Item 7.01 Regulation FD Disclosure.
During our earnings conference
call on April 27, 2017, we highlighted the following outlook for the second quarter 2017.
(Dollar amounts are approximations)
For the second quarter of the
year, we estimate our revenue to be between $1.145 billion and $1.15 billion. We expect core price plus volume growth for solid
waste to be between 3.0% and 3.5%, reflecting a one month contribution for June from the Progressive Waste operations. Adjusted
EBITDA, as reconciled below, is estimated to be approximately 31.5% of revenue, or about $362 million.
Q2 2017 OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted EBITDA:
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Q2 2017 Outlook
|
|
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Estimate
|
|
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Observation
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Net income attributable to Waste Connections
|
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$
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122,000
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|
|
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Plus: Net income attributable to noncontrolling interests
|
|
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275
|
|
|
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Plus: Income tax provision
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|
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48,750
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Approximate 28.5% effective rate
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Plus: Interest expense, net
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|
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30,500
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|
|
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Plus: Depreciation and depletion
|
|
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133,000
|
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Approximately 11.6% of revenue
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Plus: Amortization
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|
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24,500
|
|
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Approximately 2.1% of revenue
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Plus: Closure and post-closure accretion
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|
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3,000
|
|
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Approximately 0.25% of revenue
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Adjusted EBITDA
|
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$
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362,000
|
|
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Approximately 31.5% of revenue
|
These estimates assume no change
in the current economic and operating environment. They also exclude any rebranding costs or other items resulting from the Progressive
Waste acquisition and any additional acquisitions or potential divestitures that may close during the period.
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 our operations. We define adjusted EBITDA as net income 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. We further
adjust this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance
of our 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.
The information furnished in
Item 7.01 is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not
subject to the liabilities of that section, and is not deemed incorporated by reference in any filing under the Securities Act
of 1933, as amended.
Safe Harbor and Forward-Looking Information
This document contains
forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act
of 1995 (“PSLRA”) and "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,”
“intends” or other words of similar meaning. All of the forward-looking statements included in this document are made
pursuant to the safe harbor provisions of the PSLRA and applicable Canadian securities laws. Forward-looking statements involve
risks and uncertainties. Forward-looking statements in this document include, but are not limited to, statements about the Company’s
expected second quarter 2017 financial results. 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 filings that have been made by the Company with the U.S. 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 document. Waste Connections undertakes no obligation to update the forward-looking statements set forth
in this document, whether as a result of new information, future events, or otherwise, unless required by applicable securities
laws.