UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________ 

FORM 10-Q

 _________________________________________________________

(Mark One)

☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                     

Commission File Number: 1-14267

_________________________________________________________ 

REPUBLIC SERVICES, INC.

(Exact name of registrant as specified in its charter)

_________________________________________________________ 

Delaware		65-0716904
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
18500 North Allied Way		85054
Phoenix,	Arizona
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (480) 627-2700

_________________________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RSG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨	Smaller reporting company	☐
Non-accelerated filer	¨			Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.					¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  þ

As of April 30, 2021, the registrant had outstanding 319,033,411 shares of Common Stock, par value $0.01 per share (excluding treasury shares of 305,422).

REPUBLIC SERVICES, INC.

INDEX

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020	3
	Unaudited Consolidated Statement of Income for the Three Months Ended March 31, 2021 and 2020	4
	Unaudited Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2021 and 2020	5
	Unaudited Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2021 and 2020	6
	Unaudited Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2021 and 2020	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
	Signatures	48

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REPUBLIC SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

	March 31,		December 31,
	2021		2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23.2	$	38.2
Accounts receivable, less allowance for doubtful accounts and other of $36.0 and $34.7, respectively	1,095.4		1,091.3
Prepaid expenses and other current assets	324.5		392.3
Total current assets	1,443.1		1,521.8
Restricted cash and marketable securities	134.6		149.1
Property and equipment, net	8,679.2		8,726.2
Goodwill	12,047.2		12,046.4
Other intangible assets, net	181.5		173.1
Other assets	767.0		817.4
Total assets	$	23,252.6	$	23,434.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	678.3	$	779.0
Notes payable and current maturities of long-term debt	168.7		168.1
Deferred revenue	359.3		345.6
Accrued landfill and environmental costs, current portion	116.9		114.5
Accrued interest	53.2		54.6
Other accrued liabilities	772.4		820.2
Total current liabilities	2,148.8		2,282.0
Long-term debt, net of current maturities	8,594.2		8,766.1
Accrued landfill and environmental costs, net of current portion	1,713.6		1,694.7
Deferred income taxes and other long-term tax liabilities, net	1,254.7		1,238.8
Insurance reserves, net of current portion	284.4		281.8
Other long-term liabilities	618.6		681.8
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.01 per share; 50 shares authorized; none issued	—		—
Common stock, par value $0.01 per share; 750 shares authorized; 319.3 and 318.8 issued including shares held in treasury, respectively	3.2		3.2
Additional paid-in capital	2,757.3		2,741.4
Retained earnings	5,911.2		5,751.8
Treasury stock, at cost; 0.3 and — shares, respectively	(27.5)		(0.1)
Accumulated other comprehensive loss, net of tax	(11.3)		(12.4)
Total Republic Services, Inc. stockholders’ equity	8,632.9		8,483.9
Non-controlling interests in consolidated subsidiary	5.4		4.9
Total stockholders’ equity	8,638.3		8,488.8
Total liabilities and stockholders’ equity	$	23,252.6	$	23,434.0

The accompanying notes are an integral part of these statements.

3

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

	Three Months Ended March 31,
	2021		2020
Revenue	$	2,596.4	$	2,553.9
Expenses:
Cost of operations	1,534.3		1,550.0
Depreciation, amortization and depletion	282.1		268.6
Accretion	20.5		20.9
Selling, general and administrative	265.4		277.1
Withdrawal costs - multiemployer pension funds	—		4.3
Gain on business divestitures and impairments, net	(1.1)		(3.9)
Restructuring charges	2.8		3.8
Operating income	492.4		433.1
Interest expense	(78.4)		(96.7)
Loss from unconsolidated equity method investments	(16.5)		(13.2)
Interest income	0.8		0.3
Other income (loss), net	1.8		(0.9)
Income before income taxes	400.1		322.6
Provision for income taxes	103.7		75.8
Net income	296.4		246.8
Net income attributable to non-controlling interests in consolidated subsidiary	(0.5)		(0.5)
Net income attributable to Republic Services, Inc.	$	295.9	$	246.3
Basic earnings per share attributable to Republic Services, Inc. stockholders:
Basic earnings per share	$	0.93	$	0.77
Weighted average common shares outstanding	319.4		319.6
Diluted earnings per share attributable to Republic Services, Inc. stockholders:
Diluted earnings per share	$	0.93	$	0.77
Weighted average common and common equivalent shares outstanding	319.8		320.2
Cash dividends per common share	$	0.425	$	0.405

The accompanying notes are an integral part of these statements.

4

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

	Three Months Ended March 31,
	2021		2020
Net income	$	296.4	$	246.8
Other comprehensive income (loss), net of tax
Hedging activity:
Realized loss reclassified into earnings	1.1		0.8
Unrealized loss	—		(22.2)
Pension activity:
Change in funded status of pension plan obligations	—		1.6
Other comprehensive income (loss), net of tax	1.1		(19.8)
Comprehensive income	297.5		227.0
Comprehensive income attributable to non-controlling interests	(0.5)		(0.5)
Comprehensive income attributable to Republic Services, Inc.	$	297.0	$	226.5

The accompanying notes are an integral part of these statements.

5

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

	Republic Services, Inc. Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss, Net of Tax		Non-controlling Interests In Consolidated Subsidiary
	Shares	Amount						Shares	Amount						Total
Balance as of December 31, 2020	318.8	$	3.2	$	2,741.4	$	5,751.8	—	$	(0.1)	$	(12.4)	$	4.9	$	8,488.8
Net income	—	—		—		295.9		—	—		—		0.5		296.4
Other comprehensive loss	—	—		—		—		—	—		1.1		—		1.1
Cash dividends declared	—	—		—		(135.6)		—	—		—		—		(135.6)
Issuances of common stock	0.5	—		2.4		—		(0.2)	(14.7)		—		—		(12.3)
Stock-based compensation	—	—		13.5		(0.9)		—	—		—		—		12.6
Purchase of common stock for treasury	—	—		—		—		(0.1)	(12.7)		—		—		(12.7)
Balance as of March 31, 2021	319.3	$	3.2	$	2,757.3	$	5,911.2	(0.3)	$	(27.5)	$	(11.3)	$	5.4	$	8,638.3

	Republic Services, Inc. Stockholders’ Equity
	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income (Loss), Net of Tax		Non-controlling Interests In Consolidated Subsidiary
	Shares	Amount						Shares	Amount						Total
Balance as of December 31, 2019	353.3	$	3.5	$	4,994.8	$	5,317.3	(34.5)	$	(2,199.6)	$	2.2	$	2.7	$	8,120.9
Net income	—	—		—		246.3		—	—		—		0.5		246.8
Other comprehensive loss	—	—		—		—		—	—		(19.8)		—		(19.8)
Cash dividends declared	—	—		—		(128.9)		—	—		—		—		(128.9)
Issuances of common stock	0.7	—		7.5		—		(0.2)	(17.0)		—		—		(9.5)
Stock-based compensation	—	—		10.8		(1.1)		—	—		—		—		9.7
Purchase of common stock for treasury	—	—		—		—		(1.2)	(98.8)		—		—		(98.8)
Distributions paid	—	—		—		—		—	—		—		(0.2)		(0.2)
Balance as of March 31, 2020	354.0	$	3.5	$	5,013.1	$	5,433.6	(35.9)	$	(2,315.4)	$	(17.6)	$	3.0	$	8,120.2

The accompanying notes are an integral part of these statements.

6

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Three Months Ended March 31,
	2021		2020
Cash provided by operating activities:
Net income	$	296.4	$	246.8
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization, depletion and accretion	302.6		289.5
Non-cash interest expense	16.0		15.0
Stock-based compensation	12.6		9.9
Deferred tax provision	15.3		17.6
Provision for doubtful accounts, net of adjustments	4.3		4.9
Gain on disposition of assets and asset impairments, net	(0.6)		(4.9)
Environmental adjustments	(1.5)		(0.4)
Loss from unconsolidated equity method investments	16.5		13.2
Other non-cash items	(0.5)		5.5
Change in assets and liabilities, net of effects from business acquisitions and divestitures:
Accounts receivable	(8.9)		28.0
Prepaid expenses and other assets	62.5		88.2
Accounts payable	27.6		(37.2)
Capping, closure and post-closure expenditures	(11.0)		(8.7)
Remediation expenditures	(8.9)		(17.2)
Other liabilities	(61.4)		(54.4)
Cash provided by operating activities	661.0		595.8
Cash used in investing activities:
Purchases of property and equipment	(331.0)		(373.1)
Proceeds from sales of property and equipment	2.1		6.0
Cash used in acquisitions and investments, net of cash and restricted cash acquired	(18.0)		(61.0)
Cash received from business divestitures	0.8		(0.2)
Purchases of restricted marketable securities	(7.4)		(14.0)
Sales of restricted marketable securities	8.9		5.6
Other	—		(25.0)
Cash used in investing activities	(344.6)		(461.7)
Cash (used in) provided by financing activities:
Proceeds from notes payable and long-term debt, net of fees	1,242.4		1,974.9
Proceeds from issuance of senior notes, net of discount and fees	—		985.6
Payments of notes payable and long-term debt and senior notes	(1,422.5)		(2,688.7)
Issuances of common stock, net	(12.3)		(9.5)
Purchases of common stock for treasury	(12.7)		(98.8)
Cash dividends paid	(135.5)		(129.2)
Distributions paid to non-controlling interests in consolidated subsidiary	—		(0.2)
Contingent consideration payments	(1.7)		(2.2)
Cash (used in) provided by financing activities	(342.3)		31.9
(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents	(25.9)		166.0
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	114.2		177.4
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	88.3	$	343.4

The accompanying notes are an integral part of these statements.

7

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Republic Services, Inc., a Delaware corporation, and its consolidated subsidiaries (also referred to collectively as Republic, the Company, we, us, or our), is one of the largest providers of environmental services in the United States, as measured by revenue. We manage and evaluate our operations through three operating segments, Group 1, Group 2, and environmental solutions.

The unaudited consolidated financial statements include the accounts of Republic Services, Inc. and its wholly owned and majority owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). We account for investments in entities in which we do not have a controlling financial interest under the equity method of accounting or, for investments that do not meet the criteria to be accounted for under the equity method, we reflect these investments at their fair value when it is readily determinable. If fair value is not readily determinable, we use an alternative measurement approach. All material intercompany accounts and transactions have been eliminated in consolidation.

We have prepared these unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information related to our organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, these financial statements include all adjustments that, unless otherwise disclosed, are of a normal recurring nature and necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of the results you can expect for a full year. You should read these financial statements in conjunction with our audited consolidated financial statements and notes thereto appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation. All dollar amounts in tabular presentations are in millions, except per share amounts and unless otherwise noted.

Management’s Estimates and Assumptions

In preparing our financial statements, we make numerous estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. We must make these estimates and assumptions because certain information we use is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. In preparing our financial statements, the more critical and subjective areas that deal with the greatest amount of uncertainty relate to our accounting for our long-lived assets, including recoverability, landfill development costs, and final capping, closure and post-closure costs; our valuation allowances for accounts receivable and deferred tax assets; our liabilities for potential litigation, claims and assessments; our liabilities for environmental remediation, multiemployer pension funds, employee benefit plans, deferred taxes, uncertain tax positions, and insurance reserves; and our estimates of the fair values of assets acquired and liabilities assumed in any acquisition. Each of these items is discussed in more detail in our description of our significant accounting policies in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Our actual results may differ significantly from our estimates.

In March 2020, the World Health Organization declared the outbreak of a new strain of coronavirus (COVID-19) a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. The full extent of the impact of the COVID-19 pandemic on our operations and financial performance will depend on future developments, including the duration and spread of the pandemic, all of which are uncertain and cannot be predicted at this time.

