UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE
ACT OF 1934
For the month of July 2024
Commission File Number: 001-39240
GFL Environmental
Inc.
(Translation of registrant’s name into
English)
100 New Park Place, Suite 500
Vaughan, Ontario,
Canada L4K 0H9
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
EXHIBIT INDEX
The following Exhibit 99.1 is furnished as part of this Current
Report on Form 6-K.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
GFL Environmental Inc. |
| |
|
|
| Date: July 31, 2024 |
By: |
/s/ Mindy Gilbert |
| |
|
Name: Mindy Gilbert |
| |
|
Title: Executive Vice President and Chief Legal Officer |
Exhibit
99.1
GFL Environmental Reports
Second Quarter 2024 Results and Raises Full Year 2024 Guidance for the Second Time
| · | Revenue
of $2,060.0 million, ahead of guidance |
| · | Solid
Waste price of 6.5% excluding the impact of divestitures, increase of 6.1%
including the impact of divestitures |
| · | Adjusted
EBITDA1 of $591.1 million, increase of 13.9% excluding the impact
of divestitures; 9.3% including the impact of divestitures;
Adjusted Net Income1 of $108.7 million; Net loss of $472.3 million |
| · | Adjusted
EBITDA margin1 of 28.7%, increase of 90 basis points; Solid Waste Adjusted EBITDA
margin1 of 32.5%, increase of 90 basis points |
| · | Adjusted
Cash Flows from Operating Activities1 of $394.8 million; cash flows from operating
activities of $364.6 million; Adjusted Free Cash Flow1 of $185.7 million |
| · | Year-to-date
completed acquisitions generating approximately $100.0 million in annualized revenue |
| · | Raised
full year 2024 guidance to Adjusted EBITDA2 of approximately $2,240.0 million
to $2,250.0 million and Adjusted EBITDA margin2 of 28.4%, up 170 basis points
compared to the prior year |
VAUGHAN,
ON, July 31, 2024 — GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) (“GFL”,
“we” or “our”) today announced its results for the second quarter of 2024.
“Our exceptional start
to this year can be attributed to the commitment of our over 20,000 employees who deliver consistent high-quality results and strive to
make our business better every day,” said Patrick Dovigi, Founder and Chief Executive Officer of GFL. “Our focus on strong
execution generated better than anticipated financial metrics across the board, including volumes which saw a sequential improvement of
130 basis points. Price-led organic growth, together with our operating efficiencies and the positive margin impact of shedding low margin
work, resulted in Adjusted EBITDA margin1 expansion of 90 basis points compared to the prior year period.” Mr. Dovigi
added, “As part of our deliberate volume strategies, we also accelerated our exit from a portfolio of residential collection contracts
in Michigan that no longer met our return thresholds, in a sale that was completed at the end of Q2.”
Mr. Dovigi continued, “The
success of our first half results sets us up to increase our 2024 full year guidance for the second consecutive quarter. In particular,
we are increasing our guidance for Adjusted EBITDA1 to between $2.24 billion and $2.25 billion and Adjusted EBITDA margin1
to 28.4%, a 70 basis point increase over our original guidance and a 170 basis point increase over last year. The highly predictable and
recurring nature of our business model also gives us confidence to reaffirm our year end Net Leverage2 target of between 3.65x
to 3.85x.”
Mr. Dovigi concluded, “Considering
our organic growth opportunities over the next two years, including RNG and EPR, we do not believe that taking GFL private at this time
is in the best long-term interest of our shareholders. At its current disconnected market valuation, we are a buyer of GFL, not a seller.
However, our management team is always exploring ways to create long-term value for our shareholders and has a track record of selling
assets at valuations that are more in line with our current value expectations. We believe that a sale of certain of our high-quality
assets, such as our Environmental Services business, could attract a mid-teen multiple and that the proceeds from such a transaction could
be used to accelerate the deleveraging of our balance sheet and provide an opportunity to buy back a portion of our stock at an attractive
valuation. We have received current preliminary expressions of interest in a transaction that supports our valuation perspective and are
actively engaged in implementing preparatory steps required to potentially complete such a transaction. To ensure we are maximizing value
for all our shareholders, we also believe that the undertaking of a full auction process will be required, although there can be no assurance
that a transaction will be completed.”
Second
Quarter Results
| · | Revenue
of $2,060.0 million in the second quarter of
2024, increase of 11.1% excluding the impact
of divestitures (6.0% including the impact of
divestitures), compared to the second quarter of 2023. |
| ◦ | Solid
Waste revenue of $1,581.6 million, including 6.5% from core pricing partially offset by volume
decreases of 1.7%.3 |
| ◦ | Environmental
Services revenue of $478.4 million, compared to $442.9 million in the prior year period. |
| · | Adjusted
EBITDA1 increased by 13.9% excluding the impact of divestitures (9.3% including
the impact of divestitures) to $591.1 million in the second
quarter of 2024, compared to $540.7 million
in the second quarter of 2023.
Adjusted EBITDA margin1 was 28.7% in the second
quarter of 2024, compared to 27.8% in
the second quarter of 2023.
Solid Waste Adjusted EBITDA margin1 was 32.5% in the second
quarter of 2024, compared to 31.6% in
the second quarter of 2023.
Environmental Services Adjusted EBITDA margin1 was 29.6% in the second
quarter of 2024, compared to 29.6% in
the second quarter of 2023. |
| · | Net
loss was $472.3 million in the second quarter
of 2024, compared to net income of $293.8 million
in the second quarter of 2023.
Net loss includes a non-cash loss resulting from the divestiture of certain U.S. assets completed in the current quarter. |
| · | Adjusted
Free Cash Flow1 was $185.7 million in the second
quarter of 2024, compared to $8.5 million
in the second quarter of 2023.
The increase of $177.2 million was predominantly due to an increase in cash flows from operating
activities from improved working capital and a reduction in cash interest paid, as well as
timing of capex payments. |
Year
to Date Results
| · | Revenue
of $3,861.4 million for the six months ended June 30,
2024, increase of 8.9% excluding the impact of divestitures (3.2% including the impact
of divestitures), compared to the six months ended
June 30, 2023. |
| ◦ | Solid
Waste revenue of $3,013.4 million, including 7.1% from core pricing, partially offset by
volume decreases of 2.3%.3 |
| ◦ | Environmental
Services revenue of $848.0 million, compared to $818.8 million in the prior year period which
included approximately $40.0 million of revenue associated with an unseasonably high level
of industrial collection, processing and emergency response activity. Excluding the impact
of this outsized prior year activity, revenue increased by 8.9%. |
| · | Adjusted
EBITDA1 increased by 12.2% excluding the impact of divestitures (6.7% including
the impact of divestitures) to $1,046.8 million for
the six months ended June 30, 2024, compared to the six
months ended June 30, 2023. Adjusted EBITDA margin1 was 27.1% for
the six months ended June 30, 2024, compared to 26.2% for the six
months ended June 30, 2023. Solid Waste Adjusted EBITDA margin1 was
31.7% for the six months ended June 30, 2024,
compared to 30.4% for the six months ended June 30,
2023. Environmental Services Adjusted EBITDA margin1 was 26.3% for
the six months ended June 30, 2024, compared to 26.1% for the six
months ended June 30, 2023. |
| · | Net
loss was $648.8 million for the six months ended June 30,
2024, compared to net income of $76.0 million for the six
months ended June 30, 2023. Net loss includes a non-cash loss resulting from
the divestiture of certain U.S. assets completed in the current period. |
| · | Adjusted
Free Cash Flow1 was $234.8 million for the
six months ended June 30, 2024, compared to $(46.3) million for the six
months ended June 30, 2023. The increase of $281.1 million was predominantly
due to an increase in cash flows from operating activities from improved working capital
and a reduction in cash interest paid, as well as timing of capex payments. |
Updated Full Year 2024 Guidance
GFL also provided its updated
guidance for 2024 assuming a CAD/US exchange rate of 1.38 for the remainder of the year (compared to 1.35 provided in our original guidance
on February 20, 2024).
| · | Revenue
is estimated to be between $7,900.0 million and $7,925.0 million, up compared to original
guidance considering the impact of the recent divestiture. |
| · | Adjusted
EBITDA2 is estimated to be between $2,240.0 million and $2,250.0 million, up approximately
$30 million at the midpoint compared to original guidance. |
| ◦ | Full year Adjusted EBITDA margin2
is expected to be approximately 28.4%, an increase of 70 basis points compared to original
guidance and up 170 basis points compared to the prior year. |
| · | Adjusted
Free Cash Flow2 is estimated to be approximately $810.0 million, up compared to
original guidance. |
| · | Reaffirming
Net Levearge2 at year-end is estimated to be between 3.65x and 3.85x. |
The 2024 guidance excludes
any impact from acquisitions not yet completed. Implicit in forward-looking information in respect of our expectations for 2024 are certain
current assumptions, including, among others, no changes to the current economic environment, including fuel and commodities. The updated
2024 guidance assumes GFL will continue to execute on our strategy of organically growing our business, leveraging our scalable network
to attract and retain customers across multiple service lines, realizing operational efficiencies and extracting procurement and cost
synergies. See “Forward-Looking Information”.
| (1) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (2) | Information contained in the
section titled “Updated Full Year 2024 Guidance” includes non-IFRS measures and
ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow and Net
Leverage. Due to the uncertainty of the likelihood, amount and timing of effects of events
or circumstances to be excluded from these measures, GFL does not have information available
to provide a quantitative reconciliation of such projections to comparable IFRS measures.
See “Non-IFRS Measures” below. See Second Quarter Results for the equivalent
historical non-IFRS measure. |
| (3) | Reflects pro forma adjustments
to remove the contribution of three non-core U.S Solid Waste businesses that were divested
in Fiscal 2023. Refer to Supplemental Data for details. |
Q2
2024 Earnings
GFL
will host a conference call related to our second quarter earnings and 2024 guidance update
on August 1, 2024 at 8:30 am Eastern Time. A live audio webcast of the conference call can be accessed by logging onto our
Investors page at investors.gflenv.com or by clicking here. Listeners may access the call toll-free by dialing 1-833-950-0062
in Canada or 1-833-470-1428 in the United States (access code: 776136) approximately 15 minutes prior to the scheduled start time.
We
encourage participants who will be dialing in to pre-register for the conference call using the following link: https://www.netroadshow.com/events/login?show=42e63b40&confId=67155.
Callers who pre-register will be given a conference access code and PIN to gain immediate access to the call and bypass the live operator
on the day of the call. Participants may pre-register at any time, including up to and after the call start time. For those unable to
listen live, an audio replay of the call will be available until August 15, 2024 by dialing 1-226-828-7578 in Canada or 1-866-813-9403
in the United States (access code: 217921).
About
GFL
GFL, headquartered in Vaughan,
Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of solid waste
management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in
more than half of the U.S. states. Across its organization, GFL has a workforce of more than 20,000 employees.
For
more information, visit the GFL web site at gflenv.com. To subscribe for investor email alerts please visit investors.gflenv.com
or click here.
Forward-Looking
Information
This release includes certain
“forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”)
within the meaning of applicable U.S. and Canadian securities laws, respectively. Forward-looking information includes all statements
that do not relate solely to historical or current facts and may relate to our future outlook, financial guidance and anticipated events
or results and may include statements regarding our financial performance, financial condition or results, business strategy, growth strategies,
budgets, operations and services. Particularly, statements regarding our expectations of future results, performance, achievements, prospects
or opportunities, the markets in which we operate, potential asset sales, potential deleveraging transactions, potential share repurchases
or potential strategic transactions are forward-looking information. In some cases, forward-looking information can be identified by the
use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”,
“is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”,
“outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”,
“anticipates”, “does not anticipate”, “believes”, or “potential” or variations of such
words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”,
“will”, “will be taken”, “occur” or “be achieved”, although not all forward-looking information
includes those words or phrases. In addition, any statements that refer to expectations, intentions, projections, guidance, potential
or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking
information are not historical facts nor assurances of future performance but instead represent management's expectations, estimates and
projections regarding future events or circumstances.
Forward-looking information
is based on our opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such information is stated,
is subject to known and unknown risks, uncertainties, assumptions and other important factors that may cause the actual results, level
of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information,
including but not limited to certain assumptions set out herein in the section titled “Guidance Update”; our ability to obtain
and maintain existing financing on acceptable terms; our ability to source and execute on acquisitions on terms acceptable to us; our
ability to find purchasers for and complete any divestiture of assets on terms acceptable to us; our ability to use the proceeds of any
such asset divestiture for deleveraging or potential share repurchases; currency exchange and interest rates; commodity price fluctuations;
our ability to implement price increases and surcharges; changes in waste volumes; labour, supply chain and transportation constraints;
inflationary cost pressures; fuel supply and fuel price fluctuations; our ability to maintain a favourable working capital position; the
impact of competition; the changes and trends in our industry or the global economy; and changes in laws, rules, regulations, and global
standards. Other important factors that could materially affect our forward-looking information can be found in the “Risk Factors”
section of GFL’s annual information form for the year ended December 31, 2023 and GFL’s other periodic filings with the U.S.
Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Shareholders, potential
investors and other readers are urged to consider these risks carefully in evaluating our forward-looking information and are cautioned
not to place undue reliance on such information. There can be no assurance that the underlying opinions, estimates and assumptions will
prove to be correct. Although we have attempted to identify important risk factors that could cause actual results to differ materially
from those contained in forward-looking information, there may be other factors not currently known to us or that we currently believe
are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking
information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. The forward-looking information contained in this release represents our expectations
as of the date of this release (or as the date it is otherwise stated to be made), and is subject to change after such date. However,
we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new
information, future events or otherwise, except as required under applicable U.S. or Canadian securities laws. The purpose of disclosing
our financial outlook set out in this release is to provide investors with more information concerning the financial impact of our business
initiatives and growth strategies.
Non-IFRS Measures
This release makes reference
to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed
by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should
not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS
measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors
and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures
in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and
to determine components of management compensation.
EBITDA represents, for the
applicable period, net income (loss) plus (a) interest and other finance costs, plus (b) depreciation and amortization
of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for income taxes,
in each case to the extent deducted or added to/from net income (loss). We present EBITDA to assist readers in understanding the mathematical
development of Adjusted EBITDA. Management does not use EBITDA as a financial performance metric.
Adjusted
EBITDA is a supplemental measure used by management and other users of our financial statements including, our lenders and investors,
to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is
also a key metric that management uses prior to execution of any strategic investing or financing opportunity. For example, management
uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted
EBITDA is utilized by financial institutions to measure borrowing capacity. Adjusted EBITDA is calculated by adding and deducting, as
applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management’s view are either
not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including:
(a) (gain) loss on foreign exchange, (b) (gain) loss on sale of property and equipment, (c) mark-to-market (gain) loss
on Purchase Contracts, (d) share of net (income) loss of investments accounted for using the equity method for associates, (e) share-based
payments, (f) (gain) loss on divestiture, (g) transaction costs, (h) acquisition, rebranding and other integration costs
(included in cost of sales related to acquisition activity), (i) Founder/CEO remuneration and (j) other. For the three
and six months ended June 30, 2024, Founder/CEO remuneration has been added back to EBITDA. We use Adjusted EBITDA to facilitate
a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business. As we continue
to grow our business, we may be faced with new events or circumstances that are not indicative of our underlying business performance
or that impact the ability to assess our operating performance.
Adjusted EBITDA margin represents
Adjusted EBITDA divided by revenue. Management and other users of our financial statements including our lenders and investors use Adjusted
EBITDA margin to facilitate a comparison of the operating performance of each of our operating segments on a consistent basis reflecting
factors and trends affecting our business.
Acquisition EBITDA represents,
for the applicable period, management's estimates of the annual Adjusted EBITDA of an acquired business, based on its most recently available
historical financial information at the time of acquisition, as adjusted to give effect to (a) the elimination of expenses related
to the prior owners and certain other costs and expenses that are not indicative of the underlying business performance, if any, as if
such business had been acquired on the first day of such period and (b) contract and acquisition annualization for contracts entered
into and acquisitions completed by such acquired business prior to our acquisition (collectively, “Acquisition EBITDA Adjustments”).
Further adjustments are made to such annual Adjusted EBITDA to reflect estimated operating cost savings and synergies, if any, anticipated
to be realized upon acquisition and integration of the business into our operations. Acquisition EBITDA is calculated net of divestitures.
We use Acquisition EBITDA for the acquired businesses to adjust our Adjusted EBITDA to include a proportional amount of the Acquisition
EBITDA of the acquired businesses based upon the respective number of months of operation for such period prior to the date of our acquisition
of each such business.
Adjusted Cash Flows from
Operating Activities represents cash flows from operating activities adjusted for (a) transaction costs, (b) acquisition, rebranding
and other integration costs, (c) Founder/CEO remuneration, (d) cash interest paid on TEUs and (e) distribution received
from joint ventures. Adjusted Cash Flows from Operating Activities is a supplemental measure used by investors as a valuation and liquidity
measure in our industry. For the three and six months ended June 30, 2024, Founder/CEO remuneration and distributions received from
joint ventures have been added back to Adjusted Cash Flows from Operating Activities. These amounts were not paid or received, as applicable,
in prior periods. Adjusted Cash Flows from Operating Activities is a supplemental measure used by management to evaluate and monitor
liquidity and the ongoing financial performance of GFL.
Adjusted Free Cash Flow
represents Adjusted Cash Flows from Operating Activities adjusted for (a) proceeds on disposal of assets and other, (b) purchase
of property and equipment and (c) incremental growth investments. Adjusted Free Cash Flow is a supplemental measure used by investors
as a valuation and liquidity measure in our industry. Adjusted Free Cash Flow is a supplemental measure used by management to evaluate
and monitor liquidity and the ongoing financial performance of GFL. For the three and six months ended June 30, 2024, we excluded
investment in joint ventures and associates from the calculation of Adjusted Free Cash Flow.
Adjusted Net Income (Loss)
represents net income (loss) adjusted for (a) amortization of intangible assets, (b) ARO discount rate depreciation adjustment,
(c) incremental depreciation of property and equipment due to recapitalization, (d) amortization of deferred financing costs,
(e) (gain) loss on foreign exchange, (f) mark-to-market (gain) loss on Purchase Contracts, (g) share of net (income) loss
of investments accounted for using the equity method, (h) loss on termination of hedged instruments (i) (gain) loss on divestiture,
(j) transaction costs, (k) acquisition, rebranding and other integration costs, (l) Founder/CEO remuneration, (m) TEU
amortization expense, (n) other and (o) the tax impact of the forgoing. For the three and six months ended June 30, 2024,
we added back the ARO discount rate depreciation adjustment, the loss on termination of hedged instruments, Founder/CEO remuneration,
and our share of net loss of investments accounted for using the equity method. Adjusted income (loss) per share is defined as Adjusted
Net Income (Loss) divided by the weighted average shares in the period. For the three and six months ended June 30, 2024, Founder/CEO
remuneration has been added back to net income (loss). We believe that Adjusted income (loss) per share provides a meaningful comparison
of current results to prior periods' results by excluding items that GFL does not believe reflect its fundamental business performance.
Net Leverage is a supplemental
measure used by management to evaluate borrowing capacity and capital allocation strategies. Net Leverage is equal to our total long-term
debt, as adjusted for fair value, deferred financings and other adjustments and reduced by our cash, divided by Run-Rate EBITDA.
Run-Rate EBITDA represents
Adjusted EBITDA for the applicable period as adjusted to give effect to management's estimates of (a) Acquisition EBITDA Adjustments
(as defined above) and (b) the impact of annualization of certain new municipal and disposal contracts and cost savings initiatives,
entered into, commenced or implemented, as applicable, in such period, as if such contracts or costs savings initiatives had been entered
into, commenced or implemented, as applicable, on the first day of such period ((a) and (b), collectively, “Run-Rate EBITDA
Adjustments”). Run-Rate EBITDA has not been adjusted to take into account the impact of the cancellation of contracts and cost
increases associated with these contracts. These adjustments reflect monthly allocations of Acquisition EBITDA for the acquired businesses
based on straight line proration. As a result, these estimates do not take into account the seasonality of a particular acquired business.
While we do not believe the seasonality of any one acquired business is material when aggregated with other acquired businesses, the
estimates may result in a higher or lower adjustment to our Run-Rate EBITDA than would have resulted had we adjusted for the actual results
of each of the acquired businesses for the period prior to our acquisition. We primarily use Run-Rate EBITDA to show how GFL would have
performed if each of the acquired businesses had been consummated at the start of the period as well as to show the impact of the annualization
of certain new municipal and disposal contracts and cost savings initiatives. We also believe that Run-Rate EBITDA is useful to investors
and creditors to monitor and evaluate our borrowing capacity and compliance with certain of our debt covenants. Run-Rate EBITDA as presented
herein is calculated in accordance with the terms of our revolving credit agreement.
All references to “$”
in this press release are to Canadian dollars, unless otherwise noted.
For further information:
Patrick Dovigi, Founder and Chief Executive Officer
+1 905-326-0101
pdovigi@gflenv.com
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements
of Operations and Comprehensive (Loss) Income
(In millions of dollars except per share
amounts)
| |
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
| |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenue |
|
$ |
2,060.0 |
|
|
$ |
1,943.6 |
|
|
$ |
3,861.4 |
|
|
$ |
3,742.7 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
1,661.2 |
|
|
|
1,590.6 |
|
|
|
3,165.4 |
|
|
|
3,145.2 |
|
| Selling, general and administrative
expenses |
|
|
253.9 |
|
|
|
234.2 |
|
|
|
529.3 |
|
|
|
448.7 |
|
| Interest and other finance
costs |
|
|
186.9 |
|
|
|
164.8 |
|
|
|
339.9 |
|
|
|
329.5 |
|
| Loss (gain) on sale of
property and equipment |
|
|
0.2 |
|
|
|
(6.5 |
) |
|
|
(1.9 |
) |
|
|
(6.4 |
) |
| Loss (gain) on foreign
exchange |
|
|
5.4 |
|
|
|
(56.8 |
) |
|
|
80.3 |
|
|
|
(51.5 |
) |
| Mark-to-market loss on
Purchase Contracts |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
104.3 |
|
| Loss (gain) on divestiture |
|
|
494.1 |
|
|
|
(575.0 |
) |
|
|
494.1 |
|
|
|
(580.5 |
) |
| Other |
|
|
3.6 |
|
|
|
(2.3 |
) |
|
|
(0.9 |
) |
|
|
(2.3 |
) |
| |
|
|
2,605.3 |
|
|
|
1,349.0 |
|
|
|
4,606.2 |
|
|
|
3,387.0 |
|
| Share of net income (loss)
of investments accounted for using the equity method |
|
|
15.7 |
|
|
|
(61.9 |
) |
|
|
(14.9 |
) |
|
|
(82.9 |
) |
| (Loss) income before income taxes |
|
|
(529.6 |
) |
|
|
532.7 |
|
|
|
(759.7 |
) |
|
|
272.8 |
|
| Current income tax expense |
|
|
24.0 |
|
|
|
342.2 |
|
|
|
63.2 |
|
|
|
349.4 |
|
| Deferred tax recovery |
|
|
(81.3 |
) |
|
|
(103.3 |
) |
|
|
(174.1 |
) |
|
|
(152.6 |
) |
| Income tax (recovery) expense |
|
|
(57.3 |
) |
|
|
238.9 |
|
|
|
(110.9 |
) |
|
|
196.8 |
|
| Net (loss) income |
|
|
(472.3 |
) |
|
|
293.8 |
|
|
|
(648.8 |
) |
|
|
76.0 |
|
| Less: Net (loss) income
attributable to non-controlling interests |
|
|
(1.1 |
) |
|
|
(1.1 |
) |
|
|
(4.8 |
) |
|
|
0.5 |
|
| Net (loss) income attributable to GFL Environmental
Inc. |
|
|
(471.2 |
) |
|
|
294.9 |
|
|
$ |
(644.0 |
) |
|
$ |
75.5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items that may be subsequently reclassified to net
loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Currency translation adjustment |
|
|
60.6 |
|
|
|
(156.3 |
) |
|
|
201.3 |
|
|
|
(161.8 |
) |
| Fair value movements on
cash flow hedges, net of tax |
|
|
0.6 |
|
|
|
7.5 |
|
|
|
(14.7 |
) |
|
|
14.9 |
|
| Share of other comprehensive
loss of investments accounted for using the equity method |
|
|
(1.2 |
) |
|
|
(0.4 |
) |
|
|
(1.2 |
) |
|
|
(0.4 |
) |
| Reclassification to net
(loss) income of foreign currency differences on divestitures |
|
|
(26.5 |
) |
|
|
22.5 |
|
|
|
(26.5 |
) |
|
|
22.5 |
|
| Other comprehensive income (loss) |
|
|
33.5 |
|
|
|
(126.7 |
) |
|
|
158.9 |
|
|
|
(124.8 |
) |
| Total comprehensive (loss) income |
|
|
(438.8 |
) |
|
|
167.1 |
|
|
|
(489.9 |
) |
|
|
(48.8 |
) |
| Less: Total comprehensive
income attributable to non-controlling interests |
|
|
0.9 |
|
|
|
(1.3 |
) |
|
|
2.7 |
|
|
|
0.2 |
|
| Total comprehensive loss attributable to GFL Environmental
Inc. |
|
$ |
(439.7 |
) |
|
$ |
168.4 |
|
|
$ |
(492.6 |
) |
|
$ |
(49.0 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic (loss) income per share(1) |
|
$ |
(1.31 |
) |
|
$ |
0.74 |
|
|
$ |
(1.84 |
) |
|
$ |
0.08 |
|
| Diluted (loss) income per share(1) |
|
$ |
(1.31 |
) |
|
$ |
0.72 |
|
|
$ |
(1.84 |
) |
|
$ |
0.08 |
|
| Weighted average number
of shares outstanding |
|
|
376,598,800 |
|
|
|
369,225,007 |
|
|
|
374,792,781 |
|
|
|
369,200,725 |
|
| Diluted weighted average
number of shares outstanding |
|
|
376,598,800 |
|
|
|
401,218,417 |
|
|
|
374,792,781 |
|
|
|
372,779,310 |
|
| (1) | Basic and diluted loss per
share is calculated on net (loss) income attributable to GFL Environmental Inc. adjusted
for amounts attributable to preferred shareholders. Refer to Note 9 in our Unaudited Interim
Financial Statements. |
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements
of Financial Position
(In millions of dollars)
| | |
June 30,
2024 | | |
December 31,
2023 | |
| Assets | |
| | | |
| | |
| Cash | |
$ | 134.2 | | |
$ | 135.7 | |
| Trade and other receivables, net | |
| 1,186.0 | | |
| 1,080.0 | |
| Income taxes recoverable | |
| — | | |
| 47.7 | |
| Prepaid expenses and other assets | |
| 289.4 | | |
| 221.6 | |
| Current assets | |
| 1,609.6 | | |
| 1,485.0 | |
| | |
| | | |
| | |
| Property and equipment, net | |
| 7,330.2 | | |
| 6,980.7 | |
| Intangible assets, net | |
| 2,944.5 | | |
| 3,056.3 | |
| Investments accounted for using the
equity method | |
| 312.9 | | |
| 319.0 | |
| Other long-term assets | |
| 114.0 | | |
| 82.9 | |
| Deferred income tax assets | |
| 173.6 | | |
| 64.8 | |
| Goodwill | |
| 7,790.6 | | |
| 7,890.5 | |
| Non-current assets | |
| 18,665.8 | | |
| 18,394.2 | |
| Total assets | |
$ | 20,275.4 | | |
$ | 19,879.2 | |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Accounts payable and accrued liabilities | |
| 1,666.9 | | |
| 1,679.1 | |
| Income taxes payable | |
| 6.2 | | |
| — | |
| Long-term debt | |
| 10.0 | | |
| 9.7 | |
| Lease obligations | |
| 61.9 | | |
| 59.6 | |
| Due to related party | |
| 5.8 | | |
| 5.8 | |
| Landfill closure and post-closure obligations | |
| 59.4 | | |
| 56.2 | |
| Current liabilities | |
| 1,810.2 | | |
| 1,810.4 | |
| | |
| | | |
| | |
| Long-term debt | |
| 9,659.3 | | |
| 8,827.2 | |
| Lease obligations | |
| 396.6 | | |
| 383.4 | |
| Other long-term liabilities | |
| 39.8 | | |
| 39.1 | |
| Due to related party | |
| — | | |
| 2.9 | |
| Deferred income tax liabilities | |
| 485.5 | | |
| 534.0 | |
| Landfill closure and post-closure obligations | |
| 928.6 | | |
| 896.0 | |
| Non-current liabilities | |
| 11,509.8 | | |
| 10,682.6 | |
| Total liabilities | |
| 13,320.0 | | |
| 12,493.0 | |
| | |
| | | |
| | |
| Shareholders’ equity | |
| | | |
| | |
| Share capital | |
| 9,901.3 | | |
| 9,835.1 | |
| Contributed surplus | |
| 155.9 | | |
| 149.5 | |
| Deficit | |
| (3,480.1 | ) | |
| (2,822.6 | ) |
| Accumulated other comprehensive income | |
| 166.5 | | |
| 15.1 | |
| Total GFL Environmental Inc.’s shareholders’
equity | |
| 6,743.6 | | |
| 7,177.1 | |
| Non-controlling interests | |
| 211.8 | | |
| 209.1 | |
| Total shareholders’ equity | |
| 6,955.4 | | |
| 7,386.2 | |
| Total liabilities and shareholders’ equity | |
$ | 20,275.4 | | |
$ | 19,879.2 | |
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements
of Cash Flows
(In millions of dollars)
| | |
Three
months ended June 30, | | |
Six
months ended June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Operating activities | |
| | | |
| | | |
| | | |
| | |
| Net (loss) income | |
$ | (472.3 | ) | |
$ | 293.8 | | |
$ | (648.8 | ) | |
$ | 76.0 | |
| Adjustments for non-cash items | |
| | | |
| | | |
| | | |
| | |
| Depreciation of property and equipment | |
| 287.3 | | |
| 237.8 | | |
| 542.3 | | |
| 477.6 | |
| Amortization of intangible assets | |
| 110.6 | | |
| 134.0 | | |
| 219.3 | | |
| 272.8 | |
| Share of net (income) loss of investments
accounted for using the equity method | |
| (15.7 | ) | |
| 61.9 | | |
| 14.9 | | |
| 82.9 | |
| Loss (gain) on divestiture | |
| 494.1 | | |
| (575.0 | ) | |
| 494.1 | | |
| (580.5 | ) |
| Other | |
| 3.6 | | |
| (2.3 | ) | |
| (0.9 | ) | |
| (2.3 | ) |
| Interest and other finance costs | |
| 186.9 | | |
| 164.8 | | |
| 339.9 | | |
| 329.5 | |
| Share-based payments | |
| 15.6 | | |
| 15.2 | | |
| 72.6 | | |
| 30.2 | |
| Loss (gain) on unrealized foreign exchange
on long-term debt and TEUs | |
| 5.3 | | |
| (56.8 | ) | |
| 80.1 | | |
| (50.7 | ) |
| Loss (gain) on sale of property and equipment | |
| 0.2 | | |
| (6.5 | ) | |
| (1.9 | ) | |
| (6.4 | ) |
| Mark-to-market loss on Purchase Contracts | |
| — | | |
| — | | |
| — | | |
| 104.3 | |
| Current income tax expense | |
| 24.0 | | |
| 342.2 | | |
| 63.2 | | |
| 349.4 | |
| Deferred tax recovery | |
| (81.3 | ) | |
| (103.3 | ) | |
| (174.1 | ) | |
| (152.6 | ) |
| Interest paid in cash on Amortizing
Notes component of TEUs | |
| — | | |
| — | | |
| — | | |
| (0.2 | ) |
| Interest paid in cash, excluding interest
paid on Amortizing Notes | |
| (107.0 | ) | |
| (115.7 | ) | |
| (228.9 | ) | |
| (276.7 | ) |
| Income taxes paid in cash, net | |
| (4.6 | ) | |
| (8.9 | ) | |
| (6.5 | ) | |
| (10.9 | ) |
| Changes in non-cash working capital
items | |
| (76.7 | ) | |
| (116.7 | ) | |
| (129.9 | ) | |
| (182.5 | ) |
| Landfill closure
and post-closure expenditures | |
| (5.4 | ) | |
| (3.8 | ) | |
| (7.6 | ) | |
| (6.7 | ) |
| | |
| 364.6 | | |
| 260.7 | | |
| 627.8 | | |
| 453.2 | |
| Investing activities | |
| | | |
| | | |
| | | |
| | |
| Purchase of property and equipment | |
| (298.4 | ) | |
| (276.6 | ) | |
| (594.7 | ) | |
| (547.3 | ) |
| Proceeds from disposal of assets and
other | |
| 0.3 | | |
| 7.2 | | |
| 8.0 | | |
| 20.4 | |
| Proceeds from divestitures | |
| 69.5 | | |
| 1,645.9 | | |
| 69.5 | | |
| 1,645.9 | |
| Business acquisitions and investments,
net of cash acquired | |
| (439.8 | ) | |
| (58.2 | ) | |
| (551.4 | ) | |
| (282.4 | ) |
| Dividend received
from joint ventures | |
| 2.0 | | |
| — | | |
| 8.3 | | |
| — | |
| | |
| (666.4 | ) | |
| 1,318.3 | | |
| (1,060.3 | ) | |
| 836.6 | |
| Financing activities | |
| | | |
| | | |
| | | |
| | |
| Repayment of lease obligations | |
| (24.6 | ) | |
| (20.8 | ) | |
| (62.3 | ) | |
| (38.6 | ) |
| Issuance of long-term debt | |
| 1,481.9 | | |
| 1,085.3 | | |
| 2,060.7 | | |
| 1,963.1 | |
| Repayment of long-term debt | |
| (1,047.6 | ) | |
| (2,630.6 | ) | |
| (1,510.8 | ) | |
| (3,184.9 | ) |
| Proceeds from termination of hedged
arrangements | |
| — | | |
| — | | |
| — | | |
| 17.3 | |
| Payment for termination of hedged arrangements | |
| (6.4 | ) | |
| — | | |
| (6.4 | ) | |
| — | |
| Payment of contingent purchase consideration
and holdbacks | |
| (18.3 | ) | |
| (1.5 | ) | |
| (19.5 | ) | |
| (4.0 | ) |
| Repayment of Amortizing Notes | |
| — | | |
| — | | |
| — | | |
| (15.7 | ) |
| Dividends issued and paid | |
| (7.1 | ) | |
| (6.5 | ) | |
| (13.5 | ) | |
| (12.1 | ) |
| Payment of financing costs | |
| (6.3 | ) | |
| (0.9 | ) | |
| (8.7 | ) | |
| (15.0 | ) |
| Repayment of loan to related party | |
| — | | |
| — | | |
| (2.9 | ) | |
| (6.4 | ) |
| Contribution from
non-controlling interest | |
| — | | |
| — | | |
| — | | |
| 8.1 | |
| | |
| 371.6 | | |
| (1,575.0 | ) | |
| 436.6 | | |
| (1,288.2 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Increase in cash | |
| 69.8 | | |
| 4.0 | | |
| 4.1 | | |
| 1.6 | |
| Changes due to foreign exchange revaluation of cash | |
| (5.6 | ) | |
| 5.2 | | |
| (5.6 | ) | |
| (1.5 | ) |
| Cash, beginning of period | |
| 70.0 | | |
| 73.0 | | |
| 135.7 | | |
| 82.1 | |
| Cash, end of period | |
$ | 134.2 | | |
$ | 82.2 | | |
$ | 134.2 | | |
$ | 82.2 | |
SUPPLEMENTAL DATA
You should read the following
information in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31,
2023, as well as our unaudited Interim Financial Statements and notes thereto for the three and six months ended June 30, 2024.
Revenue
Growth
The following tables summarize
the revenue growth in our segments for the period indicated:
| | |
Three
months ended June 30, 2024 | |
| | |
Pro
forma excluding divestitures(1) | | |
| | |
| |
| | |
| Contribution
from
Acquisitions | | |
| Organic
Growth | | |
| Foreign
Exchange | | |
| Revenue
Growth
| | |
| Impact
from
divestitures | | |
| Total
Revenue
Growth | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
| 0.7 | % | |
| 8.3 | % | |
| — | % | |
| 9.0 | % | |
| — | % | |
| 9.0 | % |
| USA | |
| 8.0 | | |
| 3.6 | | |
| 1.9 | | |
| 13.5 | | |
| (9.7 | ) | |
| 3.8 | |
| Solid Waste | |
| 5.6 | | |
| 5.2 | | |
| 1.3 | | |
| 12.1 | | |
| (6.7 | ) | |
| 5.4 | |
| Environmental Services | |
| 6.9 | | |
| 0.5 | | |
| 0.6 | | |
| 8.0 | | |
| — | | |
| 8.0 | |
| Total | |
| 5.9 | % | |
| 4.0 | % | |
| 1.2 | % | |
| 11.1 | % | |
| (5.1 | )% | |
| 6.0 | % |
| |
(1) | Reflects pro forma adjustments to remove the contribution
of three non-core U.S Solid Waste businesses that were divested in Fiscal 2023. |
| | |
Six months
ended June 30, 2024 | |
| | |
Pro
forma excluding divestitures(1) | | |
| | |
| |
| | |
| Contribution
from
Acquisitions | | |
| Organic
Growth | | |
| Foreign
Exchange | | |
| Revenue
Growth | | |
| Impact
from
divestitures | | |
| Total
Revenue
Growth | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
| 0.7 | % | |
| 7.7 | % | |
| — | % | |
| 8.4 | % | |
| — | % | |
| 8.4 | % |
| USA | |
| 7.1 | | |
| 3.5 | | |
| 0.9 | | |
| 11.5 | | |
| (10.7 | ) | |
| 0.8 | |
| Solid Waste | |
| 5.1 | | |
| 4.8 | | |
| 0.6 | | |
| 10.5 | | |
| (7.4 | ) | |
| 3.1 | |
| Environmental Services | |
| 7.7 | | |
| (4.4 | ) | |
| 0.3 | | |
| 3.6 | | |
| — | | |
| 3.6 | |
| Total | |
| 5.7 | % | |
| 2.7 | % | |
| 0.5 | % | |
| 8.9 | % | |
| (5.7 | )% | |
| 3.2 | % |
| |
(1) | Reflects pro forma adjustments to remove the contribution
of three non-core U.S Solid Waste businesses that were divested in Fiscal 2023. |
Detail
of Solid Waste Organic Growth
The following table summarizes the components
of our Solid Waste organic growth for the periods indicated:
| | |
Pro
forma excluding
divestitures(1) | | |
| | |
| |
| | |
Three
months
ended June 30,
2024 | | |
Six
months
ended June 30,
2024 | | |
Three
months
ended June 30,
2024 | | |
Six
months
ended June 30,
2024 | |
| Price | |
| 6.5 | % | |
| 7.1 | % | |
| 6.1 | % | |
| 6.6 | % |
| Surcharges | |
| (0.5 | ) | |
| (0.7 | ) | |
| (0.5 | ) | |
| (0.7 | ) |
| Volume | |
| (1.7 | ) | |
| (2.3 | ) | |
| (1.7 | ) | |
| (2.2 | ) |
| Commodity price | |
| 0.9 | | |
| 0.8 | | |
| 0.9 | | |
| 0.8 | |
| Total Solid Waste organic growth | |
| 5.2 | % | |
| 4.8 | % | |
| 4.8 | % | |
| 4.5 | % |
| |
(1) | Reflects pro forma adjustments to remove the contribution of three
non-core U.S Solid Waste businesses that were divested in Fiscal 2023. |
Operating
Segment Results
The following tables summarize
our operating segment results for the periods indicated:
| | |
Three
months ended June 30,
2024 | | |
Three
months ended June 30,
2023 | |
| ($ millions) | |
Revenue | | |
Adjusted
EBITDA(1) | | |
Adjusted
EBITDA
Margin(2) | | |
Revenue(3) | | |
Adjusted
EBITDA(1)(4) | | |
Adjusted
EBITDA
Margin(2) | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
$ | 495.8 | | |
$ | 149.8 | | |
| 30.2 | % | |
$ | 454.9 | | |
$ | 133.2 | | |
| 29.3 | % |
| USA | |
| 1,085.8 | | |
| 364.4 | | |
| 33.6 | | |
| 1,045.8 | | |
| 340.8 | | |
| 32.6 | |
| Solid Waste | |
| 1,581.6 | | |
| 514.2 | | |
| 32.5 | | |
| 1,500.7 | | |
| 474.0 | | |
| 31.6 | |
| Environmental Services | |
| 478.4 | | |
| 141.7 | | |
| 29.6 | | |
| 442.9 | | |
| 130.9 | | |
| 29.6 | |
| Corporate | |
| — | | |
| (64.8 | ) | |
| — | | |
| — | | |
| (64.2 | ) | |
| — | |
| Total | |
$ | 2,060.0 | | |
$ | 591.1 | | |
| 28.7 | % | |
$ | 1,943.6 | | |
$ | 540.7 | | |
| 27.8 | % |
| | |
Six
months ended June 30,
2024 | | |
Six
months ended June 30,
2023 | |
| ($ millions) | |
Revenue | | |
Adjusted
EBITDA(1) | | |
Adjusted
EBITDA
Margin(2) | | |
Revenue(5) | | |
Adjusted
EBITDA(1)(6) | | |
Adjusted
EBITDA
Margin(2) | |
| Solid Waste | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Canada | |
$ | 929.4 | | |
$ | 263.4 | | |
| 28.3 | % | |
$ | 857.5 | | |
$ | 234.0 | | |
| 27.3 | % |
| USA | |
| 2,084.0 | | |
| 691.5 | | |
| 33.2 | | |
| 2,066.4 | | |
| 654.9 | | |
| 31.7 | |
| Solid Waste | |
| 3,013.4 | | |
| 954.9 | | |
| 31.7 | | |
| 2,923.9 | | |
| 888.9 | | |
| 30.4 | |
| Environmental Services | |
| 848.0 | | |
| 223.0 | | |
| 26.3 | | |
| 818.8 | | |
| 213.7 | | |
| 26.1 | |
| Corporate | |
| — | | |
| (131.1 | ) | |
| — | | |
| — | | |
| (121.4 | ) | |
| — | |
| Total | |
$ | 3,861.4 | | |
$ | 1,046.8 | | |
| 27.1 | % | |
$ | 3,742.7 | | |
$ | 981.2 | | |
| 26.2 | % |
| (1) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (2) | See “Non-IFRS Measures”
for an explanation of the composition of non-IFRS measures. |
| (3) | Includes reclassification
of $55.6 million into Environmental Services comprised of $10.9 million from Solid Waste
Canada and $44.7 million from Solid Waste USA. |
| (4) | Includes reclassification
of $17.9 million into Environmental Services comprised of $2.6 million from Solid Waste Canada
and $15.3 million from Solid Waste USA. |
| (5) | Includes reclassification
of $114.6 million into Environmental Services comprised of $20.8 million from Solid Waste
Canada and $93.8 million from Solid Waste USA. |
| (6) | Includes reclassification
of $40.0 million into Environmental Services comprised of $3.3 million from Solid Waste Canada
and $36.7 million from Solid Waste USA. |
Net
Leverage
The following table presents
the calculation of Net Leverage as at the dates indicated:
| ($ millions) | |
June 30,
2024 | | |
December 31,
2023 | |
| Total
long-term debt, net of derivative asset(1) | |
$ | 9,636.9 | | |
$ | 8,816.9 | |
| Deferred finance costs and other adjustments | |
| (66.9 | ) | |
| (17.7 | ) |
| Total long-term debt excluding deferred finance costs and
other adjustments | |
$ | 9,703.8 | | |
$ | 8,834.6 | |
| Less: cash | |
| (134.2 | ) | |
| (135.7 | ) |
| | |
| 9,569.6 | | |
| 8,698.9 | |
| | |
| | | |
| | |
| Trailing
twelve months Adjusted EBITDA(2) | |
| 2,069.3 | | |
| 2,003.7 | |
| Run-Rate
EBITDA Adjustments(3) | |
| 161.5 | | |
| 98.3 | |
| Run-Rate
EBITDA(3) | |
$ | 2,230.8 | | |
$ | 2,102.0 | |
| | |
| | | |
| | |
| Net
Leverage(2) | |
| 4.29 | x | |
| 4.14 | x |
| (1) | Total long-term debt includes
derivative asset reclassified for financial statement presentation purposes to other long-term
assets, refer to Note 7 in our unaudited Interim Financial Statements. |
| (2) | A non-IFRS measure; see accompanying
Non-IFRS Reconciliation Schedule; see “Non-IFRS Measures” for an explanation
of the composition of non-IFRS measures. |
| (3) | See “Non-IFRS Measures”
for an explanation of the composition of non-IFRS measures and ratios. |
Shares
Outstanding
The following table presents
the total shares outstanding as at the date indicated:
| | |
June 30,
2024 | |
| Subordinate voting shares | |
| 364,726,221 | |
| Multiple voting shares | |
| 11,812,964 | |
| Basic shares outstanding | |
| 376,539,185 | |
| Effect of dilutive instruments | |
| 8,583,676 | |
| Series A Preferred Shares (as converted) | |
| 27,013,736 | |
| Series B Preferred Shares (as converted) | |
| 7,951,890 | |
| Diluted shares outstanding | |
| 420,088,487 | |
NON-IFRS RECONCILIATION SCHEDULE
Adjusted
EBITDA
The following tables provide
a reconciliation of our net (loss) income to EBITDA and Adjusted EBITDA for the periods indicated:
| ($ millions) | |
Three
months ended June 30,
2024 | | |
Three
months ended June 30,
2023 | |
| Net (loss) income | |
$ | (472.3 | ) | |
$ | 293.8 | |
| Add: | |
| | | |
| | |
| Interest and other finance costs | |
| 186.9 | | |
| 164.8 | |
| Depreciation of property and equipment | |
| 287.3 | | |
| 237.8 | |
| Amortization of intangible assets | |
| 110.6 | | |
| 134.0 | |
| Income tax (recovery)
expense | |
| (57.3 | ) | |
| 238.9 | |
| EBITDA | |
| 55.2 | | |
| 1,069.3 | |
| Add: | |
| | | |
| | |
| Loss
(gain) on foreign exchange(1) | |
| 5.4 | | |
| (56.8 | ) |
| Loss (gain) on sale of property and
equipment | |
| 0.2 | | |
| (6.5 | ) |
| Share
of net (income) loss of investments accounted for using the equity method(3) | |
| (11.2 | ) | |
| 61.9 | |
| Share-based
payments(4) | |
| 15.6 | | |
| 15.2 | |
| Loss
(gain) on divestiture(5) | |
| 494.1 | | |
| (575.0 | ) |
| Transaction
costs(6) | |
| 16.2 | | |
| 29.6 | |
| Acquisition,
rebranding and other integration costs(7) | |
| 1.8 | | |
| 5.3 | |
| Founder/CEO
remuneration(8) | |
| 10.2 | | |
| — | |
| Other | |
| 3.6 | | |
| (2.3 | ) |
| Adjusted EBITDA | |
$ | 591.1 | | |
$ | 540.7 | |
| ($ millions) | |
Six
months ended June 30,
2024 | | |
Six
months ended June 30,
2023 | |
| Net (loss) income | |
$ | (648.8 | ) | |
$ | 76.0 | |
| Add: | |
| | | |
| | |
| Interest and other finance costs | |
| 339.9 | | |
| 329.5 | |
| Depreciation of property and equipment | |
| 542.3 | | |
| 477.6 | |
| Amortization of intangible assets | |
| 219.3 | | |
| 272.8 | |
| Income tax (recovery)
expense | |
| (110.9 | ) | |
| 196.8 | |
| EBITDA | |
| 341.8 | | |
| 1,352.7 | |
| Add: | |
| | | |
| | |
| Loss
(gain) on foreign exchange(1) | |
| 80.3 | | |
| (51.5 | ) |
| Gain on sale of property and equipment | |
| (1.9 | ) | |
| (6.4 | ) |
| Mark-to-market
loss on Purchase Contracts(2) | |
| — | | |
| 104.3 | |
| Share
of net loss of investments accounted for using the equity method(3) | |
| 26.0 | | |
| 82.9 | |
| Share-based
payments(4) | |
| 72.6 | | |
| 30.2 | |
| Loss
(gain) on divestiture(5) | |
| 494.1 | | |
| (580.5 | ) |
| Transaction
costs(6) | |
| 22.3 | | |
| 41.6 | |
| Acquisition,
rebranding and other integration costs(7) | |
| 2.3 | | |
| 10.2 | |
| Founder/CEO
remuneration(8) | |
| 10.2 | | |
| — | |
| Other | |
| (0.9 | ) | |
| (2.3 | ) |
| Adjusted EBITDA | |
$ | 1,046.8 | | |
$ | 981.2 | |
| (1) | Consists of (i) non-cash
gains and losses on foreign exchange and interest rate swaps entered into in connection with
our debt instruments and (ii) gains and losses attributable to foreign exchange rate
fluctuations. |
| (2) | This is a non-cash item that
consists of the fair value “mark-to-market” adjustment on the Purchase Contracts. |
| (3) | Excludes share of net income
of investments accounted for using the equity method for RNG projects. |
| (4) | This is a non-cash item and
consists of the amortization of the estimated fair value of share-based payments granted
to certain members of management under share-based payment plans. |
| (5) | Consists of gains and losses
resulting from the divestiture of certain assets and three non-core U.S. Solid Waste businesses. |
| (6) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (7) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (8) | Consists of cash payment to
the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the prior year period as reflected in “All Other Compensation”
in the 2024 Management Information Circular. |
Adjusted
Net Income
The following tables provide
a reconciliation of our net (loss) income to Adjusted Net Income for the periods indicated:
| ($ millions) | |
Three
months ended June 30,
2024 | | |
Three
months ended June 30,
2023 | |
| Net (loss) income | |
$ | (472.3 | ) | |
$ | 293.8 | |
| Add: | |
| | | |
| | |
| Amortization
of intangible assets(1) | |
| 110.6 | | |
| 134.0 | |
| ARO
discount rate depreciation adjustment(2) | |
| 4.3 | | |
| — | |
| Incremental depreciation of property
and equipment due to recapitalization | |
| — | | |
| 3.0 | |
| Amortization of deferred financing
costs | |
| 7.1 | | |
| 3.9 | |
| Loss
(gain) on foreign exchange(3) | |
| 5.4 | | |
| (56.8 | ) |
| Share
of net (income) loss of investments accounted for using the equity method(5) | |
| (11.2 | ) | |
| 61.9 | |
| Loss
on termination of hedged arrangements(6) | |
| 17.2 | | |
| — | |
| Loss
(gain) on divestiture(7) | |
| 494.1 | | |
| (575.0 | ) |
| Transaction
costs(8) | |
| 16.2 | | |
| 29.6 | |
| Acquisition,
rebranding and other integration costs(9) | |
| 1.8 | | |
| 5.3 | |
| Founder/CEO
remuneration(10) | |
| 10.2 | | |
| — | |
| Other | |
| 3.6 | | |
| (2.3 | ) |
| Tax
effect(11) | |
| (78.3 | ) | |
| 298.8 | |
| Adjusted Net Income | |
$ | 108.7 | | |
$ | 196.2 | |
| Adjusted income per share, basic | |
$ | 0.29 | | |
$ | 0.53 | |
| Adjusted income per share, diluted | |
$ | 0.29 | | |
$ | 0.49 | |
| ($ millions) | |
