% compared with the year-ago quarter. Approximately $7 million of the decline relates to the sale of assets in
Long Island in February this year, coupled with the sale of a transfer station in the second quarter of last year.
Revenues also reflect the impact of weather conditions in this region and a decline in disposal volumes at our Seneca Meadows landfill. Pricing in these collection
service lines increased significantly versus the same period last year, delivering some of the best improvements in our Company.
Operating and adjusted SG&A expenses are shown on slide 10. For the first quarter, total operating expenses decreased from $293 million to $289 million. Part of the
absolute year-over-year decrease is due to foreign exchange, as operating expenses as a percentage of revenues are largely flat at 62.7%.
Keep in mind that lower commodity prices and fuel surcharges are having an impact on this relationship in the current quarter, in essence, masking the beginnings of an
improvement in productivity. Specifically, had commodity prices remained unchanged relative to a year ago, operating cost as a percentage of revenues would have
declined about 50 basis points. Also, as Joe mentioned, we had an unanticipated $3 million cost of insurable risk, largely related to prior claims in the quarter; and that
further obscured what we believe to be the early indications of the strong underlying cost improvements in our business.
Adjusted SG&A expense is detailed on slide 11. Adjusted SG&A increased $1 million to $65 million; but it was up close to $4 million on a constant currency basis.
About $2 million of this change relates to higher salaries, in part for new hires to support our operating locations, coupled with salary increases, acquisition, and organic
growth. We also had an increase in our provision for bad debt of about $1.4 million, which reflects in part some receivables related to the Target CCAA filing in
Canada.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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As a percentage of revenue, adjusted SG&A was 14.1% versus 13.6% in the same quarter a year ago. In addition to the cost items previously mentioned, the impact of
lower commodity revenues and fuel surcharges affected this relationship by 30 basis points to the negative.
From a segment perspective, the apparent increase in Canadian SG&A expense is simply a reflection of the reallocation of Canadian region office costs from corporate
SG&A, where they had resided in previous years, to the actual Canadian region office. We expect SG&A expense this year to be in the range of 12.8% of revenues.
Moving to adjusted EBITDA and margins on slide 12, you can see in the first quarter that total Company adjusted EBITDA was $107 million, about $4 million below
our budget for the quarter and, as discussed, reflects the impact of delayed disposal volumes due to weather conditions and the cost of insurable risk. Otherwise, this
performance reflects the underlying improvements in our core business as we continue to execute on our strategic operating plan.
Adjusted EBITDA margins in the first quarter were 23.2% compared to 24% last year. In Canada, EBITDA margins were 31.8% compared to a 33.5% last year.
70 basis points of the decline in the Canadian margins is simply the result of the reallocation of regional office costs from corporate. Another 70 basis points can be
attributed to the combination of the Target bad debt and the timing of the overhaul of our corporate plane, which has to occur every five years. By year-end, we expect
Canadian margins to improve to the historical average in the mid-30%s range.
In the U.S. South, adjusted EBITDA margins were 25% for the quarter as compared to 26.8% last year. The primary offsets are the cost of insurable risk already
mentioned, as well as the costs associated with the integration of our two recent acquisitions in Texas. We expect margins in this segment to expand in Q2 and further in
Q3, as we continue to benefit from the new fleet rollout in these markets in the same way that we have seen in Florida.
In the U.S. Northeast, adjusted EBITDA margins in the first quarter were 16.9% compared with 16% last year. As I noted earlier, the two months of Long Island results
were dilutive to margins; and excluding Long Island operations, our Northeast margins were 20.3%.
For 2015, we continue to expect to expand consolidated margins by 100 to 150 basis points year-over-year to a range of 26.7% to 27.5%.
Now turning to slide 13, amortization declined approximately 4.8% versus Q1 a year ago. Most of the decline relates to the sale of the Long Island assets that closed in
late February.
As a percentage of revenues, amortization decreased from last year by approximately 40 basis points to 13.9%, as a result of lower intangible asset amortization. For
2015, we continue to expect amortization to come in at 14.4% of revenues.
Interest expense in the first quarter was $15 million, which was in line with our expectations. At the end of the quarter, we had $926 million drawn on our revolving
credit facility and total long-term debt of $1.48 billion. Total funded debt-to-EBITDA was 2.85 times at March 31, 2015, versus 2.95 times at December 31, 2014.
Moving to taxes on slide 15, you can see that our effective tax rate for the quarter was in line with our expectations, at approximately 23.4% on an adjusted basis. Cash
taxes were $4.8 million for the quarter. For 2015, we continue to expect cash taxes of around $35 million and our effective tax rate to be 25%.
Net income is shown on slide 16. On an adjusted basis, net income for the quarter was $28.2 million or $0.25 per diluted share, versus $24.8 million and $0.21 per share
a year ago.
I'll now turn to capital expenditures on slide 17. Total replacement capital in the quarter was $39 million, and growth capital was $23 million. We are pleased with the
scheduling of our fleet delivery year-to-date; and we remind people that the first two quarters this year will be capital heavy, as we have frontloaded our truck orders.
As a natural consequence of our higher capital spend versus the same period last year, you can see that free cash flow on slide 18 was $28 million in the current quarter
versus $49 million a year ago. Our outlook for free cash flow for this year remains $190 million to $205 million.
I'm going to close by acknowledging the impact that the reorganization Joe referenced that we are undertaking today will have on our segment disclosure. We are
currently evaluating our financial reporting segments in light of this reorganization, and we will be reflecting the outcome of those changes in our second-quarter
results.
That brings me to the end of my comments. I will now turn the call back over to you, Joe.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Thanks, Ian. In summary, we are pleased with our progress on executing our strategic plan. We're converting our fleet and standardizing best practices. We are focused
on disciplined capital allocation and improving our cash return on invested capital, and we are growing strategically and creating shareholder value.
As I said earlier, change can be disruptive, and I want to thank all of our Progressive employees for their hard work and commitment to our goals. Change must also be
pursued at an appropriate pace. We have an outstanding management team with tremendous industry experience moving our strategic plan forward with care and
precision.
Throughout this year, we will have several opportunities for our shareholders to attend site tours and see the progress we are making on the ground in our key markets. I
will now turn the call over to the operator to start the Q&A.
QUESTION AND ANSWER
Operator
(Operator Instructions) Derek Spronck, RBC Capital Markets.
Derek Spronck - RBC Capital Markets - Analyst
Morning. My question revolves around the general demand environment. From an organic growth perspective, it looks like you've been running somewhere between
2.5%, 3.5% year-over-year over the past four quarters.
Is 4% organic growth attainable on a go-forward basis? If so, how do you see it breaking out from a volume and pricing basis?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
I'll start off here, and then maybe I will ask Kevin to weigh in as well. But what we are seeing right now, Derek, is a pickup in economic activity down in our southern
US markets, which gives us a lot of optimism, coupled with just the execution of our own sales team and what we've been able to do with the small container size.
The fact that commercial is moving up and our commercial volumes were plus 3% in the quarter, there is a little bit of noise with the weather down in Texas. We were
actually shut down for a few days due to ice storms, so that obscured some of our industrial volumes. And then you heard us talk about the landfill.
But we were actually feeling pretty good that things are starting to improve. Monitoring the situation in Western Canada, obviously.
But you've seen our pricing in and around that 2% mark; we're 1.8% this quarter. We were over 2% last quarter, so feel fairly confident on that front.
And when we talk about 4% I would exclude commodities and fuel surcharge there. So it's really the things that we control, and I'm not fussed about it at this point.
Kevin?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
Yes, Derek, I agree with Joe. A couple other things that occurred to help increase our confidence in that is the last couple acquisitions we did down in Texas positioned
us -- improved our position in the Dallas-Fort Worth market, and that should be driving volume. We also picked up some new markets in Texas, one of them being
Corpus Christi, which you would think maybe you took some risk on the oil business. But Corpus Christi is going to be the location of probably the largest construction
project in the southern United States over the next three years with the LNG facility going in there.
So very optimistic and we are seeing good results across the lines including Alberta, so we are not really seeing a pullback there. We are watching it, but feel good
about where we are in all our positions.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Derek Spronck - RBC Capital Markets - Analyst
That's good color. Just from a, I guess a timing perspective and an overall -- from what you are seeing on the ground, it sounds like you haven't seen really any real
weakness in your energy base regions. Waste is a late cycle, so it could flow through; but at the same time there is an offset of the weaker Canadian dollar helping out
the manufacturing sector.
Can you talk about some of those demand dynamics and what you are seeing on the ground, and maybe perhaps what you expect from a timing-related basis?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Sure. We will tackle what we are seeing first. We are down in Texas, Louisiana, and Alberta will be the primary energy-sensitive markets that we are in.
Texas, the economy -- at least the markets we are in -- appears to be firing on all cylinders. Strong demand right across-the-board, residential, commercial, industrial,
landfill, like right across-the-board, at least in the urban markets. So we are cautiously optimistic that will continue.
And as Kevin referenced, we are now down in Corpus Christi. And with the recent announcement we feel good down there. Louisiana, same thing; not seeing any
pullback either.
And up in Alberta, remember, we're not up in Fort McMurray. We are in Edmonton, Calgary, and a couple of smaller markets down south. And as of right now we are
executing to plan; everything is moving ahead.
The one caution I will put out there is traditionally in Alberta a lot of the drilling, a lot of the activity when it's been approved, takes place over the winter months. It's a
lot easier to access the field. So a lot of that is now coming to an end; you are getting a lot of the -- a lot of that is now shutting down.
So we are monitoring the situation for the second half of the year. But at least for the first quarter, moving into the second quarter, we are not seeing anything.
You did reference the softer Canadian dollar. And yes, that is providing a bit of a pickup or a bit of a lift to the Eastern Canadian markets. So we are hoping to see that
pick up even more.
Derek Spronck - RBC Capital Markets - Analyst
Okay. Thanks a lot.
Operator
Al Kaschalk, Wedbush Securities.
Al Kaschalk - Wedbush Securities - Analyst
Good morning. Just wanted to touch, first, on the reorg. And then, Joe, just from a business standpoint, can you address or discuss the metrics for the reorg?
Because I can certainly understand it from a reporting standpoint. But help me understand maybe how Florida can help the operations, where you have it now
segmented or plan to segment it.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Let me just step back and try and provide a perspective as to the reorg and the thought process. Once we sold our Long Island operations, we really sat down and
thought about what's the best way for us to run the business.
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Two changes that took place -- elimination of a region plus a couple of areas today -- a couple things we wanted to achieve. Number one, we wanted to get our
management team closer to the customer; and number two, we wanted to try to balance out the regions.
The individuals that we have in place as our regional vice presidents have experience and capacity to run much larger regions than what they were operating before.
Coupled with that, Dean is familiar with the markets along the East Coast and has experience, so it was a natural for him to expand up and down the entire East Coast.
And then also for John, who originally came out of the Midwest, he is very familiar with the type of operations we have down there. So the metrics was really about
trying to balance out our three regions.
What you're going to find going forward is our US regions actually come out pretty similar in size, the West slightly larger than the East; but they start to balance out.
And Marc continues to run our North region.
So this is all about having a good regional structure. We talked last year about also putting a regional team in place, which includes safety, HR, sales, maintenance, etc.
So it's working to try to maximize the leverage we get from all the expertise we brought in-house.
And then the areas will be the leverage point as we continue to grow. If we need to, we can always add an area under one of the regions. So that was really the thought
process behind it.
Al Kaschalk - Wedbush Securities - Analyst
So there is no real mix or volume issue? In other words, in terms of the volume you are going to see now in what I would call the Northeastern states, you adequately
have disposal capabilities in that market for the volume?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes. No, it's -- nothing really changes there. In fact, this will be a seamless handoff. There is no change to the actual operations.
There is each -- what Dean is going to handle, Florida was a separate group of operations; Dean was also managing our Missouri/Arkansas operations. They move over,
so separate and distinct.
And then the Northeast becomes a handoff to Dean, and Dean knows that market very well. So there is zero change in the way we actually run the business on the
ground. All that happens here is we as we align ourselves with a more optimal or balance across the three regions.
Al Kaschalk - Wedbush Securities - Analyst
Excellent. Then my follow-up, if I may, real quick. One, it's if you can provide us what the benefit was in the quarter from fuel.
And second, just a clarification. But on the EPS reconciliation, it looks like to me you've included or not adjusted out the gain or the additional cost on the insurance. I
just wanted to clarify the $0.16 down to $0.25.
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
You're right; we didn't adjust out those two items, Al.
The detail on the fuel, like everybody in our industry, we have benefited from lower fuel prices; we have suffered from lower fuel surcharges. We've never broken those
out specifically, and we are not going to start.
It helped a little bit, but I wouldn't characterize it as significantly material in the quarter. We expect it to continue to be helpful over the rest of the year. But just to be
clear, that was contemplated in our guidance, so it's not as if that's unexpected.
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Al Kaschalk - Wedbush Securities - Analyst
Can you add anything on basis points on margin, the net benefit of all of that?
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
I think we're just going to be consistent with what we've done in the past, Al.
Al Kaschalk - Wedbush Securities - Analyst
Thank you.
Operator
Kevin Chiang, CIBC.
Kevin Chiang - CIBC World Markets - Analyst
Hi. Thanks for taking my question here. Maybe just firstly on margins, when I added back some of the items you noted in your prepared remarks -- the $3 million
insurance claim and the $1 million in deferred volumes -- looks like on a constant currency basis Q1 EBITDA margins were roughly flat year-over-year. When I think
of your CapEx being front-end loaded, just trying to get a sense of how these margins progress through Q2 onwards.
Should I expect Q2 margins to also be flattish year-over-year given the CapEx being front-end loaded? Or should I start seeing margins actually starting to expand this
quarter, just given some of the deferred volumes from the first quarter?
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
Sure, Kevin. Our margins in the second quarter, and actually for the rest of the year, we expect to see continued improvement. You're right on the one-times.
The optics are quite frankly quite frustrating for us in the first quarter, because if you start doing all of the coulda-wouldas on the adjustments, our performance was a
lot better this year than it was last year. We resisted the temptation because we know you guys roll your eyes when we go through that exercise.
But just a couple of comments. In the first quarter, we did not receive any benefit from the renewable fuel credits from our gas plant in Lachenaie. They were not
expected in terms of our budget.
But we do expect to receive those on a go-forward basis in the second quarter, beginning halfway -- actually beginning tomorrow, I guess, May 1, in the second quarter,
and through Q3 and Q4. And that's obviously going to be helpful as well.
You referenced the one-time items. One of those was the delay in the seasonal landfills volumes. And that was significant, right? So on a margin contribution basis, that
incremental volume is almost wholly cash from our perspective.
Kevin Chiang - CIBC World Markets - Analyst
That's helpful; thank you. Then maybe just a housekeeping question here. When you look at your EBITDA guidance for 2015, which you've kept unchanged, does that
include the restructuring charges you've highlighted in the first-quarter release, or would you be excluding those numbers there?
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
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It did not reflect it. We didn't know at the time when we provided the guidance, we hadn't solidified what that was going to be. And it was very difficult for us to build
that in, and we were also uncertain as to timing, etc. So in all likelihood we are going to be adjusting that out.
Kevin Chiang - CIBC World Markets - Analyst
Perfect. That's it for me. Thank you.
Operator
Scott Levine, Imperial Capital.
Scott Levine - Imperial Capital - Analyst
Hey, good morning, guys. First question on the margins, you are affirming this 100 to 150 basis points for this year. I'm just wondering if that includes the insurance
charge.
And also, if you could give us a sense of how much of that is coming from, call it, the internal initiatives, fleet, etc., versus pricing versus some of the strategic actions
that you've taken with the divestitures in the Northeast. Just so we have a sense of what is driving that and how sustainable it likely is beyond 2015.
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
Sure, Scott. I'll lead off with a quick answer and then I will flip it over to Joe. But yes, those -- that margin increase does include -- and I want to choose my words here
carefully. We're not going to be adjusting out the insurance bump to achieve those margins. We will achieve those margins notwithstanding the bump in Q1.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes. Scott, as you mentioned a lot of the items that are going to come in to contribute. Certainly the strategic initiatives. We talked a little bit about what we've seen
down in Florida with the equipment coming in and the automation, the CNG; the stations are now up and running. So all of that is really going to be showing through in
Q2 going forward.
We also get the uptick in our landfill volumes through the balance of the year. Q1 is always our lowest quarter, so we are feeling good about that.
And pricing, we are really not expecting any change from where we are right now and what our guidance was going in. So it's really all of that mixed together that we
feel confident in our execution through the year.
Scott Levine - Imperial Capital - Analyst
Got it; thanks. As my follow-up then maybe a little bit on recycling. Maybe some mixed views thus far, the turning season with regard to the outlook for pricing. But
just wondering what you are seeing within your business and whether you're expecting trends to improve through the remainder of the year. Or are they stabilizing? A
little bit more color on your thoughts on that business.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Kevin, why don't you offer your perspective?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
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Yes, Scott, as we look at commodity just the straight pricing, it's fairly flat. There is a little bit of optimism, but it's fairly flat out there.
We are making adjustments in our business, both in price and the mix that we are selling at our processing center. So we are making some adjustments internally to
maximize the commodity values we're getting.
But we see pricing being fairly flat. Our exposure is obviously not near what others are, as related, because of the number of facilities we have. But we're going to see
some improvement based on our actions, but the market is fairly flat.
Scott Levine - Imperial Capital - Analyst
Would that improvement be biased in Northeast region, or is it pretty broad-based?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
You know, it's actually more broad-based. Our MRFs, three of our largest facilities are actually in the South. So we've got one in Texas; Louisiana; two in Florida; and
then we've got the one up in Canada that we have some exposure at. But -- so the Northeast actually we are very -- we are more third-party based, so our exposures are
more market-driven there than they are internal.
Scott Levine - Imperial Capital - Analyst
Got it. Thank you. Leave it there.
Operator
Damir Gunja, TD Securities.
Damir Gunja - TD Securities - Analyst
Thank you. Good morning. Maybe just a little bit of extra color on the US Northeast, I guess post the sale of Long Island. Just trying to get a sense of your strategic
efforts there; and how much left could we see in terms of the elimination of less profitable business?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Sure. We talked about pro forma margins ex-the Long Island operations, about 20.3% in the quarter. The team really late last year, I would say certainly fourth quarter,
maybe slightly earlier, stopped culling the business. What we found at that point was what we were servicing was contributing, so we are quite happy with that.
There has been -- continued to be an effort to get the pricing right, so we're making money. And now the team is working on operational improvements.
Any time you've got volume adjustments like that you've got to recalibrate your routes; that's an ongoing exercise right now. Also working with the team on trying to
figure out the most efficient way to be collecting. Those of you that know New York City, very manually oriented, a lot of rear load, so we've got full-court press on
just continuing to drive the operational improvements. That's New York City.
We've also got significant operations down in Baltimore and Washington. We've had a new management team down there now for about a year and a bit, and they've
been doing a nice job of continuing to improve execution. We are seeing strong progress.
So on the collection front, we think there is still some more there, and they are going to keep working it. Dean will step in and take over from where John left off.
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Then obviously, you've got the landfills, and it continues to be at some excess capacity up in the Northeast, but we are working to align ourselves and control the
volume as much as possible and therefore mitigate any price pressure.
Damir Gunja - TD Securities - Analyst
Okay, great. Maybe just a follow-up if I can. Can you maybe touch on the acquisition environment, what you are seeing out there and what confidence level you might
have in pursuing some incremental deals for the balance of the year?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Sure. We're actually seeing quite an active environment out there. There is a lot of people that want to sell. But the ask is hard to get to.
We run a very disciplined analytical process here trying to do a valuation. It's all based on cash-on-cash.
Multiple of EBITDA is somewhat irrelevant. It's product at the end once we take the valuation divided by EBITDA.
So that's where the disconnect is, is we've got -- if I just frame it this way. I think a lot of people have had companies for sale for a period of time. Anytime something is
for sale, operating decisions get made to try to maximize short-term cash flow, i.e., not replacing equipment. So the equipment is aging, and that affects, obviously, our
economics. Or taking advantage of accelerated depreciation, which then affects my book values.
So there's a lot of noise that -- in anything that we are looking at. But it is quite active, we are optimistic that we will be able to get something done this year.
We are targeting to add some growth through M&A, but it's going to be very disciplined. We weren't able to do anything in the first quarter. We sold Long Island,
redeployed the proceeds to buy back shares.
So we are not looking to keep capital idle. But it's cautiously optimistic that things will loosen up here.
Damir Gunja - TD Securities - Analyst
Thanks for that.
Operator
Bert Powell, BMO Capital Markets.
Bert Powell - BMO Capital Markets - Analyst
Thanks. Joe, your capital spending is supposed to be significantly done in the first half of the year and you expect (multiple speakers) -Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
No, no, no, no, no, no, no. Our capital spend in the first half of the year is supposed to be significantly up.
Bert Powell - BMO Capital Markets - Analyst
No, no. Right; but you are through it?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Yes. Well, on the collection side of the business, for sure. Not the landfill necessarily.
Bert Powell - BMO Capital Markets - Analyst
Right, okay. But in your commentary you say that those deliveries of trucks will equal accelerated gains in EBITDA in the second half of the year.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes, that's correct.
Bert Powell - BMO Capital Markets - Analyst
Right. So you've got most of your CapEx in terms of the trucks anyways done in the first half; correct?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes, yes.
Bert Powell - BMO Capital Markets - Analyst
Okay. So my question really relates to your comments around the efficiency. There is an adjustment period. How have you factored that into -- the deliveries come in
the first half. How does that adjustment period, how have you risk-adjusted that in terms of the EBITDA contribution in the second half?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Kevin?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
Bert, I'll take that one. There is a little bit of a lag when you bring it in. You've got the replacement of the truck, and getting it delivered and deployed.
And then we overweighted as well into the automated conversions that we had focused on. So that pushback takes a little more time, and -- so more in the 60-day
window, once you get a driver and cross train them onto that new piece of agreement. So there is a slight lag.
And then the other part that we are aggressively involved in, as the new trucks come in, getting the old trucks off the street and out of the fleet and sold. So there is a lag
in that.
Not really putting a solid number to it, but from the time a truck comes in to really getting the full value of that investment is probably 90 days. But we were preparing
for that. We've got a schedule actually that goes -- looks a year in advance, so we're actively preparing for those deliveries to try to cut that return time down.
Bert Powell - BMO Capital Markets - Analyst
Okay. But when you think about the guidance for the second half of the year, you've got that? That handicap is in the numbers?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Yes, it's in there. From a handicap perspective, a lot of those trucks came in, in early January, so we knew that going in. So when I look at that lag, we're going to see
the impact of those really starting in Q2 for us and continued throughout Q2 in the improvement. But that is all baked into the number.
Bert Powell - BMO Capital Markets - Analyst
Okay, that's great. Thanks for the clarity. Ian, just wanted to go back to the $3 million provision for insurable risk. That's one times in the quarter. But prospectively,
don't claims developments have an impact going forward in terms of what your insurance costs are going to be?
That was part of the operational efficiency program, was really with the automated trucks and all that sort of stuff. You start to bring the insurance costs down. Just
wondering how we should think about those prior-period claims and how that impacts your insurance expense going forward.
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
Sure. This is a long, complicated conversation that I've spent a fair amount of time wrapping my head around. I'll try to be coherent and short in the answer.
For the past 18 months the Company has had an increasing focus on safety. We have been very upfront and direct both internally and externally on that. And as we've
gone through that process we have been focused with our claims management folks and our adjusters in being aggressive in terms of making sure that we are providing
properly for claims and contemplating what the right development costs are, which I think is exactly what you were suggesting.
The reason that we had the increase, the $3 million increase this quarter, was -- it was an actuarial revision. And in part that actuarial revision was based on the claims
adjusters taking a new approach in terms of how they looked at the claims.
We haven't said this specifically because there are no guarantees, but it is our belief that -- well, first of all, it is a statement of fact to say that that actuarial revision is a
noncash charge. And it is our belief that it is related, at a minimum in part, to our new aggressive approach with the adjusters. And it is our hope/expectation that it will
be a charge that ultimately doesn't get paid as we move forward, because our safety results are improving.
Having said that, obviously, we are accounting for things the way that we have to, and we have to respond to the actuarial numbers.
Bert Powell - BMO Capital Markets - Analyst
Okay. I think that was good, Ian; I think I got it.
Just lastly, just to sneak one more in, in terms of the presentation, there's two things. There's the regional reclassification and then there is the costs from G&A that are
being allocated to Canada. How much historical restatement will you give us so that we can measure things on a -- with some context?
Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
When we make the change, we will go back at least a year. Whether we go back further, we're still trying to sort out, I guess. We may end up going back further, but it
may take an extra quarter for us to get there just from a logistics perspective.
Bert Powell - BMO Capital Markets - Analyst
Okay, that's great. Thank you.
Operator
Adam Baumgarten, Macquarie.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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Adam Baumgarten - Macquarie Research - Analyst
Hi, guys. Thanks for taking my questions. Just on the reorg, I know the costs are going to hit in 2Q. Should we expect the full annualized run rate of the $3 million to
$3.5 million to start in 3Q?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
The actual -- so, two parts to that question. Number one, we had contemplated doing something this year. We didn't have any details, but we had contemplated.
So our guidance for the year does factor in some changes required for how we're going to run the business. And we did that because we actually had some other
necessary expenditures that had to take place this year, and we had to look for a way to pay for those, mainly in the area of systems as well as some branding efforts that
are going on up here in Canada.
But the reorganization took place yesterday, and therefore it is run rating and will -- you will see the benefit from a margin and the results perspective starting
immediately.
Adam Baumgarten - Macquarie Research - Analyst
Okay, great.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
In May.
Adam Baumgarten - Macquarie Research - Analyst
Yes, and then just one more on the progression of Northeast margins. Should we expect those to build as we move throughout the year?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes, I would expect them to continue to build, primarily because, A, the weather will improve. We should start to see some volumes also pick up, and then just a
continuation of what the team has been doing for the last little while.
Adam Baumgarten - Macquarie Research - Analyst
Great, thanks.
Operator
Michael Hoffman, Stifel.
Michael Hoffman - Stifel Nicolaus - Analyst
Thank you, Joe and Ian, for taking my questions. Can we focus on sideways fundamentals here for a second? And there are parts to this question.
I'm trying to get a better feel for what the data is telling us, and the C&D side what your visibility is around both the performance in 1Q and going forward: the number
of pulls on a comparative basis, revenue per pull on a front-end loader, the weight per yard trends.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
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And then as it relates to this volume story, are you in fact retaining more price? What's your experience in 1Q versus what your expectations were and how it compared
to the trendline in 2014?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
Michael, it's Kevin. I'll take that one. On the roll-off side of the house, we're really seeing it strengthen across all markets.
It is concentrated obviously where the economies are the strongest for us, and that is in Florida and Texas. We've had to redeploy more containers and trucks than we
originally had planned, because of the volume increases there. So we are very optimistic about those.
Obviously as volume goes up, you try to capitalize on your pricing as supply and demand balance out. So that's going on there.
On the container weights, I wouldn't say we've seen any trends that you would use to identify that as ongoing. We have had pockets of container weights and tie a lot of
it to just weather and rainfall. But we haven't seen declines either.
So there has been a slight uptick in container weights, but nothing that we would really put a trend line to. And we continue to look for pricing opportunities at every
turn as our colleagues do in the industry. When there are opportunities to take price, we want to do it.
Michael Hoffman - Stifel Nicolaus - Analyst
Well, just to be clear on that last part, I would presume better volume means you see a little less intensity around the competitor trying to pick you off, so you hold on
to more of the price you have in the market. Is that -- are you witnessing that?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
Yes. I mean I think you stated it well, in that we believe in that phenomena and I think it is occurring and helping the pricing environment.
Michael Hoffman - Stifel Nicolaus - Analyst
All right. Then my second question, there's been lots of handwringing around (technical difficulty) price impacts to various companies. I'm assuming you have not seen
any what I would call minirecessions in these energy-related markets as a result of crude coming down. It's, one, too early to see that, because garbage lags in and lags
coming out.
But there is an awful lot of the revenues that are service-based. So it would have to take a fairly meaningful volume decline to trigger the minirecession anyway.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Yes. As of right now, we would concur with that, Michael. We are not seeing -- certainly not down South in our Southern US market -- not seeing any impact from it.
And up in Alberta, as I said, we're cautiously optimistic. We are tracking to plan, and we certainly did not factor in a minirecession this year.
We are monitoring the situation, and I say that only because typically things are a bit of a lag and you come out of the winter. We are confident in our team and things
will continue.
Alberta is expected to continue to grow this year, so our growth rate will likely be tempered, but I'm not sure that it's going to go backwards. We are not up in Fort
McMurray, which is definitely where it's going to get the most impacted.
Edmonton and Calgary are much more influenced by the corporate offices and therefore, from what we see right now, we are holding on and things are trending fine.
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Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
Michael, the only thing that I would add to that is, as Joe said, on the commercial and industrial side, we're primarily in the cities. Where obviously the real exposure is
first going to be seen is on the special waste side in Alberta.
Q2 is spring breakup up there, and so by and large it's a light period anyway. So it's likely going to be Q3 before we have real specific visibility into that.
Michael Hoffman - Stifel Nicolaus - Analyst
Okay. Fair enough. Thanks.
Operator
Tyler Brown, Raymond James.
Tyler Brown - Raymond James & Associates - Analyst
Good morning, everyone. Hey, just my two cents. Pro formas in the East and West would be super helpful, especially if you could put in internal growth. I think that
would help a lot for modeling.
But, Joe, just kind of a big-picture question about the Northeast. I appreciate that this may be a bit uncomfortable, but just hypothetically: if you don't win a New York
City contract, how does that change your thinking about your Northeastern assets, and Seneca in particular?
I mean you guys have said many times that you always assess whether you are the best owner of the assets. I guess my question is: does not having that consistency of
waste flow change your strategy up there?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Good question. There is two questions. So number one on the pro forma, as I said, I think looking forward it's fair to say that the West will be slightly bigger than the
East in terms of our US revenues. We will try and get something out as soon as possible on the historical results, etc.
