GFL Environmental Inc.

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, who will start off on page three of the presentation.

Thank you, Luke. I would like to start by thanking all of you, both equity and debt investors, for sticking with us through one of the biggest stock market declines since the Great Depression. Given management's equity ownership, we are in this together for the long haul to continue creating shareholder value over the years to come. When we took GFL public at the beginning of March, none of us thought we were at the start of an unprecedented global health crisis that has brought the personal and economic disruptions that we have seen from the shutdowns and other measures taken by governments across North America to stop the spread of COVID-19. Despite the significant impact on general economic activity resulting from these measures, we delivered an exceptionally strong quarter, growing adjusted EBITDA by nearly 25% to $223 million and completing over $1 billion in M&A in the quarter. When we were on the road for the IPO in late February, our recurring message was about GFL's resilient growth profile. Our first quarter results are a testament to our ability to deliver on that profile. Let me first and foremost importantly that none of the success in managing through the pandemic would be possible without our employees. Our top priority since the start of this crisis was, and as we begin to navigate through the loosening of government restrictions, continues to be ensuring the health and safety of our more than 13,000 employees. To protect our employees, we took immediate steps including setting up risk management teams of our senior leadership, and operational leads to identify, assess, and respond to the changing internal and external dynamics on a daily basis, and to provide real-time direction to the field to address issues as they arose. We implemented and have continued to follow physical distancing protocols as recommended by public health authorities across all of our operations, including work from home arrangements where appropriate, and we eliminated all non-essential travel. We have invested in enhanced PPE and sanitation practices and increased the frequency and depth of cleaning of our facilities and our high-tech services at all of our facilities. As an essential service, many of our frontline employees have continued to come to work every day, and the measures we've implemented have proven successful in keeping them safe. The loyalty and dedication of our employees have continued to deliver our essential service during these unprecedented times is truly inspiring and something for which I am extremely grateful for. We have also been touched by the outpouring of support from our employees shown by our customers and communities. We have in turn given back to our communities by continuing our financial support of local charities, including through our Full Circle project, and a donation to local hospitals of medical grade masks that we had in stock to support local health care workers. In terms of COVID on our financial results for the quarter, the impacts we saw vary greatly by market and were largely dependent on the characteristics of the rules of the shutdown that were imposed in each market. The COVID related impact on our solid waste revenue in Q1 was mostly attributable to the reduced volume in our commercial and industrial collection business during the last two weeks of March. Restricted economic activity from regional shutdowns reduced demand for our IC&I collection services, with the timing and scope of the shutdowns driving the magnitude of their impact on revenue in each of the affected markets. Our residential collection business held up very well and actually outperformed in those Canadian markets where we are paid by the ton under municipal contracts. a relatively lower proportion of our revenues coming from volume-based post-collection activities, mitigating the overall revenue impact from the reduction in C&D and special waste volumes into our landfills in the quarter. We saw the greatest volume impacts in the primary markets in which we operate, most notably Toronto and Montreal, where stay-at-home orders were put in place earlier than other markets and covered a broader scope of service offerings. Volumes in our secondary markets where we generated almost two-thirds of our solid waste revenues were far less impacted. Our pricing during the first quarter was very strong, contributing 4.9% to revenue growth. We continue to see pricing discipline in the industry, and as of now, we have not experienced any significant pricing-related impact from COVID. As we said on our investor call in April, because of the high proportion of our revenues coming from our service-based collection, we have a highly variable cost structure. As volumes slowed, we reduced our operating costs by consolidating collection routes, parking trucks, and reducing overtime hours, while our disposal costs, R&M, and fuel costs naturally flexed down with reduced volumes. At the same time, we reorganized our workforce across our service offerings and business lines to minimize the disruption to our employees. Because of our focus on the safety of our employees, we did incur incremental costs in the quarter for the enhanced safety and hygiene protocols that we implemented that I described earlier. We also looked at our SG&A costs and have significantly reduced discretionary spending there as well. We have eliminated substantially all travel and entertainment costs as we postponed annual merit increase for salary employees. but not for our hourly employees until we have greater clarity on the impact of the virus on our operations. We have taken these measures to avoid incremental headcount reductions, recognizing that our employees are our number one asset, and we want to continue having our engaged workforce ready to carry on once we get on the other side of this pandemic. On capital expenditures, we have evaluated what can be eliminated or deferred for the remainder of the year. During the IPO Roadshow, the view for 2020 was a total spend of approximately $440 million on capital expenditures, which included a significant component of discretionary replacement and growth capital. As we have said before, because of our relatively lower landfill concentration, our replacement CapEx needs run at approximately 8% of revenue. And looking at our 2020 spend, we've identified $100 million of spend that we could eliminate for this year if we need to. Our actual spend will depend on how things evolve over the rest of the year. We plan to continue to capitalize on attractive opportunities that may arise, and like we have seen in the past, we expect that this crisis will generate opportunity. But we have this lever available to us ultimately to mitigate the impacts on the free cash flow line for the year if we need to use it. In terms of M&A, we completed eight acquisitions during the quarter. Five of these contemplated at the time of the IPO, including county and American waste. And we closed three additional tuck-in acquisitions around the beginning of March. We deployed $1.1 billion of capital on County and American and approximately $70 million of capital on the six tuck-in acquisitions. Although there have been some delays because of COVID-related travel restrictions, the integration of both County and American are progressing very well. With the highly successful financing that we completed last month, we have over $1.3 billion in liquidity and are ready to capitalize on opportunities as they arise. We have temporarily delayed the closing of a few smaller tuck-in acquisitions since the onset of the pandemic. But we continue to progress on several opportunities, and our pipeline continues to be robust. Our focus on creating long-term shareholder value has not changed. As we saw in managing through the downturns in 2008 and 2009, and again in 2015 and 2016 in Canada, times of uncertainty and increased volatility can create great opportunities. We expect that having a strong balance sheet, a flexible capital structure, and a very supportive group of both equity and debt investors will position us well to capitalize on these opportunities as they continue to arise. I will now pass it over to Luke, who will discuss the financial results for the quarter.

Thanks, Patrick. Turning to slide four of the presentation, revenue for the quarter was $931.3 million, a 29% increase compared to the prior year. Revenue from new acquisitions accounted for approximately $180 million of the increase, with the balance of the growth coming from organic price and volume. I will walk through the details of the price and volume growth by segment on the following page. Cost of sales as a percentage of revenue was 91.5%. Under IFRS, depreciation amortization expense-related operations is recognized within cost of sales. Cost of sales excluding DNA and acquisition-related costs was 67.5% of revenue as compared to 66.5% in the prior period. The year-over-year change is primarily attributable to the impact of acquisitions, both in terms of business mix and margin profile. The one extra day in 2020 attributable to the leap year also increased total cost of sales in an amount and in a percentage. Fuel costs as a percentage of revenue were 4.5% compared to 5% in the prior period, a decrease attributable to both revenue mix and diesel prices. Diesel costs vary by region, but were down approximately 4 cents as compared to the prior year. Commodity prices were down approximately 32% period over period, which resulted in higher amounts paid to third-party processors of recyclable volumes. COVID-related impacts, including decremental margins on volume losses, incremental equipment rental expense in our infrastructure business attributable to delays in receiving equipment, and additional spending on enhanced safety and hygiene activities, also increase cost of sales. SG&A expense, excluding IPO and acquisition transaction costs and depreciation expense. Again, IFRS requires us to recognize depreciation expense within SG&A. was 96.7 million for the quarter, where 10.4% is the percentage of revenue. Total DNA expense was 221.8 million, a period-over-period increase of $47 million, which was driven by the incremental DNA expense associated with tangible and intangible assets acquired organically and through M&A since the prior period. Interest and other finance costs were 269.4 million, an increase of 145.5 million as compared to the prior year. The increase is primarily attributable to refinancing costs incurred in relation to the IPO, all of which were contemplated in the IPO offering documents. The change in other income and expenses is primarily attributable to the non-cash foreign exchange fluctuations on our U.S. dollar denominated term loan and the mark-to-market revaluation of the purchase contract component of our tangible equity units. With respect to income taxes, the change in the deferred tax recovery is largely attributable to the costs incurred in respect of the IPO, For current income taxes, we continue to have minimal cash tax obligations. GAAP net loss was $0.77 as compared to a net loss per share of $0.64 in the prior period. On an adjusted basis, net loss per share was $0.03. Turning to page five, you'll notice summary of results by operating segment. In solid waste, price and surcharges drove 4.9% growth as compared to 4% in the prior year period. As we've told you before, our focus on pricing is going to lead to incremental growth in this lever as compared to prior periods, and this quarter's results are a testament to that. As we've also told you, our pricing activities are front-end loaded, so this level of PI will taper down throughout the year. Volume for the quarter was negative 0.1%, but the volume story needs to be split into a couple of parts to be fully understood. First, volume for the first 10 weeks of the year was running positive 100 basis points. So we view this entirely as a COVID-related impact. Second, the volume decline is largely attributable to our commercial and industrial collection businesses, as residential collection and the majority of our post-collection businesses were positive or flat in March. And third, the declines varied significantly by market, with the Montreal and Toronto markets seeing double-digit decreases starting in mid-March as compared to the prior year. Current trends, however, appear promising, with sequential volume increases week after week, and Patrick will speak more to that in a moment, but these were the impacts we realized in the last few weeks of the quarter. Solid weights suggest that EBITDA margin was 28.5% for the quarter compared to 28.9% in the prior year. Included in the current quarter margin is a 50 basis point decline from the extra leap day, a 40 basis point drag from commodity pricing, and about 120 basis points drag from acquisitions. a decrease primarily attributable to Canada Fiber's acquisition that has yet to achieve the anticipated margin profile. Excluding these items, the base solid waste business drove nearly 150 basis points of organic margin expansion over the prior year, consistent with our previously communicated expectations regarding the anticipated impact of our pricing and procurement initiatives, both of which we have discussed with you in the past. The disruptions from COVID, both in terms of lost margin on volume declines and incremental health and safety related costs, also served as a headwind of margins. Looking at soil and infrastructure, the success of our previously discussed strategy continues to be demonstrated as we realize 6% organic revenue growth during the quarter, despite certain projects being disrupted and or put on hold in response to government-imposed COVID mitigation measures. In terms of margins, The prior quarter benefited from several high margin specialty projects that did not repeat in the current quarter. Also, delays in the acquisition of planned equipment purchases to support the growth of the infrastructure and soil remediation business resulted in increased equipment rental costs as compared to the prior quarter. We believe these impacts to be the timing related in the margin profile of the business will return to the historical trajectory in subsequent quarters. Our liquid waste business was our most impacted segment during the first quarter. Revenue was impacted by not only COVID-related volume disruptions, but also depressed WTI prices and the impact on the used motor oil market, as well as some difficult comps in the prior quarter, where we benefited from an increased level of high-margin emergency response activities and a bulk sale of inventory of used motor oil that we had acquired in an acquisition in late 2018. Used motor oil selling prices were down 19% in Canada and 12% in the U.S. in the quarter. While we've modified our change for oil rates to mitigate the ultimate spread compression, there is a time lag which ultimately impacts current period results. While volumes sold in Canada were relatively comparable to the prior period, U.S. volumes were down 45% when considering the bulk sale in the prior period. Collected volumes in the quarter were down approximately 25% compared to the prior year, a decrease we believe is attributable to the COVID-19 disruptions. Turning to page six, Reported cash flows from operating activities were a use of $91.3 million in the current quarter as compared to $19.4 million in the comparable period of the prior year. The change was primarily attributable to costs incurred in connection with the IPO of $145 million. Excluding these IPO costs and the changes in non-cash working capital, cash flows from operating activities were positive $108 million, an increase of 34% compared to the prior period that's attributable to the increase in adjusted EBITDA. On the point of working capital, we have yet to see any material impacts on cash collection activities. We are actively monitoring our credit exposures, but to date have not seen any material changes. We did hold onto cash during the end of March, pushing up AP balances at month end. In terms of investing activities, as Patrick mentioned, we spent $1.1 billion on M&A during the quarter, the substantial majority of which was contemplated in the IPO offering documents. We also spent $100 million on capital expenditures in the period, which was below plan due to delays in receiving certain equipment from overseas. Cash flow from operating activities less capital expenditures was a use of $46 million when excluding the IPO costs, an improvement of 61% over the prior period. As we've said before, the seasonality of our business coupled with the front-end loading of our CapEx results in a free cash flow being generated in the back half of the year. With the IPO transaction costs behind us and our significantly reduced interest costs going forward, we see a clear path to material free cash flow generation by the end of the year. Cash flow from financing activities were the outcome of the IPO and the pre-closing capital transactions, all of which were detailed in our prospectus. Additionally, subsequent to quarter end, we issued a new U.S. dollar 500 million 4.25% five-year notes. This was an opportunistic financing that lowered our overall interest costs and bolstered our liquidity, which positions us favorably to capitalize on any opportunities that may arise. Turning to page seven, we have presented a summary of our net leverage at the end of the quarter. As forecast in the IPO offering documents, net debt and net leverage materially decreased as a result of the application of the IPO proceeds to debt repayment. Substantially, all of our long-term debt is denominated in US dollars and is hedged to Canadian at fixed rates. However, for financial reporting purposes, our US dollar denominated debt is revalued to Canadian dollars at the FX rate at the end of the period. During periods of foreign exchange volatility, such as that we experienced during the end of the first quarter, we may realize significant non-cash foreign exchange adjustments on our balance sheet that are in excess of the foreign exchange fluctuations realized on our P&L. The foreign exchange rate was 1.42 at quarter end as compared to 1.3 at year end, a change that resulted in an incremental $395 million of long-term debt recognized on our balance sheet. To facilitate a comparison of net leverage to the amounts that were presented as part of the IPO Roadshow, we have presented our quarter and long-term debt balances translated to U.S. dollars using the year-end foreign exchange rate, which you can see in the middle column yields the net leverage amount approximately four times at the end of the quarter. Not reflected on this balance sheet is the April bond offering, which was a leverage-neutral transaction. Considering that transaction, we have over $1.3 billion of liquidity on hand with no material debt maturities in the near term. I will now pass it back to Patrick, who will discuss the trends that we are seeing in the business.