News Column

Progressive Waste Solutions Ltd. Reports Results for the Three Months and Year Ended December 31, 2013

February 13, 2014

TORONTO, ONTARIO--(Marketwired - Feb. 13, 2014) - Progressive Waste Solutions Ltd. (the "Company") (NYSE:BIN)(TSX:BIN) reported financial results for the three months and year ended December 31, 2013.

Fourth quarter highlights

-- Consolidated revenues of approximately $502.0 million, up 1.2%, despite the negative impact of approximately $11.3 million foreign currency exchange relative to the year-ago quarter. Excluding the negative impact of foreign exchange, consolidated revenues increased 3.5% -- Organic revenue growth driven by higher core price of 1.6% -- Adjusted EBITDA(A) of $131.9 million and free cash flow(B), excluding internal infrastructure investment, of $62.3 million, an increase of 27.3%. Excluding the negative impact of foreign exchange, adjusted EBITDA(A) was $135.5 million and free cash flow(B), excluding internal infrastructure investment, was $63.3 million -- Adjusted net income(A) per share of $0.29 versus $0.24 in the same quarter last year



Management Commentary

(All amounts are in United States ("U.S.") dollars, unless otherwise stated)

"With our fourth-quarter results, we achieved a solid finish to the year, in line with or better than our expectations. Organic revenues were driven by higher pricing in every service line. Our consolidated core price improvement of 1.6% reflects the focused sales execution we are applying across our collection, transfer and disposal service lines, and which helped to offset the impact of lower volumes due to the unusually harsh weather in December," said Joseph Quarin, President and Chief Executive Officer, Progressive Waste Solutions Ltd.

"2013 marked a pivotal year for Progressive Waste Solutions, as we established a firm foundation for improved operational execution going forward. We welcomed several new members to the senior team, including Kevin Walbridge to the role of Executive Vice President, Chief Operating Officer effective January 1, 2014, and Dan Pio to the role of Executive Vice President, Strategy and Business Development. At the same time, we unified our entire organizational structure and leadership group, improving our ability to strategically manage our capital and drive cost efficiencies and best practices throughout our business. And by aligning our management team's compensation to greater asset utilization and capital efficiency, we believe we have all of the components in place to continue to improve our return on invested capital."

Mr. Quarin continued, "We have a strong sense of momentum as we enter 2014, with plans to create value for shareholders both through operational execution and through strategic and disciplined capital allocation. Our guidance for this fiscal year reflects the growth we expect to achieve in our organic business in the U.S. and Canada, through price and volume improvements, as well as cost efficiencies, but is muted by the impact of foreign currency exchange we have assumed in our outlook. We do not have operational exposure to the volatility of the Canadian dollar, but there is an impact to our reportable results which are denominated in U.S. currency. In providing our guidance for 2014, we are highlighting our sensitivity to foreign currency translation, in order to demonstrate the underlying operational strength in our performance outlook."

Fourth quarter ended December 31, 2013

Reported revenues increased $6.2 million or 1.2% from $495.8 million in the fourth quarter of 2012 to $502.0 million in the fourth quarter of 2013. Expressed on a reportable basis and assuming a foreign currency exchange ("FX") rate of parity between the Canadian and U.S. dollar ("FX parity"), revenues increased 3.5% due in large part to a 2.5% increase attributable to acquisitions. The remaining increase is a function of higher overall core pricing and recycled commodity pricing which outpaced lower volumes and fuel surcharges.

Operating income was $58.3 million in the fourth quarter of 2013 versus $58.6 million in the fourth quarter of 2012. Net income was $36.2 million versus $11.8 million in the fourth quarters of 2013 and 2012, respectively.

Adjusted amounts

Adjusted EBITDA(A) was $131.9 million in the fourth quarter of 2013 versus $133.7 million posted in the same quarter a year ago. Adjusted operating EBIT(A) was $59.1 million or (4.0)% lower in the quarter compared to $61.6 million in the same period last year. Adjusted net income(A) was $33.4 million, or $0.29 per diluted share, compared to $28.2 million, or $0.24 per diluted share in the comparative period.

Year ended December 31, 2013

For the year ended December 31, 2013, reported revenues increased $129.3 million or 6.8% from $1,896.7 million in 2012 to $2,026.0 million. Expressed on a reportable basis and at FX parity, revenues increased 8.1% on a comparative basis. The increase is due in large part to a 6.2% increase attributable to acquisitions and higher overall core pricing, recycled commodity pricing and volumes.

For the year ended December 31, operating income was $232.9 million in 2013 versus $237.7 million in 2012. Net income was $118.0 million versus $94.4 million for the years ended December 31, 2013 and 2012, respectively.

Adjusted amounts

For the year ended December 31, adjusted EBITDA(A) was $530.8 million or 2.1% higher in 2013 versus $519.7 million in 2012. These results were affected by a negative $0.8 million foreign exchange impact relative to our Q3 2013 guidance foreign exchange assumption. Adjusted operating EBIT(A) was $246.2 million compared to the $246.1 million recorded last year. Adjusted net income(A) was $127.2 million, or $1.10 per diluted share, compared to $113.2 million, or $0.97 per diluted share in the same period last year.

Other highlights for the three months ended December 31, 2013

-- Consolidated core price increased 1.6%, reflecting organic average price change, net of rollbacks and excluding fuel surcharges, across the Company's customer base -- Consolidated organic volume declined 1.1%. Included in the consolidated organic volume decline in the quarter was an approximately 260 basis point decrease related to Superstorm Sandy volumes we received in the prior year coupled with the completion of three municipal contracts in the Company's Canadian operations and the closure of the Calgary landfill to municipal solid waste. Excluding these three events, our consolidated organic volume growth would have been 1.5%



2014 Outlook

The Company is providing its outlook assuming no change in the current economic environment and excluding the impact of any acquisitions we may complete in 2014. Our outlook has been prepared assuming an FX rate of $0.90.

In fiscal year 2014, we expect solid improvement in revenue, adjusted EBITDA(A) and adjusted EBITDA(A) margins, expressed in constant currency, where constant currency refers to 2013 actual and 2014 outlook amounts translated at the same average FX rate.

Readers are reminded that the Company's 2013 financial results were translated to U.S. dollars at an average FX rate of $0.9707 compared to $0.90 for our 2014 outlook. Readers are further reminded that we earn a significant portion of our revenues and income in Canada. Based on our 2014 guidance outlook, if the U.S. dollar strengthens by one cent our reported revenues will decline by approximately $8,200. EBITDA(A) is similarly impacted by approximately $2,500, assuming a strengthening U.S. dollar. The impact on net income and free cash flow(B) for a similar change in FX rate, results in an approximately $1,100 and $900 decline, respectively. Should the U.S. dollar weaken by one cent, our reported revenues, EBITDA(A), net income and free cash flow(B) will improve by amounts similar to those outlined above as a result of a strengthening U.S. dollar.

The purpose of presenting this outlook is to provide investors and analysts with our expected results for the coming year.

