What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-03 · 311 added, 198 removed, 717 unchanged (42% of the section changed)

4 unchanged sentences

dollars, except share and per share amounts)

September 30,

Current assets:

Cash and equivalents

Accounts receivable, net of allowance for credit losses of $ 20,253 and $ 18,480 at June 30, 2022 and December 31, 2021, respectively

Accounts receivable, net of allowance for credit losses of $ 20,512 and $ 18,480 at September 30, 2022 and December 31, 2021, respectively

Prepaid expenses and other current assets

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Common shares:

257,166,050 shares issued and 257,100,591 shares outstanding at June 30, 2022;

257,183,663 shares issued and 257,118,204 shares outstanding at September 30, 2022;

260,283,158 shares issued and 260,212,496 shares outstanding at December 31, 2021

2 unchanged sentences

Treasury shares:

65,459 and 70,662 shares at June 30, 2022 and December 31, 2021, respectively

65,459 and 70,662 shares at September 30, 2022 and December 31, 2021, respectively

Retained earnings

6 unchanged sentences

dollars, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

6 unchanged sentences

Interest income

Other income (expense), net

Other income, net

Loss on early extinguishment of debt

Income before income tax provision

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(In thousands of U.S.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss), before tax:

3 unchanged sentences

Other comprehensive income (loss), before tax

Income tax (expense) benefit related to items of other comprehensive income (loss)

Income tax expense related to items of other comprehensive income

Other comprehensive income (loss), net of tax

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Balances at June 30, 2022

Vesting of restricted share units

Restricted share units released from deferred compensation plan

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

Equity-based compensation

Issuance of shares under employee share purchase plan

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

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

Foreign currency translation adjustment

Balances at September 30, 2022

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

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Balances at June 30, 2021

Vesting of restricted share units

Restricted share units released from deferred compensation plan

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

Equity-based compensation

Exercise of warrants

Issuance of shares under employee share purchase plan

Cash dividends on common shares

Amounts reclassified into earnings, net of taxes

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

Foreign currency translation adjustment

Balances at September 30, 2021

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

2 unchanged sentences

(In thousands of U.S.

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Amortization of intangibles

Loss on early extinguishment of debt

Deferred income taxes, net of acquisitions

9 unchanged sentences

Payments for acquisitions, net of cash acquired

( 1,272,910 )

Capital expenditures for property and equipment

1 unchanged sentence

Net cash used in investing activities

( 1,858,586 )

( 1,034,840 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Principal payments on notes payable and long-term debt

( 2,052,412 )

( 1,814,034 )

Premiums paid on early extinguishment of debt

Payment of contingent consideration recorded at acquisition date

8 unchanged sentences

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

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of period

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

and its subsidiaries (the “Company”) for the three and six month periods ended June 30, 2022 and 2021.

and its subsidiaries (the “Company”) for the three and nine month periods ended September 30, 2022 and 2021.

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

37 unchanged sentences

However, certain optional expedients can be applied to hedging relationships evaluated in periods after December 31, 2022.

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

The Company determined that the new guidance will not have a material effect on its consolidated financial statements.

The Company had a combined $ 1,251,000 of U.S.

LIBOR based loans as of June 30, 2022.

The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of June 30, 2022, the impact to annual interest expense would have been immaterial.

This relief is expected to permit the Company to maintain cash flow ‎hedge accounting as described in Note 11.

LIBOR based loans as of September 30, 2022.

The Company estimates that if the reference rate for these loans had transitioned from LIBOR to SOFR as of September 30, 2022, the impact to annual interest expense would have been immaterial.

In October 2022, the Company adopted the applicable practical expedients of the standard when it converted the option of a LIBOR interest rate in its Credit Agreement to a SOFR interest rate and correspondingly amended its five interest rate swap agreements that are specifically designated to the amended Credit Agreement.

As permitted by the practical expedients in the standard, the Company maintained cash flow hedge accounting for its interest rate swap agreements as the conversion of the LIBOR interest rate to SOFR was the only modification to the interest rate swap agreements.

See Notes 10 and 19 for further details on the amendment to the Credit Agreement.

The Company’s operations primarily consist of providing non-hazardous waste collection, transfer, disposal and recycling services, non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services and intermodal services.

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Industrial and construction roll off

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

Substantially all of the deferred revenue recorded as of March 31, 2022 was recognized as revenue during the three months ended June 30, 2022 when the service was performed.

Substantially all of the deferred revenue recorded as of June 30, 2022 was recognized as revenue during the three months ended September 30, 2022 when the service was performed.

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

Contract Acquisition Costs

The incremental direct costs of obtaining a contract, which consist of sales incentives, are recognized as Other assets in the Company’s Condensed Consolidated Balance Sheet, and are amortized to Selling, general and administrative expense over the estimated life of the relevant customer relationship, which ranges from one to five years .

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

that the entity would have recognized is one year or less.

The Company had $ 19,627 and $ 18,954 of deferred sales incentives at June 30, 2022 and December 31, 2021, respectively.

Contract Acquisition Costs

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

The Company had $ 19,627 and $ 18,954 of deferred sales incentives at September 30, 2022 and December 31, 2021, respectively.

ACCOUNTS RECEIVABLE

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The following is a rollforward of the Company’s allowance for credit losses for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

Beginning balance

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LANDFILL ACCOUNTING

At June 30, 2022, the Company’s landfills consisted of 84 owned landfills, five landfills operated under life-of-site operating agreements and five landfills operated under limited-term operating agreements.

The Company’s landfills had site costs with a net book value of $ 2,674,947 at June 30, 2022.

At September 30, 2022, the Company’s landfills consisted of 86 owned landfills, five landfills operated under life-of-site operating agreements and five landfills operated under limited-term operating agreements.

The Company’s landfills had site costs with a net book value of $ 2,949,498 at September 30, 2022.

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

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The Company is responsible for all final capping, closure and post-closure liabilities at the landfills it operates under life-of-site operating agreements.

The Company’s internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at its landfills.

Many of the Company’s existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted.

The Company’s landfill depletion rates are based on the remaining disposal capacity, considering both permitted and probable expansion airspace, at the landfills it owns and landfills it operates, but does not own, under life-of-site agreements.

The Company’s landfill depletion rate is based on the term of the operating agreement at its operated landfill that has capitalized expenditures.

Expansion airspace consists of additional disposal capacity being

WASTE CONNECTIONS, INC.

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

pursued through means of an expansion that has not yet been permitted.

The Company’s internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at its landfills.

Many of the Company’s existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted.

The Company’s landfill depletion rate is based on the term of the operating agreement at its operated landfill that has capitalized expenditures.

Expansion airspace consists of additional disposal capacity being pursued through means of an expansion that has not yet been permitted.

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

Based on remaining permitted capacity as of June 30, 2022, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 28 years .

As of June 30, 2022, the Company is seeking to expand permitted capacity at nine of its owned landfills and three landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

Based on remaining permitted capacity as of September 30, 2022, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 30 years .

As of September 30, 2022, the Company is seeking to expand permitted capacity at eight of its owned landfills and two landfills that it operates under life-of-site operating agreements, and considers the achievement of these expansions to be probable.

Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is approximately 34 years .

The estimated remaining lives of the Company’s owned landfills and landfills operated under life-of-site operating agreements range from 1 to 330 years , with approximately 90 % of the projected annual disposal volume from landfills with remaining lives of less than 70 years .

During the six months ended June 30, 2022 and 2021, the Company expensed $ 113,091 and $ 102,702 , respectively, or an average of $ 4.83 and $ 4.54 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

During the nine months ended September 30, 2022 and 2021, the Company expensed $ 172,118 and $ 160,470 , respectively, or an average of $ 4.88 and $ 4.56 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

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

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

During the six months ended June 30, 2022 and 2021, the Company expensed $ 7,992 and $ 7,285 , respectively, or an average of $ 0.34 and $ 0.32 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

During the nine months ended September 30, 2022 and 2021, the Company expensed $ 12,008 and $ 10,783 , respectively, or an average of $ 0.34 and $ 0.31 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2021 to June 30, 2022:

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2021 to September 30, 2022:

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

5 unchanged sentences

Foreign currency translation adjustment

Final capping, closure and post-closure liability at June 30, 2022

Liability adjustments of $ 30,238 for the six months ended June 30, 2022, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

Final capping, closure and post-closure liability at September 30, 2022

Liability adjustments of $ 36,152 for the nine months ended September 30, 2022, represent non-cash changes to final capping, closure and post-closure liabilities and are recorded on the Condensed Consolidated Balance Sheets along with an offsetting addition to site costs, which is amortized to depletion expense as the remaining landfill airspace is consumed.

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

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

At June 30, 2022 and December 31, 2021, $ 10,935 and $ 12,609 , respectively, of the Company’s restricted cash balance and $ 53,568 and $ 56,289 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

The Company acquired eight individually immaterial non-hazardous solid waste collection, transfer and recycling businesses during the six months ended June 30, 2022.

The total acquisition-related costs incurred during the six months ended June 30, 2022 for these acquisitions were $ 8,232 .

At September 30, 2022 and December 31, 2021, $ 10,632 and $ 12,609 , respectively, of the Company’s restricted cash balance and $ 53,243 and $ 56,289 , respectively, of the Company’s restricted investments balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

The Company acquired 15 individually immaterial non-hazardous solid waste collection, transfer, recycling and disposal businesses during the nine months ended September 30, 2022.

The total acquisition-related costs incurred during the nine months ended September 30, 2022 for these acquisitions were $ 18,694 .

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

The Company acquired five individually immaterial non-hazardous solid waste collection businesses during the six months ended June 30, 2021.

The total acquisition-related costs incurred during the six months ended June 30, 2021 for this acquisition were $ 583 .

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

The total acquisition-related costs incurred during the nine months ended September 30, 2021 for these acquisitions were $ 6,220 .

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

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

The following table summarizes the consideration transferred to acquire these businesses and the preliminary amounts of identifiable assets acquired and liabilities assumed at the acquisition dates for the acquisitions consummated in the nine months ended September 30, 2022 and 2021:

Fair value of consideration transferred:

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Total identifiable net assets

Goodwill acquired during the six months ended June 30, 2022 and 2021, totaling $ 156,645 and $ 47,804 , respectively, is expected to be deductible for tax purposes.

The fair value of acquired working capital related to eight individually immaterial acquisitions completed during the twelve months ended June 30, 2022, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed.

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

The gross amount of trade receivables due under contracts acquired during the six months ended June 30, 2022, was $ 17,436 , of which $ 2,780 was expected to be uncollectible.

The gross amount of trade receivables due under contracts acquired during the six months ended June 30, 2021, was $ 1,808 , of which $ 126 was expected to be uncollectible.

Goodwill acquired during the nine months ended September 30, 2022 and 2021, totaling $ 272,186 and $ 114,006 , respectively, is expected to be deductible for tax purposes.

The fair value of acquired working capital related to 11 individually immaterial acquisitions completed during the twelve months ended September 30, 2022, is provisional pending receipt of information from the acquirees to support the fair value of the assets acquired and liabilities assumed.

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

The gross amount of trade receivables due under contracts acquired during the nine months ended September 30, 2022, was $ 37,486 , of which $ 5,157 was expected to be uncollectible.

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

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

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INTANGIBLE ASSETS, NET

Intangible assets, exclusive of goodwill, consisted of the following at June 30, 2022:

Intangible assets, exclusive of goodwill, consisted of the following at September 30, 2022:

Finite-lived intangible assets:

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Intangible assets, exclusive of goodwill

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the six months ended June 30, 2022 was 15.8 years.

The weighted-average amortization period of customer lists acquired during the six months ended June 30, 2022 was 11.2 years.

The weighted-average amortization period of finite-lived permits and other acquired during the six months ended June 30, 2022 was 40.0 years.

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the nine months ended September 30, 2022 was 34.7 years.

The weighted-average amortization period of customer lists acquired during the nine months ended September 30, 2022 was 11.5 years.

The weighted-average amortization period of finite-lived permits and other acquired during the nine months ended September 30, 2022 was 40.0 years.

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

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Intangible assets, exclusive of goodwill

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

Estimated future amortization expense for the next five years relating to finite-lived intangible assets owned as of September 30, 2022 is as follows:

For the year ending December 31, 2022

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

The Company rents certain equipment and facilities under short-term agreements, non-cancelable operating lease agreements and finance leases.

The Company determines if an arrangement is or contains a lease at contract inception.

The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date.

The lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date.

Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments.

The lease guidance requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate.

Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs.

Therefore, the Company generally uses its incremental borrowing rate as the discount rate for the lease.

The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

The lease term for the Company’s leases includes the noncancelable period of the lease, plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

Lease payments included in the measurement of the lease liability comprise fixed payments or variable lease payments.

The variable lease payments take into account annual changes in the consumer price index and common area maintenance charges, if known.

ROU assets for operating and finance leases are periodically reviewed for impairment losses.

The Company uses the long-lived asset impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

The Company did no t recognize an impairment charge for any of its ROU assets during the nine months ended September 30, 2022 and 2021.

The Company monitors for events or changes in circumstances that require a reassessment of one of its leases.

When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset.

The Company did not recognize any significant remeasurements during the nine months ended September 30, 2022 and 2021.

The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less.

The Company has elected to apply the short-term lease recognition and measurement exemption allowed for in the lease accounting standard.

The Company recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

Lease cost for operating and finance leases for the three and nine months ended September 30, 2022 and 2021 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Operating lease cost

Finance lease cost:

Amortization of leased assets

Interest on leased liabilities

Total lease cost

Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows:

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

Non-cash activity:

Right-of-use assets obtained in exchange for lease liabilities - operating leases

Right-of-use assets obtained in exchange for lease liabilities - finance leases

Weighted-average remaining lease term and discount rate for the Company’s leases are as follows:

Nine Months Ended September 30,

Weighted average remaining lease term - operating leases

Weighted average remaining lease term - finance leases

Weighted average discount rate - operating leases

Weighted average discount rate - finance leases

As of September 30, 2022, future minimum lease payments, reconciled to the respective lease liabilities, are as follows:

Operating Leases

Finance Leases

Last 3 months of 2022

Minimum lease payments

imputed interest

Present value of minimum lease payments

current portion of lease liabilities

Long-term portion of lease liabilities

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

LONG-TERM DEBT

The following table presents the Company’s long-term debt as of June 30, 2022 and December 31, 2021:

The following table presents the Company’s long-term debt as of September 30, 2022 and December 31, 2021:

September 30,

Revolver under Credit Agreement, bearing interest ranging from 4.12 % to 4.76 % (a)

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3.05 % Senior Notes due 2050

2.95 % Senior Notes due 2052

Notes payable to sellers and other third parties, bearing interest ranging from 2.42 % to 10.35 %, principal and interest payments due periodically with due dates ranging from 2028 to 2036 (a)

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____________________

(a) Interest rates represent the interest rates in effect at June 30, 2022 .

(a) Interest rates represent the interest rates in effect at September 30, 2022 .

Credit Agreement

Details of the Credit Agreement are as follows:

September 30,

Revolver under Credit Agreement

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swingline loan

Amount drawn – Canadian prime rate loan

Interest rate applicable - Canadian prime rate loan

Amount drawn – Canadian bankers’ acceptance

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

In addition to the $ 43,314 of letters of credit at June 30, 2022 issued and outstanding under the Credit Agreement, the Company has issued and outstanding letters of credit totaling $ 84,617 under a facility other than the Credit Agreement.

In addition to the $ 42,708 of letters of credit at September 30, 2022 issued and outstanding under the Credit Agreement, the Company has issued and outstanding letters of credit totaling $ 84,742 under a facility other than the Credit Agreement.

On March 9, 2022, the Company completed an underwritten public offering of $ 500,000 aggregate principal amount of 3.20 % Senior Notes due 2032 (the “New 2032 Senior Notes”).

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Bank Trust Company, National Association, as successor in interest to U.S.

Bank National Association, as trustee (the “Trustee”), as supplemented by the Sixth Supplemental Indenture, dated as of March 9, 2022 (the “Supplemental Indenture” and the Base Indenture as so supplemented, the “Indenture”).

The Company will pay interest on the New 2032 Senior Notes semi-annually in arrears.

Bank National Association, as trustee (the “Trustee”), as supplemented by the Sixth Supplemental Indenture, dated as of March 9, 2022 (the “Sixth Supplemental Indenture”).

The New 2032 Senior Notes will mature on June 1, 2032 .

The New 2032 Senior Notes are the Company’s senior unsecured obligations, ranking equally in right of payment with its other existing and future unsubordinated debt and senior to any of its future subordinated debt.

The New 2032 Senior Notes are not guaranteed by any of the Company’s subsidiaries.

The Company may, prior to March 1, 2032 (three months before the maturity date) (the “Par Call Date”), redeem some or all of the New 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the New 2032 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the New 2032 Senior Notes redeemed discounted to the redemption date (assuming the New 2032 Senior Notes matured on the Par Call Date), plus, in either case, accrued and unpaid interest thereon to the redemption date.

The Company may, prior to March 1, 2032 (three months before the maturity date) (the “New 2032 Senior Notes Par Call Date”), redeem some or all of the New 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the New 2032 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the New 2032 Senior Notes redeemed discounted to the redemption date (assuming the New 2032 Senior Notes matured on the New 2032 Senior Notes Par Call Date), plus, in either case, accrued and unpaid interest thereon to the redemption date.

Commencing on March 1, 2032 (three months before the maturity date), the Company may redeem some or all of the New 2032 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the New 2032 Senior Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.

Under certain circumstances, the Company may become obligated to pay additional amounts (the “Additional Amounts”) with respect to the New 2032 Senior Notes to ensure that the net amounts received by each holder of the New 2032 Senior Notes will not be less than the amount such holder would have received if withholding taxes or deductions were not incurred on a payment under or with respect to the New 2032 Senior Notes.

If such payment of Additional Amounts are a result of a change in the laws or regulations, including a change in any official position, the introduction of an official position or a holding by a court of competent jurisdiction, of any jurisdiction from or through which payment is made by or on behalf of the New 2032 Senior Notes having power to tax, and the Company cannot avoid such payments of Additional Amounts through reasonable measures, then the Company may redeem the New 2032 Senior Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

If the Company experiences certain kinds of changes of control, each holder of the New 2032 Senior Notes may require the Company to repurchase all or a portion of the New 2032 Senior Notes for cash at a price equal to 101 % of the aggregate principal amount of such New 2032 Senior Notes, plus any accrued and unpaid interest, if any, to, but excluding the purchase date.

On August 18, 2022, the Company completed an underwritten public offering of $ 750,000 aggregate principal amount of 4.20 % Senior Notes due 2033 (the “2033 Senior Notes” and, together with the New 2032 Senior Notes, the “Senior Notes”).

The Company issued the 2033 Senior Notes under the Base Indenture, as supplemented by the Seventh Supplemental Indenture, dated as of August 18, 2022 (the “Seventh Supplemental Indenture” and the Base Indenture as supplemented by the Sixth Supplemental Indenture and the Seventh Supplemental Indenture, the “Indenture”).

The 2033 Senior Notes will mature on January 15, 2033 .

The Company may, prior to October 15, 2032 (three months before the maturity date) (the “2033 Senior Notes Par Call Date”), redeem some or all of the 2033 Senior Notes, at any time and from time to time, at a redemption price equal to the greater of 100 % of the principal amount of the 2033 Senior Notes redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the 2033 Senior Notes redeemed discounted to the redemption date (assuming the 2033 Senior Notes matured on the 2033 Senior Notes Par Call Date), plus, in either case, accrued and unpaid interest thereon to the redemption date.

Commencing on October 15, 2032 (three months before the maturity date), the Company may redeem some or all of the 2033 Senior Notes, at any time and from time to time, at a redemption price equal to the principal amount of the 2033 Senior Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.

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

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

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

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

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

a payment under or with respect to the Senior Notes.

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

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

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

The Indenture also includes customary events of default with respect to the New 2032 Senior Notes.

As of June 30, 2022, the Company was in compliance with all applicable covenants in the Indenture.

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

As of September 30, 2022, the Company was in compliance with all applicable covenants in the Indenture.

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

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

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

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

Term Loan Agreement

On October 31, 2022 (the “Effective Date”), the Company, as borrower, Bank of America, N.A., as administrative agent, and the other lenders from time to time party thereto (the “New TL Lenders”) entered into that certain Term Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Term Loan Agreement”), pursuant to which the New TL Lenders made loans to the Company in an aggregate stated principal amount of $ 800,000 .

The Term Loan Agreement permits the proceeds of borrowings thereunder to be used for (i) refinancing outstanding indebtedness, (ii) financing permitted acquisitions and financing dividends or other permitted equity distributions, (iii) capital expenditures, working capital, payment of certain transaction fees, costs and expenses and (iv) any other lawful corporate purposes.

The Company intends to use substantially all of the proceeds of borrowings under the Term Loan Agreement to repay revolving borrowings outstanding under its Credit Agreement (as defined below) following the implementation of the Term Loan Agreement

Pursuant to the terms and conditions of the Term Loan Agreement, the New TL Lenders committed to provide the term loan as set forth above, which term loan was fully drawn as of the Effective Date.

Amounts borrowed under the Term Loan Agreement and repaid or prepaid may not be reborrowed.

The Term Loan Agreement has a scheduled maturity date of July 30, 2026 .

Interest accrues on the term loan by reference to SOFR for specified interest periods (“Term SOFR”) (including for all Term SOFR loans, a credit spread adjustment of 0.10 % for all applicable interest periods) or a base rate, at the Company’s option, plus an applicable margin.

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

WASTE CONNECTIONS, INC.

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

Upon an event of default, the principal of and accrued and unpaid interest on all the New 2032 Senior Notes may be declared to be due and payable by the Trustee or the holders of not less than 25 % in principal amount of the outstanding New 2032 Senior Notes.

Upon such a declaration, such principal and accrued interest on all of the New 2032 Senior Notes will be due and payable immediately.

In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding New 2032 Senior Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of the New 2032 Senior Notes.

Under certain circumstances, the holders of a majority in principal amount of the outstanding New 2032 Senior Notes may rescind any such acceleration with respect to the New 2032 Senior Notes and its consequences.

applicable margin for Term SOFR loans ranges from 0.750 % to 1.250 % per annum, and the applicable margin for base rate loans ranges from 0.00 % to 0.250 % per annum.

The Term Loan Agreement contains customary benchmark replacement mechanics in connection with certain benchmark transition events, as well as customary mechanics with respect to the unavailability of a tenor of a then-current benchmark rate.

The borrowings under the Term Loan Agreement are unsecured and there are no subsidiary guarantors under the Term Loan Agreement.

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

During the continuance of an event of default, the New TL Lenders may take a number of actions, including, among others, declaring the entire amount then outstanding under the Term Loan Agreement and related loan documents to be due and payable.

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

Amendment No.

1 to Second Amended and Restated Revolving Credit and Term Loan Agreement

The Company is party to that certain Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 30, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Company, as borrower, Bank of America, N.A., acting through its Canada Branch, as the global agent, the swing line lender and an l/c issuer, Bank of America, N.A., as the U.S.

agent and an l/c issuer, and the lenders and any other financial institutions from time to time party thereto.

On the Effective Date, the Company entered into an amendment to the Credit Agreement (the “First Amendment”), which among other things, (i) amended certain definitions and other provisions to replace the LIBOR-based benchmark rates for certain U.S.

dollar-denominated loans and other extensions of credit under the Credit Agreement with Term SOFR, and (ii) made certain changes conforming to the Term Loan Agreement.

The rates of interest payable by the Company per annum on its outstanding revolving loans immediately prior to the Effective Date did not materially change immediately after the Effective Date as a result of the replacement of LIBOR-based benchmark rates with Term SOFR.

In addition, because the replacement of LIBOR-based benchmark rates with Term SOFR was implemented through the First Amendment and not as a result of the hardwired benchmark replacement setting provisions of the Credit Agreement, the credit spread adjustment applicable to Term SOFR loans is a flat 0.10 % per annum across all applicable interest periods instead of a varying credit spread adjustment across the same interest periods ranging from 0.11448 % to 0.42826 %.

SEGMENT REPORTING

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Eastern, Southern, Western, Central and Canada.

The Company’s five geographic solid waste operating segments comprise its reportable segments.

The Company’s five geographic solid waste operating segments comprise its

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

reportable segments.

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

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

Summarized financial information concerning the Company’s reportable segments for the three and six months ended June 30, 2022 and 2021, is shown in the following tables:

Summarized financial information concerning the Company’s reportable segments for the three and nine months ended September 30, 2022 and 2021, is shown in the following tables:

Three Months Ended

June 30, 2022

September 30, 2022

Corporate (a)

Three Months Ended

September 30, 2021

Corporate (a)

Nine Months Ended

September 30, 2022

Corporate (a)

WASTE CONNECTIONS, INC.

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

Three Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

Corporate (a)

Six Months Ended

June 30, 2022

Corporate (a), (d)

Six Months Ended

June 30, 2021

Corporate (a), (d)

____________________

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

Total assets for each of the Company’s reportable segments at September 30, 2022 and December 31, 2021, were as follows:

September 30,

The following tables show changes in goodwill during the nine months ended September 30, 2022 and 2021, by reportable segment:

Balance as of December 31, 2021

Goodwill acquired

Impact of changes in foreign currency

Balance as of September 30, 2022

WASTE CONNECTIONS, INC.

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

Total assets for each of the Company’s reportable segments at June 30, 2022 and December 31, 2021, were as follows:

The following tables show changes in goodwill during the six months ended June 30, 2022 and 2021, by reportable segment:

Balance as of December 31, 2020

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Goodwill acquisition adjustments

Goodwill divested

Impact of changes in foreign currency

Balance as of June 30, 2022

Balance as of December 31, 2020

Goodwill acquired

Goodwill acquisition adjustments

Impact of changes in foreign currency

Balance as of June 30, 2021

Balance as of September 30, 2021

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Eastern segment EBITDA

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Other income (expense), net

Loss on early extinguishment of debt

Income before income tax provision

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

DERIVATIVE FINANCIAL INSTRUMENTS

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

The interest rate swaps outstanding at June 30, 2022 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

At June 30, 2022, the Company’s derivative instruments included six interest rate swap agreements as follows:

The interest rate swaps outstanding at September 30, 2022 were specifically designated to the Credit Agreement and accounted for as cash flow hedges.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

At September 30, 2022, the Company’s derivative instruments included five interest rate swap agreements as follows:

Interest Rate

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1-month LIBOR

February 2020

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* Plus applicable margin.

The fair values of derivative instruments designated as cash flow hedges as of June 30, 2022, were as follows:

The fair values of derivative instruments designated as cash flow hedges as of September 30, 2022, were as follows:

Derivatives Designated as Cash

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Prepaid expenses and other current assets (a)

Accrued liabilities (a)

Accrued liabilities

Other assets, net

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____________________

(a) Represents the estimated amount of the existing unrealized gains and losses on interest rate swaps as of June 30, 2022 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

(a) Represents the estimated amount of the existing unrealized gains on interest rate swaps as of September 30, 2022 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.

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

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Total derivatives designated as cash flow hedges

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and six months ended June 30, 2022 and 2021:

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and nine months ended September 30, 2022 and 2021:

Amount of (Gain) or Loss Reclassified

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Three Months Ended

September 30,

Interest rate swaps

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Net of Tax (b)

Six Months Ended

Nine Months Ended

September 30,

Interest rate swaps

Interest expense

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

____________________

5 unchanged sentences

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

As of June 30, 2022 and December 31, 2021, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of June 30, 2022 and December 31, 2021, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2 within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2022 and December 31, 2021, are as follows:

As of September 30, 2022 and December 31, 2021, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values.

The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of September 30, 2022 and December 31, 2021, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2 within the fair value hierarchy.

The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of September 30, 2022 and December 31, 2021, are as follows:

Carrying Value at

Fair Value (a) at

September 30,

4.25 % Senior Notes due 2028

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3.05 % Senior Notes due 2050

2.95 % Senior Notes due 2052

____________________

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

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

WASTE CONNECTIONS, INC.

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

For details on the fair value of the Company’s interest rate swaps, restricted cash and investments and contingent consideration, refer to Note 14.

NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s shareholders for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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

9 unchanged sentences

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

At June 30, 2022 and December 31, 2021, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

At September 30, 2022 and December 31, 2021, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps.

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

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

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021, were as follows:

Fair Value Measurement at June 30, 2022 Using

The Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021, were as follows:

Fair Value Measurement at September 30, 2022 Using

Quoted Prices in

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Contingent consideration

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

Beginning balance

8 unchanged sentences

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

The components of other comprehensive income (loss) and related tax effects for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended June 30, 2022

The components of other comprehensive income (loss) and related tax effects for the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended September 30, 2022

Interest rate swap amounts reclassified into interest expense

5 unchanged sentences

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

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Interest rate swap amounts reclassified into interest expense

1 unchanged sentence

Foreign currency translation adjustment

A rollforward of the amounts included in AOCIL, net of taxes, for the six months ended June 30, 2022 and 2021, is as follows:

A rollforward of the amounts included in AOCIL, net of taxes, for the nine months ended September 30, 2022 and 2021, is as follows:

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2022

Balance at September 30, 2022

Comprehensive

4 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2021

Balance at September 30, 2021

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

6 unchanged sentences

Restricted Share Units

A summary of activity related to restricted share units (“RSUs”) during the six-month period ended June 30, 2022, is presented below:

A summary of activity related to restricted share units (“RSUs”) during the nine-month period ended September 30, 2022, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at June 30, 2022

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the six-month period ended June 30, 2022 was $ 119.39 .

Outstanding at September 30, 2022

The weighted average grant-date fair value per share for the common shares underlying the RSUs granted during the nine-month period ended September 30, 2022 was $ 120.55 .

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

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

At June 30, 2022 and 2021, the Company had 81,712 and 101,221 vested deferred RSUs outstanding, respectively.

At September 30, 2022 and 2021, the Company had 81,352 and 100,861 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

A summary of activity related to performance-based restricted share units (“PSUs”) during the six-month period ended June 30, 2022, is presented below:

A summary of activity related to performance-based restricted share units (“PSUs”) during the nine-month period ended September 30, 2022, is presented below:

Unvested Shares

1 unchanged sentence

Vested and issued

Outstanding at June 30, 2022

During the six months ended June 30, 2022, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2024 .

Outstanding at September 30, 2022

During the nine months ended September 30, 2022, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2024 .

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

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the six-month period ended June 30, 2022 was $ 117.94 .

The weighted average grant-date fair value per share for the common shares underlying all PSUs granted during the nine-month period ended September 30, 2022 was $ 117.94 .

WASTE CONNECTIONS, INC.

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Deferred Share Units

A summary of activity related to deferred share units (“DSUs”) during the six-month period ended June 30, 2022, is presented below:

A summary of activity related to deferred share units (“DSUs”) during the nine-month period ended September 30, 2022, is presented below:

Vested Shares

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Outstanding at September 30, 2022

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

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the six-month period ended June 30, 2022 was $ 121.00 .

The weighted average grant-date fair value per share for the common shares underlying the DSUs granted during the nine-month period ended September 30, 2022 was $ 121.00 .

Other Restricted Share Units

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

A summary of activity related to Progressive Waste RSUs during the six-month period ended June 30, 2022, is presented below:

A summary of activity related to Progressive Waste RSUs during the nine-month period ended September 30, 2022, is presented below:

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Outstanding at September 30, 2022

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

2 unchanged sentences

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

A summary of activity related to Progressive Waste share-based options during the six-month period ended June 30, 2022, is presented below:

A summary of activity related to Progressive Waste share-based options during the nine-month period ended September 30, 2022, is presented below:

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Outstanding at September 30, 2022

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

10 unchanged sentences

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

Under the ESPP, employees purchased 12,015 of the Company’s common shares for $ 1,554 during the six months ended June 30, 2022.

Under the ESPP, employees purchased 26,582 of the Company’s common shares for $ 3,271 during the nine months ended September 30, 2022.

Normal Course Issuer Bid

8 unchanged sentences

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

For the six months ended June 30, 2022, the Company repurchased 3,388,155 common shares pursuant to the NCIB in effect during that period at an aggregate cost of $ 424,999 .

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

As of June 30, 2022, the remaining maximum number of shares available for repurchase under the current NCIB was 9,379,908 .

For the nine months ended September 30, 2022, the Company repurchased 3,388,155 common shares pursuant to the NCIB in effect during that period at an aggregate cost of $ 424,999 .

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

As of September 30, 2022, the remaining maximum number of shares available for repurchase under the current NCIB was 12,859,066 .

Cash Dividend

In October 2021, the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.025 , from $ 0.205 to $ 0.23 per Company common share.

Cash dividends of $ 118,812 and $ 107,330 were paid during the six months ended June 30, 2022 and 2021, respectively.

Cash dividends of $ 177,710 and $ 160,754 were paid during the nine months ended September 30, 2022 and 2021, respectively.

COMMITMENTS AND CONTINGENCIES

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federal, state and local agencies.

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

In these proceedings, an agency may subpoena the

WASTE CONNECTIONS, INC.

2 unchanged sentences

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

Company, including an operating permit.

Company for records, or seek to impose fines on the Company or revoke or deny renewal of an authorization held by the Company, including an operating permit.

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

1 unchanged sentence

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

Except as noted in the matters described below, as of June 30, 2022, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Lower Duwamish Waterway Superfund Site Allocation Process

In November 2012, the Company’s subsidiary, Northwest Container Services, Inc.

(“NWCS”), was named by the U.S.

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

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

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

On December 2, 2014, the EPA issued its Record of Decision describing the selected clean-up remedy, and therein estimated that clean-up costs (in present value dollars as of November 2014) would total approximately $ 342,000 .

It is possible, however, that additional costs could be incurred based upon various factors, resulting in potentially even higher response costs.

In addition to potential response costs, PRPs could bear responsibility for natural resource damages (“NRD”).

NWCS has received correspondence from entities acting as natural resources trustees alleging that NWCS (and presumably other PRPs) could bear responsibility for NRD at the LDW Site.

This correspondence also notified NWCS of the opportunity to participate in the development and performance of an NRD Plan and Assessment.

NWCS formally declined to participate in that process, and since providing its response has not been approached regarding any NRD claim or settlement.

After receipt of its notice as a PRP, NWCS, several dozen other PRPs and a neutral allocator entered into an agreement to conduct a confidential and non-binding allocation of certain past response costs allegedly incurred at the LDW Site as well as anticipated future response costs.

In May 2022, the allocator issued its Final Allocation Report (“FAR”).

While the parties’ allocations are confidential, based upon NWCS’ allocation in the FAR, the Company believes that NWCS’ overall potential liability should be generally small relative to the majority of PRPs and does not believe that NWCS’ allocation for cleanup costs as well as potential responsibility for NRD will be material to the Company.

The settlement process, however, is complicated.

EPA has indicated that it will seek a PRP conducted remedy, but it is not unusual for parties with very small shares of liability to be able to negotiate cash out settlements in these matters.

For these and other reasons, the prospects for settlement at this time are uncertain, but NWCS will continue to vigorously defend itself in connection with any allocation of costs associated with cleanup as well as NRD.

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS OF U.S.

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

Except as noted in the matters described below, as of September 30, 2022, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse effect on its business, financial condition, results of operations or cash flows.

Los Angeles County, California Landfill Expansion Litigation

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(a) an injunction and writ of mandate against certain of the CUP’s operational restrictions, taxes and fees, (b) a declaration that the challenged conditions are unconstitutional and in violation of state and federal statutes, (c) reimbursement for any such illegal fees paid under protest, (d) damages, (e) an award of just compensation for a taking, (f) attorney fees, and (g) all other appropriate legal and equitable relief.

Following extensive litigation in 2018 and 2019 on the permissible scope of CCL’s challenge, full briefing occurred on June 22, 2020 on six of CCL’s causes of action, and the Superior Court issued its decision on July 2, 2020, granting CCL’s petition for writ of mandate in part and denying it in part.

Following extensive litigation in 2018 and 2019 on the permissible scope of CCL’s challenge, full briefing occurred, and oral argument was held on June 22, 2020 on six of CCL’s causes of action.

The Superior Court issued its decision on July 2, 2020, granting CCL’s petition for writ of mandate in part and denying it in part.

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

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

A trial on CCL’s remaining causes of action is scheduled for December 5, 2022.

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

After entry of final judgment and resolution of any appeals, the Superior Court will issue a writ directing the County Board of Supervisors to set aside its decision on the permit with respect to 12 of the challenged conditions.

The Board will be allowed to make additional findings to support four of those conditions and reconsider its permit decision in light of the Superior Court’s writ.

CCL will continue to vigorously prosecute the lawsuit.

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

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

The County, through its DRP, issued a Notice of Violation, dated December 11, 2017 (the “NOV”), alleging that CCL violated certain conditions of the CUP, including Condition 79(B)(6) of the CUP by failing to pay an $ 11,600 Bridge & Thoroughfare Fee (“B&T Fee”) that was purportedly due on July 25, 2017.

The alleged B&T fee was ostensibly to fund the construction of transportation infrastructure in the area of the Landfill.

At the time the NOV was issued, CCL had

On October 11, 2022, CCL

WASTE CONNECTIONS, INC.

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

already contested the legality of the B&T fee in the October 20, 2017 Complaint filed against the County in Los Angeles County Superior Court, described above under paragraph A (the “CUP lawsuit”).

and the County entered into a settlement agreement that requires Chiquita to file a CUP modification application with the County embodying the terms of the settlement agreement.

If the CUP modification application is approved by the County and certain other contingencies are satisfied, Chiquita will dismiss this lawsuit.

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

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

The alleged B&T fee was ostensibly to fund the construction of transportation infrastructure in the area of the Landfill.

At the time the NOV was issued, CCL had already contested the legality of the B&T fee in the October 20, 2017 Complaint filed against the County in Los Angeles County Superior Court, described above under paragraph A (the “CUP lawsuit”).

On January 12, 2018, CCL filed an appeal of the alleged violations in the NOV.

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The Court indicated that the NOV case would be coordinated with the CUP lawsuit.

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

it is now set for trial on December 13, 2022.

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

CCL will continue to vigorously prosecute the lawsuit.

On October 11, 2022, CCL and the County entered into a settlement agreement, described above under paragraph A.

If the CUP modification application is approved by the County and certain other contingencies are satisfied, Chiquita will dismiss this lawsuit.

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

SUBSEQUENT EVENTS

On August 2, 2022 , the Company announced that its Board of Directors approved a regular quarterly cash dividend of $ 0.23 per Company common share.

The dividend will be paid on September 1, 2022 , to shareholders of record on the close of business on August 18, 2022 .

On July 26, 2022, the Company’s Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of its NCIB.

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

Upon approval, the Company anticipates that it 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 the Company’s option.

On November 2, 2022 , the Company announced that its Board of Directors increased its regular quarterly cash dividend by $ 0.025 , from $ 0.23 to $ 0.255 per Company common share, and then declared a regular quarterly cash dividend of $ 0.255 per Company common share.

The dividend will be paid on December 1, 2022 , to shareholders of record on the close of business on November 16, 2022 .

See Note 10 for a discussion of the Term Loan Agreement and Amendment No.

1 to the Company’s Second Amended and Restated Revolving Credit and Term Loan Agreement, both of which became effective on October 31, 2022.

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

What changed 10-Q

Item 1. Financial Statements