What changed in this filing

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Item 1A. Risk Factors

2023-02-16 compared with 2022-02-17 · 96 added, 88 removed, 314 unchanged (37% of the section changed)

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If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time, our revenues could decline.

In addition, existing and future competitors may develop or offer services or new technologies, new facilities or other advantages.

In addition, existing and future competitors may develop or offer new services or technologies, new facilities or other advantages.

Our inability to compete effectively could hinder our growth or negatively impact our operating results.

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We seek price increases necessary to offset increased costs, to improve operating margins and to obtain adequate returns on our deployed capital.

Contractual, general economic, competitive or market-specific conditions, including the impact of public health crises such as the COVID-19 pandemic, sometimes limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.

Continuing outsized inflationary pressures may outpace price increases or drive the need for additional price increases;

and, contractual, general economic, competitive or market-specific conditions sometimes limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.

As a result of these factors, we may be unable to offset increases in costs, improve operating margins and obtain adequate investment returns through price increases.

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We expect that increased consolidation in the solid waste services industry will continue to reduce the number of attractive acquisition candidates.

Moreover, general economic conditions, including public health crises such as the COVID-19 pandemic, and the environment for attractive investments may affect the desire of the owners of acquisition candidates to sell their companies.

Moreover, general economic conditions and the factors impacting the environment for attractive investments, including inflationary pressures and higher interest rates, may affect the desire of the owners of acquisition candidates to sell their companies.

As a result, we may have fewer acquisition opportunities, and those opportunities may be on less attractive terms than in the past, which could cause a reduction in our rate of growth from acquisitions.

In addition, the COVID-19 pandemic may lengthen the time required to negotiate and complete acquisitions due to logistical constraints associated with business closures or travel restrictions.

Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to do so.

While we expect we will be able to fund some of our acquisitions with our existing resources, additional financing to pursue additional acquisitions may be required.

However, particularly if market conditions deteriorate, we may be unable to secure additional financing or any such additional financing may not be available to us on favorable terms, which could have an impact on our flexibility to pursue additional acquisition opportunities.

However, particularly if market conditions deteriorate, we may be unable to secure additional financing or additional financing may not be available to us on favorable terms, which could have an impact on our flexibility to pursue additional acquisition opportunities.

In addition, disruptions in the capital and credit markets could adversely affect our ability to draw on our credit facility or raise other capital.

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Many franchise agreements and municipal contracts are for a specified term and are, or will be, subject to competitive bidding in the future.

For example, we have approximately 492 contracts, representing approximately 3.1% of our annual revenues, which were set for expiration or automatic renewal on or before December 31, 2022.

For example, we have approximately 362 contracts, representing approximately 3.0% of our annual revenues, which are set for expiration or automatic renewal on or before December 31, 2023.

Although we intend to bid on existing contracts subject to competitive bidding in the future and additional municipal contracts and franchise agreements, we may not be the successful bidder, or we may need to lower our price in order to retain the contract.

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Municipalities sometimes also promulgate “flow control” laws and regulations requiring us to deliver waste we collect within a particular jurisdiction to facilities not owned or controlled by us, which could increase our costs and reduce our revenues.

Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones .

Our financial and operating performance may be affected by restrictions associated with renewals or the inability to renew landfill operating permits, obtain new landfills and expand existing ones .

We currently own and/or operate 100 landfills throughout the United States and Canada.

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It has become increasingly difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management facilities, including landfills and transfer stations.

Although the process generally takes less time, the process of obtaining permits and approvals for E&P landfills has similar uncertainties.

In addition, approvals may include operating restrictions or additional requirements, which could impact financial results.

Although generally less time consuming, the process of obtaining permits and approvals for E&P landfills has similar uncertainties.

Operating permits for landfills in states and provinces where we operate must generally be renewed every five to ten years, although some permits are required to be renewed more frequently.

These operating permits often must be renewed several times during the permitted life of a landfill.

The permit and approval process is often time consuming, requires numerous hearings and compliance with zoning, environmental and other requirements.

The permit and approval process is often time consuming, requiring numerous hearings and compliance with zoning, environmental and other requirements.

States and municipalities are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.

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The permitting and approval process is frequently challenged by special interest and other groups, including those utilizing social media to further their objectives, and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration than we believed was otherwise required by law, or burdensome terms and conditions being imposed on our operations.

For example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A.

Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 13, “Commitments and Contingencies,” of our consolidated financial

statements included in Item 8 of this Annual Report on Form 10-K.

This process may be further complicated by the COVID-19 pandemic, which has and may continue to impact the timeliness of the receipt of approvals and permits.

example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A.

Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

We may not be able to obtain new landfill sites or expand the permitted capacity of our existing landfills when necessary, and may ultimately be required to expense up to the carrying value of the landfill or expansion project, less the recoverable value of the property and other amounts recovered.

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Labor is one of our highest costs and relatively small increases in labor costs per employee could materially affect our cost structure.

A shortage of qualified employees in our markets, including due to the COVID-19 pandemic, would require us to incur additional costs related to wages and benefits, including, for example, our targeted minimum wage increase to $15 per hour (CAD $16 per hour in Canada), to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.

A shortage of qualified employees in our markets, including due to impacts dating back to the COVID-19 pandemic, would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.

In addition, higher turnover can result in increased costs associated with recruiting and training;

it can also impact operating costs, including maintenance and risk.

As a result of the COVID-19 pandemic and subsequent labor constraints, we have experienced increased competition with other businesses in our markets for qualified employees as a result of the labor supply being tight in our markets, which has driven higher turnover and increased the time it takes to fill job openings.

Moreover, as an essential services provider, in March 2020 we implemented temporary emergency wages, supplemental pay and extended benefits programs for our frontline workforce and other employees directly or indirectly affected by the COVID-19 pandemic, which were partially offset by cost reductions in other areas.

Increases in capital expenditures could impact our financial results .

As a result of the COVID-19 pandemic and subsequent labor constraints, we have experienced increased competition with other businesses in our markets for qualified employees, which has driven higher turnover and increased the time it takes to fill job openings.

Moreover, through January 2022 we continued to provide supplemental pay for our frontline workforce in response to labor constraints associated with the COVID-19 pandemic.

Increases in capital expenditures and the timing of receipt of fleet and equipment could impact our financial results .

Increases in fleet, equipment and landfill construction costs due to cost pressures, acquisitions and new contracts could result in capital expenditures being higher than anticipated.

In addition, supply chain disruptions and inflationary pressures, including those related to the COVID-19 pandemic, have and are expected to continue to result in higher costs, delays or lack of availability of fleet, equipment or supplies.

This could impact our ability to generate free cash flow in line with our expectations or otherwise adversely affect our financial results.

This could impact our ability to generate free cash flow in line with our expectations, the timing of our free cash flow generation, or otherwise adversely affect our financial results.

The level of exploration, development and production activity of E&P companies will impact the demand for our E&P waste services.

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We may not achieve these goals unless we effectively combine the operations of acquired businesses with our existing operations.

Similar risks may affect contracts that we are awarded to operate municipally-owned assets, such as landfills.

In addition, we are not always able to control the timing of our acquisitions.

Our inability to complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our share price to decline.

Our inability to

complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our share price to decline.

In addition, we may change our strategy with respect to a market or acquired businesses and decide to sell such operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets.

Similar risks may affect contracts that we are awarded to operate municipally-owned assets, such as landfills.

Some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.

Some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil or the value of recycled commodities, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.

In addition, acquisitions may have liabilities or risks that we fail or are unable to discover, or that become more adverse to our business than we anticipated at the time of acquisition.

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In addition, our insurance program may not cover such sites and will not cover liabilities associated with some environmental issues that may have existed prior to attachment of coverage.

For example, see the discussions regarding the Lower Duwamish Waterway Superfund Site Allocation Process in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

A successful uninsured claim against us could harm our financial condition or operating results.

Additionally, there may be other risks of which we are unaware that could have an adverse effect on businesses that we acquire or have acquired, such as foreign, state, provincial and local regulation and administrative risks.

Another example of risk is interested parties that may bring actions against us in connection with operations that we acquire or have acquired.

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and the demand for paper products, which impacts fiber, along with the extent to which manufacturers rely on recycled feedstock.

During 2022, the value of recycled commodities decreased as a result of lower demand for fiber and other commodities associated with expectations of an economic slowdown.

The pace of any recovery and the degree to which demand increases may impact the timing and extent of any recovery of recycled commodity values.

Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, particularly in residential collection, which results in increased processing and residual disposal costs to achieve quality standards.

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Therefore, if we recognize increased revenues resulting from higher prices for recyclable commodities, the rebates we pay to suppliers will also increase, which also may impact our operating results.

To the extent that there is an economic slowdown, including the one associated with the COVID-19 pandemic, a resulting decline in demand for recycled commodities has and could in the future impact our revenues, operating results and cash flow.

Our results will be affected by changes in the value of renewable fuels .

To the extent that there is an economic slowdown, a resulting decline in demand for recycled commodities has and could in the future impact our revenues, operating results and cash flow.

Our results will be affected by changes in the value of renewable fuels and quantities of gas generated and beneficially reused .

Variations in the price of methane gas and other energy-related products that are marketed and sold by our landfill gas recovery operations affect our results.

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Any reductions or limitations on the requirement to blend renewable fuel and any related waivers including SREs, would likely reduce the demand for RINs, which could impact the value of RINs.

At this time, we do not know how the new Clean Fuel Regulations in Canada, as discussed above, will impact the demand for our renewable fuel in the future.

Pursuant to the Canadian Environmental Protection Act, 1999, the Canadian federal government has promulgated the Clean Fuel Regulations (CFRs), which will replace the Renewable Fuel Regulations.

Under the CFRs, gasoline and diesel producers and importers (primary suppliers) must lower the carbon intensity of the gasoline and diesel that they produce in Canada and/or import in accordance with prescribed limits through the use of compliance credits.

Compliance credits can be created by primary suppliers or acquired from other registered creators of credits in accordance with the credit-creating mechanisms set out in the CFRs.

At this time, we do not know how the new CFRs in Canada will impact the demand for, or value of, our renewable fuel in the future.

A significant reduction in the value of RINs in the United States or the price paid for our renewable fuel in Canada could adversely impact our reported results.

To manage a portion of this risk, we may enter into contractual agreements to sell RINs at a fixed price.

As of December 31, 2021 our existing agreements to sell RINs at a fixed price reached maturity and we currently have no contractual fixed price agreements in place.

Climate change, including adverse weather conditions, could adversely affect our operations and increase operational costs .

As of December 31, 2022, we had no contractual fixed price agreements in place.

Variations in the volume of methane gas generated, marketed and sold by our landfill gas recovery operations also affect our results.

Our operations and gas generation rates are impacted by many variables, including the maintenance and operations of recovery wells and gas generation systems, the amount and type of waste in our landfills, the age of the landfill, weather and related temperature.

In addition, there may be variability in the extent to which we are able to beneficially market and sell for beneficial reuse the gas generated and captured, including as a result of delays in the start-up of new facilities or other impacts to operations.

Climate change, including adverse weather and the adoption of climate change legislation or regulations restricting emissions of greenhouse gases, could adversely affect our operations and increase operating costs .

Our operations and assets are subject to risks associated with the effects of climate change and adverse weather conditions.

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It is also possible that these events could disrupt our customers’ businesses, thereby reducing the amount of waste generated by their operations.

Additional laws and regulations related

to climate change could also be promulgated, which could result in increased operational costs or disruption to our clients’ business, thereby impacting our operational results and financial condition.

Additional laws and regulations related to climate change, including restricting emissions of greenhouse gases, could also be promulgated, which could result in increased operational costs or disruption to our clients’ business, thereby impacting our operational results and financial condition.

Conversely, favorable investor expectations regarding potential investment tax credits or other benefits stemming from the Inflation Reduction Act of 2022 may not materialize or could fail to meet expectations.

Increases in insurance costs and the amount that we self-insure for various risks or limitations of our insurance coverage could reduce our operating margins and reported earnings .

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Significant increases in premiums on insurance that we retain, as well as higher deductibles or self-insured retentions, could reduce our margins.

Increases in the price of diesel or compressed natural gas fuel may adversely affect our collection business and reduce our operating margins .

Increases in the price of diesel or compressed natural gas, or CNG, fuel may adversely affect our collection business and reduce our operating margins .

The market price of diesel fuel is volatile.

We generally purchase diesel fuel at market prices, and such prices have fluctuated significantly in recent years.

A significant increase in market prices for fuel, as experienced recently, could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.

We generally purchase diesel fuel at market prices, which have fluctuated significantly in recent years, including as a result of geopolitical events or inflationary pressures, as experienced recently.

This could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.

To manage a portion of this risk, we have entered into fixed-price fuel purchase contracts.

During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices as the prices under our fixed-price fuel purchase contracts may be above market prices.

We utilize compressed natural gas, or CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time.

During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices.

We utilize CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time.

The market price of CNG is also volatile;

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Our accruals for our landfill site closure and post-closure costs may be inadequate .

We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate as well as for landfills we operated under life-of-site agreements.

We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate as well as for landfills we operate under life-of-site agreements.

Our obligations to pay closure or post-closure costs may exceed the amount we have accrued and reserved and other amounts available from funds or reserves established to pay such costs.

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● place us at a competitive disadvantage relative to our competitors with less debt.

In addition, a portion of our indebtedness, including interest rate swaps, is at variable rates which are based on the London Interbank Offered Rate, or LIBOR, which is expected to no longer be published after June 2023.

The FASB added the Secured Overnight Financing Rate, or SOFR, as an eligible benchmark interest rate in order to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.

In December 2021, the Canadian Alternative Reference Rate, or CARR, working group has recommended to cease publication of all Canadian Dollar Offered Rate, or CDOR, tenors after June 2024.

We are developing a plan to transition our indebtedness from LIBOR to SOFR, and, in some cases, have already modified agreements to provide for the expected transition to SOFR.

A portion of our indebtedness is at variable rates which are based on the Canadian Dollar Offered Rate, or CDOR, which will cease publication by June 28, 2024.

The Canadian Alternative Reference Rate working group, or CARR, supports the transition to Canadian Overnight Repo Rate Average, or CORRA, rate.

We are developing a plan to transition our indebtedness from CDOR to CORRA.

In addition, $891.0 million of our indebtedness, including interest rate swaps, is at variable rates which are based on the Secured Overnight Financing Rate, or SOFR, as a result of the transition from the London Interbank Offered Rate, or LIBOR.

Although SOFR has been endorsed by the Alternative Reference Rate Committee as its preferred replacement for LIBOR, it remains uncertain whether or when SOFR or other alternative reference rates will be widely accepted by lenders as the replacement for LIBOR.

This may, in turn, impact the liquidity of the SOFR loan market, and SOFR itself, with the risk of increased volatility, which could result in higher borrowing costs for us.

Further, as the use of SOFR-based rates is relatively new, there could be unanticipated difficulties, disruptions or methodological or other changes with the calculation and publication of SOFR based rates, which in turn could trigger another benchmark transition or otherwise cause a reliance on an alternate base rate.

This could also result in increased borrowing costs for us and thereby adversely affect our financial condition and earnings.

Our ability to execute our financial strategy and our ability to incur indebtedness is somewhat dependent upon our ability to maintain investment grade credit ratings on our senior debt.

The credit rating process is contingent upon our credit profile and several other factors, many of which are beyond our control, including methodologies established and interpreted by third-party rating agencies.

The credit rating process is contingent upon our credit profile and several other factors, many of which are beyond our control, including methodologies established and

interpreted by third-party rating agencies.

If we were unable to maintain our investment grade credit ratings in the future, our interest expense would increase and our ability to obtain financing on favorable terms could be adversely affected.

Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control, including the impacts from the COVID-19

Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes in economic or business conditions or other events that are beyond our control.

If we fail to comply with the covenants under any of our indebtedness, we may be in default under the indebtedness, which may entitle the lenders or holders of indebtedness to accelerate the debt obligations.

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We may be unable to obtain performance or surety bonds, letters of credit or other financial assurances or to maintain adequate insurance coverage .

If we are unable to obtain performance or surety bonds, letters of credit or insurance, we may not be able to enter into additional solid waste or other collection contracts or retain necessary landfill operating permits.

If we are unable to obtain performance or surety bonds, letters of credit or insurance, we may not be able to enter into additional collection contracts or retain necessary landfill operating permits.

Collection contracts, municipal contracts, transfer station operations and landfill closure and post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with federal, state, provincial or local environmental laws or regulations.

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Some state, provincial and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of wastes, such as yard waste, food waste and electronics, at landfills.

Even where not prohibited by state, provincial or local law, some grocery stores and restaurants have chosen to divert their organic waste from landfills, while other companies have set zero-waste goals and communicated an intention to cease the disposal of any waste in landfills.

Even where not prohibited by state, provincial or local laws, some grocery stores and restaurants have chosen to divert their organic waste from landfills, while other companies have set zero-waste goals and communicated an intention to cease the disposal of any waste in landfills.

Although such actions are useful to protect our environment, these actions, as well as the actions of our customers to reduce waste or seek disposal alternatives, have reduced and may in the future further reduce the volume of waste going to landfills in certain areas, which may affect our ability to operate our landfills at full capacity and could adversely affect our operating results.

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If we are unable to negotiate acceptable collective bargaining agreements, we might have to wait through “cooling off” periods, which may be followed by work stoppages, including strikes or lock-outs.

Depending on the type and duration of any such labor disruptions, our operating expenses could increase significantly, which could adversely affect our financial condition, results of operations and cash flows.

Depending on the type and duration of any such labor disruptions, our operating

expenses could increase significantly, which could adversely affect our financial condition, results of operations and cash flows.

We could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate and the accrued pension benefits are not fully funded .

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The size of our potential withdrawal liability may be affected by the level of unfunded accrued benefits, the actuarial assumptions used by the plan and the investment gains and losses experienced by the plan.

We have established long-term, aspirational targets associated with sustainability-related investments and projects which may or may not be achieved .

‎Stakeholder input, business considerations, and potential regulation have reinforced the ‎importance of developing and implementing ESG and sustainability initiatives.

In 2020, we ‎adopted long-term, aspirational sustainability targets and committed over $500 million for investments and ‎projects to these efforts.

We have established long-term, aspirational targets associated with ESG and sustainability-related investments and projects which may or may not be achieved .

‎Stakeholder input, business considerations, and potential regulation have reinforced the ‎importance of developing and implementing ‎environmental, social, and governance, or ESG, and sustainability initiatives.

In 2020, we ‎adopted long-term, aspirational sustainability targets, which we expanded in 2022;

we also committed over $500 million for investments and ‎projects to support these efforts.

Our ability to achieve these targets will depend significantly on, among other ‎things, the success of these investments and projects and our ability to meet our financial and ‎operating objectives, which can be impacted by the numerous risks and uncertainties associated with ‎our business and the industry in which we operate.

There is a risk that some or all of the expected ‎benefits of these investments and projects may fail to materialize, may cost more to achieve or may ‎not occur within the anticipated time periods.

In addition, there is a risk that the actions taken by us to ‎achieve these targets may have a negative impact on our existing business and increase capital ‎expenditures, which could adversely affect our operating results.

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Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .

Providing environmental and waste management services, including constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.

We are also an essential services provider, and our frontline employees have continued to provide services during the COVID-19 pandemic amid related mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings, which could involve additional risks.

Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials or odors that could be

triggered by weather or natural disasters.

Providing environmental and waste management services, including operating a commercial truck fleet and constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.

Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of

hazardous materials or odors that could be triggered by weather or natural disasters.

There may also be risks presented by the potential for subsurface chemical reactions causing elevated landfill temperatures.

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Our success depends significantly on the continued individual and collective contributions of our senior and regional management team.

The loss of the services of any member of our senior and regional management, including as a result of the COVID-19 pandemic, or the inability to hire and retain experienced management personnel could harm our operating results.

The loss of the services of any member of our senior and regional management or the inability to hire and retain experienced management personnel could harm our operating results.

Our decentralized decision-making structure could allow local managers to make decisions that may adversely affect our operating results .

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Our results are vulnerable to economic conditions .

Our business and results of operations may be adversely affected by changes in national or global economic conditions, including the price of crude oil.

In an economic slowdown, we may experience the negative effects of the following, any of which could negatively impact our operating income and cash flows:

Our business and results of operations may be adversely affected by changes in national or global economic conditions, including higher inflation rates and economic slowdowns.

Macroeconomic pressures, such as the outsized inflationary cost pressures experienced in 2022, have had and continue to have a significant impact on our operating costs and capital expenditures.

Significant components of our operating expenses, including labor and third-party services relying largely on labor and fuel, have been impacted by increased inflation rates.

We may be limited in our ability to dynamically address these impacts on a significant portion of our revenue under long-term contracts due to contractual provisions which may include limitations on the level of cost recovery through rate adjustments or a lag in any such recovery.

Efforts to recover cost increases may also be limited by ongoing or increasing inflationary pressures and competitive market responses to higher pricing and continued cost pressures.

The inability to adequately increase prices to offset increased costs and inflationary pressures, or otherwise mitigate the impact of these macroeconomic conditions on our business, may impact our financial results.

In an economic slowdown, we may experience the negative effects of the following, any of which could adversely impact our operating income and cash flows:

decreased waste generation, increased competitive pricing pressure, increased customer turnover, and reductions in customer service requirements.

In a recessionary environment, two of our business lines that could see a more immediate impact are construction and demolition debris and E&P waste disposal, as demand for new construction or energy exploration decreases.

Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic slowdown.

Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic

In addition, a weaker economy may result in declines in recycled commodity prices.

Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations.

Further, we cannot assure you that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.

Further, we cannot assure that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.

Public health crises and the effects of related governmental initiatives have adversely affected and may continue to adversely affect our business, financial condition and results of operations .

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Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services.

Potential contributing factors include:

● Mandatory and voluntary closures, shelter-in-place orders, and similar government restrictions on or advisories with respect to travel, business operations and public gatherings have impacted and may continue to impact the operations of our commercial, municipal, industrial and E&P collection customers, as well as affiliated and third-party haulers that bring waste to our landfills, transfer stations, E&P waste and recycling facilities, resulting in a decline in demand for our service offerings;

● Weakness in the economy resulting from business closures, unemployment and other direct and indirect impacts of the COVID-19 pandemic has caused and may continue to cause customers, including residential, commercial, industrial and E&P accounts, to suffer financial difficulties and ultimately to be unable or unwilling to pay amounts owed to us.

This could negatively impact our consolidated financial condition, results of operations and cash flows;

● To the extent that a significant percentage of our workforce is unable to work, including because of illness or government restrictions in connection with the COVID-19 pandemic, our workforce and operations will be negatively impacted;

● The additional costs associated with the COVID-19 pandemic, including those related to emergency wages, supplemental pay, personal protective equipment, testing and extended benefits programs provided by the Company to employees affected by the COVID-19 pandemic, may impact our financial results;

● Volatility in commodity and other input costs could substantially impact our result of operations;

● It may become more costly or difficult to obtain debt or equity financing to fund operations or investment opportunities, or to refinance our debt in the future, in each case on terms and within a time period acceptable to us.

The ultimate extent of the impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend largely on future developments, including the duration and spread of the outbreak in the U.S.

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These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies.

In some cases, including those resulting from the COVID-19 pandemic and associated impacts, these estimates are particularly difficult to determine and we must exercise significant judgment.

In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment.

The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty are related to our accounting for landfills, self-insurance accruals, income taxes, allocation of acquisition purchase price, asset impairments and litigation, claims and assessments.

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In addition, tax rules and regulations, including those relating to foreign jurisdictions, are subject to interpretation and require judgment by us that may be challenged by the taxation authorities upon audit.

Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a new federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.

Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a subsequent federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.

Future changes to U.S., Canadian and foreign tax laws could materially adversely affect us .

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For example, the U.S.

Congress, the Canadian government, the Organisation for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations.

One example is in the area of base erosion and profit shifting (“BEPS”), where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as base erosion and profit shifting.

Congress, the Canadian government, the Organisation for Economic Co-operation and Development, or OECD, and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations, including in the area of base erosion and

profit shifting, or BEPS, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

The MLI entered into force in Canada on December 1, 2019 and entered into effect with respect to certain of Canada’s tax treaties on January 1, 2020 for withholding taxes and with respect to certain other taxes (including capital gains taxes) for tax years beginning on or after June 1, 2020 (which, for us and our affiliates, in general, was January 1, 2021).

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The MLI does not impact the tax treaty between Canada and the U.S.

In addition, in the 2021 Canadian federal budget, the Canadian government indicated it would introduce measures consistent with the OECD's recommendations in the area of hybrid mismatch arrangements.

In addition, in the 2021 Canadian federal budget, the Canadian government indicated it would introduce measures consistent with the OECD's recommendations in the area of hybrid mismatch arrangements and introduced draft hybrid mismatch legislation on April 29, 2022 for public consultation, with those proposals applying, if they are implemented, as of July 1, 2022.

A second Canadian legislative package is anticipated to be released, which would comprise the rules consistent with the OECD proposals that were not previously addressed.

The international tax environment continues to change as a result of these and related tax policy initiatives and reforms.

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Technology and Information Security Risks

We rely on computer systems to run our business and disruptions or privacy breaches in these systems could impact our ability to service our customers and adversely affect our financial results, damage our reputation, and expose us to litigation risk .

We are increasingly dependent on technology in our operations and a failure of our technology could impact our ability to service our customers and adversely affect our financial results, damage our reputation, and expose us to litigation risk .

Our businesses rely on computer systems to provide customer information, process customer transactions and provide other general information necessary to manage our businesses.

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Any disruption caused by the unavailability of our computer systems could adversely affect our revenues or could require significant investment to fix or replace them, and, therefore, could affect our operating results.

In addition, cybersecurity attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data.

A cybersecurity incident could negatively impact our business and our relationships with customers, vendors and employees and expose us to increased liability.

Cybersecurity attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data.

We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.

Further, as we pursue our acquisition growth strategy and pursue new initiatives that improve our operations and reduce our costs, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.

As we pursue our acquisition growth strategy and pursue new initiatives that improve our operations and reduce our costs, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.

If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks.

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Existing environmental laws and regulations have become more stringently enforced in recent years.

Further, with a new federal administration taking office in 2021 in the United States, it is possible that policies and initiatives of the prior

administration could be reconsidered or even reversed, which could adversely affect our operating results.

Further, under the new federal administration that took office in 2021 in the United States, it is possible that policies and initiatives of the prior administration could be reconsidered or even reversed, which could adversely affect our operating results.

For example, a policy shift away from curtailment of regulation, narrowing Clean Water Act jurisdiction, or enabling oil and gas development on federal lands could adversely affect our business and our customers’ business.

In addition, our industry is subject to regular enactment of new or amended federal, state, provincial and local environmental and health and safety statutes, regulations and ballot initiatives, as well as judicial decisions interpreting these requirements, which have become more stringent over time.

Citizen suits brought pursuant to environmental laws as well as purported class actions based on public or private nuisance and negligence claims related to alleged landfill odor concerns have proliferated, along with the use of social media to drive such efforts.

Citizen suits brought pursuant to environmental laws as well as purported class actions based on nuisance and negligence claims related to alleged landfill odors have proliferated, along with the use of social media to drive such efforts.

In addition, various state, provincial and local governments and the Canadian federal government have enacted, have the authority to enact or are considering enacting laws and regulations that restrict the movement or disposal within their jurisdictions of certain types of waste generated outside their jurisdictions.

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For example, the State of California, the Canadian federal government and several Canadian provinces have enacted climate change laws, and other states and provinces in which we operate are considering similar actions.

The EPA made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.

made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.

This finding allows the EPA to create regulations that will impact our operations – including imposing emission reporting, permitting, control technology installation and monitoring requirements, although the materiality of the impacts will not be known until all applicable regulations are promulgated and finalized.

The Canadian federal government enacted the Greenhouse Gas Pollution Pricing Act in June 2018, which established a national carbon-pricing regime starting in 2019 for provinces and territories in Canada where there is no provincial regime in place or where the provincial regime does not meet the federal benchmark.

The minimum national price on carbon in Canada is equivalent to CAD $50 per tonne CO2e in 2022.

The Canadian ‎federal government announced a plan to further increase the carbon price by CAD $15 per year starting in 2023, ‎reaching CAD $170 per tonne of CO2e by 2030.

On November 19, 2020, the federal government introduced Bill C-12, the Canadian Net-Zero Emissions ‎Accountability Act, which establishes the framework for national GHG emissions reduction targets to attain net-zero ‎emissions by 2050.

The minimum national price on carbon in Canada is equivalent to CAD $65 per tonne CO2e in 2023 and will increase to CAD $170 per tonne of CO2e by 2030.

The Canadian Net-Zero Emissions Accountability Act, which received royal assent on June 29, 2021, establishes Canada's federal framework for national GHG emissions reduction targets to attain net-zero emissions by 2050.

Several Canadian provinces have promulgated legislation and regulations to limit GHG emissions through requirements of specific controls, carbon levies, cap and trade programs or other measures.

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Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations or as a result of third-party challenges, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored.

Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our operations that could interrupt or limit the scope of our business.

Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our current or former operations that could interrupt or limit the scope of our business or result in adverse judgments or settlements requiring substantial payments.

For example, see the discussion regarding the Jefferson Parish, Louisiana Landfill Litigation in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.

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Similarly, purported class actions based on claims related to allegedly unlawful landfill odors and rates and fees charged under certain contracts for collection services have proliferated, as have citizen suits brought pursuant to environmental laws, such as those regulating the treatment of storm water runoff.

The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain.

timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain.

Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our consolidated financial condition, results of operations and cash flows.

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Even if we obtain legally enforceable representations, warranties and indemnities from the sellers of these operations, they may not cover the liabilities fully or the sellers may not have sufficient funds to perform their obligations.

We may also be liable for any on-site environmental contamination caused by pollutants or hazardous substances whose transportation, treatment or disposal we or our predecessors arranged or conducted.

Some environmental laws and

regulations may impose strict, joint and several liability in connection with releases of regulated substances into the environment.

We may also be liable for any on-site environmental contamination caused by pollutants or hazardous substances the transportation, treatment or disposal of which we or our predecessors arranged or conducted.

Some environmental laws and regulations may impose strict, joint and several liability in connection with releases of regulated substances into the environment.

New or increased regulation of substances, such as PFAS or other emerging contaminants, could also lead to increased or previously unauthorized remediation costs or litigation risk.

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If we were to incur liability for environmental damage, environmental clean-ups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial condition or operating results could be materially adversely affected.

For example, see the discussion regarding the Lower Duwamish Waterway Superfund Site Allocation Process in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

UNRESOLVED STAFF COMMENTS

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What changed 10-K

Item 1A. Risk Factors