SOURCE: Waste Connections, Inc.

Waste Connections, Inc.

July 23, 2013 16:05 ET

Waste Connections Reports Second Quarter 2013 Results

THE WOODLANDS, TX--(Marketwired - Jul 23, 2013) - Waste Connections, Inc. (NYSE: WCN)

  • Revenue of $489.4 million, up 19.1%
  • Double digit increase in landfill volumes drives positive organic volume growth
  • Adjusted EBITDA* of $169.4 million, or 34.6% of revenue, up 28.7%
  • GAAP EPS of $0.35 and adjusted EPS* of $0.47, up 20.5%
  • YTD net cash provided by operating activities of $255.5 million
  • YTD adjusted free cash flow* increases 18.4% to $175.7 million, or 18.7% of revenue

Waste Connections, Inc. (NYSE: WCN) today announced its results for the second quarter of 2013. Revenue totaled $489.4 million, a 19.1% increase over revenue of $410.7 million in the year ago period. Operating income was $93.1 million compared to $81.7 million in the second quarter of 2012. Operating income in the current year period included approximately $13.9 million ($8.6 million net of taxes) associated with both the loss on the Company's prior corporate office lease resulting from the relocation of our corporate headquarters from California to Texas, and a loss on disposal of assets. Adjusted EBITDA* in the second quarter of 2013 was $169.4 million, up 28.7% over adjusted EBITDA* of $131.5 million in the prior year period. Adjusted EBITDA, a non-GAAP measure, excludes the impact of items such as acquisition-related costs and expenses incurred in connection with the relocation of our corporate headquarters from California to Texas, as shown in the detailed reconciliation in the attached table.

Net income attributable to Waste Connections in the quarter was $44.0 million, or $0.35 per share on a diluted basis of 124.1 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $42.4 million, or $0.34 per share on a diluted basis of 124.0 million shares.

Adjusted net income attributable to Waste Connections* in the quarter was $57.8 million or $0.47 per share versus $48.2 million, or $0.39 per share, in the prior year period. Adjusted net income and adjusted net income per diluted share, both non-GAAP measures, primarily exclude the impact of acquisition-related items such as amortization of intangibles and acquisition-related expenses, as well as both the loss on our prior corporate lease and expenses incurred in connection with the relocation of our corporate headquarters from California to Texas, all net of tax, as shown in the detailed reconciliation in the attached table.

"Favorable solid waste trends experienced earlier this year accelerated during the second quarter, resulting in revenue, adjusted EBITDA, and adjusted free cash flow all exceeding our expectations. Our solid waste business continues to benefit from an improving economy, with municipal solid waste volumes at our landfills showing the strongest year over year increases in several years, up approximately 14% in the second quarter. In addition, E&P waste activity played out about as expected in the period despite unusually wet weather in the Bakken," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer.

Mr. Mittelstaedt added, "Free cash flow generation remains a hallmark of our differentiated strategy and a primary driver of shareholder value creation. As a result of our strong free cash flow during the first half of the year, we expect to pull forward up to $10 million of next year's CNG fleet purchases into the latter part of this year to take advantage of cash tax benefits from bonus depreciation. In addition, we expect to commence construction of a new E&P waste landfill in the West Texas Permian, which should provide incremental growth into 2014."

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

For the six months ended June 30, 2013, revenue was $939.3 million, a 19.3% increase over revenue of $787.2 million in the year ago period. Operating income was $180.0 million compared to $146.8 million for the same period in 2012. Adjusted EBITDA* for the six months ended June 30, 2013, was $315.4 million, up 27.3% over adjusted EBITDA* of $247.8 million in the prior year period. Net income attributable to Waste Connections for the six months ended June 30, 2013, was $85.5 million, or $0.69 per share on a diluted basis of 124.0 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $73.7 million, or $0.61 per share on a diluted basis of 120.0 million shares. Adjusted net income attributable to Waste Connections* for the six months ended June 30, 2013, was $103.5 million, or $0.84 per share, compared to $88.9 million, or $0.74 per share, in the year ago period.

Waste Connections, Inc. is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets. Through its R360 Environmental Solutions subsidiary, the Company also is a leading provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the United States, including the Permian, Bakken and Eagle Ford Basins. Waste Connections serves more than two million residential, commercial, industrial, and exploration and production customers from a network of operations in 31 states. The Company also provides intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in The Woodlands, Texas.

Waste Connections will be hosting a conference call related to second quarter earnings and third quarter outlook on July 24th  at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com or through a link on our website at www.wasteconnections.com. A playback of the call will be available at both of these websites.

For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections website or through contacting us directly at (832) 442-2200.

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

Information Regarding Forward-Looking Statements

Certain statements contained in this release are forward-looking in nature, including statements related to: economic trends and the impact of such trends on our business, expectations with respect to waste volume growth, expectations with respect to E&P waste activity, the timing of completion of the integration of R360 into our business, and the timing and cost of CNG fleet purchases. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy. Factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) our acquisitions may not be successful, which may reduce the anticipated benefit from acquired businesses; (2) a portion of our growth and future financial performance depends on our ability to integrate acquired businesses into our organization and operations; (3) our indebtedness could adversely affect our financial condition and limit our financial flexibility; (4) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions; (5) our industry is highly competitive and includes larger and better capitalized companies, companies with lower prices, return expectations or other advantages, and governmental service providers, which could adversely affect our ability to compete and our operating results; (6) we may lose contracts through competitive bidding, early termination or governmental action; (7) price increases may not be adequate to offset the impact of increased costs or may cause us to lose volume; (8) economic downturns adversely affect operating results; (9) our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate; (10) the E&P waste disposal business depends on oil and gas prices and the level of drilling and production activity in the basins in which we operate;(11) we have limited experience in running an E&P waste treatment, recovery and disposal business; (12) our E&P waste business is dependent upon the willingness of our customers to outsource their waste management activities; (13) changes in laws or government regulations regarding hydraulic fracturing could increase our customers' costs of doing business and reduce oil and gas production by our customers, which could adversely impact our business; (14) our E&P waste business could be adversely affected by changes in laws regulating E&P waste; (15) we may be subject in the normal course of business to judicial, administrative or other third party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity; (16) increases in the price of diesel fuel may adversely affect our collection business and reduce our operating margins; (17) increases in labor and disposal and related transportation costs could impact our financial results; (18) efforts by labor unions could divert management attention and adversely affect operating results; (19) we could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate and the accrued pension benefits are not fully funded; (20) increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings; (21) each business that we acquire or have acquired may have liabilities or risks that we fail or are unable to discover, including environmental liabilities; (22) liabilities for environmental damage may adversely affect our financial condition, business and earnings; (23) our accruals for our landfill site closure and post-closure costs may be inadequate; (24) the financial soundness of our customers could affect our business and operating results; (25) we depend significantly on the services of the members of our senior, regional and district management team, and the departure of any of those persons could cause our operating results to suffer; (26) our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results; (27) we may incur charges related to capitalized expenditures of landfill development projects, which would decrease our earnings; (28) because we depend on railroads for our intermodal operations, our operating results and financial condition are likely to be adversely affected by any reduction or deterioration in rail service; (29) our financial results could be adversely affected by impairments of goodwill or indefinite-lived intangibles; (30) our financial results are based upon estimates and assumptions that may differ from actual results; (31) the adoption of new accounting standards or interpretations could adversely affect our financial results; (32) pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements; and (33) if we are not able to develop and protect intellectual property, or if a competitor develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

 
    WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2013
(Unaudited)
(in thousands, except share and per share amounts)
           
    Three months ended
June 30,
  Six months ended
June 30,
 
    2012   2013   2012   2013  
                           
Revenues   $ 410,731   $ 489,381   $ 787,161   $ 939,272  
Operating expenses:                          
  Cost of operations     238,427     268,484     455,107     520,447  
  Selling, general and administrative     44,747     52,903     95,922     106,154  
  Depreciation     39,846     54,766     77,018     106,414  
  Amortization of intangibles     6,217     6,211     11,849     12,650  
  Loss (gain) on disposal of assets     (243 )   3,445     472     3,122  
  Loss on prior corporate office lease     -     10,498     -     10,498  
Operating income     81,737     93,074     146,793     179,987  
                           
Interest expense     (11,829 )   (18,928 )   (24,114 )   (37,940 )
Other income (expense), net     20     (1,706 )   838     (965 )
Income before income tax provision     69,928     72,440     123,517     141,082  
                           
Income tax provision     (27,413 )   (28,445 )   (49,564 )   (55,408 )
Net income     42,515     43,995     73,953     85,674  
Less: net income attributable to noncontrolling interests     (100 )   (28 )   (234 )   (151 )
Net income attributable to Waste Connections   $ 42,415   $ 43,967   $ 73,719   $ 85,523  
                           
Earnings per common share attributable to Waste Connections' common stockholders:                          
  Basic   $ 0.34   $ 0.36   $ 0.62   $ 0.69  
                           
  Diluted   $ 0.34   $ 0.35   $ 0.61   $ 0.69  
                           
Shares used in the per share calculations:                          
  Basic     123,466,890     123,610,969     119,327,512     123,496,519  
  Diluted     124,027,617     124,080,423     119,952,039     123,993,311  
                           
Cash dividends per common share   $ 0.09   $ 0.10   $ 0.18   $ 0.20  
                           
                           
 
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
             
    December 31,     June 30,  
    2012     2013  
ASSETS                
Current assets:                
  Cash and equivalents   $ 23,212     $ 16,212  
  Accounts receivable, net of allowance for doubtful accounts of $6,548 and $5,915 at December 31, 2012 and June 30, 2013, respectively     235,762       240,557  
  Deferred income taxes     45,798       45,005  
  Prepaid expenses and other current assets     57,714       30,967  
    Total current assets     362,486       332,741  
                 
Property and equipment, net     2,457,606       2,427,985  
Goodwill     1,636,557       1,638,160  
Intangible assets, net     541,908       527,149  
Restricted assets     34,889       35,166  
Other assets, net     42,580       43,327  
    $ 5,076,026     $ 5,004,528  
                 
LIABILITIES AND EQUITY                
Current liabilities:                
  Accounts payable   $ 130,260     $ 120,503  
  Book overdraft     12,567       12,477  
  Accrued liabilities     121,829       127,177  
  Deferred revenue     69,930       71,049  
  Current portion of contingent consideration     49,018       56,856  
  Current portion of long-term debt and notes payable     33,968       55,319  
    Total current liabilities     417,572       443,381  
                 
Long-term debt and notes payable     2,204,967       2,020,384  
Long-term portion of contingent consideration     30,346       24,847  
Other long-term liabilities     75,129       82,153  
Deferred income taxes     464,882       480,853  
    Total liabilities     3,192,896       3,051,618  
                 
Commitments and contingencies                
                 
Equity:                
Preferred stock: $0.01 par value; 7,500,000 shares authorized; none issued and outstanding    
 -
     
-
 
Common stock: $0.01 par value; 250,000,000 shares authorized; 123,019,494 and 123,472,760 shares issued and outstanding at December 31, 2012 and June 30, 2013, respectively     1,230      
1,235
 
Additional paid-in capital     779,904       785,980  
Accumulated other comprehensive loss     (6,165 )     (3,288 )
Retained earnings     1,103,188       1,164,057  
    Total Waste Connections' equity     1,878,157       1,947,984  
Noncontrolling interest in subsidiaries     4,973       4,926  
    Total equity     1,883,130       1,952,910  
    $ 5,076,026     $ 5,004,528  
                 
                 
 
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2012 AND 2013
(Unaudited)
(Dollars in thousands)
       
    Six months ended  
    June 30,  
    2012     2013  
                 
                 
Cash flows from operating activities:                
Net income   $ 73,953     $ 85,674  
Adjustments to reconcile net income to net cash provided by operating activities                
  Loss on disposal of assets     472       3,122  
  Depreciation     77,018       106,414  
  Amortization of intangibles     11,849       12,650  
  Deferred income taxes, net of acquisitions     12,629       14,990  
  Amortization of debt issuance costs     831       2,016  
  Equity-based compensation     10,821       7,446  
  Interest income on restricted assets     (212 )     (196 )
  Interest accretion     1,750       2,533  
  Excess tax benefit associated with equity-based compensation     (3,283 )     (2,667 )
  Loss on prior corporate office lease     -       10,498  
  Net change in operating assets and liabilities, net of acquisitions     19,112       13,043  
Net cash provided by operating activities     204,940       255,523  
                 
Cash flows from investing activities:                
  Payments for acquisitions, net of cash acquired     (150,222 )     (1,181 )
  Proceeds from adjustment to acquisition consideration     -       18,000  
  Capital expenditures for property and equipment     (67,445 )     (87,541 )
  Proceeds from disposal of assets     1,497       3,622  
  Increase in restricted assets, net of interest income     (577 )     (81 )
  Other     (5,666 )     (1,140 )
Net cash used in investing activities     (222,413 )     (68,321 )
                 
Cash flows from financing activities:                
  Proceeds from long-term debt     334,000       93,500  
  Principal payments on notes payable and long-term debt     (530,551 )     (256,732 )
  Payment of contingent consideration     (3,849 )     (2,743 )
  Change in book overdraft     136       (90 )
  Proceeds from option and warrant exercises     851       1,330  
  Excess tax benefit associated with equity-based compensation     3,283       2,667  
  Payments for repurchase of common stock     (5,233 )     -  
  Payments for cash dividends     (21,122 )     (24,654 )
  Tax withholdings related to net share settlements of restricted stock units     (6,010 )     (5,362 )
  Distributions to noncontrolling interests     (94 )     (198 )
  Debt issuance costs     (20 )     (1,920 )
  Proceeds from common stock offering, net     369,584       -  
Net cash provided by (used in) financing activities     140,975       (194,202 )
                 
Net increase (decrease) in cash and equivalents     123,502       (7,000 )
Cash and equivalents at beginning of period     12,643       23,212  
Cash and equivalents at end of period   $ 136,145     $ 16,212  
                 
                 
 
ADDITIONAL STATISTICS
THREE AND SIX MONTHS ENDED JUNE 30, 2013
(Dollars in thousands)
 

Revenue Growth: The following table reflects changes in our revenue for the three months ended June 30, 2013:

       
    Three months ended
June 30, 2013
 
Solid Waste Internal Growth:      
  Core Price   2.6 %
  Surcharges   0.2 %
  Volume   0.9 %
  Recycling   (0.8 %)
Total Solid Waste Internal Growth   2.9 %
Intermodal and Other   (0.5 %)
Acquisitions, net   16.7 %
  Total   19.1 %
         

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three and six month periods ending June 30, 2013:

             
    Three months ended
June 30, 2013
    Six months ended
June 30, 2013
 
Solid Waste Collection   $ 306,472     55.1 %   $ 599,616     56.4 %
Solid Waste Disposal and Transfer     153,600     27.6 %     276,371     26.0 %
E&P Waste Treatment, Disposal and Recovery     66,183     11.9 %     126,115     11.9 %
Solid Waste Recycling     18,610     3.4 %     37,404     3.5 %
Intermodal and Other     11,255     2.0 %     23,373     2.2 %
Total before inter-company elimination     556,120     100.0 %     1,062,879     100.0 %
                             
Inter-company elimination     (66,739 )           (123,607 )      
  Reported Revenue   $ 489,381           $ 939,272        
                               

Days Sales Outstanding for the three months ended June 30, 2013: 45 (32 net of deferred revenue)

Internalization for the three months ended June 30, 2013: 54%

Other Cash Flow Items:

         
    Three months ended
June 30, 2013
  Six months ended
June 30, 2013
Cash Interest Paid   $ 24,106   $ 33,901
Cash Taxes Paid   $ 17,641   $ 18,340
             

Debt to Book Capitalization as of June 30, 2013: 52%

Share Information for the three months ended June 30, 2013:

     
Basic shares outstanding   123,610,969
Dilutive effect of options and warrants   191,872
Dilutive effect of restricted stock units   277,582
Diluted shares outstanding   124,080,423
     
     
 
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 income before 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 disposal of assets, plus other expense, less other income. The Company further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted EBITDA differently. 

             
    Three months ended
June 30, 2012
    Three months ended
June 30, 2013
 
Income before income tax provision   $ 69,928     $ 72,440  
Plus: Interest expense     11,829       18,928  
Plus: Depreciation and amortization     46,063       60,977  
Plus: Closure and post-closure accretion     612       753  
Plus/less: Loss (gain) on disposal of assets     (243 )     3,445  
Plus/less: Other expense (income), net     (20 )     1,706  
Adjustments:                
  Plus: Loss on prior corporate office lease (a)     -       10,498  
  Plus: Acquisition-related costs (b)     382       333  
  Plus: Corporate relocation expenses (c)     2,990       270  
Adjusted EBITDA   $ 131,541     $ 169,350  
                 
As % of revenues     32.0 %     34.6 %
             
    Six months ended
June 30, 2012
    Six months ended
June 30, 2013
 
Income before income tax provision   $ 123,517     $ 141,082  
Plus: Interest expense     24,114       37,940  
Plus: Depreciation and amortization     88,867       119,064  
Plus: Closure and post-closure accretion     1,225       1,514  
Plus: Loss on disposal of assets     472       3,122  
Plus/less: Other expense (income), net     (838 )     965  
Adjustments:                
  Plus: Loss on prior corporate office lease (a)     -       10,498  
  Plus: Acquisition-related costs (b)     2,159       806  
  Plus: Corporate relocation expenses (c)     4,717       422  
  Plus: NEO one-time equity grants (d)     3,585       -  
Adjusted EBITDA   $ 247,818     $ 315,413  
                 