In mid-March 2020, certain customers in our small- and large-container businesses began adjusting their service levels, which included a decrease in the frequency of pickups or a temporary pause in service. In addition, we experienced a decline in volumes disposed at certain of our landfills and transfer stations. As service levels decreased, we also experienced a decrease in certain costs of our operations which are variable in nature. This decline in service activity peaked in the first half of April 2020 and improved sequentially through March 31, 2021.

In April 2020, we launched our Committed to Serve initiative and committed $20 million to support frontline employees and their families, as well as small business customers in the local communities we serve. In addition to this initiative, we have experienced an increase in certain costs of doing business as a direct result of the COVID-19 pandemic, including costs for additional safety equipment and hygiene products and increased facility and equipment cleaning. These costs are intended to assist in protecting the safety of our frontline employees as we continue to provide an essential service to our customers. In

8

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 2020, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic with a $500 award that was paid in January 2021. In addition, we incurred incremental costs associated with expanding certain aspects of our existing healthcare programs. We expect to incur similar costs throughout 2021, and potentially into future years, although we expect the amount of such costs annually to be less than those incurred in 2020.

New Accounting Pronouncements

Accounting Standards Adopted

Effective January 1, 2021, we adopted the following accounting standards updates (ASUs) as issued by the Financial Accounting Standards Board (FASB):

ASU		Effective Date
ASU 2018-14	Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans	January 1, 2021
ASU 2019-12	Simplifying the Accounting for Income Taxes	January 1, 2021

Changes to the Disclosure Requirements for Defined Benefit Plans

Effective January 1, 2021, we adopted ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14) on a retrospective basis. The standard removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. Our adoption of ASU 2018-14 did not have a material impact on our consolidated financial statements.

Simplifying the Accounting for Income Taxes

Effective January 1, 2021, we adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 attempts to simplify aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Our adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Accounting Standards Updates Issued but not yet Adopted

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference

Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities upon adoption during the period from March 12, 2020 through December 31, 2022. We are currently assessing the effect this guidance may have on our consolidated financial statements.

9

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2. BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

Acquisitions

We acquired various environmental services businesses during the three months ended March 31, 2021 and 2020. The purchase price paid for these business acquisitions and the allocations of the purchase price follows:

	2021		2020
Purchase price:
Cash used in acquisitions, net of cash acquired	$	15.8	$	52.2
Holdbacks	2.0		2.5
Fair value, future minimum finance lease payments	—		0.3
Total	$	17.8	$	55.0
Allocated as follows:
Accounts receivable	$	0.5	$	2.3
Property and equipment	3.4		17.3
Operating right-of-use lease assets	—		0.2
Other assets	—		0.2
Accounts payable	—		(1.2)
Environmental remediation liabilities	—		(1.5)
Operating right-of-use lease liabilities	—		(0.2)
Other liabilities	(0.3)		(0.9)
Fair value of tangible assets acquired and liabilities assumed	3.6		16.2
Excess purchase price to be allocated	$	14.2	$	38.8
Excess purchase price allocated as follows:
Other intangible assets	$	1.9	$	1.8
Goodwill	12.3		37.0
Total allocated	$	14.2	$	38.8

The purchase price allocations are preliminary and based on information existing at the acquisition dates. Accordingly, the purchase price allocations are subject to change. Substantially all of the goodwill and intangible assets recorded for these acquisitions are deductible for tax purposes.

These acquisitions are not material to the Company's results of operations, individually or in the aggregate. As a result, no pro forma financial information is provided.

On May 5, 2021, we acquired all of the membership interests of Santek Waste Services, LLC (Santek). Santek's vertically integrated recycling and waste services operations are primarily located in the southeastern United States and complement Republic's existing core competencies and expertise in the environmental services industry. A preliminary allocation of purchase price will be included in our consolidated balance sheet as of June 30, 2021, and we expect our valuations to be substantially completed by the end of 2021.

Investments

In 2021 and 2020, we acquired non-controlling equity interests in certain limited liability companies that qualified for investment tax credits under Section 48 of the Internal Revenue Code. In exchange for our non-controlling interests, we made capital contributions of $2.2 million and $9.4 million, which were recorded to other assets in our March 31, 2021 and 2020 consolidated balance sheets, respectively. During the three months ended March 31, 2021 and 2020, we reduced the carrying value of these investments by $13.7 million and $13.2 million, respectively, as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements. Additionally, during the three months ended March 31, 2020, we reduced the carrying value of these investments, and our effective tax rate reflected a benefit due to tax credits related to certain investments. For further discussion regarding our income taxes, see Note 8, Income Taxes.

Restructuring Charges

In 2020, we incurred costs related to the redesign of certain back-office software systems, which continued into 2021. In addition, in July 2020, we eliminated certain back-office support positions in response to a decline in the underlying demand for

10

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

services resulting from the COVID-19 pandemic. During the three months ended March 31, 2021 and 2020, we incurred restructuring charges of $2.8 million and $3.8 million, respectively. During the same periods, we paid $4.0 million and $3.8 million, respectively, related to these restructuring efforts.

During the remainder of 2021, we expect to incur additional restructuring charges of approximately $10 million to $15 million primarily related to the redesign of certain of our back-office software systems. Substantially all of these restructuring charges will be recorded in Corporate entities and other.

3. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

A summary of the activity and balances in goodwill accounts by reporting segment follows:

	Balance as of December 31, 2020		Acquisitions		Divestitures		Adjustments to Acquisitions		Balance as of March 31, 2021
Group 1	$	6,404.9	$	6.4	$	—	$	(11.5)	$	6,399.8
Group 2	5,641.5		5.9		—		—		5,647.4
Corporate entities and other	—		—		—		—		—
Total	$	12,046.4	$	12.3	$	—	$	(11.5)	$	12,047.2

Adjustments to acquisitions during the three months ended March 31, 2021 primarily related to changes in our valuation of customer relationship intangible assets as a result of obtaining new information regarding the acquisitions that closed in December 2020.

Other Intangible Assets, Net

Other intangible assets, net, include values assigned to customer relationships, non-compete agreements and trade names, and are amortized over periods ranging from 1 to 16 years. A summary of the activity and balances by intangible asset type follows:

	Gross Intangible Assets								Accumulated Amortization
	Balance as of December 31, 2020		Acquisitions		Adjustments and Other		Balance as of March 31, 2021		Balance as of December 31, 2020		Additions Charged to Expense		Adjustments and Other		Balance as of March 31, 2021		Other Intangible Assets, Net as of March 31, 2021
Customer relationships	$	788.1	$	1.4	$	14.0	$	803.5	$	(639.5)	$	(5.9)	$	—	$	(645.4)	$	158.1
Non-compete agreements	51.4		0.5		(0.2)		51.7		(39.1)		(1.3)		—		(40.4)		11.3
Other intangible assets	57.5		—		—		57.5		(45.3)		(0.1)		—		(45.4)		12.1
Total	$	897.0	$	1.9	$	13.8	$	912.7	$	(723.9)	$	(7.3)	$	—	$	(731.2)	$	181.5

4. OTHER ASSETS

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of March 31, 2021 and December 31, 2020 follows:

	2021		2020
Income taxes receivable	$	82.1	$	170.7
Prepaid expenses	81.3		77.7
Inventories	61.1		59.1
Other non-trade receivables	46.9		32.2
Reinsurance receivable	34.8		34.1
Prepaid fees for cloud-based hosting arrangements, current	12.3		11.8
Other current assets	6.0		6.7
Total	$	324.5	$	392.3

11

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Other Assets

A summary of other assets as of March 31, 2021 and December 31, 2020 follows:

	2021		2020
Operating right-of-use lease assets	$	220.8	$	218.8
Deferred compensation plan	135.7		131.8
Investments	130.8		145.4
Reinsurance receivable	85.0		84.8
Deferred contract costs and sales commissions	80.8		82.3
Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements	30.5		29.5
Other derivative assets	24.7		63.8
Amounts recoverable for capping, closure and post-closure obligations	18.9		18.5
Interest rate swaps	8.6		10.0
Deferred financing costs	2.0		2.7
Other	29.2		29.8
Total	$	767.0	$	817.4

5. OTHER LIABILITIES

Other Accrued Liabilities

A summary of other accrued liabilities as of March 31, 2021 and December 31, 2020 follows:

	2021		2020
Insurance reserves, current	$	174.6	$	167.5
Accrued payroll and benefits	157.6		221.1
Accrued fees and taxes	137.0		132.3
Accrued dividends	135.6		135.5
Operating right-of-use lease liabilities, current	35.8		33.5
Ceded insurance reserves, current	34.8		34.1
Accrued professional fees and legal settlement reserves	24.3		7.2
Other	72.7		89.0
Total	$	772.4	$	820.2

Other Long-Term Liabilities

A summary of other long-term liabilities as of March 31, 2021 and December 31, 2020 follows:

	2021		2020
Operating right-of-use lease liabilities	$	207.2	$	206.6
Deferred compensation plan liability	128.2		126.6
Ceded insurance reserves	85.0		84.8
Contingent purchase price and acquisition holdbacks	66.0		67.3
Other derivative liabilities	60.7		103.0
Withdrawal liability - multiemployer pension funds	22.3		22.3
Pension and other post-retirement liabilities	5.5		5.5
Legal settlement reserves	4.1		20.2
Other	39.6		45.5
Total	$	618.6	$	681.8

12

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

6. LANDFILL AND ENVIRONMENTAL COSTS

As of March 31, 2021, we owned or operated 186 active solid waste landfills with total available disposal capacity estimated to be 5.0 billion in-place cubic yards. Additionally, we had post-closure responsibility for 128 closed landfills.

Accrued Landfill and Environmental Costs

A summary of accrued landfill and environmental liabilities as of March 31, 2021 and December 31, 2020 follows:

	2021		2020
Landfill final capping, closure and post-closure liabilities	$	1,370.3	$	1,346.4
Environmental remediation	460.2		462.8
Total accrued landfill and environmental costs	1,830.5		1,809.2
Less: current portion	(116.9)		(114.5)
Long-term portion	$	1,713.6	$	1,694.7

Final Capping, Closure and Post-Closure Costs

The following table summarizes the activity in our asset retirement obligation liabilities, which includes liabilities for final capping, closure and post-closure, for the three months ended March 31, 2021 and 2020:

	2021		2020
Asset retirement obligation liabilities, beginning of year	$	1,346.4	$	1,335.6
Non-cash additions	10.8		11.5
Acquisitions, net of divestitures and other adjustments	0.2		0.1
Asset retirement obligation adjustments	3.4		(0.5)
Payments	(11.0)		(8.7)
Accretion expense	20.5		20.9
Asset retirement obligation liabilities, end of period	1,370.3		1,358.9
Less: current portion	(60.1)		(74.4)
Long-term portion	$	1,310.2	$	1,284.5

We review annually, in the fourth quarter, and update as necessary, our estimates of asset retirement obligation liabilities. However, if there are significant changes in the facts and circumstances related to a site during the year, we will update our assumptions prospectively in the period that we know all the relevant facts and circumstances and make adjustments as appropriate.

Landfill Operating Expenses

In the normal course of business, we incur various operating costs associated with environmental compliance. These costs include, among other things, leachate treatment and disposal, methane gas and groundwater monitoring, systems maintenance, interim cap maintenance, costs associated with the application of daily cover materials, and the legal and administrative costs of ongoing environmental compliance. These costs are expensed as cost of operations in the periods in which they are incurred.

Environmental Remediation Liabilities

We accrue for remediation costs when they become probable and can be reasonably estimated. There can sometimes be a range of reasonable estimates of the costs associated with remediation of a site. In these cases, we use the amount within the range that constitutes our best estimate. If no amount within the range appears to be a better estimate than any other, we use the amount that is at the low end of the range. It is reasonably possible that we will need to adjust the liabilities recorded for remediation to reflect the effects of new or additional information, to the extent such information impacts the costs, timing or duration of the required actions. If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of March 31, 2021 would be approximately $356 million higher than the amount recorded. Future changes in our estimates of the cost, timing or duration of the required actions could have a material adverse effect on our consolidated financial position, results of operations and cash flows.

13

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes the activity in our environmental remediation liabilities for the three months ended March 31, 2021 and 2020:

	2021		2020
Environmental remediation liabilities, beginning of year	$	462.8	$	500.2
Net adjustments charged to expense	2.0		(0.4)
Payments	(8.9)		(17.2)
Accretion expense (non-cash interest expense)	4.3		4.6
Acquisitions, net of divestitures and other adjustments	—		1.5
Environmental remediation liabilities, end of period	460.2		488.7
Less: current portion	(56.8)		(56.7)
Long-term portion	$	403.4	$	432.0

Bridgeton Landfill. During the three months ended March 31, 2021, we paid $3.2 million related to management and monitoring of the remediation area for our closed Bridgeton Landfill in Missouri. We continue to work with state and federal regulatory agencies on our remediation efforts. From time to time, this may require us to modify our future operating timeline and procedures, which could result in changes to our expected liability. As of March 31, 2021, the remediation liability recorded for this site was $115.7 million, of which approximately $14 million is expected to be paid during the remainder of 2021. We believe the remaining reasonably possible high end of our range would be approximately $140 million higher than the amount recorded as of March 31, 2021.

West Lake Landfill Superfund Site. Our subsidiary Bridgeton Landfill, LLC is one of several currently designated Potentially Responsible Parties for the West Lake Landfill Superfund site (West Lake) in Missouri. On September 27, 2018, the U.S. Environmental Protection Agency (EPA) issued a Record of Decision Amendment for West Lake that includes a total undiscounted cost estimate of $229 million over a four- to five-year design and construction timeline. On March 11, 2019, the EPA issued special notice letters under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) to Bridgeton Landfill, LLC and the other currently designated Potentially Responsible Parties to initiate negotiations to implement the remedy. At this time we are neither able to predict the final design of that remedy, nor estimate how much of the future response costs of the site our subsidiary may agree or be required to pay. During any subsequent administrative proceedings or litigation, our subsidiary will vigorously contest liability for the costs of remediating radiologically-impacted materials generated on behalf of the federal government during the Manhattan Project and delivered to the site by an Atomic Energy Commission licensee and its subcontractor. Currently, we believe we are adequately reserved for our expected remediation liability. However, subsequent events related to remedy design, divisibility, or allocation may require us to modify our expected remediation liability.

14

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

7. DEBT

The carrying value of our credit facilities, finance leases and long-term debt as of March 31, 2021 and December 31, 2020 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting. Original issue discounts, deferred issuance costs, and adjustments to fair value recorded in purchase accounting are amortized to interest expense over the term of the applicable instrument using the effective interest method.

		March 31, 2021						December 31, 2020
Maturity	Interest Rate	Principal		Adjustments		Carrying Value		Principal		Adjustments		Carrying Value
Credit facilities:
Uncommitted Credit Facility	Variable	$	12.6	$	—	$	12.6	$	—	$	—	$	—
$1.0 billion - August 2021	Variable	—		—		—		—		—		—
$2.25 billion - June 2023	Variable	—		—		—		186.0		—		186.0
Senior notes:
May 2023	4.750	300.0		3.3		303.3		300.0		4.8		304.8
August 2024	2.500	900.0		(6.2)		893.8		900.0		(6.6)		893.4
March 2025	3.200	500.0		(2.8)		497.2		500.0		(3.0)		497.0
November 2025	0.875	350.0		(3.1)		346.9		350.0		(3.3)		346.7
July 2026	2.900	500.0		(3.2)		496.8		500.0		(3.3)		496.7
November 2027	3.375	650.0		(4.3)		645.7		650.0		(4.5)		645.5
May 2028	3.950	800.0		(13.7)		786.3		800.0		(14.2)		785.8
March 2030	2.300	600.0		(6.4)		593.6