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Item 2. Management’s Discussion and Analysis

2023-10-26 compared with 2023-08-03 · 250 added, 246 removed, 300 unchanged (62% of the section changed)

4 unchanged sentences

These include:

● Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, landfill alternatives and related capital expenditures;

● Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, landfill alternatives and related capital expenditures, operating expenses and leachate;

● Discussion of competition, loss of contracts, price increases and additional exclusive and/or long-term collection service arrangements;

4 unchanged sentences

● Assessments of regulatory developments and potential changes in environmental, health, safety and tax laws and regulations;

● Other statements on a variety of topics such as the coronavirus disease 2019 (“COVID-19”) pandemic, inflation, credit risk of customers, seasonality, labor/pension costs and labor union activity, operational and safety risks, acquisitions, litigation developments and results, goodwill impairments, insurance costs and cybersecurity threats.

● Other statements on a variety of topics such as the coronavirus disease 2019 (“COVID-19”) pandemic, inflation, credit risk of customers, seasonality, labor/pension costs and labor union activity, employee retention costs, operational and safety risks, acquisitions, litigation developments and results, goodwill impairments, insurance costs and cybersecurity threats.

These statements can be ‎identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “might,” “will,” ‎‎“could,” “should” or “anticipates,” or the negative thereof or comparable terminology, or by discussions of strategy.

4 unchanged sentences

OVERVIEW OF OUR BUSINESS

We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, along with resource recovery primarily through recycling and renewable fuels generation, in mostly exclusive and secondary markets across 43 states in the U.S.

We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation, in mostly exclusive and secondary markets across 44 states in the U.S.

and six provinces in Canada.

Waste Connections also provides non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal services in

several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

Waste Connections also provides non-hazardous oil and natural gas exploration and production (“E&P”) waste treatment, recovery and disposal

services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

Environmental, organizational and financial sustainability initiatives have been key components of our success since we were founded in 1997.

19 unchanged sentences

Crude oil and natural gas prices historically have been volatile, including as a result of macroeconomic and geopolitical conditions, which may impact levels of exploration and production activity, with a corresponding impact to our E&P waste activity.

In 2022, sustained increases in prices of crude oil as a result of inflationary pressures, the uncertainty associated with the Ukrainian conflict and any related bans on oil sales from Russia or supply chain disruptions as recently experienced contributed to increased levels of drilling activity and demand for our E&P waste services.

In 2022, sustained increases in prices of crude oil as a result of inflationary pressures, the uncertainty associated with the Ukrainian conflict and any related bans on oil sales from Russia or supply chain disruptions contributed to increased levels of drilling activity and demand for our E&P waste services.

Conversely, in 2020 and 2021, a significant decline in oil prices driven by both surplus production and supply, as well as the decrease in demand caused by factors including the COVID-19 pandemic, resulted in decreased levels of E&P drilling activity and a corresponding decrease in demand for our E&P waste services.

25 unchanged sentences

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

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

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

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of operations

5 unchanged sentences

Interest income

Other income (expense), net

Other income, net

Income tax provision

1 unchanged sentence

Net income attributable to Waste Connections

Total revenues increased $204.7 million, or 11.3%, to $2.021 billion for the three months ended June 30, 2023, from $1.816 billion for the three months ended June 30, 2022.

Total revenues increased $458.9 million, or 13.3%, to $3.922 billion for the six months ended June 30, 2023, from $3.463 billion for the three months ended June 30, 2022.

Acquisitions closed during, or subsequent to, the three months ended June 30, 2022, increased revenues by $121.5 million for the three months ended June 30, 2023.

Acquisitions closed during, or subsequent to, the six months ended June 30, 2022, increased revenues by $254.1 million for the six months ended June 30, 2023.

Operations that were divested during, or subsequent to, the three and six months ended June 30, 2022, decreased revenues by $0.2 million and $0.7 million, respectively, for the three and six months ended June 30, 2023.

During the three months ended June 30, 2023, the net increase in prices charged to our customers at our existing operations was $155.8 million, consisting of $168.5 million of core price increases and decreases in surcharges of $12.7 million.

During the six months ended June 30, 2023, the net increase in prices charged to our customers at our existing operations was $339.3 million, consisting of $339.8 million of core price increases and decreases in surcharges of $0.5 million.

During the three months ended June 30, 2023, we recognized volume losses totaling $32.9 million, primarily due to lower post-collection volumes in our Eastern and Western segment markets and lower residential volumes in our Canada and Southern segments, partially offset by increases in commercial collection services in our Western segment.

During the six months ended June 30, 2023, we recognized volume losses totaling $53.4 million, primarily due to lower post collection volumes and a decrease in residential collection services.

E&P waste revenues at facilities owned during the three and six months ended June 30, 2023 and 2022 increased $3.6 million and $11.4 million, respectively, due to increases in overall demand for our E&P waste services as a result of increases in drilling and production activity levels in certain basins.

Revenues from sales of recyclable commodities at facilities owned during the three and six months ended June 30, 2023 and 2022 decreased $25.8 million and $55.7 million, respectively.

Total revenues increased $184.9 million, or 9.8%, to $2.065 billion for the three months ended September 30, 2023, from $1.880 billion for the three months ended September 30, 2022.

Total revenues increased $643.8 million, or 12.1%, to $5.986 billion for the nine months ended September 30, 2023, from $5.343 billion for the nine months ended September 30, 2022.

Acquisitions closed during, or subsequent to, the three months ended September 30, 2022, increased revenues by $104.1 million for the three months ended September 30, 2023.

Acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, increased revenues by $358.2 million for the nine months ended September 30, 2023.

Operations that were divested during, or subsequent to, the three and nine months ended September 30, 2022, decreased revenues by $1.2 million and $1.9 million, respectively, for the three and nine months ended September 30, 2023.

During the three months ended September 30, 2023, the net increase in prices charged to our customers at our existing operations was $137.4 million, consisting of $156.6 million of core price increases and decreases in surcharges of $19.2 million.

During the nine months ended September 30, 2023, the net increase in prices charged to our customers at our existing operations was $476.7 million, consisting of $496.4 million of core price increases and decreases in surcharges of $19.7 million.

During the three months ended September 30, 2023, we recognized volume losses totaling $42.0 million, primarily due to a decrease in residential collection volumes in our Eastern, Canada and Central segments, lower roll off volumes and a decrease in post-collection volumes in our Eastern and Western segments, partially offset by increases in commercial and residential collection services in our Western segment and an increase in landfill volumes in our Canada segment driven by higher special waste volumes.

During the nine months ended September 30, 2023, we recognized volume losses totaling $95.4 million, due to lower collection and post collection volumes primarily in our Eastern, Canada, and Southern segments.

E&P waste revenues at facilities owned during the three and nine months ended September 30, 2023 and 2022 increased $3.7 million and $15.2 million, respectively, due to increases in overall demand for our E&P waste services as a result of increases in drilling and production activity levels in certain basins.

Revenues from sales of recyclable commodities at facilities owned during the three and nine months ended September 30, 2023 and 2022 decreased $9.5 million and $65.2 million, respectively.

The decreases are primarily attributable to lower commodity pricing for old corrugated cardboard, aluminum, plastics and other paper products as compared to the prior period.

Commodity pricing decreased significantly during the three months ended September 30, 2022 and have not fully recovered.

Commodity pricing decreased significantly during the three months ended September 30, 2022 and has not fully recovered as of the three months ended September 30, 2023.

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

dollar currency exchange rate resulted in a decrease in revenues of $12.3 million and $26.0 million for the three and six months ended June 30, 2023, respectively.

dollar currency exchange rate resulted in a decrease in revenues of $6.5 million and $32.5 million for the three and nine months ended September 30, 2023, respectively.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7447 and 0.7833 for the three months ended June 30, 2023 and 2022, respectively.

dollar exchange rates on our Canadian revenues were 0.7455 and 0.7660 for the three months ended September 30, 2023 and 2022, respectively.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7423 and 0.7863 for the six months ended June 30, 2023 and 2022, respectively.

Other revenues decreased $5.0 million during the three months ended June 30, 2023, due primarily to a $4.5 million decrease in landfill gas revenues on lower values for renewable energy credits partially offset by higher landfill gas volumes, as well as a $1.4 million decrease in intermodal revenues, partially offset by a $0.9 million increase in other non-core revenue sources.

Other revenues decreased $10.1 million during the six months ended June 30, 2023, due primarily to an $8.8 million decrease in landfill gas revenues on lower values for renewable energy credits partially offset by higher landfill gas volumes, as well as a $3.3 million decrease in intermodal revenues, partially offset by a $2.0 million increase in other non-core revenue sources.

dollar exchange rates on our Canadian revenues were 0.7435 and 0.7792 for the nine months ended September 30, 2023 and 2022, respectively.

Other revenues decreased $1.1 million during the three months ended September 30, 2023, due primarily to a $3.4 million decrease in intermodal revenues, partially offset by a $2.1 million increase in landfill gas revenues on higher values for renewable energy credits and a $0.2 million increase in other non-core revenue sources.

Other revenues decreased $11.3 million during the nine months ended September 30, 2023, due primarily to a $6.7 million decrease in landfill gas revenues on lower values for renewable energy credits partially offset by higher landfill gas volumes, as well as a $6.7 million decrease in intermodal revenues, partially offset by a $2.1 million increase in other non-core revenue sources.

Cost of Operations .

Total cost of operations increased $109.5 million, or 10.1%, to $1.197 billion for the three months ended June 30, 2023, from $1.088 billion for the three months ended June 30, 2022.

The increase was primarily the result of $66.4 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended June 30, 2022, and an increase in operating costs at our existing operations of $49.8 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $6.7 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in operating costs of $49.8 million, assuming foreign currency parity, at our existing operations for the three months ended June 30, 2023 consisted of higher labor and recurring incentive compensation expenses of $26.9 million, an increase in expenses for auto and workers’ compensation claims of $15.9 million due primarily to increased claims and an increase in our average claim cost, an increase in truck, container, equipment and facility maintenance and repair expenses of $10.4 million, an increase in taxes on revenues of $3.8 million as the result of higher revenues, an increase in leachate costs of $3.2 million, an increase in landfill maintenance costs of $2.6 million and $4.9 million of other net expense increases, partially offset by a decrease in fuel expense of $10.4 million due to lower average diesel and natural gas prices, a decrease in third-party trucking and transportation expenses of $6.5 million due primarily to lower post collection volumes, and lower disposal costs of $1.0 million primarily driven by decreased collection volumes and increased internalization in certain markets.

Total cost of operations increased $266.9 million, or 12.8%, to $2.344 billion for the six months ended June 30, 2023, from $2.077 billion for the six months ended June 30, 2022.

