- Strong solid waste pricing growth, accelerating solid
waste volumes and increased resource recovery values drive better
than expected Q1 results, an expected 10% solid waste price plus
volume growth in Q2, and improving outlook for 2021
- Revenue of $1.396
billion, exceeding outlook
- Net income(a) of $160.3 million, and adjusted EBITDA(b)
of $433.2 million, or 31.0% of
revenue, exceeding outlook and up 80 basis points year over
year
- Net income and adjusted net
income(b) of $0.61
and $0.70 per share,
respectively
- Net cash provided by operating activities of
$400.4 million and adjusted free cash
flow(b) of $289.8
million, or 20.8% of revenue and up 22.9% year over
year
TORONTO, April 28, 2021 /PRNewswire/ -- Waste
Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the
"Company") today announced its results for the first quarter of
2021.
"We are extremely pleased by the increasing momentum throughout
the first quarter, with high flow through from returning solid
waste volumes and increased resource recovery values setting up for
outsized performance in 2021. These tailwinds, bolstered by
strong solid waste pricing retention, drove adjusted
EBITDA(b) margin 70 basis points higher than expected in
the period. Adjusted EBITDA(b) margin in Q1 was 31.0%,
up 80 basis points year over year, driven primarily by an estimated
110 basis points margin expansion in underlying solid waste
collection, transfer and disposal, with another 100 basis points
from higher recovered commodity values. Adjusted free cash
flow(b) was $289.8
million, or 20.8% of revenue in the period, positioning us
to comfortably exceed our minimum outlook of $950 million for the full year," said
Worthing F. Jackman, President and
Chief Executive Officer. "Solid waste activity further
accelerated as we exited the first quarter, positioning us for an
expected double-digit solid waste price plus volume growth in the
second quarter."
Mr. Jackman added, "We knew that our differentiated response to
the COVID-19 pandemic would leave us well-positioned as local
economies reopened, and we are encouraged by improving macro trends
and our strong operating and financial performance as we
anniversary the onset of the pandemic. COVID-19-related
impacts to our business continue to abate, but most importantly,
our commitment to and support of our employees and their families
are unwavering."
Mr. Jackman continued, "We are also encouraged by the cadence of
acquisition dialogue and the high quality of potential
opportunities, both of which suggest the potential for another
outsized year of such activity, for which we are
well-positioned. Our balance sheet strength also provides the
flexibility for further increasing return of capital to
shareholders."
Financial Impact from COVID-19
March 11, 2021 marked the one year
anniversary of COVID-19 being declared a global pandemic by the
World Health Organization. The related economic disruptions
largely associated with closures or restrictions put into effect
following the onset of the COVID-19 pandemic resulted in declines
in solid waste commercial collection, transfer station and landfill
volumes, and roll off activity. Throughout the remaining
fiscal year 2020, solid waste revenue and reported volumes largely
reflected the pace and shape of the closures and subsequent
reopening activity, with the timing and magnitude of recovery
varying by market. Reported solid waste volumes in 2020
turned slightly negative in Q1, were most negative in Q2, and
showed sequential improvement during the second half of the year,
finishing the year at negative 3.1% in Q4. In Q1 2021, the
final period to include comparisons to pre-COVID-19 activity levels
on a year over year basis, solid waste volumes were down 3.2%,
reflecting the strong start to 2020 prior to the onset of the
pandemic, compounded by the impact of an extra day in the quarter
in 2020 due to leap year, as well as extreme winter weather in many
markets during February 2021. Solid waste volumes increased
2.6% in March 2021 compared to March
2020.
The COVID-19 pandemic also contributed to the decline in demand
for and the value of crude oil, which impacted E&P drilling
activity and resulted in lower E&P waste revenue, with the
quarterly run rate decreasing from approximately $60 million in Q1 2020 to approximately
$25 million by the second half of
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. As we continue to support our
employees and their families, such costs are expected to continue
in 2021, albeit to a lesser extent than in the prior year, as
employee COVID-19 cases and related impacts are similarly
abating.
