What changed in this filing

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Item 1A. Risk Factors

2021-02-18 compared with 2020-02-13 · 142 added, 183 removed, 226 unchanged (59% of the section changed)

Certain statements contained in this Annual Report on Form 10-K are forward-looking in nature, including statements related to the impact of global economic conditions, including the price of crude oil, on our volume, business and results of operations;

our ability to generate internal growth or expand permitted capacity at landfills we own or operate;

our ability to grow through acquisitions and our expectations with respect to the impact of acquisitions on our expected revenues and expenses following the integration of such businesses;

the competitiveness of our industry and how such competition may affect our operating results;

the possibility of losing contracts through competitive bidding, early termination or governmental action;

the effects of financial difficulties of some of our customers, including governmental entities, affecting their credit risk;

our ability to provide adequate cash to fund our operating activities;

our ability to draw from our credit facility or raise additional capital;

our ability to generate free cash flow and reduce our leverage;

the impact on our tax positions by recent changes in U.S.

the effects of landfill special waste projects on volume results;

the impact that price increases may have on our business and operating results;

demand for recyclable commodities and recyclable commodity pricing;

the effects of seasonality on our business and results of operations;

our ability to obtain additional exclusive arrangements;

increasing alternatives to landfill disposal;

increases in labor and pension plan costs or the impact that labor union activity may have on our operating results;

operational and safety risks, including the risk of personal injury to employees and others;

our expectations with respect to the purchase of fuel and fuel prices;

our expectations with respect to capital expenditures;

our expectations with respect to the outcomes of our legal proceedings;

the impairment of our goodwill;

insurance costs;

disruptions to or breaches of our information systems and other cybersecurity threats;

and environmental, health and safety laws and regulations, including changes to the regulation of landfills, solid waste disposal, E&P waste disposal, or hydraulic fracturing.

These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “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, those listed below and elsewhere in this Annual Report on Form 10-K.

There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business.

We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

Our results are vulnerable to economic conditions.

Our business and financial results would be harmed by downturns in the global economy, or in the economy of the regions in which we operate as well as other factors affecting those regions, including the price of crude oil.

In an economic slowdown, we experience the negative effects of decreased waste generation, increased competitive pricing pressure, customer turnover, and reductions in customer service requirements, any of which could negatively impact our

operating income and cash flows.

Two of our business lines that could see a more immediate impact would be construction and demolition debris and E&P waste disposal as demand for new construction or energy exploration decreases.

In addition, a weaker economy may result in declines in recycled commodity prices.

Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations.

Further, we cannot assure you that any improvement in economic conditions after such a downturn will result in an immediate, if at all, positive improvement in our operating results or cash flows.

This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements based on expectations, estimates, and projections as of the date of this filing.

Actual results may differ materially from those expressed in forward-looking statements.

See Item 7 of Part II – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Risk Factors Related to Our Company and Industry

Public health crises and the effects of related governmental initiatives have adversely affected and may continue to adversely affect our business, financial condition and results of operations .

Public health crises, such as the pandemic of coronavirus disease 2019 (“COVID-19”), may impact our operations or our customers’ operations in ways that adversely affect our business, results of operations and financial condition.

The COVID-19 pandemic has resulted in adverse impacts to our business.

Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services.

Potential contributing factors include:

● Mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings have impacted and may continue to impact the operations of our commercial, municipal, industrial and E&P collection customers, as well as affiliated and third-party haulers that bring waste to our landfills, transfer stations, E&P waste and recycling facilities, resulting in a decline in demand for our service offerings;

● Weakness in the economy resulting from business closures, unemployment and other direct and indirect impacts of the COVID-19 pandemic has caused and may continue to cause customers, including residential, commercial, industrial and E&P accounts, to suffer financial difficulties and ultimately to be unable or unwilling to pay amounts owed to us.

This could negatively impact our consolidated financial condition, results of operations and cash flows;

● To the extent that a significant percentage of our workforce is unable to work, including because of illness or government restrictions in connection with the COVID-19 pandemic, our workforce and operations will be negatively impacted;

● The additional costs associated with the COVID-19 pandemic, including those related to emergency wages, supplemental pay, personal protective equipment and extended benefits programs provided by the Company to employees affected by the COVID-19 pandemic, may impact our financial results;

● Volatility in commodity and other input costs could substantially impact our result of operations;

● It may become more costly or difficult to obtain debt or equity financing to fund operations or investment opportunities, or to refinance our debt in the future, in each case on terms and within a time period acceptable to us.

The ultimate extent of the impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend largely on future developments, including the duration and spread of the outbreak in the U.S.

and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, including the distribution and effectiveness of vaccines, and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and cannot be predicted at this time.

Our industry is highly competitive and includes companies with lower prices, return expectations or other advantages, and governmental service providers, which could adversely affect our ability to compete and our operating results .

Our industry is highly competitive and requires substantial labor and capital resources.

Some of the markets in which we compete or will seek to compete are served by one or more large, national companies, as well as by regional and local companies of varying sizes and resources, some of which we believe have accumulated substantial goodwill in their markets.

Some of our competitors may also have greater name recognition than we do, or be able to provide or be willing to bid their services at a lower price than we may be willing to offer.

Some of the markets in which we compete or will seek to compete are served by one or more large, national companies, as well as by regional and local companies of varying sizes and resources.

Some of our competitors may be able to provide or be willing to bid their services at lower prices than we may be willing to offer, which could impact our ability to win new business or retain existing business, including municipal contracts that come up for renewal.

We also compete with counties, provinces, municipalities and solid waste districts that maintain or could develop their own waste collection and disposal operations.

These operators may have financial advantages over us because of their access to user fees and similar charges, tax revenues and tax-exempt financing.

If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time, our revenues could decline.

In addition, existing and future competitors may develop or offer services or new technologies, new facilities or other advantages.

Our inability to compete effectively could hinder our growth or negatively impact our operating results.

In our solid waste business, we also compete with counties, municipalities and solid waste districts that maintain or could in the future choose to maintain their own waste collection and disposal operations, including through the implementation of flow control ordinances or similar legislation.

These operators may have financial advantages over us because of their access to user fees and similar charges, tax revenues and tax-exempt financing.

In our E&P waste business, we compete for disposal volumes with existing facilities owned by third parties (including those owned by municipalities or quasi-governmental entities), and we face potential competition from new facilities that are currently under development.

Increased competition in certain markets may result in lower pricing and decreased volumes at our facilities.

In addition, customers in certain markets may decide to use internal disposal methods for the treatment and disposal of their waste.

Competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions .

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We expect that increased consolidation in the solid waste services industry will continue to reduce the number of attractive acquisition candidates.

Moreover, general economic conditions and the environment for attractive investments may affect the desire of the owners of acquisition candidates to sell their companies.

Moreover, general economic conditions, including public health crises such as the COVID-19 pandemic, and the environment for attractive investments may affect the desire of the owners of acquisition candidates to sell their companies.

As a result, we may have fewer acquisition opportunities, and those opportunities may be on less attractive terms than in the past, which could cause a reduction in our rate of growth from acquisitions.

In addition, the COVID-19 pandemic may lengthen the time required to negotiate and complete acquisitions due to logistical constraints associated with business closures or travel restrictions.

Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to do so.

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In addition, disruptions in the capital and credit markets could adversely affect our ability to draw on our credit facility or raise other capital.

access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments.

Our access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility 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.

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We seek price increases necessary to offset increased costs, to improve operating margins and to obtain adequate returns on our deployed capital.

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

Contractual, general economic, competitive or market-specific conditions, including the impact of public health crises such as the COVID-19 pandemic, may limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.

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

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Many franchise agreements and municipal contracts are for a specified term and are, or will be, subject to competitive bidding in the future.

For example, we have approximately 480 contracts, representing approximately 3.9% of our annual revenues, which are set for expiration or automatic renewal on or before December 31, 2020.

For example, we have approximately 486 contracts, representing approximately 4.4% of our annual revenues, which were set for expiration or automatic renewal on or before December 31, 2021.

Although we intend to bid on existing contracts subject to competitive bidding in the future and additional municipal contracts and franchise agreements, we may not be the successful bidder, or we may need to lower our price in order to retain the contract.

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As a result, our customers in annexed areas may be required to obtain services from competitors that have been previously franchised by the annexing municipalities to provide those services.

For example, municipalities in the State of Washington may, by law, annex any unincorporated territory, which could remove such territory from an area covered by a G Certificate issued to us by the Washington Utilities and Transportation Commission, or WUTC.

Such occurrences could subject more of our Washington operations to competitive bidding.

Moreover, legislative action could amend or repeal the laws governing WUTC regulation, which could eliminate or diminish service exclusivity, subjecting more areas to competitive bidding and/or overlapping service.

In addition, municipalities in which we provide services on a competitive basis may elect to franchise those services to other service providers.

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Municipalities could also promulgate “flow control” laws and regulations requiring us to deliver waste we

collect within a particular jurisdiction to facilities not owned or controlled by us, which could increase our costs and reduce our revenues.

Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones .

We currently own and/or operate 91 landfills and one development stage landfill throughout the United States and Canada.

Our ability to meet our financial and operating objectives may depend in part on our ability to acquire, lease, or renew landfill operating permits, expand existing landfills and develop new landfill sites, especially in our E&P waste business.

It has become increasingly difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management facilities, including landfills and transfer stations.

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These operating permits often must be renewed several times during the permitted life of a landfill.

The permit and approval process is often time consuming, requires numerous hearings and compliance with zoning, environmental and other requirements, is frequently challenged by special interest and other groups, including those utilizing social media to further their objectives, and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration than we believed was otherwise

required by law, or burdensome terms and conditions being imposed on our operations.

For example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A.

Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 12, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

This process may be further complicated by the COVID-19 pandemic, which may impact the timeliness of the receipt of approvals and permits.

We may not be able to obtain new landfill sites or expand the permitted capacity of our existing landfills when necessary, and may ultimately be required to expense up to the carrying value of the landfill or expansion project, less the recoverable value of the property and other amounts recovered.

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Any of these circumstances could adversely affect our operating results.

Lower crude oil prices may adversely affect the level of exploration, development and production activity of E&P companies and the demand for our E&P waste services .

Lower crude oil prices and the volatility of such prices may affect the level of investment and the amount of linear feet drilled in the basins where we operate, as it may impact the ability of E&P companies to access capital on economically advantageous terms or at all.

In addition, E&P companies may elect to decrease investment in basins where the returns on investment are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices.

Such reductions in capital spending would negatively impact E&P waste generation and therefore the demand for our services.

Further, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.

Increases in labor costs and limitations on labor availability could impact our financial results .

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In our E&P waste business, for example, we are exposed to the cyclical variations in demand that are particular to the development and production of oil and natural gas.

A shortage of qualified employees in solid waste or E&P would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.

A shortage of qualified employees in solid waste or E&P, including due to the COVID-19 pandemic in our markets, would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.

In addition, higher turnover can result in increased costs associated with recruiting and training;

it can also impact operating costs, including maintenance and risk.

As an essential services provider, in March 2020 we implemented temporary emergency wages, supplemental pay and extended benefits programs for our frontline workforce and other employees directly or indirectly affected by the COVID-19 pandemic, which were partially offset by cost reductions in other areas.

Increases in capital expenditures could impact our financial results .

Increases in fleet, equipment and landfill construction costs due to the imposition of tariffs on steel and other items, as well as other cost pressures, could result in capital expenditures being higher than anticipated.

In addition, acquisitions and new contracts may increase capital expenditures.

Increases in fleet, equipment and landfill construction costs due to cost pressures, acquisitions and new contracts could result in capital expenditures being higher than anticipated.

This could impact our ability to generate free cash flow in line with our expectations.

A portion of our growth and future financial performance depends on our ability to integrate acquired businesses, and the success of our acquisitions .

Lower crude oil prices have and may continue to adversely affect the level of exploration, development and production activity of E&P companies and the demand for our E&P waste services .

Lower crude oil prices and the volatility of those prices may affect the level of investment and the amount of linear feet drilled in the basins where we operate, as it may impact the ability of E&P companies to access capital on economically advantageous terms or at all.

In addition, E&P companies may elect to decrease investment in basins where the returns on investment are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices.

Recent declines in the price of crude oil to historic lows have resulted in announced reductions to capital spending plans by E&P companies.

Such reductions in capital spending would be expected to negatively impact E&P waste generation and therefore the demand for our services.

Energy transition, or a transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources, could also affect investments by E&P companies in the basins where we operate.

Given the unexpected oversupply of oil and the decreased demand for oil associated with the economic slowdown caused by the COVID-19 pandemic, we cannot estimate when crude oil prices will increase.

Further, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.

A portion of our growth and future financial performance depends on our ability to integrate acquired businesses, and the performance of our acquisitions .

A component of our growth strategy involves achieving economies of scale and operating efficiencies by growing through acquisitions.

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Our inability to complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our share price to decline.

Even if we are able to make acquisitions on advantageous terms and are able to integrate them successfully into our operations and organization, some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.

In addition, we may change our strategy with respect to a market or acquired businesses and decide to sell such operations at a loss, or

keep those operations and recognize an impairment of goodwill and/or intangible assets.

In addition, we may change our strategy with respect to a market or acquired businesses and decide to sell such operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets.

Similar risks may affect contracts that we are awarded to operate municipally-owned assets, such as landfills.

Some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.

In addition, acquisitions may have liabilities or risks that we fail or are unable to discover, or that become more adverse to our business than we anticipated at the time of acquisition.

As a successor owner, we may be legally responsible for those liabilities that arise from businesses that we acquire, whether we expressly assume them or not, including as a result of sellers not having sufficient funds to perform their obligations or liabilities being imposed on us under various regulatory schemes and other applicable laws.

In addition, our insurance program may not cover such sites and will not cover liabilities associated with some environmental issues that may have existed prior to attachment of coverage.

For example, see the discussions regarding the Lower Duwamish Waterway Superfund Site Allocation Process in Note 12, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

A successful uninsured claim against us could harm our financial condition or operating results.

Additionally, there may be other risks of which we are unaware that could have an adverse effect on businesses that we acquire or have acquired, such as foreign, state, provincial and local regulation and administrative risks.

Another example of risk is interested parties that may bring actions against us in connection with operations that we acquire or have acquired.

Furthermore, risks or liabilities we judge to be not material or remote at the time of acquisition may develop into more serious risks to our business.

Any adverse outcome resulting from such risks or liabilities could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.

The seasonal nature of our business and “event-driven” waste projects cause our results to fluctuate .

Based on historic trends, we 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.

Based on historic trends, excluding any impact from the COVID-19 pandemic or an economic recession, we would expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters, and lower in the fourth quarter than in the second and third quarters.

We expect the fluctuation in our revenues between our highest and lowest quarters to be approximately 10%.

This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during the winter months in Canada and the U.S., and reduced E&P activity during harsh weather conditions.

This seasonality reflects the lower volume of

solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during the winter months in Canada and the U.S., and reduced E&P activity during harsh weather conditions.

Conversely, mild winter weather conditions may reduce demand for oil and natural gas, which may cause our customers to curtail their drilling programs, which could result in production of lower volumes of E&P waste.

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We provide recycling services to some of our customers.

The majority of the recyclables we process for sale are paper products that are shipped to customers in the United States, as well as other markets, including Asia.

The sale prices of and the demand for recyclable commodities, particularly paper products, are frequently volatile and when they decline, our revenues, operating results and cash flows will be affected.

In 2017, the Chinese government announced a ban on certain materials, including mixed waste paper and mixed plastics, effective January 1, 2018, as well as extremely restrictive quality requirements effective March 1, 2018 that have been difficult for the industry to achieve.

Also in 2017, the Chinese government began to limit the flow of material into the country by restricting the issuance of required import licenses, and this practice continued through 2018 and 2019.

Many other markets, both domestic and foreign, have also tightened their quality requirements.

In addition, other countries have limited or restricted the import of certain recyclables.

Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, which results in increased processing and residual disposal costs to achieve quality standards.

The new quality standards imposed by China and the restrictions on import licenses have made the sale of recycled commodities more difficult and have resulted in lower prices for such commodities, higher operating costs or additional capital expenditures in order to meet the requirements, or higher fees imposed by third parties for the processing of recyclables.

The recyclables we process for sale include paper products and plastics that are shipped to customers in the United States, as well as other markets, including Asia.

The sale prices of and the demand for recyclable commodities are frequently volatile and when they decline, our revenues, operating results and cash flows will be affected.

The value of plastics are influenced by the volatility of crude oil prices, and there has been a resulting decline in the value of plastic recyclables associated with the precipitous drop in the value of crude in 2020.

The value of paper products are impacted by demand, which is often influenced by quality concerns, which have resulted in the imposition of restrictions by other countries, including China, on the import of certain recyclables.

Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, particularly in residential collection, which results in increased processing and residual disposal costs to achieve quality standards.

As a result, we have increased the fees that we charge customers at our recycling facilities in order to recover the higher processing costs for recyclables.

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Therefore, if we recognize increased revenues resulting from higher prices for recyclable commodities, the rebates we pay to suppliers will also increase, which also may impact our operating results.

To the extent that there is an economic slowdown, including the one associated with the COVID-19 pandemic, a resulting decline in demand for recycled commodities could impact our revenues, operating results and cash flow.

Our results will be affected by changes in the value of renewable fuels .

Variations in the price of methane gas and other energy-related products that are marketed and sold by our landfill gas recovery operations affect our results.

Pursuant to the Energy Independence and Security Act of 2007, the United States EPA has promulgated the Renewable Fuel Standards, or RFS, which require refiners to either blend "renewable

Pursuant to the Energy Independence and Security Act of 2007, the United States EPA has promulgated the Renewable Fuel Standards, or RFS, which require refiners to either blend "renewable fuels,"

such as ethanol and biodiesel, into their transportation fuels or to purchase renewable fuel credits, known as renewable identification numbers, or RINs, in lieu of blending.

In some cases, landfill gas generated at our landfills qualifies as a renewable fuel for which RINs are available.

In some cases, landfill gas generated at our landfills in the United States and Canada qualifies as a renewable fuel for which RINs are available.

The price of RINs has been extremely volatile and is dependent upon a variety of factors, including potential legislative changes, the availability of RINs for purchase, the demand for RINs, which is dependent on transportation fuel production levels, the mix of the petroleum business’ petroleum products and fuel blending performed at the refineries and downstream terminals, all of which can vary significantly from period to period.

In addition, demand for RINs can be impacted by the ability of refineries to obtain small refinery exemptions, or SREs, through the EPA.

In December 2019, the EPA released its targets for renewable volume obligations, or RVOs, for 2020, which included a slight increase over the 2019 RVOs with no change to the EPA’s plan to account for the impact of granting SREs.

Any reductions or limitations on the requirement to blend renewable fuel would likely reduce the demand for RINs, which could impact the value of RINs.

In Canada, the Renewable Fuels Regulations under the Canadian Environmental Protection Act, 1999 require producers and importers of gasoline, diesel fuel and heating distillate to acquire a certain number of renewable fuel compliance units, or Compliance Units, in connection with the volumes of fuel they produce or import.

Compliance Units can be generated in a number of ways, including through the blending of renewable fuel into liquid petroleum fuels.

Certain provincial jurisdictions in Canada also impose obligations to incorporate renewable fuels into fuels that are distributed within the jurisdiction.

In some cases, landfill gas generated at our landfills in Canada is sold by our Company as a renewable fuel for which RINs are available under the United States RFS.

Our Company could also sell landfill gas generated in Canada in connection with renewable fuel obligations in Canada.

The price for our renewable fuel is dependent on a variety of factors, including demand.

The Canadian federal government released details on a proposed new clean fuel regulatory framework at the end of 2017 called the “Clean Fuel Standard.” The proposed framework would impose lifecycle carbon intensity requirements on certain liquid, gaseous and solid fuels that are used in transportation, industry and buildings, and establish rules relating to the trading of compliance credits.

The carbon intensity requirements would become more stringent over time.

Carbon intensity would be differentiated between different types of renewable fuels to reflect the associated emissions reduction potential.

Regulated parties, which may include fuel producers and importers, would have some flexibility with respect to how to achieve lower carbon fuels in Canada.

The Canadian federal government has indicated that over time, the new Clean Fuel Standard would replace the current Renewable Fuels Regulations.

Since January 2017, the Canadian federal government has been conducting public consultation on the proposed framework.

The Canadian Government is reporting that new regulations under the Clean Fuel Standard are targeted to come into force on January 1, 2022 (for liquid fuels) and January 1, 2023 (for gaseous and solid fuel regulations).

At this time, we do not know how a new clean fuel regulatory framework in Canada could impact demand for our renewable fuel.

Any reductions or limitations on the requirement to blend renewable fuel, including a reduction associated with the economic slowdown associated with the COVID-19 pandemic, and any related waivers including SREs, would likely reduce the demand for RINs, which could impact the value of RINs.

At this time, we do not know how the new Clean Fuel Regulations in Canada, as discussed above, will impact the demand for our renewable fuel in the future.

A significant reduction in the value of RINs in the United States or the price paid for our renewable fuel in Canada could adversely impact our reported results.

Increases in the price of diesel or compressed natural gas fuel may adversely affect our collection business and reduce our operating margins .

The market price of diesel fuel is volatile.

We generally purchase diesel fuel at market prices, and such prices have fluctuated significantly in recent years.

A significant increase in market prices for fuel could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.

To manage a portion of this risk, we have entered into fixed-price fuel purchase contracts.

During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices.

We utilize compressed natural gas, or CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time.

The market price of CNG is also volatile;

a significant increase in such cost could adversely affect our operating margins and reported earnings.

Increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings .

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Furthermore, while we maintain liability insurance, our insurance is subject to coverage limitations.

If we were to incur substantial liability, our insurance coverage may be inadequate to cover the entirety of such liability.

If we were to incur substantial liability on a covered claim, our insurance coverage may be inadequate to cover the entirety of such liability.

This could have a material adverse effect on our financial position, results of operations and cash flows.

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A punitive damage award could have an adverse effect on our reported earnings in the period in which it occurs.

Significant increases in premiums on insurance that we retain also could reduce our margins.

Our financial results are based upon estimates and assumptions that may differ from actual results .

In preparing our consolidated financial statements in accordance with U.S.

generally accepted accounting principles, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.

These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies.

In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment.

The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty are related to our accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, asset impairments and litigation, claims and assessments.

Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition and results of operations.

Significant increases in premiums on insurance that we retain, as well as higher deductibles or self-insured retentions, could reduce our margins.

Increases in the price of diesel or compressed natural gas fuel may adversely affect our collection business and reduce our operating margins .

The market price of diesel fuel is volatile.

We generally purchase diesel fuel at market prices, and such prices have fluctuated significantly in recent years.

To manage a portion of this risk, we have entered into fixed-price fuel purchase contracts.

During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices as the prices under our fixed-price fuel purchase contracts may be above market prices.

We utilize compressed natural gas, or CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time.

The market price of CNG is also volatile;

a significant increase in such cost could adversely affect our operating margins and reported earnings.

Our accruals for our landfill site closure and post-closure costs may be inadequate .

We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate.

We are also required to pay capping, closure and post-closure maintenance costs for operated landfills for which we have life-of-site agreements.

We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate as well as for landfills we operated under life-of-site agreements.

Our obligations to pay closure or post-closure costs may exceed the amount we have accrued and reserved and other amounts available from funds or reserves established to pay such costs.

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After completion or closure of a landfill site, there exists the potential for unforeseen environmental problems to occur that could result in substantial remediation costs or potential litigation.

Paying additional amounts for closure or post-closure costs and/or for environmental remediation and/or for litigation could harm our financial condition or operating results.

The potential increased regulation of per- and polyfluoroalkyl substances (“PFAS”) and other emerging contaminants could result in greater expenditures for post-closure costs.

It is also possible that accruals may need to be expanded and that costs incurred related to these activities could be accelerated.

Paying additional amounts for closure or post-closure costs and/or for environmental remediation and/or for litigation could harm our financial condition, operating results, or cash flow.

We may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity .

Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations or as a result of third-party challenges, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored.

Individuals, citizens groups, trade associations or environmental activists may also

bring actions against us in connection with our operations that could interrupt or limit the scope of our business.

Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our operations that could interrupt or limit the scope of our business.

Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.

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For example, in recent years, wage and employment laws have changed regularly and become increasingly complex, which has fostered litigation, including purported class actions.

Similarly, citizen suits brought pursuant to environmental laws, such as those regulating the treatment of storm water runoff, have proliferated.

Similarly, purported class actions based on public or private nuisance and negligence claims related to alleged landfill odor concerns have proliferated, as have citizen suits brought pursuant to environmental laws, such as those regulating the treatment of storm water runoff.

The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain.

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As a result of our acquisition strategy, we have a material amount of goodwill, indefinite-lived intangibles and property and equipment recorded in our financial statements.

We do not amortize our existing goodwill or indefinite-lived intangibles and are required to test goodwill and indefinite-lived intangibles for impairment annually in the fourth quarter of the year and whenever events or changes in circumstances indicate that the carrying value of goodwill and/or indefinite-lived intangible assets may not be recoverable using the one-step process prescribed in the new accounting guidance that we early adopted on January 1, 2017.

The process screens for and measures the amount of the impairment, if any.

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Application of the impairment test requires judgment.

A significant deterioration in a key estimate or assumption or a less significant deterioration to a combination of assumptions could result in an impairment charge in the future, which could have a significant adverse impact on our reported results.

See the section Goodwill and Indefinite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Income taxes may be uncertain .

Our actual effective tax rate may vary from our expectation and that variance may be material.

Tax interpretations, regulations and legislation in the various jurisdictions in which we and our affiliates operate are subject to measurement uncertainty and the interpretations can impact net income, income tax expense or recovery, and deferred income tax assets or liabilities.

In addition, tax rules and regulations, including those relating to foreign jurisdictions, are subject to interpretation and require judgment by us that may be challenged by the taxation authorities upon audit.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act.

The Tax Act makes broad and complex changes to the U.S.

tax code, including, but not limited to, a reduction of the U.S.

federal corporate income tax rate from 35 percent to 21 percent, requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, the creation of the base erosion anti-abuse tax, a new provision designed to tax global intangible low-taxed income, a new limitation on deductible interest expense, and bonus depreciation that will allow for full expensing of qualified property.

Changes in our tax provision or an increase to our tax liabilities, whether due to the Tax Act or interpretations of the Tax Act, which include, but are not limited to, the potential finalization of proposed regulations released by the U.S.

Department of Treasury during 2018 under Internal Revenue Code (“I.R.C.”) section 163(j) related to the deductibility of certain interest, I.R.C.

section 267A related to the deductibility of certain related-party payments, as well as other tax

regulations, or a final determination of tax audits, could have a material adverse effect on our financial position, results of operations, and cash flows.

A significant deterioration in a key estimate or assumption or a less significant deterioration to a combination of assumptions could result in an additional impairment charge in the future, which could have a significant adverse impact on our reported results.

See the section Goodwill and Indefinite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charge recorded during the year ended December 31, 2020 on property and equipment in our E&P operations due to recent declines in the value of crude oil.

Future changes to U.S., Canadian and foreign tax laws could materially adversely affect us .

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where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or MLI, as part of the OECD/G20 initiative to counter what was perceived as base erosion and profit shifting.

The MLI entered into force in Canada on December 1, 2019 and will enter into effect with respect to certain of Canada’s tax treaties on January 1, 2020 for withholding taxes and for other taxes (including capital gains taxes) for tax years beginning on or after June 1, 2020.

In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as base erosion and profit shifting.

The MLI entered into force in Canada on December 1, 2019 and entered into effect with respect to certain of Canada’s tax treaties on January 1, 2020 for withholding taxes and will enter into effect with respect to certain other taxes (including capital gains taxes) for tax years beginning on or after June 1, 2020 (which, for us and our affiliates, in general, was January 1, 2021).

The MLI may enter into effect at a later date for certain of Canada’s tax treaties with countries that have not yet completed their domestic procedures to cause the MLI to come into effect.

As a result of these and other changes, the tax laws in the United States, Canada, and other countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us and our affiliates.

Each business that we acquire or have acquired may have liabilities or risks that we fail or are unable to discover, or that become more adverse to our business than we anticipated at the time of acquisition .

It is possible that the corporate entities or sites we have acquired, or which we may acquire in the future, have liabilities or risks in respect of former or existing operations or properties, or otherwise, which we have not been able to identify and assess through our due diligence investigations.

As a successor owner, we may be legally responsible for those liabilities that arise from businesses that we acquire.

Even if we obtain legally enforceable representations, warranties and indemnities from the sellers of such businesses, they may not cover the liabilities fully or the sellers may not have sufficient funds to perform their obligations.

Some environmental liabilities, even if we do not expressly assume them, may be imposed on us under various regulatory schemes and other applicable laws.

In addition, our insurance program may not cover such sites and will not cover liabilities associated with some environmental issues that may have existed prior to attachment of coverage.

A successful uninsured claim against us could harm our financial condition or operating results.

Additionally, there may be other risks of which we are unaware that could have an adverse effect on businesses that we acquire or have acquired, such as foreign, state and local regulation and administrative risks.

Another example of risk is interested parties that may bring actions against us in connection with operations that we acquire or have acquired.

Furthermore, risks or liabilities we judge to be not material or remote at the time of acquisition may develop into more serious risks to our business.

The MLI does not impact the tax treaty between Canada and the U.S.

Our indebtedness could adversely affect our financial condition and limit our financial flexibility .

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● increase our vulnerability to general adverse economic and industry conditions;

● expose us to interest rate risk since a significant portion of our indebtedness is at variable rates;

● expose us to interest rate risk to the extent that a portion of our indebtedness is at variable rates;

● limit our ability to obtain additional financing or refinancing at attractive rates;

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● place us at a competitive disadvantage relative to our competitors with less debt.

In addition, a portion of our indebtedness, including interest rate swaps, is at variable rates which are based on the London Interbank Offered Rate, or LIBOR, which is expected to no longer be published by 2021.

The FASB added the Secured Overnight Financing Rate, or SOFR, as an eligible benchmark interest rate in order to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.

We are developing a plan to transition our indebtedness from LIBOR to SOFR.

Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control.

Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control, including the impacts from the COVID-19 pandemic.

If we fail to comply with the covenants under any of our indebtedness, we may be in default under the indebtedness, which may entitle the lenders or holders of indebtedness to accelerate the debt obligations.

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If we are unable to obtain performance or surety bonds, letters of credit or insurance, we may not be able to enter into additional solid waste or other collection contracts or retain necessary landfill operating permits.

Collection contracts, municipal contracts, transfer station operations and landfill closure and post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with federal, state, provincial or local environmental laws or regulations.

Collection contracts,

municipal contracts, transfer station operations and landfill closure and post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with federal, state, provincial or local environmental laws or regulations.

We typically satisfy these requirements by posting bonds or letters of credit.

As of December 31, 2019, we had approximately $1.081 billion of such surety bonds in place and approximately $107.6 million of letters of credit issued.

As of December 31, 2020, we had $1.210 billion of such surety bonds in place and $126.3 million of letters of credit issued.

Closure bonds are difficult and costly to obtain.

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dollars using exchange rates for the current period.

Fluctuations in the exchange rates that are unfavorable to us would have an adverse effect on our financial performance and reported results of operations.

Fluctuations in the exchange rates that are unfavorable to us, including those resulting from the impact of the COVID-19 pandemic, would have an adverse effect on our financial performance and reported results of operations.

Alternatives to landfill disposal may cause our revenues and operating results to decline .

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Some state, provincial and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of wastes, such as yard waste, food waste and electronics, at landfills.

Even where not prohibited by state, provincial or local law, some grocery stores and restaurants have chosen to divert their organic waste from landfills, while other companies have set zero-waste goals and communicated an intention to cease the disposal of

any waste in landfills.

Although such actions are useful to protect our environment, these actions, as well as the actions of our customers to reduce waste or seek disposal alternatives, have reduced and may in the future further reduce the volume of waste going to landfills in certain areas, which may affect our ability to operate our landfills at full capacity and could adversely affect our operating results.

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In addition, cybersecurity attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data.

We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information

technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.

We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.

Further, as we pursue our acquisition growth strategy and pursue new initiatives that improve our operations and reduce our costs, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.

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Existing environmental laws and regulations have become more stringently enforced in recent years.

Further, with a new federal administration taking office in 2021 in the United States, it is possible that policies and initiatives of the prior administration could be reconsidered or even reversed, which could adversely affect our operating results.

For example, a

policy shift away from curtailment of regulation, narrowing Clean Water Act jurisdiction, or enabling oil and gas development on federal lands could adversely affect our business and our customers’ business.

In addition, our industry is subject to regular enactment of new or amended federal, state, provincial and local environmental and health and safety statutes, regulations and ballot initiatives, as well as judicial decisions interpreting these requirements, which have become more stringent over time.

Citizen suits brought pursuant to environmental laws have proliferated, along with the use of social media to drive such efforts.

Citizen suits brought pursuant to environmental laws as well as purported class actions based on public or private nuisance and negligence claims related to alleged landfill odor concerns have proliferated, along with the use of social media to drive such efforts.

In addition, various state, provincial and local governments and the Canadian federal government have enacted, have the authority to enact or are considering enacting laws and regulations that restrict disposal within their jurisdictions of solid waste generated outside their jurisdictions.

We expect these trends to continue, which could lead to material increases in our costs for future environmental, health and safety compliance.

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The carbon levy applies to prescribed liquid, gaseous, and solid fuels at a rate that is equivalent to $30 per tonne of CO2e in 2020, increasing annually, until it reaches $50 per tonne of CO2e by 2022.

On November 19, 2020, the federal government introduced Bill C-12, the Canadian Net-Zero Emissions Accountability Act, which establishes the framework for national GHG emissions reduction targets to attain net-zero emissions by 2050.

Several Canadian provinces have promulgated legislation and regulations to limit GHG emissions through requirements of specific controls, carbon levies, cap and trade programs or other measures.

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These statutes and regulations increase the costs of our operations, and future climate change statutes and regulations may have an impact as well.

Further, governmental authorities have considered or have begun to implement increased regulation of PFAS and potentially other emerging contaminants, which could adversely affect our operations.

The regulation of these substances could increase or accelerate our financial obligations associated with post-closure maintenance and other environmental remediation related to our solid waste facilities.

Further, enhanced treatment of landfill leachate and landfill gas could adversely affect our operations in various ways, including without limitation, increased operational expenses as well as treatment and disposal costs, greater capital expenditures to meet control requirements, costs of compliance with health and safety requirements, and litigation risk.

Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .

Providing environmental and waste management services, including constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.

We are also an essential services provider, and our frontline employees have continued to provide services during the COVID-19 pandemic amid related mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings, which could involve additional risks.

Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials or odors that could be triggered by weather or natural disasters.

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Any of these risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction.

While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in excess of any applicable insurance coverage, our business, results of operations and financial condition could be adversely affected.

While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs and the use of personal protective equipment, if we were to incur substantial liabilities in excess of any applicable insurance coverage, our business, results of operations and financial condition could be adversely affected.

Any such incidents could also tarnish our reputation and reduce the value of our brand.

Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.

Future changes in laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results.

Various state, provincial and local governments and the Canadian federal government have enacted, have the authority to enact or are considering enacting laws and regulations that restrict disposal within the jurisdiction of solid waste generated outside the jurisdiction.

In addition, some state, provincial and local governments and the Canadian federal government have promulgated, have the authority to promulgate or are considering promulgating laws and regulations which govern the flow of waste generated within their respective jurisdictions.

These “flow control” laws and regulations typically require that waste generated within the jurisdiction be retained within the jurisdiction or be directed to specified facilities for disposal or processing, which could limit or prohibit the disposal or processing of waste in our transfer stations and landfills or require notices be delivered or permits to be obtained prior to transport or final disposal.

Certain of these flow control laws and regulations could also require us to deliver waste we collect within a particular jurisdiction to facilities not owned or controlled by us, which could increase our costs and reduce our revenues.

In addition, such laws and regulations could require us to obtain additional costly licenses or authorizations in order to be deemed an authorized hauler or disposal facility.

All such waste disposal laws and regulations are subject to judicial interpretation and review.

Court decisions, legislation and federal, state, provincial and local regulation in the waste disposal area could adversely affect our operations.

Extensive regulations that govern the design, operation, expansion and closure of landfills may restrict our landfill operations or increase our costs of operating landfills .

If we fail to comply with federal, state and provincial regulations, as applicable, governing the design, operation, expansion, closure and financial assurance of MSW, non-MSW and E&P waste landfills, we could be required to undertake investigatory or remedial activities, curtail operations or close such landfills temporarily or permanently.

Future changes to these regulations may require us to modify, supplement or replace equipment or facilities at substantial costs.

Future changes to these regulations, including an increased regulation of PFAS, may require us to modify, supplement or replace equipment or facilities at substantial costs.

If regulatory agencies fail to enforce these regulations vigorously or consistently, our competitors whose facilities are not forced to comply with the regulations may obtain an advantage over us.

Our financial obligations arising from any failure to comply with these regulations could harm our business and operating results.

Our E&P waste business could be adversely affected by changes in laws regulating E&P waste.

We believe that the demand for our E&P waste services is directly related to the regulation of E&P waste.

In particular, the U.S.

Resource Conservation and Recovery Act, or RCRA, which governs the disposal of solid and

hazardous waste, currently exempts certain E&P wastes from classification as hazardous wastes.

In recent years, proposals have been made to rescind this exemption from RCRA.

If the exemption covering E&P wastes is repealed or modified, or if the regulations interpreting the rules regarding the treatment or disposal of this type of waste were changed, our operations could face significantly more stringent regulations, permitting requirements, and other restrictions, which could have a material adverse effect on our business.

In addition, if new federal, state, provincial or local laws or regulations that significantly restrict hydraulic fracturing are adopted, such legal requirements could result in delays, eliminate certain drilling and injection activities and make it more difficult or costly for our customers to perform fracturing.

Any such regulations limiting or prohibiting hydraulic fracturing could reduce our customers’ oil and natural gas E&P activities and, therefore, adversely affect our business.

Such laws or regulations could also materially increase our costs of compliance and doing business by more strictly regulating how hydraulic fracturing wastes are handled or disposed.

Conversely, any loosening of existing federal, state, provincial or local laws or regulations regarding how such wastes are handled or disposed could adversely impact demand for our services.

Liabilities for environmental damage may adversely affect our financial condition, business and earnings .

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Some environmental laws and regulations may impose strict, joint and several liability in connection with releases of regulated substances into the environment.

New or increased regulation of substances, such as PFAS or other emerging contaminants, could also lead to increased or previously unauthorized remediation costs or litigation risk.

Therefore, in some situations we could be exposed to liability as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, third parties, including our predecessors.

If we were to incur liability for environmental damage, environmental clean-ups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial condition or operating results could be materially adversely affected.

If we were to incur liability for environmental damage, environmental clean-ups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial

condition or operating results could be materially adversely affected.

For example, see the discussion regarding the Lower Duwamish Waterway Superfund Site Allocation Process in Note 12, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

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Key members of our management have entered into employment agreements, but we may not be able to enforce these agreements.

The loss of the services of any member of our senior and regional management or the inability to hire and retain experienced management personnel could harm our operating results.

The loss of the services of any member of our senior and regional management, including as a result of the COVID-19 pandemic, or the inability to hire and retain experienced management personnel could harm our operating results.

Our decentralized decision-making structure could allow local managers to make decisions that may adversely affect our operating results .

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If we have inferior intellectual property to our competitors, our financial results may suffer.

General Risk Factors

Our results are vulnerable to economic conditions .

Our business and results of operations may be adversely affected by changes in national or global economic conditions, including the price of crude oil.

In an economic slowdown, we may experience the negative effects of the following, any of which could negatively impact our operating income and cash flows:

decreased waste generation, increased competitive pricing pressure, increased customer turnover, and reductions in customer service requirements.

In a recessionary environment, two of our business lines that could see a more immediate impact are construction and demolition debris and E&P waste disposal, as demand for new construction or energy exploration decreases.

Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic slowdown.

In addition, a weaker economy may result in declines in recycled commodity prices.

Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations.

Further, we cannot assure you that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.

Our financial results are based upon estimates and assumptions that may differ from actual results .

In preparing our consolidated financial statements in accordance with U.S.

generally accepted accounting principles, or GAAP, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.

In some cases, including those resulting from the COVID-19 pandemic and associated impacts, these estimates are particularly difficult to determine and we must exercise significant judgment.

Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition and results of operations.

Income taxes may be uncertain .

Our actual effective tax rate may vary from our expectation and that variance may be material.

Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a new federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.

UNRESOLVED STAFF COMMENTS

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What changed 10-K

Item 1A. Risk Factors