What changed in this filing

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Item 1. Financial Statements

2023-04-28 compared with 2022-10-28 · 241 added, 348 removed, 683 unchanged (46% of the section changed)

3 unchanged sentences

(in millions, except per share data)

September 30, December 31,

March 31, December 31,

Current assets:

46 unchanged sentences

(in millions, except per share data)

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

2022 2021 2022 2021

Three Months Ended March 31,

Revenue $ 3,581.1 $ 2,970.1

3 unchanged sentences

Selling, general and administrative 379.2 307.8

Withdrawal costs - multiemployer pension funds

Gain on business divestitures and impairments, net ( 5.2 ) — ( 5.3 ) ( 0.2 )

Restructuring charges 5.5 6.0

1 unchanged sentence

Interest expense ( 126.7 ) ( 83.5 )

Loss from unconsolidated equity method investments ( 51.8 ) ( 15.1 ) ( 69.2 ) ( 44.0 )

Loss on extinguishment of debt ( 0.2 ) —

Gain (loss) from unconsolidated equity method investments 1.0 ( 3.8 )

Interest income 1.4 0.5

Other (expense) income, net ( 0.3 ) ( 0.9 ) ( 6.5 ) 0.6

Other income (expense), net 2.5 ( 1.6 )

Income before income taxes 522.1 472.2

1 unchanged sentence

Net income 383.9 351.9

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

— ( 0.5 ) 0.2 ( 1.9 )

Net loss attributable to non-controlling interests in consolidated subsidiary

Net income attributable to Republic Services, Inc.

8 unchanged sentences

Weighted average common and common equivalent shares outstanding

317.0 319.4 317.1 319.7

Cash dividends per common share $ 0.495 $ 0.460

3 unchanged sentences

(in millions)

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

2022 2021 2022 2021

Three Months Ended March 31,

Net income $ 383.9 $ 351.9

1 unchanged sentence

Hedging activity:

Realized loss reclassified into earnings — 1.2 2.1 3.5

Realized (income) loss reclassified into earnings ( 2.6 ) 1.1

Unrealized gain 5.2 —

1 unchanged sentence

Change in funded status of pension plan obligations

— — — ( 0.7 )

Foreign currency activity:

Loss on foreign currency translation ( 6.1 ) — ( 6.2 ) —

Other comprehensive income, net of tax 2.8 1.1

Comprehensive income 386.7 353.0

Comprehensive (income) loss attributable to non-controlling interests — ( 0.5 ) 0.2 ( 1.9 )

Comprehensive loss attributable to non-controlling interests — 0.1

Comprehensive income attributable to Republic Services, Inc.

11 unchanged sentences

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

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

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

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

Issuances of common stock 0.3 — 2.6 — ( 0.1 ) ( 14.1 ) — — ( 11.5 )

Stock-based compensation — — 13.2 ( 0.9 ) — — — — 12.3

Purchase of common stock for treasury — — — — ( 1.6 ) ( 203.5 ) — — ( 203.5 )

Balance as of March 31, 2022

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

Net income — — — 383.9 — — — — 383.9

Other comprehensive loss — — — — — — ( 0.1 ) — ( 0.1 )

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

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

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

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

Balance as of June 30, 2022

320.1 3.2 2,818.9 6,907.1 ( 4.1 ) ( 500.4 ) ( 13.6 ) 0.6 9,215.8

Net income — — — 416.9 — — — — 416.9

Other comprehensive income — — — — — — 2.8 — 2.8

2 unchanged sentences

Stock-based compensation — — 12.3 ( 1.0 ) — — — — 11.3

Purchase of common stock for treasury

— — — — — — — — —

Distributions paid — — ( 0.8 ) — — — — — ( 0.8 )

Balance as of September 30, 2022

Balance as of March 31, 2023

320.6 $ 3.2 $ 2,858.4 $ 7,582.7 ( 4.3 ) $ ( 518.5 ) $ ( 9.3 ) $ 0.8 $ 9,917.3

The accompanying notes are an integral part of these statements.

Republic Services, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - (CONTINUED)

(in millions)

Republic Services, Inc.

Stockholders’ Equity

12 unchanged sentences

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

Net income — — — 331.1 — — — 0.9 332.0

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

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

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

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

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

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

Balance as of June 30, 2021

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

Net income — — — 350.3 — — — 0.5 350.8

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

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

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

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

Purchase of common stock for treasury — — — — ( 1.2 ) ( 123.3 ) — — ( 123.3 )

Balance as of September 30, 2021

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

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash provided by operating activities:

4 unchanged sentences

Stock-based compensation 11.6 12.4

Deferred tax provision (benefit) 100.2 ( 32.8 )

Deferred tax provision 14.5 24.9

Provision for doubtful accounts, net of adjustments 7.8 6.6

(Gain) loss on disposition of assets and asset impairments, net ( 8.0 ) 0.5

Environmental adjustments ( 0.1 ) ( 1.8 )

Loss from unconsolidated equity method investments 69.2 44.0

Loss on extinguishment of debt 0.2 —

Gain on disposition of assets and asset impairments, net ( 3.8 ) ( 1.7 )

(Gain) loss from unconsolidated equity method investments ( 1.0 ) 3.8

Other non-cash items ( 1.6 ) 3.4

6 unchanged sentences

Other liabilities ( 126.2 ) ( 118.9 )

Proceeds for retirement of certain hedging relationships 2.4 —

Cash provided by operating activities 687.7 705.6

3 unchanged sentences

Cash used in acquisitions and investments, net of cash and restricted cash acquired ( 290.9 ) ( 81.6 )

Cash received from business divestitures 50.1 46.3

Cash paid for business divestitures ( 0.7 ) —

Purchases of restricted marketable securities ( 4.5 ) ( 2.5 )

4 unchanged sentences

Proceeds from credit facilities and notes payable, net of fees 6,675.5 638.9

Proceeds from issuance of senior notes, net of discount and fees 1,183.6 —

Payments of credit facilities and notes payable ( 7,729.5 ) ( 590.9 )

2 unchanged sentences

Cash dividends paid ( 156.4 ) ( 145.9 )

Distributions paid to non-controlling interests in consolidated subsidiary ( 0.8 ) ( 1.2 )

Contingent consideration payments ( 4.2 ) ( 1.8 )

Cash provided by (used in) financing activities 1,362.8 ( 343.5 )

Cash used in financing activities ( 42.0 ) ( 314.7 )

Effect of foreign exchange rate changes on cash — —

Increase in cash, cash equivalents, restricted cash and restricted cash equivalents 42.2 8.7

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

Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents ( 7.6 ) ( 8.5 )

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 214.3 105.6

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 206.7 $ 97.1

5 unchanged sentences

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 in geographic areas located in the western United States.

Group 2 is our recycling and solid waste business operating 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 in geographic areas located primarily across the United States and Canada.

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, the eastern seaboard of the United States, and Canada.

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

These groups represent our reportable segments, which each provide integrated environmental solutions, including but not limited to collection, transfer, recycling, and disposal.

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New Accounting Pronouncements

Accounting Standards Updates Issued but not yet Adopted

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).

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 quarter ended June 30, 2022, we novated a

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

certain hedging relationship related to one of our interest rate swap agreements by changing the reference rate from the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR).

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

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

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

Business Combinations

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

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

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

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

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.

Disclosure of Supplier Finance Program Obligations

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

The ASU requires buyers to disclose information about their supplier finance programs.

Interim and annual requirements include the disclosure of outstanding amounts under the obligations as of the end of the reporting period, and annual requirements include a rollforward of those obligations for the annual reporting period, as well as a description of payment and other key terms of the programs.

This update is effective for annual periods beginning after December 15, 2022, and interim periods within those

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

fiscal years, except for the requirement to disclose rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The adoption of ASU 2022-04 on January 1, 2023 did not have a material impact on our consolidated financial statements.

As of March 31, 2023, certain of our vendors chose to opt into our vendor supply finance agreement.

This agreement allows a vendor to choose, on an invoice by invoice basis, to receive an earlier payment verses a payment based on its original contracted terms (which, depending on the vendor, could extend up to 90 days or longer).

As of March 31, 2023 and December 31, 2022, the amounts outstanding under these programs were not material.

BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

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

We acquired various environmental services businesses during the three months ended March 31, 2023 and 2022.

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

2 unchanged sentences

$ 221.9 $ 42.9

Fair value, future minimum finance lease payments

Total $ 224.1 $ 47.6

Allocated as follows:

Restricted cash

Accounts receivable

Prepaid expenses 0.8 —

Landfill development costs

Property and equipment

Operating right-of-use lease assets

Interest rate swap 29.1 —

Assets held for sale

Accounts payable

( 108.9 ) ( 29.3 )

Deferred revenue

( 27.7 ) ( 6.4 )

Environmental remediation liabilities

( 92.9 ) ( 25.6 )

Closure and post-closure liabilities

( 89.3 ) ( 32.2 )

Operating right-of-use lease liabilities

( 55.8 ) ( 7.1 )

Deferred income tax liabilities ( 9.2 ) —

5 unchanged sentences

Other intangible assets

$ 169.6 $ 64.7

1,392.6 706.2

Total allocated $ 194.8 $ 34.1

1 unchanged sentence

Accordingly, the purchase price allocations are subject to change.

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

We do not expect that the goodwill and intangible assets recognized as a result of these acquisitions will be 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.

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

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

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

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

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

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

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

The preliminary allocation of purchase price, including the value of certain tangible and intangible assets acquired as well

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

The preliminary purchase price allocation for the US Ecology acquisition 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 the three months ended March 31, 2023 and 2022 , we incurred $ 7.6 million and $ 4.8 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology.

The 2023 costs primarily related to the integration of certain software systems as well as rebranding the business , and the 2022 costs included certain costs to close the acquisition.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

During the three and nine months ended September 30, 2022, we incurred $ 8.7 million and $ 65.4 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology, which included certain costs to close the acquisition and integrate the business, including stock compensation expense for unvested equity awards at closing as well as severance and change-in-control payments.

In July 2022, we 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 2023 and 2022, 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 $ 121.0 million and $ 30.7 million, which were recorded to other assets in our September 30, 2022 and 2021 consolidated balance sheets, respectively.

During the three and nine months ended September 30, 2022, we reduced the carrying value of these investments by $ 49.5 million and $ 61.8 million, respectively, and during the three and nine months ended September 30, 2021, we reduced the carrying value of these investments by $ 10.0 million and $ 35.7 million, respectively, as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements.

Additionally, our tax provisions reflect benefits of approximately $ 35 million and $ 60 million for the three and nine months ended September 30, 2022, respectively, due to the tax credits related to these investments.

Our tax provisions reflect a similar benefit of approximately $ 20 million for the nine months ended September 30, 2021.

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

In exchange for our non-controlling interests, we made capital contributions of $ 1.5 million and $ 11.0 million, which were recorded to other assets in our March 31, 2023 and 2022 consolidated balance sheets, respectively.

During the three months ended March 31, 2023, we increased the carrying value of these investments by $ 1.3 million as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements.

During the three months ended March 31, 2022, we reduced the carrying value of these investments by $ 0.4 million 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 no benefits for the three months ended March 31, 2023, and benefits of $ 1.2 million for the three months ended March 31, 2022, 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

During the three and nine months ended September 30, 2022, we incurred restructuring charges of $ 6.8 million and $ 18.8 million, respectively, and during the three and nine months ended September 30, 2021, we incurred restructuring charges of $ 4.6 million and $ 11.2 million, respectively, related to the redesign of certain back-office software systems.

During the nine months ended September 30, 2022 and 2021, we paid $ 17.0 million and $ 12.1 million, respectively, related to these restructuring efforts.

During the three months ended March 31, 2023 and 2022, we incurred restructuring charges of $ 5.5 million and $ 6.0 million, respectively.

The 2023 charges primarily related to the redesign of our customer billing and asset management software systems, and the 2022 charges primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems which was completed with systems being placed into production in the fourth quarter of 2022.

We paid $ 5.0 million and $ 5.9 million during 2023 and 2022, respectively, related to these restructuring efforts.

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

1 unchanged sentence

Balance as of December 31, 2022

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

Acquisitions Divestitures Adjustments to Acquisitions Balance as of March 31, 2023

Group 1 $ 6,637.9 $ 5.9 $ — $ — $ 6,643.8

2 unchanged sentences

Total $ 14,451.5 $ 171.4 $ — $ ( 0.7 ) $ 14,622.2

Goodwill by reportable segment as of December 31, 2021 and September 30, 2022 reflects the presentation of Group 3 as a reportable segment.

Goodwill by reportable segment as of December 31, 2022 and March 31, 2023 reflects the presentation of Group 3 as a reportable segment.

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

Adjustments to acquisitions during the nine months ended September 30, 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.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Adjustments to acquisitions during the three months ended March 31, 2023 primarily related to changes in our valuation of tangible assets and liabilities assumed as a result of obtaining new information regarding the acquisitions that closed in 2022.

Other Intangible Assets, Net

4 unchanged sentences

Acquisitions Adjustments

Balance as of September 30, 2022

Balance as of March 31, 2023

Balance as of December 31, 2022

Additions Charged to Expense Adjustments

Balance as of September 30, 2022

Other Intangible Assets, Net as of September 30, 2022

Balance as of March 31, 2023

Other Intangible Assets, Net as of March 31, 2023

Customer relationships

5 unchanged sentences

Total $ 1,158.4 $ 23.4 $ — $ 1,181.8 $ ( 811.2 ) $ ( 15.1 ) $ — $ ( 826.3 ) $ 355.5

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Prepaid Expenses and Other Current Assets

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

A summary of prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022 follows:

Prepaid expenses $ 110.8 $ 114.3

Inventories 101.1 72.2

Income taxes receivable 107.7 214.0

Inventories 97.9 96.6

Other non-trade receivables 49.5 59.8

3 unchanged sentences

Total $ 422.8 $ 536.5

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

Operating right-of-use lease assets $ 279.2 $ 255.3

A summary of other assets as of March 31, 2023 and December 31, 2022 follows:

Investments $ 351.1 $ 281.4

Operating right-of-use lease assets 263.4 275.1

Deferred compensation plan 103.5 100.6

7 unchanged sentences

Total $ 1,071.0 $ 1,025.5

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

OTHER LIABILITIES

Other Accrued Liabilities

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

A summary of other accrued liabilities as of March 31, 2023 and December 31, 2022 follows:

Accrued payroll and benefits $ 212.2 $ 342.6

Insurance reserves, current 196.1 187.5

Accrued fees and taxes 177.2 143.7

Accrued dividends 156.5 156.4

Accrued fees and taxes 155.7 168.5

Operating right-of-use lease liabilities, current 60.2 57.9

3 unchanged sentences

Total $ 922.5 $ 1,058.3

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Other Long-Term Liabilities

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

A summary of other long-term liabilities as of March 31, 2023 and December 31, 2022 follows:

Operating right-of-use lease liabilities $ 224.5 $ 238.0

Derivative and hedging liabilities 107.9 50.7

Deferred compensation plan liability 104.9 98.6

Derivative and hedging liabilities 86.9 99.7

Ceded insurance reserves 79.5 84.1

5 unchanged sentences

LANDFILL AND ENVIRONMENTAL COSTS

As of September 30, 2022, we owned or operated 207 active landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards.

As of March 31, 2023, we owned or operated 206 active landfills with total available disposal capacity estimated to be 5.1 billion in-place cubic yards.

Additionally, we had post-closure responsibility for 128 closed landfills.

Accrued Landfill and Environmental Costs

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

A summary of accrued landfill and environmental liabilities as of March 31, 2023 and December 31, 2022 follows:

Landfill final capping, closure and post-closure liabilities $ 1,808.3 $ 1,786.4

3 unchanged sentences

Long-term portion $ 2,153.6 $ 2,141.3

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Final Capping, Closure and Post-Closure Costs

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the nine months ended September 30, 2022 and 2021:

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the three months ended March 31, 2023 and 2022:

Asset retirement obligation liabilities, beginning of year $ 1,786.4 $ 1,507.3

9 unchanged sentences

However, if there are significant changes in the facts and circumstances related to a site during the year, we will update our assumptions prospectively in the period that we know all the relevant facts and circumstances and make adjustments as appropriate.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Landfill Operating Expenses

8 unchanged sentences

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

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of September 30, 2022 would be approximately $ 376 million higher than the amount recorded.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of March 31, 2023 would be approximately $ 374 million higher than the amount recorded.

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

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

The following table summarizes the activity in our environmental remediation liabilities for the three months ended March 31, 2023 and 2022:

Environmental remediation liabilities, beginning of year $ 487.5 $ 454.9

Net adjustments charged to expense ( 0.1 ) ( 1.8 )

Payments ( 11.6 ) ( 10.0 )

Accretion expense (non-cash interest expense) 4.6 4.1

Acquisitions, net of divestitures and other adjustments 102.5 25.6

Environmental remediation liabilities, end of period 480.5 449.0

2 unchanged sentences

Bridgeton Landfill.

During the nine months ended September 30, 2022, we paid $ 11.6 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri.

During the three months ended March 31, 2023, we paid $ 3.2 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 September 30, 2022, the remediation liability recorded for this site was $ 91.2 million, of which approximately $ 4 million is expected to be paid during the remainder of 2022.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

We believe the remaining reasonably possible high end of our range would be approximately $ 140 million higher than the amount recorded as of September 30, 2022.

As of March 31, 2023, the remediation liability recorded for this site was $ 84.0 million, of which approximately $ 12 million is expected to be paid during the remainder of 2023.

West Lake Landfill Superfund Site .

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The carrying value of our credit facilities, finance leases and long-term debt as of September 30, 2022 and December 31, 2021 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting.

The carrying value of our credit facilities, finance leases and long-term debt as of March 31, 2023 and December 31, 2022 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting.

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value

14 unchanged sentences

May 2028 3.950 800.0 ( 10.3 ) 789.7 800.0 ( 10.7 ) 789.3

April 2029 4.875 400.0 ( 5.1 ) 394.9 — — —

March 2030 2.300 600.0 ( 5.1 ) 594.9 600.0 ( 5.2 ) 594.8

2 unchanged sentences

March 2033 2.375 700.0 ( 7.0 ) 693.0 700.0 ( 7.1 ) 692.9

April 2034 5.000 800.0 ( 11.3 ) 788.7 — — —

March 2035 6.086 181.9 ( 12.0 ) 169.9 181.9 ( 12.2 ) 169.7

12 unchanged sentences

Long-term portion $ 11,467.8 $ 11,329.5

Loss on Extinguishment of Debt

During the three months ended March 31, 2023, we incurred a loss on the early extinguishment of debt related to the early repayment of a portion of our Term Loan Facility.

We incurred non-cash charges related to the proportional share of unamortized deferred issuance costs of $ 0.2 million.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Credit Facilities

4 unchanged sentences

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.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating LIBOR, or a Eurodollar Rate, plus a current applicable margin of 0.910 % based on our Debt Ratings (all as defined in the Credit Facility agreement).

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

dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a 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.

In February 2023, we entered into Amendment No.

1 to the Credit Facility (the Credit Facility Amendment) to add our subsidiary, USE Canada Holdings, Inc.

(the Canadian Borrower), as an additional borrower under the Credit Facility.

The Credit Facility Amendment provides that the aggregate of (i) all loans to the Canadian Borrower and (ii) all loans denominated in Canadian dollars cannot exceed $ 500 million (the Canadian Sublimit).

The Canadian Sublimit is part of, and not in addition to, the aggregate commitments under the Credit Facility.

The Canadian dollar-denominated loans bear interest based on the Canadian Prime Rate or the Canadian Dollar Offered Rate plus a current applicable margin of 0.910 % based on our Debt Ratings.

Borrowings under the Credit Facility in United States dollars bear interest at a Base Rate, a daily floating SOFR or a term SOFR plus a current applicable margin of 0.910 % based on our Debt Ratings (all as defined in the Credit Facility agreement).

As of March 31, 2023, C$ 180 million was outstanding against the Canadian Sublimit, with an interest rate of 5.933 %.

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.

2 unchanged sentences

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

We had $ 17.1 million and $ 24.3 million outstanding under our Credit Facility as of September 30, 2022 and December 31, 2021, respectively.

We had $ 349.8 million and $ 341.9 million of letters of credit outstanding under our Credit Facility as of September 30, 2022 and December 31, 2021, respectively.

We also had $ 999.0 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program as of September 30, 2022.

We had $ 133.0 million and $ 250.0 million outstanding under our Credit Facility as of March 31, 2023 and December 31, 2022, respectively.

We had $ 345.2 million and $ 347.6 million of letters of credit outstanding under our Credit Facility as of March 31, 2023 and December 31, 2022, respectively.

We also had $ 369.1 million and $ 998.2 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program as of as of March 31, 2023 and December 31, 2022, respectively.

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 $ 1,633.1 million and $ 2,633.8 million as of September 30, 2022 and December 31, 2021, respectively.

As a result, availability under our Credit Facility was $ 2,151.8 million and $ 1,402.4 million as of March 31, 2023 and December 31, 2022, respectively.

Uncommitted Credit Facility

4 unchanged sentences

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

As of September 30, 2022, we had $ 60.8 million outstanding under our Uncommitted Credit Facility.

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

Term Loan Credit Agreement

As of March 31, 2023 and December 31, 2022, we had no borrowings outstanding under our Uncommitted Credit Facility.

Term Loan Facility

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

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

The current weighted average interest rate is 3.040 %.

The current weighted average interest rate for borrowings outstanding is 5.707 %.

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.

We had $ 700.0 million and $ 1.0 billion in borrowings outstanding under the Term Loan Facility as of March 31, 2023 and December 31, 2022, respectively.

Commercial Paper Program

1 unchanged sentence

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

As of September 30, 2022, we had $ 1.0 billion principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 3.134 % and weighted average maturity of 28 days.

As of March 31, 2023, we had $ 370.0 million principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 5.778 % and weighted

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

average maturity of 27 days.

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.

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

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of March 31, 2023.

In March 2023, we issued $ 400.0 million of 4.875 % senior notes due 2029 (the 4.875 % Notes) and $ 800.0 million of 5.000 % senior notes due 2034 (the 5.000 % Notes, and together, the Notes).

The Notes are unsecured and unsubordinated and rank equally with our other unsecured obligations.

We used the proceeds from the Notes for general corporate purposes, including the repayment of a portion of amounts outstanding under the Uncommitted Credit Facility, the Commercial Paper Program, the Credit Facility, and the Term Loan Facility.

As a result of the Term Loan Facility repayment, we incurred a non-cash loss on the early extinguishment of debt related to the ratable portion of unamortized deferred issuance costs of $ 0.2 million.

Interest Rate Swap and Lock Agreements

5 unchanged sentences

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

As of September 30, 2022, these swap agreements had a

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

total notional value of $ 300.0 million and mature in May 2023.

As of March 31, 2023, 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 %.

3 unchanged sentences

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 September 30, 2022 and December 31, 2021, these free-standing derivatives were reflected at their fair value of a $ 1.2 million liability and a $ 3.9 million asset, respectively, and are included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets.

For the three and nine months ended September 30, 2022, we recognized losses of $ 0.8 million and $ 5.2 million, respectively, and for the three and nine months ended September 30, 2021, we recognized losses of $ 0.8 million and $ 2.8 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives.

As of September 30, 2022 and December 31, 2021, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected at their fair value of a $ 1.5 million liability and a $ 4.7 million asset, respectively, and are included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets.

As of March 31, 2023 and December 31, 2022, these free-standing derivatives were reflected at their fair value of a $ 0.4 million and a $ 1.0 million liability, respectively, and are included in other accrued liabilities in our consolidated balance sheets.

For the three months ended March 31, 2023 and 2022, we recognized a gain of $ 0.7 million and a loss of $ 2.7 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives.

As of March 31, 2023 and December 31, 2022, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected at their fair value of a $ 0.4 million and $ 1.2 million liability, respectively, and are included in other accrued liabilities 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 $ 0.4 million and $ 2.0 million during the three months ended September 30, 2022 and 2021, respectively, and net interest income of $ 3.7 million and $ 5.9 million during the nine months ended September 30, 2022 and 2021, respectively, related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.

For the three months ended September 30, 2022 and 2021, we recognized gains of $ 0.1 million and $ 0.9 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and offsetting losses of $ 1.0 million and $ 1.0 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

For the nine months ended September 30, 2022 and 2021, we recognized gains of $ 4.1 million and $ 3.5 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and offsetting losses of $ 6.2 million and $ 3.3 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three and nine months ended September 30, 2022 and 2021 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

We recognized net interest expense of $ 1.4 million and net interest income of $ 1.9 million during the three months ended March 31, 2023 and 2022, respectively, related to net swap settlements for these interest rate swap agreements, which is included in interest expense in our consolidated statements of income.

For the three months ended March 31, 2023 and 2022, we recognized a loss of $ 1.8 million and a gain of $ 2.7 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes and an offsetting gain of $ 0.8 million and an offsetting loss of $ 3.3 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

The difference of these fair value changes for the three months ended March 31, 2023 and 2022 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

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

2 unchanged sentences

Upon the expected issuance of senior notes, we terminate the interest rate locks and settle with our counterparties.

These transactions were accounted for as cash flow hedges.

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

These transactions are accounted for as cash flow hedges.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

As of September 30, 2022 and December 31, 2021, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 22.6 million and $ 25.8 million, respectively, net of tax.

As of March 31, 2023 and December 31, 2022, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 20.4 million and $ 21.4 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.

For the three and nine months ended September 30, 2022, we recognized losses, net of tax, of $ 1.1 million and $ 3.2 million, respectively, as a result of this amortization.

For the three and nine months ended September 30, 2021, we recognized losses of $ 1.2 million and $ 3.5 million, respectively.

Over the next 12 months, we expect to amortize approximately $ 4.0 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

For the three months ended March 31, 2023 and 2022, we recognized losses, net of tax, of $ 1.0 million and $ 1.1 million, respectively, as a result of this amortization.

Over the next 12 months, we expect to amortize $ 3.7 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 2022 Interest Rate Swap has a notional value of $ 380 million as of March 31, 2023.

The interest rate swap matures in November 2026.

2 unchanged sentences

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

1 unchanged sentence

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 September 30, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $ 38.5 million and is included in other assets in our consolidated balance sheets.

For the three and nine months ended September 30, 2022, we recognized unrealized gains of $ 9.1 million and $ 8.1 million, respectively, in accumulated other comprehensive income for the 2022 Interest Rate Swap.

For both the three and nine months ended September 30, 2022, we recognized gains, net of tax, of $ 1.1 million on the change in fair value of the 2022 Interest Rate Swap.

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

As of September 30, 2022, the 2022 Interest Rate Swap was recorded as a component of accumulated other income of $ 7.0 million, net of tax.

Over the next 12 months, we expect to amortize approximately $ 2 million, net of tax, from accumulated other comprehensive income as an offset to interest expense in the period in which payments are settled.

As of March 31, 2023, the 2022 Interest Rate Swap was recorded at its fair value of $ 30.0 million and is included in other assets in our consolidated balance sheets.

For the three months ended March 31, 2023, we recognized an unrealized gain of $ 3.5 million in accumulated other comprehensive loss for the 2022 Interest Rate Swap.

As of March 31, 2023 and December 31, 2022, the 2022 Interest Rate Swap was recorded as a component of accumulated other comprehensive loss of $ 5.0 million and $ 5.1 million, respectively, 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 the three months ended March 31, 2023, we recognized a gain, net of tax, of $ 3.6 million as a result of this amortization.

Over the next 12 months, we expect to amortize approximately $ 4 million, net of tax, from accumulated other comprehensive loss as an offset to interest expense in the period in which payments are settled.

Contemporaneously with the issuance of our 5.000 % Notes in March 2023, we entered into interest rate lock agreements with an aggregate notional value of $ 150.0 million.

At the time of the issuance, we terminated the forward-starting interest rate swaps.

It was determined the forward interest rates increased between the trade dates and the reporting date.

Therefore, we were determined to be in a "net receive" position under the swaps.

At the time of the issuance, no ineffectiveness was recorded due to the changes in assumptions.

Thus, we recorded the $ 1.7 million, net of tax, settlement as a component of other comprehensive loss to be amortized over the life of the senior notes using the effective interest method.

Over the next 12 months, we expect to amortize $ 0.1 million, net of tax, from accumulated other comprehensive loss as an offset to interest expense, representing a yield adjustment of our senior notes.

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

5 unchanged sentences

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

As of September 30, 2022 and December 31, 2021, the fair values of the 2019 Extended Interest Rate Locks was an asset of $ 11.4 million and a liability of $ 20.9 million, respectively, which were included in other assets and other long-term liabilities, respectively, in our consolidated balance sheets.

As of September 30, 2022, the fair value of the 2020 Extended Interest Rate Locks were an asset of $ 64.2 million and a liability of $ 29.0 million, which were included in other assets and other long-term liabilities, respectively, in our consolidated balance sheet.

As of September 30, 2022 and December 31, 2021 the fair value of the 2019 Offsetting Interest Rate Swap was a liability of $ 19.1 million and an asset of $ 11.1 million, which were included in other long-term liabilities and other assets, respectively, in our consolidated balance sheet.

As of September 30, 2022 and December 31, 2021, the fair value of the 2020 Offsetting Interest Rate Swap was a liability of $ 86.1 million and $ 0.8 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.

For the three and nine months ended September 30, 2022, we recognized gains of $ 40.2 million and $ 115.0 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 39.7 million and $ 112.8 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

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

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 September 30, 2022 and December 31, 2021 we had $ 1,181.9 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 $ 30.0 million and $ 17.2 million

As of March 31, 2023 and December 31, 2022, the fair values of the Extended Interest Rate Locks were assets of $ 59.9 million and $ 69.8 million, respectively, which were included in other assets in our consolidated balance sheets.

As of March 31, 2023

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

was incurred and reimbursed to us as of September 30, 2022 and December 31, 2021, respectively .

As of September 30, 2022 and December 31, 2021 , we had $ 121.7 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.

and December 31, 2022 the fair value of the Offsetting Interest Rate Swaps were liabilities of $ 86.9 million and $ 99.7 million, respectively, which were included in other long-term liabilities in our consolidated balance sheet.

For the three months ended March 31, 2023 and 2022, we recognized losses of $ 13.8 million and gains of $ 53.1 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $ 12.7 million and offsetting losses of $ 51.8 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

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

Tax-Exempt Financings

As of March 31, 2023 and December 31, 2022 we had $ 1,182.2 million and $ 1,182.0 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2023 to 2051.

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

2 unchanged sentences

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

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

Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of March 31, 2023 and December 31, 2022.

Finance Leases

We had finance lease liabilities of $ 273.9 million and $ 249.4 million as of September 30, 2022 and December 31, 2021, respectively, with maturities ranging from 2023 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three and nine months ended September 30, 2022 was 17.9 % and 21.8 %, respectively.

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

Net cash paid for income taxes was $ 90.5 million and $ 182.1 million for the nine months ended September 30, 2022 and 2021, respectively.

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, we do not believe it will have a material effect on our consolidated financial statements.

We had finance lease liabilities of $ 244.6 million and $ 247.5 million as of March 31, 2023 and December 31, 2022, respectively, with maturities ranging from 2023 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three months ended March 31, 2023 and 2022 was 26.5 % and 25.5 %, respectively.

Net cash paid for income taxes was $ 7.7 million and $ 3.7 million for the three months ended March 31, 2023 and 2022, respectively.

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

4 unchanged sentences

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

As of September 30, 2022, the valuation allowance associated with our state loss carryforwards was approximately $ 38 million.

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

As of March 31, 2023, the valuation allowance associated with our state loss carryforwards was approximately $ 42 million.

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

7 unchanged sentences

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

As of September 30, 2022, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

As of March 31, 2023, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

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

As of September 30, 2022, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 14.6 million related to our uncertain tax positions.

As of March 31, 2023, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 17.0 million related to our uncertain tax positions.

REPUBLIC SERVICES, INC.

10 unchanged sentences

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

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

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

2022 2021 2022 2021

Stock repurchase activity during the three months ended March 31, 2023 and 2022 follows (in millions, except per share amounts):

Three Months Ended March 31,

Number of shares repurchased — 1.6

1 unchanged sentence

Weighted average cost per share $ — $ 124.02

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

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

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

As of September 30, 2022, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.5 billion.

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

Cash dividends declared were $ 447.0 million for the nine months ended September 30, 2022.

As of September 30, 2022, we recorded a quarterly dividend payable of $ 156.4 million to shareholders of record at the close of business on October 3, 2022.

As of March 31, 2023 and 2022, no repurchased shares were pending settlement.

As of March 31, 2023, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.5 billion.

In February 2023, our Board of Directors approved a quarterly dividend of $ 0.495 per share.

Cash dividends declared were $ 156.5 million for the three months ended March 31, 2023.

As of March 31, 2023, we recorded a quarterly dividend payable of $ 156.5 million to shareholders of record at the close of business on April 3, 2023.

Earnings per Share

5 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

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

2022 2021 2022 2021

Earnings per share for the three months ended March 31, 2023 and 2022 are calculated as follows (in thousands, except per share amounts):

Three Months Ended March 31,

Basic earnings per share:

10 unchanged sentences

Unvested PSU awards

396 393 380 306

Weighted average common and common equivalent shares outstanding

1 unchanged sentence

Diluted earnings per share $ 1.21 $ 1.11

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT

A summary of changes in accumulated other comprehensive income (loss), net of tax, by component, for the nine months ended September 30, 2022 follows:

During each of the three months ended March 31, 2023 and 2022, there were less than 0.1 million antidilutive securities outstanding.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME BY COMPONENT

A summary of changes in accumulated other comprehensive income (loss), net of tax, by component, for the three months ended March 31, 2023 follows:

Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Translation Total

1 unchanged sentence

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

Other comprehensive income (loss) before reclassifications 8.1 — ( 6.2 ) 1.9

Other comprehensive income before reclassifications 5.2 0.2 — 5.4

Amounts reclassified from accumulated other comprehensive loss ( 2.6 ) — — ( 2.6 )

Net current period other comprehensive income (loss) 10.2 — ( 6.2 ) 4.0

Balance as of September 30, 2022

$ ( 15.6 ) $ 11.2 $ ( 6.2 ) $ ( 10.6 )

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

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

Net current period other comprehensive income 2.6 0.2 — 2.8

Balance as of March 31, 2023

$ ( 13.7 ) $ 9.4 $ ( 5.0 ) $ ( 9.3 )

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

(Loss) gain on cash flow hedges:

A summary of reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022 follows:

Three Months Ended March 31,

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

Gain (loss) on cash flow hedges:

Terminated interest rate locks $ ( 1.4 ) $ ( 1.5 ) Interest expense

1 unchanged sentence

Total before tax 3.5 ( 1.5 )

Tax benefit — 0.4 0.8 1.2

Net of tax $ — $ ( 1.2 ) $ ( 2.1 ) $ ( 3.5 )

Pension gains:

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

Tax expense — — — ( 0.2 )

Net of tax — — — 0.7

Total loss reclassified into earnings, net of tax $ — $ ( 1.2 ) $ ( 2.1 ) $ ( 2.8 )

Tax (provision) benefit ( 0.9 ) 0.4

Total income (loss) reclassified into earnings, net of tax $ 2.6 $ ( 1.1 )

REPUBLIC SERVICES, INC.

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FINANCIAL INSTRUMENTS

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

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three months ended March 31, 2023 and 2022 follows (in millions):

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

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

2022 2021 2022 2021

Interest Expense Interest Expense Interest Expense Interest Expense

Three Months Ended March 31,

Interest Expense Interest Expense

Total amount of expense line items presented in the consolidated statements of income in which the effects of hedging relationships and derivative instruments are recorded $ ( 126.7 ) $ ( 83.5 )

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

Gain on fair value hedging relationships:

(Loss) gain on fair value hedging relationships:

Interest rate swaps:

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Interest rate swaps:

Loss on change in fair value of free-standing derivative instruments $ ( 0.8 ) $ ( 0.8 ) $ ( 5.2 ) $ ( 2.8 )

Gain (loss) on change in fair value of free-standing derivative instruments $ 0.7 $ ( 2.7 )

Interest rate contract:

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

Net (loss) gain on change in fair value of free-standing derivative instruments $ ( 1.1 ) $ 1.3

Fair Value Measurements

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

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

September 30, 2022

As of March 31, 2023 and December 31, 2022, our assets and liabilities that are measured at fair value on a recurring basis include the following:

March 31, 2023

Carrying Amount Total Quoted

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Total assets $ 188.2 $ 188.2 $ 40.0 $ 148.2 $ —

Derivative and hedging liabilities - other long-term liabilities $ 107.9 $ 107.9 $ — $ 107.9 $ —

Derivative and hedging liabilities - other accrued liabilities and other long-term liabilities $ 87.7 $ 87.7 $ — $ 87.7 $ —

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

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

Derivative and hedging 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

Total liabilities $ 167.1 $ 167.1 $ — $ 102.0 $ 65.1

The carrying value of our total debt was $ 11.6 billion and $ 9.6 billion as of September 30, 2022 and December 31, 2021, respectively, and the fair value of our total debt was $ 10.8 billion and $ 10.3 billion, respectively.

The carrying value of our total debt was $ 11.9 billion and $ 11.8 billion as of March 31, 2023 and December 31, 2022, respectively, and the fair value of our total debt was $ 11.4 billion and $ 11.1 billion, respectively.

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

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

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

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of March 31, 2023 and December 31, 2022.

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

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

As of September 30, 2022, the Sonoma contingent consideration represents the fair value of $ 60.6

As of March 31, 2023, 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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

capacity of the landfill.

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

During the nine months ended September 30, 2022, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business.

During the three months ended March 31, 2023, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business.

There were no changes to the estimate of fair value.

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

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

Group 2 is our recycling and solid waste business operating 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 in geographic areas located across the United States and Canada.

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

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

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

Prior to the third quarter of 2022, our environmental 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 three months ended September 30, 2022 and 2021 follows:

Summarized financial information concerning our reportable segments for the three months ended March 31, 2023 and 2022 follows:

Group 1 Group 2 Recycling & Solid Waste Subtotal Group 3

(Environmental Solutions) Corporate entities and other Total

Three Months Ended September 30, 2022

Gross Revenue $ 1,876.2 $ 1,803.6 $ 3,679.8 $ 411.0 $ 62.4 $ 4,153.2

Intercompany Revenue ( 285.2 ) ( 242.8 ) ( 528.0 ) ( 11.3 ) ( 16.1 ) ( 555.4 )

Net Revenue $ 1,591.0 $ 1,560.8 $ 3,151.8 $ 399.7 $ 46.3 $ 3,597.8

Gross Adjusted EBITDA $ 506.6 $ 441.1 $ 947.7 $ 89.2 $ 14.4 $ 1,051.3

Adjusted EBITDA allocations 15.0 14.0 29.0 ( 14.6 ) ( 14.4 ) —

Net Adjusted EBITDA $ 521.6 $ 455.1 $ 976.7 $ 74.6 $ — $ 1,051.3

Adjusted EBITDA margin 32.3 % 28.7 % 30.5 % 18.7 % — % 29.2 %

Capital Expenditures $ 199.1 $ 140.2 $ 339.3 $ 35.2 $ ( 0.5 ) $ 374.0

Total Assets $ 12,199.9 $ 10,233.8 $ 22,433.7 $ 3,991.7 $ 1,975.6 $ 28,401.0

Three Months Ended September 30, 2021

Gross Revenue $ 1,719.5 $ 1,626.5 $ 3,346.0 $ 60.2 $ 55.1 $ 3,461.3

Intercompany Revenue ( 277.9 ) ( 238.5 ) ( 516.4 ) ( 3.2 ) ( 7.8 ) ( 527.4 )

Net Revenue $ 1,441.6 $ 1,388.0 $ 2,829.6 $ 57.0 $ 47.3 $ 2,933.9

Gross Adjusted EBITDA $ 481.8 $ 389.7 $ 871.5 $ 12.8 $ 10.7 $ 895.0

Adjusted EBITDA allocations 5.6 5.1 10.7 — ( 10.7 ) —

Net Adjusted EBITDA $ 487.4 $ 394.8 $ 882.2 $ 12.8 $ — $ 895.0

Adjusted EBITDA margin 33.2 % 28.0 % 30.7 % 22.5 % — % 30.5 %

Capital Expenditures $ 144.3 $ 141.1 $ 285.4 $ 9.3 $ 0.9 $ 295.6

Total Assets $ 12,018.7 $ 9,723.4 $ 21,742.1 $ 852.2 $ 1,834.6 $ 24,428.9

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Summarized financial information concerning our reportable segments for the nine months ended September 30, 2022 and 2021 follows:

Group 1 Group 2 Recycling & Solid Waste Subtotal Group 3 Corporate entities and other Total

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Gross Revenue $ 1,840.3 $ 1,818.8 $ 3,659.1 $ 430.2 $ 57.9 $ 4,147.2

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Total Assets $ 12,357.4 $ 10,614.3 $ 22,971.7 $ 4,027.0 $ 2,082.7 $ 29,081.4

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Gross Revenue $ 1,671.5 $ 1,625.7 $ 3,297.2 $ 108.9 $ 60.0 $ 3,466.1

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

Revenue and overhead costs of Corporate entities and other are primarily allocated to our Group 1 and Group 2 reportable segments as we continue to integrate the acquisitions included in our Group 3 reportable segment.

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 on business divestitures, restructuring expenses, withdrawal costs from multi-employer pension funds, and accelerated vesting of compensation expense related to the 2021 CEO transition.

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

This presentation is consistent

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table calculates EBITDA and EBITDA margin for the three and nine months ended September 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

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

2022 2021 2022 2021

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, (income) losses on equity method investments, loss on extinguishment of debt, and restructuring expenses.

The following table calculates EBITDA and EBITDA margin for the three months ended March 31, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

Net income attributable to Republic Services, Inc.

$ 383.9 10.7 % $ 352.0 11.9 %

Net income (loss) attributable to noncontrolling interests — 0.5 ( 0.2 ) 1.9

Net loss attributable to noncontrolling interests — ( 0.1 )

Provision for income taxes 138.2 120.3

Other expense (income), net 0.3 0.9 6.5 ( 0.6 )

Other (income) expense, net ( 2.5 ) 1.6

Interest income ( 1.4 ) ( 0.5 )

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EBITDA and EBITDA margin $ 1,027.7 28.7 % $ 888.9 29.9 %

The following table calculates adjusted EBITDA and adjusted EBITDA margin for the three and nine months ended September 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue):

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

2022 2021 2022 2021

The following table calculates adjusted EBITDA and adjusted EBITDA margin for the three months ended March 31, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

EBITDA $ 1,027.7 28.7 % $ 888.9 29.9 %

Loss from unconsolidated equity method investment 51.8 15.1 69.2 44.0

Withdrawal costs - multiemployer pension funds — — 2.2 —

(Income) loss from unconsolidated equity method investment ( 1.0 ) 3.8

Loss on extinguishment of debt 0.2 —

Restructuring charges 5.5 6.0

Gain on business divestitures and impairments, net ( 5.2 ) — ( 5.3 ) ( 0.2 )

US Ecology, Inc.

acquisition integration and deal costs 7.6 4.8

Accelerated vesting of compensation expense for CEO transition — 4.1 — 19.5

Total adjustments 12.3 14.6

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Our operations primarily consist of providing environmental services.

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

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

2022 2021 2022 2021

The following table disaggregates our revenue by service line for the three months ended March 31, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

$ 685.1 19.1 % $ 627.9 21.1 %

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

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

Substantially all of the deferred revenue recognized as of December 31, 2022 was recognized as revenue during the three months ended March 31, 2023 when the service was performed.

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

Revenue Recognition

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

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

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, 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.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

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

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

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 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 practical expedient to recognize revenue in the amount to which we have the right to invoice.

Deferred Revenue

We record deferred revenue related to our environmental solutions businesses when cash payments are received, or advance billings are charged, prior to performance of services, such as waste that has been received but not yet treated or disposed.

Revenue is recognized when these services are performed.

During the three months ended March 31, 2023, we recognized approximately $ 14 million of revenue that was included in the deferred revenue balance at December 31, 2022.

Deferred Contract Costs

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

As of September 30, 2022 and December 31, 2021, we recognized $ 80.2 million and $ 80.6 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and nine months ended September 30, 2022, we amortized $ 3.2 million and $ 10.0 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.4 million and $ 4.4 million, respectively, of other deferred contract costs as a reduction of revenue.

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

As of March 31, 2023 and December 31, 2022, we recognized $ 80.6 million and $ 80.2 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three months ended March 31, 2023, we amortized $ 3.6 million of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.3 million of other deferred contract costs as a reduction of revenue.

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

Credit Losses

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

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

The following table reflects the activity in our allowance for doubtful accounts for the three months ended March 31, 2023 and 2022:

Balance at beginning of year $ 51.9 $ 38.5

2 unchanged sentences

Balance at end of period $ 58.8 $ 44.0

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

COMMITMENTS AND CONTINGENCIES

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

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

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

We have recorded an aggregate accrual of approximately $ 10 million relating to our outstanding legal proceedings as of March 31, 2023.

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

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

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

If we had used the high ends of such ranges, our aggregate potential liability would be approximately $ 7 million higher than the amount recorded as of September 30, 2022.

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 March 31, 2023.

Multiemployer Pension Plans

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

September 30, 2022 December 31, 2021 September 30, 2021 December 31, 2020

March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2021

Cash and cash equivalents $ 132.2 $ 143.4 $ 39.0 $ 29.0

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Cash, cash equivalents, restricted cash and restricted cash equivalents $ 206.7 $ 214.3 $ 97.1 $ 105.6

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes our restricted cash and marketable securities:

September 30, 2022 December 31, 2021

Financing proceeds $ — $ 12.4

March 31, 2023 December 31, 2022

Capping, closure and post-closure obligations $ 40.2 $ 39.1

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Off-Balance Sheet Arrangements

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

We have no off-balance sheet debt or similar obligations, other than short-term operating

leases and financial assurances, which are not classified as debt.

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

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements