CASELLA WASTE SYSTEMS INC

Previous wording

We manage our solid waste operations on a geographic basis through three regional operating segments, the Eastern, Western and Mid-Atlantic regions, each of which provides a comprehensive range of non-hazardous solid waste services. We manage our resource renewal operations through the Resource Solutions operating segment, which leverages our core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for our larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in our Corporate Entities segment.

Current wording

We provide integrated solid waste services in ten states: Vermont, New Hampshire, New York, Massachusetts, Connecticut, Maine, Pennsylvania, Delaware, New Jersey and Maryland, with our headquarters located in Rutland, Vermont. We manage our solid waste operations on a geographic basis through three regional operating segments, the Eastern, Western and Mid-Atlantic regions, each of which provides a comprehensive range of non-hazardous solid waste services. We manage our resource renewal operations through the Resource Solutions operating segment, which leverages our core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for our larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in our Corporate Entities segment.

Previous wording

For financial information concerning our reportable operating segments and additional disclosure over the GFL Acquisition refer to “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Current wording

For financial information concerning our reportable operating segments refer to Note 20. Segment Reportingto our consolidated financial statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Previous wording

As of January 31, 2024, we owned and/or operated 64 solid waste collection operations, 71 transfer stations, 29 recycling and processing facilities, eight Subtitle D landfills, three landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition materials.

Current wording

As of January 31, 2025, we owned and/or operated 71 solid waste collection operations, 71 transfer stations, 28 recycling and processing facilities, eight Subtitle D landfills, three landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition materials.

Previous wording

In the fiscal year ended December 31, 2023 ("fiscal year 2023"), we acquired seven businesses: the GFL Subsidiaries, which include solid waste collection, transfer and recycling operations in Pennsylvania, Maryland and Delaware; the assets of Consolidated Waste Services, LLC and its affiliates (dba Twin Bridges), which was completed on September 1, 2023 and consists of a collection, transfer and recycling business in the greater Albany, New York area (the "Twin Bridges Acquisition"); and five additional solid waste collection businesses that provide collection, transfer and recycling services. Our total consideration for acquisitions completed in fiscal year 2023 was $846.6 million, including $846.7 in cash, $2.7 million in holdbacks and additional consideration owed to sellers, partially offset by $(2.8) million of open working capital settlements due from sellers.

Current wording

In fiscal year 2023, we acquired seven businesses: the equity interests of four wholly-owned subsidiaries of GFL Environmental Inc., which include solid waste collection, transfer and recycling operations in Pennsylvania, Maryland and Delaware (the “GFL Acquisition”); the assets of Consolidated Waste Services, LLC and its affiliates (dba Twin Bridges), consisting of a collection, transfer and recycling business in the greater Albany, New York area (the “Twin Bridges Acquisition”); and five additional solid waste collection businesses that provide collection, transfer and recycling services. Our total consideration for acquisitions completed in fiscal year 2023 was $846.6 million, including $846.7 in cash, $2.7 million in holdbacks and additional consideration owed to sellers, partially offset by $(2.8) million of open working capital settlements due from sellers, that has subsequently been received.

Previous wording

We manage our solid waste operations, which include a full range of solid waste services, on a geographic basis through three regional operating segments, which we designate as the Eastern, Western and Mid-Atlantic regions. The Mid-Atlantic region, which was formed as a result of the GFL Acquisition on June 30, 2023, commenced operations on July 1, 2023. Revenues associated with our solid waste operations are derived mainly from fees charged to customers for solid waste collection and disposal services, including landfill, transfer station and transportation services, landfill gas-to-energy services, and processing services in the eastern United States. We derive a substantial portion of our collection revenues from commercial, industrial and municipal services that are generally performed under service agreements or pursuant to contracts with municipalities. The majority of our residential collection services are performed on a subscription basis with individual property owners or occupants. Landfill and transfer customers are charged a tipping fee on a per ton basis for disposing of their solid waste at our disposal facilities and transfer stations. We also generate and sell electricity at certain of our landfill facilities. We manage our resource renewal operations through the Resource Solutions operating segment, which includes processing services and non-processing services, which we previously referred to as our Customer Solutions business, but now refer to as our National Accounts business. Revenues from processing services are derived from customers in the form of processing fees, tipping fees, commodity sales, primarily comprised of newspaper, corrugated containers, plastics, ferrous and aluminum, and organic materials such as our earthlife® soils products including fertilizers, composts and mulches. Revenues from our National Accounts business are derived from brokerage services and overall resource management services providing a wide range of environmental services and resource management solutions to large and complex organizations, as well as traditional collection, disposal and recycling services provided to large account multi-site customers.

Current wording

We manage our solid waste operations, which include a full range of solid waste services, on a geographic basis through three regional operating segments, which we designate as the Eastern, Western and Mid-Atlantic regions. Revenues associated with our solid waste operations are derived mainly from fees charged to customers for solid waste collection and disposal services, including landfill, transfer station and transportation, while also providing landfill gas-to-energy and processing services in the eastern United States. We derive a substantial portion of our collection revenues from commercial, industrial and municipal services that are generally performed under service agreements or pursuant to contracts with municipalities. The majority of our residential collection services are performed on a subscription basis with individual property owners or occupants. Landfill and transfer customers are charged a tipping fee on a per ton basis for disposing of their solid waste at our disposal facilities and transfer stations. We also generate and sell electricity at certain of our landfill facilities. We manage our resource renewal operations through the Resource Solutions operating segment, which includes processing services and services provided by our National Accounts business. Revenues from processing services are derived from customers in the form of processing fees, tipping fees, commodity sales, primarily comprised of newspaper, corrugated containers, plastics, ferrous and aluminum, and organic materials such as our earthlife® soils products including fertilizers, composts and mulches. Revenues from our National Accounts business are derived from brokerage services and overall resource management services providing a wide range of environmental services and resource management solutions to large and complex organizations, as well as traditional collection, disposal and recycling services provided to large account multi-site customers.

Previous wording

•Price increased due to (i) $42.9 million, or 7.9%, from favorable collection pricing and (ii) $15.7 million, or 6.9%, from favorable disposal pricing associated with our landfills, transfer stations and, to a lesser extent, transportation services.

Current wording

•Price increased solid waste revenues due to (i) $46.1 million, or 6.5% as a percentage of collection revenues, from favorable collection pricing and (ii) $9.5 million, or 3.9% as a percentage of disposal revenues, from favorable disposal pricing associated with our landfills and transfer stations;

Previous wording

•Surcharge and other fees increased primarily due to (i) new fees related to legacy fuel and environmental cost recovery programs associated with the GFL Acquisition and (ii) higher sustainability recycling adjustment fees ("SRA Fee(s)") revenues as a result of lower recycled commodity prices and a higher customer participation rate; partially offset by lower energy and environmental fees ("E&E Fee(s)") revenues associated with our fuel cost recovery program as a result of lower diesel fuel prices, partially offset by a higher customer participation rate. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” included in this Annual Report on Form 10-K for additional information regarding our E&E Fee and SRA Fee;

Current wording

•Surcharge and other fees decreased solid waste revenues primarily due to (i) lower energy and environmental fee (“E&E Fee(s)”) revenues associated with our fuel cost recovery program related to lower diesel fuel prices and (ii) lower sustainability recycling adjustment fee (“SRA Fee(s)”) revenues due to higher recycled commodity prices as compared to the prior year periods; partially offset by higher revenues from fees related to legacy fuel and environmental cost recovery programs associated with acquired businesses. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” included in this Annual Report on Form 10-K for additional information regarding our E&E Fee and SRA Fee;

Previous wording

•Commodity price and volume decreased primarily due to (i) unfavorable commodity and energy pricing and (ii) lower energy volumes; partially offset by higher commodity processing volumes; and

Current wording

•Commodity price and volume increased solid waste revenues primarily due to (i) favorable commodity and energy pricing, (ii) higher energy volumes, and (iii) to a lesser extent, higher commodity processing volumes; and

Previous wording

•Acquisitions increased due to (i) the partial year impact of the seven acquisitions completed in fiscal year 2023, including the GFL Acquisition and Twin Bridges Acquisition, as described above, and (ii) the rollover impact of the twelve acquisitions completed in fiscal year 2022.

Current wording

•Acquisitions increased solid waste revenues due to the partial year impact of the acquisition of eight business in fiscal year 2024, as well as the rollover impact of seven acquisitions completed in fiscal year 2023.

Previous wording

•Direct labor costs increased due primarily to (i) acquisitions, with an increase as a percentage of revenues associated with acquired business mix, including more labor intensive rear-load operations, and (ii) higher wages and benefit costs reflecting inflationary pressures; partially offset by (a) improved routing efficiencies and (b) lower outside labor costs.

Current wording

•Direct labor costs increased primarily due to (i) acquisitions and (ii) higher wages and benefit costs reflecting cost inflation; partially offset by improved routing efficiencies.

Previous wording

•Direct operational costs increased in aggregate dollars due to (i) acquisitions, (ii) higher accretion expense associated with changes in the timing and cost estimates of our closure, post-closure, and capping obligations, (iii) higher host community and royalty fees, primarily in our Western region, (iv) higher leachate disposal costs, and (v) general cost inflation; partially offset in dollars, and more than offset as a percentage of revenues, by lower other landfill operating costs related to lower volumes.

Current wording

•Direct operational costs increased in aggregate dollars primarily due to (i) acquisitions, (ii) higher leachate disposal costs, (iii) higher short term rental expense driven by delays in the delivery of fleet vehicles as well as needs from entering new municipal contracts, (iv) higher accretion expense associated with changes in the timing and cost estimates of our closure, post-closure, and capping obligations, (v) higher accruals related to insurance claims, and (vi) general cost inflation; partially offset by lower host community and royalty fees.

Previous wording

•Fuel costs increased in aggregate dollars due to acquisitions, partially offset in dollars, and more than offset as a percentage of revenues, by lower diesel fuel prices and lower fuel consumption related to lower base business solid waste volumes. See Item 7A. "Quantitative and Qualitative Disclosures about Market Risk" of this Annual Report on Form 10-K for additional information regarding our fuel costs.

Current wording

•Fuel costs increased in aggregate dollars due to acquisitions, partially offset primarily by lower diesel fuel prices. See Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of this Annual Report on Form 10-K for additional information regarding our fuel costs.

Previous wording

•Maintenance and repair costs increased due to (i) acquisitions, (ii) higher personnel and parts costs reflecting inflationary pressures, and (iii) higher vehicle maintenance costs driven by delays in the delivery of fleet replacements.

Current wording

•Maintenance and repair costs increased due to (i) acquisitions, (ii) higher personnel and parts costs reflecting cost inflation, and (iii) higher vehicle maintenance costs driven by delays in the delivery of fleet replacements.

Previous wording

•Other operational costs increased due to (i) acquisitions, (ii) higher spend associated with supporting acquisition-related growth, (iii) increased facility insurance costs, and (iv) general cost inflation; partially offset by a gain on resolution of acquisition-related contingent consideration associated with the reversal of a contingency for a transfer station permit expansion in our Western region that is no longer deemed viable.

Current wording

•Other operational costs increased due to (i) acquisitions, (ii) higher spending associated with supporting acquisition-related growth, and (iii) general cost inflation.

Previous wording

General and administration expense includes: (i) labor costs, which consist of salaries, wages, incentive compensation and related benefit costs such as health and welfare benefits and workers compensation costs related to management, clerical and administrative functions; (ii) professional service fees; (iii) provision for expected credit losses; and (iv) other overhead costs including those associated with marketing, sales force and community relations efforts.

Current wording

General and administration expense includes: (i) labor costs, which consist of salaries, wages, incentive compensation and related benefit costs such as health and welfare benefits and workers compensation costs related to management, clerical and administrative functions; (ii) professional service fees; (iii) provision for expected credit losses; and (iv) other overhead costs including those associated with marketing, sales and community relations efforts.

Previous wording

A summary of the major components of our general and administration expenses is as follows (dollars in millions and as a percentage of total revenues):

Current wording

A summary of the major components of our general and administration expense is as follows (dollars in millions and as a percentage of total revenues):

Previous wording

Depreciation and amortization expense increased in fiscal year 2023 primarily due to (i) acquisitions, including the impact of accelerated amortization schedules of certain intangibles, (ii) net investment in property and equipment in our existing operations, and (iii) higher landfill amortization expense related to changes in cost and other assumptions from the prior year periods, more than offsetting lower landfill volumes.

Current wording

Depreciation and amortization expense increased in fiscal year 2024 primarily due to (i) acquisitions, including the impact of accelerated amortization schedules of certain intangibles, (ii) investment in property and equipment in our existing operations, and (iii) higher landfill amortization expense related to changes in cost and other assumptions from the prior year period, more than offsetting lower landfill volumes.

Previous wording

In fiscal years 2023 and 2022, we recognized expenses of $15.0 million and $4.6 million, respectively, comprised primarily of legal, consulting and other similar costs associated with the due diligence, acquisition and integration of acquired businesses, including the GFL Acquisition and the Twin Bridges Acquisition, in fiscal year 2023, as well as select development projects. See Note 5, Business Combinations, to our consolidated financial statements included under Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for disclosure regarding acquisition activity.

Current wording

In fiscal years 2024 and 2023, we recognized expenses of $24.9 million and $15.0 million, respectively, comprised primarily of legal, consulting, rebranding and other costs associated with the due diligence, acquisition and integration of acquired businesses. Fiscal year 2024 included a charge for an increase in the reserve against accounts receivable of the businesses acquired in the GFL Acquisition as a result of our inability to pursue collections during the transition services period with the seller, resulting in accounts receivable aged beyond what is typical in our business. See Note 5, Business Combinations, to our consolidated financial statements included under Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for disclosure regarding acquisition activity.

Previous wording

In fiscal year 2023, we recorded a charge of $3.9 million consisting of both (i) the write-off of historical payments associated with capping work that has been deemed no longer viable due to a veneer failure and (ii) the related operating expenses incurred to clean up the affected capping material at a Subtitle D landfill we operate located in Seneca, New York. Engineering analysis is currently underway to determine root causes and responsibility for the event.

Current wording

In fiscal year 2023, we recorded a charge of $3.9 million consisting of (i) the write-off of historical payments associated with capping work that was deemed no longer viable due to a veneer failure and (ii) the related operating expenses incurred to clean up the affected capping material at a Subtitle D landfill we operate located in Seneca, New York. In fiscal year 2024, we recorded a recovery of $(1.7) million consisting of (i) a partial reversal of historical payments written off after an engineering evaluation determined that a portion of the area affected by the veneer failure was deemed to still be viable as well as (ii) a recovery of operating expenses incurred during the clean-up of the affected capping material as part of a settlement with a third party.

Previous wording

In the fiscal year ended December 31, 2017, we initiated the plan to cease operations of our landfill located in Southbridge, Massachusetts ("Southbridge Landfill") and later closed it in November 2018 when Southbridge Landfill reached its final capacity. Accordingly, in fiscal years 2023 and 2022, we recorded charges associated with the closure of our Southbridge Landfill (in millions) as follows:

Current wording

In June 2017, we initiated the plan to cease operations of our landfill located in Southbridge, Massachusetts (“Southbridge Landfill”) and later closed it in November 2018 when the Southbridge Landfill reached its final capacity. Accordingly, in fiscal years 2024 and 2023, we recorded charges associated with the closure of our Southbridge Landfill (in millions) as follows:

Previous wording

In fiscal year 2023, we accrued for a charge of $6.2 million in current liabilities due to reaching an agreement at a mediation held on June 20, 2023 with the collective class members of a class action lawsuit relating to certain claims under the Fair Labor Standards Act of 1938 as well as state wage and hours laws. The settlement agreement was executed July 24, 2023 and has received court approval.

Current wording

In fiscal year 2023, we recorded a charge of $6.2 million in connection with reaching an agreement at a mediation held on June 20, 2023 with the collective class members of a class action lawsuit relating to certain claims under the Fair Labor Standards Act of 1938 (“FLSA”) as well as state wage and hours laws. The settlement agreement, which received court approval, was executed on July 24, 2023 and subsequently paid in fiscal year 2024.

Previous wording

Debt activity. Net cash associated with debt activity increased $409.9 million in fiscal year 2023 compared to fiscal year 2022 due primarily to entering into the $430.0 million aggregate principal amount 2023 Term Loan Facility in June 2023 and the issuance of $35.0 million aggregate principal amount of New York Bonds 2020R-2 in August 2023, partially offset by the issuance of $35.0 million aggregate principal amount of Vermont Bonds 2022A-1 in the prior year.

Current wording

Our interest expense, net increased $15.1 million in fiscal year 2024 due primarily to the roll over impacts of (i) entering into a $430.0 million aggregate principal amount term loan A facility to partially fund the GFL Acquisition in June 2023 and (ii) the issuance of $35.0 million aggregate principal amount of New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2020R-2 (“New York Bonds 2020R-2”) in August 2023.

Previous wording

Our provision for income taxes was $11.6 million in fiscal year 2023 and $21.9 million in fiscal year 2022. For fiscal year 2023, the provision for income taxes includes $4.4 million of current income taxes and $7.2 million of deferred income taxes. The provision for income taxes in fiscal year 2022 included $5.4 million of current income taxes and $16.5 million of deferred income taxes. The effective rate for the fiscal year 2023 is 31.4% and is computed based on the statutory rate of 21% adjusted primarily for state taxes and nondeductible officer compensation.

Current wording

Our provision for income taxes was $7.5 million in fiscal year 2024 and $11.6 million in fiscal year 2023. For fiscal year 2024, the provision for income taxes included $0.6 million of current income taxes and $6.9 million of deferred income taxes. The provision for income taxes in fiscal year 2023 included $4.4 million of current income taxes and $7.2 million of deferred income taxes. The effective rate for the fiscal year 2024 was 35.7% and is computed based on the statutory rate of 21% adjusted primarily for state taxes and certain nondeductible expenses.

Previous wording

Depending on bonus depreciation and other elections made on the 2023 tax return when filed, we project to carry $7.2 million of pre-2018 net operating losses and $125.7 million of post-2017 net operating losses into the 2024 tax year.

Current wording

Depending on bonus depreciation and other elections made on the 2024 tax return when filed, we project to carry no pre-2018 net operating losses and $83.2 million of post-2017 net operating losses into the 2025 tax year.

Previous wording

In addition, the TCJA added limitations on the deductibility of interest expense that became more restrictive beginning in tax year 2022 and limits the deductibility of some of our interest expense in tax year 2023. Depending on elections made on the 2023 return when filed, we expect $25.1 million of interest expense to be disallowed. Any interest expense disallowed may be carried forward indefinitely and deducted in later years subject to said interest limitation.

Current wording

In addition, the TCJA added limitations on the deductibility of interest expense that became more restrictive beginning in tax year 2023 and limits the deductibility of some of our interest expense. Depending on elections made on the 2024 return when filed, we expect a combined $36.0 million of interest expense to be disallowed for tax years 2023 and 2024. Interest expense disallowed is carried forward indefinitely for deduction in later years subject to said interest limitation.

Previous wording

We report selected information about our reportable operating segments in a manner consistent with that used for internal management reporting. We classify our solid waste operations on a geographic basis through regional operating segments, our Eastern, Western and Mid-Atlantic regions. The Mid-Atlantic region, which was formed as a result of the GFL Acquisition on June 30, 2023, commenced operations on July 1, 2023. Revenues associated with our solid waste operations are derived mainly from solid waste collection and disposal services, including landfill, transfer station and transportation services, landfill gas-to-energy services, and processing services in the eastern United States. Our Resource Solutions operating segment leverages our core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for our larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. Revenues associated with our Resource Solutions operations are comprised of processing services and services provided by our National Accounts business. Revenues from processing services are derived from customers in the form of processing fees, tipping fees, commodity sales, and organic material sales. Revenues from our National Accounts business are derived from brokerage services and overall resource management services providing a wide range of environmental services and resource management solutions to large and complex organizations, as well as traditional collection, disposal and recycling services provided to large account multi-site customers. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in our Corporate Entities segment, which is not a reportable operating segment. Corporate Entities results reflect those costs not allocated to our reportable operating segments.

Current wording

We report selected information about our reportable operating segments in a manner consistent with that used for internal management reporting. We classify our solid waste operations on a geographic basis through regional operating segments, our Eastern, Western and Mid-Atlantic regions. Revenues associated with our solid waste operations are derived mainly from solid waste collection and disposal services, including landfill, transfer station and transportation, while also providing landfill gas-to-energy and processing services in the eastern United States. Our Resource Solutions operating segment leverages our core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for our larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. Revenues associated with our Resource Solutions operations are comprised of processing services and services provided by our National Accounts business. Revenues from processing services are derived from customers in the form of processing fees, tipping fees, commodity sales, and organic material sales. Revenues from our National Accounts business are derived from brokerage services and overall resource management services providing a wide range of environmental services and resource management solutions to large and complex organizations, as well as traditional collection, disposal and recycling services provided to large account multi-site customers. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in our Corporate Entities segment, which is not a reportable operating segment. Operating income by segment reported in fiscal year 2023 has been updated to conform with the presentation for fiscal year 2024, which does not have Corporate Entities costs allocated to our reportable operating segments.

Previous wording

Operating income declined in fiscal year 2023 by $(3.2) million as compared to the prior year. The year-over-year decline was due to (i) an increase in costs due to acquisitions, (ii) the legal settlement charge, (iii) the landfill capping charge - veneer failure, (iv) general cost inflation, including for disposal, labor, and maintenance costs, and (v) higher landfill amortization expense resulting from changes in cost and other assumptions from the prior year; partially offset by (a) revenue growth, described above, (b) intercompany revenues, (c) lower costs associated with lower base business collection volumes, (d) improved routing efficiencies, (e) a gain on resolution of acquisition-related contingent consideration associated with the reversal of a contingency for a transfer station permit expansion that is no longer deemed viable, and (f) the environmental remediation charge taking place in fiscal year 2022. See further discussion about the expense from acquisition activities, the legal settlement, the landfill capping charge - veneer failure, and the environmental remediation charge above in "Operating Expenses".

Current wording

Operating income increased in fiscal year 2024 by $11.7 million as compared to the prior year. The year-over-year increase was due to (i) revenues growth, described above, (ii) higher intercompany related operating income, (iii) the recovery in fiscal year 2024 and the charge in fiscal year 2023 related to the landfill capping veneer failure, (iv) lower costs due to improved routing efficiencies and (v) a charge for the FLSA-related legal settlement in fiscal year 2023; partially offset by (a) higher costs associated with operating and supporting acquired businesses, including the impact of accelerated amortization schedules of certain intangibles, (b) increased depreciation expense due to acquisitions and investment in property and equipment, (c) general cost inflation, including for disposal, labor, and maintenance costs, (d) delays in the delivery of fleet vehicles resulting in higher short term rental and vehicle maintenance costs, (e) higher leachate disposal costs, (f) higher accretion and landfill amortization expense associated with changes in the timing and cost estimates of our closure, post-closure, and capping obligations, (g) accruals related to insurance claims, and (h) a gain on resolution of acquisition-related contingent consideration in fiscal year 2023 associated with the reversal of a contingency for a transfer station permit expansion that was deemed no longer viable. See further discussion about the legal settlement and the landfill capping charge - veneer failure above in “Operating Expenses”.

Previous wording

Collection and transfer station operations for our Mid-Atlantic region operating segment commenced on July 1, 2023 following the GFL Acquisition. The operating loss of $(5.8) million was impacted by $5.3 million of expense from acquisition activities, comprised of legal, consulting and integration costs related to the GFL Acquisition, as well as the impact of accelerated amortization schedules of certain acquired intangibles.

Current wording

The operating loss of $(4.6) million in fiscal year 2023 was impacted by (i) $20.3 million of depreciation and amortization expense, including the impact of accelerated amortization schedules of certain acquired intangibles, as well as (ii) $5.3 million of expense from acquisition activities, comprised of legal, consulting and integration costs related to the GFL Acquisition. See further discussion about the expense from acquisition activities above in “Operating Expenses”.

Previous wording

A summary of the period-to-period change in Resource Solutions revenues (dollars in millions and as percentage growth of solid waste revenues) follows:

Current wording

A summary of the period-to-period change in Resource Solutions revenues (dollars in millions and as percentage growth of Resource Solutions revenues) follows:

Previous wording

We continually monitor our actual and forecasted cash flows, our liquidity, and our capital requirements in order to properly manage our liquidity needs as we move forward based on the capital intensive nature of our business and our growth acquisition strategy. As of December 31, 2023, we had $272.3 million of undrawn capacity under our $300.0 million revolving credit facility ("Revolving Credit Facility") and $220.9 million of cash and equivalents to help meet our short-term and long-term liquidity needs. We expect existing cash and cash equivalents combined with available cash flows from operations and financing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future.

Current wording

We continually monitor our actual and forecasted cash flows, our liquidity, and our capital requirements in order to properly manage our liquidity needs as we move forward based on the capital intensive nature of our business and our growth acquisition strategy. As of December 31, 2024, we had $675.4 million of undrawn capacity under our $700.0 million revolving credit facility (“Revolving Credit Facility”) and $383.3 million of cash, cash equivalents and restricted cash to help meet our short-term and long-term liquidity needs. We expect existing cash, cash equivalents and restricted cash combined with available cash flows from operations and financing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future.

Previous wording

Current assets, excluding cash and cash equivalents, increased $69.1 million and current liabilities, excluding current maturities of debt, increased $74.5 in fiscal year 2023, resulting in a $(5.4) million decline in working capital, net (defined as current assets, excluding cash and cash equivalents, minus current liabilities, excluding current maturities of debt) from $(32.3) million as of December 31, 2022 to $(37.7) million as of December 31, 2023. We strive to maintain a negative working capital cycle driven by shorter days sales outstanding as compared to days payable outstanding in an effort to collect money at a faster rate than paying bills to facilitate business growth.

Current wording

Current assets, excluding cash, cash equivalents and restricted cash, increased $24.6 million, and current liabilities, excluding current maturities of debt, increased $21.6 in fiscal year 2024, resulting in a $3.0 million increase in working capital, net (defined as current assets, excluding cash, cash equivalents and restricted cash, minus current liabilities, excluding current maturities of debt) from $(37.7) million as of December 31, 2023 to $(34.7) million as of December 31, 2024. We strive to maintain a negative working capital by driving shorter days sales outstanding as compared to days payable outstanding.

Previous wording

Cash and cash equivalents increased $149.7 million in fiscal year 2023. A summary of cash flows (in millions) follows:

Current wording

Cash, cash equivalents and restricted cash increased $162.4 million in fiscal year 2024. A summary of cash flows (in millions) follows:

Previous wording

Net cash provided by operating activities increased $15.8 million in fiscal year 2023 as compared to fiscal year 2022. This was the result of operational performance, partially offset by higher interest expense and an increase in the unfavorable cash flow impact associated with the changes in our assets and liabilities, net of effects of acquisitions and divestitures. For discussion of our operational performance in fiscal year 2023 as compared to fiscal year 2022, including discussions of our Loss from termination of bridge financing and Landfill capping charge - veneer failure, see "Results of Operations" included in this Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report on Form 10-K.

Current wording

Net cash provided by operating activities increased $48.3 million in fiscal year 2024 as compared to fiscal year 2023. This was the result of revenue growth driven by acquisition activity, partially offset by higher interest expense and an increase in the unfavorable cash flow impact associated with the changes in our assets and liabilities, net of effects of acquisitions and divestitures. For discussion of our operational performance in fiscal year 2024 as compared to fiscal year 2023, including discussions of our Loss from termination of bridge financing and Landfill capping (recovery) charge - veneer failure, see “Results of Operations” included in this Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.

Previous wording

Acquisitions, net of cash acquired. In fiscal year 2023, we acquired seven businesses for total consideration of $846.6 million, including $846.7 million in cash, and paid $5.1 million in holdback payments on businesses previously acquired, as compared to fiscal year 2022 during which we acquired fourteen businesses for total consideration of $82.7 million, including $76.6 million in cash, and paid $1.6 million in holdback payments on businesses previously acquired.

Current wording

Acquisitions, net of cash acquired. In fiscal year 2024, we acquired eight businesses for total consideration of $467.9 million, including $469.2 million in cash, and received $(0.6) million, net in cash after working capital settlements, holdbacks and other consideration owed payments, as compared to fiscal year 2023 during which we acquired seven businesses for total consideration of $846.6 million, including $846.7 million in cash, and paid $5.1 million in holdback payments on businesses previously acquired.

Previous wording

Capital expenditures. Capital expenditures were $24.0 million higher in fiscal year 2023 as compared to fiscal year 2022 primarily due to higher capital spend associated with (i) facility spend related to the retrofitting of our Boston, Massachusetts single-stream material recovery facility and the purchase of a transfer station that was formerly leased, (ii) development of rail side infrastructure at our Subtitle D landfill located in Mount Jewett, Pennsylvania, (iii) landfill development, (iv) acquisition activity, and (v) general inflation in capital costs; partially offset by timing of spend for vehicles, machinery, equipment and containers.

Current wording

Capital expenditures. Capital expenditures were $48.3 million higher in fiscal year 2024 as compared to fiscal year 2023 primarily due to higher capital spend driven by (i) acquisition activity, (ii) spend related to the retrofitting of our Willimantic, Connecticut MRF, (iii) landfill development, (iv) increased investment in our fleet, and (v) general inflation in capital costs.

Previous wording

Payments of debt issuance costs. We paid $12.8 million of debt issuance costs in fiscal year 2023 related primarily to bridge financing activities associated with the GFL Acquisition and the Twin Bridges Acquisition. We paid $1.2 million of debt issuance costs in fiscal year 2022 related to the issuance of Vermont Bonds 2022A-1.

Current wording

Payments of debt issuance costs. We paid $6.6 million of debt issuance costs in fiscal year 2024 primarily related to refinancing activities associated with entering into the Credit Agreement as compared to $12.8 million of debt issuance costs in fiscal year 2023 related primarily to bridge financing activities associated with the GFL Acquisition and the Twin Bridges Acquisition.

Previous wording

Proceeds from the public offering of Class A Common Stock. On June 16, 2023, we completed a public offering of 6.1 million shares of our Class A common stock at a public offering price of $85.50 per share. After deducting stock issuance costs, including underwriting discounts, commissions and offering expenses, the offering resulted in net proceeds of $496.2 million. The net proceeds from this offering were and are to be used to fund acquisition activity, including the GFL Acquisition and the Twin Bridges Acquisition, to pay certain costs associated with acquisition activities, and to repay borrowings and/or debt securities.

Current wording

On June 16, 2023, we completed a public offering of 6.1 million shares of our Class A common stock at a public offering price of $85.50 per share. After deducting stock issuance costs, including underwriting discounts, commissions and offering expenses, the offering resulted in net proceeds of $496.2 million. The net proceeds from this offering were and are to be used to fund acquisition activity, including the GFL Acquisition and the Twin Bridges Acquisition, to pay certain costs associated with acquisition activities, and to repay borrowings and/or debt securities.

Previous wording

As of December 31, 2023, we are party to the Amended and Restated Credit Agreement, which provides for a $350.0 million aggregate principal amount term loan A facility ("Term Loan Facility"), a $300.0 million Revolving Credit Facility, with a $75.0 million sublimit for letters of credit, and a $430.0 million 2023 Term Loan Facility (collectively, the "Credit Facility"). We have the right to request, at our discretion, an increase in the amount of loans under the Credit Facility by an aggregate amount of $125.0 million, subject to further increase based on the terms and conditions set forth in the Amended and Restated Credit Agreement. The Credit Facility has a 5-year term that matures in December 2026. The Credit Facility shall bear interest, at our election, at Term SOFR, including a secured overnight financing rate adjustment of 10 basis points, or at a base rate, in each case plus or minus any sustainable rate adjustment of up to positive or negative 4.0 basis points per annum, plus an applicable interest rate margin based upon our consolidated net leverage ratio as follows:

Current wording

As of December 31, 2024, we are party to the Credit Agreement, which provides for a $800.0 million aggregate principal amount Term Loan Facility and a $700.0 million Revolving Credit Facility, with a $155.0 million sublimit for letters of credit. We have the right to request, at our discretion, an increase in the amount of loans under the Credit Facility by an aggregate amount of $200.0 million, subject to further increase based on the terms and conditions set forth in the Credit Agreement. The Credit Facility has a 5-year term that matures in September 2029. The Credit Facility shall bear interest, at our election, at term secured overnight financing rate (“Term SOFR”) or at a base rate, in each case plus or minus any sustainable rate adjustment of up to positive or negative 4.0 basis points per annum, plus an applicable interest rate margin based upon our consolidated net leverage ratio as follows:

Previous wording

A commitment fee will be charged on undrawn amounts of our Revolving Credit Facility based upon our consolidated net leverage ratio in the range of 0.20% to 0.40% per annum, plus a sustainability adjustment of up to positive or negative 1.0 basis point per annum. The Amended and Restated Credit Agreement provides that Term SOFR is subject to a zero percent floor. We are also required to pay a fronting fee for each letter of credit of 0.25% per annum. Interest under the Amended and Restated Credit Agreement is subject to increase by 2.00% per annum during the continuance of a payment default and may be subject to increase by 2.00% per annum during the continuance of any other event of default. The Credit Facility is guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries and secured by substantially all of our assets. As of December 31, 2023, further advances were available under the Credit Facility in the amount of $272.3 million. The available amount is net of outstanding irrevocable letters of credit totaling $27.7 million, and as of December 31, 2023 no amount had been drawn.

Current wording

A commitment fee will be charged on undrawn amounts of our Revolving Credit Facility based upon our consolidated net leverage ratio in the range of 0.20% to 0.40% per annum, plus a sustainability adjustment of up to positive or negative 1.0 basis point per annum. The Credit Agreement provides that Term SOFR is subject to a zero percent floor. We are also required to pay a fronting fee for each letter of credit of 0.25% per annum. Interest under the Credit Agreement is subject to increase by 2.00% per annum during the continuance of a payment default and may be subject to increase by 2.00% per annum during the continuance of any other event of default. The Credit Facility is guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries and secured by substantially all of our assets. As of December 31, 2024, further advances were available under the Credit Facility in the amount of $675.4 million. The available amount is net of outstanding irrevocable letters of credit totaling $24.6 million, and as of December 31, 2024 no amount had been drawn.

Previous wording

The Amended and Restated Credit Agreement requires us to maintain a minimum interest coverage ratio and a maximum consolidated net leverage ratio, to be measured at the end of each fiscal quarter. As of December 31, 2023, we were in compliance with all financial covenants contained in the Amended and Restated Credit Agreement as follows (in millions):

Current wording

The Credit Agreement requires us to maintain a minimum interest coverage ratio and a maximum consolidated net leverage ratio, to be measured at the end of each fiscal quarter. As of December 31, 2024, we were in compliance with all financial covenants contained in the Credit Agreement as follows (in millions):