But I think Canada obviously doesn't change, which becomes the North. The West is probably going to be about a third of our business, and the East will be the balance.
So there is some reference.
Highest margins will be the North, followed by the West, followed by the East, because you've got the Northeast.
Yes, we constantly evaluate if we are the best owners of the assets, number one. Number two, we also evaluate how we can maximize value.
So all of our assets are quite valuable assets. I think our team is operating them well, so we're actually making money. We've heard some others may not be, but we're in
this to actually make money.
So we think whatever happens -- and we are confident in our proposal on New York City; we think we've got a good proposal in and we are cautiously optimistic that
we can work with the city. But it is an RFP and I can't -- don't know where it's going to go from here.
So we will evaluate when we have facts. Seneca Meadows is a great site, and we can find ways to make it work under ourselves. Or -- I don't want to contemplate
anything else at this point, because we've got the team working hard.
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And Seneca is one of the areas that we actually took out in this recent organization. It's now part of our New York. So the team running New York City, Seneca, it's all
now an integrated market for us, which we think will be good from an operational perspective.
Tyler Brown - Raymond James & Associates - Analyst
Okay, perfect. Thanks for that color.
I'm a little confused. I thought in your prepared remarks you mentioned that you made a small acquisition in the quarter; and then I'm not sure if that's true or not, but
how big that was from his revenue perspective.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
It was in the hundreds of thousands of dollars. It was tiny.
Tyler Brown - Raymond James & Associates - Analyst
Okay, so what is this --?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
I think it was three routes we bought.
Tyler Brown - Raymond James & Associates - Analyst
Okay, so what is the $30 million outflow on the cash flow statement from acquisitions? Is that just timing of Texas closing?
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
I think that was the payment on the Dallas-Fort Worth acquisition we did at year-end. The actual funding for that happened in January.
Tyler Brown - Raymond James & Associates - Analyst
Okay, perfect. If I can just real quick, since I am the caboose here, I will ask another, just really quick on fuel. But, Kevin, can you guys go over how much fuel you do
burn?
If you've got 4,000 trucks, let's just say 2,500 hours a year, and 3 or 4 gallons an hour, I'm coming out with like 35 million gallons. Is that number in the ballpark?
Kevin Walbridge - Progressive Waste Solutions Ltd. - EVP, COO
Yes, we don't report on that. An average garbage truck, though, burns about 40 gallons a day of diesel depending on the route.
Tyler Brown - Raymond James & Associates - Analyst
Okay, perfect. Then just real quick on your hedge position in fuel, so I know liters is a total foreign language to me. But if you look through the annual, it does look
like you still have some above-market US hedges that roll off at the end of this year. And then you note that your Canadian hedges are maybe CAD0.57 a liter.
I just have no idea where that is in relation to the market. So any color there would be helpful.
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Ian Kidson - Progressive Waste Solutions Ltd. - EVP, CFO
You're right that our hedges are hurting us a little bit. Those -- our pre-existing hedges are rolling off this year.
We are looking at our hedge position going forward through 2016 and 2017. We did add some hedges that I believe were primarily concentrated on 2016 for next year.
Tyler, it will be something that we continue to look at on a go-forward basis throughout the rest of this year in terms of how we position ourselves for 2016 and 2017.
It's one of those things, as you can appreciate, where there is not necessarily a right or wrong answer; you just have to make a judgment and think about how to best
manage your business and exposures.
Tyler Brown - Raymond James & Associates - Analyst
Sure, but is -- sorry, go ahead.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
One thing with that, Tyler, is the rates that you enter into hedges are ex- all the government charges on top. So on top of it you've always got taxes in whatever state
and province you are in, etc.
So you referenced CAD0.57. I can tell you right now at the pump it's over CAD1.00. But the CAD0.57 versus the CAD1.00 and change is missing off the government
tax.
Tyler Brown - Raymond James & Associates - Analyst
Oh, okay, so it's a wholesale number, or more or less? Okay. All right, cool; thank you.
Joe Quarin - Progressive Waste Solutions Ltd. - President, CEO
Okay, well thanks, everyone, for joining us today. We look forward to meeting some of you at some of our site tours over the next couple months and then speaking
with you again in July when we report our second quarter. Have a good day.
Operator
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
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APRIL 30, 2015 / 12:30PM GMT, BIN.TO - Q1 2015 Progressive Waste Solutions Ltd Earnings
Call
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