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Item 2. Management’s Discussion and Analysis

2022-08-03 compared with 2022-05-04 · 229 added, 143 removed, 304 unchanged (55% of the section changed)

41 unchanged sentences

Crude oil and natural gas prices historically have been volatile.

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

Subject to certain recent developments discussed below, macroeconomic and geopolitical conditions, including a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, have resulted in decreased levels of E&P activity and a corresponding decrease in demand for our E&P waste services.

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

2 unchanged sentences

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

Conversely, sustained increases in prices of crude oil as a result of inflationary pressures, the uncertainty associated with the Ukrainian conflict and any related bans on oil sales from Russia or supply chain disruptions could result in increasing levels of production activity and demand for our E&P waste services.

Conversely, sustained increases in prices of crude oil as a result of inflationary pressures, the uncertainty associated with the Ukrainian conflict and any related bans on oil sales from Russia or supply chain disruptions as recently experienced could result in increasing levels of production activity and demand for our E&P waste services.

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

1 unchanged sentence

The related economic disruptions largely associated with closures or restrictions put into effect following the onset of the COVID-19 pandemic in the first quarter of 2020 resulted in declines in solid waste commercial collection, transfer station and landfill volumes, and roll off activity.

Throughout the remaining fiscal year 2020 and during 2021, solid waste revenue and reported volumes largely reflected the pace and shape of the closures and subsequent

reopening activity, with the timing and magnitude of recovery varying by market.

Throughout the remaining fiscal year 2020 and during

2021, solid waste revenue and reported volumes largely reflected the pace and shape of the closures and subsequent reopening activity, with the timing and magnitude of recovery varying by market.

Most of the impacts to solid waste volumes associated with the pandemic have largely abated, with landfill volumes and roll off pulls returning to pre-pandemic levels.

5 unchanged sentences

To that end, since the onset of the pandemic through year-end 2021, we have incurred over $40 million in incremental COVID-19-related costs, primarily supplemental pay for frontline employees.

During Q1 2022, we continued to support our employees and their families, including approximately $10 million in supplemental pay and benefits due to surges in cases related to certain variants of COVID-19.

Through the six months ended June 30, 2022, we continued to provide support for our employees and their families, including approximately $10 million in supplemental pay and benefits due to surges in cases related to certain variants of COVID-19.

As a result of the COVID-19 pandemic and subsequent reopening activity, we have also experienced an impact to our operating costs as a result of factors including supply chain disruptions and labor constraints, as demand has recovered and competition has increased.

10 unchanged sentences

For a description of the new accounting standards that affect us, see Note 3 to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

The following table sets forth items in our Condensed Consolidated Statements of Net Income in thousands of U.S.

dollars and as a percentage of revenues for the periods indicated.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of operations

9 unchanged sentences

Net income attributable to Waste Connections

Total revenues increased $250.3 million, or 17.9%, to $1.646 billion for the three months ended March 31, 2022, from $1.396 billion for the three months ended March 31, 2021.

During the three months ended March 31, 2022, incremental revenue from acquisitions closed during, or subsequent to, the three months ended March 31, 2021, increased revenues by $112.3 million.

Operations that were divested subsequent to March 31, 2021 decreased revenues by $2.3 million for the three months ended March 31, 2022.

During the three months ended March 31, 2022, the net increase in prices charged to our customers at our existing operations was $94.0 million, consisting of $83.5 million of core price increases and surcharges of $10.5 million.

During the three months ended March 31, 2022, we overcame the nonrenewal of two large residential collection contracts subsequent to March 31, 2021, which recognized $10.7 million of revenue in the prior year period, to generate total solid waste volume in our existing business of $7.0 million due primarily to increased commercial and roll off collection and increased landfill disposal.

E&P waste revenues at facilities owned during the three months ended March 31, 2022 and 2021 increased $16.6 million due to recoveries in the demand for crude oil resulting in an increase in the value of crude oil, increases in drilling and production activity levels and increases in overall demand for our E&P waste services.

Revenues from sales of recyclable commodities at facilities owned during the three months ended March 31, 2022 and 2021 increased $15.0 million due primarily to higher prices for old corrugated cardboard, aluminum, plastics and other paper products, higher volumes collected from commercial recycling customers, which declined in the prior year period due to economic disruptions resulting from the COVID-19 pandemic, and the impact of changes in our accounting policy associated with recognizing certain recyclable commodity sales gross of selling and processing expenses.

Other revenues increased $7.7 million during the three months ended March 31, 2022, due primarily to a $2.8 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas at our Canada segment, a $2.7 million increase in intermodal revenues due primarily to reductions in shipping port logistical constraints which decreased intermodal cargo volumes in the prior year period, a $1.1 million increase in landfill gas sales at our U.S.

Total revenues increased $282.5 million, or 18.4%, to $1.816 billion for the three months ended June 30, 2022, from $1.534 billion for the three months ended June 30, 2021.

Total revenues increased $532.8 million, or 18.2%, to $3.463 billion for the six months ended June 30, 2022, from $2.930 billion for the six months ended June 30, 2021.

Acquisitions closed during, or subsequent to, the three months ended June 30, 2021 increased revenues by $144.2 million for the three months ended June 30, 2022.

Acquisitions closed during, or subsequent to, the six months ended June 30, 2021 increased revenues by $256.5 million for the six months ended June 30, 2022.

Operations that were divested subsequent to June 30, 2021 decreased revenues by $2.8 million and $5.1 million, respectively, for the three and six months ended June 30, 2022.

During the three months ended June 30, 2022, the net increase in prices charged to our customers at our existing operations was $128.6 million, consisting of $105.6 million of core price increases and surcharges of $23.0 million.

During the six months ended June 30, 2022, the net increase in prices charged to our customers at our existing operations was $222.7 million, consisting of $189.1 million of core price increases and surcharges of $33.6 million.

During the three months ended June 30, 2022, we recognized volume losses totaling $10.4 million, which was comprised of $14.1 million of residential collection volume losses primarily associated with the nonrenewal of two collection contracts subsequent to June 30, 2021, partially offset by $3.7 million in volume growth primarily attributable to increases in commercial collection and roll off collection.

During the six months ended June 30, 2022, we recognized volume losses totaling $2.0 million, which was comprised of $24.8 million of residential collection volume losses associated with the aforementioned collection contracts, partially offset by $22.8 million in volume growth primarily attributable to increases in commercial collection, roll off collection and landfill disposal.

E&P waste revenues at facilities owned during the three and six months ended June 30, 2022 and 2021 increased $19.9 million and $36.4 million, respectively, due to increases in overall demand for our E&P waste services resulting from higher demand for crude oil contributing to increases in drilling and production activity levels.

Revenues from sales of recyclable commodities at facilities owned during the three and six months ended June 30, 2022 and 2021 increased $5.7 million and $19.2 million, respectively, due primarily to higher prices for old corrugated cardboard, aluminum, plastics and other paper products, higher volumes collected from commercial recycling customers, which declined in the prior year period due to economic disruptions resulting from the COVID-19 pandemic, and the impact of changes in our accounting policy associated with recognizing certain recyclable commodity sales gross of selling and processing expenses.

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

dollar currency exchange rate resulted in a decrease in revenues of $8.5 million for the three months and six months ended June 30, 2022.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7833 and 0.8147 in the three months ended June 30, 2022 and 2021, respectively.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7863 and 0.8030 in the six months ended June 30, 2022 and 2021, respectively.

Other revenues increased $5.8 million during the three months ended June 30, 2022, due primarily to a $1.9 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas at our Canada segment, a $1.9 million increase in intermodal revenues due primarily to reductions in shipping port logistical constraints which decreased intermodal cargo volumes in the prior year period and a $2.0 million increase in other non-core revenue sources.

Other revenues increased $13.6 million during the six months ended June 30, 2022, due primarily to a $4.7 million increase resulting from higher prices for renewable energy credits associated with the generation of landfill gas at our Canada segment, a $4.6 million increase in intermodal revenues, a $1.0 million increase in landfill gas sales at our U.S.

segments and a $3.3 million increase in other non-core revenue sources.

Cost of Operations .

Total cost of operations increased $163.6 million, or 19.8%, to $989.5 million for the three months ended March 31, 2022, from $825.9 million for the three months ended March 31, 2021.

The increase was primarily the result of an increase in operating costs at our existing operations of $91.3 million and $74.2 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended March 31, 2021, partially offset by a decrease in operating costs of $1.9 million at operations divested subsequent to the three months ended March 31, 2021.

