Casella Waste Systems Inc.

11/09/2026 | Press release | Distributed by Public on 11/09/2026 15:47

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included under Item 1. "Financial Statements". In addition, reference should be made to our audited consolidated financial statements and notes thereto and related "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("fiscal year 2025") filed with the Securities and Exchange Commission on February 20, 2026 ("2025 Form 10-K").
This Quarterly Report on Form 10-Q and, in particular, this "Management's Discussion and Analysis of Financial Condition and Results of Operations", may contain or incorporate a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding:
•our ability to consummate business acquisitions or divestitures, integrate acquired businesses and operations and achieve the expected benefits, including the expected annualized revenues from such acquired businesses and operations;
•our ability to achieve the key strategies of our long-term strategic plan;
•the projected development of additional disposal capacity or expectations regarding permits for existing capacity;
•the outcome of any legal or regulatory matter;
•expected liquidity and financing plans;
•expected future revenues, operations, expenditures and cash needs;
•whether our pricing programs and operational initiatives will outpace higher operating and construction costs from inflation and regulatory changes;
•severe weather conditions, which could impair our financial results by causing increased costs, loss of revenue, reduced operational efficiency or disruptions to our operations;
•projected future obligations related to final capping, closure and post-closure costs of our existing landfills and any disposal facilities which we may own or operate in the future;
•our ability to use our net operating losses and tax positions;
•our ability to service our debt obligations;
•the recoverability or impairment of any of our assets or goodwill;
•estimates of the potential markets for our products and services, including the anticipated drivers for future growth;
•sales and marketing plans or price and volume assumptions;
•projected improvements to our infrastructure and the impact of such improvements on our business and operations; and
•general economic factors, such as ongoing or potential geopolitical conflict, pandemics, recessions, or similar national or global events, and general macroeconomic conditions, including, among other things, consumer confidence, global supply chain disruptions, inflation, labor supply, fuel prices, tariffs, fluctuations in recycling commodity pricing, interest rates and access to capital markets, that generally are not within our control, and our exposure to credit and counterparty risk.
In addition, any statements contained in or incorporated by reference into this report that are not statements of historical fact should be considered forward-looking statements. You can identify these forward-looking statements by the use of the words "believes", "expects", "anticipates", "plans", "may", "will", "would", "intends", "estimates", "projects" and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate, as well as management's beliefs and assumptions, and should be read in conjunction with our consolidated financial statements and notes thereto. These forward-looking statements are not guarantees of future performance, circumstances or events. The occurrence of the events described and the achievement of the expected results depends on many events, some or all of which are not predictable or within our control. Actual results may differ materially from those set forth in the forward-looking statements.
There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by such forward-looking statements. These risks and uncertainties include, without limitation, those detailed in Item 1A. "Risk Factors" in our 2025 Form 10-K and those included under Part II, Item 1A of this Quarterly Report on From 10-Q.
There may be additional risks that we are not presently aware of or that we currently believe are immaterial, which could have an adverse impact on our business. We explicitly disclaim any obligation to update any forward-looking statements whether as the result of new information, future events or otherwise, except as otherwise required by law.
Company Overview
Casella Waste Systems, Inc., a Delaware corporation, and its wholly-owned subsidiaries (collectively, "we", "us" or "our"), is a regional, vertically integrated solid waste services company. We provide resource management expertise and services to residential, commercial, municipal, institutional and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services.
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.
As of October 15, 2026, we owned and/or operated 89 solid waste collection operations, 76 transfer stations, 35 recycling facilities, eight Subtitle D landfills, two landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition ("C&D") materials. We also housed two landfill gas-to-energy and five renewable natural gas ("RNG") facilities, which are owned and operated by third parties, at landfills we owned and/or operated.
Results of Operations
Revenues
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 services related to (i) collection (ii) disposal, which includes landfill and transfer station services, (iii) transportation, (iv) landfill gas-to-energy and (v) processing 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 RNG 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, and organic material related brokerage services and 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.
The table below shows revenues attributable to services provided (dollars in millions and as a percentage of total revenues) for the following periods:
Three Months Ended September 30, $
Change 		Nine Months Ended September 30, $
Change
2026 2025 2026 2025
Collection $ 361.7 64.7 % $ 314.0 64.7 % $ 47.7 $ 1,026.3 65.8 % $ 888.4 65.0 % $ 137.9
Disposal (1)
83.1 14.9 % 67.5 13.9 % 15.6 209.7 13.4 % 181.4 13.3 % 28.3
Transportation (1)
5.9 1.1 % 6.0 1.2 % (0.1) 16.4 1.1 % 17.3 1.2 % (0.9)
Landfill gas-to-energy 1.7 0.3 % 1.5 0.3 % 0.2 6.1 0.4 % 5.9 0.4 % 0.2
Processing 2.9 0.4 % 3.2 0.7 % (0.3) 7.6 0.4 % 7.7 0.6 % (0.1)
Solid waste operations 455.3 81.4 % 392.2 80.8 % 63.1 1,266.1 81.1 % 1,100.7 80.5 % 165.4
Processing (2)
51.4 9.2 % 48.2 9.9 % 3.2 147.5 9.5 % 142.9 10.4 % 4.6
National Accounts (2)
52.5 9.4 % 45.0 9.3 % 7.5 146.7 9.4 % 124.2 9.1 % 22.5
Resource Solutions operations 103.9 18.6 % 93.2 19.2 % 10.7 294.2 18.9 % 267.1 19.5 % 27.1
Total revenues $ 559.2 100.0 % $ 485.4 100.0 % $ 73.8 $ 1,560.3 100.0 % $ 1,367.8 100.0 % $ 192.5
(1)In the nine months ended September 30, 2026, we revised the presentation of our service lines to remove the transportation service line from the disposal caption and present it separately. Disposal now consists of the landfill and transfer station service lines. Amounts disclosed for the three and nine months ended September 30, 2025 have been updated to conform to the current period presentation.
(2)In the nine months ended September 30, 2026, we realigned a business unit related to organic materials brokerage operations within our Resource Solutions operating segment from the National Accounts service line to the processing service line. Amounts disclosed for the three and nine months ended September 30, 2025 have been updated to conform to the current period presentation.
Solid waste revenues
A summary of the period-to-period changes in solid waste revenues (dollars in millions and as percentage growth of solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended September 30, 2026 vs. 2025 Period-to-Period Change for the Nine Months Ended September 30, 2026 vs. 2025
Amount % Growth Amount % Growth
Price $ 21.6 5.5 % $ 59.1 5.4 %
Volume
(4.1) (1.0) % (14.8) (1.3) %
Intercompany transfers to National Accounts (2.1) (0.5) % (5.1) (0.5) %
Surcharges and other fees 9.6 2.4 % 23.2 2.1 %
Commodity price and volume 0.3 0.1 % 0.2 - %
Acquisitions 37.8 9.6 % 102.8 9.3 %
Solid waste revenues $ 63.1 16.1 % $ 165.4 15.0 %
The most significant items impacting the changes in our solid waste revenues during the three and nine months ended September 30, 2026 as compared to the prior year periods are summarized below:
•Price increased solid waste revenues both quarterly and year-to-date, including higher collection pricing of $18.4 million quarterly, or 5.9% as a percentage of collection revenues, and $50.4 million year-to-date, or 5.7% as a percentage of collection revenues, and higher disposal pricing of $3.3 million quarterly, or 4.8% as a percentage of disposal revenues, and $8.6 million year-to-date, or 4.8% as a percentage of disposal revenues.
•Volume decreased solid waste revenues both quarterly and year-to-date, driven by lower collection volumes of $(6.5) million quarterly, or (2.1)% as a percentage of collection revenues, and $(16.5) million year-to-date, or (1.9)% as a percentage of collection revenues, and lower other volumes of $(0.6) million quarterly, or (6.0)% as a percentage of other revenues, and $(1.9) million year-to-date, or (6.3)% as a percentage of other revenues, primarily related to transportation volumes; partially offset by higher disposal volumes of $3.1 million quarterly, or 4.6% as a percentage
of disposal revenues, and $3.7 million year-to-date, or 2.0% as a percentage of disposal revenues, driven by higher landfill volumes, partially offset by lower transfer station volumes.
•Surcharges and other fees increased solid waste revenues both quarterly and year-to-date primarily due to our energy and environmental fee ("E&E Fee(s)") and sustainability recycling adjustment fee ("SRA Fee(s)") revenues, related to higher participation levels in our fee programs, higher E&E Fee revenues associated with our fuel cost recovery program due to higher diesel fuel prices and higher SRA Fee revenues due to lower recycled commodity prices year-to-date.
•Acquisitions increased solid waste revenues both quarterly and year-to-date due to the partial year impact of our acquisition of six businesses in the nine months ended September 30, 2026, and the rollover impact of acquisitions completed in fiscal year 2025, due to the timing of when the acquisitions were completed.
Resource Solutions revenues
See "Segment Reporting" below for discussion over the period-to-period changes in Resource Solutions revenues.
Operating Expenses
A summary of cost of operations, general and administration expense, and depreciation and amortization expense is as follows (dollars in millions and as a percentage of total revenues):
Three Months Ended September 30, $
Change 		Nine Months Ended September 30, $
Change
2026 2025 2026 2025
Cost of operations $ 374.6 67.0 % $ 315.3 65.0 % $ 59.3 $ 1,048.5 67.2 % $ 903.8 66.1 % $ 144.7
General and administration $ 58.9 10.5 % $ 57.3 11.8 % $ 1.6 $ 180.2 11.5 % $ 168.3 12.3 % $ 11.9
Depreciation and amortization $ 88.1 15.7 % $ 78.8 16.2 % $ 9.3 $ 254.5 16.3 % $ 227.3 16.6 % $ 27.2
Cost of Operations
Cost of operations includes: (i) direct costs, which consist of the costs of purchased materials and third-party transportation and disposal costs, including third-party tipping fees; (ii) direct labor costs, which include salaries, wages, incentive compensation and related benefit costs such as health and welfare benefits and workers compensation; (iii) direct operational costs, which include landfill operating costs such as accretion expense related to final capping, closure and post-closure obligations, leachate treatment and disposal costs and depletion of landfill operating lease obligations, vehicle insurance costs, host community fees and royalties; (iv) fuel costs used by our vehicles and in conducting our operations; (v) maintenance and repair costs relating to our vehicles, equipment and containers; and (vi) other operational costs including facility costs.
A summary of the major components of our cost of operations is as follows (dollars in millions and as a percentage of total revenues):
Three Months Ended September 30, $
Change 		Nine Months Ended September 30, $
Change
2026 2025 2026 2025
Direct costs $ 135.2 24.2 % $ 113.0 23.3 % $ 22.2 $ 365.0 23.4 % $ 314.6 23.0 % $ 50.4
Direct labor costs 87.1 15.6 % 76.9 15.8 % 10.2 252.1 16.2 % 218.5 16.0 % 33.6
Direct operational costs 35.4 6.3 % 29.9 6.2 % 5.5 100.6 6.4 % 92.0 6.7 % 8.6
Fuel costs 27.3 4.9 % 17.2 3.6 % 10.1 71.9 4.6 % 48.3 3.5 % 23.6
Maintenance and repair costs 48.4 8.6 % 42.4 8.7 % 6.0 136.5 8.8 % 123.5 9.1 % 13.0
Other operational costs 41.2 7.4 % 35.9 7.4 % 5.3 122.4 7.8 % 106.9 7.8 % 15.5
Total cost of operations
$ 374.6 67.0 % $ 315.3 65.0 % $ 59.3 $ 1,048.5 67.2 % $ 903.8 66.1 % $ 144.7
These cost categories may change from time to time and may not be comparable to similarly titled categories presented by other companies.
The most significant items impacting the changes in our cost of operations during the three and nine months ended September 30, 2026, as compared to the prior year periods, are summarized below:
•Direct costs increased primarily due to acquisitions and higher third-party disposal rates.
•Direct labor costs increased in aggregate dollars while being mostly flat as a percentage of revenues primarily due to acquisitions and higher wage and benefit rates.
•Direct operational costs increased in aggregate dollars while being mostly flat as a percentage of revenues primarily due to (i) acquisitions, (ii) higher expenses related to insurance claims, (iii) higher landfill operating lease amortization related to changes in remaining airspace capacity estimates combined with higher landfill tonnages in our Western region year-to-date, (iv) higher accretion expense associated with changes in the timing and cost estimates of our capping, closure and post-closure obligations, (v) higher leachate disposal costs, primarily in our Western region and (vi) general cost inflation; partially offset by (a) lower short term rental expenses, (b) the ceasing of operations in the three months ended December 31, 2025 of an organic residuals composting facility in Maine resulting in lower direct operational costs and (c) the prior year-to-date period including legal penalties associated with leachate management at a landfill we own in our Eastern region. See Note 8, Commitments and Contingencies and Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the legal penalties and the organics facility ceasing operations, respectively.
•Fuel costs increased due to acquisitions and higher average diesel fuel prices. See Item 3. "Quantitative and Qualitative Disclosures about Market Risk" of this Quarterly Report on Form 10-Q for additional information regarding our fuel costs.
•Maintenance and repair costs increased in aggregate dollars and decreased as a percentage of revenues due to acquisitions and general cost inflation driving higher personnel, parts and third party repair and labor related costs; partially offset by lower expenses for short term rentals.
•Other operational costs increased in aggregate dollars while being flat as a percentage of revenues due to (i) acquisitions, (ii) higher spending associated with supporting business growth, including personnel and facility related costs, and (iii) general cost inflation; partially offset by lower short term rental costs.
General and Administration
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.
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:
Three Months Ended September 30, $
Change 		Nine Months Ended September 30, $
Change
2026 2025 2026 2025
Labor costs $ 34.8 6.2 % $ 38.5 7.9 % $ (3.7) $ 115.5 7.4 % $ 113.0 8.3 % $ 2.5
Professional service fees
4.4 0.8 % 3.0 0.6 % 1.4 10.3 0.7 % 9.8 0.7 % 0.5
Provision for expected credit losses 1.6 0.3 % 0.1 - % 1.5 3.6 0.2 % 0.4 - % 3.2
Other 18.1 3.2 % 15.7 3.3 % 2.4 50.8 3.2 % 45.1 3.3 % 5.7
Total general and administration expense
$ 58.9 10.5 % $ 57.3 11.8 % $ 1.6 $ 180.2 11.5 % $ 168.3 12.3 % $ 11.9
These cost categories may change from time to time and may not be comparable to similarly titled categories presented by other companies.
General and administration expense in the three and nine months ended September 30, 2026 increased in aggregate dollars while decreasing as a percentage of revenues, as compared to the prior year periods, primarily due to the impact from (i) increased labor and other costs to support our growth and acquisition strategy, (ii) escalation of salary, wage, and benefit costs, (iii) a higher provision for expected credit losses attributable to revenue growth, combined with a lower provision for expected credit losses in the prior year periods due to favorable shifts in receivables aging and (iv) higher expense for consulting services; partially offset by lower accruals related to incentive compensation and lower expenses related to third-party professional services for legal and accounting services.
Depreciation and Amortization
Depreciation and amortization expense includes: (i) depreciation of property and equipment (including assets recorded for finance leases) on a straight-line basis over the estimated useful lives of the assets; (ii) amortization of landfill costs (including those costs incurred and all estimated future costs for landfill development and construction, along with asset retirement costs arising from closure and post-closure obligations) on a units-of-consumption method as landfill airspace is consumed over the total estimated remaining capacity of a site, which includes both permitted capacity and unpermitted expansion capacity that meets certain criteria for amortization purposes, and amortization of landfill asset retirement costs arising from final capping obligations on a units-of-consumption method as airspace is consumed over the estimated capacity associated with each final capping event; and (iii) amortization of intangible assets with a definite life, based on the economic benefit provided, or using the sum of years digits or straight-line methods over the definitive terms of the related agreements.
A summary of the components of depreciation and amortization expense (dollars in millions and as a percentage of total revenues) is as follows:
Three Months Ended September 30, $
Change 		Nine Months Ended September 30, $
Change
2026 2025 2026 2025
Depreciation expense $ 47.7 8.5 % $ 42.7 8.8 % $ 5.0 $ 142.3 9.1 % $ 124.6 9.1 % $ 17.7
Landfill amortization expense 19.1 3.4 % 17.2 3.5 % 1.9 50.6 3.2 % 45.1 3.3 % 5.5
Amortization of intangibles
21.3 3.8 % 18.9 3.9 % 2.4 61.6 4.0 % 57.6 4.2 % 4.0
Total depreciation and amortization expense $ 88.1 15.7 % $ 78.8 16.2 % $ 9.3 $ 254.5 16.3 % $ 227.3 16.6 % $ 27.2
Depreciation and amortization expense in the three and nine months ended September 30, 2026 increased in aggregate dollars while decreasing as a percentage of revenues, as compared to the prior year periods, primarily due to (i) acquisitions, (ii) investment in property and equipment in our existing operations, and (iii) higher landfill amortization expense related to changes in cost and other assumptions and higher landfill volumes in our Eastern and Western regions, partially offset by lower landfill volumes in our Mid-Atlantic region.
Expense from Acquisition Activities
In the three and nine months ended September 30, 2026, we recorded charges of $6.3 million and $18.9 million, respectively, and in the three and nine months ended September 30, 2025, we recorded charges of $4.6 million and $16.6 million, respectively, comprised primarily of legal, consulting, rebranding, information technology and other costs associated with the due diligence, acquisition and integration of acquired businesses.
Landfill Development Impairment Charge
In the three and nine months ended September 30, 2026, we recorded a charge of $13.6 million for the complete write-off of deferred costs associated with the Granite State Landfill, LLC ("GSL") greenfield landfill project no longer deemed viable. See Note 8, Commitments and Contingencies to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the GSL greenfield landfill project.
Organics Facility Closure Charge
In the three months ended December 31, 2025, we initiated the plan to cease operations of an organic residuals composting facility that we own in Maine related to a change in state law prohibiting land application of biosolids based recycled products. In the three and nine months ended September 30, 2026, we recorded $0.7 million and $2.7 million, respectively, of other costs as incurred associated with winding down the facility, and expect to incur additional costs related to ceasing operations at the facility.
Organizational Transformation Costs
In the three and nine months ended September 30, 2026, we recorded organizational transformation costs of $1.4 million, comprised of certain costs related to employee severance and other employee compensation associated with initiatives to optimize our organizational structure and business operations. We expect to incur additional expenses related to these initiatives, potentially including third-party consulting, employee related compensation, information technology, legal and other costs.
Other Expenses (Income)
Interest Expense, net
Our interest expense, net increased $4.3 million and $11.1 million in the three and nine months ended September 30, 2026, respectively, as compared to the prior year periods, primarily from (i) lower interest income related to lower average cash balances and (ii) increased interest expense due to borrowings made under our revolving credit facility ("Revolving Credit Facility") in the nine months ended September 30, 2026.
Other Income
Our other income increased $3.6 million and $3.8 million in the three and nine months ended September 30, 2026, respectively, as compared to the prior year periods, primarily from the receipt of proceeds associated with the monetization of federal investment tax credits by a third-party that owns and operates a renewable natural gas facility at one of our landfills.
Provision for Income Taxes
Our provision for income taxes increased $2.6 million and $0.5 million in the three and nine months ended September 30, 2026, respectively, from the prior year periods. The provision for income taxes was $4.8 million for the nine months ended September 30, 2026. For the nine months ended September 30, 2025, the provision for income taxes was $4.3 million. The (121.2)% effective rate for the nine months ended September 30, 2026, 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 and the tax benefit from the complete write-off of deferred costs associated with the GSL greenfield landfill project no longer deemed viable. The September 30, 2026, effective rate was lower than the 29.1% effective rate for the nine months ended September 30, 2025, primarily due to differences in the valuation allowance of attributes, state income taxes and the tax benefit from the complete write-off of deferred costs associated with the GSL greenfield landfill project no longer deemed viable, which was treated as a discrete item for the three months ended September 30, 2026.
On July 4, 2025, H.R.1 - One Big Beautiful Bill Act (The "OBBB Act") was enacted. The OBBB Act addresses a wide range of changes including reinstating 100% bonus depreciation eligible for qualified assets. The OBBB Act also restores the EBITDA-based computation of interest expense limitations under Section 163(j) of the Internal Revenue Code among other income tax items; any interest expense limited may be carried forward indefinitely and utilized in later years subject to the interest limitation. We have evaluated the impacts of the OBBB Act, both federal and state, for those provisions that impact the fiscal year ending December 31, 2026. We will continue to evaluate the impacts of the OBBB Act for any further changes relating to state conformity to OBBB Act for future years.
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.
Segment Reporting
We report selected information about our reportable operating segments in a manner consistent with that used for internal management reporting. We manage our solid waste operations on a geographic basis through three regional operating segments, the Eastern, Western and Mid-Atlantic regions. We manage our resource renewal operations through the Resource Solutions operating segment. As noted above, for comparative purposes, certain prior period amounts have been moved between the processing and National Accounts service lines within our Resource Solutions operating segment to conform to the current period presentation reflecting the realignment of a business unit related to organic materials brokerage operations. In addition, we revised the presentation of our service lines to remove the transportation service line from the disposal caption and present it separately. Disposal now consists of the landfill and transfer station service lines. Prior period information has been updated to conform to the current period presentation for comparative purposes. 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.
Revenues
A summary of revenues by reportable operating segment (in millions) follows:
Three Months Ended
September 30, 		$
Change 		Nine Months Ended
September 30, 		$
Change
2026 2025 2026 2025
Eastern $ 157.8 $ 126.0 $ 31.8 $ 423.4 $ 351.6 $ 71.8
Western 189.6 175.1 14.5 537.8 497.6 40.2
Mid-Atlantic
107.9 91.1 16.8 304.9 251.5 53.4
Resource Solutions 103.9 93.2 10.7 294.2 267.1 27.1
Total revenues $ 559.2 $ 485.4 $ 73.8 $ 1,560.3 $ 1,367.8 $ 192.5
Operating Income (Loss)
A summary of operating income (loss) by operating segment (in millions) follows:
Three Months Ended
September 30, 		$
Change 		Nine Months Ended
September 30, 		$
Change
2026 2025 2026 2025
Eastern $ 8.1 $ 22.9 $ (14.8) $ 42.2 $ 55.6 $ (13.4)
Western 39.7 35.1 4.6 108.4 92.1 16.3
Mid-Atlantic
0.4 (3.3) 3.7 (7.4) (15.0) 7.6
Resource Solutions 4.2 10.0 (5.8) 13.5 23.6 (10.1)
Corporate Entities (36.8) (35.3) (1.5) (116.2) (104.5) (11.7)
Operating income $ 15.6 $ 29.4 $ (13.8) $ 40.5 $ 51.8 $ (11.3)
Eastern Region
A summary of the period-to-period changes in solid waste revenues (dollars in millions and as percentage growth of Eastern region solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended September 30, 2026 vs. 2025 Period-to-Period Change for the Nine Months Ended September 30, 2026 vs. 2025
Amount % Growth Amount % Growth
Price $ 5.9 4.7 % $ 17.9 5.1 %
Volume (0.2) (0.1) % (2.1) (0.6) %
Surcharges and other fees 4.2 3.2 % 9.8 2.9 %
Commodity price and volume - - % 0.5 0.1 %
Intercompany transfers to National Accounts (0.2) (0.1) % (0.2) (0.1) %
Acquisitions 22.1 17.6 % 45.9 13.0 %
Solid waste revenues $ 31.8 25.3 % $ 71.8 20.4 %
Solid waste revenues increased in the three and nine months ended September 30, 2026 as compared to the prior year periods, primarily due to (i) the contribution from acquisitions, (ii) higher collection pricing of $4.6 million quarterly, or 4.9% as a percentage of collection revenues, and $14.5 million year-to-date, or 5.5% as a percentage of collection revenues, (iii) higher surcharges and other fees, due to higher E&E Fee revenues associated with our fuel cost recovery program related to higher diesel fuel prices and higher participation levels in our fee programs, and higher year-to-date but lower quarterly SRA Fee revenues due to changes in recycled commodity prices as compared to the prior year periods, (iv) higher disposal pricing of $1.3 million quarterly, or 4.5% as a percentage of disposal revenues, and $3.4 million year-to-date, or 4.5% as a percentage of disposal revenues and (v) higher disposal volumes of $0.8 million quarterly, or 2.8% as a percentage of disposal revenues, and $1.0 million year-to-date, or 1.3% as a percentage of disposal revenues, related to higher landfill volumes, partially offset by lower transfer station volumes; partially offset by lower collection volumes of $(0.8) million quarterly, or (0.9)% as a percentage of collection revenues, and $(2.7) million year-to-date, or (1.0)%, as a percentage of collection revenues.
Operating income decreased in the three and nine months ended September 30, 2026 by $(14.8) million and $(13.4) million, respectively, as compared to the prior year periods. The period-over-period decreases were driven by (i) the landfill development impairment charge related to the complete write-off of deferred costs associated with the GSL greenfield landfill project no longer deemed viable, (ii) higher expense from acquisition activities, (iii) higher costs associated with operating and supporting acquired businesses, including disposal, hauling, personnel and facility related expenses as well as higher amortization of acquired intangibles, (iv) increased depreciation expense due to acquisitions and investment in property and equipment, (v) a higher provision for expected credit losses attributable to revenues growth combined with favorable shifts in the receivables aging buckets observed in the prior year periods, (vi) higher expenses related to insurance claims and (vii) general cost inflation, including for disposal, labor, diesel fuel and maintenance costs; partially offset by (a) revenue growth, described above, (b) the prior year-to-date period including legal penalties associated with leachate management at a landfill we own and (c) higher contributions related to intercompany activity, inclusive of subcontracting with our National Accounts business.
See Note 8, Commitments and Contingencies to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the GSL greenfield landfill project and the legal penalties associated with leachate management at a landfill we own. See Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the expense from acquisition activities.
Western Region
A summary of the period-to-period changes in solid waste revenues (dollars in millions and as percentage growth of Western region solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended September 30, 2026 vs. 2025 Period-to-Period Change for the Nine Months Ended September 30, 2026 vs. 2025
Amount % Growth Amount % Growth
Price $ 10.1 5.8 % $ 28.7 5.8 %
Volume (2.7) (1.5) % (8.2) (1.7) %
Surcharges and other fees 5.5 3.1 % 13.4 2.7 %
Commodity price and volume 0.3 0.1 % (0.3) (0.1) %
Intercompany transfers to National Accounts (0.6) (0.3) % (0.7) (0.1) %
Acquisitions 1.9 1.1 % 7.3 1.5 %
Solid waste revenues $ 14.5 8.3 % $ 40.2 8.1 %
Solid waste revenues increased in the three and nine months ended September 30, 2026 as compared to the prior year periods, primarily driven by (i) higher collection pricing of $8.2 million quarterly, or 6.2% as a percentage of collection revenues, and $23.8 million year-to-date, or 6.3% as a percentage of collection revenues, (ii) higher surcharges and other fees primarily due to our E&E Fee and SRA Fee revenues related to higher participation levels in our fee programs, higher E&E Fee revenues associated with our fuel cost recovery program due to higher diesel fuel prices and higher SRA Fee revenues due to lower recycled commodity prices year-to-date, (iii) the contribution from acquisitions, (iv) higher disposal pricing of $1.9 million quarterly, or 5.2% as a percentage of disposal revenues, and $4.9 million year-to-date, or 4.9% as a percentage of disposal revenues and (v) higher disposal volume of $2.4 million quarterly, or 6.7% as a percentage of disposal revenues, and $2.6 million year-to-date, or 2.6% as a percentage of disposal revenues, primarily related to higher landfill volumes, partially offset by lower transfer station volumes; partially offset by (a) lower collection volume of $(4.6) million quarterly, or (3.4)% as a percentage of collection revenues, and $(9.2) million year-to-date, or (2.4)% as a percentage of collection revenues, and (b)
lower other volumes of $(0.5) million quarterly, or (8.2)% as a percentage of other revenues, and $(1.6) million year-to-date, or (8.5)% as a percentage of other revenues, primarily related to transportation volumes.
Operating income increased in the three and nine months ended September 30, 2026 by $4.6 million and $16.3 million, respectively, as compared to the prior year periods. The period-over-period increases were due to (i) revenue growth, described above, (ii) higher contributions related to intercompany activity, inclusive of subcontracting with our National Accounts business, (iii) lower amortization of acquired intangibles, (iv) lower expense from acquisition activities year-to-date and (v) lower expenses for short term rentals; partially offset by (a) increased depreciation expense due to acquisitions and investment in property and equipment, (b) higher costs associated with operating and supporting acquired businesses, including personnel and facility related expenses, (c) higher landfill operating lease amortization related to changes in remaining airspace capacity estimates combined with higher landfill tonnages, (d) higher accretion expense associated with changes in the timing and cost estimates of our accrued final capping, closure and post-closure obligations, (e) higher expenses related to insurance claims, (f) a higher provision for expected credit losses attributable to revenues growth, (g) higher leachate disposal costs, (h) organizational transformation costs in the three and nine months ended September 30, 2026 consisting of severance and other employee compensation and (i) general cost inflation, including for disposal, labor, diesel fuel and maintenance costs, including repairs performed by third parties.
See Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the expense from acquisition activities and organizational transformation costs.
Mid-Atlantic Region
A summary of the period-to-period changes in solid waste revenues (dollars in millions and as percentage growth of Mid-Atlantic region solid waste revenues) follows:
Period-to-Period Change for the Three Months Ended September 30, 2026 vs. 2025 Period-to-Period Change for the Nine Months Ended September 30, 2026 vs. 2025
Amount % Growth Amount % Growth
Price $ 5.7 6.2 % $ 12.4 4.9 %
Volume (1.2) (1.3) % (4.5) (1.8) %
Surcharges and other fees (0.1) - % (0.1) - %
Intercompany transfers to National Accounts (1.4) (1.5) % (4.1) (1.6) %
Acquisitions 13.8 15.1 % 49.7 19.7 %
Solid waste revenues $ 16.8 18.5 % $ 53.4 21.2 %
Solid waste revenues increased in the three and nine months ended September 30, 2026 as compared to the prior year periods, due to the impact from (i) the contribution from acquisitions, (ii) higher collection pricing of $5.6 million quarterly, or 6.3% as a percentage of collection revenues, and $12.1 million year-to-date, or 4.9% as a percentage of collection revenues, (iii) higher disposal pricing of $0.1 million quarterly, or 3.3% as a percentage of disposal revenues, and $0.3 million year-to-date, or 5.1% as a percentage of disposal revenues, (iv) lower disposal volumes of $(0.1) million quarterly, or (3.7)% as a percentage of disposal revenues, and higher disposal volumes of $0.1 million year-to-date, or 2.4% as a percentage of disposal revenues, (v) lower collection volumes of $(1.1) million quarterly, or (1.3)% as a percentage of collection revenues, and $(4.6) million year-to-date, or (1.9)% as a percentage of collection revenues, and (vi) the internal transfer of customers and associated revenues previously managed under the Mid-Atlantic operating segment to the Resource Solutions operating segment.
Operating income (loss) improved in the three and nine months ended September 30, 2026 by $3.7 million and $7.6 million, respectively, as compared to the prior year periods. The period-over-period improvements were due to (i) revenue growth, described above, (ii) higher contributions related to intercompany activity, inclusive of subcontracting with our National Accounts business, (iii) lower expenses related to short term rentals, (iv) lower expense from acquisition activities and (v) lower amortization of acquired intangibles; partially offset by (a) higher costs associated with operating and supporting acquired businesses, including personnel and facility related expenses, (b) increased depreciation expense year-to-date due to acquisitions and investment in property and equipment, (c) a higher provision for expected credit losses attributable to revenues growth combined with favorable shifts in the receivables aging buckets observed in the prior year periods, (d) higher expenses related to insurance claims, (e) organizational transformation costs in the three and nine months ended September 30, 2026 consisting of severance and other employee compensation and (f) general cost inflation, including for disposal, labor, diesel fuel and maintenance costs.
See Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the expense from acquisition activities and organizational transformation costs.
Resource Solutions
A summary of the period-to-period changes in Resource Solutions revenues (dollars in millions and as percentage growth of Resource Solutions revenues) follows:
Period-to-Period Change for the Three Months Ended September 30, 2026 vs. 2025 Period-to-Period Change for the Nine Months Ended September 30, 2026 vs. 2025
Amount % Growth Amount % Growth
Price $ 4.2 4.5 % $ 7.2 2.7 %
Volume 0.1 0.1 % 7.5 2.8 %
Intercompany transfers from solid waste
2.1 2.3 % 5.1 1.9 %
Facility closure
(0.8) (0.8) % (4.4) (1.7) %
Surcharges and other fees 1.6 1.6 % 3.0 1.3 %
Acquisitions 3.5 3.8 % 8.7 3.2 %
Resource Solutions revenues
$ 10.7 11.5 % $ 27.1 10.2 %
Resource Solutions revenues increased in the three and nine months ended September 30, 2026 as compared to the prior year periods, related to (i) higher National Accounts business volumes related to new business growth of $1.5 million quarterly, or 3.3% as a percentage of National Accounts revenues, and $8.4 million year-to-date, or 6.7% as a percentage of National Accounts revenues, (ii) the contribution from acquisitions, (iii) higher other processing volumes of $1.0 million quarterly, or 4.9% as a percentage of related revenues, and $4.7 million year-to-date, or 8.2% as a percentage of related revenues, (iv) National Accounts business pricing growth of $2.4 million quarterly, or 5.4% as a percentage of National Accounts revenues, and $5.9 million year-to-date, or 4.7% as a percentage of National Accounts revenues, (v) the internal transfer of customers and associated revenues previously managed under our solid waste operating segments to the Resource Solutions operating segment, (vi) higher surcharges and other fees revenues in our National Accounts business due to higher E&E Fee revenues associated with our fuel cost recovery program related to higher diesel fuel prices, (vii) lower tipping fees of $(0.8) million quarterly, or (2.7)% as a percentage of related revenues, and higher tipping fees of $2.9 million year-to-date, or 3.4% as a percentage of related revenues, primarily related to contract structures that help to offset recycled commodity price movements, (viii) higher other processing price of $0.6 million quarterly, or 2.9% as a percentage of related revenues, and $2.5 million year-to-date, or 4.4% as a percentage of related revenues, (ix) higher recycled commodity price of $1.9 million quarterly, or 6.8% as a percentage of related revenues, and lower recycled commodity price of $(4.1) million year-to-date, or (4.8)% as a percentage of related revenues, (x) lower other processing revenues associated with the ceasing of operations in the three months ended December 31, 2025 of an organic residuals composting facility in Maine and (xi) lower recycling volumes of $(2.4) million quarterly, or (8.2)% as a percentage of related revenues, and $(5.6) million year-to-date, or (6.6)% as a percentage of related revenues.
Operating income decreased in the three and nine months ended September 30, 2026 by $(5.8) million and $(10.1) million, respectively, as compared to the prior year periods. The period-over-period decreases were due to (i) higher costs associated with operating and supporting acquired businesses, including personnel and facility related expenses, (ii) higher direct costs associated with increased National Accounts business volumes, (iii) higher expenses related to intercompany activity, inclusive of subcontracting our National Accounts business, (iv) the organics facility closure charge associated with the winding down of operations at an organic residuals composting facility in Maine, (v) higher expense from acquisition activities, and (vi) general cost inflation, including for disposal, labor, fuel and maintenance costs; partially offset by (a) revenue growth, described above, (b) lower accrued incentive compensation and (c) a reduction of operational costs related to the organic residuals composting facility in Maine associated with the ceasing of operations at the facility.
See Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the expense from acquisition activities and the organics facility closure charge.
Corporate Entities
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 the three and nine months ended September 30, 2026 by $(1.5) million and $(11.7) million, respectively, as compared to the prior year periods. The period-over-period increases were impacted by (i) higher expense from acquisition activities, (ii) higher costs associated with supporting acquired businesses, (iii) the centralization of certain processes and associated costs from our operating segments to the Corporate Entities segment, (iv) general cost inflation for salaries, wages, benefits and other overhead costs including those associated with marketing, sales and community relations efforts, (v) higher depreciation expense associated with back office financial system infrastructure, (vi) organizational transformation costs in the three and nine months ended September 30, 2026, consisting of severance and other employee compensation, and (vii) higher expenses for consulting services and outside labor; partially offset by lower accruals related to incentive compensation and lower expenses related to third-party professional services for legal and accounting services.
See Note 11, Other Items and Charges to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding the expense from acquisition activities and organizational transformation costs.
Liquidity and Capital Resources
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 September 30, 2026, we had $450.7 million of available and undrawn capacity under our $700.0 million Revolving Credit Facility and $11.7 million of cash and cash 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.
Our known current and long-term uses of cash include, among other possible demands: (i) acquisitions, (ii) capital expenditures and leases, (iii) repayments to service debt and other long-term obligations, and (iv) payments for final capping, closure and post-closure asset retirement obligations and environmental remediation liabilities. We have made in the past, and plan to make in the future, acquisitions to expand service areas, densify existing operations, and grow services for our customers. Future acquisitions may include larger acquisitions that may be inside or outside of our existing market, which could require additional financing either in the form of debt or equity.
A summary of consolidated balance sheet items relevant to our liquidity (in millions) follows:
September 30,
2026 		December 31,
2025 		$ Change
Cash and cash equivalents
$ 11.7 $ 123.8 $ (112.1)
Current assets, excluding cash and cash equivalents
$ 295.6 $ 245.5 $ 50.1
Restricted cash and assets
$ 3.0 $ 96.3 $ (93.3)
Total current liabilities:
Current liabilities, excluding current maturities of debt $ 298.4 $ 268.2 $ 30.2
Current maturities of debt 25.4 25.7 (0.3)
Total current liabilities $ 323.8 $ 293.9 $ 29.9
Debt, less current portion, excluding unamortized debt issuance costs
$ 1,368.6 $ 1,142.9 $ 225.7
Current assets, excluding cash and cash equivalents, increased $50.1 million, and current liabilities, excluding current maturities of debt, increased $30.2 million in the nine months ended September 30, 2026, resulting in a $19.9 million increase in working capital, net (defined as current assets, excluding cash and cash equivalents minus current liabilities, excluding current maturities of debt), from $(22.7) million as of December 31, 2025 to $(2.8) million as of September 30, 2026.
Summary of Cash Flow Activity
A summary of cash flows (in millions) follows:
Nine Months Ended
September 30, 		$
Change
2026 2025
Net cash provided by operating activities $ 241.8 $ 233.2 $ 8.6
Net cash used in investing activities (640.0) (404.7) (235.3)
Net cash provided by (used in) financing activities 193.1 (19.1) 212.2
Net decrease in cash, cash equivalents and restricted cash, including non-current
$ (205.1) $ (190.6) $ (14.5)
Cash flows from operating activities.
A summary of operating cash flows (in millions) follows:
Nine Months Ended
September 30,
2026 2025
Net (loss) income $ (8.8) $ 10.4
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 254.5 227.3
Interest accretion on landfill and environmental remediation liabilities 12.1 11.1
Amortization of debt issuance costs 2.2 2.3
Stock-based compensation 9.5 11.6
Operating lease right-of-use assets expense 19.4 16.4
Other items and charges, net
13.9 (0.2)
Deferred income taxes (0.7) 1.1
302.1 280.0
Changes in assets and liabilities, net (60.3) (46.8)
Net cash provided by operating activities $ 241.8 $ 233.2
Net cash provided by operating activities increased $8.6 million in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. 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 the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, see "Results of Operations" above.
Cash flows from investing activities.
A summary of investing cash flows (in millions) follows:
Nine Months Ended
September 30, 		$
Change
2026 2025
Acquisitions, net of cash acquired $ (440.0) $ (217.5) $ (222.5)
Additions to property and equipment
(200.5) (187.8) (12.7)
Additions to intangible assets
(0.5) - (0.5)
Proceeds from sale of property and equipment 1.0 0.6 0.4
Net cash used in investing activities $ (640.0) $ (404.7) $ (235.3)
Acquisitions, net of cash acquired. In the nine months ended September 30, 2026, we acquired six businesses, which included $(434.8) million of cash consideration, and made $(5.2) million in payments on businesses previously acquired, as compared to the nine months ended September 30, 2025 during which we acquired eight businesses, which included $(217.2) million of cash consideration and made $(0.3) million in cash payments on businesses previously acquired.
Capital expenditures. Capital expenditures were $(12.7) million higher in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to higher spend related to landfill development, including the timing of rail capital expenditures related to our Subtitle D landfill located in Mount Jewett, Pennsylvania, and other growth activities, partially offset by lower spend related to acquisition activity and facilities.
Cash flows from financing activities.
A summary of financing cash flows (in millions) follows:
Nine Months Ended
September 30, 		$
Change
2026 2025
Proceeds from long-term borrowings $ 471.2 $ 91.5 $ 379.7
Principal payments on debt (277.6) (108.4) (169.2)
Payments of debt issuance costs (0.5) (2.2) 1.7
Net cash provided by (used in) financing activities $ 193.1 $ (19.1) $ 212.2
Debt activity. Net cash provided by (used in) financing activities associated with debt activity increased $210.5 million in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to borrowings against our Revolving Credit Facility driven by acquisition growth.
Debt activity in the nine months ended September 30, 2026 included the remarketing of $15.0 million aggregate principal amount of New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2014R-2, whereas debt activity in the nine months ended September 30, 2025 included (i) the drawdown of $25.0 million aggregate principal amount of Vermont Economic Development Authority Solid Waste Disposal Revenue Bonds Series 2022A-2, (ii) the repayment in full of $25.0 million aggregate principal amount of Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-3, which matured in January 2025, (iii) the remarketing of $29.0 million aggregate principal amount of Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-1 and 2015R-2 into a single series Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-3, and (iv) the remarketing of $37.5 million aggregate principal amount of New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2020.
See Note 7, Debt to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding financing activities.
Outstanding Long-Term Debt
Credit Facility
As of September 30, 2026, we are party to the second amended and restated credit agreement ("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:
Term SOFR Loans Base Rate Loans
Credit Facility 1.300% to 2.175% 0.300% to 1.175%
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 September 30, 2026, further advances were available under the Revolving Credit Facility in the amount of $450.7 million. The available amount is net of outstanding irrevocable letters of credit totaling $33.9 million. No amount has been drawn on the irrevocable letters of credit as of September 30, 2026.
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 September 30, 2026, we were in compliance with all financial covenants contained in the Credit Agreement as follows (in millions):
Credit Facility Covenant
Twelve Months Ended September 30, 2026
Covenant Requirements at September 30, 2026
Maximum consolidated net leverage ratio (1)
2.76
4.00
Minimum interest coverage ratio 7.63 3.00
(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 $1,382.2 million as of September 30, 2026, or $1,393.9 million of consolidated funded debt less $11.7 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 September 30, 2026. 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):
Twelve Months Ended September 30, 2026
Net cash provided by operating activities $ 338.4
Changes in assets and liabilities, net of effects of acquisitions and divestitures 57.8
Stock based compensation (12.1)
Operating lease right-of-use assets expense (11.5)
Other items and charges, net
(16.0)
Interest expense, less amortization of debt issuance costs 64.5
Provision for income taxes, net of deferred income taxes
4.2
Adjustments as allowed by the Credit Agreement (1)
75.8
Consolidated EBITDA $ 501.1
(1)Adjustments as allowed by the Credit Agreement includes the estimated annual pro forma impact of acquisitions on Consolidated EBITDA.
In addition to these financial covenants, the Credit Agreement also contains a number of important customary affirmative and negative covenants which restrict, among other things, our ability to sell assets, incur additional debt, create liens, make investments, and pay dividends. As of September 30, 2026, we were in compliance with the covenants contained in the Credit Agreement. We do not believe that these restrictions impact our ability to meet future liquidity needs.
An event of default under any of our debt agreements could permit some of our lenders, including the lenders under the Credit Facility, to declare all amounts borrowed from them to be immediately due and payable, together with accrued and unpaid interest, or, in the case of the Credit Facility, terminate the commitment to make further credit extensions thereunder, which could, in turn, trigger cross-defaults under other debt obligations. If we were unable to repay debt to our lenders or were otherwise in default under any provision governing our outstanding debt obligations, our secured lenders could proceed against us and against the collateral securing that debt.
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 may 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.
Tax-Exempt Financings and Other Debt
As of September 30, 2026, we had outstanding $273.5 million aggregate principal amount of tax exempt bonds; $104.4 million aggregate principal amount of finance leases; and $0.7 million aggregate principal amount of notes payable.
See Note 7, Debt to our consolidated financial statements included in Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further disclosure regarding debt.
Inflation
Inflationary increases in costs have materially affected, and may continue to materially affect, our operating margins and cash flows. However, we believe that our flexible pricing structures and cost recovery fees are allowing us to recover and will continue to allow us to recover certain inflationary costs from our customer base. Consistent with industry practice, most of our contracts and service agreements provide for a pass-through of certain costs to our customers, including increases in landfill tipping fees and in most cases fuel costs, intended to mitigate the impact of inflation on our operating results. We have also implemented a number of operating efficiency programs that seek to improve productivity and reduce our service costs, and our fuel cost recovery programs, primarily the energy component of our E&E Fee, which is designed to recover escalating fuel price fluctuations above a periodically reset floor. Despite these programs, competitive factors may require us to absorb at least a portion of these cost increases. Additionally, management's estimates associated with inflation have had, and will continue to have, an impact on our accounting for landfill and environmental remediation liabilities.
See Item 3. "Quantitative and Qualitative Disclosures about Market Risk" included in this Quarterly Report on Form 10-Q for additional information regarding our fuel cost recovery programs.
Regional Economic Conditions
Our business is primarily located in the eastern United States. Therefore, our business, financial condition and results of operations are susceptible to downturns in the general economy in this geographic region and other factors affecting the region, such as state and local regulations, labor availability and severe weather conditions. We are unable to forecast or determine the timing and/or the future impact of a sustained economic slowdown or other factors affecting the region.
Seasonality and Severe Weather
Our revenues historically have been higher in the late spring, summer and early fall months. This seasonality reflects lower volumes of waste in the late fall, winter and early spring months because the volume of waste relating to C&D activities decreases substantially during the winter months in the northeastern United States.
Our operations can be adversely affected by periods of inclement or severe weather, which may increase with the physical impacts of climate change and could increase our operating costs associated with the collection and disposal of waste, delay the collection and disposal of waste, reduce the volume of waste delivered to our disposal sites, increase the volume of waste collected under our existing contracts (without corresponding compensation), decrease the throughput and operating efficiency of our materials recycling facilities, or delay construction or expansion of our landfill sites and other facilities. Our operations can also be favorably affected by severe weather, which could increase the volume of waste in situations where we are able to charge for our additional services provided.
Critical Accounting Estimates and Assumptions
Our consolidated financial statements have been prepared in accordance with GAAP and necessarily include certain estimates and judgments made by management. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances.
See Note 8, Commitments and Contingencies and Note 11, Other Items and Charges to our consolidated financial statements included under Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for disclosure related to the complete write-off of deferred costs associated with the GSL greenfield landfill project, which was no longer deemed viable.
See Note 6, Accrued Final Capping, Closure and Post-Closure Costs to our consolidated financial statements included under Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for disclosure related to a change in estimates and assumptions concerning anticipated waste flow, costs and timing of future final capping, closure and post-closure activities at our Subtitle D landfill located in Bethlehem, New Hampshire.
Our critical accounting estimates are more fully discussed in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K for fiscal year 2025.
New Accounting Pronouncements
For a description of the new accounting standards that may affect us, see Note 2, Accounting Changes to our consolidated financial statements included under Part I. Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q.
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