What changed in this filing

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Item 1. Financial Statements

2021-10-28 compared with 2021-08-05 · 286 added, 180 removed, 842 unchanged (36% of the section changed)

4 unchanged sentences

dollars, except share and per share amounts)

September 30,

Current assets:

Cash and equivalents

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

Accounts receivable, net of allowance for credit losses of $ 20,306 and $ 19,380 at September 30, 2021 and December 31, 2020, respectively

Prepaid expenses and other current assets

24 unchanged sentences

Common shares:

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

260,526,784 shares issued and 260,453,918 shares outstanding at September 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 June 30, 2021 and December 31, 2020, respectively

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

Retained earnings

3 unchanged sentences

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(In thousands of U.S.

dollars, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

3 unchanged sentences

Impairments and other operating items

Operating income (loss)

Operating income

Interest expense

1 unchanged sentence

Other income (expense), net

Income (loss) before income tax provision

Income tax (provision) benefit

Net income (loss)

Loss on early extinguishment of debt

Income before income tax provision

Income tax provision

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:

Net income attributable to Waste Connections

Earnings 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 June 30,

Six Months Ended June 30,

Net income (loss)

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss), before tax:

18 unchanged sentences

NONCONTROLLING

INCOME (LOSS)

Balances at December 31, 2020

25 unchanged sentences

Balances at June 30, 2021

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

Issuance of shares under employee share purchase plan

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 September 30, 2021

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

36 unchanged sentences

Balances at June 30, 2020

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

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

Net income (loss)

Balances at September 30, 2020

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

2 unchanged sentences

(In thousands of U.S.

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

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

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

Loss on disposal of assets and impairments

Amortization of intangibles

Loss on early extinguishment of debt

Deferred income taxes, net of acquisitions

12 unchanged sentences

Net cash used in investing activities

( 1,034,840 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

( 1,814,034 )

( 1,505,641 )

Premiums paid on early extinguishment of debt

Payment of contingent consideration recorded at acquisition date

4 unchanged sentences

Debt issuance costs

Proceeds from issuance of shares under employee share purchase plan

Proceeds from sale of common shares held in trust

Net cash provided by (used in) financing activities

Net cash used in financing activities

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

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Non-cash financing activities:

Liabilities assumed and notes payable issued to sellers of businesses acquired

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

5 unchanged sentences

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

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.

and its subsidiaries (the “Company”) for the three and nine month periods ended September 30, 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.

generally accepted accounting principles (“GAAP”).

47 unchanged sentences

The Company had a combined $ 1,281,000 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.

based LIBOR loans as of September 30, 2021.

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

This relief is expected to permit the Company to maintain cash flow ‎hedge accounting as described in Note 12.

SEC amends MD&A and other Regulation S-K disclosure requirements .

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Registrants may early adopt the amended rules at any time after the effective date (on an item-by-item basis), as long as they provide the disclosure responsive to an amended item in its entirety .

RECLASSIFICATION

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

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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).

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.

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.

During the nine months ended September 30, 2020, total E&P revenue declined $ 75,158 , compared to the prior year period, on oil 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 have relatively high costs associated with drilling, making them less attractive than other basins, including the Permian Basin in Texas and New Mexico.

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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;

3 unchanged sentences

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.

4 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 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 March 31, 2021 was recognized as revenue during the three months ended June 30, 2021 when the service was performed.

Substantially all of the deferred revenue recorded as of June 30, 2021 was recognized as revenue during the three months ended September 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 June 30, 2021 and December 31, 2020, respectively.

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

ACCOUNTS RECEIVABLE

11 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

Beginning balance

5 unchanged sentences

LANDFILL ACCOUNTING

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.

At September 30, 2021, the Company’s landfills consisted of 84 owned landfills, five landfills operated under life-of-site operating agreements and five landfills operated under limited-term operating agreements.

The Company’s landfills had site costs with a net book value of $ 2,601,014 at September 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.

Based on remaining permitted capacity as of September 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 27 years .

As of September 30, 2021, the Company is seeking to expand permitted capacity at 12 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

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 .

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

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.

During the nine months ended September 30, 2021 and 2020, the Company expensed $ 160,470 and $ 149,988 , respectively, or an average of $ 4.56 and $ 4.51 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 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:

During the nine months ended September 30, 2021 and 2020, the Company expensed $ 10,783 and $ 11,174 , respectively, or an average of $ 0.31 and $ 0.34 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 September 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 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.

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

Liability adjustments of $ 5,008 for the nine months ended September 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.

At September 30, 2021 and December 31, 2020, $ 12,816 and $ 12,533 , respectively, of the Company’s restricted cash balance and $ 55,716 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.

The Company acquired 14 individually immaterial non-hazardous solid waste collection, transfer and recycling businesses during the nine months ended September 30, 2021.

The total acquisition-related costs incurred during the

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

nine months ended September 30, 2021 for these acquisitions were $ 6,220 .

These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

The Company acquired 11 individually immaterial non-hazardous solid waste collection, transfer, recycling and disposal businesses during the nine months ended September 30, 2020.

The total acquisition-related costs incurred during the nine months ended September 30, 2020 for these acquisitions were $ 4,497 .

These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Net Income.

The results of operations of the acquired businesses have been included in the Company’s Condensed Consolidated Financial Statements from their respective acquisition dates.

The Company expects these acquired businesses to contribute towards the achievement of the Company’s strategy to expand through acquisitions.

Goodwill acquired is attributable to the synergies and ancillary growth opportunities expected to arise after the Company’s acquisition of these businesses.

The following table summarizes the consideration transferred to acquire these businesses and the preliminary amounts of identifiable assets acquired and liabilities assumed at the acquisition dates for the acquisitions consummated in the nine months ended September 30, 2021 and 2020:

Fair value of consideration transferred:

Change in open working capital settlements at quarter end

Recognized amounts of identifiable assets acquired and liabilities assumed associated with businesses acquired:

Accounts receivable

Prepaid expenses and other current assets

Operating lease right-of-use assets

Property and equipment

Long-term franchise agreements and contracts

Indefinite-lived intangibles

Customer lists

Permits and other intangibles

Accounts payable and accrued liabilities

Current portion of operating lease liabilities

Deferred revenue

Contingent consideration

Long-term portion of operating lease liabilities

Other long-term liabilities

Deferred income taxes

Total identifiable net assets

Goodwill acquired during the nine months ended September 30, 2021 and 2020, totaling $ 114,006 and $ 48,926 , respectively, is expected to be deductible for tax purposes.

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 fair value of acquired working capital related to 11 individually immaterial acquisitions completed during the twelve months ended September 30, 2021, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed.

Any adjustments recorded relating to finalizing the working capital for these 11 acquisitions are not expected to be material to the Company’s financial position.

The gross amount of trade receivables due under contracts acquired during the nine months ended September 30, 2021, is $ 21,673 , of which $ 1,881 is expected to be uncollectible.

The gross amount of trade receivables due under contracts acquired during the nine months ended September 30, 2020, is $ 3,840 , of which $ 35 is expected to be uncollectible.

The Company did not acquire any other class of receivable as a result of the acquisitions of these businesses.

INTANGIBLE ASSETS, NET

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

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

Finite-lived intangible assets:

7 unchanged sentences

Intangible assets, exclusive of goodwill

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the nine months ended September 30, 2021 was 20.7 years.

The weighted-average amortization period of customer lists acquired during the nine months ended September 30, 2021 was 11.3 years.

The weighted-average amortization period of finite-lived permits and other acquired during the nine months ended September 30, 2021 was 40.0 years.

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 assets, exclusive of goodwill, consisted of the following at December 31, 2020:

19 unchanged sentences

LONG-TERM DEBT

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

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

September 30,

Revolver under Credit Agreement, bearing interest ranging from 1.09 % to 1.43 % (a)

2 unchanged sentences

2.39 % Senior Notes due 2021 (c)

3.09 % Senior Notes due 2022

2.75 % Senior Notes due 2023

3.24 % Senior Notes due 2024

3.41 % Senior Notes due 2025

3.09 % Senior Notes due 2022 (d)

2.75 % Senior Notes due 2023 (d)

3.24 % Senior Notes due 2024 (d)

3.41 % Senior Notes due 2025 (d)

3.03 % Senior Notes due 2026 (d)

3.49 % Senior Notes due 2027 (d)

4.25 % Senior Notes due 2028

9 unchanged sentences

____________________

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

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

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

(d) All of the outstanding Senior Notes issued pursuant to the 2008 and 2016 master note purchase agreements were redeemed by the Company on September 20, 2021.

WASTE CONNECTIONS, INC.

3 unchanged sentences

Credit Agreement

Details of the Credit Agreement are as follows:

Details of the 2021 Credit Agreement and Credit Agreement, as applicable, are as follows:

September 30,

Revolver under Credit Agreement

13 unchanged sentences

based LIBOR loan

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.

In addition to the $ 114,685 of letters of credit at September 30, 2021 issued and outstanding under the 2021 Credit Agreement, the Company has issued and outstanding letters of credit totaling $ 6,819 under facilities other than the 2021 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.

5 unchanged sentences

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

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

WASTE CONNECTIONS, INC.

2 unchanged sentences

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 .

governed by the terms of the 2021 Credit Agreement.

Subject to certain specified conditions and additional deliveries, the 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.

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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

As of September 30, 2021, the Company was in compliance with its financial covenants under the 2021 Credit Agreement.

On September 20, 2021, the Company completed an underwritten public offering (the “Offering”) of $ 650,000 aggregate principal amount of 2.20 % Senior Notes due 2032 (the “2032 Senior Notes”) and $ 850,000 aggregate principal amount of 2.95 % Senior Notes due 2052 (the “2052 Senior Notes” and, together with the 2032 Senior Notes, the “Notes”).

The Company issued the Notes under the Indenture, dated as of November 16, 2018 (the “Base Indenture”), by and between the Company and U.S.

Bank National Association, as trustee (the “Trustee”), as supplemented by the Fifth Supplemental

WASTE CONNECTIONS, INC.

2 unchanged sentences

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.

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

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

Indenture, dated as of September 20, 2021 (the “Supplemental Indenture” and the Base Indenture as so supplemented, the “Indenture”).

In connection with the Offering, the Company exercised its right to repay the $ 1,500,000 of senior notes (the “Private Notes”) that were governed by its 2008 and 2016 master note purchase agreements.

The Company repaid the Private Notes, including the $ 110,617 make-whole payment, with the net proceeds from the Offering and borrowings under the revolving credit facility provided under its 2021 Credit Agreement.

The Company recorded $ 115,288 to Loss on early extinguishment of debt during the nine months ended September 30, 2021 due to the repayment of the Private Notes and associated make-whole premium and related offering fees and expenses.

The Company will pay interest on the Notes semi-annually in arrears.

The 2032 Senior Notes will mature on January 15, 2032 and the 2052 Senior Notes will mature on January 15, 2052 .

The Notes are the Company’s senior unsecured obligations, ranking equally in right of payment with its other existing and future unsubordinated debt and senior to any of its future subordinated debt.

The Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may, prior to October 15, 2031 (three months before the maturity date), redeem some or all of the 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the 2032 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2032 Senior Notes redeemed.

Commencing on October 15, 2031 (three months before the maturity date), the Company may redeem some or all of the 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2032 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

The Company may, prior to July 15, 2051 (six months before the maturity date), redeem some or all of the 2052 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the 2052 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2052 Senior Notes redeemed.

Commencing on July 15, 2051 (six months before the maturity date), the Company may redeem some or all of the 2052 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2052 Senior Notes being redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

Under certain circumstances, the Company may become obligated to pay additional amounts (the “Additional Amounts”) with respect to the Notes to ensure that the net amounts received by each holder of the Notes will not be less than the amount such holder would have received if withholding taxes or deductions were not incurred on a payment under or with respect to the Notes.

If such payment of Additional Amounts are a result of a change in the laws or regulations, including a change in any official position, the introduction of an official position or a holding by a court of competent jurisdiction, of any jurisdiction from or through which payment is made by or on behalf of the Notes having power to tax, and the Company cannot avoid such payments of Additional Amounts through reasonable measures, then the Company may redeem the Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

If the Company experiences certain kinds of changes of control, each holder of the Notes may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 101 % of the aggregate principal amount of such Notes, plus any accrued but unpaid interest up to the date of repurchase.

The covenants in the Indenture include limitations on liens, sale-leaseback transactions and mergers and sales of all or substantially all of the Company’s assets.

The Indenture also includes customary events of default with respect to the Notes.

As of September 30, 2021, the Company was in compliance with all applicable covenants in the Indenture.

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)

Upon an event of default, the principal of and accrued and unpaid interest on all the Notes may be declared to be due and payable by the Trustee or the holders of not less than 25 % in principal amount of the outstanding Notes.

Upon such a declaration, such principal and accrued interest on all of the Notes will be due and payable immediately.

In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of the Notes.

Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

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.

The Company manages its operations through five geographic operating segments, which are also its reportable segments.

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

The segment information presented herein reflects the realignment of these districts.

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

Under the current orientation, the Company’s 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;

the Company’s 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;

The Company’s 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;

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

the Company’s Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming;

6 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 and six months ended June 30, 2021 and 2020, is shown in the following tables:

Three Months Ended

June 30, 2021

Corporate (a)

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

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

Three Months Ended

June 30, 2020

September 30, 2021

Corporate (a)

Six Months Ended

June 30, 2021

Three Months Ended

September 30, 2020

Corporate (a)

Six Months Ended

June 30, 2020

Nine Months Ended

September 30, 2021

Corporate (a)

Nine Months Ended

September 30, 2020

Corporate (a)

____________________

1 unchanged sentence

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 of the Company’s Corporate segment for the periods presented.

(b) Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments.

Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

(c) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

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:

(b) Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments.

Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

(c) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

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

September 30,

The following tables show changes in goodwill during the nine months ended September 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 June 30, 2021

Balance as of September 30, 2021

Balance as of December 31, 2019

Goodwill acquired

Goodwill acquisition adjustments

Impact of changes in foreign currency

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:

Balance as of September 30, 2020

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 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:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Eastern segment EBITDA

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Other income (expense), net

Income (loss) before income tax provision

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)

Loss on early extinguishment of debt

Income before income tax provision

DERIVATIVE FINANCIAL INSTRUMENTS

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

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:

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

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

Interest Rate

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* Plus applicable margin.

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

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 fair values of derivative instruments designated as cash flow hedges as of September 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 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.

(a) Represents the estimated amount of the existing unrealized losses on interest rate swaps as of September 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.

10 unchanged sentences

Total derivatives designated as cash flow hedges

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 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:

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 nine months ended September 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,

4 unchanged sentences

Three Months Ended

September 30,

Interest rate swaps

3 unchanged sentences

Amount of Gain or (Loss) Recognized

Net Income (Loss)

from AOCIL into Earnings,

2 unchanged sentences

Net of Tax (b)

Six Months Ended

Nine Months Ended

September 30,

Interest rate swaps

7 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 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

As of September 30, 2021 and December 31, 2020, the carrying values of cash and equivalents, trade receivables, restricted cash

WASTE CONNECTIONS, INC.

2 unchanged sentences

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:

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 September 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 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 September 30, 2021 and December 31, 2020, are as follows:

Carrying Value at

Fair Value* at

September 30,

4.64 % Senior Notes due 2021

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2.20 % Senior Notes due 2032

3.05 % Senior Notes due 2050

2.95 % Senior Notes due 2052

____________________

2 unchanged sentences

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 (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:

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 and nine months ended September 30, 2021 and 2020:

Three Months Ended

Six Months Ended

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

Nine Months Ended

September 30,

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

Basic shares outstanding

1 unchanged sentence

Diluted shares outstanding

FAIR VALUE MEASUREMENTS

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement.

These tiers include:

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

WASTE CONNECTIONS, INC.

2 unchanged sentences

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;

FAIR VALUE MEASUREMENTS

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement.

These tiers include:

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;

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

At September 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.

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

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

Fair Value Measurement at September 30, 2021 Using

Quoted Prices in

2 unchanged sentences

Interest rate swap derivative instruments – net liability position

Restricted cash and investments

Restricted cash

Restricted investments

Contingent consideration

4 unchanged sentences

Interest rate swap derivative instruments – net liability position

Restricted cash and investments

Restricted cash

Restricted investments

Contingent consideration

3 unchanged sentences

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,

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

Nine Months Ended September 30,

Beginning balance

8 unchanged sentences

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 and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended June 30, 2021

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

Three Months Ended September 30, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Interest rate swap amounts reclassified into interest expense

5 unchanged sentences

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:

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

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2021

Balance at September 30, 2021

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2020

Balance at September 30, 2020

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

2 unchanged sentences

Restricted Share Units

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

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

Unvested Shares

1 unchanged sentence

Vested and issued

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 .

Outstanding at September 30, 2021

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the nine-month period ended September 30, 2021 was $ 97.76 .

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.

5 unchanged sentences

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.

At September 30, 2021 and 2020, the Company had 100,861 and 178,119 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

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

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

Unvested Shares

1 unchanged sentence

Vested and issued

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 .

Outstanding at September 30, 2021

During the nine months ended September 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 six-month period ended June 30, 2021 was $ 96.99 .

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

Deferred Share Units

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

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

Vested Shares

Outstanding at December 31, 2020

Outstanding at June 30, 2021

Outstanding at September 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 six-month period ended June 30, 2021 was $ 99.80 .

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

Other Restricted Share Units

4 unchanged sentences

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:

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

Outstanding at December 31, 2020

Outstanding at June 30, 2021

Outstanding at September 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 six-month period ended June 30, 2021, is presented below:

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

Outstanding at December 31, 2020

Outstanding at June 30, 2021

Outstanding at September 30, 2021

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

5 unchanged sentences

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

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

Under the ESPP, employees purchased 10,813 of the Company’s common shares for $ 1,275 during the nine months ended September 30, 2021.

Normal Course Issuer Bid

12 unchanged sentences

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

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 .

For the nine months ended September 30, 2021, the Company repurchased 2,745,990 common shares pursuant to the NCIB in effect during that period at an aggregate cost of $ 305,640 .

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

As of September 30, 2021, the remaining maximum number of shares available for repurchase under the current NCIB was 13,025,895 .

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

Cash dividends of $ 160,754 and $ 145,921 were paid during the nine months ended September 30, 2021 and 2020, respectively.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

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 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.

Except as noted in the matters described below, as of September 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

Listed on the

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

Seattle, Washington.

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

9 unchanged sentences

The LDWG and the EPA entered into a fourth amendment to the AOC in July 2018 primarily addressing development of a proposed remedy for the upper reach of the LDW Site, river mile 3 to river mile 5.

At the April 24, 2019 stakeholders meeting the LDWG projected completion of the remedial design for the upper reach could be completed by August 2024.

At the April 24, 2019 stakeholders meeting, the LDWG projected that the remedial design for the upper reach could be completed by August 2024.

In late September 2020, the EPA informed attorneys for several PRPs that the work may be completed by late 2023 or early 2024.

6 unchanged sentences

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.

In July 2021, the EPA was informed of the issuance of the preliminary allocation report in a telephone conference with allocation participants.

In that call, the EPA reiterated its expectation that settlement negotiations would begin in 2022.

NWCS is defending itself vigorously in this confidential allocation process.

8 unchanged sentences

Damages to natural resources are in addition to clean-up costs.

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.

WASTE CONNECTIONS, INC.

2 unchanged sentences

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.

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.

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

25 unchanged sentences

CCL prevailed with respect to 12 of the challenged conditions, many of which imposed new fees and exactions on the Landfill.

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.

WASTE CONNECTIONS, INC.

2 unchanged sentences

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.

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.

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.

21 unchanged sentences

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 .

On October 27, 2021 , the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.025 , from 0.205 to $ 0.23 per Company common share, and then declared a regular quarterly cash dividend of $ 0.23 per Company common share.

The dividend will be paid on November 23, 2021 , to shareholders of record on the close of business on November 9, 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