-Revenue of $1.390 billion, exceeding outlook
-Net income attributable to Waste Connections of $158.0 million, or $0.60 per share
-Adjusted net income attributable to Waste Connections* of $188.6 million, or $0.72 per share
-Adjusted EBITDA* of $432.6 million, or 31.1% of revenue, exceeding outlook
-YTD net cash provided by operating activities of $1.186 billion
-YTD adjusted free cash flow* of $778.4 million, or 19.2% of revenue and up year over year
-Increases regular quarterly cash dividend by 10.8%

TORONTO, ONTARIO, October 28, 2020

- Waste Connections, Inc. (TSX/NYSE: WCN) (“Waste Connections” or the “Company”) today announced its results for the third quarter of 2020.  

“Sequential improvement in solid waste volumes and increased recovered commodity values drove better than expected results in the third quarter and provide incremental momentum going forward.  Our strong operating results, financial performance and frontline support continue to differentiate Waste Connections during this year’s unprecedented health, economic and social challenges,” said Worthing F. Jackman, President and Chief Executive Officer.

Mr. Jackman added, “Higher margin flow-through from improving revenue during the quarter provided better than expected adjusted EBITDA* margin and adjusted free cash flow* generation. Adjusted EBITDA* as a percentage of revenue in the period was approximately 40 basis points above our outlook in spite of 30 basis points higher than expected discretionary frontline and incentive compensation costs impacting the quarter, which resulted from our more than $35 million commitment in incremental costs primarily directed to discretionary supplemental pay for frontline employees.  Solid waste margins expanded by almost 200 basis points compared to the year ago period, with collection, transfer and disposal accounting for over 80% of that increase. Moreover, year-to-date adjusted free cash flow* of $778 million, or 19.2% of revenue, increased year over year, putting us firmly on track to exceed the adjusted free cash flow* outlook for the full year that we communicated in August and positioning us for double digit growth in adjusted free cash flow* in 2021.” 

Mr. Jackman concluded, “As anticipated last quarter, our strong operating performance, free cash flow generation and balance sheet strength positioned us for a double-digit percentage increase in our quarterly cash dividend, for the tenth consecutive year.  We are also on track for another year of above average acquisition activity, while maintaining optionality for opportunistic share repurchases.  As we look ahead, we expect to emerge from this challenging period better positioned financially, with tremendous flexibility with respect to capital allocation, and operationally, with higher operating leverage in solid waste and both safety-related incidents and voluntary turnover levels already achieving multi-year lows.”

Financial Impact from COVID-19

During the third quarter of 2020, our business continued to be impacted by COVID-19, albeit to a lesser extent than in the prior period in many markets.  Revenue in solid waste commercial collection and solid waste transfer and disposal continued to reflect the extent to which the slowdown in activity associated with shelter-in-place or other closure restrictions or requirements in effect since the first quarter of 2020 has persisted.  

The impacts to solid waste activity from COVID-19 that we experienced during the third quarter reflected the pace of reopening activity and varied by geography, the size and customer mix in each market.  In some markets, impacts began to abate in the second quarter, when a portion of the lost volumes returned; in other cases, impacts abated more during the third quarter, when reopenings resulted in increased service requirements by commercial customers and higher landfill volumes and roll-off activity.  In markets where reopenings continue to be delayed or where additional restrictions have been imposed, the improvements were less pronounced.  Through the third quarter, about 68% of solid waste commercial customers and 57% of associated revenue in competitive markets we track that had

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

The following information was filed by Waste Connections, Inc. (WCN) on Wednesday, October 28, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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