- Revenue of $2.065 billion, up
9.8% year over year
- Net income(a) of $229.0
million, and adjusted EBITDA(b) of $671.2 million, up 14.1% year over year
- Adjusted EBITDA(b) margin of 32.5% of revenue, up
120 basis points year over year and up 140 basis points
sequentially from Q2
- Net income of $0.89 per share,
and adjusted net income(b) of $1.17 per share
- Year to date net cash provided by operating activities of
$1.571 billion and adjusted free cash
flow(b) of $969.3
million
- Acquisition activity expected to continue through year-end,
with an estimated rollover contribution in 2024 of almost 2% from
approximately $250 million in
annualized revenues signed or closed to date in 2023
TORONTO, Oct. 25,
2023 /CNW/ -- Waste Connections, Inc. (TSX/NYSE:
WCN) ("Waste Connections" or the "Company") today announced its
results for the third quarter of 2023.
"We are extremely pleased by the durability of our financial and
operating results in the quarter, with momentum for continued
outsized margin expansion. Solid operational execution
enabled us to deliver adjusted EBITDA(b) margin of 32.5%
in the third quarter, as expected, up 140 basis points sequentially
and up 120 basis points year over year, in spite of over
$15 million in unforeseen headwinds.
During the quarter, we overcame elevated levels of
risk-related expenses and other lagging effects of higher employee
turnover in prior periods, as well as site-specific incremental
operating expenses at one of our landfills in California," said Ronald J. Mittelstaedt, President and Chief
Executive Officer. "The expected Q4 and ongoing expanding
impacts from that evolving landfill situation are currently being
evaluated, along with a recent shorter-term development at a
landfill in Texas, and as such
weren't anticipated in the full year outlook we provided in August.
We expect to get more clarity going forward but currently estimate
the range of outcomes in Q4 to include impacts of up to
$20 million to revenue, adjusted
EBITDA and adjusted free cash flow."
Mr. Mittelstaedt continued, "We remain encouraged by the pace of
improvement in employee retention, which, along with our
differentiated strategy and execution, should provide for above
average underlying margin expansion in solid waste collection,
transfer and disposal in 2024. On that basis, we should be
positioned for high single-digit adjusted EBITDA(b)
growth in 2024 on expected mid to high single-digit revenue growth,
including approximately $150 million
of revenue carryover from acquisitions signed or closed year to
date, with upside potential from additional acquisition activity
and any further improvement in commodity-related activity."
Mr. Mittelstaedt concluded, "As anticipated, the strength of our
operating performance, free cash flow generation and balance sheet
positioned us for another double-digit increase to our quarterly
cash dividend, demonstrating once again the compatibility of
funding our differentiated growth strategy and acquisition
activity, along with an increasing return of capital to
shareholders."
Q3 2023 Results
Revenue in the third quarter totaled $2.065 billion, up from $1.880 billion in the year ago period.
Operating income was $353.0 million,
which included $59.2 million
primarily in impairments and other operating items, including
$31.3 million of expenses associated
with adjustments to contingent liabilities from acquisitions closed
in prior periods and $25.0 million
related to a non-cash impairment to adjust the carrying value of
certain assets. This compares to operating income of
$326.8 million in the third quarter
of 2022, which included $25.1 million
primarily in impairments and other operating items and
transaction-related expenses. Net income in the third quarter
was $229.0 million, or $0.89 per share on a diluted basis of 258.2
million shares. In the year ago period, the Company reported
net income of $236.9 million, or
$0.92 per share on a diluted basis of
257.9 million shares.
Adjusted net income(b) in the third quarter was
$303.1 million, or $1.17 per diluted share, versus $284.9 million, or $1.10 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the third quarter
was $671.2 million, as compared to
$588.1 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 acquisition-related items, as reflected in the
detailed reconciliations in the attached tables.
Nine Months Year to Date Results
For the nine months ended September 30,
2023, revenue was $5.986
billion, up from $5.343
billion in the year ago period. Operating income,
which included $91.3 million
primarily attributable to impairments and other operating items,
executive separation costs, and transaction-related expenses, was
$1.012 billion, as compared to
operating income of $930.2 million in
the prior year period, which included $38.5
million primarily attributable to impairments and other
operating items and transaction-related expenses.
Net income for the nine months ended September 30, 2023 was $636.0 million, or $2.46 per share on a diluted basis of 258.1
million shares. In the year ago period, the Company reported
net income of $641.3 million, or
$2.49 per share on a diluted basis of
258.1 million shares.
Adjusted net income(b) for the nine months ended
September 30, 2023 was $795.8 million, or $3.08 per diluted share, compared to $755.5 million, or $2.93 per diluted share, in the year ago
period. Adjusted EBITDA(b) for the nine months
ended September 30, 2023 was
$1.867 billion, as compared to
$1.657 billion in the prior year
period.
|
(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
|
Q3 2023 Earnings Conference Call
Waste Connections will be hosting a conference call related to
third quarter earnings on October
26th 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
November 2, 2023, by calling
877-344-7529 (within North
America) or 412-317-0088 (international) and entering
Passcode #5793196.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
October 26th, providing
the Company's fourth quarter 2023 outlook for revenue, price plus
volume growth for solid waste, and adjusted
EBITDA(b).
About Waste Connections
Waste Connections (wasteconnections.com) is an integrated solid
waste services company that provides non-hazardous waste
collection, transfer and disposal services, including by rail,
along with resource recovery primarily through recycling and
renewable fuels generation. The Company serves approximately
nine million residential, commercial and industrial customers in
mostly exclusive and secondary markets across 44 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. 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 and focused 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. For more information and updates on our progress
towards targeted achievement, 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 and 2024 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 AND NINE MONTHS
ENDED SEPTEMBER 30, 2022 AND 2023
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,879,868
|
|
$
|
2,064,744
|
|
$
|
5,342,558
|
|
$
|
5,986,342
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
1,120,629
|
|
|
1,204,603
|
|
|
3,198,039
|
|
|
3,548,893
|
|
Selling, general and
administrative
|
|
|
186,887
|
|
|
196,316
|
|
|
518,705
|
|
|
606,367
|
|
Depreciation
|
|
|
193,287
|
|
|
214,966
|
|
|
562,174
|
|
|
632,347
|
|
Amortization of
intangibles
|
|
|
38,859
|
|
|
39,405
|
|
|
113,956
|
|
|
117,740
|
|
Impairments and other
operating items
|
|
|
13,438
|
|
|
56,477
|
|
|
19,467
|
|
|
69,201
|
|
Operating
income
|
|
|
326,768
|
|
|
352,977
|
|
|
930,217
|
|
|
1,011,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(51,161)
|
|
|
(69,016)
|
|
|
(137,565)
|
|
|
(204,914)
|
|
Interest
income
|
|
|
1,784
|
|
|
2,833
|
|
|
2,574
|
|
|
6,886
|
|
Other income,
net
|
|
|
8,487
|
|
|
5,372
|
|
|
2,373
|
|
|
8,346
|
|
Income before income
tax provision
|
|
|
285,878
|
|
|
292,166
|
|
|
797,599
|
|
|
822,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(48,753)
|
|
|
(62,975)
|
|
|
(155,899)
|
|
|
(185,915)
|
|
Net income
|
|
|
237,125
|
|
|
229,191
|
|
|
641,700
|
|
|
636,197
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(213)
|
|
|
(165)
|
|
|
(390)
|
|
|
(150)
|
|
Net income attributable
to Waste Connections
|
|
$
|
236,912
|
|
$
|
229,026
|
|
$
|
641,310
|
|
$
|
636,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste
Connections' common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.92
|
|
$
|
0.89
|
|
$
|
2.49
|
|
$
|
2.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.92
|
|
$
|
0.89
|
|
$
|
2.49
|
|
$
|
2.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
257,197,010
|
|
|
257,633,703
|
|
|
257,438,756
|
|
|
257,535,408
|
|
Diluted
|
|
|
257,891,635
|
|
|
258,229,404
|
|
|
258,060,751
|
|
|
258,110,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.23
|
|
$
|
0.255
|
|
$
|
0.690
|
|
$
|
0.765
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
December 31,
2022
|
|
September 30,
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
78,637
|
|
$
|
96,187
|
|
Accounts receivable,
net of allowance for credit losses of $22,939 and $23,970 at
December 31, 2022 and September 30, 2023,
respectively
|
|
|
833,862
|
|
|
868,093
|
|
Prepaid expenses and
other current assets
|
|
|
205,146
|
|
|
187,442
|
|
Total current
assets
|
|
|
1,117,645
|
|
|
1,151,722
|
|
Restricted
cash
|
|
|
102,727
|
|
|
102,844
|
|
Restricted
investments
|
|
|
68,099
|
|
|
75,990
|
|
Property and equipment,
net
|
|
|
6,950,915
|
|
|
7,096,769
|
|
Operating lease
right-of-use assets
|
|
|
192,506
|
|
|
263,491
|
|
Goodwill
|
|
|
6,902,297
|
|
|
7,313,084
|
|
Intangible assets,
net
|
|
|
1,673,917
|
|
|
1,618,692
|
|
Other assets,
net
|
|
|
126,497
|
|
|
108,648
|
|
Total
assets
|
|
$
|
17,134,603
|
|
$
|
17,731,240
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
638,728
|
|
$
|
604,542
|
|
Book
overdraft
|
|
|
15,645
|
|
|
15,782
|
|
Deferred
revenue
|
|
|
325,002
|
|
|
342,726
|
|
Accrued
liabilities
|
|
|
431,247
|
|
|
446,436
|
|
Current portion of
operating lease liabilities
|
|
|
35,170
|
|
|
32,677
|
|
Current portion of
contingent consideration
|
|
|
60,092
|
|
|
100,813
|
|
Current portion of
long-term debt and notes payable
|
|
|
6,759
|
|
|
32,760
|
|
Total current
liabilities
|
|
|
1,512,643
|
|
|
1,575,736
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
6,890,149
|
|
|
6,803,439
|
|
Long-term portion of
operating lease liabilities
|
|
|
165,462
|
|
|
239,768
|
|
Long-term portion of
contingent consideration
|
|
|
21,323
|
|
|
21,195
|
|
Deferred income
taxes
|
|
|
1,013,742
|
|
|
1,048,283
|
|
Other long-term
liabilities
|
|
|
417,640
|
|
|
451,524
|
|
Total
liabilities
|
|
|
10,020,959
|
|
|
10,139,945
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
257,211,175 shares issued and 257,145,716 shares outstanding at
December 31, 2022; 257,640,960 shares
issued and 257,581,304 shares outstanding at
September 30, 2023
|
|
|
3,271,958
|
|
|
3,276,631
|
|
Additional paid-in
capital
|
|
|
244,076
|
|
|
270,104
|
|
Accumulated other
comprehensive loss
|
|
|
(56,830)
|
|
|
(49,262)
|
|
Treasury shares: 65,459
and 59,656 shares at December 31, 2022 and September 30,
2023,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
3,649,494
|
|
|
4,088,726
|
|
Total Waste
Connections' equity
|
|
|
7,108,698
|
|
|
7,586,199
|
|
Noncontrolling interest
in subsidiaries
|
|
|
4,946
|
|
|
5,096
|
|
Total
equity
|
|
|
7,113,644
|
|
|
7,591,295
|
|
Total liabilities and
equity
|
|
$
|
17,134,603
|
|
$
|
17,731,240
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30, 2022 AND 2023
(Unaudited)
(in thousands of U.S.
dollars)
|
|
|
|
|
|
Nine months ended September 30,
|
|
|
|
2022
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
641,700
|
|
$
|
636,197
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
11,503
|
|
|
37,470
|
|
Depreciation
|
|
|
562,174
|
|
|
632,347
|
|
Amortization of
intangibles
|
|
|
113,956
|
|
|
117,740
|
|
Deferred income taxes,
net of acquisitions
|
|
|
91,098
|
|
|
29,060
|
|
Current period
provision for expected credit losses
|
|
|
11,097
|
|
|
13,363
|
|
Amortization of debt
issuance costs
|
|
|
3,879
|
|
|
4,862
|
|
Share-based
compensation
|
|
|
48,395
|
|
|
56,110
|
|
Interest
accretion
|
|
|
13,218
|
|
|
14,827
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
(2,982)
|
|
|
-
|
|
Adjustments to
contingent consideration
|
|
|
(1,030)
|
|
|
30,367
|
|
Other
|
|
|
(8,412)
|
|
|
(3,535)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
15,541
|
|
|
2,068
|
|
Net cash provided by
operating activities
|
|
|
1,500,137
|
|
|
1,570,876
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(1,272,910)
|
|
|
(573,185)
|
|
Capital expenditures
for property and equipment
|
|
|
(618,313)
|
|
|
(615,554)
|
|
Proceeds from disposal
of assets
|
|
|
23,341
|
|
|
8,678
|
|
Other
|
|
|
9,296
|
|
|
(5,552)
|
|
Net cash used in
investing activities
|
|
|
(1,858,586)
|
|
|
(1,185,613)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
3,148,624
|
|
|
1,242,554
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(2,052,412)
|
|
|
(1,383,415)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(12,114)
|
|
|
(4,255)
|
|
Change in book
overdraft
|
|
|
(5,983)
|
|
|
137
|
|
Payments for
repurchase of common shares
|
|
|
(424,999)
|
|
|
-
|
|
Payments for cash
dividends
|
|
|
(177,710)
|
|
|
(196,815)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(17,466)
|
|
|
(29,415)
|
|
Debt issuance
costs
|
|
|
(11,454)
|
|
|
-
|
|
Proceeds from issuance
of shares under employee share purchase plan
|
|
|
3,271
|
|
|
3,908
|
|
Proceeds from sale of
common shares held in trust
|
|
|
660
|
|
|
765
|
|
Net cash provided by
(used in) financing activities
|
|
|
450,417
|
|
|
(366,536)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
(3,210)
|
|
|
(1,060)
|
|
|
|
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
88,758
|
|
|
17,667
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
|
219,615
|
|
|
181,364
|
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
|
308,373
|
|
$
|
199,031
|
|
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 and nine month periods ended September 30, 2023:
|
|
Three months
ended
September 30,
2023
|
|
Nine months
ended
September 30,
2023
|
|
Core Price
|
|
|
8.8 %
|
|
|
9.9 %
|
|
Surcharges
|
|
|
(1.1 %)
|
|
|
(0.4 %)
|
|
Volume
|
|
|
(2.4 %)
|
|
|
(1.9 %)
|
|
Recycling
|
|
|
(0.5 %)
|
|
|
(1.3 %)
|
|
Foreign Exchange
Impact
|
|
|
(0.4 %)
|
|
|
(0.6 %)
|
|
Total
|
|
|
4.4 %
|
|
|
5.7 %
|
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
September 30, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, 2022
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,368,491
|
|
$
|
(4,296)
|
|
$
|
1,364,195
|
|
72.6
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
616,900
|
|
|
(245,687)
|
|
|
371,213
|
|
19.8
|
%
|
Solid Waste
Recycling
|
|
|
48,246
|
|
|
(2,332)
|
|
|
45,914
|
|
2.4
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
56,995
|
|
|
(3,978)
|
|
|
53,017
|
|
2.8
|
%
|
Intermodal and
Other
|
|
|
47,604
|
|
|
(2,075)
|
|
|
45,529
|
|
2.4
|
%
|
Total
|
|
$
|
2,138,236
|
|
$
|
(258,368)
|
|
$
|
1,879,868
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, 2023
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,512,745
|
|
$
|
(4,742)
|
|
$
|
1,508,003
|
|
73.0
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
703,544
|
|
|
(285,292)
|
|
|
418,252
|
|
20.3
|
%
|
Solid Waste
Recycling
|
|
|
36,103
|
|
|
(988)
|
|
|
35,115
|
|
1.7
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
62,066
|
|
|
(3,561)
|
|
|
58,505
|
|
2.8
|
%
|
Intermodal and
Other
|
|
|
44,984
|
|
|
(115)
|
|
|
44,869
|
|
2.2
|
%
|
Total
|
|
$
|
2,359,442
|
|
$
|
(294,698)
|
|
$
|
2,064,744
|
|
100.0
|
%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three and nine month periods ended September
30, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Acquisitions,
net
|
|
$
|
150,644
|
|
$
|
102,908
|
|
$
|
402,007
|
|
$
|
356,301
|
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 nine month periods ended
September 30, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Cash Interest
Paid
|
|
$
|
42,528
|
|
$
|
73,563
|
|
$
|
118,541
|
|
$
|
191,055
|
Cash Taxes
Paid
|
|
|
15,787
|
|
|
74,510
|
|
|
53,599
|
|
|
125,550
|
Debt to Book Capitalization as of September 30, 2023: 47%
Internalization for the three months ended
September 30, 2023: 56%
Days Sales Outstanding for the three months ended
September 30, 2023: 39 (23
net of deferred revenue)
Share Information for the three months ended September 30, 2023:
|
|
|
Basic shares
outstanding
|
|
257,633,703
|
Dilutive effect of
equity-based awards
|
|
595,701
|
Diluted shares
outstanding
|
|
258,229,404
|
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
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net income attributable
to Waste Connections
|
|
$
|
236,912
|
|
$
|
229,026
|
|
$
|
641,310
|
|
$
|
636,047
|
Plus: Net income
attributable to noncontrolling interests
|
|
|
213
|
|
|
165
|
|
|
390
|
|
|
150
|
Plus: Income tax
provision
|
|
|
48,753
|
|
|
62,975
|
|
|
155,899
|
|
|
185,915
|
Plus: Interest
expense
|
|
|
51,161
|
|
|
69,016
|
|
|
137,565
|
|
|
204,914
|
Less: Interest
income
|
|
|
(1,784)
|
|
|
(2,833)
|
|
|
(2,574)
|
|
|
(6,886)
|
Plus: Depreciation and
amortization
|
|
|
232,146
|
|
|
254,371
|
|
|
676,130
|
|
|
750,087
|
Plus: Closure and
post-closure accretion
|
|
|
4,061
|
|
|
4,609
|
|
|
12,148
|
|
|
13,696
|
Plus: Impairments and
other operating items
|
|
|
13,438
|
|
|
56,477
|
|
|
19,467
|
|
|
69,201
|
Less: Other income,
net
|
|
|
(8,487)
|
|
|
(5,372)
|
|
|
(2,373)
|
|
|
(8,346)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
10,461
|
|
|
3,108
|
|
|
18,694
|
|
|
7,014
|
Plus/(Less): Fair
value changes to equity awards(b)
|
|
|
1,196
|
|
|
(379)
|
|
|
349
|
|
|
65
|
Plus: Executive
separation costs(c)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,063
|
Adjusted
EBITDA
|
|
$
|
588,070
|
|
$
|
671,163
|
|
$
|
1,657,005
|
|
$
|
1,866,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
31.3 %
|
|
|
32.5 %
|
|
|
31.0 %
|
|
|
31.2 %
|
|
|
|
|
(a)
|
Reflects
the addback of acquisition-related transaction
costs.
|
(b)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(c)
|
Reflects the cash and
non-cash components of severance expense associated with an
executive departure.
|
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
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net cash provided by
operating activities
|
|
$
|
526,459
|
|
$
|
554,164
|
|
$
|
1,500,137
|
|
$
|
1,570,876
|
Plus/(Less): Change in
book overdraft
|
|
|
(5,929)
|
|
|
371
|
|
|
(5,983)
|
|
|
137
|
Plus: Proceeds from
disposal of assets
|
|
|
6,447
|
|
|
4,859
|
|
|
23,341
|
|
|
8,678
|
Less: Capital
expenditures for property and equipment
|
|
|
(246,885)
|
|
|
(221,411)
|
|
|
(618,313)
|
|
|
(615,554)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of contingent
consideration recorded in earnings(a)
|
|
|
2,982
|
|
|
-
|
|
|
2,982
|
|
|
-
|
Cash received for
divestitures(b)
|
|
|
-
|
|
|
-
|
|
|
(5,671)
|
|
|
-
|
Transaction-related
expenses(c)
|
|
|
10,461
|
|
|
1,572
|
|
|
37,558
|
|
|
3,836
|
Executive separation
costs(d)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,686
|
Pre-existing
Progressive Waste share-based grants(e)
|
|
|
274
|
|
|
-
|
|
|
286
|
|
|
841
|
Tax
effect(f)
|
|
|
(3,212)
|
|
|
(231)
|
|
|
(5,377)
|
|
|
(1,221)
|
Adjusted free cash
flow
|
|
$
|
290,597
|
|
$
|
339,324
|
|
$
|
928,960
|
|
$
|
969,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
15.5 %
|
|
|
16.4 %
|
|
|
17.4 %
|
|
|
16.2 %
|
|
|
|
|
|
(a)
|
Reflects
the addback of acquisition-related payments for contingent
consideration that were recorded as expenses in earnings and as a
component of cash flows from operating activities as the amounts
paid exceeded the fair value of the contingent consideration
recorded at the acquisition date.
|
(b)
|
Reflects the
elimination of cash received in conjunction with the divestiture of
certain operations.
|
(c)
|
Reflects
the addback of acquisition-related transaction costs and the
settlement of an acquired tax liability.
|
(d)
|
Reflects the cash
component of severance expense associated with an executive
departure.
|
(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
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
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Reported net income
attributable to Waste Connections
|
|
$
|
236,912
|
|
$
|
229,026
|
|
$
|
641,310
|
|
$
|
636,047
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
38,859
|
|
|
39,405
|
|
|
113,956
|
|
|
117,740
|
Impairments and other
operating items(b)
|
|
|
13,438
|
|
|
56,477
|
|
|
19,467
|
|
|
69,201
|
Transaction-related
expenses(c)
|
|
|
10,461
|
|
|
3,108
|
|
|
18,694
|
|
|
7,014
|
Fair value changes to
equity awards(d)
|
|
|
1,196
|
|
|
(379)
|
|
|
349
|
|
|
65
|
Executive separation
costs(e)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,063
|
Tax
effect(f)
|
|
|
(15,944)
|
|
|
(24,586)
|
|
|
(38,260)
|
|
|
(49,356)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
284,922
|
|
$
|
303,051
|
|
$
|
755,516
|
|
$
|
795,774
|
Diluted earnings per
common share attributable to Waste
Connections' common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.92
|
|
$
|
0.89
|
|
$
|
2.49
|
|
$
|
2.46
|
Adjusted net
income
|
|
$
|
1.10
|
|
$
|
1.17
|
|
$
|
2.93
|
|
$
|
3.08
|
|
|
|
|
|
(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 cash and
non-cash components of severance expense associated with an
executive departure.
|
(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.
|
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SOURCE Waste Connections, Inc.