Investor Presentation August 2017 SAFE HARBORS STATEMENT This - - PowerPoint PPT Presentation

Investor Presentation August 2017

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SAFE HARBORS STATEMENT

This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA) and "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections’ current beliefs and expectations regarding future events and operating performance. These forward- looking statements are often identified by the words “may,” “might,” “believes,” “thinks,” “expects,” “intends” or other words of similar meaning. All of the forward- looking statements included in this presentation are made pursuant to the safe harbor provisions of the PSLRA and applicable Canadian securities laws. Forward-looking statements involve risks and uncertainties. Forward-looking statements in this presentation include, but are not limited to, statements about our financial outlook, return of capital to shareholders, expected benefits of the divestiture program, potential acquisition opportunities and a potential dividend increase. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risk factors detailed from time to time in filings that have been made by the Company with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in

• Canada. You should not place undue reliance on forward-looking statements, which

speak only as of the date of this presentation. Waste Connections undertakes no

• bligation to update the forward-looking statements set forth in this presentation,

whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.

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WCN: INVESTMENT HIGHLIGHTS

 Third largest solid waste company in North America  ~$21 billion enterprise value; ~$11 billion assets; 15,000 employees  Differentiated strategy…Differentiated results  Only company focused on secondary and exclusive markets  Sector-leading EBITDA and free cash flow margins  Sector-leading conversion of EBITDA to free cash flow  Completed acquisition of Progressive Waste Solutions in June 2016  Multiple levers to drive further value creation  Well positioned for additional strategic growth opportunities  Active current M&A environment  Proven management team creating substantial stockholder value  Over 2x the shareholder return of WM and RSG and almost 4x the return

• f the S&P 500 over the past decade

 2016 was our 13th consecutive year of positive shareholder returns

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OUR DIFFERENTIATED STRATEGY

 Success in solid waste industry is driven by:  Market selection  Asset and contractual positioning  Execution at the local level

Our Focus:

 Exclusive markets  Vertically integrated or non-integrated  Competitive markets  Secondary markets with high collection market share  Vertically integrated or disposal neutral

Strategic Implications:

 Lower customer churn rates => comparably better price + volume growth  Not dependent on behavior or execution of other national players  Resilient in a weak economy; levered to improving economy  Collection => more profitable and with higher barriers to entry

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TARGETING ATTRACTIVE MARKETS

Integrated Operations Non-Integrated Operations Exclusive Markets: #1 EBITDA margin #1 EBIT margin #1 FCF margin #1 ROA #3 EBITDA margin #2(tie) EBIT margin #2 FCF margin #2 ROA Competitive Markets: #2 EBITDA margin #2(tie) EBIT margin #3 FCF margin #3 ROA #4 EBITDA margin #4 EBIT margin #4 FCF margin #4 ROA

Note: Rankings reflect relative attractiveness to WCN

Attractive if High Mkt Share & Disposal Neutral

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CURRENT FOOTPRINT: 85% US & 15% CANADA

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WCN: COMPARATIVE METRICS

_______________________________________________________ Non-GAAP measures; as defined by companies, excluding divestitures. 2017e based on company guidance.

• EBITDA to FCF Conversion:

2015 2016 2017e Waste Connections => 48% 51% 52% Waste Management => 37% 44% 40% Republic Services => 29% 33% 32%

20.0% 25.0% 30.0% 35.0% 2015 2016 2017e

Adjusted EBITDA* as % of Revenues

WM RSG WCN 4.0% 8.0% 12.0% 16.0% 20.0% 2015 2016 2017e

Adjusted FCF* as % of Revenues

WM RSG WCN

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WCN: FINANCIAL HIGHLIGHTS

$200 $400 $600 $800 2013 2014 2015 2016 2017e $ Millions

Adjusted Free Cash Flow*

FCF FCF as % of Revenue 12.0% 18.0% 24.0% 30.0% 36.0% $250 $500 $750 $1,000 $1,250 $1,500 2013 2014 2015 2016 2017e $ Millions

Adjusted EBITDA*

EBITDA EBITDA as % of Revenue $1.00 $1.50 $2.00 $2.50 $3.00 2013 2014 2015 2016 2017e

