CASELLA WASTE SYSTEMS INC

Previous wording

Discussion and analysis of our financial condition and results of operations for the fiscal year ended December 31, 2023 (“fiscal year 2023”) compared to our financial condition and results of operations for the fiscal year ended December 31, 2022 is included under the heading Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission on February 16, 2024.

Current wording

Discussion and analysis of our financial condition and results of operations for the fiscal year ended December 31, 2024 (“fiscal year 2024”) compared to our financial condition and results of operations for the fiscal year ended December 31, 2023 (“fiscal year 2023”), is included under the heading Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission on February 18, 2025.

Previous 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.

Current wording

We provide integrated solid waste services with operating locations in eleven states: Vermont, New Hampshire, New York, Massachusetts, Connecticut, Maine, Pennsylvania, Delaware, New Jersey, Maryland and West Virginia, 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

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.

Current wording

As of January 31, 2026, we owned and/or operated 86 solid waste collection operations, 72 transfer stations, 32 recycling and processing facilities, eight Subtitle D landfills, two landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition materials.

Previous wording

In the fiscal year ended December 31, 2024 (“fiscal year 2024”), we acquired eight businesses: four of which are in our Mid-Atlantic region, including the purchase of all the equity interests of Whitetail Disposal, Inc. and the assets of LMR Disposal, LLC, which together include collection operations in eastern Pennsylvania and western New Jersey; two of which are in our Western region, including the purchase of all equity interests of Royal Carting and Welsh Sanitation and related real estate assets, which consist of collection and transfer operations in the middle and lower Hudson Valley regions of New York as well as western Connecticut; and two of which are tuck-in operations in our Eastern region. Our total consideration for acquisitions completed in fiscal year 2024 was $467.9 million, including $469.2 in cash, $1.7 million in holdbacks and additional consideration owed, partially offset by $(3.0) million of open working capital settlements due from sellers.

Current wording

In fiscal year 2024, we acquired eight businesses: four of which are in our Mid-Atlantic region, including the purchase of all the equity interests of Whitetail Disposal, Inc. and the assets of LMR Disposal, LLC, which together include collection operations in eastern Pennsylvania and western New Jersey; two of which are in our Western region, including the purchase of all equity interests of Royal Carting and Welsh Sanitation and related real estate assets, which consist of collection and transfer operations in the middle and lower Hudson Valley regions of New York as well as western Connecticut; and two of which are tuck-in operations in our Eastern region. Total consideration for acquisitions completed in fiscal year 2024 was $467.9 million, including $469.2 million in cash, $1.7 million in holdbacks, contingent consideration and other amounts owed, partially offset by $(3.0) million of open working capital settlements due from sellers.

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. 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.

Current wording

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, electricity capacity and renewable energy credits, along with the rights to, generation and sale of renewable natural gas and related tax credits at certain of our landfill facilities. 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. Revenues associated with our Resource Solutions operations 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. 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

•Volume decreased solid waste revenues due to (i) $(10.6) million, or (4.3)% as a percentage of disposal revenues, from lower disposal volumes, driven by lower landfill volumes and to a lesser extent transportation volumes, partially offset by higher transfer station volumes, (ii) $(6.5) million, or (0.9)% as a percentage of collection revenues from lower collection volumes, and (iii) $(0.1) million, or (1.5)% as a percentage of processing revenues, from lower processing volumes;

Current wording

•Volume decreased solid waste revenues, driven by lower collection volumes of $(7.5) million, or (0.8)% as a percentage of collection revenues, and lower disposal volumes of $(3.6) million, or (1.5)% as a percentage of disposal revenues, related to lower transfer station and transportation volumes; and

Previous 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.

Current wording

•Acquisitions increased solid waste revenues due to the partial year impact of the acquisition of nine businesses in fiscal year 2025, as well as the rollover impact of eight acquisitions completed in fiscal year 2024.

Previous wording

A summary of our cost of operations, general and administration and depreciation and amortization expenses is as follows (dollars in millions and as a percentage of total revenues):

Current wording

A summary of our cost of operations, general and administration and depreciation and amortization expenses (dollars in millions and as a percentage of total revenues) is as follows:

Previous wording

•Direct costs increased in aggregate dollars primarily due to (i) acquisitions and (ii) higher third-party disposal rates reflecting cost inflation; partially offset by the impact on hauling and transportation costs related to municipal biosolid volumes in our National Accounts business.

Current wording

•Direct costs increased in aggregate dollars primarily due to acquisitions and higher third-party disposal rates.

Previous 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.

Current wording

•Direct labor costs increased primarily due to acquisitions and higher wage and benefit rates.

Previous 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.

Current wording

•Fuel costs increased in aggregate dollars due to acquisitions, partially offset by slightly lower average 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 cost inflation, 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, and (iii) increased costs of repairs performed by third parties.

Previous 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):

Current wording

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

Previous wording

General and administration expense increased in aggregate dollars in fiscal year 2024 primarily due to (i) acquisition activity, including increased labor costs, professional fees and other costs to support our growth and acquisition strategy, (ii) increased costs related to salaries, wages, benefits and incentive compensation, (iii) legal expenses primarily associated with employee separation, (iv) higher accruals related to insurance claims, and (vi) general cost inflation.

Current wording

General and administration expense increased in aggregate dollars in fiscal year 2025 primarily due to (i) acquisition activity, including increased labor costs, (ii) escalation of salary, wage, and benefit costs, (iii) higher accruals related to incentive compensation, and (iv) higher costs associated with information technology; partially offset by a decreased provision for expected credit losses in our Mid-Atlantic region related to improved expected collection of our accounts receivable and lower legal expense associated with employee separation.

Previous 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.

Current wording

Depreciation and amortization expense increased in fiscal year 2025 primarily due to (i) acquisitions, including the impact of amortization of acquired intangibles, (ii) investment in property and equipment in our existing operations, and (iii) higher landfill amortization expense related to higher landfill volumes in our Western and Mid-Atlantic regions, and changes in cost and other assumptions.

Previous 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.

Current wording

In fiscal years 2025 and 2024, we recognized expenses of $24.2 million and $24.9 million, respectively, comprised primarily of legal, consulting, rebranding, information technology 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 our acquisition of the equity interests of four wholly-owned subsidiaries of GFL Environmental Inc. ( “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 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:

Current 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 the Southbridge Landfill reached its final capacity.

Previous wording

(2)Includes a non-cash charge in fiscal year 2024 associated with our receipt of a final closure permit (the “Closure Permit”) from the Massachusetts Department of Environmental Protection related to the Southbridge Landfill. Pursuant to the terms of the Closure Permit, we are required to meet certain general permit conditions and certain specific permit conditions (collectively, the “Conditions”), including environmental monitoring, third-party inspections, inspection of the final cover, leachate sampling, post-closure monitoring, and other post-closure requirements. We have revised the accrued post-closure liability for the Southbridge Landfill to reflect the estimated cost of satisfying the expanded Conditions as currently specified in the Closure Permit. See Note 10, Final Capping, Closure and Post-Closure Costs, 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 our landfill final capping, closure and post-closure costs.

Current wording

In fiscal year 2024, we recorded a non-cash charge of $8.4 million, which is associated with our receipt of a final closure permit (the “Closure Permit”) from the Massachusetts Department of Environmental Protection related to the Southbridge Landfill. Pursuant to the terms of the Closure Permit, we are required to meet certain general permit conditions and certain specific permit conditions (collectively, the “Conditions”), including environmental monitoring, third-party inspections, inspection of the final cover, leachate sampling, post-closure monitoring, and other post-closure requirements. We revised the accrued post-closure liability for the Southbridge Landfill to reflect the estimated cost of satisfying the expanded Conditions as currently specified in the Closure Permit. See Note 10, Final Capping, Closure and Post-Closure Costs, 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 our landfill final capping, closure and post-closure costs.

Previous 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.

Current wording

In fiscal year 2024, we recorded a recovery of $(1.7) million associated with a veneer failure that occurred in fiscal year 2023 at a Subtitle D landfill we operate located in Seneca, New York, consisting of both (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. See Note 10, Final Capping, Closure and Post-Closure Costs, to our consolidated financial statements included under Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for disclosure over our remaining estimated costs associated with obligations for final capping, closure and post-closure of our landfills.

Previous 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.

Current wording

Our provision for income taxes was $5.2 million in fiscal year 2025 and $7.5 million in fiscal year 2024. For fiscal year 2025, the provision for income taxes includes $2.4 million of current income taxes and $2.8 million of deferred income taxes. The provision for income taxes in fiscal year 2024 included $0.6 million of current income taxes and $6.9 million of deferred income taxes. The effective rate for the fiscal year 2025 was 39.7% and was computed based on the statutory rate of 21% adjusted primarily for state taxes, non-deductible officer compensation and an increase in the effective state rate due to tax attributes in certain states requiring a valuation allowance, partially offset by tax deductible equity compensation in excess of book expense. This effective rate was greater than the 35.7% effective rate for the fiscal year 2024, primarily due to differences in the valuation allowance of attributes, state income taxes and other discrete items.

Previous wording

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted. The TCJA significantly changed U.S. corporate income tax laws by, among other things, changing carryforward rules for net operating losses. Under the Internal Revenue Code, as amended by the TCJA, federal net operating loss carryforwards generated before the 2018 tax year continue to be carried forward for 20 years and are able to fully offset taxable income (“pre-2018 net operating losses”). Federal net operating losses generated following the 2017 tax year are carried forward indefinitely, but generally may only offset up to 80% of taxable income earned in a tax year (“post-2017 net operating losses”).

Current wording

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted. The TCJ Act significantly changed U.S. corporate income tax laws by, among other things, changing carryforward rules for net operating losses. Depending on bonus depreciation and other elections made on our 2025 federal tax return when filed, we project federal net operating losses generated of $123 million after 2017 and $1 million before 2017, totaling $124 million, to be carried forward to 2026. These will be carried forward indefinitely but generally the amount generated after 2017 may only offset up to 80% of taxable income earned in a tax year.

Previous wording

Revenues increased in fiscal year 2024 as compared to the prior year, primarily driven by (i) the contribution from acquisitions, (ii) favorable collection pricing of $18.8 million, or 7.0% as a percentage of collection revenues, (iii) higher disposal volume of $5.1 million, or 5.2% as a percentage of disposal revenues, (iv) favorable disposal pricing of $3.4 million, or 3.4% as a percentage of disposal revenues, (v) higher commodity price and volume revenues primarily associated with energy volumes, and (vi) higher collection volume of $0.2 million, or 0.1% as a percentage of collection revenues; partially offset by (a) lower surcharge and other fees revenues due to lower E&E Fee revenues associated with our fuel cost recovery program related to lower diesel fuel prices and lower SRA Fee revenues due to higher recycled commodity prices as compared to the prior year period, and (b) lower processing volume of $(0.3) million, or (3.0)% as a percentage of processing operations.

Current wording

Revenues increased in fiscal year 2025 as compared to the prior year, primarily driven by (i) the contribution from acquisitions, (ii) higher collection pricing of $23.9 million, or 5.7% as a percentage of collection revenues, (iii) higher disposal pricing of $7.8 million, or 5.9% as a percentage of disposal revenues, and (iv) higher disposal volume of $0.2 million, or 0.1% as a percentage of disposal revenues, related to higher transfer station volumes, counteracted by lower landfill and transportation volumes; partially offset by lower collection volume of $(3.9) million, or (0.9)% as a percentage of collection operations.

Previous 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”.

Current wording

See further discussion about the expense from acquisition activities and the landfill capping (recovery) charge - veneer failure above in “Operating Expenses”.

Previous wording

The operating loss of $(18.0) million in fiscal year 2024 was impacted by (i) $50.6 million of depreciation and amortization expense, including that of acquired assets, new investment in property and equipment and accelerated amortization schedules of certain acquired intangibles, as well as (ii) $14.8 million of expense from acquisition activities, comprised primarily of integration costs, including rebranding efforts and 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.

Current wording

The operating loss increased by $(0.8) million in fiscal year 2025 as compared to the prior year. The year-over-year increase was due to (i) higher costs associated with operating and supporting acquired businesses, including the impact of amortization of acquired intangibles, (ii) increased depreciation expense due to acquisitions and investment in property and equipment, (iii) higher short-term equipment rental costs related to growth and the timing of the delivery of fleet vehicles, (iv) higher landfill amortization expense primarily due to higher landfill volumes, (v) higher expense related to insurance claims, and (vi) general cost inflation, including for disposal, labor, and maintenance costs; partially offset by (a) revenue growth, described above, (b) higher contributions related to intercompany subcontracting with our National Accounts business, (c) a decreased provision for expected credit losses related to improved expected collection of our accounts receivable, and (d) lower expense from acquisition activities, partly due to fiscal year 2024 including 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.

Previous 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”.

Current wording

See further discussion about the expense from acquisition activities above in “Operating Expenses”.

Previous wording

Revenues increased in fiscal year 2024 as compared to the prior year, primarily driven by (i) the favorable impact of higher recycled commodity pricing on processing revenues of $20.9 million, or 24.5% as a percentage of related revenues, (ii) higher National Accounts business volumes related to new business growth of $8.0 million, or 4.3% as a percentage of National Accounts revenues, (iii) the contribution from acquisitions, (iv) higher recycling volumes of $6.6 million, or 7.8% as a percentage of related revenues, (v) National Accounts business pricing growth of $5.6 million, or 3.0% as a percentage of National Accounts revenues, (vi) higher other processing price of $1.3 million, or 6.2% as a percentage of related revenues, and (vii) higher other processing volumes of $0.2 million, or 0.8% as a percentage of related revenues; partially offset by (a) lower tipping fees primarily related to contract structures that work to offset recycled commodity price movements of $(12.1) million, or (14.2)% as a percentage of related revenues, and (b) lower surcharges and other fees revenues in our National Accounts business due to lower E&E Fee revenues associated with our fuel cost recovery program related to lower diesel fuel prices.

Current wording

Resource Solutions revenues increased in fiscal year 2025 as compared to the prior year, primarily driven by (i) higher tipping fees of $14.2 million, or 13.1% as a percentage of related revenues, primarily related to contract structures that work to offset recycled commodity price movements, (ii) higher National Accounts business volumes related to new business growth of $13.2 million, or 6.6% as a percentage of National Accounts revenues, (iii) National Accounts business pricing growth of $8.7 million, or 4.4% as a percentage of National Accounts revenues, (iv) higher recycling volumes of $8.6 million, or 8.0% as a percentage of related revenues, (v) the internal transfer of customers and associated revenues previously managed under the Mid-Atlantic operating segment to the Resource Solutions operating segment, (vi) the contribution from acquisitions and (vii) higher other processing price of $0.6 million, or 2.8% as a percentage of related revenues; partially offset by (a) lower recycled commodity price of $(20.4) million, or (18.9)% as a percentage of related revenues, (b) lower other processing revenues associated with an organic residuals composting facility in Maine that ceased operations in fiscal year 2025, and (c) lower other processing volumes of $(0.9) million, or (3.9)% as a percentage of related revenues.

Previous wording

Corporate Entities operating loss reflects costs, including legal, tax, information technology, human resources, certain finance and accounting and other administrative functions, depreciation and amortization expense and certain expense from acquisition activities, which are not allocated to our reportable operating segments. Operating loss increased in fiscal year 2024 by $(24.6) million from the prior year due primarily to (i) higher costs associated with supporting acquired businesses and (ii) general cost inflation for salaries, wages, benefits, incentive compensation, professional services and other overhead costs including those associated with marketing, sales and community relations efforts. See further discussion about the expense from acquisition activities above in “Operating Expenses”.

Current wording

Operating loss increased in fiscal year 2025 by $(28.5) million from the prior year due primarily to (i) higher costs associated with supporting acquired businesses, (ii) general cost inflation for salaries, wages, benefits and other overhead costs including those associated with information technology, marketing, sales and community relations efforts, (iii) higher accruals related to incentive compensation, (iv) higher depreciation expense associated with back office financial system infrastructure and (v) higher expense from acquisition activities; partially offset by lower legal expense associated with employee separation. See further discussion about the expense from acquisition activities above in “Operating Expenses”.

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, 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.

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, 2025, we had $673.4 million of undrawn capacity under our $700.0 million revolving credit facility (“Revolving Credit Facility”) and $123.8 million of cash and cash equivalents to help meet our short-term and long-term liquidity needs, as well as $93.1 million of restricted cash to be used for the Mountain State Waste Acquisition. We expect existing cash, cash equivalents and restricted cash non-current, 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, 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.

Current wording

Current assets, excluding cash, cash equivalents and restricted cash, increased $15.5 million, and current liabilities, excluding current maturities of debt, increased $3.5 million in fiscal year 2025, resulting in a $12.0 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 $(34.7) million as of December 31, 2024 to $(22.7) million as of December 31, 2025.

Previous wording

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

Current wording

Cash, cash equivalents and restricted cash, including non-current, decreased $(166.4) million in fiscal year 2025. A summary of cash flows (in millions) follows:

Previous 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.

Current wording

Net cash provided by operating activities increased $48.4 million in fiscal year 2025 as compared to fiscal year 2024. This was the result of business growth, including from acquisition activity; partially offset by 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 2025 as compared to fiscal year 2024, 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 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.

Current wording

Acquisitions, net of cash acquired. In fiscal year 2025, we acquired nine businesses, which included $(223.4) million of cash consideration, and made $(0.8) million in payments on businesses previously acquired, as compared to fiscal year 2024 during which we acquired eight businesses, which included $(469.2) million of cash consideration, and received $0.6 million, net in cash after working capital settlements, holdbacks and other consideration owed payments.

Previous 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.

Current wording

Capital expenditures. Capital expenditures were $(41.8) million higher in fiscal year 2025 as compared to fiscal year 2024 primarily due to acquisition activity and increased investment in our fleet and facilities; partially offset by lower landfill development spend.

Previous 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.

Current wording

Payments of debt issuance costs. We paid $(2.2) million of debt issuance costs in fiscal year 2025 related to financing activities associated with our industrial revenue bonds as compared to $(6.6) million of debt issuance costs in fiscal year 2024 primarily related to refinancing activities associated with entering into the Credit Agreement.

Previous wording

Payment of debt modification costs. We paid $1.4 million of agent fees and other third-party costs in fiscal year 2024 associated with the refinancing of our Credit Agreement.

Current wording

Payment of debt modification costs. We paid $(1.4) million of agent fees and other third-party costs in fiscal year 2024 associated with refinancing the Credit Agreement.

Previous wording

Proceeds from the public offering of Class A Common Stock. In September 2024, we completed a public offering of 5.2 million shares of our Class A common stock at a public offering price of $100.00 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 used to repay borrowings under our Revolving Credit Facility and are further available to fund acquisition activity and for general corporate purposes.

Current wording

Proceeds from the public offering of Class A Common Stock. In fiscal year 2024, we completed a public offering of 5.2 million shares of our Class A common stock at a public offering price of $100.00 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 used to repay borrowings under our Revolving Credit Facility, to fund acquisition activity and for general corporate purposes.

Previous 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:

Current wording

As of December 31, 2025, we are party to the Credit Agreement, which provides for a $800.0 million aggregate principal amount term loan A facility and a $700.0 million Revolving Credit Facility, with a $155.0 million sublimit for letters of credit (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 $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 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.

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 0.200% to 0.400% 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 0.250% per annum. Interest under the Credit Agreement is subject to increase by 2.000% per annum during the continuance of a payment default and may be subject to increase by 2.000% 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, 2025, further advances were available under the Credit Facility in the amount of $673.4 million. The available amount is net of outstanding irrevocable letters of credit totaling $26.6 million, and as of December 31, 2025, no amount had been drawn.

Previous wording

(1)The maximum consolidated net leverage ratio is calculated as consolidated funded debt, net of up to $100.0 million of unencumbered cash and cash equivalents (calculated at $1,048.2 million as of December 31, 2024, or $1,148.2 million of consolidated funded debt less $100.0 million total of unencumbered cash and cash equivalents), divided by consolidated EBITDA. Consolidated EBITDA is based on operating results for the twelve months preceding the measurement date of December 31, 2024. Consolidated funded debt, net and consolidated EBITDA as defined by the Credit Agreement (“Consolidated EBITDA”) are non-GAAP financial measures that should not be considered an alternative to any measure of financial performance calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). A reconciliation of net cash provided by operating activities to Consolidated EBITDA is as follows (in millions):

Current wording

(1)The maximum consolidated net leverage ratio is calculated as consolidated funded debt, net of up to $100.0 million of unencumbered cash and cash equivalents (calculated at $1,068.6 million as of December 31, 2025, or $1,168.6 million of consolidated funded debt less $100.0 million total of unencumbered cash and cash equivalents), divided by consolidated EBITDA. Consolidated EBITDA is based on operating results for the twelve months preceding the measurement date of December 31, 2025. Consolidated funded debt, net and consolidated EBITDA as defined by the Credit Agreement (“Consolidated EBITDA”) are non-GAAP financial measures that should not be considered an alternative to any measure of financial performance calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). A reconciliation of net cash provided by operating activities to Consolidated EBITDA is as follows (in millions):

Previous wording

Based on the seasonality of our business, operating results in the late fall, winter and early spring months are generally lower than the remainder of our fiscal year. Given the cash flow impact that this seasonality, the capital intensive nature of our business and the timing of debt payments has on our business, we typically incur higher debt borrowings in order to meet our liquidity needs during these times. Consequently, our availability and performance against our financial covenants may tighten during these times as well.

Current wording

Based on the seasonality of our business, operating results in the late fall, winter and early spring months are generally lower than the remainder of our fiscal year. Given the cash flow impact that this seasonality, the capital intensive nature of our business and the timing of debt payments has on our business, we could incur higher debt borrowings in order to meet our liquidity needs during these times. Consequently, our availability and performance against our financial covenants may tighten during these times as well.