What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-30 · 177 added, 148 removed, 768 unchanged (30% of the section changed)

3 unchanged sentences

(in millions, except per share data)

June 30, December 31,

September 30, December 31,

Current assets:

46 unchanged sentences

(in millions, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

5 unchanged sentences

Withdrawal costs - multiemployer pension funds

— 31.6 — 35.9

Loss (gain) on business divestitures and impairments, net — 31.5 ( 0.2 ) 32.9

3 unchanged sentences

Loss from unconsolidated equity method investments ( 15.1 ) ( 8.2 ) ( 44.0 ) ( 30.8 )

Loss on extinguishment of debt — ( 34.5 ) — ( 34.5 )

Interest income 0.6 0.5 2.0 4.0

21 unchanged sentences

(in millions)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

40 unchanged sentences

319.4 3.2 2,787.1 6,106.0 ( 0.6 ) ( 107.2 ) ( 10.8 ) 5.1 8,783.4

Net income — — — 350.3 — — — 0.5 350.8

Other comprehensive income — — — — — — 1.2 — 1.2

Cash dividends declared — — — ( 146.1 ) — — — — ( 146.1 )

Issuances of common stock — — 2.5 — — ( 0.2 ) — — 2.3

Stock-based compensation — — 11.4 ( 0.8 ) — — — — 10.6

Purchase of common stock for treasury

— — — — ( 1.2 ) ( 123.3 ) — — ( 123.3 )

Balance as of September 30, 2021

319.4 $ 3.2 $ 2,801.0 $ 6,309.4 ( 1.8 ) $ ( 230.7 ) $ ( 9.6 ) $ 5.6 $ 8,878.9

The accompanying notes are an integral part of these statements.

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - (CONTINUED)

(in millions)

Republic Services, Inc.

Stockholders’ Equity

20 unchanged sentences

354.1 3.5 5,026.6 5,529.2 ( 35.9 ) ( 2,315.7 ) ( 16.5 ) 3.8 8,230.9

Net income — — — 260.0 — — — 0.2 260.2

Other comprehensive loss — — — — — — 1.0 — 1.0

Cash dividends declared — — — ( 135.4 ) — — — — ( 135.4 )

Issuances of common stock 0.3 — 8.1 — — ( 0.1 ) — — 8.0

Stock-based compensation — — 10.4 ( 1.0 ) — — — — 9.4

Balance as of September 30, 2020

354.4 $ 3.5 $ 5,045.1 $ 5,652.8 ( 35.9 ) $ ( 2,315.8 ) $ ( 15.5 ) $ 4.0 $ 8,374.1

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash provided by operating activities:

4 unchanged sentences

Stock-based compensation 49.1 29.0

Deferred tax provision 42.5 11.4

Deferred tax provision (benefit) ( 32.8 ) 45.7

Provision for doubtful accounts, net of adjustments 18.7 22.0

Loss (gain) on disposition of assets and asset impairments, net 0.2 ( 1.3 )

Loss on extinguishment of debt — 34.5

Loss on disposition of assets and asset impairments, net 0.5 30.6

Withdrawal costs - multiemployer pension funds, net of payments — 4.3

9 unchanged sentences

Other liabilities 87.6 77.0

Payments for retirement of certain hedging relationships — ( 11.4 )

Cash provided by operating activities 2,137.8 1,909.0

12 unchanged sentences

Payments of notes payable and long-term debt and senior notes ( 4,381.8 ) ( 4,101.9 )

Premiums paid on extinguishment of debt — ( 34.0 )

Issuances of common stock, net ( 7.1 ) 1.3

4 unchanged sentences

Cash used in financing activities ( 343.5 ) ( 564.3 )

(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents ( 2.2 ) 173.3

Increase in cash, cash equivalents, restricted cash and restricted cash equivalents 8.7 311.8

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year 114.2 177.4

35 unchanged sentences

As service levels decreased, we also experienced a decrease in certain costs of our operations which are variable in nature.

This decline in service activity peaked in the first half of April 2020 and improved sequentially through June 30, 2021.

This decline in service activity peaked in the first half of April 2020 and improved sequentially through September 30, 2021.

In April 2020, we launched our Committed to Serve initiative and committed $ 20 million to support frontline employees and their families, as well as small business customers in the local communities we serve.

1 unchanged sentence

These costs are intended to assist in protecting the safety of our frontline employees as we continue to provide an essential service to our customers.

In December 2020, we recognized our frontline employees for their commitment and contributions to their communities during

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 2020, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic with a $ 500 award that was paid in January 2021.

the pandemic with a $ 500 award that was paid in January 2021.

In addition, we incurred incremental costs associated with expanding certain aspects of our existing healthcare programs.

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BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

We acquired various environmental services businesses during the six months ended June 30, 2021 and 2020.

We acquired various environmental services businesses during the nine months ended September 30, 2021 and 2020.

The purchase price paid for these business acquisitions and the allocations of the purchase price follows:

16 unchanged sentences

Closure and post-closure liabilities

( 32.2 ) ( 0.7 )

Operating right-of-use lease liabilities

18 unchanged sentences

In 2021 and 2020, we acquired non-controlling equity interests in certain limited liability companies that qualified for investment tax credits under Section 48 of the Internal Revenue Code.

In exchange for our non-controlling interests, we made capital contributions of $ 22.7 million and $ 24.5 million, which were recorded to other assets in our June 30, 2021 and 2020 consolidated balance sheets, respectively.

During the three and six months ended June 30, 2021, we reduced the carrying value

In exchange for our non-controlling interests, we made capital contributions of $ 30.7 million and $ 56.7 million, which were recorded to other assets in our September 30, 2021 and 2020 consolidated balance sheets, respectively.

During the three and nine months ended September 30, 2021, we reduced the

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

of these investments by $ 12.0 million and $ 25.7 million, respectively, and during the three and six months ended June 30, 2020, we reduced the carrying value of these investments by $ 9.4 million and $ 22.6 million, respectively, as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our tax provisions reflect a benefit of approximately $ 20 million for both the three and six months ended June 30, 2021 due to the tax credits related to these investments.

Our tax provisions reflect a similar benefit of approximately $ 4 million and $ 9 million for the three and six months ended June 30, 2020, respectively.

carrying value of these investments by $ 10.0 million and $ 35.7 million, respectively, and during the three and nine months ended September 30, 2020, we reduced the carrying value of these investments by $ 8.2 million and $ 30.8 million, respectively, as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our tax provisions reflect a benefit of approximately $ 20 million for the nine months ended September 30, 2021 due to the tax credits related to these investments.

There was no tax benefit reflected due to these tax credits for the three months ended September 30, 2021.

Our tax provisions reflect a similar benefit of approximately $ 16 million and $ 25 million for the three and nine months ended September 30, 2020, respectively.

For further discussion of the income tax benefits, refer to Note 11, Income Taxes, in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020.

2 unchanged sentences

In addition, in July 2020, we eliminated certain back-office support positions in response to a decline in the underlying demand for services resulting from the COVID-19 pandemic.

During the three and six months ended June 30, 2021, we incurred restructuring charges of $ 3.8 million and $ 6.6 million, respectively, and during the three and six months ended June 30, 2020, we incurred restructuring charges of $ 2.2 million and $ 6.0 million, respectively.

During the six months ended June 30, 2021 and 2020, we paid $ 8.6 million and $ 6.2 million, respectively, related to these restructuring efforts.

During the three and nine months ended September 30, 2021, we incurred restructuring charges of $ 4.6 million and $ 11.2 million, respectively, and during the three and nine months ended September 30, 2020, we incurred restructuring charges of $ 9.8 million and $ 15.8 million, respectively.

During the nine months ended September 30, 2021 and 2020, we paid $ 12.1 million and $ 11.9 million, respectively, related to these restructuring efforts.

During the remainder of 2021, we expect to incur additional restructuring charges of approximately $ 5 million primarily related to the redesign of certain of our back-office software systems.

3 unchanged sentences

Balance as of December 31, 2020

Acquisitions Divestitures Adjustments to Acquisitions Balance as of June 30, 2021

Acquisitions Divestitures Adjustments to Acquisitions Balance as of September 30, 2021

Group 1 $ 6,404.9 $ 134.4 $ — $ ( 16.4 ) $ 6,522.9

2 unchanged sentences

Total $ 12,046.4 $ 706.2 $ — $ ( 16.3 ) $ 12,736.3

Adjustments to acquisitions during the six months ended June 30, 2021 primarily related to changes in our valuation of customer relationship intangible assets as a result of obtaining new information regarding the acquisitions that closed in December 2020.

Adjustments to acquisitions during the nine months ended September 30, 2021 primarily related to changes in our valuation of customer relationship intangible assets as a result of obtaining new information regarding the acquisitions that closed in December 2020.

Other Intangible Assets, Net

3 unchanged sentences

Balance as of December 31, 2020 Acquisitions Adjustments

Balance as of June 30, 2021 Balance as of December 31, 2020 Additions Charged to Expense Adjustments

Balance as of June 30, 2021 Other Intangible Assets, Net as of June 30, 2021

Balance as of September 30, 2021 Balance as of December 31, 2020 Additions Charged to Expense Adjustments

Balance as of September 30, 2021 Other Intangible Assets, Net as of September 30, 2021

Customer relationships

8 unchanged sentences

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of June 30, 2021 and December 31, 2020 follows:

Income taxes receivable $ 67.8 $ 170.7

A summary of prepaid expenses and other current assets as of September 30, 2021 and December 31, 2020 follows:

Prepaid expenses $ 99.5 $ 77.7

Inventories 68.2 59.1

Reinsurance receivable 35.2 34.1

Other non-trade receivables 38.7 32.2

Reinsurance receivable 32.6 34.1

Prepaid fees for cloud-based hosting arrangements, current 13.2 11.8

Income taxes receivable 6.1 170.7

Other current assets 6.0 6.7

Total $ 264.3 $ 392.3

A summary of other assets as of June 30, 2021 and December 31, 2020 follows:

A summary of other assets as of September 30, 2021 and December 31, 2020 follows:

Operating right-of-use lease assets $ 244.0 $ 218.8

12 unchanged sentences

Other Accrued Liabilities

A summary of other accrued liabilities as of June 30, 2021 and December 31, 2020 follows:

A summary of other accrued liabilities as of September 30, 2021 and December 31, 2020 follows:

Accrued payroll and benefits $ 246.7 $ 221.1

10 unchanged sentences

Other Long-Term Liabilities

A summary of other long-term liabilities as of June 30, 2021 and December 31, 2020 follows:

A summary of other long-term liabilities as of September 30, 2021 and December 31, 2020 follows:

Operating right-of-use lease liabilities $ 229.9 $ 206.6

1 unchanged sentence

Ceded insurance reserves 82.9 84.8

Other derivative liabilities 70.0 103.0

Contingent purchase price and acquisition holdbacks 65.1 67.3

Other derivative liabilities 56.3 103.0

Withdrawal liability - multiemployer pension funds 22.3 22.3

4 unchanged sentences

LANDFILL AND ENVIRONMENTAL COSTS

As of June 30, 2021, we owned or operated 199 active solid waste landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards.

As of September 30, 2021, we owned or operated 198 active solid waste landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards.

Additionally, we had post-closure responsibility for 129 closed landfills.

Accrued Landfill and Environmental Costs

A summary of accrued landfill and environmental liabilities as of June 30, 2021 and December 31, 2020 follows:

A summary of accrued landfill and environmental liabilities as of September 30, 2021 and December 31, 2020 follows:

Landfill final capping, closure and post-closure liabilities $ 1,445.1 $ 1,346.4

4 unchanged sentences

Final Capping, Closure and Post-Closure Costs

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the six months ended June 30, 2021 and 2020:

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the nine months ended September 30, 2021 and 2020:

Asset retirement obligation liabilities, beginning of year $ 1,346.4 $ 1,335.6

22 unchanged sentences

It is reasonably possible that we will need to adjust the liabilities recorded for remediation to reflect the effects of new or additional information, to the extent such information impacts the costs, timing or duration of the required actions.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of June 30, 2021 would be approximately $ 356 million higher than the amount recorded.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of September 30, 2021 would be approximately $ 352 million higher than the amount recorded.

Future changes in our estimates of the cost, timing or duration of the required actions could have a material adverse effect on our consolidated financial position, results of operations and cash flows.

The following table summarizes the activity in our environmental remediation liabilities for the six months ended June 30, 2021 and 2020:

The following table summarizes the activity in our environmental remediation liabilities for the nine months ended September 30, 2021 and 2020:

Environmental remediation liabilities, beginning of year $ 462.8 $ 500.2

7 unchanged sentences

Bridgeton Landfill.

During the six months ended June 30, 2021, we paid $ 9.9 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

During the nine months ended September 30, 2021, we paid $ 14.0 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

We continue to work with state and federal regulatory agencies on our remediation efforts.

From time to time, this may require us to modify our future operating timeline and procedures, which could result in changes to our expected liability.

As of June 30, 2021, the remediation liability recorded for this site was $ 111.8 million, of which approximately $ 8 million is expected to be paid during the remainder of 2021.

We believe the remaining reasonably possible high end of our range would be approximately $ 140 million higher than the amount recorded as of June 30, 2021.

As of September 30, 2021, the remediation liability recorded for this site was $ 107.7 million, of which approximately $ 4 million is expected to be paid during the remainder of 2021.

We believe the remaining reasonably possible high end of our range would be approximately $ 140 million higher than the amount recorded as of September 30, 2021.

West Lake Landfill Superfund Site .

9 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The carrying value of our credit facilities, finance leases and long-term debt as of June 30, 2021 and December 31, 2020 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting.

The carrying value of our credit facilities, finance leases and long-term debt as of September 30, 2021 and December 31, 2020 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting.

Original issue discounts, deferred issuance costs, and adjustments to fair value recorded in purchase accounting are amortized to interest expense over the term of the applicable instrument using the effective interest method.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value

6 unchanged sentences

Variable — — — 186.0 — 186.0

$ 3.0 billion - August 2026

Variable 364.7 — 364.7 — — —

Senior notes:

26 unchanged sentences

The 364-Day Credit Facility

In August 2020, we entered into a $ 1.0 billion 364-day unsecured revolving credit facility (the 364-Day Credit Facility), which matures in August 2021.

At our option, borrowings under the 364-Day Credit Facility bear interest at a Base Rate, or a Eurodollar Rate, plus an applicable margin based on our Debt Ratings (all as defined in the 364-Day Credit Facility agreement).

In August 2020, we entered into a $ 1.0 billion 364-day unsecured revolving credit facility (the 364-Day Credit Facility), which matured in August 2021.

As of December 31, 2020, we had no borrowings outstanding under our 364-Day Credit Facility.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The 364-Day Credit Facility is subject to facility fees based on applicable rates defined in the 364-Day Credit Facility agreement and the aggregate commitment, regardless of usage.

Availability under our 364-Day Credit Facility totaled $ 1.0 billion as of June 30, 2021 and December 31, 2020.

The 364-Day Credit Facility can be used for working capital, capital expenditures, acquisitions, and other general corporate purposes.

The 364-Day Credit Facility agreement requires us to comply with financial and other covenants, which are consistent with the financial and other covenants included in our Credit Facility.

We may pay dividends and repurchase common stock if we are in compliance with these covenants.

As of June 30, 2021 and December 31, 2020, we had no borrowings outstanding under our 364-Day Credit Facility.

The Credit Facility

In 2018, we entered into a $ 2.25 billion unsecured revolving credit facility (as amended, the Credit Facility), which matures in June 2023.

In August 2021, we entered into a $ 3.0 billion unsecured revolving credit facility (as amended, the Credit Facility), which amends and restates the prior $ 2.25 billion unsecured revolving credit facility which would have matured in June 2023 (the Replaced Credit Facility).

Borrowings under the Credit Facility mature in August 2026.

As permitted by the Credit Facility, we have the right to request two one -year extensions of the maturity date, but none of the lenders are committed to participate in such extension.

The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $ 1.0 billion through increased commitments from existing lenders or the addition of new lenders.

At our option, borrowings under the Credit Facility bear interest at a Base Rate, or a Eurodollar Rate, plus an applicable margin based on our Debt Ratings (all as defined in the Credit Facility agreement).

At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating London Interbank Offered Rate (LIBOR), or a Eurodollar Rate, plus an applicable margin based on our Debt Ratings (all as defined in the Credit Facility agreement).

On the earliest of (i) the date that all available tenors of U.S.

dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a secured overnight financing rate (“SOFR”), the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date.

The Credit Facility is subject to facility fees based on applicable rates defined in the Credit Facility agreement and the aggregate commitment, regardless of usage.

Availability under our Credit Facility totaled $ 1,808.5 million and $ 1,671.8 million as of June 30, 2021 and December 31, 2020, respectively.

Availability under our Credit Facility totaled $ 2,296.7 million as of September 30, 2021.

The Credit Facility can be used for working capital, capital expenditures, acquisitions, letters of credit and other general corporate purposes.

1 unchanged sentence

We may pay dividends and repurchase common stock if we are in compliance with these covenants.

We had $ 100.0 million and $ 186.0 million outstanding under our Credit Facility as of June 30, 2021 and December 31, 2020, respectively.

We had $ 341.5 million and $ 376.5 million of letters of credit outstanding under our Credit Facility as of June 30, 2021 and December 31, 2020, respectively.

We had $ 364.7 million and $ 186.0 million outstanding under our Credit Facility and Replaced Credit Facility as of September 30, 2021 and December 31, 2020, respectively.

We had $ 338.6 million and $ 376.5 million of letters of credit outstanding under our Credit Facility and Replaced Credit Facility as of September 30, 2021 and December 31, 2020, respectively.

Uncommitted Credit Facility

3 unchanged sentences

The Uncommitted Credit Facility may be terminated by either party at any time.

As of June 30, 2021, we had $ 113.7 million outstanding under our Uncommitted Credit Facility.

As of September 30, 2021, we had $ 98.1 million outstanding under our Uncommitted Credit Facility.

As of December 31, 2020 , we had no borrowings outstanding under our Uncommitted Credit Facility.

5 unchanged sentences

We used the net proceeds to redeem all $ 600.0 million of the outstanding 5.250 % senior notes due November 2021 plus a make-whole premium of $ 34.0 million.

Additionally, we incurred a non-cash charge related to the unamortized deferred issuance costs of $ 0.5 million.

The remaining proceeds were used for general corporate purposes.

7 unchanged sentences

Historically, we have managed risk associated with executing this strategy, particularly as it relates to fluctuations in interest rates, by using a combination of fixed and floating rate debt.

From time to time, we also have entered into interest rate swap and lock agreements

From time to time, we also have entered into interest rate swap and lock agreements to manage risk associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

to manage risk associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).

Fair Value Hedges

1 unchanged sentence

The goal was to reduce overall borrowing costs and rebalance our debt portfolio's ratio of fixed-to-floating interest rates.

As of June 30, 2021, these swap agreements had a total notional value of $ 300.0 million and mature in May 2023, which is identical to the maturity of the hedged senior notes.

As of September 30, 2021, these swap agreements had a total notional value of $ 300.0 million and mature in May 2023, which is identical to the maturity of the hedged senior notes.

We pay interest at floating rates based on changes in LIBOR and receive interest at a fixed rate of 4.750 %.

These transactions were designated as fair value hedges because the swaps hedge against the changes in fair value of the fixed rate senior notes resulting from changes in interest rates.

Contemporaneously with the $ 250.0 million partial redemption of the 4.750 % Notes, we dedesignated the proportional share of these swap agreements as fair value hedges.

Contemporaneously with the $ 250.0 million partial redemption of the 4.750 % Notes in November 2020, we dedesignated the proportional share of these swap agreements as fair value hedges.

There was no ineffectiveness recognized in the dedesignation of these fair value hedges.

Following the dedesignation, the fair value of these free-standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).

As of June 30, 2021 and December 31, 2020, these free-standing derivatives were reflected at their fair value of $ 6.3 million and $ 8.3 million, respectively, and were included in other assets in our consolidated balance sheets.

For the three and six months ended June 30, 2021, we recognized a loss of $ 0.8 million and $ 2.0 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives.

As of June 30, 2021 and December 31, 2020, the interest rate swap agreements that were designated as fair value hedges were reflected at their fair value of $ 7.6 million and $ 10.0 million, respectively, and were included in other assets in our consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, these free-standing derivatives were reflected at their fair value of $ 5.5 million and $ 8.3 million, respectively, and were included in other assets in our consolidated balance sheets.

For the three and nine months ended September 30, 2021, we recognized a loss of $ 0.8 million and $ 2.8 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives.

As of September 30, 2021 and December 31, 2020, the interest rate swap agreements that were designated as fair value hedges were reflected at their fair value of $ 6.6 million and $ 10.0 million, respectively, and were included in other assets in our consolidated balance sheets.

To the extent they are effective, these interest rate swap agreements are included as an adjustment to long-term debt in our consolidated balance sheets.

We recognized net interest income of $ 2.0 million and $ 1.3 million during the three months ended June 30, 2021 and 2020, respectively, and net interest income of $ 3.9 million and $ 2.0 million during the six months ended June 30, 2021 and 2020, respectively, related to net settlements for these interest rate swap agreements, which was included as an offset to interest expense in our consolidated statements of income.

For the three months ended June 30, 2021 and 2020, we recognized gains of $ 1.1 million and less than $ 0.1 million, respectively, on the change in fair value of the hedged senior notes and an offsetting loss of $ 1.0 million and gain of $ 0.8 million, respectively, on the related interest rate swaps, both attributable to changes in the benchmark interest rate.

For the six months ended June 30, 2021 and 2020, we recognized a gain of $ 2.6 million and a loss of $ 9.7 million, respectively, on the change in fair value of the hedged senior notes with an offsetting loss of $ 2.4 million and an offsetting gain of $ 11.1 million on the related interest rate swaps, both attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three and six months ended June 30, 2021 and 2020 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

We recognized net interest income of $ 2.0 million and $ 1.8 million during the three months ended September 30, 2021 and 2020, respectively, and net interest income of $ 5.9 million and $ 3.8 million during the nine months ended September 30, 2021 and 2020, respectively, related to net settlements for these interest rate swap agreements, which was included as an offset to interest expense in our consolidated statements of income.

For the three months ended September 30, 2021 and 2020, we recognized gains of $ 0.9 million and $ 2.1 million, respectively, on the change in fair value of the hedged senior notes and offsetting losses of $ 1.0 million and $ 1.8 million, respectively, on the related interest rate swaps, both attributable to changes in the benchmark interest rate.

For the nine months ended September 30, 2021 and 2020, we recognized a gain of $ 3.5 million and a loss of $ 7.5 million, respectively, on the change in fair value of the hedged senior notes with an offsetting loss of $ 3.3 million and an offsetting gain of $ 9.3 million on the related interest rate swaps, both attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three and nine months ended September 30, 2021 and 2020 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

For further detail regarding the effect of our fair value hedging on interest expense, refer to Note 11, Financial Instruments , of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

3 unchanged sentences

These transactions were accounted for as cash flow hedges.

All of our cash flow hedges settled on or before December 31, 2020, thus there was no related asset or liability as of June 30, 2021 or December 31, 2020.

All of our cash flow hedges settled on or before December 31, 2020, thus there was no related asset or liability as of September 30, 2021 or December 31, 2020.

The fair value of our interest rate locks is determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).

There was no unrealized gain or loss recognized in other comprehensive income for the three or six months ended June 30, 2021.

For the three and six months ended June 30, 2020, total unrealized loss recognized in other comprehensive income for interest rate locks was $ 0.1 million and $ 22.3 million, net of tax, respectively.

As of June 30, 2021 and December 31, 2020, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss, net of tax of $ 28.1 million and $ 30.4 million, respectively.

There was no unrealized gain or loss recognized in other comprehensive income for the three or nine months ended September 30, 2021.

For the three and nine months ended September 30, 2020, total unrealized loss recognized in other comprehensive income for interest rate locks was $ 0.2 million and $ 22.5 million, net of tax, respectively.

As of September 30, 2021 and December 31, 2020, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss, net of tax of $ 26.9 million and $ 30.4 million, respectively.

The amortization of the terminated interest rate locks is recorded as an adjustment to interest expense over the life of the issued debt using the effective interest method.

Over the next 12 months, we expect to amortize approximately $ 4.4 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

For further detail regarding the effect of our cash flow hedging on interest expense, refer to Note 11, Financial Instruments , of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Derivative Contracts

4 unchanged sentences

The fair value of these free-standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).

As of June 30, 2021 and December 31, 2020, the fair values of the Extended Interest Rate Locks were liabilities of $ 70.0 million and $ 103.0 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

As of June 30, 2021 and December 31, 2020, the fair value of the Offsetting Interest Rate Swaps were assets of $ 26.2 million and $ 55.5 million, respectively, which were included in other assets in our consolidated balance sheet.

For the three and six months ended June 30, 2021, we recognized losses of $ 18.2 million and gains of $ 28.9 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $ 17.6 million and offsetting losses of $ 29.1 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

For the three and six months ended June 30, 2020, we recognized losses of $ 10.2 million and $ 71.5 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $ 10.6 million and $ 69.2 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

As of September 30, 2021 and December 31, 2020, the fair values of the Extended Interest Rate Locks were liabilities of $ 56.3 million and $ 103.0 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, the fair value of the Offsetting Interest Rate Swaps were assets of $ 16.0 million and $ 55.5 million, respectively, which were included in other assets in our consolidated balance sheet.

For the three and nine months ended September 30, 2021, we recognized gains of $ 9.7 million and $ 38.7 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 10.1 million and $ 39.2 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

For the three and nine months ended September 30, 2020, we recognized a gain of $ 8.6 million and a loss of $ 62.9 million, respectively, on the change in fair value of the Extended Interest Rate Locks with an offsetting loss of $ 8.6 million and an offsetting gain of $ 60.7 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

The changes in fair value were recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

Tax-Exempt Financings

As of June 30, 2021 and December 31, 2020, we had $ 1,104.9 million and $ 1,104.7 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2021 to 2050.

As of September 30, 2021 we had $ 1,151.6 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2023 to 2051.

As of December 31, 2020, we had $ 1,104.7 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2021 to 2050.

During the third quarter of 2021, we issued $ 175.0 million of tax exempt financings.

During the second quarter of 2020, we issued $ 60.0 million of tax-exempt financings.

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If the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us.

In the event of a failed remarketing, we currently have availability under our $ 2.25 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of June 30, 2021 and December 31, 2020.

In the event of a failed remarketing, we currently have availability under our Credit Facility to fund these bonds until they are remarketed successfully.

Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of September 30, 2021 and December 31, 2020.

Finance Leases

We had finance lease liabilities of $ 246.3 million and $ 206.5 million as of June 30, 2021 and December 31, 2020, respectively, with maturities ranging from 2021 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2021 was 22.4 % and 24.1 %, respectively.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2020 was 24.7 % and 24.1 %, respectively.

Cash paid for income taxes was $ 54.3 million for the six months ended June 30, 2021 and $ 6.6 million for the same period in 2020.

We had finance lease liabilities of $ 244.5 million and $ 206.5 million as of September 30, 2021 and December 31, 2020, respectively, with maturities ranging from 2021 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three and nine months ended September 30, 2021 was 25.5 % and 24.6 %, respectively.

Our effective tax rate, exclusive of non-controlling interests, for the three and nine months ended September 30, 2020 was 18.4 % and 22.1 %, respectively.

Cash paid for income taxes was $ 182.1 million for the nine months ended September 30, 2021 and $ 34.2 million for the same period in 2020.

The year over year increase results from tax refunds received in the prior year that did not recur in 2021 and higher projected taxable income in the current year.

We have deferred tax assets related to state net operating loss carryforwards.

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The realization of our deferred tax asset for state loss carryforwards ultimately depends upon the existence of sufficient taxable income in the appropriate state taxing jurisdictions in future periods.

The weight given to the positive and negative evidence is

The weight given to the positive and negative evidence is commensurate with the extent such evidence can be objectively verified.

We continue to regularly monitor both positive and

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

commensurate with the extent such evidence can be objectively verified.

We continue to regularly monitor both positive and negative evidence in determining the ongoing need for a valuation allowance.

As of June 30, 2021, the valuation allowance associated with our state loss carryforwards was approximately $ 43 million.

negative evidence in determining the ongoing need for a valuation allowance.

As of September 30, 2021, the valuation allowance associated with our state loss carryforwards was approximately $ 45 million.

We are subject to income tax in the United States, as well as in multiple state jurisdictions.

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Our federal statute of limitations is closed for all years prior to 2015.

We are currently under examination by the Internal Revenue Service (IRS) for tax years 2015 through 2017 and recently received an informal notification from the IRS of their intent to expand their examination to include our 2018 tax year.

We are currently under examination by the Internal Revenue Service (IRS) for tax years 2015 through 2018.

In addition, we are currently under state examination or administrative review in various jurisdictions for tax years 2012 through 2019.

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However, a significant assessment against us in excess of the liabilities recorded could have a material adverse effect on our consolidated financial position, results of operations and cash flows.

As of June 30, 2021, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

As of September 30, 2021, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

We recognize interest and penalties as incurred within the provision for income taxes in the consolidated statement of income.

As of June 30, 2021, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 13.1 million related to our uncertain tax positions.

As of September 30, 2021, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 13.3 million related to our uncertain tax positions.

STOCK REPURCHASES, DIVIDENDS AND EARNINGS PER SHARE

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Stock Repurchases

Stock repurchase activity during the three and six months ended June 30, 2021 and 2020 follows (in millions, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Number of shares repurchased 0.3 — 0.4 1.2

Amount paid $ 27.4 $ — $ 40.1 $ 98.8

Weighted average cost per share $ 108.68 $ — $ 101.84 $ 85.06

As of June 30, 2021, 0.5 million repurchased shares were pending settlement.

As of June 30, 2021, $52.1 million of share repurchases were unpaid and included within other accrued liabilities.

As of June 30, 2020, no repurchased shares were pending settlement.

In October 2020, our Board of Directors approved a $ 2.0 billion share repurchase authorization effective starting January 1, 2021 and extending through December 31, 2023.

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While the Board of Directors has approved the program, the timing of any purchases, the prices and the number of shares of common stock to be purchased will be determined by our management, at its discretion, and will depend upon market conditions and other factors.

The share repurchase program may be extended, suspended or discontinued at any time.

As of June 30, 2021, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 2.0 billion.

On a quarterly basis, our Board of Directors reviews the intrinsic value of our stock and the parameters around which we repurchase our shares.

In May 2021, our Board of Directors approved a quarterly dividend of $ 0.425 per share.

Cash dividends declared were $ 271.0 million for the six months ended June 30, 2021.

As of June 30, 2021, we recorded a quarterly dividend payable of $ 135.4 million to shareholders of record at the close of business on July 1, 2021.

Earnings per Share

Basic earnings per share is computed by dividing net income attributable to Republic Services, Inc.

by the weighted average number of common shares (including vested but unissued RSUs and PSUs) outstanding during the period.

Diluted earnings per

The share repurchase program may be extended, suspended or discontinued at any time.

Stock repurchase activity during the three and nine months ended September 30, 2021 and 2020 follows (in millions, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Number of shares repurchased 1.2 — 1.6 1.2

Amount paid $ 138.9 $ — $ 179.0 $ 98.8

Weighted average cost per share $ 117.78 $ — $ 113.79 $ 85.06

As of September 30, 2021, 0.3 million repurchased shares were pending settlement.

As of September 30, 2021, $ 36.5 million of share repurchases were unpaid and included within other accrued liabilities.

As of September 30, 2020, no repurchased shares were pending settlement.

As of September 30, 2021, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.8 billion.

In July 2021, our Board of Directors approved a quarterly dividend of $ 0.46 per share.

Cash dividends declared were $ 417.1 million for the nine months ended September 30, 2021.

As of September 30, 2021, we recorded a quarterly dividend payable of $ 146.1 million to shareholders of record at the close of business on October 1, 2021.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

share is based on the combined weighted average number of common shares and common share equivalents outstanding, which include, where appropriate, the assumed exercise of employee stock options, unvested RSUs and unvested PSUs at the expected attainment levels.

Earnings per Share

Basic earnings per share is computed by dividing net income attributable to Republic Services, Inc.

by the weighted average number of common shares (including vested but unissued restricted stock units and performance stock units) outstanding during the period.

Diluted earnings per share is based on the combined weighted average number of common shares and common share equivalents outstanding, which include, where appropriate, the assumed exercise of employee stock options, unvested restricted stock units (RSUs) and unvested performance stock units (PSUs) at the expected attainment levels.

We use the treasury stock method in computing diluted earnings per share.

Earnings per share for the three and six months ended June 30, 2021 and 2020 are calculated as follows (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Earnings per share for the three and nine months ended September 30, 2021 and 2020 are calculated as follows (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Diluted earnings per share $ 1.10 $ 0.81 $ 3.06 $ 2.29

There were less than 0.1 million antidilutive securities outstanding during each of the three and six months ended June 30, 2021 and 2020 .

There were less than 0.1 million antidilutive securities outstanding for the three and nine months ended September 30, 2021.

During the three months ended September 30, 2020, there were less than 0.1 million antidilutive securities outstanding, and during the nine months ended September 30, 2020, there were 0.1 million antidilutive securities outstanding.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT

A summary of changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2021 follows:

A summary of changes in accumulated other comprehensive loss, net of tax, by component, for the nine months ended September 30, 2021 follows:

Cash Flow Hedges Defined Benefit Pension Items Total

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Net current period other comprehensive income 3.5 ( 0.7 ) 2.8

Balance as of June 30, 2021 $ ( 28.1 ) $ 17.3 $ ( 10.8 )

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

A summary of reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2021 and 2020 follows:

Three Months Ended June 30, Six Months Ended June 30,

Balance as of September 30, 2021 $ ( 26.9 ) $ 17.3 $ ( 9.6 )

A summary of reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2021 and 2020 follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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FINANCIAL INSTRUMENTS

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three and six months ended June 30, 2021 and 2020 follows (in millions):

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three and nine months ended September 30, 2021 and 2020 follows (in millions):

Classification and amount of gain (loss) recognized in income on hedging relationships and derivative instruments

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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The effects of fair value and cash flow hedging relationships in Subtopic 815-20:

Gain on fair value hedging relationships:

Gain (loss) on fair value hedging relationships:

Interest rate swaps:

Net swap settlements $ 2.0 $ 1.8 $ 5.9 $ 3.8

Net periodic earnings $ 0.1 $ 0.8 $ 0.2 $ 1.4

Net periodic (loss) earnings $ ( 0.1 ) $ 0.3 $ 0.2 $ 1.8

Loss on cash flow hedging relationships:

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Interest rate contract:

Net gain (loss) on change in fair value of free-standing derivative instruments $ ( 0.6 ) $ 0.4 $ ( 0.2 ) $ ( 2.3 )

Net loss on change in fair value of free-standing derivative instruments $ ( 0.4 ) $ — $ ( 0.5 ) $ ( 2.2 )

Fair Value Measurements

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The carrying value for certain of our financial instruments, including cash, accounts receivable, current investments, accounts payable and certain other accrued liabilities, approximates fair value because of their short-term nature.

As of June 30, 2021 and December 31, 2020, our assets and liabilities that are measured at fair value on a recurring basis include the following:

June 30, 2021

As of September 30, 2021 and December 31, 2020, our assets and liabilities that are measured at fair value on a recurring basis include the following:

September 30, 2021

Carrying Amount Total Quoted

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Total liabilities $ 173.6 $ 173.6 $ — $ 103.0 $ 70.6

The carrying value of our total debt was $ 9.0 billion and $ 8.9 billion as of June 30, 2021 and December 31, 2020, respectively, and the fair value of our total debt was $ 9.8 billion and $ 10.0 billion, respectively.

The carrying value of our total debt was $ 9.3 billion and $ 8.9 billion as of September 30, 2021 and December 31, 2020, respectively, and the fair value of our total debt was $ 10.1 billion and $ 10.0 billion, respectively.

The estimated fair value of our fixed rate senior notes and debentures is based on quoted market prices.

The fair value of our remaining notes payable, tax-exempt financings and borrowings under our credit facilities approximates the carrying value because the interest rates are variable.

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of June 30, 2021 and December 31, 2020.

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of September 30, 2021 and December 31, 2020.

See Note 7, Debt , for further information related to our debt.

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In 2015, we entered into a waste management contract with the County of Sonoma, California to operate the county's waste management facilities.

As of June 30, 2021, the Sonoma contingent consideration represents the fair value of $ 63.4 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

As of September 30, 2021, the Sonoma contingent consideration represents the fair value of $ 62.9 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

The potential undiscounted amount of all future contingent payments that we could be required to make under the waste management contract is estimated to be between approximately $ 80 million and $ 100 million.

During the six months ended June 30, 2021, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business.

During the nine months ended September 30, 2021, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business.

There were no changes to the estimate of fair value.

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Each of our operating segments provides integrated environmental services, including collection, transfer, recycling, and disposal.

Summarized financial information concerning our reportable segments for the three and six months ended June 30, 2021 and 2020 follows:

Summarized financial information concerning our reportable segments for the three and nine months ended September 30, 2021 and 2020 follows:

Gross Revenue Intercompany Revenue Net Revenue Depreciation, Amortization, Depletion and Accretion Operating Income (Loss) Capital Expenditures Total Assets

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Group 1 $ 1,719.5 $ ( 277.9 ) $ 1,441.6 $ 140.7 $ 391.1 $ 144.3 $ 12,018.7

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Total $ 3,461.3 $ ( 527.4 ) $ 2,933.9 $ 322.1 $ 564.2 $ 295.6 $ 24,428.9

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Group 1 $ 1,544.2 $ ( 254.1 ) $ 1,290.1 $ 131.2 $ 349.7 $ 117.7 $ 11,530.4

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Gross Revenue Intercompany Revenue Net Revenue Depreciation, Amortization, Depletion and Accretion Operating Income (Loss) Capital Expenditures Total Assets

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Group 1 $ 4,935.4 $ ( 801.9 ) $ 4,133.5 $ 411.5 $ 1,122.4 $ 420.6 $ 12,018.7

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Total $ 9,851.9 $ ( 1,509.7 ) $ 8,342.2 $ 948.4 $ 1,574.5 $ 904.2 $ 24,428.9

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Group 1 $ 4,526.6 $ ( 751.8 ) $ 3,774.8 $ 390.5 $ 983.7 $ 403.4 $ 11,530.4

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Total $ 8,987.6 $ ( 1,407.2 ) $ 7,580.4 $ 870.8 $ 1,276.4 $ 889.0 $ 23,110.1

Financial information for the three and six months ended June 30, 2020 reflects the transfer of our environmental solutions operating segment from Group 2 to Corporate entities and other.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Financial information for the three and nine months ended September 30, 2020 reflects the transfer of our Environmental Solutions operating segment from Group 2 to Corporate entities and other.

Intercompany revenue reflects transactions within and between segments that generally are made on a basis intended to reflect the market value of such services.

Capital expenditures for Corporate entities and other primarily include vehicle inventory acquired but not yet assigned to operating locations and facilities.

Corporate functions include legal, tax, treasury, information technology, risk management, human resources, closed landfills, environmental solutions, and other administrative functions.

Corporate functions include legal, tax, treasury, information technology, risk management, human resources, closed landfills, other administrative functions, and environmental solutions.

REVENUE AND CREDIT LOSSES

Our operations primarily consist of providing environmental services.

The following table disaggregates our revenue by service line for the three and six months ended June 30, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Three Months Ended June 30, Six Months Ended June 30,

The following table disaggregates our revenue by service line for the three and nine months ended September 30, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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In the event that we bill for services in advance of performance, we recognize deferred revenue for the amount billed and subsequently recognize revenue at the time the service is provided.

Substantially all of the deferred revenue recognized as of December 31, 2020 was recognized as revenue during the six months ended June 30, 2021 when the service was performed.

Substantially all of the deferred revenue recognized as of December 31, 2020 was recognized as revenue during the nine months ended September 30, 2021 when the service was performed.

See Note 12, Segment Reporting , for additional information regarding revenue by reportable segment.

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We do not disclose the value of unsatisfied performance obligations for these contracts as our 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.

Additionally, certain elements of our long-term customer contracts are unknown upon entering into the contract, including the amount that will be billed in accordance with annual price escalation clauses, our fuel recovery fee program and commodity

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The amount to be billed is often tied to changes in an underlying base index such as a consumer price index or a fuel or commodity index, and revenue can be recognized once the index is established for the period.

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In addition, we recognize sales commissions that represent an incremental cost of the contract as other assets in our consolidated balance sheets, and we amortize the asset over the average life of the customer relationship.

As of June 30, 2021 and December 31, 2020, we recognized $ 80.1 million and $ 82.3 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and six months ended June 30, 2021, we amortized $ 3.2 million and $ 6.4 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.6 million and $ 3.1 million, respectively, of other deferred contract costs as a reduction of revenue.

During the three and six months ended June 30, 2020, we amortized $ 3.2 million and $ 6.2 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.7 million and $ 3.3 million, respectively, of other deferred contract costs as a reduction of revenue.

As of September 30, 2021 and December 31, 2020, we recognized $ 80.1 million and $ 82.3 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and nine months ended September 30, 2021, we amortized $ 3.0 million and $ 9.4 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.5 million and $ 4.6 million, respectively, of other deferred contract costs as a reduction of revenue.

During the three and nine months ended September 30, 2020, we amortized $ 2.9 million and $ 9.1 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.6 million and $ 4.9 million, respectively, of other deferred contract costs as a reduction of revenue.

Credit Losses

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We perform ongoing credit evaluations of our customers, but generally do not require collateral to support customer receivables.

The following table reflects the activity in our allowance for doubtful accounts for the six months ended June 30, 2021 and 2020:

The following table reflects the activity in our allowance for doubtful accounts for the nine months ended September 30, 2021 and 2020:

Balance at beginning of year $ 34.7 $ 34.0

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We accrue for legal proceedings when losses become probable and reasonably estimable.

We have recorded an aggregate accrual of approximately $ 28 million relating to our outstanding legal proceedings as of June 30, 2021.

As of the end of each applicable reporting period, we review each of our legal proceedings and, where it is probable that a liability has been incurred, we accrue for all probable and reasonably estimable losses.

Where we can reasonably estimate a range of losses we may incur regarding such a matter, we record an accrual for the amount within the range that constitutes our best estimate.

We have recorded an aggregate accrual of approximately $ 27 million relating to our outstanding legal proceedings as of September 30, 2021.

As of the end of each applicable reporting period, we review each of our legal proceedings and, where it is probable that a liability has been

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

reasonably estimate a range but no amount within the range appears to be a better estimate than any other, we use the amount that is the low end of such range.

If we had used the high ends of such ranges, our aggregate potential liability would be approximately $ 10 million higher than the amount recorded as of June 30, 2021.

incurred, we accrue for all probable and reasonably estimable losses.

Where we can reasonably estimate a range of losses we may incur regarding such a matter, we record an accrual for the amount within the range that constitutes our best estimate.

If we can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, we use the amount that is the low end of such range.

If we had used the high ends of such ranges, our aggregate potential liability would be approximately $ 4 million higher than the amount recorded as of September 30, 2021.

Multiemployer Pension Plans

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Beginning-of-period and end-of-period cash, cash equivalents, restricted cash and restricted cash equivalents as presented in the statement of cash flows is reconciled as follows:

June 30, 2021 December 31, 2020 June 30, 2020 December 31, 2019

September 30, 2021 December 31, 2020 September 30, 2020 December 31, 2019

Cash and cash equivalents $ 40.1 $ 38.2 $ 406.4 $ 47.1

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The following table summarizes our restricted cash and marketable securities:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Capping, closure and post-closure obligations $ 42.2 $ 31.5

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements