Fourth Quarter Highlights

  • Improving solid waste volumes and increasing values for recycled commodities and renewable fuels drive results above expectations
  • Revenue of $1.398 billion, net income(a) of $130.7 million, and adjusted EBITDA(b) of $426.6 million, or 30.5% of revenue
  • Net income and adjusted net income(b) of $0.50 and $0.68 per share, respectively
  • Completes additional acquisitions to bring total acquired annualized revenue for the full year to approximately $180 million

Looking at 2021

  • Expects 5.0% solid waste price plus volume growth, 50bps margin expansion, and double-digit percentage growth in adjusted free cash flow(b) 
  • Expects revenue to be approximately $5.80 billion, excluding additional acquisitions
  • Expects net income to be approximately $669 million
  • Expects adjusted EBITDA(b) to be approximately $1.80 billion, or about 31.0% of revenue 
  • Expects net cash provided by operating activities to be approximately $1.575 billion
  • Expects adjusted free cash flow(b) to be at least $950 million, or 16.4% of revenue
  • Expects double-digit percentage increase in cash dividends and share repurchases

 

TORONTO, Feb. 17, 2021 /CNW/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the fourth quarter of 2020 and outlook for 2021. 

Waste Connections logo. (PRNewsFoto/Waste Connections, Inc.) (PRNewsFoto/WASTE CONNECTIONS_ INC_)

"Q4 capped off a remarkable year for Waste Connections, culminating in a solid beat in the period and providing a higher entry point into 2021.  A more than 250 basis points higher than expected improvement in solid waste volumes and increased values for recycled commodities and renewable fuels drove adjusted EBITDA(b) margins 50 basis points above expectations for the quarter.  Moreover, we converted more than 50% of adjusted EBITDA(b) to adjusted free cash flow(b) in the year, while positioning ourselves for double-digit percentage growth in adjusted free cash flow(b) in 2021," said Worthing F. Jackman, President and Chief Executive Officer.  "Culture and values have guided our response throughout the pandemic, driving improvement in many areas in addition to financial, including safety, employee engagement, retention, and customer connectivity. We spent over $35 million in 2020 primarily directed to discretionary supplemental pay for frontline employees, and, among other initiatives, increased our minimum wage target to $15/hour, expanded benefits and provided scheduling flexibility to accommodate employee needs."

Mr. Jackman added, "2020 was also noteworthy for the pace of acquisition activity, which accelerated in the fourth quarter to drive another outsized year of activity and an incremental 2% rollover revenue growth from such acquisitions in 2021.  Acquisition dialogue remains elevated and given the strength of our balance sheet, we remain well positioned to fund additional acquisitions, while also increasing return of capital to shareholders through opportunistic share repurchases and dividend growth. With expected solid waste pricing plus volume growth of 5% and increasing recycling and renewable fuels values, 2021 is already positioned for continued growth and margin expansion, with upside from any further reopening activity, recovery in the economy, or acquisitions completed during the year."

Mr. Jackman continued, "The strength of our results in 2020 and expectations for 2021 reflect our purposeful culture and differentiated strategy; moreover, they are a testament to the tireless efforts of our dedicated essential workers.  We are extremely grateful for our employees' efforts to drive not only outsized financial performance during this challenging period but operational excellence as well, as they honor commitments to our customers, communities and each other."  

Financial Impact from COVID-19

Throughout the COVID-19 pandemic, revenue from solid waste commercial collection, transfer and disposal has largely reflected the extent to which the slowdown in activity associated with shelter-in-place or other closure restrictions or requirements in effect since Q1 of 2020 have persisted.  Q2 was the first full quarter to reflect the impacts from the COVID-19 pandemic, and activity levels in impacted lines of business have shown improvement in subsequent quarters.  Recoveries in more impacted markets, particularly those where reopenings continue to be delayed or where additional restrictions have been imposed, have generally been less pronounced.

Improving trends since Q2 include as follows:  solid waste collection, transfer and disposal revenue improved from down 5.3% in Q2 to up 0.7% year over year on a same store basis in Q4, with reported solid waste volumes improving from down 9.6% in Q2 to down 3.1% in Q4.  On a same store basis, year-over-year landfill tons, which were down approximately 10% in Q2, improved to down about 5% in Q4, and roll-off pulls improved from down approximately 11% in Q2 to down about 4% in Q4.  Additionally, service resumptions or increases in frequency in solid waste commercial collection in competitive markets we track that had previously suspended or reduced service due to the COVID-19 pandemic improved from recovery levels of 42% of such impacted revenue through Q2 to 56% at year end 2020.