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 outbreak in the U.S. and Canada, the rate of vaccinations, the severity
of COVID-19 variants, the actions to contain such coronavirus
variants, and how quickly and to what extent normal economic and
operating conditions can resume.
Q1 2021 Results
Revenue in the first quarter totaled $1.396 billion, up from $1.352 billion in the year ago period.
Operating income was $238.4 million,
which included $0.9 million in
acquisition-related costs and $0.6
million in impairments and other operating items. This
compares to operating income of $217.0
million in the first quarter of 2020, which included
$3.7 million in acquisition-related
costs and $1.5 million of impairments
and other operating items. Net income in the first quarter
was $160.3 million, or $0.61 per share on a diluted basis of 263.2
million shares. In the year ago period, the Company reported
net income of $143.0 million, or
$0.54 per share on a diluted basis of
264.4 million shares.
Adjusted net income(b) in the first quarter was
$185.5 million, or $0.70 per diluted share, versus $170.6 million, or $0.65 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the first quarter
was $433.2 million, as compared to
$408.5 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.
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
wasteconnections.com/sustainability.
Q1 2021 Earnings Conference Call
Waste Connections will be hosting a conference call related to
first quarter earnings on April
29th at 8:30 A.M. Eastern
Time. A live audio webcast of the conference call can
be accessed by visiting investors.wasteconnections.com and
selecting "News & Events" from the website menu. Alternatively,
listeners may access the call by dialing 877-221-2749 (within
North America) or 212-231-2932
(international) approximately 10 minutes prior to the scheduled
start time; a passcode is not required. A replay of the
conference call will be available until May
6, 2021, by calling 800-633-8284 (within North America) or 402-977-9140 (international)
and entering Passcode #21993134.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
April 29th, providing the
Company's second 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 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 MONTHS ENDED
MARCH 31, 2020 AND 2021
|
(Unaudited)
|
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
Three months ended
March 31,
|
|
|
2020
|
|
2021
|
|
|
|
|
|
Revenues
|
|
$
|
1,352,404
|
|
$
|
1,395,942
|
Operating
expenses:
|
|
|
|
|
|
|
Cost of
operations
|
|
|
815,424
|
|
|
825,920
|
Selling, general and
administrative
|
|
|
136,052
|
|
|
141,422
|
Depreciation
|
|
|
150,821
|
|
|
157,402
|
Amortization of
intangibles
|
|
|
31,638
|
|
|
32,192
|
Impairments and other
operating items
|
|
|
1,506
|
|
|
634
|
Operating
income
|
|
|
216,963
|
|
|
238,372
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(37,990)
|
|
|
(42,425)
|
Interest
income
|
|
|
2,175
|
|
|
1,103
|
Other income
(expense), net
|
|
|
(9,521)
|
|
|
3,548
|
Income before income
tax provision
|
|
|
171,627
|
|
|
200,598
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(28,734)
|
|
|
(40,291)
|
Net income
|
|
|
142,893
|
|
|
160,307
|
Plus: Net loss
attributable to noncontrolling interests
|
|
|
142
|
|
|
2
|
Net income
attributable to Waste Connections
|
|
$
|
143,035
|
|
$
|
160,309
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections'
common shareholders:
|
|
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
$
|
0.61
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.54
|
|
$
|
0.61
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
Basic
|
|
|
263,790,364
|
|
|
262,697,487
|
Diluted
|
|
|
264,353,158
|
|
|
263,156,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.185
|
|
$
|
0.205
|
WASTE CONNECTIONS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
December 31,
2020
|
|
March 31,
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
617,294
|
|
$
|
743,464
|
|
Accounts receivable,
net of allowance for credit losses of $19,380 and $18,970
at
December 31, 2020 and March 31,
2021, respectively
|
|
|
630,264
|
|
|
608,758
|
|
Prepaid expenses and
other current assets
|
|
|
160,714
|
|
|
151,769
|
|
Total current
assets
|
|
|
1,408,272
|
|
|
1,503,991
|
|
Restricted
cash
|
|
|
97,095
|
|
|
105,689
|
|
Restricted
investments
|
|
|
57,516
|
|
|
56,620
|
|
Property and
equipment, net
|
|
|
5,284,506
|
|
|
5,232,682
|
|
Operating lease
right-of-use assets
|
|
|
170,923
|
|
|
174,635
|
|
Goodwill
|
|
|
5,726,650
|
|
|
5,754,101
|
|
Intangible assets,
net
|
|
|
1,155,079
|
|
|
1,125,894
|
|
Other assets,
net
|
|
|
92,323
|
|
|
89,317
|
|
Total
assets
|
|
$
|
13,992,364
|
|
$
|
14,042,929
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
290,820
|
|
$
|
280,025
|
|
Book
overdraft
|
|
|
17,079
|
|
|
234
|
|
Deferred
revenue
|
|
|
233,596
|
|
|
243,712
|
|
Accrued
liabilities
|
|
|
404,923
|
|
|
399,470
|
|
Current portion of
operating lease liabilities
|
|
|
30,671
|
|
|
35,699
|
|
Current portion of
contingent consideration
|
|
|
43,297
|
|
|
42,360
|
|
Current portion of
long-term debt and notes payable
|
|
|
8,268
|
|
|
105,386
|
|
Total current
liabilities
|
|
|
1,028,654
|
|
|
1,106,886
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
4,708,678
|
|
|
4,613,602
|
|
Long-term portion of
operating lease liabilities
|
|
|
147,223
|
|
|
146,018
|
|
Long-term portion of
contingent consideration
|
|
|
28,439
|
|
|
24,618
|
|
Deferred income
taxes
|
|
|
760,044
|
|
|
776,498
|
|
Other long-term
liabilities
|
|
|
455,888
|
|
|
433,434
|
|
Total
liabilities
|
|
|
7,128,926
|
|
|
7,101,056
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
262,899,174 shares issued and 262,824,990 shares outstanding
at
December 31, 2020; 262,564,371
shares issued and 262,491,505 shares outstanding at
March 31, 2021
|
|
|
4,030,368
|
|
|
3,964,500
|
|
Additional paid-in
capital
|
|
|
170,555
|
|
|
161,638
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(651)
|
|
|
46,171
|
|
Treasury shares:
74,184 and 72,866 shares at December 31, 2020 and March 31,
2021,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
2,659,001
|
|
|
2,765,401
|
|
Total Waste
Connections' equity
|
|
|
6,859,273
|
|
|
6,937,710
|
|
Noncontrolling
interest in subsidiaries
|
|
|
4,165
|
|
|
4,163
|
|
Total
equity
|
|
|
6,863,438
|
|
|
6,941,873
|
|
|
|
$
|
13,992,364
|
|
$
|
14,042,929
|
|
WASTE CONNECTIONS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
THREE MONTHS ENDED
MARCH 31, 2020 AND 2021
|
(Unaudited)
|
(in thousands of U.S.
dollars)
|
|
|
|
Three months ended March 31,
|
|
|
|
2020
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
142,893
|
|
$
|
160,307
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
135
|
|
|
401
|
|
Depreciation
|
|
|
150,821
|
|
|
157,402
|
|
Amortization of
intangibles
|
|
|
31,638
|
|
|
32,192
|
|
Deferred income taxes,
net of acquisitions
|
|
|
23,259
|
|
|
8,379
|
|
Amortization of debt
issuance costs
|
|
|
3,420
|
|
|
1,359
|
|
Share-based
compensation
|
|
|
13,046
|
|
|
10,307
|
|
Interest
accretion
|
|
|
4,352
|
|
|
4,204
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
-
|
|
|
(520)
|
|
Adjustments to
contingent consideration
|
|
|
-
|
|
|
89
|
|
Other
|
|
|
2,308
|
|
|
(796)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
(2,286)
|
|
|
27,072
|
|
Net cash provided by
operating activities
|
|
|
369,586
|
|
|
400,396
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(5,943)
|
|
|
(8,545)
|
|
Capital expenditures
for property and equipment
|
|
|
(137,781)
|
|
|
(96,793)
|
|
Proceeds from disposal
of assets
|
|
|
3,499
|
|
|
2,080
|
|
Other
|
|
|
6,599
|
|
|
2,705
|
|
Net cash used in
investing activities
|
|
|
(133,626)
|
|
|
(100,553)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
1,790,625
|
|
|
-
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(970,393)
|
|
|
(5,559)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(1,976)
|
|
|
(4,807)
|
|
Change in book
overdraft
|
|
|
(3,848)
|
|
|
(16,849)
|
|
Payments for
repurchase of common shares
|
|
|
(105,654)
|
|
|
(65,999)
|
|
Payments for cash
dividends
|
|
|
(48,018)
|
|
|
(53,909)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(23,090)
|
|
|
(18,490)
|
|
Debt issuance
costs
|
|
|
(10,936)
|
|
|
-
|
|
Proceeds from sale of
common shares held in trust
|
|
|
679
|
|
|
131
|
|
Net cash provided by
(used in) financing activities
|
|
|
627,389
|
|
|
(165,482)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
(2,364)
|
|
|
403
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
860,985
|
|
|
134,764
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
|
423,221
|
|
|
714,389
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
1,284,206
|
|
$
|
849,153
|
|
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 March 31,
2021:
|
|
U.S.
|
|
Canada
|
|
Total
|
Core Price
|
|
4.1
|
%
|
|
6.5
|
%
|
|
4.5
|
%
|
Surcharges
|
|
(0.2)
|
%
|
|
(0.7)
|
%
|
|
(0.3)
|
%
|
Volume
|
|
(2.8)
|
%
|
|
(5.9)
|
%
|
|
(3.2)
|
%
|
Recycling
|
|
0.8
|
%
|
|
1.3
|
%
|
|
0.9
|
%
|
Foreign Exchange
Impact
|
|
-
|
|
|
6.0
|
%
|
|
0.7
|
%
|
Total
|
|
1.9
|
%
|
|
7.2
|
%
|
|
2.6
|
%
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
March 31, 2020 and 2021:
|
|
Three months ended March 31,
2020
|
|
|
Revenue
|
|
Inter-
company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
989,009
|
|
$
|
(3,404)
|
|
$
|
985,605
|
|
72.9%
|
Solid Waste Disposal
and Transfer
|
|
|
446,983
|
|
|
(187,066)
|
|
|
259,917
|
|
19.2%
|
Solid Waste
Recycling
|
|
|
18,108
|
|
|
(552)
|
|
|
17,556
|
|
1.3%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
65,377
|
|
|
(6,027)
|
|
|
59,350
|
|
4.4%
|
Intermodal and
Other
|
|
|
30,018
|
|
|
(42)
|
|
|
29,976
|
|
2.2%
|
Total
|
|
$
|
1,549,495
|
|
$
|
(197,091)
|
|
$
|
1,352,404
|
|
100.0%
|
|
|
|
|
Three months
ended March 31, 2021
|
|
|
Revenue
|
|
Inter-
company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,036,472
|
|
$
|
(3,045)
|
|
$
|
1,033,427
|
|
74.0%
|
Solid Waste Disposal
and Transfer
|
|
|
461,259
|
|
|
(190,446)
|
|
|
270,813
|
|
19.4%
|
Solid Waste
Recycling
|
|
|
32,448
|
|
|
(993)
|
|
|
31,455
|
|
2.3%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
28,012
|
|
|
(3,343)
|
|
|
24,669
|
|
1.8%
|
Intermodal and
Other
|
|
|
35,634
|
|
|
(56)
|
|
|
35,578
|
|
2.5%
|
Total
|
|
$
|
1,593,825
|
|
$
|
(197,883)
|
|
$
|
1,395,942
|
|
100.0%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three month periods ended March 31,
2020 and 2021:
|
|
Three months
ended
March 31,
|
|
|
2020
|
|
2021
|
Acquisitions,
net
|
|
$
|
59,568
|
|
$
|
40,542
|
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 month periods ended
March 31, 2020 and 2021:
|
|
Three months
ended
March 31,
|
|
|
2020
|
|
2021
|
Cash Interest
Paid
|
|
$
|
17,046
|
|
$
|
25,446
|
Cash Taxes
Paid
|
|
|
4,610
|
|
|
28,621
|
Debt to Book Capitalization as of March 31, 2021: 40%
Internalization for the three months ended
March 31, 2021: 56%
Days Sales Outstanding for the three months ended
March 31, 2021: 39 (24 net
of deferred revenue)
Share Information for the three months ended March 31, 2021:
Basic shares
outstanding
|
|
262,697,487
|
Dilutive effect of
equity-based awards
|
|
459,168
|
Diluted shares
outstanding
|
|
263,156,655
|
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
March 31,
|
|
|
2020
|
|
2021
|
Net income
attributable to Waste Connections
|
|
$
|
143,035
|
|
$
|
160,309
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(142)
|
|
|
(2)
|
Plus: Income tax
provision
|
|
|
28,734
|
|
|
40,291
|
Plus: Interest
expense
|
|
|
37,990
|
|
|
42,425
|
Less: Interest
income
|
|
|
(2,175)
|
|
|
(1,103)
|
Plus: Depreciation
and amortization
|
|
|
182,459
|
|
|
189,594
|
Plus: Closure and
post-closure accretion
|
|
|
3,908
|
|
|
3,709
|
Plus: Impairments and
other operating items
|
|
|
1,506
|
|
|
634
|
Plus/(Less): Other
expense (income), net
|
|
|
9,521
|
|
|
(3,548)
|
Adjustments:
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
1,146
|
|
|
526
|
Plus: Fair value
changes to equity awards(b)
|
|
|
2,541
|
|
|
339
|
Adjusted
EBITDA
|
|
$
|
408,523
|
|
$
|
433,174
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.2%
|
|
|
31.0%
|
____________________________
|
(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.
|
|
Three months
ended
March 31,
|
|
|
|
2020
|
|
2021
|
|
Net cash provided by
operating activities
|
|
$
|
369,586
|
|
$
|
400,396
|
|
Less: Change in book
overdraft
|
|
|
(3,848)
|
|
|
(16,849)
|
|
Plus: Proceeds from
disposal of assets
|
|
|
3,499
|
|
|
2,080
|
|
Less: Capital
expenditures for property and equipment
|
|
|
(137,781)
|
|
|
(96,793)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Payment
of contingent consideration recorded in
earnings(a)
|
|
|
-
|
|
|
520
|
|
Transaction-related
expenses(b)
|
|
|
1,146
|
|
|
526
|
|
Pre-existing
Progressive Waste share-based grants(c)
|
|
|
6,440
|
|
|
97
|
|
Tax
effect(d)
|
|
|
(3,318)
|
|
|
(188)
|
|
Adjusted free cash
flow
|
|
$
|
235,724
|
|
$
|
289,789
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
17.4%
|
|
|
20.8%
|
|
____________________________
|
(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 addback
of acquisition-related transaction costs.
|
(c)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(d)
|
The aggregate tax
effect of footnotes (a) through (c) 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
March 31,
|
|
|
2020
|
|
2021
|
Reported net income
attributable to Waste Connections
|
|
$
|
143,035
|
|
$
|
160,309
|
Adjustments:
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
31,638
|
|
|
32,192
|
Impairments and other
operating items(b)
|
|
|
1,506
|
|
|
634
|
Transaction-related
expenses(c)
|
|
|
1,146
|
|
|
526
|
Fair value changes to
equity awards(d)
|
|
|
2,541
|
|
|
339
|
Tax
effect(e)
|
|
|
(9,304)
|
|
|
(8,543)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
170,562
|
|
$
|
185,457
|
Diluted earnings per
common share attributable to Waste
Connections' common
shareholders:
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.54
|
|
$
|
0.61
|
Adjusted net
income
|
|
$
|
0.65
|
|
$
|
0.70
|
____________________________
|
(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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/waste-connections-reports-first-quarter-2021-results-301279469.html
SOURCE Waste Connections, Inc.