Adjusted FCF/Share*

FCF/share $0 $1,000 $2,000 $3,000 $4,000 $5,000 2013 2014 2015 2016 2017e $ Millions

Revenue

________________________________________________________________

2017e based on July 2017 outlook * A Non-GAAP measure; see appendix for reconciliation tables. 15.1% CAGR

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WCN: 10-YEAR OUTPERFORMANCE

As of 7/28/17

395% 166% 181% 108% 46%

100 200 300 400 500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

WCN WM RSG S&P 500 S&P/TSX Composite Index

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FINANCIAL DISCUSSION

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2016 FINANCIAL HIGHLIGHTS

 Revenue: $3.376 billion  Reflects seven months contribution from Progressive Waste operations  Solid waste strength  4.7% core price + volume growth

 2.8% core price  1.9% volume

 Adjusted EBITDA: $1.071 billion, or 31.7% of revenue  Increased EBITDA margins at Progressive Waste operations to ~30% in

2H ‘16 => up 500 bps

 Adjusted free cash flow: $550.9 million, or 16.3% of revenue  51+% conversion of adjusted EBITDA to adjusted free cash flow  Increased dividend 24% and ended the year ~2.7x Debt-to-EBITDA

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1H 2017 HIGHLIGHTS

 Revenue: $2.267 billion  Solid waste strength: 5.0% price + volume growth

 2.9% Price  2.1% Volume => disposal volumes above expectations

 E&P waste revenues up 45% year over year

 Margins back above corporate average => EBITDA minus capex exceeds 35% 

Same store recycled commodity sales up 55%

 OCC prices up over 65%

 Adjusted EBITDA: $706.4 million, or 31.2% of revenues  Adjusted free cash flow: $393.6 million, or 17.4% of revenue and 55.7% of

Adjusted EBITDA

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1H 2017 HIGHLIGHTS (cont’d)

 Above average acquisition activity  Completed acquisition of Groot Industries in January 2017  $200 million revenue collection and transfer company  Largest private hauler in North Central Illinois => platform for additional

M&A and increased internalization

 Several LOIs signed and offers pending  Divestiture program nearing completion => expected benefits above expectations  Expected to reduce revenue by ~$100 million, increase EBITDA by ~$3 million  Retained certain divestiture candidates due to performance improvements =>

decreased revenue by ~$10 million and increased EBITDA by ~$12 million

 Completed three-for-two stock split in June 2017  Leverage ratio ended Q2 2017 below 2.75x Debt/EBITDA

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Q3 2017 OUTLOOK*

 Benefitting from continuing tailwinds:  Strength in underlying solid waste volumes  Increased E&P waste activity and higher recycled commodity prices  Active M&A dialogue  Revenue: $1.185 billion  Solid waste core price + volume growth of 3.0% - 3.5%, reflecting first full

quarter contribution from Progressive Waste operations

 Adjusted EBITDA: 32.6% of revenue, or about $386.0 million  Up ~100 bps YoY, despite ~50 bps dilutive impact of Groot acquisition  Reflects 2 months negative margin impact from Chiquita Canyon permit change  Underlying margin improvement of ~175 bps net of Groot and Chiquita impacts

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* As of July 26, 2017

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2017 OUTLOOK *

 Increased outlook in July on 1H ‘17 results exceeding expectations and

continuing tailwinds

 Revenue: $4.570 billion, up $120 million from original guidance due to:  Higher than expected solid waste volumes  Increased E&P activity  Higher recycled commodity prices  Adjusted EBITDA: $1.450 billion, or 31.7% of revenue, up $40 million  Adjusted free cash flow: $750 million, or 16.4% of revenue, up $25 million  Adjusted free cash flow per share => up ~20% YoY  Conversion of adjusted EBITDA to adjusted free cash flow => ~52%  Above average acquisition activity =>  Could utilize existing/projected excess cash flow over the next few quarters  Positioned for another double digit percentage dividend increase in October

_______________ * As of July 25, 2017

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NON-GAAP RECONCILIATION SCHEDULES

Adjusted EBITDA* 2013 2014 2015 2016 2017e Net income (loss) attributable to Waste Connections 195,655 232,525 (95,764) 246,540 390,000 Plus: Net income attributable to noncontrolling interests 350 802 1,070 781 1,000 Plus/less: Income tax provision (benefit) 124,916 152,335 (31,592) 114,044 141,000 Plus: Interest Expense 73,579 64,674 64,236 92,709 125,000 Plus: Depreciation and Amortization 243,864 257,944 269,434 463,912 624,000 Plus: Closure and post-closure accretion 2,967 3,627 3,978 8,936 12,000 Plus: Impairments and other operating items 4,129 4,091 494,492 27,678 140,501 Less/plus: Other expense (income), net (1,056) (1,067) 518 (655) (3,326) Plus/Less: Foreign curency transaction loss (gain) (1,121) 1,638 Adjustments: Plus: Transaction-related expenses 1,946 2,147 4,235 47,842 2,459 Plus: Pre-existing Progressive Waste share-based grants 14,289 10,578 Plus: Integration-related and other expenses 44,336 5,422 Plus: Synergy bonus 11,798 Plus: Corporate relocation expenses 750 Plus: Loss of prior office leases 9,902 Adjusted EBITDA* 657,002 717,078 710,607 1,071,089 1,450,272 Revenues 1,928,795 2,079,166 2,117,287 3,375,863 4,570,000 Adjusted EBITDA* as % of Revenues 34.1% 34.5% 33.6% 31.7% 31.7% NON-GAAP RECONCILIATION SCHEDULE (in thousands, except share and per share amounts)

_____________________________________________________________________ *Adjusted EBITDA, a non-GAAP financial measure, is provided supplementally because it

is widely used by investors as a performance and valuation measure in the solid waste

• industry. Other companies may calculate differently.

2017e based on July 2017 guidance.

Adjusted Free Cash Flow* 2013 2014 2015 2016 2017e Net cash provided by operating activities 484,061 545,077 576,999 795,312 1,185,500 Plus/Less: Change in book overdraft (110) (11) (89) (1,305) Plus: Proceeds from disposal of assets 11,019 9,421 2,883 4,604 20,617 Plus: Excess tax benefit associated with equity- based compensation 3,765 7,518 2,069 5,196 Less: Capital Expenditures (209,874) (241,277) (238,833) (344,723) (460,000) Less: Distributions to noncontrolling interests (198) (371) (42) (3) Adjustments: Payment of contingent consideration recorded in earnings 5,059 1,074 493 Cash received for divestitures (17,400) Transaction-related expenses 45,228 2,459 Integration-related and other expenses 82,526 5,110 Pre-existing Progressive Waste share-based grants 11,915 Payment for termination of corporate lease 9,690 Synergy Bonus 11,798 Corporate office relocation 2,159 Tax effect (3,992) (36,384) (9,648) Adjusted Free Cash Flow* 301,579 321,431 342,987 550,944 750,351 Revenues 1,928,795 2,079,166 2,117,287 3,375,863 4,570,000 Adjusted EBITDA* 657,002 717,078 710,607 1,071,089 1,450,272 Adjusted Free Cash Flow* as a % of Revenues 15.6% 15.5% 16.2% 16.3% 16.4% Adjusted Free Cash Flow* as a % of Adjusted EBITDA* 45.9% 44.8% 48.3% 51.4% 51.7% Diluted shares outstanding 186,247,578 187,181,132 185,807,454 231,081,497 264,000,000 Adjusted Free Cash Flow* Per Share 1.62 $ 1.72 $ 1.85 $ 2.38 $ 2.84 $ NON-GAAP RECONCILIATION SCHEDULE (in thousands, except share and per share amounts)

_______________________________________________________________________________________________________

*Adjusted free cash flow, free cash flow as a % of revenue, free cash flow per share and adjusted EBITDA, non

• GAAP financial measures, are provided supplementally because they are widely used by investors as valuation and

liquidity measures. Other companies may calculate these metrics differently. 2017e based on July 2017 guidance.

PRINCIPAL EXECUTIVE OFFICE 3 Waterway Square Place, Suite 110 The Woodlands, TX 77380 (832) 442-2200 http://wasteconnections.investorroom.com INVESTOR RELATIONS Worthing Jackman, EVP CFO Mary Anne Whitney, VP Finance Phone: (832) 442-2266 Phone: (832) 442-2253 worthingj@wasteconnections.com maryannew@wasteconnections.com