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, 2023         

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 20, 2023, the registrant had outstanding 316,282,323 shares of Common Stock, par value $0.01 per share (excluding treasury shares of 4,353,793).

REPUBLIC SERVICES, INC.

INDEX

 

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	3
	Unaudited Consolidated Statement of Income for the Three Months Ended March 31, 2023 and 2022	4
	Unaudited Consolidated Statement of Comprehensive Income for the Three Months Ended March 31, 2023 and 2022	5
	Unaudited Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2023 and 2022	6
	Unaudited Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2023 and 2022	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	46
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
	Signatures	50

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,
	2023		2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	132.2	$	143.4
Accounts receivable, less allowance for doubtful accounts and other of $58.8 and $51.9, respectively	1,686.4		1,677.2
Prepaid expenses and other current assets	422.8		536.5
Total current assets	2,241.4		2,357.1
Restricted cash and marketable securities	132.7		127.6
Property and equipment, net	10,658.6		10,744.0
Goodwill	14,622.2		14,451.5
Other intangible assets, net	355.5		347.2
Other assets	1,071.0		1,025.5
Total assets	$	29,081.4	$	29,052.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	984.2	$	1,221.8
Notes payable and current maturities of long-term debt	457.1		456.0
Deferred revenue	467.1		443.0
Accrued landfill and environmental costs, current portion	135.2		132.6
Accrued interest	63.2		79.0
Other accrued liabilities	922.5		1,058.3
Total current liabilities	3,029.3		3,390.7
Long-term debt, net of current maturities	11,467.8		11,329.5
Accrued landfill and environmental costs, net of current portion	2,153.6		2,141.3
Deferred income taxes and other long-term tax liabilities, net	1,556.5		1,528.8
Insurance reserves, net of current portion	328.2		315.1
Other long-term liabilities	628.7		660.7
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; 320.6 and 320.3 issued including shares held in treasury, respectively	3.2		3.2
Additional paid-in capital	2,858.4		2,843.2
Retained earnings	7,582.7		7,356.3
Treasury stock, at cost; 4.3 and 4.2 shares, respectively	(518.5)		(504.6)
Accumulated other comprehensive loss, net of tax	(9.3)		(12.1)
Total Republic Services, Inc. stockholders’ equity	9,916.5		9,686.0
Non-controlling interests in consolidated subsidiary	0.8		0.8
Total stockholders’ equity	9,917.3		9,686.8
Total liabilities and stockholders’ equity	$	29,081.4	$	29,052.9

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,
	2023		2022
Revenue	$	3,581.1	$	2,970.1
Expenses:
Cost of operations	2,169.5		1,763.6
Depreciation, amortization and depletion	358.7		310.4
Accretion	24.1		21.7
Selling, general and administrative	379.2		307.8
Restructuring charges	5.5		6.0
Operating income	644.1		560.6
Interest expense	(126.7)		(83.5)
Loss on extinguishment of debt	(0.2)		—
Gain (loss) from unconsolidated equity method investments	1.0		(3.8)
Interest income	1.4		0.5
Other income (expense), net	2.5		(1.6)
Income before income taxes	522.1		472.2
Provision for income taxes	138.2		120.3
Net income	383.9		351.9
Net loss attributable to non-controlling interests in consolidated subsidiary	—		0.1
Net income attributable to Republic Services, Inc.	$	383.9	$	352.0
Basic earnings per share attributable to Republic Services, Inc. stockholders:
Basic earnings per share	$	1.21	$	1.11
Weighted average common shares outstanding	316.7		316.6
Diluted earnings per share attributable to Republic Services, Inc. stockholders:
Diluted earnings per share	$	1.21	$	1.11
Weighted average common and common equivalent shares outstanding	317.1		317.2
Cash dividends per common share	$	0.495	$	0.460

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,
	2023		2022
Net income	$	383.9	$	351.9
Other comprehensive income (loss), net of tax
Hedging activity:
Realized (income) loss reclassified into earnings	(2.6)		1.1
Unrealized gain	5.2		—
Pension activity:
Change in funded status of pension plan obligations	0.2		—
Other comprehensive income, net of tax	2.8		1.1
Comprehensive income	386.7		353.0
Comprehensive loss attributable to non-controlling interests	—		0.1
Comprehensive income attributable to Republic Services, Inc.	$	386.7	$	353.1

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, 2022	320.3	$	3.2	$	2,843.2	$	7,356.3	(4.2)	$	(504.6)	$	(12.1)	$	0.8	$	9,686.8
Net income	—	—		—		383.9		—	—		—		—		383.9
Other comprehensive income	—	—		—		—		—	—		2.8		—		2.8
Cash dividends declared	—	—		—		(156.5)		—	—		—		—		(156.5)
Issuances of common stock	0.3	—		2.9		—		(0.1)	(13.9)		—		—		(11.0)
Stock-based compensation	—	—		12.3		(1.0)		—	—		—		—		11.3
Balance as of March 31, 2023	320.6	$	3.2	$	2,858.4	$	7,582.7	(4.3)	$	(518.5)	$	(9.3)	$	0.8	$	9,917.3

	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, 2021	319.6	$	3.2	$	2,789.5	$	6,475.6	(2.4)	$	(274.8)	$	(14.6)	$	0.8	$	8,979.7
Net income	—	—		—		352.0		—	—		—		(0.1)		351.9
Other comprehensive income	—	—		—		—		—	—		1.1		—		1.1
Cash dividends declared	—	—		—		(145.3)		—	—		—		—		(145.3)
Issuances of common stock	0.3	—		2.6		—		(0.1)	(14.1)		—		—		(11.5)
Stock-based compensation	—	—		13.2		(0.9)		—	—		—		—		12.3
Purchase of common stock for treasury	—	—		—		—		(1.6)	(203.5)		—		—		(203.5)
Balance as of March 31, 2022	319.9	$	3.2	$	2,805.3	$	6,681.4	(4.1)	$	(492.4)	$	(13.5)	$	0.7	$	8,984.7

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,
	2023		2022
Cash provided by operating activities:
Net income	$	383.9	$	351.9
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization, depletion and accretion	382.8		332.1
Non-cash interest expense	24.7		18.8
Stock-based compensation	11.6		12.4
Deferred tax provision	14.5		24.9
Provision for doubtful accounts, net of adjustments	7.8		6.6
Loss on extinguishment of debt	0.2		—
Gain on disposition of assets and asset impairments, net	(3.8)		(1.7)
(Gain) loss from unconsolidated equity method investments	(1.0)		3.8
Other non-cash items	(1.6)		3.4
Change in assets and liabilities, net of effects from business acquisitions and divestitures:
Accounts receivable	(3.3)		(38.4)
Prepaid expenses and other assets	87.2		54.8
Accounts payable	(71.1)		73.0
Capping, closure and post-closure expenditures	(8.8)		(7.1)
Remediation expenditures	(11.6)		(10.0)
Other liabilities	(126.2)		(118.9)
Proceeds for retirement of certain hedging relationships	2.4		—
Cash provided by operating activities	687.7		705.6
Cash (used in) provided by investing activities:
Purchases of property and equipment	(378.6)		(334.1)
Proceeds from sales of property and equipment	6.0		16.8
Cash used in acquisitions and investments, net of cash and restricted cash acquired	(290.9)		(81.6)
Cash paid for business divestitures	(0.7)		—
Purchases of restricted marketable securities	(4.5)		(2.5)
Sales of restricted marketable securities	4.4		2.1
Other	11.0		(0.1)
Cash used in investing activities	(653.3)		(399.4)
Cash provided by (used in) financing activities:
Proceeds from credit facilities and notes payable, net of fees	6,675.5		638.9
Proceeds from issuance of senior notes, net of discount and fees	1,183.6		—
Payments of credit facilities and notes payable	(7,729.5)		(590.9)
Issuances of common stock, net	(11.0)		(11.5)
Purchases of common stock for treasury	—		(203.5)
Cash dividends paid	(156.4)		(145.9)
Contingent consideration payments	(4.2)		(1.8)
Cash used in financing activities	(42.0)		(314.7)
Effect of foreign exchange rate changes on cash	—		—
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents	(7.6)		(8.5)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period	214.3		105.6
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	206.7	$	97.1

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. Our senior management evaluates, oversees and manages the financial performance of our operations through three field groups, referred to as Group 1, Group 2 and Group 3. Group 1 is our recycling and solid waste business operating primarily in geographic areas located in the western United States. Group 2 is our recycling and solid waste business operating primarily in geographic areas located in the southeastern and mid-western United States, the eastern seaboard of the United States, and Canada. Group 3 is our environmental solutions business operating primarily in geographic areas located across the United States and Canada. These groups represent our reportable segments, which each provide integrated environmental solutions, including but not limited to collection, transfer, recycling, and disposal. Prior to the third quarter of 2022, our environmental services operating segment, now referred to as our Group 3 reportable segment, was aggregated with Corporate entities and other.

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, 2022.

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, 2022. Our actual results may differ significantly from our estimates.

New Accounting Pronouncements

Disclosure of Supplier Finance Program Obligations

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The ASU requires buyers to disclose information about their supplier finance programs. Interim and annual requirements include the disclosure of outstanding amounts under the obligations as of the end of the reporting period, and annual requirements include a rollforward of those obligations for the annual reporting period, as well as a description of payment and other key terms of the programs. This update is effective for annual periods beginning after December 15, 2022, and interim periods within those

8

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

fiscal years, except for the requirement to disclose rollforward information, which is effective for fiscal years beginning after December 15, 2023. The adoption of ASU 2022-04 on January 1, 2023 did not have a material impact on our consolidated financial statements.

As of March 31, 2023, certain of our vendors chose to opt into our vendor supply finance agreement. This agreement allows a vendor to choose, on an invoice by invoice basis, to receive an earlier payment verses a payment based on its original contracted terms (which, depending on the vendor, could extend up to 90 days or longer). As of March 31, 2023 and December 31, 2022, the amounts outstanding under these programs were not material.

2. BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

Acquisitions

We acquired various environmental services businesses during the three months ended March 31, 2023 and 2022. The aggregate purchase price paid for these business acquisitions and the allocations of the aggregate purchase price follows:

	2023		2022
Purchase price:
Cash used in acquisitions, net of cash acquired of $9.5 and —, respectively	$	221.9	$	42.9
Holdbacks	2.2		4.7
Total	$	224.1	$	47.6
Allocated as follows:
Accounts receivable	$	14.2	$	3.6
Prepaid expenses	0.8		—
Property and equipment	31.6		11.2
Inventory	0.9		—
Accounts payable	(5.3)		—
Deferred income tax liabilities	(9.2)		—
Other liabilities	(3.7)		(1.3)
Fair value of tangible assets acquired and liabilities assumed	29.3		13.5
Excess purchase price to be allocated	$	194.8	$	34.1
Excess purchase price allocated as follows:
Other intangible assets	$	23.4	$	8.5
Goodwill	171.4		25.6
Total allocated	$	194.8	$	34.1

The purchase price allocations are preliminary and based on information existing at the acquisition dates. Accordingly, the purchase price allocations are subject to change. We do not expect that the goodwill and intangible assets recognized as a result of these acquisitions will be 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 2, 2022, we acquired all outstanding equity of US Ecology, Inc. (US Ecology) in a transaction valued at $2.2 billion. US Ecology is a leading provider of environmental solutions offering treatment, recycling and disposal of hazardous, non-hazardous and specialty waste. We financed the transaction using the proceeds of a new $1.0 billion unsecured Term Loan Credit Agreement (the Term Loan Facility) and borrowings under our existing $3.0 billion unsecured revolving credit facility. The preliminary purchase price allocation for the US Ecology acquisition remains subject to revisions as additional information is obtained about the facts and circumstances that existed at the valuation date. The preliminary allocation of purchase price, including the value of certain tangible and intangible assets acquired, such as property, plant and equipment, landfill development costs and customer relationship intangible assets, as well as certain leases and environmental liabilities assumed, is based on the best estimates of management and is subject to revision based on the final valuations. We do not expect a step-up in the tax basis of the assets recognized in connection with the US Ecology acquisition, and do not expect the goodwill and intangible assets will be deductible for tax purposes.

In the three months ended March 31, 2023 and 2022, we incurred $7.6 million and $4.8 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology. The 2023 costs primarily related to the integration of certain software systems as well as rebranding the business, and the 2022 costs included certain costs to close the acquisition.

9

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Investments

In 2023 and 2022, 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 $1.5 million and $11.0 million, which were recorded to other assets in our March 31, 2023 and 2022 consolidated balance sheets, respectively. During the three months ended March 31, 2023, we increased the carrying value of these investments by $1.3 million as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements. During the three months ended March 31, 2022, we reduced the carrying value of these investments by $0.4 million as a result of cash distributions and our share of income and loss pursuant to the terms of the limited liability company agreements. Additionally, our tax provisions reflect no benefits for the three months ended March 31, 2023, and benefits of $1.2 million for the three months ended March 31, 2022, due to the tax credits related to these investments. For further discussion of the income tax benefits, refer to Note 11, Income Taxes, in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Restructuring Charges

During the three months ended March 31, 2023 and 2022, we incurred restructuring charges of $5.5 million and $6.0 million, respectively. The 2023 charges primarily related to the redesign of our customer billing and asset management software systems, and the 2022 charges primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems which was completed with systems being placed into production in the fourth quarter of 2022. We paid $5.0 million and $5.9 million during 2023 and 2022, respectively, related to these restructuring efforts.

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, 2022		Acquisitions		Divestitures		Adjustments to Acquisitions		Balance as of March 31, 2023
Group 1	$	6,637.9	$	5.9	$	—	$	—	$	6,643.8
Group 2	6,238.3		154.6		—		(0.4)		6,392.5
Group 3	1,575.3		10.9		—		(0.3)		1,585.9
Total	$	14,451.5	$	171.4	$	—	$	(0.7)	$	14,622.2

Goodwill by reportable segment as of December 31, 2022 and March 31, 2023 reflects the presentation of Group 3 as a reportable segment. Prior to the third quarter of 2022, Group 3 was aggregated with Corporate entities and other.

Adjustments to acquisitions during the three months ended March 31, 2023 primarily related to changes in our valuation of tangible assets and liabilities assumed as a result of obtaining new information regarding the acquisitions that closed in 2022.

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 15 years. A summary of the activity and balances by intangible asset type follows:

	Gross Intangible Assets								Accumulated Amortization
	Balance as of December 31, 2022		Acquisitions		Adjustments and Other		Balance as of March 31, 2023		Balance as of December 31, 2022		Additions Charged to Expense		Adjustments and Other		Balance as of March 31, 2023		Other Intangible Assets, Net as of March 31, 2023
Customer relationships	$	1,013.5	$	20.7	$	—	$	1,034.2	$	(709.1)	$	(11.9)	$	—	$	(721.0)	$	313.2
Non-compete agreements	67.9		1.8		—		69.7		(50.9)		(1.6)		—		(52.5)		17.2
Other intangible assets	77.0		0.9		—		77.9		(51.2)		(1.6)		—		(52.8)		25.1
Total	$	1,158.4	$	23.4	$	—	$	1,181.8	$	(811.2)	$	(15.1)	$	—	$	(826.3)	$	355.5

10

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

4. OTHER ASSETS

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022 follows:

	2023		2022
Prepaid expenses	$	110.8	$	114.3
Income taxes receivable	107.7		214.0
Inventories	97.9		96.6
Other non-trade receivables	49.5		59.8
Reinsurance receivable	31.8		31.9
Prepaid fees for cloud-based hosting arrangements, current	18.9		14.4
Other current assets	6.2		5.5
Total	$	422.8	$	536.5

Other Assets

A summary of other assets as of March 31, 2023 and December 31, 2022 follows:

	2023		2022
Investments	$	351.1	$	281.4
Operating right-of-use lease assets	263.4		275.1
Deferred compensation plan	103.5		100.6
Derivative and hedging assets	89.9		105.8
Reinsurance receivable	81.4		84.1
Deferred contract costs and sales commissions	80.6		80.2
Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements	52.9		51.4
Amounts recoverable for capping, closure and post-closure obligations	21.0		20.5
Deferred financing costs	4.8		5.1
Other	22.4		21.3
Total	$	1,071.0	$	1,025.5

5. OTHER LIABILITIES

Other Accrued Liabilities

A summary of other accrued liabilities as of March 31, 2023 and December 31, 2022 follows:

	2023		2022
Accrued payroll and benefits	$	212.2	$	342.6
Insurance reserves, current	196.1		187.5
Accrued dividends	156.5		156.4
Accrued fees and taxes	155.7		168.5
Operating right-of-use lease liabilities, current	60.2		57.9
Ceded insurance reserves, current	33.7		32.0
Accrued professional fees and legal settlement reserves	8.9		8.6
Other	99.2		104.8
Total	$	922.5	$	1,058.3

11

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Other Long-Term Liabilities

A summary of other long-term liabilities as of March 31, 2023 and December 31, 2022 follows:

	2023		2022
Operating right-of-use lease liabilities	$	224.5	$	238.0
Deferred compensation plan liability	104.9		98.6
Derivative and hedging liabilities	86.9		99.7
Ceded insurance reserves	79.5		84.1
Contingent purchase price and acquisition holdbacks	60.4		60.5
Withdrawal liability - multiemployer pension funds	19.9		20.0
Legal settlement reserves	2.0		2.1
Other	50.6		57.7
Total	$	628.7	$	660.7

6. LANDFILL AND ENVIRONMENTAL COSTS

As of March 31, 2023, we owned or operated 206 active landfills with total available disposal capacity estimated to be 5.1 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, 2023 and December 31, 2022 follows:

	2023		2022
Landfill final capping, closure and post-closure liabilities	$	1,808.3	$	1,786.4
Environmental remediation	480.5		487.5
Total accrued landfill and environmental costs	2,288.8		2,273.9
Less: current portion	(135.2)		(132.6)
Long-term portion	$	2,153.6	$	2,141.3

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, 2023 and 2022:

	2023		2022
Asset retirement obligation liabilities, beginning of year	$	1,786.4	$	1,507.3
Non-cash additions	15.0		12.8
Acquisitions, net of divestitures and other adjustments	—		(5.2)
Asset retirement obligation adjustments	(8.4)		1.0
Payments	(8.8)		(7.0)
Accretion expense	24.1		21.7
Asset retirement obligation liabilities, end of period	1,808.3		1,530.6
Less: current portion	(73.9)		(66.7)
Long-term portion	$	1,734.4	$	1,463.9

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.

12

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 such 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, 2023 would be approximately $374 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.

The following table summarizes the activity in our environmental remediation liabilities for the three months ended March 31, 2023 and 2022:

	2023		2022
Environmental remediation liabilities, beginning of year	$	487.5	$	454.9
Payments	(11.6)		(10.0)
Accretion expense (non-cash interest expense)	4.6		4.1
Environmental remediation liabilities, end of period	480.5		449.0
Less: current portion	(61.3)		(55.8)
Long-term portion	$	419.2	$	393.2

Bridgeton Landfill. During the three months ended March 31, 2023, 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, 2023, the remediation liability recorded for this site was $84.0 million, of which approximately $12 million is expected to be paid during the remainder of 2023.

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 $229.0 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.

13

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, 2023 and December 31, 2022 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, 2023						December 31, 2022
Maturity	Interest Rate	Principal		Adjustments		Carrying Value		Principal		Adjustments		Carrying Value
Credit facilities:
Uncommitted Credit Facility	Variable	$	—	$	—	$	—	$	—	$	—	$	—
$3.0 billion - August 2026	Variable	133.0		—		133.0		250.0		—		250.0
Term Loan	Variable	700.0		—		700.0		1,000.0		—		1,000.0
Commercial Paper	Variable	370.0		(0.9)		369.1		1,000.0		(1.8)		998.2
Senior notes:
May 2023	4.750	300.0		(0.5)		299.5		300.0		(2.5)		297.5
August 2024	2.500	900.0		(2.6)		897.4		900.0		(3.0)		897.0
March 2025	3.200	500.0		(1.4)		498.6		500.0		(1.6)		498.4
November 2025	0.875	350.0		(1.7)		348.3		350.0		(1.9)		348.1
July 2026	2.900	500.0		(2.1)		497.9		500.0		(2.2)		497.8
November 2027	3.375	650.0		(2.9)		647.1		650.0		(3.1)		646.9
May 2028	3.950	800.0		(10.3)		789.7		800.0		(10.7)		789.3
April 2029	4.875	400.0		(5.1)		394.9		—		—		—