What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-14 compared with 2024-02-29 · 155 added, 255 removed, 649 unchanged (39% of the section changed)

10 unchanged sentences

We expect revenue to be in the range of $16.850 billion to $16.950 billion.

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%.

We expect growth from average yield on total revenue to be approximately 4% and related revenue to be approximately 5%.

We expect the impact from volume on total revenue to be in a range of (0.25%) to 0.25%.

Adjusted Diluted Earnings per Share

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(Anticipated)

Year Ending December 31, 2024

Year Ending December 31, 2025 (Actual)

Year Ended December 31, 2024

Diluted earnings per share $ 5.86 to 5.92 $ 5.47

Diluted earnings per share 6.79 - 6.87 $ 6.49

Restructuring charges 0.03 0.07

1 unchanged sentence

Adjustment to withdrawal liability for multiemployer pension funds — (0.02)

US Ecology, Inc.

acquisition integration and deal costs — 0.08

Adjusted diluted earnings per share $ 5.94 to 6.00 $ 5.61

Loss on extinguishment of debt and other related costs — (0.01)

Adjusted diluted earnings per share 6.82 - 6.90 $ 6.46

We believe that the presentation of adjusted diluted earnings per share provides an understanding of operational activities before the financial effect of certain items.

10 unchanged sentences

Revenue for the year ended December 31, 2024 increased by 7.1% to $16,032 million compared to $14,965 million in 2023.

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%

This change in revenue is due to increased average yield of 5.1%, acquisitions, net of divestitures of 2.6%, recycling processing

and commodity sales of 0.5%, change in workdays of 0.3% and environmental solutions revenue of 0.1%, partially offset by decreased volume of 1.1% and fuel recovery fees of 0.4%.

The following table summarizes our revenue, costs and expenses for the years ended December 31, 2024 and 2023 (in millions of dollars and as a percentage of revenue):

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Restructuring charges 29 8 21 0.07 33 8 25 0.08

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) —

Gain on extinguishment of debt and other related costs, net (6) (2) (4) (0.01) — — — —

Gain on certain divestitures and impairments, net (30) (8) (22) (0.07) (4) 5 (9) (0.03)

Settlements and withdrawals on pension plans (8) (2) (6) (0.02) 5 2 3 0.01

US Ecology, Inc.

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As adjusted $ 2,417 $ 385 $ 2,032 $ 6.46 $ 2,259 $ 484 $ 1,775 $ 5.61

(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.

(1) 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.

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.

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 p resented by other companies.

Further information on each of these adjustments is included below.

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In 2024 and 2023, we incurred restructuring charges of $29 million and $33 million , respectively.

The 2024 charges primarily related to the redesign of our asset management, and customer and order management software systems.

Of the 2023 charges, $9 million related to the early termination of certain leases and $24 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 $25 million and $39 million during 2024 and 2023, respectively, related to these restructuring efforts.

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.

In 2025, we expect to incur restructuring charges of approximately $15 million, primarily r elated to the design and implementation of a new accounts receivable system.

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

Loss on extinguishment of debt and other related costs .

Gain on extinguishment of debt and other related costs, net .

During 2024 , we recognized a loss of $2 million due to the amendment and restatement of the Credit Facility.

Additionally, we recorded a net gain of $8 million attributable to the early settlement of certain cash flow hedges related to the Term Loan Facility.

The gain was recognized as a reduction of interest expense.

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 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.

We incurred non-cash charges related to the proportional share of unamortized deferred issuance costs of less than $1 million.

Gain on certain divestitures and impairments, net.

During 2024, we recorded a net gain on certain divestitures and impairments of $30 million, of which $29 million was due to a gain on the sale of a transfer station facility and $1 million related to a gain on business divestitures and impairments.

During 2023, we recorded a net gain of $4 million related to business divestitures and impairments.

Settlements and withdrawals on pension plans.

During 2024, we recognized a settlement of our defined benefit pension plan.

The settlement included a combination of lump-sum payments to participants who elected to receive them and the transfer of benefit obligations to a third-party insurance company under a group annuity contract.

As a result of the settlements, we recognized a non-cash gain of $8 million related to the accelerated recognition of the proportional share of unamortized net actuarial gains in accumulated other comprehensive loss.

During 2023, we recorded a charge to earnings of $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.

US Ecology, Inc.

acquisition integration and deal costs.

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.

In 2023, we incurred acquisition integration and deal costs of $34 million in connection with the acquisition of US Ecology, which included certain costs to integrate the business.

The acquisition closed on May 2, 2022, and our integration of the business was substantially complete as of December 31, 2023.

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During 2024, we experienced the following changes in our revenue as compared to 2023:

• 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, 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.

• Average yield increased revenue by 5.1% due to positive pricing changes in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, decreased revenue by 0.4%, primarily due to a decrease in fuel prices compared to 2023.

