CASELLA WASTE SYSTEMS, INC. The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included under Item 1. In addition, reference should be made to our audited consolidated financial statements and notes thereto and related Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 filed with theSecurities and Exchange Commission ("SEC") onFebruary 19, 2021 . This Quarterly Report on Form 10-Q and, in particular, this Management's Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, including statements regarding: •the projected development of additional disposal capacity or expectations regarding permits for existing capacity; •the outcome of any legal or regulatory matter; •the expected and potential direct or indirect impacts of the novel coronavirus ("COVID-19") pandemic on our business; •expected liquidity and financing plans; •expected future revenues, operations, expenditures and cash needs; •fluctuations in commodity pricing of our recyclables, increases in landfill tipping fees and fuel costs and general economic and weather conditions; •projected future obligations related to final capping, closure and post-closure costs of our existing landfills and any disposal facilities which we may own or operate in the future; •our ability to use our net operating losses and tax positions; •our ability to service our debt obligations; •the recoverability or impairment of any of our assets or goodwill; •estimates of the potential markets for our products and services, including the anticipated drivers for future growth; •sales and marketing plans or price and volume assumptions; •potential business combinations or divestitures; and •projected improvements to our infrastructure and the impact of such improvements on our business and operations. In addition, any statements contained in or incorporated by reference into this report that are not statements of historical fact should be considered forward-looking statements. You can identify these forward-looking statements by the use of the words "believes", "expects", "anticipates", "plans", "may", "will", "would", "intends", "estimates" and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate, as well as management's beliefs and assumptions, and should be read in conjunction with our consolidated financial statements and notes thereto. These forward-looking statements are not guarantees of future performance, circumstances or events. The occurrence of the events described and the achievement of the expected results depends on many events, some or all of which are not predictable or within our control. Actual results may differ materially from those set forth in the forward-looking statements. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by such forward-looking statements. These risks and uncertainties include, without limitation, those detailed in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 . There may be additional risks that we are not presently aware of or that we currently believe are immaterial, which could have an adverse impact on our business. We explicitly disclaim any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as otherwise required by law. 23 -------------------------------------------------------------------------------- Company Overview Founded in 1975 with a single truck,Casella Waste Systems, Inc. , aDelaware corporation and its wholly-owned subsidiaries (collectively, "we", "us" or "our"), is a regional, vertically-integrated solid waste services company. We provide resource management expertise and services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services. We provide integrated solid waste services in six states:Vermont ,New Hampshire ,New York ,Massachusetts ,Maine andPennsylvania , with our headquarters located inRutland, Vermont . We manage our solid waste operations on a geographic basis through two regional operating segments, the Eastern and Western regions, each of which provides a full range of solid waste services. We manage our resource-renewal operations through theResource Solutions operating segment, which includes our larger-scale recycling and commodity brokerage operations along with our organics services and large scale commercial and industrial services. As ofApril 15, 2021 , we owned and/or operated 46 solid waste collection operations, 58 transfer stations, 20 recycling facilities, eight Subtitle D landfills, four landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition ("C&D") materials. Results of Operations Recent Events The global outbreak of the novel coronavirus ("COVID-19") pandemic has caused, and is expected to continue to cause, economic disruption across our geographic footprint and has adversely affected, and is expected to continue to adversely affect, our business. The COVID-19 pandemic negatively impacted our revenues starting at the end of the three months endedMarch 31, 2020 , as many small business and construction collection customers required service level changes and volumes into our landfills declined due to lower economic activity. Although demand for services has improved as local economies begin to reopen as allowed by State Governments, our collection and disposal operations continued to be negatively impacted by lower volumes attributable to the COVID-19 pandemic in the three months endedMarch 31, 2021 . The COVID-19 pandemic has negatively impacted and is expected to continue to impact our business in other ways, as we have experienced and continue to experience increased costs as a result of the COVID-19 pandemic, including, but not limited to, higher costs associated with providing a safe working environment for our employees (such as increased costs associated with the protection of our employees, including costs for additional safety equipment, hygiene products and enhanced facility cleaning), employee impacts from illness, supporting a remote administration workforce, community response measures, the inability of customers to continue to pay for services, and temporary closures of the facilities of our customers. We have taken measures to reduce costs in other areas and preserve liquidity during this period of uncertainty. As of the date of this filing, we are unable to determine or predict the full extent of the continuing impact that the COVID-19 pandemic will have on our business, results of operations, liquidity and capital resources. Future developments, such as the possibility of continuing spread of COVID-19 across our geographic footprint, the rate of vaccinations, the severity and containment of certain COVID-19 variants along with the pace and extent to which the States in which we operate facilitate a return to normal economic and operation conditions are uncertain and cannot be predicted at this time. Revenues We manage our solid waste operations, which include a full range of solid waste services, on a geographic basis through two regional operating segments, which we designate as the Eastern and Western regions. Revenues in our Eastern and Western regions consist primarily of fees charged to customers for solid waste collection and disposal, landfill, landfill gas-to-energy, transfer and recycling services. We derive a substantial portion of our collection revenues from commercial, industrial and municipal services that are generally performed under service agreements or pursuant to contracts with municipalities. The majority of our residential collection services are performed on a subscription basis with individual households. Landfill and transfer customers are charged a tipping fee on a per ton basis for disposing of their solid waste at our disposal facilities and transfer stations. We also generate and sell electricity at certain of our landfill facilities. We manage our resource-renewal operations as either processing or non-processing services in ourResource Solutions operating segment. Revenues from processing services consist of revenues derived from municipalities and customers in the form of processing fees, tipping fees, commodity sales, and organic material sales. Revenues from non-processing services consist of brokerage services; overall resource management services providing a wide range of environmental services and zero waste solutions to large and complex organizations; and traditional collection, disposal and recycling services provided to large account multi-site customers. 24 --------------------------------------------------------------------------------
A summary of revenues attributable to service provided (dollars in millions and as a percentage of total revenues) follows:
Three Months Ended March 31, $
2021 2020 Change
Collection $ 97.5 51.5 % $ 94.6 51.7 % $ 2.9
Disposal 37.9 20.0 % 38.6 21.1 % (0.7)
Power 1.3 0.7 % 1.0 0.5 % 0.3
Processing 1.4 0.7 % 1.1 0.7 % 0.3
Solid waste 138.1 72.9 % 135.3 74.0 % 2.8
Processing 17.2 9.1 % 13.9 7.6 % 3.3
Non-processing 34.2 18.0 % 33.7 18.4 % 0.5
Resource solutions 51.4 27.1 % 47.6 26.0 % 3.8
Total revenues $ 189.5 100.0 % $ 182.9 100.0 % $ 6.6 A summary of the period-to-period change in solid waste revenues (dollars in millions and as percentage growth of solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended
Amount % Growth
Price $ 4.6 3.4 %
Volume (4.4) (3.3) %
Surcharges and other fees (1.6) (1.2) %
Commodity price and volume 0.3 0.2 %
Acquisitions 3.9 2.9 %
Solid waste revenues $ 2.8 2.0 %
Solid waste revenues
Price.
The price change component in quarterly solid waste revenues growth from the
prior year is the result of the following:
•$3.3 million from favorable collection pricing; and
•$1.3 million from favorable disposal pricing associated with our landfills and
transfer stations.
Volume.
The volume change component in quarterly solid waste revenues growth from the
prior year is the result of the following:
•$(2.2) million from lower collection volumes primarily due to the negative
impacts of the COVID-19 pandemic, which began impacting our revenues starting at
the end of the three months ended March 31, 2020 ; and
•$(2.5) million from lower disposal volumes (of which $(1.5) million relates to
lower landfill volumes, $(0.9) million relates to lower transportation volumes
and $(0.1) million relates to lower transfer station volumes, in each case,
primarily due to the negative impacts of the COVID-19 pandemic, which began
impacting our revenues starting at the end of the three months ended March 31,
2020 ); partially offset by
•$0.3 million from higher processing volumes.
Surcharges and other fees.
The surcharges and other fees change component in quarterly solid waste revenues
growth from the prior year is associated with the energy component of the energy
and environmental fee and the sustainability recycling adjustment fee. The
energy component of the energy and environmental fee floats on a monthly basis
in conjunction with diesel fuel prices. The sustainability recycling adjustment
fee floats on a monthly basis conversely with recycled commodity prices.
25
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Commodity price and volume.
The commodity price and volume change component in quarterly solid waste
revenues growth from the prior year is the result of the following:
•$0.3 million from favorable commodity and energy pricing; and
•$0.1 million due to higher landfill gas-to-energy volumes; partially offset by
•$(0.1) million due to lower commodity processing volumes.
Acquisitions.
The acquisitions change component in quarterly solid waste revenues growth from
the prior year is the result of the following:
•the acquisition of one tuck-in solid waste collection business in our Western
region; and
•the acquisition of seven tuck-in solid waste collection businesses and a solid
waste collection business in our Western region.
Resource Solutions revenues
The change component in quarterly resource solutions revenues growth of $3.8
million from the prior year is the result of the following:
•$3.2 million from the favorable impact of commodity pricing in the marketplace
(not including the impact of lower intercompany tipping fees); and
•$0.5 million from higher non-processing revenues primarily due to higher
volumes; and
•$0.1 million from higher processing volumes driven by higher recycling
commodity volumes.
Operating Expenses
A summary of cost of operations, general and administration expense, and
depreciation and amortization expense (dollars in millions and as a percentage
of total revenues) is as follows:
Three Months Ended March 31, $
2021 2020 Change
Cost of operations $ 127.1 67.1 % $ 128.5 70.3 % $ (1.4)
General and administration $ 27.1 14.3 % $ 24.4 13.3 % $ 2.7
Depreciation and amortization $ 22.7 12.0 % $ 21.4 11.7 % $ 1.3
Cost of Operations
Cost of operations includes labor costs, tipping fees paid to third-party
disposal facilities, fuel costs, maintenance and repair costs of vehicles and
equipment, workers' compensation and vehicle insurance costs, third-party
transportation costs, district and state taxes, host community fees, and
royalties. Cost of operations also includes accretion expense related to final
capping, closure and post-closure obligations, leachate treatment and disposal
costs, and depletion of landfill operating lease obligations.
As a percentage of revenues, cost of operations decreased 320 basis points
during the three months ended March 31, 2021 from the same period of the prior
year. The period-to-period change in cost of operations can be primarily
attributed to the following:
Third-party direct costs decreased $(2.2) million quarterly while decreasing 210
basis points as a percentage of revenues due to the following:
•lower hauling and third-party transportation costs associated with lower
organic collection volumes, lower landfill volumes in our Western region, and
lower transfer station volumes in our Eastern region, mainly due to the negative
impacts of the COVID-19 pandemic, which began impacting our revenues starting at
the end of the three months ended March 31, 2020 ; partially offset by higher
hauling and third-party transportation costs associated with higher collection
volumes related to acquisition activity in our Western region; and higher
brokerage volumes in our Resource Solutions operating segment with high pass
through direct costs.
•lower third-party disposal costs associated with internalizing more
non-processing volumes in our Resource Solutions operating segment; and lower
commercial collection, transportation and landfill volumes in our Western region
mainly due to the negative impacts of the COVID-19 pandemic, which began
impacting our revenues starting at the end of the three months ended March 31,
2020 , and to a lesser extent lower organic collection and Western region
landfill volumes due to our focus on pricing.
26
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Direct operational costs decreased $(1.6) million quarterly while decreasing 120
basis points as a percentage of revenues due to lower landfill operating costs
in our Western region on lower landfill volumes, and lower equipment operating
lease expense.
Labor and related benefit costs increased $0.9 million quarterly while remaining
flat as a percentage of revenues due primarily to acquisition activity in the
Western region, higher health insurance costs and higher labor costs due to
increased overtime; partially offset by lower salaries and labor costs within
our Resource Solutions operating segment.
Maintenance and repair costs increased $1.5 million quarterly while increasing
20 basis points as a percentage of revenues due primarily to higher facility
maintenance costs in our Eastern region and higher operation support costs for
our resource renewal operations.
General and Administration
General and administration expense includes management, clerical and
administrative compensation, bad debt expense, as well as overhead costs,
professional service fees and costs associated with marketing, sales force and
community relations efforts.
The period-to-period change in general and administration expense can be
primarily attributed to higher equity compensation costs and higher accrued
incentive compensation on improved performance; partially offset by lower bad
debt expense attributed to the timing of the COVID-19 pandemic, which resulted
in a large increase in the allowance for credit losses as of March 31, 2020 .
Depreciation and Amortization
Depreciation and amortization expense includes: (i) depreciation of property and
equipment (including assets recorded for finance leases) on a straight-line
basis over the estimated useful lives of the assets; (ii) amortization of
landfill costs (including those costs incurred and all estimated future costs
for landfill development and construction, along with asset retirement costs
arising from closure and post-closure obligations) on a units-of-consumption
method as landfill airspace is consumed over the total estimated remaining
capacity of a site, which includes both permitted capacity and unpermitted
expansion capacity that meets certain criteria for amortization purposes, and
amortization of landfill asset retirement costs arising from final capping
obligations on a units-of-consumption method as airspace is consumed over the
estimated capacity associated with each final capping event; and
(iii) amortization of intangible assets with a definite life, using either an
economic benefit provided approach or on a straight-line basis over the
definitive terms of the related agreements.
A summary of the components of depreciation and amortization expense (dollars in
millions and as a percentage of total revenues) follows:
Three Months Ended March 31, $
2021 2020 Change
Depreciation $ 14.3 7.5 % $ 12.9 7.0 % $ 1.4
Landfill amortization 6.4 3.4 % 6.4 3.5 % -
Other amortization 2.0 1.1 % 2.1 1.1 % (0.1)
$ 22.7 12.0 % $ 21.4 11.6 % $ 1.3
The period-to-period change in depreciation and amortization expense can be
primarily attributed to increased investment in our fleet and acquisition
activity. Landfill amortization expense remained flat as higher amortization
associated with changes in cost estimates and other assumptions was offset by
lower landfill volumes mainly associated with the negative impacts of the
COVID-19 pandemic.
Expense from Acquisition Activities
In the three months ended March 31, 2021 and 2020, we recorded charges of $0.4
million and $1.0 million , respectively, comprised primarily of legal, consulting
and other similar costs associated with the acquisition and integration of
acquired businesses or select development projects.
Southbridge Landfill Closure Charge
In 2017, we initiated the plan to cease operations of the Southbridge Landfill
and later closed it in November 2018 when Southbridge Landfill reached its final
capacity. Accordingly, in the three months ended March 31, 2021 and 2020, we
recorded charges of $0.2 million and $0.6 million , respectively, associated with
legal and other costs pertaining to various matters as part of the unplanned
early closure of the Southbridge Landfill through completion of the closure
process.
Other Expenses
27
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Interest Expense, net
Our interest expense, net decreased $(0.5) million quarterly due primarily to
lower average interest rates associated with changes in LIBOR.
Provision for Income Taxes
Our provision for income taxes increased $2.3 million as compared to the same
period in the prior year. The provision for the three months ended March 31,
2021 includes $0.1 million of current income taxes and $2.3 million of deferred
income taxes. For the three months ended March 31, 2020 , the provision includes
a $(0.9) million current income tax benefit and $1.0 million of deferred income
taxes. The effective rate for the three months ended March 31, 2021 is 31%,
before adjustment for the one-time adjustments primarily related to accumulated
other comprehensive losses, and is computed based on the statutory rate of 21%
adjusted primarily for state taxes and nondeductible officer compensation.
An increase of $1.3 million in the deferred tax provision between the periods
relates to the release of a significant portion of our valuation allowance in
the fourth quarter ended December 31, 2020 . On a periodic basis, we reassess the
valuation allowance on our deferred income tax assets, weighing positive and
negative evidence to assess the recoverability of the deferred tax assets. In
the fourth quarter ended December 31, 2020 , we assessed the valuation allowance
and considered positive evidence, including significant cumulative consolidated
income over the three years ended December 31, 2020 , revenue growth and
expectations of future profitability, and negative evidence, including the
impact of a negative change in the economic climate, significant risks and
uncertainties in the business and restrictions on tax loss utilization in
certain state jurisdictions. After assessing both the positive evidence and the
negative evidence, we determined it was more likely than not that the majority
of our deferred tax assets would be realized in the future and released the
valuation allowance on the majority of our net operating loss carryforwards and
other deferred tax assets as of December 31, 2020 , resulting in a benefit from
income taxes of $61.3 million . We continues to maintain a valuation allowance
related to deferred tax assets that would generate capital losses when realized
and deferred tax assets related to certain state jurisdictions.
On March 27, 2020 , the Coronavirus Aid, Relief, and Economic Security Act (the
"CARES Act") was enacted which, among other things, allows the carryback of
remaining minimum tax credit carryforwards to tax year 2018. Prior to the CARES
Act, the minimum tax credit carryforwards were fully refunded through tax year
2021, if not otherwise used to offset tax liabilities. A current income tax
benefit of $(1.0) million , offset by a $1.0 million deferred tax provision, was
recognized in the three months ended March 31, 2020 for the remaining minimum
tax credit carried back to tax year 2018.
On December 22, 2017 , the Tax Cuts and Jobs Act (the "TCJ Act") was enacted. The
TCJ Act significantly changed U.S. corporate income tax laws by, among other
things, changing carryforward rules for net operating losses. Our $92.5 million
in federal net operating loss carryforwards generated as of the end of 2017
continue to be carried forward for 20 years and are expected to be available to
fully offset taxable income earned in 2021 and future tax years. Federal net
operating losses generated after 2017, totaling $46.5 million carried forward to
2021, will be carried forward indefinitely, but generally may only offset up to
80% of taxable income earned in a tax year.
Segment Reporting
Revenues
A summary of revenues by reportable operating segment (in millions) follows:
Three Months Ended
March 31, $
2021 2020 Change
Eastern $ 52.3 $ 50.1 $ 2.2
Western 85.8 85.2 0.6
Resource solutions 51.4 47.6 3.8
Total revenues $ 189.5 $ 182.9 $ 6.6
28--------------------------------------------------------------------------------Eastern Region A summary of the period-to-period change in solid waste revenues (dollars in millions and as percentage growth of solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended
Amount % Growth
Price $ 1.9 3.7 %
Volume 1.0 2.1 %
Surcharges and other fees (0.6) (1.2) %
Commodity price and volume (0.1) (0.2) %
Solid waste revenues $ 2.2 4.4 %
Price.
The price change component in quarterly solid waste revenues growth is the
result of the following:
•$1.3 million from favorable collection pricing; and
•$0.6 million from favorable disposal pricing related to transfer stations and
landfills.
Volume.
The volume change component in quarterly solid waste revenues growth is the
result of the following:
•$1.3 million from higher disposal volumes related to landfill volumes,
partially offset by lower transfer station volumes; and
•$0.3 million from higher processing volumes; partially offset by
•$(0.6) million from lower collection volumes mainly due to the negative impacts
of the COVID-19 pandemic, which began impacting our revenues starting at the end
of the three months ended March 31, 2020 .
Surcharges and other fees.
The surcharges and other fees change component in quarterly solid waste revenues
growth from the prior year is associated with the energy component of the energy
and environmental fee and the sustainability recycling adjustment fee. The
energy component of the energy and environmental fee floats on a monthly basis
in conjunction with diesel fuel prices. The sustainability recycling adjustment
fee floats on a monthly basis conversely with recycled commodity prices.
Western Region
A summary of the period-to-period change in solid waste revenues (dollars in
millions and as percentage growth of solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended
Amount % Growth
Price $ 2.7 3.2 %
Volume (5.4) (6.3) %
Surcharges and other fees (1.0) (1.2) %
Commodity price and volume 0.4 0.5 %
Acquisitions 3.9 4.5 %
Solid waste revenues $ 0.6 0.7 %
Price.
The price change component in quarterly solid waste revenues growth is the
result of the following:
•$2.0 million from favorable collection pricing; and
•$0.7 million from favorable disposal pricing related to landfills and transfer
stations.
29
--------------------------------------------------------------------------------Volume.
The volume change component in quarterly solid waste revenues growth is the result of the following: •$(1.6) million from lower collection volumes mainly due to the negative impacts of the COVID-19 pandemic, which began impacting our revenues starting at the end of the three months endedMarch 31, 2020 ; and •$(3.8) million from lower disposal volumes related to landfills and transportation mainly due to the negative impacts of the COVID-19 pandemic, which began impacting our revenues starting at the end of the three months endedMarch 31, 2020 . Surcharges and other fees. The surcharges and other fees change component in quarterly solid waste revenues growth from the prior year is associated with the energy component of the energy and environmental fee and the sustainability recycling adjustment fee. The energy component of the energy and environmental fee floats on a monthly basis in conjunction with diesel fuel prices. The sustainability recycling adjustment fee floats on a monthly basis conversely with recycled commodity prices. Commodity price and volume. The commodity price and volume change component in quarterly solid waste revenues growth is the result of favorable energy and commodity pricing and higher landfill gas-to-energy volumes, partially offset by lower commodity processing volumes. Acquisitions. The acquisitions change component in quarterly solid waste revenues growth is the result of the acquisition of one tuck-in solid waste collection and recycling business in the three months endedMarch 31, 2021 and the acquisition of seven tuck-in solid waste collection businesses and a solid waste collection business during the prior year. Operating Income A summary of operating income (loss) by operating segment (in millions) follows: Three Months Ended March 31, $ 2021 2020 Change Eastern$ 2.2 $ 1.0 $ 1.2 Western 7.8 5.6 2.2 Resource solutions 2.5 1.0 1.5 Corporate entities (0.5) (0.6) 0.1 Operating income$ 12.0 $ 7.0 $ 5.0 Eastern Region Operating results improved$1.2 million quarterly. Excluding the impact of theSouthbridge Landfill closure charge and the expense from acquisition activities, our improved operating performance in the three months endedMarch 31, 2021 was driven by revenue growth more than offsetting the following cost changes: Cost of operations: Cost of operations increased$0.1 million quarterly due to: higher labor and benefit costs due to increased overtime and higher health insurance costs; and higher facility maintenance costs; partially offset by lower hauling and third-party transportation costs associated with lower collection and transfer station volumes, mainly due to the negative impacts of the COVID-19 pandemic, which began impacting our operations at the end of the three months endedMarch 31, 2020 . General and administration: General and administration expense increased$1.2 million quarterly due to higher accrued incentive compensation and higher shared overhead costs associated with improved performance, partially offset by lower bad debt expense attributed to the timing of the COVID-19 pandemic, which resulted in a large increase in the allowance for credit losses as ofMarch 31, 2020 . Depreciation and amortization: Depreciation and amortization expense increased$0.7 million quarterly due to higher depreciation and amortization expense associated with acquisition activity and higher landfill amortization associated with changes in cost estimates and other assumptions.Western Region Operating results improved$2.2 million quarterly. Excluding the impact of the expense from acquisition activities, our improved operating performance in the three months endedMarch 31, 2021 was driven by revenue growth more than offsetting the following cost changes: 30 -------------------------------------------------------------------------------- Cost of operations: Cost of operations increased$0.4 million quarterly due to: higher labor and benefit costs associated with acquisition activity, increased overtime, and higher health insurance costs; higher disposal costs on the internalization of volumes; and higher hauling and third-party transportation costs associated with higher collection volumes related to acquisition activity; partially offset by lower hauling and lower landfill operating costs on lower landfill tons and lower operating lease expense. General and administration: General and administration expense increased$0.9 million quarterly due to higher shared overhead costs associated with improved performance, partially offset by lower bad debt expense attributed to the timing of the COVID-19 pandemic, which resulted in a large increase in the allowance for credit losses as ofMarch 31, 2020 . Depreciation and amortization: Depreciation and amortization expense increased$0.8 million quarterly due primarily to acquisition activity, partially offset by lower landfill amortization on lower landfill volumes mainly associated with the negative impacts of the COVID-19 pandemic, which began impacting our operations at the end of the three months endedMarch 31, 2020 .Resource Solutions Operating results improved$1.5 million quarterly driven by revenue growth more than offsetting the following cost changes: Cost of operations: Cost of operations increased$0.7 million quarterly due to: higher hauling and third-party transportation costs associated with higher brokerage volumes with high pass through direct costs; higher disposal costs associated with internalizing more non-processing volumes; and higher facility operation support costs; partially offset by lower salaries and labor costs. General and administration: General and administration expense increased$0.7 million quarterly due to higher equity compensation costs, higher accrued incentive compensation and higher shared overhead costs on improved performance. Liquidity and Capital Resources Recent Events We continue to monitor the impact that the COVID-19 pandemic has had and will continue to have on our actual and forecasted cash flows, our liquidity, and our capital requirements in order to properly manage our liquidity needs as we move forward. Because of the nature of the services we provide, we expect to continue to generate positive operating cash flows through stable revenue sources. We have$173.6 million of undrawn capacity from our$200.0 million revolving line of credit facility ("Revolving Credit Facility") and$152.6 million of cash and cash equivalents as ofMarch 31, 2021 to help meet our liquidity needs, and our next significant debt maturity, which is comprised of our Revolving Credit Facility and term loan A facility ("Term Loan Facility", and together with the Revolving Credit Facility, the "Credit Facility"), is inMay 2023 . We believe that we will remain in compliance with all necessary covenants of our Credit Facility over the remaining term of this facility. A summary of cash and cash equivalents, restricted assets and debt balances, excluding any debt issuance costs (in millions) follows: March 31, December 31, 2021 2020 Cash and cash equivalents$ 152.6 $ 154.3 Restricted assets:
Restricted investment securities - landfill closure
1.8
Debt:
Current portion $ 10.9 $ 9.2
Non-current portion 539.3 539.2
Total debt $ 550.2 $ 548.4
31--------------------------------------------------------------------------------
Summary of Cash Flow Activity A summary of cash flows (in millions) follows:
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