Fourth Quarter 2016 Highlights
- Revenue of $1.049 billion,
exceeding outlook
- Reports 3.7% solid waste core price + volume growth
- Net income attributable to Waste Connections of
$85.6 million, or $0.49 per share
- Adjusted net income attributable to Waste Connections* of
$120.3 million, or $0.68 per share, up 38.8% per share
- Adjusted EBITDA* of $325.4
million, or 31.0% of revenue, exceeding outlook
Full-Year 2016 Highlights
- Revenue of $3.376
billion
- Reports 4.7% solid waste core price + volume growth
- Net cash provided by operating activities of $795.3 million
- Adjusted free cash flow* of $550.9
million, or 16.3% of revenue
Looking at 2017
- Expects revenue of approximately $4.45 billion, excluding additional divestitures
and acquisitions
- Expects more than 15% YoY growth in adjusted free cash flow
per share
TORONTO, Feb. 21, 2017 /PRNewswire/ -- Waste Connections,
Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today
announced its results for the fourth quarter of 2016. Revenue
in the fourth quarter, which included $497.9
million from the Progressive Waste acquisition completed on
June 1, 2016, totaled $1.049 billion, up from $531.9 million in the year ago period.
Operating income, which included $23.0
million of impairments and other items primarily related to
the expected divestiture of certain assets acquired in the
Progressive Waste acquisition and $16.0
million of items also related to that transaction, was
$139.2 million compared to
$101.7 million in the fourth quarter
of 2015, which included acquisition-related transaction costs of
$2.9 million associated with the
acquisition of Rock River Environmental Services.
Net income attributable to Waste Connections in the fourth
quarter was $85.6 million, or
$0.49 per share on a diluted basis of
175.9 million shares. In the year ago period, the Company
reported net income attributable to Waste Connections of
$52.1 million, or $0.42 per share on a diluted basis of 123.1
million shares.
Adjusted net income attributable to Waste Connections* in the
fourth quarter was $120.3 million, or
$0.68 per share, versus $59.8 million, or $0.49 per share, in the prior year period.
Adjusted EBITDA* in the fourth quarter was $325.4 million, as compared to adjusted EBITDA*
of $175.6 million in the prior year
period. Adjusted net income attributable to Waste
Connections, adjusted net income attributable to Waste Connections
per diluted share and adjusted EBITDA, all non-GAAP measures,
primarily exclude the impact of acquisition-related items and
impairments and other operating items, as reflected in the detailed
reconciliation in the attached tables.
"Our acquisition of Progressive Waste made 2016 a
transformational year for Waste Connections. More
importantly, our culture and operating playbook enabled us to drive
significant improvements in safety, quality of revenue and
operating performance within these operations, all pacing 12 to 18
months ahead of our initial expectations. This was evident in
the fourth quarter as our results once again exceeded
expectations. This underlying strength, together with the
previously announced acquisition of Groot Industries and continuing
improvements in recycled commodity values and E&P waste
activity, should position us well for 2017," said Ronald J. Mittelstaedt, Chairman and Chief
Executive Officer.
* A non-GAAP measure; see accompanying Non-GAAP
Reconciliation Schedule.
Mr. Mittelstaedt added, "Free cash flow generation is synonymous
with our name. Waste Connections' industry-leading 50+% conversion
of EBITDA to free cash flow should drive a more than 15%
year-over-year increase in free cash flow per share in 2017, and
our strong financial profile provides us the flexibility to fund a
continuing, above average amount of expected acquisition activity
while increasing the return of capital to shareholders."
For the year ended December 31,
2016, revenue was $3.376
billion, as compared to revenue of $2.117 billion in 2015. Operating income,
which included $118.3 million of
items primarily related to the Progressive Waste acquisition and
$27.7 million of impairments and
other items, was $452.3 million,
compared to operating loss of $61.5
million in the prior year. In 2015, the Company
recorded net impairment charges of approximately $497.1 million against its E&P segment.
Net income attributable to Waste Connections in 2016 was
$246.5 million, or $1.60 per share on a diluted basis of 154.1
million shares. In 2015, the Company reported net loss
attributable to Waste Connections of $95.8
million, or $0.78 per share on
a diluted basis of 123.5 million shares.
Adjusted net income attributable to Waste Connections* in 2016
was $395.2 million, or $2.57 per share, compared to $244.9 million, or $1.98 per share, in the prior year. Adjusted
EBITDA* in 2016 was $1.071 billion,
as compared to $710.6 million in the
prior year.
2017 OUTLOOK
Waste Connections also announced its outlook for 2017, which
assumes no change in the current economic environment. The
Company's outlook excludes any impact from additional divestitures
and acquisitions that may close during the year, and expensing of
transaction-related items. The outlook provided below is
forward looking, and actual results may differ materially depending
on risks and uncertainties detailed at the end of this release and
in our periodic filings with the Securities and Exchange Commission
and the securities commissions or similar regulatory authorities in
Canada. Certain components of the
outlook for 2017 are subject to quarterly fluctuations. See
reconciliation in the attached tables.
- Revenue is estimated to be approximately $4.45 billion.
- Adjusted EBITDA* is estimated to be approximately $1.41 billion, or about 31.7% of revenue.
- Adjusted free cash flow* is estimated to be approximately
$725 million, or about 16.3% of
revenue
* A non-GAAP measure; see accompanying Non-GAAP
Reconciliation Schedule.
CONFERENCE CALL
Waste Connections will be hosting a conference call related to
fourth quarter earnings and 2017 outlook on February 22nd at 8:30 A.M. Eastern Time. The call will be
broadcast live over the Internet at www.streetevents.com or
through a link on our website at
www.wasteconnections.com. A playback of the call will
be available at both of these websites.
About Waste Connections
Waste Connections is an integrated solid waste services company
that provides waste collection, transfer, disposal and recycling
services in mostly exclusive and secondary markets in the United States and Canada. Through
its R360 Environmental Solutions subsidiary, Waste Connections is
also a leading provider of non-hazardous oilfield waste treatment,
recovery and disposal services in several of the most active
natural resource producing areas in the
United States, including the Permian, Bakken and Eagle Ford
Basins. Waste Connections serves more than six million
residential, commercial, industrial, and exploration and production
customers in 40 states and the District
of Columbia in the U.S., and five provinces in Canada.
The Company also provides intermodal services for the movement of
cargo and solid waste containers in the Pacific
Northwest.
For more information, visit the Waste Connections web site at
www.wasteconnections.com. Copies of financial literature,
including this release, are available on the Waste Connections
website or through contacting us directly at (905) 532-7510.
Investors can also obtain these materials and other documents filed
with the Securities and Exchange Commission (SEC) and the Canadian
securities regulators free of charge at the SEC's website,
www.sec.gov, and at the System for Electronic Document Analysis and
Retrieval (SEDAR) maintained by the Canadian Securities
Administrators at www.sedar.com.
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements (which
include "forward-looking information" as that term is defined in
applicable securities laws in Canada) within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995 (PSLRA). 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," "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 2017 financial results, capital expenditures, adjusted
free cash flow, outlook and related assumptions, potential
operating trends and acquisition activity and return of capital to
shareholders of the Company. Important factors that could cause
actual results to differ, possibly materially, from those indicated
by the forward-looking statements include, without limitation, the
following: the possibility that any of the anticipated
benefits of the combination of the Company and Waste Connections
US, Inc. (f/k/a Waste Connections, Inc.) will not be realized; the
ability of the combined company to successfully achieve business
objectives, including integrating the two companies or the effects
of unexpected costs, liabilities or delays; the potential benefits
and synergies of the transaction; and expectations for other
economic, business and/or competitive factors. In addition,
you should carefully consider the risks and uncertainties and other
factors that may affect future results of the combined company that
are disclosed in filings that have been made by the Company
(including, under its former name, Progressive Waste Solutions
Ltd.) and by Waste Connections US, Inc. (including, under its
former name, Waste Connections, Inc.) with the Securities and
Exchange Commission 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:
|
|
|
|
Worthing Jackman /
(832) 442-2266
|
Mary Anne Whitney /
(832) 442-2253
|
worthingj@wasteconnections.com
|
maryannew@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
|
THREE AND TWELVE
MONTHS ENDED DECEMBER 31, 2015 and 2016
|
(Unaudited)
|
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
Three months
ended
December
31,
|
Twelve months
ended
December
31,
|
|
2015
|
|
|
2016
|
|
2015
|
|
2016
|
Revenues
|
$
|
531,937
|
|
|
$
|
1,048,622
|
|
$
|
2,117,287
|
|
$
|
3,375,863
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
297,939
|
|
|
|
617,948
|
|
|
1,177,409
|
|
|
1,957,712
|
Selling, general and
administrative
|
|
62,276
|
|
|
|
124,267
|
|
|
237,484
|
|
|
474,263
|
Depreciation
|
|
62,039
|
|
|
|
122,612
|
|
|
240,357
|
|
|
393,600
|
Amortization of
intangibles
|
|
7,619
|
|
|
|
21,593
|
|
|
29,077
|
|
|
70,312
|
Impairments and other
operating items
|
|
334
|
|
|
|
23,045
|
|
|
494,492
|
|
|
27,678
|
Operating income
(loss)
|
|
101,730
|
|
|
|
139,157
|
|
|
(61,532)
|
|
|
452,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(16,850)
|
|
|
|
(27,418)
|
|
|
(64,236)
|
|
|
(92,709)
|
Other income
(expense), net
|
|
912
|
|
|
|
476
|
|
|
(518)
|
|
|
655
|
Foreign currency
transaction gain
|
|
-
|
|
|
|
782
|
|
|
-
|
|
|
1,121
|
Income (loss) before
income tax provision
|
|
85,792
|
|
|
|
112,997
|
|
|
(126,286)
|
|
|
361,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(provision) benefit
|
|
(33,404)
|
|
|
|
(27,294)
|
|
|
31,592
|
|
|
(114,044)
|
Net income
(loss)
|
|
52,388
|
|
|
|
85,703
|
|
|
(94,694)
|
|
|
247,321
|
Less: Net income
attributable to noncontrolling interests
|
|
(327)
|
|
|
|
(111)
|
|
|
(1,070)
|
|
|
(781)
|
Net income (loss)
attributable to Waste Connections
|
$
|
52,061
|
|
|
$
|
85,592
|
|
$
|
(95,764)
|
|
$
|
246,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.49
|
|
$
|
(0.78)
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.49
|
|
$
|
(0.78)
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
122,628,841
|
|
|
|
175,398,200
|
|
|
123,491,931
|
|
|
153,550,008
|
Diluted
|
|
123,141,503
|
|
|
|
175,929,810
|
|
|
123,491,931
|
|
|
154,054,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
$
|
0.145
|
|
|
$
|
0.18
|
|
$
|
0.535
|
|
$
|
0.615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WASTE CONNECTIONS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
December 31,
2015
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
10,974
|
|
$
|
154,382
|
Accounts receivable,
net of allowance for doubtful accounts of $7,738 and $13,160 at
December 31, 2015 and 2016, respectively
|
|
|
255,192
|
|
|
485,138
|
Deferred income
taxes
|
|
|
49,727
|
|
|
89,177
|
Current assets held
for sale
|
|
|
-
|
|
|
6,339
|
Prepaid expenses and
other current assets
|
|
|
46,534
|
|
|
97,533
|
Total current
assets
|
|
|
362,427
|
|
|
832,569
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
2,738,288
|
|
|
4,738,055
|
Goodwill
|
|
|
1,422,825
|
|
|
4,390,261
|
Intangible assets,
net
|
|
|
511,294
|
|
|
1,067,158
|
Restricted
assets
|
|
|
46,232
|
|
|
63,406
|
Long-term assets held
for sale
|
|
|
-
|
|
|
33,989
|
Other assets,
net
|
|
|
40,732
|
|
|
67,664
|
|
|
$
|
5,121,798
|
|
$
|
11,193,102
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
115,206
|
|
$
|
251,253
|
Book
overdraft
|
|
|
12,357
|
|
|
10,955
|
Accrued
liabilities
|
|
|
136,018
|
|
|
269,402
|
Deferred
revenue
|
|
|
90,349
|
|
|
134,081
|
Current portion of
contingent consideration
|
|
|
22,217
|
|
|
21,453
|
Current liabilities
held for sale
|
|
|
-
|
|
|
3,383
|
Current portion of
long-term debt and notes payable
|
|
|
2,127
|
|
|
1,650
|
Total current
liabilities
|
|
|
378,274
|
|
|
692,177
|
|
|
|
|
|
|
|
Long-term debt and
notes payable
|
|
|
2,147,127
|
|
|
3,616,760
|
Long-term portion of
contingent consideration
|
|
|
27,177
|
|
|
30,373
|
Other long-term
liabilities
|
|
|
124,943
|
|
|
331,074
|
Deferred income
taxes
|
|
|
452,493
|
|
|
867,841
|
Total
liabilities
|
|
|
3,130,014
|
|
|
5,538,225
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Common shares:
122,375,955 shares issued and outstanding at December 31, 2015;
175,426,824 shares issued and 175,201,895 shares outstanding at
December 31, 2016
|
|
|
1,224
|
|
|
4,174,808
|
Additional paid-in
capital
|
|
|
736,652
|
|
|
102,220
|
Accumulated other
comprehensive loss
|
|
|
(12,171)
|
|
|
(43,001)
|
Treasury shares: 0
and 224,929 shares at December 31, 2015 and 2016,
respectively
|
|
|
-
|
|
|
-
|
Retained
earnings
|
|
|
1,259,495
|
|
|
1,413,488
|
Total Waste
Connections' equity
|
|
|
1,985,200
|
|
|
5,647,515
|
Noncontrolling
interest in subsidiaries
|
|
|
6,584
|
|
|
7,362
|
Total
equity
|
|
|
1,991,784
|
|
|
5,654,877
|
|
|
$
|
5,121,798
|
|
$
|
11,193,102
|
WASTE CONNECTIONS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
TWELVE MONTHS ENDED
DECEMBER 31, 2015 AND 2016
|
(Unaudited)
|
(in thousands of U.S.
dollars)
|
|
|
|
|
Twelve months ended
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(94,694)
|
|
$
|
247,321
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
518,657
|
|
|
26,741
|
Depreciation
|
|
|
240,357
|
|
|
393,600
|
Amortization of
intangibles
|
|
|
29,077
|
|
|
70,312
|
Foreign currency
transaction gain
|
|
|
-
|
|
|
(1,121)
|
Deferred income taxes,
net of acquisitions
|
|
|
(132,454)
|
|
|
42,298
|
Amortization of debt
issuance costs
|
|
|
3,097
|
|
|
4,847
|
Share-based
compensation
|
|
|
20,318
|
|
|
44,772
|
Interest income on
restricted assets
|
|
|
(428)
|
|
|
(477)
|
Interest
accretion
|
|
|
6,761
|
|
|
10,505
|
Excess tax benefit
associated with equity-based compensation
|
|
|
(2,069)
|
|
|
(5,196)
|
Payment of contingent
consideration recorded in earnings
|
|
|
-
|
|
|
(493)
|
Adjustments to
contingent consideration
|
|
|
(22,180)
|
|
|
(2,623)
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
10,557
|
|
|
(35,174)
|
Net cash provided by
operating activities
|
|
|
576,999
|
|
|
795,312
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(230,517)
|
|
|
(17,131)
|
Cash acquired in the
Progressive Waste acquisition
|
|
|
-
|
|
|
65,768
|
Capital expenditures
for property and equipment
|
|
|
(238,833)
|
|
|
(344,723)
|
Proceeds from disposal
of assets
|
|
|
2,883
|
|
|
4,604
|
Change in restricted
assets, net of interest income
|
|
|
(2,225)
|
|
|
(428)
|
Other
|
|
|
(1,842)
|
|
|
(4,485)
|
Net cash used in
investing activities
|
|
|
(470,534)
|
|
|
(296,395)
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
1,489,500
|
|
|
3,469,289
|
Principal payments on
notes payable and long-term debt
|
|
|
(1,429,195)
|
|
|
(3,714,044)
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(2,190)
|
|
|
(16,322)
|
Change in book
overdraft
|
|
|
(89)
|
|
|
(1,305)
|
Proceeds from option
and warrant exercises
|
|
|
572
|
|
|
-
|
Excess tax benefit
associated with equity-based compensation
|
|
|
2,069
|
|
|
5,196
|
Payments for
repurchase of common shares
|
|
|
(91,165)
|
|
|
-
|
Payments for cash
dividends
|
|
|
(65,990)
|
|
|
(92,547)
|
Tax withholdings
related to net share settlements of restricted share
units
|
|
|
(6,447)
|
|
|
(11,497)
|
Distributions to
noncontrolling interests
|
|
|
(42)
|
|
|
(3)
|
Debt issuance
costs
|
|
|
(6,867)
|
|
|
(13,506)
|
Proceeds from sale of
common shares held in trust
|
|
|
-
|
|
|
19,870
|
Net cash used in
financing activities
|
|
|
(109,844)
|
|
|
(354,869)
|
Effect of exchange
rates changes on cash and equivalents
|
|
|
-
|
|
|
(598)
|
Net increase
(decrease) in cash and equivalents
|
|
|
(3,379)
|
|
|
143,450
|
Cash and equivalents
at beginning of period
|
|
|
14,353
|
|
|
10,974
|
Less: cash held for
sale
|
|
|
-
|
|
|
(42)
|
Cash and equivalents
at end of period
|
|
$
|
10,974
|
|
$
|
154,382
|
|
|
|
|
|
|
|
|
|
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 twelve months ended December 31, 2016:
|
Three months
ended
December 31,
2016
|
|
Twelve months
ended
December 31,
2016
|
Solid Waste Internal
Growth:
Core
Price
|
2.7%
|
|
2.8%
|
Surcharges
|
(0.1%)
|
|
(0.3%)
|
Volume
|
1.0%
|
|
1.9%
|
Recycling
|
0.4%
|
|
0.1%
|
Total Solid Waste
Internal Growth
|
4.0%
|
|
4.5%
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
December 31, 2015 and 2016:
|
Three Months Ended
December 31, 2015
|
|
|
Revenue
|
|
|
|
Inter-company
Elimination
|
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
$
|
354,601
|
|
$
|
(1,472)
|
|
$
|
353,129
|
|
66.4%
|
Solid Waste Disposal
and Transfer
|
|
175,565
|
|
|
(67,714)
|
|
|
107,851
|
|
20.3%
|
Solid Waste
Recycling
|
|
11,678
|
|
|
(271)
|
|
|
11,407
|
|
2.1%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
45,427
|
|
|
(2,278)
|
|
|
43,149
|
|
8.1%
|
Intermodal and
Other
|
|
16,401
|
|
|
-
|
|
|
16,401
|
|
3.1%
|
Total
|
$
|
603,672
|
|
$
|
(71,735)
|
|
$
|
531,937
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2016
|
|
|
Revenue
|
|
|
|
Inter-company
Elimination
|
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
$
|
739,986
|
|
|
$
|
(2,195)
|
|
$
|
737,791
|
|
70.3%
|
Solid Waste Disposal
and Transfer
|
|
350,482
|
|
|
|
(135,713)
|
|
|
214,769
|
|
20.5%
|
Solid Waste
Recycling
|
|
31,580
|
|
|
|
(2,387)
|
|
|
29,193
|
|
2.8%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
35,027
|
|
|
|
(2,859)
|
|
|
32,168
|
|
3.1%
|
Intermodal and
Other
|
|
34,962
|
|
|
|
(261)
|
|
|
34,701
|
|
3.3%
|
Total
|
$
|
1,192,037
|
|
|
$
|
(143,415)
|
|
$
|
1,048,622
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three and twelve month periods ended December 31, 2015 and 2016:
|
|
Three months
ended
December 31,
|
|
|
Twelve months
ended
December 31,
|
|
|
2015
|
|
2016
|
|
|
2015
|
|
2016
|
Solid waste,
net
|
$
|
17,619
|
|
$
|
507,332
|
|
|
$
|
30,969
|
|
$
|
1,266,395
|
E&P waste,
net
|
|
3,222
|
|
|
-
|
|
|
|
26,728
|
|
|
-
|
Acquisitions,
net
|
$
|
20,841
|
|
$
|
507,332
|
|
|
$
|
57,697
|
|
$
|
1,266,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL STATISTICS (continued)
(in thousands of U.S. dollars, except where noted)
Other Cash Flow Items: The following table reflects cash
interest and cash taxes for the three and twelve-month periods
ended December 31, 2015 and 2016:
|
Three months
ended
December 31,
|
|
|
Twelve months
ended
December
31,
|
|
2015
|
|
2016
|
|
|
2015
|
|
2016
|
Cash Interest
Paid
|
$
|
21,472
|
|
$
|
31,416
|
|
|
$
|
55,674
|
|
$
|
87,654
|
Cash Taxes
Paid
|
|
21,695
|
|
|
33,084
|
|
|
|
102,279
|
|
|
69,589
|
Debt to Book Capitalization as of December 31, 2016: 39%
Internalization for the three months ended
December 31, 2016: 52%
Days Sales Outstanding for the three months ended
December 31, 2016: 43 (31
net of deferred revenue)
Share Information for the three months ended December 31, 2016:
Basic shares
outstanding
|
175,398,200
|
Dilutive effect of
options and warrants
|
35,791
|
Dilutive effect of
restricted share units
|
495,819
|
Diluted shares
outstanding
|
175,929,810
|
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 (loss)
attributable to Waste Connections, plus net income attributable to
noncontrolling interests, plus or minus income tax provision
(benefit), plus interest expense, 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, plus
foreign currency transaction loss, less foreign currency
transaction gain. Waste Connections further adjusts this
calculation to exclude the effects of other items management
believes impact the ability to assess the operating performance of
its business. This measure is not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate adjusted EBITDA
differently.
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
Net income (loss)
attributable to Waste Connections
|
$
|
52,061
|
|
$
|
85,592
|
|
$
|
(95,764)
|
|
$
|
246,540
|
Plus: Net income
attributable to noncontrolling interests
|
|
327
|
|
|
111
|
|
|
1,070
|
|
|
781
|
Plus (less): Income
tax provision (benefit)
|
|
33,404
|
|
|
27,294
|
|
|
(31,592)
|
|
|
114,044
|
Plus: Interest
expense
|
|
16,850
|
|
|
27,418
|
|
|
64,236
|
|
|
92,709
|
Plus: Depreciation
and amortization
|
|
69,658
|
|
|
144,205
|
|
|
269,434
|
|
|
463,912
|
Plus: Closure and
post-closure accretion
|
|
1,058
|
|
|
3,027
|
|
|
3,978
|
|
|
8,936
|
Plus: Impairments and
other operating items
|
|
334
|
|
|
23,045
|
|
|
494,492
|
|
|
27,678
|
Plus/Less: Other
expense (income), net
|
|
(912)
|
|
|
(476)
|
|
|
518
|
|
|
(655)
|
Less: Foreign
currency transaction gain
|
|
-
|
|
|
(782)
|
|
|
-
|
|
|
(1,121)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses (a)
|
|
2,863
|
|
|
1,015
|
|
|
4,235
|
|
|
47,842
|
Plus: Pre-existing
Progressive Waste share-based grants (b)
|
|
-
|
|
|
4,466
|
|
|
-
|
|
|
14,289
|
Plus:
Severance-related and other expenses (c)
|
|
-
|
|
|
4,036
|
|
|
-
|
|
|
44,336
|
Plus: Synergy bonus
(d)
|
|
-
|
|
|
6,498
|
|
|
-
|
|
|
11,798
|
Adjusted
EBITDA
|
$
|
175,643
|
|
$
|
325,449
|
|
$
|
710,607
|
|
$
|
1,071,089
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
33.0%
|
|
|
31.0%
|
|
|
33.6%
|
|
|
31.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reflects the addback
of acquisition-related transaction costs, including excise tax
payments related to the Progressive Waste acquisition.
|
(b)
|
Reflects share-based
compensation costs, including changes in fair value, associated
with share-based awards granted by Progressive Waste outstanding at
the time of the Progressive Waste acquisition.
|
(c)
|
Reflects the addback
of severance-related expenses and other items, including certain
professional fees, in connection with the Progressive Waste
acquisition.
|
(d)
|
Reflects the addback
of bonuses accrued pursuant to the Company's Synergy Bonus Program
adopted on July 19, 2016 in conjunction with the Progressive Waste
acquisition.
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, is
provided supplementally because it is widely used by investors as a
valuation and liquidity measure in the solid waste industry.
Management uses adjusted free cash flow as one of the principal
measures to evaluate and monitor the ongoing financial performance
of Waste Connections' operations. Waste Connections defines
adjusted free cash flow as net cash provided by operating
activities, plus proceeds from disposal of assets, plus or minus
change in book overdraft, plus excess tax benefit associated with
equity-based compensation, less capital expenditures for property
and equipment and distributions to noncontrolling interests.
Waste Connections further adjusts this calculation to exclude the
effects of items management believes impact the ability to assess
the operating performance of its business. This measure is
not a substitute for, and should be used in conjunction with, GAAP
liquidity or financial measures. Other companies may
calculate adjusted free cash flow differently.
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
Net cash provided by
operating activities
|
|
$
|
113,671
|
|
$
|
256,481
|
|
$
|
576,999
|
|
$
|
795,312
|
Less: Change in book
overdraft
|
|
|
(154)
|
|
|
(7,355)
|
|
|
(89)
|
|
|
(1,305)
|
Plus: Proceeds from
disposal of assets
|
|
|
1,207
|
|
|
1,578
|
|
|
2,883
|
|
|
4,604
|
Plus: Excess tax
benefit associated with equity-based compensation
|
|
|
83
|
|
|
45
|
|
|
2,069
|
|
|
5,196
|
Less: Capital
expenditures for property and equipment
|
|
|
(70,454)
|
|
|
(139,789)
|
|
|
(238,833)
|
|
|
(344,723)
|
Less: Distributions
to noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
(42)
|
|
|
(3)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of contingent
consideration recorded in earnings (a)
|
|
|
-
|
|
|
80
|
|
|
-
|
|
|
493
|
Transaction-related expenses
(b)
|
|
|
-
|
|
|
3,480
|
|
|
-
|
|
|
45,228
|
Severance-related and other
expenses (c)
|
|
|
-
|
|
|
4,005
|
|
|
-
|
|
|
82,526
|
Tax effect (d)
|
|
|
-
|
|
|
(7,846)
|
|
|
-
|
|
|
(36,384)
|
Adjusted free cash
flow
|
|
$
|
44,353
|
|
$
|
110,679
|
|
$
|
342,987
|
|
$
|
550,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
8.3%
|
|
|
10.6%
|
|
|
16.2%
|
|
|
16.3%
|
|
|
|
|
|
(a)
|
Reflects the addback
of acquisition-related payments for contingent consideration that
were recorded as expenses in earnings and as a component of cash
flows from operating activities as the amounts paid exceeded the
fair value of the contingent consideration recorded at the
acquisition date.
|
(b)
|
Reflects the addback
of acquisition-related transaction costs, including excise tax
payments, related to the Progressive Waste acquisition.
|
(c)
|
Reflects the addback
of severance-related expenses and other items, including certain
professional fees, in connection with the Progressive Waste
acquisition.
|
(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 Net Income attributable to Waste Connections
to Adjusted Net Income attributable to Waste Connections and
Adjusted Net Income per Diluted Share attributable to Waste
Connections:
Adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections, both non-GAAP financial measures, are provided
supplementally because they are widely used by investors as a
valuation measure in the solid waste industry. Management
uses adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections as one of the principal measures to evaluate and
monitor the ongoing financial performance of Waste Connections'
operations. Waste Connections provides adjusted net income
attributable to Waste Connections to exclude the effects of items
management believes impact the comparability of operating results
between periods. Adjusted net income attributable to Waste
Connections has limitations due to the fact that it excludes items
that have an impact on the Company's financial condition and
results of operations. Adjusted net income attributable to
Waste Connections and adjusted net income per diluted share
attributable to Waste Connections are not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate these non-GAAP financial measures
differently.
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
Reported net income
(loss) attributable to Waste Connections
|
|
$
|
52,061
|
|
$
|
85,592
|
|
$
|
(95,764)
|
|
$
|
246,540
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
|
|
7,619
|
|
|
21,593
|
|
|
29,077
|
|
|
70,312
|
Impairments and other
operating items (b)
|
|
|
334
|
|
|
23,045
|
|
|
494,492
|
|
|
27,678
|
Transaction-related
expenses (c)
|
|
|
2,863
|
|
|
1,015
|
|
|
4,235
|
|
|
47,842
|
Pre-existing
Progressive Waste share-based grants (d)
|
|
|
-
|
|
|
4,466
|
|
|
-
|
|
|
14,289
|
Severance-related and
other expenses (e)
|
|
|
-
|
|
|
4,036
|
|
|
-
|
|
|
44,336
|
Synergy bonus
(f)
|
|
|
-
|
|
|
6,498
|
|
|
-
|
|
|
11,798
|
Tax effect (g)
|
|
|
(3,062)
|
|
|
(25,951)
|
|
|
(182,945)
|
|
|
(69,581)
|
Impact of deferred tax
adjustments (h)
|
|
|
-
|
|
|
-
|
|
|
(4,198)
|
|
|
1,964
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
59,815
|
|
$
|
120,294
|
|
$
|
244,897
|
|
$
|
395,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
|
$
|
0.42
|
|
$
|
0.49
|
|
$
|
(0.78)
|
|
$
|
1.60
|
Adjusted net
income
|
|
$
|
0.49
|
|
$
|
0.68
|
|
$
|
1.98
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted
shares
|
|
|
123,141,503
|
|
|
175,929,810
|
|
|
123,491,931
|
|
|
154,054,331
|
Adjusted diluted
shares (i)
|
|
|
123,141,503
|
|
|
175,929,810
|
|
|
123,871,636
|
|
|
154,054,331
|
|
|
|
|
|
(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, including excise tax
payments related to the Progressive Waste acquisition.
|
(d)
|
Reflects share-based
compensation costs, including changes in fair value, associated
with share-based awards granted by Progressive Waste outstanding at
the time of the Progressive Waste acquisition.
|
(e)
|
Reflects the addback
of severance-related and other items, including certain
professional fees, in connection with the Progressive Waste
acquisition.
|
(f)
|
Reflects the addback
of bonuses accrued pursuant to the Company's Synergy Bonus Program
adopted on July 19, 2016 in connection with the Progressive Waste
acquisition.
|
(g)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (f) is
calculated based on the applied tax rates for the respective
periods.
|
(h)
|
Reflects (1) the
elimination in 2015 of an increase to the income tax benefit
primarily associated with a decrease in our deferred tax
liabilities resulting from the impairment of assets in our E&P
segment that impacted the geographical apportionment of our state
income taxes and (2) in 2016 reflects a change in the geographical
apportionment of our deferred tax liabilities resulting from the
Progressive Waste acquisition.
|
(i)
|
Reflects reported
diluted shares adjusted for shares that were excluded from the
reported diluted shares calculation due to reporting a net loss
during the year ended December 31, 2015.
|
2017 OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
2017
Outlook
|
|
|
|
Estimate
|
|
|
Observation
|
Net income
attributable to Waste Connections
|
|
|
$
|
463,000
|
|
|
|
Plus: Net income attributable to noncontrolling
interests
|
|
|
|
1,000
|
|
|
|
Plus: Income tax provision
|
|
|
|
190,000
|
|
|
Approximate 29.0%
effective rate
|
Plus: Interest expense, net
|
|
|
|
120,000
|
|
|
|
Plus: Depreciation and Depletion
|
|
|
|
523,000
|
|
|
Approximately 11.75%
of revenue
|
Plus: Amortization
|
|
|
|
102,000
|
|
|
Approximately 2.30%
of revenue
|
Plus: Closure and post-closure accretion
|
|
|
|
11,000
|
|
|
Approximately 0.25%
of revenue
|
Adjusted
EBITDA
|
|
|
$
|
1,410,000
|
|
|
Approximately 31.7%
of revenue
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
Outlook
|
|
|
|
Estimate
|
|
|
Observation
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
$
|
1,175,000
|
|
|
Approximately 26.4%
of revenue
|
Less: Capital expenditures
|
|
|
|
(450,000)
|
|
|
|
Adjusted free cash
flow
|
|
|
$
|
725,000
|
|
|
Approximately 16.3%
of revenue
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/waste-connections-reports-fourth-quarter-results-and-provides-2017-outlook-300411051.html
SOURCE Waste Connections, Inc.