Our outlook, which is forward-looking, was approved by management on February 12, 2014. Our actual results may differ materially and are subject to risks and uncertainties. Please refer to the 2014 outlook assumptions and factors and Caution regarding forward looking statements sections of this press release for further information.

Our 2014 outlook is as follows (in millions of U.S. dollars, except per share amounts and where otherwise stated):

--------------------------------------------------------------------------- 2014 Guidance --------------------------------------------------------------------------- Revenue $1,990 to $2,010 Adjusted EBITDA(A) $528 to $538 Amortization expense, as a percentage of revenue 14.2% Adjusted operating EBIT(A) $245 to $253 Interest on long-term debt $64 to $66 Effective tax rate as a percentage of income before income tax expense and net (income) loss from equity accounted investee 30% to 32% Cash taxes (expressed on an adjusted basis) $35 to $37 Adjusted net income(A) per diluted share $1.06 to $1.15 Free cash flow(B) excluding additional internal infrastructure investment $210 to $225 Capital and landfill expenditures excluding internal infrastructure investment and includes net proceeds on sale $212 to $216 Internal infrastructure investment $20 Expected annual cash dividend, payable on a quarterly basis C$0.60 per share



The table set out below, compares our 2014 outlook to our 2013 actual results translated at an average FX rate of $0.90 (in millions of U.S. dollars, except per share amounts and where otherwise stated:

