- Price-led organic growth, strong operational execution, and
continuing acquisition activity drive strong start to 2023
- Revenue of $1.901 billion, up
15.4%
- Net income(a) of $197.8 million and adjusted
EBITDA(b) of $566.9
million
- Net income and adjusted net income(b)
of $0.77 and $0.89 per share, respectively
- Net cash provided by operating activities of $442.4 million and adjusted free cash
flow(b) of $274.0
million
- On track to achieve full year outlook as provided in
February, with potential upside from any additional acquisitions,
increases in recycled commodities and renewable fuels values, or
reduction of inflationary pressures
TORONTO, April 26,
2023 /PRNewswire/ -- Waste Connections, Inc.
(TSX/NYSE: WCN) ("Waste Connections" or the "Company") today
announced its results for the first quarter of 2023.
"Record solid waste pricing growth, strong operational execution
and continuing acquisition activity in the first quarter provided a
strong start to the year. Q1 was recognized to be a difficult
year-over-year comparison given the precipitous decline in resource
recovery values during the second half of 2022, and results in the
period were further affected by weather-related impacts to solid
waste roll-off activity and landfill volumes, particularly on the
West Coast. Underlying adjusted EBITDA(b) margins
were in line with our expectations, but acquisitions completed
since the year-ago period were 30 basis points dilutive to reported
margins, or more than 20 basis points higher than expected, given
the disproportionate weather-related impacts on West Coast
acquisitions," said Ronald J.
Mittelstaedt, President and Chief Executive Officer.
Mr. Mittelstaedt added, "Continued visibility on pricing,
improving trends in labor availability and retention, and recent
normalization of weather patterns position us to deliver the full
year outlook we provided in February. And as we also noted
then, upside potential to this outlook remains from any additional
acquisitions, increases in recycled commodities and renewable fuels
values, or reduction of inflationary pressures. We've already
closed approximately $45 million of
acquired revenue year-to-date, and currently expect that pace of
activity to continue throughout the year."
Q1 2023 Results
Revenue in the first quarter totaled $1.901 billion, up from $1.646 billion in the year ago period.
Operating income was $314.7 million,
which included $4.3 million primarily
in transaction-related expenses and impairments and other operating
items. This compares to operating income of $273.9 million in the first quarter of 2022,
which included $6.6 million primarily
related to transaction-related expenses. Net income in the
first quarter was $197.8 million, or
$0.77 per share on a diluted basis of
258.0 million shares. In the year ago period, the Company
reported net income of $180.3
million, or $0.69 per share on
a diluted basis of 259.6 million shares.
Adjusted net income(b) in the first quarter was
$230.4 million, or $0.89 per diluted share, up from $213.4 million, or $0.82 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the first quarter
was $566.9 million, as compared to
$502.1 million in the prior year
period. Adjusted net income, adjusted net income per diluted
share and adjusted EBITDA, all non-GAAP measures, primarily exclude
impairments and transaction-related items, as reflected in the
detailed reconciliations in the attached tables.
----------------------------------------------------------------------------------------------------------------------------------------------------
|
(a)
|
All references to "Net income" refer to the financial
statement line item "Net income attributable to Waste
Connections".
|
(b)
|
A non-GAAP measure;
see accompanying Non-GAAP Reconciliation Schedule.
|
Q1 2023 Earnings Conference Call
Waste Connections will be hosting a conference call related to
first quarter earnings on April
27th at 8:30 A.M. Eastern
Time. A live audio webcast of the conference call can
be accessed by visiting investors.wasteconnections.com and
selecting "News & Events" from the website menu. Alternatively,
conference call participants can preregister by clicking
here. Registered participants will receive dial-in
instructions and a personalized code for entry to the conference
call. A replay of the conference call will be available until
May 4, 2023, by calling 877-344-7529
(within North America) or
412-317-0088 (international) and entering Passcode
#6074895.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
April 27th, providing the
Company's second quarter 2023 outlook for revenue, price plus
volume growth for solid waste, and adjusted
EBITDA(b).
About Waste Connections
Waste Connections is an integrated solid waste services company
that provides non-hazardous waste collection, transfer and disposal
services, along with resource recovery primarily through recycling
and renewable fuels generation. The Company serves more than
eight million residential, commercial and industrial customers in
mostly exclusive and secondary markets across 43 states in the U.S.
and six provinces in Canada. Waste Connections also provides
non-hazardous oilfield waste treatment, recovery and disposal
services in several basins across the U.S., as well as intermodal
services for the movement of cargo and solid waste containers in
the Pacific Northwest. For more information, visit Waste
Connections at wasteconnections.com.
Environmental, Social and Governance
Waste Connections views its Environmental, Social and Governance
("ESG") efforts as integral to its business, with initiatives
consistent with its objective of long-term value creation. In
2020, the Company introduced long-term, aspirational ESG targets
and committed $500 million to the
advancement of such sustainability targets. These investments
primarily focus on reducing emissions, increasing resource recovery
of both recyclable commodities and clean energy fuels, reducing
reliance on off-site disposal for landfill leachate, further
improving safety and enhancing employee engagement. The
Company's 2022 Sustainability Report provides progress updates on
its targets and investments towards their achievement, and
introduces new emissions reduction targets. For more
information, visit wasteconnections.com/sustainability.
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 2023 financial results,
outlook and related assumptions, 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 / (832)
442-2153
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
NET INCOME
THREE MONTHS ENDED MARCH 31, 2022 AND 2023
(Unaudited)
(in thousands of U.S. dollars, except
share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2022
|
|
2023
|
|
|
|
|
|
Revenues
|
|
$
|
1,646,255
|
|
$
|
1,900,503
|
Operating
expenses:
|
|
|
|
|
|
|
Cost of
operations
|
|
|
989,518
|
|
|
1,146,941
|
Selling, general and
administrative
|
|
|
163,414
|
|
|
193,667
|
Depreciation
|
|
|
179,950
|
|
|
204,059
|
Amortization of
intangibles
|
|
|
37,635
|
|
|
39,282
|
Impairments and other
operating items
|
|
|
1,878
|
|
|
1,865
|
Operating
income
|
|
|
273,860
|
|
|
314,689
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(41,324)
|
|
|
(68,353)
|
Interest
income
|
|
|
137
|
|
|
2,715
|
Other income (expense),
net
|
|
|
(3,466)
|
|
|
3,174
|
Income before income
tax provision
|
|
|
229,207
|
|
|
252,225
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(48,839)
|
|
|
(54,389)
|
Net income
|
|
|
180,368
|
|
|
197,836
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(44)
|
|
|
(23)
|
Net income attributable
to Waste Connections
|
|
$
|
180,324
|
|
$
|
197,813
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
Basic
|
|
$
|
0.70
|
|
$
|
0.77
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.69
|
|
$
|
0.77
|
|
|
|
|
|
|
|
Shares used in the per
share calculations:
|
|
|
|
|
|
|
Basic
|
|
|
258,946,933
|
|
|
257,372,942
|
Diluted
|
|
|
259,560,983
|
|
|
257,988,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.23
|
|
$
|
0.255
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands of U.S. dollars, except
share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
March 31,
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
78,637
|
|
$
|
133,860
|
|
Accounts receivable,
net of allowance for credit losses of $22,939 and $22,239 at
December 31, 2022 and March 31, 2023, respectively
|
|
|
833,862
|
|
|
814,680
|
|
Prepaid expenses and
other current assets
|
|
|
205,146
|
|
|
185,718
|
|
Total current
assets
|
|
|
1,117,645
|
|
|
1,134,258
|
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
102,727
|
|
|
106,625
|
|
Restricted
investments
|
|
|
68,099
|
|
|
74,358
|
|
Property and equipment,
net
|
|
|
6,950,915
|
|
|
6,956,620
|
|
Operating lease
right-of-use assets
|
|
|
192,506
|
|
|
195,030
|
|
Goodwill
|
|
|
6,902,297
|
|
|
6,940,567
|
|
Intangible assets,
net
|
|
|
1,673,917
|
|
|
1,697,193
|
|
Other assets,
net
|
|
|
126,497
|
|
|
122,443
|
|
Total
assets
|
|
$
|
17,134,603
|
|
$
|
17,227,094
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
638,728
|
|
$
|
526,229
|
|
Book
overdraft
|
|
|
15,645
|
|
|
21,067
|
|
Deferred
revenue
|
|
|
325,002
|
|
|
336,613
|
|
Accrued
liabilities
|
|
|
431,247
|
|
|
390,195
|
|
Current portion of
operating lease liabilities
|
|
|
35,170
|
|
|
34,078
|
|
Current portion of
contingent consideration
|
|
|
60,092
|
|
|
64,489
|
|
Current portion of
long-term debt and notes payable
|
|
|
6,759
|
|
|
10,513
|
|
Total current
liabilities
|
|
|
1,512,643
|
|
|
1,383,184
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
6,890,149
|
|
|
6,921,839
|
|
Long-term portion of
operating lease liabilities
|
|
|
165,462
|
|
|
169,051
|
|
Long-term portion of
contingent consideration
|
|
|
21,323
|
|
|
21,333
|
|
Deferred income
taxes
|
|
|
1,013,742
|
|
|
1,041,152
|
|
Other long-term
liabilities
|
|
|
417,640
|
|
|
451,571
|
|
Total
liabilities
|
|
|
10,020,959
|
|
|
9,988,130
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
257,211,175 shares issued and 257,145,716 shares outstanding at
December 31, 2022; 257,547,090 shares
issued and 257,487,434 shares outstanding at
March 31, 2023
|
|
|
3,271,958
|
|
|
3,274,564
|
|
Additional paid-in
capital
|
|
|
244,076
|
|
|
238,484
|
|
Accumulated other
comprehensive loss
|
|
|
(56,830)
|
|
|
(60,572)
|
|
Treasury shares: 65,459
and 59,656 shares at December 31, 2022 and March 31, 2023,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
3,649,494
|
|
|
3,781,519
|
|
Total Waste
Connections' equity
|
|
|
7,108,698
|
|
|
7,233,995
|
|
Noncontrolling interest
in subsidiaries
|
|
|
4,946
|
|
|
4,969
|
|
Total
equity
|
|
|
7,113,644
|
|
|
7,238,964
|
|
Total
liabilities and equity
|
|
$
|
17,134,603
|
|
$
|
17,227,094
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
THREE MONTHS ENDED MARCH 31, 2022 AND
2023
(Unaudited)
(in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
|
2022
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
180,368
|
|
$
|
197,836
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
2,090
|
|
|
1,910
|
|
Depreciation
|
|
|
179,950
|
|
|
204,059
|
|
Amortization of
intangibles
|
|
|
37,635
|
|
|
39,282
|
|
Deferred income taxes,
net of acquisitions
|
|
|
38,378
|
|
|
28,229
|
|
Current period
provision for expected credit losses
|
|
|
3,022
|
|
|
2,247
|
|
Amortization of debt
issuance costs
|
|
|
1,195
|
|
|
1,621
|
|
Share-based
compensation
|
|
|
14,635
|
|
|
18,469
|
|
Interest
accretion
|
|
|
4,448
|
|
|
4,884
|
|
Adjustments to
contingent consideration
|
|
|
(52)
|
|
|
(637)
|
|
Other
|
|
|
382
|
|
|
(2,937)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
(21,154)
|
|
|
(52,605)
|
|
Net cash provided by
operating activities
|
|
|
440,897
|
|
|
442,358
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments
for acquisitions, net of cash acquired
|
|
|
(355,212)
|
|
|
(144,611)
|
|
Capital expenditures
for property and equipment
|
|
|
(152,318)
|
|
|
(175,786)
|
|
Proceeds from disposal
of assets
|
|
|
15,012
|
|
|
1,260
|
|
Other
|
|
|
2,637
|
|
|
1,378
|
|
Net cash used in
investing activities
|
|
|
(489,881)
|
|
|
(317,759)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
1,305,288
|
|
|
336,649
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(505,597)
|
|
|
(320,027)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(3,571)
|
|
|
(1,319)
|
|
Change in book
overdraft
|
|
|
87
|
|
|
5,421
|
|
Payments for
repurchase of common shares
|
|
|
(424,999)
|
|
|
-
|
|
Payments for cash
dividends
|
|
|
(59,391)
|
|
|
(65,788)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(17,236)
|
|
|
(22,966)
|
|
Debt issuance
costs
|
|
|
(4,382)
|
|
|
-
|
|
Proceeds from issuance
of shares under employee share purchase plan
|
|
|
1,554
|
|
|
1,841
|
|
Proceeds from sale of
common shares held in trust
|
|
|
305
|
|
|
765
|
|
Net cash provided by
(used in) financing activities
|
|
|
292,058
|
|
|
(65,424)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
595
|
|
|
(54)
|
|
|
|
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
243,669
|
|
|
59,121
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
|
219,615
|
|
|
181,364
|
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
|
463,284
|
|
$
|
240,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL STATISTICS
(in thousands of U.S. dollars, except where noted)
Solid Waste Internal Growth: The following table
reflects a breakdown of the components of our solid waste internal
growth for the three months ended March 31,
2023:
|
|
Three months
ended
March 31,
2023
|
Core Price
|
|
|
11.0 %
|
Surcharges
|
|
|
0.8 %
|
Volume
|
|
|
(1.3 %)
|
Recycling
|
|
|
(1.9 %)
|
Foreign Exchange
Impact
|
|
|
(0.9 %)
|
Total
|
|
|
7.7 %
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
March 31, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31, 2022
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,199,452
|
|
$
|
(2,883)
|
|
$
|
1,196,569
|
|
72.7
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
517,722
|
|
|
(213,019)
|
|
|
304,703
|
|
18.5
|
%
|
Solid Waste
Recycling
|
|
|
63,094
|
|
|
(2,573)
|
|
|
60,521
|
|
3.7
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
43,555
|
|
|
(2,732)
|
|
|
40,823
|
|
2.5
|
%
|
Intermodal and
Other
|
|
|
45,693
|
|
|
(2,054)
|
|
|
43,639
|
|
2.6
|
%
|
Total
|
|
$
|
1,869,516
|
|
$
|
(223,261)
|
|
$
|
1,646,255
|
|
100.0
|
%
|
|
|
Three months
ended March 31, 2023
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,434,647
|
|
$
|
(5,514)
|
|
$
|
1,429,133
|
|
75.2
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
616,954
|
|
|
(262,445)
|
|
|
354,509
|
|
18.7
|
%
|
Solid Waste
Recycling
|
|
|
31,301
|
|
|
(623)
|
|
|
30,678
|
|
1.6
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
51,759
|
|
|
(3,624)
|
|
|
48,135
|
|
2.5
|
%
|
Intermodal and
Other
|
|
|
38,212
|
|
|
(164)
|
|
|
38,048
|
|
2.0
|
%
|
Total
|
|
$
|
2,172,873
|
|
$
|
(272,370)
|
|
$
|
1,900,503
|
|
100.0
|
%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three month periods ended March 31,
2022 and 2023:
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
2022
|
|
2023
|
Acquisitions,
net
|
|
$
|
110,007
|
|
$
|
132,109
|
ADDITIONAL STATISTICS (continued)
(in
thousands of U.S. dollars, except where noted)
Other Cash Flow Items: The following table reflects cash
interest and cash taxes for the three month periods ended
March 31, 2022 and 2023:
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
2022
|
|
2023
|
Cash Interest
Paid
|
|
$
|
32,159
|
|
$
|
55,131
|
Cash Taxes
Paid
|
|
|
17,389
|
|
|
11,326
|
Debt to Book Capitalization at March
31, 2023: 49%
Internalization for the three months ended
March 31, 2023: 56%
Days Sales Outstanding for the three months ended
March 31, 2023: 39 (23 net
of deferred revenue)
Share Information for the three months ended March 31, 2023:
|
|
|
Basic shares
outstanding
|
|
257,372,942
|
Dilutive effect of
equity-based awards
|
|
616,029
|
Diluted shares
outstanding
|
|
257,988,971
|
NON-GAAP RECONCILIATION SCHEDULE
(in
thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA, a non-GAAP financial measure, is provided
supplementally because it is widely used by investors as a
performance and valuation measure in the solid waste
industry. Management uses adjusted EBITDA as one of the
principal measures to evaluate and monitor the ongoing financial
performance of Waste Connections' operations. Waste
Connections defines adjusted EBITDA as net income attributable to
Waste Connections, plus or minus net income (loss) attributable to
noncontrolling interests, plus income tax provision, plus interest
expense, less interest income, plus depreciation and amortization
expense, plus closure and post-closure accretion expense, plus or
minus any loss or gain on impairments and other operating items,
plus other expense, less other income. Waste Connections
further adjusts this calculation to exclude the effects of other
items management believes impact the ability to assess the
operating performance of its business. This measure is not a
substitute for, and should be used in conjunction with, GAAP
financial measures. Other companies may calculate adjusted
EBITDA differently.
|
|
Three months
ended
March 31,
|
|
|
2022
|
|
2023
|
Net income attributable
to Waste Connections
|
|
$
|
180,324
|
|
$
|
197,813
|
Plus: Net income
attributable to noncontrolling interests
|
|
|
44
|
|
|
23
|
Plus: Income tax
provision
|
|
|
48,839
|
|
|
54,389
|
Plus: Interest
expense
|
|
|
41,324
|
|
|
68,353
|
Less: Interest
income
|
|
|
(137)
|
|
|
(2,715)
|
Plus: Depreciation and
amortization
|
|
|
217,585
|
|
|
243,341
|
Plus: Closure and
post-closure accretion
|
|
|
4,096
|
|
|
4,520
|
Plus: Impairments and
other operating items
|
|
|
1,878
|
|
|
1,865
|
Plus/(Less): Other
expense (income), net
|
|
|
3,466
|
|
|
(3,174)
|
Adjustments:
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
4,540
|
|
|
2,081
|
Plus: Fair value
changes to equity awards(b)
|
|
|
161
|
|
|
373
|
Adjusted
EBITDA
|
|
$
|
502,120
|
|
$
|
566,869
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.5 %
|
|
|
29.8 %
|
____________________________
|
(a)
|
Reflects the addback of
acquisition-related transaction costs.
|
(b)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, is
provided supplementally because it is widely used by investors as a
liquidity measure in the solid waste industry. Waste Connections
calculates 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 periodic distributions to noncontrolling
interests. Waste Connections further adjusts this calculation to
exclude the effects of items management believes impact the ability
to evaluate the liquidity of its business operations. This measure
is not a substitute for, and should be used in conjunction with,
GAAP liquidity or financial measures. Other companies may calculate
adjusted free cash flow differently.
|
|
Three months
ended
March 31,
|
|
|
2022
|
|
2023
|
Net cash provided by
operating activities
|
|
$
|
440,897
|
|
$
|
442,358
|
Plus: Change in book
overdraft
|
|
|
87
|
|
|
5,421
|
Plus: Proceeds from
disposal of assets
|
|
|
15,012
|
|
|
1,260
|
Less: Capital
expenditures for property and equipment
|
|
|
(152,318)
|
|
|
(175,786)
|
Adjustments:
|
|
|
|
|
|
|
Cash
received for divestitures(a)
|
|
|
(5,671)
|
|
|
-
|
Transaction-related
expenses(b)
|
|
|
23,404
|
|
|
1,249
|
Pre-existing
Progressive Waste share-based grants(c)
|
|
|
76
|
|
|
(2)
|
Tax
effect(d)
|
|
|
(1,110)
|
|
|
(519)
|
Adjusted free cash
flow
|
|
$
|
320,377
|
|
$
|
273,981
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
19.5 %
|
|
|
14.4 %
|
___________________________
|
(a)
|
Reflects the
elimination of cash received in conjunction with the divestiture of
certain operations.
|
(b)
|
Reflects the addback of
acquisition-related transaction costs and the settlement of an
acquired tax liability.
|
(c)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(d)
|
The aggregate tax
effect of footnotes (a) through (c) is calculated based on the
applied tax rates for the respective periods.
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except per share
amounts)
Reconciliation of Adjusted Net Income attributable to Waste
Connections and Adjusted Net Income per Diluted Share attributable
to Waste Connections:
Adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections, both non-GAAP financial measures, are provided
supplementally because they are widely used by investors as
valuation measures in the solid waste industry. Management
uses adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections as one of the principal measures to evaluate and
monitor the ongoing financial performance of Waste Connections'
operations. Waste Connections provides adjusted net income
attributable to Waste Connections to exclude the effects of items
management believes impact the comparability of operating results
between periods. Adjusted net income attributable to Waste
Connections has limitations due to the fact that it excludes items
that have an impact on the Company's financial condition and
results of operations. Adjusted net income attributable to
Waste Connections and adjusted net income per diluted share
attributable to Waste Connections are not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate these non-GAAP financial measures
differently.
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
2022
|
|
2023
|
Reported net income
attributable to Waste Connections
|
|
$
|
180,324
|
|
$
|
197,813
|
Adjustments:
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
37,635
|
|
|
39,282
|
Impairments and other
operating items(b)
|
|
|
1,878
|
|
|
1,865
|
Transaction-related
expenses(c)
|
|
|
4,540
|
|
|
2,081
|
Fair value changes to
equity awards(d)
|
|
|
161
|
|
|
373
|
Tax
effect(e)
|
|
|
(11,092)
|
|
|
(11,024)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
213,446
|
|
$
|
230,390
|
Diluted earnings per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.69
|
|
$
|
0.77
|
Adjusted net
income
|
|
$
|
0.82
|
|
$
|
0.89
|
____________________________
|
(a)
|
Reflects the
elimination of the non-cash amortization of acquisition-related
intangible assets.
|
(b)
|
Reflects adjustments
for impairments and other operating items.
|
(c)
|
Reflects the addback of
acquisition-related transaction costs.
|
(d)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(e)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (d) is
calculated based on the applied tax rates for the respective
periods.
|
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SOURCE Waste Connections, Inc.