Fourth Quarter Highlights
- Strong price-led organic growth and acquisition activity,
along with continuing underlying margin expansion, drives Q4
results above expectations and provides higher entry point into
2022
- Revenue of $1.624 billion, net
income(a) of $166.3
million, and adjusted EBITDA(b) of $495.4 million, or 30.5% of revenue
- Net income and adjusted net income(b) of
$0.64 and $0.83 per share, respectively
Full Year 2021 Highlights
- Revenue of $6.151 billion, up
13.0%
- Net income of $618.0 million,
or $2.36 per share, and adjusted net
income(b) of $846.6
million, or $3.23 per share,
up 22.3%
- Adjusted EBITDA(b) of $1.919 billion, up 15.5%, and adjusted EBITDA
margin of 31.2%, up 70 basis points
- Net cash provided by operating activities of $1.698 billion, up 20.6%
- Adjusted free cash flow(b) of $1.010 billion, up 19.9% on capital expenditures
of $744.3 million, up 24.7%
- Completes acquisitions with approximately $400 million of total annualized revenue in
2021
Expectations for 2022
- Strong pricing and acquisition growth to drive double digit
percentage increases in revenue and adjusted free cash
flow(b), along with continuing underlying margin
expansion
- Revenue of approximately $6.875
billion, up 11.8%, excluding additional
acquisitions
- Net income of approximately $846
million and adjusted EBITDA(b) of approximately
$2.145 billion, or about 31.2% of
revenue
- Net cash provided by operating activities of approximately
$2.000 billion
- Adjusted free cash flow(b) of approximately
$1.150 billion, up 13.9%, on capital
expenditures up 14.2% to approximately $850
million, including $100
million for new landfill gas and resource recovery
facilities
- Increasing return of capital to shareholders, including
opportunistic share repurchases
TORONTO, Feb. 16, 2022 /CNW/ -- Waste
Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the
"Company") today announced its results for the fourth quarter of
2021 and outlook for 2022.
"2021's results are a reflection of how a culture of commitment
and accountability to all stakeholders enabled us to excel in a
challenging operating environment, overcome inflationary pressures
and supply chain issues, execute our growth strategy, expand
margins, support employee health and welfare, and position the
Company well for 2022 and beyond. The year ended on a high
note, as strong solid waste organic growth and acquisition
activity, along with continuing underlying margin expansion, drove
Q4 financial results once again above expectations. We are
also extremely pleased with our results for the full year, as
adjusted EBITDA(b) margin expanded 70 basis
points. Moreover, we delivered 20% growth in adjusted free
cash flow(b) to $1.010
billion, in spite of capital expenditures up 25%, as we
continued to reinvest in and grow our business," said Worthing F. Jackman, President and Chief
Executive Officer.
"Acquisition activity accelerated in the fourth quarter,
resulting in approximately $400
million in acquired annualized revenues in 2021 and setting
up acquisition contribution approaching 6% in 2022, including
transactions completed year to date. Along with solid waste
pricing growth of about 6.5%, this already positions us for
double-digit percentage growth in revenue, adjusted
EBITDA(b) and adjusted free cash flow(b) in
2022. Additional acquisitions expected to be completed during
the year, improvement in commodity-driven revenues and E&P
waste activity, or moderation of inflationary trends would provide
incremental benefit."
Mr. Jackman continued, "The strength and consistency of our
results reflect the durability of our market model and the benefits
of an intentional culture focused on employees and value
creation. Proactive pricing, along with a step-up in capital
expenditures and over $1 billion in
acquisition outlays in 2021, positions us for continued double
digit growth in 2022, while preserving the balance sheet strength
and flexibility to capitalize on another potential above average
year of acquisition activity, invest in sustainability-focused
growth projects and increase return of capital to
shareholders."
Q4 2021 Results
Revenue in the fourth quarter totaled $1.624 billion, up from $1.398 billion in the year ago period.
Operating income was $249.3 million,
which included $28.4 million
primarily related to impairments and other acquisition-related
costs. This compares to operating income of $197.1 million in the fourth quarter of 2020,
which included $29.0 million
primarily related to impairments and other acquisition-related
costs. Net income in the fourth quarter was $166.3 million, or $0.64 per share on a diluted basis of 261.3
million shares. In the year ago period, the Company reported
net income of $130.7 million, or
$0.50 per share on a diluted basis of
263.6 million shares.
Adjusted net income(b) in the fourth quarter was
$217.1 million, or $0.83 per diluted share, versus $178.6 million, or $0.68 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the fourth quarter
was $495.4 million and 30.5% of
revenue, as compared to $426.6
million and 30.5% 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.
Full Year 2021 Results
For the year ended December 31,
2021, revenue was $6.151
billion, up from $5.446
billion in the year ago period. Operating income,
which included $32.3 million in
impairments and other operating items, $11.3 million in acquisition-related costs,
and $8.4 million in fair value
accounting changes to equity awards, was $1.040 billion, as compared to operating income
of $412.4 million for the same period
in 2020, which included $482.1
million in costs primarily related to impairments and other
operating items.
Net income in 2021 was $618.0 million, or $2.36 per share on a diluted basis of
261.7 million shares. In the year ago period, the
Company reported net income of $204.7
million, or $0.78 per share on
a diluted basis of 263.7 million shares.
Adjusted net income(b) in 2021 was $846.6 million, or $3.23 per diluted share, compared to $695.8 million, or $2.64 per diluted share, in the year ago
period. Adjusted EBITDA(b) in 2021 was $1.919 billion and 31.2% of revenue, up from
$1.662 billion and 30.5% of revenue
in the prior year period.
2022 Outlook
Waste Connections also announced its outlook for 2022, 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 2022 are subject to quarterly
fluctuations. See reconciliations in the attached tables.
- Revenue is estimated at approximately $6.875 billion;
- Net income is estimated at approximately $846 million;
- Adjusted EBITDA(b) is estimated at approximately
$2.145 billion, or about 31.2% of
revenue;
- Net cash provided by operating activities is estimated at
approximately $2.0 billion;
- Capital expenditures are estimated to be approximately
$850 million;
- Adjusted free cash flow(b) is estimated at
approximately $1.150 billion, or
16.7% of revenue; and
- Fully diluted share count is estimated at 259.0 million.
Q4 2021 Earnings and 2022 Outlook Conference Call
Waste Connections will be hosting a conference call related to
fourth quarter earnings and 2022 outlook on February 17th 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 800-935-9319 (within North
America) or 212-231-2925 (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 February 24th, 2022, by calling
800-633-8284 (within North
America) or 402-977-9140 (international) and entering
Passcode #22014930.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
February 17th, providing
the Company's first quarter 2022 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
eight 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. The Company's updated 2021
Sustainability Report provides progress updates on its targets and
investments towards their achievement. 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 2022 financial results,
outlook and related assumptions, 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
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2021
(Unaudited)
(in thousands of U.S. dollars, except share and per share
amounts)
|
|
|
|
Three months ended
December
31,
|
|
Twelve
months ended
December
31,
|
|
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,398,251
|
|
$
|
1,624,319
|
|
$
|
5,445,990
|
|
$
|
6,151,361
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
846,851
|
|
|
980,865
|
|
|
3,276,808
|
|
|
3,654,074
|
|
Selling, general and
administrative
|
|
|
133,419
|
|
|
157,452
|
|
|
537,632
|
|
|
612,337
|
|
Depreciation
|
|
|
161,462
|
|
|
175,142
|
|
|
621,102
|
|
|
673,730
|
|
Amortization of
intangibles
|
|
|
35,239
|
|
|
39,042
|
|
|
131,302
|
|
|
139,279
|
|
Impairments and other
operating items
|
|
|
24,136
|
|
|
22,497
|
|
|
466,718
|
|
|
32,316
|
|
Operating
income
|
|
|
197,144
|
|
|
249,321
|
|
|
412,428
|
|
|
1,039,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(42,813)
|
|
|
(38,625)
|
|
|
(162,375)
|
|
|
(162,796)
|
|
Interest
income
|
|
|
857
|
|
|
573
|
|
|
5,253
|
|
|
2,916
|
|
Other income
(expense), net
|
|
|
1,654
|
|
|
833
|
|
|
(1,392)
|
|
|
6,285
|
|
Loss on early
extinguishment of debt
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(115,288)
|
|
Income before income
tax provision
|
|
|
156,842
|
|
|
212,102
|
|
|
253,914
|
|
|
770,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(26,268)
|
|
|
(45,675)
|
|
|
(49,922)
|
|
|
(152,253)
|
|
Net income
|
|
|
130,574
|
|
|
166,427
|
|
|
203,992
|
|
|
618,489
|
|
Plus (less): Net loss
(income) attributable to
noncontrolling interests
|
|
|
90
|
|
|
(117)
|
|
|
685
|
|
|
(442)
|
|
Net income
attributable to Waste Connections
|
|
$
|
130,664
|
|
$
|
166,310
|
|
$
|
204,677
|
|
$
|
618,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to
Waste Connections' common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.50
|
|
$
|
0.64
|
|
$
|
0.78
|
|
$
|
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.50
|
|
$
|
0.64
|
|
$
|
0.78
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
263,001,985
|
|
|
260,547,806
|
|
|
263,189,699
|
|
|
261,166,723
|
|
Diluted
|
|
|
263,598,602
|
|
|
261,258,425
|
|
|
263,687,539
|
|
|
261,728,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.205
|
|
$
|
0.230
|
|
$
|
0.760
|
|
$
|
0.845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S. dollars, except share and per share
amounts)
|
|
|
|
December 31,
2020
|
|
December
31,
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
617,294
|
|
$
|
147,441
|
|
Accounts receivable,
net of allowance for credit losses of $19,380 and $18,480 at
December 31, 2020 and 2021, respectively
|
|
|
630,264
|
|
|
709,614
|
|
Prepaid expenses and
other current assets
|
|
|
160,714
|
|
|
175,722
|
|
Total current
assets
|
|
|
1,408,272
|
|
|
1,032,777
|
|
Restricted
cash
|
|
|
97,095
|
|
|
72,174
|
|
Restricted
investments
|
|
|
57,516
|
|
|
59,014
|
|
Property and
equipment, net
|
|
|
5,284,506
|
|
|
5,721,949
|
|
Operating lease
right-of-use assets
|
|
|
170,923
|
|
|
160,567
|
|
Goodwill
|
|
|
5,726,650
|
|
|
6,187,643
|
|
Intangible assets,
net
|
|
|
1,155,079
|
|
|
1,350,597
|
|
Other assets,
net
|
|
|
92,323
|
|
|
115,203
|
|
Total
assets
|
|
$
|
13,992,364
|
|
$
|
14,699,924
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
290,820
|
|
$
|
392,868
|
|
Book
overdraft
|
|
|
17,079
|
|
|
16,721
|
|
Deferred
revenue
|
|
|
233,596
|
|
|
273,720
|
|
Accrued
liabilities
|
|
|
404,923
|
|
|
442,596
|
|
Current portion of
operating lease liabilities
|
|
|
30,671
|
|
|
38,017
|
|
Current portion of
contingent consideration
|
|
|
43,297
|
|
|
62,804
|
|
Current portion of
long-term debt and notes payable
|
|
|
8,268
|
|
|
6,020
|
|
Total current
liabilities
|
|
|
1,028,654
|
|
|
1,232,746
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
4,708,678
|
|
|
5,040,500
|
|
Long-term portion of
operating lease liabilities
|
|
|
147,223
|
|
|
129,628
|
|
Long-term portion of
contingent consideration
|
|
|
28,439
|
|
|
31,504
|
|
Deferred income
taxes
|
|
|
760,044
|
|
|
850,921
|
|
Other long-term
liabilities
|
|
|
455,888
|
|
|
421,080
|
|
Total
liabilities
|
|
|
7,128,926
|
|
|
7,706,379
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
262,899,174 shares issued and 262,824,990 shares outstanding
at
December 31, 2020; 260,283,158
shares issued and 260,212,496 shares outstanding
at December 31, 2021
|
|
|
4,030,368
|
|
|
3,693,027
|
|
Additional paid-in
capital
|
|
|
170,555
|
|
|
199,482
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(651)
|
|
|
39,584
|
|
Treasury shares:
74,184 and 70,662 shares at December 31, 2020 and
2021,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
2,659,001
|
|
|
3,056,845
|
|
Total Waste
Connections' equity
|
|
|
6,859,273
|
|
|
6,988,938
|
|
Noncontrolling
interest in subsidiaries
|
|
|
4,165
|
|
|
4,607
|
|
Total
equity
|
|
|
6,863,438
|
|
|
6,993,545
|
|
|
|
$
|
13,992,364
|
|
$
|
14,699,924
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2021
(Unaudited)
(in thousands of U.S. dollars)
|
|
|
|
Twelve
months ended December 31,
|
|
|
|
2020
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
203,992
|
|
$
|
618,489
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
445,647
|
|
|
27,727
|
|
Depreciation
|
|
|
621,102
|
|
|
673,730
|
|
Amortization of
intangibles
|
|
|
131,302
|
|
|
139,279
|
|
Loss on early
extinguishment of debt
|
|
|
-
|
|
|
115,288
|
|
Deferred income taxes,
net of acquisitions
|
|
|
(50,487)
|
|
|
14,563
|
|
Current period
provision for expected credit losses
|
|
|
15,509
|
|
|
9,719
|
|
Amortization of debt
issuance costs
|
|
|
7,509
|
|
|
5,055
|
|
Share-based
compensation
|
|
|
45,751
|
|
|
58,221
|
|
Interest
accretion
|
|
|
17,205
|
|
|
15,970
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
(10,371)
|
|
|
(520)
|
|
Adjustments to
contingent consideration
|
|
|
18,418
|
|
|
2,954
|
|
Other
|
|
|
2,426
|
|
|
(1,260)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
(39,482)
|
|
|
19,014
|
|
Net cash provided by
operating activities
|
|
|
1,408,521
|
|
|
1,698,229
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(388,789)
|
|
|
(960,449)
|
|
Capital expenditures
for property and equipment
|
|
|
(597,053)
|
|
|
(744,315)
|
|
Capital expenditures
for undeveloped landfill property
|
|
|
(67,508)
|
|
|
-
|
|
Investment in
noncontrolling interest
|
|
|
-
|
|
|
(25,000)
|
|
Proceeds from disposal
of assets
|
|
|
19,084
|
|
|
42,768
|
|
Other
|
|
|
(11,777)
|
|
|
(6,486)
|
|
Net cash used in
investing activities
|
|
|
(1,046,043)
|
|
|
(1,693,482)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
1,815,625
|
|
|
2,112,193
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(1,542,958)
|
|
|
(1,893,100)
|
|
Premiums paid on early
extinguishment of debt
|
|
|
-
|
|
|
(110,617)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(12,566)
|
|
|
(12,934)
|
|
Change in book
overdraft
|
|
|
1,096
|
|
|
(367)
|
|
Payments for
repurchase of common shares
|
|
|
(105,654)
|
|
|
(338,993)
|
|
Payments for cash
dividends
|
|
|
(199,883)
|
|
|
(220,203)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(23,446)
|
|
|
(18,606)
|
|
Debt issuance
costs
|
|
|
(11,117)
|
|
|
(18,521)
|
|
Proceeds from issuance
of shares under employee share purchase plan
|
|
|
-
|
|
|
1,222
|
|
Proceeds from sale of
common shares held in trust
|
|
|
679
|
|
|
430
|
|
Net cash used in
financing activities
|
|
|
(78,224)
|
|
|
(499,496)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
6,914
|
|
|
(25)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
|
291,168
|
|
|
(494,774)
|
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
|
423,221
|
|
|
714,389
|
|
Cash, cash
equivalents and restricted cash at end of year
|
|
$
|
714,389
|
|
$
|
219,615
|
|
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 month periods ended December 31, 2021:
|
|
|
|
Three months
ended
December 31, 2021
|
|
Twelve months
ended December 31,
2021
|
Core Price
|
|
5.0
|
%
|
|
4.7
|
%
|
Surcharges
|
|
0.7
|
%
|
|
0.3
|
%
|
Volume
|
|
1.2
|
%
|
|
1.6
|
%
|
Recycling
|
|
2.6
|
%
|
|
1.8
|
%
|
Foreign Exchange
Impact
|
|
0.5
|
%
|
|
0.9
|
%
|
Total
|
|
10.0
|
%
|
|
9.3
|
%
|
Revenue
Breakdown: The following table reflects a breakdown of our
revenue for the three month periods ended December 31, 2020 and
2021:
|
|
|
|
Three months ended December 31,
2020
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,024,099
|
|
$
|
(3,341)
|
|
$
|
1,020,758
|
|
73.0
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
493,093
|
|
|
(200,272)
|
|
|
292,821
|
|
20.9
|
%
|
Solid Waste
Recycling
|
|
|
26,688
|
|
|
(909)
|
|
|
25,779
|
|
1.9
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
27,690
|
|
|
(2,163)
|
|
|
25,527
|
|
1.8
|
%
|
Intermodal and
Other
|
|
|
33,427
|
|
|
(61)
|
|
|
33,366
|
|
2.4
|
%
|
Total
|
|
$
|
1,604,997
|
|
$
|
(206,746)
|
|
$
|
1,398,251
|
|
100.0
|
%
|
|
|
|
|
|
|
Three months ended
December 31, 2021
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,169,428
|
|
$
|
(2,780)
|
|
$
|
1,166,648
|
|
71.8
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
533,122
|
|
|
(216,957)
|
|
|
316,165
|
|
19.5
|
%
|
Solid Waste
Recycling
|
|
|
75,317
|
|
|
(5,646)
|
|
|
69,671
|
|
4.3
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
37,570
|
|
|
(3,244)
|
|
|
34,326
|
|
2.1
|
%
|
Intermodal and
Other
|
|
|
39,592
|
|
|
(2,083)
|
|
|
37,509
|
|
2.3
|
%
|
Total
|
|
$
|
1,855,029
|
|
$
|
(230,710)
|
|
$
|
1,624,319
|
|
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, 2020 and 2021:
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December
31,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Acquisitions,
net
|
|
$
|
52,721
|
|
$
|
79,363
|
|
$
|
197,231
|
|
$
|
215,398
|
|
|
|
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,
2020 and 2021:
|
|
|
|
Three months
ended
December
31,
|
|
Twelve months
ended
December
31,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Cash Interest
Paid
|
|
$
|
55,910
|
|
$
|
36,839
|
|
$
|
142,310
|
|
$
|
157,485
|
Cash Taxes
Paid
|
|
|
43,603
|
|
|
56,094
|
|
|
104,618
|
|
|
146,198
|
|
Debt to Book
Capitalization as of December 31, 2021: 42%
|
|
Internalization for the three months ended
December 31, 2021: 55%
|
|
Days Sales
Outstanding for the three months ended December 31,
2021: 40 (25 net of deferred revenue)
|
|
Share Information
for the three months ended December 31, 2021:
|
|
|
|
Basic shares
outstanding
|
|
260,547,806
|
Dilutive effect of
equity-based awards
|
|
710,619
|
Diluted shares
outstanding
|
|
261,258,425
|
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, plus loss on early extinguishment of debt.
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,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Net income
attributable to Waste Connections
|
|
$
|
130,664
|
|
$
|
166,310
|
|
$
|
204,677
|
|
$
|
618,047
|
Plus/(less): Net
income (loss) attributable to noncontrolling
interests
|
|
|
(91)
|
|
|
117
|
|
|
(685)
|
|
|
442
|
Plus: Income tax
provision
|
|
|
26,269
|
|
|
45,675
|
|
|
49,922
|
|
|
152,253
|
Plus: Interest
expense
|
|
|
42,813
|
|
|
38,625
|
|
|
162,375
|
|
|
162,796
|
Less: Interest
income
|
|
|
(857)
|
|
|
(573)
|
|
|
(5,253)
|
|
|
(2,916)
|
Plus: Depreciation
and amortization
|
|
|
196,701
|
|
|
214,184
|
|
|
752,404
|
|
|
813,009
|
Plus: Closure and
post-closure accretion
|
|
|
3,755
|
|
|
3,579
|
|
|
15,095
|
|
|
14,497
|
Plus: Impairments and
other operating items
|
|
|
24,136
|
|
|
22,497
|
|
|
466,718
|
|
|
32,316
|
Plus/(less): Other
expense (income), net
|
|
|
(1,654)
|
|
|
(833)
|
|
|
1,392
|
|
|
(6,285)
|
Plus: Loss on early
extinguishment of debt
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
115,288
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
5,306
|
|
|
5,098
|
|
|
9,803
|
|
|
11,318
|
Plus/(less): Fair
value changes to equity awards(b)
|
|
|
(485)
|
|
|
755
|
|
|
5,536
|
|
|
8,393
|
Adjusted
EBITDA
|
|
$
|
426,557
|
|
$
|
495,434
|
|
$
|
1,661,984
|
|
$
|
1,919,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.5%
|
|
|
30.5%
|
|
|
30.5%
|
|
|
31.2%
|
____________________________
|
(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,
|
|
|
|
2020
|
|
2021
|
|
Net cash provided by
operating activities
|
|
$
|
1,408,521
|
|
$
|
1,698,229
|
|
Plus/(less): Change
in book overdraft
|
|
|
1,096
|
|
|
(367)
|
|
Plus: Proceeds from
disposal of assets
|
|
|
19,084
|
|
|
42,768
|
|
Less: Capital
expenditures for property and equipment
|
|
|
(597,053)
|
|
|
(744,315)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Payment
of contingent consideration recorded in
earnings(a)
|
|
|
10,371
|
|
|
520
|
|
Cash received for
divestitures(b)
|
|
|
(10,673)
|
|
|
(17,118)
|
|
Transaction-related
expenses(c)
|
|
|
9,803
|
|
|
30,771
|
|
Pre-existing
Progressive Waste share-based grants(d)
|
|
|
5,770
|
|
|
397
|
|
Tax
effect(e)
|
|
|
(5,021)
|
|
|
(1,287)
|
|
Adjusted free cash
flow
|
|
$
|
841,898
|
|
$
|
1,009,598
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
15.5%
|
|
|
16.4%
|
|
___________________________
|
(a)
|
Reflects the addback
of acquisition-related payments for contingent consideration that
were recorded as expenses in earnings and as a component of cash
flows from operating activities as the amounts paid exceeded the
fair value of the contingent consideration recorded at the
acquisition date.
|
(b)
|
Reflects the
elimination of cash received in conjunction with the divestiture of
certain operations.
|
(c)
|
Reflects the addback
of acquisition-related transaction costs and settlement of an
acquired compensation liability.
|
(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,
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
Reported net income
attributable to Waste Connections
|
|
$
|
130,664
|
|
$
|
166,310
|
|
$
|
204,677
|
|
$
|
618,047
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
35,239
|
|
|
39,042
|
|
|
131,302
|
|
|
139,279
|
Impairments and other
operating items(b)
|
|
|
24,136
|
|
|
22,497
|
|
|
466,718
|
|
|
32,316
|
Transaction-related
expenses(c)
|
|
|
5,306
|
|
|
5,098
|
|
|
9,803
|
|
|
11,318
|
Fair value changes to
equity awards(d)
|
|
|
(485)
|
|
|
755
|
|
|
5,536
|
|
|
8,393
|
Loss on early
extinguishment of debt(e)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
115,288
|
Tax
effect(f)
|
|
|
(16,235)
|
|
|
(16,574)
|
|
|
(153,758)
|
|
|
(78,041)
|
Tax
items(g)
|
|
|
-
|
|
|
-
|
|
|
31,508
|
|
|
-
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
178,625
|
|
$
|
217,128
|
|
$
|
695,786
|
|
$
|
846,600
|
Diluted earnings per
common share attributable to Waste
Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.50
|
|
$
|
0.64
|
|
$
|
0.78
|
|
$
|
2.36
|
Adjusted net
income
|
|
$
|
0.68
|
|
$
|
0.83
|
|
$
|
2.64
|
|
$
|
3.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________
|
(a)
|
Reflects the
elimination of the non-cash amortization of acquisition-related
intangible assets.
|
(b)
|
Reflects the addback
of impairments and other operating items.
|
(c)
|
Reflects the addback
of acquisition-related transaction costs.
|
(d)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(e)
|
Reflects the
make-whole premium and related fees associated with the early
termination of $1.5 billion in senior notes.
|
(f)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (e) is
calculated based on the applied tax rates for the respective
periods.
|
(g)
|
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.
|
2022
OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)
|
|
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
2022
Outlook
|
|
|
|
Estimates
|
|
Observation
|
Net income
attributable to Waste Connections
|
|
$
|
846,000
|
|
|
Plus: Income tax provision
|
|
|
239,000
|
|
Approximate 22.0%
effective rate
|
Plus: Interest expense, net
|
|
|
160,000
|
|
|
Plus: Depreciation and Depletion
|
|
|
745,000
|
|
Approximately 10.8%
of revenue
|
Plus: Amortization
|
|
|
140,000
|
|
|
Plus: Closure and post-closure accretion
|
|
|
15,000
|
|
|
Adjusted
EBITDA
|
|
$
|
2,145,000
|
|
Approximately 31.2%
of revenue
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
2022
Outlook
|
|
|
Estimates
|
Net cash provided by
operating activities
|
|
$
|
2,000,000
|
Less: Capital expenditures
|
|
|
(850,000)
|
Adjusted free cash
flow
|
|
$
|
1,150,000
|
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SOURCE Waste Connections, Inc.