Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
We make statements in this Quarterly Report on Form 10-Q that are forward-looking in nature. These include:
● 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 Elevated Temperature Landfill, or 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;
● Forecasts of cash flows necessary for operations and free cash flow to reduce leverage as well as our ability to draw on our credit facility and access the capital markets to refinance or expand;
● Statements regarding our ability to access capital resources or credit markets;
● 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; and
● 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.
Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, risk factors detailed from time to time in our filings with the Securities and Exchange Commission, or SEC, and the securities commissions or similar regulatory authorities in Canada.
There may be additional risks of which we are not presently aware or that we currently believe are immaterial that could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements to reflect events or circumstances that may change, unless required under applicable securities laws.
OVERVIEW OF OUR BUSINESS
We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation, in mostly exclusive and secondary markets across 46 states in the U.S. and six provinces in Canada. We also provide non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services in
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several basins across the U.S. and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.
Environmental, organizational and financial sustainability initiatives have been key components of our success since we were founded in 1997. We continuously monitor and evaluate new technologies and investments that can enhance our commitment to the environment, to our employees and to the communities we serve. We have exceeded our $500 million commitment to the advancement of long-term, aspirational sustainability targets, which we evaluate continuously and have expanded as we make progress towards their achievement. Our targets align with our focus on value creation for our stakeholders, and we have incorporated progress towards their achievement into compensation metrics. Our sustainability targets include reduced absolute Scope 1 and 2 emissions and emissions intensity, expanded resource recovery processing, increased landfill gas recovery and beneficial reuse, increased on-site leachate treatment at our landfills, and improved metrics for safety and employee engagement.
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.
The solid waste industry is local and highly competitive in nature, requiring substantial labor and capital resources. 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. 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. 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. A vertically integrated operator will benefit from: (1) the internalization of waste, which is bringing waste to a company-owned landfill; (2) the ability to charge third-party haulers tipping fees either at landfills or at transfer stations; and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.
All references to “dollars” or “$” used herein refer to U.S. dollars, and all references to “CAD $” used herein refer to Canadian dollars, unless otherwise stated.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the condensed consolidated financial statements. As described by the SEC, critical accounting estimates and assumptions are those that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on the financial condition or operating performance of a company. Such critical accounting estimates and assumptions are applicable to our reportable segments. Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions.
NEW ACCOUNTING PRONOUNCEMENTS
For a description of the new accounting standards that affect us, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
The following table sets forth items in our Condensed Consolidated Statements of Net Income in thousands of U.S. dollars and as a percentage of revenues for the periods indicated.
Three Months Ended September 30,
Nine Months Ended September 30,
2026
2025
2026
2025
Revenues
$
2,638,081
100.0
%
$
2,458,378
100.0
%
$
7,570,319
100.0
%
$
7,093,609
100.0
%
Cost of operations
1,501,143
56.9
1,406,854
57.2
4,341,459
57.4
4,091,153
57.7
Selling, general and administrative
253,934
9.6
236,476
9.6
765,546
10.1
729,576
10.3
Depreciation
290,625
11.0
263,999
10.7
836,387
11.0
763,727
10.7
Amortization of intangibles
48,783
1.9
51,331
2.1
143,647
1.9
149,209
2.1
Impairments and other operating items
1,851
0.1
60,127
2.5
139,901
1.9
70,598
1.0
Operating income
541,745
20.5
439,591
17.9
1,343,379
17.7
1,289,346
18.2
Interest expense
(96,376)
(3.6)
(84,449)
(3.5)
(275,298)
(3.6)
(248,074)
(3.5)
Interest income
2,988
0.1
5,090
0.2
10,227
0.1
9,174
0.1
Other income, net
2,768
0.1
14,542
0.6
40,105
0.5
26,463
0.4
Income tax provision
(91,901)
(3.5)
(88,503)
(3.6)
(243,446)
(3.2)
(258,852)
(3.7)
Net income
$
359,224
13.6
%
$
286,271
11.6
%
$
874,967
11.5
%
$
818,057
11.5
%
Revenues . Total revenues increased $179.7 million, or 7.3%, to $2.638 billion for the three months ended September 30, 2026, from $2.458 billion for the three months ended September 30, 2025. Total revenues increased $476.7 million, or 6.7%, to $7.570 billion for the nine months ended September 30, 2026, from $7.094 billion for the nine months ended September 30, 2025.
Acquisitions closed during, or subsequent to, the three and nine months ended September 30, 2025, increased revenues by $53.9 million and $158.4 million, respectively, for the three and nine months ended September 30, 2026.
Operations that were divested during, or subsequent to, the three and nine months ended September 30, 2025, decreased revenues by $0.5 million and $4.0 million, respectively, for the three and nine months ended September 30, 2026.
During the three months ended September 30, 2026, the net increase in prices charged to our customers at our existing operations was $153.4 million, consisting of $123.7 million of core price increases and surcharges of $29.7 million. During the nine months ended September 30, 2026, the net increase in prices charged to our customers at our existing operations was $419.7 million, consisting of $366.8 million of core price increases and surcharges of $52.9 million.
During the three and nine months ended September 30, 2026, we recognized volume losses totaling $54.8 million and $176.9 million, respectively, resulting from a decrease in roll off and commercial collection volumes in our Eastern, Southern and Canada segments, partially offset by an increase in landfill volumes in our Central and Western segments.
E&P waste revenues at facilities owned during the three and nine months ended September 30, 2026 increased $19.1 million and $61.4 million, respectively, due to increased disposal capacity from ongoing development, resumed operations at a facility that was suspended, increased drilling and production in our Canada and Southern segments and higher crude oil and natural gas prices.
Revenues from sales of recyclable commodities at facilities owned during the three months ended September 30, 2026 increased $7.4 million. The increase was primarily attributable to higher prices for old corrugated cardboard. Revenues from sales of recyclable commodities at facilities owned during the nine months ended September 30, 2026 decreased $6.6 million. The decrease was primarily attributable to lower average prices for old corrugated cardboard and plastics during the first half of 2026, partially offset by the higher old corrugated cardboard prices during the three months ended September 30, 2026.
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A decrease in the average Canadian dollar to U.S. dollar currency exchange rate resulted in a decrease in revenues of $5.4 million for the three months ended September 30, 2026. The average Canadian dollar to U.S. dollar exchange rates on our Canadian revenues were 0.7149 and 0.7260 for the three months ended September 30, 2026 and 2025, respectively. An increase in the average Canadian dollar to U.S. dollar currency exchange rate resulted in an increase in revenues of $8.7 million for the nine months ended September 30, 2026. The average Canadian dollar to U.S. dollar exchange rates on our Canadian revenues were 0.7220 and 0.7158 for the nine months ended September 30, 2026 and 2025, respectively.
Other revenues increased $6.6 million during the three months ended September 30, 2026, due primarily to an $8.8 million increase in landfill gas revenues on increased gas generation and higher values of renewable energy credits and a $0.1 million increase in other non-core revenue sources, partially offset by a $2.3 million decrease in intermodal revenues. Other revenues increased $16.0 million during the nine months ended September 30, 2026, due primarily to a $20.7 million increase in landfill gas revenues on higher values of renewable energy credits and increased gas generation and a $0.6 million increase in other non-core revenue sources, partially offset by a $5.3 million decrease in intermodal revenues.
