Waste Connections (WCN) Q3 2026 earnings call transcript

Thank you operator, and good morning. I would like to welcome everyone to this conference call to discuss our third quarter results and increase outlook for 2026, along with some thoughts about the setup for 2027. I am joined this morning by members of our senior management team, including our CFO, Marianne Whitney, who will first provide our forward-looking disclaimer and other housekeeping items.

Thank you, Ron, and good morning. The discussion during today's call includes forward-looking statements made pursuant to the safe harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties.

Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 21st earnings release and in greater detail and waste connection filings with the U. S. Securities and Exchange Commission, and the Securities Commissions are similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements as there may be additional risks of which we are not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business.

We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAP measures such as adjusted EBITDA, adjusted net income on both a dollar basis and per diluted share, and adjusted for cash flow. Please refer to our earnings releases for a reconciliation of such non-GAP measures for the most comparable GAP measures.

Management uses certain non-GAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAP measures differently. I will now turn the call back over to Ron.

Thank you, Marianne. We are extremely pleased to deliver third quarter results above expectations, setting up another increase to our full-year outlook and demonstrating, once again, the durability of our model, regardless of the macroeconomic environment. Most notably, underlying margin expansion of 50 basis points drove adjusted EBITDA margin of 34%, despite surging diesel costs late in the quarter. Solid waste organic growth in Q3, including core pricing of 5.5%, plus fuel and material surcharges of 1.3%. On average yields of 4.3%, unit volumes declined, ease to 1.2%. A sequential improvement of 70 basis points from Q2, primarily as a result of a pickup in more cyclical landfill volumes, with Q3 special waste up 7% year-over-year and construction and demolition debris up 5%.

We are also encouraged by trends in our other lines of business. We saw continued strength in E&P waste revenue up another 6% sequentially and in certain recycled commodities, including OCC, where values have improved in each of the past three quarters to now up 35% from year-end levels. Additionally, we are benefiting from increased renewable natural gas generation from the new facilities we have brought online, as we have discussed earlier this year.

Moving next M&A, year to date, acquisitions of 130 million in annualized revenues include two west coast solid waste collection franchises closed during Q3. The pipeline remains robust with dialogue ongoing that will result in the closing of additional transactions later this year or early in 2027. With liquidity of over $1 billion and leverage remaining at about 2.75 times debt to adjusted EBITDA, we continue to have capacity for outsized acquisition activity while funding our growth strategy, sustainability related projects, and expanding our return of capital to shareholders. As announced yesterday, our Board of Directors authorized a 10% increase to our regular quarterly per share cash dividend, our 16th consecutive double-digit increase since the initiation of our dividend in 2010.

Year to date, we have completed record levels of share repurchases totaling over $1 billion or 2.5% of shares outstanding, as we have and will continue to take an opportunistic approach to buybacks. Additionally, as highlighted in our recently released 2026 sustainability report, we remain on track to achieve our long-term aspirational sustainability related targets. Since 2018, we've invested over $500 million in sustainability related projects and are benefiting from the expansion of our network of renewable natural gas facilities and the introduction of enhanced automation in new and existing recycling facilities.

Moreover, we continue to enjoy the results from three years of improvement in employee retention, and most importantly, record safety performance. Our continued progress in ongoing investments in sustainability related projects reflect our commitment to the environment, our employees, and the communities we are truly privileged to serve. We consider these efforts and enduring part of our corporate culture, rather than a program with a defined end point, as we've used sustainability as integral to our strategy for long-term value creation.

And now I'd like to pass the call to Mary Ann to review more in depth. The financial highlights of the third quarter are increased full-year 2026 outlook and what that implies for Q4. I will then provide some preliminary thoughts about 2027 before heading into Q&A.

Thank you, Ron. Third quarter revenue of $2.638 billion exceeded our expectations and was up $180 million or 7.3% year over year. Contributions from acquisitions, net of divestitures totaled $53 million in the quarter.

