EX-99.1 2 v445930_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Color Camera-Ready

 

 

WASTE CONNECTIONS REPORTS SECOND QUARTER 2016 RESULTS

 

- Revenue of $727.6 million, exceeding outlook

- Reports 5.0% solid waste price + volume growth

- Net income of $27.5 million, or $0.20 per share

- Adjusted net income* of $93.2 million, or $0.66 per share

- Adjusted EBITDA* of $233.6 million, or 32.1% of revenue, exceeding outlook

- YTD net cash provided by operating activities of $259.6 million

- YTD adjusted free cash flow* of $234.4 million, or 18.9% of revenue

- Integration of Progressive Waste on track; contribution ahead of expectations

- Authorizes share repurchase program

 

 

TORONTO, ONTARIO, August 3, 2016 - Waste Connections, Inc. (TSX/NYSE: WCN) (“Waste Connections” or the “Company”) today announced its results for the second quarter of 2016. Revenue in the second quarter, which included $174.0 million from the Progressive Waste acquisition, was $727.6 million, as compared to revenue of $531.3 million in the year ago period. Operating income, which included $73.2 million of items primarily related to the Progressive Waste combination completed in the period, was $63.5 million, as compared to $110.0 million in the second quarter of 2015.

 

Net income attributable to Waste Connections in the quarter was $27.5 million, or $0.20 per share on a diluted basis of 140.6 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $57.4 million, or $0.46 per share on a diluted basis of 124.4 million shares.

 

Adjusted net income attributable to Waste Connections* in the quarter was $93.2 million, or $0.66 per share, versus $61.6 million, or $0.50 per share, in the prior year period. Adjusted EBITDA* in the current year period was $233.6 million, as compared to adjusted EBITDA of $177.7 million in the prior year period. Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-GAAP measures, primarily exclude the impact of acquisition-related items, as shown in the detailed reconciliation in the attached table.

 

“Better than expected solid waste volume growth and contribution from the recent combination with Progressive Waste enabled us to once again exceed our outlook for the period. Solid waste margins, excluding the impact of the acquisitions completed since the prior year period, expanded approximately 110 basis points year-over-year.  We believe this performance, together with pricing and operating improvement plans we’ve implemented in Progressive Waste operations, has already positioned our financial run-rate at or above the upper end of our previous outlook for the first year following the combination,” said Ronald J. Mittelstaedt, Chief Executive Officer and Chairman. “We had underestimated the opportunity for improvement within Progressive Waste’s operations and are encouraged by the organizational momentum to exceed original expectations as we look ahead.”

 

Mr. Mittelstaedt added, “Acquisition dialogue remains robust, while continued strength in free cash flow provides the ability to fund both additional growth and return of capital to shareholders. To that end and as also announced today, our board authorized a share repurchase program for up to 5% of our outstanding shares over the next 12 months.”

 

For the six months ended June 30, 2016 revenue was $1.24 billion, as compared to revenue of $1.04 billion in the year ago period. Operating income, which included $82.0 million of items related to the Progressive Waste combination completed on June 1, 2016, was $154.5 million compared to $211.9 million for the same period in 2015.

 

 

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

 

     

 

 

Net income attributable to Waste Connections for the six months ended June 30, 2016, was $72.3 million, or $0.55 per share on a diluted basis of 132.0 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $109.2 million, or $0.88 per share on a diluted basis of 124.4 million shares.

 

Adjusted net income attributable to Waste Connections* for the six months ended June 30, 2016, was $148.4 million, or $1.12 per share, compared to $118.2 million, or $0.95 per share, in the year ago period. Adjusted EBITDA* for the six months ended June 30, 2016, was $403.3 million, as compared to $346.0 million in the prior year period.

 

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

 

 

Presentation of Financials

The combination of Waste Connections US, Inc. (f/k/a Waste Connections, Inc., “Old Waste Connections”) and the Company (f/k/a Progressive Waste Solutions Ltd.) was accounted for as a reverse merger using the acquisition method of accounting. The financial statements presented herein are the historical financial statements of Old Waste Connections with the inclusion on June 1, 2016 of the fair value of the assets and liabilities acquired from Progressive Waste and the inclusion of the results of operations from the acquired Progressive Waste operations commencing on June 1, 2016. The term “Progressive Waste” is used herein in the context of references to Progressive Waste Solutions Ltd. prior to the completion of the Progressive Waste acquisition on June 1, 2016.

 

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 and the District of Columbia 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 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 (which include "forward-looking information" as that term is defined in applicable securities laws in Canada) within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). 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 and speak only as of the date hereof. 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 potential operating trends and acquisition activity, future financial performance and repurchases of common shares of the Company. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, without limitation, the following: the possibility that any of the anticipated benefits of the combination of the Company and Waste Connections US, Inc. (f/k/a Waste Connections, Inc.) will not be realized; the ability of the combined company to successfully achieve business objectives, including integrating the two companies or the effects of unexpected costs, liabilities or delays; the potential benefits and synergies of the transaction; and expectations for other economic, business and/or competitive factors. In addition, you should carefully consider the risks and uncertainties and other factors that may affect future results of the combined company that are disclosed in filings that have been made by the Company (including, under its former name, Progressive Waste Solutions Ltd.) and by Waste Connections US, Inc. (including, under its former name, Waste Connections, Inc.) with the 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 otherwise required by applicable securities laws.

 

 - 2 - 

 

 

– financial tables attached –

 

 

CONTACT:

 

Worthing Jackman / (832) 442-2266  Mary Anne Whitney / (832) 442-2253
worthingj@wasteconnections.com  maryannew@wasteconnections.com

 

 

 

 

 - 3 - 

 

 

Waste Connections, Inc.

CONDENSED Consolidated Statements of NET INCOME

THRee AND SIX months ended JuNE 30, 2015 and 2016

(Unaudited)

(in thousands, except share and per share amounts)

 

  

Three months ended

June 30,

   Six months ended
June 30,		 
   2015   2016   2015   2016 
                 
Revenues  $531,312   $727,639   $1,037,412   $1,242,319 
Operating expenses:                    
Cost of operations   297,437    416,262    578,560    703,453 
Selling, general and administrative   57,264    152,737    115,409    220,419 
Depreciation   59,639    84,348    116,945    145,245 
Amortization of intangibles   7,264    14,081    14,263    21,775 
Other operating items   (316)   (3,284)   346    (3,048)
Operating income   110,024    63,495    211,889    154,475 
                     
Interest expense   (15,322)   (20,485)   (31,018)   (37,670)
Other income (expense), net   92    (714)   (128)   (492)
Foreign currency transaction gain   -    689    -    689 
Income before income tax provision   94,794    42,985    180,743    117,002 
                     
Income tax provision   (37,153)   (15,265)   (71,020)   (44,265)
Net income   57,641    27,720    109,723    72,737 
Less: net income attributable to noncontrolling   interests   (281)   (231)   (539)   (406)
Net income attributable to Waste Connections  $57,360   $27,489   $109,184   $72,331 
                     
Earnings per common share attributable to  Waste Connections’ common shareholders:                    
Basic  $0.46   $0.20   $0.88   $0.55 
                     
Diluted  $0.46   $0.20   $0.88   $0.55 
                     
Shares used in the per share calculations:                    
Basic   124,079,184    140,203,557    124,044,130    131,496,582 
Diluted   124,352,062    140,587,155    124,360,059    132,024,528 
                     
  Cash dividends per common share  $0.13   $0.145   $0.26   $0.29 

 

 - 4 - 

 

 

Waste Connections, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

 

   December 31,
2015		   June 30,
2016		 
ASSETS        
Current assets:        
Cash and equivalents  $10,974   $55,624 
Accounts receivable, net of allowance for doubtful accounts of $7,738 and  $14,083 at December 31, 2015 and June 30, 2016, respectively   255,192    502,833 
Deferred income taxes   49,727    86,146 
Prepaid expenses and other current assets   46,534    89,465 
Total current assets   362,427    734,068 
           
Property and equipment, net   2,738,288    4,788,084 
Goodwill   1,422,825    4,299,463 
Intangible assets, net   511,294    1,160,484 
Restricted assets   46,232    62,985 
Other assets, net   40,732    48,468 
   $5,121,798   $11,093,552 
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable  $115,206   $243,215 
Book overdraft   12,357    14,341 
Accrued liabilities   136,018    269,334 
Deferred revenue   90,349    134,257 
Current portion of contingent consideration   22,217    21,920 
Current portion of long-term debt and notes payable   2,127    1,575 
Total current liabilities   378,274    684,642 
           
Long-term debt and notes payable   2,147,127    3,761,307 
Long-term portion of contingent consideration   27,177    34,604 
Other long-term liabilities   124,943    317,332 
Deferred income taxes   452,493    737,946 
Total liabilities   3,130,014    5,535,831 
           
Commitments and contingencies          
           
Equity:          
Common shares:  122,375,955 and  175,037,601 shares issued and outstanding at December 31, 2015 and June 30, 2016, respectively   1,224    4,163,374 
Additional paid-in capital   736,652    92,792 
Accumulated other comprehensive loss   (12,171)   (1,673)
Treasury shares: 0 shares and 375,007 shares at December 31, 2015 and June 30, 2016, respectively   -    - 
Retained earnings   1,259,495    1,296,241 
Total Waste Connections’ equity   1,985,200    5,550,734 
Noncontrolling interest in subsidiaries   6,584    6,987 
Total equity   1,991,784    5,557,721 
   $5,121,798   $11,093,552 

 

 - 5 - 

 

 

Waste Connections, Inc.

Condensed Consolidated Statements of Cash Flows

SIX months ended JUNE 30, 2015 and 2016

(Unaudited)

(Dollars in thousands)

 

   Six months ended 
   June 30, 
   2015   2016 
         
Cash flows from operating activities:        
Net income  $109,723   $72,737 
Adjustments to reconcile net income to net cash provided by operating activities:          
Loss (gain) on disposal of assets   (582)   509 
Depreciation   116,945    145,245 
Amortization of intangibles   14,263    21,775 
Foreign currency transaction gain   -    (689)
Deferred income taxes, net of acquisitions   14,725    25,363 
Amortization of debt issuance costs   1,777    2,842 
Share-based compensation   9,580    26,405 
Interest income on restricted assets   (215)   (246)
Interest accretion   3,704    3,629 
Excess tax benefit associated with equity-based compensation   (1,850)   (5,015)
Adjustments to contingent consideration   833    (2,495)
Payment of contingent consideration recorded in earnings   -    (132)
Net change in operating assets and liabilities, net of acquisitions   50,314    (30,282)
Net cash provided by operating activities   319,217    259,646 
           
Cash flows from investing activities:          
Payments for acquisitions, net of cash acquired   (91,724)   (12,541)
Cash acquired in the Progressive Waste acquisition   -    65,745 
Capital expenditures for property and equipment   (102,170)   (112,087)
Proceeds from disposal of assets   1,290    1,560 
Change in restricted assets, net of interest income   296    113 
Other   568    (696)
Net cash used in investing activities   (191,740)   (57,906)
           
Cash flows from financing activities:          
Proceeds from long-term debt   336,000    3,352,676 
Principal payments on notes payable and long-term debt   (381,226)   (3,461,005)
Payment of contingent consideration recorded at acquisition date   (190)   (4,109)
Change in book overdraft   (21)   1,998 
Proceeds from option and warrant exercises   417    - 
Excess tax benefit associated with equity-based compensation   1,850    5,015 
Payments for repurchase of common shares   (41,311)   - 
Payments for cash dividends   (32,203)   (35,585)
Tax withholdings related to net share settlements of restricted share units   (6,359)   (11,349)
Distributions to noncontrolling interests   (43)   (3)
Debt issuance costs   (3,120)   (12,941)
Proceeds from sale of common shares held in trust   -    8,436 
Net cash used in financing activities   (126,206)   (156,867)
           
Effect of exchange rate changes on cash and equivalents   -    (223)
           
Net increase in cash and equivalents   1,271    44,650 
Cash and equivalents at beginning of period   14,353    10,974 
Cash and equivalents at end of period  $15,624   $55,624 

 

 

 - 6 - 

 

 

ADDITIONAL STATISTICS

(Dollars in thousands)

 

 

Solid Waste Internal Growth: The following table reflects a breakdown of the components of our solid waste internal growth for the three months ended June 30, 2016:

 

   Three months ended
June 30, 2016
Solid Waste Internal Growth:   
Core Price  2.9%
Surcharges  (0.3%)
Volume  2.4%
Recycling  (0.1%)
Total Solid Waste Internal Growth  4.9%

 

 

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ending June 30, 2015 and 2016:

 

   Three Months Ended June 30, 2015 
   Revenue   Inter-
company
Elimination		   Reported
Revenue		   % 
Solid Waste Collection  $342,583   $(981)  $341,602    64.3%
Solid Waste Disposal and Transfer   171,932    (64,838)   107,094    20.1%
Solid Waste Recycling   12,332    (278)   12,054    2.3%
E&P Waste Treatment, Recovery and Disposal   55,851    (3,362)   52,489    9.9%
Intermodal and Other   18,073    -    18,073    3.4%
Total  $600,771   $(69,459)  $531,312    100.0%

 

   Three Months Ended June 30, 2016 
   Revenue   Inter-
company
Elimination		   Reported
Revenue		   % 
Solid Waste Collection  $502,948   $(1,778)  $501,170    68.9%
Solid Waste Disposal and Transfer   256,847    (96,815)   160,032    22.0%
Solid Waste Recycling   18,119    (1,393)   16,726    2.3%
E&P Waste Treatment, Recovery and Disposal   30,734    (3,253)   27,481    3.8%
Intermodal and Other   22,358    (128)   22,230    3.0%
Total  $831,006   $(103,367)  $727,639    100.0%

 

 

Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three month periods ending June 30, 2015 and 2016:

 

   Three months ended
June 30,		 
   2015   2016 
Solid waste, net  $6,199   $199,399 
E&P waste   5,161    - 
Acquisitions, net  $11,360   $199,399 

 

 

 - 7 - 

 

  

ADDITIONAL STATISTICS (continued)

 

 

Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three and six month periods ending June 30, 2015 and 2016:

 

   Three months ended
June 30,		   Six months ended
June 30,		 
   2015   2016   2015   2016 
Cash Interest Paid  $21,083   $19,736   $28,127   $35,993 
Cash Taxes Paid   32,072    16,013    32,535    16,914 

 

 

Debt to Book Capitalization as of June 30, 2016: 40%

 

 

Internalization for the three months ended June 30, 2016: 54%

 

 

Days Sales Outstanding for the three months ended June 30, 2016 pro forma for the Progressive Waste acquisition: 43 (31 net of deferred revenue)

 

 

Share Information for the three months ended June 30, 2016:

 

 

Basic shares outstanding 140,203,557
Dilutive effect of warrants 38,298
Dilutive effect of restricted share units 345,300
Diluted shares outstanding 140,587,155

 

 - 8 - 

 

 

NON-GAAP RECONCILIATION SCHEDULE

(in thousands)

 

 

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 the Company’s operations. Waste Connections defines adjusted EBITDA as net income, plus income tax provision, plus interest expense, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on other operating items, plus other expense, less other income, plus foreign currency transaction loss, less foreign currency transaction gain. The Company further adjusts this calculation to exclude the effects of other 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. Other companies may calculate adjusted EBITDA differently.

 

 

   Three months ended
June 30,		   Six months ended
June 30,		 
   2015   2016   2015   2016 
Net Income  $57,641   $27,720   $109,723   $72,737 
Plus: Income tax provision   37,153    15,265    71,020    44,265 
Plus: Interest expense   15,322    20,485    31,018    37,670 
Plus: Depreciation and amortization   66,903    98,429    131,208    167,020 
Plus: Closure and post-closure accretion   987    1,758    1,942    2,874 
Plus/less: Other operating items   (316)   (3,284)   346    (3,048)
Plus/less: Other expense (income), net   (92)   714    128    492 
Less: Foreign currency transaction gain   -    (689)   -    (689)
Adjustments:                    
Plus: Transaction-related expenses (a)   82    37,702    594    46,516 
Plus: Pre-existing Progressive Waste equity grants (b)   -    5,357    -    5,357 
Plus: Severance-related and other expenses (c)   -    30,122    -    30,122 
Adjusted EBITDA  $177,680   $233,579   $345,979   $403,316 
                     
As % of revenues   33.4%   32.1%   33.4%   32.5%
                     

____________________________________________

 

(a) Reflects the addback of acquisition-related transaction costs, including excise tax payments, primarily related to the Progressive Waste acquisition.

(b)

 

(c)

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

Reflects the addback of severance-related expenses and other items, including accelerated vesting of certain equity awards of both Old Waste Connections and Progressive Waste, in connection with the Progressive Waste acquisition.

 

 - 9 - 

 

 

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. 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. 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. 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
June 30,		   Six months ended
June 30,		 
   2015   2016   2015   2016 
Net cash provided by operating activities  $156,647   $94,930   $319,217   $259,646 
Plus/Less: Change in book overdraft   (47)   2,149    (21)   1,998 
Plus: Proceeds from disposal of assets   692    879    1,290    1,560 
Plus: Excess tax benefit associated with equity-based compensation   371    581    1,850    5,015 
Less: Capital expenditures for property and equipment   (60,464)   (55,512)   (102,170)   (112,087)
Less: Distributions to noncontrolling interests   -    -    (43)   (3)
Adjustments:                    
  Payment of contingent consideration recorded in earnings (a)   -    99    -    132 
  Transaction-related expenses (b)   -    71,067    -    72,042 
  Severance-related and other expenses (c)   -    24,529    -    24,529 
  Tax effect (d)        (18,038)        (18,410)
Adjusted free cash flow  $97,199   $120,684   $220,123   $234,422 
                     
As % of revenues   18.3%   16.6%   21.2%   18.9%

 

___________________________________________ 

(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 addback of acquisition-related transaction costs, including excise tax payments, primarily related to the Progressive Waste acquisition.
(c) Reflects the addback of severance-related payments.
(d) The aggregate tax effect of the adjustments in footnotes (a) through (c) is calculated based on the applied tax rates for the respective periods.

 

 - 10 - 

 

 

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 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 the Company’s 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 adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections differently.

 

 

   Three months ended
June 30,		   Six months ended
June 30,		 
   2015   2016   2015   2016 
Reported net income attributable to Waste Connections  $57,360   $27,489   $109,184   $72,331 
Adjustments:                    
Amortization of intangibles (a)   7,264    14,081    14,263    21,775 
Other operating items (b)   (316)   (3,284)   346    (3,048)
Transaction-related expenses (c)   -    37,702    -    46,516 
Pre-existing Progressive Waste equity grants (d)   -    5,357    -    5,357 
Severance-related and other expenses (e)   -    30,122    -    30,122 
Tax effect (f)   (2,665)   (18,257)   (5,602)   (24,629)
Adjusted net income attributable to Waste Connections  $61,643   $93,210   $118,191   $148,424 
                     
Diluted earnings per common share attributable to Waste Connections’ common shareholders:                    
Reported net income  $0.46   $0.20   $0.88   $0.55 
Adjusted net income  $0.50   $0.66   $0.95   $1.12 

______________________________________________

 

(a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.

(b)

(c)

Reflects the addback of other operating items.

Reflects the addback of acquisition-related transaction costs, including excise tax payments, primarily related to the Progressive Waste acquisition.

(d)

 

(e)

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

Reflects the addback of severance-related expenses and other items, including accelerated vesting of certain equity

(f)

 

awards of both Old Waste Connections and Progressive Waste, in connection with the Progressive Waste acquisition.

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

 

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