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Item 7. Management’s Discussion and Analysis

2024-02-29 compared with 2023-02-23 · 177 added, 177 removed, 727 unchanged (33% of the section changed)

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Recent Developments

Acquisition of US Ecology

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

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

This acquisition expands our existing environmental solutions footprint and expands our platform to provide customers in North America with environmental solutions from collection to disposal, including recycling, solid waste, special waste, hazardous waste, container rental and field services.

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

For the year ended December 31, 2022, the financial results of US Ecology are included within our Group 3 reportable segment.

Impact of the COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of a new strain of coronavirus (COVID-19) a pandemic.

In 2020, certain customers in our small- and large-container businesses began adjusting their service levels, which included a decrease in the frequency of pickups or a temporary pause in service.

In addition, we experienced a decline in volumes disposed at certain of our landfills and transfer stations.

As service levels decreased, we also experienced a decrease in certain costs of our operations which are variable in nature.

This decline in service activity peaked in 2020 and has improved sequentially thereafter, returning to pre-pandemic levels in 2022.

The effects of the COVID-19 pandemic on our business are described in more detail in the Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

2024 Financial Guidance

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We expect revenue to be in the range of $16.100 billion to $16.200 billion.

We expect an increase in average yield of approximately 5.5% and volume growth to be in a range of 0.5% to 1.0%.

Average yield on related business revenue is expected to be 6.5%.

We expect an increase in average yield of approximately 5.5% to 6.0% and volume growth to be in a range of 0.0% to 0.5%.

Average yield on related business revenue is expected to be in a range of 6.5% to 7.0%.

Adjusted Diluted Earnings per Share

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Diluted earnings per share $ 5.86 to 5.92 $ 5.47

Gain on business divestitures and impairments, net — (0.01)

Restructuring charges 0.08 0.08

Gain on business divestitures and impairments, net — (0.03)

Adjustment to withdrawal liability for multiemployer pension funds — 0.01

US Ecology, Inc.

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

As of December 31, 2022, we operated across the United States and Canada through 353 collection operations, 233 transfer stations, 71 recycling centers, 206 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.

As of December 31, 2023, we operated across the United States and Canada through 364 collection operations, 246 transfer stations, 74 recycling centers, 207 active landfills, 3 treatment, recovery and disposal facilities, 22 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells, 12 deep injection wells and 1 polymer center.

We are engaged in 76 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 126 closed landfills.

Revenue for the year ended December 31, 2023 increased by 10.8% to $14,964.5 million compared to $13,511.3 million in 2022.

This change in revenue is due to increased volume of 2.4%, average yield of 5.2%, acquisitions, net of divestitures of 9.6%, fuel recovery fees of 2.6% and environmental solutions revenue of 0.5%, partially offset by decreased recycling processing and commodity sales of 0.6%.

Additionally, revenue decreased 0.1% due to one less workday in 2022 as compared to 2021.

This change in revenue is due to increased volume of 0.5%, average yield of 6.1%, acquisitions, net of divestitures of

4.8%, and environmental solutions revenue of 0.1%, partially offset by decreased recycling processing and commodity sales of 0.5% and fuel recovery fees of 0.2%

The following table summarizes our revenue, costs and expenses for the years ended December 31, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

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Adjustment to withdrawal liability for multiemployer pension funds 4.5 — (1.6) —

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

Gain on business divestitures and impairments, net (3.6) — (6.3) —

Restructuring charges 33.2 0.2 27.0 0.2

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Restructuring charges 33.2 8.7 24.5 0.08 27.0 7.1 19.9 0.06

(Gain) loss on business divestitures and impairments, net (6.3) (2.5) (3.8) (0.01) 0.5 (5.5) 6.0 0.02

Loss on extinguishment of debt and other related costs (1)

0.2 — 0.2 — — — — —

Gain on business divestitures and impairments, net (3.6) 5.1 (8.7) (0.03) (6.3) (2.5) (3.8) (0.01)

Adjustment to withdrawal liability for multiemployer pension funds (2)

4.5 1.2 3.3 0.01 (1.6) (0.4) (1.2) —

Accelerated vesting of compensation expense for CEO transition — — — — 22.0 — 22.0 0.07

US Ecology, Inc.

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(1) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the year ended December 31, 2023.

(2) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the year ended December 31, 2022.

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

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We use these measures, and believe investors will find them helpful, in understanding the ongoing performance of our operations separate from items that have a disproportionate impact on our results for a particular period.

We have incurred comparable charges and costs in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods.

We have incurred comparable charges and costs in prior periods, and similar types of adjustments can

reasonably be expected to be recorded in future periods.

Our definitions of adjusted pre-tax income, adjusted tax impact, adjusted net income – Republic, and adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

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Restructuring charges.

In 2022 and 2021, we incurred restructuring charges of $27.0 million and $16.6 million , respectively, primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems.

These systems were placed into production in 2022, and we do not expect to incur future costs related to the implementation of these systems.

In 2023 and 2022, we incurred restructuring charges of $33.2 million and $27.0 million , respectively.

Of the 2023 charges, $9.5 million related to the early termination of certain leases and $23.7 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 $39.4 million and $19.8 million during 2023 and 2022, respectively, related to these restructuring efforts.

In 2023, we expect to incur restructuring charges of approximately $20 million, primarily related to the redesign of our customer billing and asset management software systems.

In 2024, we expect to incur restructuring charges of approximately $35 million, primarily related to the redesign of our asset management, and customer and order management software systems.

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

(Gain) loss on business divestitures and impairments, net.

Loss on extinguishment of debt and other related costs .

During 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 2022 , we did not incur any losses on extinguishment of debt.

Gain on business divestitures and impairments, net.

During 2023, we recorded a net gain on business divestitures and impairments of $3.6 million.

During 2021, we recorded a loss of $0.5 million related to business divestitures and asset impairments.

Additionally, we recognized an increase in our deferred tax provision of $5.5 million due to a change in our United States operational footprint as a result of certain acquisitions that closed during the period.

During 2022, we recorded a net gain of $6.3 million related to business divestitures and asset impairments.

Adjustment to withdrawal liability for multiemployer pension funds.

During 2023, we recorded a charge to earnings of $4.5 million for a withdrawal event at multiemployer pension funds to which we contribute.

During 2022, we recorded a net reduction of $1.6 million related to the remeasurement of withdrawal costs liabilities from multiemployer pension plans.

As we obtain updated information regarding multiemployer pension funds, the factors used in deriving our estimated withdrawal liabilities will be subject to change, which may adversely impact our reserves for withdrawal costs.

Accelerated vesting of compensation expense for CEO transition.

In June 2021, Donald W.

Slager retired as Chief Executive Officer (CEO) of Republic Services, Inc.

During 2021, we recognized a charge of $22.0 million primarily related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

US Ecology, Inc.

acquisition integration and deal costs.

During the year ended December 31, 2022, we incurred $77.3 million of acquisition integration and deal costs in connection with the acquisition of US Ecology, which included certain costs to close the acquisition and integrate the business, including stock compensation expense for unvested awards at closing as well as severance and change-in-control payments.

The acquisition closed on May 2, 2022 .

In 2023 , we expect to incur costs of approximately $35 million to integrate the US Ecology business, primarily related to the integration of certain software systems as well as rebranding the business.

We expect to be substantially complete with our integration activities by the end of 2023 .

In 2023 and 2022, we incurred acquisition integration and deal costs of $33.5 million and $77.3 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, and our integration of the business was substantially complete as of December 31, 2023.

Results of Operations

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We also measure changes in average yield and core price 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 strategies.

The following table reflects average yield and core price as a percentage of related-business revenue for the years ended December 31, 2022 and 2021:

The following table reflects average yield, core price and volume as a percentage of related-business revenue for the years ended December 31, 2023 and 2022:

Years Ended December 31,

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Core price 8.9 % 7.3 %

Volume 0.7 % 2.6 %

During 2023, we experienced the following changes in our revenue as compared to 2022:

• Average yield increased revenue by 6.1% due to positive pricing changes in all our collection and disposal lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, increased revenue by 2.6%, primarily due to an increase in fuel prices compared to 2021 and an increase in the total revenue subject to the fuel recovery fees.

• Volume increased revenue by 2.4% during 2022 as compared to 2021 primarily due to volume growth in our landfill and all our collection lines of business, partially offset by a decrease in volume in our transfer line of business.

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

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, decreased revenue by 0.2%, primarily due to a decrease in fuel prices compared to 2022, partially offset by an increase of total revenue subject to the fuel recovery fees.

• Volume increased revenue by 0.5% during 2023 as compared to 2022 primarily due to volume growth in our landfill and our small container collection lines of business, partially offset by a decrease in volume in our large container and residential collections lines of business and our transfer line of business.

The volume increase in our landfill line of business is primarily attributable to increased special waste and solid waste volumes, partially offset by a decrease in volume in our construction and demolition line of business.

• Recycling processing and commodity sales decreased revenue by 0.5% primarily due to a decrease in overall commodity prices as compared to 2022.

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

• During 2022, environmental solutions revenue increased by 0.5% primarily due to an increase in volumes, including those driven by an increase in rig counts and drilling activity.

This revenue increase excludes the impact from our acquisition of US Ecology.

• Acquisitions, net of divestitures, increased revenue by 9.6%, reflecting the results of our continued growth strategy of acquiring solid waste, recycling and environmental services companies, including US Ecology, that complement and expand our existing business platform.

• During 2023, environmental solutions revenue increased by 0.1% 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 4.8%, reflecting the results of our continued growth strategy of acquiring 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 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.

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

The following table summarizes the major components of our cost of operations for the years ended December 31, 2023 and 2022 (in millions of dollars and as a percentage of revenue):

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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.

Our cost of operations increased for the year ended December 31, 2022 compared to the same period in 2021 as a result of the following:

• Labor and related benefits increased in aggregate dollars due to higher hourly and salaried wages as a result of annual merit increases and an increase in service levels attributable to economic recovery from the COVID-19 pandemic.

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the increase in labor and related benefits in aggregate dollars.

• Transfer and disposal costs increased in aggregate dollars primarily due to acquisition-related growth, including the acquisition of US Ecology.

Transfer and disposal costs also increased in aggregate dollars as a result of higher collection volumes and an increase in third party disposal rates.

Our cost of operations increased in aggregate dollars for the year ended December 31, 2023 compared to the same period in 2022 as a result of the following:

• 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.

• Transfer and disposal costs increased in aggregate dollars primarily due to acquisition-related growth and as a result of higher collection volumes.

During both 2023 and 2022, approximately 68% of the total solid waste volume we collected was disposed at landfill sites that we own or operate (internalization).

• Maintenance and repairs expense increa sed in aggregate dollars due to an increase in the price of replacement parts as well as an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

• Transportation and subcontract costs increased in 2022 due to an increase in third-party transportation fees, partially driven by the higher cost of fuel passed on through higher transportation surcharges, and an increase in subcontract work attributable to a corresponding increase in non-core revenues as compared to 2021.

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the increase in transportation and subcontract costs.

• Our fuel costs increased due to an increase in the average diesel fuel cost per gallon.

• 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.

• Transportation and subcontract costs increased in aggregate dollars in 2023 due to an increase in transportation rates as compared to 2022.

Acquisition-related growth also contributed to the increase in transportation and subcontract costs.

• 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 2023 was $4.21 compared to $4.99 for 2022.

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• Disposal fees and taxes increased in aggregate dollars in 2023 primarily due to increased royalties and host fees from an increase in volume at certain landfills as compared to 2022.

• Landfill operating costs increased in aggregate dollars during 2022 primarily due to increased leachate treatment, transportation and disposal costs due in part to increased rainfall in select geographic regions, as well as landfill gas and other maintenance costs.

• Landfill operating costs increased during 2023 primarily due to increased leachate treatment, transportation and disposal costs due in part to increased rainfall in select geographic regions, landfill gas and other maintenance costs as well as favorable remediation adjustments recorded during 2022 which did not recur in 2023.

• Risk management expenses increased primarily due to unfavorable actuarial development in our auto liability claims as well as higher premium costs.

• During 2022, we incurred $0.3 million of acquisition integration and deal costs within cost of operations in connection with the acquisition of US Ecology.

• Other costs of operations increased during 2023 due to increased occupancy and facility related expenses, acquisition-related activity and higher third-party truck and equipment rental expense to support higher volumes.

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Depreciation and amortization of property and equipment increased primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased due to higher landfill disposal volumes primarily driven by special waste, solid waste and construction and demolition volumes coupled with an increase in our overall average depletion rate.

Landfill depletion and amortization expense increased in aggregate dollars due to higher landfill disposal volumes primarily driven by special waste and solid waste volumes as well as an increase in our overall average depletion rates.

Additionally, we recognized certain favorable amortization adjustments related to our asset retirement obligations in 2022 that did not recur in 2023.

Amortization of Other Intangible Assets

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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 $52.1 million, or 0.4%, for the year ended December 31, 2022, compared to $40.5 million, or 0.4% revenue, for 2021.

Expenses for amortization of other assets were $66.7 million, or 0.5% of revenue, for the year ended December 31, 2023, compared to $52.1 million, or 0.4% of revenue, for 2022.

Accretion Expense

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Subtotal 1,575.2 10.5 1,377.3 10.2

Accelerated vesting of compensation expense for CEO transition — — 22.0 0.2

US Ecology, Inc.

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The most significant items affecting our selling, general and administrative expenses during 2023 as compared to 2022 are summarized below:

• Salaries and related benefits increased in aggregate dollars primarily due to higher wages, benefits and other payroll related items resulting from annual merit increases, offset, in part, by lower management incentive expenses.

Acquisition-related growth, including the acquisition of US Ecology, also contributed to the growth in salaries and related benefits in aggregate dollars.

• Provision for doubtful accounts increased primarily due to an increase in days sales outstanding and acquisition-related activity.

• Salaries and related benefits increased primarily due to higher wages and benefits resulting from annual merit increases as well as higher management incentive expense as a result of outperforming our annual incentive metrics.

Acquisition-related growth also contributed to the growth in salaries and related benefits in aggregate dollars.

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

As of December 31, 2023 , our days sales outstanding were 42.0, or 30.9 days net of deferred revenue, compared to 43.3, or 31.8 days net of deferred revenue, as of December 31, 2022.

Excluding our acquisition of US Ecology, our days sales outstanding were 39.1, or 27.3 days net of deferred revenue, as of December 31, 2022.

• Other selling, general and administrative expenses increased for the year ended December 31, 2022, largely due to an increase in advertising and travel costs and acquisition-related growth, including US Ecology.

• In June 2021, Donald W.

Slager retired as CEO of Republic Services, Inc.

During the year ended December 31, 2021, we recognized a charge of $22.0 million, related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

• During the year ended December 31, 2022, we incurred $77.0 million of acquisition integration and deal costs within selling, general and administration expense 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.

• Other selling, general and administrative expenses increased for the year ended December 31, 2023, largely due to both an increase in meeting and travel costs and acquisition-related growth.

• During the year ended December 31, 2023, we incurred $33.5 million of acquisition integration and deal costs within selling, general and administration expense 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, while the 2022 costs included certain costs to close the acquisition.

Adjustment to Withdrawal Liability for Multiemployer Pension Funds

During t he year ended December 31, 2022 , we recorded a net reduction of $1.6 million related to the remeasurement of withdrawal costs liabilities from multiemployer pension plans.

During t he year ended December 31, 2023 , we recorded a $4.5 million charge related to the withdrawal from a certain multiemployer pension plan.

(Gain) loss on Business Divestitures and Impairments, Net

Gain on Business Divestitures and Impairments, Net

We strive to have a leading market position in each of the markets we serve, or have a clear path on how we will achieve a leading market position over time.

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Business divestitures could result in gains, losses or impairment charges that m ay be material to our results of operations in a given period.

During the years ended December 31, 2022 and 2021, we recorded a net gain (loss) on business divestitures and impairments of $6.3 million and $0.5 million, respectively.

During the years ended December 31, 2023 and 2022, we recorded a net gain on business divestitures and impairments of $3.6 million and $6.3 million, respectively.

Restructuring Charges

These systems were placed into production in 2022, and we do not expect to incur future costs related to the implementation of these systems.

In 2023 and 2022, we incurred restructuring charges of $33.2 million and $27.0 million , respectively.

Of the 2023 charges, $9.5 million is related to the early termination of certain leases and $23.7 million related to the redesign of our asset management, and customer and order management software systems.

We paid $39.4 million and $19.8 million during 2023 and 2022, respectively, related to these restructuring efforts.

In 2023, we expect to incur additional restructuring charges of approximately $20 million primarily related to the implementation of replacement billing and collection software systems.

In 2024, we expect to incur restructuring charges of approximately $35 million, primarily related to the redesign of our customer billing and asset management software systems.

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

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Total interest expense $ 508.2 $ 395.6

Total interest expense for 2022 increased compared to 2021 primarily due to additional outstanding debt to fund the purchase of US Ecology and higher interest rates on our floating rate debt.

Total interest expense for 2023 increased compared to 2022 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.

Cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $422.9 million and $311.5 million for the years ended December 31, 2023 and 2022, respectively.

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Net cash paid for income taxes was approximately $343 million and $185 million for the years ended December 31, 2023 and 2022, respectively.

During 2022, we acquired non-controlling interests in limited liability companies established to own solar energy assets that qualified for investment tax credits under Section 48 of the Internal Revenue Code.

During 2023, we acquired non-controlling interests in limited liability companies established to own renewable energy assets that qualified for investment tax credits under Section 48 of the Internal Revenue Code.

We account for these investments using the equity method of accounting and recognize our share of income or loss and other reductions in the value of our investment in loss from unconsolidated equity method investments within our consolidated statements of income.

For further discussion regarding our equity method accounting, see Note 3, Business Acquisitions, Investments and Restructuring Charges .

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

Our 2021 tax provision was reduced by approximately $126 million related to the tax credits from our non-controlling interest in limited liability companies established to own solar energy assets.

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law.

The IRA, among other things, implements a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on stock repurchases and extends, enhances and creates several tax incentives to promote clean energy.

While we continue to evaluate the IRA, at present, outside of the potential for future energy credits, we do not believe it will have a material effect on our audited consolidated financial statements.

We have deferred tax assets related to state net operating loss carryforwards with an estimated tax effect of approximately $77 million available as of December 31, 2022.

Our 2023 tax provision reflects a benefit of $86.9 million due to the tax credits related to these investments.

In addition, during 2023 we resolved IRS examinations for our tax years 2014 - 2018 that, in the aggregate, reduced our tax provision by approximately $20.8 million .

Our 2022 tax provision was reduced by approximately $139 million related to the tax credits from our non-controlling interest in limited liability companies established to own renewable energy assets.

We have deferred tax assets related to state net operating loss carryforwards with an estimated tax effect of $64.5 million available as of December 31, 2023.

These state net operating loss carryforwards expire at various times between 2024 and 2043.

We believe that it is more likely than not that the benefit from some of our state net operating loss carryforwards will not be realized due to limitations on these loss carryforwards in certain states.

In recognition of this risk, as of December 31, 2022, we have provided a valuation allowance of approximately $42 million.

In recognition of this risk, as of December 31, 2023, we have provided a valuation allowance of $43.4 million.

For additional discussion and detail regarding our income taxes, see Note 11, Income Taxes , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

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

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

Group 2 is our recycling and solid waste business operating primarily in geographic areas located in the southeastern and mid-western United States and the eastern seaboard of the United States.

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

Group 2 is our recycling and waste business operating primarily in geographic areas located in the southeastern and mid-western United States, the eastern seaboard of the United States, and Canada.

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

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

Prior to the third quarter of 2022, our environmental solutions operating segment, now referred to as our Group 3 reportable segment, was aggregated with Corporate entities and other.

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

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

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 by reportable segment.

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 years ended December 31, 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 gross Adjusted EBITDA, net Adjusted EBITDA and adjusted EBITDA margin for each segment, see Note 15, Segment Reporting , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Group 1 Group 2 Group 3 Corporate entities and other

Year Ended December 31, 2022

For totals as well as further detail regarding our reportable segments and the adjustments used to calculate gross Adjusted EBITDA for each segment, see Note 15, Segment Reporting , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Group 1 Group 2 Recycling & Waste Subtotal (1)

(Environmental Solutions) Corporate entities and other Total

Gross Revenue $ 7,769.2 $ 7,563.2 $ 15,332.4 $ 1,703.6 $ 242.7 $ 17,278.7

Intercompany Revenue (1,170.8) (1,008.4) (2,179.2) (58.8) (76.2) (2,314.2)

Revenue Allocations 95.8 90.6 186.4 (19.9) (166.5) —

Net Revenue $ 6,694.2 $ 6,645.4 $ 13,339.6 $ 1,624.9 $ — $ 14,964.5

Gross Adjusted EBITDA $ 1,979.4 $ 1,685.9 $ 253.7 $ 10.3

Adjusted EBITDA allocations 27.5 25.4 (42.6) (10.3)

Net Adjusted EBITDA $ 2,006.9 $ 1,711.3 $ 211.1 $ —

Adjusted EBITDA margin 32.2 % 28.2 % 17.4 % — %

Adjusted EBITDA $ 2,134.7 $ 1,964.0 $ 4,098.7 $ 348.4 $ — $ 4,447.1

Capital Expenditures $ 707.4 $ 540.1 $ 1,247.5 $ 146.2 $ 237.4 $ 1,631.1

Total Assets $ 13,665.1 $ 10,959.5 $ 24,624.6 $ 4,481.3 $ 2,304.2 $ 31,410.1

Year Ended December 31, 2021

Gross Revenue $ 7,106.6 $ 7,028.6 $ 14,135.2 $ 1,262.5 $ 247.5 $ 15,645.2

Intercompany Revenue (1,089.6) (945.0) $ (2,034.6) (46.6) (52.7) (2,133.9)

Revenue Allocations 103.5 99.0 $ 202.5 (7.7) (194.8) —

Net Revenue $ 6,120.5 $ 6,182.6 $ 12,303.1 $ 1,208.2 $ — $ 13,511.3

Gross Adjusted EBITDA $ 1,841.1 $ 1,494.8 $ 44.6 $ 3.0

Adjusted EBITDA allocations 1.6 1.4 — (3.0)

Net Adjusted EBITDA $ 1,842.7 $ 1,496.2 $ 44.6 $ —

Adjusted EBITDA margin 32.6 % 27.6 % 20.0 % — %

Adjusted EBITDA $ 1,967.4 $ 1,750.8 $ 3,718.2 $ 211.1 $ — $ 3,929.3

Capital Expenditures $ 620.1 $ 533.5 $ 1,153.6 $ 141.7 $ 158.7 $ 1,454.0

Total Assets $ 12,418.1 $ 10,509.8 $ 22,927.9 $ 4,086.3 $ 2,038.7 $ 29,052.9

Significant changes in the revenue, Adjusted EBITDA and Adjusted EBITDA margin of our reportable segments for 2022 compared to 2021 are discussed below.

Net revenue for the year ended December 31, 2022 increased 10.4% from 2021 due to an increase in average yield and volume in all lines of business.

The increase in landfill volume was attributable to an increase in special waste and construction and demolition volumes, offset in part by a decrease in solid waste volumes.

Revenue also increased due to acquisition-related growth.

Adjusted EBITDA in Group 1 increased in aggregate dollars from $1,842.7 million for the year ended December 31, 2021, or a 32.6% adjusted EBITDA margin, to $2,006.9 million, or a 32.2% adjusted EBITDA margin for the year ended December 31, 2022.

Adjusted EBITDA margin for the year ended December 31, 2022 was unfavorably impacted by an increase in vehicle and equipment rental fees, transportation and subcontract costs driven by increases in volume, as well as higher disposal costs due to an increase in third party disposal rates, higher maintenance costs due to inflationary pressures on parts and materials and increased transportation and subcontract costs driven by the increase in volume.

The unfavorable impact was partially offset by the increase in revenue attributable to both acquisition activity and the economic recovery from the COVID-19 pandemic.

Net revenue for the year ended December 31, 2022 increased 12.2% from 2021 due to an increase in average yield in all lines of business and volume in our landfill and small- and large-container collection lines of business.

These increases were partially offset by volume declines in our residential and transfer station lines of business.

(1) The Recycling & Waste Subtotal represents the combined results of our Group 1 and Group 2 reportable segments.

Significant changes in the revenue and Adjusted EBITDA of our reportable segments for 2023 compared to 2022 are discussed below.

Adjusted EBITDA in Group 1 increased from $1,967.4 million for the year ended December 31, 2022 to $2,134.7 million for the year ended December 31, 2023.

The most significant items impacting adjusted EBITDA in Group 1 during the year ended December 31, 2023 compared to the year ended December 31, 2022 include:

• Net revenue for the year ended December 31, 2023 increased 9.4% from 2022 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 2 increased from $1,496.2 million for the year ended December 31, 2021, or a 27.6% adjusted EBITDA margin, to $1,711.3 million, or a 28.2% adjusted EBITDA margin for the year ended December 31, 2022.

Adjusted EBITDA margin for the year ended December 31, 2022 was favorably impacted by the increase in revenue attributable to the economic recovery from the COVID-19 pandemic coupled with the effective management of certain operating costs, primarily labor and related benefits, disposal costs and maintenance and repairs.

The favorable impact was partially offset by an increase in vehicle and equipment rental fees and transportation and subcontract costs driven by the increases in volume.

Revenue for the year ended December 31, 2022 increased primarily due to the acquisition of US Ecology, as well as an increase in rig counts and drilling activity.

Adjusted EBITDA in Group 3 increased from $44.6 million for the year ended December 31, 2021, or a 20.0% adjusted EBITDA margin, to $211.1 million for the year ended December 31, 2022, or an 17.4% adjusted EBITDA margin.

Adjusted EBITDA margin for the year ended December 31, 2022 decreased due to the acquisition of US Ecology.

• Cost of operations increased due to an increase in labor and third party maintenance costs due to inflationary pressures.

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

Adjusted EBITDA in Group 2 increased from $1,750.8 million for the year ended December 31, 2022 to $1,964.0 million for the year ended December 31, 2023.

The most significant items impacting adjusted EBITDA in Group 2 during the year ended December 31, 2023 compared to the year ended December 31, 2022 include:

• Net revenue for the year ended December 31, 2023 increased 7.5% from 2022 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.

• Cost of operations increased due to an increase in labor and maintenance costs due to inflationary pressures.

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

Adjusted EBITDA in Group 3 increased from $211.1 million for the year ended December 31, 2022 to $348.4 million for the year ended December 31, 2023.

The most significant items impacting adjusted EBITDA in Group 3 during the year ended December 31, 2023 compared to the year ended December 31, 2022 include:

• Revenue for the year ended December 31, 2023 increased due to acquisition-related growth, specifically the acquisition of US Ecology.

We closed the acquisition of US Ecology in May 2022.

Revenue was also impacted by favorable pricing.

• In 2023, we continued to realize cost synergies associated with the US Ecology acquisition.

Landfill and Environmental Matters

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Cash, cash equivalents, restricted cash and restricted cash equivalents $ 227.5 $ 214.3

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

Our restricted cash and marketable securities include 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.

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

Financing proceeds $ — $ 12.4

Capping, closure and post-closure obligations 43.2 39.1

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For additional detail regarding our lease obligations, see Note 10, Leases , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Our acquisition growth strategy focuses primarily on acquiring privately held recycling and solid waste companies and environmental solutions businesses that complement our existing business platform.

Our acquisition growth strategy focuses primarily on acquiring privately held recycling and waste companies and environmental solutions businesses that complement our existing business platform.

We continue to invest in value-enhancing acquisitions in existing markets.

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In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $500.0 million outstanding at any one time (the Commercial Paper Cap).

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

As of December 31, 2022, we had $1.0 billion principal value of commercial paper issued and outstanding under the program, with a weighted average interest rate of 4.670% and weighted average maturity of 36 days.

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

In August 2022, the Commercial Paper Cap was increased to $1.0 billion, and in October 2023, was subsequently increased to $1.5 billion.

The weighted average interest rate for borrowings outstanding as of December 31, 2023 was 5.508% with a weighted average maturity of approximately 18 days.

In the event of a failed re-borrowing, we currently have availability under our Credit Facility (as defined below) to fund the amounts borrowed under the commercial paper program until they are re-borrowed successfully.

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

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

Future minimum payments under unconditional purchase commitments consist primarily of (1) disposal related agreements, which include fixed or minimum royalty payments, host agreements and take-or-pay and put-or-pay agreements and (2) other obligations including committed capital expenditures and consulting service agreements.

December 31, 2022, such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $745.2 million, of which $133.9 million was short-term.

For additional detail regarding our debt and known contractual and other obligation, see Note 9, Debt, and Note 19, Commitments and Contingencies , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

agreements and (2) other obligations including committed capital expenditures and consulting service agreements.

As of December 31, 2023, such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $974.3 million, of which $205.2 million was short-term.

For additional detail regarding our debt and known contractual and other obligations, see Note 9, Debt, and Note 19, Commitments and Contingencies , of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Asset Retirement Obligations and Environmental Liabilities

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

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As of December 31, 2023, our days sales outstanding were 42.0, or 30.9 days net of deferred revenue, compared to 43.3, or 31.8 days net of deferred revenue, as of December 31, 2022.

• Our prepaid expenses and other assets increased $83.8 million in 2022 compared to a $57.0 million increase in 2021, primarily due to additional SaaS implementation costs incurred related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems in 2022.

• Our prepaid expenses and other assets increased $29.8 million in 2023 compared to an $83.8 million increase in 2022, primarily attributable to changes in our prepaid taxes due to timing of our estimated tax payments and an increase in costs associated with cloud-based hosting arrangements.

Cash paid for income taxes was $343 million and $185 million for 2023 and 2022, respectively.

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

Income taxes paid in 2023 and 2022 reflected benefits from tax credits from our continuing investments in renewable energy.

• Our accounts payable increased $82.8 million during 2023 compared to a $106.4 million increase during 2022, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $60.8 million during 2023 compared to $64.6 million for 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 $2.4 million lower during 2022 compared to 2021.

The decrease 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 $0.2 million higher during 2023 compared to 2022.

In addition, cash paid for interest was $422.9 million and $311.5 million, excluding net swap settlements for our fixed to floating interest rate swaps, for 2023 and 2022, respectively.

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• Proceeds from sales of property and equipment during 2023 were $29.2 million as compared to $32.8 million for 2022.

• During 2022 and 2021, we used $3,038.5 million and $1,221.7 million, respectively, for acquisitions and investments, net of cash acquired, including the cash used for the acquisition of US Ecology.

• During 2023 and 2022, we used $2,065.3 million and $3,038.5 million, respectively, for acquisitions and investments, net of cash acquired, including the cash used for the acquisition of US Ecology in 2022.

During 2023 and 2022, we received $6.4 million and $50.6 million from business divestitures, respectively.

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The most significant items affecting the comparison of our cash flows used in financing activities for 2023 and 2022 are summarized below:

• We issued no senior notes during 2022.

• During 2023, we issued $2,200.0 million of senior notes for cash proceeds, net of discounts and fees, of $2,172.3 million.

Net proceeds of notes payable and long-term debt were $2,164.6 million during 2022, compared to net payments of $150.2 million in 2021.

We issued no senior notes during 2022.

Net payments of notes payable and long-term debt were $1,189.7 million during 2023, compared to net proceeds of $2,164.6 million in 2022.

For a more detailed discussion, see the Financial Condition section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Debt Obligations

As of December 31, 2022 , we had $456.0 million of principal debt maturing within the next 12 months, which includes certain variable rate tax-exempt financing, debentures and 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 December 31, 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.

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Credit Facilities

Uncommitted Credit Facility

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

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

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

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

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

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

The Credit Facility

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

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

On the earliest of (i) the date that all available tenors of United States dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a secured overnight financing rate (SOFR), the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date.

In October 2023, we completed an upsize of the Credit Facility to $3.5 billion.

In February 2023, we entered into Amendment No.

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

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

The Credit Facility Amendment provides that the aggregate of (i) all loans to the Canadian Borrower and (ii) all loans denominated in Canadian dollars cannot exceed $1.0 billion (the Canadian Sublimit).

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

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

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 December 31, 2023, $201.5 million was outstanding against the Canadian Sublimit, with an average interest rate of 6.364%.

The Credit Facility is subject to facility fees based on applicable rates defined in the Credit Facility agreement and the aggregate commitment, regardless of usage.

Availability under our Credit Facility totaled $1,402.4 million and $2,633.8 million as of December 31, 2022 and 2021, respectively.

The Credit Facility can be used for working capital, capital expenditures, acquisitions, letters of credit and other general corporate purposes.

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

We had $250.0 million and $24.3 million in borrowings outstanding under our Credit Facility as of December 31, 2022 and 2021, respectively.

We had $297.1 million and $250.0 million outstanding under our Credit Facility as of December 31, 2023 and 2022, respectively.

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

Uncommitted Credit Facility

In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaced the prior $135.0 million uncommitted credit facility.

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

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

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

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

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

We also had $495.3 million and $1.0 billion of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of December 31, 2023 and 2022, respectively.

As a result, availability under our Credit Facility was $2,371.2 million and $1,402.4 million as of December 31, 2023 and 2022, respectively.

Financial and Other Covenants

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The Credit Facility provides that our total debt to EBITDA ratio may not exceed 3.75 to 1.00 as of the last day of any fiscal quarter.

In the case of an "elevated ratio period", which may be elected by us if one or more acquisitions during a fiscal quarter involve aggregate consideration in excess of $200.0 million (the Trigger Quarter), the total debt to EBITDA ratio may not exceed 4.25 to 1.00 during the Trigger Quarter and each of the following three fiscal quarters.

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

During the second quarter of 2022, we exercised the elevated ratio clause in conjunction with our acquisition of US Ecology;

as a result, we are subject to a 4.25 to 1.00 total debt to EBITDA ratio through March 31, 2023.

We were in compliance with this debt covenant for each quarter of 2022.

As of December 31, 2022, our total debt to EBITDA ratio was 3.12 compared to the 4.25 maximum allowed.

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 December 31, 2023, our total debt to EBITDA ratio was approximately 2.9 compared to the 3.75 maximum allowed.

As of December 31, 2023, we were in compliance with all other covenants unde r our Credit Facility .

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In addition, maturity acceleration on the Credit Facility constitutes an event of default under our other debt and derivative instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity.

acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness.

If such acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness.

We would likely have to seek an amendment under the Credit Facility for relief from the financial covenant or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary.

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

The current weighted average interest rate for the year ended December 31, 2022 is 4.629%.

The current interest rate for borrowings outstanding as of December 31, 2023 was 6.256%.

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 $1.0 billion in borrowings outstanding under the Term Loan Facility as of December 31, 2022.

We had $500.0 million and $1.0 billion of borrowings outstanding under the Term Loan Facility as of December 31, 2023 and 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 amounts currently borrowed under the commercial paper program until they are re-borrowed successfully.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2022.

In August 2022, the Commercial Paper Cap was increased to $1.0 billion, and in October 2023, was subsequently increased to $1.5 billion.

The weighted average interest rate for borrowings outstanding as of December 31, 2023 was 5.508% with a weighted average maturity of approximately 18 days.

We had $496.0 million and $1.0 billion principal value of commercial paper issued and outstanding under the program as of December 31, 2023 and 2022, respectively.

In the event of a failed re-borrowing, we currently have availability under our Credit Facility (as defined above) to fund amounts currently borrowed under the commercial paper program until they are re-borrowed successfully.

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

Senior Notes and Debentures

As of December 31, 2022, we had $8,107.8 million of unsecured senior notes and debentures, with maturities ranging from 2023 to 2050.

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

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

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

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

In December 2023, we issued an additional $350.0 million of 4.875% senior notes due 2029 (the New 2029 Notes, and together with the Existing 2029 Notes, the 2029 Notes).

After giving effect to the issuance of the New 2029 Notes, $750.0 million in aggregate principal amount of the 2029 Notes is outstanding.

The New 2029 Notes are fungible with the Existing 2029 Notes, and taken together, the 2029 Notes are treated as a single series.

In December 2023, we also issued $650.0 million of 5.000% senior notes due 2033 (the 2033 Notes).

Similar to the Notes above, the proceeds of these new senior notes were used for general corporate purposes, including the repayment of a portion of amounts outstanding under the Uncommitted Credit Facility, the Commercial Paper Program, the Credit Facility, and the Term Loan Facility.

Our senior notes and debentures are general unsecured obligations.

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Tax-Exempt Financings

As of December 31, 2022 and 2021, we had $1,182.0 million and $1,181.5 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2023 to 2051.

There were no tax-exempt financings issued during 2022.

During 2021, we issued $205.0 million of tax-exempt financings.

In the fourth quarter of 2021, the Pennsylvania Economic Development Financing Authority issued, for our benefit, $30.0 million of Solid Waste Disposal Revenue Bonds.

The proceeds from the issuance, after deferred issuance costs, will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, of which $30.0 million and $17.2 million was incurred and reimbursed to us as of December 31, 2022 and 2021, respectively .

As of December 31, 2022 and 2021 , we had $127.6 million and $139.0 million , respectively, of restricted cash and marketable securities.

As of December 31, 2021, $12.4 million of the restricted cash and marketable securities balance represented proceeds from the issuance of the tax-exempt bonds.

As of December 31, 2023, we had $1,280.6 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

We had finance lease liabilities of $247.5 million and $249.4 million as of December 31, 2022 and 2021, respectively, with maturities ranging from 2023 to 2063 and 2022 to 2063, respectively.

As of December 31, 2023, we had finance lease liabilities of $251.3 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.

Credit Ratings

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 December 31, 2022, our credit ratings were BBB+, Baa2 and BBB+ by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively.

As of December 31, 2023, our credit ratings were BBB+, Baa1 and A- 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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The amount of the financial assurance requirements for capping, closure and post-closure costs is determined by applicable state environmental regulations.

The financial assurance requirements for capping, closure and post-closure costs may be associated with a portion of the landfill or the entire landfill.

The financial assurance requirements for capping, closure and post-closure costs may be associated with a portion of the landfill

or the entire landfill.

Generally, states require a third-party engineering specialist to determine the estimated capping, closure and post-closure costs that are used to determine the required amount of financial assurance for a landfill.

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Amortization rates may be sensitive to the original cost basis of the landfill, including acquisition costs, which in turn is determined by geographic location and market values.

We secure significant landfill assets through business acquisitions and value them at the time of acquisition based on fair value.

We secure significant landfill assets through business acquisitions and

value them at the time of acquisition based on fair value.

Amortization rates are also influenced by site-specific engineering and cost factors.

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Landfill retirement obligations are capitalized as the related liabilities are recognized and amortized using the units-of-consumption method over the airspace consumed within the capping event or the airspace consumed within the entire landfill, depending on the nature of the obligation.

All obligations are initially measured at

estimated fair value.

All obligations are initially measured at estimated fair value.

Fair value is calculated on a present value basis using an inflation rate and our credit-adjusted, risk-free rate in effect at the time the liabilities were incurred.

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The retirement obligation assets are amortized to expense on a per-ton basis as disposal capacity is consumed.

The per-ton rate is calculated by dividing the sum of each of the recorded retirement obligation asset’s net book value and expected future additions to the retirement obligation asset by the remaining disposal capacity.

The per-ton rate is calculated by dividing the sum of each of the recorded retirement obligation asset’s net book

value and expected future additions to the retirement obligation asset by the remaining disposal capacity.

A per-ton rate is determined for each separate capping event based on the disposal capacity relating to that event.

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Revisions in estimates of our costs or timing of expenditures are recognized immediately as increases or decreases to the capping, closure and post-closure liabilities and the corresponding retirement obligation assets.

Changes in the assets result in changes to the amortization rates which are applied prospectively, except for fully incurred capping events and closed

landfills, where the changes are recorded immediately in results of operations since the associated disposal capacity has already been consumed.

Changes in the assets result in changes to the amortization rates which are applied prospectively, except for fully incurred capping events and closed landfills, where the changes are recorded immediately in results of operations since the associated disposal capacity has already been consumed.

See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on changes to our landfill depletion and amortization.

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• We may be unsuccessful in obtaining permits for probable expansion disposal capacity because of the failure to obtain the final local, state, provincial, or federal permits or due to other unknown reasons.

If we are unsuccessful in obtaining permits for probable expansion disposal capacity, or the disposal capacity for which we obtain approvals is less than what was estimated, both our estimated total costs and disposal capacity will be reduced, which generally increases the rates we charge for landfill amortization and capping, closure and post-closure accruals.

If we are unsuccessful in

obtaining permits for probable expansion disposal capacity, or the disposal capacity for which we obtain approvals is less than what was estimated, both our estimated total costs and disposal capacity will be reduced, which generally increases the rates we charge for landfill amortization and capping, closure and post-closure accruals.

An unexpected decrease in disposal capacity could also cause an asset impairment.

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We perform a comprehensive review of our environmental obligations annually and also review changes in facts and circumstances associated with these obligations at least quarterly.

See our Results of Operations section in this Management's Discussion and

Analysis of Financial Condition and Results of Operations for discussion on our remediation adjustments.

See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on our remediation adjustments.

We have not reduced the liabilities we have recorded for recoveries from other potentially responsible parties or insurance companies.

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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-K

Item 7. Management’s Discussion and Analysis