• Volume decreased revenue by 1.1% during 2024 as compared to 2023 primarily driven by a decrease in volume in our large container collection line of business, primarily driven by a slowing in construction-related activity.

Additionally, we experienced declines in our residential, small-container and transfer lines of business primarily attributable to certain municipal contract losses and broker-related business.

• Revenue increased by 0.3% due to the impact of the number of workdays during 2024 as compared to 2023, which drove an increase in volume across all lines of business.

• Recycling processing and commodity sales increased revenue by 0.5% primarily due to an increase in overall commodity prices as compared to 2023.

The average price for recycled commodities, excluding glass and organics, for 2024 was $164 per ton compared to $117 per ton for 2023.

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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 $11 million.

• 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.

• During 2024, environmental solutions revenue increased by 0.1% primarily due to an increase in event-based volumes and price increases relative to the same period in 2023.

• Acquisitions, net of divestitures, increased revenue by 2.6%, reflecting the results of our continued growth strategy of acquiring environmental services companies that complement and expand our existing business platform.

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Subtotal 9,379 59.0 8,943 59.8

US Ecology, Inc.

acquisition integration and deal costs — — 0.3 —

Gain on certain divestitures and impairments, net (29) (0.7) — —

Total cost of operations $ 9,350 58.3 % $ 8,943 59.8 %

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Our cost of operations increased in aggregate dollars for the year ended December 31, 2024 compared to the same period in 2023 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.

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

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 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.

• Transfer and disposal costs increased in aggregate dollars primarily due to acquisition-related growth and higher disposal rates.

During 2024 approximately 67% of the total solid waste volume we collected was disposed at landfill sites that we own or operate (internalization), as compared to 68% in 2023.

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

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.

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

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

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• Disposal fees and taxes increased in aggregate dollars in 2024 primarily due to increased royalties and host fees from an increase in volume at certain landfills as compared to 2023.

• 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.

• 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.

• Landfill operating costs increased during 2024 primarily due to increased leachate transportation and maintenance on our gas extraction systems due in part to increased rainfall in select geographic regions, as well as an increase in remediation adjustments recorded during 2024.

• Risk management expenses increased in aggregate dollars primarily due to higher premium costs as well as unfavorable claims development in our auto liability program, partially offset by favorable claims development in our general and worker's compensation liability programs.

• Other costs of operations increased in aggregate dollars during 2024 due to increased occupancy and facility related expenses as well as acquisition-related activity.

These increases were partially offset by a favorable non-recurring insurance recovery related to a prior year claim.

Depreciation, Amortization and Depletion of Property and Equipment

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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 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.

Landfill depletion and amortization expense increased in aggregate dollars due to an increase in our overall average depletion rate.

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 $79 million, or 0.5% of revenue, for the year ended December 31, 2024, compared to $66 million, or 0.4% of revenue, for 2023.

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Accretion expense was $107 million, or 0.7% of revenue, and $98 million, or 0.7% of revenue, for the years ended December 31, 2024 and 2023, respectively.

Accretion expense increased in aggregate dollars due to acquired asset retirement obligations.

Selling, General and Administrative Expenses

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The most significant items affecting our selling, general and administrative expenses during 2024 as compared to 2023 are summarized below:

• 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.

• Salaries and related benefits increased in aggregate dollars 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.

• Provision for doubtful accounts decreased primarily due to improvements in our cash collections and days sales outstanding as well as favorable adjustments to reserves established in a prior year.

As of December 31, 2024 , our days sales outstanding were 40.9, or 30.0 days net of deferred revenue, compared to 42.0, or 30.9 days net of deferred revenue, as of December 31, 2023.

• 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, 2023 , we recorded a $4.5 million charge related to the withdrawal from a certain multiemployer pension plan.

• Other selling, general and administrative expenses increased for the year ended December 31, 2024, largely due to an increase in meeting and travel costs, consulting costs and acquisition-related growth, partially offset by a favorable legal settlement.

• During the year ended December 31, 2023 we incurred $34 million of acquisition integration and deal costs with the acquisition of US Ecology, primarily related to the integration of certain software systems as well as rebranding of the business.

Our integration of the business was substantially complete as of December 31, 2023.

Gain on Business Divestitures and Impairments, Net

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Restructuring Charges

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 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.

For a discussion or restructuring charges incurred during the years ended December 31, 2024 and 2023 see Overview of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Expense

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Total interest expense $ 539 $ 508

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.

Total interest expense for 2024 increased compared to 2023 primarily due to higher interest rates on our fixed rate debt.

The increase attributable to our fixed rate debt is primarily due to the issuance of senior notes in 2024 with coupons ranging from 5.000% to 5.200%, the proceeds of which were used to repay outstanding senior notes with a coupon of 2.500%.