---------------------------------------------------------------------------- 2013 results translated at an average FX 2014 rate of 90 cents Guidance ---------------------------------------------------------------------------- Revenue $1,970$1,990 to $2,010 Adjusted EBITDA(A) $513$528 to $538 Amortization expense, as a percentage of revenue 14.6% 14.2% Adjusted operating EBIT(A) $237$245 to $253 Interest on long-term debt $57$64 to $66 Effective tax rate as a percentage of income before income tax expense and net (income) loss from equity accounted investee 33% 30% to 32% Cash taxes (expressed on an adjusted basis) $30$35 to $37 Adjusted net income(A) per diluted share $1.07$1.06 to $1.15 Free cash flow(B) excluding additional internal infrastructure investment $224$210 to $225 Capital and landfill expenditures excluding internal infrastructure investment and includes net proceeds on sale $209$212 to $216 Internal infrastructure investment $37$20 Actual or expected annual cash dividend, payable on a quarterly basis C$0.58 per share C$0.60 per share Progressive Waste Solutions Ltd. Consolidated Statements of Operations and Comprehensive Income or Loss ("Statement of Operations and Comprehensive Income or Loss") For the three months (unaudited) and years ended December 31, 2013 (unaudited) and 2012 (stated in accordance with accounting principles generally accepted in the United States of America ("U.S.") and in thousands of U.S. dollars, except share and net income per share amounts) ---------------------------------------------------------------------------- Three months ended Year ended ---------------------------------------------------------------------------- 2013 2012 2013 2012 ---------------------------------------------------------------------------- REVENUES $ 502,007$ 495,822$2,026,039$1,896,741 EXPENSES OPERATING 310,193 305,236 1,249,252 1,154,764 SELLING, GENERAL AND ADMINISTRATION 60,671 59,814 255,173 230,740 AMORTIZATION 73,379 71,766 296,491 274,118 NET (GAIN) LOSS ON SALE OF CAPITAL ASSETS (566) 383 (7,793) (592) ---------------------------------------------------------------------------- OPERATING INCOME 58,330 58,623 232,916 237,711 INTEREST ON LONG-TERM DEBT 15,482 14,494 60,754 57,428 NET FOREIGN EXCHANGE LOSS (GAIN) 419 (3) (1,061) 9 NET (GAIN) LOSS ON FINANCIAL INSTRUMENTS (5,819) 3,541 (4,282) 1,725 LOSS ON EXTINGUISHMENT OF DEBT 1,240 16,924 1,240 16,924 OTHER EXPENSES - - - 105 ---------------------------------------------------------------------------- INCOME BEFORE INCOME TAX EXPENSE AND NET (INCOME) LOSS FROM EQUITY ACCOUNTED INVESTEE 47,008 23,667 176,265 161,520 INCOME TAX EXPENSE Current 6,431 10,969 29,535 49,281 Deferred 4,552 934 28,908 17,841 ---------------------------------------------------------------------------- 10,983 11,903 58,443 67,122 NET (INCOME) LOSS FROM EQUITY ACCOUNTED INVESTEE (217) 11 (148) 41 ---------------------------------------------------------------------------- NET INCOME 36,242 11,753 117,970 94,357 ---------------------------------------------------------------------------- OTHER COMPREHENSIVE (LOSS) INCOME: Foreign currency translation adjustment (16,444) (6,322) (33,181) 11,702 ---------------------------------------------------------------------------- Derivatives designated as cash flow hedges, net of income tax $10 and $566 (2012 - ($1,089) and ($863)) (18) 2,025 (1,051) 1,604 Settlement of derivatives designated as cash flow hedges, net of income tax ($5) and ($247) (2012 - ($170) and ($177)) 8 314 457 329 ---------------------------------------------------------------------------- (10) 2,339 (594) 1,933 ---------------------------------------------------------------------------- TOTAL OTHER COMPREHENSIVE (LOSS) INCOME (16,454) (3,983) (33,775) 13,635 ---------------------------------------------------------------------------- COMPREHENSIVE INCOME $ 19,788$ 7,770$ 84,195$ 107,992 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net income per weighted average share, basic and diluted $ 0.31$ 0.10$ 1.02$ 0.81 Weighted average number of shares outstanding (thousands), basic and diluted 115,175 115,163 115,170 116,178 Progressive Waste Solutions Ltd. Consolidated Balance Sheets ("Balance Sheet") December 31, 2013 (unaudited) and December 31, 2012 (stated in accordance with accounting principles generally accepted in the U.S. and in thousands of U.S. dollars except issued and outstanding share amounts) ---------------------------------------------------------------------------- December 31, December 31, 2013 2012 ---------------------------------------------------------------------------- ASSETS CURRENT Cash and cash equivalents $ 31,980$ 29,940 Accounts receivable 229,548 238,958 Other receivables 68 440 Prepaid expenses 34,886 38,762 Income taxes recoverable 2,531 2,928 Restricted cash 498 476 Other assets 2,149 1,573 ---------------------------------------------------------------------------- 301,660 313,077 OTHER RECEIVABLES - 72 FUNDED LANDFILL POST-CLOSURE COSTS 10,690 9,885 INTANGIBLES 220,078 287,847 GOODWILL 905,347 929,114 LANDFILL DEVELOPMENT ASSETS 20,247 19,715 DEFERRED FINANCING COSTS 19,037 20,060 CAPITAL ASSETS 937,252 927,518 LANDFILL ASSETS 952,731 963,720 INVESTMENTS 5,659 4,062 OTHER ASSETS 19,869 491 ---------------------------------------------------------------------------- $ 3,392,570$ 3,475,561 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable $ 100,270$ 120,341 Accrued charges 136,991 131,528 Dividends payable 16,243 16,206 Income taxes payable 2,048 1,986 Deferred revenues 17,180 19,002 Current portion of long-term debt 5,969 6,907 Landfill closure and post-closure costs 10,332 8,871 Other liabilities 12,925 2,527 ---------------------------------------------------------------------------- 301,958 307,368 LONG-TERM DEBT 1,542,289 1,681,370 LANDFILL CLOSURE AND POST-CLOSURE COSTS 114,122 104,281 OTHER LIABILITIES 14,743 6,166 DEFERRED INCOME TAXES 129,887 103,795 ---------------------------------------------------------------------------- 2,102,999 2,202,980 ---------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Common shares (authorized - unlimited, issued and outstanding - 114,852,852 (December 31, 2012 - 114,993,864)) 1,773,734 1,773,530 Restricted shares (issued and outstanding - 322,352 (December 31, 2012 - 172,500)) (6,654) (3,460) Additional paid in capital 2,796 2,166 Accumulated deficit (398,414) (451,539) Accumulated other comprehensive loss (81,891) (48,116) ---------------------------------------------------------------------------- Total shareholders' equity 1,289,571 1,272,581 ---------------------------------------------------------------------------- $ 3,392,570$ 3,475,561 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Progressive Waste Solutions Ltd. Consolidated Statements of Cash Flows ("Statement of Cash Flows") For the three months (unaudited) and years ended December 31, 2013 (unaudited) and 2012 (stated in accordance with accounting principles generally accepted in the U.S. and in thousands of U.S. dollars, except share and net income per share amounts) ---------------------------------------------------------------------------- Three months ended Year ended ---------------------------------------------------------------------------- 2013 2012 2013 2012 ---------------------------------------------------------------------------- NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES OPERATING Net income $ 36,242$ 11,753$ 117,970$ 94,357 Items not affecting cash Restricted share expense 562 819 2,004 2,034 Write-off of deferred financing costs 1,240 11,726 1,240 11,726 Accretion of landfill closure and post- closure costs 1,418 1,313 5,655 5,240 Amortization of intangibles 14,046 14,379 62,929 53,585 Amortization of capital assets 38,155 37,841 152,728 141,192 Amortization of landfill assets 21,178 19,546 80,834 79,341 Interest on long-term debt (amortization of deferred financing costs) 854 596 3,436 5,665 Net (gain) loss on sale of capital assets (566) 383 (7,793) (592) Net (gain) loss on financial instruments (5,819) 3,541 (4,282) 1,725 Deferred income taxes 4,552 934 28,908 17,841 Net (income) loss from equity accounted investee (217) 11 (148) 41 Landfill closure and post-closure expenditures (742) (1,336) (4,276) (6,737) Changes in non-cash working capital items 19,706 (27,322) 11,530 (68,657) ---------------------------------------------------------------------------- Cash generated from operating activities 130,609 74,184 450,735 336,761 ---------------------------------------------------------------------------- INVESTING Acquisitions (104) (168,608) (3,273) (282,313) Investments in cost and equity accounted for investees (728) - (1,746) - Restricted cash deposits - (1) (22) (24) Investment in other receivables - - (134) (148) Proceeds from other receivables 140 110 556 440 Funded landfill post- closure costs (448) (117) (1,134) (404) Purchase of capital assets (42,242) (54,410) (208,202) (180,322) Purchase of landfill assets (17,154) (18,471) (65,660) (66,556) Proceeds from the sale of capital assets 5,551 654 21,183 2,761 Investment in landfill development assets (744) (461) (3,334) (3,968) ---------------------------------------------------------------------------- Cash utilized in investing activities (55,729) (241,304) (261,766) (530,534) ---------------------------------------------------------------------------- FINANCING Payment of deferred financing costs (3,938) (16,975) (4,762) (17,315) Proceeds from long-term debt 103,023 1,617,304 770,139 1,924,480 Repayment of long-term debt (150,736) (1,401,816) (880,800) (1,568,323) Proceeds from the exercise of stock options - 39 112 403 Repurchase of common shares and related costs - - (14) (65,633) Purchase of, net of proceeds from, restricted shares - - (4,462) (541) Dividends paid to shareholders (16,469) (16,260) (63,725) (63,478) ---------------------------------------------------------------------------- Cash (utilized in) generated from financing activities (68,120) 182,292 (183,512) 209,593 Effect of foreign currency translation on cash and cash equivalents (1,844) (655) (3,417) (23) ---------------------------------------------------------------------------- NET CASH INFLOW 4,916 14,517 2,040 15,797 ---------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OR YEAR 27,064 15,423 29,940 14,143 ---------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF YEAR $ 31,980$ 29,940$ 31,980$ 29,940 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- SUPPLEMENTAL CASH FLOW INFORMATION: Cash and cash equivalents are comprised of: Cash $ 28,200$ 28,929$ 28,200$ 28,929 Cash equivalents 3,780 1,011 3,780 1,011 ---------------------------------------------------------------------------- $ 31,980$ 29,940$ 31,980$ 29,940 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash paid during the period or year for: Income taxes $ 4,406$ 11,833$ 35,429$ 53,531 Interest $ 15,989$ 17,170$ 62,336$ 57,109 FX Impact on Consolidated Results The following tables have been prepared to assist readers in assessing the FX impact on selected results for the three months and year ended December 31, 2013. Three months ended ---------------------------------------------------------------------------- December December December December December 31, 2012 31, 2013 31, 2013 31, 2013 31, 2013 ---------------------------------------------------------------------------- (organic, acquisition (holding FX and other constant non- with the (as operating comparative (FX (as reported) changes) period) impact) reported) ---------------------------------------------------------------------------- Consolidated Statement of Operations Revenues $495,822$ 17,481$ 513,303$(11,296)$502,007 Operating expenses 305,236 11,244 316,480 (6,287) 310,193 Selling, general and administration 59,814 2,426 62,240 (1,569) 60,671 Amortization 71,766 3,201 74,967 (1,588) 73,379 Net loss (gain) on sale of capital assets 383 (988) (605) 39 (566) ---------------------------------------------------------------------------- Operating income 58,623 1,598 60,221 (1,891) 58,330 Interest on long- term debt 14,494 1,843 16,337 (855) 15,482 Net foreign exchange (gain) loss (3) 420 417 2 419 Net loss (gain) on financial instruments 3,541 (9,465) (5,924) 105 (5,819) Loss on extinguishment of debt 16,924 (15,684) 1,240 - 1,240 ---------------------------------------------------------------------------- Income before net income tax expense and net loss (income) from equity accounted investee 23,667 24,484 48,151 (1,143) 47,008 Net income tax expense 11,903 (514) 11,389 (406) 10,983 Net loss (income) from equity accounted investee 11 (234) (223) 6 (217) ---------------------------------------------------------------------------- Net income $ 11,753$ 25,232$ 36,985$ (743)$ 36,242 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Adjusted EBITDA(A) $133,737$ 1,729$ 135,466$ (3,539)$131,927 Adjusted EBITA(A) $ 76,350$ (1,542)$ 74,808$ (2,214)$ 72,594 Adjusted operating income or adjusted operating EBIT(A) $ 61,588$ (448)$ 61,140$ (2,026)$ 59,114 Adjusted net income(A) $ 28,152$ 6,045$ 34,197$ (780)$ 33,417 Free cash flow(B) $ 36,620$ 22,062$ 58,682$ (983)$ 57,699 Year ended ---------------------------------------------------------------------------- December December December December December 31, 2012 31, 2013 31, 2013 31, 2013 31, 2013 ---------------------------------------------------------------------------- (organic, (holding acquisition FX and other constant non- with the (as operating comparative (FX (as reported) changes) year) impact) reported) ---------------------------------------------------------------------------- Consolidated Statement of Operations Revenues $1,896,741$ 152,980$2,049,721$ (23,682)$2,026,039 Operating expenses 1,154,764 107,640 1,262,404 (13,152) 1,249,252 Selling, general and administration 230,740 27,860 258,600 (3,427) 255,173 Amortization 274,118 25,765 299,883 (3,392) 296,491 Net gain on sale of capital assets (592) (7,320) (7,912) 119 (7,793) ---------------------------------------------------------------------------- Operating income 237,711 (965) 236,746 (3,830) 232,916 Interest on long-term debt 57,428 5,075 62,503 (1,749) 60,754 Net foreign exchange loss (gain) 9 (1,105) (1,096) 35 (1,061) Net loss (gain) on financial instruments 1,725 (6,039) (4,314) 32 (4,282) Loss on extinguishment of debt 16,924 (15,684) 1,240 - 1,240 Other expense 105 (105) - - - ---------------------------------------------------------------------------- Income before net income tax expense and net loss (income) from equity accounted investee 161,520 16,893 178,413 (2,148) 176,265 Net income tax expense 67,122 (7,850) 59,272 (829) 58,443 Net loss (income) from equity accounted investee 41 (193) (152) 4 (148) ---------------------------------------------------------------------------- Net income $ 94,357$ 24,936$ 119,293$ (1,323)$ 117,970 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Adjusted EBITDA(A) $ 519,659$ 18,495$ 538,154$ (7,379)$ 530,775 Adjusted EBITA(A) $ 299,126$ 2,683$ 301,809$ (4,596)$ 297,213 Adjusted operating income or adjusted operating EBIT(A) $ 246,133$ 4,249$ 250,382$ (4,231)$ 246,151 Adjusted net income(A) $ 113,187$ 15,608$ 128,795$ (1,643)$ 127,152 Free cash flow(B) $ 172,460$ 20,181$ 192,641$ (1,610)$ 191,031 Other Financial Highlights (all amounts are in thousands of U.S. dollars, excluding per share amounts) Three months ended Year ended December December 31 31 ---------------------------------------------------------------------------- 2013 2012 2013 2012 ---------------------------------------------------------------------------- Operating income $ 58,330$ 58,623$ 232,916$ 237,711 Transaction and related (recoveries) costs - SG&A (2,349) 462 (2,460) 2,507 Fair value movements in stock options - SG&A(i) (182) 703 5,879 (110) Restricted share expense - SG&A(i) 350 819 1,142 2,034 Non-operating or non-recurring expenses - SG&A 2,965 981 4,600 3,991 Impairment of intangible assets - Amortization - - 4,074 - ---------------------------------------------------------------------------- Adjusted operating income or adjusted operating EBIT(A) 59,114 61,588 246,151 246,133 ---------------------------------------------------------------------------- Net (gain) loss on sale of capital assets (566) 383 (7,793) (592) Amortization(ii) 73,379 71,766 292,417 274,118 ---------------------------------------------------------------------------- Adjusted EBITDA(A) 131,927 133,737 530,775 519,659 Amortization of capital and landfill assets (59,333) (57,387) (233,562) (220,533) ---------------------------------------------------------------------------- Adjusted EBITA(A) $ 72,594$ 76,350$ 297,213$ 299,126 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net income $ 36,242$ 11,753$ 117,970$ 94,357 Transaction and related (recoveries) costs - SG&A (2,349) 462 (2,460) 2,507 Fair value movements in stock options - SG&A(i) (182) 703 5,879 (110) Restricted share expense - SG&A(i) 350 819 1,142 2,034 Non-operating or non-recurring expenses - SG&A 2,965 981 4,600 3,991 Impairment of intangible assets - Amortization - - 4,074 - Net (gain) loss on financial instruments (5,819) 3,541 (4,282) 1,725 Loss on extinguishment of debt 1,240 16,924 1,240 16,924 Other expenses - - - 105 Net income tax expense or (recovery) 970 (7,031) (1,011) (8,346) ---------------------------------------------------------------------------- Adjusted net income(A) $ 33,417$ 28,152$ 127,152$ 113,187 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Note: (i)Amounts exclude long-term incentive plan ("LTIP") compensation. (ii) Amortization is presented net of amortization expense