What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-02-23 compared with 2022-02-11 · 292 added, 279 removed, 612 unchanged (48% of the section changed)

5 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 .

Recent Developments

Acquisition of US Ecology

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

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

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 the year ended December 31, 2022, the financial results of US Ecology are included within our Group 3 reportable segment.

Impact of the COVID-19 Pandemic

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, 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 December 31, 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.

2020 and 2021, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic with awards that were paid in January 2021 and November 2021, respectively.

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

We may continue to incur similar costs in future years, although we expect the annual amount of such costs 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.

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

Acquisition of US Ecology

On February 8, 2022, we entered into a definitive agreement to acquire all outstanding shares of US Ecology, Inc.

(US Ecology) in a transaction valued at approximately $2.2 billion, including debt.

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

We intend to finance the transaction using existing and new sources of debt.

The guidance included herein does not contemplate the impact from the pending acquisition of US Ecology, which is subject to regulatory and other approvals.

2023 Financial Guidance

In 2022, we will focus on driving profitable growth, making disciplined acquisition investments, maintaining an inclusive and engaging culture for our people, delivering a superior customer experience, and advancing technology to drive operational excellence.

Our team remains focused on executing our strategy to deliver consistent earnings and free cash flow growth, and improving return on invested capital, while partnering with customers to create a more sustainable world.

We are committed to maintaining an efficient capital structure, preserving our investment grade credit ratings and increasing cash returned to our shareholders.

Our guidance is based on current economic conditions and does not assume any significant changes in the overall economy in 2022.

In 2023, we will focus on pricing in excess of cost inflation, driving profitable volume growth, investing in sustainability to improve the environment and drive growth, investing in value-creating acquisitions and advancing technology to improve productivity and increase customer retention.

Specific guidance follows:

We expect revenue to be in the range of $14.650 billion to $14.800 billion.

We expect an increase in average yield of approximately 5.5% and volume growth to be in a range of 0.5% to 1.0%.

Average yield on related business revenue is expected to be 6.5%.

Adjusted Diluted Earnings per Share

2 unchanged sentences

(Anticipated)

December 31, 2022 (Actual)

December 31, 2021

Year Ending December 31, 2023

Year Ended December 31, 2022

Diluted earnings per share $ 5.02 to 5.10

Gain on business divestitures and impairments, net — (0.01)

Restructuring charges 0.05 0.06

Loss on business divestitures and impairments, net — 0.02

Accelerated vesting of compensation expense for CEO transition — 0.07

US Ecology, Inc.

acquisition integration and deal costs 0.08 0.19

Adjusted diluted earnings per share $ 5.15 to 5.23 $ 4.93

8 unchanged sentences

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

As of December 31, 2021, we operated facilities in 41 states through 356 collection operations, 239 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.

As of December 31, 2022, we operated across the United States and Canada through 353 collection operations, 233 transfer stations, 71 recycling centers, 206 active landfills, 3 treatment, recovery and disposal facilities, 20 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells and 7 deep injection wells.

We are engaged in 73 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 128 closed landfills.

Revenue for the year ended December 31, 2022 increased by 19.6% to $13,511.3 million compared to $11,295.0 million in 2021.

This change in revenue is due to increased volume of 3.8%, average yield of 2.9%, acquisitions, net of divestitures of 2.8%, recycling processing and commodity sales of 1.1%, and fuel recovery fees of 0.8%, partially offset by decreased environmental solutions revenue of 0.1%.

This change in revenue is due to increased volume of 2.4%, average yield of 5.2%, acquisitions, net of divestitures of 9.6%, fuel recovery fees of 2.6% and environmental solutions revenue of 0.5%, partially offset by decreased recycling processing and commodity sales of 0.6%.

Additionally, revenue decreased 0.1% due to one less workday in 2022 as compared to 2021.

9 unchanged sentences

Selling, general and administrative 1,454.3 10.8 1,195.8 10.6

Withdrawal costs - multiemployer pension funds

Loss on business divestitures and impairments, net

0.5 — 77.7 0.8

Adjustment to withdrawal liability for multiemployer pension funds (1.6) — — —

(Gain) loss on business divestitures and impairments, net (6.3) — 0.5 —

Restructuring charges 27.0 0.2 16.6 0.1

3 unchanged sentences

was $1,487.6 million, or $4.69 per diluted share for 2022, compared to $1,290.4 million, or $4.04 per diluted share, for 2021.

During 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.

During 2022 and 2021, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax impact, 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).

1 unchanged sentence

For comparative purposes, prior year amounts have been reclassified to conform to current year presentation.

Year Ended December 31, 2021

Year Ended December 31, 2020

Year Ended December 31, 2022 Year Ended December 31, 2021

Income Tax Impact (2)

Republic Diluted

Share Pre-tax

Income Tax Impact (2)

Republic Diluted

As reported $ 1,831.5 $ 343.9 $ 1,487.6 $ 4.69 $ 1,575.1 $ 282.8 $ 1,290.4 $ 4.04

Loss on extinguishment of debt and other related costs

— — — 99.1 73.0 0.23

Restructuring charges 27.0 7.1 19.9 0.06 16.6 4.4 12.2 0.04

Loss on business divestitures and impairments, net

0.5 6.0 0.02 77.7 65.5 0.21

Withdrawal costs - multiemployer pension funds

— — — 34.5 25.5 0.08

Bridgeton insurance recovery

(Gain) loss on business divestitures and impairments, net (6.3) (2.5) (3.8) (0.01) 0.5 (5.5) 6.0 0.02

Adjustment to withdrawal liability for multiemployer pension funds (1)

(1.6) (0.4) (1.2) — — — — —

Accelerated vesting of compensation expense for CEO transition — — — — 22.0 — 22.0 0.07

22.0 22.0 0.07 — — —

US Ecology, Inc.

acquisition integration and deal costs 77.3 17.0 60.3 0.19 — — — —

Total adjustments 96.4 21.2 75.2 0.24 39.1 (1.1) 40.2 0.13

As adjusted $ 1,927.9 $ 365.1 $ 1,562.8 $ 4.93 $ 1,614.2 $ 281.7 $ 1,330.6 $ 4.17

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 year ended December 31, 2022.

(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, provide an understanding of operational activities before the financial impact of certain items.

1 unchanged sentence

We have incurred comparable charges and costs 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 and other related costs.

During 2020, we incurred a loss on the early extinguishment of debt and other related costs related to the early extinguishment of our $600.0 million 5.250% senior notes due November 2021 (the 2021 Notes) and our $850.0 million 3.550% senior notes due June 2022 (the 2022 Notes), and to redeem $250.0 million of the $550.0 million outstanding 4.750% senior notes due May 2023 (the 2023 Notes).

We paid total cash premiums of $99.1 million and

incurred non-cash charges related to the proportional share of unamortized discounts and deferred issuance costs of $2.8 million.

The unamortized proportional share of certain cash flow hedges reclassified to earnings as non-cash interest expense was $1.8 million, and the proportional share of our fair value hedges (related to the 2023 Notes) that were dedesignated and recognized in earnings as a reduction to non-cash interest expense was $4.7 million.

During 2021, we did not incur a loss on the early extinguishment of debt.

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.

In 2021 and 2020 , we incurred restructuring charges of $16.6 million and $20.0 million, respectively.

In 2022 and 2021, we incurred restructuring charges of $27.0 million and $16.6 million , respectively, primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems.

These systems were placed into production in 2022, and we do not expect to incur future costs related to the implementation of these systems.

We paid $19.8 million and $17.2 million during 2022 and 2021, respectively, related to these restructuring efforts.

In 2022, we expect to incur additional restructuring charges of approximately $20 million primarily related to the redesign of certain of our back-office software systems.

In 2023, we expect to incur restructuring charges of approximately $20 million, primarily related to the redesign of our customer billing and asset management software systems.

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

Loss on business divestitures and impairments, net.

During 2021, we recorded a loss of $0.5 million related to business divestitures and asset impairments in certain markets.

Additionally, we recognized an increase in our deferred tax provision of $5.5 million due to a change in our U.S.

operational footprint as a result of certain acquisitions that closed during the period.

During 2020, we recorded a net loss on business divestitures and impairments of $77.7 million, including $42.6 million resulting from management’s decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

Withdrawal costs - multiemployer pension funds.

During 2020, we recorded charges to earnings of $34.5 million for withdrawal events at multiemployer pension funds to which we contribute.

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

During 2022, we recorded a net gain on business divestitures and impairments of $6.3 million.

During 2021, we recorded a loss of $0.5 million related to business divestitures and asset impairments.

Additionally, we recognized an increase in our deferred tax provision of $5.5 million due to a change in our United States operational footprint as a result of certain acquisitions that closed during the period.

Adjustment to withdrawal liability for multiemployer pension funds.

During 2022, we recorded a net reduction of $1.6 million related to the remeasurement of withdrawal costs liabilities from multiemployer pension plans.

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 2020, we recognized an insurance recovery of $10.8 million, related to our closed Bridgeton Landfill in Missouri, which we recognized as a reduction of remediation expenses in our cost of operations.

Accelerated vesting of compensation expense for CEO transition.

2 unchanged sentences

During 2021, we recognized a charge of $22.0 million primarily related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

US Ecology, Inc.

acquisition integration and deal costs.

During the year ended December 31, 2022, we incurred $77.3 million 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 awards at closing as well as severance and change-in-control payments.

The acquisition closed on May 2, 2022 .

In 2023 , we expect to incur costs of approximately $35 million to integrate the US Ecology business, primarily related to the integration of certain software systems as well as rebranding the business.

We expect to be substantially complete with our integration activities by the end of 2023 .

Results of Operations

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

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

2 unchanged sentences

Our transfer stations and landfills generate revenue from disposal or tipping fees charged to third parties.

Our recycling processing centers generate revenue from tipping fees charged to third parties and the sale of recycled commodities.

Our revenue from environmental solutions consists mainly of fees we charge for

disposal of hazardous and non-hazardous solid and liquid material and in-plant services, such as transportation and logistics,

including at our TSDFs.

Our recycling centers generate revenue from tipping fees charged to third parties and the sale of recycled commodities.

Our revenue from environmental solutions primarily consists of (1) fees we charge for the collection, treatment, transfer and disposal of hazardous and non-hazardous waste, (2) field and industrial services, (3) equipment rental, (4) emergency response and standby services, (5) in-plant services, such as transportation and logistics, including at our TSDFs and (6) in-plant services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response at refineries, chemical, steel and automotive plants and other governmental, commercial and industrial facilities.

Other non-core revenue consists primarily of revenue from National Accounts, which represents the portion of revenue generated from nationwide or regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators.

14 unchanged sentences

Environmental solutions 1,262.1 242.4

intercompany (53.9) (19.5)

Environmental solutions, net 1,208.2 8.9 222.9 2.0

Recycling processing and commodity sales

17 unchanged sentences

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 3.1% and 2.8% for 2021 and 2020, respectively.

Core price as a percentage of related-business revenue was 5.3% and 5.1% for 2021 and 2020, respectively.

The following table reflects average yield and core price as a percentage of related-business revenue for the years ended December 31, 2022 and 2021:

Years Ended December 31,

As a % of Related Business

Average yield 5.7 % 3.1 %

Core price 7.3 % 5.3 %

During 2022, we experienced the following changes in our revenue as compared to 2021:

• Average yield increased revenue by 2.9% due to positive pricing changes in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, increased revenue by 0.8%, primarily due to an increase in fuel prices compared to the same period in 2020 and an increase in the total revenue subject to the fuel recovery fees.

• Volume increased revenue by 3.8% during 2021 as compared to 2020 primarily due to volume growth in our landfill, transfer, and small- and large-container collection lines of business, partially offset by a decline in residential collection volumes.

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

In mid-March 2020, certain customers in these lines of business began adjusting their services 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.

These increases were partially offset by one less workday as compared to 2020.

• Recycling processing and commodity sales increased revenue by 1.1% primarily due to an increase in overall commodity prices as compared to 2020.

• Average yield increased revenue by 5.2% due to positive pricing changes 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 2.6%, primarily due to an increase in fuel prices compared to 2021 and an increase in the total revenue subject to the fuel recovery fees.

• Volume increased revenue by 2.4% during 2022 as compared to 2021 primarily due to volume growth in our landfill and all our collection lines of business, partially offset by a decrease in volume in our transfer line of business.

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

• Recycling processing and commodity sales decreased revenue by 0.6% primarily due to a decrease in overall commodity prices as compared to 2021.

The average price for recycled commodities, excluding glass and organics for 2022 was $170 per ton compared to $187 per ton for 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 will change annual revenue and operating income by approximately $22 million and $10 million, respectively.

• During 2021, environmental solutions decreased revenue by 0.1% primarily due to a decrease in rig counts, drilling activity, and the delay of in-plant project work as a result of lower demand for crude oil which began in 2020.

• Acquisitions, net of divestitures, increased revenue by 2.8% due to our continued growth strategy of acquiring privately held environmental services companies that complement our existing business platform.

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

• During 2022, environmental solutions revenue increased by 0.5% primarily due to an increase in volumes, including those driven by an increase in rig counts and drilling activity.

This revenue increase excludes the impact from our acquisition of US Ecology.

• Acquisitions, net of divestitures, increased revenue by 9.6%, reflecting the results of our continued growth strategy of acquiring solid waste, recycling and environmental services companies, including US Ecology, that complement and expand our existing business platform.

Cost of Operations

2 unchanged sentences

maintenance and repairs relating to our vehicles, equipment and containers, including related labor and benefit costs;

transportation and subcontractor costs, which include costs for independent haulers that transport our material to disposal facilities and costs for local operators who provide environmental services associated with our National Accounts in markets outside our standard operating areas;

transportation and subcontractor costs, which include costs for independent haulers that transport our waste to disposal facilities and costs for local operators that provide waste handling services associated with our National Accounts in markets outside our standard operating areas;

fuel, which includes the direct cost of fuel used by our vehicles, net of fuel tax credits;

16 unchanged sentences

Subtotal 8,204.7 60.7 6,737.7 59.7

Bridgeton insurance recovery

— — (10.8) (0.1)

US Ecology, Inc.

acquisition integration and deal costs 0.3 — — —

Total cost of operations $ 8,205.0 60.7 % $ 6,737.7 59.7 %

2 unchanged sentences

Our cost of operations increased for the year ended December 31, 2022 compared to the same period in 2021 as a result of the following:

• 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.

This increase was partially offset by one less workday during 2021 as compared to 2020.

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

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the increase in labor and related benefits in aggregate dollars.

• Transfer and disposal costs increased in aggregate dollars primarily due to acquisition-related growth, including the acquisition of US Ecology.

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

During both 2022 and 2021, approximately 68% 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 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 2021 as compared to 2020.

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

The national average cost per gallon for diesel fuel in 2021 was $3.29 compared to $2.55 for 2020.

• Maintenance and repairs expense increa sed in aggregate dollars due to an increase in the price of replacement parts as well as an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

• Transportation and subcontract costs increased in 2022 due to an increase in third-party transportation fees, partially driven by the higher cost of fuel passed on through higher transportation surcharges, and an increase in subcontract work attributable to a corresponding increase in non-core revenues as compared to 2021.

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the increase in transportation and subcontract costs.

• 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 2022 was $4.99 compared to $3.29 for 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 $27 million per year.

1 unchanged sentence

At current participation rates, we believe a twenty-cent per gallon change in the price of diesel fuel would change our fuel recovery fee by approximately $31 million per year.

• Disposal fees and taxes increased in aggregate dollars due to an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

• Risk management expenses increased 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.

• During 2020, we recognized an insurance recovery of $10.8 million, related to our closed Bridgeton Landfill in Missouri, which we recognized as a reduction of remediation expenses included in our cost of operations in our consolidated statement of income.

• Disposal fees and taxes increased in aggregate dollars in 2022 primarily due to increased royalties and host fees from an increase in volume at certain landfills as compared to 2021.

• Landfill operating costs increased in aggregate dollars during 2022 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 primarily due to unfavorable actuarial development in our auto liability claims as well as higher premium costs.

• During 2022, we incurred $0.3 million of acquisition integration and deal costs within cost of operations in connection with the acquisition of US Ecology.

• Other costs of operations increased during 2022 due to increased occupancy and facility related expenses, acquisition-related activity and higher third-party truck and equipment rental expense to support higher volumes.

Depreciation, Amortization and Depletion of Property and Equipment

3 unchanged sentences

Depreciation, amortization and depletion expense $ 1,245.6 9.2 % $ 1,111.7 9.8 %

Depreciation and amortization of property and equipment increased primarily due to additional assets acquired with our acquisitions, an increase in the cost of replacement vehicles and container assets, as well as increased capital expenditures on vehicles to support volume growth.

Landfill depletion and amortization increased due to higher landfill disposal volumes, primarily driven by increased solid and special waste volumes, coupled with increased depletion rates.

Additionally, we recognized favorable amortization adjustments related to our asset retirement obligations in 2020 that did not recur in 2021.

Depreciation and amortization of property and equipment increased primarily due to assets added through acquisitions.

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

Amortization of Other Intangible Assets

Expenses for amortization of other intangible assets were $53.9 million, or 0.4% of revenue, for the year ended December 31, 2022, compared to $33.3 million, or 0.3% of revenue, for 2021.

Our other intangible assets primarily relate to customer relationships and, to a lesser extent, non-compete agreements.

Amortization expense increased due to additional assets acquired as a result of our business acquisitions.

Amortization of Other Assets

Expenses for amortization of other assets were $40.5 million, or 0.4% of revenue, for the year ended December 31, 2021, compared to $38.8 million, or 0.4% of revenue, for 2020.

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 $52.1 million, or 0.4%, for the year ended December 31, 2022, compared to $40.5 million, or 0.4% revenue, for 2021.

Accretion Expense

Accretion expense was $89.6 million, or 0.7% of revenue, and $82.7 million, or 0.7% of revenue, for the years ended December 31, 2022 and 2021, respectively.

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

Accretion expense increased in aggregate dollars due to acquired asset retirement obligations.

Selling, General and Administrative Expenses

8 unchanged sentences

Accelerated vesting of compensation expense for CEO transition — — 22.0 0.2

US Ecology, Inc.

acquisition integration and deal costs 77.0 0.6 — —

Total selling, general and administrative expenses $ 1,454.3 10.8 % $ 1,195.8 10.6 %

2 unchanged sentences

The most significant items affecting our selling, general and administrative expenses during 2022 as compared to 2021 are summarized below:

• Salaries and related benefits increased primarily due to higher management incentive expenses as a result of outperforming our annual incentive metrics.

• In 2021, the provision for doubtful accounts decreased as a result of an improved trend in historical collections.

Our days sales outstanding changed from 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021 compared to 38.6, or 26.4 days net of deferred revenue, as of December 31, 2020.

• Other selling, general and administrative expenses increased during 2021, primarily due to an increase in recruiting, advertising, and bank fees.

Meetings and events expenses also increased during 2021 following a decrease in 2020 as a result of the COVID-19 pandemic.

These increases were partially offset by a decrease in professional fees, acquisition deal costs and unfavorable changes in certain legal reserves during 2020, which did not recur in 2021.

• During 2021, we recognized a charge of $22.0 million primarily related to the accelerated vesting of Donald W.

Slager's compensation awards that were previously scheduled to vest in 2022 and beyond as a result of his retirement as Chief Executive Officer (CEO) of Republic Services, Inc.

in June 2021.

Withdrawal Costs - Multiemployer Pension Funds

During 2020, we recorded charges to earnings of $34.5 million for withdrawal events at multiemployer pension funds to which we contribute.

We paid $34.4 million during 2020 relative to these withdrawal events.

• Salaries and related benefits increased in aggregate dollars primarily due to higher wages, benefits and other payroll related items resulting from annual merit increases, offset, in part, by lower management incentive expenses.

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the growth in salaries and related benefits in aggregate dollars.

• Provision for doubtful accounts increased primarily due to an increase in days sales outstanding and acquisition-related activity.

As of December 31, 2022 , our days sales outstanding were 43.3, or 31.8 days net of deferred revenue, compared to 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021.

Excluding our acquisition of US Ecology, our days sales outstanding were 39.1, or 27.3 days net of deferred revenue, as of December 31, 2022.

• Other selling, general and administrative expenses increased for the year ended December 31, 2022, largely due to an increase in advertising and travel costs and acquisition-related growth, including US Ecology.

• In June 2021, Donald W.

Slager retired as CEO of Republic Services, Inc.

During the year ended December 31, 2021, we recognized a charge of $22.0 million, related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

• During the year ended December 31, 2022, we incurred $77.0 million of acquisition integration and deal costs within selling, general and administration expense 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 awards at closing as well as severance and change-in-control payments.

The acquisition closed on May 2, 2022.

Adjustment to Withdrawal Liability for Multiemployer Pension Funds

During t he year ended December 31, 2022 , we recorded a net reduction of $1.6 million related to the remeasurement of withdrawal costs liabilities from multiemployer pension plans.

Loss (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.

(Gain) loss on Business Divestitures and Impairments, Net

We strive to have a leading 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.

Where we cannot establish a leading market position, or where operations are not generating acceptable returns, we may decide to divest certain assets and reallocate resources to other markets.

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

During 2021, we recorded a net loss on business divestitures and impairments of $0.5 million, which was due to business divestitures in certain markets.

During 2020, we recorded a net loss on business divestitures and impairments of $77.7 million, including $42.6 million resulting from management's decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

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

During the years ended December 31, 2022 and 2021, we recorded a net gain (loss) on business divestitures and impairments of $6.3 million and $0.5 million, respectively.

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 2021 and 2020 , we incurred restructuring charges of $16.6 million and $20.0 million, respectively.

These systems were placed into production in 2022, and we do not expect to incur future costs related to the implementation of these systems.

We paid $19.8 million and $17.2 million during 2022 and 2021, respectively, related to these restructuring efforts.

In 2022, we expect to incur additional restructuring charges of approximately $20 million primarily related to the redesign of certain of our back-office software systems.

In 2023, we expect to incur additional restructuring charges of approximately $20 million primarily related to the implementation of replacement billing and collection software systems.

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

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 (in millions of dollars):

Interest expense on debt $ 329.0 $ 249.1

2 unchanged sentences

Total interest expense $ 395.6 $ 314.6

Total interest expense for 2021 decreased compared to 2020 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 senior notes in 2020 with coupons ranging from 0.875% to 3.050%, the proceeds of which were used to repay outstanding senior notes with coupons ranging from 3.550% to 5.500%.

During 2021 and 2020, cash paid for interest, excluding net swap settlements for our fixed to floating interest rate swaps, was $249.4 million and $325.1 million, respectively.

Loss on Extinguishment of Debt

During 2020, we incurred a $101.9 million loss on the early extinguishment of debt.

We paid total cash premiums during the year totaling $99.1 million and incurred non-cash charges related to the proportional share of unamortized discounts and deferred issuance costs of $2.8 million .

Total interest expense for 2022 increased compared to 2021 primarily due to additional outstanding debt to fund the purchase of US Ecology and higher interest rates on our floating rate debt.

Cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $311.5 million and $249.4 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, we had $3,349.1 million of floating rate debt including floating rate swap contracts.

If interest rates increased or decreased by 100 basis points on our variable rate debt, annualized interest expense and net cash payments for interest would increase or decrease by approximately $33 million.

Our provision for income taxes was $343.9 million and $282.8 million for 2022 and 2021, respectively.

Our effective income tax rate was 18.0% and 15.2% for 2021 and 2020, respectively.

We made income tax payments (net of refunds) of approximately $300 million and $124 million for 2021 and 2020, respectively.

Income taxes paid in 2021 and 2020 reflect benefits from tax credits from our continuing investments in solar energy.

For 2020, cash taxes paid reflect benefits from 100% bonus depreciation on qualified assets.

Our effective tax rate, exclusive of non-controlling interests, for the years ended December 31, 2022 and 2021 was 18.8% and 18.0%, respectively.

Net cash paid for income taxes was approximately $185 million and $300 million for the years ended December 31, 2022 and 2021, respectively.

During 2022, we acquired non-controlling interests in limited liability companies established to own solar energy assets that qualified for investment tax credits under Section 48 of the Internal Revenue Code.

2 unchanged sentences

Our 2022 tax provision reflects a benefit of approximately $139 million due to the tax credits related to these investments.

Our 2020 tax provision was reduced by $11.6 million from excess tax benefits related to stock compensation, approximately $100 million related to the tax credits from our non-controlling interest in limited liability companies established to own solar energy assets, $17.2 million for adjustments to our valuation allowance due to the realizability of certain state loss carryforwards, and $8.2 million due to the realization of additional federal and state benefits as well as adjustments to deferred taxes due to the completion of our 2019 tax returns.

Our 2021 tax provision was reduced by approximately $126 million related to the tax credits from our non-controlling interest in limited liability companies established to own solar energy assets.

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law.

The IRA, among other things, implements a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on stock repurchases and extends, enhances and creates several tax incentives to promote clean energy.

While we continue to evaluate the IRA, at present, outside of the potential for future energy credits, we do not believe it will have a material effect on our audited consolidated financial statements.

We have deferred tax assets related to state net operating loss carryforwards with an estimated tax effect of approximately $77 million available as of December 31, 2022.

2 unchanged sentences

In recognition of this risk, as of December 31, 2022, we have provided a valuation allowance of approximately $42 million.

For additional discussion and detail regarding our income taxes, see Note 11, Income Taxes , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Reportable Segments

Our senior management evaluates the financial performance of our operations through three operating segments.

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 2% of our consolidated revenue.

Each operating segment provides integrated environmental services, including collection, transfer, recycling, and disposal.

Summarized financial information concerning our reportable segments for the years ended December 31, 2021 and 2020 is shown in the following table (in millions of dollars and as a percentage of revenue in the case of operating margin):

Revenue Depreciation, Amortization, Depletion and

Accretion Before

Adjustments for

Asset Retirement

Obligations Adjustments to Amortization

Obligations Depreciation,

Amortization,

Depletion and

Accretion Loss on

Business Divestitures and Impairments, Net Operating

(Loss) Operating

$ 5,558.9 $ 555.1 $ (7.0) $ 548.1 $ — $ 1,495.7 26.9 %

5,333.6 543.8 (2.5) 541.3 — 1,135.7 21.3 %

Corporate entities and other

402.5 162.4 16.4 178.8 0.5 (555.2) —

$ 11,295.0 $ 1,261.3 $ 6.9 $ 1,268.2 $ 0.5 $ 2,076.2 18.4 %

$ 5,057.5 $ 522.1 $ (20.0) $ 502.1 $ — $ 1,343.3 26.6 %

4,791.9 506.5 (17.6) 488.9 — 966.8 20.2 %

Corporate entities and other

304.2 142.7 25.1 167.8 77.7 (601.0) —

$ 10,153.6 $ 1,171.3 $ (12.5) $ 1,158.8 $ 77.7 $ 1,709.1 16.8 %

Financial information for the year ended December 31, 2020 reflects the transfer of our Environmental Solutions operating segment from Group 2 to Corporate entities and other, to align with how our chief operating decision maker began evaluating our operations in December 2020.

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

National Accounts revenue included in corporate entities represents the portion of revenue generated from nationwide and regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators.

Our senior management evaluates, oversees and manages the financial performance of our operations through three field groups, referred to as Group 1, Group 2 and Group 3.

Group 1 is our recycling and solid waste business operating primarily in geographic areas located in the western United States.

Group 2 is our recycling and solid waste business operating primarily in geographic areas located in the southeastern and mid-western United States and the eastern seaboard of the United States.

Group 3 is our environmental solutions business operating primarily in geographic areas located across the United States and Canada.

These groups are presented below as our reportable segments, which each provide integrated environmental services, including but not limited to collection, transfer, recycling and disposal.

Prior to the third quarter of 2022, our environmental solutions operating segment, now referred to as our Group 3 reportable segment, was aggregated with Corporate entities and other.

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

National Accounts revenue included in Corporate entities and other represents the portion of revenue generated from nationwide and regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators.

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 for 2021 compared to 2020 are discussed below.

Revenue for 2021 increased 9.9% from 2020 due to an increase in both average yield and volume in all lines of business.

Operating income in Group 1 increased from $1,343.3 million for 2020, or a 26.6% operating margin, to $1,495.7 million for 2021, or a 26.9% operating margin.

Operating income margin during 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 2021 increased 11.3% from 2020 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 $966.8 million for 2020, or a 20.2% operating margin, to $1,135.7 million for 2021, or a 21.3% operating margin.

Operating income margin for 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.

Corporate Entities and Other

The Corporate entities and other operating loss decreased from $601.0 million for 2020 to $555.2 million for 2021.

During 2021, we recorded a net loss on business divestitures and impairments of $0.5 million.

Summarized financial information regarding our reportable segments for the years ended December 31, 2022 and 2021 (in millions of dollars and as a percentage of revenue in the case of adjusted EBITDA margin) follows.

For totals as well as further detail regarding our reportable segments and the adjustments used to calculate gross Adjusted EBITDA, net Adjusted EBITDA and adjusted EBITDA margin for each segment, see Note 15, Segment Reporting , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Group 1 Group 2 Group 3 Corporate entities and other

Year Ended December 31, 2022

Gross Revenue $ 7,240.5 $ 6,903.8 $ 1,262.5 $ 238.3

Intercompany Revenue (1,104.5) (930.9) (46.6) (51.8)

Net Revenue $ 6,136.0 $ 5,972.9 $ 1,215.9 $ 186.5

Gross Adjusted EBITDA $ 1,979.4 $ 1,685.9 $ 253.7 $ 10.3

Adjusted EBITDA allocations 27.5 25.4 (42.6) (10.3)

Net Adjusted EBITDA $ 2,006.9 $ 1,711.3 $ 211.1 $ —

Adjusted EBITDA margin 32.2 % 28.2 % 17.4 % — %

Capital Expenditures $ 626.2 $ 527.7 $ 141.7 $ 158.4

Total Assets $ 12,494.3 $ 10,439.4 $ 4,086.3 $ 2,032.9

Year Ended December 31, 2021

Gross Revenue $ 6,630.0 $ 6,229.1 $ 242.4 $ 220.3

Intercompany Revenue (1,071.1) (905.7) (19.5) (30.5)

Net Revenue $ 5,558.9 $ 5,323.4 $ 222.9 $ 189.8

Gross Adjusted EBITDA $ 1,841.1 $ 1,494.8 $ 44.6 $ 3.0

Adjusted EBITDA allocations 1.6 1.4 — (3.0)

Net Adjusted EBITDA $ 1,842.7 $ 1,496.2 $ 44.6 $ —

Adjusted EBITDA margin 32.6 % 27.6 % 20.0 % — %

Capital Expenditures $ 601.9 $ 541.8 $ 50.8 $ 121.8

Total Assets $ 12,199.2 $ 9,926.9 $ 1,211.6 $ 1,617.3

Significant changes in the revenue, Adjusted EBITDA and Adjusted EBITDA margin of our reportable segments for 2022 compared to 2021 are discussed below.

Net revenue for the year ended December 31, 2022 increased 10.4% from 2021 due to an increase in average yield and volume in all lines of business.

The increase in landfill volume was attributable to an increase in special waste and construction and demolition volumes, offset in part by a decrease in solid waste volumes.

Revenue also increased due to acquisition-related growth.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $1,842.7 million for the year ended December 31, 2021, or a 32.6% adjusted EBITDA margin, to $2,006.9 million, or a 32.2% adjusted EBITDA margin for the year ended December 31, 2022.

Adjusted EBITDA margin for the year ended December 31, 2022 was unfavorably impacted by an increase in vehicle and equipment rental fees, transportation and subcontract costs driven by increases in volume, as well as higher disposal costs due to an increase in third party disposal rates, higher maintenance costs due to inflationary pressures on parts and materials and increased transportation and subcontract costs driven by the increase in volume.

The unfavorable impact was partially offset by the increase in revenue attributable to both acquisition activity and the economic recovery from the COVID-19 pandemic.

Net revenue for the year ended December 31, 2022 increased 12.2% from 2021 due to an increase in average yield in all lines of business and volume in our landfill and small- and large-container collection lines of business.

These increases were partially offset by volume declines in our residential and transfer station lines of business.

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

Revenue also increased due to acquisition-related growth.

Adjusted EBITDA in Group 2 increased from $1,496.2 million for the year ended December 31, 2021, or a 27.6% adjusted EBITDA margin, to $1,711.3 million, or a 28.2% adjusted EBITDA margin for the year ended December 31, 2022.

Adjusted EBITDA margin for the year ended December 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 an increase in vehicle and equipment rental fees and transportation and subcontract costs driven by the increases in volume.

Revenue for the year ended December 31, 2022 increased primarily due to the acquisition of US Ecology, as well as an increase in rig counts and drilling activity.

Adjusted EBITDA in Group 3 increased from $44.6 million for the year ended December 31, 2021, or a 20.0% adjusted EBITDA margin, to $211.1 million for the year ended December 31, 2022, or an 17.4% adjusted EBITDA margin.

Adjusted EBITDA margin for the year ended December 31, 2022 decreased due to the acquisition of US Ecology.

Landfill and Environmental Matters

12 unchanged sentences

Available Airspace

As of December 31, 2021 and 2020, we owned or operated 198 and 186 active solid waste landfills, respectively, with total available disposal capacity estimated to be 5.0 billion in-place cubic yards in both years.

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

Balance as of December 31, 2020 New

As of December 31, 2022 , we owned or operated 206 active 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 as of December 31, 2022.

Balance as of December 31, 2021

Undertaken Landfills

10 unchanged sentences

Probable expansion airspace 11 3 — (1) 13

Balance as of December 31, 2019 New

The following table reflects changes in capacity and remaining capacity for these landfills, as measured in cubic yards of airspace, as of December 31, 2021 .

Balance as of December 31, 2020

Undertaken Landfills

13 unchanged sentences

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.

See Note 2, Summary of Significant Accounting Policies, and Note 8, Landfill and Environmental Costs , of the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

See Note 2, Summary of Significant Accounting Policies, and Note 8, Landfill and Environmental Costs , of the notes to our audited consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

Also see our Critical Accounting Judgments and Estimates section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

18 unchanged sentences

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

In 2020, we recognized an insurance recovery of $10.8 million related to our closed Bridgeton Landfill in Missouri as a reduction of remediation expenses included in our cost of operations.

For a description of our significant remediation matters, see Note 8, Landfill and Environmental Costs, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

For a description of our significant remediation matters, see Note 8, Landfill and Environmental Costs, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Investment in Landfills

2 unchanged sentences

The following table reflects our future expected investment as of December 31, 2022 (in millions):

Balance as of December 31, 2021 Expected

Balance as of December 31, 2022

Investment Total

15 unchanged sentences

Property and Equipment

The following tables reflect the activity in our property and equipment accounts for the years ended December 31, 2021 and 2020 (in millions of dollars):

The following tables reflect the activity in our property and equipment accounts for the year ended December 31, 2022 (in millions of dollars):

Gross Property and Equipment

Balance as of December 31, 2020 Capital

Balance as of December 31, 2021

Additions Retirements Acquisitions,

11 unchanged sentences

Accumulated Depreciation, Amortization and Depletion

Balance as of December 31, 2020 Additions

Balance as of December 31, 2021

Expense Retirements Acquisitions,

6 unchanged sentences

Total $ (10,549.9) $ (1,255.4) $ 272.6 $ 6.6 $ 5.7 $ 23.7 $ (11,496.7)

The following tables reflect the activity in our property and equipment accounts for the year ended December 31, 2021 (in millions of dollars):

Gross Property and Equipment

Balance as of December 31, 2019 Capital

Balance as of December 31, 2020

Additions Retirements Acquisitions,

11 unchanged sentences

Accumulated Depreciation, Amortization and Depletion

Balance as of December 31, 2019 Additions

Balance as of December 31, 2020

Expense Retirements Acquisitions,

13 unchanged sentences

Cash, cash equivalents, restricted cash and restricted cash equivalents $ 214.3 $ 105.6

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, and restricted cash and marketable securities related to our insurance obligations.

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, and restricted cash and marketable securities related to our insurance obligations and 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.

The following table summarizes our restricted cash and marketable securities as of December 31:

6 unchanged sentences

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

(1) capital expenditures and leases, (2) acquisitions, (3) dividend payments, (4) share repurchases, (5) repayments to service debt and other long-term obligations, and (6) payments for asset retirement obligations and environmental liabilities.

(1) capital expenditures and leases, (2) acquisitions, (3) dividend payments, (4) repayments to service debt and other long-term obligations, (5) payments for asset retirement obligations and environmental liabilities and (6) share repurchases.

Capital Expenditures and Leases

1 unchanged sentence

These investments are largely concentrated in vehicles and equipment and costs to construct our landfills.

We expect to spend approximately $1.3 billion on capital expenditures in 2022.

We expect to receive between $1.65 billion to $1.67 billion of property and equipment, net of proceeds from the sale of property and equipment, in 2023.

We lease property and equipment in the ordinary course of business under various lease agreements.

4 unchanged sentences

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

In 2022, we expect to invest at least $500 million in acquisitions.

We expect to invest at least $500 million in acquisitions in 2023.

Dividend Payments

2 unchanged sentences

As of December 31, 2022, we recorded a quarterly dividend payable of $156.4 million to shareholders of record at the close of business on January 3, 2023, which was paid on January 13, 2023.

Share Repurchases

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

Share repurchases under the current program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws.

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

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

As of December 31, 2021, the remaining authorized purchase capacity under our October 2020 repurchase program was $1.7 billion.

Debt and other long-term obligations

5 unchanged sentences

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.

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 (the Commercial Paper Cap).

In August 2022, the Commercial Paper Cap was increased to $1.0 billion.

As of December 31, 2022, we had $1.0 billion principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 4.670% and weighted average maturity of 36 days.

In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund the amounts borrowed under the commercial paper program until they are re-borrowed successfully.

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

As of December 31, 2022, the total principal value of our debt was $11.9 billion, of which $456.0 million is due in 2023.

2 unchanged sentences

Our unconditional purchase commitments have varying expiration dates, with some extending through the remaining life of the respective landfill.

Future minimum payments under unconditional purchase commitments, consisting primarily of (1) disposal related agreements, which include fixed or minimum royalty payments, host agreements, and take-or-pay and put-or-pay agreements, and (2) other obligations including committed capital expenditures and consulting service agreements.

As of December 31, 2021 such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $772.3 million, of which $142.6 million is short-term.

Future minimum payments under unconditional purchase commitments consist primarily of (1) disposal related agreements, which include fixed or minimum royalty payments, host agreements and take-or-pay and put-or-pay agreements and (2) other obligations including committed capital expenditures and consulting service agreements.

December 31, 2022, such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $745.2 million, of which $133.9 million was short-term.

For additional detail regarding our debt and known contractual and other obligation, see Note 9, Debt, and Note 19, Commitments and Contingencies , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

6 unchanged sentences

For additional detail regarding our asset retirement obligations and environmental liabilities, see Note 8, Landfill and Environmental Costs , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Share Repurchases

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

Share repurchases under the current program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws.

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

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

Summary of Cash Flow Activity

3 unchanged sentences

Net cash used in investing activities $ (4,423.0) $ (2,466.1)

Net cash used in financing activities $ (329.2) $ (612.0)

Net cash provided by (used in) financing activities $ 1,344.2 $ (329.2)

Cash Flows Provided by Operating Activities

The most significant items affecting the comparison of our operating cash flows for 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 $94.0 million in 2021, compared to a decrease of $129.9 million 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 $135.4 million during 2021, compared to a $13.8 million decrease in 2020.

As of December 31, 2021, our days sales outstanding were 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021 compared to 38.6, or 26.4 days net of deferred revenue, as of December 31, 2020.

• Our prepaid expenses and other assets increased $57.0 million in 2021 compared to a decrease of $6.5 million in 2020, primarily due to additional SaaS implementation costs incurred related to the redesign of certain back-office software systems in 2021.

The decrease in 2020 was primarily attributable to the receipt of the Bridgeton landfill settlement in the first quarter of 2020, and an increase in alternative fuel tax credit receipts during 2020 compared to 2019, partially offset by an increase of prepaid taxes due to the timing of our estimated tax payments.

We made income tax payments (net of refunds) of approximately $300 million and $124 million for 2021 and 2020, respectively.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, decreased our cash flow from operations by $231.0 million in 2022, compared to a decrease of $94.0 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 $198.8 million during 2022, due to the timing of billings net of collections, compared to a $135.4 million increase in the same period in 2021.

As of December 31, 2022, our days sales outstanding were 43.3, or 31.8 days net of deferred revenue, compared to 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021.

• Our prepaid expenses and other assets increased $83.8 million in 2022 compared to a $57.0 million increase in 2021, primarily due to additional SaaS implementation costs incurred related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems in 2022.

Cash paid for income taxes was $185 million and $300 million for 2022 and 2021, respectively.

Income taxes paid in 2022 and 2021 reflected benefits from tax credits from our continuing investments in solar energy.

In 2020, cash taxes paid also reflected a benefit from 100% bonus depreciation on qualified assets.

• Our accounts payable increased $113.8 million during 2021 compared to a decrease of $46.7 million during 2020, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $1.0 million higher during 2021 compared to 2020.

• Our accounts payable increased $106.4 million during 2022 compared to a $113.8 million increase during 2021, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $64.6 million during 2022 compared to $59.6 million for 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 $6.4 million lower during 2021 compared to 2020, primarily due to $18.9 million in payments related to management and monitoring of the remediation area of our closed Bridgeton Landfill in Missouri during 2021 as compared to $25.6 million of payments during 2020.

• Cash paid for remediation obligations was $2.4 million lower during 2022 compared to 2021.

In addition, cash paid for interest was $311.5 million and $249.4 million, excluding net swap settlements for our fixed to floating interest rate swaps, for 2022 and 2021, respectively.

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

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

Cash Flows Used in Investing Activities

2 unchanged sentences

• Proceeds from sales of property and equipment during 2022 were $32.8 million as compared to $19.5 million for 2021.

• During 2021 and 2020, we used $1,221.7 million and $769.5 million, respectively, for acquisitions and investments, net of cash acquired.

• During 2022 and 2021, we used $3,038.5 million and $1,221.7 million, respectively, for acquisitions and investments, net of cash acquired, including the cash used for the acquisition of US Ecology.

During 2022 and 2021, we received $50.6 million and $46.3 million from business divestitures, respectively.

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.

On February 8, 2022, we entered into a definitive agreement to acquire all outstanding shares of US Ecology, Inc.

(US Ecology) in a transaction valued at approximately $2.2 billion, including debt.

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

We intend to finance the transaction using existing and new sources of debt.

Cash Flows Used in Financing Activities

The most significant items affecting the comparison of our cash flows used in financing activities for 2022 and 2021 are summarized below:

• During 2021, we issued $700.0 million of senior notes for cash proceeds, net of discounts and fees, of $692.3 million.

• We issued no senior notes during 2022.

During 2021, we issued $700.0 million of senior notes for cash proceeds, net of discounts and fees, of $692.3 million.

Net payments of notes payable and long-term debt were $150.2 million during 2021, compared to net payments of $2,595.9 in 2020.

Net proceeds of notes payable and long-term debt were $2,164.6 million during 2022, compared to net payments of $150.2 million in 2021.

For a more detailed discussion, see the Financial Condition section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

• During 2020, we paid $99.1 million in cash premiums on the redemption of senior notes.

• During 2022, we repurchased 1.6 million shares of our stock for $203.5 million.

2 unchanged sentences

Dividends paid were $592.9 million and $552.6 million in 2022 and 2021, respectively.

• During 2021, we paid $32.0 million related to the purchase of the remaining equity interest in a previously held non-controlling interest.

• During 2022 and 2021, cash paid for purchase price holdback releases and contingent purchase price related to acquisitions was $9.6 million and $21.3 million, respectively.

1 unchanged sentence

Debt Obligations

As of December 31, 2021, we had $8.2 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations.

As of December 31, 2022 , we had $456.0 million of principal debt maturing within the next 12 months, which includes certain variable rate tax-exempt financing, debentures and finance lease obligations.

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

1 unchanged sentence

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 December 31, 2021.

An extended period of economic disruption associated with the COVID-19 pandemic could further disrupt the global supply chain, negatively impact demand for our services, and disrupt financial markets.

These effects could materially and adversely affect our business and financial condition, including our access to sources of liquidity.

We will continue to monitor the evolving COVID-19 pandemic along with the effect on our business and access to capital markets.

Refer to Part I, Item 1A - Risk Factors of this Annual Report on Form 10-K for a discussion of certain risk factors related to this pandemic.

For further discussion of the components of our overall debt, see Note 9, Debt , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

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

In the event of a failed re-borrowing under our commercial paper program, we currently have availability under our Credit Facility to fund the amounts borrowed under the commercial paper program until they are re-borrowed successfully.

Accordingly, we have classified these tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of December 31, 2022 .

For further discussion of the components of our overall debt, see Note 9, Debt , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Credit Facilities

The Credit Facility

In August 2021, we entered into a $3.0 billion uns ecured revolving credit facility (the Credit Facility), which replaces the prior $2.25 billion unsecured revolving credit facility which would have matured in June 2023 (the Replaced Credit Facility).

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.

1 unchanged sentence

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 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.

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 United States 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 and Replaced Credit Facility totaled $2,633.8 million and $1,671.8 million as of December 31, 2021 and 2020, respectively.

Availability under our Credit Facility totaled $1,402.4 million and $2,633.8 million as of December 31, 2022 and 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.

As of December 31, 2021 and 2020, we had $24.3 million and $186.0 million of borrowings outstanding under our Credit Facility and Replaced Credit Facility, respectively.

We had $341.9 million an d $376.5 million of letters of credit outstanding under our Credit Facility and Replaced Credit Facility as of December 31, 2021 and 2020, respectively.

We had $250.0 million and $24.3 million in borrowings outstanding under our Credit Facility as of December 31, 2022 and 2021, respectively.

We had $347.6 million and $341.9 million of letters of credit outstanding under our Credit Facility as of December 31, 2022 and 2021, respectively.

Uncommitted Credit Facility

In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaces 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, rather than a LIBOR or Cost of Funds rate used in the Replaced Uncommitted Credit Facility (as defined in the Replaced Uncommitted Credit Facility agreement).

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 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.

1 unchanged sentence

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

As of December 31, 2021 and 2020, we had no borrowings outstanding under our Replaced Uncommitted Credit Facility.

As of December 31, 2022 and 2021, we had no borrowings outstanding under our Uncommitted Credit Facility.

Financial and Other Covenants

2 unchanged sentences

Compliance with covenants also is a condition for any incremental borrowings under the Credit Facility, and failure to meet these covenants would enable the lenders to require repayment of any outstanding loans (which would adversely affect our liquidity).

Additionally, if we are not in compliance with these covenants, we could not use the availability under our Credit Facility to fund borrowings we currently make under our commercial paper program, if there is a failed reborrowing under that program.

The Credit Facility provides that our total debt to EBITDA ratio may not exceed 3.75 to 1.00 as of the last day of any fiscal quarter.

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 term of the Credit Facility agreement.

As of December 31, 2021, our total debt to

EBITDA ratio was 2.89 compared to the 3.75 maximum allowed by the covenants.

As of December 31, 2021, we were in compliance with the covenants under the Credit Facility, and we expect to be in compliance throughout 2022.

EBITDA, which is a non-GAAP measure, is calculated as defined in our Credit Facility agreement.

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

During the second quarter of 2022, we exercised the elevated ratio clause in conjunction with our acquisition of US Ecology;

as a result, we are subject to a 4.25 to 1.00 total debt to EBITDA ratio through March 31, 2023.

We were in compliance with this debt covenant for each quarter of 2022.

As of December 31, 2022, our total debt to EBITDA ratio was 3.12 compared to the 4.25 maximum allowed.

As of December 31, 2022, we were in compliance with all other covenants unde r our Credit Facility .

EBITDA, which is a non-U.S.

GAAP measure, is calculated as defined in our Credit Facility agreement.

In this context, EBITDA is used solely to provide information regarding the extent to which we are in compliance with debt covenants and is not comparable to EBITDA used by other companies or used by us for other purposes.

Failure to comply with the financial and other covenants under the Credit Facility, as well as the occurrence of certain material adverse events, would constitute defaults and wou ld allow the lenders under the Credit Facility to accelerate the maturity of all indebtedness under the Credit Facility agreement.

Failure to comply with the financial and other covenants under the Credit Facility, as well as the occurrence of certain material adverse events, would constitute defaults and would allow the lenders under the Credit Facility to accelerate the maturity of all indebtedness under the Credit Facility.

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.

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

We would likely have to seek an amendment under the Credit Facility agreement for relief from the financial covenant or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary.

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

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.

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

We would likely have to seek an amendment under the Credit Facility for relief from the financial covenant or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary.

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 (Term Loan Facility), which will mature on April 29, 2025.

The Term Loan Facility bears interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings.

The current weighted average interest rate for the year ended December 31, 2022 is 4.629%.

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

We had $1.0 billion in borrowings outstanding under the Term Loan Facility as of December 31, 2022.

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 the Commercial Paper Cap.

In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund amounts currently borrowed under the commercial paper program until they are re-borrowed successfully.

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

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.

Our senior notes are general senior unsecured obligations.

As of December 31, 2022, we had $8,107.8 million of unsecured senior notes and debentures, with maturities ranging from 2023 to 2050.

Our senior notes and debentures are general unsecured obligations.

Interest is payable semi-annually.

3 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).

We also acquired and novated a floating-to-fixed interest rate swap designated as a cash flow hedge in connection with our acquisition of US Ecology.

Additionally, we amended certain interest rate lock agreements, extending the mandatory maturity date and dedesignated them as cash flow hedges (the Extended Interest Rate Locks).

In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks.

For a description of our derivative contracts and hedge accounting, see Note 9, Debt , to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Tax-Exempt Financings

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

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

During the year ended December 31, 2021 and 2020, we issued $205.0 million and $60.0 million, respectively, of new tax-exempt financings.

As of December 31, 2022 and 2021, we had $1,182.0 million and $1,181.5 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2023 to 2051.

There were no tax-exempt financings issued during 2022.

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 $17.2 million has been incurred and reimbursed to us.

As of December 31, 2021, we had $139.0 million of restricted cash and marketable securities, of which $12.4 million 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 $30.0 million and $17.2 million was incurred and reimbursed to us as of December 31, 2022 and 2021, respectively .

As of December 31, 2022 and 2021 , we had $127.6 million and $139.0 million , respectively, of restricted cash and marketable securities.

As of December 31, 2021, $12.4 million of the restricted cash and marketable securities balance represented proceeds from the issuance of the tax-exempt bonds.

Finance Leases

We had finance lease liabilities of $247.5 million and $249.4 million as of December 31, 2022 and 2021, respectively, with maturities ranging from 2023 to 2063 and 2022 to 2063, respectively.

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 December 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.

Off-Balance Sheet Arrangements

We have no off-balance sheet debt or similar obligations, other than short-term operating leases and financial assurances, which are not classified as debt.

We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported financial position or results of operations.

We have not guaranteed any third-party debt.

Seasonality and Severe Weather

Our operations can be adversely affected by periods of inclement or severe weather, which could increase the volume of waste collected under our existing contracts (without corresponding compensation), delay the collection and disposal of waste, reduce the volume of waste delivered to our disposal sites, or delay the construction or expansion of our landfills and other facilities.

Our operations also can be favorably affected by severe weather, which could increase the volume of waste in situations where we are able to charge for our additional services.

Contingencies

For a description of our commitments and contingencies, see Note 8, Landfill and Environmental Costs , Note 11, Income Taxes and Note 19, Commitments and Contingencies , to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Financial Assurance

79 unchanged sentences

Amortization rates may be sensitive to the original cost basis of the landfill, including acquisition costs, which in turn is determined by geographic location and market values.

We secure significant landfill assets through business acquisitions and

value them at the time of acquisition based on fair value.

We secure significant landfill assets through business acquisitions and value them at the time of acquisition based on fair value.

Amortization rates are also influenced by site-specific engineering and cost factors.

14 unchanged sentences

Landfill retirement obligations are capitalized as the related liabilities are recognized and amortized using the units-of-consumption method over the airspace consumed within the capping event or the airspace consumed within the entire landfill, depending on the nature of the obligation.

All obligations are initially measured at estimated fair value.

All obligations are initially measured at

estimated fair value.

Fair value is calculated on a present value basis using an inflation rate and our credit-adjusted, risk-free rate in effect at the time the liabilities were incurred.

11 unchanged sentences

The estimates include inflation, the specific timing of future cash outflows and the anticipated waste flow into the capping events.

Our cost estimates are inflated to the period of performance using an estimate of inflation, which is updated annually and is based upon the ten year average consumer price index (1.7% in both 2021 and 2020).

The present value of the remaining capping costs for specific capping events and the remaining closure and post-closure costs for each landfill are recorded as incurred on a per-ton basis.

These liabilities are incurred as disposal capacity is consumed at the landfill.

Capping, closure and post-closure liabilities are recorded in layers and discounted using our credit-adjusted risk-free rate in effect at the time the obligation is incurred (3.4% in both 2021 and 2020).

Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that was used to calculate each layer of the recorded liabilities.

3 unchanged sentences

The retirement obligation assets are amortized to expense on a per-ton basis as disposal capacity is consumed.

The per-ton rate is calculated by dividing the sum of each of the recorded retirement obligation asset’s net book

value and expected future additions to the retirement obligation asset by the remaining disposal capacity.

The per-ton rate is calculated by dividing the sum of each of the recorded retirement obligation asset’s net book value and expected future additions to the retirement obligation asset by the remaining disposal capacity.

A per-ton rate is determined for each separate capping event based on the disposal capacity relating to that event.

10 unchanged sentences

Revisions in estimates of our costs or timing of expenditures are recognized immediately as increases or decreases to the capping, closure and post-closure liabilities and the corresponding retirement obligation assets.

Changes in the assets result in changes to the amortization rates which are applied prospectively, except for fully incurred capping events and closed landfills, where the changes are recorded immediately in results of operations since the associated disposal capacity has already been consumed.

Changes in the assets result in changes to the amortization rates which are applied prospectively, except for fully incurred capping events and closed

landfills, where the changes are recorded immediately in results of operations since the associated disposal capacity has already been consumed.

See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on changes to our landfill depletion and amortization.

18 unchanged sentences

These estimates are subject to uncertainty attributable to:

• We may be unsuccessful in obtaining permits for probable expansion disposal capacity because of the failure to obtain the final local, state or federal permits or due to other unknown reasons.

If we are unsuccessful in obtaining permits for

probable expansion disposal capacity, or the disposal capacity for which we obtain approvals is less than what was estimated, both our estimated total costs and disposal capacity will be reduced, which generally increases the rates we charge for landfill amortization and capping, closure and post-closure accruals.

• We may be unsuccessful in obtaining permits for probable expansion disposal capacity because of the failure to obtain the final local, state, provincial, or federal permits or due to other unknown reasons.

If we are unsuccessful in obtaining permits for probable expansion disposal capacity, or the disposal capacity for which we obtain approvals is less than what was estimated, both our estimated total costs and disposal capacity will be reduced, which generally increases the rates we charge for landfill amortization and capping, closure and post-closure accruals.

An unexpected decrease in disposal capacity could also cause an asset impairment.

13 unchanged sentences

We perform a comprehensive review of our environmental obligations annually and also review changes in facts and circumstances associated with these obligations at least quarterly.

See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on our remediation adjustments.

See our Results of Operations section in this Management's Discussion and

Analysis of Financial Condition and Results of Operations for discussion on our remediation adjustments.

We have not reduced the liabilities we have recorded for recoveries from other potentially responsible parties or insurance companies.

As of December 31, 2021 and 2020, we had $454.9 million and $462.8 million of environmental liabilities.

As of December 31, 2022 and 2021, we had $487.5 million and $454.9 million of environmental liabilities, respectively.

Changes in these estimates may be sensitive to changes in cost estimates, timing of estimated costs and settlements, inflation, our credit-adjusted, risk-free interest rate and applicable regulations.

19 unchanged sentences

New Accounting Standards

For a description of new accounting standards that may affect us, see Note 2, Summary of Significant Accounting Policies , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

For a description of new accounting standards that may affect us, see Note 2, Summary of Significant Accounting Policies , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

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-K

Item 7. Management’s Discussion and Analysis