The increase in operating costs of $91.3 million at our existing operations for the three months ended March 31, 2022 consisted of an increase in labor and recurring incentive compensation expenses of $20.4 million due primarily to employee pay increases and headcount additions to support solid waste and E&P volume increases, an increase in fuel expense of $16.2 million due to higher diesel and natural gas prices, an increase in truck, container, equipment and facility maintenance and repair expenses of $11.9 million due primarily to increased collection routes and equipment operating hours and parts and service rate increases, an increase in third-party trucking and transportation expenses of $10.2 million due primarily to increased landfill special waste volumes requiring trucking and transportation services to our landfills and higher rates charged by third-party providers, an increase in third-party disposal expenses of $6.7 million due primarily to increased solid waste collection volumes, an increase in supplemental compensation to non-management personnel of $9.0 million to provide financial assistance associated with the impact of COVID-19, an increase in taxes on revenues of $4.3 million due primarily to increased revenues, an increase in expenses for purchasing and processing recyclable commodities of $3.5 million due to higher recyclable commodity values and changes in our accounting policy associated with recognizing certain recyclable commodity sales gross of selling and processing expenses, an increase in leachate expense of $2.2 million due primarily to higher precipitation in certain markets where our landfills are located, an increase in expenses for auto and workers’ compensation claims of $1.9 million due primarily to adjustments recorded in the prior year period to decrease projected losses on outstanding claims originally recorded prior to 2021, an increase in insurance premium expenses of $1.4 million due primarily to increased insurance premium costs for auto and environmental compliance, an increase in subcontracted hauling services at our solid waste operations of $1.2 million due to higher costs charged by third-party providers, an increase in intermodal rail expenses of $1.2 million due to higher cargo volumes and $4.3 million of other net expense increases, partially offset by a decrease in employee medical benefits expenses of $3.1 million due to decreased severity and declines in the quantity of medical visits.

Cost of operations as a percentage of revenues increased 0.9 percentage points to 60.1% for the three months ended March 31, 2022, from 59.2% for the three months ended March 31, 2021.

The increase as a percentage of revenues consisted of a 0.7 percentage point increase from higher fuel expense, a 0.6 percentage point increase from higher supplemental compensation to non-management personnel, a 0.3 percentage point increase from higher third-party trucking and transportation expenses, a 0.3 percentage point increase from acquisitions closed during, or subsequent to, the three months ended March 31, 2021 having operating margins lower than our company average and a 0.2 percentage point increase from higher maintenance and repair expenses, partially offset by a 0.4 percentage point decrease from lower benefits expenses, a combined 0.6 percentage point decrease from disposal and labor due to price-driven revenue increases and a 0.2 percentage point decrease from all other net changes.

SG&A expenses increased $22.0 million, or 15.6%, to $163.4 million for the three months ended March 31, 2022, from $141.4 million for the three months ended March 31, 2021.

The increase was comprised of an increase of $13.7 million in SG&A expenses at our existing operations and $8.5 million of additional SG&A expenses from operating locations at acquisitions closed during, or subsequent to, the three months ended March 31, 2021, partially offset by a decrease in SG&A expenses of $0.2 million at operations divested during, or subsequent to, the three months ended March 31, 2021.

The increase in SG&A expenses at our existing operations of $13.7 million for the three months ended March 31, 2022 was comprised of a collective increase in travel, meeting, training and community activity expenses of $5.5 million due to increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in direct acquisition expenses of $4.0 million due to an increase in acquisition activity in the current period, an increase in administrative payroll expenses of $3.5 million due primarily to annual pay and headcount increases, an increase in equity-based compensation expenses of $2.2 million associated with our annual recurring grant of restricted share units to our personnel, an increase in professional fees of $1.6 million due primarily to increased legal services, an increase of $0.8 million resulting from the payment of supplemental bonuses to non-

management employees to provide financial assistance associated with the impact of COVID-19 and $1.0 million of other net expense increases, partially offset by a decrease in deferred compensation expenses of $3.1 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked and a decrease in accrued recurring cash incentive compensation expense to our management of $1.8 million.

SG&A expenses as a percentage of revenues decreased 0.2 percentage points to 9.9% for the three months ended March 31, 2022, from 10.1% for the three months ended March 31, 2021.

The decrease as a percentage of revenues consisted of a 0.3 percentage point decrease from lower cash incentive compensation expense and a 0.2 percentage point decrease from lower deferred compensation expense, partially offset by a 0.3 percentage point increase from higher direct acquisition expenses.

Total cost of operations increased $186.7 million, or 20.7%, to $1.088 billion for the three months ended June 30, 2022, from $901.2 million for the three months ended June 30, 2021.

The increase was primarily the result of an increase in operating costs at our existing operations of $98.0 million, assuming foreign currency parity, and $95.4 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended June 30, 2021, partially offset by a decrease in operating costs of $4.3 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods and a decrease of $2.4 million from operations divested subsequent to the three months ended June 30, 2021.

The increase in operating costs of $98.0 million, assuming foreign currency parity, at our existing operations for the three months ended June 30, 2022 consisted of an increase in labor and recurring incentive compensation expenses of $26.6 million due primarily to employee pay increases and headcount additions to support solid waste and E&P volume increases, an increase in fuel expense of $24.5 million due to higher diesel and natural gas prices, an increase in third-party trucking and transportation expenses of $15.6 million due primarily to higher rates charged by third-party providers, an increase in truck, container, equipment and facility maintenance and repair expenses of $11.3 million due primarily to increased collection routes and equipment operating hours and parts and service rate increases, an increase in third-party disposal expenses of $7.3 million due primarily to increased solid waste collection volumes, an increase in expenses for purchasing and processing recyclable commodities of $3.6 million due to higher recyclable commodity values and changes in our accounting policy associated with recognizing certain recyclable commodity sales gross of selling and processing expenses, an increase in taxes on revenues of $1.7 million due primarily to increased revenues, an increase in employee medical benefits expenses of $1.7 million due to an increase in the cost of provider services, an increase in intermodal rail expenses of $1.0 million due to higher cargo volumes and $4.7 million of other net expense increases.

Total cost of operations increased $350.3 million, or 20.3%, to $2.077 billion for the six months ended June 30, 2022, from $1.727 billion for the six months ended June 30, 2021.

The increase was primarily the result of an increase in operating costs at our existing operations of $189.4 million, assuming foreign currency parity, and $169.6 million of additional operating costs from acquisitions closed during, or subsequent to, the six months ended June 30, 2021, partially offset by a decrease in operating costs of $4.4 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods and a decrease of $4.3 million from operations divested subsequent to the six months ended June 30, 2021.

The increase in operating costs of $189.4 million, assuming foreign currency parity, at our existing operations for the six months ended June 30, 2022 consisted of an increase in labor and recurring incentive compensation expenses of $47.0

million due primarily to employee pay increases and headcount additions to support solid waste and E&P volume increases, an increase in fuel expense of $40.6 million due to higher diesel and natural gas prices, an increase in third-party trucking and transportation expenses of $25.8 million due primarily to increased landfill special waste volumes requiring trucking and transportation services to our landfills and higher rates charged by third-party providers, an increase in truck, container, equipment and facility maintenance and repair expenses of $24.0 million due primarily to increased collection routes and equipment operating hours and parts and service rate increases, an increase in third-party disposal expenses of $14.1 million due primarily to increased solid waste collection volumes, an increase in supplemental compensation to non-management personnel of $9.0 million to provide financial assistance associated with the impact of COVID-19, an increase in expenses for purchasing and processing recyclable commodities of $7.1 million due to higher recyclable commodity values and changes in our accounting policy associated with recognizing certain recyclable commodity sales gross of selling and processing expenses, an increase in taxes on revenues of $6.0 million due primarily to increased revenues, an increase in expenses for auto and workers’ compensation claims of $3.0 million due primarily to adjustments recorded in the prior year period to decrease projected losses on outstanding claims originally recorded prior to 2021, an increase in leachate expense of $2.8 million due primarily to higher precipitation in certain markets where our landfills are located and higher costs charged by third parties to transport and treat leachate, an increase in intermodal rail expenses of $2.2 million due to higher cargo volumes, an increase in subcontracted hauling services at our solid waste operations of $1.6 million due to higher costs charged by third-party providers, an increase in 401(k) matching expenses of $1.0 million due to higher employee earnings and $5.2 million of other net expense increases.

Cost of operations as a percentage of revenues increased 1.1 percentage points to 59.9% for the three months ended June 30, 2022, from 58.8% for the three months ended June 30, 2021.

The increase as a percentage of revenues consisted of a 1.1 percentage point increase from higher diesel and natural gas expenses, a 0.6 percentage point increase from higher third-party trucking and transportation expenses and a 0.4 percentage point increase from acquisitions closed during, or subsequent to, the three months ended June 30, 2021 having operating margins lower than our company average, partially offset by a combined 0.8 percentage point decrease from disposal, taxes on revenues and labor due to price-driven revenue increases and a 0.2 percentage point decrease from all other net changes.

Cost of operations as a percentage of revenues increased 1.0 percentage points to 60.0% for the six months ended June 30, 2022, from 59.0% for the six months ended June 30, 2021.

The increase as a percentage of revenues consisted of a 0.9 percentage point increase from higher fuel expense, a 0.5 percentage point increase from higher third-party trucking and transportation expenses, a 0.4 percentage point increase from acquisitions closed during, or subsequent to, the six months ended June 30, 2021 having operating margins lower than our company average and a 0.1 percentage point increase from higher maintenance and repair expenses, partially offset by a combined 0.9 percentage point decrease from disposal, taxes on revenues and benefits expenses due to price-driven revenue increases.

SG&A expenses increased $10.5 million, or 6.6%, to $168.4 million for the three months ended June 30, 2022, from $157.9 million for the three months ended June 30, 2021.

The increase was comprised of an increase of $0.8 million, assuming foreign currency parity, at our existing operations and $10.7 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2021, partially offset by a decrease of $0.7 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods and a decrease of $0.3 million from operations divested subsequent to the three months ended June 30, 2021.

The increase in SG&A expenses at our existing operations of $0.8 million, assuming foreign currency parity, for the three months ended June 30, 2022 was comprised of a collective increase in travel, meetings, training and community activity expenses of $7.8 million due to increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in direct acquisition expenses of $3.6 million due to an increase in acquisition activity in the current period, an increase in administrative payroll expenses of $2.4 million due primarily to annual pay and headcount increases and $2.5 million of other net expense increases, partially offset by a decrease in deferred compensation expenses of $6.2 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease in equity-based compensation expenses of $5.3 million due to the prior year SG&A expense including an adjustment to increase the fair value of our common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, a decrease in equity-based compensation expenses of $2.0 million associated with decreases in our share price resulting in fair value measurement decreases to equity awards accounted for as liabilities that were granted to

employees of Progressive Waste prior to June 1, 2016, which are subject to valuation adjustments each period, and a decrease in accrued recurring cash incentive compensation expense to our management of $2.0 million.

SG&A expenses increased $32.4 million, or 10.8%, to $331.8 million for the six months ended June 30, 2022, from $299.4 million for the six months ended June 30, 2021.

The increase was comprised of an increase of $14.5 million, assuming foreign currency parity, at our existing operations and $19.2 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2021, partially offset by a decrease of $0.7 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods and a decrease of $0.6 million from operations divested subsequent to the six months ended June 30, 2021.

The increase in SG&A expenses at our existing operations of $14.5 million, assuming foreign currency parity, for the six months ended June 30, 2022 was comprised of a collective increase in travel, meetings, training and community activity expenses of $13.2 million due to increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in direct acquisition expenses of $7.6 million due to an increase in acquisition activity in the current period, an increase in administrative payroll expenses of $6.2 million due primarily to annual pay and headcount increases, an increase in equity-based compensation expenses of $2.7 million associated with our annual recurring grant of restricted share units to our personnel, an increase in professional fees of $1.8 million due primarily to increased legal services, an increase in software license fees of $1.2 million associated with new information technology applications, an increase of $0.8 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19 and $1.6 million of other net expense increases, partially offset by a decrease in deferred compensation expenses of $9.3 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease of $5.2 million in equity-based compensation expenses associated with the prior year period including adjustments to increase the fair value of our common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, a decrease in accrued recurring cash incentive compensation expense to our management of $3.8 million and a decrease in equity-based compensation expenses of $2.3 million associated with decreases in our share price resulting in fair value measurement decreases to equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016, which are subject to valuation adjustments each period.

SG&A expenses as a percentage of revenues decreased 1.0 percentage point to 9.3% for the three months ended June 30, 2022, from 10.3% for the three months ended June 30, 2021.

The decrease as a percentage of revenues consisted of a 0.6 percentage point decrease from lower equity compensation expenses, a 0.4 percentage point decrease from lower deferred compensation expense, a 0.3 percentage point decrease from lower cash incentive compensation expense and a 0.3 percentage point decrease from all other net changes due primarily to price-led revenue increases, partially offset by a 0.4 percentage point increase from increased travel, meetings, training and community activity expenses and a 0.2 percentage point increase from higher direct acquisition expenses.

SG&A expenses as a percentage of revenues decreased 0.6 percentage points to 9.6% for the six months ended June 30, 2022, from 10.2% for the six months ended June 30, 2021.

The decrease as a percentage of revenues consisted of a 0.3 percentage point decrease from lower equity compensation expenses, a 0.3 percentage point decrease from lower cash incentive compensation expense, a 0.3 percentage point decrease from lower deferred compensation expense and a 0.2 percentage point decrease from all other net changes due primarily to price-led revenue increases, partially offset by a 0.3 percentage point increase from increased travel, meetings, training and community activity expenses and a 0.2 percentage point increase from higher direct acquisition expenses.

Depreciation .

Depreciation expense increased $22.5 million, or 14.3%, to $179.9 million for the three months ended March 31, 2022, from $157.4 million for the three months ended March 31, 2021.

The increase was comprised of an increase in depreciation and depletion expense of $10.8 million from acquisitions closed during, or subsequent to, the three months ended March 31, 2021, an increase in depreciation expense of $6.2 million from the impact of additions to our fleet and equipment purchased to support our existing operations, an increase in depletion expense of $6.2 million resulting from increased landfill municipal solid waste, special waste and E&P volumes, partially offset by a decrease in depreciation and depletion expense of $0.7 million from operations divested subsequent to the three months ended March 31, 2021.

Depreciation expense as a percentage of revenues decreased 0.3 percentage points to 11.0% for the three months ended March 31, 2022, from 11.3% for the three months ended March 31, 2021.

The decrease as a percentage of revenues was primarily attributable to the impact of price-driven revenue increases in our solid waste services, recyclable commodity sales and renewable energy credits.

Depreciation expense increased $19.7 million, or 11.7%, to $188.9 million for the three months ended June 30, 2022, from $169.2 million for the three months ended June 30, 2021.

The increase was comprised of an increase in depreciation and depletion expense of $13.7 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2021, an increase in depreciation expense of $6.0 million from the impact of additions to our fleet and equipment purchased to support our existing operations and an increase in depletion expense of $2.0 million resulting from increased landfill E&P volumes and higher landfill development costs increasing our landfill depletion rates, partially offset by a decrease in depreciation and depletion expense of $1.1 million from operations divested subsequent to the three

months ended June 30, 2021 and a decrease of $0.9 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Depreciation expense increased $42.3 million, or 12.9%, to $368.9 million for the six months ended June 30, 2022, from $326.6 million for the six months ended June 30, 2021.

The increase was comprised of an increase in depreciation and depletion expense of $25.4 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2021, an increase in depreciation expense of $11.3 million from the impact of additions to our fleet and equipment purchased to support our existing operations and an increase in depletion expense of $8.3 million resulting from increased landfill special waste and E&P volumes and higher landfill development costs increasing our per ton landfill depletion rates, partially offset by a decrease in depreciation and depletion expense of $1.8 million from operations divested subsequent to the six months ended June 30, 2021 and a decrease of $0.9 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Depreciation expense as a percentage of revenues decreased 0.6 percentage points to 10.4% for the three months ended June 30, 2022, from 11.0% for the three months ended June 30, 2021.

Depreciation expense as a percentage of revenues decreased 0.6 percentage points to 10.6% for the six months ended June 30, 2022, from 11.2% for the six months ended June 30, 2021.

The decreases as a percentage of revenues were primarily attributable to the impact of price-driven revenue increases in our solid waste services.

Amortization of Intangibles .

Amortization of intangibles expense increased $5.4 million, or 16.9%, to $37.6 million for the three months ended March 31, 2022, from $32.2 million for the three months ended March 31, 2021.

The increase was the result of $9.0 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended March 31, 2021, partially offset by a decrease of $3.6 million from certain intangible assets becoming fully amortized subsequent to March 31, 2021.

Amortization expense as a percentage of revenues was unchanged at 2.3% for the three months ended March 31, 2022 and 2021.

Amortization of intangibles expense increased $4.8 million, or 14.5%, to $37.5 million for the three months ended June 30, 2022, from $32.7 million for the three months ended June 30, 2021.

The increase was the result of $9.7 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended June 30, 2021, partially offset by a decrease of $4.7 million from certain intangible assets becoming fully amortized subsequent to June 30, 2021 and a decrease of $0.2 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Amortization of intangibles expense increased $10.2 million, or 15.7%, to $75.1 million for the six months ended June 30, 2022, from $64.9 million for the six months ended June 30, 2021.

The increase was the result of $19.0 million from intangible assets acquired in acquisitions closed during, or subsequent to, the six months ended June 30, 2021, partially offset by a decrease of $8.6 million from certain intangible assets becoming fully amortized subsequent to June 30, 2021 and a decrease of $0.2 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Amortization expense as a percentage of revenues was unchanged at 2.1% for the three months ended June 30, 2022 and 2021 and 2.2% for the six months ended June 30, 2022 and 2021.

Impairments and Other Operating Items .

Impairments and other operating items increased $1.3 million, to net losses totaling $1.9 million for the three months ended March 31, 2022, from net losses totaling $0.6 million for the three months ended March 31, 2021.

The net losses of $1.9 million recorded during the three months ended March 31, 2022 consisted of $3.6 million of charges to terminate or write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to their original estimated termination date, partially offset by net gains of $1.7 million from disposal of property and equipment.

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

Impairments and other operating items decreased $2.0 million, to net losses totaling $4.1 million for the three months ended June 30, 2022, from net losses totaling $6.1 million for the three months ended June 30, 2021.

The net losses of $4.1 million recorded during the three months ended June 30, 2022 consisted of $2.6 million of losses on property and equipment disposals, $1.3 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $0.2 million of other net charges.

The net losses of $6.1 million recorded during the three months ended June 30, 2021 consisted of a $4.6 million loss resulting from property and equipment damaged in a facility fire, $0.6 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $0.9 million of other net charges.

Impairments and other operating items decreased $0.7 million, to net losses totaling $6.0 million for the six months ended June 30, 2022, from net losses totaling $6.7 million for the six months ended June 30, 2021.

The net losses of $6.0 million recorded during the six months ended June 30, 2022 consisted of $4.9 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date, $0.9 million of losses on property and equipment disposals and $0.2 million of other net charges.

The net losses of $6.7 million recorded during the six months ended June 30, 2021 consisted of a $4.6 million loss resulting from property and equipment damaged in a facility fire, $1.1 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $1.0 million of other net charges.

Operating Income .

Operating income increased $35.5 million, or 14.9%, to $273.9 million for the three months ended March 31, 2022, from $238.4 million for the three months ended March 31, 2021.

The increase in our operating income for the three months ended March 31, 2022 was due primarily to price increases for our solid waste services, increases in solid waste collection and disposal volumes, operating income contributions from increased sales of recyclable commodities and renewable energy credits associated with the generation of landfill gas,

operating income generated from acquisitions closed during, or subsequent to, the three months ended March 31, 2021 and an increase in earnings at our E&P waste operations.

Operating income as a percentage of revenues decreased 0.5 percentage points to 16.6% for the three months ended March 31, 2022, from 17.1% for the three months ended March 31, 2021.

The decrease in operating income as a percentage of revenues was comprised of a 0.9 percentage point increase in cost of operations and a 0.1 percentage point increase in impairments and other operating items, partially offset by a 0.3 percentage point decrease in depreciation expense and a 0.2 percentage point decrease in SG&A expense.

Operating income increased $62.8 million, or 23.5%, to $329.6 million for the three months ended June 30, 2022, from $266.8 million for the three months ended June 30, 2021.

The increase in our operating income for the three months ended June 30, 2022 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the three months ended June 30, 2021 and an increase in earnings at our E&P waste operations.

Operating income increased $98.2 million, or 19.5%, to $603.4 million for the six months ended June 30, 2022, from $505.2 million for the six months ended June 30, 2021.

The increase in our operating income for the six months ended June 30, 2022 was due primarily to price increases for our solid waste services, operating income contributions from increased sales of recyclable commodities and renewable energy credits associated with the generation of landfill gas, operating income generated from acquisitions closed during, or subsequent to, the six months ended June 30, 2021 and an increase in earnings at our E&P waste operations.

Operating income as a percentage of revenues increased 0.7 percentage points to 18.1% for the three months ended June 30, 2022, from 17.4% for the three months ended June 30, 2021.

The increase in operating income as a percentage of revenues was comprised of a 1.0 percentage point decrease in SG&A expense, a 0.6 percentage point decrease in depreciation expense and a 0.2 percentage point decrease in impairments and other operating items, partially offset by a 1.1 percentage point increase in cost of operations.

Operating income as a percentage of revenues increased 0.2 percentage points to 17.4% for the six months ended June 30, 2022, from 17.2% for the six months ended June 30, 2021.

The increase in operating income as a percentage of revenues was comprised of a 0.6 percentage point decrease in SG&A expense and a 0.6 percentage point decrease in depreciation expense, partially offset by a 1.0 percentage point increase in cost of operations.

Interest Expense .

Interest expense decreased $1.1 million, or 2.6%, to $41.3 million for the three months ended March 31, 2022, from $42.4 million for the three months ended March 31, 2021.

The decrease was primarily attributable to a decrease of $13.7 million from the repayment of $1.75 billion of senior unsecured notes in 2021, a decrease of $0.8 million from lower interest rates on borrowings outstanding under our Credit Agreement and $0.7 million of other net decreases, partially offset by an increase of $10.9 million from the issuance of $2.0 billion of senior unsecured notes subsequent to March 31, 2021 and an increase of $3.2 million due to an increase in the average borrowings outstanding under our Credit Agreement.

Interest Income .

Interest income decreased $1.0 million to $0.1 million for the three months ended March 31, 2022, from $1.1 million for the three months ended March 31, 2021.

The decrease was primarily attributable to lower average cash balances in the current period.

Interest expense increased $3.8 million, or 9.1%, to $45.1 million for the three months ended June 30, 2022, from $41.3 million for the three months ended June 30, 2021.

The increase was primarily attributable to an increase of $14.0 million from the issuance of $2.0 billion of senior unsecured notes subsequent to June 30, 2021, an increase of $2.1 million due to an increase in the average borrowings outstanding under our Credit Agreement and an increase of $0.5 million from higher interest rates on borrowings outstanding under our Credit Agreement, partially offset by a decrease of $12.6 million from the repayment of $1.75 billion of senior unsecured notes in 2021 and $0.2 million of other net decreases.

Interest expense increased $2.6 million, or 3.2%, to $86.4 million for the six months ended June 30, 2022, from $83.8 million for the six months ended June 30, 2021.

The increase was primarily attributable to an increase of $25.0 million from the issuance of $2.0 billion of senior unsecured notes subsequent to June 30, 2021 and an increase of $5.3 million due to an increase in the average borrowings outstanding under our Credit Agreement, partially offset by a decrease of $26.6 million from the repayment of $1.75 billion of senior unsecured notes in 2021 and $1.1 million of other net decreases.

Other Income (Expense), Net .

Other income (expense), net decreased $7.0 million, to an expense total of $3.5 million for the three months ended March 31, 2022, from an income total of $3.5 million for the three months ended March 31, 2021.

Other expense of $3.5 million recorded during the three months ended March 31, 2022 consisted of $1.9 million from a decline in the value of investments purchased to fund our employee deferred compensation obligations, a $1.0 million adjustment to increase certain acquisition-related accrued liabilities recorded in prior periods and $0.6 million of other net expenses.

Other income of $3.5 million recorded during the three months ended March 31, 2021 consisted of $1.2 million of income earned on investments purchased to fund our employee deferred compensation obligations, $1.2 million of adjustments to decrease certain accrued liabilities acquired in prior period acquisitions and $1.1 million in other net income sources.

Other income (expense), net decreased $1.4 million, to an expense total of $2.6 million for the three months ended June 30, 2022, from an expense total of $1.2 million for the three months ended June 30, 2021.

Other expense of $2.6 million recorded during the three months ended June 30, 2022 consisted of $4.3 million from a decline in the value of investments purchased to fund our employee deferred compensation obligations and a $1.0 million adjustment to increase certain acquisition-related accrued liabilities recorded in prior periods, partially offset by foreign currency transaction gains of $2.5 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

dollar consideration required to settle international liabilities and $0.2 million of other net income.

Other expense of $1.2 million recorded during the three months ended June 30, 2021 consisted of $1.8 million of adjustments to increase certain accrued liabilities acquired in prior period acquisitions and a $0.9 million increase in other net expenses, partially offset by $1.5 million of income earned on investments purchased to fund our employee deferred compensation obligations.

Other income (expense), net decreased $8.4 million, to an expense total of $6.1 million for the six months ended June 30, 2022, from an income total of $2.3 million for the six months ended June 30, 2021.

Other expense of $6.1 million recorded during the six months ended June 30, 2022 consisted of $6.2 million from a decline in the value of investments purchased to fund our employee deferred compensation obligations and a $2.0 million adjustment to increase certain acquisition-related accrued liabilities recorded in prior periods, partially offset by foreign currency transaction gains of $1.9 million resulting from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

dollar consideration required to settle international liabilities and $0.2 million of other net income.

Other income of $2.3 million recorded during the six months ended June 30, 2021 consisted of $2.7 million of income earned on investments purchased to fund our employee deferred compensation obligations and a $1.1 million increase in other net income sources, partially offset by $1.5 million of adjustments to increase certain accrued liabilities acquired in prior period acquisitions.

Income Tax Provision .

Income taxes increased $8.5 million, to $48.8 million for the three months ended March 31, 2022, from $40.3 million for the three months ended March 31, 2021.

Our effective tax rate for the three months ended March 31, 2022 was 21.3%.

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

The income tax provision for the three months ended March 31, 2022 included a benefit of $2.4 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

Income taxes increased $10.4 million, to $58.3 million for the three months ended June 30, 2022, from $47.9 million for the three months ended June 30, 2021.

Our effective tax rate for the three months ended June 30, 2022 was 20.6%.

Our effective tax rate for the three months ended June 30, 2021 was 21.3%.

Income taxes increased $18.9 million, to $107.1 million for the six months ended June 30, 2022, from $88.2 million for the six months ended June 30, 2021.

Our effective tax rate for the six months ended June 30, 2022 was 20.9%.

Our effective tax rate for the six months ended June 30, 2021 was 20.7%.

The income tax provision for the three and six months ended June 30, 2022 included a benefit of $0.1 million and $2.5 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

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

The income tax provision for the six months ended June 30, 2021 included a benefit of $2.0 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

2 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Industrial and construction roll off

13 unchanged sentences

Depreciation and

March 31, 2022

June 30, 2022

Corporate (a)

1 unchanged sentence

Depreciation and

March 31, 2021

June 30, 2021

Corporate (a)

Six Months Ended

Depreciation and

June 30, 2022

Corporate (a)

Six Months Ended

Depreciation and

June 30, 2021

Corporate (a)

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

2 unchanged sentences

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

Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the three month periods ended March 31, 2022, compared to the three month periods ended March 31, 2021, are discussed below.

Revenue increased $85.1 million to $421.6 million for the three months ended March 31, 2022, from $336.5 million for the three months ended March 31, 2021, due to price increases, solid waste collection and disposal volume increases, contributions from acquisitions, higher prices for recyclable commodities and higher volumes collected from commercial recycling customers.

EBITDA increased $18.7 million to $107.8 million for the three months ended March 31, 2022, from $89.1 million for the three months ended March 31, 2021.

EBITDA margin was 25.6% and 26.5% for the three months ended March 31, 2022 and 2021, respectively.

The decrease in our EBITDA margin was due primarily to increased diesel fuel expenses, increased third-party trucking and transportation expenses, increased repair and maintenance expenses, increased leachate disposal expenses and increased corporate overhead expense allocations, partially offset by decreases from disposal due to price-driven revenue increases and decreased medical benefits expenses.

Depreciation, depletion and amortization expense increased $11.8 million, to $65.3 million for the three months ended March 31, 2022, from $53.5 million for the three months ended March 31, 2021, due to assets acquired in acquisitions, higher depreciation from additions to our fleet and equipment and higher depletion from increased landfill volumes.

Revenue increased $48.9 million to $387.1 million for the three months ended March 31, 2022, from $338.2 million for the three months ended March 31, 2021, due to solid waste price increases, increased E&P waste revenues attributable to increases in drilling and production activity levels resulting in increases in the demand for our E&P waste services, contributions from acquisitions and increased roll off collection and landfill volumes, partially offset by lower residential collection volumes due to the loss of a collection contract subsequent to March 31, 2021 and a decrease resulting from the divestiture of certain non-strategic operating locations.

EBITDA increased $15.2 million to $108.6 million for the three months ended March 31, 2022, from $93.4 million for the three months ended March 31, 2021.

EBITDA margin was 28.1% and 27.6% for the three months ended March

31, 2022 and 2021, respectively.

The increase in our EBITDA margin was due to increased earnings at our E&P operations, price-led increases in solid waste revenue at locations owned in the comparable periods and decreased medical benefits expenses, partially offset by increased diesel and natural gas fuel expenses, increased vehicle and equipment maintenance and repair expenses and the impact of acquisitions closed subsequent to March 31, 2021 having lower EBITDA margins than our segment average.

Depreciation, depletion and amortization expense increased $2.1 million, to $47.6 million for the three months ended March 31, 2022, from $45.5 million for the three months ended March 31, 2021, due to assets acquired in acquisitions and higher depletion from increased solid waste and E&P landfill volumes.

Revenue increased $49.7 million to $346.7 million for the three months ended March 31, 2022, from $297.0 million for the three months ended March 31, 2021, due to contributions from acquisitions, price increases, increased collection and disposal volumes, higher prices for recyclable commodities and higher volumes collected from residential recycling customers and increased intermodal revenue.

EBITDA increased $10.9 million to $104.7 million for the three months ended March 31, 2022, from $93.8 million for the three months ended March 31, 2021.

EBITDA margin was 30.2% and 31.6% for the three months ended March 31, 2022 and 2021, respectively.

The decrease in our EBITDA margin was due to increased vehicle and equipment maintenance and repair expenses, increased diesel and natural gas fuel expenses, increased third-party trucking and transportation expenses and increased labor expenses attributable to pay rate increases, partially offset by decreases from disposal due to price-driven revenue increases and decreased medical benefits expenses.

Depreciation, depletion and amortization expense increased $6.5 million, to $36.6 million for the three months ended March 31, 2022, from $30.1 million for the three months ended March 31, 2021, due to assets acquired in acquisitions and higher depreciation from additions to our fleet and equipment.

Revenue increased $40.8 million to $276.2 million for the three months ended March 31, 2022, from $235.4 million for the three months ended March 31, 2021, due to price increases, contributions from acquisitions and higher prices for recyclable commodities.

EBITDA increased $13.0 million to $92.0 million for the three months ended March 31, 2022, from $79.0 million for the three months ended March 31, 2021.

EBITDA margin was 33.3% and 33.6% for the three months ended March 31, 2022 and 2021, respectively.

The decrease in our EBITDA margin was due to increased vehicle and equipment maintenance and repair expenses, increased diesel and natural gas fuel expenses and increased labor expenses attributable to pay rate increases, partially offset by decreased medical benefits expenses and decreased third-party trucking and transportation expenses.

Depreciation, depletion and amortization expense increased $3.4 million, to $35.0 million for the three months ended March 31, 2022, from $31.6 million for the three months ended March 31, 2021, due to assets acquired in acquisitions and higher depreciation from additions to our fleet and equipment.

Revenue increased $25.8 million to $214.7 million for the three months ended March 31, 2022, from $188.9 million for the three months ended March 31, 2021, due to price increases, contributions from acquisitions, higher commercial and roll off collection volumes, higher landfill special waste volumes, higher prices for renewable energy credits associated with the generation of landfill gas, higher prices for recyclable commodities and higher volumes collected from commercial recycling customers, partially offset by lower residential collection volumes due to the loss of a collection contract subsequent to March 31, 2021.

EBITDA increased $10.9 million to $84.8 million for the three months ended March 31, 2022, from $73.9 million for the three months ended March 31, 2021.

EBITDA margin was 39.5% and 39.1% for the three months ended March 31, 2022 and 2021, respectively.

The increase in our EBITDA margin was due to price-led increases in revenue at locations owned in the comparable periods, partially offset by increased diesel fuel expenses and increased cost of recyclable commodities expenses.

Depreciation, depletion and amortization expense increased $0.9 million, to $27.4 million for the three months ended March 31, 2022, from $26.5 million for the three months ended March 31, 2021, due to assets acquired in acquisitions and higher depletion from increased landfill volumes.

EBITDA decreased $4.0 million, to a loss of $4.7 million for the three months ended March 31, 2022, from a loss of $0.7 million for the three months ended March 31, 2021.

The decrease was due to increased equity-based compensation expenses, increased travel, meeting, training and community activity expenses, increased direct acquisition expenses, increased legal expenses and the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, partially offset by increased allocations of corporate overhead expenses to our segments, decreased deferred compensation expenses and decreased cash incentive compensation expense to our management.

Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the three and six month periods ended June 30, 2022, compared to the three and six month periods ended June 30, 2021, are discussed below.

Revenue increased $109.1 million to $478.7 million for the three months ended June 30, 2022, from $369.6 million for the three months ended June 30, 2021, due to price increases, increased commercial and roll off collection, transfer station volume increases, landfill special waste volume increases, contributions from acquisitions closed subsequent to June 30, 2021 and higher prices for recyclable commodities, partially offset by decreased residential collection volumes.

Revenue increased $194.2 million to $900.3 million for the six months ended June 30, 2022, from $706.1 million for the six months ended June 30, 2021, due to price increases, increased commercial and roll off collection, municipal solid waste disposal volume increases, contributions from acquisitions closed subsequent to June 30, 2021 and higher prices for recyclable commodities, partially offset by decreased residential collection volumes.

EBITDA increased $26.6 million to $126.0 million for the three months ended June 30, 2022, from $99.4 million for the three months ended June 30, 2021.

EBITDA margin was 26.3% and 26.9% for the three months ended June 30, 2022 and 2021, respectively.

EBITDA increased $45.3 million to $233.8 million for the six months ended June 30, 2022, from $188.5 million for the six months ended June 30, 2021.

EBITDA margin was 26.0% and 26.7% for the six months ended June 30, 2022 and 2021, respectively.

The decrease in our EBITDA margin for the three and six months ended June 30, 2022 was due primarily to increased diesel fuel expenses, increased third-party trucking and transportation expenses, increased repair and maintenance expenses, increased leachate disposal expenses and increased travel, meetings, training and community activity expenses, partially offset by benefits from price-led revenue increases.

Depreciation, depletion and amortization expense increased $11.1 million, to $70.1 million for the three months ended June 30, 2022, from $59.0 million for the three months ended June 30, 2021.

Depreciation, depletion and amortization expense increased $22.9 million, to $135.4 million for the six months ended June 30, 2022, from $112.5 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to assets acquired in acquisitions, additions to our fleet and equipment and higher depletion expense due to higher landfill development costs increasing our per ton landfill depletion rates.

Revenue increased $53.2 million to $416.5 million for the three months ended June 30, 2022, from $363.3 million for the three months ended June 30, 2021.

Revenue increased $102.0 million to $803.5 million for the six months ended June 30, 2022, from $701.5 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to solid waste price increases, increased E&P waste revenues attributable to increases in drilling and production activity levels resulting in increases in the demand for our E&P waste services, contributions from acquisitions closed subsequent to June 30, 2021 and increased roll off collection and landfill municipal solid waste volumes, partially offset by lower residential collection volumes due to the loss of a collection contract subsequent to June 30, 2021, a decrease resulting from the divestiture of certain non-strategic operating locations and lower landfill special waste volumes.

EBITDA increased $25.6 million to $124.5 million for the three months ended June 30, 2022, from $98.9 million for the three months ended June 30, 2021.

EBITDA margin was 29.9% and 27.2% for the three months ended June 30, 2022 and 2021, respectively.

EBITDA increased $40.7 million to $233.1 million for the six months ended June 30, 2022, from $192.4 million for the six months ended June 30, 2021.

EBITDA margin was 29.0% and 27.4% for the six months ended June 30, 2022 and 2021, respectively.

The increase in our EBITDA margin for the three and six months ended June 30, 2022 was due to increased earnings at our E&P operations and price-led increases in solid waste revenue, partially offset by increased diesel and natural gas fuel expenses, increased vehicle and equipment maintenance and repair expenses, the impact of acquisitions closed subsequent to June 30, 2021 having lower EBITDA margins than our segment average, increased travel, meetings, training and community activity expenses and increased legal expenses.

Depreciation, depletion and amortization expense increased $3.2 million, to $49.6 million for the three months ended June 30, 2022, from $46.4 million for the three months ended June 30, 2021.

Depreciation, depletion and amortization expense increased $5.3 million, to $97.2 million for the six months ended June 30, 2022, from $91.9 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to assets acquired in acquisitions, additions to our fleet and equipment and higher depletion expense due to increased landfill volumes and higher landfill development costs increasing our per ton landfill depletion rates, partially offset by a decrease resulting from the divestiture of certain non-strategic operating locations and a reduction in amortization expense associated with the loss of a large residential collection contract.

Revenue increased $47.1 million to $360.9 million for the three months ended June 30, 2022, from $313.8 million for the three months ended June 30, 2021.

Revenue increased $96.8 million to $707.6 million for the six months ended June 30, 2022, from $610.8 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to contributions from acquisitions closed subsequent to June 30, 2021, price increases, increased collection volumes, higher prices for recyclable commodities and increased intermodal revenue.

EBITDA increased $11.2 million to $110.6 million for the three months ended June 30, 2022, from $99.4 million for the three months ended June 30, 2021.

EBITDA margin was 30.6% and 31.7% for the three months ended June 30, 2022 and 2021, respectively.

EBITDA increased $22.1 million to $215.3 million for the six months ended June 30, 2022, from $193.2 million for the six months ended June 30, 2021.

EBITDA margin was 30.4% and 31.6% for the six months ended June 30, 2022 and 2021, respectively.

The decrease in our EBITDA margin for the three and six months ended June 30, 2022 was due to increased diesel and natural gas fuel expenses, increased third-party trucking and transportation expenses, acquisitions closed subsequent to June 30, 2021 having operating margins lower than our segment average, increased cost

of recyclable commodities expenses and increased travel, meetings, training and community activity expenses, partially offset by benefits from price-led increases in revenue.

Depreciation, depletion and amortization expense increased $6.2 million, to $37.6 million for the three months ended June 30, 2022, from $31.4 million for the three months ended June 30, 2021.

Depreciation, depletion and amortization expense increased $12.7 million, to $74.2 million for the six months ended June 30, 2022, from $61.5 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to assets acquired in acquisitions and additions to our fleet and equipment.

Revenue increased $43.1 million to $309.9 million for the three months ended June 30, 2022, from $266.8 million for the three months ended June 30, 2021.

Revenue increased $83.9 million to $586.1 million for the six months ended June 30, 2022, from $502.2 million for the six months ended June 30, 2021.

The increase for the three and six months ended June 30, 2022 was due to price increases, contributions from acquisitions closed subsequent to June 30, 2021, higher roll off collection volumes and higher prices for recyclable commodities.

EBITDA increased $14.1 million to $109.0 million for the three months ended June 30, 2022, from $94.9 million for the three months ended June 30, 2021.

EBITDA margin was 35.2% and 35.6% for the three months ended June 30, 2022 and 2021, respectively.

EBITDA increased $27.2 million to $201.1 million for the six months ended June 30, 2022, from $173.9 million for the six months ended June 30, 2021.

EBITDA margin was 34.3% and 34.6% for the six months ended June 30, 2022 and 2021, respectively.

The decrease in our EBITDA margin for the three and six months ended June 30, 2022 was due to acquisitions closed subsequent to June 30, 2021 having operating margins lower than our segment average, increased diesel and natural gas fuel expenses, increased labor expenses attributable to pay rate increases, increased vehicle and equipment maintenance and repair expenses and increased travel, meetings, training and community activity expenses, partially offset by benefits from price-led increases in revenue.

Depreciation, depletion and amortization expense increased $5.0 million, to $38.0 million for the three months ended June 30, 2022, from $33.0 million for the three months ended June 30, 2021.

Depreciation, depletion and amortization expense increased $8.4 million, to $73.0 million for the six months ended June 30, 2022, from $64.6 million for the six months ended June 30, 2021.

Revenue increased $30.1 million to $250.4 million for the three months ended June 30, 2022, from $220.3 million for the three months ended June 30, 2021, due to price increases, contributions from acquisitions closed subsequent to June 30, 2021, higher commercial and roll off collection volumes, higher prices for renewable energy credits associated with the generation of landfill gas, higher prices for recyclable commodities and higher volumes collected from commercial recycling customers, partially offset by lower residential collection volumes due to the loss of a collection contract subsequent to June 30, 2021, lower landfill special waste volumes and the divestiture of a non-strategic operating location.

Revenue increased $55.8 million to $465.1 million for the six months ended June 30, 2022, from $409.3 million for the six months ended June 30, 2021, due to price increases, contributions from acquisitions closed subsequent to June 30, 2021, higher commercial and roll off collection volumes, higher landfill special waste volumes, higher prices for renewable energy credits associated with the generation of landfill gas, higher prices for recyclable commodities and higher volumes collected from commercial recycling customers, partially offset by lower residential collection volumes due to the loss of a collection contract subsequent to June 30, 2021 and the divestiture of a non-strategic operating location.

EBITDA increased $4.0 million to $92.6 million for the three months ended June 30, 2022, from $88.6 million for the three months ended June 30, 2021.

EBITDA margin was 37.0% and 40.2% for the three months ended June 30, 2022 and 2021, respectively.

EBITDA increased $14.9 million to $177.5 million for the six months ended June 30, 2022, from $162.6 million for the six months ended June 30, 2021.

EBITDA margin was 38.2% and 39.7% for the six months ended

June 30, 2022 and 2021, respectively.

The decrease in our EBITDA margin during the three and six months ended June 30, 2022 was due to increased diesel fuel expenses, acquisitions closed subsequent to June 30, 2021 having operating margins lower than our segment average, increased cost of recyclable commodities expenses, increased disposal expenses, increased subcontracted hauling services and increased travel, meetings, training and community activity expenses, partially offset by benefits from price-led increases in revenue.

Depreciation, depletion and amortization expense increased $1.8 million, to $31.9 million for the three months ended June 30, 2022, from $30.1 million for the three months ended June 30, 2021 due to assets acquired in acquisitions and additions to our fleet and equipment, partially offset by a decrease resulting from the divestiture of a non-strategic operating location.

Depreciation, depletion and amortization expense increased $2.7 million, to $59.3 million for the six months ended June 30, 2022, from $56.6 million for the six months ended June 30, 2021 due to assets acquired in acquisitions, additions to our fleet and equipment and higher depletion expense due to increased landfill disposal volumes and higher landfill development costs increasing our per ton landfill depletion rates, partially offset by a decrease resulting from the divestiture of a non-strategic operating location.

EBITDA increased $3.7 million, to a loss of $2.7 million for the three months ended June 30, 2022, from a loss of $6.4 million for the three months ended June 30, 2021.

The increase was due to decreased equity-based compensation expenses and decreased deferred compensation expenses, partially offset by increased travel, meetings, training and community activity expenses, increased direct acquisition expenses and increased allocations of corporate overhead expenses to our segments.

EBITDA decreased $0.2 million, to a loss of $7.4 million for the six months ended June 30, 2022, from a loss of $7.2 million for the six months ended June 30, 2021.

The decrease was due to increased travel, meetings, training and community activity expenses, increased direct acquisition expenses, increased legal expenses, increased software license fees and the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of COVID-19, partially offset by decreased equity-based compensation expenses, decreased deferred compensation expenses, decreased cash incentive compensation expense to our management and decreased allocations of corporate overhead expenses to our segments.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth certain cash flow information for the three months ended March 31, 2022 and 2021 (in thousands of U.S.

Three Months Ended

The following table sets forth certain cash flow information for the six months ended June 30, 2022 and 2021 (in thousands of U.S.

Six Months Ended

Net cash provided by operating activities

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Operating Activities Cash Flows

For the three months ended March 31, 2022, net cash provided by operating activities was $440.9 million.

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

For the six months ended June 30, 2022, net cash provided by operating activities was $973.7 million.

For the six months ended June 30, 2021, net cash provided by operating activities was $848.5 million.

The $125.2 million increase was due primarily to the following:

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $54.4 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the three months ended March 31, 2021, earnings generated from the increased sales of recyclable commodities and renewal energy credits associated with the generation of landfill gas and an increase in earnings at our E&P waste operations.

2) Deferred income taxes — Our increase in net cash provided by operating activities was favorably impacted by $30.0 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $38.4 million for the three months ended March 31, 2022, compared to an increase to operating cash flows of $8.4 million for the three months ended March 31, 2021.

The increase in deferred taxes for each of the three months ended March 31, 2022 and 2021 was attributable to capital expenditures providing tax benefits resulting from accelerated tax depreciation.

3) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was favorably impacted by $20.8 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $3.6 million for the three months ended March 31, 2022, compared to a decrease to operating cash flows of $17.2 million for the three months ended March 31, 2021.

The increase for the three months ended March 31, 2022 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at March 31, 2022, partially offset by the payment of annual cash incentive compensation to our management, which was accrued as a liability at year end.

The decrease for the three months ended March 31, 2021 was due primarily to the payment of annual cash incentive compensation to our management, which was accrued as a liability at year end .

4) Deferred revenue — Our increase in net cash provided by operating activities was favorably impacted by $7.7 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $16.6 million for the three months ended March 31, 2022, compared to an increase to operating cash flows of $8.9 million for the three months ended March 31, 2021.

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $117.8 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the six months ended June 30, 2021, earnings generated from the increased sales of recyclable commodities and renewal energy credits associated with the generation of landfill gas and an increase in earnings at our E&P waste operations.

2) Deferred income taxes — Our increase in net cash provided by operating activities was favorably impacted by $81.5 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $85.0 million for the six months ended June 30, 2022, compared to an increase to operating cash flows of $3.5 million for the six months ended June 30, 2021.

The increase for the six months ended June 30, 2022 was attributable to capital expenditures providing tax benefits resulting from accelerated depreciation and tax benefits resulting from the divestiture of certain non-strategic E&P disposal operating locations.

The increase in deferred taxes for the six months ended June 30, 2021 was attributable to capital expenditures providing tax benefits resulting from accelerated tax depreciation.

3) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was favorably impacted by $47.3 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $82.8 million for the six months ended June 30, 2022, compared to an increase to operating cash flows of $35.6 million for the six months ended June 30, 2021.

The increase for the six months ended June 30, 2022 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at June 30, 2022 and increased accrued interest due to the timing of interest payments for our senior unsecured notes issued subsequent to June 30, 2021, partially offset by the payment of annual cash incentive compensation to our management, which was accrued as a liability at year end.

The increase for the six months ended June 30, 2021 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at June 30, 2021 and the timing of payroll cycles .

4) Deferred revenue — Our increase in net cash provided by operating activities was favorably impacted by $13.0 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $27.5 million for the six months ended June 30, 2022, compared to an increase to operating cash flows of $14.5 million for the six months ended June 30, 2021.

For both comparative periods, deferred revenue increased due to price increases on our advanced billed residential and commercial collection services.

5) Accounts receivable – Our increase in net cash provided by operating activities was unfavorably impacted by $33.2 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $11.2 million for the three months ended March 31, 2022, compared to an increase to operating cash flows of $22.0 million for the three months ended March 31, 2021.

The decrease for the three months ended March 31, 2022 was due to increases in revenues, which remained as outstanding receivables at March 31, 2022.

The increase for the three months ended March 31, 2021 was attributable to improved accounts receivable turnover resulting in lower uncollected receivable compared to the prior period end.

6) Prepaid expenses – Our increase in net cash provided by operating activities was unfavorably impacted by $29.8 million from prepaid expenses as changes in prepaid expenses resulted in a decrease to operating cash flows of $21.2 million for the three months ended March 31, 2022, compared to an increase to operating cash flows of $8.6 million for the three months ended March 31, 2021.

The decrease for the three months ended March 31, 2022 was due primarily to inflation-led increases in inventory, prepaid income taxes for our Canadian operations and prepaid information technology application licenses.

The increase for the three months ended March 31, 2021 was due primarily to the benefit of utilizing prior period prepaid vendor payments.

7) Other long-term liabilities – Our increase in net cash provided by operating activities was unfavorably impacted by $11.6 million from other long-term liabilities as changes in other long-term liabilities resulted in a decrease to operating cash flows of $5.5 million for the three months ended March 31, 2022, compared to an increase to operating cash flows of $6.1 million for the three months ended March 31, 2021.

The decrease for the three months ended March 31, 2022 was due primarily to distributions to employees from our deferred compensation plan.

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

As of March 31, 2022, we had a working capital surplus of $155.1 million, including cash and equivalents of $391.4 million.

Our working capital increased $355.1 million from a working capital deficit of $200.0 million at December 31, 2021 including cash and equivalents of $147.4 million, due primarily to an increase in cash balance and current income tax benefits.

5) Accounts receivable – Our increase in net cash provided by operating activities was unfavorably impacted by $64.2 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $83.3 million for the six months ended June 30, 2022, compared to a decrease to operating cash flows of $19.1 million for the six months ended June 30, 2021.

The decrease for the six months ended June 30, 2022 was due to increases in revenues, which remained as outstanding receivables at June 30, 2022.

The decrease for the six months ended June 30, 2021 was due to increases in revenues, which remained as outstanding receivables at June 30, 2021 .

6) Other long-term liabilities – Our increase in net cash provided by operating activities was unfavorably impacted by $22.7 million from other long-term liabilities as changes in other long-term liabilities resulted in a decrease to operating cash flows of $12.1 million for the six months ended June 30, 2022, compared to an increase to operating cash flows of $10.6 million for the six months ended June 30, 2021.

The decrease for the six months ended June 30, 2022 was due primarily to decreased employee deferred compensation liabilities.

The increase for the six months ended June 30, 2021 was primarily attributable to the receipt of funds associated with the eminent domain purchase of an operating facility that will be replaced with a newly constructed facility in a future period.

7) Prepaid expenses – Our increase in net cash provided by operating activities was unfavorably impacted by $49.3 million from prepaid expenses as changes in prepaid expenses resulted in a decrease to operating cash flows of $18.3 million for the six months ended June 30, 2022, compared to an increase to operating cash flows of $31.0 million for the six months ended June 30, 2021.

The decrease for the six months ended June 30, 2022 was due primarily to increases in fuel inventory, prepaid income taxes and prepaid information technology application licenses.

The increase for the six months ended June 30, 2021 was due primarily to the benefit of utilizing prior period prepaid vendor payments and prepaid income taxes .

As of June 30, 2022, we had a working capital deficit of $79.8 million, including cash and equivalents of $217.8 million.

Our working capital increased $120.2 million from a working capital deficit of $200.0 million at December 31, 2021 including cash and equivalents of $147.4 million, due primarily to an increase in cash balances, accounts receivable and current income tax benefits, partially offset by an increase in accounts payable and deferred revenue.

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

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Investing Activities Cash Flows

Net cash used in investing activities increased $389.3 million to $489.9 million for the three months ended March 31, 2022, from $100.6 million for the three months ended March 31, 2021.

Net cash used in investing activities increased $559.1 million to $891.9 million for the six months ended June 30, 2022, from $332.8 million for the six months ended June 30, 2021.

The significant components of the increase included the following:

1) An increase in cash paid for acquisitions of $479.5 million;

2) An increase in capital expenditures at operations owned in the comparable periods of $42.1 million due to increases in land and buildings, landfill site costs, trucks and containers;

3) An increase in capital expenditures at operations acquired during the comparative periods of $13.4 million due to additional trucks and containers;

2) An increase in capital expenditures at operations owned in the comparable periods of $63.5 million due to increases in land and buildings, landfill site costs, trucks, equipment and containers;

3) An increase in capital expenditures at operations acquired during the comparative periods of $36.5 million due to additional trucks, equipment and containers;

4) An increase in proceeds from disposal of assets of $9.0 million due to additional disposal of non-strategic assets to provide funding toward new capital expenditures.

Financing Activities Cash Flows

Net cash provided by financing activities increased $457.6 million to $292.1 million for the three months ended March 31, 2022, from net cash used in financing activities of $165.5 million for the three months ended March 31, 2021.

Net cash provided by financing activities increased $418.3 million to $25.1 million for the six months ended June 30, 2022, from net cash used in financing activities of $393.2 million for the six months ended June 30, 2021.

The significant components of the increase included the following:

1) An increase from the net change in long-term borrowings of $805.6 million (long-term borrowings increased $800.2 million during the three months ended March 31, 2022 and decreased $5.4 million during the three months ended March 31, 2021);

2) An increase from the change in book overdraft of $16.9 million due primarily to maintaining, in the prior year period, additional funds in our bank accounts that were used to fund outstanding checks;

1) An increase from the net change in long-term borrowings of $554.2 million (long-term borrowings increased $598.7 million during the six months ended June 30, 2022 and increased $44.5.million during the six months ended June 30, 2021);

2) A decrease from higher payments to repurchase our common shares of $119.4 million due to an increased volume of shares repurchased;

4) A decrease from higher cash dividends paid of $5.5 million due primarily to an increase in our quarterly dividend rate for the three months ended March 31, 2022 to $0.23 per share, from $0.205 per share for the three months ended March 31, 2021;

5) A decrease from higher debt issuance costs of $4.4 million attributable to senior note offerings completed in the comparative periods.

3) A decrease from higher cash dividends paid of $11.5 million due primarily to an increase in our quarterly dividend rate for the six months ended June 30, 2022 to $0.23 per share, from $0.205 per share for the six months ended June 30, 2021;

4) A decrease from higher debt issuance costs of $4.7 million attributable to senior note offerings completed in 2022.

Our business is capital intensive.

Our capital requirements include acquisitions and capital expenditures for landfill cell construction, landfill development, landfill closure activities and intermodal facility construction in the future.

On July 27, 2021, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 13,025,895 of our common shares during the period of August 10, 2021 to August 9, 2022 or until such earlier time as the NCIB is completed or terminated at our option.

August 10, 2021 to August 9, 2022 or until such earlier time as the NCIB is completed or terminated at our option.

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

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Information regarding our NCIB can be found under the “Normal Course Issuer Bid” section in Note 16 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

On July 26, 2022, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our NCIB.

The renewal is expected to commence following the conclusion of our current NCIB expiring August 9, 2022.

Upon approval, we anticipate that we will be authorized to make purchases during the period of August 10, 2022 to August 9, 2023 or until such earlier time as the NCIB is completed or terminated at our option.

Our Board of Directors authorized the initiation of a quarterly cash dividend in October 2010 and has increased it on an annual basis.

In October 2021, our Board of Directors authorized an increase to our regular quarterly cash dividend of $0.025, from $0.205 to $0.230 per share.

Cash dividends of $59.4 million and $53.9 million were paid during the three months ended March 31, 2022 and 2021, respectively.

Cash dividends of $118.8 million and $107.3 million were paid during the six months ended June 30, 2022 and 2021, respectively.

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

We made $152.3 million in capital expenditures for property and equipment during the three months ended March 31, 2022, and we expect to make total capital expenditures for property and equipment of approximately $850 million in 2022.

We made $371.4 million in capital expenditures for property and equipment during the six months ended June 30, 2022, and we expect to make total capital expenditures for property and equipment of approximately $850 million in 2022.

We have funded and intend to fund the balance of our planned 2022 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement.

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

As of March 31, 2022, $650.0 million under the term loan and $1.087 billion under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $44.7 million.

We also had $81.6 million of letters of credit issued and outstanding at March 31, 2022 under a facility other than the Credit Agreement.

As of June 30, 2022, $650.0 million under the term loan and $902.0 million under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $43.3 million.

We also had $84.6 million of letters of credit issued and outstanding at June 30, 2022 under a facility other than the Credit Agreement.

Our Credit Agreement matures in July 2026.

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Unless otherwise indicated in the relevant offering documents, we expect to use the proceeds from any such offerings for general corporate purposes, including repaying, redeeming or repurchasing debt, acquiring additional assets or businesses, capital expenditures and increasing our working capital.

As of March 31, 2022, we had the following contractual obligations:

As of June 30, 2022, we had the following contractual obligations:

Payments Due by Period

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Long-term debt payments include:

1) $1.087 billion in principal payments due July 2026 related to our revolving credit facility under our Credit Agreement.

1) $902.0 million in principal payments due July 2026 related to our revolving credit facility under our Credit Agreement.

We may elect to draw amounts on our Credit Agreement in U.S.

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dollar base rate loans, Canadian-based bankers’ acceptances or BA equivalent notes, and Canadian dollar prime rate loans.

At March 31, 2022, $824.5 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

At June 30, 2022, $723.5 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

LIBOR rate loans, which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 2.67% on such date).

At March 31, 2022, $100.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

base rate loans, which bear interest at the base rate plus the applicable margin (for a total rate of 3.50% on such date).

At March 31, 2022, $162.1 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of 1.96% on such date).

At June 30, 2022, $3.9 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian dollar prime rate loans, which bear interest at the Canadian prime rate plus the applicable prime rate margin (for a total rate of 3.70% on such date).

At June 30, 2022, $174.6 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of 3.23% on such date).

2) $650.0 million in principal payments due July 2026 related to our term loan under our Credit Agreement.

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

At March 31, 2022, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 1.46% on such date).

At June 30, 2022, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable margin (for a total rate of 2.67% on such date).

3) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes.

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10) $35.5 million in principal payments related to our notes payable to sellers and other third parties.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at March 31, 2022, and have maturity dates ranging from 2022 to 2036.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at June 30, 2022, and have maturity dates ranging from 2028 to 2036.

11) $10.8 million in principal payments related to our financing leases.

Our financing leases bear interest at a rate of 1.89% at March 31, 2022, and have expiration dates ranging from 2026 to 2027.

Our financing leases bear interest at rates between 1.89% and 2.16% at June 30, 2022, and have expiration dates ranging from 2026 to 2027.

The following assumptions were made in calculating cash interest payments:

1) We calculated cash interest payments on the Credit Agreement using the LIBOR rate plus the applicable LIBOR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at March 31, 2022.

We assumed the Credit Agreement is paid off when it matures in July 2026.

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

Contingent consideration payments include $96.0 million recorded as liabilities in our Condensed Consolidated Financial Statements at March 31, 2022, and $18.2 million of future interest accretion on the recorded obligations.

Contingent consideration payments include $90.6 million recorded as liabilities in our Condensed Consolidated Financial Statements at June 30, 2022, and $17.9 million of future interest accretion on the recorded obligations.

We are party to operating lease agreements and finance leases.

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

At March 31, 2022, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 51.9 million gallons remaining to be purchased for a total of $135.4 million.

At June 30, 2022, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 42.9 million gallons remaining to be purchased for a total of $114.7 million.

The current fuel purchase contracts expire on or before December 31, 2024.

These arrangements have not materially affected our financial position, results of operations or liquidity during the three months ended March 31, 2022, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2022, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

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

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.361 billion and $1.301 billion at March 31, 2022 and December 31, 2021, respectively.

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.374 billion and $1.301 billion at June 30, 2022 and December 31, 2021, respectively.

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

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Although we believe our reporting units would not be impaired by such dispositions, we could incur losses on them.

The disposal tonnage that we received in the three month periods ended March 31, 2022 and 2021, at all of our landfills during the respective period, is shown below (tons in thousands):

Three Months Ended March 31,

The disposal tonnage that we received in the six month periods ended June 30, 2022 and 2021, at all of our landfills during the respective period, is shown below (tons in thousands):

Six Months Ended June 30,

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

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Other companies may calculate adjusted free cash flow differently.

Our adjusted free cash flow for the three month periods ended March 31, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Our adjusted free cash flow for the six month periods ended June 30, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

Six Months Ended

Net cash provided by operating activities

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Other companies may calculate adjusted EBITDA differently.

Our adjusted EBITDA for the three month periods ended March 31, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

Our adjusted EBITDA for the three and six month periods ended June 30, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Six Months Ended

Net income attributable to Waste Connections

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Income tax provision

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

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three month periods ended March 31, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and six month periods ended June 30, 2022 and 2021, are calculated as follows (amounts in thousands of U.S.

dollars, except per share amounts):

Three Months Ended

Six Months Ended

Reported net income attributable to Waste Connections

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis