Fourth Quarter 2019 Highlights
- Revenue of
$1.362 billion, up 7.9%
- Net income attributable to Waste Connections of
$133.3 million, or $0.50 per share
- Adjusted net
income attributable to Waste Connections* of $181.4 million, or $0.69 per share
- Adjusted EBITDA* of $419.0
million, or 30.8% of revenue
Full-Year 2019 Highlights
- Revenue of
$5.389 billion, up 9.5%
- Net income attributable to Waste Connections of
$566.8 million, or $2.14 per share
- Adjusted net
income attributable to Waste Connections* of $719.6 million or $2.72 per share
- Adjusted
EBITDA* of $1.674 billion, or 31.1%
of revenue, up 6.8%
- Net cash provided by
operating activities of $1.541
billion, up 9.2%
- Adjusted free cash flow* of $916.8 million, or 17.0% of
revenue
- Completes acquisitions with approximately
$300 million of total annualized
revenue
Looking at 2020
- Expects revenue in the
range of $5.725 billion to
$5.775 billion, excluding additional
acquisitions
- Expects net income attributable to Waste Connections in
the range of $653.0 million to
$668.0 million
-
Expects adjusted EBITDA* in the range of $1.760 billion to $1.785
billion
- Expects net cash provided by operating activities in the
range of $1.600 billion to
$1.625 billion
-
Expects adjusted free cash flow* in the range of $975.0 million to $1.0
billion
TORONTO, Feb. 12, 2020 /CNW/ -- Waste Connections,
Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today
announced its results for the fourth quarter of 2019.
"2019 ended on a high note, as financial results for the fourth
quarter exceeded expectations on better than expected solid waste
price growth, E&P waste activity and acquisition
contribution. We are also extremely pleased with our results
for the full year, as underlying adjusted EBITDA* margins in solid
waste collection, transfer and disposal expanded by 50 basis
points. Moreover, our ability to deliver full year adjusted
free cash flow* of $916.8 million or
17.0% of revenue and 54.8% of adjusted EBITDA* on a 16.2% increase
in capital expenditures as we reinvested in and expanded our
business is indicative of our disciplined focus on quality of
revenue and free cash flow generation," said Worthing F. Jackman, President and Chief
Executive Officer.
Mr. Jackman added, "Acquisition activity also accelerated into
year-end, as we announced an additional $130
million in acquired annualized revenue in December,
including a new market entry in Pennsylvania and tuck-ins in Illinois and Tennessee. Acquisitions
completed in 2019 provide rollover revenue growth of approximately
$170 million in 2020, and the pace of
acquisition activity remains elevated. Along with strong
pricing growth, this already sets us up for high single digit
growth in revenue and adjusted free cash flow*. Positive
solid waste volumes, any increases in values for recycled
commodities or renewable energy credits since year-end, or
additional acquisitions closed during the year would provide upside
to our initial 2020 outlook."
Mr. Jackman concluded, "Over 55% of our operating locations
either posted zero safety-related incidents in 2019 or drove
further year-over-year improvements. We would like to
recognize the tireless efforts of our more than 18,000 employees
for our continuing success."
*A non-GAAP measure; see accompanying non-GAAP Reconciliation
Schedule
Q4 2019 Results
Revenue in the fourth quarter totaled $1.362 billion, up from $1.262 billion in the prior year period.
Operating income, which included $29.0
million of impairments and other operating items primarily
related to the Company's sale of a non-strategic materials
processing facility and $3.7 million
of acquisition-related costs, was $194.2
million. This compares to $200.0 million in the prior year period, which
included $14.0 million of impairments
and other operating items and $2.8
million of acquisition-related costs.
Net income attributable to Waste Connections in the fourth
quarter was $133.3 million, or
$0.50 per share on a diluted basis of
264.6 million shares. In the prior year period, the Company
reported $132.5 million, or
$0.50 per share on a diluted basis of
264.5 million shares.
Adjusted net income attributable to Waste Connections* in the
fourth quarter was $181.4 million, or
$0.69 per share, versus $166.2 million, or $0.63 per share, in the prior year period.
