What changed in this filing

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Item 1. Financial Statements

2023-10-27 compared with 2023-08-01 · 217 added, 202 removed, 792 unchanged (35% of the section changed)

3 unchanged sentences

(in millions, except per share data)

June 30, December 31,

September 30, December 31,

Current assets:

46 unchanged sentences

(in millions, except per share data)

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

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

2023 2022 2023 2022

5 unchanged sentences

Withdrawal costs - multiemployer pension funds

Gain on business divestitures and impairments, net ( 1.5 ) ( 5.2 ) ( 1.5 ) ( 5.3 )

Restructuring charges 6.3 6.8 27.3 18.8

2 unchanged sentences

Loss on extinguishment of debt — — ( 0.2 ) —

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

Income (loss) from unconsolidated equity method investments 2.8 ( 51.8 ) 0.2 ( 69.2 )

Interest income 2.0 0.8 5.0 2.0

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

Other income (expense), net 1.3 ( 0.3 ) 3.2 ( 6.5 )

Income before income taxes 606.3 507.8 1,708.6 1,458.1

19 unchanged sentences

(in millions)

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

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

2023 2022 2023 2022

7 unchanged sentences

Foreign currency activity:

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

Unrealized gain (loss) on foreign currency translation 2.4 ( 6.1 ) ( 0.1 ) ( 6.2 )

Other comprehensive income, net of tax 4.2 3.0 9.6 4.0

Comprehensive income 484.5 419.9 1,301.3 1,144.6

Comprehensive loss attributable to non-controlling interests ( 0.2 ) 0.1 ( 0.2 ) 0.2

Comprehensive (income) loss attributable to non-controlling interests ( 0.1 ) — ( 0.3 ) 0.2

Comprehensive income attributable to Republic Services, Inc.

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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

Net income — — — 480.2 — — — 0.1 480.3

Other comprehensive income — — — — — — 4.2 — 4.2

Cash dividends declared — — — ( 168.5 ) — — — — ( 168.5 )

Issuances of common stock — — 3.1 — — ( 0.4 ) — — 2.7

Stock-based compensation — — 11.0 ( 0.9 ) — — — — 10.1

Purchase of common stock for treasury — — — — ( 1.3 ) ( 201.1 ) — — ( 201.1 )

Balance as of September 30, 2023 320.7 $ 3.2 $ 2,887.6 $ 8,163.5 ( 5.6 ) $ ( 720.5 ) $ ( 2.5 ) $ 1.1 $ 10,332.4

Republic Services, Inc.

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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 — — — — — — 3.0 — 3.0

Cash dividends declared — — — ( 156.4 ) — — — — ( 156.4 )

Issuances of common stock 0.1 — 2.9 — ( 0.1 ) ( 0.3 ) — — 2.6

Stock-based compensation — — 10.2 ( 0.8 ) — — — — 9.4

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

Balance as of September 30, 2022 320.2 $ 3.2 $ 2,831.2 $ 7,166.8 ( 4.2 ) $ ( 500.7 ) $ ( 10.6 ) $ 0.6 $ 9,490.5

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash provided by operating activities:

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Gain on disposition of assets and asset impairments, net ( 3.7 ) ( 8.0 )

Loss from unconsolidated equity method investments 2.7 17.4

Environmental adjustments — ( 0.1 )

(Gain) loss from unconsolidated equity method investments ( 0.2 ) 69.2

Other non-cash items ( 0.6 ) 8.0

24 unchanged sentences

Cash dividends paid ( 469.5 ) ( 436.5 )

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

Contingent consideration payments ( 14.1 ) ( 4.5 )

39 unchanged sentences

New Accounting Pronouncements

Accounting Standards Adopted

Disclosure of Supplier Finance Program Obligations

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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.

This update is effective for annual periods beginning after December 15, 2022, and interim periods within those 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 June 30, 2023, certain of our vendors chose to opt into our vendor supply finance agreement.

Through September 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.

As of September 30, 2023 and December 31, 2022, the amounts outstanding under these programs were not material.

Accounting Standards Updates Issued but not yet Adopted

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative

In October 2023, the FASB issued ASU 2023-06 to modify the disclosure or presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the SEC's requirements, and to align the requirements in the FASB accounting standard codification with the SEC's regulations.

The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements.

BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

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

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

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

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Total allocated $ 748.8 $ 1,562.2

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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.

For the acquisitions that closed during the nine months ended September 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.

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(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-

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

hazardous and specialty waste.

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

During the nine months ended September 30, 2023 and 2022 , we incurred $ 24.3 million and $ 65.4 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology.

During the three months ended September 30, 2023 and 2022 , we incurred $ 6.2 million and $ 8.7 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 of 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.

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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 $ 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 .

In exchange for our non-controlling interests, we made capital contributions of $ 34.0 million and $ 121.0 million, which were recorded to other assets in our September 30, 2023 and 2022 consolidated balance sheets, respectively.

During the three and nine months ended September 30, 2023, we decreased the carrying value of these investments by $ 3.7 million and $ 6.3 million, respectively, and during the three and nine months ended September 30, 2022, we decreased the carrying value of these investments by $ 49.5 million and $ 61.8 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 $ 8 million for the three and nine months ended September 30, 2023, and benefits of approximately $ 35 million and $ 60 million, respectively, for the three and nine months ended September 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 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.

During the three and nine months ended September 30, 2023, we incurred restructuring charges of $ 6.3 million and $ 27.3 million, respectively, and during the three and nine months ended September 30, 2022, we incurred restructuring charges of $ 6.8 million and $ 18.8 million, respectively.

Of the 2023 charges, $ 9.5 million related to the early termination of certain leases and $ 17.8 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.

During the nine months ended September 30, 2023 and 2022, we paid $ 32.4 million and $ 17.0 million, respectively, related to these restructuring efforts.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

1 unchanged sentence

Balance as of December 31, 2022

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

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

Group 1 $ 6,637.9 $ 445.5 $ — $ ( 0.9 ) $ 7,082.5

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Total $ 14,451.5 $ 612.8 $ ( 0.6 ) $ 227.0 $ 15,290.7

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)

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

Other Intangible Assets, Net

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Acquisitions Adjustments

Balance as of June 30, 2023

Balance as of September 30, 2023

Balance as of December 31, 2022

Additions Charged to Expense Adjustments

Balance as of June 30, 2023

Other Intangible Assets, Net as of June 30, 2023

Balance as of September 30, 2023

Other Intangible Assets, Net as of September 30, 2023

Customer relationships

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Prepaid Expenses and Other Current Assets

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

Inventories $ 96.1 $ 96.6

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

Prepaid expenses $ 135.0 $ 114.3

Inventories 100.0 96.6

Other non-trade receivables 53.9 59.8

Income taxes receivable 47.2 214.0

Reinsurance receivable 33.4 31.9

Prepaid fees for cloud-based hosting arrangements, current 14.0 14.4

Income taxes receivable 10.8 214.0

Derivative and hedging assets 10.5 —

Other current assets 3.6 5.5

Total $ 361.2 $ 536.5

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

Investments $ 371.6 $ 281.4

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Total $ 1,101.8 $ 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 June 30, 2023 and December 31, 2022 follows:

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

Accrued payroll and benefits $ 293.6 $ 342.6

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Accrued dividends 168.5 156.4

Current tax liabilities 97.9 2.1

Operating right-of-use lease liabilities, current 52.5 57.9

1 unchanged sentence

Accrued professional fees and legal settlement reserves 14.7 8.6

Derivative and hedging liabilities 14.4 1.2

Other 150.8 101.5

1 unchanged sentence

Other Long-Term Liabilities

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

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

Operating right-of-use lease liabilities $ 195.7 $ 238.0

6 unchanged sentences

Total $ 595.7 $ 660.7

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

LANDFILL AND ENVIRONMENTAL COSTS

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.

As of September 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 June 30, 2023 and December 31, 2022 follows:

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

Landfill final capping, closure and post-closure liabilities $ 1,867.7 $ 1,786.4

3 unchanged sentences

Long-term portion $ 2,225.6 $ 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 six months ended June 30, 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 nine months ended September 30, 2023 and 2022:

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

4 unchanged sentences

Accretion expense 73.2 66.9

Foreign currency translation — ( 0.3 )

Asset retirement obligation liabilities, end of period 1,867.7 1,677.5

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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 June 30, 2023 would be approximately $ 369 million higher than the amount recorded.

If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of September 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 six months ended June 30, 2023 and 2022:

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

Environmental remediation liabilities, beginning of year $ 487.5 $ 454.9

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Bridgeton Landfill.

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.

During the nine months ended September 30, 2023, we paid $ 9.4 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 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)

As of September 30, 2023, the remediation liability recorded for this site was $ 77.8 million, of which approximately $ 6 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 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.

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value

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Loss on Extinguishment of Debt

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.

During the nine months ended September 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 (as defined below).

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

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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 September 30, 2023, we had $ 9.9 million of borrowings outstanding under our Uncommitted Credit Facility.

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

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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 %.

As of September 30, 2023, C$ 209.7 million was outstanding against the Canadian Sublimit, with an interest rate of 6.386 %.

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.

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

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.

We had $ 154.4 million (all related to Canadian-denominated loans) and $ 250.0 million outstanding under the Credit Facility as of September 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 September 30, 2023 and December 31, 2022, respectively.

We also had $ 523.0 million and $ 1.0 billion of principal borrowings outstanding under the commercial paper program as of September 30, 2023 and December 31, 2022, respectively.

As a result, availability under our Credit Facility was $ 1,986.1 million and $ 1,402.4 million as of September 30, 2023 and December 31, 2022, respectively.

Term Loan Facility

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

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

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

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

The weighted average interest rate for borrowings outstanding as of September 30, 2023 is 6.216 %.

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 of borrowings outstanding under the Term Loan Facility as of June 30, 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 September 30, 2023 and December 31, 2022, respectively.

Commercial Paper Program

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

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

The weighted average interest rate for borrowings outstanding as of September 30, 2023 is 5.447 % with a weighted average maturity of 8 days.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

We had $ 523.0 million and $ 1.0 billion principal value of commercial paper issued and outstanding under the program as of September 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 June 30, 2023.

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

These free-standing derivatives settled and matured in May 2023.

For the nine months ended September 30, 2023, we recognized gains of $ 1.0 million, and for the three and nine months ended September 30, 2022, we recognized losses of $ 0.8 million and $ 5.2 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.

We recognized net interest expense of $ 2.2 million during the nine months ended September 30, 2023 and net interest income of $ 0.4 million and $ 3.7 million during the three and nine months ended September 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 nine months ended September 30, 2023, we recognized losses of $ 2.3 million related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting gains of $ 1.2 million on the related interest rate swaps attributable to changes in the benchmark interest rate.

For the three and nine months ended September 30, 2022, we recognized gains of $ 0.1 million and $ 4.1 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting losses of $ 1.0 million and $ 6.2 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 nine months ended September 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.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Cash Flow Hedges

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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).

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.

During the nine months ended September 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 September 30, 2023 and December 31, 2022, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $ 16.7 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 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.

For the three months ended September 30, 2023 and 2022, we recognized losses, net of tax, of $ 0.9 million and $ 1.1 million, respectively.

For the nine months ended September 30, 2023 and 2022, we recognized losses, net of tax, of $ 2.9 million and $ 3.2 million, respectively, as a result of this amortization.

Over the next 12 months, we expect to amortize $ 3.1 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.

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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.

As of September 30, 2023, the 2022 Interest Rate Swap has a notional value of $ 360 million.

The interest rate swap matures in November 2026.

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

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

As of June 30, 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 fair value of our floating-to-fixed 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, 2023 and December 31, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $ 33.6 million and $ 36.0 million, respectively, and is included in other assets in our consolidated balance sheets.

For the three and nine months ended September 30, 2023, we recognized unrealized gains of $ 4.1 million and $ 14.9 million, respectively, in accumulated other comprehensive income for the 2022 Interest Rate Swap.

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.

As of September 30, 2023 and December 31, 2022, the 2022 Interest Rate Swap was recorded as a gain within accumulated other comprehensive loss of $ 10.0 million and $ 5.1 million, respectively, net of tax.

The effective portion of the 2022 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 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.

During the three and nine months ended September 30, 2023, we recognized a gain, net of tax, of $ 3.2 million and $ 10.0 million, respectively, as a result of this amortization.

For both the three and nine months ended September 30, 2022, we recognized gains, net of tax, of $ 1.1 million 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.

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

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

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

As of 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

In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (2019 Offsetting Interest Rate

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

Swap and the 2020 Offsetting Interest Rate Swap, or collectively the Offsetting Interest Rate Swaps).

As of September 30, 2023, the fair value of the Extended Interest Rate Locks were assets of $ 87.2 million, which were included in prepaid and other current assets and other assets in our consolidated balance sheets.

As of December 31, 2022, the fair value of the Extended Interest Rate Locks were assets of $ 69.8 million, which were included in other assets in our consolidated balance sheets.

As of September 30, 2023, the fair value of the Offsetting Interest Rate Swaps were liabilities of $ 111.3 million, which were included in other accrued liabilities and other long-term liabilities in our consolidated balance sheets.

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

For the three months ended September 30, 2023 and 2022, we recognized gains of $ 18.3 million and $ 40.2 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 18.9 million and $ 39.7 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps.

For the nine months ended September 30, 2023 and 2022, we recognized gains of $ 17.7 million and $ 115.0 million on the change in fair value of the Extended Interest Rate Locks with offsetting losses of $ 19.6 million and $ 112.8 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 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.

As of September 30, 2023, we had $ 1,280.5 million of certain variable rate tax-exempt financings outstanding, with maturities ranging from 2024 to 2053.

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

In September 2023, the California Municipal Finance Authority issued, for our benefit, $ 100 million of Solid Waste Disposal Revenue Bonds.

The proceeds from the issuance, after deferred issuance costs, were used to fund the acquisition, construction, improvement, installation, and/or equipping of certain solid waste disposal facilities located within California.

The initial remarketing period for this tax-exempt financing is 10 years.

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

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

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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 June 30, 2023 and December 31, 2022.

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

Finance Leases

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

As of September 30, 2023, we had finance lease liabilities of $ 254.6 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.

Our effective tax rate, exclusive of non-controlling interests, for the three and nine months ended September 30, 2023 was 20.8 % and 24.4 %, respectively.

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 for the nine months ended September 30, 2023 reflected benefits of $ 20.6 million from tax settlements, $ 7.9 million from investments in solar energy assets qualifying for federal tax credits under Section 48 of the Internal Revenue Code and $ 6.8 million due to the realization of additional federal and state benefits as well as adjustments to deferred taxes due to the completion of our 2022 tax returns.

Our effective tax rate for the nine months ended September 30, 2022 reflected benefits of $ 60.2 million from investments in solar energy assets qualifying for tax credits under Section 48 of the Internal Revenue Code and $ 6.8 million due to the realization of additional federal and state benefits as well as adjustments to deferred taxes due to the completion of our 2021 tax returns.

For the nine months ended September 30, 2023 and 2022, net cash paid for income taxes was $ 137.9 million and $ 90.5 million, respectively.

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

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When determining the need for a valuation allowance, we consider all positive and negative evidence, including recent financial results, scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies.

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

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

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

income in the appropriate state taxing jurisdictions in future periods.

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

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

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

As of September 30, 2023, the valuation allowance associated with our state loss carryforwards was approximately $ 44.1 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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The federal statute of limitations applicable to our federal tax returns has passed for all years prior to 2015.

We are currently under examination by the Internal Revenue Service (IRS) for tax years 2015 through 2017.

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

For tax years 2015 to 2018 we have resolved all open issues with IRS Appeals while the applicable statutes of limitation will expire later in 2023 and early 2024.

We are currently under state examination or administrative review in various state jurisdictions for tax years 2012 through 2021.

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

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

As of June 30, 2023, we are unable to estimate the resolution of our gross unrecognized benefits over the next 12 months.

As of September 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 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.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As of September 30, 2023, we accrued a liability for penalties of $ 0.3 million and a liability for interest (including interest on penalties) of $ 12.4 million related to our uncertain tax positions.

STOCK REPURCHASES, DIVIDENDS AND EARNINGS PER SHARE

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

In October 2023, our Board of Directors approved a $ 3.0 billion share repurchase authorization effective starting January 1, 2024 and extending through December 31, 2026.

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

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

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,

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

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

2023 2022 2023 2022

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Weighted average cost per share $ 146.89 $ — $ 146.89 $ 124.02

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.

As of September 30, 2023, there were less than 0.1 million repurchased shares pending settlement, resulting in an associated $ 10.7 million of share repurchases unpaid and included within other accrued liabilities.

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

As of September 30, 2023, the remaining authorized purchase capacity under our October 2020 repurchase program was $ 1.4 billion.

In July 2023, our Board of Directors approved a quarterly dividend of $ 0.535 per share.

Cash dividends declared were $ 481.6 million for the nine months ended September 30, 2023.

As of September 30, 2023, we recorded a quarterly dividend payable of $ 168.5 million to shareholders of record at the close of business on October 2, 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Earnings per Share

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

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Earnings per share for the three 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,

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

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

2023 2022 2023 2022

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Diluted earnings per share $ 1.52 $ 1.32 $ 4.07 $ 3.60

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

During each of the three and nine months ended September 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:

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

Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Translation Total

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Net current period other comprehensive income (loss) 9.5 0.2 ( 0.1 ) 9.6

Balance as of June 30, 2023

Balance as of September 30, 2023

$ ( 6.8 ) $ 9.4 $ ( 5.1 ) $ ( 2.5 )

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,

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

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

2023 2022 2023 2022

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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 six months ended June 30, 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 nine months ended September 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

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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 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

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

September 30, 2023

Carrying Amount Total Quoted

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57.3 57.3 — 57.3 —

Derivative and hedging assets - other assets 102.9 102.9 — 102.9 —

Derivative and hedging assets - prepaid and other current assets and other assets 120.8 120.8 — 120.8 —

Total assets $ 220.0 $ 220.0 $ 41.9 $ 178.1 $ —

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

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 carrying value of our total debt was $ 11.9 billion and $ 11.8 billion as of September 30, 2023 and December 31, 2022, respectively, and the fair value of our total debt was $ 11.0 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 June 30, 2023 and December 31, 2022.

The fair value estimates were based on Level 2 inputs of the fair value hierarchy as of September 30, 2023 and December 31, 2022.

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

Contingent Consideration

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

As of 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

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

capacity of the landfill.

Contingent Consideration

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

As of September 30, 2023, the Sonoma contingent consideration represents the fair value of $ 59.3 million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill.

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

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.

During the nine months ended September 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.

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

Adjusted EBITDA is the single financial measure our chief operating decision maker (CODM) uses to evaluate operating segment profitability and determine resource allocations.

Summarized financial information concerning our reportable segments for the three months ended September 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 June 30, 2023

Three Months Ended September 30, 2023

Gross Revenue $ 2,000.3 $ 1,927.0 $ 3,927.3 $ 425.2 $ 61.7 $ 4,414.2

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Net Revenue $ 1,731.4 $ 1,689.7 $ 3,421.1 $ 404.8 $ — $ 3,825.9

Gross Adjusted EBITDA $ 528.6 $ 500.7 $ 1,029.3 $ 96.3 $ ( 9.5 ) $ 1,116.1

Adjusted EBITDA allocations ( 1.5 ) ( 1.5 ) ( 3.0 ) ( 6.5 ) 9.5 —

Net Adjusted EBITDA $ 527.1 $ 499.2 $ 1,026.3 $ 89.8 $ — $ 1,116.1

Adjusted EBITDA margin 31.8 % 29.9 % 30.8 % 22.5 % — % 30.0 %

Adjusted EBITDA $ 553.8 $ 500.2 $ 1,054.0 $ 91.7 $ — $ 1,145.7

Capital Expenditures $ 165.4 $ 140.7 $ 306.1 $ 25.2 $ 37.7 $ 369.0

Total Assets $ 13,112.7 $ 10,838.5 $ 23,951.3 $ 4,011.0 $ 2,080.6 $ 30,042.8

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Gross Revenue $ 1,840.6 $ 1,837.4 $ 3,678.0 $ 411.0 $ 64.3 $ 4,153.3

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Net Revenue $ 1,585.1 $ 1,615.5 $ 3,200.6 $ 397.2 $ — $ 3,597.8

Gross Adjusted EBITDA $ 499.3 $ 439.4 $ 938.7 $ 59.6 $ 11.3 $ 1,009.6

Adjusted EBITDA allocations 10.5 10.0 20.5 ( 9.2 ) ( 11.3 ) —

Net Adjusted EBITDA $ 509.8 $ 449.4 $ 959.2 $ 50.4 $ — $ 1,009.6

Adjusted EBITDA margin 33.0 % 28.5 % 30.8 % 17.1 % — % 29.6 %

Adjusted EBITDA $ 510.6 $ 466.1 $ 976.7 $ 74.6 $ — $ 1,051.3

Capital Expenditures $ 133.5 $ 115.1 $ 248.6 $ 29.2 $ ( 0.3 ) $ 277.5

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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:

Summarized financial information concerning our reportable segments for the nine months ended September 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

Nine Months Ended September 30, 2023

Gross Revenue $ 5,774.3 $ 5,653.2 $ 11,427.5 $ 1,280.4 $ 174.8 $ 12,882.7

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Net Revenue $ 4,964.2 $ 4,957.3 $ 9,921.5 $ 1,211.4 $ — $ 11,132.9

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 %

Adjusted EBITDA $ 1,570.4 $ 1,464.5 $ 3,034.9 $ 267.0 $ — $ 3,301.9

Capital Expenditures $ 422.0 $ 384.8 $ 806.8 $ 66.4 $ 210.0 $ 1,083.2

Total Assets $ 13,112.7 $ 10,838.5 $ 23,951.3 $ 4,011.0 $ 2,080.6 $ 30,042.8

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Gross Revenue $ 5,306.1 $ 5,261.3 $ 10,567.4 $ 827.8 $ 181.7 $ 11,576.9

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Net Revenue $ 4,568.3 $ 4,622.5 $ 9,190.8 $ 790.7 $ — $ 9,981.5

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 %

Adjusted EBITDA $ 1,491.3 $ 1,333.9 $ 2,825.2 $ 139.1 $ — $ 2,964.3

Capital Expenditures $ 376.5 $ 329.2 $ 705.7 $ 80.4 $ 138.7 $ 924.8

Total Assets $ 12,232.0 $ 10,303.0 $ 22,535.0 $ 3,991.7 $ 1,874.3 $ 28,401.0

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

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

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

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

Revenue and overhead costs 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 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.

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 Adjusted EBITDA.

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.

This presentation is consistent with how our CODM reviews results of operations to make resource allocation decisions.

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

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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,

A reconciliation of the Company's single measure of segment profitability (segment Adjusted EBITDA) to Income before income tax provision in the Consolidated Statements of Net Income is as follows:

Three Months Ended September 30, Nine Months Ended September 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 )

Provision for income taxes 152.6 106.3 290.9 226.6

Group 1 Adjusted EBITDA $ 553.8 $ 510.6 $ 1,570.4 $ 1,491.3

Group 2 Adjusted EBITDA 500.2 466.1 1,464.5 1,333.9

Group 3 Adjusted EBITDA 91.7 74.6 267.0 139.1

Total Adjusted EBITDA 1,145.7 1,051.3 3,301.9 2,964.3

Other (income) expense, net ( 1.3 ) 0.3 ( 3.2 ) 6.5

3 unchanged sentences

Accretion 24.6 22.8 73.2 66.9

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 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 ( 2.8 ) 51.8 ( 0.2 ) 69.2

Loss on extinguishment of debt — — 0.2 —

Loss on extinguishment of debt and other related costs — — 0.2 —

Restructuring charges 6.3 6.8 27.3 18.8

2 unchanged sentences

acquisition integration and deal costs 6.2 8.7 24.3 65.4

Total adjustments 29.7 73.6 42.1 88.1

Adjusted EBITDA and adjusted EBITDA margin $ 1,116.1 30.0 % $ 1,009.6 29.6 % $ 2,156.2 29.5 % $ 1,912.9 30.0 %

Gain on business divestitures and impairments, net ( 1.5 ) ( 5.2 ) ( 1.5 ) ( 5.3 )

Income before income taxes $ 606.3 $ 507.8 $ 1,708.6 $ 1,458.1

REPUBLIC SERVICES, INC.

2 unchanged sentences

Our operations primarily consist of providing environmental services.

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,

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

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

2023 2022 2023 2022

27 unchanged sentences

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

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

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

5 unchanged sentences

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

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.

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.

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

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

4 unchanged sentences

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 six months ended June 30, 2023 when the service was performed.

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

Deferred Contract Costs

1 unchanged sentence

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 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.

As of September 30, 2023 and December 31, 2022, we recognized $ 82.2 million and $ 80.2 million, respectively, of deferred contract costs and capitalized sales commissions.

During the three and nine months ended September 30, 2023, we amortized $ 3.5 million and $ 10.8 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $ 1.2 million and $ 4.0 million, respectively, of other deferred contract costs as a reduction of revenue.

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.

Credit Losses

7 unchanged sentences

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 six months ended June 30, 2023 and 2022:

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

Balance at beginning of year $ 51.9 $ 38.5

2 unchanged sentences

Balance at end of period $ 83.5 $ 49.4

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

Although we cannot predict the ultimate outcome of any legal matter with certainty, we do not believe the outcome of any of our pending legal proceedings will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As used herein, the term legal proceedings refers to litigation and similar claims against us and our subsidiaries, excluding:

2 unchanged sentences

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

We have recorded an aggregate accrual of approximately $ 12 million relating to our outstanding legal proceedings as of June 30, 2023.

We have recorded an aggregate accrual of approximately $ 16 million relating to our outstanding legal proceedings as of September 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.

1 unchanged sentence

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 June 30, 2023.

If we had used the high ends of such ranges, our aggregate potential liability would be approximately $ 9 million higher than the amount recorded as of September 30, 2023.

Multiemployer Pension Plans

7 unchanged sentences

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:

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

September 30, 2023 December 31, 2022 September 30, 2022 December 31, 2021

Cash and cash equivalents $ 157.5 $ 143.4 $ 81.4 $ 29.0

3 unchanged sentences

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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Capping, closure and post-closure obligations $ 43.0 $ 39.1

6 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements