– Net income attributable to Waste Connections of $123.2 million, or $0.47 per share

– Adjusted net income attributable to Waste Connections* of $158.1 million, or $0.60 per share, up 25%

– Adjusted EBITDA* of $393.4 million, or 32.6% of revenue, up 100 basis points

– YTD net cash provided by operating activities of $888.4 million

– YTD adjusted free cash flow* of $614.0 million, or 17.7% of revenue

– Increases regular quarterly cash dividend by 16.7%

TORONTO, Oct. 25, 2017 () — Waste Connections, Inc. (TSX/NYSE: WCN) (“Waste Connections” or the “Company”) today announced its results for the third quarter of 2017.  Revenue in the third quarter totaled $1.206 billion, up from $1.085 billion in the year ago period.  Operating income was $218.8 million, which included $7.2 million in charges primarily related to costs for transactions completed in the period and certain costs associated with the Progressive Waste acquisition, including share-based compensation costs associated with share-based awards assumed in that acquisition.  This compares to operating income of $158.7 million in the third quarter of 2016, which included $20.3 million of items primarily related to the Progressive Waste acquisition completed on June 1, 2016.

Net income attributable to Waste Connections in the third quarter was $123.2 million, or $0.47 per share on a diluted basis of 264.3 million shares.  In the year ago period, the Company reported net income attributable to Waste Connections of $88.6 million, or $0.34 per share on a diluted basis of 263.7 million shares.  Shares and per share numbers reflect a three-for-two share split completed in June 2017.

Adjusted net income attributable to Waste Connections* in the third quarter was $158.1 million, or $0.60 per diluted share, versus $126.5 million, or $0.48 per diluted share, in the prior year period.  Adjusted EBITDA* in the third quarter was $393.4 million, as compared to adjusted EBITDA* of $342.3 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 of acquisition-related items, as shown in the detailed reconciliation in the attached schedules. 

“Continued strength across all lines of business enabled us to once again exceed our outlook for the third quarter.  Adjusted EBITDA* as a percent of revenue in the quarter expanded 100 basis points year-over-year, as expected, in spite of the impact from two hurricanes, which is especially noteworthy in light of the dilutive margin acquisitions completed since the year-ago period.  More importantly, adjusted free cash flow remains notably strong at $614.0 million year-to-date, or 17.7% of revenue and 55.8% of adjusted EBITDA*,” said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer.  “We remain on track to meet or exceed the increased expectations for the full year we communicated in July despite the precipitous decline in recycled fiber values that began in September.”

Mr. Mittelstaedt added, “As anticipated last quarter, our strong operating performance, free cash flow growth and balance sheet strength provided for another double-digit percentage increase in the quarterly cash dividend.  We remain well positioned to fund expected above average acquisition activity in the near term while continuing to increase our return of capital to shareholders.”

* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule.

For the nine months ended September 30, 2017, revenue was $3.473 billion, as compared to revenue of $2.327 billion in the year ago period.  Operating income, 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 share-based compensation costs associated with share-based awards assumed in the Progressive Waste acquisition, was $452.1 million, compared to $313.1 million for the same period in 2016, which included $102.3 million of items related to the Progressive Waste acquisition.

Net income attributable to Waste Connections for the nine months ended September 30, 2017, was $261.7 million, or $0.99 per share on a diluted basis of 264.1 million shares.  In the year ago period, the Company reported net income attributable to Waste Connections of $160.9 million, or $0.73 per share on a diluted basis of 220.1 million shares. 

Adjusted net income attributable to Waste Connections* for the nine months ended September 30, 2017, was $433.6 million, or $1.64 per diluted share, compared to $274.9 million, or $1.25 per diluted share, in the year ago period. Adjusted EBITDA* for the nine months ended September 30, 2017, was $1.100 billion, as compared to $745.6 million in the prior year period. 

* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule 

CONFERENCE CALL

Waste Connections will be hosting a conference call related to third quarter earnings on October 26th at 8:30 A.M. Eastern Time.  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.

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 38 states in the U.S., and five 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) and “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,” “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 2017 financial results, 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 filings that have been made by the Company with the U.S. Securities and Exchange Commission 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 –

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2017

(Unaudited)

(in thousands of U.S. dollars, except share and per share amounts)

Three months ended

September 30,

Nine months ended

September 30,

2016

2017

2016

2017

Revenues

$    1,084,922

$    1,206,478

$ 2,327,241

$ 3,473,313

Operating expenses:

Cost of operations

636,310

695,122

1,339,764

2,024,402

Selling, general and administrative

129,576

128,200

349,995

383,600

Depreciation

125,744

136,941

270,988

395,008

Amortization of intangibles

26,944

26,613

48,719

76,886

Impairments and other operating items

7,682

832

4,634

141,333

Operating income

158,666

218,770

313,141

452,084

Interest expense

(27,621)

(32,471)

(65,291)

(92,763)

Interest income

171

1,656

447

3,131

Other income (expense), net

500

1,709

(268)

3,561

Foreign currency transaction gain (loss)

(350)

(1,864)

339

(3,502)

Income before income tax provision

131,366

187,800

248,368

362,511

Income tax provision

(42,485)

(64,390)

(86,750)

(100,220)

Net income

88,881

123,410

161,618

262,291

Less: net income attributable to noncontrolling interests

 

(264)

 

(183)

 

(670)

 

(559)

Net income attributable to Waste Connections

$      88,617

$      123,227

$     160,948

$     261,732

Earnings per common share attributable to  Waste Connections’ common shareholders:

Basic

$          0.34

$          0.47

$           0.73

$          0.99

Diluted

$          0.34

$          0.47

$           0.73

$           0.99

Shares used in the per share calculations:

Basic

263,005,450

263,443,064

219,321,828

263,298,839

Diluted

263,650,138

264,299,472

220,064,670

264,109,383

Cash dividends per common share

$       0.097

$       0.120

$        0.290

$        0.360

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands of U.S. dollars, except share and per share amounts)

December 31,
2016

September 30,
2017

ASSETS

Current assets:

Cash and equivalents

$

154,382

$

495,254

Accounts receivable, net of allowance for doubtful accounts of $13,160 and $16,245 at December 31, 2016 and September 30, 2017, respectively

485,138

588,534

Current assets held for sale

6,339

2,021

Prepaid expenses and other current assets

97,533

107,134

Total current assets

743,392

1,192,943

Property and equipment, net

4,738,055

4,783,928

Goodwill

4,390,261

4,688,348

Intangible assets, net

1,067,158

1,108,961

Restricted assets

63,406

59,192

Long-term assets held for sale

33,989

12,619

Other assets, net

67,664

64,284

$

11,103,925

$

11,910,275

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

251,253

$

276,970

Book overdraft

10,955

24,923

Accrued liabilities

269,402

347,439

Deferred revenue

134,081

142,787

Current portion of contingent consideration

21,453

13,819

Current liabilities held for sale

3,383

2,255

Current portion of long-term debt and notes payable

1,650

11,596

      Total current liabilities

692,177

819,789

Long-term debt and notes payable

3,616,760

3,925,761

Long-term portion of contingent consideration

30,373

31,136

Other long-term liabilities

331,074

310,646

Deferred income taxes

778,664

829,087

      Total liabilities

5,449,048

5,916,419

Equity:

Common shares: 263,140,777 shares issued and 262,803,271 shares outstanding at December  31, 2016; 263,640,287 shares issued and 263,443,234 shares outstanding at September 30, 2017

4,174,808

4,185,458

Additional paid-in capital

102,220

109,627

Accumulated other comprehensive income (loss)

(43,001)

114,779

Treasury shares: 337,397 and 197,053 shares at December 31, 2016 and September 30, 2017, respectively

Retained earnings

1,413,488

1,578,635

      Total Waste Connections’ equity

5,647,515

5,988,499

Noncontrolling interest in subsidiaries

7,362

5,357

      Total equity

5,654,877

5,993,856

$

11,103,925

$

11,910,275

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2017

(Unaudited)

(in thousands of U.S. dollars)

Nine months ended September 30,

2016

2017

Cash flows from operating activities:

Net income

$

161,618

$

262,291

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on disposal of assets and impairments

3,572

122,098

Depreciation

270,988

395,008

Amortization of intangibles

48,719

76,886

Foreign currency transaction (gain) loss

(339)

3,502

Deferred income taxes, net of acquisitions

35,968

(10,971)

Amortization of debt issuance costs

3,877

3,221

Share-based compensation

35,476

32,407

Interest income on restricted assets

(366)

(387)

Interest accretion

7,038

10,406

Excess tax benefit associated with equity-based compensation

(5,151)

Adjustments to contingent consideration

(2,563)

17,754

Payment of contingent consideration recorded in earnings

(413)

Net change in operating assets and liabilities, net of acquisitions

(19,593)

(23,840)

Net cash provided by operating activities

538,831

888,375

Cash flows from investing activities:

Payments for acquisitions, net of cash acquired

(13,703)

(394,002)

Cash acquired in the Progressive Waste acquisition

65,768

Capital expenditures for property and equipment

(204,934)

(317,385)

Proceeds from disposal of assets

3,026

25,826

Change in restricted assets, net of interest income

(188)

5,464

Other

(3,016)

(3,465)

Net cash used in investing activities

(153,047)

(683,562)

Cash flows from financing activities:

Proceeds from long-term debt

3,407,359

896,947

Principal payments on notes payable and long-term debt

(3,612,763)

(666,724)

Payment of contingent consideration recorded at acquisition date

(12,105)

(5,840)

Change in book overdraft

6,050

13,814

Proceeds from option and warrant exercises

1,946

Excess tax benefit associated with equity-based compensation

5,151

Payments for cash dividends

(61,001)

(95,201)

Tax withholdings related to net share settlements of restricted share units

(11,461)

(13,754)

Debt issuance costs

(13,508)

(3,638)

Proceeds from sale of common shares held in trust

15,341

8,704

Other

(3)

(1,095)

Net cash provided by (used in) financing activities

(276,940)

135,159

Effect of exchange rate changes on cash and equivalents

(483)

927

Net increase in cash and equivalents

108,361

340,899

Cash and equivalents at beginning of period

10,974

154,382

Less: change in cash held for sale

(27)

Cash and equivalents at end of period

$

119,335

$

495,254

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, 2017:

U.S.

Canada

Total

Core Price

3.2%

3.8%

3.3%

Surcharges

0.0%

0.1%

0.0%

Volume

1.1%

(2.7%)

0.5%

Recycling

0.5%

2.0%

0.8%

Foreign Exchange Impact

4.2%

0.7%

Total

4.8%

7.4%

5.3%

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended September 30, 2016 and 2017:

Three Months Ended September 30, 2016

Revenue

Inter-company Elimination

Reported
Revenue

%

Solid Waste Collection

$

760,281

$

(2,472)

$

757,809

69.9%

Solid Waste Disposal and Transfer

377,998

(144,459)

233,539

21.5%

Solid Waste Recycling

32,138

(2,523)

29,615

2.7%

E&P Waste Treatment, Recovery and Disposal

33,673

(3,608)

30,065

2.8%

Intermodal and Other

34,155

(261)

33,894

3.1%

Total

$

1,238,245

$

(153,323)

$

1,084,922

100.0%

Three Months Ended September 30, 2017

Revenue

Inter-company Elimination

Reported
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%

Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three month periods ended September 30, 2016 and 2017:

Three months ended
September 30,

2016

2017

Solid waste, net

$

538,398

$

40,253

E&P waste

Acquisitions, net

$

538,398

$

40,253

 

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, 2016 and 2017:

Three months ended
September 30,

Nine months ended
September 30,

2016

2017

2016

2017

Cash Interest Paid

$

20,246

$

21,897

$

56,238

$

76,500

Cash Taxes Paid

19,590

44,945

36,504

81,431

Debt to Book Capitalization as of September 30, 2017:  40%

Internalization for the three months ended September 30, 2017:  55%

Days Sales Outstanding for the three months ended September 30, 2017:  45 (34 net of deferred revenue)

Share Information for the three months ended September 30, 2017:

Basic shares outstanding

263,443,064

Dilutive effect of equity-based awards 

856,408

Diluted shares outstanding

264,299,472

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 net income 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
September 30,

Nine months ended
September 30,

2016

2017

2016

2017

Net income attributable to Waste Connections

$

88,617

$

123,227

$

160,948

$

261,732

Plus: Net income attributable to noncontrolling interests

264

183

670

559

Plus: Income tax provision

42,485

64,390

86,750

100,220

Plus: Interest expense

27,621

32,471

65,291

92,763

Less: Interest income

(171)

(1,656)

(447)

(3,131)

Plus: Depreciation and amortization

152,688

163,554

319,707

471,894

Plus: Closure and post-closure accretion

3,034

2,971

5,908

8,805

Plus: Impairments and other operating items

7,682

832

4,634

141,333

Plus/less: Other expense (income), net

(500)

(1,709)

268

(3,561)

Plus/less: Foreign currency transaction loss/(gain)

350

1,864

(339)

3,502

Adjustments:

Plus: Transaction-related expenses (a)

310

1,958

46,827

4,418

Plus: Pre-existing Progressive Waste share-based grants (b)

4,466

2,369

9,823

12,947

Plus: Integration-related and other expenses (c)

10,178

2,922

40,300

8,344

Plus: Synergy bonus (d)

5,300

5,300

Adjusted EBITDA

$

342,324

$

393,376

$

745,640

$

1,099,825

As % of revenues

31.6%

32.6%

32.0%

31.7%

_______________________________________________

(a)

Reflects the addback of acquisition-related transaction costs, which for 2016 primarily related to the Progressive Waste acquisition.

(b)

Reflects share-based compensation costs, including changes in fair value, associated with share-based awards granted by Progressive Waste outstanding at the time of the Progressive Waste acquisition.

(c)

Reflects the addback of rebranding costs and other integration-related items, including professional fees and severance costs, associated with the Progressive Waste acquisition.

(d)

Reflects the addback of bonuses accrued pursuant to the Company’s Synergy Bonus Program adopted on July 19, 2016 in connection 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, plus excess tax benefit associated with equity-based compensation, 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. 

Three months ended
September 30,

Nine months ended
September 30,

2016

2017

2016

2017

Net cash provided by operating activities

$

279,184

$

336,469

$

538,831

$

888,375

Plus/(Less): Change in book overdraft

4,053

(5,665)

6,050

13,814

Plus: Proceeds from disposal of assets

1,466

5,209

3,026

25,826

Plus: Excess tax benefit associated with equity-based compensation

136

5,151

Less: Capital expenditures for property and equipment

(92,847)

(114,768)

(204,934)

(317,385)

Less: Distributions to noncontrolling interests

(3)

Adjustments:

  Payment of contingent consideration recorded in earnings (a)

281

413

  Cash received for divestitures (b)

(3,700)

(21,100)

  Transaction-related expenses (c)

6,480

1,958

41,748

4,418

  Integration-related and other expenses (d)

17,219

2,859

78,521

7,968

  Pre-existing Progressive Waste share-based grants (e)

(175)

11,740

  Synergy bonus (f)

11,798

  Tax effect (g)

(10,128)

(1,778)

(28,537)

(11,426)

Adjusted free cash flow

$

205,844

$

220,409

$

440,266

$

614,028

As % of revenues

19.0%

18.3%

18.9%

17.7%

____________________________________________

(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 Progressive Waste operations.

(c)

Reflects the addback of acquisition-related transaction costs, which for 2016 primarily related to the Progressive Waste acquisition.

(d)

Reflects the addback of rebranding costs and other integration-related items associated with the Progressive Waste acquisition, including professional fees and severance costs.

(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 adopted on July 19, 2016 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
September 30,

Nine months ended
September 30,

2016

2017

2016

2017

Reported net income attributable to Waste Connections

$

88,617

$

123,227

$

160,948

$

261,732

Adjustments:

Amortization of intangibles (a)

26,944

26,613

48,719

76,886

Impairments and other operating items (b)

7,682

832

4,634

141,333

Transaction-related expenses (c)

310

1,958

46,827

4,418

Pre-existing Progressive Waste share-based grants (d)

4,466

2,369

9,823

12,947

Integration-related and other expenses (e)

10,178

2,922

40,300

8,344

Synergy bonus (f)

5,300

5,300

Tax effect (g)

(19,001)

(3,575)

(43,630)

(75,828)

Impact of deferred tax adjustment (h)

1,964

3,787

1,964

3,787

Adjusted net income attributable to Waste Connections     

$

126,460

$

158,133

$

274,885

$

433,619

 

Diluted earnings per common share attributable to Waste Connections’ common shareholders:

     Reported net income

$

0.34

$

0.47

$

0.73

$

0.99

Adjusted net income

$

0.48

$

0.60

$

1.25

$

1.64

_____________________________________________________

(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, which for 2016 primarily related to the Progressive Waste acquisition.

(d)

Reflects share-based compensation costs, including changes in fair value, associated with share-based awards granted by Progressive Waste outstanding at the time of the Progressive Waste acquisition.

(e)

Reflects the addback of rebranding costs and other integration-related items, including professional fees and severance costs, associated with the Progressive Waste acquisition.

(f)

Reflects the addback of bonuses accrued pursuant to the Company’s Synergy Bonus Program adopted on July 19, 2016 in connection with the Progressive Waste acquisition.

(g)

The aggregate tax effect of the adjustments in footnotes (a) through (f) is calculated based on the applied tax rates for the respective periods.

(h)

Reflects in 2016 a change in the geographical apportionment of our deferred tax liabilities resulting from the Progressive Waste acquisition.  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.

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