WASTE CONNECTIONS REPORTS FOURTH QUARTER 2024 RESULTS AND PROVIDES 2025 OUTLOOK

Fourth Quarter and Full Year 2024 Highlights

• Strong finish to the year led by solid execution and accelerating improvement in operating trends in the fourth quarter, providing momentum for 2025
• Full year 2024 revenue of $8.920 billion, up 11.2% year over year
• Net income^(a) of $617.6 million, adjusted net income^(b) of $1.239 billion, and adjusted EBITDA^(b) of $2.902 billion, up 15.0%, and 32.5% of revenue, up 100 basis points year over year
• Net cash provided by operating activities of $2.229 billion and adjusted free cash flow^(b) of $1.218 billion
• Record year of private company acquisitions of approximately $750 million in annualized revenue

Expectations for 2025

• Revenue in the range of $9.45 billion to $9.60 billion
• Net income of $1.186 billion to $1.224 billion and adjusted EBITDA^(b) margin expansion of up to 80 basis points, or 33.3%
• Net cash provided by operating activities in the range of $2.500 billion to $2.575 billion and adjusted free cash flow^(b) of between $1.300 billion and $1.350 billion, or over $1.550 billion on a normalized basis
• Ongoing acquisition-related dialogue with strong pipeline, along with expectations for improving commodity-driven revenues, position for high end of range or above

TORONTO, Feb. 12, 2025 /PRNewswire/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the fourth quarter of 2024 and outlook for 2025.   

"Q4 provided a solid finish to a year of extraordinary accomplishments for Waste Connections both financially, with double-digit growth in both revenue and adjusted EBITDA^(b), and operationally, with accelerating improvements in employee engagement and retention, along with the integration of record levels of private company acquisition activity, which totaled approximately $750 million in annualized revenues in 2024," said Ronald J. Mittelstaedt, President and Chief Executive Officer.

"Our differentiated results in 2024 include 100 basis points adjusted EBITDA^(b) margin expansion for industry-leading margin of 32.5% led by 7% solid waste core price complemented by outsized acquisition contribution," added Mr. Mittelstaedt.  "Most importantly, our continued focus on human capital resulted in multi-year lows for employee turnover, now down over one thousand basis points from 2022, setting up for continued outsized margin expansion." 

Mr. Mittelstaedt concluded, "We are extremely pleased by our industry-leading results in 2024 driven by approximately 24,000 dedicated employees whose efforts truly set us apart as we continued to execute on a proven playbook. We are well-positioned for another year of outsized growth in 2025 from price-led organic solid waste growth, with improving commodities and ongoing acquisition activity positioning us at or above the high end of our range of potential outcomes and normalized adjusted free cash flow^(b) in excess of $1.550 billion.  With year-end leverage of less than 2.7 times, the strength of our balance sheet continues to provide tremendous optionality to fund outsized acquisition activity and invest in sustainability-related projects, along with an increasing return of capital to shareholders."

Q4 2024 Results

Revenue in the fourth quarter totaled $2.260 billion, up from $2.036 billion in the year ago period.  Operating loss was $199.2 million, which included $601.6 million in impairments primarily related to the early closure of a landfill and adjustments to landfill closure and post-closure costs, and $0.9 million from transaction-related expenses. This compares to operating income of $224.5 million in the fourth quarter of 2023, which included $172.5 million primarily in impairments associated with adjustments to landfill closure and post-closure costs and transaction-related expenses.  Net loss in the fourth quarter was $196.0 million, or $0.76 per share on a diluted basis of 258.8 million shares.  In the year ago period, the Company reported net income of $126.8 million, or $0.49 per share on a diluted basis of 258.3 million shares.   

Adjusted net income^(b) in the fourth quarter was $300.6 million, or $1.16 per diluted share, up from $285.5 million, or $1.11 per diluted share, in the prior year period.  Adjusted EBITDA^(b) in the fourth quarter was $731.9 million, as compared to $656.0 million in the prior year period.  Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-GAAP measures, primarily exclude impairments and transaction-related items, as reflected in the detailed reconciliations in the attached tables.

Full Year 2024 Results

For the year ended December 31, 2024, revenue was $8.920 billion, up from $8.022 billion in the year ago period.  Operating income was $1.068 billion, which included $613.0 million in impairments primarily related to the early closure of a landfill and closure and post-closure costs, $26.1 million in transaction-related expenses and $1.6 million in fair value changes to certain equity awards.  In the year ago period, operating income was $1.236 billion, which included $263.8 million primarily from impairments and other operating items attributable to landfill closure and post-closure costs, transaction-related expenses and executive separation costs.   

Net income for the year ended December 31, 2024 was $617.6 million, or $2.39 per share on a diluted basis of 258.7 million shares.  In the year ago period, the Company reported net income of $762.8 million, or $2.95 per share on a diluted basis of 258.1 million shares.  

Adjusted net income^(b) for the year ended December 31, 2024 was $1.239 billion, or $4.79 per diluted share, as compared to $1.081 billion, or $4.19 per diluted share, in the year ago period. Adjusted EBITDA^(b) for the year ended December 31, 2024 was $2.902 billion, up from $2.523 billion in the prior year period.

2025 Outlook

Waste Connections also announced its outlook for 2025, which assumes no change in the current economic environment.  The Company's outlook excludes expensing of transaction-related items.  The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Certain components of the outlook for 2025 are subject to quarterly fluctuations.  See reconciliations in the attached tables.

• Revenue is estimated between $9.450 billion and $9.600 billion;
• Net income is estimated between $1.186 billion and $1.224 billion;
• Adjusted EBITDA^(b) margin is estimated between 33.0% and 33.3% of revenue, up 50 to 80 basis points year over year;
• Net cash provided by operating activities is estimated between $2.500 billion and $2.575 billion;
• Capital expenditures are estimated to be between $1.200 billion and $1.225 billion, including $100 million to $150 million for RNG facilities; and
• Adjusted free cash flow^(b) is estimated between $1.300 billion and $1.350 billion.

Q4 2024 Earnings Conference Call

Waste Connections will be hosting a conference call related to fourth quarter earnings on February 13^th at 8:30 A.M. Eastern Time.  A live audio webcast of the conference call can be accessed by visiting investors.wasteconnections.com and selecting "News & Events" from the website menu. Alternatively, conference call participants can preregister by clicking here.  Registered participants will receive dial-in instructions and a personalized code for entry to the conference call.  A replay of the conference call will be available until February 20, 2025, by calling 877-344-7529 (within North America) or 412-317-0088 (international) and entering Passcode #2431085.

Waste Connections will be filing a Form 8-K on EDGAR and on SEDAR (as an "Other" document) prior to markets opening on February 13^th, providing the Company's first quarter 2025 outlook for revenue and adjusted EBITDA^(b).

About Waste Connections

Waste Connections (wasteconnections.com) is an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation. The Company serves approximately nine million residential, commercial and industrial customers in mostly exclusive and secondary markets across 46 states in the U.S. and six provinces in Canada. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S. and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. Waste Connections views its Environmental, Social and Governance ("ESG") efforts as integral to its business, with initiatives consistent with its objective of long-term value creation and focused on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety and enhancing employee engagement. Visit wasteconnections.com/sustainability for more information and updates on our progress towards targeted achievement.

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"), including "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," "estimate," "continue," "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 2025 financial results, outlook and related assumptions, and potential acquisition activity. 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 the Company's filings with the SEC 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 –

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 and twelve month periods ended December 31, 2024:

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended December 31, 2023 and 2024: 

Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three and twelve month periods ended December 31, 2023 and 2024:

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 twelve month periods ended December 31, 2023 and 2024:

Debt to Book Capitalization as of December 31, 2024:  51%

Internalization for the three months ended December 31, 2024:  58%

Days Sales Outstanding for the three months ended December 31, 2024:  38 (22 net of deferred revenue)

Share Information for the three months ended December 31, 2024:

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 or minus net income (loss) attributable to noncontrolling interests, plus income tax provision, 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.  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. 

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 liquidity measure in the solid waste industry.  Waste Connections calculates adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment.  Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to evaluate the liquidity of its business operations.  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.

NON-GAAP RECONCILIATION SCHEDULE (continued)
 (in thousands of U.S. dollars, except per share amounts)

Reconciliation of 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. 

SOURCE Waste Connections, Inc.