What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-06 compared with 2021-10-29 · 215 added, 277 removed, 307 unchanged (62% of the section changed)

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Words such as “guidance,” “expect,” “will,” “may,” “anticipate,” “plan,” “estimate,” “project,” “intend,” “should,” “can,” “likely,” “could,” “outlook” and similar expressions are intended to identify forward-looking statements.

In particular, information appearing in this “Management's Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements, including, but not limited to, the information set forth under the caption “Recent Developments – Updated Full-Year 2021 Adjusted Earnings Per Share Guidance.” These statements include information about our plans, strategies, expectations of future financial performance and prospects.

In particular, information appearing in this “Management's Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements.

These statements include information about our plans, strategies, and expectations of future financial performance and prospects.

Forward-looking statements are not guarantees of performance.

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Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that the expectations will prove to be correct.

Among the factors that could cause actual results to differ materially from the expectations expressed in the forward-looking statements are the effects of the COVID-19 pandemic and actions taken in response thereto, as well as acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States as well as our dependence on large, long-term collection, transfer and disposal contracts.

More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2020, particularly under Part I, Item 1A - Risk Factors.

into our operations and to realize the intended benefits of such acquisition, as well as acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States as well as our dependence on large, long-term collection, transfer and disposal contracts.

More information on factors that could cause actual results or events to differ materially from those anticipated is included below under Part II, Item 1A.

- Risk Factors and from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2021.

Additionally, new risk factors emerge from time to time and it is not possible for us to predict all such risk factors, or to assess the impact such risk factors might have on our business.

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In March 2020, the World Health Organization declared the outbreak of a new strain of coronavirus (COVID-19) a pandemic.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets.

The full extent of the impact of the COVID-19 pandemic on our operations and financial performance will depend on future developments, including the duration and spread of the pandemic and the impact of COVID-19 variants, all of which are uncertain and cannot be predicted at this time.

In mid-March 2020, certain customers in our small- and large-container businesses began adjusting their service levels, which included a decrease in the frequency of pickups or a temporary pause in service.

In 2020, certain customers in our small- and large-container businesses began adjusting their service levels, which included a decrease in the frequency of pickups or a temporary pause in service.

In addition, we experienced a decline in volumes disposed at certain of our landfills and transfer stations.

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 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 where we serve.

In addition to this initiative, we have experienced an increase in certain costs of doing business as a direct result of the COVID-19 pandemic, including costs for additional safety equipment and hygiene products and increased facility and equipment cleaning.

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 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.

We expect to incur similar costs throughout 2021, and potentially into future years, although we expect the amount of such costs annually to be less than those incurred in 2020.

This decline in service activity peaked in 2020 and has improved sequentially thereafter, returning to pre-pandemic levels in 2022.

In 2020 and 2021, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic through our Committed to Serve program with two awards that were paid in January 2021 and November 2021.

The effects of the COVID-19 pandemic on our business are described in more detail in the Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations .

Recent Developments

Updated Full-Year 2021 Adjusted Earnings Per Share Guidance

The following is a summary of anticipated adjusted diluted earnings per share for the year ending December 31, 2021.

Adjusted diluted earnings per share is not a measure determined in accordance with U.S.

(Anticipated)

December 31, 2021

Diluted earnings per share $4.01 to $4.04

Restructuring charges 0.04

Accelerated vesting of compensation expense for CEO transition 0.05

Adjusted diluted earnings per share $4.10 to $4.13

We believe that presenting adjusted diluted earnings per share provides an understanding of operational activities before the financial impact of certain items.

We use this measure, and believe investors will find it helpful, in understanding the ongoing performance of our operations separate from items that have a disproportionate impact on our results for a particular period.

We have incurred comparable charges, costs and recoveries in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods.

Our definition of adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

The guidance set forth above constitutes forward-looking information and is not a guarantee of future performance.

The guidance is based upon the current beliefs and expectations of our management and is subject to significant risk and uncertainties that could cause actual results to differ materially from those shown above.

See “Disclosure Regarding Forward-Looking Statements.”

US Ecology, Inc.

On May 2, 2022, we acquired all outstanding shares of US Ecology, Inc.

(US Ecology) in a transaction valued at $2.2 billion.

US Ecology is a leading provider of environmental solutions offering treatment, recycling and disposal of hazardous, non-hazardous and specialty waste.

This acquisition expands our existing environmental solutions footprint and adds a national platform to provide customers with environmental solutions from collection to disposal, including recycling, solid waste, special waste, hazardous waste, container rental and field services.

We financed the transaction through the entry into a $1.0 billion unsecured Term Loan Credit Agreement (Term Loan Facility), and the remaining purchase price was funded using borrowings on our $3.0 billion unsecured revolving credit facility.

Republic is one of the largest providers of environmental services in the United States, as measured by revenue.

As of September 30, 2021, we operated facilities in 41 states through 355 collection operations, 238 transfer stations, 198 active landfills, 73 recycling processing centers, 3 treatment, recovery and disposal facilities, 2 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells and 7 deep injection wells.

We are engaged in 75 landfill gas to energy and renewable energy projects and had post-closure responsibility for 129 closed landfills as of September 30, 2021.

Revenue for the nine months ended September 30, 2021 increased by 10.0% to $8,342.2 million compared to $7,580.4 million for the same period in 2020.

This change in revenue is due to increased volume of 3.8%, average yield of 2.7%, acquisitions, net of divestitures of 2.1%, recycling processing and commodity sales of 1.2%, and fuel recovery fees of 0.6%, partially offset by decreased environmental solutions revenue of 0.2%.

Additionally, revenue decreased 0.2% due to the impact of one less workday during the nine months ended September 30, 2021 as compared to the same period in 2020.

The following table summarizes our revenue, expenses and operating income 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

As of March 31, 2022, we operated facilities in 41 states through 355 collection operations, 238 transfer stations, 198 active landfills, 71 recycling processing centers, 3 treatment, recovery and disposal facilities, 3 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells and 7 deep injection wells.

We are engaged in 75 landfill gas-to-energy and renewable energy projects and had post-closure responsibility for 124 closed landfills as of March 31, 2022.

Revenue for the three months ended March 31, 2022 increased by 14.4% to $2,968.8 million compared to $2,595.9 million for the same period in 2021.

This change in revenue is due to increased volume of 3.6%, average yield of 4.2%, acquisitions, net of divestitures of 3.9%, recycling processing and commodity sales of 0.4%, fuel recovery fees of 1.9%, and increased environmental solutions revenue of 0.4%.

The following table summarizes our revenue, expenses and operating income for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

Revenue $ 2,968.8 100.0 % $ 2,595.9 100.0 %

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Selling, general and administrative 307.8 10.4 265.4 10.2

Withdrawal costs - multiemployer pension funds

— — — — — — 35.9 0.5

Loss (gain) on business divestitures and impairments, net — — 31.5 1.2 (0.2) — 32.9 0.4

Gain on business divestitures and impairments, net — — (1.1) —

Restructuring charges 6.0 0.2 2.8 —

Operating income $ 560.6 18.9 % $ 492.4 19.0 %

Our pre-tax income was $470.7 million and $1,298.2 million for the three and nine months ended September 30, 2021, respectively, compared to $318.7 million and $941.4 million for the same respective periods in 2020.

Our pre-tax income was $472.2 million for the three months ended March 31, 2022 compared to $400.1 million for the same period in 2021.

Our net income attributable to Republic Services, Inc.

was $350.3 million and $977.3 million for the three and nine months ended September 30, 2021, or $1.10 and $3.06 per diluted share, respectively, compared to $260.0 million and $731.8 million, or $0.81 and $2.29 per diluted share, for the same periods in 2020, respectively.

During each of the three and nine months ended September 30, 2021 and 2020, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, net income attributable to Republic Services, Inc.

was $352.0 million for the three months ended March 31, 2022, or $1.11 per diluted share, compared to $295.9 million, or $0.93 per diluted share, for the same period in 2021.

During each of the three months ended March 31, 2022 and 2021, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax expense, net income attributable to Republic Services, Inc.

(net income – Republic) and diluted earnings per share as noted in the following table (in millions, except per share data).

Additionally, see our Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of other items that impacted our earnings during the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Net Diluted Net Diluted

Pre-tax Income - Earnings Pre-tax Income - Earnings

Income Republic per Share Income Republic per Share

As reported $ 470.7 $ 350.3 $ 1.10 $ 318.7 $ 260.0 $ 0.81

Loss on extinguishment of debt — — — 34.5 25.5 0.08

Restructuring charges 4.6 3.4 0.01 9.8 7.2 0.02

Loss on business divestitures and impairments, net — — — 31.5 26.6 0.09

Total adjustments 4.6 3.4 0.01 75.8 59.3 0.19

As adjusted $ 475.3 $ 353.7 $ 1.11 $ 394.5 $ 319.3 $ 1.00

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Net Diluted Net Diluted

Pre-tax Income - Earnings Pre-tax Income - Earnings

Income Republic per Share Income Republic per Share

Pre-tax Tax Income - Earnings Pre-tax Tax Income - Earnings

Income Impact (2)

Republic per Share Income Impact (2)

Republic per Share

As reported $ 472.2 $ 120.3 $ 352.0 $ 1.11 $ 400.1 $ 103.7 $ 295.9 $ 0.93

Loss on extinguishment of debt — — — 34.5 25.5 0.08

Restructuring charges (1)

(Gain) loss on business divestitures and impairments, net (1)

6.0 1.6 4.4 0.02 2.8 0.7 2.1 —

Withdrawal costs - multiemployer pension funds — — — 35.9 26.5 0.08

Bridgeton insurance recovery — — — (10.8) (8.2) (0.03)

Accelerated vesting of compensation expense for CEO transition 15.4 15.4 0.05 — — —

Gain on business divestitures and impairments, net (1)

— — — — (1.1) (0.3) (0.8) —

US Ecology, Inc.

acquisition integration and deal costs 4.8 0.5 4.3 0.01 — — — —

Total adjustments 10.8 2.1 8.7 0.03 1.7 0.4 1.3 —

As adjusted $ 483.0 $ 122.4 $ 360.7 $ 1.14 $ 401.8 $ 104.1 $ 297.2 $ 0.93

(1) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the nine months ended September 30, 2021.

We believe that presenting adjusted pre-tax income, adjusted net income – Republic, and adjusted diluted earnings per share, which are not measures determined in accordance with U.S.

(1) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the three months ended March 31, 2021.

(2) The income tax effect related to our adjustments includes both current and deferred income tax impact and is individually calculated based on the statutory rates applicable to each adjustment.

We believe that presenting adjusted pre-tax income, adjusted tax impact, adjusted net income – Republic, and adjusted diluted earnings per share, which are not measures determined in accordance with U.S.

GAAP, provides an understanding of operational activities before the financial impact of certain items.

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We have incurred comparable charges, costs and recoveries in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods.

Our definitions of adjusted pre-tax income, adjusted net income – Republic, and adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

Our definitions of adjusted pre-tax income, adjusted tax impact, adjusted net income – Republic, and adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

Further information on each of these adjustments is included below.

Loss on extinguishment of debt.

During the three and nine months ended September 30, 2020, we incurred a $34.5 million loss on the early extinguishment of debt related to the redemption of our $600.0 million 5.250% senior notes due November 2021.

We paid a cash premium of $34.0 million and incurred a non-cash charge related to the unamortized deferred issuance costs of $0.5 million.

Restructuring charges.

In 2020, we incurred costs related to the redesign of certain back-office software systems, which continued into 2021.

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 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.

Substantially all of these restructuring charges will be recorded in Corporate entities and other.

Loss (gain) on business divestitures and impairments, net.

During the nine months ended September 30, 2021, we recorded a net gain on business divestitures and impairments of $(0.2) million.

During the three and nine months ended September 30, 2020, we recorded a net loss on business divestitures and impairments of $31.5 million and $32.9 million, respectively.

Withdrawal costs - multiemployer pension funds.

During the nine months ended September 30, 2020, we recorded charges to earnings of $35.9 million for withdrawal events at multiemployer pension funds to which we contribute.

As we obtain updated information regarding multiemployer pension funds, the factors used in deriving our estimated withdrawal liabilities will be subject to change, which may adversely impact our reserves for withdrawal costs.

Bridgeton insurance recovery.

During the nine months ended September 30, 2020, we recognized an insurance recovery of $10.8 million related to our closed Bridgeton Landfill in Missouri as a reduction of remediation expenses in our cost of operations.

Accelerated vesting of compensation expense for CEO transition.

In June 2021, Donald W.

Slager retired as Chief Executive Officer (CEO) of Republic Services, Inc.

During the nine months ended September 30, 2021, we recognized a charge of $15.4 million related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

During the three months ended March 31, 2022 and 2021, we incurred restructuring charges of $6.0 million and $2.8 million, respectively, related to the redesign of certain back-office software systems.

During the same periods, we paid $5.9 million and $4.0 million, respectively, related to these restructuring efforts.

During the remainder of 2022, we expect to incur additional restructuring charges of approximately $10 million to $15 million primarily related to the redesign of certain of our back-office software systems.

Substantially all of these restructuring charges will be recorded in our corporate entities and other segment.

Gain on business divestitures and impairments, net.

During the three months ended March 31, 2021, we recorded a net gain on business divestitures and impairments of $1.1 million.

US Ecology, Inc.

acquisition integration and deal costs .

During the three months ended March 31, 2022, we incurred $4.8 million of acquisition integration and deal costs in connection with the acquisition of US Ecology, which closed on May 2, 2022.

Results of Operations

We generate revenue by providing environmental services to our customers, including the collection and processing of recyclable materials, the collection, transfer and disposal of non-hazardous solid waste, and other environmental solutions.

Our residential, small-container and large-container collection operations in some markets are based on long-term contracts with municipalities.

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Consequently, substantially all of this revenue is offset with related subcontract costs, which are recorded in cost of operations.

The following table reflects 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

The following table reflects our revenue by service line for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

$ 627.9 21.1 % $ 593.1 22.8 %

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Environmental solutions 108.9 39.0

intercompany (9.6) (4.1)

Environmental solutions, net

99.3 3.4 34.9 1.3

Recycling processing and commodity sales

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Total revenue $ 2,968.8 100.0 % $ 2,595.9 100.0 %

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three and nine months ended September 30, 2021 and 2020:

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

2021 2020 2021 2020

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Average yield 4.2 % 2.3 %

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Core price is defined as price increases to our customers and fees, excluding fuel recovery fees, net of price decreases to retain customers.

We also measure changes in average yield and core price as a percentage of related-business revenue, defined as total revenue excluding recycled commodities and fuel recovery fees, to determine the effectiveness of our pricing strategies.

Average yield as a percentage of related-business revenue was 3.4% and 2.9% for the three and nine months ended September 30, 2021, respectively, and 2.8% for each of the same respective periods in 2020.

Core price as a percentage of related-business revenue was 5.4% and 5.1% for the three and nine months ended September 30, 2021, respectively, and 4.8% and 5.1% for the same respective periods in 2020.

During the three and nine months ended September 30, 2021, we experienced the following changes in our revenue as compared to the same respective periods in 2020:

• Average yield increased revenue by 3.2% and 2.7% during the three months and nine months ended September 30, 2021, respectively, due to price increases in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, increased revenue by 1.3% and 0.6% during the three and nine months ended September 30, 2021, respectively, primarily due to an increase in fuel prices compared to the same periods in 2020.

• Volume increased revenue by 4.3% and 3.8% during the three and nine months ended September 30, 2021, respectively, primarily due to volume growth in our landfill, transfer, and small- and large-container collection lines of business.

The volume increase in our landfill line of business is primarily attributable to increased solid and special waste volumes.

In mid-March 2020, certain customers in these lines of business began adjusting their service levels as a result of the COVID-19 pandemic.

This decline in service activity peaked in the first half of April 2020 and sequentially improved thereafter.

• Revenue decreased by 0.2% due to one less workday during the nine months ended September 30, 2021 as compared to the same period in 2020.

• Recycling processing and commodity sales increased revenue by 1.6% and 1.2% during the three and nine months ended September 30, 2021, respectively, primarily due to an increase in overall commodity prices as compared to the same periods in 2020.

The average price for recycled commodities, excluding glass and organics, for the three and nine months ended September 30, 2021 was $230 and $178 per ton, respectively, compared to $99 and $92 per ton for the same respective periods in 2020.

We also measure changes in average yield and core price as a percentage of related-business revenue, defined as total revenue excluding recycled commodities, fuel recovery fees and environmental solutions revenue, to determine the effectiveness of our pricing strategies.

Average yield as a percentage of related-business revenue was 4.5% and 2.5% for the three months ended March 31, 2022 and 2021, respectively.

Core price as a percentage of related-business revenue was 6.5% and 4.5% for the three months ended March 31, 2022 and 2021, respectively.

During the three months ended March 31, 2022, we experienced the following changes in our revenue as compared to the same respective period in 2021:

• Average yield increased revenue by 4.2% during the three months ended March 31, 2022 due to price increases in all our collection and disposal lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, increased revenue by 1.9% during the three months ended March 31, 2022 primarily due to an increase in fuel prices compared to the same period in 2021.

• Volume increased revenue by 3.6% during the three months ended March 31, 2022, primarily due to volume growth in our small- and large-container collection, landfill, and transfer lines of business, partially offset by a decrease in volume in our residential line of business.

The volume increase in our landfill line of business is primarily attributable to increased solid waste, special waste, and construction and demolition volumes.

• Recycling processing and commodity sales increased revenue by 0.4% during the three months ended March 31, 2022 primarily due to an increase in overall commodity prices as compared to the same period in 2021.

The average price for recycled commodities, excluding glass and organics, for the three months ended March 31, 2022 was $201 per ton compared to $133 per ton for the same period in 2021.

Changing market demand for recycled commodities causes volatility in commodity prices.

At current volumes and mix of materials, we believe a $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $10 million.

• Environmental solutions revenue decreased by 0.2% during the nine months ended September 30, 2021 primarily due to a decrease in rig counts, drilling activity, and the delay of in-plant project work that began during the second quarter of 2020 as a result of lower demand for crude oil.

Rig counts and drilling activity have sequentially improved during

the nine months ended September 30, 2021 but remain below pre-COVID levels.

Consequently, environmental solutions revenue increased by 0.2% during the three months ended September 30, 2021.

• Acquisitions, net of divestitures, increased revenue by 3.5% and 2.1% during the three and nine months ended September 30, 2021, respectively, reflecting our continued growth strategy of acquiring privately held solid waste, recycling, and environmental services companies that complement and expand our existing business platform.

• Environmental solutions revenue increased by 0.4% during the three months ended March 31, 2022 primarily due to an increase in volumes, including those driven by an increase in rig counts and drilling activity.

• Acquisitions, net of divestitures, increased revenue by 3.9% during the three months ended March 31, 2022, reflecting our continued growth strategy of acquiring privately held solid waste, recycling, and environmental services companies that complement and expand our existing business platform.

Cost of Operations

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and other, which includes expenses such as facility operating costs, equipment rent and gains or losses on sale of assets used in our operations.

The following table summarizes the major components of our cost of operations 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

The following table summarizes the major components of our cost of operations for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

Labor and related benefits $ 608.9 20.5 % $ 555.7 21.4 %

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Other 121.1 4.1 106.1 4.1

1,744.0 59.4 1,535.4 59.7 4,928.0 59.1 4,564.1 60.2

Bridgeton insurance recovery

— — — — — — (10.8) (0.1)

Total cost of operations $ 1,762.3 59.4 % $ 1,533.8 59.1 %

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As such, you should take care when comparing our cost of operations by component to that of other companies and of ours for prior periods.

The most significant items impacting our cost of operations during the three and nine months ended September 30, 2021 and 2020 are summarized below:

• Labor and related benefits increased in aggregate dollars due to higher hourly and salaried wages as a result of annual merit increases and an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

These increases were partially offset by one less workday during the nine months ended September 30, 2021 as compared to the same period in 2020.

The most significant items impacting our cost of operations during the three months ended March 31, 2022 and 2021 are summarized below:

• Labor and related benefits increased in aggregate dollars due to higher hourly and salaried wages as a result of annual merit increases along with additional headcount attributable to acquisition-related growth, and an increase in service levels attributable to economic recovery from the COVID-19 pandemic.

• Transfer and disposal costs increased in aggregate dollars as a result of higher collection volumes and an increase in third party disposal rates.

During both the three and nine months ended September 30, 2021 and 2020, approximately 68% of the total solid waste volume we collected was disposed at landfill sites that we own or operate (internalization).

• During the three months ended March 31, 2022 and 2021, approximately 69% of the total solid waste volume we collected was disposed at landfill sites that we own or operate (internalization).

• Maintenance and repairs expense increased in aggregate dollars due to an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

• Transportation and subcontract costs increased during the three and nine months ended September 30, 2021 primarily due to higher collection and transfer station volumes, acquisition-related activity, and increased subcontract work

attributable to an increase in non-core revenues, partially offset by one less workday during the nine months ended September 30, 2021 as compared to the same period in 2020.

• Transportation and subcontract costs increased during the three months ended March 31, 2022 primarily due to higher collection and transfer station volumes, acquisition-related activity, and increased subcontract work attributable to an increase in non-core revenues as compared to the same period in 2021.

• Our fuel costs increased due to an increase in the average diesel fuel cost per gallon.

The national average diesel fuel cost per gallon for the three and nine months ended September 30, 2021 was $3.36 and $3.16, respectively, as compared to $2.43 and $2.58 for the same respective periods in 2020.

The national average diesel fuel cost per gallon for the three months ended March 31, 2022 was $4.24 as compared to $2.91 for the same period in 2021.

At current consumption levels, we believe a twenty-cent per gallon change in the price of diesel fuel would change our fuel costs by approximately $26 million per year.

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At current participation rates, a twenty-cent per gallon change in the price of diesel fuel would change our fuel recovery fee by approximately $26 million per year.

• Risk management expenses increased during the three and nine months ended September 30, 2021 primarily due to unfavorable actuarial development in our auto liability claims as well as higher premium costs, partially offset by favorable workers compensation development in prior year programs.

• Other costs of operations increased during the three and nine months ended September 30, 2021 due to increased occupancy and facility related expenses partially offset by certain costs associated with our Committed to Serve initiative recognized during the nine months ended September 30, 2020, which did not recur in the same respective period in 2021.

• During the nine months ended September 30, 2020, we recognized a favorable insurance recovery of $10.8 million related to our closed Bridgeton Landfill as a reduction of remediation expenses in our consolidated statement of income for the applicable period.

• Landfill operating costs increased in aggregate dollars primarily due to increased leachate treatment, transportation and disposal costs due in part to increased rainfall in select geographic regions, as well as landfill gas and other maintenance costs.

• Risk management expenses increased during the three months ended March 31, 2022 primarily due to favorable actuarial developments in the prior year that did not recur in the current year.

• Other costs of operations increased during the three months ended March 31, 2022 due to increased occupancy and facility related expenses as well as higher third-party truck and equipment rentals supporting higher volumes.

Depreciation, Amortization and Depletion of Property and Equipment

The following table summarizes depreciation, amortization and depletion of property and equipment 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

The following table summarizes depreciation, amortization and depletion of property and equipment for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

Depreciation and amortization of property and equipment

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$ 289.6 9.7 % $ 264.8 10.2 %

Depreciation and amortization of property and equipment increased for the three and nine months ended September 30, 2021 primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased due to higher landfill disposal volumes primarily driven by special and solid waste volumes coupled with an increase in our overall average depletion rate.

Additionally, we recognized unfavorable amortization adjustments related to the asset retirement obligation at certain of our closed landfills during the three and nine months ended September 30, 2021.

Depreciation and amortization of property and equipment increased for the three months ended March 31, 2022 primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased due to higher landfill disposal volumes primarily driven by solid waste, special waste and construction and demolition waste volumes coupled with an increase in our overall average depletion rate.

These increases were partially offset by an unfavorable amortization adjustment related to the asset retirement obligation at one of our closed landfills during the three months ended March 31, 2021, which did not recur in 2022.

Amortization of Other Intangible Assets

Amortization of other intangible assets primarily relates to customer relationships and, to a lesser extent, non-compete agreements.

Expenses for amortization of other intangible assets were $8.5 million and $23.5 million, or 0.3% of revenue, for the three and nine months ended September 30, 2021, respectively, compared to $5.3 million and $15.8 million, or 0.2% of revenue, for the same respective periods in 2020.

Expenses for amortization of other intangible assets were $10.0 million, or 0.3% of revenue, for the three months

ended March 31, 2022 compared to $7.3 million, or 0.3% of revenue, for the same respective period in 2021.

Amortization expense increased due to assets added through acquisitions.

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Our other assets primarily relate to the prepayment of fees and capitalized implementation costs associated with cloud-based hosting arrangements.

Expenses for amortization of other assets were $10.1 million and $30.2 million, or 0.4% of revenue, for the three and nine months ended September 30, 2021, respectively, compared to $9.9 million and $28.9 million, or 0.4% of revenue, for the same respective periods in 2020.

Expenses for amortization of other assets were $10.8 million, or 0.4% of revenue, for the three months ended March 31, 2022 compared to $10.0 million, or 0.4% of revenue, for the same respective period in 2021.

Accretion Expense

Accretion expense was $20.8 million and $61.9 million, or 0.7% of revenue, for the three and nine months ended September 30, 2021, respectively, compared to $20.7 million and $62.4 million, or 0.8% of revenue, for the same respective periods in 2020.

Accretion expense was $21.7 million, or 0.7% of revenue, for the three months ended March 31, 2022 compared to $20.5 million, or 0.8% of revenue, for the same respective period in 2021.

Accretion expense has remained relatively unchanged as our asset retirement obligations have remained relatively consistent period over period.

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Restructuring charges are excluded from selling, general and administrative expenses and are discussed separately.

The following table summarizes our selling, general and administrative expenses 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

The following table summarizes our selling, general and administrative expenses for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

Salaries and related benefits $ 212.9 7.2 % $ 194.3 7.4 %

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Subtotal 303.0 10.2 265.4 10.2

Accelerated vesting of compensation expense for CEO transition — — — — 15.4 0.2 — —

US Ecology, Inc.

acquisition integration and deal costs 4.8 0.2 — —

Total selling, general and administrative expenses

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As such, you should take care when comparing our selling, general and administrative expenses by cost component to those of other companies and of ours for prior periods.

The most significant items affecting our selling, general and administrative expenses during the three and nine months ended September 30, 2021 and 2020 are summarized below:

• Salaries and related benefits increased primarily due to higher management incentive expenses.

• Other selling, general and administrative expenses increased for the three months ended September 30, 2021 largely due an increase in recruiting and advertising costs.

Consulting fees increased during the third quarter but decreased for the nine months ended September 30, 2021.

Additionally, we recognized an unfavorable change in certain legal reserves during the nine months ended September 30, 2020 that did not recur in 2021.

• In June 2021, Donald W.

Slager retired as CEO of Republic Services, Inc.

Withdrawal Costs - Multiemployer Pension Funds

During the nine months ended September 30, 2020, we recorded charges to earnings of $35.9 million for withdrawal events at multiemployer pension funds to which we contribute.

Loss (Gain) on Business Divestitures and Impairments, Net

The most significant items affecting our selling, general and administrative expenses during the three months ended March 31, 2022 and 2021 are summarized below:

• Salaries and related benefits increased in aggregate dollars primarily due to higher incentive pay and wages, benefits, and other payroll related items resulting from annual merit increases.

• Other selling, general and administrative expenses increased for the three months ended March 31, 2022, primarily due to an increase in advertising and travel costs.

• During the three months ended March 31, 2022, we incurred $4.8 million of acquisition integration and deal costs in connection with the acquisition of US Ecology, which closed on May 2, 2022.

Gain on Business Divestitures and Impairments, Net

We strive to have a number one or number two market position in each of the markets we serve, or have a clear path on how we will achieve a leading market position over time.

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Business divestitures could result in gains, losses or impairment charges that may be material to our results of operations in a given period.

During the nine months ended September 30, 2021, we recorded a net gain on business divestitures and impairments of $0.2 million.

During the three and nine months ended September 30, 2020, we recorded a net loss on business divestitures and impairments of $31.5 million and $32.9 million, respectively.

During the three months ended March 31, 2021, we recorded a net gain on business divestitures and impairments of $1.1 million.

No such gains were recorded during the three months ended March 31, 2022.

Restructuring Charges

In 2020, we incurred costs related to the redesign of certain back-office software systems, which continued into 2021.

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 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 same periods, we paid $5.9 million and $4.0 million, respectively, related to these restructuring efforts.

Interest Expense

The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions, for the three and nine months ended September 30, 2021 and 2020:

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

2021 2020 2021 2020

Three Months Ended March 31,

Interest expense on debt

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Total interest expense $ 83.5 $ 78.4

Total interest expense for the three and nine months ended September 30, 2021 decreased primarily due to lower interest rates on our floating and fixed rate debt.

The decrease attributable to our fixed rate debt is primarily due to the issuance of $350.0 million of 0.875% senior notes and $750.0 million of 1.750% senior notes in November 2020 as well as the issuance of $650.0 million of 1.450% senior notes in August 2020, the proceeds of which were used to repay outstanding senior notes with coupons ranging from 3.550% to 5.250%.

Cash paid for interest, excluding net swap settlements for our fixed-to-floating interest rate swaps, was $193.8 million and $246.1 million for the nine months ended September 30, 2021 and 2020, respectively.

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.

Total interest expense for the three months ended March 31, 2022 increased primarily due to higher interest rates on our floating rate debt.

Cash paid for interest, excluding net swap settlements for our fixed-to-floating interest rate swaps, was $75.6 million and $66.2 million for the three months ended March 31, 2022 and 2021, respectively.

Our effective tax rate, exclusive of non-controlling interests, for the three months ended March 31, 2022 and 2021 was 25.5% and 25.9%, respectively.

Cash paid for income taxes was a net payment of $3.7 million and a net refund of $0.4 million for the three months ended March 31, 2022 and 2021, respectively.

For additional discussion and detail regarding our income taxes, see Note 8, Income Taxes , to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Reportable Segments

In December 2020, our senior management began evaluating, overseeing and managing the financial performance of our operations through three operating segments.

Our senior management evaluates, oversees and manages the financial performance of our operations through three field groups, which are our operating segments, referred to as Group 1, Group 2, and Environmental Solutions.

Group 1 primarily consists of geographic areas located in the western United States, and Group 2 primarily consists of geographic areas located in the southeastern and mid-western United States, and the eastern seaboard of the United States.

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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 nine months ended September 30, 2021 and 2020 (in millions of dollars and as a percentage of revenue in the case of operating margin) follows:

Net Revenue Depreciation, Amortization, Depletion and Accretion Before Adjustments for Asset Retirement Obligations Adjustments to Amortization Expense for Asset Retirement Obligations Depreciation, Amortization, Depletion and Accretion Loss (Gain) on Business Divestitures and Impairments, Net Operating Income (Loss) Operating Margin

Three Months Ended September 30, 2021

Group 1 $ 1,441.6 $ 140.7 $ — $ 140.7 $ — $ 391.1 27.1 %

Group 2 1,388.0 139.4 — 139.4 — 294.0 21.2 %

Corporate entities and other 104.3 41.0 1.0 42.0 — (120.9) —

Total $ 2,933.9 $ 321.1 $ 1.0 $ 322.1 $ — $ 564.2 19.2 %

Three Months Ended September 30, 2020

Summarized financial information concerning our reportable segments for the three months ended March 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue in the case of operating margin) follows:

Net Revenue Depreciation, Amortization, Depletion and Accretion Before Adjustments for Asset Retirement Obligations Adjustments to Amortization Expense for Asset Retirement Obligations Depreciation, Amortization, Depletion and Accretion Gain on Business Divestitures and Impairments, Net Operating Income (Loss) Operating Margin

Three Months Ended March 31, 2022

Group 1 $ 1,440.4 $ 143.7 $ — $ 143.7 $ — $ 372.8 25.9 %

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Total $ 2,968.8 $ 331.6 $ 0.5 $ 332.1 $ — $ 560.6 18.9 %

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2021

Group 1 $ 1,298.6 $ 133.2 $ (1.1) $ 132.1 $ — $ 351.5 27.1 %

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Total $ 2,595.9 $ 298.9 $ 3.7 $ 302.6 $ (1.1) $ 492.4 19.0 %

Nine Months Ended September 30, 2020

Group 1 $ 3,774.8 $ 391.2 $ (0.7) $ 390.5 $ — $ 983.7 26.1 %

Group 2 3,573.3 379.3 (5.1) 374.2 — 698.5 19.5 %

Corporate entities and other 232.3 106.7 (0.6) 106.1 32.9 (405.8) —

$ 7,580.4 $ 877.2 $ (6.4) $ 870.8 $ 32.9 $ 1,276.4 16.8 %

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.

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

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Consequently, substantially all of this revenue is offset with related subcontract costs, which are recorded in cost of operations.

Significant changes in the revenue and operating margins of our reportable segments comparing the three and nine months ended September 30, 2021 and 2020 are discussed below.

Revenue for the three and nine months ended September 30, 2021 increased 11.7% and 9.5%, respectively, due to an increase in both average yield and volume in all lines of business.

Operating income in Group 1 increased from $349.7 million for the three months ended September 30, 2020, or a 27.1% operating income margin, to $391.1 million for the three months ended September 30, 2021, or a 27.1% operating income margin.

Operating income in Group 1 increased from $983.7 million for the nine months ended September 30, 2020, or a 26.1% operating income margin, to $1,122.4 million for the nine months ended September 30, 2021, or a 27.2% operating income margin.

Operating income margin for the three and nine months ended September 30, 2021 was favorably impacted by the increase in revenue attributable to economic recovery coupled with the effective management of certain operating costs.

This benefit was partially offset by an increase in fuel costs.

Revenue for the three and nine months ended September 30, 2021 increased 14.2% and 10.6%, respectively, due to an increase in average yield in all lines of business.

Additionally, volume increased in our landfill, transfer station, and small- and large-container collection lines of business, partially offset by volume declines in our residential line of business.

Operating income in Group 2 increased from $241.9 million for the three months ended September 30, 2020, or a 19.9% operating income margin, to $294.0 million for the three months ended September 30, 2021, or a 21.2% operating income margin.

Operating income in Group 2 increased from $698.5 million for the nine months ended September 30, 2020, or a 19.5% operating income margin, to $839.4 million for the nine months ended September 30, 2021, or a 21.2% operating income margin.

This benefit was partially offset by an increase in fuel costs.

Significant changes in the revenue and operating margins of our reportable segments comparing the three months ended March 31, 2022 and 2021 are discussed below.

Revenue for the three months ended March 31, 2022 increased 10.9% due to an increase in both average yield in all lines of business.

Additionally, volume increased in our residential, small- and large-container collection lines of business, as well as our transfer station and landfill lines of business.

The increase in landfill volume was attributable to an increase in solid waste, construction and demolition waste and special waste volumes.

Revenue also increased due to acquisition-related growth.

Operating income in Group 1 increased from $351.5 million for the three months ended March 31, 2021, or a 27.1% operating income margin, to $372.8 million for the three months ended March 31, 2022, or a 25.9% operating income margin.

Operating income margin for the three months ended March 31, 2022 was unfavorably impacted by higher disposal costs due to an increase in third party disposal rates and higher transportation and subcontract costs driven by an increase in volume.

Revenue for the three months ended March 31, 2022 increased 12.9% due to an increase in average yield in all lines of business.

Additionally, volume increased in our landfill, transfer station, and small- and large-container collection lines of business.

These increases were partially offset by volume declines in our residential line of business.

The increase in landfill volume was attributable to an increase in construction and demolition and special waste volumes.

Revenue also increased due to acquisition-related growth.

Operating income in Group 2 increased from $261.8 million for the three months ended March 31, 2021, or a 21.4% operating income margin, to $319.4 million for the three months ended March 31, 2022, or a 23.1% operating income margin.

Operating income margin for the three months ended March 31, 2022 was favorably impacted by the increase in revenue attributable to the economic recovery from the COVID-19 pandemic coupled with the effective management of certain operating costs, primarily labor and related benefits, disposal costs, and maintenance and repairs.

The favorable impact was partially offset by higher transportation and subcontract costs driven by an increase in volume.

Corporate Entities and Other

The Corporate entities and other operating loss decreased from $143.7 million for the three months ended September 30, 2020 to $120.9 million for the three months ended September 30, 2021.

The Corporate entities and other operating loss decreased from $405.8 million for the nine months ended September 30, 2020 to $387.3 million for the nine months ended September 30, 2021.

The operating loss for the three and nine months ended September 30, 2021 was impacted by favorable CNG tax credits recognized during the respective periods as well as a net loss on business divestitures and impairments and favorable remediation adjustments recognized during the nine months ended September 30, 2020, which did not recur at the same magnitude in 2021.

Operating loss in our Corporate entities and other segment increased from $120.9 million for the three months ended March 31, 2021 to $131.6 million for the three months ended March 31, 2022.

The change in the operating loss for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to an increase in acquisition deal and integration costs as well as restructuring costs.

Landfill and Environmental Matters

Available Airspace

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.

As of March 31, 2022, we owned or operated 198 active solid waste landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards.

For these landfills, the following table reflects changes in capacity and remaining capacity, as measured in cubic yards of airspace:

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Net of Closures Airspace

Consumed Changes in Engineering Estimates Balance as of September 30, 2021

Consumed Changes in Engineering Estimates Balance as of March 31, 2022

Cubic yards (in millions):

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Before airspace included in an expansion area is determined to be probable expansion airspace and, therefore, included in our calculation of total available disposal capacity, it must meet all of our expansion criteria.

As of September 30, 2021, 12 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

As of March 31, 2022, 11 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

At projected annual volumes, these landfills have an estimated remaining average site life of 33 years, including probable expansion airspace.

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Property and Equipment

The following tables reflect the activity in our property and equipment accounts for the nine months ended September 30, 2021:

The following tables reflect the activity in our property and equipment accounts for the three months ended March 31, 2022:

Gross Property and Equipment

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Obligations Impairments,

Adjustments Balance as of September 30, 2021

Adjustments Balance as of March 31, 2022

Land $ 694.9 $ 0.1 $ (1.4) $ 20.5 $ — $ — $ — $ 714.1

Non-depletable landfill land 166.3 0.1 — (0.4) — — 0.8 166.8

Landfill development costs 8,539.6 — — 18.6 12.7 1.0 74.0 8,645.9

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Obligations Impairments,

Adjustments Balance as of September 30, 2021

Adjustments Balance as of March 31, 2022

Landfill development costs $ (4,625.6) $ (96.5) $ — $ — $ (0.5) $ — $ (4,722.6)

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The following is a summary of our cash and cash equivalents and restricted cash and marketable securities balances as of:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cash and cash equivalents $ 39.0 $ 29.0

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Cash, cash equivalents, restricted cash and restricted cash equivalents $ 97.1 $ 105.6

Our restricted cash and marketable securities include, among other things, restricted cash and marketable securities pledged to regulatory agencies and governmental entities as financial guarantees of our performance under certain collection, landfill and transfer station contracts and permits, and relating to our final capping, closure and post-closure obligations at our landfills as well as restricted cash and marketable securities related to our insurance obligations.

Our restricted cash and marketable securities include, among other things, restricted cash related to proceeds from the issuance of tax-exempt bonds that will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, restricted cash and marketable securities pledged to regulatory agencies and governmental entities as financial guarantees of our performance under certain collection, landfill and transfer station contracts and permits, and relating to our final capping, closure and post-closure obligations at our landfills as well as restricted cash and marketable securities related to our insurance obligations.

The following table summarizes our restricted cash and marketable securities:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Financing proceeds $ 6.2 $ 12.4

Capping, closure and post-closure obligations 42.4 42.4

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Total restricted cash and marketable securities $ 117.2 $ 139.0

Intended Uses of Cash

We intend to use excess cash on hand and cash from operating activities to fund capital expenditures, acquisitions, dividend payments, share repurchases and debt repayments.

Debt repayments may include purchases of our outstanding indebtedness in the secondary market or otherwise.

We believe that our excess cash, cash from operating activities and our availability to draw on our credit facilities provide us with sufficient financial resources to meet our anticipated capital requirements and maturing obligations as they come due.

Material Cash Requirements and Intended Uses of Cash

We expect existing cash, cash equivalents, restricted cash and marketable securities, cash flows from operations and financing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future.

Our known current- and long-term uses of cash include, among other possible demands:

(1) capital expenditures and leases;

(2) acquisitions;

(3) dividend payments;

share repurchases;

(5) repayments to service debt and other long-term obligations;

and (6) payments for asset retirement obligations and environmental liabilities.

We may choose to voluntarily retire certain portions of our outstanding debt before their maturity dates using cash from operations or additional borrowings.

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The loss on early extinguishment of debt relates to premiums paid to effectuate the repurchase and the relative portion of unamortized note discounts and debt issue costs.

Our acquisition growth strategy focuses primarily on acquiring privately held recycling and solid waste companies and environmental solutions businesses that complement our existing business platform.

We continue to invest in value-enhancing acquisitions in existing markets.

On May 2, 2022, we acquired all outstanding shares of US Ecology in a transaction valued at $2.2 billion.

US Ecology is a leading provider of environmental solutions offering treatment, recycling and disposal of hazardous, non-hazardous and specialty waste.

We financed the transaction through the entry into a $1.0 billion unsecured Term Loan Facility, and the remaining purchase price was funded using borrowings on our $3.0 billion unsecured revolving credit facility.

We expect to invest at least $500 million in additional acquisitions in 2022.

Summary of Cash Flow Activity

The major components of changes in cash flows are discussed in the following paragraphs.

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Cash provided by operating activities $ 705.6 $ 661.0

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Cash Flows Provided by Operating Activities

The most significant items affecting the comparison of our operating cash flows for the nine months ended September 30, 2021 and 2020 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, increased our cash flow from operations by $81.6 million during the nine months ended September 30, 2021, compared to an increase of $75.7 million during the same period in 2020, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $137.7 million during the nine months ended September 30, 2021 due to the timing of billings net of collections, compared to a $3.4 million decrease in the same period in 2020.

As of September 30, 2021, our days sales outstanding

were 39.2, or 27.4 days net of deferred revenue, compared to 38.9, or 26.8 days net of deferred revenue, as of September 30, 2020.

• Our prepaid expenses and other assets decreased $105.7 million during the nine months ended September 30, 2021, compared to a $135.0 million decrease in the same period in 2020, primarily due to the change in our estimated tax liability and timing of estimated tax payments.

Cash paid for incomes taxes was $182.1 million and $34.2 million for the nine months ended September 30, 2021 and 2020, respectively.

• Our accounts payable increased $99.4 million during the nine months ended September 30, 2021, compared to a $60.4 million decrease in the same period in 2020, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $41.2 million during the nine months ended September 30, 2021, compared to $39.5 million in the same period in 2020.

We use cash flows from operations to fund capital expenditures and leases, acquisitions, dividend payments, share repurchases, repayments to service debt and other long-term obligations, and payments for asset retirement obligations and environmental liabilities.

The most significant items affecting the comparison of our operating cash flows for the three months ended March 31, 2022 and 2021 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, decreased our cash flow from operations by $46.6 million during the three months ended March 31, 2022, compared to a decrease of $0.1 million during the same period in 2021, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $38.4 million during the three months ended March 31, 2022 due to the timing of billings net of collections, compared to a $8.9 million increase in the same period in 2021.

As of March 31, 2022, our days sales outstanding were 40.0, or 27.5 days net of deferred revenue, compared to 38.4, or 25.8 days net of deferred revenue, as of March 31, 2021.

• Our prepaid expenses and other assets decreased $54.8 million during the three months ended March 31, 2022, compared to a $62.5 million decrease in the same period in 2021, primarily due to a decrease of prepaid taxes due to the timing of our estimated tax payments.

Cash paid for incomes taxes were net refunds of $3.7 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively.

• Our accounts payable increased $73.0 million during the three months ended March 31, 2022, compared to a $27.6 million increase in the same period in 2021, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $7.1 million during the three months ended March 31, 2022, compared to $11.0 million in the same period in 2021.

The increase in cash paid for capping, closure, and post-closure obligations is primarily due to the timing of capping and post-closure payments at certain of our landfill sites.

• Cash paid for remediation obligations was $7.6 million lower during the nine months ended September 30, 2021, compared to the same period in 2020, primarily due to $14.0 million of payments related to management and monitoring of the remediation area of our closed Bridgeton Landfill in Missouri during the nine months ended September 30, 2021 as compared to $19.8 million of payments for the same period in 2020.

In addition, cash paid for interest, excluding net swap settlements for our fixed-to-floating interest rate swaps, was $193.8 million and $246.1 million for the nine months ended September 30, 2021 and 2020, respectively.

We use cash flows from operations to fund capital expenditures, acquisitions, dividend payments, share repurchases and debt repayments.

• Cash paid for remediation obligations was $1.1 million higher during the three months ended March 31, 2022, compared to the same period in 2021.

• Our other liabilities decreased $118.9 million during the three months ended March 31, 2022, compared to a $61.4 million decrease in the same period in 2021, primarily due to the payment of incentive compensation accruals.

In addition, cash paid for interest, excluding net swap settlements for our fixed-to-floating interest rate swaps, was $75.6 million and $66.2 million for the three months ended March 31, 2022 and 2021, respectively.

Cash Flows Used in Investing Activities

The most significant items affecting the comparison of our cash flows used in investing activities for the nine months ended September 30, 2021 and 2020 are summarized below:

• Capital expenditures during the nine months ended September 30, 2021 were $904.2 million, compared with $889.0 million for the same period in 2020.

• During the nine months ended September 30, 2021 and 2020, we paid $936.3 million and $189.9 million, respectively, for acquisitions and investments.

During the nine months ended September 30, 2021 and 2020, we received $46.3 million and $32.5 million for business divestitures, respectively.

We intend to finance capital expenditures and acquisitions through cash on hand, cash flows from operations, our revolving credit facilities, and tax-exempt bonds and other financings.

The most significant items affecting the comparison of our cash flows used in investing activities for the three months ended March 31, 2022 and 2021 are summarized below:

• Capital expenditures during the three months ended March 31, 2022 were $334.1 million, compared with $331.0 million for the same period in 2021.

• During the three months ended March 31, 2022 and 2021, we paid $81.6 million and $18.0 million, respectively, for acquisitions and investments.

During the three months ended March 31, 2022, we did not have any business divestitures.

During the three months ended March 31, 2021, we received $0.8 million for business divestitures.

We intend to finance capital expenditures and acquisitions through cash on hand, restricted cash held for capital expenditures, cash flows from operations, our revolving credit facilities, and tax-exempt bonds and other financings.

We expect to primarily use cash, and borrowings under our revolving credit facilities to pay for future business acquisitions.

Cash Flows Used in Financing Activities

The most significant items affecting the comparison of our cash flows used in financing activities for the nine months ended September 30, 2021 and 2020 are summarized below:

• Net proceeds from notes payable and long-term debt and senior notes were $264.7 million during the nine months ended September 30, 2021, compared to net payments of $35.8 million in the same period in 2020.

• During the nine months ended September 30, 2021, we repurchased 1.6 million shares of our stock for $179.0 million compared to repurchases of 1.2 million shares for $98.8 million during the same period in 2020.

• Dividends paid were $406.5 million and $387.1 million during the nine months ended September 30, 2021 and 2020, respectively.

• During the nine months ended September 30, 2021 and 2020, cash paid for purchase price holdback releases and contingent purchase price related to acquisitions was $14.4 million and $9.7 million, respectively.

The most significant items affecting the comparison of our cash flows used in financing activities for the three months ended March 31, 2022 and 2021 are summarized below:

• Net proceeds from notes payable and long-term debt and senior notes were $48.0 million during the three months ended March 31, 2022, compared to net payments of $180.1 million in the same period in 2021.

• During the three months ended March 31, 2022, we repurchased 1.6 million shares of our stock for $203.5 million compared to repurchases of 0.1 million shares for $12.7 million during the same period in 2021.

• Dividends paid were $145.9 million and $135.5 million during the three months ended March 31, 2022 and 2021, respectively.

• During the three months ended March 31, 2022 and 2021, cash paid for purchase price holdback releases and contingent purchase price related to acquisitions was $1.8 million and $1.7 million, respectively.

Financial Condition

Debt Obligations

As of September 30, 2021, we had $8.0 million of principal debt maturing within the next 12 months, which includes certain variable rate tax-exempt financings and finance lease obligations.

As of March 31, 2022, we had $8.8 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations.

All of our tax-exempt financings are remarketed either quarterly or semiannually by remarketing agents to effectively maintain a variable yield.

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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 $3.0

billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of September 30, 2021.

In the event of a failed remarketing, as of March 31, 2022, we had availability under our $3.0 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of March 31, 2022.

For further discussion of the components of our overall debt, see Note 7, Debt, of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Credit Facilities

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 matured in August 2021.

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

The Credit Facility

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).

The Credit Facility matures in August 2026.

In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the 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, 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).

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 a current applicable margin of 0.910% 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.

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 $2,296.7 million as of September 30, 2021.

Availability under our Credit Facility totaled $2,661.1 million and $2,633.8 million as of March 31, 2022 and December 31, 2021, respectively.

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

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

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.

We had no balance and $24.3 million outstanding under our Credit Facility as of March 31, 2022 and December 31, 2021, respectively.

We had $338.9 million and $341.9 million of letters of credit outstanding under our Credit Facility as of March 31, 2022 and December 31, 2021, respectively.

On May 2, 2022, we acquired all outstanding shares of US Ecology in a transaction valued at $2.2 billion, using proceeds from a $1.0 billion Term Loan Facility and borrowings on our $3.0 billion unsecured revolving credit facility.

As of May 2, 2022, we had $1,200.0 million outstanding and $338.9 million of letters of credit outstanding under our Credit Facility following our acquisition of US Ecology.

Availability under our Credit Facility totaled $1,461.1 million as of May 2, 2022.

Uncommitted Credit Facility

We also have an Uncommitted Credit Facility, which bears interest at LIBOR or a Cost of Funds rate (both as defined in the Uncommitted Credit Facility agreement), plus an applicable margin.

We can use borrowings under the Uncommitted Credit Facility for working capital and other general corporate purposes.

In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaced the prior $135.0 million uncommitted credit facility (the Replaced Uncommitted Credit Facility).

The Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties.

Borrowings under the Uncommitted Credit Facility can be used for working capital, letters of credit, and other general corporate purposes.

The agreement governing our Uncommitted Credit Facility requires us to comply with certain covenants.

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

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.

As of March 31, 2022 and December 31, 2021, we had $80.4 million and no balance outstanding under our Uncommitted Credit Facility and Replaced Uncommitted Credit Facility, respectively.

Financial and Other Covenants

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In the case of an "elevated ratio period", which may be elected by us if one or more acquisitions during a fiscal quarter involve aggregate consideration in excess of $200.0 million (the Trigger Quarter), the total debt to EBITDA ratio may not exceed 4.25 to 1.00 during the Trigger Quarter and for the three fiscal quarters thereafter.

The Credit Facility also provides that there may not be more than two elevated ratio periods during the respective terms of the Credit Facility agreement.

As of September 30, 2021, our total debt to EBITDA ratio was 2.84 compared to the 3.75 maximum allowed by the covenants.

As of September 30, 2021, we were in compliance with the covenants unde r our Credit Facility, and we exp ect to be in compliance throughout the remainder of 2021.

The Credit Facility also provides that there may not be more than two elevated ratio periods during the term of the Credit Facility agreement.

As of March 31, 2022, our total debt to EBITDA ratio was 2.84 compared to the 3.75 maximum allowed by the covenants.

As of March 31, 2022, we were in compliance with the covenants unde r our Credit Facility, and we exp ect to be in compliance throughout the remainder of 2022.

EBITDA, which is a non-U.S.

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This could have an adverse effect on the availability of financial assurances.

In addition, maturity acceleration on the Credit Facility constitutes an event of default under our other debt instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity.

In addition, maturity acceleration on the Credit Facility constitutes an event of default under our other debt and derivative instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity.

If such acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness.

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We may be unable to amend the Credit Facility or raise sufficient capital to repay such obligations in the event the maturity is accelerated.

Term Loan Facility

On April 29, 2022, we entered into a $1.0 billion unsecured Term Loan Facility, which will mature on April 29, 2025, and bears interest at a base rate or a forward-looking secured overnight financing rate, plus an applicable margin based on our debt ratings.

On May 2, 2022, we completed the acquisition of US Ecology using proceeds from the Term Loan Facility and borrowings on the Credit Facility.

Senior Notes and Debentures

In November 2021, we issued $700.0 million of 2.375% senior notes due 2033 (the 2.375% Notes).

We used the net proceeds for general corporate purposes, including repayment of amounts outstanding under our unsecured and uncommitted credit facilities.

Prior to such use, Republic may have temporarily invested the net proceeds in marketable securities and short-term investments.

During the second quarter of 2021, we paid the entire $35.3 million principal balance of our 9.250% debentures which matured in May 2021.

In November 2020, we issued $350.0 million of 0.875% senior notes due November 2025 (the 0.875% Notes) and $750.0 million of 1.750% senior notes due February 2032 (the 1.750% Notes).

We used the net proceeds from the 0.875% Notes and 1.750% Notes to redeem all $850.0 million of the outstanding 3.550% senior notes due June 2022 and $250.0 million of the $550.0 million outstanding 4.750% senior notes due May 2023 (the 4.750% Notes).

In August 2020, we issued $650.0 million of 1.450% senior notes due February 2031 (the 1.450% Notes).

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.

In February 2020, we issued $600.0 million of 2.300% senior notes due March 2030 (the 2.300% Notes) and $400.0 million of 3.050% senior notes due March 2050 (the 3.050% Notes).

We used the net proceeds from the 2.300% Notes and 3.050% Notes to repay $850.0 million of 5.000% senior notes that matured in March 2020.

The remaining proceeds were used to repay amounts outstanding under our unsecured credit facilities as well as for general corporate purposes.

Our senior notes and debentures are general unsecured obligations.

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Tax-Exempt Financings

As of September 30, 2021 we had $1,151.6 million of certain variable rate tax-exempt financing 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.

As of March 31, 2022 and December 31, 2021 we had $1,181.7 million and $1,181.5 million of certain variable rate tax-exempt financings outstanding respectively, with maturities ranging from 2023 to 2051.

During 2021, we issued $205.0 million of tax exempt financings.

In the fourth quarter of 2021, the Pennsylvania Economic Development Financing Authority issued, for our benefit, $30.0 million of Solid Waste Disposal Revenue Bonds.

The proceeds from the issuance, after deferred issuance costs, will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, of which $23.4 million and $17.2 million was incurred and reimbursed to us as of March 31, 2022 and December 31, 2021, respectively .

As of March 31, 2022 and December 31, 2021 , we had $117.2 million and $139.0 million, respectively, of restricted cash and marketable securities, of which $6.2 million and $12.4 million, respectively, represented proceeds from the issuance of the tax-exempt bonds.

Finance Leases

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.

We had finance lease liabilities of $256.6 million and $249.4 million as of March 31, 2022 and December 31, 2021, respectively, with maturities ranging from 2022 to 2063.

Credit Ratings

Our continued access to the debt capital markets and to new financing facilities, as well as our borrowing costs, depend on multiple factors, including market conditions, our operating performance and maintaining strong credit ratings.

As of September 30, 2021, our credit ratings were BBB+, Baa2 and BBB by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively.

As of March 31, 2022, our credit ratings were BBB+, Baa2 and BBB by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively.

If our credit ratings were downgraded, especially any downgrade to below investment grade, our ability to access the debt markets with the same flexibility that we have experienced historically, our cost of funds and other terms for new debt issuances, could be adversely impacted.

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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 2. Management’s Discussion and Analysis