Waste Connections Reports Fourth Quarter Results and Provides 2021 Outlook
Waste Connections reported strong Q4 2020 results, with revenue of $1.398 billion and net income of $130.7 million ($0.50/share). Adjusted EBITDA reached $426.6 million, representing a 30.5% margin. The company expects a solid waste price and volume growth of 5% in 2021, anticipating revenues of $5.80 billion and net income of approximately $669 million. The company is focused on delivering double-digit growth in adjusted free cash flow and increasing shareholder returns through dividends and share repurchases.
- Q4 2020 revenue increased to $1.398 billion from $1.362 billion year-over-year.
- Net income for Q4 2020 was $130.7 million, consistent with the prior year.
- Adjusted EBITDA for Q4 2020 was $426.6 million, up from $419.0 million.
- 2021 revenue projection is approximately $5.80 billion, reflecting a solid business outlook.
- Expecting a 5% growth in solid waste pricing and volumes.
- Net income for the year 2020 decreased to $204.7 million from $566.8 million in 2019.
- Adjusted EBITDA for 2020 was $1.662 billion, down from $1.674 billion in 2019.
- Operating income for 2020 dropped significantly from $837.8 million to $412.4 million.
Fourth Quarter Highlights
- Improving solid waste volumes and increasing values for recycled commodities and renewable fuels drive results above expectations
- Revenue of
$1.39 8 billion, net income(a) of$130.7 million , and adjusted EBITDA(b) of$426.6 million , or30.5% of revenue - Net income and adjusted net income(b) of
$0.50 and$0.68 per share, respectively - Completes additional acquisitions to bring total acquired annualized revenue for the full year to approximately
$180 million
Looking at 2021
- Expects
5.0% solid waste price plus volume growth, 50bps margin expansion, and double-digit percentage growth in adjusted free cash flow(b) - Expects revenue to be approximately
$5.80 billion , excluding additional acquisitions - Expects net income to be approximately
$669 million - Expects adjusted EBITDA(b) to be approximately
$1.80 billion , or about31.0% of revenue - Expects net cash provided by operating activities to be approximately
$1.57 5 billion - Expects adjusted free cash flow(b) to be at least
$950 million , or16.4% of revenue - Expects double-digit percentage increase in cash dividends and share repurchases
TORONTO, Feb. 17, 2021 /PRNewswire/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the fourth quarter of 2020 and outlook for 2021.
"Q4 capped off a remarkable year for Waste Connections, culminating in a solid beat in the period and providing a higher entry point into 2021. A more than 250 basis points higher than expected improvement in solid waste volumes and increased values for recycled commodities and renewable fuels drove adjusted EBITDA(b) margins 50 basis points above expectations for the quarter. Moreover, we converted more than
Mr. Jackman added, "2020 was also noteworthy for the pace of acquisition activity, which accelerated in the fourth quarter to drive another outsized year of activity and an incremental
Mr. Jackman continued, "The strength of our results in 2020 and expectations for 2021 reflect our purposeful culture and differentiated strategy; moreover, they are a testament to the tireless efforts of our dedicated essential workers. We are extremely grateful for our employees' efforts to drive not only outsized financial performance during this challenging period but operational excellence as well, as they honor commitments to our customers, communities and each other."
Financial Impact from COVID-19
Throughout the COVID-19 pandemic, revenue from solid waste commercial collection, transfer and disposal has largely reflected the extent to which the slowdown in activity associated with shelter-in-place or other closure restrictions or requirements in effect since Q1 of 2020 have persisted. Q2 was the first full quarter to reflect the impacts from the COVID-19 pandemic, and activity levels in impacted lines of business have shown improvement in subsequent quarters. Recoveries in more impacted markets, particularly those where reopenings continue to be delayed or where additional restrictions have been imposed, have generally been less pronounced.