This increase was partially offset by a gain of $8 million recognized in 2024 attributable to the early settlement of certain cash flow hedges related to the Term Loan Facility.

The gain was recognized as a reduction of non-cash interest expense.

Cash paid for interest, excluding net swap settlements for our fixed-to-floating and floating-to-fixed interest rate swaps, was $487 million and $423 million for the years ended December 31, 2024 and 2023, respectively.

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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 $22 million.

Loss on Extinguishment of Debt

During the year ended December 31, 2024 , we recognized a loss of $2 million due to the amendment and restatement of the Credit Facility.

During the year ended December 31, 2023, we incurred a loss on the early extinguishment of debt due 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 less than $1 million.

Adjustment to Withdrawal Liability for Multiemployer Pension Funds

During 2023, we recorded a $5 million charge related to the withdrawal from a certain multiemployer pension plan.

Our provision for income taxes was $388 million and $460 million for 2024 and 2023, respectively.

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Our 2024 tax provision reflects a benefit of $222 million due to the tax credits related to these investments.

We also made qualified investments in renewable natural gas and commercial electric vehicles during 2024 which, due to tax credits, reduced our tax provision by approximately $18 million .

Our 2023 tax provision was reduced by $87 million related to the tax credits from our non-controlling interests in limited liability companies established to own renewable energy assets.

In addition, during 2023 we resolved IRS examinations for our tax years 2014 - 2018 that, in the aggregate, reduced our tax provision by approximately $21 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 $50 million available as of December 31, 2024.

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

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

Corporate entities and other include marketing, operations support, business development, legal, tax, treasury, information technology, risk management, human resources and other administrative functions.

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

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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 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.

Cost of operations and selling, general and administrative are significant segment expenses used in the evaluation.

Summarized financial information regarding our reportable segments for the years ended December 31, 2024 and 2023 (in millions of dollars) 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 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)

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Net Revenue $ 7,220 $ 6,969 $ 14,189 $ 1,843 $ — $ 16,032

Cost of Operations 4,129 4,079 8,208 1,142 — 9,350

SG&A 738 671 1,409 265 — 1,674

Other Segment Items — 29 29 — — 29

Adjusted EBITDA $ 2,353 $ 2,190 $ 4,543 $ 436 $ — $ 4,979

1 unchanged sentence

Total Assets $ 14,250 $ 11,046 $ 25,296 $ 4,459 $ 2,647 $ 32,402

Group 1 Group 2 Recycling & Waste Subtotal(1) Group 3

(Environmental Solutions) Corporate entities and other Total

Gross Revenue $ 7,769 $ 7,566 $ 15,335 $ 1,701 $ 243 $ 17,279

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Net Revenue $ 6,694 $ 6,646 $ 13,340 $ 1,625 $ — $ 14,965

Cost of Operations 3,878 4,033 7,911 1,032 — 8,943

SG&A 681 649 1,330 279 — 1,609

Other Segment Items — — — (34) — (34)

Adjusted EBITDA $ 2,135 $ 1,964 $ 4,099 $ 348 $ — $ 4,447

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The most significant items impacting adjusted EBITDA in Group 1 during the year ended December 31, 2024 compared to the year ended December 31, 2023 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.

• Net revenue for the year ended December 31, 2024 increased 7.9% from 2023 due to an increase in average yield in all lines of business partially offset by volume declines in our large container collection and landfill lines of business.

• 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.

• Total assets increased primarily due to additions in property and equipment.

Adjusted EBITDA in Group 2 increased from $1,964 million for the year ended December 31, 2023 to $2,190 million for the

year ended December 31, 2024.

The most significant items impacting adjusted EBITDA in Group 2 during the year ended December 31, 2024 compared to the year ended December 31, 2023 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.

• Net revenue for the year ended December 31, 2024 increased 4.9% from 2023 due to an increase in average yield in all lines of business and increased volume in our landfill line of business.

These increases were partially offset by decreased volume in our collection and transfer lines of business.

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

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The most significant items impacting adjusted EBITDA in Group 3 during the year ended December 31, 2024 compared to the year ended December 31, 2023 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.

• Net revenue for the year ended December 31, 2024 increased due to acquisition-related growth, favorable pricing, and an increase in event-based volumes.

• Cost of operations increased primarily due to an increase in labor costs and the impact of acquisitions.

Landfill and Environmental Matters

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

(1) capital expenditures and leases, (2) acquisitions, (3) dividend payments, (4) repayments to service debt and other long-term obligations, (5) payments for asset retirement obligations and environmental liabilities and (6) share repurchases.

(1) capital expenditures and leases, (2) acquisitions, (3) dividend payments, (4)

payments to service debt and other long-term obligations, (5) payments for asset retirement obligations and environmental liabilities and (6) share repurchases.

Capital Expenditures and Leases

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

We expect to invest at least $500 million in acquisitions in 2024.

We expect to invest approximately $1 billion in acquisitions in 2025.

Dividend Payments

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

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

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.

As of December 31, 2024, such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $907 million, of which $202 million was short-term.

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Net cash used in investing activities $ (2,561) $ (3,667)

Net cash provided by (used in) financing activities $ 61.9 $ 1,344.2

Net cash (used in) provided by financing activities $ (1,398) $ 62

Cash Flows Provided by Operating Activities

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As of December 31, 2024, our days sales outstanding were 40.9, or 30.0 days net of deferred revenue, compared to 42.0, or 30.9 days net of deferred revenue, as of December 31, 2023.

• 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 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.

• Our prepaid expenses and other assets increased $171 million in 2024 compared to a $30 million increase in 2023.

The increase in prepaid expenses and other assets during 2024 is primarily driven by an increase in capitalized implementation costs for our cloud-based hosting arrangements and higher insurance premium costs.

• Our accounts payable decreased $27 million during 2024 compared to an $83 million increase during 2023, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $56 million during 2024 compared to $61 million for 2023.

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In addition, cash paid for interest was $487 million and $423 million, excluding net swap settlements for our fixed to floating interest rate swaps, for 2024 and 2023, respectively.

Cash paid for income taxes was $313 million and $343 million for 2024 and 2023, respectively.

We use cash flows from operations to fund capital expenditures, acquisitions, dividend payments, debt repayments and share repurchases.

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• Proceeds from sales of property and equipment during 2024 were $47 million as compared to $29 million for 2023.

• 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 2024 and 2023, we used $753 million and $2,065 million, respectively, for acquisitions and investments, net of cash acquired.

During 2024 and 2023, we received $2 million and $6 million from business divestitures, respectively.

We intend to finance 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.

Cash Flows Used in Financing Activities

We expect to primarily use cash and borrowings under our revolving credit facilities to pay for future acquisitions.

Cash Flows (Used in) Provided by Financing Activities

The most significant items affecting the comparison of our cash flows used in financing activities for 2024 and 2023 are summarized below:

• During 2024, we issued $900 million of senior notes for cash proceeds, net of discounts and fees, of $889 million.

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.

During 2023, we issued $2,200 million of senior notes for cash proceeds, net of discounts and fees, of $2,172 million.

Net payments of notes payable and long-term debt were $1,089 million during 2024, compared to net payments of $1,190 million in 2023.

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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As of December 31, 2024 , we had $862 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.

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 three tax-exempt financings with initial remarketing periods 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 December 31, 2023 , we had availability under our $3.5 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully.

In the event of a failed re-borrowing under our commercial paper program, 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 the event of a failed remarketing, as of December 31, 2024 , we had availability under our Credit Facility (defined below) to fund these bonds until they are remarketed successfully.

In the event of a failed re-borrowing under our commercial paper program, as of December 31, 2024, we had availability under our Credit Facility to fund the amounts borrowed under 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 December 31, 2024 .

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The Credit Facility

In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the Credit Facility).

Borrowings under the Credit Facility mature in August 2026.

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 extension.

In July 2024, we and our subsidiary, USE Canada Holdings, Inc.

(the Canadian Borrower) entered into the Second Amended and Restated Credit Agreement (the Credit Facility) which amends and restates the unsecured revolving credit facility we entered into in August 2021.

The total outstanding principal amount that we may borrow under the Credit Facility may not exceed the current aggregate lenders' commitments of $3.5 billion, and borrowings under the Credit Facility mature in July 2029.

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 billion through increased commitments from existing lenders or the addition of new lenders.

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).

All loans to the Canadian Borrower and all loans denominated in Canadian dollars cannot exceed $1 billion (the Canadian Sublimit).

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

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We had $317 million and $337 million of letters of credit outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively.

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.

We also had $477 million and $495 million of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of December 31, 2024 and 2023, respectively.

As a result, availability under our Credit Facility was $2,192 million and $2,371 million as of December 31, 2024 and 2023, respectively.

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In this context, EBITDA is used solely to provide information regarding the extent to which we are in compliance with debt covenants and is not comparable to EBITDA used by other companies or used by us for other purposes.

Failure to comply with the financial and other covenants under the Credit Facility, as well as the occurrence of certain material adverse events, would constitute defaults and would allow the lenders under the Credit Facility to accelerate the maturity of all indebtedness under the Credit Facility.

indebtedness under the Credit Facility.

This could have an adverse effect on the availability of financial assurances.

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.

In addition, maturity acceleration on the Credit Facility constitutes an event of default under certain of our other debt and derivative instruments.

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

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Term Loan Facility

On April 29, 2022, we entered into a $1.0 billion unsecured Term Loan Facility (Term Loan Facility), which will mature on April 29, 2025.

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 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 $500.0 million and $1.0 billion of borrowings outstanding under the Term Loan Facility as of December 31, 2023 and 2022, respectively.

On April 29, 2022, we entered into a $1 billion unsecured Term Loan Facility (Term Loan Facility), which bore interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings.

We had $500 million of borrowings outstanding under the Term Loan Facility as of December 31, 2023.

During the year ended December 31, 2024, we repaid the remaining balance of the Term Loan Facility.

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 $500 million outstanding at any one time (the Commercial Paper Cap).

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

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

The weighted average interest rate for borrowings outstanding as of December 31, 2024 was 4.646% 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.

We had $477 million and $496 million principal value of commercial paper issued and outstanding under the program as of December 31, 2024 and 2023, 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.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2024 and 2023, respectively.

Senior Notes and Debentures

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).

In March 2023, we issued $400 million of 4.875% senior notes due 2029 (the Existing 2029 Notes) and $800 million of 5.000% senior notes due 2034 (the 2034 Notes, and together with the Existing 2029 Notes, 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.

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 less than $1 million.

In December 2023, we issued an additional $350 million of 4.875% senior notes due 2029 (the New 2029 Notes, and together with the Existing 2029 Notes, the 2029 Notes).

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In December 2023, we also issued $650 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.

The proceeds of the 2033 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.

In June 2024, we issued $400 million of 5.000% senior notes due 2029 and $500 million of 5.200% senior notes due 2034.

We used the proceeds from the June 2024 notes issuance for general corporate purposes, including the repayment of a portion of amounts outstanding under the Commercial Paper Program and the Credit Facility;

and repayment of the remaining amount outstanding under the Term Loan Facility and the Uncommitted Credit Facility.

Our senior notes and debentures are general unsecured obligations.

Interest is payable semi-annually.

Derivative Instruments and Hedging Relationships

Our ability to obtain financing through the capital markets is a key component of our financial strategy.

Historically, we have managed risk associated with executing this strategy, particularly as it relates to fluctuations in interest rates, by using a combination of fixed and floating rate debt.

From time to time, we also have entered into interest rate swap and lock agreements to manage risk associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).

We also acquired and novated a floating-to-fixed interest rate swap designated as a cash flow hedge in connection with our acquisition of US Ecology.

Additionally, we amended certain interest rate lock agreements, extending the mandatory maturity date and dedesignated them as cash flow hedges (the Extended Interest Rate Locks).

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

For a description of our derivative contracts and hedge accounting, see Note 9, Debt , to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Tax-Exempt Financings

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As of December 31, 2023, we had $1,281 million of certain variable rate tax-exempt financings outstanding, with maturities ranging from 2024 to 2053.

Finance Leases

Finance Leases and Other

As of December 31, 2024, we had finance lease liabilities of $315 million with maturities ranging from 2025 to 2063.

As of December 31, 2023, we had finance lease liabilities of $251 million with maturities ranging from 2024 to 2063.

As of December 31, 2024, finance leases and other included $53 million related to the construction of an office building located in Phoenix, Arizona, which has been accounted for as a financing obligation.

The amount is recorded within long-term debt, net of current maturities.

Credit Ratings

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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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Accordingly, actual results could differ materially from our estimates.

We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

We base our estimates on past experience and other assumptions that

we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

Such critical accounting policies, estimates and judgments are applicable to all of our operating segments.

We have noted examples of the estimates that are subject to uncertainty in the accounting for these areas below.

Landfill Accounting

Landfill operating costs are treated as period expenses and are not discussed further in this section.

Our landfill assets and liabilities fall into the following two categories, each of which requires accounting judgments and estimates:

• Landfill development costs that are capitalized as an asset.

• Landfill retirement obligations relating to our capping, closure and post-closure liabilities that result in a corresponding landfill retirement asset.

We use life-cycle accounting and the units-of-consumption method to recognize landfill development costs over the life of the site.

In life-cycle accounting, all current and future capitalized costs to acquire and construct a site are calculated and charged to expense based on the consumption of cubic yards of available airspace.

Obligations associated with final capping, closure and post-closure are also capitalized and amortized on a units-of-consumption basis as airspace is consumed.

Cost and airspace estimates are developed at least annually by engineers.

Landfill Development Costs

As of December 31, 2023 and 2022, we had net landfill development costs of $4,745.4 million and $4,873.6 million, respectively.

Changes in these estimates may be sensitive to changes in cost estimates, inflation and applicable regulations.

Site permits.

To develop, construct and operate a landfill, we must obtain permits from various regulatory agencies at the local, state and federal levels.

The permitting process requires an initial site study to determine whether the location is feasible for landfill operations.

The initial studies are reviewed by our environmental management group and then submitted to the regulatory agencies for approval.

During the development stage we capitalize certain costs that we incur after site selection but before the receipt of all required permits if we believe that it is probable that the site will be permitted.

These estimates are subject to uncertainty attributable to:

• Changes in legislative or regulatory requirements may cause changes to the landfill site permitting process.

These changes could make it more difficult and costly to obtain and maintain a landfill permit.

• Studies performed could be inaccurate, which could result in the denial or revocation of a permit and changes to accounting assumptions.

Conditions could exist that were not identified in the study, which may make the location not feasible for a landfill and could result in the denial of a permit.

Denial or revocation of a permit could impair the recorded value of the landfill asset.

• Actions by neighboring parties, private citizen groups or others to oppose our efforts to obtain, maintain or expand permits could result in denial, revocation or suspension of a permit, which could adversely impact the economic viability of the landfill and could impair the recorded value of the landfill.

As a result of opposition to our obtaining a permit, improved technical information as a project progresses, or changes in the anticipated economics associated with a project, we may decide to reduce the scope of, or abandon, a project, which could result in an asset impairment.

Technical landfill design.

Upon receipt of initial regulatory approval, technical landfill designs are prepared.

The technical designs, which include the detailed specifications to develop and construct all components of the landfill including the types and quantities of materials that will be required, are reviewed by our environmental management group.

The technical designs are submitted to the regulatory agencies for approval.

Upon approval of the technical designs, the regulatory agencies issue permits to develop and operate the landfill.

These estimates are subject to uncertainty attributable to:

• Changes in legislative or regulatory requirements may require changes in the landfill technical designs.

These changes could make it more difficult and costly to meet new design standards.

• Technical design requirements, as approved, may need modifications at some future point in time.

• Technical designs could be inaccurate and could result in increased construction costs, difficulty in obtaining a permit or the use of rates to recognize the amortization of landfill development costs and asset retirement obligations that are not appropriate.

Permitted and probable landfill disposal capacity.

Included in the technical designs are factors that determine the ultimate disposal capacity of the landfill.

These factors include the area over which the landfill will be developed, such as the depth of excavation, the height of the landfill elevation and the angle of the side-slope construction.

The disposal capacity of the landfill is calculated in cubic yards.

This measurement of volume is then converted to a disposal capacity expressed in tons based on a site-specific expected density to be achieved over the remaining operating life of the landfill.

These estimates are subject to uncertainty attributable to:

• Estimates of future disposal capacity may change as a result of changes in legislative or regulatory design requirements.

• The density of waste may vary due to variations in operating conditions, including waste compaction practices, site design, climate and the nature of the waste.

• Capacity is defined in cubic yards but waste received is measured in tons.

The number of tons per cubic yard varies by type of waste and our rate of compaction.

Development costs.

The types of costs that are detailed in the technical design specifications generally include excavation, natural and synthetic liners, construction of leachate collection systems, installation of methane gas collection systems and monitoring probes, installation of groundwater monitoring wells, construction of leachate management facilities and other costs associated with the development of the site.

We review the adequacy of our cost estimates on an annual basis by comparing estimated costs with third-party bids or contractual arrangements, reviewing the changes in year-over-year cost estimates for reasonableness, and comparing our resulting development cost per acre with prior period costs.

These development costs, together with any costs incurred to acquire, design and permit the landfill, including capitalized interest, are recorded to the landfill asset on the balance sheet as incurred.

These estimates are subject to uncertainty attributable to:

• Actual future costs of construction materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor.

Technical designs could be altered due to unexpected operating conditions, regulatory changes or legislative changes.

Landfill development asset amortization.

Landfill Development Asset Depletion

Landfill depletion expense for the years ended December 31, 2024 and 2023 was $408 million and $379 million, respectively.

To match the expense related to the landfill asset with the revenue generated by the landfill operations, we amortize the landfill development asset over its operating life on a per-ton basis as waste is accepted at the landfill.

The landfill asset is fully amortized at the end of a landfill’s operating life.

The per-ton rate is calculated by dividing the sum of the landfill development asset net book value plus estimated future development costs (as described above) for the landfill, by the landfill’s estimated remaining disposal capacity.

The landfill asset is fully depleted at the end of a landfill’s operating life.

The per-ton rate is calculated by dividing the sum of the landfill development asset net book value plus estimated future development costs for the landfill, by the landfill’s estimated remaining permitted and probable disposal capacity.

The expected future development costs are not inflated or discounted, but rather expressed in nominal dollars.

This rate is applied to each ton accepted at the landfill to arrive at amortization expense for the period.

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.

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

These estimates are subject to uncertainty attributable to:

• Changes in our future development cost estimates or our disposal capacity will normally result in a change in our amortization rates and will impact amortization expense prospectively.

An unexpected significant increase in estimated costs or reduction in disposal capacity could affect the ongoing economic viability of the landfill and result in asset impairment.

This rate is applied to each ton accepted at the landfill to arrive at depletion expense for the period.

The calculation of depletion expense includes certain estimates and assumptions around future landfill development costs and remaining permitted and probable landfill disposal capacity.

Changes in these estimates are subject to uncertainty attributable to the following factors:

(i) actual future costs of construction materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor, and (ii) technical designs could be altered due to unexpected operating conditions, regulatory changes or legislative changes.

On at least an annual basis, we update the estimates of future development costs and remaining disposal capacity for each landfill.

These costs and disposal capacity estimates are reviewed and approved by senior operations management annually.

Changes in cost estimates and disposal capacity are reflected prospectively in the landfill amortization rates that are updated annually.

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.

Changes in cost estimates and disposal capacity are reflected prospectively in the landfill depletion rates that are updated annually.

Landfill Asset Retirement Obligations

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As of December 31, 2024 and 2023, our asset retirement obligations related to capping, closure and post-closure were $2,144 million and $1,937 million, respectively.

Changes in these estimates may be sensitive to changes in available airspace, cost estimates, inflation, our credit-adjusted, risk-free interest rate and applicable regulations.

Changes in these estimates may be sensitive to the following factors:

(i) changes to environmental laws and regulations and/or circumstances affecting our operations could result in a significant change to our estimates, which could have a significant impact on our result of operations, (ii) we do not expect to incur most of these costs for a number of years, which requires us to estimate the timing of projected cash flows and make assumptions regarding inflation rates, and (iii) actual future costs of materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor.

Obligations associated with final capping activities that occur during the operating life of the landfill are recognized on a units-of-consumption basis as airspace is consumed within each discrete capping event.

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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.

Landfill amortization expense for the years ended December 31, 2024 and 2023 was $106 million and $92 million, respectively.

All obligations are initially measured at estimated fair value.

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Costs associated with closure and post-closure requirements generally include maintenance of the site, the monitoring of methane gas collection systems and groundwater systems and other activities that occur after the site has ceased accepting waste.

Costs associated with post-closure monitoring generally include groundwater sampling, analysis and statistical reports, third-party labor associated with gas system operations and maintenance, transportation and disposal of leachate and erosion control costs related to the final cap.

Landfill retirement obligation liabilities and assets.

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The estimates include inflation, the specific timing of future cash outflows and the anticipated waste flow into the capping events.

Our cost estimates are inflated to the period of performance using an estimate of inflation, which is updated annually and is based upon the ten year average consumer price index (2.0% in 2023 and 1.9% in 2022).

Our cost estimates are inflated to the period of

performance using an estimated inflation rate, which is updated annually.

For 2024, our estimated inflation rate of 2.0% is based on the twenty year average core consumer price index and for 2023, our estimated inflation rate of 2.0% was based on the ten year average consumer price index.

The present value of the remaining capping costs for specific capping events and the remaining closure and post-closure costs for each landfill are recorded as incurred on a per-ton basis.

These liabilities are incurred as disposal capacity is consumed at the landfill.

Capping, closure and post-closure liabilities are recorded in layers and discounted using our credit-adjusted risk-free rate in effect at the time the obligation is incurred (5.3% in 2023 and 4.2% in 2022 ).

Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that was used to calculate each layer of the recorded liabilities.

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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.

Closure and post-closure per-ton rates are based on the total disposal capacity of the landfill.

These estimates are subject to uncertainty attributable to:

• Changes in legislative or regulatory requirements, including changes in capping, closure activities or post-closure monitoring activities, types and quantities of materials used, or term of post-closure care, could cause changes in our cost estimates.

• Changes in the landfill retirement obligation due to changes in the anticipated waste flow, changes in airspace compaction estimates or changes in the timing of expenditures for closed landfills and fully incurred but unpaid capping events are recorded in results of operations prospectively.

This could result in unanticipated increases or decreases in expense.

• Actual timing of disposal capacity utilization could differ from projected timing, causing differences in timing of when amortization and accretion expense is recognized for capping, closure and post-closure liabilities.

• Changes in inflation rates could impact our actual future costs and our total liabilities.

• Changes in our capital structure or market conditions could result in changes to the credit-adjusted risk-free rate used to discount the liabilities, which could cause changes in future recorded liabilities, assets and expense.

• Amortization rates could change in the future based on the evaluation of new facts and circumstances relating to landfill capping design, post-closure monitoring requirements, or the inflation or discount rate.

Changes in these estimates may be sensitive to the following factors:

(1) changes to environmental laws and regulations and/or circumstances affecting our operations could result in a significant change to our estimates, which could have a significant impact on our result of operations, (ii) we do not expect to incur most of these costs for a number of years, which requires us to estimate the timing of projected cash flows and make assumptions regarding inflation rates, and (iii) actual future costs of materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor.

On an annual basis, we update our estimates of future capping, closure and post-closure costs and of future disposal capacity for each landfill.

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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.

Total landfill depletion and amortization expense for the years ended December 31, 2024 and 2023 was $514 million and $471 million, respectively.

Permitted and probable disposal capacity.

Disposal capacity is determined by the specifications detailed in the landfill permit.

We classify this disposal capacity as permitted.

We also include probable expansion disposal capacity in our remaining disposal capacity estimates, thus including additional disposal capacity being sought through means of a permit expansion.

Probable expansion disposal capacity has not yet received final approval from the applicable regulatory agencies, but we have determined that certain critical criteria have been met and that the successful completion of the expansion is probable.

We have developed six criteria that must be met before an expansion area is designated as probable expansion airspace.

We believe that satisfying all of these criteria demonstrates a high likelihood that expansion airspace that is incorporated in our landfill costing will be permitted.

However, because some of these criteria are judgmental, they may exclude expansion airspace that will eventually be permitted or include expansion airspace that will not be permitted.

In either of these scenarios, our amortization, depletion and accretion expense could change significantly.

Our internal criteria to classify disposal capacity as probable expansion airspace are as follows:

• We own the land associated with the expansion airspace or control it pursuant to an option agreement;

• We are committed to supporting the expansion project financially and with appropriate resources;

• There are no identified fatal flaws or impediments associated with the project, including political impediments;

• Progress is being made on the project;

• The expansion is attainable within a reasonable time frame;

• We believe it is likely we will receive the expansion permit.

After successfully meeting these criteria, the disposal capacity that will result from the planned expansion is included in our remaining disposal capacity estimates.

Additionally, for purposes of calculating landfill amortization and capping, closure and post-closure rates, we include the incremental costs to develop, construct, close and monitor the related probable expansion disposal capacity.

These estimates are subject to uncertainty attributable to:

• 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.

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

Environmental Liabilities

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Under current laws and regulations, we may be responsible for environmental remediation at sites that we either own or operate, including sites that we have acquired, or sites where we have (or a company that we have acquired has) delivered waste.

Our environmental remediation liabilities primarily include costs associated with remediating groundwater, surface water and soil contamination, as well as controlling and containing methane gas migration and the related legal costs.

To estimate our ultimate liability at these sites, we evaluate several factors, including the nature and extent of contamination at each identified site, the required remediation methods, timing of expenditures, the apportionment of responsibility among the potentially responsible parties and the financial viability of those parties.

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As of December 31, 2024 and 2023, we had $447 million and $485 million of environmental liabilities, respectively.

Changes in these estimates may be sensitive to changes in cost estimates, timing of estimated costs and settlements, inflation, our credit-adjusted, risk-free interest rate and applicable regulations.

These estimates are subject to uncertainty attributable to:

• We cannot determine with precision the ultimate amounts of our environmental remediation liabilities.

Our estimates of these liabilities require assumptions about uncertain future events.

Changes in these estimates may be sensitive to changes in cost estimates, timing of estimated costs and settlements, inflation and applicable regulations.

Our estimates of these liabilities require assumptions about uncertain future events, which may change the ultimate amounts of our environmental remediation liabilities.

Thus, our estimates could change substantially as additional information becomes available regarding the nature or extent of contamination, the required remediation methods, timing of expenditures, the final apportionment of responsibility among the potentially responsible parties identified, the financial viability of those parties and the actions of governmental agencies or private parties with interests in the matter.

The actual environmental costs may exceed our current and future accruals for these costs, and any adjustments could be material.

• Actual amounts could differ from the estimated liabilities as a result of changes in estimated future litigation costs to pursue the matter to ultimate resolution.

• An unanticipated environmental liability that arises could result in a material charge to our consolidated statements of income.

Insurance Reserves and Related Costs

Our insurance policies for workers' compensation, commercial general liability, commercial auto liability and environmental liability are high deductible, or retention programs.

The deductibles, or retentions, range from $3 million to $10 million.

The employee-related health benefits are also subject to a high-deductible insurance policy.

Accruals for deductibles or retentions are based on claims filed and actuarial estimates of claims development and claims incurred but not reported.

As of December 31, 2023 and 2022, our insurance reserves were $565.4 million and $502.6 million, respectively.

Changes in these estimates may be sensitive to changes in the frequency, severity and settlement amount of claims.

These estimates are subject to uncertainty attributable to:

• Incident rates, including frequency and severity and other actuarial assumptions could change causing our current and future actuarially determined obligations to change, which would be reflected in our consolidated statements of income in the period in which such adjustment is known.

• Recorded reserves may not be adequate to cover the future payment of claims.

Adjustments, if any, to estimates recorded resulting from ultimate claim payments would be reflected in the consolidated statements of income in the periods in which such adjustments are known.

• The settlement costs to discharge our obligations, including legal and health care costs, could increase or decrease causing current estimates of our insurance reserves to change.

New Accounting Standards

1 unchanged sentence

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What changed 10-K

Item 7. Management’s Discussion and Analysis