Organic growth in solid waste collection transfer and disposal was led by 5.5% core price, which range from below 4% in our mostly exclusive market western region to above 6% in our competitive region. Fuel and material surcharges of approximately $30 million or 1.3% stepped up sequentially from Q2 by about 20%, reflecting higher diesel costs in Q3, and they will continue to be impacted by the pace and magnitude of changes in diesel pricing.

Yield of 4.3% on solid waste unit volumes down 1.2%, reflect the following year-over-year results in the third quarter on the same store basis. Roll-off polls were down about 2.5% on rates per poll up 5.5%. Consistent with activity in recent quarters, polls were down year-over-year in all regions, except in the western U. S. , where polls were up 2.5%. Landfill tons were up 3% on rates per ton up about 4%. Q3 reflects a step up from Q2 when landfill tons were effectively flat year-over-year, and it represents the first quarter in the past two years during which all three waste types showed year-over-year improvement, MSW, C&D, and special waste.

Activity was led by strong special waste in C&D tons, along with a nominal increase in MSW. Special waste was up 7% in Q3 on multiple jobs across many geographies, ranging from New York and Pennsylvania in the northeast to Oregon in our western region. C&D tons were up 5% on similarly widespread increases, most notably in our southern region, led by Texas and in California in the west.

Looking at other lines of business, as Ron noted, E&P waste revenue continued to ramp during Q3. Year-over-year organic growth of about 5% was led by a 9% increase in the U. S. , most notably in the Permian, where rig count has increased by about 10% since early this year.

Activity in Canada, while more production-oriented and therefore considered less sensitive to crude values, remains about flat year-over-year when normalized for an outside remediation project in the prior year. Moving to other commodity-related revenues, recycling revenues were up about 12% year-over-year, driven by higher OCC values, particularly offset by ongoing weakness in plastics. Landfill gas sales were up 35% year-over-year due to the combination of higher volumes from new R&G facilities and higher values for rims up about 10% year-over-year to an average of about $2.50.

Adjusted EBITDA for Q3 as reconciled in our earnings release was $895.8 million, up 7.9% year-over-year. At 34% of revenue, our adjusted EBITDA margin was up 20 basis points year-over-year, excluding a margin drag of about 30 basis points for higher fuel costs, underlying adjusted EBITDA margin was up 50 basis points. Set another way, adjusted EBITDA margin would have been 34.3%, excluding fuel impacts.

Once again, our outsides underlying solid waste margin expansion reflected favorable price cost spread dynamics, magnified by benefits from employee retention and safety, most notably statings and risk management costs. And finally, year-to-date adjusted free cash flow of $1.09 billion was in line with our expectations, and we remain on pace for full-year 2026 outlook of at least $1.4 billion.

Given our outperformance in Q3, along with higher fuel costs and expected recovery thereof, as well as incremental contributions from acquisitions and commodities, we are increasing our full-year 2026 outlook as reconciled in our earnings release to revenue of approximately $10.09 billion and adjusted EBITDA of approximately $3.345 billion or 33.2%. This implies Q4 revenue of about $2.52 billion and adjusted EBITDA margin of 33.3%, up 20 basis points excluding fuel, about as expected in what we knew would be our toughest quarterly comparison versus the prior year period.

Our outlook assumes no change in underlying economic trends. The closing of additional acquisitions would provide upside to our increased 2026 outlook, as would further improvement in commodities and related activity. Further movement in fuel prices and the timing of recovery of higher fuel costs will also continue to impact results.

With that, I will turn the call back over to Ron to provide some preliminary thoughts about 2027 before we head into Q&A.

Thank you, Marianne. As we've said, we're extremely pleased once again to raise our outlook on the strength of our operating and financial results, in spite of the magnitude of unexpected headwinds from record diesel rates and ongoing daily macroeconomic uncertainty. The consistency and visibility of our results, most notably in a challenging year like this one, are a validation of the differentiated market selection strategy that has guided waste connection since inception 29 years ago, along with our decentralized operating philosophy.

We're most grateful for the commitment and dedication of our over 25,000 employees, as we recognize that superior execution by empowered local leadership has been and will continue to be a true differentiator. Given the level of engagement of our workforce, we're excited by the early indications from AI driven applications focused on our operations, recognizing that these returns on these technology investments will be most fully realized by teams knowing how best to put them to use.

We're proud of the results we've delivered today in 2026 and our positioning as we exit the year. In fact, from an operational standpoint, we feel about as good as ever. We've recovered higher fuel costs faster than expected and delivered outside underlying margin expansion on record safety performance, while also managing the reaction at Chiquita as we expected, bringing new RNG facilities online and integrating another 130 million in acquisitions here today.

We've also returned record amounts of capital to shareholders through opportunistic purchases and continued double digit per share dividend growth, all while maintaining low leverage, setting up for continued growth and free cash flow generation. In short, we've honored our commitments. And regardless of market sentiment, we will maintain our focus on what ultimately drives value creation as we continue to lead the industry in adjusted EBITDA margin and true free cash flow generation.

To that end, although we will not provide our formal outlook for 2027 until February, we are able to provide a high level framework, assuming no change in the current economic environment.

On that basis, we should be positioned for mid to high single digit revenue growth in 2027, from the combination of about 1% combined rollover from acquisitions already completed and RNG facilities brought online in 2026, price load organic growth in solid waste, ongoing fuel and material surcharges, and a higher commodity related revenue from E&P waste and recycling, along with acquisitions that we will complete during the remainder of 26 and throughout 2027.

Adjusted EBITDA margin expansion in what we would consider a normalized range from solid waste, with outsized impacts from higher fuel costs at recent levels, expected to be largely offset by increased commodity related tailwinds, depending on the timing and extent of surcharges, and double digit growth in adjusted free cash flow per share, reflecting the continued declining impact from spend on Chiquita and the substantial completion of our RNG CAPX outlays.

These expectations will be impacted by the pace and magnitude of ongoing acquisition activity in 26 and expected to grow during 2027 as we complete additional M&A. To the extent that we see further improvement in commodity values, those impacts would also be added to these preliminary thoughts. As would ongoing share repurchases. We look forward to providing more detail when we report Q4 and give our formal outlook for 2027 in February.

We appreciate your time today. I will now turn this call over to the operator to open up the lines for your questions. Operator?

Hi, Kevin. It's Mary Ann. In terms of free cash flow, obviously the piece that we haven't gotten specific on is the extent to which the Chiquita outlays decline, which of course will provide in our February outlook. But what we do know and made clear is that the RNG spend is substantially complete. So if you think about that, we said we'd be spending about 75 million this year. And so if that largely doesn't repeat, that's one bucket. And then again, we'll get specific with Chiquita, but we're looking forward to being able to communicate what the expected decline is in 27 versus 26. The same way we communicated the decline in 26 versus 25.

So stay tuned for that. As you said, we think longer term, we ultimately get back to that 48 to 50% or around 42. So you start bridging that gap, but a little too early to get really specific about where we fall in that range.

Kevin, the only thing I would add is, look, I think the step down. Chiquita from 25 to 26 is exactly in line with as we guided. And I think you can expect a similar type step down for 27.

No, there's nothing to call out. What happens is that the sodically, when a claim gets paid out, it actually hits the region. And so you might, you see that dynamic in the quarter when that happens.

Just conservatism.

Yeah, you know, I'd say NOAA, we enjoyed the benefits of that sequential improvement in volumes and all waste streams that are landfills being positive for the first time in several quarters. So a little too early to assume that that continues. So that would just, I guess your word, maybe a little conservatism there. You also know that, you know, there's always anomalistic differences year over year. And although you didn't specifically ask about margin, you know, a reminder that last year's Q4 was our, you know, it'll be the toughest quarterly comparison. And it was strong on a relative basis.

You know, the only observation would be that, that while special waste has continued to be positive, and, you know, we never generalized from a few weeks of data, but it's good to see that special waste continued to be positive in October. We didn't see a similar increase in C&D. Reminder that, you know, these projects are sensitive to things like interest rates and fuel costs, and they're lumpy.

Sure. Yeah. No, I mean, in that commentary on normalized underline, we have assumed no benefit or no incremental benefit in 27 is baked in from AI at this point. That's not saying some cannot happen. As you know, we experienced some in 25 and 26 from our initial initiative, which was a pricing initiative, and that has exceeded our expectations.

We will, the main three initiatives that tie together that we are working on throughout this year and in through next year will really not be fully deployed, a couple of them until the end of 27, and one of them until the middle of 28. So, you know, the real beginning impact of the AI initiatives, well, margin-wise, we'll start to see in 28 and not really realize until fully until probably 29.

You know, we're really not getting granular on all the moving pieces, but clearly, you know, it's cost pressures that inform our thinking about how much price is needed. So, you know, we will certainly continue to look at what we're seeing in the business. You know, and we know where we've been this past year and to the extent that there's not a material change, it feels like the right ballpark for the way to think about pricing.

And we certainly are encouraged by the, you know, what our tools have done for us in terms of retention, but we're mindful of the pressure on consumers. So, all of those things will go into our thinking, but we're generally would think of that 150 basis point spread between price and cost. So, that's why I started with cost.

And, you know, we'll go from there, but early days to get to granular.

Yeah, Adam. Well, you know, historically, number one, as you know, we don't guide you, you know, two decades now, but, you know, 150 to 200 million was sort of a historical, probably five to 10 year ago average. We have stepped that up as the size of the company and the geography has changed and two countries, et cetera.

So, you know, I would tell you that, you know, 200 million is sort of a probably a more normalized low water mark now, whereas before it might have been more of a high water mark.

And no, you know, you're going to, there's nothing's changed in the strategy or the opportunity. Acquisitions are opportunistic and timing and sellers really control that, not, not us as acquirers. So, you know, it will be very likely as you look out over a three to five year period that it will look much more similar to the, you know, pick at the 22 through 25 time frame than different from that.

Yeah.

I mean, number one, Adam, the remediation at Chiquita is following what we would tell you. And I think experts in the field would tell you, including the EPA, a typical curve of a decelerating ETLF. And there's a lot of statistics that support that. And those go into, you know, what we know about the cost structure. Obviously, as the reaction pools with time, you get less leachate generation.

Therefore, you have less leachate disposal costs. And you have less infrastructure such as wells to do, hover to put down over the reaction area, et cetera. So, you know, we began by covering some 41 acres with a geosynthetic membrane. We've expanded that and buffered what we call the west toe of the landfill this year. You know, that doesn't repeat as an example going into 27.

So that's an example. You don't drill additional wells per se. You know, we've drilled some 300 wells. You know, I'm not saying that can't go up five, but it's not going to go up 100. So, those are the things that inform our thinking about why it continues to decelerate.

So, really, the main costs are related to leachate management. And if that continues to come down in volume, the costs come down, put very simply. And that has happened in 25, 26 over 25, and it will continue to step down in 27.

Sir, I'll start with the second part of your question, Tony. We continue to see some decline in the amount of shedding. You know, as was a previous question asked, I believe by Adam, we had quite a bit of M&A activity in 23, 24, and 25. And so it takes, you know, multiple years to come up upon contracts that you may not want to renew.

So, I'm not saying shedding is certainly that's always happening, but that is declining. And Marianne, we'll give some color on the first part of your question.

Sure. So special ways I mentioned the prepared remarks that they were broad-based and called out the Northeast Oregon, Texas, California, in terms of volumes more broadly.

And, you know, looking, digging into the types of projects we've been seeing, it's not one particular thing. It's everything that ranges, you know, by geography, but what's going on there? So you've seen highway projects, infrastructure projects, remediation, data center and chip plants. Yes, in some markets like in Texas and commercial projects. So it really, really runs the gamut. What's encouraging is that broad-based nature of it. And the fact that, for instance, 60% of our locations had positive special waste tons in Q3, and four of six of our regions were up. And that's in comparison or in contrast to last quarter, only two of six were up. So that's the way I would characterize it. That's the incremental color I can provide, Tony.

And Tony, only last thing I'd say on that is, you know, on the C&D front and the commercial front, look, historically in our industry, it's taken about 1.5 to 1.8 new housing starts to create organic volume in that business, which then converts to permanent volumes. As you know, this week, that number has been announced. It's stepped down to 1.2 million new housing starts and expected to go lower with current interest rates into 27. So I think, you know, there is one economy going on with things like Marianne just outlined, infrastructure, data center, et cetera. And then there's a residential construction that is just really is sort of struggling with what's going on with interest rates and fuel costs and the other thing that affects consumers and contractors.

Yeah. Well, look, I mean, as we said, EMP continued to step up sequentially once again after stepping up in the second quarter again. So it has continued to improve in both the US and Canada more so in the US because it is more drilling oriented in the business versus production in Canada. But, you know, I think you have to understand that producers are not going to react to what they believe is a short term stimulus. And, you know, we have an on again off again hourly war in Iran and the Strait and that is a short term believed phenomenon.

So you've seen about a 10% increase in drilling activity this year. You know, some people would think with a 70% increase in crude, you'd see a like increase in drilling, you would if it was believed that was a permanent scenario. That is not the belief of most of the producers at this point in time. If it becomes, you know, six months from now it's sustained. Now it's going on a year and a quarter. That could change that dynamic.

And Tony, what the way I would frame it is when we think about next year, we think that there should be a higher correlation between the pickup and activity and EMP and crude. So said another way to the extent that crude remains at these elevated levels, we would expect to see more. We'd say what we've seen year to date, even though it's ramp sequentially, really doesn't reflect $100 crude. That's just, you know, rig counts are still down. You know, they started declining in the first quarter of 24 and have stepped down and they're still down about 50. It's only up 10% since earlier this year. So that's how we think about it. And that's what we're communicating with those broad strokes about next year.

Sure. I mean, you know, you're referring Jerry, I believe, fully to our Arrowhead infrastructure. Oh, head landfill and our rail infrastructure. Look, we're, you know, we're peaking right now between 7 and 7,500 tons a day, you know, which is triple where we started less than three years ago, two and a half years ago. So we're very, very pleased that that we have continued to work on infrastructure at our intermodal facilities, which is some of what's required to step that up again. We believe that as we look out over the next 24 months, it's reasonable for us to step Arrowhead up to 8,500 to 9,000 tons and ultimately, you know, at some point, get that number higher.

But that's obviously that takes incremental track and other facility enhancements at both the transfer station and intermodal end and the landfill end. So, and then as we mentioned, we began a rail project in the end of the second quarter in the Miami Dade County area, going into one of our Florida landfills that stepped up in the quarter nicely. And, you know, we'll continue to ramp into 27. So we, you know, we definitely have more volume moving on rail in the third quarter than we've ever had. And we expect that to make, you know, incremental improvements as we go forward. Again, as we've mentioned, rail is a sort of a unique geographical modality.

It's not something I think you're going to see in most parts of the U. S. , but in the upper northeast and a few places like southern Florida, you know, that's where you're going to see this grow.

And, Jerry, if I could just add one more comment about internal, internalization because you started there just more broadly. You should think in terms of where we're at 58%, I know last quarter we were at 60, the difference there is just the mix of business. And so you should expect us to stay in this 58 to 60% range. That's really no change in internalization. And to that point, our eastern region has actually increased its internalization. So it's not just nothing else going on there.

Sure. So it's early days, but we would consider fuel continuing to be a headwind. And that's why we're saying look, underlying cost pressures, you know, we feel comfortable thinking in terms of, so, ex-fuel that 20 to 40, as you said, is the right way to think about it. But we continue to see headwinds from fuel and the expectation is that to the extent they do persist, that there should be some correlation between those commodity driven revenues, which would absorb some of those incremental pressures. If fuel breaks and it's lower, then, you know, it could be a tailwind. But again, what are those other commodities do? So that's why we framed it this way, that the expectation that one would support the other.

Yeah. First off, let's break that apart. It has nothing to do with any change or approach to uses of capital. We have adequate plenty of capital access and liquidity to do both to almost any degree we want. So no one should read into, you know, stepping on the buyback with the stock dislocation as a reason that M&A is slower, because that is inaccurate.

Look, the reality is, is we are disciplined buyers. It would be great if all the strategics and non-strategics were that way, but that's not necessarily the case. So look, not all solid waste is created equal. Not all even does create equal. There's all kinds of what we would consider poor assets that some companies are scooping up. That's not something we're interested in. And we're not out trying to outpay private equity who has more money to put to work on any deal so they don't have to return it to LPs and continues to be undisciplined.

So, you know, when we spend, when we do less M&A, the market should be happy because that means we were disciplined in that period when others were not. So there's no change to the strategy. The opportunity remains significant. There are timings, M&A, ebbs, and flows. And, you know, you wonder what happened. What happened was just timing and opportunities and discipline.

So, you know, that is what I tell you. But we have ample capital to do everything we've said we're doing.

Yes.

So just to clarify, you know, we didn't give guidance. What we gave was a framework for thinking about how next year we'd expect it to play out. And so I think thinking about a normalized about of acquisition contribution is included in that. So, yeah, if you think of it as kind of at one to two percent, which would be normalized amount of contribution.

That's in that number.

Yeah. Well, Chris, I think, look, first and foremost, in both the US and Canada, we are a disposal oriented E&P company. We don't do transportation. We don't do field services. We're not interested in low margin, highly competitive pieces of the business. We're predominantly a landfill and processing company in both countries. Canada is production oriented. The US is drilling oriented. The reason we did that two years ago was to balance that portfolio.

You know, right now E&P is, again, I'm rounding is going to be six to seven percent of revenue, you know, higher than that because of the margins in EBITDA. That will continue to grow. We'll continue to do tuck in deals in both the US and Canada, but it will actually come down over time as a percentage of revenue because the corpus of the other 93% is so large. And there's so much opportunity there that it will just naturally come down. And look, we are comfortable with the size of it. If it didn't come down below six, seven percent, we're also okay with that. It is a great business. As you said, it's an excellent cash on cash return business.

But, you know, look, while it's great on the margins, it does have volatility. We acknowledge that. That's why we think that's the right size for it, right? And it can move with crude. So, again, why we like balancing it to 5050 with the Canadian business we did on the production side. So, you know, it's a long winded answer to your question. I'm sorry, but we're not, we're not out there looking for some outsized deal in E&P and we're not looking to diversify what we do in E&P at this point.

In fact, I'll leave it there.

Yeah. Trevor, first off, whatever we would tell you, it would be a guess. And it's probably best not to do that. I mean, as you know, while a data center is a huge capital investment, no matter what the size. And has a lot of activity during construction. Once it's actually constructed, you know, they probably produce an eight yard or a trash a week because they got, you know, 10 people. So it's not something that converts into some big commercial or industrial waste or recycling opportunity. It's more of a front end construction opportunity. So, you know, in markets like Texas, in markets like Virginia, Utah, which we're actually not in, where we're seeing Oklahoma, Tennessee, we're seeing some of this construction of the site.

It is a boost. It comes in sometimes as some special ways, but more as seemed waste on the construction side.

But we would just be guessing to try and tell you what that could be. You know, could it be 20 bits of volume or something? I mean, you know, we don't want to sit here and say it's 1% of volume growth or something. If it is, that'd be great. But I'd expect it to be more, you know, 20 to 40 bits of volume growth.

Sure. So we're about 80, 26 to floating are with a weighted average 10 of about eight years and an average cost of that about 4%. And no near term maturity is, you know, will will continue to look. I mean, we had good timing this year last year when we when we put, you know, issued notes and we'll continue to try to be opportunistic, but don't have a lot of exposure.

Sure. So, you know, we're certainly sensitive to the fact that we have talked about the direct impact of higher fuel that we're buying and third party fuel surcharges like third party brokerage. But Shlomo, we're certainly watching carefully and have seen some cost creep that we believe is related to higher fuel. I mean, everything that's delivered to us as a slightly higher sticker price now, whether it's parts of materials, building and property or CAPEX repairs.

You know, we are seeing that. And the good news is we came into the year well positioned for outside underlying margin expansion. So that that hasn't been an issue we've highlighted, but it certainly informs our thinking about how much price we need going into next year. And that's why over the next few months that'll really crystallize for us.

And then to your question about sensitivity, you know, we've talked about that depending on the market. We believe there is some sensitivity, you know, especially given the fact that smaller players may not have imposed fuel surcharges, for instance. And, you know, the good news is we've seen better than expected retention and lower rollbacks as a result of our pricing tool. So, you know, it's helpful to have more selective price increases that can make a difference as well. But we're absolutely mindful of the incremental pressure that's out there.

Well, you know, we try to be opportunistic on hedging. And clearly, the past year hasn't given us much opportunity to get locks on for 27. So that's another thing we'll watch and observe because to your point, you know, does it make sense at these levels? Or is there an opportunity to remain floating to take advantage of lower fuel? So we'll continue to evaluate that.

So, you know, as you can appreciate Tammy, you know, we've provided a framework for next year, so we're really not getting, you know, specific on that. The comment about the correlation to higher fuel was really to make two points. One is even though ENP has been up this year, we'd say it doesn't reflect, you know, $100 crude. You know, we've seen some increase in recount, but again, whatever the reason that there's an expectation that it's not sustained or whatever that reason is, we would argue that we really haven't seen a material increase.

And the observation would be that as we think about next year, we don't know exactly what fuel is going to do, but what we're saying is that we would expect when we gave that framework, it has an expectation that there is a higher correlation. But again, I wouldn't read through that to say that runs contrary to expectations, but what percentage of the overall mix it is, et cetera. It's just too early for any of that discussion.

And about RNG related revenue to the next year.

Oh, again, what we said was that there would be about a one point associated with the rollover contribution from acquisitions and those new RNG facilities. So that implies, you know, somewhere around the $40 million type of range on RNG, and I'd say the margin contribution will be a function of where we really are in startup and shake down on any of those newer facilities. And to the extent to which costs have normalized. But again, early days to be getting too granular on outlook we haven't yet provided.

Well, at first, I think the answer to that is two different things. Number one, it would be different in a material way because it would not be in California. And so that will drop the scope and cost 90 to 95%. So let's just full stop with that. That's why you don't hear about these anywhere else in the country through the public companies while they're going on in real time in many locations because they're not material.

So this is material because of where it's at. Now, what did we learn through this? That would also help drive down the cost of any future. ETLF should we have them wherever they would be because we've learned things through this three plus year process that we have put in place through centralized well monitoring. You know, incremental more rapidly shade extraction incremental gas well installation as temperatures rise to a lower level. And by the way, temperatures rise at landfills for, you know, dozens and dozens of reasons that have nothing to do with an ETLF. So we've, so the reality is, is the learnings would drive down the future, but the main driver, if anyone were to happen anywhere, it would, you know, be the minimis relative to Chiquita because it wouldn't be in California.

Yeah, I mean, certainly the biggest change would be interest since we bought a billion, I spent a billion dollars on share repurchases. So our interest expense has gone up by about 40 million.

If there are no further questions on behalf of our entire management team, we appreciate your listening to an interest in the call today. Mary Ann and Joe Box are available today to answer any direct questions that we did not cover that we are allowed to answer under regulation FD, Reg G, and applicable securities laws in Canada. Thank you again, and we look forward to connecting with you at upcoming investor conferences or on our next earnings call.