As % of revenues     31.5 %     33.6 %
                 
(a) Reflects the addback of the loss on the prior corporate office lease resulting from the relocation of the Company's corporate headquarters from California to Texas.
(b) Reflects the addback of acquisition-related transaction costs.
(c) Reflects the addback of costs associated with the relocation of the Company's corporate headquarters from California to Texas.
(d) Reflects the addback of one-time equity compensation expense incurred at the time the Company's NEOs' employment contracts were modified.
   
   
 
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. The Company further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of its business. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently. 

             
    Three months ended
June 30, 2012
    Three months ended
June 30, 2013
 
Net cash provided by operating activities   $ 104,359     $ 122,565  
Less: Change in book overdraft     (184 )     (73 )
Plus: Proceeds from disposal of assets     744       2,899  
Plus: Excess tax benefit associated with equity-based compensation     278       569  
Less: Capital expenditures for property and equipment     (39,492 )     (50,636 )
Adjustment:                
  Corporate office relocation, net of taxes (a)     4,240       167  
Adjusted free cash flow   $ 69,945     $ 75,491  
                 
As % of revenues     17.0 %     15.4 %
                 
                 
    Six months ended
June 30, 2012
    Six months ended
June 30, 2013
 
Net cash provided by operating activities   $ 204,940     $ 255,523  
Plus/less: Change in book overdraft     136       (90 )
Plus: Proceeds from disposal of assets     1,497       3,622  
Plus: Excess tax benefit associated with equity-based compensation     3,283       2,667  
Less: Capital expenditures for property and equipment     (67,445 )     (87,541 )
Less: Distributions to noncontrolling interests     (94 )     (198 )
Adjustment:                
  Corporate office relocation, net of taxes (a)     6,024       1,671  
Adjusted free cash flow   $ 148,341     $ 175,654  
                 
As % of revenues     18.8 %     18.7 %
                 
(a)
Reflects the addback of third party expenses and reimbursable advances to employees associated with the relocation of our corporate headquarters from California to Texas.
   
   
 
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands, except per share amounts)
 

Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income per Diluted Share:

Adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as a valuation measure in the solid waste industry. Management uses adjusted net income and adjusted net income per diluted share 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 to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income has limitations due to the fact that it excludes items that have an impact on the Company's financial condition and results of operations. Adjusted net income and adjusted net income per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted net income and adjusted net income per diluted share differently. 

         
    Three months ended
June 30,
  Six months ended
June 30,
    2012     2013   2012   2013
                           
Reported net income attributable to Waste Connections   $ 42,415     $ 43,967   $ 73,719   $ 85,523
Adjustments:                          
  Amortization of intangibles, net of taxes (a)     3,855       3,835     7,346     7,811
  Acquisition-related expenses, net of taxes (b)     237       1,248     1,338     1,540
  Loss (gain) on disposal of assets, net of taxes (c)     (151 )     2,127     292     1,928
  Corporate relocation expenses, net of taxes (d)     1,854       167     2,924     261
  Loss on prior corporate office lease, net of taxes (e)     -       6,483     -     6,483
  NEO one-time equity grants, net of taxes (f)     -       -     3,315     -
Adjusted net income attributable to Waste Connections   $ 48,210     $ 57,827   $ 88,934   $ 103,546
                           
Diluted earnings per common share attributable to Waste Connections common stockholders:                          
  Reported net income   $ 0.34     $ 0.35   $ 0.61   $ 0.69
  Adjusted net income   $ 0.39     $ 0.47   $ 0.74   $ 0.84
                             
 
(a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.
(b) Reflects the elimination of acquisition-related expenses, including transaction costs and adjustments to the fair value of contingent consideration.
(c) Reflects the elimination of a loss (gain) on disposal of assets.
(d) Reflects the addback of costs associated with the relocation of the Company's corporate headquarters from California to Texas.
(e) Reflects the addback of the loss on the prior corporate office lease resulting from the relocation of the Company's corporate headquarters from California to Texas.
(f) Reflects the addback of one-time equity compensation expense incurred at the time our NEOs' employment contracts were modified.
   
 

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