- Revenue of $1,890.0 million,
increase of 10.3% excluding the impact of divestitures; 3.2%
including the impact of divestitures
- Solid Waste price of 8.8%
- Adjusted EBITDA1 of $530.3
million, increase of 12.0%; Net income from continuing
operations of $18.3 million; Adjusted
Net Income from continuing operations1 of $116.8 million
- Adjusted EBITDA margin1 of 28.1%; Solid Waste
Adjusted EBITDA margin1 of 31.4%; Environmental Services
Adjusted EBITDA margin1 of 30.9%
- Adjusted Cash Flows from Operating Activities1 of
$400.5 million; cash flows from
operating activities of $125.8
million; Adjusted Free Cash Flow1 of $276.0 million
- Year-to-date completed acquisitions generating approximately
$325 million2 in
annualized revenue
VAUGHAN,
ON, Nov. 1, 2023 /PRNewswire/ - GFL
Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL", "we" or "our")
today announced its results for the third quarter of 2023.
"Once again in the third quarter, our employees
delivered results that exceeded our expectations," said
Patrick Dovigi, Founder and Chief
Executive Officer of GFL. "Total revenue for the quarter, excluding
non-core asset divestitures, increased 10.3% over the prior year
period, driven primarily by Solid Waste core pricing increase of
8.8% and our continued focus on the quality of our revenue. We also
saw significant margin improvement during this quarter across both
our lines of business, with Solid Waste Adjusted EBITDA
margin1 up 250 bps year over year, inclusive of
headwinds from M&A, commodity pricing and fuel, and
Environmental Services Adjusted EBITDA margin1 up 440
bps. These results are a testament to the strength of our business
and our ability to execute on the many self-help levers in our
portfolio."
Mr. Dovigi added, "We continue to manage our
asset base to create long term sustainable shareholder value. In
the second quarter we completed divestitures of certain non-core
assets and are reinvesting a portion of those proceeds into higher
margin, accretive organic growth initiatives, such as RNG projects
and new contract wins driven by Extended Producer Responsibility
recycling regulations in Canada.
Our base business has now scaled to the point where we expect
organic growth to outpace growth from M&A, as we focus
primarily on tuck-in acquisitions to densify our existing
footprint."
"Even in this current high interest rate
environment, this quarter we reduced our cost of borrowing by 60
bps under our senior secured term loan, reflecting the continued
support of our high quality, long-standing institutional debt
investors. We remain committed to deleveraging our balance sheet.
With the progressive improvements we are making in our business, we
expect to continue to realize material credit quality enhancements
in the near to medium term, leading to our achieving an investment
grade rating before the majority of our fixed rate debt matures in
2028 and beyond, positioning us for improved free cash flow
conversion."
Mr. Dovigi concluded, "Our strong results year to
date position us well for outsized operating leverage next year.
Our preliminary 2024 outlook sets us up to achieve high single
digit top line growth, inclusive of approximately $210 million of M&A roll over revenue
from acquisitions already completed and before considering the
impact of divestitures from earlier this year. By continuing to
apply our proven strategy that drove margin expansion this year, we
expect another year of outsized Adjusted EBITDA
margin1,3 expansion, which should also drive low teens
Adjusted EBITDA1,3 growth, or at least 10% when
considering the impact of divestitures. We look forward to
providing our formal guidance for 2024 when we report our year-end
results."
Third Quarter Results
- Revenue of $1,890.0 million in
the third quarter of 2023, increase of 10.3% excluding the impact
of divestitures (3.2% including the impact of divestitures),
compared to the third quarter of 2022.
- Solid Waste revenue of $1,502.5
million, including organic growth of 4.2% driven
predominantly by core pricing increases.
- Environmental Services revenue of $387.5
million, including organic growth of 6.9% excluding the
impact of $30.0 million of revenue
contributed from an outsized amount of sub-contracting work in the
third quarter of 2022 ((1.9)% including this impact). The increase
is predominantly due to higher industrial collection and processing
activity at our facilities and an increased level of emergency
response activity, offset by a reduction in contaminated soil
volumes.
- Adjusted EBITDA1 increased by 12.0% to $530.3 million in the third quarter of 2023,
compared to the third quarter of 2022. Adjusted EBITDA
margin1 was 28.1% in the third quarter of 2023, compared
to 25.8% in the third quarter of 2022. Solid Waste Adjusted EBITDA
margin1 was 31.4% in the third quarter of 2023, compared
to 28.9% in the third quarter of 2022.
- Net income from continuing operations was $18.3 million in the third quarter of 2023,
compared to net loss from continuing operations of $183.7 million in the third quarter of 2022.
- Adjusted Free Cash Flow1 was $276.0 million in the third quarter of 2023,
compared to $97.0 million in the
third quarter of 2022. The increase of $179.0 million was inclusive of $248.6 million of incremental cash taxes related
to divestitures and $21.6 million of
incremental cash interest paid, offset by a decrease of
$84.9 million of incremental net
capex.
Year to Date Results
- Revenue of $5,632.7 million for
the nine months ended September 30,
2023, increase of 17.8% excluding the impact of divestitures
(14.0% including the impact of divestitures), compared to the nine
months ended September 30, 2022.
- Solid Waste revenue of $4,541.0
million, including organic growth of 6.8% driven
predominantly by core pricing increases.
- Environmental Services revenue of $1,091.7 million, including organic growth of
12.9% excluding the impact of $30.0
million of revenue contributed from an outsized amount of
sub-contracting work in the nine months ended September 30, 2022 (9.2% including this impact).
The increase is predominantly due to higher industrial collection
and processing activity at our facilities and an increased level of
emergency response activity.
- Adjusted EBITDA1 increased by 18.0% to $1,511.5 million for the nine months ended
September 30, 2023, compared to nine
months ended September 30, 2022.
Adjusted EBITDA margin1 was 26.8% for the nine months
ended September 30, 2023, compared to
25.9% for the nine months ended September
30, 2022. Solid Waste Adjusted EBITDA margin1 was
30.8% for the nine months ended September
30, 2023, compared to 29.3% for the nine months ended
September 30, 2022.
- Net income from continuing operations was $94.3 million for the nine months ended
September 30, 2023, compared to net
income from continuing operations of $35.9
million for the nine months ended September 30, 2022.
- Adjusted Free Cash Flow1 was $235.8 million for the nine months ended
September 30, 2023, compared to
$317.8 million for the nine months
ended September 30, 2022. The
decrease of $82.0 million was
inclusive of $248.6 million of
incremental cash taxes related to divestitures, $195.9 million of incremental net capex and
$114.6 million of incremental cash
interest paid.
______________________
|
(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)
Includes the expected contribution of acquisitions completed in
2023 (other than contribution from 2023 acquisitions previously
reflected in the Company's 2023 full year guidance provided on
February 21, 2023).
|
(3) Information
contained herein includes preliminary 2024 outlook with respect to
Adjusted EBITDA and Adjusted EBITDA margin which are non-IFRS
measures. 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 Third Quarter
Results and Year to Date Results for the equivalent historical
non-IFRS measure.
|
Q3 2023 Earnings Call
GFL will host a conference call related to our
third quarter earnings on November 2,
2023 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: 591692) 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=1e99cb82&confId=54948.
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 November 16, 2023 by
dialing 1-226-828-7578 in Canada
or 1-866-813-9403 in the United
States (access code: 103479). A copy of the presentation for
the call will be available on our website at investors.gflenv.com
or by clicking here.
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 or
the markets in which we operate is 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; 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 non-core assets on terms
acceptable to us; 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; our
ability to maintain a favourable working capital position; the
impact of competition; the changes and trends in our industry or
the global economy; changes in laws, rules, regulations, and global
standards; and the duration and severity of the COVID-19 pandemic,
including variants, and its impact on the economy, the North
American financial markets, our operations, our M&A pipeline
and our financial results. 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, 2022 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. The 2024 preliminary outlook includes the
expected contribution of acquisitions already completed in 2023,
net of divestitures completed to date, but excludes any impact from
acquisitions not yet completed. Implicit in forward-looking
information in respect of our preliminary outlook for 2024 are
certain current assumptions, including, among others, no changes to
the current economic environment, including fuel and commodities.
The 2024 preliminary outlook assumes GFL will continue to execute
on its strategy of organically growing our business, leverage our
scalable network to attract and retain customers across multiple
service lines, realize operational efficiencies, and extract
procurement and cost synergies.
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
or 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)
from continuing operations 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) from continuing
operations. 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, (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) and (i) other. We use Adjusted EBITDA to facilitate a
comparison of our operating performance on a consistent basis
reflecting factors and trends affecting our business. For the three
and nine months ended September 30,
2023, we added back our share of net (income) loss of
investments accounted for using the equity method. 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) operating cash
flows from discontinued operations, (b) transaction costs, (c)
acquisition, rebranding and other integration costs, (d) M&A
related net working capital investment, (e) cash interest paid on
TEUs and (f) cash taxes related to divestitures. Adjusted Cash
Flows from Operating Activities is a supplemental measure used by
investors as a valuation and liquidity measure in our industry.
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 from disposal of
assets and other, (b) purchase of property and equipment, (c)
investment in joint ventures and (d) incremental growth
investments. For the three and nine months ended September 30, 2022, purchase of property and
equipment excludes those by GFL's Infrastructure services division
("GFL Infrastructure"). 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.
Adjusted Net Income (Loss) from continuing operations represents
net income (loss) for continuing operations 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) gain (loss) on divestiture, (i) transaction costs, (j)
acquisition, rebranding and other integration costs, (k) TEU
amortization expense, (l) other and (m) the tax impact of the
forgoing. For the three and nine months ended September 30, 2023,
we added back our share of net (income) loss of investments
accounted for using the equity method. Adjusted earnings (loss) per
share from continuing operations is defined as Adjusted Net Income
(Loss) from continuing operations divided by the weighted average
shares in the period. We believe that Adjusted earnings (loss) per
share from continuing operations 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.
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 interim
acquisitions 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 Income
(In millions of dollars except per share amounts)
|
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
|
$
1,890.0
|
|
$
1,831.2
|
|
$
5,632.7
|
|
$
4,940.1
|
Expenses
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,526.8
|
|
1,591.9
|
|
4,672.0
|
|
4,339.5
|
Selling, general and
administrative expenses
|
|
234.7
|
|
187.5
|
|
683.4
|
|
528.6
|
Interest and other
finance costs
|
|
137.2
|
|
136.2
|
|
466.7
|
|
340.7
|
Gain on sale of
property and equipment
|
|
(6.7)
|
|
(5.7)
|
|
(13.1)
|
|
(10.1)
|
Loss (gain) on foreign
exchange
|
|
46.9
|
|
195.3
|
|
(4.6)
|
|
249.3
|
Mark-to-market (gain)
loss on Purchase Contracts
|
|
—
|
|
(10.3)
|
|
104.3
|
|
(391.4)
|
Loss (gain) on
divestiture
|
|
—
|
|
1.6
|
|
(580.5)
|
|
(4.9)
|
Other
|
|
(15.2)
|
|
3.4
|
|
(17.5)
|
|
12.5
|
|
|
1,923.7
|
|
2,099.9
|
|
5,310.7
|
|
5,064.2
|
Share of net income
(loss) of investments accounted for using the equity
method
|
|
34.0
|
|
9.2
|
|
(48.9)
|
|
14.5
|
Earnings (loss) before
income taxes
|
|
0.3
|
|
(259.5)
|
|
273.1
|
|
(109.6)
|
Current income tax
expense (recovery)
|
|
18.1
|
|
(3.4)
|
|
367.5
|
|
7.5
|
Deferred tax
recovery
|
|
(36.1)
|
|
(72.4)
|
|
(188.7)
|
|
(153.0)
|
Income tax (recovery)
expense
|
|
(18.0)
|
|
(75.8)
|
|
178.8
|
|
(145.5)
|
Net income (loss) from
continuing operations
|
|
18.3
|
|
(183.7)
|
|
94.3
|
|
35.9
|
Net loss from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
(127.9)
|
Net income
(loss)
|
|
18.3
|
|
(183.7)
|
|
94.3
|
|
(92.0)
|
Less: Net loss
attributable to non-controlling interests
|
|
(3.8)
|
|
(0.2)
|
|
(3.3)
|
|
(0.2)
|
Net income (loss)
attributable to GFL Environmental Inc.
|
|
22.1
|
|
(183.5)
|
|
97.6
|
|
(91.8)
|
|
|
|
|
|
|
|
|
|
Items that may be
subsequently reclassified to net income
|
|
|
|
|
|
|
|
|
Currency translation
adjustment
|
|
119.4
|
|
420.0
|
|
(42.4)
|
|
526.3
|
Fair value movements
on cash flow hedges, net of tax
|
|
10.7
|
|
(73.4)
|
|
25.6
|
|
(74.2)
|
Share of other
comprehensive loss of investments accounted for using the equity
method
|
|
—
|
|
—
|
|
(0.4)
|
|
—
|
Reclassification to
net income of foreign currency differences on
divestitures
|
|
—
|
|
—
|
|
22.5
|
|
—
|
Other comprehensive
income from continuing operations
|
|
130.1
|
|
346.6
|
|
5.3
|
|
452.1
|
Comprehensive income
from continuing operations
|
|
148.4
|
|
162.9
|
|
99.6
|
|
488.0
|
Comprehensive loss from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
(127.9)
|
Total comprehensive
income
|
|
148.4
|
|
162.9
|
|
99.6
|
|
360.1
|
Less: Total
comprehensive loss attributable to non-controlling
interests
|
|
(4.5)
|
|
—
|
|
(4.3)
|
|
—
|
Total comprehensive
income attributable to GFL Environmental Inc.
|
|
$
152.9
|
|
$
162.9
|
|
$
103.9
|
|
$
360.1
|
|
|
|
|
|
|
|
|
|
Basic and diluted
(loss) earnings per share(1)
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
—
|
|
$
(0.55)
|
|
$
0.08
|
|
$
(0.07)
|
Discontinued
operations
|
|
—
|
|
—
|
|
—
|
|
(0.35)
|
Total
operations
|
|
$
—
|
|
$
(0.55)
|
|
$
0.08
|
|
$
(0.42)
|
Weighted average
number of shares outstanding(2)
|
|
369,556,706
|
|
368,627,958
|
|
369,320,689
|
|
366,521,465
|
Diluted weighted
average number of shares outstanding(2)
|
|
369,556,706
|
|
368,627,958
|
|
372,007,592
|
|
366,521,465
|
|
(1) Basic and diluted earnings per share is
calculated on net income attributable to GFL Environmental Inc.
adjusted for amounts attributable to preferred shareholders. Refer
to Note 10 in our Interim Financial
Statements.
|
(2) Basic and diluted earnings per share
includes the minimum conversion of TEUs into subordinate voting
shares, which represented nil subordinate voting shares as at
September 30, 2023 (25,663,094 subordinate voting shares as at
September 30, 2022).
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Financial
Position
(In millions of dollars)
|
|
September 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
|
Cash
|
|
$
174.2
|
|
$
82.1
|
Trade and other
receivables, net
|
|
1,182.8
|
|
1,118.1
|
Prepaid expenses and
other assets
|
|
248.0
|
|
182.9
|
Current
assets
|
|
1,605.0
|
|
1,383.1
|
|
|
|
|
|
Property and
equipment, net
|
|
6,863.3
|
|
6,540.3
|
Intangible assets,
net
|
|
3,056.0
|
|
3,245.0
|
Investments accounted
for using the equity method
|
|
316.2
|
|
326.6
|
Other long-term
assets
|
|
112.6
|
|
90.2
|
Deferred income tax
assets
|
|
38.9
|
|
—
|
Goodwill
|
|
7,898.4
|
|
8,182.4
|
Non-current
assets
|
|
18,285.4
|
|
18,384.5
|
Total
assets
|
|
19,890.4
|
|
19,767.6
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
1,552.8
|
|
1,557.7
|
Income taxes
payable
|
|
107.3
|
|
—
|
Long-term
debt
|
|
—
|
|
17.9
|
Lease
obligations
|
|
53.9
|
|
51.5
|
Due to related
party
|
|
5.8
|
|
9.3
|
Tangible equity
units
|
|
—
|
|
1,024.9
|
Landfill closure and
post-closure obligations
|
|
36.5
|
|
30.8
|
Current
liabilities
|
|
1,756.3
|
|
2,692.1
|
|
|
|
|
|
Long-term
debt
|
|
8,848.9
|
|
9,248.9
|
Lease
obligations
|
|
367.6
|
|
327.3
|
Other long-term
liabilities
|
|
39.9
|
|
47.5
|
Due to related
party
|
|
2.9
|
|
8.7
|
Deferred income tax
liabilities
|
|
550.0
|
|
582.6
|
Landfill closure and
post-closure obligations
|
|
811.6
|
|
816.4
|
Non-current
liabilities
|
|
10,620.9
|
|
11,031.4
|
Total
liabilities
|
|
12,377.2
|
|
13,723.5
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Share
capital
|
|
9,786.4
|
|
8,640.3
|
Contributed
surplus
|
|
130.1
|
|
109.6
|
Deficit
|
|
(2,763.9)
|
|
(2,843.0)
|
Accumulated other
comprehensive income
|
|
136.6
|
|
130.3
|
Total GFL
Environmental Inc.'s shareholders' equity
|
|
7,289.2
|
|
6,037.2
|
Non-controlling
interests
|
|
224.0
|
|
6.9
|
Total shareholders'
equity
|
|
7,513.2
|
|
6,044.1
|
Total liabilities
and shareholders' equity
|
|
$
19,890.4
|
|
$
19,767.6
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Cash
Flows
(In millions of dollars)
|
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
18.3
|
|
$
(183.7)
|
|
$
94.3
|
|
$
(92.0)
|
Adjustments for
non-cash items
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
242.3
|
|
264.0
|
|
719.9
|
|
736.8
|
Amortization of
intangible assets
|
|
106.9
|
|
124.2
|
|
379.7
|
|
383.3
|
Share of net (income)
loss of investments accounted for using the equity
method
|
|
(34.0)
|
|
(9.2)
|
|
48.9
|
|
(14.5)
|
Loss (gain) on
divestiture
|
|
—
|
|
1.6
|
|
(580.5)
|
|
(4.9)
|
Other
|
|
(15.2)
|
|
3.4
|
|
(17.5)
|
|
12.5
|
Impairment related to
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
128.1
|
Interest and other
finance costs
|
|
137.2
|
|
136.2
|
|
466.7
|
|
344.2
|
Share-based
payments
|
|
26.5
|
|
13.4
|
|
56.7
|
|
40.0
|
Loss (gain) on
unrealized foreign exchange on long-term debt and TEUs
|
|
47.2
|
|
196.3
|
|
(3.5)
|
|
249.6
|
Gain on sale of
property and equipment
|
|
(6.7)
|
|
(5.7)
|
|
(13.1)
|
|
(10.1)
|
Mark-to-market (gain)
loss on Purchase Contracts
|
|
—
|
|
(10.3)
|
|
104.3
|
|
(391.4)
|
Current income tax
expense (recovery)
|
|
18.1
|
|
(3.4)
|
|
367.5
|
|
7.6
|
Deferred tax
recovery
|
|
(36.1)
|
|
(72.4)
|
|
(188.7)
|
|
(154.9)
|
Interest paid in cash
on Amortizing Notes component of TEUs
|
|
—
|
|
(0.4)
|
|
(0.2)
|
|
(1.7)
|
Interest paid in cash,
excluding interest paid on Amortizing Notes
|
|
(134.8)
|
|
(113.2)
|
|
(411.5)
|
|
(296.9)
|
Income taxes paid in
cash, net
|
|
(250.9)
|
|
(2.6)
|
|
(261.8)
|
|
(22.1)
|
Changes in non-cash
working capital items
|
|
12.9
|
|
(40.8)
|
|
(169.6)
|
|
(201.2)
|
Landfill closure and
post-closure expenditures
|
|
(5.9)
|
|
(11.3)
|
|
(12.6)
|
|
(19.1)
|
|
|
125.8
|
|
286.1
|
|
579.0
|
|
693.3
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(276.3)
|
|
(207.6)
|
|
(823.6)
|
|
(529.5)
|
Proceeds from disposal
of assets and other
|
|
30.6
|
|
2.5
|
|
51.0
|
|
8.9
|
Proceeds from
divestitures
|
|
—
|
|
9.9
|
|
1,645.9
|
|
319.7
|
Business acquisitions
and investments, net of cash acquired
|
|
(392.3)
|
|
(139.5)
|
|
(674.7)
|
|
(1,129.0)
|
|
|
(638.0)
|
|
(334.7)
|
|
198.6
|
|
(1,329.9)
|
Financing
activities
|
|
|
|
|
|
|
|
|
Repayment of lease
obligations
|
|
(30.8)
|
|
(16.8)
|
|
(69.4)
|
|
(51.8)
|
Issuance of long-term
debt
|
|
1,069.0
|
|
155.0
|
|
3,032.1
|
|
1,446.1
|
Repayment of long-term
debt
|
|
(412.2)
|
|
(40.3)
|
|
(3,597.1)
|
|
(588.2)
|
Proceeds from
termination of hedged arrangements
|
|
—
|
|
—
|
|
17.3
|
|
—
|
Payment of contingent
purchase consideration and holdbacks
|
|
(0.6)
|
|
(2.9)
|
|
(4.6)
|
|
(13.1)
|
Repayment of
Amortizing Notes
|
|
—
|
|
(14.8)
|
|
(15.7)
|
|
(43.0)
|
Dividends issued and
paid
|
|
(6.4)
|
|
(5.4)
|
|
(18.5)
|
|
(15.1)
|
Payment of financing
costs
|
|
(11.2)
|
|
(0.7)
|
|
(26.2)
|
|
(2.6)
|
Repayment of loan to
related party
|
|
(2.9)
|
|
(6.4)
|
|
(9.3)
|
|
(12.8)
|
Contribution from
non-controlling interest
|
|
—
|
|
—
|
|
8.1
|
|
—
|
|
|
604.9
|
|
67.7
|
|
(683.3)
|
|
719.5
|
|
|
|
|
|
|
|
|
|
Increase in
cash
|
|
92.7
|
|
19.1
|
|
94.3
|
|
82.9
|
Changes due to foreign
exchange revaluation of cash
|
|
(0.7)
|
|
(12.3)
|
|
(2.2)
|
|
(35.9)
|
Cash, beginning of
period
|
|
82.2
|
|
230.6
|
|
82.1
|
|
190.4
|
Cash, end of
period
|
|
$
174.2
|
|
$
237.4
|
|
$
174.2
|
|
$
237.4
|
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,
2022, as well as our unaudited Interim Financial Statements
and notes thereto for the three and nine months ended September 30, 2023.
Revenue Growth
The following tables summarize the revenue growth in our
segments for the periods indicated:
|
|
Three months ended
September 30, 2023
|
|
|
Contribution
from
Acquisitions
|
|
Organic
Growth
|
|
Foreign
Exchange
|
|
Total Revenue
Growth
|
Solid Waste
|
|
|
|
|
|
|
|
|
Canada
|
|
1.2 %
|
|
4.8 %
|
|
— %
|
|
6.0 %
|
USA
|
|
(5.6)
|
|
3.9
|
|
2.7
|
|
0.9
|
Solid Waste
|
|
(3.6)
|
|
4.2
|
|
1.9
|
|
2.5
|
Environmental
Services
|
|
7.8
|
|
(1.9)
|
|
0.5
|
|
6.3
|
Total
|
|
(1.3) %
|
|
3.0 %
|
|
1.6 %
|
|
3.2 %
|
|
|
Nine
months ended September 30, 2023
|
|
|
Contribution
from
Acquisitions
|
|
Organic
Growth
|
|
Foreign
Exchange
|
|
Total Revenue
Growth
|
Solid Waste
|
|
|
|
|
|
|
|
|
Canada
|
|
3.2 %
|
|
6.1 %
|
|
— %
|
|
9.3 %
|
USA
|
|
2.4
|
|
7.1
|
|
5.1
|
|
14.6
|
Solid Waste
|
|
2.7
|
|
6.8
|
|
3.5
|
|
13.0
|
Environmental
Services
|
|
8.4
|
|
9.2
|
|
1.0
|
|
18.6
|
Total
|
|
3.7 %
|
|
7.3 %
|
|
3.0 %
|
|
14.0 %
|
Detail of Solid Waste Organic Growth
The following table summarizes the components of our Solid Waste
organic growth for the periods indicated:
|
|
Three months
ended
September 30,
2023
|
|
Nine
months ended
September 30,
2023
|
Price
|
|
8.8 %
|
|
10.5 %
|
Surcharges
|
|
(1.6)
|
|
(0.8)
|
Volume
|
|
(2.4)
|
|
(1.9)
|
Commodity
price
|
|
(0.6)
|
|
(1.0)
|
Total Solid Waste
organic growth
|
|
4.2 %
|
|
6.8 %
|
Operating Segment Results
The following tables summarize our operating segment results for
the periods indicated:
|
|
Three months
ended
September 30,
2023
|
|
Three months
ended
September 30,
2022
|
($
millions)
|
|
Revenue
|
|
Adjusted
EBITDA(1)
|
|
Adjusted
EBITDA
Margin(2)
|
|
Revenue
|
|
Adjusted
EBITDA(1)
|
|
Adjusted
EBITDA
Margin(2)
|
Solid Waste
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
$
473.6
|
|
$
133.7
|
|
28.2 %
|
|
$
447.3
|
|
$
122.4
|
|
27.4 %
|
USA
|
|
1,028.9
|
|
338.1
|
|
32.9
|
|
1,019.5
|
|
300.8
|
|
29.5
|
Solid Waste
|
|
1,502.5
|
|
471.8
|
|
31.4
|
|
1,466.8
|
|
423.2
|
|
28.9
|
Environmental
Services
|
|
387.5
|
|
119.9
|
|
30.9
|
|
364.4
|
|
96.5
|
|
26.5
|
Corporate
|
|
—
|
|
(61.4)
|
|
—
|
|
—
|
|
(46.4)
|
|
—
|
Total
|
|
$ 1,890.0
|
|
$
530.3
|
|
28.1 %
|
|
$ 1,831.2
|
|
$
473.3
|
|
25.8 %
|
|
|
Nine
months ended
September 30,
2023
|
|
Nine
months ended
September 30,
2022
|
($
millions)
|
|
Revenue
|
|
Adjusted
EBITDA(1)
|
|
Adjusted
EBITDA
Margin(2)
|
|
Revenue
|
|
Adjusted
EBITDA(1)
|
|
Adjusted
EBITDA
Margin(2)
|
Solid Waste
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
$ 1,351.9
|
|
$
371.0
|
|
27.4 %
|
|
$ 1,237.7
|
|
$
333.9
|
|
27.0 %
|
USA
|
|
3,189.1
|
|
1,029.7
|
|
32.3
|
|
2,782.0
|
|
845.7
|
|
30.4
|
Solid Waste
|
|
4,541.0
|
|
1,400.7
|
|
30.8
|
|
4,019.7
|
|
1,179.6
|
|
29.3
|
Environmental
Services
|
|
1,091.7
|
|
293.6
|
|
26.9
|
|
920.4
|
|
234.4
|
|
25.5
|
Corporate
|
|
—
|
|
(182.8)
|
|
—
|
|
—
|
|
(133.0)
|
|
—
|
Total
|
|
$ 5,632.7
|
|
$ 1,511.5
|
|
26.8 %
|
|
$ 4,940.1
|
|
$ 1,281.0
|
|
25.9 %
|
|
(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.
|
Net Leverage
The following table presents the calculation of Net Leverage as
at the dates indicated:
($
millions)
|
|
September 30,
2023
|
|
December 31,
2022
|
Total long-term debt,
net of derivative asset(1)
|
|
$
8,797.7
|
|
$
9,208.5
|
Deferred finance costs
and other adjustments
|
|
(58.3)
|
|
(43.5)
|
Total long-term debt
excluding deferred finance costs and other adjustments
|
|
$
8,856.0
|
|
$
9,252.0
|
Less: cash
|
|
(174.2)
|
|
(82.1)
|
|
|
8,681.8
|
|
9,169.9
|
|
|
|
|
|
Trailing twelve months
Adjusted EBITDA(2)
|
|
1,951.3
|
|
1,720.8
|
Acquisition EBITDA
Adjustments(3)
|
|
67.4
|
|
106.0
|
Run-Rate
EBITDA(3)
|
|
$
2,018.7
|
|
$
1,826.8
|
|
|
|
|
|
Net
Leverage(2)
|
|
4.30x
|
|
5.02x
|
|
(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 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:
|
|
September 30,
2023
|
Subordinate voting
shares
|
|
358,172,019
|
Multiple voting
shares
|
|
11,812,964
|
Basic shares
outstanding
|
|
369,984,983
|
Effect of dilutive
instruments
|
|
5,224,615
|
Series A Preferred
Shares (as converted)
|
|
29,336,547
|
Series B Preferred
Shares (as converted)
|
|
7,602,238
|
Diluted shares
outstanding
|
|
412,148,383
|
NON-IFRS RECONCILIATION SCHEDULE
Adjusted EBITDA
The following tables provide a reconciliation of our net income
from continuing operations to EBITDA and Adjusted EBITDA for the
periods indicated:
($
millions)
|
|
Three months
ended
September 30,
2023
|
|
Three months
ended
September 30,
2022
|
Net income (loss) from
continuing operations
|
|
$
18.3
|
|
$
(183.7)
|
Add:
|
|
|
|
|
Interest and other
finance costs
|
|
137.2
|
|
136.2
|
Depreciation of
property and equipment
|
|
242.3
|
|
264.0
|
Amortization of
intangible assets
|
|
106.9
|
|
124.2
|
Income tax
recovery
|
|
(18.0)
|
|
(75.8)
|
EBITDA
|
|
486.7
|
|
264.9
|
Add:
|
|
|
|
|
Loss
on foreign
exchange(1)
|
|
46.9
|
|
195.3
|
Gain on sale of
property and equipment
|
|
(6.7)
|
|
(5.7)
|
Mark-to-market gain on
Purchase Contracts(2)
|
|
—
|
|
(10.3)
|
Share of net income of
investments accounted for using the equity method
|
|
(34.0)
|
|
(9.2)
|
Share-based
payments(3)
|
|
26.5
|
|
13.4
|
Loss on
divestiture(4)
|
|
—
|
|
1.6
|
Transaction
costs(5)
|
|
22.3
|
|
13.6
|
Acquisition,
rebranding and other integration costs(6)
|
|
3.8
|
|
6.3
|
Other
|
|
(15.2)
|
|
3.4
|
Adjusted
EBITDA
|
|
$
530.3
|
|
$
473.3
|
($
millions)
|
|
Nine
months ended
September 30,
2023
|
|
Nine
months ended
September 30,
2022
|
Net income from
continuing operations
|
|
$
94.3
|
|
$
35.9
|
Add:
|
|
|
|
|
Interest and other
finance costs
|
|
466.7
|
|
340.7
|
Depreciation of
property and equipment
|
|
719.9
|
|
732.1
|
Amortization of
intangible assets
|
|
379.7
|
|
382.1
|
Income tax expense
(recovery)
|
|
178.8
|
|
(145.5)
|
EBITDA
|
|
1,839.4
|
|
1,345.3
|
Add:
|
|
|
|
|
(Gain) loss on foreign
exchange(1)
|
|
(4.6)
|
|
249.3
|
Gain on sale of
property and equipment
|
|
(13.1)
|
|
(10.1)
|
Mark-to-market loss
(gain) on Purchase Contracts(2)
|
|
104.3
|
|
(391.4)
|
Share of net loss
(income) of investments accounted for using the equity
method
|
|
48.9
|
|
(14.5)
|
Share-based
payments(3)
|
|
56.7
|
|
38.2
|
Gain on
divestiture(4)
|
|
(580.5)
|
|
(4.9)
|
Transaction
costs(5)
|
|
63.9
|
|
36.9
|
Acquisition,
rebranding and other integration costs(6)
|
|
14.0
|
|
19.7
|
Other
|
|
(17.5)
|
|
12.5
|
Adjusted
EBITDA
|
|
$
1,511.5
|
|
$
1,281.0
|
|
|
(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)
|
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.
|
(4)
|
Consists of gain
resulting from the divestiture of certain assets and three non-core
U.S. Solid Waste businesses.
|
(5)
|
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.
|
(6)
|
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.
|
Adjusted Net Income from Continuing Operations
The following tables provide a reconciliation of our net income
(loss) from continuing operations to Adjusted Net Income from
continuing operations for the periods indicated:
($
millions)
|
|
Three months
ended
September 30,
2023
|
|
Three months
ended
September 30,
2022
|
Net income (loss) from
continuing operations
|
|
$
18.3
|
|
$
(183.7)
|
Add:
|
|
|
|
|
Amortization of
intangible assets(1)
|
|
106.9
|
|
124.2
|
ARO discount rate
depreciation adjustment(2)
|
|
4.8
|
|
3.0
|
Incremental
depreciation of property and equipment due to
recapitalization
|
|
—
|
|
4.5
|
Amortization of
deferred financing costs
|
|
4.3
|
|
3.3
|
Loss on foreign
exchange(3)
|
|
46.9
|
|
195.3
|
Mark-to-market gain on
Purchase Contracts(4)
|
|
—
|
|
(10.3)
|
Share of net income of
investments accounted for using the equity method
|
|
(34.0)
|
|
(9.2)
|
Loss on
divestiture(5)
|
|
—
|
|
1.6
|
Transaction
costs(6)
|
|
22.3
|
|
13.6
|
Acquisition,
rebranding and other integration costs(7)
|
|
3.8
|
|
6.3
|
TEU amortization
expense
|
|
—
|
|
0.3
|
Other
|
|
(15.2)
|
|
3.4
|
Tax
effect(8)
|
|
(41.3)
|
|
(78.3)
|
Adjusted Net Income
from continuing operations
|
|
$
116.8
|
|
$
74.0
|
Adjusted earnings
from continuing operations per share, basic
|
|
$
0.32
|
|
$
0.20
|
Adjusted earnings
from continuing operations per share, diluted
|
|
$
0.32
|
|
$
0.20
|
($
millions)
|
|
Nine
months ended
September 30,
2023
|
|
Nine
months ended
September 30,
2022
|
Net income from
continuing operations
|
|
$
94.3
|
|
$
35.9
|
Add:
|
|
|
|
|
Amortization of
intangible assets(1)
|
|
379.7
|
|
382.1
|
ARO discount rate
depreciation adjustment(2)
|
|
4.8
|
|
7.8
|
Incremental
depreciation of property and equipment due to
recapitalization
|
|
7.5
|
|
13.5
|
Amortization of
deferred financing costs
|
|
13.5
|
|
9.2
|
(Gain) loss on foreign
exchange(3)
|
|
(4.6)
|
|
249.3
|
Mark-to-market loss
(gain) on Purchase Contracts(4)
|
|
104.3
|
|
(391.4)
|
Share of net loss
(income) of investments accounted for using the equity
method
|
|
48.9
|
|
(14.5)
|
Gain on
divestiture(5)
|
|
(580.5)
|
|
(4.9)
|
Transaction
costs(6)
|
|
63.9
|
|
36.9
|
Acquisition,
rebranding and other integration costs(7)
|
|
14.0
|
|
19.7
|
TEU amortization
expense
|
|
0.1
|
|
0.9
|
Other
|
|
(17.5)
|
|
12.5
|
Tax
effect(8)
|
|
213.3
|
|
(171.0)
|
Adjusted Net Income
from continuing operations
|
|
$
341.7
|
|
$
186.0
|
Adjusted earnings
per share from continuing operations, basic
|
|
$
0.93
|
|
$
0.51
|
Adjusted earnings
per share from continuing operations, diluted
|
|
$
0.92
|
|
$
0.51
|
|
|
(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)
|
Consists of gain
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 the tax
effect of the adjustments to net income (loss) from continuing
operations.
|
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
September 30,
2023
|
|
Three months
ended
September 30,
2022
|
Cash flows from
operating activities
|
|
$
125.8
|
|
$
286.1
|
Add:
|
|
|
|
|
Transaction
costs(2)
|
|
22.3
|
|
13.6
|
Acquisition,
rebranding and other integration costs(3)
|
|
3.8
|
|
6.3
|
Cash interest paid on
TEUs(5)
|
|
—
|
|
0.4
|
Cash taxes related to
divestitures
|
|
248.6
|
|
—
|
Adjusted Cash Flows
from Operating Activities
|
|
400.5
|
|
306.4
|
Add:
|
|
|
|
|
Proceeds on disposal
of assets and other(6)
|
|
30.6
|
|
12.4
|
Purchase of property
and equipment(7)
|
|
(276.3)
|
|
(210.6)
|
Investment in joint
ventures(8)
|
|
(8.8)
|
|
(11.2)
|
Adjusted Free Cash
Flow (excluding incremental growth investments)
|
|
146.0
|
|
97.0
|
Add:
|
|
|
|
|
Incremental growth
investments(9)
|
|
130.0
|
|
—
|
Adjusted Free Cash
Flow
|
|
$
276.0
|
|
$
97.0
|
($
millions)
|
|
Nine
months ended
September 30,
2023
|
|
Nine
months ended
September 30,
2022
|
Cash flows from
operating activities
|
|
$
579.0
|
|
$
693.3
|
Less:
|
|
|
|
|
Operating cash flows
from discontinued operations(1)
|
|
—
|
|
(35.4)
|
Cash flows from
operating activities (excluding discontinued operations)
|
|
579.0
|
|
728.7
|
Add:
|
|
|
|
|
Transaction
costs(2)
|
|
63.9
|
|
36.9
|
Acquisition,
rebranding and other integration costs(3)
|
|
14.0
|
|
19.7
|
M&A related net
working capital investment(4)
|
|
—
|
|
4.8
|
Cash interest paid on
TEUs(5)
|
|
0.2
|
|
1.7
|
Cash taxes related to
divestitures
|
|
248.6
|
|
—
|
Adjusted Cash Flows
from Operating Activities
|
|
905.7
|
|
791.8
|
Add:
|
|
|
|
|
Proceeds on disposal
of assets and other(6)
|
|
51.0
|
|
104.6
|
Purchase of property
and equipment(7)
|
|
(823.6)
|
|
(535.6)
|
Investment in joint
ventures(8)
|
|
(27.3)
|
|
(43.0)
|
Adjusted Free Cash
Flow (excluding incremental growth investments)
|
|
105.8
|
|
317.8
|
Add:
|
|
|
|
|
Incremental growth
investments(9)
|
|
130.0
|
|
—
|
Adjusted Free Cash
Flow
|
|
$
235.8
|
|
$
317.8
|
|
|
(1)
|
Consists of
operating cash flows from discontinued operations. As at September
30, 2022, GFL Infrastructure was presented as discontinued
operations. Refer to Note 19 in our Interim Financial
Statements.
|
(2)
|
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.
|
(3)
|
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.
|
(4)
|
Consists of net
non-cash working capital in the period in relation to
acquisitions.
|
(5)
|
Consists of interest
paid in cash on the Amortizing Notes.
|
(6)
|
Consists of proceeds
from divestitures, excluding proceeds received from the divestiture
of three non-core U.S. Solid Waste businesses.
|
(7)
|
Excludes purchase of
property and equipment and intangible assets for GFL
Infrastructure, which was presented as discontinued operations, of
$nil for the three and nine months ended September 30, 2023 and
$nil and $7.2 million for the three and nine months ended September
30, 2022, respectively. Refer to Note 19 in our Interim Financial
Statements.
|
(8)
|
Consists of initial
capital investment for the development and construction of
renewable natural gas facilities operated as joint
ventures.
|
(9)
|
Consists of
incremental sustainability related capital projects, primarily
related to recycling and RNG. Reflects a reallocation of proceeds
from the divestiture of three non-core U.S. Solid Waste businesses
to fund these projects.
|
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SOURCE GFL Environmental Inc.