GFL ENVIRONMENTAL INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the three months and year ended December 31, 2020 The following Management’s Discussion and Analysis (“Annual MD&A”) for GFL Environmental Inc. (“us”, “we”, “our”, “GFL”, or the “Company”) is dated February 25, 2021 and provides information concerning our results of operations and financial condition for the three months and year ended December 31, 2020. You should read this Annual MD&A together with our audited consolidated financial statements and the related notes for the year ended December 31, 2020 (“Annual Financial Statements”). For a discussion of the Company’s results of operations and cash flows for the three month period ended December 31, 2019 compared to the three month period ended December 31, 2018, and the year ended December 31, 2019 compared to the 2018 periods presented therein, see, respectively, the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Capital Resources— Cash Flows for the successor three month period ended December 31, 2019 compared to the successor three month period ended December 31, 2018, and the year ended December 31, 2019 compared to the Successor 2018 Period and the Predecessor 2018 Period, respectively” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Analysis of Results for the successor three month period ended December 31, 2019 compared to the successor three month period ended December 31, 2018 and the year ended December 31, 2019 compared to the Successor 2018 Period and the Predecessor 2018 Period” which can be found in (i) the Company’s final prospectus filed with the SEC on March 4, 52 Table of Contents 2020, pursuant to Rule 424(b)(4) (File No. 333-232731), in the case of United States investors, and (ii) the Company’s Supplemented PREP Prospectus filed on SEDAR on March 4, 2020, in the case of Canadian investors (collectively with the prospectus referred to in (i), the “IPO Prospectus”), which section is incorporated by reference herein. Company Overview GFL is the fourth largest diversified environmental services company in North America, with operations throughout Canada and in 27 states in the United States. GFL had more than 15,000 employees as of December 31, 2020. GFL was formed on March 5, 2020 under the laws of the Province of Ontario as a result of the amalgamation of GFL and its parent company GFL Environmental Holdings Inc. (“Holdings”). The amalgamation was accounted for as a transaction between entities under common control and the net assets are recorded at historical cost retrospectively. Upon amalgamation, GFL became the financial reporting entity. On March 5, 2020, GFL completed its initial public offering of 75,000,000 subordinate voting shares and a concurrent public offering of 15,500,000 tangible equity units (“TEUs”) for total gross proceeds to us of $2,888.8 million (US$2,168.8 million) (collectively, the “IPO”). Each TEU, which has a stated amount of US$50.00, is comprised of a prepaid stock purchase contract (each, a “Purchase Contract”) and a senior amortizing note (each, an “Amortizing Note”) due March 15, 2023. Our subordinate voting shares trade on the New York Stock Exchange (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) under the symbol “GFL” and the TEUs trade on the NYSE under the symbol “GFLU”. We used the net proceeds from the IPO to redeem our 5.625% USD senior unsecured notes due May 1, 2022 (the “5.625% 2022 Notes”) and our 5.375% USD senior unsecured notes due March 1, 2023 (the “5.375% 2023 Notes”) and a portion of our 7.000% USD senior unsecured notes due June 1, 2026 (the “7.000% 2026 Notes”) and our 8.500% USD senior unsecured notes due May 1, 2027 (the “8.500% 2027 Notes”) and to repay certain indebtedness outstanding under our Revolving Credit Facility and our Term Loan Facility (each as defined herein). Forward-Looking Information This Annual MD&A, including, in particular, the sections below entitled “Summary of Factors Affecting Our Performance” and “Liquidity and Capital Resources” contains forward-looking information and forward-looking statements which reflect the current view of management with respect to our objectives, plans, goals, strategies, outlook, results of operations, financial and operating performance, prospects and opportunities. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts nor assurances of future performance but instead represent management’s expectations, estimates and projections regarding future events or circumstances. These forward-looking statements and other forward-looking information are based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Factors that could cause actual results to differ from those projected include, but are not limited to, those listed below and in the section entitled “Risk Factors” included in the Company’s annual report on Form 20-F for the year ended December 31, 2020 (the “Annual Report”). There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change, except where we are expressly required to do so by law. ​ 53 Table of Contents Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following risk factors which are described in greater detail under the heading entitled “Risk Factors” included elsewhere in the Annual Report: our ability to build our market share; our ability to retain key personnel; our ability to maintain and expand geographic scope; our ability to maintain good relationships with our customers; our ability to execute on our expansion plans; our ability to execute on additional acquisition opportunities; adverse effects of acquisitions on our operations; potential liabilities from past and future acquisitions; dependence on the integration and success of acquired businesses; our ability to continue investing in infrastructure to support our growth; our ability to obtain and maintain existing financing on acceptable terms; our ability to implement price increases or offset increasing costs; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; the changes in laws, rules, regulations, and global standards; changing governmental regulation, and risks associated with failing to comply; liabilities in connection with environmental matters; loss of municipal and other contracts; potential inability to renew or obtain new landfill or organic waste facility permits and agreements, and the cost of operation and/or future construction of existing landfills or organic waste facilities; our dependence on third party landfills and transfer stations; our access to equity or debt capital markets is not assured; increases in labour, disposal, and related transportation costs; fuel supply and fuel price fluctuations; we require sufficient cash flow to reinvest in our business; our potential inability to obtain performance or surety bonds, letters of credit, other financial assurances or insurance; operational, health and safety and environmental risks; natural disasters, weather conditions and seasonality; loss of existing customers or inability to obtain new contracts; economic downturn may adversely impact our operating results and cause exposure to credit risks; increasing dependence on technology and risk of technology failure; cybersecurity incidents or issues; damage to our reputation or our brand; introduction of new tax or accounting rules, laws or regulations; increases in insurance costs; climate change regulations that could increase cost to operate; risks associated with failing to comply with U.S., Canadian or foreign anti-bribery or anti-corruption laws or regulations; landfill site closure and post-closure costs and contamination-related costs; changing competitive dynamics for excess landfill capacity; litigation or regulatory or activist action; and health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic. Basis of Presentation Our Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Unless the context indicates otherwise, references in this Annual MD&A to “GFL”, the “Company”, “we”, “us” and “our” mean GFL and its consolidated subsidiaries, which, for the avoidance of doubt, (i) includes WCA Waste Corporation and the assets and business acquired from Waste Management, Inc. and Advanced Disposal Services, Inc. and their subsidiaries for the period beginning on October 1, 2020 and October 30, 2020, respectively and (ii) includes Waste Industries and its subsidiaries for the period from November 14, 2018 to December 31, 2018 and the years ended December 31, 2019, and December 31, 2020, respectively. As these transactions are not considered material, they have not been separately disclosed. Holdings amalgamated with Hulk Acquisition Corp. on May 31, 2018 in connection with the investment in Holdings by certain funds and other entities managed, advised or controlled by or affiliated with BC Partners Advisors L.P., or an entity affiliated with Ontario Teachers’ Pension Plan Board and affiliates of Patrick Dovigi, our Founder, Chairman, President and Chief Executive Officer (collectively, the “Recapitalization”). Accordingly, the Annual Financial Statements reflect the periods both prior and subsequent to the Recapitalization. Our fiscal year ends on December 31 of each calendar year. Our fiscal year ended December 31, 2018, which we refer to as “2018”, is presented separately for (i) the predecessor period from January 1, 2018 through May 31, 2018, which we refer to as the “Predecessor 2018 Period”, and (ii) the successor period from June 1, 2018 through December 31, 2018, which we refer to as the “Successor 2018 Period”, with the periods prior to the Recapitalization being labeled as “Predecessor” and the periods subsequent to the Recapitalization being labeled as “Successor”. The operating results of 2020 and 2019 capture a full 12 months of operating results, whereas the Successor 2018 Period and the Predecessor 2018 Period capture only seven months and five months of operating results, respectively. This Annual MD&A is presented in millions of Canadian dollars unless otherwise indicated. Reclassification of prior year presentation Certain revenue disaggregation and segment reporting balances reported in prior periods have been reclassified for consistency with the current period presentation. These immaterial reclassifications had no effect on the reported consolidated results of operations. 54 Table of Contents In the second quarter of 2019, GFL revised its accounting policy in regard to the presentation in certain “Other” revenue to reflect changes made in the manner in which results were being internally reported and managed. As a result of the policy revision, revenue previously disclosed as attributable to a specific service line was reclassified as “Other” revenue within the revenue by service line disclosure. During the year ended December 31, 2020, GFL moved one of its business units from its Infrastructure and soil remediation segment to its Solid waste segment to make the segment presentation consistent with an internal management reorganization. This move resulted in a decrease in Solid waste revenue and an increase in Infrastructure and soil remediation revenue. Also, during the year ended December 31, 2020, GFL harmonized the presentation of intercompany revenues across all of its business units for internal reporting purposes to align with how our Chief Operating Decision Maker (“CODM”) reviews results, which resulted in an increase to the amounts disclosed for Landfill, Transfer, Material Recovery and Intercompany revenue within GFL’s revenue by service type disclosure. Additionally, during the year ended December 31, 2020, GFL harmonized the presentation of corporate costs across our segments, which resulted in a reduction in costs and an increase in Adjusted EBITDA for our Solid waste USA segment and a corresponding increase in costs and reduction in Adjusted EBITDA for our Corporate segment. All previously reported revenue by service type and segment information has been retrospectively adjusted to conform to the updated 2020 presentation. GFL has amended certain 2019 and 2018 balances due to rounding. Summary of Factors Affecting Performance We believe that our performance and future success depend on a number of factors that present significant opportunities for us. These factors are also subject to a number of inherent risks and challenges discussed in this Annual MD&A and in the Annual Report. Our results for the three months and year ended December 31, 2020 were impacted by acquisitions and associated financing activities as well as organic growth during the periods as a result, in part, from the pricing initiatives that we implemented. Our ability to leverage our scalable network to drive operational cost efficiencies also impacted our performance for the periods. During the latter half of 2020, our performance was affected by the reduction in commercial activity as a result of the various measures taken by the Canadian and U.S. governments in response to COVID-19. Finally, our results are influenced by seasonality and tend to be higher in the second and third quarters of the year, due to the higher volume of waste generated during the summer months in many of our solid waste markets, and lower in the first quarter of the year, primarily due to winter weather conditions, which are pronounced in Canada. We intend to continue to grow our business and generate improvements in our financial performance by expanding our service offerings into new geographic markets and extending our geographic footprint to increase regional density across our business lines, thereby increasing margins. Our success in achieving these goals is dependent on our ability to execute on our three-pronged strategy of (i) continuing to generate strong, stable organic revenue growth, (ii) successfully executing strategic, accretive acquisitions, and (iii) continuing to drive operating cost efficiencies across our platform. Strong, Stable Organic Revenue Growth Our ability to generate strong, stable organic revenue growth across macroeconomic cycles depends on our ability to increase the breadth and depth of services that we provide to our existing customers, realize on cross-selling opportunities between our complementary service capabilities, obtain prices and surcharge increases, win new contracts, and renewals or extensions of existing contracts and expand into new or adjacent markets. We believe that executing on this strategy will continue to drive our organic revenue growth and free cash flow generation. Our business is well-diversified across business lines, geographies and customers. We believe that our continued success depends on our ability to further enhance and leverage this diversification, a key component of which is our ability to offer our customers a comprehensive service offering across our three business lines backed by an extensive geography across Canada and in 27 states in the United States. The majority of the revenue we generate in our solid waste business is derived from secondary markets, with revenue derived from major metropolitan centres representing the majority of our residential solid waste revenue. 55 Table of Contents We also believe we are well positioned to respond to changing customer needs and regulatory demands in order to maintain our success. This includes being able to respond to legal requirements and customer demands to divert waste away from landfill disposal by continuing to expand our ability to collect and process multiple streams of material. Our diversified business model also complements our acquisition strategy. Multiple business lines allow us to source acquisitions from a broader pool of potential targets. Maintaining a diversified model is therefore critical to capitalizing on accretive acquisition opportunities and helping to reduce execution and business risk inherent in single-market and single-service offering strategies. Executing Strategic, Accretive Acquisitions Our ability to identify, execute and integrate accretive acquisitions is a key driver of our growth. Given the significant fragmentation that exists in the North American environmental services industry, our growth and success depend on our ability to realize on consolidation opportunities in all three of our business lines. Since 2007, we have completed over 140 acquisitions across each of our lines of business. We focus on selectively acquiring premier independent regional operators to create platforms in new markets, followed by tuck-in acquisitions to help increase density and scale. Integration of these acquisitions with our existing platform is a key factor to our success, along with continuing to identify and act upon these attractive consolidation opportunities. In addition, successful execution of acquisitions opens new markets to us, provides us with new opportunities to realize cross-selling opportunities, and drives procurement and cost synergies across our operations. Driving Operating Cost Efficiencies We provide our services through a strategically located network of facilities in Canada and in the United States. In each of our geographic markets, our strong competitive position is supported by and depends on the significant capital investment required to replicate our network infrastructure and asset base, as well as by stringent permitting and regulatory compliance requirements. Our continued success also depends on our ability to leverage our scalable network to attract and retain customers across multiple service lines, realize operational efficiencies, and extract procurement and cost synergies. It is also key that we continue to leverage our scalable capabilities to drive operating margin expansion and realize cost synergies. This includes using the capacity of our existing facilities, technology processes and people to support future growth and provide economies of scale, as well as increasing route density and servicing new contract wins with our existing network of assets and fleet to enhance the profitability of each of our business lines. Our success also depends on our ability to continue to make strategic investments in our business, including substantial capital investments in our facilities, technology processes and administrative capabilities to support our future growth. Our ability to improve our operating margins and our selling, general and administrative expense margins by maintaining strong discipline in our cost structure and regularly reviewing our practices to manage expenses and increase efficiency will also impact our operating results. Impact of and Response to COVID-19 The spread of the novel coronavirus (“COVID-19”) has created a global health crisis that has resulted in widespread disruption to economic activity in the United States and Canada. Beginning in March 2020, U.S. and Canadian governments as well as numerous state, provincial and local governments implemented certain measures to attempt to slow and limit the spread of COVID-19, including shelter-in-place and physical distancing orders as well as closure restrictions or requirements. Throughout the second quarter of 2020, governments in Canada and the U.S. began to lift these measures and reopen businesses. In the latter half of 2020, several measures were re-introduced primarily in major metropolitan areas. Throughout this period, we have been classified as an “Essential Critical Infrastructure Workforce” by the Government of Canada and the U.S. Department of Homeland Security and as an “Essential Service Provider” by Canadian provinces and the U.S. states in which we operate. As a result, we have continued to provide our essential services during these unprecedented and challenging times. 