What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-29 compared with 2023-02-23 · 38 added, 29 removed, 299 unchanged (18% of the section changed)

11 unchanged sentences

• fluctuations in prices for recycled commodities that we sell to customers;

• our ability to integrate the operations of US Ecology into our operations and to realize the intended benefits of such acquisition

• whether our estimates and assumptions concerning critical accounting issues are correct or appropriate, including estimates and assumptions concerning selected balance sheet accounts, income tax accounts, final capping, closure, post-closure and remediation costs, available airspace, projected costs and expenses related to our landfills and property and equipment, fair values of acquired assets and liabilities assumed in our acquisitions and labor, fuel rates and economic and inflationary trends;

2 unchanged sentences

• our ability to manage growth and execute our growth strategy;

• our compliance with, and future changes in, environmental and flow control regulations and our ability to obtain approvals from regulatory agencies in connection with operating and expanding our landfills;

• the impact on us of our substantial indebtedness, including on our ability to obtain financing on acceptable terms to finance our operations and growth strategy and to operate within the limitations imposed by financing arrangements;

33 unchanged sentences

In certain markets in which we do not own or operate a landfill, our collection operations may have difficulty competing effectively.

We are also subject to risks associated with contracts awarded by municipalities and other entities through competitive bidding.

For example, we may not be the successful bidder, we may need to lower our price in order to win or retain a contract, and our competitors may have lower financial

expectations that permit them to reduce their prices in order to win a contract.

If we were to lose market share or if we were to lower prices to address competitive issues, it could negatively impact our consolidated financial condition, results of operations and cash flows.

26 unchanged sentences

These limitations significantly decreased the global demand for recyclable materials and resulted in lower commodity prices.

Significant price fluctuations or increased operating costs may affect our consolidated financial condition, results of operations

and cash flows.

Significant price fluctuations or increased operating costs may affect our consolidated financial condition, results of operations and cash flows.

In 2023, approximately 82% of our recycling center volume was fiber based and included OCC, ONP and other mixed paper.

2 unchanged sentences

Although we have entered into hedging agreements to help offset volatility in recycled commodity prices in the past, we may not enter into these agreements in the future.

Acute and chronic weather events, including those brought about by climate change, may limit our operations and increase the costs of collection, transfer, disposal and other environmental services we provide.

Acute and chronic weather events, including those brought about by climate change, may adversely impact our operations and increase the costs of collection, transfer, disposal and other environmental services we provide.

Our operations could be adversely impacted by extreme weather events, changing weather patterns and rising mean temperature and sea levels, some of which we are already experiencing.

19 unchanged sentences

In addition, we may have to dispose collected waste at landfills operated by our competitors or haul the waste long distances at a higher cost to one of our other landfills, either of which could significantly increase our waste disposal costs.

If we do not appropriately estimate landfill capping, closure, post-closure and remediation costs, our financial condition and results of operations may be adversely affected.

If we do not appropriately estimate landfill capping, closure, post-closure and remediation costs, our consolidated financial condition and results of operations may be adversely affected.

A landfill must be closed and capped, and post-closure maintenance commenced, once the landfill's permitted capacity is reached and additional capacity is not authorized.

1 unchanged sentence

We have significant financial obligations relating to capping, closure, post-closure and remediation costs at our existing owned or operated landfills, and will have material financial obligations with respect to any future owned or operated landfills.

We establish accruals for the estimated costs associated with capping, closure, post-closure and remediation

We establish accruals for the estimated costs associated with capping, closure, post-closure and remediation obligations.

We could underestimate such costs and our financial obligations for capping, closure, post-closure or remediation costs could exceed the amounts accrued or amounts otherwise receivable pursuant to trust funds established for this purpose.

12 unchanged sentences

In accordance with the accounting principles generally accepted in the United States of America (U.S.

GAAP), we capitalize certain expenditures relating to development, expansion and other projects.

GAAP), we capitalize certain expenditures relating to the development and expansion of landfills, transfer stations and other projects.

If a facility or operation is permanently shut down or determined to be impaired, or a development, expansion or other project is not completed or is determined to be impaired, we will charge against earnings any unamortized capitalized expenditures relating to such facility or project that we are unable to recover through sale, transfer or otherwise.

14 unchanged sentences

Climate change and other sustainability matters are embedded in our core value and vision.

As part of our strategic long-term plans to address sustainability, we are committed to reducing our absolute Scope 1 and Scope 2 greenhouse gas emissions 35% by 2030 among other sustainability goals.

The execution of our plans and achievement of our goals are subject to risks and uncertainties, including our ability to develop, obtain, license or scale the innovations, technologies and modeling and measurement tools that may be necessary to achieve our plans and the availability, cost and benefits of materials and infrastructure associated with our sustainability projects, such as our CNG vehicles, fleet electrification, recycling, circularity of key materials, landfill gas-to-energy and other renewable energy projects.

In addition, increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, diligence and disclosure on topics such as climate change, waste production, water usage, human capital, management and risk oversight, could expand the nature, scope and complexity of matters that we are required to control, assess and report.

As part of our strategic long-term plans to address sustainability, among other sustainability goals, we are committed to reducing our absolute Scope 1 and Scope 2 greenhouse gas emissions 35% by 2030 relative to the 2017 baseline year.

benefits of materials and infrastructure associated with our sustainability projects, such as our CNG vehicles, fleet electrification, recycling, circularity of key materials, landfill gas-to-energy and other renewable energy projects.

In addition, increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, diligence and disclosure on topics such as climate change, waste production, water usage, talent management and risk oversight, could expand the nature, scope and complexity of matters that we are required to control, assess and report.

These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for us.

1 unchanged sentence

Risks Related to our Legal and Regulatory Environment

We are subject to costly environmental regulations and flow-control regulations that may affect our operating margins, restrict our operations and subject us to additional liability.

We are subject to costly environmental and flow-control regulations and requirements that may affect our operating margins, restrict our operations and subject us to additional liability.

Complying with laws and regulations governing the collection, treatment, storage, transfer and disposal of material, air quality and emissions of greenhouse gases, water quality and the remediation of contamination associated with the release of hazardous substances is costly.

3 unchanged sentences

For example, the EPA has indicated it is considering listing certain PFAS as hazardous substances under CERCLA, which if finalized could trigger additional obligations or liabilities under CERCLA or other laws and regulations.

Further, under certain municipal and other agreements, we are subject to landfill diversion requirements that if not met, subject us to liquidated damages and other costs and expenses, the result of which could adversely affect our business, reputation and operating margins.

Our Group 3 operations and facilities also are subject to Canadian environmental laws and regulations, including federal and provincial regulations governing the management of hazardous waste, as well as various treaties, laws and regulations governing the ownership, operation and maintenance of maritime vessels used in the business.

14 unchanged sentences

On August 16, 2016, the EPA and the NHTSA issued additional regulations that would impose more stringent standards for heavy-duty vehicles through model-year 2027.

These standards and further federal efforts to curtail greenhouse gas emissions and to

increase the fuel efficiency of light-duty and heavy-duty vehicles could have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

For further discussion, see Item 1.

Business – Regulation – Federal Regulation – The Clean Air Act , in this Annual Report on Form 10-K.

These standards and further federal efforts to curtail greenhouse gas emissions and to increase the fuel efficiency of light-duty and heavy-duty vehicles could have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

With regard to greenhouse gas emissions from our landfills, on July 14, 2016, the EPA issued amendments to its regulations that require large landfills that commenced construction, reconstruction or modification on or after July 17, 2014 to capture additional landfill gas to reduce emissions of methane and certain non-methane gases, which are recognized as greenhouse gases.

4 unchanged sentences

We cannot predict what other actions or regulations the current administration may undertake that would affect our industry.

In Canada, the federal Greenhouse Gas Pollution Pricing Act imposes a carbon pricing system for industry in provinces and territories that have not implemented carbon pricing systems of their own or, in the opinion of the federal government, have implemented carbon pricing systems that do not align with the federal benchmark requirements.

This federal system imposes a carbon levy to the sale of fuel and sets out an output-based pricing system that applies to industrial emitters that meet certain criteria set out in the statute and its regulations, which creates a price incentive for industrial emitters to reduce greenhouse gas emissions by establishing a regulatory trading system for industry.

The carbon levy on fuel is administered by the Canada Revenue Agency and is a carbon tax that applies to the sale of 22 different types of fuel as set out in the statute and its regulations.

As of 2024, the Fuel Charge is $80 per ton of CO2e and will increase to $170 per ton by 2030.

Both direct and indirect costs associated with compliance with this and other greenhouse gas legislation could have a material adverse effect on our consolidated financial condition, results of operations and cash flows, including material increases to our capital or operating costs related to matters such as infrastructure upgrades or increased fuel costs.

We may incur losses from liabilities that are not covered by our insurance.

19 unchanged sentences

As a result, we may be required to pay fines or judgments or implement corrective measures, or we may have our permits and licenses modified or revoked.

A significant judgment against us, the loss of a significant permit or license, or the imposition of a significant fine could have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

A significant judgment against us or settlement, the loss of a significant permit or license, or the imposition of a significant fine could have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

We establish accruals for our estimates of the costs associated with lawsuits, regulatory, governmental and other legal proceedings.

21 unchanged sentences

Weakness in the United States economy may expose us to credit risk for amounts due from governmental entities, large national accounts, industrial customers and others.

Weakness in the United States economy, including contractions caused by the COVID-19 pandemic, reduces the amount of taxes collected by various governmental entities.

Weakness in the United States economy can reduce the amount of taxes collected by various governmental entities.

We provide services to a number of these entities, including numerous municipalities.

7 unchanged sentences

Actual results may differ from these amounts.

Significant items requiring management to make subjective or complex judgments that are inherently uncertain include the recoverability of long-lived assets, the depletion and amortization of landfill development costs, accruals for final capping, closure and post-closure costs, valuation allowances for accounts receivable and deferred tax assets, liabilities for potential litigation, claims and assessments and liabilities for environmental remediation, multiemployer pension plans, employee benefit plans, deferred taxes, uncertain tax positions, insurance and our estimates of the fair values of assets acquired and liabilities assumed in any acquisition.

Significant items requiring management to make subjective or complex judgments that are inherently uncertain include the recoverability of long-lived assets, the depletion

and amortization of landfill development costs, accruals for final capping, closure and post-closure costs, valuation allowances for accounts receivable and deferred tax assets, liabilities for potential litigation, claims and assessments and liabilities for environmental remediation, multiemployer pension plans, employee benefit plans, deferred taxes, uncertain tax positions, insurance and our estimates of the fair values of assets acquired and liabilities assumed in any acquisition.

The liabilities recorded for items such as these may not be adequate to cover the costs we ultimately will face.

9 unchanged sentences

For additional discussion and detail regarding multiemployer pension plans see Note 12, Employee Benefit Plans, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

The costs of providing for pension benefits and related funding requirements are subject to changes in pension fund values and fluctuating actuarial assumptions and may have a material adverse effect on our financial condition, results of operations and cash flows.

The costs of providing for pension benefits and related funding requirements are subject to changes in pension fund values and fluctuating actuarial assumptions and may have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

We sponsor a defined benefit pension plan that is funded with trustee assets invested in a diversified portfolio of debt and equity securities.

20 unchanged sentences

If we acquire a company with undisclosed liabilities such as environmental, remediation or contractual liabilities, as a successor owner we may be responsible for such undisclosed liabilities.

We try to minimize our exposure to such liabilities by conducting due diligence, by obtaining indemnification from each seller of the acquired companies, by deferring payment of a portion of the purchase price as security for the indemnification, by obtaining representations and warranties insurance and by acquiring only specified

However, we may not be able to obtain indemnification or insurance coverage, and such indemnification or insurance coverage obtained may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset any undisclosed liabilities arising from our acquisitions.

However, we may not be able to obtain indemnification, insurance coverage or other security, and such indemnification, insurance coverage or other security obtained may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset any undisclosed liabilities arising from our acquisitions.

Risks Related to Technology and Intellectual Property

11 unchanged sentences

Our financial results may suffer if we are not able to develop or license emerging technologies, or if a competitor obtains exclusive rights to an emerging technology that disrupts the current methods used in the environmental services industry.

A cyber security incident could negatively impact our business and our relationships with customers.

A cybersecurity incident could negatively impact our business and our relationships with customers.

We use information technology and operational technology assets, including computer and information networks, in substantially all aspects of our business operations.

We also use mobile devices, social networking and other online activities to connect with our employees and our customers.

Such uses give rise to cyber security risks, including security breach, espionage, system disruption, theft and inadvertent release of information.

Such uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information.

Our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including customers’ personal information, private information about employees and financial and strategic information about us and our business partners.

We also rely on a Payment Card Industry compliant third party to protect our customers’ credit card information.

In connection with our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cyber security risk.

If we fail to assess and identify cyber security risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks.

If we fail to assess and identify cybersecurity threats associated with acquisitions and new initiatives, we may become increasingly vulnerable to such threats.

Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventive measures and incident response efforts may not be entirely effective.

7 unchanged sentences

From time to time, our competitors reduce their prices in an effort to expand their market share.

Contractual, general economic or market-specific conditions also may limit our ability to raise prices.

Contractual, general economic or market-specific conditions also may limit our ability to

raise prices.

For example, many of our contracts have price adjustment provisions that are tied to an index such as the consumer price index.

1 unchanged sentence

This may continue to be the case even when the United States economy recovers because a recovery in the environmental services industry historically has lagged behind a recovery in the general economy.

As a result, we may be

unable to offset increases in costs, improve our operating margins and obtain adequate investment returns through price increases.

As a result, we may be unable to offset increases in costs, improve our operating margins and obtain adequate investment returns through price increases.

Price increases also might cause us to lose volume to lower-cost competitors.

7 unchanged sentences

Our business is directly affected by changes in local, national, global and general economic factors and overall economic activity that are outside of our control, including changes in governmental monetary policies, consumer confidence, slowing economic growth, inflation, pandemics, supply chain issues and interest ra tes.

In 2022, for example, the COVID-19 pandemic, inflation, the Ukraine-Russia conflict, United States -China relations, monetary policy changes, and the resulting increases in interest rates have negatively impacted the economy, disrupted supply chains and created significant volatility and disruption of financial markets.

In recent years, for example, the COVID-19 pandemic, inflation, the Ukraine-Russia conflict, United States -China relations, the Israel-Gaza conflict, monetary policy changes, and the resulting increases in interest rates negatively impacted the economy, disrupted supply chains and created significant volatility and disruption of financial markets.

In particular, disruption of the labor market and supply chains related to vehicles, especially trucks and the mechanical and electrical components in order to service them, negatively impacts our ability to provide services.

6 unchanged sentences

Accordingly, we cannot assure you that an improvement in general economic conditions will result in an immediate, or any, improvement in our consolidated financial condition, results of operations or cash flows.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors