Fourth Quarter Highlights
- Revenue of $2.036 billion, up
8.9% year over year
- Net income(a) of $126.8
million, and adjusted EBITDA(b) of $656.0 million, up 16.4% year over year
- Adjusted EBITDA(b) margin of 32.2% of revenue, up
200 basis points year over year
- Momentum from accelerating margin expansion and acquisition
activity sets up 2024 for outsized growth
Full Year 2023 Highlights
- Revenue of $8.022 billion, up
11.2% year over year
- Net income of $762.8 million,
and adjusted net income(b) of $1.081 billion
- Adjusted EBITDA(b) of $2.523 billion, up 13.6%, and 31.5% of revenue,
up 70 basis points year over year
- Net cash provided by operating activities of $2.127 billion and adjusted free cash
flow(b) of $1.224
billion
- Completes acquisitions with approximately $215 million of total annualized revenue in
2023
Expectations for 2024
- Adjusted EBITDA growth of over 13%
- Outsized adjusted EBITDA(b) margin expansion of
120 basis points, or 32.7%
- Revenue contribution of approximately 4% from acquisitions
already completed
- Additional acquisitions, further increases in values for
recovered commodities or reduction of inflationary pressures to
provide upside to 2024 outlook
TORONTO, Feb. 13,
2024 /CNW/ -- Waste Connections, Inc. (TSX/NYSE: WCN)
("Waste Connections" or the "Company") today announced its results
for the fourth quarter of 2023 and outlook for 2024.
"Adjusted EBITDA(b) margin expansion of 200 basis
points in Q4 capped off a remarkable year for Waste Connections,
driven by solid execution and continued improvement in operating
trends. Solid waste organic growth led by 8.7% core pricing
was bolstered by improvements in commodity-driven revenues during
the quarter, providing momentum for 2024. Acquisition
activity also accelerated into year-end, as we announced the
acquisition of the $225 million (US$)
revenue E&P waste disposal-oriented assets of Secure Energy in
Western Canada, which closed
February 1st, bringing
expected 2024 acquisition revenue contribution to approximately
$325 million, with dialogue ongoing,"
said Ronald J. Mittelstaedt,
President and Chief Executive Officer.
"Looking at our differentiated results during the full year
2023, we delivered 70 basis points adjusted EBITDA(b)
margin expansion after overcoming 60 basis points in
headwinds from recovered commodity values to report
industry-leading margin of 31.5%. Double-digit growth in both
revenue and adjusted EBITDA(b) from price-led organic
solid waste growth and outsized acquisition contribution, along
with disciplined execution and focus on quality of revenue, drove
adjusted free cash flow(b) of $1.224 billion, or 15.3% of revenue," added Mr.
Mittelstaedt. "Moreover, both employee turnover and safety
incident rates exited 2023 at multi-year lows, setting up 2024 for
continued improvement in trends, along with the opportunity for
outsized margin expansion."
Mr. Mittelstatedt concluded, "We are extremely pleased by our
2023 results and our positioning for outsized growth in 2024.
We applaud the resilience of our 23,000 dedicated employees who
enabled us to deliver on our commitments and once again drive
industry-leading results. Their efforts have already
positioned us for 120 basis points adjusted EBITDA(b)
margin expansion in 2024 on approaching double-digit revenue
growth, with upside from continued improvement in recovered
commodity values or inflationary pressures, as well as any
additional acquisition activity."
Q4 2023 Results
Revenue in the fourth quarter totaled $2.036 billion, up from $1.869 billion in the year ago period.
Operating income was $224.5 million,
which included $169.6 million in
impairments primarily associated with adjustments to landfill
closure and post-closure costs and $2.9
million primarily associated with transaction-related
expenses. This compares to operating income of $312.0 million in the fourth quarter of 2022,
which included $4.7 million primarily
in transaction-related expenses. Net income in the fourth
quarter was $126.8 million, or
$0.49 per share on a diluted basis of
258.3 million shares. In the year ago period, the Company
reported net income of $194.4
million, or $0.75 per share on
a diluted basis of 258.0 million shares.
