Luke Pelosi: Yeah. So, Tyler, you’re right. There’s about a $1.2 billion across two bonds that come up next summer. They currently carry a blended coupon of about sort of 4.25% and 4.3%. If you’re redoing that today, you’re probably more in the mid-to-high 6s is what you’re seeing. So there’s certainly an incremental headline cash interest cost on that. However, where we have an opportunity from some structuring perspectives, the existing bonds that you would be refinancing are domiciled in Canada, whereas you’d be issuing the new ones out of a U.S. entity, thereby providing meaningful cash tax shield, right, because we’re becoming a bigger cash taxpayer in the U.S. And so, net-net, on the free cash flow line, the cash tax savings would largely offset the interest costs. And so you’d have a reclass or gross up on the actual line items, but net-net, your free cash number would be a pretty de minimis impact.
Patrick Tyler Brown: Okay. Excellent. That’s very, very helpful. And then, Patrick, can we get some high level thoughts on GIP? Can you maybe run down some of the end year financials, just how it was tracking in terms of EBITDA and leverage and just any thoughts about monetization there?
Patrick Dovigi: Yeah. I mean, as we stated, last year, again, that business experienced headwinds just from the run up and sort of the inflationary environment, as we’re coming on the backside of that, which largely through this year we’ll be through and we’ll be getting sort of back to where we anticipated that business would be. But I would say this year, low 200s from an EBITDA level without M&A, that business again today is sort of running 12% to 13% margins. We expect it to go to sort of 15% over the coming — over the course of the next year. Leverage sort of in the mid-5s as a private company. But again, we have a couple of interesting sort of M&A opportunities that’ll get done in that business as well. But again, nothing has changed from what I believe the thesis to be.
We’ll grow that business and expected sort of a $1 billion of equity value that’ll come out of that. I would assume, as we can — we’ll just look at market opportunities. As you know, there’s been a real run up in valuations in that sector, particularly with CRH sort of listing now in the U.S. coupled together with Lafarge separating their European and the North American business, other comps like road, all of those have had a pretty good runs over the last little while. So, I think the thesis is only getting better and time has been our friend and will continue to be our friend, but we want to optimize the value of that. But I think that’s a late 2025, 2026 type event where we look at that.
Luke Pelosi: And again, I’m not wed to any sort of exit in that. I mean, from our perspective, it’s really a triple track process, whether it’s an IPO, whether that’s a financial sponsor, just given the perfect size of that for financial sponsors today or whether that’s strategic. But I think there’s a lot of opportunity for exits in that. We just, we want to get it to the right number and get the equity value where we want it.
Patrick Tyler Brown: Okay. Perfect. And then my last one here. So there’s been a lot of movement on PFAS in the U.S., but I’m just curious, has there been any — has anything happened in Canada similar? I just don’t really know. And I’m just curious how you view PFAS in your ES lens. Is that something that, is within or outside of the scope of your ES business and could that be an opportunity longer term? Thanks guys.
Patrick Dovigi: Lots of — I would say lots of chatter as the chatter picks up in the U.S., but nothing specific in Canada at the moment. Obviously, the legislation that is being proposed was actually, I think, in line with what we believed was going to happen. I think there’s still some more room to go, but at the end of the day, landfills are not the generator of this. They’re a solution to the problem. We’re passive receivers of this material. So I think, that’s going to continue to play out in our ES business. Yes, a big part of what we’re looking at is different technologies. As we know, everybody thinks they have the solution to PFAS, but at the end of the day, what solution is going to work and how economically is it going to work and et cetera.
So we are in discussions with a multitude of companies that, I think, we’re either sort of looking to acquire a partner with to create a sort of solution to the PFAS issue that, we’re going to be happy to, everyone’s going to be happy to dealing with in the near future.
Luke Pelosi: But fundamentally Tyler, I mean, our perspective would be in the long run PFAS will be a tailwind for price and volume for our business. And so the exact sort of form in which that shakes out remains to be seen, but we’re feeling optimistic that this is ultimately going to be an opportunity for us across both our solid and liquid waste segments on a price and volume perspective.
Patrick Tyler Brown: All right. Thanks guys.
Patrick Dovigi: Thanks Tyler.
Operator: Thank you. With our next question is coming from Michael Doumet from Scotiabank. Michael, your line is now open.
Michael Doumet: Hey. Good morning, guys. I wanted to get back to the, to the guidance. Correct me if I’m wrong, but I believe the initial expectation was that margin expansion would increase as the year progressed. So can you comment on, whether that margin cadence still stands, obviously, outside the comments regarding the pull-forward?
