- Continued momentum from higher solid waste pricing and
volumes, along with tailwinds from higher recovered commodity
values, drive outsized results and increased full year
outlook
- Revenue of $1.534 billion, up
17.5% year over year
- Reports 11.4% solid waste price + volume growth, exceeding
outlook
- Net income(a) of $177.0
million, and adjusted EBITDA(b) of $484.9 million, or 31.6% of revenue, exceeding
outlook and up 140 basis points year over year
- Net income and adjusted net income(b) of
$0.68 and $0.81 per share, respectively
- Year to date net cash provided by operating activities of
$848.5 million and adjusted free cash
flow(b) of $585.8 million,
or 20.0% of revenue and up 18.5% year over year
- Provides full year 2021 outlook for revenue of approximately
$5.975 billion, net income of
approximately $690 million, adjusted
EBITDA(b) of approximately $1.875
billion, net cash provided by operating activities of
approximately $1.666 billion, and
adjusted free cash flow(b) of approximately $1 billion
TORONTO, Aug. 4, 2021 /PRNewswire/ -- Waste
Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the
"Company") today announced its results for the second quarter of
2021.
"Broad-based strength drove an across the board beat in the
second quarter, positioning us to raise our outlook for the full
year. Revenue and adjusted EBITDA(b) in Q2
increased 17.5% and 23.0%, respectively, over the prior year
primarily as a result of continued improvement in solid waste
pricing and volume growth, and strength in recovered commodity
values. These trends drove year to date adjusted
EBITDA(b) margin expansion of 110 basis points and
adjusted free cash flow(b) of over $585 million, up 18.5% year over year," said
Worthing F. Jackman, President and
Chief Executive Officer. "Given the strength of our results
in the first half of the year and expected continuing momentum and
margin expansion from these trends, we believe we are on track to
report approximately $5.975 billion
of revenue and $1.875 billion of
adjusted EBITDA(b) in 2021, exceeding our initial
outlook provided in February. More importantly, full year
adjusted free cash flow(b) is also pacing ahead of
initial expectations and is now estimated at approximately
$1 billion, or 53% of adjusted
EBITDA(b)."
Mr. Jackman continued, "2021 also has the potential to be
another outsized year of acquisition activity. Year to date,
we have signed or closed 14 acquisitions with total annualized
revenue of approximately $115
million, including $75 million
of franchise operations in California, Nevada and Oregon expected to close later this
year. We continue to see record amounts of seller interest
driving elevated acquisition dialogue and, as communicated
throughout the year, expect closings related to most of this
activity to be more weighted to the second half of the year.
Our recently expanded credit facility and continuing balance sheet
strength provide the flexibility to fund outsized acquisition
activity along with an increasing return of capital to
shareholders."
Q2 2021 Results
Revenue in the second quarter totaled $1.534 billion, up from $1.306 billion in the year ago period.
Operating income was $266.8 million,
which included $6.4 million in fair
value accounting changes to equity awards and $6.1 million of impairments and other operating
items. This compares to operating loss of $232.4 million in the second quarter of 2020,
which included $437.3 million in
impairments primarily related to a decrease in property, plant and
equipment at certain E&P waste landfills. Net income in
the second quarter was $177.0
million, or $0.68 per share on
a diluted basis of 261.4 million shares. In the year ago
period, the Company reported net loss of $227.1 million, or $0.86 per share on a diluted basis of 263.0
million shares.
Adjusted net income(b) in the second quarter was
$210.9 million, or $0.81 per diluted share, versus $158.0 million, or $0.60 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the second quarter
was $484.9 million and 31.6% of
revenue, as compared to $394.3
million and 30.2% of revenue 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.
Six Months Year to Date Results
For the six months ended June 30,
2021, revenue was $2.930
billion, up from $2.658
billion in the year ago period. Operating income,
which included $7.3 million primarily
related to fair value accounting changes to equity awards and
$6.7 million in impairments and other
operating items, was $505.2 million,
as compared to operating loss of $15.4
million for the same period in 2020, which included
$445.2 million primarily related to
impairments and other operating items.
Net income for the six months ended June
30, 2021 was $337.4 million,
or $1.29 per share on a diluted basis
of 262.3 million shares. In the year ago period, the Company
reported net loss of $84.0 million,
or $0.32 per share on a diluted basis
of 263.4 million shares.
Adjusted net income(b) for the six months ended
June 30, 2021 was $396.3 million, or $1.51 per diluted share, compared to $328.5 million, or $1.25 per diluted share, in the year ago
period. Adjusted EBITDA(b) for the six months ended
June 30, 2021 was $918.1 million and 31.3% of revenue, up from
$802.8 million and 30.2% in the prior
year period.
Updated 2021 Outlook
Waste Connections also updated its outlook for 2021, which
assumes no change in the current economic environment or underlying
economic trends, including as a result of or related to impacts
from the COVID-19 pandemic or the Delta variant of the
coronavirus. 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 $5.975 billion, as compared to our original
revenue outlook of approximately $5.800
billion.
- Net income is estimated to be approximately $690 million, and adjusted EBITDA(b)
is estimated to be approximately $1.875
billion, or about 31.4% of revenue, as compared to our
original adjusted EBITDA(b) outlook of $1.800 billion or 31.0% of revenue.
- Capital expenditures are estimated to be approximately
$675 million, as compared to our
original capital expenditures outlook of approximately $625 million.
- Net cash provided by operating activities is estimated to be
approximately $1.666 billion, as
compared to our original outlook of $1.575
billion, and adjusted free cash flow(b) is
estimated to be approximately $1
billion, or about 16.7% of revenue, as compared to our
original adjusted free cash flow(b) outlook of
approximately $950 million or 16.4%
of revenue.
Q2 2021 Earnings Conference Call
Waste Connections will be hosting a conference call related to
first quarter earnings on August
5th 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,
listeners may access the call by dialing 800-908-8370 (within
North America) or 312-281-1211
(international) approximately 10 minutes prior to the scheduled
start time; a passcode is not required. A replay of the
conference call will be available until August 12, 2021, by calling 800-633-8284 (within
North America) or 402-977-9140
(international) and entering Passcode
#21995717.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
August 5th, providing the
Company's third quarter 2021 outlook for revenue, 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 wasteconnections.com.
Environmental, Social and Governance
Waste Connections views its Environmental, Social and Governance
("ESG") efforts as integral to its business, with initiatives
consistent with its objective of long-term value creation. In
2020, the Company introduced long-term, aspirational ESG targets
and committed over $500 million for
investments to meet or exceed such sustainability targets. These
investments primarily focus on reducing emissions, increasing
resource recovery of both recyclable commodities and clean energy
fuels, reducing reliance on off-site disposal for landfill
leachate, further improving safety through reduced incidents and
enhancing employee engagement through improved voluntary turnover
and Servant Leadership scores. For more information, visit
the Waste Connections website at
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 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:
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|
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|
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|
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Mary Anne Whitney /
(832) 442-2253
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Joe Box / (832)
442-2153
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maryannew@wasteconnections.com
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joe.box@wasteconnections.com
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WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
THREE AND SIX MONTHS
ENDED JUNE 30, 2020 AND 2021
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,305,782
|
|
$
|
1,533,931
|
|
$
|
2,658,187
|
|
$
|
2,929,874
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
785,710
|
|
|
901,191
|
|
|
1,601,134
|
|
|
1,727,111
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|
Selling, general and
administrative
|
|
|
132,158
|
|
|
157,943
|
|
|
268,210
|
|
|
299,365
|
|
Depreciation
|
|
|
151,230
|
|
|
169,221
|
|
|
302,051
|
|
|
326,624
|
|
Amortization of
intangibles
|
|
|
31,771
|
|
|
32,707
|
|
|
63,409
|
|
|
64,899
|
|
Impairments and other
operating items
|
|
|
437,270
|
|
|
6,081
|
|
|
438,777
|
|
|
6,715
|
|
Operating income
(loss)
|
|
|
(232,357)
|
|
|
266,788
|
|
|
(15,394)
|
|
|
505,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(40,936)
|
|
|
(41,328)
|
|
|
(78,926)
|
|
|
(83,753)
|
|
Interest
income
|
|
|
1,317
|
|
|
744
|
|
|
3,493
|
|
|
1,848
|
|
Other income
(expense), net
|
|
|
5,772
|
|
|
(1,235)
|
|
|
(3,749)
|
|
|
2,312
|
|
Income (loss) before
income tax provision
|
|
|
(266,204)
|
|
|
224,969
|
|
|
(94,576)
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|
|
425,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(provision) benefit
|
|
|
38,737
|
|
|
(47,868)
|
|
|
10,003
|
|
|
(88,159)
|
|
Net income
(loss)
|
|
|
(227,467)
|
|
|
177,101
|
|
|
(84,573)
|
|
|
337,408
|
|
Plus (less): Net loss
(income) attributable to noncontrolling interests
|
|
|
395
|
|
|
(54)
|
|
|
536
|
|
|
(52)
|
|
Net income (loss)
attributable to Waste Connections
|
|
$
|
(227,072)
|
|
$
|
177,047
|
|
$
|
(84,037)
|
|
$
|
337,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.86)
|
|
$
|
0.68
|
|
$
|
(0.32)
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.86)
|
|
$
|
0.68
|
|
$
|
(0.32)
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
262,994,275
|
|
|
260,951,405
|
|
|
263,390,685
|
|
|
261,791,088
|
|
Diluted
|
|
|
262,994,275
|
|
|
261,418,573
|
|
|
263,390,685
|
|
|
262,269,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.185
|
|
$
|
0.205
|
|
$
|
0.37
|
|
$
|
0.41
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2020
|
|
June 30,
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
617,294
|
|
$
|
727,395
|
|
Accounts receivable,
net of allowance for credit losses of $19,380 and $19,527 at
December 31, 2020 and June 30, 2021, respectively
|
|
|
630,264
|
|
|
649,561
|
|
Prepaid expenses and
other current assets
|
|
|
160,714
|
|
|
129,487
|
|
Total current
assets
|
|
|
1,408,272
|
|
|
1,506,443
|
|
Restricted
cash
|
|
|
97,095
|
|
|
110,367
|
|
Restricted
investments
|
|
|
57,516
|
|
|
59,825
|
|
Property and
equipment, net
|
|
|
5,284,506
|
|
|
5,249,904
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|
Operating lease
right-of-use assets
|
|
|
170,923
|
|
|
169,523
|
|
Goodwill
|
|
|
5,726,650
|
|
|
5,818,749
|
|
Intangible assets,
net
|
|
|
1,155,079
|
|
|
1,102,516
|
|
Other assets,
net
|
|
|
92,323
|
|
|
88,880
|
|
Total
assets
|
|
$
|
13,992,364
|
|
$
|
14,106,207
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
290,820
|
|
$
|
326,085
|
|
Book
overdraft
|
|
|
17,079
|
|
|
16,902
|
|
Deferred
revenue
|
|
|
233,596
|
|
|
250,254
|
|
Accrued
liabilities
|
|
|
404,923
|
|
|
411,333
|
|
Current portion of
operating lease liabilities
|
|
|
30,671
|
|
|
37,352
|
|
Current portion of
contingent consideration
|
|
|
43,297
|
|
|
43,359
|
|
Current portion of
long-term debt and notes payable
|
|
|
8,268
|
|
|
6,997
|
|
Total current
liabilities
|
|
|
1,028,654
|
|
|
1,092,282
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
4,708,678
|
|
|
4,762,857
|
|
Long-term portion of
operating lease liabilities
|
|
|
147,223
|
|
|
139,329
|
|
Long-term portion of
contingent consideration
|
|
|
28,439
|
|
|
24,670
|
|
Deferred income
taxes
|
|
|
760,044
|
|
|
772,867
|
|
Other long-term
liabilities
|
|
|
455,888
|
|
|
445,602
|
|
Total
liabilities
|
|
|
7,128,926
|
|
|
7,237,607
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
262,899,174 shares issued and 262,824,990 shares outstanding at
December 31, 2020; 260,506,316 shares issued and
260,433,450 shares outstanding at June 30, 2021
|
|
|
4,030,368
|
|
|
3,724,859
|
|
Additional paid-in
capital
|
|
|
170,555
|
|
|
172,232
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(651)
|
|
|
78,265
|
|
Treasury shares:
74,184 and 72,866 shares at December 31, 2020 and June 30,
2021, respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
2,659,001
|
|
|
2,889,027
|
|
Total Waste
Connections' equity
|
|
|
6,859,273
|
|
|
6,864,383
|
|
Noncontrolling
interest in subsidiaries
|
|
|
4,165
|
|
|
4,217
|
|
Total
equity
|
|
|
6,863,438
|
|
|
6,868,600
|
|
|
|
$
|
13,992,364
|
|
$
|
14,106,207
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE
30, 2020 AND 2021
(Unaudited)
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
|
2020
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(84,573)
|
|
$
|
337,408
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
420,169
|
|
|
6,229
|
|
Depreciation
|
|
|
302,051
|
|
|
326,624
|
|
Amortization of
intangibles
|
|
|
63,409
|
|
|
64,899
|
|
Deferred income taxes,
net of acquisitions
|
|
|
(66,821)
|
|
|
3,520
|
|
Amortization of debt
issuance costs
|
|
|
4,783
|
|
|
2,689
|
|
Share-based
compensation
|
|
|
24,643
|
|
|
28,724
|
|
Interest
accretion
|
|
|
8,512
|
|
|
8,199
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
-
|
|
|
(520)
|
|
Adjustments to
contingent consideration
|
|
|
16,794
|
|
|
89
|
|
Other
|
|
|
1,596
|
|
|
(1,118)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
62,622
|
|
|
71,735
|
|
Net cash provided by
operating activities
|
|
|
753,185
|
|
|
848,478
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(86,325)
|
|
|
(67,493)
|
|
Capital expenditures
for property and equipment
|
|
|
(268,711)
|
|
|
(271,392)
|
|
Capital expenditure
for undeveloped landfill property
|
|
|
(16,450)
|
|
|
-
|
|
Proceeds from disposal
of assets
|
|
|
10,642
|
|
|
7,906
|
|
Other
|
|
|
888
|
|
|
(1,815)
|
|
Net cash used in
investing activities
|
|
|
(359,956)
|
|
|
(332,794)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
1,790,625
|
|
|
311,000
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(1,484,118)
|
|
|
(267,050)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(2,251)
|
|
|
(5,595)
|
|
Change in book
overdraft
|
|
|
(606)
|
|
|
(190)
|
|
Payments for
repurchase of common shares
|
|
|
(105,654)
|
|
|
(305,640)
|
|
Payments for cash
dividends
|
|
|
(96,912)
|
|
|
(107,330)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(23,291)
|
|
|
(18,510)
|
|
Debt issuance
costs
|
|
|
(10,957)
|
|
|
-
|
|
Proceeds from sale of
common shares held in trust
|
|
|
679
|
|
|
131
|
|
Net cash provided by
(used in) financing activities
|
|
|
67,515
|
|
|
(393,184)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
(541)
|
|
|
873
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
460,203
|
|
|
123,373
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
|
423,221
|
|
|
714,389
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
883,424
|
|
$
|
837,762
|
|
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 six month periods ended June 30, 2021:
|
|
Three months
ended
June 30, 2021
|
|
Six months ended
June 30, 2021
|
Core Price
|
|
4.7
|
%
|
|
4.6
|
%
|
Surcharges
|
|
0.2
|
%
|
|
0.0
|
%
|
Volume
|
|
6.5
|
%
|
|
1.6
|
%
|
Recycling
|
|
1.5
|
%
|
|
1.2
|
%
|
Foreign Exchange
Impact
|
|
1.5
|
%
|
|
1.1
|
%
|
Total
|
|
14.4
|
%
|
|
8.5
|
%
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
June 30, 2020 and 2021:
|
|
Three months ended June 30,
2020
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
948,072
|
|
$
|
(3,432)
|
|
$
|
944,640
|
|
72.4
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
469,704
|
|
|
(191,301)
|
|
|
278,403
|
|
21.3
|
%
|
Solid Waste
Recycling
|
|
|
20,217
|
|
|
(660)
|
|
|
19,557
|
|
1.5
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
40,152
|
|
|
(4,644)
|
|
|
35,508
|
|
2.7
|
%
|
Intermodal and
Other
|
|
|
27,811
|
|
|
(137)
|
|
|
27,674
|
|
2.1
|
%
|
Total
|
|
$
|
1,505,956
|
|
$
|
(200,174)
|
|
$
|
1,305,782
|
|
100.0
|
%
|
|
|
|
Three months ended June 30,
2021
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,098,319
|
|
$
|
(3,232)
|
|
$
|
1,095,087
|
|
71.4
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
544,257
|
|
|
(215,481)
|
|
|
328,776
|
|
21.4
|
%
|
Solid Waste
Recycling
|
|
|
41,539
|
|
|
(1,113)
|
|
|
40,426
|
|
2.7
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
34,607
|
|
|
(3,454)
|
|
|
31,153
|
|
2.0
|
%
|
Intermodal and
Other
|
|
|
38,590
|
|
|
(101)
|
|
|
38,489
|
|
2.5
|
%
|
Total
|
|
$
|
1,757,312
|
|
$
|
(223,381)
|
|
$
|
1,533,931
|
|
100.0
|
%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three and six month periods ended June 30,
2020 and 2021:
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Acquisitions,
net
|
|
$
|
40,727
|
|
$
|
44,125
|
|
$
|
100,296
|
|
$
|
84,666
|
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 six month periods ended
June 30, 2020 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Cash Interest
Paid
|
|
$
|
45,782
|
|
$
|
56,516
|
|
$
|
62,828
|
|
$
|
81,962
|
Cash Taxes
Paid
|
|
|
8,440
|
|
|
32,072
|
|
|
13,050
|
|
|
60,693
|
Debt to Book Capitalization as of June
30, 2021: 41%
Internalization for the three months ended
June 30, 2021: 56%
Days Sales Outstanding for the three months ended
June 30, 2021: 39 (24 net
of deferred revenue)
Share Information for the three months ended June 30, 2021:
|
|
|
Basic shares
outstanding
|
|
260,951,405
|
Dilutive effect of
equity-based awards
|
|
467,168
|
Diluted shares
outstanding
|
|
261,418,573
|
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 or minus net income (loss)
attributable to noncontrolling interests, plus or minus income tax
provision (benefit), 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
June 30,
|
|
Six months
ended
June 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Net income (loss)
attributable to Waste Connections
|
|
$
|
(227,072)
|
|
$
|
177,047
|
|
$
|
(84,037)
|
|
$
|
337,356
|
Plus/(less): Net
income (loss) attributable to noncontrolling interests
|
|
|
(395)
|
|
|
54
|
|
|
(536)
|
|
|
52
|
Plus/(less): Income
tax provision (benefit)
|
|
|
(38,737)
|
|
|
47,868
|
|
|
(10,003)
|
|
|
88,159
|
Plus: Interest
expense
|
|
|
40,936
|
|
|
41,328
|
|
|
78,926
|
|
|
83,753
|
Less: Interest
income
|
|
|
(1,317)
|
|
|
(744)
|
|
|
(3,493)
|
|
|
(1,848)
|
Plus: Depreciation
and amortization
|
|
|
183,001
|
|
|
201,928
|
|
|
365,460
|
|
|
391,523
|
Plus: Closure and
post-closure accretion
|
|
|
3,709
|
|
|
3,666
|
|
|
7,617
|
|
|
7,375
|
Plus: Impairments and
other operating items
|
|
|
437,270
|
|
|
6,081
|
|
|
438,777
|
|
|
6,715
|
Plus/(Less): Other
expense (income), net
|
|
|
(5,772)
|
|
|
1,235
|
|
|
3,749
|
|
|
(2,312)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
1,016
|
|
|
57
|
|
|
2,162
|
|
|
583
|
Plus: Fair value
changes to equity awards(b)
|
|
|
1,683
|
|
|
6,385
|
|
|
4,223
|
|
|
6,723
|
Adjusted
EBITDA
|
|
$
|
394,322
|
|
$
|
484,905
|
|
$
|
802,845
|
|
$
|
918,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.2%
|
|
|
31.6%
|
|
|
30.2%
|
|
|
31.3%
|
____________________________
|
(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.
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Net cash provided by
operating activities
|
|
$
|
383,599
|
|
$
|
448,081
|
|
$
|
753,185
|
|
$
|
848,478
|
Plus/(Less): Change
in book overdraft
|
|
|
3,243
|
|
|
16,659
|
|
|
(606)
|
|
|
(190)
|
Plus: Proceeds from
disposal of assets
|
|
|
7,143
|
|
|
5,826
|
|
|
10,642
|
|
|
7,906
|
Less: Capital
expenditures for property and equipment
|
|
|
(130,930)
|
|
|
(174,599)
|
|
|
(268,711)
|
|
|
(271,392)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment
of contingent consideration recorded in
earnings(a)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
520
|
Cash received for
divestitures(b)
|
|
|
(4,974)
|
|
|
-
|
|
|
(4,974)
|
|
|
-
|
Transaction-related
expenses(c)
|
|
|
1,016
|
|
|
57
|
|
|
2,162
|
|
|
583
|
Pre-existing
Progressive Waste share-based grants(d)
|
|
|
-
|
|
|
47
|
|
|
6,440
|
|
|
144
|
Tax
effect(e)
|
|
|
(251)
|
|
|
(26)
|
|
|
(3,569)
|
|
|
(214)
|
Adjusted free cash
flow
|
|
$
|
258,846
|
|
$
|
296,045
|
|
$
|
494,569
|
|
$
|
585,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
19.8%
|
|
|
19.3%
|
|
|
18.6%
|
|
|
20.0%
|
___________________________
|
(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.
|
(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
June 30,
|
|
Six months
ended
June 30,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Reported net income
(loss) attributable to Waste Connections
|
|
$
|
(227,072)
|
|
$
|
177,047
|
|
$
|
(84,037)
|
|
$
|
337,356
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
31,771
|
|
|
32,707
|
|
|
63,409
|
|
|
64,899
|
Impairments and other
operating items(b)
|
|
|
437,270
|
|
|
6,081
|
|
|
438,777
|
|
|
6,715
|
Transaction-related
expenses(c)
|
|
|
1,016
|
|
|
57
|
|
|
2,162
|
|
|
583
|
Fair value changes to
equity awards(d)
|
|
|
1,683
|
|
|
6,385
|
|
|
4,223
|
|
|
6,723
|
Tax
effect(e)
|
|
|
(118,220)
|
|
|
(11,393)
|
|
|
(127,523)
|
|
|
(19,935)
|
Tax
items(f)
|
|
|
31,508
|
|
|
-
|
|
|
31,508
|
|
|
-
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
157,956
|
|
$
|
210,884
|
|
$
|
328,519
|
|
$
|
396,341
|
Diluted earnings
(loss) per common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
|
$
|
(0.86)
|
|
$
|
0.68
|
|
$
|
(0.32)
|
|
$
|
1.29
|
Adjusted net
income
|
|
$
|
0.60
|
|
$
|
0.81
|
|
$
|
1.25
|
|
$
|
1.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted
shares
|
|
|
262,994,275
|
|
|
261,418,573
|
|
|
263,390,685
|
|
|
262,269,600
|
Adjusted diluted
shares(g)
|
|
|
263,317,054
|
|
|
261,418,573
|
|
|
263,833,471
|
|
|
262,269,600
|
____________________________
|
(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 tax
regulations on April 7, 2020 under Internal Revenue Code section
267A and an increase in deferred tax liabilities resulting from the
E&P impairment.
|
(g)
|
Reflects reported
diluted shares adjusted for shares that were excluded from the
reported diluted shares calculation due to our reporting a net loss
during the three and six months ended June 30, 2020.
|
UPDATED 2021
OUTLOOK
NON-GAAP
RECONCILIATION SCHEDULE
(in thousands of U.S.
dollars, except where noted)
|
|
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
|
|
|
Updated 2021
Outlook
|
|
|
Estimates
|
|
Observation
|
Net income
attributable to Waste Connections
|
$
|
690,000
|
|
|
Plus: Income tax provision (a)
|
|
184,294
|
|
Approximate 21.0%
effective rate
|
Plus: Interest expense, net
|
|
162,000
|
|
|
Plus: Depreciation and Depletion
|
|
680,000
|
|
Approximately 11.4%
of revenue
|
Plus: Amortization
|
|
132,000
|
|
|
Plus: Closure and post-closure accretion
|
|
15,000
|
|
|
Plus: Impairments and other operating items (b)
|
|
6,712
|
|
|
Plus: Other income, net (b)
|
|
(2,312)
|
|
|
Adjustments: (b)
|
|
|
|
|
Plus: Transaction-related
expenses
|
|
583
|
|
|
Plus: Fair value changes to equity
awards
|
|
6,723
|
|
|
Adjusted
EBITDA
|
$
|
1,875,000
|
|
Approximately 31.4%
of revenue
|
____________________________
|
(a)
|
Approximately 21%
full year effective tax rate, including amounts reported for the
six month period ended June 30, 2021.
|
(b)
|
Reflects amounts
reported for the six month period ended June 30, 2021, as shown on
page 9.
|
|
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
|
Updated
2021
Outlook
|
Net cash provided by
operating activities
|
|
$
|
1,666,061
|
Plus: Proceeds from
disposal of assets (a)
|
|
|
7,906
|
Less: Capital
expenditures for property and
equipment
|
|
|
(675,000)
|
Adjustments:
(a)
|
|
|
|
Payment of contingent consideration recorded in earnings
|
|
|
520
|
Transaction-related expenses
|
|
|
583
|
Pre-existing Progressive Waste share-based grants
|
|
|
144
|
Tax effect
|
|
|
(214)
|
Adjusted free cash
flow
|
|
$
|
1,000,000
|
|
|
|
As % of
revenues
|
|
|
16.7%
|
____________________________
|
(a)
|
Reflects amounts
reported for the six month period ended June 30, 2021, as shown on
page 10.
|
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SOURCE Waste Connections, Inc.