Since the onset of the COVID-19 pandemic, protecting the health, welfare and safety of our employees has been our top priority.  Recognizing the potential for financial hardship and other challenges, we looked to provide a safety net for our employees on issues of income and family health.  To that end in 2020, we incurred over $35 million in incremental COVID-19-related costs, primarily supplemental pay for frontline employees, including pre-holiday "Thank you" bonuses paid out in the fourth quarter.

The impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows in future periods will depend largely on future developments, including the duration and spread of the pandemic in the U.S. and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

Q4 2020 Results

Revenue in the fourth quarter totaled $1.398 billion, up from $1.362 billion in the year ago period.  Operating income was $197.1 million, which included $24.1 million of impairments and other operating items primarily related to an adjustment to the carrying values of certain acquired long-lived assets and $5.3 million of acquisition-related costs.  This compares to operating income of $194.2 million in the fourth quarter of 2019, which included $32.7 million of costs primarily resulting from impairments and other operating items.  Net income in the fourth quarter was $130.7 million, or $0.50 per share on a diluted basis of 263.6 million shares.  In the year ago period, the Company reported net income of $133.3 million, or $0.50 per share on a diluted basis of 264.6 million shares. 

Adjusted net income(b) in the fourth quarter was $178.6 million, or $0.68 per diluted share, versus $181.4 million, or $0.69 per diluted share, in the prior year period.  Adjusted EBITDA(b) in the fourth quarter was $426.6 million, as compared to $419.0 million in the prior year period.  Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-GAAP measures, primarily exclude impairments and acquisition-related items, as reflected in the detailed reconciliations in the attached tables.

Full Year 2020 Results

For the year ended December 31, 2020, revenue was $5.446 billion, as compared to $5.389 billion in the year ago period.  Operating income, which included $482.1 million in costs primarily related to the decrease in property and equipment at certain E&P landfills as a result of the Company's impairment testing, was $412.4 million, as compared to $837.8 million in the prior year, which included $77.4 million of costs primarily resulting from impairments and other operating items.

Net income in 2020 was $204.7 million, or $0.78 per share on a diluted basis of 263.7 million shares.  In the year ago period, the Company reported net income of $566.8 million, or $2.14 per share on a diluted basis of 264.5 million shares. 

Adjusted net income(b) in 2020 was $695.8 million, or $2.64 per diluted share, compared to $719.6 million, or $2.72 per diluted share, in the year ago period. Adjusted EBITDA(b) in 2020 was $1.662 billion, as compared to $1.674 billion in the prior year period. 

2021 Outlook

Waste Connections also announced its outlook for 2021, which assumes no change in the current economic environment.  The Company's outlook excludes any impact from additional acquisitions that may close during the year, and expensing of transaction-related items.  The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Certain components of the outlook for 2021 are subject to quarterly fluctuations.  See reconciliations in the attached tables.

  • Revenue is estimated to be approximately $5.80 billion;
  • Net income is estimated to be approximately $669 million;
  • Adjusted EBITDA(b) is estimated to be approximately $1.80 billion, or about 31.0% of revenue;
  • Net cash provided by operating activities is estimated to be approximately $1.575 billion;
  • Capital expenditures are estimated to be approximately $625 million; and
  • Adjusted free cash flow(b) is estimated to be at least $950 million, or 16.4% of revenue.

Environmental, Social and Governance

Waste Connections views its Environmental, Social and Governance ("ESG") efforts as integral to its business, with initiatives consistent with its objective of long-term value creation.  In 2020, the Company introduced long-term, aspirational ESG targets and committed over $500 million for investments to meet or exceed such sustainability targets. These investments primarily focus on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety through reduced incidents and enhancing employee engagement through improved voluntary turnover and Servant Leadership scores.  For more information, visit the Waste Connections website at www.wasteconnections.com/sustainability.

Q4 2020 Earnings and 2021 Outlook Conference Call

Waste Connections will be hosting a conference call related to fourth quarter earnings and 2021 outlook on February 18th at 8:30 A.M. Eastern Time.  To access the call, listeners should dial 800-763-6049 (within North America) or 212-231-2936 (international) approximately 10 minutes prior to the scheduled start time and ask the operator for the Waste Connections conference call (a passcode is not required).  A replay of the conference call will be available until February 25, 2021 by calling 800-633-8284 (within North America) or 402-977-9140 (international) and entering Passcode #21989487.  The call will be broadcast live over the Internet through a link on the Company's website at www.wasteconnections.com.  A playback of the call will be available on the Company's website.

Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on February 18th, providing the Company's first quarter 2021 outlook for revenue, core price plus volume growth for solid waste, and adjusted EBITDA(b).

(a)

All references to "Net income" refer to the financial statement line item "Net income attributable to Waste Connections"

(b)

A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule

About Waste Connections

Waste Connections is an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, along with resource recovery primarily through recycling and renewable fuels generation.  The Company serves more than seven million residential, commercial and industrial customers in mostly exclusive and secondary markets across 43 states in the U.S. and six provinces in Canada.  Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.  For more information, visit Waste Connections at www.wasteconnections.com.  

Safe Harbor and Forward-Looking Information

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), including "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections' current beliefs and expectations regarding future events and operating performance. These forward-looking statements are often identified by the words "may," "might," "believes," "thinks," "expects," "estimate," "continue," "intends" or other words of similar meaning. All of the forward-looking statements included in this press release are made pursuant to the safe harbor provisions of the PSLRA and applicable securities laws in Canada. Forward-looking statements involve risks and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements about expected 2021 financial results, outlook and related assumptions, potential growth and margin expansion, potential acquisition activity and return of capital to shareholders. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, risk factors detailed from time to time in the Company's filings with the SEC and the securities commissions or similar regulatory authorities in Canada.  You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.  Waste Connections undertakes no obligation to update the forward-looking statements set forth in this press release, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.

– financial tables attached –

CONTACT:                                                             




Mary Anne Whitney / (832) 442-2253                     

Joe Box / (832) 442-2153

maryannew@wasteconnections.com                      

joe.box@wasteconnections.com                                                    

 

 

WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2019 AND 2020
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)

















Three months ended

December 31,


Twelve months ended

December 31,




2019


2020


2019


2020












Revenues


$

1,361,960


$

1,398,251


$

5,388,679


$

5,445,990


Operating expenses:














Cost of operations



814,151



846,851



3,198,757



3,276,808


Selling, general and administrative



136,146



133,419



546,278



537,632


Depreciation



156,779



161,462



618,396



621,102


Amortization of intangibles



31,701



35,239



125,522



131,302


Impairments and other operating items



28,999



24,136



61,948



466,718


Operating income



194,184



197,144



837,778



412,428
















Interest expense



(36,056)



(42,813)



(147,368)



(162,375)


Interest income



2,592



857



9,777



5,253


Other income (expense), net



1,142



1,654



5,704



(1,392)


Income before income tax provision



161,862



156,842



705,891



253,914
















Income tax provision



(28,671)



(26,268)



(139,210)



(49,922)


Net income



133,191



130,574



566,681



203,992


Plus: Net loss attributable to noncontrolling interests



71



90



160



685


Net income attributable to Waste Connections


$

133,262


$

130,664


$

566,841


$

204,677
















Earnings per common share attributable to Waste
Connections' common shareholders:














Basic


$

0.51


$

0.50


$

2.15


$

0.78
















Diluted


$

0.50


$

0.50


$

2.14


$

0.78
















Shares used in the per share calculations:














Basic



263,865,203



263,001,985



263,792,693



263,189,699


Diluted



264,636,883



263,598,602



264,526,561



263,687,539






























Cash dividends per common share


$

0.185


$

0.205


$

0.665


$

0.760


 

WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)











December 31,

2019


December 31,

2020


ASSETS








Current assets:








Cash and equivalents


$

326,738


$

617,294


Accounts receivable, net of allowance for credit losses of $16,432 and $19,380 at
December 31, 2019 and 2020, respectively



662,808



630,264


Prepaid expenses and other current assets



141,052



160,714


Total current assets



1,130,598



1,408,272


Restricted cash



96,483



97,095


Restricted investments



51,179



57,516


Property and equipment, net



5,516,347



5,284,506


Operating lease right-of-use assets



183,220



170,923


Goodwill



5,510,851



5,726,650


Intangible assets, net



1,163,063



1,155,079


Other assets, net



85,954



92,323


Total assets


$

13,737,695


$

13,992,364


LIABILITIES AND EQUITY








Current liabilities:








Accounts payable


$

436,970


$

290,820


Book overdraft



15,954



17,079


Accrued liabilities



280,808



404,923


Current portion of operating lease liabilities



29,929



30,671


Current portion of contingent consideration



26,659



43,297


Deferred revenue



216,443



233,596


Current portion of long-term debt and notes payable



465



8,268


Total current liabilities



1,007,228



1,028,654










Long-term portion of debt and notes payable



4,353,782



4,708,678


Long-term portion of operating lease liabilities



160,033



147,223


Long-term portion of contingent consideration



42,825



28,439


Deferred income taxes



818,622



760,044


Other long-term liabilities



416,851



455,888


Total liabilities



6,799,341



7,128,926


Commitments and contingencies








Equity:








Common shares: 263,699,675 shares issued and 263,618,161 shares outstanding
at December 31, 2019; 262,899,174 shares issued and 262,824,990 shares outstanding at
December 31, 2020



4,135,343



4,030,368


Additional paid-in capital



154,917



170,555


Accumulated other comprehensive loss



(10,963)



(651)


Treasury shares: 81,514 and 74,184 shares at December 31, 2019 and 2020, respectively



-



-


Retained earnings



2,654,207



2,659,001


Total Waste Connections' equity



6,933,504



6,859,273


Noncontrolling interest in subsidiaries



4,850



4,165


Total equity



6,938,354



6,863,438




$

13,737,695


$

13,992,364


 

WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2019 AND 2020
(Unaudited)
(in thousands of U.S. dollars)











Twelve months ended December 31,




2019


2020


Cash flows from operating activities:








Net income


$

566,681


$

203,992


Adjustments to reconcile net income to net cash provided by operating activities:








Loss on disposal of assets and impairments



60,592



445,647


Depreciation



618,396



621,102


Amortization of intangibles



125,522



131,302


Deferred income taxes, net of acquisitions



54,637



(50,487)


Amortization of debt issuance costs



5,001



7,509


Share-based compensation



42,671



45,751


Interest accretion



16,426



17,205


Payment of contingent consideration recorded in earnings



-



(10,371)


Adjustments to contingent consideration



1,498



18,418


Other



(2,240)



2,426


Net change in operating assets and liabilities, net of acquisitions



51,363



(23,973)


Net cash provided by operating activities



1,540,547



1,408,521










Cash flows from investing activities:








Payments for acquisitions, net of cash acquired



(736,610)



(388,789)


Capital expenditures for property and equipment



(634,406)



(597,053)


Capital expenditure for undeveloped landfill property



(31,683)



(67,508)


Investment in noncontrolling interest



(25,000)



-


Proceeds from disposal of assets



3,566



19,084


Other



(1,873)



(11,777)


Net cash used in investing activities



(1,426,006)



(1,046,043)










Cash flows from financing activities:








Proceeds from long-term debt



1,575,795



1,815,625


Principal payments on notes payable and long-term debt



(1,470,711)



(1,542,958)


Payment of contingent consideration recorded at acquisition date



(3,200)



(12,566)


Change in book overdraft



(2,564)



1,096


Payments for repurchase of common shares



-



(105,654)


Payments for cash dividends



(175,067)



(199,883)


Tax withholdings related to net share settlements of equity-based compensation



(17,660)



(23,446)


Debt issuance costs



(5,953)



(11,117)


Proceeds from sale of common shares held in trust



4,036



679


Distributions to noncontrolling interests



(570)



-


Net cash used in financing activities



(95,894)



(78,224)


Effect of exchange rate changes on cash, cash equivalents and restricted cash



608



6,914


Net increase in cash, cash equivalents and restricted cash



19,255



291,168


Cash, cash equivalents and restricted cash at beginning of year



403,966



423,221


Cash, cash equivalents and restricted cash at end of year


$

423,221


$

714,389


 

ADDITIONAL STATISTICS
(in thousands of U.S. dollars, except where noted)


Solid Waste Internal Growth:  The following table reflects a breakdown of the components of our solid waste internal growth for
the three months ended December 31, 2020:













U.S.



Canada



Total


Core Price


4.1% 



5.3% 



4.3% 


Surcharges


(0.4%) 



(1.0%) 



(0.5%) 


Volume


(2.9%) 



(4.5%) 



(3.1%) 


Recycling


0.5% 



1.0% 



0.5% 


Foreign Exchange Impact




1.3% 



0.2% 


Total


1.3% 



2.1% 



1.4% 


 

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended December 31,
2019 and 2020:















 Three months ended December 31, 2019



Revenue


Inter-
company

Elimination


Reported

Revenue


%

Solid Waste Collection


$

974,886


$

(2,499)


$

972,387


71.4%

Solid Waste Disposal and Transfer



476,840



(193,474)



283,366


20.8%

Solid Waste Recycling



13,569



(365)



13,204


1.0%

E&P Waste Treatment, Recovery and Disposal



66,144



(3,661)



62,483


4.6%

Intermodal and Other



30,646



(126)



30,520


2.2%

Total


$

1,562,085


$

(200,125)


$

1,361,960


100.0%

 















Three months ended December 31, 2020



Revenue


Inter-
company

Elimination


Reported

Revenue


%

Solid Waste Collection


$

1,024,099


$

(3,341)


$

1,020,758


73.0%

Solid Waste Disposal and Transfer



493,093



(200,272)



292,821


20.9%

Solid Waste Recycling



26,688



(909)



25,779


1.9%

E&P Waste Treatment, Recovery and Disposal



27,690



(2,163)



25,527


1.8%

Intermodal and Other



33,427



(61)



33,366


2.4%

Total


$

1,604,997


$

(206,746)


$

1,398,251


100.0%

 

Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three and
twelve month periods ended December 31, 2019 and 2020:
















Three months ended

December 31,


Twelve months ended

December 31,



2019


2020


2019


2020

Acquisitions, net


$

68,465


$

52,721


$

291,938


$

197,231














 

ADDITIONAL STATISTICS (continued)
(in thousands of U.S. dollars, except where noted)


Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three and twelve month periods ended
December 31, 2019 and 2020:
















Three months ended

December 31,


Twelve months ended

December 31,



2019


2020


2019


2020

Cash Interest Paid


$

54,078


$

55,910


$

139,694


$

142,310

Cash Taxes Paid



39,089



43,603



81,049



104,618


Debt to Book Capitalization as of December 31, 2020:  41%


Internalization for the three months ended December 31, 2020:  55%


Days Sales Outstanding for the three months ended December 31, 2020:  41 (26 net of deferred revenue)


Share Information for the three months ended December 31, 2020:




Basic shares outstanding


263,001,985

Dilutive effect of equity-based awards 


596,617

Diluted shares outstanding


263,598,602

 

NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)

Reconciliation of Adjusted EBITDA:

Adjusted EBITDA, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry.  Management uses adjusted EBITDA as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations.  Waste Connections defines adjusted EBITDA as net income attributable to Waste Connections, plus or minus net income (loss) attributable to noncontrolling interests, plus income tax provision, plus interest expense, less interest income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on impairments and other operating items, plus other expense, less other income.  Waste Connections further adjusts this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of its business.  This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures.  Other companies may calculate adjusted EBITDA differently. 
















Three months ended

December 31,


Twelve months ended

December 31,



2019


2020


2019


2020

Net income attributable to Waste Connections


$

133,262


$

130,664


$

566,841


$

204,677

Less: Net loss attributable to noncontrolling interests



(71)



(91)



(160)



(685)

Plus: Income tax provision



28,671



26,269



139,210



49,922

Plus: Interest expense



36,056



42,813



147,368



162,375

Less: Interest income



(2,592)



(857)



(9,777)



(5,253)

Plus: Depreciation and amortization



188,480



196,701



743,918



752,404

Plus: Closure and post-closure accretion



3,649



3,755



14,471



15,095

Plus: Impairments and other operating items



28,999



24,136



61,948



466,718

Plus/(Less): Other expense (income), net



(1,142)



(1,654)



(5,704)



1,392

Adjustments:













Plus: Transaction-related expenses(a)



4,278



5,306



12,335



9,803

Plus (Less): Fair value changes to equity awards(b)



(589)



(485)



3,104



5,536

Adjusted EBITDA


$

419,001


$

426,557


$

1,673,554


$

1,661,984














As % of revenues



30.8%



30.5%



31.1%



30.5%

____________________________

(a) 

Reflects the addback of acquisition-related transaction costs.

(b)

Reflects fair value accounting changes associated with certain equity awards.

 

NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of U.S. dollars, except where noted)

Reconciliation of Adjusted Free Cash Flow:

Adjusted free cash flow, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry.  Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations.  Waste Connections defines adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment and distributions to noncontrolling interests.  Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of its business.  This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures.  Other companies may calculate adjusted free cash flow differently. 










Twelve months ended

December 31,



2019


2020

Net cash provided by operating activities


$

1,540,547


$

1,408,521

Plus/(Less): Change in book overdraft



(2,564)



1,096

Plus: Proceeds from disposal of assets



3,566



19,084

Less: Capital expenditures for property and equipment



(634,406)



(597,053)

Less: Distributions to noncontrolling interests



(570)



-

Adjustments:







Payment of contingent consideration recorded in earnings(a)



-



10,371

Cash received for divestitures(b)



(2,376)



(10,673)

Transaction-related expenses(c)



12,335



9,803

Pre-existing Progressive Waste share-based grants(d)



4,810



5,770

Tax effect(e)



(4,565)



(5,021)

Adjusted free cash flow


$

916,777


$

841,898








As % of revenues



17.0%



15.5%

____________________________

(a) 

Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of
cash flows from operating activities as the amounts paid exceeded the fair value of the contingent consideration recorded at the acquisition date.

(b) 

Reflects the elimination of cash received in conjunction with the divestiture of certain operations.

(c)

Reflects the addback of acquisition-related transaction costs.

(d) 

Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.

(e) 

The aggregate tax effect of footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods.

 

NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of U.S. dollars, except per share amounts)

Reconciliation of Adjusted Net Income attributable to Waste Connections and Adjusted Net Income per Diluted Share attributable to Waste Connections:

Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as a valuation measure in the solid waste industry.  Management uses adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations.  Waste Connections provides adjusted net income attributable to Waste Connections to exclude the effects of items management believes impact the comparability of operating results between periods.  Adjusted net income attributable to Waste Connections has limitations due to the fact that it excludes items that have an impact on the Company's financial condition and results of operations.  Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections are not a substitute for, and should be used in conjunction with, GAAP financial measures.  Other companies may calculate these non-GAAP financial measures differently. 
















Three months ended

December 31,


Twelve months ended

December 31,



2019


2020


2019


2020

Reported net income attributable to Waste Connections


$

133,262


$

130,664


$

566,841


$

204,677

Adjustments:













Amortization of intangibles(a)



31,701



35,239



125,522



131,302

Impairments and other operating items(b)



28,999



24,136



61,948



466,718

Transaction-related expenses(c) 



4,278



5,306



12,335



9,803

Fair value changes to equity awards(d)



(589)



(485)



3,104



5,536

Tax effect(e)



(16,234)



(16,235)



(50,189)



(153,758)

Tax items(f)



-



-



-



31,508

Adjusted net income attributable to Waste Connections


$

181,417


$

178,625


$

719,561


$

695,786

Diluted earnings per common share attributable to Waste
Connections' common shareholders:













Reported net income


$

0.50


$

0.50


$

2.14


$

0.78

Adjusted net income


$

0.69


$

0.68


$

2.72


$

2.64

____________________________

(a)

Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.

(b)

Reflects the addback of impairments and other operating items.

(c)

Reflects the addback of acquisition-related transaction costs.

(d) 

Reflects fair value accounting changes associated with certain equity awards.

(e)

The aggregate tax effect of the adjustments in footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods.

(f) 

Reflects the impact of a portion of the Company's 2019 inter-entity payments no longer being deductible for tax purposes due to the finalization of
tax regulations on April 7, 2020 under Internal Revenue Code 267A and an increase in deferred tax liabilities resulting from the E&P impairment.

 

2021 OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)


Reconciliation of Adjusted EBITDA:










2021 Outlook




Estimates


Observation

Net income attributable to Waste Connections


$

669,000



    Plus: Income tax provision



167,400


Approximate 20.0% effective rate

    Plus: Interest expense, net



162,000



    Plus: Depreciation and Depletion



660,000


Approximately 11.3% of revenue

    Plus: Amortization



126,600



    Plus: Closure and post-closure accretion



15,000



Adjusted EBITDA


$

1,800,000


Approximately 31.0% of revenue

 

Reconciliation of Adjusted Free Cash Flow:





2021 Outlook


Estimates

Net cash provided by operating activities

$

1,575,000

    Less: Capital expenditures


(625,000)

Adjusted free cash flow

$

950,000

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/waste-connections-reports-fourth-quarter-results-and-provides-2021-outlook-301230328.html

SOURCE Waste Connections, Inc.

Copyright 2021 Canada NewsWire

Waste Connections (TSX:WCN)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Waste Connections Charts.
Waste Connections (TSX:WCN)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Waste Connections Charts.