Waste nections(US:WCN)2022-11-03 10:02Revenue Growth - Total revenues increased by $282.7 million, or 17.7%, to $1.880 billion for the three months ended September 30, 2022, compared to $1.597 billion for the same period in 2021[151]. - For the nine months ended September 30, 2022, total revenues rose by $815.5 million, or 18.0%, to $5.343 billion from $4.527 billion in the prior year[151]. - Acquisitions closed during or subsequent to the comparable periods contributed an increase of $154.1 million and $410.6 million to revenues for the three and nine months ended September 30, 2022, respectively[152]. Price Increases - The net increase in prices charged to customers at existing operations was $154.2 million for the three months ended September 30, 2022, consisting of $126.3 million in core price increases and $27.9 million in surcharges[153]. - For the nine months ended September 30, 2022, the net increase in prices charged to customers was $376.9 million, including $315.3 million in core price increases and $61.6 million in surcharges[153]. Operating Income and Expenses - Operating income for the three months ended September 30, 2022, was $326.8 million, representing 17.4% of revenues, compared to $285.1 million, or 17.9%, in the same period of 2021[151]. - The cost of operations for the three months ended September 30, 2022, was $1.121 billion, or 59.6% of revenues, compared to $946.1 million, or 59.2%, in the same period of 2021[151]. - Total cost of operations increased by $174.5 million, or 18.4%, to $1.121 billion for the three months ended September 30, 2022, primarily due to additional operating costs from acquisitions and increased operating costs at existing operations[160]. Net Income - Net income attributable to Waste Connections for the three months ended September 30, 2022, was $236.9 million, or 12.6% of revenues, compared to $114.4 million, or 7.2%, in the prior year[151]. - Reported net income attributable to Waste Connections for the nine months ended September 30, 2022, was $641,310 thousand, an increase of 42% from $451,736 thousand in 2021[278]. - Adjusted net income attributable to Waste Connections for the nine months ended September 30, 2022, was $755,516 thousand, compared to $629,472 thousand in 2021, indicating a rise of 20%[278]. Segment Performance - Revenue for the Eastern segment increased by $104.9 million to $501.1 million for the three months ended September 30, 2022, compared to $396.2 million for the same period in 2021[214]. - Southern segment revenue increased by $57.4 million to $428.4 million for the three months ended September 30, 2022, from $371.0 million in the prior year[219]. - Western segment revenue increased by $53.5 million to $385.5 million for the three months ended September 30, 2022, compared to $332.0 million in the same period of 2021[222]. - Central segment revenue increased by $49.0 million to $322.7 million for the three months ended September 30, 2022, from $273.7 million in the prior year[227]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $1.500 billion for the nine months ended September 30, 2022, an increase of $230.2 million from $1.270 billion in the same period of 2021[239]. - Net cash used in investing activities increased by $823.7 million to $1.859 billion for the nine months ended September 30, 2022, primarily due to acquisitions and capital expenditures[243]. - Capital expenditures for property and equipment were $618.3 million for the nine months ended September 30, 2022, with an expected total of approximately $850 million for the year[248]. Debt and Financing - Long-term borrowings increased by $1.098 billion during the nine months ended September 30, 2022, compared to an increase of $131.9 million during the same period in 2021[249]. - The company completed a public offering of $500 million in 3.20% Senior Notes due 2032 and $750 million in 4.20% Senior Notes due 2033 in 2022[252][253]. - As of September 30, 2022, the company had $650 million under the term loan and $738.2 million under the revolving credit facility outstanding, with a total long-term debt of $6.28 billion[251][262]. Operational Challenges - The company incurred over $40 million in incremental COVID-19-related costs since the onset of the pandemic, primarily for supplemental pay for frontline employees[145]. - Volume losses totaled $22.3 million for the three months ended September 30, 2022, primarily due to nonrenewal of residential collection contracts and decreases in landfill disposal volumes[154]. - Inflationary pressures have been observed, particularly in fuel, materials, and labor costs, but the company can pass through certain costs to customers under many contracts[280]. Miscellaneous - The effective tax rate for Q3 2022 was 17.1%, up from 13.8% in Q3 2021, with income taxes increasing by $30.4 million to $48.8 million[202]. - The company approved a normal course issuer bid to purchase up to 12,859,066 common shares from August 10, 2022, to August 9, 2023[246]. - The company has financial surety bonds totaling approximately $1.425 billion as of September 30, 2022, supporting its financial assurance needs[267].