Attached files
file | filename |
---|---|
8-K - FORM 8-K - Waste Connections US, Inc. | c20124e8vk.htm |
Exhibit 99.1
WASTE CONNECTIONS REPORTS SECOND QUARTER 2011 RESULTS
| Revenue of $390.2 million, up 18.1% | ||
| Internal growth of 5.5% and operating margins above expectations | ||
| GAAP EPS and adjusted EPS* of $0.39, up 21.9% | ||
| YTD net cash provided by operating activities of $190 million | ||
| YTD free cash flow* of $145.5 million, or 20.2% of revenue | ||
| Completes new $1.2 billion unsecured revolving credit facility | ||
| Returns $59.4 million YTD to stockholders through share repurchases and dividends |
FOLSOM, CA, July 19, 2011 - Waste Connections, Inc. (NYSE: WCN) today announced its results for the
second quarter of 2011. Revenue totaled $390.2 million, an 18.1% increase over revenue of $330.5
million in the year ago period. Operating income was $84.8 million, or 21.7% of revenue, up 22.3%
over operating income of $69.4 million in the second quarter of 2010. Net income attributable to
Waste Connections in the quarter was $44.4 million, or $0.39 per share on a diluted basis of 114.3
million shares. In the year ago period, the Company reported net income attributable to Waste
Connections of $30.4 million, or $0.26 per share on a diluted basis of 117.5 million shares.
Adjusted net income attributable to Waste Connections in the quarter was $44.8 million*, or $0.39
per share*, adjusting primarily for acquisition-related costs expensed during the period. Adjusted
net income attributable to Waste Connections in the prior year period was $37.2 million*, or $0.32
per share*, adjusting primarily for costs associated with the early redemption of the Companys
2026 Notes.
Non-cash costs for equity-based compensation, amortization of acquisition-related intangibles, loss
on the early redemption of the 2026 Notes (net of make-whole payment), and amortization of debt
discount related to convertible debt instruments were $8.6 million ($5.4 million net of taxes, or
approximately $0.05 per share) in the quarter compared to $8.5 million ($5.3 million net of taxes,
or approximately $0.05 per share) in the year ago period.
2011 continues to play out well for us. Core pricing, increasing disposal volumes and record
recycling commodity values once again contributed to solid results in the quarter. These factors,
together with better than expected contribution from recent acquisitions, enabled us to exceed the
upper end of our outlook. Adjusted operating income before depreciation and amortization* as a
percentage of revenue in the second quarter expanded 30 basis points over the prior year period
despite a 100 basis point increase in fuel expense as a percentage of revenue, and adjusted EPS*
increased more than 20%, said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. Our
strong free cash flow, low leverage and more than $600 million of available capacity under our new
credit facility provide tremendous flexibility to fund our growth strategy and return of capital to
shareholders.
* | A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule. |
For the six months ended June 30, 2011, revenue was $721.7 million, a 13.1% increase over revenue
of $638.0 million in the year ago period. Operating income was $153.4 million, or 21.3% of
revenue, up 18.9% over operating income of $129.0 million for the same period in 2010. Net income
attributable to Waste Connections for the six months ended June 30, 2011, was $81.0 million, or
$0.71 per share on a diluted basis of 114.4 million shares. In the
year ago period, the Company reported net income attributable to Waste Connections of $58.0
million, or $0.49 per share on a diluted basis of 117.7 million shares. Adjusted net income
attributable to Waste Connections for the six months ended June 30, 2011, was $81.7 million*, or
$0.71 per share*, up 22.1% and 24.6%, respectively, compared to $66.9 million*, or $0.57 per share*
in the year ago period.
For the six months ended June 30, 2011, non-cash costs for equity-based compensation, amortization
of
acquisition-related intangibles, loss on the early redemption of the 2026 Notes (net of make-whole
payment), and amortization of debt discount related to convertible debt instruments were $15.6
million ($9.7 million net of taxes, or approximately $0.08 per share), compared to $16.3 million
($10.1 million net of taxes, or approximately $0.09 per share) in the year ago period.
Waste Connections, Inc. is an integrated solid waste services company that provides solid waste
collection, transfer, disposal and recycling services in mostly exclusive and secondary markets.
The Company serves more than two million residential, commercial and industrial customers from a
network of operations in 29 states. The Company also provides intermodal services for the movement
of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and
is headquartered in Folsom, California.
Waste Connections will be hosting a conference call related to second quarter earnings and third
quarter outlook on July 20th at 8:30 A.M. Eastern Time. The call will be broadcast live over the
Internet at www.streetevents.com or through a link on our website at
www.wasteconnections.com. A playback of the call will be available at both of these
websites.
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 (916) 608-8200.
* | A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule. |
Information Regarding Forward-Looking Statements
Certain statements contained in this release are forward-looking in nature, including statements
related to expected performance of our base business, expected share repurchases and dividend
payments, expected contribution from closed acquisitions, and future acquisition activity and
growth strategy. These statements can be identified by the use of forward-looking terminology such
as believes, expects, may, will, should, or anticipates, or the negative thereof or
comparable terminology, or by discussions of strategy. Our business and operations are subject to
a variety of risks and uncertainties and, consequently, actual results may differ materially from
those projected by any forward-looking statements. Factors that could cause actual results to
differ from those projected include, but are not limited to, the following: (1) our acquisitions
may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the
business acquired; (2) a portion of our growth and future financial performance depends on our
ability to integrate acquired businesses into our organization and operations; (3) downturns in the
worldwide economy adversely affect operating results; (4) our results are vulnerable to economic
conditions and seasonal factors affecting the regions in which we operate; (5) we may be subject in
the normal course of business to judicial, administrative or other third party proceedings that
could interrupt or limit our operations, require expensive remediation, result in adverse
judgments, settlements or fines and create negative publicity; (6) we may be unable to compete
effectively with larger and better capitalized companies and governmental service providers; (7) we
may lose contracts through competitive bidding, early termination or governmental action; (8) price
increases may not be adequate to offset the impact of increased costs or may cause us to lose
volume; (9) increases in the price of fuel may adversely affect our business and reduce our
operating margins; (10) increases in labor and disposal and related transportation costs could
impact our financial results; (11) efforts by labor unions could divert management attention and
adversely affect operating results; (12) we could face significant withdrawal liability if we
withdraw from participation in one or more underfunded multiemployer pension plans in which we
participate; (13) increases in insurance costs and the amount that we self-insure for various risks
could reduce our operating margins and reported earnings; (14) competition for acquisition
candidates, consolidation within the waste industry and economic and market conditions may limit
our ability to grow through acquisitions; (15) our indebtedness could adversely affect our
financial condition; we may incur substantially more debt in the future; (16) each business that we
acquire or have acquired may have liabilities or risks that we fail or are unable to discover,
including environmental
- 2 -
liabilities; (17) liabilities for environmental damage may adversely affect
our financial condition, business and earnings; (18) our accruals for our landfill site closure and
post-closure costs may be inadequate; (19) the financial soundness of our customers could affect
our business and operating results; (20) we depend significantly on the services of the members of
our senior, regional and district management team, and the departure of any of those persons could
cause our operating results to suffer; (21) our decentralized decision-making structure could allow
local managers to make decisions that adversely affect our operating results; (22) we may incur
charges related to capitalized expenditures of
landfill development projects, which would decrease our earnings; (23) because we depend on
railroads for our intermodal operations, our operating results and financial condition are likely
to be adversely affected by any reduction or deterioration in rail service; (24) our financial
results are based upon estimates and assumptions that may differ from actual results; (25) the
adoption of new accounting standards or interpretations could adversely affect our financial
results; (26) our financial and operating performance may be affected by the inability to renew
landfill operating permits, obtain new landfills and expand existing ones; (27) future changes in
laws or renewed enforcement of laws regulating the flow of solid waste in interstate commerce could
adversely affect our operating results; (28) fluctuations in prices for recycled commodities that
we sell and rebates we offer to customers may cause our revenues and operating results to decline;
(29) extensive and evolving environmental, health, safety and employment laws and regulations may
restrict our operations and growth and increase our costs; (30) climate change regulations may
adversely affect operating results; (31) extensive regulations that govern the design, operation
and closure of landfills may restrict our landfill operations or increase our costs of operating
landfills; (32) alternatives to landfill disposal may cause our revenues and operating results to
decline; and (33) unusually adverse weather conditions may interfere with our operations, harming
our operating results. These risks and uncertainties, as well as others, are discussed in greater
detail in our filings with the Securities and Exchange Commission, including our most recent Annual
Report on Form 10-K. There may be additional risks of which we are not presently aware or that we
currently believe are immaterial which could have an adverse impact on our business. We make no
commitment to revise or update any forward-looking statements in order to reflect events or
circumstances that may change.
financial tables attached
CONTACT:
Worthing Jackman / (916) 608-8266
worthingj@wasteconnections.com
Worthing Jackman / (916) 608-8266
worthingj@wasteconnections.com
- 3 -
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2011
(Unaudited)
(in thousands, except share and per share amounts)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2011
(Unaudited)
(in thousands, except share and per share amounts)
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2011 | 2010 | 2011 | |||||||||||||
Revenues |
$ | 330,477 | $ | 390,184 | $ | 638,018 | $ | 721,652 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of operations |
187,346 | 221,872 | 364,336 | 408,938 | ||||||||||||
Selling, general and administrative |
36,353 | 41,169 | 72,011 | 80,007 | ||||||||||||
Depreciation |
33,464 | 36,939 | 64,908 | 69,975 | ||||||||||||
Amortization of intangibles |
3,598 | 5,673 | 7,184 | 9,650 | ||||||||||||
Loss (gain) on disposal of assets |
365 | (267 | ) | 622 | (292 | ) | ||||||||||
Operating income |
69,351 | 84,798 | 128,957 | 153,374 | ||||||||||||
Interest expense |
(9,161 | ) | (11,087 | ) | (21,423 | ) | (19,920 | ) | ||||||||
Interest income |
165 | 143 | 318 | 276 | ||||||||||||
Loss on extinguishment of debt |
(9,734 | ) | | (10,193 | ) | | ||||||||||
Other income (expense), net |
(169 | ) | (245 | ) | 469 | 149 | ||||||||||
Income before income tax provision |
50,452 | 73,609 | 98,128 | 133,879 | ||||||||||||
Income tax provision |
(19,815 | ) | (29,004 | ) | (39,678 | ) | (52,481 | ) | ||||||||
Net income |
30,637 | 44,605 | 58,450 | 81,398 | ||||||||||||
Less: net income attributable to
noncontrolling interests |
(237 | ) | (192 | ) | (477 | ) | (446 | ) | ||||||||
Net income attributable to Waste Connections |
$ | 30,400 | $ | 44,413 | $ | 57,973 | $ | 80,952 | ||||||||
Earnings per common share attributable to
Waste Connections common stockholders: |
||||||||||||||||
Basic |
$ | 0.26 | $ | 0.39 | $ | 0.50 | $ | 0.71 | ||||||||
Diluted |
$ | 0.26 | $ | 0.39 | $ | 0.49 | $ | 0.71 | ||||||||
Shares used in the per share calculations: |
||||||||||||||||
Basic |
116,243,700 | 113,509,668 | 116,401,140 | 113,514,439 | ||||||||||||
Diluted |
117,482,751 | 114,308,710 | 117,747,552 | 114,354,979 | ||||||||||||
Cash dividends per common share |
$ | | $ | 0.075 | $ | | $ | 0.15 | ||||||||
- 4 -
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
December 31, | June 30, | |||||||
2010 | 2011 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and equivalents |
$ | 9,873 | $ | 16,951 | ||||
Accounts receivable, net of allowance for doubtful accounts
of $5,084 and $4,728 at December 31, 2010 and
June 30, 2011, respectively |
152,156 | 174,974 | ||||||
Deferred income taxes |
20,130 | 16,231 | ||||||
Prepaid expenses and other current assets |
33,402 | 28,449 | ||||||
Total current assets |
215,561 | 236,605 | ||||||
Property and equipment, net |
1,337,476 | 1,361,804 | ||||||
Goodwill |
927,852 | 1,104,823 | ||||||
Intangible assets, net |
381,475 | 455,841 | ||||||
Restricted assets |
30,441 | 28,185 | ||||||
Other assets, net |
23,179 | 26,630 | ||||||
$ | 2,915,984 | $ | 3,213,888 | |||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 85,252 | $ | 82,293 | ||||
Book overdraft |
12,396 | 10,478 | ||||||
Accrued liabilities |
99,075 | 105,920 | ||||||
Deferred revenue |
54,157 | 61,720 | ||||||
Current portion of long-term debt and notes payable |
2,657 | 2,693 | ||||||
Total current liabilities |
253,537 | 263,104 | ||||||
Long-term debt and notes payable |
909,978 | 1,135,976 | ||||||
Other long-term liabilities |
47,637 | 50,018 | ||||||
Deferred income taxes |
334,414 | 364,900 | ||||||
Total liabilities |
1,545,566 | 1,813,998 | ||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
Preferred stock: $0.01 par value; 7,500,000 shares authorized;
none issued and outstanding |
| | ||||||
Common stock: $0.01 par value; 250,000,000 shares authorized;
113,950,081 and 113,034,132 shares issued and outstanding
at December 31, 2010 and June 30, 2011, respectively |
1,139 | 1,130 | ||||||
Additional paid-in capital |
509,218 | 473,142 | ||||||
Retained earnings |
858,887 | 922,798 | ||||||
Accumulated other comprehensive loss |
(3,095 | ) | (1,428 | ) | ||||
Total Waste Connections equity |
1,366,149 | 1,395,642 | ||||||
Noncontrolling interest in subsidiaries |
4,269 | 4,248 | ||||||
Total equity |
1,370,418 | 1,399,890 | ||||||
$ | 2,915,984 | $ | 3,213,888 | |||||
- 5 -
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2010 AND 2011
(Unaudited)
(Dollars in thousands)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2010 AND 2011
(Unaudited)
(Dollars in thousands)
Six months ended | ||||||||
June 30, | ||||||||
2010 | 2011 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 58,450 | $ | 81,398 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Loss (gain) on disposal of assets |
622 | (292 | ) | |||||
Depreciation |
64,908 | 69,975 | ||||||
Amortization of intangibles |
7,184 | 9,650 | ||||||
Deferred income taxes, net of acquisitions |
7,737 | 23,106 | ||||||
Loss on redemption of 2026 Notes, net of make-whole payment |
2,255 | | ||||||
Amortization of debt issuance costs |
1,090 | 540 | ||||||
Amortization of debt discount |
1,245 | | ||||||
Equity-based compensation |
5,625 | 5,962 | ||||||
Interest income on restricted assets |
(271 | ) | (245 | ) | ||||
Closure and post-closure accretion |
880 | 967 | ||||||
Excess tax benefit associated with equity-based compensation |
(6,423 | ) | (2,829 | ) | ||||
Net change in operating assets and liabilities, net of acquisitions |
422 | 1,744 | ||||||
Net cash provided by operating activities |
143,724 | 189,976 | ||||||
Cash flows from investing activities: |
||||||||
Payments for acquisitions, net of cash acquired |
(3,849 | ) | (216,062 | ) | ||||
Capital expenditures for property and equipment |
(50,495 | ) | (46,562 | ) | ||||
Proceeds from disposal of assets |
4,925 | 1,862 | ||||||
Decrease (increase) in restricted assets, net of interest income |
(813 | ) | 2,501 | |||||
Decrease (increase) in other assets |
39 | (2,764 | ) | |||||
Net cash used in investing activities |
(50,193 | ) | (261,025 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from long-term debt |
281,000 | 427,500 | ||||||
Principal payments on notes payable and long-term debt |
(308,860 | ) | (286,202 | ) | ||||
Change in book overdraft |
(2,172 | ) | (1,918 | ) | ||||
Proceeds from option and warrant exercises |
17,774 | 2,776 | ||||||
Excess tax benefit associated with equity-based compensation |
6,423 | 2,829 | ||||||
Payments for repurchase of common stock |
(83,665 | ) | (42,381 | ) | ||||
Payments for cash dividends |
| (17,041 | ) | |||||
Tax withholdings related to net share settlements
of restricted stock units |
(3,600 | ) | (5,271 | ) | ||||
Distributions to noncontrolling interests |
| (675 | ) | |||||
Debt issuance costs |
| (1,490 | ) | |||||
Net cash provided by (used in) financing activities |
(93,100 | ) | 78,127 | |||||
Net increase in cash and equivalents |
431 | 7,078 | ||||||
Cash and equivalents at beginning of period |
9,639 | 9,873 | ||||||
Cash and equivalents at end of period |
$ | 10,070 | $ | 16,951 | ||||
- 6 -
ADDITIONAL STATISTICS
THREE AND SIX MONTHS ENDED JUNE 30, 2011
(Dollars in thousands)
THREE AND SIX MONTHS ENDED JUNE 30, 2011
(Dollars in thousands)
Internal Growth: The following table reflects revenue growth for operations owned for at least 12
months:
Three months ended | ||||
June 30, 2011 | ||||
Core Price |
2.8 | % | ||
Surcharges |
0.8 | % | ||
Volume |
0.5 | % | ||
Intermodal, Recycling and Other |
1.4 | % | ||
Total |
5.5 | % | ||
Revenue Breakdown:
Three months ended | Six months ended | |||||||||||||||
June 30, 2011 | June 30, 2011 | |||||||||||||||
Collection |
$ | 275,170 | 61.5 | % | $ | 514,607 | 62.3 | % | ||||||||
Disposal and Transfer |
133,722 | 29.9 | % | 243,282 | 29.4 | % | ||||||||||
Intermodal, Recycling and Other |
38,328 | 8.6 | % | 68,471 | 8.3 | % | ||||||||||
Total before inter-company elimination |
$ | 447,220 | 100.0 | % | $ | 826,360 | 100.0 | % | ||||||||
Inter-company elimination |
$ | (57,036 | ) | $ | (104,708 | ) | ||||||||||
Reported Revenue |
$ | 390,184 | $ | 721,652 | ||||||||||||
Days Sales Outstanding for the three months ended June 30, 2011: 41 (26 net of deferred revenue)
Internalization for the three months ended June 30, 2011: 61%
Other Cash Flow Items:
Three months ended | Six months ended | |||||||
June 30, 2011 | June 30, 2011 | |||||||
Cash Interest Paid |
$ | 13,386 | $ | 16,732 | ||||
Cash Taxes Paid |
$ | 12,210 | $ | 12,821 |
Debt to Book Capitalization as of June 30, 2011: 45%
Share Information for the three months ended June 30, 2011:
Basic shares outstanding |
113,509,668 | |||
Dilutive effect of options and warrants |
451,173 | |||
Dilutive effect of restricted stock |
347,869 | |||
Diluted shares outstanding |
114,308,710 |
- 7 -
NON-GAAP RECONCILIATION SCHEDULE
(in thousands)
(in thousands)
Reconciliation of Adjusted Operating Income before Depreciation and Amortization:
Adjusted operating income before depreciation and amortization, 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. Waste Connections defines adjusted operating income before
depreciation and amortization as operating income, plus depreciation and amortization expense, plus
closure and post-closure accretion expense, plus or minus any gain or loss on disposal of assets.
The Company further adjusts this calculation to exclude the effects of items management believes
impact the ability to assess the operating performance of our business. This measure is not a
substitute for, and should be used in conjunction with, GAAP financial measures. Management uses
adjusted operating income before depreciation and amortization as one of the principal measures to
evaluate and monitor the ongoing financial performance of the Companys operations. Other
companies may calculate adjusted operating income before depreciation and amortization differently.
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2011 | |||||||
Operating income |
$ | 69,351 | $ | 84,798 | ||||
Plus: Depreciation and amortization |
37,062 | 42,612 | ||||||
Plus: Closure and post-closure accretion |
439 | 484 | ||||||
Plus/less: Loss (gain) on disposal of assets |
365 | (267 | ) | |||||
Adjustments: |
||||||||
Plus: Acquisition-related transaction costs (a) |
244 | 423 | ||||||
Adjusted operating income before depreciation and amortization |
$ | 107,461 | $ | 128,050 | ||||
As % of revenues |
32.5 | % | 32.8 | % |
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2011 | |||||||
Operating income |
$ | 128,957 | $ | 153,374 | ||||
Plus: Depreciation and amortization |
72,092 | 79,625 | ||||||
Plus: Closure and post-closure accretion |
880 | 967 | ||||||
Plus/less: Loss (gain) on disposal of assets |
622 | (292 | ) | |||||
Adjustments: |
||||||||
Plus: Acquisition-related transaction costs (a) |
395 | 1,094 | ||||||
Adjusted operating income before depreciation and amortization |
$ | 202,946 | $ | 234,768 | ||||
As % of revenues |
31.8 | % | 32.5 | % |
(a) | Reflects the addback of acquisition-related costs. |
- 8 -
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands, except per share amounts)
(in thousands, except per share amounts)
Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income per diluted
share:
Adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures,
are provided supplementally because they are widely used by investors as a valuation measure in the
solid waste industry. The Company provides adjusted net income to exclude the effects of items
management believes impact the comparability of operating results between periods. Adjusted net income has
limitations due to the fact that it may exclude items that have an impact on the Companys
financial condition and results of operations. Adjusted net income and adjusted net income per
diluted share are not a substitute for, and should be used in conjunction with, GAAP financial
measures. Management uses adjusted net income and adjusted net income per diluted share as one of
the principal measures to evaluate and monitor ongoing financial performance of the Companys
operations. Other companies may calculate adjusted net income and adjusted net income per diluted
share differently.
