Question-and-Answer Session
Operator
(Operator Instructions)Your first question comes from Dan Pickering - Tudor Pickering Holt.
Dan Pickering - Tudor Pickering Holt
Bill, I want to make sure I heard your statement correctly. Better margins in each of your divisions in the fourth quarter. Is that excluding the impact of charges or would that be kind of the fully loaded Q3 stepping into Q4?
Bill Stewart
Dan, I would be excluding those charges.
Dan Pickering - Tudor Pickering Holt
So take the charges out like you helped us with Jeff, and from that level, improvement from there? Okay and then as we look across both the U.S. and Canada, do we get back to breakeven profitability in those businesses. I guess, Jeff help us with how you’re thinking about quarter-to-quarter cost improvements in those two areas on a dollar basis?
Jeff Smith
On the Canadian front, let’s start there; on a sequential basis from Q2 to Q3, looks like about the nickel was impacting on a sequential basis, down a nickel. Our expectations, although activity has been a bit slow to recover, is that we will get that nickel back in Q4. So to answer your question on Canada is, yes, we’d expect that to get back to profitability.
On the U.S./Mexico side as Bill mentioned, pricing would appear to possibly be stabilizing. Of course that can change in a moments notice. So we’re cautiously optimistic on that front. In terms of getting back to profitability in that segment, it’s going to be difficult.
Dan Pickering - Tudor Pickering Holt
Roughly cost savings quarter-to-quarter, you think in Q3 to Q4?
Jeff Smith
Well, it’s difficult to determine, particularly as you look at some of the material cost assumptions that we have going into the plan. We recognize probably $30 million, $35 million from Q2 to Q3 and I would hope to see maybe half of that into Q4, but it’s a difficult number, because you’re chasing a number of different dynamics.
Operator
Your next question comes from Bill Herbert - Simmons & Company.
Bill Herbert - Simmons & Company
Bill and Jeff, you mentioned that we were rationalizing capacity in the U.S. Could you quantify that as a percentage of your fleet?
Bill Stewart
No, we have talked a number of times that we had about 18% of our fleet that was still old and needed replacement that has been operating in the last eight or so years. We have not been able to get that replaced because of the rapid growth in the market. With the decline that we’ve experienced, basically that equipment will be retired. So, if you want to quantify what’s not operating today compared to year or so ago, it would be about 18% of our equipment.
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