Waste Connections Reports Third Quarter 2016 Results - Revenue of $1.085 billion, exceeding outlook

- Reports 3.7% solid waste core price + volume growth

- Net income attributable to Waste Connections of $88.6 million, or $0.50 per share

- Adjusted net income* of $126.5 million, or $0.72 per share

- Adjusted EBITDA* of $342.3 million, or 31.6% of revenue, exceeding outlook

- Net cash provided by operating activities of $279.2 million

- Adjusted free cash flow* of $205.8 million, or 19.0% of revenue

- Increases regular quarterly cash dividend by 24.1%

TORONTO, Oct. 26, 2016 /CNW/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the third quarter of 2016.  Revenue in the third quarter, which included $513.1 million from the Progressive Waste acquisition completed on June 1, 2016, was $1.085 billion, as compared to revenue of $547.9 million in the year ago period.  Operating income, which included $20.3 million of items primarily related to the Progressive Waste acquisition, was $158.7 million, as compared to a loss of $375.2 million in the third quarter of 2015, which included net impairment charges of approximately $493.4 million associated with the Company's E&P segment.

Net income attributable to Waste Connections in the third quarter was $88.6 million, or $0.50 per share on a diluted basis of 175.8 million shares.  In the year ago period, the Company reported net loss attributable to Waste Connections of $257.0 million, or $2.08 per share on a diluted basis of 123.3 million shares.

Adjusted net income attributable to Waste Connections* in the third quarter was $126.5 million, or $0.72 per share, versus $66.5 million, or $0.54 per share, in the prior year period.  Adjusted EBITDA* in the quarter was $342.3 million, as compared to adjusted EBITDA* of $189.0 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 and impairments and other operating items, as reflected in the detailed reconciliation in the attached tables.

"Our results continue to track at or above the increased expectations we communicated in August, and we are extremely pleased that safety, pricing and operational improvements within recently acquired operations continue ahead of schedule," said Ronald J. Mittelstaedt, Chief Executive Officer and Chairman.  "Adjusted free cash flow remains notably strong at $205.8 million in the period, which reflects the first full quarter of combined operations since completing the Progressive Waste acquisition, and $440.3 million year-to-date, or 18.9% of revenue."

Mr. Mittelstaedt added, "Our strong free cash flow profile following the Progressive Waste acquisition positioned us for an outsized double-digit percentage increase in our quarterly cash dividend, while maintaining a payout ratio at less than 20% of expected annual free cash flow.  This financial strength and flexibility, together with our expanded footprint following the acquisition, keep us well positioned to execute our growth strategy at a time when acquisition dialogue is near record high levels, while increasing our return of capital to shareholders." 

For the nine months ended September 30, 2016 revenue was $2.33 billion, as compared to revenue of $1.59 billion in the year ago period.  Operating income, which included $102.0 million of items related to the Progressive Waste acquisition, was $313.1 million compared to a loss of $163.3 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 nine months ended September 30, 2016, was $160.9 million, or $1.10 per share on a diluted basis of 146.7 million shares.  In the year ago period, the Company reported net loss attributable to Waste Connections of $147.8 million, or $1.19 per share on a diluted basis of 123.8 million shares. 

Adjusted net income attributable to Waste Connections* for the nine months ended September 30, 2016, was $274.9 million, or $1.87 per share, compared to $185.1 million, or $1.49 per share, in the year ago period. Adjusted EBITDA* for the nine months ended September 30, 2016, was $745.6 million, as compared to $535.0 million in the prior year period. 

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

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. 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 return of capital to shareholders 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 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 (LOSS)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2016

(Unaudited)

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



Three months ended

September 30,


Nine months ended

September 30,


2015


2016


2015


2016









Revenues

$     547,938


$    1,084,922


$ 1,585,350


$ 2,327,241

Operating expenses:








Cost of operations

300,910


636,310


879,470


1,339,764

Selling, general and administrative

59,799


129,576


175,208


349,995

Depreciation

61,373


125,744


178,318


270,988

Amortization of intangibles

7,195


26,944


21,458


48,719

Impairments and other operating items

493,813


7,682


494,158


4,634

Operating income (loss)

(375,152)


158,666


(163,262)


313,141









Interest expense

(16,367)


(27,621)


(47,386)


(65,291)

Other income (expense), net

(1,303)


671


(1,430)


179

Foreign currency transaction gain (loss)

-


(350)


-


339

Income (loss) before income tax provision

(392,822)


131,366


(212,078)


248,368









Income tax (provision) benefit

136,017


(42,485)


64,996


(86,750)

Net income (loss)

(256,805)


88,881


(147,082)


161,618

Less: net income attributable to noncontrolling   interests

(204)


(264)


(743)


(670)

Net income (loss) attributable to Waste Connections

$    (257,009)


$      88,617


$  (147,825)


$     160,948









Earnings (loss) per common share attributable to Waste Connections' common shareholders:








Basic

$          (2.08)


$          0.51


$        (1.19)


$          1.10









Diluted

$          (2.08)


$          0.50


$        (1.19)


$           1.10









Shares used in the per share calculations:








Basic

123,269,902


175,336,967


123,783,217


146,214,552

Diluted

123,269,902


175,766,759


123,783,217


146,709,780









Cash dividends per common share

$         0.13


$       0.145


$           0.39


$          0.435

 


WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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




December 31,
2015


September 30,
2016

ASSETS







Current assets:







Cash and equivalents


$

10,974


$

119,335

Accounts receivable, net of allowance for doubtful accounts of $7,738 and  $14,033 at December 31, 2015 and September 30, 2016, respectively



255,192



498,291

Deferred income taxes



49,727



82,547

Prepaid expenses and other current assets



46,534



84,460

Total current assets



362,427



784,633








Property and equipment, net



2,738,288



4,773,096

Goodwill



1,422,825



4,351,170

Intangible assets, net



511,294



1,164,308

Restricted assets



46,232



63,314

Other assets, net



40,732



51,172



$

5,121,798


$

11,187,693

LIABILITIES AND EQUITY







Current liabilities:







Accounts payable


$

115,206


$

247,295

Book overdraft



12,357



18,363

Accrued liabilities



136,018



266,906

Deferred revenue



90,349



130,724

Current portion of contingent consideration



22,217



24,338

Current portion of long-term debt and notes payable



2,127



1,624

      Total current liabilities



378,274



689,250








Long-term debt and notes payable



2,147,127



3,661,971

Long-term portion of contingent consideration



27,177



27,351

Other long-term liabilities



124,943



329,058

Deferred income taxes



452,493



858,697

      Total liabilities



3,130,014



5,566,327








Commitments and contingencies














Equity:







Common shares:  122,375,955 and  175,140,948 shares issued and outstanding at December 31, 2015 and September 30, 2016, respectively



1,224



4,170,279

Additional paid-in capital



736,652



97,418

Accumulated other comprehensive loss



(12,171)



(13,024)

Treasury shares: 0 shares and 284,739 shares at December 31, 2015 and September 30, 2016, respectively



-



-

Retained earnings



1,259,495



1,359,442

      Total Waste Connections' equity



1,985,200



5,614,115

Noncontrolling interest in subsidiaries



6,584



7,251

      Total equity



1,991,784



5,621,366



$

5,121,798


$

11,187,693









 


WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2016

(Unaudited)

(in thousands of U.S. dollars)



Nine months ended


September 30,


2015


2016









Cash flows from operating activities:




Net income (loss)

$

(147,082)


$

161,618

Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Loss on disposal of assets and impairments

513,872


3,572

Depreciation

178,318


270,988

Amortization of intangibles

21,458


48,719

Foreign currency transaction gain

-


(339)

Deferred income taxes, net of acquisitions

(161,811)


35,968

Amortization of debt issuance costs

2,428


3,877

Share-based compensation

14,433


35,476

Interest income on restricted assets

(319)


(366)

Interest accretion

5,346


7,038

Excess tax benefit associated with equity-based compensation

(1,986)


(5,151)

Adjustments to contingent consideration

(19,809)


(2,563)

Payment of contingent consideration recorded in earnings

-


(413)

Net change in operating assets and liabilities, net of acquisitions

58,480


(19,593)

Net cash provided by operating activities

463,328


538,831





Cash flows from investing activities:




Payments for acquisitions, net of cash acquired

(112,090)


(13,703)

Cash acquired in the Progressive Waste acquisition

-


65,739

Capital expenditures for property and equipment

(168,379)


(204,934)

Proceeds from disposal of assets

1,676


3,026

Change in restricted assets, net of interest income

(367)


(188)

Other

2,163


(2,987)

Net cash used in investing activities

(276,997)


(153,047)





Cash flows from financing activities:




Proceeds from long-term debt

914,500


3,407,359

Principal payments on notes payable and long-term debt

(941,440)


(3,612,763)

Payment of contingent consideration recorded at acquisition date

(190)


(12,105)

Change in book overdraft

65


6,050

Proceeds from option and warrant exercises

494


-

Excess tax benefit associated with equity-based compensation

1,986


5,151

Payments for repurchase of common shares

(91,165)


-

Payments for cash dividends

(48,246)


(61,001)

Tax withholdings related to net share settlements of restricted share units

(6,441)


(11,461)

Distributions to noncontrolling interests

(43)


(3)

Debt issuance costs

(6,651)


(13,508)

Proceeds from sale of common shares held in trust

-


15,341

Net cash used in financing activities

(177,131)


(276,940)





Effect of exchange rate changes on cash and equivalents

-


(483)





Net increase in cash and equivalents

9,200


108,361

Cash and equivalents at beginning of period

14,353


10,974

Cash and equivalents at end of period

$

23,553


$

119,335

 

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, 2016:


Three months ended

September 30, 2016

Solid Waste Internal Growth:


  Core Price

2.6%

  Surcharges

(0.3%)

  Volume

1.1%

  Recycling

0.4%

Total Solid Waste Internal Growth

3.8%

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


Three Months Ended September 30, 2015



Revenue



Inter-company Elimination



Reported

Revenue


%

Solid Waste Collection

$

354,490


$

(1,250)


$

353,240


64.5%

Solid Waste Disposal and Transfer


180,442



(66,322)



114,120


20.8%

Solid Waste Recycling


12,213



(155)



12,058


2.2%

E&P Waste Treatment, Recovery and Disposal


54,695



(3,519)



51,176


9.3%

Intermodal and Other


17,344



-



17,344


3.2%

Total

$

619,184


$

(71,246)


$

547,938


100.0%













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%












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


Three months ended

September 30,


2015


2016

Solid waste, net

$

6,035


$

538,398

E&P waste


5,609



-


Acquisitions, net

$

11,644


$

538,398

 

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 ending September 30, 2015 and 2016:


Three months ended

September 30,



Nine months ended

 September 30,


2015


2016



2015


2016

Cash Interest Paid

$

6,075


$

20,246



$

34,202


$

56,238

Cash Taxes Paid


48,048



19,590




80,584



36,504

Debt to Book Capitalization as of September 30, 2016:  39%

Internalization for the three months ended September 30, 2016:  52%

Days Sales Outstanding for the three months ended September 30, 2016: 42 (31 net of deferred revenue)

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

Basic shares outstanding

175,336,967

Dilutive effect of warrants

39,006

Dilutive effect of restricted share units

390,786

Diluted shares outstanding

175,766,759

 

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 the Company's operations.  Waste Connections defines adjusted EBITDA as net income (loss), plus or minus income tax provision (benefit), plus interest expense, 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.  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

September 30,


Nine months ended

September 30,


2015


2016


2015


2016

Net Income (loss)

$

(256,805)


$

88,881


$

(147,082)


$

161,618

Plus: Income tax provision (benefit)


(136,017)



42,485



(64,996)



86,750

Plus: Interest expense


16,367



27,621



47,386



65,291

Plus: Depreciation and amortization


68,568



152,688



199,776



319,707

Plus: Closure and post-closure accretion


978



3,034



2,920



5,908

Plus/less: Impairments and other operating items


493,813



7,682



494,158



4,634

Plus/less: Other expense (income), net


1,303



(671)



1,430



(179)

Plus/less: Foreign currency transaction loss (gain)


-



350



-



(339)

Adjustments:












Plus: Transaction-related expenses (a)


777



310



1,372



46,827

Plus: Pre-existing Progressive Waste equity grants (b)


-



4,466



-



9,823

Plus: Severance-related and other expenses (c)


-



10,178



-



40,300

Plus: Synergy bonus (d)


-



5,300



-



5,300

Adjusted EBITDA

$

188,984


$

342,324


$

534,964


$

745,640













As % of revenues


34.5%



31.6%



33.7%



32.0%













____________________________________________


(a)

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

(b)

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.

(c)

Reflects the addback of severance-related expenses and other items, including certain professional fees, in connection 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 a principal measure 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

September 30,


Nine months ended

September 30,



2015


2016


2015


2016

Net cash provided by operating activities


$

144,110


$

279,184


$

463,328


$

538,831

Plus/Less: Change in book overdraft



87



4,053



65



6,050

Plus: Proceeds from disposal of assets



386



1,466



1,676



3,026

Plus: Excess tax benefit associated with equity-based compensation



136



136



1,986



5,151

Less: Capital expenditures for property and equipment



(66,209)



(92,847)



(168,379)



(204,934)

Less: Distributions to noncontrolling interests



-



-



(43)



(3)

Adjustments:













    Payment of contingent consideration recorded in earnings (a)



-



281



-



413

    Transaction-related expenses (b)



-



6,480



-



41,748

    Severance-related and other expenses (c)



-



17,219



-



78,521

    Tax effect (d)






(10,128)






(28,537)

Adjusted free cash flow


$

78,510


$

205,844


$

298,633


$

440,266














As % of revenues



14.3%



19.0%



18.8%



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 related to the Progressive Waste acquisition.

(c)

Reflects the addback of severance-related expenses and other items, including certain professional fees, in connection with the Progressive Waste acquisition.

(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.



NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of U.S. dollars, 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 these non-GAAP financial measures differently. 


Three months ended

September 30,


Nine months ended

September 30,


2015


2016


2015


2016

Reported net income (loss) attributable to Waste Connections

$

(257,009)


$

88,617


$

(147,825)


$

160,948

Adjustments:












    Amortization of intangibles (a)


7,195



26,944



21,458



48,719

     Impairments and other operating items (b)


493,813



7,682



494,158



4,634

    Transaction-related expenses (c)


777



310



1,372



46,827

     Pre-existing Progressive Waste equity grants (d)


-



4,466



-



9,823

Severance-related and other expenses (e)


-



10,178



-



40,300

Synergy bonus (f)


-



5,300



-



5,300

Tax effect (g)


(174,053)



(19,001)



(179,883)



(43,630)

Impact of deferred tax adjustment (h)


(4,198)



1,964



(4,198)



1,964

Adjusted net income attributable to Waste Connections

$

66,525


$

126,460


$

185,082


$

274,885













Diluted earnings (loss) per common share attributable to Waste Connections' common shareholders:












     Reported net income (loss)

$

(2.08)


$

0.50


$

(1.19)


$

1.10

Adjusted net income

$

0.54


$

0.72


$

1.49


$

1.87













Shares used in the per share calculations:












Reported diluted shares


123,269,902



175,766,759



123,783,217



146,709,780

Adjusted diluted shares (i)


123,644,825



175,766,759



124,118,811



146,709,780













__________________________________________

(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, including excise tax payments related to the Progressive Waste acquisition.

(d) 

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.

(e)

Reflects the addback of severance-related expenses and other items, including certain professional fees, in connection 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 the elimination in 2015 of the increase to the income tax benefit primarily associated with a decrease in our deferred tax liabilities resulting from the impairment of assets in our E&P segment that impacted the geographical apportionment of our state income taxes.  In 2016, reflects a change in the geographical apportionment of our deferred tax liabilities resulting from the Progressive Waste acquisition.

(i) 

Reflects reported diluted shares adjusted for shares that were excluded from the reported diluted shares calculation due to our reporting a net loss during the three and nine months ended September 30, 2015.

 

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SOURCE Waste Connections, Inc.


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