Cost of Operations . Total cost of operations increased $94.3 million, or 6.7%, to $1.501 billion for the three months ended September 30, 2026, from $1.407 billion for the three months ended September 30, 2025. The increase was primarily the result of an increase in operating costs at our existing operations of $72.3 million, assuming foreign currency parity, and additional operating costs of $24.4 million attributable to acquisitions closed during, or subsequent to, the three months ended September 30, 2025, partially offset by a decrease in operating costs of $2.4 million resulting from a lower average foreign currency exchange rate in effect during the current period.
The increase in operating costs at our existing operations for the three months ended September 30, 2026, assuming foreign currency parity, consisted of $21.6 million related to higher fuel expense due to an increase in diesel prices, higher taxes on revenues and increased operating costs of $15.6 million, primarily related to new operating facilities at existing operations and additional capacity developed to accommodate increased E&P disposal volumes, an increase in labor and recurring incentive compensation expenses of $15.3 million, higher trucking costs of $10.5 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $8.2 million, higher disposal costs of $4.8 million, an increase in other landfill operating costs of $3.6 million, higher costs for purchasing and processing recyclable commodities of $3.5 million and net increases of other operating expenses of $4.2 million, partially offset by a decrease in risk management expenses of $15.0 million.
Total cost of operations increased $250.3 million, or 6.1%, to $4.341 billion for the nine months ended September 30, 2026, from $4.091 billion for the nine months ended September 30, 2025. The increase was primarily the result of an increase in operating costs at our existing operations of $174.9 million, assuming foreign currency parity, additional operating costs of $71.4 million attributable to acquisitions closed during, or subsequent to, the nine months ended September 30, 2025, and an increase in operating costs of $4.0 million resulting from a higher average foreign currency exchange rate in effect during the current period.
The increase in operating costs at our existing operations for the nine months ended September 30, 2026, assuming foreign currency parity, consisted of higher taxes on revenues and increased operating costs of $58.1 million, primarily related to new operating facilities at existing operations and additional capacity developed to accommodate increased E&P disposal volumes, an increase in fuel expense of $42.4 million due to higher diesel prices, an increase in labor and recurring incentive compensation expenses of $37.2 million, higher trucking costs of $30.7 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $14.5 million, higher costs for purchasing and processing recyclable commodities of $7.4 million, an increase in property taxes of $3.9 million, higher disposal costs of $3.6 million and a net increase of other expenses of $3.3 million, partially offset by a decrease in risk management expenses of $26.2 million.
Cost of operations as a percentage of revenues decreased 0.3 percentage points to 56.9% for the three months ended September 30, 2026, from 57.2% for the three months ended September 30, 2025. The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.7 percentage point decrease due to lower risk management expenses and a 0.6 percentage point decrease in labor and benefits costs, partially offset by a 0.7 percentage point increase from higher fuel expense, a 0.2 percentage point increase in operating costs associated with a new facility and higher taxes on revenues and a 0.1 percentage point increase from all other net changes.
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Cost of operations as a percentage of revenues decreased 0.3 percentage points to 57.4% for the nine months ended September 30, 2026, from 57.7% for the nine months ended September 30, 2025. The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.5 percentage point decrease in labor and benefits costs and a 0.5 percentage point decrease due to lower risk management expenses, partially offset by a 0.4 percentage point increase from higher fuel expense, a 0.2 percentage point increase in operating costs associated with a new facility and higher taxes on revenues and a 0.1 percentage point increase from all other net changes.
SG&A . SG&A expenses increased $17.4 million, or 7.4%, to $253.9 million for the three months ended September 30, 2026, from $236.5 million for the three months ended September 30, 2025. The increase was comprised of $13.6 million, assuming foreign currency parity, at our existing operations and $4.3 million from acquisitions closed during, or subsequent to, the three months ended September 30, 2025, partially offset by a decrease of $0.5 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 for the three months ended September 30, 2026, assuming foreign currency parity, was comprised of an increase of $10.0 million in administrative payroll and incentive compensation expenses, a collective increase in travel and meetings expenses and charitable contributions of $4.5 million and $2.0 million of other net expense increases, partially offset by a decrease in deferred compensation costs of $2.9 million due to a decrease in the market value of investments held to fund our deferred compensation liability.
SG&A expenses increased $35.9 million, or 4.9%, to $765.5 million for the nine months ended September 30, 2026, from $729.6 million for the nine months ended September 30, 2025. The increase was comprised of $21.4 million, assuming foreign currency parity, at our existing operations, $13.6 million from acquisitions closed during, or subsequent to, the nine months ended September 30, 2025 and $0.9 million from a higher average foreign currency exchange rate in effect during the current period.
The increase in SG&A expenses at our existing operations for the nine months ended September 30, 2026, assuming foreign currency parity, was comprised of an increase in administrative payroll and incentive compensation expense of $12.3 million, a collective increase in travel and meetings expenses and charitable contributions of $8.4 million, higher expenses for uncollectible accounts receivable of $6.0 million, an increase in software license fees of $4.8 million and other net expense increases of $1.2 million, partially offset by a decrease in direct acquisition expenses of $6.8 million and a decrease in professional fees of $4.5 million.
SG&A expenses as a percentage of revenues remained flat at 9.6% for the three months ended September 30, 2026 and for the three months ended September 30, 2025. SG&A expenses as a percentage of revenues were favorably impacted by a 0.1 percentage point decrease in deferred compensation costs, offset by a 0.1 percentage point increase in administrative payroll and incentive compensation expenses.
SG&A expenses as a percentage of revenues decreased 0.2 percentage points to 10.1% for the nine months ended September 30, 2026, from 10.3% for the nine months ended September 30, 2025. The decrease as a percentage of revenues was primarily driven by a 0.1 percentage point decrease in administrative payroll and incentive compensation expenses and a 0.1 percentage point decrease in direct acquisition expenses.
Depreciation . Depreciation expense increased $26.6 million, or 10.1%, to $290.6 million for the three months ended September 30, 2026, from $264.0 million for the three months ended September 30, 2025. The increase was comprised of an increase in depreciation expense of $11.0 million from the impact of additions to our fleet and equipment purchased to support our existing operations, an increase of $8.7 million in depletion expense at our existing operations and an increase in depreciation and depletion expense of $7.5 million from acquisitions closed during, or subsequent to, the three months ended September 30, 2025, partially offset by a decrease of $0.6 million resulting from a lower average foreign currency exchange rate in effect during the current period.
Depreciation expense increased $72.7 million, or 9.5%, to $836.4 million for the nine months ended September 30, 2026, from $763.7 million for the nine months ended September 30, 2025. The increase was comprised of an increase in depreciation expense of $31.5 million from the impact of additions to our fleet and equipment purchased to support our existing operations, an increase of $20.2 million in depletion expense at our existing operations, an increase in depreciation
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and depletion expense of $20.0 million from acquisitions closed during, or subsequent to, the nine months ended September 30, 2025 and an increase of $1.1 million resulting from a higher average foreign currency exchange rate in effect during the current period, partially offset by a decrease of $0.1 million from operations divested during, or subsequent to, the nine months ended September 30, 2025.
Depreciation expense as a percentage of revenues increased 0.3 percentage points to 11.0% for the three and nine months ended September 30, 2026, from 10.7% for the three and nine months ended September 30, 2025. For both comparable periods, the increase as a percentage of revenues was primarily driven by increased depletion expense at our existing operations.
