Waste Connections, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES In 2016, Waste Connections, Inc., a Delaware corporation, entered into a business combination transaction with Progressive Waste Solutions Ltd., a corporation organized under the laws of Ontario, Canada (“Progressive Waste” and the transaction, the “Progressive Waste acquisition”). The public company that remained following the transaction is Waste Connections, Inc., a corporation organized under the laws of Ontario, Canada. References to the “Company” and “Waste Connections” in this Annual Report on Form 10-K refer to the Delaware corporation, Waste Connections, Inc. (now known as Waste Connections US, Inc.) before the Progressive Waste acquisition and the combined business thereafter. All references to “dollars” or “$” used herein refer to U.S. dollars, and all references to CAD $ used herein refer to Canadian dollars, unless otherwise stated. Our common shares are listed on the New York Stock Exchange, or NYSE, and the Toronto Stock Exchange, or TSX, under the symbol “WCN”. As of February 9, 2021, there were 101 holders of record of our common shares. Because many of our common shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. On February 17, 2021, we announced that our Board of Directors approved a regular quarterly cash dividend of $0.205 per common share. All dividends paid by the Company on its common shares after June 1, 2016 are designated as “eligible dividends” for Canadian federal income tax purposes and such treatment will continue unless a notification of change is posted on our website. Our Board of Directors will review the cash dividend periodically, with a long-term objective of increasing the amount of the dividend. We cannot assure you as to the amounts or timing of future dividends. We have the ability under our Credit Agreement (as defined below) and master note purchase agreements to repurchase our common shares and pay dividends provided we maintain specified financial ratios. Performance Graph The following performance graph compares the total cumulative shareholder returns on our common shares over the past five fiscal years with the total cumulative returns for the S&P 500 Index, the S&P/TSX 60 Index and the Dow Jones U.S. Waste and Disposal Services Index. The graph depicts a five-year comparison of cumulative total returns for the Company’s common shares. The graph assumes an investment of US$100 in our common shares on December 31, 2015, and the reinvestment of all dividends. 43 Table of Contents This chart has been calculated in compliance with SEC requirements and prepared by Capital IQ ® using the USD index in the case of the S&P/TSX 60 Index. This graph and the accompanying text is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Base ​ Indexed Returns ​ ​ Period ​ Years Ending Company Name / Index Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Waste Connections, Inc. ​ $ 100 ​ $ 140.78 ​ $ 192.11 ​ $ 202.63 ​ $ 249.61 ​ $ 284.20 S&P 500 Index ​ $ 100 ​ $ 111.96 ​ $ 136.40 ​ $ 130.42 ​ $ 171.49 ​ $ 203.04 S&P/TSX 60 Index ​ $ 100 ​ $ 125.71 ​ $ 147.71 ​ $ 125.23 ​ $ 160.83 ​ $ 172.81 Dow Jones U.S. Waste & Disposal Services Index ​ $ 100 ​ $ 121.15 ​ $ 141.84 ​ $ 142.00 ​ $ 191.83 ​ $ 204.42 ​ THE SHARE PRICE PERFORMANCE INCLUDED IN THIS GRAPH IS NOT NECESSARILY INDICATIVE OF FUTURE SHARE PRICE PERFORMANCE. ​ ​ 44 Table of Contents ITEM 6. SELECTED FINANCIAL DATA This table sets forth our selected financial data for the periods indicated. This data should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Annual Report on Form 10-K and our audited consolidated financial statements, including the related notes and our independent registered public accounting firm’s report and the other financial information included in Item 8 of this Annual Report on Form 10-K. The selected data in this section is not intended to replace the consolidated financial statements included in this Annual Report on Form 10-K. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2020 (a) 2019 (a) 2018 (a) 2017 2016 ​ ​ (in thousands of U.S. dollars, except share and per share data) STATEMENT OF OPERATIONS DATA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ $ 5,445,990 ​ $ 5,388,679 ​ $ 4,922,941 ​ $ 4,630,488 ​ $ 3,375,863 Operating expenses: ​ ​ ​ ​ ​ ​ Cost of operations ​ 3,276,808 ​ 3,198,757 ​ 2,865,704 ​ 2,704,775 ​ 1,957,712 Selling, general and administrative ​ 537,632 ​ 546,278 ​ 524,388 ​ 509,638 ​ 474,263 Depreciation ​ 621,102 ​ 618,396 ​ 572,708 ​ 530,187 ​ 393,600 Amortization of intangibles ​ 131,302 ​ 125,522 ​ 107,779 ​ 102,297 ​ 70,312 Impairments and other operating items ​ 466,718 ​ 61,948 ​ 20,118 ​ 156,493 ​ 27,678 Operating income ​ 412,428 ​ 837,778 ​ 832,244 ​ 627,098 ​ 452,298 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (162,375) ​ (147,368) ​ (132,104) ​ (125,297) ​ (92,709) Interest income ​ 5,253 ​ 9,777 ​ 7,170 ​ 5,173 ​ 602 Other income (expense), net ​ (1,392) ​ 5,704 ​ (170) ​ 1,536 ​ 1,174 Income before income tax provision ​ 253,914 ​ 705,891 ​ 707,140 ​ 508,510 ​ 361,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax (provision) benefit ​ (49,922) ​ (139,210) ​ (159,986) ​ 68,910 ​ (114,044) Net income ​ 203,992 ​ 566,681 ​ 547,154 ​ 577,420 ​ 247,321 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plus (less): Net loss (income) attributable to noncontrolling interests ​ 685 ​ 160 ​ (283) ​ (603) ​ (781) Net income attributable to Waste Connections ​ $ 204,677 ​ $ 566,841 ​ $ 546,871 ​ $ 576,817 ​ $ 246,540 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share attributable to Waste Connections’ common shareholders: ​ ​ ​ ​ ​ Basic ​ $ 0.78 ​ $ 2.15 ​ $ 2.07 ​ $ 2.19 ​ $ 1.07 Diluted ​ $ 0.78 ​ $ 2.14 ​ $ 2.07 ​ $ 2.18 ​ $ 1.07 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares used in the per share calculations: ​ ​ ​ ​ ​ Basic (b) ​ 263,189,699 ​ 263,792,693 ​ 263,650,155 ​ 263,682,608 ​ 230,325,012 Diluted (b) ​ 263,687,539 ​ 264,526,561 ​ 264,395,618 ​ 264,302,411 ​ 231,081,496 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash dividends per common share ​ $ 0.760 ​ $ 0.665 ​ $ 0.580 ​ $ 0.500 ​ $ 0.410 Cash dividends paid ​ $ 199,883 ​ $ 175,067 ​ $ 152,550 ​ $ 131,975 ​ $ 92,547 (a) For more information regarding this selected financial data, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations section included in Item 7 of this Annual Report on Form 10-K. (b) Share amounts have been retroactively adjusted to reflect the split of our common shares on a three-for-two basis, effective as of June 16, 2017. 45 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 2018 2017 2016 ​ ​ (in thousands of U.S. dollars) BALANCE SHEET DATA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 617,294 ​ $ 326,738 ​ $ 319,305 ​ $ 433,815 ​ $ 154,382 Working capital surplus ​ 379,618 ​ 123,370 ​ 206,068 ​ 374,269 ​ 51,215 Property and equipment, net ​ 5,284,506 ​ 5,516,347 ​ 5,168,996 ​ 4,820,934 ​ 4,738,055 Total assets ​ 13,992,364 ​ 13,737,695 ​ 12,627,329 ​ 12,014,681 ​ 11,103,925 Long-term debt and notes payable ​ 4,708,678 ​ 4,353,782 ​ 4,153,465 ​ 3,899,572 ​ 3,616,760 Total equity ​ 6,863,438 ​ 6,938,354 ​ 6,460,188 ​ 6,274,070 ​ 5,654,877 ​ ​ 46 Table of Contents