recorded on the impairment of intangible assets. Adjusted net income (A) per weighted average share, basic $ 0.29$ 0.24$ 1.10$ 0.97 Adjusted net income (A) per weighted average share, diluted $ 0.29$ 0.24$ 1.10$ 0.97 Replacement and growth expenditures Replacement expenditures $ 33,975$ 35,336$ 168,014$ 154,928 Growth expenditures 25,421 37,545 105,848 91,950 ---------------------------------------------------------------------------- Total replacement and growth expenditures $ 59,396$ 72,881$ 273,862$ 246,878 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Free cash flow(B) Cash generated from operating activities (statement of cash flows) $ 130,609$ 74,184$ 450,735$ 336,761 Free cash flow(B) $ 57,699$ 36,620$ 191,031$ 172,460 Free cash flow (B) per weighted average share, diluted $ 0.50$ 0.32$ 1.66$ 1.48 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Dividends Dividends paid (common shares) $ 16,469$ 16,260$ 63,725$ 63,478 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Segment Highlights - Additional details regarding the FX impact on our comparative results can be found in the Foreign Currency sections of this report. (all amounts are in thousands of U.S. dollars, unless otherwise stated) Three months ended December 31 ---------------------------------------------------------------------------- 2012 2013 Change 2013 Change ---------------------------------------------------------------------------- (holding FX constant with the (as comparative (as reported) period) reported) ---------------------------------------------------------------------------- Revenues $ 495,822$ 513,303$17,481$ 502,007$ 6,185 ---------------------------------------------------------------------------- Canada $ 199,021$ 203,371$ 4,350$ 192,075$ (6,946) U.S. south $ 201,725$ 220,896$19,171$ 220,896$ 19,171 U.S. northeast $ 95,076$ 89,036$(6,040)$ 89,036$ (6,040) Operating expenses $ 305,236$ 316,480$11,244$ 310,193$ 4,957 ---------------------------------------------------------------------------- Canada $ 111,411$ 113,634$ 2,223$ 107,347$ (4,064) U.S. south $ 127,051$ 140,885$13,834$ 140,885$ 13,834 U.S. northeast $ 66,774$ 61,961$(4,813)$ 61,961$ (4,813) SG&A (as reported) $ 59,814$ 62,240$ 2,426$ 60,671$ 857 ---------------------------------------------------------------------------- Canada $ 17,528$ 18,768$ 1,240$ 17,651$ 123 U.S. south $ 20,600$ 21,128$ 528$ 21,128$ 528 U.S. northeast $ 8,506$ 9,545$ 1,039$ 9,545$ 1,039 Corporate $ 13,180$ 12,799$ (381)$ 12,347$ (833) EBITDA(A)(as reported) $ 130,772$ 134,583$ 3,811$ 131,143$ 371 ---------------------------------------------------------------------------- Canada $ 70,082$ 70,969$ 887$ 67,077$ (3,005) U.S. south $ 54,074$ 58,883$ 4,809$ 58,883$ 4,809 U.S. northeast $ 19,796$ 17,530$(2,266)$ 17,530$ (2,266) Corporate $ (13,180)$ (12,799)$ 381$ (12,347)$ 833 Adjusted SG&A $ 56,849$ 61,357$ 4,508$ 59,887$ 3,038 ---------------------------------------------------------------------------- Canada $ 17,528$ 18,768$ 1,240$ 17,651$ 123 U.S. south $ 20,600$ 21,128$ 528$ 21,128$ 528 U.S. northeast $ 8,506$ 9,545$ 1,039$ 9,545$ 1,039 Corporate $ 10,215$ 11,916$ 1,701$ 11,563$ 1,348 Adjusted EBITDA(A) $ 133,737$ 135,466$ 1,729$ 131,927$ (1,810) ---------------------------------------------------------------------------- Canada $ 70,082$ 70,969$ 887$ 67,077$ (3,005) U.S. south $ 54,074$ 58,883$ 4,809$ 58,883$ 4,809 U.S. northeast $ 19,796$ 17,530$(2,266)$ 17,530$ (2,266) Corporate $ (10,215)$ (11,916)$(1,701)$ (11,563)$ (1,348) Year ended December 31 ---------------------------------------------------------------------------- 2012 2013 Change 2013 Change ---------------------------------------------------------------------------- (holding FX constant with the (as comparative (as reported) period) reported) ---------------------------------------------------------------------------- Revenues $1,896,741$ 2,049,721$152,980$2,026,039$ 129,298 ---------------------------------------------------------------------------- Canada $ 776,814$ 792,759$ 15,945$ 769,077$ (7,737) U.S. south $ 780,331$ 876,888$ 96,557$ 876,888$ 96,557 U.S. northeast $ 339,596$ 380,074$ 40,478$ 380,074$ 40,478 Operating expenses $1,154,764$ 1,262,404$107,640$1,249,252$ 94,488 ---------------------------------------------------------------------------- Canada $ 432,975$ 440,258$ 7,283$ 427,106$ (5,869) U.S. south $ 485,184$ 554,205$ 69,021$ 554,205$ 69,021 U.S. northeast $ 236,605$ 267,941$ 31,336$ 267,941$ 31,336 SG&A (as reported) $ 230,740$ 258,600$ 27,860$ 255,173$ 24,433 ---------------------------------------------------------------------------- Canada $ 65,378$ 73,657$ 8,279$ 71,457$ 6,079 U.S. south $ 78,070$ 86,687$ 8,617$ 86,687$ 8,617 U.S. northeast $ 31,465$ 35,870$ 4,405$ 35,870$ 4,405 Corporate $ 55,827$ 62,386$ 6,559$ 61,159$ 5,332 EBITDA(A)(as reported) $ 511,237$ 528,717$ 17,480$ 521,614$ 10,377 ---------------------------------------------------------------------------- Canada $ 278,461$ 278,844$ 383$ 270,514$ (7,947) U.S. south $ 217,077$ 235,996$ 18,919$ 235,996$ 18,919 U.S. northeast $ 71,526$ 76,263$ 4,737$ 76,263$ 4,737 Corporate $ (55,827)$ (62,386)$ (6,559)$ (61,159)$ (5,332) Adjusted SG&A $ 222,318$ 249,163$ 26,845$ 246,012$ 23,694 ---------------------------------------------------------------------------- Canada $ 65,378$ 73,657$ 8,279$ 71,457$ 6,079 U.S. south $ 78,070$ 86,687$ 8,617$ 86,687$ 8,617 U.S. northeast $ 31,465$ 35,870$ 4,405$ 35,870$ 4,405 Corporate $ 47,405$ 52,949$ 5,544$ 51,998$ 4,593 Adjusted EBITDA(A) $ 519,659$ 538,154$ 18,495$ 530,775$ 11,116 ---------------------------------------------------------------------------- Canada $ 278,461$ 278,844$ 383$ 270,514$ (7,947) U.S. south $ 217,077$ 235,996$ 18,919$ 235,996$ 18,919 U.S. northeast $ 71,526$ 76,263$ 4,737$ 76,263$ 4,737 Corporate $ (47,405)$ (52,949)$ (5,544)$ (51,998)$ (4,593) Revenues Gross revenue by service type The table below present's gross revenue by service type prepared on a consolidated basis and includes the impact of FX. Three months ended December 31 -------------------------------------------------------------------- 2013 % 2012 % -------------------------------------------------------------------- Commercial $ 174,117 34.7 $ 171,384 34.6 Industrial 89,255 17.8 88,293 17.8 Residential 116,753 23.3 117,267 23.7 Transfer and disposal 172,924 34.4 168,318 33.9 Recycling 16,253 3.2 15,592 3.1 Other 9,698 1.9 7,467 1.5 -------------------------------------------------------------------- Gross revenues 579,000 115.3 568,321 114.6 Intercompany (76,993) (15.3) (72,499) (14.6) -------------------------------------------------------------------- Revenues $ 502,007 100.0 $ 495,822 100.0 -------------------------------------------------------------------- -------------------------------------------------------------------- Year ended December 31 ----------------------------------------------------------------------- 2013 % 2012 % ----------------------------------------------------------------------- Commercial $ 703,507 34.7 $ 665,715 35.1 Industrial 365,843 18.1 336,353 17.7 Residential 467,170 23.1 440,725 23.2 Transfer and disposal 706,318 34.9 640,923 33.8 Recycling 59,864 3.0 65,344 3.4 Other 42,461 2.1 26,467 1.4 ----------------------------------------------------------------------- Gross revenues 2,345,163 115.9 2,175,527 114.6 Intercompany (319,124) (15.9) (278,786) (14.6) ----------------------------------------------------------------------- Revenues $ 2,026,039 100.0 $ 1,896,741 100.0 ----------------------------------------------------------------------- ----------------------------------------------------------------------- Revenue growth or decline components - expressed in percentages and excluding FX The table below has been prepared assuming Canadian and U.S. dollar parity except for percentages presented that include FX. Three months ended Year ended December 31 December 31 ---------------------------------------------------------------------------- 2013 2012 2013 2012 ---------------------------------------------------------------------------- Price Core price 1.6 1.2 1.1 1.4 Fuel surcharges (0.2) 0.3 - 0.4 Recycling and other 0.7 (1.0) 0.1 (1.6) ---------------------------------------------------------------------------- Total price growth 2.1 0.5 1.2 0.2 Volume (1.1) 0.1 0.7 (1.2) ---------------------------------------------------------------------------- Total organic growth (decline) 1.0 0.6 1.9 (1.0) Acquisitions 2.5 6.4 6.2 4.5 ---------------------------------------------------------------------------- Total growth excluding FX 3.5 7.0 8.1 3.5 FX (2.3) 1.4 (1.3) (0.4) ---------------------------------------------------------------------------- Total growth including FX 1.2 8.4 6.8 3.1 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Free cash flow(B) Purpose and objective



The purpose of presenting this non-GAAP measure is to provide investors and analysts with an additional measure of our value and liquidity. We use this non-GAAP measure to assess our relative performance to our peers and to assess the availability of funds for growth investment, share repurchases, debt repayment or dividend increases.

Free cash flow(B) - cash flow approach

Three months ended December 31 ---------------------------------------------------------------------------- 2013 2012 Change ---------------------------------------------------------------------------- Cash generated from operating activities $ 130,609$ 74,184$ 56,425 ---------------------------------------------------------------------------- Operating and investing Stock option expense (recovery)(ii) (182) 703 (885) LTIP portion of restricted share expense(ii) (212) - (212) Acquisition and related (recoveries) costs (2,349) 462 (2,811) Non-operating or non-recurring expenses 2,965 981 1,984 Other expenses - - - Changes in non-cash working capital items (19,706) 27,322 (47,028) Capital and landfill asset purchases(i) (59,396) (72,881) 13,485 Proceeds from the sale of capital assets 5,551 654 4,897 Financing Loss on extinguishment of debt (net of non-cash portion) - 5,198 (5,198) Recovery (purchase) of restricted shares(ii) - - - Net realized foreign exchange loss (gain) 419 (3) 422 ---------------------------------------------------------------------------- Free cash flow(B) $ 57,699$ 36,620$ 21,079 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Year ended December 31 -------------------------------------------------------------------------- 2013 2012 Change -------------------------------------------------------------------------- Cash generated from operating activities $ 450,735$ 336,761$ 113,974 -------------------------------------------------------------------------- Operating and investing Stock option expense (recovery)(ii) 5,879 (110) 5,989 LTIP portion of restricted share expense(ii) (862) - (862) Acquisition and related (recoveries) costs (2,460) 2,507 (4,967) Non-operating or non-recurring expenses 4,600 3,991 609 Other expenses - 105 (105) Changes in non-cash working capital items (11,530) 68,657 (80,187) Capital and landfill asset purchases(i) (273,862) (246,878) (26,984) Proceeds from the sale of capital assets 21,183 2,761 18,422 Financing Loss on extinguishment of debt (net of non-cash portion) - 5,198 (5,198) Recovery (purchase) of restricted shares(ii) (1,591) (541) (1,050) Net realized foreign exchange loss (gain) (1,061) 9 (1,070) -------------------------------------------------------------------------- Free cash flow(B) $ 191,031$ 172,460$ 18,571 -------------------------------------------------------------------------- -------------------------------------------------------------------------- Note: (i)Capital and landfill asset purchases include infrastructure expenditures of approximately $4,600 and $12,300 for the three months ended and $38,600 and $26,100 for the years ended December 31, 2013 and 2012, respectively. (ii)Amounts exclude LTIP compensation. Free cash flow(B) - adjusted EBITDA(A) approach We typically calculate free cash flow(B) using an operations approach which is better reflects how we manage the business and free cash flow(B). Three months ended December 31 ---------------------------------------------------------------------------- 2013 2012 Change ---------------------------------------------------------------------------- Adjusted EBITDA(A) $ 131,927$ 133,737$ (1,810) ---------------------------------------------------------------------------- Recovery (purchase) of restricted shares(ii) - - - Capital and landfill asset purchases(i) (59,396) (72,881) 13,485 Proceeds from the sale of capital assets 5,551 654 4,897 Landfill closure and post-closure expenditures (742) (1,336) 594 Landfill closure and post-closure cost accretion expense 1,418 1,313 105 Interest on long-term debt (15,482) (14,494) (988) Non-cash interest expense 854 596 258 Current income tax expense (6,431) (10,969) 4,538 ---------------------------------------------------------------------------- Free cash flow(B) $ 57,699$ 36,620$ 21,079 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Year ended December 31 --------------------------------------------------------------------------- 2013 2012 Change --------------------------------------------------------------------------- Adjusted EBITDA(A) $ 530,775$ 519,659$ 11,116 --------------------------------------------------------------------------- Recovery (purchase) of restricted shares(ii) (1,591) (541) (1,050) Capital and landfill asset purchases(i) (273,862) (246,878) (26,984) Proceeds from the sale of capital assets 21,183 2,761 18,422 Landfill closure and post-closure expenditures (4,276) (6,737) 2,461 Landfill closure and post-closure cost accretion expense 5,655 5,240 415 Interest on long-term debt (60,754) (57,428) (3,326) Non-cash interest expense 3,436 5,665 (2,229) Current income tax expense (29,535) (49,281) 19,746 --------------------------------------------------------------------------- Free cash flow(B) $ 191,031$ 172,460$ 18,571 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Note: (i)Capital and landfill asset purchases include infrastructure expenditures of approximately $4,600 and $12,300 for the three months and $38,600 and $26,100 for the years ended December 31, 2013 and 2012, respectively. (ii)Amounts exclude LTIP compensation.



Funded debt to EBITDA (as defined and calculated in accordance with our consolidated facility)

The ratio of funded debt to EBITDA, which includes first year pro forma EBITDA for completed acquisitions, is 2.88 times.

Foreign Currency

(in thousands of U.S. dollars unless otherwise stated)

2013 ------------------------------------------------------------- Consolidated Statement of Operations Consolidated and Balance Comprehensive Income or Sheet Loss ------------------------------------------------------------- Cumulative Current Average Average ------------------------------------------------------------- March 31 $ 0.9846$ 0.9912$ 0.9912 June 30 $ 0.9513$ 0.9772$ 0.9841 September 30 $ 0.9723$ 0.9630$ 0.9770 December 31 $ 0.9402$ 0.9525$ 0.9707 2012 -------------------------------------------------------------- Consolidated Statement of Operations Consolidated and Balance Comprehensive Income or Sheet Loss -------------------------------------------------------------- Cumulative Current Average Average -------------------------------------------------------------- March 31 $ 1.0009$ 0.9988$ 0.9988 June 30 $ 0.9813$ 0.9899$ 0.9943 September 30 $ 1.0166$ 1.0052$ 0.9979 December 31 $ 1.0051$ 1.0088$ 1.0006



Quarterly dividend declared

The Company's Board of Directors declared a quarterly dividend of $0.15 Canadian per share to shareholders of record on March 31, 2014. The dividend will be paid on April 15, 2014. The Company has designated these dividends as eligible dividends for the purposes of the Income Tax Act (Canada).

Definitions

(A) All references to "Adjusted EBITDA" in this document are to revenues less operating expense and SG&A, excluding certain SG&A expenses, on the consolidated statement of operations and comprehensive income or loss. Adjusted EBITDA excludes some or all of the following: certain SG&A expenses, restructuring expenses, goodwill impairment, amortization, net gain or loss on sale of capital assets, interest on long-term debt, net foreign exchange gain or loss, net gain or loss on financial instruments, loss on extinguishment of debt, other expenses, income taxes and income or loss from equity accounted investee. Adjusted EBITDA is a term used by us that does not have a standardized meaning prescribed by U.S. GAAP and is therefore unlikely to be comparable to similar measures used by other companies. Adjusted EBITDA is a measure of our operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by us as either non-cash (in the case of goodwill impairment, amortization, net gain or loss on financial instruments, net foreign exchange gain or loss, deferred income taxes and net income or loss from equity accounted investee) or non-operating (in the case of certain SG&A expenses, restructuring expenses, net gain or loss on sale of capital assets, interest on long-term debt, loss on extinguishment of debt, other expenses, and current income taxes). Adjusted EBITDA is a useful financial and operating metric for us, our Board of Directors, and our lenders, as it represents a starting point in the determination of free cash flow(B). The underlying reasons for the exclusion of each item are as follows:

Certain SG&A expenses - SG&A expense includes certain non-operating or non-recurring expenses. Non-operating expenses include transaction costs or recoveries related to acquisitions, fair value adjustments attributable to stock options and restricted share expense. Non-recurring expenses include certain equity based compensation, payments made to certain senior management on their departure and other non-recurring expenses from time-to-time. These expenses are not considered an expense indicative of continuing operations. Certain SG&A costs represent a different class of expense than those included in adjusted EBITDA.

Restructuring expenses - restructuring expenses includes costs to integrate certain operating locations with our own, exiting certain property and building and office leases, employee severance and employee relocation costs all of which were incurred in connection with our acquisition of WSI. These expenses are not considered an expense indicative of continuing operations. Accordingly, restructuring expenses represent a different class of expense than those included in adjusted EBITDA.

Goodwill impairment - as a non-cash item goodwill impairment has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Amortization - as a non-cash item amortization has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Net gain or loss on sale of capital assets - proceeds from the sale of capital assets are either reinvested in additional or replacement capital assets or used to repay revolving credit facility borrowings.

Interest on long-term debt - interest on long-term debt reflects our debt/equity mix, interest rates and borrowing position from time to time. Accordingly, interest on long-term debt reflects our treasury/financing activities and represents a different class of expense than those included in adjusted EBITDA.

Net foreign exchange gain or loss - as non-cash items, foreign exchange gains or losses have no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Net gain or loss on financial instruments - as non-cash items, gains or losses on financial instruments have no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Loss on extinguishment of debt - loss on extinguishment of debt is a function of our debt financing. Accordingly, it reflects our treasury/financing activities and represents a different class of expense than those included in adjusted EBITDA.

Other expenses - other expenses typically represent amounts paid to certain management of acquired companies who are retained by us post acquisition and amounts paid to certain executives in respect of acquisitions successfully completed. These expenses are not considered an expense indicative of continuing operations. Accordingly, other expenses represent a different class of expense than those included in adjusted EBITDA.

Income taxes - income taxes are a function of tax laws and rates and are affected by matters which are separate from our daily operations.

Net income or loss from equity accounted investee - as a non-cash item, net income or loss from our equity accounted investee has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

All references to "Adjusted EBITA" in this document represent Adjusted EBITDA after deducting amortization of capital and landfill assets. All references to "Adjusted operating income or adjusted operating EBIT" in this document represent Adjusted EBITDA after adjusting for net gain or loss on the sale of capital assets and all amortization expense, including amortization expense recognized on the impairment of intangible assets. All references to "Adjusted net income" are to adjusted operating income after adjusting net gain or loss on financial instruments, loss on extinguishment of debt, other expenses and net income tax expense or recovery.

Adjusted EBITA, Adjusted operating income or adjusted operating EBIT and Adjusted net income should not be construed as measures of income or of cash flows. Collectively, these terms do not have standardized meanings prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures used by other companies. Each of these measures are important for investors and are used by management in the management of its business. Adjusted operating income or adjusted operating EBIT removes the impact of a company's capital structure and its tax rates when comparing the results of companies within or across industry sectors. Management uses Adjusted operating EBIT as a measure of how its operations are performing and to focus attention on amortization and depreciation expense to drive higher returns on invested capital. In addition, Adjusted operating EBIT is used by management as a means to measure the performance of its operating locations and is a significant metric in the determination of compensation for certain employees. Adjusted EBITA accomplishes a similar comparative result as Adjusted operating EBIT, but further removes amortization attributable to intangible assets. Intangible assets are measured at fair value when we complete an acquisition and amortized over their estimated useful lives. We view capital and landfill asset amortization as a proxy for the amount of capital reinvestment required to continue operating our business steady state. We believe that the replacement of intangible assets is not required to continue our operations as the costs associated with continuing operations are already captured in operating or selling, general and administration expenses. Accordingly, we view Adjusted EBITA as a measure that eliminates the impact of a company's acquisitive nature and permits a higher degree of comparability across companies within our industry or across different sectors from an operating performance perspective. Finally, Adjusted net income is a measure of our overall earnings and profits and is further used to calculate our net income per share. Adjusted net income reflects what we believe is our "operating" net income which excludes certain non-operating income or expenses. Adjusted net income is an important measure of a company's ability to generate profit and earnings for its shareholders which is used to compare company performance both amongst and between industry sectors.

(B) We have adopted a measure called "free cash flow" to supplement net income or loss as a measure of our operating performance. Free cash flow is a term which does not have a standardized meaning prescribed by U.S. GAAP, is prepared before dividends declared and shares repurchased, and may not be comparable to similar measures prepared by other companies. The purpose of presenting this non-GAAP measure is to provide disclosure similar to the disclosure provided by other U.S. publicly listed companies in our industry and to provide investors and analysts with an additional measure of our value and liquidity. We use this non-GAAP measure to assess our performance relative to other U.S. publicly listed companies and to assess the availability of funds for growth investment, debt repayment, share repurchases or dividend increases. All references to "free cash flow" in this document have the meaning set out in this note.

2014 outlook assumptions and factors

The Company's 2014 outlook includes a variety of assumptions and factors. The Company's 2014 outlook is the aggregation of each location's operating and financial plans for 2014. Each operating location builds its 2014 plan employing a bottom-up approach, which includes a forecast of price, volumes, new business volume, pricing growth and lost business. Each location's outlook includes assumptions around productivity, operating costs, selling, general and administrative costs and capital and landfill expenditures. The assumptions applied at each operating location vary as a result of the environment in which it competes to provide service and the combination of assumptions is unique to each location. Accordingly, the assumptions applied in one location will differ from those applied in another, reflecting differences in the general economic environment, the locations share of the market, competition in the market, the locations operating strategy for the coming year, compensation levels, disposal rates, fuel prices, maintenance costs, to name a few.

The Company has prepared its 2014 outlook assuming the Canadian and U.S. dollars are exchanged at $0.90. A strengthening of the Canadian dollar relative to the U.S. dollar results in higher reported revenues, EBITDA(A) and net income and also increases the Company's reported balance sheet amounts. Should the Canadian dollar weaken relative to the U.S. dollar, the inverse result will occur.

The Company has assumed that there is no significant positive or negative change to the economic environment in the preparation of its outlook for 2014. Each operating location considers the economic environment in which it operates when preparing its 2014 outlook. A significant positive or negative change to the economic environment could have a significant impact on the business as a whole, or isolated locations where we operate. Significant economic changes will have the most pronounced impact on our services which are more sensitive to changes in the economic environment, including, most notably, industrial, disposal and material recycling services. Additional information pertaining to the sensitivity of certain services we provide relative to the economic environment are outlined in greater detail in the Risk and Uncertainties section of the Company's Management Discussion and Analysis ("MD&A").

The Company has included forward looking information pertaining to revenues, specific events, selling, general and administrative expense, interest expense, taxation, share repurchases, our liquidity, withholding taxes and amortization expense in the Outlook section of its MD&A. Readers are cautioned that some or all of the forward looking information may not occur as we expect which could result in a significant difference between our 2014 outlook and our the results we actually achieve.

We historically complete several acquisitions in an operating year. However, our outlook does not contemplate us acquiring any companies in 2014. The timing, nature, size and contribution of each acquisition to our financial performance is not known until the acquisition is consummated. Accordingly, we have specifically excluded any acquisitions from our 2014 outlook for these reasons. Readers are cautioned that our actual 2014 results may include acquisitions, which if completed will impact our 2014 results. Acquisitions will contribute additional revenues, earnings, additional capital requirements, and typically increase our long-term debt levels. Contributions from acquisitions completed in the prior year are included in our 2014 outlook.

Our estimate for capital and landfill expenditures follows the same bottom-up approach outlined above. Our capital and landfill estimate is subject to many factors and uncertainties, some of which are out of our control, including availability, timing of receipt and cost. Management may also withhold or advance capital at a pace inconsistent with its 2014 outlook due to factors that it deems necessary to best manage the Company's financial resources which could impact the Company's levels of debt and the interest expense expected in its 2014 outlook. Management may also withhold capital and landfill expenditures from its 2014 outlook or accelerate expenditures which are not otherwise contemplated in its 2014 plan. Finally, capital expenditures in respect of infrastructure projects may be delayed or advanced which could impact the projects contribution to our planned revenues, EBITDA(A) and net income for 2014.

Cash taxes are derived from estimated levels of income subject to tax across each of the Company's locations and jurisdictions we operate in. We have assumed that losses remain available at current levels to shield income otherwise subject to tax and our estimate of cash tax reflects posted Federal, Provincial or State tax rates, as applicable. A significant change in either Federal, Provincial or State tax rates, or our availability of losses available to shield income otherwise subject to tax could result in a significant change in our cash tax estimate for 2014. Additionally, our operating performance could have a significant impact on our 2014 outlook for cash taxes. Cash taxes are predominantly incurred by the Company from its Canadian operations. A failure of the Canadian operations to deliver on its 2014 outlook would result in a reduction in cash taxes. Outperforming our 2014 outlook will result in higher cash tax amounts. Additionally, our cash tax estimates assume that we will continue to have available to us a similar level of tax deduction that was available to us in the prior year. Changes to either the availability or amount of deduction could result in a significant change to income subject to tax and ultimately cash taxes.

Free cash flow(B) is the result of aggregating each locations performance, capital spend and landfill closure and post-closure cost accretion, coupled with cash taxes and interest expense. As noted above, each of these items is subject to its own set of assumptions and uncertainties. Accordingly, a change in any one or all of these assumptions could have a positive or negative impact on our ability to generate our projected free cash flow(B) amounts for 2014.

Caution regarding forward looking statements

The Company's 2014 outlook is subject to the same risks and uncertainties outlined in the Risk and Uncertainties section of the Company's Management Discussion and Analysis, as applicable and investors are urged to fully review these sections before making an investment decision. This press release contains forward-looking statements and forward-looking information. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events. These statements can generally be identified by the use of forward-looking words or phrases such as "anticipate," "believe," "budget," "continue," "could," "estimate," "expect," "forecast," "goals," "intend," "intent," "belief," "may," "plan," "foresee," "likely," "potential," "project," "seek," "strategy," "synergies," "targets," "will," "should," "would," or variations of such words and other similar words. Forward-looking statements include, but are not limited to, statements relating to future financial and operating results and our plans, objectives, prospects, expectations and intentions. These statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Numerous important factors could cause our actual results, performance or achievements to differ materially from those expressed in or implied by these forward-looking statements, including, without limitation, those factors outlined in the Risks and Uncertainties section of the Company's Management Discussion and Analysis. We caution that the list of factors is illustrative and by no means exhaustive. In addition, we cannot assure you that any of our expectations, estimates or projections will be achieved.

All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements in this press release are qualified by these cautionary statements. The forward-looking statements in this press release are made as of the date of this press release and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

About Progressive Waste Solutions Ltd.

As one of North America's largest full-service waste management companies, we provide non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in 13 U.S. states and the District of Columbia and six Canadian provinces. We serve our customers with vertically integrated collection and disposal assets. Progressive Waste Solutions Ltd.'s shares are listed on the New York and Toronto Stock Exchanges under the symbol BIN.

To find out more about Progressive Waste Solutions, visit our website at www.progressivewaste.com.

---------------------------------------------------------------------------- Management will hold a conference call on Thursday, February 13, 2014, at 8:30 a.m. (ET) to discuss results for the three months and year ended December 31, 2013. Participants may listen to the call by dialing 1-888-241- 0394, conference ID 21531740, at approximately 8:20 a.m. (ET). International or local callers should dial 647-427-3413. The call will also be webcast live at http://www.streetevents.com/ and at http://www.progressivewaste.com/. A supplemental slide presentation will be available at http://www.progressivewaste.com/. A replay will be available after the call until Wednesday, February 27, 2014, at midnight, and can be accessed by dialing 1-855-859-2056, conference ID 21531740. International or local callers can access the replay by dialing 404-537-3406. The audio webcast will also be archived at http://www.streetevents.com/ and http://www.progressivewaste.com/. ---------------------------------------------------------------------------- FOR FURTHER INFORMATION PLEASE CONTACT: Progressive Waste Solutions Ltd.Chaya Cooperberg VP, Investor Relations and Corporate Communications (905) 532-7517 chaya.cooperberg@progressivewaste.comProgressive Waste Solutions Ltd.Laura Lepore Manager, Investor Relations and Corporate Communications (905) 532-7519 laura.lepore@progressivewaste.comwww.progressivewaste.com Source: Progressive Waste Solutions Ltd.


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