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 June 30, 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 July 24, 2023, the registrant had outstanding 316,325,973 shares of Common Stock, par value $0.01 per share (excluding treasury shares of 4,357,365).

REPUBLIC SERVICES, INC.

INDEX

 

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	3
	Unaudited Consolidated Statement of Income for the Three and Six Months Ended June 30, 2023 and 2022	4
	Unaudited Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	5
	Unaudited Consolidated Statement of Stockholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022	6
	Unaudited Consolidated Statement of Cash Flows for the Six Months Ended June 30, 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	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
	Signatures	53

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REPUBLIC SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

	June 30,		December 31,
	2023		2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	181.6	$	143.4
Accounts receivable, less allowance for doubtful accounts and other of $66.3 and $51.9, respectively	1,740.0		1,677.2
Prepaid expenses and other current assets	340.1		536.5
Total current assets	2,261.7		2,357.1
Restricted cash and marketable securities	149.6		127.6
Property and equipment, net	10,561.7		10,744.0
Goodwill	15,353.6		14,451.5
Other intangible assets, net	431.5		347.2
Other assets	1,065.2		1,025.5
Total assets	$	29,823.3	$	29,052.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,098.4	$	1,221.8
Notes payable and current maturities of long-term debt	152.8		456.0
Deferred revenue	467.4		443.0
Accrued landfill and environmental costs, current portion	140.0		132.6
Accrued interest	92.8		79.0
Other accrued liabilities	1,036.5		1,058.3
Total current liabilities	2,987.9		3,390.7
Long-term debt, net of current maturities	11,960.4		11,329.5
Accrued landfill and environmental costs, net of current portion	2,211.0		2,141.3
Deferred income taxes and other long-term tax liabilities, net	1,516.8		1,528.8
Insurance reserves, net of current portion	333.0		315.1
Other long-term liabilities	609.5		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; 320.7 and 320.3 issued including shares held in treasury, respectively	3.2		3.2
Additional paid-in capital	2,873.5		2,843.2
Retained earnings	7,852.7		7,356.3
Treasury stock, at cost; 4.3 and 4.2 shares, respectively	(519.0)		(504.6)
Accumulated other comprehensive loss, net of tax	(6.7)		(12.1)
Total Republic Services, Inc. stockholders’ equity	10,203.7		9,686.0
Non-controlling interests in consolidated subsidiary	1.0		0.8
Total stockholders’ equity	10,204.7		9,686.8
Total liabilities and stockholders’ equity	$	29,823.3	$	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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue	$	3,725.9	$	3,413.6	$	7,307.0	$	6,383.7
Expenses:
Cost of operations	2,224.4		2,065.7		4,393.8		3,829.4
Depreciation, amortization and depletion	358.3		337.6		717.0		647.9
Accretion	24.5		22.4		48.6		44.1
Selling, general and administrative	396.0		390.2		775.2		698.0
Withdrawal costs - multiemployer pension funds	—		2.2		—		2.2
Restructuring charges	15.5		5.9		21.0		11.9
Operating income	707.2		589.6		1,351.4		1,150.2
Interest expense	(124.4)		(94.0)		(251.1)		(177.5)
Loss on extinguishment of debt	—		—		(0.2)		—
Loss from unconsolidated equity method investments	(3.6)		(13.6)		(2.7)		(17.4)
Interest income	1.6		0.7		3.0		1.2
Other (expense) income, net	(0.6)		(4.6)		1.9		(6.2)
Income before income taxes	580.2		478.1		1,102.3		950.3
Provision for income taxes	152.6		106.3		290.9		226.6
Net income	427.6		371.8		811.4		723.7
Net (loss) income attributable to non-controlling interests in consolidated subsidiary	(0.2)		0.1		(0.2)		0.2
Net income attributable to Republic Services, Inc.	$	427.4	$	371.9	$	811.2	$	723.9
Basic earnings per share attributable to Republic Services, Inc. stockholders:
Basic earnings per share	$	1.35	$	1.18	$	2.56	$	2.29
Weighted average common shares outstanding	316.8		316.5		316.8		316.5
Diluted earnings per share attributable to Republic Services, Inc. stockholders:
Diluted earnings per share	$	1.35	$	1.17	$	2.56	$	2.28
Weighted average common and common equivalent shares outstanding	317.3		317.0		317.2		317.1
Cash dividends per common share	$	0.495	$	0.460	$	0.990	$	0.920