Adjusted net income(b) in the fourth quarter was
$285.5 million, or $1.11 per diluted share, up from $229.8 million, or $0.89 per diluted share, in the prior year
period. Adjusted EBITDA(b) in the fourth quarter
was $656.0 million, as compared to
$563.6 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 transaction-related items, as reflected in the
detailed reconciliations in the attached tables.
Full Year 2023 Results
For the year ended December 31,
2023, revenue was $8.022
billion, up from $7.212
billion in the year ago period. Operating income was
$1.236 billion, which included
$238.8 million primarily related to
adjustments associated with landfill closure and post-closure costs
and other impairments, $10.7 million
associated with transaction-related expenses and $14.4 million primarily related to executive
separation costs and fair value changes to equity awards. In
the year ago period, operating income was $1.242 billion, which included $43.2 million primarily attributable to
transaction-related expenses and impairments and other operating
items.
Net income for the year ended December
31, 2023 was $762.8 million,
or $2.95 per share on a diluted basis
of 258.1 million shares. In the year ago period, the Company
reported net income of $835.7
million, or $3.24 per share on
a diluted basis of 258.0 million shares.
Adjusted net income(b) for the year ended
December 31, 2023 was $1.081 billion, or $4.19 per diluted share, as compared to
$985.3 million, or $3.82 per diluted share, in the year ago period.
Adjusted EBITDA(b) for the year ended December 31, 2023 was $2.523 billion, up from $2.221 billion in the prior year period.
2024 Outlook
Waste Connections also announced its outlook for 2024, 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 2024 are subject to quarterly
fluctuations. See reconciliations in the attached tables.
- Revenue is estimated at approximately $8.750 billion;
- Net income is estimated at approximately $1.096 billion;
- Adjusted EBITDA(b) is estimated at approximately
$2.860 billion and 32.7% of revenue,
up 120 basis points year over year;
- Net cash provided by operating activities is estimated at
approximately $2.350 billion;
- Capital expenditures are estimated at $1.150 billion, including $150 million for Renewable Natural Gas (RNG)
facilities; and
- Adjusted free cash flow(b) is estimated at
$1.200 billion, including
$150 million in RNG-related capex and
$75 million in closure-related
outlays at the Chiquita Canyon Landfill; adjusted free cash
flow(b) normalized for RNG and Chiquita outlays is
estimated at $1.425 billion.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------
|
(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.
|
Q4 2023 Earnings Conference Call
Waste Connections will be hosting a conference call related to
fourth quarter earnings on February
14th 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,
conference call participants can preregister by clicking
here. Registered participants will receive dial-in
instructions and a personalized code for entry to the conference
call. A replay of the conference call will be available until
February 21, 2024, by calling
877-344-7529 (within North
America) or 412-317-0088 (international) and entering
Passcode #4262752.
Waste Connections will be filing a Form 8-K on EDGAR and on
SEDAR (as an "Other" document) prior to markets opening on
February 14th, providing
the Company's first quarter 2024 outlook for revenue, price plus
volume growth for solid waste, and adjusted
EBITDA(b).
About Waste Connections
Waste Connections (wasteconnections.com) is an integrated solid
waste services company that provides non-hazardous waste
collection, transfer and disposal services, including by rail,
along with resource recovery primarily through recycling and
renewable fuels generation. The Company serves approximately nine
million residential, commercial and industrial customers in mostly
exclusive and secondary markets across 44 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.
and Canada, as well as intermodal
services for the movement of cargo and solid waste containers in
the Pacific Northwest. 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 and focused 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 and enhancing employee engagement. Visit
wasteconnections.com/sustainability for more information and
updates on our progress towards targeted achievement.
