What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-30 compared with 2025-04-25 · 248 added, 152 removed, 359 unchanged (53% of the section changed)

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Although we believe that the expectations reflected in the forward-looking statements are reasonable, such expectations may not prove to be correct.

Among the factors that could cause actual results to differ materially from the expectations expressed in the forward-looking statements are the impacts of the overall global economy and increasing interest rates, impacts from international trade restrictions, tariffs, our ability to effectively integrate and manage companies we acquire, and to realize the anticipated benefits of any such acquisitions, the amount of the financial contribution of our sustainability initiatives, acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States, as well as our dependence on large, long-term collection, transfer and disposal contracts.

Among the factors that could cause actual results to differ materially from the expectations expressed in the forward-looking statements are the impacts of the overall global economy and changing interest rates, impacts from international trade restrictions and tariffs, our ability to effectively integrate and manage companies we acquire, and to realize the anticipated benefits of any such acquisitions, the impact of work stoppages or other labor disruptions, the amount of the financial contribution of our sustainability initiatives, acts of war, riots or terrorism, and the impact of these acts on economic, financial and social conditions in the United States, as well as our dependence on large, long-term collection, transfer and disposal contracts.

More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2024, particularly under Part 1, Item 1A - Risk Factors.

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We undertake no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

Recent Developments

2025 Financial Guidance

We continue to focus on pricing in excess of cost inflation, driving profitable volume growth, investing in sustainability to improve the environment and drive growth, investing in value-creating acquisitions and advancing technology to improve productivity and increase customer retention.

Specific guidance follows:

We anticipate revenue for the year ending December 31, 2025 to be in the range of $16.675 billion to $16.750 billion.

Adjusted Diluted Earnings per Share

The following is a summary of anticipated adjusted diluted earnings per share for the year ending December 31, 2025.

Adjusted diluted earnings per share is not a measure determined in accordance with U.S.

(Anticipated)

Year Ending December 31, 2025

Diluted earnings per share $ 6.72 - 6.74

Restructuring charges 0.04

Labor disruption 0.06 - 0.12

Adjusted diluted earnings per share $ 6.82 - 6.90

In July 2025, we began to experience labor disruptions in certain isolated markets.

We estimated in the table above the impact we expect to incur in the year ended December 31, 2025, due to these labor disruptions.

The impact to our consolidated financial statements will ultimately be determined by the duration of these disruptions.

Table of C ontents

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

We use this measure, and believe investors will find it 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, costs and recoveries in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods.

Our definition of adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

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

As of March 31, 2025, we operated across the United States and Canada through 369 collection operations, 251 transfer stations, 77 recycling centers, 208 active landfills, 2 treatment, recovery and disposal facilities, 23 treatment, storage and disposal facilities (TSDF), 5 salt water disposal wells, 15 deep injection wells and 2 polymer centers.

We are engaged in 80 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 124 closed landfills as of March 31, 2025.

Revenue for the three months ended March 31, 2025 increased by 3.8% to $4,009 million compared to $3,862 million for the same period in 2024.

This change in revenue is due to increases in average yield of 4.5%, increased revenue from acquisitions, net of divestitures of 0.9%, an increase in recycling processing and commodity sales of 0.3% and an increase in environmental solutions revenue of 0.2%.

These increases were partially offset by a decrease in volume of 1.2%, a decrease in fuel recovery fees of 0.4% and a decrease of 0.5% due to the number of workdays during the three months ended March 31, 2025, as compared to the same period in 2024.

The following table summarizes our revenue, expenses and operating income for the three months ended March 31, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

As of June 30, 2025, we operated across the United States and Canada through 372 collection operations, 254 transfer stations, 79 recycling centers, 208 active landfills, 2 treatment, recovery and disposal facilities, 23 treatment, storage and disposal facilities (TSDF), 5 salt water disposal wells, 15 deep injection wells and 2 polymer centers.

We are engaged in 81 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 125 closed landfills as of June 30, 2025.

Revenue for the six months ended June 30, 2025 increased by 4.2% to $8,244 million compared to $7,910 million for the same period in 2024.

This change in revenue is due to increases in average yield of 4.3%, increased revenue from acquisitions, net of divestitures of 1.2%, and an increase in recycling processing and commodity sales of 0.1%.

These increases were partially offset by a decrease in volume of 0.5%, a decrease in fuel recovery fees of 0.4%, a decrease in environmental solutions revenue of 0.3%, and a decrease of 0.2% due to the number of workdays during the six months ended June 30, 2025, as compared to the same period in 2024.

The following table summarizes our revenue, expenses and operating income for the three and six months ended June 30, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

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

2025 2024 2025 2024

Revenue $ 4,235 100.0 % $ 4,048 100.0 % $ 8,244 100.0 % $ 7,910 100.0 %

Cost of operations 2,449 57.9 2,383 58.8 4,763 57.8 4,666 59.0

Depreciation, amortization and depletion of property and equipment 389 9.7 364 9.4

Depreciation, depletion and amortization of property and equipment 415 9.8 375 9.3 804 9.8 740 9.4

Amortization of other intangible assets 22 0.5 19 0.5 43 0.5 36 0.4

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Selling, general and administrative 425 10.0 407 10.1 852 10.3 822 10.4

Gain on business divestitures and impairments, net (2) — — —

Loss (gain) on business divestitures and impairments, net 3 0.1 (2) — 1 — (2) —

Restructuring charges 6 0.1 6 — 9 0.1 12 0.1

Operating income $ 861 20.3 % $ 814 20.1 % $ 1,665 20.2 % $ 1,547 19.6 %

Our pre-tax income was $665 million for the three months ended March 31, 2025, compared to $599 million for the same period in 2024.

Our pre-tax income was $720 million and $1,385 million for the three and six months ended June 30, 2025, respectively, compared to $654 million and $1,253 million for the same periods in 2024, respectively.

Our net income attributable to Republic Services, Inc.

was $495 million for the three months ended March 31, 2025, or $1.58 per diluted share, compared to $454 million, or $1.44 per diluted share for the same period in 2024.

During each of the three months ended March 31, 2025 and 2024, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax expense, net income attributable to Republic Services, Inc.

was $550 million and $1,045 million for the three and six months ended June 30, 2025, or $1.75 and $3.33 per diluted share, respectively, compared to $512 million and $965 million, or $1.62 and $3.06 per diluted share for the same periods in 2024, respectively.

During each of the three and six months ended June 30, 2025 and 2024, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, tax expense, net income attributable to Republic Services, Inc.

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

Additionally, see our Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of other items that impacted our earnings during the three months ended March 31, 2025 and 2024.

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Diluted Diluted

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As reported $ 720 $ 170 $ 550 $ 1.75 $ 654 $ 142 $ 512 $ 1.62

Gain on extinguishment of debt and other related costs — — — — (8) (2) (6) (0.02)

Restructuring charges 6 2 4 0.01 6 2 4 0.01

Gain on business divestitures and impairments, net (2) — (2) (0.01) — — — —

Loss (gain) on business divestitures and impairments, net (2)

3 1 2 0.01 (2) (1) (1) —

Total adjustments 9 3 6 0.02 (4) (1) (3) (0.01)

As adjusted $ 729 $ 173 $ 556 $ 1.77 $ 650 $ 141 $ 509 $ 1.61

Six Months Ended June 30, 2025

Six Months Ended June 30, 2024

Diluted Diluted

Net Earnings Net Earnings

Pre-tax Tax Income - per Pre-tax Tax Income - per

Income Impact (1)

Republic Share Income Impact (1)

Republic Share

As reported $ 1,385 $ 340 $ 1,045 $ 3.33 $ 1,253 $ 288 $ 965 $ 3.06

Gain on extinguishment of debt and other related costs — — — — (8) (2) (6) (0.02)

Restructuring charges 9 2 7 0.03 12 3 9 0.02

Loss (gain) on business divestitures and impairments, net (3)

1 — 1 — (2) (1) (1) —

Total adjustments 10 2 8 0.03 2 — 2 —

As adjusted $ 1,395 $ 342 $ 1,053 $ 3.36 $ 1,255 $ 288 $ 967 $ 3.06

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

(2) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the three months ended June 30, 2024.

(3) The aggregate impact to adjusted diluted earnings per share totals to less than $0.01 for the six months ended June 30, 2025 and 2024.

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

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Further information on each of these adjustments is included below.

Gain on extinguishment of debt and other related costs.

During the three and six months ended June 30, 2025, we did not incur any gains or losses on extinguishment of debt.

During the three and six months ended June 30, 2024, we recognized a gain of $8 million attributable to the early settlement of certain cash flow hedges related to certain debt obligations.

The gain was recognized as a reduction of interest expense.

Restructuring charges.

During the three months ended March 31, 2025 and 2024 , we incurred restructuring charges of $4 million and $6 million , respectively.

During the three and six months ended June 30, 2025, we incurred restructuring charges of $6 million and $9 million, respectively, and during the three and six months ended June 30, 2024, we incurred restructuring charges of $6 million and $12 million , respectively.

The 2025 charges primarily related to the design and implementation of a new accounts receivable system.

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

During the three months ended March 31, 2025 and 2024, we paid $3 million and $6 million, respectively, related to these restructuring efforts.

During the six months ended June 30, 2025 and 2024, we paid $7 million and $10 million, respectively, related to these restructuring efforts.

During the remainder of 2025, we expect to incur additional restructuring charges of approximately $6 million , primarily related to the design and implementation of a new accounts receivable system .

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

Gain on business divestitures and impairments, net.

During the three months ended March 31, 2025, we recorded a gain on business divestitures and impairments of $2 million.

During the three months ended March 31, 2024, we did not record a gain or loss on business divestitures and impairments.

Loss (gain) on business divestitures and impairments, net.

During the three and six months ended June 30, 2025, we recorded a loss on business divestitures and impairments of $3 million and $1 million, respectively.

During the three and six months ended June 30, 2024, we recorded a gain on business divestitures and impairments of $2 million.

Results of Operations

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

The following table reflects our revenue by service line for the three months ended March 31, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

The following table reflects our revenue by service line for the three and six months ended June 30, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

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

2025 2024 2025 2024

$ 752 17.8 % $ 733 18.1 % $ 1,496 18.1 % $ 1,457 18.4 %

Small-container

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Total revenue $ 4,235 100.0 % $ 4,048 100.0 % $ 8,244 100.0 % $ 7,910 100.0 %

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the three and six months ended June 30, 2025 and 2024:

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

2025 2024 2025 2024

Average yield 4.1 % 5.5 % 4.3 % 5.8 %

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

The following table reflects core price, average yield and volume as a percentage of related-business revenue for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

As a % of Related Business

The following table reflects core price, average yield and volume as a percentage of related-business revenue for the three and six months ended June 30, 2025 and 2024:

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

2025 2024 2025 2024

As a % of Related Business As a % of Related Business

Core price 7.0 % 8.1 % 7.2 % 8.3 %

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Volume 0.2 % (1.0) % (0.6) % (1.0) %

During the three months ended March 31, 2025, we experienced the following changes in our revenue as compared to the same period in 2024:

• Average yield increased revenue by 4.5% for the three months ended March 31, 2025, due to positive pricing changes in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to changes in fuel prices, decreased revenue by 0.4% for the three months ended March 31, 2025, due to a decrease in fuel prices compared to the same period in 2024.

• Volume decreased revenue by 1.2% during the three months ended March 31, 2025, primarily due to a decline in volume in our residential, large-container and small-container lines of business as well as our transfer line of business.

The decline in revenue in our large-container collection line of business was primarily driven by a slowing in construction-related activity and certain manufacturing end markets as well as adverse weather in January and February.

The decline in our residential and small-container lines of business is primarily attributable to certain municipal contract losses and broker-related business.

The volume decline was partially offset by an increase in overall volume in our landfill line of business primarily attributable to increased special waste and construction and demolition volumes.

The increase in overall landfill volumes was partially offset by a decline in solid waste volumes due to adverse winter weather.

• Revenue decreased by 0.5% due to the impact of the number of workdays during the three months ended March 31, 2025, as compared to the same period in 2024, which drove a decrease in volumes in our large-container, landfill, and transfer lines of business.

• Recycling processing and commodity sales increased revenue by 0.3% during the three months ended March 31, 2025, primarily due to increased volumes at the Las Vegas Polymer Center and reopening a recycling center on the west coast.

The average price for recycled commodities at our recycling centers, excluding glass and organics, for the three months ended March 31, 2025 was $155 per ton, compared to $153 per ton for the same period in 2024.

During the three and six months ended June 30, 2025, we experienced the following changes in our revenue as compared to the same periods in 2024:

• Average yield increased revenue by 4.1% and 4.3% for the three and six months ended June 30, 2025, due to positive pricing changes in all lines of business.

• The fuel recovery fee program, which mitigates our exposure to changes in fuel prices, decreased revenue by 0.3% and 0.4% for the three and six months ended June 30, 2025, due to a decrease in fuel prices compared to the same period in 2024.

• Volume increased revenue by 0.2% during the three months ended June 30, 2025, primarily due to an increase in volume in our landfill line of business.

The increase was primarily driven by construction and demolition volume related to Hurricane Helene recovery efforts and special waste volume related to the Los Angeles area wildfire remediation.

This increase was partially offset by a decline in volume in all collection lines of business as well as a decline in solid waste volumes in our landfill line of business.

Volume decreased revenue by 0.5% during the six months ended June 30, 2025, primarily due to a decline in volume in our collection and transfer lines of business as well as a decrease in solid waste volumes in our landfill line of business.

The decline in revenue in our large-container collection line of business was primarily driven by a slowing in construction-related activity as well as adverse weather in January and February.

The decline in our residential and small-container collection lines of business is primarily attributable to certain municipal contract losses and broker-related business.

• Revenue decreased by 0.2% due to the impact of the number of workdays during the six months ended June 30, 2025, as compared to the same period in 2024, which drove a decrease in volumes in our collection, landfill, and transfer

lines of business.

The impact of the number of workdays resulted in no change to revenue during the three months ended June 30, 2025, as compared to the same period in 2024.

• Recycling processing and commodity sales increased revenue by 0.1% during the six months ended June 30, 2025, primarily due to increased volumes at the Las Vegas Polymer Center, the opening of the Indianapolis Polymer Center and reopening a recycling center on the west coast.

There was no change to revenue as a result of recycling processing and commodity sales during the three months ended June 30, 2025, as compared to the same period in 2024.

The average price for recycled commodities at our recycling centers, excluding glass and organics, for the three and six months ended June 30, 2025 was $149 and $152 per ton, respectively, compared to $173 and $163 per ton for the same periods in 2024, respectively.

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

At current volumes and mix of materials, we believe a $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $11 million.

• Environmental solutions increased revenue by 0.2% during the three months ended March 31, 2025, primarily due to an increase in event-based volumes and price increases relative to the same period in 2024.

• Acquisitions, net of divestitures, increased revenue by 0.9% during the three months ended March 31, 2025, reflecting the results of our continued growth strategy of acquiring environmental services companies that complement and expand our existing business platform.

• Environmental solutions decreased revenue by 0.9% and 0.3% during the three and six months ended June 30, 2025, primarily due to a decrease in event-based volumes relative to the same periods in 2024.

• Acquisitions, net of divestitures, increased revenue by 1.5% and 1.2% during the three and six months ended June 30, 2025, respectively, 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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and other, which includes expenses such as facility operating costs, equipment rent and gains or losses on sale of assets used in our operations.

The following table summarizes the major components of our cost of operations for the three months ended March 31, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

The following table summarizes the major components of our cost of operations for the three and six months ended June 30, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

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

2025 2024 2025 2024

Labor and related benefits $ 844 19.9 % $ 809 20.0 % $ 1,662 20.2 % $ 1,599 20.2 %

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

The most significant items impacting our cost of operations during the three months ended March 31, 2025 and 2024 are summarized below:

The most significant items impacting our cost of operations during the three and six months ended June 30, 2025 and 2024 are summarized below:

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

Partially offsetting these increases was the impact of one less workday during 2025.

Partially offsetting these increases for the six months ended June

30, 2025 was the impact of one less workday compared to the six months ended June 30, 2024.

• Transfer and disposal costs decreased primarily due to a decrease in collection volumes.

• During both the three months ended March 31, 2025 and 2024, approximately 67% of the total solid waste volume we collected was disposed at landfill sites that we owned or operated (internalization).

• During both the three and six months ended June 30, 2025 and 2024, approximately 67% of the total solid waste volume we collected was disposed at landfill sites that we owned or operated (internalization).

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

The national average diesel fuel price per gallon for the three months ended March 31, 2025 and 2024 was $3.63 and $3.96, respectively.

The national average diesel fuel price per gallon for the three and six months ended June 30, 2025 was $3.56 and $3.59, respectively, as compared to $3.86 and $3.91, respectively, for the same periods in 2024.

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

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At current participation rates, a twenty-cent per gallon change in the price of diesel fuel would change our fuel recovery fee by approximately $38 million per year.

• Landfill operating costs increased primarily due to an increase in monitoring and maintenance costs on our gas and leachate extraction systems.

• Risk management expenses increased primarily due to higher premium costs.

• Other costs of operations increased due to increased occupancy and facility related expenses.

Depreciation, Depletion and Amortization of Property and Equipment

The following table summarizes depreciation, amortization and depletion of property and equipment for the three months ended March 31, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

The following table summarizes depreciation, depletion and amortization of property and equipment for the three and six months ended June 30, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

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

2025 2024 2025 2024

Depreciation and amortization of property and equipment

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150 3.5 131 3.3 279 3.4 251 3.2

Depreciation, amortization and depletion expense

Depreciation, depletion and amortization expense

$ 415 9.8 % $ 375 9.3 % $ 804 9.8 % $ 740 9.4 %

Depreciation and amortization of property and equipment increased for the three months ended March 31, 2025 primarily due to assets added through acquisitions.

Landfill depletion and amortization expense increased for the three months ended March 31, 2025 due to an increase in our overall average depletion rate.

Depreciation and amortization of property and equipment increased for the three and six months ended June 30, 2025, largely due to an increased investment in trucks and the supporting infrastructure as well as the addition of assets through acquisitions.

Landfill depletion and amortization expense increased for the three and six months ended June 30, 2025 due to increased construction and demolition volumes related to the Hurricane Helene recovery efforts and increased special waste volumes attributable to the Los Angeles area wildfire remediation.

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

Additionally, during the three and six months ended June 30, 2025, we recognized certain unfavorable amortization adjustments related to our asset retirement obligations.

Amortization of Other Intangible Assets

Amortization of other intangible assets primarily relates to customer relationships.

Expenses for amortization of other intangible assets were $21 million, or 0.5% of revenue for the three months ended March 31, 2025, compared to $18 million, or 0.5% of revenue, for the same period in 2024.

Expenses for amortization of other intangible assets were $22 million and $43 million, or 0.5% of revenue for the three and six months ended June 30, 2025, respectively, compared to $19 million and $36 million, or 0.5% and 0.4% of revenue, for the same periods in 2024, respectively.

Amortization expense increased due to assets added through acquisition activity.

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

Expenses for amortization of other assets were $24 million, or 0.6% of revenue for the three months ended March 31, 2025, compared to $17 million, or 0.4% of revenue for the same period in 2024.

Expenses for amortization of other assets were $26 million and $50 million, or 0.6% of revenue for the three and six months ended June 30, 2025, respectively, compared to $19 million and $36 million, or 0.5% and 0.4% of revenue for the same periods in 2024, respectively.

Accretion Expense

Accretion expense was $28 million, or 0.7% of revenue, for the three months ended March 31, 2025, compared to $27 million, or 0.7% of revenue for the same period in 2024.

Accretion expense was $28 million and $57 million, or 0.7% of revenue, for the three and six months ended June 30, 2025, respectively, compared to $27 million and $53 million, or 0.7% of revenue for the same periods in 2024, respectively.

Selling, General and Administrative Expenses

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

The following table summarizes our selling, general and administrative expenses for the three months ended March 31, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

Three Months Ended March 31,

The following table summarizes our selling, general and administrative expenses for the three and six months ended June 30, 2025 and 2024 (in millions of dollars and as a percentage of revenue):

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

2025 2024 2025 2024

Salaries and related benefits $ 280 6.6 % $ 276 6.8 % $ 573 6.9 % $ 556 7.0 %

Provision for doubtful accounts

8 0.2 12 0.3 18 0.2 20 0.3

Other 137 3.2 119 3.0 261 3.2 246 3.1

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

The most significant items affecting our selling, general and administrative expenses during the three months ended March 31, 2025 and 2024 are summarized below:

• Salaries and related benefits increased primarily due to higher wages and benefits resulting from annual merit increases as well as acquisition-related growth.

• Provision for doubtful accounts increased primarily due to an increase in days sales outstanding.

As of March 31, 2025 , our days sales outstanding were 42.1, or 30.7 days net of deferred revenue, compared to 41.5, or 30.4 days net of deferred revenue, as of March 31, 2024.

Gain on Business Divestitures and Impairments, Net

The most significant items affecting our selling, general and administrative expenses during the three and six months ended June 30, 2025 and 2024 are summarized below:

• Salaries and related benefits increased in aggregate dollars primarily due to higher wages and benefits resulting from annual merit increases as well as acquisition-related growth.

• Provision for doubtful accounts decreased primarily due to the management of aged accounts receivable balances.

As of June 30, 2025 , our days sales outstanding were 40.4, or 29.9 days net of deferred revenue, compared to 40.9, or 30.2 days net of deferred revenue, as of June 30, 2024.

Loss (Gain) on Business Divestitures and Impairments, Net

We strive to have a number one or number two 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 may be material to our results of operations in a given period.

During the three months ended March 31, 2025, we recorded a net gain on business divestitures and impairments of $2 million.

During the three months ended March 31, 2024, we did not recognize a gain or loss on business divestitures and impairments.

During the three and six months ended June 30, 2025, we recorded a net loss on business divestitures and impairments of $3 million and $1 million, respectively, as compared to a $2 million gain for each of the same periods in 2024.

Restructuring Charges

For a discussion of Restructuring Charges incurred during the three months ended March 31, 2025 and 2024, see Overview of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

For a discussion of Restructuring Charges incurred during the three and six months ended June 30, 2025 and 2024, see Overview of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Expense

The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions, for the three months ended March 31, 2025 and 2024 (in millions of dollars):

Three Months Ended March 31,

The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions, for the three and six months ended June 30, 2025 and 2024 (in millions of dollars):

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

2025 2024 2025 2024

Interest expense on debt

$ 128 $ 117 $ 252 $ 236

Non-cash interest 19 13 37 35

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Total interest expense $ 145 $ 128 $ 285 $ 268

Total interest expense for the three months ended March 31, 2025 increased primarily due to higher interest rates on our fixed rate debt.

For the three months ended March 31, 2025 and 2024, cash paid for interest, excluding net swap settlements for our floating-to-fixed interest rate swap, was $105 million and $118 million, respectively.

As of March 31, 2025, we had $2,022 million of principal floating rate debt.

Total interest expense for the three and six months ended June 30, 2025 increased primarily due to higher interest rates on our fixed rate debt.

For the six months ended June 30, 2025 and 2024, cash paid for interest, excluding net swap settlements for our floating-to-fixed interest rate swap, was $243 million and $238 million, respectively.

As of June 30, 2025, we had $1,674 million of principal floating rate debt.

If interest rates increased or decreased by 100 basis points on our floating rate debt, annualized interest expense and net cash payments for interest would increase or decrease by approximately $17 million.

Our effective tax rate, exclusive of non-controlling interests, for the three months ended March 31, 2025 and 2024 was 25.6% and 24.2%, respectively.

Net cash paid for income taxes was $2 million and $8 million for the three months ended March 31, 2025 and 2024, respectively.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2025 was 23.6% and 24.6%, respectively.

Our effective tax rate, exclusive of non-controlling interests, for the three and six months ended June 30, 2024 was 21.7% and 22.9%, respectively.

Net cash paid for income taxes was $150 million and $109 million for the six months ended June 30, 2025 and 2024, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (the "Act”) was signed into law.

The Act, among other things, implements changes to the tax treatment relating to bonus depreciation, research and experimental expenditures and interest expense, and includes phase-outs and restrictions on several clean energy tax incentives.

We are evaluating the Act, and the total financial impact to the Company is unknown at this time.

We currently expect to recognize approximately $80 million of cash tax benefit during the year ended December 31, 2025 as a result of changes to bonus depreciation.

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

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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.

Group 3 is our environmental solutions business operating 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.

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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 three months ended March 31, 2025 and 2024 (in millions of dollars) follows.

Summarized financial information regarding our reportable segments for the three and six months ended June 30, 2025 and 2024 (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 12, Segment Reporting , of the notes to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

Group 1 Group 2 Recycling & Waste Subtotal (1)

(Environmental Solutions) Corporate entities and other Total

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Gross Revenue $ 2,182 $ 2,141 $ 4,323 $ 466 $ 93 $ 4,882

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Total Assets $ 14,108 $ 11,433 $ 25,541 $ 5,128 $ 2,728 $ 33,397

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Gross Revenue $ 2,041 $ 2,053 $ 4,094 $ 480 $ 89 $ 4,663

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(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 comparing the three months ended March 31, 2025 and 2024 are discussed below.

Adjusted EBITDA in Group 1 increased from $543 million for the three months ended March 31, 2024 to $601 million for the three months ended March 31, 2025.

The most significant items impacting adjusted EBITDA in Group 1 during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 include:

• Net revenue for the three months ended March 31, 2025 increased 5.4% due to an increase in average yield in all lines of business and volume increases in our landfill special waste line of business.

The increases were partially offset by

decreased volume in our collection and transfer lines of business.

Group 1 Group 2 Recycling & Waste Subtotal (1)

(Environmental Solutions) Corporate entities and other Total

Six Months Ended June 30, 2025

Gross Revenue $ 4,247 $ 4,120 $ 8,367 $ 920 $ 186 $ 9,473

Intercompany Revenue (633) (536) (1,169) (25) (35) (1,229)

Revenue allocations 69 66 135 16 (151) —

Net Revenue 3,683 3,650 7,333 911 — 8,244

Cost of Operations 2,093 2,099 4,192 571 — 4,763

SG&A 369 342 711 141 — 852

Adjusted EBITDA $ 1,221 $ 1,209 $ 2,430 $ 199 $ — $ 2,629

Capital Expenditures $ 388 $ 268 $ 656 $ 72 $ 138 $ 866

Total Assets $ 14,108 $ 11,433 $ 25,541 $ 5,128 $ 2,728 $ 33,397

Six Months Ended June 30, 2024

Gross Revenue $ 4,012 $ 4,012 $ 8,024 $ 908 $ 171 $ 9,103

Intercompany Revenue (602) (531) (1,133) (25) (35) (1,193)

Revenue allocations 62 61 123 13 (136) —

Net Revenue 3,472 3,542 7,014 896 — 7,910

Cost of Operations 2,009 2,097 4,106 560 — 4,666

SG&A 348 336 684 138 — 822

Adjusted EBITDA $ 1,115 $ 1,109 $ 2,224 $ 198 $ — $ 2,422

Capital Expenditures $ 309 $ 267 $ 576 $ 61 $ 281 $ 918

Total Assets $ 13,390 $ 11,224 $ 24,614 $ 4,462 $ 2,858 $ 31,934

(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 comparing the three and six months ended June 30, 2025 and 2024 are discussed below.

Adjusted EBITDA in Group 1 increased from $571 million and $1,115 million for the three and six months ended June 30, 2024, respectively, to $622 million and $1,221 million for the three and six months ended June 30, 2025, respectively.

The most significant items impacting adjusted EBITDA in Group 1 during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 include:

• Net revenue for the three months ended June 30, 2025 increased 6.8% due to an increase in average yield in all lines of business and higher special waste volumes in our landfill line of business.

The increase in special waste volumes was primarily driven by the Los Angeles area wildfire remediation.

The increases were partially offset by decreased volume in our large-container and residential collection and transfer lines of business.

The decrease in volume was also negatively impacted by lower solid waste volumes in our landfill line of business.

• Net revenue for the six months ended June 30, 2025 increased 6.1% due to an increase in average yield in all lines of business and an increase in volumes in our landfill line of business.

The increase in volumes in our landfill line of business was driven by higher special waste volumes attributable to the Los Angeles area wildfire remediation, partially offset by a decline in solid waste volumes.

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

• Cost of operations increased primarily due to an increase in labor costs and equipment maintenance.

Adjusted EBITDA in Group 2 increased from $575 million and $1,109 million for the three and six months ended June 30, 2024, respectively, to $630 million and $1,209 million for the three and six months ended June 30, 2025, respectively.

The most significant items impacting adjusted EBITDA in Group 2 during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 include:

• Net revenue for the three and six months ended June 30, 2025 increased 4.3% and 3.0%, respectively, due to an increase in average yield in all lines of business and increased volumes in our landfill and transfer lines of business.

The increase in volume in our landfill line of business was primarily due to increased construction and demolition volume related to the Hurricane Helene recovery efforts as well as increased special waste and solid waste volumes.

These increases were partially offset by decreased volumes in our residential, large-container and small-container lines of business.

• Cost of operations increased primarily due to an increase in labor costs.

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

Adjusted EBITDA in Group 2 increased from $535 million for the three months ended March 31, 2024 to $577 million for the three months ended March 31, 2025.

The most significant items impacting adjusted EBITDA in Group 2 during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 include:

• Net revenue for the three months ended March 31, 2025 increased 1.7% due to an increase in average yield in all lines of business and increased volumes in our landfill line of business.

The increase in volume in our landfill line of business was primarily due to increased construction and demolition and special waste volumes.

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

• Cost of operations decreased primarily due to a decrease in fuel costs due to a decrease in average fuel price per gallon.

Adjusted EBITDA in Group 3 increased from $87 million for the three months ended March 31, 2024 to $90 million for the three months ended March 31, 2025.

The most significant items impacting adjusted EBITDA in Group 3 during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 include:

• Net revenue for the three months ended March 31, 2025 increased due to an increase in event-based volumes, acquisition related growth and price increases relative to the same period in 2024.

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

Adjusted EBITDA in Group 3 decreased from $112 million for the three months ended June 30, 2024 to $109 million for the three months ended June 30, 2025.

Adjusted EBITDA in Group 3 increased from $198 million for the six months ended June 30, 2024 to $199 million for the six months ended June 30, 2025.

The most significant items impacting adjusted EBITDA in Group 3 during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 include:

• Net revenue for the three and six months ended June 30, 2025 decreased due to a decrease in event-based volumes, partially offset by acquisition related growth and price increases relative to the same respective periods in 2024.

• Cost of operations for the three months ended June 30, 2025 decreased primarily due to a decrease in subcontract costs relative to the same period in 2024.

• Cost of operations for the six months ended June 30, 2025 increased primarily due to an increase in labor cost and the impact of acquisitions.

Landfill and Environmental Matters

Available Airspace

As of March 31, 2025 , we owned or operated 208 active landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards.

As of June 30, 2025 , we owned or operated 208 active landfills with total available disposal capacity estimated to be 5.1 billion in-place cubic yards.

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

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Net of Closures Airspace

Consumed Changes in Engineering Estimates Balance as of March 31, 2025

Consumed Changes in Engineering Estimates Balance as of June 30, 2025

Cubic yards (in millions):

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

As of March 31, 2025 , 14 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

As of June 30, 2025 , 13 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity.

At projected annual volumes, these 13 landfills have an estimated remaining average site life of 30 years, including probable expansion airspace.

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Property and Equipment

The following tables reflect the activity in our property and equipment accounts for the three months ended March 31, 2025:

The following tables reflect the activity in our property and equipment accounts for the six months ended June 30, 2025:

Gross Property and Equipment

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Transfers, Foreign Currency Translation

Adjustments Balance as of March 31, 2025

Adjustments Balance as of June 30, 2025

Land $ 897 $ 12 $ — $ 30 $ — $ — $ 26 $ 965

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Total $ 25,544 $ 784 $ (242) $ 148 $ 38 $ 4 $ 4 $ 26,280

Accumulated Depreciation, Amortization and Depletion

Accumulated Depreciation, Depletion and Amortization

Balance as of December 31, 2024 Additions

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Divestitures Adjustments

Obligations Impairments, Transfers, Foreign Currency Translation and Other Adjustments Balance as of March 31, 2025

Obligations Impairments, Transfers, Foreign Currency Translation and Other Adjustments Balance as of June 30, 2025

Landfill development costs $ (6,031) $ (274) $ — $ — $ (5) $ — $ (6,310)

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 122 $ 74

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The following table summarizes our restricted cash and marketable securities:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Capping, closure and post-closure obligations $ 63 $ 59

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

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

We expect to invest at least $1 billion in acquisitions in 2025.

Summary of Cash Flow Activity

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

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31

The following table summarizes our cash flow from operating activities, investing activities and financing activities for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Cash Provided by Operating Activities $ 2,134 $ 1,911

Cash Used in Investing Activities $ (1,815) $ (1,113)

Cash Provided by (Used in) Financing Activities $ 284 $ (201)

Cash Used in Financing Activities $ (260) $ (435)

Cash Flows Provided by Operating Activities

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

The most significant items affecting the comparison of our cash flows provided by operating activities for the three months ended March 31, 2025 and 2024 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, increased our cash flow from operations by $19 million during the three months ended March 31, 2025, compared to a decrease of $165 million during the same period in 2024, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $18 million during the three months ended March 31, 2025 due to the timing of billings net of collections, compared to a $1 million increase in the same period in 2024.

As of March 31, 2025, our days sales outstanding were 42.1, or 30.7 days net of deferred revenue, compared to 41.5, or 30.4 days net of deferred revenue, as of March 31, 2024.

• Our prepaid expenses and other assets decreased $90 million during the three months ended March 31, 2025, compared to an $18 million decrease in the same period in 2024.

The decrease in prepaid expenses and other assets during the three months ended March 31, 2025 is primarily driven by a decrease of tax receivables due to the timing of our estimated tax payments, partially offset by an increase in capitalized implementation costs for our cloud-based hosting arrangements.

• Our accounts payable decreased $42 million during the three months ended March 31, 2025, compared to a $1 million decrease in the same period in 2024, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $8 million during the three months ended March 31, 2025, compared to $9 million in the same period in 2024.

• Cash paid for remediation obligations was $1 million lower during the three months ended March 31, 2025, compared to the same period in 2024.

• Our other liabilities increased $6 million during the three months ended March 31, 2025, compared to a $162 million decrease in the same period in 2024, primarily due to the timing of payments for accrued payroll, income taxes payable and insurance reserves as well as a decrease in payment for certain incentive compensation accruals.

In addition, cash paid for interest, excluding net swap settlements for our floating-to-fixed interest rate swaps, was $105 million and $118 million for the three months ended March 31, 2025 and 2024, respectively.

Cash paid for incomes taxes was $2 million and $8 million for the three months ended March 31, 2025 and 2024, respectively.

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

The most significant items affecting the comparison of our cash flows provided by operating activities for the six months ended June 30, 2025 and 2024 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, increased our cash flow from operations by $55 million during the six months ended June 30, 2025, compared to a decrease of $110 million during the same period in 2024, primarily as a result of the following:

• Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $51 million during the six months ended June 30, 2025 due to the timing of billings net of collections, compared to a $69 million increase in the same period in 2024.

As of June 30, 2025, our days sales outstanding were 40.4, or 29.9 days net of deferred revenue, compared to 40.9, or 30.2 days net of deferred revenue, as of June 30, 2024.

• Our prepaid expenses and other assets decreased $21 million during the six months ended June 30, 2025, compared to a $36 million decrease in the same period in 2024.

The decrease in prepaid expenses and other assets during the six months ended June 30, 2025 is primarily driven by a decrease of tax receivables due to the timing of our estimated tax payments, partially offset by an increase in costs associated with cloud-based hosting arrangements.

• Our accounts payable decreased $13 million during the six months ended June 30, 2025, compared to a $19 million increase in the same period in 2024, due to the timing of payments.

• Cash paid for capping, closure and post-closure obligations was $21 million during the six months ended June 30, 2025, compared to $22 million in the same period in 2024.

• Cash paid for remediation obligations was $8 million lower during the six months ended June 30, 2025, compared to the same period in 2024.

• Our other liabilities increased $138 million during the six months ended June 30, 2025, compared to a $47 million decrease in the same period in 2024, primarily due to the timing of payments for accrued payroll and income taxes payable, partially offset by an increase in cash paid for certain incentive compensation accruals.

In addition, cash paid for interest, excluding net swap settlements for our floating-to-fixed interest rate swaps, was $243 million and $238 million for the six months ended June 30, 2025 and 2024, respectively.

Cash paid for incomes taxes was $150 million and $109 million for the six months ended June 30, 2025 and 2024, respectively.

Cash Flows Used in Investing Activities

The most significant items affecting the comparison of our cash flows used in investing activities for the three months ended March 31, 2025 and 2024 are summarized below:

• Capital expenditures during the three months ended March 31, 2025 were $459 million, compared with $515 million for the same period in 2024.

• During the three months ended March 31, 2025 and 2024, we paid $834 million and $166 million, respectively, for acquisitions and investments.

The most significant items affecting the comparison of our cash flows used in investing activities for the six months ended June 30, 2025 and 2024 are summarized below:

• Capital expenditures during the six months ended June 30, 2025 were $866 million, compared with $918 million for the same period in 2024.

• During the six months ended June 30, 2025 and 2024, we paid $963 million and $201 million, respectively, for acquisitions and investments.

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

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

Cash Flows Provided by (Used in) Financing Activities

The most significant items affecting the comparison of our cash flows provided by (used in) financing activities for the three months ended March 31, 2025 and 2024 are summarized below:

• During the three months ended March 31, 2025, we issued $1,200 million of senior notes for cash proceeds, net of discounts and fees, of $1,186 million.

We issued no senior notes during the three months ended March 31, 2024.

Net payments from notes payable and long-term debt were $646 million during the three months ended March 31, 2025, compared to net payments of $4 million during the same period in 2024.

Cash Flows Used in Financing Activities

The most significant items affecting the comparison of our cash flows used in financing activities for the six months ended June 30, 2025 and 2024 are summarized below:

• During the six months ended June 30, 2025, we issued $1,200 million of senior notes for cash proceeds, net of discounts and fees, of $1,183 million.

During the six months ended June 30, 2024, we issued $900 million of senior notes for cash proceeds, net of discounts and fees, of $889 million.

Net payments from notes payable and long-term debt were $1,005 million during the six months ended June 30, 2025, compared to net payments of $790 million during the same period in 2024.

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

• During the three months ended March 31, 2025, we repurchased 0.3 million shares of our common stock for $55 million, compared to no repurchases during the same period in 2024.

• Dividends paid were $181 million and $168 million during the three months ended March 31, 2025 and 2024, respectively.

• During the six months ended June 30, 2025, we repurchased 0.3 million shares of our common stock for $55 million, compared to repurchases of 0.9 million shares for $168 million during the same period in 2024.

• Dividends paid were $362 million and $337 million during the six months ended June 30, 2025 and 2024, respectively.

Financial Condition

Debt Obligations

As of March 31, 2025 , we had $421 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations.

As of June 30, 2025 , we had $421 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 three tax-exempt financings each with initial remarketing periods of 10 years.

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If the remarketing agents are unable to remarket our bonds, the remarketing agents can put the bonds to us.

In the event of a failed remarketing, as of March 31, 2025 , we had availability under our Credit Facility to fund the repurchase of these bonds until they are remarketed successfully.

In the event of a failed re-borrowing under our commercial paper program, as of March 31, 2025 , we had availability under our Credit Facility to fund the commercial paper program until it is re-borrowed successfully.

Accordingly, we have classified these tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of March 31, 2025 .

In the event of a failed remarketing, as of June 30, 2025 , we had availability under our Credit Facility to fund the repurchase of these bonds until they are remarketed successfully.

In the event of a failed re-borrowing under our commercial paper program, as of June 30, 2025 , we had availability under our Credit Facility to fund the commercial paper program until it is re-borrowed successfully.

Accordingly, we have classified these tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of June 30, 2025 .

For further discussion of the components of our overall debt, see Note 7, Debt, of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

As of March 31, 2025, we had $62 million of borrowings outstanding under our Uncommitted Credit Facility.

As of June 30, 2025, we had $32 million of borrowings outstanding under our Uncommitted Credit Facility.

As of December 31, 2024, we had no borrowings outstanding under our Uncommitted Credit Facility.

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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 0.805% 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 0.920% based on our Debt Ratings.

As of March 31, 2025 and December 31, 2024, C$216 million and C$232 million, respectively, were outstanding against the Canadian Sublimit.

Canadian dollar-denominated loans bear interest based on the Canadian Prime Rate or the Canadian Dollar Offered Rate, plus a current applicable margin of 0.805% based on our Debt Ratings.

As of June 30, 2025 and December 31, 2024, C$213 million and C$232 million, respectively, were outstanding against the Canadian Sublimit.

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

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

We had $151 million and $514 million of borrowings outstanding under the Credit Facility as of March 31, 2025 and December 31, 2024, respectively.

We had $322 million and $317 million of letters of credit outstanding under our Credit Facility as of March 31, 2025 and December 31, 2024, respectively.

We also had $640 million and $477 million of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of March 31, 2025 and December 31, 2024, respectively.

As a result, availability under our Credit Facility was $2.4 billion and $2.2 billion as of March 31, 2025 and December 31, 2024, respectively.

We had $156 million and $514 million of borrowings outstanding under the Credit Facility as of June 30, 2025 and December 31, 2024, respectively.

We had $322 million and $317 million of letters of credit outstanding under our Credit Facility as of June 30, 2025 and December 31, 2024, respectively.

We also had $318 million and $477 million of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of June 30, 2025 and December 31, 2024, respectively.

As a result, availability under our Credit Facility was $2.7 billion and $2.2 billion as of June 30, 2025 and December 31, 2024, respectively.

Financial and Other Covenants

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

As of March 31, 2025, our total debt to EBITDA ratio was approximately 2.6 compared to the 3.75 maximum allowed.

As of March 31, 2025, we were in compliance with all other covenants unde r our Credit Facility .

As of June 30, 2025, our total debt to EBITDA ratio was approximately 2.5 compared to the 3.75 maximum allowed.

As of June 30, 2025, we were in compliance with all other covenants unde r our Credit Facility .

EBITDA, which is a non-U.S.

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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 March 31, 2025 is 4.633% with a weighted average maturity of approximately 12 days.

The weighted average interest rate for borrowings outstanding as of June 30, 2025 is 4.568% with a weighted average maturity of approximately 4 days.

The weighted average interest rate for borrowings outstanding as of December 31, 2024 is 4.646% with a weighted average maturity of approximately 18 days.

We had $640 million and $477 million principal value of commercial paper issued and outstanding under the program as of March 31, 2025 and December 31, 2024, respectively.

We had $318 million and $477 million principal value of commercial paper issued and outstanding under the program as of June 30, 2025 and December 31, 2024, respectively.

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 March 31, 2025 and December 31, 2024, respectively.

Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of June 30, 2025 and December 31, 2024, respectively.

Senior Notes and Debentures

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, repayment of a portion of amounts outstanding on our Credit Facility and a portion of outstanding borrowings under the Commercial Paper Program, and repayment of the remaining amount outstanding under the Term Loan Facility and the Uncommitted Credit Facility.

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 Uncommitted Credit Facility and certain debt obligations.

In March 2025, we issued $500 million of 4.750% senior notes due 2030 and $700 million of 5.150% senior notes due 2035.

We used the proceeds from the March 2025 notes issuance for general corporate purposes, including the repayment on our Credit Facility and a portion of amounts outstanding under the Commercial Paper Program.

We used the proceeds from the March 2025 notes issuance for general corporate purposes, including the repayment of a portion of amounts outstanding on our Credit Facility and a portion of outstanding borrowings under the Commercial Paper Program.

Our senior notes and debentures are general unsecured and unsubordinated obligations and rank equally with our other unsecured obligations.

Tax-Exempt Financings

As of both March 31, 2025 and December 31, 2024, we had $1.4 billion of tax-exempt financings outstanding, with maturities ranging from 2026 to 2054 for both periods.

As of both June 30, 2025 and December 31, 2024, we had $1.4 billion of tax-exempt financings outstanding, with maturities ranging from 2026 to 2054 for both periods.

Finance Leases and Other

As of March 31, 2025 and December 31, 2024, we had finance lease and other liabilities of $333 million and $315 million, respectively, with maturities ranging from 2025 to 2063 for both periods.

As of March 31, 2025, finance leases and other included $76 million related to the construction of an office building located in Phoenix, Arizona, which has been accounted for as a financing obligation.

As of June 30, 2025 and December 31, 2024, we had finance leases and other liabilities of $363 million and $315 million, respectively, with maturities ranging from 2025 to 2063 for both periods.

As of June 30, 2025, finance leases and other included $105 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.

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

As of March 31, 2025, our credit ratings were BBB+, Baa1 and A- by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc, respectively.

As of June 30, 2025, our credit ratings were A-, A3 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.

15 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis