What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-11 · 439 added, 391 removed, 1518 unchanged (35% of the section changed)

70 unchanged sentences

as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 22, 2023, expressed an unqualified opinion thereon.

As indicated in the accompanying Report of Management on Republic Services, Inc.’s Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Santek Waste Services, LLC and ACV Enviro Corporation, which are included in the 2021 consolidated financial statements of the Company and constituted less than 2% of revenues for the year ended December 31, 2021.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Santek Waste Services, LLC and ACV Enviro Corporation.

As indicated in the accompanying Report of Management on Republic Services, Inc.’s Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of US Ecology, which are included in the 2022 consolidated financial statements of the Company and constituted approximately 6% of revenues for the year ended December 31, 2022.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of US Ecology.

Basis for Opinion

76 unchanged sentences

Selling, general and administrative 1,454.3 1,195.8 1,053.0

Withdrawal costs - multiemployer pension funds — 34.5 —

Loss (gain) on business divestitures and impairments, net 0.5 77.7 ( 14.7 )

Adjustment to withdrawal liability for multiemployer pension funds

( 1.6 ) — 34.5

(Gain) loss on business divestitures and impairments, net ( 6.3 ) 0.5 77.7

Restructuring charges 27.0 16.6 20.0

9 unchanged sentences

Net income attributable to non-controlling interests in consolidated subsidiary

— ( 1.9 ) ( 2.4 )

Net income attributable to Republic Services, Inc.

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Realized loss reclassified into earnings 1.1 4.6 5.8

Unrealized loss — ( 22.5 ) ( 30.2 )

Unrealized gain (loss) 8.4 — ( 22.5 )

Pension activity:

Change in funded status of pension plan obligations ( 2.0 ) ( 6.8 ) 2.1

Other comprehensive loss, net of tax ( 2.2 ) ( 14.6 ) ( 31.7 )

Foreign currency activity:

Loss on foreign currency translation ( 5.0 ) — —

Other comprehensive income (loss), net of tax 2.5 ( 2.2 ) ( 14.6 )

Comprehensive income 1,490.1 1,290.1 955.0

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Balance as of December 31, 2019

Adoption of accounting standard, net of tax — — — ( 3.1 ) — — 3.1 — $ —

353.3 $ 3.5 $ 4,994.8 $ 5,317.3 ( 34.5 ) $ ( 2,199.6 ) $ 2.2 $ 2.7 $ 8,120.9

Net income — — — 967.2 — — — 2.4 969.6

8 unchanged sentences

— — — — ( 1.2 ) ( 98.8 ) — — ( 98.8 )

Shares returned to unissued status

( 35.8 ) ( 0.3 ) ( 2,315.7 ) — 35.8 2,316.0 — — —

Distributions paid

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Balance as of December 31, 2020

318.8 3.2 2,741.4 5,751.8 — ( 0.1 ) ( 12.4 ) 4.9 8,488.8

Net income — — — 1,290.4 — — — 1.9 1,292.3

8 unchanged sentences

— — — — ( 2.2 ) ( 252.2 ) — — ( 252.2 )

Shares returned to unissued status

( 35.8 ) ( 0.3 ) ( 2,315.7 ) — 35.8 2,316.0 — — —

Purchase of minority interest — — ( 22.7 ) — — — — ( 4.8 ) ( 27.5 )

Distributions paid

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Balance as of December 31, 2021

319.6 3.2 2,789.5 6,475.6 ( 2.4 ) ( 274.8 ) ( 14.6 ) 0.8 8,979.7

Net income — — — 1,487.6 — — — — 1,487.6

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— — — — — — ( 2.0 ) — ( 2.0 )

Gain (loss) on foreign currency translation — — — — — — ( 5.0 ) — ( 5.0 )

Cash dividends declared — — — ( 603.4 ) — — — — ( 603.4 )

3 unchanged sentences

— — — — ( 1.6 ) ( 203.5 ) — — ( 203.5 )

Purchase of minority interest — — ( 22.7 ) — — — — ( 4.8 ) ( 27.5 )

Distributions paid

1 unchanged sentence

Balance as of December 31, 2022

320.3 $ 3.2 $ 2,843.2 $ 7,356.3 ( 4.2 ) $ ( 504.6 ) $ ( 12.1 ) $ 0.8 $ 9,686.8

The accompanying notes are an integral part of these financial statements.

10 unchanged sentences

Stock-based compensation 38.8 57.0 37.3

Deferred tax (benefit) provision ( 15.5 ) 60.8 166.1

Deferred tax provision (benefit) 181.1 ( 15.5 ) 60.8

Provision for doubtful accounts, net of adjustments 41.5 19.9 27.8

Loss on extinguishment of debt — — 101.9

Loss (gain) on disposition of assets, asset impairments, and other, net 0.4 75.5 ( 13.8 )

(Gain) loss on disposition of assets and asset impairments, net ( 9.2 ) 0.4 75.5

Environmental adjustments 2.9 0.5 5.1

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Cash used in investing activities ( 4,423.0 ) ( 2,466.1 ) ( 1,922.8 )

Cash used in financing activities:

Proceeds from notes payable and long-term debt, net of fees 5,154.3 2,625.5 4,746.5

Cash provided by (used in) financing activities:

Proceeds from credit facilities and notes payable, net of fees 16,446.3 5,154.3 2,625.5

Proceeds from issuance of senior notes, net of discount and fees — 692.3 2,716.1

Payments of notes payable and long-term debt and senior notes ( 5,304.5 ) ( 5,221.4 ) ( 5,327.9 )

Payments of credit facilities and notes payable ( 14,281.7 ) ( 5,304.5 ) ( 5,221.4 )

Premiums paid on extinguishment of debt — — ( 99.1 )

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Contingent consideration payments ( 9.6 ) ( 21.3 ) ( 15.5 )

Cash used in financing activities ( 329.2 ) ( 612.0 ) ( 589.0 )

(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents ( 8.6 ) ( 63.2 ) 44.1

Cash provided by (used in) financing activities 1,344.2 ( 329.2 ) ( 612.0 )

Effect of foreign exchange rate changes on cash ( 2.5 ) — —

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 108.7 ( 8.6 ) ( 63.2 )

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year 105.6 114.2 177.4

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Republic Services, Inc., a Delaware corporation, and its consolidated subsidiaries (also referred to collectively as Republic, the Company, we, us, or our), is one of the largest providers of environmental services in the United States, as measured by revenue.

We manage and evaluate our operations through three operating segments, Group 1, Group 2, and Environmental Solutions.

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 in geographic areas located primarily across the United States and Canada.

These groups represent 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.

The consolidated financial statements include the accounts of Republic Services, Inc.

and its wholly owned and majority owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (U.S.

and its wholly owned and majority owned subsidiaries in accordance with U.S.

We account for investments in entities in which we do not have a controlling financial interest under the equity method of accounting or, for investments that do not meet the criteria to be accounted for under the equity method, we reflect these investments at their fair value when it is readily determinable.

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Our actual results may differ significantly from our estimates.

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, variants 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 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 throughout 2021.

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

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

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

In 2020 and 2021, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic with two 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.

Cash and Cash Equivalents

We consider liquid investments with a maturity at the date of acquisition of three months or less to be cash equivalents.

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We may have net book credit balances in our primary disbursement accounts at the end of a reporting period.

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Concentrations of credit risk with respect to trade accounts receivable are limited due to the wide variety of customers and markets in which we provide services, as well as the dispersion of our operations across many geographic areas.

We provide services to small-container, large-container, municipal and residential, and environmental solutions customers in the United States.

We provide services to small-container, large-container, municipal and residential and environmental solutions customers primarily in the United States and Canada.

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

We establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers, age of receivables outstanding, historical trends, economic conditions and other information.

We establish an allowance

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for doubtful accounts based on various factors including the credit risk of specific customers, age of receivables outstanding, historical trends, economic conditions and other information.

Accounts Receivable, Net

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As of December 31, 2022, we had $ 127.6 million of restricted cash and marketable securities of which $ 88.5 million supports our insurance programs for workers' compensation, commercial general liability and commercial auto liability.

Additionally, we obtain funds through the issuance of tax-exempt bonds for the purpose of financing qualifying expenditures at our landfills, transfer stations, collection and recycling processing centers.

Additionally, we obtain funds through the issuance of tax-exempt bonds for the purpose of financing qualifying expenditures at our landfills, transfer stations, collection and recycling centers.

The funds are deposited directly into trust accounts by the bonding authorities at the time of issuance.

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Expenditures for major additions and improvements to facilities are capitalized, while maintenance and repairs are charged to expense as incurred.

When property is retired or otherwise disposed, the related

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cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of income.

When property is retired or otherwise disposed, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of income.

We revise the estimated useful lives of property and equipment acquired through business acquisitions to conform with our policies.

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Landfill development costs also are included in property and equipment.

Landfill development costs include direct costs incurred to obtain landfill permits and direct costs incurred to acquire, construct and develop sites, as well as final capping, closure and post-closure assets.

Landfill development costs include direct costs incurred to obtain landfill permits and direct costs incurred to acquire, construct and develop sites, as well as final capping,

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closure and post-closure assets.

These costs are amortized or depleted based on consumed airspace.

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Our interest capitalization rate is based on our weighted average cost of indebtedness.

Interest capitalized was $ 5.0 million, $ 6.2 million and $ 7.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Interest capitalized was $ 5.0 million for each of the years ended December 31, 2022 and 2021, and $ 6.2 million for the year ended December 31, 2020.

Fair Value of Financial Instruments

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Investments Other Than Derivatives

Investments other than derivatives primarily include money market funds, common stock, mutual funds, real estate investment trusts, U.S.

government and agency securities, municipal and corporate bonds, and foreign government bonds.

Investments other than derivatives primarily include money market funds, common stock, mutual funds, real estate investment trusts, United States government and agency securities, municipal and corporate bonds and foreign government bonds.

In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value.

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We use derivative financial instruments to manage our risk associated with changing interest rates by creating offsetting market exposures.

We use interest rate swap agreements designated as fair value hedges to manage risk associated with fluctuations in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

interest rates.

We use interest rate swap agreements designated as fair value hedges to manage risk associated with fluctuations in interest rates.

In prior periods, we entered into multiple agreements designated as cash flow hedges to lock interest rates in anticipation of future debt issuance.

All derivatives are measured at fair value and recognized in the balance sheet as assets or liabilities, as appropriate.

In connection with our acquisition of US Ecology, in the second quarter of 2022, we acquired and novated a floating-to-fixed interest rate swap agreement that is designated as a cash flow hedge.

All derivatives are measured at fair value using standard valuation models with assumptions about prices and other relevant information based on those observed in the underlying markets (Level 2 in the fair value hierarchy).

These instruments are recognized in the balance sheet as assets or liabilities, as appropriate.

The estimated fair values of derivatives used to hedge risks fluctuate over time and should be viewed in relation to the underlying hedged transactions.

For derivative instruments designated as fair value hedges, to the extent they are effective, they are included as an adjustment to long-term debt in our consolidated balance sheets.

1 unchanged sentence

For derivatives designated as cash flow hedges, changes in fair value of the effective portions of derivative instruments are reported in stockholders’ equity as components of other comprehensive income until the forecasted transaction occurs or is not probable of occurring.

When the forecasted transaction occurs or is not probable of occurring, the realized net gain or loss is then recognized in the consolidated statements of income.

When the forecasted transaction occurs or is not probable of occurring, the realized net

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

gain or loss is then recognized in the consolidated statements of income.

Changes in fair value of the ineffective portions are recognized currently in earnings .

The fair values of our derivative instruments are determined using standard valuation models with assumptions about prices and other relevant information based on those observed in the underlying markets (Level 2 in the fair value hierarchy).

The estimated fair values of derivatives used to hedge risks fluctuate over time and should be viewed in relation to the underlying hedged transactions.

Landfill and Environmental Costs

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In addition, any amounts capitalized for the probable expansion airspace are charged to expense in the period in which it is determined that the criteria are no longer met.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Capitalized Landfill Costs

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Costs related to acquiring land, excluding the estimated residual value of unpermitted, non-buffer land, and costs related to permitting and cell construction are depleted as airspace is consumed using the units-of-consumption method.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Capitalized landfill costs also may include an allocation of purchase price paid for landfills.

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We also perform some of our final capping, closure and post-closure activities using internal resources.

Where we expect internal resources to be used to fulfill an

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

asset retirement obligation, we add a profit margin to the estimated cost of such services to better reflect their fair value.

Where we expect internal resources to be used to fulfill an asset retirement obligation, we add a profit margin to the estimated cost of such services to better reflect their fair value.

If we perform these services internally, the added profit margin is recognized as a component of operating income in the period the obligation is settled.

1 unchanged sentence

These costs are inflated each year to reflect a normal escalation of prices up to the year they are expected to be paid.

We used a 1.7 % inflation rate for the years ended December 31, 2021, 2020, and 2019, which is based on the ten -year historical moving average increase of the U.S.

Consumer Price Index, and is the rate used by the largest environmental services industry participants.

We used a 1.9 % inflation rate for the year ended December 31, 2022 and a 1.7 % inflation rate for both the years ended December 31, 2021 and 2020, which is based on the ten-year historical moving average increase of the United States Consumer Price Index.

These estimated costs are then discounted to their present values using a credit-adjusted, risk-free interest rate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in assets retirement obligations

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Businesses are included in the consolidated financial statements from the date of acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We recognize, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition-date fair values.

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however, this period will generally not exceed one year from the acquisition date.

Any material adjustments recognized during the measurement period will be reflected retrospectively in the consolidated financial statements of the subsequent period.

Any material adjustments recognized during the measurement

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period will be reflected retrospectively in the consolidated financial statements of the subsequent period.

We recognize third-party transaction related costs as expense currently in the period in which they are incurred.

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Our reporting units are our three field groups:

Group 1, Group 2, and Environmental Solutions.

Group 1, Group 2 and Group 3 (formerly Environmental Solutions).

We may use both qualitative and quantitative approaches when testing goodwill for impairment.

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No impairment losses were recorded for goodwill during the year ended December 31, 2022.

As of October 1, 2020, we tested our Group 1 and Group 2 reporting units quantitatively and determined that the indicated fair value of our Group 1 and Group 2 reporting units exceeded their carrying value by approximately 150 % on average and, therefore, we noted no indicators of impairment at our reporting units.

There was no goodwill assigned to the Environmental Solutions reporting unit in 2020.

Significant estimates used in our 2020 fair value calculation using discounted future cash flows included:

(1) estimates of future revenue and expense growth by reporting unit, which we estimated to be approximately 3 % annually;

(2) future estimated effective tax rates, which we estimated to be 27 %;

(3) future estimated capital expenditures and future required investments in working capital;

(4) estimated discount rates, which we estimated to range between 6 % and 8 %;

and (5) the future terminal value of the reporting unit, which was based on its ability to exist into perpetuity.

Significant estimates used in the fair value calculation utilizing market value multiples included:

(a) estimated future growth potential of the reporting unit;

(b) estimated multiples of revenue or earnings a willing buyer is likely to pay;

and (c) the estimated control premium a willing buyer is likely to pay.

Other intangible assets include values assigned to customer relationships, non-compete agreements and trade names and are amortized generally on a straight-line basis over periods ranging from 1 to 15 years.

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• A significant adverse change in legal factors or in the business climate that could affect the value of an asset or asset group, including an adverse action or assessment by a regulator;

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• An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;

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If the estimated undiscounted cash flows are not sufficient to recover the carrying value of the asset or asset group, we measure an impairment loss as the amount by which the carrying amount of the asset exceeds its fair value.

The loss is recorded in the consolidated statements of income in the period in which such impairment is identified.

The loss is recorded in the consolidated statements of income in the period in which such

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

impairment is identified.

Estimating future cash flows requires significant judgment, and our projections of future cash flows and remaining useful lives may vary materially from actual results.

In 2020, we recognized a $ 42.6 million charge as a loss on business divestitures and impairments, net in our consolidated income statement resulting from management’s decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

As the carrying value of the assets associated with these operations was no longer recoverable, we impaired the entire net book value of certain assets, comprised mainly of equipment, vehicles, and containers.

On at least a quarterly basis, we will continue to monitor the effect of the evolving COVID-19 pandemic on our business and review our estimates for recoverability of assets.

Insurance Reserves

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These fair values may be different from the values we would have otherwise recorded, had the contingent liability not been assumed as part of an acquisition of a business.

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Accumulated Other Comprehensive Income

Accumulated other comprehensive income is a component of stockholders’ equity and includes the effective portion of the net changes in fair value of our cash flow hedges, amortization of our interest rate locks, and certain adjustments to liabilities associated with our employee defined benefit pension plan liabilities, net of tax.

Accumulated other comprehensive income is a component of stockholders’ equity and includes the effective portion of the net changes in fair value of our cash flow hedges, amortization of our interest rate locks, certain adjustments to liabilities associated with our employee defined benefit pension plan liabilities, net of tax, and foreign currency translation adjustments.

Revenue Recognition

We generally provide services under contracts with municipalities or individual customers.

Municipal and small-container contracts are generally long-term and often have renewal options.

Municipal and small-container

contracts are generally long-term and often have renewal options.

Environmental solutions revenue may be billed in advance of the service being performed, such as the treatment or disposal of the waste.

Advance billings are recorded as deferred revenue, and revenue is recognized over the period services are provided.

We recognize revenue when control is transferred to the customer, generally at the time we provide a service.

Revenue is measured as the amount of consideration we expect to receive in exchange for providing a service.

We make certain payments to our customers, including payments to our municipal customers or commodity rebates to customers in our recycling business, which reduce the amount of revenue we recognize.

measured as the amount of consideration we expect to receive in exchange for providing a service.

We make payments

to certain of our customers, including payments to our municipal customers or commodity rebates to customers in our recycling business, which reduce the amount of revenue we recognize.

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

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We record net deferred tax assets to the extent we believe these assets will more likely than not be realized.

In making these determinations, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, tax planning strategies, projected future taxable income and recent financial operating results.

In making these determinations, we consider all available positive and negative evidence, including scheduled reversals of deferred tax

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liabilities, tax planning strategies, projected future taxable income and recent financial operating results.

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

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In developing our expected rate of return assumption, we evaluate long-term expected and historical actual returns on the Plan assets, giving consideration to the asset mix and the anticipated duration of our Plan obligations.

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average rate of compensation increase reflects our expectations of average pay increases over the period benefits are earned.

The average rate of compensation increase reflects our expectations of average pay increases over the period benefits are earned.

Our assumptions are reviewed annually and adjusted as deemed necessary.

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

The most significant lease obligations are for real property and equipment specific to our industry, including property operated as a landfill or transfer station and operating equipment.

The most significant lease obligations are for real property and equipment specific to our industry, including property operated as a landfill or transfer

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station and operating equipment.

Our leases have varying terms.

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We record the present value of the related lease payments as a debt obligation.

Our finance lease liabilities relate

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primarily to real property, including certain long-term landfill operating agreements that require minimum lease payments with offsetting finance lease assets recorded as part of the landfill development costs.

Our finance lease liabilities relate primarily to real property, including certain long-term landfill operating agreements that require minimum lease payments with offsetting finance lease assets recorded as part of the landfill development costs.

Related Party Transactions

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Accounting Standards Adopted

Effective January 1, 2021, we adopted the following accounting standard updates (ASUs) as issued by the Financial Accounting Standards Board (FASB):

ASU Effective Date

ASU 2018-14 Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans

January 1, 2021

ASU 2019-12 Simplifying the Accounting for Income Taxes

January 1, 2021

Changes to the Disclosure Requirements for Defined Benefit Plans

Effective January 1, 2021, we adopted ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14) on a retrospective basis.

The standard removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant.

Our adoption of ASU 2018-14 did not have a material impact on our consolidated financial statements.

Simplifying the Accounting for Income Taxes

Effective January 1, 2021, we adopted ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (ASU 2019-12).

ASU 2019-12 attempts to simplify aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

Our adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Accounting Standards Issued but not yet Adopted as of December 31, 2021

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04), as extended in ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

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

During the year ended December 31, 2022, we novated a certain hedging relationship related to one of our interest rate swap agreements by changing the reference rate from the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR).

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

For further discussion of the amendment and relevant hedging relationship, refer to Note 9, Debt, in Part II, Item 8 of this Annual Report on Form 10-K.

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

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Accounting Standards Updates Issued but not yet Adopted as of December 31, 2022

Business Combinations

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

The amendments in this update are effective for fiscal years beginning after December 15, 2022.

We are currently assessing the effect this guidance may have on our consolidated financial statements.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference

Rate Reform on Financial Reporting (ASU 2020-04).

ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

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

ASU 2020-04 is effective for all entities upon adoption during the period from March 12, 2020 through December 31, 2022.

We are currently assessing the effect this guidance may have on our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The amendments in this update were effective for fiscal years beginning after December 15, 2022.

As such, we adopted the standard beginning January 1, 2023.

Our adoption of ASU 2021-08 did not have a material impact on our audited consolidated financial statements.

BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

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Accounts receivable

Landfill airspace 66.0 —

Prepaid expenses 15.7 4.5

Landfill development costs

Property and equipment

Operating right-of-use lease assets

Interest rate swap 29.1 —

Assets held for sale

Other assets 6.6 1.1

Inventory 1.9 1.5

Accounts payable

( 112.4 ) ( 30.1 )

Deferred revenue

( 28.2 ) ( 7.2 )

Environmental remediation liabilities

( 57.5 ) ( 31.6 )

Closure and post-closure liabilities

( 173.3 ) ( 31.8 )

Operating right-of-use lease liabilities

( 57.1 ) ( 10.2 )

Deferred income tax liabilities ( 109.3 ) ( 3.3 )

Other liabilities

( 58.5 ) ( 23.7 )

Fair value of tangible assets acquired and liabilities assumed 917.8 205.0

Excess purchase price to be allocated $ 1,783.6 $ 898.4

Excess purchase price to be allocated as follows:

Excess purchase price allocated as follows:

Other intangible assets

Goodwill 801.8 430.4

$ 132.9 $ 98.2

1,650.7 801.8

Gain on bargain purchase — ( 1.6 )

Total allocated $ 1,783.6 $ 898.4

The purchase price allocations are preliminary and are based on information existing at the acquisition dates.

The purchase price allocations are preliminary and based on information existing at the acquisition dates.

Accordingly, the purchase price allocations are subject to change.

Substantially all of the goodwill and intangible assets recorded for acquisitions in 2021 and 2020 was deductible for tax purposes.

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

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

In May 2021, we acquired all of the membership interests of Santek Waste Services, LLC (Santek).

Santek's vertically integrated recycling and waste services operations are primarily located in the southeastern United States and complement Republic's existing core competencies and expertise in the environmental services industry.

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

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

We expect our valuations to be completed in 2022.

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

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

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

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

We expect our valuations to be completed in 2022.

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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.

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

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

On May 2, 2022, we acquired all outstanding 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.

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

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

For further discussion of the borrowings used to fund the US Ecology acquisition, refer to Note 9, Debt, in Part II, Item 8 of our Annual Report on Form 10-K.

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

The preliminary allocation of purchase price, including the value of certain tangible and intangible assets acquired, such as property, plant and equipment, landfill development costs and customer relationship intangible assets, as well as certain leases and environmental liabilities assumed, is based on the best estimates of management and is subject to revision based on the final valuations.

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

In 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 equity awards at closing as well as severance and change-in-control payments.

In July 2022, we acquired a non-controlling equity interest in a joint venture with a landfill gas-to-energy developer to construct 39 renewable natural gas projects across the United States for approximately $ 88 million.

We also purchased an approximately $ 38 million interest in a landfill gas-to-energy project and subsequently divested of our interest to the joint venture.

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

The investment is accounted for under the equity method of accounting.

In 2022 and 2021, we acquired non-controlling equity interests in certain limited liability companies that qualified for investment tax credits under Section 48 of the Internal Revenue Code.

In exchange for our non-controlling interests, we made capital contributions of approximately $ 175 million and $ 143 million , which were recorded to other long-term assets in our December 31, 2021 and 2020 co nsolidated balance sheets, respectively.

During 2021 and 2020, we reduced the carrying value of these investments by $ 178.0 million and $ 118.2 million, respectively, as a result of tax credits allocated to us, cash distributions, and our share of income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our 2021 and 2020 tax provisions reflect a benefit of approximately $ 126 million and $ 100 million, respectively, due to the tax credits related to these investments.

For further discussion of the income tax benefits, see Note 11, Income Taxes .

In 2021, we purchased the remaining equity interest in a previously held non-controlling interest for $ 32.0 million.

In exchange for our non-controlling interests, we made capital contributions of approximately $ 205 million and $ 175 million, which were recorded to other assets in our December 31, 2022 and 2021 consolidated balance sheets, respectively.

During 2022 and 2021, we reduced the carrying value of these investments by approximately $ 158 million and $ 178 million, respectively, as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our tax provisions reflect benefits of approximately $ 139 million and $ 126 million for the years end December 31, 2022 and 2021, respectively, due to the tax credits related to these investments.

For further discussion of the income tax benefits, refer to Note 11, Income Taxes, in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Restructuring Charges

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

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

During 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.

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

PROPERTY AND EQUIPMENT, NET

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Depreciation, amortization and depletion of property and equipment was $ 1,245.6 million, $ 1,111.7 million and $ 1,015.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

A summary of the activity and balances in goodwill accounts by reporting segment follows:

Balance as of December 31, 2020 Acquisitions Divestitures Adjustments to

Balance as of December 31, 2021

Acquisitions Divestitures Adjustments to

Acquisitions Balance as of December 31, 2022

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Group 2 5,994.2 239.0 ( 3.7 ) 8.8 6,238.3

Corporate entities and other — 282.1 — — 282.1

Group 3 282.1 1,316.5 ( 0.3 ) ( 23.0 ) 1,575.3

Total $ 12,826.0 $ 1,650.7 $ ( 4.0 ) $ ( 21.2 ) $ 14,451.5

Balance as of December 31, 2019 Acquisitions Divestitures Adjustments to

Balance as of December 31, 2020

Acquisitions Divestitures Adjustments to

Acquisitions Balance as of December 31, 2021

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Group 2 5,641.5 357.1 — ( 4.4 ) 5,994.2

Corporate entities and other — — — — —

Group 3 — 282.1 — — 282.1

Total $ 12,046.4 $ 801.8 $ — $ ( 22.2 ) $ 12,826.0

Goodwill by reportable segment as of December 31, 2021 and December 31, 2022 reflects the presentation of Group 3 as a reportable segment for all periods presented.

Prior to the third quarter of 2022, Group 3 was aggregated with Corporate entities and other.

Adjustments to acquisitions during the year ended December 31, 2022 primarily related to changes in our valuation of tangible and intangible assets as well as certain landfill leases and environmental liabilities assumed as a result of obtaining new information regarding the acquisitions that closed in 2021.

Adjustments to acquisitions during the year ended December 31, 2021 primarily related to changes in our valuation of customer relationship intangible assets and fixed assets as a result of obtaining new information regarding certain acquisitions that closed in December 2020.

Adjustments to acquisitions during the year ended December 31, 2020 primarily related to working capital and fixed assets.

Goodwill by reporting segment as of December 31, 2019 reflects the transfer of all Environmental Solutions assets from Group 2 to Corporate entities and other.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other Intangible Assets, Net

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Gross Intangible Assets Accumulated Amortization Other Intangible Assets, Net as of December 31, 2022

Balance as of December 31, 2020 Acquisitions Adjustments and Other

Balance as of December 31, 2021 Balance as of December 31, 2020 Additions

Balance as of December 31, 2021

Acquisitions Adjustments and Other

Balance as of December 31, 2022

Balance as of December 31, 2021

to Expense Adjustments and Other

8 unchanged sentences

Gross Intangible Assets Accumulated Amortization Other Intangible Assets, Net as of December 31, 2021

Balance as of December 31, 2019 Acquisitions Adjustments and Other

Balance as of December 31, 2020 Balance as of December 31, 2019 Additions

Balance as of December 31, 2020

Acquisitions Adjustments and Other

Balance as of December 31, 2021

Balance as of December 31, 2020

to Expense Adjustments and Other

7 unchanged sentences

Total $ 897.0 $ 102.0 $ 17.8 $ 1,016.8 $ ( 723.9 ) $ ( 33.4 ) $ — $ ( 757.3 ) $ 259.5

Based on the amortizable intangible assets recorded in the consolidated balance sheet as of December 31, 2022, amortization expense for each of the next five years is estimated as follows:

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Based on the amortizable intangible assets recorded in the consolidated balance sheet as of December 31, 2021, amortization expense for each of the next five years is estimated as follows:

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of December 31 follows:

Income tax receivable $ 173.8 $ 170.7

Income taxes receivable $ 214.0 $ 173.8

Prepaid expenses 114.3 85.3

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A summary of other assets as of December 31 follows:

Investments $ 281.4 $ 127.6

Operating right-of-use lease assets 275.1 255.3

Derivative and hedging assets 105.8 19.7

Deferred compensation plan 100.6 133.5

Investments 127.6 145.4

Deferred contract costs and sales commissions 80.6 82.3

Reinsurance receivable 84.1 79.5

Deferred contract costs and sales commissions 80.2 80.6

Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements 51.4 43.4

Amounts recoverable for capping, closure and post-closure obligations 20.5 19.4

Other derivative assets 15.0 63.8

Interest rate swaps 4.7 10.0

Deferred financing costs 5.1 4.6

8 unchanged sentences

Insurance reserves, current portion 187.5 193.5

Accrued dividends 145.9 135.5

Accrued fees and taxes 168.5 143.7

Accrued dividends 156.4 145.9

Operating right-of-use lease liabilities, current portion 57.9 38.2

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Operating right-of-use lease liabilities $ 238.0 $ 239.0

Derivative and hedging liabilities 99.7 50.7

Deferred compensation plan liability 98.6 119.4

1 unchanged sentence

Contingent purchase price and acquisition holdbacks 60.5 64.4

Other derivative liabilities 50.7 103.0

Withdrawal liability - multiemployer pension funds 20.0 24.5

Legal settlement reserves 2.1 3.1

Pension and other post-retirement liabilities 1.2 5.5

Other 57.7 61.8

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Adjustments, if any, to estimates recorded resulting from ultimate claim payments will be reflected in our consolidated statements of income in the periods in which such adjustments are known.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the activity in our insurance reserves for the years ended December 31:

9 unchanged sentences

Long-term portion $ 315.1 $ 303.9 $ 281.8

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

LANDFILL AND ENVIRONMENTAL COSTS

17 unchanged sentences

Accretion expense 89.6 82.7 82.9

Foreign currency translation 0.5 — —

Asset retirement obligation liabilities, end of year 1,786.4 1,507.3 1,346.4

1 unchanged sentence

Long-term portion $ 1,711.2 $ 1,438.9 $ 1,288.9

We review our landfill asset retirement obligations at least annually.

As a result, we increased amortization expense by $ 6.9 million for December 31, 2021 and reduced amortization expense by $ 12.5 million and $ 10.9 million for December 31, 2020 and 2019, respectively, primarily related to changes in estimates and assumptions concerning the anticipated waste flow, cost and timing of future final capping, closure and post-closure activities.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We review annually, in the fourth quarter, and update as necessary, our estimates of asset retirement obligation liabilities.

As a result, we reduced amortization expense by $ 5.8 million, increased amortization expense by $ 6.9 million, and reduced amortization expense by $ 12.5 million for the years ended December 31, 2022, 2021 and 2020, respectively, primarily related to changes in estimates and assumptions concerning the anticipated waste flow, cost and timing of future final capping, closure and post-closure activities.

The expected future payments for final capping, closure and post-closure as of December 31, 2022 follows:

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In these cases, we use the amount within the range that constitutes our best estimate.

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

If no amount within the range appears to be a better estimate than any other, we use the

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

amount that is at the low end of such range.

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

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Bridgeton Landfill.

During the year ended December 31, 2021, we paid $ 18.9 million rel ated to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

During the year ended December 31, 2022,we paid $ 15.9 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

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

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

As of December 31, 2021, the remediation liability recorded for this site is $ 102.7 million, of which approximately $ 16 million is e xpected to be paid during 2022.

We believe the remaining

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

reasonably possible high end of our range would be approximately $ 140 million hig her than the amount recorded as of December 31, 2021.

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.

As of December 31, 2022, the remediation liability recorded for this site was $ 87.2 million, of which approximately $ 15 million is e xpected to be paid during 2023.

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

West Lake Landfill Superfund Site .

Our subsidiary Bridgeton Landfill, LLC is one of several currently designated Potentially Responsible Parties for the West Lake Landfill Superfund site (West Lake) in Missouri.

On September 27, 2018, the U.S.

Environmental Protection Agency (EPA) issued a Record of Decision Amendment for West Lake that includes a total undiscounted cost estimate of $ 229 million over a four to five -year design and construction timeline.

On September 27, 2018, the United States Environmental Protection Agency (EPA) issued a Record of Decision Amendment for West Lake that includes a total undiscounted cost estimate of $ 229 million over a four to five year design and construction timeline.

On March 11, 2019, the EPA issued special notice letters under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) to Bridgeton Landfill, LLC and the other currently designated Potentially Responsible Parties to initiate negotiations to implement the remedy.

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Uncommitted Credit Facility Variable $ — $ — $ — $ — $ — $ —

$ 2.25 billion - June 2023

Variable — — — 186.0 — 186.0

$ 3.0 billion - August 2026

Variable 250.0 — 250.0 24.3 — 24.3

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

Commercial Paper Variable 1,000.0 ( 1.8 ) 998.2 — — —

Senior notes:

14 unchanged sentences

March 2050 3.050 400.0 ( 7.0 ) 393.0 400.0 ( 7.1 ) 392.9

May 2021 9.250 — — — 35.3 ( 0.1 ) 35.2

September 2035 7.400 148.1 ( 30.0 ) 118.1 148.0 ( 31.1 ) 116.9

7 unchanged sentences

Long-term portion $ 11,329.5 $ 9,546.2

Loss on Extinguishment of Debt and Other Related Costs

During the year ended December 31, 2020, we incurred a loss on the early extinguishment of debt and other related costs.

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

T he unamortized proportional share of certain cash flow hedges reclassified to earnings as non-cash interest expense was $ 1.8 million a nd the proportional share of our fair value hedges that were dedesignated and immediately recognized in earnings as a reduction to non-cash interest expense was $ 4.7 million.

REPUBLIC SERVICES, INC.

5 unchanged sentences

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.

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

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

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 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 SOFR rate, 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.

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 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.

We also had $ 998.2 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program as of December 31, 2022.

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

As a result, availability under our Credit Facility was $ 1,402.4 million and $ 2,633.8 million 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 replaced the prior $ 135.0 million uncommitted credit facility (the Replaced Uncommitted Credit Facility).

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

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.

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.

Interest is payable semi-annually.

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

Term Loan Credit Agreement

On April 29, 2022, we entered into a $ 1.0 billion term loan facility (the Term Loan Facility).

The Term Loan Facility will mature on April 29, 2025 and bears interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings.

The weighted average interest rate for the borrowings outstanding as of December 31, 2022 was 4.629 %.

We may prepay, without penalty, all or any part of the borrowings under the Term Loan Facility at any time.

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Commercial Paper Program

In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $ 500.0 million outstanding at any one time (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 a weighted average maturity of approximately 36 days for the year ended December 31, 2022.

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.

Interest Rate Swap and Lock Agreements

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

From time to time, we also have entered into interest rate swap and lock agreements to manage risks 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).

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).

Fair Value Hedges

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

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

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

As of December 31, 2021, these swap agreements have a total notional value of $ 300.0 million and mature in May 2023.

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

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

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

Contemporaneously with our $ 250.0 million redemption of the 4.750 % Notes in 2020, we dedesignated the proportional share of these swap agreements as fair value hedges and recognized $ 4.7 million in earnings immediately as a reduction to non-cash interest expense.

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

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

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

As of December 31, 2021 and 2020, these free standing derivatives are reflected at their fair value o f $ 3.9 million and $ 8.3 million, respectively, a nd are included in other assets in our consolidated balance sheets.

For the years ended December 31, 2021 and 2020, we recognized losses of $ 4.4 million and $ 0.1 million directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free standing derivatives, respectively.

As of December 31, 2021 and 2020, the interest rate swap agreements that were designated as fair value hedges are reflected at their fair value of $ 4.7 million and $ 10.0 million, respectively, and are included in other assets in our consolidated balance sheets.

As of December 31, 2022 and 2021, these free-standing derivatives were reflected at their fair value of a $ 1.0 million liability and a $ 3.9 million asset, respectively, and are included in other accrued liabilities and other assets, respectively, in our consolidated balance sheets.

For the years ended December 31, 2022, 2021 and 2020, we recognized losses of $ 5.0 million, $ 4.4 million and $ 0.1 million, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives, respectively.

As of December 31, 2022 and 2021, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected at their fair value of a $ 1.2 million liability and a $ 4.7 million asset, respectively, and are included in other accrued liabilities and other assets, respectively, in our consolidated balance sheets.

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

We recognized net interest income of $ 2.9 million, $ 7.9 million and $ 5.7 million, respectively, during 2022, 2021 and 2020, related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.

For the years ended December 31, 2021, 2020 and 2019, we recognized a gain of $ 5.2 million, and losses of $ 5.7 million and $ 7.5 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes.

For the years ended December 31, 2021, 2020 and 2019, we recognized offsetting loss of $ 5.2 million, and gains of $ 7.6 million and $ 8.1 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

For the years ended December 31, 2022, 2021 and 2020, we recognized gains of $ 2.7 million and $ 5.2 million and a loss of $ 5.7 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes.

For the years ended December 31, 2022, 2021 and 2020, we recognized offsetting losses of $ 6.0 million and $ 5.2 million and an offsetting gain of $ 7.6 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the years ended December 31, 2022, 2021 and 2020 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

For further detail regarding the effect of our fair value hedging on interest expense, see Note 18, Financial Instruments , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

For further detail regarding the effect of our fair value hedging on interest expense, see Note 18, Financial Instruments , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Cash Flow Hedges

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These transactions were accounted for as cash flow hedges.

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

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

There was no unrealized gain or loss recognized in other comprehensive income for the year ended December 31, 2021.

The total unrealized losses recognized in other comprehensive income for interest rate locks were $ 22.5 million and $ 30.2 million, net of tax, for the years ended December 31, 2020, and 2019, respectively.

As of December 31, 2021 and 2020, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 25.8 million and $ 30.4 million, respectively, net of tax.

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

All of our cash flow hedges settled on or before December 31, 2020.

The fair value of our interest rate locks is determined

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the next 12 months, we expect to amortize approximately $ 4.3 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

For further detail regarding the effect of our cash flow hedging on interest expense, see Note 18, Financial Instruments , of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).

As of December 31, 2022 and 2021, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 21.4 million and $ 25.8 million, respectively , net of tax.

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

D uring 2022, 2021 and 2020, we recognized losses, net of tax of $ 4.4 million, $ 4.6 million and $ 5.8 million, respectively, as a result of this amortization.

Over the next 12 months, we expect to amortize $ 3.9 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

In connection with our acquisition of US Ecology, in the second quarter of 2022, we acquired and novated a floating-to-fixed interest rate swap agreement (the 2022 Interest Rate Swap) with an initial effective date of March 6, 2020 and an initial notional amount of $ 500 million relative to our Term Loan Facility.

The interest rate swap matures in November 2026.

The goal was to reduce overall borrowing costs.

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

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

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

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

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

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

As of December 31, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $ 36.0 million and is included in other assets in our consolidated balance sheets.

During 2022, we recognized an unrealized gain of $ 8.4 million in accumulated other comprehensive income for the 2022 Interest Rate Swap.

As of December 31, 2022, the 2022 Interest Rate Swap was recorded as a component of accumulated other income of $ 5.1 million, net of tax.

The effective portion of the Interest Rate Swap is amortized as an adjustment to interest expense over the life of the instrument using the effective interest method.

During 2022, we recognized a gain, net of tax, of $ 3.3 million as a result of this amortization.

Over the next 12 months, we expect to amortize approximately $ 3 million, net of tax, from accumulated other comprehensive income related to this instrument as an offset to interest expense in the period in which payments are settled.

For further detail regarding the effect of our cash flow hedging on interest expense, see Note 18, Financial Instruments , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Derivative Contracts

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

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

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

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

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

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

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

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

As of December 31, 2021 and 2020, the fair values of the Extended Interest Rate Locks were liabilities of $ 49.9 million and $ 103.0 million, respectively, which were included in other long-term liabilities in our consolidated balance sheet.

As of December 31, 2021, the fair value of the 2019 Offsetting Interest Rate Swap was an asset of $ 11.1 million, which was recorded in other assets in our consolidated balance sheet, and the fair value of the 2020 Offsetting Interest Rate Swap was a liability of $ 0.8 million, which was included in other long-term liabilities in our consolidated balance sheet.

As of December 31, 2020, the fair values of the Offsetting Interest Rate Swaps were assets of $ 55.5 million, which were included in other assets in our consolidated balance sheet.

For the year ended December 31, 2021, we recognized a gain of $ 44.3 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting loss of $ 44.0 million, on the Offsetting Interest Rate Swaps.

For the year ended December 31, 2020, we recognized a loss of $ 55.6 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting gain of $ 52.9 million on the Offsetting Interest Rate Swaps.

As of December 31, 2022 and 2021, the fair values of the Extended Interest Rate Locks were assets of $ 69.8 million and liabilities of $ 49.9 million, respectively, which were included in other assets and other long-term liabilities, respectively, in our consolidated balance sheets.

As of December 31, 2022 and 2021, the fair value of the 2019 Offsetting Interest Rate Swap was a liability of $ 17.8 million and an asset of $ 11.1 million, which were included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets.

As of December 31, 2022 and 2021, the fair values of the 2020 Offsetting Interest Rate Swap were liabilities of $ 81.9 million and $ 0.8 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

For the year ended December 31, 2022, we recognized a gain of $ 109.4 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting loss of $ 107.3 million, on the change in fair value of the Offsetting Interest Rate Swaps.

For the year ended December 31, 2021, we recognized a gain of $ 45.1 million on the change in fair value of the Extended

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Interest Rate Locks, with an offsetting loss of $ 44.8 million, on the change in fair value of the Offsetting Interest Rate Swaps.

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

Tax-Exempt Financings

As of 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.

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.

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

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.

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

The holders of the bonds can put them back to the remarketing agents at the end of each interest period.

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 C redit 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 and 2020.

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

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

Finance Leases

We had finance lease liabilities of $ 249.4 million and $ 206.5 million as of December 31, 2021 and 2020, respectively, with maturities ranging from 2022 to 2063 and 2021 to 2063, respectively.

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.

Interest Paid

Interest paid, excluding net swap settlements for our fair value hedges, was $ 311.5 million, $ 249.4 million and $ 325.1 million for the years ended December 31, 2022, 2021 and 2020 , respectively.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A summary of the lease classification on our consolidated balance sheet as of December 31, 2022 and 2021 follows:

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Total lease liabilities $ 543.4 $ 526.6

A summary of the lease cost reflected in our consolidated statements of income for the years ended December 31 follow:

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A summary of the lease cost reflected in our consolidated statements of income for the years ended December 31, 2022 and 2021 follow:

Operating lease cost

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Present value of lease liabilities $ 295.9 $ 247.5 $ 543.4

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A summary of the weighted-average remaining lease term and weighted-average discount rate as of December 31, 2022 and 2021 follows:

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Finance leases 4.4 % 3.8 %

Supplemental cash flow and other non-cash information for the years ended December 31 follow:

Supplemental cash flow and other non-cash information for the years ended December 31, 2022 and 2021 follow:

Cash paid for amounts included in the measurement of lease liabilities

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Leased assets obtained in exchange for new operating lease liabilities $ 73.9 $ 78.5

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of the provision for income taxes for the years ended December 31 follow:

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 2019 tax provision was reduced by $ 12.3 million from excess tax benefits related to stock compensation, approximately $ 84 million related to the tax credits from our non-controlling interests in limited liability companies established to own solar energy assets, and approximately $ 13 million due to the realization of tax credits and lower state rates due to changes in estimates following the completion of our 2018 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.

Our 2020 tax provision was reduced by approximately $ 12 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, approximately $ 17 million for adjustments to our valuation allowance due to the realizability of certain state loss carryforwards, and approximately $ 8 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.

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 made income tax payments (net of refunds) of approximately $ 185 million, $ 300 million and $ 124 million for 2022, 2021, and 2020, respectively.

Income taxes paid in 2022, 2021 and 2020 reflect benefits from tax credits from our continuing investments in solar energy.

For 2020 and 2019, cash taxes paid reflect benefits from 100 % bonus depreciation on qualified assets.

For 2022 and 2020 cash taxes paid also reflects benefits from 100 % bonus depreciation on qualified assets.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of the net deferred income tax asset and liability as of December 31 follow:

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Substantially all of our valuation allowance is associated with state loss carryforwards.

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

jurisdictions in future periods.

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

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

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the activity in our gross unrecognized tax benefits for the years ended December 31:

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Balance at beginning of year $ 101.5 $ 101.1 $ 100.7

Additions for tax positions of current year 7.1 — —

Additions for tax positions of prior years 2.4 0.5 0.4

Reductions for tax positions of prior years — ( 0.1 ) —

Reductions for tax positions resulting from lapse of statute of limitations — — ( 0.2 )

Settlements — — ( 4.9 )

Balance at end of year $ 111.0 $ 101.5 $ 101.1

During 2019 we resolved tax matters in various states which reduced our gross unrecognized tax benefits by $ 5.1 million.

Included in our gross unrecognized tax benefits as of December 31, 2022, 2021 and 2020 are $ 96.5 million, $ 93.6 million and $ 93.3 million, respectively, of unrecognized tax benefits (net of the federal benefit) that, if recognized, would affect our effective income tax rate in future periods.

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We currently have 12.0 million shares of common stock reserved for future grants under the 2021 Plan.

In February 2007, our Board of Directors approved the 2007 Stock Incentive Plan (the 2007 Plan), and in May 2007 our shareholders approved the 2007 Plan.

In March 2011, our Board of Directors approved the Amended and Restated 2007 Stock Incentive Plan (the Amended and Restated 2007 SIP), and in May 2011 our shareholders approved the Amended and Restated 2007 SIP.

In February 2007, our Board of Directors approved the 2007 Stock Incentive Plan (the 2007 Plan);

in May 2007 our shareholders approved the 2007 Plan.

In March 2011, our Board of Directors approved the Amended and Restated 2007 Stock Incentive Plan (the Amended and Restated 2007 SIP);

in May 2011 our shareholders approved the Amended and Restated 2007 SIP.

In March 2013, our Board of Directors approved the Republic Services, Inc.

Amended and Restated 2007 Stock Incentive Plan (the Republic Amended and Restated 2007 SIP), and in May 2013 our shareholders approved the Republic Amended and Restated 2007 SIP (the 2007 Plan, the Amended and Restated 2007 SIP and the Republic Amended and Restated

Amended and Restated 2007 Stock Incentive Plan (the Republic Amended and Restated 2007 SIP);

in May 2013 our shareholders approved the Republic Amended and Restated 2007 SIP (the 2007 Plan, the Amended and Restated 2007 SIP and the Republic Amended and Restated 2007 SIP are collectively referred to as the Amended and Restated 2007 Stock Incentive Plan).

No further awards will be made under the Amended and Restated 2007 Stock Incentive Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2007 SIP are collectively referred to as the Amended and Restated 2007 Stock Incentive Plan).

No further awards will be made under the Amended and Restated 2007 Stock Incentive Plan.

Restricted Stock Units

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Unissued as of December 31, 2020

1,212.1 $ 69.47

Granted 358.0 $ 91.21

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Unissued as of December 31, 2021

1,090.8 $ 77.19

Granted 258.8 $ 122.54

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Unissued as of December 31, 2022

913.7 $ 85.43 0.7 $ 117.9

Vested and unissued as of December 31, 2022

407.4 $ 59.45

During the years ended December 31, 2022, 2021 and 2020 , we awarded our non-employee directors 18,689 , 26,328 and 29,331 RSUs, respectively, which vested upon issuance.

During the years ended December 31, 2021, 2020 and 2019, we awarded 312,602 , 258,661 and 328,142 RSUs, respectively, to executives and employees that vest in four equal annual installments beginning on the anniversary date of the original grant or cliff vest after four years .

During the years ended December 31, 2022, 2021 and 2020 , we awarded 226,108 , 312,602 and 258,661 RSUs, respectively, to executives and employees that vest in four equal annual installments beginning on the anniversary date of the original grant or cliff vest after three or four years .

During the years ended December 31, 2022, 2021 and 2020 , we granted an additional 13,969 , 19,049 and 26,907 RSUs, respectively, as dividend equivalents.

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The compensation expense related to RSUs is amortized ratably over the vesting period, or to the employee's retirement eligible date, if earlier.

During the years ended December 31, 2021, 2020 and 2019, compensation expense related to RSUs totaled $ 32.5 million, $ 26.2 million and $ 24.8 million, respectively.

During the years ended December 31, 2022, 2021 and 2020 , compensation expense related to RSUs tota led $ 22.8 million, $ 32.5 million and $ 26.2 million, respectively.

In 2021, we recognized approximately $ 6 million of compensation expense related to the accelerated vesting of RSUs previously granted to Donald W.

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Outstanding as of December 31, 2020

853.6 $ 76.14

Granted 313.1 $ 91.01

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Outstanding as of December 31, 2021

857.3 $ 84.79

Granted 156.6 $ 124.29

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Outstanding and Exercisable as of December 31, 2022

756.2 $ 95.19

During the years ended December 31, 2022, 2021 and 2020, we awarded 79,043 , 181,322 and 127,278 PSUs to our executive officers, respectively.

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At the end of the performance period, the number of PSUs awarded can range from 0 % to 150 % of the targeted amount, depending on the performance against the pre-determined targets.

During the years ended December 31, 2021, 2020 and 2019, we granted an additi onal 13,586 , 16,760 , and 17,612 PSU s, respectively, as dividend equivalents.

D uring the years ended December 31, 2022, 2021 and 2020, we granted an additi onal 11,304 , 13,586 and 16,760 PSU s, respectively, as dividend equivalents.

The PSUs do not carry any voting or dividend rights, except the right to accumulate additional PSUs in lieu of dividends.

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Compensation expense is recognized for the RTSR portion of the award whether or not the market conditions are achieved.

During the years ended December 31, 2021, 2020 and 2019, compensation expense related to PSUs totaled $ 47.1 million, $ 17.2 million, and $ 22.5 million, respectively.

D uring the years ended December 31, 2022, 2021 and 2020 , compensation expense related to PSUs tot aled $ 22.1 million, $ 47.1 million and $ 17.2 million, respectively.

In 2021, we recognized approximately $ 16 million of compensation expense related to the accelerated vesting of PSUs previously granted to Mr.

Slager that were previously scheduled to vest in 2022 and beyond as a result of his retirement in June 2021.

As of December 31, 2021, total unrecognized compensation expense related to outstanding PSUs was $ 22.5 million, which will be recognized over a weighted average period of 1.0 years.

As of December 31, 2022, total unrecognized compensation expense related to outstanding PSUs was $ 22.9 million, which will be recognized over a weighted average period of approximately 1 year.

REPUBLIC SERVICES, INC.

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Interest cost 5.7 4.7

Actuarial loss 6.7 11.3

Actuarial (gain) loss ( 32.6 ) 6.7

Benefits paid ( 15.9 ) ( 15.5 )

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of the net periodic benefit cost for the years ended December 31 are summarized below:

The components of the net periodic benefit income for the years ended December 31 are summarized below:

2022 2021 2020

Components of net periodic benefit cost:

Components of net periodic benefit income:

Interest cost $ 5.7 $ 4.7 $ 6.4

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Net periodic benefit income $ ( 1.3 ) $ ( 1.3 ) $ ( 1.6 )

Weighted average assumptions used to determine net periodic benefit cost:

Weighted average assumptions used to determine net periodic benefit income:

Discount rate 5.13 % 2.77 % 2.24 %

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The yields on the bonds are used to derive a discount rate for the liability.

The term of our obligation, based on the expected retirement dates of our workforce, is approximately seven years .

The term of our obligation, based on the expected retirement dates of our workforce, is approximately six years .

In developing our expected rate of return assumption, we have evaluated the actual historical performance and long-term return projections of the Plan assets, which give consideration to the asset mix and the anticipated timing of the Plan outflows.

We employ a total return investment approach whereby a mix of equity and fixed income investments are used to maximize the long-term return of Plan assets for what we consider a prudent level of risk.

The intent of this strategy is to minimize Plan expenses by outperforming Plan liabilities over the long run.

We primarily utilize fixed income investments to minimize the volatility of the difference between the market value of the Plan assets and the present value of the obligation.

Risk tolerance is established through careful consideration of Plan liabilities, Plan funded status and our financial condition.

The investment portfolio contains a diversified blend of equity and fixed income investments.

Furthermore, equity investments are diversified across U.S.

stocks as well as growth, value, and small and large capitalizations.

Derivatives may be used to gain market exposure in an efficient and timely manner;

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Asset allocations are reviewed and rebalanced periodically based on funded status.

For 2022, the investment strategy for Plan assets is to maintain a broadly diversified portfolio designed to achieve our target of an average long-term rate of return of 4.10 %.

For 2023, the investment strategy for Plan assets is to maintain a portfolio designed to achieve our target of an average long-term rate of return of 5.40 %.

While we believe we can achieve a long-term average return of 5.40 %, we cannot be certain that the portfolio will perform to our expectations.

Assets are strategically allocated among debt and equity portfolios to achieve a diversification level that reduces fluctuations in investment returns.

Assets are strategically allocated among fixed income and cash portfolios to achieve a diversification level that reduces fluctuations in investment returns.

Asset allocation target ranges and strategies are reviewed periodically with the assistance of an independent external consulting firm.

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(Level 2) Significant

Money market accounts $ 5.0 $ 5.0 $ — $ —

Mutual funds 216.8 — 216.8 —

Money market accounts and U.S.

government securities $ 23.6 $ 23.6 $ — $ —

Fixed income securities 154.6 — 154.6 —

Total assets $ 178.2 $ 23.6 $ 154.6 $ —

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We accrue for such events when losses become probable and reasonably estimable.

In June 2020, we entered into an agreement with a certain multiemployer pension fund through which we transitioned from one plan into another plan managed by the same fund, thus creating a withdrawal event from the original plan.

As a result of the

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

withdrawal event, we recognized $ 31.6 million of withdrawal costs, which we paid in July 2020.

There were no such withdrawal events in 2021.

Republic’s participation in individually significant multiemployer pension plans for the year ended December 31, 2022 is outlined in the table below.

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Teamsters Pension Plan 91-6145047 Safe Safe No $ 61.2 $ 52.2 $ 49.4 No Various dates through

Pension Fund 36-6513567 Safe Safe No 8.7 8.8 9.3 No Various dates through

T., Pension Fund 36-6513567 Safe Safe No 8.1 8.7 8.8 No Various dates through

Individually significant

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At the date these financial statements were issued, Forms 5500 were not available for the plan years ended in 2022.

The COVID-19 pandemic has created significant volatility and disruption of financial markets, which has negatively impacted companies across the globe.

We will continue to monitor the Pension Protection Act zone status of the multiemployer pension plans in which we participate, noting that the current economic environment may impact certain contributing employers' ability to fulfill their obligations under the plans.

We believe the largest risk is attributable to plans in the critical red zone.

In the event other contributing employers default on their obligations under the plans, we could be required to adjust our estimates for these matters, which could have a material and adverse effect on our consolidated financial position, results of operations and cash flows.

Defined Contribution Plan

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The right of each participant in the DCP is solely that of a general, unsecured creditor of Republic with respect to his or her own interest under the DCP.

Deferred amounts may be subject

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

to forfeiture and are deemed invested among investment funds offered under the DCP, as directed by each participant.

Deferred amounts may be subject to forfeiture and are deemed invested among investment funds offered under the DCP, as directed by each participant.

Payments of deferred amounts are payable following separation from service or at a date or dates elected by the participant when the deferral is elected.

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These corporate-owned life insurance policies are held in a Rabbi Trust and are recorded at the amount that can be realized under insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

The aggregate cash surrender value of these life insurance policies was $ 133.5 million and $ 131.8 million as of December 31, 2021 and 2020, respectively, and is classified in other assets in our consolidated balance sheets.

The aggregate cash surrender value of these life insurance policies was $ 100.6 million and $ 133.5 million as of December 31, 2022 and 2021, respectively, and is classified in other assets in our consolidated balance

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The DCP liability was $ 98.6 million and $ 119.4 million as of December 31, 2022 and 2021, respectively, and is classified in other long-term liabilities in our consolidated balance sheets.

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Share repurchase activity during the years ended December 31, 2022, 2021 and 2020 follows (in millions except per share amounts):

2022 2021 2020

Number of shares repurchased 1.6 2.2 1.2

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As of December 31, 2022, 2021 and 2020 there were no repurchased shares pending settlement.

In October 2017, our Board of Directors added $ 2.0 billion to the existing share repurchase authorization, which continued through December 31, 2020.

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.

Share repurchases under the 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.

2 unchanged sentences

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

In December 2020, our board of directors changed the status of 35,789,806 treasury shares to authorized and unissued.

In doing so, the number of our issued shares was reduced by the stated amount.

Our accounting policy is to deduct the par value from common stock and to reflect the excess of cost over par value as a deduction from additional paid-in capital.

The reduction in issued shares resulted in a change of $ 2,316.0 million in treasury stock which was reclassified as $ 0.3 million in common stock, and $ 2,315.7 million in additional paid-in capital.

There was no effect on our total stockholders' equity position as a result of the change.

In October 2022, our Board of Directors approved a quarterly dividend of $ 0.495 per share.

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During each of the years ended December 31, 2022, 2021 and 2020 there were less than 0.1 million antidilutive securities outstanding.

During the year ended December 31, 2019 there were no antidilutive securities outstanding .

REPUBLIC SERVICES, INC.

1 unchanged sentence

SEGMENT REPORTING

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

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

Our Environmental Solutions operating segment, which provides environmental solutions for daily operations of industrial, petrochemical and refining facilities, is aggregated with Corporate entities and other as it only represents approximately 2 % of our consolidated revenue.

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

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 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 services operating segment, now referred to as our Group 3 reportable segment, was aggregated with Corporate entities and other.

Summarized financial information concerning our reportable segments for the years ended December 31, 2022, 2021 and 2020 follows:

Revenue Intercompany

Revenue Depreciation,

Amortization,

Depletion and

Accretion Operating

(Loss) Capital

Expenditures Total Assets

Group 1 $ 6,630.0 $ ( 1,071.1 ) $ 5,558.9 $ 548.1 $ 1,495.7 $ 601.9 $ 12,199.2

Group 2 6,240.4 ( 906.8 ) 5,333.6 541.3 1,135.7 541.8 9,926.9

Corporate entities and other

451.4 ( 48.9 ) 402.5 178.8 ( 555.2 ) 172.6 2,828.9

Total $ 13,321.8 $ ( 2,026.8 ) $ 11,295.0 $ 1,268.2 $ 2,076.2 $ 1,316.3 $ 24,955.0

Group 1 $ 6,059.3 $ ( 1,001.8 ) $ 5,057.5 $ 502.1 $ 1,343.3 $ 546.6 $ 11,593.1

Group 2 5,626.4 ( 834.5 ) 4,791.9 488.9 966.8 465.8 9,005.3

Corporate entities and other 346.0 ( 41.8 ) 304.2 167.8 ( 601.0 ) 182.2 2,835.6

Total $ 12,031.7 $ ( 1,878.1 ) $ 10,153.6 $ 1,158.8 $ 1,709.1 $ 1,194.6 $ 23,434.0

Group 1 $ 6,012.5 $ ( 1,010.6 ) $ 5,001.9 $ 493.7 $ 1,231.7 $ 551.3 $ 11,389.1

Group 2 5,782.1 ( 838.2 ) 4,943.9 475.0 926.6 490.9 8,944.5

Corporate entities and other 398.4 ( 44.8 ) 353.6 153.7 ( 371.1 ) 164.9 2,350.2

Total $ 12,193.0 $ ( 1,893.6 ) $ 10,299.4 $ 1,122.4 $ 1,787.2 $ 1,207.1 $ 22,683.8

Financial information for the years ended December 31, 2020 and 2019 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.

Group 1 Group 2 Recycling & Solid Waste Subtotal Group 3

(Environmental Solutions) Corporate entities and other Total

Gross Revenue $ 7,240.5 $ 6,903.8 $ 14,144.3 $ 1,262.5 $ 238.3 $ 15,645.1

Intercompany Revenue ( 1,104.5 ) ( 930.9 ) ( 2,035.4 ) ( 46.6 ) ( 51.8 ) ( 2,133.8 )

Net Revenue $ 6,136.0 $ 5,972.9 $ 12,108.9 $ 1,215.9 $ 186.5 $ 13,511.3

Gross Adjusted EBITDA $ 1,979.4 $ 1,685.9 $ 3,665.3 $ 253.7 $ 10.3 $ 3,929.3

Adjusted EBITDA allocations 27.5 25.4 52.9 ( 42.6 ) ( 10.3 ) —

Net Adjusted EBITDA $ 2,006.9 $ 1,711.3 $ 3,718.2 $ 211.1 $ — $ 3,929.3

Adjusted EBITDA margin 32.2 % 28.2 % 30.2 % 17.4 % — % 29.1 %

Capital Expenditures $ 626.2 $ 527.7 $ 1,153.9 $ 141.7 $ 158.4 $ 1,454.0

Total Assets $ 12,494.3 $ 10,439.4 $ 22,933.7 $ 4,086.3 $ 2,032.9 $ 29,052.9

Gross Revenue $ 6,630.0 $ 6,229.1 $ 12,859.1 $ 242.4 $ 220.3 $ 13,321.8

Intercompany Revenue ( 1,071.1 ) ( 905.7 ) ( 1,976.8 ) ( 19.5 ) ( 30.5 ) ( 2,026.8 )

Net Revenue $ 5,558.9 $ 5,323.4 $ 10,882.3 $ 222.9 $ 189.8 $ 11,295.0

Gross Adjusted EBITDA $ 1,841.1 $ 1,494.8 $ 3,335.9 $ 44.6 $ 3.0 $ 3,383.5

Adjusted EBITDA allocations 1.6 1.4 3.0 — ( 3.0 ) —

Net Adjusted EBITDA $ 1,842.7 $ 1,496.2 $ 3,338.9 $ 44.6 $ — $ 3,383.5

Adjusted EBITDA margin 32.6 % 27.6 % 30.2 % 20.0 % — % 30.0 %

Capital Expenditures $ 601.9 $ 541.8 $ 1,143.7 $ 50.8 $ 121.8 $ 1,316.3

Total Assets $ 12,199.2 $ 9,926.9 $ 22,126.1 $ 1,211.6 $ 1,617.3 $ 24,955.0

Gross Revenue $ 6,059.3 $ 5,581.2 $ 11,640.5 $ 162.8 $ 228.4 $ 12,031.7

Intercompany Revenue ( 1,001.8 ) ( 828.6 ) ( 1,830.4 ) ( 18.0 ) ( 29.7 ) ( 1,878.1 )

Net Revenue $ 5,057.5 $ 4,752.6 $ 9,810.1 $ 144.8 $ 198.7 $ 10,153.6

Gross Adjusted EBITDA $ 1,639.8 $ 1,267.1 $ 2,906.9 $ 27.5 $ 54.9 $ 2,989.3

Adjusted EBITDA allocations 29.0 25.9 54.9 — ( 54.9 ) —

Net Adjusted EBITDA $ 1,668.8 $ 1,293.0 $ 2,961.8 $ 27.5 $ — $ 2,989.3

Adjusted EBITDA margin 32.3 % 26.7 % 29.7 % 19.0 % — % 29.4 %

Capital Expenditures $ 546.6 $ 465.8 $ 1,012.4 $ 26.3 $ 155.9 $ 1,194.6

Total Assets $ 11,761.0 $ 9,256.0 $ 21,017.0 $ 410.8 $ 2,006.2 $ 23,434.0

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

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

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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.

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

Revenue and overhead costs generated by Corporate entities and other are either specifically assigned or allocated on a rational and consistent basis amongst our reportable segments to calculate EBITDA and Adjusted EBITDA.

This presentation is consistent with how our chief operating decision maker reviews results of operations to make resource allocation decisions.

Net Adjusted EBITDA reflects the allocation of Gross Adjusted EBITDA from Corporate entities and other to our reportable segments.

As presented in the tables below, Adjusted EBITDA reflects certain adjustments for US Ecology deal and integration costs, losses on equity method investments, (gains) losses on business divestitures, restructuring expenses, adjustments to withdrawal liabilities from multi-employer pension funds, accelerated vesting of compensation expense related to the 2021 CEO transition, loss on extinguishment of debt and other related costs and Bridgeton insurance recovery.

The following table calculates our EBITDA and EBITDA margin for the years ended December 31, 2022, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

2022 2021 2020

Net income attributable to Republic Services, Inc.

$ 1,487.6 11.0 % $ 1,290.4 11.4 % $ 967.2 9.5 %

Net income attributable to noncontrolling interests — 1.9 2.4

Provision for income taxes 343.9 282.8 173.1

Other expense (income), net 2.3 0.5 ( 4.1 )

Interest income ( 3.3 ) ( 2.5 ) ( 5.2 )

Interest expense 395.6 314.6 355.6

Depreciation, amortization and depletion 1,351.6 1,185.5 1,075.9

Accretion 89.6 82.7 82.9

EBITDA and EBITDA margin $ 3,667.3 27.1 % $ 3,155.9 27.9 % $ 2,647.8 26.1 %

The following table calculates our adjusted EBITDA and adjusted EBITDA margin for the years ended December 31, 2022, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

2022 2021 2020

EBITDA $ 3,667.3 27.1 % $ 3,155.9 27.9 % $ 2,647.8 26.1 %

Loss from unconsolidated equity method investment 165.6 188.5 118.2

Adjustment to withdrawal liability for multiemployer pension funds

( 1.6 ) — 34.5

Restructuring charges 27.0 16.6 20.0

(Gain) loss on business divestitures and impairments, net ( 6.3 ) 0.5 77.7

US Ecology, Inc.

acquisition integration and deal costs 77.3 — —

Accelerated vesting of compensation expense for CEO transition — 22.0 —

Loss on extinguishment of debt and other related costs — — 101.9

Bridgeton insurance recovery — — ( 10.8 )

Total adjustments 262.0 227.6 341.5

Adjusted EBITDA and adjusted EBITDA margin $ 3,929.3 29.1 % $ 3,383.5 30.0 % $ 2,989.3 29.4 %

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our operations primarily consist of providing environmental services.

14 unchanged sentences

Environmental solutions 1,262.1 242.4 163.3

intercompany ( 53.9 ) ( 19.5 ) ( 18.1 )

Environmental solutions, net 1,208.2 8.9 222.9 2.0 145.2 1.4

Recycling processing and commodity sales

5 unchanged sentences

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

Environmental solutions revenue includes revenue generated by US Ecology following our acquisition of the business on May 2, 2022.

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

1 unchanged sentence

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

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

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

See Note 15, Segment Reporting , for additional information regarding revenue by reportable segment.

1 unchanged sentence

Collection Services

Our collection business involves the collection of material for transport to transfer stations, or directly to landfills or recycling processing centers.

Our collection business involves the collection of material for transport to transfer stations, or directly to landfills or recycling centers.

Our collection services business includes both recurring and temporary customer relationships.

2 unchanged sentences

In general, small-container and residential collection fees are billed monthly or quarterly in advance.

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

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our large-container customers are typically billed on a monthly basis based on the nature of the services provided during the period.

1 unchanged sentence

In addition, certain of our contracts have annual price escalation clauses that are tied to changes in an underlying base index such as a consumer price index which are unknown at contract inception.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Transfer Services

7 unchanged sentences

Environmental Solutions

Environmental solutions revenue is primarily generated from the fees we charge for the disposal of hazardous and non-hazardous solid and liquid material and in-plant services, such as transportation and logistics, including at our transfer, storage and disposal facilities (TSDF).

Environmental solutions revenue is primarily generated from the fees we charge for the collection, treatment, consolidation, disposal and recycling of hazardous and non-hazardous waste, field and industrial services, equipment rental, emergency response and standby services and in-plant services, such as transportation and logistics, including at our transfer, storage and disposal facilities (TSDF).

Activity for this service line varies across markets and reflects the regulatory environment, pricing and disposal alternatives available in any given market.

Revenue recognized under these agreements is variable in nature and primarily based on the volume of waste accepted or processed during the period.

Revenue recognized under these agreements is variable in nature and primarily based on the volume and type of waste accepted or processed during the period.

For certain field and industrial services contracts, we have a right to consideration from our customers in an amount that corresponds directly with the value to the customer of the Company's performance completed to date.

Therefore, we have applied the practice expedient to recognize revenue in the amount to which we have the right to invoice.

Recycling Processing and Commodity Sales

Our recycling processing centers generate revenue through the processing and sale of old corrugated cardboard (OCC), old newsprint (ONP), aluminum, glass and other materials at market prices.

Our recycling centers generate revenue through the processing and sale of old corrugated cardboard (OCC), old newsprint (ONP), aluminum, glass and other materials at market prices.

In certain instances, we issue recycling rebates to our municipal or large-container customers, which can be based on the price we receive upon the final sale of recycled commodities, a fixed contractual rate or other measures.

6 unchanged sentences

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

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

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

We do not disclose the value of unsatisfied performance obligations for these contracts as our right to consideration corresponds directly to the value provided to the customer for services completed to date and all future variable consideration is allocated to wholly unsatisfied performance obligations.

1 unchanged sentence

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

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred Contract Costs

2 unchanged sentences

As of December 31, 2022 and 2021, we recognized $ 80.2 million and $ 80.6 million, respectively, of deferred contract costs and capitalized sales commissions.

During the years ended December 31, 2021 and 2020, we amortized $ 12.5 million and $ 12.2 million, respectively, of capitalized sales commissions to selling, general and administrative expenses, and $ 6.4 million and $ 6.5 million, respectively, of other deferred contract costs as a reduction of revenue.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During the years ended December 31, 2022, 2021 and 2020, we amortized $ 13.4 million, $ 12.5 million and $ 12.2 million, respectively, of capitalized sales commissions to selling, general and administrative expenses, and $ 5.7 million, $ 6.4 million and $ 6.5 million, respectively, of other deferred contract costs as a reduction of revenue.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

A summary of changes in accumulated other comprehensive income, net of tax, by component, for the years ended December 31, 2021, 2020 and 2019 follows:

Hedges Defined Benefit Pension Plan Total

Balance as of December 31, 2018 $ 16.1 $ 14.7 $ 30.8

Other comprehensive loss before reclassifications ( 30.2 ) ( 2.5 ) ( 32.7 )

Amounts reclassified from accumulated other comprehensive loss 1.0 — 1.0

Net current-period other comprehensive loss ( 29.2 ) ( 2.5 ) ( 31.7 )

Adoption of accounting standard ( 0.6 ) 3.7 3.1

A summary of changes in accumulated other comprehensive loss, net of tax, by component, for the years ended December 31, 2022, 2021 and 2020 follows:

Hedges Defined Benefit Pension Plan Foreign Currency Translation Total

Balance as of December 31, 2019 $ ( 13.7 ) $ 15.9 $ — $ 2.2

3 unchanged sentences

Balance as of December 31, 2020

Other comprehensive income before reclassifications — ( 5.8 ) ( 5.8 )

Amounts reclassified from (income) loss 4.6 ( 1.0 ) 3.6

Net current-period other comprehensive loss (income) 4.6 ( 6.8 ) ( 2.2 )

( 30.4 ) 18.0 — ( 12.4 )

Other comprehensive loss before reclassifications — ( 5.8 ) — ( 5.8 )

Amounts reclassified from accumulated other comprehensive loss 4.6 ( 1.0 ) — 3.6

Net current-period other comprehensive income (loss) 4.6 ( 6.8 ) — ( 2.2 )

Balance as of December 31, 2021

( 25.8 ) 11.2 — ( 14.6 )

Other comprehensive income (loss) before reclassifications 8.4 ( 1.6 ) ( 5.0 ) 1.8

Amounts reclassified from accumulated other comprehensive loss 1.1 ( 0.4 ) — 0.7

Net current-period other comprehensive income (loss) 9.5 ( 2.0 ) ( 5.0 ) 2.5

Balance as of December 31, 2022

$ ( 16.3 ) $ 9.2 $ ( 5.0 ) $ ( 12.1 )

A summary of reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 follows:

Amount Reclassified from Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components 2021 2020 2019 Affected Line Item in the Statement Where Net Income is Presented

Loss on cash flow hedges:

Amount Reclassified from Accumulated Other Comprehensive Loss

Details about Accumulated Other Comprehensive Loss Components 2022 2021 2020 Affected Line Item in the Statement Where Net Income is Presented

(Loss) gain on cash flow hedges:

Terminated interest rate locks $ ( 5.9 ) $ ( 6.2 ) $ ( 7.9 ) Interest expense

2022 Interest Rate Swap 4.4 — — Interest expense

Total before tax ( 1.5 ) ( 6.2 ) ( 7.9 )

Tax benefit 0.4 1.6 2.1

4 unchanged sentences

Net of tax 0.4 1.0 —

Total loss reclassified into earnings, net of tax

Total gain (loss) reclassified into earnings, net of tax

$ ( 0.7 ) $ ( 3.6 ) $ ( 5.8 )

13 unchanged sentences

Effect of dedesignation $ — $ — $ 4.7

Gain (loss) on cash flow hedging relationships:

(Loss) gain on cash flow hedging relationships:

Amount of (loss) gain reclassified from accumulated other comprehensive loss into earnings, net of tax

Interest rate swap locks $ ( 4.4 ) $ ( 4.6 ) $ ( 5.8 )

Amount of loss reclassified from accumulated other comprehensive loss into income, net of tax

$ ( 4.6 ) $ ( 5.8 ) $ ( 1.0 )

2022 Interest Rate Swap $ 3.3 $ — $ —

The effects of derivative instruments not in Subtopic 815-20:

3 unchanged sentences

Interest rate contract:

Net loss on change in fair value of free-standing derivative instruments $ ( 0.3 ) $ ( 2.7 ) $ ( 0.5 )

Net gain (loss) on change in fair value of free-standing derivative instruments $ 2.1 $ 0.3 $ ( 2.7 )

Fair Value Measurements

12 unchanged sentences

56.9 56.9 — 56.9 —

Interest rate swaps - other assets 4.7 4.7 — 4.7 —

Other derivative assets - other assets 15.0 15.0 — 15.0 —

Derivative and hedging assets - other assets 105.8 105.8 — 105.8 —

Total assets $ 201.0 $ 201.0 $ 38.3 $ 162.7 $ —

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

Derivative and hedging liabilities - other accrued liabilities and other long-term liabilities $ 102.0 $ 102.0 $ — $ 102.0 $ —

Contingent consideration - other accrued liabilities and other long-term liabilities 65.1 65.1 — — 65.1

6 unchanged sentences

Bonds - restricted cash and marketable securities and other assets 63.1 63.1 — 63.1 —

73.8 73.8 — 73.8 —

Interest rate swaps - other assets 10.0 10.0 — 10.0 —

Other derivative assets - other assets 63.8 63.8 — 63.8 —

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

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

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

$ 103.0 $ 103.0 $ — $ 103.0 $ —

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

6 unchanged sentences

Contingent Consideration

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

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

As of December 31, 2022, the Sonoma contingent consideration represents the fair value of $ 60.2 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

The potential undiscounted amount of all future contingent payments that we could be

The potential undiscounted amount of all future contingent payments that we could be required to make under the waste management contract is estimated to be between approximately $ 78 million and $ 113 million.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

required to make under the waste management contract is estimated to be between approximately $ 77 million and $ 95 million.

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

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If we had used the high ends of such ranges, our aggregate potential liability would be approximately $ 7 million higher than the amount recorded as of December 31, 2022.

Multiemployer Pension Plans

We participate in multiemployer pension plans that generally provide retirement benefits to participants of contributing employers.

We do not administer these plans.

Under current law regarding multiemployer pension plans, our withdrawal (which we consider from time to time) or the mass withdrawal from any under-funded multiemployer pension plan (each, a Withdrawal Event) could require us to make payments to the plan for our proportionate share of the plan’s unfunded vested liabilities.

During the course of operating our business, we incur Withdrawal Events regarding certain of the multiemployer pension plans in which we participate.

We accrue for such events when losses become probable and reasonably estimable.

Unconditional Purchase Commitments

5 unchanged sentences

Under these put-or-pay agreements, we must pay for agreed-upon minimum volumes regardless of the actual number of tons placed at the facilities.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

1 unchanged sentence

Thereafter 360.2

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash and Cash Equivalents and Restricted Cash and Marketable Securities

6 unchanged sentences

Cash, cash equivalents, restricted cash and restricted cash equivalents $ 214.3 $ 105.6 $ 114.2

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 includes amounts 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.

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

11 unchanged sentences

Additionally, we are required to provide financial assurance for our insurance program and collateral for certain performance obligations.

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We had the following financial instruments and collateral in place to secure our financial assurances as of December 31:

9 unchanged sentences

There have been no identified events or changes in circumstances that may have a significant adverse effect on the recoverability of this investment.

This investee company and the parent company of the investee had written surety bonds for us relating primarily to our landfill operations for capping, closure and post-closure, of

REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

which $ 1,435.3 million were outstanding as of December 31, 2021.

This investee company and the parent company of the investee had written surety bonds for us relating primarily to our landfill operations for capping, closure and post-closure, of which $ 1,606.0 million were outstanding as of December 31, 2022.

Our reimbursement obligations under these bonds are secured by an indemnity agreement with the investee and a surety bond.

18 unchanged sentences

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 8. Financial Statements and Supplementary Data