UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~September~~June 30, ~~2020~~2021
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 1-34370

WASTE CONNECTIONS, INC.

(Exact name of registrant as specified in its charter)

Ontario, Canada

(State or other jurisdiction of incorporation or organization)

98-1202763

(I.R.S. Employer Identification No.)

~~610 Applewood Crescent, 2~~^nd ~~Floor~~6220 Hwy 7, Suite 600

~~Vaughan~~Woodbridge

Ontario ~~L4K 0E3~~L4H 4G3

Canada

(Address of principal executive offices)

(905) 532-7510

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, no par value	WCN	New York Stock Exchange (“NYSE”) Toronto Stock Exchange (“TSX”)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


þ Large Accelerated Filer	◻ Accelerated Filer	◻ Non-accelerated Filer	☐ Smaller Reporting Company	☐ Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common shares:

As of ~~October 16, 2020: 262,897,746~~July 23, 2021: 260,517,909 common shares

Table of Contents

WASTE CONNECTIONS, INC.

FORM 10-Q

TABLE OF CONTENTS

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands of U.S. dollars, except share and per share amounts)


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020
ASSETS
Current assets:
Cash and equivalents	$	859,096	$	326,738	$	727,395	$	617,294
Accounts receivable, net of allowance for credit losses of $20,657 and $16,432 at September 30, 2020 and December 31, 2019, respectively		616,630		662,808
Accounts receivable, net of allowance for credit losses of $19,527 and $19,380 at June 30, 2021 and December 31, 2020, respectively						649,561		630,264
Prepaid expenses and other current assets		115,690		141,052		129,487		160,714
Total current assets		1,591,416		1,130,598		1,506,443		1,408,272

Restricted cash		96,519		96,483		110,367		97,095
Restricted investments		47,161		51,179		59,825		57,516
Property and equipment, net		5,193,378		5,516,347		5,249,904		5,284,506
Operating lease right-of-use assets		168,974		183,220		169,523		170,923
Goodwill		5,534,567		5,510,851		5,818,749		5,726,650
Intangible assets, net		1,127,279		1,163,063		1,102,516		1,155,079
Other assets, net		90,153		85,954		88,880		92,323
Total assets	$	13,849,447	$	13,737,695	$	14,106,207	$	13,992,364
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	403,946	$	436,970	$	326,085	$	290,820
Book overdraft		15,092		15,954		16,902		17,079
Deferred revenue						250,254		233,596
Accrued liabilities		400,293		280,808		411,333		404,923
Current portion of operating lease liabilities		30,196		29,929		37,352		30,671
Current portion of contingent consideration		62,492		26,659		43,359		43,297
Deferred revenue		216,675		216,443
Current portion of long-term debt and notes payable		6,772		465		6,997		8,268
Total current liabilities		1,135,466		1,007,228		1,092,282		1,028,654

Long-term portion of debt and notes payable		4,680,219		4,353,782		4,762,857		4,708,678
Long-term portion of operating lease liabilities		145,642		160,033		139,329		147,223
Long-term portion of contingent consideration		26,030		42,825		24,670		28,439
Deferred income taxes		725,343		818,622		772,867		760,044
Other long-term liabilities		470,558		416,851		445,602		455,888
Total liabilities		7,183,258		6,799,341		7,237,607		7,128,926

Commitments and contingencies (Note 19)
Commitments and contingencies (Note 18)

Equity:
Common shares: 262,897,009 shares issued and 262,822,825 shares outstanding at September 30, 2020; 263,699,675 shares issued and 263,618,161 shares outstanding at December 31, 2019		4,030,368		4,135,343
Common shares: 260,506,316 shares issued and 260,433,450 shares outstanding at June 30, 2021; 262,899,174 shares issued and 262,824,990 shares outstanding at December 31, 2020						3,724,859		4,030,368
Additional paid-in capital		162,606		154,917		172,232		170,555
Accumulated other comprehensive loss		(113,338)		(10,963)
Treasury shares: 74,184 and 81,514 shares at September 30, 2020 and December 31, 2019, respectively		—		—
Accumulated other comprehensive income (loss)						78,265		(651)
Treasury shares: 72,866 and 74,184 shares at June 30, 2021 and December 31, 2020, respectively						—		—
Retained earnings		2,582,298		2,654,207		2,889,027		2,659,001
Total Waste Connections’ equity		6,661,934		6,933,504		6,864,383		6,859,273
Noncontrolling interest in subsidiaries		4,255		4,850		4,217		4,165
Total equity		6,666,189		6,938,354		6,868,600		6,863,438
	$	13,849,447	$	13,737,695	$	14,106,207	$	13,992,364

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)

(Unaudited)

(In thousands of U.S. dollars, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Revenues	$	1,389,552	$	1,412,444	$	4,047,739	$	4,026,719	$	1,533,931	$	1,305,782	$	2,929,874	$	2,658,187
Operating expenses:
Cost of operations		828,822		835,098		2,429,957		2,384,607		901,191		785,710		1,727,111		1,601,134
Selling, general and administrative		136,003		137,883		404,213		410,132		157,943		132,158		299,365		268,210
Depreciation		157,590		157,994		459,641		461,616		169,221		151,230		326,624		302,051
Amortization of intangibles		32,653		31,934		96,062		93,821		32,707		31,771		64,899		63,409
Impairments and other operating items		3,805		12,935		442,582		32,949		6,081		437,270		6,715		438,777
Operating income		230,679		236,600		215,284		643,594
Operating income (loss)										266,788		(232,357)		505,160		(15,394)

Interest expense		(40,636)		(36,780)		(119,562)		(111,313)		(41,328)		(40,936)		(83,753)		(78,926)
Interest income		903		2,056		4,396		7,186		744		1,317		1,848		3,493
Other income (expense), net		702		(19)		(3,046)		4,562		(1,235)		5,772		2,312		(3,749)
Income before income tax provision		191,648		201,857		97,072		544,029
Income (loss) before income tax provision										224,969		(266,204)		425,567		(94,576)

Income tax provision		(33,657)		(42,783)		(23,654)		(110,539)
Net income		157,991		159,074		73,418		433,490
Plus: Net loss attributable to noncontrolling interests		58		35		594		89
Net income attributable to Waste Connections	$	158,049	$	159,109	$	74,012	$	433,579
Income tax (provision) benefit										(47,868)		38,737		(88,159)		10,003
Net income (loss)										177,101		(227,467)		337,408		(84,573)
Plus (less): Net loss (income) attributable to noncontrolling interests										(54)		395		(52)		536
Net income (loss) attributable to Waste Connections									$	177,047	$	(227,072)	$	337,356	$	(84,037)

Earnings per common share attributable to Waste Connections’ common shareholders:
Earnings (loss) per common share attributable to Waste Connections’ common shareholders:
Basic	$	0.60	$	0.60	$	0.28	$	1.64	$	0.68	$	(0.86)	$	1.29	$	(0.32)
Diluted	$	0.60	$	0.60	$	0.28	$	1.64	$	0.68	$	(0.86)	$	1.29	$	(0.32)

Shares used in the per share calculations:
Basic		262,998,317		263,853,681		263,253,087		263,768,258		260,951,405		262,994,275		261,791,088		263,390,685
Diluted		263,507,486		264,587,456		263,718,001		264,473,345		261,418,573		262,994,275		262,269,600		263,390,685

Cash dividends per common share	$	0.185	$	0.160	$	0.555	$	0.480	$	0.205	$	0.185	$	0.410	$	0.370

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands of U.S. dollars)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Net income	$	157,991	$	159,074	$	73,418	$	433,490
Net income (loss)									$	177,101	$	(227,467)	$	337,408	$	(84,573)

Other comprehensive income (loss), before tax:
Interest rate swap amounts reclassified into interest expense		2,893		(1,974)		4,595		(6,918)		5,061		2,142		9,857		1,702
Changes in fair value of interest rate swaps		1,846		(15,482)		(68,047)		(56,818)		(6,257)		(11,867)		14,482		(69,893)
Foreign currency translation adjustment		45,886		(24,911)		(55,738)		60,404		32,973		83,093		61,027		(101,624)
Other comprehensive income (loss), before tax		50,625		(42,367)		(119,190)		(3,332)		31,777		73,368		85,366		(169,815)
Income tax (expense) benefit related to items of other comprehensive income (loss)		(1,256)		4,626		16,815		16,890		317		2,577		(6,450)		18,071
Other comprehensive income (loss), net of tax		49,369		(37,741)		(102,375)		13,558		32,094		75,945		78,916		(151,744)
Comprehensive income (loss)		207,360		121,333		(28,957)		447,048		209,195		(151,522)		416,324		(236,317)
Plus: Comprehensive loss attributable to noncontrolling interests		58		35		594		89
Plus (less): Comprehensive loss (income) attributable to noncontrolling interests										(54)		395		(52)		536
Comprehensive income (loss) attributable to Waste Connections	$	207,418	$	121,368	$	(28,363)	$	447,137	$	209,141	$	(151,127)	$	416,272	$	(235,781)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands of U.S. dollars, except share amounts)


	WASTE CONNECTIONS' EQUITY																WASTE CONNECTIONS' EQUITY
						ACCUMULATED																ACCUMULATED
				ADDITIONAL		OTHER														ADDITIONAL		OTHER
	COMMON SHARES			PAID-IN		COMPREHENSIVE		TREASURY SHARES			RETAINED		NONCONTROLLING				COMMON SHARES			PAID-IN		COMPREHENSIVE		TREASURY SHARES			RETAINED		NONCONTROLLING
	SHARES	AMOUNT		CAPITAL		LOSS		SHARES	AMOUNT		EARNINGS		INTERESTS		TOTAL		SHARES	AMOUNT		CAPITAL		LOSS		SHARES	AMOUNT		EARNINGS		INTERESTS		TOTAL
Balances at December 31, 2019	263,618,161	$	4,135,343	$	154,917	$	(10,963)	81,514	$	—	$	2,654,207	$	4,850	$	6,938,354
Balances at December 31, 2020																	262,824,990	$	4,030,368	$	170,555	$	(651)	74,184	$	—	$	2,659,001	$	4,165	$	6,863,438
Sale of common shares held in trust	7,330		679		—		—	(7,330)		—		—		—		679	1,318		131		—		—	(1,318)		—		—		—		131
Vesting of restricted share units	366,603		—		—		—	—		—		—		—		—	340,529		—		—		—	—		—		—		—		—
Vesting of performance-based restricted share units	281,186		—		—		—	—		—		—		—		—	154,251		—		—		—	—		—		—		—		—
Restricted share units released from deferred compensation plan	20,229		—		—		—	—		—		—		—		—	19,150		—		—		—	—		—		—		—		—
Tax withholdings related to net share settlements of equity-based compensation																	(186,039)		—		(18,490)		—	—		—		—		—		(18,490)
Equity-based compensation																	—		—		9,573		—	—		—		—		—		9,573
Exercise of warrants																	3,490		—		—		—	—		—		—		—		—
Repurchase of common shares																	(666,184)		(65,999)		—		—	—		—		—		—		(65,999)
Cash dividends on common shares																	—		—		—		—	—		—		(53,909)		—		(53,909)
Amounts reclassified into earnings, net of taxes																	—		—		—		3,525	—		—		—		—		3,525
Changes in fair value of cash flow hedges, net of taxes																	—		—		—		15,243	—		—		—		—		15,243
Foreign currency translation adjustment																	—		—		—		28,054	—		—		—		—		28,054
Net income (loss)																	—		—		—		—	—		—		160,309		(2)		160,307
Balances at March 31, 2021																	262,491,505		3,964,500		161,638		46,171	72,866		—		2,765,401		4,163		6,941,873
Vesting of restricted share units																	647		—		—		—	—		—		—		—		—
Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options	—		—		(533)		—	—		—		—		—		(533)	—		—		(1,177)		—	—		—		—		—		(1,177)
Tax withholdings related to net share settlements of equity-based compensation	(226,766)		—		(23,090)		—	—		—		—		—		(23,090)	(176)		—		(20)		—	—		—		—		—		(20)
Equity-based compensation	—		—		10,144		—	—		—		—		—		10,144	—		—		11,791		—	—		—		—		—		11,791
Exercise of warrants	9,751		—		—		—	—		—		—		—		—	21,280		—		—		—	—		—		—		—		—
Repurchase of common shares	(1,271,977)		(105,654)		—		—	—		—		—		—		(105,654)	(2,079,806)		(239,641)		—		—	—		—		—		—		(239,641)
Cash dividends on common shares	—		—		—		—	—		—		(48,018)		—		(48,018)	—		—		—		—	—		—		(53,421)		—		(53,421)
Amounts reclassified into earnings, net of taxes	—		—		—		(323)	—		—		—		—		(323)	—		—		—		3,720	—		—		—		—		3,720
Changes in fair value of cash flow hedges, net of taxes	—		—		—		(42,649)	—		—		—		—		(42,649)	—		—		—		(4,599)	—		—		—		—		(4,599)
Foreign currency translation adjustment	—		—		—		(184,717)	—		—		—		—		(184,717)	—		—		—		32,973	—		—		—		—		32,973
Net income (loss)	—		—		—		—	—		—		143,035		(142)		142,893
Balances at March 31, 2020	262,804,517		4,030,368		141,438		(238,652)	74,184		—		2,749,224		4,708		6,687,086
Vesting of restricted share units	5,537		—		—		—	—		—		—		—		—
Restricted share units released from deferred compensation plan	3,269		—		—		—	—		—		—		—		—
Tax withholdings related to net share settlements of equity-based compensation	(2,398)		—		(201)		—	—		—		—		—		(201)
Equity-based compensation	—		—		9,912		—	—		—		—		—		9,912
Exercise of warrants	240		—		—		—	—		—		—		—		—
Cash dividends on common shares	—		—		—		—	—		—		(48,894)		—		(48,894)
Amounts reclassified into earnings, net of taxes	—		—		—		1,574	—		—		—		—		1,574
Changes in fair value of cash flow hedges, net of taxes	—		—		—		(8,722)	—		—		—		—		(8,722)
Foreign currency translation adjustment	—		—		—		83,093	—		—		—		—		83,093
Net loss	—		—		—		—	—		—		(227,072)		(395)		(227,467)
Balances at June 30, 2020	262,811,165		4,030,368		151,149		(162,707)	74,184		—		2,473,258		4,313		6,496,381
Vesting of restricted share units	3,228		—		—		—	—		—		—		—		—
Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options	—		—		(145)		—	—		—		—		—		(145)
Tax withholdings related to net share settlements of equity-based compensation	(1,003)		—		(99)		—	—		—		—		—		(99)
Equity-based compensation	—		—		11,701		—	—		—		—		—		11,701
Exercise of warrants	9,435		—		—		—	—		—		—		—		—
Cash dividends on common shares	—		—		—		—	—		—		(49,009)		—		(49,009)
Amounts reclassified into earnings, net of taxes	—		—		—		2,126	—		—		—		—		2,126
Changes in fair value of cash flow hedges, net of taxes	—		—		—		1,357	—		—		—		—		1,357
Foreign currency translation adjustment	—		—		—		45,886	—		—		—		—		45,886
Net income (loss)	—		—		—		—	—		—		158,049		(58)		157,991
Balances at September 30, 2020	262,822,825	$	4,030,368	$	162,606	$	(113,338)	74,184	$	—	$	2,582,298	$	4,255	$	6,666,189
Net income																	—		—		—		—	—		—		177,047		54		177,101
Balances at June 30, 2021																	260,433,450	$	3,724,859	$	172,232	$	78,265	72,866	$	—	$	2,889,027	$	4,217	$	6,868,600

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands of U.S. dollars, except share amounts)


	WASTE CONNECTIONS' EQUITY																WASTE CONNECTIONS' EQUITY
						ACCUMULATED																ACCUMULATED
				ADDITIONAL		OTHER														ADDITIONAL		OTHER
	COMMON SHARES			PAID-IN		COMPREHENSIVE		TREASURY SHARES			RETAINED		NONCONTROLLING				COMMON SHARES			PAID-IN		COMPREHENSIVE		TREASURY SHARES			RETAINED		NONCONTROLLING
	SHARES	AMOUNT		CAPITAL		INCOME (LOSS)		SHARES	AMOUNT		EARNINGS		INTERESTS		TOTAL		SHARES	AMOUNT		CAPITAL		INCOME (LOSS)		SHARES	AMOUNT		EARNINGS		INTERESTS		TOTAL
Balances at December 31, 2018	263,141,413	$	4,131,307	$	133,577	$	(74,786)	129,889	$	—	$	2,264,510	$	5,580	$	6,460,188
Balances at December 31, 2019																	263,618,161	$	4,135,343	$	154,917	$	(10,963)	81,514	$	—	$	2,654,207	$	4,850	$	6,938,354
Sale of common shares held in trust	43,637		3,610		—		—	(43,637)		—		—		—		3,610	7,330		679		—		—	(7,330)		—		—		—		679
Vesting of restricted share units	400,555		—		—		—	—		—		—		—		—	366,603		—		—		—	—		—		—		—		—
Vesting of performance-based restricted share units	180,258		—		—		—	—		—		—		—		—	281,186		—		—		—	—		—		—		—		—
Restricted share units released from deferred compensation plan	15,371		—		—		—	—		—		—		—		—	20,229		—		—		—	—		—		—		—		—
Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options																	—		—		(533)		—	—		—		—		—		(533)
Tax withholdings related to net share settlements of equity-based compensation	(202,679)		—		(16,974)		—	—		—		—		—		(16,974)	(226,766)		—		(23,090)		—	—		—		—		—		(23,090)
Equity-based compensation	—		—		11,627		—	—		—		—		—		11,627	—		—		10,144		—	—		—		—		—		10,144
Exercise of warrants	8,690		—		—		—	—		—		—		—		—	9,751		—		—		—	—		—		—		—		—
Repurchase of common shares																	(1,271,977)		(105,654)		—		—	—		—		—		—		(105,654)
Cash dividends on common shares	—		—		—		—	—		—		(42,084)		—		(42,084)	—		—		—		—	—		—		(48,018)		—		(48,018)
Amounts reclassified into earnings, net of taxes	—		—		—		(1,817)	—		—		—		—		(1,817)	—		—		—		(323)	—		—		—		—		(323)
Changes in fair value of cash flow hedges, net of taxes	—		—		—		(11,555)	—		—		—		—		(11,555)	—		—		—		(42,649)	—		—		—		—		(42,649)
Foreign currency translation adjustment	—		—		—		42,180	—		—		—		—		42,180	—		—		—		(184,717)	—		—		—		—		(184,717)
Cumulative effect adjustment from adoption of new accounting pronouncement	—		—		—		—	—		—		(2,078)		—		(2,078)
Net income (loss)	—		—		—		—	—		—		125,622		(45)		125,577	—		—		—		—	—		—		143,035		(142)		142,893
Balances at March 31, 2019	263,587,245		4,134,917		128,230		(45,978)	86,252		—		2,345,970		5,535		6,568,674
Sale of common shares held in trust	973		85		—		—	(973)		—		—		—		85
Vesting of restricted share units	6,495		—		—		—	—		—		—		—		—
Tax withholdings related to net share settlements of equity-based compensation	(3,081)		—		(290)		—	—		—		—		—		(290)
Equity-based compensation	—		—		10,254		—	—		—		—		—		10,254
Exercise of warrants	9,607		—		—		—	—		—		—		—		—
Cash dividends on common shares	—		—		—		—	—		—		(42,131)		—		(42,131)
Amounts reclassified into earnings, net of taxes	—		—		—		(1,817)	—		—		—		—		(1,817)
Changes in fair value of cash flow hedges, net of taxes	—		—		—		(18,827)	—		—		—		—		(18,827)
Foreign currency translation adjustment	—		—		—		43,135	—		—		—		—		43,135
Distributions to noncontrolling interests	—		—		—		—	—		—		—		(117)		(117)
Net income (loss)	—		—		—		—	—		—		148,848		(9)		148,839
Balances at June 30, 2019	263,601,239		4,135,002		138,194		(23,487)	85,279		—		2,452,687		5,409		6,707,805
Sale of common shares held in trust	3,765		341		—		—	(3,765)		—		—		—		341
Balances at March 31, 2020																	262,804,517		4,030,368		141,438		(238,652)	74,184		—		2,749,224		4,708		6,687,086
Vesting of restricted share units	6,827		—		—		—	—		—		—		—		—	5,537		—		—		—	—		—		—		—		—
Restricted share units released from deferred compensation plan	1,004		—		—		—	—		—		—		—		—	3,269		—		—		—	—		—		—		—		—
Tax withholdings related to net share settlements of equity-based compensation	(3,501)		—		(328)		—	—		—		—		—		(328)	(2,398)		—		(201)		—	—		—		—		—		(201)
Equity-based compensation	—		—		9,322		—	—		—		—		—		9,322	—		—		9,912		—	—		—		—		—		9,912
Exercise of warrants	6,770		—		—		—	—		—		—		—		—	240		—		—		—	—		—		—		—		—
Cash dividends on common shares	—		—		—		—	—		—		(42,133)		—		(42,133)	—		—		—		—	—		—		(48,894)		—		(48,894)
Amounts reclassified into earnings, net of taxes	—		—		—		(1,451)	—		—		—		—		(1,451)	—		—		—		1,574	—		—		—		—		1,574
Changes in fair value of cash flow hedges, net of taxes	—		—		—		(11,379)	—		—		—		—		(11,379)	—		—		—		(8,722)	—		—		—		—		(8,722)
Foreign currency translation adjustment	—		—		—		(24,911)	—		—		—		—		(24,911)	—		—		—		83,093	—		—		—		—		83,093
Net income (loss)	—		—		—		—	—		—		159,109		(35)		159,074
Balances at September 30, 2019	263,616,104	$	4,135,343	$	147,188	$	(61,228)	81,514	$	—	$	2,569,663	$	5,374	$	6,796,340
Net loss																	—		—		—		—	—		—		(227,072)		(395)		(227,467)
Balances at June 30, 2020																	262,811,165	$	4,030,368	$	151,149	$	(162,707)	74,184	$	—	$	2,473,258	$	4,313	$	6,496,381

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands of U.S. dollars)


	Nine Months Ended September 30,				Six Months Ended June 30,
	2020		2019		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	73,418	$	433,490
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)					$	337,408	$	(84,573)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss on disposal of assets and impairments		423,832		31,852		6,229		420,169
Depreciation		459,641		461,616		326,624		302,051
Amortization of intangibles		96,062		93,821		64,899		63,409
Amortization of leases		14,281		17,661
Deferred income taxes, net of acquisitions		(77,613)		41,481		3,520		(66,821)
Amortization of debt issuance costs		6,146		3,708		2,689		4,783
Share-based compensation		38,316		35,510		28,724		24,643
Interest accretion		12,843		12,283		8,199		8,512
Payment of contingent consideration recorded in earnings						(520)		—
Adjustments to contingent consideration		16,852		1,466		89		16,794
Other		936		(1,316)		(1,118)		1,596
Net change in operating assets and liabilities, net of acquisitions		120,859		53,858		71,735		62,622
Net cash provided by operating activities		1,185,573		1,185,430		848,478		753,185

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired		(173,810)		(420,392)		(67,493)		(86,325)
Capital expenditures for property and equipment		(420,694)		(433,526)		(271,392)		(268,711)
Capital expenditures for undeveloped landfill property		(66,809)		(31,683)		—		(16,450)
Proceeds from disposal of assets		11,564		2,626		7,906		10,642
Other		(317)		(2,697)		(1,815)		888
Net cash used in investing activities		(650,066)		(885,672)		(332,794)		(359,956)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		1,790,625		1,021,795		311,000		1,790,625
Principal payments on notes payable and long-term debt		(1,505,641)		(1,184,165)		(267,050)		(1,484,118)
Payment of contingent consideration recorded at acquisition date		(2,812)		(1,621)		(5,595)		(2,251)
Change in book overdraft		(862)		1,911		(190)		(606)
Payments for repurchase of common shares		(105,654)		—		(305,640)		(105,654)
Payments for cash dividends		(145,921)		(126,348)		(107,330)		(96,912)
Tax withholdings related to net share settlements of equity-based compensation		(23,390)		(17,592)		(18,510)		(23,291)
Debt issuance costs		(11,117)		(5,938)		—		(10,957)
Proceeds from sale of common shares held in trust		679		4,036		131		679
Distributions to noncontrolling interests		—		(117)
Net cash used in financing activities		(4,093)		(308,039)
Net cash provided by (used in) financing activities						(393,184)		67,515

Effect of exchange rate changes on cash, cash equivalents and restricted cash		980		143		873		(541)

Net increase (decrease) in cash, cash equivalents and restricted cash		532,394		(8,138)
Net increase in cash, cash equivalents and restricted cash						123,373		460,203
Cash, cash equivalents and restricted cash at beginning of period		423,221		403,966		714,389		423,221
Cash, cash equivalents and restricted cash at end of period	$	955,615	$	395,828	$	837,762	$	883,424

Non-cash financing activities:
Liabilities assumed and notes payable issued to sellers of businesses acquired	$	67,791	$	94,009

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

1.BASIS OF PRESENTATION AND SUMMARY

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc. and its subsidiaries (the “Company”) for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. In the opinion of management, the accompanying balance sheets and related interim statements of net income (loss), comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items, necessary for their fair statement in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Examples include accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, contingent consideration accruals and asset impairments. An additional area that involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and assessments in accordance with the accounting guidance on contingencies. Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements.

The challenges posed by the outbreak of coronavirus disease 2019 (“COVID-19”) on the global economy persisted through the third quarter of 2020 and continue to impact the demand for the Company’s services to varying degrees and in varying ways across the U.S. and Canada and across a variety of lines of business, including commercial collection and solid waste and exploration and production (“E&P”) waste disposal. In response to COVID-19, national and local governments around the world have instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing. In some markets where a portion of these measures have been curtailed, the impact to demand for the Company’s services has decreased as activity levels have increased. The impact of the COVID-19 pandemic on the Company’s business, results of operations, financial condition and cash flows in future periods will depend largely on future developments, including the duration and spread of the outbreak in the U.S. and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and cannot be predicted at this time.

Interim results are not necessarily indicative of results for a full year. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

2.REPORTING CURRENCY

The functional currency of the Company, as the parent corporate entity, and its operating subsidiaries in the United States, is the U.S. dollar. The functional currency of the Company’s Canadian operations is the Canadian dollar. The reporting currency of the Company is the U.S. dollar. The Company’s consolidated Canadian dollar financial position is translated to U.S. dollars by applying the foreign currency exchange rate in effect at the consolidated balance sheet date. The Company’s consolidated Canadian dollar results of operations and cash flows are translated to U.S. dollars by applying the average foreign currency exchange rate in effect during the reporting period. The resulting translation adjustments are included in other comprehensive income or loss. Gains and losses from foreign currency transactions are included in earnings for the period.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

3.NEW ACCOUNTING STANDARDS

Accounting Standards Adopted

~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments~~. In June 2016, the Financial Accounting Standards Board, (“FASB”) issued guidance introducing a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade ~~receivables~~, that requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The standard became effective for public business entities that are U.S. Securities and Exchange Commission (“SEC”) filers for annual periods beginning after December 15, 2019 and interim periods within those years. The Company adopted the new standard on January 1, 2020. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements as pre-existing processes for estimating expected credit losses for trade receivables aligned with the expected credit loss model. See Note 7 for additional information and disclosures related to the adoption of this new standard.

~~Accounting Standards Pending Adoption~~

Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued guidance that simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. The amendments include removal of certain exceptions to the general principles of income taxes, and simplification in several other areas such as accounting for a franchise tax that is partially based on income. The standard ~~will be~~is effective for public business entities that are ~~SEC~~U.S. Securities and Exchange Commission (“SEC”) filers for annual periods beginning after December 15, 2020, and interim periods within those reporting periods. ~~Early adoption is permitted.~~ The Company ~~is currently assessing~~adopted the new standard as of January 1, 2021. The adoption of this new standard did not have a material impact ~~that adopting this guidance will have~~ on ~~its condensed~~the Company’s consolidated financial ~~statements~~.statements.

Accounting Standards Pending Adoption

Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In March 2020, the FASB issued guidance to provide temporary optional expedients and exceptions to the guidance in GAAP on

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”)~~, anticipated to be phased out by the end of 2021,~~ and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). One-week and two-month U.S. dollar LIBOR settings as well as all non-U.S. dollar LIBOR settings will stop being published on December 31, 2021, while the remaining U.S. dollar LIBOR settings will be discontinued on June 30, 2023. Under the new guidance, entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Under the guidance, entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met.

The guidance is effective upon issuance. The guidance on contract modifications is applied prospectively from ~~any date beginning~~ March 12, 2020. It may also be applied to modifications of existing contracts made earlier in the interim period that includes the effective date. The guidance on hedging is applied to eligible hedging relationships existing as of the beginning of the interim period that includes the effective date and to new eligible hedging relationships entered into after the beginning of that interim period. The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date. However, certain optional expedients can be applied to hedging relationships evaluated in periods after December 31, 2022. The Company is currently assessing the potential impact of implementing this new guidance on its ~~condensed~~ consolidated financial statements. The Company had a combined $1,151,000 of U.S. based LIBOR loans as of June 30, 2021. The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of June 30, 2021, the impact to annual interest expense would have been an increase of less than $1,000. To the extent that the transition away from the use of LIBOR might affect the Company’s ability to maintain cash ‎flow hedge accounting as described in Note ~~13,~~12, the relief is expected to permit the Company to maintain that cash flow ‎hedge accounting.

~~Table~~SEC amends MD&A and other Regulation S-K disclosure requirements. In November 2020, the SEC adopted amendments to Regulation S-K to eliminate certain disclosure requirements and to revise several others to make the disclosures provided in management’s discussion and analysis more useful for investors. Key changes included: (1) enhancements and clarification of ~~Contents~~

the disclosure requirements for liquidity and capital resources; (2) elimination of five years of Selected Financial Data; (3) replacement of the current requirement for two years of quarterly tabular disclosure with a principles-based requirement to provide information only when there are material retrospective changes; (4) codification of prior SEC guidance on critical accounting estimates; (5) elimination of the tabular disclosure of contractual obligations; and (6) conforming amendments for foreign private issuers. The amended rules were posted to the Federal Register on January 11, 2021 and became effective February 10, 2021. Registrants are required to comply with the new rules beginning with the first fiscal year ending on or after August 9, 2021. Registrants may early adopt the amended rules at any time after the effective date (on an item-by-item basis), as long as they provide the disclosure responsive to an amended item in its entirety~~WASTE CONNECTIONS, INC.~~.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

4.RECLASSIFICATION

As disclosed within ~~other notes~~Note 11 to the financial statements, segment information reported in the Company’s prior year has been reclassified to conform to the ~~2020~~2021 presentation.

5.IMPAIRMENTS OF PROPERTY, EQUIPMENT, GOODWILL AND INTANGIBLE ASSETS

Property, equipment and finite-lived intangible assets are carried on the Company’s consolidated financial statements based on their cost less accumulated depreciation or amortization. Finite-lived intangible assets consist of long-term franchise agreements, contracts, customer lists, permits and other agreements. The recoverability of these assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Typical indicators that an asset may be impaired include, but are not limited to, the following:

●

a significant adverse change in legal factors or in the business climate;

●

an adverse action or assessment by a regulator;

●

a more likely than not expectation that a segment or a significant portion thereof will be sold;

●

the testing for recoverability of a significant asset group within a segment; or

●

current period or expected future operating cash flow losses.

If any of these or other indicators occur, a test of recoverability is performed by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If the carrying value is in excess of the undiscounted expected future cash flows, impairment is measured by comparing the fair value of the asset to its carrying value. Fair value is determined by an internally developed discounted projected cash flow analysis of the asset. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether an impairment has occurred for the group of assets for which the projected cash flows can be identified. If the fair value of an asset is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs. Several impairment indicators are beyond the Company’s control, and whether or not they will occur cannot be predicted with any certainty. Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized. There are other considerations for impairments of landfills, as described below.

There are certain indicators listed above that require significant judgment and understanding of the waste industry when applied to landfill development or expansion projects. A regulator or court may deny or overturn a landfill development or landfill expansion permit application before the development or expansion permit is ultimately granted. Management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace. Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.

Goodwill and indefinite-lived intangible assets are tested for impairment on at least an annual basis in the fourth quarter of the year. In addition, the Company evaluates its reporting units for impairment if events or circumstances similar to the indicators listed above change between annual tests indicating a possible impairment.

~~The Company estimates the fair value of each of its reporting units using discounted cash flow analyses.~~ Through June 30, 2020, the Company’s reporting units consisted of its 5 geographic solid waste operating segments and its non-hazardous oil and natural gas exploration and production (“E&P&P”) waste treatment, recovery and disposal services segment. As of July 2020, the Company combined all operations of the E&P segment into the Southern segment, based

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

on the Company’s determination that the two operating segments met the aggregation criteria, and eliminated the E&P segment.

The Company estimates the fair value of each of its reporting units using discounted cash flow analyses. Discounted cash flow analyses require significant assumptions and estimates about the future operations of each reporting unit and the future discrete cash flows related to each indefinite-lived intangible asset. Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows, growth rates and income tax rates. The Company compares the fair value of each reporting unit with the carrying value of the net assets assigned to each reporting unit. If the fair value of a reporting unit is greater than the carrying value of the net assets, including goodwill, assigned to the reporting unit, then no impairment results. If the fair value is less than its carrying value, an impairment charge is recorded for the amount by which the carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In testing indefinite-lived intangible assets for impairment, the Company compares the estimated fair value of each indefinite-lived intangible asset to its carrying value. If the fair value of the indefinite-lived

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

intangible asset is less than its carrying value, an impairment charge would be recorded to earnings in the Company’s Condensed Consolidated Statements of Net ~~Income.~~Income (Loss).

The demand for the Company’s E&P waste services depends on the continued demand for, and production of, oil and natural gas. Crude oil and natural gas prices historically have been volatile. Macroeconomic and geopolitical conditions, including a significant decline in oil prices occurring in 2020 driven by both surplus production and supply, as well as the decrease in demand caused by factors including the ~~COVID-19~~coronavirus disease 2019 (“COVID-19”) pandemic, ~~have~~ resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for the Company’s E&P waste ~~services.~~services in 2020 and 2021. During the ~~nine~~three months ended ~~September~~June 30, 2020, total revenue for the Company’s E&P ~~revenue~~segment declined ~~$75,158,~~43.3%, compared to the prior year period, on oil rig count declines of ~~72%~~over 60% in certain basins. The most impacted basins ~~include~~included the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which have relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico. Additionally, across the industry there iswas uncertainty regarding future demand for oil and related services, as noted by several energy companies during 2020, many of whom are customers of the Company’s E&P ~~segment.~~operations. These companies ~~have written~~wrote down the values of their oil and gas assets in anticipation of the potential for the decarbonization of their energy product mix given an increased global focus on reducing greenhouse gases and addressing climate change. Such uncertainty regarding global demand ~~has~~ had a significant impact on the investment and operating plans of the Company’s E&P waste customers in the basins where the Company operates.

The decrease in ~~exploration and production~~E&P activity, together with market expectations of a likely slow recovery in oil prices, reduced the expected future period cash flows of the Company’s E&P operations. Based on these events, the Company concluded that a triggering event occurred which required the Company to perform an impairment test of the property and equipment and intangible assets of its E&P operations as of June 30, 2020 using July 2020 industry projections for drilling activity by basin as the basis for expectations about future activity. Based upon the results of the impairment test, the Company concluded that the carrying value exceeded the projected undiscounted cash flows of ~~four~~4 E&P landfills. The next step was to calculate the fair value of these ~~four~~4 landfills using an income approach employing a discounted cash flow ~~(“DCF”)~~(DCF) model over the lesser of 40 years or the remaining life of each landfill. Additional key assumptions used in the DCF model included a discount rate of 12% applied to the cash flows, annual revenue projections based on E&P waste resulting from projected levels of oil and natural gas ~~exploration and production~~E&P activity during the forecast period at each location, gross margins based on estimated operating expense requirements during the forecast period, estimated capital expenditures over the forecast period and income taxes based on the estimated federal and state income tax rates applicable during the cash flow ~~periods.~~periods, all of which were classified as Level 3 in the fair value hierarchy. For each of the 4 landfills, the carrying value exceeded the calculated discounted fair value, resulting in the recording of an impairment charge of $417,384 to Impairments and other operating items in the Condensed Consolidated Statements of Net Income (Loss) during the ~~nine~~three months ended ~~September~~June 30, 2020. The ~~four~~4 landfills had $0 of intangible assets at June 30, 2020; therefore, 0 impairment charge was attributable to intangible assets. The impairment charge reduced the carrying value of property and equipment by $417,384. If the estimated annual cash flows in the DCF model for each asset or asset group tested was changed by 10%, the resulting impairment charge would change by approximately $3,000.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

The aforementioned impairment charges were partially offset by a $4,145 adjustment to reduce the fair value of an amount payable in 2021 under a liability-classified contingent consideration arrangement calculated on future earnings and cash flows associated with the acquisition of an E&P business in 2014. Based upon the outlook for E&P waste services in the market where the acquired business operates, the payment of the contingent consideration was deemed unlikely and the carrying value was reduced to $0 as of June 30, 2020, resulting in a credit to Impairments and other operating items in the Condensed Consolidated Statements of Net ~~Income.~~Income (Loss).

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

6.REVENUE

The Company’s operations primarily consist of providing non-hazardous waste collection, transfer, disposal and recycling services, ~~non-hazardous~~ E&P ~~waste treatment, recovery and disposal~~ services, and intermodal services. The following table disaggregates the Company’s revenues by service line for the periods indicated:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Commercial	$	406,037	$	408,415	$	1,197,971	$	1,186,565	$	444,044	$	375,427	$	870,439	$	791,935
Residential		387,566		355,574		1,131,486		1,024,105		416,975		378,188		817,794		743,919
Industrial and construction roll off		216,894		226,801		618,122		629,597		237,300		194,457		446,558		401,228
Total collection		1,010,497		990,790		2,947,579		2,840,267		1,098,319		948,072		2,134,791		1,937,082
Landfill		308,795		310,633		855,631		852,073		327,124		280,619		599,060		546,836
Transfer		205,910		209,585		575,761		575,337		217,133		189,085		406,456		369,851
Recycling		21,377		14,142		59,701		50,676		41,539		20,217		73,987		38,324
E&P		26,218		70,874		131,748		205,743		34,607		40,152		62,618		105,530
Intermodal and other		27,141		26,520		84,970		90,491		38,590		27,811		74,225		57,829
Intercompany		(210,386)		(210,100)		(607,651)		(587,868)		(223,381)		(200,174)		(421,263)		(397,265)
Total	$	1,389,552	$	1,412,444	$	4,047,739	$	4,026,719	$	1,533,931	$	1,305,782	$	2,929,874	$	2,658,187

The factors that impact the timing and amount of revenue recognized for each service line may vary based on the nature of the service performed. Generally, the Company recognizes revenue at the time it performs a service. In the event that the Company bills for services in advance of performance, it recognizes deferred revenue for the amount billed and subsequently recognizes revenue at the time the service is provided. Substantially all of the deferred revenue recorded as of ~~June 30, 2020~~March 31, 2021 was recognized as revenue during the three months ended ~~September~~June 30, ~~2020~~2021 when the service was performed.

See Note 1211 for additional information regarding revenue by reportable segment.

Contract Acquisition Costs

The incremental direct costs of obtaining a contract, which consist of sales incentives, are recognized as Other assets in the Company’s Condensed Consolidated Balance Sheet, and are amortized to Selling, general and administrative expense over the estimated life of the relevant customer relationship, which ranges from one to five years. The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity would have recognized is one year or less. The Company had ~~$19,669~~$18,954 and ~~$16,846~~$19,669 of deferred sales incentives at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

~~Table of Contents~~

~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

7.ACCOUNTS RECEIVABLE

Accounts receivable are recorded when billed or accrued and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for credit losses, represents their estimated net realizable value.

The allowance for credit losses is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics. The Company monitors the collectability of its trade receivables as one overall pool due

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

to all trade receivables having similar risk characteristics. The Company estimates its allowance for credit losses based on historical collection trends, the age of outstanding receivables, geographical location of the customer, existing economic conditions and reasonable forecasts. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

~~The following is a rollforward of the Company’s allowance for credit losses from January 1, 2020 to September 30, 2020:~~


			Six Months Ended June 30,
			2021		2020
Beginning balance	$	16,432	$	19,380	$	16,432
Current period provision for expected credit losses		13,092		4,903		10,012
Write-offs charged against the allowance		(13,540)		(7,152)		(9,993)
Recoveries collected		4,722		2,346		3,601
Impact of changes in foreign currency		(49)		50		(87)
Ending balance	$	20,657	$	19,527	$	19,965

8.LANDFILL ACCOUNTING

At ~~September~~June 30, ~~2020,~~2021, the Company’s landfills consisted of 8382 owned landfills, 65 landfills operated under life-of-site operating agreements, 4 landfills operated under limited-term operating agreements and 1 development stage landfill. The Company’s landfills had site costs with a net book value of ~~$2,645,221~~$2,602,084 at ~~September~~June 30, ~~2020.~~2021. For the Company’s landfills operated under limited-term operating agreements and life-of-site operating agreements, the owner of the property (generally a municipality) usually owns the permit and the Company operates the landfill for a contracted term. Where the contracted term is not the life of the landfill, the property owner is generally responsible for final capping, closure and post-closure obligations. The Company is responsible for all final capping, closure and post-closure liabilities at the landfills it operates under life-of-site operating agreements.

The Company’s internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at its landfills. Many of the Company’s existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted. The Company’s landfill depletion rates are based on the remaining disposal capacity, considering both permitted and probable expansion airspace, at the landfills it owns and landfills it operates, but does not own, under life-of-site agreements. The Company’s landfill depletion rate is based on the term of the operating agreement at its operated landfill that has capitalized expenditures. Expansion airspace consists of additional disposal capacity being pursued through means of an expansion that has not yet been permitted. Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace.

~~Table of Contents~~

~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

Based on remaining permitted capacity as of ~~September~~June 30, ~~2020,~~2021, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 28 years. As of ~~September~~June 30, ~~2020,~~2021, the Company is seeking to expand permitted capacity at 1011 of its owned landfills and 3 landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable. Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is approximately 32 years. The estimated remaining lives of the Company’s owned landfills and

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

landfills operated under life-of-site operating agreements range from 1 to 283 years, with approximately 90% of the projected annual disposal volume from landfills with remaining lives ~~ranging from approximately 1 to 204~~of less than 70 years.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed ~~$149,988~~$102,702 and ~~$169,064,~~$96,925, respectively, or an average of ~~$4.51~~$4.54 and ~~$4.77~~$4.50 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

The Company reserves for estimated final capping, closure and post-closure maintenance obligations at the landfills it owns and landfills it operates under life-of-site operating agreements. The Company calculates the net present value of its final capping, closure and post-closure liabilities by estimating the total obligation in current dollars, inflating the obligation based upon the expected date of the expenditure and discounting the inflated total to its present value using a credit-adjusted risk-free rate. Any changes in expectations that result in an upward revision to the estimated undiscounted cash flows are treated as a new liability and are inflated and discounted at rates reflecting current market conditions. Any changes in expectations that result in a downward revision (or no revision) to the estimated undiscounted cash flows result in a liability that is inflated and discounted at rates reflecting the market conditions at the time the cash flows were originally estimated. This policy results in the Company’s final capping, closure and post-closure liabilities being recorded in “layers.” The Company’s discount rate assumption for purposes of computing ~~2020~~2021 and ~~2019~~2020 “layers” for final capping, closure and post-closure obligations was 3.25% and 4.75% ~~for both years,~~, respectively, which reflects the Company’s long-term credit adjusted risk free ~~rate.~~rate as of the end of 2020 and 2019. The Company’s inflation rate assumption is ~~2.5%~~2.25% and 2.50% for the years ending December 31, 2021 and 2020, ~~and 2019.~~respectively. The resulting final capping, closure and post-closure obligations are recorded on the Condensed Consolidated Balance Sheet along with an offsetting addition to site costs which is amortized to depletion expense as the remaining landfill airspace is consumed. Interest is accreted on the recorded liability using the corresponding discount rate. During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the Company expensed ~~$11,174~~$7,285 and ~~$10,656,~~$7,505, respectively, or an average of ~~$0.34~~$0.32 and ~~$0.30~~$0.35 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, ~~2019~~2020 to ~~September~~June 30, ~~2020:~~2021:


Final capping, closure and post-closure liability at December 31, 2019	$	291,474
Final capping, closure and post-closure liability at December 31, 2020			$	301,896
Liability adjustments		(1,861)		(10,328)
Accretion expense associated with landfill obligations		11,174		7,285
Closure payments		(3,257)		(5,802)
Assumption of closure liabilities from acquisitions		2,135
Foreign currency translation adjustment		(1,178)		1,268
Final capping, closure and post-closure liability at September 30, 2020	$	298,487
Final capping, closure and post-closure liability at June 30, 2021			$	294,319

Liability adjustments of ~~$1,861~~$10,328 for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed. The final capping, closure and post-closure liability is included in Other long-term liabilities in the Condensed Consolidated Balance Sheets. The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

~~Table of Contents~~

~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019, $17,589~~2020, $12,015 and ~~$12,324,~~$12,533, respectively, of the Company’s restricted cash balance and ~~$44,558~~$56,548 and ~~$48,590,~~$54,833, respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

9.~~ACQUISITIONS~~

The Company acquired 11 individually immaterial non-hazardous solid waste collection, transfer, recycling and disposal businesses during the nine months ended September 30, 2020. The total acquisition-related costs incurred during the nine months ended September 30, 2020 for these acquisitions were $4,497. These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

The Company acquired 13 individually immaterial non-hazardous solid waste collection, transfer and disposal businesses during the nine months ended September 30, 2019. The total acquisition-related costs incurred during the nine months ended September 30, 2019 for these acquisitions were $8,057. These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

The results of operations of the acquired businesses have been included in the Company’s Condensed Consolidated Financial Statements from their respective acquisition dates. The Company expects these acquired businesses to contribute towards the achievement of the Company’s strategy to expand through acquisitions. Goodwill acquired is attributable to the synergies and ancillary growth opportunities expected to arise after the Company’s acquisition of these businesses.

~~Goodwill acquired during the nine months ended September 30, 2020 and 2019, totaling $48,926 and $81,903, respectively, is expected to be deductible for tax purposes.~~

The fair value of acquired working capital related to 6 individually immaterial acquisitions completed during the twelve months ended September 30, 2020, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed. Any adjustments recorded relating to finalizing the working capital for these six acquisitions are not expected to be material to the Company’s financial position.

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(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

~~10.~~9.INTANGIBLE ASSETS, NET

Intangible assets, exclusive of goodwill, consisted of the following at ~~September~~June 30, ~~2020:~~2021:


	Gross				Accumulated		Net		Gross				Accumulated		Net
	Carrying		Accumulated		Impairment		Carrying		Carrying		Accumulated		Impairment		Carrying
	Amount		Amortization		Loss		Amount		Amount		Amortization		Loss		Amount
Finite-lived intangible assets:
Long-term franchise agreements and contracts	$	588,000	$	(220,502)	$	—	$	367,498	$	600,865	$	(257,176)	$	—	$	343,689
Customer lists		594,215		(360,264)		—		233,951		647,070		(417,563)		—		229,507
Permits and other		364,263		(74,120)		—		290,143		380,653		(87,020)		—		293,633
		1,546,478		(654,886)		—		891,592		1,628,588		(761,759)		—		866,829
Indefinite-lived intangible assets:
Solid waste collection and transportation permits		172,056		—		—		172,056		172,056		—		—		172,056
Material recycling facility permits		42,283		—		—		42,283		42,283		—		—		42,283
E&P facility permits		59,855		—		(38,507)		21,348		59,855		—		(38,507)		21,348
		274,194		—		(38,507)		235,687		274,194		—		(38,507)		235,687
Intangible assets, exclusive of goodwill	$	1,820,672	$	(654,886)	$	(38,507)	$	1,127,279	$	1,902,782	$	(761,759)	$	(38,507)	$	1,102,516

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the nine months ended September 30, 2020 was 14.1 years. The weighted-average amortization period of customer lists acquired during the nine months ended September 30, 2020 was 11.0 years.

Intangible assets, exclusive of goodwill, consisted of the following at December 31, ~~2019:~~2020:


	Gross				Accumulated		Net		Gross				Accumulated		Net
	Carrying		Accumulated		Impairment		Carrying		Carrying		Accumulated		Impairment		Carrying
	Amount		Amortization		Loss		Amount		Amount		Amortization		Loss		Amount
Finite-lived intangible assets:
Long-term franchise agreements and contracts	$	550,340	$	(192,462)	$	—	$	357,878	$	600,674	$	(234,972)	$	—	$	365,702
Customer lists		587,562		(308,427)		—		279,135		636,035		(382,020)		—		254,015
Permits and other		367,127		(63,299)		—		303,828		378,952		(79,277)		—		299,675
		1,505,029		(564,188)		—		940,841		1,615,661		(696,269)		—		919,392
Indefinite-lived intangible assets:
Solid waste collection and transportation permits		158,591		—		—		158,591		172,056		—		—		172,056
Material recycling facility permits		42,283		—		—		42,283		42,283		—		—		42,283
E&P facility permits		59,855		—		(38,507)		21,348		59,855		—		(38,507)		21,348
		260,729		—		(38,507)		222,222		274,194		—		(38,507)		235,687
Intangible assets, exclusive of goodwill	$	1,765,758	$	(564,188)	$	(38,507)	$	1,163,063	$	1,889,855	$	(696,269)	$	(38,507)	$	1,155,079

Estimated future amortization expense for the next five years relating to finite-lived intangible assets is as follows:


For the year ending December 31, 2020	$	128,665
For the year ending December 31, 2021	$	113,928	$	131,979
For the year ending December 31, 2022	$	98,516	$	109,937
For the year ending December 31, 2023	$	83,699	$	93,175
For the year ending December 31, 2024	$	72,100	$	80,028
For the year ending December 31, 2025			$	67,493

1514

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

~~11.~~10.LONG-TERM DEBT

The following table presents the Company’s long-term debt as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020
Revolver under Credit Agreement, bearing interest ranging from 1.35% to 1.68% ^(a)	$	178,749	$	916,247
Term loan under Credit Agreement, bearing interest at 1.35% ^(a)		650,000		700,000
Revolver under Credit Agreement, bearing interest ranging from 1.30% to 1.61% ^(a)					$	505,034	$	203,927
Term loan under Credit Agreement, bearing interest at 1.30% ^(a)						650,000		650,000
4.64% Senior Notes due 2021 ^(b)		100,000		100,000		—		100,000
2.39% Senior Notes due 2021 ^(c)		150,000		150,000		—		150,000
3.09% Senior Notes due 2022		125,000		125,000		125,000		125,000
2.75% Senior Notes due 2023		200,000		200,000		200,000		200,000
3.24% Senior Notes due 2024		150,000		150,000		150,000		150,000
3.41% Senior Notes due 2025		375,000		375,000		375,000		375,000
3.03% Senior Notes due 2026		400,000		400,000		400,000		400,000
3.49% Senior Notes due 2027		250,000		250,000		250,000		250,000
4.25% Senior Notes due 2028		500,000		500,000		500,000		500,000
3.50% Senior Notes due 2029		500,000		500,000		500,000		500,000
2.60% Senior Notes due 2030		600,000		—		600,000		600,000
3.05% Senior Notes due 2050		500,000		—		500,000		500,000
Notes payable to sellers and other third parties, bearing interest ranging from 2.42% to 10.35%, principal and interest payments due periodically with due dates ranging from 2021 to 2036 ^(a)		43,160		9,638
Notes payable to sellers and other third parties, bearing interest ranging from 2.42% to 10.35%, principal and interest payments due periodically with due dates ranging from 2028 to 2036 ^(a)						37,201		43,131
Finance leases, bearing interest at 1.89% with a lease expiration date of 2026 ^(a)						9,417		3,754
		4,721,909		4,375,885		4,801,652		4,750,812
Less – current portion		(6,772)		(465)		(6,997)		(8,268)
Less – unamortized debt discount and issuance costs		(34,918)		(21,638)		(31,798)		(33,866)
	$	4,680,219	$	4,353,782	$	4,762,857	$	4,708,678

____________________

(a)	Interest rates represent the interest rates ~~incurred~~in effect at ~~September~~June 30, ~~2020.~~2021.

(b)

~~The Company has recorded~~All of the outstanding 4.64% Senior Notes due 2021 ~~(the “2021 Senior Notes”) in long-term in~~were redeemed by the ~~table above as the~~ Company ~~has the intent and ability to redeem the 2021 Senior Notes~~ on April 1, ~~2021 using borrowings under the Credit Agreement.~~2021.

(c)

~~The Company has recorded~~All of the outstanding 2.39% Senior Notes due 2021 ~~(the “New 2021 Senior Notes”) in long-term in~~were redeemed by the ~~table above as the~~ Company ~~has the intent and ability to redeem the New 2021 Senior Notes~~ on June 1, ~~2021 using borrowings under the Credit Agreement.~~2021.

~~Senior Notes due 2030 and 2050~~

On January 23, 2020, the Company completed an underwritten public offering of $600,000 aggregate principal amount of 2.60% Senior Notes due 2030 (the “2030 Senior Notes”). The 2030 Senior Notes were issued under the Indenture, dated as of November 16, 2018 (the “Base Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Third Supplemental Indenture, dated as of January 23, 2020. The Company is amortizing $5,435 of debt issuance costs through the maturity date.

The Company will pay interest on the 2030 Senior Notes semi-annually in arrears and the 2030 Senior Notes will mature on February 1, 2030. The 2030 Senior Notes are senior unsecured obligations, ranking equally in right of payment

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

with the Company’s other existing and future unsubordinated debt and senior to any of the Company’s future subordinated debt. The 2030 Senior Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may redeem some or all of the 2030 Senior Notes at its option prior to November 1, 2029 (three months before the maturity date) at any time and from time to time at a redemption price equal to the greater of 100% of the principal amount of the 2030 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2030 Senior Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Commencing on November 1, 2029 (three months before the maturity date), the Company may redeem some or all of the 2030 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2030 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

On March 13, 2020, the Company completed an underwritten public offering of $500,000 aggregate principal amount of 3.05% Senior Notes due 2050 (the “2050 Senior Notes”). The 2050 Senior Notes were issued under the Base Indenture, as supplemented by the Fourth Supplemental Indenture, dated as of March 13, 2020 (the Base Indenture as so supplemented, the “Indenture”). The Company is amortizing a $7,375 debt discount and $5,682 of debt issuance costs through the maturity date.

The Company will pay interest on the 2050 Senior Notes semi-annually in arrears and the 2050 Senior Notes will mature on April 1, 2050. The 2050 Senior Notes are senior unsecured obligations, ranking equally in right of payment with the Company’s other existing and future unsubordinated debt and senior to any of the Company’s future subordinated debt. The 2050 Senior Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may redeem some or all of the 2050 Senior Notes at its option prior to October 1, 2049 (six months before the maturity date) at any time and from time to time at a redemption price equal to the greater of 100% of the principal amount of the 2050 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2050 Senior Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Commencing on October 1, 2049 (six months before the maturity date), the Company may redeem some or all of the 2050 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2050 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

Under certain circumstances, the Company may become obligated to pay additional amounts (the “Additional Amounts”) with respect to the 2030 and/or 2050 Senior Notes (the “Notes”), to ensure that the net amounts received by each holder of the Notes will not be less than the amount such holder would have received if withholding taxes or deductions were not incurred on a payment under or with respect to the Notes. If such payment of Additional Amounts is a result of a change in the laws or regulations, including a change in any official position, the introduction of an official position or a holding by a court of competent jurisdiction, of any jurisdiction from or through which payment is made by or on behalf of the Notes having power to tax, and the Company cannot avoid such payments of Additional Amounts through reasonable measures, then the Company may redeem the 2030 and/or 2050 Senior Notes then outstanding at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

If the Company experiences certain kinds of changes of control, each holder of the Notes may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 101% of the aggregate principal amount of such Notes, plus any accrued but unpaid interest to, but excluding, the date of repurchase.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The covenants in the Indenture include limitations on liens, sale-leaseback transactions and mergers and sales of all or substantially all of the Company’s assets. The Indenture also includes customary events of default with respect to the Notes. As of September 30, 2020, the Company was in compliance with all applicable covenants in the Indenture.

Upon an event of default, the principal of and accrued and unpaid interest on all the 2030 and/or 2050 Senior Notes may be declared to be due and payable by the Trustee or the holders of not less than 25% in principal amount of the outstanding Notes of the applicable series. Upon such a declaration, such principal and accrued interest on all of the 2030 and/or 2050 Senior Notes will be due and payable immediately. In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding 2030 and/or 2050 Senior Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of the applicable series of the Notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes of any series may rescind any such acceleration with respect to the Notes of that series and its consequences.

Credit Agreement

Details of the Credit Agreement are as follows:


	September 30,			December 31,			June 30,			December 31,
	2020			2019			2021			2020
Revolver under Credit Agreement
Available	$	1,257,856		$	538,642		$	943,021		$	1,238,937
Letters of credit outstanding	$	125,895		$	107,611		$	114,445		$	119,636
Total amount drawn, as follows:	$	178,749		$	916,247		$	505,034		$	203,927
Amount drawn - U.S. LIBOR rate loan	$	175,000		$	897,000		$	501,000		$	200,000
Interest rate applicable - U.S. LIBOR rate loan		1.35	%		2.90	%		1.30	%		1.35	%
Amount drawn – Canadian bankers’ acceptance	$	3,749		$	19,247		$	4,034		$	3,927
Interest rate applicable – Canadian bankers’ acceptance		1.68	%		3.18	%		1.61	%		1.66	%
Commitment – rate applicable		0.15	%		0.12	%		0.15	%		0.15	%
Term loan under Credit Agreement
Amount drawn – U.S. based LIBOR loan	$	650,000		$	700,000		$	650,000		$	650,000
Interest rate applicable – U.S. based LIBOR loan		1.35	%		2.90	%		1.30	%		1.35	%

In addition to the $114,445 of letters of credit at June 30, 2021 issued under the Credit Agreement, the Company has issued letters of credit totaling $7,157 under facilities other than the Credit Agreement.

On March 21, 2018, the Company and the lenders named therein entered into an Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified and as in effect immediately prior to the Closing Date (as defined below), the “Credit Agreement”), pursuant to which the lenders made loans and other extensions of credit to the Company thereunder.

On July 30, 2021 (the “Closing Date”), the Company amended and restated the Credit Agreement in its entirety pursuant to a Second Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “2021 Credit Agreement”) entered into by the Company, as borrower, Bank of America, N.A., acting through its ‎Canada Branch, as the global agent, the swing line lender, and a letter of credit issuer, Bank of ‎America, N.A., as the U.S. agent and a letter of credit issuer, the other lenders ‎named therein ‎(the “Lenders”) ‎and any other financial institutions from time to time party thereto. The 2021 Credit Agreement has a scheduled maturity date of July 30, 2026, which may be extended further upon agreement by the Lenders with respect to their respective commitments and credit extensions outstanding.

Pursuant to the terms and conditions of the 2021 Credit Agreement, the Lenders committed to providing a ‎$2,500,000 credit facility to the Company, consisting of (i) revolving advances up to an aggregate principal amount of $1,850,000 at any one time ‎outstanding (representing an increase of $287,500 from the Credit Agreement), and (ii) a term loan in an aggregate principal amount of $650,000, which term loan was fully drawn as of the Closing Date (with existing term loans outstanding under the Credit Agreement immediately prior to the Closing Date continued and now outstanding under and governed by the terms of the 2021 Credit Agreement). As part of the aggregate commitments under the revolving advances, the 2021 Credit Agreement provides for letters of credit to be issued at the request of the Company in an aggregate amount not to exceed $320,000 and for swing line loans to be issued at the request of the Company in an aggregate amount not to exceed the lesser of $100,000 and the aggregate commitments under the revolving advances. This swing line sublimit is part of, and not in addition to, the aggregate commitments under the revolving advances. Existing letters of credit in place under the Credit Agreement immediately prior to the Closing Date are continued and now deemed issued under and governed by the terms of the 2021 Credit Agreement. Subject to certain specified conditions and additional deliveries, the

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Company has the option to request increases in the aggregate commitments for revolving advances and one or more additional term loans, provided that (i) the aggregate principal amount of such requests does not exceed $500,000 and (ii) the aggregate principal amount of commitments and term loans under the credit facility does not exceed $3,000,000. As of the Closing Date, there are no commitments by Lenders for any such increases in aggregate commitments for revolving advances or additional term loans described in the preceding sentence.

Advances are available under the 2021 Credit Agreement in U.S. dollars and Canadian dollars. Interest accrues on the term loan at a LIBOR rate or a base rate, at the Company’s option, plus an applicable margin. Interest accrues on revolving advances, at the Company’s option, (i) at a LIBOR rate or a base rate for U.S. dollar borrowings, plus an applicable margin, and (ii) at the Canadian prime rate for Canadian dollar borrowings, plus an applicable margin. Canadian dollar borrowings are also available by way of bankers' acceptances or BA equivalent notes, subject to the payment of a drawing fee. The fees for letters of credit in U.S. dollars and Canadian dollars are also based on the applicable margin. The applicable margin used in connection with interest rates and fees is based on the debt rating of the Company’s public non-credit-enhanced, senior unsecured long-term debt (the “Debt ‎Rating”)‎. The applicable margin for LIBOR rate loans, drawing fees for bankers’ acceptances, BA equivalent notes and letter of credit fees ranges from ‎0.750% to 1.250%‎, and the applicable margin for U.S. base rate loans, Canadian prime rate loans and swing line loans ranges from 0.00% to 0.250%. The Company will also pay a fee based on the Debt Rating on the actual daily unused amount of the aggregate revolving commitments ranging from 0.065% to 0.150%.‎ The 2021 Credit Agreement contains hardwired mechanics for the replacement of LIBOR, including (1) mechanics to transition to a rate based upon the secured overnight financing rate (“SOFR”) published by the Federal Reserve Bank of New York or a successor administrator on its website (or a successor source) upon the earlier of (x) LIBOR’s cessation or loss of representativeness, (y) June 30, 2023 and (z) the effectiveness of an early opt-in election by the Company and the agents subject to certain terms and (2) mechanics to transition to an alternate benchmark rate giving due consideration to any evolving or then-prevailing market conventions for U.S. dollar-denominated syndicated credit facilities at such time upon the occurrence of certain subsequent transition events, the unavailability of SOFR-based alternatives or the effectiveness of an early opt-in election by the Company and the agents subject to certain terms.

The borrowings under the 2021 Credit Agreement are unsecured and there are no subsidiary guarantors under the 2021 Credit Agreement‎. The 2021 Credit Agreement contains customary representations, warranties, covenants and events of default, including, among others, a change of control event of default and limitations on the incurrence of indebtedness and liens, new lines of business, mergers, transactions with affiliates and burdensome agreements. During the continuance of an event of default, the Lenders may take a number of actions, including, among others, declaring the entire amount then outstanding under the 2021 Credit Agreement to be due and payable.

The 2021 Credit Agreement includes a financial covenant limiting, as of the last day of each fiscal quarter, the ratio of (a) Consolidated Total Funded Debt (as defined in the 2021 Credit Agreement) as of such date to (b) Consolidated EBITDA (as defined in the 2021 Credit Agreement), measured for the preceding 12 months, to not more than 3.75 to 1.00 (or 4.25 to 1.00 during material acquisition periods, subject to certain limitations). As of June 30, 2021, the Company was in compliance with its financial covenants under the Credit Agreement and, if it had been in place as of that date, the 2021 Credit Agreement.

~~12.~~11.SEGMENT REPORTING

The Company’s revenues are generated from the collection, transfer, recycling and disposal of non-hazardous solid waste and the treatment, recovery and disposal of non-hazardous E&P waste. No single contract or customer accounted ~~for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.~~

Prior to July 2020, the Company managed its operations through 5 geographic solid waste operating segments and its E&P segment, which were also its reportable segments. As of July 2020, the Company’s chief operating decision maker determined that the Company’s E&P and Southern operating segments met all the aggregation criteria and eliminated the E&P segment by combining all operations of the E&P segment into the Southern segment. After giving effect to this combination, the Company’s reportable segments consist of its 5 geographic solid waste operating segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. The segment information presented herein reflects the realignment of these districts. Segment results for the 2019 periods

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

Prior to July 2020, the Company managed its operations through 5 geographic solid waste operating segments and its E&P segment, which were also its reportable segments. As of July 2020, the Company’s Chief Operating Decision Maker determined that the Company’s E&P and Southern operating segments met all the aggregation criteria and eliminated the E&P segment by combining all operations of the E&P segment into the Southern segment. After giving effect to this combination, the Company’s reportable segments consist of its 5 geographic operating segments and no longer include a separate E&P segment. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. The segment information presented herein reflects the realignment of these districts. Segment results for the 2020 periods reflected in this report have been reclassified to reflect the realignment of the Company’s reportable segments for comparison with the same period in ~~2020.~~ 2021.

Under the current orientation, the Company’s Eastern segment services customers located in northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; the Company’s Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico; the Company’s Eastern segment services customers located in Delaware, northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; the Company’s Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central segment services customers located in Arizona, Colorado, southern Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming; and the Company’s Canada segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

The Company’s Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA. The Company defines segment EBITDA as earnings before interest, taxes, depreciation, amortization, impairments and other operating items, and other income (expense). Segment EBITDA is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. The Company’s management uses segment EBITDA in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments. A reconciliation of segment EBITDA to Income before income tax provision is included at the end of this Note ~~12.~~11.

Summarized financial information concerning the Company’s reportable segments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, is shown in the following tables:

Three Months Ended



Intercompany

Reported

Segment
September 30, 2020

Revenue

Revenue^(b)

Revenue

EBITDA^(c)
Eastern

$
413,499

$
(69,146)

$
344,353

$
90,991
Southern

375,636

(45,061)

330,575

81,394
Western

337,768

(36,547)

301,221

101,071
Central

262,458

(33,892)

228,566

82,887
Canada

210,577

(25,740)

184,837

72,516
Corporate^(a)

—

—

—

(4,132)

$
1,599,938

$
(210,386)

$
1,389,552

$
424,727

Three Months Ended



Intercompany

Reported

Segment
September 30, 2019

Revenue

Revenue^(b)

Revenue

EBITDA^(c)
Eastern

$
399,936

$
(69,049)

$
330,887

$
88,101
Southern

417,133

(45,678)

371,455

113,209
Western

324,859

(35,651)

289,208

90,059
Central

262,737

(32,663)

230,074

81,746
Canada

217,879

(27,059)

190,820

66,794
Corporate^(a)

—

—

—

(446)

$
1,622,544

$
(210,100)

$
1,412,444

$
439,463


Three Months Ended			Intercompany		Reported		Segment
June 30, 2021	Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Eastern	$	440,799	$	(71,182)	$	369,617	$	99,382
Southern		413,194		(49,858)		363,336		98,928
Western		351,816		(38,027)		313,789		99,402
Central		303,905		(37,060)		266,845		94,886
Canada		247,598		(27,254)		220,344		88,641
Corporate^(a)		—		—		—		(6,442)
	$	1,757,312	$	(223,381)	$	1,533,931	$	474,797

1918

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)


Three Months Ended			Intercompany		Reported		Segment
June 30, 2020	Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Eastern	$	383,715	$	(64,824)	$	318,891	$	82,680
Southern		379,690		(46,224)		333,466		89,130
Western		310,656		(35,120)		275,536		85,423
Central		249,064		(32,444)		216,620		79,705
Canada		182,831		(21,562)		161,269		53,675
Corporate^(a)		—		—		—		(2,699)
	$	1,505,956	$	(200,174)	$	1,305,782	$	387,914


Nine Months Ended			Intercompany		Reported		Segment
September 30, 2020	Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Six Months Ended											Intercompany		Reported		Segment
June 30, 2021									Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Eastern	$	1,194,213	$	(198,767)	$	995,446	$	258,333	$	839,629	$	(133,550)	$	706,079	$	188,503
Southern		1,171,709		(138,412)		1,033,297		276,844		795,881		(94,384)		701,497		192,352
Western		953,861		(105,122)		848,739		267,523		684,636		(73,843)		610,793		193,228
Central		749,093		(95,365)		653,728		235,742		571,607		(69,376)		502,231		173,926
Canada		586,514		(69,985)		516,529		185,589		459,384		(50,110)		409,274		162,581
Corporate^(a)		—		—		—		(10,462)		—		—		—		(7,192)
	$	4,655,390	$	(607,651)	$	4,047,739	$	1,213,569	$	3,351,137	$	(421,263)	$	2,929,874	$	903,398


Nine Months Ended			Intercompany		Reported		Segment
September 30, 2019	Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Six Months Ended											Intercompany		Reported		Segment
June 30, 2020									Revenue		Revenue^(b)		Revenue		EBITDA^(c)
Eastern	$	1,137,258	$	(189,924)	$	947,334	$	250,106	$	780,715	$	(129,622)	$	651,093	$	167,342
Southern		1,214,125		(129,931)		1,084,194		327,139		796,073		(93,351)		702,722		195,450
Western		922,737		(101,552)		821,185		253,504		616,093		(68,575)		547,518		166,451
Central		715,997		(89,685)		626,312		219,280		486,634		(61,472)		425,162		152,856
Canada		624,470		(76,776)		547,694		193,702		375,937		(44,245)		331,692		113,073
Corporate^(a)		—		—		—		(11,751)		—		—		—		(6,329)
	$	4,614,587	$	(587,868)	$	4,026,719	$	1,231,980	$	3,055,452	$	(397,265)	$	2,658,187	$	788,843

____________________

(a)

The majority of Corporate ~~consists of~~expenses are allocated to the 5 operating segments. Direct acquisition expenses, expenses associated with ~~its administrative departments and certain centralized expenses including cash and equity-based incentive~~common shares held in the deferred compensation ~~direct acquisition expenses~~plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the ~~Company. Amounts reflected~~Company are ~~net of allocations~~not allocated to the 5 operating ~~segments.~~segments and comprise the net EBITDA of the Company’s Corporate segment for the periods presented.

(b)

Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

(c)

For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

~~Total assets for each of the Company’s reportable segments at September 30, 2020 and December 31, 2019, were as follows:~~

September 30,

December 31,

2020

2019
Eastern

$
3,055,672

$
3,099,283
Southern

3,441,079

3,952,449
Western

1,860,596

1,718,015
Central

1,956,234

1,885,468
Canada

2,444,922

2,490,291
Corporate

1,090,944

592,189
Total Assets

$
13,849,447

$
13,737,695

2019

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Total assets for each of the Company’s reportable segments at June 30, 2021 and December 31, 2020, were as follows:


	June 30,		December 31,
	2021		2020
Eastern	$	3,101,990	$	3,134,462
Southern		3,357,839		3,402,081
Western		1,871,364		1,861,079
Central		2,202,658		2,160,246
Canada		2,620,708		2,544,379
Corporate		951,648		890,117
Total Assets	$	14,106,207	$	13,992,364

The following tables show changes in goodwill during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, by reportable segment:


	Eastern		Southern		Western		Central		Canada		Total		Eastern		Southern		Western		Central		Canada		Total
Balance as of December 31, 2019	$	1,331,180	$	1,528,225	$	400,037	$	729,470	$	1,521,939	$	5,510,851
Balance as of December 31, 2020													$	1,374,577	$	1,532,215	$	442,862	$	824,204	$	1,552,792	$	5,726,650
Goodwill acquired		6,228		3,648		43,151		10,450		174		63,651		1,647		—		2,305		45,843		—		49,795
Goodwill acquisition adjustments														—		(3)		—		—		(2)		(5)
Impact of changes in foreign currency		—		—		—		—		(39,935)		(39,935)		—		—		—		—		42,309		42,309
Balance as of September 30, 2020	$	1,337,408	$	1,531,873	$	443,188	$	739,920	$	1,482,178	$	5,534,567
Balance as of June 30, 2021													$	1,376,224	$	1,532,212	$	445,167	$	870,047	$	1,595,099	$	5,818,749


	Eastern		Southern		Western		Central		Canada		Total		Eastern		Southern		Western			Central		Canada		Total
Balance as of December 31, 2018	$	1,126,486	$	1,517,610	$	398,174	$	540,435	$	1,448,980	$	5,031,685
Balance as of December 31, 2019													$	1,331,180	$	1,528,225	$	400,037		$	729,470	$	1,521,939	$	5,510,851
Goodwill acquired		22,146		10,329		1,334		189,194		25		223,028		—		3,648		42,206			3,134		177		49,165
Goodwill divested		—		(845)		—		—		—		(845)
Goodwill acquisition adjustments														(340)		—		—			—		—		(340)
Impact of changes in foreign currency		—		—		—		—		43,688		43,688		—		—		—			—		(71,371)		(71,371)
Balance as of September 30, 2019	$	1,148,632	$	1,527,094	$	399,508	$	729,629	$	1,492,693	$	5,297,556
Balance as of June 30, 2020													$	1,330,840	$	1,531,873	$	442,243	��	$	732,604	$	1,450,745	$	5,488,305

A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income (loss) before income tax provision in the Condensed Consolidated Statements of Net Income (Loss) is as follows:


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Eastern segment EBITDA	$	90,991	$	88,101	$	258,333	$	250,106	$	99,382	$	82,680	$	188,503	$	167,342
Southern segment EBITDA		81,394		113,209		276,844		327,139		98,928		89,130		192,352		195,450
Western segment EBITDA		101,071		90,059		267,523		253,504		99,402		85,423		193,228		166,451
Central segment EBITDA		82,887		81,746		235,742		219,280		94,886		79,705		173,926		152,856
Canada segment EBITDA		72,516		66,794		185,589		193,702		88,641		53,675		162,581		113,073
Subtotal reportable segments		428,859		439,909		1,224,031		1,243,731		481,239		390,613		910,590		795,172
Unallocated corporate overhead		(4,132)		(446)		(10,462)		(11,751)		(6,442)		(2,699)		(7,192)		(6,329)
Depreciation		(157,590)		(157,994)		(459,641)		(461,616)		(169,221)		(151,230)		(326,624)		(302,051)
Amortization of intangibles		(32,653)		(31,934)		(96,062)		(93,821)		(32,707)		(31,771)		(64,899)		(63,409)
Impairments and other operating items		(3,805)		(12,935)		(442,582)		(32,949)		(6,081)		(437,270)		(6,715)		(438,777)
Interest expense		(40,636)		(36,780)		(119,562)		(111,313)		(41,328)		(40,936)		(83,753)		(78,926)
Interest income		903		2,056		4,396		7,186		744		1,317		1,848		3,493
Other income (expense), net		702		(19)		(3,046)		4,562		(1,235)		5,772		2,312		(3,749)
Income before income tax provision	$	191,648	$	201,857	$	97,072	$	544,029
Income (loss) before income tax provision									$	224,969	$	(266,204)	$	425,567	$	(94,576)

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

~~13.~~12.DERIVATIVE FINANCIAL INSTRUMENTS

The Company recognizes all derivatives on the Condensed Consolidated Balance Sheets at fair value. All of the Company’s derivatives have been designated as cash flow hedges; therefore, the gain or loss on the derivatives will be recognized in accumulated other comprehensive income (loss) (“AOCIL”) and reclassified into earnings in the same period during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. The Company classifies cash inflows and outflows from derivatives within operating activities on the Condensed Consolidated Statements of Cash Flows.

One of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the variable interest rates of certain borrowings under the Credit Agreement. The Company’s strategy to achieve that objective involves entering into interest rate swaps. The interest rate swaps outstanding at ~~September~~June 30, ~~2020~~2021 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

~~Table of Contents~~

~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

At ~~September~~June 30, ~~2020,~~2021, the Company’s derivative instruments included 106 interest rate swap agreements as follows:


			Fixed		Variable					Fixed		Variable
	Notional		Interest		Interest Rate			Notional		Interest		Interest Rate
Date Entered	Amount		Rate Paid*		Received	Effective Date	Expiration Date	Amount		Rate Paid*		Received	Effective Date	Expiration Date
May 2014	$	50,000	2.344	%	1-month LIBOR	October 2015	October 2020
May 2014	$	25,000	2.326	%	1-month LIBOR	October 2015	October 2020
May 2014	$	50,000	2.350	%	1-month LIBOR	October 2015	October 2020
May 2014	$	50,000	2.350	%	1-month LIBOR	October 2015	October 2020
August 2017	$	100,000	1.900	%	1-month LIBOR	July 2019	July 2022	$	100,000	1.900	%	1-month LIBOR	July 2019	July 2022
August 2017	$	200,000	2.200	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.200	%	1-month LIBOR	October 2020	October 2025
August 2017	$	150,000	1.950	%	1-month LIBOR	February 2020	February 2023	$	150,000	1.950	%	1-month LIBOR	February 2020	February 2023
June 2018	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025
June 2018	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025
December 2018	$	200,000	2.850	%	1-month LIBOR	July 2022	July 2027	$	200,000	2.850	%	1-month LIBOR	July 2022	July 2027

____________________

* Plus applicable margin.

On September 28, 2020, the Company terminated 4 of its interest rate swaps with notional amounts of $150,000, $150,000, $50,000 and $50,000, each of which would have expired in January 2021. As a result of terminating these interest rate swaps, the Company made total cash payments of $853 to the counterparties of the swap agreements.

The fair values of derivative instruments designated as cash flow hedges as of ~~September~~June 30, 2021, were as follows:


Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets	$	—	Accrued liabilities^(a)	$	(19,943)
				Other long-term liabilities		(50,406)
Total derivatives designated as cash flow hedges		$	—		$	(70,349)

____________________

(a)Represents the estimated amount of the existing unrealized losses on interest rate swaps as of June 30, 2021 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in interest rates.

The fair values of derivative instruments designated as cash flow hedges as of December 31, 2020, were as follows:


Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets^(a)	$	—	Accrued liabilities^(a)	$	~~(19,825)~~(20,023)
				Other long-term liabilities		~~(83,429)~~(74,666)
Total derivatives designated as cash flow hedges		$	—		$	~~(103,254)~~(94,689)

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and six months ended June 30, 2021 and 2020:

Derivatives

Statement of

Amount of (Gain) or Loss Reclassified

Designated as Cash

Amount of Gain or (Loss) Recognized

Net Income (Loss)

from AOCIL into Earnings,

Flow Hedges

as AOCIL on Derivatives, Net of Tax ^(a)

Classification

Net of Tax ^(b)

Three Months Ended

June 30,

2021

2020

2021

2020

Interest rate swaps

(4,599)

(8,722)

Interest expense

3,720

1,574

Derivatives

Statement of

Amount of (Gain) or Loss Reclassified

Designated as Cash

Amount of Gain or (Loss) Recognized

Net Income (Loss)

from AOCIL into Earnings,

Flow Hedges

as AOCIL on Derivatives, Net of Tax ^(a)

Classification

Net of Tax ^(b)

Six Months Ended

June 30,

2021

2020

2021

2020

Interest rate swaps

10,644

(51,371)

Interest expense

7,245

1,251

____________________

(a)~~Represents~~In accordance with the ~~estimated amount~~derivatives and hedging guidance, the changes in fair values of interest rate swaps have been recorded in equity as a component of AOCIL. As the critical terms of the ~~existing~~interest rate swaps match the underlying debt being hedged, all unrealized changes in fair value are recorded in AOCIL.

(b)Amounts reclassified from AOCIL into earnings related to realized gains and losses ~~respectively,~~ on interest rate swaps ~~as of September 30, 2020 (based~~are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in interest rates.Company’s hedged debt.

See Note 16 for further discussion on the impact of the Company’s hedge accounting to its consolidated comprehensive income (loss) and AOCIL.

13.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted cash and investments, trade payables, debt instruments, contingent consideration obligations and interest rate swaps. As of June 30, 2021 and December 31, 2020, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values. The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values ~~of derivative instruments designated as cash flow hedges~~ as of June 30, 2021 and December 31, ~~2019, were~~2020, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as ~~follows:~~

Derivatives Designated as Cash

Asset Derivatives

Liability Derivatives
Flow Hedges

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value
Interest rate swaps

Prepaid expenses and other current assets

$
2,845

Accrued liabilities

$
(3,680)

Other long-term liabilities

(38,967)
Total derivatives designated as cash flow hedges

$
2,845

$
(42,647)

Level 2

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

within the fair value hierarchy. The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2021 and December 31, 2020, are as follows:


	Carrying Value at				*Fair Value at**
	June 30,		December 31,		June 30,		December 31,
	2021		2020		2021		2020
4.64% Senior Notes due 2021	$	—	$	100,000	$	—	$	100,850
2.39% Senior Notes due 2021	$	—	$	150,000	$	—	$	150,695
3.09% Senior Notes due 2022	$	125,000	$	125,000	$	128,096	$	128,482
2.75% Senior Notes due 2023	$	200,000	$	200,000	$	206,306	$	206,204
3.24% Senior Notes due 2024	$	150,000	$	150,000	$	157,875	$	158,140
3.41% Senior Notes due 2025	$	375,000	$	375,000	$	401,150	$	403,025
3.03% Senior Notes due 2026	$	400,000	$	400,000	$	421,638	$	424,874
3.49% Senior Notes due 2027	$	250,000	$	250,000	$	266,929	$	271,198
4.25% Senior Notes due 2028	$	500,000	$	500,000	$	577,800	$	597,050
3.50% Senior Notes due 2029	$	500,000	$	500,000	$	549,350	$	570,450
2.60% Senior Notes due 2030	$	600,000	$	600,000	$	621,120	$	644,520
3.05% Senior Notes due 2050	$	500,000	$	500,000	$	506,450	$	540,050

____________________

*Senior Notes are classified as Level 2 within the fair value hierarchy. Fair value inputs include third-party calculations of the market interest rate of notes with similar ratings in similar industries over the remaining note terms.

For details on the fair value of the Company’s interest rate swaps, restricted cash and investments and contingent consideration, refer to Note 15.

14.NET INCOME (LOSS) PER SHARE INFORMATION

The following table ~~summarizes~~sets forth the ~~impact~~calculation of the ~~Company’s cash flow hedges on~~numerator and denominator used in the ~~results~~computation of ~~operations, comprehensive~~basic and diluted net income (loss) ~~and AOCIL~~per common share attributable to the Company’s shareholders for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

Derivatives

Statement of

Amount of (Gain) or Loss Reclassified
Designated as Cash

Amount of Gain or (Loss) Recognized

Net Income

from AOCIL into Earnings,
Flow Hedges

as AOCIL on Derivatives, Net of Tax ^(a)

Classification

Net of Tax ^(b)

Three Months Ended

Three Months Ended

September 30,

September 30,


2020

2019



2020

2019
Interest rate swaps

$
1,357

$
(11,379)

Interest expense

$
2,126

$
(1,451)


Derivatives					Statement of	Amount of (Gain) or Loss Reclassified
Designated as Cash	Amount of Gain or (Loss) Recognized				Net Income	from AOCIL into Earnings,
Flow Hedges	as AOCIL on Derivatives, Net of Tax ^(a)				Classification	Net of Tax ^(b), (c)
	Nine Months Ended					Nine Months Ended
	September 30,					September 30,				Three Months Ended				Six Months Ended
	2020		2019			2020		2019		June 30,				June 30,
Interest rate swaps	$	(50,014)	$	(41,761)	Interest expense	$	3,377	$	(5,085)
										2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Waste Connections for basic and diluted earnings per share										$	177,047	$	(227,072)	$	337,356	$	(84,037)
Denominator:
Basic shares outstanding											260,951,405		262,994,275		261,791,088		263,390,685
Dilutive effect of equity-based awards											467,168		—		478,512		—
Diluted shares outstanding											261,418,573		262,994,275		262,269,600		263,390,685

~~____________________~~

~~(a)~~

In accordance with the derivatives and hedging guidance, the changes in fair values of interest rate swaps have been recorded in equity as a component of AOCIL. As the critical terms of the interest rate swaps match the underlying debt being hedged, all unrealized changes in fair value are recorded in AOCIL.

~~(b)~~Amounts reclassified from AOCIL into earnings related to realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the Company’s hedged debt.

~~See Note 17 for further discussion on the impact of the Company’s hedge accounting to its consolidated comprehensive income (loss) and AOCIL.~~

~~14.~~15.FAIR VALUE ~~OF FINANCIAL INSTRUMENTS~~MEASUREMENTS

The ~~Company’s financial instruments consist primarily of cash~~Company uses a three-tier fair value hierarchy to classify and ~~equivalents, trade receivables, restricted cash~~disclose all assets and investments, trade payables, debt instruments, contingent consideration obligations and interest rate swaps. As of September 30, 2020 and December 31, 2019, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are consideredliabilities measured at fair value on a recurring basis in periods subsequent to ~~be representative of~~ their ~~respective fair values. The carrying values of the Company’s debt instruments, excluding certain notes~~initial measurement. These tiers include: Level 1, defined as ~~listed~~quoted market prices in ~~the table below, approximate their fair values as of September 30, 2020 and December 31, 2019, based on current borrowing rates, current remaining average life to maturity and borrower credit quality~~active markets for ~~similar types of borrowing arrangements, and are classified as~~identical assets or liabilities; Level 2, ~~within the fair value hierarchy. The carrying values and fair values of the Company’s debt instruments~~defined as inputs other than Level 1 that

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

~~where the carrying values do not approximate their fair values as of September 30, 2020 and December 31, 2019, are as follows:~~

Carrying Value at

Fair Value* at

September 30,

December 31,

September 30,

December 31,


2020

2019

2020

2019
4.64% Senior Notes due 2021

$
100,000

$
100,000

$
101,590

$
102,654
2.39% Senior Notes due 2021

$
150,000

$
150,000

$
150,928

$
149,823
3.09% Senior Notes due 2022

$
125,000

$
125,000

$
128,623

$
126,884
2.75% Senior Notes due 2023

$
200,000

$
200,000

$
205,995

$
201,121
3.24% Senior Notes due 2024

$
150,000

$
150,000

$
157,976

$
153,804
3.41% Senior Notes due 2025

$
375,000

$
375,000

$
402,757

$
389,127
3.03% Senior Notes due 2026

$
400,000

$
400,000

$
424,805

$
406,768
3.49% Senior Notes due 2027

$
250,000

$
250,000

$
271,516

$
259,789
4.25% Senior Notes due 2028

$
500,000

$
500,000

$
600,300

$
562,050
3.50% Senior Notes due 2029

$
500,000

$
500,000

$
568,850

$
533,500
2.60% Senior Notes due 2030

$
600,000

$
—

$
648,060

$
—
3.05% Senior Notes due 2050

$
500,000

$
—

$
525,200

$
—

~~____________________~~

*Senior Notes are classified as Level 2 within the fair value hierarchy. Fair value is based on quotes of bonds with similar ratings in similar industries.

~~For details on the fair value of the Company’s interest rate swaps, restricted cash and investments and contingent consideration, refer to Note 16.~~

~~15.~~~~NET INCOME PER SHARE INFORMATION~~

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s shareholders for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended

Nine Months Ended

September 30,

September 30,


2020

2019

2020

2019
Numerator:

Net income attributable to Waste Connections for basic and diluted earnings per share

$
158,049

$
159,109

$
74,012

$
433,579
Denominator:

Basic shares outstanding

262,998,317

263,853,681

263,253,087

263,768,258
Dilutive effect of equity-based awards

509,169

733,775

464,914

705,087
Diluted shares outstanding

263,507,486

264,587,456

263,718,001

264,473,345

~~16.~~~~FAIR VALUE MEASUREMENTS~~

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets

~~Table of Contents~~

~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted cash and investments. At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps. The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts. The Company verifies the reasonableness of these quotes using similar quotes from another financial institution as of each date for which financial statements are prepared. For the Company’s interest rate swaps, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position and the counterparties’ creditworthiness in its determination of the fair value measurement of these instruments in a net asset position. The Company’s restricted cash and investments are valued at quoted market prices in active markets for similar assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted cash and investments measured at fair value are invested primarily in money market accounts, bank time deposits, U.S. government and agency securities and Canadian bankers’ acceptance notes.

The Company’s assets and liabilities measured at fair value on a recurring basis at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, were as follows:


	Fair Value Measurement at September 30, 2020 Using								Fair Value Measurement at June 30, 2021 Using
			Quoted Prices in		Significant						Quoted Prices in		Significant
			Active Markets		Other		Significant				Active Markets		Other		Significant
			for Identical		Observable		Unobservable				for Identical		Observable		Unobservable
			Assets		Inputs		Inputs				Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Interest rate swap derivative instruments – net liability position	$	(103,254)	$	—	$	(103,254)	$	—	$	(70,349)	$	—	$	(70,349)	$	—
Restricted cash and investments	$	143,931	$	—	$	143,931	$	—	$	170,107	$	—	$	170,107	$	—
Contingent consideration	$	(88,522)	$	—	$	—	$	(88,522)	$	(68,029)	$	—	$	—	$	(68,029)


	Fair Value Measurement at December 31, 2019 Using								Fair Value Measurement at December 31, 2020 Using
			Quoted Prices in		Significant						Quoted Prices in		Significant
			Active Markets		Other		Significant				Active Markets		Other		Significant
			for Identical		Observable		Unobservable				for Identical		Observable		Unobservable
			Assets		Inputs		Inputs				Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Interest rate swap derivative instruments – net liability position	$	(39,802)	$	—	$	(39,802)	$	—	$	(94,689)	$	—	$	(94,689)	$	—
Restricted cash and investments	$	147,318	$	—	$	147,318	$	—	$	155,176	$	—	$	155,176	$	—
Contingent consideration	$	(69,484)	$	—	$	—	$	(69,484)	$	(71,736)	$	—	$	—	$	(71,736)

2524

Table of Contents

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Nine Months Ended September 30,				Six Months Ended June 30,
	2020		2019		2021		2020
Beginning balance	$	69,484	$	54,615	$	71,736	$	69,484
Contingent consideration recorded at acquisition date		3,677		1,003		1,512		3,327
Payment of contingent consideration recorded at acquisition date		(2,812)		(1,621)		(5,595)		(2,251)
Payment of contingent consideration recorded in earnings						(520)		—
Adjustments to contingent consideration		16,852		1,466		89		16,794
Interest accretion expense		1,422		1,383		821		841
Foreign currency translation adjustment		(101)		108		(14)		(181)
Ending balance	$	88,522	$	56,954	$	68,029	$	88,014

~~See Note 5 regarding non-recurring fair value measurements.~~

~~17.~~16.OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) includes changes in the fair value of interest rate swaps that qualify for hedge accounting. The components of other comprehensive income (loss) and related tax effects for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are as follows:


	Three Months Ended September 30, 2020						Three Months Ended June 30, 2021
	Gross		Tax Effect		Net of Tax		Gross		Tax Effect		Net of Tax
Interest rate swap amounts reclassified into interest expense	$	2,893	$	(767)	$	2,126	$	5,061	$	(1,341)	$	3,720
Changes in fair value of interest rate swaps		1,846		(489)		1,357		(6,257)		1,658		(4,599)
Foreign currency translation adjustment		45,886		—		45,886		32,973		—		32,973
	$	50,625	$	(1,256)	$	49,369	$	31,777	$	317	$	32,094


	Three Months Ended September 30, 2019						Three Months Ended June 30, 2020
	Gross		Tax Effect		Net of Tax		Gross		Tax Effect		Net of Tax
Interest rate swap amounts reclassified into interest expense	$	(1,974)	$	523	$	(1,451)	$	2,142	$	(568)	$	1,574
Changes in fair value of interest rate swaps		(15,482)		4,103		(11,379)		(11,867)		3,145		(8,722)
Foreign currency translation adjustment		(24,911)		—		(24,911)		83,093		—		83,093
	$	(42,367)	$	4,626	$	(37,741)	$	73,368	$	2,577	$	75,945


	Nine Months Ended September 30, 2020						Six Months Ended June 30, 2021
	Gross		Tax Effect		Net of Tax		Gross		Tax Effect		Net of Tax
Interest rate swap amounts reclassified into interest expense	$	4,595	$	(1,218)	$	3,377	$	9,857	$	(2,612)	$	7,245
Changes in fair value of interest rate swaps		(68,047)		18,033		(50,014)		14,482		(3,838)		10,644
Foreign currency translation adjustment		(55,738)		—		(55,738)		61,027		—		61,027
	$	(119,190)	$	16,815	$	(102,375)	$	85,366	$	(6,450)	$	78,916


	Nine Months Ended September 30, 2019						Six Months Ended June 30, 2020
	Gross		Tax Effect		Net of Tax		Gross		Tax Effect		Net of Tax
Interest rate swap amounts reclassified into interest expense	$	(6,918)	$	1,833	$	(5,085)	$	1,702	$	(451)	$	1,251
Changes in fair value of interest rate swaps		(56,818)		15,057		(41,761)		(69,893)		18,522		(51,371)
Foreign currency translation adjustment		60,404		—		60,404		(101,624)		—		(101,624)
	$	(3,332)	$	16,890	$	13,558	$	(169,815)	$	18,071	$	(151,744)

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(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

A rollforward of the amounts included in AOCIL, net of taxes, for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, is as follows:


			Foreign		Accumulated				Foreign		Accumulated
			Currency		Other				Currency		Other
	Interest		Translation		Comprehensive		Interest		Translation		Comprehensive
	Rate Swaps		Adjustment		Income (Loss)		Rate Swaps		Adjustment		Income (Loss)
Balance at December 31, 2019	$	(29,255)	$	18,292	$	(10,963)
Balance at December 31, 2020							$	(69,596)	$	68,945	$	(651)
Amounts reclassified into earnings		3,377		—		3,377		7,245		—		7,245
Changes in fair value		(50,014)		—		(50,014)		10,644		—		10,644
Foreign currency translation adjustment		—		(55,738)		(55,738)		—		61,027		61,027
Balance at September 30, 2020	$	(75,892)	$	(37,446)	$	(113,338)
Balance at June 30, 2021							$	(51,707)	$	129,972	$	78,265


			Foreign		Accumulated				Foreign		Accumulated
			Currency		Other				Currency		Other
	Interest		Translation		Comprehensive		Interest		Translation		Comprehensive
	Rate Swaps		Adjustment		Income (Loss)		Rate Swaps		Adjustment		Income (Loss)
Balance at December 31, 2018	$	8,892	$	(83,678)	$	(74,786)
Balance at December 31, 2019							$	(29,255)	$	18,292	$	(10,963)
Amounts reclassified into earnings		(5,085)		—		(5,085)		1,251		—		1,251
Changes in fair value		(41,761)		—		(41,761)		(51,371)		—		(51,371)
Foreign currency translation adjustment		—		60,404		60,404		—		(101,624)		(101,624)
Balance at September 30, 2019	$	(37,954)	$	(23,274)	$	(61,228)
Balance at June 30, 2020							$	(79,375)	$	(83,332)	$	(162,707)

See Note 1312 for further discussion on the Company’s derivative instruments.

~~18.~~~~SHAREHOLDERS’ EQUITY~~

~~Share-Based Compensation~~

~~Employee Share Purchase Plan~~

On May 15, 2020, the Company’s shareholders approved the 2020 Employee Share Purchase Plan (the “ESPP”). Under the ESPP, qualified employees may elect to have payroll deductions withheld from their eligible compensation on each payroll date in amounts equal to or greater than 1 percent (1%) but not in excess of 10 percent (10%) of eligible compensation in order to purchase the Company’s common shares under certain terms and subject to certain restrictions set forth in the ESPP. The exercise price is equal to 95% of the closing price of the Company’s common shares on the last day of the relevant offering period; provided, however, that such exercise price will not be less than 85% of the volume weighted average price of the Company’s common shares as reflected on the Toronto Stock Exchange (the “TSX”) over the final five trading days of such offering period. The maximum number of shares that may be issued under the ESPP is 1,000,000. As of September 30, 2020, NaN of the Company’s common shares have been purchased under the ESPP.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

17.SHAREHOLDERS’ EQUITY

Share-Based Compensation

Restricted Share Units

A summary of activity related to restricted share units (“RSUs”) during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020,~~2021, is presented below:


		Unvested Shares
Outstanding at December 31, ~~2019~~2020		~~861,012~~772,625
Granted		~~326,045~~454,151
Forfeited		~~(33,181)~~(38,222)
Vested and issued		~~(375,368)~~(341,176)
Outstanding at ~~September~~June 30, ~~2020~~2021		~~778,508~~847,378

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020~~2021 was ~~$101.80.~~$97.81.

Recipients of the Company’s RSUs who participate in the Company’s Nonqualified Deferred Compensation Plan may have elected in years prior to 2015 to defer some or all of their RSUs as they vest until a specified date or dates they choose. At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs. At September 30, 2020 and 2019, the Company had 178,119 and 247,999 vested deferred RSUs outstanding, respectively.

~~Performance-Based Restricted Share Units~~

~~A summary of activity related to performance-based restricted share units (“PSUs”) during the nine-month period ended September 30, 2020, is presented below:~~


		~~Unvested Shares~~
~~Outstanding at December 31, 2019~~		~~504,484~~
~~Granted~~		~~211,987~~
~~Forfeited~~		~~(727)~~
~~Vested and issued~~		~~(281,186)~~
~~Outstanding at September 30, 2020~~		~~434,558~~

During the nine months ended September 30, 2020, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2022. During the same period, the Company’s Compensation Committee also granted PSUs with a one-year performance-based metric that the Company must meet before those awards may be earned, with the awards then subject to time-based vesting for the remaining three years of their four-year vesting period. The Compensation Committee will determine the achievement of performance results and corresponding vesting of PSUs for each performance period. The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the nine-month period ended September 30, 2020 was $87.19.

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(Unaudited)

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to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs. At June 30, 2021 and 2020, the Company had 101,221 and 186,932 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

A summary of activity related to performance-based restricted share units (“PSUs”) during the six-month period ended June 30, 2021, is presented below:


		Unvested Shares
Outstanding at December 31, 2020		434,558
Granted		116,784
Forfeited		(5,048)
Vested and issued		(154,251)
Outstanding at June 30, 2021		392,043

During the six months ended June 30, 2021, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2023. The Compensation Committee will determine the achievement of performance results and corresponding vesting of PSUs for each performance period. The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the six-month period ended June 30, 2021 was $96.99.

Deferred Share Units

A summary of activity related to deferred share units (“DSUs”) during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020,~~2021, is presented below:


		Vested Shares
Outstanding at December 31, ~~2019~~2020		~~18,970~~21,586
Granted		~~2,616~~2,856
Outstanding at ~~September~~June 30, ~~2020~~2021		~~21,586~~24,442

The DSUs consist of a combination of DSU grants outstanding under the Progressive Waste share-based compensation plans that were continued by the Company following the Progressive Waste acquisition and DSUs granted by the Company since the Progressive Waste acquisition. The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020~~2021 was ~~$103.81.~~$99.80.

Other Restricted Share Units

RSU grants outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon

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(Unaudited)

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vesting. A summary of activity related to Progressive Waste RSUs during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020,~~2021, is presented below:


Outstanding at December 31, ~~2019~~2020		~~73,884~~66,554
Cash settled		~~(7,330)~~(1,318)
Outstanding at ~~September~~June 30, ~~2020~~2021		~~66,554~~65,236

NaN RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016. All remaining RSUs were vested as of March 31, 2019.

Share Based Options

Share based options outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting. A summary of activity related to Progressive Waste share based options during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2020,~~2021, is presented below:


Outstanding at December 31, ~~2019~~2020		~~126,161~~51,200
Cash settled		~~(74,461)~~(3,631)
Outstanding at ~~September~~June 30, ~~2020~~2021		~~51,700~~47,569

NaN share based options under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016. All outstanding share based options were vested as of December 31, 2017.

Employee Share Purchase Plan

On May 15, 2020, the Company’s shareholders approved the 2020 Employee Share Purchase Plan (the “ESPP”). Under the ESPP, qualified employees may elect to have payroll deductions withheld from their eligible compensation on each payroll date in amounts equal to or greater than 1 percent (1%) but not in excess of 10 percent (10%) of eligible compensation in order to purchase the Company’s common shares under certain terms and subject to certain restrictions set forth in the ESPP. The exercise price is equal to 95% of the closing price of the Company’s common shares on the last day of the relevant offering period, subject to certain restrictions. The maximum number of shares that may be issued under the ESPP is 1,000,000. As of June 30, 2021, NaN of the Company’s common shares have been purchased under the ESPP.

Normal Course Issuer Bid

On July 23, 2020, the Board of Directors of the Company approved, subject to receipt of regulatory approvals, the annual renewal of the Company’s normal course issuer bid (the “NCIB”) to purchase up to 13,144,773 of the Company’s

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

common shares during the period of August 10, 2020 to August 9, 2021 or until such earlier time as the NCIB is completed or terminated at the option of the Company. The renewal followed the conclusion of the Company’s NCIB that expired August 7, 2020. The Company received ~~TSX~~Toronto Stock Exchange (the “TSX”) approval for its annual renewal of the NCIB on August 5, 2020. Under the NCIB, the Company may make share repurchases only in the open market, including on the New York Stock Exchange (the “NYSE”), the TSX, and/or alternative Canadian trading systems, at the prevailing market price at the time of the transaction.

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(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

In accordance with TSX rules, any daily repurchases made through the TSX and alternative Canadian trading systems is limited to a maximum of 112,638 common shares, which represents 25% of the average daily trading volume on the TSX of 450,555 common shares for the period from February 1, 2020 to July 31, 2020. The TSX rules also allow the Company to purchase, once a week, a block of common shares not owned by any insiders, which may exceed such daily limit. The maximum number of shares that can be purchased per day on the NYSE will be 25% of the average daily trading volume for the four calendar weeks preceding the date of purchase, subject to certain exceptions for block purchases.

The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including the Company’s capital structure, the market price of the common shares and overall market conditions. All common shares purchased under the NCIB shall be immediately cancelled following their repurchase.

For the ~~nine~~six months ended ~~September~~June 30, 2021, the Company repurchased 2,745,990 common shares pursuant to the NCIB at an aggregate cost of $305,640. During the six months ended June 30, 2020, the Company repurchased 1,271,977 common shares pursuant to the NCIB at an aggregate cost of $105,654. ~~During the nine months ended September 30, 2019, the Company did not repurchase~~ ~~any~~ ~~common shares pursuant to the NCIB.~~ As of ~~September~~June 30, ~~2020,~~2021, the remaining maximum number of shares available for repurchase under the current NCIB was ~~11,912,497.~~10,398,783.

Cash Dividend

In October ~~2019,~~2020, the Company announced that its Board of Directors increased its regular quarterly cash dividend by ~~$0.025,~~$0.02, from ~~$0.16~~$0.185 to ~~$0.185~~$0.205 per Company common share. Cash dividends of ~~$145,921~~$107,330 and ~~$126,348~~$96,912 were paid during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~19.~~18.COMMITMENTS AND CONTINGENCIES

In the normal course of its business and as a result of the extensive governmental regulation of the solid waste and E&P waste industries, the Company is subject to various judicial and administrative proceedings involving Canadian regulatory authorities as well as U.S. federal, state and local agencies. In these proceedings, an agency may subpoena the Company for records, or seek to impose fines on the Company or revoke or deny renewal of an authorization held by the Company, including an operating permit. From time to time, the Company may also be subject to actions brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of landfills, transfer stations, and E&P waste treatment, recovery and disposal operations, or alleging environmental damage or violations of the permits and licenses pursuant to which the Company operates. The Company uses $1,000 as a threshold (up from the previously required threshold of $300) for disclosing environmental matters involving potential monetary sanctions.

In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the Company’s business. Except as noted in the matters described below, as of ~~September~~June 30, ~~2020,~~2021, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

Lower Duwamish Waterway Superfund Site Allocation Process

In November 2012, the Company’s subsidiary, Northwest Container Services, Inc. (“NWCS”), was named by the U.S. Environmental Protection Agency, Region 10 (the “EPA”) as a potentially responsible party (“PRP”), along with more than 100 others, under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or the “Superfund” law) with respect to the Lower Duwamish Waterway Superfund Site (the “LDW Site”). Listed on the National Priorities List in 2001, the LDW Site is a five-mile stretch of the Duwamish River flowing into Elliott Bay in

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Seattle, Washington. A group of PRPs known as the Lower Duwamish Working Group (“LDWG”) and consisting of the City of Seattle, King County, the Port of Seattle, and Boeing Company conducted a Remedial Investigation/Feasibility Study for the LDW Site. On December 2, 2014, the EPA issued its Record of Decision (the “ROD”) describing the selected clean-up remedy, and therein estimated that clean-up costs (in present value dollars as of November 2014) would total approximately $342,000. However, it is possible that additional costs could be incurred based upon various factors. The EPA estimates that it will take seven years to implement the clean-up. The ROD also requires ten years of monitoring following the clean-up, and provides that if clean-up goals have not been met by the end of this period, then additional clean-up activities, at additional cost, may be required at that time. Implementation of the clean-up will not begin until after the ongoing Early Action Area (“EAA”) clean-ups have been completed. Typically, costs for monitoring may be in addition to those expended for the clean-up. While three of the EAA clean-ups have been completed to date, some work remains to be done on three other EAAs. Implementation of the clean-up also must await additional baseline sampling throughout the LDW Site and the preparation of a remedial design for performing the clean-up. On April 27, 2016, the LDWG entered into a third amendment of its Administrative Order on Consent with the EPA (the “AOC 3”) in which it agreed to perform the additional baseline sediment sampling and certain technical studies needed to prepare the actual remedial design. The LDWG and the EPA entered into a fourth amendment to the AOC in July 2018 primarily addressing development of a proposed remedy for the upper reach of the LDW Site, river mile 3 to river mile 5. At the April 24, 2019 stakeholders meeting the LDWG projected completion of the remedial design for the upper reach could be completed by August 2024. In late September 2020, the EPA informed attorneys for several PRPs that the work may be completed by late 2023 or early 2024.

On August 16, 2016, the EPA sent individual letters to each of the PRPs for the LDW Site, including NWCS, stating that it expected to initiate negotiations with all PRPs in early 2018 relating to a Remedial Design/Remedial Action (“RD/RA”) Consent Decree. An RD/RA Consent Decree provides for the cleanup of the entire site and is often referred to as a “global settlement.” In August 2014, NWCS entered into an Alternative Dispute Resolution Memorandum of Agreement with several dozen other PRPs and a neutral allocator to conduct a confidential and non-binding allocation of certain past response costs allegedly incurred at the LDW Site as well as the anticipated future response costs associated with the clean-up. ~~The pre-remedial design work under the AOC 3 was not expected to conclude until the end of 2019, and in~~In March 2017, the PRPs provided the EPA with notice that the allocation was not scheduled to conclude until mid-2019. Later extensions pushed the allocation conclusion date first to early 2020 and ~~the EPA was informed of that schedule. The allocation participants voted in June 2019 to extend the final allocation report deadline~~then to July 2020. The EPA was informed of ~~that change. In January 2020, the~~those changes. The allocator ~~informed the parties that the~~issued his preliminary allocation report ~~will be delayed and in May 2020 he advised the parties that he hoped to issue the preliminary report by the end of~~on June ~~2020, but the report has not yet been issued.~~28, 2021. The final allocation report will be issued only after the allocator considers comments of the parties on the preliminary report. ~~In June 2017, attorneys for the EPA informed attorneys for several PRPs that the EPA expected~~Due to begin RD/RA negotiations in the late summer or early fall of 2018. Those negotiations did not occur. In September 2020, the EPA informed attorneys for several PRPs that the EPA intends to initiate settlement negotiations in 2021, and the EPA was informed of the delay in the issuance of the preliminary allocation ~~report.~~report, the EPA indicated that settlement negotiations are expected to begin in 2022. NWCS is defending itself vigorously in this confidential allocation process. At this point, the Company is not able to determine the likelihood of the allocation process being completed as intended by the participating PRPs, its specific allocation, or the likelihood of the parties then negotiating a global settlement with the EPA. Thus, NWCS cannot reasonably determine the likelihood of any outcome in this matter, including its potential liability.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

On February 11, 2016, NWCS received a letter (the “Letter”) from the United States Department of Commerce, National Oceanic and Atmospheric Administration (“NOAA”), describing certain investigatory activities conducted by the Elliott Bay Trustee Council (the “Council”). The Council consists of all of the natural resources trustees for the LDW Site as well as two nearby Superfund sites, the Harbor Island site and the Lockheed West site. The members of the Council include the United States, on behalf of the U.S. National Oceanic and Atmospheric Administration and the U.S. Department of the Interior, the Washington State Department of Ecology, and the Suquamish and Muckleshoot Indian Tribes (together, the “Trustees”). The Letter appears to allege that NWCS may be a potentially liable party that allegedly contributed to the release of hazardous substances that have injured natural resources at the LDW Site. Damages to natural resources are in addition to clean-up costs. The Letter, versions of which NWCS believes were sent to all or a group of the PRPs for the LDW Site, also notified its recipients of their opportunity to participate in the Trustees’ development of an Assessment Plan and the performance of a Natural Resources Damages Assessment (“NRDA”) in accordance with the Assessment Plan for both the LDW Site and the east and west waterways of the Harbor Island site. NWCS timely

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responded with correspondence to the NOAA Office of General Counsel, in which it declined the invitation at that time. NWCS does not know how other PRPs responded to the Letter, and has not received any further communication from NOAA or the Trustees. The Trustees have not responded to NWCS’ letter. The Trustees released their Assessment Plan in March 2019. The Assessment Plan does not set forth a timeline for implementation. At this point, the Company is not able to determine the likelihood or amount of an assessment of natural resource damages against NWCS in connection with this matter.

Los Angeles County, California Landfill Expansion Litigation

Chiquita Canyon, LLC Lawsuit Against Los Angeles County

In October 2004, the Company’s subsidiary, Chiquita Canyon, LLC (“CCL”), then under prior ownership, filed an application (the “Application”) with the County of Los Angeles (the “County”) Department of Regional Planning (“DRP”) for a conditional use permit (the “CUP”) to authorize the continued operation and expansion of the Chiquita Canyon Landfill (the “Landfill”). The Landfill has operated since 1972, and as a regional landfill, accepted ~~approximately~~over 2 million tons of materials for disposal and beneficial use in ~~2018.~~2020. The Application requested expansion of the existing waste footprint on CCL’s contiguous property, an increase in maximum elevation, creation of a new entrance and new support facilities, construction of a facility for the County or another third-party operator to host household hazardous waste collection events, designation of an area for mixed organics/composting, and other modifications.

After many years of reviews and delays, upon the recommendation of County staff, the County’s Regional Planning Commission (the “Commission”) approved the Application on April 19, 2017, but imposed operating conditions, fees and exactions that substantially reduce the historical landfill operations and represent a large increase in aggregate taxes and fees. CCL objected to many of the requirements imposed by the Commission. Current estimates for new costs imposed on CCL under the CUP are in excess of $300,000.

CCL appealed the Commission’s decision to the County Board of Supervisors, but the appeal was not successful. At a subsequent hearing, on July 25, 2017, the Board of Supervisors approved the CUP. On October 20, 2017, CCL filed in the Superior Court of California, County of Los Angeles a verified petition for writ of mandate and complaint against the County and the County Board of Supervisors captioned Chiquita Canyon, LLC v. County of Los Angeles, No. BS171262 (Los Angeles Co. Super Ct.) (the “Complaint”). The Complaint challenges the terms of the CUP in 13 counts generally alleging that the County violated multiple California and federal statutes and California and federal constitutional protections. CCL seeks the following relief: (a) an injunction and writ of mandate against certain of the CUP’s operational restrictions, taxes and fees, (b) a declaration that the challenged conditions are unconstitutional and in violation of state and federal statutes, (c) reimbursement for any such illegal fees paid under protest, (d) damages, (e) an award of just compensation for a taking, (f) attorney fees, and (g) all other appropriate legal and equitable relief.

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~~WASTE CONNECTIONS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

~~On December 6, 2017,~~Extensive motions practice and an interlocutory appeal occurred in 2018 and 2019 over the ~~County filed a demurrer to and motion to strike regarding portions~~permissible scope of the Complaint, arguing that the Complaint was legally insufficient to proceed. After full briefing, the hearing on the demurrer and motion to strike regarding CCL’s First Amended Complaint took place on July 17, 2018. The Superior Court sustained the demurrer and granted the motion to strike. The effect of the Court’s rulings was to bar CCL from proceeding with its challenges to 14 of the 29 CUP conditions at issue in the litigation, including 13 operational conditions and CCL’s challenge to the ~~$11,600 B&T Fee discussed below.~~CUP, specifically 13 operational conditions in the CUP. The Superior Court granted CCL leave to amend its Complaint if CCL chose to pay the $11,600 B&T fee to allow a challenge to the B&T fee to proceed under the Mitigation Fee Act. CCL paid the $11,600 B&T fee on August 10, 2018 and filed its Second Amended Complaint on August 16, 2018, reflecting that the B&T fee had been paid under protest and allowing the challenges to the B&T fee to go forward.

On September 14, 2018, CCL sought discretionary review by the California Court of Appeal of the Superior Court’s July 17, 2018 decision barring the challenge to 13 operational conditions. The Court of Appeal agreed to hearruled in CCL’s appeal and on February 25, 2019, the Court of Appeal issued its decision, reversing the trial court orders that granted the County’s motion to strike and demurrer. The Court of Appeal ruled that CCL had adequately pled a claim that the County was equitably estopped from contending that CCL had forfeited its rights to challenge the legality of the 13 operational conditions. CCL’s Complaint sets forth that CCL relied on representations made by the County in 2017 that CCL could reserve its legal rights to challenge the CUP in a separate reservation of rights letter rather than the affidavit of acceptance of the CUP that the County compelled Chiquita to file.

The Superior Court set an evidentiary hearing on the equitable estoppel issues for November 12, 2019. Discovery occurred on these issues in July through September 2019. Following full briefing and oral argument on November 12, 2019, the Superior Court issued its decisionfavor on November 13, 2019, finding that the County was estopped from contending that CCL has waived its rights to challenge the legality of the 13 operational conditions. The County sought interlocutory review of the Superior Court’s decision in the Court of Appeal, which denied the County’s petition on February 7, 2020.

Following full briefing and oral argument on June 22, 2020 on six of CCL’s causes of action, the Superior Court issued its decision on July 2, 2020, granting CCL’s petition for writ of mandate in part and denying it in part. CCL prevailed with respect to 12 of the challenged conditions, many of which imposed new fees and exactions on the Landfill. Before entry of final judgment, the Superior Court will hear CCL’s remaining causes of action. A trial on CCL’s remaining causes of action is scheduled for August 1, 2022. A cause of action for a taking under the Fifth Amendment of the U.S.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Constitution is the subject of a pending motion for leave to amend the ~~Complaint. CCL is awaiting assignment to an individual calendar court for its remaining causes of action.~~Complaint and will be heard by the Superior Court on September 15, 2021. Once the Superior Court has entered final judgment, CCL and the County will be permitted to appeal any adverse ruling to the California Court of Appeal. After entry of final judgment and resolution of any appeals, the Superior Court will issue a writ directing the County Board of Supervisors to set aside its decision on the permit with respect to 12 of the challenged conditions. The Board will be allowed to make additional findings to support four of those conditions and reconsider its permit decision in light of the Superior Court’s writ. CCL will continue to vigorously prosecute the lawsuit. However, at this point, the Company is not able to determine the likelihood of any outcome in this matter.

~~CEQA Lawsuit Against Los Angeles County Challenging Environmental Review for Landfill Expansion~~

A separate lawsuit involving CCL and the Landfill was filed on August 24, 2017 by community activists alleging that the environmental review underlying the CUP was inadequate under state law. The Val Verde Civic Association, Citizens for Chiquita Canyon Landfill Compliance, and the Santa Clarita Organization for Planning and the Environment filed a petition for writ of mandate in the Superior Court of California, County of Los Angeles against the County, naming CCL as the real party in interest. The lawsuit seeks to overturn the County’s approval of the CUP for the expansion of the Landfill and the certification of the final Environmental Impact Report, arguing that the report violates the California Environmental Quality Act. Pursuant to Condition No. 6 of the CUP, which requires CCL to defend, indemnify, and hold harmless the County, its agents, officers, and employees from any claim or proceeding against the County brought by any

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

third party to attack, set aside, void, or annul the CUP approval, CCL agreed to reimburse the County for its legal costs associated with defense of the lawsuit. As the real party in interest, CCL has a right to notice and an opportunity to be heard in opposition to the petition for writ of mandate. Initial briefs were filed in 2018 and a trial date was set in February 2019, which was later rescheduled and held in August 2019. The court issued a final ruling on October 10, 2019 and a final judgment on December 4, 2019, denying the writ petition in full. One petitioner, Santa Clarita Organization for Planning and the Environment, appealed the judgment. All interested parties filed their briefs by July 1, 2020 and the County did not file an opposition brief. No amicus or “friend of the court” briefs were filed, so the case was fully briefed on July 1, 2020. The court has set oral argument for November 18, 2020.

December 11, 2017 Notice of Violation Regarding Certain CUP Conditions.

The County, through its DRP, issued a Notice of Violation, dated December 11, 2017 (the “NOV”), alleging that CCL violated certain conditions of the CUP, including Condition 79(B)(6) of the CUP by failing to pay an $11,600 Bridge & Thoroughfare Fee (“B&T Fee”) that was purportedly due on July 25, 2017. The alleged B&T fee was ostensibly to fund the construction of transportation infrastructure in the area of the Landfill. At the time the NOV was issued, CCL had already contested the legality of the B&T fee in the October 20, 2017 Complaint filed against the County in Los Angeles County Superior ~~Court.~~Court, described above under paragraph A (the “CUP lawsuit”).

On January 12, 2018, CCL filed an appeal of the alleged violations in the NOV. Subsequently, CCL filed additional legal arguments and exhibits contesting the NOV. On March 6, 2018, a DRP employee designated as hearing officer sustained the NOV, including the $11,600 B&T fee, and imposed an administrative penalty in the amount of $83 and a noncompliance fee of $0.75. A written decision memorializing the hearing officer’s findings and order ~~dated~~was issued on July 10, ~~2018, was received by CCL on July 12,~~ 2018. On April 13, 2018, CCL filed in the Superior Court of California, County of Los Angeles a Petition for Writ of Administrative Mandamus against the County seeking to overturn the decision sustaining the NOV, contending that the NOV and decision are not supported by the facts or law. On June 22, 2018, Chiquita filed a Motion for Stay seeking to halt enforcement of the B&T fee and penalty and the accrual of any further penalties pending the resolution of the Petition for Writ of Mandamus. The motion was heard and denied by the Court on July 17, ~~2018. As explained above,~~2018, the Court granted CCL leave to pay the $11,600 B&T fee and to amend its Complaint in the CUP lawsuit to reflect the payment under protest, allowing the challenge to the B&T fee under the Mitigation Fee Act to ~~proceed.~~proceed in the CUP lawsuit. CCL paid the B&T fee under protest on August 10, 2018, and also paid on that date the administrative penalty of $83 and a noncompliance fee of $0.75. ~~As directed by the Court, CCL amended its Complaint in a Second Amended Complaint filed in the CUP action on August 16, 2018.~~ The Court indicated that the NOV case would ~~likely~~ be ~~tried in conjunction~~coordinated with the CUP lawsuit. The NOV case has been continued multiple times as the CUP lawsuit was adjudicated; it is now set for ~~June~~trial on January 18, 2019, and that the cases would be coordinated. At the May 28, 2019 trial setting conference referenced above where the trial of the CUP case was set for April 23, 2020, the Superior Court set the trial for the B&T fee/NOV case for June 25, 2020. However, following the rescheduling of the trial date for the CUP case, the Superior Court agreed to continue the trial date for the B&T fee/NOV case to October 20, 2020. At an August 20, 2020 status conference, the Superior Court again continued the trial date for the B&T fee/NOV case to January 14, 2021.2022. The Superior Court’s July 2, 2020 decision in the CUP ~~case~~lawsuit upheld the B&T fee against a Mitigation Fee Act challenge, and addressed two other conditions that were also the subject of the NOV, which may impact the scope of the B&T fee/NOV case. CCL will continue to vigorously prosecute the lawsuit. However, at this point, the Company is not able to determine the likelihood of any outcome in this matter.

~~Town of Colonie, New York Landfill Expansion Litigation~~19.

On April 16, 2014, the Town of Colonie (the “Town”) filed an application (the “Application”) with the New York State Department of Environmental Conservation (“DEC”) to modify the Town’s then-current Solid Waste Management Facility Permit and for other related permits to authorize the development and operation of Area 7 of the Town of Colonie Landfill (the “Landfill”), which is located in Albany County, New York. DEC issued the requested permits on April 5,

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)~~

2018 (the “Permits”). The Company’s subsidiary, Capital Region Landfills, Inc. (“CRL”), has been the sole operator of the Landfill since September 2011 pursuant to an operating agreement between CRL and the Town.

On May 7, 2018, the Town of Halfmoon, New York, and five of its residents, commenced an Article 78 special proceeding in the Supreme Court of the State of New York, Saratoga County, against DEC, the Town, CRL, and the Company (the “Halfmoon Proceeding”). On that same date, the Town of Waterford, New York, and eleven of its residents, also commenced an Article 78 special proceeding in the Supreme Court of the State of New York, Saratoga County, against the same respondents (the “Waterford Proceeding”). On June 4, 2018, the Town and CRL filed Verified Answers, including motions to dismiss the petitions, and the Company separately moved to dismiss the petitions. The Waterford Petitioners stipulated to removing the Company as a respondent when they filed an Amended Verified Petition on June 15, 2018. The Halfmoon Petitioners served an Amended Verified Petition on July 5, 2018, retaining all originally named parties, including the Company.

The Petitioners alleged that, in granting the Permits, DEC failed to comply with the procedural and substantive requirements of New York’s Environmental Conservation Law and State Environmental Quality Review Act, and their implementing regulations. The Petitioners asked the court to: annul the Permits and invalidate DEC’s Findings Statement, enjoin the Town and CRL from taking any action authorized by the Permits, require an issues conference and possibly an adjudicatory hearing before DEC can re-consider the Town’s permit application; remand all regulatory issues to a DEC Administrative Law Judge; and award costs and disbursements. The Waterford Petitioners also requested reasonable attorneys’ fees.SUBSEQUENT EVENTS

On July ~~13, 2018,~~27, 2021, the ~~Honorable Ann C. Crowell granted a venue change motion filed by DEC, and ordered~~Company’s Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of its NCIB. The renewal is expected to commence following the conclusion of the Company’s current NCIB expiring August 9, 2021. Upon approval, the Company anticipates that ~~the Halfmoon Proceeding and the Waterford Proceeding~~it will be ~~transferred~~authorized to the Supreme Court, Albany County. CRL’s opposition submissions, including its responsive pleadings, Memorandum of Law, and supporting Affidavits, were filed and served on or before July 25, 2018. On August 28, 2018, the Towns of Waterford and Halfmoon filed a motion seeking an order preliminarily enjoiningmake purchases during the ~~pendency~~period of August 10, 2021 to August 9, 2022 or until such earlier time as the NCIB is completed or terminated at the Company’s option.

See Note 10 for a discussion of the ~~proceedings all activities relating to the expansion of the Landfill~~Company’s Second Amended and Restated Revolving Credit and Term Loan Agreement, which ~~are authorized by the Permits. On September 18, 2018, CRL and the Company filed and served Memoranda of Law in opposition to the preliminary injunction motion, with supporting Affidavits, and,~~became effective on September 24, 2018, the Towns of Waterford and Halfmoon filed a Reply Memorandum of Law in further support of their injunctive motion. The Honorable Debra J. Young denied the Petitioners’ motion for preliminary injunction on NovemberJuly 30, ~~2018.~~

On January 23, 2019, the court held that the Petitioners lacked standing to maintain the proceedings and dismissed both the Waterford and Halfmoon Amended Verified Petitions in their entirety. In late February and early March 2019, the Waterford and Halfmoon Petitioners filed notices of appeal to the Appellate Division, Third Department, of both Judge Crowell’s decision to transfer the proceedings to Albany County and of Judge Young’s dismissal of the Amended Verified Petitions.

On March 7, 2019, the Waterford Petitioners moved, with consent of the Halfmoon Petitioners, to consolidate the appeals. Respondents opposed the consolidation motion to the extent that it may result in inequitable briefing under the Appellate Division rules. On April 4, 2019, the Appellate Division, Third Department granted the consolidation motion “to the extent that the appeals shall be heard together and may be perfected upon a joint record on appeal.”

On April 26, 2019, the Waterford Petitioners filed a motion with the Appellate Division, Third Department, seeking an order preliminarily enjoining construction activities or the acceptance of waste at the Landfill. The Company, CRL, and the Town of Colonie opposed the motion, which was summarily denied by the Third Department, Appellate Division on June 20, 2019.2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

On ~~June 25, 2019, the Waterford Petitioners filed their appellate brief and the joint record on appeal. The Halfmoon Petitioners filed their appellate brief on~~ August 21, 2019. The Company, CRL, and the Town filed their joint appellee brief and supplemental appendix on November 20, 2019. On February 24, 2020, after receiving multiple filing extensions, DEC filed its appellee brief and supplemental appendix. The Waterford and Halfmoon Petitioners filed their reply briefs on March 10, 2020 and March 13, 2020, respectively.

The Appellate Division, Third Department originally scheduled the appeals to be argued during the court’s May 2020 term. The appeals were adjourned as a result of the COVID-19 pandemic. On September 14, 2020, the Appellate Division, Third Department held virtual oral argument in the appeals. The Company anticipates that the Appellate Division, Third Department will issue a decision in the appeals by the end of 2020 or shortly thereafter.

~~20.~~~~SUBSEQUENT EVENT~~

~~On October 28, 2020,~~4, 2021, the Company announced that its Board of Directors ~~increased its regular quarterly cash dividend by $0.02, from $0.185 to $0.205 per Company common share, and then declared~~approved a regular quarterly cash dividend of $0.205 per Company common share. The dividend will be paid on ~~November 25, 2020,~~September 1, 2021, to shareholders of record on the close of business on ~~November 10, 2020.~~August 18, 2021.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

~~Certain~~The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We make statements ~~contained~~ in this Quarterly Report on Form 10-Q that are forward-looking in nature, including statements related to the impact of global economic conditions, including the price of crude oil, on our volume, business and results of operations; the impact of the COVID-19 pandemic on our business, financial condition and results of operations; our ability to generate internal growth or expand permitted capacity at landfills we own or operate; our ability to grow through acquisitions and our expectations with respect to the impact of acquisitions on our expected revenues and expenses following the integration of such businesses; the competitiveness of our industry and how such competition may affect our operating results; the possibility of losing contracts through competitive bidding, early termination or governmental action; the effects of financial difficulties of some of our customers, including governmental entities, affecting their credit risk; our ability to provide adequate cash to fund our operating activities; our ability to draw from our credit facility or raise additional capital; our ability to generate free cash flow and reduce our leverage; the impact on our tax positions of changes in U.S. tax law and future changes in tax laws in the jurisdictions in which we operate; the effects of landfill special waste projects on volume results; the impact that price increases may have on our business and operating results; demand for recyclable commodities and recyclable commodity pricing; the effects of seasonality on our business and results of operations; our ability to obtain additional exclusive arrangements; increasing alternatives to landfill disposal; increases in labor and pension plan costs or the impact that labor union activity may have on our operating results; operational and safety risks, including the risk of personal injury to employees and others; our expectations with respect to the purchase of fuel and fuel prices; our expectations with respect to capital expenditures; our expectations with respect to the outcomes of our legal proceedings; the impairment of our goodwill; insurance costs; disruptions to or breaches of our information systems and other cybersecurity threats; and environmental, health and safety laws and regulations, including changes to the regulation of landfills, solid waste disposal, E&P waste disposal, or hydraulic fracturing. nature. These include:

●

Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, landfill alternatives and related capital expenditures;

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Discussion of competition, loss of contracts, price increases and additional exclusive and/or long-term collection service arrangements;

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Forecasts of cash flows necessary for operations and free cash flow to reduce leverage as well as our ability to draw on our credit facility and access the capital markets to refinance or expand;

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Statements regarding our ability to access capital resources or credit markets at all or on favorable terms;

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Plans for, and the amounts of, certain capital expenditures for our existing and newly acquired properties and equipment;

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Statements regarding fuel, oil and natural gas demand, prices, and price volatility;

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Assessments of regulatory developments and potential changes in environmental, health, safety and tax laws and regulations; and

●

Other statements on a variety of topics such as the COVID-19 pandemic, credit risk of customers, seasonality, labor/pension costs and labor union activity, operational and safety risks, acquisitions, litigation results, goodwill impairments, insurance costs and cybersecurity threats.

These statements can be ~~identified~~‎identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “might,” “will,” ~~“could,~~‎‎“could,” “should” or “anticipates,” or the negative thereof or comparable terminology, or by discussions of strategy.

Our ~~business~~‎business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ ~~materially~~‎materially from those projected by any forward-looking statements. Factors that could cause actual results to differ ~~from~~‎from those projected include, but are not limited to, ~~those listed above and elsewhere~~risk factors detailed from time to time in ~~this report and in~~ our ~~other~~ filings with the SEC ~~as well as~~and the securities commissions or similar regulatory authorities in ~~our filings during the year with the Canadian Securities Administrators.~~ Canada.

There may be additional risks of which we are not presently aware or that we currently believe are immaterial ~~which could~~that ‎could have an adverse impact on our business. We make no commitment to revise or update any forward-looking ~~statements in order~~‎statements to reflect events or circumstances that may ~~change.~~change, unless required under applicable securities laws.

OVERVIEW OF OUR BUSINESS

We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, along with recycling and resource recovery, in mostly exclusive and secondary markets across 4243 states in the U.S. and six provinces in Canada. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

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We generally seek to avoid highly competitive, large urban markets and instead target markets where we can attain high market share either through exclusive contracts, vertical integration or asset positioning. In markets where waste collection services are provided under exclusive arrangements, or where waste disposal is municipally owned or funded or available at multiple municipal sources, we believe that controlling the waste stream by providing collection services under exclusive arrangements is often more important to our growth and profitability than owning or operating landfills. We also target niche markets, like E&P waste treatment and disposal services.

As of ~~September~~June 30, ~~2020,~~2021, we served residential, commercial, industrial and E&P customers in 4243 states in the U.S. and six provinces in Canada: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon,

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Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming, and the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

The solid waste industry is local and highly competitive in nature, requiring substantial labor and capital resources. ~~The participants~~We compete for collection accounts primarily on the basis of price and, to a lesser extent, the quality of service, and compete for landfill business on the basis of tipping fees, geographic location and quality of operations. The solid waste industry has been consolidating and continues to consolidate as a result of a number of factors, including the increasing costs and complexity associated with waste management operations and regulatory compliance. Many small independent operators and municipalities lack the capital resources, management, operating skills and technical expertise necessary to operate effectively in such an environment. The consolidation trend has caused solid waste companies to operate larger landfills that have complementary collection routes that can use company-owned disposal capacity. Controlling the point of transfer from haulers to landfills has become increasingly important as landfills continue to close and disposal capacity moves farther from the collection markets it serves.

Generally, the most profitable operators within the solid waste industry are those companies that are vertically integrated or enter into long-term collection contracts. A vertically integrated operator will benefit from: (1) the internalization of waste, which is bringing waste to a company-owned landfill; (2) the ability to charge third-party haulers tipping fees either at landfills or at transfer stations; and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.

The E&P waste services industry is regional in nature and is also highly fragmented, with acquisition opportunities available in several active natural resource basins. Competition for E&P waste comes primarily from smaller regional companies that utilize a variety of disposal methods and generally serve specific geographic markets, and other solid waste companies. In addition, customers in many markets have the option of using internal disposal methods or outsourcing to another third-party disposal company. The principal competitive factors in this business include: gaining customer approval of treatment and disposal facilities; location of facilities in relation to customer activity; reputation; reliability of services; track record of environmental compliance; ability to accept multiple waste types at a single facility; and price.

~~The~~ demand for our E&P waste services depends on the continued demand for, and production of, oil and natural gas. Crude oil and natural gas prices historically have been volatile. Macroeconomic and geopolitical conditions, including a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, have resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for our E&P waste services. Through June 30, 2020, we maintained a separate E&P segment which was combined with our Southern segment on July 1, 2020. During the nine months ended September 30, 2020, our total E&P revenue declined 36%, compared to the prior year period, on rig count declines of 72% in certain basins. The most impacted basins included the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which had relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico. Additionally, across the industry there is uncertainty regarding future demand for oil and related services, as noted by several energy companies, many of whom are customers of our E&P operations. These companies have written down the values of their oil and gas assets in anticipation of the potential for the decarbonization of their energy product mix given an increased global focus on reducing greenhouse gases and addressing climate change. Such uncertainty regarding global demand has had a significant impact on the investment and operating plans of our E&P waste customers in the basins where we operate. ~~Based on these events~~If the prices of crude oil and natural gas substantially decline, it could lead to declines in the ~~outlook for future drilling~~level of production activity and ~~resulting~~ demand for our E&P waste services, ~~not showing significant improvement, we concluded that~~which could result in the ~~carrying value~~recognition of additional impairment charges on our intangible assets and property and equipment ~~at four~~associated with our E&P ~~landfills exceeded their estimated fair value, resulting in an impairment charge of $417.4 million being recorded during the nine months ended September 30, 2020.~~operations. See Note 5 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for a ~~further~~ discussion of ~~this~~the impairment ~~charge.~~charge recorded during the six months ended June 30, 2020.

THE COVID-19 PANDEMIC’S IMPACT ~~OF COVID-19~~ ON OUR RESULTS OF OPERATIONS

~~During~~March 11, 2021 marked the ~~first quarter~~one year anniversary of ~~2020,~~ COVID-19 ~~emerged across North America. The World Health Organization~~being declared ~~COVID-19~~ a global pandemic ~~on March 11, 2020.~~by the World Health Organization. The related economic disruptions largely associated with closures or restrictions put into effect following the onset of the COVID-19 pandemic resulted in declines in solid waste commercial collection, transfer station and landfill volumes, and roll off activity. Throughout the remaining fiscal year 2020, solid waste revenue and reported volumes largely reflected the pace and shape of the closures and subsequent reopening activity, with the timing and magnitude of

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recovery varying by market. Reported solid waste volumes in 2020 turned slightly negative in the first quarter, were most negative in the second quarter, and showed sequential improvement during the second half of the year, finishing the year at negative 3.1% in the fourth quarter. In the first quarter of 2021, the final period to include comparisons to pre-COVID-19 activity levels on a year over year basis, solid waste volumes were down 3.2%. In the second quarter of 2021, solid waste volumes increased sequentially by 9.6% to up 6.5% on a year over year basis, with positive volumes in all regions.

The COVID-19 pandemic ~~has had adverse impacts on our business since March 2020, when we experienced decreasing revenues associated with declines primarily~~also contributed to the decline in ~~commercial collection, transfer station~~demand for and landfill volumes as a result of COVID-19 economic disruptions. In addition, and to a lesser extent, solid waste roll off revenue was impacted in some markets, and year-over-year reductions in E&P revenue, resulting primarily from the drop in the value of crude oil, ~~were driven by both surplus production~~which impacted E&P drilling activity and ~~supply, as well as~~resulted in lower E&P waste revenue, with the decrease in demand caused by factors including the COVID-19 pandemic. In late February we formed a task force to commence preparedness in the event the scope of the COVID-19 outbreak expanded. Protecting the health, safety and welfare of our employees was and remains our first priority, which led to our introduction of various health and safety protocols in early March, including the distribution of safety and preparedness updates, revised policies on employee time off, leaves of absence and short-term disability, modifications to our operations to minimize community spread of COVID-19, and enhanced resources to enable remote working, communications and digital connectivity to help non-frontline employees workquarterly run rate decreasing from ~~home more efficiently.~~

In recognition of the Company’s status as an essential services provider, and to reduce employee concerns regarding income, healthcare and family obligations, we implemented a supplemental pay bonus for frontline employees representing 80% of our workforce, emergency wages for employees out of work due to COVID-19 and extended benefits coverage in markets where reductions in customer activity have impacted employee hours. In addition, we expanded our Employee Relief Fund and initiated the Waste Connections Scholarship Program to help employee children achieve their vocational, technical and university education goals. These actions increased our cost of operations nominallyapproximately $60 million in the first quarter ~~and further impacted the second and third quarters~~ of 2020 ~~as discussed below. We also implemented a number of measures~~ to reduce our operating costs and preserve cash, which included hiring limitations, wage freezes for all managers and region and corporate personnel, restrictions on travel, group meetings and other discretionary spending, andapproximately $25 million through the suspension of the Company’s 401(k) match effective June 1, 2020. In addition, we began and intend to continue deferring qualified U.S. payroll and other tax payments as permitted by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which the U.S. government enacted on March 27, 2020. Through the thirdfirst quarter of ~~2020, we deferred $29.4~~2021. E&P waste revenue increased sequentially by $6.5 million in payroll taxes in conjunction with the CARES Act of which 50% are due by December 31, 2021 and 50% are due by December 31, 2022. To the extent available, we may utilize similar programs being offered by the federal and provincial governments in Canada. With respect to ~~our liquidity and capital resources, as of September 30, 2020, we had $859.1~~$31.2 million ~~of cash and equivalents and $1.258 billion of remaining borrowing capacity under our Credit Agreement, which matures~~ in ~~March 2023.~~

~~During~~ the second quarter of ~~2020, our business was impacted by COVID-19 due to a reduction~~2021 on increased drilling activity in revenue primarily in solid waste commercial collection, roll off activity and solid waste transfer and disposal resulting from a slowdown in activity associated with shelter-in-place or other closure restrictions or requirements imposed in response toseveral active shale basins.

Since the onset of the COVID-19 pandemic. Commercial collection activity slowed down in certain markets due to service reductions or suspensions by customers whose business activity was curtailed by such measures, with third party transferpandemic, protecting the health, welfare and disposal volumes and roll off activity typically following similar patterns, and some of the declines in E&P waste activity may also be related to COVID-19. The impacts to solid waste activity that we experienced during the second quarter varied by geography, the size and customer mix in each market, and the timing and extent of shutdown requirements and reopening policies across markets. In some markets, the impacts abated during the second quarter, as reopenings resulted in increased service requirements by commercial customers and higher landfill volumes and roll off activity; in other cases, where reopenings were delayed or more limited, the improvements were less pronounced.

Through the second quarter of 2020, about 53% of solid waste commercial customers and 42% of associated revenue in competitive markets we track that had suspended or reduced service due to COVID-19, had since reached out for either a resumption of service or an increase in frequency. Volumes in allsafety of our ~~solid waste regions exceeded~~employees has been our ~~initial expectations, resulting~~top priority. Recognizing the potential for financial hardship and other challenges, we looked to provide a safety net for our employees on issues of income and family health. To that end, in ~~solid waste revenue down 5.3% on a same store basis~~2020, we incurred over $35 million in ~~the quarter, about 0.7 percentage points better than the expectations we provided~~incremental COVID-19-related costs, primarily supplemental pay for frontline employees. We continue to support our employees and their families, with certain costs continuing in May. Moreover, excluding the most impacted markets in the Northeast and Canada, where closures were widespread and volumes were most impacted, solid waste revenues were down only 1.3% year over year on a same store basis.

~~During the third quarter of 2020, our business continued to be impacted by COVID-19,~~2021, albeit to a lesser extent than in the prior ~~period in many markets. Revenue in solid waste commercial collection~~year, as employee COVID-19 cases and solid waste transfer and disposal continued to reflect the extent to which the slowdown in activity associated with shelter-in-place or other closure restrictions or requirements in effect since the first quarter of 2020 have persisted.

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~~The~~related impacts to solid waste activity from COVID-19 that we experienced during the third quarter reflected the pace of reopening activity and varied by geography, the size and customer mix in each market. In some markets, impacts began to abate in the second quarter, when a portion of the lost volumes returned; in other cases, the impacts of the pandemic abated more during the third quarter, when reopenings resulted in increased service requirements by commercial customers and higher landfill volumes and roll off activity. In markets where reopenings continue to be delayed or where additional restrictions have been imposed, the improvements were less pronounced.

Through the third quarter, about 68% of solid waste commercial customers and 57% of associated revenue in competitive markets we track that had suspended or reduced service due to COVID-19, had since reached out for either a resumption of service or an increase in frequency, an increase from 53% and 42%, respectively, through the second quarter. As a result, solid waste collection, transfer and disposal revenue was down 2.0% year over year on a same store basis in the third quarter, but was an improvement of 3.3 percentage points from second quarter 2020 revenue, which was down 5.3% year over year.

are similarly abating. The impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows in future periods will depend largely on future developments, including the duration and spread of the outbreak in the U.S. and Canada, ~~its~~the rate of vaccinations, the severity of COVID-19 variants, the actions to contain ~~the novel~~such coronavirus ~~or treat its impact,~~variants, and how quickly and to what extent normal economic and operating conditions can resume.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the condensed consolidated financial statements. As described by the SEC, critical accounting estimates and assumptions are those that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on the financial condition or operating performance of a company. Such critical accounting estimates and assumptions are applicable to our reportable segments. Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions.

NEW ACCOUNTING PRONOUNCEMENTS

For a description of the new accounting standards that affect us, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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RESULTS OF OPERATIONS FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~2021 AND ~~2019~~2020

The following table sets forth items in our Condensed Consolidated Statements of Net Income (Loss) in thousands of U.S. dollars and as a percentage of revenues for the periods indicated.


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019				2021				2020				2021				2020
Revenues	$	1,389,552	100.0	%	$	1,412,444	100.0	%	$	4,047,739	100.0	%	$	4,026,719	100.0	%	$	1,533,931	100.0	%	$	1,305,782	100.0	%	$	2,929,874	100.0	%	$	2,658,187	100.0	%
Cost of operations		828,822	59.6			835,098	59.1			2,429,957	60.0			2,384,607	59.2			901,191	58.8			785,710	60.2			1,727,111	59.0			1,601,134	60.2
Selling, general and administrative		136,003	9.8			137,883	9.8			404,213	10.0			410,132	10.2			157,943	10.3			132,158	10.1			299,365	10.2			268,210	10.1
Depreciation		157,590	11.3			157,994	11.2			459,641	11.4			461,616	11.5			169,221	11.0			151,230	11.6			326,624	11.2			302,051	11.4
Amortization of intangibles		32,653	2.4			31,934	2.3			96,062	2.4			93,821	2.3			32,707	2.1			31,771	2.4			64,899	2.2			63,409	2.4
Impairments and other operating items		3,805	0.3			12,935	0.9			442,582	10.9			32,949	0.8			6,081	0.4			437,270	33.5			6,715	0.2			438,777	16.5
Operating income		230,679	16.6			236,600	16.7			215,284	5.3			643,594	16.0
Operating income (loss)																		266,788	17.4			(232,357)	(17.8)			505,160	17.2			(15,394)	(0.6)

Interest expense		(40,636)	(2.9)			(36,780)	(2.6)			(119,562)	(2.9)			(111,313)	(2.8)			(41,328)	(2.7)			(40,936)	(3.1)			(83,753)	(2.9)			(78,926)	(3.0)
Interest income		903	0.1			2,056	0.1			4,396	0.1			7,186	0.2			744	0.1			1,317	0.1			1,848	0.1			3,493	0.1
Other income (expense), net		702	0.0			(19)	(0.0)			(3,046)	(0.1)			4,562	0.1			(1,235)	(0.1)			5,772	0.4			2,312	0.1			(3,749)	(0.1)
Income tax provision		(33,657)	(2.4)			(42,783)	(3.0)			(23,654)	(0.6)			(110,539)	(2.7)
Net income		157,991	11.4			159,074	11.2			73,418	1.8			433,490	10.8
Net loss attributable to noncontrolling interests		58	0.0			35	0.0			594	0.0			89	0.0
Net income attributable to Waste Connections	$	158,049	11.4	%	$	159,109	11.2	%	$	74,012	1.8	%	$	433,579	10.8	%
Income tax (provision) benefit																		(47,868)	(3.2)			38,737	3.0			(88,159)	(3.0)			10,003	0.4
Net income (loss)																		177,101	11.5			(227,467)	(17.4)			337,408	11.5			(84,573)	(3.2)
Net loss (income) attributable to noncontrolling interests																		(54)	(0.0)			395	0.0			(52)	0.0			536	0.0
Net income (loss) attributable to Waste Connections																	$	177,047	11.5	%	$	(227,072)	(17.4)	%	$	337,356	11.5	%	$	(84,037)	(3.2)	%

Revenues. Total revenues ~~decreased $22.8~~increased $228.1 million, or ~~1.6%~~17.5%, to ~~$1.390~~$1.534 billion for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$1.412~~$1.306 billion for the three months ended ~~September~~June 30, ~~2019.~~2020. Total revenues increased ~~$21.0~~$271.7 million, or ~~0.5%~~10.2%, to ~~$4.048~~$2.930 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$4.027~~$2.658 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

~~During the three months ended September 30, 2020, incremental revenue from acquisitions~~Acquisitions closed during or subsequent to the three months ended ~~September~~June 30, ~~2019,~~2020 increased revenues by ~~approximately $47.2 million. During~~$47.6 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020, incremental revenue from acquisitions~~2021. Acquisitions closed during or subsequent to the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020 increased revenues by ~~approximately $156.3 million.~~ $91.4 million for the six months ended June 30, 2021.

Operations that were divested subsequent to ~~September~~June 30, ~~2019~~2020 decreased revenues by ~~approximately $2.9~~$3.5 million and ~~$11.7~~$6.7 million, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

During the three months ended ~~September~~June 30, ~~2020,~~2021, the net increase in prices charged to our customers at our existing operations was ~~$49.1~~$60.9 million, consisting of ~~$53.8~~$58.3 million of core price increases ~~partially offset by a decrease in~~and surcharges of ~~$4.7~~$2.6 million. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the net increase in prices charged to our customers at our existing operations was ~~$168.0~~$113.1 million, consisting of ~~$173.9~~$114.2 million of core price increases, partially offset by a decrease in surcharges of ~~$5.9~~$1.1 million.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, volume ~~decreases~~increases in our existing business ~~decreased~~increased solid waste revenues by ~~$74.6~~$80.2 million and ~~$199.8~~$39.7 million, respectively, ~~due primarily to the economic disruptions~~as many of our markets benefitted from increased business activity resulting from ~~COVID-19 that began~~reductions in March 2020 and have continued throughout the third quarter of 2020. The decreases during the nine months ended September 30, 2020 resulting from COVID-19 were partially offset by increased landfill special waste volumes in certain markets and the impact of one additional business day resulting from leap year.COVID-19-related restrictions.

E&P revenues at facilities owned during the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ decreased ~~$42.8~~$4.4 million and ~~$75.2~~$39.1 million, respectively. Decreases in the demand for crude oil commenced in March 2020 as a result of

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economic disruptions from the COVID-19 ~~resulted~~pandemic, resulting in ~~a drop in the value of crude oil,~~ decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services. ~~Drilling and production activity was also adversely impacted by~~

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the drop in the value of crude oil due to the increased supply of oil resulting from Saudi Arabia and Russia abandoning production quotas and increasing production levels, which was exacerbated by the impact of COVID-19.

~~A decrease~~An increase in the average Canadian dollar to U.S. dollar currency exchange rate resulted in ~~a decrease~~an increase in revenues of ~~$1.6~~$20.5 million and ~~$9.6~~$30.9 million, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The average Canadian dollar to U.S. dollar exchange rates on our Canadian revenues were ~~0.7511~~0.8147 and ~~0.7573~~0.7226 in the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The average Canadian dollar to U.S. dollar exchange rates on our Canadian revenues were ~~0.7399~~0.8030 and ~~0.7524~~0.7338 in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Revenues from sales of recyclable commodities at facilities owned during the three and six months ended ~~September~~June 30, 2021 and 2020 increased $18.0 million and 2019 increased $2.4 million. Revenues from sales of recyclable commodities at facilities owned during the nine months ended September 30, 2020 and 2019 decreased $2.5 million. Prices for old corrugated cardboard and volumes from increased residential collection increased in the second and third quarters of 2020, contributing$29.3 million, respectively, due primarily to ~~the increase in revenues for the three months ended September 30, 2020. Lower~~higher prices for old corrugated cardboard, inaluminum and other paper products, higher volumes collected from residential recycling customers and the ~~first quarter~~partial recovery during the three months ended June 30, 2021 of ~~2020, decreased~~ collected commercial recycling volumes ~~caused by~~which declined in the prior year period due to economic disruptions resulting from the COVID-19 ~~and decreased prices for plastic and aluminum contributed to the overall decrease in revenues for the nine months ended September 30, 2020.~~pandemic.

Other revenues increased ~~by $0.4~~$8.8 million during the three months ended ~~September~~June 30, ~~2020~~2021, due primarily to an $8.0 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas in our Canada segment and ~~decreased~~a $2.1 million increase in other non-core revenue sources, partially offset by ~~$4.5~~a $1.3 million decrease in intermodal revenues due primarily to customer losses that reduced intermodal cargo volumes. Other revenues increased $13.1 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020. The decrease for the nine months ended September 30, 2020 was~~2021 due primarily to a $14.1 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas at our Canada segment and a $2.4 million increase in other non-core revenue sources, partially offset by a $3.4 million decrease in intermodal revenues due primarily to customer losses resulting in a reduction in intermodal cargo volumes.

Cost of Operations. Total cost of operations ~~decreased $6.3~~increased $115.5 million, or ~~0.8%~~14.7%, to ~~$828.8~~$901.2 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$835.1~~$785.7 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase was primarily the result of ~~a decrease~~an increase in operating costs at our existing operations of ~~$31.7~~$81.3 million, assuming foreign currency parity, ~~a decrease in~~$24.6 million of additional operating costs ~~of $3.5 million at operations divested during, or~~from acquisitions closed subsequent to the three months ended ~~September~~June 30, ~~2019~~2020 and ~~a decrease of $0.9~~$11.6 million resulting from ~~a decrease~~an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by ~~$29.8 million of additional~~a decrease in operating costs ~~from acquisitions closed during, or~~of $2.0 million at operations divested subsequent to the three months ended ~~September~~June 30, ~~2019.~~2020.

The ~~decrease~~increase in operating costs of $81.3 million, assuming foreign currency parity, at our existing operations for the three months ended ~~September~~June 30, 2020 of $31.7 million, assuming foreign currency parity, included the following decreases totaling $27.6 million due to solid waste, intermodal and E&P volume losses resulting from the impact of COVID-19: a decrease in third-party disposal expenses of $6.7 million, a decrease in third-party trucking and transportation expenses of $6.0 million, a decrease in direct labor expenses at our E&P operations of $3.0 million due to headcount reductions, a decrease in equipment and facility maintenance and repair expenses of $2.8 million at our E&P operations, a decrease in direct labor expenses at our Eastern segment of $2.6 million due to headcount reductions, a decrease in expenses for processing recyclable commodities of $2.4 million due to a decrease in commercial recycling volumes collected, a decrease in intermodal rail expenses of $2.1 million and a decrease in subcontracted E&P operating expenses of $2.0 million.

~~The remaining decrease in operating costs at our existing operations of $4.1 million for the three months ended September 30, 2020~~2021, consisted of a decrease in fuel expense of $7.3 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in taxes on revenues of $4.9 million from the reversal of recorded liabilities for certain fees and exactions at Chiquita Canyon landfill due to our successful challenge of increases assessed in prior periods, a decrease in 401(k) matching expenses of $3.9 million as we suspended our 401(k) match as of June 1, 2020, a decrease in employee medical benefits expenses of $3.5 million due to a reduction in medical visits, a decrease in expenses for auto and workers’ compensation claims of $2.2 million due primarily to adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded in prior periods, a decreasean increase in labor expenses at our Canada segment of $1.7 million due to the receipt of a government subsidy reimbursing us for certain payroll expenditures remitted to our employees during the COVID-19 pandemic and a decrease in subcontracted hauling services at our solid waste operations of ~~$1.5~~$27.8 million due primarily to ~~the net impact of our Canada segment reversing expenses accrued in a prior period~~employee pay increases and ~~incurring less expenses in the current period associated with estimated equipment charge overages related~~headcount additions to ~~an outsourced collection contract exceeding~~support solid waste volume increases, an increase in third-party disposal expenses ~~at our Eastern segment associated with outsourcing the servicing~~ of ~~certain non-strategic collection customers to third party haulers,~~

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~~partially offset by an increase in other cash incentive compensation to non-management personnel of $8.5~~$15.1 million to recognize the services they are providing during the COVID-19 pandemic, an increase in labor expenses totaling $4.3 million at our Western and Central segments, and the solid waste operations of our Southern segment, due primarily to ~~annual pay increases,~~increased solid waste collection volumes, an increase in truck, container, equipment and facility maintenance and repair expenses of ~~$4.0~~$14.7 million atdue to parts and service rate increases and additional maintenance and repair requirements resulting from increased truck and equipment operating hours to support increases in our solid waste ~~operations due to cost increases and a higher quantity of large repairs,~~volumes, an increase ~~in landfill operating expenses of $1.2 million at our solid waste operations due primarily to increased gas system repairs and $2.9 million of other net expense increases.~~

Total cost of operations increased $45.4 million, or 1.9%, to $2.430 billion for the nine months ended September 30, 2020, from $2.385 billion for the nine months ended September 30, 2019. The increase was primarily the result of $98.3 million of additional operating costs from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, partially offset by a decrease in operating costs at our existing operations of $35.0 million, assuming foreign currency parity, a decrease in operating costs of $12.7 million at operations divested during, or subsequent to, the nine months ended September 30, 2019 and a decrease of $5.2 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

The decrease in operating costs at our existing operations for the nine months ended September 30, 2020 of $35.0 million, assuming foreign currency parity, included the following decreases totaling $57.0 million due to solid waste, intermodal and E&P volume losses resulting from the impact of COVID-19: a decrease in third-party disposal expenses of $18.3 million, a decrease in third-party trucking and transportation expenses of ~~$15.0~~$11.9 million ~~a decrease~~due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in ~~direct labor expenses at our Eastern segment~~diesel fuel expense of ~~$4.5~~$10.1 million due to ~~headcount reductions, a decrease~~higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, an increase in ~~equipment and facility maintenance and repair~~employee medical benefits expenses of $4.2 million at our E&P operations, a decrease in intermodal rail expenses of $4.1 million, a decrease in subcontracted E&P operating expenses of $3.6 million, a decrease in direct labor expenses at our E&P operations of $3.4$7.9 million due to headcount reductions, a decrease in expenses for processing recyclable commodities of $2.3 million due to a decrease in commercial recycling volumes collected and a decrease in revenue-based royalties paid by our E&P operations of $1.6 million.

~~The remaining increase in operating costs at our existing operations of $22.0 million for the nine months ended September 30, 2020 consisted of~~ an increase in ~~other cash incentive compensation to non-management personnel of $13.5 million to recognize the services they are providing during the COVID-19 pandemic,~~medical visits, an increase in ~~labor expenses totaling $13.4~~taxes on revenues of $6.5 million ~~at our Western and Central segments, and the solid waste operations of our Southern segment,~~ due primarily to annual pay increases and the impact of an additional working day during the nine months ended September 30, 2020, an increase of $11.5 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19,increased revenues in our solid waste markets, an increase in ~~truck, container, equipment and facility maintenance and repair expenses~~subcontracted hauling services at our solid waste operations of ~~$10.9~~$3.8 million due to ~~cost increases~~outsourcing the servicing of certain non-strategic contracts and ~~a higher quantity of large repairs,~~commercial collection customers to third party haulers, an increase in landfill maintenance, environmental compliance and daily cover expenses ~~for auto and workers’ compensation claims~~ of ~~$10.6~~$2.8 million due to increased compliance requirements under our landfill operating permits, an increase in 401(k) matching expenses of $1.7 million due to the prior year period reflecting less expenses due to a one month impact of the June 1, 2020 to December 31, 2020 suspension of our 401(k) match, an increase in insurance premium expenses of $1.3 million due primarily to ~~increases in our deductibles~~increased insurance premium costs for auto ~~claims, higher claims severity in the current year period~~ and adjustments recorded in the prior year period to decrease projected losses on outstanding claims originally recorded prior to 2019, an increase in leachate expense of $2.5 million due to higher precipitation in Floridaenvironmental compliance and increased leachate in landfill cells constructed in 2020, an increase in property tax expenses of $2.3 million due primarily to reassessed values of certain landfills and property acquired in recent acquisitions, an increase in landfill gas system repairs and maintenance expenses at our solid waste operations of $1.8 million and $2.9$0.5 million of other net expense increases, partially offset by a decrease in ~~fuel expense~~supplemental bonuses and other cash incentive compensation to non-management personnel of ~~$17.2~~$17.3 million due to ~~a decrease in~~ the ~~price of diesel fuel and declines in~~prior year period including non-recurring expenses to recognize services provided by our front-line employees during the volume of fuel used in our operations, a decrease in employee medical benefits expenses of $14.0 million due to a reduction in medical visits, a decrease in taxes on revenues of $4.9 million from the reversal of recorded liabilities for certain fees and exactions at Chiquita Canyon landfill due to our successful challenge of increases assessed in prior periods, a decrease in 401(k) matching expenses of $4.7 million as we suspended our 401(k) match as of June 1, 2020, a decrease in compressed natural gas expense of $2.0 million due primarily to the recognition in 2020 of tax credits associated with the purchase of compressed natural gas, a decrease in insurance premiums of $2.0 million due primarily to the net impact of credits from premium audits exceeding increases associated with auto and environmental policy renewals,COVID-19 pandemic, a decrease in labor ~~expenses~~ at our ~~Canada segment~~E&P operations of $1.7 million due to the receipt of a government subsidy reimbursing us for certain payroll expenditures remitted to our employees during the COVID-19 pandemic and a decrease in subcontracted hauling services at our solid waste operations of $0.9 million due primarily to the net impact of our Canada segment reversing expenses accrued in a prior period and incurring less expenses in the current period associated with estimated equipment chargeheadcount reductions resulting from disposal

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~~overages related to an outsourced collection contract exceeding an increase~~volume decreases, a decrease in ~~expenses at our Eastern segment associated with outsourcing the servicing of certain non-strategic collection customers to third party haulers.~~

Cost of operations as a percentage of revenues increased 0.5 percentage points to 59.6% for the three months ended September 30, 2020, from 59.1% for the three months ended September 30, 2019. The increase as a percentage of revenues consisted of a combined 1.3 percentage point increase from labor expenses, maintenance and repair expenses and recurring taxes on revenues ~~not declining~~of $1.6 million at ~~the same rate as the decline~~Chiquita Canyon landfill due to a reduction in our revenues at locations owned in the comparable periods due primarily to the economic disruptions resulting from COVID-19, a 0.6 percentage point increase resulting from the accrual of other cash incentive compensation to non-management personnel, a 0.2 percentage point increase from increased landfill site maintenance and repairs, a 0.2 percentage point increase from the net impact of cost of operations expenses from acquisitions closed during, or subsequent to, the three months ended September 30, 2019 and a 0.3 percentage point increase from all other net changes, partially offset by a 0.4 percentage point decrease from the reversal of recorded liabilities for certain fees and exactions resulting from our successful challenge of these expenses subsequent to June 30, 2020, a decrease in subcontracted operating and remediation services at ~~Chiquita Canyon landfill,~~our E&P operations of $1.2 million due to disposal volume decreases and a ~~0.4 percentage point~~ decrease ~~from lower diesel fuel~~in intermodal rail expenses ~~a 0.3 percentage point decrease from~~of $1.0 million due to customer losses resulting in a reduction in expenses for auto and workers’ compensation claims, a 0.3 percentage point decrease from lower trucking and transportation expenses, a 0.3 percentage point decrease from lower 401(k) match expenses, a 0.2 percentage point decrease from lower employee medical benefits expenses and a 0.2 percentage point decrease from lower subcontracted operating expenses.cargo volume.

Cost of operations as a percentage of revenues increased 0.8 percentage points to 60.0% for the nine months ended September 30, 2020, from 59.2% for the nine months ended September 30, 2019. The increase as a percentage of revenues consisted of a 0.6 percentage point increase from higher labor expenses, a 0.3 percentage point increase resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, a 0.3 percentage point increase from the net impact ofTotal cost of operations ~~expenses from acquisitions closed during,~~increased $126.0 million, or ~~subsequent~~7.9%, to $1.727 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2019, a 0.3 percentage point~~2021, from $1.601 billion for the six months ended June 30, 2020. The increase ~~resulting from~~was primarily the ~~accrual~~result of ~~other cash incentive compensation to non-management personnel, a 0.3 percentage point increase from higher maintenance and repair expenses, a 0.2 percentage point increase from~~ an increase in expenses for auto and workers’ compensation claims and a 0.2 percentage point increase from all other net changes, partially offset by a 0.4 percentage point decrease from lower diesel fuel expenses, a 0.4 percentage point decrease from lower trucking and transportation expenses, a 0.3 percentage point decrease from lower employee medical benefits expenses and a 0.3 percentage point decrease from lower disposal expenses.

~~SG&A~~. SG&A expenses decreased $1.9 million, or 1.4%, to $136.0 million for the three months ended September 30, 2020, from $137.9 million for the three months ended September 30, 2019. The decrease was comprised of a decline of $4.2 million in SG&A expensesoperating costs at our existing operations of $63.9 million, assuming foreign currency parity, $48.7 million of additional operating costs from acquisitions closed subsequent to the six months ended June 30, 2020 and ~~a decline of $0.2~~$17.4 million resulting from ~~a decrease~~an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by ~~$2.5~~a decrease in operating costs of $4.0 million at operations divested subsequent to the six months ended June 30, 2020.

The increase in operating costs of $63.9 million, assuming foreign currency parity, at our existing operations for the six months ended June 30, 2021, consisted of an increase in labor expenses at our solid waste operations of $26.7 million due primarily to employee pay increases and headcount additions to support solid waste volume increases, an increase in third-party disposal expenses of $12.2 million due primarily to increased solid waste collection volumes, an increase in third-party trucking and transportation expenses of $12.2 million due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in employee medical benefits expenses of $11.5 million due to an increase in medical visits, an increase in truck, container, equipment and facility maintenance and repair expenses of $10.7 million due primarily to parts and service rate increases, an increase in taxes on revenues of $8.9 million due primarily to increased revenues in our solid waste markets, an increase in diesel fuel expense of $7.4 million due to higher fuel prices, an increase in subcontracted hauling services at our solid waste operations of $6.3 million due to outsourcing the servicing of certain non-strategic contracts and commercial collection customers to third party haulers, an increase in landfill maintenance, environmental compliance and daily cover expenses of $3.3 million due to increased compliance requirements under our landfill operating permits, an increase in insurance premium expenses of $2.0 million due primarily to increased insurance premium costs for auto and environmental compliance, an increase in 401(k) matching expenses of $1.8 million due to the prior year period reflecting less expenses due to a one month impact of the June 1, 2020 to December 31, 2020 suspension of our 401(k) match and $0.4 million of other net expense increases, partially offset by a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel of $15.1 million due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, a decrease in expenses for auto and workers’ compensation claims of $8.1 million due primarily to higher claims severity in the prior year period and adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded prior to 2021, a decrease in labor at our E&P operations of $4.7 million due to headcount reductions resulting from disposal volume decreases, a decrease in taxes on revenues of $3.7 million at Chiquita Canyon landfill due to a reduction in certain fees and exactions resulting from our successful challenge of these expenses subsequent to June 30, 2020, a decrease in subcontracted operating and remediation services at our E&P operations of $3.4 million due to disposal volume decreases, a decrease in intermodal rail expenses of $2.8 million due to customer losses resulting in a reduction in cargo volume and a decrease in expenses for processing recyclable commodities in our Western segment of $1.7 million due to increased recyclable commodity values resulting in price reductions charged by third-party recycling processors.

Cost of operations as a percentage of revenues decreased 1.4 percentage points to 58.8% for the three months ended June 30, 2021, from 60.2% for the three months ended June 30, 2020. The decrease as a percentage of revenues consisted of a 1.4 percentage point decrease from a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel, a 0.5 percentage point decrease from leveraging existing personnel to support our solid waste revenue volume growth and a 0.2 percentage point decrease from all other net changes, partially offset by a 0.4 percentage point increase from higher employee medical expenses and a 0.3 percentage point increase from higher diesel fuel expenses.

Cost of operations as a percentage of revenues decreased 1.2 percentage points to 59.0% for the six months ended June 30, 2021, from 60.2% for the six months ended June 30, 2020. The decrease as a percentage of revenues consisted of a 0.6 percentage point decrease from a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel, a 0.4 percentage point decrease from a reduction in expenses for auto and workers’ compensation

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claims, a 0.3 percentage point decrease from leveraging existing personnel to support our solid waste revenue volume growth and a 0.2 percentage point decrease from all other net changes, partially offset by a 0.3 percentage point increase from higher employee medical expenses.

SG&A. SG&A expenses increased $25.7 million, or 19.5%, to $157.9 million for the three months ended June 30, 2021, from $132.2 million for the three months ended June 30, 2020. The increase was comprised of an increase of $20.7 million in SG&A expenses at our existing operations, assuming foreign currency parity, $3.0 million of additional SG&A expenses from operating locations at acquisitions closed ~~during, or~~ subsequent to the three months ended ~~September~~June 30, ~~2019.~~2020 and $2.2 million resulting from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease in SG&A expenses of $0.2 million at operations divested subsequent to the three months ended June 30, 2020.

The increase in SG&A expenses at our existing operations of $20.7 million, assuming foreign currency parity, for the three months ended June 30, 2021, was comprised of an increase in accrued recurring cash incentive compensation expense to our management of $9.5 million, a collective increase in travel, meeting, training and community activity expenses of $6.7 million due to event cancelation credits recognized in the prior year period and increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in equity-based compensation expenses of $5.3 million associated with an adjustment during the current year period of our common shares held in our deferred compensation plan by certain key executives to fair value as a result of the shares being exchanged for other investment options, an increase in equity-based compensation expenses of $2.3 million resulting primarily from adjustments to the amount of performance-based restricted share units granted in 2019 and 2020 that are estimated to ultimately vest based on the achievement of required financial performance results, an increase in employee medical benefits expenses of $2.2 million due to an increase in medical visits, an increase in administrative payroll expenses of $1.7 million due primarily to annual pay increases, an increase in employee relocation expenses of $1.1 million and $0.8 million of other net expense increases, partially offset by a decrease in expenses for uncollectible accounts receivable of $5.4 million primarily due to the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of the COVID-19 pandemic, a decrease in deferred compensation expenses of $1.4 million as a result of higher increases during the prior year period in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease of $1.1 million resulting from the prior year period including payments of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of the COVID-19 pandemic and a decrease in direct acquisition expenses of $1.0 million due to a decrease in acquisition activity in the comparable periods.

SG&A expenses increased $31.2 million, or 11.6%, to $299.4 million for the six months ended June 30, 2021, from $268.2 million for the six months ended June 30, 2020. The increase was comprised of an increase of $22.4 million in SG&A expenses at our existing operations, assuming foreign currency parity, $6.0 million of ~~$4.2~~additional SG&A expenses from operating locations at acquisitions closed subsequent to the six months ended June 30, 2020 and $3.2 million resulting from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease in SG&A expenses of $0.4 million at operations divested subsequent to the six months ended June 30, 2020.

The increase in SG&A expenses at our existing operations of $22.4 million, assuming foreign currency parity, for the ~~three~~six months ended ~~September~~June 30, ~~2020~~2021, was comprised of a collective decrease in travel, meeting, training and community activity expenses of $5.9 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in 401(k) matching expenses of $1.5 million as we suspended our 401(k) match as of June 1, 2020, a decrease in legal expenses of $1.3 million due to the impact of work on legal matters being postponed resulting from temporary court closures, a decrease in employee medical benefits expenses of $0.9 million due to a reduction in medical visits and $1.9 million of other net expense decreases, partially offset by an increase in ~~equity-based~~accrued recurring cash incentive compensation ~~expenses of $2.4 million resulting primarily from an increased value of our recurring grant of restricted and performance share units~~expense to our ~~personnel and adjustments to the amount~~management of ~~performance-based restricted share units granted in 2018 that are estimated to ultimately vest, an increase in share-based compensation expenses of $1.7~~$14.4 million, due primarily to increased share price volatility in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value, an increase in direct acquisition expenses of $1.3 million due to an increase in acquisition activity, an increase in deferred compensation expenses of ~~$1.2~~$4.2 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, ~~and~~ an increase in employee medical benefits expenses of ~~$0.7~~$3.5 million due to an increase in medical visits, an increase in professional fees of $2.2 million due primarily to adjustments recorded during the prior year period to reduce estimated accrued liabilities associated with unbilled legal services and increased expenses associated with professional tax services, an increase in equity-based compensation expenses of $2.0 million associated with ~~fair value~~the net impact of current and prior period adjustments ~~to Waste Connections, Inc.~~

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our common shares held in our deferred compensation plan by certain key executives to fair value as a result of the shares being exchanged for other investment ~~options.~~options, an increase in equity-based compensation expenses of $1.8 million resulting primarily from adjustments to the amount of performance-based restricted share units granted in 2019 and 2020 that are estimated to ultimately vest based on the achievement of required financial performance results, an increase in administrative payroll expenses of $1.1 million due primarily to annual pay increases and $2.5 million of other net expense

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increases, partially offset by a decrease in expenses for uncollectible accounts receivable of $6.4 million primarily due to the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of the COVID-19 pandemic, a decrease in direct acquisition expenses of $1.6 million due to a decrease in acquisition activity in the comparable periods and a decrease of $1.3 million resulting from the prior year period including payments of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of the COVID-19 pandemic.

SG&A as a percentage of revenues increased 0.2 percentage points to 10.3% for the three months ended June 30, 2021, from 10.1% for the three months ended June 30, 2020. The increase as a percentage of revenues consisted of a 0.5 percentage point increase from travel, meeting, training and community activity expenses, ~~decreased $5.9~~a 0.4 percentage point increase from higher accrued recurring cash incentive compensation expense to our management and a 0.3 percentage point increase from increased equity-based compensation expenses associated with the designation of our common shares held in our deferred compensation plan, partially offset by a 0.4 percentage point decrease from lower expenses for uncollectible accounts receivable, a 0.4 percentage point decrease from leveraging existing administrative headcount to support solid waste revenue increases and a 0.2 percentage point decrease from all other net changes.

SG&A as a percentage of revenues increased 0.1 percentage points to 10.2% for the six months ended June 30, 2021, from 10.1% for the six months ended June 30, 2020. The increase as a percentage of revenues consisted of a 0.4 percentage point increase from higher accrued recurring cash incentive compensation expense to our management, a 0.1 percentage point increase from higher benefits expenses and a 0.1 percentage point increase from increased equity-based compensation expenses associated with the designation of our common shares held in our deferred compensation plan, partially offset by a 0.3 percentage point decrease from leveraging existing administrative headcount to support solid waste revenue increases and a 0.2 percentage point decrease from lower expenses for uncollectible accounts receivable.

Depreciation. Depreciation expense increased $18.0 million, or ~~1.4%~~11.9%, to ~~$404.2~~$169.2 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$410.1~~$151.2 million for the ~~nine~~three months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase was comprised of ~~a decline~~an increase in depletion expense of ~~$14.2~~$7.9 million resulting from increased landfill municipal solid waste and special waste volumes, an increase in ~~SG&A expenses at~~depreciation expense of $4.8 million from the impact of additions to our fleet and equipment purchased to support our existing operations, ~~assuming foreign currency parity,~~depreciation and ~~a decline~~depletion expense of ~~$0.9~~$3.8 million from acquisitions closed subsequent to the three months ended June 30, 2020 and $2.4 million resulting from ~~a decrease~~an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by ~~$9.2~~a decrease in depreciation and depletion expense of $0.9 million ~~of additional SG&A expenses~~ from ~~operating locations at acquisitions closed during, or~~operations divested subsequent to the ~~nine~~three months ended ~~September~~June 30, ~~2019.~~2020.

Depreciation expense increased $24.5 million, or 8.1%, to $326.6 million for the six months ended June 30, 2021, from $302.1 million for the six months ended June 30, 2020. The ~~decrease~~increase was comprised of an increase in ~~SG&A expenses at~~depreciation expense of $9.8 million from the impact of additions to our fleet and equipment purchased to support our existing operations, ~~assuming foreign currency parity,~~depreciation and depletion expense of ~~$14.2~~$7.7 million ~~for~~from acquisitions closed subsequent to the ~~nine~~six months ended September 30, 2020 was comprised of a collective decrease in travel, meeting, training and community activity expenses of $18.3 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in direct acquisition expenses of $3.6 million due to a decline in acquisition activity, a decrease in employee medical benefits expenses of $3.6 million due to a reduction in medical visits, a decrease in professional fees of $3.0 million due primarily to work on legal matters being postponed resulting from temporary court closures and a decrease in third party tax consulting expenses, a decrease in deferred compensation expenses of $3.0 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease in share-based compensation expenses of $1.7 million due primarily to decreased share price volatility and fewer outstanding shares in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value, a decrease in office supplies and office utilities of $1.7 million due to office closures resulting from shelter at home restrictions, a decrease in 401(k) matching expenses of $1.5 million as we suspended our 401(k) match as of June 1, 2020 and $0.3 million of other net expense decreases, partially offset by an increase in expenses for uncollectible accounts receivable of $5.5 million due to customers experiencing financial difficulties resulting from the economic impact of COVID-19, an increase in accrued recurring cash incentive compensation expense to our management of $5.2 million, an increase of $4.0 million in equity-based compensation expenses associated with fair value adjustments to Company common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, an increase in payroll expenses of $3.2 million as a result of annual pay increases, additional paid time off benefits and the impact of an additional working day during the nine months ended September 30, 2020, an increase in ~~software licenses and subscriptions expenses~~depletion expense of ~~$2.3 million due primarily to the addition of new sales and customer service applications, an increase of $1.2~~$5.1 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19 and an increase in equity-based compensation expenses of $1.1 million resulting primarily from the impact of an increased ~~value of our recurring grant of restricted and performance share units to our personnel, net of adjustments to the amount of performance-based restricted share units estimated to ultimately vest.~~

SG&A expenses as a percentage of revenues was 9.8% for both the three months ended September 30, 2020 and 2019. The percentage of revenues impact from the reduction in travel, meeting, training and community activity expenses was offset by an increase from higher equity-based and share-based compensation expenses.

SG&A expenses as a percentage of revenues decreased 0.2 percentage points to 10.0% for the nine months ended September 30, 2020, from 10.2% for the nine months ended September 30, 2019. The decrease as a percentage of revenues consisted of a 0.4 percentage point decrease from a reduction in travel, meeting, training and community activity expenses, a 0.1 percentage point decrease from lower direct acquisition expenses, a 0.1 percentage point decrease from lower medical benefits expenses, a 0.1 percentage point decrease from lower deferred compensation expense, a 0.1 percentage point decrease from lower legal expenses and a 0.1 percentage point decrease from all other net changes, partially offset by a 0.3 percentage point increase associated with administrative salaries and wages, a 0.2 percentage point increase due to higher expenses for uncollectible accounts receivable and a 0.2 percentage point increase from higher cash incentive compensation expense.

~~Depreciation~~. Depreciation expense decreased $0.4 million, or 0.3%, to $157.6 million for the three months ended September 30, 2020, from $158.0 million for the three months ended September 30, 2019. The decrease was comprised of a decrease in depletion expense of $9.0 million at our existing landfills due primarily to economic disruptions resulting

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~~from COVID-19 causing a decrease in E&P and~~landfill municipal solid waste and special waste volumes and ~~a decrease of $0.2~~$3.6 million resulting from ~~a decrease~~an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by ~~an increase~~a decrease in depreciation and depletion expense of ~~$4.6~~$1.7 million from operations divested subsequent to the six months ended June 30, 2020.

Depreciation expense as a percentage of revenues decreased 0.6 percentage points to 11.0% for the three months ended June 30, 2021, from 11.6% for the three months ended June 30, 2020. Depreciation expense as a percentage of revenues decreased 0.2 percentage points to 11.2% for the six months ended June 30, 2021, from 11.4% for the six months ended June 30, 2020. The decreases as a percentage of revenues were primarily attributable to leveraging volume increases in our solid waste revenues.

Amortization of Intangibles. Amortization of intangibles expense increased $0.9 million, or 2.9%, to $32.7 million for the three months ended June 30, 2021, from $31.8 million for the three months ended June 30, 2020. The increase was the result of $2.5 million from intangible assets acquired in acquisitions closed ~~during, or~~ subsequent to the three months ended September 30, 2019 and an increase in depreciation expense at our existing operations of $4.2 million due primarily to the impact of additions to our fleet and equipment purchased to support our existing operations.

~~Depreciation expense decreased $2.0 million, or 0.4%, to $459.6 million for the nine months ended September~~June 30, 2020 and $0.7 million from $461.6 million for the nine months ended September 30, 2019. The decrease was comprised of a decrease in depletion expense of $20.1 million at our existing landfills due primarily to economic disruptions resulting from COVID-19 causing a decrease in E&P and municipal solid waste and a decrease of $1.0 million resulting from a decreasean increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by ~~an increase in depreciation and depletion expense~~a decrease of ~~$15.0~~$2.2 million from ~~acquisitions closed during, or~~ certain intangible assets becoming fully amortized

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subsequent to ~~the nine months ended September~~June 30, ~~2019~~2020 and ~~an increase in depreciation expense at our existing~~a decrease of $0.1 million from operations ~~of $4.1 million due primarily~~divested subsequent to the impact of additions to our fleet and equipment purchased to support our existing operations exceeding certain equipment acquired from the Progressive Waste acquisition becoming fully depreciated in June 2019.

~~Depreciation expense as a percentage of revenues increased 0.1 percentage points to 11.3% for~~ the three months ended ~~September~~June 30, 2020, from 11.2% for the three months ended September 30, 2019. The decrease in our revenues due to economic disruptions resulting from COVID-19 contributed to a 0.6 percentage point increase, which was partially offset by a 0.5 percentage point reduction attributable to reduced E&P and municipal solid waste landfill volumes.2020.

Depreciation expense as a percentage of revenues decreased 0.1 percentage points to 11.4% for the nine months ended September 30, 2020, from 11.5% for the nine months ended September 30, 2019. The decrease as a percentage of revenues consisted of a 0.4 percentage point decrease resulting from declines in E&P and municipal solid waste landfill volumes, partially offset by a 0.3 percentage point increase resulting from a decrease in our revenues due to economic disruptions resulting from COVID-19.

~~Amortization of Intangibles~~. Amortization of intangibles expense increased ~~$0.8~~$1.5 million, or ~~2.3%~~2.4%, to ~~$32.7~~$64.9 million for the ~~three~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$31.9~~$63.4 million for the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. The increase was the result of ~~$4.0~~$5.3 million from intangible assets acquired in acquisitions closed ~~during, or~~ subsequent to the ~~three~~six months ended ~~September~~June 30, ~~2019, partially offset by a decrease of $3.1~~2020 and $1.0 million from ~~certain intangible assets becoming fully amortized subsequent to September 30, 2019 and a decrease of $0.1 million resulting from a decrease~~an increase in the average foreign currency exchange rate in effect during the comparable reporting ~~periods.~~

Amortization of intangibles expense increased $2.3 million, or 2.4%, to $96.1 million for the nine months ended September 30, 2020, from $93.8 million for the nine months ended September 30, 2019. The increase was the result of $12.2 million from intangible assets acquired in acquisitions closed during, or subsequent to, the nine months ended September 30, 2019,periods, partially offset by a decrease of ~~$9.6~~$4.6 million from certain intangible assets becoming fully amortized subsequent to ~~September~~June 30, ~~2019~~2020 and a decrease of ~~$0.3~~$0.2 million ~~resulting~~ from ~~a decrease in~~operations divested subsequent to the ~~average foreign currency exchange rate in effect during the comparable reporting periods.~~six months ended June 30, 2020.

Amortization expense as a percentage of revenues ~~increased 0.1~~decreased 0.3 percentage points to 2.1% for the three months ended June 30, 2021, from 2.4% for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020, from 2.3%~~2020. Amortization expense as a percentage of revenues decreased 0.2 percentage points to 2.2% for the ~~three and nine~~six months ended ~~September~~June 30, ~~2019.~~2021, from 2.4% for the six months ended June 30, 2020. The decreases as a percentage of revenues were primarily attributable to leveraging volume increases in our solid waste revenues.

Impairments and Other Operating Items. Impairments and other operating items decreased ~~$9.1~~$431.2 million, to net losses totaling ~~$3.8~~$6.1 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from net losses totaling ~~$12.9~~$437.3 million for the three months ended ~~September~~June 30, ~~2019.~~2020, including an impairment charge at our E&P operations of $417.4 million.

The net losses of ~~$3.8~~$6.1 million recorded during the three months ended ~~September~~June 30, ~~2020~~2021 consisted of ~~$1.9~~a $4.6 million ~~of losses on~~loss resulting from property and equipment ~~that were disposed of through sales or as a result of being~~ damaged in ~~operations, $1.8~~a facility fire, $0.6 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date and ~~$0.1~~$0.9 million of other net ~~charges to expense.~~charges.

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~~The net losses of $12.9 million recorded during~~During the three months ended September 30, 2019 consisted of $8.0 million resulting from the abandonment of an E&P landfill development project, $3.5 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations, $1.2 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date and $0.2 million of other net charges to expense.

~~Impairments and other operating items increased $409.7 million, to net losses totaling $442.6 million for the nine months ended September~~June 30, 2020, ~~from net losses totaling $32.9 million for the nine months ended September 30, 2019.~~

Macroeconomic and geopolitical conditions, including a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for our E&P waste services. During the nine months ended September 30, 2020, our E&P revenue declined $75.2 million on rig count declines of 72% in certain basins. The most impacted basins include the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which have relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico. Additionally, across the industry there is uncertainty regarding future demand for oil and related services, as noted by several energy companies, many of whom are customers of our E&P operations. These companies have written down the values of their oil and gas assets in anticipation of the potential for the decarbonization of their energy product mix given an increased global focus on reducing greenhouse gases and addressing climate change. Such uncertainty regarding global demand has had a significant impact on the investment and operating plans of our E&P waste customers in the basins where we operate.

~~Based on these events,~~ we concluded ~~during the second quarter of 2020~~ that a triggering event occurred which required us to perform an impairment test of the property and equipment and intangible assets of our E&P operations as of June 30, 2020. As a result of the impairment test, we ~~determined~~concluded that the carrying value of four ~~landfills in our~~ E&P ~~operations~~landfills exceeded their estimated fair value, resulting in an impairment charge of $417.4 million to property and equipment.

The remaining net losses of ~~$25.2~~$19.9 million recorded during the ~~nine~~three months ended ~~September~~June 30, 2020 consisted of $16.8 million ~~to adjust~~of expenses associated with adjusting the carrying value of liabilities for contingent consideration ~~liabilities, $4.3~~associated with acquisitions closed in prior periods, $1.7 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations and $1.6 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date, ~~$3.4 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations and $0.7~~partially offset by $0.2 million of other net ~~charges.~~credits to expense.

Impairments and other operating items decreased $432.1 million, to net losses totaling $6.7 million for the six months ended June 30, 2021, from net losses totaling $438.8 million for the six months ended June 30, 2020.

The net losses of ~~$32.9~~$6.7 million recorded during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2021 consisted of ~~$14.3~~a $4.6 million loss resulting from property and equipment damaged in a facility fire, $1.1 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date ~~$8.0~~and $1.0 million ~~resulting from~~of other net charges.

The net losses of $438.8 million recorded during the ~~abandonment~~six months ended June 30, 2020 consisted of anthe aforementioned charges of $417.4 million at our E&P ~~landfill development project, $7.7~~operations and $16.8 million to adjust the carrying value of liabilities for contingent consideration, as well as $2.5 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date, $1.5 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations ~~$1.7 million of expenses associated with the settlement of various litigation claims~~ and a $1.5 million expense charge to increase the fair value of amounts payable under liability-classified contingent consideration arrangements from acquisitions closed in periods prior to 2018, partially offset by $0.3$0.6 million of other ~~gains.~~net charges.

Operating Income (Loss). Operating income ~~decreased $5.9~~(loss) increased $499.2 million, ~~or 2.5%,~~ to ~~$230.7~~operating income of $266.8 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$236.6~~an operating loss of $232.4 million for the three months ended ~~September~~June 30, 2019. Operating income decreased $428.3 million, or 66.5%, to $215.3 million for the nine months ended September 30, 2020, from $643.6 million for the nine months ended September 30, 2019. Contributing to decreases for the three and nine month comparable periods were declines in our existing solid waste and E&P operations resulting from the impact of COVID-19, partially offset by solid waste price increases and operating income generated from acquisitions, with the comparable nine month period further impacted by the impairment charge attributable to four of our E&P landfills.

Operating income as a percentage of revenues decreased 0.1 percentage points to 16.6% for the three months ended September 30, 2020, from 16.7% for the three months ended September 30, 2019. The decrease as a percentage of revenues was comprised of a 0.5 percentage point increase in cost of operations, a 0.1 percentage point increase in

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~~depreciation expense~~2020. Operating income (loss) increased $520.6 million, to operating income of $505.2 million for the six months ended June 30, 2021, from an operating loss of $15.4 million for the six months ended June 30, 2020.

Our operating results for the three and ~~a 0.1 percentage point~~six months ended June 30, 2020 were adversely impacted by the aforementioned impairment charge at our E&P operations of $417.4 million. The remaining increase in ~~amortization expense, partially offset by a 0.6 percentage point decrease~~our operating income for the three and six months ended June 30, 2021 was due primarily to price increases for our solid waste services, increases in ~~impairments~~solid waste collection and ~~other~~disposal volumes, operating ~~items.~~income contributions from increased sales of recyclable commodities and renewable energy credits associated with the generation of landfill gas, operating income generated from acquisitions closed subsequent to the three and six months ended June 30, 2020 and an increase in the average Canadian dollar to U.S. dollar currency exchange rate.

Operating income as a percentage of revenues ~~decreased 10.7~~increased 35.2 percentage points to ~~5.3%~~17.4% for the ~~nine~~three months ended ~~September~~June 30, ~~2020,~~2021, from ~~16.0%~~a loss of 17.8% for the ~~nine~~three months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase as a percentage of revenues was comprised of a ~~10.1~~33.1 percentage point ~~increase~~decrease in impairments and other operating items, a ~~0.8~~1.4 percentage point ~~increase~~decrease in cost of operations, a 0.6 percentage point decrease in depreciation expense and a ~~0.1~~0.3 percentage point ~~increase~~decrease in amortization expense, partially offset by at 0.2 percentage point increase in SG&A expense.

Operating income as a percentage of revenues increased 17.8 percentage points to 17.2% for the six months ended June 30, 2021, from a loss of 0.6% for the six months ended June 30, 2020. The increase as a percentage of revenues was comprised of a 16.3 percentage point decrease in impairments and other operating items, a 1.2 percentage point decrease in cost of operations, a 0.2 percentage point decrease in ~~SG&A~~depreciation expense and a ~~0.1~~0.2 percentage point decrease in ~~depreciation~~amortization expense, partially offset by at 0.1 percentage point increase in SG&A expense.

Interest Expense. Interest expense increased ~~$3.8~~$0.4 million, or ~~10.5%~~1.0%, to ~~$40.6~~$41.3 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$36.8~~$40.9 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The increase was primarily attributable to an increase of ~~$3.9 million from the January 2020 issuance of our 2030 Senior Notes, an increase of $3.8 million from the March 2020 issuance of our 2050 Senior Notes, an increase of $0.4~~$1.4 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to ~~a $150~~$600 million ~~interest rate swap agreement commencing~~ in ~~February 2020 at a higher interest rate than two~~ interest rate swap agreements ~~totaling $175~~commencing in October 2020 at higher interest rates than $575 million in interest rate swap agreements which expired ~~in February~~between September 2020 and ~~$0.7~~October 2020 and $0.5 million of other net increases, partially offset by a decrease of ~~$2.7~~$1.5 million from the repayment of $250 million of senior unsecured notes in 2021.

Interest expense increased $4.9 million, or 6.1%, to $83.8 million for the six months ended June 30, 2021, from $78.9 million for the six months ended June 30, 2020. The increase was primarily attributable to an increase of $3.4 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to $600 million in interest rate swap agreements commencing in October 2020 at higher interest rates than $575 million in interest rate swap agreements which expired between September 2020 and October 2020, an increase of $3.1 million from the March 2020 issuance of our 2050 Senior Notes (as defined below), an increase of $0.9 million from the January 2020 issuance of our 2030 Senior Notes (as defined below) and $1.1 million of other net increases, partially offset by a decrease of $2.1 million due to a reduction in the average borrowings outstanding under our Credit Agreement and a decrease of ~~$2.3~~$1.5 million from the repayment of ~~our 2019 Senior Notes.~~

Interest expense increased $8.3 million, or 7.4%, to $119.6 million for the nine months ended September 30, 2020, from $111.3 million for the nine months ended September 30, 2019. The increase was primarily attributable to an increase of $10.8 million from the January 2020 issuance of our 2030 Senior Notes, an increase of $8.4 million from the March 2020 issuance of our 2050 Senior Notes, an increase of $5.1 million from the April 2019 issuance of our 2029 Senior Notes, an increase of $1.0 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to a $150 million interest rate swap agreement commencing in February 2020 at a higher interest rate than two interest rate swap agreements totaling $175 million which expired in February 2020 and $0.4$250 million of ~~other net increases, partially offset by a decrease of $10.5 million due to a reduction~~senior unsecured notes in ~~the average borrowings outstanding under our Credit Agreement and a decrease of $6.9 million from the repayment of $175 million of our 2019 Senior Notes.~~2021.

Interest Income. Interest income decreased ~~$1.2~~$0.6 million to ~~$0.9~~$0.7 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$2.1~~$1.3 million for the three months ended ~~September~~June 30, ~~2019.~~2020. Interest income decreased ~~$2.8~~$1.7 million to ~~$4.4~~$1.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$7.2~~$3.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The decreases were primarily attributable to lower reinvestment rates in the current ~~period.~~period, partially offset by higher average cash balances.

Other Income (Expense), Net. Other income (expense) ~~increased $0.7~~, net decreased $7.0 million, to an ~~income~~expense total of ~~$0.7~~$1.2 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from an income total of $0$5.8 million for the three months ended ~~September~~June 30, ~~2019. The~~2020.

Other expense of $1.2 million recorded during the three months ended June 30, 2021 consisted of $1.8 million of adjustments to increase ~~was due primarily to~~certain accrued liabilities acquired in prior period acquisitions and a ~~$1.5~~$0.9 million increase in other net expenses, partially offset by $1.5 million of income earned on investments purchased to fund our employee deferred compensation obligations.

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Other income of $5.8 million recorded during the ~~value~~three months ended June 30, 2020 consisted of $3.3 million of earnings on investments purchased to fund our employee deferred compensation obligations, ~~due~~a $1.0 million adjustment to ~~stock market valuation increases~~decrease certain non-acquisition accrued liabilities recorded in prior periods and ~~$0.1~~a $1.5 million ofincrease in other ~~net~~ income ~~increases, partially offset by interest rate swap termination costs of $0.9 million associated with our early termination in September 2020 of four interest rate swap agreements.~~ sources.

Other income (expense) ~~decreased $7.6~~, net increased $6.0 million, to an income total of $2.3 million for the six months ended June 30, 2021, from an expense total of ~~$3.0~~$3.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020, from an~~2020.

Other income ~~total~~ of ~~$4.6~~$2.3 million ~~for~~recorded during the ~~nine~~six months ended ~~September~~June 30, ~~2019. The decrease was due primarily to a $2.6~~2021 consisted of $2.7 million ~~decrease in the value~~ of income earned on investments purchased to fund our employee deferred compensation obligations ~~due~~and a $1.1 million increase in other net income sources, partially offset by $1.5 million of adjustments to ~~stock market valuation declines,~~increase certain accrued liabilities acquired in prior period acquisitions.

Other expense of $3.7 million recorded during the six months ended June 30, 2020 consisted of a $3.0 million adjustment to increase certain accrued liabilities acquired in the 2016 Progressive Waste acquisition, an$1.5 million of losses on investments purchased to fund our employee deferred compensation obligations and a $0.2 million increase in foreign currency transaction losses of $2.2 million attributable to changes in the average foreign currency exchange rate in effect during the comparable reporting periods impacting our third party debt in Canadian dollars and our inter-entity financing arrangements and interest rate swap termination costs of $0.9 million,other expenses, partially offset by ~~$1.1~~a $1.0 million ~~of other net expense increases.~~adjustment to decrease certain non-acquisition accrued liabilities recorded in prior periods.

Income Tax ~~Provision~~(Provision) Benefit. Income taxes ~~decreased $9.1~~increased $86.6 million, to ~~$33.7~~an expense total of $47.9 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$42.8~~a benefit total of $38.7 million for the three months ended ~~September~~June 30, ~~2019.~~2020. Our effective tax expense rate for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~17.6%~~21.3%. Our effective tax benefit rate for the three months ended ~~September~~June 30, ~~2019~~2020 was ~~21.2%~~14.6%. Income taxes ~~decreased $86.8~~increased $98.2 million, to ~~$23.7~~an expense total of $88.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$110.5~~a benefit total of $10.0 million

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for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Our effective tax expense rate for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~24.4%~~20.7%. Our effective tax benefit rate for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 was ~~20.3%~~10.6%.

The income tax provision for the ~~nine~~six months ended ~~September~~June 30, 2021 included benefits of $2.0 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.

The income tax benefit for the three and six months ended June 30, 2020 included a $27.4 million expense associated with certain 2019 ~~related-party~~inter-entity payments no longer being deductible for tax purposes due to the finalization of tax regulations on April 7, 2020 under Internal Revenue Code section 267A and a $4.1 million expense related to an increase in our deferred income tax liabilities resulting from the impairment of certain assets within our E&P operations, which impacted the geographical apportionment of our state income taxes. Additionally, the income tax benefit for the ~~nine~~three and six months ended ~~September~~June 30, 2020 included a benefit of $5.3 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.

The income tax provision for the three and nine months ended September 30, 2019 included a $3.8 million expense primarily associated with a reduction in deferred income tax assets related to compensation of executive officers no longer deemed deductible for tax purposes. Additionally, the income tax provision for the three and nine months ended September 30, 2019 included a benefit of $0.1$0.2 million and ~~$5.4~~$5.3 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.

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SEGMENT RESULTS

General

No single contract or customer accounted for more than 10% of our total revenues at the consolidated or reportable segment level during the periods presented. The following table disaggregates our revenue by service line for the periods indicated (dollars in thousands of U.S. dollars).


	Three Months Ended September 30,					Nine Months Ended September 30,			Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Commercial	$	406,037	$	408,415	$	1,197,971	$	1,186,565	$	444,044	$	375,427	$	870,439	$	791,935
Residential		387,566		355,574		1,131,486		1,024,105		416,975		378,188		817,794		743,919
Industrial and construction roll off		216,894		226,801		618,122		629,597		237,300		194,457		446,558		401,228
Total collection		1,010,497		990,790		2,947,579		2,840,267		1,098,319		948,072		2,134,791		1,937,082
Landfill		308,795		310,633		855,631		852,073		327,124		280,619		599,060		546,836
Transfer		205,910		209,585		575,761		575,337		217,133		189,085		406,456		369,851
Recycling		21,377		14,142		59,701		50,676		41,539		20,217		73,987		38,324
E&P		26,218		70,874		131,748		205,743		34,607		40,152		62,618		105,530
Intermodal and other		27,141		26,520		84,970		90,491		38,590		27,811		74,225		57,829
Intercompany		(210,386)		(210,100)		(607,651)		(587,868)		(223,381)		(200,174)		(421,263)		(397,265)
Total	$	1,389,552	$	1,412,444	$	4,047,739	$	4,026,719	$	1,533,931	$	1,305,782	$	2,929,874	$	2,658,187

Our Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA. We define segment EBITDA as earnings before interest, taxes, depreciation, amortization, impairments and other operating items and other income (expense). Segment EBITDA is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. Our management uses segment EBITDA in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.

Prior to July 2020, we managed our operations through five geographic solid waste operating segments and our E&P segment, which were also our reportable segments. As of July 2020, our Chief Operating Decision Maker determined that the E&P and Southern operating segments met all of the aggregation criteria and ~~has~~ eliminated our E&P segment by combining all operations of the E&P segment into the Southern segment. After giving effect to this combination, our reportable segments consist of our five geographic ~~solid waste~~ operating segments and no longer include a separate E&P

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segment. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. The segment information presented herein reflects the realignment of these districts. Segment results for the ~~2019~~2020 periods reflected in this report have been reclassified to reflect the realignment of our reportable segments for comparison with the same period in ~~2020.~~2021.

At ~~September~~June 30, ~~2020,~~2021, under the current orientation, our Eastern segment services customers located in northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; our Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico; our Eastern segment services customers located in Delaware, northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; our Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; our Central segment services customers located in Arizona, Colorado, southern Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming; and our Canada segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

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Revenues, net of intercompany eliminations, for our reportable segments are shown in the following table in thousands of U.S. dollars and as a percentage of total revenues for the periods ~~indicated:~~indicated.


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019				2021				2020				2021				2020
Eastern	$	344,353	24.8	%	$	330,887	23.4	%	$	995,446	24.6	%	$	947,334	23.5	%	$	369,617	24.1	%	$	318,891	24.4	%	$	706,079	24.1	%	$	651,093	24.5	%
Southern		330,575	23.8			371,455	26.3			1,033,297	25.5			1,084,194	26.9			363,336	23.7			333,466	25.5			701,497	23.9			702,722	26.4
Western		301,221	21.7			289,208	20.5			848,739	21.0			821,185	20.4			313,789	20.4			275,536	21.1			610,793	20.9			547,518	20.6
Central		228,566	16.4			230,074	16.3			653,728	16.1			626,312	15.6			266,845	17.4			216,620	16.6			502,231	17.1			425,162	16.0
Canada		184,837	13.3			190,820	13.5			516,529	12.8			547,694	13.6			220,344	14.4			161,269	12.4			409,274	14.0			331,692	12.5
	$	1,389,552	100.0	%	$	1,412,444	100.0	%	$	4,047,739	100.0	%	$	4,026,719	100.0	%	$	1,533,931	100.0	%	$	1,305,782	100.0	%	$	2,929,874	100.0	%	$	2,658,187	100.0	%

Segment EBITDA for our reportable segments is shown in the following table in thousands of U.S. dollars and as a percentage of segment revenues for the periods ~~indicated:~~indicated.


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019				2021				2020				2021				2020
Western	$	101,071	33.6	%	$	90,059	31.1	%	$	267,523	31.5	%	$	253,504	30.9	%		99,402	31.7	%		85,423	31.0	%	$	193,228	31.6	%	$	166,451	30.4	%
Eastern		90,991	26.4	%		88,101	26.6	%		258,333	26.0	%		250,106	26.4	%		99,382	26.9	%		82,680	25.9	%		188,503	26.7	%		167,342	25.7	%
Southern																		98,928	27.2	%		89,130	26.7	%		192,352	27.4	%		195,450	27.8	%
Central		82,887	36.3	%		81,746	35.5	%		235,742	36.1	%		219,280	35.0	%		94,886	35.6	%		79,705	36.8	%		173,926	34.6	%		152,856	36.0	%
Southern		81,394	24.6	%		113,209	30.5	%		276,844	26.8	%		327,139	30.2	%
Canada		72,516	39.2	%		66,794	35.0	%		185,589	35.9	%		193,702	35.4	%		88,641	40.2	%		53,675	33.3	%		162,581	39.7	%		113,073	34.1	%
Corporate^(a)		(4,132)	—			(446)	—			(10,462)	—			(11,751)	—			(6,442)	—			(2,699)	—			(7,192)	—			(6,329)	—
	$	424,727	30.6	%	$	439,463	31.1	%	$	1,213,569	30.0	%	$	1,231,980	30.6	%	$	474,797	31.0	%	$	387,914	29.7	%	$	903,398	30.8	%	$	788,843	29.7	%

(a)

The majority of Corporate ~~consists of~~expenses are allocated to the five operating segments. Direct acquisition expenses, expenses associated with ~~its administrative departments and certain centralized expenses including cash and equity-based incentive~~common shares held in the deferred compensation ~~direct acquisition expenses~~plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the ~~Company. Amounts reflected~~Company are ~~net of allocations~~not allocated to the five operating ~~segments.~~segments and comprise the net EBITDA for our Corporate segment for the periods presented.

A reconciliation of segment EBITDA to Income before income tax provision is included in Note 1211 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this report.

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Significant changes in revenue and segment EBITDA for our reportable segments for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020,~~2021, compared to the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2019,~~2020, are discussed ~~below:~~below.

Segment Revenue

Revenue in our Eastern segment increased ~~$13.5~~$50.7 million, or ~~4.1%~~15.9%, to ~~$344.4~~$369.6 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$330.9~~$318.9 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The components of the increase consisted of solid waste volume increases of $16.6 million due primarily to higher collection and disposal volumes, net price increases of $14.0 million, net revenue growth from acquisitions closed subsequent to the three months ended June 30, 2020 of $10.4 million, the impact of a partial recovery of collected commercial recycling volumes, which declined in the prior year period due to economic disruptions resulting from the COVID-19 pandemic, and higher prices for old corrugated cardboard, other paper products, plastics and aluminum contributing to a $9.2 million increase in sales from recyclable commodities and other revenue increases of $0.5 million.

Revenue in our Eastern segment increased $55.0 million, or 8.4%, to $706.1 million for the six months ended June 30, 2021, from $651.1 million for the six months ended June 30, 2020. The components of the increase consisted of net price increases of $27.2 million, net revenue growth from acquisitions closed ~~during, or~~ subsequent to the ~~three~~six months ended ~~September~~June 30, ~~2019,~~2020 of ~~$32.1~~$20.0 million, ~~net price increases~~the impact of ~~$13.5~~a partial recovery of collected commercial recycling volumes, which declined in the prior year period due to economic disruptions resulting from the COVID-19 pandemic, and higher prices for old corrugated cardboard, other paper products, plastics and aluminum contributing to a $14.8 million increase in sales from recyclable commodities and other revenue increases of ~~$0.5~~$0.6 million, partially offset by solid waste volume decreases of ~~$29.7~~$7.6 million

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attributable primarily to ~~COVID-19~~COVID-19-related economic disruptions in our Northeastern markets, which commenced in March 2020 and continued into 2021, driving declines in commercial collection and roll off collection volumes.

Revenue in our Southern segment increased $29.8 million, or 9.0%, to $363.3 million for the three months ended June 30, 2021, from $333.5 million for the three months ended June 30, 2020. The components of the increase consisted of net price increases of $18.0 million, solid waste volume increases of $14.8 million due primarily to higher commercial collection, roll off collection, transfer station and landfill volumes, higher prices for old corrugated cardboard, plastics and aluminum products contributing to a $2.8 million increase in sales from recyclable commodities and other revenue increases of $1.6 million, partially offset by a decline in revenue at our E&P operations of $5.2 million as decreases in the demand for crude oil commenced in March 2020 as a result of economic disruptions from the COVID-19 pandemic, resulting in decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services and net revenue reductions from divestitures closed subsequent to ~~September 30, 2019 of $2.9 million.~~

~~Revenue in our Eastern segment increased $48.1 million, or 5.1%, to $995.4 million for the nine months ended September~~June 30, 2020 ~~from $947.3 million for the nine months ended September 30, 2019. The components~~ of the increase consisted of net revenue growth from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, of $107.4 million and net price increases of $45.1 million, partially offset by solid waste volume decreases of $89.9 million attributable primarily to COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and landfill volumes, net revenue reductions from divestitures closed subsequent to September 30, 2019 of $11.1 million, decreased recyclable commodity sales of $2.1 million resulting from a decrease in recycling volumes collected and declines in prices for plastic and aluminum and other revenue decreases of $1.3$2.2 million.

Revenue in our Southern segment decreased ~~$40.9~~$1.2 million, or ~~11.0%~~0.2%, to ~~$330.6~~$701.5 million for the ~~three~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$371.5~~$702.7 million for the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. The components of the decrease consisted of a decline in revenue at our E&P operations of ~~$41.6~~$39.5 million, partially offset by an increase in revenue at our solid waste operations of ~~$0.7~~$38.3 million. The ~~$41.6~~$39.5 million decrease in revenue at our E&P operations was attributable to decreases in the demand for crude oil as a result of economic disruptions from the COVID-19 pandemic resulting in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services. The components of the ~~$0.7~~$38.3 million increase in revenue at our solid waste operations consisted of net price increases of ~~$11.0~~$31.5 million, solid waste volume increases of $4.4 million due primarily to higher landfill special waste volumes, higher prices for old corrugated cardboard, plastics and aluminum contributing to a $4.4 million increase in sales from recyclable commodities and other revenue increases of ~~$0.8~~$1.9 million, partially offset by solid waste volume decreases of $11.1 million attributable primarily to the net impact of COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and municipal solid waste landfill volumes that exceeded increases in landfill special waste volumes.

Revenue in our Southern segment decreased $50.9 million, or 4.7%, to $1.033 billion for the nine months ended September 30, 2020, from $1.084 billion for the nine months ended September 30, 2019. The components of the decrease consisted of a decline in revenue at our E&P operations of $72.7 million, partially offset by an increase in revenue at our solid waste operations of $21.8 million. The $72.7 million decrease in revenue at our E&P operations was attributable to decreases in the demand for crude oil as a result of economic disruptions from COVID-19 resulting in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services. Drilling and production activity during the nine months ended September 30, 2020 were also adversely impacted by the drop in the value of crude oil due to the increased supply of oil resulting from Saudi Arabia and Russia abandoning production quotas and increasing production levels, which was exacerbated by the impact of COVID-19. The components of the $21.8 million increase in revenue at our solid waste operations consisted of net price increases of $41.8 million and net revenue growth from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019 of $12.3 million, partially offset by solid waste volume decreases of $30.3 million attributable primarily to COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and municipal solid waste landfill volumes that exceeded increases in landfill special waste volumes, net revenue reductions from divestitures closed subsequent to ~~September~~June 30, ~~2019~~2020 of ~~$0.6 million and other revenue decreases of $1.4~~$3.9 million.

Revenue in our Western segment increased ~~$12.0~~$38.3 million, or ~~4.2%~~13.9%, to ~~$301.2~~$313.8 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$289.2~~$275.5 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The components of the increase consisted of solid waste volume increases of $22.6 million attributable to increased collection and disposal volumes, net revenue growth from acquisitions closed ~~during, or~~ subsequent to the three months ended ~~September~~June 30,

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~~2019, of $7.3~~$6.9 million, net price increases of ~~$7.2~~$6.9 million and recyclable commodity revenue increases of $3.0 million due primarily to higher prices for old corrugated cardboard, metals and aluminum and higher volumes collected from residential recycling customers and other revenue increases of ~~$0.4~~$0.2 million, partially offset by intermodal revenue decreases of ~~$2.9~~$1.3 million due primarily to customer losses resulting in a reduction in intermodal cargo volumes.

Revenue in our Western segment increased ~~$27.5~~$63.3 million, or ~~3.4%~~11.6%, to ~~$848.7~~$610.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$821.2~~$547.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The components of the increase consisted of ~~net price~~solid waste volume increases of ~~$23.4~~$32.5 million attributable to increased collection and disposal volumes, net revenue growth from acquisitions closed ~~during, or~~ subsequent to the ~~three~~six months ended ~~September~~June 30, ~~2019,~~2020 of ~~$9.4~~$15.4 million, net price increases of $13.9 million and recyclable commodity revenue increases of $4.7 million due primarily to higher prices for old corrugated cardboard, metals and aluminum and higher volumes collected from residential recycling customers and other revenue increases of $0.2 million, partially offset by intermodal revenue decreases of ~~$4.5~~$3.4 million due primarily to customer losses resulting in a reduction in intermodal cargo ~~volumes and other revenue decreases of $0.8 million.~~volumes.

Revenue in our Central segment ~~decreased $1.5~~increased $50.2 million, or ~~0.7%~~23.2%, to ~~$228.6~~$266.8 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$230.1~~$216.6 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The components of the ~~decrease~~increase consisted of revenue growth from acquisitions closed subsequent to the three months ended June 30, 2020 of $30.1 million, net price increases of $10.0 million, solid waste volume ~~decreases~~increases of ~~$17.5~~$8.7 million due primarily to ~~the impact of COVID-19 economic disruptions driving decreases in~~higher commercial collection, roll off collection, transfer station and landfill volumes, higher prices for old corrugated cardboard and aluminum products contributing to a $1.2 million increase in sales from recyclable commodities and other revenue ~~decreases~~increases of ~~$0.5~~$1.6 million, partially offset by net ~~price increases of $9.1 million and net~~ revenue ~~growth~~reductions from ~~acquisitions~~divestitures closed ~~during, or~~ subsequent to ~~the three months ended September~~June 30, ~~2019,~~2020 of ~~$7.4~~$1.4 million.

Revenue in our Central segment increased ~~$27.4~~$77.0 million, or ~~4.4%~~18.1%, to ~~$653.7~~$502.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$626.3~~$425.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The components of the increase consisted of ~~net price increases of $30.0 million and~~ revenue growth from acquisitions closed ~~during, or~~ subsequent to the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020 of ~~$26.5~~$55.3 million, net price

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increases of $19.4 million, solid waste volume increases of $2.2 million due primarily to higher landfill special waste volumes, higher prices for old corrugated cardboard and aluminum products contributing to a $1.5 million increase in sales from recyclable commodities and other revenue increases of $1.4 million, partially offset by ~~solid waste volume decreases~~net revenue reductions from divestitures closed subsequent to June 30, 2020 of $28.0 million due to the impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and other revenue decreases of $1.1$2.8 million.

Revenue in our Canada segment ~~decreased $6.0~~increased $59.0 million, or ~~3.1%~~36.6%, to ~~$184.8~~$220.3 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$190.8~~$161.3 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The components of the ~~decrease~~increase consisted of solid waste volume decreases of $16.2 million due to the net impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and a decrease of $1.6$20.5 million resulting from a ~~lower~~higher average foreign currency exchange rate in effect during the comparable reporting periods, ~~partially offset by~~solid waste volume increases of $17.5 million due primarily to higher collection and disposal volumes, net price increases of ~~$8.3~~$11.9 million, ~~an increase of $2.9~~$8.0 million resulting from ~~an increase in the~~higher prices for renewable energy credits ~~and natural gas~~ associated with the generation ~~and sale~~ of landfill gas and ~~other~~recyclable commodity revenue increases of ~~$0.6~~$1.9 million due primarily to higher prices for old corrugated cardboard and higher volumes collected from residential recycling customers, partially offset by other revenue decreases of $0.8 million.

Revenue in our Canada segment ~~decreased $31.2~~increased $77.6 million, or ~~5.7%~~23.4%, to ~~$516.5~~$409.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$547.7~~$331.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The components of the ~~decrease~~increase consisted of solid waste volume decreases of $50.9 million due to the net impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and a decrease of $9.6$30.9 million resulting from a ~~lower~~higher average foreign currency exchange rate in effect during the comparable reporting ~~partially offset by~~periods, net price increases of ~~$27.6~~$21.1 million, ~~net revenue growth~~$14.1 million resulting from ~~acquisitions closed during, or subsequent~~higher prices for renewable energy credits associated with the generation of landfill gas, solid waste volume increases of $8.2 million due primarily to ~~the nine months ended September 30, 2019 of $0.6 million~~higher roll off collection and ~~other~~landfill special waste volumes and recyclable commodity revenue increases of ~~$1.1~~$3.9 million due primarily to higher prices for old corrugated cardboard and higher volumes collected from residential recycling customers, partially offset by other revenue decreases of $0.6 million.

Segment EBITDA

Segment EBITDA in our Western segment increased ~~$11.0~~$14.0 million, or ~~12.2%~~16.4%, to ~~$101.1~~$99.4 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$90.1~~$85.4 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The increase was due primarily to an increase in revenues of ~~$12.0~~$38.3 million, a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel of $2.1 million due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic and a decrease in taxes on revenues of ~~$4.9~~$1.6 million ~~from the reversal of recorded liabilities for certain fees and exactions~~ at Chiquita Canyon landfill due to a reduction in certain fees and exactions resulting from our successful challenge of ~~increases assessed in prior periods, a decrease in intermodal rail~~these expenses ~~of $2.1 million due~~subsequent to a reduction in cargo volume, a decrease in fuel expense of $1.1 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in 401(k) matching expenses of $1.1 million as we suspended our 401(k) match as of June 1, 2020 and a collective decrease in travel, meeting, training, and community activity expenses of $0.9 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, partially offset by a net $5.4 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $3.3 million due to an increase in the overhead

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allocation rate, an increase in recurring taxes on revenues of $2.2 million attributable to price-led increases in residential collection and landfill municipal solid waste revenues and other expense increases of $0.2 million.

~~Segment EBITDA in our Western segment increased $14.0 million, or 5.5%, to $267.5 million for the nine months ended September~~ 30, 2020, from $253.5 million for the nine months ended September 30, 2019. The increase was due primarily to an increase in revenues of $27.5 million, a decrease in taxes on revenues of $4.9 million from the reversal of recorded liabilities for certain fees and exactions at Chiquita Canyon landfill due to our successful challenge of increases assessed in prior periods, a decrease in intermodal rail expenses of $4.0 million due to a reduction in cargo volume, a collective decrease in travel, meeting, training, and community activity expenses of $2.6 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in employee medical benefits expenses of $2.3 million due to a reduction in medical visits, a decrease in fuel expense of $2.3 million due to a decrease in the price of diesel fuel and a decrease in 401(k) matching expenses of $1.5 million as we suspended our 401(k) match as of June 1, 2020, partially offset by ~~a net $6.2 million increase in cost of operations and SG&A expenses attributable to acquired operations,~~ an increase in labor expenses of ~~$4.6~~$7.0 million due primarily to employee pay ~~rate~~ increases anand headcount additions to support solid waste volume increases, $4.7 million of additional ~~calendar and business day in~~operating costs from acquisitions closed subsequent to the ~~current year period due to leap year, as well as emergency wages and other COVID-19-related employee costs,~~three months ended June 30, 2020, an increase in ~~recurring~~ taxes on revenues of ~~$4.5~~$2.8 million ~~attributable~~due primarily to ~~price-led increases in residential collection and landfill municipal solid waste~~increased revenues, an increase in ~~corporate overhead~~diesel fuel expense ~~allocations~~ of ~~$3.2~~$2.4 million due to higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, an increase in the overhead allocation rate, an increase of $2.4 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, an increase in third partythird-party disposal expenses of $2.2 million due primarily to ~~disposal rate increases and higher residential~~increased solid waste collection ~~tonnage,~~volumes, an increase in ~~landfill site maintenance~~third-party trucking and transportation expenses of ~~$1.3~~$2.2 million due primarily to increased ~~daily cover costs, an increase in property tax expenses of $1.2 million due primarily~~transfer station and landfill special waste volumes requiring trucking and transportation services to ~~reassessed values of certain~~our landfills, an increase in expenses for auto and workers’ compensation claims of $1.2 million due primarily to non-recurring adjustments recorded in the prior year period to decrease projected losses on outstanding claims originally recorded prior to 2019 and other expense increases of $4.3 million.

Segment EBITDA in our Eastern segment increased $2.9 million, or 3.3%, to $91.0 million for the three months ended September 30, 2020, from $88.1 million for the three months ended September 30, 2019. The increase was due primarily to an increase in revenues of $16.4 million from organic growth and acquisitions, $10.0 million of collective decreases in third-party disposal expenses, third-party trucking expenses, labor expenses and expenses for processing recyclable commodities attributable to declines in solid waste and commercial recycling volumes resulting primarily from economic disruptions caused by COVID-19, a decrease in fuel expense of $2.1 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in employee medical benefits expenses of $1.6 million due to a reduction in medical visits, a decrease in 401(k) matching expenses of $1.1 million as we suspended our 401(k) match as of June 1, 2020, a collective decrease in travel, meeting, training, and community activity expenses of $1.0 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, an increase to EBITDA of $0.9 million from the impact of operations disposed of subsequent to the three months ended September 30, 2019 and other expense decreases of $0.6 million, partially offset by a net $23.8 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $4.7 million due to an increase in the overhead allocation rate, an increase in truck, container, equipment and facility maintenance and repair expenses of ~~$1.2~~$2.1 million due to parts and service rate increases and additional maintenance and repair requirements resulting from increased truck and equipment operating hours to support increases in our solid waste volumes, an increase in employee medical benefits expenses of $2.0 million due to an increase in ~~facility repairs and the completion of certain vehicle and equipment maintenance activities that were postponed in the second quarter of 2020 and~~medical visits, an increase in ~~landfill operating expenses~~corporate overhead expense allocations of ~~$1.1~~$1.4 million due ~~primarily~~ to ~~increased gas system repairs.~~an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation and $1.2 million of other net expense increases.

Segment EBITDA in our ~~Eastern~~Western segment increased ~~$8.2~~$26.7 million, or ~~3.3%~~16.1%, to ~~$258.3~~$193.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$250.1~~$166.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The increase was due primarily to an increase in revenues of ~~$59.2~~$63.3 million, a decrease in taxes on revenues of $3.7 million at Chiquita Canyon landfill due to a reduction in certain fees and exactions resulting from ~~organic growth~~our successful challenge of these expenses subsequent to June 30, 2020, a decrease in intermodal rail expenses of $2.8 million due to customer losses resulting in a reduction in cargo volume, a decrease in supplemental bonuses and ~~acquisitions, $26.0~~other cash incentive compensation to non-management personnel of $2.4 million ~~of collective decreases~~due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic and a decrease in ~~third-party disposal expenses, third-party trucking expenses, labor expenses,~~ expenses for processing recyclable commodities and taxes on revenues attributable to declines in solid waste and commercial recycling volumes resulting primarily from economic disruptions caused by COVID-19, a decrease in fuel expense of $5.5 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in employee medical benefits expenses of $5.3 million due to a reduction in medical visits, a collective decrease in travel, meeting, training, and community activity expenses of $1.8 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, an increase to EBITDA of $1.5 millionWestern segment

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~~from the impact~~ of ~~operations disposed of during the nine months ended September 30, 2020, a decrease~~$1.7 million due to increased recyclable commodity values resulting in ~~401(k) matching expenses of $1.3 million as we suspended our 401(k) match as of June 1, 2020 and other expense decreases of $1.9 million,~~price reductions charged by third-party recycling processors, partially offset by ~~a net $78.0~~$11.0 million of additional operating costs from acquisitions closed subsequent to the six months ended June 30, 2020, an increase in ~~cost~~labor expenses of ~~operations~~$9.0 million due primarily to employee pay increases and ~~SG&A expenses attributable~~headcount additions to ~~acquired operations,~~support solid waste volume increases, an increase in corporate overhead expense allocations of ~~$6.3~~$5.2 million due to an increase in the overhead allocation rate ~~an increase of $2.7 million~~ resulting from ~~the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19,~~ an increase in corporate expenses qualifying for ~~uncollectible accounts receivable~~allocation, an increase in taxes on revenues of ~~$2.5~~$5.0 million due primarily to increased revenues, an increase in third-party disposal expenses of $3.9 million due primarily to increased solid waste collection volumes, an increase in third-party trucking and transportation expenses of $3.4 million due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in employee medical benefits expenses of $3.0 million due to ~~customers experiencing financial difficulties resulting from the economic impact~~an increase in medical visits, an increase in diesel fuel expense of ~~COVID-19,~~$2.3 million due to higher fuel prices, an increase in truck, container, equipment and facility maintenance and repair expenses of ~~$1.5~~$2.2 million due primarily to ~~an increase in facility repairs as well as~~ parts and service rate increases, an increase in ~~subcontracted hauling services~~landfill maintenance, environmental compliance and daily cover expenses of $1.2 million due to outsourcing the servicing of certain non-strategic collection customers to third party haulers, an increase in expenses for auto and workers’ compensation claims of $1.1 million due primarily to non-recurring adjustments recorded in the prior year period to decrease projected losses on outstanding claims occurring prior to 2019 and an increase inincreased compliance requirements under our landfill operating ~~expenses of~~permits and $1.0 million ~~due primarily to increased gas system repairs.~~of other net expense increases.

Segment EBITDA in our ~~Central~~Eastern segment increased ~~$1.2~~$16.7 million, or ~~1.4%~~20.2%, to ~~$82.9~~$99.4 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$81.7~~$82.7 million for the three months ended ~~September~~June 30, 2019. The increase was due primarily to $2.9 million of collective decreases in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting from economic disruptions caused by COVID-19, a decrease in expenses for uncollectible accounts receivable of $1.2 million due primarily to the current period collection of certain accounts deemed uncollectible in prior periods, a decrease in 401(k) matching expenses of $1.1 million as we suspended our 401(k) match as of June 1, 2020, a decrease in employee medical benefits expenses of $0.8 million due to a reduction in medical visits, a decrease in fuel expense of $0.8 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a collective decrease in travel, meeting, training, and community activity expenses of $0.6 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities and other expense decreases of $1.1 million, partially offset by a net $3.5 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $2.3 million due to an increase in the overhead allocation rate and a decrease in revenues of $1.5 million.

Segment EBITDA in our Central segment increased $16.4 million, or 7.5%, to $235.7 million for the nine months ended September 30, 2020, from $219.3 million for the nine months ended September 30, 2019.2020. The increase was due primarily to an increase in revenues of ~~$27.4~~$50.7 million, $5.3 million of collective decreases in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting from economic disruptions caused by COVID-19, a decrease in ~~employee medical benefits expenses~~supplemental bonuses and other cash incentive compensation to non-management personnel of ~~$3.6~~$2.8 million due to ~~a reduction in medical visits,~~the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic and a decrease in expenses for uncollectible accounts receivable of ~~$1.9~~$2.2 million primarily due ~~primarily~~ to the ~~current~~prior year period ~~collection of certain accounts deemed uncollectible in prior periods, a decrease in fuel expense of $1.6 million~~incurring increased expenses due to ~~a decrease in~~customers experiencing financial difficulties resulting from the ~~price~~economic impact of diesel fuel, a decrease in 401(k) matching expenses of $1.3 million as we suspended our 401(k) match as of June 1, 2020, a collective decrease in travel, meeting, training, and community activity expenses of $1.2 million due to shelter at home and other restrictions on our employees due tothe COVID-19 ~~resulting in the cancellation of non-essential off-site activities and other expense decreases of $0.7 million,~~pandemic, partially offset by ~~a net $15.4 million increase in cost of operations and SG&A expenses attributable to acquired operations,~~ an increase in labor expenses of ~~$5.1~~$6.5 million due primarily to employee pay ~~rate~~ increases ~~an additional calendar~~ and ~~business day in the current year period due~~headcount additions to ~~leap year, as well as emergency wages and other COVID-19-related employee costs exceeding decreases in hours worked attributable to~~support solid waste volume ~~reductions~~increases, $6.4 million of additional operating costs from acquisitions closed subsequent to the three months ended June 30, 2020, an increase in third-party trucking and transportation expenses of $4.7 million due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in third-party disposal expenses of $4.3 million due primarily to increased solid waste collection volumes, an increase in truck, container, equipment and facility maintenance and repair expenses of $3.9 million due to parts and service rate increases and additional maintenance and repair requirements resulting from ~~COVID-19 economic disruptions,~~increased truck and equipment operating hours to support increases in our solid waste volumes, an increase in employee medical benefits expenses of $2.6 million due to an increase in medical visits, an increase in diesel fuel expense of $2.2 million due to higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, an increase in landfill maintenance expenses of $1.3 million due to increased disposal volumes and increased compliance requirements under our landfill operating permits, an increase in taxes on revenues of $1.2 million due primarily to increased revenues, an increase in corporate overhead expense allocations of ~~$2.7~~$1.0 million due to an increase in the overhead allocation rate ~~an increase of $2.3 million~~ resulting from ~~the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19 and~~ an increase in corporate expenses qualifying for ~~auto~~allocation and ~~workers’ compensation claims~~other net expense increases of ~~$1.1 million due primarily to non-recurring adjustments recorded in the prior year period to decrease projected losses on outstanding claims.~~$4.9 million.

Segment EBITDA in our ~~Southern~~Eastern segment ~~decreased $31.8~~increased $21.2 million, or ~~28.1%~~12.6%, to ~~$81.4~~$188.5 million for the ~~three~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$113.2~~$167.3 million for the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase was due primarily to an increase in revenues of $55.0 million, a decrease in ~~E&P revenues~~expenses for uncollectible accounts receivable of ~~$41.6~~$3.6 million primarily due to the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of the COVID-19 pandemic and a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel of $3.2 million due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, partially offset by $11.4 million of additional operating costs from acquisitions closed subsequent to the six months ended June 30, 2020, an increase in labor expenses at our solid waste operations of $5.0 million due primarily to employee pay increases, an increase in corporate overhead expense allocations ~~to our solid waste operations~~ of ~~$3.3~~$4.9 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation, an increase in third-party disposal expenses of $4.2 million due primarily to increased rates paid for third party disposal and increased volumes in our Northeastern markets as they began to recover in 2021 from economic disruptions attributable to the COVID-19 pandemic, an increase in employee medical benefits expenses of $3.7 million due to an increase in medical visits, an increase in third-party trucking and transportation expenses of $3.0 million due primarily to opening a new transfer station facility in the latter half of 2020 and increased transfer station volumes in our Northeastern markets as they began to recover in 2021 from

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economic disruptions attributable to the COVID-19 pandemic, an increase in truck, container, equipment and facility maintenance and repair expenses of $2.5 million due primarily to parts and service rate increases, an increase in landfill maintenance expenses of $1.8 million due to increased disposal volumes and increased compliance requirements under our landfill operating permits, an increase in diesel fuel expense of $1.6 million due to higher fuel prices, an increase in taxes on revenues of $1.5 million due primarily to increased revenues and other net expense increases of $1.0 million.

Segment EBITDA in our Southern segment increased $9.8 million, or 11.0%, to $98.9 million for the three months ended June 30, 2021, from $89.1 million for the three months ended June 30, 2020. The increase was due to an increase in revenues of $32.0 million from organic growth and acquisitions, a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel of $3.2 million due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, a decrease in labor at our E&P operations of $1.7 million due to headcount reductions resulting from disposal volume decreases, a decrease in subcontracted operating and remediation services at our E&P operations of $1.2 million due to disposal volume decreases and a decrease in expenses for uncollectible accounts receivable of $1.0 million at our E&P operations primarily due to the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of the COVID-19 pandemic, partially offset by an increase in labor expenses of $5.5 million due primarily to employee pay increases and headcount additions to support solid waste volume increases, an increase in third-party disposal expenses of $4.5 million due primarily to increased solid waste collection volumes, an increase in truck, container, equipment and facility maintenance and repair expenses of $3.6 million due to parts and service rate increases and additional maintenance and repair requirements resulting from increased truck and equipment operating hours to support increases in our solid waste volumes, an increase in subcontracted hauling services at our solid waste operations of $2.9 million due to outsourcing the servicing of certain non-strategic contracts and commercial collection customers to third party haulers, an increase in employee medical benefits expenses of $2.8 million due to an increase in medical visits, an increase in third-party trucking and transportation expenses of $2.5 million due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in diesel fuel expense of $2.0 million due to higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, a decrease to EBITDA of $1.2 million from the impact of operations disposed of during, or subsequent to, the three months ended June 30, 2020, an increase in taxes on revenues of $0.9 million due primarily to increased revenues in our solid waste markets, an increase in corporate overhead expense allocations of $0.9 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation and other net expense increases of $2.5 million.

Segment EBITDA in our Southern segment decreased $3.0 million, or 1.6%, to $192.4 million for the six months ended June 30, 2021, from $195.4 million for the six months ended June 30, 2020. The decrease was due to a decline in E&P revenues of $39.5 million, an increase in subcontracted hauling services at our solid waste operations of $5.6 million due to outsourcing the servicing of certain non-strategic contracts and commercial collection customers to third party haulers, an increase in employee medical benefits expenses of $4.0 million due to an increase in medical visits, an increase in labor expenses at our solid waste operations of $3.2 million due primarily to employee pay increases and headcount additions to support solid waste volume increases, an increase in truck, container, equipment and facility maintenance and repair expenses at our solid waste operations of ~~$2.4~~$3.0 million due primarily to ~~an increase in facility repairs~~

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~~as well as~~ parts and service rate increases, an increase in ~~labor expenses at our solid waste operations~~corporate overhead expense allocations of ~~$1.6~~$2.9 million due ~~primarily~~ to ~~employee pay rate increases,~~ an increase in ~~expenses for uncollectible accounts receivable at our E&P operations of $1.5 million due to customers experiencing financial difficulties~~the overhead allocation rate resulting from ~~the economic impact of COVID-19 and $0.7 million of other net expense increases at our solid waste operations, partially offset by a decrease~~an increase in ~~401(k) matching~~corporate expenses ~~at our solid waste operations of $1.9 million as we suspended our 401(k) match as of June 1, 2020, a decrease~~qualifying for allocation, an increase in ~~third party~~third-party disposal expenses at our solid waste operations of ~~$1.4~~$2.8 million due primarily to ~~declines in commercial and roll off~~increased solid waste collection volumes, ~~a decrease~~an increase in ~~employee medical benefits~~third-party trucking and transportation expenses at our solid waste operations of ~~$1.2~~$2.8 million due primarily to ~~a reduction in medical visits,~~increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, a decrease to EBITDA of $2.0 million from the impact of operations disposed of subsequent to the six months ended June 30, 2020 and an increase in diesel fuel expense at our solid waste operations of ~~$0.9~~$1.1 million due to ~~a decrease~~higher fuel prices, partially offset by an increase in ~~the price~~solid waste revenues of ~~diesel fuel~~$42.2 million from organic growth and ~~declines in the volume of fuel used in our operations,~~acquisitions, a decrease in expenses for auto and workers’ compensation claims ~~at our solid waste operations~~ of ~~$0.8~~$6.5 million due primarily to higher claims severity in the prior year period and adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded in prior ~~periods,~~to 2021, a ~~collective~~ decrease in travel, meeting, training, and community activity expenses at our solid waste operations of $0.7 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, an increase in revenues at our solid waste operations of $0.7 million and the following expense decreaseslabor at our E&P operations ~~which were directly attributable~~of $4.7 million due to ~~the decline in E&P volumes and corresponding decline in E&P revenues:~~headcount reductions resulting from disposal volume decreases, a decrease in ~~labor~~supplemental bonuses and other cash incentive compensation to non-management personnel of $3.7 million due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, a decrease in subcontracted operating and remediation services at our E&P

Table of ~~$3.0 million;~~Contents

operations of $3.4 million due to disposal volume decreases, a decrease in equipment and ~~property~~facility maintenance and repair ~~and maintenance~~ expenses at our E&P operations of ~~$2.8 million;~~$1.7 million due to decreased equipment operating hours resulting from disposal volume decreases, a decrease in ~~operating activities outsourced~~expenses for uncollectible accounts receivable of $1.3 million at our E&P operations primarily due to ~~third-parties~~the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of ~~$2.0 million; a decrease in fuel expense of $0.9 million; a decrease in landfill operating supplies of $0.9 million; a decrease in third-party trucking~~the COVID-19 pandemic and ~~transportation services of $0.6 million; a decrease in royalty expenses paid on revenues of $0.6 million; a decrease in travel, meetings and training expenses of $0.5 million and $0.4 million of~~ other net expense ~~decreases.~~decreases of $0.4 million.

Segment EBITDA in our ~~Southern~~Central segment ~~decreased $50.3~~increased $15.2 million, or ~~15.4%~~19.0%, to ~~$276.8~~$94.9 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$327.1~~$79.7 million for the ~~nine~~three months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase was due primarily to an increase in revenues of $51.6 million from organic growth and acquisitions and a decrease in ~~E&P revenues~~supplemental bonuses and other cash incentive compensation to non-management personnel of ~~$72.7~~$2.2 million ~~a net $8.3~~due to the prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, partially offset by $16.5 million of additional operating costs from certain acquisitions closed subsequent to the three months ended June 30, 2020, an increase in ~~cost~~labor expenses of ~~operations~~$6.2 million due primarily to employee pay increases and ~~SG&A expenses attributable~~headcount additions to ~~acquired operations,~~support solid waste volume increases, an increase in truck, container, equipment and facility maintenance and repair expenses atof $3.5 million due to parts and service rate increases and additional maintenance and repair requirements resulting from increased truck and equipment operating hours to support increases in our solid waste ~~operations~~volumes, an increase in third-party disposal expenses of ~~$7.8~~$2.2 million due primarily to increased solid waste collection volumes, an increase in employee medical benefits expenses of $2.0 million due to an increase in ~~facility repairs as well as parts and service rate increases,~~medical visits, an increase in corporate overhead expense allocations of $1.6 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for ~~auto~~allocation, an increase in third-party trucking and ~~workers’ compensation claims~~transportation expenses of ~~$6.7~~$1.5 million ~~at our solid waste operations~~ due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in taxes on revenues of $1.2 million due primarily to increased revenues, an increase in diesel fuel expense of $1.0 million due to higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, a decrease to EBITDA of $0.2 million from the impact of operations disposed of subsequent to the three months ended June 30, 2020 and other net expense increases of $2.7 million.

Segment EBITDA in our ~~deductibles~~Central segment increased $21.0 million, or 13.8%, to $173.9 million for ~~auto claims, higher claims severity~~the six months ended June 30, 2021, from $152.9 million for the six months ended June 30, 2020. The increase was due primarily to an increase in ~~the current year period~~revenues of $79.8 million from organic growth and ~~adjustments recorded~~acquisitions and a decrease in supplemental bonuses and other cash incentive compensation to non-management personnel of $2.4 million due to the prior year period including non-recurring expenses to ~~decrease projected losses on outstanding claims originally recorded prior~~recognize services provided by our front-line employees during the COVID-19 pandemic, partially offset by $32.2 million of additional operating costs from certain acquisitions closed subsequent to ~~2019,~~the six months ended June 30, 2020, an increase in labor expenses at our solid waste operations of ~~$6.0~~$7.6 million due primarily to employee pay ~~rate~~ increases, an increase of $3.6 million resulting from the payment of supplemental bonuses to non-management employees at our solid waste operations to provide financial assistance associated with the impact of COVID-19, an increase in corporate overhead expense allocations ~~to our solid waste operations~~ of ~~$3.5~~$4.8 million due to an increase in the overhead allocation rate resulting from an increase in ~~third party~~corporate expenses qualifying for allocation, an increase in truck, container, equipment and facility maintenance and repair expenses of $4.0 million due primarily to parts and service rate increases, an increase in employee medical benefits expenses of $3.0 million due to an increase in medical visits, an increase in third-party trucking and transportation expenses of ~~$2.2~~$2.5 million ~~at our solid waste operations~~ due primarily to increased transfer station and landfill special waste volumes requiring trucking and transportation services to our ~~disposal sites,~~landfills, an increase in taxes on revenues of $1.7 million due primarily to increased revenues, an increase in expenses for uncollectible accounts receivable ~~at our E&P operations~~ of ~~$1.9~~$1.4 million due to ~~customers experiencing financial difficulties resulting from~~ the ~~economic impact~~prior year period including the collection of ~~COVID-19,~~amounts deemed uncollectible in 2019, an increase in ~~leachate expense at our~~third-party disposal expenses of $1.1 million due primarily to increased solid waste collection volumes, a decrease to EBITDA of $0.2 million from the impact of operations disposed of ~~$1.5 million due~~subsequent to ~~higher precipitation at our sites in Florida~~the six months ended June 30, 2020 and ~~$0.4 million of~~ other net expense increases ~~at our solid waste operations, partially offset by an increase in revenues at our solid waste operations~~ of $21.8 million, a decrease in third party disposal expenses at our solid waste operations of $6.3 million due primarily to declines in commercial and roll off collection volumes, a decrease in employee medical benefits expenses at our solid waste operations of $5.4 million due to a reduction in medical visits, a decrease in 401(k) matching expenses at our solid waste operations of $2.4 million as we suspended our 401(k) match as of June 1, 2020, a collective decrease in travel, meeting, training, and community activity expenses at our solid waste operations of $2.3 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in fuel expense at our solid waste operations of $1.6 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in compressed natural gas expense at our solid waste operations of $1.5 million due primarily to the recognition in 2020 of tax credits associated with the purchase of compressed natural gas and the following expense decreases at our E&P operations which were directly attributable to the decline in E&P volumes and corresponding decline in E&P revenues: a decrease in equipment and property repair and maintenance expenses of $4.2 million; a decrease in operating activities outsourced to third-parties of $3.6 million; a decrease in labor expenses of $3.4 million; a decrease in third-party trucking and transportation services of $3.2 million; a decrease in fuel expense of $2.0 million; a decrease in royalty expenses paid on revenues of $1.6 million; a decrease in landfill operating supplies of $1.3 million; a decrease in

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~~travel, meetings and training expenses of $1.2 million; a decrease in equipment rental expenses of $0.6 million and $1.9 million of other net expense decreases.~~$2.7 million.

Segment EBITDA in our Canada segment increased ~~$5.7~~$34.9 million, or ~~8.6%~~65.1%, to ~~$72.5~~$88.6 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from ~~$66.8~~$53.7 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The increase was comprised of an increase of ~~$6.2~~$28.2 million assuming foreign currency parity during the comparable reporting periods and ~~a decrease~~an increase of ~~$0.5~~$6.7 million from a ~~decrease in the~~higher average foreign currency exchange rate in effect during the comparable reporting periods. The ~~$6.2~~$28.2 million increase, which assumes foreign currency parity, was due primarily to an increase in revenues of $38.5 million, a decrease in ~~subcontracted hauling services at our solid waste operations~~supplemental bonuses and other cash incentive compensation to non-management personnel of $2.8 million due primarily to the impact of reversing expenses accrued in a prior period and incurring less expenses in the current period associated with estimated equipment charge overages related to an outsourced collection contract, $2.4 million of collective decreases in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting from economic disruptions caused by COVID-19, a decrease in labor expenses of $1.7$1.3 million due to the ~~receipt of a government subsidy reimbursing us for certain payroll expenditures remitted~~prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic a decrease in fuel expense of $1.5 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in insurance premium expense of $1.2 million due primarily to refunds received in the current period resulting from favorable workers’ compensation claim incident totals and a decrease in expenses for uncollectible accounts receivable of $1.1

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million primarily due to the prior year period incurring increased expenses due to customers experiencing financial difficulties resulting from the economic impact of the COVID-19 pandemic, partially offset by an increase in labor expenses of $4.3 million due primarily to employee pay increases and headcount additions to support solid waste volume increases, an increase in diesel fuel expense of $2.3 million due to higher fuel prices and increased consumption resulting from additional truck and equipment operating hours to support solid waste volume increases, an increase in third-party disposal expenses of $1.9 million due primarily to increased solid waste collection volumes, an increase in third-party trucking and transportation expenses of $1.2 million due primarily to ~~the current period collection~~increased transfer station and landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in truck, container, equipment and facility maintenance and repair expenses of ~~certain accounts deemed uncollectible~~$1.2 million due to parts and service rate increases and additional maintenance and repair requirements resulting from increased truck and equipment operating hours to support increases in ~~prior periods, partially offset by a decrease in revenues of $4.4 million~~our solid waste volumes and other net expense increases of ~~$0.2~~$1.8 million.

Segment EBITDA in our Canada segment ~~decreased $8.1~~increased $49.5 million, or ~~4.2%~~43.8%, to ~~$185.6~~$162.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$193.7~~$113.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase was comprised of ~~a decrease~~an increase of ~~$4.8~~$39.1 million assuming foreign currency parity during the comparable reporting periods and ~~a decrease~~an increase of ~~$3.3~~$10.4 million from a ~~decrease in the~~higher average foreign currency exchange rate in effect during the comparable reporting periods. The ~~$4.8~~$39.1 million ~~decrease,~~increase, which assumes foreign currency parity, was due primarily to an increase in revenues of $46.7 million, a decrease in ~~revenues~~expenses for uncollectible accounts receivable of ~~$21.6~~$1.9 million ~~additional~~primarily due to the prior year period incurring increased expenses ~~of $1.2 million~~due to customers experiencing financial difficulties resulting from the ~~payment of supplemental bonuses to non-management employees to provide financial assistance associated with the~~economic impact of the COVID-19 pandemic and an increase in other net expenses of $1.3 million, partially offset by collective decreases totaling $7.2 million in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting primarily from economic disruptions caused by COVID-19, a decrease in ~~fuel expense~~supplemental bonuses and other cash incentive compensation to non-management personnel of $4.4 million due to declines in the market price of diesel fuel, a decrease in subcontracted hauling services at our solid waste operations of $3.2 million due primarily to the impact of reversing expenses accrued in a prior period and incurring less expenses in the current period associated with estimated equipment charge overages related to an outsourced collection contract, a decrease in labor expenses of $1.7$1.4 million due to the ~~receipt of a government subsidy reimbursing us for certain payroll expenditures remitted~~prior year period including non-recurring expenses to recognize services provided by our front-line employees during the COVID-19 pandemic, ~~a decrease~~partially offset by an increase in ~~insurance premium expense~~labor expenses of ~~$1.5~~$4.3 million due primarily to ~~refunds received~~employee pay increases, an increase in ~~the current period resulting from favorable workers’ compensation claim incident totals and a collective decrease in travel, meeting, training, and community activity expenses~~diesel fuel expense of ~~$1.3~~$2.3 million due to ~~shelter at home~~higher fuel prices, an increase in third-party trucking and transportation expenses of $1.0 million due primarily to increased landfill special waste volumes requiring trucking and transportation services to our landfills, an increase in truck, container, equipment and facility maintenance and repair expenses of $1.0 million due to parts and service rate increases and other ~~restrictions on our employees due to COVID-19 resulting in the cancellation~~net expense increases of ~~non-essential off-site activities.~~$2.3 million.

Segment EBITDA at Corporate decreased $3.7 million, to a loss of ~~$4.1~~$6.4 million for the three months ended ~~September~~June 30, ~~2020,~~2021, from a loss of ~~$0.4~~$2.7 million for the three months ended ~~September~~June 30, ~~2019.~~2020. The decrease was due to an increase in ~~accrued cash incentive~~equity-based compensation ~~expense~~expenses of $5.3 million associated with an adjustment during the current year period of our common shares held in our deferred compensation plan by certain key executives to ~~our management~~fair value as a result of the shares being exchanged for other investment options, a collective increase in travel, meeting, training and ~~non-management employees~~community activity expenses of ~~$9.5~~$2.8 million due to event cancelation credits recognized in the prior year period and increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in equity-based compensation expenses of ~~$2.4~~$2.3 million resulting primarily from ~~an increased value of our recurring grant of restricted and performance share units to our personnel and~~ adjustments to the amount of performance-based restricted share units granted in ~~2018~~2019 and 2020 that are estimated to ultimately vest based on the achievement of required financial performance results and $0.5 million of other net expense increases, partially offset by an increase in ~~share-based compensation expenses~~corporate overhead allocated through charges to our segments of $1.7 million due primarily to increased share price volatility in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value, an increase in direct acquisition expenses of $1.3$4.8 million due to an increase in expenses qualifying for allocation, a decrease in deferred compensation expenses of $1.4 million as a result of higher increases during the prior year period in the market value of investments to which employee deferred compensation liability balances are tracked and a decrease in direct acquisition expenses of $1.0 million due to a decrease in acquisition activity in the comparable periods.

Segment EBITDA at Corporate decreased $0.9 million, to a loss of $7.2 million for the six months ended June 30, 2021, from a loss of $6.3 million for the six months ended June 30, 2020. The decrease was due to an increase in accrued recurring cash incentive compensation expense to our management of $8.8 million, an increase in deferred compensation expenses of ~~$1.2~~$4.2 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in ~~software licenses and subscriptions expenses of $0.9 million due primarily to the addition of new sales and customer service applications, an increase of $0.7 million in~~ equity-based compensation expenses of $2.0 million associated with ~~fair value~~the net impact of current and prior period adjustments ~~to Company~~of our common shares held in our deferred compensation plan by certain key executives ~~as a result of the shares being exchanged for other investment options and $1.8 million of other net expense increases, partially offset~~

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~~by an increase in corporate overhead allocated through charges~~ to our segments of $14.0 million due to an increase in expenses qualifying for allocation rates and a collective decrease in travel, meeting, training, office supplies and community activity expenses of $1.8 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities.

Segment EBITDA at Corporate increased $1.3 million, to a loss of $10.5 million for the nine months ended September 30, 2020, from a loss of $11.8 million for the nine months ended September 30, 2019. The increase was due to an increase in corporate overhead allocated through charges to our segments of $16.1 million due to an increase in expenses qualifying for allocation, a collective decrease in travel, meeting, training, office supplies and community activity expenses of $6.0 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in direct acquisition expenses of $3.6 million due to a decline in acquisition activity, a decrease in deferred compensation expenses of $3.0 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease in professional fees of $2.9 million due primarily to work on legal matters being postponed resulting from temporary court closures and a decrease in third party tax consulting expenses and a decrease in share-based compensation expenses of $1.7 million due primarily to decreased share price volatility and less outstanding shares in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value partially offset by an increase in accrued cash incentive compensation expense to our management and non-management employees of $18.4 million, an increase of $4.0 million in equity-based compensation expenses associated with fair value adjustments to Company common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, an increase in software licenses and subscriptions expenses of $2.2 million due primarily to the addition of new sales and customer service applications, an increase in payroll and payroll related expenses of $2.1 million due to annual pay increases and increased employee termination pay, an increase in equity-based compensation expenses of ~~$1.1~~$1.8 million resulting primarily from ~~the impact of an increased value of our recurring grant of restricted and performance share units to our personnel, net of~~ adjustments to the amount of performance-based restricted share units granted in 2019 and 2020 that are estimated to ultimately vest based on the achievement of required financial performance results, an increase in professional fees of $1.1 million due primarily to increased expenses

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associated with professional tax services, an increase in administrative payroll expenses of $1.0 million due primarily to annual pay increases and ~~$4.2~~$0.6 million of other net expense ~~increases.~~increases, partially offset by an increase in corporate overhead allocated through charges to our segments of $18.6 million due to an increase in expenses qualifying for allocation.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth certain cash flow information for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands of U.S. dollars):


	Nine Months Ended				Six Months Ended
	September 30,				June 30,
	2020		2019		2021		2020
Net cash provided by operating activities	$	1,185,573	$	1,185,430	$	848,478	$	753,185
Net cash used in investing activities		(650,066)		(885,672)		(332,794)		(359,956)
Net cash used in financing activities		(4,093)		(308,039)
Net cash provided by (used in) financing activities						(393,184)		67,515
Effect of exchange rate changes on cash, cash equivalents and restricted cash		980		143		873		(541)
Net increase (decrease) in cash, cash equivalents and restricted cash		532,394		(8,138)
Net increase in cash, cash equivalents and restricted cash						123,373		460,203
Cash, cash equivalents and restricted cash at beginning of period		423,221		403,966		714,389		423,221
Cash, cash equivalents and restricted cash at end of period	$	955,615	$	395,828	$	837,762	$	883,424

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Operating Activities Cash Flows

For the ~~nine~~six months ended ~~September~~June 30, 2021, net cash provided by operating activities was $848.5 million. For the six months ended June 30, 2020, net cash provided by operating activities was ~~$1.186 billion. For the nine months ended September 30, 2019, net cash provided by operating activities was $1.185 billion.~~$753.2 million. The ~~$0.1~~$95.3 million increase was due primarily to the following:

~~Accounts receivable~~Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by ~~$95.0~~$21.0 million from ~~accounts receivable, as changes in accounts receivable, net of acquisitions, resulted in~~ an increase to operating cash flows of $46.0 million for the nine months ended September 30, 2020, compared to a decrease to operating cash flows of $49.1 million for the nine months ended September 30, 2019. During the nine months ended September 30, 2020, net price increases of $168.0 million were offset by volume decreases in our solid waste business and E&P business of $199.8 million and $75.2 million, respectively. The net decrease in revenues resulting from volume losses in excess of price increases during the nine months ended September 30, 2020 contributed to a decrease in accounts receivable at September 30, 2020. During the nine months ended September 30, 2019, we recognized net price increases of $174.5 million and volume increases in our solid waste business and E&P business of $7.0 million and $12.5 million, respectively. The increase in revenues resulting from price and volume increases during the nine months ended September 30, 2019 contributed to an increase in accounts receivable at September 30, 2019.

~~Decrease in earnings —~~ ~~Our increase in net cash provided by operating activities was unfavorably impacted by $72.1 million from a decrease~~ in net income, excluding depreciation, amortization of intangibles, ~~amortization of leases, deferred income taxes,~~ share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed subsequent to the six months ended June 30, 2020, earnings generated from the increased sales of recyclable commodities and renewal energy credits associated with the generation of landfill gas and an increase in the average Canadian dollar to U.S. dollar currency exchange rate offsetting a decline in earnings at our E&P ~~operations,~~operations.

Deferred income taxes — Our increase in net cash provided by operating activities was favorably impacted by $70.3 million from deferred income taxes as ~~well as economic disruptions resulting from COVID-19, and additional~~changes in deferred income ~~tax expense due~~taxes resulted in an increase to operating cash flows of $3.5 million for the six months ended June 30, 2021, compared to a decrease to operating cash flows of $66.8 million for the six months ended June 30, 2020. The decrease in deferred taxes in the prior year period was attributable to the ~~finalization~~impairment of ~~tax regulations under Internal Revenue Code section 267A.~~certain assets within our E&P operations.

Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was ~~unfavorably~~favorably impacted by ~~$13.1~~$41.4 million from accounts payable and accrued ~~liabilities. Although certain operating expenses declined~~liabilities as ~~a result of solid waste~~changes in accounts payable and ~~E&P volume losses due~~accrued liabilities resulted in an increase to ~~economic disruptions resulting from COVID-19, our~~ operating cash flows ~~were adversely impacted from~~of $35.6 million for the six months ended June 30, 2021, compared to a decrease to operating cash flows of $5.8 million for the six months ended June 30, 2020. The increase for the six months ended June 30, 2021 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at June 30, 2021 and the timing of ~~vendor payments~~payroll cycles.

Other long-term liabilities — Our increase in net cash provided by operating activities was favorably impacted by $21.4 million from other long-term liabilities, as changes in other long-term liabilities resulted in an increase to operating cash flows of $10.6 million for the six months ended June 30, 2021, compared to a decrease to operating cash flows of $10.8 million for the six months ended June 30, 2020. The increase for the six months ended June 30, 2021 was primarily attributable to the receipt of funds associated with the eminent domain purchase of an operating facility that will be replaced with a newly constructed facility in a future period. The decrease for the six months ended June 30, 2020 was primarily attributable to declines in our deferred compensation liabilities due to distributions and ~~payroll cycles~~the cash settlement of equity awards accounted for as ~~well~~liabilities that were granted to employees of Progressive Waste prior to June 1, 2016.

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Deferred revenue — Our increase in net cash provided by operating activities was favorably impacted by $12.6 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $14.5 million for the six months ended June 30, 2021, compared to an increase to operating cash flows of $1.9 million for the six months ended June 30, 2020. During the six months ended June 30, 2021, deferred revenue increased due to price increases on our advanced billed residential and commercial collection services, the timing of bi-monthly advance service billings and a landfill in our Southern segment receiving an advance payment for future disposal services.

Accounts receivable – Our increase in net cash provided by operating activities was unfavorably impacted by $63.2 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of ~~higher~~$14.2 million for the six months ended June 30, 2021, compared to an increase to operating cash flows of $49.0 million for the six months ended June 30, 2020. The decrease for the six months ended June 30, 2021 was due to increases in revenues, which remained as outstanding ~~liabilities~~receivables at June 30, 2021. The increase for the six months ended June 30, 2020 was attributable to the collection of outstanding accounts receivable existing prior to the ~~recent~~COVID-19-driven economic ~~downturn. This decrease was partially offset by an increase in accrued payroll tax liabilities~~downturn, with accounts receivable at June 30, 2020 reflecting the impact of $29.2 million associated with our deferral of qualifying U.S. payroll and other tax payments as permitted by the CARES Act, an increase in liabilities for cash incentive compensation of $19.1 million and an increase in accrued interest expense liabilities of $7.2 million due to the timing of interest payments for our outstanding senior note obligations. We expect to defer approximately $45.0 million of U.S. payroll and other tax payments in 2020 under the CARES Act, of which 50% will be remitted in 2021 and 50% remitted in 2022.lower uncollected revenues.

As of ~~September~~June 30, ~~2020,~~2021, we had a working capital surplus of ~~$456.0~~$414.2 million, including cash and equivalents of ~~$859.1~~$727.4 million. Our working capital surplus increased ~~$332.6~~$34.6 million from a working capital surplus of ~~$123.4~~$379.6 million at December 31, ~~2019,~~2020 including cash and equivalents of ~~$326.7~~$617.3 million, due primarily to the impact of ~~increased~~increases in cash balances and accounts receivable being partially offset by ~~higher short-term contingent consideration liabilities, accrued liabilities~~deceased prepaid income taxes, increased accounts payable and ~~a reduction in accounts receivable.~~increased deferred revenue. To date, we have experienced no loss or lack of access to our cash and equivalents; however, we can provide no assurances that access to our cash and equivalents will not be impacted by adverse conditions in the financial markets. Our strategy in managing our working capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital expenditure requirements, along with share repurchase and dividend programs, to reduce the unhedged portion of our indebtedness under our Credit Agreement and to minimize our cash balances.

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Investing Activities Cash Flows

Net cash used in investing activities decreased ~~$235.6~~$27.2 million to ~~$650.1~~$332.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, from ~~$885.7~~$360.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The significant components of the decrease included the following:

A decrease in cash paid for acquisitions of ~~$246.6 million due primarily to a decrease in acquisitions closed during the nine months ended September 30, 2020;~~$18.8 million;

A decrease in capital expenditures for undeveloped landfill property of ~~$12.8~~$16.4 million ~~due to decreases in vehicles for our collection operations and equipment for our disposal operations exceeding capital expenditures for~~associated with expansion land at certain existing landfill ~~sites costs and expenditures for vehicles, containers and equipment purchased for operations acquired during, or subsequent to, the nine months ended September 30, 2019;~~facilities; less

An increase from ~~increased proceeds from the sale~~restricted asset accounts of ~~property and equipment of $8.9 million; less~~

~~An increase in capital expenditures for undeveloped landfill property of $35.1~~$6.2 million ~~attributable~~due to ~~expenditures during the nine months ended September 30, 2020 for expansion land at certain~~higher draws on existing landfill facilities exceeding expenditures during the nine months ended September 30, 2019 for the purchase of a greenfield landfill site in our Southern segment that will be developed into an operating locationaccounts in the ~~future.~~prior year period.

Financing Activities Cash Flows

Net cash used in financing activities ~~decreased $303.9~~increased $460.7 million to ~~$4.1 million for the nine months ended September 30, 2020, from~~ net cash used in financing activities of ~~$308.0~~$393.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2021, from net cash provided by financing activities of $67.5 million for the six months ended June 30, 2020. The significant components of the ~~decrease~~increase included the following:

~~A decrease~~An increase from the net change in long-term borrowings of ~~$447.4~~$262.0 million (long-term borrowings increased ~~$285.0~~$44.5 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~decreased $162.4~~increased $306.5 million during the ~~nine~~six months ended ~~September~~June 30, ~~2019)~~2020) due primarily to maintaining a portion of the proceeds from our 2050 Senior Notes offering in cash; ~~less~~

An increase in payments to repurchase our common shares of ~~$105.7~~$200.0 million ~~as we resumed our share repurchase activity during the nine months ended September 30, 2020; less~~due to a higher volume of shares repurchased; and

An increase in debt issuance costs of $5.2 million due to costs incurred during the nine months ended September 30, 2020 for our 2030 Senior Notes and 2050 Senior Notes exceeding costs incurred during the nine months ended September 30, 2019 for our 2029 Senior Notes; less

~~An increase in tax withholdings related to net share settlements of equity-based compensation of $5.8 million due to an increase in the value of equity-based compensation awards vesting; less~~

~~An increase in~~ cash dividends paid of ~~$19.6~~$10.4 million due primarily to an increase in our quarterly dividend rate for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 to ~~$0.185~~$0.205 per share, from ~~$0.16~~$0.185 per share for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020; less

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A decrease in debt issuance costs of $11.0 million due to the prior year period including costs incurred for the issuance of our 2030 Senior Notes and 2050 Senior Notes; and

A decrease in tax withholdings related to net share settlements of equity-based compensation of $4.8 million due to a decrease in the value of equity-based compensation awards vesting.

Our business is capital intensive. Our capital requirements include acquisitions and capital expenditures for landfill cell construction, landfill development, landfill closure activities and intermodal facility construction in the future.

On July 23, 2020, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 13,144,773 of our common shares during the period of August 10, 2020 to August 9, 2021 or until such earlier time as the NCIB is completed or terminated at our option. Shareholders may obtain a copy of our TSX Form 12 – Notice of Intention to Make a Normal Course Issuer Bid, without charge, by request directed to our ~~Senior~~Executive Vice President and Chief Financial Officer at (832) 442-2200. The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares and overall market conditions. All common shares purchased under the NCIB will be immediately cancelled following their repurchase. Information regarding our NCIB can be found under the “Shareholders’ Equity” section in Note 1817 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

~~Table~~On July 27, 2021, our Board of ~~Contents~~Directors approved, subject to receipt of regulatory approvals, the annual renewal of our NCIB. The renewal is expected to commence following the conclusion of our current NCIB expiring August 9, 2021. Upon approval, we anticipate that we will be authorized to make purchases during the period of August 10, 2021 to August 9, 2022 or until such earlier time as the NCIB is completed or terminated at our option.

Our Board of Directors authorized the initiation of a quarterly cash dividend in October 2010 and has increased it on an annual basis. ~~In October 2019, our Board of Directors authorized an increase to our regular quarterly cash dividend of $0.025, from $0.16 to $0.185 per share.~~ In October 2020, our Board of Directors authorized an increase to our regular quarterly cash dividend of $0.02, from $0.185 to $0.205 per share. Cash dividends of ~~$145.9~~$107.3 million and ~~$126.3~~$96.9 million were paid during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. We cannot assure you as to the amounts or timing of future dividends.

We made ~~$420.7~~$271.4 million in capital expenditures for property and equipment during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, and we expect to make total capital expenditures for property and equipment of approximately ~~$575~~$675 million in 2020. In addition, we made $66.8 million in capital expenditures for undeveloped landfill property during the nine months ended September 30, 2020 and may opportunistically make other capital expenditures for undeveloped landfill property in 2020.2021. We have funded and intend to fund the balance of our planned ~~2020~~2021 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement and 2021 Credit Agreement. In addition, we may make substantial additional capital expenditures in acquiring land and ~~municipal~~ solid ~~waste and E&P~~ waste businesses. If we acquire additional landfill disposal facilities, we may also have to make significant expenditures to bring them into compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We cannot currently determine the amount of these expenditures because they will depend on the number, nature, condition and permitted status of any acquired landfill disposal facilities. We believe that our cash and equivalents, 2021 Credit Agreement and the funds we expect to generate from operations will provide adequate cash to fund our working capital and other cash needs for the foreseeable future. However, disruptions in the capital and credit markets could adversely affect our ability to draw on our 2021 Credit Agreement or raise other capital. Our access to funds under the 2021 Credit Agreement is dependent on the ability of the banks that are parties to the agreement to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.

As of ~~September~~June 30, ~~2020,~~2021, $650.0 million under the term loan and ~~$178.7~~$505.0 million under the revolving credit facility were outstanding under our Credit Agreement, exclusive of outstanding standby letters of credit of ~~$125.9~~$114.4 million. We also have issued $7.2 million of letters of credit at June 30, 2021 under facilities other than the Credit Agreement. Our 2021 Credit Agreement matures in ~~March 2023.~~

On January 23, 2020, we completed an underwritten public offering of $600.0 million aggregate principal amount of 2.60% Senior Notes due 2030, or the 2030 Senior Notes. The 2030 Senior Notes were issued under the Indenture, dated as of November 16, 2018, by and between the Company and U.S. Bank National Association, as trustee, as supplemented by the Third Supplemental Indenture, dated as of January 23, 2020.

We will pay interest on the 2030 Senior Notes semi-annually in arrears and the 2030 Senior Notes will mature on February 1, 2030. The 2030 Senior Notes are senior unsecured obligations, ranking equally in right of payment with our other existing and future unsubordinated debt and senior to any of our future subordinated debt. The 2030 Senior Notes are not guaranteed by any of our subsidiaries.

On March 13, 2020, we completed an underwritten public offering of $500.0 million aggregate principal amount of 3.05% Senior Notes due 2050, or the 2050 Senior Notes. The 2050 Senior Notes were issued under the Indenture, dated as of November 16, 2018, by and between the Company and U.S. Bank National Association, as trustee, as supplemented by the Fourth Supplemental Indenture, dated as of March 13, 2020.

We will pay interest on the 2050 Senior Notes semi-annually in arrears and the 2050 Senior Notes will mature on April 1, 2050. The 2050 Senior Notes are senior unsecured obligations, ranking equally in right of payment with our other existing and future unsubordinated debt and senior to any of our future subordinated debt. The 2050 Senior Notes are not guaranteed by any of our subsidiaries.

~~See Note 11 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on the debt agreements.~~July 2026.

We are a well-known seasoned ~~issuer with an effective~~issuer. In the future, we may issue debt securities under a shelf registration statement on Form S-3 filed ~~in May 2018, which registers an unspecified amount of debt securities, including debentures, notes or other types of debt. In~~with the ~~future,~~

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~~we may issue debt securities under our shelf registration statement~~SEC or in private placements from time to time on an opportunistic basis, based on market conditions and available pricing. Unless otherwise indicated in the relevant offering documents, we expect to use the

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proceeds from any such offerings for general corporate purposes, including repaying, redeeming or repurchasing debt, acquiring additional assets or businesses, capital expenditures and increasing our working capital.

As of ~~September~~June 30, ~~2020,~~2021, we had the following contractual obligations:


	Payments Due by Period										Payments Due by Period
	(amounts in thousands of U.S. dollars)										(amounts in thousands of U.S. dollars)
			Less Than		1 to 3				Over 5				Less Than		1 to 3				Over 5
Recorded Obligations	Total		1 Year		Years		3 to 5 Years		Years		Total		1 Year		Years		3 to 5 Years		Years
Long-term debt	$	4,714,670	$	6,772	$	1,411,234	$	532,919	$	2,763,745	$	4,794,597	$	6,997	$	485,555	$	785,862	$	3,516,183
Cash interest payments	$	1,297,414	$	162,469	$	292,585	$	212,944	$	629,416	$	1,161,549	$	157,787	$	256,005	$	201,506	$	546,251
Contingent consideration	$	109,000	$	62,492	$	7,160	$	3,224	$	36,124	$	87,497	$	43,359	$	5,724	$	3,224	$	35,190
Operating leases	$	209,446	$	35,750	$	63,224	$	23,455	$	87,017	$	209,257	$	19,643	$	69,618	$	43,342	$	76,654
Final capping, closure and post-closure	$	1,527,763	$	5,454	$	65,995	$	13,750	$	1,442,564	$	1,481,936	$	16,306	$	41,295	$	9,525	$	1,414,810

____________________

Long-term debt payments include:

$~~178.7~~505.0 million in principal payments due ~~March 2023~~July 2026 related to our revolving credit facility under our 2021 Credit Agreement. We may elect to draw amounts on our 2021 Credit Agreement in U.S. dollar LIBOR rate loans, U.S. dollar base rate loans, Canadian-based bankers’ acceptances, and Canadian dollar prime rate loans. At ~~September~~June 30, ~~2020, $175.0~~2021, $501.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S. LIBOR rate loans, which bear interest at the LIBOR rate plus the applicable margin (for a total rate of ~~1.35%~~1.30% on such date) and ~~$3.7~~$4.0 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of ~~1.68%~~1.61% on such date).

$650.0 million in principal payments due ~~March 2023~~July 2026 related to our term loan under our 2021 Credit Agreement. Outstanding amounts on the term loan can be either base rate loans or LIBOR loans. At ~~September~~June 30, ~~2020,~~2021, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable margin (for a total rate of ~~1.35%~~1.30% on such date).

$100.0 million in principal payments due 2021 related to our 2021 Senior Notes. The 2021 Senior Notes bear interest at a rate of 4.64%. We have recorded this obligation in the payments due in 1 to 3 years category in the table above as we have the intent and ability to redeem the 2021 Senior Notes on April 1, 2021 using borrowings under our Credit Agreement.

$150.0 million in principal payments due 2021 related to our New 2021 Senior Notes. The New 2021 Senior Notes bear interest at a rate of 2.39%. We have recorded this obligation in the payments due in 1 to 3 years category in the table above as we have the intent and ability to redeem the New 2021 Senior Notes on June 1, 2021 using borrowings under our Credit Agreement.

$125.0 million in principal payments due 2022 related to our 2022 Senior Notes. The 2022 Senior Notes bear interest at a rate of 3.09%.

6)4)

$200.0 million in principal payments due 2023 related to our 2023 Senior Notes. The 2023 Senior Notes bear interest at a rate of 2.75%.

7)5)

$150.0 million in principal payments due 2024 related to our 2024 Senior Notes. The 2024 Senior Notes bear interest at a rate of 3.24%.

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8)6)

$375.0 million in principal payments due 2025 related to our 2025 Senior Notes. The 2025 Senior Notes bear interest at a rate of 3.41%.

9)7)

$400.0 million in principal payments due 2026 related to our 2026 Senior Notes. The 2026 Senior Notes bear interest at a rate of 3.03%.

~~10)~~8)

$250.0 million in principal payments due 2027 related to our 2027 Senior Notes. The 2027 Senior Notes bear interest at a rate of 3.49%.

~~11)~~9)

$500.0 million in principal payments due 2028 related to our 2028 Senior Notes. The 2028 Senior Notes bear interest at a rate of 4.25%.

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~~12)~~10)

$500.0 million in principal payments due 2029 related to our 2029 Senior Notes. The 2029 Senior Notes bear interest at a rate of 3.50%.

~~13)~~11)

$600.0 million in principal payments due 2030 related to our 2030 Senior Notes. The 2030 Senior Notes bear interest at a rate of 2.60%.

~~14)~~12)

$500.0 million in principal payments due 2050 related to our 2050 Senior Notes. The 2050 Senior Notes bear interest at a rate of 3.05%.

~~15)~~13)

$~~43.2~~37.2 million in principal payments related to our notes payable to sellers and other third parties. Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at ~~September~~June 30, ~~2020,~~2021, and have maturity dates ranging from ~~2021~~2028 to 2036.

14)

$9.4 million in principal payments related to our financing leases. Our financing leases bear interest at a rate of 1.89% at June 30, 2021, and have a lease expiration date of 2026.

The following assumptions were made in calculating cash interest payments:

We calculated cash interest payments on the Credit Agreement using the LIBOR rate plus the applicable LIBOR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at ~~September~~June 30, ~~2020.~~2021. We assumed the 2021 Credit Agreement is paid off when it matures in ~~March 2023.~~July 2026.

We calculated cash interest payments on our interest rate swaps using the stated interest rate in the swap agreement less the LIBOR rate through the earlier expiration of the term of the swaps or the term of the credit facility.

Contingent consideration payments include ~~$88.5~~$68.0 million recorded as liabilities in our Condensed Consolidated Financial Statements at ~~September~~June 30, ~~2020,~~2021, and ~~$20.5~~$19.5 million of future interest accretion on the recorded obligations.

We are party to operating lease ~~agreements.~~agreements and finance leases. These lease agreements are established in the ordinary course of our business and are designed to provide us with access to facilities and equipment at competitive, market-driven prices.

The estimated final capping, closure and post-closure expenditures presented above are in current dollars.


	Amount of Commitment Expiration Per Period										Amount of Commitment Expiration Per Period
	(amounts in thousands of U.S. dollars)										(amounts in thousands of U.S. dollars)
			Less Than		1 to 3		3 to 5		Over 5				Less Than		1 to 3		3 to 5		Over 5
Unrecorded Obligations⁽¹⁾	Total		1 Year		Years		Years		Years		Total		1 Year		Years		Years		Years
Unconditional purchase obligations	$	138,217	$	89,523	$	48,694	$	—	$	—	$	93,547	$	69,644	$	23,903	$	—	$	—

____________________

(1)

We are party to unconditional purchase obligations. These purchase obligations are established in the ordinary course of our business and are designed to provide us with access to products at competitive, market-driven prices. At ~~September~~June 30, ~~2020,~~2021, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have ~~54.8~~37.7 million gallons remaining to be purchased for a total of ~~$138.2~~$93.5 million. The current fuel purchase contracts expire on or before December 31, ~~2022.~~2023. These arrangements have not materially affected our financial position, results of operations or

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liquidity during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

We have obtained financial surety bonds, primarily to support our financial assurance needs and landfill and E&P operations. We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately ~~$1.181~~$1.255 billion and ~~$1.081~~$1.210 billion at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. These arrangements have not materially affected our financial position, results of operations or liquidity during the ~~nine~~six months

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ended ~~September~~June 30, ~~2020,~~2021, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

From time to time, we evaluate our existing operations and their strategic importance to us. If we determine that a given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations. Although we believe our reporting units would not be impaired by such dispositions, we could incur losses on them.

The disposal tonnage that we received in the ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, at all of our landfills during the respective period, is shown below (tons in thousands):


	Nine Months Ended September 30,				Six Months Ended June 30,
	2020		2019		2021		2020
	Number	Total	Number	Total	Number	Total	Number	Total
	of Sites	Tons	of Sites	Tons	of Sites	Tons	of Sites	Tons
Owned operational landfills and landfills operated under life-of-site agreements	89	33,268	92	35,412	87	22,622	88	21,522
Operated landfills	4	413	4	433	4	274	4	274
	93	33,681	96	35,845	91	22,896	92	21,796

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NON-GAAP FINANCIAL MEASURES

Adjusted Free Cash Flow

We present adjusted free cash flow, a non-GAAP financial measure, supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We define adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment and distributions to noncontrolling interests. We further adjust this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently. Our adjusted free cash flow for the ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, are calculated as follows (amounts in thousands of U.S. dollars):


	Nine Months Ended				Six Months Ended
	September 30,				June 30,
	2020		2019		2021		2020
Net cash provided by operating activities	$	1,185,573	$	1,185,430	$	848,478	$	753,185
Plus (less): Change in book overdraft		(862)		1,911
Less: Change in book overdraft						(190)		(606)
Plus: Proceeds from disposal of assets		11,564		2,626		7,906		10,642
Less: Capital expenditures for property and equipment		(420,694)		(433,526)		(271,392)		(268,711)
Less: Distributions to noncontrolling interests		—		(117)
Adjustments:
Payment of contingent consideration recorded in earnings ^(a)						520		—
Cash received for divestitures ^(a)(b)		(4,974)		(2,376)		—		(4,974)
Transaction-related expenses ^(b)(c)		4,497		8,057		583		2,162
Pre-existing Progressive Waste share-based grants ^(c)(d)		7,455		4,306		144		6,440
Tax effect ^(d)(e)		(4,168)		(3,375)		(214)		(3,569)
Adjusted free cash flow	$	778,391	$	762,936	$	585,835	$	494,569

____________________

(a)	Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of cash flows from operating activities as the amounts paid exceeded the fair value of the contingent consideration recorded at the acquisition date.

(b)	Reflects the elimination of cash received in conjunction with the divestiture of certain operations.

~~(b)~~(c)

Reflects the addback of acquisition-related transaction costs.

~~(c)~~(d)

Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.

~~(d)~~(e)

The aggregate tax effect of footnotes (a) through ~~(c)~~(d) is calculated based on the applied tax rates for the respective periods.

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Adjusted EBITDA

We present adjusted EBITDA, a non-GAAP financial measure, supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry. Management uses adjusted EBITDA as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We define adjusted EBITDA as net income (loss) attributable to Waste Connections, plus or minus net ~~loss~~income (loss) attributable to noncontrolling interests, plus or minus income tax provision (benefit), plus interest expense, less interest income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on impairments and other operating items, plus other expense, less other income. We further adjust this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted EBITDA differently. Our adjusted EBITDA for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, are calculated as follows (amounts in thousands of U.S. dollars):


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Net income attributable to Waste Connections	$	158,049	$	159,109	$	74,012	$	433,579
Less: Net loss attributable to noncontrolling interests		(58)		(35)		(594)		(89)
Plus: Income tax provision		33,657		42,783		23,654		110,539
Net income (loss) attributable to Waste Connections									$	177,047	$	(227,072)	$	337,356	$	(84,037)
Plus (less): Net income (loss) attributable to noncontrolling interests										54		(395)		52		(536)
Plus (less): Income tax provision (benefit)										47,868		(38,737)		88,159		(10,003)
Plus: Interest expense		40,636		36,780		119,562		111,313		41,328		40,936		83,753		78,926
Less: Interest income		(903)		(2,056)		(4,396)		(7,186)		(744)		(1,317)		(1,848)		(3,493)
Plus: Depreciation and amortization		190,243		189,928		555,703		555,437		201,928		183,001		391,523		365,460
Plus: Closure and post-closure accretion		3,723		3,649		11,340		10,821		3,666		3,709		7,375		7,617
Plus: Impairments and other operating items		3,805		12,935		442,582		32,949		6,081		437,270		6,715		438,777
Plus (less): Other expense (income), net		(702)		19		3,046		(4,562)		1,235		(5,772)		(2,312)		3,749
Adjustments:
Plus: Transaction-related expenses ^(a)		2,335		1,036		4,497		8,057		57		1,016		583		2,162
Plus (less): Fair value changes to equity awards ^(b)		1,798		(589)		6,021		3,693
Plus: Fair value changes to equity awards ^(b)										6,385		1,683		6,723		4,223
Adjusted EBITDA	$	432,583	$	443,559	$	1,235,427	$	1,254,551	$	484,905	$	394,322	$	918,079	$	802,845

____________________

(a)	Reflects the addback of acquisition-related transaction costs.

(b)	Reflects fair value accounting changes associated with certain equity awards.

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Adjusted Net Income Attributable to Waste Connections and Adjusted Net Income per Diluted Share Attributable to Waste Connections

We present adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections, both non-GAAP financial measures, supplementally because they are widely used by investors as a valuation measure in the solid waste industry. Management uses adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income attributable to Waste Connections to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income attributable to Waste Connections has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently. Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, are calculated as follows (amounts in thousands of U.S. dollars, except per share amounts):


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Reported net income attributable to Waste Connections	$	158,049	$	159,109	$	74,012	$	433,579
Reported net income (loss) attributable to Waste Connections									$	177,047	$	(227,072)	$	337,356	$	(84,037)
Adjustments:
Amortization of intangibles ^(a)		32,653		31,934		96,062		93,821		32,707		31,771		64,899		63,409
Impairments and other operating items ^(b)		3,805		12,935		442,582		32,949		6,081		437,270		6,715		438,777
Transaction-related expenses ^(c)		2,335		1,036		4,497		8,057		57		1,016		583		2,162
Fair value changes to equity awards ^(d)		1,798		(589)		6,021		3,693		6,385		1,683		6,723		4,223
Tax effect ^(e)		(10,000)		(11,486)		(137,523)		(33,955)		(11,393)		(118,220)		(19,935)		(127,523)
Tax items ^(f)		—		—		31,508		—		—		31,508		—		31,508
Adjusted net income attributable to Waste Connections	$	188,640	$	192,939	$	517,159	$	538,144	$	210,884	$	157,956	$	396,341	$	328,519

Diluted earnings per common share attributable to Waste Connections’ common shareholders:
Reported net income	$	0.60	$	0.60	$	0.28	$	1.64
Diluted earnings (loss) per common share attributable to Waste Connections’ common shareholders:
Reported net income (loss)									$	0.68	$	(0.86)	$	1.29	$	(0.32)
Adjusted net income	$	0.72	$	0.73	$	1.96	$	2.03	$	0.81	$	0.60	$	1.51	$	1.25

Shares used in the per share calculations:
Reported diluted shares										261,418,573		262,994,275		262,269,600		263,390,685
Adjusted diluted shares ^(g)										261,418,573		263,317,054		262,269,600		263,833,471

____________________

(a)	Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.

(b)	Reflects the addback of impairments and other operating items.

(c)	Reflects the addback of acquisition-related transaction costs.

(d)	Reflects fair value accounting changes associated with certain equity awards.

(e)	The aggregate tax effect of the adjustments in footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods.

(f)

Reflects the impact of a portion of our 2019 ~~related-party~~inter-entity payments no longer being deductible for tax purposes due to the finalization of tax regulations on April 7, 2020 under Internal Revenue Code section 267A and an increase in deferred tax liabilities resulting from the E&P impairment.

(g)	Reflects reported diluted shares adjusted for shares that were excluded from the reported diluted shares calculation due to our reporting a net loss during the three and six months ended June 30, 2020.

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INFLATION

~~Other than volatility in~~In the current environment, we have seen inflationary pressures resulting from higher fuel ~~prices, third party brokerage~~ and labor costs in certain markets ~~inflation has not materially affected our operations~~and higher resulting third party costs in ~~recent years.~~areas such as brokerage, repairs and construction. Consistent with industry practice, many of our contracts allow us to pass through certain costs to our customers, including increases in landfill tipping fees and, in some cases, fuel costs. To the extent that there are decreases in fuel costs, in some cases, a portion of these reductions are passed through to customers in the form of lower fuel and material surcharges. Therefore, we believe that we should be able to increase prices to offset many cost increases that result from inflation in the ordinary course of business. However, competitive pressures or delays in the timing of rate increases under certain of our contracts, particularly amid the economic impact of the COVID-19 pandemic, may

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require us to absorb at least part of these cost increases, especially if cost increases exceed the average rate of inflation. Management’s estimates associated with inflation have an impact on our accounting for landfill liabilities.

SEASONALITY

Based on historic trends, excluding any impact from the COVID-19 pandemic or an economic recession, we would expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters and lower in the fourth quarter than in the second and third quarters. This seasonality reflects (a) the lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during winter months in Canada and the U.S. and (b) reduced E&P activity during harsh weather conditions, with expected fluctuation due to such seasonality between our highest and lowest quarters of approximately ~~12%~~10%. In addition, some of our operating costs may be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and operational costs. Greater precipitation in the winter increases the weight of collected municipal solid waste, resulting in higher disposal costs, which are calculated on a per ton basis.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to market risk, including changes in interest rates and prices of certain ~~commodities.~~commodities, and to a lesser extent, foreign currency exchange rate risks. We use hedge agreements to manage a portion of our risks related to interest rates and fuel prices. While we are exposed to credit risk in the event of non-performance by counterparties to our hedge agreements, in all cases such counterparties are highly rated financial institutions and we do not anticipate non-performance under current market conditions. We do not hold or issue derivative financial instruments for trading purposes. We monitor our hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses over the unhedged fuel and variable rate debt positions.

At ~~September~~June 30, ~~2020,~~2021, our derivative instruments included 10six interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands of U.S. dollars):


			Fixed		Variable					Fixed		Variable
	Notional		Interest		Interest Rate		Expiration	Notional		Interest		Interest Rate		Expiration
Date Entered	Amount		Rate Paid*		Received	Effective Date	Date	Amount		Rate Paid*		Received	Effective Date	Date
May 2014	$	50,000	2.344	%	1-month LIBOR	October 2015	October 2020
May 2014	$	25,000	2.326	%	1-month LIBOR	October 2015	October 2020
May 2014	$	50,000	2.350	%	1-month LIBOR	October 2015	October 2020
May 2014	$	50,000	2.350	%	1-month LIBOR	October 2015	October 2020
August 2017	$	100,000	1.900	%	1-month LIBOR	July 2019	July 2022	$	100,000	1.900	%	1-month LIBOR	July 2019	July 2022
August 2017	$	200,000	2.200	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.200	%	1-month LIBOR	October 2020	October 2025
August 2017	$	150,000	1.950	%	1-month LIBOR	February 2020	February 2023	$	150,000	1.950	%	1-month LIBOR	February 2020	February 2023
June 2018	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025
June 2018	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025	$	200,000	2.925	%	1-month LIBOR	October 2020	October 2025
December 2018	$	200,000	2.850	%	1-month LIBOR	July 2022	July 2027	$	200,000	2.850	%	1-month LIBOR	July 2022	July 2027

____________________

* Plus applicable margin.

On September 28, 2020, we terminated four of our interest rate swaps with notional amounts of $150.0 million, $150.0 million, $50.0 million and $50.0 million, each of which would have expired in January 2021. As a result of terminating these interest rate swaps, we made total cash payments of $0.9 million to the counterparties of the swap agreements.

Under derivatives and hedging guidance, the interest rate swap agreements are considered cash flow hedges for a portion of our variable rate debt, and we apply hedge accounting to account for these instruments. The notional amounts and all other significant terms of the swap agreements are matched to the provisions and terms of the variable rate debt being hedged.

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We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our unhedged floating rate debt. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions. Actual market movements may vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, of ~~$3.7~~$305.0 million and ~~$766.2~~$3.7 million, respectively, including floating rate debt under our Credit Agreement. A one percentage point increase in interest rates on our variable-rate debt as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, would decrease our annual pre-tax income by approximately ~~$0.1~~$3.0 million and ~~$7.7~~$0.1 million, respectively. All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above; therefore, changes in market interest rates under these instruments would not significantly impact our cash flows or results of operations, subject to counterparty default risk.

The market price of diesel fuel is unpredictable and can fluctuate significantly. Because of the volume of fuel we purchase each year, a significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, we periodically enter into fuel hedge agreements related to forecasted diesel fuel purchases, and we also enter into fixed price fuel purchase contracts. At ~~September~~June 30, ~~2020,~~2021, we had no fuel hedge agreements in place; however, we have entered into fixed price fuel purchase contracts for ~~2020~~2021 as described below.

For the year ending December 31, ~~2020,~~2021, we expect to purchase approximately ~~79.9~~79.7 million gallons of fuel, of which ~~44.2~~40.8 million gallons will be purchased at market prices and ~~35.7~~38.9 million gallons will be purchased under our fixed price fuel purchase contracts. We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our unhedged, market rate diesel fuel purchases. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions. Actual market movements may vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. During the ~~three~~six month period of ~~October~~July 1, ~~2020~~2021 to December 31, ~~2020,~~2021, we expect to purchase approximately ~~11.1~~20.4 million gallons of fuel at market prices; therefore, a $0.10 per gallon increase in the price of fuel over the remaining ~~three~~six months in ~~2020~~2021 would decrease our pre-tax income during this period by approximately ~~$1.1~~$2.0 million.

We market a variety of recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles and ferrous and aluminum metals. We own and operate recycling operations and market ~~other~~ collected recyclable materials to third parties for processing before resale. Where possible, to reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties. In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, would have had a ~~$5.8~~$7.2 million and ~~$4.9~~$3.7 million impact on revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

We have operations in Canada and, where significant, we have quantified and described the impact of foreign currency translation on components of income, including operating revenue and operating costs. However, the impact of foreign currency has not materially affected our results of operations in ~~2019~~2020 or ~~2020.~~2021. A $0.01 change in the Canadian dollar to U.S. dollar exchange rate would impact our annual revenue and EBITDA by approximately ~~$9.4~~$10.5 million and ~~$3.4~~$4.2 million, respectively.

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Item 4.Controls and Procedures

As required by Rule 13a-15(b) under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our ~~Senior~~Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on this evaluation, our President and Chief Executive Officer and our ~~Senior~~Executive Vice President and Chief Financial Officer concluded as of ~~September~~June 30, ~~2020,~~2021, that our disclosure controls and procedures were effective at the reasonable assurance level such that information required to be disclosed in our Exchange Act reports: (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) is accumulated and communicated to our management, including our President and Chief Executive Officer and ~~Senior~~Executive Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended ~~September~~June 30, ~~2020,~~2021, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1.Legal Proceedings

Information regarding our legal proceedings can be found in Note 1918 of our Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and is incorporated herein by reference.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

On July 27, 2021, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal ‎of our NCIB. The ‎renewal is expected to commence following the conclusion of our current NCIB expiring August 9, 2021. Upon ‎approval, we anticipate that we will be authorized to make purchases during the period of August 10, 2021 to August 9, ‎‎2022 or until such earlier time as the NCIB is completed or terminated at our option‎. Under the NCIB, we may make share repurchases only in the open market, including on the NYSE, the TSX, and/or alternative Canadian trading systems, at the prevailing market price at the time of the transaction. The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of the common shares and overall market conditions. All common shares purchased under the NCIB shall be immediately cancelled following their repurchase. As of June 30, 2021, we have repurchased 2.7 million of our common shares pursuant to the NCIB at an aggregate cost of $305.6 million, or an average price of $111.30 per share. The table below reflects repurchases we made during the three months ended June 30, 2021 (in thousands of U.S. dollars, except share and per share amounts):


				Total Number of	Maximum Number
				Shares Purchased	of Shares that
	Total Number	Average		as Part of Publicly	May Yet Be
	of Shares	Price Paid		Announced	Purchased Under
Period	Purchased	Per Share ⁽¹⁾		Program	the Program
4/1/21 - 4/30/21	1,879,806	$	114.86	1,879,806	10,598,783
5/1/21 - 5/31/21	200,000	$	118.62	200,000	10,398,783
6/1/21 - 6/30/21	—	$	-	—	10,398,783
	2,079,806	$	115.22	2,079,806

(1)

This amount represents the weighted average price paid per common share. This price includes a per share commission paid for all repurchases.

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Item 6.Exhibits

Exhibit Number		Description of Exhibits
3.1		Articles of Amendment (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on May 26, 2017)
3.2		Articles of Amalgamation (incorporated by reference to Exhibit 3.2 of the Registrant’s Form 8-K filed on June 7, 2016)
3.3		Articles of Amendment (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on June 7, 2016)
3.4		By-law No. 1 of the Registrant (incorporated by reference to Exhibit 3.3 of the Registrant’s Form 8-K filed on June 7, 2016)
~~10.1~~4.1		~~Separation Benefits Plan Participation Letter~~Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 30, 2021 (incorporated by ~~and between Waste Connections US, Inc. and Jason Craft, effective~~reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on July ~~1, 2020~~30, 2021)
31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. §1350
32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. §1350
101.INS		The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	WASTE CONNECTIONS, INC.

Date: ~~October 29, 2020~~August 5, 2021	BY:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		President and Chief Executive Officer

Date: ~~October 29, 2020~~August 5, 2021	BY:	/s/ Mary Anne Whitney
		Mary Anne Whitney
		~~Senior~~Executive Vice President and Chief Financial Officer

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		Page
PART I – FINANCIAL INFORMATION (unaudited)
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Net Income (Loss)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3734
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6762
Item 4.	Controls and Procedures	6964
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	7065
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 6.	Exhibits	7066
Signatures		7167