What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-04-28 · 255 added, 185 removed, 739 unchanged (37% of the section changed)

3 unchanged sentences

(in millions, except per share data)

March 31, December 31,

June 30, December 31,

Current assets:

46 unchanged sentences

(in millions, except per share data)

Three Months Ended March 31,

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

2023 2022 2023 2022

Revenue $ 3,725.9 $ 3,413.6 $ 7,307.0 $ 6,383.7

3 unchanged sentences

Selling, general and administrative 396.0 390.2 775.2 698.0

Withdrawal costs - multiemployer pension funds

Restructuring charges 15.5 5.9 21.0 11.9

2 unchanged sentences

Loss on extinguishment of debt — — ( 0.2 ) —

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

Loss from unconsolidated equity method investments ( 3.6 ) ( 13.6 ) ( 2.7 ) ( 17.4 )

Interest income 1.6 0.7 3.0 1.2

Other income (expense), net 2.5 ( 1.6 )

Other (expense) income, net ( 0.6 ) ( 4.6 ) 1.9 ( 6.2 )

Income before income taxes 580.2 478.1 1,102.3 950.3

1 unchanged sentence

Net income 427.6 371.8 811.4 723.7

Net loss attributable to non-controlling interests in consolidated subsidiary

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

( 0.2 ) 0.1 ( 0.2 ) 0.2

Net income attributable to Republic Services, Inc.

8 unchanged sentences

Weighted average common and common equivalent shares outstanding

317.3 317.0 317.2 317.1

Cash dividends per common share $ 0.495 $ 0.460 $ 0.990 $ 0.920

3 unchanged sentences

(in millions)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income $ 427.6 $ 371.8 $ 811.4 $ 723.7

5 unchanged sentences

Change in funded status of pension plan obligations

Foreign currency activity:

Unrealized (loss) gain on foreign currency translation ( 2.5 ) 0.1 ( 2.5 ) 0.1

Other comprehensive income, net of tax 2.6 0.1 5.4 1.2

20 unchanged sentences

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

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

Net income — — — 427.4 — — — 0.2 427.6

Other comprehensive income — — — — — — 2.6 — 2.6

Cash dividends declared — — — ( 156.6 ) — — — — ( 156.6 )

Issuances of common stock 0.1 — 4.5 — — ( 0.5 ) — — 4.0

Stock-based compensation — — 10.6 ( 0.8 ) — — — — 9.8

Balance as of June 30, 2023 320.7 $ 3.2 $ 2,873.5 $ 7,852.7 ( 4.3 ) $ ( 519.0 ) $ ( 6.7 ) $ 1.0 $ 10,204.7

Republic Services, Inc.

5 unchanged sentences

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

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

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

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

5 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 (loss) — — — 371.9 — — — ( 0.1 ) 371.8

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

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

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

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

Balance as of June 30, 2022 320.1 $ 3.2 $ 2,818.9 $ 6,907.1 ( 4.1 ) $ ( 500.4 ) $ ( 13.4 ) $ 0.6 $ 9,216.0

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash provided by operating activities:

8 unchanged sentences

Gain on disposition of assets and asset impairments, net ( 4.7 ) ( 3.1 )

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

Loss from unconsolidated equity method investments 2.7 17.4

Other non-cash items ( 1.5 ) 6.3

25 unchanged sentences

Contingent consideration payments ( 11.6 ) ( 2.9 )

Cash used in financing activities ( 42.0 ) ( 314.7 )

Cash (used in) provided by financing activities ( 33.7 ) 1,798.9

Effect of foreign exchange rate changes on cash 0.5 ( 0.1 )

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

Increase in cash, cash equivalents, restricted cash and restricted cash equivalents 58.7 78.1

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

9 unchanged sentences

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.

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

19 unchanged sentences

our liabilities for environmental remediation, multiemployer pension funds, employee benefit plans, deferred taxes, uncertain tax positions, and insurance reserves;

and our estimates of the fair values of assets acquired and liabilities assumed in any acquisition.

and our estimates of the fair values of assets acquired and liabilities assumed in acquisitions.

Each of these items is discussed in more detail in our description of our significant accounting policies in Note 2, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

11 unchanged sentences

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.

As of June 30, 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 instead of a payment based on its original contracted terms (which, depending on the vendor, could extend up to 90 days or longer).

As of June 30, 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 businesses during the three months ended March 31, 2023 and 2022.

We acquired various environmental services businesses during the six months ended June 30, 2023 and 2022.

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

2 unchanged sentences

$ 918.7 $ 2,516.6

Fair value, future minimum finance lease payments

Total $ 927.3 $ 2,542.3

1 unchanged sentence

Accounts receivable

$ 26.1 $ 250.5

Prepaid expenses 1.0 15.5

Landfill development costs

Property and equipment

Operating right-of-use lease assets

Interest rate swap — 29.1

Accounts payable

( 5.3 ) ( 109.2 )

Deferred revenue

( 8.1 ) ( 25.6 )

Environmental remediation liabilities

( 5.6 ) ( 92.4 )

Closure and post-closure liabilities

( 10.5 ) ( 88.9 )

Operating right-of-use lease liabilities

( 1.7 ) ( 55.8 )

Deferred income tax liabilities ( 9.2 ) ( 151.0 )

5 unchanged sentences

Other intangible assets

$ 103.0 $ 162.9

674.0 1,368.4

Total allocated $ 777.0 $ 1,531.3

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

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

Accordingly, the purchase price allocations are subject to change.

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

For the acquisitions that closed during the six months ended June 30, 2023, we expect that a majority of 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.

2 unchanged sentences

(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 (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.

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

hazardous and specialty waste.

As of June 30, 2023, we finalized the purchase price allocation.

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

During the six months ended June 30, 2023 and 2022 , we incurred $ 18.2 million and $ 56.6 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology.

During the three months ended June 30, 2023 and 2022 , we incurred $ 10.6 million and $ 51.9 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 and integrate the business.

In June 2023, we acquired a vertically-integrated set of operations located primarily in Colorado from GFL Environmental Inc., including recycling, hauling, transfer and landfill operations.

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 tangible and intangible assets acquired as well as certain landfill 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 substantially complete by the end of 2023.

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 $ 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 .

In exchange for our non-controlling interests, we made capital contributions of $ 1.5 million and $ 121.0 million, which were recorded to other assets in our June 30, 2023 and 2022 consolidated balance sheets, respectively.

During the three and six months ended June 30, 2023, we decreased the carrying value of these investments by $ 4.0 million and $ 2.6 million, respectively, and during the three and six months ended June 30, 2022, we increased the carrying value of these investments by $ 11.9 million and $ 12.2 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 no benefits for the three and six months ended June 30, 2023, and benefits of approximately $ 24 million and $ 25 million, respectively, for the three and six months ended June 30, 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 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.

During the three and six months ended June 30, 2023, we incurred restructuring charges of $ 15.5 million and $ 21.0 million, respectively, and during the three and six months ended June 30, 2022, we incurred restructuring charges of $ 5.9 million and $ 11.9 million, respectively.

Of the 2023 charges, $ 9.4 million related to the early termination of certain leases and $ 6.1 million related to the redesign of our asset management, and customer and order 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 2022.

We paid $ 26.1 million, of which $ 15.8 million related to the early termination of certain leases, during 2023 and $ 8.3 million during 2022 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 March 31, 2023

Acquisitions Divestitures Adjustments to Acquisitions Balance as of June 30, 2023

Group 1 $ 6,637.9 $ 472.1 $ — $ — $ 7,110.0

2 unchanged sentences

Total $ 14,451.5 $ 674.0 $ ( 0.1 ) $ 228.2 $ 15,353.6

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 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.

Adjustments to acquisitions during the six months ended June 30, 2023 primarily related to changes in our valuation of assets acquired and liabilities assumed in connection with our acquisition of US Ecology.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Other Intangible Assets, Net

4 unchanged sentences

Acquisitions Adjustments

Balance as of March 31, 2023

Balance as of June 30, 2023

Balance as of December 31, 2022

Additions Charged to Expense Adjustments

Balance as of March 31, 2023

Other Intangible Assets, Net as of March 31, 2023

Balance as of June 30, 2023

Other Intangible Assets, Net as of June 30, 2023

Customer relationships

5 unchanged sentences

Total $ 1,158.4 $ 103.0 $ ( 662.3 ) $ 599.1 $ ( 811.2 ) $ ( 30.1 ) $ 673.7 $ ( 167.6 ) $ 431.5

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 March 31, 2023 and December 31, 2022 follows:

Prepaid expenses $ 110.8 $ 114.3

Income taxes receivable 107.7 214.0

A summary of prepaid expenses and other current assets as of June 30, 2023 and December 31, 2022 follows:

Inventories $ 96.1 $ 96.6

Prepaid expenses 86.7 114.3

Other non-trade receivables 54.5 59.8

Income taxes receivable 47.2 214.0

Reinsurance receivable 35.0 31.9

2 unchanged sentences

Total $ 340.1 $ 536.5

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

A summary of other assets as of June 30, 2023 and December 31, 2022 follows:

Investments $ 337.3 $ 281.4

9 unchanged sentences

Total $ 1,065.2 $ 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 March 31, 2023 and December 31, 2022 follows:

A summary of other accrued liabilities as of June 30, 2023 and December 31, 2022 follows:

Accrued payroll and benefits $ 264.8 $ 342.6

Insurance reserves, current 210.9 187.5

Accrued dividends 156.5 156.4

Accrued fees and taxes 163.4 168.5

Accrued dividends 156.6 156.4

Operating right-of-use lease liabilities, current 50.9 57.9

3 unchanged sentences

Total $ 1,036.5 $ 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 March 31, 2023 and December 31, 2022 follows:

A summary of other long-term liabilities as of June 30, 2023 and December 31, 2022 follows:

Operating right-of-use lease liabilities $ 198.7 $ 238.0

4 unchanged sentences

Withdrawal liability - multiemployer pension funds 19.8 20.0

Legal settlement reserves 2.0 2.1

Other 38.0 59.8

1 unchanged sentence

LANDFILL AND ENVIRONMENTAL COSTS

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.

As of June 30, 2023, we owned or operated 208 active landfills with total available disposal capacity estimated to be 5.1 billion in-place cubic yards.

Additionally, we had post-closure responsibility for 126 closed landfills.

Accrued Landfill and Environmental Costs

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

A summary of accrued landfill and environmental liabilities as of June 30, 2023 and December 31, 2022 follows:

Landfill final capping, closure and post-closure liabilities $ 1,843.3 $ 1,786.4

3 unchanged sentences

Long-term portion $ 2,211.0 $ 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 three months ended March 31, 2023 and 2022:

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the six months ended June 30, 2023 and 2022:

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

4 unchanged sentences

Accretion expense 48.6 44.1

Foreign currency translation — ( 0.3 )

Asset retirement obligation liabilities, end of period 1,843.3 1,657.2

3 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 March 31, 2023 would be approximately $ 374 million higher than the amount recorded.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of June 30, 2023 would be approximately $ 369 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 three months ended March 31, 2023 and 2022:

The following table summarizes the activity in our environmental remediation liabilities for the six months ended June 30, 2023 and 2022:

Environmental remediation liabilities, beginning of year $ 487.5 $ 454.9

1 unchanged sentence

Accretion expense (non-cash interest expense) 9.0 8.6

Acquisitions, net of divestitures and other adjustments 32.4 94.5

Environmental remediation liabilities, end of period 507.7 536.9

2 unchanged sentences

Bridgeton Landfill.

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.

During the six months ended June 30, 2023, we paid $ 5.9 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 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.

As of June 30, 2023, the remediation liability recorded for this site was $ 81.2 million, of which approximately $ 9 million is expected to be paid during the remainder of 2023.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

West Lake Landfill Superfund Site .

9 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The carrying value of our credit facilities, finance leases and long-term debt as of March 31, 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.

The carrying value of our credit facilities, finance leases and long-term debt as of June 30, 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.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value

35 unchanged sentences

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.

During the three and six months ended June 30, 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.

2 unchanged sentences

Credit Facilities

Uncommitted Credit Facility

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

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

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

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

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

As of June 30, 2023 we had $ 54.6 million of borrowings outstanding under our Uncommitted Credit Facility.

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

The Credit Facility

8 unchanged sentences

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 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.

As of June 30, 2023, C$ 232 million was outstanding against the Canadian Sublimit, with an interest rate of 6.007 %.

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 $ 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 $ 2,151.8 million and $ 1,402.4 million as of March 31, 2023 and December 31, 2022, 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 Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties.

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

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

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

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

We had $ 175.1 million (all related to Canadian-denominated loans) and $ 250.0 million outstanding under the Credit Facility as of June 30, 2023 and December 31, 2022, respectively.

We had $ 336.5 million and $ 347.6 million of letters of credit outstanding under the Credit Facility as of June 30, 2023 and December 31, 2022, respectively.

We also had $ 750.0 million and $ 1.0 billion of principal borrowings outstanding under the commercial paper program as of June 30, 2023 and December 31, 2022, respectively.

As a result, availability under our Credit Facility was $ 1,738.4 million and $ 1,402.4 million as of June 30, 2023 and December 31, 2022, respectively.

Term Loan Facility

1 unchanged sentence

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 for borrowings outstanding is 5.707 %.

The weighted average interest rate for borrowings outstanding as of June 30, 2023 is 6.002 %.

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.

We had $ 700.0 million and $ 1.0 billion of borrowings outstanding under the Term Loan Facility as of June 30, 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 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

The weighted average interest rate for borrowings outstanding as of June 30, 2023 is 5.287 % with a weighted average maturity of 11 days.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

average maturity of 27 days.

We had $ 750.0 million and $ 1.0 billion principal value of commercial paper issued and outstanding under the program as of June 30, 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.

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

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

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

As of March 31, 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 %.

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.

These swap agreements settled in May 2023 along with our 4.750 % Notes and are no longer included in our consolidated balance sheet.

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

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

As of March 31, 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 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.

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

For the three and six months ended June 30, 2023, we recognized gains of $ 0.4 million and $ 1.0 million, respectively, and for the three and six months ended June 30, 2022, we recognized losses of $ 1.6 million and $ 4.3 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 December 31, 2022, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected as a $ 1.2 million liability and included in other accrued liabilities in our consolidated balance sheet.

We recognized net interest expense of $ 0.8 million and $ 2.2 million during the three and six months ended June 30, 2023 and net interest income of $ 1.4 million and $ 3.2 million during the three and six months ended June 30, 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 and six months ended June 30, 2023, we recognized losses of $ 0.5 million and $ 2.3 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting gains of $ 0.4 million and $ 1.2 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

For the three and six months ended June 30, 2022, we recognized gains of $ 1.3 million and $ 4.0 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting losses of $ 1.9 million and $ 5.2 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate.

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

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

As of March 31, 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.

During the six months ended June 30, 2023, we recognized an unrealized gain in other comprehensive loss of $ 1.7 million, net of tax, related to terminated interest rate locks issued in conjunction with the issuance of our 5.000 % Notes in March 2023.

As of June 30, 2023 and December 31, 2022, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 17.7 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 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.

For the three months ended June 30, 2023 and 2022, we recognized losses, net of tax, of $ 1.0 million and $ 1.1 million, respectively.

For the six months ended June 30, 2023 and 2022, we recognized losses, net of tax, of $ 2.0 million and $ 2.2 million, respectively, as a result of this amortization.

Over the next 12 months, we expect to amortize $ 3.5 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.

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, an initial notional amount of $ 500 million relative to our Term Loan Facility and an initial fair value of $ 29.1 million.

The initial fair value is reclassified into earnings as non-cash interest expense on a systematic basis over the life of the interest rate swap.

As of June 30, 2023, the 2022 Interest Rate Swap has a notional value of $ 370 million.

The interest rate swap matures in November 2026.

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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 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.

As of June 30, 2023 and December 31, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $ 33.9 million and $ 36.0 million, respectively, and is included in other assets in our consolidated balance sheets.

For the three and six months ended June 30, 2023, we recognized unrealized gains of $ 7.3 million and $ 10.8 million, respectively, in accumulated other comprehensive loss for the 2022 Interest Rate Swap.

For both the three and six months ended June 30, 2022, we recognized an unrealized loss of $ 1.1 million, net of tax, related to the change in fair value of the 2022 Interest Rate Swap.

As of June 30, 2023 and December 31, 2022, the 2022 Interest Rate Swap was recorded as a gain within accumulated other comprehensive loss of $ 9.1 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.

During the three and six months ended June 30, 2023, we recognized a gain, net of tax, of $ 3.2 million and $ 6.8 million, respectively, as a result of this amortization.

For the three and six months ended June 30, 2022, we did not recognize any gains or losses related to this amortization.

Over the next 12 months, we expect to amortize approximately $ 7 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.

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

As of March 31, 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

As of June 30, 2023 and December 31, 2022, the fair values of the Extended Interest Rate Locks were assets of $ 69.0 million and $ 69.8 million, respectively, which were included in other assets in our consolidated balance sheets.

As of June 30, 2023 and

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

December 31, 2022, the fair value of the Offsetting Interest Rate Swaps were liabilities of $ 96.4 million and $ 99.7 million, respectively, which were included in other long-term liabilities in our consolidated balance sheet.

For the three months ended June 30, 2023 and 2022, we recognized gains of $ 9.2 million and $ 21.7 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 9.4 million and $ 21.3 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

For the six months ended June 30, 2023 and 2022, we recognized losses of $ 4.6 million and gains of $ 74.8 million on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $ 3.3 million and losses of $ 73.1 million respectively on the change in fair value of the Offsetting Interest Rate Swaps.

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

Tax-Exempt Financings

As of March 31, 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.

As of June 30, 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.

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

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

Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of June 30, 2023 and December 31, 2022.

Finance Leases

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.

As of June 30, 2023, we had finance lease liabilities of $ 252.2 million with maturities ranging from 2024 to 2063.

As of December 31, 2022, we had finance lease liabilities of $ 247.5 million with maturities ranging from 2023 to 2063.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2023 was 26.3 % and 26.4 %, respectively.

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

For the six months ended June 30, 2023 and 2022, net cash paid for income taxes was $ 88.0 million and $ 78.9 million, respectively.

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

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

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

As of June 30, 2023, the valuation allowance associated with our state loss carryforwards was approximately $ 42.7 million.

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

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

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

As of June 30, 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 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.

As of June 30, 2023, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 17.5 million related to our uncertain tax positions.

REPUBLIC SERVICES, INC.

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

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

Three Months Ended March 31,

Stock repurchase activity during the three and six months ended June 30, 2023 and 2022 follows (in millions, except per share amounts):

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

2023 2022 2023 2022

Number of shares repurchased — — — 1.6

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

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.

As of June 30, 2023 and 2022, no repurchased shares were pending settlement.

As of June 30, 2023, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.5 billion.

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

Cash dividends declared were $ 313.1 million for the six months ended June 30, 2023.

As of June 30, 2023, we recorded a quarterly dividend payable of $ 156.6 million to shareholders of record at the close of business on July 3, 2023.

Earnings per Share

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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,

Earnings per share for the three and six months ended June 30, 2023 and 2022 are calculated as follows (in thousands, except per share amounts):

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

2023 2022 2023 2022

Basic earnings per share:

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Unvested PSU awards

359 361 357 372

Weighted average common and common equivalent shares outstanding

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Diluted earnings per share $ 1.35 $ 1.17 $ 2.56 $ 2.28

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:

During both the three and six months ended June 30, 2023 and 2022, there were less than 0.1 million antidilutive securities outstanding.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT

A summary of changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2023 follows:

Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Translation Total

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

Other comprehensive income before reclassifications 5.2 0.2 — 5.4

Other comprehensive income (loss) before reclassifications 12.5 0.2 ( 2.5 ) 10.2

Amounts reclassified from accumulated other comprehensive loss ( 4.8 ) — — ( 4.8 )

Net current period other comprehensive income 2.6 0.2 — 2.8

Balance as of March 31, 2023

Net current period other comprehensive income (loss) 7.7 0.2 ( 2.5 ) 5.4

Balance as of June 30, 2023

$ ( 8.6 ) $ 9.4 $ ( 7.5 ) $ ( 6.7 )

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

A summary of reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2023 and 2022 follows:

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

2023 2022 2023 2022

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

Gain (loss) on cash flow hedges:

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FINANCIAL INSTRUMENTS

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

The effect of our hedging relationships and derivative instruments on the consolidated statements of income for the three and six months ended June 30, 2023 and 2022 follows (in millions):

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

Three Months Ended March 31,

Interest Expense Interest Expense

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

2023 2022 2023 2022

Interest Expense Interest Expense Interest Expense Interest Expense

Total amount of expense line items presented in the consolidated statements of income in which the effects of hedging relationships and derivative instruments are recorded $ ( 124.4 ) $ ( 94.0 ) $ ( 251.1 ) $ ( 177.5 )

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

As of March 31, 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

As of June 30, 2023 and December 31, 2022, our assets and liabilities that are measured at fair value on a recurring basis include the following:

June 30, 2023

Carrying Amount Total Quoted

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

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 carrying value of our total debt was $ 12.1 billion and $ 11.8 billion as of June 30, 2023 and December 31, 2022, respectively, and the fair value of our total debt was $ 11.5 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 March 31, 2023 and December 31, 2022.

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of June 30, 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 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

As of June 30, 2023, the Sonoma contingent consideration represents the fair value of $ 59.7 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining

REPUBLIC SERVICES, INC.

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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 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.

During the six months ended June 30, 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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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 March 31, 2023 and 2022 follows:

Summarized financial information concerning our reportable segments for the three months ended June 30, 2023 and 2022 follows:

Group 1 Group 2 Recycling & Solid Waste Subtotal Group 3

(Environmental Solutions) Corporate entities and other Total

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Gross Revenue $ 1,933.7 $ 1,907.5 $ 3,841.2 $ 424.9 $ 55.1 $ 4,321.2

Intercompany Revenue ( 299.4 ) ( 259.5 ) ( 558.9 ) ( 16.1 ) ( 20.3 ) ( 595.3 )

Revenue allocations 23.1 22.2 45.3 ( 10.5 ) ( 34.8 ) —

Net Revenue $ 1,657.4 $ 1,670.2 $ 3,327.6 $ 398.3 $ — $ 3,725.9

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Total Assets $ 13,024.0 $ 10,752.5 $ 23,776.5 $ 4,017.2 $ 2,029.6 $ 29,823.3

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Gross Revenue $ 1,793.8 $ 1,798.2 $ 3,592.0 $ 308.0 $ 55.4 $ 3,955.4

Intercompany Revenue ( 275.3 ) ( 245.6 ) ( 520.9 ) ( 11.9 ) ( 9.0 ) ( 541.8 )

Revenue allocations 24.5 23.7 48.2 ( 1.8 ) ( 46.4 ) —

Net Revenue $ 1,543.0 $ 1,576.3 $ 3,119.3 $ 294.3 $ — $ 3,413.6

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Total Assets $ 12,138.4 $ 10,292.6 $ 22,431.0 $ 3,973.0 $ 1,808.7 $ 28,212.7

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Summarized financial information concerning our reportable segments for the six months ended June 30, 2023 and 2022 follows:

Group 1 Group 2 Recycling & Solid Waste Subtotal Group 3

(Environmental Solutions) Corporate entities and other Total

Six Months Ended June 30, 2023

Gross Revenue $ 3,774.0 $ 3,726.3 $ 7,500.3 $ 855.2 $ 113.0 $ 8,468.5

Intercompany Revenue ( 586.5 ) ( 502.3 ) ( 1,088.8 ) ( 32.0 ) ( 40.7 ) ( 1,161.5 )

Revenue allocations 45.3 43.6 88.9 ( 16.6 ) ( 72.3 ) —

Net Revenue $ 3,232.8 $ 3,267.6 $ 6,500.4 $ 806.6 $ — $ 7,307.0

Gross Adjusted EBITDA $ 1,014.9 $ 962.7 $ 1,977.6 $ 186.1 $ ( 7.5 ) $ 2,156.2

Adjusted EBITDA allocations 1.7 1.6 3.3 ( 10.8 ) 7.5 —

Net Adjusted EBITDA $ 1,016.6 $ 964.3 $ 1,980.9 $ 175.3 $ — $ 2,156.2

Adjusted EBITDA margin 31.4 % 29.5 % 30.5 % 21.7 % — % 29.5 %

Capital Expenditures $ 247.3 $ 239.9 $ 487.2 $ 40.1 $ 187.0 $ 714.3

Total Assets $ 13,024.0 $ 10,752.5 $ 23,776.5 $ 4,017.2 $ 2,029.6 $ 29,823.3

Six Months Ended June 30, 2022

Gross Revenue $ 3,465.4 $ 3,423.9 $ 6,889.3 $ 416.8 $ 115.4 $ 7,421.5

Intercompany Revenue ( 533.9 ) ( 466.1 ) ( 1,000.0 ) ( 21.5 ) ( 16.3 ) ( 1,037.8 )

Revenue allocations $ 51.6 $ 49.3 $ 100.9 $ ( 1.8 ) $ ( 99.1 ) $ —

Net Revenue $ 2,983.1 $ 3,007.1 $ 5,990.2 $ 393.5 $ — $ 6,383.7

Gross Adjusted EBITDA $ 962.7 $ 850.6 $ 1,813.3 $ 73.7 $ 25.9 $ 1,912.9

Adjusted EBITDA allocations 18.0 17.2 35.2 ( 9.3 ) ( 25.9 ) —

Net Adjusted EBITDA $ 980.7 $ 867.8 $ 1,848.5 $ 64.4 $ — $ 1,912.9

Adjusted EBITDA margin 32.9 % 28.9 % 30.9 % 16.4 % — % 30.0 %

Capital Expenditures $ 231.7 $ 205.1 $ 436.8 $ 48.5 $ 162.0 $ 647.3

Total Assets $ 12,138.4 $ 10,292.6 $ 22,431.0 $ 3,973.0 $ 1,808.7 $ 28,212.7

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

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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

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 Revenue and 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, Inc., acquisition, integration and deal costs, (income) losses from unconsolidated equity method investments, losses on extinguishment of debt, adjustments to withdrawal liabilities for a multiemployer pension fund and restructuring expenses.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

The following table calculates EBITDA and EBITDA margin for the three and six months ended June 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

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

2023 2022 2023 2022

Net income attributable to Republic Services, Inc.

and net income margin $ 427.4 11.5 % $ 371.9 10.9 % $ 811.2 11.1 % $ 723.9 11.3 %

Net loss attributable to noncontrolling interests 0.2 ( 0.1 ) 0.2 ( 0.2 )

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EBITDA and EBITDA margin $ 1,086.4 29.2 % $ 936.0 27.4 % $ 2,114.1 28.9 % $ 1,824.8 28.6 %

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 %

The following table calculates adjusted EBITDA and adjusted EBITDA margin for the three and six months ended June 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

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

2023 2022 2023 2022

EBITDA and EBITDA margin $ 1,086.4 29.2 % $ 936.0 27.4 % $ 2,114.1 28.9 % $ 1,824.8 28.6 %

(Income) loss from unconsolidated equity method investment 3.6 13.6 2.7 17.4

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Restructuring charges 15.5 5.9 21.0 11.9

Adjustment to withdrawal liability for a multiemployer pension fund — 2.2 — 2.2

US Ecology, Inc.

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Our operations primarily consist of providing environmental services.

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

Three Months Ended March 31,

The following table disaggregates our revenue by service line for the three and six months ended June 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

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

2023 2022 2023 2022

$ 700.8 18.8 % $ 654.1 19.2 % $ 1,385.8 18.9 % $ 1,282.0 20.1 %

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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.

Generally, we recognize revenue at the time we perform a service.

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 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, 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.

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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.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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).

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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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.

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.

Generally, we recognize revenue at the time we perform a service.

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.

Substantially all of the deferred revenue recognized as of December 31, 2022 was recognized as revenue during the six months ended June 30, 2023 when the service was performed.

Deferred Contract Costs

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

As of March 31, 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.

As of June 30, 2023 and December 31, 2022, we recognized $ 81.5 million and $ 80.2 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and six months ended June 30, 2023, we amortized $ 3.7 million and $ 7.3 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.4 million and $ 2.7 million, respectively, of other deferred contract costs as a reduction of revenue.

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

Credit Losses

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

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

The following table reflects the activity in our allowance for doubtful accounts for the six months ended June 30, 2023 and 2022:

Balance at beginning of year $ 51.9 $ 38.5

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

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

We have recorded an aggregate accrual of approximately $ 12 million relating to our outstanding legal proceedings as of June 30, 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.

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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 March 31, 2023.

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 June 30, 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:

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

June 30, 2023 December 31, 2022 June 30, 2022 December 31, 2021

Cash and cash equivalents $ 181.6 $ 143.4 $ 119.4 $ 29.0

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The following table summarizes our restricted cash and marketable securities:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Capping, closure and post-closure obligations $ 42.5 $ 39.1

2 unchanged sentences

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