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	427.6	$	371.8	$	811.4	$	723.7
Other comprehensive income (loss), net of tax
Hedging activity:
Realized (income) loss reclassified into earnings	(2.2)		1.1		(4.8)		2.2
Unrealized gain	7.3		(1.1)		12.5		(1.1)
Pension activity:
Change in funded status of pension plan obligations	—		—		0.2		—
Foreign currency activity:
Unrealized (loss) gain on foreign currency translation	(2.5)		0.1		(2.5)		0.1
Other comprehensive income, net of tax	2.6		0.1		5.4		1.2
Comprehensive income	430.2		371.9		816.8		724.9
Comprehensive loss attributable to non-controlling interests	(0.2)		0.1		(0.2)		0.2
Comprehensive income attributable to Republic Services, Inc.	$	430.0	$	372.0	$	816.6	$	725.1

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
Net income	—	—		—		427.4		—	—		—		0.2		427.6
Other comprehensive income	—	—		—		—		—	—		2.6		—		2.6
Cash dividends declared	—	—		—		(156.6)		—	—		—		—		(156.6)
Issuances of common stock	0.1	—		4.5		—		—	(0.5)		—		—		4.0
Stock-based compensation	—	—		10.6		(0.8)		—	—		—		—		9.8
Balance as of June 30, 2023	320.7	$	3.2	$	2,873.5	$	7,852.7	(4.3)	$	(519.0)	$	(6.7)	$	1.0	$	10,204.7

	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 (loss)	—	—		—		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
Net income (loss)	—	—		—		371.9		—	—		—		(0.1)		371.8
Other comprehensive income	—	—		—		—		—	—		0.1		—		0.1
Cash dividends declared	—	—		—		(145.3)		—	—		—		—		(145.3)
Issuances of common stock	0.2	—		4.0		—		—	(8.0)		—		—		(4.0)
Stock-based compensation	—	—		9.6		(0.9)		—	—		—		—		8.7
Balance as of June 30, 2022	320.1	$	3.2	$	2,818.9	$	6,907.1	(4.1)	$	(500.4)	$	(13.4)	$	0.6	$	9,216.0

The accompanying notes are an integral part of these statements.

6

REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Six Months Ended June 30,
	2023		2022
Cash provided by operating activities:
Net income	$	811.4	$	723.7
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization, depletion and accretion	765.6		692.0
Non-cash interest expense	45.1		37.7
Stock-based compensation	21.4		21.2
Deferred tax provision	33.4		52.8
Provision for doubtful accounts, net of adjustments	19.7		17.2
Loss on extinguishment of debt	0.2		—
Gain on disposition of assets and asset impairments, net	(4.7)		(3.1)
Loss from unconsolidated equity method investments	2.7		17.4
Other non-cash items	(1.5)		6.3
Change in assets and liabilities, net of effects from business acquisitions and divestitures:
Accounts receivable	(52.0)		(150.4)
Prepaid expenses and other assets	138.5		72.6
Accounts payable	35.1		167.1
Capping, closure and post-closure expenditures	(24.5)		(18.0)
Remediation expenditures	(21.2)		(21.1)
Other liabilities	(5.4)		(52.2)
Proceeds for retirement of certain hedging relationships	2.4		—
Cash provided by operating activities	1,766.2		1,563.2
Cash (used in) provided by investing activities:
Purchases of property and equipment	(714.3)		(647.3)
Proceeds from sales of property and equipment	17.1		20.0
Cash used in acquisitions and investments, net of cash and restricted cash acquired	(987.7)		(2,655.0)
Cash paid for business divestitures	(0.3)		—
Purchases of restricted marketable securities	(9.7)		(9.1)
Sales of restricted marketable securities	9.1		8.5
Other	11.5		(1.0)
Cash used in investing activities	(1,674.3)		(3,283.9)
Cash provided by (used in) financing activities:
Proceeds from credit facilities and notes payable, net of fees	15,401.2		5,338.9
Proceeds from issuance of senior notes, net of discount and fees	1,183.6		—
Payments of credit facilities and notes payable	(16,286.9)		(3,026.9)
Issuances of common stock, net	(7.0)		(15.5)
Purchases of common stock for treasury	—		(203.5)
Cash dividends paid	(313.0)		(291.2)
Contingent consideration payments	(11.6)		(2.9)
Cash (used in) provided by financing activities	(33.7)		1,798.9
Effect of foreign exchange rate changes on cash	0.5		(0.1)
Increase in cash, cash equivalents, restricted cash and restricted cash equivalents	58.7		78.1
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	$	273.0	$	183.7

