Quarterly Results
- Accelerating solid waste pricing growth and E&P waste activity drive better than expected Q2 results
- Revenue of $1.816 billion, up 18.4%
- Net income(a) of $224.1 million, and adjusted EBITDA(b) of $566.8 million, up 16.9%
- Adjusted EBITDA(b) margin of 31.2% of revenue, in line with outlook and flat year over year, excluding acquisitions
- Net income of $0.87 per share, and adjusted net income(b) of $1.00 per share, up 23.5%
- Year to date net cash provided by operating activities of $973.7 million and adjusted free cash flow(b) of $638.4 million, or 18.4% of revenue
- Year to date signed or closed acquisitions with approximately $470 million of total annualized revenue
- Increases full year 2022 outlook to revenue of approximately $7.125 billion, net income of approximately $837.5 million, adjusted EBITDA(b) of approximately $2.190 billion, net cash provided by operating activities of approximately $1.974 billion and adjusted free cash flow(b) of approximately $1.160 billion
TORONTO, Aug. 2, 2022 /PRNewswire/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the second quarter of 2022 and updated its outlook for 2022.
"Accelerating solid waste pricing and E&P waste activity drove a top-to-bottom beat in the period. Solid waste pricing growth of 8.8% enabled us to overcome increased inflationary pressures during the period and deliver adjusted EBITDA(b) margin in line with our outlook for Q2 and flat on a year over year basis excluding the margin dilutive impact from acquisitions completed since the year ago period," said Worthing F. Jackman, President and Chief Executive Officer.
"Our outperformance in the first half of 2022, expected further sequential increases in solid waste pricing growth, continuing strength in E&P waste activity, and acquisitions closed year to date, position us to update our outlook for the full year to revenue of approximately $7.125 billion, adjusted EBITDA(b) of approximately $2.190 billion and adjusted free cash flow(b) of approximately $1.160 billion, exceeding our initial outlook as provided in February and another reflection of our culture of accountability in a challenging operating environment."
Mr. Jackman added, "As anticipated, acquisition activity is pacing well above average. We have closed approximately $245 million in annualized revenues, with another approximately $225 million in total annualized revenue under definitive agreements expected to close during the third quarter, subject to customary closing conditions, and our pipeline remains quite robust. As such, we believe we are well-positioned for double digit revenue growth in 2023 along with margin expansion from continuing solid waste pricing strength and rollover contribution from acquisitions already signed or closed year to date; additional acquisitions expected to close later this year and early next year would provide further growth."
Q2 2022 Results
Revenue in the second quarter totaled $1.816 billion, up from $1.534 billion in the year ago period. Operating income was $329.6 million, which included $6.8 million primarily in impairments and other operating items. This compares to operating income of $266.8 million in the second quarter of 2021, which included $12.5 million primarily related to fair value accounting changes to equity awards. Net income in the second quarter was $224.1 million, or $0.87 per share on a diluted basis of 257.7 million shares. In the year ago period, the Company reported net income of $177.0 million, or $0.68 per share on a diluted basis of 261.4 million shares.
Adjusted net income(b) in the second quarter was $257.1 million, or $1.00 per diluted share, versus $210.9 million, or $0.81 per diluted share, in the prior year period. Adjusted EBITDA(b) in the second quarter was $566.8 million, as compared to $484.9 million 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, 2022, revenue was $3.463 billion, up from $2.930 billion in the year ago period. Operating income, which included $13.4 million primarily attributable to transaction-related expenses, was $603.4 million, as compared to operating income of $505.2 million in 2021, which included $14.0 million primarily related to fair value changes in equity awards.
Net income for the six months ended June 30, 2022 was $404.4 million, or $1.57 per share on a diluted basis of 258.1 million shares. In the year ago period, the Company reported net income of $337.4 million, or $1.29 per share on a diluted basis of 262.3 million shares.
Adjusted net income(b) for the six months ended June 30, 2022 was $470.6 million, or $1.82 per diluted share, compared to $396.3 million, or $1.51 per diluted share, in the year ago period. Adjusted EBITDA(b) for the six months ended June 30, 2022 was $1.069 billion, as compared to $918.1 million in the prior year period.
Updated 2022 Outlook
Waste Connections also updated its outlook for 2022, which assumes no change in the current economic environment or underlying economic trends. 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 to be approximately $7.125 billion, as compared to our original revenue outlook of approximately $6.875 billion.
- Net income is estimated to be approximately $837.5 million, and adjusted EBITDA(b) is estimated to be approximately $2.190 billion, or about 30.7% of revenue, as compared to our original adjusted EBITDA(b) outlook of $2.145 billion or 31.2% of revenue.
- Capital expenditures are estimated to be approximately $850 million, in line with our original outlook.
- Net cash provided by operating activities is estimated to be approximately $1.974 billion, and adjusted free cash flow(b) of approximately $1.160 billion, or about 16.3% of revenue, as compared to our original adjusted free cash flow(b) outlook of $1.150 billion or 16.7% 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 $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 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.
|
(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 |
|
Q2 2022 Earnings Conference Call
Waste Connections will be hosting a conference call related to second quarter earnings on August 3rd 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 800-747-0365 (within North America) or 212-231-2939 (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 10, 2022, by calling 800-633-8284 (within North America) or 402-977-9140 (international) and entering Passcode #22019767.
Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on August 3rd, providing the Company's third quarter 2022 outlook for revenue, price plus volume growth for solid waste, and adjusted EBITDA(b).
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.
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 and 2023 financial results, outlook and related assumptions, and potential acquisition activity. 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. |
|||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME |
|||||||||||||
|
THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2022 |
|||||||||||||
|
(Unaudited) |
|||||||||||||
|
(in thousands of U.S. dollars, except share and per share amounts) |
|||||||||||||
|
Three months ended |
Six months ended |
||||||||||||
|
2021 |
2022 |
2021 |
2022 |
||||||||||
|
Revenues |
$ |
1,533,931 |
$ |
1,816,435 |
$ |
2,929,874 |
$ |
3,462,690 |
|||||
|
Operating expenses: |
|||||||||||||
|
Cost of operations |
901,191 |
1,087,892 |
1,727,111 |
2,077,410 |
|||||||||
|
Selling, general and administrative |
157,943 |
168,404 |
299,365 |
331,818 |
|||||||||
|
Depreciation |
169,221 |
188,937 |
326,624 |
368,887 |
|||||||||
|
Amortization of intangibles |
32,707 |
37,462 |
64,899 |
75,098 |
|||||||||
|
Impairments and other operating items |
6,081 |
4,150 |
6,715 |
6,028 |
|||||||||
|
Operating income |
266,788 |
329,590 |
505,160 |
603,449 |
|||||||||
|
Interest expense |
(41,328) |
(45,079) |
(83,753) |
(86,404) |
|||||||||
|
Interest income |
744 |
652 |
1,848 |
790 |
|||||||||
|
Other income (expense), net |
(1,235) |
(2,649) |
2,312 |
(6,114) |
|||||||||
|
Income before income tax provision |
224,969 |
282,514 |
425,567 |
511,721 |
|||||||||
|
Income tax provision |
(47,868) |
(58,307) |
(88,159) |
(107,146) |
|||||||||
|
Net income |
177,101 |
224,207 |
337,408 |
404,575 |
|||||||||
|
Less: Net income attributable to noncontrolling interests |
(54) |
(133) |
(52) |
(177) |
|||||||||
|
Net income attributable to Waste Connections |
$ |
177,047 |
$ |
224,074 |
$ |
337,356 |
$ |
404,398 |
|||||
|
Earnings per common share attributable to Waste Connections' common shareholders: |
|||||||||||||
|
Basic |
$ |
0.68 |
$ |
0.87 |
$ |
1.29 |
$ |
1.57 |
|||||
|
Diluted |
$ |
0.68 |
$ |
0.87 |
$ |
1.29 |
$ |
1.57 |
|||||
|
Shares used in the per share calculations: |
|||||||||||||
|
Basic |
260,951,405 |
257,179,434 |
261,791,088 |
257,555,033 |
|||||||||
|
Diluted |
261,418,573 |
257,736,745 |
262,269,600 |
258,140,714 |
|||||||||
|
Cash dividends per common share |
$ |
0.205 |
$ |
0.23 |
$ |
0.41 |
$ |
0.46 |
|||||
|
WASTE CONNECTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of U.S. dollars, except share and per share amounts) |
|||||||
|
December 31, |
June 30, |
||||||
|
ASSETS |
|||||||
|
Current assets: |
|||||||
|
Cash and equivalents |
$ |
147,441 |
$ |
217,808 |
|||
|
Accounts receivable, net of allowance for credit losses of $18,480 and $20,253 at |
709,614 |
797,877 |
|||||
|
Prepaid expenses and other current assets |
175,722 |
242,050 |
|||||
|
Total current assets |
1,032,777 |
1,257,735 |
|||||
|
Restricted cash |
72,174 |
106,736 |
|||||
|
Restricted investments |
59,014 |
56,234 |
|||||
|
Property and equipment, net |
5,721,949 |
5,858,175 |
|||||
|
Operating lease right-of-use assets |
160,567 |
167,099 |
|||||
|
Goodwill |
6,187,643 |
6,457,910 |
|||||
|
Intangible assets, net |
1,350,597 |
1,400,249 |
|||||
|
Other assets, net |
115,203 |
112,103 |
|||||
|
Total assets |
$ |
14,699,924 |
$ |
15,416,241 |
|||
|
LIABILITIES AND EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable |
$ |
392,868 |
$ |
496,622 |
|||
|
Book overdraft |
16,721 |
16,668 |
|||||
|
Deferred revenue |
273,720 |
305,724 |
|||||
|
Accrued liabilities |
442,596 |
417,725 |
|||||
|
Current portion of operating lease liabilities |
38,017 |
35,101 |
|||||
|
Current portion of contingent consideration |
62,804 |
59,371 |
|||||
|
Current portion of long-term debt and notes payable |
6,020 |
6,342 |
|||||
|
Total current liabilities |
1,232,746 |
1,337,553 |
|||||
|
Long-term portion of debt and notes payable |
5,040,500 |
5,633,524 |
|||||
|
Long-term portion of operating lease liabilities |
129,628 |
139,191 |
|||||
|
Long-term portion of contingent consideration |
31,504 |
31,264 |
|||||
|
Deferred income taxes |
850,921 |
994,766 |
|||||
|
Other long-term liabilities |
421,080 |
410,281 |
|||||
|
Total liabilities |
7,706,379 |
8,546,579 |
|||||
|
Commitments and contingencies |
|||||||
|
Equity: |
|||||||
|
Common shares: 260,283,158 shares issued and 260,212,496 shares outstanding at |
3,693,027 |
3,270,242 |
|||||
|
Additional paid-in capital |
199,482 |
210,767 |
|||||
|
Accumulated other comprehensive income |
39,584 |
41,438 |
|||||
|
Treasury shares: 70,662 and 65,459 shares at December 31, 2021 and June 30, 2022, |
- |
- |
|||||
|
Retained earnings |
3,056,845 |
3,342,431 |
|||||
|
Total Waste Connections' equity |
6,988,938 |
6,864,878 |
|||||
|
Noncontrolling interest in subsidiaries |
4,607 |
4,784 |
|||||
|
Total equity |
6,993,545 |
6,869,662 |
|||||
|
$ |
14,699,924 |
$ |
15,416,241 |
||||
|
WASTE CONNECTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2021 AND 2022 (Unaudited) (in thousands of U.S. dollars) |
|||||||
|
Six months ended June 30, |
|||||||
|
2021 |
2022 |
||||||
|
Cash flows from operating activities: |
|||||||
|
Net income |
$ |
337,408 |
$ |
404,575 |
|||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
|
Loss on disposal of assets and impairments |
6,229 |
6,048 |
|||||
|
Depreciation |
326,624 |
368,887 |
|||||
|
Amortization of intangibles |
64,899 |
75,098 |
|||||
|
Deferred income taxes, net of acquisitions |
3,520 |
84,991 |
|||||
|
Current period provision for expected credit losses |
4,903 |
6,907 |
|||||
|
Amortization of debt issuance costs |
2,689 |
2,484 |
|||||
|
Share-based compensation |
28,724 |
27,716 |
|||||
|
Interest accretion |
8,199 |
8,798 |
|||||
|
Payment of contingent consideration recorded in earnings |
(520) |
- |
|||||
|
Adjustments to contingent consideration |
89 |
(1,030) |
|||||
|
Other |
(1,118) |
(2,173) |
|||||
|
Net change in operating assets and liabilities, net of acquisitions |
66,832 |
(8,623) |
|||||
|
Net cash provided by operating activities |
848,478 |
973,678 |
|||||
|
Cash flows from investing activities: |
|||||||
|
Payments for acquisitions, net of cash acquired |
(67,493) |
(546,982) |
|||||
|
Capital expenditures for property and equipment |
(271,392) |
(371,428) |
|||||
|
Proceeds from disposal of assets |
7,906 |
16,894 |
|||||
|
Other |
(1,815) |
9,566 |
|||||
|
Net cash used in investing activities |
(332,794) |
(891,950) |
|||||
|
Cash flows from financing activities: |
|||||||
|
Proceeds from long-term debt |
311,000 |
1,517,732 |
|||||
|
Principal payments on notes payable and long-term debt |
(267,050) |
(920,107) |
|||||
|
Payment of contingent consideration recorded at acquisition date |
(5,595) |
(8,898) |
|||||
|
Change in book overdraft |
(190) |
(54) |
|||||
|
Payments for repurchase of common shares |
(305,640) |
(424,999) |
|||||
|
Payments for cash dividends |
(107,330) |
(118,812) |
|||||
|
Tax withholdings related to net share settlements of equity-based compensation |
(18,510) |
(17,266) |
|||||
|
Debt issuance costs |
- |
(4,668) |
|||||
|
Proceeds from issuance of shares under employee share purchase plan |
- |
1,554 |
|||||
|
Proceeds from sale of common shares held in trust |
131 |
660 |
|||||
|
Net cash provided by (used in) financing activities |
(393,184) |
25,142 |
|||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
873 |
(1,941) |
|||||
|
Net increase in cash, cash equivalents and restricted cash |
123,373 |
104,929 |
|||||
|
Cash, cash equivalents and restricted cash at beginning of period |
714,389 |
219,615 |
|||||
|
Cash, cash equivalents and restricted cash at end of period |
$ |
837,762 |
$ |
324,544 |
|||
|
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 months ended June 30, 2022 |
Six months ended June 30, 2022 |
|||||
|
Core Price |
7.2 % |
6.8 % |
||||
|
Surcharges |
1.6 % |
1.2 % |
||||
|
Volume |
(0.7 %) |
(0.1 %) |
||||
|
Recycling |
0.4 % |
0.7 % |
||||
|
Foreign Exchange Impact |
(0.5 %) |
(0.3 %) |
||||
|
Total |
8.0 % |
8.3 % |
||||
|
Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended June 30, 2021 |
|||||||||||||||||||||||||
|
Three months ended June 30, 2021 |
|||||||||||||||||||||||||
|
Revenue |
Inter-company |
Reported |
% |
||||||||||||||||||||||
|
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 |
% |
|||||||||||||||||
|
Three months ended June 30, 2022 |
||||||||||||
|
Revenue |
Inter-company |
Reported |
% |
|||||||||
|
Solid Waste Collection |
$ |
1,297,402 |
$ |
(3,391) |
$ |
1,294,011 |
71.2 |
% |
||||
|
Solid Waste Disposal and Transfer |
601,194 |
(238,162) |
363,032 |
20.0 |
% |
|||||||
|
Solid Waste Recycling |
67,504 |
(2,823) |
64,681 |
3.6 |
% |
|||||||
|
E&P Waste Treatment, Recovery and Disposal |
54,155 |
(3,712) |
50,443 |
2.8 |
% |
|||||||
|
Intermodal and Other |
46,310 |
(2,042) |
44,268 |
2.4 |
% |
|||||||
|
Total |
$ |
2,066,565 |
$ |
(250,130) |
$ |
1,816,435 |
100.0 |
% |
||||
|
Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three and six |
||||||||||||
|
Three months ended |
Six months ended |
|||||||||||
|
2021 |
2022 |
2021 |
2022 |
|||||||||
|
Acquisitions, net |
$ |
44,125 |
$ |
141,356 |
$ |
84,666 |
$ |
251,363 |
||||
|
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 |
||||||||||||
|
Three months ended |
Six months ended |
|||||||||||
|
2021 |
2022 |
2021 |
2022 |
|||||||||
|
Cash Interest Paid |
$ |
56,516 |
$ |
43,853 |
$ |
81,962 |
$ |
76,013 |
||||
|
Cash Taxes Paid |
32,072 |
20,423 |
60,693 |
37,812 |
||||||||
|
Debt to Book Capitalization as of June 30, 2022: 45%
Internalization for the three months ended June 30, 2022: 55%
Days Sales Outstanding for the three months ended June 30, 2022: 40 (25 net of deferred revenue)
Share Information for the three months ended June 30, 2022: |
||
|
Basic shares outstanding |
257,179,434 |
|
|
Dilutive effect of equity-based awards |
557,311 |
|
|
Diluted shares outstanding |
257,736,745 |
|
|
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 |
||||||||||||
|
Three months ended |
Six months ended |
|||||||||||
|
2021 |
2022 |
2021 |
2022 |
|||||||||
|
Net income attributable to Waste Connections |
$ |
177,047 |
$ |
224,074 |
$ |
337,356 |
$ |
404,398 |
||||
|
Plus: Net income attributable to noncontrolling interests |
54 |
133 |
52 |
177 |
||||||||
|
Plus: Income tax provision |
47,868 |
58,307 |
88,159 |
107,146 |
||||||||
|
Plus: Interest expense |
41,328 |
45,079 |
83,753 |
86,404 |
||||||||
|
Less: Interest income |
(744) |
(652) |
(1,848) |
(790) |
||||||||
|
Plus: Depreciation and amortization |
201,928 |
226,399 |
391,523 |
443,985 |
||||||||
|
Plus: Closure and post-closure accretion |
3,666 |
3,992 |
7,375 |
8,087 |
||||||||
|
Plus: Impairments and other operating items |
6,081 |
4,150 |
6,715 |
6,028 |
||||||||
|
Plus/(Less): Other expense (income), net |
1,235 |
2,649 |
(2,312) |
6,114 |
||||||||
|
Adjustments: |
||||||||||||
|
Plus: Transaction-related expenses(a) |
57 |
3,692 |
583 |
8,232 |
||||||||
|
Plus: Fair value changes to equity awards(b) |
6,385 |
(1,009) |
6,723 |
(847) |
||||||||
|
Adjusted EBITDA |
$ |
484,905 |
$ |
566,814 |
$ |
918,079 |
$ |
1,068,934 |
||||
|
As % of revenues |
31.6 % |
31.2 % |
31.3 % |
30.9 % |
||||||||
|
____________________________ |
|
(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 |
||||||||||||
|
Three months ended |
Six months ended |
|||||||||||
|
2021 |
2022 |
2021 |
2022 |
|||||||||
|
Net cash provided by operating activities |
$ |
448,081 |
$ |
532,781 |
$ |
848,478 |
$ |
973,678 |
||||
|
Plus/(Less): Change in book overdraft |
16,659 |
(141) |
(190) |
(54) |
||||||||
|
Plus: Proceeds from disposal of assets |
5,826 |
1,881 |
7,906 |
16,894 |
||||||||
|
Less: Capital expenditures for property and equipment |
(174,599) |
(219,110) |
(271,392) |
(371,428) |
||||||||
|
Adjustments: |
||||||||||||
|
Payment of contingent consideration recorded in earnings(a) |
- |
- |
520 |
- |
||||||||
|
Cash received for divestitures(b) |
- |
- |
- |
(5,671) |
||||||||
|
Transaction-related expenses(c) |
57 |
3,692 |
583 |
27,096 |
||||||||
|
Pre-existing Progressive Waste share-based grants(d) |
47 |
(64) |
144 |
12 |
||||||||
|
Tax effect(e) |
(26) |
(1,056) |
(214) |
(2,165) |
||||||||
|
Adjusted free cash flow |
$ |
296,045 |
$ |
317,983 |
$ |
585,835 |
$ |
638,362 |
||||
|
As % of revenues |
19.3 % |
17.5 % |
20.0 % |
18.4 % |
||||||||
|
___________________________ |
|
(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 and the settlement of an acquired tax 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 |
||||||||||||
|
Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections, |
||||||||||||
|
Three months ended |
Six months ended |
|||||||||||
|
2021 |
2022 |
2021 |
2022 |
|||||||||
|
Reported net income attributable to Waste Connections |
$ |
177,047 |
$ |
224,074 |
$ |
337,356 |
$ |
404,398 |
||||
|
Adjustments: |
||||||||||||
|
Amortization of intangibles(a) |
32,707 |
37,462 |
64,899 |
75,098 |
||||||||
|
Impairments and other operating items(b) |
6,081 |
4,150 |
6,715 |
6,028 |
||||||||
|
Transaction-related expenses(c) |
57 |
3,692 |
583 |
8,232 |
||||||||
|
Fair value changes to equity awards(d) |
6,385 |
(1,009) |
6,723 |
(847) |
||||||||
|
Tax effect(e) |
(11,393) |
(11,224) |
(19,935) |
(22,316) |
||||||||
|
Adjusted net income attributable to Waste Connections |
$ |
210,884 |
$ |
257,145 |
$ |
396,341 |
$ |
470,593 |
||||
|
Diluted earnings per common share attributable to Waste Connections' common shareholders: |
||||||||||||
|
Reported net income |
$ |
0.68 |
$ |
0.87 |
$ |
1.29 |
$ |
1.57 |
||||
|
Adjusted net income |
$ |
0.81 |
$ |
1.00 |
$ |
1.51 |
$ |
1.82 |
||||
|
____________________________ |
|
(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. |
|
UPDATED 2022 OUTLOOK NON-GAAP RECONCILIATION SCHEDULE (in thousands of U.S. dollars, except where noted) |
||||
|
Reconciliation of Adjusted EBITDA: |
||||
|
Updated 2022 Outlook |
||||
|
Estimates |
Observation |
|||
|
Net income attributable to Waste Connections |
$ |
837,500 |
||
|
Plus: Income tax provision (a) |
232,973 |
Approximate 21.8% effective rate |
||
|
Plus: Interest expense, net |
180,000 |
|||
|
Plus: Depreciation and Depletion |
752,000 |
Approximately 10.6% of revenue |
||
|
Plus: Amortization |
152,000 |
|||
|
Plus: Closure and post-closure accretion |
16,000 |
|||
|
Plus: Impairments and other operating items (b) |
6,028 |
|||
|
Plus: Other income, net (b) |
6,114 |
|||
|
Adjustments: (b) |
||||
|
Plus: Transaction-related expenses |
8,232 |
|||
|
Plus: Fair value changes to equity awards |
(847) |
|||
|
Adjusted EBITDA |
$ |
2,190,000 |
Approximately 30.7% of revenue |
|
|
___________________________ |
|
(a) Approximately 21.8% full year effective tax rate, including amounts reported for the six month period ended June 30, 2022. |
|
(b) Reflects amounts reported for the six month period ended June 30, 2022, as shown on page 9. |
|
Reconciliation of Adjusted Free Cash Flow: |
|||
|
Updated 2022 Outlook |
|||
|
Net cash provided by operating activities |
$ |
1,973,888 |
|
|
Less: Change in book overdraft (a) |
(54) |
||
|
Plus: Proceeds from disposal of assets (a) |
16,894 |
||
|
Less: Capital expenditures for property and equipment |
(850,000) |
||
|
Adjustments: (a) |
|||
|
Cash received for divestitures |
(5,671) |
||
|
Transaction-related expenses |
27,096 |
||
|
Pre-existing Progressive Waste share-based grants |
12 |
||
|
Tax effect |
(2,165) |
||
|
Adjusted free cash flow |
$ |
1,160,000 |
|
|
As % of revenues |
16.3 % |
||
|
___________________________ |
|
(a) Reflects amounts reported for the six month period ended June 30, 2022, as shown on page 10. |
SOURCE Waste Connections, Inc.
