Exhibit 99.2

GFL ENVIRONMENTAL INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

For the three months and year ended December 31, 2022

The following Management’s Discussion and Analysis (“Annual MD&A”) for GFL Environmental Inc. (“us,” “we,” “our,” “GFL” or the “Company”) is dated February 23, 2023 and provides information concerning our results of operations and financial condition for the three months and year ended December 31, 2022. You should read this Annual MD&A together with our audited consolidated financial statements and the related notes for the year ended December 31, 2022 (“Annual Financial Statements”). For a discussion of GFL’s results of operations and cash flows for the year ended December 31, 2021 compared to the year ended December 31, 2020, see the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 40-F for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (“SEC”) and the Canadian securities regulators on February 10, 2022.

1. Company Overview

GFL is the fourth largest diversified environmental services company in North America, with operations throughout Canada and in more than half of the U.S. states. GFL had more than 19,500 employees as of December 31, 2022.

GFL was formed on March 5, 2020 under the laws of the Province of Ontario. Our subordinate voting shares trade on the New York Stock Exchange (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) under the symbol “GFL”. Our tangible equity units (the “TEUs”) trade on the NYSE under the symbol “GFLU”. Each TEU is comprised of a prepaid stock purchase contract (a “Purchase Contract”) and a senior amortizing note (an “Amortizing Note”).

On April 25, 2022, we announced the completion of the divestiture of our Infrastructure services division (“GFL Infrastructure”) for cash consideration of $224.0 million and a non-controlling equity interest in Green Infrastructure Partners Inc. (“GIP”). GFL Infrastructure has been presented as discontinued operations in the comparative results of our Annual Financial Statements.

Unless otherwise indicated, all financial information in this Annual MD&A represents the results from our continuing operations.

Forward-Looking Information

This Annual MD&A, including, in particular, the sections below entitled “Summary of Factors Affecting Performance” and “Liquidity and Capital Resources”, contains forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable U.S. and Canadian securities laws, respectively. Forward-looking information includes all statements that do not relate solely to historical or current facts, may relate to anticipated events or results and may include statements regarding our objectives, plans, goals, strategies, outlook, results of operations, financial and operating performance, prospects and opportunities. In some cases, forward-looking information 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 statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”, although not all forward-looking information includes those words or phrases. 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.

Forward-looking information contained in this Annual MD&A is 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 information form for the year ended December 31, 2022 (the “AIF”). There may be additional risks of which we are not currently 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 information in order to reflect events or circumstances that may change, except where we are expressly required to do so by law.

Forward-looking information is subject to a number of known and unknown risks, uncertainties, assumptions and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Factors that could cause actual results to differ from those projected include, but are not limited to, the following, and the risk factors described in greater detail under the section entitled “Risk Factors” in the AIF: our ability to build our market share; our ability to continue to grow our revenue and improve operating margins; 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 and successfully integrate acquired businesses; 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; our ability to respond to changing customer and legal requirements with respect to sustainable solutions or other matters; our potential liability, if any, in connection with environmental matters; governmental regulation, changes thereto and risks associated with failure to comply; loss of municipal and other contracts; potential inability to renew or obtain new permits, approvals and agreements, and the cost of operation and/or future construction of existing facilities; our dependence on third party landfills, material recovery facilities (“MRF”), liquid waste processing facilities 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, safety and environmental risks; natural disasters, weather conditions and seasonality; economic downturn may adversely impact our operating results and cause exposure to credit risk; increasing dependence on technology and risk of technology failure; cybersecurity incidents or issues; damage to our reputation or our brand; increases in insurance costs; climate change regulations that could increase our costs 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; increasing efforts by provinces, states and municipalities to reduce landfill disposal; litigation or regulatory or activist action; and public health outbreaks, epidemics or pandemics, such as 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.

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 in prior periods have been re-presented for consistency with the current period presentation in relation to discontinued operations, as discussed in our Annual Financial Statements. Our soil remediation division, previously included in our Infrastructure and Soil Remediation segment, has been combined with our Liquid Waste segment and renamed “Environmental Services”.

Derivative asset balances in prior periods have been re-presented for consistency with the current period presentation from net derivative liability in long-term debt to other long-term assets, as discussed in our Annual Financial Statements.

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 elsewhere in this Annual MD&A and in the AIF.

Our results for the three months and year ended December 31, 2022 were impacted by acquisitions, as well as organic growth during the periods as a result, in part, from the pricing strategies that we implemented and changes in volume, partially offset by the impact of the current inflationary environment, which has resulted in increased costs, most notably in relation to fuel, labour, spare parts and third party transportation. Our ability to leverage our scalable network to drive operational cost efficiencies also impacted our performance for the periods. Our results are influenced by seasonality and tend to be lower in the first quarter of the year, primarily due to winter weather conditions which are pronounced in Canada, and 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.

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 price and surcharge increases, win new contracts, realize 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 business lines backed by an extensive geography across Canada and 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.

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 our business lines.

Since 2007, we have completed over 220 acquisitions across 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 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.

2. Operating Results

Analysis of results for the three months and year ended December 31, 2022 compared to the three months and year ended December 31, 2021

The following tables summarize certain operating results from continuing operations and other financial data for the periods indicated, which have been derived from our Annual Financial Statements and related notes:


	Three months ended		Three months ended		Change
($ millions, except per share amounts)	December 31, 2022		December 31, 2021⁽¹⁾		$		%
Revenue	$	1,821.2	$	1,439.6	$	381.6	26.5	%
Expenses
Cost of sales		1,624.2		1,345.2		279.0	20.7
Selling, general and administrative expenses		201.8		161.4		40.4	25.0
Interest and other finance costs		148.6		104.9		43.7	41.7
Gain on divestiture		—		(86.4)		86.4	100.0
Impairment and other		(5.3)		—		(5.3)	—
Other expenses		107.8		10.1		97.7	967.3
Share of net income of investments accounted for using the equity method		(6.2)		—		(6.2)	—
Loss before income taxes		(249.7)		(95.6)		(154.1)	(161.2)
Income tax recovery		(30.6)		(13.9)		(16.7)	(120.1)
Net loss from continuing operations		(219.1)		(81.7)		(137.4)	(168.2)
Net income from discontinued operations		—		4.3		(4.3)	(100.0)
Net loss		(219.1)		(77.4)		(141.7)	(183.1)
Less: Net income attributable to non-controlling interests		0.9		—		0.9	—
Net loss attributable to GFL Environmental Inc.		(220.0)		(77.4)		(142.6)	(184.2)
Loss per share, basic and diluted ($)		(0.66)		(0.25)		(0.41)	(164.0)
Adjusted EBITDA⁽²⁾	$	439.8	$	375.8	$	64.0	17.0	%


	Year ended		Year ended		Change
($ millions, except per share amounts)	December 31, 2022		December 31, 2021⁽¹⁾		$		%
Revenue	$	6,761.3	$	5,136.6	$	1,624.7	31.6	%
Expenses
Cost of sales		5,963.7		4,662.9		1,300.8	27.9
Selling, general and administrative expenses		730.4		562.7		167.7	29.8
Interest and other finance costs		489.3		432.5		56.8	13.1
Gain on divestiture		(4.9)		(153.3)		148.4	96.8
Impairment and other		7.2		—		7.2	—
Other (income) expenses		(44.4)		368.0		(412.4)	(112.1)
Share of net income of investments accounted for using the equity method		(20.7)		—		(20.7)	—
Loss before income taxes		(359.3)		(736.2)		376.9	51.2
Income tax recovery		(176.1)		(109.2)		(66.9)	(61.3)
Net loss from continuing operations		(183.2)		(627.0)		443.8	70.8
Net (loss) income from discontinued operations		(127.9)		20.2		(148.1)	(733.2)
Net loss		(311.1)		(606.8)		295.7	48.7
Less: Net income attributable to non-controlling interests		0.7		—		0.7	—
Net loss attributable to GFL Environmental Inc.		(311.8)		(606.8)		295.0	48.6
Loss per share, basic and diluted ($)		(1.08)		(1.83)		0.75	41.0
Adjusted EBITDA⁽²⁾	$	1,720.8	$	1,410.9	$	309.9	22.0	%


	December 31, 2022		December 31, 2021		Change
Total assets	$	19,767.6	$	18,396.5	$	1,371.1
Total cash		82.1		190.4		(108.3)
Total long-term debt		9,266.8		8,001.8		1,265.0
Total liabilities		13,723.5		12,620.4		1,103.1
Total shareholders’ equity	$	6,044.1	$	5,776.1	$	268.0

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

(2)

Adjusted EBITDA is a non-IFRS measure. Refer to the section entitled “Non-IFRS Financial Measures and Key Performance Indicators”.

Revenue

The following tables summarize revenue by service type for the periods indicated. excluding the results of GFL Infrastructure which has been classified as discontinued operations:


	Three months ended				Three months ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Revenue		%		Revenue		%		$		%
Residential	$	401.3	22.0	%	$	330.6	23.0	%	$	70.7	21.4	%
Commercial/industrial		679.5	37.3			511.2	35.5			168.3	32.9
Total collection		1,080.8	59.3			841.8	58.5			239.0	28.4
Landfill		223.1	12.3			191.9	13.3			31.2	16.3
Transfer		176.2	9.7			147.4	10.2			28.8	19.5
Material recovery		78.2	4.3			93.7	6.5			(15.5)	(16.5)
Other		118.6	6.5			75.1	5.3			43.5	57.9
Solid Waste		1,676.9	92.1			1,349.9	93.8			327.0	24.2
Environmental Services⁽²⁾		352.9	19.4			272.8	18.9			80.1	29.4
Intercompany revenue		(208.6)	(11.5)			(183.1)	(12.7)			(25.5)	13.9
Revenue	$	1,821.2	100.0	%	$	1,439.6	100.0	%	$	381.6	26.5	%


	Year ended				Year ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Revenue		%		Revenue		%		$		%
Residential	$	1,488.8	22.0	%	$	1,243.9	24.2	%	$	244.9	19.7	%
Commercial/industrial		2,461.3	36.4			1,869.7	36.4			591.6	31.6
Total collection		3,950.1	58.4			3,113.6	60.6			836.5	26.9
Landfill		837.7	12.4			677.4	13.2			160.3	23.7
Transfer		671.8	9.9			590.2	11.5			81.6	13.8
Material recovery		346.3	5.1			358.8	7.0			(12.5)	(3.5)
Other		415.3	6.2			258.1	5.0			157.2	60.9
Solid Waste		6,221.2	92.0			4,998.1	97.3			1,223.1	24.5
Environmental Services⁽²⁾		1,343.2	19.9			813.3	15.8			529.9	65.2
Intercompany revenue		(803.1)	(11.9)			(674.8)	(13.1)			(128.3)	19.0
Revenue	$	6,761.3	100.0	%	$	5,136.6	100.0	%	$	1,624.7	31.6	%

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

(2)

Environmental Services is the combination of our Liquid Waste segment with the soil remediation division, previously included in our Infrastructure and Soil Remediation segment.

On a consolidated basis, revenue for the three months ended December 31, 2022 increased by $381.6 million to $1,821.2 million, compared to the three months ended December 31, 2021. The increase is partially attributable to the impact of acquisitions completed since October 1, 2021 which accounted for approximately $110.4 million of the increase, the majority of which were in our Solid Waste segment. Strong pricing and positive volumes also contributed to the increase. Changes in foreign exchange rates increased revenue by $74.2 million. Highlights of the changes in revenue during the three months ended December 31, 2022, excluding the impact of acquisitions, include:

Solid Waste revenue increased by 10.9%, including 11.5% from core pricing and surcharge increases and 1.2% from positive volume, which was driven by higher volume across our collection and post collection operations, partially offset by 1.8% from the impact of lower commodity prices. Changes in foreign exchange rates increased revenue by 5.8%.

Environmental Services revenue increased by 27.3%, primarily due to higher industrial collection and processing activity at our facilities and an increased level of emergency response activity. Changes in foreign exchange rates increased revenue by 1.8%.

On a consolidated basis, revenue for the year ended December 31, 2022 increased by $1,624.7 million to $6,761.3 million, compared to the year ended December 31, 2021. The increase is predominantly attributable to the impact of acquisitions completed since January 1, 2021, which accounted for approximately $784.1 million of the increase, the majority of which were in our Solid Waste segment. Changes in foreign exchange rates increased revenue by $143.3 million. Highlights of the changes in revenue during the year ended December 31, 2022, excluding the impact of acquisitions, include:

Solid Waste revenue increased by 11.2%, including 9.8% from core pricing and surcharge increases and 2.1% from positive volume, which was driven by higher volume across our collection and post collection operations, partially offset by 0.7% from the impact of non-recurring MRF volumes in the prior period and lower commodity prices during the second half of the year. Changes in foreign exchange rates increased revenue by 3.0%.

Environmental Services revenue increased by 27.9%, predominantly due to higher industrial collection and processing activity at our facilities, an increased level of emergency response activity and the impact of higher used motor oil (“UMO”) selling prices. Changes in foreign exchange rates increased revenue by 1.3%.

Cost of Sales

The following tables summarize cost of sales for the periods indicated, excluding the results of GFL Infrastructure which has been classified as discontinued operations:


	Three months ended				Three months ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Cost		% of Revenue		Cost		% of Revenue		$		%
Transfer and disposal costs	$	368.1	20.2	%	$	286.5	19.9	%	$	81.6	28.5	%
Labour and benefits		412.3	22.6			341.3	23.7			71.0	20.8
Maintenance and repairs		188.1	10.3			140.3	9.7			47.8	34.1
Fuel		110.7	6.1			66.6	4.6			44.1	66.2
Other cost of sales		140.3	7.8			107.9	7.6			32.4	30.0
Subtotal		1,219.5	67.0			942.6	65.5			276.9	29.4
Depreciation expense		265.1	14.6			267.5	18.6			(2.4)	(0.9)
Amortization of intangible assets		133.5	7.3			125.9	8.7			7.6	6.0
Acquisition, rebranding and other integration costs		6.1	0.3			9.2	0.6			(3.1)	(33.7)
Cost of sales	$	1,624.2	89.2	%	$	1,345.2	93.4	%	$	279.0	20.7	%


	Year ended				Year ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Cost		% of Revenue		Cost		% of Revenue		$		%
Transfer and disposal costs	$	1,348.5	19.9	%	$	1,030.4	20.1	%	$	318.1	30.9	%
Labour and benefits		1,534.6	22.7			1,192.2	23.2			342.4	28.7
Maintenance and repairs		666.2	9.9			487.0	9.5			179.2	36.8
Fuel		405.4	6.0			222.9	4.3			182.5	81.9
Other cost of sales		492.8	7.3			365.5	7.1			127.3	34.8
Subtotal		4,447.5	65.8			3,298.0	64.2			1,149.5	34.9
Depreciation expense		974.8	14.4			882.2	17.2			92.6	10.5
Amortization of intangible assets		515.6	7.6			457.6	8.9			58.0	12.7
Acquisition, rebranding and other integration costs		25.8	0.4			25.1	0.5			0.7	2.8
Cost of sales	$	5,963.7	88.2	%	$	4,662.9	90.8	%	$	1,300.8	27.9	%

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

Cost of sales increased by $279.0 million to $1,624.2 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, predominantly attributable to the impact of acquisitions. Cost of sales as a percentage of revenue for the three months ended December 31, 2022 decreased by 420 basis points to 89.2%, compared to the three months ended December 31,

2021. Changes in the individual cost categories as a percentage of revenue were the result of the impact of changes in business mix, our pricing strategies and inflationary cost pressures. For the three months ended December 31, 2022, increased labour cost pressure from tight labour markets drove up wage rates, training costs and overtime. Fuel as a percentage of revenue increased by 150 basis points to 6.1%, compared to the three months ended December 31, 2021. Labour and fuel cost pressure also increased our transfer and disposal costs, driven by inflationary cost increases from third party haulers, and our maintenance and repair costs, as technician labour shortages drove higher overtime and reliance on higher cost third party repair facilities and technicians. Maintenance and repairs also increased as a result of additional fleet and container maintenance driven by delays in receiving new trucks and equipment due to supply chain constraints. Delays in receiving new trucks increased equipment rental costs, which contributed to the increase in other cost of sales. An increase in risk management costs, particularly accident claim costs, also contributed to the increase in other cost of sales. Excluding depreciation expense, amortization of intangible assets and acquisition, rebranding and other integration costs, cost of sales as a percentage of total revenue for the three months ended December 31, 2022 increased by 150 basis points to 67.0%, compared to the three months ended December 31, 2021.

Cost of sales increased by $1,300.8 million to $5,963.7 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly attributable to the impact of acquisitions. Cost of sales as a percentage of total revenue for the year ended December 31, 2022 decreased by 260 basis points to 88.2%, compared to the year ended December 31, 2021. Changes in the individual cost categories as a percentage of revenue were the result of the impact of changes in business mix, our pricing strategies and inflationary cost pressures. For the year ended December 31, 2022, increased labour cost pressure from tight labour markets drove up wage rates, training costs and overtime. Fuel costs as a percentage of revenue increased by 170 basis points to 6.0%, compared to the year ended December 31, 2021. Labour and fuel cost pressure also increased our transfer and disposal costs, driven by inflationary cost increases from third party haulers, and our maintenance and repair costs, as technician labour shortages drove higher overtime and reliance on higher cost third party repair facilities and technicians. Maintenance and repairs also increased as a result of additional fleet and container maintenance driven by delays in receiving new trucks and equipment due to supply chain constraints. Delays in receiving new trucks increased equipment rental costs, which contributed to the increase in other cost of sales. An increase in risk management costs, particularly accident claim costs, also contributed to the increase in other cost of sales. Excluding depreciation expenses, amortization of intangible assets and acquisition rebranding and other integration costs, cost of sales as a percentage of total revenue for the year ended December 31, 2022 increased by 160 basis points to 65.8%, compared to the year ended December 31, 2021.

Selling, General and Administrative Expenses (“SG&A”)

The following tables summarize SG&A for the periods indicated, excluding the results of GFL Infrastructure which has been classified as discontinued operations:


	Three months ended				Three months ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Cost		% of Revenue		Cost		% of Revenue		$		%
Salaries and benefits	$	91.1	5.0	%	$	75.8	5.3	%	$	15.3	20.2	%
Share-based payments		16.9	0.9			12.7	0.9			4.2	33.1
Other		69.0	3.8			45.4	3.1			23.6	52.0
Subtotal		177.0	9.7			133.9	9.3			43.1	32.2
Depreciation expenses		6.7	0.4			6.5	0.4			0.2	3.1
Transaction costs		18.1	1.0			21.0	1.5			(2.9)	(13.8)
Selling, general and administrative expenses	$	201.8	11.1	%	$	161.4	11.2	%	$	40.4	25.0	%


	Year ended				Year ended
	December 31, 2022				December 31, 2021⁽¹⁾				Change
($ millions)	Cost		% of Revenue		Cost		% of Revenue		$		%
Salaries and benefits	$	358.1	5.3	%	$	274.0	5.3	%	$	84.1	30.7	%
Share-based payments		55.1	0.8			41.1	0.8			14.0	34.1
Other		233.1	3.5			153.7	3.0			79.4	51.7
Subtotal		646.3	9.6			468.8	9.1			177.5	37.9
Depreciation expense		29.1	0.4			29.7	0.6			(0.6)	(2.0)
Transaction costs		55.0	0.8			64.2	1.3			(9.2)	(14.3)
Selling, general and administrative expenses	$	730.4	10.8	%	$	562.7	11.0	%	$	167.7	29.8	%

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

SG&A increased by $40.4 million to $201.8 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was predominantly attributable to incremental salaries, benefits, information technology

infrastructure investments, including moving from on-premise infrastructure to cloud-based infrastructure, as well as other costs related to the number and size of businesses acquired since October 1, 2021. For the three months ended December 31, 2022, there was also an increase in discretionary costs, such as travel expenses, as we generally returned to pre-pandemic levels. SG&A as a percentage of revenue for the three months ended December 31, 2022 decreased by 10 basis points to 11.1%, compared to the three months ended December 31, 2021. Excluding depreciation expense and transaction costs, SG&A as a percentage of revenue was 9.7% for the three months ended December 31, 2022, compared to 9.3% for the three months ended December 31, 2021.

SG&A increased by $167.7 million to $730.4 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase was predominantly attributable to incremental salaries, benefits, information technology infrastructure investments, including moving from on-premise infrastructure to cloud-based infrastructure, as well as other costs related to the number and size of businesses acquired since January 1, 2021. For the year ended December 31, 2022, there was also an increase in discretionary costs, such as travel expenses, as we generally returned to pre-pandemic levels. SG&A as a percentage of revenue for the year ended December 31, 2022 decreased by 20 basis points to 10.8% compared to the year ended December 31, 2021. Excluding depreciation expense and transaction costs, SG&A as a percentage of revenue was 9.6% for the year ended December 31, 2022, compared to 9.1% for the year ended December 31, 2021.

Interest and Other Finance Costs

The following tables summarize interest and other finance costs for the periods indicated, excluding the results of GFL Infrastructure which has been classified as discontinued operations:


	Three months ended		Three months ended		Change
($ millions)	December 31, 2022		December 31, 2021⁽¹⁾		$		%
Interest	$	131.8	$	92.0	$	39.8	43.3	%
Amortization of deferred financing costs		3.7		3.8		(0.1)	(2.6)
Accretion of landfill closure and post-closure obligations		5.0		3.4		1.6	47.1
Other finance costs		8.1		5.7		2.4	42.1
Interest and other finance costs	$	148.6	$	104.9	$	43.7	41.7	%


	Year ended		Year ended		Change
($ millions)	December 31, 2022		December 31, 2021⁽¹⁾		$		%
Interest	$	427.1	$	323.9	$	103.2	31.9	%
Prepayment penalties for early note redemption		—		49.3	$	(49.3)	(100.0)
Amortization of deferred financing costs		13.8		21.7		(7.9)	(36.4)
Accretion of landfill closure and post-closure obligations		20.1		14.4		5.7	39.6
Other finance costs		28.3		23.2		5.1	22.0
Interest and other finance costs	$	489.3	$	432.5	$	56.8	13.1	%

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

Interest and other finance costs increased by $43.7 million to $148.6 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was predominantly due to an increase in interest expense of $39.8 million to $131.8 million, as a result of interest payments on additional long-term debt incurred in the latter part of 2021 and rising interest rates in Canada and the U.S.

Interest and other finance costs increased by $56.8 million to $489.3 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase was predominantly due to an increase in interest expense of $103.2 million to $427.1 million, as a result of interest payments on additional long-term debt incurred in the latter part of 2021 and rising interest rates in Canada and the U.S. The increase was partially offset by the non-recurring $49.3 million loss realized on extinguishment of long-term debt for the year ended December 31, 2021.

Other Income and Expenses

The following tables summarize other income and expenses for the periods indicated, excluding the results of GFL Infrastructure which has been classified as discontinued operations:


	Three months ended		Three months ended		Change
($ millions)	December 31, 2022		December 31, 2021			$	%
Gain on foreign exchange	$	(31.6)	$	(19.1)	$	(12.5)	65.4	%
Mark-to-market loss on Purchase Contracts		124.6		30.0		94.6	315.3
Loss (gain) on sale of property and equipment		14.8		(0.8)		15.6	(1,950.0)
Other expenses	$	107.8	$	10.1	$	97.7	967.3	%


	Year ended		Year ended		Change
($ millions)	December 31, 2022		December 31, 2021		$		%
Loss on foreign exchange	$	217.7	$	16.2	$	201.5	1,243.8	%
Mark-to-market (gain) loss on Purchase Contracts		(266.8)		349.6		(616.4)	(176.3)
Loss on sale of property and equipment		4.7		2.2		2.5	113.6
Other (income) expenses	$	(44.4)	$	368.0	$	(412.4)	(112.1)	%

For the three months ended December 31, 2022, other expenses were $107.8 million, compared to $10.1 million for the three months ended December 31, 2021. This increase was primarily due to a $94.6 million non-cash change on the revaluation of the Purchase Contracts. Partially offsetting this increase was a $12.5 million non-cash foreign exchange gain arising from the revaluation of TEUs and the unhedged portion of our U.S. dollar denominated debt to Canadian dollars based on the foreign exchange rate as at December 31, 2022.

For the year ended December 31, 2022, other income was $44.4 million, compared to other expenses of $368.0 million for the year ended December 31, 2021. The change was primarily due to a $616.4 million non-cash change on the revaluation of the Purchase Contracts. Partially offsetting this increase was a $201.5 million non-cash foreign exchange loss arising from the revaluation of TEUs and the unhedged portion of our U.S.-dollar denominated debt to Canadian dollars based on the foreign exchange rate as at December 31, 2022.

Impairment and other

For the three months and year ended December 31, 2022, we recognized $1.7 million and $14.2 million of impairment charges and an insurance recovery of $7.0 million related to assets that were destroyed by fire. There were no such charges or recoveries in the year ended December 31, 2021.

Divestitures

During the year ended December 31, 2022, we completed the GFL Infrastructure divestiture for cash consideration of $224.0 million and an approximate 45% non-controlling equity interest in GIP. We also completed divestitures of certain post collection assets and ancillary operations for aggregate proceeds of $117.7 million.

Income Tax Recovery

Income tax recovery increased by $16.7 million to $30.6 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was predominantly due to incremental tax losses attributable to increased depreciation expense from acquisitions, partially offset by a non-cash foreign exchange gain and insurance recovery for the three months ended December 31, 2022.

Income tax recovery increased by $66.9 million to $176.1 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase was predominantly due to incremental tax losses attributable to increased depreciation expense from acquisitions, a non-cash foreign exchange loss, a non-cash impairment of assets destroyed by fire, partially offset by a gain on divestiture and insurance recovery for the year ended December 31, 2022.

Our basis for recording deferred income tax assets for these losses is the availability of deferred income tax liabilities, which will offset these deferred income tax assets in the future.

3. Operating Segment Results

Our main lines of business are the transporting, managing and recycling of solid and liquid waste and soil remediation services. Our operating segments are: Solid Waste, which includes hauling, landfill, transfers and MRFs; and Environmental Services, which includes liquid waste management and soil remediation services. Our soil remediation division, previously included in our Infrastructure and Soil Remediation segment, has been combined with our Liquid Waste segment and renamed “Environmental Services”.

The results for our operating segments are presented in accordance with the same criteria used for the internal report prepared for the chief operating decision maker (“CODM”) who is responsible for allocating the resources and assessing the performance of the operating segments. The CODM assesses the performance of the operating segments based on several factors, including revenue and Adjusted EBITDA.

Analysis of results for the three months and year ended December 31, 2022 compared to the three months and year ended December 31, 2021

The following tables present revenue and Adjusted EBITDA by operating segment for the periods indicated, excluding the results of GFL Infrastructure which has been classified as discontinued operations. Gross revenue is calculated based on revenue before intercompany eliminations.

Three months ended December 31, 2022

Intercompany

Adjusted

Gross Revenue

Revenue

EBITDA⁽¹⁾

Solid Waste

Canada

504.1

(63.6)

440.5

117.6

USA

1,172.8

(120.6)

1,052.2

303.8

Solid Waste

1,676.9

(184.2)

1,492.7

421.4

Environmental Services⁽²⁾

352.9

(24.4)

328.5

73.0

Corporate

—

(54.6)

2,029.8

(208.6)

1,821.2

439.8


	Three months ended December 31, 2021⁽³⁾
			Intercompany				Adjusted
	Gross Revenue		Revenue		Revenue		EBITDA⁽¹⁾
Solid Waste
Canada	$	433.3	$	(51.3)	$	382.0	$	107.0
USA		916.6		(105.6)		811.0		250.6
Solid Waste		1,349.9		(156.9)		1,193.0		357.6
Environmental Services⁽²⁾		272.7		(26.1)		246.6		55.6
Corporate		—		—		—		(37.4)
	$	1,622.6	$	(183.0)	$	1,439.6	$	375.8

(1)

Adjusted EBITDA is a non-IFRS measure. Refer to the section entitled “Non-IFRS Financial Measures and Key Performance Indicators”.

(2)

Environmental Services is the combination our Liquid Waste segment with the soil remediation division, previously included in our Infrastructure and Soil Remediation segment.

(3)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

Year ended December 31, 2022

Intercompany

Adjusted

Gross Revenue

Revenue

EBITDA⁽¹⁾

Solid Waste

Canada

1,926.5

(248.3)

1,678.2

451.5

USA

4,294.7

(460.5)

3,834.2

1,149.5

Solid Waste

6,221.2

(708.8)

5,512.4

1,601.0

Environmental Services⁽²⁾

1,343.2

(94.3)

1,248.9

307.4

Corporate

—

(187.6)

7,564.4

(803.1)

6,761.3

1,720.8


	Year ended December 31, 2021⁽³⁾
			Intercompany				Adjusted
	Gross Revenue		Revenue		Revenue		EBITDA⁽¹⁾
Solid Waste
Canada	$	1,610.5	$	(199.6)	$	1,410.9	$	411.5
USA		3,387.6		(394.9)		2,992.7		948.6
Solid Waste		4,998.1		(594.5)		4,403.6		1,360.1
Environmental Services⁽²⁾		813.3		(80.3)		733.0		186.9
Corporate		—		—		—		(136.1)
	$	5,811.4	$	(674.8)	$	5,136.6	$	1,410.9

(1)

Adjusted EBITDA is a non-IFRS measure. Refer to the section entitled “Non-IFRS Financial Measures and Key Performance Indicators”.

(2)

Environmental Services is the combination our Liquid Waste segment with the soil remediation division, previously included in our Infrastructure and Soil Remediation segment.

(3)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

Solid Waste — Canada Operating Segment

Revenue increased by $58.5 million to $440.5 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was due in part to acquisitions completed since October 1, 2021, which contributed approximately $22.7 million of revenue, and $37.3 million from price and surcharge increases, partially offset by lower selling prices for the saleable commodities generated from our MRF operations. Price and surcharge increases were higher than the three months ended December 31, 2021, as a result of the continued execution of our pricing strategies, increased surcharge revenue and strong consumer price index (“CPI”) adjustments on certain municipal contracts. Volume increased revenue by $11.1 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, predominantly from volumes in our collection and post collection businesses. Offsetting these increases was the impact of lower MRF volumes in the period.

Revenue increased by $267.3 million to $1,678.2 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase was due in part to acquisitions, net of divestitures, completed since January 1, 2021, which contributed approximately $126.2 million of revenue, $121.1 million from price and surcharge increases and $1.8 million from higher selling prices for the saleable commodities generated from our MRF operations. Price and surcharge increases were higher than the year ended December 31, 2021, as a result of the continued execution of our pricing strategies, increased surcharge revenues and strong CPI adjustments on certain municipal contracts. Volume increased revenue by $45.8 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly from volumes in our collection, transfer station and landfill businesses. Offsetting these increases were lower volumes in our organic waste business, a decrease largely attributable to the severe weather in Western Canada during the beginning of the year, and the impact of lower MRF volumes in the year due in part to higher non-recurring MRF volumes in the prior year.

Adjusted EBITDA increased by $10.6 million to $117.6 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 26.7% for the three months ended December 31, 2022, a decrease of 130 basis points as compared to the three months ended December 31, 2021. The decrease is attributable to higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal, and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. Adjusted EBITDA margins were also negatively impacted by increased accident claim costs as well as the impact of the relatively higher margin non-recurring MRF volumes in the prior period. Partially offsetting these decreases was the impact of our pricing strategies. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Adjusted EBITDA increased by $40.0 million to $451.5 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin for the year ended December 31, 2022, was 26.9%, a decrease of 230 basis points as compared to the year ended December 31, 2021. The decrease is predominantly attributable to higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal, and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints and the impact of a non-recurring employee insurance rebate received in the prior year. In addition, fires at two facilities resulted in incremental transfer and disposal costs, as well as clean up costs. Partially offsetting these decreases was the impact of our pricing strategies. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Solid Waste — USA Operating Segment

Revenue increased by $241.2 million to $1,052.2 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was predominantly due to acquisitions completed since October 1, 2021 which contributed approximately $77.5 million of revenue, and $99.1 million from price and surcharge increases, partially offset by lower selling prices for the saleable commodities generated from our MRF operations. Volume increased revenue by $3.7 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, predominantly from increased volumes in our collection and post collection businesses. Revenue increased by $69.7 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, as a result of the weakening of the Canadian dollar against the U.S. dollar.

Revenue increased by $841.5 million to $3,834.2 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase was predominantly due to acquisitions completed since January 1, 2021 which contributed approximately $356.1 million of revenue, and $310.8 million from price and surcharge increases, partially offset by lower selling prices for the saleable commodities generated from our MRF operations. Volume increased revenue $46.8 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly from increased volumes in our collection and post collection businesses. Revenue increased by $133.5 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, as a result of the weakening of the Canadian dollar against the U.S. dollar.

Adjusted EBITDA increased by $53.2 million to $303.8 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 28.9% for the three months ended December 31, 2022, a decrease of 200 basis points as compared to the three months ended December 31, 2021. The decrease was predominantly attributable to higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. Adjusted EBITDA margins were also negatively impacted by increased travel expenses and accident claim costs. Partially offsetting these decreases was the impact of our pricing strategies. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Adjusted EBITDA increased by $200.9 million to $1,149.5 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 30.0% for the year ended December 31, 2022, a decrease of 170 basis points as compared to the year ended December 31, 2021. The decrease was predominantly attributable to higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. Adjusted EBITDA margins were also negatively impacted by increased travel expenses and accident claim costs. Partially offsetting these decreases was the impact of our pricing strategies. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Environmental Services Operating Segment

Revenue increased by $81.9 million to $328.5 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. Acquisitions completed since October 1, 2021 contributed approximately $10.2 million in increased revenue. In addition to the contribution from acquisitions, revenue organically grew by $67.2 million as a result of increased industrial collection and processing activity and an increased level of emergency response activity. This was partially offset by a reduction in soil volumes processed at our facilities as a result of a temporary delay in the commencement of certain larger projects. Revenue increased by $4.5 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, as a result of the weakening of the Canadian dollar against the U.S. dollar.

Revenue increased by $515.9 million to $1,248.9 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. Acquisitions completed since January 1, 2021 contributed approximately $301.7 million in increased revenue. In addition to the contribution from acquisitions, revenue grew organically by $204.3 million as a result of increased industrial collection and processing activity, an increased level of emergency response activity, the impact of higher UMO selling prices, and higher soil volumes processed at our facilities. Revenue increased by $9.8 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, as a result of the weakening of the Canadian dollar against the U.S. dollar.

Adjusted EBITDA increased by $17.4 million to $73.0 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. Adjusted EBITDA margin was 22.2% for the three months ended December 31, 2022, a decrease of 30 basis points as compared to the three months ended December 31, 2021. Pricing initiatives, variable cost controls and the operating leverage associated with volume recovery favourably impacted Adjusted EBITDA margin for the three months ended

December 31, 2022. Offsetting these increases were higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. In addition, increased sub-contracting costs associated with increased emergency response activity and increased accident claim costs negatively impacted Adjusted EBITDA margin for the three months ended December 31, 2022. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Adjusted EBITDA increased by $120.5 million to $307.4 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 24.6% for the year ended December 31, 2022, a decrease of 90 basis points as compared to the year ended December 31, 2021. Pricing initiatives, variable cost controls, higher UMO selling prices and the operating leverage associated with volume recovery favourably impacted Adjusted EBITDA margin for the year ended December 31, 2022. Offsetting these increases were higher fuel costs, increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. In addition, increased sub-contracting costs associated with increased emergency response activity and increased accident claim costs negatively impacted Adjusted EBITDA margin for the year ended December 31, 2022. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Corporate

Corporate costs increased by $17.2 million to $54.6 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. Corporate costs as a percentage of total revenue were 3.0% for the three months ended December 31, 2022, an increase of 40 basis points compared to the three months ended December 31, 2021.

Corporate costs increased by $51.5 million to $187.6 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. Corporate costs as a percentage of total revenue were 2.8% for the year ended December 31, 2022, an increase of 20 basis points compared to the year ended December 31, 2021.

4. Liquidity and Capital Resources

We intend to meet our currently anticipated capital requirements through cash flows from operations and borrowing capacity under our Revolving Credit Facility (defined below). We expect that these sources will be sufficient to meet our current operating capital needs, pay our dividends and fund certain tuck-in acquisitions consistent with our strategy.

Cash Flows

Cash flows for the three months and year ended December 31, 2022 compared to the three months and year ended December 31, 2021


	Three months ended		Three months ended		Change
($ millions)	December 31, 2022		December 31, 2021		$		%
Cash flows from operating activities	$	403.0	$	283.8	$	119.2	42.0	%
Cash flows used in investing activities		(404.3)		(1,136.6)		732.3	(64.4)
Cash flows used in financing activities		(150.5)		(100.7)		(49.8)	49.5
Decrease in cash		(151.8)		(953.5)
Changes due to foreign exchange revaluation of cash		(3.5)		(5.6)
Cash, beginning of period		237.4		1,149.5
Cash, end of period	$	82.1	$	190.4


	Year ended		Year ended		Change
($ millions)	December 31, 2022		December 31, 2021		$		%
Cash flows from operating activities	$	1,096.3	$	897.9	$	198.4	22.1	%
Cash flows used in investing activities		(1,734.2)		(2,687.2)		953.0	(35.5)
Cash flows from financing activities		569.0		1,964.7		(1,395.7)	(71.0)
(Decrease) increase in cash		(68.9)		175.4
Changes due to foreign exchange revaluation of cash		(39.4)		(12.2)
Cash, beginning of period		190.4		27.2
Cash, end of period	$	82.1	$	190.4

Operating Activities

Cash flows from operating activities increased by $119.2 million to $403.0 million for the three months ended December 31, 2022, compared to $283.8 million for the three months ended December 31, 2021. This increase was predominantly attributable to an increase in EBITDA and $84.8 million of improved working capital for the three months ended December 31, 2022. Partially offsetting this increase was $28.0 million of incremental cash interest paid on outstanding long-term debt due largely to the cadence of cash interest payments.

Changes in non-cash working capital items resulted in a source of cash of $115.7 million for the three months ended December 31, 2022, as compared to a source of cash of $30.9 million for the three months ended December 31, 2021. The period over period improvement of $84.8 million was predominantly a result of improvement in timing of payment and collections. For the three months ended December 31, 2021, the change in non-cash working capital was driven by a $113.9 million decrease in accounts receivable and a $17.2 million decrease in prepaid and other assets and was partially offset by a $46.3 million decrease in accounts payable and accrued liabilities.

Cash flows from operating activities increased by $198.4 million to $1,096.3 million for the year ended December 31, 2022, compared to cash flows from operating activities of $897.9 million for the year ended December 31, 2021. This increase was predominantly attributable to an increase in EBITDA for the year ended December 31, 2022. Partially offsetting this increase was $77.5 million of incremental cash interest paid on outstanding long-term debt due largely to the cadence of cash interest payments.

Changes in non-cash working capital items, resulted in a use of cash of $85.5 million, $44.8 million of which was attributable to GFL Infrastructure, for the year ended December 31, 2022, compared to a use of cash of $87.1 million, $45.5 million of which was attributable to GFL Infrastructure, for the year ended December 31, 2021. The year over year change was driven by a $83.0 million increase in accounts receivable and $2.5 million increase in prepaid and other assets, offset by a $87.1 million increase in accounts payable and accrued liabilities.

Investing Activities

Cash flows used in investing activities decreased by $732.3 million to $404.3 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The decrease was predominantly related to acquisition expenditures which decreased by $798.6 million to $197.9 million. Partially offsetting the decrease was a decrease of proceeds on disposal of assets of $53.8 million to $35.5 million and an increase of $4.6 million in our initial investment in joint ventures and associates. Capital expenditures also increased by $7.9 million to $237.3 million for the three months ended December 31, 2022.

Cash flows used in investing activities decreased by $953.0 million to $1,734.2 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The decrease was predominantly related to acquisition expenditures which decreased by $1,029.1 million to $1,270.6 million. Partially offsetting this decrease was $104.4 million of incremental proceeds on disposal of assets and an increase of $47.6 million in our initial investment in joint ventures and associates. Capital expenditures increased by $132.9 million to $780.1 million for the year ended December 31, 2022. Capital expenditures related to GFL Infrastructure were $7.2 million for the year ended December 31, 2022, as compared to $38.8 million for the year ended December 31, 2021.

Financing Activities

Cash flows used in financing activities increased by $49.8 million to $150.5 million for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. The increase was primarily the result of no share capital issued for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, partially offset by a decrease from the net change in long-term debt and lower payments of financing costs. Cash flows used in financing activities for GFL Infrastructure were $nil for the three months ended December 31, 2022, as compared to $0.8 million for the three months ended December 31, 2021.

Cash flows from financing activities decreased by $1,395.7 million to $569.0 million for the year ended December 31, 2022, compared to $1,964.7 million for the year ended December 31, 2021. The decrease was predominantly the result of a decrease from the net change in long-term debt, lower payments of financing costs, contingent purchase consideration and holdbacks. Cash flows used in financing activities for GFL Infrastructure were $1.0 million for the year ended December 31, 2022, as compared to $3.2 million for the year ended December 31, 2021.

Available Sources of Liquidity

The following table summarizes our cash and amounts available under our Revolving Credit Facility (as defined below) for the periods indicated:


($ millions)	As at December 31, 2022		As at December 31, 2021
Cash on hand	$	82.1	$	190.4
Amounts available under our Revolving Credit Facility		301.8		800.6
	$	383.9	$	991.0

Revolving Credit Facility

General

Under our amended and restated revolving credit agreement dated as of September 27, 2021 (as amended, the “Revolving Credit Agreement”), as at December 31, 2022, we had access to (a) a $1,205.0 million revolving credit facility (available in Canadian and US dollars) and an aggregate US$75.0 million in revolving credit facilities (available in US dollars) (collectively, the “Revolving Credit Facility”) and (b) a term loan of up to $500.0 million (the “Term Loan A Facility”). On January 11, 2023, we amended our Revolving Credit Agreement to increase the Term Loan A Facility by $275.0 million. The proceeds were used to repay a portion of the outstanding balance of the Revolving Credit Facility.

As at December 31, 2022, we had $771.8 million drawn under the Revolving Credit Facility ($nil as at December 31, 2021) and $500.0 million drawn under the Term Loan A Facility ($500.0 million as at December 31, 2021).

Interest Rates, Fees, and Payments

The Revolving Credit Facility and Term Loan A Facility accrue interest at a rate of SOFR/Bankers Acceptance plus 1.500% to 2.250% or Canadian/US prime plus 0.500% to 1.250%.

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 SOFR rate advances requires two and three days’ written notice, respectively.

Covenants

The Revolving Credit Agreement contains a Total Net Funded Debt to Adjusted EBITDA and an Interest Coverage Ratio (each as defined in the Revolving Credit Agreement) financial maintenance covenant.

The Total Net Funded Debt to Adjusted EBITDA ratio to be maintained is equal to or less than 6.00 to 1.00 for a period of four complete fiscal quarters following completion of a Material Acquisition (as defined in the Revolving Credit Agreement) and at all other times, equal to or less than 5.75 to 1.00. The Interest Coverage Ratio must be equal to or greater than 3.00 to 1.00. As at December 31, 2022 and December 31, 2021, we were in compliance with these 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 grant 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.

We must prepay our Term Loan B 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 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, 2022 and December 31, 2021, we were in compliance with all debt covenants under the Term Facility Credit Agreement.

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 B 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 B 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). Our Term Loan B 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 outstanding U.S. dollar secured and unsecured notes (the “Notes”), the related swaps outstanding and other material terms of the Notes as at December 31, 2022.

Principal

Amount of

Note

Swap

Optional Redemption ⁽¹⁾

Outstanding

Amount

Redemption

Note Description

(USD)

Issuance Date

Maturity Date

Interest Payment Dates

First Call Date

Price ⁽²⁾

4.250% 2025 Secured Notes⁽³⁾

500.00

April 29, 2019

June 1, 2025

June 1 and December 1

June 1, 2022

102.125

3.750% 2025 Secured Notes⁽³⁾

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⁽³⁾

500.00

December 16, 2019

December 15, 2026

June 15 and December 15

December 15, 2022

102.563

3.500% 2028 Secured Notes⁽³⁾

750.00

N/A

December 21, 2020

September 1, 2028

March 1 and September 1

N/A

4.000% 2028 Unsecured Notes⁽⁴⁾

750.00

500.00

November 23, 2020

August 1, 2028

February 1 and August 1

August 1, 2023

102.000

4.750% 2029 Unsecured Notes⁽⁴⁾

750.00

350.00

August 10, 2021

June 15, 2029

June 15 and December 15

June 15, 2024

102.375

4.375% 2029 Unsecured Notes⁽⁴⁾

550.00

N/A

September 25, 2021

August 15, 2029

February 15 and August 15

August 15, 2024

102.188

(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.

(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.

(3)

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”.

(4)

The 4.000% 2028 Unsecured Notes, the 4.750% 2029 Unsecured Notes and the 4.375% 2029 Unsecured Notes are collectively referred to as the “Unsecured 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 GFL and the note trustee (collectively, the “Indentures”). The Indentures entered into in respect of the Notes (other than in respect of the 3.500% 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 3.500% 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, 2022 and December 31, 2021, 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 B Facility. The Secured Notes are guaranteed by each of our subsidiaries that guarantee the Term Loan B Facility and the Revolving Credit Facility.

Other

We have various equipment loan agreements which are secured by the specific assets under such loans and with maturity dates in 2023.

In 2022, we acquired a 51.0% controlling interest in an entity that had promissory notes with an aggregate principal amount of US$48.9 million. The promissory notes mature on June 14, 2027 and bear interest at a rate of 3.000% per annum, payable quarterly, which interest rate increases by 100 basis points commencing on June 15, 2023 and each subsequent anniversary date thereof until maturity. Upon default, the promissory notes are the obligation of the subsidiary.

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 Unsecured Notes, the 4.000% 2028 Unsecured Notes and the 4.750% 2029 Unsecured Notes and to changes in the value of the U.S. dollar. Our U.S. dollar denominated Term Loan B Facility is hedged in the amount of $395.3 million as at December 31, 2022. Refer to the sections entitled Notes and Commodity Price Exposure herein, and Foreign Currency Risk in the Annual Financial Statements for additional information.

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 at December 31, 2022 are shown in the following table.


			Less than
($ millions)	Total		1 year		1-3 year		4-5 year		Thereafter
Long-term debt		9,177.0	$	17.8	$	3,417.9	$	1,949.0	$	3,792.3
Interest on long-term debt		1,850.5		452.3		810.3		416.1		171.8
Lease obligations		480.1		68.9		112.7		144.1		154.4
Other		75.0		0.2		—		74.8		—
Amortizing Notes		15.5		15.5		—		—		—
	$	11,598.1	$	554.7	$	4,340.9	$	2,584.0	$	4,118.5

Other Commitments

We had letters of credit totaling approximately $233.0 million outstanding as at December 31, 2022 ($199.5 million as at December 31, 2021), which are not recognized in our Annual Financial Statements. 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.

As at December 31, 2022, we had issued performance bonds totaling $1,560.7 million ($1,748.1 million as at December 31, 2021).

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 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 2.6326 subordinate voting shares and not less than 2.1939 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 2.1939 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 2.6326 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.

5. Summary of Quarterly Results

The following table summarizes the results of our operations for the eight most recently completed quarters:


	31-Dec		30-Sep		30-Jun		31-Mar		31-Dec		30-Sep		30-Jun		31-Mar
($ millions, except per share amounts)	2022		2022		2022		2022		2021⁽¹⁾		2021⁽¹⁾		2021⁽¹⁾		2021⁽¹⁾
Financial Summary
Revenue	$	1,821.2	$	1,831.2	$	1,707.5	$	1,401.4	$	1,439.6	$	1,381.3	$	1,216.1	$	1,099.6
Adjusted EBITDA⁽²⁾		439.8		473.3		453.3		354.4		375.8		399.6		337.8		297.7
Net (loss) income from continuing operations⁽³⁾		(219.1)		(183.7)		82.6		137.0		(81.7)		(316.1)		54.4		(283.7)
(Loss) earnings per share⁽³⁾		(0.66)		(0.55)		0.17		0.32		(0.26)		(0.91)		0.12		(0.82)

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

(2)

Adjusted EBITDA is a non-IFRS measure. Refer to section entitled “Non-IFRS Financial Measures and Key Performance Indicators”.

(3)

Subsequent to the original issuance of our interim consolidated financial statements for the first three quarters of 2021, GFL determined the mark-to-market loss on Purchase Contracts should not be treated as a temporary difference for deferred income tax purposes. As a result, to correct these immaterial errors, deferred income tax liabilities, income tax recovery, net (loss) income, and net (loss) earnings per share changed as follows: (a) for the quarter ended March 31, 2021, an increase of $55.8 million to deferred income tax liabilities and a corresponding decrease to income tax recovery, resulting in a $55.8 million increase to net loss from continuing operations and an increase of $0.16 to net loss per share; (b) for the quarter ended June 30, 2021, a decrease of $37.3 million to deferred income tax liabilities and a corresponding increase to income tax recovery, resulting in a $37.3 million increase to net income from continuing operations and an increase of $0.11 to net earnings per share; and (c) for the quarter ended September 30, 2021, an increase of $64.7 million to deferred income tax liabilities and a corresponding decrease to income tax recovery, resulting in a $64.7 million increase to net loss from continuing operations and an increase of $0.18 to net loss per share.

Over the last eight quarters our results were primarily impacted by our pricing initiatives, cost controls and overall operating leverage as volumes recovered offset by inflationary cost pressures, as well as from acquisitions and associated financing activities. Additionally, our results are influenced by seasonality and tend to be lower in the first quarter of the year, primarily due to winter weather conditions, which are pronounced in Canada, and 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. Our results were also impacted by the measures taken by the U.S. and Canadian governments in response to COVID-19 beginning in the second quarter of 2020. In the first half of 2021, these measures were lifted or eased in many U.S states resulting in accelerated economic recovery in the markets that we serve. In early 2022, many of the measures that had previously been put in place by Canadian provincial and local governments were also lifted or eased.

6. Key Risk Factors

We are exposed to a number of risks through the pursuit of our strategic objectives and the nature of our operations which are outlined in the “Risk Factors” section of our AIF. We are also subject to the following financial risks.

Financial Instruments and Financial Risk

Our financial instruments consist of cash, trade accounts receivable, trade accounts payable, long-term debt, including related hedging instruments, and TEUs. The carrying value of our financial assets are equal to their fair values.

The carrying value of our financial liabilities approximate their fair values with the exception of our outstanding Notes and Amortizing Notes. The following table summarizes the fair value hierarchy for these instruments for the periods indicated:

Fair Value as at December 31, 2022

Fair Value as at December 31, 2021

Quoted prices

Significant

Quoted prices

Significant

in active

observable

unobservable

in active

observable

unobservable

market

inputs

market

inputs

($ millions)

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

Notes

—

5,568.6

—

5,808.3

—

Amortizing Notes

15.5

—

70.4

—

Purchase Contracts and net derivative instruments, which are recorded at fair value, are classified within Level 1 and Level 2, respectively.

For more information on our financial instruments, including hedging arrangements, and related financial risk factors, see our Annual Financial Statements.

Market Rate Risk

In the normal course of business, we are 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. We had $9,252.0 million of long-term debt excluding the impacts of accounting for debt issuance costs, discounts, and premiums as at December 31, 2022, compared to $7,921.1 million as at December 31, 2021. We had $3.014.5 million and $2,147.9 million of debt that was exposed to changes in interest rates as at December 31, 2022 and December 31, 2021, respectively. To reduce our exposures to interest rate risk, the majority of our 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 2022 interest expense by $29.9 million and our 2021 interest expense by $21.5 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 ended December 31, 2022 by approximately $31.3 million and $8.8 million, respectively ($25.3 million and $7.5 million respectively for the year ended December 31, 2021).

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 can fluctuate significantly. A significant increase in the price of fuel could adversely affect our business and reduce our operating margins. In the past, we have entered into swap contracts to partially hedge our exposure to diesel fuel purchases in Canada and certain areas in the U.S. As at December 31, 2022, our swap contracts had expired. The fair value of the agreements represented an asset of approximately $5.4 million as at December 31, 2021, included in our other long-term assets.

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 change in recycled commodity prices, a 10% change in average recycled commodity prices from the average prices that were in effect would have had a $14.9 million and $14.7 million impact on revenues for the year ended December 31, 2022 and December 31, 2021, respectively.

8. 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. The remaining principal outstanding on the note payable was $3.5 million as of December 31, 2022 ($10.5 million as of December 31, 2021). The note matured and was repaid on January 1, 2023.

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. The note matures on March 5, 2025, is payable in equal semi-annual instalments of $2.9 million and bears interest at market rate. The remaining principal outstanding on the note payable was $14.5 million as of December 31, 2022 ($20.3 million as of December 31, 2021).

These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

From time to time, we have entered into leases with entities controlled by affiliates of Patrick Dovigi, as well as entities controlled by another director of GFL (the “Related Parties”). At this time, we lease five 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, 2022, GFL paid $5.8 million ($3.9 million for the year ended December 31, 2021) in aggregate lease payments to the Related Parties.

For the year ended December 31, 2022, GFL entered into transactions with GIP which resulted in revenue of $31.6 million ($nil for the year ended December 31, 2021) and net payables of $3.8 million as at December 31, 2022 ($nil as at December 31, 2021).

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, 2022 total salaries and short-term benefits and share-based payments to key management personnel was $36.8 million ($34.2 million for the year ended December 31, 2021).

Current Share Information

Our 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 at December 31, 2022, we had 331,629,917 subordinate voting shares, 11,812,964 multiple voting shares, 28,571,428 Series A perpetual convertible preferred shares (“Series A Preferred Shares”), and 8,196,721 Series B perpetual convertible preferred shares (“Series B Preferred Shares”) issued and outstanding. The Series A Preferred Shares and Series B Preferred Shares are collectively referred to as the “Preferred Shares”. All of the issued and outstanding multiple voting shares are, directly or indirectly, held or controlled by entities controlled by Patrick Dovigi.

Preferred Shares

As at December 31, 2022, (a) the Series A Preferred Shares are convertible into 27,842,293 subordinate voting shares, at a conversion price of US$25.19, representing 7.6% of the issued and outstanding subordinate voting shares and 5.7% of the aggregate outstanding voting rights, and (b) the Series B Preferred Shares are convertible into 7,268,463 subordinate voting shares, at a conversion price of US$43.91, representing 2.0% of the issued and outstanding subordinate voting shares and 1.5% of the aggregate outstanding voting rights. 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 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 GFL 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 Series A Preferred Shares and Series B Preferred Shares accrete at a rate of 7.000% and 6.000% per annum, respectively, compounded quarterly. From and after December 31, 2024 (in the case of the Series A Preferred Shares) or December 31, 2025 (in the case of the Series B 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 for the

Series A Preferred Shares and Series B Preferred Shares will be 6.000% and 5.000% per annum, respectively. 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.

As of December 31, 2022, we had 11,698,543 Purchase Contracts outstanding which are convertible into 25,665,433 subordinate voting shares, assuming a minimum conversion of 2.1939.

Normal Course Issuer Bid

On May 10, 2022, the TSX accepted our notice of intention to implement a normal course issuer bid (“NCIB”) during the twelve-month period commencing on May 12, 2022 and ending May 11, 2023. Under the NCIB, a maximum of 16,510,694 subordinate voting shares may be repurchased by GFL representing approximately 5.0% of the issued and outstanding subordinate voting shares as at May 6, 2022. Purchases will be made by means of open market transactions on both the TSX and NYSE or alternative trading systems, if eligible, or by such other means as a securities regulatory authority may permit. Under the NCIB, GFL is allowed to purchase daily, through the facilities of the TSX, a maximum of 85,481 subordinate voting shares, representing 25% of the average daily trading volume, as calculated per the TSX rules for the six month period starting on November 1, 2021 to April 30, 2022. All subordinate voting shares repurchased by GFL under the NCIB will be cancelled. For the year ended December 31, 2022, we did not repurchase any subordinate voting shares under the plan. A copy of GFL’s notice of intention to commence a normal course issuer bid through the facilities of the TSX may be obtained, without charge, by contacting GFL.

9. 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

We generate revenue through fees charged for the collection of solid waste including recyclables, from our 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 our own collected waste volumes, our transfer stations, MRFs, landfills and organic waste processing facilities generate revenue from tipping fees paid to us by municipalities and third-party haulers and waste generators and from the sale of recycled commodities. We also operate 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 the 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. We do 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.

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.

We generate 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 we have 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.

We earned revenue through fees collected for the excavation and transport of clean and contaminated soils and the remediation and disposal of contaminated and remediated soils. We also offered 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.

Revenue was recognized for these services based on the percentage 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.

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 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 our accounting policies and that have the most significant effect on amounts recognized in the Annual Financial Statements:

Determining the fair value of acquired assets and liabilities in business combinations, specifically the fair value of acquired intangible assets and acquired landfill assets

Estimating the amount and timing of the landfill closure and post-closure obligations, specifically the estimated future expenditures associated with landfill capping, closure and post-closure activities

Determining the key assumptions for impairment testing for long-lived assets

Key components of the Annual Financial Statements requiring management to make estimates include the potential impairment of goodwill and indefinite life intangible assets, the fair value of the cash flow hedges, the fair value of the net assets acquired in business combinations and AROs.

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 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 us modifying our estimates, assumptions or judgement at this time. Refer to the section entitled “Risk Factors” included in the AIF for further information.

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 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:


	Year ended		Year ended
	December 31, 2022		December 31, 2021
Amortization of landfill airspace ($ millions)	$	294.6	$	230.4
Tonnes received (millions of tonnes)		22.2		17.9
Average landfill amortization per tonne ($ millions)	$	13.3	$	12.9

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 year ended December 31, 2022 did not include the $7.8 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 quarterly valuations. This accounting adjustment does not impact the economics of the average landfill amortization per tonne.

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.

As of December 31, 2022, we had 323.4 million tonnes (319.5 million tonnes for the year ended December 31, 2021) 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, 2022, permitted capacity increased due to the acquisition of landfills through business combinations, partially offset by the divestiture of certain post-closure assets. As of December 31, 2022, eighteen of our landfills satisfied the criteria for inclusion of probable expansion capacity, resulting in additional expansion capacity of 171.5 million tonnes, and together with remaining permitted capacity, our total remaining capacity is 494.9 million tonnes (484.4 million tonnes as of December 31, 2021). Based on total capacity as of December 31, 2022 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 24.8 years (26.1 years as of December 31, 2021). 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.

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.

10. 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.

Adjusted EBITDA to Net Loss Reconciliation

The tables below provide the reconciliation of our net loss from continuing operations to EBITDA and Adjusted EBITDA for the periods indicated, excluding the results of GFL Infrastructure which has been presented as discontinued operations:


	Three months ended		Three months ended
($ millions)	December 31, 2022		December 31, 2021⁽¹⁾
Net loss from continuing operations	$	(219.1)	$	(81.7)
Add:
Interest and other finance costs		148.6		104.9
Depreciation of property and equipment		271.8		274.0
Amortization of intangible assets		133.5		125.9
Income tax recovery		(30.6)		(13.9)
EBITDA		304.2		409.2
Add:
Gain on foreign exchange⁽²⁾		(31.6)		(19.1)
Loss (gain) on sale of property and equipment		14.8		(0.8)
Mark-to-market loss on Purchase Contracts⁽³⁾		124.6		30.0
Share of net income of investments accounted for using the equity method		(6.2)		—
Share-based payments⁽⁴⁾		15.1		12.7
Gain on divestiture⁽⁵⁾		—		(86.4)
Transaction costs⁽⁶⁾		18.1		21.0
Acquisition, rebranding and other integration costs⁽⁷⁾		6.1		9.2
Impairment and other⁽⁸⁾		(5.3)		—
Adjusted EBITDA	$	439.8	$	375.8


	Year ended		Year ended
($ millions)	December 31, 2022		December 31, 2021⁽¹⁾
Net loss from continuing operations		(183.2)		(627.0)
Add:
Interest and other finance costs		489.3		432.5
Depreciation of property and equipment		1,003.9		911.9
Amortization of intangible assets		515.6		457.6
Income tax recovery		(176.1)		(109.2)
EBITDA		1,649.5		1,065.8
Add:
Loss on foreign exchange⁽²⁾		217.7		16.2
Loss on sale of property and equipment		4.7		2.2
Mark-to-market (gain) loss on Purchase Contracts⁽³⁾		(266.8)		349.6
Share of net income of investments accounted for using the equity method		(20.7)		—
Share-based payments⁽⁴⁾		53.3		41.1
Gain on divestiture⁽⁵⁾		(4.9)		(153.3)
Transaction costs⁽⁶⁾		55.0		64.2
Acquisition, rebranding and other integration costs⁽⁷⁾		25.8		25.1
Impairment and other⁽⁸⁾		7.2		—
Adjusted EBITDA	$	1,720.8	$	1,410.9

(1)

Comparative figures have been re-presented, refer to Note 25 in our Annual Financial Statements.

(2)

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.

(3)

This is a non-cash item that consists of the fair value “mark-to-market” adjustment on the Purchase Contracts.

(4)

This is a non-cash item and consists of the amortization of the estimated fair value of share-based options granted to certain members of management under share-based option plans.

(5)

Consists of loss or gain resulting from the divestiture of certain assets.

(6)

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.

(7)

Consists of costs related to the rebranding of equipment acquired through business acquisitions. We expect to incur similar costs in connection with other acquisitions in the future. This is part of cost of sales.

(8)

Consists of impairment charge and insurance recoveries for assets that were destroyed by fire.