Improving trends since Q2 include as follows: solid waste collection, transfer and disposal revenue improved from down
Since the onset of the COVID-19 pandemic, protecting the health, welfare and safety of our employees has been our top priority. Recognizing the potential for financial hardship and other challenges, we looked to provide a safety net for our employees on issues of income and family health. To that end in 2020, we incurred over
The impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows in future periods will depend largely on future developments, including the duration and spread of the pandemic in the U.S. and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.
Q4 2020 Results
Revenue in the fourth quarter totaled
Adjusted net income(b) in the fourth quarter was
Full Year 2020 Results
For the year ended December 31, 2020, revenue was
Net income in 2020 was
Adjusted net income(b) in 2020 was
2021 Outlook
Waste Connections also announced its outlook for 2021, which assumes no change in the current economic environment. The Company's outlook excludes any impact from additional acquisitions that may close during the year, and expensing of transaction-related items. The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Certain components of the outlook for 2021 are subject to quarterly fluctuations. See reconciliations in the attached tables.
- Revenue is estimated to be approximately
$5.80 billion ; - Net income is estimated to be approximately
$669 million ; - Adjusted EBITDA(b) is estimated to be approximately
$1.80 billion , or about31.0% of revenue; - Net cash provided by operating activities is estimated to be approximately
$1.57 5 billion; - Capital expenditures are estimated to be approximately
$625 million ; and - Adjusted free cash flow(b) is estimated to be at least
$950 million , or16.4% of revenue.
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 over
Q4 2020 Earnings and 2021 Outlook Conference Call
Waste Connections will be hosting a conference call related to fourth quarter earnings and 2021 outlook on February 18th at 8:30 A.M. Eastern Time. To access the call, listeners should dial 800-763-6049 (within North America) or 212-231-2936 (international) approximately 10 minutes prior to the scheduled start time and ask the operator for the Waste Connections conference call (a passcode is not required). A replay of the conference call will be available until February 25, 2021 by calling 800-633-8284 (within North America) or 402-977-9140 (international) and entering Passcode #21989487. The call will be broadcast live over the Internet through a link on the Company's website at www.wasteconnections.com. A playback of the call will be available on the Company's website.
Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on February 18th, providing the Company's first quarter 2021 outlook for revenue, core price plus volume growth for solid waste, and adjusted EBITDA(b).
(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 |
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 seven 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 www.wasteconnections.com.
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), including "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections' current beliefs and expectations regarding future events and operating performance. These forward-looking statements are often identified by the words "may," "might," "believes," "thinks," "expects," "estimate," "continue," "intends" or other words of similar meaning. All of the forward-looking statements included in this press release are made pursuant to the safe harbor provisions of the PSLRA and applicable securities laws in Canada. Forward-looking statements involve risks and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements about expected 2021 financial results, outlook and related assumptions, potential growth and margin expansion, potential acquisition activity and return of capital to shareholders. 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 |
WASTE CONNECTIONS, INC. | |||||||||||||
Three months ended December 31, | Twelve months ended December 31, | ||||||||||||
2019 | 2020 | 2019 | 2020 | ||||||||||
Revenues | $ | 1,361,960 | $ | 1,398,251 | $ | 5,388,679 | $ | 5,445,990 | |||||
Operating expenses: | |||||||||||||
Cost of operations | 814,151 | 846,851 | 3,198,757 | 3,276,808 | |||||||||
Selling, general and administrative | 136,146 | 133,419 | 546,278 | 537,632 | |||||||||
Depreciation | 156,779 | 161,462 | 618,396 | 621,102 | |||||||||
Amortization of intangibles | 31,701 | 35,239 | 125,522 | 131,302 | |||||||||
Impairments and other operating items | 28,999 | 24,136 | 61,948 | 466,718 | |||||||||
Operating income | 194,184 | 197,144 | 837,778 | 412,428 | |||||||||
Interest expense | (36,056) | (42,813) | (147,368) | (162,375) | |||||||||
Interest income | 2,592 | 857 | 9,777 | 5,253 | |||||||||
Other income (expense), net | 1,142 | 1,654 | 5,704 | (1,392) | |||||||||
Income before income tax provision | 161,862 | 156,842 | 705,891 | 253,914 | |||||||||
Income tax provision | (28,671) | (26,268) | (139,210) | (49,922) | |||||||||
Net income | 133,191 | 130,574 | 566,681 | 203,992 | |||||||||
Plus: Net loss attributable to noncontrolling interests | 71 | 90 | 160 | 685 | |||||||||
Net income attributable to Waste Connections | $ | 133,262 | $ | 130,664 | $ | 566,841 | $ | 204,677 | |||||
Earnings per common share attributable to Waste | |||||||||||||
Basic | $ | 0.51 | $ | 0.50 | $ | 2.15 | $ | 0.78 | |||||
Diluted | $ | 0.50 | $ | 0.50 | $ | 2.14 | $ | 0.78 | |||||
Shares used in the per share calculations: | |||||||||||||
Basic | 263,865,203 | 263,001,985 | 263,792,693 | 263,189,699 | |||||||||
Diluted | 264,636,883 | 263,598,602 | 264,526,561 | 263,687,539 | |||||||||
Cash dividends per common share | $ | 0.185 | $ | 0.205 | $ | 0.665 | $ | 0.760 | |||||
WASTE CONNECTIONS, INC. | |||||||
December 31, 2019 | December 31, 2020 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 326,738 | $ | 617,294 | |||
Accounts receivable, net of allowance for credit losses of | 662,808 | 630,264 | |||||
Prepaid expenses and other current assets | 141,052 | 160,714 | |||||
Total current assets | 1,130,598 | 1,408,272 | |||||
Restricted cash | 96,483 | 97,095 | |||||
Restricted investments | 51,179 | 57,516 | |||||
Property and equipment, net | 5,516,347 | 5,284,506 | |||||
Operating lease right-of-use assets | 183,220 | 170,923 | |||||
Goodwill | 5,510,851 | 5,726,650 | |||||
Intangible assets, net | 1,163,063 | 1,155,079 | |||||
Other assets, net | 85,954 | 92,323 | |||||
Total assets | $ | 13,737,695 | $ | 13,992,364 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 436,970 | $ | 290,820 | |||
Book overdraft | 15,954 | 17,079 | |||||
Accrued liabilities | 280,808 | 404,923 | |||||
Current portion of operating lease liabilities | 29,929 | 30,671 | |||||
Current portion of contingent consideration | 26,659 | 43,297 | |||||
Deferred revenue | 216,443 | 233,596 | |||||
Current portion of long-term debt and notes payable | 465 | 8,268 | |||||
Total current liabilities | 1,007,228 | 1,028,654 | |||||
Long-term portion of debt and notes payable | 4,353,782 | 4,708,678 | |||||
Long-term portion of operating lease liabilities | 160,033 | 147,223 | |||||
Long-term portion of contingent consideration | 42,825 | 28,439 | |||||
Deferred income taxes | 818,622 | 760,044 | |||||
Other long-term liabilities | 416,851 | 455,888 | |||||
Total liabilities | 6,799,341 | 7,128,926 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Common shares: 263,699,675 shares issued and 263,618,161 shares outstanding | 4,135,343 | 4,030,368 | |||||
Additional paid-in capital | 154,917 | 170,555 | |||||
Accumulated other comprehensive loss | (10,963) | (651) | |||||
Treasury shares: 81,514 and 74,184 shares at December 31, 2019 and 2020, respectively | - | - | |||||
Retained earnings | 2,654,207 | 2,659,001 | |||||
Total Waste Connections' equity | 6,933,504 | 6,859,273 | |||||
Noncontrolling interest in subsidiaries | 4,850 | 4,165 | |||||
Total equity | 6,938,354 | 6,863,438 | |||||
$ | 13,737,695 | $ | 13,992,364 | ||||
WASTE CONNECTIONS, INC. | |||||||
Twelve months ended December 31, | |||||||
2019 | 2020 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 566,681 | $ | 203,992 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on disposal of assets and impairments | 60,592 | 445,647 | |||||
Depreciation | 618,396 | 621,102 | |||||
Amortization of intangibles | 125,522 | 131,302 | |||||
Deferred income taxes, net of acquisitions | 54,637 | (50,487) | |||||
Amortization of debt issuance costs | 5,001 | 7,509 | |||||
Share-based compensation | 42,671 | 45,751 | |||||
Interest accretion | 16,426 | 17,205 | |||||
Payment of contingent consideration recorded in earnings | - | (10,371) | |||||
Adjustments to contingent consideration | 1,498 | 18,418 | |||||
Other | (2,240) | 2,426 | |||||
Net change in operating assets and liabilities, net of acquisitions | 51,363 | (23,973) | |||||
Net cash provided by operating activities | 1,540,547 | 1,408,521 | |||||
Cash flows from investing activities: | |||||||
Payments for acquisitions, net of cash acquired | (736,610) | (388,789) | |||||
Capital expenditures for property and equipment | (634,406) | (597,053) | |||||
Capital expenditure for undeveloped landfill property | (31,683) | (67,508) | |||||
Investment in noncontrolling interest | (25,000) | - | |||||
Proceeds from disposal of assets | 3,566 | 19,084 | |||||
Other | (1,873) | (11,777) | |||||
Net cash used in investing activities | (1,426,006) | (1,046,043) | |||||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | 1,575,795 | 1,815,625 | |||||
Principal payments on notes payable and long-term debt | (1,470,711) | (1,542,958) | |||||
Payment of contingent consideration recorded at acquisition date | (3,200) | (12,566) | |||||
Change in book overdraft | (2,564) | 1,096 | |||||
Payments for repurchase of common shares | - | (105,654) | |||||
Payments for cash dividends | (175,067) | (199,883) | |||||
Tax withholdings related to net share settlements of equity-based compensation | (17,660) | (23,446) | |||||
Debt issuance costs | (5,953) | (11,117) | |||||
Proceeds from sale of common shares held in trust | 4,036 | 679 | |||||
Distributions to noncontrolling interests | (570) | - | |||||
Net cash used in financing activities | (95,894) | (78,224) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 608 | 6,914 | |||||
Net increase in cash, cash equivalents and restricted cash | 19,255 | 291,168 | |||||
Cash, cash equivalents and restricted cash at beginning of year | 403,966 | 423,221 | |||||
Cash, cash equivalents and restricted cash at end of year | $ | 423,221 | $ | 714,389 | |||
ADDITIONAL STATISTICS | |||||||||
Solid Waste Internal Growth: The following table reflects a breakdown of the components of our solid waste internal growth for | |||||||||
U.S. | Canada | Total | |||||||
Core Price | |||||||||
Surcharges | ( | ( | ( | ||||||
Volume | ( | ( | ( | ||||||
Recycling | |||||||||
Foreign Exchange Impact | - | ||||||||
Total | |||||||||
Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended December 31, | |||||||||||
Three months ended December 31, 2019 | |||||||||||
Revenue | Inter- Elimination | Reported Revenue | % | ||||||||
Solid Waste Collection | $ | 974,886 | $ | (2,499) | $ | 972,387 | |||||
Solid Waste Disposal and Transfer | 476,840 | (193,474) | 283,366 | ||||||||
Solid Waste Recycling | 13,569 | (365) | 13,204 | ||||||||
E&P Waste Treatment, Recovery and Disposal | 66,144 | (3,661) | 62,483 | ||||||||
Intermodal and Other | 30,646 | (126) | 30,520 | ||||||||
Total | $ | 1,562,085 | $ | (200,125) | $ | 1,361,960 | |||||
Three months ended December 31, 2020 | |||||||||||
Revenue | Inter- Elimination | Reported Revenue | % | ||||||||
Solid Waste Collection | $ | 1,024,099 | $ | (3,341) | $ | 1,020,758 | |||||
Solid Waste Disposal and Transfer | 493,093 | (200,272) | 292,821 | ||||||||
Solid Waste Recycling | 26,688 | (909) | 25,779 | ||||||||
E&P Waste Treatment, Recovery and Disposal | 27,690 | (2,163) | 25,527 | ||||||||
Intermodal and Other | 33,427 | (61) | 33,366 | ||||||||
Total | $ | 1,604,997 | $ | (206,746) | $ | 1,398,251 | |||||
Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three and | ||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2019 | 2020 | 2019 | 2020 | |||||||||
Acquisitions, net | $ | 68,465 | $ | 52,721 | $ | 291,938 | $ | 197,231 | ||||
ADDITIONAL STATISTICS (continued) | ||||||||||||
Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three and twelve month periods ended | ||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2019 | 2020 | 2019 | 2020 | |||||||||
Cash Interest Paid | $ | 54,078 | $ | 55,910 | $ | 139,694 | $ | 142,310 | ||||
Cash Taxes Paid | 39,089 | 43,603 | 81,049 | 104,618 | ||||||||
Debt to Book Capitalization as of December 31, 2020: | ||||||||||||
Internalization for the three months ended December 31, 2020: | ||||||||||||
Days Sales Outstanding for the three months ended December 31, 2020: 41 (26 net of deferred revenue) | ||||||||||||
Share Information for the three months ended December 31, 2020: | ||||||||||||
Basic shares outstanding | 263,001,985 | |
Dilutive effect of equity-based awards | 596,617 | |
Diluted shares outstanding | 263,598,602 |
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry. Management uses adjusted EBITDA as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations. Waste Connections defines adjusted EBITDA as net income attributable to Waste Connections, plus or minus net income (loss) attributable to noncontrolling interests, plus income tax provision, plus interest expense, less interest income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on impairments and other operating items, plus other expense, less other income. Waste Connections further adjusts this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of its business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted EBITDA differently.
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2019 | 2020 | 2019 | 2020 | |||||||||
Net income attributable to Waste Connections | $ | 133,262 | $ | 130,664 | $ | 566,841 | $ | 204,677 | ||||
Less: Net loss attributable to noncontrolling interests | (71) | (91) | (160) | (685) | ||||||||
Plus: Income tax provision | 28,671 | 26,269 | 139,210 | 49,922 | ||||||||
Plus: Interest expense | 36,056 | 42,813 | 147,368 | 162,375 | ||||||||
Less: Interest income | (2,592) | (857) | (9,777) | (5,253) | ||||||||
Plus: Depreciation and amortization | 188,480 | 196,701 | 743,918 | 752,404 | ||||||||
Plus: Closure and post-closure accretion | 3,649 | 3,755 | 14,471 | 15,095 | ||||||||
Plus: Impairments and other operating items | 28,999 | 24,136 | 61,948 | 466,718 | ||||||||
Plus/(Less): Other expense (income), net | (1,142) | (1,654) | (5,704) | 1,392 | ||||||||
Adjustments: | ||||||||||||
Plus: Transaction-related expenses(a) | 4,278 | 5,306 | 12,335 | 9,803 | ||||||||
Plus (Less): Fair value changes to equity awards(b) | (589) | (485) | 3,104 | 5,536 | ||||||||
Adjusted EBITDA | $ | 419,001 | $ | 426,557 | $ | 1,673,554 | $ | 1,661,984 | ||||
As % of revenues | ||||||||||||
____________________________ | |
(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 valuation and liquidity measure in the solid waste industry. Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations. Waste Connections defines adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment and distributions to noncontrolling interests. Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of its business. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently.
Twelve months ended December 31, | ||||||
2019 | 2020 | |||||
Net cash provided by operating activities | $ | 1,540,547 | $ | 1,408,521 | ||
Plus/(Less): Change in book overdraft | (2,564) | 1,096 | ||||
Plus: Proceeds from disposal of assets | 3,566 | 19,084 | ||||
Less: Capital expenditures for property and equipment | (634,406) | (597,053) | ||||
Less: Distributions to noncontrolling interests | (570) | - | ||||
Adjustments: | ||||||
Payment of contingent consideration recorded in earnings(a) | - | 10,371 | ||||
Cash received for divestitures(b) | (2,376) | (10,673) | ||||
Transaction-related expenses(c) | 12,335 | 9,803 | ||||
Pre-existing Progressive Waste share-based grants(d) | 4,810 | 5,770 | ||||
Tax effect(e) | (4,565) | (5,021) | ||||
Adjusted free cash flow | $ | 916,777 | $ | 841,898 | ||
As % of revenues | ||||||
____________________________ | |
(a) | Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of |
(b) | Reflects the elimination of cash received in conjunction with the divestiture of certain operations. |
(c) | Reflects the addback of acquisition-related transaction costs. |
(d) | Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period. |
(e) | The aggregate tax effect of footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods. |
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of U.S. dollars, except per share amounts)
Reconciliation of Adjusted Net Income attributable to Waste Connections and Adjusted Net Income per Diluted Share attributable to Waste Connections:
Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as a valuation measure in the solid waste industry. Management uses adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations. Waste Connections provides adjusted net income attributable to Waste Connections to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income attributable to Waste Connections has limitations due to the fact that it excludes items that have an impact on the Company's financial condition and results of operations. Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently.
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2019 | 2020 | 2019 | 2020 | |||||||||
Reported net income attributable to Waste Connections | $ | 133,262 | $ | 130,664 | $ | 566,841 | $ | 204,677 | ||||
Adjustments: | ||||||||||||
Amortization of intangibles(a) | 31,701 | 35,239 | 125,522 | 131,302 | ||||||||
Impairments and other operating items(b) | 28,999 | 24,136 | 61,948 | 466,718 | ||||||||
Transaction-related expenses(c) | 4,278 | 5,306 | 12,335 | 9,803 | ||||||||
Fair value changes to equity awards(d) | (589) | (485) | 3,104 | 5,536 | ||||||||
Tax effect(e) | (16,234) | (16,235) | (50,189) | (153,758) | ||||||||
Tax items(f) | - | - | - | 31,508 | ||||||||
Adjusted net income attributable to Waste Connections | $ | 181,417 | $ | 178,625 | $ | 719,561 | $ | 695,786 | ||||
Diluted earnings per common share attributable to Waste | ||||||||||||
Reported net income | $ | 0.50 | $ | 0.50 | $ | 2.14 | $ | 0.78 | ||||
Adjusted net income | $ | 0.69 | $ | 0.68 | $ | 2.72 | $ | 2.64 | ||||
____________________________ | |
(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) | The aggregate tax effect of the adjustments in footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods. |
(f) | Reflects the impact of a portion of the Company's 2019 inter-entity payments no longer being deductible for tax purposes due to the finalization of |
2021 OUTLOOK | |||||
Reconciliation of Adjusted EBITDA: | |||||
2021 Outlook | |||||
Estimates | Observation | ||||
Net income attributable to Waste Connections | $ | 669,000 | |||
Plus: Income tax provision | 167,400 | Approximate | |||
Plus: Interest expense, net | 162,000 | ||||
Plus: Depreciation and Depletion | 660,000 | Approximately | |||
Plus: Amortization | 126,600 | ||||
Plus: Closure and post-closure accretion | 15,000 | ||||
Adjusted EBITDA | $ | 1,800,000 | Approximately | ||
Reconciliation of Adjusted Free Cash Flow: | ||
2021 Outlook | ||
Estimates | ||
Net cash provided by operating activities | $ | 1,575,000 |
Less: Capital expenditures | (625,000) | |
Adjusted free cash flow | $ | 950,000 |
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SOURCE Waste Connections, Inc.
FAQ
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