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 services, 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 acquisitions. 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 June 30, 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 instead of a payment based on its original contracted terms (which, depending on the vendor, could extend up to 90 days or longer). As of June 30, 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 six months ended June 30, 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 $15.0 and 64.6, respectively	$	918.7	$	2,516.6
Holdbacks	8.1		10.1
Fair value, future minimum finance lease payments	0.5		15.6
Total	$	927.3	$	2,542.3
Allocated as follows:
Accounts receivable	$	26.1	$	250.5
Prepaid expenses	1.0		15.5
Landfill development costs	0.5		495.7
Property and equipment	160.3		688.0
Operating right-of-use lease assets	1.7		55.4
Interest rate swap	—		29.1
Other assets	0.1		38.0
Inventory	2.2		11.2
Accounts payable	(5.3)		(109.2)
Deferred revenue	(8.1)		(25.6)
Environmental remediation liabilities	(5.6)		(92.4)
Closure and post-closure liabilities	(10.5)		(88.9)
Operating right-of-use lease liabilities	(1.7)		(55.8)
Deferred income tax liabilities	(9.2)		(151.0)
Other liabilities	(1.2)		(49.5)
Fair value of tangible assets acquired and liabilities assumed	150.3		1,011.0
Excess purchase price to be allocated	$	777.0	$	1,531.3
Excess purchase price allocated as follows:
Other intangible assets	$	103.0	$	162.9
Goodwill	674.0		1,368.4
Total allocated	$	777.0	$	1,531.3

Certain of the purchase price allocations are preliminary and based on information existing at the acquisition dates. Accordingly, the purchase price allocations are subject to change. For the acquisitions that closed during the six months ended June 30, 2023, we expect that a majority of 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-

9

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

hazardous and specialty waste. As of June 30, 2023, we finalized the purchase price allocation. We did not step-up the tax basis of the assets recognized in connection with the US Ecology acquisition, and do not expect that the goodwill and intangible assets recognized will be deductible for tax purposes.

During the six months ended June 30, 2023 and 2022, we incurred $18.2 million and $56.6 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology. During the three months ended June 30, 2023 and 2022, we incurred $10.6 million and $51.9 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 and integrate the business.

In June 2023, we acquired a vertically-integrated set of operations located primarily in Colorado from GFL Environmental Inc., including recycling, hauling, transfer and landfill operations. The purchase price allocation is preliminary and remains subject to revision 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 assigned to tangible and intangible assets acquired as well as certain landfill and environmental liabilities assumed, is based on the best estimates of management and is subject to revision based on the final valuations. We expect our valuations to be substantially complete by the end of 2023.

