Waste Connections Reports Third Quarter 2018 Results
- Revenue of $1.281 billion, exceeding outlook
- Reports 4.5% solid waste price growth
- Net income attributable to Waste Connections of $150.8 million, or $0.57 per share
- Adjusted net income attributable to Waste Connections* of $181.9 million, or $0.69 per share, up 15.0%
- Adjusted EBITDA* of $416.8 million, or 32.5% of revenue
- YTD net cash provided by operating activities of $1.038 billion
- YTD adjusted free cash flow* of $675.7 million, or 18.5% of revenue
- Signs acquisition with approximately $175 million in annualized revenues
- Increases regular quarterly cash dividend by 14.3%
TORONTO, Oct. 29, 2018 /PRNewswire/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the third quarter of 2018.
"Solid waste pricing up 120 basis points year over year plus 140 basis points sequential volume improvement drove better than expected results in the quarter. This price-led solid waste growth, along with continued strength in E&P waste activity, enabled us to overcome the toughest quarterly comparison for recycled commodity values in the year and certain continuing cost pressures. More importantly, adjusted free cash flow* remains strong at over $675 million year-to-date, or 18.5% of revenue, and 57.8% of adjusted EBITDA*," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. "Our third quarter performance puts us firmly on track to meet or exceed the increased expectations for the full year we communicated in July."
Mr. Mittelstaedt added, "The pace of acquisition activity remains elevated, as we recently signed our largest deal year to date, a multi-market collection company with annualized revenue of approximately $175 million, with operations in three states, including two new markets. This acquisition, which is expected to close by year end, along with deals already closed, is expected to bring total acquired annualized revenues to approximately $360 million in 2018. Rollover contribution from these acquisitions plus price-led organic growth already position us for between 8% and 10% revenue growth and continued margin expansion in 2019, with any additional transactions providing further growth. Moreover, we announced another double-digit percentage increase in the quarterly cash dividend, once again demonstrating that we remain well-positioned to increase our return of capital to shareholders while continuing to fund above average acquisition activity."
Q3 2018 Results
Revenue in the third quarter totaled $1.281 billion, up from $1.206 billion in the year ago period. Operating income was $232.9 million, which included $6.9 million in fair value accounting changes associated with certain equity awards, and $0.7 million in integration and acquisition-related costs, partially offset by a $2.0 million gain in impairments and other items primarily related to the divestiture of certain assets acquired in the Progressive Waste acquisition. This compares to operating income of $218.8 million in the third quarter of 2017, which included $7.2 million in charges primarily related to fair value accounting changes for certain equity awards, costs for transactions completed in the period, and certain costs associated with the Progressive Waste acquisition.
* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule
Net income attributable to Waste Connections in the third quarter was $150.8 million, or $0.57 per share on a diluted basis of 264.4 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $123.2 million, or $0.47 per share on a diluted basis of 264.3 million shares.
Adjusted net income attributable to Waste Connections* in the third quarter was $181.9 million, or $0.69 per diluted share, versus $158.1 million, or $0.60 per diluted share, in the prior year period. Adjusted EBITDA* in the third quarter was $416.8 million, as compared to adjusted EBITDA* of $393.4 million in the prior year period. Adjusted net income attributable to Waste Connections, adjusted net income attributable to Waste Connections per diluted share, adjusted EBITDA, and adjusted free cash flow, all non-GAAP measures, primarily exclude the impact from the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), fair value accounting changes to certain equity awards, and acquisition-related items, as shown in the detailed reconciliation in the attached schedules.
Nine Months Year to Date Results
For the nine months ended September 30, 2018, revenue was $3.661 billion, as compared to revenue of $3.473 billion in the year ago period. Operating income, which included $23.9 million of expenses primarily related to fair value accounting changes to certain equity awards, impairments and other items related to the termination of certain contracts and other acquisition-related costs, was $632.3 million, compared to $452.1 million for the same period in 2017, which included $167.0 million of expenses primarily related to both goodwill impairment against the Company's E&P segment resulting from the early adoption of FASB's recent accounting pronouncement simplifying the test for goodwill impairment and fair value accounting changes to certain equity awards.
Net income attributable to Waste Connections for the nine months ended September 30, 2018, was $414.4 million, or $1.57 per share on a diluted basis of 264.4 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $261.7 million, or $0.99 per share on a diluted basis of 264.1 million shares.
Adjusted net income attributable to Waste Connections* for the nine months ended September 30, 2018, was $501.1 million, or $1.90 per diluted share, compared to $433.6 million, or $1.64 per diluted share, in the year ago period. Adjusted EBITDA* for the nine months ended September 30, 2018, was $1.169 billion, as compared to $1.100 billion in the prior year period.
Q3 2018 Earnings Conference Call
Waste Connections will be hosting a conference call related to third quarter earnings on October 30(th) at 8:30 A.M. Eastern Time. To access the call, listeners should dial 888-223-4561 (within North America) or 312-281-1202 (international) approximately 10 minutes prior to the scheduled start time and ask the operator for the Waste Connections conference call (a passcode is not required). A replay of the conference call will be available until November 6, 2018 by calling 800-633-8284 (within North America) or 402-977-9140 (international) and entering Passcode # 21896131. The call will be broadcast live over the Internet through a link on the Company's website at www.wasteconnections.com. A playback of the call will be available on the Company's website.
Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on October 30(th), providing the Company's fourth quarter 2018 outlook for revenue, core price plus volume growth for solid waste and adjusted EBITDA*.
* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule
About Waste Connections
Waste Connections is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets in the United States and Canada. Through its R360 Environmental Solutions subsidiary, Waste Connections is also a leading provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the United States, including the Permian, Bakken and Eagle Ford Basins. Waste Connections serves more than six million residential, commercial, industrial, and exploration and production customers in 40 states in the U.S., and six provinces in Canada. The Company also provides intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.
For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections website or through contacting us directly at (905) 532-7510. Investors can also obtain these materials and other documents filed with the U.S. Securities and Exchange Commission (SEC) and the Canadian securities regulators free of charge at the SEC's website, www.sec.gov, and at the System for Electronic Document Analysis and Retrieval (SEDAR) maintained by the Canadian Securities Administrators at www.sedar.com.
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), including "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections' current beliefs and expectations regarding future events and operating performance. These forward-looking statements are often identified by the words "may," "might," "believes," "thinks," "expects," "estimate," "continue," "intends" or other words of similar meaning. All of the forward-looking statements included in this press release are made pursuant to the safe harbor provisions of the PSLRA and applicable securities laws in Canada. Forward-looking statements involve risks and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements about expected 2018 and 2019 financial results, outlook and related assumptions, potential acquisition activity and the amount of capital returned to shareholders. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, risk factors detailed from time to time in the Company's filings with the SEC and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. Waste Connections undertakes no obligation to update the forward-looking statements set forth in this press release, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.
- financial tables attached -
CONTACT:
Mary Anne Whitney / (832) 442-2253
maryannew@wasteconnections.com
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2018
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)
Three months ended
Nine months ended
September 30,
September 30,
---
2017 2018 2017 2018
---
Revenues $1,206,478 $1,281,110 $3,473,313 $3,661,209
Operating expenses:
Cost of operations 695,122 736,122 2,024,402 2,120,947
Selling, general and
administrative 128,200 139,014 383,600 398,582
Depreciation 136,941 148,232 395,008 423,866
Amortization of intangibles 26,613 26,871 76,886 79,444
Impairments and other
operating items 832 (1,998) 141,333 6,106
Operating income 218,770 232,869 452,084 632,264
Interest expense (32,471) (32,078) (92,763) (96,874)
Interest income 1,656 1,467 3,131 3,677
Other income, net 1,709 732 3,561 2,376
Foreign currency
transaction loss (1,864) (132) (3,502) (323)
Income before income tax
provision 187,800 202,858 362,511 541,120
Income tax provision (64,390) (52,092) (100,220) (126,509)
---
Net income 123,410 150,766 262,291 414,611
Plus (Less): Net loss (income)
attributable to noncontrolling interests
(183) 77 (559) (218)
Net income attributable to
Waste Connections $123,227 $150,843 $261,732 $414,393
Earnings per common share attributable to
Waste Connections' common shareholders:
Basic $0.47 $0.57 $0.99 $1.57
Diluted $0.47 $0.57 $0.99 $1.57
Shares used in the per share calculations:
Basic 263,443,064 263,628,838 263,298,839 263,657,274
===
Diluted 264,299,472 264,394,757 264,109,383 264,376,320
===
Cash dividends per common
share $0.12 $0.14 $0.36 $0.42
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S. dollars, except share and per share amounts)
December 31, September 30,
2017 2018
ASSETS
Current assets:
Cash and equivalents $
433,815 $
244,389
Accounts receivable, net of
allowance for doubtful accounts
of $17,154 and $15,305 at
December 31, 2017 and September
30, 2018, respectively 554,458 625,048
Current assets held for sale 1,596 794
Prepaid expenses and other
current assets 186,999 152,827
Total current assets 1,176,868 1,023,058
Restricted cash 122,652 83,399
Restricted investments 44,360 44,217
Property and equipment, net 4,820,934 5,069,767
Goodwill 4,681,774 4,813,296
Intangible assets, net 1,087,436 1,069,064
Long-term assets held for sale 12,625 745
Other assets, net 68,032 88,520
$
12,014,681 $
12,192,066
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $
330,523 $
331,535
Book overdraft 19,223 19,087
Accrued liabilities 278,039 287,369
Deferred revenue 145,197 162,965
Current portion of contingent
consideration 15,803 11,612
Current liabilities held for sale 2,155 928
Current portion of long-term
debt and notes payable 11,659 1,753
Total current liabilities 802,599 815,249
Long-term debt and notes payable 3,899,572 3,747,209
Long-term portion of contingent
consideration 31,482 43,412
Other long-term liabilities 316,191 339,817
Deferred income taxes 690,767 741,300
Total liabilities 5,740,611 5,686,987
Commitments and contingencies
Equity:
Common shares: 263,660,803 shares
issued and 263,494,670 shares
outstanding at December 31,
2017; 263,506,592 shares issued
and 263,372,910 shares
outstanding at September 30,
2018 4,187,568 4,147,909
Additional paid-in capital 115,743 124,317
Accumulated other comprehensive
income 108,413 53,203
Treasury shares: 166,133 and
133,682 shares at December 31,
2017 and September 30, 2018,
respectively
Retained earnings 1,856,946 2,174,135
Total Waste Connections' equity 6,268,670 6,499,564
Noncontrolling interest in
subsidiaries 5,400 5,515
Total equity 6,274,070 6,505,079
$
12,014,681 $
12,192,066
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2018
(Unaudited)
(in thousands of U.S. dollars)
Nine months ended September 30,
2017 2018
Cash flows from operating
activities:
Net income $
262,291 $
414,611
Adjustments to reconcile net income
to net cash provided by operating
activities:
Loss on disposal of assets and
impairments 122,098 6,852
Depreciation 395,008 423,866
Amortization of intangibles 76,886 79,444
Foreign currency transaction loss 3,502 323
Deferred income taxes, net of
acquisitions (10,971) 45,765
Amortization of debt issuance costs 3,221 3,087
Share-based compensation 32,407 35,434
Interest income on restricted
investments (387) (143)
Interest accretion 10,406 11,135
Adjustments to contingent
consideration 17,754 349
Payment of contingent consideration
recorded in earnings (11)
Net change in operating assets and
liabilities, net of acquisitions (23,840) 17,080
Net cash provided by operating
activities 888,375 1,037,792
Cash flows from investing
activities:
Payments for acquisitions, net of
cash acquired (394,002) (500,064)
Capital expenditures for property
and equipment (317,385) (373,512)
Proceeds from disposal of assets 25,826 3,698
Change in restricted investments,
net of interest income 1,920
Other (3,465) (568)
Net cash used in investing
activities (687,106) (870,446)
Cash flows from financing
activities:
Proceeds from long-term debt 896,947 165,737
Principal payments on notes payable
and long-term debt (666,724) (387,700)
Payment of contingent consideration
recorded at acquisition date (5,840) (5,459)
Change in book overdraft 13,814 (243)
Proceeds from option and warrant
exercises 1,946
Payments for repurchase of common
shares (42,040)
Payments for cash dividends (95,201) (110,447)
Tax withholdings related to net
share settlements of equity-based
compensation (13,754) (14,976)
Debt issuance costs (3,638) (2,839)
Proceeds from sale of common shares
held in trust 8,704 2,381
Other (1,095) (103)
Net cash provided by (used in)
financing activities 135,159 (395,689)
Effect of exchange rate changes on
cash, cash equivalents and
restricted cash 976 (528)
Net increase (decrease) in cash,
cash equivalents and restricted
cash 337,404 (228,871)
Cash, cash equivalents and
restricted cash at beginning of
period 169,112 556,467
Plus (Less): change in cash held
for sale (27) 192
Cash, cash equivalents and
restricted cash at end of period $
506,489 $
327,788
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 September 30, 2018:
U.S.
Canada
Total
Core Price 3.9% 4.6% 4.0%
Surcharges 0.4% 1.2% 0.5%
Volume 0.4% (3.0%) (0.1%)
Recycling (1.4%) (4.0%) (1.8%)
Foreign Exchange Impact (4.3%) (0.7%)
Total 3.3% (5.5%) 1.9%
Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended September 30, 2017 and 2018:
Three Months Ended September 30, 2017
Revenue Inter-company Reported %
Elimination Revenue
Solid Waste
Collection $
815,344 $
(2,484) $
812,860 67.4%
Solid Waste
Disposal and
Transfer 416,764 (157,280) 259,484 21.5%
Solid Waste
Recycling 43,864 (2,295) 41,569 3.5%
E&P Waste
Treatment,
Recovery and
Disposal 57,797 (3,082) 54,715 4.5%
Intermodal
and Other 38,221 (371) 37,850 3.1%
Total $
1,371,990 $
(165,512) $
1,206,478 100.0%
Three Months Ended September 30, 2018
Inter-company
Reported
%
Elimination
Revenue
Revenue
Solid Waste
Collection $
871,700 $
(2,419) $
869,281 67.9%
Solid Waste
Disposal and
Transfer 473,906 (182,617) 291,289 22.7%
Solid Waste
Recycling 23,370 (989) 22,381 1.7%
E&P Waste
Treatment,
Recovery and
Disposal 68,049 (3,256) 64,793 5.1%
Intermodal
and Other 34,261 (895) 33,366 2.6%
Total $
1,471,286 $
(190,176) $
1,281,110 100.0%
Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three month periods ended September 30, 2017 and 2018:
Three months ended
September 30,
2017 2018
Acquisitions, net $
40,253 $
48,156
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 nine month periods ended September 30, 2017 and 2018:
Three months ended Nine months ended
September 30, September 30,
2017 2018 2017 2018
Cash
Interest
Paid $
21,897 $
22,556 $
76,500 $
85,042
Cash
Taxes
Paid 44,945 10,509 81,431 33,362
Debt to Book Capitalization as of September 30, 2018: 37%
Internalization for the three months ended September 30, 2018: 56%
Days Sales Outstanding for the three months ended September 30, 2018: 45 (33 net of deferred revenue)
Share Information for the three months ended September 30, 2018:
Basic shares outstanding 263,628,838
Dilutive effect of equity-
based awards 765,919
Diluted shares outstanding 264,394,757
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 or minus income tax provision (benefit), 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 foreign currency transaction loss, less foreign currency transaction gain. 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
Nine months ended
September 30, September 30,
2017 2018 2017 2018
Net income attributable
to Waste Connections $
123,227 $
150,843 $
261,732 $
414,393
Plus (Less): Net income
(loss) attributable to
noncontrolling
interests 183 (77) 559 218
Plus: Income tax
provision 64,390 52,092 100,220 126,509
Plus: Interest expense 32,471 32,078 92,763 96,874
Less: Interest income (1,656) (1,467) (3,131) (3,677)
Plus: Depreciation and
amortization 163,554 175,103 471,894 503,310
Plus: Closure and post-
closure accretion 2,971 3,253 8,805 9,749
Plus (Less):
Impairments and other
operating items 832 (1,998) 141,333 6,106
Less: Other income, net (1,709) (732) (3,561) (2,376)
Plus: Foreign currency
transaction loss 1,864 132 3,502 323
Adjustments:
Plus: Transaction-
related expenses (a) 1,958 323 4,418 4,907
Plus: Fair value
changes to equity
awards (b) 2,369 6,880 12,947 10,101
Plus: Integration-
related and other
expenses (c) 2,922 379 8,344 2,795
Adjusted EBITDA $
393,376 $
416,809 $
1,099,825 $
1,169,232
As % of revenues 32.6% 32.5% 31.7% 31.9%
(a) Reflects the
addback of
acquisition-
related
transaction
costs.
(b) Reflects
fair value
accounting
changes
associated
with
certain
equity
awards.
(c) Reflects the
addback of
integration-
related
items,
including
rebranding
costs,
associated
with the
Progressive
Waste
acquisition.
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections' operations. Waste Connections defines adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment and distributions to noncontrolling interests. Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of its business. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently.
Nine months ended
September 30,
2017 2018
Net cash provided
by operating
activities $
888,375 $
1,037,792
Plus/(Less):
Change in book
overdraft 13,814 (243)
Plus: Proceeds
from disposal of
assets 25,826 3,698
Less: Capital
expenditures for
property and
equipment (317,385) (373,512)
Less:
Distributions to
noncontrolling
interests (103)
Adjustments:
Payment of
contingent
consideration
recorded in
earnings (a) 11
Cash received for
divestitures (b) (21,100) (1,250)
Transaction-
related expenses
(c) 4,418 4,907
Integration-
related and
other expenses
(d) 7,968 2,794
Pre-existing
Progressive
Waste share-
based grants (e) 11,740 5,219
Synergy bonus (f) 11,798
Tax effect (g) (11,426) (3,609)
Adjusted free
cash flow $
614,028 $
675,704
As % of revenues 17.7% 18.5%
(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
Progressive
Waste
operations.
(c) Reflects the
addback of
acquisition-
related
transaction
costs.
(d) Reflects the
addback of
integration-
related
items,
including
rebranding
costs,
associated
with the
Progressive
Waste
acquisition.
(e) Reflects the
cash
settlement
of pre-
existing
Progressive
Waste share-
based awards
during the
period.
(f) Reflects the
addback of
cash bonuses
paid
pursuant to
the
Company's
Synergy
Bonus
Program in
conjunction
with the
Progressive
Waste
acquisition.
(g) The aggregate
tax effect
of footnotes
(a) through
(f) 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 Net Income attributable to Waste Connections to 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
Nine months ended
September 30, September 30,
2017 2018 2017 2018
Reported net income
attributable to Waste
Connections $
123,227 $
150,843 $
261,732 $
414,393
Adjustments:
Amortization of intangibles
(a) 26,613 26,871 76,886 79,444
Impairments and other
operating items (b) 832 (1,998) 141,333 6,106
Transaction-related expenses
(c) 1,958 323 4,418 4,907
Fair value changes to equity
awards (d) 2,369 6,880 12,947 10,101
Integration-related and other
expenses (e) 2,922 379 8,344 2,795
Tax effect (f) (3,575) (8,006) (75,828) (25,783)
Tax items (g) 3,787 6,578 3,787 9,093
Adjusted net income
attributable to Waste
Connections $
158,133 $
181,870 $
433,619 $
501,056
Diluted earnings per common
share attributable to Waste
Connections' common
shareholders:
Reported net income $
0.47 $
0.57 $
0.99 $
1.57
Adjusted net income $
0.60 $
0.69 $
1.64 $
1.90
(a) Reflects the
elimination
of the non-
cash
amortization
of
acquisition-
related
intangible
assets.
(b) Reflects the
addback of
impairments
and other
operating
items.
(c) Reflects the
addback of
acquisition-
related
transaction
costs.
(d) Reflects
fair value
accounting
changes
associated
with
certain
equity
awards.
(e) Reflects the
addback of
integration-
related
items,
including
rebranding
costs,
associated
with the
Progressive
Waste
acquisition.
(f) The
aggregate
tax effect
of the
adjustments
in
footnotes
(a) through
(e) is
calculated
based on
the applied
tax rates
for the
respective
periods.
(g) In 2018,
primarily
reflects
refinements
to the
estimates,
as provided
by Staff
Accounting
Bulletin
No. 118, of
the impact
of a
portion of
the
Company's
U.S.
earnings no
longer
deemed to
be
permanently
reinvested
in
conjunction
with the
Tax Act; in
2017,
reflects
the
elimination
of an
increase to
the income
tax
provision
associated
with an
increase in
the
Company's
deferred
tax
liabilities
resulting
from the
enactment
of the
Illinois
State
Budget
Public Act
100-0022 on
July 6,
2017.
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SOURCE Waste Connections, Inc.