Six
months ended June 30,
2024 | | |
Six
months ended June 30,
2023 | |
| Net (loss) income | |
$ | (648.8 | ) | |
$ | 76.0 | |
| Add: | |
| | | |
| | |
| Amortization
of intangible assets(1) | |
| 219.3 | | |
| 272.8 | |
| ARO
discount rate depreciation adjustment(2) | |
| 4.3 | | |
| — | |
| Incremental depreciation of property
and equipment due to recapitalization | |
| — | | |
| 7.5 | |
| Amortization of deferred financing
costs | |
| 12.0 | | |
| 9.2 | |
| Loss
(gain) on foreign exchange(3) | |
| 80.3 | | |
| (51.5 | ) |
| Mark-to-market
loss on Purchase Contracts(4) | |
| — | | |
| 104.3 | |
| Share
of net loss of investments accounted for using the equity method(5) | |
| 26.0 | | |
| 82.9 | |
| Loss
on termination of hedged arrangements(6) | |
| 17.2 | | |
| — | |
| Loss
(gain) on divestiture(7) | |
| 494.1 | | |
| (580.5 | ) |
| Transaction
costs(8) | |
| 22.3 | | |
| 41.6 | |
| Acquisition,
rebranding and other integration costs(9) | |
| 2.3 | | |
| 10.2 | |
| Founder/CEO
remuneration(10) | |
| 10.2 | | |
| — | |
| TEU amortization expense | |
| — | | |
| 0.1 | |
| Other | |
| (0.9 | ) | |
| (2.3 | ) |
| Tax
effect(11) | |
| (128.7 | ) | |
| 254.6 | |
| Adjusted Net Income | |
$ | 109.6 | | |
$ | 224.9 | |
| Adjusted income per share, basic | |
$ | 0.29 | | |
$ | 0.61 | |
| Adjusted income per share, diluted | |
$ | 0.29 | | |
$ | 0.60 | |
| (1) | This is a non-cash item and
consists of the amortization of intangible assets such as customer lists, municipal contracts,
non-compete agreements, trade name and other licenses. |
| (2) | This is a non-cash item and
consists of depreciation expense related to the difference between the ARO calculated using
the credit adjusted risk-free discount rate required for measurement of the ARO through purchase
accounting compared to the risk-free discount rate required for quarterly valuations. |
| (3) | Consists of (i) non-cash gains
and losses on foreign exchange and interest rate swaps entered into in connection with our
debt instruments and (ii) gains and losses attributable to foreign exchange rate fluctuations. |
| (4) | This is a non-cash item that
consists of the fair value “mark-to-market” adjustment on the Purchase Contracts. |
| (5) | Excludes share of net income
of investments accounted for using the equity method for RNG projects. |
| (6) | Consists of gains and losses
on the termination of hedged arrangements associated with the 4.250% 2025 Secured Notes and
the 4.750% 2029 Notes. |
| (7) | Consists of gains and losses
resulting from the divestiture of certain assets and non-core U.S. Solid Waste businesses. |
| (8) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (9) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (10) | Consists of cash payment
to the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the prior year period as reflected in “All Other Compensation”
in the 2024 Management Information Circular. |
| (11) | Consists of the tax effect
of the adjustments to net loss. |
Adjusted
Cash Flows from Operating Activities and Adjusted Free Cash Flow
The
following tables provide a reconciliation of our cash flows from operating activities to Adjusted Cash Flows from Operating Activities
and Adjusted Free Cash Flow for the periods indicated:
| ($ millions) | |
Three
months ended June 30,
2024 | | |
Three
months ended June 30,
2023 | |
| Cash flows from operating activities | |
$ | 364.6 | | |
$ | 260.7 | |
| Add: | |
| | | |
| | |
| Transaction
costs(1) | |
| 16.2 | | |
| 29.6 | |
| Acquisition,
rebranding and other integration costs(2) | |
| 1.8 | | |
| 5.3 | |
| Founder/CEO
remuneration(3) | |
| 10.2 | | |
| — | |
| Distribution received
from joint ventures | |
| 2.0 | | |
| — | |
| Adjusted Cash Flows from Operating Activities | |
| 394.8 | | |
| 295.6 | |
| Proceeds on disposal of assets and
other | |
| 0.3 | | |
| 7.2 | |
| Purchase of property
and equipment | |
| (298.4 | ) | |
| (280.6 | ) |
| Adjusted Free Cash Flow (including incremental growth
investments) | |
| 96.7 | | |
| 22.2 | |
| Incremental
growth investments(5) | |
| 89.0 | | |
| (13.7 | ) |
| Adjusted Free Cash Flow | |
$ | 185.7 | | |
$ | 8.5 | |
| ($ millions) | |
Six
months ended June 30,
2024 | | |
Six
months ended June 30,
2023 | |
| Cash flows from operating activities | |
$ | 627.8 | | |
$ | 453.2 | |
| Add: | |
| | | |
| | |
| Transaction
costs(1) | |
| 22.3 | | |
| 41.6 | |
| Acquisition,
rebranding and other integration costs(2) | |
| 2.3 | | |
| 10.2 | |
| Founder/CEO
remuneration(3) | |
| 10.2 | | |
| — | |
| Cash
interest paid on TEUs(4) | |
| — | | |
| 0.2 | |
| Distribution received
from joint ventures | |
| 8.3 | | |
| — | |
| Adjusted Cash Flows from Operating Activities | |
| 670.9 | | |
| 505.2 | |
| Proceeds on disposal of assets and
other | |
| 8.0 | | |
| 20.4 | |
| Purchase of property
and equipment | |
| (594.7 | ) | |
| (553.5 | ) |
| Adjusted Free Cash Flow (including incremental growth
investments) | |
| 84.2 | | |
| (27.9 | ) |
| Incremental
growth investments(5) | |
| 150.6 | | |
| (18.4 | ) |
| Adjusted Free Cash Flow | |
$ | 234.8 | | |
$ | (46.3 | ) |
| (1) | Consists of acquisition, integration
and other costs such as legal, consulting and other fees and expenses incurred in respect
of acquisitions and financing activities completed during the applicable period. We expect
to incur similar costs in connection with other acquisitions in the future, and, under IFRS,
such costs relating to acquisitions are expensed as incurred and not capitalized. This is
part of SG&A. |
| (2) | Consists of costs related
to the rebranding of equipment acquired through business acquisitions. We expect to incur
similar costs in connection with other acquisitions in the future. This is part of cost of
sales. |
| (3) | Consists of cash payment to
the Founder and CEO, which payment had been satisfied through the issuance of restricted
share units in the prior year period as reflected in “All Other Compensation”
in the 2024 Management Information Circular. |
| (4) | Consists of interest paid
in cash on the Amortizing Notes. |
| (5) | Consists of incremental sustainability
related capital projects, primarily related to recycling and RNG. |
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