Exhibit 99.1

 

 

 

 

WASTE CONNECTIONS REPORTS THIRD QUARTER 2017 RESULTS

 

- Revenue of $1.206 billion, exceeding outlook

- Reports 3.8% solid waste price + volume growth, exceeding outlook

- 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, ONTARIO, October 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 26^th 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 –

 

 

CONTACT:

 

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

 

 

 

 

 

 

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

 

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(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.