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What changed in Waste Connections, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Waste Connections, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+541 added−534 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-16)

Top changes in Waste Connections, Inc.'s 2023 10-K

541 paragraphs added · 534 removed · 430 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

165 edited+64 added−55 removed243 unchanged
Biggest changeThe estimated remaining operating lives include assumptions that the operating permits are renewed. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 0 to 5 6 to 10 11 to 20 21 to 40 41 to 50 51+ Total Owned and operated landfills 5 ​ 5 ​ 18 ​ 37 ​ 6 ​ 17 88 Operated landfills under life-of-site agreements — ​ — ​ — ​ 2 ​ — ​ 3 5 ​ 5 5 18 39 6 20 93 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 0 to 5 6 to 10 11 to 20 21 to 40 41 to 50 51+ Total Owned and operated landfills 3 ​ 6 ​ 15 ​ 35 ​ 9 ​ 19 87 Operated landfills under life-of-site agreements — ​ — ​ — ​ 2 ​ — ​ 3 5 ​ 3 6 15 37 9 22 92 ​ The disposal tonnage that we received in 2022 and 2021 at all of our landfills is shown in the tables below (tons in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ Twelve Months ​ ​ 2022 ​ 2022 ​ 2022 ​ 2022 ​ Ended ​ Number Total Number Total Number Total Number Total December 31, ​ ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ 2022 Owned operational landfills and landfills operated under life-of-site agreements 89 ​ 10,987 ​ 89 ​ 12,416 ​ 91 ​ 11,888 ​ 93 ​ 11,938 47,229 Operated landfills 5 ​ 150 ​ 5 ​ 146 ​ 5 ​ 153 ​ 7 ​ 171 620 ​ 94 11,137 94 12,562 96 12,041 100 12,109 47,849 ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ Twelve Months ​ ​ 2021 ​ 2021 ​ 2021 ​ 2021 ​ Ended ​ Number Total Number Total Number Total Number Total December 31, ​ ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ 2021 Owned operational landfills and landfills operated under life-of-site agreements 87 ​ 10,189 ​ 87 ​ 12,433 ​ 89 ​ 12,545 ​ 92 ​ 11,465 46,632 Operated landfills 4 ​ 127 ​ 4 ​ 147 ​ 5 ​ 147 ​ 5 ​ 159 580 ​ 91 10,316 91 12,580 94 12,692 97 11,624 47,212 ​ The expiration dates for the seven operated landfills range from 2023 to 2042.
Biggest changeThe estimated remaining operating lives include assumptions that the operating permits are renewed. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 0 to 5 6 to 10 11 to 20 21 to 40 41 to 50 51+ Total Owned and operated landfills 7 ​ 3 ​ 21 ​ 34 ​ 9 ​ 17 91 Operated landfills under life-of-site agreements — ​ — ​ — ​ 2 ​ — ​ 3 5 ​ 7 3 21 36 9 20 96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 0 to 5 6 to 10 11 to 20 21 to 40 41 to 50 51+ Total Owned and operated landfills 5 ​ 5 ​ 18 ​ 37 ​ 6 ​ 17 88 Operated landfills under life-of-site agreements — ​ — ​ — ​ 2 ​ — ​ 3 5 ​ 5 5 18 39 6 20 93 ​ 8 Table of Contents The disposal tonnage that we received in 2023 and 2022 at all of our landfills is shown in the tables below (tons in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ Twelve Months ​ ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ Ended ​ Number Total Number Total Number Total Number Total December 31, ​ ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ 2023 Owned operational landfills and landfills operated under life-of-site agreements 94 ​ 11,681 ​ 95 ​ 12,873 ​ 96 ​ 13,077 ​ 96 ​ 12,082 49,713 Operated landfills 7 ​ 160 ​ 7 ​ 173 ​ 7 ​ 179 ​ 7 ​ 182 694 ​ 101 11,841 102 13,046 103 13,256 103 12,264 50,407 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ Twelve Months ​ ​ 2022 ​ 2022 ​ 2022 ​ 2022 ​ Ended ​ Number Total Number Total Number Total Number Total December 31, ​ ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ of Sites ​ Tons ​ 2022 Owned operational landfills and landfills operated under life-of-site agreements 89 ​ 10,987 ​ 89 ​ 12,416 ​ 91 ​ 11,888 ​ 93 ​ 11,938 47,229 Operated landfills 5 ​ 150 ​ 5 ​ 146 ​ 5 ​ 153 ​ 7 ​ 171 620 ​ 94 11,137 94 12,562 96 12,041 100 12,109 47,849 ​ The expiration dates for the seven operated landfills range from 2025 to 2042.
The inclusion of these substances in CERCLA’s definition of hazardous substances may alter or increase cleanup liabilities associated with ongoing cleanup activities, or potentially give rise to additional liability, including for acts or conditions that were in compliance with applicable laws when they occurred. 3.
The inclusion of these substances in CERCLA’s definition of hazardous substances may alter or increase liabilities associated with ongoing cleanup activities, or potentially give rise to additional liability, including for acts or conditions that were in compliance with applicable laws when they occurred. 3.
Various states in which we operate or may operate in the future have been delegated authority to implement the Clean Water Act and its permitting requirements, and some of these states have adopted regulations that are more stringent than federal Clean Water Act requirements, including regulating discharges to state waters in addition to WOTUS. 2.
Various states in which we operate or may operate in the future have been delegated authority to implement the Clean Water Act and its permitting requirements, and some of these states have adopted regulations or policies that are more stringent than federal Clean Water Act requirements, including regulating discharges to state waters in addition to WOTUS. 2.
Waste Connections also provides non-hazardous oil and natural gas exploration and production, or E&P, waste treatment, recovery and disposal services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.
Waste Connections also provides non-hazardous oil and natural gas exploration and production, or 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.
Additionally, the Canadian federal government published on April 24, 2021 a notice of its intent to move forward with additional actions to address the broader class of PFAS, including research and monitoring of PFAS, reviewing PFAS as a class of chemicals and reviewing policy developments in other jurisdictions.
The Canadian federal government published a notice of its intent on April 24, 2021 to move forward with additional actions to address the broader class of PFAS, including research and monitoring of PFAS, reviewing PFAS as a class of chemicals and reviewing policy developments in other jurisdictions.
Similar to the United States, these regimes generally identify the rights and responsibilities of employers, supervisors and workers. Employers are required to implement all prescribed safety requirements and to exercise reasonable care to protect employees from workplace hazards, among other things.
Similar to the United States, these regimes generally identify the rights and responsibilities of employers, supervisors, workers and other parties. Employers are required to implement all prescribed safety requirements and to exercise reasonable care to protect employees from workplace hazards, among other things.
While we attribute our successful safety record to our culture and behavior-based approach, we recognize that advances in fleet design and technology can be important tools in identifying risky behaviors and providing coaching opportunities to further our efforts to achieve our long-term, aspirational target of a 25% reduction in incident rates as described in our 2022 Sustainability Report (www.wasteconnections.com/sustainability).
While we attribute our successful safety record to our culture and behavior-based approach, we recognize that advances in fleet design and technology can be important tools in identifying risky behaviors and providing coaching opportunities to further our efforts to achieve our long-term, aspirational target of a 25% reduction in incident rates as described in our 2023 Sustainability Report (www.wasteconnections.com/sustainability).
We manage our operations on a decentralized basis through five geographic operating segments. This places decision-making authority closer to the customer, enabling us to identify and address 1 Table of Contents customers’ needs quickly in a cost-effective manner.
We manage our operations on a decentralized basis through six geographic operating segments. This places decision-making authority closer to the customer, enabling us to identify and address 1 Table of Contents customers’ needs quickly in a cost-effective manner.
The majority of our collective bargaining agreements are with the Teamsters Union in both the U.S. and Canada. These collective bargaining agreements are renegotiated periodically. In 2022, we did not experience any work stoppages or have any days idle as a result of labor issues.
The majority of our collective bargaining agreements are with the Teamsters Union in both the U.S. and Canada. These collective bargaining agreements are renegotiated periodically. In 2023, we did not experience any work stoppages or have any days idle as a result of labor issues.
It is possible that as implemented, the IRC could increase the costs of operation for certain of our customers, including in the oil and gas industry. In the event that the IRA as implemented increases operational costs for our customers or reduces oil and gas E&P activities by our customers, it could, therefore, adversely affect our business.
It is possible that as implemented, the IRA could increase the costs of operation for certain of our customers, including in the oil and gas industry. In the event that the IRA as implemented increases operational costs for our customers or reduces oil and gas E&P activities by our customers, it could adversely affect our business.
The references in this Annual Report on Form 10-K to our website address or any third party’s website address, including but not limited to the SEC’s website and any websites maintained by the securities commissions or similar regulatory authorities in Canada, do not constitute incorporation by reference of the information contained in those websites and should not be considered part of this document unless otherwise expressly stated. 31 Table of Contents
The references in this Annual Report on Form 10-K to our website address or any third party’s website address, including but not limited to the SEC’s website and any websites maintained by the securities commissions or similar regulatory authorities in Canada, do not constitute incorporation by reference of the information contained in those websites and should not be considered part of this document unless otherwise expressly stated.
These generally include: waste created throughout the initial drilling and completion of an oil or natural gas well, 10 Table of Contents such as drilling fluids, drill cuttings, completion fluids and flowback water; production wastes and produced water during a well’s operating life; contaminated soils that require treatment during site reclamation; and substances that require clean-up after a spill, reserve pit clean-up or pipeline rupture.
These generally include: waste created throughout the initial drilling and completion of an oil or natural gas well, such as drilling fluids, drill cuttings, completion fluids and flowback water; production wastes and produced water during a well’s operating life; contaminated soils that require treatment during site reclamation; and substances that require clean-up after a spill, reserve pit clean-up or pipeline rupture.
The Clean Fuel Regulations, or CFRs, under the Canadian Environmental Protection Act, 1999 were registered and came into force on June 21, 2022 (with the exception of two sections that will come into force on September 30, 2024) The CFRs will replace the Renewable Fuel Regulations, or RFRs, which were established in August 2010 and require primary suppliers to have an average renewable content of at least 5% for gasoline that they produce in Canada and/or import, and 2% for diesel fuel and heating distillate oil.
The Clean Fuel Regulations, or CFRs, under the Canadian Environmental Protection Act, 1999 were registered and came into force on June 21, 2022 (with the exception of two sections that will come into force on September 30, 2024) The CFRs replaced the Renewable Fuel Regulations, or RFRs, which were established in August 2010 and required primary suppliers to have an average renewable content of at least 5% for gasoline that they produce in Canada and/or import, and 2% for diesel fuel and heating distillate oil.
Although we cannot be certain that all future expansions will be permitted as designed, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements is 8 Table of Contents estimated to be approximately 35 years when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume.
Although we cannot be certain that all future expansions will be permitted as designed, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements is estimated to be approximately 35 years when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume.
Responsible parties can bear liability under an order without fault. The costs to comply with an order can be very substantial. Some provincial jurisdictions provide a statutory right to compensation from the owner or person in control of a substance that is discharged into the environment to any person who suffers loss as a result.
Responsible parties can bear liability under an order without fault. The costs to comply with an order can be very 14 Table of Contents substantial. Some provincial jurisdictions provide a statutory right to compensation from the owner or person in control of a substance that is discharged into the environment to any person who suffers loss as a result.
Based on remaining permitted capacity as of December 31, 2022, and projected annual disposal volumes, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements, is estimated to be approximately 31 years. Many of our existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted.
Based on remaining permitted capacity as of December 31, 2023, and projected annual disposal volumes, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements, is estimated to be approximately 32 years. Many of our existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted.
At certain treatment facilities, loads of flowback and produced water and other drilling and production wastes delivered by our customers are sampled, assessed and tested by third parties according to state regulations.
At certain treatment facilities, loads of flowback and produced water and other drilling and production wastes delivered by our customers are sampled, assessed and tested by third parties according to state or provincial regulations.
Provincial laws may require the construction of landfill gas management systems, including gas collection and flaring systems, which are subject to approvals or other regulatory requirements. Failure to obtain an approval or comply with approval requirements could result in the imposition of substantial administrative or regulatory penalties. 18 Table of Contents D. Occupational Health and Safety 1.
Provincial laws may require the construction of landfill gas management systems, including gas collection and flaring systems, which are subject to approvals or other regulatory requirements. Failure to obtain an approval or comply with approval requirements could result in the imposition of substantial administrative or regulatory penalties. D. Occupational Health and Safety 1.
Various OSHA standards may apply to our operations, including standards concerning notices of hazards, safety in excavation and demolition work, the handling of asbestos and asbestos-containing materials and worker training and emergency response programs. Moreover, the Department of Transportation, OSHA, and other agencies regulate and have jurisdiction concerning the transport, movement and related safety of hazardous and other regulated materials.
Various OSHA standards may apply to our operations, including standards concerning notices of hazards, safety in excavation and demolition work, the handling of asbestos and asbestos-containing materials and worker training and emergency response programs. 18 Table of Contents Moreover, the Department of Transportation, OSHA, and other agencies regulate and have jurisdiction concerning the transport, movement and related safety of hazardous and other regulated materials.
CERCLA also imposes liability for the cost of evaluating and remedying damage to natural resources. Various states have enacted laws analogous to and independent of CERCLA that also impose liability, which is typically strict and joint and several, for investigation, cleanup and other damages associated with the release of hazardous or other regulated substances.
CERCLA also imposes liability for the cost of evaluating and remedying damage to natural resources. Various states have enacted laws analogous to and independent of CERCLA that also impose liability, which is typically strict and joint and several, for investigation, cleanup and other damages associated with the release of hazardous or other regulated 13 Table of Contents substances.
While certain courts have deemed these 21 Table of Contents laws to be unenforceable, other courts have not. Certain state and local jurisdictions may seek to enforce flow control restrictions contractually. These actions could limit or prohibit the importation of wastes originating outside of local jurisdictions or direct that wastes be handled at specified facilities.
While certain courts have deemed these laws to be unenforceable, other courts have not. Certain state and local jurisdictions may seek to enforce flow control restrictions contractually. These actions could limit or prohibit the importation of wastes originating outside of local jurisdictions or direct that wastes be handled at specified facilities.
Subpart XXX also requires monitoring surface emissions of methane, monitoring of temperature and pressure at the wellhead of landfill gas collection systems and imposes other requirements. 17 Table of Contents Existing landfills, which are not subject to NSPS Subpart XXX, are indirectly governed by the emissions guidelines and the SIPs or FIPs implementing these requirements.
Subpart XXX also requires monitoring surface emissions of methane, monitoring of temperature and pressure at the wellhead of landfill gas collection systems and imposes other requirements. Existing landfills, which are not subject to NSPS Subpart XXX, are indirectly governed by the emissions guidelines and the SIPs or FIPs implementing these requirements.
Under the CAA, generally a facility deemed to be a major source must be authorized by a permit, known as a federal operating permit. Additional or more stringent regulations of our facilities may occur in the future, which could increase operating costs or impose additional compliance burdens.
Under the CAA, generally a facility deemed to be a major source 16 Table of Contents must be authorized by a permit, known as a federal operating permit. Additional or more stringent regulations of our facilities may occur in the future, which could increase operating costs or impose additional compliance burdens.
The disposal of drilling fluids is generally regulated at the state level, and claims, including some regulatory 20 Table of Contents actions, have been brought against some owners or operators of these types of facilities for nuisance, seismic disturbances and other claims in relation to the operation of underground injection facilities.
The disposal of drilling fluids is generally regulated at the state level, and claims, including some regulatory actions, have been brought against some owners or operators of these types of facilities for nuisance, seismic disturbances and other claims in relation to the operation of underground injection facilities.
Cloninger practiced corporate, securities and mergers and acquisitions law with Schiff Hardin LLP in Chicago from 1999 to 2004 and Downey Brand LLP in Sacramento from 2004 to 2008. Mr. Cloninger holds a B.A. degree in History from Northwestern University and a J.D. degree from the University of California at Davis. Jason J.
Cloninger practiced corporate, securities and mergers and acquisitions law with Schiff Hardin LLP in Chicago from 1999 to 2004 and Downey Brand LLP in Sacramento from 2004 to 2008. Mr. Cloninger holds a B.A. degree in History from Northwestern University and a J.D. degree from the University of California at Davis. David G.
In our ordinary course of business, we incur significant costs complying with these statutes, regulations and applicable standards they impose. A brief description of certain of the primary statutes affecting our operations is discussed below. Laws and Regulations A. Waste and Hazardous Substances 1.
In our ordinary course of business, we incur significant costs complying with these statutes, regulations and applicable standards they impose. A brief description of certain of the primary statutes affecting our operations is discussed below. 12 Table of Contents Laws and Regulations A. Waste and Hazardous Substances 1.
Since promulgation of the 2015 Clean Water Rule, the EPA 15 Table of Contents and the Army Corps of Engineers, or the Corps, have sought to rescind it and to promulgate a revised definition of WOTUS that would establish federal jurisdiction more narrowly, thereby reducing the scope of Clean Water Act applicability.
Since promulgation of the 2015 Clean Water Rule, the EPA and the Army Corps of Engineers, or the Corps, have sought to rescind it and to promulgate a revised definition of WOTUS that would establish federal jurisdiction more narrowly, thereby reducing the scope of Clean Water Act applicability.
Finally, regulation of PFAS as an air contaminant and/or waste water effluent pollutant could increase the cost to conduct our business, including, without limitation, potentially requiring greater capital expenditures to meet control requirements as well as operation and maintenance costs. F.
Finally, regulation of PFAS as an air contaminant and/or wastewater effluent pollutant could increase the cost to conduct our business, including, without limitation, potentially requiring greater capital expenditures to meet control requirements as well as operation and maintenance costs. F.
Cloninger served as Vice President, Deputy General Counsel and Assistant Secretary of the Company. From February 2013 to August 2014, Mr. Cloninger served as Deputy General Counsel of the Company. He served as Corporate Counsel of the Company from February 2008 to February 2013. Mr.
From August 2014 to that date, Mr. Cloninger served as Vice President, Deputy General Counsel and Assistant Secretary of the Company. From February 2013 to August 2014, Mr. Cloninger served as Deputy General Counsel of the Company. He served as Corporate Counsel of the Company from February 2008 to February 2013. Mr.
Further, the EPA published a proposed rule in November 2021 aimed at reducing GHG emissions from the oil and natural gas sector by limiting methane and VOC emissions from new sources constructed or modified after November 2021, proposing Emission Guidelines for certain existing sources and amending NSPS OOOOa to rescind changes made during the prior administration.
Further, the EPA published a proposed rule in November 2021 aimed at reducing GHG emissions from the oil and natural gas sector by limiting methane and volatile organic compounds, or VOC, emissions from new sources constructed or modified after November 2021, proposing Emission Guidelines for certain existing sources, and amending NSPS Subpart OOOOa to rescind changes made during the prior administration.
Public sector operators may have financial and other advantages over us because of their access to user fees and similar charges, tax revenues, tax-exempt financing and the ability to flow-control waste streams to publicly owned disposal facilities.
Public sector operators may have financial and other advantages over us because of their access to 10 Table of Contents user fees and similar charges, tax revenues, tax-exempt financing and the ability to flow-control waste streams to publicly owned disposal facilities.
An Order Amending Schedule 4 to the Greenhouse Gas Pollution Pricing Act came into force on October 21, 2022, and implements an annual increase of CAD $15 per year to this carbon price for the calendar years 2023 – 2030.
An Order Amending Schedule 4 to the Greenhouse Gas Pollution Pricing Act came into force on October 21, 2022, and implemented an annual increase of CAD $15 per year to the carbon price for the calendar years 2023 – 2030.
In the United States, the EPA’s current and proposed regulation of GHG emissions may adversely impact our operations. Pursuant to the EPA’s rulemakings and interpretations, certain air permits issued on or after January 2, 2011 must address GHG emissions.
In the United States, the EPA’s current and proposed regulation of GHG emissions may 20 Table of Contents adversely impact our operations. Pursuant to the EPA’s rulemakings and interpretations, certain air permits issued on or after January 2, 2011 must address GHG emissions.
If such rules are issued or new regulatory requirements come into force, demand for electronic waste disposal could be reduced, potentially representing a reduction in demand for our services. 25 Table of Contents J. State Public Utility Regulation In some states, public authorities regulate the rates that landfill operators may charge.
If such rules are issued or new regulatory requirements come into force, demand for electronic waste disposal could be reduced, potentially representing a reduction in demand for our services. J. State Public Utility Regulation In some states, public authorities regulate the rates that landfill operators may charge.
Various laws impose cleanup or remediation liability on responsible parties, which are discussed in more detail below. Substances subject to cleanup liability have been or may have been disposed of or released on or under certain of our 12 Table of Contents facility sites.
Various laws impose cleanup or remediation liability on responsible parties, which are discussed in more detail below. Substances subject to cleanup liability have been or may have been disposed of or released on or under certain of our facility sites.
See Item 7 of Part II – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our Company Waste Connections, Inc. is the third largest solid waste services company in North America, providing non-hazardous waste collection, transfer and disposal services, along with resource recovery primarily through recycling and renewable fuels generation, in 43 states in the U.S. and six provinces in Canada.
See Item 7 of Part II – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our Company Waste Connections, Inc. is the third largest solid waste services company in North America, providing non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation, in 44 states in the U.S. and six provinces in Canada.
Moreover, if we experience a delay in obtaining, are unable 13 Table of Contents to obtain, or suffer the revocation of required permits, we may be unable to serve our customers, our operations may be interrupted and our growth and revenue may be limited.
Moreover, if we experience a delay in obtaining, are unable to obtain, or suffer the revocation of required permits, we may be unable to serve our customers, our operations may be interrupted and our growth and revenue may be limited.
These amendments were intended to improve compliance and implementation of the regulations. Compliance with these regulatory requirements could result in significant additional costs, which we will incur in our ordinary course of business.
These amendments were intended to improve compliance and implementation of the regulations. Compliance with these regulatory requirements 17 Table of Contents could result in significant additional costs, which we will incur in our ordinary course of business.
We are currently seeking to expand permitted capacity at 10 of our landfills, for which we consider expansions to be probable.
We are currently seeking to expand permitted capacity at 11 of our landfills, for which we consider expansions to be probable.
At this time, however, it is unclear how these credits, fees, and programs will impact our business or the businesses of our customers. RISK MANAGEMENT, INSURANCE AND FINANCIAL SURETY BONDS Risk Management We maintain environmental and other risk management programs that we believe are appropriate for our business.
At this time, however, it is unclear how these credits, fees, and programs will impact our business or our customers’ businesses. RISK MANAGEMENT, INSURANCE AND FINANCIAL SURETY BONDS Risk Management We maintain environmental and other risk management programs that we believe are appropriate for our business.
Certain landfilling sites are subject to more stringent regulatory requirements that can include detailed prescribed design standards, leachate collection systems, landfill gas management 14 Table of Contents or collection systems and/or site closure plans including post-closure care requirements.
Certain landfilling sites are subject to more stringent regulatory requirements that can include detailed prescribed design standards, leachate collection systems, landfill gas management or collection systems and/or site closure plans including post-closure care requirements.
Subsequently, in December 2022, EPA issued a follow-up memorandum recommending states and municipalities use the most current sampling and analysis methods in their NPDES programs to identify known or suspected sources of PFAS and to take actions using their pretreatment and permitting authorities, such as imposing technology-based limits on sources of PFAS discharges.
In December 2022, EPA issued a follow-up memorandum recommending states and municipalities use the most current sampling and analysis methods in their National Pollutant Discharge Elimination System, or NPDES, programs to identify known or suspected sources of PFAS and to take actions using pretreatment and permitting authorities, such as imposing technology-based limits on sources of PFAS discharges.
From February 2018 to July 2018, Ms. Whitney served as Senior Vice President - Finance of the Company. From March 2012 to February 2018, Ms. Whitney served as Vice President - Finance of the Company. From November 2006 to March 2012, Ms. Whitney served as Director of Finance of the Company. Ms.
From February 2018 to July 2018, Ms. Whitney served as Senior Vice President - Finance of the Company. 29 Table of Contents From March 2012 to February 2018, Ms. Whitney served as Vice President - Finance of the Company. From November 2006 to March 2012, Ms. Whitney served as Director of Finance of the Company. Ms.
As of December 31, 2022 we have gas recovery systems at 55 of our landfills to collect methane, which can then be used to generate electricity for local households, fuel local industrial power plants or power alternative fueled vehicles. For 17 of these beneficial reuse projects, the processed gas is used to fuel electricity generators.
As of December 31, 2023 we have gas recovery systems at 58 of our landfills to collect methane, which can then be used to generate electricity for local households, fuel local industrial power plants or power alternative fueled vehicles. For 16 of these beneficial reuse projects, the processed gas is used to fuel electricity generators.
Additionally, certain local jurisdictions have sought or may seek to impose extraterritorial obligations on our operations in an effort to affect flow control and may enforce tax and fee arrangements on behalf of such jurisdictions. Changes to international waste importation and exportation laws may affect the price of recyclable scrap commodities. Price fluctuations, in turn, may adversely affect our business.
Additionally, certain local jurisdictions have sought or may seek to impose extraterritorial obligations on our operations in an effort to affect flow control and may enforce tax and fee arrangements on behalf of such jurisdictions. 21 Table of Contents Changes to international waste importation and exportation laws may affect the price of recyclable scrap commodities.
Greater precipitation in the winter increases the weight of collected MSW, resulting in higher disposal costs, which are calculated on a per ton basis. ​ 27 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information concerning our executive officers as of February 3, 2023: ​ ​ ​ ​ ​ ​ Name Age Positions Ronald J.
Greater precipitation in the winter increases the weight of collected MSW, resulting in higher disposal costs, which are calculated primarily on a per ton basis. 28 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information concerning our executive officers as of February 2, 2024: ​ ​ ​ ​ ​ ​ Name Age Positions Ronald J.
We believe our ability to offer comprehensive rail haul disposal services in the Pacific Northwest improves our competitive position in bidding for such contracts in that region. 2 Table of Contents Generate Internal Growth .
We believe our ability to offer comprehensive rail haul disposal services in the Pacific Northwest may improve our competitive position in bidding for certain contracts in that region. 2 Table of Contents Generate Internal Growth .
Our services are generally provided under one of the following arrangements: (1) governmental certificates; (2) exclusive franchise agreements; (3) exclusive municipal contracts; (4) residential subscriptions; (5) residential contracts; or (6) commercial, industrial and E&P service agreements.
WASTE SERVICES Collection Services We provide collection services to residential, commercial, municipal, industrial and E&P customers. Our services are generally provided under one of the following arrangements: (1) governmental certificates; (2) exclusive franchise agreements; (3) exclusive municipal contracts; (4) residential subscriptions; (5) residential contracts; or (6) commercial, industrial and E&P service agreements.
From time to time, actions filed against us include claims for punitive damages, which are generally excluded from coverage under our liability insurance policies. Our policy provides insurance for new pollution conditions that originate after the commencement of our coverage.
From time to time, actions filed against us include claims for punitive damages, which are generally excluded from coverage under our liability insurance policies. Our policy provides insurance for new pollution conditions that originate after the commencement of our coverage. Pollution conditions existing prior to the commencement of our coverage, if found, could be excluded from coverage.
Landfill Disposal Services As of December 31, 2022, we owned or operated 75 MSW landfills, nine E&P waste landfills, which only accept E&P waste and 16 non-MSW landfills, which only accept construction and demolition, industrial and other non-putrescible waste. Eight of our MSW landfills also received E&P waste during 2022.
Landfill Disposal Services As of December 31, 2023, we owned or operated 78 MSW landfills, nine E&P waste landfills, which only accept E&P waste and 16 non-MSW landfills, which only accept construction and demolition, industrial and other non-putrescible waste. Seven of our MSW landfills also received E&P waste during 2023.
Competition for E&P waste comes primarily from smaller regional companies that utilize a variety of disposal methods and generally serve specific geographic markets.
Competition for E&P waste in the U.S. and Canada comes primarily from smaller regional companies that utilize a variety of disposal methods and generally serve specific geographic markets.
We continued to expand training opportunities available to our employees and 5 Table of Contents increased the number of sessions offered by over 40% in 2022 from the prior year, with approximately 72% of all employees participating in either a virtual or in-person training. Employee Pay and Benefits We strive to make Waste Connections a great place to work.
We continued to expand training opportunities available to our employees and increased the number of sessions offered by 25% in 2023 from the prior year, with approximately 97% of all employees participating in either a virtual or in-person training. Employee Pay and Benefits We strive to make Waste Connections a great place to work.
At December 31, 2022 and 2021, we had provided customers and various regulatory authorities with surety bonds in the aggregate amount of approximately $811.2 million and $744.0 million, respectively, to secure our asset closure and retirement requirements and $636.2 million and $556.6 million, respectively, to secure performance under collection contracts and landfill operating agreements.
At December 31, 2023 and 2022, we had provided customers and various regulatory authorities with surety bonds in the aggregate amount of approximately $901.3 million and $811.2 million, respectively, to secure our asset closure and retirement requirements and $743.8 million and $636.2 million, respectively, to secure performance under collection contracts and landfill operating agreements.
Such RINs can be sold by the Company. 23 Table of Contents The price of RINs has been extremely volatile and the value of RINs is dependent upon a variety of factors, including the required volumes promulgated by the EPA. The EPA annually establishes the renewable fuel volumes required under the RFS for the following year.
The price of RINs has been extremely volatile and the value of RINs is dependent upon a variety of factors, including the required volumes promulgated by the EPA. The EPA annually establishes the renewable fuel volumes required under the RFS for the following year.
In addition, many of the remaining independent operators may wish to sell their businesses to achieve liquidity in their personal finances or as part of their estate planning. During the year ended December 31, 2022, we completed 24 acquisitions for consideration having a net fair value of $2.334 billion.
In addition, many of the remaining independent operators may wish to sell their businesses to achieve liquidity in their personal finances or as part of their estate planning. During the year ended December 31, 2023, we completed 13 acquisitions for consideration having a net fair value of $752.8 million.
On December 1, 2022, EPA announced a proposed rule to establish 2023, 2024 and 2025 RFS volumes and percentage standards.
On December 1, 2022, EPA announced a proposed rule to establish 2023, 2024 and 2025 RFS volumes and percentage standards, which was finalized on July 12, 2023.
Operating practices at our operations emphasize minimizing the possibility of environmental contamination and litigation. Our risk management programs are designed, we believe, to ensure that our facilities are in material compliance with applicable federal, state and provincial regulations.
We also maintain a worker safety program that encourages safe practices in the workplace. Operating practices at our operations emphasize minimizing the possibility of environmental contamination and litigation. Our risk management programs are designed, we believe, to ensure that our facilities are in material compliance with applicable federal, state and provincial regulations.
Additionally, several states have adopted or proposed laws and regulations analogous to or even more stringent than the federal rules that would remain in effect regardless of the outcome of any federal stay or litigation.
Additionally, several states may adopt laws or regulations analogous to or even more stringent than the federal rules, and the state rules would remain in effect regardless of the outcome of any federal stay or litigation.
For example, the Chinese government banned the importation of all materials classified by China as solid waste and virtually all recyclables (except for certain metallic recyclables) as of January 1, 2021. Other international restrictions also limit the transportation of waste and recyclable scrap.
Price fluctuations, in turn, may adversely affect our business. For example, the Chinese government banned the importation of all materials classified by China as solid waste and virtually all recyclables (except for certain metallic recyclables) as of January 1, 2021. Other international restrictions also limit the transportation of waste and recyclable scrap.
Compliance with existing environmental regulatory requirements and permits requires significant capital and operating expenditures. It is possible that substantial costs for compliance or penalties for non-compliance may be incurred in the future. We believe that in recent years, environmental regulation of the industry has increased as have the number of enforcement actions brought by regulatory agencies.
It is possible that substantial costs for compliance or penalties for non-compliance may be incurred in the future. We believe that in recent years, environmental regulation of the industry has increased as have the number of enforcement actions brought by regulatory agencies.
He served as General Counsel and Secretary of the Company from February 2008 to February 2009 and Corporate Counsel of the Company from February 2004 to February 2008. Mr.
From February 2009 to August 2014, Mr. Shea served as Vice President, General Counsel and Secretary of the Company. He served as General Counsel and Secretary of the Company from February 2008 to February 2009 and Corporate Counsel of the Company from February 2004 to February 2008. Mr.
Hansen served as Director of Management Information Systems of the Company. Mr. Hansen holds a B.S. degree from Portland State University. Susan R. Netherton has been Senior Vice President – People, Training and Development of the Company since February 2022. From July 2013 to that date, Ms. Netherton served as Vice President – People, Training and Development of the Company.
Hansen served as Vice President – Information Technology of the Company. From April 1998 to December 2000, Mr. Hansen served as Director of Management Information Systems of the Company. Mr. Hansen holds a B.S. degree from Portland State University. Susan R. Netherton has been Senior Vice President – People, Training and Development of the Company since February 2022.
Eddie has been Senior Vice President and Chief Accounting Officer of the Company since January 2011. From February 2010 to that date, Mr. Eddie served as Vice President – Chief Accounting Officer of the Company. From March 2004 to February 2010, Mr. Eddie served as Vice President – Corporate Controller of the Company.
Eddie has been Senior Vice President – Performance Optimization of the Company since February 2023. From January 2011 to that date, Mr. Eddie served as Senior Vice President and Chief Accounting Officer of the Company. From February 2010 to January 2011, Mr. Eddie served as Vice President – Chief Accounting Officer of the Company.
Chambliss has more than 30 years of experience in the solid waste industry. Mr. Chambliss holds a B.S. degree in Business Administration from the University of Arkansas. 28 Table of Contents James M. Little has been Executive Vice President – Engineering and Disposal of the Company since July 2019. From February 2009 to that date, Mr.
Chambliss served as Executive Vice President – Operations of the Company. Mr. Chambliss has more than 30 years of experience in the solid waste industry. Mr. Chambliss holds a B.S. degree in Business Administration from the University of Arkansas. James M. Little has been Executive Vice President – Engineering and Disposal of the Company since July 2019.
Losses in excess of deductible or self-insured retention levels are insured subject to policy limits. Under our current Company-wide insurance program, we carry per incident deductibles or self-insured retentions ranging from $250,000 to $2 million for cyber liability and directors’ and officers’ liability claims. Additionally, we have umbrella policies with insurance companies for automobile liability, general liability and employer’s liability.
Losses in excess of deductible or self-insured retention levels are insured subject to policy limits. 27 Table of Contents Under our current Company-wide insurance program, we carry per incident deductibles or self-insured retentions ranging from $250,000 to $2 million for cyber liability and directors’ and officers’ liability claims.
We also compete in certain markets with publicly held and privately owned companies such as Waste Management, Inc., Republic Services, Inc., Clean Harbors, Inc., Secure Energy Services Inc., Nuverra Environmental Solutions, Trinity Environmental Services, LLC, Ecoserv, Oilfield Water Logistics 11 Table of Contents LLC and others.
We also compete in certain markets with publicly held and privately owned companies such as Waste Management, Inc., Republic Services, Inc., Clean Harbors, Inc., Secure Energy Services Inc., Nuverra Environmental Solutions, Trinity Environmental Services, LLC, Ecoserv, Oilfield Water Logistics LLC, Albright Flush Systems Ltd., Plains Environmental, Catapult Environmental and others.
Our goal is to create an environment where self-directed, empowered employees strive to consistently fulfill our constituent commitments and seek to create positive impacts through interactions with customers, communities and fellow employees, always relying on our Operating Values as the foundation for our existence.
Our goal is to create an environment where self-directed, empowered employees strive to consistently fulfill our constituent commitments and seek to create positive impacts through interactions with customers, communities and fellow employees, always relying on our Operating Values as the foundation for our existence. Moreover, we are committed to an inclusive, supportive environment built on the principles of Servant Leadership.
PFAS are the subject of environmental and health reviews by the federal government in Canada. PFAS, including PFOS, PFOA and certain long chain perfluorocarboxylic acids, or LC-PFCA, are listed as toxic substances on Schedule 1 of the Canadian Environmental Protection Act, 1999 and are subject to restrictions on their use in Canada.
Certain PFAS, including PFOS, PFOA and certain long chain perfluorocarboxylic acids, or LC-PFCA, are currently listed as toxic substances on Schedule 1 of the Canadian Environmental Protection Act, 1999 and are subject to regulatory restrictions on their use in Canada under the Prohibition of Certain Toxic Substances Regulations, 2012.
We aim to be an employer of choice that attracts and retains high performing talent with the mindset, skillset and commitment to uphold our values of safety, integrity, customer service, being a great place to work and the premier solid waste services company in the U.S. and Canada.
We look to attract and retain high performing talent with the mindset, skillset and commitment to uphold our values of safety, integrity, customer service, being a great place to work and the premier solid waste services company in the U.S. and Canada.
Employee Engagement Beyond compensation and benefits, we believe employee engagement includes increased investments in training and development of our leaders and frontline employees, along with new technology offerings to expand connectivity both inside and outside of the Company.
Employee Engagement Beyond compensation and benefits, we believe employee engagement includes increased investments in training and development of our leaders and frontline employees, along with new technology offerings to expand connectivity both inside and outside of the Company. In 2023 we overhauled our employee engagement survey tool and methodology, now incorporated into “Waste Connections Listens”.
Mittelstaedt 59 Executive Chairman Worthing F. Jackman 58 President and Chief Executive Officer Darrell W. Chambliss 58 Executive Vice President and Chief Operating Officer James M. Little 61 Executive Vice President – Engineering and Disposal Patrick J. Shea 52 Executive Vice President, General Counsel and Secretary Mary Anne Whitney 59 Executive Vice President and Chief Financial Officer Matthew S.
Mittelstaedt 60 President and Chief Executive Officer Darrell W. Chambliss 59 Executive Vice President and Chief Operating Officer James M. Little 62 Executive Vice President – Engineering and Disposal Patrick J. Shea 53 Executive Vice President, General Counsel and Secretary Mary Anne Whitney 60 Executive Vice President and Chief Financial Officer Matthew S.
From 29 Table of Contents April 2003 to February 2004, Mr. Eddie served as Vice President – Public Reporting and Compliance of the Company. From May 2001 to March 2003, Mr. Eddie served as Director of Finance of the Company. Mr. Eddie served as Corporate Controller for International Fibercom, Inc. from April 2000 to May 2001.
From March 2004 to February 2010, Mr. Eddie served as Vice President – Corporate Controller of the Company. From April 2003 to February 2004, Mr. Eddie served as Vice President – Public Reporting and Compliance of the Company. From May 2001 to March 2003, Mr. Eddie served as Director of Finance of the Company. Mr.
Black is a Certified Public Accountant and holds a B.S. degree in Accounting and Master’s degree in Taxation from California State University, Sacramento. Robert M. Cloninger has been Senior Vice President, Deputy General Counsel and Assistant Secretary of the Company since February 2022. From August 2014 to that date, Mr.
Black held various positions, including Tax Manager, for PricewaterhouseCoopers LLP. Mr. Black is a Certified Public Accountant and holds a B.S. degree in Accounting and Master’s degree in Taxation from California State University, Sacramento. Robert M. Cloninger has been Senior Vice President, Deputy General Counsel and Assistant Secretary of the Company since February 2022.
If these rules are enacted as proposed, they may require oil and gas operators to expend material sums on compliance, including on equipment repair or replacement. The costs associated with OOOOc compliance may reduce our customers’ E&P activities and could have an adverse impact on our business.
These rules may require oil and gas operators to expend material sums on compliance, including on equipment repair or replacement, and may reduce our customers’ E&P activities and could have an adverse impact on our business.
The NAAQS standards for particulate matter, published December 18, 2020, retained the NAAQS levels from 2012, and the ozone NAAQS, published December 31, 2020, retained 2015 NAAQS levels. On June 10, 2021, the EPA announced it will reconsider the December 2020 decision.
The NAAQS standards for particulate matter, published December 18, 2020, retained the NAAQS levels from 2012, and the ozone NAAQS, published December 31, 2020, retained 2015 NAAQS levels. In 2021, EPA announced it will reconsider the December 2020 decision, and in 2023, EPA announced it will delay reconsideration until 2024.
In 2022, this behavior-based approach to safety resulted in approximately 60% of our operating locations posting zero safety-related incidents or reduced incident frequency over the prior year. In addition, our Total Recordable Incident Rate (TRIR) remains well below industry averages. Safety training is an integral part of our culture of safety.
In 2023, this behavior-based approach to safety resulted in a reduction in our incident rate by over 7%, with approximately 60% of our operating locations posting zero safety-related incidents or reduced incident frequency over the prior year. In addition, our Total Recordable Incident Rate, or TRIR, remains well below industry averages.
We have 17 collective bargaining agreements covering 1,059 employees that have expired or are set to expire during 2023. We do not expect any significant disruption in our overall business in 2023 as a result of labor negotiations, employee strikes or organizational efforts by labor unions or their representatives.
We have 16 collective bargaining agreements covering 895 employees that have expired or are set to expire during 2024. We do not expect any significant disruption in our overall business in 2024 as a result of labor negotiations, employee strikes or organizational efforts by labor unions or their representatives. Safety Safety is our first operating value at Waste Connections.
Little served as Senior Vice President – Engineering and Disposal of the Company. From September 1999 to February 2009, Mr. Little served as Vice President – Engineering of the Company. Mr. Little held various management positions with Waste Management, Inc. (formerly USA Waste Services, Inc., which acquired Waste Management, Inc. and Chambers Development Co.
From February 2009 to that date, Mr. Little served as Senior Vice President – Engineering and Disposal of the Company. From September 1999 to February 2009, Mr. Little served as Vice President – Engineering of the Company. Mr. Little held various management positions with Waste Management, Inc.
EPA has published Action Plans to potentially address the risk of PFAS contamination. In April 2022, EPA issued a memorandum to seek to minimize PFAS pollution in surface water as EPA works to set effluent guidelines, develop analytical methods and issue water quality criteria for PFAS.
Earlier, in April 2022, EPA issued a memorandum to seek to minimize PFAS pollution in surface water as EPA works to set effluent guidelines, develop analytical methods and issue water quality criteria for PFAS.
Primary suppliers must lower the CI of their gasoline and diesel pools by an amount equal to the difference between the baseline CI for that fuel and the CI limit for the corresponding compliance period.
Primary suppliers must lower the CI of their gasoline and diesel pools by an amount equal to the difference between the baseline CI for that fuel and the CI limit for the corresponding compliance period. The CFRs require gasoline and diesel producers and importers to reduce the CI of the gasoline and diesel they produce in, and import into, Canada.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

81 edited+19 added−16 removed143 unchanged
Biggest changeWe maintain insurance policies for automobile, general, employer’s, environmental, cyber, employment practices and directors’ and officers’ liability, as well as for employee group health insurance, property insurance and workers’ compensation. We carry umbrella policies for certain types of claims to provide excess coverage over the underlying policies and per incident deductibles or self-insured retentions.
Biggest changeIncreases in risk management costs and the amount that we self-insure for various risks or limitations of our insurance coverage could reduce our operating margins and reported earnings . We maintain insurance policies for automobile, general, employer’s, environmental, cyber, employment practices and directors’ and officers’ liability, as well as for employee group health insurance, property insurance and workers’ compensation.
A portion of our indebtedness is at variable rates which are based on the Canadian Dollar Offered Rate, or CDOR, which will cease publication by June 28, 2024. The Canadian Alternative Reference Rate working group, or CARR, supports the transition to Canadian Overnight Repo Rate Average, or CORRA, rate.
A portion of our indebtedness is at variable rates which are based on the Canadian Dollar Offered Rate, or CDOR, which will cease publication by June 28, 2024. The Canadian Alternative Reference Rate working group, or CARR, supports the transition to the Canadian Overnight Repo Rate Average, or CORRA, rate.
We have established long-term, aspirational targets associated with ESG and sustainability-related investments and projects which may or may not be achieved . ‎Stakeholder input, business considerations, and potential regulation have reinforced the ‎importance of developing and implementing ‎environmental, social, and governance, or ESG, and sustainability initiatives.
We have established long-term, aspirational targets associated with sustainability and ESG-related investments and projects which may or may not be achieved . ‎Stakeholder input, business considerations, and potential regulation have reinforced the ‎importance of developing and implementing sustainability and ‎environmental, social, and governance, or ESG, initiatives.
The 45 Table of Contents timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our consolidated financial condition, results of operations and cash flows.
The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain. 45 Table of Contents Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our consolidated financial condition, results of operations and cash flows.
Greater precipitation in the winter increases the weight of collected solid waste, resulting in higher disposal costs, which are calculated on a per ton basis. Certain weather conditions, including severe storms, may result in temporary suspension of our operations, which can significantly impact the operating results of the affected areas.
Greater precipitation in the winter increases the weight of collected solid waste, resulting in higher disposal costs, which are calculated primarily on a per ton basis. Certain weather conditions, including severe storms, may result in temporary suspension of our operations, which can significantly impact the operating results of the affected areas.
We may be limited in our ability to dynamically address these impacts on a significant portion of our revenue under long-term contracts due to contractual provisions which may include limitations on the level of cost recovery through rate adjustments or a lag in any such recovery.
We may be limited in our ability to dynamically address these impacts on a significant portion of our revenue due to contractual provisions, including under long-term contracts, which may include limitations on the level of cost recovery through rate adjustments or a lag in any such recovery.
Regulation of GHG emissions from oil and natural gas E&P operations may also increase the costs to our customers of developing and producing hydrocarbons, and as a result, may have an indirect and adverse effect on the amount of oilfield waste delivered to our facilities by our customers.
Increased regulation of GHG emissions from oil and natural gas E&P operations may also increase the costs to our customers of developing and producing hydrocarbons, and as a result, may have an indirect and adverse effect on the amount of oilfield waste delivered to our facilities by our customers.
Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or interpretations of the Tax Act, such as through final regulations and the potential reversal of its provisions by a subsequent federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.
Changes in our tax provision or an increase to our tax liabilities, whether due to legislation commonly referred to as the Tax Cut and Jobs Act (“Tax Act”) or other applicable tax legislation, or the interpretations of the Tax Act or other applicable tax legislation, such as through final regulations and the potential reversal of its provisions by a subsequent federal administration, or a final determination of tax audits or otherwise, could have a material adverse effect on our financial position, results of operations, and cash flows.
In 2020, we ‎adopted long-term, aspirational sustainability targets, which we expanded in 2022; we also committed over $500 million for investments and ‎projects to support these efforts.
In 2020, we ‎adopted long-term, aspirational sustainability targets, which we expanded in 2022 and 2023; we also committed over $500 million for investments and ‎projects to support these efforts.
Congress, the Canadian government, the Organisation for Economic Co-operation and Development, or OECD, and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations, including in the area of base erosion and 42 Table of Contents profit shifting, or BEPS, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
Congress, the Canadian government, the Organisation for Economic Co-operation and Development, or OECD, and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations, including in the area of base erosion and profit shifting, or BEPS, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
Our financial and operating performance may be affected by restrictions associated with renewals or the inability to renew landfill operating permits, obtain new landfills and expand existing ones . We currently own and/or operate 100 landfills throughout the United States and Canada.
Our financial and operating performance may be affected by restrictions associated with renewals or the inability to renew landfill operating permits, obtain new landfills and expand existing ones . We currently own and/or operate 103 landfills throughout the United States and Canada.
See the section Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the years ended December 31, 2021 and 2020 on property and equipment in our E&P waste operations.
See the section Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the year ended December 31, 2021 on property and equipment in our E&P waste operations.
As a result, we may have fewer acquisition opportunities, and those opportunities may be on less attractive terms than in the past, which could cause a reduction in our rate of growth from acquisitions. 32 Table of Contents Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to do so.
As a result, we may have fewer acquisition opportunities, and those opportunities may be on less attractive terms than in the past, which could cause a reduction in our rate of growth from acquisitions. Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to do so.
The price of RINs has been extremely volatile and is dependent upon a variety of factors, including potential legislative changes, the availability of RINs for purchase, the demand for RINs, which is dependent on transportation fuel production levels, the mix of the petroleum business’ petroleum products and fuel blending performed at the refineries and downstream terminals, all of which can vary significantly from period to period.
The price of RINs has been extremely volatile and is dependent upon a variety of factors, including potential legislative changes, the availability of RINs for purchase, the demand for RINs, which is dependent on transportation fuel production levels, the mix of the petroleum 35 Table of Contents business’ petroleum products and fuel blending performed at the refineries and downstream terminals, all of which can vary significantly from period to period.
If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time, our revenues could decline. In addition, existing and future competitors may develop or offer new services or technologies, new facilities or other advantages.
If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time, our revenues could decline. In addition, existing and future competitors may develop or offer new services or technologies, 31 Table of Contents new facilities or other advantages.
For 33 Table of Contents example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A. Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
For example, see the discussions regarding the Los Angeles County, California Landfill Expansion Litigation—A. Chiquita Canyon, LLC Lawsuit Against Los Angeles County in Note 13, “Commitments and Contingencies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Further, as the use of SOFR-based rates is relatively new, there could be unanticipated difficulties, disruptions or methodological or other changes with the calculation and publication of SOFR based rates, which in turn could trigger another benchmark transition or otherwise cause a reliance on an alternate base rate.
Further, as the use of SOFR-based rates is relatively new, there could be 38 Table of Contents unanticipated difficulties, disruptions or methodological or other changes with the calculation and publication of SOFR based rates, which in turn could trigger another benchmark transition or otherwise cause a reliance on an alternate base rate.
For example, the State of California, the Canadian federal government and several Canadian provinces have enacted climate change laws, and other states and provinces in which we operate are considering similar actions. The EPA 44 Table of Contents made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.
For example, the State of California, the Canadian federal government and several Canadian provinces have enacted climate change laws, and other states and provinces in which we operate are considering similar actions. The EPA made an endangerment finding in 2009 allowing certain GHGs to be regulated under the CAA.
This finding allows the EPA to create regulations that will impact our operations – including imposing emission reporting, permitting, control technology installation and monitoring requirements, although the materiality of the impacts will not be known until all applicable regulations are promulgated and finalized.
This finding allows the 44 Table of Contents EPA to create regulations that will impact our operations – including imposing emission reporting, permitting, control technology installation and monitoring requirements, although the materiality of the impacts will not be known until all applicable regulations are promulgated and finalized.
See the sections Goodwill and Indefinite-Lived Intangible Assets and Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the years ended December 31, 2021 and 2020 on indefinite-lived intangible assets, definite-lived intangible assets and property and equipment in our E&P waste operations.
See the sections Goodwill and Indefinite-Lived Intangible Assets and Impairments of Property and Equipment and Finite-Lived Intangible Assets in Note 3, “Summary of Significant Accounting Policies,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K regarding the impairment charges recorded during the year ended December 31, 2021 on indefinite-lived intangible assets, finite-lived intangible assets and property and equipment in our E&P waste operations.
Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic 41 Table of Contents slowdown. In addition, a weaker economy may result in declines in recycled commodity prices.
Our commercial and industrial collection activity and the related demand for our landfill disposal and other services may also be impacted, depending on the drivers of the economic slowdown. In addition, a weaker economy may result in declines in recycled commodity prices.
There is a risk that some or all of the expected ‎benefits of these investments and projects may fail to materialize, may cost more to achieve or may ‎not occur within the anticipated time periods, including as a result of limitations on technology or supply chain disruptions.
There is a risk that some or all of the expected ‎benefits of these investments and projects may fail to materialize, may cost more to achieve or may ‎not occur within the anticipated time periods, including as a result of limitations on technology, permitting requirements, labor constraints or supply chain disruptions.
If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective.
If we fail to assess and identify cybersecurity risks associated with 43 Table of Contents acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective.
The credit rating process is contingent upon our credit profile and several other factors, many of which are beyond our control, including methodologies established and 38 Table of Contents interpreted by third-party rating agencies.
The credit rating process is contingent upon our credit profile and several other factors, many of which are beyond our control, including methodologies established and interpreted by third-party rating agencies.
Depending on the type and duration of any such labor disruptions, our operating 39 Table of Contents expenses could increase significantly, which could adversely affect our financial condition, results of operations and cash flows.
Depending on the type and duration of any such labor disruptions, our operating expenses could increase significantly, which could adversely affect our financial condition, results of operations and cash flows.
We are developing a plan to transition our indebtedness from CDOR to CORRA. In addition, $891.0 million of our indebtedness, including interest rate swaps, is at variable rates which are based on the Secured Overnight Financing Rate, or SOFR, as a result of the transition from the London Interbank Offered Rate, or LIBOR.
We are developing a plan to transition our indebtedness from CDOR to CORRA. In addition, at December 31, 2023 $890.0 million of our indebtedness, including interest rate swaps, is at variable rates which are based on the Secured Overnight Financing Rate, or SOFR, as a result of the transition from the London Interbank Offered Rate, or LIBOR.
Our indebtedness could adversely affect our financial condition and limit our financial flexibility . As of December 31, 2022, we had approximately $6.963 billion of total indebtedness outstanding, and we may incur additional debt in the future.
Our indebtedness could adversely affect our financial condition and limit our financial flexibility . As of December 31, 2023, we had approximately $6.812 billion of total indebtedness outstanding, and we may incur additional debt in the future.
Our inability to 34 Table of Contents complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our share price to decline.
Our inability to complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our share price to decline.
Our business and results of operations may be adversely affected by changes in national or global economic conditions, including higher inflation rates and economic slowdowns. Macroeconomic pressures, such as the outsized inflationary cost pressures experienced in 2022, have had and continue to have a significant impact on our operating costs and capital expenditures.
Our business and results of operations may be adversely affected by changes in national or global economic conditions, including higher inflation rates and economic slowdowns. Macroeconomic pressures, including inflationary cost pressures, have had and continue to have a significant impact on our operating costs and capital expenditures.
In addition, our failure ‎to implement such policies, practices and disclosure could adversely affect our reputation, competitive ‎position and share price and our ability to raise capital, even if our operating results or prospects have ‎not changed.‎ Our Company published its 2022 Sustainability Report, available at ‎www.wasteconnections.com/sustainability, to communicate our efforts to our ‎investors and stakeholders.
In addition, our failure ‎to 40 Table of Contents implement such policies, practices and disclosure could adversely affect our reputation, competitive ‎position and share price and our ability to raise capital, even if our operating results or prospects have ‎not changed.‎ Our Company published its 2023 Sustainability Report, available at ‎www.wasteconnections.com/sustainability, to communicate our efforts to our ‎investors and other stakeholders.
Conversely, weather-related occurrences and other “event-driven” waste projects can boost revenues through heavier weight loads or additional work for a limited time. These factors impact period-to-period comparisons of financial results, and our share price may be negatively affected by these variations. Our results will be affected by changes in recycled commodity prices and quantities .
Conversely, weather-related occurrences and other “event-driven” waste projects can boost revenues through heavier weight loads or additional work for a limited time. These factors impact period-to-period comparisons of financial results, and our share price may be negatively affected by these variations.
As of December 31, 2022, we had no contractual fixed price agreements in place. Variations in the volume of methane gas generated, marketed and sold by our landfill gas recovery operations also affect our results.
As of December 31, 2023, we had no contractual fixed price agreements to sell RINs in place. Variations in the volume of methane gas generated, marketed and sold by our landfill gas recovery operations also affect our results.
Although such actions are useful to protect our environment, these actions, as well as the actions of our customers to reduce waste or seek disposal alternatives, have reduced and may in the future further reduce the volume of waste going to landfills in certain areas, which may affect our ability to operate our landfills at full capacity and could adversely affect our operating results.
Although such actions are useful to protect our environment, these actions, as well as the actions of our customers to reduce waste or seek disposal alternatives, have reduced and may in the future further reduce the volume of waste going to landfills in certain areas, which may affect our ability to operate our landfills at full capacity and could adversely affect our operating results. 39 Table of Contents Labor union activity could divert management attention and adversely affect our operating results .
Based on historic trends, excluding any impact from the COVID-19 pandemic or an economic recession, we would expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters, and lower in the fourth quarter than in the second and third quarters.
Based on historic trends, excluding impacts from an economic recession, we would expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters, and lower in the fourth quarter than in the second and third quarters.
Our obligations to pay closure or post-closure costs may exceed the amount we have accrued and reserved and other amounts available from funds or reserves established to pay such costs. In addition, the completion or closure of a landfill site does not end our environmental obligations.
Our obligations to pay closure or post-closure costs sometimes exceed the amount we have accrued and reserved and other amounts available from funds or reserves established to pay such costs, resulting in adjustments to accruals and reserves and additional costs. The completion or closure of a landfill site does not end our environmental obligations.
Our financial results are based upon estimates and assumptions that may differ from actual results . In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles, or GAAP, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.
In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles, or GAAP, estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses.
Additional groups of employees may seek union representation in the future. As a result of these activities, we may be subjected to unfair labor practice charges, grievances, complaints and other legal and administrative proceedings initiated against us by unions or federal, state or provincial labor boards, which could negatively impact our operating results.
As a result of these activities, we may be subjected to unfair labor practice charges, grievances, complaints and other legal and administrative proceedings initiated against us by unions or federal, state or provincial labor boards, which could negatively impact our operating results.
Under the CFRs, gasoline and diesel producers and importers (primary suppliers) must lower the carbon intensity of the gasoline and diesel that they produce in Canada and/or import in accordance with prescribed limits through the use of compliance credits.
Under the CFRs, gasoline and diesel producers and importers (primary suppliers) must lower the carbon intensity of the gasoline and diesel that they produce in Canada and/or import in accordance with prescribed limits through the use of compliance credits. Supplying low carbon fuels can qualify for credit creation under the CFRs.
Pursuant to the Canadian Environmental Protection Act, 1999, the Canadian federal government has promulgated the Clean Fuel Regulations (CFRs), which will replace the Renewable Fuel Regulations.
The Canadian federal government has promulgated the Clean Fuel Regulations, or CFRs, pursuant to the Canadian Environmental Protection Act, 1999, which have replaced the Renewable Fuel Regulations.
As of December 31, 2022, we had $1.447 billion of such surety bonds in place and $127.1 million of letters of credit issued and outstanding. Closure bonds are difficult and costly to obtain.
As of December 31, 2023, we had $1.645 billion of such surety bonds in place and $142.0 million of letters of credit issued and outstanding. Closure bonds are difficult and costly to obtain.
The value of crude oil has impacted and may in the future impact the level of drilling activity in the basins where we operate; however, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.
The value of crude oil has impacted and may in the future impact the level of drilling or production activity in the basins where we operate; however, we cannot provide assurances that higher crude oil prices will result in increased capital spending and related activity in the basins where we operate.
Some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil or the value of recycled commodities, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.
Similar risks may affect contracts that we are awarded to operate municipally-owned assets, such as landfills. 34 Table of Contents Some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, including the price of crude oil or the value of recycled commodities, market position, competition, customer base, loss of key employees, third-party legal challenges or governmental actions.
Any such incidents could also tarnish our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
Any such incidents could also tarnish our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense. The seasonal nature of our business and “event-driven” waste projects cause our results to fluctuate .
Public health crises and the effects of related governmental initiatives have adversely affected and may continue to adversely affect our business, financial condition and results of operations . Public health crises, such as the COVID-19 pandemic, may impact our operations or our customers’ operations in ways that adversely affect our business, results of operations and financial condition.
Public health crises, such as the COVID-19 pandemic, may impact our operations or our customers’ operations in ways that adversely affect our business, results of operations and financial condition.
Fluctuations in the exchange rates that are unfavorable to us, including those resulting from the impact of the COVID-19 pandemic, would have an adverse effect on our financial performance and reported results of operations.
Fluctuations in the exchange rates that are unfavorable to us would have an adverse effect on our financial performance and reported results of operations.
In addition, some of our customers, including municipalities, have and others may terminate their contracts with us before the end of the terms of those contracts. Similar risks may affect our contracts to operate municipally-owned assets, such as landfills. Governmental action may also affect our exclusive arrangements. Municipalities may annex unincorporated areas within counties where we provide collection services.
In addition, some of our customers, including municipalities, have and others may terminate their contracts with us before the end of the terms of those contracts. Similar risks may affect our contracts to operate municipally-owned assets, such as landfills. 32 Table of Contents Governmental action may also affect our exclusive arrangements.
For example, we have approximately 362 contracts, representing approximately 3.0% of our annual revenues, which are set for expiration or automatic renewal on or before December 31, 2023.
For example, we have approximately 444 contracts, representing approximately 4.6% of our annual revenues, which are set for expiration or automatic renewal on or before December 31, 2024.
Further, under the new federal administration that took office in 2021 in the United States, it is possible that policies and initiatives of the prior administration could be reconsidered or even reversed, which could adversely affect our operating results.
Further, under the new federal administration that took office in 2021 in the United States, certain policies and initiatives of the prior administration have been modified or reversed, which could adversely affect our operating results.
Energy transition, or a transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources, could also affect investments by E&P companies in the basins where we operate.
Energy transition, or a transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources, could also affect investments by E&P companies in the basins where we operate. In certain locations where blending activities occur, the value of any recovered oil could vary based on the value of crude oil.
In addition, we may change our strategy with respect to a market or acquired businesses and decide to sell such operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets. Similar risks may affect contracts that we are awarded to operate municipally-owned assets, such as landfills.
In addition, we may change our strategy with respect to a market or acquired businesses and decide to sell such operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets.
Unless we are awarded franchises by these municipalities, we will lose customers. Municipalities may also decide to provide services to their residents themselves, on an optional or mandatory basis, causing us to lose customers.
In addition, municipalities in which we provide services on a competitive basis may elect to franchise those services to other service providers. Unless we are awarded franchises by these municipalities, we will lose customers. Municipalities may also decide to provide services to their residents themselves, on an optional or mandatory basis, causing us to lose customers.
Labor union activity could divert management attention and adversely affect our operating results . From time to time, labor unions attempt to organize our employees, and these efforts are likely to continue in the future. Certain groups of our employees are represented by unions, and we have negotiated collective bargaining agreements with most of these unions.
From time to time, labor unions attempt to organize our employees, and these efforts are likely to continue in the future. Certain groups of our employees are represented by unions, and we have negotiated collective bargaining agreements with most of these unions. Additional groups of employees may seek union representation in the future.
After completion or closure of a landfill site, there exists the potential for unforeseen environmental problems to occur that could result in substantial remediation costs or potential litigation. The potential increased regulation of per- and polyfluoroalkyl substances (“PFAS”), bisphenol A (“BPA”) phthalates, methane and other emerging contaminants could result in greater expenditures for closure and post-closure costs.
In addition, environmental problems may occur that could result in substantial remediation costs, regulatory enforcement actions and related fines or potential litigation. The potential increased regulation of per- and polyfluoroalkyl substances (“PFAS”), bisphenol A (“BPA”) phthalates, methane and other emerging contaminants could result in greater expenditures for closure and post-closure costs.
In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as BEPS.
In 2019, Canada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or the MLI, as part of the OECD/G20 initiative to counter what was perceived as BEPS. The MLI has entered into force for various of Canada's tax treaties but does not impact the tax treaty between Canada and the U.S.
The 2022 Sustainability Report does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K or any other report we provide to the SEC or other securities regulators. Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .
The 2023 Sustainability Report does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K or any other report we provide to the SEC or other securities regulators.
Our accruals for our landfill site closure and post-closure costs may be inadequate . We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate as well as for landfills we operate under life-of-site agreements.
We regularly accrue amounts and establish reserves to pay capping, closure and post-closure maintenance costs for landfill sites that we own and operate as well as for landfills we operate under life-of-site agreements.
As a result of the COVID-19 pandemic and subsequent labor constraints, we have experienced increased competition with other businesses in our markets for qualified employees, which has driven higher turnover and increased the time it takes to fill job openings.
As a result of labor constraints, we have experienced increased competition with other businesses in our markets for qualified employees, which has driven higher turnover and increased the time it takes to fill job openings. 33 Table of Contents Increases in capital expenditures and the timing of receipt of fleet and equipment could impact our financial results .
The pace of any recovery and the degree to which demand increases may impact the timing and extent of any recovery of recycled commodity values. 35 Table of Contents Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, particularly in residential collection, which results in increased processing and residual disposal costs to achieve quality standards.
Singlestream recycling facilities process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, particularly in residential collection, which results in increased processing and residual disposal costs to achieve quality standards.
As a result, our customers in annexed areas may be required to obtain services from competitors that have been previously franchised by the annexing municipalities to provide those services. In addition, municipalities in which we provide services on a competitive basis may elect to franchise those services to other service providers.
Municipalities may annex unincorporated areas within counties where we provide collection services. As a result, our customers in annexed areas may be required to obtain services from competitors that have been previously franchised by the annexing municipalities to provide those services.
It is also possible that these events could disrupt our customers’ businesses, thereby reducing the amount of waste generated by their operations. 36 Table of Contents Additional laws and regulations related to climate change, including restricting emissions of greenhouse gases, could also be promulgated, which could result in increased operational costs or disruption to our clients’ business, thereby impacting our operational results and financial condition.
Additional laws and regulations related to climate change, including restricting emissions of greenhouse gases, could also be promulgated, which could result in increased operational costs or disruption to our clients’ business, thereby impacting our operational results and financial condition.
In addition, E&P companies may elect to decrease investment in basins where the returns on investment are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices.
E&P companies may elect to decrease investment in basins where lower crude oil prices or volatility in crude oil prices make the returns on investment inadequate or uncertain or impact the ability of E&P companies to access capital on economically advantageous terms or at all.
Increases in fleet, equipment and landfill construction costs due to cost pressures, acquisitions and new contracts could result in capital expenditures being higher than anticipated.
Increases in fleet, equipment and landfill construction costs due to cost pressures, acquisitions and new contracts could result in capital expenditures being higher than anticipated. In addition, supply chain disruptions and inflationary pressures have and are expected to continue to result in higher costs, delays or lack of availability of fleet, equipment or supplies.
The amounts that we effectively self-insure could cause significant volatility in our operating margins and reported earnings based on the event and claim costs of incidents, accidents, injuries and adverse judgments.
We carry umbrella policies for certain types of claims to provide excess coverage over the underlying policies and per incident deductibles or self-insured retentions. The amounts that we effectively self-insure could cause significant volatility in our operating margins and reported earnings based on the event and claim costs of incidents, accidents, injuries and adverse judgments.
The COVID-19 pandemic has resulted in adverse impacts to our business. Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services.
Fear of such events and their duration and spread might also alter consumer confidence, behavior and spending patterns, resulting in an economic slowdown that could continue to affect demand for our services. Our financial results are based upon estimates and assumptions that may differ from actual results .
We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. 43 Table of Contents As we pursue our acquisition growth strategy and pursue new initiatives that improve our operations and reduce our costs, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.
A shortage of qualified employees in our markets, including due to impacts dating back to the COVID-19 pandemic, would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors.
A shortage of qualified employees in our markets would require us to incur additional costs related to wages and benefits, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors. In addition, higher turnover can result in increased costs associated with recruiting and training; it can also impact operating costs, including maintenance and risk.
Worsening economic conditions or a prolonged or recurring economic recession could adversely affect our operating results and expected seasonal fluctuations. Further, we cannot assure that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows.
Further, we cannot assure that any improvement in economic conditions after such a slowdown will result in an immediate, if at all, positive improvement in our operating results or cash flows. 41 Table of Contents Public health crises and the effects of related governmental initiatives could adversely affect our business, financial condition and results of operations .
Conversely, favorable investor expectations regarding potential investment tax credits or other benefits stemming from the Inflation Reduction Act of 2022 may not materialize or could fail to meet expectations. Increases in insurance costs and the amount that we self-insure for various risks or limitations of our insurance coverage could reduce our operating margins and reported earnings .
Conversely, favorable investor expectations regarding potential investment tax credits or other benefits stemming from the Inflation Reduction Act of 2022 may not materialize or could fail to meet expectations. Increases in the price of diesel or compressed natural gas, or CNG, fuel may adversely affect our collection business and reduce our operating margins .
We provide recycling services to some of our customers. The recyclables we process for sale include paper products and plastics that are shipped primarily to customers in the United States, as well as other markets, including Asia.
The recyclables we process for sale include paper products and plastics that are shipped primarily to customers in the United States, as well as other markets, including Asia. The sale prices of and the demand for recyclable commodities are frequently volatile and when they decline, our revenues, operating results and cash flows will be affected.
The regulation of these substances could increase or accelerate our financial obligations associated with closure obligations, post-closure maintenance and other environmental remediation related to our solid waste facilities.
Further, governmental authorities have considered or have begun to implement increased regulation of PFAS and potentially other emerging contaminants, which could adversely affect our operations. The regulation of these substances could increase or accelerate our financial obligations associated with leachate treatment as well as closure obligations, post-closure maintenance and other environmental remediation related to our solid waste facilities.
This could impact our ability to generate free cash flow in line with our expectations, the timing of our free cash flow generation, or otherwise adversely affect our financial results. The level of exploration, development and production activity of E&P companies will impact the demand for our E&P waste services.
This could impact our ability to generate free cash flow in line with our expectations, the timing of our free cash flow generation, or otherwise adversely affect our financial results. Our accruals for our landfill site closure and post-closure costs may be inadequate .
To manage a portion of this risk, we have entered into fixed-price fuel purchase contracts. During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices.
During periods of falling diesel fuel prices, it may become more expensive to purchase fuel under fixed-price fuel purchase contracts than at market prices. We utilize CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time.
We also build and operate natural gas fueling stations, some of which also serve the public or third parties. Operation of fueling stations and landfill gas collection and control systems involves additional risks of fire and explosion.
Operation of fueling stations and landfill gas collection and control systems involves additional risks of fire and explosion.
It is also possible that accruals may need to be expanded and that costs incurred related to these activities could be accelerated.
It is also possible that accruals may need to be expanded and that costs incurred related to these activities could be accelerated. Paying additional amounts for closure or post-closure costs and/or for environmental remediation and/or for litigation could harm our financial condition, operating results, or cash flow.
Significant increases in premiums on insurance that we retain, as well as higher deductibles or self-insured retentions, could reduce our margins. Increases in the price of diesel or compressed natural gas, or CNG, fuel may adversely affect our collection business and reduce our operating margins . The market price of diesel fuel is volatile.
Significant increases in premiums on insurance that we retain, as well as higher deductibles or self-insured retentions, could reduce our margins. Our business is subject to operational and safety risks, including the risk of personal injury to employees and others .
Furthermore, risks or liabilities we judge to be not material or remote at the time of acquisition may develop into more serious risks to our business. Any adverse outcome resulting from such risks or liabilities could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price.
Any adverse outcome resulting from such risks or liabilities could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and share price. Our results will be affected by changes in recycled commodity prices and quantities . We provide recycling services to some of our customers.
We generally purchase diesel fuel at market prices, which have fluctuated significantly in recent years, including as a result of geopolitical events or inflationary pressures, as experienced recently. This could adversely affect our waste collection business through a combination of higher fuel and disposal-related transportation costs and reduce our operating margins and reported earnings.
The market price of diesel fuel is volatile. We generally purchase diesel fuel at market prices, which have fluctuated significantly in recent years, including as a result of geopolitical events or inflationary pressures.
Providing environmental and waste management services, including operating a commercial truck fleet and constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures.
Providing environmental and waste management services, including operating a commercial truck fleet and constructing and operating landfills, involves risks such as truck accidents, equipment defects, malfunctions and failures. Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials or odors that could be triggered by weather or natural disasters.
We utilize CNG, in a small percentage of our fleet and we may convert more of our fleet from diesel fuel to CNG over time. The market price of CNG is also volatile; a significant increase in such cost could adversely affect our operating margins and reported earnings.
The market price of CNG is also volatile; a significant increase in such cost could adversely affect our operating margins and reported earnings. Our financial results could be adversely affected by impairments of goodwill, indefinite-lived intangibles or property and equipment .
A second Canadian legislative package is anticipated to be released, which would comprise the rules consistent with the OECD proposals that were not previously addressed. The international tax environment continues to change as a result of these and related tax policy initiatives and reforms.
A second Canadian legislative package is anticipated to be released, which would comprise the rules consistent with the OECD proposals that were not previously addressed including, amongst other items, an income inclusion rule and a rule intended to tax untaxed profit. Other new and proposed Canadian tax legislation may also impact our Canadian tax exposure.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES As of December 31, 2022, we owned 359 solid waste collection operations, 157 transfer stations, 63 MSW landfills, nine E&P waste landfills, 16 non-MSW landfills, 79 recycling operations, four intermodal operations, 22 E&P liquid waste injection wells and 18 E&P waste treatment and oil recovery facilities, and operated, but did not own, an additional 52 transfer stations, 12 MSW landfills and two intermodal operations, in 43 states in the U.S. and six provinces in Canada.
Biggest changePROPERTIES As of December 31, 2023, we owned 359 solid waste collection operations, 157 transfer stations, 66 MSW landfills, nine E&P waste landfills, 16 non-MSW landfills, 81 recycling operations, four intermodal operations, 22 E&P liquid waste injection wells and 18 E&P waste treatment and oil recovery facilities, and operated, but did not own, an additional 53 transfer stations and 12 MSW landfills, in 44 states in the U.S. and six provinces in Canada.
We own a variety of equipment, including waste collection and transportation vehicles, related support vehicles, double-stack rail cars, carts, 46 Table of Contents containers, chassis and heavy equipment used in landfill, collection, transfer station, waste treatment and intermodal operations. We believe that our existing facilities and equipment are adequate for our current operations.
We own a variety of equipment, including waste collection and transportation vehicles, related support vehicles, double-stack rail cars, carts, containers, chassis and heavy equipment used in landfill, collection, transfer station, waste treatment and intermodal operations. We believe that our existing facilities and equipment are adequate for our current operations.
In addition, we lease our administrative and regional offices in The Woodlands, Texas, where we occupy approximately 96,000 square feet of space. We also maintain regional administrative offices in each of our other segments.
In addition, we lease our 47 Table of Contents administrative and regional offices in The Woodlands, Texas, where we occupy approximately 117,000 square feet of space. We also maintain regional administrative offices in each of our other segments.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis graph and the accompanying text is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Base ​ Indexed Returns ​ ​ Period ​ Years Ending Company Name / Index Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Waste Connections, Inc. ​ $ 100 ​ $ 105.47 ​ $ 129.93 ​ $ 147.93 ​ $ 197.93 ​ $ 193.93 S&P 500 Index ​ $ 100 ​ $ 95.62 ​ $ 125.72 ​ $ 148.85 ​ $ 191.58 ​ $ 156.88 S&P/TSX 60 Index ​ $ 100 ​ $ 84.78 ​ $ 108.88 ​ $ 116.99 ​ $ 151.09 ​ $ 132.06 Dow Jones U.S.
Biggest changeThis graph and the accompanying text is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Base ​ Indexed Returns ​ ​ Period ​ Years Ending Company Name / Index Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Waste Connections, Inc. ​ $ 100 ​ $ 123.19 ​ $ 140.26 ​ $ 187.66 ​ $ 183.86 ​ $ 208.63 S&P 500 Index ​ $ 100 ​ $ 131.49 ​ $ 155.68 ​ $ 200.37 ​ $ 164.08 ​ $ 207.21 S&P/TSX 60 Index ​ $ 100 ​ $ 128.42 ​ $ 137.99 ​ $ 178.21 ​ $ 155.76 ​ $ 179.34 Dow Jones U.S.
Information regarding our NCIB plan can be found under the section Normal Course Issuer Bid in Note 14, “Shareholders’ Equity,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K and is incorporated herein by reference. 48 Table of Contents Performance Graph The following performance graph compares the total cumulative shareholder returns on our common shares over the past five fiscal years with the total cumulative returns for the S&P 500 Index, the S&P/TSX 60 Index and the Dow Jones U.S.
Information regarding our NCIB plan can be found under the section Normal Course Issuer Bid in Note 14, “Shareholders’ Equity,” of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K and is incorporated herein by reference. 49 Table of Contents Performance Graph The following performance graph compares the total cumulative shareholder returns on our common shares over the past five fiscal years with the total cumulative returns for the S&P 500 Index, the S&P/TSX 60 Index and the Dow Jones U.S.
Waste and Disposal Services Index. The graph depicts a five-year comparison of cumulative total returns for our common shares. The graph assumes an investment of $100 in our common shares on December 31, 2017, and the reinvestment of all dividends.
Waste and Disposal Services Index. The graph depicts a five-year comparison of cumulative total returns for our common shares. The graph assumes an investment of $100 in our common shares on December 31, 2018, and the reinvestment of all dividends.
The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares and overall market conditions. All common shares purchased under the NCIB will be immediately cancelled following their repurchase.
The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares, any share buyback taxes applicable and overall market conditions. All common shares purchased under the NCIB will be immediately cancelled following their repurchase.
On July 26, 2022, 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 12,859,066 of our common shares during the period of August 10, 2022 to August 9, 2023 or until such earlier time as the NCIB is completed or terminated at our option.
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.
As of February 3, 2023, there were 75 holders of record of our common shares. Because many of our common shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
As of February 2, 2024, there were 89 holders of record of our common shares. Because many of our common shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
On February 15, 2023, we announced that our Board of Directors approved a regular quarterly cash dividend of $0.255 per common share.
On February 13, 2024, we announced that our Board of Directors approved a regular quarterly cash dividend of $0.285 per common share.
Waste & Disposal Services Index ​ $ 100 ​ $ 100.11 ​ $ 135.25 ​ $ 144.12 ​ $ 201.48 ​ $ 190.59 ​ THE SHARE PRICE PERFORMANCE INCLUDED IN THIS GRAPH IS NOT NECESSARILY INDICATIVE OF FUTURE SHARE PRICE PERFORMANCE.
Waste & Disposal Services Index ​ $ 100 ​ $ 135.09 ​ $ 143.96 ​ $ 201.25 ​ $ 190.37 ​ $ 224.24 ​ THE SHARE PRICE PERFORMANCE INCLUDED IN THIS GRAPH IS NOT NECESSARILY INDICATIVE OF FUTURE SHARE PRICE PERFORMANCE.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in SG&A expenses at our existing operations of $45.8 million, assuming foreign currency parity, for the year ended December 31, 2022 was comprised of a collective increase in travel, meetings, training and community activity expenses of $22.6 million due to increased travel and social gatherings in the current year period due to a reduction in restrictions associated with the COVID-19 pandemic, an increase in administrative payroll expenses of $16.4 million due primarily to annual pay increases, an increase in direct acquisition expenses of $13.6 million due to an increase in acquisition activity in the current period, an increase in equity-based compensation expenses of $6.2 million associated with our annual recurring grant of restricted share units to our personnel, an increase in software license fees of $3.7 million associated with new information technology applications, an increase in bad debt costs of $2.8 million associated with increased revenue, an increase in professional fees of $1.6 million due primarily to increased legal services, an increase of $0.8 million resulting from the payment of supplemental bonuses to non-management employees to provide financial assistance associated with the impact of the COVID-19 pandemic and $4.1 million of other net expense increases, partially offset by a decrease in deferred compensation expenses of $9.1 million as a result of decreases in the market value of investments to which employee deferred compensation liability balances are tracked, a decrease in accrued recurring cash incentive compensation expense to our management of $8.6 million, a decrease of $5.2 million in equity-based compensation expenses associated with the prior year period including adjustments to increase the fair value of our common shares held in our deferred compensation plan by certain key executives as a result of the shares being exchanged for other investment options, and a decrease in equity-based compensation expenses of $3.1 million associated with changes in our share price resulting in fair value measurement decreases to equity awards accounted for as liabilities that were granted to employees of Progressive Waste prior to June 1, 2016, which are subject to valuation adjustments each period.
Biggest changeThe increase in SG&A expenses at our existing operations of $76.6 million, assuming foreign currency parity, for the year ended December 31, 2023 was comprised of an increase in administrative payroll expenses of $22.8 million, an increase in incentive compensation expense of $16.5 million, an increase in executive separation costs of $16.1 million, an increase in deferred compensation expenses of $9.9 million as a result of increases in the market value of investments to which employee deferred compensation liability balances are tracked, an increase in equity-based compensation expenses of $8.9 million associated with our annual recurring grants of restricted share units to our personnel, an increase in professional fees of $5.4 million, an increase in software license fees of $5.2 million, a collective increase in travel, meetings and training expenses of $4.5 million and $1.6 million of other net expense increases, partially offset by a decrease in direct acquisition expenses of $14.3 million due to a decrease in acquisition activity in the current period.
We cannot assure as to the amounts or timing of future share repurchases or dividends. We have the ability under our Credit Agreement and Term Loan Agreement to repurchase our common shares and pay dividends provided that we maintain specified financial ratios.
We cannot assure as to the amounts or timing of future dividends or share repurchases. We have the ability under our Credit Agreement and Term Loan Agreement to repurchase our common shares and pay dividends provided that we maintain specified financial ratios.
Landfill development costs . Landfill development costs include the costs of acquisition, construction associated with excavation, liners, site berms, groundwater monitoring wells, gas recovery systems and leachate collection systems. We estimate the total costs associated with developing each landfill site to its final capacity. Total landfill costs include the development costs associated with expansion airspace. Expansion airspace is described below.
Landfill development costs include the costs of acquisition, construction associated with excavation, liners, site berms, groundwater monitoring wells, gas recovery systems and leachate collection systems. We estimate the total costs associated with developing each landfill site to its final capacity. Total landfill costs include the development costs associated with expansion airspace. Expansion airspace is described below.
Outstanding amounts on the term loan can be either base rate loans or Term SOFR loans.
Outstanding amounts on the term loan can be either base rate loans or Term SOFR loans.
Waste Connections also provides E&P waste services in several basins across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.
Waste Connections also provides E&P waste 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.
The detailed results of our 2022, 2021 and 2020 impairment tests are described in Note 3 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Business Combination Accounting . We recognize, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values.
The detailed results of our 2023, 2022 and 2021 impairment tests are described in Note 3 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Business Combination Accounting . We recognize, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values.
Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the five operating segments and comprise the net EBITDA for our Corporate segment for the periods presented.
Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the six operating segments and comprise the net EBITDA for our Corporate segment for the periods presented.
These exclusive arrangements are awarded, at least initially, on a competitive bid basis and subsequently on a bid or negotiated basis. The standard customer service agreements generally range from one to three years in duration, although some exclusive franchises are for significantly longer periods. Residential collection services are also provided on a subscription basis with individual households.
These exclusive arrangements are awarded, at least initially, on a competitive bid basis and subsequently on a bid or negotiated basis. The standard customer service agreements generally range from one to five years in duration, although some exclusive franchises are for significantly longer periods. Residential collection services are also provided on a subscription basis with individual households.
Capital Position We target a Leverage Ratio, as defined substantially identically in both our Credit Agreement and Term Loan Agreement, of approximately 2.5x – 3.0x total debt to EBITDA. The Leverage Ratio is a non-GAAP ratio (refer to page 74 of this Annual Report on Form 10-K for more information on this ratio).
Capital Position We target a Leverage Ratio, as defined substantially identically in both our Credit Agreement and Term Loan Agreement, of approximately 2.5x – 3.0x total debt to EBITDA. The Leverage Ratio is a non-GAAP ratio (refer to page 76 of this Annual Report on Form 10-K for more information on this ratio).
Based on our deferred income tax liability balance at December 31, 2022, each 0.1 percentage point change to our expected future income tax rates would change our deferred income tax liability balance and income tax expense by approximately $3.9 million. Accounting for landfills . We recognize landfill depletion expense as airspace of a landfill is consumed.
Based on our deferred income tax liability balance at December 31, 2023, each 0.1 percentage point change to our expected future income tax rates would change our deferred income tax liability balance and income tax expense by approximately $3.9 million. Accounting for landfills . We recognize landfill depletion expense as airspace of a landfill is consumed.
These arrangements have not materially affected our financial position, results of operations or liquidity during the year ended December 31, 2022, nor are they expected to have a material impact on our future financial position, results of operations or liquidity. From time to time, we evaluate our existing operations and their strategic importance to us.
These arrangements have not materially affected our financial position, results of operations or liquidity during the year ended December 31, 2023, nor are they expected to have a material impact on our future financial position, results of operations or liquidity. From time to time, we evaluate our existing operations and their strategic importance to us.
Other companies may calculate leverage ratios differently. 74 Table of Contents Inflation 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.
Other companies may calculate leverage ratios differently. 76 Table of Contents Inflation 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.
For our impairment testing of our operating segments for the year ended December 31, 2022, we determined that the indicated fair value of each of our reporting units exceeded their carrying value in excess of 200% and, therefore, we did not record an impairment charge.
For our impairment testing of our operating segments for the year ended December 31, 2023, we determined that the indicated fair value of each of our reporting units exceeded their carrying value in excess of 200% and, therefore, we did not record an impairment charge.
The following assumptions were made in calculating cash interest payments: 1) We calculated cash interest payments on the Credit Agreement using the Term SOFR rate plus the applicable Term SOFR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at December 31, 2022.
The following assumptions were made in calculating cash interest payments: 1) We calculated cash interest payments on the Credit Agreement using the Term SOFR rate plus the applicable Term SOFR margin, the base rate plus the applicable base rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance fee and the Canadian prime rate plus the applicable prime rate margin at December 31, 2023.
Our discount rate assumption for purposes of computing 2022 and 2021 “layers” for final capping, closure and post-closure obligations is based on our long-term credit adjusted risk free rate. Our discount rate ranged from 3.25% to 5.50% for 2022 and was 3.25% for 2021.
Our discount rate assumption for purposes of computing 2023 and 2022 “layers” for final capping, closure and post-closure obligations is based on our long-term credit adjusted risk free rate. Our discount rate was 5.50% for 2023 and ranged from 3.25% to 5.50% for 2022.
We intend to fund our planned 2023 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement. In addition, we may make substantial additional capital expenditures in acquiring land and solid waste businesses.
We intend to fund our planned 2024 capital expenditures principally through cash on hand, internally generated funds and borrowings under our Credit Agreement. In addition, we may make substantial additional capital expenditures in acquiring land and solid waste businesses.
The New 2032 Senior Notes bear interest at a rate of 3.20%. 9) $750.0 million in principal payments due 2033 related to our 2033 Senior Notes. The 2033 Senior Notes bear interest at a rate of 4.20%. 70 Table of Contents 10) $500.0 million in principal payments due 2050 related to our 2050 Senior Notes.
The New 2032 Senior Notes bear interest at a rate of 3.20%. 71 Table of Contents 9) $750.0 million in principal payments due 2033 related to our 2033 Senior Notes. The 2033 Senior Notes bear interest at a rate of 4.20%. 10) $500.0 million in principal payments due 2050 related to our 2050 Senior Notes.
We assumed the Credit Agreement is paid off when it matures in July 2026. 2) We calculated cash interest payments on the Term Loan Agreement using the Term SOFR rate plus the applicable Term SOFR margin at December 31, 2022.
We assumed the Credit Agreement is paid off when it matures in July 2026. 2) We calculated cash interest payments on the Term Loan Agreement using the Term SOFR rate plus the applicable Term SOFR margin at December 31, 2023.
Selling, general and administrative, or SG&A, expense includes management, sales force, clerical and administrative employee compensation and benefits, legal, accounting and other professional services, acquisition expenses, bad debt expense and lease cost for our administrative offices. 57 Table of Contents Depreciation expense includes depreciation of equipment and fixed assets over their estimated useful lives using the straight-line method.
Selling, general and administrative, or SG&A, expense includes management, sales force, clerical and administrative employee compensation and benefits, legal, accounting and other professional services, acquisition expenses, bad debt expense and lease cost for our administrative offices. Depreciation expense includes depreciation of equipment and fixed assets over their estimated useful lives using the straight-line method.
Such critical accounting estimates and assumptions are applicable to our reportable segments. We believe that of our significant accounting policies, which are described in Note 3 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
Such critical accounting estimates and assumptions are applicable to our reportable segments. 53 Table of Contents We believe that of our significant accounting policies, which are described in Note 3 of our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
We repaid at maturity the 2021 Private Placement Notes and repaid the other Private Placement Notes in connection with the Offering (defined below) in September 2021. 68 Table of Contents On November 16, 2018, we completed an underwritten public offering of $500.0 million aggregate principal amount of our 4.25% Senior Notes due December 1, 2028 (the “2028 Senior Notes”).
We repaid at maturity the 2021 Private Placement Notes and repaid the other Private Placement Notes in connection with the Offering (defined below) in September 2021. On November 16, 2018, we completed an underwritten public offering of $500.0 million aggregate principal amount of our 4.25% Senior Notes due December 1, 2028 (the “2028 Senior Notes”).
The functional currency of the Company’s Canadian operations is the Canadian dollar. The reporting currency of the Company is the U.S. dollar. The Company’s consolidated Canadian dollar financial position is translated to U.S. dollars by applying the foreign currency exchange rate in effect at the consolidated balance sheet date.
The reporting currency of the Company is the U.S. dollar. The Company’s consolidated Canadian dollar financial position is translated to U.S. dollars by applying the foreign currency exchange rate in effect at the consolidated balance sheet date.
Accordingly, we believe these are the most critical to fully understand and evaluate our financial condition and results of operations. 53 Table of Contents Insurance liabilities . We maintain insurance policies for automobile, general, employer’s, environmental, cyber, employment practices and directors’ and officers’ liability as well as for employee group health insurance, property insurance and workers’ compensation.
Accordingly, we believe these are the most critical to fully understand and evaluate our financial condition and results of operations. Insurance liabilities . We maintain insurance policies for automobile, general, employer’s, environmental, cyber, employment practices and directors’ and officers’ liability as well as for employee group health insurance, property insurance and workers’ compensation.
Significant judgments 55 Table of Contents inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows, growth rates and income tax rates. In assessing the reasonableness of our determined fair values of our reporting units, we evaluate our results against our current market capitalization.
Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows, growth rates and income tax rates. In assessing the reasonableness of our determined fair values of our reporting units, we evaluate our results against our current market capitalization.
Presentation of Results of Operations, Segment Reporting, and Liquidity and Capital Resources The following discussion and analysis of our Results of Operations, Segment Reporting, and Liquidity and Capital Resources includes a comparison for the year ended December 31, 2022 to the year ended December 31, 2021.
Presentation of Results of Operations, Segment Reporting, and Liquidity and Capital Resources The following discussion and analysis of our Results of Operations, Segment Reporting, and Liquidity and Capital Resources includes a comparison for the year ended December 31, 2023 to the year ended December 31, 2022.
The fees received for collection services are based primarily on the market, collection frequency and level of service, route density, type and volume or weight of the waste collected, type of equipment and containers furnished, the distance to the disposal or processing facility, the cost of disposal or processing, and prices charged by competitors for similar services.
The fees we charge for collection services are based primarily on the market, collection frequency and level of service, route density, type and volume or weight of the waste collected, type of equipment and containers furnished, the distance to the disposal or processing facility, the cost of disposal or processing, and prices charged by competitors for similar services.
Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the year ended December 31, 2022, compared to the year ended December 31, 2021, are discussed below.
Significant changes in revenue, EBITDA and depreciation, depletion and amortization for our reportable segments for the year ended December 31, 2023, compared to the year ended December 31, 2022, are discussed below.
We define 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 distributions to noncontrolling interests.
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.
The 2050 Senior Notes bear interest at a rate of 3.05%. 11) $850.0 million in principal payments due 2052 related to our 2052 Senior Notes. The 2052 Senior Notes bear interest at a rate of 2.95%. 12) $37.2 million in principal payments related to our notes payable to sellers and other third parties.
The 2050 Senior Notes bear interest at a rate of 3.05%. 11) $850.0 million in principal payments due 2052 related to our 2052 Senior Notes. The 2052 Senior Notes bear interest at a rate of 2.95%. 12) $48.8 million in principal payments related to our notes payable to sellers and other third parties.
(e) The aggregate tax effect of footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods. ​ 72 Table of Contents Adjusted EBITDA We present adjusted EBITDA, a non-GAAP financial measure, supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry.
(f) The aggregate tax effect of footnotes (a) through (e) is calculated based on the applied tax rates for the respective periods. ​ 74 Table of Contents Adjusted EBITDA We present adjusted EBITDA, a non-GAAP financial measure, supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry.
We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes to reduce labor and workers’ compensation exposure, utilizing comprehensive maintenance and health and safety programs, and increasing the use of transfer stations to further enhance internalization rates.
We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes to reduce labor and workers’ compensation exposure, utilizing comprehensive maintenance and health and safety 57 Table of Contents programs, and increasing the use of transfer stations to further enhance internalization rates.
Amortization of intangibles expense as a percentage of revenues decreased 0.1 percentage points to 2.2% for the year ended December 31, 2022, from 2.3% for the year ended December 31, 2021. The decrease as a percentage of revenues was attributable to the impact of price-driven revenue increases in our solid waste services. Impairments and Other Operating Items .
Amortization of intangibles expense as a percentage of revenues decreased 0.2 percentage points to 2.0% for the year ended December 31, 2023, from 2.2% for the year ended December 31, 2022. The decrease as a percentage of revenues was attributable to the impact of price-driven revenue increases in our solid waste services. Impairments and Other Operating Items .
We further adjust this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently.
We further adjust this calculation to exclude the effects of items management believes impact the ability to evaluate the liquidity of our business operations. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently.
These include: ● Statements regarding our landfills, including capacity, duration, special projects, demand for and pricing of recyclables, landfill alternatives and related capital expenditures; ● Discussion of competition, loss of contracts, price increases and additional exclusive and/or long-term collection service arrangements; ● Forecasts of cash flows necessary for operations and free cash flow to reduce leverage as well as our ability to draw on our credit facility and access the capital markets to refinance or expand; ● Statements regarding our ability to access capital resources or credit markets at all or on favorable terms; ● Plans for, and the amount of, certain capital expenditures for our existing and newly acquired properties and equipment; ● Statements regarding fuel, oil and natural gas demand, prices, and price volatility; ● Assessments of regulatory developments and potential changes in environmental, health, safety and tax laws and regulations; and ● Other statements on a variety of topics such as the COVID-19 pandemic, inflation, credit risk of customers, seasonality, labor/pension costs and labor union activity, operational and safety risks, acquisitions, litigation results, goodwill impairments, insurance costs and cybersecurity threats.
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; ● Forecasts of cash flows necessary for operations and free cash flow to reduce leverage as well as our ability to draw on our credit facility and access the capital markets to refinance or expand; ● Statements regarding our ability to access capital resources or credit markets; ● Plans for, and the amount of, certain capital expenditures for our existing and newly acquired properties and equipment; ● Statements regarding fuel, oil and natural gas demand, prices, and price volatility; ● Assessments of regulatory developments and potential changes in environmental, health, safety and tax laws and regulations; and ● Other statements on a variety of topics such as the COVID-19 pandemic, inflation, credit risk of customers, seasonality, labor/pension costs and labor union activity, employee retention costs, operational and safety risks, acquisitions, litigation developments and results, goodwill impairments, insurance costs and cybersecurity threats.
The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares and overall market conditions. All common shares purchased under the NCIB will be immediately cancelled following their repurchase.
The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including our capital structure, the market price of our common shares, any share buyback taxes applicable and overall market conditions. All common shares purchased under the NCIB will be immediately cancelled following their repurchase.
We accrue for estimated final capping, closure and post-closure maintenance obligations at the landfills we own, and the landfills that we operate, but do not own, under life-of-site agreements.
We accrue for estimated final capping, closure and post-closure maintenance obligations at the landfills we own, and the landfills that we operate, but do not own, under life-of-site 54 Table of Contents agreements.
Executive Overview We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, along with resource recovery primarily through recycling and renewable fuels generation, in mostly exclusive and secondary markets across 43 states in the U.S. and six provinces in Canada.
Executive Overview We are an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation, in mostly exclusive and secondary markets across 44 states in the U.S. and six provinces in Canada.
The income tax provision for the year ended December 31, 2021 included a benefit of $2.1 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.
The income tax provision for the year ended December 31, 2023 included a benefit of $3.5 million from share-based payment awards being recognized in the income statement when settled, as well as a portion of our internal financing being taxed at effective rates substantially lower than the U.S. federal statutory rate.
Our access to funds under the Credit Agreement is dependent on the ability of the banks that are parties to the agreement to meet their funding commitments.
Our access to funds under the Credit Agreement is dependent on 68 Table of Contents the ability of the banks that are parties to the agreement to meet their funding commitments.
Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at December 31, 2022, and have maturity dates ranging from 2024 to 2036. 13) $11.5 million in principal payments related to our financing leases.
Our notes payable to sellers and other third parties bear interest at rates between 2.42% and 10.35% at December 31, 2023, and have maturity dates ranging from 2024 to 2036. 13) $10.0 million in principal payments related to our financing leases.
At December 31, 2022, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 5.42% on such date). 3) $800.0 million in principal payments due July 2026 related to our term loan under our Term Loan Agreement.
At December 31, 2023, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 6.50% on such date). 3) $800.0 million in principal payments due July 2026 related to our term loan under our Term Loan Agreement.
At December 31, 2022, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 5.42% on such date). 4) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes.
At December 31, 2023, all amounts outstanding under the term loan were in Term SOFR loans which bear interest at the Term SOFR rate plus the applicable margin (for a total rate of 6.44% on such date). 4) $500.0 million in principal payments due 2028 related to our 2028 Senior Notes.
We compare the fair value of each reporting unit with the carrying value of the net assets assigned to the reporting unit. If the fair value of a reporting unit is greater than the carrying value of the net assets, including goodwill, assigned to the reporting unit, then no impairment results.
If the fair value of a reporting unit is greater than the carrying value of the net assets, including goodwill, assigned to the reporting unit, then no impairment results.
SG&A expenses as a percentage of revenues decreased 0.3 percentage points to 9.7% for the year ended December 31, 2022, from 10.0% for the year ended December 31, 2021.
SG&A expenses as a percentage of revenues increased 0.3 percentage points to 10.0% for the year ended December 31, 2023, from 9.7% for the year ended December 31, 2022.
On July 26, 2022, 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 12,859,066 of our common shares during the period of August 10, 2022 to August 9, 2023 or until such earlier time as the NCIB is completed or terminated at our option.
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.
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 December 31, 2022, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 57.9 million gallons remaining to be purchased for a total of $184.9 million.
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 December 31, 2023, our unconditional purchase obligations consisted of multiple fixed-price fuel purchase contracts under which we have 56.8 million gallons remaining to be purchased for a total of $175.7 million.
Cash balances decreased from $147.4 million at December 31, 2021 to $78.6 million at December 31, 2022, and we had $1.194 billion of remaining borrowing capacity under our Credit Agreement, which matures in July 2026. In total, we had $1.163 billion in prepayable debt outstanding at December 31, 2022.
Cash balances decreased from $78.6 million at December 31, 2022 to $78.4 million at December 31, 2023, and we had $1.357 billion of remaining borrowing capacity under our Credit Agreement, which matures in July 2026. In total, we had $1.103 billion in prepayable debt outstanding at December 31, 2023.
Contingent consideration payments include $81.4 million recorded as liabilities in our consolidated financial statements at December 31, 2022, and $17.4 million of future interest accretion on the recorded obligations. We are party to operating lease agreements and finance leases as discussed in Note 7 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Contingent consideration payments include $115.0 million recorded as liabilities in our consolidated financial statements at December 31, 2023, and $16.3 million of future interest accretion on the recorded obligations. We are party to operating lease agreements and finance leases as discussed in Note 7 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Our significant costs of operations in 2022 were labor, employee benefits, third-party disposal and transportation, vehicle, equipment and property maintenance, taxes and fees, insurance and fuel.
Our significant costs of operations in 2023 were labor, employee benefits, third-party disposal and transportation, vehicle, equipment and property maintenance, taxes and fees, risk management and fuel.
(b) Reflects the elimination of cash received in conjunction with the divestiture of certain operations. (c) Reflects the addback of acquisition-related transaction costs and the settlement of an acquired tax liability. (d) Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.
(b) Reflects the elimination of cash received in conjunction with the divestiture of certain operations. (c) Reflects the addback of acquisition-related transaction costs and, in 2022, the settlement of an acquired tax liability. (d) Reflects the cash component of severance expense associated with an executive departure. (e) Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period.
The increase was the result of $37.7 million from intangible assets acquired in acquisitions closed during, or subsequent to, the year ended December 31, 2021, partially offset by a decrease of $20.5 million from certain intangible assets becoming fully amortized subsequent to December 31, 2021 and a decrease of $0.8 million resulting from a lower average foreign currency exchange rate in effect during the current period.
The increase was the result of $21.6 million from intangible assets acquired in acquisitions closed during, or subsequent to, the year ended December 31, 2022, partially offset by a decrease of $18.8 million from certain intangible assets becoming fully amortized subsequent to December 31, 2022, and a decrease of $0.9 million resulting from a lower average foreign currency exchange rate in effect during the current period.
Solid waste internal growth was positive 7.4%, due to higher price increases and higher surcharges, partially offset by lower volumes and lower recycled commodities. Pricing growth was 9.2%, with core pricing up 7.7%, plus materials and environmental surcharges of positive 1.5%.
Solid waste internal growth was up 6.2%, due to higher price increases, partially offset by lower surcharges, lower volumes and lower recycled commodities. Pricing growth was 9.0%, with core pricing up 9.5%, offset by materials and environmental surcharges of 0.5%.
Adjusted free cash flow, a non-GAAP financial measure (refer to page 72 of this Annual Report on Form 10-K for a definition and reconciliation to Net cash provided by operating activities), increased by $155 million to $1.165 billion in 2022, from $1.010 billion in 2021.
Adjusted free cash flow, a non-GAAP financial measure (refer to page 74 of this Annual Report on Form 10-K for a definition and reconciliation to Net cash provided by operating activities), increased by $59.3 million to $1.224 billion in 2023, from $1.165 billion in 2022.
The estimated final capping, closure and post-closure expenditures presented above are in current dollars. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Commitment Expiration Per Period ​ ​ (amounts in thousands of U.S. dollars) ​ ​ ​ ​ ​ Less Than ​ 1 to 3 ​ 3 to 5 ​ Over 5 Unrecorded Obligations (1) Total 1 Year Years Years Years Unconditional purchase obligations ​ $ 184,918 ​ $ 149,858 ​ $ 35,060 ​ $ — ​ $ — (1) We are party to unconditional purchase obligations as discussed in Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
The estimated final capping, closure and post-closure expenditures presented above are in current dollars. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Commitment Expiration Per Period ​ ​ (amounts in thousands of U.S. dollars) ​ ​ ​ ​ ​ Less Than ​ 1 to 3 ​ 3 to 5 ​ Over 5 Unrecorded Obligations (1) Total 1 Year Years Years Years Unconditional purchase obligations ​ $ 175,743 ​ $ 139,459 ​ $ 34,576 ​ $ 1,242 ​ $ 466 (1) We are party to unconditional purchase obligations as discussed in Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Operating Results Revenues in 2022 increased 17.2% to $7.212 billion from $6.151 billion in 2021. Acquisitions closed during, or subsequent to, the prior year, net of divestitures, accounted for $552.0 million in incremental revenues in 2022. Excluding the impact of such acquisitions, revenues increased 8.3% due predominantly to higher internal growth in solid waste.
Operating Results Revenues in 2023 increased 11.2% to $8.022 billion from $7.212 billion in 2022. Acquisitions closed during, or subsequent to the prior year, net of divestitures, accounted for $407.3 million in incremental revenues in 2023. Excluding the impact of such acquisitions, revenues increased 5.6% due predominantly to higher internal growth in solid waste.
In 2022, adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP financial measure (refer to page 73 of this Annual Report on Form 10-K for a definition and reconciliation to Net income attributable to Waste Connections), increased 15.7% to $2.221 billion, from $1.919 billion in 2021.
In 2023, adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP financial measure (refer to page 75 of this Annual Report on Form 10-K for a definition and reconciliation to Net income attributable to Waste Connections), increased 13.6% to $2.523 billion, from $2.221 billion in 2022.
The increase was primarily the result of $369.4 million of additional operating costs from acquisitions closed during, or subsequent to, the year ended December 31, 2021 and an increase in operating costs at our existing operations of $337.8 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $16.9 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $8.4 million from operations divested subsequent to the year ended December 31, 2021.
The increase was primarily the result of $241.0 million of additional operating costs from acquisitions closed during, or subsequent to, the year ended December 31, 2022, and an increase in operating costs at our existing operations of $187.1 million, assuming foreign currency parity, partially offset by a decrease in operating costs of $17.7 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $1.9 million from operations divested during, or subsequent to, the year ended December 31, 2022.
Cost of operations as a percentage of revenues increased 0.7 percentage points to 60.1% for the year ended December 31, 2022, from 59.4% for the year ended December 31, 2021.
Cost of operations as a percentage of revenues decreased 1.0 percentage points to 59.1% for the year ended December 31, 2023, from 60.1% for the year ended December 31, 2022.
The increase was comprised of an increase of $45.8 million, assuming foreign currency parity, at our existing operations and $42.3 million from acquisitions closed during, or subsequent to, the year ended December 31, 2021, partially offset by a decrease of $2.8 million resulting from a lower average foreign currency exchange rate in effect during the current period and a decrease of $1.1 million from operations divested subsequent to the year ended December 31, 2021.
The increase was comprised of an increase of $76.6 million, assuming foreign currency parity, at our existing operations and $28.9 million from acquisitions closed during, or subsequent to, the year ended December 31, 2022, partially offset by a decrease of $2.9 million resulting from a lower average foreign currency exchange rate in effect during the current period.
Advances are available under the Credit Agreement in U.S. dollars and Canadian dollars and bear interest at fluctuating rates (See Note 11). At December 31, 2022, $391.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S. Term SOFR rate loans, bearing interest at a total rate of 5.42% on such date.
Advances are available under the Credit Agreement in U.S. dollars and Canadian dollars and bear interest at fluctuating rates (See Note 11). At December 31, 2023, $240.0 million of the outstanding borrowings drawn under the revolving credit facility were in U.S. Term SOFR rate loans, bearing interest at a total rate ranging from 6.46% to 6.50% on such date.
Operations that were divested in 2022 and the full year impact of operations that were divested in 2021, decreased revenues by $11.1 million for the year ended December 31, 2022.
Operations that were divested in 2023 and the full year impact of operations that were divested in 2022, decreased revenues by $3.6 million for the year ended December 31, 2023.
We used substantially all of the proceeds of borrowings under the Term Loan Agreement to repay revolving borrowings under the Credit Agreement. Amounts borrowed under the Term Loan Agreement and repaid or prepaid may not be reborrowed.
We used substantially all of the proceeds of borrowings under the Term Loan Agreement to repay revolving borrowings under the Credit Agreement. Amounts borrowed under the Term Loan Agreement and repaid or prepaid may not be reborrowed. The Term Loan Agreement has a scheduled maturity date of July 30, 2026.
Our adjusted free cash flow for the years ended December 31, 2022, 2021 and 2020, are calculated as follows (amounts in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2022 2021 2020 Net cash provided by operating activities ​ $ 2,022,492 ​ $ 1,698,229 ​ $ 1,408,521 Plus (less): Change in book overdraft ​ (1,076) ​ (367) ​ 1,096 Plus: Proceeds from disposal of assets ​ 30,676 ​ 42,768 ​ 19,084 Less: Capital expenditures for property and equipment ​ (912,677) ​ (744,315) ​ (597,053) Adjustments: ​ ​ ​ ​ ​ ​ Payment of contingent consideration recorded in earnings (a) ​ 2,982 ​ 520 ​ 10,371 Cash received for divestitures (b) ​ (5,671) ​ (17,118) ​ (10,673) Transaction-related expenses (c) ​ 30,825 ​ 30,771 ​ 9,803 Pre-existing Progressive Waste share-based grants (d) ​ 286 ​ 397 ​ 5,770 Tax effect (e) ​ (2,993) ​ (1,287) ​ (5,021) Adjusted free cash flow ​ $ 1,164,844 ​ $ 1,009,598 ​ $ 841,898 (a) Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of cash flows from operating activities as the amounts paid exceeded the fair value of the contingent consideration recorded at the acquisition date.
Our adjusted free cash flow for the years ended December 31, 2023, 2022 and 2021, are calculated as follows (amounts in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 2021 Net cash provided by operating activities $ 2,126,817 ​ $ 2,022,492 ​ $ 1,698,229 Less: Change in book overdraft (790) ​ (1,076) ​ (367) Plus: Proceeds from disposal of assets 31,581 ​ 30,676 ​ 42,768 Less: Capital expenditures for property and equipment (934,000) ​ (912,677) ​ (744,315) Adjustments: ​ ​ ​ ​ ​ Payment of contingent consideration recorded in earnings (a) — ​ 2,982 ​ 520 Cash received for divestitures (b) (6,194) ​ (5,671) ​ (17,118) Transaction-related expenses (c) 5,519 ​ 30,825 ​ 30,771 Executive separation costs (d) 1,686 ​ — ​ — Pre-existing Progressive Waste share-based grants (e) 1,285 ​ 286 ​ 397 Tax effect (f) (1,772) ​ (2,993) ​ (1,287) Adjusted free cash flow $ 1,224,132 ​ $ 1,164,844 ​ $ 1,009,598 (a) Reflects the addback of acquisition-related payments for contingent consideration that were recorded as expenses in earnings and as a component of cash flows from operating activities as the amounts paid exceeded the fair value of the contingent consideration recorded at the acquisition date.
At December 31, 2022, $223.7 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, bearing interest at a total rate of 5.74% on such date. 2) $650.0 million in principal payments due July 2026 related to our term loan under our Credit Agreement.
At December 31, 2023, $170.1 million of the outstanding borrowings drawn under the revolving credit facility were in Canadian-based bankers’ acceptances, bearing interest at a total rate ranging from 6.40% to 6.46% on such date. 2) $650.0 million in principal payments due July 2026 related to our term loan under our Credit Agreement.
Financing Activities Cash Flows Net cash provided by financing activities increased $1.528 billion to $1.028 billion for the year ended December 31, 2022, from net cash used in financing activities of $499.5 million for the year ended December 31, 2021.
Financing Activities Cash Flows Net cash used in financing activities increased $1.573 billion to $544.4 million for the year ended December 31, 2023, from net cash provided by financing activities of $1.028 billion for the year ended December 31, 2022.
Interest is accreted on the recorded liability using the corresponding discount rate. The accounting methods discussed below require us to make certain estimates and assumptions. Changes to these estimates and assumptions, including as a result of inflation, could have a material effect on our financial condition and results of operations. Any changes to our estimates are applied prospectively.
The accounting methods discussed below require us to make certain estimates and assumptions. Changes to these estimates and assumptions, including as a result of inflation, could have a material effect on our financial condition and results of operations. Any changes to our estimates are applied prospectively. Landfill development costs .
The following table disaggregates our revenue by service line for the periods indicated (in thousands of U.S. dollars). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2022 ​ 2021 ​ 2020 Commercial $ 2,176,295 $ 1,813,426 $ 1,610,313 Residential ​ 1,891,108 ​ 1,673,819 ​ 1,528,217 Industrial and construction roll off ​ 1,183,624 ​ 954,181 ​ 833,148 Total collection ​ 5,251,027 ​ 4,441,426 ​ 3,971,678 Landfill ​ 1,328,942 ​ 1,233,499 ​ 1,146,732 Transfer ​ 1,026,050 ​ 859,113 ​ 777,754 Recycling ​ 204,876 ​ 205,076 ​ 86,389 E&P ​ 210,562 ​ 138,707 ​ 159,438 Intermodal and other ​ 188,471 ​ 152,194 ​ 118,396 Intercompany ​ (998,069) ​ (878,654) ​ (814,397) Total ​ $ 7,211,859 ​ $ 6,151,361 ​ $ 5,445,990 ​ Cost of operations includes labor and benefits, tipping fees paid to third-party disposal facilities, vehicle and equipment maintenance, workers’ compensation, vehicle and equipment insurance, insurance and employee group health claims expense, third-party transportation expense, fuel, the cost of materials we purchase for recycling, district and state taxes and host community fees and royalties.
The following table disaggregates our revenue by service line for the periods indicated (in thousands of U.S. dollars). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Commercial $ 2,476,891 $ 2,176,295 $ 1,813,426 Residential ​ 2,125,068 ​ 1,891,108 ​ 1,673,819 Industrial and construction roll off ​ 1,333,020 ​ 1,183,624 ​ 954,181 Total collection ​ 5,934,979 ​ 5,251,027 ​ 4,441,426 Landfill ​ 1,483,397 ​ 1,328,942 ​ 1,233,499 Transfer ​ 1,198,385 ​ 1,026,050 ​ 859,113 Recycling ​ 147,039 ​ 204,876 ​ 205,076 E&P ​ 232,211 ​ 210,562 ​ 138,707 Intermodal and other ​ 171,721 ​ 188,471 ​ 152,194 Intercompany ​ (1,145,781) ​ (998,069) ​ (878,654) Total ​ $ 8,021,951 ​ $ 7,211,859 ​ $ 6,151,361 ​ Cost of operations includes labor and benefits, tipping fees paid to third-party disposal facilities, vehicle and equipment maintenance, workers’ compensation, vehicle and equipment insurance, insurance and employee group health claims expense, third-party transportation expense, fuel, the cost of materials we purchase for recycling, district and state taxes and host community fees and royalties.
On March 13, 2020, we completed an underwritten public offering of $500.0 million aggregate principal amount of 3.05% Senior Notes due April 1, 2050 (the “2050 Senior Notes”). The 2050 Senior Notes were issued under the Indenture, as supplemented through the Fourth Supplemental Indenture, dated as of March 13, 2020.
On March 13, 2020, we completed an underwritten public offering of $500.0 million aggregate principal amount of 3.05% Senior Notes due April 1, 2050 (the “2050 Senior Notes”).
Examples of such events or circumstances include, but are not limited to, the following: ● a significant adverse change in legal factors or in the business climate; ● an adverse action or assessment by a regulator; ● a more likely than not expectation that a segment or a significant portion thereof will be sold; ● the testing for recoverability of a significant asset group within a segment; or ● current period or expected future operating cash flow losses.
Examples of such events or circumstances include, but are not limited to, the following: ● a significant adverse change in legal factors or in the business climate; ● an adverse action or assessment by a regulator; ● a more likely than not expectation that a segment or a significant portion thereof will be sold; ● the testing for recoverability of a significant asset group within a segment; or ● current period or expected future operating cash flow losses. 55 Table of Contents As part of our goodwill impairment test, we estimate the fair value of each of our reporting units using discounted cash flow analyses.
As of December 31, 2022, $650.0 million under the term loan and $614.7 million under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $41.8 million. We also had $85.3 million of letters of credit issued and outstanding at December 31, 2022 under a facility other than the Credit Agreement.
As of December 31, 2023, $650.0 million under the term loan and $453.2 million under the revolving credit facility were outstanding under the Credit Agreement, exclusive of outstanding standby letters of credit of $39.7 million. We also had $102.2 million of letters of credit issued and outstanding at December 31, 2023 under a facility other than the Credit Agreement.
Our adjusted EBITDA for the years ended December 31, 2022, 2021 and 2020, are calculated as follows (amounts in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2022 2021 2020 Net income attributable to Waste Connections ​ $ 835,662 ​ $ 618,047 ​ $ 204,677 Plus (less): Net income (loss) attributable to noncontrolling interests ​ 339 ​ 442 ​ (685) Plus: Income tax provision ​ 212,962 ​ 152,253 ​ 49,922 Plus: Interest expense ​ 202,331 ​ 162,796 ​ 162,375 Less: Interest income ​ (5,950) ​ (2,916) ​ (5,253) Plus: Depreciation and amortization ​ 918,960 ​ 813,009 ​ 752,404 Plus: Closure and post-closure accretion ​ 16,253 ​ 14,497 ​ 15,095 Plus: Impairments and other operating items ​ 18,230 ​ 32,316 ​ 466,718 Plus (less): Other expense (income), net ​ (3,154) ​ (6,285) ​ 1,392 Plus: Loss on early extinguishment of debt ​ ​ — ​ ​ 115,288 ​ ​ — Adjustments: ​ ​ ​ ​ ​ ​ Plus: Transaction-related expenses (a) ​ 24,933 ​ 11,318 ​ 9,803 Plus: Fair value changes to equity awards (b) ​ 86 ​ 8,393 ​ 5,536 Adjusted EBITDA ​ $ 2,220,652 ​ $ 1,919,158 ​ $ 1,661,984 (a) Reflects the addback of acquisition-related transaction costs.
Our adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021, are calculated as follows (amounts in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 2021 Net income attributable to Waste Connections $ 762,800 ​ $ 835,662 ​ $ 618,047 Plus: Net income attributable to noncontrolling interests 26 ​ 339 ​ 442 Plus: Income tax provision 220,675 ​ 212,962 ​ 152,253 Plus: Interest expense 274,642 ​ 202,331 ​ 162,796 Less: Interest income (9,350) ​ (5,950) ​ (2,916) Plus: Depreciation and amortization 1,003,211 ​ 918,960 ​ 813,009 Plus: Closure and post-closure accretion 19,605 ​ 16,253 ​ 14,497 Plus: Impairments and other operating items 238,796 ​ 18,230 ​ 32,316 Less: Other income, net (12,481) ​ (3,154) ​ (6,285) Plus: Loss on early extinguishment of debt ​ — ​ ​ — ​ ​ 115,288 Adjustments: ​ ​ ​ ​ ​ Plus: Transaction-related expenses (a) 10,653 ​ 24,933 ​ 11,318 Plus (less): Fair value changes to equity awards (b) (1,726) ​ 86 ​ 8,393 Plus: Executive separation costs (c) 16,105 ​ — ​ — Adjusted EBITDA $ 2,522,956 ​ $ 2,220,652 ​ $ 1,919,158 (a) Reflects the addback of acquisition-related transaction costs.
Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the years ended December 31, 2022, 2021 and 2020, are calculated as follows (amounts in thousands of U.S. dollars, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2022 2021 2020 Reported net income attributable to Waste Connections ​ $ 835,662 ​ $ 618,047 ​ $ 204,677 Adjustments: ​ ​ ​ ​ ​ ​ Amortization of intangibles (a) ​ 155,675 ​ 139,279 ​ 131,302 Impairments and other operating items (b) ​ 18,230 ​ 32,316 ​ 466,718 Transaction-related expenses (c) ​ 24,933 ​ 11,318 ​ 9,803 Fair value changes to equity awards (d) ​ 86 ​ 8,393 ​ 5,536 Loss on early extinguishment of debt (e) ​ ​ — ​ ​ 115,288 ​ ​ — Tax effect (f) ​ (49,312) ​ (78,041) ​ (153,758) Tax items (g) ​ — ​ — ​ 31,508 Adjusted net income attributable to Waste Connections ​ $ 985,274 ​ $ 846,600 ​ $ 695,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share attributable to Waste Connections’ common shareholders: ​ ​ ​ Reported net income ​ $ 3.24 ​ $ 2.36 ​ $ 0.78 Adjusted net income ​ $ 3.82 ​ $ 3.23 ​ $ 2.64 (a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.
Our adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections for the years ended December 31, 2023, 2022 and 2021, are calculated as follows (amounts in thousands of U.S. dollars, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 2021 Reported net income attributable to Waste Connections $ 762,800 ​ $ 835,662 ​ $ 618,047 Adjustments: ​ ​ ​ ​ ​ Amortization of intangibles (a) 157,573 ​ 155,675 ​ 139,279 Impairments and other operating items (b) 238,796 ​ 18,230 ​ 32,316 Transaction-related expenses (c) 10,653 ​ 24,933 ​ 11,318 Fair value changes to equity awards (d) (1,726) ​ 86 ​ 8,393 Loss on early extinguishment of debt (e) ​ — ​ ​ — ​ ​ 115,288 Executive separation costs (f) 16,105 ​ — ​ — Tax effect (g) (102,948) ​ (49,312) ​ (78,041) Adjusted net income attributable to Waste Connections $ 1,081,253 ​ $ 985,274 ​ $ 846,600 ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share attributable to Waste Connections’ common shareholders: ​ ​ Reported net income $ 2.95 ​ $ 3.24 ​ $ 2.36 Adjusted net income $ 4.19 ​ $ 3.82 ​ $ 3.23 (a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets.
The increase in operating income as a percentage of revenues was comprised of a 0.3 percentage point decrease in impairments and other operating items, a 0.3 percentage point decrease in depreciation expense, a 0.3 percentage point decrease in SG&A expense and a 0.1 percentage point decrease in amortization expense, partially offset by a 0.7 percentage point increase in cost of operations.
The decrease as a percentage of revenues was comprised of a 2.8 percentage point increase in impairments and other operating items and a 0.3 percentage point increase in SG&A 61 Table of Contents expenses, partially offset by a 1.0 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 depreciation expense.
Investing Activities Cash Flows Net cash used in investing activities increased $1.394 billion to $3.087 billion for the year ended December 31, 2022, from $1.693 billion for the year ended December 31, 2021.
Investing Activities Cash Flows Net cash used in investing activities decreased $1.506 billion to $1.581 billion for the year ended December 31, 2023, from $3.087 billion for the year ended December 31, 2022.
Our financing leases bear interest at rates between 1.89% and 2.16% at December 31, 2022, and have expiration dates ranging from 2026 to 2027.
Our financing leases bear interest at rates between 1.89% and 5.07% at December 31, 2023, and have expiration dates ranging from 2026 to 2029.
The increase for the year ended December 31, 2022 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at December 31, 2022, the timing of processing year-end payments to vendors for capital expenditures and increased accrued interest due to the timing of interest payments for our senior unsecured notes issued subsequent to December 31, 2021, partially offset by the payment of deferred payroll taxes.
The increase for the year ended December 31, 2022 was due primarily to increases in operating expenses during the period which remained as outstanding obligations at December 31, 2022, the timing of processing year-end payments to vendors for capital expenditures and increased accrued interest due to the timing of interest payments for our senior unsecured notes issued subsequent to December 31, 2021, partially offset by the payment of deferred payroll taxes. 5) Deferred income taxes — Our increase in net cash provided by operating activities was unfavorably impacted by $87.2 million from deferred income taxes as changes in deferred income taxes resulted in an increase to operating cash flows of $6.3 million for the year ended December 31, 2023, compared to an increase to operating cash flows of $93.5 million for the year ended December 31, 2022.
As a percentage of revenue, adjusted EBITDA decreased from 31.2% in 2021, to 30.8% in 2022.
As a percentage of revenue, adjusted EBITDA increased from 30.8% in 2022, to 31.5% in 2023.
Income taxes increased $60.7 million, to $213.0 million for the year ended December 31, 2022, from $152.3 million for the year ended December 31, 2021. Our effective tax rate for the year ended December 31, 2022 was 20.3%. Our effective tax rate for the year ended December 31, 2021 was 19.8%.
Income Tax Provision . Income taxes increased $7.7 million, to $220.7 million for the year ended December 31, 2023, from $213.0 million for the year ended December 31, 2022. Our effective tax rate for the year ended December 31, 2023 was 22.4%. Our effective tax rate for the year ended December 31, 2022 was 20.3%.
Interest Income . Interest income increased $3.1 million to $6.0 million for the year ended December 31, 2022, from $2.9 million for the year ended December 31, 2021. The increase was primarily attributable to higher reinvestment rates, partially offset by lower average cash balances in the current period. Other Income, Net .
Interest Income . Interest income increased $3.4 million to $9.4 million for the year ended December 31, 2023, from $6.0 million for the year ended December 31, 2022. The increase was primarily attributable to higher average investment rates in the current period. Other Income, Net .
The decrease for the years ended December 31, 2022 and 2021 was due to increases in revenues, which remained as outstanding receivables at year end. 7) Other long-term liabilities – Our increase in net cash provided by operating activities was unfavorably impacted by $14.7 million from other long-term liabilities as changes in other long-term liabilities resulted in a decrease to operating cash flows of $14.0 million for the year ended December 31, 2022, compared to an increase to operating cash flows of $0.7 million for the year ended December 31, 2021.
The decreases for the years ended December 31, 2023 and 2022 were due to increases in revenue, which remained as outstanding receivables at the end of the period. 3) Prepaid expenses — Our increase in net cash provided by operating activities was favorably impacted by $11.0 million from prepaid expenses as changes in prepaid expenses resulted in an increase to operating cash flows of $10.3 million for the year ended December 31, 2023, compared to a decrease to operating cash flows of $0.7 million for the year ended December 31, 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−1 removed12 unchanged
Biggest changeAt December 31, 2022, our derivative instruments included five interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Variable ​ ​ ​ ​ Notional ​ Interest ​ Interest Rate ​ ​ ​ ​ Date Entered (b) ​ Amount ​ Rate Paid (a) ​ Received ​ Effective Date ​ Expiration Date August 2017 ​ $ 200,000 2.1230 % 1-month Term SOFR November 2022 October 2025 August 2017 ​ $ 150,000 1.7720 % 1-month Term SOFR November 2022 February 2023 June 2018 ​ $ 200,000 2.8480 % 1-month Term SOFR November 2022 October 2025 June 2018 ​ $ 200,000 2.8284 % 1-month Term SOFR November 2022 October 2025 December 2018 ​ $ 200,000 2.7715 % 1-month Term SOFR November 2022 July 2027 (a) Plus applicable margin.
Biggest changeAt December 31, 2023, our derivative instruments included four interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands of U.S. dollars): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Variable ​ ​ ​ ​ Notional ​ Interest ​ Interest Rate ​ ​ ​ ​ Date Entered ​ Amount ​ Rate Paid (a) ​ Received ​ Effective Date (b) ​ Expiration Date August 2017 ​ $ 200,000 2.1230 % 1-month Term SOFR November 2022 October 2025 June 2018 ​ $ 200,000 2.8480 % 1-month Term SOFR November 2022 October 2025 June 2018 ​ $ 200,000 2.8284 % 1-month Term SOFR November 2022 October 2025 December 2018 ​ $ 200,000 2.7715 % 1-month Term SOFR November 2022 July 2027 (a) Plus applicable margin.
Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements.
Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements.
At December 31, 2022, we had no fuel hedge agreements in place; however, we have entered into fixed price diesel fuel purchase contracts for 2023 as described below.
At December 31, 2023, we had no fuel hedge agreements in place; however, we have entered into fixed price diesel fuel purchase contracts for 2023 as described below.
We have operations in Canada and, where significant, we have quantified and described the impact of foreign currency translation on components of income, including operating revenue and operating costs. However, the impact of foreign currency has not materially affected our results of operations in 2022 or 2021.
We have operations in Canada and, where significant, we have quantified and described the impact of foreign currency translation on components of income, including operating revenue and operating costs. However, the impact of foreign currency has not materially affected our results of operations in 2023 or 2022.
All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above; therefore, changes in market interest rates under these instruments would not significantly impact our cash flows or results of operations, subject to counterparty default risk. The market price of diesel fuel is unpredictable and can fluctuate significantly.
All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above; therefore, changes in market interest rates under these instruments would not significantly impact our cash flows or results of operations, subject to counterparty default risk. 77 Table of Contents The market price of diesel fuel is unpredictable and can fluctuate significantly.
A $0.01 change in the Canadian dollar to U.S. dollar exchange rate would impact our annual revenue and EBITDA by approximately $13.0 million and $5.0 million, respectively. ​ 76 Table of Contents
A $0.01 change in the Canadian dollar to U.S. dollar exchange rate would impact our annual revenue and EBITDA by approximately $13.0 million and $5.0 million, respectively. ​ 78 Table of Contents
A one percentage point increase in interest rates on our variable-rate debt as of December 31, 2022 and 2021, would decrease our annual pre-tax income by approximately $11.1 million and $6.0 million, respectively.
A one percentage point increase in interest rates on our variable-rate debt as of December 31, 2023 and 2022, would decrease our annual pre-tax income by approximately $11.0 million and $11.1 million, respectively.
In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the years ended December 31, 2022 and 2021, would have had a $19.7 million and $19.6 million impact on revenues for the years ended December 31, 2022 and 2021, respectively.
In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the years ended December 31, 2023 and 2022, would have had a $14.3 million and $19.7 million impact on revenues for the years ended December 31, 2023 and 2022, respectively.
We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at December 31, 2022 and 2021, of $1.115 billion and $603.9 million, respectively, including floating rate 75 Table of Contents debt under our Credit Agreement and Term Loan Agreement.
We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at December 31, 2023 and 2022, of $1.099 billion and $1.115 billion, respectively, including floating rate debt under our Credit Agreement and Term Loan Agreement.
With respect to the approximately 47.1 million gallons of unhedged diesel fuel we expect to purchase in 2023 at market prices, a $0.10 per gallon increase in the price of diesel fuel over the year would decrease our pre-tax income during this period by approximately $4.7 million.
With respect to the approximately 50.2 million gallons of unhedged diesel fuel we expect to purchase in 2024 at market prices, a $0.10 per gallon increase in the price of diesel fuel over the year would decrease our pre-tax income during this period by approximately $5.0 million.
For the year ending December 31, 2023, we expect to purchase approximately 89.2 million gallons of diesel fuel, of which 47.1 million gallons will be purchased at market prices and 42.1 million gallons will be purchased under our fixed price diesel fuel purchase contracts.
For the year ending December 31, 2024, we expect to purchase approximately 89.5 million gallons of diesel fuel, of which 50.2 million gallons will be purchased at market prices and 39.3 million gallons will be purchased under our fixed price diesel fuel purchase contracts.
Removed
On September 28, 2020, we terminated four of our interest rate swaps with notional amounts totaling $400.0 million, which would have expired in January 2021. As a result of terminating these interest rate swaps, we made total cash payments of $0.9 million to the counterparties of the swap agreements.

Other WCN 10-K year-over-year comparisons