WASTE CONNECTIONS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

The following discussion should be read in conjunction with the "Selected Financial Data" included in Item 6 of this Annual Report on Form 10-K, our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

Industry Overview

The solid waste industry is local and highly competitive in nature, requiring
substantial labor and capital resources. The participants compete for collection
accounts primarily on the basis of price and, to a lesser extent, the quality of
service, and compete for landfill business on the basis of tipping fees,
geographic location and quality of operations. The solid waste industry has been
consolidating and continues to consolidate as a result of a number of factors,
including the increasing costs and complexity associated with waste management
operations and regulatory compliance. Many small independent operators and
municipalities lack the capital resources, management, operating skills and
technical expertise necessary to operate effectively in such an environment. The
consolidation trend has caused solid waste companies to operate larger landfills
that have complementary collection routes that can use company-owned disposal
capacity. Controlling the point of transfer from haulers to landfills has become
increasingly important as landfills continue to close and disposal capacity
moves farther from the collection markets it serves.

Generally, the most profitable operators within the solid waste industry are
those companies that are vertically integrated or enter into long-term
collection contracts. A vertically integrated operator will benefit from:
(1) the internalization of waste, which is bringing waste to a company-owned
landfill; (2) the ability to charge third-party haulers tipping fees either at
landfills or at transfer stations; and (3) the efficiencies gained by being able
to aggregate and process waste at a transfer station prior to landfilling.

The E&P waste services industry is regional in nature and is also highly
fragmented, with acquisition opportunities available in several active natural
resource basins. Competition for E&P waste comes primarily from smaller regional
companies that utilize a variety of disposal methods and generally serve
specific geographic markets, and other solid waste companies. In addition,
customers in many markets have the option of using internal disposal methods or
outsourcing to another third-party disposal company. The principal competitive
factors in this business include: gaining customer approval of treatment and
disposal facilities; location of facilities in relation to customer activity;
reputation; reliability of services; track record of environmental compliance;
ability to accept multiple waste types at a single facility; and price. The
demand for our E&P waste services depends on the continued demand for, and
production of, oil and natural gas. Crude oil and natural gas prices
historically have been volatile. If the prices of crude oil and natural gas
substantially decline, it could lead to declines in the level of production
activity and demand for our E&P waste services, which could result in the
recognition of impairment charges on our intangible assets and property and
equipment associated with our E&P operations.

Executive Overview

We are an integrated solid waste services company that provides non-hazardous
waste collection, transfer, disposal and recycling services in mostly exclusive
and secondary markets in the U.S. and Canada. Through our R360 Environmental
Solutions subsidiary, we are also a leading provider of non-hazardous E&P waste
treatment, recovery and disposal services in several of the most active natural
resource producing areas in the U.S. We also provide intermodal services for the
rail haul movement of cargo and solid waste containers in the Pacific Northwest
through a network of intermodal facilities.

We generally seek to avoid highly competitive, large urban markets and instead
target markets where we can attain high market share either through exclusive
contracts, vertical integration or asset positioning. In markets where waste
collection services are provided under exclusive arrangements, or where waste
disposal is municipally owned or funded or available at multiple municipal
sources, we believe that controlling the waste stream by providing collection
services under exclusive arrangements is often more important to our growth and
profitability than owning or operating landfills. We also target niche markets,
like E&P waste treatment and disposal services.

                                       43

Table of Contents

2019 Financial Performance

The functional currency of the Company, as the parent corporate entity, and its
operating subsidiaries in the United States is the U.S. dollar. 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 Company's consolidated Canadian dollar results of operations and cash flows
are translated to U.S. dollars by applying the average foreign currency exchange
rate in effect during the reporting period. The resulting translation
adjustments are included in other comprehensive income or loss. Gains and losses
from foreign currency transactions are included in earnings for the period.

Operating Results

Revenues in 2019 increased 9.5% to $5.389 billion from $4.923 billion in 2018,
due partly to acquisitions closed during, or subsequent to, the prior year, net
of divestitures, which accounted for $292.0 million in incremental revenues in
2019, with the remainder due primarily to internal growth in solid waste and
higher E&P waste activity. Solid waste internal growth was 4.3%, due to price
increases and fuel, materials and environmental surcharges, which were partially
offset by lower volumes and recycled commodity values. Pricing growth was 5.2%,
with core pricing up 5.1% and fuel, materials and environmental surcharges
adding another 0.1%. Volumes decreased by 0.2% on increases in landfill and
hauling volumes, more than offset by purposeful shedding of poor quality volumes
at certain Progressive Waste operations. Decreases in recycled commodity prices
resulted in another 0.7% decrease to internal solid waste growth. E&P waste
revenues increased to $256.0 million from $244.6 million in 2018, due primarily
to increased activity at existing facilities.

In 2019, adjusted earnings before interest, taxes, depreciation and
amortization, or adjusted EBITDA, a non-GAAP financial measure (refer to page 68
of this Annual Report on Form 10-K for a definition and reconciliation to Net
income attributable to Waste Connections), increased 6.8% to $1.674 billion,
from $1.566 billion in 2018. As a percentage of revenue, adjusted EBITDA
decreased from 31.8% in 2018, to 31.1% in 2019. This 0.7 percentage point
decrease was primarily due to lower recycled commodity values and renewable
energy credits derived from the sale of landfill gas. Adjusted net income
attributable to Waste Connections, a non-GAAP financial measure (refer to
page 69 of this Annual Report on Form 10-K for a definition and reconciliation
to Net income attributable to Waste Connections), in 2019 increased 7.8% to
$719.6 million from $667.3 million in 2018.

Adjusted Free Cash Flow

Net cash provided by operating activities increased 9.2% to $1.541 billion in
2019, from $1.411 billion in 2018, and capital expenditures for property and
equipment increased from $546.1 million in 2018 to $634.4 million in 2019, an
increase of $88.3 million, or 16.2%. The increase in capital expenditures was
primarily due to acquisitions closed during, or subsequent to, the prior year,
as well as new municipal contracts awarded during the year. Adjusted free cash
flow, a non-GAAP financial measure (refer to page 67 of this Annual Report on
Form 10-K for a definition and reconciliation to Net cash provided by operating
activities), increased by $36.9 million to $916.8 million in 2019, from
$879.9 million in 2018. Adjusted free cash flow as a percentage of revenues was
17.0% in 2019, as compared to 17.9% in 2018.

Return of Capital to Shareholders

In 2019, we returned $175.1 million to shareholders through cash dividends
declared by our Board of Directors, which also increased the quarterly cash
dividend by 15.6%, from $0.16 to $0.185 per common share in October 2019. Cash
dividends increased $22.5 million, or 14.8%, from $152.6 million in 2018, due to
a 14.3% increase in the quarterly cash dividend declared by our Board of
Directors in October 2018, followed by the additional increase in October 2019.
Our Board of Directors intends to review the quarterly dividend during the
fourth quarter of each year, with a long-term objective of increasing the amount
of the dividend. In 2019, we did not repurchase any common shares due to
expectations regarding the size and timing of acquisitions. We expect the amount
of capital we return to shareholders through share repurchases to vary depending
on our financial condition and results of operations, capital structure, the
amount of cash we deploy on acquisitions, expectations regarding the timing and
size of acquisitions, the market price of

                                       44

Table of Contents

our common shares, and overall market conditions. We cannot assure you as to the
amounts or timing of future share repurchases or dividends. We have the ability
under our Credit Agreement and master note purchase agreements to repurchase our
common shares and pay dividends provided that we maintain specified financial
ratios.

Capital Position

We target a leverage ratio, as defined in our Credit Agreement, of approximately
2.5x - 3.0x total debt to EBITDA. The percentage increase in EBITDA in 2019 more
than offset the percentage increase in debt in 2019; therefore, our leverage
ratio decreased to 2.41x at December 31, 2019, from 2.45x at December 31, 2018.

Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires estimates and assumptions that affect
the reported amounts of assets and liabilities, revenues and expenses and
related disclosures of contingent assets and liabilities in the consolidated
financial statements. As described by the SEC, critical accounting estimates and
assumptions are those that may be material due to the levels of subjectivity and
judgment necessary to account for highly uncertain matters or the susceptibility
of such matters to change, and that have a material impact on the financial
condition or operating performance of a company. Such critical accounting
estimates and assumptions are applicable to our reportable segments. Based on
this definition, we believe the following are our critical accounting estimates.

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. 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. Our insurance accruals are
based on claims filed and estimates of claims incurred but not reported and are
developed by our management with assistance from our third-party actuary and
third-party claims administrator. The insurance accruals are influenced by our
past claims experience factors, which have a limited history, and by published
industry development factors. If we experience insurance claims or costs above
or below our historically evaluated levels, our estimates could be materially
affected. The frequency and amount of claims or incidents could vary
significantly over time, which could materially affect our self-insurance
liabilities. Additionally, the actual costs to settle the self-insurance
liabilities could materially differ from the original estimates and cause us to
incur additional costs in future periods associated with prior year claims.

Income taxes. Deferred income tax assets and liabilities are determined based on
differences between the financial reporting and income tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that are
expected to be in effect when the differences are expected to reverse. If our
judgment and estimates concerning assumptions made in calculating our expected
future income tax rates are incorrect, our deferred income tax assets and
liabilities would change. Based on our deferred income tax liability balance at
December 31, 2019, 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 $3.1 million.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation
commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act
made broad and complex changes to the U.S. tax code that affected 2017,
including, but not limited to, (1) requiring a one-time transition tax on
certain unrepatriated earnings of foreign subsidiaries that is payable over
eight years and (2) bonus depreciation that will allow for full expensing of
qualified property.

The Tax Act also established new tax laws that affected years beginning after
December 31, 2017, including, but not limited to, (1) a reduction of the U.S.
federal corporate income tax rate from 35 percent to 21 percent; (2) elimination
of the corporate alternative minimum tax; (3) the creation of the base erosion
anti-abuse tax, which acts similar to a new minimum tax; (4) a general
elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
(5) a new provision designed to tax global intangible low-taxed income, which
allows for the possibility of using foreign tax credits, or FTCs, and a
deduction of up to 50 percent to offset the income tax liability (subject to
some limitations); (6) a

                                       45

  Table of Contents

new limitation on deductible interest expense; (7) limitations on the deductibility of certain executive compensation; (8) bonus depreciation that allows for full expensing of qualified property; and (9) limitations on net operating losses.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118, or
SAB 118, which provides guidance on accounting for the tax effects of the Tax
Act. SAB 118 provides a measurement period that should not extend beyond
one year from the Tax Act enactment date for companies to complete the
accounting under ASC 740. In accordance with SAB 118, a company must reflect the
income tax effects of those aspects of the Tax Act for which the accounting
under ASC 740 is complete. To the extent that a company's accounting for certain
income tax effects of the Tax Act is incomplete but it is able to determine a
reasonable estimate, it must record a provisional estimate in the financial
statements. If a company cannot determine a provisional estimate to be included
in the financial statements, it should continue to apply ASC 740 on the basis of
the provisions of the tax laws that were in effect immediately before the
enactment of the Tax Act.

In connection with our analysis of the Tax Act, we recorded a discrete net
income tax benefit of $269.8 million in the year ended December 31, 2017. This
net income tax benefit was primarily the result of the reduction to the
corporate income tax rate. Additionally, the Tax Act's one-time deemed
repatriation transition tax, or the Transition Tax, on certain unrepatriated
earnings of non-U.S. subsidiaries is a tax on previously untaxed accumulated and
current earnings and profits of certain of our non-U.S. subsidiaries. To
determine the amount of the Transition Tax, we had to determine, in addition to
other factors, the amount of post-1986 earnings and profits of the relevant
subsidiaries, as well as the amount of non-U.S. income taxes paid on such
earnings. We were able to make a reasonable estimate of the Transition Tax and
recorded a provisional Transition Tax obligation of $1.0 million for the year
ended December 31, 2017. The Transition Tax, which has been determined to be
complete, resulted in a total Transition Tax obligation of $0.7 million, with a
corresponding adjustment of $0.3 million to income tax expense for the year
ended December 31, 2018. Further, as it relates to our policy regarding the
accounting for the tax impacts of global intangible low-taxed income, we have
elected to record the tax impacts as period costs.

Additionally, in conjunction with the Tax Act, we recorded a provisional
deferred income tax expense of $62.4 million for the year ended December 31,
2017 associated with a portion of our U.S. earnings no longer permanently
reinvested. During the year ended December 31, 2018, we recorded a deferred
income tax expense of $6.4 million associated with refinements to the prior year
estimate as a measurement period adjustment pursuant to SAB 118. This resulted
in total deferred income tax expense of $68.8 million which has been determined
to be complete.

Accounting for landfills. We recognize landfill depletion expense as airspace of
a landfill is consumed. Our landfill depletion rates are based on the remaining
disposal capacity at our landfills, considering both permitted and probable
expansion airspace. We calculate the net present value of our final capping,
closure and post-closure commitments by estimating the total obligation in
current dollars, inflating the obligation based upon the expected date of the
expenditure and discounting the inflated total to its present value using a
credit-adjusted risk-free rate. Any changes in expectations that result in an
upward revision to the estimated undiscounted cash flows are treated as a new
liability and are inflated and discounted at rates reflecting current market
conditions. Any changes in expectations that result in a downward revision (or
no revision) to the estimated undiscounted cash flows result in a liability that
is inflated and discounted at rates reflecting the market conditions at the time
the cash flows were originally estimated. This policy results in our final
capping, closure and post-closure liabilities being recorded in "layers."  The
resulting final capping, closure and post-closure obligations are recorded on
the consolidated balance sheet along with an offsetting addition to site costs,
which is amortized to depletion expense as the remaining landfill airspace is
consumed. 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 could have
a material effect on our financial condition and results of operations. Any
changes to our estimates are applied prospectively.

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 depend on future events and thus actual costs could
vary significantly from our estimates. Material differences

                                       46

Table of Contents

between estimated and actual development costs may affect our cash flows by increasing our capital expenditures and thus affect our results of operations by increasing our landfill depletion expense.

Final capping, closure and post-closure obligations. 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 could have additional material financial obligations relating to
final capping, closure and post-closure costs at other disposal facilities that
we currently own or operate or that we may own or operate in the future. Our
discount rate assumption for purposes of computing 2019 and 2018 "layers" for
final capping, closure and post-closure obligations was 4.75% for both years,
which reflects our long-term credit adjusted risk free rate as of the end of
both 2018 and 2017. Our inflation rate assumption was 2.5% for the years ended
December 31, 2019 and 2018. Significant reductions in our estimates of the
remaining lives of our landfills or significant increases in our estimates of
the landfill final capping, closure and post-closure maintenance costs could
have a material adverse effect on our financial condition and results of
operations. Additionally, changes in regulatory or legislative requirements
could increase our costs related to our landfills, resulting in a material
adverse effect on our financial condition and results of operations.

We own two landfills for which the prior owner is obligated to reimburse us for
certain costs we incur for final capping, closure and post-closure activities on
the portion of the landfills utilized by the prior owner. We accrue the prior
owner's portion of the final capping, closure and post-closure obligation within
the balance sheet classification of Other long-term liabilities, and a
corresponding receivable from the prior owner in long-term Other assets.

Disposal capacity. Our internal and third-party engineers perform surveys at
least annually to estimate the remaining disposal capacity at our landfills. Our
landfill depletion rates are based on the remaining disposal capacity,
considering both permitted and probable expansion airspace, at the landfills
that we own and at landfills that we operate, but do not own, under life-of-site
agreements. Our landfill depletion rate is based on the term of the operating
agreement at our operated landfill that has capitalized expenditures. Expansion
airspace consists of additional disposal capacity being pursued through means of
an expansion that has not yet been permitted. Expansion airspace that meets the
following criteria is included in our estimate of total landfill airspace:

whether the land where the expansion is being sought is contiguous to the

1) current disposal site, and we either own the expansion property or have rights

to it under an option, purchase, operating or other similar agreement;

2) whether total development costs, final capping costs, and closure/post-closure

costs have been determined;

whether internal personnel have performed a financial analysis of the proposed

3) expansion site and have determined that it has a positive financial and

operational impact;

4) whether internal personnel or external consultants are actively working to

obtain the necessary approvals to obtain the landfill expansion permit; and

whether we consider it probable that we will achieve the expansion (for a

pursued expansion to be considered probable, there must be no significant

5) known technical, legal, community, business or political restrictions or

similar issues existing that we believe are more likely than not to impair the

success of the expansion).

We may be unsuccessful in obtaining permits for expansion disposal capacity at
our landfills. In such cases, we will charge the previously capitalized
development costs to expense. This will adversely affect our operating results
and cash flows and could result in greater landfill depletion expense being
recognized on a prospective basis.

We periodically evaluate our landfill sites for potential impairment indicators.
Our judgments regarding the existence of impairment indicators are based on
regulatory factors, market conditions and operational performance of our
landfills. Future events could cause us to conclude that impairment indicators
exist and that our landfill carrying costs are impaired. Any resulting
impairment loss could have a material adverse effect on our financial condition
and results of operations.

                                       47

Table of Contents

Goodwill and indefinite-lived intangible assets testing. Goodwill and
indefinite-lived intangible assets are tested for impairment on at least an
annual basis in the fourth quarter of the year. In addition, we evaluate our
reporting units for impairment if events or circumstances change between annual
tests indicating a possible impairment. 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 the segment; or

? current period or expected future operating cash flow losses.

We elected to early adopt the guidance issued by the Financial Accounting
Standards Board, or FASB, "Simplifying the Test for Goodwill Impairment" on
January 1, 2017. The new guidance removes Step 2 of the goodwill impairment
test, which required a hypothetical purchase price allocation. As such, the
impairment analysis is only one step. In this step, we estimate the fair value
of each of our reporting units, which consisted of testing our five geographic
solid waste operating segments and our E&P segment at December 31, 2019, 2018,
and 2017, using discounted cash flow analyses, which require significant
assumptions and estimates about the future operations of each reporting unit. We
compare the fair value of each reporting unit to the carrying value of its net
assets. 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 is less than its carrying value, an
impairment charge is recorded for the amount by which the carrying value exceeds
its fair value, not to exceed the carrying amount of goodwill. In testing
indefinite-lived intangible assets for impairment, we compare the estimated fair
value of each indefinite-lived intangible asset to its carrying value. If the
fair value of the indefinite-lived intangible asset is less than its carrying
value, an impairment charge would be recorded to earnings in our Consolidated
Statements of Net Income.

Significant judgments inherent in these analyses include the determination of
appropriate discount rates, the amount and timing of expected future cash flows
and growth rates. In assessing the reasonableness of our determined fair values
of our reporting units, we evaluate our results against our current market
capitalization. For our impairment testing of our solid waste geographic
operating segments for the year ended December 31, 2019, we determined that the
indicated fair value of our reporting units exceeded their carrying value by
approximately 120% on average and, therefore, we did not record an impairment
charge. The detailed results of our 2019, 2018 and 2017 impairment tests are
described in Note 3 of our consolidated financial statements included in Item 8
of this Annual Report on Form 10-K.

Upon adopting the goodwill impairment accounting guidance in the first quarter
of 2017, we performed an updated impairment test for our E&P segment. The
impairment test involved measuring the recoverability of goodwill by comparing
the E&P segment's carrying amount, including goodwill, to the fair value of the
reporting unit. The fair value was estimated using an income approach employing
a DCF model. The DCF model incorporated projected cash flows over a forecast
period based on the remaining estimated lives of the operating locations
comprising the E&P segment. This was based on a number of key assumptions,
including, but not limited to, a discount rate of 11.7%, annual revenue
projections based on E&P waste resulting from projected levels of oil and
natural gas exploration and production activity during the forecast period,
gross margins based on estimated operating expense requirements during the
forecast period and estimated capital expenditures over the forecast period, all
of which were classified as Level 3 in the fair value hierarchy. The impairment
test showed the carrying value of the E&P segment exceeded its fair value by an
amount in excess of the carrying amount of goodwill, or $77.3
million. Therefore, we recorded an impairment charge of $77.3 million,
consisting of the carrying amount of goodwill at our E&P segment at January 1,
2017, to Impairments and other operating charges in the Consolidated Statements
of Net Income during the year ended December 31, 2017.

Additionally, we evaluated the recoverability of the E&P segment's
indefinite-lived intangible assets (other than goodwill) by comparing the
estimated fair value of each indefinite-lived intangible asset to its carrying
value. We estimated the fair value of the indefinite-lived intangible assets
using an excess earnings approach. Based on the result of the recoverability
test during the years ended December 31, 2019, 2018 and 2017, we did not record
an impairment charge.

                                       48

  Table of Contents

Business Combination Accounting. We recognize, separately from goodwill, the
identifiable assets acquired and liabilities assumed at their estimated
acquisition date fair values. We measure and recognize goodwill as of the
acquisition date as the excess of: (a) the aggregate of the fair value of
consideration transferred, the fair value of any noncontrolling interest in the
acquiree (if any) and the acquisition date fair value of our previously held
equity interest in the acquiree (if any), over (b) the fair value of net assets
acquired and liabilities assumed. At the acquisition date, we measure the fair
values of all assets acquired and liabilities assumed that arise from
contractual contingencies. We measure the fair values of all noncontractual
contingencies if, as of the acquisition date, it is more likely than not that
the contingency will give rise to an asset or liability.

General

Our revenues consist mainly of fees we charge customers for collection, transfer, recycling and disposal of non-hazardous solid waste and treatment, recovery and disposal of non-hazardous E&P waste.

Our solid waste collection business involves the collection of waste from
residential, commercial and industrial customers for transport to transfer
stations, or directly to landfills or recycling centers. Solid waste collection
services include both recurring and temporary customer relationships. The
services are performed under service agreements, municipal contracts or
franchise agreements with governmental entities. Our existing franchise
agreements and most of our existing municipal contracts give us the exclusive
right to provide specified waste services in the specified territory during the
contract term. 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.

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 terms of our contracts sometimes limit our ability to pass on price
increases. Long-term solid waste collection contracts often contain a formula,
generally based on a published price index, that automatically adjusts fees to
cover increases in some, but not all, operating costs, or that limit increases
to less than 100% of the increase in the applicable price index.

Revenue at landfills is primarily generated by charging tipping fees on a per
ton and/or per yard basis to third parties based on the volume disposed and the
nature of the waste.

Revenue at transfer stations is primarily generated by charging tipping or disposal fees on a per ton and/or per yard basis. The fees charged to third parties are based primarily on the market, type and volume or weight of the waste accepted, the distance to the disposal facility and the cost of disposal.

Many of our landfill and transfer station customers have entered into one to
ten year disposal contracts with us, most of which provide for annual indexed
price increases.

Our revenues from E&P waste services are primarily generated through the
treatment, recovery and disposal of non-hazardous exploration and production
waste from vertical and horizontal drilling, hydraulic fracturing, production
and clean-up activity, as well as other services including closed loop
collection systems, the transportation of waste to the disposal facility in
certain markets and the sale of recovered products. E&P activity varies across
market areas that are tied to the natural resource basins in which the drilling
activity occurs and reflects the regulatory environment, pricing and disposal
alternatives available in any given market.

Our revenues from recycling services are generated by offering residential, commercial, industrial and municipal customers recycling services for a variety of recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles and ferrous and aluminum metals. The Company owns recycling operations and markets

                                       49

Table of Contents

collected recyclable materials to third parties for processing before resale. In
certain instances, the Company issues recycling rebates to municipal or
commercial customers, which can be based on the price it receives upon the sale
of recycled commodities, a fixed contractual rate or other measures. The Company
also receives rebates when it disposes of recycled commodities at third-party
facilities.

Other revenues consist primarily of the sale of methane gas generated from our
MSW landfills and revenues from intermodal services. Intermodal revenue is
primarily generated through providing intermodal services for the rail haul
movement of cargo and solid waste containers in the Pacific Northwest through a
network of intermodal facilities. The fees received for intermodal services are
based on negotiated rates and vary depending on volume commitments by the
shipper and destination.

No single contract or customer accounted for more than 10% of our total revenues
at the consolidated or reportable segment level during the periods presented.
The following table disaggregates our revenue by service line for the periods
indicated (dollars in thousands of U.S. dollars).


                                                Years Ended December 31,
                                           2019           2018           2017
Commercial                              $ 1,593,217    $ 1,452,831    $ 1,343,590
Residential                               1,380,763      1,189,148      1,130,842
Industrial and construction roll off        841,173        768,687        707,015
Total collection                          3,815,153      3,410,666      3,181,447
Landfill                                  1,132,935      1,063,243        988,092
Transfer                                    771,316        670,129        589,883
Recycling                                    64,245         92,634        161,730
E&P                                         271,887        256,262        203,473
Intermodal and other                        121,137        139,896        146,749
Intercompany                              (787,994)      (709,889)      (640,886)
Total                                   $ 5,388,679    $ 4,922,941    $ 4,630,488




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. Our significant costs of operations in 2019 were labor, third-party
disposal and transportation, vehicle and equipment maintenance, taxes and fees,
insurance and fuel. 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 carry insurance for automobile liability,
general liability, employer's liability, environmental liability, cyber
liability, employment practices liability and directors' and officers' liability
as well as for employee group health claims, property and workers' compensation.
If we experience insurance claims or costs above or below our historically
evaluated levels, our estimates could be materially affected.

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. Depletion expense
includes depletion of landfill site costs and total future development costs as
remaining airspace of the landfill is consumed. Remaining airspace at our
landfills includes both permitted and probable expansion airspace. Amortization
expense includes the amortization of finite-lived intangible assets, consisting
primarily of long-term franchise agreements and contracts, customer lists and
non-competition agreements, over their estimated useful lives using the
straight-line method. Goodwill and indefinite-lived intangible assets,
consisting primarily of certain perpetual rights to provide solid waste
collection and transportation services in specified territories, are not
amortized.

                                       50

  Table of Contents

We capitalize some third-party expenditures related to development projects,
such as legal and engineering. We expense all third-party and indirect
acquisition costs, including third-party legal and engineering expenses,
executive and corporate overhead, public relations and other corporate services,
as we incur them. We charge against net income any unamortized capitalized
expenditures and advances (net of any portion that we believe we may recover,
through sale or otherwise) that may become impaired, such as those that relate
to any operation that is permanently shut down and any landfill development
project that we believe will not be completed. We routinely evaluate all
capitalized costs, and expense those related to projects that we believe are not
likely to succeed. For example, if we are unsuccessful in our attempts to obtain
or defend permits that we are seeking or have been awarded to operate or expand
a landfill, we will no longer generate anticipated income from the landfill and
we will be required to expense in a future period up to the carrying value of
the landfill or expansion project, less the recoverable value of the property
and other amounts recovered.

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, 2019 to the year ended December 31, 2018. A similar
discussion and analysis that compares the year ended December 31, 2018 to the
year ended December 31, 2017 can be found in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K for the year ended December 31, 2018.

Results of Operations

The following table sets forth items in our Consolidated Statements of Net
Income in thousands of U.S. dollars and as a percentage of revenues for the
periods indicated:


                                                              Years Ended December 31,
                                              2019        % of Revenues       2018        % of Revenues
Revenues                                   $ 5,388,679            100.0 %  $ 4,922,941            100.0 %

Cost of operations                           3,198,757             59.4      2,865,704             58.2
Selling, general and administrative            546,278             10.1    

   524,388             10.7
Depreciation                                   618,396             11.5        572,708             11.6
Amortization of intangibles                    125,522              2.3        107,779              2.2

Impairments and other operating items           61,948              1.2    

    20,118              0.4
Operating income                               837,778             15.5        832,244             16.9

Interest expense                             (147,368)            (2.7)      (132,104)            (2.7)
Interest income                                  9,777              0.2          7,170              0.2
Other income (expense), net                      5,704              0.1          (170)            (0.0)
Income tax provision                         (139,210)            (2.6)      (159,986)            (3.3)
Net income                                     566,681             10.5        547,154             11.1
Net loss (income) attributable to
noncontrolling interests                           160              0.0          (283)            (0.0)
Net income attributable to Waste
Connections                                $   566,841             10.5 %  $   546,871             11.1 %

Years Ended December 31, 2019 and 2018

Revenues.  Total revenues increased $465.8 million, or 9.5%, to $5.389 billion
for the year ended December 31, 2019, from $4.923 billion for the year ended
December 31, 2018.

During the year ended December 31, 2019, incremental revenue from acquisitions
closed during, or subsequent to, the year ended December 31, 2018, increased
revenues by approximately $312.7 million.

Operations that were divested in 2018 decreased revenues by approximately $20.7 million for the year ended December 31, 2019.

                                       51

Table of Contents

During the year ended December 31, 2019, the net increase in prices charged to our customers at our existing operations was $237.0 million, consisting of $230.5 million of core price increases and $6.5 million from surcharges.

During the year ended December 31, 2019, volume decreases in our existing
business decreased solid waste revenues by $8.9 million due primarily to
declines in transfer station volumes in our Eastern segment resulting from the
termination of our New York City Department of Sanitation marine terminal
operations contract with a third party, declines in residential collection in
certain markets at our Eastern segment due to competition from lower-priced
haulers, declines in residential collection in our Southern and Canada segments
due to the non-renewal of certain contracts acquired in the Progressive Waste
acquisition and declines in landfill municipal solid waste volumes in our
Southern and Central segments exceeding increased collection and landfill
volumes in our Western segment.

E&P revenues at facilities owned and fully-operated during the years ended
December 31, 2019 and 2018 increased by $10.8 million due to increased drilling
activity and E&P disposal volumes primarily in our Louisiana Gulf of Mexico and
Permian Basins.

A decrease in the average Canadian dollar to U.S. dollar currency exchange rate
resulted in a decrease in revenues of $16.6 million for the year ended December
31, 2019.  The average Canadian dollar to U.S. dollar exchange rates on our
Canadian revenues were 0.7537 and 0.7713 in the years ended December 31, 2019
and 2018, respectively.

Revenues from sales of recyclable commodities at facilities owned during the
years ended December 31, 2019 and 2018 decreased $31.9 million, due primarily to
decreased prices for old corrugated cardboard and other fiber products resulting
from a reduction in overseas demand.

Other revenues decreased by $16.6 million during the year ended December 31,
2019, due primarily to a decrease in intermodal revenues resulting from customer
losses causing a reduction in cargo volume as well as a reduction in the prices
for renewal energy credits associated with the generation of landfill gas
primarily in our Canada segment.

Cost of Operations.  Total cost of operations increased $333.1 million, or
11.6%, to $3.199 billion for the year ended December 31, 2019, from $2.866
billion for the year ended December 31, 2018. The increase was primarily the
result of $210.4 million of operating costs from acquisitions closed during, or
subsequent to, the year ended December 31, 2018 and an increase in operating
costs at our existing operations of $149.5 million, assuming foreign currency
parity, partially offset by a decrease in operating costs of $17.7 million at
operations divested during, or subsequent to, the year ended December 31, 2018
and a decrease of $9.1 million resulting from a decrease in the average foreign
currency exchange rate in effect during the comparable reporting periods.

The increase in operating costs at our existing operations of $149.5 million for
the year ended December 31, 2019, assuming foreign currency parity, was
comprised of an increase in labor expenses of $48.1 million due primarily to
employee pay rate increases, an increase in truck, container, equipment and
facility maintenance and repair expenses of $27.1 million due to parts and
service rate increases and variability impacting the timing of major repairs, an
increase in third-party trucking and transportation expenses of $18.3 million
due primarily to outsourcing transportation services to third party operators at
certain locations and increased rates charged by third parties to provide
trucking and transportation services, an increase of $13.6 million resulting
from higher costs per ton charged by third party processors of recyclable
commodities, an increase in 401(k) matching expenses of $9.5 million due to our
increasing the maximum matching contribution rate to our employees and higher
credits recorded in the prior year period resulting from employee forfeitures,
an increase in leachate disposal expenses of $7.6 million due to increased
precipitation from harsh weather generating higher leachate volumes primarily in
our Eastern and Southern segments as well as higher costs per gallon for
leachate transportation and treatment, an increase in subcontracted operating
expenses of $6.6 million due primarily to utilizing third party haulers to
assist in the performance of certain collection contracts at our solid waste
segments and certain operating activities at our E&P segment, an increase in
taxes on revenues of $6.5 million due primarily to increased revenues in our
solid waste markets, an increase in landfill monitoring, environmental
compliance and daily cover expenses of $5.2 million due to increased compliance
requirements under our landfill operating permits, an increase in diesel fuel
expense of $4.8 million due primarily to the prior year period benefiting from
purchasing a portion of our diesel fuel needs under a favorable fuel hedge
agreement that expired in December 2018, a $4.4 million increase in expenses for
auto and workers' compensation claims due primarily to higher adjustments
recorded in the prior year

                                       52

  Table of Contents

period to decrease projected losses on outstanding claims and an increase in the
deductible on our auto claims resulting in a higher portion of costs being paid
by us, an increase in equipment and facility rental expenses of $3.1 million due
primarily to increased truck rental expenses in our Southern segment and the
adoption on January 1, 2019 of new accounting standards associated with leases,
an increase in insurance premiums for our auto and workers' compensation
policies of $2.1 million due primarily to insurance cost increases, growth from
acquisitions and a non-recurring reduction in expense during the prior year
period in our Canada segment resulting from an annual workers' compensation
premium audit and $8.2 million of other net expense increases, partially offset
by a decrease in employee benefits expenses of $5.9 million due primarily to a
reduction in the employer-paid portion of medical claims resulting from a change
in medical plan providers, a decrease in compressed natural gas expense of $5.0
million due primarily to the recognition in 2019 of two years of tax credits
associated with the purchase of compressed natural gas fuel and a $4.7 million
decrease in intermodal expenses resulting from a decrease in intermodal cargo
volume due to customer losses.

Cost of operations as a percentage of revenues increased 1.2 percentage points
to 59.4% for the year ended December 31, 2019, from 58.2% for the year ended
December 31, 2018. The increase as a percentage of revenues consisted of a 0.5
percentage point increase from the net impact of cost of operations expenses
from acquisitions closed during, or subsequent to, the year ended December 31,
2018, a 0.2 percentage point increase from higher maintenance and repair
expenses, a 0.2 percentage point increase from higher labor expenses, a 0.2
percentage point increase from higher 401(k) matching expenses, a 0.2 percentage
point increase from an increase in recyclable commodities processing expenses, a
0.1 percentage point increase from higher leachate disposal expenses and a 0.1
percentage point increase from higher subcontracted operating expenses,
partially offset by a 0.3 percentage point decrease from improved
internalization of collected waste volumes disposed at third party locations.

SG&A.  SG&A expenses increased $21.9 million, or 4.2%, to $546.3 million for the
year ended December 31, 2019, from $524.4 million for the year ended December
31, 2018.  The increase was comprised of $25.9 million of additional SG&A
expenses from operating locations at acquisitions closed during, or subsequent
to, the year ended December 31, 2018, partially offset by a decrease of $1.0
million in SG&A expenses at our existing operations, assuming foreign currency
parity, a decrease of $1.7 million resulting from a decrease in the average
foreign currency exchange rate in effect during the comparable reporting periods
and a decrease of $1.3 million consisting of SG&A expenses from operations
divested during, or subsequent to, the year ended December 31, 2018.

The decrease in SG&A expenses at our existing operations of $1.0 million,
assuming foreign currency parity, for the year ended December 31, 2019 was
comprised of a decrease in professional fees expense of $13.1 million primarily
due to reduced legal expenses resulting from reimbursements related to legal
matters covered under our insurance policies and the settlement of certain legal
matters subsequent to December 31, 2018, a decrease of $5.0 million in
equity-based compensation expenses associated with the prior year adjustment of
Waste Connections, Inc. common shares held in our deferred compensation plan by
certain key executives to fair value as a result of the shares being exchanged
for other investment options, a further decrease in equity-based compensation
expenses of $1.1 million associated with 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 based on changes in
fair value, a decrease of $4.6 million in expenses for uncollectible accounts
receivable resulting primarily from improved collection results in our solid
waste segments and adjustments to prior period reserve estimates at our E&P
segment, a decrease in employee benefits expenses of $2.9 million due primarily
to a reduction in the employer-paid portion of medical claims  resulting from a
change in medical plan providers and a decrease in integration-related expenses
of $2.8 million incurred in the prior year period resulting from the acquisition
of Progressive Waste, partially offset by an increase in deferred compensation
expenses of $5.9 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 $5.6 million
associated with our annual recurring grant of restricted share units to our
personnel, an increase in direct acquisition expenses of $3.7 million due to
higher acquisition activity, an increase in 401(k) matching expenses of $3.4
million due to our increasing the maximum matching contribution rate to our
employees and credits recorded in the prior year period from employee
forfeitures, an increase in payroll and payroll-related expenses of $2.8 million
due primarily to annual compensation increases, an increase in management
training expenses of $1.5 million due to an expansion of our management training
curriculum, an increase in credit card fee expenses of $1.5 million due to an
increase in the volume of customers paying for services with credit cards, an
increase in software licenses and subscriptions expenses of $1.5 million due
primarily to the addition of new human resources and data security applications
and $2.6 million of other net expense increases.

                                       53

Table of Contents

SG&A expenses as a percentage of revenues decreased 0.6 percentage points to
10.1% for the year ended December 31, 2019, from 10.7% for the year ended
December 31, 2018. The decrease as a percentage of revenues consisted of a 0.3
percentage point decrease from lower legal expenses, a 0.1 percentage point
decrease from equity-based compensation expenses associated with the exchange of
shares held in our deferred compensation plan, a 0.1 percentage point decrease
from lower expenses for uncollectible accounts receivable and a 0.1 percentage
point decrease from all other changes.

Depreciation.  Depreciation expense increased $45.7 million, or 8.0%, to $618.4
million for the year ended December 31, 2019, from $572.7 million for the year
ended December 31, 2018.  The increase was comprised of depreciation and
depletion expense of $24.9 million from acquisitions closed during, or
subsequent to, the year ended December 31, 2018, an increase in depletion
expense of $16.0 million at our existing landfills due primarily to expected
increases in future site build out and closure costs increasing our per unit
depletion rates and higher E&P and municipal solid waste volumes and additional
depreciation expense of $7.0 million associated with additions to our fleet and
equipment purchased to support our existing operations exceeding the impact of
certain equipment acquired from the acquisition of Progressive Waste becoming
fully depreciated subsequent to June 1, 2019, partially offset by a decrease of
$2.2 million resulting from a decrease in the average foreign currency exchange
rate in effect during the comparable reporting periods.

Depreciation expense as a percentage of revenues decreased 0.1 percentage points
to 11.5% for the year ended December 31, 2019, from 11.6% for the year ended
December 31, 2018. The decrease as a percentage of revenues was attributable to
certain equipment acquired from the acquisition of Progressive Waste becoming
fully depreciated subsequent to June 1, 2019.

Amortization of Intangibles.  Amortization of intangibles expense increased
$17.7 million, or 16.5% to $125.5 million for the year ended December 31, 2019,
from $107.8 million for the year ended December 31, 2018. The increase was the
result of $28.8 million from intangible assets acquired in acquisitions closed
during, or subsequent to, the year ended December 31, 2018, partially offset by
a decrease of $10.4 million from certain intangible assets becoming fully
amortized subsequent to December 31, 2018 and a decrease of $0.7 million
resulting from a decrease in the average foreign currency exchange rate in
effect during the comparable reporting periods.

Amortization expense as a percentage of revenues increased 0.1 percentage points
to 2.3% for the year ended December 31, 2019, from 2.2% for the year ended
December 31, 2018.  The increase as a percentage of revenues was due primarily
to the impact of amortization expense associated with acquisitions closed
during, or subsequent to, the year ended December 31, 2018.

Impairments and Other Operating Items.  Impairments and other operating items
increased $41.8 million, to net losses totaling $61.9 million for the year ended
December 31, 2019, from net losses totaling $20.1 million for the year ended
December 31, 2018.

The net losses of $61.9 million recorded during the year ended December 31, 2019
consisted of $25.8 million of charges in our Eastern segment associated with the
write-down of an operating permit and equipment at a non-strategic materials
recovery facility that was disposed of by sale on January 2, 2020, $15.4 million
of charges to terminate or write off the carrying cost of certain contracts that
were not, or are not expected to be, renewed prior to their original estimated
termination date, $8.5 million of losses on property and equipment at our
existing operations that were disposed of through sales or as a result of being
damaged in operations, $8.0 million resulting from the abandonment of a landfill
development project at our E&P segment, $2.0 million of expenses associated with
the settlement of various litigation claims, a $1.5 million expense charge to
increase the fair value of amounts payable under liability-classified contingent
consideration arrangements from acquisitions closed in periods prior to 2019 and
$0.7 million of other net losses.

The net losses of $20.1 million recorded during the year ended December 31, 2018
consisted of an $11.0 million charge recorded for the potential settlement of a
final judgment obtained against Progressive Waste Solutions of FL, Inc., now
known as Waste Connections of Florida, Inc., $8.5 million of losses on trucks
and equipment that were scrapped, disposed of through sales or disposed of as a
result of being damaged in operations, $3.8 million of charges to write off the
carrying cost of certain contracts that were not expected to be renewed prior to
their original estimated

                                       54

  Table of Contents

termination date and $2.8 million of other net charges, partially offset by the
reversal of $6.0 million of expenses recognized in prior periods to adjust the
carrying cost of assets held for disposal to fair market value due to
modifications to our divestiture plan and changes in the fair market value of
the divested operations.

Operating Income.  Operating income increased $5.6 million, or 0.7%, to $837.8
million for the year ended December 31, 2019, from $832.2 million for the year
ended December 31, 2018.  The increase was primarily attributable to operating
income generated from acquisitions, price-led growth in our existing solid waste
business and gross margins recognized on E&P volume growth, partially offset by
an increase in impairments and other operating charges.

Operating income as a percentage of revenues decreased 1.4 percentage points to
15.5% for the year ended December 31, 2019, from 16.9% for the year ended
December 31, 2018.  The decrease as a percentage of revenues was comprised of a
1.2 percentage point increase in cost of operations, a 0.8 percentage point
increase in impairments and other operating items and a 0.1 percentage point
increase in amortization expense, partially offset by a 0.6 percentage point
decrease in SG&A expense and a 0.1 percentage point decrease in depreciation
expense.

Interest Expense.  Interest expense increased $15.3 million, or 11.6%, to
$147.4 million for the year ended December 31, 2019, from $132.1 million for the
year ended December 31, 2018. The increase was primarily attributable to an
increase of $18.6 million from the November 2018 issuance of our 2028 Senior
Notes (as defined below), an increase of $12.4 million from the April 2019
issuance of our 2029 Senior Notes (as defined below) and an increase of $2.1
million due to higher interest rates on outstanding borrowings under our Credit
Agreement (as defined below), partially offset by a decrease of $15.1 million
due to a decrease in the average borrowings outstanding under our Credit
Agreement, a decrease of $2.0 million from the repayment at maturity of our 2018
Senior Notes (as defined below) and 2019 Senior Notes (as defined below) using
proceeds from our Credit Agreement and $0.7 million of other net decreases.

Interest Income.  Interest income increased $2.6 million, to $9.8 million for
the year ended December 31, 2019, from $7.2 million for the year ended December
31, 2018.  The increase was primarily attributable to higher reinvestment rates
in the current period and higher average cash balances.

Other Income (Expense), Net.  Other income (expense), net increased $5.9
million, to an income total of $5.7 million for the year ended December 31,
2019, from an expense total of $0.2 million for the year ended December 31,
2018. The increase was due primarily to a $6.1 million increase in income earned
on investments purchased to fund our employee deferred compensation obligations
and a $2.8 million increase in foreign currency transaction gains, partially
offset by a $2.8 million decrease in adjustments to accrued liabilities acquired
in prior year acquisitions and a $0.2 million decrease in other net income
sources.

Income Tax Provision.  Income taxes decreased $20.8 million, or 13.0%, to $139.2
million for the year ended December 31, 2019, from $160.0 million for the year
ended December 31, 2018.  Our effective tax rate for the year ended December 31,
2019 was 19.7%. Our effective tax rate for the year ended December 31, 2018 was
22.6%.

The income tax provision for the year ended December 31, 2019 included a $3.8
million expense primarily associated with a reduction in deferred income tax
assets related to compensation of executive officers no longer deemed deductible
for tax purposes.  Additionally, the income tax provision for the year ended
December 31, 2019 included a benefit of $5.5 million from share-based payment
awards being recognized in the income statement when settled.

The income tax provision for the year ended December 31, 2018 included a $6.4
million expense primarily associated with refinements to the estimates, as
provided by Staff Accounting Bulletin No. 118, of the impact of a portion of the
Company's U.S. earnings no longer permanently reinvested in conjunction with the
Tax Act. Additionally, the income tax provision for the year ended December 31,
2018 included a $5.6 million expense associated with the restructuring of our
internal refinancing in conjunction with the Tax Act, as well as a $3.1 million
benefit related to a reduction in our deferred income tax liabilities resulting
from state legislation enacted in the current year and changes in our
geographical apportionment due to acquisition activity. Additionally, the income
tax provision for the year ended December 31, 2018 included a benefit of $5.0
million from share-based payment awards being recognized in the income statement
when settled.

                                       55

  Table of Contents

Our effective tax rate is dependent upon the proportion of pre-tax income among
the jurisdictions where we do business. As such, our effective tax rate will be
subject to some variability depending upon the proportional contribution of
pre-tax income across jurisdictions in any period.

Segment Reporting

Our Chief Operating Decision Maker evaluates operating segment profitability and
determines resource allocations based on several factors, of which the primary
financial measure is segment EBITDA. We define segment EBITDA as earnings before
interest, taxes, depreciation, amortization, impairments and other operating
items and other income (expense). Segment EBITDA is not a measure of operating
income, operating performance or liquidity under GAAP and may not be comparable
to similarly titled measures reported by other companies. Our management uses
segment EBITDA in the evaluation of segment operating performance as it is a
profit measure that is generally within the control of the operating segments.

We manage our operations through five geographic solid waste operating segments
and our E&P segment, which includes the majority of our E&P waste treatment and
disposal operations. Our five geographic solid waste operating segments and our
E&P segment comprise our reportable segments. Each operating segment is
responsible for managing several vertically integrated operations, which are
comprised of districts. In the third quarter of 2017, we moved a district from
our Eastern segment to our Canada segment as a significant amount of its
revenues are received from Canadian-based customers. In the first quarter of
2019, we moved two districts from our Eastern segment to our Central segment
because their location was closer in proximity to operations in our Central
segment. The segment information presented herein reflects the realignment of
these districts.

At December 31, 2019, under the current orientation, our Eastern segment
services customers located in northern Illinois, Kentucky, Maryland,
Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island,
South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; our Southern
segment services customers located in Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, southern Oklahoma, western Tennessee and Texas; our
Western segment services customers located in Alaska, California, Idaho,
Montana, Nevada, Oregon, Washington and western Wyoming; our Central segment
services customers located in Arizona, Colorado, southern Illinois, Iowa,
Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota,
western Texas, Utah and eastern Wyoming; and our Canada segment services
customers located in the state of Michigan and in the provinces of Alberta,
British Columbia, Manitoba, Ontario, Québec and Saskatchewan. The E&P segment
services E&P customers located in Louisiana, New Mexico, North Dakota, Oklahoma,
Texas, Wyoming and along the Gulf of Mexico.

Revenues, net of intercompany eliminations, for our reportable segments are shown in the following table in thousands of U.S. dollars and as a percentage of total revenues for the periods indicated:

                               Years Ended December 31,
               2019        % of Revenues       2018        % of Revenues
Eastern     $ 1,268,964             23.5 %  $ 1,071,990             21.8 %
Southern      1,192,922             22.1      1,122,548             22.8
Western       1,098,849             20.4      1,043,928             21.2
Central         838,584             15.6        711,554             14.4
Canada          733,282             13.6        727,213             14.8
E&P             256,078              4.8        245,708              5.0
            $ 5,388,679            100.0 %  $ 4,922,941            100.0 %




                                       56

  Table of Contents

Segment EBITDA for our reportable segments is shown in the following table in
thousands of U.S. dollars and as a percentage of segment revenues for the
periods indicated:




                                   Years Ended December 31,
                   2019        % of Revenues       2018        % of Revenues
Western         $   338,563             30.8 %  $   318,401             30.5 %
Eastern             330,578             26.1 %      295,016             27.5 %
Southern            305,999             25.7 %      276,791             24.7 %
Central             292,111             34.8 %      259,794             36.5 %
Canada              256,405             35.0 %      261,233             35.9 %
E&P                 135,426             52.9 %      129,825             52.8 %
Corporate(a)       (15,438)                -        (8,211)                -
                $ 1,643,644             30.5 %  $ 1,532,849             31.1 %

Corporate functions include accounting, legal, tax, treasury, information

technology, risk management, human resources, training, direct acquisition

expenses, other administrative functions and share-based compensation

(a) expenses associated with Progressive Waste share-based grants existing at

June 1, 2016. Amounts reflected are net of allocations to the six operating

segments. For the years ended December 31, 2018 and 2017, amounts also

include Progressive Waste integration-related expenses.

A reconciliation of segment EBITDA to Income before income tax provision is included in Note 16 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Significant changes in revenue and segment EBITDA for our reportable segments
for the year ended December 31, 2019, compared to the year ended December 31,
2018, are discussed below.

Segment Revenue

Revenue in our Eastern segment increased $197.0 million, or 18.4%, to $1.269
billion for the year ended December 31, 2019, from $1.072 billion for the year
ended December 31, 2018.  The components of the increase consisted of net
revenue growth from acquisitions closed during, or subsequent to, the year ended
December 31, 2018, of $158.7 million and net price increases of $59.4 million,
partially offset by decreased recyclable commodity sales of $11.8 million
resulting from the impact of declines in prices for old corrugated cardboard and
other fiber products, solid waste volume decreases of $8.8 million primarily due
to declines in residential collection in our Albany, NY market and declines in
transfer station volumes in our New York City market exceeding higher landfill
special waste volumes and other revenue decreases of $0.5 million.

Revenue in our Southern segment increased $70.4 million, or 6.3%, to $1.193
billion for the year ended December 31, 2019, from $1.123 billion for the year
ended December 31, 2018.  The components of the increase consisted of net price
increases of $57.9 million and net revenue growth from acquisitions closed
during, or subsequent to, the year ended December 31, 2018, of $57.2 million,
partially offset by net revenue reductions from divestitures closed subsequent
to December 31, 2018 of $20.7 million, solid waste volume decreases of $19.7
million primarily associated with losses in residential revenue resulting from
the non-renewal of certain contracts acquired in the Progressive Waste
acquisition, decreases in commercial volumes in certain markets and reductions
in landfill municipal solid waste volumes, decreased recyclable commodity sales
of $4.2 million resulting from the impact of declines in prices for old
corrugated cardboard and other fiber products and other revenue decreases of
$0.1 million.

Revenue in our Western segment increased $54.9 million, or 5.3%, to
$1.099 billion for the year ended December 31, 2019, from $1.044 billion for the
year ended December 31, 2018.  The components of the increase consisted of net
price increases of $35.3 million, solid waste volume increases of $27.0 million
due to the net impact of increases associated with landfill municipal solid
waste, landfill special waste, residential collection and commercial collection
and net revenue growth from acquisitions closed during, or subsequent to, the
year ended December 31, 2018, of $1.9 million, partially offset by decreased
recyclable commodity sales of $5.6 million resulting from the impact of declines
in

                                       57

  Table of Contents

prices for old corrugated cardboard and other fiber products, decreased intermodal revenue of $3.5 million resulting from customer losses causing a reduction in cargo volume and other revenue decreases of $0.2 million.

Revenue in our Central segment increased $127.0 million, or 17.9%, to $838.6
million for the year ended December 31, 2019, from $711.6 million for the year
ended December 31, 2018.  The components of the increase consisted of revenue
growth from acquisitions closed during, or subsequent to, the year ended
December 31, 2018, of $90.2 million, net price increases of $41.0 million and
other revenue increases of $1.3 million, partially offset by decreased
recyclable commodity sales of $3.1 million resulting from the impact of declines
in prices for old corrugated cardboard and solid waste volume decreases of $2.4
million due primarily to declines in landfill special waste volumes.

Revenue in our Canada segment increased $6.1 million, or 0.8%, to $733.3 million
for the year ended December 31, 2019, from $727.2 million for the year ended
December 31, 2018. The components of the increase consisted of net price
increases of $43.3 million, revenue growth from acquisitions closed during, or
subsequent to, the year ended December 31, 2018, of $4.7 million and $0.7
million of other revenue increases, partially offset by a decrease of $16.6
million resulting from a lower average foreign currency exchange rate in effect
during the comparable reporting periods, a decrease of $13.4 million resulting
from reduced demand causing a reduction in the prices for renewal energy credits
associated with the generation of landfill gas, decreased recyclable commodity
sales of $7.2 million resulting from the impact of declines in prices for old
corrugated cardboard and other fiber products and solid waste volume decreases
of $5.4 million primarily associated with losses in residential revenue
resulting from the non-renewal of certain contracts acquired in the Progressive
Waste acquisition.

Revenue in our E&P segment increased $10.4 million, or 4.2%, to $256.1 million
for the year ended December 31, 2019, from $245.7 million for the year ended
December 31, 2018. The increase was due to increased drilling activity and E&P
disposal volumes primarily in our Louisiana Gulf of Mexico and Permian Basins.

Segment EBITDA

Segment EBITDA in our Western segment increased $20.2 million, or 6.3%, to
$338.6 million for the year ended December 31, 2019, from $318.4 million for the
year ended December 31, 2018.  The increase was due primarily to an increase in
revenues of $54.9 million, a decrease in intermodal expenses of $4.6 million
resulting from a decrease in intermodal cargo volume due to customer losses, a
decrease in corporate overhead expense allocations of $4.2 million due to a
reduction in expenses qualifying for allocation resulting in a decrease in the
overhead allocation rate, a decrease in professional fees expense of $1.4
million resulting primarily from reduced legal expenses resulting from the
settlement of certain legal matters subsequent to December 31, 2018, a decrease
in compressed natural gas expense of $1.1 million due primarily to the
recognition in 2019 of two years of tax credits associated with the purchase of
compressed natural gas fuel and a decrease in uncollectible accounts receivable
of $1.1 million resulting primarily from improved collection results and the
recovery of certain accounts reserved against in the prior period, partially
offset by an increase in direct and administrative labor expenses of $11.5
million due primarily to employee pay rate increases, an increase in taxes on
revenues of $7.2 million due primarily to higher landfill and collection
revenues, an increase in disposal expenses of $4.7 million due primarily to
higher residential and commercial collection volumes disposed at third party
facilities, an increase of $4.7 million resulting from higher costs per ton
charged by third party processors of recyclable commodities, an increase in
expenses for auto and workers' compensation claims of $3.6 million due primarily
to higher adjustments recorded in the prior year period to decrease projected
losses on outstanding claims and an increase in the deductible on our auto
claims resulting in a higher portion of costs being paid by us, an increase in
truck, container, equipment and facility maintenance and repair expenses of $3.3
million due to parts and service rate increases and variability impacting the
timing of major repairs, an increase in third-party trucking and transportation
expenses of $3.2 million due primarily to increased rates charged by third
parties to provide trucking and transportation services, an increase in 401(k)
matching expenses of $2.2 million due to our increasing the maximum matching
contribution rate to our employees, an increase in property tax expenses of $0.9
million due to the reassessment of a landfill site following the receipt of an
airspace expansion permit, an increase in landfill monitoring, environmental
compliance and daily cover expenses of $0.9 million due to increased compliance
requirements under our landfill operating permits, an increase in leachate
disposal expenses of $0.8 million due to higher costs per gallon for leachate
transportation and treatment, an increase in insurance premiums for our auto and
workers' compensation policies of $0.8 million due primarily to insurance cost
increases and $3.3 million of other net expense increases.

                                       58

Table of Contents

Segment EBITDA in our Eastern segment increased $35.6 million, or 12.1%, to
$330.6 million for the year ended December 31, 2019, from $295.0 million for the
year ended December 31, 2018.  The increase was due primarily to an increase in
revenues of $197.0 million, a decrease in disposal expenses of $4.4 million due
to improved internalization of collected volumes into our disposal locations, a
decrease in employee benefits expenses of $2.2 million due primarily to a
reduction in the employer-paid portion of medical claims resulting from a change
in medical plan providers and a decrease in compressed natural gas expense of
$0.9 million due primarily to the recognition in 2019 of two years of tax
credits associated with the purchase of compressed natural gas fuel, partially
offset by a net $124.8 million increase in cost of operations and SG&A expenses
attributable to acquired operations, an increase in direct and administrative
labor expenses of $7.6 million due primarily to employee pay rate increases, an
increase in truck, container, equipment and facility maintenance and repair
expenses of $7.2 million due to parts and service rate increases and variability
impacting the timing of major repairs, an increase of $6.3 million resulting
from higher costs per ton charged by third party processors of recyclable
commodities, an increase in third-party trucking and transportation expenses of
$5.0 million due primarily to increased rates charged by third parties to
provide trucking and transportation services, an increase in expenses for auto
and workers' compensation claims of $4.7 million due primarily to higher
adjustments recorded in the prior year period to reduce projected losses on
outstanding claims, an increase in leachate disposal expenses of $3.8 million
due to increased precipitation generating higher leachate volumes as well as
higher costs per gallon for leachate treatment, an increase in 401(k) matching
expenses of $2.1 million due to our increasing the maximum matching contribution
rate to our employees, an increase in diesel fuel expense of $1.6 million due
primarily to the prior year period benefiting from a favorable diesel fuel hedge
agreement that expired in December 2018, an increase in subcontracted operating
expenses of $0.9 million due primarily to utilizing third party haulers to
assist in the performance of certain collection contracts, an increase in
professional fees expenses of $0.9 million due primarily to increased costs
associated with converting newly acquired sites to our third party billing
statement solutions processor, an increase in insurance premiums for our auto
and workers' compensation policies of $0.6 million due primarily to insurance
cost increases and growth from acquisitions, an increase in corporate overhead
expense allocations of $0.6 million due to higher revenues for which overhead
allocations are based and $2.8 million of other net expense increases.

Segment EBITDA in our Southern segment increased $29.2 million, or 10.6%, to
$306.0 million for the year ended December 31, 2019, from $276.8 million for the
year ended December 31, 2018.  The increase was due to an increase in revenues
of $91.1 million from organic growth and acquisitions, a decrease in third party
disposal expenses of $5.4 million due to improved internalization of waste
collected at certain operating locations in Florida and Louisiana, a decrease in
corporate overhead expense allocations of $4.0 million due to a reduction in
expenses qualifying for allocation resulting in a decrease in the overhead
allocation rate, a decrease in compressed natural gas expense of $2.1 million
due primarily to the recognition in 2019 of two years of tax credits associated
with the purchase of compressed natural gas fuel, a decrease in employee
benefits expenses of $1.6 million due primarily to a reduction in the
employer-paid portion of medical claims resulting from a change in medical plan
providers, and a decrease in auto and workers' compensation claims of $1.3
million due primarily to decreased claim severity in the current year period,
partially offset by a net $32.0 million increase in cost of operations and SG&A
expenses attributable to acquired operations, an increase in direct and
administrative labor expenses of $12.6 million due primarily to employee pay
rate increases, an increase in truck, container, equipment and facility
maintenance and repair expenses of $10.7 million due to parts and service rate
increases and variability impacting the timing of major repairs, an increase in
third-party trucking and transportation expenses of $4.9 million due primarily
to increased rates charged by third parties to provide trucking and
transportation services, an increase in 401(k) matching expenses of $3.4 million
due to our increasing the maximum matching contribution rate to our employees,
an increase in diesel fuel expense of $2.7 million due primarily to the prior
year period benefiting from purchasing a portion of our diesel fuel needs under
a favorable fuel hedge agreement that expired in December 2018, an increase in
leachate disposal expenses of $2.2 million due to increased precipitation
generating higher leachate volumes as well as higher costs per gallon for
leachate treatment, a decrease to EBITDA of $1.7 million from the impact of
operations disposed of during, or subsequent to, the year ended December 31,
2018, an increase in equipment and facility rental expenses of $1.4 million due
primarily to increased truck rental expenses and the adoption on January 1, 2019
of new accounting standards associated with leases, an increase of $1.4 million
resulting from higher costs per ton charged by third party processors of
recyclable commodities, an increase in professional fees expenses of $1.1
million due primarily to increased costs associated with converting newly
acquired sites to our third party billing statement solutions processor, an
increase in insurance premiums for our auto and workers' compensation policies
of $0.7 million due primarily to insurance cost increases and growth from
acquisitions and other expense increases of $1.5 million.

                                       59

Table of Contents

Segment EBITDA in our Central segment increased $32.3 million, or 12.4%, to
$292.1 million for the year ended December 31, 2019, from $259.8 million for the
year ended December 31, 2018. The increase was due primarily to an increase in
revenues of $127.0 million and a decrease in employee benefits expenses of $2.6
million due primarily to a reduction in the employer-paid portion of medical
claims resulting from a change in medical plan providers, partially offset by a
net $74.5 million increase in cost of operations and SG&A expenses attributable
to acquired operations, an increase in direct and administrative labor expenses
of $8.5 million due primarily to employee pay rate increases, an increase in
third-party trucking and transportation expenses of $6.7 million due primarily
to outsourcing transportation services to third party operators at certain
locations, transportation associated with increased landfill special waste
volumes and increased rates charged by third parties to provide trucking and
transportation services, an increase in disposal expenses of $1.8 million due to
increased disposal rates and strategic adjustments to redirect certain collected
waste to third party disposal facilities, an increase in 401(k) matching
expenses of $1.8 million due to our increasing the maximum matching contribution
rate to our employees, an increase in diesel fuel expense of $1.3 million due
primarily to the prior year period benefiting from purchasing a portion of our
diesel fuel needs under a favorable fuel hedge agreement that expired in
December 2018, an increase of $1.2 million resulting from higher costs per ton
charged by third party processors of recyclable commodities, an increase in
truck, container, equipment and facility maintenance and repair expenses of $1.2
million due to the variability and timing of major repairs and an increase in
corporate overhead expense allocations of $0.3 million due to higher revenues
for which overhead allocations are based.

Segment EBITDA in our Canada segment decreased $4.8 million, or 1.8%, to
$256.4 million for the year ended December 31, 2019, from $261.2 million for the
year ended December 31, 2018.  The decrease was comprised of $5.8 million from a
reduction in the average foreign currency exchange rate in effect during the
comparable reporting periods, partially offset by an increase of $1.0 million
assuming foreign currency parity during the comparable reporting periods. The
$1.0 million increase, which assumes foreign currency parity, was due primarily
to an increase in revenues of $22.7 million, partially offset by an increase in
direct labor expenses of $8.4 million due primarily to a reduction in open
employment positions and employee pay rate increases, an increase in third-party
disposal expenses of $5.9 million due to higher disposal rates charged by
operators, an increase in truck, container, equipment and facility maintenance
and repair expenses of $5.2 million due to the variability and timing of major
repairs and an increase in subcontracted operating expenses of $2.2 million due
primarily to subcontracting the performance of a collection contract.

Segment EBITDA in our E&P segment increased $5.6 million, or 4.3%, to $135.4
million for the year ended December 31, 2019, from $129.8 million for the year
ended December 31, 2018.  The increase was due primarily to an increase in
revenues of $10.4 million, a decrease in third-party trucking and transportation
expenses of $1.9 million due primarily to changes in customer mix in the
Williston Basin reducing the requirement to provide trucking and transportation
services and a decrease in expenses for uncollectible accounts receivable of
$1.7 million due to adjustments to prior period reserve estimates, partially
offset by an increase in subcontracted operating expenses of $3.8 million due
primarily to subcontracting certain operating activities to third parties, an
increase in direct labor expenses of $2.1 million due to employee pay rate
increases and increased headcount to support higher disposal volumes, an
increase in corporate overhead expense allocations of $1.5 million due primarily
to higher revenues for which overhead allocations are based and other expense
increases of $1.0 million.

Segment EBITDA at Corporate decreased $7.2 million, to a loss of $15.4 million
for the year ended December 31, 2019, from a loss of $8.2 million for the year
ended December 31, 2018. The decrease was due to a reduction in corporate
overhead allocated to our segments of $6.3 million due to a reduction in
expenses qualifying for allocation resulting in a decrease in the overhead
allocation rate, an increase in deferred compensation expenses of $5.9 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 $5.6 million associated with our annual
recurring grant of restricted share units to our personnel, an increase in
direct acquisition expenses of $3.7 million due to higher acquisition activity,
an increase in 401(k) matching expenses of $3.1 million due to our increasing
the maximum matching contribution rate to our employees and credits recorded in
the prior year period from employee forfeitures, an increase in payroll and
payroll-related expenses of $2.1 million due primarily to annual compensation
increases, an increase in software licenses and subscriptions expenses of $1.5
million due primarily to the addition of new human resources and data security
applications, an increase in management training expenses of $1.2 million due to
an expansion of our management training curriculum and $1.1 million of other net
expense increases, partially offset by a decrease of $13.4 million in
professional fees expense resulting primarily from reduced legal expenses
resulting from the settlement of

                                       60

Table of Contents

certain legal matters subsequent to December 31, 2018, a decrease of $5.0
million in equity-based compensation expenses associated with adjusting common
shares of Waste Connections, Inc. held in our deferred compensation plan by
certain key executives to fair value as a result of the shares being exchanged
for other investment options, a further decrease in equity-based compensation
expenses of $1.1 million for 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 based on changes in fair value, a
decrease in integration-related expenses of $2.8 million incurred in the prior
year period resulting from the acquisition of Progressive Waste and a decrease
in accrued recurring cash incentive compensation expense to our management of
$1.0 million.

Liquidity and Capital Resources

The following table sets forth certain cash flow information for the years ended December 31, 2019 and 2018 (in thousands of U.S. dollars):

                                                                   2019             2018
Net cash provided by operating activities                      $   1,540,547    $   1,411,235
Net cash used in investing activities                            (1,426,006)      (1,371,820)
Net cash used in financing activities                               

(95,894) (187,578) Effect of exchange rate changes on cash, cash equivalents and restricted cash

608 (1,290) Net increase (decrease) in cash, cash equivalents and restricted cash

19,255 (149,453) Cash, cash equivalents and restricted cash at beginning of period

                                                               403,966          553,227
Plus: change in cash held for sale                                         -              192

Cash, cash equivalents and restricted cash at end of period $ 423,221 $ 403,966

Operating Activities Cash Flows

For the year ended December 31, 2019, net cash provided by operating activities
was $1.541 billion. For the year ended December 31, 2018, net cash provided by
operating activities was $1.411 billion. The $129.3 million increase was due
primarily to the following:

Increase in earnings - Our increase in net cash provided by operating

activities was favorably impacted by $134.3 million from an increase in net

income, excluding depreciation, intangible amortization, lease amortization,

1) deferred taxes, equity based compensation, adjustments to and payments of

contingent consideration recorded in earnings and impairments and other

operating items, due primarily to the impact of acquisitions closed subsequent

    to December 31, 2018, price-led earnings growth at certain solid waste
    segments and gross margins recognized on E&P volume growth.

Accounts payable and accrued liabilities - Our increase in net cash provided

2) by operating activities was favorably impacted by $29.7 million from accounts

payable and accrued liabilities due primarily to period end timing of payments

to vendors for goods and services.

Accounts receivable - Our increase in net cash provided by operating

3) activities was favorably impacted by $14.8 million from accounts receivable

due to improved collection results.

Prepaid expenses - Our increase in net cash provided by operating activities

4) was unfavorably impacted by $30.6 million from prepaid expenses due primarily

to a higher utilization of prepaid income taxes during the prior year period.

Other long-term liabilities - Our increase in net cash provided by operating

activities was unfavorably impacted by $16.9 million from other long-term

5) liabilities due primarily to lease payments, partially offset by increased

liabilities associated with new or renewed leases and an increase in employee

contributions and earnings under our deferred compensation plan.

As of December 31, 2019, we had a working capital surplus of $123.4 million,
including cash and equivalents of $326.7 million. Our working capital surplus
decreased $82.7 million from a working capital surplus of $206.1 million at
December 31, 2018, including cash and equivalents of $319.3 million, due
primarily to decreased cash balances and the adoption of new accounting
standards associated with leases requiring a current liability to be recorded
for the portion of lease payments payable with the next twelve months. To date,
we have experienced no loss or lack of access to our cash

                                       61

Table of Contents

and equivalents; however, we can provide no assurances that access to our cash
and equivalents will not be impacted by adverse conditions in the financial
markets.  Our strategy in managing our working capital is generally to apply the
cash generated from our operations that remains after satisfying our working
capital and capital expenditure requirements, along with share repurchase and
dividend programs, to reduce the unhedged portion of our indebtedness under our
Credit Agreement and to minimize our cash balances.

Investing Activities Cash Flows

Net cash used in investing activities increased $54.2 million to $1.426 billion
for the year ended December 31, 2019, from $1.372 billion for the year ended
December 31, 2018. The significant components of the increase included the
following:

An increase in capital expenditures of $46.9 million due to an increase in

1) landfill site costs, facilities and heavy equipment for operations owned in

the comparable periods;

An increase in capital expenditures of $41.4 million due to additional trucks,

2) containers, heavy equipment and landfill site costs for operations acquired

subsequent to December 31, 2017;

An increase in capital expenditures of $31.7 million due to the purchase of a

3) greenfield landfill site in our Southern segment that will be developed into

an operating location in the future; less

A decrease in cash paid for acquisitions of $93.5 million due primarily to a

4) decrease in the overall size of acquisitions closed during the year ended

December 31, 2019.

Financing Activities Cash Flows

Net cash used in financing activities decreased $91.7 million to $95.9 million
for the year ended December 31, 2019, from $187.6 million for the year ended
December 31, 2018. The significant components of the decrease included the
following:

A decrease from the net change in long-term borrowings of $53.2 million

(long-term borrowings increased $105.1 million during the year ended December

1) 31, 2019 and increased $51.9 million during the year ended December 31, 2018)

due primarily to the net of higher repayments in the prior year of long term

debt assumed and paid in full from acquisitions being partially offset by

prior year borrowings to fund acquisitions; and

2) A decrease in payments to repurchase our common shares of $58.9 million due to

no shares being repurchased during the year ended December 31, 2019; less

An increase in cash dividends paid of $22.5 million due primarily to an

3) increase in our average quarterly dividend rate for the year ended December

31, 2019 to $0.166 per share, from $0.145 per share for the year ended

December 31, 2018.

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

On July 25, 2019, 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 13,184,474 of our common shares during the period of
August 8, 2019 to August 7, 2020 or until such earlier time as the NCIB is
completed or terminated at our option. Shareholders may obtain a copy of our TSX
Form 12 - Notice of Intention to Make a Normal Course Issuer Bid, without
charge, by request directed to our Senior Vice President and Chief Financial
Officer at [phone]. 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. Information regarding our NCIB plan can be found under the
"Shareholders' Equity" section in Note 13 to the consolidated financial
statements included in Item 8 of this Annual Report on Form 10K and is
incorporated herein by reference.

The Board of Directors authorized the initiation of a quarterly cash dividend in
October 2010 and has increased it on an annual basis. In October 2019, our Board
of Directors authorized an increase to our regular quarterly cash dividend

of

                                       62

  Table of Contents

$0.025, from $0.16 to $0.185 per share. Cash dividends of $175.1 million and $152.6 million were paid during the years ended December 31, 2019 and 2018, respectively. We cannot assure you as to the amounts or timing of future dividends.

We made $634.4 million in capital expenditures for property and equipment and
$31.7 million for the purchase of a greenfield landfill site during the year
ended December 31, 2019, and we expect to make total capital expenditures for
property and equipment of between $600 million and $625 million in 2020.  We
intend to fund our planned 2020 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
MSW and E&P waste businesses. If we acquire additional landfill disposal
facilities, we may also have to make significant expenditures to bring them into
compliance with applicable regulatory requirements, obtain permits or expand our
available disposal capacity. We cannot currently determine the amount of these
expenditures because they will depend on the number, nature, condition and
permitted status of any acquired landfill disposal facilities. We believe that
our cash and equivalents, Credit Agreement and the funds we expect to generate
from operations will provide adequate cash to fund our working capital and other
cash needs for the foreseeable future. However, disruptions in the capital and
credit markets could adversely affect our ability to draw on our Credit
Agreement or raise other capital. Our access to funds under the Credit Agreement
is dependent on the ability of the banks that are parties to the agreement to
meet their funding commitments. Those banks may not be able to meet their
funding commitments if they experience shortages of capital and liquidity or if
they experience excessive volumes of borrowing requests within a short period of
time.

We have a revolving credit and term loan agreement (the "Credit Agreement") with
Bank of America, N.A., acting through its Canada Branch, as global agent, the
swing line lender and letter of credit issuer, Bank of America, N.A., as the
U.S. Agent and a letter of credit issuer, the lenders (the "Lenders") and any
other financial institutions from time to time party thereto. There are no
subsidiary guarantors under the Credit Agreement. The Credit Agreement has a
scheduled maturity date of March 21, 2023.

As of December 31, 2019, $700.0 million under the term loan and $916.2 million
under the revolving credit facility were outstanding under our Credit Agreement,
exclusive of outstanding standby letters of credit of $107.6 million.

On June 1, 2016, we entered into a Master Note Purchase Agreement (as
supplemented by the First Supplement dated as of February 13, 2017 (the "2016
First Supplement") and as amended, restated, amended and restated, assumed,
supplemented or modified from time to time, the "2016 NPA") with certain
accredited institutional investors. On April 20, 2017, pursuant to the 2016 NPA,
and the 2016 First Supplement, we issued and sold to certain accredited
institutional investors $400.0 million aggregate principal amount of senior
unsecured notes consisting of $150.0 million aggregate principal amount, which
will mature on April 20, 2024, with an annual interest rate of 3.24% (the "2024
Senior Notes") and $250.0 million aggregate principal amount, which will mature
on April 20, 2027, with an annual interest rate of 3.49% (the "2027 Senior
Notes" and collectively with the 2024 Senior Notes, the "2017A Senior Notes") in
a private placement.

On March 21, 2018, we entered into that certain Amendment No. 1 to Master Note Purchase Agreement (the "2016 NPA First Amendment"), with each of the holders party thereto, which amended the 2016 NPA.

The 2016 NPA First Amendment, among other things, provided for certain
amendments to the 2016 NPA to facilitate (i) certain conforming changes to align
certain provisions of the 2016 NPA, the 2008 NPA (as defined below) and the
Credit Agreement and (ii) the release of all subsidiary guarantors in relation
to obligations under the 2016 NPA and the 2016 NPA Notes (as defined below) (the
"2016 Release").

Pursuant to the terms and conditions of the 2016 NPA, we have outstanding senior
unsecured notes (the "2016 NPA Notes") at December 31, 2019 consisting of
(i) $150.0 million of 2.39% senior notes due June 1, 2021 (the "New 2021 Senior
Notes"), (ii) $200.0 million of 2.75% senior notes due June 1, 2023 (the "2023
Senior Notes"), (iii) $400.0 million of 3.03% senior notes due June 1, 2026 (the
"2026 Senior Notes") and (iv) $400.0 million of the 2017A Senior Notes.

                                       63

Table of Contents

The New 2021 Senior Notes, the 2023 Senior Notes, the 2026 Senior Notes and the
2017A Senior Notes bear interest at fixed rates with interest payable in arrears
semi-annually, and on the respective maturity dates, until the principal
thereunder becomes due and payable.

In July 2008, the Company, certain subsidiaries of the Company (together with
the Company, the "Obligors") and certain accredited institutional investors
entered into that certain Master Note Purchase Agreement, dated July 15, 2008
(as amended, restated, assumed, supplemented or otherwise modified from time to
time, the "2008 NPA").

On March 21, 2018, we entered into that certain Amendment No. 7 to the 2008 NPA
(the "2008 NPA Seventh Amendment"), with each of the holders party thereto,
which amended the 2008 NPA. The 2008 NPA Seventh Amendment, among other things,
provides certain amendments to the 2008 NPA to facilitate (i) certain conforming
changes to align the provisions of the 2008 NPA, the 2016 NPA and the Credit
Agreement and (ii) the release of all subsidiary guarantors in relation to
obligations under the 2008 NPA and the 2008 NPA Notes (the "2008 Release").

Pursuant to the terms and conditions of the 2008 NPA, we have outstanding senior
unsecured notes (the "2008 NPA Notes") at December 31, 2019 consisting of (i)
$100.0 million of 4.64% senior notes due 2021 (the "2021 Senior Notes"), (ii)
$125.0 million of 3.09% senior notes due 2022 (the "2022 Senior Notes") and
(iii) $375.0 million of 3.41% senior notes due 2025 (the "2025 Senior Notes").
We repaid at maturity our $50.0 million of 4.00% senior notes due April 2018
(the "2018 Senior Notes") in April 2018.  We also repaid at maturity our $175.0
million of 5.25% senior notes due 2019 (the "2019 Senior Notes") in November
2019.

The 2021 Senior Notes, the 2022 Senior Notes and the 2025 Senior Notes bear
interest at fixed rates with interest payable in arrears semi-annually, and on
the respective maturity dates, until the principal thereunder becomes due and
payable.

On November 16, 2018, we completed an underwritten public offering of $500.0
million aggregate principal amount of our 4.25% Senior Notes due 2028 (the "2028
Senior Notes"). The 2028 Senior Notes were issued under the Indenture, dated as
of November 16, 2018 (the "Base Indenture"), by and between the Company and U.S.
Bank National Association, as trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture, dated as of November 16, 2018 (the Base Indenture
as so supplemented, the "Indenture").

We will pay interest on the 2028 Senior Notes semi-annually, commencing on
June 1, 2019, and the 2028 Senior Notes will mature on December 1, 2028. The
2028 Senior Notes are our senior unsecured obligations, ranking equally in right
of payment with our other existing and future unsubordinated debt and senior to
any of our future subordinated debt. The 2028 Senior Notes are not guaranteed by
any of our subsidiaries.

On April 16, 2019, we completed an underwritten public offering of $500.0
million aggregate principal amount of our 3.50% Senior Notes due 2029 (the "2029
Senior Notes"). The 2029 Senior Notes were issued under the Indenture, dated as
of November 16, 2018, by and between the Company and U.S. Bank National
Association, as trustee, as supplemented by the Second Supplemental Indenture,
dated as of April 16, 2019.

 We will pay interest on the 2029 Senior Notes semi-annually, commencing on
November 1, 2019, and the 2029 Senior Notes will mature on May 1, 2029.  The
2029 Senior Notes are our senior unsecured obligations, ranking equally in right
of payment with our other existing and future unsubordinated debt and senior to
any of our future subordinated debt.  The 2029 Senior Notes are not guaranteed
by any of our subsidiaries.

See Note 10 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details on the debt agreements.

                                       64

  Table of Contents

Contractual Obligations

As of December 31, 2019, we had the following contractual obligations:

                                                                   Payments Due by Period
                                                           (amounts in

thousands of U.S. dollars)

                                                          Less Than      1 to 3                          Over 5
Recorded Obligations                          Total         1 Year        Years       3 to 5 Years        Years
Long-term debt                             $ 4,375,885    $      465    $ 379,728    $    1,967,186    $ 2,028,506
Cash interest payments                     $   748,412    $  132,213    $ 267,351    $      147,388    $   201,460
Contingent consideration                   $    90,452    $   26,159    $  23,992    $        3,224    $    37,077
Operating leases                           $   227,085    $   36,718    $ 

65,519 $ 49,132 $ 75,716 Final capping, closure and post-closure $ 1,506,491 $ 7,707 $ 45,356 $ 14,541 $ 1,438,887

Long-term debt payments include:

$916.2 million in principal payments due March 2023 related to our revolving

credit facility under our Credit Agreement. Advances are available under the

Credit Agreement in U.S. dollars and Canadian dollars and bear interest at

fluctuating rates (See Note 10). At December 31, 2019, $897.0 million of the

1) outstanding borrowings drawn under the revolving credit facility were in U.S.

LIBOR rate loans, bearing interest at a total rate of 2.90% on such date. At

December 31, 2019, $19.2 million of the outstanding borrowings drawn under the

revolving credit facility were in Canadian-based bankers' acceptances, bearing

interest at a total rate of 3.18% on such date.

$700.0 million in principal payments due March 2023 related to our term loan

under our Credit Agreement. Outstanding amounts on the term loan can be either

2) base rate loans or LIBOR loans. At December 31, 2019, all amounts outstanding

under the term loan were in LIBOR loans which bear interest at the LIBOR rate

    plus the applicable margin (for a total rate of 2.90% on such date).

3) $100.0 million in principal payments due 2021 related to our 2021 Senior

Notes. The 2021 Senior Notes bear interest at a rate of 4.64%.

4) $150.0 million in principal payments due 2021 related to our New 2021 Senior

    Notes. The New 2021 Senior Notes bear interest at a rate of 2.39%.

5) $125.0 million in principal payments due 2022 related to our 2022 Senior

Notes. The 2022 Senior Notes bear interest at a rate of 3.09%.

6) $200.0 million in principal payments due 2023 related to our 2023 Senior

Notes. The 2023 Senior Notes bear interest at a rate of 2.75%.

7) $150.0 million in principal payments due 2024 related to our 2024 Senior

Notes. The 2024 Senior Notes bear interest at a rate of 3.24%.

8) $375.0 million in principal payments due 2025 related to our 2025 Senior

Notes. The 2025 Senior Notes bear interest at a rate of 3.41%.

9) $400.0 million in principal payments due 2026 related to our 2026 Senior

Notes. The 2026 Senior Notes bear interest at a rate of 3.03%.

10) $250.0 million in principal payments due 2027 related to our 2027 Senior

     Notes. The 2027 Senior Notes bear interest at a rate of 3.49%.


                                       65

  Table of Contents

11) $500.0 million in principal payments due 2028 related to our 2028 Senior

Notes. The 2028 Senior Notes bear interest at a rate of 4.25%.

12) $500.0 million in principal payments due 2029 related to our 2029 Senior

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

$9.6 million in principal payments related to our notes payable to sellers

13) and other third parties. Our notes payable to sellers and other third parties

bear interest at rates between 2.75% and 10.90% at December 31, 2019, and

have maturity dates ranging from 2020 to 2036.

The following assumptions were made in calculating cash interest payments:

We calculated cash interest payments on the Credit Agreement using the LIBOR

1) rate plus the applicable LIBOR margin and the Canadian Dollar Offered Rate

plus the applicable acceptance fee at December 31, 2019. We assumed the Credit

Agreement is paid off when it matures in March 2023.

We calculated cash interest payments on our interest rate swaps using the

2) stated interest rate in the swap agreement less the LIBOR rate through the

earlier expiration of the term of the swaps or the term of the credit

facility.

Contingent consideration payments include $69.0 million recorded as liabilities
in our consolidated financial statements at December 31, 2019, and $21.5 million
of future interest accretion on the recorded obligations.

We are party to operating lease agreements as discussed in Note 8 to the
consolidated financial statements included in Item 8 of this Annual Report on
Form 10 K. These lease agreements are established in the ordinary course of our
business and are designed to provide us with access to facilities at
competitive, market-driven prices.

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            $    129,373     $    76,799

$ 52,574 $ - $ -

We are party to unconditional purchase obligations as discussed in Note 12 to

the consolidated financial statements included in Item 8 of this Annual

Report on Form 10 K. 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, 2019, our

(1) unconditional purchase obligations consisted of multiple fixed-price fuel

purchase contracts under which we have 49.0 million gallons remaining to be

purchased for a total of $129.4 million. The current fuel purchase contracts

expire on or before December 31, 2021. These arrangements have not materially

affected our financial position, results of operations or liquidity during

the year ended December 31, 2019, nor are they expected to have a material

impact on our future financial position, results of operations or liquidity.

We have obtained standby letters of credit as discussed in Note 10 to the
consolidated financial statements included in Item 8 of this Annual Report on
Form 10-K and financial surety bonds as discussed in Note 12 to the consolidated
financial statements included in Item 8 of this Annual Report on Form 10-K.
These standby letters of credit and financial surety bonds are generally
obtained to support our financial assurance needs and landfill and E&P
operations. These arrangements have not materially affected our financial
position, results of operations or liquidity during the year ended December 31,
2019, nor are they expected to have a material impact on our future financial
position, results of operations or liquidity.

                                       66

Table of Contents

From time to time, we evaluate our existing operations and their strategic importance to us. If we determine that a given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations. Although we believe our reporting units would not be impaired by such dispositions, we could incur losses on them.

New Accounting Pronouncements

See Note 2 to the consolidated financial statements included in Item 8 of this
Annual Report on Form 10-K for a description of the new accounting standards
that are applicable to us.

Non-GAAP Financial Measures

Adjusted Free Cash Flow

We present adjusted free cash flow, a non-GAAP financial measure, supplementally
because it is widely used by investors as a valuation and liquidity measure in
the solid waste industry. Management uses adjusted free cash flow as one of the
principal measures to evaluate and monitor the ongoing financial performance of
our operations. 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 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. Our adjusted
free cash flow for the years ended December 31, 2019, 2018 and 2017, are
calculated as follows (amounts in thousands of U.S. dollars):


                                                               Years Ended December 31,
                                                          2019           2018           2017
Net cash provided by operating activities              $ 1,540,547    $ 1,411,235    $ 1,187,260
Plus (less): Change in book overdraft                      (2,564)          (839)          8,241
Plus: Proceeds from disposal of assets                       3,566          5,385         28,432
Less: Capital expenditures for property and
equipment                                                (634,406)      (546,145)      (479,287)
Less: Distributions to noncontrolling interests              (570)          (103)              -

Adjustments:

Payment of contingent consideration recorded in
earnings (a)                                                     -             11         10,012
Cash received for divestitures (b)                         (2,376)        (2,030)       (21,100)
Transaction-related items (c)                               12,335          8,607          5,700
Integration-related and other expenses (d)                       -          2,760         10,602
Pre-existing Progressive Waste share-based grants
(e)                                                          4,810          5,772         17,037
Synergy bonus (f)                                                -              -         11,798
Tax effect (g)                                             (4,565)        (4,752)       (14,804)
Adjusted free cash flow                                $   916,777    $   879,901    $   763,891

Reflects the addback of acquisition-related payments for contingent

(a) consideration that were recorded as expenses in earnings and as a component

of cash flows from operating activities as the amounts paid exceeded the fair

value of the contingent consideration recorded at the acquisition date.

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

of certain Progressive Waste operations.

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

(d) Reflects the addback of integration-related items, including rebranding

costs, associated with the Progressive Waste acquisition.

(e) Reflects the cash settlement of pre-existing Progressive Waste share-based

awards during the period.

(f) Reflects the addback of cash bonuses paid pursuant to our Synergy Bonus

Program in conjunction with the Progressive Waste acquisition.

(g) The aggregate tax effect of footnotes (a) through (f) is calculated based on

     the applied tax rates for the respective periods.




                                       67

  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. Management uses adjusted EBITDA as one of the principal
measures to evaluate and monitor the ongoing financial performance of our
operations. We define adjusted EBITDA as net income attributable to Waste
Connections, plus or minus net income (loss) attributable to noncontrolling
interests, plus or minus income tax provision (benefit), plus interest expense,
less interest income, plus depreciation and amortization expense, plus closure
and post-closure accretion expense, plus or minus any loss or gain on
impairments and other operating items, plus other expense, less other income. We
further adjust this calculation to exclude the effects of other 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 financial measures. Other companies may calculate adjusted EBITDA
differently. Our adjusted EBITDA for the years ended December 31, 2019, 2018 and
2017, are calculated as follows (amounts in thousands of U.S. dollars):




                                                               Years Ended December 31,
                                                          2019           2018           2017
Net income attributable to Waste Connections           $   566,841    $   546,871    $   576,817
Plus (less): Net income (loss) attributable to
noncontrolling interests                                     (160)            283            603
Plus (less): Income tax provision (benefit)                139,210        159,986       (68,910)
Plus: Interest expense                                     147,368        132,104        125,297
Less: Interest income                                      (9,777)        (7,170)        (5,173)
Plus: Depreciation and amortization                        743,918        680,487        632,484
Plus: Closure and post-closure accretion                    14,471         12,997         11,781
Plus: Impairments and other operating items                 61,948         20,118        156,493
Plus (less): Other expense (income), net                   (5,704)            170        (1,536)
Adjustments:
Plus: Transaction-related expenses (a)                      12,335          8,607          5,700
Plus: Fair value changes to certain equity awards
(b)                                                          3,104          9,205         16,357
Plus: Integration-related and other expenses (c)                 -         

2,760         10,612
Adjusted EBITDA                                        $ 1,673,554    $ 1,566,418    $ 1,460,525

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

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

(c) Reflects the addback of integration-related items, including rebranding

     costs, associated with the Progressive Waste acquisition.




                                       68

  Table of Contents

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

We present adjusted net income attributable to Waste Connections and adjusted
net income per diluted share attributable to Waste Connections, both non-GAAP
financial measures, supplementally because they are widely used by investors as
a valuation measure in the solid waste industry. Management uses adjusted net
income attributable to Waste Connections and adjusted net income per diluted
share attributable to Waste Connections as one of the principal measures to
evaluate and monitor the ongoing financial performance of our operations. We
provide adjusted net income attributable to Waste Connections to exclude the
effects of items management believes impact the comparability of operating
results between periods. Adjusted net income attributable to Waste Connections
has limitations due to the fact that it excludes items that have an impact on
our financial condition and results of operations. Adjusted net income
attributable to Waste Connections and adjusted net income per diluted share
attributable to Waste Connections are not a substitute for, and should be used
in conjunction with, GAAP financial measures. Other companies may calculate
these non-GAAP financial measures differently. Our adjusted net income
attributable to Waste Connections and adjusted net income per diluted share
attributable to Waste Connections for the years ended December 31, 2019, 2018
and 2017, are calculated as follows (amounts in thousands of U.S. dollars,

except per share amounts):




                                                               Years Ended December 31,
                                                           2019          2018          2017
Reported net income attributable to Waste
Connections                                             $  566,841    $  546,871    $   576,817
Adjustments:
Amortization of intangibles (a)                            125,522       107,779        102,297
Impairments and other operating items (b)                   61,948        20,118        156,493
Transaction-related expenses (c)                            12,335         8,607          5,700
Fair value changes to certain equity awards (d)              3,104         9,205         16,357
Integration-related and other expenses (e)                       -        

2,760         10,612
Tax effect (f)                                            (50,189)      (37,165)       (91,979)
Tax items (g)                                                    -         9,093      (205,631)
Adjusted net income attributable to Waste
Connections                                             $  719,561    $  

667,268 $ 570,666

Diluted earnings per common share attributable to
Waste Connections' common shareholders:
Reported net income                                     $     2.14    $     2.07    $      2.18
Adjusted net income                                     $     2.72    $     2.52    $      2.16

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

intangible assets.

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

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

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

(e) Reflects the addback of integration-related items, including rebranding

costs, associated with the Progressive Waste acquisition.

(f) The aggregate tax effect of the adjustments in footnotes (a) through (e) is

calculated based on the applied tax rates for the respective periods.

In 2018, primarily reflects refinements to the estimates, as provided by

Staff Accounting Bulletin No. 118, of the impact of a portion of our U.S.

earnings no longer permanently reinvested in conjunction with the Tax Act. In

(g) 2017, reflects income tax benefit primarily resulting from a reduction of

deferred tax liabilities due to enactment of the Tax Act, partially offset by

deferred income tax expense due to a portion of our U.S. earnings no longer

permanently reinvested, also related to the Tax Act.

Inflation

Other than volatility in fuel prices, third party brokerage and labor costs in
certain markets, inflation has not materially affected our operations in
recent years. Consistent with industry practice, many of our contracts allow us
to pass through certain costs to our customers, including increases in landfill
tipping fees and, in some cases, fuel costs. Therefore, we believe that we
should be able to increase prices to offset many cost increases that result

from
inflation in

                                       69

  Table of Contents

the ordinary course of business. However, competitive pressures or delays in the
timing of rate increases under our contracts may require us to absorb at least
part of these cost increases, especially if cost increases exceed the average
rate of inflation. Management's estimates associated with inflation have an
impact on our accounting for landfill liabilities.

© Edgar Online, source Glimpses