8-K
Waste Connections, Inc. (WCN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 23, 2025
Waste Connections, Inc.
(Exact name of registrant as specified in its charter)
| | | | | |
|---|---|---|---|---|
| Ontario, Canada | 1-34370 | 98-1202763 | ||
| (State or other jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
6220 Hwy 7 , Suite 600
Woodbridge
Ontario **** L4H 4G3
Canada
(Address of principal executive offices)
Registrant’s telephone number, including area code: ( 905 ) 532-7510
Not Applicable
(Former name or address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Shares, no par value | WCN | New York Stock Exchange (“NYSE”)<br>Toronto Stock Exchange (“TSX”) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| | | |
|---|---|---|
| | ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | | |
| | ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | | |
| | ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | | |
| | ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
See Item 7.01 below.
Item 7.01 Regulation FD Disclosure.
On April 23, 2025, Waste Connections, Inc., a corporation organized under the laws of Ontario, Canada (“Waste Connections” or the “Company”), issued a press release announcing its first quarter 2025 results. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information furnished in Items 2.02 and 7.01 is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section, and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Safe Harbor and Forward-Looking Information
This document contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), 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 document 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 document include, but are not limited to, statements about expected 2025 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 document. Waste Connections undertakes no obligation to update the forward-looking statements set forth in this document, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated April 23, 2025, issued by Waste Connections, Inc. |
| 104 | The cover page of Waste Connections, Inc. on Current Report on Form 8-K formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | |
|---|---|---|
| | WASTE CONNECTIONS, INC. | |
| | | |
| | | |
| Date: April 23, 2025 | BY: | /s/ Mary Anne Whitney |
| | | Mary Anne Whitney |
| | | Executive Vice President and Chief Financial Officer |
(WCN Q1 2023 Earnings Press Release - DRAFT 4).docx
Exhibit 99.1
WASTE CONNECTIONS REPORTS FIRST QUARTER 2025 RESULTS
| - | Better than expected financial results from price-led organic solid waste growth and continued acquisition activity provide strong start to 2025 |
|---|---|
| - | Revenue of $2.228 billion, above outlook and up 7.5% year over year |
| --- | --- |
| - | Net income^(a)^ of $241.5 million and adjusted EBITDA^(b)^ of $712.2 million, above outlook and up 9.5% year over year |
| --- | --- |
| - | Adjusted EBITDA^(b)^ margin of 32.0%, above outlook and up 60 basis points year over year |
| --- | --- |
| - | Net income and adjusted net income^(b)^ of $0.93 and $1.13 per share, respectively |
| --- | --- |
| - | Net cash provided by operating activities of $541.5 million and adjusted free cash flow^(b)^ of $332.1 million |
| --- | --- |
| - | Year-to-date acquired annualized revenue of over $125 million |
| --- | --- |
TORONTO, ONTARIO, April 23, 2025 - Waste Connections, Inc. (TSX/NYSE: WCN) (“Waste Connections” or the “Company”) today announced its results for the first quarter of 2025.
“We’re extremely pleased by the strong start to 2025 as price-led organic solid waste growth and continued acquisition activity drove a top-to-bottom beat in the quarter, positioning us well for the full year. Exemplary operational execution supported core solid waste pricing of 6.9% and drove better than expected results as we overcame incremental volume weakness from protracted weather events across many markets to exceed our outlook and deliver adjusted EBITDA^(b)^ margin of 32.0%,” said Ronald J. Mittelstaedt, President and Chief Executive Officer.
“Our industry-leading results are indicative of the durability of our unique approach to market selection, our decentralized operating model and the resulting projectability from our commitment to excellence,” continued Mr. Mittelstaedt. “To that end, we also saw continued improvement in employee retention for the tenth consecutive quarter along with record safety performance during the period.”
Mr. Mittelstaedt added, “We achieved all of these accomplishments while also continuing acquisition activity at outsized levels, with annualized revenues closed to date already over $125 million, including a state-of-the-art recycling facility in New Jersey to complement our growth in the Northeast. The strength of our financial position and free cash flow generation provides optionality for continued above-average acquisition activity during 2025, along with increasing return of capital to shareholders.”
Q1 2025 Results
Revenue in the first quarter totaled $2.228 billion, up from $2.073 billion in the year ago period. Operating income was $390.2 million, which included $20.2 million primarily in transaction-related expenses, impairments and other operating items and fair value accounting changes associated with certain equity awards. This compares to operating income of $366.8 million in the first quarter of 2024, which included $11.5 million primarily related to transaction-related expenses and fair value accounting changes associated with certain equity awards. Net income in the first quarter was $241.5 million, or $0.93 per share on a diluted basis of 258.9 million shares. In the year ago period, the Company reported net income of $230.1 million, or $0.89 per share on a diluted basis of 258.5 million shares.
Adjusted net income^(b)^ in the first quarter was $293.1 million, or $1.13 per diluted share, up from $268.7 million, or $1.04 per diluted share, in the prior year period. Adjusted EBITDA^(b)^ in the first quarter was $712.2 million, as compared to $650.7 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.
Q1 2025 Earnings Conference Call
Waste Connections will be hosting a conference call related to first quarter earnings on April 24^th^ 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 May 1, 2025, by calling 877-344-7529 (within North America) or 412-317-0088 (international) and entering Passcode #6755173.
Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on April 24^th^, providing the Company's second quarter 2025 outlook for revenue 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 46 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 2025 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
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^^^(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. 2
Waste Connections, Inc.
CONDENSED Consolidated Statements of NET INCOME
THRee months ended MARCH 31, 2024 and 2025
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)
| | | |||||
|---|---|---|---|---|---|---|
| | | Three months ended<br>March 31, | ||||
| | 2024 | 2025 | ||||
| | | | | | ||
| Revenues | | $ | 2,072,653 | | $ | 2,228,176 |
| Operating expenses: | | | | | | |
| Cost of operations | | | 1,221,783 | | | 1,291,443 |
| Selling, general and administrative | | | 220,735 | | | 250,134 |
| Depreciation | | | 222,691 | | | 242,307 |
| Amortization of intangibles | | | 40,290 | | | 47,642 |
| Impairments and other operating items | | | 354 | | | 6,440 |
| Operating income | | | 366,800 | | | 390,210 |
| | | | | | | |
| Interest expense | | | (78,488) | | | (80,875) |
| Interest income | | | 2,051 | | | 1,770 |
| Other income (expense), net | | | (1,823) | | | 1,872 |
| Income before income tax provision | | | 288,540 | | | 312,977 |
| | | | | | | |
| Income tax provision | | | (59,413) | | | (71,467) |
| Net income | | | 229,127 | | | 241,510 |
| Plus: Net loss attributable to noncontrolling interests | | | 927 | | | - |
| Net income attributable to Waste Connections | | $ | 230,054 | | $ | 241,510 |
| | | | | | | |
| Earnings per common share attributable to Waste Connections’ common shareholders: | | | | | | |
| Basic | | $ | 0.89 | | $ | 0.94 |
| | | | | | | |
| Diluted | | $ | 0.89 | | $ | 0.93 |
| | | | | | | |
| Shares used in the per share calculations: | | | | | | |
| Basic | | | 257,801,116 | | | 258,193,975 |
| Diluted | | | 258,482,473 | | | 258,904,806 |
| | | | | | | |
| | | | | | | |
| Cash dividends per common share | | $ | 0.285 | | $ | 0.315 |
3
Waste Connections, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | **** | December 31,<br>2024 | March 31,<br>2025 | ||||
| ASSETS | | | | | | | |
| Current assets: | | | | | | | |
| Cash and equivalents | | $ | 62,366 | | $ | 111,226 | |
| Accounts receivable, net of allowance for credit losses of $25,730 and $25,280 at December 31, 2024 and March 31, 2025, respectively | | | 935,027 | | | 952,010 | |
| Prepaid expenses and other current assets | | | 229,519 | | | 217,802 | |
| Total current assets | | | 1,226,912<br><br> | | | 1,281,038<br><br> | |
| | | | | | | | |
| Restricted cash | | | 135,807 | | | 138,220 | |
| Restricted investments | | | 78,126 | | | 74,160 | |
| Property and equipment, net | | | 8,035,929 | | | 8,222,980 | |
| Operating lease right-of-use assets | | | 308,198 | | | 311,563 | |
| Goodwill | | | 7,950,406 | | | 8,055,979 | |
| Intangible assets, net | | | 1,991,619 | | | 2,067,264 | |
| Other assets, net | | | 90,812 | | | 103,293 | |
| Total assets | | $ | 19,817,809 | | $ | 20,254,497 | |
| <br><br>LIABILITIES AND EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 637,371 | | $ | 625,582 | |
| Book overdraft | | | 14,628 | | | 14,518 | |
| Deferred revenue | | | 382,501 | | | 404,382 | |
| Accrued liabilities | | | 736,824 | | | 690,222 | |
| Current portion of operating lease liabilities | | | 40,490 | | | 39,857 | |
| Current portion of contingent consideration | | | 59,169 | | | 47,261 | |
| Current portion of long-term debt and notes payable | | | 7,851 | | | 7,657 | |
| Total current liabilities | | | 1,878,834 | | | 1,829,479 | |
| | | | | | | | |
| Long-term portion of debt and notes payable | | | 8,072,928 | | | 8,388,364 | |
| Long-term portion of operating lease liabilities | | | 272,107 | | | 266,675 | |
| Long-term portion of contingent consideration | | | 27,993 | | | 28,001 | |
| Deferred income taxes | | | 958,340 | | | 1,011,613 | |
| Other long-term liabilities | | | 747,253 | | | 716,185 | |
| Total liabilities | | | 11,957,455 | | | 12,240,317 | |
| Commitments and contingencies | | | | | | | |
| Equity: | | | | | | | |
| Common shares: 258,067,487 shares issued and 258,019,389 shares outstanding at December 31, 2024; 258,364,361 shares issued and 258,318,013 shares outstanding at March 31, 2025 | | | 3,283,161 | | | 3,286,078 | |
| Additional paid-in capital | | | 325,928 | | | 318,350 | |
| Accumulated other comprehensive loss | | | (205,740) | | | (207,286) | |
| Treasury shares: 48,098 and 46,348 shares at December 31, 2024 and March 31, 2025, respectively | | | - | | | - | |
| Retained earnings | | | 4,457,005 | | | 4,617,038 | |
| Total Waste Connections’ equity | | | 7,860,354 | | | 8,014,180 | |
| Noncontrolling interest in subsidiaries | | | - | | | - | |
| Total equity | | | 7,860,354 | | | 8,014,180 | |
| Total liabilities and equity | | $ | 19,817,809 | | $ | 20,254,497 | |
4
Waste Connections, Inc.
Condensed Consolidated Statements of Cash Flows
Three months ended march 31, 2024 and 2025
(Unaudited)
(in thousands of U.S. dollars)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | Three months ended March 31, | | ||||
| | **** | 2024 | 2025 | ||||
| Cash flows from operating activities: | | | | | | | |
| Net income | | $ | 229,127 | | $ | 241,510 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Loss from disposal of assets, impairments and other | | | 1,649 | | | 7,778 | |
| Depreciation | | | 222,691 | | | 242,307 | |
| Amortization of intangibles | | | 40,290 | | | 47,642 | |
| Deferred income taxes, net of acquisitions | | | 30,395 | | | 36,165 | |
| Current period provision for expected credit losses | | | 3,730 | | | 2,470 | |
| Amortization of debt issuance costs | | | 4,055 | | | 2,034 | |
| Share-based compensation | | | 21,952 | | | 23,438 | |
| Interest accretion | | | 11,279 | | | 12,737 | |
| Adjustments to contingent consideration | | | - | | | (1,500) | |
| Other | | | 902 | | | (1,013) | |
| Net change in operating assets and liabilities, net of acquisitions | | | (75,761) | | | (72,029) | |
| Net cash provided by operating activities | | | 490,309 | | | 541,539 | |
| | | | | | |||
| Cash flows from investing activities: | | | | | | ||
| Payments for acquisitions, net of cash acquired | | | (1,156,422) | | | (380,417) | |
| Capital expenditures for property and equipment | | | (169,951) | | | (212,455) | |
| Proceeds from disposal of assets | | | 1,085 | | | 969 | |
| Other | | | (9,291) | | | (11,308) | |
| Net cash used in investing activities | | | (1,334,579) | | | (603,211) | |
| | | | | | |||
| Cash flows from financing activities: | | | | | | | |
| Proceeds from long-term debt | | | 2,353,022 | | | 782,904 | |
| Principal payments on notes payable and long-term debt | | | (1,350,932) | | | (541,737) | |
| Payment of contingent consideration recorded at acquisition date | | | (11,295) | | | (20,137) | |
| Change in book overdraft | | | (271) | | | (110) | |
| Payments for cash dividends | | | (73,573) | | | (81,477) | |
| Tax withholdings related to net share settlements of equity-based compensation | | | (30,850) | | | (28,981) | |
| Debt issuance costs | | | (10,093) | | | - | |
| Proceeds from issuance of shares under employee share purchase plan | | | 2,183 | | | 2,593 | |
| Proceeds from sale of common shares held in trust | | | 286 | | | 324 | |
| Net cash provided by financing activities | | | 878,477 | | | 113,379 | |
| | | | | | | | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | (577) | | | (434) | |
| | | | | | |||
| Net increase in cash, cash equivalents and restricted cash | | | 33,630 | | | 51,273 | |
| Cash, cash equivalents and restricted cash at beginning of period | | | 184,038 | | | 198,173 | |
| Cash, cash equivalents and restricted cash at end of period | | $ | 217,668 | | $ | 249,446 | |
| | | | | | |||
| | | | | | | | |
5
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 March 31, 2025:
| | | ||
|---|---|---|---|
| | Three months ended<br><br>March 31, 2025 | ||
| Core Price | | | 6.9% |
| Surcharges | | | (0.2%) |
| Volume^(a)^ | | | (2.8%) |
| Recycling | | | (0.1%) |
| Foreign Exchange Impact | (0.7%) | ||
| Closed Operation | | | (0.9%) |
| Total | | 2.2% |
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^^^(a)^ Volumes adjusted for one less workday during the period.
Revenue Breakdown: The following table reflects a breakdown of our revenue for the three-month periods ended March 31, 2024 and 2025:
| | | | | | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three months ended March 31, 2024 | | |||||||||
| | Revenue | Inter-company<br>Elimination | Reported<br>Revenue | % | ||||||||
| Solid Waste Collection | | $ | 1,515,060 | | $ | (4,003) | | $ | 1,511,057 | | 72.9 | % |
| Solid Waste Disposal and Transfer | | | 655,360 | | | (282,978) | | | 372,382 | | 17.9 | % |
| Solid Waste Recycling | | | 49,025 | | | (1,839) | | | 47,186 | | 2.3 | % |
| E&P Waste Treatment, Recovery and Disposal | | | 97,408 | | | (4,543) | | | 92,865 | | 4.5 | % |
| Intermodal and Other | | | 49,541 | | | (378) | | | 49,163 | | 2.4 | % |
| Total | | $ | 2,366,394 | | $ | (293,741) | | $ | 2,072,653 | | 100.0 | % |
| | | | | | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three months ended March 31, 2025 | | |||||||||
| | Revenue | Inter-company<br>Elimination | Reported<br>Revenue | % | ||||||||
| Solid Waste Collection | | $ | 1,621,077 | | $ | (4,536) | | $ | 1,616,541 | | 72.5 | % |
| Solid Waste Disposal and Transfer | | | 658,023 | | | (296,282) | | | 361,741 | | 16.2 | % |
| Solid Waste Recycling | | | 61,341 | | | (2,084) | | | 59,257 | | 2.7 | % |
| E&P Waste Treatment, Recovery and Disposal | | | 150,899 | | | (6,374) | | | 144,525 | | 6.5 | % |
| Intermodal and Other | | | 46,549 | | | (437) | | | 46,112 | | 2.1 | % |
| Total | | $ | 2,537,889 | | $ | (309,713) | | $ | 2,228,176 | | 100.0 | % |
Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three- month periods ended March 31, 2024 and 2025:
| | | |||||
|---|---|---|---|---|---|---|
| | | Three months ended<br>March 31, | ||||
| | 2024 | 2025 | ||||
| Acquisitions, net | | $ | 77,988 | | $ | 129,298 |
6
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-month periods ended March 31, 2024 and 2025:
| | | |||||
|---|---|---|---|---|---|---|
| | | Three months ended<br>March 31, | ||||
| | 2024 | 2025 | ||||
| Cash Interest Paid | | $ | 66,384 | | $ | 84,154 |
| Cash Taxes Paid | | | 28,406 | | | 22,176 |
Debt to Book Capitalization at March 31, 2025: 51%
Internalization for the three months ended March 31, 2025: 59%
Days Sales Outstanding for the three months ended March 31, 2025: 38 (22 net of deferred revenue)
Share Information for the three months ended March 31, 2025:
| Basic shares outstanding | 258,193,975 | |
|---|---|---|
| Dilutive effect of equity-based awards | | 710,831 |
| Diluted shares outstanding | | 258,904,806 |
7
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. 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<br>March 31, | ||||
| | 2024 | 2025 | ||||
| Net income attributable to Waste Connections | | $ | 230,054 | | $ | 241,510 |
| Less: Net loss attributable to noncontrolling interests | | | (927) | | | - |
| Plus: Income tax provision | | | 59,413 | | | 71,467 |
| Plus: Interest expense | | | 78,488 | | | 80,875 |
| Less: Interest income | | | (2,051) | | | (1,770) |
| Plus: Depreciation and amortization | | | 262,981 | | | 289,949 |
| Plus: Closure and post-closure accretion | | | 9,405 | | | 11,874 |
| Plus: Impairments and other operating items | | | 354 | | | 6,440 |
| Plus/(Less): Other expense (income), net | | | 1,823 | | | (1,872) |
| Adjustments: | | | | | | |
| Plus: Transaction-related expenses^(a)^ | | | 9,847 | | | 11,970 |
| Plus: Fair value changes to equity awards^(b)^ | | | 1,286 | | | 1,770 |
| Adjusted EBITDA | | $ | 650,673 | | $ | 712,213 |
| | | | | | | |
| As % of revenues | | | 31.4% | | | 32.0% |
____________________________
| (a) | Reflects the addback of acquisition-related transaction costs. |
|---|---|
| (b) | Reflects fair value accounting changes associated with certain equity awards. |
| --- | --- |
8
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. 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.
| | | |||||
|---|---|---|---|---|---|---|
| | | Three months ended<br>March 31, | ||||
| | **** | 2024 | 2025 | |||
| Net cash provided by operating activities | | $ | 490,309 | | $ | 541,539 |
| Less: Change in book overdraft | | | (271) | | | (110) |
| Plus: Proceeds from disposal of assets | | | 1,085 | | | 969 |
| Less: Capital expenditures for property and equipment | | | (169,951) | | | (212,455) |
| Adjustments: | | | | | ||
| Transaction-related expenses^(a)^ | | | 4,976 | | | 2,392 |
| Pre-existing Progressive Waste share-based grants^(b)^ | | | 14 | | | 16 |
| Executive separation costs^(c)^ | | | - | | | 449 |
| Tax effect^(d)^ | | | (1,369) | | | (725) |
| Adjusted free cash flow | | $ | 324,793 | | $ | 332,075 |
| | | | ||||
| As % of revenues | | | 15.7% | | | 14.9% |
___________________________
| (a) | Reflects the addback of acquisition-related transaction costs. |
|---|---|
| (b) | Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period. |
| --- | --- |
| (c) | Reflects the cash component of severance expense associated with an executive departure from 2023. |
| --- | --- |
| (d) | The aggregate tax effect of footnotes (a) through (c) is calculated based on the applied tax rates for the respective periods. |
| --- | --- |
9
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 valuation measures 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<br>March 31, | ||||
| | 2024 | 2025 | ||||
| Reported net income attributable to Waste Connections | | $ | 230,054 | | $ | 241,510 |
| Adjustments: | | | | | | |
| Amortization of intangibles^(a)^ | | | 40,290 | | | 47,642 |
| Impairments and other operating items^(b)^ | | | 354 | | | 6,440 |
| Transaction-related expenses^(c)^ | | | 9,847 | | | 11,970 |
| Fair value changes to equity awards^(d)^ | | | 1,286 | | | 1,770 |
| Tax effect^(e)^ | | | (13,162) | | | (16,212) |
| Adjusted net income attributable to Waste Connections | | $ | 268,669 | | $ | 293,120 |
| Diluted earnings per common share attributable to Waste Connections’ common shareholders: | | | | | | |
| Reported net income | | $ | 0.89 | | $ | 0.93 |
| Adjusted net income | | $ | 1.04 | | $ | 1.13 |
____________________________
| (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. |
| --- | --- |
10