- Revenue of $1,485.1 million,
increase of 43.3%
- Adjusted EBITDA1 of $415.8
million, increase of 47.9%; Net loss of $245.2 million; Adjusted Net Income1
of $80.5 million
- Adjusted EBITDA margin1 of 28.0%, increase
of 90 basis points; Solid Waste Adjusted EBITDA
margin1 of 31.7%, increase of 110 basis points
- Adjusted Cash Flows from Operating
Activities1 of $283.9
million; cash flows from operating activities of
$223.9 million; Adjusted Free Cash
Flow1 of $250.4
million
- Adjusted earnings per share1 of $0.22; Loss per share of $(0.71)
- Year-to-date completed acquisitions of approximately
$735 million in annualized
revenue
VAUGHAN, ON, Nov. 3, 2021
/CNW/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL", "we"
or "our"), a leading North American diversified environmental
services company, today announced its results for the third quarter
of 2021.
"Our employees continued to deliver exceptional results in the
third quarter, allowing us to once again exceed our expectations,"
said Patrick Dovigi, Founder and
Chief Executive Officer of GFL. "This quarter we grew revenue by
43.3%, driven by strong organic growth ahead of expectations and
continued outperformance from recent acquisitions. We also expanded
Adjusted EBITDA margin1 by 90 basis points during the
quarter, demonstrating the ability to successfully counteract
increased inflationary cost pressures through proactive price
increases and ongoing efficiency initiatives. We achieved these
results in the face of continued COVID-19 restrictions in many of
our Canadian markets, where we generate almost 40% of our
revenue."
Mr. Dovigi added, "We remain focused on executing on our
strategy to create long-term value for all of our stakeholders with
the goal of growing our free cash flow. Year-to-date, we completed
37 acquisitions, including the acquisitions of Terrapure
Environmental Ltd. and Peoria Disposal Company, further reinforcing
our reputation as an acquirer of choice. We also completed several
financing initiatives to further reduce our cost of capital,
including an amendment to our revolving credit facility, resulting
in additional annualized cash interest savings, and an equity
commitment of up to US$300.0 million
from affiliates of HPS Investment Partners, LLC. Finally, we
received an additional US$74.2
million, US$126.4 million
year-to-date, from the sale of non-core solid waste assets, the
proceeds of which we are actively redeploying into organic and
inorganic initiatives in our key growth markets."
Mr. Dovigi continued, "We continue to see upside opportunities
ahead of us this year, as a result of our organic initiatives, and
the robust M&A pipeline that we manage. Based on our
performance to date and our proven ability to deliver on our growth
strategies, we are once again increasing our 2021 full year
guidance for revenue, Adjusted EBITDA1 and Adjusted Free
Cash Flow1. Furthermore, excluding acquisitions we
expect to complete prior to year-end, we are positioned to have
nearly 8.5% of roll over revenue contribution from
M&A heading into 2022."
"We remain committed to our sustainability initiatives and
continue to evaluate opportunities to unlock what we believe is
significant value through landfill gas to energy projects at our
MSW landfills and acceleration of the conversion of our fleet to
CNG," added Mr. Dovigi. "On October 1,
2021, we expanded on these initiatives with the addition of
landfill assets as part of our acquisition of Peoria Disposal
Company."
GFL also announced today that Jessica
McDonald will be joining the Board of Directors in
February 2022.
"Earlier this year we made a commitment to enhance the diversity
of our Board of Directors," said Mr. Dovigi. "I am very excited
that Jessica has agreed to join our board as our 7th
independent director. Jessica has an extensive background in
sustainable initiatives, having previously served as Deputy
Minister to the Premier of British
Columbia, Strategy Policy, Environment and Resource
Development and the President and Chief Executive Officer of BC
Hydro and Power Authority. She currently serves as a director and
member of the Audit Committee of Hydro One Limited and as a
director and member of the Environment, Health, Safety and
Corporate Responsibility Committee of Coeur Mining Inc. We welcome
Jessica to our board and look forward to working with her."
Third Quarter and Year to Date Results
Revenue increased by 43.3% to $1,485.1 million in the third quarter of 2021
compared to the third quarter of 2020. Solid waste revenue
increased by 8.2%, including 5.8% from core pricing, surcharge and
commodity price increases and 2.4% from positive volume. Adjusted
EBITDA1 increased by $134.6
million to $415.8 million in
the third quarter of 2021 compared to the third quarter of 2020.
Adjusted EBITDA margin1 was 28.0% in the third quarter
of 2021 compared to 27.1% in the third quarter of 2020. Net loss
increased to $245.2 million in
the third quarter of 2021 compared to a net loss of $114.7 million in the third quarter of 2020. Cash
flows from operating activities decreased by 12.8% to $223.9 million in the third quarter of 2021
compared to the third quarter of 2020.
Revenue for the nine months ended September 30, 2021 was $3,986.0 million, an increase of 34.6% compared
to the nine months ended September 30,
2020. Adjusted EBITDA1 increased by $309.9 million to $1,075.4
million for the nine months ended September 30, 2021 compared to the nine months
ended September 30, 2020. Adjusted
EBITDA margin1 was 27.0% for the nine months ended
September 30, 2021, compared to 25.9%
for the nine months ended September 30,
2020. Net loss decreased to $446.2
million for the nine months ended September 30, 2021 compared to a net loss of
$508.2 million for the nine months
ended September 30, 2020. Cash flows
from operating activities increased by 81.3% to $614.1 million for the nine months ended
September 30, 2021 compared to the
nine months ended September 30,
2020.
Financial Impact from COVID-19
Since the outbreak of the COVID-19 pandemic in March 2020, the U.S. and Canadian governments, as
well as numerous state, provincial and local governments,
implemented certain measures to slow the spread of the virus,
including shelter-in-place and physical distancing orders as well
as closure restrictions or requirements. In the first half of 2021,
we saw these measures lifted or scaled back in many U.S. states
resulting in an accelerated economic recovery. In Canada, many provincial governments introduced
new increased measures and re-introduced former measures, resulting
in a slower recovery. Some of these restrictions began to ease
towards the end of the second quarter of 2021, however, a
resurgence of cases in certain provinces during the third quarter
resulted in the re-introduction of former measures or provinces
maintaining their existing measures. The impact of the COVID-19
pandemic on our business and future results of operations,
financial condition and cash flows will depend largely on future
developments, which are uncertain and continue to evolve, including
the duration and spread of the virus in Canada and the
United States, the continued roll-out, execution and
effectiveness of vaccination programs, the severity of and actions
taken to limit the spread of COVID-19, including variants, and the
pace and extent to which normal economic and operating conditions
resume in the markets that we serve.
Updated Full Year 2021 Guidance2
GFL also provided its updated guidance for 2021 assuming a
CAD/US exchange rate of 1.25 for the remainder of the year (as
compared to the guidance provided on July
28, 2021):
- Revenue is estimated to be between $5,390 million and $5,410
million (as compared to between $5,225 million and $5,275
million)
- Adjusted EBITDA is estimated to be between $1,440 million and $1,450
million (as compared to between $1,400 million and $1,415
million)
- Adjusted Free Cash Flow is estimated to be between $525 million and $530
million (as compared to between $510 and $520
million)
In addition, net capital expenditures for 2021 are expected to
be approximately $540 million and
non-acquisition related investment in working capital is estimated
to be $35 million.
The 2021 updated guidance includes the expected contribution of
acquisitions already completed in 2021 but excludes any impact from
additional acquisitions not yet completed, refinancing
opportunities and any potential redeployment of capital. Implicit
in forward-looking statements in respect of our expectations for
2021 are certain current assumptions, including, among others, no
changes to the current economic environment and that none of the
jurisdictions in which we operate institute additional COVID-19
measures including shelter-in-place or similar orders. The 2021
updated guidance assumes that we will continue to execute on our
strategy of organically growing our business, leveraging our
scalable network to attract and retain customers across multiple
service lines, realize operational efficiencies, and extract
procurement and cost synergies.
Q3 2021 Earnings Call
GFL will host a conference call related to our
third quarter earnings on Thursday,
November 4, 2021 at 8:30 am Eastern
Time. A live audio webcast of the conference call can be
accessed by logging onto our Investors page at investors.gflenv.com
or by clicking here. Listeners may access the call toll-free by
dialing 1-844-200-6205 (access code: 361271) approximately 15
minutes prior to the scheduled start time.
We encourage participants who will be dialing in to pre-register
for the conference call using the following link:
https://www.incommglobalevents.com/registration/q4inc/8817/event-manager/.
Callers who pre-register will be given a conference access code and
PIN to gain immediate access to the call and bypass the live
operator on the day of the call. Participants may pre-register at
any time, including up to and after the call start time. For those
unable to listen live, an audio replay of the call will be
available until November 18, 2021 by
dialing 1-866-813-9403 (access code: 823858). A copy of the
presentation for the call will be available on our website at
investors.gflenv.com or by clicking here.
______________________
|
(1)
|
A non-IFRS
measure; see accompanying Non-IFRS Reconciliation
Schedule.
|
(2)
|
The Updated Full
Year 2021 Guidance includes non-IFRS measures, including Adjusted
EBITDA and Adjusted Free Cash Flow. Due to the uncertainty of the
likelihood, amount and timing of effects of events or circumstances
to be excluded from these measures, GFL does not have information
available to provide a quantitative reconciliation of such
projections to comparable IFRS measures. See "Non-IFRS Measures"
below.
|
About GFL
GFL, headquartered in Vaughan,
Ontario, is the fourth largest diversified environmental
services company in North America,
providing a comprehensive line of non-hazardous solid waste
management, infrastructure & soil remediation and liquid waste
management services through its platform of facilities throughout
Canada and in more than half of
the U.S. states. Across its organization, GFL has a workforce of
more than 17,000 employees.
For more information, visit our web site at gflenv.com. To
subscribe for investor email alerts please visit
investors.gflenv.com or click here.
Forward-Looking Statements
This release includes certain "forward-looking statements"
within the meaning of applicable U.S. and Canadian securities laws.
Forward-looking statements may relate to our future outlook,
financial guidance and anticipated events or results and may
include statements regarding our financial performance, financial
condition or results, business strategy, growth strategies,
budgets, operations and services. Particularly, statements
regarding our expectations of future results, performance,
achievements, prospects or opportunities or the markets in which we
operate is forward-looking statements. In some cases,
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "targets", "expects"
or "does not expect", "is expected", "an opportunity exists",
"budget", "scheduled", "estimates", "outlook", "forecasts",
"projection", "prospects", "strategy", "intends", "anticipates",
"does not anticipate", "believes", or "potential" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might", "will", "will be
taken", "occur" or "be achieved". In addition, any statements that
refer to expectations, intentions, projections, potential or other
characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts nor assurances of future
performance but instead represent management's expectations,
estimates and projections regarding future events or
circumstances.
These forward-looking statements and other forward-looking
information are based on our opinions, estimates and assumptions in
light of our experience, track record, perception of historical
trends, current conditions, growth opportunities and expected
future developments, as well as other factors that we currently
believe are appropriate and reasonable in the circumstances.
Certain assumptions are set out herein in the section titled
"Updated Full Year 2021 Guidance" and also include our ability to
obtain and maintain existing financing on acceptable terms; our
ability to source and execute on acquisitions on terms acceptable
to us; our ability to find purchasers for non-core assets on terms
acceptable to us; currency exchange and interest rates; the impact
of competition; the changes and trends in our industry or the
global economy; and the changes in laws, rules, regulations, and
global standards, are material factors considered in preparing
forward-looking statements and management's expectations. Other
factors that could materially affect our forward-looking statements
can be found in the "Risk Factors" section of GFL's annual report
for the 2020 fiscal year filed on Form 20-F and GFL's other
periodic filings with the U.S. Securities and Exchange Commission
and the securities commissions or similar regulatory authorities in
Canada. Shareholders, potential
investors and other readers are urged to consider these risks
carefully in evaluating our forward-looking statements and are
cautioned not to place undue reliance on such statements. The
forward-looking statements contained herein are subject to a number
of risks and uncertainties, including those referred to above, that
could cause actual results, events or conditions to differ
materially from those expressed or implied by the forward-looking
statements. There can be no assurance that the underlying opinions,
estimates and assumptions will prove to be correct. In particular,
it is difficult to predict the duration and severity of the
COVID-19 pandemic, including variants, and its impact on the
economy, the North American financial markets, our operations, our
M&A pipeline and our financial results. Although we have
attempted to identify important risk factors that could cause
actual results to differ materially from those contained in
forward-looking information, there may be other factors not
presently known to us or that we presently believe are not material
that could also cause actual results or future events to differ
materially from those expressed in such forward-looking
information. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information, which speaks only as of the date made.
The forward-looking information contained in this release
represents our expectations as of the date of this release (or as
the date they are otherwise stated to be made), and are subject to
change after such date. However, we disclaim any intention or
obligation or undertaking to update or revise any forward-looking
information whether as a result of new information, future events
or otherwise, except as required under applicable U.S. or Canadian
securities laws. The purpose of disclosing our financial outlook
set out in this release is to provide investors with more
information concerning the financial impact of our business
initiatives and growth strategies.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures.
These measures are not recognized measures under IFRS and do not
have a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Accordingly, these measures should not be considered in
isolation or as a substitute for analysis of our financial
information reported under IFRS. Rather, these non-IFRS measures
are used to provide investors with supplemental measures of our
operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS measures. We also believe that securities analysts, investors
and other interested parties frequently use non-IFRS measures in
the evaluation of issuers. Our management also uses non-IFRS
measures in order to facilitate operating performance comparisons
from period to period, to prepare annual operating budgets and
forecasts and to determine components of management
compensation.
In addition, GFL's projected full year 2021 Adjusted EBITDA and
Adjusted Free Cash Flow are anticipated to exclude the effects of
other events or circumstances in 2021 that are not representative
or indicative of GFL's results of operations. Such excluded items
are not currently determinable, but may be significant, such as
changes in the foreign exchange rate, the mark-to-market (gain)
loss on the Purchase Contracts, the cost of refinancings and
acquisition, integration, rebranding and other costs. Due to the
uncertainty of the likelihood, amount and timing of any such items,
GFL does not have information available to provide a quantitative
reconciliation of such projections to the comparable IFRS
measure.
Adjusted EBITDA is a supplemental measure used by management and
other users of our financial statements including our lenders and
investors, to assess the financial performance of our business
without regard to financing methods or capital structure. Adjusted
EBITDA is also a key metric that management uses prior to execution
of any strategic investing or financing opportunity. For example,
management uses Adjusted EBITDA as a measure in determining the
value of acquisitions, expansion opportunities and dispositions. In
addition, Adjusted EBITDA is utilized by financial institutions to
measure borrowing capacity. Adjusted EBITDA is calculated by adding
and deducting, as applicable from EBITDA, certain expenses, costs,
charges or benefits incurred in such period which in management's
view are either not indicative of underlying business performance
or impact the ability to assess the operating performance of our
business, including: (a) (gain) loss on foreign exchange, (b)
(gain) loss on sale of property and equipment, (c) mark-to-market
(gain) loss on fuel hedges, (d) mark-to-market (gain) loss on
Purchase Contracts, (e) share-based payments, (f) gain on
divestiture, (g) transaction costs, (h) IPO transaction costs, (i)
acquisition, rebranding and other integration costs (included in
cost of sales related to acquisition activity), and (j) deferred
purchase consideration. We use Adjusted EBITDA to facilitate a
comparison of our operating performance on a consistent basis
reflecting factors and trends affecting our business.
Adjusted EBITDA margin represents Adjusted EBITDA divided by
revenue. We use Adjusted EBITDA margin to facilitate a comparison
of the operating performance of each of our operating segments on a
consistent basis reflecting factors and trends affecting our
business.
Acquisition EBITDA represents, for the applicable period,
management's estimates of the annual Adjusted EBITDA of an acquired
business, based on its most recently available historical financial
information at the time of acquisition, as adjusted to give effect
to (a) the elimination of expenses related to the prior owners and
certain other costs and expenses that are not indicative of the
underlying business performance, if any, as if such business had
been acquired on the first day of such period ("Acquisition EBITDA
Adjustments"), and (b) contract and acquisition annualization for
contracts entered into and acquisitions completed by such acquired
business prior to our acquisition. Further adjustments are made to
such annual Adjusted EBITDA to reflect estimated operating cost
savings and synergies, if any, anticipated to be realized upon
acquisition and integration of the business into our operations. We
use Acquisition EBITDA for the acquired businesses to adjust our
Adjusted EBITDA to include a proportional amount of the Acquisition
EBITDA of the acquired businesses based upon the respective number
of months of operation for such period prior to the date of our
acquisition of each such business.
Adjusted Cash Flows from Operating Activities represents cash
flows from operating activities adjusted for (a) costs associated
with IPO related debt repayments, (b) prepayment penalties for
early note redemption, (c) IPO transaction costs, (d) transaction
costs, (e) acquisition, rebranding and other integration costs, (f)
M&A related net working capital investment, (g) tax refund from
CARES Act, (h) deferred purchase consideration, and (i) cash
interest paid on TEUs. Adjusted Free Cash Flow represents Adjusted
Cash Flows from Operating Activities adjusted for (a) proceeds from
asset divestitures, (b) proceeds on disposal of assets and (c)
purchase of property and equipment and intangible assets. Adjusted
Cash Flows from Operating Activities and Adjusted Free Cash Flow
are supplemental measures used by investors as a valuation and
liquidity measure in our industry. Management uses Adjusted Cash
Flows from Operating Activities and Adjusted Free Cash Flow to
evaluate and monitor the ongoing financial performance of GFL.
Adjusted Net Income (Loss) represents net income (loss) adjusted
for (a) amortization of intangible assets, (b) ARO discount rate
depreciation adjustment, (c) incremental depreciation of property
and equipment due to recapitalization, (d) IPO transaction costs,
(e) loss on extinguishment of debt, (f) amortization of deferred
financing costs (g) mark-to-market (gain) loss on Purchase
Contracts, (h) gain on divestiture, (i) (gain) loss on foreign
exchange, (j) transaction costs, (k) acquisition, rebranding and
other integration costs, (l) TEU amortization expense, and (m) the
tax impact of the forgoing. Adjusted earnings (loss) per share is
defined as Adjusted Net Income (Loss) divided by the weighted
average shares in the period. We believe that Adjusted earnings
(loss) per share provides a meaningful comparison of current
results to prior periods' results by excluding items that GFL does
not believe reflect its fundamental business performance.
Net Leverage is a supplemental measure used by management to
evaluate borrowing capacity and capital allocation strategies. Net
Leverage is equal to our total long-term debt, as adjusted for fair
value, deferred financings and other adjustments and reduced by our
cash, divided by Run-Rate EBITDA.
Run-Rate EBITDA represents Adjusted EBITDA for the applicable
period as adjusted to give effect to management's estimates of (a)
Acquisition EBITDA Adjustments (as defined above) and (b) the
impact of annualization of certain new municipal and disposal
contracts and cost savings initiatives, entered into, commenced or
implemented, as applicable, in such period, as if such contracts or
costs savings initiatives had been entered into, commenced or
implemented, as applicable, on the first day of such period.
