What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-05 compared with 2021-04-29 · 356 added, 207 removed, 666 unchanged (46% of the section changed)

6 unchanged sentences

Cash and equivalents

Accounts receivable, net of allowance for credit losses of $ 18,970 and $ 19,380 at March 31, 2021 and December 31, 2020, respectively

Accounts receivable, net of allowance for credit losses of $ 19,527 and $ 19,380 at June 30, 2021 and December 31, 2020, respectively

Prepaid expenses and other current assets

24 unchanged sentences

Common shares:

262,564,371 shares issued and 262,491,505 shares outstanding at March 31, 2021;

260,506,316 shares issued and 260,433,450 shares outstanding at June 30, 2021;

262,899,174 shares issued and 262,824,990 shares outstanding at December 31, 2020

2 unchanged sentences

Treasury shares:

72,866 and 74,184 shares at March 31, 2021 and December 31, 2020, respectively

72,866 and 74,184 shares at June 30, 2021 and December 31, 2020, respectively

Retained earnings

3 unchanged sentences

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)

(In thousands of U.S.

dollars, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

3 unchanged sentences

Impairments and other operating items

Operating income

Operating income (loss)

Interest expense

1 unchanged sentence

Other income (expense), net

Income before income tax provision

Income tax provision

Net loss attributable to noncontrolling interests

Net income attributable to Waste Connections

Earnings per common share attributable to Waste Connections’ common shareholders:

Income (loss) before income tax provision

Income tax (provision) benefit

Net income (loss)

Net loss (income) attributable to noncontrolling interests

Net income (loss) attributable to Waste Connections

Earnings (loss) per common share attributable to Waste Connections’ common shareholders:

Shares used in the per share calculations:

4 unchanged sentences

(In thousands of U.S.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

Other comprehensive income (loss), before tax:

6 unchanged sentences

Comprehensive income (loss)

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss (income) attributable to noncontrolling interests

Comprehensive income (loss) attributable to Waste Connections

24 unchanged sentences

Balances at March 31, 2021

Vesting of restricted share units

Fair value adjustment for common shares in deferred compensation plan exchanged for other investment options

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Repurchase of common shares

( 2,079,806 )

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Balances at June 30, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

26 unchanged sentences

Balances at March 31, 2020

Vesting of restricted share units

Restricted share units released from deferred compensation plan

Tax withholdings related to net share settlements of equity-based compensation

Equity-based compensation

Exercise of warrants

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

Changes in fair value of cash flow hedges, net of taxes

Foreign currency translation adjustment

Balances at June 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands of U.S.

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Loss on disposal of assets and impairments

11 unchanged sentences

Capital expenditures for property and equipment

Capital expenditures for undeveloped landfill property

Proceeds from disposal of assets

3 unchanged sentences

Principal payments on notes payable and long-term debt

( 1,484,118 )

Payment of contingent consideration recorded at acquisition date

17 unchanged sentences

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc.

and its subsidiaries (the “Company”) for the three month periods ended March 31, 2021 and 2020.

In the opinion of management, the accompanying balance sheets and related interim statements of net income, comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items, necessary for their fair statement in conformity with U.S.

and its subsidiaries (the “Company”) for the three and six month periods ended June 30, 2021 and 2020.

In the opinion of management, the accompanying balance sheets and related interim statements of net income (loss), comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items, necessary for their fair statement in conformity with U.S.

generally accepted accounting principles (“GAAP”).

3 unchanged sentences

Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements.

The challenges posed by the pandemic of coronavirus disease 2019 (“COVID-19”) on the global economy persisted through the first quarter of 2021 and continue to impact the demand for the Company’s services to varying degrees and in varying ways across the U.S.

and Canada and across a variety of lines of business, including commercial collection and solid waste and non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services.

In response to the COVID-19 pandemic, national and local governments around the world have instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing.

In some markets where a portion of these measures have been curtailed, the impact on demand for the Company’s services has decreased as activity levels have increased.

The impact of the COVID-19 pandemic on the Company’s 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, 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, all of which are uncertain and cannot be predicted at this time.

Interim results are not necessarily indicative of results for a full year.

10 unchanged sentences

Gains and losses from foreign currency transactions are included in earnings for the period.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

NEW ACCOUNTING STANDARDS

9 unchanged sentences

Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

In March 2020, the FASB issued guidance to provide temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

In March 2020, the FASB issued guidance to provide temporary optional expedients and exceptions to the guidance in GAAP on

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

One-week and two-month U.S.

12 unchanged sentences

The Company is currently assessing the potential impact of implementing this new guidance on its consolidated financial statements .

The Company had a combined $ 1,151,000 of U.S.

based LIBOR loans as of June 30, 2021.

The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of June 30, 2021, the impact to annual interest expense would have been an increase of less than $ 1,000 .

To the extent that the transition away from the use of LIBOR might affect the Company’s ability to maintain cash ‎flow hedge accounting as described in Note 12, the relief is expected to permit the Company to maintain that cash flow ‎hedge accounting.

8 unchanged sentences

and (6) conforming amendments for foreign private issuers.

The amended rules were posted to the Federal

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The amended rules were posted to the Federal Register on January 11, 2021 and became effective February 10, 2021.

Registrants are required to comply with the new rules beginning with the first fiscal year ending on or after August 9, 2021.

2 unchanged sentences

As disclosed within Note 11 to the financial statements, segment information reported in the Company’s prior year has been reclassified to conform to the 2021 presentation.

IMPAIRMENTS OF PROPERTY, EQUIPMENT, GOODWILL AND INTANGIBLE ASSETS

Property, equipment and finite-lived intangible assets are carried on the Company’s consolidated financial statements based on their cost less accumulated depreciation or amortization.

Finite-lived intangible assets consist of long-term franchise agreements, contracts, customer lists, permits and other agreements.

The recoverability of these assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Typical indicators that an asset may be impaired include, but are not limited to, the following:

● a significant adverse change in legal factors or in the business climate;

● an adverse action or assessment by a regulator;

● a more likely than not expectation that a segment or a significant portion thereof will be sold;

● the testing for recoverability of a significant asset group within a segment;

● current period or expected future operating cash flow losses.

If any of these or other indicators occur, a test of recoverability is performed by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows.

If the carrying value is in excess of the undiscounted expected future cash flows, impairment is measured by comparing the fair value of the asset to its carrying value.

Fair value is determined by an internally developed discounted projected cash flow analysis of the asset.

Cash flow projections are sometimes based on a group of assets, rather than a single asset.

If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether an impairment has occurred for the group of assets for which the projected cash flows can be identified.

If the fair value of an asset is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs.

Several impairment indicators are beyond the Company’s control, and whether or not they will occur cannot be predicted with any certainty.

Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized.

There are other considerations for impairments of landfills, as described below.

There are certain indicators listed above that require significant judgment and understanding of the waste industry when applied to landfill development or expansion projects.

A regulator or court may deny or overturn a landfill development or landfill expansion permit application before the development or expansion permit is ultimately granted.

Management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace.

Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.

Goodwill and indefinite-lived intangible assets are tested for impairment on at least an annual basis in the fourth quarter of the year.

In addition, the Company evaluates its reporting units for impairment if events or circumstances similar to the indicators listed above change between annual tests indicating a possible impairment.

Through June 30, 2020, the Company’s reporting units consisted of its five geographic solid waste operating segments and its non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services segment.

As of July 2020, the Company combined all operations of the E&P segment into the Southern segment, based on the Company’s determination that the two operating segments met the aggregation criteria, and eliminated the E&P segment.

The Company estimates the fair value of each of its reporting units using discounted cash flow analyses.

Discounted cash flow analyses require significant assumptions and estimates about the future operations of each reporting unit and the future discrete cash flows related to each indefinite-lived intangible asset.

Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows, growth rates and income tax rates.

The Company compares the fair value of each reporting unit with the carrying value of the net assets assigned to each reporting unit.

If the fair value of a reporting unit is greater than the carrying value of the net assets, including goodwill, assigned to the reporting unit, then no impairment results.

If the fair value is less than its carrying value, an impairment charge is recorded for the amount by which the carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

In testing indefinite-lived intangible assets for impairment, the Company compares the estimated fair value of each indefinite-lived intangible asset to its carrying value.

If the fair value of the indefinite-lived

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

intangible asset is less than its carrying value, an impairment charge would be recorded to earnings in the Company’s Condensed Consolidated Statements of Net Income (Loss).

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

Crude oil and natural gas prices historically have been volatile.

Macroeconomic and geopolitical conditions, including a significant decline in oil prices occurring in 2020 driven by both surplus production and supply, as well as the decrease in demand caused by factors including the coronavirus disease 2019 (“COVID-19”) pandemic, resulted in decreased levels of oil and natural gas exploration and production activity and a corresponding decrease in demand for the Company’s E&P waste services in 2020 and 2021.

During the three months ended June 30, 2020, total revenue for the Company’s E&P segment declined 43.3 %, compared to the prior year period, on oil rig count declines of over 60 % 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 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 was uncertainty regarding future demand for oil and related services, as noted by several energy companies during 2020, many of whom are customers of the Company’s E&P operations.

These companies wrote 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 had a significant impact on the investment and operating plans of the Company’s E&P waste customers in the basins where the Company operates.

The decrease in E&P activity, together with market expectations of a likely slow recovery in oil prices, reduced the expected future period cash flows of the Company’s E&P operations.

Based on these events, the Company concluded that a triggering event occurred which required the Company to perform an impairment test of the property and equipment and intangible assets of its E&P operations as of June 30, 2020 using July 2020 industry projections for drilling activity by basin as the basis for expectations about future activity.

Based upon the results of the impairment test, the Company concluded that the carrying value exceeded the projected undiscounted cash flows of four E&P landfills.

The next step was to calculate the fair value of these four landfills using an income approach employing a discounted cash flow (DCF) model over the lesser of 40 years or the remaining life of each landfill.

Additional key assumptions used in the DCF model included a discount rate of 12 % applied to the cash flows, annual revenue projections based on E&P waste resulting from projected levels of oil and natural gas E&P activity during the forecast period at each location, gross margins based on estimated operating expense requirements during the forecast period, estimated capital expenditures over the forecast period and income taxes based on the estimated federal and state income tax rates applicable during the cash flow periods, all of which were classified as Level 3 in the fair value hierarchy.

For each of the four landfills, the carrying value exceeded the calculated discounted fair value, resulting in the recording of an impairment charge of $ 417,384 to Impairments and other operating items in the Condensed Consolidated Statements of Net Income (Loss) during the three months ended June 30, 2020.

The four landfills had $ 0 of intangible assets at June 30, 2020;

therefore, no impairment charge was attributable to intangible assets.

The impairment charge reduced the carrying value of property and equipment by $ 417,384 .

If the estimated annual cash flows in the DCF model for each asset or asset group tested was changed by 10%, the resulting impairment charge would change by approximately $ 3,000 .

The aforementioned impairment charges were partially offset by a $ 4,145 adjustment to reduce the fair value of an amount payable in 2021 under a liability-classified contingent consideration arrangement calculated on future earnings and cash flows associated with the acquisition of an E&P business in 2014.

