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Item 2. Management’s Discussion and Analysis

2024-07-25 compared with 2024-04-25 · 249 added, 150 removed, 272 unchanged (59% of the section changed)

4 unchanged sentences

These include:

● Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, estimated closure and post-closure liabilities, 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;

13 unchanged sentences

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.

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.

and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

2 unchanged sentences

To that end, we have committed $500 million to the advancement of long-term, aspirational ESG targets, which have been incorporated into executive compensation metrics.

Our investments primarily focus on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety through reduced incidents and enhancing employee engagement through improved voluntary turnover and Servant Leadership scores.

Our investments primarily focus on reducing emissions and emissions intensity, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety through reduced incidents and enhancing employee engagement through improved voluntary turnover and Servant Leadership scores.

Our 2023 Sustainability Report can be found at www.wasteconnections.com/sustainability but does not constitute a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.

13 unchanged sentences

and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.

All references to “dollars” or “$” used herein refer to U.S.

dollars, and all references to “CAD $” used herein refer to Canadian dollars, unless otherwise stated.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

6 unchanged sentences

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

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

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

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of operations

7 unchanged sentences

Income tax provision

Net loss (income) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Net income attributable to Waste Connections

Total revenues increased $172.2 million, or 9.1%, to $2.073 billion for the three months ended March 31, 2024, from $1.901 billion for the three months ended March 31, 2023.

Acquisitions closed during, or subsequent to, the three months ended March 31, 2023, increased revenues by $80.6 million for the three months ended March 31, 2024.

Operations that were divested during, or subsequent to, the three months ended March 31, 2023, decreased revenues by $2.6 million for the three months ended March 31, 2024.

During the three months ended March 31, 2024, the net increase in prices charged to our customers at our existing operations was $128.5 million, consisting of $140.6 million of core price increases and decreases in surcharges of $12.1 million.

During the three months ended March 31, 2024, we recognized volume losses totaling $69.6 million, resulting from lower residential collection volumes due primarily to the purposeful shedding of certain low-margin municipal contracts in our Eastern, Canada and Southern segments, lower commercial revenues and a decrease in roll off and post collection volumes in part due to the weather impacting operations in certain geographic markets.

E&P waste revenues at facilities owned during the three months ended March 31, 2024 and 2023 increased $8.6 million, 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 months ended March 31, 2024 and 2023 increased $15.3 million.

The increase is primarily attributable to higher average commodity pricing for old corrugated cardboard, plastics and other paper products as compared to the prior period.

An increase in the average Canadian dollar to U.S.

dollar currency exchange rate resulted in an increase in revenues of $0.4 million for the three months ended March 31, 2024.

Total revenues increased $227.1 million, or 11.2%, to $2.248 billion for the three months ended June 30, 2024, from $2.021 billion for the three months ended June 30, 2023.

Total revenues increased $399.2 million, or 10.2%, to $4.321 billion for the six months ended June 30, 2024, from $3.922 billion for the six months ended June 30, 2023.

Acquisitions closed during, or subsequent to, the three and six months ended June 30, 2023, increased revenues by $123.4 million and $204.0 million, respectively, for the three and six months ended June 30, 2024.

Operations that were divested during, or subsequent to, the three and six months ended June 30, 2023, decreased revenues by $2.6 million and $5.3 million, respectively, for the three and six months ended June 30, 2024.

During the three months ended June 30, 2024, the net increase in prices charged to our customers at our existing operations was $131.2 million, consisting of $135.7 million of core price increases and decreases in surcharges of $4.5 million.

During the six months ended June 30, 2024, the net increase in prices charged to our customers at our existing operations was $259.6 million, consisting of $276.3 million of core price increases and decreases in surcharges of $16.7 million.

During the three months ended June 30, 2024, we recognized volume losses totaling $54.2 million, resulting from lower residential collection volumes due primarily to the purposeful shedding of certain low-margin municipal contracts in our Eastern, Canada and Southern segments, lower commercial revenues and a decrease in post collection volumes.

During the six months ended June 30, 2024, we recognized volume losses totaling $123.8 million, resulting from lower residential collection volumes due primarily to the purposeful shedding of certain low-margin municipal contracts in our Eastern, Canada and Southern segments, lower commercial revenues and a decrease in roll off and post collection volumes in part due to the weather impacting operations in certain geographic markets.

E&P waste revenues at facilities owned during the three and six months ended June 30, 2024 and 2023 increased $9.0 million and $17.6 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, 2024 and 2023 increased $15.2 million and $30.6 million, respectively.

The increases are primarily attributable to higher average commodity pricing for old corrugated cardboard and other paper products as compared to the prior periods.

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

dollar currency exchange rate resulted in a decrease in revenues of $4.6 million and $4.2 million for the three and six months ended June 30, 2024, respectively.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7412 and 0.7397 for the three months ended March 31, 2024 and 2023, respectively.

Other revenues increased $11.0 million during the three months ended March 31, 2024, due primarily to an $11.7 million increase in landfill gas revenues on higher values for renewable energy credits and higher landfill gas volumes and

a $0.9 million increase in other non-core revenue sources, partially offset by a $1.6 million decrease in intermodal revenues.

dollar exchange rates on our Canadian revenues were 0.7308 and 0.7447 for the three months ended June 30, 2024 and 2023, respectively.

The average Canadian dollar to U.S.

dollar exchange rates on our Canadian revenues were 0.7356 and 0.7423 for the six months ended June 30, 2024 and 2023, respectively.

Other revenues increased $9.7 million during the three months ended June 30, 2024, due primarily to a $9.7 million increase in landfill gas revenues on higher values for renewable energy credits and higher landfill gas volumes and a $0.6 million increase in other non-core revenue sources, partially offset by a $0.6 million decrease in intermodal revenues.

Other revenues increased $20.7 million during the six months ended June 30, 2024, due primarily to a $21.4 million increase in landfill gas revenues on higher values for renewable energy credits and higher landfill gas volumes and a $1.5 million increase in other non-core revenue sources, partially offset by a $2.2 million decrease in intermodal revenues.

Cost of Operations .

Total cost of operations increased $74.8 million, or 6.5%, to $1.222 billion for the three months ended March 31, 2024, from $1.147 billion for the three months ended March 31, 2023.

The increase was primarily the result of $39.4 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended March 31, 2023, an increase in operating costs at our existing operations of $36.5 million, assuming foreign currency parity and an increase in operating costs of $0.3 million resulting from a lower average foreign currency exchange rate in effect during the current period, partially offset by a decrease of $1.4 million from operations divested during, or subsequent to, the three months ended March 31, 2023.

The increase in operating costs of $36.5 million, assuming foreign currency parity, at our existing operations for the three months ended March 31, 2024, consisted of higher labor and recurring incentive compensation expenses of $16.1 million, an increase in risk management expenses of $15.8 million due to higher claim and premium costs, an increase in post-closure liability interest accretion expense of $4.3 million, an increase in benefits costs of $3.3 million, an increase in disposal costs of $3.1 million, an increase in leachate costs of $3.0 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $2.2 million, an increase in taxes on revenues of $1.9 million as the result of increased revenues and a net increase of other expenses of $2.2 million, partially offset by a decrease in fuel expense of $5.4 million due to lower diesel and natural gas prices, a decrease in subcontract expense of $3.7 million, a decrease in third-party trucking and transportation expenses of $3.2 million due to lower transfer station and intermodal volumes and a decrease in fees paid for the processing of recyclable materials of $3.1 million primarily as a result of higher commodity values.

Cost of operations as a percentage of revenues decreased 1.3 percentage points to 59.0% for the three months ended March 31, 2024, from 60.3% for the three months ended March 31, 2023.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, a 0.5 percentage point decrease in third-party trucking and transportation expenses, a 0.5 percentage point decrease in fuel costs due to lower diesel and natural gas prices, a 0.3 percentage point decrease in truck, container, equipment and facility maintenance and repair expenses, a 0.3 percentage point decrease in disposal costs, a 0.2 percentage point decrease in subcontract costs and a 0.2 percentage point decrease from all other net changes, partially offset by a 0.7 percentage point increase in risk management expenses.

SG&A expenses increased $27.0 million, or 14.0%, to $220.7 million for the three months ended March 31, 2024, from $193.7 million for the three months ended March 31, 2023.

The increase was comprised of an increase of $21.8 million, assuming foreign currency parity, at our existing operations, $5.1 million from acquisitions closed during, or subsequent to, the three months ended March 31, 2023 and an increase of $0.1 million resulting from a higher average foreign currency exchange rate in effect during the current period.

The increase in SG&A expenses at our existing operations of $21.8 million, assuming foreign currency parity, for the three months ended March 31, 2024 was comprised of an increase in direct acquisition expenses of $7.8 million due to an increase in acquisition activity in the current period, an increase in incentive compensation expense of $7.4 million, an increase in administrative payroll expenses of $2.6 million, a collective increase in travel, meetings and training expenses of $2.1 million, an increase in bad debt costs of $1.2 million associated with increased revenues, an increase in software license fees of $1.0 million and $3.2 million of other net expense increases, partially offset by a decrease in professional fees of $2.0 million and a decrease in equity-based compensation expenses of $1.5 million associated with our annual recurring grants of restricted share units to our personnel.

SG&A expenses as a percentage of revenues increased 0.5 percentage points to 10.7% for the three months ended March 31, 2024, from 10.2% for the three months ended March 31, 2023.

The increase as a percentage of revenues was primarily attributable to a 0.4 percentage point increase in direct acquisition expenses due to an increase in acquisition activity and a 0.3 percentage point increase in incentive compensation costs, partially offset by a 0.2 percentage point decrease in accrued equity compensation expense.

Total cost of operations increased $103.7 million, or 8.7%, to $1.301 billion for the three months ended June 30, 2024, from $1.197 billion for the three months ended June 30, 2023.

The increase was primarily the result of $59.2 million of additional operating costs from acquisitions closed during, or subsequent to, the three months ended June 30, 2023 and an increase in operating costs at our existing operations of $48.4 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $2.4 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $1.5 million from operations divested during, or subsequent to, the three months ended June 30, 2023.

The increase in operating costs of $48.4 million, assuming foreign currency parity, at our existing operations for the three months ended June 30, 2024, consisted of higher labor and recurring incentive compensation expenses of $17.5 million, an increase in disposal costs of $7.7 million, an increase in risk management expenses of $5.1 million due to higher claim and premium costs, an increase in third-party trucking and transportation expenses of $4.7 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $4.6 million, an increase in benefits costs of $3.5 million, an increase in taxes on revenues of $3.3 million as a result of increased revenues, an increase in leachate costs of $2.7 million and a net increase of other expenses of $5.7 million, partially offset by a decrease in subcontract expense of $4.1 million and a decrease in fees paid for the processing of recyclable materials of $2.3 million primarily as a result of higher commodity values.

Total cost of operations increased $178.6 million, or 7.6%, to $2.523 billion for the six months ended June 30, 2024, from $2.344 billion for the six months ended June 30, 2023.

The increase was primarily the result of $98.5 million of additional operating costs from acquisitions closed during, or subsequent to, the six months ended June 30, 2023, and an increase in operating costs at our existing operations of $85.2 million, assuming foreign currency parity, partially offset by a decrease of $2.9 million from operations divested during, or subsequent to, the six months ended June 30, 2023 and a decrease in operating costs of $2.2 million resulting from a lower average foreign currency exchange rate in effect during the current period.

The increase in operating costs of $85.2 million, assuming foreign currency parity, at our existing operations for the six months ended June 30, 2024, consisted of higher labor and recurring incentive compensation expenses of $33.7 million, an increase in risk management expenses of $20.8 million due to higher claim and premium costs, an increase in disposal costs of $10.7 million, an increase in benefits costs of $6.9 million, an increase in truck, container, equipment and facility maintenance and repair expenses of $6.9 million, an increase in leachate costs of $6.0 million, an increase in post-closure liability interest accretion expense of $5.2 million, an increase in taxes on revenues of $5.2 million as the result of increased revenues, an increase in facility and equipment rental costs $1.9 million, an increase in property taxes of $1.8 million and a net increase of other expenses of $6.0 million, partially offset by a decrease in subcontract expense of $7.8 million, a decrease in fuel expense of $6.6 million due to lower diesel and natural gas prices and a decrease in fees paid for the processing of recyclable materials of $5.5 million primarily as a result of higher commodity values.

Cost of operations as a percentage of revenues decreased 1.3 percentage points to 57.9% for the three months ended June 30, 2024, from 59.2% for the three months ended June 30, 2023.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, contributions from an increase in higher landfill gas sales, a 0.3 percentage point decrease in fuel costs due to lower diesel and natural gas prices, a 0.3 percentage point decrease due to the impact of acquisitions having lower operating costs as a percentage of revenue as compared to existing operations, a 0.3 percentage point decrease due to lower labor costs, a 0.2 percentage point decrease due to lower costs associated with the processing of recyclable materials driven by higher recyclable commodity values, a 0.2 percentage point decrease in truck, container, equipment and facility maintenance and repair expenses and a 0.2 percentage point decrease in subcontract costs, partially offset by a 0.2 percentage point increase from all other net changes.

Cost of operations as a percentage of revenues decreased 1.4 percentage points to 58.4% for the six months ended June 30, 2024, from 59.8% for the six months ended June 30, 2023.

The decrease as a percentage of revenues was primarily driven by the impact of price-led revenue growth, contributions from an increase in higher landfill gas sales, 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, a 0.3 percentage point decrease due to lower labor costs, a 0.3 percentage point decrease in truck, container, equipment and facility maintenance and repair expenses, a 0.2 percentage point decrease due to the impact of acquisitions having lower operating costs as a percentage of revenue as compared to existing operations, a 0.2 percentage point decrease in disposal costs and a 0.2 percentage point decrease in subcontract costs, partially offset by a 0.4 percentage point increase in risk management expenses and a 0.1 percentage point increase from all other net changes.

SG&A expenses increased $12.5 million, or 5.8%, to $228.9 million for the three months ended June 30, 2024, from $216.4 million for the three months ended June 30, 2023.

The increase was comprised of an increase of $8.4 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2023 and an increase of $4.5 million, assuming foreign currency parity, at our existing operations, partially offset by a decrease of $0.4 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 $4.5 million, assuming foreign currency parity, for the three months ended June 30, 2024 was comprised of an increase in direct acquisition expenses of $5.4 million due to an increase in acquisition activity in the current period, an increase in professional fees of $4.0 million, a collective increase in travel, meetings and training expenses of $3.3 million, an increase in administrative payroll expenses of $3.2 million, an increase in incentive compensation expense of $1.4 million and $2.3 million of other net expense increases, partially offset by a decrease in executive separation costs of $15.1 million.

SG&A expenses increased $39.5 million, or 9.6%, to $449.6 million for the six months ended June 30, 2024, from $410.1 million for the six months ended June 30, 2023.

The increase was comprised of an increase of $26.4 million, assuming foreign currency parity, at our existing operations and $13.6 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2023, partially offset by a decrease of $0.5 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 $26.4 million, assuming foreign currency parity, for the six months ended June 30, 2024 was comprised of an increase in direct acquisition expenses of $13.2 million due to an increase in acquisition activity in the current period, an increase in incentive compensation expense of $8.2 million, an increase in administrative payroll expenses of $5.9 million, a collective increase in travel, meetings and training expenses of $5.5 million, an increase in professional fees of $2.0 million, an increase in bad debt costs of $1.3 million associated with increased revenues, an increase in software license fees of $1.3 million and $4.1 million of other net expense increases, partially offset by a decrease in executive separation costs of $15.1 million.

SG&A expenses as a percentage of revenues decreased 0.5 percentage points to 10.2% for the three months ended June 30, 2024, from 10.7% for the three months ended June 30, 2023.

The decrease as a percentage of revenues was primarily attributable to a 0.7 percentage point decrease in executive separation costs and a 0.1 percentage point decrease due to the impact of acquisitions having lower SG&A costs as a percentage of revenue as compared to existing operations, partially offset by a 0.2 percentage point increase in direct acquisition expenses due to an increase in acquisition activity and a 0.1 percentage point increase in professional fees.

SG&A expenses as a percentage of revenues decreased 0.1 percentage points to 10.4% for the six months ended June 30, 2024, from 10.5% for the six months ended June 30, 2023.

The decrease as a percentage of revenues was primarily attributable to a 0.4 percentage point decrease in executive separation costs and a 0.1 percentage point decrease due to the impact of acquisitions having lower SG&A costs as a percentage of revenue as compared to existing operations, partially offset by a 0.3 percentage point increase in direct acquisition expenses due to an increase in acquisition activity and a 0.1 percentage point increase in incentive compensation costs.

Depreciation .

Depreciation expense increased $18.7 million, or 9.1%, to $222.7 million for the three months ended March 31, 2024, from $204.0 million for the three months ended March 31, 2023.

The increase was comprised of an

increase in depreciation and depletion expense of $13.4 million from acquisitions closed during, or subsequent to, the three months ended March 31, 2023 and an increase in depreciation expense of $6.1 million from the impact of additions to our fleet and equipment purchased to support our existing operations, partially offset by a decrease of $0.8 million in depletion expense due to lower landfill volumes in certain markets.

Depreciation expense as a percentage of revenues remained flat at 10.7% for the three months ended March 31, 2024 and March 31, 2023.

As compared to prior year, expenses as a percentage of revenues decreased due to the impact of price driven revenue increases in our solid waste services, offset by increases as a percentage of revenue from acquisitions closed during, or subsequent to, the three months ended March 31, 2023 having higher depreciation expense as a percentage of revenue than our company average.

Depreciation expense increased $27.9 million, or 13.1%, to $241.2 million for the three months ended June 30, 2024, from $213.3 million for the three months ended June 30, 2023.

The increase was comprised of an increase in depreciation and depletion expense of $19.7 million from acquisitions closed during, or subsequent to, the three months ended June 30, 2023, an increase in depreciation expense of $8.0 million from the impact of additions to our fleet and equipment purchased to support our existing operations and an increase of $0.7 million in depletion expense, partially offset by a decrease of $0.5 million resulting from a lower average foreign currency exchange rate in effect during the current period.

Depreciation expense increased $46.5 million, or 11.2%, to $463.9 million for the six months ended June 30, 2024, from $417.4 million for the six months ended June 30, 2023.

The increase was comprised of an increase in depreciation and depletion expense of $33.0 million from acquisitions closed during, or subsequent to, the six months ended June 30, 2023 and an increase in depreciation expense of $14.1 million from the impact of additions to our fleet and equipment purchased to support our existing operations, partially offset by a decrease of $0.5 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $0.1 million in depletion expense due to lower landfill volumes in certain markets.

Depreciation expense as a percentage of revenues increased 0.1 percentage points to 10.7% for the three months ended June 30, 2024 from 10.6% for the three months ended June 30, 2023.

Depreciation expense as a percentage of revenues increased 0.1 percentage points to 10.7% for the six months ended June 30, 2024, from 10.6% for the six months ended June 30, 2023.

For both comparative periods, expenses as a percentage of revenues increased due to acquisitions closed during, or subsequent to, the three and six months ended June 30, 2023 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 and decreased depletion expenses as a result of lower landfill volumes.

Amortization of Intangibles .

Amortization of intangibles expense increased $1.0 million, or 2.6%, to $40.3 million for the three months ended March 31, 2024, from $39.3 million for the three months ended March 31, 2023.

The increase was the result of $5.8 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended March 31, 2023, partially offset by a decrease of $4.8 million from certain intangible assets becoming fully amortized subsequent to March 31, 2023.

Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 1.9% for the three months ended March 31, 2024, from 2.1% for the three months ended March 31, 2023.

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

Amortization of intangibles expense increased $5.0 million, or 13.0%, to $44.1 million for the three months ended June 30, 2024, from $39.1 million for the three months ended June 30, 2023.

The increase was the result of $8.8 million from intangible assets acquired in acquisitions closed during, or subsequent to, the three months ended June 30, 2023, partially offset by a decrease of $3.8 million from certain intangible assets becoming fully amortized subsequent to June 30, 2023.

Amortization of intangibles expense increased $6.1 million, or 7.8%, to $84.4 million for the six months ended June 30, 2024, from $78.3 million for the six months ended June 30, 2023.

The increase was the result of $14.6 million from intangible assets acquired in acquisitions closed during, or subsequent to, the six months ended June 30, 2023, partially offset by a decrease of $8.5 million from certain intangible assets becoming fully amortized subsequent to June 30, 2023.

Amortization of intangibles expense as a percentage of revenues increased 0.1 percentage points to 2.0% for the three months ended June 30, 2024, from 1.9% for the three months ended June 30, 2023.

Amortization of intangibles expense as a percentage of revenues remained flat at 2.0% for the six months ended June 30, 2024 and the six months ended June 30, 2023.

The increase as a percentage of revenues for the three months ended June 30, 2024 was attributable to assets acquired in acquisitions closed during, or subsequent to, the three months ended June 30, 2023 having higher amortization expense as a percentage of revenue than our company average.

Impairments and Other Operating Items .

Impairments and other operating items decreased $1.5 million, to net losses totaling $0.4 million for the three months ended March 31, 2024, from net losses totaling $1.9 million for the three months ended March 31, 2023.

The net losses of $0.4 million recorded during the three months ended March 31, 2024 consisted of $1.1 million of net losses on the disposal of property and equipment and $0.6 million of other net adjustments, partially offset by $1.3 million gain from favorable lawsuit settlements.

The net losses of $1.9 million recorded during the three months ended March 31, 2023 resulted from disposal of property and equipment.

Impairments and other operating items decreased $2.7 million, to net losses totaling $8.2 million for the three months ended June 30, 2024, from net losses totaling $10.9 million for the three months ended June 30, 2023.

The net losses of $8.2 million recorded during the three months ended June 30, 2024 consisted of $4.9 million of net losses on the disposal of property and equipment, $3.1 million due to increases associated with uninsured damages to an operating facility and $1.0 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 $0.8 million of other net gains.

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.

Impairments and other operating items decreased $4.2 million, to net losses totaling $8.5 million for the six months ended June 30, 2024, from net losses totaling $12.7 million for the six months ended June 30, 2023.

The net losses of $8.5 million recorded during the six months ended June 30, 2024 consisted of $6.0 million of net losses on the disposal of property and equipment, $3.1 million due to increases associated with uninsured damages to an operating facility and $1.2 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, partially offset by $1.8 million of other net gains.

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.

Operating Income .

Operating income increased $52.1 million, or 16.6%, to $366.8 million for the three months ended March 31, 2024, from $314.7 million for the three months ended March 31, 2023.

The increase in our operating income for the three months ended March 31, 2024 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 March 31, 2023, an increase in earnings at our E&P waste operations, operating income contributions from increased renewable energy credits associated with the generation of landfill gas and contributions from higher recyclable commodity pricing, partially offset by an increase in risk management costs, an increase in direct acquisition expenses associated with increased acquisition activity as compared to the prior year period and increased incentive compensation expense.

Operating income as a percentage of revenues increased 1.1 percentage points to 17.7% for the three months ended March 31, 2024, from 16.6% for the three months ended March 31, 2023.

The increase as a percentage of revenues was comprised of a 1.3 percentage point decrease in our costs of operations, a 0.2 percentage point decrease in amortization expense and a 0.1 percentage point decrease in impairments and other operating items, partially offset by a 0.5 percentage point increase in SG&A expenses.

Operating income increased $80.6 million, or 23.4%, to $424.7 million for the three months ended June 30, 2024, from $344.1 million for the three months ended June 30, 2023.

The increase in our operating income for the three months ended June 30, 2024 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, 2023, an increase in earnings at our E&P waste operations, operating income contributions from increased renewable energy credits associated with the generation of landfill gas, contributions from higher recyclable commodity pricing and decreased executive separation costs, partially offset by an increase in risk management costs and an increase in direct acquisition expenses associated with increased acquisition activity as compared to the prior year period.

Operating income increased $132.7 million, or 20.1%, to $791.5 million for the six months ended June 30, 2024, from $658.8 million for the six months ended June 30, 2023.

The increase in our operating income for the six months ended June 30, 2024 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, 2023, an increase in earnings at our E&P waste operations, operating income contributions from increased renewable energy credits associated with the generation of landfill gas, contributions from higher recyclable commodity pricing and lower executive separation costs, partially offset by an increase in risk management costs, an increase in direct acquisition expenses associated with increased acquisition activity as compared to the prior year period and increased incentive compensation expense.

Operating income as a percentage of revenues increased 1.8 percentage points to 18.8% for the three months ended June 30, 2024, from 17.0% for the three months ended June 30, 2023.

The increase as a percentage of revenues was comprised of a 1.3 percentage point decrease in our costs of operations, a 0.5 percentage point decrease in SG&A expenses and a 0.2 percentage point decrease in impairments and other operating items, partially offset by a 0.1 percentage point increase in depreciation expense and a 0.1 percentage point increase in amortization expense.

Operating income as a percentage of revenues increased 1.5 percentage points to 18.3% for the six months ended June 30, 2024, from 16.8% for the six months ended June 30, 2023.

The increase as a percentage of revenues was comprised of a 1.4 percentage point decrease in our costs of operations, a 0.1 percentage point decrease in SG&A expenses and a 0.1 percentage point decrease in impairments and other operating items, partially offset by a 0.1 percentage point increase in depreciation expense.

Interest Expense .

Interest expense increased $10.1 million, or 14.8%, to $78.5 million for the three months ended March 31, 2024, from $68.4 million for the three months ended March 31, 2023.

The increase was primarily attributable to an increase of $7.6 million due to an increase in the average borrowings outstanding under our Revolving Credit Agreement entered into during the three months ended March 31, 2024, an increase of $4.1 million from the issuance of $750.0 million of senior unsecured notes during the three months ended March 31, 2024, an increase of $2.7 million from

higher interest rates on borrowings outstanding during the comparative periods, and $1.5 million of other net expense increases, partially offset by a $5.8 million decrease attributable to a decrease in the average borrowings outstanding under our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement as a result of the early termination of these agreements during the three months ended March 31, 2024.

Interest expense increased $14.8 million, or 22.0%, to $82.4 million for the three months ended June 30, 2024, from $67.6 million for the three months ended June 30, 2023.

The increase was primarily attributable to an increase of $9.3 million from the issuance of $750.0 million of senior unsecured notes during the three months ended March 31, 2024, an increase of $7.7 million due to an increase in the average borrowings outstanding under our Revolving Credit Agreement entered into during the three months ended March 31, 2024, an increase of $1.0 million from higher interest rates on borrowings outstanding during the comparative periods, an increase of $0.8 million from the issuance of CAD $500.0 million of senior unsecured notes during the three months ended June 30, 2024 and $2.0 million of other net expense increases, partially offset by a $6.0 million decrease attributable to a decrease in the average borrowings outstanding under our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement as a result of the early termination of these agreements during the three months ended March 31, 2024.

Interest expense increased $25.0 million, or 18.4%, to $160.9 million for the six months ended June 30, 2024, from $135.9 million for the six months ended June 30, 2023.

The increase was primarily attributable to an increase of $15.3 million due to an increase in the average borrowings outstanding under our Revolving Credit Agreement entered into during the six months ended June 30, 2024, an increase of $13.4 million from the issuance of $750.0 million of senior unsecured notes during the six months ended June 30, 2024, an increase of $3.7 million from higher interest rates on borrowings outstanding during the comparative periods, an increase of $0.8 million from the issuance of CAD $500.0 million of senior unsecured notes during the six months ended June 30, 2024 and $3.6 million of other net expense increases, partially offset by an $11.8 million decrease attributable to a decrease in the average borrowings outstanding under our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement as a result of the early termination of these agreements during the six months ended June 30, 2024.

Interest Income .

Interest income decreased $0.6 million to $2.1 million for the three months ended March 31, 2024, from $2.7 million for the three months ended March 31, 2023.

The decrease was primarily attributable to lower average investment rates in the current period.

Interest income increased $2.7 million to $4.0 million for the three months ended June 30, 2024, from $1.3 million for the three months ended June 30, 2023.

Interest income increased $2.0 million to $6.1 million for the six months ended June 30, 2024, from $4.1 million for the six months ended June 30, 2023.

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

Other Income (Expense), Net .

Other income (expense), net decreased $5.0 million, to an expense of $1.8 million for the three months ended March 31, 2024, from income of $3.2 million for the three months ended March 31, 2023.

Other expense of $1.8 million recorded during the three months ended March 31, 2024 consisted of $2.3 million from the write off of unamortized loan fees as a result of the early extinguishment of our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement, $0.5 million from an increase in the average foreign currency exchange rate in effect during the comparable reporting period reducing the U.S.

dollar consideration required to settle international liabilities and $0.7 million of net losses from other sources, partially offset by $1.7 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations.

Other income of $3.2 million recorded during the three months ended March 31, 2023 consisted of increases in other income of $1.9 million derived from higher interest rates in the current period on restricted cash and $1.3 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations.

Other income (expense), net increased $9.8 million, to an income total of $9.6 million for the three months ended June 30, 2024, from an expense total of $0.2 million for the three months ended June 30, 2023.

Other income of $9.6 million recorded during the three months ended June 30, 2024 consisted of $12.0 million from a gain on sale of certain investments, partially offset by $0.7 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period reducing the U.S.

dollar consideration required to settle international liabilities and $1.7 million of net losses from other sources.

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.

dollar consideration required to settle international liabilities.

Other income (expense), net increased $4.8 million, to an income total of $7.8 million for the six months ended June 30, 2024, from an income total of $3.0 million for the six months ended June 30, 2023.

Other income of $7.8 million recorded during the six months ended June 30, 2024 consisted of $12.0 million from a gain on sale of certain investments and $1.8 million from an increase in the value of investments purchased to fund our employee deferred compensation obligations, partially offset by $2.3 million from the write off of unamortized loan fees as a result of the early extinguishment of our 2021 Revolving and Term Credit Agreement and 2022 Term Loan Agreement, $1.3 million from a decrease in the average foreign currency exchange rate in effect during the comparable reporting period reducing the U.S.

dollar consideration required to settle international liabilities and $2.4 million of net losses from other sources.

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.

dollar consideration required to settle international liabilities.

Income Tax Provision .

Income taxes increased $5.0 million, to $59.4 million for the three months ended March 31, 2024, from $54.4 million for the three months ended March 31, 2023.

Our effective tax rate for the three months ended March 31, 2024 was 20.6%.

Our effective tax rate for the three months ended March 31, 2023 was 21.6%.

The income tax provision for the three months ended March 31, 2024 included a benefit of $5.2 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

Income taxes increased $12.0 million, to $80.6 million for the three months ended June 30, 2024, from $68.6 million for the three months ended June 30, 2023.

Our effective tax rate for the three months ended June 30, 2024 was 22.6%.

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

Income taxes increased $17.1 million, to $140.0 million for the six months ended June 30, 2024, from $122.9 million for the six months ended June 30, 2023.

Our effective tax rate for the six months ended June 30, 2024 was 21.7%.

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

The income tax provision for the three and six months ended June 30, 2024 included a benefit of $0.2 million and $5.4 million, respectively, from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

federal statutory rate.

The income tax provision for the three months ended March 31, 2023 included a benefit of $2.7 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S.

The income tax provision for the 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.

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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Industrial and construction roll off

1 unchanged sentence

Intermodal and other

For the three months ended March 31, 2024, we managed our operations through the following six geographic solid waste operating segments:

Western, Southern, Central, Eastern, Canada and MidSouth.

For the six months ended June 30, 2024, we managed our operations through the following six geographic solid waste operating segments:

Western, Southern, Eastern, Central, Canada and MidSouth.

Our six geographic solid waste operating segments comprise our reportable segments.

9 unchanged sentences

Depreciation and

March 31, 2024

June 30, 2024

Corporate (a)

1 unchanged sentence

Depreciation and

March 31, 2023

June 30, 2023

Corporate (a)

Six Months Ended

Depreciation and

June 30, 2024

Corporate (a)

Six Months Ended

Depreciation and

June 30, 2023

Corporate (a)

____________________

3 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 month period ended March 31, 2024, compared to the three month period ended March 31, 2023, are discussed below.

Revenue increased $26.4 million to $422.2 million for the three months ended March 31, 2024, from $395.8 million for the three months ended March 31, 2023, due to price increases, contributions from acquisitions and increases in residential collection volumes, partially offset by decreased transfer volumes and lower intermodal revenue.

EBITDA increased $2.4 million to $113.1 million, or a 26.8% EBITDA margin for the three months ended March 31, 2024, from $110.7 million, or a 28.0% EBITDA margin for the three months ended March 31, 2023.

The decrease in our EBITDA margin was due to an increase in risk management expenses due to higher claim and premium costs, an increase in post-closure liability interest accretion expense, higher leachate costs and an increase in allocated corporate overhead, partially offset by a decrease in recycle processing fees, lower fuel costs due to lower diesel and natural gas prices, a decrease in truck, container, equipment and facility maintenance and repair costs and lower other operating costs as compared to the prior year period.

Depreciation, depletion and amortization expense increased $3.6 million, to $51.2 million for the three months ended March 31, 2024, from $47.6 million for the three months ended March 31, 2023, due to assets acquired in acquisitions, additions to our fleet and equipment and increases in depletion expense associated with higher landfill development and closure costs increasing our per ton landfill depletion rates.

Revenue increased $19.0 million to $418.9 million for the three months ended March 31, 2024, from $399.9 million for the three months ended March 31, 2023, 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 an increase in recyclable commodity prices as compared to the prior year period, partially offset by lower residential collection volumes due to the purposeful non-renewal of collection contracts during the current and prior year periods, lower commercial collection volume and a decrease in post-collection volume.

EBITDA increased $6.5 million to $128.4 million, or a 30.7% EBITDA margin for the three months ended March 31, 2024, from $121.9 million, or a 30.5% EBITDA margin for the three months ended March 31, 2023.

The increase in our EBITDA margin was due to price-led increases in solid waste revenue, increased earnings at our E&P waste operations, lower legal costs, decreases in fuel costs and the purposeful non-renewal of certain residential contracts, partially offset by an increase in risk management expenses, increased leachate expense, higher allocated overhead expense, increased benefits costs and an increase in bad debt expense.

Depreciation, depletion and amortization expense decreased $0.3 million, to $44.7 million for the three months ended March 31, 2024, from $45.0 million for the three months ended March 31, 2023, due to a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue increased $20.9 million to $360.9 million for the three months ended March 31, 2024, from $340.0 million for the three months ended March 31, 2023, due to price increases and an increase in recyclable commodity prices as compared to the prior year period, partially offset by lower post collection volumes and a decrease in residential collection.

EBITDA increased $10.1 million to $125.9 million, or a 34.9% EBITDA margin for the three months ended March 31, 2024, from $115.8 million, or a 34.0% EBITDA margin for the three months ended March 31, 2023.

The increase in our EBITDA margin was due to the benefits from price-led increases in revenue and decreases in fuel costs, partially offset by an increase in risk management expenses and an increase in allocated corporate overhead.

Depreciation, depletion and amortization expense decreased $0.6 million, to $40.8 million for the three months ended March 31, 2024, from $41.4 million for the three months ended March 31, 2023, due to a decrease in depletion as a result of lower landfill volumes and a reduction in amortization expense associated with certain intangible assets becoming fully amortized subsequent to March 31, 2023, partially offset by additions to our fleet and equipment as compared to the prior year periods.

Revenue increased $31.0 million to $360.1 million for the three months ended March 31, 2024, from $329.1 million for the three months ended March 31, 2023, due to contributions from acquisitions, price increases and an increase in recyclable commodity prices as compared to the prior year period, partially offset by decreased residential and commercial service revenues and lower roll off volumes.

EBITDA increased $21.7 million to $95.0 million, or a 26.4% EBITDA margin for the three months ended March 31, 2024, from $73.3 million, or a 22.3% EBITDA margin for the three months ended March 31, 2023.

The increase in our EBITDA margin was due primarily to price-led increases in revenue, lower labor and benefits costs, a decrease in trucking and disposal expenses as a result of purposefully lost volumes and increased internalization in certain markets, a decrease in leachate costs, lower professional fees as a result of a decrease in legal costs and a decrease in truck, container, equipment and facility maintenance and repair expenses, partially offset by the impact of acquisitions having lower EBITDA margins than our segment average and an increase in risk management expenses.

Depreciation, depletion and amortization expense increased $5.5 million, to $53.5 million for the three months ended March 31, 2024, from $48.0 million for the three months ended March 31, 2023, 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 $53.2 million to $280.4 million for the three months ended March 31, 2024, from $227.2 million for the three months ended March 31, 2023, due to contributions from acquisitions, price increases, an increase in landfill gas revenues and higher prices for recyclable commodities as compared to the prior year period, partially offset by a decrease in residential and commercial collection volumes.

EBITDA increased $38.4 million to $121.4 million, or a 43.3% EBITDA margin for the three months ended March 31, 2024, from $83.0 million, or a 36.5% EBITDA margin for the three months ended March 31, 2023.

The increase in our EBITDA margin was due to the impact of acquisitions having higher EBITDA margins than our segment average, price-led increases in revenue, an increase in earnings associated with landfill gas revenues from higher values for renewable energy credits and higher landfill gas volumes and decreases in diesel and natural gas costs due to a decline in average fuel prices, partially offset by an increase in allocated corporate overhead expense as compared to the prior year period.

Depreciation, depletion and amortization expense increased $9.1 million, to $39.1 million for the three months ended March 31, 2024, from $30.0 million for the three months ended March 31, 2023, due to assets acquired in acquisitions.

Revenue increased $21.6 million to $230.1 million for the three months ended March 31, 2024, from $208.5 million for the three months ended March 31, 2023, due to price increases and contributions from acquisitions, partially offset by a decrease in roll off volumes.

EBITDA decreased $0.2 million to $57.5 million, or a 25.0% EBITDA margin for the three months ended March 31, 2024, from $57.7 million, or a 27.7% EBITDA margin for the three months ended March 31, 2023.

The decrease in our EBITDA margin was due primarily to an increase in risk management expenses, an increase in allocated corporate overhead and benefits expense, higher labor costs and an increase in bad debt expense, partially offset by price-led revenue growth, lower disposal and trucking costs due to increased internalization in certain markets, lower leachate costs, a decrease in professional fees and lower fuel costs.

Depreciation, depletion and amortization expense increased $2.4 million, to $29.9 million for the three months ended March 31, 2024, from $27.5 million for the three months ended March 31, 2023, due to assets acquired in acquisitions and additions to our fleet and equipment.

EBITDA decreased $8.6 million, to a loss of $11.1 million for the three months ended March 31, 2024, from a loss of $2.5 million for the three months ended March 31, 2023.

The decrease in our EBITDA for the three months ended March 31, 2024 was due to an increase in direct acquisition expenses associated with an increase in acquisition activity in the current year period, increased incentive compensation costs, increased professional fees, increased administrative payroll costs and increased software costs, partially offset by lower costs due to lower travel and meetings and increased allocation of costs to our operating segments.

Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the three and six month periods ended June 30, 2024, compared to the three and six month periods ended June 30, 2023, are discussed below.

Revenue increased $35.0 million to $454.0 million for the three months ended June 30, 2024, from $419.0 million for the three months ended June 30, 2023.

Revenue increased $61.4 million to $876.2 million for the six months ended June 30, 2024, from $814.8 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to price increases, contributions from acquisitions, increases in residential and commercial collection volumes and higher landfill volumes, partially offset by decreased transfer and intermodal revenue.

EBITDA increased $14.8 million to $134.4 million, or a 29.6% EBITDA margin for the three months ended June 30, 2024, from $119.6 million, or a 28.5% EBITDA margin for the three months ended June 30, 2023.

The increase in our EBITDA margin for the three months ended June 30, 2024 was due to a decrease in recycle processing fees, lower fuel costs due to lower diesel and natural gas prices, a decrease in landfill maintenance costs, lower bad debt expense, a decrease in labor costs and lower leachate expenses, partially offset by an increase in post-closure liability interest accretion expense and an increase in trucking costs.

EBITDA increased $17.3 million to $247.5 million, or a 28.2% EBITDA margin for the six months ended June 30, 2024, from $230.2 million, or a 28.3% EBITDA margin for the six months ended June 30, 2023.

The decrease in our EBITDA margin for the six months ended June 30, 2024 was due to an increase in post-closure liability interest accretion expense, an increase in risk management expenses, the impact of acquisitions having lower EBITDA margins than our segment average and an increase in allocated corporate overhead, partially offset by a decrease in recycle processing fees, lower fuel costs due to lower diesel and natural gas prices and a decrease in landfill maintenance costs.

Depreciation, depletion and amortization expense increased $2.8 million, to $53.3 million for the three months ended June 30, 2024, from $50.5 million for the three months ended June 30, 2023.

Depreciation, depletion and amortization expense increased $6.4 million, to $104.5 million for the six months ended June 30, 2024, from $98.1 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to additions to our fleet and equipment and assets acquired in acquisitions.

Revenue increased $25.2 million to $439.3 million for the three months ended June 30, 2024, from $414.1 million for the three months ended June 30, 2023.

Revenue increased $44.2 million to $858.2 million for the six months ended June 30, 2024, from $814.0 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were 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 an increase in recyclable commodity prices as compared to the prior year periods, partially offset by lower residential collection volumes due to the purposeful non-renewal of collection contracts, lower commercial collection volume and a decrease in post-collection volume.

EBITDA increased $8.8 million to $138.5 million, or a 31.5% EBITDA margin for the three months ended June 30, 2024, from $129.7 million, or a 31.3% EBITDA margin for the three months ended June 30, 2023.

EBITDA increased $15.3 million to $266.9 million, or a 31.1% EBITDA margin for the six months ended June 30, 2024, from $251.6 million, or a 30.9% EBITDA margin for the six months ended June 30, 2023.

The increases in our EBITDA margin for the three and six months ended June 30, 2024 were due to price-led increases in solid waste revenue, increased earnings at our E&P waste operations, the purposeful non-renewal of certain residential contracts, decreases in fuel costs and lower disposal costs, partially offset by an increase in risk management expenses, increased leachate expense, higher trucking costs and an increase in benefits expense.

Depreciation, depletion and amortization expense increased $2.9 million, to $48.8 million for the three months ended June 30, 2024, from $45.9 million for the three months ended June 30, 2023.

Depreciation, depletion and amortization expense increased $2.7 million, to $93.6 million for the six months ended June 30, 2024, from $90.9 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to a reduction in amortization expense associated with the loss of certain residential service contracts.

Revenue increased $42.7 million to $386.1 million for the three months ended June 30, 2024, from $343.4 million for the three months ended June 30, 2023.

Revenue increased $73.6 million to $746.2 million for the six months ended June 30, 2024, from $672.6 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to contributions from acquisitions, price increases, an increase in recyclable commodity prices as compared to the prior year period and higher landfill volumes, partially offset by decreased residential and commercial service revenues and lower roll off volumes.

EBITDA increased $16.6 million to $103.1 million, or a 26.7% EBITDA margin for the three months ended June 30, 2024, from $86.5 million, or a 25.2% EBITDA margin for the three months ended June 30, 2023.

EBITDA increased $38.3 million to $198.1 million, or a 26.5% EBITDA margin for the six months ended June 30, 2024, from $159.8 million, or a 23.8% EBITDA margin for the six months ended June 30, 2023.

The increases in our EBITDA margin for the three and six months ended June 30, 2024 were due primarily to price-led increases in revenue, a decrease in trucking and disposal expenses as a result of purposefully lost volumes and increased internalization in certain markets, lower labor and benefits costs, a decrease in landfill maintenance costs and lower professional fees, partially offset by the impact of acquisitions having lower EBITDA margins than our segment average, an increase in risk management expenses and an increase in allocated corporate overhead.

Depreciation, depletion and amortization expense increased $4.7 million, to $57.0 million for the three months ended June 30, 2024, from $52.3 million for the three months ended June 30, 2023.

Depreciation, depletion and amortization expense increased $10.2 million, to $110.5 million for the six months ended June 30, 2024, from $100.3 million for the three months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 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 $16.8 million to $386.0 million for the three months ended June 30, 2024, from $369.2 million for the three months ended June 30, 2023.

Revenue increased $37.8 million to $747.0 million for the six months ended June 30, 2024, from $709.2 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to price increases and an increase in recyclable commodity prices as compared to the prior year period, partially offset by lower post collection volumes and a decrease in residential collection.

EBITDA increased $7.8 million to $138.8 million, or a 36.0% EBITDA margin for the three months ended June 30, 2024, from $131.0 million, or a 35.5% EBITDA margin for the three months ended June 30, 2023.

EBITDA increased $18.0 million to $264.7 million, or a 35.4% EBITDA margin for the six months ended June 30, 2024, from $246.7 million, or a 34.8% EBITDA margin for the six months ended June 30, 2023.

The increases in our EBITDA margin for the three and six months ended June 30, 2024 were due to the benefits from price-led increases in revenue, decreases in fuel costs, a decrease in truck, container, equipment and facility maintenance and repair expenses and lower recycle processing costs due to an increase in recyclable commodity pricing, partially offset by an increase in risk management expenses, higher trucking costs, an increase in allocated corporate overhead and higher professional fees.

Depreciation, depletion and amortization expense increased $0.2 million, to $43.0 million for the three months ended June 30, 2024, from $42.8 million for the three months ended June 30, 2023.

The increase for the three months ended June 30, 2024 was due to additions to our fleet and equipment as compared to the prior year periods, partially offset by a decrease in depletion as a result of lower landfill volumes and a reduction in amortization expense associated with certain intangible assets becoming fully amortized subsequent to June 30, 2023.

Depreciation, depletion and amortization expense decreased $0.4 million, to $83.8 million for the six months ended June 30, 2024, from $84.2 million for the six months ended June 30, 2023.

The decrease for the six months ended June 30, 2024 was due to a decrease in depletion as a result of lower landfill volumes and a reduction in amortization expense associated with certain intangible assets becoming fully amortized subsequent to June 30, 2023, partially offset by additions to our fleet and equipment as compared to the prior year period.

Revenue increased $70.5 million to $319.2 million for the three months ended June 30, 2024, from $248.7 million for the three months ended June 30, 2023.

Revenue increased $123.7 million to $599.6 million for the six months ended June 30, 2024, from $475.9 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to contributions from acquisitions, price increases, an increase in landfill gas revenues and higher prices for recyclable commodities as compared to the prior year periods, partially offset by a decrease in commercial and residential collection volumes.

EBITDA increased $40.9 million to $136.1 million, or a 42.7% EBITDA margin for the three months ended June 30, 2024, from $95.2 million, or a 38.3% EBITDA margin for the three months ended June 30, 2023.

EBITDA increased $79.3 million to $257.5 million, or a 42.9% EBITDA margin for the six months ended June 30, 2024, from $178.2 million, or a 37.4% EBITDA margin for the six months ended June 30, 2023.

The increases in our EBITDA margin for the three and six months ended June 30, 2024 were due to the impact of acquisitions having higher EBITDA margins than our segment average, price-led increases in revenue, an increase in earnings associated with landfill gas revenues from higher values for renewable energy credits and higher landfill gas volumes, decreases in diesel and natural gas costs due to a decline in average fuel prices and lower trucking costs, partially offset by an increase in allocated corporate overhead expense as compared to the prior year periods, increased landfill maintenance costs and higher risk management expenses.

Depreciation, depletion and amortization expense increased $16.3 million, to $47.1 million for the three months ended June 30, 2024 from $30.8 million for the three months ended June 30, 2023.

Depreciation, depletion and amortization expense increased $25.4 million, to $86.2 million for the six months ended June 30, 2024, from $60.8 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were from assets acquired in acquisitions.

Revenue increased $36.9 million to $263.6 million for the three months ended June 30, 2024, from $226.7 million for the three months ended June 30, 2023.

Revenue increased $58.5 million to $493.7 million for the six months ended June 30, 2024, from $435.2 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to contributions from acquisitions and price increases, partially offset by a decrease in roll off and landfill volumes.

EBITDA increased $12.3 million to $74.7 million, or a 28.4% EBITDA margin for the three months ended June 30, 2024, from $62.4 million, or a 27.5% EBITDA margin for the three months ended June 30, 2023.

The increase in our EBITDA margin for the three months ended June 30, 2024 was due primarily to the impact of acquisitions having higher EBITDA margins than our segment average, price-led revenue growth, a decrease in truck, container, equipment and facility maintenance and repair expenses, an increase in recyclable commodity values and lower recycle processing costs, lower fuel costs, lower disposal and trucking costs due to increased internalization in certain markets and a decrease in leachate costs, partially offset by an increase in allocated corporate overhead and benefits expense and higher labor costs.

EBITDA increased $12.1 million to $132.2 million, or a 26.8% EBITDA margin for the six months ended June 30, 2024, from $120.1 million, or a 27.6% EBITDA margin for the six months ended June 30, 2023.

The decrease in our EBITDA margin for the six months ended June 30, 2024 was due primarily to an increase in allocated corporate overhead and benefits expense, higher labor costs and an increase in risk management expenses, partially offset by price-led revenue growth, the impact of acquisitions having higher EBITDA margins than our segment average, lower disposal and trucking costs due to increased internalization in certain markets, lower leachate costs, an increase in recyclable commodity values and lower recycle processing costs, lower fuel costs and a decrease in truck, container, equipment and facility maintenance and repair expenses.

Depreciation, depletion and amortization expense increased $5.9 million, to $35.8 million for the three months ended June 30, 2024, from $29.9 million for the three months ended June 30, 2023.

Depreciation, depletion and amortization expense increased $8.3 million, to $65.7 million for the six months ended June 30, 2024, from $57.4 million for the six months ended June 30, 2023.

The increases for the three and six months ended June 30, 2024 were due to assets acquired in acquisitions and additions to our fleet and equipment.

EBITDA increased $9.5 million, to a loss of $7.5 million for the three months ended June 30, 2024, from a loss of $17.0 million for the three months ended June 30, 2023.

EBITDA increased $0.8 million, to a loss of $18.6 million for the six months ended June 30, 2024, from a loss of $19.4 million for the six months ended June 30, 2023.

The increases in our EBITDA for the three and six months ended June 30, 2024 were due to a decrease in executive separation costs incurred in the prior year periods, decreased deferred compensation expenses and increased allocation of costs to our operating segments, partially offset by an increase in direct acquisition expenses associated with an increase in acquisition activity in the current year periods, increased incentive compensation costs, increased professional fees and increased administrative payroll costs.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth cash flow information for the three months ended March 31, 2024 and 2023 (in thousands of U.S.

Three Months Ended

The following table sets forth cash flow information for the six months ended June 30, 2024 and 2023 (in thousands of U.S.

Six Months Ended

Net cash provided by operating activities

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Operating Activities Cash Flows

Net cash provided by operating activities increased $48.0 million to $490.3 million for the three months ended March 31, 2024, from net cash provided by operating activities of $442.3 million for the three months ended March 31, 2023.

Net cash provided by operating activities increased $85.0 million to $1.102 billion for the six months ended June 30, 2024, from net cash provided by operating activities of $1.017 billion for the six months ended June 30, 2023.

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 $54.8 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to closure and post-closure liabilities, adjustments to and payments of contingent consideration recorded in earnings and loss on disposal of assets and impairments, due primarily to price increases, earnings from acquisitions closed during, or subsequent to, the three months ended March 31, 2023, an increase in renewable energy credits associated with the generation of landfill gas and an increase in earnings at our E&P waste operations.

2) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was favorably impacted by $33.3 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in a decrease to operating cash flows of $59.6 million for the three months ended March 31, 2024, compared to a decrease to operating cash flows of $92.9 million for the three months ended March 31, 2023.

The decrease for the three months ended March 31, 2024 was due primarily to outstanding obligations to vendors and accrued annual management bonus compensation as of December 31, 2023 that were paid in the current year period, partially offset by an increase in accrued insurance costs and an increase in accrued interest due to the timing of interest payments.

The decrease for the three months ended March 31, 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 year period.

3) Closure and post closure expenditures – Our increase in net cash provided by operating activities was unfavorably impacted by $23.6 million from an increase in payments for closure and post closure activities as changes in expenditures for these items resulted in a decrease to operating cash flows of $28.9 million for the three months ended March 31, 2024, compared to a decrease in operating cash flows of $5.3 million for the three months ended March 31, 2023.

4) Accounts receivable — Our increase in net cash provided by operating activities was unfavorably impacted by $15.6 million from accounts receivable as changes in accounts receivable resulted in an increase to operating cash flows of $5.4 million for the three months ended March 31, 2024, compared to an increase to operating cash flows of $21.0 million for the three months ended March 31, 2023.

The increases for the three months ended March 31, 2023 and 2024 were due to an additional collection day in the periods, partially offset by increases in revenue, which remained as outstanding receivables at the end of the periods.

5) Prepaid expenses — Our increase in net cash provided by operating activities was unfavorably impacted by $8.2 million from prepaid expenses as changes in prepaid expenses resulted in an increase to operating cash flows of $10.4 million for the three months ended March 31, 2024, compared to an increase to operating cash flows of $18.6 million for the three months ended March 31, 2023.

The increase for the three months ended March 31, 2024 was due primarily to a decrease in prepaids related to the timing of insurance claim payments.

The increase for the three months ended March 31, 2023 was due primarily to decreased prepaid income tax payments and lower payments of annual insurance premiums.

6) Deferred revenue — Our increase in net cash provided by operating activities was unfavorably impacted by $6.8 million from deferred revenue as changes in deferred revenue resulted in an increase to operating cash flows of $4.1 million for the three months ended March 31, 2024, compared to an increase to operating cash flows of $10.8 million for the three months ended March 31, 2023.

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

At March 31, 2024, we had a working capital deficit of $414.5 million, including cash and equivalents of $112.0 million.

Our working capital deficit decreased $131.6 million from a working capital deficit of $546.1 million at December 31, 2023 including cash and equivalents of $78.4 million, due primarily to decreases in accounts payable and accrued liabilities driven by the timing of payments for obligations to vendors and the timing of payment of annual management bonus compensation, an increase in accounts receivables as a result of increases in revenue and an increase in cash balances.

1) Increase in earnings — Our increase in net cash provided by operating activities was favorably impacted by $135.7 million from an increase in net income, excluding depreciation, amortization of intangibles, share-based compensation, adjustments to closure and post-closure liabilities 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, 2023, contributions from higher recyclable commodity pricing, an increase in renewable energy credits associated with the generation of landfill gas and an increase in earnings at our E&P waste operations.

2) Accounts payable and accrued liabilities — Our increase in net cash provided by operating activities was favorably impacted by $58.2 million from accounts payable and accrued liabilities as changes in accounts payable and accrued liabilities resulted in an increase to operating cash flows of $39.7 million for the six months ended June 30, 2024, compared to a decrease to operating cash flows of $18.5 million for the six months ended June 30, 2023.

The increase for the six months ended June 30, 2024 was due primarily to an increase in accrued insurance costs and an increase in accrued interest due to the timing of interest payments, partially offset by outstanding obligations to vendors and accrued annual management bonus compensation as of December 31, 2023 that were paid in the current year period.

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 six months ended June 30, 2023, partially offset by an increase in accrued interest due primarily to higher interest rates and higher accrued insurance costs outstanding at period end.

3) Deferred income taxes — Our increase in net cash provided by operating activities was favorably impacted by $16.2 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $47.6 million for the six months ended June 30, 2024, compared to an increase to operating cash flows of $31.4 million for the six months ended June 30, 2023.

The increase for the six months ended June 30, 2024 was attributable to capital expenditures providing tax benefits resulting from accelerated depreciation and tax benefits resulting from payments for closure and post-closure activities in the period.

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

4) Closure and post-closure expenditures – Our increase in net cash provided by operating activities was unfavorably impacted by $76.2 million from an increase in payments for closure and post-closure activities as changes in expenditures for these items resulted in a decrease to operating cash flows of $84.5 million for the six months ended June 30, 2024, compared to a decrease in operating cash flows of $8.3 million for the six months ended June 30, 2023.

5) Accounts receivable — Our increase in net cash provided by operating activities was unfavorably impacted by $37.6 million from accounts receivable as changes in accounts receivable resulted in a decrease to operating cash flows of $54.0 million for the six months ended June 30, 2024, compared to a decrease to operating cash flows of $16.4 million for the six months ended June 30, 2023.

The decrease for the six months ended June 30, 2024 was due to increases in revenue, which remained as outstanding receivables at June 30,2024.

The decrease in 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 an additional collection day in the period.

6) Prepaid expenses — Our increase in net cash provided by operating activities was unfavorably impacted by $21.8 million from prepaid expenses as changes in prepaid expenses resulted in an increase to operating cash flows of $24.6 million for the six months ended June 30, 2024, compared to an increase to operating cash flows of $46.4 million for the six months ended June 30, 2023.

The increase for the six months ended June 30, 2024 was due primarily to a decrease in prepaids related to the timing of insurance payments and a decrease in prepaid income tax payments.

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

At June 30, 2024, we had a working capital deficit of $534.8 million, including cash and equivalents of $78.7 million.

Our working capital deficit decreased $11.3 million from a working capital deficit of $546.1 million at December 31, 2023 including cash and equivalents of $78.4 million, due primarily to an increase in accounts receivables as a result of increases in revenue, partially offset by increases in accounts payable and accrued liabilities driven by an increase in accrued insurance costs and an increase in accrued interest due to the timing of interest payments and an increase in deferred revenue.

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

however, we can provide no assurances that access to our cash and equivalents will not be impacted by adverse conditions in the financial

however, we can provide no assurances that access to our cash and equivalents will not be impacted by adverse conditions in the financial markets.

Our strategy in managing our working capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital expenditure requirements, along with share repurchase and dividend programs, to reduce the unhedged portion of our indebtedness under our Revolving Credit Agreement and to minimize our cash balances.

Investing Activities Cash Flows

Net cash used in investing activities increased $1.017 billion to $1.335 billion for the three months ended March 31, 2024, from $317.8 million for the three months ended March 31, 2023.

Net cash used in investing activities increased $1.189 billion to $1.794 billion for the six months ended June 30, 2024, from $604.6 million for the six months ended June 30, 2023.

The significant components of the increase included the following:

1) An increase in cash paid for acquisitions of $1.223 billion;

2) A decrease in capital expenditures at operations owned in the comparable periods of $5.8 million due to decreases in landfill site costs, partially offset by increases in land and facility expenditures.

2) An increase of $37.0 million from proceeds from the sale of investment in noncontrolling interests in the period.

Financing Activities Cash Flows

Net cash provided by financing activities increased $943.9 million to $878.5 million for the three months ended March 31, 2024, from net cash used in financing activities of $65.4 million for the three months ended March 31, 2023.

Net cash provided by financing activities increased $1.091 billion to $701.9 million for the six months ended June 30, 2024, from net cash used in financing activities of $389.3 million for the six months ended June 30, 2023.

The significant components of the increase included the following:

1) An increase from the net change in long-term borrowings of $985.5 million in which long-term borrowings increased $1.003 billion during the three months ended March 31, 2024 and increased $17.3 million during the three months ended March 31, 2023;

2) A decrease from higher payments related to the issuance of debt of $10.1 million that occurred during the three months ended March 31, 2024;

3) A decrease from higher payments of contingent consideration of $10.0 million not included in earnings that occurred during the three months ended March 31, 2024;

4) A decrease from tax withholdings related to net share settlements of equity-based compensation of $7.9 million due to an increase in the value of equity-based compensation awards vesting;

5) A decrease from higher cash dividends paid of $7.8 million due primarily to an increase in our quarterly dividend rate for the three months ended March 31, 2024 to $0.285 per share, from $0.255 per share for the three months ended March 31, 2023.

1) An increase from the net change in long-term borrowings of $1.135 billion in which long-term borrowings increased $907.2 million during the six months ended June 30, 2024 and decreased $228.3 million during the six months ended June 30, 2023;

2) A decrease from higher cash dividends paid of $16.1 million due primarily to an increase in our quarterly dividend rate for the six months ended June 30, 2024 to $0.285 per share, from $0.255 per share for the six months ended June 30, 2023;

3) A decrease from higher payments related to the issuance of debt of $12.6 million that occurred during the six months ended June 30, 2024;

4) A decrease from higher payments of contingent consideration of $10.3 million not included in earnings that occurred during the six months ended June 30, 2024.

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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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 $73.6 million and $65.8 million were paid during the three months ended March 31, 2024 and 2023, respectively.

Cash dividends of $147.3 million and $131.1 million were paid during the six months ended June 30, 2024 and 2023, 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 $170.0 million in capital expenditures for property and equipment during the three months ended March 31, 2024, and we expect to make total capital expenditures for property and equipment of approximately $1.150 billion in 2024, including approximately $150 million associated with renewable natural gas facilities.

We made $387.2 million in capital expenditures for property and equipment during the six months ended June 30, 2024, and we expect to make total capital expenditures for property and equipment of approximately $1.150 billion in 2024, including approximately $150 million associated with renewable natural gas facilities.

We have funded and intend to fund the balance of our planned 2024 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Revolving Credit Agreement.

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See Note 10 to our Condensed Consolidated Financial Statements for further details on the new Revolving Credit Agreement.

At March 31, 2024, $2.238 billion under the revolving credit facility was outstanding under the Revolving Credit Agreement, exclusive of outstanding standby letters of credit of $38.8 million.

We also had $103.0 million of letters of

credit issued and outstanding at March 31, 2024 under a facility other than the Revolving Credit Agreement.

On June 13, 2024, we completed an underwritten public offering of CAD $500.0 million aggregate principal amount of our 4.50% Senior Notes due 2029 (the “New 2029 Senior Notes”).

The New 2029 Senior Notes were issued under the Indenture, dated as of November 16, 2018, by and between the Company and U.S.

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

Bank National Association, as trustee, as supplemented by the Ninth Supplemental Indenture, dated as of June 13, 2024.

See Note 10 to our Condensed Consolidated Financial Statements for further details on the New 2029 Senior Notes.

At June 30, 2024, $1.774 billion under the revolving credit facility was outstanding under the Revolving Credit Agreement, exclusive of outstanding standby letters of credit of $38.9 million.

We also had $112.7 million of letters of credit issued and outstanding at June 30, 2024 under a facility other than the Revolving Credit Agreement.

Our Revolving Credit Agreement matures on February 27, 2029.

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

At March 31, 2024, we had the following contractual obligations:

At June 30, 2024, we had the following contractual obligations:

Payments Due by Period

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dollar base rate loans, Canadian dollar term CORRA rate loans, and Canadian dollar prime rate loans.

At March 31, 2024, $1.195 billion 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 of 6.43% on such date).

At March 31, 2024, $1.043 billion of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based CORRA rate loans, which bear interest at the term CORRA rate plus the applicable margin (for a total rate ranging from 6.30% to 6.31% on such date).

At June 30, 2024, $990.0 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 6.43% to 6.44% on such date).

At June 30, 2024, $763.8 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based CORRA rate loans, which bear interest at the term CORRA rate plus the applicable margin (for a total rate of 6.18% on such date).

At June 30, 2024, $20.1 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 prime rate margin (for a total rate of 6.95% on such date).

2) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes.

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The 2029 Senior Notes bear interest at a rate of 3.50%.

4) $365.3 million in principal payments due 2029 related to our New 2029 Senior Notes.

The New 2029 Senior Notes bear interest at a rate of 4.50%.

5) $600.0 million in principal payments due 2030 related to our 2030 Senior Notes.

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12) $29.6 million in principal payments related to our notes payable to sellers and other third parties.

Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at March 31, 2024, and have maturity dates ranging from 2028 to 2036.

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

13) $11.0 million in principal payments related to our financing leases.

Our financing leases bear interest at rates between 1.89% and 5.07% at March 31, 2024, and have expiration dates ranging from 2026 to 2029.

Our financing leases bear interest at rates between 1.89% and 5.07% at June 30, 2024, 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 Revolving Credit Agreement using the term SOFR rate plus the applicable term SOFR margin, the base rate plus the applicable base rate margin, the term CORRA rate plus the applicable margin and the Canadian prime rate plus the applicable prime rate margin at March 31, 2024.

We assumed the Revolving Credit Agreement is paid off when it matures on February 27, 2029.

2) 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 $117.7 million recorded as liabilities in our Condensed Consolidated Financial Statements at March 31, 2024, and $16.0 million of future interest accretion on the recorded obligations.

Contingent consideration payments include $118.1 million recorded as liabilities in our Condensed Consolidated Financial Statements at June 30, 2024, and $15.7 million of future interest accretion on the recorded obligations.

We are party to operating lease agreements and finance leases.

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

At March 31, 2024, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 47.2 million gallons remaining to be purchased for a total of $143.2 million.

At June 30, 2024, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 42.7 million gallons remaining to be purchased for a total of $127.6 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 three months ended March 31, 2024, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2024, 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 $1.688 billion and $1.645 billion at March 31, 2024 and December 31, 2023, respectively.

We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $1.728 billion and $1.645 billion at June 30, 2024 and December 31, 2023, respectively.

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

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

The disposal tonnage that we received in the three month periods ended March 31, 2024 and 2023, at all of our landfills during the respective period, is shown below (tons in thousands):

Three Months Ended March 31,

The disposal tonnage that we received in the six month periods ended June 30, 2024 and 2023, at all of our landfills during the respective period, is shown below (tons in thousands):

Six Months Ended June 30,

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

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We present adjusted free cash flow, a non-GAAP financial measure, supplementally because it is widely used by investors as a liquidity measure in the solid waste industry.

We calculate adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment and periodic distributions to noncontrolling interests.

We further adjust this calculation to exclude the effects of items management believes impact the ability to evaluate the liquidity of our business operations.

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Other companies may calculate adjusted free cash flow differently.

Our adjusted free cash flow for the three month periods ended March 31, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Our adjusted free cash flow for the six month periods ended June 30, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

Six Months Ended

Net cash provided by operating activities

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Transaction-related expenses (a)

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

Tax effect (c)

Executive separation costs (b)

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

Tax effect (d)

Adjusted free cash flow

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(a) Reflects the addback of acquisition-related transaction costs.

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

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

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

(d) The aggregate tax effect of footnotes (a) through (c) 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 month periods ended March 31, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

Our adjusted EBITDA for the three and six month periods ended June 30, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

Three Months Ended

Six Months Ended

Net income attributable to Waste Connections

Net income (loss) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Income tax provision

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Fair value changes to equity awards (b)

Executive separation costs (c)

Adjusted EBITDA

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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 month periods ended March 31, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the three and six month periods ended June 30, 2024 and 2023, are calculated as follows (amounts in thousands of U.S.

dollars, except per share amounts):

Three Months Ended

Six Months Ended

Reported net income attributable to Waste Connections

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Fair value changes to equity awards (d)

Tax effect (e)

Executive separation costs (e)

Tax effect (f)

Adjusted net income attributable to Waste Connections

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(a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets .

(b) Reflects adjustments for impairments and other operating items.

(b) Reflects the addback of impairments and other operating items.

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

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

(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.

In the current environment, we have seen inflationary pressures resulting from higher fuel, materials and labor costs in certain markets and higher resulting third-party costs in areas such as brokerage, repairs and construction.

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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