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8-K - FORM 8-K - Waste Connections US, Inc.d427474d8k.htm

Exhibit 99.1

 

LOGO

WASTE CONNECTIONS REPORTS THIRD QUARTER 2012 RESULTS

 

   

Revenue of $425.7 million, up 5.4%, and adjusted net income* of $49.3 million, up 4.8%

 

   

GAAP and adjusted EPS* of $0.40

 

   

YTD net cash provided by operating activities of $326.7 million

 

   

YTD adjusted free cash flow* of $223.9 million, or 18.5% of revenue

 

   

R360 acquisition on track to close during Q4

THE WOODLANDS, TX, October 22, 2012—Waste Connections, Inc. (NYSE: WCN) today announced its results for the third quarter of 2012. Revenue totaled $425.7 million, a 5.4% increase over revenue of $404.0 million in the year ago period. Operating income was $89.1 million compared to $89.3 million in the third quarter of 2011. Operating income in the current year period included approximately $3.5 million ($2.2 million net of taxes) associated with costs incurred in connection with the relocation of our corporate headquarters from California to Texas, acquisition-related transaction costs and loss on disposal of assets, which were offset by an approximate $3.5 million ($2.2 million net of taxes) gain from litigation settlement. Net income attributable to Waste Connections in the quarter was $49.4 million, or $0.40 per share on a diluted basis of 123.7 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $46.3 million, or $0.41 per share on a diluted basis of 113.2 million shares.

Adjusted net income attributable to Waste Connections in the quarter was $49.3 million*, or $0.40 per share*, adjusting for the items noted above. Adjusted net income attributable to Waste Connections in the prior year period was $47.1 million*, or $0.42 per share*, adjusting primarily for a loss on disposal of assets.

“We once again are extremely pleased with our performance for the quarter as revenue, margins and free cash flow exceeded the upper end of our expectations – notable achievements in light of declining recycled commodity values realized during the period. Throughout the year, we have cautioned investors about the tepid macro environment, the headwinds of lower recycled commodity prices and tough disposal comps. We believe the strength of our operating performance continues to demonstrate the resiliency of our differentiated strategy,” said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. “Although the direction of the economy remains uncertain, we are encouraged both by recent improvements in construction data and increases since early October in recycled commodity prices.”

Mr. Mittelstaedt added, “We also are especially encouraged by our prospects for 2013 given the expected highly accretive rollover contribution from acquisitions already completed or announced this year. The Alaska Waste and SKB acquisitions completed earlier this year are exceeding our initial expectations. And as announced in September, we entered into an agreement to acquire the business of R360 Environmental Solutions, Inc. for approximately $1.3 billion in cash. R360 is 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 oil-rich Permian,

 

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


Bakken and Eagle Ford Basins. Its growth is being fueled by increased drilling activity in unconventional basins, increased environmental regulatory scrutiny, and the strategic positioning of its assets across several basins. The R360 transaction, which remains subject to certain closing conditions including receipt of regulatory approvals, remains on track to close during the fourth quarter of 2012.”

For the nine months ended September 30, 2012, revenue was $1.2 billion, a 7.7% increase over revenue of $1.1 billion in the year ago period. Operating income was $235.9 million compared to $242.7 million for the same period in 2011. Operating income in the current year period included approximately $10.9 million ($7.8 million net of taxes) of costs incurred in connection with the relocation of our corporate headquarters from California to Texas, acquisition-related transaction costs, a one-time equity compensation expense related to awards made at the time of the modification of our named executive officers’ employment contracts, and loss on disposal of assets, partially offset by a gain from litigation settlement. Operating income in the prior year period included approximately $2.0 million of expenses ($1.5 million net of taxes) associated with acquisition-related transaction costs and loss on disposal of assets.

Net income attributable to Waste Connections for the nine months ended September 30, 2012, was $123.1 million, or $1.02 per share on a diluted basis of 121.2 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $127.3 million, or $1.12 per share on a diluted basis of 114.0 million shares. Adjusted net income attributable to Waste Connections for the nine months ended September 30, 2012, was $130.9 million*, or $1.08 per share*, compared to $128.8 million*, or $1.13 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 30 states. The Company also provides intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in The Woodlands, Texas.

Waste Connections will be hosting a conference call related to third quarter earnings and fourth quarter outlook on October 23rd 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 (832) 442-2200.

 

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

 

- 2 -


Information Regarding Forward-Looking Statements

Certain statements contained in this release are forward-looking in nature, including statements related to: expected operating performance; expected roll-off activity and recycled commodity prices; expected contribution from recently completed and announced acquisitions; the anticipated closing date for announced acquisitions and the Company’s ability to finance such activity; and the impact of the relocation of the Company’s corporate headquarters from Folsom, California to The Woodlands, Texas. 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. 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) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions; (4) we may be unable to compete effectively with larger and better capitalized companies, companies with lower return expectations, and governmental service providers; (5) we may lose contracts through competitive bidding, early termination or governmental action; (6) price increases may not be adequate to offset the impact of increased costs or may cause us to lose volume; (7) economic downturns adversely affect operating results; (8) our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate; (9) 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; (10) increases in the price of fuel may adversely affect our business and reduce our operating margins; (11) increases in labor and disposal and related transportation costs could impact our financial results; (12) efforts by labor unions could divert management attention and adversely affect operating results; (13) we could face significant withdrawal liability if we withdraw from participation in one or more underfunded multiemployer pension plans in which we participate; (14) increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings; (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 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) pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements; and (27) if we are not able to develop and protect intellectual property, or if a competitor develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer. 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 and subsequent Quarterly Reports on Form 10-Q. 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:

  

Mary Anne Whitney / (832) 442-2253

maryannew@wasteconnections.com

Worthing Jackman / (832) 442-2266

  

worthingj@wasteconnections.com

  

 

- 3 -


WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2012

(Unaudited)

(in thousands, except share and per share amounts)

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2011     2012     2011     2012  

Revenues

   $ 403,962      $ 425,654      $ 1,125,614      $ 1,212,815   

Operating expenses:

        

Cost of operations

     228,561        243,243        637,499        698,351   

Selling, general and administrative

     41,047        47,977        121,054        143,899   

Depreciation

     38,868        42,313        108,843        119,331   

Amortization of intangibles

     5,138        6,267        14,788        18,115   

Loss on disposal of assets

     1,034        244        742        715   

Gain from litigation settlement

     —          (3,537     —          (3,537
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     89,314        89,147        242,688        235,941   

Interest expense

     (12,029     (11,949     (31,948     (36,063

Interest income

     132        333        408        630   

Other income (expense), net

     (899     492        (750     1,033   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     76,518        78,023        210,398        201,541   

Income tax provision

     (29,934     (28,403     (82,415     (77,967
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     46,584        49,620        127,983        123,574   

Less: net income attributable to noncontrolling interests

     (255     (235     (702     (470
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Waste Connections

   $ 46,329      $ 49,385      $ 127,281      $ 123,104   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

   $ 0.41      $ 0.40      $ 1.13      $ 1.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.41      $ 0.40      $ 1.12      $ 1.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in the per share calculations:

        

Basic

     112,327,410        123,031,259        113,130,314        120,571,106   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     113,192,884        123,665,589        113,979,165        121,198,901   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends per common share

   $ 0.075      $ 0.09      $ 0.225      $ 0.27   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

- 4 -


WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)

 

     December 31,     September 30,  
     2011     2012  

ASSETS

    

Current assets:

    

Cash and equivalents

   $ 12,643      $ 103,532   

Accounts receivable, net of allowance for doubtful accounts of $6,617 and $6,577 at December 31, 2011 and September 30, 2012, respectively

     176,277        196,617   

Deferred income taxes

     20,630        29,125   

Prepaid expenses and other current assets

     39,708        33,487   
  

 

 

   

 

 

 

Total current assets

     249,258        362,761   

Property and equipment, net

     1,450,469        1,561,415   

Goodwill

     1,116,888        1,183,363   

Intangible assets, net

     449,581        496,341   

Restricted assets

     30,544        32,982   

Other assets, net

     31,265        36,965   
  

 

 

   

 

 

 
   $ 3,328,005      $ 3,673,827   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Accounts payable

   $ 95,097      $ 105,883   

Book overdraft

     12,169        8,786   

Accrued liabilities

     97,020        119,579   

Deferred revenue

     64,694        68,694   

Current portion of contingent consideration

     8,923        25,958   

Current portion of long-term debt and notes payable

     5,899        4,128   
  

 

 

   

 

 

 

Total current liabilities

     283,802        333,028   

Long-term debt and notes payable

     1,172,758        976,446   

Long-term portion of contingent consideration

     22,573        23,995   

Other long-term liabilities

     52,051        66,045   

Deferred income taxes

     397,134        422,487   
  

 

 

   

 

 

 

Total liabilities

     1,928,318        1,822,001   

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; 110,907,782 and 122,783,945 shares issued and outstanding at December 31, 2011 and September 30, 2012, respectively

     1,109        1,228   

Additional paid-in capital

     408,721        772,043   

Retained earnings

     988,560        1,079,482   

Accumulated other comprehensive loss

     (3,480     (6,080
  

 

 

   

 

 

 

Total Waste Connections’ equity

     1,394,910        1,846,673   

Noncontrolling interest in subsidiaries

     4,777        5,153   
  

 

 

   

 

 

 

Total equity

     1,399,687        1,851,826   
  

 

 

   

 

 

 
   $ 3,328,005      $ 3,673,827   
  

 

 

   

 

 

 

 

- 5 -


WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2012

(Unaudited)

(Dollars in thousands)

 

     Nine months ended  
     September 30,  
     2011     2012  

Cash flows from operating activities:

    

Net income

   $ 127,983      $ 123,574   

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

    

Loss on disposal of assets

     742        715   

Depreciation

     108,843        119,331   

Amortization of intangibles

     14,788        18,115   

Deferred income taxes, net of acquisitions

     36,960        18,451   

Amortization of debt issuance costs

     1,005        1,247   

Equity-based compensation

     8,906        14,036   

Interest income on restricted assets

     (355     (491

Interest accretion

     1,977        2,797   

Excess tax benefit associated with equity-based compensation

     (4,500     (3,415

Net change in operating assets and liabilities, net of acquisitions

     1,375        32,379   
  

 

 

   

 

 

 

Net cash provided by operating activities

     297,724        326,739   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Payments for acquisitions, net of cash acquired

     (247,862     (223,256

Capital expenditures for property and equipment

     (84,051     (110,995

Proceeds from disposal of assets

     3,238        2,107   

Decrease in restricted assets, net of interest income

     2,241        4,779   

Other

     (1,706     (6,287
  

 

 

   

 

 

 

Net cash used in investing activities

     (328,140     (333,652
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from long-term debt

     515,500        334,000   

Principal payments on notes payable and long-term debt

     (343,726     (545,069

Payment of contingent consideration

     (100     (4,099

Change in book overdraft

     (937     (3,383

Proceeds from option and warrant exercises

     4,956        1,042   

Excess tax benefit associated with equity-based compensation

     4,500        3,415   

Payments for repurchase of common stock

     (85,068     (18,597

Payments for cash dividends

     (25,497     (32,182

Tax withholdings related to net share settlements of restricted stock units

     (5,436     (6,039

Distributions to noncontrolling interests

     (675     (94

Proceeds from common stock offering, net

     —          369,584   

Debt issuance costs

     (6,414     (776
  

 

 

   

 

 

 

Net cash provided by financing activities

     57,103        97,802   
  

 

 

   

 

 

 

Net increase in cash and equivalents

     26,687        90,889   

Cash and equivalents at beginning of period

     9,873        12,643   
  

 

 

   

 

 

 

Cash and equivalents at end of period

   $ 36,560      $ 103,532   
  

 

 

   

 

 

 

 

- 6 -


ADDITIONAL STATISTICS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012

(Dollars in thousands)

Internal Growth: The following table reflects revenue growth for operations owned for at least 12 months:

 

     Three months ended
September 30, 2012
 

Core Price

     2.9

Surcharges

     0.0

Volume

     (3.4 %) 

Intermodal, Recycling and Other

     (2.2 %) 
  

 

 

 

Total

     (2.7 %) 
  

 

 

 

Revenue Breakdown:

 

     Three months ended
September 30, 2012
    Nine months ended
September 30, 2012
 

Collection

   $ 304,166        62.8   $ 880,920        63.5

Disposal and Transfer

     148,117        30.5     406,034        29.3

Intermodal, Recycling and Other

     32,316        6.7     100,041        7.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total before inter-company elimination

     484,599        100.0     1,386,995        100.0

Inter-company elimination

     (58,945       (174,180  
  

 

 

     

 

 

   

Reported Revenue

   $ 425,654        $ 1,212,815     
  

 

 

     

 

 

   

Days Sales Outstanding for the three months ended September 30, 2012: 42 (28 net of deferred revenue)

Internalization for the three months ended September 30, 2012: 55%

Other Cash Flow Items:

 

     Three months ended
September 30, 2012
     Nine months ended
September  30, 2012
 

Cash Interest Paid

   $ 3,593       $ 26,731   

Cash Taxes Paid

   $ 28,448       $ 42,149   

Debt to Book Capitalization as of September 30, 2012: 35%

Share Information for the three months ended September 30, 2012:

 

Basic shares outstanding

     123,031,259   

Dilutive effect of options and warrants

     303,293   

Dilutive effect of restricted stock units

     331,037   
  

 

 

 

Diluted shares outstanding

     123,665,589   

 

- 7 -


NON-GAAP RECONCILIATION SCHEDULE

(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 Company’s operations. Other companies may calculate adjusted operating income before depreciation and amortization differently.

 

     Three months ended
September 30, 2011
    Three months ended
September 30, 2012
 

Operating income

   $ 89,314      $ 89,147   

Plus: Depreciation and amortization

     44,006        48,580   

Plus: Closure and post-closure accretion

     484        645   

Plus: Loss on disposal of assets

     1,034        244   

Adjustments:

    

Plus: Acquisition-related transaction costs (a)

     183        1,451   

Plus: Corporate relocation expenses (b)

     —          1,774   

Less: Gain from litigation settlement (d)

     —          (3,537
  

 

 

   

 

 

 

Adjusted operating income before depreciation and amortization

   $ 135,021      $ 138,304   
  

 

 

   

 

 

 

As % of revenues

     33.4     32.5

 

     Nine months ended
September  30, 2011
    Nine months ended
September  30, 2012
 

Operating income

   $ 242,688      $ 235,941   

Plus: Depreciation and amortization

     123,631        137,446   

Plus: Closure and post-closure accretion

     1,451        1,870   

Plus: Loss on disposal of assets

     742        715   

Adjustments:

    

Plus: Acquisition-related transaction costs (a)

     1,278        3,610   

Plus: Corporate relocation expenses (b)

     —          6,491   

Plus: NEO one-time equity grants (c)

     —          3,585   

Less: Gain from litigation settlement (d)

     —          (3,537
  

 

 

   

 

 

 

Adjusted operating income before depreciation and amortization

   $ 369,790      $ 386,121   
  

 

 

   

 

 

 

As % of revenues

     32.9     31.8

 

(a) Reflects the addback of acquisition-related costs.
(b) Reflects the addback of costs associated with the relocation of the Company’s corporate headquarters from California to Texas.
(c) Reflects the addback of one-time equity compensation expense incurred at the time the Company’s NEOs’ employment contracts were modified.
(d) Reflects the elimination of a non-recurring gain from an arbitration award.

 

- 8 -


NON-GAAP RECONCILIATION SCHEDULE (continued)

(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. Waste Connections 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 Company’s 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 Company’s operations. Other companies may calculate adjusted net income and adjusted net income per diluted share differently.

 

     Three months ended
September 30,
    Nine months ended
September 30,
 
     2011      2012     2011      2012  

Reported net income attributable to Waste Connections

   $ 46,329       $ 49,385      $ 127,281       $ 123,104   

Adjustments:

          

Acquisition-related transaction costs, net of taxes (a)

     114         900        1,037         2,238   

Loss on disposal of assets, net of taxes (b)

     641         151        460         443   

Corporate relocation expenses, net of taxes (c)

     —           1,100        —           4,024   

NEO one-time equity grants, net of taxes (d)

     —           —          —           3,315   

Litigation settlement, net of taxes (e)

     —           (2,193     —           (2,193
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted net income attributable to Waste Connections

   $ 47,084       $ 49,343      $ 128,778       $ 130,931   
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted earnings per common share attributable to Waste Connections common stockholders:

          

Reported net income

   $ 0.41       $ 0.40      $ 1.12       $ 1.02   
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted net income

   $ 0.42       $ 0.40      $ 1.13       $ 1.08   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(a) Reflects the elimination of acquisition-related costs.
(b) Reflects the elimination of a loss on disposal of assets.
(c) Reflects the addback of costs associated with the relocation of the Company’s corporate headquarters from California to Texas.
(d) Reflects the addback of one-time equity compensation expense incurred at the time our NEOs’ employment contracts were modified.
(e) Reflects the elimination of a non-recurring gain from an arbitration award.

 

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NON-GAAP RECONCILIATION SCHEDULE (continued)

(in thousands)

 

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. Waste Connections defines adjusted 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. The Company 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. Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of the Company’s operations. Other companies may calculate adjusted free cash flow differently.

 

     Three months ended
September 30, 2011
    Three months ended
September 30, 2012
 

Net cash provided by operating activities

   $ 107,748      $ 121,799   

Plus/less: Change in book overdraft

     981        (3,519

Plus: Proceeds from disposal of assets

     1,375        610   

Plus: Excess tax benefit associated with equity-based compensation

     1,671        132   

Less: Capital expenditures for property and equipment

     (37,489     (43,550

Less: Distributions to noncontrolling interests

     —          —     

Adjustment:

    
  

 

 

   

 

 

 

Corporate office relocation, net of taxes (a)

     —          (75
  

 

 

   

 

 

 

Adjusted free cash flow

   $ 74,286      $ 75,397   
  

 

 

   

 

 

 

As % of revenues

     18.4     17.7
     Nine months ended
September  30, 2011
    Nine months ended
September  30, 2012
 

Net cash provided by operating activities

   $ 297,724      $ 326,739   

Less: Change in book overdraft

     (937     (3,383

Plus: Proceeds from disposal of assets

     3,238        2,107   

Plus: Excess tax benefit associated with equity-based compensation

     4,500        3,415   

Less: Capital expenditures for property and equipment

     (84,051     (110,995

Less: Distributions to noncontrolling interests

     (675     (94

Adjustment:

    
  

 

 

   

 

 

 

Corporate office relocation, net of taxes (a)

     —          6,149   
  

 

 

   

 

 

 

Adjusted free cash flow

   $ 219,799      $ 223,938   
  

 

 

   

 

 

 

As % of revenues

     19.5     18.5

 

(a) Reflects the addback of third party expenses and reimbursable advances to employees associated with the relocation of our corporate headquarters from California to Texas.

 

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