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 $121.0 million, which were recorded to other assets in our June 30, 2023 and 2022 consolidated balance sheets, respectively. During the three and six months ended June 30, 2023, we decreased the carrying value of these investments by $4.0 million and $2.6 million, respectively, and during the three and six months ended June 30, 2022, we increased the carrying value of these investments by $11.9 million and $12.2 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, our tax provisions reflect no benefits for the three and six months ended June 30, 2023, and benefits of approximately $24 million and $25 million, respectively, for the three and six months ended June 30, 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 and six months ended June 30, 2023, we incurred restructuring charges of $15.5 million and $21.0 million, respectively, and during the three and six months ended June 30, 2022, we incurred restructuring charges of $5.9 million and $11.9 million, respectively. Of the 2023 charges, $9.4 million related to the early termination of certain leases and $6.1 million related to the redesign of our asset management, and customer and order 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 2022. We paid $26.1 million, of which $15.8 million related to the early termination of certain leases, during 2023 and $8.3 million during 2022 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 June 30, 2023
Group 1	$	6,637.9	$	472.1	$	—	$	—	$	7,110.0
Group 2	6,238.3		201.9		(0.1)		0.8		6,440.9
Group 3	1,575.3		—		—		227.4		1,802.7
Total	$	14,451.5	$	674.0	$	(0.1)	$	228.2	$	15,353.6

Adjustments to acquisitions during the six months ended June 30, 2023 primarily related to changes in our valuation of assets acquired and liabilities assumed in connection with our acquisition of US Ecology.

10

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 June 30, 2023		Balance as of December 31, 2022		Additions Charged to Expense		Adjustments and Other		Balance as of June 30, 2023		Other Intangible Assets, Net as of June 30, 2023
Customer relationships	$	1,013.5	$	90.8	$	(572.5)	$	531.8	$	(709.1)	$	(23.4)	$	590.5	$	(142.0)	$	389.8
Non-compete agreements	67.9		11.3		(39.7)		39.5		(50.9)		(3.5)		39.7		(14.7)		24.8
Other intangible assets	77.0		0.9		(50.1)		27.8		(51.2)		(3.2)		43.5		(10.9)		16.9
Total	$	1,158.4	$	103.0	$	(662.3)	$	599.1	$	(811.2)	$	(30.1)	$	673.7	$	(167.6)	$	431.5

4. OTHER ASSETS

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of June 30, 2023 and December 31, 2022 follows:

	2023		2022
Inventories	$	96.1	$	96.6
Prepaid expenses	86.7		114.3
Other non-trade receivables	54.5		59.8
Income taxes receivable	47.2		214.0
Reinsurance receivable	35.0		31.9
Prepaid fees for cloud-based hosting arrangements, current	14.2		14.4
Other current assets	6.4		5.5
Total	$	340.1	$	536.5

Other Assets

A summary of other assets as of June 30, 2023 and December 31, 2022 follows:

	2023		2022
Investments	$	337.3	$	281.4
Operating right-of-use lease assets	238.8		275.1
Deferred compensation plan	110.4		100.6
Derivative and hedging assets	102.9		105.8
Reinsurance receivable	88.9		84.1
Deferred contract costs and sales commissions	81.5		80.2
Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements	54.7		51.4
Amounts recoverable for capping, closure and post-closure obligations	21.6		20.5
Deferred financing costs	4.4		5.1
Other	24.7		21.3
Total	$	1,065.2	$	1,025.5

11

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

5. OTHER LIABILITIES

Other Accrued Liabilities

A summary of other accrued liabilities as of June 30, 2023 and December 31, 2022 follows:

	2023		2022
Accrued payroll and benefits	$	264.8	$	342.6
Insurance reserves, current	210.9		187.5
Accrued fees and taxes	163.4		168.5
Accrued dividends	156.6		156.4
Operating right-of-use lease liabilities, current	50.9		57.9
Ceded insurance reserves, current	36.9		32.0
Accrued professional fees and legal settlement reserves	10.9		8.6
Other	142.1		104.8
Total	$	1,036.5	$	1,058.3

Other Long-Term Liabilities

A summary of other long-term liabilities as of June 30, 2023 and December 31, 2022 follows:

	2023		2022
Operating right-of-use lease liabilities	$	198.7	$	238.0
Deferred compensation plan liability	109.7		98.6
Derivative and hedging liabilities	96.4		99.7
Ceded insurance reserves	87.0		84.1
Contingent purchase price and acquisition holdbacks	59.9		60.5
Withdrawal liability - multiemployer pension funds	19.8		20.0
Other	38.0		59.8
Total	$	609.5	$	660.7

6. LANDFILL AND ENVIRONMENTAL COSTS

As of June 30, 2023, we owned or operated 208 active landfills with total available disposal capacity estimated to be 5.1 billion in-place cubic yards. Additionally, we had post-closure responsibility for 126 closed landfills.

Accrued Landfill and Environmental Costs

A summary of accrued landfill and environmental liabilities as of June 30, 2023 and December 31, 2022 follows:

	2023		2022
Landfill final capping, closure and post-closure liabilities	$	1,843.3	$	1,786.4
Environmental remediation	507.7		487.5
Total accrued landfill and environmental costs	2,351.0		2,273.9
Less: current portion	(140.0)		(132.6)
Long-term portion	$	2,211.0	$	2,141.3

12

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 six months ended June 30, 2023 and 2022:

	2023		2022
Asset retirement obligation liabilities, beginning of year	$	1,786.4	$	1,507.3
Non-cash additions	30.7		27.9
Acquisitions, net of divestitures and other adjustments	11.8		88.2
Asset retirement obligation adjustments	(9.7)		8.0
Payments	(24.5)		(18.0)
Accretion expense	48.6		44.1
Foreign currency translation	—		(0.3)
Asset retirement obligation liabilities, end of period	1,843.3		1,657.2
Less: current portion	(76.6)		(65.8)
Long-term portion	$	1,766.7	$	1,591.4

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 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 June 30, 2023 would be approximately $369 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 six months ended June 30, 2023 and 2022:

	2023		2022
Environmental remediation liabilities, beginning of year	$	487.5	$	454.9
Payments	(21.2)		(21.1)
Accretion expense (non-cash interest expense)	9.0		8.6
Acquisitions, net of divestitures and other adjustments	32.4		94.5
Environmental remediation liabilities, end of period	507.7		536.9
Less: current portion	(63.4)		(55.5)
Long-term portion	$	444.3	$	481.4

Bridgeton Landfill. During the six months ended June 30, 2023, we paid $5.9 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 June 30, 2023, the remediation liability recorded for this site was $81.2 million, of which approximately $9 million is expected to be paid during the remainder of 2023.

13

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 June 30, 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.

		June 30, 2023						December 31, 2022
Maturity	Interest Rate	Principal		Adjustments		Carrying Value		Principal		Adjustments		Carrying Value
Credit facilities:
Uncommitted Credit Facility	Variable	$	54.6	$	—	$	54.6	$	—	$	—	$	—
$3.0 billion - August 2026	Variable	175.1		—		175.1		250.0		—		250.0
Term Loan	Variable	700.0		—		700.0		1,000.0		—		1,000.0
Commercial Paper	Variable	750.0		(0.7)		749.3		1,000.0		(1.8)		998.2
Senior notes:
May 2023	4.750	—		—		—		300.0		(2.5)		297.5
August 2024	2.500	900.0		(2.1)		897.9		900.0		(3.0)		897.0
March 2025	3.200	500.0		(1.2)		498.8		500.0		(1.6)		498.4
November 2025	0.875	350.0		(1.6)		348.4		350.0		(1.9)		348.1
July 2026	2.900	500.0		(1.9)		498.1		500.0		(2.2)		497.8
November 2027	3.375	650.0		(2.8)		647.2		650.0		(3.1)		646.9
May 2028	3.950	800.0		(9.8)		790.2		800.0		(10.7)		789.3
April 2029	4.875	400.0		(4.9)		395.1		—		—		—
March 2030	2.300	600.0		(4.9)		595.1		600.0		(5.2)		594.8
February 2031	1.450	650.0		(6.7)		643.3		650.0		(7.1)		642.9
February 2032	1.750	750.0		(5.7)		744.3		750.0		(6.0)		744.0
March 2033	2.375	700.0		(6.8)		693.2		700.0		(7.1)		692.9
April 2034	5.000	800.0		(11.1)		788.9		—		—		—
March 2035	6.086	181.9		(11.8)		170.1		181.9		(12.2)		169.7
March 2040	6.200	399.9		(3.3)		396.6		399.9		(3.4)		396.5
May 2041	5.700	385.7		(4.8)		380.9		385.7		(4.8)		380.9
March 2050	3.050	400.0		(6.9)		393.1		400.0		(7.0)		393.0
Debentures:
September 2035	7.400	148.1		(29.5)		118.6		148.1		(30.0)		118.1
Tax-exempt:
2023 - 2051	3.250 - 4.125	1,189.1		(6.9)		1,182.2		1,189.1		(7.1)		1,182.0
Finance leases:
2024 - 2063	0.806 - 9.750	252.2		—		252.2		247.5		—		247.5
Total Debt		$	12,236.6	$	(123.4)	12,113.2		$	11,902.2	$	(116.7)	11,785.5
Less: current portion						(152.8)						(456.0)
Long-term portion						$	11,960.4					$	11,329.5

Loss on Extinguishment of Debt

During the three and six months ended June 30, 2023, we incurred a loss on the early extinguishment of debt related to the early repayment of a portion of our Term Loan Facility. We incurred non-cash charges related to the proportional share of unamortized deferred issuance costs of $0.2 million.

15

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Credit Facilities

Uncommitted Credit Facility

In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility). The Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties. Borrowings under the Uncommitted Credit Facility can be used for working capital, letters of credit, and other general corporate purposes. The agreement governing our Uncommitted Credit Facility requires us to comply with certain covenants. The Uncommitted Credit Facility may be terminated by either party at any time. As of June 30, 2023 we had $54.6 million of borrowings outstanding under our Uncommitted Credit Facility. As of December 31, 2022, we had no borrowings outstanding under our Uncommitted Credit Facility.

The Credit Facility

In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the Credit Facility). Borrowings under the Credit Facility mature in August 2026. As permitted by the Credit Facility, we have the right to request two one-year extensions of the maturity date, but none of the lenders are committed to participate in such extensions. The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.

In February 2023, we entered into Amendment No. 1 to the Credit Facility (the Credit Facility Amendment) to add our subsidiary, USE Canada Holdings, Inc. (the Canadian Borrower), as an additional borrower under the Credit Facility. The Credit Facility Amendment provides that the aggregate of (i) all loans to the Canadian Borrower and (ii) all loans denominated in Canadian dollars cannot exceed $500 million (the Canadian Sublimit). The Canadian Sublimit is part of, and not in addition to, the aggregate commitments under the Credit Facility.

Borrowings under the Credit Facility in United States dollars bear interest at a Base Rate, a daily floating SOFR or a term SOFR plus a current applicable margin of 0.910% based on our Debt Ratings (all as defined in the Credit Facility agreement). The Canadian dollar-denominated loans bear interest based on the Canadian Prime rate or the Canadian Dollar Offered Rate plus a current applicable margin of 0.910% based on our Debt Ratings. As of June 30, 2023, C$232 million was outstanding against the Canadian Sublimit, with an interest rate of 6.007%.

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. The Credit Facility can be used for working capital, capital expenditures, acquisitions, letters of credit and other general corporate purposes. The Credit Facility agreement requires us to comply with financial and other covenants. We may pay dividends and repurchase common stock if we are in compliance with these covenants.

We had $175.1 million (all related to Canadian-denominated loans) and $250.0 million outstanding under the Credit Facility as of June 30, 2023 and December 31, 2022, respectively. We had $336.5 million and $347.6 million of letters of credit outstanding under the Credit Facility as of June 30, 2023 and December 31, 2022, respectively. We also had $750.0 million and $1.0 billion of principal borrowings outstanding under the commercial paper program as of June 30, 2023 and December 31, 2022, respectively. As a result, availability under our Credit Facility was $1,738.4 million and $1,402.4 million as of June 30, 2023 and December 31, 2022, respectively.

Term Loan Facility

On April 29, 2022, we entered into the $1.0 billion Term Loan Facility. The Term Loan Facility will mature on April 29, 2025 and bears interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings. The weighted average interest rate for borrowings outstanding as of June 30, 2023 is 6.002%. We may prepay, without penalty, all or any part of the borrowings under the Term Loan Facility at any time.

On May 2, 2022, we completed the acquisition of US Ecology using proceeds from the Term Loan Facility and borrowings under the Credit Facility.

We had $700.0 million and $1.0 billion of borrowings outstanding under the Term Loan Facility as of June 30, 2023 and December 31, 2022, respectively.

Commercial Paper Program

In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $500.0 million outstanding at any one time (the Commercial Paper Cap). In August 2022, the Commercial Paper Cap was increased to $1.0 billion. The weighted average interest rate for borrowings outstanding as of June 30, 2023 is 5.287% with a weighted average maturity of 11 days.

16

REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

We had $750.0 million and $1.0 billion principal value of commercial paper issued and outstanding under the program as of June 30, 2023 and December 31, 2022, respectively. In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund the commercial paper program until it is re-borrowed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of June 30, 2023.

Senior Notes

In March 2023, we issued $400.0 million of 4.875% senior notes due 2029 (the 4.875% Notes) and $800.0 million of 5.000% senior notes due 2034 (the 5.000% Notes, and together, the Notes). The Notes are unsecured and unsubordinated and rank equally with our other unsecured obligations. We used the proceeds from the Notes for general corporate purposes, including the repayment of a portion of amounts outstanding under the Uncommitted Credit Facility, the Commercial Paper Program, the Credit Facility, and the Term Loan Facility. As a result of the Term Loan Facility repayment, we incurred a non-cash loss on the early extinguishment of debt related to the ratable portion of unamortized deferred issuance costs of $0.2 million.

Interest Rate Swap and Lock Agreements

Our ability to obtain financing through the capital markets is a key component of our financial strategy. Historically, we have managed risk associated with executing this strategy, particularly as it relates to fluctuations in interest rates, by using a combination of fixed and floating rate debt. From time to time, we also have entered into interest rate swap and lock agreements to manage risk associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).

Fair Value Hedges

During the second half of 2013, we entered into various interest rate swap agreements (the 2013 Interest Rate Swaps) relative to our 4.750% fixed rate senior notes due in May 2023 (4.750% Notes). The goal was to reduce overall borrowing costs and rebalance our debt portfolio's ratio of fixed-to-floating interest rates. These swap agreements settled in May 2023 along with our 4.750% Notes and are no longer included in our consolidated balance sheet.

Contemporaneously with the $250.0 million partial redemption of the 4.750% Notes in November 2020, we dedesignated the proportional share of these swap agreements as fair value hedges. There was no ineffectiveness recognized in the dedesignation of these fair value hedges. Following the dedesignation, the fair value of these free-standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy). As of December 31, 2022, these free-standing derivatives were reflected at their fair value of a $1.0 million liability and were included in other accrued liabilities in our consolidated balance sheet. For the three and six months ended June 30, 2023, we recognized gains of $0.4 million and $1.0 million, respectively, and for the three and six months ended June 30, 2022, we recognized losses of $1.6 million and $4.3 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives.

As of December 31, 2022, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected as a $1.2 million liability and included in other accrued liabilities in our consolidated balance sheet.

We recognized net interest expense of $0.8 million and $2.2 million during the three and six months ended June 30, 2023 and net interest income of $1.4 million and $3.2 million during the three and six months ended June 30, 2022, respectively, related to net swap settlements for these interest rate swap agreements, which is included in interest expense in our consolidated statements of income.

For the three and six months ended June 30, 2023, we recognized losses of $0.5 million and $2.3 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting gains of $0.4 million and $1.2 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate. For the three and six months ended June 30, 2022, we recognized gains of $1.3 million and $4.0 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes, and offsetting losses of $1.9 million and $5.2 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate. The difference of these fair value changes for the three and six months ended June 30, 2023 and 2022 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.

For further detail regarding the effec