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Risk Factors Related to Our Company and Industry
−Removed: Public health crises and the effects of related governmental initiatives have adversely affected and may continue to adversely affect our business, financial condition and results of operations .
−Removed: Public health crises, such as the pandemic of coronavirus disease 2019 (“COVID-19”), may impact our operations or our customers’ operations in ways that adversely affect our business, results of operations and financial condition.
−Removed: The COVID-19 pandemic has resulted in adverse impacts to our business.
−Removed: Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services.
−Removed: Potential contributing factors include:
−Removed: ● Mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings have impacted and may continue to impact the operations of our commercial, municipal, industrial and E&P collection customers, as well as affiliated and third-party haulers that bring waste to our landfills, transfer stations, E&P waste and recycling facilities, resulting in a decline in demand for our service offerings;
−Removed: ● Weakness in the economy resulting from business closures, unemployment and other direct and indirect impacts of the COVID-19 pandemic has caused and may continue to cause customers, including residential, commercial, industrial and E&P accounts, to suffer financial difficulties and ultimately to be unable or unwilling to pay amounts owed to us.
−Removed: This could negatively impact our consolidated financial condition, results of operations and cash flows;
−Removed: ● To the extent that a significant percentage of our workforce is unable to work, including because of illness or government restrictions in connection with the COVID-19 pandemic, our workforce and operations will be negatively impacted;
−Removed: ● The additional costs associated with the COVID-19 pandemic, including those related to emergency wages, supplemental pay, personal protective equipment and extended benefits programs provided by the Company to employees affected by the COVID-19 pandemic, may impact our financial results;
−Removed: ● Volatility in commodity and other input costs could substantially impact our result of operations;
−Removed: ● It may become more costly or difficult to obtain debt or equity financing to fund operations or investment opportunities, or to refinance our debt in the future, in each case on terms and within a time period acceptable to us.
−Removed: The ultimate extent of the impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend largely on future developments, including the duration and spread of the outbreak in the U.S.
−Removed: and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, including the distribution and effectiveness of vaccines, and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and cannot be predicted at this time.
Our industry is highly competitive and includes companies with lower prices, return expectations or other advantages, and governmental service providers, which could adversely affect our ability to compete and our operating results .
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Our inability to compete effectively could hinder our growth or negatively impact our operating results.
+Added: Price increases may not be adequate to offset the impact of increased costs, or may cause us to lose customers .
+Added: We seek price increases necessary to offset increased costs, to improve operating margins and to obtain adequate returns on our deployed capital.
+Added: Contractual, general economic, competitive or market-specific conditions, including the impact of public health crises such as the COVID-19 pandemic, sometimes limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.
+Added: As a result of these factors, we may be unable to offset increases in costs, improve operating margins and obtain adequate investment returns through price increases.
+Added: We may also lose customers to lower-price competitors, and new competitors may enter our markets as we raise prices.
Competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions .
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Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period.
−Removed: Price increases may not be adequate to offset the impact of increased costs, or may cause us to lose customers .
−Removed: We seek price increases necessary to offset increased costs, to improve operating margins and to obtain adequate returns on our deployed capital.
−Removed: Contractual, general economic, competitive or market-specific conditions, including the impact of public health crises such as the COVID-19 pandemic, may limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.
−Removed: As a result of these factors, we may be unable to offset increases in costs, improve operating margins and obtain adequate investment returns through price increases.
−Removed: We may also lose customers to lower-price competitors, and new competitors may enter our markets as we raise prices.
We may lose contracts through competitive bidding, early termination or governmental action .
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Although we intend to bid on existing contracts subject to competitive bidding in the future and additional municipal contracts and franchise agreements, we may not be the successful bidder, or we may need to lower our price in order to retain the contract.
−Removed: In addition, some of our customers, including municipalities, may terminate their contracts with us before the end of the terms of those contracts.
+Added: In addition, some of our customers, including municipalities, have and others may terminate their contracts with us before the end of the terms of those contracts.
Similar risks may affect our contracts to operate municipally-owned assets, such as landfills.
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If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time, our revenues could decline.
−Removed: Municipalities could also promulgate “flow control” laws and regulations requiring us to deliver waste we
−Removed: collect within a particular jurisdiction to facilities not owned or controlled by us, which could increase our costs and reduce our revenues.
+Added: Municipalities sometimes also promulgate “flow control” laws and regulations requiring us to deliver waste we collect within a particular jurisdiction to facilities not owned or controlled by us, which could increase our costs and reduce our revenues.
Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones .
−Removed: We currently own and/or operate 91 landfills and one development stage landfill throughout the United States and Canada.
−Removed: Our ability to meet our financial and operating objectives may depend in part on our ability to acquire, lease, or renew landfill operating permits, expand existing landfills and develop new landfill sites.
+Added: We currently own and/or operate 97 landfills throughout the United States and Canada.
+Added: Our ability to meet our financial and operating objectives depends in part on our ability to acquire, lease, or renew landfill operating permits, expand existing landfills and develop new landfill sites.
It has become increasingly difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management facilities, including landfills and transfer stations.
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These operating permits often must be renewed several times during the permitted life of a landfill.
−Removed: The permit and approval process is often time consuming, requires numerous hearings and compliance with zoning, environmental and other requirements, is frequently challenged by special interest and other groups, including those utilizing social media to further their objectives, and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration than we believed was otherwise required by law, or burdensome terms and conditions being imposed on our operations.
+Added: The permit and approval process is often time consuming, requires numerous hearings and compliance with zoning, environmental and other requirements.
+Added: States and municipalities are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.
+Added: These policies generally require permitting agencies to give heightened attention to the potential for projects to disproportionately impact low-income and minority communities.
+Added: The permitting and approval process is frequently challenged by special interest and other groups, including those utilizing social media to further their objectives, and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration than we believed was otherwise required by law, or burdensome terms and conditions being imposed on our operations.
For example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A.
−Removed: Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 12, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
−Removed: This process may be further complicated by the COVID-19 pandemic, which may impact the timeliness of the receipt of approvals and permits.
+Added: Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 13, “Commitments and Contingencies,” of our consolidated financial
+Added: statements included in Item 8 of this Annual Report on Form 10-K.
+Added: This process may be further complicated by the COVID-19 pandemic, which has and may continue to impact the timeliness of the receipt of approvals and permits.
We may not be able to obtain new landfill sites or expand the permitted capacity of our existing landfills when necessary, and may ultimately be required to expense up to the carrying value of the landfill or expansion project, less the recoverable value of the property and other amounts recovered.
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Labor is one of our highest costs and relatively small increases in labor costs per employee could materially affect our cost structure.
−Removed: We compete with other businesses in our markets for qualified employees and the labor supply is sometimes tight in our markets, which can drive higher turnover and increase the time it takes to fill job openings.
−Removed: In our E&P waste business, for example, we are exposed to the cyclical variations in demand that are particular to the development and production of oil and natural gas.
−Removed: A shortage of qualified employees in solid waste or E&P, including due to the COVID-19 pandemic in our markets, would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.
+Added: A shortage of qualified employees in our markets, including due to the COVID-19 pandemic, would require us to incur additional costs related to wages and benefits, including, for example, our targeted minimum wage increase to $15 per hour (CAD $16 per hour in Canada), to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.
In addition, higher turnover can result in increased costs associated with recruiting and training;
it can also impact operating costs, including maintenance and risk.
−Removed: As an essential services provider, in March 2020 we implemented temporary emergency wages, supplemental pay and extended benefits programs for our frontline workforce and other employees directly or indirectly affected by the COVID-19 pandemic, which were partially offset by cost reductions in other areas.
+Added: As a result of the COVID-19 pandemic and subsequent labor constraints, we have experienced increased competition with other businesses in our markets for qualified employees as a result of the labor supply being tight in our markets, which has driven higher turnover and increased the time it takes to fill job openings.
+Added: Moreover, as an essential services provider, in March 2020 we implemented temporary emergency wages, supplemental pay and extended benefits programs for our frontline workforce and other employees directly or indirectly affected by the COVID-19 pandemic, which were partially offset by cost reductions in other areas.
Increases in capital expenditures could impact our financial results .
Increases in fleet, equipment and landfill construction costs due to cost pressures, acquisitions and new contracts could result in capital expenditures being higher than anticipated.
−Removed: This could impact our ability to generate free cash flow in line with our expectations.
−Removed: Lower crude oil prices have and may continue to adversely affect the level of exploration, development and production activity of E&P companies and the demand for our E&P waste services .
−Removed: Lower crude oil prices and the volatility of those prices may affect the level of investment and the amount of linear feet drilled in the basins where we operate, as it may impact the ability of E&P companies to access capital on economically advantageous terms or at all.
+Added: In addition, supply chain disruptions and inflationary pressures, including those related to the COVID-19 pandemic, have and are expected to continue to result in higher costs, delays or lack of availability of fleet, equipment or supplies.
+Added: This could impact our ability to generate free cash flow in line with our expectations or otherwise adversely affect our financial results.
+Added: The level of exploration, development and production activity of E&P companies will impact the demand for our E&P waste services.
+Added: The value of crude oil has impacted and may in the future impact the level of drilling activity in the basins where we operate;
+Added: however, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.
+Added: The level of investment and the amount of linear feet drilled in the basins where we operate may impact the ability of E&P companies to access capital on economically advantageous terms or at all.
In addition, E&P companies may elect to decrease investment in basins where the returns on investment are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices.
−Removed: Recent declines in the price of crude oil to historic lows have resulted in announced reductions to capital spending plans by E&P companies.
−Removed: Such reductions in capital spending would be expected to negatively impact E&P waste generation and therefore the demand for our services.
Energy transition, or a transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources, could also affect investments by E&P companies in the basins where we operate.
−Removed: Given the unexpected oversupply of oil and the decreased demand for oil associated with the economic slowdown caused by the COVID-19 pandemic, we cannot estimate when crude oil prices will increase.
−Removed: Further, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.
+Added: See the section Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the years ended December 31, 2021 and 2020 on property and equipment in our E&P waste operations.
A portion of our growth and future financial performance depends on our ability to integrate acquired businesses, and the performance of our acquisitions .
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We expect the fluctuation in our revenues between our highest and lowest quarters to be approximately 10%.
−Removed: This seasonality reflects the lower volume of
−Removed: solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during the winter months in Canada and the U.S., and reduced E&P activity during harsh weather conditions.
+Added: This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during the winter months in Canada and the U.S., and reduced E&P activity during harsh weather conditions.
Conversely, mild winter weather conditions may reduce demand for oil and natural gas, which may cause our customers to curtail their drilling programs, which could result in production of lower volumes of E&P waste.
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We provide recycling services to some of our customers.
−Removed: The recyclables we process for sale include paper products and plastics that are shipped to customers in the United States, as well as other markets, including Asia.
+Added: The recyclables we process for sale include paper products and plastics that are shipped primarily to customers in the United States, as well as other markets, including Asia.
The sale prices of and the demand for recyclable commodities are frequently volatile and when they decline, our revenues, operating results and cash flows will be affected.
−Removed: The value of plastics are influenced by the volatility of crude oil prices, and there has been a resulting decline in the value of plastic recyclables associated with the precipitous drop in the value of crude in 2020.
−Removed: The value of paper products are impacted by demand, which is often influenced by quality concerns, which have resulted in the imposition of restrictions by other countries, including China, on the import of certain recyclables.
+Added: The value of recyclables may be impacted by factors including:
+Added: changes to international waste importation and exportation laws;
+Added: quality concerns;
+Added: the volatility of crude oil prices, which impacts plastic;
+Added: and, the demand for paper products, which impacts fiber, along with the extent to which manufacturers rely on recycled feedstock.
Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, particularly in residential collection, which results in increased processing and residual disposal costs to achieve quality standards.
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Therefore, if we recognize increased revenues resulting from higher prices for recyclable commodities, the rebates we pay to suppliers will also increase, which also may impact our operating results.
−Removed: To the extent that there is an economic slowdown, including the one associated with the COVID-19 pandemic, a resulting decline in demand for recycled commodities could impact our revenues, operating results and cash flow.
+Added: To the extent that there is an economic slowdown, including the one associated with the COVID-19 pandemic, a resulting decline in demand for recycled commodities has and could in the future impact our revenues, operating results and cash flow.
Our results will be affected by changes in the value of renewable fuels .
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In addition, demand for RINs can be impacted by the ability of refineries to obtain small refinery exemptions, or SREs, through the EPA.
−Removed: Any reductions or limitations on the requirement to blend renewable fuel, including a reduction associated with the economic slowdown associated with the COVID-19 pandemic, and any related waivers including SREs, would likely reduce the demand for RINs, which could impact the value of RINs.
+Added: Any reductions or limitations on the requirement to blend renewable fuel and any related waivers including SREs, would likely reduce the demand for RINs, which could impact the value of RINs.
At this time, we do not know how the new Clean Fuel Regulations in Canada, as discussed above, will impact the demand for our renewable fuel in the future.
A significant reduction in the value of RINs in the United States or the price paid for our renewable fuel in Canada could adversely impact our reported results.
−Removed: Increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings .
+Added: To manage a portion of this risk, we may enter into contractual agreements to sell RINs at a fixed price.
+Added: As of December 31, 2021 our existing agreements to sell RINs at a fixed price reached maturity and we currently have no contractual fixed price agreements in place.
+Added: Climate change, including adverse weather conditions, could adversely affect our operations and increase operational costs .
+Added: Our operations and assets are subject to risks associated with the effects of climate change and adverse weather conditions.
+Added: Risks associated with climate change, such as increased frequency and/or intensity of weather events, flooding, wildfires, sea level rise, and other weather- and climate-related events could negatively impact our operations.
+Added: For example, these events could disrupt or result in suspension of collection activities, disrupt landfill and transfer station operations, or hinder landfill development or expansion.
+Added: It is also possible that these events could disrupt our customers’ businesses, thereby reducing the amount of waste generated by their operations.
+Added: Additional laws and regulations related
+Added: to climate change could also be promulgated, which could result in increased operational costs or disruption to our clients’ business, thereby impacting our operational results and financial condition.
+Added: Increases in insurance costs and the amount that we self-insure for various risks or limitations of our insurance coverage could reduce our operating margins and reported earnings .
We maintain insurance policies for automobile, general, employer’s, environmental, cyber, employment practices and directors’ and officers’ liability as well as for employee group health insurance, property insurance and workers’ compensation.
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We generally purchase diesel fuel at market prices, and such prices have fluctuated significantly in recent years.
−Removed: A significant increase in market prices for fuel could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.
+Added: A significant increase in market prices for fuel, as experienced recently, could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.
To manage a portion of this risk, we have entered into fixed-price fuel purchase contracts.
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After completion or closure of a landfill site, there exists the potential for unforeseen environmental problems to occur that could result in substantial remediation costs or potential litigation.
−Removed: The potential increased regulation of per- and polyfluoroalkyl substances (“PFAS”) and other emerging contaminants could result in greater expenditures for post-closure costs.
+Added: The potential increased regulation of per- and polyfluoroalkyl substances (“PFAS”), bisphenol A (“BPA”) phthalates, methane and other emerging contaminants could result in greater expenditures for closure and post-closure costs.
It is also possible that accruals may need to be expanded and that costs incurred related to these activities could be accelerated.
Paying additional amounts for closure or post-closure costs and/or for environmental remediation and/or for litigation could harm our financial condition, operating results, or cash flow.
−Removed: We may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity .
−Removed: Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations or as a result of third-party challenges, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored.
−Removed: Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our operations that could interrupt or limit the scope of our business.
−Removed: Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.
−Removed: Pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements .
−Removed: We are, and from time to time become, involved in lawsuits, regulatory inquiries, and governmental and other legal proceedings arising out of the ordinary course of our business.
−Removed: Many of these matters raise complicated factual and legal issues and are subject to uncertainties and complexities, all of which make the matters costly to address.
−Removed: For example, in recent years, wage and employment laws have changed regularly and become increasingly complex, which has fostered litigation, including purported class actions.
−Removed: Similarly, purported class actions based on public or private nuisance and negligence claims related to alleged landfill odor concerns have proliferated, as have citizen suits brought pursuant to environmental laws, such as those regulating the treatment of storm water runoff.
−Removed: The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain.
−Removed: Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our consolidated financial condition, results of operations and cash flows.
−Removed: See discussion in Note 12, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Our financial results could be adversely affected by impairments of goodwill, indefinite-lived intangibles or property and equipment .
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A significant deterioration in a key estimate or assumption or a less significant deterioration to a combination of assumptions could result in an additional impairment charge in the future, which could have a significant adverse impact on our reported results.
−Removed: See the section Goodwill and Indefinite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charge recorded during the year ended December 31, 2020 on property and equipment in our E&P operations due to recent declines in the value of crude oil.
−Removed: Future changes to U.S., Canadian and foreign tax laws could materially adversely affect us .
−Removed: We cannot give any assurance as to what our effective tax rate will be in the future, because of, among other things, uncertainty regarding the tax policies of the jurisdictions where we operate.
−Removed: For example, the U.S.
−Removed: Congress, the Canadian government, the Organisation for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations.
−Removed: One example is in the area of "base erosion and profit shifting,"
−Removed: where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
−Removed: In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as base erosion and profit shifting.
−Removed: The MLI entered into force in Canada on December 1, 2019 and entered into effect with respect to certain of Canada’s tax treaties on January 1, 2020 for withholding taxes and will enter into effect with respect to certain other taxes (including capital gains taxes) for tax years beginning on or after June 1, 2020 (which, for us and our affiliates, in general, was January 1, 2021).
−Removed: The MLI may enter into effect at a later date for certain of Canada’s tax treaties with countries that have not yet completed their domestic procedures to cause the MLI to come into effect.
−Removed: As a result of these and other changes, the tax laws in the United States, Canada, and other countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us and our affiliates.
−Removed: The MLI does not impact the tax treaty between Canada and the U.S.
+Added: See the sections Goodwill and Indefinite-Lived Intangible Assets and Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the years ended December 31, 2021 and 2020 on indefinite-lived intangible assets, definite-lived intangible assets and property and equipment in our E&P waste operations.
Our indebtedness could adversely affect our financial condition and limit our financial flexibility .
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● place us at a competitive disadvantage relative to our competitors with less debt.
−Removed: In addition, a portion of our indebtedness, including interest rate swaps, is at variable rates which are based on the London Interbank Offered Rate, or LIBOR, which is expected to no longer be published after 2021.
+Added: In addition, a portion of our indebtedness, including interest rate swaps, is at variable rates which are based on the London Interbank Offered Rate, or LIBOR, which is expected to no longer be published after June 2023.
The FASB added the Secured Overnight Financing Rate, or SOFR, as an eligible benchmark interest rate in order to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.
−Removed: We are developing a plan to transition our indebtedness from LIBOR to SOFR.
−Removed: Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control, including the impacts from the COVID-19 pandemic.
+Added: In December 2021, the Canadian Alternative Reference Rate, or CARR, working group has recommended to cease publication of all Canadian Dollar Offered Rate, or CDOR, tenors after June 2024.
+Added: We are developing a plan to transition our indebtedness from LIBOR to SOFR, and, in some cases, have already modified agreements to provide for the expected transition to SOFR.
+Added: Our ability to execute our financial strategy and our ability to incur indebtedness is somewhat dependent upon our ability to maintain investment grade credit ratings on our senior debt.
+Added: The credit rating process is contingent upon our credit profile and several other factors, many of which are beyond our control, including methodologies established and interpreted by third-party rating agencies.
+Added: If we were unable to maintain our investment grade credit ratings in the future, our interest expense would increase and our ability to obtain financing on favorable terms could be adversely affected.
+Added: Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control, including the impacts from the COVID-19
If we fail to comply with the covenants under any of our indebtedness, we may be in default under the indebtedness, which may entitle the lenders or holders of indebtedness to accelerate the debt obligations.
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If we are unable to obtain performance or surety bonds, letters of credit or insurance, we may not be able to enter into additional solid waste or other collection contracts or retain necessary landfill operating permits.
−Removed: Collection contracts,
−Removed: municipal contracts, transfer station operations and landfill closure and post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with federal, state, provincial or local environmental laws or regulations.
+Added: Collection contracts, municipal contracts, transfer station operations and landfill closure and post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with federal, state, provincial or local environmental laws or regulations.
We typically satisfy these requirements by posting bonds or letters of credit.
−Removed: As of December 31, 2020, we had $1.210 billion of such surety bonds in place and $126.3 million of letters of credit issued.
+Added: As of December 31, 2021, we had $1.301 billion of such surety bonds in place and $125.8 million of letters of credit issued and outstanding.
Closure bonds are difficult and costly to obtain.
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Accordingly, our failure to obtain performance or surety bonds, letters of credit or other financial assurances or to maintain adequate insurance coverage could limit our operations or violate federal, state, provincial, or local requirements, which could have a materially adverse effect on our business, financial condition and results of operations.
−Removed: Our operations in Canada expose us to exchange rate fluctuations that could adversely affect our financial performance and our reported results of operations .
−Removed: Our operations in Canada are conducted primarily in Canadian dollars.
−Removed: Our consolidated financial statements are denominated in U.S.
−Removed: dollars, and to prepare those financial statements we must translate the amounts of the assets, liabilities, net sales, other revenues and expenses of our operations in Canada from Canadian dollars into U.S.
−Removed: dollars using exchange rates for the current period.
−Removed: Fluctuations in the exchange rates that are unfavorable to us, including those resulting from the impact of the COVID-19 pandemic, would have an adverse effect on our financial performance and reported results of operations.
Alternatives to landfill disposal may cause our revenues and operating results to decline .
−Removed: Counties and municipalities in which we operate landfills may be required to formulate and implement comprehensive plans to reduce the volume of municipal solid waste deposited in landfills through waste planning, composting, recycling or other programs, while working to reduce the amount of waste they generate.
+Added: Counties and municipalities in which we operate landfills may be required to formulate and implement comprehensive plans to reduce the volume of MSW deposited in landfills through waste planning, composting, recycling or other programs, while working to reduce the amount of waste they generate.
Some state, provincial and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of wastes, such as yard waste, food waste and electronics, at landfills.
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The size of our potential withdrawal liability may be affected by the level of unfunded accrued benefits, the actuarial assumptions used by the plan and the investment gains and losses experienced by the plan.
+Added: We have established long-term, aspirational targets associated with sustainability-related investments and projects which may or may not be achieved .
+Added: Stakeholder input, business considerations, and potential regulation have reinforced the importance of developing and implementing ESG and sustainability initiatives.
+Added: In 2020, we adopted long-term, aspirational sustainability targets and committed over $500 million for investments and projects to these efforts.
+Added: Our ability to achieve these targets will depend significantly on, among other things, the success of these investments and projects and our ability to meet our financial and operating objectives, which can be impacted by the numerous risks and uncertainties associated with our business and the industry in which we operate.
+Added: There is a risk that some or all of the expected benefits of these investments and projects may fail to materialize, may cost more to achieve or may not occur within the anticipated time periods.
+Added: In addition, there is a risk that the actions taken by us to achieve these targets may have a negative impact on our existing business and increase capital expenditures, which could adversely affect our operating results.
+Added: Our failure to achieve these targets, or a perception among key stakeholders that such targets are insufficient or unattainable, could damage our reputation, competitive position and share price.
+Added: There is increasing interest in companies developing and implementing more robust environmental, social, and governance policies and practices and disclosure around climate-related risk identification and mitigation.
+Added: In addition, certain investors and lenders are incorporating ESG factors into their investment or lending process, alongside traditional financial considerations.
+Added: Developing and implementing policies and practices, and developing additional disclosure in relation to climate change and other environmental and social risk issues, can involve significant costs and require a significant time commitment from our Board of Directors, management and employees.
+Added: In addition, our failure to implement such policies, practices and disclosure could adversely affect our reputation, competitive position and share price and our ability to raise capital, even if our operating results or prospects have not changed.
+Added: Our Company published its 2021 Sustainability Report, available at www.wasteconnections.com/sustainability, to communicate our efforts to our investors and stakeholders.
+Added: The 2021 Sustainability Report does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K or any other report we provide to the SEC or other securities regulators.
+Added: Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .
+Added: Providing environmental and waste management services, including constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.
+Added: We are also an essential services provider, and our frontline employees have continued to provide services during the COVID-19 pandemic amid related mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings, which could involve additional risks.
+Added: Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials or odors that could be
+Added: triggered by weather or natural disasters.
+Added: There may also be risks presented by the potential for subsurface chemical reactions causing elevated landfill temperatures.
+Added: We also build and operate natural gas fueling stations, some of which also serve the public or third parties.
+Added: Operation of fueling stations and landfill gas collection and control systems involves additional risks of fire and explosion.
+Added: Any of these risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction.
+Added: While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs and the use of personal protective equipment, if we were to incur substantial liabilities in excess of any applicable insurance coverage, our business, results of operations and financial condition could be adversely affected.
+Added: Any such incidents could also tarnish our reputation and reduce the value of our brand.
+Added: Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
+Added: We depend significantly on the services of the members of our senior and regional management team, and the departure of any of those persons could cause our operating results to suffer .
+Added: Our success depends significantly on the continued individual and collective contributions of our senior and regional management team.
+Added: The loss of the services of any member of our senior and regional management, including as a result of the COVID-19 pandemic, or the inability to hire and retain experienced management personnel could harm our operating results.
+Added: Our decentralized decision-making structure could allow local managers to make decisions that may adversely affect our operating results .
+Added: We manage our operations on a decentralized basis.
+Added: Local managers have the authority to make many decisions concerning their operations without obtaining prior approval from executive officers, subject to compliance with general company-wide policies.
+Added: Poor decisions by local managers could result in the loss of customers or increases in costs, in either case adversely affecting operating results.
+Added: General Risk Factors
+Added: Our results are vulnerable to economic conditions .
+Added: Our business and results of operations may be adversely affected by changes in national or global economic conditions, including the price of crude oil.
+Added: In an economic slowdown, we may experience the negative effects of the following, any of which could negatively impact our operating income and cash flows:
+Added: decreased waste generation, increased competitive pricing pressure, increased customer turnover, and reductions in customer service requirements.
+Added: In a recessionary environment, two of our business lines that could see a more immediate impact are construction and demolition debris and E&P waste disposal, as demand for new construction or energy exploration decreases.
+Added: Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic slowdown.
+Added: In addition, a weaker economy may result in declines in recycled commodity prices.
+Added: Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations.
+Added: Further, we cannot assure you that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.
+Added: Public health crises and the effects of related governmental initiatives have adversely affected and may continue to adversely affect our business, financial condition and results of operations .
+Added: Public health crises, such as the COVID-19 pandemic, may impact our operations or our customers’ operations in ways that adversely affect our business, results of operations and financial condition.
+Added: The COVID-19 pandemic has resulted in adverse impacts to our business.
+Added: Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services.
+Added: Potential contributing factors include:
+Added: ● Mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings have impacted and may continue to impact the operations of our commercial, municipal, industrial and E&P collection customers, as well as affiliated and third-party haulers that bring waste to our landfills, transfer stations, E&P waste and recycling facilities, resulting in a decline in demand for our service offerings;
+Added: ● Weakness in the economy resulting from business closures, unemployment and other direct and indirect impacts of the COVID-19 pandemic has caused and may continue to cause customers, including residential, commercial, industrial and E&P accounts, to suffer financial difficulties and ultimately to be unable or unwilling to pay amounts owed to us.
+Added: This could negatively impact our consolidated financial condition, results of operations and cash flows;
+Added: ● To the extent that a significant percentage of our workforce is unable to work, including because of illness or government restrictions in connection with the COVID-19 pandemic, our workforce and operations will be negatively impacted;
+Added: ● The additional costs associated with the COVID-19 pandemic, including those related to emergency wages, supplemental pay, personal protective equipment, testing and extended benefits programs provided by the Company to employees affected by the COVID-19 pandemic, may impact our financial results;
+Added: ● Volatility in commodity and other input costs could substantially impact our result of operations;
+Added: ● It may become more costly or difficult to obtain debt or equity financing to fund operations or investment opportunities, or to refinance our debt in the future, in each case on terms and within a time period acceptable to us.
+Added: The ultimate extent of the impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend largely on future developments, including the duration and spread of the outbreak in the U.S.
+Added: and Canada, its severity, the actions to contain the novel coronavirus or treat its impact, including the distribution, acceptance and effectiveness of vaccines, the severity of COVID-19 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.
+Added: Our financial results are based upon estimates and assumptions that may differ from actual results .
+Added: In preparing our consolidated financial statements in accordance with U.S.
+Added: generally accepted accounting principles, or GAAP, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.
+Added: These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies.
+Added: In some cases, including those resulting from the COVID-19 pandemic and associated impacts, these estimates are particularly difficult to determine and we must exercise significant judgment.
+Added: The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty are related to our accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, asset impairments and litigation, claims and assessments.
+Added: Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition and results of operations.
+Added: Income taxes may be uncertain .
+Added: Our actual effective tax rate may vary from our expectation and that variance may be material.
+Added: Tax interpretations, regulations and legislation in the various jurisdictions in which we and our affiliates operate are subject to measurement uncertainty and the interpretations can impact net income, income tax expense or recovery, and deferred income tax assets or liabilities.
+Added: In addition, tax rules and regulations, including those relating to foreign jurisdictions, are subject to interpretation and require judgment by us that may be challenged by the taxation authorities upon audit.
+Added: Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a new federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.
+Added: Future changes to U.S., Canadian and foreign tax laws could materially adversely affect us .
+Added: We cannot give any assurance as to what our effective tax rate will be in the future, because of, among other things, uncertainty regarding the tax policies of the jurisdictions where we operate.
+Added: For example, the U.S.
+Added: Congress, the Canadian government, the Organisation for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations.
+Added: One example is in the area of base erosion and profit shifting (“BEPS”), where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
+Added: In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as base erosion and profit shifting.
+Added: The MLI entered into force in Canada on December 1, 2019 and entered into effect with respect to certain of Canada’s tax treaties on January 1, 2020 for withholding taxes and with respect to certain other taxes (including capital gains taxes) for tax years beginning on or after June 1, 2020 (which, for us and our affiliates, in general, was January 1, 2021).
+Added: The MLI may enter into effect at a later date for certain of Canada’s tax treaties with countries that have not yet completed their domestic procedures to cause the MLI to come into effect.
+Added: The MLI does not impact the tax treaty between Canada and the U.S.
+Added: In addition, in the 2021 Canadian federal budget, the Canadian government indicated it would introduce measures consistent with the OECD's recommendations in the area of hybrid mismatch arrangements.
+Added: The international tax environment continues to change as a result of these and related tax policy initiatives and reforms.
+Added: Although the timing and methods of implementation vary, numerous countries have responded to the BEPS project by implementing, or proposing to implement, changes to tax laws and tax treaties, at a rapid pace.
+Added: As a result of these and other changes, the tax laws in the United States, Canada, and other countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us and our affiliates.
+Added: As a result of the rapidly changing and increasingly complex tax environment, our cost of tax compliance may increase and adversely affect our business, financial condition and results of operations.
+Added: Our operations in Canada expose us to exchange rate fluctuations that could adversely affect our financial performance and our reported results of operations .
+Added: Our operations in Canada are conducted primarily in Canadian dollars.
+Added: Our consolidated financial statements are denominated in U.S.
+Added: dollars, and to prepare those financial statements we must translate the amounts of the assets, liabilities, net sales, other revenues and expenses of our operations in Canada from Canadian dollars into U.S.
+Added: dollars using exchange rates for the current period.
+Added: Fluctuations in the exchange rates that are unfavorable to us, including those resulting from the impact of the COVID-19 pandemic, would have an adverse effect on our financial performance and reported results of operations.
+Added: Technology and Information Security Risks
We rely on computer systems to run our business and disruptions or privacy breaches in these systems could impact our ability to service our customers and adversely affect our financial results, damage our reputation, and expose us to litigation risk .
11 unchanged sentences
If our network of security controls, policy enforcement mechanisms or monitoring systems we use to address these threats to technology fail, the theft or compromise of confidential or otherwise protected company, customer or employee information, destruction or corruption of data, security breaches or other manipulation or improper use of our systems and networks could result in financial losses from remedial actions, business disruption, loss of business or potential liability, liabilities due to the violation of privacy laws and other legal actions, and damage to our reputation.
+Added: If we are not able to develop and protect intellectual property, or if a competitor develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer .
+Added: Our existing and proposed service offerings to customers may require that we develop or license, and protect, new technologies.
+Added: We may experience difficulties or delays in the research, development, production and/or marketing of new products and services which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to bring new products and services to market.
+Added: Further, protecting our intellectual property rights and combating unlicensed copying and use of intellectual property is difficult, and any inability to obtain or protect new technologies could impact our services to customers and development of new revenue sources.
+Added: Additionally, a competitor may develop or obtain exclusive rights to a “breakthrough technology” that claims to provide a revolutionary change in traditional waste management.
+Added: If we have inferior intellectual property to our competitors, our financial results may suffer.
+Added: Legal, Regulatory and Compliance Risks
Extensive and evolving environmental, health and safety laws and regulations may restrict our operations and growth and increase our costs .
Existing environmental laws and regulations have become more stringently enforced in recent years.
−Removed: Further, with a new federal administration taking office in 2021 in the United States, it is possible that policies and initiatives of the prior administration could be reconsidered or even reversed, which could adversely affect our operating results.
−Removed: For example, a
−Removed: policy shift away from curtailment of regulation, narrowing Clean Water Act jurisdiction, or enabling oil and gas development on federal lands could adversely affect our business and our customers’ business.
+Added: Further, with a new federal administration taking office in 2021 in the United States, it is possible that policies and initiatives of the prior
+Added: administration could be reconsidered or even reversed, which could adversely affect our operating results.
+Added: For example, a policy shift away from curtailment of regulation, narrowing Clean Water Act jurisdiction, or enabling oil and gas development on federal lands could adversely affect our business and our customers’ business.
In addition, our industry is subject to regular enactment of new or amended federal, state, provincial and local environmental and health and safety statutes, regulations and ballot initiatives, as well as judicial decisions interpreting these requirements, which have become more stringent over time.
Citizen suits brought pursuant to environmental laws as well as purported class actions based on public or private nuisance and negligence claims related to alleged landfill odor concerns have proliferated, along with the use of social media to drive such efforts.
−Removed: In addition, various state, provincial and local governments and the Canadian federal government have enacted, have the authority to enact or are considering enacting laws and regulations that restrict disposal within their jurisdictions of solid waste generated outside their jurisdictions.
+Added: In addition, various state, provincial and local governments and the Canadian federal government have enacted, have the authority to enact or are considering enacting laws and regulations that restrict the movement or disposal within their jurisdictions of certain types of waste generated outside their jurisdictions.
We expect these trends to continue, which could lead to material increases in our costs for future environmental, health and safety compliance.
2 unchanged sentences
These changes could adversely affect our operations in various ways, including without limitation, by restricting the way in which we manage storm water runoff, comply with health and safety laws, treat and dispose of E&P or other waste or our ability to operate and expand our business.
−Removed: Governmental authorities and various interest groups in the United States and Canada have promoted laws and regulations designed to limit greenhouse gas, or GHG, emissions in response to growing concerns regarding climate change.
+Added: Governmental authorities and various interest groups in the United States and Canada have implemented laws and regulations designed to limit greenhouse gas, or GHG, emissions in response to growing concerns regarding climate change.
For example, the State of California, the Canadian federal government and several Canadian provinces have enacted climate change laws, and other states and provinces in which we operate are considering similar actions.
−Removed: The US EPA made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.
+Added: The EPA made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.
This finding allows the EPA to create regulations that will impact our operations – including imposing emission reporting, permitting, control technology installation and monitoring requirements, although the materiality of the impacts will not be known until all applicable regulations are promulgated and finalized.
The Canadian federal government enacted the Greenhouse Gas Pollution Pricing Act in June 2018, which established a national carbon-pricing regime starting in 2019 for provinces and territories in Canada where there is no provincial regime in place or where the provincial regime does not meet the federal benchmark.
−Removed: Often referred to as the federal backstop, the federal carbon-pricing regime consists of a carbon levy that is applied to fossil fuels and an output-based pricing system (“OBPS”) that is applied to certain industrial facilities with reported emissions of 50,000 tonnes of carbon dioxide equivalent (“CO2e”) or more per year.
−Removed: The carbon levy applies to prescribed liquid, gaseous, and solid fuels at a rate that is equivalent to $30 per tonne of CO2e in 2020, increasing annually, until it reaches $50 per tonne of CO2e by 2022.
+Added: The minimum national price on carbon in Canada is equivalent to CAD $50 per tonne CO2e in 2022.
+Added: The Canadian federal government announced a plan to further increase the carbon price by CAD $15 per year starting in 2023, reaching CAD $170 per tonne of CO2e by 2030.
On November 19, 2020, the federal government introduced Bill C-12, the Canadian Net-Zero Emissions Accountability Act, which establishes the framework for national GHG emissions reduction targets to attain net-zero emissions by 2050.
4 unchanged sentences
Further, governmental authorities have considered or have begun to implement increased regulation of PFAS and potentially other emerging contaminants, which could adversely affect our operations.
−Removed: The regulation of these substances could increase or accelerate our financial obligations associated with post-closure maintenance and other environmental remediation related to our solid waste facilities.
−Removed: Further, enhanced treatment of landfill leachate and landfill gas could adversely affect our operations in various ways, including without limitation, increased operational expenses as well as treatment and disposal costs, greater capital expenditures to meet control requirements, costs of compliance with health and safety requirements, and litigation risk.
−Removed: Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .
−Removed: Providing environmental and waste management services, including constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.
−Removed: We are also an essential services provider, and our frontline employees have continued to provide services during the COVID-19 pandemic amid related mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings, which could involve additional risks.
−Removed: Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials or odors that could be triggered by weather or natural disasters.
−Removed: There may also be risks presented by the potential for subsurface chemical reactions causing elevated landfill temperatures.
−Removed: We also build and operate natural gas fueling stations, some of which also serve the public or third parties.
−Removed: Operation of fueling stations and landfill gas collection and control systems involves additional risks of fire and explosion.
−Removed: Any of these risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction.
−Removed: While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs and the use of personal protective equipment, if we were to incur substantial liabilities in excess of any applicable insurance coverage, our business, results of operations and financial condition could be adversely affected.
−Removed: Any such incidents could also tarnish our reputation and reduce the value of our brand.
−Removed: Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
+Added: The regulation of these substances could increase or accelerate our financial obligations associated with closure obligations, post-closure maintenance and other environmental remediation related to our solid waste facilities.
+Added: Further, more stringent permitting obligations, including those relating to air and wastewater, as well as enhanced treatment of landfill leachate and landfill gas could adversely affect our operations in various ways, including without limitation, increased operational expenses as well as treatment and disposal costs, greater capital expenditures to meet control requirements, costs of compliance with permitting and health and safety requirements, and litigation risk.
+Added: We may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity .
+Added: Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations or as a result of third-party challenges, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored.
+Added: Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our operations that could interrupt or limit the scope of our business.
+Added: Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.
+Added: Pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements .
+Added: We are, and from time to time become, involved in lawsuits, regulatory inquiries, and governmental and other legal proceedings arising out of the ordinary course of our business.
+Added: Many of these matters raise complicated factual and legal issues and are subject to uncertainties and complexities, all of which make the matters costly to address.
+Added: For example, in recent years, wage and employment laws have changed regularly and become increasingly complex, which has fostered litigation, including purported class actions.
+Added: Similarly, purported class actions based on claims related to allegedly unlawful landfill odors and rates and fees charged under certain contracts for collection services have proliferated, as have citizen suits brought pursuant to environmental laws, such as those regulating the treatment of storm water runoff.
+Added: The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain.
+Added: Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our consolidated financial condition, results of operations and cash flows.
+Added: See discussion in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Extensive regulations that govern the design, operation, expansion and closure of landfills may restrict our landfill operations or increase our costs of operating landfills .
8 unchanged sentences
We may also be liable for any on-site environmental contamination caused by pollutants or hazardous substances whose transportation, treatment or disposal we or our predecessors arranged or conducted.
−Removed: Some environmental laws and regulations may impose strict, joint and several liability in connection with releases of regulated substances into the environment.
+Added: Some environmental laws and
+Added: regulations may impose strict, joint and several liability in connection with releases of regulated substances into the environment.
New or increased regulation of substances, such as PFAS or other emerging contaminants, could also lead to increased or previously unauthorized remediation costs or litigation risk.
Therefore, in some situations we could be exposed to liability as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, third parties, including our predecessors.
−Removed: If we were to incur liability for environmental damage, environmental clean-ups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial
−Removed: condition or operating results could be materially adversely affected.
+Added: If we were to incur liability for environmental damage, environmental clean-ups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial condition or operating results could be materially adversely affected.
For example, see the discussion regarding the Lower Duwamish Waterway Superfund Site Allocation Process in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
−Removed: We depend significantly on the services of the members of our senior and regional management team, and the departure of any of those persons could cause our operating results to suffer .
−Removed: Our success depends significantly on the continued individual and collective contributions of our senior and regional management team.
−Removed: Key members of our management have entered into employment agreements, but we may not be able to enforce these agreements.
−Removed: The loss of the services of any member of our senior and regional management, including as a result of the COVID-19 pandemic, or the inability to hire and retain experienced management personnel could harm our operating results.
−Removed: Our decentralized decision-making structure could allow local managers to make decisions that may adversely affect our operating results .
−Removed: We manage our operations on a decentralized basis.
−Removed: Local managers have the authority to make many decisions concerning their operations without obtaining prior approval from executive officers, subject to compliance with general company-wide policies.
−Removed: Poor decisions by local managers could result in the loss of customers or increases in costs, in either case adversely affecting operating results.
−Removed: If we are not able to develop and protect intellectual property, or if a competitor develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer .
−Removed: Our existing and proposed service offerings to customers may require that we develop or license, and protect, new technologies.
−Removed: We may experience difficulties or delays in the research, development, production and/or marketing of new products and services which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to bring new products and services to market.
−Removed: Further, protecting our intellectual property rights and combating unlicensed copying and use of intellectual property is difficult, and any inability to obtain or protect new technologies could impact our services to customers and development of new revenue sources.
−Removed: Additionally, a competitor may develop or obtain exclusive rights to a “breakthrough technology” that claims to provide a revolutionary change in traditional waste management.
−Removed: If we have inferior intellectual property to our competitors, our financial results may suffer.
−Removed: General Risk Factors
−Removed: Our results are vulnerable to economic conditions .
−Removed: Our business and results of operations may be adversely affected by changes in national or global economic conditions, including the price of crude oil.
−Removed: In an economic slowdown, we may experience the negative effects of the following, any of which could negatively impact our operating income and cash flows:
−Removed: decreased waste generation, increased competitive pricing pressure, increased customer turnover, and reductions in customer service requirements.
−Removed: In a recessionary environment, two of our business lines that could see a more immediate impact are construction and demolition debris and E&P waste disposal, as demand for new construction or energy exploration decreases.
−Removed: Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic slowdown.
−Removed: In addition, a weaker economy may result in declines in recycled commodity prices.
−Removed: Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations.
−Removed: Further, we cannot assure you that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.
−Removed: Our financial results are based upon estimates and assumptions that may differ from actual results .
−Removed: In preparing our consolidated financial statements in accordance with U.S.
−Removed: generally accepted accounting principles, or GAAP, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.
−Removed: These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies.
−Removed: In some cases, including those resulting from the COVID-19 pandemic and associated impacts, these estimates are particularly difficult to determine and we must exercise significant judgment.
−Removed: The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty are related to our accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, asset impairments and litigation, claims and assessments.
−Removed: Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition and results of operations.
−Removed: Income taxes may be uncertain .
−Removed: Our actual effective tax rate may vary from our expectation and that variance may be material.
−Removed: Tax interpretations, regulations and legislation in the various jurisdictions in which we and our affiliates operate are subject to measurement uncertainty and the interpretations can impact net income, income tax expense or recovery, and deferred income tax assets or liabilities.
−Removed: In addition, tax rules and regulations, including those relating to foreign jurisdictions, are subject to interpretation and require judgment by us that may be challenged by the taxation authorities upon audit.
−Removed: Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a new federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.
UNRESOLVED STAFF COMMENTS
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.