REPUBLIC SERVICES, INC. [RSG] Filings

10-Q 1 rsg-20240630.htm 10-Q rsg-20240630

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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, 2024


☐			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

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 17, 2024, the registrant had outstanding 314,068,287 shares of Common Stock, par value $0.01 per share (excluding treasury shares of 7,217,356).

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REPUBLIC SERVICES, INC.

INDEX


PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	3
	Unaudited Consolidated Statement of Income for the Three and Six Months Ended June 30, 2024 and 2023	4
	Unaudited Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	5
	Unaudited Consolidated Statement of Stockholders' Equity for the Three and Six Months Ended June 30, 2024 and 2023	6
	Unaudited Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2024 and 2023	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities	50
Item 3.	Defaults upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
	Signatures	52

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REPUBLIC SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)


	June 30,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	490.6	$	140.0
Accounts receivable, less allowance for doubtful accounts and other of $82.9 and $83.2, respectively	1,817.8		1,768.4
Prepaid expenses and other current assets	351.3		472.6

Total current assets	2,659.7		2,381.0
Restricted cash and marketable securities	178.0		163.6
Property and equipment, net	11,446.5		11,350.9
Goodwill	15,864.9		15,834.5
Other intangible assets, net	463.4		496.2
Other assets	1,321.6		1,183.9
Total assets	$	31,934.1	$	31,410.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,285.5	$	1,411.5
Notes payable and current maturities of long-term debt	1,432.9		932.3
Deferred revenue	472.5		467.3
Accrued landfill and environmental costs, current portion	140.5		141.6
Accrued interest	103.1		104.1
Other accrued liabilities	1,099.1		1,171.5
Total current liabilities	4,533.6		4,228.3
Long-term debt, net of current maturities	11,526.8		11,887.1
Accrued landfill and environmental costs, net of current portion	2,332.2		2,281.0
Deferred income taxes and other long-term tax liabilities, net	1,569.2		1,526.8
Insurance reserves, net of current portion	365.8		348.8
Other long-term liabilities	600.2		594.6
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; 321.2 and 320.7 issued including shares held in treasury, respectively	3.2		3.2
Additional paid-in capital	2,932.2		2,900.8
Retained earnings	9,060.7		8,433.9
Treasury stock, at cost; 7.2 and 6.1 shares, respectively	(981.9)		(783.5)
Accumulated other comprehensive loss, net of tax	(9.1)		(12.1)
Total Republic Services, Inc. stockholders’ equity	11,005.1		10,542.3
Non-controlling interests in consolidated subsidiary	1.2		1.2
Total stockholders’ equity	11,006.3		10,543.5
Total liabilities and stockholders’ equity	$	31,934.1	$	31,410.1

The accompanying notes are an integral part of these statements.

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REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	4,048.0	$	3,725.9	$	7,909.8	$	7,307.0
Expenses:
Cost of operations	2,382.6		2,224.4		4,665.8		4,393.8
Depreciation, amortization and depletion	413.0		358.3		812.2		717.0
Accretion	26.7		24.5		53.4		48.6
Selling, general and administrative	407.6		396.0		821.7		775.2

Gain on business divestitures and impairments, net	(1.4)		—		(1.4)		—
Restructuring charges	5.7		15.5		11.5		21.0
Operating income	813.8		707.2		1,546.6		1,351.4
Interest expense	(128.3)		(124.4)		(267.6)		(251.1)
Loss on extinguishment of debt	—		—		—		(0.2)
Loss from unconsolidated equity method investments	(33.8)		(3.6)		(42.5)		(2.7)
Interest income	1.6		1.6		3.1		3.0
Other income (loss), net	0.7		(0.6)		13.3		1.9
Income before income taxes	654.0		580.2		1,252.9		1,102.3
Provision for income taxes	142.1		152.6		287.3		290.9
Net income	511.9		427.6		965.6		811.4
Net income attributable to non-controlling interests in consolidated subsidiary	(0.4)		(0.2)		(0.3)		(0.2)
Net income attributable to Republic Services, Inc.	$	511.5	$	427.4	$	965.3	$	811.2
Basic earnings per share attributable to Republic Services, Inc. stockholders:
Basic earnings per share	$	1.62	$	1.35	$	3.06	$	2.56
Weighted average common shares outstanding	314.9		316.8		315.1		316.8
Diluted earnings per share attributable to Republic Services, Inc. stockholders:
Diluted earnings per share	$	1.62	$	1.35	$	3.06	$	2.56
Weighted average common and common equivalent shares outstanding	315.2		317.3		315.5		317.2
Cash dividends per common share	$	0.535	$	0.495	$	1.070	$	0.990

The accompanying notes are an integral part of these statements.

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REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	511.9	$	427.6	$	965.6	$	811.4
Other comprehensive income (loss), net of tax
Hedging activity:

Realized income reclassified into earnings	(6.8)		(2.2)		(8.9)		(4.8)
Unrealized gain	1.2		7.3		6.4		12.5
Pension activity:
Change in funded status of pension plan obligations	—		—		—		0.2

Foreign currency activity:

Unrealized gain on foreign currency translation	1.8		(2.5)		5.5		(2.5)
Other comprehensive income, net of tax	(3.8)		2.6		3.0		5.4
Comprehensive income	508.1		430.2		968.6		816.8
Comprehensive income attributable to non-controlling interests	(0.4)		(0.2)		(0.3)		(0.2)
Comprehensive income attributable to Republic Services, Inc.	$	507.7	$	430.0	$	968.3	$	816.6

The accompanying notes are an integral part of these statements.

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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, 2023	320.7	$	3.2	$	2,900.8	$	8,433.9	(6.1)	$	(783.5)	$	(12.1)	$	1.2	$	10,543.5

Net income (loss)	—	—		—		453.8		—	—		—		(0.1)		453.7
Other comprehensive income	—	—		—		—		—	—		6.8		—		6.8
Cash dividends declared	—	—		—		(168.5)		—	—		—		—		(168.5)
Issuances of common stock	0.5	—		3.2		—		(0.2)	(28.5)		—		—		(25.3)
Stock-based compensation	—	—		12.0		(1.3)		—	—		—		—		10.7

Distributions paid	—	—		—		—		—	—		—		(0.3)		(0.3)
Balance as of March 31, 2024	321.2	3.2		2,916.0		8,717.9		(6.3)	(812.0)		(5.3)		0.8		10,820.6

Net income	—	—		—		511.5		—	—		—		0.4		511.9
Other comprehensive loss	—	—		—		—		—	—		(3.8)		—		(3.8)
Cash dividends declared	—	—		—		(168.0)		—	—		—		—		(168.0)
Issuances of common stock	—	—		5.0		—		—	(0.7)		—		—		4.3
Stock-based compensation	—	—		11.2		(0.7)		—	—		—		—		10.5
Purchase of common stock for treasury	—	—		—		—		(0.9)	(169.2)		—		—		(169.2)

Balance as of June 30, 2024	321.2	$	3.2	$	2,932.2	$	9,060.7	(7.2)	$	(981.9)	$	(9.1)	$	1.2	$	11,006.3


	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, 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

The accompanying notes are an integral part of these statements.

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REPUBLIC SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Six Months Ended June 30,
	2024		2023
Cash provided by operating activities:
Net income	$	965.6	$	811.4
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization, depletion and accretion	865.6		765.6
Non-cash interest expense	34.9		45.1

Stock-based compensation	21.8		21.4
Deferred tax provision	47.5		33.4
Provision for doubtful accounts, net of adjustments	19.9		19.7
Loss on extinguishment of debt	—		0.2
Gain on disposition of assets and asset impairments, net	(0.3)		(4.7)


Loss (gain) from unconsolidated equity method investments	42.5		2.7

Other non-cash items	(0.4)		(1.5)
Change in assets and liabilities, net of effects from business acquisitions and divestitures:
Accounts receivable	(69.4)		(52.0)
Prepaid expenses and other assets	36.2		138.5
Accounts payable	19.5		35.1

Capping, closure and post-closure expenditures	(22.2)		(24.5)
Remediation expenditures	(26.7)		(21.2)
Other liabilities	(47.3)		(5.4)
Proceeds for retirement of certain hedging relationships	23.7		2.4
Cash provided by operating activities	1,910.9		1,766.2
Cash used in investing activities:
Purchases of property and equipment	(917.9)		(714.3)
Proceeds from sales of property and equipment	5.3		17.1
Cash used in acquisitions and investments, net of cash and restricted cash acquired	(201.0)		(987.7)
Cash paid for business divestitures	1.7		(0.3)
Purchases of restricted marketable securities	(17.0)		(9.7)
Sales of restricted marketable securities	16.4		9.1
Other	(0.2)		11.5
Cash used in investing activities	(1,112.7)		(1,674.3)
Cash used in financing activities:
Proceeds from credit facilities and notes payable, net of fees	10,484.2		15,401.2
Proceeds from issuance of senior notes, net of discount and fees	888.9		1,183.6
Payments of credit facilities and notes payable	(11,274.0)		(16,286.9)


Issuances of common stock, net	(21.0)		(7.0)

Purchases of common stock for treasury	(167.6)		—
Cash dividends paid	(336.8)		(313.0)
Distributions paid to non-controlling interests in consolidated subsidiary	(0.3)		—
Contingent consideration payments	(8.0)		(11.6)
Cash used in financing activities	(434.6)		(33.7)
Effect of foreign exchange rate changes on cash	0.7		0.5
Increase in cash, cash equivalents, restricted cash and restricted cash equivalents	364.3		58.7
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period	227.5		214.3
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	591.8	$	273.0

The accompanying notes are an integral part of these statements.

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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 waste business operating primarily in geographic areas located in the western United States. Group 2 is our recycling and waste business operating primarily in geographic areas located in the southeastern and mid-western United States, the eastern seaboard of the United States, and Canada. Group 3 is our environmental solutions business operating primarily in geographic areas located across the United States and Canada. These groups represent our reportable segments, which each provide integrated environmental services, including but not limited to collection, transfer, recycling, and disposal.

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, 2023.

For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation and are not material to our consolidated financial statements. 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 landfill development costs and final capping, closure and post-closure costs; our liabilities for environmental remediation, and insurance reserves. For more detail on significant accounting policies, refer to 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, 2023. Our actual results may differ significantly from our estimates.

New Accounting Pronouncements

Accounting Standards Updates Issued but not yet Adopted

Climate-Related Disclosures

In March 2024, the SEC adopted Final Rule 33-11275 and 34-99678 - The Enhancement and Standardization of Climate-Related Disclosures for Investors. The rules require registrants to provide standardized disclosures related to material climate-related risks, governance and risk management strategies, and the financial impact of severe weather events and material Scope 1 and 2 greenhouse gas emissions. The rules require implementation in phases between 2025 and 2033. In April 2024, the SEC announced that it would voluntarily stay these rules pending judicial review. The Company is currently evaluating the impact of the rules on its future consolidated financial statements.

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative

In October 2023, the FASB issued ASU 2023-06 to modify the disclosure or presentation requirements of a variety of topics,

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the SEC's requirements, and to align the requirements in the FASB accounting standard codification with the SEC's regulations. The Company is currently evaluating the amendments and the impact on its future consolidated financial statements.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 amends the reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. We are currently assessing the effect this guidance may have on our consolidated financial statements.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. We are currently assessing the effect this guidance may have on our consolidated financial statements.

2. BUSINESS ACQUISITIONS, INVESTMENTS AND RESTRUCTURING CHARGES

Acquisitions

We acquired various environmental services businesses during the six months ended June 30, 2024 and 2023. The aggregate purchase price paid for these business acquisitions and the allocations of the aggregate purchase price follows:


	2024		2023
Purchase price:
Cash used in acquisitions, net of cash acquired of $0.8 and $15.0, respectively	$	40.9	$	918.7

Holdbacks	—		8.1
Fair value, future minimum finance lease payments	—		0.5

Total	$	40.9	$	927.3
Allocated as follows:

Accounts receivable	$	1.9	$	26.1
Prepaid expenses	—		1.0
Landfill development costs	—		0.5
Property and equipment	20.3		160.3
Operating right-of-use lease assets	—		1.7


Other assets	—		0.1
Parts and supplies	0.1		2.2
Accounts payable	(0.3)		(5.3)
Deferred revenue	—		(8.1)
Environmental remediation liabilities	—		(5.6)
Closure and post-closure liabilities	—		(10.5)
Operating right-of-use lease liabilities	—		(1.7)
Deferred income tax liabilities	(1.3)		(9.2)
Other liabilities	(0.2)		(1.2)
Fair value of tangible assets acquired and liabilities assumed	20.5		150.3
Excess purchase price to be allocated	$	20.4	$	777.0
Excess purchase price allocated as follows:
Other intangible assets	$	4.2	$	103.0
Goodwill	16.2		674.0
Total allocated	$	20.4	$	777.0

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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, 2024, we expect that a majority of the goodwill and intangible assets recognized as a result of these acquisitions will not 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.

In November 2023, we acquired all of the issued and outstanding capital stock or other ownership interests of Advanced Chemical Transport LLC (ACT). ACT's environmental solutions operations are primarily located in the western United States and provide us with additional growth opportunities in our environmental solutions line of business. 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 property, plant and equipment and customer relationship intangible assets acquired, is based on the best estimates of management and is subject to revision based on the final valuations. We expect our final valuations to be completed in the fourth quarter of 2024.

In December 2023, we acquired all of the issued and outstanding membership and other equity interests of Central Texas Refuse, LLC and an affiliate thereof (CTR). CTR's vertically integrated recycling and waste services operations are located in and around Austin, Texas and provide us with the opportunity to re-enter the high growth Austin market. 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 property, plant and equipment and customer relationship 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 final valuations to be completed in the fourth quarter of 2024.

Investments

In 2024, we acquired a non-controlling equity interest in a joint venture with a landfill gas-to-energy developer to construct a renewable natural gas project at one of our landfill locations in Illinois. During the six months ended June 30, 2024, we contributed $30.8 million in the joint venture. The investment is accounted for under the equity method of accounting.

In 2024, we acquired a non-controlling equity interest in a thermal processing facility that treats and recycles contaminated soil, hazardous and non-hazardous waste, and contaminated water to expand our environmental service offering in Canada. During the six months ended June 30, 2024, we contributed $26.9 million in the joint venture. The investment is accounted for under the equity method of accounting.

These investments were recorded as other assets in our consolidated balance sheets as of June 30, 2024.

In 2024 and 2023, 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 $90.8 million and $1.5 million, which were recorded to other assets in our June 30, 2024 and 2023 consolidated balance sheets, respectively. During the three and six months ended June 30, 2024, we decreased the carrying value of these investments by $33.2 million and $42.4 million, respectively. Additionally, our tax provisions reflect benefits of $32.6 million and $41.0 million for the three and six months ended June 30, 2024 due to the tax credits related to these investments, compared to no benefits for the three and six months ended June 30, 2023. 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, 2023.

Restructuring Charges

During the three and six months ended June 30, 2024, we incurred restructuring charges of $5.7 million and $11.5 million, respectively, and during the three and six months ended June 30, 2023, we incurred restructuring charges of $15.5 million and $21.0 million, respectively. The 2024 charges related to the redesign of our asset management, and customer and order management software systems. 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. During the six months ended June 30, 2024 and 2023, we paid $9.9 million and $26.1 million, respectively, related to these restructuring efforts.

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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, 2023		Acquisitions		Divestitures		Adjustments to Acquisitions and Other		Balance as of June 30, 2024
Group 1	$	7,312.4	$	1.1	$	—	$	16.7	$	7,330.2
Group 2	6,445.5		—		(0.3)		(0.7)		6,444.5
Group 3	2,076.6		15.1		—		(1.5)		2,090.2
Total	$	15,834.5	$	16.2	$	(0.3)	$	14.5	$	15,864.9

Adjustments to acquisitions during the six months ended June 30, 2024 primarily related to changes in our valuation of property, plant and equipment acquired as a result of obtaining new information regarding the acquisitions that closed in 2023.

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, 2023		Acquisitions		Adjustments and Other		Balance as of June 30, 2024		Balance as of December 31, 2023		Additions Charged to Expense		Adjustments and Other		Balance as of June 30, 2024		Other Intangible Assets, Net as of June 30, 2024
Customer relationships	$	631.7	$	3.3	$	(0.5)	$	634.5	$	(165.7)	$	(31.5)	$	—	$	(197.2)	$	437.3
Non-compete agreements	30.4		0.9		—		31.3		(15.7)		(3.1)		—		(18.8)		12.5
Other intangible assets	23.2		—		—		23.2		(7.7)		(1.9)		—		(9.6)		13.6
Total	$	685.3	$	4.2	$	(0.5)	$	689.0	$	(189.1)	$	(36.5)	$	—	$	(225.6)	$	463.4

4. OTHER ASSETS

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets as of June 30, 2024 and December 31, 2023 follows:


	2024		2023
Parts and supplies	$	99.9	$	97.3
Prepaid expenses	94.3		123.0
Other non-trade receivables	56.2		63.2
Reinsurance receivable	38.7		35.4
Income taxes receivable	29.9		126.3
Prepaid fees for cloud-based hosting arrangements, current	24.4		17.0
Derivative and hedging assets	—		4.2
Other current assets	7.9		6.2

Total	$	351.3	$	472.6

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Other Assets

A summary of other assets as of June 30, 2024 and December 31, 2023 follows:


	2024		2023
Investments	$	586.0	$	469.4
Operating right-of-use lease assets	231.2		238.1
Deferred compensation plan	119.1		112.7
Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements	106.6		67.6
Reinsurance receivable	94.7		92.1
Deferred contract costs and sales commissions	81.3		82.5
Derivative and hedging assets	59.3		74.1
Amounts recoverable for capping, closure and post-closure obligations	23.1		21.9
Deferred financing costs	2.9		3.6
Other	17.4		21.9
Total	$	1,321.6	$	1,183.9

5. OTHER LIABILITIES

Other Accrued Liabilities

A summary of other accrued liabilities as of June 30, 2024 and December 31, 2023 follows:


	2024		2023
Accrued payroll and benefits	$	280.7	$	350.5
Insurance reserves, current	226.4		216.6
Accrued fees and taxes	188.8		193.5
Accrued dividends	168.0		168.3
Operating right-of-use lease liabilities, current	53.2		54.8

Current tax liabilities	41.8		2.1
Ceded insurance reserves, current	38.7		35.4
Accrued professional fees and legal settlement reserves	13.4		17.9
Derivative and hedging liabilities	2.0		8.3
Other	86.1		124.1
Total	$	1,099.1	$	1,171.5

Other Long-Term Liabilities

A summary of other long-term liabilities as of June 30, 2024 and December 31, 2023 follows:


	2024		2023
Operating right-of-use lease liabilities	$	188.6	$	194.9
Deferred compensation plan liability	121.2		114.7
Ceded insurance reserves	94.7		92.1
Derivative and hedging liabilities	77.9		71.3
Contingent purchase price and acquisition holdbacks	59.4		59.1
Withdrawal liability - multiemployer pension funds	19.3		19.6

Other	39.1		42.9
Total	$	600.2	$	594.6

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

6. LANDFILL AND ENVIRONMENTAL COSTS

As of June 30, 2024, 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, 2024 and December 31, 2023 follows:


	2024		2023
Landfill final capping, closure and post-closure liabilities	$	2,004.9	$	1,937.2
Environmental remediation	467.8		485.4
Total accrued landfill and environmental costs	2,472.7		2,422.6
Less: current portion	(140.5)		(141.6)
Long-term portion	$	2,332.2	$	2,281.0

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, 2024 and 2023:


	2024		2023
Asset retirement obligation liabilities, beginning of year	$	1,937.2	$	1,786.4
Non-cash additions	29.6		30.7
Acquisitions, net of divestitures and other adjustments	4.1		11.8
Asset retirement obligation adjustments	2.8		(9.7)
Payments	(22.2)		(24.5)
Accretion expense	53.4		48.6

Asset retirement obligation liabilities, end of period	2,004.9		1,843.3
Less: current portion	(74.3)		(76.6)
Long-term portion	$	1,930.6	$	1,766.7

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, 2024 would be approximately $375 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.

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes the activity in our environmental remediation liabilities for the six months ended June 30, 2024 and 2023:


	2024		2023
Environmental remediation liabilities, beginning of year	$	485.4	$	487.5

Payments	(26.7)		(21.2)
Accretion expense (non-cash interest expense)	8.4		9.0
Acquisitions, net of divestitures and other adjustments	0.7		32.4
Environmental remediation liabilities, end of period	467.8		507.7
Less: current portion	(66.2)		(63.4)
Long-term portion	$	401.6	$	444.3

Bridgeton Landfill. During the six months ended June 30, 2024, we paid $5.4 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, 2024, the remediation liability recorded for this site was $68.2 million, of which approximately $8 million is expected to be paid during the remainder of 2024.

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 United States 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.

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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, 2024 and December 31, 2023 is listed in the following table, and is adjusted for 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, 2024						December 31, 2023
Maturity	Interest Rate	Principal		Adjustments		Carrying Value		Principal		Adjustments		Carrying Value
Credit facilities:
Uncommitted Credit Facility	Variable	$	—	$	—	$	—	$	—	$	—	$	—
$3.5 billion - August 2026	Variable	182.7		—		182.7		297.1		—		297.1
Term Loan	Variable	—		—		—		500.0		—		500.0
Commercial Paper	Variable	180.0		(0.1)		179.9		496.0		(0.7)		495.3
Senior notes:
August 2024	2.500	900.0		(0.2)		899.8		900.0		(1.2)		898.8
March 2025	3.200	500.0		(0.5)		499.5		500.0		(0.9)		499.1
November 2025	0.875	350.0		(0.9)		349.1		350.0		(1.2)		348.8
July 2026	2.900	500.0		(1.3)		498.7		500.0		(1.6)		498.4
November 2027	3.375	650.0		(2.1)		647.9		650.0		(2.5)		647.5
May 2028	3.950	800.0		(8.0)		792.0		800.0		(8.9)		791.1
April 2029	4.875	750.0		(7.0)		743.0		750.0		(6.9)		743.1
November 2029	5.000	400.0		(3.8)		396.2		—		—		—
March 2030	2.300	600.0		(4.2)		595.8		600.0		(4.5)		595.5
February 2031	1.450	650.0		(5.8)		644.2		650.0		(6.2)		643.8
February 2032	1.750	750.0		(5.1)		744.9		750.0		(5.4)		744.6
March 2033	2.375	700.0		(6.2)		693.8		700.0		(6.5)		693.5
December 2033	5.000	650.0		(9.5)		640.5		650.0		(8.9)		641.1
April 2034	5.000	800.0		(10.3)		789.7		800.0		(10.7)		789.3
November 2034	5.200	500.0		(5.6)		494.4		—		—		—
March 2035	6.086	181.9		(11.2)		170.7		181.9		(11.5)		170.4
March 2040	6.200	399.9		(3.2)		396.7		399.9		(3.3)		396.6
May 2041	5.700	385.7		(4.6)		381.1		385.7		(4.7)		381.0
March 2050	3.050	400.0		(6.7)		393.3		400.0		(6.8)		393.2
Debentures:
September 2035	7.400	148.1		(28.2)		119.9		148.1		(28.8)		119.3
Tax-exempt:
2024 - 2054	3.500 - 4.375	1,439.1		(9.7)		1,429.4		1,289.1		(8.5)		1,280.6
Finance leases:
2024 - 2063	0.810 - 9.750	276.5		—		276.5		251.3		—		251.3
Total Debt		$	13,093.9	$	(134.2)	12,959.7		$	12,949.1	$	(129.7)	12,819.4
Less: current portion						(1,432.9)						(932.3)
Long-term portion						$	11,526.8					$	11,887.1

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.

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REPUBLIC SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 both June 30, 2024 and December 31, 2023, 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 (as amended, 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 October 2023, we completed an upsize of the Credit Facility to $3.5 billion.

In February 2023, we entered into Amendment No. 1 to the Credit Facility to add our subsidiary, USE Canada Holdings, Inc.(the Canadian Borrower), as an additional borrower under the Credit Facility, and provided that the aggregate of (i) all loans to the Canadian Borrower and (ii) all loans denominated in Canadian dollars cannot exceed $500.0 million (the Canadian Sublimit). In October 2023, we entered into Amendment No. 2 to the Credit Facility which increased the Canadian Sublimit to $1.0 billion. 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, 2024 and December 31, 2023, C$249.9 million and C$201.5 million, respectively, were outstanding against the Canadian Sublimit. The weighted average interest rate for borrowings outstanding as of June 30, 2024 was 6.223%.

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 $182.7 million and $297.1 million of borrowings outstanding under the Credit Facility as of June 30, 2024 and December 31, 2023, respectively. We had $315.4 million and $336.5 million of letters of credit outstanding under the Credit Facility as of June 30, 2024 and December 31, 2023, respectively. We also had $179.9 million and $495.3 million of principal borrowings outstanding (net of related discount on issuance) under the commercial paper program as of June 30, 2024 and December 31, 2023, respectively. As a result, availability under our Credit Facility was $2,821.9 million and $2,371.2 million as of June 30, 2024 and December 31, 2023, respectively.

Term Loan Facility

On April 29, 2022, we entered into a $1.0 billion term loan facility (the Term Loan Facility) which bears interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings. We had $500.0 million of borrowings outstanding under the Term Loan Facility as of December 31, 2023. During the six months ended June 30, 2024, we paid down the remaining balance of the Term Loan Facility.

Commercial Paper Program

We have entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $1.5 billion outstanding at any one time. The weighted average interest rate for borrowings outstanding as of June 30, 2024 was 5.515% with a weighted average maturity of 24 days.

We had $180.0 million and $496.0 million in aggregate principal amoun