Company Quick10K Filing
Quick10K
Waste Connections
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$91.61 264 $24,150
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
8-K 2019-05-17 Shareholder Vote, Other Events, Exhibits
8-K 2019-04-25 Regulation FD
8-K 2019-04-24 Earnings, Regulation FD, Exhibits
8-K 2019-04-16 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-04-09 Enter Agreement, Regulation FD, Exhibits
8-K 2019-04-06 Other Events, Exhibits
8-K 2019-02-19 Officers, Exhibits
8-K 2019-02-14 Regulation FD
8-K 2019-02-13 Earnings, Regulation FD, Exhibits
8-K 2019-01-03 Other Events, Exhibits
8-K 2018-12-10 Other Events, Exhibits
8-K 2018-11-16 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-11-06 Enter Agreement, Regulation FD, Exhibits
8-K 2018-10-30 Regulation FD
8-K 2018-10-29 Earnings, Regulation FD, Exhibits
8-K 2018-10-17 Officers, Exhibits
8-K 2018-09-14 Regulation FD
8-K 2018-07-25 Regulation FD
8-K 2018-07-24 Earnings, Regulation FD, Exhibits
8-K 2018-05-24 Shareholder Vote, Other Events, Exhibits
8-K 2018-05-14 Officers, Exhibits
8-K 2018-05-03 Regulation FD
8-K 2018-03-21 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-03-09 Regulation FD
8-K 2018-02-14 Earnings, Regulation FD, Exhibits
NMR Nomura Holdings 11,620
UTL Unitil 836
SNR New Senior Investment Group 511
NBEV New Age Beverages 395
ODC Oil-Dri Corp of America 234
UNTY Unity Bancorp 230
MFAC Megalith Financial Acquisition 211
RIBT Ricebran 93
BBW Build A Bear Workshop 74
FMBM F&M Bank 0
WCN 2019-03-31
Part I – Financial Information
Item 1. Financial Statements
Item 2.Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
Part II – Other Information
Item 1.Legal Proceedings
Item 6.Exhibits
EX-31.1 wcn-20190331ex3110a5c97.htm
EX-31.2 wcn-20190331ex312bc9aa0.htm
EX-32.1 wcn-20190331ex321e745aa.htm
EX-32.2 wcn-20190331ex322b1a833.htm

Waste Connections Earnings 2019-03-31

WCN 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 wcn-20190331x10q.htm 10-Q wcn_Current_Folio_10Q

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C.  20549

 

FORM 10‑Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

 

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                    to                 

 

Commission file number 1‑34370

 

Picture 3

WASTE CONNECTIONS, INC.

(Exact name of registrant as specified in its charter)

Ontario, Canada

(State or other jurisdiction of incorporation or organization)

98‑1202763

(I.R.S. Employer Identification No.)

610 Applewood Crescent, 2nd Floor

Vaughan

Ontario L4K 0E3

Canada

(Address of principal executive offices)

(905) 532‑7510

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, no par value

WCN

New York Stock Exchange
Toronto Stock Exchange

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. (Check one):

 

☑ Large accelerated 
filer

☐ Accelerated 
filer

☐ Non-accelerated 
filer

☐ Smaller reporting 
company

☐ Emerging growth 
company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Yes No

Indicate the number of shares outstanding of each of the issuer’s classes of common shares:

As of April 18, 2019:  263,682,959 common shares

 

 

 

 

 


 

WASTE CONNECTIONS, INC.

FORM 10‑Q

TABLE OF CONTENTS

 

 

 

 

 

 

Page

PART I – FINANCIAL INFORMATION (unaudited) 

 

Item 1. 

    

Financial Statements

 

 

 

Condensed Consolidated Balance Sheets

1

 

 

Condensed Consolidated Statements of Net Income

2

 

 

Condensed Consolidated Statements of Comprehensive Income

3

 

 

Condensed Consolidated Statements of Equity

4

 

 

Condensed Consolidated Statements of Cash Flows

6

 

 

Notes to Condensed Consolidated Financial Statements

7

Item 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

41

Item 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

61

Item 4. 

 

Controls and Procedures

63

PART II – OTHER INFORMATION 

 

Item 1. 

 

Legal Proceedings

64

Item 6. 

 

Exhibits

64

 

 

Signatures 

65

 

 

 

 


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

 

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

 

    

2019

    

2018

 

ASSETS

 

 

  

 

 

  

 

Current assets:

 

 

  

 

 

  

 

Cash and equivalents

 

$

499,482

 

$

319,305

 

Accounts receivable, net of allowance for doubtful accounts of $15,124 and $16,760 at March 31, 2019 and December 31, 2018, respectively

 

 

599,369

 

 

609,545

 

Prepaid expenses and other current assets

 

 

144,006

 

 

164,053

 

Total current assets

 

 

1,242,857

 

 

1,092,903

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

85,200

 

 

84,661

 

Restricted investments

 

 

47,926

 

 

47,486

 

Property and equipment, net

 

 

5,119,785

 

 

5,168,996

 

Operating lease right-of-use assets

 

 

199,703

 

 

 —

 

Goodwill

 

 

5,065,530

 

 

5,031,685

 

Intangible assets, net

 

 

1,105,553

 

 

1,128,628

 

Other assets, net

 

 

65,374

 

 

72,970

 

Total assets

 

$

12,931,928

 

$

12,627,329

 

LIABILITIES AND EQUITY

 

 

  

 

 

  

 

Current liabilities:

 

 

  

 

 

  

 

Accounts payable

 

$

339,261

 

$

359,967

 

Book overdraft

 

 

15,734

 

 

18,518

 

Accrued liabilities

 

 

264,706

 

 

289,544

 

Current portion of operating lease liabilities

 

 

29,810

 

 

 —

 

Current portion of contingent consideration

 

 

11,650

 

 

11,612

 

Deferred revenue

 

 

181,950

 

 

179,282

 

Current portion of long-term debt and notes payable

 

 

1,016

 

 

1,786

 

Total current liabilities

 

 

844,127

 

 

860,709

 

 

 

 

 

 

 

 

 

Long-term debt and notes payable

 

 

4,157,081

 

 

4,153,465

 

Long-term portion of operating lease liabilities

 

 

176,328

 

 

 —

 

Long-term portion of contingent consideration

 

 

44,686

 

 

43,003

 

Deferred income taxes

 

 

766,641

 

 

760,033

 

Other long-term liabilities

 

 

374,391

 

 

349,931

 

Total liabilities

 

 

6,363,254

 

 

6,167,141

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 18)

 

 

  

 

 

  

 

 

 

 

 

 

 

 

 

Equity:

 

 

  

 

 

  

 

Common shares: 263,673,497 shares issued and 263,587,245 shares outstanding at March 31, 2019; 263,271,302 shares issued and 263,141,413 shares outstanding at December 31, 2018

 

 

4,134,917

 

 

4,131,307

 

Additional paid-in capital

 

 

128,230

 

 

133,577

 

Accumulated other comprehensive income (loss)

 

 

(45,978)

 

 

(74,786)

 

Treasury shares: 86,252 and 129,889 shares at March 31, 2019 and December 31, 2018, respectively

 

 

 —

 

 

 —

 

Retained earnings

 

 

2,345,970

 

 

2,264,510

 

Total Waste Connections’ equity

 

 

6,563,139

 

 

6,454,608

 

Noncontrolling interest in subsidiaries

 

 

5,535

 

 

5,580

 

Total equity

 

 

6,568,674

 

 

6,460,188

 

 

 

$

12,931,928

 

$

12,627,329

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)

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

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 

 

 

    

2019

    

2018

    

Revenues

 

$

1,244,637

 

$

1,140,131

 

Operating expenses:

 

 

  

 

 

  

 

Cost of operations

 

 

733,690

 

 

659,803

 

Selling, general and administrative

 

 

132,586

 

 

131,308

 

Depreciation

 

 

146,847

 

 

133,185

 

Amortization of intangibles

 

 

30,542

 

 

26,098

 

Impairments and other operating items

 

 

16,112

 

 

1,030

 

Operating income

 

 

184,860

 

 

188,707

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(37,287)

 

 

(32,370)

 

Interest income

 

 

3,311

 

 

1,155

 

Other income (expense), net

 

 

2,558

 

 

(387)

 

Foreign currency transaction gain (loss)

 

 

103

 

 

(221)

 

Income before income tax provision

 

 

153,545

 

 

156,884

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

(27,968)

 

 

(31,852)

 

Net income

 

 

125,577

 

 

125,032

 

Plus (less): Net loss (income) attributable to noncontrolling interests

 

 

45

 

 

(163)

 

Net income attributable to Waste Connections

 

$

125,622

 

$

124,869

 

 

 

 

 

 

 

 

 

Earnings per common share attributable to Waste Connections’ common shareholders:

 

 

  

 

 

  

 

Basic

 

$

0.48

 

$

0.47

 

Diluted

 

$

0.48

 

$

0.47

 

 

 

 

 

 

 

 

 

Shares used in the per share calculations:

 

 

  

 

 

  

 

Basic

 

 

263,603,418

 

 

263,827,963

 

Diluted

 

 

264,336,930

 

 

264,588,069

 

 

 

 

 

 

 

 

 

Cash dividends per common share

 

$

0.16

 

$

0.14

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands of U.S. dollars)

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 

    

 

    

2019

    

2018

 

Net income

 

$

125,577

 

$

125,032

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), before tax:

 

 

 

 

 

  

 

Interest rate swap amounts reclassified into interest expense

 

 

(2,472)

 

 

(599)

 

Fuel hedge amounts reclassified into cost of operations

 

 

 —

 

 

(1,148)

 

Changes in fair value of interest rate swaps

 

 

(15,721)

 

 

11,769

 

Changes in fair value of fuel hedges

 

 

 —

 

 

615

 

Foreign currency translation adjustment

 

 

42,180

 

 

(59,331)

 

Other comprehensive income (loss), before tax

 

 

23,987

 

 

(48,694)

 

Income tax (expense) benefit related to items of other comprehensive income (loss)

 

 

4,821

 

 

(2,826)

 

Other comprehensive income (loss), net of tax

 

 

28,808

 

 

(51,520)

 

Comprehensive income

 

 

154,385

 

 

73,512

 

Plus (less): Comprehensive loss (income) attributable to noncontrolling interests

 

 

45

 

 

(163)

 

Comprehensive income attributable to Waste Connections

 

$

154,430

 

$

73,349

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

3


 

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

THREE MONTHS ENDED MARCH 31, 2019

(Unaudited)

(In thousands of U.S. dollars, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WASTE CONNECTIONS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCUMULATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADDITIONAL

 

OTHER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON SHARES

 

PAID-IN

 

COMPREHENSIVE

 

TREASURY SHARES

 

RETAINED

 

NONCONTROLLING

 

 

 

 

  

SHARES

  

AMOUNT

  

CAPITAL

  

INCOME (LOSS)

  

SHARES

  

AMOUNT

  

EARNINGS

  

INTERESTS

  

TOTAL

Balances at December 31, 2018

 

263,141,413

 

$

4,131,307

 

$

133,577

 

$

(74,786)

 

129,889

 

$

 —

 

$

2,264,510

 

$

5,580

 

$

6,460,188

Sale of common shares held in trust

 

43,637

 

 

3,610

 

 

 —

 

 

 —

 

(43,637)

 

 

 —

 

 

 —

 

 

 —

 

 

3,610

Vesting of restricted share units

 

400,555

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of performance-based restricted share units

 

180,258

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Restricted share units released from deferred compensation plan

 

15,371

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Tax withholdings related to net share settlements of equity-based compensation

 

(202,679)

 

 

 —

 

 

(16,973)

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(16,973)

Equity-based compensation

 

 —

 

 

 —

 

 

11,626

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

11,626

Exercise of warrants

 

8,690

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Cash dividends on common shares

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

(42,084)

 

 

 —

 

 

(42,084)

Amounts reclassified into earnings, net of taxes

 

 —

 

 

 —

 

 

 —

 

 

(1,817)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,817)

Changes in fair value of cash flow hedges, net of taxes

 

 —

 

 

 —

 

 

 —

 

 

(11,555)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(11,555)

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 —

 

 

42,180

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

42,180

Cumulative effect adjustment from adoption of new accounting pronouncement

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

(2,078)

 

 

 —

 

 

(2,078)

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

125,622

 

 

(45)

 

 

125,577

Balances at March 31, 2019

 

263,587,245

 

$

4,134,917

 

$

128,230

 

$

(45,978)

 

86,252

 

$

 —

 

$

2,345,970

 

$

5,535

 

$

6,568,674

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

THREE MONTHS ENDED MARCH 31, 2018

(Unaudited)

(In thousands of U.S. dollars, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WASTE CONNECTIONS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCUMULATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADDITIONAL

 

OTHER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON SHARES

 

PAID-IN

 

COMPREHENSIVE

 

TREASURY SHARES

 

RETAINED

 

NONCONTROLLING

 

 

 

 

  

SHARES

  

AMOUNT

  

CAPITAL

  

INCOME (LOSS)

  

SHARES

  

AMOUNT

  

EARNINGS

  

INTERESTS

  

TOTAL

Balances at December 31, 2017

 

263,494,670

 

$

4,187,568

 

$

115,743

 

$

108,413

 

166,133

 

$

 —

 

$

1,856,946

 

$

5,400

 

$

6,274,070

Sale of common shares held in trust

 

26,849

 

 

1,947

 

 

 —

 

 

 —

 

(26,849)

 

 

 —

 

 

 —

 

 

 —

 

 

1,947

Vesting of restricted share units

 

452,700

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of performance-based restricted share units

 

154,181

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Restricted share units released from deferred compensation plan

 

114

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Tax withholdings related to net share settlements of equity-based compensation

 

(206,084)

 

 

 —

 

 

(14,121)

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(14,121)

Equity-based compensation

 

 —

 

 

 —

 

 

7,991

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

7,991

Repurchase of common shares

 

(594,474)

 

 

(42,040)

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(42,040)

Cash dividends on common shares

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

(36,814)

 

 

 —

 

 

(36,814)

Amounts reclassified into earnings, net of taxes

 

 —

 

 

 —

 

 

 —

 

 

(1,301)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,301)

Changes in fair value of cash flow hedges, net of taxes

 

 —

 

 

 —

 

 

 —

 

 

9,112

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

9,112

Foreign currency translation adjustment

 

 —

 

 

 —

 

 

 —

 

 

(59,331)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(59,331)

Cumulative effect adjustment from adoption of new accounting pronouncement

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

16,296

 

 

 —

 

 

16,296

Distributions to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

(103)

 

 

(103)

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

124,869

 

 

163

 

 

125,032

Balances at March 31, 2018

 

263,327,956

 

$

4,147,475

 

$

109,613

 

$

56,893

 

139,284

 

$

 —

 

$

1,961,297

 

$

5,460

 

$

6,280,738

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

5


 

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands of U.S. dollars)

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 

 

 

    

2019

    

2018

    

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

  

 

 

  

 

Net income

 

$

125,577

 

$

125,032

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

  

 

Loss on disposal of assets and impairments

 

 

16,372

 

 

2,863

 

Depreciation

 

 

146,847

 

 

133,185

 

Amortization of intangibles

 

 

30,542

 

 

26,098

 

Amortization of leases

 

 

7,214

 

 

 —

 

Deferred income taxes, net of acquisitions

 

 

10,126

 

 

20,957

 

Amortization of debt issuance costs

 

 

1,148

 

 

1,076

 

Share-based compensation

 

 

15,168

 

 

9,180

 

Interest accretion

 

 

3,972

 

 

3,665

 

Payment of contingent consideration recorded in earnings

 

 

 —

 

 

(11)

 

Adjustments to contingent consideration

 

 

1,466

 

 

702

 

Other

 

 

(145)

 

 

101

 

Net change in operating assets and liabilities, net of acquisitions

 

 

5,485

 

 

(15,601)

 

Net cash provided by operating activities

 

 

363,772

 

 

307,247

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

  

 

 

  

 

Payments for acquisitions, net of cash acquired

 

 

(14,920)

 

 

(311,964)

 

Capital expenditures for property and equipment

 

 

(114,238)

 

 

(91,216)

 

Proceeds from disposal of assets

 

 

639

 

 

1,002

 

Other

 

 

473

 

 

(104)

 

Net cash used in investing activities

 

 

(128,046)

 

 

(402,282)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

  

 

 

  

 

Proceeds from long-term debt

 

 

55,354

 

 

35,625

 

Principal payments on notes payable and long-term debt

 

 

(52,051)

 

 

(106,812)

 

Payment of contingent consideration recorded at acquisition date

 

 

(275)

 

 

(2,205)

 

Change in book overdraft

 

 

(2,784)

 

 

(295)

 

Payments for repurchase of common shares

 

 

 —

 

 

(42,040)

 

Payments for cash dividends

 

 

(42,084)

 

 

(36,814)

 

Tax withholdings related to net share settlements of equity-based compensation

 

 

(16,973)

 

 

(14,121)

 

Debt issuance costs

 

 

 —

 

 

(2,188)

 

Proceeds from sale of common shares held in trust

 

 

3,610

 

 

1,947

 

Other

 

 

 —

 

 

(103)

 

Net cash used in financing activities

 

 

(55,203)

 

 

(167,006)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

193

 

 

18

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

180,716

 

 

(262,023)

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

403,966

 

 

556,467

 

Plus: change in cash held for sale

 

 

 —

 

 

101

 

Cash, cash equivalents and restricted cash at end of period

 

$

584,682

 

$

294,545

 

 

 

 

 

 

 

 

 

Non-cash financing activities:

 

 

 

 

 

 

 

Liabilities assumed and notes payable issued to sellers of businesses acquired

 

$

1,584

 

$

64,622

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6


 

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

1.BASIS OF PRESENTATION AND SUMMARY

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc. and its subsidiaries  (“WCI” or the “Company”) for the three month periods ended March 31, 2019 and 2018.  In the opinion of management, the accompanying balance sheets and related interim statements of net income, comprehensive income, cash flows and equity include all adjustments, consisting only of normal recurring items, necessary for their fair statement in conformity with U.S. generally accepted accounting principles (“GAAP”).  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.  Examples include accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, contingent consideration accruals and asset impairments.  An additional area that involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and assessments in accordance with the accounting guidance on contingencies.  Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements.

Interim results are not necessarily indicative of results for a full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2018.

2.REPORTING CURRENCY

The functional currency of the Company, as the parent corporate entity, and its operating subsidiaries in the United States, is the U.S. dollar. The functional currency of the Company’s Canadian operations is the Canadian dollar. The reporting currency of the Company is the U.S. dollar.  The Company’s consolidated Canadian dollar financial position is translated to U.S. dollars by applying the foreign currency exchange rate in effect at the consolidated balance sheet date.  The Company’s consolidated Canadian dollar results of operations and cash flows are translated to U.S. dollars by applying the average foreign currency exchange rate in effect during the reporting period.  The resulting translation adjustments are included in other comprehensive income or loss.  Gains and losses from foreign currency transactions are included in earnings for the period.

3.NEW ACCOUNTING STANDARDS

Accounting Standards Adopted

Lease Accounting.  In February 2016, the FASB issued guidance that requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease).  The liability will be equal to the present value of lease payments.  The asset will be based on the liability, subject to adjustment, such as for initial direct costs.  For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance.  Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases).  Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines.  The new standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.  The FASB issued new guidance in July 2018, which amended the guidance to allow the issuer to elect from two adoption alternatives: 1) apply the new guidance at the beginning of the earliest comparative period presented; or 2) apply the new guidance at the effective date and recognize a cumulative-effect adjustment, without adjusting the comparative periods presented. 

7


 

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company adopted the new standard on January 1, 2019 and elected to apply the new guidance at the effective date and recognize a cumulative-effect adjustment, without adjusting the comparative periods presented.  The Company applied the package of practical expedients to leases that commenced before the effective date whereby the Company elected not to reassess the following: (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for any expired or existing leases; and (3) whether initial direct costs exist for any existing leases.  The Company also applied (1) the practical expedient for land easements where the Company elected to not apply the leases standard to certain existing land easements at transition and (2) the practical expedient to include both the lease and nonlease components as a single component and account for it as a lease.    The Company has completed its assessment of the provisions of the lease accounting guidance and implementation of its leasing software solution to manage and account for leases under the new standard. 

 

 

 

 

 

 

 

 

 

 

As reported
December 31, 2018

 

Adoption of lease guidance
increase (decrease)

 

Balance
January 1, 2019

Operating lease right-of-use assets

$

-

 

$

206,501

 

$

206,501

Total assets

$

12,627,329

 

$

206,501

 

$

12,833,830

Current portion of operating lease liabilities

$

-

 

$

29,640

 

$

29,640

Total current liabilities

$

860,709