Please Read and Agree to the Following Before Proceeding

This website contains forward-looking statements within the meaning of the U.S. federal securities laws. All statements other than statements of historical facts on this website, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects and objectives of management for future operations (including development plans and objectives relating to our activities), are forward-looking statements. Many, but not all, of these statements can be found by looking for words like "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend," "future" and similar words. Statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements.

Examples of these risks, uncertainties and other factors include, but are not limited to:

  • our history of losses;
  • operating in a highly competitive industry and the inability to compete effectively with larger and better capitalized companies and governmental service providers;
  • results being vulnerable to a downturn in economic conditions;
  • we may lose contracts through competitive bidding, early termination or governmental action;
  • some of our customers, including governmental entities, have suffered financial difficulties affecting their credit risk, which could negatively impact our operating results;
  • our financial and operating performance may be affected by the inability in some instances to renew landfill operating permits, obtain new landfills or expand existing ones;
  • the cost of operation and/or future construction of our existing landfills may become economically unfeasible causing us to abandon or cease operations;
  • we could be precluded from maintaining permits or entering into certain contracts if we are unable to obtain sufficient third-party financial assurance or adequate insurance coverage;
  • our accruals for our landfill site closure and post-closure costs may be inadequate;
  • our cash flow may not be sufficient to finance our high capital expenditure requirements;
  • our acquisitions, including our ability to integrate acquired businesses, or that the acquired businesses will have unexpected risks or liabilities;
  • the seasonal nature of our business and event-driven waste projects that could cause our results to fluctuate;
  • we may be subject to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, result in adverse judgments, settlements or fines and create negative publicity;
  • fuel supply and prices that may fluctuate significantly and that we may not be able to pass on cost increases to our customers or effectively hedge such costs;
  • fluctuations in the prices of commodities;
  • increases in labor and disposal costs and related transportation costs could adversely impact our financial results;
  • derivatives could adversely affect our results;
  • efforts by labor unions to organize our workforce could adversely affect operating results;
  • we depend significantly on the services of the members of our senior, regional and local management teams, and the departure of any of those persons could cause our operating results to suffer;
  • we are increasingly dependent on technology in our operations and, if our technology fails, our business could be adversely affected;
  • a cybersecurity incident could negatively impact our business and our relationships with customers;
  • operational and safety risks, including the risk of personal injury to employees and others;
  • we are subject to substantial governmental regulation and failure to comply with these requirements, as well as enforcement actions and litigation arising from an actual or perceived breach of such requirements, could subject us to fines, penalties and judgments, and impose limits on our ability to operate and expand;
  • operations being subject to environmental, health and safety laws and regulations, as well as contractual obligations that may result in significant liabilities;
  • future changes in laws or renewed enforcement of laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results;
  • fundamental change in the waste management industry as traditional waste streams are increasingly viewed as renewable resources and changes in laws and environmental policies may limit the items that enter the waste stream, any of which may adversely impact volumes and tipping fees at our landfills;
  • alternatives to landfill disposal may cause our revenues and operating results to decline;
  • our substantial indebtedness and our working capital deficit;
  • our ability to implement growth strategy as and when planned; and
  • other risks described in in our filings with the Securities and Exchange Commission available to the public on the SEC’s website at www.sec.gov.

The above examples are not exhaustive and new risks may emerge from time to time. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we will operate in the future. These forward-looking statements speak only as of the date of this website. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based.

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24.43 -0.31 -1.25% Volume: 294,797 December 18, 2018

Our business is your business.

We’re committed to providing timely, transparent information to our investors every step of the way.

Our business is your business.

We’re committed to providing timely, transparent information to our investors every step of the way.

Advanced Disposal is the fourth largest solid waste company in the United States

2.8 million residential customers located throughout16 states

A fleet of more than 3,000 hauling vehicles servicing over 200,000 commercial & industrial customers

We take care to leave our streets and cities cleaner than we found them.

93 hauling collection facilities located within the communities we serve.

Approximately 35,000 tons ofwaste per work day collected by93 hauling collection facilities

73 transfer stations providing environmental solutions for non-hazardous waste reduction and disposal.

News Release

Advanced Disposal Announces Fourth Quarter Results

02/22/2018
Fourth quarter revenue grows at a company best 9.2% year-over-year
Full year cash from operations and adjusted free cash flow up 30% and 40%, respectively, versus prior year

PONTE VEDRA, Fla., Feb. 22, 2018 -- Advanced Disposal Services, Inc. (NYSE: ADSW), (d/b/a Advanced Disposal) announced today revenue for the three months ended December 31, 2017 of $384.4 million versus $352.0 million in the same period of the prior year. Net income during fourth quarter 2017 was $42.0 million, or $0.47 per diluted share, versus a net loss of $20.1 million, or $0.24 per diluted share in fourth quarter 2016.  Excluding certain gains and expenses, adjusted net income in fourth quarter 2017 was $11.2 million and adjusted diluted earnings per share was $0.13.

"One of our key areas of focus is cash flow generation, and we are pleased that for 2017 Advanced Disposal achieved a 30% increase in cash from operations and 40% increase in adjusted free cash flow year-over-year," said Richard Burke, CEO. "We also are seeing strong top-line growth, which should position us well as we move into 2018."

Fourth Quarter and Full Year Highlights

  • Fourth quarter revenue of $384.4 million was up 9.2% over the prior year
  • Achieved fourth quarter average yield of 1.1% and organic volume growth of 2.9% led by strong disposal volume
  • Year-over-year growth from acquisitions was 5.5% in the fourth quarter due to the first quarter purchase of CGS Services, Inc. and thirteen tuck-in acquisitions completed during 2017
  • Net income for the fourth quarter was $42.0 million or $0.47 per diluted share aided in part by a $40.4 million tax impact from the Tax Cuts and Jobs Act
  • Adjusted EBITDA of $108.8 million for the fourth quarter up $1.1 million year-over-year despite impacts from healthcare costs and net fuel costs that were a $3.4 million headwind
  • Adjusted net income was $11.2 million for the fourth quarter and adjusted diluted earnings per share was $0.13
  • Full year revenue of $1,507.6 million was up 7.3% over the prior year
  • Net income for the full year was $38.3 million and adjusted EBITDA grew $7 million to $418.1 million
  • Became a majority independent Board of Directors and all committees are now comprised of independent directors
  • Received a credit rating upgrade by Standard & Poor's
  • Reduced the interest rate on the company's $1.46 billion of Term Loan B debt by 50 basis points to LIBOR+225 basis points
  • Full year cash provided by operating activities was $308.8 million, an increase of 30%
  • Full year adjusted free cash flow increased 40% to $131.8 million

Fiscal Year 2018 Guidance
Advanced Disposal's guidance is based on current economic conditions and does not assume any significant changes in the overall economy during 2018.  Please refer to the Special Note Regarding Forward-Looking Statements section of this press release.

  • Revenue is estimated to be between $1,545 million and $1,565 million. This includes average yield of 2.1% to 2.8%, organic volume of 0.4% to 1.0%, acquisition rollover revenue of 1.3%, and an estimated (1.4%) impact from lower revenue from the sale of commodities and the adoption of the new revenue recognition standard.
  • Adjusted EBITDA is estimated to be between $426 million and $436 million.
  • Capital expenditures are estimated to be between $184 million and $194 million.
  • Adjusted free cash flow is estimated to be between $134 million and $144 million.

Advanced Disposal will conduct a quarterly earnings conference call on February 23, 2018 at 10:00 a.m. EST. The call can be accessed by dialing (866) 478-7805 domestically or (832) 445-1679 internationally and asking for conference ID 3099638 or the Advanced Disposal Q4 2017 earnings call. This call will be recorded and available via replay approximately two hours after the completion of the earnings call for thirty days. You may access the recording by dialing (855) 859-2056 or through the link on the investor relations page of our website at www.AdvancedDisposal.com.

The calculation of free cash flow and adjusted free cash flow, as well as details of charges and other expenses that are excluded from EBITDA and net income (loss) in arriving at adjusted EBITDA and adjusted net income, are contained in the "Reconciliation of Certain Non-GAAP Measures" section of this press release.

 

 

SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION AND OPERATING
DATA

Advanced Disposal Services, Inc.

Statements of Operations


(in millions, except share and per share data)



Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Service revenues

$

384.4



$

352.0



$

1,507.6



$

1,404.6


Operating costs and expenses








Operating

245.0



212.9



962.1



865.5


Selling, general and administrative

42.1



37.3



169.5



157.0


Depreciation and amortization

71.9



57.5



269.8



246.9


Acquisition and development costs

0.1



0.5



1.3



0.7


Loss on disposal of assets and asset impairments

0.3



0.6



11.4



1.8


Restructuring charges





3.4



0.8


Total operating costs and expenses

359.4



308.8



1,417.5



1,272.7


Operating income

25.0



43.2



90.1



131.9


Other (expense) income








Interest expense

(23.3)



(27.5)



(93.0)



(130.2)


Loss on debt extinguishments and modifications

(3.7)



(64.7)



(3.7)



(64.7)


Other income, net

4.2



6.0



3.7



6.9


Total other expense

(22.8)



(86.2)



(93.0)



(188.0)


Income (loss) before income taxes

2.2



(43.0)



(2.9)



(56.1)


Income tax benefit

(39.8)



(22.9)



(41.2)



(25.7)


Net income (loss)

$

42.0



$

(20.1)



$

38.3



$

(30.4)










Net loss attributable to common stockholders per share








Basic income (loss) per share

$

0.47



$

(0.24)



$

0.43



$

(0.44)


Diluted income (loss) per share

$

0.47



$

(0.24)



$

0.43



$

(0.44)


Basic average shares outstanding

88,479,341



84,262,502



88,323,213



69,462,798


Diluted average shares outstanding

89,106,848



84,262,502



88,887,812



69,462,798


 

 

Advanced Disposal Services, Inc.

Consolidated Balance Sheets


(in millions, except shares)



December 31,


2017


2016

Assets




Current assets




Cash and cash equivalents

$

6.8



$

1.2


Accounts receivable, net of allowance for doubtful accounts of $5.4 and $4.0, respectively

199.9



183.2


Prepaid expenses and other current assets

37.9



30.3


Total current assets

244.6



214.7


Other assets

23.0



23.3


Property and equipment, net of accumulated depreciation of $1,355.5 and $1,163.0, respectively

1,728.8



1,633.4


Goodwill

1,208.2



1,173.9


Other intangible assets, net of accumulated amortization of $247.6 and $210.7, respectively

288.7



324.6


Total assets

$

3,493.3



$

3,369.9


Liabilities and Stockholders' Equity




Current liabilities




Accounts payable

$

92.3



$

86.5


Accrued expenses

113.0



109.8


Deferred revenue

69.1



62.5


Current maturities of landfill retirement obligations

20.2



29.3


Current maturities of long-term debt

74.1



36.5


Total current liabilities

368.7



324.6


Other long-term liabilities

61.5



54.2


Long-term debt, less current maturities

1,884.2



1,887.0


Accrued landfill retirement obligations, less current maturities

205.7



161.8


Deferred income taxes

88.6



112.8


Total liabilities

2,608.7



2,540.4


Equity




Common stock: $.01 par value, 1,000,000,000 shares authorized, 88,491,194 and 88,034,813
shares outstanding, respectively

0.9



0.8


Additional paid-in capital

1,487.4



1,470.3


Accumulated other comprehensive loss

(0.4)




Accumulated deficit

(603.3)



(641.6)


Treasury stock at cost, 2,274 and 0 shares, respectively




Total stockholders' equity

884.6



829.5


Total liabilities and stockholders' equity

$

3,493.3



$

3,369.9


 

 

Advanced Disposal Services, Inc.

Consolidated Statements of Cash Flows


(in millions)

Year Ended December 31,


2017


2016

Cash flows from operating activities




Net income (loss)

$

38.3



$

(30.4)


Adjustments to reconcile net income (loss) to net cash provided by operating activities




Depreciation and amortization

269.8



246.9


Change in fair value of derivative instruments

(1.5)



(18.5)


Amortization of debt issuance costs and original issue discount

6.3



17.5


Loss on debt extinguishments and modifications

3.7



64.7


Accretion on landfill retirement obligations

15.4



13.0


Other accretion and amortization

3.5



4.0


Provision for doubtful accounts

5.4



3.7


Loss on disposition of property and equipment

1.6



3.5


Impairment of assets

13.0




Gain on disposition of business

(2.8)



(1.7)


Stock based compensation

10.2



6.3


Deferred tax benefit

(41.3)



(26.5)


Earnings in equity investee

(1.6)



(1.8)


Changes in operating assets and liabilities, net of businesses acquired




Increase in accounts receivable

(17.7)



(8.8)


(Increase) decrease in prepaid expenses and other current assets

(5.9)



2.8


Decrease in other assets

2.4



1.8


Increase (decrease) in accounts payable

4.1



(0.9)


Decrease in accrued expenses

(2.6)



(14.3)


Increase (decrease) in deferred revenue

2.2



(1.0)


Increase (decrease) in other long-term liabilities

0.6



(3.4)


Capping, closure and post-closure obligations

(18.3)



(19.9)


Assumption of long-term care and closure reserve

24.0




Net cash provided by operating activities

308.8



237.0


Cash flows from investing activities




Purchases of property and equipment and construction and development

(186.6)



(171.0)


Proceeds from sale of property and equipment

2.2



3.3


Acquisition of businesses, net of cash acquired

(111.9)



(5.4)


Proceeds from sale of businesses

8.7



2.5


Net cash used in investing activities

(287.6)



(170.6)


Cash flows from financing activities




Proceeds from borrowings on debt instruments

326.2



782.8


Repayments on debt instruments, including capital leases

(347.0)



(1,164.4)


Bank overdraft



(2.6)


Proceeds from issuance of common stock



375.6


Costs associated with issuance of common stock



(1.9)


Costs associated with debt extinguishments and modifications

(1.8)



(50.9)


Proceeds from stock option exercises

7.0



17.4


Return of capital to former parent



(21.8)


Net cash used in financing activities

(15.6)



(65.8)


Net increase in cash and cash equivalents

5.6



0.6


Cash and cash equivalents, beginning of year

1.2



0.6


Cash and cash equivalents, end of year

$

6.8



$

1.2


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, 2017 appearing in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission.

REVENUE

The following table reflects our revenue by line of business for the periods presented (in millions and as a percentage of revenue):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Collection

$

264.3


68.8

%


$

243.4


69.1

%


$

1,017.4


67.5

%


$

977.4


69.6

%

Disposal

134.7


35.0

%


126.6


36.0

%


542.5


36.0

%


517.9


36.9

%

Sale of recyclables

5.6


1.5

%


6.3


1.8

%


33.2


2.2

%


22.6


1.6

%

Fuel fees and
environmental fees

27.9


7.3

%


23.9


6.8

%


103.9


6.9

%


88.5


6.3

%

Other

25.6


6.7

%


19.2


5.5

%


104.4


6.9

%


74.7


5.3

%

Intercompany eliminations

(73.7)


(19.3)

%


(67.4)


(19.2)

%


(293.8)


(19.5)

%


(276.5)


(19.7)

%

Total

$

384.4


100.0

%


$

352.0


100.0

%


$

1,507.6


100.0

%


$

1,404.6


100.0

%

 The following table reflects changes in revenue, as compared to the prior year:


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Average yield

1.1

%


2.7

%


1.2

%


2.2

%

Recycling

(0.2)

%


0.3

%


0.8

%


0.1

%

Fuel fee revenue

0.5

%


(0.3)

%


0.4

%


(0.7)

%

Total yield

1.4

%


2.7

%


2.4

%


1.6

%

Organic volume

2.9

%


(3.0)

%


1.4

%


(1.7)

%

Acquisitions

5.5

%


1.5

%


3.9

%


1.8

%

Divestitures

(0.6)

%


(0.5)

%


(0.4)

%


(1.1)

%

Total revenue change

9.2

%


0.7

%


7.3

%


0.6

%

OPERATING EXPENSES

The following table summarizes our operating expenses for the periods presented (in millions and as a percentage of revenue):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Operating

$

240.7



62.6

%


$

209.7



59.6

%


$

946.7



62.8

%


$

852.5



60.7

%

Accretion of landfill retirement obligations

4.3



1.1

%


3.2



0.9

%


15.4



1.0

%


13.0



0.9

%

Operating expenses

$

245.0



63.7

%


$

212.9



60.5

%


$

962.1



63.8

%


$

865.5



61.6

%

The following table summarizes the major components of our operating expenses, excluding accretion expense on landfill retirement obligations for the periods presented (in millions and as a percentage of revenue):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Labor and related benefits

$

80.0



20.8

%


$

72.2



20.5

%


$

313.2



20.8

%


$

292.4



20.8

%

Transfer and disposal costs

50.2



13.1

%


46.9



13.3

%


205.0



13.6

%


188.9



13.4

%

Maintenance and repairs

34.8



9.1

%


31.0



8.8

%


139.3



9.2

%


129.4



9.2

%

Fuel

19.3



5.0

%


14.8



4.2

%


68.3



4.5

%


55.2



3.9

%

Franchise fees and taxes

17.1



4.4

%


16.2



4.6

%


67.8



4.5

%


65.2



4.6

%

Risk management

9.2



2.4

%


5.9



1.7

%


33.8



2.2

%


28.7



2.1

%

Other

26.8



7.0

%


22.7



6.5

%


108.2



7.3

%


92.7



6.7

%

Subtotal

$

237.4



61.8

%


$

209.7



59.6

%


$

935.6



62.1

%


$

852.5



60.7

%

Greentree expenses, net of estimated
insurance recoveries

3.3



0.8

%




%


11.1



0.7

%




%

Operating expenses, excluding accretion expense

$

240.7



62.6

%


$

209.7



59.6

%


$

946.7



62.8

%


$

852.5



60.7

%

SELLING, GENERAL AND ADMINISTRATIVE

The following table summarizes our selling, general and administrative expenses for the periods presented (in millions and as a percentage of revenue):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Salaries

$

24.2



6.3

%


$

23.9



6.8

%


$

105.5



7.0

%


$

95.8



6.8

%

Legal and professional

5.2



1.4

%


1.9



0.5

%


13.9



0.9

%


16.2



1.2

%

Other

12.7



3.3

%


11.5



3.3

%


50.1



3.3

%


45.0



3.2

%

Total selling, general and
administrative expenses

$

42.1



11.0

%


$

37.3



10.6

%


$

169.5



11.2

%


$

157.0



11.2

%

ADDITIONAL STATISTICS

The following table reflects cash interest and cash taxes for the periods presented (in millions):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Cash paid for interest

$

27.6



$

44.0



$

86.2



$

119.4


Cash paid for taxes

0.4



0.1



1.4



1.5


Internalization for the three months ended December 31, 2017: 62%

Days Sales Outstanding for the three months ended December 31, 2017: 48 (31 net of deferred revenue)

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted free cash flow and adjusted net income are not defined terms under U.S. generally accepted accounting principles ("non-GAAP measures").  Non-GAAP measures should not be considered in isolation or as a substitute for net income, income per diluted share or cash flow data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.

We define EBITDA as net income (loss) from continuing operations adjusted for interest, taxes, depreciation and amortization and accretion.  We define adjusted EBITDA as EBITDA adjusted to exclude non-cash and non-recurring items as well as other adjustments permitted in calculating covenant compliance under the agreements governing our outstanding debt securities and credit facilities.  We believe adjusted EBITDA is useful to investors in evaluating our performance compared to other companies in our industry because it eliminates the effect of financing, income taxes and the accounting effects of capital spending, as well as certain items that are not indicative of our performance on an ongoing basis.  Management uses adjusted EBITDA to measure the performance of our core operations at the consolidated, segment and business unit levels and as a metric for a significant portion of our management incentive plans.

We define free cash flow as net cash provided by operating activities less capital expenditures (purchases of property and equipment, excluding expenditures for significant new municipal contracts and significant purchases of land for future landfill airspace), net of proceeds from the sale of property and equipment.  We define adjusted free cash flow as free cash flow excluding restructuring payments, capital markets costs, and non-recurring items.  Management uses adjusted free cash flow to evaluate the Company's ability to generate cash to fund its activities on an ongoing basis, and we believe adjusted free cash flow is useful to investors in evaluating our performance compared to other companies in our industry because it eliminates the effect of restructuring payments, capital market costs, and other non-recurring items, which are not indicative of our ability to generate cash on an ongoing basis.

We define adjusted net income and adjusted earnings per share as net income (loss) from continuing operations and diluted earnings per share adjusted to exclude non-cash and non-recurring items. We believe adjusted net income and adjusted earnings per share provide an understanding of operational activities before the financial impact of certain items.  We believe that these measures are useful in evaluating our operations as these measures are adjusted for items that affect comparability between periods.

In fiscal 2014, we made a strategic decision to enter into fuel derivatives as economic hedges of a rise in the price of diesel fuel for fiscal 2015 and fiscal 2016. We have not entered into fuel derivatives since fiscal 2014 when the economic hedges for fiscal 2015 and fiscal 2016 were put in place and have no present intention to enter into fuel derivatives. We therefore believe that excluding realized losses from fuel derivatives provides useful additional information for investors to evaluate comparability among periods and is consistent with how management evaluates performance. In fiscal 2016, we entered into interest rate caps as economic hedges of a rise in interest rates for fiscal 2017, fiscal 2018 and the nine months ended September 30, 2019. We believe that excluding realized and unrealized gains and losses from interest rate derivatives from our adjusted EBITDA provides useful additional information in evaluating ongoing financial performance of the business as these derivatives represent a risk management tool to reduce our exposure to rising interest rates and are viewed by management as a financing cost similar to interest expense.  We also purchased additional interest rate caps in fiscal 2017 to hedge the risk of rising interest rates from October 1, 2019 to September 30, 2021.  These interest rate caps qualify for hedge accounting and realized gains and losses will flow through interest expense, which is excluded from adjusted EBITDA.

ADJUSTED EBITDA

The following table calculates adjusted earnings before interest, taxes, depreciation, amortization and accretion adjusted for certain other costs (in millions except percentages):


Three Months Ended December 31,


Year Ended December 31,


2017


2016


2017


2016

Net income (loss)

$

42.0



$

(20.1)



$

38.3



$

(30.4)


  Income tax benefit

(39.8)



(22.9)



(41.2)



(25.7)


  Interest expense

23.3



27.5



93.0



130.2


  Depreciation and amortization

71.9



57.5



269.8



246.9


  Loss on debt extinguishments and modifications

3.7



64.7



3.7



64.7


  Accretion on landfill retirement obligations

4.3



3.2



15.4



13.0


Accretion on loss contracts and other  long-term liabilities

0.1



0.1



0.4



0.4


EBITDA from continuing operations

105.5



110.0



379.4



399.1


EBITDA adjustments:








  Acquisition and development costs

0.1



0.5



1.3



0.7


  Stock based compensation

1.8



1.5



9.7



5.5


  Greentree expenses, net of estimated insurance recoveries

3.3





11.1




  Earnings in equity investee, net

0.3



0.2



0.3



(0.3)


  Restructuring charges





3.4



0.8


Loss on disposal of assets and asset impairments

0.3



0.6



11.4



1.8


  Unrealized gain on derivatives

(3.2)



(8.0)



(1.5)



(18.5)


Capital market costs

0.6



(0.1)



1.0



7.1


  Realized loss on derivatives

0.5



3.0



2.0



14.9


Other

(0.4)








Adjusted EBITDA

$

108.8



$

107.7



$

418.1



$

411.1










Revenue

$

384.4



$

352.0



$

1,507.6



$

1,404.6


Adjusted EBITDA margin

28.3

%


30.6

%


27.7

%


29.3

%

ADJUSTED FREE CASH FLOW

The following table calculates free cash flow and adjusted free cash flow (in millions):


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016

Net cash provided by operating activities

$

61.4



$

45.3



$

308.8



$

237.0


Purchases of property & equipment (a)

(46.1)



(46.8)



(174.8)



(171.0)


Proceeds from the sale of property & equipment

0.4



1.1



2.2



3.3


Free cash flow

15.7



(0.4)



136.2



69.3


Assumption of long-term care and closure reserves, net (b)

2.0





(20.0)




Restructuring payments

0.4



0.4



0.8



2.1


Payment to retired executive





6.2




Greentree costs, net of insurance recoveries

1.0





5.7




Capital market costs

0.6



0.4



0.9



7.7


Adjusted free cash flow

$

19.7



$

0.4



$

129.8



$

79.1


Realized loss on derivatives

0.5



3.0



2.0



14.9


Adjusted free cash flow excluding realized loss on derivatives

$

20.2



$

3.4



$

131.8



$

94.0


(a) Excludes the impact of land purchased for future airspace of $3.1 million during first quarter 2017 and the purchase of a facility related to a municipal contract of $8.7 million during third quarter 2017.

(b) The Company received a cash payment of $24.0 million during first quarter 2017 that is included in net cash provided by operating activities in exchange for assuming certain post-closure liabilities of a closed portion of a landfill and became responsible for expenditures related to a gas infrastructure system.  The assumed post-closure liabilities and expenditures related to the gas infrastructure system approximate the amount of the cash payment.  The Company paid $4.0 million of these costs during 2017.

ADJUSTED NET INCOME

The following table calculates adjusted net income (in millions except per share data):


Three Months Ended
December 31,


Year Ended
December 31,


2017


2016


2017


2016

Net income (loss)

$

42.0



$

(20.1)



$

38.3



$

(30.4)


  Loss on debt extinguishments and modifications

3.7



64.7



3.7



64.7


  Amortization of intangibles

10.3



10.4



41.5



42.6


  Acquisition and development costs

0.1



0.5



1.3



0.7


  Restructuring charges





3.4



0.8


Loss on disposal of assets and asset impairments

0.3



0.6



11.4



1.8


  Unrealized gain on derivatives

(3.2)



(8.0)



(1.5)



(18.5)


  Capital market costs

0.6



(0.1)



1.0



7.1


  Greentree expenses, net of estimated insurance recoveries

3.3





11.1




  Realized loss on derivatives

0.5



3.0



2.0



14.9


  Tax effect

(6.0)



(28.4)



(29.6)



(44.8)


  Tax impact of stock option exercises post IPO



(5.4)





(5.4)


  Tax effect of Tax Cuts and Jobs Act

(40.4)





(40.4)




Adjusted net income

$

11.2



$

17.2



$

42.2



$

33.5










Diluted earnings per common share:








  Adjusted average shares outstanding

89,106,848



84,425,401



88,887,812



70,325,456


  Adjusted earnings per common share

$

0.13



$

0.20



$

0.47



$

0.48


RECONCILIATION OF 2018 ADJUSTED FREE CASH FLOW OUTLOOK


2018 Outlook

Net cash provided by operating activities

$318.0 - $338.0

Purchases of property and equipment and construction and development

(184.0) - ($194.0)

Adjusted free cash flow

$134.0 - $144.0

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the U.S. federal securities laws. All statements other than statements of historical facts in this document, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects and objectives of management for future operations (including development plans and objectives relating to our activities), are forward-looking statements. Many, but not all, of these statements can be found by looking for words like "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend" and "future" and similar words. Statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended and are subject to safe harbor created by those sections. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, which could cause actual results to differ materially from the forward-looking statements contained in this release. Such risks, uncertainties and factors include those set forth under the heading Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Examples of these risks, uncertainties and other factors include, but are not limited to:

  • our ability to achieve future profitability will depend on us executing our strategy and controlling costs;

  • future results may be impacted by the expiration of net operating losses (NOLs);

  • our tax position may be affected by recent changes in the U.S. tax law

  • we operate in a highly competitive industry and the inability to compete effectively with larger and better capitalized companies and governmental service providers;

  • our results are vulnerable to economic conditions;

  • we may lose contracts through competitive bidding, early termination or governmental action;

  • some of our customers, including governmental entities, have suffered financial difficulties affecting their credit risk, which could negatively impact our operating results;

  • our financial and operating performance may be affected by the inability in some instances to renew or expand existing landfill permits or acquire new landfills. Further, the cost of operation and/or future construction of our existing landfills may become economically unfeasible causing us to abandon or cease operations;

  • we could be precluded from maintaining permits or entering into certain contracts if we are unable to obtain sufficient third-party financial assurance or adequate insurance coverage;

  • our accruals for our landfill site closure, post-closure and contamination related costs may be inadequate;

  • our cash flow may not be sufficient to finance our high level of capital expenditures;

  • our acquisitions, including our ability to integrate acquired businesses, or that the acquired businesses may have unexpected risks or liabilities;

  • the seasonal nature of our business and "event-driven" waste projects that could cause our results to fluctuate;

  • Adverse and destructive weather conditions that could result in higher fuel costs, higher labor costs, reduced municipal contract productivity and higher disposal costs;

  • we may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, result in adverse judgments, settlements or fines and create negative publicity;

  • fuel supply and prices may fluctuate significantly and we may not be able to pass on cost increases to our customers;

  • fluctuations in the prices of commodities may adversely affect our financial condition, results of operations and cash flows;

  • increases in labor and disposal costs and related transportation costs could adversely impact our financial results;

  • efforts by labor unions could divert management attention and adversely affect operating results;

  • we depend significantly on the services of the members of our senior, regional and local management teams, and the departure of any of those persons could cause our operating results to suffer;

  • we are increasingly dependent on technology in our operations and, if our technology fails, our business could be adversely affected;

  • a cybersecurity incident could negatively impact our business and our relationships with customers;

  • operational and safety risks, including the risk of personal injury to employees and others;

  • we are subject to substantial governmental regulation and failure to comply with these requirements, as well as enforcement actions and litigation arising from an actual or perceived breach of such requirements, could subject us to fines, penalties and judgments, and impose limits on our ability to operate and expand;

  • our operations being subject to environmental, health and safety laws and regulations, as well as contractual obligations that may result in significant liabilities;

  • future changes in laws or renewed enforcement of laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results;

  • fundamental change in the waste management industry as traditional waste streams are increasingly viewed as renewable resources and changes in laws and environmental policies may limit the items that enter the waste stream, any of which may adversely impact volumes and tipping fees at our landfills. Alternatives to landfill disposal may cause our revenues and operating results to decline;

  • risks associated with our substantial indebtedness and working capital deficit;

  • risks associated with our ability to implement our growth strategy as and when planned; and

  • the other risks described in the "Risk Factors" section of our 2017 Annual Report on Form 10-K.

The above examples are not exhaustive and new risks may emerge from time to time. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we will operate in the future. These forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based.

About Advanced Disposal
Advanced Disposal (NYSE: ADSW) brings fresh ideas and solutions to the business of a clean environment. We provide integrated, non-hazardous solid waste collection, recycling and disposal services to residential, commercial, industrial and construction customers across 16 states and the Bahamas. Our team is dedicated to finding effective, sustainable solutions to preserve the environment for future generations. We welcome you to learn more at AdvancedDisposal.com or follow us on Facebook.

Contact:
Matthew Nelson
Advanced Disposal
(904) 737-7900, Matthew.Nelson@AdvancedDisposal.com

Contact Us

Matthew Nelson

(904) 737-7900

Email us now

About Advanced Disposal

Advanced Disposal brings fresh ideas and solutions to the business of a clean environment. As the fourth largest solid waste company in the U.S., we provide integrated, non-hazardous solid waste collection, recycling and disposal services to residential, commercial, industrial and construction customers across 16 states and the Bahamas. Our team is dedicated to finding effective, sustainable solutions to preserve the environment for future generations.

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