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Item 2. Management’s Discussion and Analysis

2021-04-29 compared with 2020-10-29 · 195 added, 374 removed, 256 unchanged (69% of the section changed)

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FORWARD-LOOKING STATEMENTS

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

the impact of the COVID-19 pandemic on our business, financial condition and results of operations;

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

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

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

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

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

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

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

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

the impact on our tax positions of changes in U.S.

tax law and future changes in tax laws in the jurisdictions in which we operate;

the effects of landfill special waste projects on volume results;

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

demand for recyclable commodities and recyclable commodity pricing;

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

our ability to obtain additional exclusive arrangements;

increasing alternatives to landfill disposal;

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

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

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

our expectations with respect to capital expenditures;

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

the impairment of our goodwill;

insurance costs;

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

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

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, special projects, demand for and pricing of recyclables, landfill alternatives and related capital expenditures;

● 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 at all or on favorable terms;

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

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

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

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

These statements can be ‎identified 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, those listed above and elsewhere in this report and in our other filings with the SEC, as well as in our filings during the year with the Canadian Securities Administrators.

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.

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 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

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

As of September 30, 2020, we served residential, commercial, industrial and E&P customers in 42 states in the U.S.

As of March 31, 2021, we served residential, commercial, industrial and E&P customers in 43 states in the U.S.

and six provinces in Canada:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon,

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

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming, and the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

The solid waste industry is local and highly competitive in nature, requiring substantial labor and capital resources.

The participants 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.

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.

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and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.

The E&P waste services industry is regional in nature and is also highly fragmented, with acquisition opportunities available in several active natural resource basins.

Competition for E&P waste comes primarily from smaller regional companies that utilize a variety of disposal methods and generally serve specific geographic markets, and other solid waste companies.

In addition, customers in many markets have the option of using internal disposal methods or outsourcing to another third-party disposal company.

The principal competitive factors in this business include:

gaining customer approval of treatment and disposal facilities;

location of facilities in relation to customer activity;

reliability of services;

track record of environmental compliance;

ability to accept multiple waste types at a single facility;

The demand for our E&P waste services depends on the continued demand for, and production of, oil and natural gas.

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Macroeconomic and geopolitical conditions, including a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, have resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for our E&P waste services.

Through June 30, 2020, we maintained a separate E&P segment which was combined with our Southern segment on July 1, 2020.

During the nine months ended September 30, 2020, our total E&P revenue declined 36%, compared to the prior year period, on rig count declines of 72% in certain basins.

The most impacted basins included the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which had relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico.

Additionally, across the industry there is uncertainty regarding future demand for oil and related services, as noted by several energy companies, many of whom are customers of our E&P operations.

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Such uncertainty regarding global demand has had a significant impact on the investment and operating plans of our E&P waste customers in the basins where we operate.

Based on these events and the outlook for future drilling activity and resulting demand for our E&P waste services not showing significant improvement, we concluded that the carrying value of property and equipment at four E&P landfills exceeded their estimated fair value, resulting in an impairment charge of $417.4 million being recorded during the nine months ended September 30, 2020.

See Note 5 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for a further discussion of this impairment charge.

THE IMPACT OF COVID-19 ON OUR RESULTS OF OPERATIONS

During the first quarter of 2020, COVID-19 emerged across North America.

The World Health Organization declared COVID-19 a global pandemic on March 11, 2020.

The COVID-19 pandemic has had adverse impacts on our business since March 2020, when we experienced decreasing revenues associated with declines primarily in commercial collection, transfer station and landfill volumes as a result of COVID-19 economic disruptions.

In addition, and to a lesser extent, solid waste roll off revenue was impacted in some markets, and year-over-year reductions in E&P revenue, resulting primarily from the drop in the value of crude oil, were driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic.

In late February we formed a task force to commence preparedness in the event the scope of the COVID-19 outbreak expanded.

Protecting the health, safety and welfare of our employees was and remains our first priority, which led to our introduction of various health and safety protocols in early March, including the distribution of safety and preparedness updates, revised policies on employee time off, leaves of absence and short-term disability, modifications to our operations to minimize community spread of COVID-19, and enhanced resources to enable remote working, communications and digital connectivity to help non-frontline employees work from home more efficiently.

In recognition of the Company’s status as an essential services provider, and to reduce employee concerns regarding income, healthcare and family obligations, we implemented a supplemental pay bonus for frontline employees representing 80% of our workforce, emergency wages for employees out of work due to COVID-19 and extended benefits coverage in markets where reductions in customer activity have impacted employee hours.

In addition, we expanded our Employee Relief Fund and initiated the Waste Connections Scholarship Program to help employee children achieve their vocational, technical and university education goals.

These actions increased our cost of operations nominally in the first quarter and further impacted the second and third quarters of 2020 as discussed below.

We also implemented a number of measures to reduce our operating costs and preserve cash, which included hiring limitations, wage freezes for all managers and region and corporate personnel, restrictions on travel, group meetings and other discretionary spending, and the suspension of the Company’s 401(k) match effective June 1, 2020.

In addition, we began and intend to continue deferring qualified U.S.

payroll and other tax payments as permitted by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which the U.S.

government enacted on March 27, 2020.

Through the third quarter of 2020, we deferred $29.4 million in payroll taxes in conjunction with the CARES Act of which 50% are due by December 31, 2021 and 50% are due by December 31, 2022.

To the extent available, we may utilize similar programs being offered by the federal and provincial governments in Canada.

With respect to our liquidity and capital resources, as of September 30, 2020, we had $859.1 million of cash and equivalents and $1.258 billion of remaining borrowing capacity under our Credit Agreement, which matures in March 2023.

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

Commercial collection activity slowed down in certain markets due to service reductions or suspensions by customers whose business activity was curtailed by such measures, with third party transfer and disposal volumes and roll off activity typically following similar patterns, and some of the declines in E&P waste activity may also be related to COVID-19.

The impacts to solid waste activity that we experienced during the second quarter varied by geography, the size and customer mix in each market, and the timing and extent of shutdown requirements and reopening policies across markets.

In some markets, the impacts abated during the second quarter, as reopenings resulted in increased service requirements by commercial customers and higher landfill volumes and roll off activity;

in other cases, where reopenings were delayed or more limited, the improvements were less pronounced.

Through the second quarter of 2020, about 53% of solid waste commercial customers and 42% of associated revenue in competitive markets we track that had suspended or reduced service due to COVID-19, had since reached out for either a resumption of service or an increase in frequency.

Volumes in all of our solid waste regions exceeded our initial expectations, resulting in solid waste revenue down 5.3% on a same store basis in the quarter, about 0.7 percentage points better than the expectations we provided in May.

Moreover, excluding the most impacted markets in the Northeast and Canada, where closures were widespread and volumes were most impacted, solid waste revenues were down only 1.3% year over year on a same store basis.

During the third quarter of 2020, our business continued to be impacted by COVID-19, albeit to a lesser extent than in the prior period in many markets.

Revenue in solid waste commercial collection and solid waste transfer and disposal continued to reflect the extent to which the slowdown in activity associated with shelter-in-place or other closure restrictions or requirements in effect since the first quarter of 2020 have persisted.

The impacts to solid waste activity from COVID-19 that we experienced during the third quarter reflected the pace of reopening activity and varied by geography, the size and customer mix in each market.

In some markets, impacts began to abate in the second quarter, when a portion of the lost volumes returned;

in other cases, the impacts of the pandemic abated more during the third quarter, when reopenings resulted in increased service requirements by commercial customers and higher landfill volumes and roll off activity.

In markets where reopenings continue to be delayed or where additional restrictions have been imposed, the improvements were less pronounced.

Through the third quarter, about 68% of solid waste commercial customers and 57% of associated revenue in competitive markets we track that had suspended or reduced service due to COVID-19, had since reached out for either a resumption of service or an increase in frequency, an increase from 53% and 42%, respectively, through the second quarter.

As a result, solid waste collection, transfer and disposal revenue was down 2.0% year over year on a same store basis in the third quarter, but was an improvement of 3.3 percentage points from second quarter 2020 revenue, which was down 5.3% year over year.

If the prices of crude oil and natural gas substantially decline, it could lead to declines in the level of production activity and demand for our E&P waste services, which could result in the recognition of impairment charges on our intangible assets and property and equipment associated with our E&P operations.

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

March 11, 2021 marked the one year anniversary of COVID-19 being declared a global pandemic by the World Health Organization.

The related economic disruptions largely associated with closures or restrictions put into effect following the onset of the COVID-19 pandemic resulted in declines in solid waste commercial collection, transfer station and landfill volumes, and roll off activity.

Throughout the remaining fiscal year 2020, solid waste revenue and reported volumes largely reflected the pace and shape of the closures and subsequent reopening activity, with the timing and magnitude of recovery varying by market.

Reported solid waste volumes in 2020 turned slightly negative in the first quarter, were most negative in the second quarter, and showed sequential improvement during the second half of the year, finishing the year

at negative 3.1% in the fourth quarter.

In the first quarter of 2021, the final period to include comparisons to pre-COVID-19 activity levels on a year over year basis, solid waste volumes were down 3.2%, reflecting the strong start to 2020 prior to the onset of the pandemic, compounded by the impact of an extra day in the quarter in 2020 due to leap year, as well as extreme winter weather in many markets during February 2021.

Solid waste volumes increased 2.6% in March 2021 compared to March 2020.

The COVID-19 pandemic also contributed to the decline in demand for and the value of crude oil, which impacted E&P drilling activity and resulted in lower E&P waste revenue, with the quarterly run rate decreasing from approximately $60 million in the first quarter of 2020 to approximately $25 million by the second half of 2020.

Since the onset of the COVID-19 pandemic, protecting the health, welfare and safety of our employees has been our top priority.

Recognizing the potential for financial hardship and other challenges, we looked to provide a safety net for our employees on issues of income and family health.

To that end, in 2020, we incurred over $35 million in incremental COVID-19-related costs, primarily supplemental pay for frontline employees.

As we continue to support our employees and their families, such costs are expected to continue in 2021, albeit to a lesser extent than in the prior year, as employee COVID-19 cases and related impacts are similarly abating.

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

and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

and Canada, the rate of vaccinations, the severity of COVID-19 variants, the actions to contain such coronavirus variants, and how quickly and to what extent normal economic and operating conditions can resume.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

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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.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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,

Three Months Ended March 31,

Cost of operations

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Net income attributable to Waste Connections

Total revenues decreased $22.8 million, or 1.6%, to $1.390 billion for the three months ended September 30, 2020, from $1.412 billion for the three months ended September 30, 2019.

Total revenues increased $21.0 million, or 0.5%, to $4.048 billion for the nine months ended September 30, 2020, from $4.027 billion for the nine months ended September 30, 2019.

During the three months ended September 30, 2020, incremental revenue from acquisitions closed during, or subsequent to, the three months ended September 30, 2019, increased revenues by approximately $47.2 million.

During the nine months ended September 30, 2020, incremental revenue from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, increased revenues by approximately $156.3 million.

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

During the three months ended September 30, 2020, the net increase in prices charged to our customers at our existing operations was $49.1 million, consisting of $53.8 million of core price increases, partially offset by a decrease in surcharges of $4.7 million.

During the nine months ended September 30, 2020, the net increase in prices charged to our customers at our existing operations was $168.0 million, consisting of $173.9 million of core price increases, partially offset by a decrease in surcharges of $5.9 million.

During the three and nine months ended September 30, 2020, volume decreases in our existing business decreased solid waste revenues by $74.6 million and $199.8 million, respectively, due primarily to the economic disruptions resulting from COVID-19 that began in March 2020 and have continued throughout the third quarter of 2020.

The decreases during the nine months ended September 30, 2020 resulting from COVID-19 were partially offset by increased landfill special waste volumes in certain markets and the impact of one additional business day resulting from leap year.

E&P revenues at facilities owned during the three and nine months ended September 30, 2020 and 2019 decreased $42.8 million and $75.2 million, respectively.

Decreases in the demand for crude oil as a result of economic disruptions from COVID-19 resulted in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services.

Drilling and production activity was also adversely impacted by

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

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

dollar currency exchange rate resulted in a decrease in revenues of $1.6 million and $9.6 million, respectively, for the three and nine months ended September 30, 2020.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7511 and 0.7573 in the three months ended September 30, 2020 and 2019, respectively.

Total revenues increased $43.5 million, or 3.2%, to $1.396 billion for the three months ended March 31, 2021, from $1.352 billion for the three months ended March 31, 2020.

Acquisitions closed subsequent to the three months ended March 31, 2020 increased revenues by $43.7 million for the three months ended March 31, 2021.

Operations that were divested subsequent to March 31, 2020 decreased revenues by $3.2 million for the three months ended March 31, 2021.

During the three months ended March 31, 2021, the net increase in prices charged to our customers at our existing operations was $52.2 million, consisting of $55.9 million of core price increases, partially offset by a decrease in surcharges of $3.7 million.

During the three months ended March 31, 2021, volume decreases in our existing business decreased solid waste revenues by $40.5 million, due primarily to one less business day in 2021 resulting from leap year occurring in the prior year period and the economic disruptions resulting from the COVID-19 pandemic that began in March 2020 and has continued through the first quarter of 2021.

With the exception of our Western segment, the majority of our markets experienced declines in commercial collection, roll off collection, transfer station and landfill volumes, with our Northeastern U.S.

and Canada markets the most severely impacted.

These declines were partially offset by shelter at home requirements generating additional residential collection volumes and our Western segment’s transfer station and landfill operations recognizing increased volumes from third party collection providers disposing of increased residential collection volumes at our disposal locations.

E&P revenues at facilities owned during the three months ended March 31, 2021 and 2020 decreased $34.7 million.

Decreases in the demand for crude oil as a result of economic disruptions from the COVID-19 pandemic resulted in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services.

An increase in the average Canadian dollar to U.S.

dollar currency exchange rate resulted in an increase in revenues of $10.3 million for the three months ended March 31, 2021.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7399 and 0.7524 in the nine months ended September 30, 2020 and 2019, respectively.

Revenues from sales of recyclable commodities at facilities owned during the three months ended September 30, 2020 and 2019 increased $2.4 million.

Revenues from sales of recyclable commodities at facilities owned during the nine months ended September 30, 2020 and 2019 decreased $2.5 million.

Prices for old corrugated cardboard and volumes from increased residential collection increased in the second and third quarters of 2020, contributing to the increase in revenues for the three months ended September 30, 2020.

Lower prices for old corrugated cardboard in the first quarter of 2020, decreased collected commercial recycling volumes caused by economic disruptions resulting from COVID-19 and decreased prices for plastic and aluminum contributed to the overall decrease in revenues for the nine months ended September 30, 2020.

Other revenues increased by $0.4 million during the three months ended September 30, 2020 and decreased by $4.5 million during the nine months ended September 30, 2020.

The decrease for the nine months ended September 30, 2020 was due primarily to a reduction in intermodal cargo volumes.

dollar exchange rates on our Canadian revenues were 0.7898 and 0.7447 in the three months ended March 31, 2021 and 2020, respectively.

Revenues from sales of recyclable commodities at facilities owned during the three months ended March 31, 2021 and 2020 increased $11.3 million due primarily to higher prices for old corrugated cardboard and other paper products and higher volumes collected from residential recycling customers, partially offset by decreased collected commercial recycling volumes caused by economic disruptions resulting from the COVID-19 pandemic.

Other revenues increased by $4.4 million during the three months ended March 31, 2021, due primarily to a $6.0 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas at our Canada segment and a $0.5 million increase in other non-core revenue sources, partially offset by a $2.1 million decrease in intermodal revenues due primarily to customer losses resulting in a reduction in intermodal cargo volumes.

Cost of Operations .

Total cost of operations decreased $6.3 million, or 0.8%, to $828.8 million for the three months ended September 30, 2020, from $835.1 million for the three months ended September 30, 2019.

The decrease was primarily the result of a decrease in operating costs at our existing operations of $31.7 million, assuming foreign currency parity, a decrease in operating costs of $3.5 million at operations divested during, or subsequent to, the three months ended September 30, 2019 and a decrease of $0.9 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by $29.8 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended September 30, 2019.

The decrease in operating costs at our existing operations for the three months ended September 30, 2020 of $31.7 million, assuming foreign currency parity, included the following decreases totaling $27.6 million due to solid waste, intermodal and E&P volume losses resulting from the impact of COVID-19:

a decrease in third-party disposal expenses of $6.7 million, a decrease in third-party trucking and transportation expenses of $6.0 million, a decrease in direct labor expenses at our E&P operations of $3.0 million due to headcount reductions, a decrease in equipment and facility maintenance and repair expenses of $2.8 million at our E&P operations, a decrease in direct labor expenses at our Eastern segment of $2.6 million due to headcount reductions, a decrease in expenses for processing recyclable commodities of $2.4 million due to a decrease in commercial recycling volumes collected, a decrease in intermodal rail expenses of $2.1 million and a decrease in subcontracted E&P operating expenses of $2.0 million.

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

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

Total cost of operations increased $45.4 million, or 1.9%, to $2.430 billion for the nine months ended September 30, 2020, from $2.385 billion for the nine months ended September 30, 2019.

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

The decrease in operating costs at our existing operations for the nine months ended September 30, 2020 of $35.0 million, assuming foreign currency parity, included the following decreases totaling $57.0 million due to solid waste, intermodal and E&P volume losses resulting from the impact of COVID-19:

a decrease in third-party disposal expenses of $18.3 million, a decrease in third-party trucking and transportation expenses of $15.0 million, a decrease in direct labor expenses at our Eastern segment of $4.5 million due to headcount reductions, a decrease in equipment and facility maintenance and repair expenses of $4.2 million at our E&P operations, a decrease in intermodal rail expenses of $4.1 million, a decrease in subcontracted E&P operating expenses of $3.6 million, a decrease in direct labor expenses at our E&P operations of $3.4 million due to headcount reductions, a decrease in expenses for processing recyclable commodities of $2.3 million due to a decrease in commercial recycling volumes collected and a decrease in revenue-based royalties paid by our E&P operations of $1.6 million.

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

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

Cost of operations as a percentage of revenues increased 0.5 percentage points to 59.6% for the three months ended September 30, 2020, from 59.1% for the three months ended September 30, 2019.

The increase as a percentage of revenues consisted of a combined 1.3 percentage point increase from labor expenses, maintenance and repair expenses and recurring taxes on revenues not declining at the same rate as the decline in our revenues at locations owned in the comparable periods due primarily to the economic disruptions resulting from COVID-19, a 0.6 percentage point increase resulting from the accrual of other cash incentive compensation to non-management personnel, a 0.2 percentage point increase from increased landfill site maintenance and repairs, a 0.2 percentage point increase from the net impact of cost of operations expenses from acquisitions closed during, or subsequent to, the three months ended September 30, 2019 and a 0.3 percentage point increase from all other net changes, partially offset by a 0.4 percentage point decrease from the reversal of recorded liabilities for certain fees and exactions at Chiquita Canyon landfill, a 0.4 percentage point decrease from lower diesel fuel expenses, a 0.3 percentage point decrease from a reduction in expenses for auto and workers’ compensation claims, a 0.3 percentage point decrease from lower trucking and transportation expenses, a 0.3 percentage point decrease from lower 401(k) match expenses, a 0.2 percentage point decrease from lower employee medical benefits expenses and a 0.2 percentage point decrease from lower subcontracted operating expenses.

Cost of operations as a percentage of revenues increased 0.8 percentage points to 60.0% for the nine months ended September 30, 2020, from 59.2% for the nine months ended September 30, 2019.

The increase as a percentage of revenues consisted of a 0.6 percentage point increase from higher labor expenses, a 0.3 percentage point increase resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, a 0.3 percentage point increase from the net impact of cost of operations expenses from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, a 0.3 percentage point increase resulting from the accrual of other cash incentive compensation to non-management personnel, a 0.3 percentage point increase from higher maintenance and repair expenses, a 0.2 percentage point increase from an increase in expenses for auto and workers’ compensation claims and a 0.2 percentage point increase from all other net changes, partially offset by a 0.4 percentage point decrease from lower diesel fuel expenses, a 0.4 percentage point decrease from lower trucking and transportation expenses, a 0.3 percentage point decrease from lower employee medical benefits expenses and a 0.3 percentage point decrease from lower disposal expenses.

SG&A expenses decreased $1.9 million, or 1.4%, to $136.0 million for the three months ended September 30, 2020, from $137.9 million for the three months ended September 30, 2019.

The decrease was comprised of a decline of $4.2 million in SG&A expenses at our existing operations, assuming foreign currency parity, and a decline of $0.2 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by $2.5 million of additional SG&A expenses from operating locations at acquisitions closed during, or subsequent to, the three months ended September 30, 2019.

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

common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options.

SG&A expenses decreased $5.9 million, or 1.4%, to $404.2 million for the nine months ended September 30, 2020, from $410.1 million for the nine months ended September 30, 2019.

The decrease was comprised of a decline of $14.2 million in SG&A expenses at our existing operations, assuming foreign currency parity, and a decline of $0.9 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by $9.2 million of additional SG&A expenses from operating locations at acquisitions closed during, or subsequent to, the nine months ended September 30, 2019.

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

SG&A expenses as a percentage of revenues was 9.8% for both the three months ended September 30, 2020 and 2019.

The percentage of revenues impact from the reduction in travel, meeting, training and community activity expenses was offset by an increase from higher equity-based and share-based compensation expenses.

SG&A expenses as a percentage of revenues decreased 0.2 percentage points to 10.0% for the nine months ended September 30, 2020, from 10.2% for the nine months ended September 30, 2019.

The decrease as a percentage of revenues consisted of a 0.4 percentage point decrease from a reduction in travel, meeting, training and community activity expenses, a 0.1 percentage point decrease from lower direct acquisition expenses, a 0.1 percentage point decrease from lower medical benefits expenses, a 0.1 percentage point decrease from lower deferred compensation expense, a 0.1 percentage point decrease from lower legal expenses and a 0.1 percentage point decrease from all other net changes, partially offset by a 0.3 percentage point increase associated with administrative salaries and wages, a 0.2 percentage point increase due to higher expenses for uncollectible accounts receivable and a 0.2 percentage point increase from higher cash incentive compensation expense.

Total cost of operations increased $10.5 million, or 1.3%, to $825.9 million for the three months ended March 31, 2021, from $815.4 million for the three months ended March 31, 2020.

The increase was primarily the result of $24.1 million of additional operating costs from acquisitions closed subsequent to the three months ended March 31, 2020 and $5.6 million resulting from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease in operating costs at our existing operations of $17.2 million, assuming foreign currency parity, and a decrease in operating costs of $2.0 million at operations divested subsequent to the three months ended March 31, 2020.

The decrease in operating costs, assuming foreign currency parity, at our existing operations for the three months ended March 31, 2021, included the following declines totaling $19.6 million attributable to solid waste and E&P volume losses resulting from the impact of the COVID-19 pandemic:

a decrease in direct labor expenses at our Southern and Eastern segments and our E&P operations of $5.8 million due to headcount reductions, a decrease in third-party disposal expenses at our Eastern, Southern, Central and Canada segments of $4.5 million, a decrease in equipment and facility maintenance and repair expenses at our Eastern segment and E&P operations of $3.6 million, a decrease in diesel fuel expense of $2.7 million, a decrease in subcontracted E&P operating expenses of $2.1 million and a decrease in expenses for processing recyclable commodities at our Eastern segment of $0.9 million due to a decrease in commercial recycling volumes collected.

The remaining increase in operating costs, assuming foreign currency parity, at our existing operations of $2.4 million for the three months ended March 31, 2021 consisted of an increase in employee medical benefits expenses of $3.6 million due to an increase in medical visits, an increase in labor expenses of $3.1 million at our Western and Central segments due primarily to employee pay increases exceeding the benefit in the current year period of one less calendar and business day due to leap year occurring in the prior year period, an increase in subcontracted hauling services at our solid waste operations of $2.4 million due to outsourcing the servicing of certain non-strategic contracts and commercial collection customers to third party haulers, an increase in cash incentive compensation to non-management personnel of $2.2 million to recognize the services they are providing during the COVID-19 pandemic as essential workers, an increase in third party disposal expenses in our Western segment of $1.7 million due primarily to increased residential collection volumes requiring disposal at third party facilities and $1.0 million of other net expense increases, partially offset by a decrease in expenses for auto and workers’ compensation claims of $8.0 million due primarily to higher claims severity in the prior year period and adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded prior to 2021, a decrease in intermodal rail expenses of $1.8 million due to customer losses resulting in a reduction in cargo volume, a decrease in leachate disposal expenses of $1.0 million due to increased on-site treatment of leachate and the prior year period incurring higher costs to dispose of leachate in newly constructed landfill cells and a decrease in expenses for processing recyclable commodities in our Western segment of $0.8 million due to increased recyclable commodity values resulting in price reductions charged by third-party recycling processors.

Cost of operations as a percentage of revenues decreased 1.1 percentage points to 59.2% for the three months ended March 31, 2021, from 60.3% for the three months ended March 31, 2020.

The decrease as a percentage of revenues consisted of a 0.7 percentage point decrease from a reduction in expenses for auto and workers’ compensation claims, a 0.3 percentage point decrease from lower maintenance and repair expenses, a 0.2 percentage point decrease from lower disposal expenses, a 0.2 percentage point decrease from lower diesel fuel expenses and a 0.2 percentage point decrease from leveraging existing personnel to support certain price-led revenue increases, partially offset by a 0.2 percentage point increase from the accrual of cash incentive compensation to non-management personnel, a 0.2 percentage point increase from higher employee medical benefits expenses and a 0.1 percentage point increase from all other net changes.

SG&A expenses increased $5.3 million, or 3.9%, to $141.4 million for the three months ended March 31, 2021, from $136.1 million for the three months ended March 31, 2020.

The increase was comprised of $3.0 million of additional SG&A expenses from operating locations at acquisitions closed subsequent to the three months ended March 31, 2020, an increase of $1.5 million in SG&A expenses at our existing operations, assuming foreign currency parity, and $1.0 million resulting from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease in SG&A expenses of $0.2 million at operations divested subsequent to the three months ended March 31, 2020.

The increase in SG&A expenses at our existing operations, assuming foreign currency parity, of $1.5 million for the three months ended March 31, 2021, was comprised of an increase in deferred compensation expenses of $5.7 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in accrued recurring cash incentive compensation expense to our management of $5.0 million, an increase in professional fees of $1.6 million due primarily to adjustments recorded during the prior year period to reduce estimated accrued liabilities associated with unbilled legal services, an increase in share-based compensation expenses of $1.2 million due primarily to increased average share price values in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value and an increase in employee medical benefits expenses of $1.2 million due to an increase in medical visits, partially offset by a collective decrease in travel, meeting, training and community activity expenses of $6.0 million from shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, a decrease in equity-based compensation expenses of $3.4 million associated with an adjustment during the prior year period of our common shares held in our deferred compensation plan by certain key executives to fair value as a result of the shares being exchanged for other investment options, a decrease in expenses for uncollectible accounts receivable of $0.8 million primarily due to collections in the current period of customer accounts deemed uncollectible in prior periods, a decrease in office supplies and office utilities of $0.7 million due to office closures resulting from shelter at home restrictions, a decrease in direct acquisition expenses of $0.6 million due to a decrease in acquisition activity in the comparable periods, a decrease in equity-compensation expenses of $0.6 million due primarily to a decrease in the amount of performance-based restricted share units granted in 2019 and 2020 estimated to ultimately vest based on the achievement of required financial performance results and $1.1 million of other net expense decreases.

SG&A as a percentage of revenues was 10.1% for both the three months ended March 31, 2021 and 2020.

SG&A remained unchanged as a percentage of revenues as a result of a 0.4 percentage point decrease from a reduction in travel, meeting, training and community activity expenses, a 0.3 percentage point decrease from a reduction in equity-based compensation expenses associated with the designation of our common shares held in our deferred compensation plan and a 0.1 percentage point decrease from the net impact of SG&A expenses from acquisitions closed subsequent to the three months ended March 31, 2020, partially offset by a 0.4 percentage point increase from cash incentive compensation expenses and a 0.4 percentage point increase from deferred compensation expenses.

Depreciation .

Depreciation expense decreased $0.4 million, or 0.3%, to $157.6 million for the three months ended September 30, 2020, from $158.0 million for the three months ended September 30, 2019.

The decrease was comprised of a decrease in depletion expense of $9.0 million at our existing landfills due primarily to economic disruptions resulting

from COVID-19 causing a decrease in E&P and municipal solid waste volumes and a decrease of $0.2 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by an increase in depreciation and depletion expense of $4.6 million from acquisitions closed during, or subsequent to, the three months ended September 30, 2019 and an increase in depreciation expense at our existing operations of $4.2 million due primarily to the impact of additions to our fleet and equipment purchased to support our existing operations.

Depreciation expense decreased $2.0 million, or 0.4%, to $459.6 million for the nine months ended September 30, 2020, from $461.6 million for the nine months ended September 30, 2019.

The decrease was comprised of a decrease in depletion expense of $20.1 million at our existing landfills due primarily to economic disruptions resulting from COVID-19 causing a decrease in E&P and municipal solid waste and a decrease of $1.0 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by an increase in depreciation and depletion expense of $15.0 million from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019 and an increase in depreciation expense at our existing operations of $4.1 million due primarily to the impact of additions to our fleet and equipment purchased to support our existing operations exceeding certain equipment acquired from the Progressive Waste acquisition becoming fully depreciated in June 2019.

Depreciation expense as a percentage of revenues increased 0.1 percentage points to 11.3% for the three months ended September 30, 2020, from 11.2% for the three months ended September 30, 2019.

The decrease in our revenues due to economic disruptions resulting from COVID-19 contributed to a 0.6 percentage point increase, which was partially offset by a 0.5 percentage point reduction attributable to reduced E&P and municipal solid waste landfill volumes.

Depreciation expense as a percentage of revenues decreased 0.1 percentage points to 11.4% for the nine months ended September 30, 2020, from 11.5% for the nine months ended September 30, 2019.

The decrease as a percentage of revenues consisted of a 0.4 percentage point decrease resulting from declines in E&P and municipal solid waste landfill volumes, partially offset by a 0.3 percentage point increase resulting from a decrease in our revenues due to economic disruptions resulting from COVID-19.

Depreciation expense increased $6.6 million, or 4.4%, to $157.4 million for the three months ended March 31, 2021, from $150.8 million for the three months ended March 31, 2020.

The increase was comprised of $5.0 million of depreciation from the impact of additions to our fleet and equipment purchased to support our existing operations, depreciation and depletion expense of $4.0 million from acquisitions closed subsequent to the three months ended March 31, 2020 and $1.1 million resulting from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease in depletion expense of $2.7 million primarily at our E&P landfills as a decrease in demand for oil has resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in disposal volumes and a decrease in depreciation and depletion expense of $0.8 million from operations divested subsequent to the three months ended March 31, 2020.

Depreciation expense as a percentage of revenues increased 0.1 percentage points to 11.3% for the three months ended March 31, 2021, from 11.2% for the three months ended March 31, 2020.

The increase as a percentage of revenues consisted of a 0.3 percentage point increase from depreciation expense attributable to the impact of additions to our fleet and equipment, partially offset by a 0.2 percentage point decrease from depletion expense due to declines in E&P landfill volumes.

Amortization of Intangibles .

Amortization of intangibles expense increased $0.8 million, or 2.3%, to $32.7 million for the three months ended September 30, 2020, from $31.9 million for the three months ended September 30, 2019.

The increase was the result of $4.0 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended September 30, 2019, partially offset by a decrease of $3.1 million from certain intangible assets becoming fully amortized subsequent to September 30, 2019 and a decrease of $0.1 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Amortization of intangibles expense increased $2.3 million, or 2.4%, to $96.1 million for the nine months ended September 30, 2020, from $93.8 million for the nine months ended September 30, 2019.

The increase was the result of $12.2 million from intangible assets acquired in acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, partially offset by a decrease of $9.6 million from certain intangible assets becoming fully amortized subsequent to September 30, 2019 and a decrease of $0.3 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Amortization expense as a percentage of revenues increased 0.1 percentage points to 2.4% for the three and nine months ended September 30, 2020, from 2.3% for the three and nine months ended September 30, 2019.

Amortization of intangibles expense increased $0.6 million, or 1.8%, to $32.2 million for the three months ended March 31, 2021, from $31.6 million for the three months ended March 31, 2020.

The increase was the result of $2.8 million from intangible assets acquired in acquisitions closed subsequent to the three months ended March 31, 2020 and $0.3 million from an increase in the average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by a decrease of $2.4 million from certain intangible assets becoming fully amortized subsequent to March 31, 2020 and a decrease of $0.1 million from operations divested subsequent to the three months ended March 31, 2020.

Amortization expense as a percentage of revenues was 2.3% for both the three months ended March 31, 2021 and 2020.

Impairments and Other Operating Items .

Impairments and other operating items decreased $9.1 million, to net losses totaling $3.8 million for the three months ended September 30, 2020, from net losses totaling $12.9 million for the three months ended September 30, 2019.

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

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

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

Macroeconomic and geopolitical conditions, including a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for our E&P waste services.

During the nine months ended September 30, 2020, our E&P revenue declined $75.2 million on rig count declines of 72% in certain basins.

The most impacted basins include the Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder River Basin in Wyoming, all of which have relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico.

Additionally, across the industry there is uncertainty regarding future demand for oil and related services, as noted by several energy companies, many of whom are customers of our E&P operations.

These companies have written down the values of their oil and gas assets in anticipation of the potential for the decarbonization of their energy product mix given an increased global focus on reducing greenhouse gases and addressing climate change.

Such uncertainty regarding global demand has had a significant impact on the investment and operating plans of our E&P waste customers in the basins where we operate.

Based on these events, we concluded during the second quarter of 2020 that a triggering event occurred which required us to perform an impairment test of the property and equipment and intangible assets of our E&P operations as of June 30, 2020.

As a result of the impairment test, we determined that the carrying value of four landfills in our E&P operations exceeded their estimated fair value, resulting in an impairment charge of $417.4 million to property and equipment.

The remaining net losses of $25.2 million recorded during the nine months ended September 30, 2020 consisted of $16.8 million to adjust the carrying value of contingent consideration liabilities, $4.3 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date, $3.4 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations and $0.7 million of other net charges.

The net losses of $32.9 million recorded during the nine months ended September 30, 2019 consisted of $14.3 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date, $8.0 million resulting from the abandonment of an E&P landfill development project, $7.7 million of losses on property and equipment that were disposed of through sales or as a result of being damaged in operations, $1.7 million of expenses associated with the settlement of various litigation claims and a $1.5 million expense charge to increase the fair value of amounts payable under liability-classified contingent consideration arrangements from acquisitions closed in periods prior to 2018, partially offset by $0.3 million of other gains.

Impairments and other operating items decreased $0.9 million, to net losses totaling $0.6 million for the three months ended March 31, 2021, from net losses totaling $1.5 million for the three months ended March 31, 2020.

The net losses of $0.6 million recorded during the three months ended March 31, 2021 consisted of $0.5 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date and $0.1 million of other net charges.

The net losses of $1.5 million recorded during the three months ended March 31, 2020 consisted of $0.9 million of charges to terminate or write off the carrying cost of certain contracts that were not, or were not expected to be, renewed prior to their original estimated termination date and $0.6 million of other net charges.

Operating Income .

Operating income decreased $5.9 million, or 2.5%, to $230.7 million for the three months ended September 30, 2020, from $236.6 million for the three months ended September 30, 2019.

Operating income decreased $428.3 million, or 66.5%, to $215.3 million for the nine months ended September 30, 2020, from $643.6 million for the nine months ended September 30, 2019.

Contributing to decreases for the three and nine month comparable periods were declines in our existing solid waste and E&P operations resulting from the impact of COVID-19, partially offset by solid waste price increases and operating income generated from acquisitions, with the comparable nine month period further impacted by the impairment charge attributable to four of our E&P landfills.

Operating income as a percentage of revenues decreased 0.1 percentage points to 16.6% for the three months ended September 30, 2020, from 16.7% for the three months ended September 30, 2019.

The decrease as a percentage of revenues was comprised of a 0.5 percentage point increase in cost of operations, a 0.1 percentage point increase in

depreciation expense and a 0.1 percentage point increase in amortization expense, partially offset by a 0.6 percentage point decrease in impairments and other operating items.

Operating income as a percentage of revenues decreased 10.7 percentage points to 5.3% for the nine months ended September 30, 2020, from 16.0% for the nine months ended September 30, 2019.

The decrease as a percentage of revenues was comprised of a 10.1 percentage point increase in impairments and other operating items, a 0.8 percentage point increase in cost of operations and a 0.1 percentage point increase in amortization expense, partially offset by a 0.2 percentage point decrease in SG&A expense and a 0.1 percentage point decrease in depreciation expense.

Operating income increased $21.4 million, or 9.9%, to $238.4 million for the three months ended March 31, 2021, from $217.0 million for the three months ended March 31, 2020.

The increase was due primarily to price increases for our solid waste services, operating income contributions from increased sales of recyclable commodities and renewable energy credits associated with the generation of landfill gas, operating income generated from acquisitions closed subsequent to the three months ended March 31, 2020 and an increase in the average Canadian dollar to U.S.

dollar currency exchange rate, partially offset by declines in our existing solid waste and E&P volumes resulting from the impact of the COVID-19 pandemic.

Operating income as a percentage of revenues increased 1.1 percentage points to 17.1% for the three months ended March 31, 2021, from 16.0% for the three months ended March 31, 2020.

The increase as a percentage of revenues was comprised of a 1.1 percentage point increase in cost of operations and a 0.1 percentage point increase in impairments and other operating items, partially offset by a 0.1 percentage point decrease in depreciation expense.

Interest Expense .

Interest expense increased $3.8 million, or 10.5%, to $40.6 million for the three months ended September 30, 2020, from $36.8 million for the three months ended September 30, 2019.

The increase was primarily attributable to an increase of $3.9 million from the January 2020 issuance of our 2030 Senior Notes, an increase of $3.8 million from the March 2020 issuance of our 2050 Senior Notes, an increase of $0.4 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to a $150 million interest rate swap agreement commencing in February 2020 at a higher interest rate than two interest rate swap agreements totaling $175 million which expired in February 2020 and $0.7 million of other net increases, partially offset by a decrease of $2.7 million due to a reduction in the average borrowings outstanding under our Credit Agreement and a decrease of $2.3 million from the repayment of our 2019 Senior Notes.

Interest expense increased $8.3 million, or 7.4%, to $119.6 million for the nine months ended September 30, 2020, from $111.3 million for the nine months ended September 30, 2019.

The increase was primarily attributable to an increase of $10.8 million from the January 2020 issuance of our 2030 Senior Notes, an increase of $8.4 million from the March 2020 issuance of our 2050 Senior Notes, an increase of $5.1 million from the April 2019 issuance of our 2029 Senior Notes, an increase of $1.0 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to a $150 million interest rate swap agreement commencing in February 2020 at a higher interest rate than two interest rate swap agreements totaling $175 million which expired in February 2020 and $0.4 million of other net increases, partially offset by a decrease of $10.5 million due to a reduction in the average borrowings outstanding under our Credit Agreement and a decrease of $6.9 million from the repayment of $175 million of our 2019 Senior Notes.

Interest expense increased $4.4 million, or 11.7%, to $42.4 million for the three months ended March 31, 2021, from $38.0 million for the three months ended March 31, 2020.

The increase was primarily attributable to an increase of $3.0 million from the March 2020 issuance of our 2050 Senior Notes (as defined below), an increase of $2.0 million from higher net interest rates on borrowings outstanding under our Credit Agreement due primarily to $600 million in interest rate swap agreements commencing in October 2020 at higher interest rates than $575 million in interest rate swap agreements which expired between September 2020 and October 2020, an increase of $0.9 million from the January 2020 issuance of our 2030 Senior Notes (as defined below) and $0.6 million of other net increases, partially offset by a decrease of $2.1 million due to a reduction in the average borrowings outstanding under our Credit Agreement.

Interest Income .

Interest income decreased $1.2 million, to $0.9 million for the three months ended September 30, 2020, from $2.1 million for the three months ended September 30, 2019.

Interest income decreased $2.8 million, to $4.4 million for the nine months ended September 30, 2020, from $7.2 million for the nine months ended September 30, 2019.

The decreases were primarily attributable to lower reinvestment rates in the current period.

Other Income (Expense) .

Other income (expense) increased $0.7 million, to an income total of $0.7 million for the three months ended September 30, 2020, from an income total of $0 for the three months ended September 30, 2019.

The increase was due primarily to a $1.5 million increase in the value of investments purchased to fund our employee deferred compensation obligations due to stock market valuation increases and $0.1 million of other net income increases, partially offset by interest rate swap termination costs of $0.9 million associated with our early termination in September 2020 of four interest rate swap agreements.

Other income (expense) decreased $7.6 million, to an expense total of $3.0 million for the nine months ended September 30, 2020, from an income total of $4.6 million for the nine months ended September 30, 2019.

The decrease was due primarily to a $2.6 million decrease in the value of investments purchased to fund our employee deferred compensation obligations due to stock market valuation declines, a $3.0 million adjustment to increase certain accrued liabilities acquired in the 2016 Progressive Waste acquisition, an increase in foreign currency transaction losses of $2.2 million attributable to changes in the average foreign currency exchange rate in effect during the comparable reporting periods impacting our third party debt in Canadian dollars and our inter-entity financing arrangements and interest rate swap termination costs of $0.9 million, partially offset by $1.1 million of other net expense increases.

Interest income decreased $1.1 million to $1.1 million for the three months ended March 31, 2021, from $2.2 million for the three months ended March 31, 2020.

The decrease was primarily attributable to lower reinvestment rates in the current period.

Other Income (Expense), Net .

Other income (expense), net increased $13.0 million, to an income total of $3.5 million for the three months ended March 31, 2021, from an expense total of $9.5 million for the three months ended March 31, 2020.

Other income of $3.5 million recorded during the three months ended March 31, 2021 consisted of $1.2 million of income earned on investments purchased to fund our employee deferred compensation obligations, $1.2 million of adjustments to decrease certain accrued liabilities acquired in prior period acquisitions, an increase in foreign currency transaction gains of $0.7 million due to an increase in the value of the Canadian dollar and a $0.4 million increase in other net income sources.

Other expense of $9.5 million recorded during the three months ended March 31, 2020 consisted of $4.7 million of losses on investments purchased to fund our employee deferred compensation obligations, a $3.0 million adjustment to increase certain accrued liabilities acquired in the 2016 Progressive Waste acquisition and an increase in foreign currency transaction losses of $2.5 million due to a decrease in the value of the Canadian dollar, partially offset by a $0.7 million increase in other income sources.

Income Tax Provision .

Income taxes decreased $9.1 million, to $33.7 million for the three months ended September 30, 2020, from $42.8 million for the three months ended September 30, 2019.

Our effective tax rate for the three months ended September 30, 2020 was 17.6%.

Our effective tax rate for the three months ended September 30, 2019 was 21.2%.

Income taxes decreased $86.8 million, to $23.7 million for the nine months ended September 30, 2020, from $110.5 million

for the nine months ended September 30, 2019.

Our effective tax rate for the nine months ended September 30, 2020 was 24.4%.

Our effective tax rate for the nine months ended September 30, 2019 was 20.3%.

The income tax provision for the nine months ended September 30, 2020 included a $27.4 million expense associated with certain 2019 related-party payments no longer being deductible for tax purposes due to the finalization of tax regulations on April 7, 2020 under Internal Revenue Code section 267A and a $4.1 million expense related to an increase in our deferred income tax liabilities resulting from the impairment of certain assets within our E&P operations, which impacted the geographical apportionment of our state income taxes.

Additionally, the income tax benefit for the nine months ended September 30, 2020 included a benefit of $5.3 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

Income taxes increased $11.6 million, or 36.4%, to $40.3 million for the three months ended March 31, 2021, from $28.7 million for the three months ended March 31, 2020.

Our effective tax rate for the three months ended March 31, 2021 was 20.1%.

Our effective tax rate for the three months ended March 31, 2020 was 16.7%.

The income tax provision for the three months ended March 31, 2021 included a benefit of $2.0 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

The income tax provision for the three and nine months ended September 30, 2019 included a $3.8 million expense primarily associated with a reduction in deferred income tax assets related to compensation of executive officers no longer deemed deductible for tax purposes.

Additionally, the income tax provision for the three and nine months ended September 30, 2019 included a benefit of $0.1 million and $5.4 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.

The income tax provision for the three months ended March 31, 2020 included a benefit of $5.1 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

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The following table disaggregates our revenue by service line for the periods indicated (dollars in thousands of U.S.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Industrial and construction roll off

6 unchanged sentences

Prior to July 2020, we managed our operations through five geographic solid waste operating segments and our E&P segment, which were also our reportable segments.

As of July 2020, our Chief Operating Decision Maker determined that the E&P and Southern operating segments met all of the aggregation criteria and has eliminated our E&P segment by combining all operations of the E&P segment into the Southern segment.

After giving effect to this combination, our reportable segments consist of our five geographic solid waste operating segments and no longer include a separate E&P

As of July 2020, our Chief Operating Decision Maker determined that the E&P and Southern operating segments met all of the aggregation criteria and eliminated our E&P segment by combining all operations of the E&P segment into the Southern segment.

After giving effect to this combination, our reportable segments consist of our five geographic operating segments and no longer include a separate E&P segment.

Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts.

1 unchanged sentence

Segment results for the 2020 periods reflected in this report have been reclassified to reflect the realignment of our reportable segments for comparison with the same period in 2021.

At September 30, 2020, under the current orientation, our Eastern segment services customers located in northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin;

our Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico;

At March 31, 2021, under the current orientation, our Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico;

our Eastern segment services customers located in Delaware, northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin;

our Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming;

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dollars and as a percentage of total revenues for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Segment EBITDA for our reportable segments is shown in the following table in thousands of U.S.

dollars and as a percentage of segment revenues for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Corporate (a)

(a) Corporate consists of expenses associated with its administrative departments and certain centralized expenses including cash and equity-based incentive compensation, 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.

Amounts reflected are net of allocations to the five operating segments.

(a) The majority of Corporate expenses are allocated to the five operating segments.

Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the five operating segments and comprise the net EBITDA for our Corporate segment for the periods presented.

A reconciliation of segment EBITDA to Income before income tax provision is included in Note 10 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this report.

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

Significant changes in revenue and segment EBITDA for our reportable segments for the three month periods ended March 31, 2021, compared to the three month periods ended March 31, 2020, are discussed below:

Segment Revenue

Revenue in our Eastern segment increased $13.5 million, or 4.1%, to $344.4 million for the three months ended September 30, 2020, from $330.9 million for the three months ended September 30, 2019.

The components of the increase consisted of net revenue growth from acquisitions closed during, or subsequent to, the three months ended September 30, 2019, of $32.1 million, net price increases of $13.5 million and other revenue increases of $0.5 million, partially offset by solid waste volume decreases of $29.7 million attributable primarily to COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and landfill volumes and net revenue reductions from divestitures closed subsequent to September 30, 2019 of $2.9 million.

Revenue in our Eastern segment increased $48.1 million, or 5.1%, to $995.4 million for the nine months ended September 30, 2020, from $947.3 million for the nine months ended September 30, 2019.

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

Revenue in our Southern segment decreased $40.9 million, or 11.0%, to $330.6 million for the three months ended September 30, 2020, from $371.5 million for the three months ended September 30, 2019.

The components of the decrease consisted of a decline in revenue at our E&P operations of $41.6 million, partially offset by an increase in revenue at our solid waste operations of $0.7 million.

The $41.6 million decrease in revenue at our E&P operations was attributable to decreases in the demand for crude oil as a result of economic disruptions from COVID-19 resulting in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services.

The components of the $0.7 million increase in revenue at our solid waste operations consisted of net price increases of $11.0 million and other revenue increases of $0.8 million, partially offset by solid waste volume decreases of $11.1 million attributable primarily to the net impact of COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and municipal solid waste landfill volumes that exceeded increases in landfill special waste volumes.

Revenue in our Southern segment decreased $50.9 million, or 4.7%, to $1.033 billion for the nine months ended September 30, 2020, from $1.084 billion for the nine months ended September 30, 2019.

Revenue in our Southern segment decreased $31.1 million, or 8.4%, to $338.2 million for the three months ended March 31, 2021, from $369.3 million for the three months ended March 31, 2020.

The components of the decrease consisted of a decline in revenue at our E&P operations of $34.3 million, partially offset by an increase in revenue at our solid waste operations of $3.2 million.

The $72.7 million decrease in revenue at our E&P operations was attributable to decreases in the demand for crude oil as a result of economic disruptions from COVID-19 resulting in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services.

Drilling and production activity during the nine months ended September 30, 2020 were also adversely impacted by the drop in the value of crude oil due to the increased supply of oil resulting from Saudi Arabia and Russia abandoning production quotas and increasing production levels, which was exacerbated by the impact of COVID-19.

The components of the $21.8 million increase in revenue at our solid waste operations consisted of net price increases of $41.8 million and net revenue growth from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019 of $12.3 million, partially offset by solid waste volume decreases of $30.3 million attributable primarily to COVID-19 economic disruptions driving declines in commercial collection, roll off collection, transfer station and municipal solid waste landfill volumes that exceeded increases in landfill special waste volumes, net revenue reductions from divestitures closed subsequent to September 30, 2019 of $0.6 million and other revenue decreases of $1.4 million.

Revenue in our Western segment increased $12.0 million, or 4.2%, to $301.2 million for the three months ended September 30, 2020, from $289.2 million for the three months ended September 30, 2019.

The components of the increase consisted of net revenue growth from acquisitions closed during, or subsequent to, the three months ended September 30,

2019, of $7.3 million, net price increases of $7.2 million and other revenue increases of $0.4 million, partially offset by intermodal revenue decreases of $2.9 million due primarily to a reduction in intermodal cargo volumes.

Revenue in our Western segment increased $27.5 million, or 3.4%, to $848.7 million for the nine months ended September 30, 2020, from $821.2 million for the nine months ended September 30, 2019.

The components of the increase consisted of net price increases of $23.4 million and net revenue growth from acquisitions closed during, or subsequent to, the three months ended September 30, 2019, of $9.4 million, partially offset by intermodal revenue decreases of $4.5 million due to a reduction in intermodal cargo volumes and other revenue decreases of $0.8 million.

Revenue in our Central segment decreased $1.5 million, or 0.7%, to $228.6 million for the three months ended September 30, 2020, from $230.1 million for the three months ended September 30, 2019.

The components of the decrease consisted of solid waste volume decreases of $17.5 million due to the impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and other revenue decreases of $0.5 million, partially offset by net price increases of $9.1 million and net revenue growth from acquisitions closed during, or subsequent to, the three months ended September 30, 2019, of $7.4 million.

Revenue in our Central segment increased $27.4 million, or 4.4%, to $653.7 million for the nine months ended September 30, 2020, from $626.3 million for the nine months ended September 30, 2019.

The components of the increase consisted of net price increases of $30.0 million and revenue growth from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019, of $26.5 million, partially offset by solid waste volume decreases of $28.0 million due to the impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and other revenue decreases of $1.1 million.

Revenue in our Canada segment decreased $6.0 million, or 3.1%, to $184.8 million for the three months ended September 30, 2020, from $190.8 million for the three months ended September 30, 2019.

The components of the decrease consisted of solid waste volume decreases of $16.2 million due to the net impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and a decrease of $1.6 million resulting from a lower average foreign currency exchange rate in effect during the comparable reporting periods, partially offset by net price increases of $8.3 million, an increase of $2.9 million resulting from an increase in the prices for renewable energy credits and natural gas associated with the generation and sale of landfill gas and other revenue increases of $0.6 million.

Revenue in our Canada segment decreased $31.2 million, or 5.7%, to $516.5 million for the nine months ended September 30, 2020, from $547.7 million for the nine months ended September 30, 2019.

The components of the decrease consisted of solid waste volume decreases of $50.9 million due to the net impact of COVID-19 economic disruptions driving decreases in commercial collection, roll off collection, transfer station and landfill volumes and a decrease of $9.6 million resulting from a lower average foreign currency exchange rate in effect during the comparable reporting, partially offset by net price increases of $27.6 million, net revenue growth from acquisitions closed during, or subsequent to, the nine months ended September 30, 2019 of $0.6 million and other revenue increases of $1.1 million.

The $34.3 million decrease in revenue at our E&P operations was attributable to decreases in the demand for crude oil as a result of economic disruptions from the COVID-19 pandemic resulting in a drop in the value of crude oil, decreases in drilling and production activity levels and decreases in overall demand for our E&P waste services.

The components of the $3.2 million increase in revenue at our solid waste operations consisted of net price increases of $13.5 million, higher prices for old corrugated cardboard and other paper products contributing to a $1.6 million increase in sales from recyclable commodities and other revenue increases of $0.3 million, partially offset by solid waste volume decreases of $10.4 million attributable primarily to COVID-19-related economic disruptions driving declines in commercial collection, roll off collection and municipal solid waste landfill volumes and net revenue reductions from divestitures closed subsequent to March 31, 2020 of $1.8 million.

Revenue in our Eastern segment increased $4.3 million, or 1.3%, to $336.5 million for the three months ended March 31, 2021, from $332.2 million for the three months ended March 31, 2020.

The components of the increase consisted of net price increases of $13.2 million, net revenue growth from acquisitions closed subsequent to the three months ended March 31, 2020 of $9.6 million and higher prices for old corrugated cardboard and other paper products contributing to a $5.6 million increase in sales from recyclable commodities, partially offset by solid waste volume decreases of $24.1 million attributable primarily to COVID-19-related economic disruptions in our Northeastern markets driving declines in commercial collection, roll off collection, transfer station and landfill volumes.

Revenue in our Western segment increased $25.0 million, or 9.2%, to $297.0 million for the three months ended March 31, 2021, from $272.0 million for the three months ended March 31, 2020.

The components of the increase consisted of solid waste volume increases of $9.8 million attributable to increased residential collection, transfer station and landfill municipal solid waste volumes, net revenue growth from acquisitions closed subsequent to the three months ended March 31, 2020 of $8.5 million, net price increases of $7.0 million and recyclable commodity revenue increases of $1.8 million due primarily to higher prices for old corrugated cardboard and higher volumes collected from residential recycling customers, partially offset by intermodal revenue decreases of $2.1 million due primarily to customer losses resulting in a reduction in intermodal cargo volumes.

Revenue in our Central segment increased $26.9 million, or 12.9%, to $235.4 million for the three months ended March 31, 2021, from $208.5 million for the three months ended March 31, 2020.

The components of the increase consisted of revenue growth from acquisitions closed subsequent to the three months ended March 31, 2020 of $25.2 million, net price increases of $9.4 million and other revenue increases of $0.2 million, partially offset by solid waste volume decreases of $6.5 million due to the impact of COVID-19-related economic disruptions driving decreases in roll off collection and landfill municipal solid waste volumes and net revenue reductions from divestitures closed subsequent to March 31, 2020 of $1.4 million.

Revenue in our Canada segment increased $18.5 million, or 10.9%, to $188.9 million for the three months ended March 31, 2021, from $170.4 million for the three months ended March 31, 2020.

The components of the increase consisted of $10.3 million resulting from a higher average foreign currency exchange rate in effect during the comparable reporting periods, net price increases of $9.2 million, $6.0 million resulting from higher prices for renewable energy credits associated with the generation of landfill gas, recyclable commodity revenue increases of $2.0 million due primarily to higher prices for old corrugated cardboard and higher volumes collected from residential recycling customers and other revenue increases of $0.3 million, partially offset by solid waste volume decreases of $9.3 million due to the net impact of COVID-19-related economic disruptions driving decreases in commercial collection, roll off and transfer station volumes.

Segment EBITDA

Segment EBITDA in our Western segment increased $11.0 million, or 12.2%, to $101.1 million for the three months ended September 30, 2020, from $90.1 million for the three months ended September 30, 2019.

The increase was due primarily to an increase in revenues of $12.0 million, a decrease in taxes on revenues of $4.9 million from the reversal of recorded liabilities for certain fees and exactions at Chiquita Canyon landfill due to our successful challenge of increases assessed in prior periods, a decrease in intermodal rail expenses of $2.1 million due to a reduction in cargo volume, a decrease in fuel expense of $1.1 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in 401(k) matching expenses of $1.1 million as we suspended our 401(k) match as of June 1, 2020 and a collective decrease in travel, meeting, training, and community activity expenses of $0.9 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, partially offset by a net $5.4 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $3.3 million due to an increase in the overhead

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

Segment EBITDA in our Western segment increased $14.0 million, or 5.5%, to $267.5 million for the nine months ended September 30, 2020, from $253.5 million for the nine months ended September 30, 2019.

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

Segment EBITDA in our Eastern segment increased $2.9 million, or 3.3%, to $91.0 million for the three months ended September 30, 2020, from $88.1 million for the three months ended September 30, 2019.

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

Segment EBITDA in our Eastern segment increased $8.2 million, or 3.3%, to $258.3 million for the nine months ended September 30, 2020, from $250.1 million for the nine months ended September 30, 2019.

The increase was due primarily to an increase in revenues of $59.2 million from organic growth and acquisitions, $26.0 million of collective decreases in third-party disposal expenses, third-party trucking expenses, labor expenses, expenses for processing recyclable commodities and taxes on revenues attributable to declines in solid waste and commercial recycling volumes resulting primarily from economic disruptions caused by COVID-19, a decrease in fuel expense of $5.5 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in employee medical benefits expenses of $5.3 million due to a reduction in medical visits, a collective decrease in travel, meeting, training, and community activity expenses of $1.8 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, an increase to EBITDA of $1.5 million

from the impact of operations disposed of during the nine months ended September 30, 2020, a decrease in 401(k) matching expenses of $1.3 million as we suspended our 401(k) match as of June 1, 2020 and other expense decreases of $1.9 million, partially offset by a net $78.0 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $6.3 million due to an increase in the overhead allocation rate, an increase of $2.7 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, an increase in expenses for uncollectible accounts receivable of $2.5 million due to customers experiencing financial difficulties resulting from the economic impact of COVID-19, an increase in truck, container, equipment and facility maintenance and repair expenses of $1.5 million due to an increase in facility repairs as well as parts and service rate increases, an increase in subcontracted hauling services of $1.2 million due to outsourcing the servicing of certain non-strategic collection customers to third party haulers, an increase in expenses for auto and workers’ compensation claims of $1.1 million due primarily to non-recurring adjustments recorded in the prior year period to decrease projected losses on outstanding claims occurring prior to 2019 and an increase in landfill operating expenses of $1.0 million due primarily to increased gas system repairs.

Segment EBITDA in our Central segment increased $1.2 million, or 1.4%, to $82.9 million for the three months ended September 30, 2020, from $81.7 million for the three months ended September 30, 2019.

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

Segment EBITDA in our Central segment increased $16.4 million, or 7.5%, to $235.7 million for the nine months ended September 30, 2020, from $219.3 million for the nine months ended September 30, 2019.

The increase was due primarily to an increase in revenues of $27.4 million, $5.3 million of collective decreases in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting from economic disruptions caused by COVID-19, a decrease in employee medical benefits expenses of $3.6 million due to a reduction in medical visits, a decrease in expenses for uncollectible accounts receivable of $1.9 million due primarily to the current period collection of certain accounts deemed uncollectible in prior periods, a decrease in fuel expense of $1.6 million due to a decrease in the price of diesel fuel, a decrease in 401(k) matching expenses of $1.3 million as we suspended our 401(k) match as of June 1, 2020, a collective decrease in travel, meeting, training, and community activity expenses of $1.2 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities and other expense decreases of $0.7 million, partially offset by a net $15.4 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in labor expenses of $5.1 million due primarily to employee pay rate increases, an additional calendar and business day in the current year period due to leap year, as well as emergency wages and other COVID-19-related employee costs exceeding decreases in hours worked attributable to solid waste volume reductions resulting from COVID-19 economic disruptions, an increase in corporate overhead expense allocations of $2.7 million due to an increase in the overhead allocation rate, an increase of $2.3 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19 and an increase in expenses for auto and workers’ compensation claims of $1.1 million due primarily to non-recurring adjustments recorded in the prior year period to decrease projected losses on outstanding claims.

Segment EBITDA in our Southern segment decreased $31.8 million, or 28.1%, to $81.4 million for the three months ended September 30, 2020, from $113.2 million for the three months ended September 30, 2019.

The decrease was due to a decrease in E&P revenues of $41.6 million, an increase in corporate overhead expense allocations to our solid waste operations of $3.3 million due to an increase in the overhead allocation rate, an increase in truck, container, equipment and facility maintenance and repair expenses at our solid waste operations of $2.4 million due to an increase in facility repairs

as well as parts and service rate increases, an increase in labor expenses at our solid waste operations of $1.6 million due primarily to employee pay rate increases, an increase in expenses for uncollectible accounts receivable at our E&P operations of $1.5 million due to customers experiencing financial difficulties resulting from the economic impact of COVID-19 and $0.7 million of other net expense increases at our solid waste operations, partially offset by a decrease in 401(k) matching expenses at our solid waste operations of $1.9 million as we suspended our 401(k) match as of June 1, 2020, a decrease in third party disposal expenses at our solid waste operations of $1.4 million due primarily to declines in commercial and roll off collection volumes, a decrease in employee medical benefits expenses at our solid waste operations of $1.2 million due to a reduction in medical visits, a decrease in fuel expense at our solid waste operations of $0.9 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in expenses for auto and workers’ compensation claims at our solid waste operations of $0.8 million due primarily to adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded in prior periods, a collective decrease in travel, meeting, training, and community activity expenses at our solid waste operations of $0.7 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, an increase in revenues at our solid waste operations of $0.7 million and the following expense decreases at our E&P operations which were directly attributable to the decline in E&P volumes and corresponding decline in E&P revenues:

a decrease in labor expenses of $3.0 million;

a decrease in equipment and property repair and maintenance expenses of $2.8 million;

a decrease in operating activities outsourced to third-parties of $2.0 million;

a decrease in fuel expense of $0.9 million;

a decrease in landfill operating supplies of $0.9 million;

a decrease in third-party trucking and transportation services of $0.6 million;

a decrease in royalty expenses paid on revenues of $0.6 million;

a decrease in travel, meetings and training expenses of $0.5 million and $0.4 million of other net expense decreases.

Segment EBITDA in our Southern segment decreased $50.3 million, or 15.4%, to $276.8 million for the nine months ended September 30, 2020, from $327.1 million for the nine months ended September 30, 2019.

The decrease was due to a decrease in E&P revenues of $72.7 million, a net $8.3 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in truck, container, equipment and facility maintenance and repair expenses at our solid waste operations of $7.8 million due to an increase in facility repairs as well as parts and service rate increases, an increase in expenses for auto and workers’ compensation claims of $6.7 million at our solid waste operations due primarily to increases in our deductibles for auto claims, higher claims severity in the current year period and adjustments recorded in the prior year period to decrease projected losses on outstanding claims originally recorded prior to 2019, an increase in labor expenses at our solid waste operations of $6.0 million due primarily to employee pay rate increases, an increase of $3.6 million resulting from the payment of supplemental bonuses to non-management employees at our solid waste operations to provide financial assistance associated with the impact of COVID-19, an increase in corporate overhead expense allocations to our solid waste operations of $3.5 million due to an increase in the overhead allocation rate, an increase in third party trucking and transportation expenses of $2.2 million at our solid waste operations due to increased landfill special waste volumes requiring transportation services to our disposal sites, an increase in expenses for uncollectible accounts receivable at our E&P operations of $1.9 million due to customers experiencing financial difficulties resulting from the economic impact of COVID-19, an increase in leachate expense at our solid waste operations of $1.5 million due to higher precipitation at our sites in Florida and $0.4 million of other net expense increases at our solid waste operations, partially offset by an increase in revenues at our solid waste operations of $21.8 million, a decrease in third party disposal expenses at our solid waste operations of $6.3 million due primarily to declines in commercial and roll off collection volumes, a decrease in employee medical benefits expenses at our solid waste operations of $5.4 million due to a reduction in medical visits, a decrease in 401(k) matching expenses at our solid waste operations of $2.4 million as we suspended our 401(k) match as of June 1, 2020, a collective decrease in travel, meeting, training, and community activity expenses at our solid waste operations of $2.3 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in fuel expense at our solid waste operations of $1.6 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in compressed natural gas expense at our solid waste operations of $1.5 million due primarily to the recognition in 2020 of tax credits associated with the purchase of compressed natural gas and the following expense decreases at our E&P operations which were directly attributable to the decline in E&P volumes and corresponding decline in E&P revenues:

a decrease in equipment and property repair and maintenance expenses of $4.2 million;

a decrease in operating activities outsourced to third-parties of $3.6 million;

a decrease in labor expenses of $3.4 million;

a decrease in third-party trucking and transportation services of $3.2 million;

a decrease in fuel expense of $2.0 million;

a decrease in royalty expenses paid on revenues of $1.6 million;

a decrease in landfill operating supplies of $1.3 million;

a decrease in

travel, meetings and training expenses of $1.2 million;

a decrease in equipment rental expenses of $0.6 million and $1.9 million of other net expense decreases.

Segment EBITDA in our Canada segment increased $5.7 million, or 8.6%, to $72.5 million for the three months ended September 30, 2020, from $66.8 million for the three months ended September 30, 2019.

The increase was comprised of an increase of $6.2 million assuming foreign currency parity during the comparable reporting periods and a decrease of $0.5 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

The $6.2 million increase, which assumes foreign currency parity, was due to a decrease in subcontracted hauling services at our solid waste operations of $2.8 million due primarily to the impact of reversing expenses accrued in a prior period and incurring less expenses in the current period associated with estimated equipment charge overages related to an outsourced collection contract, $2.4 million of collective decreases in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting from economic disruptions caused by COVID-19, a decrease in labor expenses of $1.7 million due to the receipt of a government subsidy reimbursing us for certain payroll expenditures remitted to our employees during the COVID-19 pandemic, a decrease in fuel expense of $1.5 million due to a decrease in the price of diesel fuel and declines in the volume of fuel used in our operations, a decrease in insurance premium expense of $1.2 million due primarily to refunds received in the current period resulting from favorable workers’ compensation claim incident totals and a decrease in expenses for uncollectible accounts receivable of $1.2 million due primarily to the current period collection of certain accounts deemed uncollectible in prior periods, partially offset by a decrease in revenues of $4.4 million and other expense increases of $0.2 million.

Segment EBITDA in our Canada segment decreased $8.1 million, or 4.2%, to $185.6 million for the nine months ended September 30, 2020, from $193.7 million for the nine months ended September 30, 2019.

The decrease was comprised of a decrease of $4.8 million assuming foreign currency parity during the comparable reporting periods and a decrease of $3.3 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

The $4.8 million decrease, which assumes foreign currency parity, was due primarily to a decrease in revenues of $21.6 million, additional expenses of $1.2 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19 and an increase in other net expenses of $1.3 million, partially offset by collective decreases totaling $7.2 million in third-party disposal expenses and third-party trucking expenses attributable to declines in solid waste volumes resulting primarily from economic disruptions caused by COVID-19, a decrease in fuel expense of $4.4 million due to declines in the market price of diesel fuel, a decrease in subcontracted hauling services at our solid waste operations of $3.2 million due primarily to the impact of reversing expenses accrued in a prior period and incurring less expenses in the current period associated with estimated equipment charge overages related to an outsourced collection contract, a decrease in labor expenses of $1.7 million due to the receipt of a government subsidy reimbursing us for certain payroll expenditures remitted to our employees during the COVID-19 pandemic, a decrease in insurance premium expense of $1.5 million due primarily to refunds received in the current period resulting from favorable workers’ compensation claim incident totals and a collective decrease in travel, meeting, training, and community activity expenses of $1.3 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities.

Segment EBITDA at Corporate decreased $3.7 million, to a loss of $4.1 million for the three months ended September 30, 2020, from a loss of $0.4 million for the three months ended September 30, 2019.

The decrease was due to an increase in accrued cash incentive compensation expense to our management and non-management employees of $9.5 million, an increase in equity-based compensation expenses of $2.4 million resulting primarily from an increased value of our recurring grant of restricted and performance share units to our personnel and adjustments to the amount of performance-based restricted share units granted in 2018 that are estimated to ultimately vest, an increase in share-based compensation expenses of $1.7 million due primarily to increased share price volatility in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value, an increase in direct acquisition expenses of $1.3 million due to an increase in acquisition activity, an increase in deferred compensation expenses of $1.2 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in software licenses and subscriptions expenses of $0.9 million due primarily to the addition of new sales and customer service applications, an increase of $0.7 million in equity-based compensation expenses associated with fair value adjustments to Company common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options and $1.8 million of other net expense increases, partially offset

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

Segment EBITDA at Corporate increased $1.3 million, to a loss of $10.5 million for the nine months ended September 30, 2020, from a loss of $11.8 million for the nine months ended September 30, 2019.

The increase was due to an increase in corporate overhead allocated through charges to our segments of $16.1 million due to an increase in expenses qualifying for allocation, a collective decrease in travel, meeting, training, office supplies and community activity expenses of $6.0 million due to shelter at home and other restrictions on our employees due to COVID-19 resulting in the cancellation of non-essential off-site activities, a decrease in direct acquisition expenses of $3.6 million due to a decline in acquisition activity, a decrease in deferred compensation expenses of $3.0 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease in professional fees of $2.9 million due primarily to work on legal matters being postponed resulting from temporary court closures and a decrease in third party tax consulting expenses and a decrease in share-based compensation expenses of $1.7 million due primarily to decreased share price volatility and less outstanding shares in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value, partially offset by an increase in accrued cash incentive compensation expense to our management and non-management employees of $18.4 million, an increase of $4.0 million in equity-based compensation expenses associated with fair value adjustments to Company common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, an increase in software licenses and subscriptions expenses of $2.2 million due primarily to the addition of new sales and customer service applications, an increase in payroll and payroll related expenses of $2.1 million due to annual pay increases and increased employee termination pay, an increase in equity-based compensation expenses of $1.1 million resulting primarily from the impact of an increased value of our recurring grant of restricted and performance share units to our personnel, net of adjustments to the amount of performance-based restricted share units estimated to ultimately vest, and $4.2 million of other net expense increases.

Segment EBITDA in our Western segment increased $12.8 million, or 15.8%, to $93.8 million for the three months ended March 31, 2021, from $81.0 million for the three months ended March 31, 2020.

The increase was due primarily to an increase in revenues of $25.0 million, a decrease in intermodal rail expenses of $1.8 million due to customer losses resulting in a reduction in cargo volume, a collective decrease in travel, meeting, training, and community activity expenses of $0.9 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, a decrease in expenses for auto and workers’ compensation claims of $0.9 million due primarily to adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded prior to 2021 and a decrease in expenses for processing recyclable commodities of $0.8 million due to increased recyclable commodity values resulting in price reductions charged by third-party recycling processors, partially offset by a net $6.3 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $3.7 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation, an increase in labor expenses of $1.9 million due primarily to employee pay increases exceeding the benefit in the current year period of one less calendar and business day due to leap year occurring in the prior year period, an increase in third party disposal expenses of $1.7 million due primarily to increased residential collection volumes requiring disposal at third party facilities, an increase in third-party trucking and transportation expenses of $1.2 million due primarily to higher residential collection tonnage increasing transfer station volumes and landfill volumes in certain markets that require transportation services to our disposal sites, an increase in employee medical benefits expenses of $1.0 million due to an increase in medical visits and other expense increases of $0.8 million.

Segment EBITDA in our Southern segment decreased $12.9 million, or 12.1%, to $93.4 million for the three months ended March 31, 2021, from $106.3 million for the three months ended March 31, 2020.

The decrease was due to a decline in E&P revenues of $34.3 million, an increase in corporate overhead expense allocations to our solid waste operations of $3.5 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation, an increase in subcontracted hauling services at our solid waste operations of $2.7 million due to outsourcing the servicing of certain non-strategic contracts and commercial collection customers to third party haulers, an increase in employee medical benefits expenses of $1.4 million due to an increase in medical visits and a decrease to EBITDA of $0.9 million from operations disposed of subsequent to the three months ended March 31, 2020, partially offset by a decrease in expenses for auto and workers’ compensation claims of $6.4 million at our solid waste operations due primarily to higher claims severity in the prior year period and adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded prior to 2021, an increase in revenues at our solid waste operations of $5.0 million from organic growth and acquisitions, a decrease in labor expenses of $2.3 million due primarily to one less calendar and business day in the current year period due to leap year in the prior year period and a decrease in employee hours worked due to commercial and roll off collection volume declines, a decrease in third party disposal expenses at our solid waste operations of $1.7 million due primarily to declines in commercial and roll off collection volumes, a collective decrease in travel, meeting, training, and community activity expenses at our solid waste operations of $1.0 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, a decrease in fuel expense at our solid waste operations of $0.9 million due to declines in the volume of fuel used in our operations, a net $1.2 million decrease in all other expenses at our solid waste operations and the following expense decreases at our E&P operations which were directly attributable to the decline in E&P volumes and corresponding decline in E&P revenues:

a decrease in labor expenses of $3.0 million, a decrease in operating activities outsourced to third-parties of $2.1 million, a decrease in equipment and property repair and maintenance expenses of $2.1 million, a decrease in corporate overhead expense allocations of $0.7 million as the calculation of the overhead allocation rate from corporate is based upon revenues, a decrease in equipment rental expenses of $0.6 million, a decrease in fuel expense of $0.5 million, a decrease in royalty expenses paid on revenues of $0.5 million, a decrease in travel, meetings and training expenses of $0.5 million, a decrease in third-party trucking and transportation services of $0.4 million, a decrease in landfill operating supplies of $0.4 million and $0.6 million of other net expense decreases.

Segment EBITDA in our Eastern segment increased $4.4 million, or 5.3%, to $89.1 million for the three months ended March 31, 2021, from $84.7 million for the three months ended March 31, 2020.

The increase was due primarily to an increase in revenues of $4.3 million, a decrease in third-party trucking and transportation expenses of $1.7 million attributable to declines in commercial and roll off collection volumes requiring third-party transportation services, a

decrease in labor expenses of $1.5 million due to lower headcount resulting from reductions in the number of routes needed to service our collection customers, a decrease in truck, container, equipment and facility maintenance and repair expenses of $1.5 million due to a decrease in the number of routed vehicles and reductions in equipment operating hours, a decrease in expenses for uncollectible accounts receivable of $1.4 million due primarily to collections in the current period of customer accounts deemed uncollectible in prior periods, a decrease in leachate disposal expenses of $1.1 million due to increased on-site treatment of leachate and the prior year period incurring higher costs to dispose of leachate in newly constructed landfill cells, a decrease in expenses for auto and workers’ compensation claims of $1.0 million due primarily to adjustments recorded in the current year period to decrease projected losses on outstanding claims originally recorded prior to 2021, a decrease in expenses for processing recyclable commodities of $0.9 million due to declines in commercial recycling volumes, a decrease in fuel expense of $0.7 million due to reductions in collection routes and equipment hours operated resulting in declines in the volume of fuel used in our operations and a collective decrease in travel, meeting, training, and community activity expenses of $0.5 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, partially offset by a net $5.0 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $3.9 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation, an increase in employee medical benefits expenses of $1.1 million due to an increase in medical visits and other expense increases of $0.2 million.

Segment EBITDA in our Central segment increased $5.8 million, or 8.0%, to $79.0 million for the three months ended March 31, 2021, from $73.2 million for the three months ended March 31, 2020.

The increase was due primarily to an increase in revenues of $28.3 million from organic growth and acquisitions and a collective decrease in travel, meeting, training, and community activity expenses of $0.5 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, partially offset by a net $15.7 million increase in cost of operations and SG&A expenses attributable to acquired operations, an increase in corporate overhead expense allocations of $3.2 million due to an increase in the overhead allocation rate resulting from an increase in corporate expenses qualifying for allocation, an increase in labor expenses of $1.5 million due primarily to employee pay increases exceeding the benefit in the current year period of one less calendar and business day due to leap year occurring in the prior year period, an increase in employee medical benefits expenses of $1.1 million due to an increase in medical visits, an increase in expenses for uncollectible accounts receivable of $0.9 million due primarily to the prior period benefiting from the collection of certain accounts previously deemed uncollectible and other expense increases of $0.6 million.

Segment EBITDA in our Canada segment increased $14.5 million, or 24.5%, to $73.9 million for the three months ended March 31, 2021, from $59.4 million for the three months ended March 31, 2020.

The increase was comprised of an increase of $10.8 million assuming foreign currency parity during the comparable reporting periods and an increase of $3.7 million from a higher average foreign currency exchange rate in effect during the comparable reporting periods.

The $10.8 million increase, which assumes foreign currency parity, was due primarily to an increase in revenues of $8.2 million, a decrease in third-party disposal expenses of $1.4 million attributable to declines in commercial and roll off collection volumes requiring disposal at third-party locations, a decrease in expenses for uncollectible accounts receivable of $0.8 million due primarily to collections in the current period of customer accounts deemed uncollectible in prior periods and a collective decrease in travel, meeting, training, and community activity expenses of $0.4 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities.

Segment EBITDA at Corporate increased $2.9 million, to a loss of $0.7 million for the three months ended March 31, 2021, from a loss of $3.6 million for the three months ended March 31, 2020.

The increase was due to an increase in corporate overhead allocated through charges to our segments of $13.9 million due to an increase in expenses qualifying for allocation, a decrease in equity-based compensation expenses of $3.4 million associated with an adjustment during the prior year period of our common shares held in our deferred compensation plan by certain key executives to fair value as a result of the shares being exchanged for other investment options, a collective decrease in travel, meeting, training and community activity expenses of $2.2 million due to shelter at home and other restrictions on our employees due to the COVID-19 pandemic resulting in the cancellation of non-essential off-site activities, a decrease in direct acquisition expenses of $0.6 million due to a decrease in acquisition activity in the comparable periods and a decrease in equity-compensation expenses of $0.6 million due primarily to a decrease in the amount of performance-based restricted share

units granted in 2019 and 2020 estimated to ultimately vest based on the achievement of required financial performance results, partially offset by an increase in accrued cash incentive compensation expense to our management and non-management employees of $8.5 million, an increase in deferred compensation expenses of $5.7 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in professional fees of $1.8 million due primarily to adjustments recorded during the prior year period to reduce estimated accrued liabilities associated with unbilled legal services, an increase in share-based compensation expenses of $1.2 million due primarily to increased average share price values in the current period for equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016 which are subject to valuation adjustments each period based on changes in fair value and $0.6 million of other net expense increases.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth certain cash flow information for the nine months ended September 30, 2020 and 2019 (in thousands of U.S.

Nine Months Ended

September 30,

The following table sets forth certain cash flow information for the three months ended March 31, 2021 and 2020 (in thousands of U.S.

Three Months Ended

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

1 unchanged sentence

Operating Activities Cash Flows

For the nine months ended September 30, 2020, net cash provided by operating activities was $1.186 billion.

For the nine months ended September 30, 2019, net cash provided by operating activities was $1.185 billion.

For the three months ended March 31, 2021, net cash provided by operating activities was $400.4 million.

For the three months ended March 31, 2020, net cash provided by operating activities was $369.6 million.

The $30.8 million increase was due primarily to the following:

1) Accounts receivable — Our increase in net cash provided by operating activities was favorably impacted by $95.0 million from accounts receivable, as changes in accounts receivable, net of acquisitions, resulted in an increase to operating cash flows of $46.0 million for the nine months ended September 30, 2020, compared to a decrease to operating cash flows of $49.1 million for the nine months ended September 30, 2019.

During the nine months ended September 30, 2020, net price increases of $168.0 million were offset by volume decreases in our solid waste business and E&P business of $199.8 million and $75.2 million, respectively.

The net decrease in revenues resulting from volume losses in excess of price increases during the nine months ended September 30, 2020 contributed to a decrease in accounts receivable at September 30, 2020.

During the nine months ended September 30, 2019, we recognized net price increases of $174.5 million and volume increases in our solid waste business and E&P business of $7.0 million and $12.5 million, respectively.

The increase in revenues resulting from price and volume increases during the nine months ended September 30, 2019 contributed to an increase in accounts receivable at September 30, 2019.

2) Decrease in earnings — Our increase in net cash provided by operating activities was unfavorably impacted by $72.1 million from a decrease in net income, excluding depreciation, amortization of intangibles, amortization of leases, deferred income taxes, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to a decline in earnings at our E&P operations, as well as economic disruptions resulting from COVID-19, and additional income tax expense due to the finalization of tax regulations under Internal Revenue Code section 267A.

3) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was unfavorably impacted by $13.1 million from accounts payable and accrued liabilities.

Although certain operating expenses declined as a result of solid waste and E&P volume losses due to economic disruptions resulting from COVID-19, our operating cash flows were adversely impacted from the timing of vendor payments and payroll cycles as well as the payment of higher outstanding liabilities existing prior to the recent economic downturn.

This decrease was partially offset by an increase in accrued payroll tax liabilities of $29.2 million associated with our deferral of qualifying U.S.

payroll and other tax payments as permitted by the CARES Act, an increase in liabilities for cash incentive compensation of $19.1 million and an increase in accrued interest expense liabilities of $7.2 million due to the timing of interest payments for our outstanding senior note obligations.

We expect to defer approximately $45.0 million of U.S.

payroll and other tax payments in 2020 under the CARES Act, of which 50% will be remitted in 2021 and 50% remitted in 2022 .

As of September 30, 2020, we had a working capital surplus of $456.0 million, including cash and equivalents of $859.1 million.

Our working capital surplus increased $332.6 million from a working capital surplus of $123.4 million at December 31, 2019, including cash and equivalents of $326.7 million, due primarily to the impact of increased cash balances being partially offset by higher short-term contingent consideration liabilities, accrued liabilities and a reduction in accounts receivable.

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $21.6 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed subsequent to the three months ended March 31, 2020, earnings generated from the increased sales of recyclable commodities and renewal energy credits associated with the generation of landfill gas and an increase in the average Canadian dollar to U.S.

dollar currency exchange rate offsetting a decline in earnings at our E&P operations, as well as solid waste volume losses resulting from the COVID-19 pandemic.

2) Other long-term liabilities — Our increase in net cash provided by operating activities was favorably impacted by $19.3 million from other long-term liabilities, as changes in other long-term liabilities resulted in an increase to operating cash flows of $6.1 million for the three months ended March 31, 2021, compared to a decrease to operating cash flows of $13.2 million for the three months ended March 31, 2020.

The increase for the three months ended March 31, 2021 was primarily attributable to the receipt of funds associated with the eminent domain purchase of an operating facility that will be replaced with a newly constructed facility in a future period.

The decrease for the three months ended March 31, 2020 was primarily attributable to declines in our deferred compensation liabilities due to distributions and the cash settlement of equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016.

3) Prepaid expenses — Our increase in net cash provided by operating activities was favorably impacted by $15.7 million from prepaid expenses due primarily to a decrease in prepaid insurance and prepaid vendor payments.

Our prepaid expenses at March 31, 2021 include $49.7 million of prepaid income taxes.

4) Deferred revenue — Our increase in net cash provided by operating activities was favorably impacted by $9.8 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $8.9 million for the three months ended March 31, 2021, compared to a decrease to operating cash flows of $0.9 million for the three months ended March 31, 2020.

During the three months ended March 31, 2021, deferred revenue increased due to price increases on our advanced billed residential and commercial collection services, the timing of bi-monthly advance service billings and a landfill in our Southern segment receiving a $3.3 million advance payment for future disposal services.

During the three months ended March 31, 2020, our deferred revenue decreased due primarily to commercial collection customer closures resulting from the COVID-19 pandemic that began in March 2020 which reduced the amount of advance service billings sent to our customers.

5) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $14.9 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $8.4 million for the three months ended March 31, 2021, compared to an increase to operating cash flows of $23.3 million for the three months ended March 31, 2020.

The higher increase in deferred taxes in the prior year period was attributable to increased capital expenditures providing tax benefits resulting from accelerated tax depreciation.

6) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was unfavorably impacted by $10.8 million from accounts payable and accrued liabilities due primarily to the timing of interest payments and payroll cycles .

As of March 31, 2021, we had a working capital surplus of $397.1 million, including cash and equivalents of $743.5 million.

Our working capital surplus increased $17.5 million from a working capital surplus of $379.6 million at December 31, 2020 including cash and equivalents of $617.3 million, due primarily to the impact of increased cash balances, decreased accounts payable and decreased book overdraft being partially offset by an increase in the current portion of notes payable, higher deferred revenue and a reduction in accounts receivable.

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

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Investing Activities Cash Flows

Net cash used in investing activities decreased $235.6 million to $650.1 million for the nine months ended September 30, 2020, from $885.7 million for the nine months ended September 30, 2019.

Net cash used in investing activities decreased $33.0 million to $100.6 million for the three months ended March 31, 2021, from $133.6 million for the three months ended March 31, 2020.

The significant components of the decrease included the following:

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

2) A decrease in capital expenditures of $12.8 million due to decreases in vehicles for our collection operations and equipment for our disposal operations exceeding capital expenditures for landfill sites costs and expenditures for vehicles, containers and equipment purchased for operations acquired during, or subsequent to, the nine months ended September 30, 2019;

3) An increase from increased proceeds from the sale of property and equipment of $8.9 million;

4) An increase in capital expenditures for undeveloped landfill property of $35.1 million attributable to expenditures during the nine months ended September 30, 2020 for expansion land at certain existing landfill facilities exceeding expenditures during the nine months ended September 30, 2019 for the purchase of a greenfield landfill site in our Southern segment that will be developed into an operating location in the future.

1) A decrease in capital expenditures of $41.0 million due to decreases in vehicles for our collection operations and landfill site costs;

2) An increase in cash paid for acquisitions of $2.6 million.

Financing Activities Cash Flows

Net cash used in financing activities decreased $303.9 million to $4.1 million for the nine months ended September 30, 2020, from net cash used in financing activities of $308.0 million for the nine months ended September 30, 2019.

The significant components of the decrease included the following:

1) A decrease from the net change in long-term borrowings of $447.4 million (long-term borrowings increased $285.0 million during the nine months ended September 30, 2020 and decreased $162.4 million during the nine months ended September 30, 2019) due primarily to maintaining a portion of the proceeds from our 2050 Senior Notes in cash;

2) An increase in payments to repurchase our common shares of $105.7 million as we resumed our share repurchase activity during the nine months ended September 30, 2020;

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

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

5) An increase in cash dividends paid of $19.6 million due primarily to an increase in our quarterly dividend rate for the nine months ended September 30, 2020 to $0.185 per share, from $0.16 per share for the nine months ended September 30, 2019.

Net cash used in financing activities increased $792.9 million to net cash used in financing activities of $165.5 million for the three months ended March 31, 2021, from net cash provided by financing activities of $627.4 million for the three months ended March 31, 2020.

The significant components of the increase included the following:

1) An increase from the net change in long-term borrowings of $825.6 million (long-term borrowings decreased $5.4 million during the three months ended March 31, 2021 and increased $820.2 million during the three months ended March 31, 2020) due primarily to maintaining a portion of the proceeds from our 2050 Senior Notes offering in March 2020 in cash and borrowing on our credit facility in March 2020 to provide us with additional available cash reserves;

2) An increase in book overdraft of $13.0 million due primarily to maintaining additional funds in our bank accounts that are used to fund outstanding checks;

3) An increase in cash dividends paid of $5.9 million due primarily to an increase in our quarterly dividend rate for the three months ended March 31, 2021 to $0.205 per share, from $0.185 per share for the three months ended March 31, 2020;

4) A decrease in payments to repurchase our common shares of $39.7 million due to fewer shares repurchased;

5) A decrease in debt issuance costs of $10.9 million due to the prior year period including costs incurred for the issuance of our 2030 Senior Notes and 2050 Senior Notes;

6) A decrease in tax withholdings related to net share settlements of equity-based compensation of $4.6 million due to a decrease in the value of equity-based compensation awards vesting.

Our business is capital intensive.

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On July 23, 2020, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 13,144,773 of our common shares during the period of August 10, 2020 to August 9, 2021 or until such earlier time as the NCIB is completed or terminated at our option.

Shareholders may obtain a copy of our TSX Form 12 – Notice of Intention to Make a Normal Course Issuer Bid, without charge, by request directed to our Senior Vice President and Chief Financial Officer at (832) 442-2200.

Shareholders may obtain a copy of our TSX Form 12 – Notice of Intention to Make a Normal Course Issuer Bid, without charge, by request directed to our Executive Vice President and Chief Financial Officer at (832) 442-2200.

The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares and overall market conditions.

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In October 2020, our Board of Directors authorized an increase to our regular quarterly cash dividend of $0.02, from $0.185 to $0.205 per share.

Cash dividends of $145.9 million and $126.3 million were paid during the nine months ended September 30, 2020 and 2019, respectively.

Cash dividends of $53.9 million and $48.0 million were paid during the three months ended March 31, 2021 and 2020, respectively.

We cannot assure you as to the amounts or timing of future dividends.

We made $420.7 million in capital expenditures for property and equipment during the nine months ended September 30, 2020, and we expect to make total capital expenditures for property and equipment of approximately $575 million in 2020.

In addition, we made $66.8 million in capital expenditures for undeveloped landfill property during the nine months ended September 30, 2020 and may opportunistically make other capital expenditures for undeveloped landfill property in 2020.

We made $96.8 million in capital expenditures for property and equipment during the three months ended March 31, 2021, and we expect to make total capital expenditures for property and equipment of approximately $625 million in 2021.

We have funded and intend to fund the balance of our planned 2021 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement.

In addition, we may make substantial additional capital expenditures in acquiring land and municipal solid waste and E&P waste businesses.

In addition, we may make substantial additional capital expenditures in acquiring land and solid 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.

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Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.

As of September 30, 2020, $650.0 million under the term loan and $178.7 million under the revolving credit facility were outstanding under our Credit Agreement, exclusive of outstanding standby letters of credit of $125.9 million.

As of March 31, 2021, $650.0 million under the term loan and $204.0 million under the revolving credit facility were outstanding under our Credit Agreement, exclusive of outstanding standby letters of credit of $118.4 million.

We also have issued $6.8 million of letters of credit at March 31, 2021 under facilities other than the Credit Agreement.

Our Credit Agreement matures in March 2023.

On January 23, 2020, we completed an underwritten public offering of $600.0 million aggregate principal amount of 2.60% Senior Notes due 2030, or the 2030 Senior Notes.

The 2030 Senior Notes were issued under the Indenture, dated as of November 16, 2018, by and between the Company and U.S.

Bank National Association, as trustee, as supplemented by the Third Supplemental Indenture, dated as of January 23, 2020.

We will pay interest on the 2030 Senior Notes semi-annually in arrears and the 2030 Senior Notes will mature on February 1, 2030.

The 2030 Senior Notes are senior unsecured obligations, ranking equally in right of payment with our other existing and future unsubordinated debt and senior to any of our future subordinated debt.

The 2030 Senior Notes are not guaranteed by any of our subsidiaries.

On March 13, 2020, we completed an underwritten public offering of $500.0 million aggregate principal amount of 3.05% Senior Notes due 2050, or the 2050 Senior Notes.

The 2050 Senior Notes were issued under the Indenture, dated as of November 16, 2018, by and between the Company and U.S.

Bank National Association, as trustee, as supplemented by the Fourth Supplemental Indenture, dated as of March 13, 2020.

We will pay interest on the 2050 Senior Notes semi-annually in arrears and the 2050 Senior Notes will mature on April 1, 2050.

The 2050 Senior Notes are senior unsecured obligations, ranking equally in right of payment with our other existing and future unsubordinated debt and senior to any of our future subordinated debt.

The 2050 Senior Notes are not guaranteed by any of our subsidiaries.

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

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

In 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.

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

We are a well-known seasoned issuer with an effective shelf registration statement on Form S-3 filed with the SEC in May 2018, 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.

As of March 31, 2021, we had the following contractual obligations:

Payments Due by Period

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dollar base rate loans, Canadian-based bankers’ acceptances, and Canadian dollar prime rate loans.

At September 30, 2020, $175.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

At March 31, 2021, $200.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

LIBOR rate loans, which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 1.31% on such date) and $4.0 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of 1.61% on such date).

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Outstanding amounts on the term loan can be either base rate loans or LIBOR loans.

At September 30, 2020, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 1.35% on such date).

At March 31, 2021, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 1.31% on such date).

3) $100.0 million in principal payments due 2021 related to our 2021 Senior Notes.

The 2021 Senior Notes bear interest at a rate of 4.64%.

We have recorded this obligation in the payments due in 1 to 3 years category in the table above as we have the intent and ability to redeem the 2021 Senior Notes on April 1, 2021 using borrowings under our Credit Agreement.

We redeemed the 2021 Senior Notes on April 1, 2021.

4) $150.0 million in principal payments due 2021 related to our New 2021 Senior Notes.

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15) $38.0 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, 2020, and have maturity dates ranging from 2021 to 2036.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at March 31, 2021, and have maturity dates ranging from 2028 to 2036.

16) $9.8 million in principal payments related to our financing leases.

Our financing leases bear interest at a rate of 1.89% at March, 31 2021, and have a lease expiration date of 2026.

The following assumptions were made in calculating cash interest payments:

1) We calculated cash interest payments on the Credit Agreement using the LIBOR rate plus the applicable LIBOR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at September 30, 2020.

We assumed the Credit Agreement is paid off when it matures in March 2023.

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

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

We are party to operating lease agreements.

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

Contingent consideration payments include $67.0 million recorded as liabilities in our Condensed Consolidated Financial Statements at March 31, 2021, and $19.5 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.

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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, 2020, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 54.8 million gallons remaining to be purchased for a total of $138.2 million.

The current fuel purchase contracts expire on or before December 31, 2022.

These arrangements have not materially affected our financial position, results of operations or

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

At March 31, 2021, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 46.7 million gallons remaining to be purchased for a total of $116.6 million.

The current fuel purchase contracts expire on or before

December 31, 2023.

These arrangements have not materially affected our financial position, results of operations or liquidity during the three months ended March 31, 2021, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

We have obtained financial surety bonds, primarily to support our financial assurance needs and landfill and E&P operations.

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.181 billion and $1.081 billion at September 30, 2020 and December 31, 2019, respectively.

These arrangements have not materially affected our financial position, results of operations or liquidity during the nine months ended September 30, 2020, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.242 billion and $1.210 billion at March 31, 2021 and December 31, 2020, respectively.

From time to time, we evaluate our existing operations and their strategic importance to us.

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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, 2020 and 2019, at all of our landfills during the respective period, is shown below (tons in thousands):

Nine Months Ended September 30,

The disposal tonnage that we received in the three month periods ended March 31, 2021 and 2020, at all of our landfills during the respective period, is shown below (tons in thousands):

Three Months Ended March 31,

Owned operational landfills and landfills operated under life-of-site agreements

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Other companies may calculate adjusted free cash flow differently.

Our adjusted free cash flow for the nine month periods ended September 30, 2020 and 2019, are calculated as follows (amounts in thousands of U.S.

Nine Months Ended

September 30,

Our adjusted free cash flow for the three month periods ended March 31, 2021 and 2020, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Net cash provided by operating activities

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Capital expenditures for property and equipment

Distributions to noncontrolling interests

Cash received for divestitures (a)

Payment of contingent consideration recorded in earnings (a)

Transaction-related expenses (b)

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____________________

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

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

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

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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 attributable to Waste Connections, minus net loss attributable to noncontrolling interests, 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 define adjusted EBITDA as net income attributable to Waste Connections, plus or minus net income (loss) attributable to noncontrolling interests, 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.

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Other companies may calculate adjusted EBITDA differently.

Our adjusted EBITDA for the three and nine month periods ended September 30, 2020 and 2019, are calculated as follows (amounts in thousands of U.S.

Our adjusted EBITDA for the three month periods ended March 31, 2021 and 2020, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Nine Months Ended

September 30,

Net income attributable to Waste Connections

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Other companies may calculate these non-GAAP financial measures differently.

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and nine month periods ended September 30, 2020 and 2019, are calculated as follows (amounts in thousands of U.S.

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three month periods ended March 31, 2021 and 2020, are calculated as follows (amounts in thousands of U.S.

dollars, except per share amounts):

Three Months Ended

Nine Months Ended

September 30,

Reported net income attributable to Waste Connections

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Tax effect (e)

Tax items (f)

Adjusted net income attributable to Waste Connections

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

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

Other than volatility in fuel prices, third party brokerage and labor costs in certain markets, inflation has not materially affected our operations in recent years.

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

However, competitive pressures or delays in the timing of rate increases under our contracts, particularly amid the economic impact of the COVID-19 pandemic, may

require us to absorb at least part of these cost increases, especially if cost increases exceed the average rate of inflation.

However, competitive pressures or delays in the timing of rate increases under our contracts, particularly amid the economic impact of the COVID-19 pandemic, 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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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis