What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-10-27 compared with 2023-08-01 · 166 added, 171 removed, 453 unchanged (43% of the section changed)

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Among the factors that could cause actual results to differ materially from the expectations expressed in the forward-looking statements are our ability to integrate the operations of US Ecology, Inc.

(US Ecology) into our operations and to realize the intended benefits of such acquisition, as well as acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States, as well as our dependence on large, long-term collection, transfer and disposal contracts.

(US Ecology) into our operations and to realize the intended benefits of such acquisition, the amount of the financial contribution of our sustainability initiatives, as well as acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States, as well as our dependence on large, long-term collection, transfer and disposal contracts.

More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022.

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The guidance set forth above constitutes forward-looking information and is not a guarantee of future performance.

The guidance is based upon the current beliefs and expectations of our management and is subject to significant risk and uncertainties that could cause actual results to differ materially from those shown above.

The guidance is based upon the current beliefs and expectations of our management and is subject to significant risks and uncertainties that could cause actual results to differ materially from those shown above.

See Disclosure Regarding Forward-Looking Statements .

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

As of June 30, 2023, we operated across the United States and Canada through 360 collection operations, 246 transfer stations, 74 recycling centers, 208 active landfills, 3 treatment, recovery and disposal facilities, 20 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells and 7 deep injection wells.

We are engaged in 73 landfill gas-to-energy and renewable energy projects and had post-closure responsibility for 126 closed landfills as of June 30, 2023.

Revenue for the six months ended June 30, 2023 increased by 14.5% to $7,307.0 million compared to $6,383.7 million for the same period in 2022.

This change in revenue is due to increased revenue from acquisitions, net of divestitures of 7.5%, increases in average yield of 6.2%, volume of 0.9%, fuel recovery fees of 0.4%, and environmental solutions revenue of 0.4%.

Additionally, revenue increased 0.2% due to one additional workday in 2023 as compared to the same period in 2022.

These increases were partially offset by a decrease in recycling processing and commodity sales of 1.1%.

The following table summarizes our revenue, expenses and operating income 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,

As of September 30, 2023, we operated across the United States and Canada through 360 collection operations, 245 transfer stations, 75 recycling centers, 208 active landfills, 3 treatment, recovery and disposal facilities, 20 treatment, storage and disposal

facilities (TSDF), 6 salt water disposal wells and 7 deep injection wells.

We are engaged in 76 landfill gas-to-energy and renewable energy projects and had post-closure responsibility for 126 closed landfills as of September 30, 2023.

Revenue for the nine months ended September 30, 2023 increased by 11.5% to $11,132.9 million compared to $9,981.5 million for the same period in 2022.

This change in revenue is due to increased revenue from acquisitions, net of divestitures of 5.3%, increases in average yield of 6.1%, volume of 0.7%, and environmental solutions revenue of 0.4%.

These increases were partially offset by a decrease in recycling processing and commodity sales of 0.8% and fuel recovery fees of 0.2%.

The following table summarizes our revenue, expenses and operating income 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

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— — — — — — 2.2 —

Loss (gain) on business divestitures and impairments, net (1.5) — (5.2) (0.1) (1.5) — (5.3) (0.1)

Restructuring charges 6.3 0.1 6.8 0.2 27.3 0.3 18.8 0.2

Operating income $ 727.8 19.0 % $ 664.3 18.5 % $ 2,079.2 18.7 % $ 1,814.5 18.4 %

Our pre-tax income was $580.2 million and $1,102.3 million for the three and six months ended June 30, 2023, respectively, compared to $478.1 million and $950.3 million for the same respective periods in 2022.

Our pre-tax income was $606.3 million and $1,708.6 million for the three and nine months ended September 30, 2023, respectively, compared to $507.8 million and $1,458.1 million for the same respective periods in 2022.

Our net income attributable to Republic Services, Inc.

was $427.4 million and $811.2 million for the three and six months ended June 30, 2023, or $1.35 and $2.56 per diluted share, respectively, compared to $371.9 million and $723.9 million, or $1.17 and $2.28 per diluted share, for the same periods in 2022, respectively.

During each of the three and six months ended June 30, 2023 and 2022, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax expense, net income attributable to Republic Services, Inc.

was $480.2 million and $1,291.4 million for the three and nine months ended September 30, 2023, or $1.52 and $4.07 per diluted share, respectively, compared to $416.9 million and $1,140.8 million, or $1.32 and $3.60 per diluted share, for the same periods in 2022, respectively.

During each of the three and nine months ended September 30, 2023 and 2022, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax expense, net income attributable to Republic Services, Inc.

(net income – Republic) and diluted earnings per share as noted in the following table (in millions, except per share data).

Additionally, see our Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of other items that impacted our earnings during the three and six months ended June 30, 2023 and 2022.

Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

Three Months Ended September 30, 2023

Three Months Ended September 30, 2022

Diluted Diluted

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Restructuring charges 6.3 1.7 4.6 0.01 6.8 1.8 5.0 0.01

Adjustment to withdrawal liability for a multiemployer pension fund — — — — 2.2 0.7 1.5 0.01

Gain on business divestitures and impairments, net (2)

(1.5) (0.4) (1.1) — (5.2) (2.2) (3.0) (0.01)

US Ecology acquisition integration and deal costs 6.2 1.6 4.6 0.01 8.7 2.2 6.5 0.02

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(1) The income tax effect related to our adjustments includes both the current and deferred income tax impact and is individually calculated based on the statutory rates applicable to each adjustment.

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

(2) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the three months ended September 30, 2023.

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Diluted Diluted

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Restructuring charges 27.3 7.2 20.1 0.06 18.8 4.9 13.9 0.04

Gain on business divestitures and impairments, net (2)

(1.5) (0.4) (1.1) — (5.3) (2.2) (3.1) (0.01)

Adjustment to withdrawal liability for a multiemployer pension fund — — — — 2.2 0.6 1.6 0.01

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(2) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the six months ended June 30, 2023.

(2) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the nine months ended September 30, 2023.

We believe that presenting adjusted pre-tax income, adjusted tax impact, adjusted net income – Republic, and adjusted diluted earnings per share, which are not measures determined in accordance with U.S.

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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.

The 2022 charges primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems, which was completed with the systems being placed into production in 2022.

We paid $26.1 million, of which $15.8 million related to the termination of one of our building leases, and $8.3 million during the six months ended June 30, 2023 and 2022, respectively, related to these restructuring efforts.

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

During the remainder of 2023, we expect to incur additional restructuring charges of approximately $8 million , primarily related to the continued redesign of our asset management, and customer and order management software systems.

Substantially all of these restructuring charges will be recorded in Corporate entities and other.

Gain on business divestitures and impairments, net .

During both the three and nine months ended September 30, 2023, we recorded a net gain on business divestitures and impairments of $1.5 million.

During the three and nine months ended September 30, 2022, we recorded a net gain on business divestitures and impairments of $5.2 million and $5.3 million , respectively.

Adjustment to withdrawal liability for a multiemployer pension fund.

During both the three and six months ended June 30, 2022, we recorded $2.2 million of withdrawal costs from a multiemployer pension plan.

During the nine months ended September 30, 2022, we recorded $2.2 million of withdrawal costs from a multiemployer pension plan.

US Ecology, Inc.

acquisition integration and deal costs .

During the three and six months ended June 30, 2023, we incurred acquisition integration and deal costs of $10.6 million and $18.2 million, respectively, and during the three and six months ended June 30, 2022, we incurred acquisition integration and deal costs of $51.9 million and $56.6 million, respectively, in connection with the acquisition of US Ecology, which included certain costs to close the acquisition and integrate the business, including stock compensation expense for unvested awards at closing as well as severance and change-in-control payments.

During the three and nine months ended September 30, 2023, we incurred acquisition integration and deal costs of $6.2 million and $24.3 million, respectively, and during the three and nine months ended September 30, 2022, we incurred acquisition integration and deal costs of $8.7 million and $65.4 million, respectively, in connection with the acquisition of US Ecology, which included certain costs to close the acquisition and integrate the business, including stock compensation expense for unvested awards at closing as well as severance and change-in-control payments.

The acquisition closed on May 2, 2022 .

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Loss on extinguishment of debt and other related costs.

During the 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.

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

During the six months ended June 30, 2022, we did not incur any losses on extinguishment of debt.

During the nine months ended September 30, 2022, we did not incur any losses on extinguishment of debt.

Results of Operations

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

The following table reflects 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 reflects 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

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Total revenue $ 3,825.9 100.0 % $ 3,597.8 100.0 % $ 11,132.9 100.0 % $ 9,981.5 100.0 %

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three and six months ended June 30, 2023 and 2022:

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

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three and nine months ended September 30, 2023 and 2022:

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

2023 2022 2023 2022

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We also measure changes in core price, average yield and volume as a percentage of related-business revenue, defined as total revenue excluding recycled commodities, fuel recovery fees and environmental solutions revenue, to determine the effectiveness of our pricing and organic growth strategies.

The following table reflects core price, average yield and volume as a percentage of related-business revenue for the three and six months ended June 30, 2023 and 2022:

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

The following table reflects core price, average yield and volume as a percentage of related-business revenue for the three and nine months ended September 30, 2023 and 2022:

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

2023 2022 2023 2022

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Volume 0.1 % 2.4 % 0.8 % 2.9 %

During the three and six months ended June 30, 2023, we experienced the following changes in our revenue as compared to the same periods in 2022:

• Average yield increased revenue by 5.9% and 6.2% during the three and six months ended June 30, 2023, respectively, due to price increases in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, decreased revenue by 0.7% for the three months ended June 30, 2023 due to a decrease in fuel prices compared to the same period in 2022.

The fuel recovery fee is invoiced based on prior month fuel pricing, creating a timing difference between changes in fuel prices and recognition in our financial results.

Fuel prices decreased in the six months ended June 30, 2023 compared to the same period in 2022;

however, due to the timing difference created by the invoicing process, the fuel recovery fee program increased revenue by 0.4% during the six months ended June 30, 2023.

• Volume increased revenue by 0.4% and 0.9% during the three and six months ended June 30, 2023, respectively, primarily due to volume growth in our landfill, small-container and residential lines of business.

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

During the three and nine months ended September 30, 2023, we experienced the following changes in our revenue as compared to the same periods in 2022:

• Average yield increased revenue by 5.8% and 6.1% during the three and nine months ended September 30, 2023, respectively, due to price increases in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, decreased revenue by 1.1% and 0.2% for the three and nine months ended September 30, 2023, respectively, due to a decrease in fuel prices compared to the same periods in 2022.

• Volume increased revenue by 0.1% and 0.7% during the three and nine months ended September 30, 2023, respectively, primarily due to volume growth in our landfill and small-container lines of business.

The volume increase during the nine months ended September 30, 2023 in our landfill line of business is primarily attributable to increased special waste volumes.

These increases were partially offset by volume declines in our transfer, large-container, and construction and demolition landfill lines of business.

• Revenue increased by 0.2% due to one additional workday during the six months ended June 30, 2023 as compared to the same period in 2022, which drove an increase in volumes in our large-container collection, landfill and transfer lines of business.

• Recycling processing and commodity sales decreased revenue by 1.1% during both the three and six months ended June 30, 2023 primarily due to a decrease in overall commodity prices as compared to the same periods in 2022.

The average price for recycled commodities, excluding glass and organics, for the three and six months ended June 30, 2023 was $119 and $112 per ton, respectively, compared to $218 and $210 per ton for the same respective periods in 2022.

• Recycling processing and commodity sales decreased revenue by 0.2% and 0.8%, respectively, during the three and nine months ended September 30, 2023 primarily due to a decrease in overall commodity prices as compared to the same periods in 2022.

The average price for recycled commodities, excluding glass and organics, for both the three and nine months ended September 30, 2023 was $112 per ton compared to $162 and $195 per ton for the same respective periods in 2022.

Changing market demand for recycled commodities causes volatility in commodity prices.

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

• Environmental solutions revenue increased by 0.2% and 0.4% during the three and six months ended June 30, 2023, respectively, primarily due to an increase in volumes, including those driven by an increase in rig counts, as well as price increases.

• Acquisitions, net of divestitures, increased revenue by 4.4% and 7.5% during the three and six months ended June 30, 2023, respectively, reflecting the results of our continued growth strategy of acquiring solid waste, recycling, and environmental services companies that complement and expand our existing business platform.

• Environmental solutions revenue increased by 0.4% and 0.4% during the three and nine months ended September 30, 2023, respectively, primarily due to price increases, partially offset by a decrease in exploration and production-related volumes due to a decline in rig counts.

• Acquisitions, net of divestitures, increased revenue by 1.7% and 5.3% during the three and nine months ended September 30, 2023, respectively, reflecting the results of our continued growth strategy of acquiring solid waste, recycling, and environmental services companies that complement and expand our existing business platform.

Cost of Operations

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risk management costs, which include insurance premiums and claims;

cost of goods sold, which includes material costs paid to

cost of goods sold, which includes material costs paid to suppliers;

and other, which includes expenses such as facility operating costs, equipment rent and gains or losses on sale of assets used in our operations.

The following table summarizes the major components of our cost of operations 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 summarizes the major components of our cost of operations 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

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As such, you should take care when comparing our cost of operations by component to that of other companies and of ours for prior periods.

The most significant items impacting our cost of operations during the three and six months ended June 30, 2023 and 2022 are summarized below:

• Labor and related benefits increased due to higher hourly and salaried wages as a result of annual merit increases, volume-related growth, and one additional workday in 2023.

The most significant items impacting our cost of operations during the three and nine months ended September 30, 2023 and 2022 are summarized below:

• Labor and related benefits increased in aggregate dollars due to higher hourly and salaried wages as a result of annual merit increases and volume-related growth.

Acquisition-related growth also contributed to the increase in labor and related benefits.

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Transfer and disposal costs also increased in aggregate dollars as a result of higher collection volumes.

During both the three and six months ended June 30, 2023 and 2022 approximately 68% of the total solid waste volume we collected was disposed at landfill sites that we owned or operated (internalization).

• Maintenance and repairs expense increa se d due to higher hourly wages as a result of annual merit increases, an increase in third-party maintenance, parts inflation, volume-related growth, and one additional workday in 2023.

During both the three and nine months ended September 30, 2023 and 2022, approximately 68% of the total solid waste volume we collected was disposed at landfill sites that we owned or operated (internalization).

• Maintenance and repairs expense increa se d due to higher hourly wages as a result of annual merit increases, an increase in third-party maintenance, parts inflation, and volume-related growth.

Acquisition-related growth also contributed to the increase in maintenance and repairs expense in aggregate dollars.

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• Our fuel costs decreased due to a decrease in the average diesel fuel cost per gallon.

The national average diesel fuel cost per gallon for the three and six months ended June 30, 2023 was $3.94 and $4.18, respectively, as compared to $5.49 and $4.87, respectively, for the same periods in 2022.

The national average diesel fuel cost per gallon for the three and nine months ended September 30, 2023 was $4.24 and $4.20, respectively, as compared to $5.15 and $4.96, respectively, for the same periods in 2022.

At current consumption levels, we believe a twenty-cent per gallon change in the price of diesel fuel would change our fuel costs by approximately $27 million per year.

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

• Landfill operating costs increased primarily due to increased leachate transportation and disposal costs due in part to increased rainfall in select geographic regions, as well as certain favorable remediation adjustments recorded during the three and six months ended June 30, 2022 which did not recur in 2023.

• Landfill operating costs increased primarily due to increased leachate transportation and disposal costs due in part to increased rainfall in select geographic regions, as well as certain favorable remediation adjustments recorded during the nine months ended September 30, 2022 which did not recur in 2023.

• Risk management expenses increased primarily due to unfavorable actuarial developments in our automotive programs as well as higher premium costs.

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Depreciation, Amortization and Depletion of Property and Equipment

The following table summarizes depreciation, amortization and depletion of property and equipment 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 summarizes depreciation, amortization and depletion of property and equipment 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

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$ 349.0 9.1 % $ 326.1 9.1 % $ 1,004.2 9.0 % $ 927.2 9.3 %

Depreciation and amortization of property and equipment increased in aggregate dollars for the three and six months ended June 30, 2023 primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased in aggregate dollars for the six months ended June 30, 2023 due to higher landfill disposal volumes primarily driven by special waste and solid waste volumes coupled with an increase in our overall average depletion rate.

These increases were partially offset by favorable amortization adjustments related to the asset retirement obligations at certain of our landfills during the three months ended June 30, 2023.

Depreciation and amortization of property and equipment increased in aggregate dollars for the three and nine months ended September 30, 2023 primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased in aggregate dollars for the three and nine months ended September 30, 2023 due to higher landfill disposal volumes primarily driven by special waste and solid waste volumes coupled with an increase in our overall average depletion rate.

These increases were partially offset by favorable amortization adjustments related to the asset retirement obligations at certain of our landfills during the nine months ended September 30, 2023.

Amortization of Other Intangible Assets

Amortization of other intangible assets primarily relates to customer relationships and, to a lesser extent, non-compete agreements.

Expenses for amortization of other intangible assets were $14.9 million and $30.1 million, or 0.4% of revenue, for the three and six months ended June 30, 2023, respectively, compared to $13.7 million and $23.7 million, or 0.4% of revenue, for the same respective periods in 2022.

Expenses for amortization of other intangible assets were $17.3 million and $47.4 million, or 0.5% and 0.4% of revenue, for the three and nine months ended September 30, 2023, respectively, compared to $14.9 million and $38.6 million, or 0.4% of revenue, for the same respective periods in 2022.

Amortization expense increased due to assets added through acquisition activity.

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Our other assets primarily relate to the prepayment of fees and capitalized implementation costs associated with cloud-based hosting arrangements.

Expenses for amortization of other assets were $16.6 million and $31.8 million, or 0.4% of revenue, for the three and six months ended June 30, 2023, respectively, compared to $12.4 million and $23.1 million, or 0.4% of revenue, for the same respective periods in 2022.

Expenses for amortization of other assets were $16.0 million and $47.8 million, or 0.4% of revenue, for the three and nine months ended September 30, 2023, respectively, compared to $12.9 million and $36.0 million, or 0.3% of revenue, for the same respective periods in 2022.

Accretion Expense

Accretion expense was $24.5 million and $48.6 million, or 0.7% of revenue, for the three and six months ended June 30, 2023, respectively, compared to $22.4 million and $44.1 million, or 0.7% of revenue, for the same respective periods in 2022.

Accretion expense was $24.6 million, or 0.6% of revenue, and $73.2 million, or 0.7% of revenue, for the three and nine months ended September 30, 2023, respectively, compared to $22.8 million and $66.9 million, or 0.7% of revenue, for the same respective periods in 2022.

Accretion expense increased in aggregate dollars primarily due to asset retirement obligations assumed in connection with acquisitions.

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Restructuring charges are excluded from selling, general and administrative expenses and are discussed separately.

The following table summarizes our selling, general and administrative expenses 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 summarizes our selling, general and administrative expenses 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

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As such, you should take care when comparing our selling, general and administrative expenses by cost component to those of other companies and of ours for prior periods.

The most significant items affecting our selling, general and administrative expenses during the three and six months ended June 30, 2023 and 2022 are summarized below:

The most significant items affecting our selling, general and administrative expenses during the three and nine months ended September 30, 2023 and 2022 are summarized below:

• Salaries and related benefits increased primarily due to higher wages and benefits resulting from annual merit increases.

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• Provision for doubtful accounts increased in aggregate dollars primarily due to acquisition-related activity.

As of June 30, 2023 , our days sales outstanding were 42.5, or 31.1 days net of deferred revenue, compared to 44.1, or 32.9 days net of deferred revenue, as of June 30, 2022.

As of June 30, 2023, our days sales outstanding for our recycling and solid waste business was 37.9, or 25.9 net of deferred revenue, compared to 38.4, or 26.8 days net of deferred revenue, as of June 30, 2022.

• Other selling, general and administrative expenses increased for the three and six months ended June 30, 2023, due to both an increase in meeting and travel costs and acquisition-related growth.

As of September 30, 2023 , our days sales outstanding were 43.5, or 32.0 days net of deferred revenue, compared to 42.9, or 31.2 days net of deferred revenue, as of September 30, 2022.

• Other selling, general and administrative expenses increased for the three and nine months ended September 30, 2023, due to both an increase in meeting and travel costs and acquisition-related growth.

• We incurred various acquisition integration and deal costs in connection with the acquisition of US Ecology.

During the three and six months ended June 30, 2023, these charges totaled $10.6 million and $18.2 million, respectively, compared to $50.9 million and $55.6 million during the same respective periods in 2022.

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

During the three and nine months ended September 30, 2023, these charges totaled $6.2 million and $24.3 million, respectively, compared to $9.3 million and $65.1 million during the same respective periods in 2022.

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

Restructuring Charges

For a discussion of Restructuring Charges incurred during the three and six months ended June 30, 2023 and 2022, see " Overview " of this Management's Discussion and Analysis of Financial Condition and Results of Operations..

For a discussion of Restructuring Charges incurred during the three and nine months ended September 30, 2023 and 2022, see Overview of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Expense

The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions, for the three and six months ended June 30, 2023 and 2022:

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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Total interest expense $ 127.6 $ 105.2 $ 378.8 $ 282.6

Total interest expense for the three and six months ended June 30, 2023 increased primarily due to additional outstanding debt on our term loan and revolving lines of credit used to fund the purchase of US Ecology and higher interest rates on our floating rate debt.

The increase attributable to our fixed rate debt is primarily due to the issuance of additional senior notes used to refinance amounts outstanding under our Credit Facilities and for general corporate purposes.

For the six months ended June 30, 2023 and 2022, cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $203.6 million and $130.6 million, respectively.

As of June 30, 2023, we had $2,868.8 million of principal floating rate debt including interest rate swap contracts.

Total interest expense for the three and nine months ended September 30, 2023 increased primarily due to additional outstanding debt on our term loan and revolving lines of credit used to fund the purchase of US Ecology and higher interest rates on our floating rate debt.

The increase attributable to our fixed rate debt is primarily due to the issuance of additional senior notes used to refinance amounts outstanding under our term loan and revolving lines of credit and for general corporate purposes.

For the nine months ended September 30, 2023 and 2022, cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $321.5 million and $232.4 million, respectively.

As of September 30, 2023, we had $2,316.4 million of principal floating rate debt including interest rate swap contracts.

If interest rates increased or decreased by 100 basis points on our variable rate debt, annualized interest expense and net cash payments for interest would increase or decrease by approximately $23 million.

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.

Our effective tax rate for the six months ended June 30, 2022 reflects benefits from investments in solar energy assets qualifying for tax credits under Section 48 of the Internal Revenue Code.

Net cash paid for income taxes was $88.0 million and $78.9 million for the six months ended June 30, 2023 and 2022, 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, 2022 reflects benefits from investments in solar energy assets qualifying for tax credits under Section 48 of the Internal Revenue Code.

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

For additional discussion and detail regarding our income taxes, see Note 8, Income Taxes , to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

Summarized financial information regarding our reportable segments for the three months ended June 30, 2023and 2022 (in millions of dollars and as a percentage of revenue in the case of adjusted EBITDA margin) follows.

For totals as well as further detail regarding our reportable segments and the adjustments used to calculate gross Adjusted EBITDA, net Adjusted EBITDA, and adjusted EBITDA margin for each segment, see Note 12, Segment Reporting , of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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.

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 regarding our reportable segments for the three months ended September 30, 2023 and 2022 (in millions of dollars and as a percentage of revenue in the case of adjusted EBITDA margin) follows.

For totals as well as further detail regarding our reportable segments and the adjustments used to calculate Adjusted EBITDA for each segment, see Note 12, Segment Reporting , of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

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

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

Significant changes in the revenue, Adjusted EBITDA and Adjusted EBITDA margins of our reportable segments comparing the three and six months ended June 30, 2023 and 2022 are discussed below.

Net revenue for the three and six months ended June 30, 2023 increased 7.4% and 8.4%, respectively, due to an increase in average yield in all lines of business and volume in our collection and landfill lines of business, partially offset by volume declines in our transfer line of business.

Significant changes in the revenue and Adjusted EBITDA of our reportable segments comparing the three and nine months ended September 30, 2023 and 2022 are discussed below.

Net revenue for both the three and nine months ended September 30, 2023 increased 8.7% due to an increase in average yield in all lines of business and volume in our collection and landfill lines of business, partially offset by volume declines in our transfer line of business.

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

Revenue also increased due to acquisition-related growth.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $509.8 million for the three months ended June 30, 2022, or a 33.0% adjusted EBITDA margin, to $527.1 million for the three months ended June 30, 2023, or a 31.8% adjusted EBITDA margin.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $980.7 million for the six months ended June 30, 2022, or a 32.9% adjusted EBITDA margin, to $1,016.6 million for the six months ended June 30, 2023, or a 31.4% adjusted EBITDA margin.

Adjusted EBITDA margin for the three and six months ended June 30, 2023 was unfavorably impacted by an increase in labor costs, higher third party maintenance costs due to inflationary pressures and a decrease in recycled commodity prices.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $510.6 million for the three months ended September 30, 2022 to $553.8 million for the three months ended September 30, 2023.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $1,491.3 million for the nine months ended September 30, 2022, to $1,570.4 million for the nine months ended September 30, 2023.

Adjusted EBITDA for the three and nine months ended September 30, 2023 was unfavorably impacted by an increase in labor costs, higher third party maintenance costs due to inflationary pressures and a decrease in recycled commodity prices.

The unfavorable impact was partially offset by decreases in fuel costs due to a decrease in average fuel cost per gallon.

Net revenue for the three and six months ended June 30, 2023 increased 6.0% and 8.7%, respectively, due to an increase in average yield in all lines of business.

Additionally, volume increased in our landfill and small-container collection lines of

business, partially offset by declines in our large-container, residential and transfer lines of business.

The increase in landfill volume was primarily attributable to an increase in special waste volume, which was partially offset by a decline in construction and demolition volume.

Net revenue for both the three and nine months ended September 30, 2023 increased 7.2% due to an increase in average yield in all lines of business.

Additionally, volume increased in our landfill and small-container collection lines of business, partially offset by declines in our large-container and residential collection lines of business.

The increase in landfill volume was primarily attributable to an increase in special waste volume, which was partially offset by a decline in solid waste, and construction and demolition volumes.

Revenue also increased due to acquisition-related growth.

Adjusted EBITDA in Group 2 increased in aggregate dollars from $449.4 million for the three months ended June 30, 2022, or a 28.5% adjusted EBITDA margin, to $499.2 million for the three months ended June 30, 2023, or a 29.9% adjusted EBITDA margin.

Adjusted EBITDA in Group 2 increased in aggregate dollars from $867.8 million for the six months ended June 30, 2022, or a 28.9% adjusted EBITDA margin, to $964.3 million for the six months ended June 30, 2023, or a 29.5% adjusted EBITDA margin.

Adjusted EBITDA margin for the three and six months ended June 30, 2023 was favorably impacted by a decrease in fuel costs due to a decrease in average fuel cost per gallon and effective management of disposal costs.

The increase in adjusted EBITDA margin was partially offset by higher third party maintenance costs due to inflationary pressures and a decrease in recycled commodity prices.

Net revenue for the three and six months ended June 30, 2023 increased due to acquisition-related growth, specifically the acquisition of US Ecology.

Adjusted EBITDA in Group 3 increased in aggregate dollars from $50.4 million for the three months ended June 30, 2022, or a 17.1% adjusted EBITDA margin, to $89.8 million for the three months ended June 30, 2023, or a 22.5% adjusted EBITDA margin.

Adjusted EBITDA in Group 3 increased in aggregate dollars from $64.4 million for the six months ended June 30, 2022, or a 16.4% adjusted EBITDA margin, to $175.3 million for the six months ended June 30, 2023, or a 21.7% adjusted EBITDA margin.

Adjusted EBITDA margin for the three and six months ended June 30, 2023 increased primarily due to favorable pricing, acquisition-related growth and realized cost synergies associated with the US Ecology acquisition.

Adjusted EBITDA in Group 2 increased in aggregate dollars from $466.1 million for the three months ended September 30, 2022, to $500.2 million for the three months ended September 30, 2023.

Adjusted EBITDA in Group 2 increased in aggregate dollars from $1,333.9 million for the nine months ended September 30, 2022, to $1,464.5 million for the nine months ended September 30, 2023.

Adjusted EBITDA for the three and nine months ended September 30, 2023 was favorably impacted by a decrease in fuel costs due to a decrease in average fuel cost per gallon and effective management of disposal costs.

The increase in adjusted EBITDA was partially offset by higher third party maintenance costs due to inflationary pressures and a decrease in recycled commodity prices.

Net revenue for both the three and nine months ended September 30, 2023 increased due to acquisition-related growth, specifically the acquisition of US Ecology.

Adjusted EBITDA in Group 3 increased in aggregate dollars from $74.6 million for the three months ended September 30, 2022, to $91.7 million for the three months ended September 30, 2023.

Adjusted EBITDA in Group 3 increased in aggregate dollars from $139.1 million for the nine months ended September 30, 2022, to $267.0 million for the nine months ended September 30, 2023.

Adjusted EBITDA for the three and nine months ended September 30, 2023 increased primarily due to favorable pricing, acquisition-related growth and realized cost synergies associated with the US Ecology acquisition.

Landfill and Environmental Matters

Available Airspace

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.

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

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Net of Closures Airspace

Consumed Changes in Engineering Estimates Balance as of June 30, 2023

Consumed Changes in Engineering Estimates Balance as of September 30, 2023

Cubic yards (in millions):

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Before airspace included in an expansion area is determined to be probable expansion airspace and, therefore, included in our calculation of total available disposal capacity, it must meet all of our expansion criteria.

As of June 30, 2023 , 15 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

As of September 30, 2023 , 14 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

At projected annual volumes, these 14 landfills have an estimated remaining average site life of 47 years, including probable expansion airspace.

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Property and Equipment

The following tables reflect the activity in our property and equipment accounts for the six months ended June 30, 2023:

The following tables reflect the activity in our property and equipment accounts for the nine months ended September 30, 2023:

Gross Property and Equipment

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Transfers, Foreign Currency Translation

Adjustments Balance as of June 30, 2023

Adjustments Balance as of September 30, 2023

Land $ 779.7 $ (0.6) $ (2.0) $ 51.7 $ — $ — $ 0.4 $ 829.2

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Divestitures Adjustments

Obligations Impairments, Transfers, Foreign Currency Translation and Other Adjustments Balance as of June 30, 2023

Obligations Impairments, Transfers, Foreign Currency Translation and Other Adjustments Balance as of September 30, 2023

Landfill development costs $ (5,058.9) $ (349.7) $ — $ — $ 2.9 $ 0.4 $ (5,405.3)

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The following is a summary of our cash and cash equivalents and restricted cash and marketable securities balances as of:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cash and cash equivalents $ 157.5 $ 143.4

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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

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We expect existing cash, cash equivalents, restricted cash and marketable securities, cash flows from operations and financing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future.

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

Our known current- and long-term uses of

cash include, among other possible demands:

(1) capital expenditures and leases;

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In 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $1.0 billion outstanding at any one time (the Commercial Paper Cap).

As of June 30, 2023, we had $750.0 million principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 5.287% and weighted average maturity of 11 days.

As of September 30, 2023, we had $523.0 million principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 5.447% and weighted average maturity of 8 days.

Summary of Cash Flow Activity

The major components of changes in cash flows are discussed in the following paragraphs.

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Cash Provided by Operating Activities $ 2,719.3 $ 2,380.0

Cash Used in Investing Activities $ (2,100.8) $ (3,700.9)

Cash Used in Financing Activities $ (33.7) $ 1,798.9

Cash (Used in) Provided by Financing Activities $ (579.2) $ 1,366.2

Cash Flows Provided by Operating Activities

We use cash flows from operations to fund capital expenditures and leases, acquisitions, dividend payments, share repurchases, interest payments and repayments of debt and other long-term obligations, and payments for asset retirement obligations and environmental liabilities.

The most significant items affecting the comparison of our cash flows provided by operating activities for the six months ended June 30, 2023 and 2022 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, increased our cash flow from operations by $70.5 million during the six months ended June 30, 2023, compared to a decrease of $2.0 million during the same period in 2022, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $52.0 million during the six months ended June 30, 2023 due to the timing of billings net of collections, compared to a $150.4 million increase in the same period in 2022.

As of June 30, 2023, our days sales outstanding were 42.5, or 31.1 days net of deferred revenue, compared to 44.1, or 32.9 days net of deferred revenue, as of June 30, 2022.

• Our prepaid expenses and other assets decreased $138.5 million during the six months ended June 30, 2023, compared to a $72.6 million decrease in the same period in 2022, primarily driven by a decrease of tax receivables due to the timing of our estimated tax payments.

Cash paid for incomes taxes was $88.0 million and $78.9 million for the six months ended June 30, 2023 and 2022, respectively.

• Our accounts payable increased $35.1 million during the six months ended June 30, 2023, compared to a $167.1 million increase in the same period in 2022, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $24.5 million during the six months ended June 30, 2023, compared to $18.0 million in the same period in 2022.

The most significant items affecting the comparison of our cash flows provided by operating activities for the nine months ended September 30, 2023 and 2022 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, increased our cash flow from operations by $68.9 million during the nine months ended September 30, 2023, compared to a decrease of $112.5 million during the same period in 2022, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $161.0 million during the nine months ended September 30, 2023 due to the timing of billings net of collections, compared to a $206.1 million increase in the same period in 2022.

As of September 30, 2023, our days sales outstanding were 43.5, or 32.0 days net of deferred revenue, compared to 42.9, or 31.2 days net of deferred revenue, as of September 30, 2022.

• Our prepaid expenses and other assets decreased $121.4 million during the nine months ended September 30, 2023, compared to a $28.0 million decrease in the same period in 2022, primarily driven by a decrease of tax receivables due to the timing of our estimated tax payments.

Cash paid for incomes taxes was $137.9 million and $90.5 million for the nine months ended September 30, 2023 and 2022, respectively.

• Our accounts payable increased $93.5 million during the nine months ended September 30, 2023, compared to a $97.7 million increase in the same period in 2022, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $40.5 million during the nine months ended September 30, 2023, compared to $35.6 million in the same period in 2022.

The increase in cash paid for capping, closure, and post-closure obligations is primarily due to the timing of capping and post-closure payments at certain of our landfill sites.

• Cash paid for remediation obligations was $0.1 million higher during the six months ended June 30, 2023, compared to the same period in 2022.

In addition, cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $203.6 million and $130.6 million for the six months ended June 30, 2023 and 2022, respectively.

• Cash paid for remediation obligations was $5.9 million lower during the nine months ended September 30, 2023, compared to the same period in 2022.

In addition, cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $321.5 million and $232.4 million for the nine months ended September 30, 2023 and 2022, respectively.

Cash Flows Used in Investing Activities

The most significant items affecting the comparison of our cash flows used in investing activities for the six months ended June 30, 2023 and 2022 are summarized below:

• Capital expenditures during the six months ended June 30, 2023 were $714.3 million, compared with $647.3 million for the same period in 2022.

• During the six months ended June 30, 2023 and 2022, we paid $987.7 million and $2,655.0 million, respectively, for acquisitions and investments.

The most significant items affecting the comparison of our cash flows used in investing activities for the nine months ended September 30, 2023 and 2022 are summarized below:

• Capital expenditures during the nine months ended September 30, 2023 were $1,083.2 million, compared with $924.8 million for the same period in 2022.

• During the nine months ended September 30, 2023 and 2022, we paid $1,051.1 million and $2,847.6 million, respectively, for acquisitions and investments.

We intend to finance future capital expenditures and acquisitions through cash on hand, restricted cash held for capital expenditures, cash flows from operations, our revolving credit facilities, and tax-exempt bonds and other financings.

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Cash Flows (Used in) Provided by Financing Activities

The most significant items affecting the comparison of our cash flows (used in) provided by financing activities for the six months ended June 30, 2023 and 2022 are summarized below:

• Net proceeds from notes payable and long-term debt and senior notes were $297.9 million during the six months ended June 30, 2023, compared to net proceeds of $2,312.0 million in the same period in 2022.

• During the six months ended June 30, 2023, we did not repurchase any shares of our common stock, compared to repurchases of 1.6 million shares for $203.5 million during the same period in 2022.

• Dividends paid were $313.0 million and $291.2 million during the six months ended June 30, 2023 and 2022, respectively.

The most significant items affecting the comparison of our cash flows (used in) provided by financing activities for the nine months ended September 30, 2023 and 2022 are summarized below:

• Net proceeds from notes payable and long-term debt and senior notes were $99.1 million during the nine months ended September 30, 2023, compared to net proceeds of $2,024.3 million during the same period in 2022.

• During the nine months ended September 30, 2023, we repurchased 1.3 million shares of our common stock for $190.4 million, compared to repurchases of 1.6 million shares for $203.5 million during the same period in 2022.

• Dividends paid were $469.5 million and $436.5 million during the nine months ended September 30, 2023 and 2022, respectively.

Financial Condition

Debt Obligations

As of June 30, 2023 , we had $152.8 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations.

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 $932.3 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations.

All of our tax-exempt financings are remarketed either quarterly or semiannually by remarketing agents to effectively maintain a variable yield, with the exception of one tax-exempt financing with an initial remarketing period of 10 years.

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

If the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us.

In the event of a failed remarketing, as of June 30, 2023 , we had availability under our $3.0 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

In the event of a failed remarketing, as of September 30, 2023 , we had availability under our $3.0 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

In the event of a failed re-borrowing, 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 tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of June 30, 2023 .

Accordingly, we have classified these tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of September 30, 2023 .

For further discussion of the components of our overall debt, see Note 7, Debt, 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 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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As permitted by the Credit Facility, we have the right to request two one-year extensions of the maturity date, but none of the lenders are committed to participate in such extensions.

The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.

The Credit Facility also includes a

feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.

In February 2023, we entered into Amendment No.

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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 our 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 our 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 our 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 our 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.

Financial and Other Covenants

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

As of June 30, 2023, our total debt to EBITDA ratio was 2.97 compared to the 3.75 maximum allowed by the covenants.

As of June 30, 2023, we were in compliance with the covenants unde r our Credit Facility, and we exp ect to be in compliance throughout the remainder of 2023.

As of September 30, 2023, our total debt to EBITDA ratio was approximately 2.9 compared to the 3.75 maximum allowed by the covenants.

As of September 30, 2023, we were in compliance with the covenants unde r our Credit Facility, and we exp ect to be in compliance throughout the remainder of 2023.

EBITDA, which is a non-U.S.

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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.

weighted average interest rate is 6.002%.

The current weighted average interest rate 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.

During the three months ended June 30, 2023, we used a portion of the proceeds from our senior note issuance described below under Senior Notes and Debentures to pay down a portion of the Term Loan Facility.

During the three months ended September 30, 2023, we used a portion of the proceeds from our senior note issuance described below under Senior Notes and Debentures to pay down a portion of the Term Loan Facility.

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

We had $700.0 million and $1.0 billion in 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 in borrowings outstanding under the Term Loan Facility as of September 30, 2023 and December 31, 2022, respectively.

Commercial Paper Program

In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed the Commercial Paper Cap.

In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund 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.

Senior Notes and Debentures

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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.

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.

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.

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Our continued access to the debt capital markets and to new financing facilities, as well as our borrowing costs, depend on multiple factors, including market conditions, our operating performance and maintaining strong credit ratings.

As of June 30, 2023, our credit ratings were BBB+, Baa1 and BBB+ by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively.

As of September 30, 2023, our credit ratings were BBB+, Baa1 and BBB+ by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively.

If our credit ratings were downgraded, especially any downgrade to below investment grade, our ability to access the debt markets with the same flexibility that we have experienced historically, our cost of funds and other terms for new debt issuances, could be adversely impacted.

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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 2. Management’s Discussion and Analysis