UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE
ACT OF 1934
For the month of November 2024
Commission File Number: 001-39240
GFL Environmental
Inc.
(Translation of registrant’s name into
English)
100 New Park Place, Suite 500
Vaughan, Ontario,
Canada L4K 0H9
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
EXHIBIT INDEX
The following Exhibit 99.1 is furnished as part of this Current
Report on Form 6-K.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
GFL Environmental Inc. |
| |
|
|
| Date: November 6, 2024 |
By: |
/s/ Mindy Gilbert |
| |
|
Name: Mindy Gilbert |
| |
|
Title: Executive Vice President and Chief Legal Officer |
Exhibit 99.1
GFL Environmental Reports Third Quarter 2024 Results
| · | Adjusted
EBITDA margin1 of 31.1%, highest in Company’s history and an increase of
300 basis points over prior year |
| · | Net
Leverage1 of 4.05x, lowest in Company’s history |
| | | |
| | · | Environmental
Services sale process remains on track with expected net proceeds of at least $6 billion |
| · | Solid
Waste price of 6.0% excluding the impact of divestitures (5.8% including the
impact of divestitures), ahead of expectations |
| · | Solid Waste volumes improved sequentially by 90 basis points, ahead of expectations |
| · | Adjusted
EBITDA1 of $625.9 million, increase of 18.0%; Adjusted Net Income1
of $126.1 million; Net income of $110.6 million |
| · | Adjusted
Cash Flows from Operating Activities1 of $377.6 million; cash flows from operating
activities of $347.1 million; Adjusted Free Cash Flow1 of $225.4 million |
| · | Year-to-date
completed acquisitions generating approximately $115 million in annualized revenue |
VAUGHAN,
ON, November 6, 2024 — GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) (“GFL”, “we” or “our”)
today announced its results for the third quarter of 2024.
“Once again, the dedication
of our over 20,000 employees delivered consistent high-quality results across all our financial metrics,” said Patrick Dovigi,
Founder and Chief Executive Officer of GFL. “Our continued focus on strong execution generated industry leading Adjusted EBITDA
margin1 expansion of 300 basis points over the prior year quarter, the highest in GFL’s history. Consistent with our
capital allocation plan for the year, we deployed $96.4 million in incremental growth initiatives during the quarter, primarily related
to extended producer responsibility and RNG opportunities, and $47.4 million in tuck-in acquisitions. Inclusive of the impact of these
investments and acquisitions, we achieved Net Leverage1 of 4.05x, the lowest in our company’s history.”
“We are also
tracking in line to achieve our 2024 capital allocation targets, including the deployment of approximately $900 million into M&A
and incremental growth investments.” Mr. Dovigi added, “Given our strong results year to date, we are confident in our
ability to deliver on our 2024 key guidance metrics and are well positioned for another year of outsized margin expansion and
growth in 2025.”
Mr. Dovigi continued, “In August we announced our plans to further evaluate the potential sale of our Environmental Services business.
We launched a robust process in September and have received several expressions of interest from highly reputable potential buyers at
valuations that should net a minimum of $6 billion in after tax proceeds with which we expect to repay at least $3.5 billion of debt with the remainder available to
be used for share buybacks and general corporate purposes. We are working with our advisors on assessing the bids,
with a view to executing an agreement prior to the announcement of our 2024 year-end results.”
Mr. Dovigi concluded,
“Today we are also announcing a change to our leadership team. As part of our long-planned succession process, effective January 1,
2025, Greg Yorston will transition the role of Chief Operating Officer to Billy Soffera, our current EVP of Solid Waste Operations
and will continue in an advisory role until the end of 2025 to ensure an orderly and seamless transition. Over the past six years, Greg has been instrumental in executing our
growth strategy and instilling operational discipline across the enterprise. We are fortunate that we will continue to benefit from
his leadership during this transitional period. Billy has decades of industry experience and has been a critical member of our
operational leadership team since joining GFL in 2021. Billy’s depth and breadth of experience, combined with his
institutional knowledge of our business, make him uniquely positioned to advance our operational and growth strategy.”
Third Quarter Results
| · | Revenue
of $2,014.7 million in the third quarter of 2024, increase of 9.3% excluding the impact of
divestitures (6.6% including the impact of divestitures), compared to the third quarter of
2023. |
| ◦ | Solid
Waste revenue of $1,554.2 million, including 6.0% from core pricing partially offset by volume
decreases of 0.8%.2 |
| ◦ | Environmental
Services revenue of $460.5 million, compared to $447.0 million in the prior year period
which included approximately $20.6 million of revenue associated with an unseasonably
high level of large event driven business. Excluding the impact of this outsized activity
in the prior year period, revenue increased by 7.9%. |
| · | Adjusted
EBITDA1 increased by 18.0% to $625.9 million in the third quarter of 2024, compared
to $530.3 million in the third quarter of 2023. Adjusted EBITDA margin1 was 31.1%
in the third quarter of 2024, compared to 28.1% in the third quarter of 2023. Solid Waste
Adjusted EBITDA margin1 was 34.8% in the third quarter of 2024, compared to 31.4%
in the third quarter of 2023. Environmental Services Adjusted EBITDA margin1 was
32.2% in the third quarter of 2024, compared to 31.1% in the third quarter of 2023. |
| · | Net
income was $110.6 million in the third quarter of 2024, compared to net income of $18.3 million
in the third quarter of 2023. |
| · | Adjusted
Free Cash Flow1 was $225.4 million in the third quarter of 2024, compared to $276.0
million in the third quarter of 2023. The decrease of $50.6 million was predominantly due
to the timing of cash taxes related to divestitures and incremental growth investments, offset
by an increase in cash flows from operating activities. |
Year to Date Results
| · | Revenue
of $5,876.1 million for the nine months ended September 30, 2024, an increase of 9.0%
excluding the impact of divestitures (4.3% including the impact of divestitures), compared
to the nine months ended September 30, 2023. |
| ◦ | Solid
Waste revenue of $4,567.6 million, including 6.7% from core pricing, partially offset by
volume decreases of 1.8%.2 |
| ◦ | Environmental
Services revenue of $1,308.5 million, compared to $1,265.8 million in the prior year period
which included approximately $81.8 million of revenue associated with an unseasonably
high level of large event driven business. Excluding the impact of this outsized activity
in the prior year period, revenue increased by 10.5%. |
| · | Adjusted
EBITDA1 increased by 14.3% excluding the impact of divestitures (10.7% including
the impact of divestitures) to $1,672.7 million for the nine months ended September 30,
2024, compared to the nine months ended September 30, 2023. Adjusted EBITDA margin1
was 28.5% for the nine months ended September 30, 2024, compared to 26.8% for
the nine months ended September 30, 2023. Solid Waste Adjusted EBITDA margin1
was 32.8% for the nine months ended September 30, 2024, compared to 30.7% for the nine
months ended September 30, 2023. Environmental Services Adjusted EBITDA margin1
was 28.4% for the nine months ended September 30, 2024, compared to 27.9% for
the nine months ended September 30, 2023. |
| · | Net
loss was $538.2 million for the nine months ended September 30, 2024, compared to net
income of $94.3 million for the nine months ended September 30, 2023. Net loss includes
a non-cash loss resulting from the divestiture of certain U.S. assets completed in the current
period. |
| · | Adjusted
Free Cash Flow1 was $460.2 million for the nine months ended September 30,
2024, compared to $235.8 million for the nine months ended September 30, 2023. The increase
of $224.4 million was predominantly due to an increase in cash flows from operating activities
from a reduction in cash interest paid, as well as timing of capex payments. |
| (1) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (2) | Reflects pro forma adjustments
to remove the contribution of three non-core U.S Solid Waste businesses that were divested
in Fiscal 2023 and one divestiture in the current year. Refer to “Supplemental Data” for details. |
Q3 2024 Earnings
GFL
will host a conference call related to our third quarter earnings on November 7, 2024 at 8:30 am Eastern Time. A live audio
webcast of the conference call can be accessed by logging onto our Investors page at investors.gflenv.com or by clicking
here. Listeners may access the call toll-free by dialing 1-833-950-0062 in Canada or 1-833-470-1428 in the United States (access
code: 836126) approximately 15 minutes prior to the scheduled start time.
We
encourage participants who will be dialing in to pre-register for the conference call using the following link: https://www.netroadshow.com/events/login?show=0c5465fe&confId=71726.
Callers who pre-register will be given a conference access code and PIN to gain immediate access to the call and bypass the live operator
on the day of the call. Participants may pre-register at any time, including up to and after the call start time. For those unable to
listen live, an audio replay of the call will be available until November 21, 2024 by dialing 1-226-828-7578 in Canada or 1-866-813-9403
in the United States (access code: 637858).
About GFL
GFL, headquartered in Vaughan,
Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of solid waste
management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than
half of the U.S. states. Across its organization, GFL has a workforce of approximately 20,000 employees.
For
more information, visit the GFL web site at gflenv.com. To subscribe for investor email alerts please visit investors.gflenv.com
or click here.
Forward-Looking Information
This release includes certain
“forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”)
within the meaning of applicable U.S. and Canadian securities laws, respectively. Forward-looking information includes all statements
that do not relate solely to historical or current facts and may relate to our future outlook, financial guidance and anticipated events
or results and may include statements regarding our financial performance, financial condition or results, business strategy, growth
strategies, budgets, operations and services. Particularly, statements regarding our expectations of future results, performance, achievements,
prospects or opportunities, the markets in which we operate, potential asset sales, potential deleveraging transactions, potential share
repurchases or potential strategic transactions are forward-looking information. In some cases, forward-looking information can be identified
by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not
expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”,
“outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”,
“anticipates”, “does not anticipate”, “believes”, or “potential” or variations of such
words and phrases or statements that certain actions, events or results “may”, “could”, “would”,
“might”, “will”, “will be taken”, “occur” or “be achieved”, although not
all forward-looking information includes those words or phrases. In addition, any statements that refer to expectations, intentions,
projections, guidance, potential or other characterizations of future events or circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts nor assurances of future performance but instead represent management's
expectations, estimates and projections regarding future events or circumstances. Without limiting the foregoing, there can be no assurance that GFL will complete the proposed sale of its Environmental Services business
or if so that the pre or after tax proceeds to GFL or any consequential debt repayment will be in an amount or on terms as favorable to
GFL as is anticipated by such forward looking information, or that GFL undertakes any share buy-back or if so as to the size, price or
other terms thereof or its success.
Forward-looking information
is based on our opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such information is
stated, is subject to known and unknown risks, uncertainties, assumptions and other important factors that may cause the actual results,
level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information,
including but not limited to certain assumptions set out herein; our ability to obtain and maintain existing financing on acceptable
terms; our ability to source and execute on acquisitions on terms acceptable to us; our ability to find purchasers for and complete any
divestiture of assets on terms acceptable to us; our ability to use the proceeds of any such asset divestiture for deleveraging or potential
share repurchases; currency exchange and interest rates; commodity price fluctuations; our ability to implement price increases and surcharges;
changes in waste volumes; labour, supply chain and transportation constraints; inflationary cost pressures; fuel supply and fuel price
fluctuations; our ability to maintain a favourable working capital position; the impact of competition; the changes and trends in our
industry or the global economy; and changes in laws, rules, regulations, and global standards. Other important factors that could materially
affect our forward-looking information can be found in the “Risk Factors” section of GFL’s annual information form
for the year ended December 31, 2023 and GFL’s other periodic filings with the U.S. Securities and Exchange Commission and
the securities commissions or similar regulatory authorities in Canada. Shareholders, potential investors and other readers are urged
to consider these risks carefully in evaluating our forward-looking information and are cautioned not to place undue reliance on such
information. There can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Although we
have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking
information, there may be other factors not currently known to us or that we currently believe are not material that could also cause
actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance
that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in
such information. The forward-looking information contained in this release represents our expectations as of the date of this release
(or as the date it is otherwise stated to be made), and is subject to change after such date. However, we disclaim any intention or obligation
or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise,
except as required under applicable U.S. or Canadian securities laws. The purpose of disclosing our financial outlook set out in this
release is to provide investors with more information concerning the financial impact of our business initiatives and growth strategies.
Non-IFRS Measures
This release makes reference
to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed
by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should
not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS
measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors
and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures
in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and
to determine components of management compensation.
EBITDA represents, for the
applicable period, net income (loss) plus (a) interest and other finance costs, plus (b) depreciation and amortization
of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for income taxes,
in each case to the extent deducted or added to/from net income (loss). We present EBITDA to assist readers in understanding the mathematical
development of Adjusted EBITDA. Management does not use EBITDA as a financial performance metric.
Adjusted
EBITDA is a supplemental measure used by management and other users of our financial statements including, our lenders and investors,
to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is
also a key metric that management uses prior to execution of any strategic investing or financing opportunity. For example, management
uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted
EBITDA is utilized by financial institutions to measure borrowing capacity. Adjusted EBITDA is calculated by adding and deducting, as
applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management’s view are either
not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including:
(a) (gain) loss on foreign exchange, (b) (gain) loss on sale of property and equipment, (c) mark-to-market (gain) loss
on Purchase Contracts, (d) share of net (income) loss of investments accounted for using the equity method for associates, (e) share-based
payments, (f) (gain) loss on divestiture, (g) transaction costs, (h) acquisition, rebranding and other integration costs
(included in cost of sales related to acquisition activity), (i) Founder/CEO remuneration and (j) other. For the three
and nine months ended September 30, 2024, Founder/CEO remuneration has been added back to EBITDA. We use Adjusted EBITDA to facilitate
a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business. As we continue
to grow our business, we may be faced with new events or circumstances that are not indicative of our underlying business performance
or that impact the ability to assess our operating performance.
Adjusted EBITDA margin represents
Adjusted EBITDA divided by revenue. Management and other users of our financial statements including our lenders and investors use Adjusted
EBITDA margin to facilitate a comparison of the operating performance of each of our operating segments on a consistent basis reflecting
factors and trends affecting our business.
Acquisition EBITDA represents,
for the applicable period, management's estimates of the annual Adjusted EBITDA of an acquired business, based on its most recently available
historical financial information at the time of acquisition, as adjusted to give effect to (a) the elimination of expenses related
to the prior owners and certain other costs and expenses that are not indicative of the underlying business performance, if any, as if
such business had been acquired on the first day of such period and (b) contract and acquisition annualization for contracts entered
into and acquisitions completed by such acquired business prior to our acquisition (collectively, “Acquisition EBITDA Adjustments”).
Further adjustments are made to such annual Adjusted EBITDA to reflect estimated operating cost savings and synergies, if any, anticipated
to be realized upon acquisition and integration of the business into our operations. Acquisition EBITDA is calculated net of divestitures.
We use Acquisition EBITDA for the acquired businesses to adjust our Adjusted EBITDA to include a proportional amount of the Acquisition
EBITDA of the acquired businesses based upon the respective number of months of operation for such period prior to the date of our acquisition
of each such business.
Adjusted Cash Flows
from Operating Activities represents cash flows from operating activities adjusted for (a) transaction costs,
(b) acquisition, rebranding and other integration costs, (c) Founder/CEO remuneration, (d) cash interest paid on TEUs, (e) cash taxes related to divestitures and (f) distribution received from joint ventures. Adjusted Cash Flows from Operating
Activities is a supplemental measure used by investors as a valuation and liquidity measure in our industry. For the three and nine
months ended September 30, 2024, Founder/CEO remuneration and distributions received from joint ventures have been added back
to Adjusted Cash Flows from Operating Activities. These amounts were not paid or received, as applicable, in prior periods. Adjusted
Cash Flows from Operating Activities is a supplemental measure used by management to evaluate and monitor liquidity and the ongoing
financial performance of GFL.
Adjusted Free Cash Flow
represents Adjusted Cash Flows from Operating Activities adjusted for (a) proceeds on disposal of assets and other, (b) purchase
of property and equipment and (c) incremental growth investments. Adjusted Free Cash Flow is a supplemental measure used by investors
as a valuation and liquidity measure in our industry. Adjusted Free Cash Flow is a supplemental measure used by management to evaluate
and monitor liquidity and the ongoing financial performance of GFL. For the three and nine months ended September 30, 2024, we excluded
investment in joint ventures and associates from the calculation of Adjusted Free Cash Flow.
Adjusted Net Income (Loss)
represents net income (loss) adjusted for (a) amortization of intangible assets, (b) ARO discount rate depreciation adjustment,
(c) incremental depreciation of property and equipment due to recapitalization, (d) amortization of deferred financing costs,
(e) (gain) loss on foreign exchange, (f) mark-to-market (gain) loss on Purchase Contracts, (g) share of net (income) loss
of investments accounted for using the equity method, (h) loss on termination of hedged instruments (i) (gain) loss on divestiture,
(j) transaction costs, (k) acquisition, rebranding and other integration costs, (l) Founder/CEO remuneration, (m) TEU
amortization expense, (n) other and (o) the tax impact of the forgoing. For the three and nine months ended September 30,
2024, we added back the ARO discount rate depreciation adjustment, the loss on termination of hedged instruments, Founder/CEO remuneration,
and our share of net loss of investments accounted for using the equity method. Adjusted income (loss) per share is defined as Adjusted
Net Income (Loss) divided by the weighted average shares in the period. For the three and nine months ended September 30, 2024,
Founder/CEO remuneration has been added back to net income (loss). We believe that Adjusted income (loss) per share provides a meaningful
comparison of current results to prior periods' results by excluding items that GFL does not believe reflect its fundamental business
performance.
Net Leverage is a supplemental
measure used by management to evaluate borrowing capacity and capital allocation strategies. Net Leverage is equal to our total long-term
debt, as adjusted for fair value, deferred financings and other adjustments and reduced by our cash, divided by Run-Rate EBITDA.
Run-Rate EBITDA represents
Adjusted EBITDA for the applicable period as adjusted to give effect to management's estimates of (a) Acquisition EBITDA Adjustments
(as defined above) and (b) the impact of annualization of certain new municipal and disposal contracts and cost savings initiatives,
entered into, commenced or implemented, as applicable, in such period, as if such contracts or costs savings initiatives had been entered
into, commenced or implemented, as applicable, on the first day of such period ((a) and (b), collectively, “Run-Rate EBITDA
Adjustments”). Run-Rate EBITDA has not been adjusted to take into account the impact of the cancellation of contracts and cost
increases associated with these contracts. These adjustments reflect monthly allocations of Acquisition EBITDA for the acquired businesses
based on straight line proration. As a result, these estimates do not take into account the seasonality of a particular acquired business.
While we do not believe the seasonality of any one acquired business is material when aggregated with other acquired businesses, the
estimates may result in a higher or lower adjustment to our Run-Rate EBITDA than would have resulted had we adjusted for the actual results
of each of the acquired businesses for the period prior to our acquisition. We primarily use Run-Rate EBITDA to show how GFL would have
performed if each of the acquired businesses had been consummated at the start of the period as well as to show the impact of the annualization
of certain new municipal and disposal contracts and cost savings initiatives. We also believe that Run-Rate EBITDA is useful to investors
and creditors to monitor and evaluate our borrowing capacity and compliance with certain of our debt covenants. Run-Rate EBITDA as presented
herein is calculated in accordance with the terms of our revolving credit agreement.
All references to “$”
in this press release are to Canadian dollars, unless otherwise noted.
For further information:
Patrick Dovigi, Founder and Chief Executive Officer
+1 905-326-0101
pdovigi@gflenv.com
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements
of Operations and Comprehensive Income (Loss)
(In millions of dollars except per share
amounts)
| | |
Three months ended September 30, | | |
Nine months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Revenue | |
$ | 2,014.7 | | |
$ | 1,890.0 | | |
$ | 5,876.1 | | |
$ | 5,632.7 | |
| Expenses | |
| | | |
| | | |
| | | |
| | |
| Cost of sales | |
| 1,604.5 | | |
| 1,526.8 | | |
| 4,769.9 | | |
| 4,672.0 | |
| Selling, general and administrative expenses | |
| 236.2 | | |
| 234.7 | | |
| 765.5 | | |
| 683.4 | |
| Interest and other finance costs | |
| 169.8 | | |
| 137.2 | | |
| 509.7 | | |
| 466.7 | |
| Gain on sale of property and equipment | |
| (2.4 | ) | |
| (6.7 | ) | |
| (4.3 | ) | |
| (13.1 | ) |
| (Gain) loss on foreign exchange | |
| (68.1 | ) | |
| 46.9 | | |
| 12.2 | | |
| (4.6 | ) |
| Mark-to-market loss on Purchase Contracts | |
| — | | |
| — | | |
| — | | |
| 104.3 | |
| Loss (gain) on divestiture | |
| 0.5 | | |
| — | | |
| 494.6 | | |
| (580.5 | ) |
| Other | |
| (25.1 | ) | |
| (15.2 | ) | |
| (26.0 | ) | |
| (17.5 | ) |
| | |
| 1,915.4 | | |
| 1,923.7 | | |
| 6,521.6 | | |
| 5,310.7 | |
| Share of net income (loss) of investments accounted for using the equity method | |
| 31.8 | | |
| 34.0 | | |
| 16.9 | | |
| (48.9 | ) |
| Income (loss) before income taxes | |
| 131.1 | | |
| 0.3 | | |
| (628.6 | ) | |
| 273.1 | |
| Current income tax expense | |
| 29.8 | | |
| 18.1 | | |
| 93.0 | | |
| 367.5 | |
| Deferred tax recovery | |
| (9.3 | ) | |
| (36.1 | ) | |
| (183.4 | ) | |
| (188.7 | ) |
| Income tax expense (recovery) | |
| 20.5 | | |
| (18.0 | ) | |
| (90.4 | ) | |
| 178.8 | |
| Net income (loss) | |
| 110.6 | | |
| 18.3 | | |
| (538.2 | ) | |
| 94.3 | |
| Less: Net income (loss) attributable to non-controlling interests | |
| 0.2 | | |
| (3.8 | ) | |
| (4.6 | ) | |
| (3.3 | ) |
| Net income (loss) attributable to GFL Environmental Inc. | |
| 110.4 | | |
| 22.1 | | |
| (533.6 | ) | |
| 97.6 | |
| | |
| | | |
| | | |
| | | |
| | |
| Items that may be subsequently reclassified to net income (loss) | |
| | | |
| | | |
| | | |
| | |
| Currency translation adjustment | |
| (86.2 | ) | |
| 119.4 | | |
| 115.1 | | |
| (42.4 | ) |
| Reclassification to net income (loss) of fair value movements on cash flow hedges, net of tax | |
| (5.7 | ) | |
| — | | |
| (5.7 | ) | |
| — | |
| Fair value movements on cash flow hedges, net of tax | |
| 2.1 | | |
| 10.7 | | |
| (12.6 | ) | |
| 25.6 | |
| Share of other comprehensive loss of investments accounted for using the equity method | |
| — | | |
| — | | |
| (1.2 | ) | |
| (0.4 | ) |
| Reclassification to net income (loss) of foreign currency differences on divestitures | |
| — | | |
| — | | |
| (26.5 | ) | |
| 22.5 | |
| Other comprehensive (loss) income | |
| (89.8 | ) | |
| 130.1 | | |
| 69.1 | | |
| 5.3 | |
| Total comprehensive income (loss) | |
| 20.8 | | |
| 148.4 | | |
| (469.1 | ) | |
| 99.6 | |
| Less: Total comprehensive loss attributable to non-controlling interests | |
| (2.7 | ) | |
| (4.5 | ) | |
| — | | |
| (4.3 | ) |
| Total comprehensive income (loss) attributable to GFL Environmental Inc. | |
$ | 23.5 | | |
$ | 152.9 | | |
$ | (469.1 | ) | |
$ | 103.9 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic income (loss) per share(1) | |
$ | 0.24 | | |
$ | — | | |
$ | (1.59 | ) | |
$ | 0.08 | |
| Diluted income (loss) per share(1) | |
$ | 0.23 | | |
$ | — | | |
$ | (1.59 | ) | |
$ | 0.08 | |
| Weighted average number of shares outstanding | |
| 380,144,960 | | |
| 369,556,706 | | |
| 376,589,863 | | |
| 369,320,689 | |
| Diluted weighted average number of shares outstanding | |
| 385,321,424 | | |
| 369,556,706 | | |
| 376,589,863 | | |
| 372,007,592 | |
| (1) | Basic and diluted loss per
share is calculated on net income (loss) attributable to GFL Environmental Inc. adjusted
for amounts attributable to preferred shareholders. Refer to Note 9 in our Unaudited Interim
Financial Statements. |
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Financial
Position
(In millions of dollars)
| | |
September 30, 2024 | |
December 31, 2023 | |
| Assets | |
| | |
| | |
| Cash | |
$ | 99.5 | |
$ | 135.7 | |
| Trade and other receivables, net | |
| 1,216.6 | |
| 1,080.0 | |
| Income taxes recoverable | |
| 8.8 | |
| 47.7 | |
| Prepaid expenses and other assets | |
| 281.3 | |
| 221.6 | |
| Current assets | |
| 1,606.2 | |
| 1,485.0 | |
| | |
| | |
| | |
| Property and equipment, net | |
| 7,358.7 | |
| 6,980.7 | |
| Intangible assets, net | |
| 2,846.8 | |
| 3,056.3 | |
| Investments accounted for using the equity method | |
| 335.5 | |
| 319.0 | |
| Other long-term assets | |
| 108.8 | |
| 82.9 | |
| Deferred income tax assets | |
| 155.3 | |
| 64.8 | |
| Goodwill | |
| 7,727.3 | |
| 7,890.5 | |
| Non-current assets | |
| 18,532.4 | |
| 18,394.2 | |
| Total assets | |
$ | 20,138.6 | |
$ | 19,879.2 | |
| | |
| | |
| | |
| Liabilities | |
| | |
| | |
| Accounts payable and accrued liabilities | |
| 1,598.8 | |
| 1,679.1 | |
| Long-term debt | |
| 1,031.1 | |
| 9.7 | |
| Lease obligations | |
| 66.5 | |
| 59.6 | |
| Due to related party | |
| 2.9 | |
| 5.8 | |
| Landfill closure and post-closure obligations | |
| 59.2 | |
| 56.2 | |
| Current liabilities | |
| 2,758.5 | |
| 1,810.4 | |
| | |
| | |
| | |
| Long-term debt | |
| 8,493.8 | |
| 8,827.2 | |
| Lease obligations | |
| 422.8 | |
| 383.4 | |
| Other long-term liabilities | |
| 40.0 | |
| 39.1 | |
| Due to related party | |
| — | |
| 2.9 | |
| Deferred income tax liabilities | |
| 444.7 | |
| 534.0 | |
| Landfill closure and post-closure obligations | |
| 973.6 | |
| 896.0 | |
| Non-current liabilities | |
| 10,374.9 | |
| 10,682.6 | |
| Total liabilities | |
| 13,133.4 | |
| 12,493.0 | |
| | |
| | |
| | |
| Shareholders’ equity | |
| | |
| | |
| Share capital | |
| 9,938.0 | |
| 9,835.1 | |
| Contributed surplus | |
| 137.2 | |
| 149.5 | |
| Deficit | |
| (3,376.9 | ) |
| (2,822.6 | ) |
| Accumulated other comprehensive income | |
| 79.6 | |
| 15.1 | |
| Total GFL Environmental Inc.’s shareholders’ equity | |
| 6,777.9 | |
| 7,177.1 | |
| Non-controlling interests | |
| 227.3 | |
| 209.1 | |
| Total shareholders’ equity | |
| 7,005.2 | |
| 7,386.2 | |
| Total liabilities and shareholders’ equity | |
$ | 20,138.6 | |
$ | 19,879.2 | |
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements
of Cash Flows
(In millions of dollars)
| | |
Three months ended September 30, | | |
Nine months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Operating activities | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) | |
$ | 110.6 | | |
$ | 18.3 | | |
$ | (538.2 | ) | |
$ | 94.3 | |
| Adjustments for non-cash items | |
| | | |
| | | |
| | | |
| | |
| Depreciation of property and equipment | |
| 289.0 | | |
| 242.3 | | |
| 831.3 | | |
| 719.9 | |
| Amortization of intangible assets | |
| 110.9 | | |
| 106.9 | | |
| 330.2 | | |
| 379.7 | |
| Share of net (income) loss of investments accounted for using the equity method | |
| (31.8 | ) | |
| (34.0 | ) | |
| (16.9 | ) | |
| 48.9 | |
| Loss (gain) on divestiture | |
| 0.5 | | |
| — | | |
| 494.6 | | |
| (580.5 | ) |
| Other | |
| (25.1 | ) | |
| (15.2 | ) | |
| (26.0 | ) | |
| (17.5 | ) |
| Interest and other finance costs | |
| 169.8 | | |
| 137.2 | | |
| 509.7 | | |
| 466.7 | |
| Share-based payments | |
| 18.0 | | |
| 26.5 | | |
| 90.6 | | |
| 56.7 | |
| (Gain) loss on unrealized foreign exchange on long-term debt and TEUs | |
| (68.1 | ) | |
| 47.2 | | |
| 12.0 | | |
| (3.5 | ) |
| Gain on sale of property and equipment | |
| (2.4 | ) | |
| (6.7 | ) | |
| (4.3 | ) | |
| (13.1 | ) |
| Mark-to-market loss on Purchase Contracts | |
| — | | |
| — | | |
| — | | |
| 104.3 | |
| Current income tax expense | |
| 29.8 | | |
| 18.1 | | |
| 93.0 | | |
| 367.5 | |
| Deferred tax recovery | |
| (9.3 | ) | |
| (36.1 | ) | |
| (183.4 | ) | |
| (188.7 | ) |
| Interest paid in cash on Amortizing Notes component of TEUs | |
| — | | |
| — | | |
| — | | |
| (0.2 | ) |
| Interest paid in cash, excluding interest paid on Amortizing Notes | |
| (164.3 | ) | |
| (134.8 | ) | |
| (393.2 | ) | |
| (411.5 | ) |
| Income taxes paid in cash, net | |
| (29.3 | ) | |
| (250.9 | ) | |
| (35.8 | ) | |
| (261.8 | ) |
| Changes in non-cash working capital items | |
| (38.4 | ) | |
| 12.9 | | |
| (168.3 | ) | |
| (169.6 | ) |
| Landfill closure and post-closure expenditures | |
| (12.8 | ) | |
| (5.9 | ) | |
| (20.4 | ) | |
| (12.6 | ) |
| | |
| 347.1 | | |
| 125.8 | | |
| 974.9 | | |
| 579.0 | |
| Investing activities | |
| | | |
| | | |
| | | |
| | |
| Purchase of property and equipment | |
| (281.1 | ) | |
| (276.3 | ) | |
| (875.8 | ) | |
| (823.6 | ) |
| Proceeds from disposal of assets and other | |
| 32.5 | | |
| 30.6 | | |
| 40.5 | | |
| 51.0 | |
| Proceeds from divestitures | |
| — | | |
| — | | |
| 69.5 | | |
| 1,645.9 | |
| Business acquisitions and investments, net of cash acquired | |
| (62.1 | ) | |
| (392.3 | ) | |
| (613.5 | ) | |
| (674.7 | ) |
| Dividend received from joint ventures | |
| 1.1 | | |
| — | | |
| 9.4 | | |
| — | |
| | |
| (309.6 | ) | |
| (638.0 | ) | |
| (1,369.9 | ) | |
| 198.6 | |
| Financing activities | |
| | | |
| | | |
| | | |
| | |
| Repayment of lease obligations | |
| (41.0 | ) | |
| (30.8 | ) | |
| (103.3 | ) | |
| (69.4 | ) |
| Issuance of long-term debt | |
| 430.2 | | |
| 1,069.0 | | |
| 2,490.9 | | |
| 3,032.1 | |
| Repayment of long-term debt | |
| (453.2 | ) | |
| (412.2 | ) | |
| (1,964.0 | ) | |
| (3,597.1 | ) |
| Proceeds from termination of hedged arrangements | |
| — | | |
| — | | |
| — | | |
| 17.3 | |
| Payment for termination of hedged arrangements | |
| — | | |
| — | | |
| (6.4 | ) | |
| — | |
| Payment of contingent purchase consideration and holdbacks | |
| (9.1 | ) | |
| (0.6 | ) | |
| (28.6 | ) | |
| (4.6 | ) |
| Repayment of Amortizing Notes | |
| — | | |
| — | | |
| — | | |
| (15.7 | ) |
| Dividends issued and paid | |
| (7.2 | ) | |
| (6.4 | ) | |
| (20.7 | ) | |
| (18.5 | ) |
| Payment of financing costs | |
| (8.8 | ) | |
| (11.2 | ) | |
| (17.5 | ) | |
| (26.2 | ) |
| Repayment of loan to related party | |
| (2.9 | ) | |
| (2.9 | ) | |
| (5.8 | ) | |
| (9.3 | ) |
| Contribution from non-controlling interest | |
| 18.2 | | |
| — | | |
| 18.2 | | |
| 8.1 | |
| | |
| (73.8 | ) | |
| 604.9 | | |
| 362.8 | | |
| (683.3 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| (Decrease) increase in cash | |
| (36.3 | ) | |
| 92.7 | | |
| (32.2 | ) | |
| 94.3 | |
| Changes due to foreign exchange revaluation of cash | |
| 1.6 | | |
| (0.7 | ) | |
| (4.0 | ) | |
| (2.2 | ) |
| Cash, beginning of period | |
| 134.2 | | |
| 82.2 | | |
| 135.7 | | |
| 82.1 | |
| Cash, end of period | |
$ | 99.5 | | |
$ | 174.2 | | |
$ | 99.5 | | |
$ | 174.2 | |
SUPPLEMENTAL DATA
You should read the following
information in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31,
2023, as well as our unaudited Interim Financial Statements and notes thereto for the three and nine months ended September 30,
2024.
Revenue Growth
The following tables summarize
the revenue growth in our segments for the periods indicated:
| | |
Three months ended September 30, 2024 | |
| | |
Pro forma excluding divestitures(1) | | |
| | |
| |
| | |
Contribution
from
Acquisitions | | |
Organic
Growth | | |
Foreign
Exchange | | |
Revenue
Growth | | |
Impact from
divestitures | | |
Total Revenue
Growth | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
| 0.6 | % | |
| 9.7 | % | |
| — | % | |
| 10.3 | % | |
| — | % | |
| 10.3 | % |
| USA | |
| 6.4 | | |
| 3.6 | | |
| 1.7 | | |
| 11.7 | | |
| (5.2 | ) | |
| 6.5 | |
| Solid Waste | |
| 4.5 | | |
| 5.6 | | |
| 1.2 | | |
| 11.3 | | |
| (3.6 | ) | |
| 7.7 | |
| Environmental Services | |
| 5.3 | | |
| (2.8 | ) | |
| 0.5 | | |
| 3.0 | | |
| — | | |
| 3.0 | |
| Total | |
| 4.7 | % | |
| 3.6 | % | |
| 1.0 | % | |
| 9.3 | % | |
| (2.7 | )% | |
| 6.6 | % |
| (1) | Reflects pro forma adjustments
to remove the contribution of three non-core U.S Solid Waste businesses that were divested
in Fiscal 2023 and one divestiture in the current year. |
| | |
Nine months ended September 30, 2024 | |
| | |
Pro forma excluding divestitures(1) | | |
| | |
| |
| | |
Contribution
from
Acquisitions | | |
Organic
Growth | | |
Foreign
Exchange | | |
Revenue
Growth | | |
Impact from
divestitures | | |
Total Revenue
Growth | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
| 0.7 | % | |
| 8.4 | % | |
| — | % | |
| 9.1 | % | |
| — | % | |
| 9.1 | % |
| USA | |
| 6.9 | | |
| 3.5 | | |
| 1.2 | | |
| 11.6 | | |
| (8.9 | ) | |
| 2.7 | |
| Solid Waste | |
| 4.9 | | |
| 5.1 | | |
| 0.8 | | |
| 10.8 | | |
| (6.2 | ) | |
| 4.6 | |
| Environmental Services | |
| 6.8 | | |
| (3.8 | ) | |
| 0.4 | | |
| 3.4 | | |
| — | | |
| 3.4 | |
| Total | |
| 5.3 | % | |
| 3.0 | % | |
| 0.7 | % | |
| 9.0 | % | |
| (4.7 | )% | |
| 4.3 | % |
| (1) | Reflects pro forma adjustments
to remove the contribution of three non-core U.S Solid Waste businesses that were divested
in Fiscal 2023 and one divestiture in the current year. |
Detail of Solid Waste Organic Growth
The following table summarizes the components
of our Solid Waste organic growth for the periods indicated:
| | |
Pro forma excluding
divestitures(1) | | |
| | |
| |
| | |
Three months
ended
September 30,
2024 | | |
Nine months
ended
September 30,
2024 | | |
Three months
ended
September 30,
2024 | | |
Nine months
ended
September 30,
2024 | |
| Price | |
| 6.0 | % | |
| 6.7 | % | |
| 5.8 | % | |
| 6.3 | % |
| Surcharges | |
| (0.5 | ) | |
| (0.7 | ) | |
| (0.5 | ) | |
| (0.6 | ) |
| Volume | |
| (0.8 | ) | |
| (1.8 | ) | |
| (0.7 | ) | |
| (1.7 | ) |
| Commodity price | |
| 0.9 | | |
| 0.9 | | |
| 0.8 | | |
| 0.8 | |
| Total Solid Waste organic growth | |
| 5.6 | % | |
| 5.1 | % | |
| 5.4 | % | |
| 4.8 | % |
| (1) | Reflects pro forma adjustments to
remove the contribution of three non-core U.S Solid Waste businesses that were divested in
Fiscal 2023 and one divestiture in the current year. |
Operating Segment
Results
The following tables summarize
our operating segment results for the periods indicated:
| | |
Three months ended September 30, 2024 | | |
Three months ended September 30, 2023 | |
| ($ millions) | |
Revenue | | |
Adjusted EBITDA(1) | | |
Adjusted EBITDA Margin(2) | | |
Revenue(3) | | |
Adjusted EBITDA(1)(4) | | |
Adjusted EBITDA Margin(2) | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
$ | 508.1 | | |
$ | 164.0 | | |
| 32.3 | % | |
$ | 460.5 | | |
$ | 129.9 | | |
| 28.2 | % |
| USA | |
| 1,046.1 | | |
| 377.2 | | |
| 36.1 | | |
| 982.5 | | |
| 322.9 | | |
| 32.9 | |
| Solid Waste | |
| 1,554.2 | | |
| 541.2 | | |
| 34.8 | | |
| 1,443.0 | | |
| 452.8 | | |
| 31.4 | |
| Environmental Services | |
| 460.5 | | |
| 148.1 | | |
| 32.2 | | |
| 447.0 | | |
| 138.9 | | |
| 31.1 | |
| Corporate | |
| — | | |
| (63.4 | ) | |
| — | | |
| — | | |
| (61.4 | ) | |
| — | |
| Total | |
$ | 2,014.7 | | |
$ | 625.9 | | |
| 31.1 | % | |
$ | 1,890.0 | | |
$ | 530.3 | | |
| 28.1 | % |
| | |
Nine months ended September 30, 2024 | | |
Nine months ended September 30, 2023 | |
| ($ millions) | |
Revenue | | |
Adjusted EBITDA(1) | | |
Adjusted EBITDA Margin(2) | | |
Revenue(5) | | |
Adjusted EBITDA(1)(6) | | |
Adjusted EBITDA Margin(2) | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
$ | 1,437.5 | | |
$ | 427.4 | | |
| 29.7 | % | |
$ | 1,318.0 | | |
$ | 363.9 | | |
| 27.6 | % |
| USA | |
| 3,130.1 | | |
| 1,068.7 | | |
| 34.1 | | |
| 3,048.9 | | |
| 977.8 | | |
| 32.1 | |
| Solid Waste | |
| 4,567.6 | | |
| 1,496.1 | | |
| 32.8 | | |
| 4,366.9 | | |
| 1,341.7 | | |
| 30.7 | |
| Environmental Services | |
| 1,308.5 | | |
| 371.1 | | |
| 28.4 | | |
| 1,265.8 | | |
| 352.6 | | |
| 27.9 | |
| Corporate | |
| — | | |
| (194.5 | ) | |
| — | | |
| — | | |
| (182.8 | ) | |
| — | |
| Total | |
$ | 5,876.1 | | |
$ | 1,672.7 | | |
| 28.5 | % | |
$ | 5,632.7 | | |
$ | 1,511.5 | | |
| 26.8 | % |
| (1) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (2) | See “Non-IFRS Measures”
for an explanation of the composition of non-IFRS measures. |
| (3) | Includes reclassification
of $59.5 million into Environmental Services comprised of $13.1 million from Solid Waste
Canada and $46.4 million from Solid Waste USA. |
| (4) | Includes reclassification
of $19.0 million into Environmental Services comprised of $3.8 million from Solid Waste Canada
and $15.2 million from Solid Waste USA. |
| (5) | Includes reclassification
of $174.1 million into Environmental Services comprised of $33.9 million from Solid Waste
Canada and $140.2 million from Solid Waste USA. |
| (6) | Includes reclassification
of $59.0 million into Environmental Services comprised of $7.1 million from Solid Waste Canada
and $51.9 million from Solid Waste USA. |
Net Leverage
The following table presents
the calculation of Net Leverage as at the dates indicated:
| ($ millions) | |
September 30, 2024 | | |
December 31, 2023 | |
| Total long-term debt, net of derivative asset(1) | |
$ | 9,507.3 | | |
$ | 8,816.9 | |
| Deferred finance costs and other adjustments | |
| (41.2 | ) | |
| (17.7 | ) |
| Total long-term debt excluding deferred finance costs and other adjustments | |
$ | 9,548.5 | | |
$ | 8,834.6 | |
| Less: cash | |
| (99.5 | ) | |
| (135.7 | ) |
| | |
| 9,449.0 | | |
| 8,698.9 | |
| | |
| | | |
| | |
| Trailing twelve months Adjusted EBITDA(2) | |
| 2,165.0 | | |
| 2,003.7 | |
| Run-Rate EBITDA Adjustments(3) | |
| 168.0 | | |
| 98.3 | |
| Run-Rate EBITDA(3) | |
$ | 2,333.0 | | |
$ | 2,102.0 | |
| | |
| | | |
| | |
| Net Leverage(2) | |
| 4.05 | x | |
| 4.14 | x |
| (1) | Total long-term debt includes
derivative asset reclassified for financial statement presentation purposes to other long-term
assets, refer to Note 7 in our unaudited Interim Financial Statements. |
| (2) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (3) | See “Non-IFRS Measures”
for an explanation of the composition of non-IFRS measures and ratios. |
Shares Outstanding
The following table presents
the total shares outstanding as at the date indicated:
| | |
September 30, 2024 | |
| Subordinate voting shares | |
| 381,570,096 | |
| Multiple voting shares | |
| 11,812,964 | |
| Basic shares outstanding | |
| 393,383,060 | |
| Effect of dilutive instruments | |
| 11,921,233 | |
| Series A Preferred Shares (as converted) | |
| 11,452,541 | |
| Series B Preferred Shares (as converted) | |
| 8,072,002 | |
| Diluted shares outstanding | |
| 424,828,836 | |
NON-IFRS RECONCILIATION SCHEDULE
Adjusted EBITDA
The following tables provide
a reconciliation of our net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated:
| ($ millions) | |
Three months ended
September 30, 2024 | | |
Three months ended September 30, 2023 | |
| Net income | |
$ | 110.6 | | |
$ | 18.3 | |
| Add: | |
| | | |
| | |
| Interest and other finance costs | |
| 169.8 | | |
| 137.2 | |
| Depreciation of property and equipment | |
| 289.0 | | |
| 242.3 | |
| Amortization of intangible assets | |
| 110.9 | | |
| 106.9 | |
| Income tax expense (recovery) | |
| 20.5 | | |
| (18.0 | ) |
| EBITDA | |
| 700.8 | | |
| 486.7 | |
| Add: | |
| | | |
| | |
| (Gain) loss on foreign exchange(1) | |
| (68.1 | ) | |
| 46.9 | |
| Gain on sale of property and equipment | |
| (2.4 | ) | |
| (6.7 | ) |
| Share of net income of investments accounted for using the equity method(3) | |
| (12.2 | ) | |
| (34.0 | ) |
| Share-based payments(4) | |
| 18.0 | | |
| 26.5 | |
| Loss on divestiture(5) | |
| 0.5 | | |
| — | |
| Transaction costs(6) | |
| 7.0 | | |
| 22.3 | |
| Acquisition, rebranding and other integration costs(7) | |
| 2.0 | | |
| 3.8 | |
| Founder/CEO remuneration(8) | |
| 5.4 | | |
| — | |
| Other | |
| (25.1 | ) | |
| (15.2 | ) |
| Adjusted EBITDA | |
$ | 625.9 | | |
$ | 530.3 | |
| ($ millions) | |
Nine months ended
September 30, 2024 | | |
Nine months ended
September 30, 2023 | |
| Net (loss) income | |
$ | (538.2 | ) | |
$ | 94.3 | |
| Add: | |
| | | |
| | |
| Interest and other finance costs | |
| 509.7 | | |
| 466.7 | |
| Depreciation of property and equipment | |
| 831.3 | | |
| 719.9 | |
| Amortization of intangible assets | |
| 330.2 | | |
| 379.7 | |
| Income tax (recovery) expense | |
| (90.4 | ) | |
| 178.8 | |
| EBITDA | |
| 1,042.6 | | |
| 1,839.4 | |
| Add: | |
| | | |
| | |
| Loss (gain) on foreign exchange(1) | |
| 12.2 | | |
| (4.6 | ) |
| Gain on sale of property and equipment | |
| (4.3 | ) | |
| (13.1 | ) |
| Mark-to-market loss on Purchase Contracts(2) | |
| — | | |
| 104.3 | |
| Share of net loss of investments accounted for using the equity method(3) | |
| 13.8 | | |
| 48.9 | |
| Share-based payments(4) | |
| 90.6 | | |
| 56.7 | |
| Loss (gain) on divestiture(5) | |
| 494.6 | | |
| (580.5 | ) |
| Transaction costs(6) | |
| 29.3 | | |
| 63.9 | |
| Acquisition, rebranding and other integration costs(7) | |
| 4.3 | | |
| 14.0 | |
| Founder/CEO remuneration(8) | |
| 15.6 | | |
| — | |
| Other | |
| (26.0 | ) | |
| (17.5 | ) |
| Adjusted EBITDA | |
$ | 1,672.7 | | |
$ | 1,511.5 | |
| (1) | Consists of (i) non-cash
gains and losses on foreign exchange and interest rate swaps entered into in connection with
our debt instruments and (ii) gains and losses attributable to foreign exchange rate
fluctuations. |
| (2) | This is a non-cash item that
consists of the fair value “mark-to-market” adjustment on the Purchase Contracts. |
| (3) | Excludes share of net income
of investments accounted for using the equity method for RNG projects. |
| (4) | This is a non-cash item and
consists of the amortization of the estimated fair value of share-based payments granted
to certain members of management under share-based payment plans. |
| (5) | Consists of loss or gain resulting
from the divestiture of certain assets and non-core U.S. Solid Waste businesses. |
| (6) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (7) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (8) | Consists of cash payment to
the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the nine months ended September 30, 2023 as reflected in “All Other
Compensation” in the 2024 Management Information Circular. |
Adjusted Net Income
The following tables provide
a reconciliation of our net income (loss) to Adjusted Net Income for the periods indicated:
| ($ millions) | |
Three months ended
September 30, 2024 | | |
Three months ended
September 30, 2023 | |
| Net income | |
$ | 110.6 | | |
$ | 18.3 | |
| Add: | |
| | | |
| | |
| Amortization of intangible assets(1) | |
| 110.9 | | |
| 106.9 | |
| ARO discount rate depreciation adjustment(2) | |
| — | | |
| 4.8 | |
| Amortization of deferred financing costs | |
| 5.1 | | |
| 4.3 | |
| (Gain) loss on foreign exchange(3) | |
| (68.1 | ) | |
| 46.9 | |
| Share of net income of investments accounted for using the equity method(5) | |
| (12.2 | ) | |
| (34.0 | ) |
| Loss on divestiture(7) | |
| 0.5 | | |
| — | |
| Transaction costs(8) | |
| 7.0 | | |
| 22.3 | |
| Acquisition, rebranding and other integration costs(9) | |
| 2.0 | | |
| 3.8 | |
| Founder/CEO remuneration(10) | |
| 5.4 | | |
| — | |
| Other | |
| (25.1 | ) | |
| (15.2 | ) |
| Tax effect(11) | |
| (10.0 | ) | |
| (41.3 | ) |
| Adjusted Net Income | |
$ | 126.1 | | |
$ | 116.8 | |
| Adjusted income per share, basic and diluted | |
$ | 0.33 | | |
$ | 0.32 | |
| ($ millions) | |
Nine months ended
September 30, 2024 | | |
Nine months ended
September 30, 2023 | |
| Net (loss) income | |
$ | (538.2 | ) | |
$ | 94.3 | |
| Add: | |
| | | |
| | |
| Amortization of intangible assets(1) | |
| 330.2 | | |
| 379.7 | |
| ARO discount rate depreciation adjustment(2) | |
| 4.3 | | |
| 4.8 | |
| Incremental depreciation of property and equipment due to recapitalization | |
| — | | |
| 7.5 | |
| Amortization of deferred financing costs | |
| 17.1 | | |
| 13.5 | |
| Loss (gain) on foreign exchange(3) | |
| 12.2 | | |
| (4.6 | ) |
| Mark-to-market loss on Purchase Contracts(4) | |
| — | | |
| 104.3 | |
| Share of net loss of investments accounted for using the equity method(5) | |
| 13.8 | | |
| 48.9 | |
| Loss on termination of hedged arrangements(6) | |
| 17.2 | | |
| — | |
| Loss (gain) on divestiture(7) | |
| 494.6 | | |
| (580.5 | ) |
| Transaction costs(8) | |
| 29.3 | | |
| 63.9 | |
| Acquisition, rebranding and other integration costs(9) | |
| 4.3 | | |
| 14.0 | |
| Founder/CEO remuneration(10) | |
| 15.6 | | |
| — | |
| TEU amortization expense | |
| — | | |
| 0.1 | |
| Other | |
| (26.0 | ) | |
| (17.5 | ) |
| Tax effect(11) | |
| (138.7 | ) | |
| 213.3 | |
| Adjusted Net Income | |
$ | 235.7 | | |
$ | 341.7 | |
| Adjusted income per share, basic | |
$ | 0.63 | | |
$ | 0.93 | |
| Adjusted income per share, diluted | |
$ | 0.63 | | |
$ | 0.92 | |
| (1) | This is a non-cash item and
consists of the amortization of intangible assets such as customer lists, municipal contracts,
non-compete agreements, trade name and other licenses. |
| (2) | This is a non-cash item and
consists of depreciation expense related to the difference between the ARO calculated using
the credit adjusted risk-free discount rate required for measurement of the ARO through purchase
accounting compared to the risk-free discount rate required for quarterly valuations. |
| (3) | Consists of (i) non-cash gains
and losses on foreign exchange and interest rate swaps entered into in connection with our
debt instruments and (ii) gains and losses attributable to foreign exchange rate fluctuations. |
| (4) | This is a non-cash item that
consists of the fair value “mark-to-market” adjustment on the Purchase Contracts. |
| (5) | Excludes share of net income
of investments accounted for using the equity method for RNG projects. |
| (6) | Consists of gains and losses
on the termination of hedged arrangements associated with the 4.250% 2025 Secured Notes and
the 4.750% 2029 Notes. |
| (7) | Consists of gains and losses
resulting from the divestiture of certain assets and non-core U.S. Solid Waste businesses. |
| (8) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (9) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (10) | Consists of cash payment
to the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the nine months ended September 30, 2023 as reflected in “All Other
Compensation” in the 2024 Management Information Circular. |
| (11) | Consists of the tax effect
of the adjustments to net loss (loss). |
Adjusted Cash Flows from Operating Activities
and Adjusted Free Cash Flow
The
following tables provide a reconciliation of our cash flows from operating activities to Adjusted Cash Flows from Operating Activities
and Adjusted Free Cash Flow for the periods indicated:
| ($ millions) | |
Three months ended
September 30, 2024 | | |
Three months ended
September 30, 2023 | |
| Cash flows from operating activities | |
$ | 347.1 | | |
$ | 125.8 | |
| Add: | |
| | | |
| | |
| Transaction costs(1) | |
| 7.0 | | |
| 22.3 | |
| Acquisition, rebranding and other integration costs(2) | |
| 2.0 | | |
| 3.8 | |
| Founder/CEO remuneration(3) | |
| 5.4 | | |
| — | |
| Cash taxes related to divestitures | |
| 15.0 | | |
| 248.6 | |
| Distribution received from joint ventures | |
| 1.1 | | |
| — | |
| Adjusted Cash Flows from Operating Activities | |
| 377.6 | | |
| 400.5 | |
| Proceeds on disposal of assets and other | |
| 32.5 | | |
| 30.6 | |
| Purchase of property and equipment | |
| (281.1 | ) | |
| (276.3 | ) |
| Adjusted Free Cash Flow (including incremental growth investments) | |
| 129.0 | | |
| 154.8 | |
| Incremental growth investments(5) | |
| 96.4 | | |
| 121.2 | |
| Adjusted Free Cash Flow | |
$ | 225.4 | | |
$ | 276.0 | |
| ($ millions) | |
Nine months ended September 30, 2024 | | |
Nine months ended September 30, 2023 | |
| Cash flows from operating activities | |
$ | 974.9 | | |
$ | 579.0 | |
| Add: | |
| | | |
| | |
| Transaction costs(1) | |
| 29.3 | | |
| 63.9 | |
| Acquisition, rebranding and other integration costs(2) | |
| 4.3 | | |
| 14.0 | |
| Founder/CEO remuneration(3) | |
| 15.6 | | |
| — | |
| Cash interest paid on TEUs(4) | |
| — | | |
| 0.2 | |
| Cash taxes related to divestitures | |
| 15.0 | | |
| 248.6 | |
| Distribution received from joint ventures | |
| 9.4 | | |
| — | |
| Adjusted Cash Flows from Operating Activities | |
| 1,048.5 | | |
| 905.7 | |
| Proceeds on disposal of assets and other | |
| 40.5 | | |
| 51.0 | |
| Purchase of property and equipment | |
| (875.8 | ) | |
| (823.6 | ) |
| Adjusted Free Cash Flow (including incremental growth investments) | |
| 213.2 | | |
| 133.1 | |
| Incremental growth investments(5) | |
| 247.0 | | |
| 102.7 | |
| Adjusted Free Cash Flow | |
$ | 460.2 | | |
$ | 235.8 | |
| (1) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future, and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (2) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (3) | Consists of cash payment to
the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the nine months ended September 30, 2023 as reflected in “All Other
Compensation” in the 2024 Management Information Circular. |
| (4) | Consists of interest paid
in cash on the Amortizing Notes. |
| (5) | Consists of incremental sustainability
related capital projects, primarily related to recycling and RNG. |
GFL Environmental (NYSE:GFL)
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