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.

We make statements in this Annual Report on Form 10-K that are forward-looking in nature. These include:

Statements regarding our landfills, including capacity, duration, special

? projects, demand for and pricing of recyclables, landfill alternatives and

related capital expenditures;

? Discussion of competition, loss of contracts, price increases and additional

exclusive arrangements;

Forecasts of cash flows necessary for operations and free cash flow to reduce

? leverage as well as our ability to draw on our credit facility and access the

capital markets to refinance or expand;

? Statements regarding oil prices and fuel price expectations;

? Reviews of regulatory developments and potential changes in environmental,

health, safety and tax laws and regulations; and

Other statements on a variety of topics such as the COVID-19 pandemic, credit

? risk of customers, seasonality, labor/pension costs and labor union activity,

operational and safety risks, acquisitions, litigation results, goodwill

impairments, insurance costs and cybersecurity threats.

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

Our ?business and operations are subject to a variety of risks and uncertainties
and, consequently, actual results may differ ?materially from those projected by
any forward-looking statements. Factors that could cause actual results to
differ ?from those projected include, but are not limited to, those listed under
the heading "ITEM 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-?K.

There may be additional risks of which we are not presently aware or that we
currently believe are immaterial that ?could have an adverse impact on our
business. We make no commitment to revise or update any forward-looking
?statements to reflect events or circu?mstances that may change, unless required
under applicable securities laws.

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.

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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 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. Macroeconomic and geopolitical conditions,
including a significant decline in oil prices driven by both surplus production
and supply, as well as the decrease in demand caused by factors including the
COVID-19 pandemic, have resulted in decreased levels of oil and natural gas
exploration and production activity and a corresponding decrease in demand for
our E&P waste services.  Through June 30, 2020, we maintained a separate E&P
segment, which was combined with our Southern segment on July 1, 2020. During
the year ended December 31, 2020, our total E&P revenue declined 44%, compared
to the prior year period, on rig count declines of 56% in certain basins.  The
most impacted basins included the Williston Basin in North Dakota, the Eagle
Ford Basin in Texas and the Powder River Basin in Wyoming, all of which had
relatively high costs associated with drilling, making them less attractive than
other basins, including the Permian Basin in Texas and New Mexico. Additionally,
across the industry there is uncertainty regarding future demand for oil and
related services, as noted by several energy companies, many of whom are
customers of our E&P operations. These companies have written down the values of
their oil and gas assets in anticipation of the potential for the
decarbonization of their energy product mix given an increased global focus on
reducing greenhouse gases and addressing climate change.  Such uncertainty
regarding global demand has had a significant impact on the investment and
operating plans of our E&P waste customers in the basins where we operate.
Based on these events and the outlook for future drilling activity and resulting
demand for our E&P waste services not showing significant improvement, we
concluded that the carrying value of property and equipment at four E&P
landfills exceeded their estimated fair value, resulting in an impairment charge
of $417.4 million being recorded during the year ended December 31, 2020.  See
the section Impairments of Property and Equipment and Finite-Lived Intangible
Assets in Note 3, "Summary of Significant Accounting Policies," of our
consolidated financial statements included in Item 8 of this Annual Report on
Form 10-K for a further discussion of this impairment charge.

Executive Overview

We are an integrated solid waste services company that provides non-hazardous
waste collection, transfer and disposal services, along with recycling and
resource recovery, in mostly exclusive and secondary markets across 43 states in
the U.S. and six provinces in Canada. Waste Connections also provides
non-hazardous oilfield waste treatment, recovery and disposal services in
several basins across the U.S., as well as intermodal services for the movement
of cargo and solid waste containers in the Pacific Northwest.

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.

THE COVID-19 PANDEMIC'S IMPACT ON OUR RESULTS OF OPERATIONS

During the first quarter of 2020, COVID-19 emerged across North America. The World Health Organization declared COVID-19 a global pandemic on March 11, 2020.

The COVID-19 pandemic has had adverse impacts on our business since March 2020,
when we experienced decreasing revenues associated with declines primarily in
commercial collection, transfer station and landfill volumes as a result of
COVID-19-related economic disruptions. In addition, and to a lesser extent,
solid waste roll off revenue was impacted in some markets, and year-over-year
reductions in E&P revenue, resulting primarily from the drop in the value of
crude oil, were driven by both surplus production and supply, as well as the
decrease in demand caused by factors including the COVID-19 pandemic. In late
February, we formed a task force to commence preparedness in the event the

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scope of the COVID-19 outbreak expanded. Protecting the health, safety and
welfare of our employees was and remains our first priority, which led to our
introduction of various health and safety protocols in early March, including
the distribution of safety and preparedness updates, revised policies on
employee time off, leaves of absence and short-term disability, modifications to
our operations to minimize community spread of COVID-19, and enhanced resources
to enable remote working, communications and digital connectivity to help
non-frontline employees work from home more efficiently.

In recognition of the Company's status as an essential services provider, and to
reduce employee concerns regarding income, healthcare and family obligations, we
implemented supplemental pay and bonuses for frontline employees representing
80% of our workforce, emergency wages for employees out of work due to COVID-19
and extended benefits coverage in markets where reductions in customer activity
have impacted employee hours. In addition, we expanded our Employee Relief Fund
and initiated the Waste Connections Scholarship Program to help employee
children achieve their vocational, technical and university education goals.
During 2020, the aggregate impact of these actions was an increase to our cost
of operations of over $35 million, primarily due to supplemental pay for our
frontline employees. We also implemented a number of measures to reduce our
operating costs and preserve cash, which included hiring limitations, wage
freezes for all managers and region and corporate personnel, restrictions on
travel, group meetings and other discretionary spending, and the suspension of
the Company's 401(k) match effective June 1, 2020. In addition, we deferred
qualified U.S. payroll and other tax payments as permitted by the Coronavirus
Aid, Relief, and Economic Security Act, or the CARES Act, which the U.S.
government enacted on March 27, 2020. In total in 2020, we deferred $44.6
million in payroll taxes in conjunction with the CARES Act, of which 50% is due
by December 31, 2021 and 50% is due by December 31, 2022. To the extent
available, we also utilized similar programs being offered by the federal and
provincial governments in Canada and received CAD $2.6 million in federal wage
subsidies pursuant to the Canadian Emergency Wage Subsidy.

During the second quarter of 2020, our business was impacted by the COVID-19
pandemic due to a reduction in revenue primarily in solid waste commercial
collection, roll off activity and solid waste transfer and disposal resulting
from a slowdown in activity associated with shelter-in-place or other closure
restrictions or requirements imposed in response to the COVID-19 pandemic.
Commercial collection activity slowed down in certain markets due to service
reductions or suspensions by customers whose business activity was curtailed by
such measures, with third party transfer and disposal volumes and roll off
activity typically following similar patterns, and some of the declines in E&P
waste activity may also be related to the COVID-19 pandemic. The impacts to
solid waste activity that we experienced during the second quarter varied by
geography, the size and customer mix in each market, and the timing and extent
of shutdown requirements and reopening policies across markets. In some markets,
the impacts abated during the second quarter, as reopenings resulted in
increased service requirements by commercial customers and higher landfill
volumes and roll off activity; in other cases, where reopenings were delayed or
more limited, the improvements were less pronounced.

Through the second quarter of 2020, about 53% of solid waste commercial
customers and 42% of associated revenue in competitive markets we track that had
suspended or reduced service due to the COVID-19 pandemic, had since reached out
for either a resumption of service or an increase in frequency. Volumes in all
of our solid waste regions exceeded our initial expectations, resulting in solid
waste revenue down 5.3% on a same store basis in the quarter, about 0.7
percentage points better than the expectations we provided in May. Moreover,
excluding the most impacted markets in the Northeast and Canada, where closures
were widespread and volumes were most impacted, solid waste revenues were down
only 1.3% year over year on a same store basis.

During the third quarter of 2020, our business continued to be impacted by the
COVID-19 pandemic, albeit to a lesser extent than in the prior period in many
markets. The impacts to solid waste activity from the COVID-19 pandemic that we
experienced during the third quarter reflected the pace of reopening activity
and varied by geography, the size and customer mix in each market. In some
markets, impacts began to abate in the second quarter, when a portion of the
lost volumes returned; in other cases, the impacts of the pandemic abated more
during the third quarter, when reopenings resulted in increased service
requirements by commercial customers and higher landfill volumes and roll off
activity. In markets where reopenings continue to be delayed or where additional
restrictions have been imposed, the improvements were less pronounced. Through
the third quarter, about 68% of solid waste commercial customers and 57% of
associated revenue in competitive markets we track that had suspended or reduced
service due to the COVID-19 pandemic, had since reached out for either a
resumption of service or an increase in frequency, an increase from 53% and

42%,
respectively, through

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the second quarter. As a result, solid waste collection, transfer and disposal
revenue was down 2.0% year over year on a same store basis in the third quarter,
but was an improvement of 3.3 percentage points from second quarter 2020
revenue, which was down 5.3% year over year.

During the fourth quarter of 2020, the impacts to our business related to the
COVID-19 pandemic continued to moderate as compared to prior periods, in spite
of the reinstatement of shutdowns and other restrictions on activity in many
markets.  Throughout the pandemic, revenue in solid waste commercial collection
and solid waste transfer and disposal has largely reflected the extent to which
the slowdown in activity associated with shelter-in-place or other closure
restrictions or requirements in effect since the first quarter of 2020 has
persisted. The recovery in more impacted markets, particularly those where
reopenings continue to be delayed or where additional restrictions have been
imposed, were generally less pronounced.

The impacts to solid waste activity from the COVID-19 pandemic that we
experienced during the fourth quarter largely continued to reflect the pace of
reopening activity and varied by geography, the size and customer mix in each
market.  In some markets, improving trends in commercial service requirements,
landfill tons and roll off activity that we had seen in prior quarters
continued; in others, commercial volume recovery remained steady or declined
modestly.  Recovery in solid waste commercial activity remained essentially in
line with the prior quarter, with 65% of customers and 56% of revenue in
competitive markets we track that had previously suspended or reduced service
due to the COVID-19 pandemic, that had since reached out for either a resumption
of service or an increase in frequency.  Year over year landfill tons and roll
off pulls both improved sequentially in the fourth quarter, with same store
municipal solid waste tons up 2% year over year after being down 3% year over
year in the third quarter.  All regions showed improving volumes, led by our
mostly exclusive market Western Region, where volumes improved sequentially by
3.7 percentage points. As a result, solid waste collection, transfer and
disposal revenue was up 0.7% year over year on a same store basis in the fourth
quarter, an improvement of 2.7 percentage points from the third quarter, which
was down 2.0% year over year.

The impact of the COVID-19 pandemic on our business, results of operations,
financial condition and cash flows in future periods will depend largely on
future developments, including the duration and spread of the outbreak in the
U.S. and Canada, its severity, the actions to contain the novel coronavirus or
treat its impact, and how quickly and to what extent normal economic and
operating conditions can resume.

2020 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 2020 increased 1.1% to $5.446 billion from $5.389 billion in 2019.
Acquisitions closed during, or subsequent to, the prior year, net of
divestitures, accounted for $197.2 million in incremental revenues in 2020.
Excluding the impact of such acquisitions, revenues decreased 2.6% due
principally to E&P waste revenue decreasing to $144.0 million from $256.0
million in 2019, with the remainder due predominantly to lower internal growth
in solid waste, in both cases primarily as a result of the COVID-19 pandemic.
 Solid waste internal growth was negative 0.4%, due to lower volumes and lower
fuel, materials and environmental surcharges more than offsetting price
increases and higher recycled commodity values. Pricing growth was 4.3%, with
core pricing up 4.5%, partially offset by materials and environmental surcharges
of negative 0.2%. Volumes decreased by 4.8% on decreases in landfill and hauling
volumes primarily due to the impact of the COVID-19 pandemic. Increases in the
value of recycled commodities resulted in a 0.1% increase to internal solid

waste growth.

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Net income attributable to Waste Connections decreased 63.9% to $204.7 million
in 2020, from $566.8 million in 2019.  In 2020, adjusted earnings before
interest, taxes, depreciation and amortization, or adjusted EBITDA, a non-GAAP
financial measure (refer to page 76 of this Annual Report on Form 10-K for a
definition and reconciliation to Net income attributable to Waste Connections),
decreased 0.7% to $1.662 billion, from $1.674 billion in 2019. As a percentage
of revenue, adjusted EBITDA decreased from 31.1% in 2019, to 30.5% in 2020. This
0.6% decrease was due to the decline in E&P waste revenue, which was partially
offset by the expansion of adjusted EBITDA margin in solid waste.  Adjusted net
income attributable to Waste Connections, a non-GAAP financial measure (refer to
page 77 of this Annual Report on Form 10-K for a definition and reconciliation
to Net income attributable to Waste Connections), in 2020 decreased 3.3% to
$695.8 million from $719.6 million in 2019.

Adjusted Free Cash Flow

Net cash provided by operating activities decreased 8.6% to $1.409 billion in
2020, from $1.541 billion in 2019. Capital expenditures for property and
equipment decreased from $634.4 million in 2019 to $597.1 million in 2020, a
decrease of $37.3 million, or 5.9%, while capital expenditures for undeveloped
landfill properties increased from $31.7 million in 2019 to $67.5 million in
2020, an increase of $35.8 million, or 112.9%. Adjusted free cash flow, a
non-GAAP financial measure (refer to page 75 of this Annual Report on Form 10-K
for a definition and reconciliation to Net cash provided by operating
activities), decreased by $74.9 million to $841.9 million in 2020, from
$916.8 million in 2019. Adjusted free cash flow as a percentage of revenues was
15.5% in 2020, as compared to 17.0% in 2019.

Return of Capital and Distributions to Shareholders

In 2020, we distributed $305.6 million to shareholders through a combination of
cash dividends and share repurchases.  We paid cash dividends of $199.9 million
to shareholders through cash dividends declared by our Board of Directors, which
also increased the quarterly cash dividend by 10.8%, from $0.185 to $0.205 per
common share in October 2020. Cash dividends increased $24.8 million, or 14.2%,
from $175.1 million in 2019 due to a 15.6% increase in the quarterly cash
dividend declared by our Board of Directors in October 2019, followed by the
additional increase in October 2020. 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 2020, we also repurchased
1,271,977 common shares at an aggregate cost of $105.7 million.  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 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. Higher debt in 2020, along with a small
reduction in EBITDA, resulted in an increase in our leverage ratio from 2.41x at
December 31, 2019 to 2.68x at December 31, 2020.  Cash balances increased from
$326.7 million at December 31, 2019 to $617.3 million at December 31, 2020, and
we had $1.239 billion of remaining borrowing capacity under our Credit
Agreement, which matures in March 2023.

Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with GAAP 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.

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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 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, 2020, 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 $3.0 million.

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 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 2020 and 2019 "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. Our inflation rate
assumption was 2.5% for the years ended December 31, 2020 and 2019. 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

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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.

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 a segment; or

? current period or expected future operating cash flow losses.

As part of our goodwill impairment test, we estimate the fair value of each of
our reporting units using discounted cash flow analyses.  At December 31, 2019
and 2018, our reporting units consisted of our five geographic solid waste
operating segments and our E&P segment.  As of July 1, 2020, we combined all
operations of our E&P segment into the Southern segment, based on our
determination that the two operating segments met the aggregation criteria, and
eliminated the E&P segment.  We compare the fair value of each reporting unit
with the carrying value of the net assets assigned to the reporting unit. If the
fair value of a reporting unit is greater than the carrying value of the net
assets, including goodwill, assigned to the reporting unit, then no impairment
results. If the fair value is less than its carrying value, an impairment

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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.

Discounted cash flow analyses require significant assumptions and estimates
about the future operations of each reporting unit and the future discrete cash
flows related to each indefinite-lived intangible asset. Significant judgments
inherent in these analyses include the determination of appropriate discount
rates, the amount and timing of expected future cash flows, growth rates and
income tax rates. In assessing the reasonableness of our determined fair values
of our reporting units, we evaluate our results against our current market
capitalization. For our impairment testing of our operating segments for
the year ended December 31, 2020, we determined that the indicated fair value of
our reporting units exceeded their carrying value by approximately 150% on
average and, therefore, we did not record an impairment charge. The detailed
results of our 2020, 2019 and 2018 impairment tests are described in Note 3 of
our consolidated financial statements included in Item 8 of this Annual Report
on Form 10-K.

Business Combination Accounting. We recognize, separately from goodwill, the
identifiable assets acquired and liabilities assumed at their estimated
acquisition date fair values. 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.

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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.

Our revenues from recycling services result from the sale of recycled
commodities, which 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. We own and operate recycling operations
and market collected recyclable materials to third parties for processing before
resale. In some instances, we utilize a third party to market recycled
materials.  In certain instances, we issue recycling rebates to municipal or
commercial customers, which can be based on the price we receive upon the sale
of recycled commodities, a fixed contractual rate or other measures. We also
receive rebates when we dispose 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,
                                           2020           2019           2018
Commercial                              $ 1,610,313    $ 1,593,217    $ 1,452,831
Residential                               1,528,217      1,380,763      1,189,148
Industrial and construction roll off        833,148        841,173        768,687
Total collection                          3,971,678      3,815,153      3,410,666
Landfill                                  1,146,732      1,132,935      1,063,243
Transfer                                    777,754        771,316        670,129
Recycling                                    86,389         64,245         92,634
E&P                                         159,438        271,887        256,262
Intermodal and other                        118,396        121,137        139,896
Intercompany                              (814,397)      (787,994)      (709,889)
Total                                   $ 5,445,990    $ 5,388,679    $ 4,922,941




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 2020 were labor, including the
discretionary costs added for frontline employee support, as well as employee
benefits, third-party disposal and transportation, vehicle, equipment and
property 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

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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.

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, 2020 to the year ended December 31, 2019. A similar
discussion and analysis that compares the year ended December 31, 2019 to the
year ended December 31, 2018 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, 2019.

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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,
                                             2020        % of Revenues       2019        % of Revenues
Revenues                                  $ 5,445,990            100.0 %  $ 5,388,679            100.0 %
Cost of operations                          3,276,808             60.2      3,198,757             59.4

Selling, general and administrative           537,632              9.9     

  546,278             10.1
Depreciation                                  621,102             11.4        618,396             11.5
Amortization of intangibles                   131,302              2.4        125,522              2.3

Impairments and other operating items         466,718              8.5     

   61,948              1.2
Operating income                              412,428              7.6        837,778             15.5

Interest expense                            (162,375)            (3.0)      (147,368)            (2.7)
Interest income                                 5,253              0.1          9,777              0.2
Other income (expense), net                   (1,392)              0.0          5,704              0.1
Income tax provision                         (49,922)            (0.9)      (139,210)            (2.6)
Net income                                    203,992              3.8        566,681             10.5
Net loss attributable to noncontrolling
interests                                         685              0.0            160              0.0
Net income attributable to Waste
Connections                               $   204,677              3.8 %  $   566,841             10.5 %

Years Ended December 31, 2020 and 2019

Revenues.  Total revenues increased $57.3 million, or 1.1%, to $5.446 billion
for the year ended December 31, 2020, from $5.389 billion for the year ended
December 31, 2019.

During the year ended December 31, 2020, incremental revenue from acquisitions
closed during, or subsequent to, the year ended December 31, 2019, increased
revenues by approximately $212.8 million.

Operations that were divested in 2020, and the full year impact of operations
that were divested in 2019, decreased revenues by approximately $15.6 million
for the year ended December 31, 2020.

During the year ended December 31, 2020, the net increase in prices charged to our customers at our existing operations was $216.0 million, consisting of $227.7 million of core price increases, partially offset by a decrease in surcharges of $11.7 million.

During the year ended December 31, 2020, volume decreases in our existing
business decreased solid waste revenues by $238.8 million, due primarily to the
economic disruptions resulting from the COVID-19 pandemic that began in March
2020 and continued throughout 2020. The decreases during the year ended December
31, 2020 resulting from the COVID-19 pandemic were partially offset by increased
residential municipal solid waste and recycling collection services, increased
landfill municipal solid waste and special waste volumes in certain markets and
the impact of one additional business day in 2020 resulting from leap year.

E&P revenues at facilities owned during the year ended December 31, 2020 and
2019 decreased $112.1 million. Decreases in the demand for crude oil as a result
of economic disruptions from the COVID-19 pandemic resulted in a drop in the
value of crude oil, decreases in drilling and production activity levels and
decreases in overall demand for our E&P waste services. Drilling and production
activity was also adversely impacted by the drop in the value of crude oil due
to the increased supply of oil resulting from Saudi Arabia and Russia abandoning
production quotas and increasing production levels, which was exacerbated by the
impact of the COVID-19 pandemic.

A decrease in the average Canadian dollar to U.S. dollar currency exchange rate
resulted in a decrease in revenues of $7.1 million for the year ended December
31, 2020.  The average Canadian dollar to U.S. dollar exchange rates on our
Canadian revenues were 0.7472 and 0.7537 in the years ended December 31, 2020
and 2019, respectively.

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Revenues from sales of recyclable commodities at facilities owned during the
years ended December 31, 2020 and 2019 increased $4.3 million due primarily to
higher prices for old corrugated cardboard and higher volumes collected from
residential recycling customers, partially offset by decreased collected
commercial recycling volumes caused by economic disruptions resulting from the
COVID-19 pandemic and decreased prices for plastic and aluminum.

Other revenues decreased by $2.2 million during the year ended December 31,
2020, due primarily to a $6.6 million decrease in intermodal revenues resulting
from a reduction in intermodal cargo volumes and a $0.2 million decrease in
other non core revenue sources, partially offset by a $4.6 million increase
resulting from higher prices for renewable energy credits associated with the
generation of landfill gas at our Canada segment.

Cost of Operations.  Total cost of operations increased $78.0 million, or 2.4%,
to $3.277 billion for the year ended December 31, 2020, from $3.199 billion for
the year ended December 31, 2019. The increase was primarily the result of
$134.6 million of additional operating costs from acquisitions closed during, or
subsequent to, the year ended December 31, 2019, partially offset by a decrease
in operating costs at our existing operations of $35.3 million, assuming foreign
currency parity, a decrease in operating costs of $17.6 million at operations
divested during, or subsequent to, the year ended December 31, 2019 and a
decrease of $3.7 million resulting from a decrease in the average foreign
currency exchange rate in effect during the comparable reporting periods.

The decrease in operating costs at our existing operations for the year ended
December 31, 2020 of $35.3 million, assuming foreign currency parity, included
the following decreases totaling $74.4 million due to solid waste, intermodal
and E&P volume losses resulting from the impact of the COVID-19 pandemic: a
decrease in third-party disposal expenses of $23.1 million, a decrease in
third-party trucking and transportation expenses of $15.2 million, a decrease in
direct labor expenses at our Eastern segment and E&P operations of $11.1 million
due to headcount reductions, a decrease in intermodal rail expenses of $6.1
million; a decrease in subcontracted E&P operating expenses of $5.7 million, a
decrease in equipment and facility maintenance and repair expenses of $5.5
million at our E&P operations, a decrease in expenses for processing recyclable
commodities of $5.3 million due to a decrease in commercial recycling volumes
collected and a decrease in revenue-based royalties paid by our E&P operations
of $2.4 million.

The remaining increase in operating costs at our existing operations of $39.1
million for the year ended December 31, 2020 consisted of an increase in truck,
container, equipment and facility maintenance and repair expenses at our solid
waste operations of $17.7 million due to cost increases and a higher quantity of
large repairs, an increase in labor expenses totaling $15.7 million at the solid
waste operations of our Southern segment and our Western, Central and Canada
segments due primarily to annual pay increases and the impact of an additional
working day during the year ended December 31, 2020, an increase in other cash
incentive compensation to non-management personnel of $13.8 million to recognize
the services they are providing during the COVID-19 pandemic, an increase of
$11.4 million resulting from the payment of supplemental bonuses to
non-management employees to provide financial assistance associated with the
impact of the COVID-19 pandemic, an increase in expenses for auto and workers'
compensation claims of $9.4 million due primarily to increases in our
deductibles for auto claims, higher claims severity in the current year period
and adjustments recorded in the prior year period to decrease projected losses
on outstanding claims originally recorded prior to 2019, an increase in
compressed natural gas expense of $4.6 million due primarily to 2020 expenses
being net of one year of tax credits for purchases occurring in 2020 whereas
2019 expenses were net of two years of tax credits for purchases occurring in
2019 and 2018, an increase in landfill gas system operating supplies and
maintenance expenses at our solid waste operations of $3.5 million, an increase
in recurring taxes on revenues of $3.4 million due primarily to increased
revenues in our Western Region, an increase in leachate expense of $3.1 million
due to higher per gallon disposal costs, an increase in leachate gallons
disposed of due to storms causing higher precipitation in certain markets where
our landfills are located, increased leachate in landfill cells constructed in
2020 and an increase in the percentage of leachate generated that required
processing and disposal at third-party locations, an increase in property tax
expenses of $2.0 million due primarily to reassessed values of certain landfills
and property acquired in recent acquisitions and $0.9 million of other net
expense increases, partially offset by a decrease in fuel expense of $24.0
million due to a decrease in the price of diesel fuel and declines in the volume
of fuel used in our operations, a decrease in employee medical benefits expenses
of $9.1 million due to a reduction in medical visits, a decrease in 401(k)
matching expenses of $8.4 million as we suspended our 401(k) match as of June 1,
2020 and a decrease in taxes on revenues of $4.9 million from the reversal of
recorded liabilities for certain fees and exactions at Chiquita Canyon landfill
due to our successful challenge of increases assessed in prior periods.

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Cost of operations as a percentage of revenues increased 0.8 percentage points
to 60.2% for the year ended December 31, 2020, from 59.4% for the year ended
December 31, 2019. The increase as a percentage of revenues consisted of a 0.5
percentage point increase from higher labor expenses, a 0.5 percentage point
increase resulting from the payment of supplemental bonuses to non-management
employees to provide financial assistance associated with the impact of the
COVID-19 pandemic and other cash incentive compensation paid to non-management
personnel, a 0.4 percentage point increase from higher maintenance and repair
expenses, a 0.2 percentage point increase from an increase in expenses for auto
and workers' compensation claims, a 0.2 percentage point increase from the net
impact of cost of operations expenses from acquisitions closed during, or
subsequent to, the year ended December 31, 2019 and a 0.2 percentage point
increase from all other net changes, partially offset by a 0.4 percentage point
decrease from lower diesel fuel expenses, a 0.3 percentage point decrease from
lower trucking and transportation expenses, a 0.3 percentage point decrease from
lower disposal expenses and a 0.2 percentage point decrease from lower 401(k)
match expenses.

SG&A.  SG&A expenses decreased $8.7 million, or 1.6%, to $537.6 million for the
year ended December 31, 2020, from $546.3 million for the year ended December
31, 2019.  The decrease was comprised of a decline of $20.7 million in SG&A
expenses at our existing operations, assuming foreign currency parity, a
decrease in SG&A expenses of $0.7 million at operations divested during, or
subsequent to, the year ended December 31, 2019 and a decline of $0.7 million
resulting from a decrease in the average foreign currency exchange rate in
effect during the comparable reporting periods, partially offset by $13.4
million of additional SG&A expenses from operating locations at acquisitions
closed during, or subsequent to, the year ended December 31, 2019.

The decrease in SG&A expenses at our existing operations, assuming foreign
currency parity, of $20.7 million for the year ended December 31, 2020, was
comprised of a collective decrease in travel, meeting, training and community
activity expenses of $22.4 million from shelter at home and other restrictions
on our employees due to the COVID-19 pandemic resulting in the cancellation of
non-essential off-site activities, a decrease in 401(k) matching expenses of
$2.9 million due to our suspension of our 401(k) match as of June 1, 2020, a
decrease in professional fees of $2.9 million due primarily to work on legal
matters being postponed from temporary court closures and a decrease in third
party tax consulting expenses, a decrease in office supplies and office
utilities of $2.8 million due to office closures resulting from shelter at home
restrictions, a decrease in direct acquisition expenses of $2.5 million due to
changes in acquisition activity, a decrease in employee medical benefits
expenses of $2.1 million due to a reduction in medical visits, a decrease in
deferred compensation expenses of $1.6 million as a result of decreases in the
market value of investments to which employee deferred compensation liability
balances are tracked, a decrease in share-based compensation expenses of $1.5
million due primarily to decreased share price volatility and fewer outstanding
shares in the current period 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 and
$1.7 million of other net expense decreases, partially offset by an increase in
accrued recurring cash incentive compensation expense to our management of $6.0
million, an increase of $4.0 million in equity-based compensation expenses
associated with fair value adjustments to Company common shares held in our
deferred compensation plan by certain key executives as a result of the shares
being exchanged for other investment options, an increase in payroll expenses of
$3.5 million as a result of annual pay increases, additional paid time off
benefits and the impact of an additional working day during the year ended
December 31, 2020, an increase in expenses for uncollectible accounts receivable
of $3.3 million due to customers experiencing financial difficulties resulting
from the economic impact of the COVID-19 pandemic, an increase in software
licenses and subscriptions expenses of $1.7 million due primarily to the
addition of new sales and customer service applications and an increase of $1.2
million resulting from the payment of supplemental bonuses to non-management
employees to provide financial assistance associated with the impact of the
COVID-19 pandemic.

SG&A expenses as a percentage of revenues decreased 0.2 percentage points to
9.9% for the year ended December 31, 2020, from 10.1% for the year ended
December 31, 2019. The decrease as a percentage of revenues consisted of a 0.4
percentage point decrease from a reduction in travel, meeting, training and
community activity expenses, partially offset by a 0.2 percentage point increase
associated with administrative salaries and wages.

Depreciation.  Depreciation expense increased $2.7 million, or 0.4%, to $621.1
million for the year ended December 31, 2020, from $618.4 million for the year
ended December 31, 2019.  The increase was comprised of an increase in
depreciation and depletion expense of $20.8 million from acquisitions closed
during, or subsequent to, the year ended December 31, 2019 and an increase in
depreciation expense at our existing operations of $10.2 million due primarily
to

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the impact of additions to our fleet and equipment purchased to support our
existing operations exceeding certain equipment acquired from the Progressive
Waste acquisition becoming fully depreciated in June 2019 and June 2020,
partially offset by a decrease in depletion expense of $26.7 million at our
existing landfills due primarily to economic disruptions resulting from the
COVID-19 pandemic causing a decrease in E&P and municipal solid waste, a
decrease in depreciation and depletion expense of $0.8 million from operations
divested during, or subsequent to, the year ended December 31, 2019 and a
decrease of $0.8 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 11.4% for the year ended December 31, 2020, from 11.5% for the year ended
December 31, 2019. The decrease as a percentage of revenues consisted of a 0.4
percentage point decrease from depletion expense due to declines in E&P and
municipal solid waste landfill volumes, partially offset by a 0.3 percentage
point increase from depreciation expense attributable to a decrease in our
revenues due to economic disruptions resulting from the COVID-19 pandemic.

Amortization of Intangibles.  Amortization of intangibles expense increased $5.8
million, or 4.6%, to $131.3 million for the year ended December 31, 2020, from
$125.5 million for the year ended December 31, 2019. The increase was the result
of $17.8 million from intangible assets acquired in acquisitions closed during,
or subsequent to, the year ended December 31, 2019, partially offset by a
decrease of $11.1 million from certain intangible assets becoming fully
amortized subsequent to December 31, 2019, a decrease of $0.7 million from
operations divested during, or subsequent to, the year ended December 31, 2019
and a decrease of $0.2 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 2.4% for the year ended December 31, 2020, from 2.3% for the year ended
December 31, 2019.  The increase as a percentage of revenues was due primarily
to the impact of amortization expense from intangible assets acquired in
acquisitions closed during, or subsequent to, the year ended December 31, 2019.

Impairments and Other Operating Items.  Impairments and other operating items
increased $404.8 million, to net losses totaling $466.7 million for the year
ended December 31, 2020, from net losses totaling $61.9 million for the year
ended December 31, 2019.

Macroeconomic and geopolitical conditions, including a significant decline in
oil prices driven by both surplus production and supply, as well as the decrease
in demand caused by factors including the COVID-19 pandemic, resulted in
decreased levels of oil and natural gas exploration and production activity and
a corresponding decrease in demand for our E&P waste services. During the year
ended December 31, 2020, our E&P revenue declined $112.1 million on rig count
declines of 56% in certain basins.  The most impacted basins include the
Williston Basin in North Dakota, the Eagle Ford Basin in Texas and the Powder
River Basin in Wyoming, all of which have relatively high costs associated with
drilling, making them less attractive than other basins, including the Permian
Basin in Texas and New Mexico.  Additionally, across the industry there is
uncertainty regarding future demand for oil and related services, as noted by
several energy companies, many of whom are customers of our E&P operations.
 These companies have written down the values of their oil and gas assets in
anticipation of the potential for the decarbonization of their energy product
mix given an increased global focus on reducing greenhouse gases and addressing
climate change.  Such uncertainty regarding global demand has had a significant
impact on the investment and operating plans of our E&P waste customers in the
basins where we operate.

Based on these events, we concluded during the second quarter of 2020 that a
triggering event occurred which required us to perform an impairment test of the
property and equipment and intangible assets of our E&P operations as of June
30, 2020. As a result of the impairment test, we determined that the carrying
value of four landfills in our E&P operations exceeded their estimated fair
value, resulting in recording an impairment charge of $417.4 million to property
and equipment during the year ended December 31, 2020.

The remaining net losses of $49.3 million recorded during the year ended
December 31, 2020 consisted of $18.4 million to adjust the carrying value of
contingent consideration liabilities, $13.3 million of charges to adjust the
carrying values of certain long-lived assets acquired in the Progressive Waste
acquisition, $6.9 million of losses on property and equipment that were disposed
of through sales or as a result of being damaged in operations, $6.1 million of
charges to

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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, $3.6 million of losses on the disposal of certain non-strategic operating
locations and $1.0 million of other net charges.

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.

Operating Income.  Operating income decreased $425.4 million, or 50.8%, to
$412.4 million for the year ended December 31, 2020, from $837.8 million for the
year ended December 31, 2019. The decrease was due primarily to declines in our
existing solid waste and E&P volumes resulting from the impact of the COVID-19
pandemic, additional discretionary costs primarily for frontline support and the
impairment charge attributable to four of our E&P landfills, partially offset by
price increases and cost containment efforts implemented at our solid waste
operations and operating income generated from acquisitions.

Operating income as a percentage of revenues decreased 7.9 percentage points to
7.6% for the year ended December 31, 2020, from 15.5% for the year ended
December 31, 2019.  The decrease as a percentage of revenues was comprised of a
7.3 percentage point increase in impairments and other operating items, a 0.8
percentage point increase in cost of operations and a 0.1 percentage point
increase in amortization expense, partially offset by a 0.2 percentage point
decrease in SG&A expense and a 0.1 percentage point decrease in depreciation
expense.

Interest Expense.  Interest expense increased $15.0 million, or 10.2%, to $162.4
million for the year ended December 31, 2020, from $147.4 million for the year
ended December 31, 2019. The increase was primarily attributable to an increase
of $14.7 million from the January 2020 issuance of our 2030 Senior Notes (as
defined below), an increase of $12.2 million from the March 2020 issuance of our
2050 Senior Notes (as defined below), an increase of $5.1 million from full year
impact of the April 2019 issuance of our 2029 Senior Notes (as defined below),
an increase of $3.4 million from higher net interest rates on borrowings
outstanding under our Credit Agreement due primarily to a $150 million interest
rate swap agreement commencing in February 2020 at a higher interest rate than
two interest rate swap agreements totaling $175 million which expired in
February 2020 and $1.2 million of other net increases, partially offset by a
decrease of $13.9 million due to a reduction in the average borrowings
outstanding under our Credit Agreement and a decrease of $7.7 million from full
year impact of the repayment of $175 million of our 2019 Senior Notes (as
defined below).

Interest Income. Interest income decreased $4.5 million, or 46.3%, to $5.3 million for the year ended December 31, 2020, from $9.8 million for the year ended December 31, 2019. The decrease was primarily attributable to lower reinvestment rates in the current period.

Other Income (Expense), Net.  Other income (expense), net decreased $7.1
million, to an expense total of $1.4 million for the year ended December 31,
2020, from an income total of $5.7 million for the year ended December 31, 2019.
The decrease was due primarily to an increase in foreign currency transaction
losses of $4.5 million attributable to the impact of an increase in the Canadian
dollar to U.S. dollar exchange rate during latter half of 2020 impacting our
cash accounts held in U.S. dollars by our Canadian entities and $2.6 million of
adjustments to increase certain accrued liabilities acquired in acquisitions
closed prior to 2019.

Income Tax Provision.  Income taxes decreased $89.3 million, or 64.1%, to $49.9
million for the year ended December 31, 2020, from $139.2 million for the year
ended December 31, 2019.  Our effective tax rate was 19.7% for the years ended
December 31, 2020 and 2019.

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The income tax provision for the year ended December 31, 2020 included a $27.4
million expense associated with certain 2019 inter-entity payments no longer
being deductible for tax purposes due to the finalization of tax regulations on
April 7, 2020 under Internal Revenue Code section 267A and a $4.1 million
expense related to an increase in our deferred income tax liabilities resulting
from the impairment of certain assets within our E&P operations, which impacted
the geographical apportionment of our state income taxes.  Additionally, the
income tax benefit for the year ended December 31, 2020 included a benefit of
$5.4 million from share-based payment awards being recognized in the income
statement when settled, as well as a portion of our internal financing being
taxed at effective rates substantially lower than the U.S. federal statutory
rate.

The income tax provision for the year ended December 31, 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.

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.

Prior to the third quarter of 2020, we managed our operations through five
geographic solid waste operating segments and our E&P segment, which were also
our reportable segments. In the third quarter of 2020, our Chief Operating
Decision Maker determined that the E&P and Southern operating segments met all
of the aggregation criteria and eliminated our E&P segment by combining all
operations of the E&P segment into the Southern segment. After giving effect to
this combination, our reportable segments consist of our five geographic
operating segments and no longer include a separate E&P segment. Each operating
segment is responsible for managing several vertically integrated operations,
which are comprised of districts. 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.

Segment results for the 2019 and 2018 periods reflected in this report have been reclassified to reflect the realignment of our reportable segments for comparison with the same period in 2020.

At December 31, 2020, under the current orientation, our Southern segment
services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana,
Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee,
Texas, Wyoming and along the Gulf of Mexico; our Eastern segment services
customers located in Delaware, northern Illinois, Kentucky, Maryland,
Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island,
South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; 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.

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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,
            2020        % of Revenues       2019        % of Revenues
Southern $ 1,369,580             25.2 %  $ 1,449,000             26.9 %
Eastern    1,335,865             24.5      1,268,964             23.5
Western    1,149,762             21.1      1,098,849             20.4
Central      880,323             16.2        838,584             15.6
Canada       710,460             13.0        733,282             13.6
         $ 5,445,990            100.0 %  $ 5,388,679            100.0 %




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,
                2020        % of Revenues       2019        % of Revenues
Southern     $   369,445             27.0 %  $   441,425             26.1 %
Western          364,790             31.7 %      338,563             34.8 %
Eastern          343,446             25.7 %      330,578             30.8 %
Central          313,033             35.6 %      292,111             30.5 %
Canada           256,119             36.0 %      256,405             35.0 %
Corporate(a)    (15,283)                -       (15,438)                -
             $ 1,631,550             30.0 %  $ 1,643,644             30.5 %


     The majority of Corporate expenses are allocated to the five operating

segments. Direct acquisition expenses and share-based compensation expenses

(a) associated with Progressive Waste share-based grants outstanding at June 1,

2016 that were continued by the Company are not allocated to the five

operating segments and comprise the net EBITDA of our Corporate segment for

the periods presented.

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, 2020, compared to the year ended December 31,
2019, are discussed below.

Segment Revenue

Revenue in our Southern segment decreased $79.4 million, or 5.5%, to $1.370
billion for the year ended December 31, 2020, from $1.449 billion for the year
ended December 31, 2019. The components of the decrease consisted of a decline
in revenue at our E&P operations of $109.0 million, partially offset by an
increase in revenue at our solid waste operations of $29.6 million. The $109.0
million decrease in revenue at our E&P operations was attributable to decreases
in the demand for crude oil as a result of economic disruptions from the
COVID-19 pandemic resulting in a drop in the value of crude oil, decreases in
drilling and production activity levels and decreases in overall demand for our
E&P waste services. Drilling and production activity during the year ended
December 31, 2020 were also adversely impacted by the drop in the value of crude
oil due to the increased supply of oil resulting from Saudi Arabia and Russia
abandoning production quotas and increasing production levels, which was
exacerbated by the impact of the COVID-19 pandemic. The components of the $29.6
million increase in revenue at our solid waste operations consisted of net price
increases of $54.3 million and net revenue growth from acquisitions closed
during, or subsequent to, the year ended December 31, 2019 of $12.5 million,
partially offset by solid waste volume decreases of $36.0 million attributable
primarily to COVID-19-related economic disruptions driving declines in
commercial collection, roll off collection and municipal solid waste landfill
volumes that exceeded increases in landfill special waste volumes, net revenue
reductions from divestitures closed subsequent to December 31, 2019 of $0.6
million and other revenue decreases of $0.6 million.

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Revenue in our Eastern segment increased $66.9 million, or 5.3%, to $1.336
billion for the year ended December 31, 2020, from $1.269 billion for the year
ended December 31, 2019.  The components of the increase consisted of net
revenue growth from acquisitions closed during, or subsequent to, the year ended
December 31, 2019, of $141.1 million and net price increases of $57.6 million,
partially offset by solid waste volume decreases of $116.0 million attributable
primarily to COVID-19-related economic disruptions driving declines in
commercial collection, roll off collection, transfer station and landfill
volumes, net revenue reductions from divestitures closed subsequent to December
31, 2019 of $13.7 million and other revenue decreases of $2.1 million.

Revenue in our Western segment increased $51.0 million, or 4.6%, to
$1.150 billion for the year ended December 31, 2020, from $1.099 billion for the
year ended December 31, 2019.  The components of the increase consisted of net
price increases of $30.6 million, net revenue growth from acquisitions closed
during, or subsequent to, the year ended December 31, 2019, of $16.5 million,
solid waste volume increases of $9.2 million attributable to increased
residential collection, transfer station and landfill municipal solid waste
volumes and an increase in revenues from sales of recyclable commodities of $2.1
million due primarily to higher prices for old corrugated cardboard and higher
volumes collected from residential recycling customers, partially offset by
intermodal revenue decreases of $6.6 million due to a reduction in intermodal
cargo volumes and other revenue decreases of $0.8 million.

Revenue in our Central segment increased $41.7 million, or 5.0%, to $880.3
million for the year ended December 31, 2020, from $838.6 million for the year
ended December 31, 2019.  The components of the increase consisted of revenue
growth from acquisitions closed during, or subsequent to, the year ended
December 31, 2019, of $41.9 million and net price increases of $38.3 million,
partially offset by solid waste volume decreases of $37.1 million due to the
impact of COVID-19-related economic disruptions driving decreases in commercial
collection, roll off collection, transfer station and landfill volumes, net
revenue reductions from divestitures closed subsequent to December 31, 2019 of
$1.3 million and other revenue decreases of $0.1 million.

Revenue in our Canada segment decreased $22.8 million, or 3.1%, to $710.5
million for the year ended December 31, 2020, from $733.3 million for the year
ended December 31, 2019. The components of the decrease consisted of solid waste
volume decreases of $58.8 million due to the net impact of COVID-19-related
economic disruptions driving decreases in commercial collection, roll off
collection, transfer station and landfill volumes and a decrease of $7.1 million
resulting from a lower average foreign currency exchange rate in effect during
the comparable reporting periods, partially offset by net price increases of
$35.2 million, an increase of $4.6 million resulting from higher prices for
renewable energy credits associated with the generation of landfill gas, an
increase in revenues from sales of recyclable commodities of $2.0 million due
primarily to higher prices for old corrugated cardboard and higher volumes
collected from residential recycling customers, net revenue growth from
acquisitions closed during, or subsequent to, the year ended December 31, 2019
of $0.8 million and other revenue increases of $0.5 million.

Segment EBITDA

Segment EBITDA in our Southern segment decreased $72.0 million, or 16.3%, to
$369.4 million for the year ended December 31, 2020, from $441.4 million for the
year ended December 31, 2019.  The decrease was due to a decline in E&P revenues
of $109.0 million, an increase in truck, container, equipment and facility
maintenance and repair expenses at our solid waste operations of $9.9 million
due to cost increases and a higher quantity of large repairs, a net $8.3 million
increase in cost of operations and SG&A expenses attributable to acquired
operations, an increase in labor expenses at our solid waste operations of $6.9
million due primarily to employee pay rate increases, an increase in expenses
for auto and workers' compensation claims of $6.4 million at our solid waste
operations due primarily to increases in our deductibles for auto claims, higher
claims severity in the current year period and adjustments recorded in the prior
year period to decrease projected losses on outstanding claims originally
recorded prior to 2019, an increase of $3.6 million resulting from the payment
of supplemental bonuses to non-management employees at our solid waste
operations to provide financial assistance associated with the impact of the
COVID-19 pandemic, an increase in subcontracted hauling services of $3.2 million
due to outsourcing the servicing of certain non-strategic contracts and
commercial collection customers to third party haulers, an increase in third
party trucking and transportation expenses of $2.9 million at our solid waste
operations due to increased landfill special waste volumes requiring
transportation services to our disposal sites, an increase in leachate expense
of $2.1 million due to higher per gallon disposal costs and an increase in
leachate gallons disposed due to storms causing higher precipitation in certain
markets where our landfills are located, an increase in

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expenses for uncollectible accounts receivable at our E&P operations of $2.1
million due to customers experiencing financial difficulties resulting from the
economic impact of the COVID-19 pandemic, an increase in corporate overhead
expense allocations to our solid waste operations of $1.8 million due to an
increase in the overhead allocation rate resulting from an increase in corporate
expenses qualifying for allocation and an increase in compressed natural gas
expense of $1.4 million due primarily to 2020 expenses being net of one year of
tax credits for purchases occurring in 2020 whereas 2019 expenses were net of
two years of tax credits for purchases occurring in 2019 and 2018, partially
offset by an increase in revenues at our solid waste operations of $29.6
million, a decrease in third party disposal expenses at our solid waste
operations of $8.8 million due primarily to declines in commercial and roll off
collection volumes, a decrease in 401(k) matching expenses at our solid waste
operations of $4.2 million as we suspended our 401(k) match as of June 1, 2020,
a decrease in employee medical benefits expenses at our solid waste operations
of $3.2 million due to a reduction in medical visits, a collective decrease in
travel, meeting, training, and community activity expenses at our solid waste
operations of $2.9 million due to shelter at home and other restrictions on our
employees due to the COVID-19 pandemic resulting in the cancellation of
non-essential off-site activities, a decrease in fuel expense at our solid waste
operations of $2.0 million due to a decrease in the price of diesel fuel and
declines in the volume of fuel used in our operations, a net $0.8 million
decrease in all other expenses at our solid waste operations and the following
expense decreases at our E&P operations which were directly attributable to the
decline in E&P volumes and corresponding decline in E&P revenues: a decrease in
labor expenses of $6.4 million, a decrease in operating activities outsourced to
third-parties of $5.7 million, a decrease in equipment and property repair and
maintenance expenses of $5.5 million, a decrease in third-party trucking and
transportation services of $4.2 million, a decrease in fuel expense of $2.8
million, a decrease in royalty expenses paid on revenues of $2.4 million, a
decrease in landfill operating supplies of $1.6 million, a decrease in travel,
meetings and training expenses of $1.6 million, a decrease in equipment rental
expenses of $0.8 million, a decrease in cell processing expenses of $0.8 million
and $2.3 million of other net expense decreases.

Segment EBITDA in our Western segment increased $26.2 million, or 7.7%, to
$364.8 million for the year ended December 31, 2020, from $338.6 million for the
year ended December 31, 2019.  The increase was due primarily to an increase in
revenues of $51.0 million, a decrease in intermodal rail expenses of $6.0
million due to a reduction in cargo volume, a decrease in taxes on revenues of
$4.9 million from the reversal of recorded liabilities for certain fees and
exactions at Chiquita Canyon landfill due to our successful challenge of
increases assessed in prior periods, a decrease in fuel expense of $3.3 million
due to a decrease in the price of diesel fuel, a collective decrease in travel,
meeting, training, and community activity expenses of $3.2 million due to
shelter at home and other restrictions on our employees due to the COVID-19
pandemic resulting in the cancellation of non-essential off-site activities and
a decrease in 401(k) matching expenses of $2.5 million as we suspended our
401(k) match as of June 1, 2020, partially offset by a net $12.1 million
increase in cost of operations and SG&A expenses attributable to acquired
operations, an increase in labor expenses of $7.2 million due primarily to
employee pay rate increases, an additional calendar and business day in the
current year period due to leap year, as well as emergency wages and other
COVID-19-related employee costs, an increase in recurring taxes on revenues of
$5.2 million attributable to price-led increases in residential collection and
landfill municipal solid waste revenues, an increase in third party disposal
expenses of $3.9 million due primarily to disposal rate increases and higher
residential collection tonnage, an increase in corporate overhead expense
allocations of $2.5 million due to an increase in the overhead allocation rate
resulting from an increase in corporate expenses qualifying for allocation, an
increase of $2.3 million resulting from the payment of supplemental bonuses to
non-management employees to provide financial assistance associated with the
impact of the COVID-19 pandemic, an increase in landfill site maintenance
expenses of $1.9 million due primarily to increased daily cover costs, an
increase in third-party trucking and transportation expenses of $1.8 million due
primarily to higher transfer station volumes and landfill special waste volumes
in certain markets that require transportation services to our disposal sites
and increased rates charged by third parties to provide trucking and
transportation services, an increase in leachate expense of $1.5 million due to
higher per gallon disposal costs, increased leachate in landfill cells
constructed in 2020 and an increase in the percentage of leachate generated that
required processing and disposal at third-party locations, an increase in
compressed natural gas expense of $1.3 million due primarily to 2020 expenses
being net of one year of tax credits for purchases occurring in 2020 whereas
2019 expenses were net of two years of tax credits for purchases occurring in
2019 and 2018, an increase in expenses for auto and workers' compensation claims
of $1.0 million due primarily to non-recurring adjustments recorded in the prior
year period to decrease projected losses on outstanding claims originally
recorded prior to 2019, an increase in expenses for uncollectible accounts
receivable of $0.9 million due to customers experiencing financial difficulties
resulting from the economic impact of the COVID-19 pandemic, an increase in
truck, container, equipment and facility maintenance and repair expenses of $0.6
million due to cost increases and other expense increases of $2.5 million.

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Segment EBITDA in our Eastern segment increased $12.8 million, or 3.9%, to
$343.4 million for the year ended December 31, 2020, from $330.6 million for the
year ended December 31, 2019.  The increase was due primarily to an increase in
revenues of $80.6 million from organic growth and acquisitions, $32.6 million of
collective decreases in third-party disposal expenses, third-party trucking
expenses, labor expenses, expenses for processing recyclable commodities and
taxes on revenues attributable to declines in solid waste and commercial
recycling volumes resulting primarily from economic disruptions caused by the
COVID-19 pandemic, a decrease in fuel expense of $7.6 million due to a decrease
in the price of diesel fuel and declines in the volume of fuel used in our
operations, a decrease in employee medical benefits expenses of $4.5 million due
to a reduction in medical visits, a collective decrease in travel, meeting,
training, and community activity expenses of $3.1 million due to shelter at home
and other restrictions on our employees due to the COVID-19 pandemic resulting
in the cancellation of non-essential off-site activities, an increase to EBITDA
of $2.8 million from the impact of operations disposed of during the year ended
December 31, 2020, a decrease in 401(k) matching expenses of $2.4 million as we
suspended our 401(k) match as of June 1, 2020 and other expense decreases of
$0.7 million, partially offset by a net $103.0 million increase in cost of
operations and SG&A expenses attributable to acquired operations, an increase in
corporate overhead expense allocations of $5.8 million due to an increase in the
overhead allocation rate resulting from an increase in corporate expenses
qualifying for allocation, an increase in truck, container, equipment and
facility maintenance and repair expenses of $2.7 million due to cost increases
and a higher quantity of large repairs, an increase of $2.7 million resulting
from the payment of supplemental bonuses to non-management employees to provide
financial assistance associated with the impact of the COVID-19 pandemic, an
increase in landfill gas system operating supplies and maintenance expenses of
$2.3 million, an increase in expenses for uncollectible accounts receivable of
$2.3 million due to customers experiencing financial difficulties resulting from
the economic impact of the COVID-19 pandemic, an increase in compressed natural
gas expense of $1.6 million due primarily to 2020 expenses being net of one year
of tax credits for purchases occurring in 2020 whereas 2019 expenses were net of
two years of tax credits for purchases occurring in 2019 and 2018 and an
increase in subcontracted hauling services of $1.1 million due to outsourcing
the servicing of certain non-strategic collection customers to third party
haulers.

Segment EBITDA in our Central segment increased $20.9 million, or 7.2%, to
$313.0 million for the year ended December 31, 2020, from $292.1 million for the
year ended December 31, 2019. The increase was due primarily to an increase in
revenues of $43.0 million from organic growth and acquisitions, $6.2 million of
collective decreases in third-party disposal expenses and third-party trucking
expenses attributable to declines in solid waste volumes resulting from economic
disruptions caused by the COVID-19 pandemic, a decrease in expenses for
uncollectible accounts receivable of $2.4 million due primarily to the current
period collection of certain accounts deemed uncollectible in prior periods, a
decrease in fuel expense of $2.4 million due to a decrease in the price of
diesel fuel, a decrease in 401(k) matching expenses of $2.4 million as we
suspended our 401(k) match as of June 1, 2020, a decrease in employee medical
benefits expenses of $2.1 million due to a reduction in medical visits, a
collective decrease in travel, meeting, training, and community activity
expenses of $1.5 million due to shelter at home and other restrictions on our
employees due to the COVID-19 pandemic resulting in the cancellation of
non-essential off-site activities and other expense decreases of $1.6 million,
partially offset by a net $24.6 million increase in cost of operations and SG&A
expenses attributable to acquired operations, an increase in labor expenses of
$7.5 million due primarily to employee pay rate increases, an additional
calendar and business day in the current year period due to leap year, as well
as emergency wages and other COVID-19-related employee costs exceeding decreases
in hours worked attributable to solid waste volume reductions resulting from
COVID-19-related economic disruptions, an increase in truck, container,
equipment and facility maintenance and repair expenses of $3.0 million due to
cost increases and a higher quantity of large repairs, an increase of $2.3
million resulting from the payment of supplemental bonuses to non-management
employees to provide financial assistance associated with the impact of the
COVID-19 pandemic, an increase in corporate overhead expense allocations of $2.2
million due to an increase in the overhead allocation rate resulting from an
increase in corporate expenses qualifying for allocation and an increase in
expenses for auto and workers' compensation claims of $1.1 million due primarily
to non-recurring adjustments recorded in the prior year period to decrease
projected losses on outstanding claims.

Segment EBITDA in our Canada segment decreased $0.3 million, or 0.1%, to
$256.1 million for the year ended December 31, 2020, from $256.4 million for the
year ended December 31, 2019.  The decrease was comprised of a decrease of $2.5
million from a decrease in the average foreign currency exchange rate in effect
during the comparable reporting periods, partially offset by an increase of $2.2
million assuming foreign currency parity during the comparable reporting
periods. The $2.2 million increase, which assumes foreign currency parity, was
due primarily to collective decreases totaling $8.9 million in third-party
disposal expenses and third-party trucking expenses attributable to declines

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in solid waste volumes resulting primarily from economic disruptions caused by
the COVID-19 pandemic, a decrease in fuel expense of $6.0 million due to
declines in the market price of diesel fuel, a decrease in subcontracted hauling
services at our solid waste operations of $4.7 million due primarily to declines
in commercial customers requiring less outsourcing of certain collection
activities to third party collection companies and the impact of reversing
expenses accrued in a prior period and incurring less expenses in the current
period associated with estimated equipment charge overages related to an
outsourced collection contract, a decrease in labor expenses of $2.4 million due
to the receipt of government subsidies reimbursing us for certain payroll
expenditures remitted to our employees during the COVID-19 pandemic and a
collective decrease in travel, meeting, training, and community activity
expenses of $1.5 million due to shelter at home and other restrictions on our
employees due to the COVID-19 pandemic resulting in the cancellation of
non-essential off-site activities, partially offset by a decrease in revenues of
$15.7 million, an increase in truck, container, equipment and facility
maintenance and repair expenses of $1.7 million due to parts and service rate
increases and variability impacting the timing of major repairs, additional
expenses of $1.3 million resulting from the payment of supplemental bonuses to
non-management employees to provide financial assistance associated with the
impact of the COVID-19 pandemic, an increase in landfill gas system operating
supplies and maintenance expenses of $1.0 million, an increase in labor expenses
of $1.0 million due primarily to employee pay rate increases exceeding the
impact of headcount reductions and an increase in corporate overhead expense
allocations of $0.6 million due to an increase in the overhead allocation rate
resulting from an increase in corporate expenses qualifying for allocation.

Segment EBITDA at Corporate increased $0.1 million, to a loss of $15.3 million
for the year ended December 31, 2020, from a loss of $15.4 million for the year
ended December 31, 2019.  The increase was due to an increase in corporate
overhead allocated through charges to our segments of $13.1 million due to an
increase in expenses qualifying for allocation, a collective decrease in travel,
meeting, training, office supplies and community activity expenses of $7.6
million due to shelter at home and other restrictions on our employees due to
the COVID-19 pandemic resulting in the cancellation of non-essential off-site
activities, a decrease in professional fees of $2.5 million due primarily to
work on legal matters being postponed resulting from temporary court closures
and a decrease in third party tax consulting expenses, a decrease in direct
acquisition expenses of $2.5 million due to changes in acquisition activity, a
decrease in deferred compensation expenses of $1.6 million as a result of
decreases in the market value of investments to which employee deferred
compensation liability balances are tracked and a decrease in share-based
compensation expenses of $1.5 million due primarily to decreased share price
volatility and fewer outstanding shares in the current period 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, partially offset by an increase in accrued cash
incentive compensation expense to our management and non-management employees of
$19.4 million, an increase of $4.0 million in equity-based compensation expenses
associated with fair value adjustments to Company common shares held in our
deferred compensation plan by certain key executives as a result of the shares
being exchanged for other investment options, an increase in software licenses
and subscriptions expenses of $1.7 million due primarily to the addition of new
sales and customer service applications, an increase in payroll and payroll
related expenses of $1.5 million due to annual pay increases and increased
employee termination pay and $2.1 million of other net expense increases.

Liquidity and Capital Resources

The following table sets forth certain cash flow information for the years ended December 31, 2020 and 2019 (in thousands of U.S. dollars):

                                                                   2020             2019
Net cash provided by operating activities                      $   1,408,521    $   1,540,547
Net cash used in investing activities                            (1,046,043)      (1,426,006)
Net cash used in financing activities                               

(78,224) (95,894) Effect of exchange rate changes on cash, cash equivalents and restricted cash

                                                    6,914              608

Net increase in cash, cash equivalents and restricted cash 291,168

           19,255

Cash, cash equivalents and restricted cash at beginning of year

423,221 403,966 Cash, cash equivalents and restricted cash at end of year $ 714,389 $ 423,221

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Operating Activities Cash Flows

For the year ended December 31, 2020, net cash provided by operating activities
was $1.409 billion. For the year ended December 31, 2019, net cash provided by
operating activities was $1.541 billion. The $132.0 million decrease was due
primarily to the following:

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

by operating activities was unfavorably impacted by $108.0 million from

accounts payable and accrued liabilities. Although certain operating expenses

declined as a result of solid waste and E&P volume losses due to economic

disruptions resulting from the COVID-19 pandemic, our operating cash flows

were adversely impacted from the timing of vendor payments and payroll cycles

as well as the payment of higher outstanding liabilities existing prior to the

1) recent economic downturn. This decrease was partially offset by an increase in

accrued payroll tax liabilities of $44.6 million associated with our deferral

of qualifying U.S. payroll and other tax payments as permitted by the CARES

Act, of which a minimum of 50% will be remitted in 2021 and the remainder

remitted in 2022, an increase in liabilities for cash incentive compensation

of $6.3 million and an increase in accrued interest expense liabilities of

$12.3 million due to the timing of interest payments for our outstanding

    senior note obligations.


    Deferred income taxes - Our decrease in net cash provided by operating

activities was unfavorably impacted by $105.1 million from deferred income

taxes as changes in deferred income taxes resulted in a decrease to operating

cash flows of $50.5 million for the year ended December 31, 2020, compared to

2) an increase to operating cash flows of $54.6 million for the year ended

December 31, 2019. During the year ended December 31, 2020, deferred income

taxes were unfavorably impacted by the impairment of certain property and

equipment at our E&P operations. During the year ended December 31, 2019,

deferred income taxes were favorably impacted by accelerated tax depreciation

    from vehicles, equipment and containers acquired in business combinations.


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

3) was unfavorably impacted by $26.9 million from prepaid expenses due primarily

to an increase in prepaid income taxes, prepaid insurance and prepaid vendor

    payments.


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

activities was favorably impacted by $40.5 million from an increase in net

income, excluding depreciation, amortization of intangibles, share-based

compensation, adjustments to and payments of contingent consideration recorded

4) in earnings and loss on disposal of assets and impairments, due primarily to

price increases and cost containment efforts implemented in our solid waste

markets and earnings from acquisitions closed during, or subsequent to, the

year ended December 31, 2019 offsetting a decline in earnings at our E&P

operations, as well as solid waste volume losses resulting from the COVID-19

    pandemic.


    Accounts receivable - Our decrease in net cash provided by operating

activities was favorably impacted by $69.7 million from accounts receivable,

as changes in accounts receivable, net of acquisitions, resulted in an

increase to operating cash flows of $46.8 million for the year ended December

31, 2020, compared to a decrease to operating cash flows of $22.9 million for

the year ended December 31, 2019. During the year ended December 31, 2020, net

price increases of $216.0 million were offset by volume decreases in our solid

5) waste business and E&P business of $238.8 million and $112.1 million,

respectively. The net decrease in revenues resulting from volume losses in

excess of price increases during the year ended December 31, 2020 contributed

to a decrease in accounts receivable at December 31, 2020. During the year

ended December 31, 2019, we recognized net price increases of $237.0 million

and a total of $1.9 million of net volume increases in our solid waste

business and E&P business. The increase in revenues resulting from price

increases and volume increases during the year ended December 31, 2019

contributed to an increase in accounts receivable at December 31, 2019.

As of December 31, 2020, we had a working capital surplus of $379.6 million,
including cash and equivalents of $617.3 million.  Our working capital surplus
increased $256.2 million from a working capital surplus of $123.4 million at
December 31, 2019, including cash and equivalents of $326.7 million, due
primarily to the impact of increased cash balances, increased prepaid expenses
and decreased accounts payable being partially offset by higher accrued
liabilities, short-term contingent consideration liabilities, higer deferred
revenue and a reduction in accounts receivable. To date, we have experienced no
loss or lack of access to our cash and equivalents; however, we can provide no
assurances that access to our cash and equivalents will not be impacted by
adverse conditions in the financial markets.  Our strategy in managing our
working capital is generally to apply the cash generated from our operations
that remains after satisfying our working

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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 decreased $380.0 million to $1.046 billion
for the year ended December 31, 2020, from $1.426 billion for the year ended
December 31, 2019. The significant components of the decrease included the
following:

1) A decrease in cash paid for acquisitions of $347.8 million;

2) A decrease in cash paid for investments in noncontrolling interests of $25.0

million;

A decrease in capital expenditures at operations owned in the comparable

3) periods of $55.8 million due to decreases in container and vehicles for our

collection operations and equipment for our disposal operations exceeding

capital expenditures for landfill sites; and

4) An increase from higher proceeds from the sale of divested operations and

property and equipment of $15.5 million; less

An increase in capital expenditures at operations acquired subsequent to

5) December 31, 2018 of $18.5 million due to additional trucks, containers, heavy

equipment and landfill site costs; and

An increase in capital expenditures for undeveloped landfill property of $35.8

million attributable to expenditures during the year ended December 31, 2020

6) for expansion land at certain existing landfill facilities exceeding

expenditures during the year ended December 31, 2019 for the purchase of a

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

an operating location in the future.

Financing Activities Cash Flows

Net cash used in financing activities decreased $17.7 million to $78.2 million for the year ended December 31, 2020, from $95.9 million for the year ended December 31, 2019. The significant components of the decrease included the following:

A decrease from the net change in long-term borrowings of $167.6 million

(long-term borrowings increased $272.7 million during the year ended December

1) 31, 2020 and increased $105.1 million during the year ended December 31, 2019)

due primarily to maintaining a portion of the proceeds from our 2050 Senior

Notes in cash;

An increase in payments to repurchase our common shares of $105.7 million as

2) we resumed our share repurchase activity during the year ended December 31,

2020; less

An increase in cash dividends paid of $24.8 million due primarily to an

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

    31, 2020 to $0.190 per share, from $0.166 per share for the year ended
    December 31, 2019;

An increase in contingent consideration payments of $9.4 million due primarily

4) to payments during the year ended December 31, 2020 attributable to the

settlement of certain legal matters at an acquired solid waste collection

company;

An increase in tax withholdings related to net share settlements of

5) equity-based compensation of $5.8 million due to an increase in the value of

equity-based compensation awards vesting; and

An increase in debt issuance costs of $5.2 million due to costs incurred

6) during the year ended December 31, 2020 for our 2030 Senior Notes and 2050

Senior Notes exceeding costs incurred during the year ended December 31, 2019

for our 2029 Senior Notes.

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 23, 2020, 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 13,144,773 of our common shares during the period of
August 10, 2020 to August 9, 2021 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 Executive Vice President and Chief Financial
Officer at [phone].  The timing

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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 of the Company authorized the initiation of a quarterly
cash dividend in October 2010 and has increased it on an annual basis. In
October 2020, our Board of Directors authorized an increase to our regular
quarterly cash dividend of $0.02, from $0.185 to $0.205 per share. Cash
dividends of $199.9 million and $175.1 million were paid during the years ended
December 31, 2020 and 2019, respectively. We cannot assure you as to the amounts
or timing of future dividends.

We made $597.1 million in capital expenditures for property and equipment during the year ended December 31, 2020, and we expect to make total capital expenditures for property and equipment of approximately $625 million in 2021.

 In addition, we made $67.5 million in capital expenditures for undeveloped
landfill property during the year ended December 31, 2020 and may
opportunistically make other capital expenditures for undeveloped landfill
property in 2021.  We intend to fund our planned 2021 capital expenditures
principally through cash on hand, internally generated funds and borrowings
under our Credit Agreement. In addition, we may make substantial additional
capital expenditures in acquiring land and solid waste 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, 2020, $650.0 million under the term loan and $203.9 million
under the revolving credit facility were outstanding under the Credit Agreement,
exclusive of outstanding standby letters of credit of $119.6 million. We also
have issued $6.6 million of letters of credit at December 31, 2020 under
facilities other than the Credit Agreement.

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

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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.

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.

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 Base Indenture, as
supplemented by the Second Supplemental Indenture, dated as of April 16, 2019.

 We will pay interest on the 2029 Senior Notes semi-annually in arrears 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.

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On January 23, 2020, we completed an underwritten public offering of $600.0
million aggregate principal amount of 2.60% Senior Notes due 2030 (the "2030
Senior Notes"). The 2030 Senior Notes were issued under the Base Indenture, as
supplemented by the Third Supplemental Indenture, dated as of January 23, 2020.

 We will pay interest on the 2030 Senior Notes semi-annually in arrears and the
2030 Senior Notes will mature on February 1, 2030.  The 2030 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 2030 Senior Notes are not guaranteed by any of our
subsidiaries.

On March 13, 2020, we completed an underwritten public offering of $500.0
million aggregate principal amount of 3.05% Senior Notes due 2050 (the "2050
Senior Notes"). The 2050 Senior Notes were issued under the Base Indenture, as
supplemented by the Fourth Supplemental Indenture, dated as of March 13, 2020.

 We will pay interest on the 2050 Senior Notes semi-annually in arrears and the
2050 Senior Notes will mature on April 1, 2050.  The 2050 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 2050 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.

Contractual Obligations

As of December 31, 2020, 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                             $ 4,743,635    $    8,268    $ 1,437,815    $      534,373    $ 2,763,179
Cash interest payments                     $ 1,242,346    $  159,967    $   280,106    $      210,455    $   591,818
Contingent consideration                   $    91,833    $   43,297    $     9,847    $        3,224    $    35,465
Operating leases                           $   210,905    $   36,581    $    65,029    $       40,435    $    68,860
Final capping, closure and post-closure    $ 1,527,709    $   19,976    $  

66,201 $ 9,122 $ 1,432,410

Long-term debt payments include:

$203.9 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, 2020, $200.0 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 1.35% on such date. At

December 31, 2020, $3.9 million of the outstanding borrowings drawn under the

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

interest at a total rate of 1.66% on such date.

$650.0 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, 2020, 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 1.35% on such date).

$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%. We have

3) recorded this obligation in the payments due in 1 to 3 years category in the

table above as we have the intent and ability to redeem the 2021 Senior Notes

    on April 1, 2021 using borrowings under our Credit Agreement.


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$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%. We have

4) recorded this obligation in the payments due in 1 to 3 years category in the

table above as we have the intent and ability to redeem the New 2021 Senior

    Notes on June 1, 2021 using borrowings under our Credit Agreement.

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%.

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%.

13) $600.0 million in principal payments due 2030 related to our 2030 Senior

Notes. The 2030 Senior Notes bear interest at a rate of 2.60%.

14) $500.0 million in principal payments due 2050 related to our 2050 Senior

Notes. The 2050 Senior Notes bear interest at a rate of 3.05%.

$43.1 million in principal payments related to our notes payable to sellers

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

bear interest at rates between 2.42% and 10.35% at December 31, 2020, and

have maturity dates ranging from 2021 to 2036.

$3.8 million in principal payments related to our financing leases. Our

16) financing leases bear interest at a rate of 1.89% at December 31, 2020, and

have a lease expiration date of 2026.

The following assumptions were made in calculating cash interest payments:

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

rate plus the applicable LIBOR margin, the base rate plus the applicable base

1) rate margin, the Canadian Dollar Offered Rate plus the applicable acceptance

fee and the Canadian prime rate plus the applicable prime rate margin at

December 31, 2020. 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.


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Contingent consideration payments include $71.7 million recorded as liabilities
in our consolidated financial statements at December 31, 2020, and $20.1 million
of future interest accretion on the recorded obligations.

We are party to operating lease agreements and finance leases 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 and equipment 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            $    132,047     $    92,029

$ 40,018 $ - $ -

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, 2020, our

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

purchase contracts under which we have 52.5 million gallons remaining to be

purchased for a total of $132.0 million. The current fuel purchase contracts

expire on or before December 31, 2023. These arrangements have not materially

affected our financial position, results of operations or liquidity during

the year ended December 31, 2020, 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,
2020, nor are they expected to have a material impact on our future financial
position, results of operations or liquidity.

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

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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, 2020, 2019 and 2018, are
calculated as follows (amounts in thousands of U.S. dollars):


                                                             Years Ended December 31,
                                                        2020           2019           2018
Net cash provided by operating activities            $ 1,408,521    $ 1,540,547    $ 1,411,235
Plus (less): Change in book overdraft                      1,096        (2,564)          (839)
Plus: Proceeds from disposal of assets                    19,084          3,566          5,385
Less: Capital expenditures for property and
equipment                                              (597,053)      (634,406)      (546,145)
Less: Distributions to noncontrolling interests                -          (570)          (103)
Adjustments:
Payment of contingent consideration recorded in
earnings (a)                                              10,371              -             11
Cash received for divestitures (b)                      (10,673)        (2,376)        (2,030)
Transaction-related expenses (c)                           9,803         12,335          8,607
Integration-related and other expenses (d)                     -              -          2,760
Pre-existing Progressive Waste share-based grants
(e)                                                        5,770          4,810          5,772
Tax effect (f)                                           (5,021)        (4,565)        (4,752)
Adjusted free cash flow                              $   841,898    $   916,777    $   879,901

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

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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, minus net loss attributable to noncontrolling interests, plus
income tax provision, 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, 2020, 2019 and 2018, are calculated as follows
(amounts in thousands of U.S. dollars):




                                                             Years Ended December 31,
                                                        2020           2019           2018
Net income attributable to Waste Connections         $   204,677    $   566,841    $   546,871
Plus (less): Net income (loss) attributable to
noncontrolling interests                                   (685)          (160)            283
Plus: Income tax provision                                49,922        139,210        159,986
Plus: Interest expense                                   162,375        147,368        132,104
Less: Interest income                                    (5,253)        (9,777)        (7,170)
Plus: Depreciation and amortization                      752,404        743,918        680,487
Plus: Closure and post-closure accretion                  15,095         14,471         12,997
Plus: Impairments and other operating items              466,718         61,948         20,118
Plus (less): Other expense (income), net                   1,392        (5,704)            170

Adjustments:

Plus: Transaction-related expenses (a)                     9,803         12,335          8,607
Plus: Fair value changes to equity awards (b)              5,536          3,104          9,205
Plus: Integration-related and other expenses (c)               -           

  -          2,760
Adjusted EBITDA                                      $ 1,661,984    $ 1,673,554    $ 1,566,418

(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.




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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, 2020, 2019
and 2018, are calculated as follows (amounts in thousands of U.S. dollars,

except per share amounts):




                                                             Years Ended December 31,
                                                         2020           2019          2018
Reported net income attributable to Waste Connections $   204,677    $  566,841    $  546,871
Adjustments:
Amortization of intangibles (a)                           131,302       125,522       107,779
Impairments and other operating items (b)                 466,718        61,948        20,118
Transaction-related expenses (c)                            9,803        12,335         8,607
Fair value changes to equity awards (d)                     5,536         3,104         9,205
Integration-related and other expenses (e)                      -          

  -         2,760
Tax effect (f)                                          (153,758)      (50,189)      (37,165)
Tax items (g)                                              31,508          

- 9,093 Adjusted net income attributable to Waste Connections $ 695,786 $ 719,561 $ 667,268

Diluted earnings per common share attributable to
Waste Connections' common shareholders:
Reported net income                                   $      0.78    $     2.14    $     2.07
Adjusted net income                                   $      2.64    $     2.72    $     2.52

(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 2020, reflects the impact of a portion of our 2019 inter-entity payments

no longer being deductible for tax purposes due to the finalization of tax

regulations on April 7, 2020 under Internal Revenue Code section 267A and an

(g) increase in deferred tax liabilities resulting from the E&P impairment. 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.

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.  To the extent that there are
decreases in fuel costs, in some cases, a portion of these reductions are passed
through to customers in the form

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of lower fuel and material surcharges. Therefore, we believe that we should be
able to increase prices to offset many cost increases that result from inflation
in the ordinary course of business. However, competitive pressures or delays in
the timing of rate increases under our contracts, particularly amid the economic
impact of the COVID-19 pandemic, 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.

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