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 2024 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
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF NET INCOME
THREE AND TWELVE MONTHS
ENDED DECEMBER 31, 2022 AND 2023
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,869,302
|
|
$
|
2,035,609
|
|
$
|
7,211,859
|
|
$
|
8,021,951
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
1,137,973
|
|
|
1,195,620
|
|
|
4,336,012
|
|
|
4,744,513
|
|
Selling, general and
administrative
|
|
|
177,763
|
|
|
192,752
|
|
|
696,467
|
|
|
799,119
|
|
Depreciation
|
|
|
201,111
|
|
|
213,291
|
|
|
763,285
|
|
|
845,638
|
|
Amortization of
intangibles
|
|
|
41,719
|
|
|
39,833
|
|
|
155,675
|
|
|
157,573
|
|
Impairments and other
operating items
|
|
|
(1,237)
|
|
|
169,595
|
|
|
18,230
|
|
|
238,796
|
|
Operating
income
|
|
|
311,973
|
|
|
224,518
|
|
|
1,242,190
|
|
|
1,236,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(64,766)
|
|
|
(69,728)
|
|
|
(202,331)
|
|
|
(274,642)
|
|
Interest
income
|
|
|
3,376
|
|
|
2,464
|
|
|
5,950
|
|
|
9,350
|
|
Other income,
net
|
|
|
781
|
|
|
4,135
|
|
|
3,154
|
|
|
12,481
|
|
Income before income
tax provision
|
|
|
251,364
|
|
|
161,389
|
|
|
1,048,963
|
|
|
983,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(57,063)
|
|
|
(34,760)
|
|
|
(212,962)
|
|
|
(220,675)
|
|
Net income
|
|
|
194,301
|
|
|
126,629
|
|
|
836,001
|
|
|
762,826
|
|
Plus/(less): Net loss
(income) attributable to noncontrolling
interests
|
|
|
51
|
|
|
124
|
|
|
(339)
|
|
|
(26)
|
|
Net income attributable
to Waste Connections
|
|
$
|
194,352
|
|
$
|
126,753
|
|
$
|
835,662
|
|
$
|
762,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.76
|
|
$
|
0.49
|
|
$
|
3.25
|
|
$
|
2.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.75
|
|
$
|
0.49
|
|
$
|
3.24
|
|
$
|
2.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
257,219,843
|
|
|
257,636,137
|
|
|
257,383,578
|
|
|
257,551,129
|
|
Diluted
|
|
|
257,974,749
|
|
|
258,303,370
|
|
|
258,038,801
|
|
|
258,149,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.255
|
|
$
|
0.285
|
|
$
|
0.945
|
|
$
|
1.05
|
|
WASTE CONNECTIONS,
INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
78,637
|
|
$
|
78,399
|
|
Accounts receivable,
net of allowance for credit losses of $22,939 and $23,553
at December 31, 2022 and 2023, respectively
|
|
|
833,862
|
|
|
856,953
|
|
Prepaid expenses and
other current assets
|
|
|
205,146
|
|
|
206,433
|
|
Total current
assets
|
|
|
1,117,645
|
|
|
1,141,785
|
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
102,727
|
|
|
105,639
|
|
Restricted
investments
|
|
|
68,099
|
|
|
70,350
|
|
Property and equipment,
net
|
|
|
6,950,915
|
|
|
7,228,331
|
|
Operating lease
right-of-use assets
|
|
|
192,506
|
|
|
261,782
|
|
Goodwill
|
|
|
6,902,297
|
|
|
7,404,400
|
|
Intangible assets,
net
|
|
|
1,673,917
|
|
|
1,603,541
|
|
Other assets,
net
|
|
|
126,497
|
|
|
100,048
|
|
Total
assets
|
|
$
|
17,134,603
|
|
$
|
17,915,876
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
638,728
|
|
$
|
642,455
|
|
Book
overdraft
|
|
|
15,645
|
|
|
14,855
|
|
Deferred
revenue
|
|
|
325,002
|
|
|
355,203
|
|
Accrued
liabilities
|
|
|
431,247
|
|
|
521,428
|
|
Current portion of
operating lease liabilities
|
|
|
35,170
|
|
|
32,533
|
|
Current portion of
contingent consideration
|
|
|
60,092
|
|
|
94,996
|
|
Current portion of
long-term debt and notes payable
|
|
|
6,759
|
|
|
26,462
|
|
Total current
liabilities
|
|
|
1,512,643
|
|
|
1,687,932
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
6,890,149
|
|
|
6,724,771
|
|
Long-term portion of
operating lease liabilities
|
|
|
165,462
|
|
|
238,440
|
|
Long-term portion of
contingent consideration
|
|
|
21,323
|
|
|
20,034
|
|
Deferred income
taxes
|
|
|
1,013,742
|
|
|
1,022,480
|
|
Other long-term
liabilities
|
|
|
417,640
|
|
|
524,438
|
|
Total
liabilities
|
|
|
10,020,959
|
|
|
10,218,095
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
257,211,175 shares issued and 257,145,716 shares outstanding at
December 31, 2022; 257,659,921 shares issued and 257,600,479
shares outstanding at
December 31, 2023
|
|
|
3,271,958
|
|
|
3,276,661
|
|
Additional paid-in
capital
|
|
|
244,076
|
|
|
284,284
|
|
Accumulated other
comprehensive loss
|
|
|
(56,830)
|
|
|
(9,826)
|
|
Treasury shares: 65,459
and 59,442 shares at December 31, 2022 and 2023,
respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
3,649,494
|
|
|
4,141,690
|
|
Total Waste
Connections' equity
|
|
|
7,108,698
|
|
|
7,692,809
|
|
Noncontrolling interest
in subsidiaries
|
|
|
4,946
|
|
|
4,972
|
|
Total
equity
|
|
|
7,113,644
|
|
|
7,697,781
|
|
Total
liabilities and equity
|
|
$
|
17,134,603
|
|
$
|
17,915,876
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED
DECEMBER 31, 2022 AND 2023
(Unaudited)
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
months ended December 31,
|
|
|
|
2022
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
836,001
|
|
$
|
762,826
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
9,519
|
|
|
38,877
|
|
Adjustment to closure
and post-closure liabilities
|
|
|
-
|
|
|
159,547
|
|
Depreciation
|
|
|
763,285
|
|
|
845,638
|
|
Amortization of
intangibles
|
|
|
155,675
|
|
|
157,573
|
|
Deferred income taxes,
net of acquisitions
|
|
|
93,481
|
|
|
6,329
|
|
Current period
provision for expected credit losses
|
|
|
17,353
|
|
|
17,430
|
|
Amortization of debt
issuance costs
|
|
|
5,454
|
|
|
6,483
|
|
Share-based
compensation
|
|
|
63,485
|
|
|
70,436
|
|
Interest
accretion
|
|
|
17,668
|
|
|
22,720
|
|
Payment of contingent
consideration recorded in earnings
|
|
|
(2,982)
|
|
|
-
|
|
Adjustments to
contingent consideration
|
|
|
(1,030)
|
|
|
30,367
|
|
Other
|
|
|
(8,217)
|
|
|
(3,943)
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
72,800
|
|
|
12,534
|
|
Net cash provided by
operating activities
|
|
|
2,022,492
|
|
|
2,126,817
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(2,206,901)
|
|
|
(676,793)
|
|
Capital expenditures
for property and equipment
|
|
|
(912,677)
|
|
|
(934,000)
|
|
Proceeds from disposal
of assets
|
|
|
30,676
|
|
|
31,581
|
|
Other
|
|
|
1,731
|
|
|
(1,867)
|
|
Net cash used in
investing activities
|
|
|
(3,087,171)
|
|
|
(1,581,079)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
4,816,146
|
|
|
1,818,765
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(3,073,985)
|
|
|
(2,052,153)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(16,911)
|
|
|
(13,317)
|
|
Change in book
overdraft
|
|
|
(1,076)
|
|
|
(790)
|
|
Payments for
repurchase of common shares
|
|
|
(424,999)
|
|
|
-
|
|
Payments for cash
dividends
|
|
|
(243,013)
|
|
|
(270,604)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(18,358)
|
|
|
(31,009)
|
|
Debt issuance
costs
|
|
|
(13,271)
|
|
|
-
|
|
Proceeds from issuance
of shares under employee share purchase plan
|
|
|
3,270
|
|
|
3,909
|
|
Proceeds from sale of
common shares held in trust
|
|
|
660
|
|
|
794
|
|
Net cash provided by
(used in) financing activities
|
|
|
1,028,463
|
|
|
(544,405)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
(2,035)
|
|
|
1,341
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
(38,251)
|
|
|
2,674
|
|
Cash, cash equivalents
and restricted cash at beginning of year
|
|
|
219,615
|
|
|
181,364
|
|
Cash, cash equivalents
and restricted cash at end of year
|
|
$
|
181,364
|
|
$
|
184,038
|
|
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, 2023:
|
|
Three months
ended
December 31,
2023
|
|
Twelve months
ended
December 31,
2023
|
Core Price
|
|
|
8.7 %
|
|
|
9.5 %
|
Surcharges
|
|
|
(0.8 %)
|
|
|
(0.5 %)
|
Volume
|
|
|
(2.3 %)
|
|
|
(2.0 %)
|
Recycling
|
|
|
0.8 %
|
|
|
(0.8 %)
|
Foreign Exchange
Impact
|
|
|
(0.1 %)
|
|
|
(0.5 %)
|
Total
|
|
|
6.3 %
|
|
|
5.7 %
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
December 31, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31, 2022
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,385,682
|
|
$
|
(6,093)
|
|
$
|
1,379,589
|
|
73.8
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
619,176
|
|
|
(254,381)
|
|
|
364,795
|
|
19.5
|
%
|
Solid Waste
Recycling
|
|
|
26,031
|
|
|
(496)
|
|
|
25,535
|
|
1.4
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
55,857
|
|
|
(3,296)
|
|
|
52,561
|
|
2.8
|
%
|
Intermodal and
Other
|
|
|
48,865
|
|
|
(2,043)
|
|
|
46,822
|
|
2.5
|
%
|
Total
|
|
$
|
2,135,611
|
|
$
|
(266,309)
|
|
$
|
1,869,302
|
|
100.0
|
%
|
|
|
|
Three months
ended December 31, 2023
|
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
1,501,882
|
|
$
|
(4,220)
|
|
$
|
1,497,662
|
|
73.6
|
%
|
Solid Waste Disposal
and Transfer
|
|
|
672,318
|
|
|
(279,231)
|
|
|
393,087
|
|
19.3
|
%
|
Solid Waste
Recycling
|
|
|
41,316
|
|
|
(1,462)
|
|
|
39,854
|
|
2.0
|
%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
59,780
|
|
|
(3,677)
|
|
|
56,103
|
|
2.7
|
%
|
Intermodal and
Other
|
|
|
49,066
|
|
|
(163)
|
|
|
48,903
|
|
2.4
|
%
|
Total
|
|
$
|
2,324,362
|
|
$
|
(288,753)
|
|
$
|
2,035,609
|
|
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, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Acquisitions,
net
|
|
$
|
149,994
|
|
$
|
51,011
|
|
$
|
552,001
|
|
$
|
407,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2022 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Cash Interest
Paid
|
|
$
|
58,883
|
|
$
|
69,868
|
|
$
|
177,424
|
|
$
|
260,923
|
Cash Taxes
Paid
|
|
|
46,556
|
|
|
81,470
|
|
|
100,156
|
|
|
207,020
|
Debt to Book Capitalization as of December 31, 2023: 47%
Internalization for the three months ended
December 31, 2023: 55%
Days Sales Outstanding for the three months ended
December 31, 2023: 39 (23
net of deferred revenue)
Share Information for the three months ended December 31, 2023:
|
|
|
Basic shares
outstanding
|
|
257,636,138
|
Dilutive effect of
equity-based awards
|
|
667,232
|
Diluted shares
outstanding
|
|
258,303,370
|
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,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net income attributable
to Waste Connections
|
|
$
|
194,352
|
|
$
|
126,753
|
|
$
|
835,662
|
|
$
|
762,800
|
Plus/(Less): Net income
(loss) attributable to noncontrolling interests
|
|
|
(51)
|
|
|
(124)
|
|
|
339
|
|
|
26
|
Plus: Income tax
provision
|
|
|
57,063
|
|
|
34,760
|
|
|
212,962
|
|
|
220,675
|
Plus: Interest
expense
|
|
|
64,766
|
|
|
69,728
|
|
|
202,331
|
|
|
274,642
|
Less: Interest
income
|
|
|
(3,376)
|
|
|
(2,464)
|
|
|
(5,950)
|
|
|
(9,350)
|
Plus: Depreciation and
amortization
|
|
|
242,830
|
|
|
253,124
|
|
|
918,960
|
|
|
1,003,211
|
Plus: Closure and
post-closure accretion
|
|
|
4,105
|
|
|
5,909
|
|
|
16,253
|
|
|
19,605
|
Plus/(Less):
Impairments and other operating items
|
|
|
(1,237)
|
|
|
169,595
|
|
|
18,230
|
|
|
238,796
|
Less: Other income,
net
|
|
|
(781)
|
|
|
(4,135)
|
|
|
(3,154)
|
|
|
(12,481)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses(a)
|
|
|
6,239
|
|
|
3,639
|
|
|
24,933
|
|
|
10,653
|
Plus/(Less): Fair
value changes to equity awards(b)
|
|
|
(263)
|
|
|
(1,791)
|
|
|
86
|
|
|
(1,726)
|
Plus: Executive
separation costs(c)
|
|
|
-
|
|
|
1,042
|
|
|
-
|
|
|
16,105
|
Adjusted
EBITDA
|
|
$
|
563,647
|
|
$
|
656,036
|
|
$
|
2,220,652
|
|
$
|
2,522,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
30.2 %
|
|
|
32.2 %
|
|
|
30.8 %
|
|
|
31.5 %
|
____________________________
|
(a)
Reflects the addback of acquisition-related transaction
costs.
|
(b)
Reflects fair value accounting changes associated with
certain equity awards.
|
(c)
Reflects the cash and non-cash components of severance expense
associated with an executive departure.
|
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
liquidity measure in the solid waste industry. Waste
Connections calculates 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 periodic distributions to
noncontrolling interests. Waste Connections further adjusts
this calculation to exclude the effects of items management
believes impact the ability to evaluate the liquidity of its
business operations. 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,
|
|
|
|
|
2022
|
|
2023
|
|
Net cash provided by
operating activities
|
|
|
$
|
2,022,492
|
|
$
|
2,126,817
|
|
Less: Change in book
overdraft
|
|
|
|
(1,076)
|
|
|
(790)
|
|
Plus: Proceeds from
disposal of assets
|
|
|
|
30,676
|
|
|
31,581
|
|
Less: Capital
expenditures for property and equipment
|
|
|
|
(912,677)
|
|
|
(934,000)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Payment of
contingent consideration recorded in
earnings(a)
|
|
|
|
2,982
|
|
|
-
|
|
Cash received for
divestitures(b)
|
|
|
|
(5,671)
|
|
|
(6,194)
|
|
Transaction-related
expenses(c)
|
|
|
|
30,825
|
|
|
5,519
|
|
Executive separation
costs (d)
|
|
|
|
-
|
|
|
1,686
|
|
Pre-existing
Progressive Waste share-based grants(e)
|
|
|
|
286
|
|
|
1,285
|
|
Tax
effect(f)
|
|
|
|
(2,993)
|
|
|
(1,772)
|
|
Adjusted free cash
flow
|
|
|
$
|
1,164,844
|
|
$
|
1,224,132
|
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
|
16.2 %
|
|
|
15.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________
|
(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 in 2022, the settlement
of an acquired tax liability.
|
(d)
|
Reflects the cash
component of severance expense associated with an executive
departure.
|
(e)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(f)
|
The aggregate tax
effect of footnotes (a) through (e) 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,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Reported net income
attributable to Waste Connections
|
|
$
|
194,352
|
|
$
|
126,753
|
|
$
|
835,662
|
|
$
|
762,800
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles(a)
|
|
|
41,719
|
|
|
39,833
|
|
|
155,675
|
|
|
157,573
|
Impairments and other
operating items(b)
|
|
|
(1,237)
|
|
|
169,595
|
|
|
18,230
|
|
|
238,796
|
Transaction-related
expenses(c)
|
|
|
6,239
|
|
|
3,639
|
|
|
24,933
|
|
|
10,653
|
Fair value changes to
equity awards(d)
|
|
|
(263)
|
|
|
(1,791)
|
|
|
86
|
|
|
(1,726)
|
Executive separation
costs(e)
|
|
|
-
|
|
|
1,042
|
|
|
-
|
|
|
16,105
|
Tax
effect(f)
|
|
|
(11,053)
|
|
|
(53,592)
|
|
|
(49,312)
|
|
|
(102,948)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
229,757
|
|
$
|
285,479
|
|
$
|
985,274
|
|
$
|
1,081,253
|
Diluted earnings per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.75
|
|
$
|
0.49
|
|
$
|
3.24
|
|
$
|
2.95
|
Adjusted net
income
|
|
$
|
0.89
|
|
$
|
1.11
|
|
$
|
3.82
|
|
$
|
4.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________
|
(a)
|
Reflects the
elimination of the non-cash amortization of acquisition-related
intangible assets.
|
(b)
|
Reflects adjustments
for 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 cash and
non-cash components of severance expense associated with an
executive departure.
|
(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.
|
2024 OUTLOOK
NON-GAAP RECONCILIATION
SCHEDULE
(in thousands of U.S. dollars, except where
noted)
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
2024 Outlook
|
|
|
|
Estimates
|
|
Observation
|
Net income attributable
to Waste Connections
|
|
$
|
1,096,000
|
|
|
Plus: Income tax provision
|
|
|
336,000
|
|
Approximate 23.5%
effective rate
|
Plus: Interest expense, net
|
|
|
280,000
|
|
|
Plus: Depreciation and Depletion
|
|
|
948,000
|
|
Approximately 10.8% of
revenue
|
Plus: Amortization
|
|
|
172,000
|
|
Approximately 2.0% of
revenue
|
Plus: Closure and post-closure accretion
|
|
|
28,000
|
|
|
Adjusted
EBITDA
|
|
$
|
2,860,000
|
|
Approximately 32.7% of
revenue
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
|
|
|
2024 Outlook
Estimates
|
Net cash provided by
operating activities(a)
|
|
$
|
2,350,000
|
Less: Capital expenditures(b)
|
|
|
(1,150,000)
|
Adjusted free cash
flow
|
|
$
|
1,200,000
|
____________________________
|
(a)
|
Net cash provided by
operating activities includes $75 million in closure-related
outlays at the Chiquita Canyon Landfill.
|
(b)
|
Capital expenditures of
$1.150 billion includes $150 million associated with renewable
natural gas facilities.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/waste-connections-reports-fourth-quarter-2023-results-and-provides-2024-outlook-302061005.html
SOURCE Waste Connections, Inc.