Based upon the outlook for E&P waste services in the market where the acquired business operates, the payment of the contingent consideration was deemed unlikely and the carrying value was reduced to $ 0 as of June 30, 2020, resulting in a credit to Impairments and other operating items in the Condensed Consolidated Statements of Net Income (Loss).

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company’s operations primarily consist of providing non-hazardous waste collection, transfer, disposal and recycling services, E&P services, and intermodal services.

The following table disaggregates the Company’s revenues by service line for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Industrial and construction roll off

4 unchanged sentences

In the event that the Company bills for services in advance of performance, it recognizes deferred revenue for the amount billed and subsequently recognizes revenue at the time the service is provided.

Substantially all of the deferred revenue recorded as of December 31, 2020 was recognized as revenue during the three months ended March 31, 2021 when the service was performed.

Substantially all of the deferred revenue recorded as of March 31, 2021 was recognized as revenue during the three months ended June 30, 2021 when the service was performed.

See Note 11 for additional information regarding revenue by reportable segment.

2 unchanged sentences

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity would have recognized is one year or less.

The Company had $ 18,954 and $ 19,669 of deferred sales incentives at March 31, 2021 and December 31, 2020, respectively.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company had $ 18,954 and $ 19,669 of deferred sales incentives at June 30, 2021 and December 31, 2020, respectively.

ACCOUNTS RECEIVABLE

2 unchanged sentences

The allowance for credit losses is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics.

The Company monitors the collectability of its trade receivables as one overall pool due to all trade receivables having similar risk characteristics.

The Company monitors the collectability of its trade receivables as one overall pool due

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

to all trade receivables having similar risk characteristics.

The Company estimates its allowance for credit losses based on historical collection trends, the age of outstanding receivables, geographical location of the customer, existing economic conditions and reasonable forecasts.

1 unchanged sentence

Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Three Months Ended March 31,

Six Months Ended June 30,

Beginning balance

5 unchanged sentences

LANDFILL ACCOUNTING

At March 31, 2021, the Company’s landfills consisted of 82 owned landfills, five landfills operated under life-of-site operating agreements, four landfills operated under limited-term operating agreements and one development stage landfill.

The Company’s landfills had site costs with a net book value of $ 2,625,877 at March 31, 2021.

At June 30, 2021, the Company’s landfills consisted of 82 owned landfills, five landfills operated under life-of-site operating agreements, four landfills operated under limited-term operating agreements and one development stage landfill.

The Company’s landfills had site costs with a net book value of $ 2,602,084 at June 30, 2021.

For the Company’s landfills operated under limited-term operating agreements and life-of-site operating agreements, the owner of the property (generally a municipality) usually owns the permit and the Company operates the landfill for a contracted term.

7 unchanged sentences

Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace.

Based on remaining permitted capacity as of June 30, 2021, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 28 years .

As of June 30, 2021, the Company is seeking to expand permitted capacity at eleven of its owned landfills and three landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is approximately 32 years .

The estimated remaining lives of the Company’s owned landfills and

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Based on remaining permitted capacity as of March 31, 2021, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 28 years .

As of March 31, 2021, the Company is seeking to expand permitted capacity at nine of its owned landfills and three landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

The estimated remaining lives of the Company’s owned landfills and landfills operated under life-of-site operating agreements range from 1 to 283 years , with approximately 90 % of the projected annual disposal volume from landfills with remaining lives of less than 70 years .

During the three months ended March 31, 2021 and 2020, the Company expensed $ 46,137 and $ 48,737 , respectively, or an average of $ 4.53 and $ 4.49 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

landfills operated under life-of-site operating agreements range from 1 to 283 years , with approximately 90 % of the projected annual disposal volume from landfills with remaining lives of less than 70 years .

During the six months ended June 30, 2021 and 2020, the Company expensed $ 102,702 and $ 96,925 , respectively, or an average of $ 4.54 and $ 4.50 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

The Company reserves for estimated final capping, closure and post-closure maintenance obligations at the landfills it owns and landfills it operates under life-of-site operating agreements.

6 unchanged sentences

Interest is accreted on the recorded liability using the corresponding discount rate.

During the three months ended March 31, 2021 and 2020, the Company expensed $ 3,655 and $ 3,849 , respectively, or an average of $ 0.36 and $ 0.36 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2020 to March 31, 2021:

During the six months ended June 30, 2021 and 2020, the Company expensed $ 7,285 and $ 7,505 , respectively, or an average of $ 0.32 and $ 0.35 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2020 to June 30, 2021:

Final capping, closure and post-closure liability at December 31, 2020

3 unchanged sentences

Foreign currency translation adjustment

Final capping, closure and post-closure liability at March 31, 2021

Liability adjustments of $ 7,134 for the three months ended March 31, 2021, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

The final capping, closure and post-closure liability is included in Other long-term liabilities in the Condensed

Final capping, closure and post-closure liability at June 30, 2021

Liability adjustments of $ 10,328 for the six months ended June 30, 2021, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

The final capping, closure and post-closure liability is included in Other long-term liabilities in the Condensed Consolidated Balance Sheets.

The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

At June 30, 2021 and December 31, 2020, $ 12,015 and $ 12,533 , respectively, of the Company’s restricted cash balance and $ 56,548 and $ 54,833 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

WASTE CONNECTIONS, INC.

2 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Consolidated Balance Sheets.

The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

At March 31, 2021 and December 31, 2020, $ 14,134 and $ 12,533 , respectively, of the Company’s restricted cash balance and $ 53,924 and $ 54,833 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

INTANGIBLE ASSETS, NET

Intangible assets, exclusive of goodwill, consisted of the following at March 31, 2021:

Intangible assets, exclusive of goodwill, consisted of the following at June 30, 2021:

Finite-lived intangible assets:

17 unchanged sentences

Intangible assets, exclusive of goodwill

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Estimated future amortization expense for the next five years relating to finite-lived intangible assets is as follows:

4 unchanged sentences

For the year ending December 31, 2025

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

LONG-TERM DEBT

The following table presents the Company’s long-term debt as of March 31, 2021 and December 31, 2020:

The following table presents the Company’s long-term debt as of June 30, 2021 and December 31, 2020:

Revolver under Credit Agreement, bearing interest ranging from 1.30 % to 1.61 % (a)

17 unchanged sentences

____________________

(a) Interest rates represent the interest rates in effect at March 31, 2021 .

(b) The Company redeemed the 4.64 % Senior Notes due 2021 (the “2021 Senior Notes”) on April 1, 2021.

(c) The Company has recorded the 2.39 % Senior Notes due 2021 (the “New 2021 Senior Notes”) in long-term debt in the table above as the Company has the intent and ability to redeem the New 2021 Senior Notes on June 1, 2021 using borrowings under the Credit Agreement.

(a) Interest rates represent the interest rates in effect at June 30, 2021 .

(b) All of the outstanding 4.64 % Senior Notes due 2021 were redeemed by the Company on April 1, 2021 .

WASTE CONNECTIONS, INC.

19 unchanged sentences

based LIBOR loan

In addition to the $ 118,387 of letters of credit at March 31, 2021 issued under the Credit Agreement, the Company has issued letters of credit totaling $ 6,796 under facilities other than the Credit Agreement.

In addition to the $ 114,445 of letters of credit at June 30, 2021 issued under the Credit Agreement, the Company has issued letters of credit totaling $ 7,157 under facilities other than the Credit Agreement.

On March 21, 2018, the Company and the lenders named therein entered into an Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified and as in effect immediately prior to the Closing Date (as defined below), the “Credit Agreement”), pursuant to which the lenders made loans and other extensions of credit to the Company thereunder.

On July 30, 2021 (the “Closing Date”), the Company amended and restated the Credit Agreement in its entirety pursuant to a Second Amended and Restated Revolving Credit and Term Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “2021 Credit Agreement”) entered into by the Company, as borrower, Bank of America, N.A., acting through its ‎Canada Branch, as the global agent, the swing line lender, and a letter of credit issuer, Bank of ‎America, N.A., as the U.S.

agent and a letter of credit issuer, the other lenders ‎named therein ‎(the “Lenders”) ‎and any other financial institutions from time to time party thereto.

The 2021 Credit Agreement has a scheduled maturity date of July 30, 2026 , which may be extended further upon agreement by the Lenders with respect to their respective commitments and credit extensions outstanding.

Pursuant to the terms and conditions of the 2021 Credit Agreement, the Lenders committed to providing a ‎$ 2,500,000 credit facility to the Company, consisting of (i) revolving advances up to an aggregate principal amount of $ 1,850,000 at any one time ‎outstanding (representing an increase of $ 287,500 from the Credit Agreement), and (ii) a term loan in an aggregate principal amount of $ 650,000 , which term loan was fully drawn as of the Closing Date (with existing term loans outstanding under the Credit Agreement immediately prior to the Closing Date continued and now outstanding under and governed by the terms of the 2021 Credit Agreement).

As part of the aggregate commitments under the revolving advances, the 2021 Credit Agreement provides for letters of credit to be issued at the request of the Company in an aggregate amount not to exceed $ 320,000 and for swing line loans to be issued at the request of the Company in an aggregate amount not to exceed the lesser of $ 100,000 and the aggregate commitments under the revolving advances.

This swing line sublimit is part of, and not in addition to, the aggregate commitments under the revolving advances.

Existing letters of credit in place under the Credit Agreement immediately prior to the Closing Date are continued and now deemed issued under and governed by the terms of the 2021 Credit Agreement.

Subject to certain specified conditions and additional deliveries, the

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Company has the option to request increases in the aggregate commitments for revolving advances and one or more additional term loans, provided that (i) the aggregate principal amount of such requests does not exceed $ 500,000 and (ii) the aggregate principal amount of commitments and term loans under the credit facility does not exceed $ 3,000,000 .

As of the Closing Date, there are no commitments by Lenders for any such increases in aggregate commitments for revolving advances or additional term loans described in the preceding sentence.

Advances are available under the 2021 Credit Agreement in U.S.

dollars and Canadian dollars.

Interest accrues on the term loan at a LIBOR rate or a base rate, at the Company’s option, plus an applicable margin.

Interest accrues on revolving advances, at the Company’s option, (i) at a LIBOR rate or a base rate for U.S.

dollar borrowings, plus an applicable margin, and (ii) at the Canadian prime rate for Canadian dollar borrowings, plus an applicable margin.

Canadian dollar borrowings are also available by way of bankers' acceptances or BA equivalent notes, subject to the payment of a drawing fee.

The fees for letters of credit in U.S.

dollars and Canadian dollars are also based on the applicable margin.

The applicable margin used in connection with interest rates and fees is based on the debt rating of the Company’s public non-credit-enhanced, senior unsecured long-term debt (the “Debt ‎Rating”)‎.

The applicable margin for LIBOR rate loans, drawing fees for bankers’ acceptances, BA equivalent notes and letter of credit fees ranges from ‎ 0.750 % to 1.250 %‎, and the applicable margin for U.S.

base rate loans, Canadian prime rate loans and swing line loans ranges from 0.00 % to 0.250 %.

The Company will also pay a fee based on the Debt Rating on the actual daily unused amount of the aggregate revolving commitments ranging from 0.065 % to 0.150 %.‎ The 2021 Credit Agreement contains hardwired mechanics for the replacement of LIBOR, including (1) mechanics to transition to a rate based upon the secured overnight financing rate (“SOFR”) published by the Federal Reserve Bank of New York or a successor administrator on its website (or a successor source) upon the earlier of (x) LIBOR’s cessation or loss of representativeness, (y) June 30, 2023 and (z) the effectiveness of an early opt-in election by the Company and the agents subject to certain terms and (2) mechanics to transition to an alternate benchmark rate giving due consideration to any evolving or then-prevailing market conventions for U.S.

dollar-denominated syndicated credit facilities at such time upon the occurrence of certain subsequent transition events, the unavailability of SOFR-based alternatives or the effectiveness of an early opt-in election by the Company and the agents subject to certain terms.

The borrowings under the 2021 Credit Agreement are unsecured and there are no subsidiary guarantors under the 2021 Credit Agreement‎.

The 2021 Credit Agreement contains customary representations, warranties, covenants and events of default, including, among others, a change of control event of default and limitations on the incurrence of indebtedness and liens, new lines of business, mergers, transactions with affiliates and burdensome agreements.

During the continuance of an event of default, the Lenders may take a number of actions, including, among others, declaring the entire amount then outstanding under the 2021 Credit Agreement to be due and payable.

The 2021 Credit Agreement includes a financial covenant limiting, as of the last day of each fiscal quarter, the ratio of (a) Consolidated Total Funded Debt (as defined in the 2021 Credit Agreement) as of such date to (b) Consolidated EBITDA (as defined in the 2021 Credit Agreement), measured for the preceding 12 months, to not more than 3.75 to 1.00 (or 4.25 to 1.00 during material acquisition periods, subject to certain limitations) .

As of June 30, 2021, the Company was in compliance with its financial covenants under the Credit Agreement and, if it had been in place as of that date, the 2021 Credit Agreement.

SEGMENT REPORTING

The Company’s revenues are generated from the collection, transfer, recycling and disposal of non-hazardous solid waste and the treatment, recovery and disposal of non-hazardous E&P waste.

No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

No single contract or customer accounted

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

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

8 unchanged sentences

the Company’s Central segment services customers located in Arizona, Colorado, southern Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming;

and the Company’s Canada

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

and the Company’s Canada segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan.

The Company’s Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA.

3 unchanged sentences

A reconciliation of segment EBITDA to Income before income tax provision is included at the end of this Note 11.

Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2021 and 2020, is shown in the following tables:

Summarized financial information concerning the Company’s reportable segments for the three and six months ended June 30, 2021 and 2020, is shown in the following tables:

Three Months Ended

March 31, 2021

June 30, 2021

Corporate (a)

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Three Months Ended

March 31, 2020

June 30, 2020

Corporate (a)

Six Months Ended

June 30, 2021

Corporate (a)

Six Months Ended

June 30, 2020

Corporate (a)

____________________

8 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Total assets for each of the Company’s reportable segments at March 31, 2021 and December 31, 2020, were as follows:

The following tables show changes in goodwill during the three months ended March 31, 2021 and 2020, by reportable segment:

Total assets for each of the Company’s reportable segments at June 30, 2021 and December 31, 2020, were as follows:

The following tables show changes in goodwill during the six months ended June 30, 2021 and 2020, by reportable segment:

Balance as of December 31, 2020

2 unchanged sentences

Impact of changes in foreign currency

Balance as of March 31, 2021

Balance as of June 30, 2021

Balance as of December 31, 2019

2 unchanged sentences

Impact of changes in foreign currency

Balance as of March 31, 2020

A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income before income tax provision in the Condensed Consolidated Statements of Net Income is as follows:

Balance as of June 30, 2020

A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income (loss) before income tax provision in the Condensed Consolidated Statements of Net Income (Loss) is as follows:

Three Months Ended

Southern segment EBITDA

Six Months Ended

Eastern segment EBITDA

Southern segment EBITDA

Western segment EBITDA

8 unchanged sentences

Other income (expense), net

Income before income tax provision

Income (loss) before income tax provision

WASTE CONNECTIONS, INC.

9 unchanged sentences

The Company’s strategy to achieve that objective involves entering into interest rate swaps.

The interest rate swaps outstanding at March 31, 2021 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

At March 31, 2021, the Company’s derivative instruments included six interest rate swap agreements as follows:

The interest rate swaps outstanding at June 30, 2021 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

At June 30, 2021, the Company’s derivative instruments included six interest rate swap agreements as follows:

Interest Rate

12 unchanged sentences

* Plus applicable margin.

The fair values of derivative instruments designated as cash flow hedges as of March 31, 2021, were as follows:

The fair values of derivative instruments designated as cash flow hedges as of June 30, 2021, were as follows:

Derivatives Designated as Cash

9 unchanged sentences

____________________

(a) Represents the estimated amount of the existing unrealized losses on interest rate swaps as of March 31, 2021 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

(a) Represents the estimated amount of the existing unrealized losses on interest rate swaps as of June 30, 2021 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

The actual amounts reclassified into earnings are dependent on future movements in interest rates.

14 unchanged sentences

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three months ended March 31, 2021 and 2020:

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and six months ended June 30, 2021 and 2020:

Amount of (Gain) or Loss Reclassified

1 unchanged sentence

Amount of Gain or (Loss) Recognized

Net Income (Loss)

from AOCIL into Earnings,

6 unchanged sentences

Interest expense

Amount of (Gain) or Loss Reclassified

Designated as Cash

Amount of Gain or (Loss) Recognized

Net Income (Loss)

from AOCIL into Earnings,

as AOCIL on Derivatives, Net of Tax (a)

Classification

Net of Tax (b)

Six Months Ended

Interest rate swaps

Interest expense

____________________

5 unchanged sentences

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted cash and investments, trade payables, debt instruments, contingent consideration obligations and interest rate swaps.

As of March 31, 2021 and December 31, 2020, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of March 31, 2021 and December 31, 2020, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2 within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of March 31, 2021 and December 31, 2020, are as follows:

As of June 30, 2021 and December 31, 2020, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of June 30, 2021 and December 31, 2020, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2021 and December 31, 2020, are as follows:

Carrying Value at

15 unchanged sentences

Fair value inputs include third-party calculations of the market interest rate of notes with similar ratings in similar industries over the remaining note terms.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

For details on the fair value of the Company’s interest rate swaps, restricted cash and investments and contingent consideration, refer to Note 15.

NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s shareholders for the three months ended March 31, 2021 and 2020:

NET INCOME (LOSS) PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income (loss) per common share attributable to the Company’s shareholders for the three and six months ended June 30, 2021 and 2020:

Three Months Ended

Net income attributable to Waste Connections for basic and diluted earnings per share

Six Months Ended

Net income (loss) attributable to Waste Connections for basic and diluted earnings per share

Basic shares outstanding

5 unchanged sentences

Level 1, defined as quoted market prices in active markets for identical assets or liabilities;

Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 2, defined as inputs other than Level 1 that

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted cash and investments.

At March 31, 2021 and December 31, 2020, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

At June 30, 2021 and December 31, 2020, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts.

4 unchanged sentences

government and agency securities and Canadian bankers’ acceptance notes.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020, were as follows:

Fair Value Measurement at March 31, 2021 Using

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020, were as follows:

Fair Value Measurement at June 30, 2021 Using

Quoted Prices in

11 unchanged sentences

Contingent consideration

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

Beginning balance

Contingent consideration recorded at acquisition date

Payment of contingent consideration recorded at acquisition date

4 unchanged sentences

Ending balance

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) includes changes in the fair value of interest rate swaps that qualify for hedge accounting.

The components of other comprehensive income (loss) and related tax effects for the three months ended March 31, 2021 and 2020 are as follows:

Three Months Ended March 31, 2021

The components of other comprehensive income (loss) and related tax effects for the three and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended June 30, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

A rollforward of the amounts included in AOCIL, net of taxes, for the three months ended March 31, 2021 and 2020, is as follows:

Six Months Ended June 30, 2021

Interest rate swap amounts reclassified into interest expense

Changes in fair value of interest rate swaps

Foreign currency translation adjustment

Six Months Ended June 30, 2020

Interest rate swap amounts reclassified into interest expense

Changes in fair value of interest rate swaps

Foreign currency translation adjustment

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

A rollforward of the amounts included in AOCIL, net of taxes, for the six months ended June 30, 2021 and 2020, is as follows:

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at March 31, 2021

Balance at June 30, 2021

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at March 31, 2020

Balance at June 30, 2020

See Note 12 for further discussion on the Company’s derivative instruments.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

SHAREHOLDERS’ EQUITY

1 unchanged sentence

Restricted Share Units

A summary of activity related to restricted share units (“RSUs”) during the three-month period ended March 31, 2021, is presented below:

A summary of activity related to restricted share units (“RSUs”) during the six-month period ended June 30, 2021, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at March 31, 2021

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the three-month period ended March 31, 2021 was $ 97.56 .

Outstanding at June 30, 2021

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the six-month period ended June 30, 2021 was $ 97.81 .

Recipients of the Company’s RSUs who participate in the Company’s Nonqualified Deferred Compensation Plan may have elected in years prior to 2015 to defer some or all of their RSUs as they vest until a specified date or dates they choose.

At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs.

At March 31, 2021 and 2020, the Company had 158,610 and 190,201 vested deferred RSUs outstanding, respectively.

At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs.

At June 30, 2021 and 2020, the Company had 101,221 and 186,932 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

A summary of activity related to performance-based restricted share units (“PSUs”) during the three-month period ended March 31, 2021, is presented below:

A summary of activity related to performance-based restricted share units (“PSUs”) during the six-month period ended June 30, 2021, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at March 31, 2021

During the three months ended March 31, 2021, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2023 .

Outstanding at June 30, 2021

During the six months ended June 30, 2021, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2023 .

The Compensation Committee will determine the achievement of performance results and corresponding vesting of PSUs for each performance period.

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the three-month period ended March 31, 2021 was $ 96.99 .

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the six-month period ended June 30, 2021 was $ 96.99 .

Deferred Share Units

A summary of activity related to deferred share units (“DSUs”) during the three-month period ended March 31, 2021, is presented below:

A summary of activity related to deferred share units (“DSUs”) during the six-month period ended June 30, 2021, is presented below:

Vested Shares

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Outstanding at June 30, 2021

The DSUs consist of a combination of DSU grants outstanding under the Progressive Waste share-based compensation plans that were continued by the Company following the Progressive Waste acquisition and DSUs granted by the Company since the Progressive Waste acquisition.

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the three-month period ended March 31, 2021 was $ 99.80 .

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the six-month period ended June 30, 2021 was $ 99.80 .

Other Restricted Share Units

RSU grants outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting.

A summary of activity related to Progressive Waste RSUs during the three-month period ended March 31, 2021, is presented below:

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

A summary of activity related to Progressive Waste RSUs during the six-month period ended June 30, 2021, is presented below:

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Outstanding at June 30, 2021

No RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

2 unchanged sentences

Share based options outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting.

A summary of activity related to Progressive Waste share based options during the three-month period ended March 31, 2021, is presented below:

A summary of activity related to Progressive Waste share based options during the six-month period ended June 30, 2021, is presented below:

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Outstanding at June 30, 2021

No share based options under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

2 unchanged sentences

On May 15, 2020, the Company’s shareholders approved the 2020 Employee Share Purchase Plan (the “ESPP”).

Under the ESPP, qualified employees may elect to have payroll deductions withheld from their eligible compensation on

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

each payroll date in amounts equal to or greater than one percent (1%) but not in excess of ten percent (10%) of eligible compensation in order to purchase the Company’s common shares under certain terms and subject to certain restrictions set forth in the ESPP.

Under the ESPP, qualified employees may elect to have payroll deductions withheld from their eligible compensation on each payroll date in amounts equal to or greater than one percent (1%) but not in excess of ten percent (10%) of eligible compensation in order to purchase the Company’s common shares under certain terms and subject to certain restrictions set forth in the ESPP.

The exercise price is equal to 95 % of the closing price of the Company’s common shares on the last day of the relevant offering period, subject to certain restrictions.

The maximum number of shares that may be issued under the ESPP is 1,000,000 .

As of March 31, 2021, none of the Company’s common shares have been purchased under the ESPP.

As of June 30, 2021, none of the Company’s common shares have been purchased under the ESPP.

Normal Course Issuer Bid

3 unchanged sentences

Under the NCIB, the Company may make share repurchases only in the open market, including on the New York Stock Exchange (the “NYSE”), the TSX, and/or alternative Canadian trading systems, at the prevailing market price at the time of the transaction.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

In accordance with TSX rules, any daily repurchases made through the TSX and alternative Canadian trading systems is limited to a maximum of 112,638 common shares, which represents 25% of the average daily trading volume on the TSX of 450,555 common shares for the period from February 1, 2020 to July 31, 2020.

3 unchanged sentences

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

For the three months ended March 31, 2021, the Company repurchased 666,184 common shares pursuant to the NCIB at an aggregate cost of $ 65,999 .

During the three months ended March 31, 2020, the Company repurchased 1,271,977 common shares pursuant to the NCIB at an aggregate cost of $ 105,654 .

As of March 31, 2021, the remaining maximum number of shares available for repurchase under the current NCIB was 12,478,589 .

For the six months ended June 30, 2021, the Company repurchased 2,745,990 common shares pursuant to the NCIB at an aggregate cost of $ 305,640 .

During the six months ended June 30, 2020, the Company repurchased 1,271,977 common shares pursuant to the NCIB at an aggregate cost of $ 105,654 .

As of June 30, 2021, the remaining maximum number of shares available for repurchase under the current NCIB was 10,398,783 .

Cash Dividend

In October 2020, the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.02 , from $ 0.185 to $ 0.205 per Company common share.

Cash dividends of $ 53,909 and $ 48,018 were paid during the three months ended March 31, 2021 and 2020, respectively.

Cash dividends of $ 107,330 and $ 96,912 were paid during the six months ended June 30, 2021 and 2020, respectively.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

In these proceedings, an agency may subpoena the Company for records, or seek to impose fines on the Company or revoke or deny renewal of an authorization held by the Company, including an operating permit.

From time to time, the Company may also be subject to actions brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

landfills, transfer stations, and E&P waste treatment, recovery and disposal operations, or alleging environmental damage or violations of the permits and licenses pursuant to which the Company operates.

From time to time, the Company may also be subject to actions brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of landfills, transfer stations, and E&P waste treatment, recovery and disposal operations, or alleging environmental damage or violations of the permits and licenses pursuant to which the Company operates.

The Company uses $ 1,000 as a threshold (up from the previously required threshold of $ 300 ) for disclosing environmental matters involving potential monetary sanctions.

In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the Company’s business.

Except as noted in the matters described below, as of March 31, 2021, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Except as noted in the matters described below, as of June 30, 2021, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Lower Duwamish Waterway Superfund Site Allocation Process

2 unchanged sentences

Environmental Protection Agency, Region 10 (the “EPA”) as a potentially responsible party (“PRP”), along with more than 100 others, under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or the “Superfund” law) with respect to the Lower Duwamish Waterway Superfund Site (the “LDW Site”).

Listed on the National Priorities List in 2001, the LDW Site is a five-mile stretch of the Duwamish River flowing into Elliott Bay in Seattle, Washington.

Listed on the National Priorities List in 2001, the LDW Site is a five-mile stretch of the Duwamish River flowing into Elliott Bay in

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Seattle, Washington.

A group of PRPs known as the Lower Duwamish Working Group (“LDWG”) and consisting of the City of Seattle, King County, the Port of Seattle, and Boeing Company conducted a Remedial Investigation/Feasibility Study for the LDW Site.

16 unchanged sentences

The EPA was informed of those changes.

The allocator’s most recent projection is that the preliminary allocation report may be issued by the end of April 2021.

The final allocation report will be issued only after the allocator considers comments of

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

the parties on the preliminary report.

In September 2020, the EPA informed attorneys for several PRPs that the EPA intends to initiate settlement negotiations in 2021, and the EPA was informed of the delay in the issuance of the preliminary allocation report.

More recently, the EPA indicated that settlement negotiations would begin in 2022.

The allocator issued his preliminary allocation report on June 28, 2021.

The final allocation report will be issued only after the allocator considers comments of the parties on the preliminary report.

Due to the delay in the issuance of the preliminary allocation report, the EPA indicated that settlement negotiations are expected to begin in 2022.

NWCS is defending itself vigorously in this confidential allocation process.

9 unchanged sentences

The Letter, versions of which NWCS believes were sent to all or a group of the PRPs for the LDW Site, also notified its recipients of their opportunity to participate in the Trustees’ development of an Assessment Plan and the performance of a Natural Resources Damages Assessment (“NRDA”) in accordance with the Assessment Plan for both the LDW Site and the east and west waterways of the Harbor Island site.

NWCS timely responded with correspondence to the NOAA Office of General Counsel, in which it declined the invitation at that time.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

responded with correspondence to the NOAA Office of General Counsel, in which it declined the invitation at that time.

NWCS does not know how other PRPs responded to the Letter, and has not received any further communication from NOAA or the Trustees.

13 unchanged sentences

At a subsequent hearing, on July 25, 2017, the Board of Supervisors approved the CUP.

On October 20, 2017, CCL filed in

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

the Superior Court of California, County of Los Angeles a verified petition for writ of mandate and complaint against the County and the County Board of Supervisors captioned Chiquita Canyon, LLC v.

On October 20, 2017, CCL filed in the Superior Court of California, County of Los Angeles a verified petition for writ of mandate and complaint against the County and the County Board of Supervisors captioned Chiquita Canyon, LLC v.

County of Los Angeles, No.

10 unchanged sentences

Before entry of final judgment, the Superior Court will hear CCL’s remaining causes of action.

A trial on CCL’s remaining causes of action is scheduled for August 1, 2022.

A cause of action for a taking under the Fifth Amendment of the U.S.

Constitution is the subject of a pending motion for leave to amend the Complaint.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

Constitution is the subject of a pending motion for leave to amend the Complaint and will be heard by the Superior Court on September 15, 2021.

Once the Superior Court has entered final judgment, CCL and the County will be permitted to appeal any adverse ruling to the California Court of Appeal.

3 unchanged sentences

However, at this point, the Company is not able to determine the likelihood of any outcome in this matter.

CEQA Lawsuit Against Los Angeles County Challenging Environmental Review for Landfill Expansion

A separate lawsuit involving CCL and the Landfill was filed on August 24, 2017 by community activists alleging that the environmental review underlying the CUP was inadequate under state law.

The Val Verde Civic Association, Citizens for Chiquita Canyon Landfill Compliance, and the Santa Clarita Organization for Planning and the Environment filed a petition for writ of mandate in the Superior Court of California, County of Los Angeles against the County, naming CCL as the real party in interest.

The lawsuit seeks to overturn the County’s approval of the CUP for the expansion of the Landfill and the certification of the final Environmental Impact Report, arguing that the report violates the California Environmental Quality Act.

Pursuant to Condition No.

6 of the CUP, which requires CCL to defend, indemnify, and hold harmless the County, its agents, officers, and employees from any claim or proceeding against the County brought by any third party to attack, set aside, void, or annul the CUP approval, CCL agreed to reimburse the County for its legal costs associated with defense of the lawsuit.

As the real party in interest, CCL has a right to notice and an opportunity to be heard in opposition to the petition for writ of mandate.

Initial briefs were filed in 2018 and a trial date was set in February 2019, which was later rescheduled and held in August 2019.

The court issued a final ruling on October 10, 2019 and a final judgment on December 4, 2019, denying the writ petition in full.

One petitioner, Santa Clarita Organization for Planning and the Environment, appealed the judgment.

All interested parties filed their briefs by July 1, 2020 and the County did not file an opposition brief.

No amicus or “friend of the court” briefs were filed, so the case was fully briefed on July 1, 2020.

The court heard oral argument on November 18, 2020.

The court issued its opinion on February 10, 2021, upholding the trial court’s ruling in full and rejecting the petitioner’s appeal.

On February 25, 2021, the Petitioner filed a petition for a rehearing, which the Court of Appeal denied on February 26, 2021.

The Petitioner did not file a petition for

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

review to the California Supreme Court and the time for seeking review has expired.

The Court of Appeal decision upholding the County’s Environmental Impact Report and approval of the CUP in full is now final.

December 11, 2017 Notice of Violation Regarding Certain CUP Conditions.

11 unchanged sentences

The NOV case has been continued multiple times as the CUP lawsuit was adjudicated;

it is now set for trial on September 14, 2021.

it is now set for trial on January 18, 2022.

The Superior Court’s July 2, 2020 decision in the CUP lawsuit upheld the B&T fee against a Mitigation Fee Act challenge, and addressed two other conditions that were also the subject of the NOV, which may impact the scope of the B&T fee/NOV case.

1 unchanged sentence

However, at this point, the Company is not able to determine the likelihood of any outcome in this matter.

SUBSEQUENT EVENT

On April 28, 2021 , the Company announced that its Board of Directors approved a regular quarterly cash dividend of $ 0.205 per Company common share.

The dividend will be paid on May 26, 2021 , to shareholders of record on the close of business on May 12, 2021 .

SUBSEQUENT EVENTS

On July 27, 2021, the Company’s Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of its NCIB.

The renewal is expected to commence following the conclusion of the Company’s current NCIB expiring August 9, 2021.

Upon approval, the Company anticipates that it will be authorized to make purchases during the period of August 10, 2021 to August 9, 2022 or until such earlier time as the NCIB is completed or terminated at the Company’s option.

See Note 10 for a discussion of the Company’s Second Amended and Restated Revolving Credit and Term Loan Agreement, which became effective on July 30, 2021.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

DOLLARS, EXCEPT PER SHARE, PER TON AND PER GALLON AMOUNTS)

On August 4, 2021 , the Company announced that its Board of Directors approved a regular quarterly cash dividend of $ 0.205 per Company common share.

The dividend will be paid on September 1, 2021 , to shareholders of record on the close of business on August 18, 2021 .

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 1. Financial Statements