The increase was primarily the result of $152.8 million of additional operating costs from acquisitions closed during, or subsequent to, the six months ended June 30, 2022, and an increase in operating costs at our existing operations of $128.0 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $13.9 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in operating costs of $128.0 million, assuming foreign currency parity, at our existing operations for the six months ended June 30, 2023 consisted of higher labor and recurring incentive compensation expenses of $61.4 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $28.0 million, an increase in expenses for auto and workers’ compensation claims of $19.0 million due primarily to increased claims and an increase in our average claim cost, an increase in taxes on revenues of $7.0 million as the result of increased revenues, an increase in leachate costs of $6.6 million, an increase in other facility operating costs and professional fees of $5.1 million, an increase in landfill maintenance costs of $4.7 million, an increase in third-party trucking and transportation expenses of $2.5 million due primarily to higher rates charged by third-party providers partially offset by lower post collection volumes, an increase in benefits costs of $2.4 million and a net increase of other expenses of $2.2 million, partially offset by a decrease in

supplemental compensation to non-management personnel of $9.0 million associated with the impact of the COVID-19 pandemic that occurred in the prior year period and a decrease in fuel expense of $1.9 million due to lower diesel and natural gas prices.

Cost of operations as a percentage of revenues decreased 0.7 percentage points to 59.2% for the three months ended June 30, 2023, from 59.9% for the three months ended June 30, 2022.

The decrease as a percentage of revenues consisted of a 0.8 percentage point decrease due to lower average diesel and natural gas prices, a 0.7 percentage point decrease in third-party trucking and transportation expenses related to lower volumes and a 0.5 percentage point decrease due to lower disposal costs resulting from lower collection volumes and increased internalization in certain markets, partially offset by a 0.8 percentage point increase due to increases in our average cost of auto and workers' compensation claims, a 0.4 percentage point increase related to higher labor and recurring incentive compensation expenses and a 0.1 percentage point increase from all other net changes.

Cost of operations as a percentage of revenues decreased 0.2 percentage points to 59.8% for the six months ended June 30, 2023, from 60.0% for the six months ended June 30, 2022.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.6 percentage point decrease in disposal costs, a 0.4 percentage point decrease in fuel costs due to lower diesel and natural gas prices, a 0.3 percentage point decrease in third-party trucking and transportation expenses and a 0.2 percentage point decrease in compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the prior year period, partially offset by a 0.5 percentage point increase in expenses for auto and workers’ compensation claims due to an increase in our average claim cost, a 0.3 percentage point increase in truck, container, equipment and facility maintenance and repair expenses, a 0.2 percentage point increase from acquisitions closed during, or subsequent to, the six months ended June 30, 2022 having operating costs as a percentage of revenue higher than our company average and a 0.3 percentage point increase from all other net changes.

SG&A expenses increased $48.0 million, or 28.5%, to $216.4 million for the three months ended June 30, 2023, from $168.4 million for the three months ended June 30, 2022.

The increase was comprised of an increase of $39.5 million, assuming foreign currency parity, at our existing operations and $9.2 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2022, partially offset by a decrease of $0.7 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $39.5 million, assuming foreign currency parity, for the three months ended June 30, 2023 was comprised of an increase in executive separation costs of $15.1 million, administrative payroll expenses of $7.1 million, an increase in incentive compensation expenses of $6.4 million, an increase in deferred compensation expenses of $6.0 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in equity-based compensation expenses of $2.0 million associated with our annual recurring grants of restricted share units to our personnel and an increase of $2.9 million from all other net changes.

SG&A expenses increased $78.2 million, or 23.6%, to $410.0 million for the six months ended June 30, 2023, from $331.8 million for the six months ended June 30, 2022.

The increase was comprised of an increase of $62.5 million, assuming foreign currency parity, at our existing operations and $18.5 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2022, partially offset by a decrease of $2.8 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $62.5 million, assuming foreign currency parity, for the six months ended June 30, 2023 was comprised of an increase in executive separation costs of $15.1 million, an increase in administrative payroll expenses of $14.2 million, an increase in deferred compensation expenses of $9.3 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in equity-based compensation expenses of $7.1 million associated with our annual recurring grants of restricted share units to our personnel, an increase in incentive compensation expense of $6.1 million, a collective increase in travel, meetings and training expenses of $3.4 million, an increase in professional fees of $3.4 million, an increase in software license fees of $3.2 million and $5.0 million of other net expense increases, partially offset by a decrease in direct acquisition expenses of $4.3 million due to a decrease in acquisition activity in the current period.

SG&A expenses as a percentage of revenues increased 1.4 percentage points to 10.7% for the three months ended June 30, 2023, from 9.3% for the three months ended June 30, 2022.

The increase as a percentage of revenues was primarily attributable to a 0.9 percentage point increase in executive separation costs, a 0.3 percentage point increase in deferred compensation expense, a 0.3 percentage point increase in administrative payroll expenses and a 0.3 percentage point increase in incentive compensation expenses, partially offset by a 0.2 percentage point decrease from acquisitions closed during, or subsequent to, the three months ended June 30, 2022 having lower SG&A costs as a percentage of revenue than our company average and a 0.2 percentage point decrease from all other net changes.

SG&A expenses as a percentage of revenues increased 0.9 percentage points to 10.5% for the six months ended June 30, 2023, from 9.6% for the six months ended June 30, 2022.

The increase as a percentage of revenues was primarily attributable to a 0.4 percentage point increase in executive separation costs, a 0.3 percentage point increase in deferred compensation expense and a 0.2 percentage point increase in administrative payroll expenses.

Total cost of operations increased $84.0 million, or 7.5%, to $1.205 billion for the three months ended September 30, 2023, from $1.121 billion for the three months ended September 30, 2022.

The increase was primarily the result of $58.9 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended September 30, 2022, and an increase in operating costs at our existing operations of $29.1 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $3.5 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $0.5 million from operations divested during, or subsequent to, the three months ended September 30, 2022.

The increase in operating costs of $29.1 million, assuming foreign currency parity, at our existing operations for the three months ended September 30, 2023 consisted of an increase in expenses for auto and workers’ compensation claims of $18.8 million due primarily to increased claims and an increase in our average claim cost, higher labor expenses of $13.7 million, an increase in leachate and landfill maintenance costs of $6.4 million, an increase in taxes on revenues of $3.0 million as the result of higher revenues and $2.9 million of other net expense increases, partially offset by a decrease in third-party trucking and transportation expenses of $10.1 million due to lower transfer volumes, and lower disposal costs of $5.6 million primarily driven by decreased collection volumes and increased internalization in certain markets.

Total cost of operations increased $350.9 million, or 11.0%, to $3.549 billion for the nine months ended September 30, 2023, from $3.198 billion for the nine months ended September 30, 2022.

The increase was primarily the result of $204.8 million of additional operating costs from acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, and an increase in operating costs at our existing operations of $164.5 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $17.3 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $1.1 million from operations divested during, or subsequent to, the three months ended September 30, 2022.

The increase in operating costs of $164.5 million, assuming foreign currency parity, at our existing operations for the nine months ended September 30, 2023, consisted of higher labor and recurring incentive compensation expenses of $75.9 million, an increase in expenses for auto and workers’ compensation claims of $37.9 million due primarily to increased claims and an increase in our average claim cost, an increase in truck, container, equipment and facility maintenance and repair expenses of $29.8 million, an increase in landfill maintenance and leachate costs of $17.8 million, an increase in taxes on revenues of $10.3 million as the result of increased revenues, an increase in other facility operating costs of $8.1 million and a net increase of other expenses of $0.7 million, partially offset by a decrease in supplemental compensation

to non-management personnel of $9.0 million associated with the impact of the COVID-19 pandemic that occurred in the prior year period, a decrease in disposal costs of $4.7 million as a result of lower volumes and increased internalization in certain markets and a decrease in fuel expense of $2.3 million due to lower diesel and natural gas prices.

Cost of operations as a percentage of revenues decreased 1.2 percentage points to 58.4% for the three months ended September 30, 2023, from 59.6% for the three months ended September 30, 2022.

The decrease as a percentage of revenues was primarily driven by the impact of price-led solid waste revenue growth, along with lower volumes and increased internalization in certain markets, resulting in a 0.9 percentage point decrease in third-party trucking and transportation expenses, a 0.7 percentage point decrease in disposal costs and a 0.6 percentage point decrease from small decreases in several other cost items, plus a 0.2 percentage point decrease due to lower average diesel prices, partially offset by a 0.9 percentage point increase due to increases in our average cost of auto and workers' compensation claims and a 0.3 percentage point increase in landfill maintenance and leachate costs.

Cost of operations as a percentage of revenues decreased 0.6 percentage points to 59.3% for the nine months ended September 30, 2023, from 59.9% for the nine months ended September 30, 2022.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.7 percentage point decrease in disposal costs, a 0.5 percentage point decrease in third-party trucking and transportation expenses, a 0.3 percentage point decrease in fuel costs due to lower diesel and natural gas prices and a 0.2 percentage point decrease in compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the prior year period, partially offset by a 0.6 percentage point increase in expenses for auto and workers’ compensation claims due to an increase in our average claim cost, a 0.3 percentage point increase in landfill maintenance and leachate costs and a 0.2 percentage point increase from all other net changes.

SG&A expenses increased $9.4 million, or 5.0%, to $196.3 million for the three months ended September 30, 2023, from $186.9 million for the three months ended September 30, 2022.

The increase was comprised of an increase of $7.1 million from acquisitions closed during, or subsequent to, the three months ended September 30, 2022 and an increase of $2.9 million at our existing operations, assuming foreign currency parity, partially offset by a decrease of $0.6 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $2.9 million, assuming foreign currency parity, for the three months ended September 30, 2023 was comprised of higher administrative payroll expenses of $4.8 million, an increase in incentive compensation expenses of $4.8 million, an increase in our bad debt costs of $1.7 million and an increase of $1.7 million from all other net changes, partially offset by a decrease in direct acquisition expenses of $7.4 million due to a decrease in acquisition activity, a decrease in equity-based compensation expenses of $1.6 million associated with changes in our share price resulting in fair value measurement decreases to equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016, which are subject to valuation adjustments each period and a decrease in deferred compensation expenses of $1.1 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked.

SG&A expenses increased $87.7 million, or 16.9%, to $606.4 million for the nine months ended September 30, 2023, from $518.7 million for the nine months ended September 30, 2022.

The increase was comprised of an increase of $65.3 million, assuming foreign currency parity, at our existing operations and $25.3 million from acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, partially offset by a decrease of $2.9 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $65.3 million, assuming foreign currency parity, for the nine months ended September 30, 2023 was comprised of an increase in administrative payroll expenses of $19.1 million, an increase in executive separation costs of $15.1 million, an increase in incentive compensation expense of $10.9 million, an increase in deferred compensation expenses of $8.3 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in equity-based compensation expenses of $7.2 million associated with our annual recurring grants of restricted share units to our personnel, a collective increase in travel, meetings and training expenses of $4.4 million, an increase in software license fees of $3.9 million, an increase in professional fees of $3.2 million and $4.9 million of other net expense increases, partially offset by a decrease in direct acquisition expenses of $11.7 million due to a decrease in acquisition activity in the current period.

SG&A expenses as a percentage of revenues decreased 0.4 percentage points to 9.5% for the three months ended September 30, 2023, from 9.9% for the three months ended September 30, 2022.

The decrease as a percentage of revenues was primarily attributable to price-led revenue growth, a 0.4 percentage point decrease in direct acquisition expenses due to a decrease in acquisition activity in the current period, a 0.1 percentage point decrease in equity-based compensation expenses associated with changes in our share price resulting in fair value measurement decreases to equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016, which are subject to valuation adjustments each period, a 0.1 percentage point decrease in deferred compensation expenses, a 0.1 percentage point decrease from acquisitions closed during, or subsequent to, the three months ended September 30, 2022 having lower SG&A costs as a percentage of revenue than our company average and a 0.1 percentage point decrease from all other changes, partially offset by a 0.2 percentage point increase in administrative payroll expenses and a 0.2 percentage point increase in incentive compensation expenses.

SG&A expenses as a percentage of revenues increased 0.4 percentage points to 10.1% for the nine months ended September 30, 2023, from 9.7% for the nine months ended September 30, 2022.

The increase as a percentage of revenues was primarily attributable to a 0.3 percentage point increase in executive separation costs, a 0.2 percentage point increase in deferred compensation expense and a 0.2 percentage point increase in administrative payroll expenses, partially offset by a 0.2 percentage point decrease in direct acquisition expenses due to a decrease in acquisition activity and a 0.1 percentage point decrease from all other changes.

Depreciation .

Depreciation expense increased $24.4 million, or 12.9%, to $213.3 million for the three months ended June 30, 2023, from $188.9 million for the three months ended June 30, 2022.

The increase was comprised of an increase in depreciation and depletion expense of $16.6 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2022, an increase in depreciation expense of $7.8 million from the impact of additions to our fleet and equipment purchased to support our existing operations and $1.3 million of other net increases, partially offset by a decrease of $1.3 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Depreciation expense increased $48.5 million, or 13.1%, to $417.4 million for the six months ended June 30, 2023, from $368.9 million for the six months ended June 30, 2022.

The increase was comprised of an increase in depreciation and depletion expense of $34.7 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2022, an increase in depreciation expense of $14.5 million from the impact of additions to our fleet and equipment purchased to support our existing operations and $1.9 million of other net increases, partially offset by a decrease of $2.6 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Depreciation expense as a percentage of revenues increased 0.2 percentage points to 10.6% for the three months ended June 30, 2023, from 10.4% for the three months ended June 30, 2022.

Depreciation expense as a percentage of revenues remained flat at 10.6% for the six months ended June 30, 2023 and 2022.

The increase for the three months ended June 30, 2023 as a percentage of revenues was primarily attributable to acquisitions closed during, or subsequent to, the three months ended June 30, 2022 having higher depreciation expense as a percentage of revenue than our company average, partially offset by the impact of price driven revenue increases in our solid waste services.

Depreciation expense increased $21.7 million, or 11.2%, to $215.0 million for the three months ended September 30, 2023, from $193.3 million for the three months ended September 30, 2022.

The increase was comprised of an increase in depreciation and depletion expense of $14.7 million from acquisitions closed during, or subsequent to, the three months ended September 30, 2022, an increase in depreciation expense of $4.7 million from the impact of additions to our fleet and equipment purchased to support our existing operations and $2.9 million of other net increases, partially offset by a decrease of $0.6 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Depreciation expense increased $70.2 million, or 12.5%, to $632.4 million for the nine months ended September 30, 2023, from $562.2 million for the nine months ended September 30, 2022.

The increase was comprised of an increase in depreciation and depletion expense of $48.1 million from acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, an increase in depreciation expense of $19.8 million from the impact of additions to our fleet and equipment purchased to support our existing operations and $5.5 million of other net increases, partially offset by a decrease of $3.2 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Depreciation expense as a percentage of revenues increased 0.1 percentage points to 10.4% for the three months ended September 30, 2023, from 10.3% for the three months ended September 30, 2022.

Depreciation expense as a percentage of revenues remained flat at 10.5% for the nine months ended September 30, 2023 and 2022.

The increase for the three months ended September 30, 2023 as a percentage of revenues was primarily attributable to acquisitions closed during, or subsequent to, the three months ended September 30, 2022 having higher depreciation expense as a percentage of revenue than our company average, partially offset by the impact of price driven revenue increases in our solid waste services.

Amortization of Intangibles .

Amortization of intangibles expense increased $1.6 million, or 4.2%, to $39.1 million for the three months ended June 30, 2023, from $37.5 million for the three months ended June 30, 2022.

The increase was the result of $5.9 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended June 30, 2022, partially offset by a decrease of $4.0 million from certain intangible assets becoming fully amortized subsequent to June 30, 2022, and a decrease of $0.3 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Amortization of intangibles expense increased $3.2 million, or 4.3%, to $78.3 million for the six months ended June 30, 2023, from $75.1 million for the six months ended June 30, 2022.

The increase was the result of $14.1 million from intangible assets acquired in acquisitions closed during, or subsequent to, the six months ended June 30, 2022, partially offset by a decrease of $10.2 million from certain intangible assets becoming fully amortized subsequent to June 30, 2022, and a decrease of $0.7 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 1.9% for the three months ended June 30, 2023, from 2.1% for the three months ended June 30, 2022.

Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 2.0% for the six months ended June 30, 2023, from 2.2% for the six months ended June 30, 2022.

Amortization of intangibles expense increased $0.5 million, or 1.4%, to $39.4 million for the three months ended September 30, 2023, from $38.9 million for the three months ended September 30, 2022.

The increase was the result of $5.1 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended September 30, 2022, partially offset by a decrease of $4.4 million from certain intangible assets becoming fully amortized subsequent to September 30, 2022, and a decrease of $0.2 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Amortization of intangibles expense increased $3.8 million, or 3.3%, to $117.8 million for the nine months ended September 30, 2023, from $114.0 million for the nine months ended September 30, 2022.

The increase was the result of $19.3 million from intangible assets acquired in acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, partially offset by a decrease of $14.6 million from certain intangible assets becoming fully amortized subsequent to September 30, 2022, and a decrease of $0.9 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 1.9% for the three months ended September 30, 2023, from 2.1% for the three months ended September 30, 2022.

Amortization of intangibles expense as a percentage of revenues decreased 0.1 percentage points to 2.0% for the nine months ended September 30, 2023, from 2.1% for the nine months ended September 30, 2022.

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

Impairments and Other Operating Items .

Impairments and other operating items increased $6.8 million to $10.9 million of net losses for the three months ended June 30, 2023, from $4.1 million of net losses for the three months ended June 30, 2022.

The net losses of $10.9 million recorded during the three months ended June 30, 2023 resulted from $6.2 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date, $4.5 million of losses on disposal of property and equipment and $0.2 million of other net charges.

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

Impairments and other operating items increased $6.7 million, to net losses totaling $12.7 million for the six months ended June 30, 2023, from net losses totaling $6.0 million for the six months ended June 30, 2022.

The net losses of $12.7 million recorded during the six months ended June 30, 2023 consisted of $6.4 million of losses on disposal of property and equipment, $6.2 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $0.1 million of other net charges.

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

Impairments and other operating items increased $43.0 million to $56.4 million of net losses for the three months ended September 30, 2023, from $13.4 million of net losses for the three months ended September 30, 2022.

The net losses of $56.4 million recorded during the three months ended September 30, 2023 resulted from $31.3 million of charges to adjust the carrying value of contingent consideration liabilities associated with acquisitions closed in prior periods, $25.0 million of charges to adjust the carrying value of certain assets impaired as a result of an adjustment to fair market value and $3.0 million of charges related to the settlement of legal matters, partially offset by $2.9 million of other net credits.

The net losses of $13.4 million recorded during the three months ended September 30, 2022 consisted of an $8.4 million lawsuit judgment accrual and $5.5 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date, partially offset by $0.5 million of other net credits.

Impairments and other operating items increased $49.7 million, to net losses totaling $69.2 million for the nine months ended September 30, 2023, from net losses totaling $19.5 million for the nine months ended September 30, 2022.

The net losses of $69.2 million recorded during the nine months ended September 30, 2023 consisted of $31.3 million of charges to adjust the carrying value of contingent consideration liabilities associated with acquisitions closed in prior periods, $25.0 million of charges to adjust the carrying value of certain assets impaired as a result of an adjustment to fair market value, $6.8 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date and $5.8 million of losses on disposal of property and equipment and $0.3 million of other net adjustments.

The net losses of $19.5 million recorded during the nine months ended September 30, 2022 consisted of $10.5 million of charges to write off the carrying cost of certain contracts that were not, or are not expected to be, renewed prior to the original estimated termination date, an $8.4 million lawsuit judgment accrual and $0.6 million of other net charges.

Operating Income .

Operating income increased $14.5 million, or 4.4%, to $344.1 million for the three months ended June 30, 2023, from $329.6 million for the three months ended June 30, 2022.

The increase in our operating income for the three months ended June 30, 2023 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the three months ended June 30, 2022 and an increase in earnings at our E&P waste operations, partially offset by lower recyclable commodity pricing in the period and an increase in executive separation costs.

Operating income increased $55.4 million, or 9.2%, to $658.8 million for the six months ended June 30, 2023, from $603.4 million for the six months ended June 30, 2022.

The increase in our operating income for the six months ended June 30, 2023 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the six months ended June 30, 2022 and an increase in earnings at our E&P waste operations, partially offset by lower recyclable commodity pricing in the period and an increase in executive separation costs.

Operating income as a percentage of revenues decreased 1.1 percentage points to 17.0% for the three months ended June 30, 2023, from 18.1% for the three months ended June 30, 2022.

The decrease as a percentage of revenues was comprised of a 1.4 percentage point increase in SG&A expense, a 0.4 percentage point increase in impairments and other operating items, and a 0.2 percentage point increase in depreciations expense, partially offset by a 0.7 percentage point increase in our costs of operations and a 0.2 percentage point decrease in amortization expense.

Operating income as a percentage of revenues decreased 0.6 percentage points to 16.8% for the six months ended June 30, 2023, from 17.4% for the six months ended June 30, 2022.

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

Operating income increased $26.2 million, or 8.0%, to $353.0 million for the three months ended September 30, 2023, from $326.8 million for the three months ended September 30, 2022.

The increase in our operating income for the three months ended September 30, 2023 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the three months ended September 30, 2022 and lower direct acquisition expenses, partially offset by an increase in charges related to adjustments for contingent consideration liabilities and impairments and lower recyclable commodity pricing in the period.

Operating income increased $81.6 million, or 8.8%, to $1.012 billion for the nine months ended September 30, 2023, from $930.2 million for the nine months ended September 30, 2022.

The increase in our operating income for the nine months ended September 30, 2023 was due primarily to price increases for our solid waste services, operating income generated from acquisitions closed during, or subsequent to, the nine months ended September 30, 2022 and an increase in earnings at our E&P waste operations, partially offset by an increase in charges related to adjustments for contingent consideration liabilities and impairments, lower recyclable commodity pricing in the period and an increase in executive separation costs.

Operating income as a percentage of revenues decreased 0.3 percentage points to 17.1% for the three months ended September 30, 2023, from 17.4% for the three months ended September 30, 2022.

The decrease as a percentage of revenues was comprised of a 2.0 percentage point increase in impairments and other operating items and a 0.1 percentage point increase in depreciations expense, partially offset by a 1.2 percentage point decrease in our costs of operations, a 0.4 percentage point decrease in SG&A expense and a 0.2 percentage point decrease in amortization expense.

Operating income as a percentage of revenues decreased 0.5 percentage points to 16.9% for the nine months ended September 30, 2023, from 17.4% for the nine months ended September 30, 2022.

The decrease as a percentage of revenues was comprised of a 0.8 percentage point increase in impairments and other operating items and a 0.4 percentage point increase in SG&A expense, partially offset by a 0.6 percentage point decrease in our costs of operations and a 0.1 percentage point decrease in amortization expense.

Interest Expense .

Interest expense increased $22.4 million, or 49.8%, to $67.5 million for the three months ended June 30, 2023, from $45.1 million for the three months ended June 30, 2022.

The increase was primarily attributable to an increase of $9.8 million due to a net increase in the average borrowings outstanding under our Credit Agreement and Term Loan Agreement, an increase of $7.9 million from the issuance of $750 million of senior unsecured notes during, or subsequent to, the three months ended June 30, 2022, an increase of $4.4 million from higher interest rates on borrowings outstanding under our Credit Agreement and $0.3 million of other net expense increases.

Interest expense increased $49.5 million, or 57.3%, to $135.9 million for the six months ended June 30, 2023, from $86.4 million for the six months ended June 30, 2022.

The increase was primarily attributable to an increase of $19.6 million due to a net increase in the average borrowings outstanding under our Credit Agreement and Term Loan Agreement, an increase of $18.7 million from the issuance of $1.250 billion of senior unsecured notes during, or subsequent to, the six months ended June 30, 2022, an increase of $10.3 million from higher interest rates on borrowings outstanding under our Credit Agreement and an increase of 0.9 million of other net expense increases.

Interest expense increased $17.8 million, or 34.9%, to $69.0 million for the three months ended September 30, 2023, from $51.2 million for the three months ended September 30, 2022.

The increase was primarily attributable to an increase of $10.4 million due to a net increase in the average borrowings outstanding under our Credit Agreement and Term Loan Agreement, an increase of $4.0 million from the issuance of $750 million of senior unsecured notes during, or subsequent to, the three months ended September 30, 2022, an increase of $2.9 million from higher interest rates on borrowings outstanding under our Credit Agreement and $0.5 million of other net expense increases.

Interest expense increased $67.3 million, or 49.0%, to $204.9 million for the nine months ended September 30, 2023, from $137.6 million for the nine months ended September 30, 2022.

The increase was primarily attributable to an increase of $30.0 million due to a net increase in the average borrowings outstanding under our Credit Agreement and Term Loan Agreement, an increase of $22.7 million from the issuance of $1.250 billion of senior unsecured notes during, or subsequent to, the nine months ended September 30, 2022, an increase of $13.2 million from higher interest rates on borrowings outstanding under our Credit Agreement and $1.4 million of other net expense increases.

Interest Income .

Interest income increased $0.6 million to $1.3 million for the three months ended June 30, 2023, from $0.7 million for the three months ended June 30, 2022.

Interest income increased $3.3 million to $4.1 million for the six months ended June 30, 2023, from $0.8 million for the six months ended June 30, 2022.

Interest income increased $1.0 million to $2.8 million for the three months ended September 30, 2023, from $1.8 million for the three months ended September 30, 2022.

Interest income increased $4.3 million to $6.9 million for the nine months ended September 30, 2023, from $2.6 million for the nine months ended September 30, 2022.

The increases were primarily attributable to higher average investment rates in the current period.

Other Income (Expense), Net .

Other income (expense), net increased $2.4 million, to an expense total of $0.2 million for the three months ended June 30, 2023, from an expense total of $2.6 million for the three months ended June 30, 2022.

Other expense of $0.2 million recorded during the three months ended June 30, 2023 consisted of increases in other expenses of $1.7 million primarily driven by net write off adjustments in the period, partially offset by $1.3 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations and $0.2 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

Other Income, Net .

Other income, net decreased $3.1 million, to $5.4 million for the three months ended September 30, 2023, from $8.5 million for the three months ended September 30, 2022.

Other income of $5.4 million recorded during the three months ended September 30, 2023 consisted of a $4.2 million reduction to certain accrued liabilities acquired in an acquisition closed in a prior year period and $3.7 million in other net income sources, partially offset by $2.0 million from a decrease in the value of investments purchased to fund our employee deferred compensation obligations and $0.5 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

dollar consideration required to settle international liabilities.

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

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

Other income (expense), net increased $9.1 million, to an income total of $3.0 million for the six months ended June 30, 2023, from an expense total of $6.1 million for the six months ended June 30, 2022.

Other income of $3.0 million recorded during the six months ended June 30, 2023 consisted of $2.6 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations and $0.4 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

Other income of $8.5 million recorded during the three months ended September 30, 2022 consisted of income from transactions primarily as a result of the impact from changes in foreign currency exchange rates on certain debt of $6.0 million and $2.5 million of other income.

Other income, net increased $6.0 million, to $8.4 million for the nine months ended September 30, 2023, from $2.4 million for the nine months ended September 30, 2022.

Other income of $8.4 million recorded during the nine months ended September 30, 2023 consisted of a $4.2 million reduction to certain accrued liabilities acquired in an acquisition closed in a prior year period, $3.8 million in other net income sources and $0.6 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations, partially offset by $0.2 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods reducing the U.S.

dollar consideration required to settle international liabilities.

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

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

Other income of $2.4 million recorded during the nine months ended September 30, 2022 consisted of income from transactions primarily as a result of the impact from changes in foreign currency exchange rates on certain debt of $7.9 million and $0.7 million of other income, partially offset by $6.2 million from a decline in the value of investments purchased to fund our employee deferred compensation obligations.

Income Tax Provision .

Income taxes increased $10.3 million, to $68.6 million for the three months ended June 30, 2023, from $58.3 million for the three months ended June 30, 2022.

Our effective tax rate for the three months ended June 30, 2023 was 24.7%.

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

Income taxes increased $15.8 million, to $122.9 million for the six months ended June 30, 2023, from $107.1 million for the six months ended

June 30, 2022.

Our effective tax rate for the six months ended June 30, 2023 was 23.2%.

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

The income tax provision for the three and six months ended June 30, 2023 included a benefit of $0.2 million and $2.9 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

Income taxes increased $14.2 million, to $63.0 million for the three months ended September 30, 2023, from $48.8 million for the three months ended September 30, 2022.

Our effective tax rate for the three months ended September 30, 2023 was 21.6%.

Our effective tax rate for the three months ended September 30, 2022 was 17.1%.

Income taxes increased $30.0 million, to $185.9 million for the nine months ended September 30, 2023, from $155.9 million for the nine months ended September 30, 2022.

Our effective tax rate for the nine months ended September 30, 2023 was 22.6%.

Our effective tax rate for the nine months ended September 30, 2022 was 19.5%.

The income tax provision for the three and nine months ended September 30, 2023 included a benefit of $0.1 million and $3.0 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

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

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

federal statutory rate.

2 unchanged sentences

The following table disaggregates our revenue by service line for the periods indicated (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,

Industrial and construction roll off

7 unchanged sentences

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

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

While certain corporate or regional overhead expense allocations may affect comparability on a period-over-period basis, the segment information presented herein reflects the realignment of these regions.

Our Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA.

6 unchanged sentences

Depreciation and

June 30, 2023

September 30, 2023

Corporate (a)

1 unchanged sentence

Depreciation and

June 30, 2022

September 30, 2022

Corporate (a)

Six Months Ended

Nine Months Ended

Depreciation and

June 30, 2023

September 30, 2023

Corporate (a)

Six Months Ended

Nine Months Ended

Depreciation and

June 30, 2022

September 30, 2022

Corporate (a)

4 unchanged sentences

A reconciliation of segment EBITDA to Income before income tax provision is included in Note 11 to our Condensed Consolidated Financial Statements included in Part 1, Item 1 of this report.

Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the three and six month periods ended June 30, 2023, compared to the three and six month periods ended June 30, 2022, are discussed below.

Revenue increased $40.3 million to $414.1 million for the three months ended June 30, 2023, from $373.8 million for the three months ended June 30, 2022, due to solid waste price increases, contributions from acquisitions and increased E&P waste revenues attributable to increases in the demand for our E&P waste services, partially offset by lower volumes in our residential and post-collection lines of business and a decrease in recyclable commodity prices as compared to the prior year.

Revenue increased $94.1 million to $814.0 million for the six months ended June 30, 2023, from $719.9 million for the six months ended June 30, 2022, due to solid waste price increases, contributions from acquisitions, increased E&P waste revenues attributable to increases in the demand for our E&P waste services and increased landfill volumes in our Florida market driven by the impact of Hurricane Ian on construction and demolition activity in the first three months of 2023, partially offset by lower residential collection volumes due to the purposeful non-renewal of a collection contract during the prior year period and other decreases in residential volumes, lower transfer station volumes and a decrease in recyclable commodity prices as compared to the prior years.

EBITDA increased $12.3 million to $129.7 million, or a 31.3% EBITDA margin for the three months ended June 30, 2023, from $117.4 million, or a 31.4% EBITDA margin for the three months ended June 30, 2022.

The decrease in our EBITDA margin for the three months ended June 30, 2023 was due to an increase in auto and workers’ compensation claim costs driven by higher average claim expense, an increase in allocated corporate overhead, higher leachate costs, higher labor costs due primarily to wage increases, higher bad debt expense, increased meetings cost and an increase in the costs of parts for trucks, equipment and containers, partially offset by the impact of price-led revenue growth, lower trucking costs related to lower transfer station volumes, decreases in diesel and natural gas costs due to a decline in average fuel prices, decreased professional fees, increased earnings at our E&P waste operations and the impact of acquisitions having higher EBITDA margins than our segment average.

EBITDA increased $33.1 million to $251.6 million, or a 30.9% EBITDA margin for the six months ended June 30, 2023, from $218.5 million, or a 30.4% EBITDA margin for the six months ended June 30, 2022.

The increase in our EBITDA margin for the six months ended June 30, 2023 was due to price-led increases in solid waste revenue, contribution from the aforementioned hurricane-driven construction and demolition activity, the impact of acquisitions having higher EBITDA margins than our segment average, lower trucking costs related to lower transfer station volumes, decreases in diesel and natural gas costs due to a decline in average fuel prices, the purposeful non-renewal of a residential contract and increased earnings at our E&P waste operations, partially offset by an increase in auto and workers’ compensation claim costs, higher labor costs, an increase in truck, container, equipment and facility maintenance and repair expenses, an increase in allocated corporate overhead and increased leachate expense.

Depreciation, depletion and amortization expense increased $2.0 million, to $45.9 million for the three months ended June 30, 2023, from $43.9 million for the three months ended June 30, 2022.

Depreciation, depletion and amortization expense increased $4.8 million, to $90.9 million for the six months ended June 30, 2023, from $86.1 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to assets acquired in acquisitions and additions to our fleet and equipment, partially offset by a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue increased $72.4 million to $419.0 million for the three months ended June 30, 2023, from $346.6 million for the three months ended June 30, 2022.

Revenue increased $134.6 million to $814.8 million for the six months ended June

30, 2023, from $680.2 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to contributions from acquisitions, price increases and increases in residential and commercial collection volumes, partially offset by decreased roll off and post-collection volumes, a decrease in the price of recyclable commodities as compared to the prior year periods, and lower intermodal revenue.

EBITDA increased $14.2 million to $119.6 million, or a 28.5% EBITDA margin for the three months ended June 30, 2023, from $105.4 million, or a 30.4% EBITDA margin for the three months ended June 30, 2022.

EBITDA increased $24.8 million to $230.2 million, or a 28.3% EBITDA margin for the six months ended June 30, 2023, from $205.4 million, or a 30.2% EBITDA margin for the six months ended June 30, 2022.

The decreases in our EBITDA margin for the three and six months ended June 30, 2023 were due to an increase in auto and workers’ compensation claim costs driven by higher average claim expense, an increase in allocated corporate overhead, higher labor costs due primarily to wage increases, higher leachate costs and an increase in processing costs incurred for recyclable material driven primarily by a decrease in commodity values, partially offset by lower trucking costs and decreases in diesel and natural gas costs due to a decline in average fuel prices.

The three months ended June 30, 2023 also benefitted from the impact of acquisitions having higher EBITDA margins than our segment average.

Depreciation, depletion and amortization expense increased $13.9 million, to $50.5 million for the three months ended June 30, 2023, from $36.6 million for the three months ended June 30, 2022.

Depreciation, depletion and amortization expense increased $25.9 million, to $98.1 million for the six months ended June 30, 2023, from $72.2 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to assets acquired in acquisitions and additions to our fleet and equipment.

Revenue increased $44.0 million to $369.2 million for the three months ended June 30, 2023, from $325.2 million for the three months ended June 30, 2022.

Revenue increased $94.0 million to $709.2 million for the six months ended June 30, 2023, from $615.2 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to price increases and contributions from acquisitions, partially offset by a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA increased $16.6 million to $131.0 million, or a 35.5% EBITDA margin for the three months ended June 30, 2023, from $114.4 million, or a 35.2% EBITDA margin for the three months ended June 30, 2022.

EBITDA increased $35.3 million to $246.7 million, or a 34.8% EBITDA margin for the six months ended June 30, 2023, from $211.4 million, or a 34.4% EBITDA margin for the six months ended June 30, 2022.

The increases in our EBITDA margin for the three and six months ended June 30, 2023 were due to the benefits from price-led increases in revenue, decreases in diesel and natural gas costs due to a decline in average fuel prices and the impact of acquisitions having higher EBITDA margins than our segment average, partially offset by a decrease in the value of recyclable commodities as compared to the prior year periods, an increase in auto and workers’ compensation claim costs driven by higher average claim expense and an increase in allocated corporate overhead.

Depreciation, depletion and amortization expense increased $3.6 million, to $42.8 million for the three months ended June 30, 2023, from $39.2 million for the three months ended June 30, 2022.

Depreciation, depletion and amortization expense increased $8.8 million, to $84.2 million for the six months ended June 30, 2023, from $75.4 million for the six months ended June 30, 2022.

Revenue increased $33.5 million to $343.4 million for the three months ended June 30, 2023, from $309.9 million for the three months ended June 30, 2022.

Revenue increased $91.9 million to $672.6 million for the six months ended June 30, 2023, from $580.7 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to price increases and contributions from acquisitions, partially offset by decreased post-collection

volumes, decreased residential collection volumes, and a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA increased $14.8 million to $86.5 million, or a 25.2% EBITDA margin for the three months ended June 30, 2023, from $71.7 million, or a 23.1% EBITDA margin for the three months ended June 30, 2022.

EBITDA increased $22.8 million to $159.8 million, or a 23.8% EBITDA margin for the six months ended June 30, 2023, from $137.0 million, or a 23.6% EBITDA margin for the six months ended June 30, 2022.

The increases in our EBITDA margin for the three and six months ended June 30, 2023 were due primarily to price-led increases in revenue, lower disposal expense, decreases in leachate costs, decreases in diesel and natural gas costs due to a decline in average fuel prices and lower benefits costs, partially offset by higher labor costs primarily driven by wage increases, the impact of acquisitions having lower EBITDA margins than our segment average, an increase in the average auto and workers’ compensation claim cost, higher landfill maintenance costs, an increase in professional fees driven by legal costs, and lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing.

Depreciation, depletion and amortization expense increased $5.9 million, to $52.3 million for the three months ended June 30, 2023, from $46.4 million for the three months ended June 30, 2022.

Depreciation, depletion and amortization expense increased $9.9 million, to $100.3 million for the six months ended June 30, 2023, from $90.4 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to assets acquired in acquisitions, additions to our fleet and equipment and higher depletion expense due to higher landfill development costs increasing our per ton landfill depletion rates, net of lower landfill volumes, partially offset by a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue decreased $1.7 million to $248.7 million for the three months ended June 30, 2023, from $250.4 million for the three months ended June 30, 2022.

The decrease for the three months ended June 30, 2023 was due to a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, lower prices for renewable energy credits associated with the generation of landfill gas, lower residential and commercial volumes, and lower prices for recyclable commodities as compared to the prior year period, partially offset by price increases and contributions from acquisitions.

Revenue increased $10.8 million to $475.9 million for the six months ended June 30, 2023, from $465.1 million for the six months ended June 30, 2022.

The increase for the six months ended June 30, 2023 was due to price increases and contributions from acquisitions, partially offset by a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, lower prices for renewable energy credits associated with the generation of landfill gas, lower landfill volumes driven by decreased special waste, a decrease in residential collection volumes, and lower prices for recyclable commodities as compared to the prior year period.

EBITDA increased $2.6 million to $95.2 million, or a 38.3% EBITDA margin for the three months ended June 30, 2023, from $92.6 million, or a 37.0% EBITDA margin for the three months ended June 30, 2022.

The increase in our EBITDA margin for the three months ended June 30, 2023 was due to decreases in diesel and natural gas costs due to a decline in average fuel prices, decrease in trucking costs and lower meeting costs, partially offset by lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing, an increase in the average auto and workers’ compensation claim cost, an increase in truck, container, equipment and facility maintenance and repair expenses, higher labor costs, and an increase in allocated corporate expense as compared to the prior year period.

EBITDA increased $0.7 million to $178.2 million, or a 37.4% EBITDA margin for the six months ended June 30, 2023, from $177.5 million, or a 38.2% EBITDA margin for the six months ended June 30, 2022.

The decrease in our EBITDA margin for the six months ended June 30, 2023 was due to lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing, an increase in the average auto and workers’ compensation claim cost, an increase in truck, container, equipment and facility maintenance and repair expenses, higher labor costs, an increase in allocated corporate expense as compared to the prior year period, and the impact of acquisitions having EBITDA margins lower than our segment average, partially offset by decreases in diesel and natural gas costs due to a decline in average fuel prices, a decrease in trucking costs and lower meeting costs.

Depreciation, depletion and amortization expense decreased $1.1 million, to $30.8 million for the three months ended June 30, 2023, from $31.9 million for the three months ended June 30, 2022.

The decrease for the three months ended June 30, 2023 was due to a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, a decrease in depletion expense due to lower landfill disposal volumes, partially offset by assets acquired in acquisitions and additions to our fleet and equipment.

Depreciation, depletion and amortization expense increased $1.5 million, to $60.8 million for the six months ended June 30, 2023, from $59.3 million for the six months ended June 30, 2022.

The increase for the six months ended June 30, 2023 was due to assets acquired in acquisitions and additions to our fleet and equipment, partially offset by a decrease in depletion expense due to lower landfill disposal volumes and a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Revenue increased $16.1 million to $226.7 million for the three months ended June 30, 2023, from $210.6 million for the three months ended June 30, 2022.

Revenue increased $33.6 million to $435.2 million for the six months ended June 30, 2023, from $401.6 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to price increases partially offset by a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA increased $1.1 million to $62.4 million, or a 27.5% EBITDA margin for the three months ended June 30, 2023, from $61.3 million, or a 29.1% EBITDA margin for the three months ended June 30, 2022.

EBITDA increased $9.0 million to $120.1 million, or a 27.6% EBITDA margin for the six months ended June 30, 2023, from $111.1 million, or a 27.7% EBITDA margin for the six months ended June 30, 2022.

The decreases in our EBITDA margin for the three and six months ended June 30, 2023 were due primarily to higher leachate costs, an increase in auto and workers’ compensation claim costs, an increase in allocated corporate overhead, lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing and an increase in professional fees, partially offset by price-led revenue growth, lower disposal costs due to increased internalization in certain markets and decreases in diesel and natural gas costs due to a decline in average fuel prices.

Depreciation, depletion and amortization expense increased $0.7 million, to $29.9 million for the three months ended June 30, 2023, from $29.2 million for the three months ended June 30, 2022.

Depreciation, depletion and amortization expense increased $1.7 million, to $57.4 million for the six months ended June 30, 2023, from $55.7 million for the six months ended June 30, 2022.

The increases for the three and six months ended June 30, 2023 were due to additions to our fleet and equipment, higher depletion expense due to higher landfill development costs increasing our per ton landfill depletion rates and increased landfill volumes.

EBITDA decreased $14.3 million, to a loss of $17.0 million for the three months ended June 30, 2023, from a loss of $2.7 million for the three months ended June 30, 2022.

EBITDA decreased $12.0 million, to a loss of $19.4 million for the six months ended June 30, 2023, from a loss of $7.4 million for the six months ended June 30, 2022.

The decreases in our EBITDA for the three and six months ended June 30, 2023 were due to an increase in executive separation expenses, increased equity-based compensation expense associated with our annual recurring grants of restricted share units to our personnel, increased deferred compensation expenses, increased incentive compensation costs, increased administrative payroll costs primarily driven by wage increases and additional headcount to support continued growth, and increased costs due to increased travel and meetings, partially offset by lower compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the first three months of 2022 that did not reoccur in the current year periods, increased allocation of costs to our operating segments driven by overall higher corporate expenses and lower direct acquisition expenses associated with a decrease in acquisition activity in the current year.

Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the three and nine month periods ended September 30, 2023, compared to the three and nine month periods ended September 30, 2022, are discussed below.

Revenue increased $30.2 million to $413.6 million for the three months ended September 30, 2023, from $383.4 million for the three months ended September 30, 2022, due to solid waste price increases, contributions from acquisitions, increased E&P waste revenues attributable to increases in the demand for our E&P waste services, partially offset by lower volumes in our residential and commercial lines of business and a decrease in post-collection volumes.

Revenue increased $124.2 million to $1.228 billion for the nine months ended September 30, 2023, from $1.103 billion for the nine months ended September 30, 2022, due to solid waste price increases, contributions from acquisitions, increased E&P waste revenues attributable to increases in the demand for our E&P waste services and increased landfill volumes in our Florida market driven by the impact of Hurricane Ian on construction and demolition activity in the first three months of 2023, partially offset by lower residential collection volumes due to the purposeful non-renewal of a collection contract during the prior year period and other decreases in residential volumes, lower transfer station volumes and a decrease in recyclable commodity prices as compared to the prior years.

EBITDA increased $10.6 million to $133.1 million, or a 32.2% EBITDA margin for the three months ended September 30, 2023, from $122.5 million, or a 31.9% EBITDA margin for the three months ended September 30, 2022.

The increase in our EBITDA margin for the three months ended September 30, 2023 was due to the impact of price-led revenue growth, lower trucking costs and disposal expense related to lower transfer station volumes, and a decrease in facility repair costs, partially offset by an increase in auto and workers’ compensation claim costs driven by higher average claim expense and an increase in labor costs due primarily to wage increases.

EBITDA increased $43.7 million to $384.7 million, or a 31.3% EBITDA margin for the nine months ended September 30, 2023, from $341.0 million, or a 30.9% EBITDA margin for the nine months ended September 30, 2022.

The increase in our EBITDA margin for the nine months ended September 30, 2023 was due to price-led increases in solid waste revenue, contribution from the aforementioned hurricane-driven construction and demolition activity, the impact of acquisitions having higher EBITDA margins than our segment average, lower trucking costs related to lower transfer station volumes, decreases in diesel and natural gas costs due to a decline in average fuel prices, the purposeful non-

renewal of a residential contract and increased earnings at our E&P waste operations, partially offset by an increase in auto and workers’ compensation claim expenses driven by higher average claim costs, higher labor costs due to wage increases and increased leachate expense.

Depreciation, depletion and amortization expense increased $0.6 million, to $44.6 million for the three months ended September 30, 2023, from $44.0 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $5.5 million, to $135.6 million for the nine months ended September 30, 2023, from $130.1 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to assets acquired in acquisitions, partially offset by a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue increased $62.3 million to $432.5 million for the three months ended September 30, 2023, from $370.2 million for the three months ended September 30, 2022.

Revenue increased $196.9 million to $1.247 billion for the nine months ended September 30, 2023, from $1.050 billion for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to contributions from acquisitions, price increases and increases in residential and commercial collection volumes, partially offset by decreased roll off and post-collection volumes, a decrease in the price of recyclable commodities as compared to the prior year periods and lower intermodal revenue.

EBITDA increased $14.7 million to $124.4 million, or a 28.8% EBITDA margin for the three months ended September 30, 2023, from $109.7 million, or a 29.6% EBITDA margin for the three months ended September 30, 2022.

EBITDA increased $39.6 million to $354.7 million, or a 28.4% EBITDA margin for the nine months ended September 30, 2023, from $315.1 million, or a 30.0% EBITDA margin for the nine months ended September 30, 2022.

The decreases in our EBITDA margin for the three and nine months ended September 30, 2023 were due to an increase in auto and workers’ compensation claim costs driven by higher average claim expense, an increase in allocated corporate overhead, higher labor costs due primarily to wage increases, higher leachate and other landfill maintenance costs and an increase in processing costs incurred for recyclable material driven primarily by a decrease in commodity values, partially offset by lower trucking costs and the benefits from the impact of acquisitions having higher EBITDA margins than our segment average.

Depreciation, depletion and amortization expense increased $11.6 million, to $50.3 million for the three months ended September 30, 2023, from $38.7 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $37.5 million, to $148.4 million for the nine months ended September 30, 2023, from $110.9 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to assets acquired in acquisitions and additions to our fleet and equipment.

Revenue increased $34.0 million to $372.9 million for the three months ended September 30, 2023, from $338.9 million for the three months ended September 30, 2022.

Revenue increased $127.9 million to $1.082 billion for the nine months ended September 30, 2023, from $954.1 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to price increases and contributions from acquisitions, partially offset by lower residential revenues and a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA increased $15.3 million to $137.8 million, or a 37.0% EBITDA margin for the three months ended September 30, 2023, from $122.5 million, or a 36.1% EBITDA margin for the three months ended September 30, 2022.

EBITDA increased $50.6 million to $384.5 million, or a 35.5% EBITDA margin for the nine months ended September 30, 2023, from $333.9 million, or a 35.0% EBITDA margin for the nine months ended September 30, 2022.

The increases in our EBITDA margin for the three and nine months ended September 30, 2023 were due to the benefits from price-led increases in revenue, decreases in diesel and natural gas costs due to a decline in average fuel prices, the impact of acquisitions having higher EBITDA margins than our segment average and lower benefits costs, partially offset by an

increase in auto and workers’ compensation claim costs driven by higher average claim expense, a decrease in the value of recyclable commodities as compared to the prior year periods and an increase in allocated corporate overhead.

Depreciation, depletion and amortization expense increased $3.1 million, to $43.2 million for the three months ended September 30, 2023, from $40.1 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $11.9 million, to $127.3 million for the nine months ended September 30, 2023, from $115.4 million for the nine months ended September 30, 2022.

Revenue increased $23.8 million to $353.1 million for the three months ended September 30, 2023, from $329.3 million for the three months ended September 30, 2022.

Revenue increased $115.8 million to $1.026 billion for the nine months ended September 30, 2023, from $909.9 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to price increases and contributions from acquisitions, partially offset by decreased post-collection volumes, decreased residential and commercial service revenues, lower roll off volumes and a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA increased $23.4 million to $100.8 million, or a 28.5% EBITDA margin for the three months ended September 30, 2023, from $77.4 million, or a 23.5% EBITDA margin for the three months ended September 30, 2022.

EBITDA increased $46.3 million to $260.6 million, or a 25.4% EBITDA margin for the nine months ended September 30, 2023, from $214.3 million, or a 23.6% EBITDA margin for the nine months ended September 30, 2022.

The increases in our EBITDA margin for the three and nine months ended September 30, 2023 were due primarily to price-led increases in revenue, a decrease in trucking costs, lower disposal expense, decreases in leachate costs, lower benefits costs and a decrease in professional fees related to lower legal spend, partially offset by higher labor costs primarily driven by wage increases, the impact of acquisitions having lower EBITDA margins than our segment average, an increase in the average auto and workers’ compensation claim cost and lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing.

Depreciation, depletion and amortization expense increased $3.8 million, to $53.1 million for the three months ended September 30, 2023, from $49.3 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $13.7 million, to $153.4 million for the nine months ended September 30, 2023, from $139.7 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to assets acquired in acquisitions, additions to our fleet and equipment and higher depletion expense due to higher landfill development costs increasing our per ton landfill depletion rates, net of lower landfill volumes, partially offset by a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue increased $20.8 million to $263.1 million for the three months ended September 30, 2023, from $242.3 million for the three months ended September 30, 2022.

Revenue increased $31.6 million to $739.0 million for the nine months ended September 30, 2023, from $707.4 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to price increases, contributions from acquisitions, and an increase in landfill volumes, partially offset by a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods, a decrease in residential collection volumes, and lower prices for recyclable commodities as compared to the prior year period.

For the three months ended September 30, 2023, revenue benefited from higher prices for renewable energy credits associated with the generation of landfill gas.

For the nine months ended September 30, 2023, renewable energy credits associated with the generation of landfill gas decreased as compared to the prior year period.

EBITDA increased $20.6 million to $108.5 million, or a 41.2% EBITDA margin for the three months ended September 30, 2023, from $87.9 million, or a 36.3% EBITDA margin for the three months ended September 30, 2022.

EBITDA increased $21.3 million to $286.7 million, or a 38.8% EBITDA margin for the nine months ended September 30, 2023, from $265.4 million, or a 37.5% EBITDA margin for the nine months ended September 30, 2022.

The increases in our EBITDA margin for the three and nine months ended September 30, 2023 were due to decreases in diesel and natural gas costs due to a decline in average fuel prices, an increase in landfill volumes, a decrease in trucking costs and lower labor expenses, partially offset by lower recycle commodity revenues, net of lower rebates, driven by lower average commodity pricing, an increase in the average auto and workers’ compensation claim cost, an increase in truck, container, equipment and facility maintenance and repair expenses and an increase in allocated corporate expense as compared to the prior year period.

Depreciation, depletion and amortization expense increased $1.9 million, to $31.4 million for the three months ended September 30, 2023, from $29.5 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $3.3 million, to $92.1 million for the nine months ended September 30, 2023, from $88.8 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to assets acquired in acquisitions and additions to our fleet and equipment and increased depletion as a result of higher landfill volumes, partially offset by a decrease in the average foreign currency exchange rate in effect during the comparable reporting periods.

Revenue increased $13.8 million to $229.6 million for the three months ended September 30, 2023, from $215.8 million for the three months ended September 30, 2022.

Revenue increased $47.5 million to $664.9 million for the nine months ended September 30, 2023, from $617.4 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to price increases partially offset by a decrease in the value of recyclable commodities compared to the prior year periods.

EBITDA decreased $2.1 million to $61.9 million, or a 27.0% EBITDA margin for the three months ended September 30, 2023, from $64.0 million, or a 29.7% EBITDA margin for the three months ended September 30, 2022.

EBITDA increased $7.0 million to $182.1 million, or a 27.4% EBITDA margin for the nine months ended September 30, 2023, from $175.1 million, or a 28.4% EBITDA margin for the nine months ended September 30, 2022.

The decreases in our EBITDA margin for the three and nine months ended September 30, 2023 were due primarily to an increase in auto and workers’ compensation claim costs, an increase in allocated corporate overhead and benefits expense, higher leachate costs, lower recycle commodity revenues and an increase in recycle processing costs driven by lower average commodity pricing and an increase in professional fees, partially offset by price-led revenue growth, lower disposal costs due to increased internalization in certain markets and decreases in diesel and natural gas costs due to a decline in average fuel prices.

Depreciation, depletion and amortization expense increased $1.2 million, to $29.9 million for the three months ended September 30, 2023, from $28.7 million for the three months ended September 30, 2022.

Depreciation, depletion and amortization expense increased $2.9 million, to $87.3 million for the nine months ended September 30, 2023, from $84.4 million for the nine months ended September 30, 2022.

The increases for the three and nine months ended September 30, 2023 were due to additions to our fleet and equipment, higher depletion expense due to higher landfill development costs increasing our per ton landfill depletion rates and increased landfill volumes.

EBITDA increased $9.0 million, to a loss of $2.7 million for the three months ended September 30, 2023, from a loss of $11.7 million for the three months ended September 30, 2022.

The increase in our EBITDA for the three months ended September 30, 2023 was due lower direct acquisition expenses associated with a decrease in acquisition activity in the current year period, increased allocation of costs to our operating segments driven by overall higher corporate expenses, decreased deferred compensation expenses and decreased equity-based compensation expenses, partially offset by increased incentive compensation costs, increased administrative payroll costs primarily driven by wage increases and additional headcount to support continued growth and higher costs due to increased travel and meetings.

EBITDA decreased $3.1 million, to a loss of $22.1 million for the nine months ended September 30, 2023, from a loss of $19.0 million for the nine months ended September 30, 2022.

The decrease in our EBITDA for the nine months ended September 30, 2023 was due to an increase in executive separation expenses, increased incentive compensation costs, increased equity-based compensation expense associated with our annual recurring grants of restricted share units to our personnel, increased deferred compensation expenses, increased administrative payroll costs primarily driven by wage increases and additional headcount to support continued growth, increased costs due to increased travel and meetings, higher professional fees driven by legal costs and increased expenses associated with information systems and applications, partially offset by lower compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the first three months of 2022 that did not reoccur in the current year periods, increased allocation of costs to our operating segments driven by overall higher corporate expenses and lower direct acquisition expenses associated with a decrease in acquisition activity in the current year period.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth cash flow information for the six months ended June 30, 2023 and 2022 (in thousands of U.S.

Six Months Ended

The following table sets forth cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands of U.S.

Nine Months Ended

September 30,

Net cash provided by operating activities

6 unchanged sentences

Operating Activities Cash Flows

For the six months ended June 30, 2023, net cash provided by operating activities was $1.017 billion.

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

The $43.0 million increase was due primarily to the following:

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $74.5 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the six months ended June 30, 2022, a decrease in compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the six months ended June 30, 2022 that did not reoccur in the current period, and an increase in earnings at our E&P waste operations.

2) Accounts receivable — Our increase in net cash provided by operating activities was favorably impacted by $66.9 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $16.4 million for the six months ended June 30, 2023, compared to a decrease to operating cash flows of $83.3 million for the six months ended June 30, 2022.

The decrease for the six months ended June 30, 2023 was due to increases in revenue, which remained as outstanding receivables at June 30, 2023, partially offset by one additional collection day in the period.

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

3) Prepaid expenses — Our increase in net cash provided by operating activities was favorably impacted by $64.7 million from prepaid expenses as changes in prepaid expenses resulted in an increase to operating cash flows of $46.4 million for the six months ended June 30, 2023, compared to a decrease to operating cash flows of $18.3 million for the six months ended June 30, 2022.

The increase for the six months ended June 30, 2023 was due primarily to decreased prepaid income tax payments.

The decrease for the six months ended June 30, 2022 was due primarily to increases in prepaid income tax payments and prepaid vendor payments.

4) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was unfavorably impacted by $101.3 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in a decrease to operating cash flows of $18.5 million for the six months ended June 30, 2023, compared to an increase to operating cash flows of $82.8 million for the six months ended June 30, 2022.

The decrease for the six months ended June 30, 2023 was due primarily to outstanding obligations to vendors and accrued annual management bonus compensation as of December 31, 2022 that were paid in the current period, partially offset by an increase in accrued interest due primarily to higher interest rates and higher accrued insurance costs outstanding at period end.

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

5) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $53.6 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $31.4 million for the six months ended June 30, 2023, compared to an increase to operating cash flows of $85.0 million for the six months ended June 30, 2022.

The increase for the six months ended June 30, 2023 was primarily due to accelerated tax depreciation from capital expenditures.

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

6) Deferred revenue — Our increase in net cash provided by operating activities was unfavorably impacted by $13.1 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $14.4 million for the six months ended June 30, 2023, compared to an increase to operating cash flows of $27.5 million for the six months ended June 30, 2022.

Net cash provided by operating activities increased $70.7 million to $1.571 billion for the nine months ended September 30, 2023, from net cash provided by operating activities of $1.500 billion for the nine months ended September 30, 2022.

The significant components of the increase included the following:

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $136.5 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the nine months ended September 30, 2022, a decrease in compensation to non-management personnel associated with the impact of the COVID-19 pandemic that occurred in the nine months ended September 30, 2022 that did not reoccur in the current period, and an increase in earnings at our E&P waste operations.

2) Accounts receivable — Our increase in net cash provided by operating activities was favorably impacted by $58.7 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $31.9 million for the nine months ended September 30, 2023, compared to a decrease to operating cash flows of $90.6 million for the nine months ended September 30, 2022.

The decreases for the nine months ended September 30, 2023 and September 30, 2022 were due to increases in revenue, which remained as outstanding receivables at the end of the period.

3) Prepaid expenses — Our increase in net cash provided by operating activities was favorably impacted by $47.8 million from prepaid expenses as changes in prepaid expenses resulted in an increase to operating cash flows of $24.9 million for the nine months ended September 30, 2023, compared to a decrease to operating cash flows of $22.9 million for the nine months ended September 30, 2022.

The increase for the nine months ended September 30, 2023 was due primarily to decreased prepaid income tax payments.

The decrease for the nine months ended September 30, 2022 was due primarily to increases in prepaid income tax payments and prepaid vendor payments.

4) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was unfavorably impacted by $99.0 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $27.7 million for the nine months ended September 30, 2023, compared to an increase to operating cash flows of $126.7 million for the nine months ended September 30, 2022.

The increase for the nine months ended September 30, 2023 was due primarily to an increase in accrued insurance costs, an increase in accrued interest due to the timing of interest payments and increased property taxes attributable to payment timing, partially offset by lower outstanding obligations to vendors.

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

5) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $62.0 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $29.1 million for the nine months ended September 30, 2023, compared to an increase to operating cash flows of $91.1 million for the nine months ended September 30, 2022.

The increase for the nine months ended September 30, 2023 was primarily due to accelerated tax depreciation from capital expenditures.

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

6) Deferred revenue — Our increase in net cash provided by operating activities was unfavorably impacted by $10.2 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $16.4 million for the nine months ended September 30, 2023, compared to an increase to operating cash flows of $26.5 million for the nine months ended September 30, 2022.

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

At June 30, 2023, we had a working capital deficit of $351.8 million, including cash and equivalents of $91.7 million.

Our working capital increased $43.2 million from a working capital deficit of $395.0 million at December 31, 2022 including cash and equivalents of $78.6 million, due primarily to an increase in accounts receivables as a result of increases in revenue, higher cash balances and decreases in accounts payable and accrued liabilities driven by the timing of payments for obligations to vendors and accrued annual management bonus compensation that were outstanding as of December 31, 2022, partially offset by a decrease in prepaid income tax, lower prepaid insurance costs, and an increase in deferred revenues.

At September 30, 2023, we had a working capital deficit of $424.0 million, including cash and equivalents of $96.2 million.

Our working capital deficit increased $29.0 million from a working capital deficit of $395.0 million at December 31, 2022 including cash and equivalents of $78.6 million, due primarily to a decrease in prepaid income tax, an increase in contingent consideration liabilities and an increase in deferred revenues, partially offset by an increase in accounts receivables as a result of increases in revenue, higher cash balances and decreases in accounts payable and accrued liabilities driven by the timing of payments for obligations to vendors.

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

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Investing Activities Cash Flows

Net cash used in investing activities decreased $287.3 million to $604.6 million for the six months ended June 30, 2023, from $891.9 million for the six months ended June 30, 2022.

Net cash used in investing activities decreased $673.0 million to $1.186 billion for the nine months ended September 30, 2023, from $1.859 billion for the nine months ended September 30, 2022.

The significant components of the decrease included the following:

1) A decrease in cash paid for acquisitions of $700.0 million;

2) A decrease in capital expenditures at operations owned in the comparable periods of $29.1 million due to decreases in landfill site costs and land and facility expenditures, partially offset by increased truck and equipment purchases;

3) An increase in capital expenditures at operations acquired during the comparative periods of $29.1 million due to expenditures for landfill site costs, trucks and equipment;

3) An increase in capital expenditures at operations owned in the comparable periods of $2.5 million due to increases in trucks, equipment and landfill site costs;

4) A decrease in proceeds from disposal of assets of $14.7 million due to lower disposal of non-strategic assets to provide funding toward new capital expenditures.

Financing Activities Cash Flows

Net cash used in financing activities increased $414.4 million to $389.3 million for the six months ended June 30, 2023, from net cash provided by financing activities of $25.1 million for the six months ended June 30, 2022.

Net cash used in financing activities increased $816.9 million to $366.5 million for the nine months ended September 30, 2023, from net cash provided by financing activities of $450.4 million for the nine months ended September 30, 2022.

The significant components of the increase included the following:

1) An increase from the net change in long-term borrowings of $827.0 million in which long-term borrowings decreased $228.3 million during the six months ended June 30, 2023 and increased $598.7 million during the six months ended June 30, 2022;

2) An increase from higher cash dividends paid of $12.3 million due primarily to an increase in our quarterly dividend rate for the six months ended June 30, 2023 to $0.255 per share, from $0.23 per share for the six months ended June 30, 2022;

1) An increase from the net change in long-term borrowings of $1.237 billion in which long-term borrowings decreased $138.8 million during the nine months ended September 30, 2023 and increased $1.098 billion during the nine months ended September 30, 2022;

2) An increase from higher cash dividends paid of $19.1 million due primarily to an increase in our quarterly dividend rate for the nine months ended September 30, 2023 to $0.255 per share, from $0.23 per share for the nine months ended September 30, 2022;

3) An increase in tax withholdings related to net share settlements of equity-based compensation of $11.9 million due to an increase in the value of equity-based compensation awards vesting;

4) A decrease from lower payments to repurchase our common shares of $425.0 million that occurred in the six months ended June 30, 2022.

4) A decrease from lower payments to repurchase our common shares of $425.0 million that occurred in the nine months ended September 30, 2022;

5) A decrease from lower payments related to the issuance of debt of $11.4 million that occurred during the nine months ended September 30, 2022.

On July 25, 2023, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our normal course issuer bid, or the NCIB, to purchase up to 12,881,534 of our common shares during the period of August 10, 2023 to August 9, 2024 or until such earlier time as the NCIB is completed or terminated at our option.

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Information regarding our NCIB can be found under the section “Normal Course Issuer Bid” in Note 17 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

On July 25, 2023, our Board of Directors approved, subject to receipt of regulatory approvals, the annual renewal of our NCIB.

The renewal is expected to commence following the conclusion of our current NCIB expiring August 9, 2023.

Upon approval, we anticipate that we will be authorized to make purchases during the period of August 10, 2023 to August 9, 2024 or until such earlier time as the NCIB is completed or terminated at our option.

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

In November 2022, we announced that our Board of Directors increased our regular quarterly cash dividend by $0.025, from $0.230 to $0.255 per share.

Cash dividends of $131.1 million and $118.8 million were paid during the six months ended June 30, 2023 and 2022, respectively.

In October 2023, we announced that our Board of Directors increased our regular quarterly cash dividend by $0.03, from $0.255 to $0.285 per share.

Cash dividends of $196.8 million and $177.7 million were paid during the nine months ended September 30, 2023 and 2022, respectively.

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

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

We made $390.3 million in capital expenditures for property and equipment, net of proceeds from disposal of assets, during the six months ended June 30, 2023, and we expect to make total capital expenditures for property and equipment of approximately $920 million in 2023, net of proceeds from disposal of assets.

We made $606.9 million in capital expenditures for property and equipment, net of proceeds from disposal of assets, during the nine months ended September 30, 2023, and we expect to make total capital expenditures for property and equipment of approximately $920 million in 2023, net of proceeds from disposal of assets.

We have funded and intend to fund the balance of our planned 2023 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement.

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However, disruptions in the capital and credit markets could adversely affect our ability to draw on our Credit Agreement or raise other capital.

Our access to funds under the Credit Agreement is dependent on the ability of the banks that are parties to the agreement to meet their funding commitments.

Our access to funds under the Credit Agreement is dependent on the ability of the banks that are parties to the agreement to meet their funding

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

At June 30, 2023, $650.0 million under the term loan and $409.9 million under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $39.4 million.

We also had $85.3 million of letters of credit issued and outstanding at June 30, 2023 under a facility other than the Credit Agreement.

At September 30, 2023, $650.0 million under the term loan and $531.6 million under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $39.5 million.

We also had $102.2 million of letters of credit issued and outstanding at September 30, 2023 under a facility other than the Credit Agreement.

Our Credit Agreement matures in July 2026.

At June 30, 2023, $800.0 million under the term loan was outstanding under the Term Loan Agreement, which matures in July 2026.

At September 30, 2023, $800.0 million under the term loan was outstanding under the Term Loan Agreement, which matures in July 2026.

We are a well-known seasoned issuer with an effective shelf registration statement on Form S-3 filed in September 2021, which registers an unspecified amount of debt securities, including debentures, notes or other types of debt.

future, we may issue debt securities under our shelf registration statement or in private placements from time to time on an opportunistic basis, based on market conditions and available pricing.

In the future, we may issue debt securities under our shelf registration statement or in private placements from time to time on an opportunistic basis, based on market conditions and available pricing.

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

At June 30, 2023, we had the following contractual obligations:

At September 30, 2023, we had the following contractual obligations:

Payments Due by Period

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

At June 30, 2023, $240.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

At September 30, 2023, $365.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

Term SOFR rate loans, which bear interest at the Term SOFR rate plus the applicable margin (for a total rate ranging from 6.42% to 6.43% on such date).

At June 30, 2023, $169.9 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of 5.98% on such date).

At September 30, 2023, $15.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S.

base rate loans, which bear interest at the base rate plus the applicable margin (for a total rate of 8.50% on such date).

At September 30, 2023, $11.1 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based prime rate loans, which bear interest at the Canadian prime rate plus the applicable margin (for a total rate of 7.20% on such date).

At September 30, 2023, $140.5 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, which bear interest at the Canadian Dollar Offered Rate plus the applicable acceptance fee (for a total rate of 6.38% on such date).

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

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

At June 30, 2023, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 6.14% on such date).

At September 30, 2023, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 6.43% on such date).

3) $800.0 million in principal payments due July 2026 related to our term loan under our Term Loan Agreement.

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

At June 30, 2023, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 6.26% on such date).

4) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes.

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12) $56.0 million in principal payments related to our notes payable to sellers and other third parties.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at June 30, 2023, and have maturity dates ranging from 2024 to 2036.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at September 30, 2023, and have maturity dates ranging from 2024 to 2036.

13) $10.8 million in principal payments related to our financing leases.

Our financing leases bear interest at rates between 1.89% and 2.16% at June 30, 2023, and have expiration dates ranging from 2026 to 2028.

Our financing leases bear interest at rates between 1.89% and 5.07% at September 30, 2023, and have expiration dates ranging from 2026 to 2029.

The following assumptions were made in calculating cash interest payments:

1) We calculated cash interest payments on the Credit Agreement using the Term SOFR rate plus the applicable Term SOFR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at June 30, 2023.

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

2) We calculated cash interest payments on the Term Loan Agreement using the Term SOFR rate plus the applicable Term SOFR margin at June 30, 2023.

2) We calculated cash interest payments on the Term Loan Agreement using the Term SOFR rate plus the applicable Term SOFR margin at September 30, 2023.

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

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

Contingent consideration payments include $92.4 million recorded as liabilities in our Condensed Consolidated Financial Statements at June 30, 2023, and $17.1 million of future interest accretion on the recorded obligations.

Contingent consideration payments include $122.0 million recorded as liabilities in our Condensed Consolidated Financial Statements at September 30, 2023, and $17.2 million of future interest accretion on the recorded obligations.

We are party to operating lease agreements and finance leases.

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

At June 30, 2023, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 56.3 million gallons remaining to be purchased for a total of $165.1 million.

The current fuel purchase contracts expire on or before December 31, 2026.

These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2023, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

At September 30, 2023, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 64.1 million gallons remaining to be purchased for a total of $188.6 million.

The current fuel purchase contracts expire on or before September 30, 2029.

These arrangements have not materially affected our financial position, results of operations or liquidity during the nine months ended September 30, 2023, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

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

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.539 billion and $1.447 billion at June 30, 2023 and December 31, 2022, respectively.

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.580 billion and $1.447 billion at September 30, 2023 and December 31, 2022, respectively.

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

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

The disposal tonnage that we received in the six month periods ended June 30, 2023 and 2022, at all of our landfills during the respective period, is shown below (tons in thousands):

Six Months Ended June 30,

The disposal tonnage that we received in the nine month periods ended September 30, 2023 and 2022, at all of our landfills during the respective period, is shown below (tons in thousands):

Nine Months Ended September 30,

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

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Other companies may calculate adjusted free cash flow differently.

Our adjusted free cash flow for the six month periods ended June 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Six Months Ended

Our adjusted free cash flow for the nine month periods ended September 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Nine Months Ended

September 30,

Net cash provided by operating activities

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Capital expenditures for property and equipment

Cash received for divestitures (a)

Transaction-related expenses (b)

Executive separation costs (c)

Pre-existing Progressive Waste share-based grants (d)

Tax effect (d)

Payment of contingent consideration recorded in earnings (a)

Cash received for divestitures (b)

Transaction-related expenses (c)

Executive separation costs (d)

Pre-existing Progressive Waste share-based grants (e)

Tax effect (f)

Adjusted free cash flow

____________________

(a) Reflects the elimination of cash received in conjunction with the divestiture of certain operations.

(b) Reflects the addback of acquisition-related transaction costs and the settlement of an acquired tax liability .

(d) Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.

(e) The aggregate tax effect of footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods.

(a) Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of cash flows from operating activities as the amounts paid exceeded the fair value of the contingent consideration recorded at the acquisition date.

(b) Reflects the elimination of cash received in conjunction with the divestiture of certain operations.

(d) Reflects the cash component of severance expense associated with an executive departure.

(e) Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.

(f) The aggregate tax effect of footnotes (a) through (e) is calculated based on the applied tax rates for the respective periods.

Adjusted EBITDA

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Other companies may calculate adjusted EBITDA differently.

Our adjusted EBITDA for the three and six month periods ended June 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Our adjusted EBITDA for the three and nine month periods ended September 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income attributable to Waste Connections

Net income (loss) attributable to noncontrolling interests

Net income attributable to noncontrolling interests

Income tax provision

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Impairments and other operating items

Other expense (income), net

Other income, net

Transaction-related expenses (a)

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(b) Reflects fair value accounting changes associated with certain equity awards .

Adjusted Net Income Attributable to Waste Connections and Adjusted Net Income per Diluted Share Attributable to Waste Connections

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

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and six month periods ended June 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and nine month periods ended September 30, 2023 and 2022, are calculated as follows (amounts in thousands of U.S.

dollars, except per share amounts):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Reported net income attributable to Waste Connections

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(d) Reflects fair value accounting changes associated with certain equity awards.

(e) Reflects the cash and non-cash components of severance expense associated with a recent executive departure.

(e) Reflects the cash and non-cash components of severance expense associated with an executive departure.

(f) The aggregate tax effect of the adjustments in footnotes (a) through (e) is calculated based on the applied tax rates for the respective periods.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis