What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-06 · 293 added, 171 removed, 644 unchanged (42% of the section changed)

3 unchanged sentences

(in millions, except per share data)

March 31, December 31,

June 30, December 31,

Current assets:

46 unchanged sentences

(in millions, except per share data)

Three Months Ended March 31,

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

2022 2021 2022 2021

Revenue $ 3,413.6 $ 2,812.3 $ 6,383.7 $ 5,408.2

3 unchanged sentences

Selling, general and administrative 391.5 315.8 699.3 581.2

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

Withdrawal costs - multiemployer pension funds

Loss (gain) on business divestitures and impairments, net — 0.9 — ( 0.2 )

Restructuring charges 5.9 3.8 11.9 6.6

7 unchanged sentences

Net income 371.8 332.0 723.7 628.4

Net (income) loss attributable to non-controlling interests in consolidated subsidiary

Net loss (income) attributable to non-controlling interests in consolidated subsidiary

0.1 ( 0.9 ) 0.2 ( 1.4 )

Net income attributable to Republic Services, Inc.

8 unchanged sentences

Weighted average common and common equivalent shares outstanding

317.0 320.0 317.1 319.9

Cash dividends per common share $ 0.460 $ 0.425 $ 0.920 $ 0.850

3 unchanged sentences

(in millions)

Three Months Ended March 31,

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

2022 2021 2022 2021

Net income $ 371.8 $ 332.0 $ 723.7 $ 628.4

2 unchanged sentences

Realized loss reclassified into earnings 1.1 1.2 2.2 2.3

Unrealized loss ( 1.1 ) — ( 1.1 ) —

Pension activity:

Change in funded status of pension plan obligations

— ( 0.7 ) — ( 0.7 )

Foreign currency activity:

Gain on foreign currency translation 0.1 — 0.1 —

Other comprehensive income, net of tax 0.1 0.5 1.2 1.6

15 unchanged sentences

Net income (loss) — — — 352.0 — — — ( 0.1 ) 351.9

Other comprehensive loss — — — — — — 1.1 — 1.1

Other comprehensive income — — — — — — 1.1 — 1.1

Cash dividends declared — — — ( 145.3 ) — — — — ( 145.3 )

4 unchanged sentences

319.9 3.2 2,805.3 6,681.4 ( 4.1 ) ( 492.4 ) ( 13.5 ) 0.7 8,984.7

Net income — — — 371.9 — — — ( 0.1 ) 371.8

Other comprehensive income — — — — — — 0.1 — 0.1

Cash dividends declared — — — ( 145.3 ) — — — — ( 145.3 )

Issuances of common stock 0.2 — 4.0 — — ( 8.0 ) — — ( 4.0 )

Stock-based compensation — — 9.6 ( 0.9 ) — — — — 8.7

Purchase of common stock for treasury — — — — — — — — —

Balance as of June 30, 2022

320.1 $ 3.2 $ 2,818.9 $ 6,907.1 ( 4.1 ) $ ( 500.4 ) $ ( 13.4 ) $ 0.6 $ 9,216.0

Republic Services, Inc.

6 unchanged sentences

Net income — — — 295.9 — — — 0.5 296.4

Other comprehensive loss — — — — — — 1.1 — 1.1

Other comprehensive income — — — — — — 1.1 — 1.1

Cash dividends declared — — — ( 135.6 ) — — — — ( 135.6 )

4 unchanged sentences

319.3 3.2 2,757.3 5,911.2 ( 0.3 ) ( 27.5 ) ( 11.3 ) 5.4 8,638.3

Net income — — — 331.1 — — — 0.9 332.0

Other comprehensive income — — — — — — 0.5 — 0.5

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

Issuances of common stock 0.1 — 3.1 — — ( 0.2 ) — — 2.9

Stock-based compensation — — 26.7 ( 0.9 ) — — — — 25.8

Purchase of common stock for treasury — — — — ( 0.3 ) ( 79.5 ) — — ( 79.5 )

Distributions paid — — — — — — — ( 1.2 ) ( 1.2 )

Balance as of June 30, 2021

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

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash provided by operating activities:

6 unchanged sentences

Provision for doubtful accounts, net of adjustments 17.2 11.4

Gain on disposition of assets and asset impairments, net ( 1.7 ) ( 0.6 )

(Gain) loss on disposition of assets and asset impairments, net ( 3.2 ) 0.2

Environmental adjustments — 4.8

19 unchanged sentences

Cash provided by (used in) financing activities:

Proceeds from notes payable and long-term debt, net of fees 638.9 1,242.4

Payments of notes payable and long-term debt and senior notes ( 590.9 ) ( 1,422.5 )

Proceeds from credit facilities and notes payable, net of fees 5,338.9 2,737.9

Payments of credit facilities and notes payable ( 3,027.1 ) ( 2,756.1 )

Issuances of common stock, net ( 15.5 ) ( 9.5 )

1 unchanged sentence

Cash dividends paid ( 291.2 ) ( 271.1 )

Distributions paid to non-controlling interests in consolidated subsidiary — ( 1.2 )

Contingent consideration payments ( 2.9 ) ( 11.8 )

Cash used in financing activities ( 314.7 ) ( 342.3 )

Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents ( 8.5 ) ( 25.9 )

Cash provided by (used in) financing activities 1,798.7 ( 351.9 )

Effect of foreign exchange rate changes on cash ( 0.1 ) —

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 78.2 ( 2.2 )

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year 105.6 114.2

36 unchanged sentences

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

As of March 31, 2022, we have not modified any contracts as a result of reference rate reform and are evaluating the impact this standard may have on our consolidated financial statements.

During the quarter ended June 30, 2022, we novated a certain hedging relationship related to one of our interest rate swap agreements by changing the reference rate from the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR).

The amendment did not have a material impact on our consolidated financial statements.

For further discussion of the amendment and relevant hedging relationship, refer to Note 7, Debt, in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We have not modified any other contracts as a result of reference rate reform.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Business Combinations

1 unchanged sentence

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08).

ASU 2021-08 improves the accounting for acquired

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and the payment terms and their effect on subsequent revenue recognized by the acquirer.

ASU 2021-08 improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and the payment terms and their effect on subsequent revenue recognized by the acquirer.

ASU 2021-08 is effective for all entities that enter into a business combination within the applicable scope.

2 unchanged sentences

BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

We acquired various environmental services businesses during the three months ended March 31, 2022 and 2021.

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

We acquired various environmental services, waste, and recycling businesses during the six months ended June 30, 2022 and 2021.

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

Purchase price:

Cash used in acquisitions, net of cash acquired

Cash used in acquisitions, net of cash acquired of $ 64.6 and $ 3.0 , respectively

$ 2,516.6 $ 561.7

Fair value, future minimum finance lease payments

Total $ 2,542.3 $ 607.4

Allocated as follows:

Restricted cash

Accounts receivable

Prepaid expenses 15.5 —

Landfill development costs

Property and equipment

Operating right-of-use lease assets

Interest rate swap 29.1 —

Assets held for sale

Accounts payable

( 109.2 ) ( 10.6 )

Deferred revenue

( 25.6 ) ( 3.0 )

Environmental remediation liabilities

( 92.4 ) ( 14.4 )

Closure and post-closure liabilities

( 88.9 ) ( 32.2 )

Operating right-of-use lease liabilities

( 55.8 ) ( 0.4 )

Deferred income tax liabilities ( 151.0 ) —

Other liabilities

4 unchanged sentences

Other intangible assets

$ 162.9 $ 37.8

1,368.4 438.7

Total allocated $ 1,531.3 $ 476.5

1 unchanged sentence

Accordingly, the purchase price allocations are subject to change.

Substantially all of the goodwill and intangible assets recorded for these acquisitions are deductible for tax purposes.

Excluding the US Ecology acquisition discussed below, substantially all of the goodwill and intangible assets recorded for these acquisitions are deductible for tax purposes.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

These acquisitions are not material to the Company's results of operations, individually or in the aggregate.

As a result, no pro forma financial information is provided.

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

On May 2, 2022, we acquired all outstanding equity 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.

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.

For further discussion of the borrowings used to fund the purchase, refer to Note 7, Debt, in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In August 2021, we acquired all of the issued and outstanding shares of ACV Enviro Corporation (ACV).

ACV’s environmental solutions operations are primarily located in the northeastern United States and provide us with a platform to pursue additional growth in our environmental solutions line of business.

The purchase price allocation is preliminary and remains subject to revisions as additional information is obtained about the facts and circumstances that existed at the valuation date.

The preliminary allocation of purchase price, including the value of certain tangible and intangible assets acquired, is based on the best estimates of management and is subject to revision based on the final valuations.

We expect our valuations to be completed in the third quarter of 2022.

We financed the transaction using the proceeds of a new $ 1.0 billion unsecured Term Loan Credit Agreement (Term Loan Facility) and borrowings under our existing $ 3.0 billion unsecured revolving credit facility.

For further discussion of the borrowings used to fund the US Ecology acquisition, refer to Note 7, Debt, in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The preliminary purchase price allocation for the US Ecology acquisition is reflected in the table above and remains subject to revisions as additional information is obtained about the facts and circumstances that existed at the valuation date.

The preliminary allocation of purchase price, including the value of certain tangible and intangible assets acquired as well as certain leases and environmental liabilities assumed, is based on the best estimates of management and is subject to revision based on the final valuations.

We do not expect a step-up in the tax basis of the assets recognized in connection with the US Ecology acquisition, and do not expect the goodwill and intangible assets will be deductible for tax purposes.

During the three and six months ended June 30, 2022, we incurred $ 51.9 million and $ 56.6 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology, which included certain costs to close the acquisition and integrate the business, including stock compensation expense for unvested equity awards at closing as well as severance and change-in-control payments.

In July 2022, we made an investment of approximately $ 90 million in a joint venture with a landfill gas to energy developer to construct 39 renewable natural gas projects across the United States.

The agreement provides for additional contributions as certain project milestones are achieved over the next four to five years .

In 2022 and 2021, 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 $ 11.0 million and $ 2.2 million, which were recorded to other assets in our March 31, 2022 and 2021 consolidated balance sheets, respectively.

During the three months ended March 31, 2022 and 2021, we reduced the carrying value of these investments by $ 0.4 million and $ 13.7 million, respectively, as a result of cash distributions and our share of

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our tax provisions reflect a benefit of approximately $ 1.2 million for the three months ended March 31, 2022 due to the tax credits related to these investments.

There was no similar benefit for the three months ended March 31, 2021.

In exchange for our non-controlling interests, we made capital contributions of $ 121.0 million and $ 22.7 million, which were recorded to other assets in our June 30, 2022 and 2021 consolidated balance sheets, respectively.

During the three and six months ended June 30, 2022, we reduced the carrying value of these investments by $ 11.9 million and $ 12.2 million, respectively, and during the three and six months ended June 30, 2021, we reduced the carrying value of these investments by $ 12.0 million and $ 25.7 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 benefits of approximately $ 24 million and $ 25 million for the three and six months ended June 30, 2022, respectively, due to the tax credits related to these investments.

Our tax provisions reflect a similar benefit of approximately $ 20 million for both the three and six months ended June 30, 2021.

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, 2021.

Restructuring Charges

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 three and six months ended June 30, 2022, we incurred restructuring charges of $ 5.9 million and $ 11.9 million, respectively, and during the three and six months ended June 30, 2021, we incurred restructuring charges of $ 3.8 million and $ 6.6 million, respectively, related to the redesign of certain back-office software systems.

During the six months ended June 30, 2022 and 2021, we paid $ 8.3 million and $ 8.6 million, respectively, related to these restructuring efforts.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

1 unchanged sentence

Balance as of December 31, 2021

Acquisitions Divestitures Adjustments to Acquisitions Balance as of March 31, 2022

Acquisitions Divestitures Adjustments to Acquisitions Balance as of June 30, 2022

Group 1 $ 6,549.7 $ 31.1 $ — $ ( 2.5 ) $ 6,578.3

2 unchanged sentences

Total $ 12,826.0 $ 1,368.4 $ — $ ( 28.1 ) $ 14,166.3

Adjustments to acquisitions during the three months ended March 31, 2022 primarily related to changes in our valuation of fixed assets as a result of obtaining new information regarding the acquisitions that closed in 2021.

Adjustments to acquisitions during the six months ended June 30, 2022 primarily related to changes in our valuation of fixed assets and certain landfill leases as a result of obtaining new information regarding the acquisitions that closed in 2021.

The preliminary goodwill associated with our acquisition of US Ecology is assigned to our Environmental Solutions operating segment and is included within Corporate entities and other above.

Other Intangible Assets, Net

2 unchanged sentences

Gross Intangible Assets Accumulated Amortization

Balance as of December 31, 2021 Acquisitions Adjustments

Balance as of March 31, 2022 Balance as of December 31, 2021 Additions Charged to Expense Adjustments

Balance as of March 31, 2022 Other Intangible Assets, Net as of March 31, 2022

Balance as of December 31, 2021

Acquisitions Adjustments

Balance as of June 30, 2022

Balance as of December 31, 2021

Additions Charged to Expense Adjustments

Balance as of June 30, 2022

Other Intangible Assets, Net as of June 30, 2022

Customer relationships

6 unchanged sentences

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of March 31, 2022 and December 31, 2021 follows:

Income taxes receivable $ 89.9 $ 173.8

A summary of prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021 follows:

Prepaid expenses $ 101.9 $ 85.3

Inventories 100.2 72.2

Other non-trade receivables 46.7 32.2

Income taxes receivable 91.0 173.8

Reinsurance receivable 30.6 31.0

Other non-trade receivables 28.7 32.2

Prepaid fees for cloud-based hosting arrangements, current 8.8 12.9

3 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

A summary of other assets as of March 31, 2022 and December 31, 2021 follows:

A summary of other assets as of June 30, 2022 and December 31, 2021 follows:

Operating right-of-use lease assets $ 299.5 $ 255.3

3 unchanged sentences

Reinsurance receivable 79.8 79.5

Derivative and hedging assets 59.5 19.7

Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements 56.1 43.4

Amounts recoverable for capping, closure and post-closure obligations 20.1 19.4

Other derivative assets 14.1 15.0

Deferred financing costs 5.3 4.6

Interest rate swaps 1.4 4.7

Other 35.1 24.0

2 unchanged sentences

Other Accrued Liabilities

A summary of other accrued liabilities as of March 31, 2022 and December 31, 2021 follows:

Insurance reserves, current $ 195.6 $ 193.5

A summary of other accrued liabilities as of June 30, 2022 and December 31, 2021 follows:

Accrued payroll and benefits $ 267.2 $ 295.0

Insurance reserves, current 191.5 193.5

Accrued fees and taxes 166.4 143.7

2 unchanged sentences

Ceded insurance reserves, current 30.6 31.0

Current federal tax liabilities 9.9 0.3

Accrued professional fees and legal settlement reserves 11.0 8.4

2 unchanged sentences

Other Long-Term Liabilities

A summary of other long-term liabilities as of March 31, 2022 and December 31, 2021 follows:

A summary of other long-term liabilities as of June 30, 2022 and December 31, 2021 follows:

Operating right-of-use lease liabilities $ 270.4 $ 239.0

1 unchanged sentence

Ceded insurance reserves 79.8 79.5

Derivative and hedging liabilities 66.8 50.7

Contingent purchase price and acquisition holdbacks 63.5 64.4

Other derivative liabilities 47.3 50.7

Withdrawal liability - multiemployer pension funds 23.5 24.5

Legal settlement reserves 3.3 3.1

Pension and other post-retirement liabilities 1.2 1.2

Other 54.9 61.8

3 unchanged sentences

LANDFILL AND ENVIRONMENTAL COSTS

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.

As of June 30, 2022, we owned or operated 207 active landfills with total available disposal capacity estimated to be 5.1 billion in-place cubic yards.

Additionally, we had post-closure responsibility for 127 closed landfills.

Accrued Landfill and Environmental Costs

A summary of accrued landfill and environmental liabilities as of March 31, 2022 and December 31, 2021 follows:

A summary of accrued landfill and environmental liabilities as of June 30, 2022 and December 31, 2021 follows:

Landfill final capping, closure and post-closure liabilities $ 1,657.2 $ 1,507.3

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 three months ended March 31, 2022 and 2021:

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, 2022 and 2021:

Asset retirement obligation liabilities, beginning of year $ 1,507.3 $ 1,346.4

4 unchanged sentences

Accretion expense 44.1 41.1

Foreign currency translation ( 0.3 ) —

Asset retirement obligation liabilities, end of period 1,657.2 1,425.5

13 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 March 31, 2022 would be approximately $ 342 million higher than the amount recorded.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of June 30, 2022 would be approximately $ 375 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.

1 unchanged sentence

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes the activity in our environmental remediation liabilities for the three months ended March 31, 2022 and 2021:

The following table summarizes the activity in our environmental remediation liabilities for the six months ended June 30, 2022 and 2021:

Environmental remediation liabilities, beginning of year $ 454.9 $ 462.8

2 unchanged sentences

Accretion expense (non-cash interest expense) 8.6 8.5

Acquisitions, net of divestitures and other adjustments 94.5 14.4

Environmental remediation liabilities, end of period 536.9 468.8

2 unchanged sentences

Bridgeton Landfill.

During the three months ended March 31, 2022, we paid $ 3.9 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

During the six months ended June 30, 2022, we paid $ 6.8 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 March 31, 2022, the remediation liability recorded for this site was $ 98.9 million, of which approximately $ 12 million is expected to be paid during the remainder of 2022.

We believe the remaining reasonably possible high end of our range would be approximately $ 140 million higher than the amount recorded as of March 31, 2022.

As of June 30, 2022, the remediation liability recorded for this site was $ 96.0 million, of which approximately $ 9 million is expected to be paid during the remainder of 2022.

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, 2022.

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 March 31, 2022 and December 31, 2021 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 June 30, 2022 and December 31, 2021 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.

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value

4 unchanged sentences

Variable 714.4 — 714.4 24.3 — 24.3

Term Loan Variable 1,000.0 — 1,000.0 — — —

Commercial Paper Variable 500.0 ( 0.4 ) 499.6 — — —

Senior notes:

32 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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).

At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating 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 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 $ 2,661.1 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.

1 unchanged sentence

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

We had no borrowings 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.

We had $ 714.4 million and $ 24.3 million outstanding under our Credit Facility as of June 30, 2022 and December 31, 2021, respectively.

We had $ 350.6 million and $ 341.9 million of letters of credit outstanding under our Credit Facility as of June 30, 2022 and December 31, 2021, respectively.

We also had $ 499.6 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program as of June 30, 2022.

If there is a default under our commercial paper program, we expect to use our Credit Facility to repay any outstanding commercial paper notes.

As a result, availability under our Credit Facility was $ 1,435.0 million and $ 2,633.8 million as of June 30, 2022 and December 31, 2021, respectively.

Uncommitted Credit Facility

4 unchanged sentences

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

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

As of June 30, 2022, we had $ 137.5 million outstanding under our Uncommitted Credit Facility.

We had no borrowings outstanding as of December 31, 2021.

Term Loan Credit Agreement

On April 29, 2022, we entered into a $ 1.0 billion unsecured Term Loan Credit Agreement (Term Loan Facility).

The Term Loan Facility 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.

On April 29, 2022, we entered into the $ 1.0 billion Term Loan Facility.

The Term Loan Facility will mature on April 29, 2025 and bears interest at a base rate or a forward-looking SOFR, 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 under the Credit Facility.

Commercial Paper Program

In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $ 500.0 million outstanding at any one time.

As of June 30, 2022, we had $ 500.0 million principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 1.845 % and weighted average maturity of 24 days.

We maintain capacity under the Credit Facility to support our commercial paper program in the event of a default.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of June 30, 2022.

Senior Notes and Debentures

9 unchanged sentences

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)

Fair Value Hedges

During the second half of 2013, we entered into various interest rate swap agreements relative to our 4.750 % fixed rate senior notes due in May 2023 ( 4.750 % Notes).

During the second half of 2013, we entered into various interest rate swap agreements (the 2013 Interest Rate Swaps) relative to our 4.750 % fixed rate senior notes due in May 2023 ( 4.750 % Notes).

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

As of March 31, 2022, these swap agreements had a total notional value of $ 300.0 million and mature in May 2023.

As of June 30, 2022, these swap agreements had a total notional value of $ 300.0 million and mature in May 2023.

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

In 2013, these transactions were designated as fair value hedges because the swaps hedge against the changes in fair value of the 4.750 % notes resulting from changes in interest rates.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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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 March 31, 2022 and December 31, 2021, these free-standing derivatives were reflected at their fair value of $ 1.2 million and $ 3.9 million, respectively, and are included in other assets in our consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recognized losses of $ 2.7 million and $ 1.1 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 March 31, 2022 and December 31, 2021, the interest rate swap agreements that were designated as fair value hedges are reflected at their fair value of $ 1.4 million and $ 4.7 million, respectively, and are included in other assets in our consolidated balance sheets.

As of June 30, 2022 and December 31, 2021, these free-standing derivatives were reflected at their fair value of a $ 0.4 million liability and a $ 3.9 million asset, respectively, and are included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets.

For the three and six months ended June 30, 2022, we recognized losses of $ 1.6 million and $ 4.3 million, respectively, and for the three and six months ended June 30, 2021, we recognized losses 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, 2022 and December 31, 2021, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected at their fair value of a $ 0.5 million liability and a $ 4.7 million asset, respectively, and are included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets.

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

We recognized net interest income of $ 1.9 million and $ 2.0 million during the three months ended March 31, 2022 and 2021, respectively, related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.

For the three months ended March 31, 2022 and 2021, we recognized gains of $ 2.7 million and $ 1.5 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and offsetting losses of $ 3.3 million and $ 1.4 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three months ended March 31, 2022 and 2021 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

We recognized net interest income of $ 1.4 million and $ 2.0 million during the three months ended June 30, 2022 and 2021, respectively, and net interest income of $ 3.2 million and $ 3.9 million during the six months ended June 30, 2022 and 2021, respectively, related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.

For the three months ended June 30, 2022 and 2021, we recognized gains of $ 1.3 million and $ 1.1 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and offsetting losses of $ 1.9 million and $ 1.0 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

For the six months ended June 30, 2022 and 2021, we recognized gains of $ 4.0 million and $ 2.6 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and offsetting losses of $ 5.2 million and $ 2.4 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three and six months ended June 30, 2022 and 2021 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.

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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).

As of March 31, 2022 and December 31, 2021, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 24.7 million and $ 25.8 million, respectively, net of tax.

As of June 30, 2022 and December 31, 2021, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 23.6 million and $ 25.8 million, respectively, net of tax.

The effective portion of the interest rate locks is amortized 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 $ 4.2 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

In connection with our acquisition of US Ecology, we novated an acquired interest rate swap agreement (the 2022 Interest Rate Swap) with an initial effective date of March 6, 2020 and an initial notional amount of $ 500.0 million relative to our Term Loan Facility.

The interest rate swap matures in November 2026.

The goal was to reduce overall borrowing costs.

Under the terms of the acquired agreement, we pay interest at a fixed interest rate of 0.832 % and received interest at floating rates based on

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

changes in LIBOR.

The interest rate swap is designated as a cash flow hedge.

In May 2022, following the closing of the acquisition, we amended the reference rate from a floating rate based on LIBOR to a SOFR rate.

In accordance with ASU 2020-04, the amendment of the reference rate did not result in dedesignation of the cash flow hedge.

Changes in the fair value of the interest rate swap are recorded as a component of accumulated other comprehensive loss and are recognized in interest expense in the period in which the payment is settled.

The fair value of our floating-to-fixed interest rate swap 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).

As of June 30, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $ 27.7 million and is included in other assets in our consolidated balance sheets.

Total unrealized loss recognized in accumulated other comprehensive loss for the 2022 Interest Rate Swap was $ 1.1 million, net of tax, for the three months ended June 30, 2022.

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.

Derivative Contracts

Contemporaneously with the issuance of our 2.300 % Notes in February 2020, we amended interest rate lock agreements with an aggregate notional value of $ 550.0 million, extending the mandatory maturity date from 2020 to 2030, and dedesignated them as cash flow hedges (the 2020 Extended Interest Rate Locks).

Contemporaneously with the issuance of our 2.500 % Notes in August 2019, we amended interest rate lock agreements with an aggregate notional value of $ 375.0 million, extending the mandatory maturity date from 2019 to 2024, and dedesignated them as cash flow hedges (2019 Extended Interest Rate Locks and collectively with the 2020 Extended Interest Rate Locks referred to as the Extended Interest Rate Locks).

There was no ineffectiveness recognized in the termination of these cash flow hedges.

In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (the 2019 Offsetting Interest Rate Swap and the 2020 Offsetting Interest Rate Swap, or collectively the Offsetting Interest Rate Swaps).

In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (2019 Offsetting Interest Rate Swap and the 2020 Offsetting Interest Rate Swap, or collectively the Offsetting Interest Rate Swaps).

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 March 31, 2022 and December 31, 2021, the fair values of the 2019 Extended Interest Rate Locks were liabilities of $ 3.2 million and $ 20.9 million, respectively, which were included in other long-term liabilities in our consolidated balance

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As of March 31, 2022, the fair value of the 2020 Extended Interest Rate Locks were assets of $ 12.9 million, which were included in other assets in our consolidated balance sheet, and as of December 31, 2021, the fair value of the 2020 Extended Interest Rate Locks were liabilities of $ 29.0 million, which were included in other long-term liabilities in our consolidated balance sheet.

As of March 31, 2022, the fair value of the 2019 Offsetting Interest Rate Swap was a liability of $ 6.9 million, which was included in other long-term liabilities in our consolidated balance sheet, and as of December 31, 2021, the fair value of the 2019 Offsetting Interest Rate Swap was an asset of $ 11.1 million, which was included in other assets in our consolidated balance sheet.

As of March 31, 2022 and December 31, 2021, the fair value of the 2020 Offsetting Interest Rate Swap was a liability of $ 37.2 million and $ 0.8 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recognized gains of $ 53.1 million and $ 47.1 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 51.8 million and $ 46.7 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

As of June 30, 2022 and December 31, 2021, the fair values of the 2019 Extended Interest Rate Locks were liabilities of $ 0.4 million and $ 20.9 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

As of June 30, 2022, the fair value of the 2020 Extended Interest Rate Locks were assets of $ 31.8 million, which were included in other assets in our consolidated balance sheet, and as of December 31, 2021, the fair value of the 2020 Extended Interest Rate Locks were liabilities of $ 29.0 million, which were included in other long-term liabilities in our consolidated balance sheet.

As of June 30, 2022, the fair value of the 2019 Offsetting Interest Rate Swap was a liability of $ 9.6 million, which was included in other long-term liabilities in our consolidated balance sheet, and as of December 31, 2021, the fair value of the 2019 Offsetting Interest Rate Swap was an asset of $ 11.1 million, which was included in other assets in our consolidated balance sheet.

As of June 30, 2022 and December 31, 2021, the fair value of the 2020 Offsetting Interest Rate Swap was a liability of $ 55.9 million and $ 0.8 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

For the three and six months ended June 30, 2022, we recognized gains of $ 21.7 million and $ 74.8 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 21.3 million and $ 73.1 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

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.

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 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.

As of June 30, 2022 and December 31, 2021 we had $ 1,181.8 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.

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 $ 27.7 million and $ 17.2 million was incurred and reimbursed to us as of June 30, 2022 and December 31, 2021, respectively .

As of June 30, 2022 and

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 31, 2021 , we had $ 121.5 million and $ 139.0 million, respectively, of restricted cash and marketable securities, of which $ 2.0 million and $ 12.4 million, respectively, represented proceeds from the issuance of the tax-exempt bonds.

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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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 March 31, 2022 and December 31, 2021.

Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of June 30, 2022 and December 31, 2021.

Finance Leases

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.

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 net refund of $ 0.4 million for the three months ended March 31, 2022 and 2021, respectively.

We had finance lease liabilities of $ 269.3 million and $ 249.4 million as of June 30, 2022 and December 31, 2021, respectively, with maturities ranging from 2022 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2022 was 22.2 % and 23.8 %, respectively.

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.

Net cash paid for income taxes was $ 78.9 million and $ 54.3 million for the six months ended June 30, 2022 and 2021, respectively.

We recorded approximately $ 151 million of current and deferred income taxes as part of our preliminary purchase price allocation for our acquisition of US Ecology.

This allocation is subject to change until we finalize our valuations and other estimates.

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

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

As of March 31, 2022, the valuation allowance associated with our state loss carryforwards was approximately $ 43 million.

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

As of June 30, 2022, the valuation allowance associated with our state loss carryforwards was approximately $ 43 million.

As a result of the acquisition of US Ecology as of June 30, 2022, the valuation allowance associated with our foreign jurisdiction tax credits was approximately $ 4 million.

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

Our compliance with income tax rules and regulations is periodically audited by taxing authorities.

These authorities may challenge the positions taken in our tax filings.

Thus, to provide for certain potential tax exposures, we maintain liabilities for uncertain tax positions

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

for our estimate of the final outcome of the examinations.

Thus, to provide for certain potential tax exposures, we maintain liabilities for uncertain tax positions for our estimate of the final outcome of the examinations.

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

The tax years 2017 through 2021 remain subject to examination in our foreign jurisdictions.

The 2017 through 2021 state tax returns are subject to examination by state tax authorities.

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 2020.

In addition, we are currently under state examination or administrative review in various state jurisdictions for tax years 2012 through 2020.

We believe the recorded liabilities for uncertain tax positions are adequate.

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 March 31, 2022, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

As of June 30, 2022, 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 March 31, 2022, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 14.0 million related to our uncertain tax positions.

As of June 30, 2022, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 14.3 million related to our uncertain tax positions.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

STOCK REPURCHASES, DIVIDENDS AND EARNINGS PER SHARE

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

Stock repurchase activity during the three months ended March 31, 2022 and 2021 follows (in millions, except per share amounts):

Three Months Ended March 31,

Stock repurchase activity during the three and six months ended June 30, 2022 and 2021 follows (in millions, except per share amounts):

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

2022 2021 2022 2021

Number of shares repurchased — 0.3 1.6 0.4

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Weighted average cost per share $ — $ 108.68 $ 124.02 $ 101.84

As of March 31, 2022 and 2021, no repurchased shares were pending settlement.

As of March 31, 2022, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.5 billion.

In February 2022, our Board of Directors approved a quarterly dividend of $ 0.46 per share.

Cash dividends declared were $ 145.3 million for the three months ended March 31, 2022.

As of March 31, 2022, we recorded a quarterly dividend payable of $ 145.3 million to shareholders of record at the close of business on April 1, 2022.

As of June 30, 2022, no repurchased shares were pending settlement.

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, 2022, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.5 billion.

In April 2022, our Board of Directors approved a quarterly dividend of $ 0.46 per share.

Cash dividends declared were $ 290.6 million for the six months ended June 30, 2022.

As of June 30, 2022, we recorded a quarterly dividend payable of $ 145.3 million to shareholders of record at the close of business on July 1, 2022.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Earnings per Share

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

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Earnings per share for the three months ended March 31, 2022 and 2021 are calculated as follows (in thousands, except per share amounts):

Three Months Ended March 31,

Earnings per share for the three and six months ended June 30, 2022 and 2021 are calculated as follows (in thousands, except per share amounts):

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

2022 2021 2022 2021

Basic earnings per share:

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Unvested PSU awards

361 283 372 263

Weighted average common and common equivalent shares outstanding

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Diluted earnings per share $ 1.17 $ 1.03 $ 2.28 $ 1.96

During both the three months ended March 31, 2022 and 2021, there were less than 0.1 million antidilutive securities outstanding.

During each of the three and six months ended June 30, 2022 and 2021, there were less than 0.1 million antidilutive securities outstanding.

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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 three months ended March 31, 2022 follows:

Cash Flow Hedges Defined Benefit Pension Items Total

A summary of changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2022 follows:

Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Translation Total

Balance as of December 31, 2021

$ ( 25.8 ) $ 11.2 $ — $ ( 14.6 )

Amounts reclassified from accumulated other comprehensive loss 1.1 — 1.1

Net current period other comprehensive loss 1.1 — 1.1

Balance as of March 31, 2022 $ ( 24.7 ) $ 11.2 $ ( 13.5 )

A summary of reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 follows:

Three Months Ended March 31,

Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive (Loss) Income Affected Line Item in the Statement where Net Income is Presented

Other comprehensive income (loss) before reclassifications ( 1.1 ) — 0.1 ( 1.0 )

Amounts reclassified from accumulated other comprehensive income 2.2 — — 2.2

Net current period other comprehensive income 1.1 — 0.1 1.2

Balance as of June 30, 2022 $ ( 24.7 ) $ 11.2 $ 0.1 $ ( 13.4 )

A summary of reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2022 and 2021 follows:

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

2022 2021 2022 2021

Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive (Loss) Income Amount Reclassified from Accumulated Other Comprehensive (Loss) Income Affected Line Item in the Statement where Net Income is Presented

Loss on cash flow hedges:

Terminated interest rate locks $ ( 1.5 ) $ ( 1.6 ) $ ( 3.0 ) $ ( 3.1 ) Interest expense

2022 Interest Rate Swap — — — — Interest expense

Total before tax ( 1.5 ) ( 1.6 ) ( 3.0 ) ( 3.1 )

Tax benefit 0.4 0.4 0.8 0.8

Net of tax $ ( 1.1 ) $ ( 1.2 ) $ ( 2.2 ) $ ( 2.3 )

Pension gains:

Pension settlement $ — $ 0.9 $ — $ 0.9 Other income

Tax expense — ( 0.2 ) — ( 0.2 )

Net of tax — 0.7 — 0.7

Total loss reclassified into earnings, net of tax $ ( 1.1 ) $ ( 0.5 ) $ ( 2.2 ) $ ( 1.6 )

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FINANCIAL INSTRUMENTS

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three months ended March 31, 2022 and 2021 follows (in millions):

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three and six months ended June 30, 2022 and 2021 follows (in millions):

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

Three Months Ended March 31,

Interest Expense Interest Expense

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

2022 2021 2022 2021

Interest Expense Interest Expense Interest Expense Interest Expense

Total amount of expense line items presented in the consolidated statements of income in which the effects of hedging relationships and derivative instruments are recorded $ ( 94.0 ) $ ( 78.4 ) $ ( 177.5 ) $ ( 156.7 )

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Net swap settlements $ 1.4 $ 2.0 $ 3.2 $ 3.9

Net periodic (expense) earnings $ ( 0.5 ) $ 0.1

Net periodic (loss) earnings $ ( 0.6 ) $ 0.1 $ ( 1.2 ) $ 0.2

Loss on cash flow hedging relationships:

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Interest rate contract:

Net gain on change in fair value of free-standing derivative instruments $ 1.3 $ 0.4

Net gain (loss) on change in fair value of free-standing derivative instruments $ 0.4 $ ( 0.6 ) $ 1.7 $ ( 0.2 )

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 March 31, 2022 and December 31, 2021, our assets and liabilities that are measured at fair value on a recurring basis include the following:

March 31, 2022

As of June 30, 2022 and December 31, 2021, our assets and liabilities that are measured at fair value on a recurring basis include the following:

June 30, 2022

Carrying Amount Total Quoted

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57.4 57.4 — 57.4 —

Interest rate swaps - other assets 1.4 1.4 — 1.4 —

Other derivative assets - other assets 14.1 14.1 — 14.1 —

Derivative and hedging assets - other assets 59.5 59.5 — 59.5 —

Total assets $ 147.4 $ 147.4 $ 30.5 $ 116.9 $ —

Other derivative liabilities - other long-term liabilities $ 47.3 $ 47.3 $ — $ 47.3 $ —

Derivative and hedging liabilities - other long-term liabilities $ 66.8 $ 66.8 $ — $ 66.8 $ —

Contingent consideration - other accrued liabilities and other long-term liabilities

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63.1 63.1 — 63.1 —

Interest rate swaps - other assets 4.7 4.7 — 4.7 —

Other derivative assets - other assets 15.0 15.0 — 15.0 —

Derivative and hedging assets - other assets 19.7 19.7 — 19.7 —

Total assets $ 118.0 $ 118.0 $ 35.2 $ 82.8 $ —

Other derivative liabilities - other long-term liabilities $ 50.7 $ 50.7 $ — $ 50.7 $ —

Derivative and hedging liabilities - other long-term liabilities $ 50.7 $ 50.7 $ — $ 50.7 $ —

Contingent consideration - other accrued liabilities and other long-term liabilities 68.8 68.8 — — 68.8

Total liabilities $ 119.5 $ 119.5 $ — $ 50.7 $ 68.8

The carrying value of our total debt was $ 9.6 billion as of both March 31, 2022 and December 31, 2021, and the fair value of our total debt was $ 9.6 billion and $ 10.3 billion, respectively.

The carrying value of our total debt was $ 11.9 billion and $ 9.6 billion as of June 30, 2022 and December 31, 2021, respectively, and the fair value of our total debt was $ 11.4 billion and $ 10.3 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 March 31, 2022 and December 31, 2021.

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of June 30, 2022 and December 31, 2021.

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

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Contingent Consideration

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 March 31, 2022, the Sonoma contingent consideration represents the fair value of $ 61.9 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

As of June 30, 2022, the Sonoma contingent consideration represents the fair value of $ 61.4 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 $ 77 million and $ 95 million.

During the three months ended March 31, 2022, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business.

During the six months ended June 30, 2022, 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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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.

Our Environmental Solutions operating segment, which provides environmental solutions for daily operations of industrial, petrochemical and refining facilities, is aggregated with Corporate entities and other as it only represents approximately 3 % of our consolidated revenue.

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 months ended March 31, 2022 and 2021 follows:

Our Environmental Solutions operating segment, which provides environmental solutions for daily operations of industrial, petrochemical and refining facilities is aggregated with Corporate entities and other as it only represents approximately 6.2 % of our consolidated revenue for the six months ended June 30, 2022.

Our Environmental Solutions operating segment included the financial results of US Ecology following our acquisition of the business on May 2, 2022.

Summarized financial information concerning our reportable segments for the three and six months ended June 30, 2022 and 2021 follows:

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Group 1 $ 1,827.5 $ ( 279.0 ) $ 1,548.4 $ 145.9 $ 415.1 $ 123.3 $ 12,211.8

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Total $ 3,957.3 $ ( 543.6 ) $ 3,413.6 $ 360.0 $ 589.6 $ 313.2 $ 28,212.9

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Group 1 $ 1,668.3 $ ( 275.0 ) $ 1,393.3 $ 138.7 $ 379.8 $ 149.3 $ 11,946.7

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Total $ 3,333.5 $ ( 521.2 ) $ 2,812.3 $ 323.7 $ 517.9 $ 277.6 $ 23,922.1

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

Six Months Ended June 30, 2022

Group 1 $ 3,529.7 $ ( 540.8 ) $ 2,988.8 $ 289.6 $ 787.9 $ 233.8 $ 12,211.8

Group 2 3,367.3 ( 459.2 ) 2,908.1 290.9 647.8 203.1 10,225.8

Corporate entities and other 526.4 ( 39.6 ) 486.8 111.5 ( 285.5 ) 210.3 5,775.3

Total $ 7,423.4 $ ( 1,039.6 ) $ 6,383.7 $ 692.0 $ 1,150.2 $ 647.2 $ 28,212.9

Six Months Ended June 30, 2021

Group 1 $ 3,215.9 $ ( 524.0 ) $ 2,691.9 $ 270.8 $ 731.3 $ 274.1 $ 11,946.7

Group 2 3,000.7 ( 436.8 ) 2,563.9 266.8 545.4 191.4 9,649.3

Corporate entities and other 174.0 ( 21.6 ) 152.4 88.7 ( 266.4 ) 143.1 2,326.1

Total $ 6,390.6 $ ( 982.4 ) $ 5,408.2 $ 626.3 $ 1,010.3 $ 608.6 $ 23,922.1

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

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Our operations primarily consist of providing environmental services.

The following table disaggregates 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,

The following table disaggregates our revenue by service line for the three and six months ended June 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

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

2022 2021 2022 2021

$ 654.1 19.2 % $ 611.6 21.7 % $ 1,282.0 20.1 % $ 1,204.7 22.2 %

Small-container

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

Environmental solutions revenue includes revenue generated by US Ecology following its acquisition on May 2, 2022.

The factors that impact the timing and amount of revenue recognized for each service line may vary based on the nature of the service performed.

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Depending on the nature of the contract, we may also generate revenue through the collection of fuel recovery fees and environmental fees which are designed to recover our internal costs of providing services to our customers.

Substantially all of the deferred revenue recognized as of December 31, 2021 was recognized as revenue during the three months ended March 31, 2022 when the service was performed.

Substantially all of the deferred revenue recognized as of December 31, 2021 was recognized as revenue during the six months ended June 30, 2022 when the service was performed.

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

Revenue Recognition

Our service obligations of a long-term nature, e.g., certain collection service contracts, are satisfied over time, and we recognize revenue based on the value provided to the customer during the period.

Our service obligations of a long-term nature, e.g., certain collection service contracts and waste treatment and disposal contracts are satisfied over time, and we recognize revenue based on the value provided to the customer during the period.

The amount billed to the customer is based on variable elements such as the number of residential homes or businesses for which collection services are provided, the volume of material collected, transported and disposed, and the nature of the material accepted.

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 prices.

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.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 prices.

Deferred Contract Costs

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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 March 31, 2022 and December 31, 2021, we recognized $ 79.3 million and $ 80.6 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three months ended March 31, 2022 and 2021, we amortized $ 3.3 million and $ 3.1 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.5 million and $ 1.6 million, respectively, of other deferred contract costs as a reduction of revenue.

As of June 30, 2022 and December 31, 2021, we recognized $ 79.8 million and $ 80.6 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and six months ended June 30, 2022, we amortized $ 3.5 million and $ 6.7 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.5 million and $ 3.0 million, respectively, of other deferred contract costs as a reduction of revenue.

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.

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 three months ended March 31, 2022 and 2021:

The following table reflects the activity in our allowance for doubtful accounts for the six months ended June 30, 2022 and 2021:

Balance at beginning of year $ 38.5 $ 34.7

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

We have recorded an aggregate accrual of approximately $ 12 million relating to our outstanding legal proceedings as of March 31, 2022.

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.

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 $ 5 million higher than the amount recorded as of March 31, 2022.

We have recorded an aggregate accrual of approximately $ 14 million relating to our outstanding legal proceedings as of June 30, 2022.

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,

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 $ 11 million higher than the amount recorded as of June 30, 2022.

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:

March 31, 2022 December 31, 2021 March 31, 2021 December 31, 2020

June 30, 2022 December 31, 2021 June 30, 2021 December 31, 2020

Cash and cash equivalents $ 119.4 $ 29.0 $ 34.0 $ 38.2

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The following table summarizes our restricted cash and marketable securities:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Financing proceeds $ 2.0 $ 12.4

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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