Waste Connections (WCN) 6-K Progressive Waste Solutions LTD. 6-K

Exhibit 99.1

   

PROGRESSIVE WASTE SOLUTIONS LTD. REPORTS RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014

Strong pricing of 2.0% drives organic revenue growth; Focused on operational excellence and disciplined capital allocation; Quarterly cash dividend increase of 6.7%

Toronto, Ontario – July 25, 2014 – Progressive Waste Solutions Ltd. (the “Company”) (NYSE, TSX: BIN) reported financial results for the three and six months ended June 30, 2014.

Second quarter highlights

- Consolidated revenues of $513.5 million in the second quarter, a decline of 0.6% from the comparative period.  Excluding a negative impact of $13.0 million in foreign currency translation, consolidated revenues increased 1.9%

- Consolidated organic growth improvement of 2.0%, driven by higher collection and disposal pricing

- Consolidated volume decline of 0.2%

- Adjusted EBITDA(A) of $131.9 million and adjusted operating income or adjusted operating EBIT(A) of $79.8 million

- Reported and adjusted net income per share(A) of $0.36 and $0.41, respectively. Reported and adjusted net income includes a net gain on sale of capital and landfill assets of $20 million

- Free cash flow(B) of $56.4 million.  Excluding internal infrastructure investments, free cash flow(B) of $60.9 million, representing 11.9% of revenue

- Returned $10.9 million to shareholders through stock repurchases

- Board of Directors declares increase of 6.7% to quarterly cash dividend effective September 30, 2014

Management Commentary

(All amounts are in United States (“U.S.”) dollars, unless otherwise stated)

“We performed well on many measures in the second quarter and we are making progress on several components of the strategic plan we initiated to improve EBITDA(A) margins and free cash flow through operational excellence,” said Joseph Quarin, President and Chief Executive Officer, Progressive Waste Solutions Ltd. “In the quarter, consolidated revenues increased 1.9%, excluding the impact of foreign currency translation, with consolidated organic revenue growth of 2.0% led by higher pricing in our collection and disposal service lines. Consolidated volumes declined 0.2% from the second quarter a year ago, but represent the third sequential quarter of volume improvement and are on track to turn positive in the second half of the year. Adjusted EBITDA(A) increased 0.6%, excluding the impact of foreign currency translation, driven by revenue gains and lower SG&A costs, but offset by higher operating expenses as a percentage of revenue in the period.”

“Operating expenses in the quarter reflect higher fuel costs as well as higher repairs and maintenance costs, related to the implementation of our strategic plan. Our guiding principle is to make the best long-term cash decisions for the business and these are short-term operating cost variances as we standardize best practices throughout our fleet and ensure the optimal allocation of capital in our field operations. In the second quarter we advanced several programs, such as fleet automation and conversion to compressed natural gas with the receipt of new trucks, that will reduce operating expenses in the third and fourth quarters and meaningfully expand EBITDA(A) margins in the second half of 2014 and beyond. With our strategic plan taking hold, we are also well-positioned to reduce our replacement capital expenditures next year.”

Mr. Quarin added, “We remain committed to creating long-term shareholder value through a combination of operational excellence and disciplined capital allocation. We returned $10.9 million to shareholders in the second quarter through our share repurchase program and we are pleased to announce an increase of 6.7% to our quarterly cash dividend, raising it to $0.64 Canadian per share annually.”

Three months ended June 30, 2014

Reported revenues decreased ($3.3)million or (0.6)% from $516.8 million in the second quarter of 2013 to $513.5million in the second quarter of 2014.  Expressed on a reportable basis and assuming a foreign currency exchange (“FX”) rate of parity between the Canadian and U.S. dollar (“FX parity”), revenues increased 1.9% due in large part to a 2.0% increase attributable to higher overall core pricing partially offset by slightly lower volumes.

1

Operating income was $78.1 million in the second quarter of 2014 versus $64.6 million in the second quarter of 2013.    Net income was $40.9 million versus $32.3 million in the second quarters of 2014 and 2013, respectively.

Adjusted amounts

Adjusted EBITDA(A) was $131.9 million in the second quarter of 2014 versus $134.9 million posted in the same quarter a year ago.  Adjusted operating EBIT(A) was $79.8 million or 19.0% higher in the quarter compared to $67.0 million in the same period last year.  Adjusted net income(A) was $47.2 million, or $0.41 per diluted share, compared to $35.3 million, or $0.31 per diluted share in the comparative period.

Six months ended June 30, 2014

For the six months ended June 30, 2014, reported revenues decreased ($20.1)million or (2.0)% from $1,003.4 million in 2013 to $983.3million.  Expressed on a reportable basis and at FX parity, revenues increased 0.9% on a comparative basis.  The increase is due in large part to a 2.0% increase attributable to higher overall core pricing and recycled commodity pricing partially offset by a decline in volumes.

For the six months ended June 30, operating income was $119.4 million in 2014 versus $123.8 million in 2013.  Net income was $66.8 million versus $61.6 million for the six months ended June 30, 2014 and 2013, respectively.

Adjusted amounts

For the six months ended June 30, adjusted EBITDA(A) was $244.7 million or (7.3)% lower in 2014 versus $263.9 million in 2013.  Adjusted operating EBIT(A) was $122.4 million compared to the $125.4 million recorded last year.  Adjusted net income(A) was $72.0 million, or $0.63 per diluted share, compared to $62.4 million, or $0.54 per diluted share in the same period last year.

2

Progressive Waste Solutions Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Income or Loss

(“Statement of Operations and Comprehensive Income or Loss”)

For the periods ended June 30, 2014 and 2013 (unaudited - stated in accordance with accounting principles generally accepted in the U.S. and in thousands of U.S. dollars, except share and net income or loss per share amounts)

	Three months ended						Six months ended
	2014			2013			2014			2013
REVENUES	$	513,501		$	516,807		$	983,271		$	1,003,367
EXPENSES
OPERATING		321,224			318,779			614,422			615,667
SELLING, GENERAL AND ADMINISTRATION		62,025			65,538			127,090			125,354
AMORTIZATION		72,069			73,642			139,276			144,941
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(19,959	)		(5,788	)		(16,926	)		(6,405	)
OPERATING INCOME		78,142			64,636			119,409			123,810
INTEREST ON LONG-TERM DEBT		15,836			15,214			30,779			30,457
NET FOREIGN EXCHANGE GAIN		(237	)		(2,968	)		(184	)		(2,969	)
NET LOSS (GAIN) ON FINANCIAL INSTRUMENTS		7,149			1,205			10,484			(1,060	)
RE-MEASUREMENT OF PREVIOUSLY HELD EQUITY INVESTMENT		-			-			(5,156	)		-
INCOME BEFORE INCOME TAX EXPENSE   AND NET LOSS
FROM EQUITY ACCOUNTED INVESTEE		55,394			51,185			83,486			97,382
INCOME TAX EXPENSE
Current		10,012			7,858			15,590			17,657
Deferred		4,530			11,028			1,043			18,052
		14,542			18,886			16,633			35,709
NET LOSS FROM EQUITY ACCOUNTED INVESTEE		-			6			82			39
NET INCOME		40,852			32,293			66,771			61,634
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment		17,154			(18,525	)		(1,583	)		(29,821	)
Derivatives designated as cash flow hedges, net of income tax $nil and $nil (2013 - $242 and $530)		-			(451	)		-			(986	)
Settlement of derivatives designated as cash flow hedges, net of income tax $nil and ($225) (2013 - ($78) and ($227))		-			146			418			422
		-			(305	)		418			(564	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		17,154			(18,830	)		(1,165	)		(30,385	)
COMPREHENSIVE INCOME	$	58,006		$	13,463		$	65,606		$	31,249
Net income per weighted average share, basic and diluted	$	0.36		$	0.28		$	0.58		$	0.54
Weighted average number of shares outstanding (thousands), basic and diluted		115,030			115,167			115,103			115,167

3

Progressive Waste Solutions Ltd.

Condensed Consolidated Balance Sheets (“Balance Sheet”)

June 30, 2014 (unaudited) and December 31, 2013 (stated in accordance with accounting principles generally accepted in the United States of America (“U.S.”) and in thousands of U.S. dollars except for issued and outstanding share amounts)

	June 30,			December 31,
	2014			2013
ASSETS
CURRENT
Cash and cash equivalents	$	31,942		$	31,980
Accounts receivable		235,887			229,548
Other receivables		42			68
Prepaid expenses		41,197			34,886
Income taxes recoverable		10,614			2,531
Restricted cash		520			498
Other assets		1,930			2,149
		322,132			301,660
OTHER RECEIVABLES		5,641			-
FUNDED LANDFILL POST-CLOSURE COSTS		11,340			10,690
INTANGIBLES		197,416			220,078
GOODWILL		916,111			905,347
LANDFILL DEVELOPMENT ASSETS		15,007			20,247
DEFERRED FINANCING COSTS		17,257			19,037
CAPITAL ASSETS		949,742			937,252
LANDFILL ASSETS		947,514			952,731
INVESTMENTS		969			5,659
OTHER ASSETS		15,890			19,869
	$	3,399,019		$	3,392,570
LIABILITIES
CURRENT
Accounts payable	$	102,483		$	100,270
Accrued charges		142,678			136,991
Dividends payable		16,122			16,243
Income taxes payable		2,503			2,048
Deferred revenues		18,228			17,180
Current portion of long-term debt		5,395			5,969
Landfill closure and post-closure costs		9,309			10,332
Other liabilities		17,916			12,925
		314,634			301,958
LONG-TERM DEBT		1,505,208			1,542,289
LANDFILL CLOSURE AND POST-CLOSURE COSTS		119,677			114,122
OTHER LIABILITIES		17,345			14,743
DEFERRED INCOME TAXES		131,798			129,887
		2,088,662			2,102,999
SHAREHOLDERS' EQUITY
Common shares (authorized - unlimited, issued and outstanding - 114,287,459 (December 31, 2013 - 114,852,852))		1,767,370			1,773,734
Restricted shares (issued and outstanding - 456,585 (December 31, 2013 - 322,352))		(10,157	)		(6,654	)
Additional paid in capital		3,680			2,796
Accumulated deficit		(367,480	)		(398,414	)
Accumulated other comprehensive loss		(83,056	)		(81,891	)
Total shareholders' equity		1,310,357			1,289,571
	$	3,399,019		$	3,392,570

4

Progressive Waste Solutions Ltd.

Condensed Consolidated Statements of Cash Flows (“Statement of Cash Flows”)

For the periods ended June 30, 2014 and 2013 (unaudited - stated in accordance with accounting principles generally accepted in the U.S. and in thousands of U.S. dollars)

