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Item 7. Management’s Discussion and Analysis

2026-02-12 compared with 2025-02-13 · 134 added, 153 removed, 464 unchanged (38% of the section changed)

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These include:

● Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, estimated closure and post-closure liabilities, landfill alternatives and related capital expenditures, operating expenses, leachate and the ETLF event at the Chiquita Canyon Landfill;

● Statements regarding our landfills, including capacity, duration, demand for and pricing of recyclables, estimated closure and post-closure liabilities, landfill alternatives and related capital expenditures, operating expenses, leachate and the ETLF event at the Chiquita Canyon Landfill;

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

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● Statements regarding our ability to access capital resources or credit markets;

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

● Plans for, and the amount and sources of, certain capital expenditures for our existing and newly acquired properties and equipment and the funding thereof;

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

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

● Other statements on a variety of topics such as inflation, credit risk of customers, seasonality, labor/pension costs and labor union activity, employee retention costs, operational and safety risks, acquisitions, dividends, litigation developments and results, goodwill impairments, insurance costs and cybersecurity threats.

● Other statements on a variety of topics such as inflation, impacts of trade policies or tariffs, general economic conditions, credit risk of customers, seasonality, labor/pension costs and labor union activity, employee retention costs, operational and safety risks, acquisitions and their contribution to the Company’s strategy, dividends, share repurchases, litigation developments and results, goodwill impairments, insurance costs and cybersecurity threats.

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

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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 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.

Some 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.

Owning a point of transfer to landfills has become increasingly important as landfills continue to close and some disposal capacity is farther from collection areas.

Generally, the most profitable operators within the solid waste industry are those companies that are vertically integrated or enter into long-term collection contracts.

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and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

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 generally target markets where we can operate efficiently, including secondary and rural markets, which often allows us to establish a substantial presence and operate profitably 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 seek to achieve efficiencies through our collection services that aid our growth and profitability.

We also target niche markets, like non-hazardous E&P waste treatment, recovery and disposal services.

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Excluding the impact of such acquisitions, revenues increased 1.9% due predominantly to higher internal growth in solid waste.

Solid waste internal growth was up 4.4%, due to higher price increases and higher recycled commodities, partially offset by lower surcharges and lower volumes.

Solid waste internal growth was up 2.3%, due to higher price increases, partially offset by declines in surcharges, volumes and recycled commodities, along with the closure of an operating facility at year-end 2024.

Pricing growth was 6.4%, with core pricing up 6.5%, with offsets from lower materials and environmental surcharges of 0.1%.

Volumes decreased by 2.9% due primarily to the intentional shedding of lower quality revenue, including through the purposeful non-renewal of certain residential hauling contracts, partially offset by increases in the quantity and value of recycled commodities of 0.7%.

In addition, overall growth included 0.3% from increased E&P waste activity and 0.3% from increases in landfill gas sales, including renewable energy credits, and other revenue.

Foreign exchange impacts resulted in a 0.2% decrease to overall growth.

Net income attributable to Waste Connections decreased 19.0% to $617.6 million in 2024, from $762.8 million in 2023, principally as a result of impairments and other operating items, which increased to $613.0 million in 2024 from $238.8 million in 2023.

In 2024, adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP financial measure (refer to page 76 of this Annual Report on Form 10-K for a definition and

reconciliation to Net income attributable to Waste Connections), increased 15.0% to $2.902 billion, from $2.523 billion in 2023.

Volumes decreased by 2.8% due primarily to the intentional shedding of lower quality revenue, including through the purposeful non-renewal of certain residential hauling contracts.

Additionally, internal solid waste growth declined by 0.8% as a result of the facility closure and 0.5% as a result of decreases in recycled commodities revenue.

Higher E&P waste activity contributed 0.2% to overall growth, which was offset by lower landfill gas sales, including renewable energy credits, and other revenue, down 0.2%, and foreign exchange impacts resulted in a 0.3% decrease to overall growth.

Net income attributable to Waste Connections increased 74% to $1.077 billion in 2025, from $617.6 million in 2024, principally as a result of impairments and other operating items, which decreased to $109.7 million in 2025 from $613.0 million in 2024.

In 2025, adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP financial measure (refer to page 74 of this Annual Report on Form 10-K for a definition and reconciliation to Net income attributable to Waste Connections), increased 7.7% to $3.125 billion, from $2.902 billion in 2024.

As a percentage of revenue, adjusted EBITDA increased from 32.5% in 2024, to 33.0% in 2025.

This 1.0 percentage point increase reflects price-led organic growth in solid waste exceeding cost inflation and lower cost of fuel during the year, along with higher recycled commodity, E&P waste and landfill gas revenues.

This 0.5 percentage point increase reflects price-led organic growth in solid waste exceeding cost inflation and lower cost of fuel during the year, partially offset by lower recycled commodity and landfill gas revenues.

Adjusted net income attributable to Waste Connections, a non-GAAP financial measure (refer to page 75 of this Annual Report on Form 10-K for a definition and reconciliation to Net income attributable to Waste Connections), in 2025 increased 7.2% to $1.328 billion from $1.239 billion in 2024.

Net Cash from Operations and Adjusted Free Cash Flow

Net cash provided by operating activities increased 4.8% to $2.229 billion in 2024, from $2.127 billion in 2023, on increases in cash interest from $260.9 million to $298.9 million and increases in cash taxes from $207.0 million to $216.0 million.

Capital expenditures for property and equipment increased from $934.0 million in 2023 to $1.056 billion in 2024.

Adjusted free cash flow, a non-GAAP financial measure (refer to page 75 of this Annual Report on Form 10-K for a definition and reconciliation to Net cash provided by operating activities) was $1.218 billion in 2024, as compared to $1.224 billion in 2023.

Adjusted free cash flow as a percentage of revenues was 13.7% in 2024, as compared to 15.3% in 2023.

Return of Capital and Distributions to Shareholders

In 2024, we distributed $302.3 million to shareholders through cash dividends declared by our Board of Directors, which also increased the quarterly cash dividend by 10.5%, from $0.285 to $0.315 per common share in October 2024.

Cash dividends increased $31.7 million, or 11.7%, from $270.6 million in 2023 due to an 11.8% increase in the quarterly cash dividend declared by our Board of Directors in October 2023, followed by the additional increase in October 2024.

In 2025, we distributed $839.3 million to shareholders through a combination of cash dividends and share repurchases.

We paid $333.8 million to shareholders through cash dividends declared by our Board of Directors, which also increased the quarterly cash dividend by 11.1%, from $0.315 to $0.350 per common share in October 2025.

Cash dividends increased $31.5 million, or 10.4%, from $302.3 million in 2024 due to a 10.5% increase in the quarterly cash dividend declared by our Board of Directors in October 2024, followed by the additional increase in October 2025 and reflects the reduced share count resulting from repurchases.

In 2025, we also repurchased 2.8 million common shares at an aggregate cost of $505.5 million pursuant to our normal course issuer bid, which was renewed in August 2025 and provides for repurchases of up to 12,855,691 shares, being 5% of the shares outstanding as of July 31, 2025.

Our Board of Directors intends to review the quarterly dividend during the fourth quarter of each year, with a long-term objective of increasing the amount of the dividend.

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The Leverage Ratio is a non-GAAP ratio (refer to page 75 of this Annual Report on Form 10-K for more information on this ratio).

Higher debt resulting from acquisition outlays during 2024 were largely offset by higher EBITDA in 2024, resulting in a nominal increase in our Leverage Ratio from 2.60x at December 31, 2023 to 2.67x at December 31, 2024.

Higher debt resulting from outlays for acquisitions and share repurchases during 2025 were largely offset by higher EBITDA in 2025, resulting in a nominal increase in our Leverage Ratio from 2.67x at December 31, 2024 to 2.75x at December 31, 2025.

Cash balances decreased from $62.4 million at December 31, 2024 to $46.0 million at December 31, 2025, and we had $581.1 million of remaining borrowing capacity under our Revolving Credit Agreement, which matures in February 2029.

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Such critical accounting estimates and assumptions are applicable to our reportable segments.

We believe that of our significant accounting policies, which are described in Note 3 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater

degree of judgment and complexity.

Accordingly, we believe these are the most critical to fully understand and evaluate our financial condition and results of operations.

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We could have additional material financial obligations relating to final capping, closure and post-closure costs at other disposal facilities that we currently own or operate or that we may own or operate in the future.

rate assumption for purposes of computing 2024 and 2023 “layers” for final capping, closure and post-closure obligations is based on our long-term credit adjusted risk free rate.

Our discount rate assumption for purposes of computing 2025 and 2024 “layers” for final capping, closure and post-closure obligations is based on our long-term credit adjusted risk-free rate.

Our discount rate was 5.50% for each of 2025 and 2024.

Our long-term inflation rate assumption was 2.75% for each of the years ended December 31, 2025 and 2024.

Significant reductions in our estimates of the remaining lives of our landfills or significant increases in our estimates of the landfill final capping, closure and post-closure maintenance costs could have a material adverse effect on our financial condition and results of operations.

reductions in our estimates of the remaining lives of our landfills or significant increases in our estimates of the landfill final capping, closure and post-closure maintenance costs could have a material adverse effect on our financial condition and results of operations.

In the event that changes in an estimate for a closure and post-closure liability are associated with a significant change in facts and circumstances at a landfill or a non-operating section of a landfill, corresponding adjustments to recorded liabilities and Impairments and other operating items are made as soon as is practical.

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Any resulting impairment loss could have a material adverse effect on our financial condition and results of operations.

Loss Contingencies .

We record accruals for various contingencies including legal exposures as they arise in the normal course of business.

We determine whether to disclose and accrue for loss contingencies based on an assessment of whether the risk of loss is remote, reasonably possible, or probable, and if it can be reasonably estimated.

Our assessment is developed in consultation with our internal and external legal counsel and other advisors and is based on an analysis of possible outcomes under various strategies.

Loss contingency assumptions involve judgments that are inherently subjective and can involve matters that are in litigation, which, by its nature, is unpredictable.

We believe that our qualitative and quantitative assessment of the probability of loss contingencies is reasonable, but because of the subjectivity involved and the unpredictable nature of the subject matter at issue, our assessment may prove ultimately to be incorrect, which could harm our financial condition, operating results, or cash flow.

Goodwill and indefinite-lived intangible assets testing .

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, we evaluate our reporting units for impairment if events or circumstances change between annual tests indicating a possible impairment.

In addition, we evaluate our reporting units for

impairment if events or circumstances change between annual tests indicating a possible impairment.

Examples of such events or circumstances include, but are not limited to, the following:

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These exclusive arrangements are awarded, at least initially, on a competitive bid basis and subsequently on a bid or negotiated basis.

The standard customer service agreements generally range from one to five years in duration, although some exclusive franchises are for significantly longer periods.

The standard customer service agreements generally range from one to five

years in duration, although some exclusive franchises are for significantly longer periods.

Residential collection services are also provided on a subscription basis with individual households.

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Our significant costs of operations in 2025 were labor, employee benefits, third-party disposal and transportation, vehicle, equipment and property maintenance, taxes and fees, risk management and fuel.

We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes to reduce labor and workers’ compensation exposure, utilizing comprehensive maintenance and health and safety

programs, and increasing the use of transfer stations to further enhance internalization rates.

We carry insurance for automobile liability, general liability, employer’s liability, environmental liability, cyber liability, employment practices liability and directors’ and officers’ liability as well as for employee group health claims, property and workers’ compensation.

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Goodwill and indefinite-lived intangible assets, consisting primarily of certain perpetual rights to provide solid waste collection and transportation services in specified territories, are not amortized.

We capitalize some third-party expenditures related to development projects, such as legal and engineering.

We capitalize some third-party expenditures related to development projects, such as information technology, legal and engineering.

We expense all third-party and indirect acquisition costs, including third-party legal and engineering expenses, executive and corporate overhead, public relations and other corporate services, as we incur them.

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Income tax provision

Net loss (income) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Net income attributable to Waste Connections

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Acquisitions closed during, or subsequent to, the year ended December 31, 2024, increased revenues by $387.9 million, for the year ended December 31, 2025.

Operations that were divested in 2024 and the full year impact of operations that were divested in 2023, decreased revenues by $8.1 million, for the year ended December 31, 2024.

Operations that were divested during, or subsequent to, the year ended December 31, 2024, decreased revenues by $10.7 million for the year ended December 31, 2025.

The impact of operations that were closed during, or subsequent to, the year ended December 31, 2024, decreased revenues by $59.4 million for the year ended December 31, 2025.

During the year ended December 31, 2025, the net increase in prices charged to our customers at our existing operations was $526.6 million, consisting of $537.0 million of core price increases and decreases in surcharges of $10.4 million.

During the year ended December 31, 2024, we recognized volume losses totaling $222.5 million, resulting from lower residential collection volumes due primarily to the purposeful shedding of certain low-margin municipal contracts in our Southern, Eastern and Canada segments, lower commercial revenues and a decrease in roll off volumes.

E&P waste revenues at facilities owned during the years ended December 31, 2024 and 2023 increased $25.3 million, due to increases in overall demand for our E&P waste services as a result of increases in drilling and production activity levels in certain basins.

Revenues from sales of recyclable commodities at facilities owned during the years ended December 31, 2024 and 2023 increased $54.0 million.

The increase was primarily attributable to higher average commodity pricing for old corrugated cardboard and other paper products as compared to the prior period.

During the year ended December 31, 2025, we recognized volume losses totaling $238.0 million resulting from a decrease in roll off volumes, lower post-collection volumes in our Eastern, Southern and Central segments, lower residential collection volumes due primarily to the purposeful shedding of certain low-margin municipal contracts and lower commercial revenues.

E&P waste revenues at facilities owned during the year ended December 31, 2025 increased $17.6 million, due to nominal increases in overall activity levels in our Canada segment.

Revenues from sales of recyclable commodities at facilities owned during the years ended December 31, 2025 and 2024 decreased $37.7 million.

The decrease was primarily attributable to lower prices for old corrugated cardboard and plastics.

A decrease in the average Canadian dollar to U.S.

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dollar exchange rates on our Canadian revenues were 0.7160 and 0.7298 for the years ended December 31, 2025 and 2024, respectively.

Other revenues increased $20.1 million during the year ended December 31, 2024, due primarily to a $24.9 million increase in landfill gas revenues on higher values for renewable energy credits and higher landfill gas volumes and a $2.1 million increase in other non-core revenue sources, partially offset by a $6.9 million decrease in intermodal revenues.

Other revenues decreased $15.8 million during the year ended December 31, 2025, due primarily to a $13.6 million decrease in landfill gas revenues on lower values of renewable energy credits and a $3.1 million decrease in intermodal revenues, partially offset by a $0.9 million increase in other non-core revenue sources.

Cost of Operations .

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The increase was primarily the result of $187.4 million of additional operating costs from acquisitions closed during, or subsequent to, the year ended December 31, 2024, and an increase in operating costs at our existing operations of $96.0 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $11.3 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $8.4 million from operations divested during, or subsequent to, the year ended December 31, 2024.

The increase in operating costs of $202.1 million, assuming foreign currency parity, at our existing operations for the year ended December 31, 2024, consisted of higher labor and recurring incentive compensation expenses of $80.4 million, an increase in risk management expenses of $41.2 million due to higher claim and premium costs, an increase in truck, container, equipment and facility maintenance and repair expenses of $22.4 million, an increase in disposal costs of $19.3 million, an increase in benefits costs of $16.4 million, an increase in trucking costs of $16.3 million, an increase in leachate costs of $13.8 million, an increase in taxes on revenues of $11.5 million as a result of increased revenues, an increase in post-closure liability interest accretion expense of $7.1 million, an increase in facility and equipment rental and other recurring facility costs of $4.5 million, an increase in landfill monitoring and maintenance costs of $3.3 million and a net increase of other expenses of $8.8 million, partially offset by a decrease in fuel expense of $18.3 million due to lower diesel and natural gas prices, a decrease in subcontract expense of $17.0 million and a decrease in fees paid for the processing of recyclable materials of $7.6 million primarily as a result of higher commodity values.

The increase in operating costs of $96.0 million, assuming foreign currency parity, at our existing operations for the year ended December 31, 2025, consisted of higher labor and recurring incentive compensation expenses of $53.7 million, an increase in trucking costs of $23.3 million, higher post-closure liability interest accretion expense of $17.4 million, an increase in risk management expenses of $11.1 million, an increase in taxes on revenues of $9.1 million, higher benefits costs of $9.0 million and a net increase of other expenses of $2.3 million, partially offset by a decrease in fuel expense of $11.3 million due to diesel prices, lower disposal costs of $10.4 million and a decrease in truck, container, equipment and facility maintenance and repair expenses of $8.2 million.

Cost of operations as a percentage of revenues decreased 0.6 percentage points to 57.6% for the year ended December 31, 2025, from 58.2% for the year ended December 31, 2024.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, contributions from an increase in higher landfill gas sales, a 0.4 percentage point decrease due to the impact of acquisitions having lower operating costs as a percentage of revenue as compared to existing operations, a 0.4 percentage point decrease in fuel costs due to lower diesel and natural gas prices, a 0.2 percentage point decrease in disposal costs due to increased internalization in certain markets, a 0.2 percentage point decrease in subcontract costs and a 0.1 percentage point decrease due to lower costs associated with other expenses, partially offset by a 0.4 percentage point increase in risk management expenses.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.4 percentage point decrease in disposal costs as a result of increased internalization in certain markets, a 0.2 percentage point decrease due to the impact of acquisitions having lower operating costs as a percentage of revenue as compared to existing operations and a 0.2 percentage point decrease in fuel costs due to diesel prices, partially offset by a 0.2 percentage point increase in labor and benefits costs.

SG&A expenses increased $76.1 million, or 8.6%, to $959.5 million for the year ended December 31, 2025, from $883.4 million for the year ended December 31, 2024.

The increase was comprised of an increase of $48.0 million, assuming foreign currency parity, at our existing operations and $37.7 million from acquisitions closed during, or subsequent to, the year ended December 31, 2023, partially offset by a decrease of $1.4 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $48.0 million, assuming foreign currency parity, for the year ended December 31, 2024 was comprised of an increase in administrative payroll expenses of $15.7 million, an increase in direct acquisition expenses of $15.4 million due to an increase in acquisition activity in the current period, an increase in professional fees of $11.5 million, a collective increase in travel, meetings and training expenses of $9.0 million, an increase in incentive compensation expense of $4.8 million, an increase in benefits costs of $3.2 million and $4.5 million of other net expense increases, partially offset by a decrease in executive separation costs of $16.1 million.

SG&A expenses as a percentage of revenues decreased 0.1 percentage points to 9.9% for the year ended December 31, 2024, from 10.0% for the year ended December 31, 2023.

The decrease as a percentage of revenues was primarily driven by a 0.2 percentage point decrease in executive separation costs and a 0.1 percentage point decrease due to the impact of acquisitions having lower SG&A costs as a percentage of revenue as compared to existing operations, partially offset by a 0.2 percentage point increase in direct acquisition expenses due to an increase in acquisition activity as compared to the prior period.

The increase was comprised of $53.1 million, assuming foreign currency parity, at our existing operations and $25.2 million from acquisitions closed during, or subsequent to, the year ended December 31, 2024, partially offset by a decrease of $2.2 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $53.1 million, assuming foreign currency parity, for the year ended December 31, 2025 was comprised of an increase in administrative payroll expenses of $32.7 million, higher incentive compensation expense of $9.6 million, an increase in professional fees of $7.2 million and $3.6 million of other net expense increases.

SG&A expenses as a percentage of revenues increased 0.2 percentage points to 10.1% for the year ended December 31, 2025, from 9.9% for the year ended December 31, 2024.

The increase as a percentage of revenues was primarily driven by a 0.3 percentage point increase in administrative payroll and incentive compensation expenses, partially offset by a 0.1 percentage point decrease in SG&A expenses from acquisitions closed during, or subsequent to, the year ended December 31, 2024.

Depreciation .

Depreciation expense increased $128.4 million, or 15.2%, to $974.0 million for the year ended December 31, 2024, from $845.6 million for the year ended December 31, 2023.

The increase was comprised of an increase in depreciation and depletion expense of $92.2 million from acquisitions closed during, or subsequent to, the year ended December 31, 2023, an increase in depreciation expense of $35.9 million from the impact of additions to our fleet and equipment purchased to support our existing operations and an increase of $2.3 million in depletion expense, partially offset by a decrease of $1.8 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $0.2 million from operations divested during, or subsequent to, the year ended December 31, 2023.

Depreciation expense as a percentage of revenues increased 0.4 percentage points to 10.9% for the year ended December 31, 2024, from 10.5% for the year ended December 31, 2023.

The increase as a percentage of revenues was primarily attributable to acquisitions closed during, or subsequent to, the year ended December 31, 2023 having higher depreciation expense as a percentage of revenue than our company average, partially offset by the impact of decreased depletion expenses as a result of lower landfill volumes.

Depreciation expense increased $56.6 million, or 5.8%, to $1.031 billion for the year ended December 31, 2025, from $974.0 million for the year ended December 31, 2024.

The increase was comprised of an increase in depreciation and depletion expense of $45.1 million from acquisitions closed during, or subsequent to, the year ended December 31, 2024, and an increase in depreciation expense of $41.4 million from the impact of additions to our fleet and equipment purchased to support our existing operations, partially offset by a decrease of $26.3 million in depletion expense, a decrease of $2.7 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $0.9 million from operations divested during, or subsequent to, the year ended December 31, 2024.

Depreciation expense as a percentage of revenues remained flat at 10.9% for the year ended December 31, 2025 and the year ended December 31, 2024.

For both comparable periods, depreciation expense as a percentage of revenues was impacted by capital expenditures to support our existing operations and acquisitions closed during, or subsequent to, the year ended December 31, 2024 having higher depreciation expense as a percentage of revenue than our company average, partially offset by the impact of decreased depletion expenses as a result of lower landfill volumes.

Amortization of Intangibles .

Amortization of intangibles expense increased $11.7 million, or 6.2%, to $201.5 million for the year ended December 31, 2025, from $189.8 million for the year ended December 31, 2024.

The increase was the result of $49.0 million from intangible assets acquired in acquisitions closed during, or subsequent to, the year ended December 31, 2023, partially offset by a decrease of $16.3 million from certain intangible assets becoming fully amortized subsequent to December 31, 2023 and a decrease of $0.5 million due to a lower average foreign currency exchange rate in effect during the current period.

Amortization of intangibles expense as a percentage of revenues increased 0.1 percentage points to 2.1% for the year ended December 31, 2024, from 2.0% for the year ended December 31, 2023.

The increase as a percentage of revenues was primarily attributable to acquisitions closed during, or subsequent to, the year ended December 31, 2023 having higher amortization expense as a percentage of revenue than our company average, partially offset by price-driven revenue increases in our solid waste services.

The increase was the result of $33.6 million from intangible assets acquired in acquisitions closed during, or subsequent to, the year ended December 31, 2024, partially offset by a decrease of $21.0 million from certain intangible assets becoming fully amortized during the comparable periods, a decrease of $0.7 million due to a lower average foreign currency exchange rate in effect during the current period and a decrease of $0.2 million due to intangible assets divested during, or subsequent to, the year ended December 31, 2024.

Amortization of intangibles expense as a percentage of revenues remained flat at 2.1% for the year ended December 31, 2025 and the year ended December 31, 2024.

For both comparable periods, amortization expense as a percentage of revenues was impacted by acquisitions closed during, or subsequent to, the year ended December 31, 2024 having higher amortization expense as a percentage of revenue than our company average, partially offset by decreases related to certain intangible assets becoming fully amortized during the comparable periods.

Impairments and Other Operating Items .

Impairments and other operating items increased $374.2 million, to net losses totaling $613.0 million for the year ended December 31, 2024, from net losses totaling $238.8 million for the year ended December 31, 2023.

Impairments and other operating items decreased $503.3 million, to net losses totaling $109.7 million for the year ended December 31, 2025, from net losses totaling $613.0 million for the year ended December 31, 2024.

The net losses of $109.7 million recorded during the year ended December 31, 2025 consisted of net losses of $67.4 million for an environmental liability at an operating facility in the period, net losses of $30.0 million for charges to write off the carrying cost of certain contracts and non-operating facility permits that were not, or are not expected to be, renewed prior to the original estimated termination date and net losses of $12.7 million on the disposal of property and equipment, partially offset by other net gains of $0.4 million.

During and prior to the year ended December 31, 2024, we worked to address regulatory constraints related to the active waste disposal operations that were preventing our Chiquita Canyon Landfill (“Chiquita”) from continuing to receive and manage waste from its customers.

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As a result, it became necessary to record charges of $480.8 million to adjust the carrying value of the landfill closure and post-closure liability and record an impairment charge of $116.1 million to adjust the carrying value of the landfill.

See “Accounting for landfills” and “Final capping, closure and post-closure obligations” within “Critical Accounting Estimates and Assumptions” included in Item 7 of Part II – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The remaining net losses of $16.1 million recorded during the year ended December 31, 2024 consisted of $14.3 million of net losses on the disposal of property and equipment and uninsured damages to an operating facility, $2.8 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $1.5 million of other net losses, partially offset by net gains of $2.5 million on settlement of litigation.

The net losses of $238.8 million recorded during the year ended December 31, 2023 consisted of $159.5 million of charges to adjust the carrying value of a closure and post-closure liability related to a non-active area of a landfill site, $31.3 million of charges to adjust the carrying value of contingent consideration liabilities associated with acquisitions closed in prior periods, $25.0 million of charges to adjust the carrying value of certain assets impaired as a result of an adjustment to fair market value, $17.3 million of charges to write off the carrying cost of certain contracts that were not,

or are not expected to be, renewed prior to the original estimated termination date, $13.2 million of net losses on property and equipment disposal and uninsured damages to an operating facility and $10.6 million lawsuit judgment charges, partially offset by an $8.7 million gain related to insured recoveries for damages to an operating facility, $7.8 million of gains on the disposal of certain non-strategic operating locations and $1.6 million other net adjustments.

See “Accounting for landfills” and “Final capping, closure and post-closure obligations” within “Critical Accounting Estimates and Assumptions” included in this Item 7 of Part II – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

original estimated termination date and $1.5 million of other net losses, partially offset by net gains of $2.5 million on settlement of litigation.

Operating Income .

Operating income decreased $168.7 million, or 13.6%, to $1.068 billion for the year ended December 31, 2024, from $1.236 billion for the year ended December 31, 2023.

The decrease in our operating income for the year ended December 31, 2024 was due primarily to an increase in impairments and other operating items, an increase in risk management costs and an increase in direct acquisition expenses associated with increased acquisition activity as compared to the prior year period, partially offset by price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the year ended December 31, 2023, contributions from higher recyclable commodity pricing, operating income contributions from increased renewable energy credits associated with the generation of landfill gas, an increase in earnings at our E&P waste operations and lower executive separation costs.

Operating income as a percentage of revenues decreased 3.4 percentage points to 12.0% for the year ended December 31, 2024, from 15.4% for the year ended December 31, 2023.

The decrease as a percentage of revenues was comprised of a 3.9 percentage point increase in impairments and other operating items, a 0.4 percentage point increase in depreciation expense and a 0.1 percentage point increase in amortization expense, partially offset by a 0.9 percentage point decrease in cost of operations and a 0.1 percentage point decrease in selling, general and administrative expenses.

Operating income increased $642.5 million, or 60.2%, to $1.710 billion for the year ended December 31, 2025, from $1.068 billion for the year ended December 31, 2024.

The increase in our operating income for the year ended December 31, 2025 was due primarily to price increases for our solid waste services, a decrease in impairments and other operating items, and operating income generated from acquisitions closed during, or subsequent to, the year ended December 31, 2024, partially offset by lower volumes, an increase in labor and recurring incentive compensation expenses and the impact of operations that were closed during, or subsequent to, the year ended December 31, 2024.

Operating income as a percentage of revenues increased 6.1 percentage points to 18.1% for the year ended December 31, 2025, from 12.0% for the year ended December 31, 2024.

The increase as a percentage of revenues was comprised of a 5.7 percentage point decrease in impairments and other operating items and a 0.6 percentage point decrease in cost of operations, partially offset by a 0.2 percentage point increase in selling, general and administrative expenses.

Interest Expense .

Interest expense increased $7.8 million, or 2.4%, to $334.6 million for the year ended December 31, 2025, from $326.8 million for the year ended December 31, 2024.

The increase was primarily attributable to an increase of $32.2 million from the issuance of $750.0 million of senior unsecured notes during the year ended December 31, 2024, an increase of $8.9 million from the issuance of CAD $500.0 million of senior unsecured notes during the year ended December 31, 2024, an increase of $8.7 million due to an increase in the average borrowings outstanding under our credit facilities during the year ended December 31, 2024 and $3.2 million of other net expense increases, partially offset by a decrease of $0.8 million from lower interest rates on borrowings outstanding during the comparable periods.

The increase was primarily attributable to an increase of $15.1 million from the issuance of $500.0 million of senior unsecured notes during the year ended December 31, 2025, an increase of $7.2 million from the issuance of CAD $500.0 million of senior unsecured notes in the prior period, an increase of $5.3 million from the issuance of $750.0 million of senior unsecured notes in the prior period and an increase of $4.2 million due to higher average borrowings outstanding under our credit facilities during the year ended December 31, 2025 , partially offset by a decrease of $22.1 million from lower interest rates on borrowings outstanding during the comparable periods and a decrease of $1.9 million from other net expense decreases.

Interest Income .

Interest income increased $0.5 million, or 4.6%, to $12.1 million for the year ended December 31, 2025, from $11.6 million for the year ended December 31, 2024.

The increases were primarily attributable to higher average investment rates in the current periods.

The increase was primarily attributable to higher average investment rates in the current period.

Other Income, Net .

Other income, net decreased $2.0 million, or 16.1%, to an income total of $10.5 million for the year ended December 31, 2024, from an income total of $12.5 million for the year ended December 31, 2023.

Other income, net increased $19.7 million, or 188.0%, to $30.2 million for the year ended December 31, 2025, from $10.5 million for the year ended December 31, 2024.

Other income of $30.2 million recorded during the year ended December 31, 2025 consisted of $11.2 million from proceeds on insurance claims, $5.5 million of gains from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period, $5.1 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations, $3.7 million from a vendor rebate and the reimbursement of expenditures and $4.7 million of income from other sources.

Other income of $10.5 million recorded during the year ended December 31, 2024 consisted of $12.0 million from a gain on sale of certain investments, $2.8 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations and $0.7 million of other income, partially offset by $2.7 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period and $2.3 million from the write off of unamortized loan fees as a result of the early extinguishment of our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement.

Other income of $12.5 million recorded during the year ended December 31, 2023 consisted of $4.3 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations, a $4.2 million reduction to certain accrued liabilities acquired in an acquisition closed in a prior year period, $3.6 million in other net income sources and $0.4 million from an increase in the average foreign currency exchange rate in effect during the comparable reporting period.

Income Tax Provision .

Income taxes decreased $74.3 million, to $146.4 million for the year ended December 31, 2024, from $220.7 million for the year ended December 31, 2023.

Income taxes increased $195.0 million, to $341.4 million for the year ended December 31, 2025, from $146.4 million for the year ended December 31, 2024.

Our effective tax rate for the year ended December 31, 2025 was 24.1%.

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We manage our operations through the following six geographic solid waste operating segments:

Western, Southern, Eastern, Central, Canada and MidSouth.

Southern, Western, Eastern, Central, Canada and MidSouth.

Our six geographic solid waste operating segments comprise our reportable segments.

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Significant changes in revenue, segment expenses and EBITDA for our reportable segments for the year ended December 31, 2025, compared to the year ended December 31, 2024, are discussed below.

Revenue increased $129.4 million to $1.799 billion for 2024, from $1.669 billion for 2023, due to price increases, contributions from acquisitions, increases in residential and roll off collection volumes and an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values, partially offset by decreased intermodal revenue.

Segment expenses increased $91.8 million to $1.278 billion for 2024, from $1.186 billion for 2023 due to an increase in expenses from acquisitions closed during the comparable periods, increases in operating costs associated with higher collection volumes, wage and benefits cost increases, higher risk management expenses, increases in allocated corporate overhead and higher leachate management costs, partially offset by a decrease in recycle processing costs and a decrease in fuel expenses.

EBITDA increased $37.6 million to $520.8 million, or a 29.0% EBITDA margin for 2024, from $483.2 million, or a 28.9% EBITDA margin for 2023.

The increase in our EBITDA margin was due to contributions from improved recyclable commodity values, the benefits of lower fuel costs due to lower diesel and natural gas prices, and a decrease in other operating costs relative to revenue, partially offset by an increase in post-closure liability interest accretion expense, increased risk management costs and higher trucking expenses associated with volumes.

Revenue increased $114.9 million to $1.757 billion for 2024, from $1.642 billion for 2023, due to solid waste price increases, contributions from acquisitions, increased E&P waste revenues attributable to increases in the demand for our E&P waste services and an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values, partially offset by lower residential collection volumes due to the purposeful non-renewal of collection contracts, lower commercial collection volume and a decrease in landfill volumes.

Segment expenses increased $76.5 million to $1.201 billion for 2024, from $1.124 billion for 2023 due to an increase in expenses from acquisitions closed during the comparable periods, increased wages and benefits costs, higher risk management costs, increased leachate expenses, higher trucking expenses associated with an increase in transfer volumes, an increase in truck, container, equipment and facility maintenance and repair expenses, increases in allocated corporate overhead and other operating costs partially offset by a decrease in subcontracting costs, lower disposal expense and a decrease in fuel expenses.

Revenue increased $150.6 million to $1.908 billion for 2025, from $1.757 billion for 2024, due to contributions from acquisitions, price increases and an increase in landfill gas sales, partially offset by lower commercial and residential collection volumes, a decrease in roll off volumes, lower E&P waste revenues attributable to decreases in drilling and production activity and a decrease in recyclable commodity revenues as compared to the prior period.

Segment expenses increased $74.6 million to $1.275 billion for 2025, from $1.201 billion for 2024 due to an increase in expenses from acquisitions closed during the comparable periods, an increase in allocated corporate overhead, higher labor costs, an increase in third-party brokerage, an increase in equipment rental fees and higher landfill monitoring and maintenance costs , partially offset by a decrease in expenses from operations divested during the current period, lower fuel costs, a decrease in disposal expense and lower truck, container, equipment and facility maintenance and repair expenses.

EBITDA increased $76.0 million to $632.4 million, or a 33.1% EBITDA margin for 2025, from $556.4 million, or a 31.7% EBITDA margin for 2024.

The increase in our EBITDA margin was due to price-led increases in solid waste revenue, the purposeful non-renewal of certain residential contracts with lower EBITDA margin than our segment average, the impact of acquisitions having higher EBITDA margins than our segment average, the benefits of lower fuel costs due to lower diesel and natural gas prices and contributions from increased E&P volumes, partially offset by higher risk management costs and benefits expenses relative to revenue.

Revenue increased $184.0 million to $1.564 billion for 2024, from $1.380 billion for 2023, due to contributions from acquisitions, price increases, an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values and higher landfill volumes, partially offset by decreased residential and commercial service revenues, lower roll off volumes and a decrease in transfer volumes.

Segment expenses increased $119.8 million to $1.147 billion for 2024, from $1.027 billion for 2023 due to an increase in expenses from acquisitions closed during the comparable periods, an increase in truck, container, equipment and facility maintenance and repair expenses , higher risk management expenses, higher disposal and an increase in wages, partially offset by decreased trucking costs due to lower transfer volumes.

The increase in our EBITDA margin was due to the impact of acquisitions having higher EBITDA margins than our segment average, price-led increases in revenue, lower fuel costs and a decrease in truck, container, equipment and facility maintenance and repair expenses , partially offset by lower E&P activity from decreases in drilling and production activity, higher allocated corporate overhead and increased landfill monitoring and maintenance costs.

Revenue increased $50.7 million to $1.849 billion for 2025, from $1.799 billion for 2024, due to price increases, contributions from acquisitions and increases in residential and commercial collection volumes, partially offset by a decrease from an operation closed at the end of the prior period, a decrease in recyclable commodity revenues as compared to the prior period and lower intermodal activity.

Segment expenses increased $58.3 million to $1.336 billion for 2025, from $1.278 billion for 2024 due to an increase in expenses from acquisitions closed during the comparable periods, increased labor and benefits costs, higher allocated corporate overhead, increased operating costs associated with higher collection volumes and higher risk management costs, partially offset by a decrease from an operation closed at the end of the prior period and a decrease in third-party brokerage.

EBITDA decreased $7.6 million to $513.2 million, or a 27.8% EBITDA margin for 2025, from $520.8 million, or a 29.0% EBITDA margin for 2024.

The decrease in our EBITDA margin was due to an increase in post-closure liability interest accretion expense, an increase in contract labor and higher risk management costs, partially offset by price-led revenue growth and a decrease in other operating costs relative to revenue.

Revenue increased $138.0 million to $1.702 billion for 2025, from $1.564 billion for 2024, due to contributions from acquisitions and price increases, partially offset by decreases in roll off and post-collection volumes, lower commercial collection volumes due to the purposeful non-renewal of lower margin contracts and a decrease in recyclable commodity revenues as compared to the prior period.

Segment expenses increased $103.5 million to $1.250 billion for 2025, from $1.147 billion for 2024 due to an increase in expenses from acquisitions closed during the comparable periods, increases in allocated corporate overhead, higher trucking costs due to higher transfer volumes, an increase in risk management costs and higher labor costs, partially offset

by lower disposal expense, a decrease in truck, container, equipment and facility maintenance and repair expenses and lower fuel costs due to diesel prices.

EBITDA increased $34.6 million to $451.8 million, or a 26.5% EBITDA margin for 2025, from $417.2 million, or a 26.7% EBITDA margin for 2024.

The increase in our EBITDA margin was due primarily to price-led increases in revenue, increased internalization in certain markets and lower wages and benefits expenses relative to revenue, partially offset by the impact of acquisitions having lower EBITDA margins than our segment average and an increase in risk management expenses relative to revenue.

Revenue increased $74.7 million to $1.515 billion for 2024, from $1.440 billion for 2023, due to price increases, an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values, contributions from acquisitions, partially offset by lower post-collection volumes and a decrease in residential and commercial collection volumes.

Segment expenses increased $44.2 million to $972.1 million for 2024, from $927.9 million for 2023 due to increased wages and benefits expenses, higher trucking costs, increased disposal rates charged by third-party landfills, higher risk management expenses, an increase in truck, container, equipment and facility maintenance and repair expenses and an increase in allocated corporate overhead, partially offset by a decrease in fuel expenses and a decrease in recycle processing costs.

The decrease in our EBITDA margin was due primarily to higher allocated corporate overhead, an increase in trucking costs associated with internal transfer volumes, higher risk management costs and an increase in labor costs, partially offset by price-led revenue growth, the impact of acquisitions having higher EBITDA margins than our segment average, a decrease in truck, container, equipment and facility maintenance and repair expenses, lower fuel costs and a decrease in landfill monitoring and maintenance costs.

Revenue increased $75.0 million to $1.590 billion for 2025, from $1.515 billion for 2024, due to price increases, contributions from acquisitions and an increase in landfill gas sales, partially offset by lower roll-off and post-collection volumes and a decrease in recyclable commodity revenues.

Segment expenses increased $42.9 million to $1.015 billion for 2025, from $972.1 million for 2024 due to an increase in labor and benefits expenses, higher allocated corporate overhead, an increase in third-party brokerage, higher risk management costs, an increase in disposal expense and an increase in landfill monitoring and maintenance costs.

EBITDA increased $32.1 million to $574.9 million, or a 36.2% EBITDA margin for 2025, from $542.8 million, or a 35.8% EBITDA margin for 2024.

The increase in our EBITDA margin was due to price-led revenue growth, the benefits of lower fuel costs due to lower diesel and natural gas prices and contributions from improved recyclable commodity values, partially offset by higher risk management costs and benefits expenses relative to revenue.

Revenue increased $265.1 million to $1.261 billion for 2024, from $995.8 million for 2023, due to contributions from acquisitions, price increases, an increase in landfill gas revenues, an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values and increased landfill volumes, partially offset by a decrease in commercial and residential collection volumes.

Segment expenses increased $104.3 million to $709.5 million for 2024, from $605.2 million for 2023 due to an increase in expenses from acquisitions closed during the comparable periods, increases in allocated corporate overhead, higher wage costs and an increase in risk management expenses and other operating costs, partially offset by a decrease in fuel costs.

The increase in our EBITDA margin was due to price-led revenue growth and lower fuel costs, partially offset by an increase in allocated corporate overhead and higher risk management costs.

Revenue increased $63.9 million to $1.325 billion for 2025, from $1.261 billion for 2024, due to price increases, contributions from acquisitions and higher E&P waste revenues attributable to an increase in volumes, partially offset by a decrease in commercial and residential collection volumes, a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, lower landfill gas sales primarily from lower renewable energy credits and a decrease in recyclable commodity revenues.

Segment expenses increased $17.1 million to $726.6 million for 2025, from $709.5 million for 2024 due to an increase in expenses from acquisitions closed during the comparable periods, higher labor and benefits costs, increased taxes associated with incremental volume and higher trucking costs, partially offset by a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, a decrease in truck, container, equipment and facility maintenance and repair expenses and lower fuel costs .

EBITDA increased $46.7 million to $598.2 million, or a 45.2% EBITDA margin for 2025, from $551.5 million, or a 43.7% EBITDA margin for 2024.

The increase in our EBITDA margin was due to the impact of acquisitions having higher EBITDA margins than our segment average, price-led increases in revenue, contributions from higher landfill gas revenues and the benefits of lower fuel costs due to lower diesel and natural gas prices, partially offset by higher risk management expenses relative to revenue.

Revenue increased $129.5 million to $1.024 billion for 2024, from $894.2 million for 2023, due to contributions from acquisitions, price increases, an increase in recyclable commodity revenues as compared to the prior period due to an increase in commodity values and higher landfill gas revenues, partially offset by a decrease in collection and landfill volumes.

Segment expenses increased $92.2 million to $740.2 million for 2024, from $648.0 million for 2023 due to an increase in expenses from acquisitions closed during the comparable periods, higher wage and benefits expenses, increases in allocated corporate overhead and an increase in risk management expenses, partially offset by a decrease in recycle processing costs.

The increase in our EBITDA margin was due to price-led increases in revenue, favorable fuel pricing, lower risk management expenses and a decrease in truck, container, equipment and facility maintenance and repair expenses , partially offset by a decline in renewable energy credit pricing, higher disposal expenses and an increase in allocated corporate overhead.

Revenue increased $69.0 million to $1.093 billion for 2025, from $1.024 billion for 2024, due to price increases and contributions from acquisitions, partially offset by a decrease in roll off and residential collection volumes, lower landfill gas sales primarily from lower renewable energy credits and a decrease in recyclable commodity revenues.

Segment expenses increased $46.4 million to $786.6 million for 2025, from $740.2 million for 2024 due to an increase in expenses from acquisitions closed during the comparable periods, higher labor and benefits expenses, an increase in third-party brokerage, higher allocated corporate overhead, an increase in truck, container, equipment and facility maintenance and repair expenses and higher risk management costs.

EBITDA increased $22.7 million to $306.1 million, or a 28.0% EBITDA margin for 2025, from $283.4 million, or a 27.7% EBITDA margin for 2024.

The increase in our EBITDA margin was due primarily to price-led revenue growth, the impact of acquisitions having higher EBITDA margins than our segment average, contributions from improved recyclable commodity values and the benefits of lower fuel costs due to lower diesel and natural gas prices, partially offset by an increase in wage and benefits expenses and higher risk management costs relative to revenue.

Segment expenses increased $2.7 million to $27.7 million for 2024, from $25.0 million for 2023, due to an increase in direct acquisition expenses associated with an increase in acquisition activity, higher professional fees, increased administrative payroll costs to support continued growth in the business and increased incentive and deferred compensation costs, partially offset by increased allocation of costs to our operating segments and a decrease in executive separation costs incurred in the prior period.

EBITDA decreased $2.7 million in 2024 as compared to the prior period due to the increase in segment expenses.

The increase in our EBITDA margin was due primarily to price-led revenue growth and lower fuel costs due to diesel prices, partially offset by an increase in allocated corporate overhead.

Segment expenses decreased $3.1 million to $24.6 million for 2025, from $27.7 million for 2024, due to increased allocation of costs to our operating segments and a decrease in deal costs associated with acquisitions closed during the comparable periods, partially offset by higher incentive compensation costs and higher administrative payroll costs to support continued growth in the business and increased professional fees.

EBITDA increased $3.1 million in 2025 as compared to the prior period due to the decrease in segment expenses.

Liquidity and Capital Resources

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The significant components of the increase included the following:

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $374.6 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to closure and post-closure liabilities, adjustments to and payments of contingent consideration, interest accretion and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the year ended December 31, 2023, contributions from higher recyclable commodity pricing, an increase in renewable energy credits associated with the generation of landfill gas and an increase in earnings at our E&P waste operations.

2) Accounts receivable — Our increase in net cash provided by operating activities was favorably impacted by $10.0 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $10.6 million for the year ended December 31, 2024, compared to a decrease to operating cash flows of $20.6 million for the year ended December 31, 2023.

The decrease for the year ended December 31, 2024 was due to increases in revenue, which remained as outstanding receivables at December 31, 2024, partially offset by an improvement in collections.

The decrease for the year ended December 31, 2023 was due to increases in revenue, which remained as outstanding receivables at the end of the period.

1) Deferred income taxes — Our increase in net cash provided by operating activities was favorably impacted by $173.9 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $116.6 million for the year ended December 31, 2025, compared to a decrease to operating cash flows of $57.3 million for the year ended December 31, 2024.

The increase for the year ended December 31, 2025 was attributable to capital expenditures providing tax benefits resulting from accelerated depreciation and tax benefits resulting from payments for closure and post-closure activities in the period.

The decrease for the year ended December 31, 2024 was attributable to capital expenditures providing tax benefits resulting from accelerated depreciation and tax benefits resulting from payments for closure and post-closure activities in the period.

2) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $68.4 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to closure, post-closure, and remediation liabilities, adjustments to and payments of contingent consideration, and loss on disposal of assets and impairments, due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the year ended December 31, 2024, and lower fuel costs, partially offset by increased other operating items, higher labor and benefits costs, higher risk management costs and an increase in trucking costs.

3) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was favorably impacted by $54.7 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $111.4 million for the year ended December 31, 2025, compared to an increase to operating cash flows of $56.7 million for the year ended December 31, 2024.

The increase for the year ended December 31, 2024 was due primarily to an increase in accrued insurance costs, an increase in accrued interest due to the timing of interest payments, partially offset by a decrease in outstanding obligations to vendors.

The increase for the year ended December 31, 2023 was due primarily to an increase in accrued insurance costs, an increase in accrued compensation costs, an increase in accrued interest due to the timing of interest payments, an increase in property taxes attributable to payment timing and an increase in outstanding obligations to vendors, partially offset by a decrease from the timing of tax payments.

The increase for the year ended December 31, 2025, was due primarily to an increase in accrued insurance costs, outstanding obligations to vendors and an increase in accrued payroll and benefits.

The increase for the year ended December 31, 2024 was due primarily to an increase in accrued insurance costs and an increase in accrued interest due to the timing of interest payments, partially offset by a decrease in outstanding obligations to vendors.

4) Closure and post-closure expenditures — Our increase in net cash provided by operating activities was unfavorably impacted by $57.6 million from an increase in payments for closure and post-closure activities as changes in expenditures for these items resulted in a decrease to operating cash flows of $305.5 million for the year ended December 31, 2025, compared to a decrease in operating cash flows of $247.9 million for the year ended December 31, 2024.

5) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $63.6 million from deferred income taxes as changes in deferred income taxes resulted in a decrease to operating cash flows of $57.3 million for the year ended December 31, 2024, compared to an increase to operating cash flows of $6.3 million for the year ended December 31, 2023.

The increase for the year ended December 31, 2023 was primarily due to accelerated tax depreciation from capital expenditures.

6) Prepaid expenses — Our increase in net cash provided by operating activities was unfavorably impacted by $24.6 million from prepaid expenses as changes in prepaid expenses resulted in a decrease to operating cash flows of $14.3 million for the year ended December 31, 2024, compared to an increase to operating cash flows of $10.3 million for the year ended December 31, 2023.

The decrease for the year ended December 31, 2024 was due primarily to an increase in prepaid income tax payments.

The increase for the year ended December 31, 2023 was due primarily to decreased prepaid income tax payments, partially offset by a net increase in prepaids related to insurance claims and premium payments.

5) Accounts receivable — Our increase in net cash provided by operating activities was unfavorably impacted by $57.4 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $68.0 million for the year ended December 31, 2025, compared to a decrease to operating cash flows of $10.6 million for the year ended December 31, 2024.

The decrease for the year ended December 31, 2025 was driven by higher revenues, which remained as outstanding receivables at the end of the period, and a reduction of receivables turnover relative to the prior period.

The decrease for the year ended December 31, 2024 was due to increases in revenue, which remained as outstanding receivables at December 31, 2024, partially offset by an improvement in collections.

At December 31, 2025, we had a working capital deficit of $812.7 million, including cash and equivalents of $46.0 million.

Our working capital deficit increased $105.8 million from a working capital deficit of $546.1 million at December 31, 2023 including cash and equivalents of $78.4 million, due primarily to an increase in the short-term portion of closure and post closure accruals , increases in accounts payable and accrued liabilities driven by an increase in accrued insurance costs and an increase in outstanding obligations to vendors, an increase in deferred revenue and a decrease in cash and cash equivalents, partially offset by an increase in accounts receivables as a result of increases in revenue, a decrease in outstanding liabilities for contingent consideration and an increase in prepaid expenditures.

Our working capital deficit increased $160.8 million from a working capital deficit of $651.9 million at December 31, 2024, including cash and equivalents of $62.4 million, due primarily to an increase in accounts payable from an increase in accrued insurance costs, outstanding obligations to vendors and an increase in accrued payroll, and an increase in deferred revenue, partially offset by an increase in outstanding receivables driven by higher revenues and a reduction of receivables turnover relative to the prior period.

To date, we have experienced no loss or lack of access to our cash and equivalents;

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Investing Activities Cash Flows

Net cash used in investing activities increased $1.578 billion to $3.159 billion for the year ended December 31, 2024, from $1.581 billion for the year ended December 31, 2023.

The significant components of the increase included the following:

1) An increase in cash paid for acquisitions of $1.444 billion;

2) An increase in capital expenditures at operations acquired during the comparable periods of $63.4 million due to expenditures for landfill site costs, land and facility improvements and trucks and equipment;

3) An increase in capital expenditures at operations owned in the comparable periods of $58.6 million due to expenditures for trucks and equipment, land and facility improvements, partially offset by a decrease in expenditures for containers and landfill site costs;

4) An increase in cash received of $37.0 million from proceeds from the sale of investment in noncontrolling interests in the period.

Net cash used in investing activities decreased $1.136 billion to $2.023 billion for the year ended December 31, 2025, from $3.159 billion for the year ended December 31, 2024.

The significant components of the decrease included the following:

1) A decrease in cash paid for acquisitions of $1.303 billion;

2) An increase in capital expenditures at operations owned in the comparable periods of $71.5 million due to ongoing projects, expenditures for trucks and equipment and landfill site costs, partially offset by a decrease in expenditures for containers and compactors, land and facility improvements;

3) An increase in capital expenditures at operations acquired during the comparable period of $51.8 million due to expenditures for facility improvements, landfill site costs and trucks and equipment;

4) An increase of $ 37.0 million from proceeds from the sale of investment in noncontrolling interests in the prior period;

5) An increase in capital expenditures for undeveloped landfill property of $15.1 million.

Financing Activities Cash Flows

Net cash provided by financing activities increased $1.489 billion to $944.9 million for the year ended December 31, 2024, from net cash used in financing activities of $544.4 million for the year ended December 31, 2023.

The significant components of the increase included the following:

1) An increase from the net change in long-term borrowings of $1.553 billion in which long-term borrowings increased $1.322 billion during the year ended December 31, 2024 and decreased $230.6 million during the year ended December 31, 2023;

Net cash used in financing activities was $360.0 million for the year ended December 31, 2025, compared to net cash provided by financing activities of $944.9 million for the year ended December 31, 2024, representing a decrease of $1.305 billion.

The significant components of the decrease included the following:

1) A decrease from the net change in long-term borrowings of $773.8 million in which long-term borrowings increased $548.6 million during the year ended December 31, 2025 and increased $1.322 billion during the year ended December 31, 2024;

2) A decrease from higher payments to repurchase our common shares of $505.5 million during the year ended December 31, 2025;

3) A decrease from higher cash dividends paid of $31.5 million due primarily to an increase in our average quarterly dividend rate for the year ended December 31, 2025 to $0.324 per share, from $0.293 per share for the year ended December 31, 2024;

3) A decrease from higher payments of contingent consideration of $14.4 million not included in earnings that occurred during the year ended December 31, 2024;

4) A decrease from higher payments related to the issuance of debt of $13.4 million that occurred during the year ended December 31, 2024.

On July 23, 2024, 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 12,901,981 of our common shares during the period of August 12, 2024 to August 11, 2025 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 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, any share buyback taxes applicable and overall market conditions.

4) An increase from lower payments related to the issuance of debt of $8.5 million in which debt issuance costs increased $4.9 million during the year ended December 31, 2025 and increased $13.4 million during the year ended December 31, 2024.

On August 8, 2025, we announced the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 12,855,691 of our common shares during the period of August 12, 2025 to August 11, 2026 or until such earlier time as the NCIB is completed or terminated at our option.

The timing and amounts of any repurchases pursuant to the NCIB will depend on market conditions, share price and other factors, including potential acquisition growth opportunities.

All common shares purchased under the NCIB will be immediately cancelled following their repurchase.

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

We made $1.056 billion in capital expenditures for property and equipment during the year ended December 31, 2024, and we expect to make total capital expenditures for property and equipment in 2025 of between approximately $1.200 billion and $1.225 billion, including $100 million to $150 million for renewable natural gas facilities.

We made $1.179 billion in capital expenditures for property and equipment during the year ended December 31, 2025, and we expect to make total capital expenditures for property and equipment in 2026 of approximately $1.250 billion.

In addition, we made $15.1 million in capital expenditures for undeveloped landfill property during the year ended December 31, 2025 and may opportunistically make other capital expenditures for undeveloped landfill property in 2026.

We intend to fund our planned 2026 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Revolving Credit Agreement.

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The Revolving Credit Agreement has a scheduled maturity date of February 27, 2029, subject to certain extension mechanics therein by which the Company may request two additional one-year maturity date extensions.

On February 27, 2024, the Company used a portion of the proceeds from borrowings under the Revolving Credit Agreement to (i) prepay the amounts outstanding under that certain Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 30, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “2021 Revolving and Term Credit Agreement”), among 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, and the lenders and any other financial institutions from time to time party thereto and to terminate the 2021 Revolving and Term Credit Agreement and the loan documents associated therewith and (ii) prepay the amounts outstanding under that certain Term Loan Agreement, dated as of October 31, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “2022 Term Loan Agreement”), among the Company, as borrower, Bank of America, N.A., as administrative agent, and the lenders and any other financial institutions from time to time party thereto and to terminate the 2022 Term Loan Agreement and the loan documents associated therewith.

As of December 31, 2025, $2.382 billion under the revolving credit facility were outstanding under the Revolving Credit Agreement, exclusive of outstanding standby letters of credit of $37.3 million.

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The 2034 Senior Notes were issued under the Indenture, as supplemented through the Eighth Supplemental Indenture, dated as of February 21, 2024.

On June 13, 2024, we completed an underwritten public offering of CAD $500.0 million aggregate principal amount of 4.50% Senior Notes due June 14, 2029 (the “New 2029 Senior Notes” and, together with the 2028 Senior Notes, the 2029 Senior Notes, the 2030 Senior Notes, the 2032 Senior Notes, the New 2032 Senior Notes, the 2033 Senior Notes, the 2034 Senior Notes, the 2050 Senior Notes and the 2052 Senior Notes, the “Senior Notes”).

On June 13, 2024, we completed an underwritten public offering of CAD $500.0 million aggregate principal amount of 4.50% Senior Notes due June 14, 2029 (the “New 2029 Senior Notes”).

The New 2029 Senior Notes were issued under the Indenture, as supplemented by the Ninth Supplemental Indenture, dated as of June 13, 2024.

The New 2029 Senior Notes were issued in Canada on a private placement basis.

On June 4, 2025, we completed an underwritten public offering of $500.0 million aggregate principal amount of 5.25% Senior Notes due September 1, 2035 (the “2035 Senior Notes” and, together with the 2028 Senior Notes, the 2029 Senior Notes, the New 2029 Senior Notes, the 2030 Senior Notes, the 2032 Senior Notes, the New 2032 Senior Notes, the 2033 Senior Notes, the 2034 Senior Notes, the 2050 Senior Notes and the 2052 Senior Notes, the “Senior Notes”).

The 2035 Senior Notes were issued under the Indenture, as supplemented by the Tenth Supplemental Indenture, dated as of June 4, 2025.

We pay interest on the Senior Notes semi-annually in arrears.

The Senior Notes are our senior unsecured obligations, ranking equally in right of payment with our existing and future unsubordinated debt and senior to any of our future subordinated debt.

The Senior Notes are our 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 Senior Notes are not guaranteed by any of our subsidiaries.

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base rate loans, bearing interest at a total rate of 6.75% on such date.

At December 31, 2024, $677.6 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based CORRA rate loans, bearing interest at a total rate ranging from 4.59% to 5.24% on such date.

At December 31, 2025, $1.215 billion of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based CORRA rate loans, bearing interest at a total rate ranging from 3.41% to 3.44% on such date.

At December 31, 2025, $13.9 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based prime rate loans, bearing interest at a total rate of 4.45% on such date.

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The 2050 Senior Notes bear interest at a rate of 3.05%.

12) $850.0 million in principal payments due 2052 related to our 2052 Senior Notes.

The 2052 Senior Notes bear interest at a rate of 2.95%.

13) $26.4 million in principal payments related to our notes payable to sellers and other third parties.

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(1) We are party to unconditional purchase obligations as discussed in Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

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.

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 December 31, 2025, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 56.2 million gallons remaining to be purchased for a total of $173.6 million.

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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 liquidity measure in the solid waste industry.

We calculate 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.

We further adjust this calculation to exclude the effects of items management believes impact the ability to evaluate the liquidity of our business operations.

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 years ended December 31, 2024, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Years Ended December 31,

Net cash provided by operating activities

Change in book overdraft

Proceeds from disposal of assets

Capital expenditures for property and equipment

Payment of contingent consideration recorded in earnings (a)

Cash received for divestitures (b)

Transaction-related expenses (c)

Executive separation costs (d)

Pre-existing Progressive Waste share-based grants (e)

Tax effect (f)

Adjusted free cash flow

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.

(c) Reflects the addback of acquisition-related transaction costs and, in 2022, the settlement of an acquired tax liability.

(d) Reflects the cash component of severance expense associated with an executive departure.

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

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

Adjusted EBITDA

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The Leverage Ratio is based on EBITDA, a non-GAAP financial measure.

We present this ratio because it is used for the purposes of calculating financial covenants under our Revolving Credit Agreement.

We present this ratio because it is used for the purpose of calculating financial covenants under our Revolving Credit Agreement.

Management also uses this ratio as one of the principal measures to evaluate and monitor the indebtedness of the Company relative to its ability to generate income to service such debt.

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Other companies may calculate leverage ratios differently.

In the current environment, we have seen inflationary pressures resulting from higher fuel, materials or labor costs in certain markets and higher resulting third-party costs in areas such as brokerage, repairs and construction.

In the current environment, we have seen inflationary pressures resulting from higher materials or labor costs in certain markets and higher resulting third-party costs in areas such as brokerage, repairs and construction.

Additionally, significant changes in trade policies, including tariffs in the U.S.

or retaliatory policies in other countries, including Canada, may increase the cost of certain equipment we purchase in the U.S.

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, over time, we should be able to increase prices to offset many cost increases that result from inflation in the ordinary course of business.

We believe that, over time, we should be able to increase prices to offset many cost increases that result from inflation and any potential impact from changes in trade policies or tariffs within the ordinary course of business.

However, competitive pressures or delays in the timing of rate increases under certain of our contracts may require us to absorb at least part of these cost increases, especially if cost increases exceed the average rate of inflation.

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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 7. Management’s Discussion and Analysis