Adjusted EBITDA* in the fourth quarter was $419.0 million, as compared to adjusted EBITDA*
of $397.2 million in the prior year
period. Adjusted net income attributable to Waste
Connections, adjusted net income attributable to Waste Connections
per diluted share and adjusted EBITDA, all non-GAAP measures,
primarily exclude the impact of the Tax Cuts and Jobs Act of 2017
(the "Tax Act"), fair value accounting changes to certain equity
awards, and acquisition-related items, as shown in the detailed
reconciliation in the attached schedules.
Full Year 2019 Results
For the year ended December 31,
2019, revenue was $5.389
billion, as compared to revenue of $4.923 billion in 2018. Operating income,
which included $77.4 million of
impairments and other operating items, fair value accounting
changes to certain equity awards, and other acquisition-related
costs, was $837.8 million. This
compares to operating income of $832.2
million in the prior year, which included $40.7 million of impairments and other operating
items, fair value accounting changes to certain equity awards, and
other acquisition-related costs.
Net income attributable to Waste Connections in 2019 was
$566.8 million, or $2.14 per share on a diluted basis of 264.5
million shares. In 2018, the Company reported net income
attributable to Waste Connections of $546.9
million, or $2.07 per share on
a diluted basis of 264.4 million shares.
Adjusted net income attributable to Waste Connections* in 2019
was $719.6 million, or $2.72 per share, compared to $667.3 million, or $2.52 per share, in the prior year. Adjusted
EBITDA* in 2019 was $1.674 billion,
as compared to $1.566 billion in the
prior year. Adjusted net income attributable to Waste
Connections, adjusted net income attributable to Waste Connections
per diluted share and adjusted EBITDA, all non-GAAP measures,
primarily exclude the impact of the Tax Act, acquisition-related
items and impairments and other operating items, as reflected in
the detailed reconciliations in the attached tables.
2020 Outlook
Waste Connections also announced its outlook for 2020, which
assumes no change in the current economic environment, unless
otherwise indicated. 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 Securities and
Exchange Commission and the securities commissions or similar
regulatory authorities in Canada.
Certain components of the outlook for 2020 are subject to quarterly
fluctuations. See reconciliations in the attached tables.
- Revenue is estimated in the range of $5.725 billion to $5.775
billion, including the following:
-
- Solid waste price and volume growth of approximately 5.0% and
0.0%, respectively
- E&P waste revenue down approximately 10.0%
- Values for recycled commodities and renewable energy credits as
of year-end 2019
- Net income attributable to Waste Connections is estimated in
the range of $653.0 million to
$668.0 million
- Adjusted EBITDA* is estimated in the range of $1.760 billion to $1.785
billion, or 30.7% - 30.9% of revenue
- Net cash provided by operating activities is estimated in the
range of $1.600 billion to
$1.625 billion
- Capital expenditures are estimated at $625 million
- Adjusted free cash flow* is estimated in the range of
$975.0 million to $1.0 billion.
* A non-GAAP measure; see accompanying Non-GAAP
Reconciliation Schedule
Q4 2019 Earnings and 2020 Outlook Conference Call
Waste Connections will be hosting a conference call related to
fourth quarter earnings and 2020 outlook on February 13th at 8:30 A.M. Eastern Time. To access the call,
listeners should dial 800-582-1443 (within North America) or 303-223-0118 (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 20, 2020 by
calling 800-633-8284 (within North
America) or 402-977-9140 (international) and entering
Passcode #21950919. 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 13th, providing
the Company's first quarter 2020 outlook for revenue, price plus
volume growth for solid waste and adjusted EBITDA*.
* 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, disposal
and recycling services in mostly exclusive and secondary markets in
the United States and
Canada. Through its R360 Environmental Solutions subsidiary,
Waste Connections is also a leading provider of non-hazardous
oilfield waste treatment, recovery and disposal services in several
of the most active natural resource producing areas in the United States, including the Permian,
Bakken and Eagle Ford Basins. Waste Connections serves more
than seven million residential, commercial, industrial, and
exploration and production customers in 42 states in the U.S., and
six provinces in Canada. The Company also provides intermodal
services for the rail haul movement of cargo and solid waste
containers in the Pacific Northwest.
For more information, visit the Waste Connections web site at
www.wasteconnections.com. Copies of financial literature,
including this release, are available on the Waste Connections
website or through contacting us directly at (905) 532-7510.
Investors can also obtain these materials and other documents filed
with the U.S. Securities and Exchange Commission ("SEC") and the
Canadian securities regulators free of charge at the SEC's website,
www.sec.gov, and at the System for Electronic Document Analysis and
Retrieval maintained by the Canadian Securities Administrators at
www.sedar.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
2020 financial results, outlook and related assumptions, adjusted
free cash flow, capital expenditures and potential acquisition
activity. 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 / (281)
873-3205
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF NET INCOME
THREE AND TWELVE
MONTHS ENDED DECEMBER 31, 2018 AND 2019
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
Three months
ended December 31,
|
|
Twelve months
ended December 31,
|
|
2018
|
|
|
2019
|
|
2018
|
|
2019
|
Revenues
|
$
|
1,261,732
|
|
|
$
|
1,361,960
|
|
$
|
4,922,941
|
|
$
|
5,388,679
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
744,757
|
|
|
|
814,151
|
|
|
2,865,704
|
|
|
3,198,757
|
Selling, general and
administrative
|
|
125,806
|
|
|
|
136,146
|
|
|
524,388
|
|
|
546,278
|
Depreciation
|
|
148,841
|
|
|
|
156,779
|
|
|
572,708
|
|
|
618,396
|
Amortization of
intangibles
|
|
28,336
|
|
|
|
31,701
|
|
|
107,779
|
|
|
125,522
|
Impairments and other
operating items
|
|
14,012
|
|
|
|
28,999
|
|
|
20,118
|
|
|
61,948
|
Operating
income
|
|
199,980
|
|
|
|
194,184
|
|
|
832,244
|
|
|
837,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(35,230)
|
|
|
|
(36,056)
|
|
|
(132,104)
|
|
|
(147,368)
|
Interest
income
|
|
3,493
|
|
|
|
2,592
|
|
|
7,170
|
|
|
9,777
|
Other income
(expense), net
|
|
(2,223)
|
|
|
|
1,142
|
|
|
(170)
|
|
|
5,704
|
Income before income
tax provision
|
|
166,020
|
|
|
|
161,862
|
|
|
707,140
|
|
|
705,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
(33,477)
|
|
|
|
(28,671)
|
|
|
(159,986)
|
|
|
(139,210)
|
Net income
|
|
132,543
|
|
|
|
133,191
|
|
|
547,154
|
|
|
566,681
|
Plus (Less): Net loss
(income) attributable to noncontrolling interests
|
|
(65)
|
|
|
|
71
|
|
|
(283)
|
|
|
160
|
Net income
attributable to Waste Connections
|
$
|
132,478
|
|
|
$
|
133,262
|
|
$
|
546,871
|
|
$
|
566,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.50
|
|
|
$
|
0.51
|
|
$
|
2.07
|
|
$
|
2.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.50
|
|
|
$
|
0.50
|
|
$
|
2.07
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
263,628,941
|
|
|
|
263,865,203
|
|
|
263,650,155
|
|
|
263,792,693
|
Diluted
|
|
264,453,655
|
|
|
|
264,636,883
|
|
|
264,395,618
|
|
|
264,526,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
$
|
0.160
|
|
|
$
|
0.185
|
|
$
|
0.580
|
|
$
|
0.665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
December 31,
2018
|
|
December
31, 2019
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
equivalents
|
$
|
319,305
|
|
$
|
326,738
|
Accounts receivable,
net of allowance for doubtful accounts of $16,760 and $16,432 at
December 31, 2018 and December 31, 2019, respectively
|
|
609,545
|
|
|
662,808
|
Prepaid expenses and
other current assets
|
|
164,053
|
|
|
141,052
|
Total current
assets
|
|
1,092,903
|
|
|
1,130,598
|
Restricted
cash
|
|
84,661
|
|
|
96,483
|
Restricted
investments
|
|
47,486
|
|
|
51,179
|
Property and
equipment, net
|
|
5,168,996
|
|
|
5,516,347
|
Operating lease
right-of-use assets
|
|
-
|
|
|
183,220
|
Goodwill
|
|
5,031,685
|
|
|
5,510,851
|
Intangible assets,
net
|
|
1,128,628
|
|
|
1,163,063
|
Other assets,
net
|
|
72,970
|
|
|
85,954
|
Total
assets
|
$
|
12,627,329
|
|
$
|
13,737,695
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
359,967
|
|
$
|
436,970
|
Book
overdraft
|
|
18,518
|
|
|
15,954
|
Accrued
liabilities
|
|
315,670
|
|
|
281,308
|
Current portion of
operating lease liabilities
|
|
-
|
|
|
29,929
|
Current portion of
contingent consideration
|
|
11,612
|
|
|
26,159
|
Deferred
revenue
|
|
179,282
|
|
|
216,443
|
Current portion of
long-term debt and notes payable
|
|
1,786
|
|
|
465
|
Total current
liabilities
|
|
886,835
|
|
|
1,007,228
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
4,153,465
|
|
|
4,353,782
|
Long-term portion of
operating lease liabilities
|
|
-
|
|
|
160,033
|
Long-term portion of
contingent consideration
|
|
43,003
|
|
|
42,825
|
Deferred income
taxes
|
|
760,033
|
|
|
818,622
|
Other long-term
liabilities
|
|
323,805
|
|
|
416,851
|
Total
liabilities
|
|
6,167,141
|
|
|
6,799,341
|
Commitments and
contingencies
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Common shares:
263,271,302 shares issued and 263,141,413 shares outstanding at
December 31, 2018; 263,699,675 shares issued and 263,618,161 shares
outstanding at December 31, 2019
|
|
4,131,307
|
|
|
4,135,343
|
Additional paid-in
capital
|
|
133,577
|
|
|
154,917
|
Accumulated other
comprehensive loss
|
|
(74,786)
|
|
|
(10,963)
|
Treasury shares:
129,889 and 81,514 shares at December 31, 2018 and 2019,
respectively
|
|
-
|
|
|
-
|
Retained
earnings
|
|
2,264,510
|
|
|
2,654,207
|
Total Waste
Connections' equity
|
|
6,454,608
|
|
|
6,933,504
|
Noncontrolling
interest in subsidiaries
|
|
5,580
|
|
|
4,850
|
Total
equity
|
|
6,460,188
|
|
|
6,938,354
|
|
$
|
12,627,329
|
|
$
|
13,737,695
|
|
|
|
|
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED
DECEMBER 31, 2018 AND 2019
(Unaudited)
(in thousands of U.S.
dollars)
|
|
|
Twelve months ended
December 31,
|
|
|
2018
|
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
547,154
|
|
$
|
566,681
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
10,193
|
|
|
60,592
|
Depreciation
|
|
572,708
|
|
|
618,396
|
Amortization of
intangibles
|
|
107,779
|
|
|
125,522
|
Amortization of
leases
|
|
-
|
|
|
24,099
|
Deferred income taxes,
net of acquisitions
|
|
77,859
|
|
|
54,637
|
Amortization of debt
issuance costs
|
|
4,158
|
|
|
5,001
|
Share-based
compensation
|
|
43,803
|
|
|
42,671
|
Interest
accretion
|
|
14,861
|
|
|
16,426
|
Payment of contingent
consideration recorded in earnings
|
|
(11)
|
|
|
-
|
Adjustments to
contingent consideration
|
|
349
|
|
|
1,498
|
Other
|
|
943
|
|
|
(2,240)
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
31,439
|
|
|
27,264
|
Net cash provided by
operating activities
|
|
1,411,235
|
|
|
1,540,547
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
(830,091)
|
|
|
(736,610)
|
Capital expenditures
for property and equipment
|
|
(546,145)
|
|
|
(634,406)
|
Capital expenditure
for purchase of greenfield landfill site
|
|
-
|
|
|
(31,683)
|
Investment in
noncontrolling interest
|
|
-
|
|
|
(25,000)
|
Proceeds from disposal
of assets
|
|
5,385
|
|
|
3,566
|
Change in restricted
investments, net of interest income
|
|
-
|
|
|
(2,183)
|
Other
|
|
(969)
|
|
|
310
|
Net cash used in
investing activities
|
|
(1,371,820)
|
|
|
(1,426,006)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
1,022,737
|
|
|
1,575,795
|
Principal payments on
notes payable and long-term debt
|
|
(970,773)
|
|
|
(1,470,711)
|
Payment of contingent
consideration recorded at acquisition date
|
|
(6,127)
|
|
|
(3,200)
|
Change in book
overdraft
|
|
(839)
|
|
|
(2,564)
|
Payments for
repurchase of common shares
|
|
(58,928)
|
|
|
-
|
Payments for cash
dividends
|
|
(152,550)
|
|
|
(175,067)
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
(15,032)
|
|
|
(17,660)
|
Debt issuance
costs
|
|
(8,630)
|
|
|
(5,953)
|
Proceeds from sale of
common shares held in trust
|
|
2,667
|
|
|
4,036
|
Other
|
|
(103)
|
|
|
(570)
|
Net cash used in
financing activities
|
|
(187,578)
|
|
|
(95,894)
|
Effect of exchange
rates changes on cash, cash equivalents and restricted
cash
|
|
(1,290)
|
|
|
608
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(149,453)
|
|
|
19,255
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
553,227
|
|
|
403,966
|
Plus: change in cash
held for sale
|
|
192
|
|
|
-
|
Cash, cash
equivalents and restricted cash at end of year
|
$
|
403,966
|
|
$
|
423,221
|
|
|
|
|
|
|
|
|
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,
2019:
|
U.S.
|
|
Canada
|
|
Total
|
Core Price
|
5.2%
|
|
6.4%
|
|
5.4%
|
Surcharges
|
0.0%
|
|
0.1%
|
|
0.0%
|
Volume
|
(1.4%)
|
|
(1.4%)
|
|
(1.4%)
|
Recycling
|
(0.7%)
|
|
(1.6%)
|
|
(0.8%)
|
Foreign Exchange
Impact
|
-
|
|
-
|
|
-
|
Total
|
3.1%
|
|
3.5%
|
|
3.2%
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
December 31, 2018 and 2019:
|
|
Three months
ended December 31, 2018
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported Revenue
|
|
%
|
Solid Waste
Collection
|
$
|
874,601
|
|
$
|
(2,338)
|
|
$
|
872,263
|
|
|
69.1%
|
Solid Waste Disposal
and Transfer
|
|
447,998
|
|
|
(177,946)
|
|
|
270,052
|
|
|
21.4%
|
Solid Waste
Recycling
|
|
23,075
|
|
|
(1,208)
|
|
|
21,867
|
|
|
1.7%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
67,192
|
|
|
(3,218)
|
|
|
63,974
|
|
|
5.1%
|
Intermodal and
Other
|
|
34,308
|
|
|
(732)
|
|
|
33,576
|
|
|
2.7%
|
Total
|
$
|
1,447,174
|
|
$
|
(185,442)
|
|
$
|
1,261,732
|
|
|
100.0%
|
|
|
|
|
|
|
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%
|
|
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three and twelve month periods ended December 31, 2018 and 2019:
|
Three months
ended
December 31,
|
|
|
Twelve months
ended
December 31,
|
|
2018
|
|
2019
|
|
|
2018
|
|
2019
|
Acquisitions,
net
|
$
|
61,420
|
|
$
|
68,465
|
|
|
$
|
153,139
|
|
$
|
291,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018 and 2019:
|
Three months
ended
December 31,
|
|
|
Twelve months
ended
December
31,
|
|
2018
|
|
2019
|
|
|
2018
|
|
2019
|
Cash Interest
Paid
|
$
|
39,296
|
|
$
|
54,078
|
|
|
$
|
124,338
|
|
$
|
139,694
|
Cash Taxes
Paid
|
|
19,102
|
|
|
39,089
|
|
|
|
52,464
|
|
|
81,049
|
Debt to Book Capitalization as of December 31, 2019: 39%
Internalization for the three months ended
December 31, 2019: 56%
Days Sales Outstanding for the three months ended
December 31, 2019: 45 (30
net of deferred revenue)
Share Information for the three months ended December 31, 2019:
Basic shares
outstanding
|
263,865,203
|
Dilutive effect of
equity-based awards
|
771,680
|
Diluted shares
outstanding
|
264,636,883
|
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,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Net income
attributable to Waste Connections
|
$
|
132,478
|
|
$
|
133,262
|
|
$
|
546,871
|
|
$
|
566,841
|
Plus (Less): Net
income (loss) attributable to noncontrolling interests
|
|
65
|
|
|
(71)
|
|
|
283
|
|
|
(160)
|
Plus: Income tax
provision
|
|
33,477
|
|
|
28,671
|
|
|
159,986
|
|
|
139,210
|
Plus: Interest
expense
|
|
35,230
|
|
|
36,056
|
|
|
132,104
|
|
|
147,368
|
Less: Interest
income
|
|
(3,493)
|
|
|
(2,592)
|
|
|
(7,170)
|
|
|
(9,777)
|
Plus: Depreciation
and amortization
|
|
177,177
|
|
|
188,480
|
|
|
680,487
|
|
|
743,918
|
Plus: Closure and
post-closure accretion
|
|
3,248
|
|
|
3,649
|
|
|
12,997
|
|
|
14,471
|
Plus: Impairments and
other operating items
|
|
14,012
|
|
|
28,999
|
|
|
20,118
|
|
|
61,948
|
Plus (Less): Other
expense (income), net
|
|
2,223
|
|
|
(1,142)
|
|
|
170
|
|
|
(5,704)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses (a)
|
|
3,701
|
|
|
4,278
|
|
|
8,607
|
|
|
12,335
|
Plus (less): Fair
value changes to certain equity awards (b)
|
|
(896)
|
|
|
(589)
|
|
|
9,205
|
|
|
3,104
|
Plus (less):
Integration-related and other expenses (c)
|
|
(35)
|
|
|
-
|
|
|
2,760
|
|
|
-
|
Adjusted
EBITDA
|
$
|
397,187
|
|
$
|
419,001
|
|
$
|
1,566,418
|
|
$
|
1,673,554
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
31.5%
|
|
|
30.8%
|
|
|
31.8%
|
|
|
31.1%
|
|
|
|
|
|
|
|
|
(a)
|
Reflects the addback
of acquisition-related transaction costs.
|
(b)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(c)
|
Reflects the addback
of integration-related items, including rebranding costs,
associated with the Progressive Waste acquisition.
|
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,
|
|
|
2018
|
|
2019
|
Net cash provided by
operating activities
|
|
$
|
1,411,235
|
|
$
|
1,540,547
|
Less: Change in book
overdraft
|
|
|
(839)
|
|
|
(2,564)
|
Plus: Proceeds from
disposal of assets
|
|
|
5,385
|
|
|
3,566
|
Less: Capital
expenditures for property and equipment
|
|
|
(546,145)
|
|
|
(634,406)
|
Less: Distributions
to noncontrolling interests
|
|
|
(103)
|
|
|
(570)
|
Adjustments:
|
|
|
|
|
|
|
Payment of
contingent consideration recorded in earnings (a)
|
|
|
11
|
|
|
-
|
Cash received
for divestitures (b)
|
|
|
(2,030)
|
|
|
(2,376)
|
Transaction-related items (c)
|
|
|
8,607
|
|
|
12,335
|
Integration-related and other expenses (d)
|
|
|
2,760
|
|
|
-
|
Pre-existing
Progressive Waste share-based grants (e)
|
|
|
5,772
|
|
|
4,810
|
Tax effect
(f)
|
|
|
(4,752)
|
|
|
(4,565)
|
Adjusted free cash
flow
|
|
$
|
879,901
|
|
$
|
916,777
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
17.9%
|
|
|
17.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Progressive Waste operations.
|
(c)
|
Reflects the addback
of acquisition-related transaction costs.
|
(d)
|
Reflects the addback
of integration-related items, including rebranding costs,
associated with the Progressive Waste acquisition.
|
(e)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(f)
|
The aggregate tax
effect of footnotes (a) through (e) 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,
|
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Reported net income
attributable to Waste Connections
|
|
$
|
132,478
|
|
$
|
133,262
|
|
$
|
546,871
|
|
$
|
566,841
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
|
|
28,336
|
|
|
31,701
|
|
|
107,779
|
|
|
125,522
|
Impairments and other
operating items (b)
|
|
|
14,012
|
|
|
28,999
|
|
|
20,118
|
|
|
61,948
|
Transaction-related
expenses (c)
|
|
|
3,701
|
|
|
4,278
|
|
|
8,607
|
|
|
12,335
|
Fair value changes to
certain equity awards (d)
|
|
|
(896)
|
|
|
(589)
|
|
|
9,205
|
|
|
3,104
|
Integration-related
and other expenses (e)
|
|
|
(35)
|
|
|
-
|
|
|
2,760
|
|
|
-
|
Tax effect (f)
|
|
|
(11,383)
|
|
|
(16,234)
|
|
|
(37,165)
|
|
|
(50,189)
|
Tax items (g)
|
|
|
-
|
|
|
-
|
|
|
9,093
|
|
|
-
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
166,213
|
|
$
|
181,417
|
|
$
|
667,268
|
|
$
|
719,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.50
|
|
$
|
0.50
|
|
$
|
2.07
|
|
$
|
2.14
|
Adjusted net
income
|
|
$
|
0.63
|
|
$
|
0.69
|
|
$
|
2.52
|
|
$
|
2.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
Reflects the addback
of integration-related items, including rebranding costs,
associated with the Progressive Waste acquisition.
|
(f)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (e) is
calculated based on the applied tax rates for the respective
periods.
|
(g)
|
Primarily reflects
refinements to the estimates, as provided by Staff Accounting
Bulletin No. 118, of the impact of a portion of the Company's U.S.
earnings no longer permanently reinvested in conjunction with the
Tax Act.
|
2020 OUTLOOK
NON-GAAP RECONCILIATION
SCHEDULE
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
2020
Outlook
|
|
|
|
Estimates
|
|
Observation
|
Net income
attributable to Waste Connections
|
|
$
|
653,000
|
|
|
|
$
|
668,000
|
|
|
Plus: Income tax provision
|
|
|
179,000
|
|
|
|
|
183,000
|
|
Approximate 21.5%
effective rate
|
Plus: Interest expense, net
|
|
|
140,000
|
|
|
|
|
140,000
|
|
|
Plus: Depreciation and Depletion
|
|
|
647,000
|
|
|
|
|
653,000
|
|
Approximately 11.3%
of revenue
|
Plus: Amortization
|
|
|
126,000
|
|
|
|
|
126,000
|
|
|
Plus: Closure and post-closure accretion
|
|
|
15,000
|
|
|
|
|
15,000
|
|
|
Adjusted
EBITDA
|
|
$
|
1,760,000
|
|
|
|
$
|
1,785,000
|
|
In the range of 30.7%
to 30.9% of revenue
|
Reconciliation of Adjusted Free Cash Flow:
|
|
2020
Outlook
|
|
|
Estimates
|
Net cash provided by
operating activities
|
|
$
|
1,600,000
|
|
$
|
1,625,000
|
Less: Capital expenditures
|
|
|
(625,000)
|
|
|
(625,000)
|
Adjusted free cash
flow
|
|
$
|
975,000
|
|
$
|
1,000,000
|
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multimedia:http://www.prnewswire.com/news-releases/waste-connections-reports-fourth-quarter-results-and-provides-2020-outlook-301003962.html
SOURCE Waste Connections, Inc.