	Three months ended						Six months ended
	2014			2013			2014			2013
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	40,852		$	32,293		$	66,771		$	61,634
Items not affecting cash
Restricted share expense		778			447			1,494			937
Accretion of landfill closure and post-closure costs		1,538			1,406			3,077			2,815
Amortization of intangibles		13,899			15,018			27,797			30,378
Amortization of capital assets		37,723			38,371			74,878			76,447
Amortization of landfill assets		20,447			20,253			36,601			38,116
Interest on long-term debt (amortization of deferred   financing costs)		866			849			1,720			1,705
Net gain on sale of capital and landfill assets		(19,959	)		(5,788	)		(16,926	)		(6,405	)
Net loss (gain) on financial instruments		7,149			1,205			10,484			(1,060	)
Re-measurement gain on previously held equity investment		-			-			(5,156	)		-
Deferred income taxes		4,530			11,028			1,043			18,052
Net loss from equity accounted investee		-			6			82			39
Landfill closure and post-closure expenditures		(1,302	)		(1,434	)		(2,113	)		(2,229	)
Changes in non-cash working capital items		5,595			(8,145	)		(12,764	)		(20,144	)
Cash generated from operating activities		112,116			105,509			186,988			200,285
INVESTING
Acquisitions		(1,453	)		(1,544	)		(9,751	)		(1,639	)
Investment in cost accounted for investee		-			(1,018	)		-			(1,018	)
Restricted cash deposits		(21	)		(20	)		(22	)		(21	)
Investment in other receivables		(67	)		-			(67	)		(134	)
Proceeds from other receivables		18			139			37			278
Funded landfill post-closure costs		(238	)		(64	)		(582	)		(166	)
Purchase of capital assets		(57,999	)		(47,303	)		(92,429	)		(98,683	)
Purchase of landfill assets		(15,343	)		(15,787	)		(24,751	)		(25,793	)
Proceeds from the sale of capital and landfill assets		23,162			13,263			23,523			14,384
Investment in landfill development assets		(276	)		(363	)		(462	)		(2,139	)
Cash utilized in investing activities		(52,217	)		(52,697	)		(104,504	)		(114,931	)
FINANCING
Payment of deferred financing costs		-			(776	)		(48	)		(824	)
Proceeds from long-term debt		28,119			538,277			101,930			558,101
Repayment of long-term debt		(72,961	)		(566,398	)		(137,809	)		(598,440	)
Proceeds from the exercise of stock options		35			-			67			3
Repurchase of common shares and related costs		(10,929	)		-			(10,929	)		-
Purchase of restricted shares		(558	)		(1,356	)		(4,013	)		(4,362	)
Dividends paid to shareholders		(15,842	)		(15,754	)		(31,498	)		(31,735	)
Cash utilized in financing activities		(72,136	)		(46,007	)		(82,300	)		(77,257	)
Effect of foreign currency translation on cash and cash equivalents		1,897			(1,990	)		(222	)		(3,054	)
NET CASH (OUTFLOW) INFLOW		(10,340	)		4,815			(38	)		5,043
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OR YEAR		42,282			30,168			31,980			29,940
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	31,942		$	34,983		$	31,942		$	34,983
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	31,939		$	29,270		$	31,939		$	29,270
Cash equivalents		3			5,713			3			5,713
	$	31,942		$	34,983		$	31,942		$	34,983
Cash paid during the period for:
Income taxes	$	10,879		$	12,165		$	23,201		$	23,857
Interest	$	15,785		$	14,485		$	30,154		$	29,763

5

FX Impact on Consolidated Results

The following tables have been prepared to assist readers in assessing the FX impact on selected results for the three and six months ended June 30, 2014.

							Three months ended
	June 30, 2013			June 30, 2014			June 30, 2014			June 30, 2014			June 30, 2014
	(as reported)			(organic, acquisition and other non-operating changes)			(holding FX constant with the comparative period)			(FX impact)			(as reported)
Condensed Consolidated Statement of Operations
Revenues	$	516,807		$	9,645		$	526,452		$	(12,951	)	$	513,501
Operating expenses		318,779			9,933			328,712			(7,488	)		321,224
Selling, general and administration		65,538			(1,841	)		63,697			(1,672	)		62,025
Amortization		73,642			166			73,808			(1,739	)		72,069
Net gain on sale of capital and landfill assets		(5,788	)		(15,207	)		(20,995	)		1,036			(19,959	)
Operating income		64,636			16,594			81,230			(3,088	)		78,142
Interest on long-term debt		15,214			1,654			16,868			(1,032	)		15,836
Net foreign exchange gain		(2,968	)		2,708			(260	)		23			(237	)
Net loss on financial instruments		1,205			6,566			7,771			(622	)		7,149
Income before net income tax expense and net loss from equity accounted investee		51,185			5,666			56,851			(1,457	)		55,394
Net income tax expense		18,886			(3,897	)		14,989			(447	)		14,542
Net loss from equity accounted investee		6			(7	)		(1	)		1			-
Net income	$	32,293		$	9,570		$	41,863		$	(1,011	)	$	40,852
Adjusted EBITDA(A)	$	134,896		$	802		$	135,698		$	(3,815	)	$	131,883
Adjusted EBITA(A)	$	76,272		$	(239	)	$	76,033		$	(2,320	)	$	73,713
Adjusted operating income or adjusted operating EBIT(A)	$	67,042		$	15,844		$	82,886		$	(3,113	)	$	79,773
Adjusted net income(A)	$	35,290		$	13,418		$	48,708		$	(1,471	)	$	47,237
Free cash flow(B)	$	61,484		$	(3,921	)	$	57,563		$	(1,152	)	$	56,411

6

											Six months ended
	June 30, 2013				June 30, 2014			June 30, 2014			June 30, 2014			June 30, 2014
		(as reported)			(organic, acquisition and other non-operating changes)			(holding FX constant with the comparative period)			(FX impact)			(as reported)
Condensed Consolidated Statement of Operations
Revenues		$	1,003,367		$	8,542		$	1,011,909		$	(28,638	)	$	983,271
Operating expenses			615,667			15,065			630,732			(16,310	)		614,422
Selling, general and administration			125,354			6,150			131,504			(4,414	)		127,090
Amortization			144,941			(1,795	)		143,146			(3,870	)		139,276
Net gain on sale of capital and landfill assets			(6,405	)		(11,593	)		(17,998	)		1,072			(16,926	)
Operating income			123,810			715			124,525			(5,116	)		119,409
Interest on long-term debt			30,457			2,696			33,153			(2,374	)		30,779
Net foreign exchange gain			(2,969	)		2,762			(207	)		23			(184	)
Net (gain) loss on financial instruments			(1,060	)		12,392			11,332			(848	)		10,484
Re-measurement gain on previously held equity investment			-			(5,639	)		(5,639	)		483			(5,156	)
Income before net income tax expense and net loss from equity accounted investee			97,382			(11,496	)		85,886			(2,400	)		83,486
Net income tax expense			35,709			(18,532	)		17,177			(544	)		16,633
Net loss from equity accounted investee			39			50			89			(7	)		82
Net income		$	61,634		$	6,986		$	68,620		$	(1,849	)	$	66,771
Adjusted EBITDA(A)		$	263,947		$	(11,051	)	$	252,896		$	(8,151	)	$	244,745
Adjusted EBITA(A)		$	149,384		$	(11,252	)	$	138,132		$	(4,866	)	$	133,266
Adjusted operating income or adjusted operating EBIT(A)		$	125,411		$	2,337		$	127,748		$	(5,353	)	$	122,395
Adjusted net income(A)		$	62,387		$	11,802		$	74,189		$	(2,200	)	$	71,989
Free cash flow(B)		$	106,340		$	245		$	106,585		$	(1,480	)	$	105,105

7

Other Financial Highlights

(all amounts are in thousands of U.S. dollars, excluding per share amounts)

	Three months ended						Six months ended
				June 30						June 30
	2014			2013			2014			2013
Operating income	$	78,142		$	64,636		$	119,409		$	123,810
Transaction and related costs (recoveries) - SG&A		141			390			(942	)		(175	)
Fair value movements in stock options - SG&A(*)		(314	)		1,755			1,740			1,250
Restricted share expense - SG&A(*)		441			261			825			526
Non-operating or non-recurring expenses - SG&A		1,363			-			1,363			-
Adjusted operating income or adjusted operating EBIT(A)		79,773			67,042			122,395			125,411
Net gain on sale of capital and landfill assets		(19,959	)		(5,788	)		(16,926	)		(6,405	)
Amortization		72,069			73,642			139,276			144,941
Adjusted EBITDA(A)		131,883			134,896			244,745			263,947
Amortization of capital and landfill assets		(58,170	)		(58,624	)		(111,479	)		(114,563	)
Adjusted EBITA(A)	$	73,713		$	76,272		$	133,266		$	149,384
Net income	$	40,852		$	32,293		$	66,771		$	61,634
Transaction and related costs (recoveries) - SG&A		141			390			(942	)		(175	)
Fair value movements in stock options - SG&A(*)		(314	)		1,755			1,740			1,250
Restricted share expense - SG&A(*)		441			261			825			526
Non-operating or non-recurring expenses - SG&A		1,363			-			1,363			-
Net loss (gain) on financial instruments		7,149			1,205			10,484			(1,060	)
Re-measurement gain on previously held equity investment		-			-			(5,156	)		-
Net income tax (recovery) expense		(2,395	)		(614	)		(3,096	)		212
Adjusted net income(A)	$	47,237		$	35,290		$	71,989		$	62,387
Note:
(*)Amounts exclude long-term incentive plan ("LTIP") compensation.

Adjusted net income (A)  per weighted average share, basic	$	0.41	$	0.31	$	0.63	$	0.54
Adjusted net income (A) per weighted average share, diluted	$	0.41	$	0.31	$	0.63	$	0.54
Replacement and growth expenditures
Replacement expenditures	$	47,618	$	39,331	$	74,543	$	60,649
Growth expenditures		25,724		23,759		42,637		63,827
Total replacement and growth expenditures	$	73,342	$	63,090	$	117,180	$	124,476
Free cash flow(B)
Cash generated from operating activities (statement of cash flows)	$	112,116	$	105,509	$	186,988	$	200,285
Free cash flow(B)	$	56,411	$	61,484	$	105,105	$	106,340
Free cash flow (B) per weighted average share, diluted	$	0.49	$	0.53	$	0.91	$	0.92
Dividends
Dividends paid (common shares)	$	15,842	$	15,754	$	31,498	$	31,735

8

Segment Highlights – Additional details regarding the FX impact on our comparative results can be found in the Foreign Currency sections of this report.

(all amounts are in thousands of U.S. dollars, unless otherwise stated)

							Three months ended
													June 30
	2013			2014			Change			2014			Change
	(as reported)			(holding FX constant with the comparative period)						(as reported)
Revenues	$	516,807		$	526,452		$	9,645		$	513,501		$	(3,306	)
Canada	$	198,855		$	205,395		$	6,540		$	192,444		$	(6,411	)
U.S. south	$	220,988		$	229,254		$	8,266		$	229,254		$	8,266
U.S. northeast	$	96,964		$	91,803		$	(5,161	)	$	91,803		$	(5,161	)
Operating expenses	$	318,779		$	328,712		$	9,933		$	321,224		$	2,445
Canada	$	110,597		$	118,298		$	7,701		$	110,810		$	213
U.S. south	$	139,320		$	145,440		$	6,120		$	145,440		$	6,120
U.S. northeast	$	68,862		$	64,974		$	(3,888	)	$	64,974		$	(3,888	)
SG&A (as reported)	$	65,538		$	63,697		$	(1,841	)	$	62,025		$	(3,513	)
Canada	$	18,050		$	17,586		$	(464	)	$	16,531		$	(1,519	)
U.S. south	$	22,144		$	22,313		$	169		$	22,313		$	169
U.S. northeast	$	8,409		$	7,962		$	(447	)	$	7,962		$	(447	)
Corporate	$	16,935		$	15,836		$	(1,099	)	$	15,219		$	(1,716	)
EBITDA(A) (as reported)	$	132,490		$	134,043		$	1,553		$	130,252		$	(2,238	)
Canada	$	70,208		$	69,511		$	(697	)	$	65,103		$	(5,105	)
U.S. south	$	59,524		$	61,501		$	1,977		$	61,501		$	1,977
U.S. northeast	$	19,693		$	18,867		$	(826	)	$	18,867		$	(826	)
Corporate	$	(16,935	)	$	(15,836	)	$	1,099		$	(15,219	)	$	1,716
Adjusted SG&A	$	63,132		$	62,042		$	(1,090	)	$	60,394		$	(2,738	)
Canada	$	18,050		$	17,586		$	(464	)	$	16,531		$	(1,519	)
U.S. south	$	22,144		$	22,313		$	169		$	22,313		$	169
U.S. northeast	$	8,409		$	7,962		$	(447	)	$	7,962		$	(447	)
Corporate	$	14,529		$	14,181		$	(348	)	$	13,588		$	(941	)
Adjusted EBITDA(A)	$	134,896		$	135,698		$	802		$	131,883		$	(3,013	)
Canada	$	70,208		$	69,511		$	(697	)	$	65,103		$	(5,105	)
U.S. south	$	59,524		$	61,501		$	1,977		$	61,501		$	1,977
U.S. northeast	$	19,693		$	18,867		$	(826	)	$	18,867		$	(826	)
Corporate	$	(14,529	)	$	(14,181	)	$	348		$	(13,588	)	$	941

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							Six months ended
													June 30
	2013			2014			Change			2014			Change
	(as reported)			(holding FX constant with the comparative period)						(as reported)
Revenues	$	1,003,367		$	1,011,909		$	8,542		$	983,271		$	(20,096	)
Canada	$	377,949		$	388,443		$	10,494		$	359,805		$	(18,144	)
U.S. south	$	432,555		$	451,108		$	18,553		$	451,108		$	18,553
U.S. northeast	$	192,863		$	172,358		$	(20,505	)	$	172,358		$	(20,505	)
Operating expenses	$	615,667		$	630,732		$	15,065		$	614,422		$	(1,245	)
Canada	$	207,159		$	221,236		$	14,077		$	204,926		$	(2,233	)
U.S. south	$	270,345		$	286,159		$	15,814		$	286,159		$	15,814
U.S. northeast	$	138,163		$	123,337		$	(14,826	)	$	123,337		$	(14,826	)
SG&A (as reported)	$	125,354		$	131,504		$	6,150		$	127,090		$	1,736
Canada	$	35,807		$	36,377		$	570		$	33,695		$	(2,112	)
U.S. south	$	43,519		$	43,864		$	345		$	43,864		$	345
U.S. northeast	$	17,127		$	17,258		$	131		$	17,258		$	131
Corporate	$	28,901		$	34,005		$	5,104		$	32,273		$	3,372
EBITDA(A) (as reported)	$	262,346		$	249,673		$	(12,673	)	$	241,759		$	(20,587	)
Canada	$	134,983		$	130,830		$	(4,153	)	$	121,184		$	(13,799	)
U.S. south	$	118,691		$	121,085		$	2,394		$	121,085		$	2,394
U.S. northeast	$	37,573		$	31,763		$	(5,810	)	$	31,763		$	(5,810	)
Corporate	$	(28,901	)	$	(34,005	)	$	(5,104	)	$	(32,273	)	$	(3,372	)
Adjusted SG&A	$	123,753		$	128,281		$	4,528		$	124,104		$	351
Canada	$	35,807		$	36,377		$	570		$	33,695		$	(2,112	)
U.S. south	$	43,519		$	43,864		$	345		$	43,864		$	345
U.S. northeast	$	17,127		$	17,258		$	131		$	17,258		$	131
Corporate	$	27,300		$	30,782		$	3,482		$	29,287		$	1,987
Adjusted EBITDA(A)	$	263,947		$	252,896		$	(11,051	)	$	244,745		$	(19,202	)
Canada	$	134,983		$	130,830		$	(4,153	)	$	121,184		$	(13,799	)
U.S. south	$	118,691		$	121,085		$	2,394		$	121,085		$	2,394
U.S. northeast	$	37,573		$	31,763		$	(5,810	)	$	31,763		$	(5,810	)
Corporate	$	(27,300	)	$	(30,782	)	$	(3,482	)	$	(29,287	)	$	(1,987	)

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Revenues

Gross revenue by service type

The table below present’s gross revenue by service type prepared on a consolidated basis and includes the impact of FX.

		Three months ended									Six months ended
					June 30						June 30
		2014	%		2013	%		2014	%		2013
Commercial	$	176,755	34.4	$	176,483	34.1	$	349,817	35.6	$	352,205	35.1
Industrial		93,923	18.3		95,424	18.5		176,520	18.0		180,580	18.0
Residential		115,157	22.4		118,774	23.0		225,076	22.9		231,794	23.1
Transfer and disposal		185,064	36.0		185,213	35.8		333,755	33.9		345,461	34.4
Recycling		16,654	3.2		14,416	2.8		33,093	3.4		29,395	2.9
Other		9,536	1.9		11,491	2.2		19,164	1.9		21,597	2.2
Gross revenues		597,089	116.2		601,801	116.4		1,137,425	115.7		1,161,032	115.7
Intercompany		(83,588)	(16.2)		(84,994)	(16.4)		(154,154)	(15.7)		(157,665)	(15.7)
Revenues	$	513,501	100.0	$	516,807	100.0	$	983,271	100.0	$	1,003,367	100.0

Revenue growth or decline components – expressed in percentages and excluding FX

The table below has been prepared assuming Canadian and U.S. dollar parity except for percentages presented that include FX.

	Three months ended						Six months ended
				June 30						June 30
	2014			2013			2014			2013
Price
Price		2.0			0.7			2.0			0.9
Fuel surcharges		-			-			(0.1	)		0.1
Recycling and other		0.2			(0.5	)		0.3			(0.5	)
Total price growth		2.2			0.2			2.2			0.5
Volume		(0.2	)		1.3			(1.1	)		1.1
Total organic growth		2.0			1.5			1.1			1.6
Net acquisitions		(0.1	)		7.7			(0.2	)		8.6
Total growth excluding FX		1.9			9.2			0.9			10.2
FX		(2.5	)		(0.5	)		(2.9	)		(0.4	)
Total (decline) growth including FX		(0.6	)		8.7			(2.0	)		9.8

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Free cash flow(B)

Purpose and objective

The purpose of presenting this non-GAAP measure is to provide investors and analysts with an additional measure of our value and liquidity.  We use this non-GAAP measure to assess our relative performance to our peers and to assess the availability of funds for growth investment, share repurchases, debt repayment or dividend increases.

Free cash flow(B) - cash flow approach

	Three months ended									Six months ended
							June 30									June 30
	2014			2013			Change			2014			2013			Change
Cash generated from operating activities	$	112,116		$	105,509		$	6,607		$	186,988		$	200,285		$	(13,297	)
Operating and investing
Stock option (recovery) expense(*)		(314	)		1,755			(2,069	)		1,740			1,250			490
LTIP portion of restricted share expense(*)(*)		(337	)		(186	)		(151	)		(669	)		(411	)		(258	)
Acquisition and related
costs (recoveries)		141			390			(249	)		(942	)		(175	)		(767	)
Non-operating or non-recurring expenses		1,363			-			1,363			1,363			-			1,363
Changes in non-cash working capital items		(5,595	)		8,145			(13,740	)		12,764			20,144			(7,380	)
Capital and landfill asset purchases(*)(*)(*)		(73,342	)		(63,090	)		(10,252	)		(117,180	)		(124,476	)		7,296
Proceeds from the sale of capital and landfill assets		23,162			13,263			9,899			23,523			14,384			9,139
Financing
Purchase of restricted shares(*)		(546	)		(1,334	)		788			(2,298	)		(1,692	)		(606	)
Net realized foreign
exchange gain		(237	)		(2,968	)		2,731			(184	)		(2,969	)		2,785
Free cash flow(B)	$	56,411		$	61,484		$	(5,073	)	$	105,105		$	106,340		$	(1,235	)
Note:
(*)Amounts exclude LTIP compensation.
(*)(*)Long-term incentive plan ("LTIP").
(*)(*)(*)Capital and landfill asset purchases include infrastructure expenditures of approximately $4,500 and $13,700 for the three months ended and $10,500 and $28,100 for the six months ended June 30, 2014 and 2013, respectively.

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Free cash flow(B) – adjusted EBITDA(A)  approach

We typically calculate free cash flow(B) using an operations approach which reflects how we manage the business and free cash flow(B).

	Three months ended									Six months ended
							June 30									June 30
	2014			2013			Change			2014			2013			Change
Adjusted EBITDA(A)	$	131,883		$	134,896		$	(3,013	)	$	244,745		$	263,947		$	(19,202	)
Purchase of restricted shares(*)		(546	)		(1,334	)		788			(2,298	)		(1,692	)		(606	)
Capital and landfill asset purchases(*)(*)		(73,342	)		(63,090	)		(10,252	)		(117,180	)		(124,476	)		7,296
Proceeds from the sale of capital and landfill assets		23,162			13,263			9,899			23,523			14,384			9,139
Landfill closure and post-closure expenditures		(1,302	)		(1,434	)		132			(2,113	)		(2,229	)		116
Landfill closure and post-closure cost accretion expense		1,538			1,406			132			3,077			2,815			262
Interest on long-term debt		(15,836	)		(15,214	)		(622	)		(30,779	)		(30,457	)		(322	)
Non-cash interest expense		866			849			17			1,720			1,705			15
Current income tax expense		(10,012	)		(7,858	)		(2,154	)		(15,590	)		(17,657	)		2,067
Free cash flow(B)	$	56,411		$	61,484		$	(5,073	)	$	105,105		$	106,340		$	(1,235	)
Note:
(*)Amounts exclude LTIP compensation.
(*)(*)Capital and landfill asset purchases include infrastructure expenditures of approximately $4,500 and $13,700 for the three months ended and $10,500 and $28,100 for the six months ended June 30, 2014 and 2013, respectively.

Funded debt to EBITDA (as defined and calculated in accordance with our consolidated facility)

The ratio of funded debt to EBITDA is 2.95 times.

Foreign Currency

(in thousands of U.S. dollars unless otherwise stated)

We have elected to report our financial results in U.S. dollars.  However, we earn a significant portion of our revenues and income in Canada.  Based on our 2014 guidance outlook, if the U.S. dollar strengthens by one cent our reported revenues will decline by approximately $8,200.  EBITDA(A) is similarly impacted by approximately $2,500, assuming a strengthening U.S. dollar.  The impact on net income and free cash flow(B) for a similar change in FX rate, results in an approximately $1,100 and $900decline, respectively.  Should the U.S. dollar weaken by one cent, our reported revenues, EBITDA(A), net income and free cash flow(B) will improve by amounts similar to those outlined above as a result of a strengthening U.S. dollar.

	2014						2013
	Consolidated Balance Sheet		Consolidated Statement of Operations and  Comprehensive Income or Loss				Consolidated Balance Sheet		Consolidated Statement of Operations and  Comprehensive Income or Loss
	Current		Average		Cumulative Average		Current		Average		Cumulative Average
December 31							$	0.9402			$	0.9707
March 31	$	0.9047	$	0.9062	$	0.9062	$	0.9846	$	0.9912	$	0.9912
June 30	$	0.9367	$	0.9170	$	0.9116	$	0.9513	$	0.9772	$	0.9841

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Quarterly dividend declared

The Company’s Board of Directors declared a quarterly dividend of $0.16 Canadian per share to shareholders of record on September 30, 2014.  The dividend will be paid on October 15, 2014.  The Company has designated these dividends as eligible dividends for the purposes of the Income Tax Act (Canada).

Definitions

(A)All references to “Adjusted EBITDA” in this document are to revenues less operating expense and SG&A, excluding certain SG&A expenses, on the consolidated statement of operations and comprehensive income or loss.  Adjusted EBITDA excludes some or all of the following: certain SG&A expenses, restructuring expenses, goodwill impairment, amortization, net gain or loss on sale of capital and landfill assets, interest on long-term debt, net foreign exchange gain or loss, net gain or loss on financial instruments, loss on extinguishment of debt, re-measurement gain on previously held equity investment, other expenses, income taxes and income or loss from equity accounted investee.  Adjusted EBITDA is a term used by us that does not have a standardized meaning prescribed by U.S. GAAP and is therefore unlikely to be comparable to similar measures used by other companies.  Adjusted EBITDA is a measure of our operating profitability, and by definition, excludes certain items as detailed above.  These items are viewed by us as either non-cash (in the case of goodwill impairment, amortization, net gain or loss on financial instruments, net foreign exchange gain or loss, re-measurement gain on previously held equity investment, deferred income taxes and net income or loss from equity accounted investee) or non-operating (in the case of certain SG&A expenses, restructuring expenses, net gain or loss on sale of capital and landfill assets, interest on long-term debt, loss on extinguishment of debt, other expenses, and current income taxes).  Adjusted EBITDA is a useful financial and operating metric for us, our Board of Directors, and our lenders, as it represents a starting point in the determination of free cash flow(B).  The underlying reasons for the exclusion of each item are as follows:

Certain SG&A expenses – SG&A expense includes certain non-operating or non-recurring expenses.  Non-operating expenses include transaction costs or recoveries related to acquisitions, fair value adjustments attributable to stock options and restricted share expense.  Non-recurring expenses include certain equity based compensation, payments made to certain senior management on their departure and other non-recurring expenses from time-to-time.   These expenses are not considered an expense indicative of continuing operations.  Certain SG&A costs represent a different class of expense than those included in adjusted EBITDA.

Restructuring expenses – restructuring expenses includes costs to integrate certain operating locations with our own, exiting certain property and building and office leases, employee severance and employee relocation costs all of which were incurred in connection with our acquisition of WSI.  These expenses are not considered an expense indicative of continuing operations.  Accordingly, restructuring expenses represent a different class of expense than those included in adjusted EBITDA.

Goodwill impairment – as a non-cash item goodwill impairment has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Amortization – as a non-cash item amortization has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Net gain or loss on sale of capital and landfill assets – proceeds from the sale of capital assets are either reinvested in additional or replacement capital assets or used to repay revolving credit facility borrowings.

Interest on long-term debt – interest on long-term debt reflects our debt/equity mix, interest rates and borrowing position from time to time.  Accordingly, interest on long-term debt reflects our treasury/financing activities and represents a different class of expense than those included in adjusted EBITDA.

Net foreign exchange gain or loss – as non-cash items, foreign exchange gains or losses have no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Net gain or loss on financial instruments – as non-cash items, gains or losses on financial instruments have no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Loss on extinguishment of debt – loss on extinguishment of debt is a function of our debt financing.  Accordingly, it reflects our treasury/financing activities and represents a different class of expense than those included in adjusted EBITDA.

Re-measurement gain on previously held equity investment – as a non-cash item, a re-measurement gain on previously held equity investment has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

Other expenses – other expenses typically represent amounts paid to certain management of acquired companies who are retained by us post acquisition and amounts paid to certain executives in respect of acquisitions successfully completed.  These expenses are not considered an expense indicative of continuing operations.  Accordingly, other expenses represent a different class of expense than those included in adjusted EBITDA.

Income taxes – income taxes are a function of tax laws and rates and are affected by matters which are separate from our daily operations.

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Net income or loss from equity accounted investee – as a non-cash item, net income or loss from our equity accounted investee has no impact on the determination of free cash flow(B) and is not indicative of our operating profitability.

All references to “Adjusted EBITA” in this document represent Adjusted EBITDA after deducting amortization of capital and landfill assets.  All references to “Adjusted operating income or adjusted operating EBIT” in this document represent Adjusted EBITDA after adjusting for net gain or loss on the sale of capital and landfill assets and all amortization expense, including amortization expense recognized on the impairment of intangible assets.  All references to “Adjusted net income” are to adjusted operating income after adjusting, as applicable, net gain or loss on financial instruments, re-measurement gain on previously held equity investment, loss on extinguishment of debt, other expenses and net income tax expense or recovery.

Adjusted EBITA, Adjusted operating income or adjusted operating EBIT and Adjusted net income should not be construed as measures of income or of cash flows.  Collectively, these terms do not have standardized meanings prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures used by other companies.  Each of these measures are important for investors and are used by management in the management of its business.  Adjusted operating income or adjusted operating EBIT removes the impact of a company’s capital structure and its tax rates when comparing the results of companies within or across industry sectors.  Management uses Adjusted operating EBIT as a measure of how its operations are performing and to focus attention on amortization and depreciation expense to drive higher returns on invested capital.  In addition, Adjusted operating EBIT is used by management as a means to measure the performance of its operating locations and is a significant metric in the determination of compensation for certain employees.  Adjusted EBITA accomplishes a similar comparative result as Adjusted operating EBIT, but further removes amortization attributable to intangible assets.  Intangible assets are measured at fair value when we complete an acquisition and amortized over their estimated useful lives.  We view capital and landfill asset amortization as a proxy for the amount of capital reinvestment required to continue operating our business steady state.  We believe that the replacement of intangible assets is not required to continue our operations as the costs associated with continuing operations are already captured in operating or selling, general and administration expenses.  Accordingly, we view Adjusted EBITA as a measure that eliminates the impact of a company’s acquisitive nature and permits a higher degree of comparability across companies within our industry or across different sectors from an operating performance perspective.  Finally, Adjusted net income is a measure of our overall earnings and profits and is further used to calculate our net income per share.  Adjusted net income reflects what we believe is our “operating” net income which excludes certain non-operating income or expenses.  Adjusted net income is an important measure of a company’s ability to generate profit and earnings for its shareholders which is used to compare company performance both amongst and between industry sectors.

 (B)We have adopted a measure called “free cash flow” to supplement net income or loss as a measure of our operating performance.  Free cash flow is a term which does not have a standardized meaning prescribed by U.S. GAAP, is prepared before dividends declared and shares repurchased, and may not be comparable to similar measures prepared by other companies.  The purpose of presenting this non-GAAP measure is to provide disclosure similar to the disclosure provided by other U.S. publicly listed companies in our industry and to provide investors and analysts with an additional measure of our value and liquidity.  We use this non-GAAP measure to assess our performance relative to other U.S. publicly listed companies and to assess the availability of funds for growth investment, debt repayment, share repurchases or dividend increases.  All references to “free cash flow” in this document have the meaning set out in this note.

Guidance Outlook

Included in our press release for the fourth quarter and year ended December 31, 2013, issued February 13, 2014, was our guidance for the fiscal year ending December 31, 2014, including our 2014 outlook assumptions and factors.  This press release is available at www.sec.gov and www.sedar.com.  As of July 25, 2014, the Company expects to generate revenue at the high end of its outlook range for 2014 and adjusted EBITDA(A) at the low end of the range.  Revenue in the first half of 2014 has been stronger than anticipated, with higher pricing realized in our Canadian and U.S. northeast segments, and strong organic volume improvements in our U.S. south segment.  A new residential contract win in our U.S. south segment that commences in the third quarter of 2014 will also contribute to higher revenues than we had originally anticipated.  Harsh winter weather and higher operating costs incurred in the first half of 2014, both of which are discussed in our first and second quarter Management Discussions and Analysis for 2014, resulted in lower than expected adjusted EBITDA(A) in the first half of this year which we don’t expect to recover in the back half of 2014.  The Company believes that it will deliver on all other outlook measures within the guidance ranges provided in February 2014.

Caution regarding forward looking statements

The Company’s 2014 outlook is subject to the same risks and uncertainties outlined in the Risk and Uncertainties section of the Company’s Management Discussion and Analysis, as applicable and investors are urged to fully review these sections before making an investment decision.  This press release contains forward-looking statements and forward-looking information.  Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events.  These statements can generally be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goals,” “intend,” “intent,” “belief,” “may,” “plan,” “foresee,” “likely,” “potential,” “project,” “seek,” “strategy,” “synergies,” “targets,” “will,” “should,” “would,” or variations of such words and other similar words.  Forward-looking statements include, but are not limited to, statements relating to future financial and operating results and our plans, objectives, prospects, expectations and intentions.  These statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors.  Numerous important factors could cause our actual results, performance or achievements to differ materially from those expressed in or implied by these forward-looking statements, including, without limitation, those factors outlined in the Risks and Uncertainties section of the Company’s Management Discussion and Analysis.  We caution that the list of factors is illustrative and by no means exhaustive.  In addition, we cannot assure you that any of our expectations, estimates or projections will be achieved.

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All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.  All forward-looking statements in this press release are qualified by these cautionary statements.  The forward-looking statements in this press release are made as of the date of this press release and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

About Progressive Waste Solutions Ltd.

As one of North America’s largest full-service waste management companies, we provide non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in 13 U.S. states and the District of Columbia and six Canadian provinces.  We serve our customers with vertically integrated collection and disposal assets.  Progressive Waste Solutions Ltd.’s shares are listed on the New York and Toronto Stock Exchanges under the symbol BIN. 

To find out more about Progressive Waste Solutions Ltd., visit our website at www.progressivewaste.com.

Further Information

Progressive Waste Solutions Ltd.

Chaya Cooperberg

VP, Investor Relations and Corporate Communications

Tel:  (905) 532-7517

Email: chaya.cooperberg@progressivewaste.com

Management will hold a conference call on Friday, July 25, 2014, at 8:00 a.m. (ET) to discuss results for the three and six months ended June 30, 2014. Participants may listen to the call by dialing 1-888-300-0053, conference ID 65479417, at approximately 7:50 a.m. (ET). International or local callers should dial 647-427-3420. The call will also be webcast live at www.streetevents.com and at www.progressivewaste.com. A supplemental slide presentation will be available at www.progressivewaste.com.

A replay will be available after the call until Friday, August 8, 2014, at midnight, and can be accessed by dialing 1-855-859-2056, conference ID 65479417. International or local callers can access the replay by dialing 404-537-3406. The audio webcast will also be archived at www.streetevents.com and www.progressivewaste.com.

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