Amortization of Intangibles . Amortization of intangibles expense decreased $2.5 million, or 5.0%, to $48.8 million for the three months ended September 30, 2026, from $51.3 million for the three months ended September 30, 2025. The decrease was comprised of a decrease of $5.9 million from certain intangible assets becoming fully amortized subsequent to September 30, 2025 and $0.2 million resulting from a lower average foreign currency exchange rate in effect during the current period, partially offset by an increase of $3.6 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended September 30, 2025.
Amortization of intangibles expense decreased $5.6 million, or 3.7%, to $143.6 million for the nine months ended September 30, 2026, from $149.2 million for the nine months ended September 30, 2025. The decrease was comprised of a decrease of $17.5 million from certain intangible assets becoming fully amortized subsequent to September 30, 2025, partially offset by an increase of $11.6 million from intangible assets acquired in acquisitions closed during, or subsequent to, the nine months ended September 30, 2025 and an increase of $0.3 million due to a higher average foreign currency exchange rate in effect during the current period.
Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 1.9% for the three and nine months ended September 30, 2026, from 2.1% for the three and nine months ended September 30, 2025. For both comparable periods, the decrease as a percentage of revenues was primarily driven by a 0.3 percentage point decrease from lower amortization on existing intangibles, partially offset by a 0.1 percentage point increase related to acquisitions closed during, or subsequent to, the three and nine months ended September 30, 2025 having higher amortization expense as a percentage of revenue than our company average.
Impairments and Other Operating Items . Impairments and other operating items decreased $58.2 million, to net losses totaling $1.9 million for the three months ended September 30, 2026, from net losses totaling $60.1 million for the three months ended September 30, 2025.
The net losses of $1.9 million recorded during the three months ended September 30, 2026 consisted of net losses of $1.7 million on the disposal of property and equipment and net losses of $1.4 million for 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, partially offset by other net gains of $1.2 million.
The net losses of $60.1 million recorded during the three months ended September 30, 2025 consisted of net losses of $30.4 million for an environmental liability at an operating facility in the period, net losses of $25.4 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 $4.3 million on the disposal of property and equipment.
Impairments and other operating items increased $69.3 million, to net losses totaling $139.9 million for the nine months ended September 30, 2026, from net losses totaling $70.6 million for the nine months ended September 30, 2025.
The net losses of $139.9 million recorded during the nine months ended September 30, 2026 consisted of net losses of $132.0 million to adjust the carrying value of closure and post-closure liabilities, net losses of $2.7 million for 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, net losses of $2.0 million to adjust an environmental liability at an operating facility, net losses of $2.0 million on the disposal of property and equipment and other net losses of $1.2 million.
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The net losses of $70.6 million recorded during the nine months ended September 30, 2025 consisted of net losses of $30.4 million for an environmental liability at an operating facility in the period, net losses of $29.1 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 $12.1 million on the disposal of property and equipment, partially offset by other net gains of $1.0 million.
Operating Income . Operating income increased $102.1 million, or 23.2%, to $541.7 million for the three months ended September 30, 2026, from $439.6 million for the three months ended September 30, 2025. Operating income increased $54.0 million, or 4.2%, to $1.343 billion for the nine months ended September 30, 2026, from $1.289 billion for the nine months ended September 30, 2025.
The increase in our operating income for the three months ended September 30, 2026 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the three months ended September 30, 2025, lower impairments and other operating items, increased E&P waste revenues and decreased risk management costs. These increases were partially offset by increases in operating expenses from acquisitions closed during, or subsequent to, the three months ended September 30, 2025, an increase in fuel expense due to higher diesel prices, higher operating costs associated with new operating facilities at existing operations and additional capacity developed to accommodate increased E&P disposal volumes, and increased labor and recurring incentive compensation expenses.
The increase in our operating income for the nine months ended September 30, 2026 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the nine months ended September 30, 2025, an increase in E&P waste revenues and lower risk management costs. These increases were partially offset by increases in operating expenses from acquisitions closed during, or subsequent to, the nine months ended September 30, 2025, increased impairments and other operating items, higher operating costs associated with new operating facilities at existing operations and additional capacity developed to accommodate increased E&P disposal volumes, higher fuel expense due to increased diesel prices, and increased labor and recurring incentive compensation expenses.
Operating income as a percentage of revenues increased 2.6 percentage points to 20.5% for the three months ended September 30, 2026, from 17.9% for the three months ended September 30, 2025. The increase as a percentage of revenues was comprised of a 2.4 percentage point decrease in impairments and other operating items, a 0.3 percentage point decrease in cost of operations and a 0.2 percentage point decrease in amortization, partially offset by a 0.3 percentage point increase in depreciation.
Operating income as a percentage of revenues decreased 0.5 percentage points to 17.7% for the nine months ended September 30, 2026, from 18.2% for the nine months ended September 30, 2025. The decrease as a percentage of revenues was comprised of a 0.9 percentage point increase in impairments and other operating items and a 0.3 percentage point increase in depreciation, partially offset by a 0.3 percentage point decrease in cost of operations, a 0.2 percentage point decrease in amortization and a 0.2 percentage point decrease in selling, general and administrative expenses.
Interest Expense . Interest expense increased $12.0 million, or 14.1%, to $96.4 million for the three months ended September 30, 2026, from $84.4 million for the three months ended September 30, 2025. The increase was primarily attributable to an increase of $7.2 million from the issuance of $600.0 million of senior unsecured notes in March 2026, an increase of $2.2 million from the issuance of CAD $400.0 million of senior unsecured notes in August 2026, an increase of $1.5 million from the issuance of CAD $300.0 million of senior unsecured notes in August 2026, an increase of $0.3 million due to an increase in the average borrowings outstanding under our credit facilities during the three months ended September 30, 2026 and $0.8 million of other net expense increases.
Interest expense increased $27.2 million, or 11.0%, to $275.3 million for the nine months ended September 30, 2026, from $248.1 million for the nine months ended September 30, 2025. The increase was primarily attributable to an increase of $15.6 million from the issuance of $600.0 million of senior unsecured notes in March 2026, an increase of $11.1 million from the issuance of $500.0 million of senior unsecured notes in June 2025, an increase of $2.2 million from the issuance of CAD $400.0 million of senior unsecured notes in August 2026, an increase of $1.5 million from the issuance of CAD $300.0 million of senior unsecured notes in August 2026 and $1.0 million of other net expense increases, partially offset
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by a decrease of $2.5 million from lower interest rates on borrowings outstanding during the comparable periods and a decrease of $1.7 million due to a decrease in the average borrowings outstanding under our credit facilities during the nine months ended September 30, 2026.
Interest Income . Interest income decreased $2.1 million, or 41.3%, to $3.0 million for the three months ended September 30, 2026, from $5.1 million for the three months ended September 30, 2025. The decrease was primarily attributable to lower average cash balances in the current period and lower average investment rates. Interest income increased $1.0 million, or 11.5%, to $10.2 million for the nine months ended September 30, 2026, from $9.2 million for the nine months ended September 30, 2025. The increase was primarily attributable to higher average cash balances in the current period, partially offset by lower average investment rates.
Other Income, Net . Other income, net decreased $11.7 million to an income total of $2.8 million for the three months ended September 30, 2026, from an income total of $14.5 million for the three months ended September 30, 2025.
Other income of $2.8 million recorded during the three months ended September 30, 2026 consisted of $2.0 million from the reimbursement of expenditures, $0.8 million of foreign currency exchange gains and $1.0 million of income from other sources, partially offset by losses of $1.0 million from a decrease in the value of investments purchased to fund our employee deferred compensation obligations.
Other income of $14.5 million recorded during the three months ended September 30, 2025 consisted of $8.1 million from proceeds on insurance claims, $2.9 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period, $2.3 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations and $1.2 million of income from other sources.
Other income, net increased $13.6 million to an income total of $40.1 million for the nine months ended September 30, 2026, from an income total of $26.5 million for the nine months ended September 30, 2025.
Other income of $40.1 million recorded during the nine months ended September 30, 2026 consisted of $22.6 million from a refund on fees paid in prior periods, $5.7 million from the write-off of a liability associated with a closed facility for which no future obligation exists, $5.2 million from a vendor rebate and the reimbursement of expenditures, $4.5 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations, $1.0 million of foreign currency exchange gains and $1.1 million of income from other sources.
Other income of $26.5 million recorded during the nine months ended September 30, 2025 consisted of $10.5 million from proceeds on insurance claims, $6.8 million of gains from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period, $3.7 million from a vendor rebate and the reimbursement of expenditures, $3.7 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations and $1.8 million of income from other sources.
Income Tax Provision . Income taxes increased $3.4 million, to $91.9 million for the three months ended September 30, 2026, from $88.5 million for the three months ended September 30, 2025. Our effective tax rate for the three months ended September 30, 2026 was 20.4%. Our effective tax rate for the three months ended September 30, 2025 was 23.6%. Income taxes decreased $15.5 million, to $243.4 million for the nine months ended September 30, 2026, from $258.9 million for the nine months ended September 30, 2025. Our effective tax rate for the nine months ended September 30, 2026 was 21.8%. Our effective tax rate for the nine months ended September 30, 2025 was 24.0%.
The income tax provision for the three and nine months ended September 30, 2026 included a benefit of $0.6 million and $0.9 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.
The income tax provision for the three and nine months ended September 30, 2025 included a benefit of $0.1 million and $4.9 million, respectively, from share-based payment awards being recognized in the income statement when settled,
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as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.
SEGMENT RESULTS
General
No single contract or customer accounted for more than 10% of our total revenues at the consolidated or reportable segment level during the periods presented. For details on revenue by service line, see Note 4 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
For the nine months ended September 30, 2026, we managed our operations through the following six geographic solid waste operating segments: Southern, Western, Eastern, Central, MidSouth and Canada. Our six geographic solid waste operating segments comprise our reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. Certain corporate or regional overhead expense allocations may affect comparability of the segment information presented herein on a period-over-period basis.
Our Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA. We define segment EBITDA as earnings before interest, taxes, depreciation, amortization, impairments and other operating items and other income (expense). Segment EBITDA is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. Our management uses segment EBITDA in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.
Summarized financial information for our reportable segments is shown in the following tables in thousands of U.S. dollars and as a percentage of total segment revenue for the periods indicated.
Three Months Ended
Segment
EBITDA
September 30, 2026
Revenue
Expenses
EBITDA (b)
Margin
Southern
$
548,806
$
356,700
$
192,106
35.0
%
Western
522,375
370,099
152,276
29.2
%
Eastern
451,227
331,671
119,556
26.5
%
Central
435,848
272,185
163,663
37.6
%
MidSouth
300,605
211,674
88,931
29.6
%
Canada
379,220
210,314
168,906
44.5
%
Corporate (a)
—
2,434
(2,434)
—
$
2,638,081
$
1,755,077
$
883,004
33.5
%
Three Months Ended
Segment
EBITDA
September 30, 2025
Revenue
Expenses
EBITDA (b)
Margin
Southern
$
485,394
$
327,038
$
158,356
32.6
%
Western
486,255
342,473
143,782
29.6
%
Eastern
440,770
319,770
121,000
27.5
%
Central
413,389
262,741
150,648
36.4
%
MidSouth
282,804
202,163
80,641
28.5
%
Canada
349,766
189,851
159,915
45.7
%
Corporate (a)
—
(706)
706
—
$
2,458,378
$
1,643,330
$
815,048
33.2
%
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Nine Months Ended
Segment
EBITDA
September 30, 2026
Revenue
Expenses
EBITDA
Margin
Southern
$
1,560,494
$
1,037,036
$
523,458
33.5
%
Western
1,477,548
1,068,150
409,398
27.7
%
Eastern
1,300,903
951,694
349,209
26.8
%
Central
1,256,372
792,704
463,668
36.9
%
MidSouth
865,187
622,257
242,930
28.1
%
Canada
1,109,815
624,050
485,765
43.8
%
Corporate (a)
—
11,114
(11,114)
—
$
7,570,319
$
5,107,005
$
2,463,314
32.5
%
Nine Months Ended
Segment
EBITDA
September 30, 2025
Revenue
Expenses
EBITDA
Margin
Southern
$
1,415,741
$
954,378
$
461,363
32.6
%
Western
1,386,322
1,002,225
384,097
27.7
%
Eastern
1,286,253
947,818
338,435
26.3
%
Central
1,188,859
763,082
425,777
35.8
%
MidSouth
820,520
592,471
228,049
27.8
%
Canada
995,914
544,487
451,427
45.3
%
Corporate (a)
—
16,268
(16,268)
—
$
7,093,609
$
4,820,729
$
2,272,880
32.0
%
(a) The majority of Corporate expenses are allocated to the six operating segments. Direct acquisition expenses and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the six operating segments and comprise the net EBITDA for our Corporate segment for the periods presented.
(b) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in our most recent Annual Report on Form 10-K.
A reconciliation of segment EBITDA to Income before income tax provision is included in Note 10 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this report.
Significant changes in revenue, segment expenses and EBITDA for our reportable segments for the three and nine month periods ended September 30, 2026, compared to the three and nine month periods ended September 30, 2025, are discussed below.
Southern
Revenue increased $63.4 million to $548.8 million for the three months ended September 30, 2026, from $485.4 million for the three months ended September 30, 2025. Revenue increased $144.8 million to $1.560 billion for the nine months ended September 30, 2026, from $1.416 billion for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases, contributions from acquisitions and higher E&P waste revenues attributable to increases in drilling and production activity, partially offset by lower commercial and residential collection volumes, a decrease from operations divested during the comparable periods and lower recyclable commodity revenues.
Segment expenses increased $29.7 million to $356.7 million for the three months ended September 30, 2026, from $327.0 million for the three months ended September 30, 2025. Segment expenses increased $82.7 million to $1.037 billion for the nine months ended September 30, 2026, from $954.4 million for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to expenses from acquisitions closed during, or subsequent to, the comparable periods, an increase in third-party brokerage, higher fuel costs due to diesel prices, an increase in labor costs, higher truck, container, equipment and facility maintenance and repair expenses and an increase in professional fees, partially offset by lower risk management costs and a decrease from operations divested during the comparable periods.
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EBITDA increased $33.7 million to $192.1 million, or a 35.0% EBITDA margin for the three months ended September 30, 2026, from $158.4 million, or a 32.6% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $62.1 million to $523.5 million, or a 33.5% EBITDA margin for the nine months ended September 30, 2026, from $461.4 million, or a 32.6% EBITDA margin for the nine months ended September 30, 2025. The increases in our EBITDA margin for the three and nine months ended September 30, 2026 were due to lower risk management costs, a decrease in labor costs as a percentage of revenue, lower allocated corporate overhead, and a decrease in landfill monitoring and maintenance costs, partially offset by higher fuel costs due to diesel prices and an increase in professional fees.
Western
Revenue increased $36.1 million to $522.4 million for the three months ended September 30, 2026, from $486.3 million for the three months ended September 30, 2025. Revenue increased $91.2 million to $1.478 billion for the nine months ended September 30, 2026, from $1.386 billion for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases, contributions from acquisitions, an increase in residential and commercial collection volumes, higher post-collection volumes and an increase in recyclable commodity revenues, partially offset by a decrease in intermodal activity and lower E&P waste revenues.
Segment expenses increased $27.6 million to $370.1 million for the three months ended September 30, 2026, from $342.5 million for the three months ended September 30, 2025. Segment expenses increased $65.9 million to $1.068 billion for the nine months ended September 30, 2026, from $1.002 billion for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to higher labor and benefits costs, an increase in expenses from acquisitions closed during, or subsequent to, the comparable periods, higher fuel costs due to diesel prices, an increase in operating costs associated with higher collection volumes, an increase in taxes on revenues and higher truck, container, equipment and facility maintenance and repair expenses, partially offset by a decrease in risk management costs and lower post-closure liability interest accretion expense.
EBITDA increased $8.5 million to $152.3 million, or a 29.2% EBITDA margin for the three months ended September 30, 2026, from $143.8 million, or a 29.6% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $25.3 million to $409.4 million, or a 27.7% EBITDA margin for the nine months ended September 30, 2026, from $384.1 million, or a 27.7% EBITDA margin for the nine months ended September 30, 2025. The decrease in our EBITDA margin for the three months ended September 30, 2026 was due primarily to higher fuel costs due to diesel prices, the impact of acquisitions having lower EBITDA margins than our segment average, an increase in labor costs as a percentage of revenue and higher allocated corporate overhead, partially offset by a decrease in risk management costs and lower rail costs associated with decreased intermodal activity. EBITDA margin for the nine months ended September 30, 2026 was favorably impacted by lower risk management costs and a decrease in post-closure liability interest accretion expense, offset by higher fuel costs due to diesel prices, the impact of acquisitions having lower EBITDA margins than our segment average and an increase in labor costs as a percentage of revenue.
Eastern
Revenue increased $10.4 million to $451.2 million for the three months ended September 30, 2026, from $440.8 million for the three months ended September 30, 2025. Revenue increased $14.6 million to $1.301 billion for the nine months ended September 30, 2026, from $1.286 billion for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases and contributions from acquisitions, partially offset by lower commercial collection volumes, decreases in roll off and post-collection volumes and a decrease in recyclable commodity revenues as compared to the prior periods.
Segment expenses increased $11.9 million to $331.7 million for the three months ended September 30, 2026, from $319.8 million for the three months ended September 30, 2025. Segment expenses increased $3.9 million to $951.7 million for the nine months ended September 30, 2026, from $947.8 million for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to an increase in expenses from acquisitions closed during, or subsequent to, the comparable periods, higher landfill monitoring and maintenance costs, an increase in fuel costs due to diesel prices and higher risk management costs, partially offset by a decrease in
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disposal expense, lower allocated corporate overhead, a decrease in labor costs and lower truck, container, equipment and facility maintenance and repair expenses.
EBITDA decreased $1.4 million to $119.6 million, or a 26.5% EBITDA margin for the three months ended September 30, 2026, from $121.0 million, or a 27.5% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $10.8 million to $349.2 million, or a 26.8% EBITDA margin for the nine months ended September 30, 2026, from $338.4 million, or a 26.3% EBITDA margin for the nine months ended September 30, 2025. The decrease in our EBITDA margin for the three months ended September 30, 2026 was due primarily to higher risk management costs, an increase in fuel costs due to diesel prices and higher landfill monitoring and maintenance costs, partially offset by the impact of acquisitions having higher EBITDA margins than our segment average and a decrease in allocated corporate overhead. The increase in our EBITDA margin for the nine months ended September 30, 2026 was due primarily to price-led revenue growth, a decrease in disposal expense, the impact of acquisitions having higher EBITDA margins than our segment average and lower allocated corporate overhead, partially offset by higher landfill monitoring and maintenance costs and an increase in fuel costs due to diesel prices.
Central
Revenue increased $22.4 million to $435.8 million for the three months ended September 30, 2026, from $413.4 million for the three months ended September 30, 2025. Revenue increased $67.5 million to $1.256 billion for the nine months ended September 30, 2026, from $1.189 billion for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases, contributions from acquisitions, an increase in landfill gas sales and higher recyclable commodity revenues, partially offset by lower roll off volumes, a decrease in commercial and residential collection volumes and lower E&P waste revenues.
Segment expenses increased $9.5 million to $272.2 million for the three months ended September 30, 2026, from $262.7 million for the three months ended September 30, 2025. Segment expenses increased $29.6 million to $792.7 million for the nine months ended September 30, 2026, from $763.1 million for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to an increase in labor and benefits expenses, higher fuel costs due to diesel prices, an increase in third-party brokerage, higher taxes on revenues, an increase in truck, container, equipment and facility maintenance and repair expenses, higher fees paid for the processing of recyclable materials and an increase in operating costs associated with higher post-collection volumes, partially offset by a decrease in risk management costs.
EBITDA increased $13.1 million to $163.7 million, or a 37.6% EBITDA margin for the three months ended September 30, 2026, from $150.6 million, or a 36.4% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $37.9 million to $463.7 million, or a 36.9% EBITDA margin for the nine months ended September 30, 2026, from $425.8 million, or a 35.8% EBITDA margin for the nine months ended September 30, 2025. The increases in our EBITDA margin for the three and nine months ended September 30, 2026 were due primarily to lower labor and benefits costs as a percentage of revenue, a decrease in risk management costs, lower allocated corporate overhead and price-led revenue growth, partially offset by higher fuel costs due to diesel prices and an increase in uncollectible accounts receivable.
MidSouth
Revenue increased $17.8 million to $300.6 million for the three months ended September 30, 2026, from $282.8 million for the three months ended September 30, 2025. Revenue increased $44.7 million to $865.2 million for the nine months ended September 30, 2026, from $820.5 million for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases and contributions from acquisitions, partially offset by a decrease in residential and commercial collection volumes and lower roll off volumes.
Segment expenses increased $9.5 million to $211.7 million for the three months ended September 30, 2026, from $202.2 million for the three months ended September 30, 2025. Segment expenses increased $29.8 million to $622.3 million for the nine months ended September 30, 2026, from $592.5 million for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to an increase
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in labor and benefits expenses, higher third-party brokerage, an increase in truck, container, equipment and facility maintenance and repair expenses, higher fuel costs due to diesel prices and an increase in expenses from acquisitions closed during, or subsequent to, the comparable periods, partially offset by a decrease in risk management costs.
EBITDA increased $8.3 million to $88.9 million, or a 29.6% EBITDA margin for the three months ended September 30, 2026, from $80.6 million, or a 28.5% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $14.9 million to $242.9 million, or a 28.1% EBITDA margin for the nine months ended September 30, 2026, from $228.0 million, or a 27.8% EBITDA margin for the nine months ended September 30, 2025. The increases in our EBITDA margin for the three and nine months ended September 30, 2026 were due primarily to lower labor and benefits costs as a percentage of revenue, a decrease in risk management costs and lower allocated corporate overhead, partially offset by higher third-party brokerage and an increase in fuel costs.
Canada
Revenue increased $29.4 million to $379.2 million for the three months ended September 30, 2026, from $349.8 million for the three months ended September 30, 2025. Revenue increased $113.9 million to $1.110 billion for the nine months ended September 30, 2026, from $995.9 million for the nine months ended September 30, 2025. The increases for the three and nine months ended September 30, 2026 were due to price increases, higher E&P waste revenues attributable to an increase in volumes, an increase in landfill gas sales, contributions from acquisitions and an increase in recyclable commodity revenues, partially offset by a decrease in commercial and residential collection volumes.
Segment expenses increased $20.4 million to $210.3 million for the three months ended September 30, 2026, from $189.9 million for the three months ended September 30, 2025. Segment expenses increased $79.6 million to $624.1 million for the nine months ended September 30, 2026, from $544.5 million for the nine months ended September 30, 2025. The increases to segment expenses for the three and nine months ended September 30, 2026 were due to an increase in operating costs associated with an increase in E&P and landfill volumes, higher fuel costs due to diesel prices, an increase in third-party brokerage, higher expenses associated with a new operating facility, an increase in labor and benefits expenses, higher allocated corporate overhead and an increase in disposal expense .
EBITDA increased $9.0 million to $168.9 million, or a 44.5% EBITDA margin for the three months ended September 30, 2026, from $159.9 million, or a 45.7% EBITDA margin for the three months ended September 30, 2025. EBITDA increased $34.4 million to $485.8 million, or a 43.8% EBITDA margin for the nine months ended September 30, 2026, from $451.4 million, or a 45.3% EBITDA margin for the nine months ended September 30, 2025. The decreases in our EBITDA margin for the three and nine months ended September 30, 2026 were due to increases in costs associated with incremental volumes, a new operating facility developed subsequent to the prior periods and higher fuel costs due to diesel prices, partially offset by lower labor and benefits costs as a percentage of revenue and an increase in renewable energy credits generated.
Corporate
Segment expenses increased $3.1 million to expenses of $2.4 million for the three months ended September 30, 2026, from income of $0.7 million for the three months ended September 30, 2025. Segment expenses decreased $5.2 million to $11.1 million for the nine months ended September 30, 2026, from $16.3 million for the nine months ended September 30, 2025. The increase to segment expenses for the three months ended September 30, 2026 was due to an increase in labor and benefits costs, partially offset by a decrease in deferred compensation costs. The decrease to segment expenses for the nine months ended September 30, 2026 was due to a decrease in professional fees and lower deal costs associated with acquisitions closed during, or subsequent to, the prior periods, partially offset by an increase in labor and benefits costs, a decrease in allocation of costs to our operating segments and an increase in travel, meetings and training expenses . EBITDA decreased $3.1 million and increased $5.2 million for the three and nine months ended September 30, 2026, respectively, as compared to the prior periods, due to the changes in segment expenses.
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LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth cash flow information for the nine months ended September 30, 2026 and 2025 (in thousands of U.S. dollars):
Nine Months Ended
September 30,
2026
2025
Net cash provided by operating activities
$
1,970,811
$
1,857,190
Net cash used in investing activities
(1,311,273)
(1,433,913)
Net cash used in financing activities
(607,638)
(331,492)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(2,661)
627
Net increase in cash, cash equivalents and restricted cash
49,239
92,412
Cash, cash equivalents and restricted cash at beginning of period
229,580
198,173
Cash, cash equivalents and restricted cash at end of period
$
278,819
$
290,585
Operating Activities Cash Flows
Net cash provided by operating activities increased $113.6 million to $1.971 billion for the nine months ended September 30, 2026, from net cash provided by operating activities of $ 1.857 billion for the nine months ended September 30, 2025. 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 $169.3 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, provision for expected credit losses, interest accretion and gain on disposal of assets, operations, and impairments, due primarily to price increases and operating income generated from acquisitions closed during, or subsequent to, the nine months ended September 30, 2025.
2) Accounts receivable — Our increase in net cash provided by operating activities was favorably impacted by $21.1 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $95.6 million for the nine months ended September 30, 2026, compared to a decrease to operating cash flows of $ 116.7 million for the nine months ended September 30, 2025. The decrease for the nine months ended September 30, 2026 was driven by higher revenues, which remained as outstanding receivables at the end of the period, partially offset by improved receivables turnover from collection efforts. The decrease for the nine months ended September 30, 2025 was due to increases in revenue, which remained as outstanding receivables at the end of the period.
3) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was unfavorably impacted by $55.6 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $92.2 million for the nine months ended September 30, 2026, compared to an increase to operating cash flows of $ 147.8 million for the nine months ended September 30, 2025. The increase for the nine months ended September 30, 2026 was due primarily to outstanding obligations to vendors and an increase in accrued insurance costs, partially offset by a decrease in accrued payroll. The increase for the nine months ended September 30, 2025 was due primarily to an increase in accrued insurance costs, outstanding obligations to vendors and an increase in accrued payroll.
4) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $31.5 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $62.3 million for the nine months ended September 30, 2026, compared to an increase to operating cash flows of $93.8 million for the nine months ended September 30, 2025. The increases for the nine months ended September 30, 2026 and 2025 were 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 periods.
At September 30, 2026, we had a working capital deficit of $717.8 million, including cash and equivalents of $95.7 million. Our working capital deficit decreased $94.9 million from a working capital deficit of $812.7 million at December
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31, 2025 including cash and equivalents of $46.0 million, due primarily to an increase in accounts receivable as a result of increases in revenue, partially offset by improved receivables turnover, and an increase in cash. To date, we have experienced no loss or lack of access to our cash and equivalents; however, we can provide no assurances that access to our cash and equivalents will not be impacted by adverse conditions in the financial markets. Our strategy in managing our working capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital expenditure requirements, along with share repurchase and dividend programs, to reduce the unhedged portion of our indebtedness under our Revolving Credit Agreement and to minimize our cash balances.
Investing Activities Cash Flows
Net cash used in investing activities decreased $122.6 million to $1.311 billion for the nine months ended September 30, 2026, from $ 1.434 billion for the nine months ended September 30, 2025. The significant components of the decrease included the following:
1) A decrease in cash paid for acquisitions of $258.6 million; less
2) An increase in capital expenditures at operations owned in the comparable period of $74.7 million due to ongoing projects and expenditures for trucks and equipment, partially offset by a decrease in expenditures for office equipment;
3) An increase in capital expenditures for undeveloped land at certain existing facilities of $56.2 million; and
4) An increase in capital expenditures at operations acquired during the comparable period of $24.1 million due to expenditures for facility improvements, trucks and equipment.
Financing Activities Cash Flows
Net cash used in financing activities increased $276.1 million to $607.6 million for the nine months ended September 30, 2026, from $ 331.5 million for the nine months ended September 30, 2025. The significant components of the increase included the following:
1) An increase from higher payments to repurchase our common shares of $502.3 million during the nine months ended September 30, 2026;
2) An increase from higher cash dividends paid of $21.5 million due primarily to an increase in our quarterly dividend rate for the nine months ended September 30, 2026 to $0.350 per share, from $0.315 per share for the nine months ended September 30, 2025; less
3) A decrease from the net change in long-term borrowings of $233.0 million in which long-term borrowings increased $649.6 million during the nine months ended September 30, 2026 and increased $ 416.6 million during the nine months ended September 30, 2025; and
4) A decrease from lower payments related to contingent consideration of $17.1 million in which contingent consideration costs decreased $11.2 million during the nine months ended September 30, 2026 and decreased $28.3 million during the nine months ended September 30, 2025.
On August 7, 2026, we announced the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 12,578,462 of our common shares during the period of August 12, 2026 to August 11, 2027 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. Information regarding the NCIB can be found under the section “Normal Course Issuer Bid” in Note 16 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and is incorporated herein by reference.
Our Board of Directors authorized the initiation of a quarterly cash dividend in October 2010 and has increased it on an annual basis. In October 2025, we announced that our Board of Directors increased our regular quarterly cash dividend by $0.035, from $0.315 to $0.350 per share. Cash dividends of $265.5 million and $ 244.0 million were paid during the nine months ended September 30, 2026 and 2025, respectively. We cannot assure as to the amounts or timing of future dividends.
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Our business is capital intensive. 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 expect to make total capital expenditures for property and equipment in 2026 of approximately $1.250 billion. We have funded and intend to fund the balance of our planned 2026 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Revolving Credit Agreement. In addition, we may make substantial additional capital expenditures in acquiring land and municipal solid waste and E&P waste businesses. If we acquire additional landfill disposal facilities, we may also have to make significant expenditures to bring them into compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We cannot currently determine the amount of these expenditures because they will depend on the number, nature, condition and permitted status of any acquired landfill disposal facilities. We believe that our cash and equivalents, Revolving Credit Agreement and the funds we expect to generate from operations will provide adequate cash to fund our working capital and other cash needs for the foreseeable future. However, disruptions in the capital and credit markets could adversely affect our ability to draw on our Revolving Credit Agreement or raise other capital. Our access to funds under the Revolving Credit Agreement is dependent on the ability of the banks that are parties to the agreement to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.
On August 4, 2026, we completed an underwritten public offering of CAD $300.0 million aggregate principal amount of our 4.20% Senior Notes due 2033 (the “New 2033 Senior Notes”) and CAD $400.0 million aggregate principal amount of our 4.55% Senior Notes due 2036 (the “New 2036 Senior Notes”). The New 2033 Senior Notes and New 2036 Senior Notes were issued under an indenture, dated as of November 16, 2018 (as amended, restated, supplemented or otherwise modified from time to time), by and between the Company and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as trustee (the “Base Indenture”), as supplemented by a twelfth supplemental indenture, dated as of August 4, 2026. See Note 9 to our Condensed Consolidated Financial Statements for further details on the New 2033 Senior Notes and New 2036 Senior Notes.
On March 16, 2026, we completed an underwritten public offering of $600.0 million aggregate principal amount of our 4.80% Senior Notes due 2036 (the “2036 Senior Notes”). The 2036 Senior Notes were issued under the Base Indenture, as supplemented by an eleventh supplemental indenture, dated as of March 16, 2026.
At September 30, 2026, $1.929 billion under the revolving credit facility was outstanding under the Revolving Credit Agreement, exclusive of outstanding standby letters of credit of $122.2 million. We also had $323.9 million of letters of credit issued and outstanding at September 30, 2026 under facilities other than the Revolving Credit Agreement. Our Revolving Credit Agreement matures on February 27, 2029.
We are a well-known seasoned issuer with an effective shelf registration statement on Form S-3 filed in October 2024, which registers an unspecified amount of debt securities, including debentures, notes or other types of debt. In the future, we may issue debt securities under our shelf registration statement or in private placements from time to time on an opportunistic basis, based on market conditions and available pricing. Unless otherwise indicated in the relevant offering documents, we expect to use the proceeds from any such offerings for general corporate purposes, including repaying, redeeming or repurchasing debt, acquiring additional assets or businesses, capital expenditures and increasing our working capital.
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At September 30, 2026, we had the following contractual obligations:
Payments Due by Period
(amounts in thousands of U.S. dollars)
Less Than
1 to 3
Over 5
Recorded Obligations
Total
1 Year
Years
3 to 5 Years
Years
Long-term debt
$
9,510,441
$
7,801
$
3,294,946
$
607,586
$
5,600,108
Cash interest payments
$
2,828,702
$
387,702
$
697,244
$
441,311
$
1,302,445
Contingent consideration
$
93,019
$
60,120
$
3,224
$
3,224
$
26,451
Operating leases
$
409,900
$
48,043
$
90,579
$
82,724
$
188,554
Final capping, closure and post-closure
$
2,362,637
$
105,800
$
128,792
$
47,149
$
2,080,896
Long-term debt payments include:
1) $1.929 billion in principal payments due February 27, 2029 related to our revolving credit facility under our Revolving Credit Agreement. We may elect to draw amounts on our Revolving Credit Agreement in U.S. dollar term SOFR rate loans, U.S. dollar base rate loans, Canadian dollar term CORRA rate loans, and Canadian dollar prime rate loans. At September 30, 2026, $1.312 billion of the outstanding borrowings drawn under the revolving credit facility were in U.S. term SOFR rate loans, which bear interest at the term SOFR rate plus the applicable margin (for a total rate ranging from 4.56% to 4.77% on such date). At September 30, 2026, $50.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S. base rate loans, bearing interest at a total rate of 7.00% on such date. At September 30, 2026, $563.8 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based CORRA rate loans, which bear interest at the term CORRA rate plus the applicable margin (for a total rate of 3.45% on such date). At September 30, 2026, $3.5 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.
2) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes. The 2028 Senior Notes bear interest at a rate of 4.25%.
3) $500.0 million in principal payments due 2029 related to our 2029 Senior Notes. The 2029 Senior Notes bear interest at a rate of 3.50%.
4) $352.4 million in principal payments due 2029 related to our New 2029 Senior Notes. The New 2029 Senior Notes bear interest at a rate of 4.50%.
5) $600.0 million in principal payments due 2030 related to our 2030 Senior Notes. The 2030 Senior Notes bear interest at a rate of 2.60%.
6) $650.0 million in principal payments due 2032 related to our 2032 Senior Notes. The 2032 Senior Notes bear interest at a rate of 2.20%.
7) $500.0 million in principal payments due 2032 related to our New 2032 Senior Notes. The New 2032 Senior Notes bear interest at a rate of 3.20%.
8) $750.0 million in principal payments due 2033 related to our 2033 Senior Notes. The 2033 Senior Notes bear interest at a rate of 4.20%.
9) $211.4 million in principal payments due 2033 related to our New 2033 Senior Notes. The New 2033 Senior Notes bear interest at a rate of 4.20%.
10) $750.0 million in principal payments due 2034 related to our 2034 Senior Notes. The 2034 Senior Notes bear interest at a rate of 5.00%.
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11) $500.0 million in principal payments due 2035 related to our 2035 Senior Notes. The 2035 Senior Notes bear interest at a rate of 5.25%.
12) $600.0 million in principal payments due 2036 related to our 2036 Senior Notes. The 2036 Senior Notes bear interest at a rate of 4.80%.
13) $281.9 million in principal payments due 2036 related to our New 2036 Senior Notes. The New 2036 Senior Notes bear interest at a rate of 4.55%.
14) $500.0 million in principal payments due 2050 related to our 2050 Senior Notes. The 2050 Senior Notes bear interest at a rate of 3.05%.
15) $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%.
16) $21.6 million in principal payments related to our notes payable to sellers and other third parties. Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at September 30, 2026, and have maturity dates ranging from 2028 to 2044.
17) $13.7 million in principal payments related to our financing leases. Our financing leases bear interest at rates between 1.89% and 12.00% at September 30, 2026, and have expiration dates ranging from 2027 to 2035.
The following assumptions were made in calculating cash interest payments:
1) We calculated cash interest payments on the Revolving Credit Agreement using the term SOFR rate plus the applicable term SOFR margin, the base rate plus the applicable base rate margin, the term CORRA rate plus the applicable margin and the Canadian prime rate plus the applicable prime rate margin at September 30, 2026. We assumed the Revolving Credit Agreement is paid off when it matures in February 2029.
2) We calculated cash interest payments on our interest rate swaps using the stated interest rate in the swap agreement less the term SOFR rate through the term of the swaps.
Contingent consideration payments include $79.6 million recorded as liabilities in our Condensed Consolidated Financial Statements at September 30, 2026, and $13.4 million of future interest accretion on the recorded obligations.
We are party to operating lease agreements and finance leases. These lease agreements are established in the ordinary course of our business and are designed to provide us with access to facilities and equipment at competitive, market-driven prices.
The estimated final capping, closure and post-closure expenditures presented above are in current dollars.
Amount of Commitment Expiration Per Period
(amounts in thousands of U.S. dollars)
Less Than
1 to 3
3 to 5
Over 5
Unrecorded Obligations (1)
Total
1 Year
Years
Years
Years
Unconditional purchase obligations
$
86,743
$
70,161
$
16,142
$
440
$
—
(1) We are party to unconditional purchase obligations. These purchase obligations are established in the ordinary course of our business and are designed to provide us with access to products at competitive, market-driven prices. At September 30, 2026, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 31.1 million gallons remaining to be purchased for a total of $86.7 million. The current fuel purchase contracts expire on or before December 31, 2029. These arrangements have not materially affected our financial position, results of operations or liquidity during the nine months ended September 30, 2026, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.
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We have obtained financial surety bonds, primarily to support our financial assurance needs and landfill and E&P waste operations. We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $2.248 billion and $2.157 billion at September 30, 2026 and December 31, 2025, respectively. These arrangements have not materially affected our financial position, results of operations or liquidity during the nine months ended September 30, 2026, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.
From time to time, we evaluate our existing operations and their strategic importance to us. If we determine that a given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations. Although we believe our reporting units would not be impaired by such dispositions, we could incur losses on them.
The disposal tonnage that we received in the nine-month periods ended September 30, 2026 and 2025, at all of our landfills during the respective period, is shown below (tons in thousands):
Nine Months Ended September 30,
2026
2025
Number
Total
Number
Total
of Sites
Tons
of Sites
Tons
Owned operational landfills and landfills operated under life-of-site agreements
108
39,974
106
38,667
Operated landfills
7
547
7
527
115
40,521
113
39,194
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NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
We present adjusted EBITDA, a non-GAAP financial measure, supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry. Management uses adjusted EBITDA as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We define adjusted EBITDA as net income, plus income tax provision, plus interest expense, less interest income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on impairments and other operating items, plus other expense, less other income. We further adjust this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted EBITDA differently. Our adjusted EBITDA for the three and nine-month periods ended September 30, 2026 and 2025, is calculated as follows (amounts in thousands of U.S. dollars):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2026
2025
2026
2025
Net income
$
359,224
$
286,271
$
874,967
$
818,057
Plus: Income tax provision
91,901
88,503
243,446
258,852
Plus: Interest expense
96,376
84,449
275,298
248,074
Less: Interest income
(2,988)
(5,090)
(10,227)
(9,174)
Plus: Depreciation and amortization
339,408
315,330
980,034
912,936
Plus: Closure and post-closure accretion
10,343
11,963
30,962
35,779
Plus: Impairments and other operating items
1,851
60,127
139,901
70,598
Less: Other income, net
(2,768)
(14,542)
(40,105)
(26,463)
Adjustments:
Plus: Transaction-related expenses (a)
3,004
3,835
12,952
19,778
Plus (less): Fair value changes to equity awards (b)
(570)
(509)
(1,839)
527
Adjusted EBITDA
$
895,781
$
830,337
$
2,505,389
$
2,328,964
(a) Reflects the addback of acquisition-related transaction costs.
(b) Reflects fair value accounting changes associated with certain equity awards .
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Adjusted Net Income and Adjusted Net Income per Diluted Share
We present adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures, supplementally because they are widely used by investors as valuation measures in the solid waste industry. Management uses adjusted net income and adjusted net income per diluted share as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income and adjusted net income per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently. Our adjusted net income and adjusted net income per diluted share for the three and nine-month periods ended September 30, 2026 and 2025, are calculated as follows (amounts in thousands of U.S. dollars, except per share amounts):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2026
2025
2026
2025
Reported net income
$
359,224
$
286,271
$
874,967
$
818,057
Adjustments:
Amortization of intangibles (a)
48,783
51,331
143,647
149,209
Impairments and other operating items (b)
1,851
60,127
139,901
70,598
Transaction-related expenses (c)
3,004
3,835
12,952
19,778
Fair value changes to equity awards (d)
(570)
(509)
(1,839)
527
Tax effect (e)
(13,412)
(29,005)
(74,177)
(59,903)
Adjusted net income
$
398,880
$
372,050
$
1,095,451
$
998,266
Diluted earnings per common share:
Reported net income
$
1.43
$
1.11
$
3.45
$
3.16
Adjusted net income
$
1.58
$
1.44
$
4.32
$
3.86
(a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets .
(b) Reflects the addback of impairments and other operating items.
(c) Reflects the addback of acquisition-related transaction costs.
(d) Reflects fair value accounting changes associated with certain equity awards.
(e) The aggregate tax effect of the adjustments in footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods.
INFLATION
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, and we have seen impacts from geopolitical events, including the Iran war, that are resulting in increased costs related to diesel and other fuels. 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. and Canada. 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. 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. Management’s estimates associated with inflation have an impact on our accounting for landfill liabilities.
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SEASONALITY
Based on historic trends, excluding any impact from an economic recession, we would expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters and lower in the fourth quarter than in the second and third quarters. This seasonality reflects (a) the lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during winter months in Canada and the U.S. and (b) reduced E&P activity during harsh weather conditions, with expected fluctuation due to such seasonality between our highest and lowest quarters of approximately 10%. In addition, some of our operating costs may be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and operational costs. Greater precipitation in the winter increases the weight of collected municipal solid waste, resulting in higher disposal costs, which are calculated primarily on a per ton basis.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.