Mr. Patrick Dovigi reports

GFL ENVIRONMENTAL INC. ACCELERATES BALANCE SHEET DE-LEVERAGING WITH SUBSTANTIAL COMPLETION OF PREVIOUSLY IDENTIFIED DIVESTITURES

GFL Environmental Inc. has divested its Colorado and New Mexico solid waste operations and its Nashville, Tenn., solid waste operations in two separate transactions. The third and last of the divestitures, the sale of its solid waste operations in Pennsylvania, Maryland and Delaware, has received clearance from the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and is scheduled to close on June 30, 2023. The three divested non-core distinct U.S. solid waste regions were acquired as part of several recent larger acquisitions.

"I am very pleased to announce the completion of the sale of these three U.S. solid waste regions, one fiscal quarter ahead of plan," said Patrick Dovigi, founder and chief executive officer of GFL. "The transactions will result in gross proceeds of over $1.6-billion which are expected to be on balance sheet as at June 30, 2023. The net proceeds from the transactions will allow us to exit the second quarter with net leverage between 4.3 times and 4.4 times and reduce net leverage to below 3.99 times by year-end, positioning us well for future upgrades to our credit ratings as well as sustainable industry leading free cash flow per share growth over the medium term."

Mr. Dovigi continued: "These divestitures complete our portfolio rationalization plan. We believe our network of assets and market selection position us for high-quality, organic profitability growth and we remain focused on our M&A [merger and acquisition] strategy of densifying our existing footprint across Canada and the United States through our robust acquisition pipeline."

As previously disclosed, the divested assets represented approximately $450-million of revenue, $120-million of adjusted earnings before interest, taxes, depreciation and amortization, and $30-million of capital expenditures on an annualized basis. On a full-year pro forma basis, the transactions will be free cash flow accretive.

The timing of the closing of each of the transactions is as follows:

• The sale of the Nashville, Tenn., operations closed on May 1, 2023.
• The sale of the Colorado and New Mexico operations closed on June 1, 2023.
• The sale of the Pennsylvania, Maryland and Delaware operations is scheduled to close on June 30, 2023.

Based on the timing of the sales of each of the regions, the in-period impact to the company's previously provided framework for the second quarter is estimated as displayed in the attached table.

  
($ millions)                     Q2 2023

Revenue                             $(25)
                                        
Adjusted EBITDA                       (7)
Less                                    
Cash interest                         (2)
Capital expenditures                  (2)
Adjusted free cash flow              $(3)


  

The amounts in the table represent changes to the company's previously provided framework for the second quarter solely as a result of the divestitures. The company anticipates updating its full-year fiscal 2023 guidance to reflect the impact of the divestitures, outperformance of the company in the first quarter, M&A completed to date and the company's expectations for the balance of the year when it reports its second quarter results.

About GFL Environmental Inc.

GFL, headquartered in Vaughan, Ont., is the fourth-largest diversified environmental services company in North America, providing a comprehensive line of solid waste management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than half of the U.S. states. Across its organization, GFL has a work force of more than 20,000 employees.

We seek Safe Harbor.