56 Table of Contents Our financial results for the three months and year ended December 31, 2020 were impacted by the reduction in commercial activity as a result of the various measures taken by the Canadian and U.S. governments in response to COVID-19. Our overall revenue is heavily weighted to our solid waste business, which is our most resilient business line and is also diversified across geographies and customers. The majority of the revenue we generate in our solid waste business is from secondary markets. The solid waste revenue we generate in major metropolitan centres or primary markets is predominately derived from municipal residential contracts. In the three months ended December 31, 2020, we experienced lower volumes in our solid and liquid waste commercial and industrial collection and post collection businesses due to a decrease in service levels attributable to COVID-19, primarily in the major metropolitan centres that we serve. Our liquid waste business also had lower sales volume of used motor oil (“UMO”) which we believe is a result of the temporary suspension of certain customers’ operations in response to COVID-19. While construction projects in certain jurisdictions have been deemed essential services, due to the protracted duration of the COVID-19 pandemic, we experienced lower volumes in our infrastructure and soil remediation business in the three months ended December 31, 2020. In addition, we experienced an adverse impact on our margins due to the change in revenue mix resulting from fewer low volume high-frequency projects. Due to the rapidly evolving and highly uncertain nature of the COVID-19 pandemic, we are unable to estimate the extent of its impact on our on-going business at this time. In response to the spread of COVID-19 and resulting governmental measures, we have implemented business continuity initiatives focused on prioritizing the health and safety of our workforce. We have implemented physical distancing protocols, reinforced proper hygiene practices and increased communications to employees reinforcing these practices. As safety is one of our core values, we continue to support and protect the health and well-being of our workforce and customers through ongoing sanitization of equipment and facilities as well as providing personal protection equipment to employees to ensure our ability to continue to safely deliver our services to our communities and customers. We have a flexible cost structure which allows us to manage our operating expenses and capital expenditures. We have deferred certain non-essential capital expenditures originally planned for 2020 and reduced or eliminated certain discretionary costs such as travel and entertainment. Operating Results Analysis of results for the three months and the year ended December 31, 2020 compared to the three months and the year ended December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Three months ended ​ ​ ​ ​ ​ ($millions except per share amounts) December 31, 2020 December 31, 2019(1), (2) Change % Revenue ​ $ 1,235.6 ​ $ 896.6 ​ $ 339.0 37.8 % Expense ​ ​ ​ ​ Cost of sales ​ 1,363.0 ​ 872.5 ​ 490.5 56.2 ​ Selling, general & administrative expenses ​ 144.8 ​ 140.8 ​ 4.0 2.8 ​ Interest and other finance costs ​ 137.9 ​ 150.4 ​ (12.5) (8.3) ​ Impairment and other charges ​ 21.4 ​ — ​ 21.4 — ​ Other expenses (income) ​ 245.2 ​ (14.0) ​ 259.2 1,851.4 ​ Loss before income taxes ​ (676.7) ​ (253.1) ​ (423.6) 167.4 ​ Income tax recovery ​ (190.0) ​ (72.7) ​ (117.3) 161.3 ​ Net loss ​ (486.7) ​ (180.4) ​ (306.3) 169.8 ​ Loss per share, basic and diluted ($) ​ (1.39) ​ (1.00) ​ (0.39) 39.0 ​ Adjusted EBITDA (3) ​ $ 311.2 ​ $ 208.9 ​ $ 102.4 49.0 % (1) The Results of Operations and the Liquidity and Capital Resources sections of the IPO Prospectus provide analysis of results for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 to which there have been no material changes in the results or analysis. (2) Weighted average shares for the three months ended December 31, 2019 were adjusted for the share split completed in conjunction with the pre-capital closing changes implemented as part of the IPO. (3) Adjusted EBITDA is a non-IFRS measure. Refer to section entitled “Non-IFRS Financial Measures and Key Performance Indicators”. ​ 57 Table of Contents The following tables summarize certain operating results and other financial data for the periods indicated, which have been derived from our Annual Financial Statements and related notes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor ​ Predecessor ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ($millions except per share amounts) December 31, 2020 December 31, 2019 (214 days) (151 days) Revenue ​ $ 4,196.2 ​ $ 3,346.9 ​ $ 1,224.8 ​ $ 627.8 Expense ​ ​ ​ ​ Cost of sales ​ 4,006.1 ​ 3,073.1 ​ 1,152.3 ​ 551.2 Selling, general & administrative expenses ​ 508.4 ​ 396.5 ​ 217.7 ​ 126.5 Interest and other finance costs ​ 597.6 ​ 532.2 ​ 242.2 ​ 127.4 Impairment and other charges ​ 21.4 ​ — ​ — ​ — Other expenses (income) ​ 418.5 ​ (45.7) ​ 45.3 ​ 14.3 Loss before income taxes ​ (1,355.8) ​ (609.2) ​ (432.7) ​ (191.6) Income tax recovery ​ (360.9) ​ (157.5) ​ (114.0) ​ (26.9) Net loss ​ (994.9) ​ (451.7) ​ (318.7) ​ (164.7) Loss per share, basic and diluted ($) (1) ​ (2.80) ​ (2.50) ​ (2.14) ​ (0.29) Adjusted EBITDA (2) ​ 1,076.7 ​ 825.7 ​ 282.0 ​ 127.3 Total assets ​ 15,730.0 ​ 12,323.8 ​ 11,071.6 ​ — Total cash ​ 27.2 ​ 574.8 ​ 7.4 ​ — Total long-term debt ​ 6,166.1 ​ 7,625.1 ​ 6,288.7 ​ — Total liabilities ​ 10,050.7 ​ 9,555.9 ​ 7,879.0 ​ — Shareholders’ equity ​ $ 5,679.3 ​ $ 2,767.9 ​ $ 3,192.6 ​ $ — (1) Loss per share at December 31, 2019 and December 31, 2018 adjusted for share split completed in conjunction with the pre-capital closing changes implemented as part of the IPO. (2) Adjusted EBITDA is a non-IFRS measure. Refer to section entitled “Non-IFRS Financial Measures and Key Performance Indicators”. Revenue The following tables summarize revenue by service type for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Three months ended ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ December 31, 2019(1) ​ Revenue Change ​ ($millions) Revenue % Revenue % $ % Residential ​ $ 305.1 24.7 % $ 214.7 23.9 % $ 90.4 ​ 42.1 % Commercial/industrial ​ 418.2 33.8 ​ 283.8 31.7 ​ 134.4 ​ 47.4 ​ Collection ​ 723.3 58.5 ​ 498.5 55.6 ​ 224.8 ​ 45.1 ​ Landfill ​ 143.3 11.6 ​ 63.4 7.1 ​ 79.9 ​ 126.0 ​ Transfer ​ 137.3 11.1 ​ 87.9 9.8 ​ 49.4 ​ 56.2 ​ Material recovery ​ 77.2 6.2 ​ 40.6 4.5 ​ 36.6 ​ 90.1 ​ Other ​ 50.2 4.1 ​ 48.8 5.5 ​ 1.4 ​ 2.9 ​ Solid waste ​ 1,131.3 91.5 ​ 739.2 82.5 ​ 392.1 ​ 53.0 ​ Infrastructure and soil remediation ​ 135.6 11.0 ​ 150.9 16.8 ​ (15.3) ​ (10.1) ​ Liquid waste ​ 124.4 10.1 ​ 100.4 11.2 ​ 24.0 ​ 23.9 ​ Intercompany revenue ​ (155.7) (12.6) ​ (93.9) (10.5) ​ (61.8) ​ 65.8 ​ Revenue ​ $ 1,235.6 100.0 % $ 896.6 100.0 % $ 339.0 ​ 37.8 % ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) Includes reclassification of $0.5 million from Infrastructure and soil remediation to Landfill and $0.1 million from each of Commercial and Material recovery to Other. 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ​ ​ December 31, 2020 ​ December 31, 2019(1) ​ (214 days)(2) ​ (151 days)(3) ($millions) Revenue % Revenue % Revenue % Revenue % Residential ​ $ 1,067.8 25.4 % $ 815.3 24.4 % $ 272.1 22.2 % $ 135.4 22.0 % Commercial/industrial ​ 1,350.1 32.2 ​ 1,106.9 33.1 ​ 340.1 27.8 ​ 173.2 28.0 ​ Collection ​ 2,417.9 57.6 ​ 1,922.2 57.5 ​ 612.2 50.0 ​ 308.6 50.0 ​ Landfill ​ 348.4 8.3 ​ 255.5 7.6 ​ 77.8 6.4 ​ 37.2 6.0 ​ Transfer ​ 426.7 10.2 ​ 337.2 10.1 ​ 98.2 8.0 ​ 56.4 9.0 ​ Material recovery ​ 263.3 6.3 ​ 95.5 2.9 ​ 28.2 2.3 ​ 18.2 3.0 ​ Other ​ 226.6 5.4 ​ 172.0 5.0 ​ 83.1 6.8 ​ 40.1 6.0 ​ Solid waste ​ 3,682.9 87.8 ​ 2,782.4 83.1 ​ 899.5 73.5 ​ 460.5 74.0 ​ Infrastructure and soil remediation ​ 535.1 12.8 ​ 538.3 16.1 ​ 260.7 21.3 ​ 135.1 22.0 ​ Liquid waste ​ 455.8 10.9 ​ 385.2 11.5 ​ 168.3 13.7 ​ 88.7 14.0 ​ Intercompany revenue ​ (477.6) (11.5) ​ (359.0) (10.7) ​ (103.7) (8.5) ​ (56.5) (10.0) ​ Revenue ​ $ 4,196.2 100.0 % $ 3,346.9 100.0 % $ 1,224.8 100.0 % $ 627.8 100.0 % ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) Includes reclassification to increase Intercompany revenue by $45.9 million and decrease Infrastructure and soil remediation revenue by $2.1 million. This resulted in increases in revenue of $20.8 million in Landfill, $25.7 million in Transfer, $1.2 million in Material recovery and $0.3 million in Commercial. There was no change in total revenue. (2) Includes reclassification to decrease revenues of $35.7 million from Material recovery, $1.8 million from Liquid waste and $0.1 million from Infrastructure and soil remediation. This resulted in increases in revenue of $36.7 million in Other and Landfill for $1.0 million. There was no change in total revenue. (3) Includes reclassification to decrease revenues of $21.4 million in Material recovery. This resulted in increases in revenue of $20.5 million in Other, $0.7 million in Liquid waste and $0.2 million in Landfill. There was no change in total revenue. On a consolidated basis, revenue for the three months ended December 31, 2020 increased by $339.0 million to $1,235.6 million compared to the three months ended December 31, 2019. The increase is primarily attributable to the impact of acquisitions. Revenue from acquisitions completed since October 1, 2019 accounted for approximately $337.5 million of the increase, the majority of which was in our solid waste business. Partially offsetting this increase was reduced volumes in the majority of our businesses attributable to COVID-19, primarily in the major metropolitan centres that we serve. Highlights of the changes in revenue during the three months ended December 31, 2020, excluding the impact of acquisitions include: ● Solid waste revenue increased by 4.3% from core pricing, surcharge and commodity price increases. Partially offsetting these increases was a 0.3% decrease from lower volumes, which represented an improvement of 139 basis points as compared to the volume decrease during the three months ended September 30, 2020 and was predominately due to a reduction in commercial and industrial collection activity as well as reduced transfer station and organic waste volume, as a result of the various measures implemented by the Canadian and U.S. governments in an effort to limit the spread of COVID-19. Volume was positive in our material recovery facility (“MRF”) operations driven by new processing contracts. Changes in foreign exchange rates decreased revenue by 0.7%. ● Infrastructure and soil remediation revenue decreased by 11.3%, which represented an improvement of 547 basis points as compared to the organic revenue decline in the three months ended September 30, 2020. The decline is predominantly attributable to a reduction in soil volumes processed at our facilities. While the substantial majority of our larger active projects were deemed essential and continued to progress throughout the fourth quarter, the measures implemented by governments to limit the spread of COVID-19 has delayed the commencement of new large projects, which has temporarily reduced the volume of contaminated soils in the markets that we serve. Additionally, we continued to realize lower volumes from many of the small volume high frequency soil remediation customers that we typically service resulting from the reduction of those customers’ soil remediation activities in response to COVID-19. ● Liquid waste revenue decreased organically by 9.2%, which represented an improvement of 907 basis points as compared to the organic revenue decline in the three months ended September 30, 2020. The decrease is due to a combination of lower sales volume of UMO and reduced industrial collection and processing activity resulting from the temporary suspension of certain customers’ operations in response to COVID-19. Despite the lower gross selling prices for UMO attributable to the declines in the indices on which our selling prices are based, net selling prices increased 27.5% compared to the prior year period as a result of adjusting the amounts that are paid or charged to the UMO generators at the time of collection. 59 Table of Contents ​ On a consolidated basis, revenue for the year ended December 31, 2020 increased by $849.3 million to $4,196.2 million compared to the year ended December 31, 2019. The increase is primarily attributable to the impact of acquisitions. Revenue from acquisitions completed since January 1, 2019 accounted for approximately $876.0 million of the increase, the majority of which were in our solid waste business. Highlights of the changes in revenue during the year ended December 31, 2020 excluding the impact of acquisitions include: ● Solid waste revenue increased by 4.3% from core pricing, surcharge and commodity price increases. Partially offsetting these increases was a 2.7% decrease from lower volumes, predominately from a reduction in commercial and industrial activity as well as reduced post collection volume, as a result of the various measures implemented by the Canadian and U.S. governments in an effort to limit the spread of COVID-19. Volume was positive in our MRF operations driven by new processing contracts. Changes in foreign exchange rates increased revenue by 0.6%. ● Infrastructure and soil remediation revenue decreased organically by 6.2%, a decline predominantly attributable to a reduction in soil volumes processed at our facilities. While the substantial majority of our larger active projects were deemed essential and continued to progress throughout the latter portion of the year, the measures implemented by governments to limit the spread of COVID-19 has delayed the commencement of new large projects, which has temporarily reduced the volume of contaminated soils in the markets that we serve. Additionally, we realized lower volumes from many of the small volume high frequency soil remediation customers that we typically service resulting from the temporary reduction of those customers’ soil remediation activities in response to COVID-19. ● Liquid waste revenue decreased organically by 16.1% due to a combination of lower sales volume of UMO and reduced industrial collection and processing activity resulting from the temporary suspension of certain customers’ operations in response to COVID-19. Despite the lower gross selling prices for UMO attributable to the declines in the indices on which our selling prices are based, net selling prices were relatively comparable to the prior year period as a result of adjusting the amounts that are paid or charged to the UMO generators at the time of collection. Cost of Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Three months ended ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ December 31, 2019 ​ Cost Change ($millions) Cost % of Revenue Cost % of Revenue $ % Transfer and disposal costs ​ $ 280.3 22.7 % $ 231.4 25.8 % $ 48.9 ​ 21.1 % Labour and benefits ​ 296.5 24.0 ​ 217.5 24.3 ​ ​ 79.0 ​ 36.3 ​ Maintenance and repairs ​ 109.5 8.9 ​ 73.7 8.2 ​ ​ 35.8 ​ 48.6 ​ Fuel ​ 45.2 3.7 ​ 38.8 4.3 ​ ​ 6.4 ​ 16.5 ​ Mark-to-market loss on fuel hedge ​ — — ​ 0.1 — ​ ​ (0.1) ​ — ​ Other cost of sales ​ 90.2 7.2 ​ 54.8 6.0 ​ ​ 35.4 ​ 64.6 ​ Subtotal ​ 821.7 66.5 ​ 616.3 68.6 ​ ​ 205.4 ​ 33.3 ​ Depreciation expense ​ 432.5 35.0 ​ 156.4 17.5 ​ ​ 276.1 ​ 176.5 ​ Amortization of intangible assets ​ 107.5 8.7 ​ 86.7 9.7 ​ ​ 20.8 ​ 24.0 ​ Acquisition rebranding and other integration costs ​ 1.3 0.1 ​ 13.1 1.5 ​ ​ (11.8) ​ (90.1) ​ Cost of sales ​ $ 1,363.0 110.3 % $ 872.5 97.3 % $ 490.5 ​ 56.2 % 60 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ Year ended ​ Year ended ​ Period ended ​ Period ended ​ ​ December 31, 2020 ​ December 31, 2019 ​ December 31, 2018 (214 days) ​ May 31, 2018 (151 days) ($millions) Cost % of Revenue Cost % of Revenue Cost % of Revenue Cost % of Revenue Transfer and disposal costs ​ $ 954.6 ​ 22.7 % $ 827.6 ​ 24.7 % $ 290.6 ​ 23.7 % $ 155.7 ​ 24.8 % Labour and benefits ​ 1,022.7 24.4 ​ 811.8 24.3 ​ 309.0 25.2 ​ 154.8 24.6 ​ Maintenance and repairs ​ 359.3 8.6 ​ 270.0 8.1 ​ 95.1 7.8 ​ 48.3 7.7 ​ Fuel ​ 157.2 3.7 ​ 155.9 4.6 ​ 64.8 5.3 ​ 35.2 5.6 ​ Mark-to-market loss on fuel hedge ​ 1.8 — ​ 1.0 — ​ — — ​ — — ​ Other cost of sales ​ 287.0 6.9 ​ 194.1 5.8 ​ 80.2 6.5 ​ 44.5 7.1 ​ Subtotal ​ 2,782.6 66.3 ​ 2,260.4 67.5 ​ 839.7 68.5 ​ 438.5 69.8 ​ Depreciation expense ​ 785.1 18.7 ​ 442.2 13.2 ​ 172.1 14.1 ​ 63.1 10.1 ​ Amortization of intangible assets ​ 427.0 10.2 ​ 334.1 10.0 ​ 127.5 10.4 ​ 40.9 6.5 ​ Acquisition rebranding and other integration costs ​ 11.4 0.3 ​ 36.4 1.1 ​ 13.0 1.1 ​ 8.7 1.4 ​ Cost of sales ​ $ 4,006.1 95.5 % $ 3,073.1 91.8 % $ 1,152.3 94.1 % $ 551.2 87.8 % ​ Cost of sales increased by $490.5 million to $1,363.0 million for the three months ended December 31, 2020 compared to the three months ended December 31, 2019. Acquisitions completed since October 1, 2019 were the primary driver of the increase in total costs. Asset Retirement Obligation (“ARO”) depreciation expense of $231.7 million was incurred due to the difference between the ARO obligation calculated using the credit-adjusted, risk-free discount rate required for measurement of the ARO obligation through purchase accounting, compared to the risk-free discount rate required for annual valuations. Changes in the individual cost categories as a percentage of revenue were the result of the impact of business mix. The cost of additional safety equipment, hygiene products and cleaning services purchased in the three months ended December 31, 2020 in response to COVID-19 contributed to the increase in cost of sales as compared to the three months ended December 31, 2019. Partially offsetting this increase was our continued focus on cost management and enhancing efficiency. Fuel costs as a percentage of revenue decreased due to the change in business mix as well as a decline in fuel costs compared to the three months ended December 31, 2019. Cost of sales as a percentage of total revenue for the three months ended December 31, 2020 increased by 1,300 basis points to 110.3% compared to the three months ended December 31, 2019. Cost of sales excluding depreciation expenses, amortization of intangible assets, and acquisition rebranding and other integration costs as a percentage of total revenue for the three months ended December 31, 2020 decreased by 210 basis points to 66.5% compared to the three months ended December 31, 2019. Cost of sales increased by $933.0 million to $4,006.1 million for the year ended December 31, 2020 compared to the year ended December 31, 2019. Acquisitions completed since January 1, 2019 were the primary driver of the increase in total costs including depreciation expense related to property and equipment of $231.7 million as described above. Changes in the individual cost categories as a percentage of revenue were the result of the impact of business mix. Higher headcount related to the organic growth of our business and an increase in insurance costs resulted in higher cost of sales for the year ended December 31, 2020 compared to the year ended December 31, 2019, partially offset by lower transfer and disposal costs in facilities purchased in recent acquisitions and utilized to support new contracts. The cost of additional safety equipment, hygiene products and cleaning services purchased in the year ended December 31, 2020 in response to COVID-19 also contributed to the increase in cost of sales as compared to the year ended December 31, 2019. Cost of sales as a percentage of total revenue for the year ended December 31, 2020 increased by 370 basis points to 95.5% compared to the year ended December 31, 2019. Cost of sales excluding depreciation expenses, amortization of intangible assets, and acquisition rebranding and other integration costs as a percentage of total revenue for the year ended December 31, 2020, decreased by 120 basis points to 66.3% compared to the year ended December 31, 2019. 61 Table of Contents Selling, General and Administrative Expenses (“SG&A”) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ​ ​ ​ ​ ($ millions) ​ December 31, 2020 ​ December 31, 2019 ​ Change ​ % ​ Salaries and benefits ​ $ 65.7 ​ $ 47.3 ​ $ 18.4 ​ 38.9 % Share-based payments ​ ​ 10.8 ​ ​ 3.6 ​ ​ 7.2 ​ 200.0 Other ​ ​ 37.0 ​ ​ 24.2 ​ ​ 12.8 ​ 52.9 Subtotal ​ ​ 113.5 ​ ​ 75.1 ​ ​ 38.4 ​ 51.1 Depreciation expenses ​ 7.2 ​ 5.5 ​ 1.7 30.9 ​ Transaction costs ​ 24.1 ​ 28.6 ​ (4.5) (15.7) ​ Unbilled revenue reversal ​ ​ — ​ ​ 31.6 ​ ​ (31.6) ​ — ​ Selling, general & administrative expenses ​ $ 144.8 ​ $ 140.8 ​ $ 4.0 2.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ($millions) ​ December 31, 2020 December 31, 2019 (214 days) (151 days) Salaries and benefits ​ $ 217.5 ​ $ 170.4 ​ $ 69.0 ​ $ 41.4 Share-based payments ​ ​ 37.9 ​ ​ 14.5 ​ ​ 2.0 ​ ​ 18.8 Other ​ ​ 121.2 ​ ​ 91.4 ​ ​ 36.9 ​ ​ 20.7 Subtotal ​ 376.6 ​ 276.3 ​ 107.9 ​ 80.9 Depreciation expense ​ 25.5 ​ 23.1 ​ 6.1 ​ 3.2 Transaction costs ​ 60.1 ​ 65.5 ​ 103.7 ​ 42.4 IPO transaction costs ​ 46.2 ​ — ​ — ​ — Unbilled revenue reversal ​ ​ — ​ ​ 31.6 ​ ​ — ​ ​ — Selling, general & administrative expenses ​ $ 508.4 ​ $ 396.5 ​ $ 217.7 ​ $ 126.5 ​ For the three months ended December 31, 2020, SG&A increased by $4.0 million to $144.8 million compared to the three months ended December 31, 2019. The increase was primarily attributable to incremental salaries, benefits, information technology infrastructure investments and other costs related to the number and size of businesses acquired since October 1, 2019. SG&A as a percentage of revenue was 11.7% for the three months ended December 31, 2020, compared to 15.7% for the three months ended December 31, 2019. Excluding depreciation expense, transaction costs and unbilled revenue reversal, SG&A as a percentage of revenue was 9.2% for the three months ended December 31, 2020 compared to 8.4% for the three months ended December 31, 2019. For the year ended December 31, 2020, SG&A increased by $111.9 million to $508.4 million compared to the year ended December 31, 2019. The increase was primarily attributable to the recognition of costs incurred in preparation of the IPO, an increase in share-based payments primarily related to options issued in connection with the IPO, and to incremental salaries, benefits, information technology infrastructure investments and other costs related to the number and size of businesses acquired since January 1, 2019. SG&A as a percentage of revenue was 12.1% for the year ended December 31, 2020 compared to 11.8% for the year ended December 31, 2019. Excluding depreciation expense, transaction costs, IPO transaction costs and unbilled revenue reversal, SG&A as a percentage of revenue was 9.0% for the year ended December 31, 2020, compared to 8.3% for the year ended December 31, 2019. Interest and Other Finance Costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ​ ​ ​ ​ ($millions) ​ December 31, 2020 ​ December 31, 2019 ​ Change ​ % ​ Interest ​ $ 85.3 ​ $ 121.3 ​ $ (36.0) ​ (29.7) % Loss on extinguishment of debt ​ ​ 35.5 ​ ​ — ​ $ 35.5 ​ — Amortization of deferred financing costs ​ ​ 10.1 ​ ​ 2.6 ​ ​ 7.5 ​ 288.5 Accretion of landfill closure and post-closure obligations ​ ​ 2.1 ​ ​ 1.8 ​ ​ 0.3 ​ 16.7 Other financing costs ​ 4.9 ​ 24.7 ​ (19.8) (80.2) ​ Interest and other finance costs ​ $ 137.9 ​ $ 150.4 ​ $ (12.5) (8.3) % ​ 62 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ($millions) ​ December 31, 2020 December 31, 2019 (214 days) (151 days) Interest ​ $ 372.4 ​ $ 472.7 ​ $ 149.5 ​ $ 85.1 Loss on extinguishment of debt ​ ​ 168.7 ​ ​ — ​ ​ — ​ ​ — Amortization of deferred financing costs ​ ​ 36.1 ​ ​ 9.7 ​ ​ 23.3 ​ ​ 4.1 Accretion of landfill closure and post-closure obligations ​ 6.9 ​ 6.1 ​ 1.2 ​ 1.3 Other financing costs ​ 13.5 ​ 43.7 ​ 68.2 ​ 36.9 Interest and other finance costs ​ $ 597.6 ​ $ 532.2 ​ $ 242.2 ​ $ 127.4 ​ Interest and other finance costs decreased by $12.5 million to $137.9 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. This decrease was predominately due to a reduction in borrowings as a result of the redemption of the 5.625% 2022 Notes and the 5.375% 2023 Notes in their entirety and the partial redemption of the 7.000% 2026 Notes and the 8.500% 2027 Notes with proceeds from the IPO, as well as a decrease in other financing costs of $19.8 million. This was partially offset by a $35.5 million loss on extinguishment of debt related to the repayment of the remaining 7.000% 2026 Notes in the three months ended December 31, 2020. Interest and other finance costs increased by $65.4 million to $597.6 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. This increase was predominantly due to interest and premium costs of which $168.7 million was related to premium and loss on extinguishment of the PIK Notes (as defined herein) and prepayment penalties related to the redemption of the 5.625% 2022 Notes, the 5.375% 2023 Notes and the 7.000% 2026 Notes in their entirety and partial early repayment of the 8.500% 2027 Notes. Additionally, interest expense of $372.4 million for the year ended December 31, 2020 was $100.3 million less than interest expense for the year ended December 31, 2019. The decrease was driven by less long-term debt as we de-levered our statement of financial position as a result of the IPO and reduced our cost of capital through refinancing. Other Income and Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ​ ​ ​ ​ ($millions) ​ December 31, 2020 ​ December 31, 2019 ​ Change ​ % ​ Gain on foreign exchange ​ $ (112.9) ​ $ (14.1) ​ $ (98.8) ​ 700.7 % Mark-to-market loss on Purchase Contracts ​ ​ 355.9 ​ ​ — ​ ​ 355.9 ​ — Loss on sale of property and equipment ​ ​ 2.2 ​ ​ 0.1 ​ ​ 2.1 ​ 2,100.0 Other expenses (income) ​ $ 245.2 ​ $ (14.0) ​ $ 259.2 ​ 1,851.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ($millions) ​ December 31, 2020 December 31, 2019 (214 days) (151 days) Gain on foreign exchange ​ $ (37.3) ​ $ (48.9) ​ $ 39.6 ​ $ 16.6 Mark-to-market loss on Purchase Contracts ​ ​ 449.2 ​ ​ — ​ ​ — ​ ​ — Loss on sale of property and equipment ​ ​ 4.6 ​ ​ 1.2 ​ ​ 4.7 ​ ​ (0.1) Deferred purchase consideration ​ 2.0 ​ 2.0 ​ 1.0 ​ 1.0 Other ​ — ​ — ​ — ​ (3.2) Other expenses (income) ​ $ 418.5 ​ $ (45.7) ​ $ 45.3 ​ $ 14.3 ​ For the three months ended December 31, 2020, we had $245.2 million of other expenses compared to $14.0 million of other income for the three months ended December 31, 2019. This change was predominately due to $355.9 million of non-cash loss on the revaluation of the Purchase Contracts in the three months ended December 31, 2020. This was partly offset by a foreign exchange gain of $112.9 million predominately arising from the revaluation of the TEUs and the unhedged portion of our U.S. dollar denominated debt to Canadian dollar based on the foreign exchange rate as at December 31, 2020. For the year ended December 31, 2020, we had $418.5 million of other expenses compared to other income of $45.7 million for the year ended December 31, 2019. This change was predominately due to $449.2 million of non-cash loss on the revaluation of the Purchase Contracts and a foreign exchange gain of $37.3 million predominately arising from the revaluation of the unhedged portion of 63 Table of Contents our U.S. denominated long-term debt based on the strengthening of the U.S. dollar against the Canadian dollar for the year ended December 31, 2020 compared to the year ended December 31, 2019. Impairment In the year ended December 31, 2020, we took a $14.2 million impairment charge, primarily consisting of a $11.4 million write down of inventory and a $2.3 million write down to dispose of inventory. Additionally, we wrote off $7.2 million of other assets in relation to funds expected to be received from a previous shareholder of a prior acquisition. As at December 31, 2020, the entire balance was determined to not be recoverable and was expensed in the year. Income Tax Recovery Net income tax recovery increased by $117.3 million to $190.0 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase was predominately due to incremental tax losses attributable to increased depreciation expense from acquisitions and the revaluation of the Purchase Contracts compared to the three months ended December 31, 2019. Our basis for recording income tax recoveries is due to the offsetting of deferred tax liabilities on our balance sheet. Net income tax recovery increased by $203.4 million to $360.9 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase was predominately due to incremental tax losses related to increased depreciation expense from acquisitions, revaluation of the Purchase Contracts, and expenses incurred in connection with the IPO. Our basis for recording income tax recoveries is due to the offsetting of deferred tax liabilities on our balance sheet. Segment Results Our main lines of business are the transporting, managing and recycling of solid and liquid waste and infrastructure and soil remediation services. We are divided into operating segments corresponding to the following lines of business: Solid waste, which includes hauling, landfill, transfers and MRFs; Infrastructure and soil remediation; and Liquid waste. The operating segments are presented in accordance with the same criteria used for the internal report prepared for the CODM who is responsible for allocating the resources and assessing the performance of the operating segments. The CODM assesses the performance of the segments on several factors, including gross revenue, intercompany revenue, revenue and Adjusted EBITDA. Analysis of results for the three months and the year ended December 31, 2020 compared to the three months and the year ended December 31, 2019 The following tables provide a breakdown by operating segment of our gross revenue, intercompany revenue, revenue, and Adjusted EBITDA for the periods indicated. Gross revenue is calculated based on revenue before intercompany revenue eliminations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended December 31, 2020 ​ ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Successor ​ Gross Revenue Revenue Revenue EBITDA Solid waste ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 369.7 ​ $ (49.4) ​ $ 320.3 ​ $ 87.6 USA ​ ​ 762.3 ​ ​ (90.5) ​ ​ 671.8 ​ ​ 211.8 Solid waste ​ 1,132.0 ​ (139.9) ​ 992.1 ​ 299.4 Infrastructure and soil remediation ​ 136.4 ​ (4.0) ​ 132.4 ​ 16.4 Liquid waste ​ 122.9 ​ (11.8) ​ 111.1 ​ 26.1 Corporate ​ — ​ — ​ — ​ (30.7) ​ ​ $ 1,391.3 ​ $ (155.7) ​ $ 1,235.6 ​ $ 311.2 64 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended December 31, 2019(1) ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Successor ​ Gross Revenue Revenue Revenue(2) EBITDA(3) Solid waste ​ ​ ​ ​ Canada ​ $ 334.5 ​ $ (43.1) ​ $ 291.4 ​ $ 71.9 USA ​ 402.7 ​ (39.0) ​ 363.7 ​ 110.0 Solid waste ​ 737.2 ​ (82.1) ​ 655.1 ​ 181.9 Infrastructure and soil remediation ​ 151.3 ​ (1.6) ​ 149.7 ​ 26.1 Liquid waste ​ 101.9 ​ (10.1) ​ 91.8 ​ 16.1 Corporate ​ — ​ — ​ — ​ (15.2) ​ ​ $ 990.4 ​ $ (93.8) ​ $ 896.6 ​ $ 208.9 ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) The Results of Operations and the Liquidity and Capital Resources sections of the IPO Prospectus provide analysis of results for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 to which there have been no material changes in the results or analysis. (2) Includes reclassification of $0.3 million from Liquid waste to Solid waste Canada. (3) Includes reclassification of $6.1 million from Corporate and $1.0 million from Liquid waste to Solid waste USA, and $0.2 million from Solid waste Canada to Solid waste USA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2020 ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Successor ​ Gross Revenue ​ Revenue ​ Revenue ​ EBITDA Solid waste ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 1,417.8 ​ $ (187.0) ​ $ 1,230.8 ​ $ 338.6 USA ​ 2,262.0 ​ (236.2) ​ 2,025.8 ​ 639.2 Solid waste ​ 3,679.8 ​ (423.2) ​ 3,256.6 ​ 977.8 Infrastructure and soil remediation ​ 538.2 ​ (10.9) ​ 527.3 ​ 91.6 Liquid waste ​ 455.8 ​ (43.5) ​ 412.3 ​ 97.5 Corporate ​ — ​ — ​ — ​ (90.2) ​ ​ $ 4,673.8 ​ $ (477.6) ​ $ 4,196.2 ​ $ 1,076.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2019 ​ ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Successor ​ Gross Revenue ​ Revenue ​ Revenue(1) ​ EBITDA(2) Solid waste ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 1,174.8 ​ $ (161.1) ​ $ 1,013.7 ​ $ 267.7 USA ​ 1,603.4 ​ (155.8) ​ 1,447.6 ​ 431.0 Solid waste ​ 2,778.2 ​ (316.9) ​ 2,461.3 ​ 698.7 Infrastructure and soil remediation ​ 541.0 ​ (6.0) ​ 535.0 ​ 103.7 Liquid waste ​ 386.7 ​ (36.1) ​ 350.6 ​ 79.5 Corporate ​ — ​ — ​ — ​ (56.2) ​ ​ $ 3,705.9 ​ $ (359.0) ​ $ 3,346.9 ​ $ 825.7 ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) Includes reclassification of $1.7 million from Liquid waste into Solid waste Canada. (2) Includes reclassification of $1.5 million from Solid waste Canada and $26.4 million from Solid waste USA into Liquid waste in the amount of $3.8 million and Corporate in the amount of $24.1 million. 65 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ended December 31, 2018 (214 days) ​ ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Successor ​ Gross Revenue ​ Revenue ​ Revenue(1) ​ EBITDA(2) Solid waste ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 595.5 ​ $ (75.3) ​ $ 520.2 ​ $ 142.6 USA ​ 302.0 ​ (8.5) ​ 293.5 ​ 63.6 Solid waste ​ 897.5 ​ (83.8) ​ 813.7 ​ 206.2 Infrastructure and soil remediation ​ 262.7 ​ (4.0) ​ 258.7 ​ 56.4 Liquid waste ​ 168.3 ​ (15.9) ​ 152.4 ​ 38.3 Corporate ​ — ​ — ​ — ​ (18.9) ​ ​ $ 1,328.5 ​ $ (103.7) ​ $ 1,224.8 ​ $ 282.0 ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) Includes reclassification of $0.6 million from Solid waste Canada into Liquid waste. (2) Includes reclassification of $4.9 million from Corporate to Solid waste USA and $0.5 million from Solid waste Canada to Liquid waste. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ended May 31, 2018 (151 days) ​ ​ ​ ​ ​ Intercompany ​ ​ ​ ​ Adjusted Predecessor ​ Gross Revenue ​ Revenue ​ Revenue(1) ​ EBITDA(2) Solid waste ​ ​ ​ ​ Canada ​ $ 362.5 ​ $ (40.3) ​ $ 322.2 ​ $ 80.1 USA ​ 97.0 ​ (3.1) ​ 93.9 ​ 17.3 Solid waste ​ 459.5 ​ (43.4) ​ 416.1 ​ 97.4 Infrastructure and soil remediation ​ 136.2 ​ (2.8) ​ 133.4 ​ 23.4 Liquid waste ​ 88.6 ​ (10.3) ​ 78.3 ​ 15.8 Corporate ​ — ​ — ​ — ​ (9.3) ​ ​ $ 684.3 ​ $ (56.5) ​ $ 627.8 ​ $ 127.3 ​ Refer to the section entitled “Basis of Presentation” in this Annual MD&A for additional details on the reclassifications outlined below: (1) Includes reclassification of $0.6 million from Solid waste Canada into Liquid waste. (2) Includes reclassification of $0.6 million from Solid waste Canada into Liquid waste. Solid Waste — Canada Segment Revenue increased by $28.9 million to $320.3 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase was due in part to acquisitions completed since October 1, 2019, which contributed approximately $10.6 million of revenue, $9.0 million from price and surcharge increases and $1.9 million from higher selling prices for the saleable commodities generated from our MRF operations. The amount of price and surcharge increases were relatively lower than the prior period, a decrease attributable to a temporary suspension of certain of our price increase initiatives in many of our markets during the period combined with the effect of negative consumer price index (“CPI”) adjustments on certain municipal collection contracts. Volume increased revenue by $7.4 million for the three months ended December 31, 2020 compared to the three months ended December 31, 2019, primarily from higher volumes in MRF operations as a result of the commencement of new MRF contracts in both Eastern and Western Canada and positive landfill volumes. Partially offsetting these increases were lower volumes in our commercial and industrial collection, transfer station and organic waste businesses, due to a decrease in service levels attributable to COVID-19. The volume decreases were greatest in our primary markets. Revenue increased by $217.1 million to $1,230.8 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase was predominately due to acquisitions completed since January 1, 2019 which contributed approximately $198.4 million of revenue, $34.1 million from price and surcharge increases and $5.4 million from higher selling prices for the saleable commodities generated from our MRF operations. The amount of price and surcharge increases were relatively lower than the prior period, a decrease attributable to a temporary suspension of certain of our price increase initiatives in many of our markets during the period combined with the effect of negative CPI adjustments on certain municipal collection contracts. Volume decreased revenue by $20.8 million for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily from lower volumes in our commercial and industrial, transfer station and organic waste businesses, due to a decrease in service levels attributable to COVID-19. The volume decreases were greatest in our primary markets. Partially offsetting these volume decreases was higher 66 Table of Contents volume in our MRF operations as a result of commencement of new MRF contracts in both Eastern and Western Canada and positive landfill volumes. Adjusted EBITDA increased by $15.7 million to $87.6 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, which is predominately attributable to the previously described change in revenues. Adjusted EBITDA margin was 27.3% for the three months ended December 31, 2020, an increase of 260 basis points as compared to the three months ended December 31, 2019. The incremental revenue from acquisitions, primarily attributable to the recent acquisitions of Canada Fibers and solid waste collection businesses, contributed Adjusted EBITDA margins less than the existing base business, negatively impacting the overall Adjusted EBITDA margin. Incremental health and safety costs of $0.4 million and volume declines primarily attributable to COVID-19, also negatively impacted the Adjusted EBITDA margin during the three months ended December 31, 2020. Offsetting the impact of these items was a $3.4 million decrease in fuel and oil costs as a result of lower diesel prices and organic margin expansion attributable to pricing initiatives, cost controls and overall operating leverage. Adjusted EBITDA increased by $70.9 million to $338.6 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, which is predominately attributable to the previously described change in revenues. Adjusted EBITDA margin for the year ended December 31, 2020, was 27.5%, an increase of 110 basis points as compared to the year ended December 31, 2019. The incremental revenue from acquisitions, primarily attributable to the recent acquisitions of Canada Fibers and solid waste collection businesses, contributed Adjusted EBITDA margins less than the existing base business, negatively impacting the overall Adjusted EBITDA margin. Incremental health and safety costs of $1.5 million, incremental provision for bad debts of $2.5 million and volume declines, all primarily attributable to COVID-19, also negatively impacted the Adjusted EBITDA margin during the year ended December 31, 2020. Offsetting the impact of these items was a $12.4 million decrease in fuel and oil costs as a result of lower diesel prices and organic margin expansion attributable to pricing initiatives, cost controls and overall operating leverage. Solid Waste — USA Segment Revenue increased by $308.1 million to $671.8 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase was predominately due to acquisitions completed since October 1, 2019 which contributed approximately $298.4 million of revenue, $14.7 million from price and surcharge increases and $2.3 million from higher selling prices for the saleable commodities generated from our MRF operations. Volume decreased revenue by $9.3 million for the three months ended December 31, 2020 compared to the three months ended December 31, 2019, primarily from lower commercial and industrial collection businesses and post-collection business, due to a decrease in service levels attributable to COVID-19. The volume decreases were greatest in our primary markets. Strengthening of the Canadian dollar against the U.S dollar for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, decreased revenue by $4.8 million. Revenue increased by $578.2 million to $2,025.8 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase was predominately due to acquisitions completed since January 1, 2019 which contributed approximately $533.8 million of revenue, $61.3 million from price and surcharge increases and $5.8 million from higher selling prices for the saleable commodities generated from our MRF operations. Volume decreased revenue by $45.6 million for the year ended December 31, 2020, compared to the year ended December 31, 2019 primarily from lower volumes in our commercial and industrial collection businesses and post collection business, due to a decrease in service levels attributable to COVID-19. The volume decreases were greatest in our primary markets. Strengthening of the U.S. dollar against the Canadian dollar for the year ended December 31, 2020, compared to the year ended December 31, 2019, contributed $22.7 million to revenue. Adjusted EBITDA increased by $101.8 million to $211.8 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, predominately attributable to the previously described change in revenues. Adjusted EBITDA margin was 31.5% for the three months ended December 31, 2020, an increase of 130 basis points compared to the three months ended December 31, 2019. The incremental revenue from acquisitions contributed Adjusted EBITDA margins higher than the existing base business, increasing the overall Adjusted EBITDA margin. Organic margin expansion attributable to pricing initiatives, variable cost controls and procurement savings, as well as a $1.7 million impact from reduced fuel costs positively impacted Adjusted EBITDA margins. Partially offsetting these increases were volume declines primarily attributable to COVID-19, which negatively impacted the Adjusted EBITDA margin during the three months ended December 31, 2020. Adjusted EBITDA increased by $208.2 million to $639.2 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, predominately attributable to the previously described change in revenues. Adjusted EBITDA margin was 67 Table of Contents 31.6% for the year ended December 31, 2020, an increase of 180 basis points compared to the year ended December 31, 2019. The incremental revenue from acquisitions contributed Adjusted EBITDA margins less than the existing base business, reducing the overall Adjusted EBITDA margin. Organic margin expansion attributable to pricing initiatives, variable cost controls and procurement savings, as well as a $6.9 million impact from reduced fuel costs also positively impacted Adjusted EBITDA margins. Partially offsetting these increases was incremental health and safety costs of $0.8 million and volume declines primarily attributable to COVID-19, which negatively impacted the Adjusted EBITDA margin for the year ended December 31, 2020, compared to the year ended December 31, 2019. Infrastructure and Soil Remediation Segment Revenue decreased by $17.3 million to $132.4 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, a decline predominately attributable to a reduction in soil volumes processed at our facilities. While the substantial majority of our larger active projects were deemed essential and continued to progress throughout the quarter, the measures implemented by governments to limit the spread of COVID-19 has delayed the commencement of new large projects, which has temporarily reduced the volume of contaminated soils in the markets that we serve. Additionally, we continued to realize lower volumes from many of the small volume high-frequency soil remediation customers that we typically service resulting from the reduction of those customers’ soil remediation activities in response to COVID-19. Revenue decreased by $7.7 million to $527.3 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, predominately driven by acquisitions completed since January 1, 2019 which contributed approximately $25.7 million of revenue in this segment. Offsetting the contribution from acquisitions was an organic revenue decline attributable to a reduction in soil volumes processed at our facilities. While the substantial majority of our larger active projects were deemed essential and continued during the latter half of the year, the measures implemented by governments to limit the spread of COVID-19 has delayed the commencement of new large projects, which has temporarily reduced the volume of contaminated soils in the markets that we serve. Additionally, we realized lower volumes from many of the small volume high-frequency soil remediation customers that we typically service resulting from the temporary suspension or reduction of those customers’ soil remediation activities in response to COVID-19. Adjusted EBITDA decreased by $9.7 million to $16.4 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, predominately attributable to the previously described change in revenue. Adjusted EBITDA margin was 12.4% for the three months ended December 31, 2020, a decrease of 500 basis points from Adjusted EBITDA margin realized of 17.4% for the three months ended December 31, 2019. The decrease in margin is primarily attributable to the impact of the change in revenue volume and mix described above. Adjusted EBITDA decreased by $12.1 million to $91.6 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, predominately attributable to the previously described change in revenue. Adjusted EBITDA margin was 17.4% for the year ended December 31, 2020, a decrease of 200 basis points from 19.4% Adjusted EBITDA margin realized for the year ended December 31, 2019. The first quarter of the prior year benefited from several high margin specialty projects that did not repeat in the current year. Also, delays in the acquisition of planned equipment purchases to support the growth of the infrastructure and soil remediation business resulted in increased equipment rental costs in the first quarter of the current year as compared to the prior year. The Adjusted EBITDA margin contraction compared to the prior period was primarily attributable to these items and the impact of the change in revenue volume and mix described above, partially offset by the impact of margin accretive acquisitions. Liquid Waste Segment Revenue increased by $19.3 million to $111.1 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. Acquisitions completed since October 1, 2019, drove approximately $28.6 million in increased revenue. Offsetting the contribution from acquisitions was an organic revenue decline of $8.5 million, due primarily to reduced industrial collection and processing activity resulting from the temporary suspension of certain customers’ operations in response to COVID-19. Lower sales volume of UMO also contributed to the decrease in revenue, although the impact of reduced volumes was partially offset by improved net selling prices. Despite the lower gross selling prices for UMO attributed to the declines in the indices on which our selling prices are based, net selling prices increased 27.5% compared to the prior year period as a result of adjusting the amounts that are paid or charged to the UMO generators at the time of collection. 68 Table of Contents Revenue increased by $61.7 million to $412.3 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. Acquisitions completed since January 1, 2019, drove approximately $118.1 million in increased revenue. Offsetting the contribution from acquisitions was an organic revenue decline of $56.5 million, due primarily to a combination of lower sales volume of UMO and reduced industrial collection and processing activity resulting from the temporary suspension of certain customers’ operations in response to COVID-19. Despite the lower gross selling prices for UMO attributed to the declines in the indices on which our selling prices are based, net selling prices were relatively comparable to the prior year as a result of adjusting the amounts that are paid or charged to the UMO generators at the time of collection. Adjusted EBITDA increased by $10.0 million to $26.1 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019, predominately attributable to the previously described change in revenue. Adjusted EBITDA margin was 23.5% for the three months ended December 31, 2020, an increase of 600 basis points from the Adjusted EBITDA margin realized for the three months ended December 31, 2019. The margin expansion period over period is primarily attributable to the impact of cost control measures implemented to offset the impact of COVID-19, related volume decreases and margin accretive acquisitions partially offset by lower sales volumes of UMO. Adjusted EBITDA increased by $18.0 million to $97.5 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, predominately attributable to the previously described change in revenue. Adjusted EBITDA margin was 23.6% for the year ended December 31, 2020, an increase of 90 basis points from the Adjusted EBITDA margin realized for the year ended December 31, 2019. The margin expansion period over period is primarily attributable to the impact of cost control measures implemented to offset the impact of COVID-19, related volume decreases and margin accretive acquisitions partially offset by lower sales volumes of UMO. Corporate Corporate costs increased by $15.5 million to $30.7 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase was predominately attributable to additional headcount and overhead costs to support the growth in the business, including additional insurance costs associated with being a public company. Corporate costs as a percentage of total revenue were 2.5% for the three months ended December 31, 2020, an increase of 80 basis points compared to corporate costs as a percentage of total revenue for the three months ended December 31, 2019. Corporate costs increased by $34.0 million to $90.2 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase was attributable to additional headcount and overhead costs to support the growth in the business, including additional insurance costs associated with being a public company. Corporate costs as a percentage of total revenue were 2.1% for the year ended December 31, 2020, an increase of 40 basis points compared to corporate costs as a percentage of total revenue for the year ended December 31, 2019. Tangible Equity Units On March 5, 2020, we completed our offering of 15,500,000 6.00% TEUs for total gross proceeds of $1,040.7 million (US$775.0 million). Each TEU, which has a stated amount of US$50.00, is comprised of a Purchase Contract and an Amortizing Note due March 15, 2023, both of which are freestanding instruments and separate units of account. Amortizing Notes are classified as a financial liability held at cost. The Purchase Contracts are accounted for as prepaid forward contracts to deliver a variable number of equity instruments equal to a fixed dollar amount, subject to a cap and floor. The value allocated to the Amortizing Notes is reflected as a financial liability in the Annual Financial Statements with payments expected in the next twelve months reflected in the current portion of TEUs. The value allocated to the Purchase Contracts is reflected as a derivative financial liability. The Purchase Contracts are subsequently measured at fair value through profit or loss. The fair value of the Purchase Contracts is based on the trading price of the Purchase Contracts to the extent an active market exists, otherwise a valuation model is used. Each Amortizing Note has an initial principal amount of US$8.5143 and bears interest at 4.00% per year. On each of March 15, June 15, September 15, and December 15, the Company will pay equal quarterly cash instalments of US$0.7500 per Amortizing Note (except for the June 15, 2020 instalment payment, which was US$0.8333 per Amortizing Note), which cash payment in aggregate 69 Table of Contents will be the equivalent of 6.00% per year with respect to each US$50.00 stated amount of the TEUs. Each instalment constitutes a payment of interest and a partial payment of principal. Unless settled earlier, on March 15, 2023 each Purchase Contract will automatically settle for subordinate voting shares. Upon settlement of a Purchase Contract, the Company will deliver not more than 2.6316 subordinate voting shares and not less than 2.1930 subordinate voting shares, subject to adjustment, based on the Applicable Market Value (as defined herein) of the Company’s subordinate voting shares as described below: ● If the Applicable Market Value is greater than the threshold appreciation price, which is US$22.80, holders will receive 2.1930 subordinate voting shares per Purchase Contract; ● If the Applicable Market Value is less than or equal to the threshold appreciation price but greater than or equal to the reference price, which is US$19.00, the holder will receive a number of subordinate voting shares per Purchase Contract equal to US$50.00, divided by the Applicable Market Value; and ● If the Applicable Market Value is less than the reference price, the holder will receive 2.6316 subordinate voting shares per Purchase Contract. The Applicable Market Value is defined as the arithmetic average of the volume weighted average price per share of the Company’s subordinate voting shares over the twenty consecutive trading day period immediately preceding March 15, 2023. B. Liquidity and Capital Resources We intend to meet our currently anticipated capital requirements through cash flow from operations and borrowing capacity under our Revolving Credit Facility. We expect that these sources will be sufficient to meet our current operating capital needs, pay our dividend and fund certain tuck in acquisitions consistent with our strategy. As a result of our IPO on March 5, 2020, we have significantly de-levered our balance sheet and have no material debt maturities until May 31, 2025, other than our Revolving Credit Facility which matures on November 24, 2024. Our ability to fund operating expenses, capital expenditures and future debt service requirements will depend on, among other things, our future operating performance, which will be affected by general economic, financial and other factors including COVID-19 and other factors beyond our control. ​ As at December 31, 2020, we had: ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ Maturity Date ​ December 31, 2020 Cash on hand N/A ​ $ 27.2 Outstanding under our Revolving Credit Facility November 24, 2024 ​ 148.8 Term Loan Facility May 31, 2025 ​ 1,671.6 4.250% 2025 Secured Notes(1)(3) June 1, 2025 ​ 636.6 3.750% 2025 Secured Notes(1)(3) ​ August 1,2025 ​ 954.9 5.125% 2026 Secured Notes(1)(3) ​ December 15, 2026 ​ 636.6 3.500% 2028 Secured Notes(1)(3) ​ September 1, 2028 ​ 954.9 8.500% 2027 Notes(2)(3) ​ May 1, 2027 ​ 458.4 4.000% 2028 Notes(2)(3) ​ August 1,2028 ​ 636.6 Equipment loans and other ​ various ​ ​ 9.2 (1) The 4.250% 2025 Secured Notes, the 3.750% 2025 Secured Notes, the 5.125% 2026 Secured Notes and the 3.500% 2028 Secured Notes are collectively referred to as the “Secured Notes”. (2) The 8.500% 2027 Notes and 4.000% 2028 Notes are collectively referred to as the ”Unsecured Notes”. (3) The Secured Notes and Unsecured Notes are collectively referred to as the “Notes”. 70 Table of Contents Cash Flows Cash Flows for the three months and the year ended December 31, 2020 compared to the three months and the year ended December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ​ ​ ​ ​ ($millions) ​ December 31, 2020 ​ December 31, 2019(1) ​ Change ​ % Cash flows from operating activities ​ $ 163.5 ​ $ 133.0 ​ $ 30.5 22.9 % Cash flows used in investing activities ​ (2,893.8) ​ (227.7) ​ (2,666.1) 1,170.9 ​ Cash flows from financing activities ​ 974.1 ​ 666.0 ​ ​ 308.1 46.3 ​ (Decrease) increase in cash ​ (1,756.2) ​ 571.3 ​ ​ Changes due to foreign exchange revaluation of cash ​ (33.8) ​ 3.5 ​ ​ Cash, beginning of period ​ 1,817.2 ​ — ​ ​ Cash, end of period ​ $ 27.2 ​ $ 574.8 ​ ​ (1) The Results of Operations and the Liquidity and Capital Resources sections of the IPO Prospectus provide analysis of results for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 to which there have been no material changes in the results or analysis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended Year ended ​ ​ ​ ​ ​ ($millions) ​ December 31, 2020 ​ December 31, 2019(1) ​ Change % Cash flows from operating activities ​ $ 502.2 ​ $ 251.0 ​ $ 251.2 100.1 % Cash flows used in investing activities ​ (4,353.5) ​ (1,158.3) ​ (3,195.2) 275.9 ​ Cash flows from financing activities ​ 3,338.3 ​ 1,470.5 ​ ​ 1,867.8 127.0 ​ (Decrease) increase in cash ​ (513.0) ​ 563.2 ​ ​ ​ ​ ​ ​ Changes due to foreign exchange revaluation of cash ​ (34.6) ​ 4.2 ​ ​ ​ ​ ​ ​ Cash, beginning of period ​ 574.8 ​ 7.4 ​ ​ ​ ​ ​ ​ Cash, end of period ​ $ 27.2 ​ $ 574.8 ​ ​ ​ ​ ​ ​ (1) The Results of Operations and the Liquidity and Capital Resources sections of the IPO Prospectus provide analysis of results for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 to which there have been no material changes in the results or analysis. Operating Activities Cash from operating activities increased by $30.5 million to $163.5 million for the three months ended December 31, 2020, compared to $133.0 million for the three months ended December 31, 2019. This increase was predominantly attributable to an increase in Adjusted EBITDA offset by lower contributions from non-cash working capital and higher cash interest paid during the three months ended December 31, 2020. Changes in non-cash working capital items resulted in a source of cash of $56.6 million for the three months ended December 31, 2020, as compared to a source of cash of $127.2 million of cash for the three months ended December 31, 2019. The period over period change was primarily attributable to a use of cash of $137.2 million in accounts receivable as a result of working capital investments relating to acquisitions offset by improved collection results, a source of cash of $46.8 million in accounts payable and accrued liabilities due to timing of payments to vendors and acquisition working capital and a source of cash of $19.4 million in prepaid expenses and other assets. Cash from operating activities increased by $251.2 million to $502.2 million for the year ended December 31, 2020, compared to $251.0 million for the year ended December 31, 2019. Included in the current year is $152.8 million of IPO related transaction costs (comprised of $73.8 million prepayment penalties, $46.2 million IPO transaction costs, $30.2 million prepayment premium and a $2.6 million net realized foreign exchange loss on repayment of debt). Excluding these IPO related payments, operating activities were a source of $655.0 million of cash during the year ended December 31, 2020, a $404.0 million increase compared to the year ended December 31, 2019. The increase was predominately attributable an increase in Adjusted EBITDA and improvements in working capital. Changes in non-cash working capital items resulted in a source of cash of $5.2 million for the year ended December 31, 2020, compared to a use of cash of $74.9 million for the year ended December 31, 2019. The period over period change was primarily 71 Table of Contents attributable to a use of cash of $20.4 million in accounts receivable as a result of working capital investments relating to acquisitions offset by improved collection results, a source of cash of $70.1 million in accounts payable and accrued liabilities due to timing of payments to vendors and acquisition working capital and a source of cash of $30.1 million in prepaid and other assets. Investing Activities Cash used in investing activities increased by $2,666.1 million to $2,893.8 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase is predominately related to acquisition expenditures of $2,776.7 million for the three months ended December 31, 2020, as compared to acquisition expenditures of $85.5 million for the three months ended December 31, 2019. Capital expenditures decreased by $21.3 million to $122.6 million for the three months ended December 31, 2020, as compared to capital expenditures of $143.9 million for the three months ended December 31, 2019. Cash used in investing activities increased by $3,195.2 million to $4,353.5 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase is predominately related to acquisition expenditures of $3,941.2 million for the year ended December 31, 2020, as compared to acquisition expenditures of $721.3 million for the year ended December 31, 2019. Capital expenditures decreased by $29.5 million to $428.3 million for the year ended December 31, 2020, compared to capital expenditures of $457.8 million for the year ended December 31, 2019. Financing Activities Cash from financing activities increased by $308.1 million to $974.1 million for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. The increase is predominately related to the amount of long term debt issued during the periods, including the issuance of the 4.000% 2028 Notes and the 3.500% 2028 Secured Notes as well as the issuance of preferred shares of $785.1 million during the three months ended December 31, 2020. The increase was partially offset by an increase in repayments of long term debt of $778.6 million, including the 7.000% 2026 Notes and a portion of the Term Loan Facility, for the three months ended December 31, 2020, compared to the three months ended December 31, 2019. In addition, there were payments relating to the Amortizing Notes of $13.4 million, contingent purchase consideration of $19.7 million and dividends of $4.4 million in the three months ended December 31, 2020. Cash from financing activities increased by $1,867.8 million to $3,338.3 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase is predominately related to the issuance of $4,042.7 million of share capital, $1,006.9 million of TEUs and the incremental amount of long term debt issued during the period, including the issuance of the 4.250% 2025 Secured Notes, 3.750% 2025 Secured Notes, 4.000% 2028 Notes and the 3.500% 2028 Secured Notes for the year ended December 31, 2020. The increase was partially offset by an increase in repayments of long-term debt of $4,630.4 million for the year ended December 31, 2020, compared to the year ended December 31, 2019. In addition, there were payments relating to the Amortizing Notes of $42.8 million, contingent purchase consideration of $31.1 million and dividends of $13.1 million in the year ended December 31, 2020. Available Sources of Liquidity Revolving Credit Facility General We entered into the Sixth Amended and Restated Credit Agreement, dated as of November 24, 2020, with a syndicate of lenders (the “Revolving Credit Agreement”) to, among other things, (i) amend the applicable margins to a pricing grid based upon a leverage ratio, which resulted in a reduction of the then applicable margin by 50 basis points, (ii) extend the maturity date to November 24, 2024 and (iii) conform certain terms of the Revolving Credit Agreement to our other long term debt arrangements. Under the Revolving Credit Agreement, we have access to (i) a $628.0 million revolving credit facility (available in Canadian and US dollars), (ii) a $120.0 million letter of credit facility (available in Canadian and US dollars) and (iii) an aggregate US$40.0 million in revolving credit facilities (available in US dollars). 72 Table of Contents Interest Rates, Fees, and Payments Under the terms of the facilities under the Revolving Credit Agreement (the “Revolving Credit Facility”), interest rates and margins charged on advances, letters of credit and standby fees are based on GFL’s ratio of Net Funded Debt to Adjusted EBITDA as of the end of the most recently completed fiscal quarter or fiscal year end: 1) Margins on Bankers’ Acceptances, Bankers’ Acceptance Equivalent Advance, LIBOR rate advance and Letter of Credit fees, between 1.75% to 2.75% per annum, depending on the mechanism used to draw the funds. 2) Margins on Canadian Rate and US Base Rate loans are currently between 0.75% to 1.75% per annum, depending on the mechanism used to draw the funds. 3) Commitment Fee Rate between 0.25% and 0.675% per annum. In the event that the London interbank offered rate is no longer available or used for determining the interest of loans, then the administrative agent under the Revolving Credit Facility and the Company will negotiate to replace the rate of interest applying to LIBOR rate advances with loans using an alternate benchmark rate, giving due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time. Advances bearing interest based on Canadian Rate or US Base Rate may be prepaid at any time without penalty with written notice one day in advance. Prepayment of Bankers Acceptances and LIBOR rate advances requires two and three days’ written notice, respectively. Covenants The Revolving Credit Agreement also contains customary negative covenants including, but not limited to, restrictions on our ability and each of the Revolving Credit Facility guarantors to make certain distributions, merge, consolidate and amalgamate with other companies, make certain investments, undertake asset sales, provide certain forms of financial assistance, incur indebtedness or have any outstanding financial instruments other than certain permitted indebtedness and grants, liens and security interests on, hypothecate, charge, pledge or otherwise encumber their assets other than certain permitted encumbrances. The Revolving Credit Agreement contains customary affirmative covenants including, but not limited to, delivery of financial and other information to the lenders, notice to the lenders upon the occurrence of certain material events, maintenance of insurance, maintenance of existence, payment of taxes and other claims, maintenance of properties, access to books and records by the lenders, compliance with applicable laws and regulations and further assurances. Our Revolving Credit Facility contains a financial maintenance covenant. The covenant (which applies only when the Revolving Credit Facility is drawn at or above 35% of the Revolving Credit Facility limit) is a ratio of Total Net Funded Debt to Adjusted EBITDA (each as defined in the Revolving Credit Agreement) equal to or less than 8.00 to 1.00. Events of Default The Revolving Credit Agreement provides that, upon occurrence of one or more events of default, our obligations under the agreement and the credit facilities provided pursuant to its terms may be accelerated and the lending commitments under the agreement may be terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, change of control, bankruptcy proceedings, material money judgments, material adverse effect and other customary events of default. Security and Guarantees The Revolving Credit Facility is guaranteed by substantially all of our material wholly-owned Canadian and U.S. restricted subsidiaries (the “RCF Subsidiary Guarantors”) (subject to certain customary exceptions), including certain subsidiaries that are not guarantors of the 2027 Unsecured Notes or the 2028 Unsecured Notes. GFL and the RCF Subsidiary Guarantors have provided a first-ranking security interest to the lenders in substantially all present and after-acquired personal property and all other present and 73 Table of Contents future undertaking, tangible and intangible assets and certain real property (subject, in each case, to certain customary exceptions and exclusions). GFL has also pledged the shares of substantially all of its subsidiaries as collateral security and provided first-ranking mortgages or charges by way of a debenture. A pari passu first lien intercreditor agreement was entered into on September 30, 2016 among the administrative agent under the Revolving Credit Agreement, the administrative agent under the Term Loan Credit Agreement, GFL and the guarantors from time to time party thereto and joinders were entered into by the applicable trustee and applicable notes collateral agent under the Existing Secured Indentures, GFL and the guarantors party thereto, which together provide for, inter alia, customary provisions providing for the pari passu equal priority ranking of the security interests provided by GFL and the RCF Subsidiary Guarantors for the Revolving Credit Facility, the security interests provided by GFL and the TF Subsidiary Guarantors (as defined herein) for the Term Loan Facility, and the security interests provided by GFL and the guarantors of the Secured Notes for the Secured Notes. Term Loan Facility General We have a Term Loan Facility totaling US$1,312.9 million which matures on May 31, 2025 and bears interest at a rate of LIBOR plus 3.00% subject to a LIBOR floor of 0.50% or US prime plus 2.00%.We are party to a term facility credit agreement, dated as of September 30, 2016 (as amended as of May 31, 2018, November 14, 2018 and December 22, 2020, collectively. the “Term Facility Credit Agreement”), among us, each of our subsidiaries party thereto, Barclays Bank PLC, as administrative agent, the lenders party thereto and each other party thereto. On November 14, 2018, we entered into an amendment of the Term Facility Credit Agreement (the “Incremental Term Facility Amendment”) to provide for US$1,710.0 million of incremental term facilities (the “Incremental Term Facility”). Prior to our entrance into the Incremental Term Facility Amendment, the Term Facility Credit Agreement provided for a US dollar denominated term loan facility tranche of US$805.0 million, a US dollar denominated delayed draw term loan facility tranche of US$100.0 million (which was available to us until October 31, 2018 to fund acquisitions meeting certain criteria) (collectively, the “Term Loan Facility”) and an accordion option, pursuant to which we may incur an incremental tranche of indebtedness in an amount not to exceed (i) the greater of $400.0 million or 100% of consolidated EBITDA for the immediately preceding four consecutive fiscal quarters, plus (ii) additional amounts based on the maintenance of certain leverage ratios, plus (iii) the aggregate principal amount of all voluntary prepayments of any loans, except to the extent financed with the proceeds of long-term indebtedness (other than revolving indebtedness). We refer collectively to the Term Facility Credit Agreement and the Revolving Credit Agreement as the “Credit Agreements”. On March 5, 2020, we used a portion of the net proceeds of the IPO to repay US$523.0 million of the Term Loan Facility. On December 21, 2020, GFL used the net proceeds of the 3.500% 2028 Secured Notes issuance to repay US$744.3 million of the Term Loan Facility and completed the repricing of the balance of the Term Loan Facility by reducing the LIBOR floor from 1.00% to 0.50%. As of December 31, 2020, we had $1,671.6 million principal amount outstanding under the Term Loan Facility. Our Term Loan Facility matures on May 31, 2025. Interest Rates, Payments and Prepayments Under the original Term Facility Credit Agreement, the Term Loan Facility amortizes in equal quarterly instalments in an amount equal to 0.25% per annum of the original principal amount thereof, with the remaining balance due at final maturity. We may voluntarily prepay loans under our Term Loan Facility, in whole or in part, subject to minimum amounts, with prior notice, but without premium or penalty. Voluntary repayments are applied to the remaining scheduled installments of principal. As a result of the US$523.0 million repayment of the Term Loan Facility on IPO, GFL does not have an obligation to make additional mandatory repayments of principal for the Term Loan Facility until the remaining balance is due at final maturity. We must prepay our Term Loan Facility with 100% of the net cash proceeds of certain asset sales (such percentage to be subject to reduction to 50% and 0%, respectively, based on the achievement of a Total Net Leverage Ratio (as defined in the Term Facility Credit Agreement) of less than or equal to 5.50 to 1.00 and 4.75 to 1.00, respectively), the incurrence or issuance of specified indebtedness and 74 Table of Contents 50% of excess cash flow (such percentage to be subject to reduction to 25% and 0%, respectively, based on the achievement of Total Net First Lien Leverage Ratio (as defined in the Term Facility Credit Agreement) of less than or equal to 3.00 to 1.00 and 2.50 to 1.00, respectively), in each case, subject to certain exceptions and, in the case of the net cash proceeds of certain asset sales, reinvestment rights. Covenants Our Term Facility Credit Agreement contains customary negative covenants, including, but not limited to, restrictions on our and our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, make investments, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates. As at December 31, 2020 we were in compliance with all debt covenants under the Term Loan Facility. Events of Default Our Term Facility Credit Agreement provides that, upon the occurrence of certain events of default, our obligations under the agreement and our obligations under the Term Loan Facility may be accelerated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgements, material pension- plan events, certain change of control events and other customary events of default. Security and Guarantees Our obligations under our Term Loan Facility are guaranteed by substantially all of our wholly-owned material Canadian and U.S. restricted subsidiaries (the “TF Subsidiary Guarantors”) (subject to certain customary exceptions), including certain subsidiaries that are not guarantors of the 2022 Notes, the 2023 Notes, the 7.000% 2026 Notes, the 8.500% 2027 Notes or the Secured Notes. Our Term Loan Facility is secured by a first priority lien on substantially all of our and each TF Subsidiary Guarantors’ tangible and intangible assets and certain real property (subject to certain customary exceptions and exclusions) and a first priority pledge of all the capital stock of each direct, wholly-owned material restricted subsidiary directly held by GFL or any TF Subsidiary Guarantor (limited to 65% of the capital stock held by GFL or any TF Subsidiary Guarantor in any direct subsidiary thereof not organized under the laws of Canada or the United States (or any province or state thereof)) and first ranking mortgages or charges by way of debentures. A pari passu first lien inter-creditor agreement was entered into on September 30, 2016 among the administrative agent under the Revolving Credit Agreement, the administrative agent under the Term Facility Credit Agreement, GFL and the guarantors from time to time party thereto, which provides for, inter alia, customary provisions providing for the pari passu equal priority ranking of the security interests provided by GFL and the RCF Subsidiary Guarantors for the Revolving Credit Facility, on the one hand, and the security interests provided by GFL and the TF Subsidiary Guarantors for the Term Credit Facility, on the other hand. On December 16, 2019, in connection with our issuance of the Secured Notes, Computershare Trust Company N.A., as trustee and notes collateral agent, entered into a joinder to such first lien inter-creditor agreement. Notes The following table discloses the principal amount outstanding under our Notes, the related swaps outstanding and other material terms of the Notes as at December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note ​ Swap ​ ​ ​ ​ ​ ​ ​ Interest ​ Optional Redemption (1) Note ​ Outstanding ​ Amount ​ Issuance ​ Maturity ​ Payment ​ First Call ​ Redemption Description (USD) (USD) Date Date Dates Date Price (2) 4.250% 2025 Secured Notes ​ $ 500.00 ​ $ 500.00 ​ April 29, 2019 ​ June 1, 2025 June 1 and December 1 June 1, 2022 ​ 102.125 % 3.750% 2025 Secured Notes ​ $ 750.00 ​ N/A ​ August 24, 2020 ​ August 1, 2025 February 1 and August 1 August 1, 2022 ​ 101.875 % 5.125% 2026 Secured Notes ​ $ 500.00 ​ $ 500.00 ​ ​ December 16, 2019 ​ ​ December 15, 2026 June 15 and December 15 December 15, 2021 ​ 103.500 % 3.500% 2028 Secured Notes ​ $ 750.00 ​ N/A ​ ​ December 21, 2020 ​ ​ September 1, 2028 March 1 and September 1 N/A N/A ​ 8.500% 2027 Unsecured Notes ​ $ 360.00 ​ $ 348.00 ​ ​ April 23, 2019 ​ ​ May 1,2027 May 1 and November 1 ​ May 1, 2022 ​ 104.250 % 4.000% 2028 Unsecured Notes ​ $ 500.00 ​ $ 500.00 ​ ​ November 23, 2020 ​ ​ August 1, 2028 February 1 and August 1 ​ August 1, 2023 ​ 102.000 % (1) Prior to the First Call Date, each of the Notes (other than the 3.500% 2028 Secured Notes) are redeemable at a price equal to 100% of the principal amount plus a make-whole premium, together with accrued and unpaid interest. The 3.500% 2028 Secured Notes are redeemable on or after March 1, 2028 at a price equal to 100% of the principal amount plus a make-whole premium together with accrued and unpaid interest. 75 Table of Contents (2) For the 12 month period from and after the First Call Date, each of the Notes (other than the 3.500% 2028 Secured Notes) are redeemable at a price equal to 100% of the principal amount plus 50% of the original coupon of the applicable Notes. For the 12 month period from and after the first anniversary of the First Call Date, the redemption price of the Notes is reduced to 100% of the principal amount plus 25% of the original coupon. Thereafter, the Notes are redeemable at par. On March 5, 2020, the Company redeemed (i) US$270.0 million aggregate principal amount of the 7.000% 2026 Notes, and (ii) US$240.0 million aggregate principal amount of the 8.500% 2027 Notes. On November 27, 2020, the Company redeemed all of the outstanding 7.000% 2026 Notes. ​ Ranking The Unsecured Notes are our senior unsecured obligations and rank equally in right of payment to all of our existing and future senior unsecured debt and senior in right of payment to all of our future subordinated debt (if any). The Unsecured Notes are effectively subordinated to any of our and the guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt. The Secured Notes are our senior secured obligations and rank equally in right of payment to all of our existing and future senior secured debt and senior in right of payment to all of our future subordinated debt (if any). The Secured Notes are effectively senior to any of our and the guarantors’ existing and future unsecured debt to the extent of the value of the assets securing such debt. The guarantees of the Notes rank equally in right of payment with all of our subsidiary guarantors’ existing and future senior debt and senior in right of payment to all of our subsidiary guarantors’ future subordinated debt (if any). In addition, the Unsecured Notes are structurally subordinated to the liabilities of our non-guarantor subsidiaries, including certain subsidiaries that guarantee the Credit Agreements but do not guarantee the Unsecured Notes. Covenants The Unsecured Notes and the Secured Notes have been issued pursuant to separate indentures entered into between the Company and the note trustee (collectively, the “Indentures”). The Indentures entered into in respect of the Notes (other than in respect of the 2028 Secured Notes) contain customary covenants and restrictions on the activities of GFL, and its restricted subsidiaries and events of default for non-investment grade companies on the activities of GFL and its restricted subsidiaries, including, but not limited to, limitations on the incurrence of additional indebtedness; dividends or distributions in respect of capital stock or certain other restricted payments or investments; entering into agreements that restrict distributions from restricted subsidiaries; the sale or disposal of assets, including capital stock of restricted subsidiaries; transactions with affiliates; the incurrence of liens; and mergers, consolidations or the sale of substantially all of GFL’s assets. The Indenture entered into in respect of the 2028 Secured Notes (the “2028 Secured Indenture”) contains events of default, covenants, and restrictions on the activities of GFL and its restricted subsidiaries that are substantially similar to the other Indentures as such limitations relate to the incurrence of liens, the sale or disposal of assets and mergers, consolidations or the sale of substantially all of GFL’s assets. The 2028 Secured Indenture does not restrict the Company from incurring additional indebtedness or making restricted payments. As at December 31, 2020 we were in compliance with all debt covenants under the Indentures governing the Notes. Security Our Secured Notes are secured by a first priority lien on substantially all of our and each guarantors’ tangible and intangible assets and certain real property (subject to certain customary exceptions and exclusions) and a first priority pledge of all the capital stock of each direct, wholly-owned material restricted subsidiary directly held by GFL or any guarantor of the Secured Notes (limited to 65% of the capital stock held by GFL or any guarantors of the Secured Notes in any direct subsidiary thereof not organized under the laws of Canada or the United States (or any province or state thereof)) and will be secured by first ranking mortgages or charges by way of debentures. The Unsecured Notes are guaranteed by our material subsidiaries that, together with other entities, guarantee the Term Loan Facility. The Secured Notes are guaranteed by each of our subsidiaries that guarantee the Term Loan Facility and the Revolving Credit Facility. Paid In Kind (“PIK”) Notes On March 5, 2020, in connection with the pre-closing capital changes implemented as part of the IPO, certain existing shareholders of Holdings subscribed for additional non-voting shares at a fair market value price per share of US$19.00, the proceeds of which, together with a loan in an aggregate principal amount of $29.0 million from Sejosa Holdings Inc., an entity controlled by Patrick Dovigi, 76 Table of Contents were used to redeem in full the PIK Notes in an aggregate amount of $1,049.9 million plus redemption premiums and penalties. A loss on extinguishment of $59.4 million was recognized in interest expense and other finance costs in the year ended December 31, 2020. Included in this interest expense for the year ended December 31, 2020 is a 3.000% premium of $31.0 million for the early repayment of the PIK Notes as well as a loss on extinguishment of $28.4 million. Equipment Loans and Promissory Notes We have various equipment loan agreements which are secured by the specific assets under such loan. The interest rates for these obligations range from 3.02% to 4.37% per annum, while the respective maturity dates of such obligations extend into 2024. Hedging Arrangements We have entered into cross-currency swap contracts to fully hedge our exposure of the servicing of the 4.250% 2025 Secured Notes, the 5.125% 2026 Secured Notes, the 8.500% 2027 Notes and the 4.000% 2028 Notes and to changes in the value of the U.S. dollar. Our U.S. dollar denominated Term Loan Facility is hedged in the amount of $403.6 million as of December 31, 2020. Refer to the sections entitled Notes and Commodity price exposure in the Annual MD&A and Foreign currency risk in the Annual Financial Statements for additional information. In May 2020, we entered into a series of swap contracts to partially hedge our exposure of diesel fuel purchases in Canada and certain areas in the U.S. Research and Development, Patents and Licenses We do not engage in research and development, nor do we have any material patents or licenses. We have registered the “GFL Green for Life” and “Green Today Green for Life” trademark names and designs with the Canadian Intellectual Property Office and the U.S. Patent and Trademark Office. In addition, we hold a number of registered and unregistered trademarks including “GFL Environmental”, “GFL” and others accumulated as a result of our historical acquisitions. We believe that our trademarks and other intellectual property rights are important to our success and our competitive position, and that we have taken the appropriate steps to protect such rights. In particular, our registered trademarks and service marks are valuable assets that distinguish our brand and reinforce our consumers’ positive perception of our operations. Trend Information Other than as disclosed herein, in the Annual Financial Statements and the Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2020 to December 31, 2020 that are reasonably likely to have a material adverse effect on our total revenues, income (loss), profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition. Off-Balance Sheet Arrangements Performance Bonds We post performance bonds in favour of applicable governmental authorities as a condition of issuing some of our environmental compliance approvals for our permitted facilities. In addition, some municipal solid waste contracts and infrastructure and soil remediation projects may require us to post performance or surety bonds to secure our contractual performance. As of December 31, 2020, we had issued surety bonds totaling $1,697.4 million ($778.6 million as of December 31, 2019), of which approximately $108.5 million ($112.6 million as of December 31, 2019) is secured by a charge on the assets of certain subsidiaries. These performance and surety bonds are issued in the ordinary course of business and are not considered company indebtedness. Because we currently have no liability for these financial assurance instruments, they are not reflected in our consolidated statement of financial position. 77 Table of Contents Contractual Obligations Our contractual obligations consist of principal repayments and interest on long-term debt, equipment loans, lease obligations and Amortizing Notes. Our contractual obligations and commitments as of December 31, 2020 are shown in the following table. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ($millions) ​ Total ​ 1 year ​ 1-3 year ​ 4-5 year ​ Thereafter Long-term debt ​ $ 6,098.4 ​ $ — ​ $ — ​ $ 3,412.0 ​ $ 2,686.4 Interest on long-term debt ​ 1,591.7 ​ 274.3 ​ 548.5 ​ 475.0 ​ 293.9 Equipment loans and other ​ 9.2 ​ 4.6 ​ 0.8 ​ 3.8 ​ — Lease obligations ​ 241.0 ​ 39.8 ​ 93.3 ​ 46.0 ​ 61.9 Amortizing Notes ​ 133.2 ​ 59.2 ​ 74.0 ​ — ​ — ​ ​ $ 8,073.5 ​ $ 377.9 ​ $ 716.6 ​ $ 3,936.8 ​ $ 3,042.2 ​ Other Commitments We had letters of credit totaling approximately $133.8 million outstanding as of December 31, 2020 ($104.3 million as of December 31, 2019). These letters of credit primarily relate to performance-based requirements under our municipal contracts and financial assurances issued to government agencies for our operating permits. ​ Key Risk Factors GFL is exposed to a number of risk factors through the pursuit of strategic objectives and the nature of our operations which are outlined in the “Risk Factors” section of the Annual Report. Financial Instruments and Financial Risk GFL’s financial instruments consist of cash and cash equivalents, trade accounts receivable, trade accounts payable, long-term debt, and TEUs. The carrying value of GFL’s financial assets are equal to their fair values. The carrying value of our financial liabilities approximate their fair values with the exception of our Notes and the Amortizing Notes. The fair value hierarchy for our financial assets and liabilities not measured at fair value are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value as at December 31, 2020 Fair Value as at December 31, 2019 ​ ​ Quoted prices ​ Significant ​ Significant ​ Quoted prices ​ Significant ​ Significant ​ ​ in active ​ observable ​ unobservable ​ in active ​ observable ​ unobservable ​ ​ market ​ inputs ​ inputs ​ market ​ inputs ​ inputs ($millions) (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Notes ​ $ — ​ $ 4,454.3 ​ $ — ​ $ — ​ $ 3,092.3 ​ $ — Amortizing Notes ​ — ​ 126.8 ​ — ​ — ​ — ​ — Total debt ​ $ — ​ $ 4,581.1 ​ $ — ​ $ — ​ $ 3,092.3 ​ $ — ​ For more information on GFL’s financial instruments and related financial risk factors, see the Annual Financial Statements. ​ Market Rate Risk In the normal course of business, GFL is exposed to market risks, including changes in interest rates, certain commodity prices and U.S. currency rates. Interest rate exposure Our exposure to market risk for changes in interest rates relates primarily to our financing activities. As of December 31, 2020, we had $6,107.6 million of long-term debt excluding the impacts of accounting for debt issuance costs, discounts, and premiums as at December 31, 2020 and $7,675.7 million as at December 31, 2019. We had $1,820.4 million and $3,351,2 million of debt that was 78 Table of Contents exposed to changes in interest rates as at December 31, 2020, and as at December 31, 2019, respectively. To reduce our exposures to interest rate risk, the majority of GFL’s U.S. dollar denominated debt has a fixed coupon rate. A 100-basis point increase in the interest rate of our outstanding variable-rate debt obligations would increase our 2020 interest expense by $18.2 million and our 2019 interest expense by $33.5 million. Currency Rate Exposure We have operations in the United States. Where significant, we have quantified and described the impact of foreign currency translation on components of income (loss), including operating revenue and operating costs. A $0.01 change in the U.S. dollar to Canadian dollar exchange rate would impact our annual revenue and Adjusted EBITDA for the year ending December 31, 2020, by approximately $16.4 million, and $4.9 million, respectively (for the year ending December 31, 2019, $12.0 million and $3.3 million respectively, and for the year ending December 31, 2018, $3.1 million and $0.6 million, respectively). We use hedge agreements to manage a portion of our risks related to foreign exchange rates. While we are exposed to credit risk in the event of non-performance by counterparties to our hedge agreements, in all cases such counterparties are highly rated financial institutions and we do not anticipate non-performance. We do not hold or issue derivative financial instruments for trading purposes. We monitor our hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses over the unhedged fuel and variable rate debt positions Under derivatives and hedging guidance, the foreign exchange rate swap agreements are considered cash flow hedges for a portion of our U.S. dollar denominated debt. The notional amounts and all other significant terms of the swap agreements are matched to the provisions and terms of the U.S. dollar denominated debt being hedged. Commodity Price Exposure The market price of diesel fuel is unpredictable and can fluctuate significantly. Because of the volume of fuel we purchase each year, a significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, we periodically enter into fuel hedge agreements related to forecasted diesel fuel purchases, and we also enter into fixed price fuel purchase contracts. At December 31, 2020, we had fuel hedge agreements in place to manage a portion of this risk. We market a variety of recyclable materials, including cardboard, mixed paper, plastic containers, glass bottles and ferrous and aluminum metals. We own and operate recycling operations and sell other collected recyclable materials to third parties for processing before resale. To reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties. In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect would have had a $6.7 million, $2.4 million, and $2.4 million impact on revenues for the year ending December 31, 2020, 2019 and 2018, respectively. Other Related Party Transactions Included in due to related party is a non-interest bearing unsecured promissory note payable to Josaud Holdings Inc., an entity controlled by Patrick Dovigi, in an initial aggregate principal amount of $35.0 million, which is scheduled to mature on January 1, 2023. The note is being repaid in equal semi-annual instalments of $3.5 million. As at December 31, 2020, $17.5 million principal amount was outstanding on the note ($21.0 million as at December 31, 2019). Also included in due to related party is an interest bearing unsecured promissory note issued on March 5, 2020 payable to Sejosa Holdings Inc., an entity controlled by Patrick Dovigi, in an aggregate principal amount of $29.0 million and bearing market interests. The note is payable in equal semi-annual instalments of $2.9 million. The loan is scheduled to mature on March 5, 2025. As at December 31, 2020, $26.1 million principal amount was outstanding on the note ($nil as at December 31, 2019). These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. 79 Table of Contents On February 1, 2020, in connection with his resignation as an officer of GFL, the Company issued a director a separation payment of 73,947 subordinate voting shares issued at the IPO price of US$19.00. From time to time, GFL has entered into leases with entities controlled by affiliates of Patrick Dovigi, our Founder, Chief Executive Officer and a director of the Company as well as entities controlled by affiliates of another director of the Company (collectively, the “Related Parties”). To date, GFL leases four properties from the Related Parties. These leases are on arm’s length and commercially reasonable terms, and have been supported by rental rate comparisons prepared by third parties. None of the leased premises are material to the operations of GFL. For the year ended December 31, 2020, GFL paid $2.7 million ($1.6 million for the year ended December 31, 2019, $0.2 million for the seven month period ended December 31, 2018 and nil for the five month period ended May 31, 2018) in aggregate lease payments to the Related Parties. Compensation of key management personnel The remuneration of key management personnel consisted of salaries, short-term benefits and share based payments. During the year ended December 31, 2020 total salaries and short-term benefits and share based payments to key management personnel was $41.8 million ($3.9 million for the year ended December 31, 2019 and $59.3 million in the aggregate for the seven month period ended December 31, 2018 and the five month period ended May 31, 2018). Share Information Prior to the Initial Public Offering Prior to the completion of the IPO, our share capital consisted of an unlimited number of Voting Common shares, Class A Non-Voting Common shares, Class B Non-Voting Common shares, Class C Non-Voting Common shares, Class D Non-Voting Common shares, Class E Non-Voting Common shares, Class F Non-Voting Common shares, Class H Non-Voting Common shares, Class I Non-Voting Common shares, Class J Non-Voting Common shares and Class K Non-Voting Common shares. The Voting Common shares carried one vote per share. Immediately prior to the completion of the IPO, we had 100 Voting Common shares, 2,645,194,628 Class A Non-Voting Common shares, 1,034,959,042 Class B Non-Voting Common shares, 144,330,329 Class C Non-Voting Common shares, 7,000,000 Class D Non-Voting Common shares, 159,468,329 Class F Non-Voting Common shares, 621,597,135 Class H Non-Voting Common shares, 159,016,639 Class I Non-Voting Common shares, 339,608,745 Class J Non-Voting Common shares and 11,399,544 Class K Non-Voting Common shares issued and outstanding. In addition, there were 159,468,329 options issued and outstanding under the Company’s legacy stock option plan. Current Share Information GFL’s current authorized share capital consists of (i) an unlimited number of subordinate voting shares, (ii) an unlimited number of multiple voting shares, and (iii) an unlimited number of preferred shares. As of December 31, 2020, we had 314,300,421 subordinate voting shares, 12,062,964 multiple voting shares and 28,571,428 Series A perpetual convertible preferred shares (the “Preferred Shares”) issued and outstanding. All of the issued and outstanding multiple voting shares are, directly or indirectly, held or controlled by entities controlled by Patrick Dovigi. Preferred Shares The preferred shares are issuable at any time and from time to time in series. Each series of preferred shares shall consist of such number of preferred shares and having such rights, privileges, restrictions and conditions as determined by the Board of Directors prior to the issuance thereof. On October 1, 2020, GFL issued US$600.0 million of the Preferred Shares to funds managed by HPS Investment Partners, LLC (“HPS”). Pursuant to the terms of the private placement, HPS subscribed for 28,571,428 preferred shares at US$21.00 per share for gross proceeds of US$600.0 million. As at December 31, 2020, the Preferred Shares are convertible into 24,226,190 subordinate voting shares of the Company, representing approximately 7.2% of the issued and outstanding subordinate voting shares and 5.3% of the outstanding voting rights attached to the Company’s shares and based on a conversion price of US$25.20 per share. The holders of the Preferred Shares are entitled to vote on an as-converted basis on all matters on which holders of subordinate voting shares and multiple voting shares vote, and to the greatest extent possible, will vote with the holders of subordinate voting shares and multiple voting shares 80 Table of Contents as a single class. Each holder of Preferred Shares shall be deemed to hold, for the sole purpose of voting at any meeting of shareholders of the Company at which such holder is entitled to vote, the number of Preferred Shares equal to the number of subordinate voting shares into which such holder’s registered Preferred Shares are convertible as of the record date for the determination of shareholders entitled to vote at such shareholders meeting. The liquidation preference of the Preferred Shares accrete at a rate of 7.000% per annum, compounded quarterly. From and after the fourth anniversary of the issuance of the Preferred Shares, GFL will have the option each quarter to redeem a number of Preferred Shares in an amount equal to the increase in the liquidation preference for the quarter. This optional redemption amount can be satisfied in either cash or subordinate voting shares at the election of GFL. If GFL elects to pay the optional redemption amount for a particular quarter in cash, the accretion rate for that quarter will be 6.000% per annum. The Preferred Shares are subject to transfer restrictions, but can be converted into subordinate voting shares by the holder at any time. GFL may also require the conversion or redemption of the Preferred Shares at an earlier date in certain circumstances. Accounting Policies, Critical Accounting Estimates and Judgements We prepare our consolidated financial statements in accordance with IFRS. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. IFRS Measures Revenue The Company generates revenue through fees charged for the collection of solid waste including recyclables, from its municipal, residential and commercial and industrial customers. Revenues from these contracts are influenced by a variety of factors including collection frequency, type of service, type and volume or weight of waste and type of equipment and containers furnished to the customer. In addition to handling the Company’s own collected waste volumes, its transfer stations, MRFs, landfills and organic waste processing facilities generate revenue from tipping fees paid to the Company by municipalities and third-party haulers and waste generators and from the sale of recycled commodities. The Company also operates MRFs, transfer stations and landfills for municipal owners under a variety of compensation arrangements, including fixed fee arrangements or on a tonnage or other basis. Our municipal customer relationships are generally supported by contracts ranging from three to ten years. Our municipal collection contracts provide for fees based upon a per household, per tonne or ton, per lift or per service basis and often provide for annual price increases indexed to CPI and market costs for fuel. We provide regularly scheduled service to a large percentage of our commercial and industrial customers under contracts with three to five year terms with automatic renewals, volume-based pricing and CPI, fuel and other adjustments. Other commercial and industrial customers are serviced on an “on- call” basis. Certain future variable considerations of long-term customer contracts may be unknown upon entering into the contract, including the amount that will be billed in accordance with annual CPI, market costs for fuel and commodity prices. The amount to be billed is often tied to changes in an underlying base index such as a CPI or a fuel or commodity index, and revenue is recognized once the index is established for the future period. The Company does not disclose the value of unsatisfied performance obligations for these contracts as its right to consideration corresponds directly to the value provided to the customer for services completed to date and all future variable consideration is allocated to wholly unsatisfied performance obligations. The Company generates revenue through fees charged for the collection, management, transportation, processing and disposal of a wide variety of industrial and commercial liquid wastes. Revenue is primarily derived from fees charged to customers on a per service, volume and/or hour basis. Revenues from these contracts are influenced by a variety of factors including timing of contract, type of service, type and volume of liquid waste and type of equipment used. Revenue in the liquid waste business is also derived from the stewardship return incentives paid by most Canadian provinces in which the Company has liquid waste operations, as well as from the sale of UMO, solvents and downstream products to third parties. The fees received from third parties are based primarily on the market, type and volume of material sold. Generally, fees are billed and revenue is recognized at the time control is transferred. Revenue recognized under these agreements is variable in nature based on volumes and commodity prices at the time of sale, which are unknown at contract inception. 81 Table of Contents The Company earns revenue through fees collected for the excavation and transport of clean and contaminated soils and the remediation and disposal of contaminated and remediated soils. The Company also offers complementary civil, demolition, excavation and shoring services in its infrastructure business. In the soil remediation and infrastructure business, revenue is generated on a project basis, normally encompassing all of the above services. Fees charged for soil remediation and infrastructure contracts are determined based on the expected costs to complete each specific project. Revenue is recognized for these services based on the stage of completion of the contract, measured based on the expected remaining costs to complete the project. In cases where soil remediation services are sold outside of an infrastructure project, the fees for remediation and the related excavation operations are generated on a per tonne basis. In our liquid waste business, we collect, manage, transport, process and dispose of a wide variety of industrial and commercial liquid wastes (including contaminated waste water, UMO and downstream by-products), and resell liquid waste products (including UMO and downstream by-products). The majority of the liquid waste we handle is generated from a varied customer base. Our liquid waste business includes a broad range of both regularly scheduled and on-call liquid industrial and hazardous waste management services that we provide to municipal, commercial and industrial customers, UMO collection and resale and downstream by-product marketing, as well as the collection and transportation of hazardous and non-hazardous liquid wastes to our facilities for processing or bulking for shipment to a final disposal location. Our locations also include tank farms where we collect, temporarily store and/or consolidate waste streams for more cost-effective and efficient transportation to end users or to final recycling, treatment or disposal locations. Wherever possible, collected liquid waste (including UMO) is recycled and recovered for reuse often through provincial stewardship programs. The scale of our operations and breadth of our liquid waste services also allows us to cross-sell solid waste services to our liquid waste customers and liquid waste services to our infrastructure & soil customers in those markets where we operate these lines of business. Cost of Sales Cost of sales primarily consists of: direct labour costs and related benefits (which consist of salaries and wages, health and welfare benefit costs, incentive compensation and payroll taxes); transfer and disposal costs representing disposal fees paid to third-party disposal facilities and transfer stations; charges paid under leases for certain facilities; vehicle parking and container storage permits and facility operating costs; maintenance and repair costs relating to our vehicles, equipment and containers, including related labour and benefit costs; fuel, which includes the direct cost of fuel used by our vehicles and any mark-to market adjustments on fuel hedges; depreciation expense for property, and equipment used in our operations; amortization of landfill assets; amortization of intangible assets; and material costs paid for UMO and other recyclables purchased, including commodity rebates paid to customers. Other cost of sales include operating facilities costs, truck and equipment rentals, insurance, licensing and claims costs, and other third party services. Acquisition, rebranding and other integration costs included in cost of sales include rebranding and integration of property and equipment acquired through business acquisitions and other integration costs. Our cost of sales is principally affected by the volume of materials we handle. Selling, General and Administrative Expenses SG&A primarily consist of salaries, the cost of providing health and welfare benefits, incentive compensation and share-based payment expenses for corporate and general management, contract labour, and payroll taxes. Incentive compensation is generally based on our operating results and management’s assessment of individuals’ personal performance, with pay-out amounts subject to senior management discretion and board of director approval for senior management. Other costs in SG&A include selling and advertising, professional and consulting fees, facilities costs, depreciation expense for property and equipment used for selling, general and administrative activities, allowance for doubtful accounts and management information systems. Acquisition, integration and other costs include professional fees and integration costs associated with business acquisitions and other integration costs, including severance and restructuring costs. The timing of acquisitions and the related integration activities impact the timing of these costs. Interest and other finance costs Interest and other finance costs primarily relate to interest on indebtedness and includes the amortization of deferred financing fees incurred in connection with our indebtedness, other finance costs and accretion of landfill closure and post-closure obligations, which 82 Table of Contents represents the change in our obligation to fund closure and post-closure costs, as a result of the passage of time using discount factors that consider the risk free rate which is essentially free of default risk. Other (income) expense Other (income) expense primarily consists of gains and losses on the sale of assets used in our operations, gains and losses on foreign exchange, insurance settlements and deferred purchase price consideration that is required to be expensed under IFRS. Income Tax Recovery We are subject to income taxes in the jurisdictions in which we operate and, consequently, income tax expense or recovery is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events and the availability of our non-capital losses in various jurisdictions and legal entities. The primary regions that determine the effective tax rate are Canada and the United States. Income tax expense or recovery is comprised of current and deferred income taxes. The liability method is used to account for deferred tax assets and liabilities, which arise from temporary differences between the carrying amount of assets and liabilities recognized in the statements of financial position and their corresponding tax basis. The carry forward of unused tax losses and credits is recognized to the extent that it is probable it can be used in the future. Significant Accounting Estimates, Assumptions and Judgements In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Annual Financial Statements and the reported amounts of revenue and expenses during the reporting period. The following areas are the critical judgments and estimates that management has made in applying the Company’s accounting policies and that have the most significant effect on amounts recognized in the Annual Financial Statements: ● Determining fair value of acquired assets and liabilities in business combinations ● Determining key assumptions for impairment testing ● Estimating the percentage of completion for certain revenue arrangements ● Estimating the expected credit losses (“ECL”) related to trade and other receivables ● Forecasting future taxable income and the timing of reversal of temporary differences in connection with deferred income taxes ● Estimating the amount and timing of the landfill closure and post-closure obligations ● Estimating the useful lives of property and equipment and finite-life intangible assets ● Determining inputs into valuation models for equity-settled share-based payments ● Determining the mark-to-market valuation of the Purchase Contracts ● Determining the mark-to-market valuation of the hedging instruments Key components of the Annual Financial Statements requiring management to make estimates include the ECL in respect of receivables, the valuation of inventories, the useful lives of long-lived assets, the potential impairment of goodwill and indefinite life intangible assets, the valuation of property and equipment, the fair value of the cash flow hedges, the fair value of the fuel hedges, the fair value of the net assets acquired in business combinations, stock-based compensation, AROs, liabilities under legal contingencies, insurance related liabilities and Purchase Contract market valuation. 83 Table of Contents Management continually evaluates the estimates and assumptions it uses. These estimates and assumptions are based on management’s historical experience, best knowledge of current events including COVID-19 and conditions and activities that we may undertake in the future. Actual results could differ from these estimates. While disruption to operations may occur in the coming months, currently there is no indication of business impact that would warrant GFL modifying its estimates, assumptions or judgement at this time. GFL continues to monitor the ongoing situation resulting from COVID-19. Refer to the section entitled “Risk Factors” included in the Annual Report for further information. Credit Risk Our principal financial assets that expose us to credit risk are accounts receivable. Credit risk on accounts receivable is minimized due to our large and diverse customer base. We maintain allowances for losses based on the expected collectability of accounts receivable based on our prior experience and assessment of the current economic environment. We regularly review our bad debt expense. As of December 31, 2020, we determined that any ECL was not material. We use a forward-looking ECL model to determine impairment of financial assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that we expect to receive. We will consider the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that accounts receivable that meet either of the following criteria are generally not recoverable: ● the customer is insolvent; ● our relationship with the customer has been severed; and/or ● the customer’s receivable has aged beyond a reasonable period. We will determine to write off a customer’s receivable balance if the customer is determined to be in default. Intangible Assets Intangible assets include a soil license, customer lists, license agreements, municipal contracts, non-compete agreements, and Certificates of Approval or Environmental Compliance Approvals (“C of As”). The C of As provide us with certain waste management rights in the province or state of issue. The valuation assigned on acquisition to each intangible asset is based on the present value of management’s estimate of the future cash flows associated with the intangible asset or the amount of cash paid. We use our internal budgets in estimating future cash flows. These budgets reflect our current best estimate of future cash flows but may change due to uncertain competitive and economic market conditions or changes in business strategies. Changes or differences in these estimates may result in changes to intangible assets on the consolidated statement of financial position and a change to operating income or loss on the consolidated statement of operations. Property and Equipment are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If the possibility of impairment is indicated, we will estimate the recoverable amount of the asset and record any impairment loss in the consolidated statement of operations. Factors that most significantly influence the impairment assessments and calculations are management’s estimates of future cash flows. Financial Instruments Financial assets and liabilities are recognized initially at fair value plus or minus transaction costs, except for financial instruments at fair value through profit or loss (“FVTPL”), for which transaction costs are expensed. Debt financial instruments are subsequently measured at FVTPL, fair value through other comprehensive income (“FVTOCI”), or amortized cost using the effective interest method. We determine the classification of its financial assets based on our business model for managing the financial assets and whether the instruments’ contractual cash flows represent solely payments of principal and interest on the principal amount outstanding. Our derivatives designated as a hedging instrument in a qualifying hedge relationship are subsequently measured at FVTOCI. Equity instruments that meet the definition of a financial asset, if any, are subsequently measured at FVTPL or elected irrevocably to be classified at FVTOCI at initial recognition. Financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL in certain circumstances or when the financial liability is designated as such. For financial liabilities that are designated as FVTPL, the amount of 84 Table of Contents change in the fair value of the financial liability that is attributable to changes in our own credit risk of that liability is recognized in other comprehensive income or loss unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income or loss would create or enlarge an accounting mismatch in the consolidated statement of operations. The remaining amount of change in the fair value of the liability is recognized in the consolidated statement of operations. Changes in fair value of a financial liability attributable to our own credit risk that are recognized in other comprehensive income or loss are not subsequently reclassified to the consolidated statement of operations; instead, they are transferred to retained earnings (deficit), upon de-recognition of the financial liability. Derivative financial instruments are utilized by us occasionally in the management of our foreign currency and interest rate exposures. Our policy is not to utilize derivative financial instruments for trading or speculative purposes. Derivatives embedded in non-derivative host contracts are separated when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at fair value through profit or loss. All derivative financial instruments are recognized at fair value with changes in fair value recognized in the consolidated statement of operations or through other comprehensive income when qualified hedging relationship exists. Landfill Asset The original costs of landfill assets, together with incurred and projected landfill construction and development costs are amortized on a per unit basis as landfill airspace is consumed. We amortize landfill assets over their total available disposal capacity representing the sum of estimated permitted airspace capacity, plus future permitted airspace capacity which represents an estimate of airspace capacity that management believes is probable of being permitted based on certain criteria. We have been successful in receiving approvals for expansions pursued; however, there can be no assurance that the Company will be successful in obtaining approvals for landfill expansions in the future. ​ The following table summarizes landfill amortization expense on a per tonne basis for the periods indicated: ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ​ ​ December 31, 2020 ​ December 31, 2019 Amortization of landfill airspace ($millions) ​ $ 47.0 ​ 66.7 Tonnes received (millions of tonnes) ​ ​ 3.7 ​ 1.5 Average landfill amortization per tonne ($millions) ​ $ 12.7 44.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor ​ Predecessor ​ ​ ​ Period ended Period ended ​ Year ended Year ended December 31,2018 May 31, 2018 ​ ​ December 31,2020 ​ December 31,2019 ​ (214 days) ​ (151 days) Amortization of landfill airspace ($millions) ​ $ 111.8 ​ $ 126.9 ​ $ 37.0 ​ $ 13.6 Tonnes received (millions of tonnes) ​ 8.3 ​ 6.1 ​ 1.6 ​ 0.5 Average landfill amortization per tonne ($millions) ​ $ 13.5 ​ $ 20.8 ​ $ 23.8 ​ $ 25.2 ​ Unique per-tonne amortization rates are calculated for each of our landfills and the rates can vary significantly due to regional differences in construction costs and regulatory requirements for landfill development, capping, closure and post closure activities. The amortization of landfill airspace for the three months and year ended December 31, 2020 did not include $231.7 million of amortization related to the difference between the ARO obligation calculated using the credit-adjusted, risk-free discount rate required for measurement of the ARO obligation through purchase accounting, compared to the risk-free discount rate required for annual valuations. This accounting adjustment does not impact the economics of the average landfill amortization per tonne. In general, the per-tonne amortization rates for the landfills we acquired through the WCA and the WM/ADS acquisitions were lower than the per-tone amortization rates of our base business. The three months and year ended December 31, 2019 included a $35.0 million one-time adjustment, which if excluded, would result in an average landfill amortization per tonne of $14.9 and $15.1 respectively. 85 Table of Contents Landfill Development Costs Landfill development costs include costs of acquisition, construction associated with excavation, liners, site berms, groundwater monitoring wells, gas recovery systems and leachate collection systems. We estimate the total costs associated with developing each landfill site to its final capacity. Total landfill costs include the development costs associated with expansion airspace as described below. Landfill development costs depend on future events and thus actual costs could vary significantly from our estimates. Material differences between estimated and actual development costs may affect our cash flows by increasing our capital expenditures and thus affect our results of operations by increasing our landfill amortization expense. Landfill Closure and Post-Closure Obligations We recognize the estimated liability for final capping, closure and post-closure maintenance obligations that results from acquisition, construction, development or normal operations as airspace is consumed. Costs associated with capping, closing and monitoring a landfill or portions thereof after it ceases to accept waste, are initially measured at the discounted future value of the estimated cash flows over the landfill’s operating life, representing the period over which the site receives waste. This value is capitalized as part of the cost of the related asset and amortized over the asset’s useful life. Estimates are reviewed at least once annually and consider, amongst other things, regulations that govern each site. We estimate the fair value of landfill closure and post-closure costs using present value techniques that consider and incorporate assumptions and considerations marketplace participants would use in the determination of those estimates, including inflation, markups, inherent uncertainties due to the timing of work performed, information obtained from third parties, quoted and actual prices paid for similar work and engineering estimates. Inflation assumptions are based on evaluation of current and future economic conditions and the expected timing of these expenditures. Fair value estimates are discounted applying the risk-free rate, which is a rate that is essentially free of default risk. In determining the risk-free rate, consideration is given to both current and future economic conditions and the expected timing of expenditures. Significant reductions in our estimates of remaining lives of our landfills or significant increases in our estimates of landfill final capping, closure and post-closure maintenance costs could have a material adverse effect on our financial condition and results of operations. Additionally, changes in regulatory or legislative requirements could increase our costs related to our landfills, resulting in a material adverse effect on our financial condition and results of operations. Landfill Capacity and Depletion Our internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at our landfills. Our landfill depletion rates are based on the total available disposal capacity, considering both permitted and probable future permitted airspace. Future permitted airspace capacity, represents an estimate of airspace capacity that is probable of being permitted based on the following criteria: ● Personnel are actively working to obtain the permit or permit modifications necessary for expansion of an existing landfill, and progress is being made on the project; ● It is probable that the required approvals will be received within the normal application and processing periods for approvals in the jurisdiction in which the landfill is located; ● We have a legal right to use or obtain land associated with the expansion plan; ● There are no significant known political, technical, legal or business restrictions or issues that could impair the success of the expansion effort; ● Management is committed to pursuing the expansion; and ● Additional airspace capacity and related costs have been estimated based on the conceptual design of the proposed expansion. 86 Table of Contents As of December 31, 2020, we had 328.5 million tonnes (113.5 million tonnes for the year ended December 31, 2019) of remaining permitted capacity at the landfills we own and at the landfill in Quebec where we have designated access to a fixed level of capacity. During the year ended December 31, 2020, permitted capacity net increased due to the acquisition of landfills through business combinations. As of December 31, 2020, fourteen of our landfills satisfied the criteria for inclusion of probable expansion capacity, resulting in additional expansion capacity of 140.6 million tonnes, and together with remaining permitted capacity, our total remaining capacity is 469.1 million tonnes (116.4 million tonnes for the year ended December 31, 2019). Based on total capacity as of December 31, 2020 and projected annual disposal volumes, the weighted average remaining life of the landfills we own and at the landfill in Quebec where we have designated access to a fixed level of capacity is approximately 25.0 years (19.0 years as of the year ended December 31, 2019). We have other expansion opportunities that could extend the weighted average remaining life of our landfills. We may be unsuccessful in obtaining permits for future airspace capacity at our landfills. In such cases, we will charge the previously capitalized development costs to expense. This will adversely affect our operating results and cash flows and could result in greater landfill amortization expense being recognized on a prospective basis. We periodically evaluate our landfill sites for potential impairment indicators. Our judgements regarding the existence of impairment indicators are based on regulatory factors, market conditions and operational performance of our landfills. Future events could cause us to conclude that impairment indicators exist and that our landfill carrying costs are impaired. Any resulting impairment loss could have a material adverse effect on our financial condition and results of operations. Goodwill and Indefinite Life Intangible Assets The valuation assigned on acquisition to each indefinite life intangible asset is based on the present value of management’s estimate of the future cash flows associated with the intangible asset or the amount of cash paid. We perform impairment testing annually for goodwill and indefinite-life intangible assets and when circumstances indicate these assets may be impaired. Management judgement is involved in determining if there are circumstances indicating that testing for impairment is required, and in identifying cash generating units (“CGUs”) for the purpose of impairment testing. We assess impairment by comparing the recoverable amount of a long-lived asset, CGU, or CGU group to its carrying value. We test for impairment at the operating segment level. The recoverable amount is defined as the higher of (i) value in use, or (ii) fair value less costs of disposal. The determination of the recoverable amount involves significant estimates and assumptions, including those with respect to market multiples, future cash inflows and outflows, discount rates, growth rates and asset lives. These estimates and assumptions could affect our future results if the current estimates of future performance and fair values change. These determinations will affect the amount of amortization expense on definite-life intangible assets recognized in future periods. Leases Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: ● fixed payments (including in-substance fixed payments), less any lease incentives receivable; ● variable lease payments that are based on an index or a rate; ● amounts expected to be payable by the lessee under residual value guarantees; ● the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and ● payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. 87 Table of Contents As the interest rate implicit in GFL’s leases is typically not readily determinable, GFL utilizes its weighted average incremental borrowing rate to discount the lease payments. Right-of-use assets are measured at cost comprising the following: ● the amount of the initial measurement of lease liability; ● any lease payments made at or before the commencement date less any lease incentives received; ● any initial direct costs; and ● restoration costs. Tangible Equity Units The Amortizing Notes are classified as a financial liability held at amortized cost. The Purchase Contracts are accounted for as prepaid forward contracts to deliver a variable number of equity instruments equal to a fixed dollar amount, subject to a cap and floor. The value allocated to the Amortizing Notes is reflected as a financial liability in the Annual Financial Statements with payments expected in the next twelve months reflected in the current portion of TEUs. The value allocated to the Purchase Contracts is reflected as a derivative financial liability. The Purchase Contracts are subsequently measured at fair value through profit or loss. The fair value of the Purchase Contracts of the TEUs is based on the trading price of the Purchase Contracts to the extent an active market exists, otherwise a valuation model is used. Preferred Shares The Preferred Shares are classified as equity as GFL has no contractual obligation to deliver cash or other assets to the holders of the Preferred Shares in a situation that is unfavourable to GFL and they are not settled in a variable amount of GFL’s own shares as the conversion and redemption scenarios all specify a fixed number of shares as opposed to a total value of entitlement. Dividends, when declared, will be recorded in the same manner as dividends on common shares. Disposal Expenses Disposal expenses are determined based on the disposal costs reflected in an executed purchase order. Amounts are accrued at the end of the accounting period based on the receipt of a disposal ticket, confirming disposal, from the disposal site and the costs associated with the ultimate disposal of waste. Share-Based Compensation The fair value of options granted is measured using either the Black-Scholes option pricing model or the Monte Carlo simulation methods, which rely on estimates of the expected risk-free interest rate, expected dividend payments, expected share price volatility, value of the Company’s shares and the expected average life of the options. The Company believes these models adequately capture the substantive features of the option awards and are appropriate to calculate their fair values. The fair value of the options determined at grant date is expensed over the vesting period using an accelerated method of amortization, with a corresponding increase to contributed surplus. Expense related to share-based payments is included as part of SG&A. Upon exercise of options, the amount recognized in contributed surplus for the awards and the cash received upon exercise are recognized as an increase in share capital. 88 Table of Contents Income Taxes The calculation of current and deferred income taxes requires us to make estimates and assumptions and to exercise judgement regarding the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary differences and possible audits of income tax filings by the tax authorities. Changes or differences in underlying estimates or assumptions may result in changes to the current or deferred income tax balances on the consolidated statements of financial position, a charge or credit to income tax expense in the consolidated statements of operations and comprehensive income (loss) and may result in cash payments or receipts. All income, capital and commodity tax filings are subject to audits and reassessments. Changes in interpretations or judgements may result in a change in our income, capital or commodity tax provisions in the future. The amount of such a change cannot be reasonably estimated. Business Combination Accounting We recognize, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. We measure and recognize goodwill as of the acquisition date as the excess of: (a) the aggregate of the fair value of consideration transferred, the fair value of any non-controlling interest in the acquiree (if any) and the acquisition date fair value of our previously held equity interest in the acquiree (if any), over (b) the fair value of net assets acquired and liabilities assumed. At the acquisition date, we measure the fair values of all assets acquired and liabilities assumed that arise from contractual contingencies. We measure the fair values of all non-contractual contingencies if, as of the acquisition date, it is more likely than not that the contingency will give rise to an asset or liability. Non-IFRS Financial Measures and Key Performance Indicators Non-IFRS Measures This Annual MD&A makes reference to certain non-IFRS measures, including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. EBITDA EBITDA represents, for the applicable period, net income (loss) plus (a) interest and other finance costs, plus (b) depreciation and amortization of property and equipment, landfill assets and intangible assets, less (c) the provision for income taxes, in each case to the extent deducted or added to/from net income (loss). We present EBITDA to assist readers in understanding the mathematical development of Adjusted EBITDA. Management does not use EBITDA as a financial performance metric. Adjusted EBITDA Adjusted EBITDA is a supplemental measure used by management and other users of our financial statements, including our lenders and investors, to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is also a key metric that management uses prior to execution of any strategic investing or financing opportunity. For example, management uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted EBITDA is utilized by financial institutions to measure borrowing capacity. Adjusted EBITDA is calculated by adding and deducting, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management’s view 89 Table of Contents are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including: (a) (gain) loss on foreign exchange, (b) loss (gain) on sale of property and equipment, (c) mark-to-market loss on fuel hedge, (d) mark-to-market loss on Purchase Contracts, (e) share-based payments, (f) impairment and other charges, (g) costs associated with the IPO, (h) acquisition, integration and other costs (included in SG&A related to acquisition activity), (i) acquisition, rebranding and other integration costs (included in cost of sales related to acquisition activity), and (j) deferred purchase consideration. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business. As we continue to grow our business, we may be faced with new events or circumstances that are not indicative of our underlying business performance or that impact the ability to assess our operating performance. The definition of Adjusted EBITDA for the three months and year ended December 31, 2020 removes the impact of the mark-to-market loss on Purchase Contracts, IPO transaction costs and impairment and other charges, all of which did not exist in the prior periods. Adjusted EBITDA Margin Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. We use Adjusted EBITDA Margin to facilitate a comparison of the operating performance of each of our operating segments on a consistent basis reflecting factors and trends affecting our business. Adjusted EBITDA to Net Loss Reconciliation The following tables provide a reconciliation of our net loss to EBITDA and Adjusted EBITDA for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Three months ended ($millions) ​ December 31, 2020 ​ December 31, 2019 Net loss ​ $ (486.7) ​ $ (180.4) Add: ​ ​ ​ ​ ​ ​ Interest and other finance costs ​ 137.9 ​ 150.4 Depreciation of property and equipment ​ 439.7 ​ 161.9 Amortization of intangible assets ​ 107.5 ​ 86.7 Income tax recovery ​ (190.0) ​ (72.7) EBITDA ​ 8.4 ​ 145.9 Add: ​ ​ Gain on foreign exchange (1) ​ (112.9) ​ (14.1) Loss on sale of property and equipment ​ 2.2 ​ 0.1 Mark-to-market loss on fuel hedge ​ — ​ 0.1 Mark-to-market loss on Purchase Contracts (2) ​ 355.9 ​ — Share-based payments (3) ​ 10.8 ​ 3.6 Impairment and other charges ​ 21.4 ​ — Transaction costs (4) ​ 24.1 ​ 28.6 Acquisition, rebranding and other integration costs (6) ​ 1.3 ​ 13.1 Unbilled revenue reversal (7) ​ ​ — ​ ​ 31.6 Adjusted EBITDA ​ $ 311.2 ​ $ 208.9 90 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor ​ ​ ​ ​ ​ ​ ​ ​ Period ended ​ Period ended ​ ​ Year ended ​ Year ended ​ December 31, 2018 ​ May 31, 2018 ($millions) December 31, 2020 December 31, 2019 (214 days) (151 days) Net loss ​ $ (994.9) ​ $ (451.7) ​ $ (318.7) ​ $ (164.7) Add: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and other finance costs ​ 597.6 ​ 532.2 ​ 242.2 ​ 127.4 Depreciation of property and equipment ​ 810.6 ​ 465.3 ​ 178.2 ​ 66.3 Amortization of intangible assets ​ 427.0 ​ 334.1 ​ 127.5 ​ 40.9 Income tax recovery ​ (360.9) ​ (157.5) ​ (114.0) ​ (26.9) EBITDA ​ 479.4 ​ 722.4 ​ 115.2 ​ 43.0 Add: ​ ​ ​ ​ (Gain) loss on foreign exchange (1) ​ (37.3) ​ (48.9) ​ 39.6 ​ 16.6 Loss (gain) on sale of property and equipment ​ 4.6 ​ 1.2 ​ 4.7 ​ (0.1) Mark-to-market loss on fuel hedge ​ 1.8 ​ 1.0 ​ 2.8 ​ — Mark-to-market loss on Purchase Contracts (2) ​ 449.2 ​ — ​ — ​ — Share-based payments (3) ​ 37.9 ​ 14.5 ​ 2.0 ​ 18.8 Impairment and other charges ​ 21.4 ​ — ​ — ​ — Transaction costs (4) ​ 60.1 ​ 65.5 ​ 103.7 ​ 42.4 IPO transaction costs (5) ​ 46.2 ​ — ​ — ​ — Other income ​ — ​ — ​ — ​ (3.2) Acquisition, rebranding and other integration costs(6) ​ 11.4 ​ 36.4 ​ 13.0 ​ 8.8 Unbilled revenue reversal (7) ​ ​ — ​ ​ 31.6 ​ ​ — ​ ​ — Deferred purchase consideration ​ 2.0 ​ 2.0 ​ 1.0 ​ 1.0 Adjusted EBITDA ​ $ 1,076.7 ​ $ 825.7 ​ $ 282.0 ​ $ 127.3 (1) Consists of (i) non-cash gains and losses on foreign exchange and interest rate swaps entered into in connection with our debt instruments, and (ii) gains and losses attributable to foreign exchange rate fluctuations. (2) This is a non-cash item that consists of the fair value “mark-to-market” adjustment on the Purchase Contracts. (3) This is a non-cash item and consists of the amortization of the estimated fair market value of share-based options granted to certain members of management under share-based option plans. (4) Consists of acquisition, integration and other costs such as legal, consulting and other fees and expenses incurred in respect of acquisitions and financing activities completed during the applicable period. We expect to incur similar costs in connection with other acquisitions in the future and, under IFRS, such costs relating to acquisitions are expensed as incurred and not capitalized. This is part of SG&A. (5) Consists of costs associated with the IPO, such as legal, audit, regulatory and other fees and expenses incurred in connection with the IPO, as well as underwriting fees related to the TEUs that were expensed as incurred. (6) Consists of costs related to the rebranding of equipment acquired through business acquisitions. We may incur similar expenditures in the future in connection with other acquisitions. This is part of cost of sales. (7) Consists of accumulated accruals to unbilled revenue from prior fiscal years relating to unbilled work in progress in our infrastructure and soil remediation segment that we no longer believe is recoverable. ​ ​ ​ ​ 91 Table of Contents