Run-Rate EBITDA has not been adjusted to take into account the
impact of the cancellation of contracts and cost increases
associated with these contracts. These adjustments reflect monthly
allocations of Acquisition EBITDA for the acquired businesses based
on straight line proration. As a result, these estimates do not
take into account the seasonality of a particular acquired
business. While we do not believe the seasonality of any one
acquired business is material when aggregated with other acquired
businesses, the estimates may result in a higher or lower
adjustment to our Run-Rate EBITDA than would have resulted had we
adjusted for the actual results of each of the acquired businesses
for the period prior to our acquisition. We primarily use Run-Rate
EBITDA to show how GFL would have performed if each of the interim
acquisitions had been consummated at the start of the period as
well as to show the impact of the annualization of certain new
municipal and disposal contracts and cost savings initiatives. We
also believe that Run-Rate EBITDA is useful to investors and
creditors to monitor and evaluate our borrowing capacity and
compliance with certain of our debt covenants. Run-Rate EBITDA as
presented herein is calculated in accordance with the terms of our
revolving credit agreement.
All references to "$" in this press release are to Canadian
dollars, unless otherwise noted.
For further information:
Patrick Dovigi, Founder and Chief
Executive Officer,
+1 905-326-0101
pdovigi@gflenv.com
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Operations
and Comprehensive Loss
(In millions of dollars except per share amounts)
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
1,485.1
|
|
$
|
1,036.0
|
|
$
|
3,986.0
|
|
$
|
2,960.6
|
Expenses
|
|
|
|
|
|
|
|
Cost of
sales
|
1,292.3
|
|
909.5
|
|
3,566.3
|
|
2,643.1
|
Selling, general and
administrative expenses
|
152.3
|
|
104.4
|
|
422.0
|
|
363.6
|
Interest and other
finance costs
|
97.0
|
|
94.9
|
|
328.9
|
|
459.7
|
Deferred purchase
consideration
|
—
|
|
1.0
|
|
—
|
|
2.0
|
Loss on sale of
property and equipment
|
1.7
|
|
0.3
|
|
2.7
|
|
2.4
|
Loss (gain) on foreign
exchange
|
111.6
|
|
(22.0)
|
|
35.3
|
|
75.6
|
Mark-to-market loss on
Purchase Contracts
|
208.6
|
|
107.5
|
|
319.6
|
|
93.3
|
Gain on
divestiture
|
(31.4)
|
|
—
|
|
(66.9)
|
|
—
|
|
1,832.1
|
|
1,195.6
|
|
4,607.9
|
|
3,639.7
|
Loss before income
taxes
|
(347.0)
|
|
(159.6)
|
|
(621.9)
|
|
(679.1)
|
Current income tax
expense
|
3.3
|
|
1.4
|
|
12.8
|
|
5.1
|
Deferred tax
recovery
|
(105.1)
|
|
(46.3)
|
|
(188.5)
|
|
(176.0)
|
Income tax
recovery
|
(101.8)
|
|
(44.9)
|
|
(175.7)
|
|
(170.9)
|
Net
loss
|
(245.2)
|
|
(114.7)
|
|
(446.2)
|
|
(508.2)
|
|
|
|
|
|
|
|
|
Items that may be
subsequently reclassified to net loss
|
|
|
|
|
|
|
|
Currency translation
adjustment
|
190.6
|
|
(37.1)
|
|
26.8
|
|
35.0
|
Reclassification to
net income (loss) of fair value movements on cash flow hedges, net
of tax
|
—
|
|
—
|
|
(4.4)
|
|
—
|
Fair value movements
on cash flow hedges, net of tax
|
9.5
|
|
(12.0)
|
|
6.8
|
|
13.2
|
Other comprehensive
income (loss)
|
200.1
|
|
(49.1)
|
|
29.2
|
|
48.2
|
Total
comprehensive loss
|
$
|
(45.1)
|
|
$
|
(163.8)
|
|
$
|
(417.0)
|
|
$
|
(460.0)
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
Basic and
diluted(1)
|
$
|
(0.71)
|
|
$
|
(0.32)
|
|
$
|
(1.34)
|
|
$
|
(1.41)
|
Weighted and diluted
weighted average number of shares
outstanding(2)
|
362,058,515
|
|
360,366,000
|
|
361,063,498
|
|
360,388,991
|
|
|
(1)
|
Basic and diluted
loss per share is calculated on net loss adjusted for amounts
attributable to preferred shareholders. Refer to Note 10 in our
unaudited interim condensed consolidated financial statements and
the related notes for the three and nine months ended September 30,
2021.
|
(2)
|
Weighted and diluted
loss per share includes the minimum conversion of TEUs into
subordinate voting shares, which as of September 30, 2021
represented 29,212,413 subordinate voting shares (33,991,500
subordinate voting shares as of September 30, 2020).
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Financial
Position
(In millions of dollars)
|
September 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Cash
|
$
|
1,149.5
|
|
$
|
27.2
|
Trade and other
receivables, net
|
1,091.2
|
|
867.3
|
Prepaid expenses and
other assets
|
165.6
|
|
133.7
|
Current
assets
|
2,406.3
|
|
1,028.2
|
|
|
|
|
Property and
equipment, net
|
5,572.0
|
|
5,074.8
|
Intangible assets,
net
|
3,180.8
|
|
3,093.4
|
Other long-term
assets
|
36.2
|
|
33.2
|
Goodwill
|
6,930.3
|
|
6,500.4
|
Non-current
assets
|
15,719.3
|
|
14,701.8
|
Total
assets
|
18,125.6
|
|
15,730.0
|
|
|
|
|
Liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
1,177.4
|
|
1,014.8
|
Income taxes
payable
|
16.2
|
|
9.1
|
Long-term
debt
|
17.3
|
|
4.6
|
Lease
obligations
|
50.6
|
|
37.5
|
Due to related
party
|
12.8
|
|
12.8
|
Tangible equity
units
|
56.7
|
|
59.2
|
Landfill closure and
post-closure obligations
|
52.0
|
|
55.3
|
Current
liabilities
|
1,383.0
|
|
1,193.3
|
|
|
|
|
Long-term
debt
|
8,400.3
|
|
6,161.5
|
Lease
obligations
|
247.0
|
|
153.7
|
Other long-term
liabilities
|
39.4
|
|
37.2
|
Due to related
party
|
18.0
|
|
30.8
|
Deferred income tax
liabilities
|
384.8
|
|
466.0
|
Tangible equity
units
|
1,396.9
|
|
1,327.9
|
Landfill closure and
post-closure obligations
|
728.3
|
|
680.3
|
Non-current
liabilities
|
11,214.7
|
|
8,857.4
|
Total
liabilities
|
12,597.7
|
|
10,050.7
|
|
|
|
|
Shareholders'
equity
|
|
|
|
Share
capital
|
7,907.1
|
|
7,644.8
|
Contributed
surplus
|
70.7
|
|
54.3
|
Deficit
|
(2,237.6)
|
|
(1,778.3)
|
Accumulated other
comprehensive loss
|
(212.3)
|
|
(241.5)
|
Total
shareholders' equity
|
5,527.9
|
|
5,679.3
|
Total liabilities
and shareholders' equity
|
$
|
18,125.6
|
|
$
|
15,730.0
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Cash
Flows
(In millions of dollars)
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
activities
|
|
|
|
|
|
|
|
Net loss
|
$
|
(245.2)
|
|
$
|
(114.7)
|
|
$
|
(446.2)
|
|
$
|
(508.2)
|
Adjustments for
non-cash items
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
227.5
|
|
124.6
|
|
652.9
|
|
370.9
|
Amortization of
intangible assets
|
113.3
|
|
109.3
|
|
334.5
|
|
319.5
|
Gain on
divestiture
|
(31.4)
|
|
—
|
|
(66.9)
|
|
—
|
Interest and other
finance costs
|
97.0
|
|
94.9
|
|
328.9
|
|
459.7
|
Share-based
payments
|
10.9
|
|
7.2
|
|
31.2
|
|
27.1
|
Loss (gain) on
unrealized foreign exchange on long-term debt and TEUs
|
111.4
|
|
(22.5)
|
|
33.9
|
|
82.3
|
Loss on sale of
property and equipment
|
1.7
|
|
0.3
|
|
2.7
|
|
2.4
|
Mark-to-market loss on
Purchase Contracts
|
208.6
|
|
107.5
|
|
319.6
|
|
93.3
|
Mark-to-market loss on
fuel hedges
|
—
|
|
—
|
|
—
|
|
1.8
|
Current income tax
expense
|
3.3
|
|
1.4
|
|
12.8
|
|
5.1
|
Deferred tax
recovery
|
(105.1)
|
|
(46.3)
|
|
(188.5)
|
|
(176.0)
|
Interest paid in cash,
net
|
(73.7)
|
|
(36.3)
|
|
(250.7)
|
|
(280.9)
|
Income taxes paid in
cash, net
|
(5.6)
|
|
9.3
|
|
(6.6)
|
|
5.3
|
Changes in non-cash
working capital items
|
(74.0)
|
|
31.1
|
|
(118.0)
|
|
(51.4)
|
Landfill closure and
post-closure expenditures
|
(14.8)
|
|
(9.1)
|
|
(25.5)
|
|
(12.2)
|
|
223.9
|
|
256.7
|
|
614.1
|
|
338.7
|
Investing
activities
|
|
|
|
|
|
|
|
Proceeds on disposal
of assets
|
101.2
|
|
6.1
|
|
170.4
|
|
10.5
|
Purchase of property
and equipment and intangible assets
|
(134.7)
|
|
(85.7)
|
|
(417.8)
|
|
(305.7)
|
Business acquisitions,
net of cash acquired
|
(1,099.9)
|
|
(26.2)
|
|
(1,303.2)
|
|
(1,164.5)
|
|
(1,133.4)
|
|
(105.8)
|
|
(1,550.6)
|
|
(1,459.7)
|
Financing
activities
|
|
|
|
|
|
|
|
Repayment of lease
obligations
|
(22.2)
|
|
(12.7)
|
|
(59.4)
|
|
(60.1)
|
Issuance of long-term
debt
|
1,848.8
|
|
1,030.9
|
|
3,610.1
|
|
2,631.8
|
Repayment of long-term
debt
|
(46.3)
|
|
(29.7)
|
|
(1,371.6)
|
|
(4,427.5)
|
Payment of contingent
purchase consideration
|
(3.7)
|
|
(11.4)
|
|
(19.6)
|
|
(11.4)
|
Issuance of share
capital, net of issuance costs
|
—
|
|
—
|
|
—
|
|
3,257.6
|
Issuance of TEUs, net
of issuance costs
|
—
|
|
—
|
|
—
|
|
1,006.9
|
Repayment of
Amortizing Notes
|
(13.7)
|
|
(13.6)
|
|
(40.1)
|
|
(29.4)
|
Dividends issued and
paid
|
(4.4)
|
|
(8.7)
|
|
(13.1)
|
|
(8.7)
|
Return of
capital
|
—
|
|
—
|
|
—
|
|
(0.8)
|
Payment of financing
costs
|
(17.5)
|
|
(9.2)
|
|
(28.1)
|
|
(19.7)
|
Issuance of loan from
related party
|
—
|
|
—
|
|
—
|
|
29.0
|
Repayment of loan to
related party
|
(6.4)
|
|
(3.5)
|
|
(12.8)
|
|
(3.5)
|
|
1,734.6
|
|
942.1
|
|
2,065.4
|
|
2,364.2
|
|
|
|
|
|
|
|
|
Increase in
cash
|
825.1
|
|
1,093.0
|
|
1,128.9
|
|
1,243.2
|
Changes due to
foreign exchange revaluation of cash
|
14.0
|
|
0.3
|
|
(6.6)
|
|
(0.8)
|
Cash, beginning of
period
|
310.4
|
|
723.9
|
|
27.2
|
|
574.8
|
Cash, end of
period
|
$
|
1,149.5
|
|
$
|
1,817.2
|
|
$
|
1,149.5
|
|
$
|
1,817.2
|
You should read the following information in conjunction with
our audited consolidated financial statements and notes thereto as
of and for the year ended December 31,
2020 as well as our unaudited interim condensed consolidated
financial statements and notes thereto for the three and nine
months ended September 30, 2021.
Revenue Growth
The following table summarizes the revenue growth in our
operating segments for the periods indicated:
|
Three months ended
September 30, 2021
|
|
Contribution from
Acquisitions
|
|
Organic
Growth
|
|
Foreign
Exchange
|
|
Total Revenue
Growth
|
Solid
waste
|
|
|
|
|
|
|
|
Canada
|
6.5
|
%
|
|
7.9
|
%
|
|
—
|
%
|
|
14.4
|
%
|
USA
|
66.1
|
|
|
8.5
|
|
|
(5.8)
|
|
|
68.8
|
|
Solid
waste
|
41.3
|
|
|
8.2
|
|
|
(3.4)
|
|
|
46.1
|
|
Infrastructure and
soil remediation
|
5.1
|
|
|
1.3
|
|
|
(0.5)
|
|
|
5.9
|
|
Liquid
waste
|
66.4
|
|
|
4.4
|
|
|
(2.0)
|
|
|
68.8
|
|
Total
|
39.3
|
%
|
|
6.9
|
%
|
|
(2.9)
|
%
|
|
43.3
|
%
|
|
Nine months ended
September 30, 2021
|
|
Contribution from
Acquisitions
|
|
Organic
Growth
|
|
Foreign
Exchange
|
|
Total Revenue
Growth
|
Solid
waste
|
|
|
|
|
|
|
|
Canada
|
3.5
|
%
|
|
9.7
|
%
|
|
—
|
%
|
|
13.2
|
%
|
USA
|
62.1
|
|
|
7.3
|
|
|
(8.1)
|
|
|
61.3
|
|
Solid
waste
|
38.5
|
|
|
8.2
|
|
|
(4.9)
|
|
|
41.8
|
|
Infrastructure and
soil remediation
|
3.7
|
|
|
(6.1)
|
|
|
(0.7)
|
|
|
(3.1)
|
|
Liquid
waste
|
28.8
|
|
|
3.6
|
|
|
(2.7)
|
|
|
29.7
|
|
Total
|
32.9
|
%
|
|
5.8
|
%
|
|
(4.1)
|
%
|
|
34.7
|
%
|
Detail of Solid Waste Organic Growth
The following table summarizes the components of our solid waste
organic growth for the periods indicated:
|
|
Three months
ended
September 30,
2021
|
|
Nine months
ended
September 30,
2021
|
Price and
surcharges
|
|
4.3
|
%
|
|
4.1
|
%
|
Volume
|
|
2.4
|
|
|
3.1
|
|
Commodity
price
|
|
1.5
|
|
|
1.0
|
|
Total organic
growth
|
|
8.2
|
%
|
|
8.2
|
%
|
Operating Segment Results
The following tables summarize our operating segment results for
the periods indicated (all amounts are in millions of dollars,
unless otherwise stated):
|
Three months
ended
September 30,
2021
|
|
Three months
ended
September 30,
2020
|
|
Revenue
|
|
Adjusted
EBITDA
|
|
Adjusted EBITDA
Margin
|
|
Revenue
|
|
Adjusted
EBITDA
|
|
Adjusted EBITDA
Margin
|
Solid
waste
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
$
|
377.4
|
|
$
|
116.5
|
|
30.9
|
%
|
|
$
|
329.7
|
|
$
|
96.9
|
|
29.4
|
%
|
USA
|
778.6
|
|
250.5
|
|
32.2
|
|
|
461.6
|
|
145.4
|
|
31.5
|
|
Solid
waste
|
1,156.0
|
|
367.0
|
|
31.7
|
|
|
791.3
|
|
242.3
|
|
30.6
|
|
Infrastructure and
soil remediation
|
140.7
|
|
29.8
|
|
21.2
|
|
|
133.0
|
|
27.0
|
|
20.3
|
|
Liquid
waste
|
188.4
|
|
53.8
|
|
28.6
|
|
|
111.7
|
|
32.0
|
|
28.6
|
|
Corporate
|
—
|
|
(34.8)
|
|
—
|
|
|
—
|
|
(20.1)
|
|
—
|
|
Total
|
$
|
1,485.1
|
|
$
|
415.8
|
|
28.0
|
%
|
|
$
|
1,036.0
|
|
$
|
281.2
|
|
27.1
|
%
|
|
Nine months
ended
September 30,
2021
|
|
Nine months
ended
September
30, 2020
|
|
Revenue
|
|
Adjusted
EBITDA
|
|
Adjusted EBITDA
Margin
|
|
Revenue(1)
|
|
Adjusted
EBITDA(2)
|
|
Adjusted EBITDA
Margin
|
Solid
waste
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
$
|
1,028.9
|
|
$
|
304.5
|
|
29.6
|
%
|
|
$
|
909.0
|
|
$
|
250.6
|
|
27.6
|
%
|
USA
|
2,181.7
|
|
698.0
|
|
32.0
|
|
|
1,354.0
|
|
427.4
|
|
31.6
|
|
Solid
waste
|
3,210.6
|
|
1,002.5
|
|
31.2
|
|
|
2,263.0
|
|
678.0
|
|
30.0
|
|
Infrastructure and
soil remediation
|
382.9
|
|
69.6
|
|
18.2
|
|
|
394.9
|
|
75.2
|
|
19.0
|
|
Liquid
waste
|
392.5
|
|
102.0
|
|
26.0
|
|
|
302.7
|
|
71.8
|
|
23.7
|
|
Corporate
|
—
|
|
(98.7)
|
|
—
|
|
|
—
|
|
(59.5)
|
|
—
|
|
Total
|
$
|
3,986.0
|
|
$
|
1,075.4
|
|
27.0
|
%
|
|
$
|
2,960.6
|
|
$
|
765.5
|
|
25.9
|
%
|
|
_________________________
|
(1)
|
Includes
reclassification of $1.5 million from Solid waste - Canada into
Liquid waste.
|
(2)
|
Includes
reclassification of $0.4 million from Solid waste - Canada into
Liquid waste.
|
Net Leverage
The following table presents the calculation of Net Leverage as
at the dates indicated (all amounts are in millions of dollars
unless otherwise stated):
|
September 30,
2021
|
|
December 31,
2020
|
Total long-term
debt
|
$
|
8,417.6
|
|
$
|
6,166.1
|
Deferred finance
costs and other adjustments
|
27.1
|
|
58.5
|
Total long-term debt
excluding deferred finance costs and other adjustments
|
$
|
8,390.5
|
|
$
|
6,107.6
|
Less: cash
|
(1,149.5)
|
|
(27.2)
|
|
7,241.0
|
|
6,080.4
|
Trailing twelve
months Adjusted EBITDA
|
1,386.6
|
|
1,076.7
|
Acquisition EBITDA
Adjustments
|
150.2
|
|
238.3
|
Run-Rate
EBITDA
|
$
|
1,536.8
|
|
$
|
1,315.0
|
Net
Leverage
|
4.71x
|
|
4.62x
|
NON-IFRS RECONCILIATION SCHEDULE
Adjusted EBITDA
The tables below set forth the reconciliation of our net loss to
EBITDA and Adjusted EBITDA for the periods indicated (all amounts
are in millions of dollars):
($
millions)
|
Three months
ended
September 30,
2021
|
|
Three months
ended
September 30,
2020
|
Net loss
|
(245.2)
|
|
$
|
(114.7)
|
Add:
|
|
|
|
Interest and other
finance costs
|
97.0
|
|
94.9
|
Depreciation of
property and equipment
|
227.5
|
|
124.6
|
Amortization of
intangible assets
|
113.3
|
|
109.3
|
Income tax
recovery
|
(101.8)
|
|
(44.9)
|
EBITDA
|
90.8
|
|
169.2
|
Add:
|
|
|
|
Loss (gain) on foreign
exchange(1)
|
111.6
|
|
(22.0)
|
Loss on sale of
property and equipment
|
1.7
|
|
0.3
|
Mark-to-market loss on
Purchase Contracts(2)
|
208.6
|
|
107.5
|
Share-based
payments(3)
|
10.9
|
|
7.2
|
Gain on
divestiture(4)
|
(31.4)
|
|
—
|
Transaction
costs(5)
|
17.8
|
|
17.1
|
Acquisition,
rebranding and other integration costs(7)
|
5.8
|
|
0.9
|
Deferred purchase
consideration
|
—
|
|
1.0
|
Adjusted
EBITDA
|
$
|
415.8
|
|
$
|
281.2
|
|
|
|
|
|
|
($
millions)
|
|
Nine months
ended
September 30,
2021
|
|
Nine months
ended
September 30,
2020
|
Net loss
|
|
(446.2)
|
|
|
$
|
(508.2)
|
|
Add:
|
|
|
|
|
Interest and other
finance costs
|
|
328.9
|
|
|
459.7
|
|
Depreciation of
property and equipment
|
|
652.9
|
|
|
370.9
|
|
Amortization of
intangible assets
|
|
334.5
|
|
|
319.5
|
|
Income tax
recovery
|
|
(175.7)
|
|
|
(170.9)
|
|
EBITDA
|
|
694.4
|
|
|
471.0
|
|
Add:
|
|
|
|
|
Loss on foreign
exchange(1)
|
|
35.3
|
|
|
75.6
|
|
Loss on sale of
property and equipment
|
|
2.7
|
|
|
2.4
|
|
Mark-to-market loss on
fuel hedges
|
|
—
|
|
|
1.8
|
|
Mark-to-market loss on
Purchase Contracts(2)
|
|
319.6
|
|
|
93.3
|
|
Share-based
payments(3)
|
|
31.2
|
|
|
27.1
|
|
Gain on
divestiture(4)
|
|
(66.9)
|
|
|
—
|
|
Transaction
costs(5)
|
|
43.2
|
|
|
36.0
|
|
IPO transaction
costs(6)
|
|
—
|
|
|
46.2
|
|
Acquisition,
rebranding and other integration costs(7)
|
|
15.9
|
|
|
10.1
|
|
Deferred purchase
consideration
|
|
—
|
|
|
2.0
|
|
Adjusted
EBITDA
|
|
$
|
1,075.4
|
|
|
$
|
765.5
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consists of
(i) non-cash gains and losses on foreign exchange and interest
rate swaps entered into in connection with our debt instruments and
(ii) gains and losses attributable to foreign exchange rate
fluctuations.
|
(2)
|
This is a non-cash
item that consists of the fair value "mark-to-market" adjustment on
the Purchase Contracts.
|
(3)
|
This is a non-cash
item and consists of the amortization of the estimated fair value
of share-based options granted to certain members of management
under share-based option plans.
|
(4)
|
Consists of gain
resulting from the divestiture of certain landfill assets, as well
as hauling and ancillary operations.
|
(5)
|
Consists of
acquisition, integration and other costs such as legal, consulting
and other fees and expenses incurred in respect of acquisitions and
financing activities completed during the applicable period. We
expect to incur similar costs in connection with other acquisitions
in the future and, under IFRS, such costs relating to acquisitions
are expensed as incurred and not capitalized. This is part
of SG&A.
|
(6)
|
Consists of costs
associated with the IPO, such as legal, audit, regulatory and other
fees and expenses incurred in connection with the IPO, as well as
underwriting fees related to the TEUs that were expensed
as incurred.
|
(7)
|
Consists of costs
related to the rebranding of equipment acquired through business
acquisitions. We expect to incur similar costs in connection with
other acquisitions in the future. This is part of cost of
sales.
|
Adjusted Net Income
The tables below set forth the reconciliation of our net loss to
Adjusted Net Income for the periods indicated (all amounts are in
millions of dollars, except per share amounts):
($
millions)
|
Three months
ended
September 30,
2021
|
|
Three months
ended
September 30,
2020
|
Net loss
|
$
|
(245.2)
|
|
$
|
(114.7)
|
Add:
|
|
|
|
Amortization of
intangible assets(1)
|
113.3
|
|
109.3
|
ARO discount rate
depreciation adjustment(2)
|
4.6
|
|
—
|
Incremental
depreciation of property and equipment due to
recapitalization
|
4.5
|
|
4.7
|
Amortization of
deferred financing costs
|
6.4
|
|
3.4
|
Mark-to-market loss on
Purchase Contracts(5)
|
208.6
|
|
107.5
|
Gain on
divestiture
|
(31.4)
|
|
—
|
Loss (gain) on foreign
exchange(6)
|
111.6
|
|
(22.0)
|
Transaction
costs(7)
|
17.8
|
|
17.1
|
Acquisition,
rebranding and other integration costs(8)
|
5.8
|
|
0.9
|
TEU amortization
expense
|
0.4
|
|
1.1
|
Tax
effect(9)
|
(115.9)
|
|
(62.2)
|
Adjusted Net
Income
|
$
|
80.5
|
|
$
|
45.1
|
Adjusted earnings
per share, basic and diluted
|
$
|
0.22
|
|
$
|
0.13
|
($
millions)
|
Nine months
ended
September 30,
2021
|
|
Nine months
ended
September 30,
2020
|
Net loss
|
$
|
(446.2)
|
|
$
|
(508.2)
|
Add:
|
|
|
|
Amortization of
intangible assets(1)
|
334.5
|
|
319.5
|
ARO discount rate
depreciation adjustment(2)
|
14.8
|
|
—
|
Incremental
depreciation of property and equipment due to
recapitalization
|
13.9
|
|
14.2
|
IPO transaction
costs(3)
|
—
|
|
46.2
|
Loss on extinguishment
of debt(4)
|
49.3
|
|
133.2
|
Amortization of
deferred financing costs
|
16.5
|
|
26.0
|
Mark-to-market loss on
Purchase Contracts(5)
|
319.6
|
|
93.3
|
Gain on
divestiture
|
(66.9)
|
|
—
|
Loss on foreign
exchange(6)
|
35.3
|
|
75.6
|
Transaction
costs(7)
|
43.2
|
|
36.0
|
Acquisition,
rebranding and other integration costs(8)
|
15.9
|
|
10.1
|
TEU amortization
expense
|
1.4
|
|
2.2
|
Tax
effect(9)
|
(202.6)
|
|
(200.4)
|
Adjusted Net
Income
|
$
|
128.7
|
|
$
|
47.7
|
Adjusted earnings
per share, basic and diluted
|
$
|
0.36
|
|
$
|
0.13
|
|
|
(1)
|
This is a non-cash
item and consists of the amortization of intangible assets such as
customer lists, municipal contracts, non-compete agreements, trade
name and other licenses.
|
(2)
|
This is a non-cash
item and consists of depreciation expense related to the difference
between the ARO calculated using the credit adjusted risk-free
discount rate required for measurement of the ARO through purchase
accounting compared to the risk-free discount rate required for
quarterly valuations.
|
(3)
|
Consists of costs
associated with the IPO, such as legal, audit, regulatory and other
fees and expenses incurred in connection with the IPO, as well as
underwriting fees related to the TEUs that were expenses as
incurred.
|
(4)
|
This consists of
costs associated with the early redemption of the 2027 Notes and
interest and penalties related to loss on extinguishment of the PIK
Notes and the redemption of the 2022 Notes and the 2023 Notes in
their entirety and partial early repayment of the 2026
Notes.
|
(5)
|
This is a non-cash
item that consists of the fair value "mark-to-market" adjustment on
the Purchase Contracts.
|
(6)
|
Consists of (i)
non-cash gains and losses on foreign exchange and interest rate
swaps entered into in connection with our debt instruments and (ii)
gains and losses attributable to foreign exchange rate
fluctuations.
|
(7)
|
Consists of
acquisition, integration and other costs such as legal, consulting
and other fees and expenses incurred in respect of acquisitions and
financing activities completed during the applicable period. We
expect to incur similar costs in connection with other acquisitions
in the future and, under IFRS, such costs relating to acquisitions
are expensed as incurred and not capitalized. This is part of
SG&A.
|
(8)
|
Consists of costs
related to the rebranding of equipment acquired through business
acquisitions. We expect to incur similar costs in connection with
other acquisitions in the future. This is part of cost of
sales.
|
(9)
|
Consists of the tax
effect of the adjustments to net income (loss).
|
Adjusted Cash Flows from Operating Activities and Adjusted
Free Cash Flow
The tables below set forth the reconciliation of our cash flows
from operating activities to Adjusted Cash Flows from Operating
Activities and Adjusted Free Cash Flow, for the periods indicated
(all amounts are in millions of dollars):
($
millions)
|
Three months
ended
September 30,
2021
|
|
Three months
ended
September 30,
2020
|
Cash flows from
operating activities
|
$
|
223.9
|
|
256.7
|
Add:
|
|
|
|
Transaction
costs(4)
|
17.8
|
|
17.1
|
Acquisition,
rebranding and other integration costs(5)
|
5.8
|
|
0.9
|
M&A related net
working capital investment(6)
|
35.4
|
|
(1.2)
|
Tax refund from CARES
Act(7)
|
—
|
|
(12.5)
|
Deferred purchase
consideration
|
—
|
|
1.0
|
Cash interest paid on
TEUs(8)
|
1.0
|
|
3.0
|
Adjusted Cash Flows
from Operating Activities
|
283.9
|
|
265.0
|
Less:
|
|
|
|
Proceeds from asset
divestitures(9)
|
94.5
|
|
—
|
Proceeds on disposal
of assets
|
6.7
|
|
6.1
|
Purchase of property
and equipment and intangible assets
|
(134.7)
|
|
(85.7)
|
Adjusted Free Cash
Flow
|
$
|
250.4
|
|
$
|
185.4
|
|
|
|
|
|
|
($
millions)
|
Nine months
ended
September 30,
2021
|
|
Nine months
ended
September 30,
2020
|
Cash flows from
operating activities
|
$
|
614.1
|
|
338.7
|
Add:
|
|
|
|
Costs associated with
IPO related debt repayments(1)
|
—
|
|
106.6
|
Prepayment penalties
for early note redemption(2)
|
49.3
|
|
—
|
IPO transaction
costs(3)
|
—
|
|
46.2
|
Transaction
costs(4)
|
43.2
|
|
36.0
|
Acquisition,
rebranding and other integration costs(5)
|
15.9
|
|
10.1
|
M&A related net
working capital investment(6)
|
35.4
|
|
(0.6)
|
Tax refund from CARES
Act(7)
|
(1.5)
|
|
(12.5)
|
Deferred purchase
consideration
|
—
|
|
2.0
|
Cash interest paid on
TEUs(8)
|
3.3
|
|
3.5
|
Adjusted Cash Flows
from Operating Activities
|
759.7
|
|
530.0
|
Less:
|
|
|
|
Proceeds from asset
divestitures(9)
|
157.6
|
|
—
|
Proceeds on disposal
of assets
|
12.8
|
|
10.5
|
Purchase of property
and equipment and intangible assets
|
(417.8)
|
|
(305.7)
|
Adjusted Free Cash
Flow
|
$
|
512.3
|
|
$
|
234.8
|
|
|
|
|
|
|
(1)
|
Consists of costs
associated with the extinguishment of our 11.000% paid-in-kind
notes ("PIK Notes"), 5.625% USD senior unsecured notes due 2022
("2022 Notes"), and our 5.375% USD senior unsecured notes due 2023
("2023 Notes"), the termination of the swap arrangements associated
with the 2022 Notes and the 2023 Notes, and accelerated interest
payments of the PIK Notes, the 2022 Notes and the 2023
Notes.
|
(2)
|
Consists of
prepayment penalty costs associated with the early redemption of
the 2027 Notes.
|
(3)
|
Consists of costs
associated with the IPO, such as legal, audit, regulatory and other
fees and expenses incurred in connection with the IPO, as well as
underwriting fees related to the TEUs that were expensed
as incurred.
|
(4)
|
Consists of
acquisition, integration and other costs such as legal, consulting
and other fees and expenses incurred in respect of acquisitions and
financing activities completed during the applicable period. We
expect to incur similar costs in connection with other acquisitions
in the future and, under IFRS, such costs relating to acquisitions
are expensed as incurred and not capitalized. This is part
of SG&A.
|
(5)
|
Consists of costs
related to the rebranding of equipment acquired through business
acquisitions. We expect to incur similar costs in connection with
other acquisitions in the future. This is part of cost of
sales.
|
(6)
|
Consists of net
non-cash working capital in the period in relation to
acquisitions.
|
(7)
|
Consists of tax
refunds received related to loss carry-backs under the CARES Act
applied to prior year taxable income.
|
(8)
|
Consists of interest
paid in cash on the Amortizing Notes.
|
(9)
|
Consists of proceeds
on divestiture of certain landfill assets, as well as hauling and
ancillary operations. Amount has been included in Adjusted Free
Cash Flow on the basis that the proceeds will be redeployed into
the business before year end and will therefore yield a nil
impact.
|
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SOURCE GFL Environmental Inc.