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2011 | 2010 | 2011 | |||||||||||||
Reported net income attributable to Waste Connections |
$ | 30,400 | $ | 44,413 | $ | 57,973 | $ | 80,952 | ||||||||
Adjustments: |
||||||||||||||||
Loss on extinguishment of debt, net of taxes (a) |
6,035 | | 6,320 | | ||||||||||||
Acquisition-related transaction costs, net of taxes (b) |
151 | 507 | 245 | 923 | ||||||||||||
Loss (gain) on disposal of assets, net of taxes (c) |
648 | (166 | ) | 808 | (181 | ) | ||||||||||
Impact of deferred tax adjustment (d) |
| | 1,547 | | ||||||||||||
Adjusted net income attributable to Waste Connections |
$ | 37,234 | $ | 44,754 | $ | 66,893 | $ | 81,694 | ||||||||
Diluted earnings per common share attributable to Waste
Connections common stockholders: |
||||||||||||||||
Reported net income |
$ | 0.26 | $ | 0.39 | $ | 0.49 | $ | 0.71 | ||||||||
Adjusted net income |
$ | 0.32 | $ | 0.39 | $ | 0.57 | $ | 0.71 | ||||||||
(a) | Reflects the elimination of costs associated with the early redemption of outstanding debt. | |
(b) | Reflects the elimination of acquisition-related costs. | |
(c) | Reflects the elimination of a loss (gain) on disposal of assets. | |
(d) | Reflects the elimination of an increase to the income tax provision associated with an adjustment in the Companys deferred tax liabilities primarily resulting from a voter-approved increase in Oregon state income tax rates. |
- 9 -
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands)
(in thousands)
Reconciliation of Free Cash Flow:
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. Waste Connections
defines free cash flow as net cash provided by operating activities, plus proceeds from disposal of
assets, plus or minus change in book overdraft, plus excess tax benefit associated with
equity-based compensation, less capital expenditures for property and equipment and distributions
to noncontrolling interests. This measure is not a substitute for, and should be used in
conjunction with, GAAP liquidity or financial measures. Management uses free cash flow as one of
the principal measures to evaluate and monitor the ongoing financial performance of the Companys
operations. Other companies may calculate free cash flow differently.
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2011 | |||||||
Net cash provided by operating activities |
$ | 60,044 | $ | 101,597 | ||||
Plus/less: Change in book overdraft |
(1,191 | ) | (1,903 | ) | ||||
Plus: Proceeds from disposal of assets |
4,123 | 1,074 | ||||||
Plus: Excess tax benefit associated with equity-based compensation |
3,945 | 991 | ||||||
Less: Capital expenditures for property and equipment |
(23,742 | ) | (27,034 | ) | ||||
Less: Distributions to noncontrolling interests |
| | ||||||
Free cash flow |
$ | 43,179 | $ | 74,725 | ||||
As % of revenues |
13.1 | % | 19.2 | % |
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2011 | |||||||
Net cash provided by operating activities |
$ | 143,724 | $ | 189,976 | ||||
Plus: Change in book overdraft |
(2,172 | ) | (1,918 | ) | ||||
Plus: Proceeds from disposal of assets |
4,925 | 1,862 | ||||||
Plus: Excess tax benefit associated with equity-based compensation |
6,423 | 2,829 | ||||||
Less: Capital expenditures for property and equipment |
(50,495 | ) | (46,562 | ) | ||||
Less: Distributions to noncontrolling interests |
| (675 | ) | |||||
Free cash flow |
$ | 102,405 | $ | 145,512 | ||||
As % of revenues |
16.1 | % | 20.2 | % |
- 10 -