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

Investor Presentation January 2018

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 obligation 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. 2

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 14 th consecutive year of positive shareholder returns  Increasing return of capital to shareholders  Annual double digit percentage dividend increases plus opportunistic share repurchases 3

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 4

TARGETING ATTRACTIVE MARKETS Integrated Operations Non-Integrated Operations #1 EBITDA margin #3 EBITDA margin Exclusive Markets: #1 EBIT margin #2(tie) EBIT margin #1 FCF margin #2 FCF margin #1 ROA #2 ROA #2 EBITDA margin #4 EBITDA margin Competitive Markets: #2(tie) EBIT margin #4 EBIT margin #3 FCF margin #4 FCF margin Attractive if #3 ROA #4 ROA High Mkt Share & Disposal Neutral Note: Rankings reflect relative attractiveness to WCN 5

CURRENT FOOTPRINT: 85% US & 15% CANADA 6

WCN: FINANCIAL HIGHLIGHTS Adjusted EBITDA and EBITDA - FCF Revenue Conversion* $1,500 $5,000 52.0% $1,250 $4,000 $ Millions $1,000 48.0% $ Millions $3,000 $750 $2,000 44.0% $500 $1,000 $250 40.0% $0 2013 2014 2015 2016 2017e 2013 2014 2015 2016 2017e EBITDA FCF as % of EBITDA Adjusted FCF/Share* Adjusted Free Cash Flow* FCF/share $3.00 15.1% CAGR $800 $2.50 $600 $ Millions $2.00 $400 $1.50 $1.00 $200 2013 2014 2015 2016 2017e 2013 2014 2015 2016 2017e FCF FCF as % of Revenue ________________________________________________________________ 2017e based on October 2017 outlook * A Non-GAAP measure; see appendix for reconciliation tables. 7

WCN: 10-YEAR OUTPERFORMANCE 448% 271% 181% 166% 184% 108% 126% 57% As of 12/29/17. 8

FINANCIAL DISCUSSION 9

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 10

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 11

Q4 and 2017 OUTLOOK (as of Oct. 26 th ) 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 _________________ * As of October 26, 2017 12

PRELIM. THOUGHTS FOR 2018 (as of Oct. 26 th ) 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 _________________ * As of October 26, 2017 13

NON-GAAP RECONCILIATION SCHEDULES 14