Investor Presentation January 2018 SAFE HARBORS STATEMENT This - - PowerPoint PPT Presentation

Investor Presentation January 2018

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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  ~$22 billion enterprise value; ~$12 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  Well positioned for additional strategic growth opportunities  Very active current M&A environment  Proven management team creating substantial stockholder value  ~2x the average shareholder return of WM and RSG, over 3.5x the return of

the S&P 500 and 7.5x the return of the TSX60 over the past decade

 2017 was our 14th consecutive year of positive shareholder returns  Increasing return of capital to shareholders  Annual double digit percentage dividend increases plus opportunistic share

repurchases

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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: FINANCIAL HIGHLIGHTS

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

Adjusted Free Cash Flow*

FCF FCF as % of Revenue 40.0% 44.0% 48.0% 52.0% $250 $500 $750 $1,000 $1,250 $1,500 2013 2014 2015 2016 2017e $ Millions

Adjusted EBITDA and EBITDA - FCF Conversion*

EBITDA FCF as % of EBITDA $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

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

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WCN: 10-YEAR OUTPERFORMANCE

As of 12/29/17.

166% 181% 108%

271% 184% 126% 57% 448%

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FINANCIAL DISCUSSION

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NINE MONTHS YTD 2017 HIGHLIGHTS

 Revenue: $3.473 billion  Solid waste strength: 4.5% price + volume growth

 3.0% Price  1.5% Volume => disposal volumes above expectations

 E&P waste revenues up 58% year over year => high margin flow thru



Same store recycled commodity sales up 40%

 OCC prices up over 60% YoY

 Adjusted EBITDA: $1.100 billion, or 31.7% of revenues  Adjusted free cash flow: $614.0 million, or 17.7% of revenue and 55.8% of

adjusted EBITDA

 Ended Q3 with ~$500 million cash and leverage ratio ~2.6x Debt/EBITDA

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NINE MONTHS YTD 2017 HIGHLIGHTS (cont’d)

 Acquired over $225 million revenue  Groot Industries: $200 million collection/transfer revenue in January  Largest private hauler in North Central Illinois => platform for additional

M&A and increased internalization

 $15 million franchise collection market in Alaska in September 2017  Divestiture program nearing completion => benefits above expectations  Completed multi-market swap with RSG in September  Expect overall program to reduce revenue by $100 - $110 million and

increase EBITDA by ~$15 million

 Completed three-for-two stock split in June 2017  Authorized annual share repurchase of up to 5% of outstanding shares  Increased quarterly cash dividend by 16.7% in October  Our seventh consecutive double-digit increase since commencing in 2010

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Q4 and 2017 OUTLOOK (as of Oct. 26th)

Q4 2017 Outlook*:

 Revenue: $1.125 billion, up 7.3% YoY  Solid waste core price + volume growth of 3.0% - 3.5%  Adjusted EBITDA: $350 million, or about 31.1% of revenue and up 10bps YoY  Reflects up to 140 bps estimated YoY drag from lower recycled commodity

values, lower margin acquisitions completed during the year, and increased taxes and operating restrictions associated with new Chiquita Canyon landfill permit Full Year 2017 Outlook*:

 On track to meet or exceed upwardly revised outlook of $4.57 billion in revenue,

$1.45 billion in adjusted EBITDA and $750 million in adjusted free cash flow Current Observations:

 Continued strength in underlying volume trends  Recycled commodity prices recovered from lows to about flat YoY  E&P strength persisted through year-end  M&A activity/dialogue remains very active

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* As of October 26, 2017

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• PRELIM. THOUGHTS FOR 2018 (as of Oct. 26th)

Preliminary Thoughts for 2018*:

 Adjusted EBITDA margin: Increase of at least 50 bps, excluding additional

acquisitions, even if lower recycled fiber values persist

 Additional margin upside from any recovery in recycled fiber values or further

increase in E&P waste activity Current Observations:

 Pricing remains above 3% on higher CPIs  Continued underlying volume strength of ~1.0% - 1.5%  May get boost from tax reform-driven increases  Reported volumes will continue to reflect purposeful shedding at former

Progressive Waste operations

 Expect continued above average levels of M&A activity  Tax reform => may mitigate certain structuring concerns/valuation gaps  E&P – higher crude prices and capex budgets => higher activity levels  Recycled commodities - uncertainty re China’s enforcement of contamination

standards and impact on demand for certain fiber grades

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* As of October 26, 2017

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NON-GAAP RECONCILIATION SCHEDULES

Adjusted EBITDA* 2013 2014 2015 2016 YTD 2017 Net income (loss) attributable to Waste Connections 195,655 232,525 (95,764) 246,540 261,732 Plus: Net income attributable to noncontrolling interests 350 802 1,070 781 559 Plus/less: Income tax provision (benefit) 124,916 152,335 (31,592) 114,044 100,220 Plus: Interest Expense 73,579 64,674 64,236 92,709 92,763 Less: Interest income (3,131) Plus: Depreciation and Amortization 243,864 257,944 269,434 463,912 471,894 Plus: Closure and post-closure accretion 2,967 3,627 3,978 8,936 8,805 Plus: Impairments and other operating items 4,129 4,091 494,492 27,678 141,333 Less/plus: Other expense (income), net (1,056) (1,067) 518 (655) (3,561) Plus/Less: Foreign curency transaction loss (gain) (1,121) 3,502 Adjustments: Plus: Transaction-related expenses 1,946 2,147 4,235 47,842 4,418 Plus: Pre-existing Progressive Waste share-based grants 14,289 12,947 Plus: Integration-related and other expenses 44,336 8,344 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 1,099,825 Revenues 1,928,795 2,079,166 2,117,287 3,375,863 3,473,313 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.

Adjusted Free Cash Flow* 2013 2014 2015 2016 YTD 2017 Net cash provided by operating activities 484,061 545,077 576,999 795,312 888,375 Plus/Less: Change in book overdraft (110) (11) (89) (1,305) 13,814 Plus: Proceeds from disposal of assets 11,019 9,421 2,883 4,604 25,826 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) (317,385) 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 (21,100) Transaction-related expenses 45,228 4,418 Integration-related and other expenses 82,526 7,968 Pre-existing Progressive Waste share-based grants 11,740 Payment for termination of corporate lease 9,690 Synergy Bonus 11,798 Corporate office relocation 2,159 Tax effect (3,992) (36,384) (11,426) Adjusted Free Cash Flow* 301,579 321,431 342,987 550,944 614,028 Revenues 1,928,795 2,079,166 2,117,287 3,375,863 3,473,313 Adjusted EBITDA* 657,002 717,078 710,607 1,071,089 1,099,825 Adjusted Free Cash Flow* as a % of Revenues 15.6% 15.5% 16.2% 16.3% 17.7% Adjusted Free Cash Flow* as a % of Adjusted EBITDA* 45.9% 44.8% 48.3% 51.4% 55.8% Diluted shares outstanding 186,247,578 187,181,132 185,807,454 231,081,497 264,109,383 Adjusted Free Cash Flow* Per Share 1.62 $ 1.72 $ 1.85 $ 2.38 $ 2.32 $ NON-GAAP RECONCILIATION SCHEDULE (in thousands, except share and per share amounts)

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*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.

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