|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capping, closure and post-closure obligations | $ | 59 | | | $ | 43 | |
| Insurance | 149 | | | 121 | |
|
| Total restricted cash and marketable securities | $ | 208 | | | $ | 164 | |
Material Cash Requirements and Intended Uses of Cash
We expect existing cash, cash equivalents, restricted cash and marketable securities, cash flows from operations and financing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future. Our known current- and long-term uses of cash include, among other possible demands: (1) capital expenditures and leases, (2) acquisitions, (3) dividend payments, (4)
payments to service debt and other long-term obligations, (5) payments for asset retirement obligations and environmental liabilities and (6) share repurchases.
Capital Expenditures and Leases
We make investments in property and equipment primarily to allow for growth of our service offerings. These investments are largely concentrated in vehicles and equipment and costs to construct our landfills. We expect to receive between $1.86 billion to $1.90 billion of property and equipment, net of proceeds from the sale of property and equipment, in 2025.
We lease property and equipment in the ordinary course of business under various lease agreements. The most significant lease obligations are for real property and equipment specific to our industry, including property operated as a landfill or transfer station and operating equipment. As of December 31, 2024, the amount of total future lease payments under operating and finance leases was $269 million and $445 million, respectively. For additional detail regarding our lease obligations, see Note 10, Leases, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Acquisitions
Our acquisition growth strategy focuses primarily on acquiring privately held recycling and waste companies and environmental solutions businesses that complement our existing business platform. We continue to invest in value-enhancing acquisitions in existing markets.
We expect to invest approximately $1 billion in acquisitions in 2025.
Dividend Payments
In October 2024 our Board of Directors approved a quarterly dividend of $0.580 per share. Aggregate cash dividends declared were $699 million for the year ended December 31, 2024. As of December 31, 2024, we recorded a quarterly dividend payable of $181 million to shareholders of record at the close of business on January 2, 2025, which was paid on January 15, 2025.
Debt and other long-term obligations
Debt repayments may include purchases of our outstanding indebtedness in the secondary market or otherwise. We believe that our excess cash, cash from operating activities and our availability to draw on our credit facilities provide us with sufficient financial resources to meet our anticipated capital requirements and maturing obligations as they come due.
We may choose to voluntarily retire certain portions of our outstanding debt before their maturity dates using cash from operations or additional borrowings. We may also explore opportunities in the capital markets to fund redemptions should market conditions be favorable. Early extinguishment of debt will result in an impairment charge in the period in which the debt is repaid. The loss on early extinguishment of debt relates to premiums paid to effectuate the repurchase and the relative portion of unamortized note discounts and debt issue costs.
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 million outstanding at any one time (the Commercial Paper Cap). In August 2022, the Commercial Paper Cap was increased to $1.0 billion, and in October 2023, was subsequently increased to $1.5 billion. The weighted average interest rate for borrowings outstanding as of December 31, 2024 was 4.646% with a weighted average maturity of approximately 18 days. In the event of a failed re-borrowing, we currently have availability under our Credit Facility (as defined below) to fund the amounts borrowed under the commercial paper program until they are re-borrowed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2024.
As of December 31, 2024, the total principal value of our debt was $12.8 billion, of which $862 million is due in 2025.
We have several agreements that require us to dispose of a minimum number of tons at third-party disposal facilities. Under these put-or-pay agreements, we must pay for agreed-upon minimum volumes regardless of the actual number of tons placed at the facilities.
Our unconditional purchase commitments have varying expiration dates, with some extending through the remaining life of the respective landfill. Future minimum payments under unconditional purchase commitments consist primarily of (1) disposal related agreements, which include fixed or minimum royalty payments, host agreements and take-or-pay and put-or-pay agreements and (2) other obligations including committed capital expenditures and consulting service agreements. As of December 31, 2024, such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $907 million, of which $202 million was short-term.
For additional detail regarding our debt and known contractual and other obligations, see Note 9, Debt, and Note 19, Commitments and Contingencies, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Asset Retirement Obligations and Environmental Liabilities
We have future obligations for final capping, closure and post-closure costs with respect to the landfills we own or operate as set forth in applicable landfill permits. As of December 31, 2024, our future obligations for final capping, closure and post-closure costs totaled $2.1 billion, of which $96 million was short-term.
Additionally, we are subject to an array of laws and regulations relating to the protection of the environment, and we remediate sites in the ordinary course of our business. Our environmental remediation liabilities primarily include costs associated with remediating groundwater, surface water and soil contamination, as well as controlling and containing methane gas migration and the related legal costs. As of December 31, 2024, our environmental liabilities totaled $447 million, of which $63 million was short-term.
For additional detail regarding our asset retirement obligations and environmental liabilities, see Note 8, Landfill and Environmental Costs, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Share Repurchases
In October 2020, our Board of Directors approved a $2 billion share repurchase authorization effective starting January 1, 2021 and extending through December 31, 2023. In October 2023, our Board of Directors approved a $3 billion share repurchase authorization effective starting January 1, 2024 and extending through December 31, 2026. Share repurchases under the current program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws. While the Board of Directors has approved the program, the timing of any purchases, the prices and the number of shares of common stock to be purchased will be determined by our management, at its discretion, and will depend upon market conditions and other factors. The share repurchase program may be extended, suspended or discontinued at any time. As of December 31, 2024, the remaining authorized purchase capacity under our October 2023 repurchase program was $2.5 billion.
Summary of Cash Flow Activity
The major components of changes in cash flows for 2024 and 2023 are discussed in the following paragraphs. The following table summarizes our cash flow from operating activities, investing activities and financing activities for the years ended December 31, 2024 and 2023 (in millions of dollars): | | | | | | | | | | | |
| 2024 | | 2023 |
| Net cash provided by operating activities | $ | 3,936 | | | $ | 3,618 | |
| Net cash used in investing activities | $ | (2,561) | | | $ | (3,667) | |
| Net cash (used in) provided by financing activities | $ | (1,398) | | | $ | 62 | |
Cash Flows Provided by Operating Activities
The most significant items affecting the comparison of our operating cash flows for 2024 and 2023 are summarized below.
Changes in assets and liabilities, net of effects from business acquisitions and divestitures, decreased our cash flow from operations by $378 million in 2024, compared to a decrease of $91 million during the same period in 2023, primarily as a result of the following:
•Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $76 million during 2024, due to the timing of billings net of collections, compared to a $71 million increase in the same period in 2023. As of December 31, 2024, our days sales outstanding were 40.9, or 30.0 days net of deferred revenue, compared to 42.0, or 30.9 days net of deferred revenue, as of December 31, 2023.
•Our prepaid expenses and other assets increased $171 million in 2024 compared to a $30 million increase in 2023. The increase in prepaid expenses and other assets during 2024 is primarily driven by an increase in capitalized implementation costs for our cloud-based hosting arrangements and higher insurance premium costs.
•Our accounts payable decreased $27 million during 2024 compared to an $83 million increase during 2023, due to the timing of payments.
•Cash paid for capping, closure and post-closure obligations was $56 million during 2024 compared to $61 million for 2023. The decrease in cash paid for capping, closure and post-closure obligations is primarily due to the timing of capping and post-closure payments at certain of our landfill sites.
•Cash paid for remediation obligations was $7 million higher during 2024 compared to 2023.
In addition, cash paid for interest was $487 million and $423 million, excluding net swap settlements for our fixed to floating interest rate swaps, for 2024 and 2023, respectively. Cash paid for income taxes was $313 million and $343 million for 2024 and 2023, respectively.
We use cash flows from operations to fund capital expenditures, acquisitions, dividend payments, debt repayments and share repurchases.
Cash Flows Used in Investing Activities
The most significant items affecting the comparison of our cash flows used in investing activities for 2024 and 2023 are summarized below:
•Capital expenditures during 2024 were $1,855 million as compared to $1,631 million for 2023.
•Proceeds from sales of property and equipment during 2024 were $47 million as compared to $29 million for 2023.
•During 2024 and 2023, we used $753 million and $2,065 million, respectively, for acquisitions and investments, net of cash acquired. During 2024 and 2023, we received $2 million and $6 million from business divestitures, respectively.
We intend to finance capital expenditures and acquisitions through cash on hand, restricted cash held for capital expenditures, cash flows from operations, our revolving credit facilities and tax-exempt bonds and other financings. We expect to primarily use cash and borrowings under our revolving credit facilities to pay for future acquisitions.
Cash Flows (Used in) Provided by Financing Activities
The most significant items affecting the comparison of our cash flows used in financing activities for 2024 and 2023 are summarized below:
•During 2024, we issued $900 million of senior notes for cash proceeds, net of discounts and fees, of $889 million. During 2023, we issued $2,200 million of senior notes for cash proceeds, net of discounts and fees, of $2,172 million. Net payments of notes payable and long-term debt were $1,089 million during 2024, compared to net payments of $1,190 million in 2023. For a more detailed discussion, see the Financial Condition section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
•During 2024, we repurchased 2.5 million shares of our stock for $480 million. During 2023, we repurchased 1.8 million shares of our stock for $262 million.
•In July 2024, our Board of Directors approved an increase in our quarterly dividend to $0.580 per share. Dividends paid were $687 million and $638 million in 2024 and 2023, respectively.
•During 2024 and 2023, cash paid for purchase price holdback releases and contingent purchase price related to acquisitions was $15 million and $19 million, respectively.
Financial Condition
Debt Obligations
As of December 31, 2024, we had $862 million of principal debt maturing within the next 12 months, which includes certain finance lease obligations. All of our tax-exempt financings are remarketed either quarterly or semiannually by remarketing agents to effectively maintain a variable yield, with the exception of three tax-exempt financings with initial remarketing periods of 10 years. The holders of the bonds can put them back to the remarketing agents at the end of each interest period. If the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, as of December 31, 2024, we had availability under our Credit Facility (defined below) to fund these bonds until they are remarketed successfully. In the event of a failed re-borrowing under our commercial paper program, as of December 31, 2024, we had availability under our Credit Facility to fund the amounts borrowed under the commercial paper program until it is re-borrowed successfully. Accordingly, we have classified these tax-exempt financings and commercial paper program borrowings as long-term in our consolidated balance sheet as of December 31, 2024.
For further discussion of the components of our overall debt, see Note 9, Debt, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Credit Facilities
Uncommitted Credit Facility
In January 2022, we entered into a $200 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 December 31, 2024 and 2023, we had no borrowings outstanding under our Uncommitted Credit Facility.
The Credit Facility
In July 2024, we and our subsidiary, USE Canada Holdings, Inc. (the Canadian Borrower) entered into the Second Amended and Restated Credit Agreement (the Credit Facility) which amends and restates the unsecured revolving credit facility we entered into in August 2021. The total outstanding principal amount that we may borrow under the Credit Facility may not exceed the current aggregate lenders' commitments of $3.5 billion, and borrowings under the Credit Facility mature in July 2029. 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 billion through increased commitments from existing lenders or the addition of new lenders.
All loans to the Canadian Borrower and all loans denominated in Canadian dollars cannot exceed $1 billion (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 0.920% based on our Debt Ratings (all as defined in the Credit Facility agreement). The Canadian dollar-denominated loans bear interest based on the Canadian Prime Rate or the Canadian Dollar Offered Rate plus a current applicable margin of 0.920% based on our Debt Ratings. As of December 31, 2024, $232 million was outstanding against the Canadian Sublimit, with an average interest rate of 5.309%.
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 $514 million and $297 million outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively. We had $317 million and $337 million of letters of credit outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively. We also had $477 million and $495 million of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of December 31, 2024 and 2023, respectively. As a result, availability under our Credit Facility was $2,192 million and $2,371 million as of December 31, 2024 and 2023, respectively.
Financial and Other Covenants
The Credit Facility requires us to comply with financial and other covenants. To the extent we are not in compliance with these covenants, we cannot pay dividends or repurchase common stock. Compliance with covenants also is a condition for any incremental borrowings under the Credit Facility, and failure to meet these covenants would enable the lenders to require repayment of any outstanding loans (which would adversely affect our liquidity). Additionally, if we are not in compliance with these covenants, we could not use the availability under our Credit Facility to fund borrowings we currently make under our commercial paper program, if there is a failed reborrowing under that program. The Credit Facility provides that our total debt to EBITDA ratio may not exceed 3.75 to 1.00 as of the last day of any fiscal quarter. In the case of an "elevated ratio period", which may be elected by us if one or more acquisitions during a fiscal quarter involve aggregate consideration in excess of $200.0 million (the Trigger Quarter), the total debt to EBITDA ratio may not exceed 4.25 to 1.00 during the Trigger Quarter and for the three fiscal quarters thereafter. The Credit Facility also provides that there may not be more than two elevated ratio periods during the term of the Credit Facility agreement. As of December 31, 2024, our total debt to EBITDA ratio was approximately 2.6 compared to the 3.75 maximum allowed. As of December 31, 2024, we were in compliance with all other covenants under our Credit Facility.
EBITDA, which is a non-U.S. GAAP measure, is calculated as defined in our Credit Facility agreement. In this context, EBITDA is used solely to provide information regarding the extent to which we are in compliance with debt covenants and is not comparable to EBITDA used by other companies or used by us for other purposes.
Failure to comply with the financial and other covenants under the Credit Facility, as well as the occurrence of certain material adverse events, would constitute defaults and would allow the lenders under the Credit Facility to accelerate the maturity of all
indebtedness under the Credit Facility. This could have an adverse effect on the availability of financial assurances. In addition, maturity acceleration on the Credit Facility constitutes an event of default under certain of our other debt and derivative instruments. If such acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness. We would likely have to seek an amendment under the Credit Facility for relief from the financial covenant or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary. We may be unable to amend the Credit Facility or raise sufficient capital to repay such obligations in the event the maturity is accelerated.
Term Loan Facility
On April 29, 2022, we entered into a $1 billion unsecured Term Loan Facility (Term Loan Facility), which bore interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings. We had $500 million of borrowings outstanding under the Term Loan Facility as of December 31, 2023. During the year ended December 31, 2024, we repaid the remaining balance of the Term Loan Facility.
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 million outstanding at any one time (the Commercial Paper Cap). In August 2022, the Commercial Paper Cap was increased to $1.0 billion, and in October 2023, was increased to $1.5 billion. The weighted average interest rate for borrowings outstanding as of December 31, 2024 was 4.646% with a weighted average maturity of approximately 18 days.
We had $477 million and $496 million principal value of commercial paper issued and outstanding under the program as of December 31, 2024 and 2023, respectively. In the event of a failed re-borrowing, we currently have availability under our Credit Facility (as defined above) to fund amounts currently borrowed under the commercial paper program until they are re-borrowed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2024 and 2023, respectively.
Senior Notes and Debentures
In March 2023, we issued $400 million of 4.875% senior notes due 2029 (the Existing 2029 Notes) and $800 million of 5.000% senior notes due 2034 (the 2034 Notes, and together with the Existing 2029 Notes, 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 less than $1 million.
In December 2023, we issued an additional $350 million of 4.875% senior notes due 2029 (the New 2029 Notes, and together with the Existing 2029 Notes, the 2029 Notes). After giving effect to the issuance of the New 2029 Notes, $750 million in aggregate principal amount of the 2029 Notes is outstanding. The New 2029 Notes are fungible with the Existing 2029 Notes, and taken together, the 2029 Notes are treated as a single series.
In December 2023, we also issued $650 million of 5.000% senior notes due 2033 (the 2033 Notes). The proceeds of the 2033 Notes were used 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.
In June 2024, we issued $400 million of 5.000% senior notes due 2029 and $500 million of 5.200% senior notes due 2034. We used the proceeds from the June 2024 notes issuance for general corporate purposes, including the repayment of a portion of amounts outstanding under the Commercial Paper Program and the Credit Facility; and repayment of the remaining amount outstanding under the Term Loan Facility and the Uncommitted Credit Facility.
Our senior notes and debentures are general unsecured obligations. Interest is payable semi-annually.
Tax-Exempt Financings
As of December 31, 2024, we had $1,409 million of certain variable rate tax-exempt financings outstanding, with maturities ranging from 2026 to 2053. As of December 31, 2023, we had $1,281 million of certain variable rate tax-exempt financings outstanding, with maturities ranging from 2024 to 2053.
Finance Leases and Other
As of December 31, 2024, we had finance lease liabilities of $315 million with maturities ranging from 2025 to 2063. As of December 31, 2023, we had finance lease liabilities of $251 million with maturities ranging from 2024 to 2063.
As of December 31, 2024, finance leases and other included $53 million related to the construction of an office building located in Phoenix, Arizona, which has been accounted for as a financing obligation. The amount is recorded within long-term debt, net of current maturities.
Credit Ratings
Our continued access to the debt capital markets and to new financing facilities, as well as our borrowing costs, depend on multiple factors, including market conditions, our operating performance and maintaining strong credit ratings. As of December 31, 2024, our credit ratings were BBB+, Baa1 and A- by Standard & Poor’s Ratings Services, Moody’s Investors Service and Fitch Ratings, Inc., respectively. If our credit ratings were downgraded, especially any downgrade to below investment grade, our ability to access the debt markets with the same flexibility that we have experienced historically, our cost of funds and other terms for new debt issuances could be adversely impacted.
Off-Balance Sheet Arrangements
We have no off-balance sheet debt or similar obligations, other than short-term operating leases and financial assurances, which are not classified as debt. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported financial position or results of operations. We have not guaranteed any third-party debt.
Seasonality and Severe Weather
Our operations can be adversely affected by periods of inclement or severe weather, which could increase the volume of waste collected under our existing contracts (without corresponding compensation), delay the collection and disposal of waste, reduce the volume of waste delivered to our disposal sites, or delay the construction or expansion of our landfills and other facilities. Our operations also can be favorably affected by severe weather, which could increase the volume of waste in situations where we are able to charge for our additional services.
Contingencies
For a description of our commitments and contingencies, see Note 8, Landfill and Environmental Costs, Note 11, Income Taxes and Note 19, Commitments and Contingencies, to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Financial Assurance
We must provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping, closure and post-closure costs, and related to our performance under certain collection, landfill and transfer station contracts. We satisfy these financial assurance requirements by providing surety bonds, letters of credit, or insurance policies (Financial Assurance Instruments), or trust deposits, which are included in restricted cash and marketable securities and other assets in our consolidated balance sheets. The amount of the financial assurance requirements for capping, closure and post-closure costs is determined by applicable state environmental regulations. The financial assurance requirements for capping, closure and post-closure costs may be associated with a portion of the landfill or the entire landfill. Generally, states require a third-party engineering specialist to determine the estimated capping, closure and post-closure costs that are used to determine the required amount of financial assurance for a landfill. The amount of financial assurance required can, and generally will, differ from the obligation determined and recorded under U.S. GAAP. The amount of the financial assurance requirements related to contract performance varies by contract. Additionally, we must provide financial assurance for our insurance program and collateral for certain performance obligations. We do not expect a material increase in financial assurance requirements during 2025, although the mix of Financial Assurance Instruments may change.
These Financial Assurance Instruments are issued in the normal course of business and are not classified as indebtedness. Because we currently have no liability for the Financial Assurance Instruments, they are not reflected in our consolidated balance sheets; however, we record capping, closure and post-closure liabilities and insurance liabilities as they are incurred.
Critical Accounting Judgments and Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP and necessarily include certain estimates and judgments made by management. The following is a list of accounting policies that we believe are the most critical in understanding our consolidated financial position, results of operations and cash flows and that may require management to make subjective or complex judgments about matters that are inherently uncertain. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that
we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Such critical accounting policies, estimates and judgments are applicable to all of our operating segments.
We have noted examples of the estimates that are subject to uncertainty in the accounting for these areas below.
Landfill Development Asset Depletion
Landfill depletion expense for the years ended December 31, 2024 and 2023 was $408 million and $379 million, respectively.
To match the expense related to the landfill asset with the revenue generated by the landfill operations, we amortize the landfill development asset over its operating life on a per-ton basis as waste is accepted at the landfill. The landfill asset is fully depleted at the end of a landfill’s operating life. The per-ton rate is calculated by dividing the sum of the landfill development asset net book value plus estimated future development costs for the landfill, by the landfill’s estimated remaining permitted and probable disposal capacity. The expected future development costs are not inflated or discounted, but rather expressed in nominal dollars. This rate is applied to each ton accepted at the landfill to arrive at depletion expense for the period.
The calculation of depletion expense includes certain estimates and assumptions around future landfill development costs and remaining permitted and probable landfill disposal capacity. Changes in these estimates are subject to uncertainty attributable to the following factors: (i) actual future costs of construction materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor, and (ii) technical designs could be altered due to unexpected operating conditions, regulatory changes or legislative changes.
On at least an annual basis, we update the estimates of future development costs and remaining disposal capacity for each landfill. These costs and disposal capacity estimates are reviewed and approved by senior operations management annually. Changes in cost estimates and disposal capacity are reflected prospectively in the landfill depletion rates that are updated annually.
Landfill Asset Retirement Obligations
We have two types of retirement obligations related to landfills: (1) capping and (2) closure and post-closure. As of December 31, 2024 and 2023, our asset retirement obligations related to capping, closure and post-closure were $2,144 million and $1,937 million, respectively. Changes in these estimates may be sensitive to the following factors: (i) changes to environmental laws and regulations and/or circumstances affecting our operations could result in a significant change to our estimates, which could have a significant impact on our result of operations, (ii) we do not expect to incur most of these costs for a number of years, which requires us to estimate the timing of projected cash flows and make assumptions regarding inflation rates, and (iii) actual future costs of materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor.
Obligations associated with final capping activities that occur during the operating life of the landfill are recognized on a units-of-consumption basis as airspace is consumed within each discrete capping event. Obligations related to closure and post-closure activities that occur after the landfill has ceased operations are recognized on a units-of-consumption basis as airspace is consumed throughout the entire life of the landfill. Landfill retirement obligations are capitalized as the related liabilities are recognized and amortized using the units-of-consumption method over the airspace consumed within the capping event or the airspace consumed within the entire landfill, depending on the nature of the obligation. Landfill amortization expense for the years ended December 31, 2024 and 2023 was $106 million and $92 million, respectively. All obligations are initially measured at estimated fair value. Fair value is calculated on a present value basis using an inflation rate and our credit-adjusted, risk-free rate in effect at the time the liabilities were incurred. Future costs for final capping, closure and post-closure are developed at least annually by engineers, and are inflated to future value using estimated future payment dates and inflation rate projections.
Landfill capping. As individual areas within each landfill reach capacity, we must cap and close the areas in accordance with the landfill site permit. These requirements are detailed in each landfill's technical design, which is reviewed and approved by the regulatory agency issuing the landfill site permit.
Closure and post-closure. Closure costs are costs incurred after a landfill stops receiving waste, but prior to being certified as closed. After the entire landfill has reached capacity and is certified closed, we must continue to maintain and monitor the site for a post-closure period, which generally extends for 30 years. Costs associated with closure and post-closure requirements generally include maintenance of the site, the monitoring of methane gas collection systems and groundwater systems and other activities that occur after the site has ceased accepting waste. Costs associated with post-closure monitoring generally include groundwater sampling, analysis and statistical reports, third-party labor associated with gas system operations and maintenance and transportation and disposal of leachate.
Landfill retirement obligation liabilities and assets. Estimates of the total future costs required to cap, close and monitor each landfill as specified by the landfill permit are updated annually. The estimates include inflation, the specific timing of future cash outflows and the anticipated waste flow into the capping events. Our cost estimates are inflated to the period of
performance using an estimated inflation rate, which is updated annually. For 2024, our estimated inflation rate of 2.0% is based on the twenty year average core consumer price index and for 2023, our estimated inflation rate of 2.0% was based on the ten year average consumer price index.
The present value of the remaining capping costs for specific capping events and the remaining closure and post-closure costs for each landfill are recorded as incurred on a per-ton basis. These liabilities are incurred as disposal capacity is consumed at the landfill.
Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that was used to calculate each layer of the recorded liabilities. This accretion is charged to operating expenses. Actual cash expenditures reduce the asset retirement obligation liabilities as they are made.
Corresponding retirement obligation assets are recorded for the same value as the additions to the capping, closure and post-closure liabilities. The retirement obligation assets are amortized to expense on a per-ton basis as disposal capacity is consumed. The per-ton rate is calculated by dividing the sum of each of the recorded retirement obligation asset’s net book value and expected future additions to the retirement obligation asset by the remaining disposal capacity. A per-ton rate is determined for each separate capping event based on the disposal capacity relating to that event. Closure and post-closure per-ton rates are based on the total disposal capacity of the landfill.
Changes in these estimates may be sensitive to the following factors: (1) changes to environmental laws and regulations and/or circumstances affecting our operations could result in a significant change to our estimates, which could have a significant impact on our result of operations, (ii) we do not expect to incur most of these costs for a number of years, which requires us to estimate the timing of projected cash flows and make assumptions regarding inflation rates, and (iii) actual future costs of materials and third-party labor could differ from the costs we have estimated because of the level of demand and the availability of the required materials and labor.
On an annual basis, we update our estimates of future capping, closure and post-closure costs and of future disposal capacity for each landfill. Revisions in estimates of our costs or timing of expenditures are recognized immediately as increases or decreases to the capping, closure and post-closure liabilities and the corresponding retirement obligation assets. Changes in the assets result in changes to the amortization rates which are applied prospectively, except for fully incurred capping events and closed landfills, where the changes are recorded immediately in results of operations since the associated disposal capacity has already been consumed.
Total landfill depletion and amortization expense for the years ended December 31, 2024 and 2023 was $514 million and $471 million, respectively. See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on changes to our landfill depletion and amortization.
Environmental Liabilities
We are subject to an array of laws and regulations relating to the protection of the environment, and we remediate sites in the ordinary course of our business. Under current laws and regulations, we may be responsible for environmental remediation at sites that we either own or operate, including sites that we have acquired, or sites where we have (or a company that we have acquired has) delivered waste. Our environmental remediation liabilities primarily include costs associated with remediating groundwater, surface water and soil contamination, as well as controlling and containing methane gas migration. To estimate our ultimate liability at these sites, we evaluate several factors, including the nature and extent of contamination at each identified site, the required remediation methods, timing of expenditures, the apportionment of responsibility among the potentially responsible parties and the financial viability of those parties.
We accrue for costs associated with environmental remediation obligations when such costs are probable and reasonably estimable in accordance with accounting for loss contingencies. We periodically review the status of all environmental matters and update our estimates of the likelihood of and future expenditures for remediation as necessary. Changes in the liabilities resulting from these reviews are recognized currently in earnings in the period in which the adjustment is known. Adjustments to estimates are reasonably possible in the near term and may result in changes to recorded amounts. With the exception of those obligations assumed in certain business combinations, environmental obligations are recorded on an undiscounted basis. Environmental obligations assumed in certain business combinations are initially estimated on a discounted basis, and accreted to full value over time through charges to interest expense. Adjustments arising from changes in amounts and timing of estimated costs and settlements may result in increases or decreases in these obligations and are calculated on a discounted basis as they were initially estimated on a discounted basis. These adjustments are charged to operating income when they are known. We perform a comprehensive review of our environmental obligations annually and also review changes in facts and circumstances associated with these obligations at least quarterly. See our Results of Operations section in this Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion on our remediation adjustments. We have not reduced the liabilities we have recorded for recoveries from other potentially responsible parties or insurance companies.
As of December 31, 2024 and 2023, we had $447 million and $485 million of environmental liabilities, respectively. Changes in these estimates may be sensitive to changes in cost estimates, timing of estimated costs and settlements, inflation and applicable regulations. Our estimates of these liabilities require assumptions about uncertain future events, which may change the ultimate amounts of our environmental remediation liabilities. Thus, our estimates could change substantially as additional information becomes available regarding the nature or extent of contamination, the required remediation methods, timing of expenditures, the final apportionment of responsibility among the potentially responsible parties identified, the financial viability of those parties and the actions of governmental agencies or private parties with interests in the matter. The actual environmental costs may exceed our current and future accruals for these costs, and any adjustments could be material.
New Accounting Standards
For a description of new accounting standards that may affect us, see Note 2, Summary of Significant Accounting Policies, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our major market risk exposure of our financial instruments is changing interest rates in the United States and fluctuations in SOFR. We intend to manage interest rate risk through the use of a combination of fixed and floating rate debt. The carrying value of our variable rate debt approximates fair value because interest rates are variable and, accordingly, approximates current market rates for instruments with similar risk and maturities. The fair value of our debt is determined as of the balance sheet date and is subject to change. We have historically entered into multiple swap agreements designated as cash flow hedges to manage exposure to fluctuations in interest rates on our variable rate debt.
The table below provides information about certain of our market-sensitive financial instruments and constitutes a forward-looking statement. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Expected Maturity Date | | | | |
| | 2025 | | 2026 | | 2027 | | 2028 | | 2029 | | Thereafter | | Total | | Fair Value as of December 31, 2024 |
| Fixed rate debt: | | | | | | | | | | | | | | | |
| Amount outstanding (in millions) | $ | 863 | | | $ | 512 | | | $ | 663 | | | $ | 814 | | | $ | 1,163 | | | $ | 6,666 | | | $ | 10,681 | | | $ | 10,029 | |
| Variable rate debt: | | | | | | | | | | | | | | | |
| Amount outstanding (in millions) | $ | — | | | $ | 82 | | | $ | — | | | $ | 30 | | | $ | 1,016 | | | $ | 1,032 | | | $ | 2,160 | | | $ | 2,152 | |
The fixed and variable rate debt amounts above exclude the remaining non-cash discounts, premiums and adjustments to fair value totaling $127 million.
As of December 31, 2024, we had $2,160 million of principal floating rate debt. If interest rates increased or decreased by 100 basis points on our variable rate debt, annualized interest expense and net cash payments for interest would increase or decrease by approximately $22 million. This analysis does not reflect the effect that interest rates would have on other items, such as new borrowings and the impact on the economy. See Note 9, Debt, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Form 10-K for further information regarding how we manage interest rate risk.
Fuel Price Risk
Fuel costs represent a significant operating expense. When economically practical, we may enter into new fuel hedges, renew contracts, or engage in other strategies to mitigate market risk. As of December 31, 2024, we had no fuel hedges in place. While we charge fuel recovery fees to a majority of our customers, we are unable to charge such fees to all customers.
At current consumption levels, we believe a twenty-cent per gallon change in the price of diesel fuel would change our fuel costs by approximately $27 million per year. Offsetting these changes in fuel expense would result in changes in our fuel recovery fee charged to our customers. At current participation rates, we believe a twenty-cent per gallon change in the price of diesel fuel would change our fuel recovery fee by approximately $38 million per year.
Our operations also require the use of certain petrochemical-based products (such as liners at our landfills) the cost of which may vary with the price of petrochemicals. An increase in the price of petrochemicals could increase the cost of those products,
which would increase our operating and capital costs. We also are susceptible to increases in fuel recovery fees from our vendors.
Our fuel costs were $470 million during 2024, or 3% of revenue, compared to $542 million, or 4% of revenue, during 2023.
Commodities Price Risk
We market recovered materials such as old corrugated containers and old newsprint from our recycling centers. Changes in market supply and demand for recycled commodities causes volatility in commodity prices. In prior periods, we have entered into derivative instruments such as swaps and costless collars designated as cash flow hedges to manage our exposure to changes in prices of these commodities. As of December 31, 2024, we had no recycling commodity hedges in place.
At current volumes and mix of materials, we believe a $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $11 million.
Revenue from recycling processing and commodity sales during the years ended December 31, 2024 and 2023 was $409 million and $312 million, respectively.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | | | | | |
| |
| |
Consolidated Balance Sheets as of December 31, 2024 and 2023 | |
| |
Consolidated Statements of Comprehensive Income for Each of the Three Years in the Period Ended December 31, 2024 | |
Consolidated Statements of Stockholders' Equity for Each of the Three Years in the Period Ended December 31, 2024 | |
Consolidated Statements of Cash Flows for Each of the Three Years in the Period Ended December 31, 2024 | |
| |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Republic Services, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Republic Services, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 13, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. | | | | | | | | |
| | |
| | Landfill Development Asset Depletion |
Description of the Matter | | Landfill development asset depletion expense for the year ended December 31, 2024 was $408 million As discussed in Note 2, management updates the assumptions used to estimate the landfill development asset depletion expense at least annually, or more often if there is a significant change in facts and circumstances related to a landfill. Significant assumptions used in the calculation of the expense include estimated future development costs and available disposal capacity. |
| | | | | | | | |
| | Auditing landfill development asset depletion expense is complex due to the highly judgmental nature of the significant assumptions, as discussed above, used in the calculation of the expense. |
How We Addressed the Matter in Our Audit | | We obtained an understanding of, evaluated the design, and tested the operating effectiveness of the Company’s controls over landfill development asset depletion expense. Our audit procedures included, among others, testing controls over the Company’s process for evaluating and updating the significant assumptions used in the calculation of landfill development asset depletion expense and the accuracy of depletion expense recorded. |
| | To test the landfill development asset depletion expense, our audit procedures included, among others, assessing methodologies and testing the significant assumptions discussed above. To test the future development costs, we compared the estimated costs used by management to comparable landfills accepting the same type of waste. We also tested the completeness and accuracy of the data utilized in the development of depletion expense. Regarding disposal capacity, we evaluated the Company’s annual utilization and estimation of the landfill disposal capacity through a comparison of airspace to historical estimates and annual aerial surveys. In addition, we considered the professional qualifications and objectivity of management’s specialist responsible for performing the aerial surveys. We involved EY engineering specialists to assist us with evaluating estimated future development costs. |
| | |
| | Landfill Final Capping, Closure and Post-Closure Costs |
Description of the Matter | | At December 31, 2024, the carrying value of the Company’s landfill final capping, closure and post-closure costs totaled $ million. As discussed in Notes 2 and 8 of the consolidated financial statements, management updates the assumptions used to estimate the asset retirement obligations at least annually, or more often if there is a significant change in facts and circumstances related to a landfill. These assumptions include estimated future costs associated with the final capping, closure and post-closure activities at each landfill, projected timing of capping, and estimated inflation rate. |
| | Auditing the landfill asset retirement obligations is complex due to the highly judgmental nature of the significant assumptions, as discussed above, used in the calculation of the asset retirement obligations. |
How We Addressed the Matter in Our Audit | | We obtained an understanding of, evaluated the design, and tested the operating effectiveness of the Company’s controls over the calculation of asset retirement obligations. Our procedures included, among others, testing controls over the Company’s process for evaluating and updating the significant assumptions used in the calculation of the landfill asset retirement obligations and the accuracy of the asset retirement obligations recorded. |
| | To test the landfill asset retirement obligations, our audit procedures included, among others, assessing methodologies used by the Company, testing the completeness of activities included in the estimate and testing the significant assumptions discussed above. To test the estimated future costs, we compared the estimated future costs used by management to comparable landfills accepting the same type of waste. We also tested the completeness and accuracy of the data utilized in preparing the cost estimate. Regarding the projected timing of capping assumption, we evaluated the Company’s annual utilization and estimation of the landfill disposal capacity through a comparison of airspace to historical estimates and annual aerial surveys. We also performed a sensitivity analysis of the inflation rate assumption. In addition, we considered the professional qualifications and objectivity of management’s specialist responsible for performing the aerial surveys. We involved EY engineering specialists to assist us with evaluating assumptions used in estimated costs for the capping, closure and post-closure activities. |
/s/
We have served as the Company’s auditor since 2002.
February 13, 2025
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Republic Services, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Republic Services, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Republic Services, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 13, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Republic Services, Inc.’s Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Phoenix, Arizona
February 13, 2025
REPUBLIC SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data) | | | | | | | | | | | |
| December 31, 2024 | | December 31, 2023 |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | | | | $ | | |
Accounts receivable, less allowance for doubtful accounts and other of $ and $, respectively | | | | | |
| Prepaid expenses and other current assets | | | | | |
|
| Total current assets | | | | | |
| Restricted cash and marketable securities | | | | | |
| Property and equipment, net | | | | | |
| Goodwill | | | | | |
| Other intangible assets, net | | | | | |
| Other assets | | | | | |
| Total assets | $ | | | | $ | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current liabilities: | | | |
| Accounts payable | $ | | | | $ | | |
| Notes payable and current maturities of long-term debt | | | | | |
| Deferred revenue | | | | | |
| Accrued landfill and environmental costs, current portion | | | | | |
| Accrued interest | | | | | |
| Other accrued liabilities | | | | | |
| Total current liabilities | | | | | |
| Long-term debt, net of current maturities | | | | | |
| Accrued landfill and environmental costs, net of current portion | | | | | |
| Deferred income taxes and other long-term tax liabilities, net | | | | | |
| Insurance reserves, net of current portion | | | | | |
| Other long-term liabilities | | | | | |
| Commitments and contingencies | | | |
| Stockholders’ equity: | | | |
Preferred stock, par value $ per share; shares authorized; issued | | | | | |
Common stock, par value $ per share; shares authorized; and issued including shares held in treasury, respectively | | | | | |
| Additional paid-in capital | | | | | |
| Retained earnings | | | | | |
Treasury stock, at cost; and shares, respectively | () | | | () | |
| Accumulated other comprehensive income, net of tax | () | | | () | |
| Total Republic Services, Inc. stockholders’ equity | | | | | |
| Non-controlling interests in consolidated subsidiary | | | | | |
| Total stockholders’ equity | | | | | |
| Total liabilities and stockholders’ equity | $ | | | | $ | | |
The accompanying notes are an integral part of these financial statements.
REPUBLIC SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data) | | | | | | | | | | | | | | | | | |
| | Years Ended December 31, |
| | 2024 | | 2023 | | 2022 |
| Revenue | $ | | | | $ | | | | $ | | |
| Expenses: | | | | | |
| Cost of operations | | | | | | | | |
| Depreciation, depletion and amortization | | | | | | | | |
| Accretion | | | | | | | | |
| Selling, general and administrative | | | | | | | | |
Adjustment to withdrawal liability for multiemployer pension funds | | | | | | | () | |
| Gain on business divestitures and impairments, net | () | | | () | | | () | |
| Restructuring charges | | | | | | | | |
| Operating income | | | | | | | | |
| Interest expense | () | | | () | | | () | |
| Loss from unconsolidated equity method investments | () | | | () | | | () | |
| Loss on extinguishment of debt | () | | | | | | | |
| Interest income | | | | | | | | |
| Other income (expense), net | | | | | | | () | |
| Income before income taxes | | | | | | | | |
| Provision for income taxes | | | | | | | | |
| Net income | | | | | | | | |
Net income attributable to non-controlling interests in consolidated subsidiary | () | | | | | | | |
| Net income attributable to Republic Services, Inc. | $ | | | | $ | | | | $ | | |
| Basic earnings per share attributable to Republic Services, Inc. stockholders: | | | | | |
| Basic earnings per share | $ | | | | $ | | | | $ | | |
| Weighted average common shares outstanding | | | | | | | | |
| Diluted earnings per share attributable to Republic Services, Inc. stockholders: | | | | | |
| Diluted earnings per share | $ | | | | $ | | | | $ | | |
| Weighted average common and common equivalent shares outstanding | | | | | | | | |
| Cash dividends per common share | $ | | | | $ | | | | $ | | |
The accompanying notes are an integral part of these financial statements.
REPUBLIC SERVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
| | | | | | | | | | | | | | | | | |
| | Years Ended December 31, |
| | 2024 | | 2023 | | 2022 |
| Net income | $ | | | | $ | | | | $ | | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Other comprehensive (income) loss, net of tax | () | | | | | | | |
| Comprehensive income | | | | | | | | |
| Comprehensive income attributable to non-controlling interests | () | | | | | | | |
| Comprehensive income attributable to Republic Services, Inc. | $ | | | | $ | | | | $ | | |
The accompanying notes are an integral part of these financial statements.
REPUBLIC SERVICES, INC.
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 Income, Net of Tax | | Non-controlling Interests In Consolidated Subsidiary | | Total |
| | Shares | | Amount | | | | Shares | | Amount | | |
Balance as of December 31, 2021 | | | | $ | | | | $ | | | | $ | | | | () | | | $ | () | | | $ | () | | | $ | | | | $ | | |
| |
| Net income | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | | | | |
| Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| |
| |
| |
| Cash dividends declared | — | | | — | | | — | | | () | | | — | | | — | | | — | | | — | | | () | |
| Issuances of common stock | | | | — | | | | | | — | | | — | | | () | | | — | | | — | | | () | |
| Stock-based compensation | — | | | — | | | | | | () | | | — | | | — | | | — | | | — | | | | |
Purchase of common stock for treasury | — | | | — | | | — | | | — | | | () | | | () | | | — | | | — | | | () | |
| Purchase of minority interest | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Distributions paid | — | | | — | | | () | | | — | | | — | | | — | | | — | | | — | | | () | |
Balance as of December 31, 2022 | | | | | | | | | | | | | () | | | () | | | () | | | | | | | |
| |
| Net income | — | | | — | | | — | | | | | | — | | | — | | | — | | | — | | | | |
| Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| |
| |
| |
| Cash dividends declared | — | | | — | | | — | | | () | | | — | | | — | | | — | | | — | | | () | |
| Issuances of common stock | — | | | — | | | | | | — | | | — | | | () | | | — | | | — | | | () | |
| Stock-based compensation | — | | | — | | | | | | () | | | — | | | — | | | — | | | — | | | | |
Purchase of common stock for treasury | — | | | — | | | — | | | — | | | () | | | () | | | — | | | — | | | () | |
| |
Distributions paid | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Balance as of December 31, 2023 | | | | | | | | | | | | | () | | | () | | | () | | | | | | | |
| |
| Net income | — | | | — | | | — | | | | | | — | | | — | | | — | | | | | | | |
| Other comprehensive (loss) income | — | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| |
| |
| |
| Cash dividends declared | — | | | — | | | — | | | () | | | — | | | — | | | — | | | — | | | () | |
| Issuances of common stock | — | | | — | | | | | | — | | | — | | | () | | | — | | | — | | | () | |
| Stock-based compensation | — | | | — | | | | | | () | | | — | | | — | | | — | | | — | | | | |
Purchase of common stock for treasury | — | | | — | | | — | | | — | | | () | | | () | | | — | | | — | | | () | |
| Shares returned to unissued status | () | | | — | | | () | | | — | | | | | | | | | — | | | — | | | | |
Distributions paid | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Balance as of December 31, 2024 | | | | $ | | | | $ | | | | $ | | | | () | | | $ | () | | | $ | () | | | $ | | | | $ | | |
The accompanying notes are an integral part of these financial statements.
REPUBLIC SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) | | | | | | | | | | | | | | | | | |
| | Years Ended December 31, |
| | 2024 | | 2023 | | 2022 |
| Cash provided by operating activities: | | | | | |
| Net income | $ | | | | $ | | | | $ | | |
| Adjustments to reconcile net income to cash provided by operating activities: | | | | | |
| Depreciation, depletion, amortization and accretion | | | | | | | | |
| Non-cash interest expense | | | | | | | | |
| Stock-based compensation | | | | | | | | |
| Deferred tax provision (benefit) | | | | | | | | |
| Provision for doubtful accounts, net of adjustments | | | | | | | | |
| Loss on extinguishment of debt | | | | | | | | |
| (Gain) loss on disposition of assets and asset impairments, net | () | | | () | | | () | |
| |
| Environmental adjustments | | | | | | | | |
| Loss from unconsolidated equity method investments | | | | | | | | |
| Other non-cash items | () | | | () | | | | |
Change in assets and liabilities, net of effects from business acquisitions and divestitures: | | | | | |
| Accounts receivable | () | | | () | | | () | |
| Prepaid expenses and other assets | () | | | () | | | () | |
| Accounts payable | () | | | | | | | |
| |
| Capping, closure and post-closure expenditures | () | | | () | | | () | |
| Remediation expenditures | () | | | () | | | () | |
| Other liabilities | | | | | | | | |
| Payments from retirement of certain hedging relationships | | | | | | | | |
| Cash provided by operating activities | | | | | | | | |
| Cash used in investing activities: | | | | | |
| Purchases of property and equipment | () | | | () | | | () | |
| Proceeds from sales of property and equipment | | | | | | | | |
| Cash used in acquisitions and investments, net of cash and restricted cash acquired | () | | | () | | | () | |
| Cash received from business divestitures | | | | | | | | |
| Purchases of restricted marketable securities | () | | | () | | | () | |
| Sales of restricted marketable securities | | | | | | | | |
| Other | | | | | | | () | |
| Cash used in investing activities | () | | | () | | | () | |
| Cash provided by (used in) financing activities: | | | | | |
| Proceeds from credit facilities and notes payable, net of fees | | | | | | | | |
| Proceeds from issuance of senior notes, net of discount and fees | | | | | | | | |
| Payments of credit facilities and notes payable | () | | | () | | | () | |
| |
| Issuances of common stock, net | () | | | () | | | () | |
| Purchases of common stock for treasury | () | | | () | | | () | |
| Cash dividends paid | () | | | () | | | () | |
| Distributions paid to non-controlling interests in consolidated subsidiary | | | | | | | () | |
| Contingent consideration payments | () | | | () | | | () | |
| Cash provided by (used in) financing activities | () | | | | | | | |
| Effect of foreign exchange rate changes on cash | () | | | | | | () | |
| Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | () | | | | | | | |
| Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year | | | | | | | | |
| Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year | $ | | | | $ | | | | $ | | |
The accompanying notes are an integral part of these financial statements.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
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 provide integrated environmental services, including but not limited to collection, transfer, recycling, and disposal. The 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.
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.
2.
As of December 31, 2024 and 2023, there were net book credit balances of $ million and $ million, respectively, in our primary disbursement accounts that were classified as accounts payable on our consolidated balance sheets.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | Additions charged to expense | | | | | | | | |
| Accounts written-off | () | | | () | | | () | |
| Balance at end of year | $ | | | | $ | | | | $ | | |
| | million and $ million, respectively, of restricted cash and marketable securities, of which $ million and $ million, respectively, supports our insurance programs for workers' compensation, commercial general liability and commercial auto liability. Additionally, we obtain funds through the issuance of tax-exempt bonds for the purpose of financing qualifying expenditures at our landfills, transfer stations, collection and recycling centers. The funds are deposited directly into trust accounts by the bonding authorities at the time of issuance. As the use of these funds is contractually restricted, and we do not have the ability to use these funds for general operating purposes, they are classified as restricted cash and marketable securities in our consolidated balance sheets.In the normal course of business, we may be required to provide financial assurance to governmental agencies and a variety of other entities in connection with, among other things, municipal residential collection contracts, closure or post-closure of landfills, environmental remediation, environmental permits and business licenses and permits as a financial guarantee of our performance. At several of our landfills, we satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts.
- years
| Vehicles | - years |
| Landfill equipment | - years |
| Other equipment | - years |
| Furniture and fixtures | - years |
Landfill development costs also are included in property and equipment. Landfill development costs include direct costs incurred to obtain landfill permits and direct costs incurred to acquire, construct and develop sites, as well as final capping,
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest capitalized was $ million for the year ended December 31, 2024, $ million for the year ended December 31, 2023 and $ million for the year ended December 31, 2022.
See Note 18, Financial Instruments, for fair value disclosures related to our financial instruments.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Estimated future expenditures
Estimates of future expenditures for final capping, closure and post-closure are developed at least annually by engineers. Management reviews these estimates and our operating and accounting personnel use them to adjust the rates used to capitalize and amortize these costs. These estimates involve projections of costs that will be incurred during the remaining life of the landfill for final capping activities, after the landfill ceases operations and during the legally required post-closure monitoring period. As of December 31, 2024, we had closed landfills.
Fair value measurements
In general, we engage third parties to perform most of our final capping, closure and post-closure activities. Accordingly, the fair value of these activities is based on quoted and actual prices paid for similar work. We also perform some of our final capping, closure and post-closure activities using internal resources. Where we expect internal resources to be used to fulfill an asset retirement obligation, we add a profit margin to the estimated cost of such services to better reflect their fair value. If we perform these services internally, the added profit margin is recognized as a component of operating income in the period the obligation is settled.
Our estimates of costs to discharge asset retirement obligations for landfills are developed in today’s dollars. These costs are inflated each year to reflect a normal escalation of prices up to the year they are expected to be paid. Our inflation rate was % for the year ended December 31, 2024, which was primarily based on the historical moving average increase of the United States Core Consumer Price Index. Our inflation rate was % for each of the years ended December 31, 2023 and 2022, which was primarily based on the historical moving average increase of the United States Consumer Price Index. These estimated costs are then discounted to their present values using a credit-adjusted, risk-free interest rate.
Changes in assets retirement obligations
A liability for an asset retirement obligation is recognized in the period in which it is incurred and is initially measured at fair value. The offset to the liability is capitalized as part of the carrying amount of the related long-lived asset. Changes in the liabilities due to revisions to estimated future cash flows are recognized by increasing or decreasing the liabilities with the offsets adjusting the carrying amounts of the related long-lived assets, and may also require immediate adjustments to amortization expense in the consolidated statements of income. Upward revisions in the amount of undiscounted estimated cash flows used to record a liability are discounted using the credit-adjusted, risk-free interest rate in effect at the time of the change. Downward revisions in the amount of undiscounted estimated cash flows used to record a liability are discounted using the credit-adjusted, risk-free rate that existed when the original liability was recognized.
Changes in asset retirement obligations due to the passage of time are measured by recognizing accretion expense in a manner that results in a constant effective interest rate being applied to the average carrying amount of the liability. The effective interest rate used to calculate accretion expense is our credit-adjusted, risk-free interest rate in effect at the time the liabilities were recorded.
We review our calculations with respect to landfill asset retirement obligations at least annually. If there is a significant change in the facts and circumstances related to a landfill during the year, we will review our calculations for the landfill as soon as practical after the change has occurred.
Landfill operating expenses
Costs associated with daily maintenance activities and environmental compliance during the operating life of the landfill are expensed as incurred. These costs include, among other things, leachate treatment and disposal, methane gas and groundwater monitoring and systems maintenance, interim cap maintenance, costs associated with the application of daily cover materials and the legal and administrative costs of ongoing environmental compliance.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We may use both qualitative and quantitative approaches when testing goodwill for impairment. If, after assessing qualitative factors, we determine it is more likely than not that a reporting unit's goodwill is impaired, then we perform a quantitative test for that reporting unit. The quantitative impairment test for goodwill encompasses calculating a fair value of goodwill and comparing the fair value to its carrying value. If the carrying value exceeds the fair value, impairment is recognized for the difference.
As of October 1, 2024, we performed a qualitative assessment to evaluate circumstances and events impacting our reporting units to determine the likelihood of goodwill impairment. Examples of such events or circumstances include: (1) a significant adverse change in legal factors or in the business climate; (2) an adverse action or assessment by a regulator; (3) a more likely than not expectation that a reporting unit or a significant portion thereof will be sold; (4) continued or sustained losses at a reporting unit; (5) a significant decline in our market capitalization as compared to our book value; or (6) we conclude that we may not recover a significant asset group within the reporting unit. We determined it was more likely than not that the fair values of our reporting units exceeded their carrying amounts. impairment losses were recorded for goodwill during the years ended December 31, 2024, 2023 or 2022.
Other intangible assets include values assigned to customer relationships, non-compete agreements and trade names and are amortized generally on a straight-line basis over periods ranging from to years.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
impairment losses were recorded for long-lived assets during the years ended December 31, 2024, 2023 or 2022.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3.
and $, respectively$ | | | | $ | | | |
| Holdbacks | | | | | |
| Fair value, future minimum lease payments | | | | | |
|
| Total | $ | | | | $ | | |
| Allocated as follows: | | | |
|
Accounts receivable | | | | | |
| Prepaid expenses | | | | | |
Landfill development costs | | | | | |
Property and equipment | | | | | |
Operating right-of-use lease assets | | | | | |
|
|
|
Parts and supplies | | | | | |
Accounts payable | | | | () | |
Deferred revenue | () | | | () | |
Environmental remediation liabilities | | | | () | |
Closure and post-closure liabilities | | | | () | |
Operating right-of-use lease liabilities | () | | | () | |
| Deferred income tax liabilities | () | | | () | |
Other liabilities | () | | | () | |
| Fair value of tangible assets acquired and liabilities assumed | | | | | |
| Excess purchase price to be allocated | $ | | | | $ | | |
| Excess purchase price allocated as follows: | | | |
Other intangible assets | $ | | | | $ | | |
Goodwill | | | | | |
|
| Total allocated | $ | | | | $ | | |
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 2024, 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.
In February 2025, we acquired all of the issued and outstanding shares of COP Shamrock Parent, Inc. (Shamrock). Shamrock is a leading provider of environmental solutions offering industrial waste and wastewater treatment services. Shamrock’s environmental solutions operations are primarily located in the northeastern and southeastern United States and provide us with a platform to pursue additional growth in our environmental solutions line of business.
As of February 13, 2025, we paid approximately $ million for acquisitions that closed through that date.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In 2024, we acquired a non-controlling equity interest in a joint venture with a landfill gas-to-energy developer to construct a number of renewable natural gas projects at certain of our landfill locations in Illinois. During the year ended December 31, 2024, we invested $ million in the joint venture. Additionally, our tax provision reflects a benefit of approximately $ million for the year ended December 31, 2024 related to these qualified investments in renewable natural gas projects. This investment is an unconsolidated variable interest entity (VIE) for which we do not have the power to direct the significant activities of the business, and it is accounted for under the equity method of accounting. Our risk of loss is materially consistent with our contributions to-date.
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 services offerings in Canada. During the year ended December 31, 2024 we invested $ million in the joint venture. The investment is accounted for under the equity method of accounting.
In 2022, we acquired a non-controlling equity interest in a joint venture with a landfill gas-to-energy developer to construct a number of renewable natural gas projects at our landfills across the United States. Certain of these investments qualified for investment tax credits under Section 48 of the Internal Revenue Code. As of December 31, 2024 and 2023, we had invested approximately $ million and $ million, respectively, in the joint venture. During the years ended December 31, 2024, 2023 and 2022, we contributed $ million, $ million and $ million, respectively, in the joint venture. Additionally, our tax provision reflects a benefit of approximately $ million for the year ended December 31, 2024 related to these qualified investments in renewable natural gas projects. The investment is accounted for under the equity method of accounting.
In 2022, we acquired a non-controlling equity interest in a joint venture with Ravago, Blue Polymers, LLC, intended to help create vertical integration in the recycling market, and to further advance circularity by acquiring all olefins produced by the Company's Polymer Centers and produce custom blended pellets for food-grade and non-food-grade packaging. As of December 31, 2024 and 2023, we had invested approximately $ million and $ million, respectively, in the joint venture. During the years ended December 31, 2024, 2023 and 2022, we contributed $ million, $ million and $ million, respectively, in the joint venture. This investment is an unconsolidated variable interest entity (VIE) for which we do not have the power to direct the significant activities of the business, and it is accounted for under the equity method of accounting. Our risk of loss is materially consistent with our contributions to-date.
Restructuring Charges
In 2024, 2023 and 2022 we incurred restructuring charges of $ million, $ million, $ million, respectively. The 2024 charges primarily related to the redesign of our asset management, and customer and order management software systems. Of the 2023 charges, $ million related to early termination of certain leases and $ million related to the redesign of our asset management, and customer and order management software systems. The 2022 charges primarily related to the redesign of our general ledger, budgeting and procurement enterprise resource planning systems. We paid $ million, $ million, and $ million during 2024, 2023 and 2022, respectively, related to these restructuring efforts.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4.
| | $ | | | | Landfill development costs | | | | | |
| Vehicles and equipment | | | | | |
| Buildings and improvements | | | | | |
Construction-in-progress – landfill | | | | | |
Construction-in-progress – other | | | | | |
| $ | | | | $ | | |
| Less: accumulated depreciation, depletion and amortization | | | |
| Landfill development costs | $ | () | | | $ | () | |
| Vehicles and equipment | () | | | () | |
| Buildings and improvements | () | | | () | |
| () | | | () | |
| Property and equipment, net | $ | | | | $ | | |
Depreciation, depletion and amortization of property and equipment was $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively.
5.
| | $ | | | | $ | | | | $ | | | | $ | | | | Group 2 | | | | | | | | | | () | | | | |
| Group 3 | | | | | | | | | | () | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Balance as of December 31, 2022 | | Acquisitions | | Divestitures | | Adjustments
and Other | | Balance as of December 31, 2023 |
| Group 1 | $ | | | | $ | | | | $ | | | | $ | () | | | $ | | |
| Group 2 | | | | | | | () | | | | | | | |
| Group 3 | | | | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
Adjustments to acquisitions during the year ended December 31, 2024 primarily related to changes in our valuation of property, plant and equipment and customer list intangible assets acquired as a result of obtaining new information regarding the acquisitions that closed in 2023. Adjustments to acquisitions during the year ended December 31, 2023 primarily related to changes in our valuation of tangible assets acquired and certain environmental liabilities assumed in connection with our acquisition of US Ecology.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | | | | |
Other intangible assets | | | | | | | | | | | | | () | | | () | | | | | | () | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | | |
| | $ | | | | $ | () | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | | | | |
Other intangible assets | | | | | | | () | | | | | | () | | | () | | | | | | () | | | | |
| Total | $ | | | | $ | | | | $ | () | | | $ | | | | $ | () | | | $ | () | | | $ | | | | $ | () | | | $ | | |
| | 2026 | $ | | |
| 2027 | $ | | |
| 2028 | $ | | |
| 2029 | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6.
| | $ | | | | Income taxes receivable | | | | | |
| Parts and supplies | | | | | |
| Other non-trade receivables | | | | | |
| Reinsurance receivable | | | | | |
| Prepaid fees for cloud-based hosting arrangements, current | | | | | |
| Other | | | | | |
| Total | $ | | | | $ | | |
Other Assets
| | $ | | | | Operating right-of-use lease assets | | | | | |
| Deferred compensation plan | | | | | |
| Prepaid fees and capitalized implementation costs for cloud-based hosting arrangements | | | | | |
| Reinsurance receivable | | | | | |
| Deferred contract costs and sales commissions | | | | | |
| Derivative and hedging assets | | | | | |
| Amounts recoverable for capping, closure and post-closure obligations | | | | | |
| Other | | | | | |
| Total | $ | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
7.
| | $ | | | | Insurance reserves, current | | | | | |
| Accrued fees and taxes | | | | | |
| Accrued dividends | | | | | |
| Operating right-of-use lease liabilities, current | | | | | |
| Ceded insurance reserves, current | | | | | |
| Contingent purchase price and acquisition holdbacks | | | | | |
| Accrued professional fees and legal settlement reserves | | | | | |
|
|
|
| Other | | | | | |
| Total | $ | | | | $ | | |
Other Long-Term Liabilities
| | $ | | | | Deferred compensation plan liability | | | | | |
| Ceded insurance reserves | | | | | |
| Derivative and hedging liabilities | | | | | |
| Contingent purchase price and acquisition holdbacks | | | | | |
| Withdrawal liability - multiemployer pension funds | | | | | |
|
| Other | | | | | |
| Total | $ | | | | $ | | |
Insurance Reserves
Our liabilities for unpaid and incurred but not reported claims as of December 31, 2024 and 2023 (which include claims for workers’ compensation, commercial general and auto liability and employee-related health care benefits) were $ million and $ million, respectively, under our risk management program and are included in other accrued liabilities and insurance reserves, net of current portion, in our consolidated balance sheets. While the ultimate amount of claims incurred depends on future developments, we believe the recorded reserves are adequate to cover the future payment of claims; however, it is possible that these recorded reserves may not be adequate to cover the future payment of claims. Adjustments, if any, to estimates recorded resulting from ultimate claim payments will be reflected in our consolidated statements of income in the periods in which such adjustments are known.
| | $ | | | | $ | | | | Additions charged to expense | | | | | | | | |
| Payments | () | | | () | | | () | |
| Premium written for third party risk assumed | | | | | | | | |
| Balance at end of year | | | | | | | | |
| Less: current portion | () | | | () | | | () | |
| Long-term portion | $ | | | | $ | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
8.
active landfills with total available disposal capacity estimated to be billion in-place cubic yards. Additionally, we have post-closure responsibility for closed landfills.Accrued Landfill and Environmental Costs
| | $ | | | | Environmental remediation | | | | | |
| Total accrued landfill and environmental costs | | | | | |
| Less: current portion | () | | | () | |
| Long-term portion | $ | | | | $ | | |
Final Capping, Closure and Post-Closure Costs
| | $ | | | | $ | | | | Non-cash additions | | | | | | | | |
| Acquisitions, net of divestitures and other adjustments | | | | | | | | |
| Asset retirement obligation adjustments | | | | | | | | |
| Payments | () | | | () | | | () | |
| Accretion expense | | | | | | | | |
| |
| Asset retirement obligations, end of year | | | | | | | | |
| Less: Current portion | () | | | () | | | () | |
| Long-term portion | $ | | | | $ | | | | $ | | |
We review annually, in the fourth quarter, and update as necessary, our estimates of asset retirement obligations. As a result, we increased amortization expense by $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively, primarily related to changes in estimates and assumptions concerning the anticipated waste flow, cost and timing of future final capping, closure and post-closure activities.
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| Thereafter | | |
| $ | | |
The estimated remaining final capping, closure and post-closure expenditures presented above are not inflated and not discounted and reflect the total estimated future payments for liabilities which include those incurred and recorded as of December 31, 2024 as well as liabilities yet to be incurred over the remaining life of our landfills.
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
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | Net additions charged to expense | | | | | | | | |
| Payments | () | | | () | | | () | |
| Accretion expense (non-cash interest expense) | | | | | | | | |
| Acquisitions, net of divestitures and other adjustments | | | | | | | | |
| Environmental remediation liabilities, end of year | | | | | | | | |
| Less: current portion | () | | | () | | | () | |
| Long-term portion | $ | | | | $ | | | | $ | | |
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| Thereafter | | |
| $ | | |
The following is a discussion of certain of our significant remediation matters:
Bridgeton Landfill. During the year ended December 31, 2024, we paid $ 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 December 31, 2024, the remediation liability recorded for this site was $ million, of which approximately $ million is expected to be paid during 2025.
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 $ million over a four to 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. On January 17, 2025, the EPA issued an Explanation of Significant Differences (ESD) applying the prior Record of Decision Amendment to an increased number of acres at the site found to contain radiologically-impacted material. The ESD includes a revised undiscounted cost estimate of $ million. 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. However, subsequent events related to remedy design, divisibility, or allocation may require us to modify our expected remediation liability.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | The Credit Facility | | Variable | | | | | | | | | | | | | | | | | | |
| Term Loan | | Variable | | | | | | | | | | | | | | | | | | |
| Commercial Paper | | Variable | | | | | | | | | | | | | | () | | | | |
| Senior notes: | | | | | | | | | | | | | | |
| | | | | | | | | | |
| August 2024 | | | | | | | | | | | | | | | | () | | | | |
| March 2025 | | | | | | | | | | | | | | | | () | | | | |
| November 2025 | | | | | | | | | | | | | | | | () | | | | |
| July 2026 | | | | | | | () | | | | | | | | | () | | | | |
| November 2027 | | | | | | | () | | | | | | | | | () | | | | |
| May 2028 | | | | | | | () | | | | | | | | | () | | | | |
| April 2029 | | | | | | | () | | | | | | | | | () | | | | |
| November 2029 | | | | | | | () | | | | | | | | | | | | | |
| March 2030 | | | | | | | () | | | | | | | | | () | | | | |
| February 2031 | | | | | | | () | | | | | | | | | () | | | | |
| February 2032 | | | | | | | () | | | | | | | | | () | | | | |
| March 2033 | | | | | | | () | | | | | | | | | () | | | | |
| December 2033 | | | | | | | () | | | | | | | | | () | | | | |
| April 2034 | | | | | | | () | | | | | | | | | () | | | | |
| November 2034 | | | | | | | () | | | | | | | | | | | | | |
| March 2035 | | | | | | | () | | | | | | | | | () | | | | |
| March 2040 | | | | | | | () | | | | | | | | | () | | | | |
| May 2041 | | | | | | | () | | | | | | | | | () | | | | |
| March 2050 | | | | | | | () | | | | | | | | | () | | | | |
| Debentures: | | | | | | | | | | | | | | |
| September 2035 | | | | | | | () | | | | | | | | | () | | | | |
| Tax-exempt: | | | | | | | | | | | | | | |
2026 - 2053 | | - | | | | | () | | | | | | | | | () | | | | |
| Finance leases and other: | | | | | | | | | | | | | | |
2025 - 2063 | | - | | | | | — | | | | | | | | | — | | | | |
| Total Debt | | | | $ | | | | $ | () | | | | | | $ | | | | $ | () | | | | |
| Less: current portion | | | | | | | | () | | | | | | | () | |
| Long-term portion | | | | | | | | $ | | | | | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| Thereafter | | |
| $ | | |
Credit Facilities
Uncommitted Credit Facility
In January 2022, we entered into a $ 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 December 31, 2024 and 2023, we had borrowings outstanding under our Uncommitted Credit Facility.
The Credit Facility
In July 2024, we and our subsidiary, USE Canada Holdings, Inc. (the Canadian Borrower) entered into the Second Amended and Restated Credit Agreement (the Credit Facility) which amends and restates the unsecured revolving credit facility we entered into in August 2021. The total outstanding principal amount that we may borrow under the Credit Facility may not exceed the current aggregate lenders' commitments of $ billion, and borrowings under the Credit Facility mature in July 2029. As permitted by the Credit Facility, we have the right to request 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 $ billion through increased commitments from existing lenders or the addition of new lenders.
All loans to the Canadian Borrower and all loans denominated in Canadian dollars cannot exceed $ billion (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 % 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 % based on our Debt Ratings. As of December 31, 2024, C$ million was outstanding against the Canadian Sublimit, with a weighted average interest rate of %.
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 $ million and $ million outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively. We had $ million and $ million of letters of credit outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively. We also had $ million and $ million of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of December 31, 2024 and 2023, respectively. As a result, availability under our Credit Facility was $ million and $ million as of December 31, 2024 and 2023, respectively.
Term Loan Facility
On April 29, 2022, we entered into a $ billion Term Loan Facility, which bore interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings. We had $ million of borrowings outstanding under the Term Loan Facility as of December 31, 2023. During the year ended December 31, 2024, we repaid the remaining balance of the Term Loan Facility.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We had $ million and $ million principal value of commercial paper issued and outstanding under the program as of December 31, 2024 and 2023, respectively. In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund amounts currently borrowed under the commercial paper program until they are re-borrowed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2024 and 2023, respectively.
Senior Notes and Debentures
In March 2023, we issued $ million of % senior notes due 2029 (the Existing 2029 Notes) and $ million of % senior notes due 2034 (the 2034 Notes, and together with the Existing 2029 Notes, 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 less than $ million.
In December 2023, we issued an additional $ million of % senior notes due 2029 (the New 2029 Notes, and together with the Existing 2029 Notes, the 2029 Notes). After giving effect to the issuance of the New 2029 Notes, $ million in aggregate principal amount of the 2029 Notes is outstanding. The New 2029 Notes are fungible with the Existing 2029 Notes, and taken together, the 2029 Notes are treated as a single series.
In December 2023, we also issued $ million of % senior notes due 2033 (the 2033 Notes). The proceeds of the 2033 Notes were used 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.
In June 2024, we issued $ million of % senior notes due 2029 and $ million of % senior notes due 2034. We used the proceeds from the June 2024 notes issuance for general corporate purposes, including the repayment of a portion of amounts outstanding under the Commercial Paper Program and the Credit Facility; and repayment of the remaining amount outstanding under the Term Loan Facility and the Uncommitted Credit Facility.
Our senior notes and debentures are general unsecured and unsubordinated obligations and rank equally with our other unsecured obligations.
Tax-Exempt Financings
As of December 31, 2024, we had $ million of fixed and variable rate tax-exempt financings outstanding, with maturities ranging from 2026 to 2053. As of December 31, 2023, we had $ million of fixed and variable rate tax-exempt financings outstanding, with maturities ranging from 2024 to 2053.
In June 2024, the Mission Economic Development Corporation issued, for our benefit, $ million in principal amount of Solid Waste Disposal Revenue Bonds. The proceeds from the issuance, after deferred issuance costs, were used to fund the acquisition, construction, improvement, installation, and/or equipping of certain solid waste disposal facilities located within Texas.
In both March 2024 and September 2023, the California Municipal Finance Authority issued, for our benefit, $ million in principal amount of Solid Waste Disposal Revenue Bonds. The proceeds from the issuances, after deferred issuance costs, were used to fund the acquisition, construction, improvement, installation, and/or equipping of certain solid waste disposal facilities located within California.
The initial remarketing period for the above Mission Economic Development Corporation and California Municipal Finance Authority tax-exempt financings is years. Our remaining tax-exempt financings are remarketed either quarterly or semiannually by remarketing agents to effectively maintain a variable yield. The holders of the bonds can put them back to the remarketing agents at the end of each interest period. If the remarketing agents are unable to remarket our bonds, the remarketing agents can put the bonds to us. In the event of a failed remarketing, we currently have availability under our Credit Facility to fund these bonds until they are remarketed successfully. Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of December 31, 2024 and December 31, 2023.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of December 31, 2024, finance leases and other included $ million related to the construction of an office building located in Phoenix, Arizona, which has been accounted for as a financing obligation. The amount is recorded within long-term debt, net of current maturities.
Interest Paid
million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022
10.
| | $ | | | | | Finance lease assets | Property and equipment, net | | | | | | |
| Total leased assets | | $ | | | | $ | | | |
| | | | | |
| Liabilities | | | | | |
| Current | | | | | |
| Operating | Other accrued liabilities | $ | | | | $ | | | |
| Finance | Notes payable and current maturities of long-term debt | | | | | | |
| Long-term | | | | | |
| Operating | Other long-term liabilities | | | | | | |
| Finance | Long-term debt, net of current maturities | | | | | | |
| Total lease liabilities | | $ | | | | $ | | | | | | $ | | |
| Short-term lease cost | Cost of operations | | | | | |
| Variable lease cost | Cost of operations | | | | | |
| Finance lease cost | | | | |
| Amortization of leased assets | Depreciation, depletion and amortization | | | | | |
| Interest on lease liabilities | Interest expense | | | | | |
| Variable lease cost | Interest expense | | | | | |
| Total lease cost | | $ | | | | $ | | |
During the years ended December 31, 2024 and 2023, we recognized changes in our operating right-of-use lease liabilities and assets, resulting from the recognition of non-cash lease expense of $ million and $ million, respectively.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | 2026 | | | | | | | | |
| 2027 | | | | | | | | |
| 2028 | | | | | | | | |
| 2029 | | | | | | | | |
| Thereafter | | | | | | | | |
| Total lease payments | | | | | | | | |
| Less: interest | () | | | () | | | () | |
| Present value of lease liabilities | $ | | | | $ | | | | $ | | |
| | | Finance leases | | | | |
| Weighted-average discount rate | | | | |
| Operating leases | | | % | | | % |
| Finance leases | | | % | | | % |
Supplemental cash flow and other non-cash information for the years ended December 31, 2024 and 2023 follow:
| | | | | | | | | | | | | | |
| | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities | | | | |
| Operating cash flows from operating leases | | $ | | | | $ | | |
| Operating cash flows from finance leases | | $ | | | | $ | | |
| Financing cash flows from finance leases | | $ | | | | $ | | |
| Leased assets obtained in exchange for new finance lease liabilities | | $ | | | | $ | | |
| Leased assets obtained in exchange for new operating lease liabilities | | $ | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
11.
| | $ | | | | $ | | | State | | | | | | | | |
| Deferred: | | | | | |
Federal | | | | | | | | |
State | | | | | | | | |
| Uncertain tax positions and interest and other | () | | | () | | | | |
| Provision for income taxes | $ | | | | $ | | | | $ | | |
% | | | % | | | % | | State income taxes, net of federal benefit | | | | | | | | |
| |
| Non-deductible expenses | | | | | | | | |
| Uncertain tax position taxes and interest | () | | | () | | | | |
| Investment tax credits | () | | | () | | | () | |
| |
| Other, net | () | | | () | | | () | |
| Effective income tax rate | | % | | | % | | | % |
During 2024, we acquired non-controlling interests in limited liability companies established to own renewable energy assets that qualified for investment tax credits under Section 48 of the Internal Revenue Code. We account for these investments under the equity method of accounting utilizing the HLBV method and recognize our share of income or loss and other reductions in the value of our investment in loss from unconsolidated equity method investments within our consolidated statements of income. For further discussion regarding our equity method accounting, see Note 3, Business Acquisitions, Investments and Restructuring Charges. Our 2024 tax provision reflects a benefit of $ million due to the tax credits related to these investments.
We also made qualified investments in renewable natural gas projects and commercial electric vehicles during 2024 which, due to tax credits, reduced our tax provision by approximately $ million.
Our 2023 tax provision was reduced by $ million related to the tax credits from our non-controlling interests in limited liability companies established to own renewable energy assets.
In addition, during 2023 we resolved IRS examinations for our 2014 to 2018 tax years, that in the aggregate, reduced our tax provision by approximately $ million.
Our 2022 tax provision was reduced by $ million related to the tax credits from our non-controlling interests in limited liability companies established to own renewable energy assets.
During 2022, the Inflation Reduction Act (IRA) was signed into law. We continue to evaluate the IRA and additional regulations as they are released by the U.S. Treasury.
With respect to various energy credits in the IRA, we expect to benefit in subsequent years for credits related to commercial electric vehicles, carbon capture and renewable natural gas. Additional benefits may be identified as subsequent guidance is released by the U.S. Treasury and/or additional climate technologies are identified or advanced in future years.
We made income tax payments (net of refunds) of $ million, $ million and $ million for 2024, 2023, and 2022, respectively. Income taxes paid in 2024, 2023, and 2022 reflect benefits from tax credits from our continuing investments in qualified renewable energy projects.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | () | | Difference between book and tax basis of intangible assets | () | | | () | |
Operating right-of-use lease assets | () | | | () | |
Basis difference due to redemption of partnership interests | () | | | () | |
Total deferred tax liabilities | $ | () | | | $ | () | |
| Deferred tax assets relating to: | | | |
Environmental reserves | $ | | | | $ | | |
Accruals not currently deductible | | | | | |
Net operating loss carryforwards | | | | | |
Difference between book and tax basis of other assets | | | | | |
|
Operating right-of-use lease liabilities | | | | | |
Other | | | | | |
Total deferred tax assets | | | | | |
Valuation allowance | () | | | () | |
Net deferred tax asset | | | | | |
| Net overall deferred tax liability | $ | () | | | $ | () | |
| | $ | | | | $ | | | | Additions charged to provision for income taxes | | | | | | | | |
| Deferred tax assets realized or written-off | | | | | | | () | |
| |
| Other, net | () | | | | | | | |
| Valuation allowance, end of year | $ | | | | $ | | | | $ | | |
We have deferred tax assets related to state net operating loss carryforwards. We provide a partial valuation allowance due to uncertainty surrounding the future utilization of these carryforwards in the taxing jurisdictions where the loss carryforwards exist. When determining the need for a valuation allowance, we consider all positive and negative evidence, including recent financial results, scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies. The weight given to the positive and negative evidence is commensurate with the extent such evidence can be objectively verified. We adjust the valuation allowance in the period management determines it is more likely than not that deferred tax assets will or will not be realized.
The majority of our valuation allowance is associated with state loss carryforwards. The realization of our deferred tax asset for state loss carryforwards ultimately depends upon the existence of sufficient taxable income in the appropriate state taxing jurisdictions in future periods. We continue to regularly monitor both positive and negative evidence in determining the ongoing need for a valuation allowance.
We have deferred tax assets related to state net operating loss carryforwards with an estimated tax effect of $ million available as of December 31, 2024. These state net operating loss carryforwards expire at various times between 2025 and 2044. We believe that it is more likely than not that the benefit from some of our state net operating loss carryforwards will not be realized due to limitations on these loss carryforwards in certain states. In recognition of this risk, as of December 31, 2024, we have provided a valuation allowance of $ million.
We are subject to income tax in the United States, as well as income tax in multiple state and foreign jurisdictions. Income tax in our foreign jurisdictions is not material for all years presented. Our compliance with income tax rules and regulations is periodically audited by tax authorities. These authorities may challenge the positions taken in our tax filings. Thus, to provide for certain potential tax exposures, we maintain liabilities for uncertain tax positions for our estimate of the final outcome of the examinations. Our federal statute of limitations applicable to our federal tax returns is closed through 2020. The federal statute of limitations applicable to an acquired subsidiary is closed through 2019. In addition, we are currently under state examination or administrative review in various jurisdictions for tax years 2012 through 2023.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | Additions for tax positions of current year | | | | | | | | |
| Additions for tax positions of prior years | | | | | | | | |
| Reductions for tax positions of prior years | () | | | () | | | | |
| Reductions for tax positions resulting from lapse of statute of limitations | () | | | | | | | |
| Settlements | () | | | () | | | | |
| Balance at end of year | $ | | | | $ | | | | $ | | |
Included in our gross unrecognized tax benefits as of December 31, 2024, 2023 and 2022 are $ million, $ million and $ million, respectively, of unrecognized tax benefits (net of the federal benefit) that, if recognized, would affect our effective income tax rate in future periods. However, we are unable to estimate the resolution of these matters over the next 12 months.
During 2023, we settled our 2014-2018 tax years with the Internal Revenue Service. These settlements reduced our gross unrecognized tax benefits by $ million.
We recognize interest and penalties as incurred within the provision for income taxes in our consolidated statements of income. Related to the unrecognized tax benefits previously noted, we recorded a reduction to interest expense of $ million during 2024 and, in total as of December 31, 2024, have recognized a liability for penalties of $ million and interest of $ million. During 2023, we recorded interest expense of $ million and, in total as of December 31, 2023, had recognized a liability for interest of $ million. During 2022, we recorded interest expense of $ million and, in total as of December 31, 2022, had recognized a liability for interest of $ million.
We believe the recorded liabilities for uncertain tax positions are adequate. However, a significant assessment against us in excess of the liabilities recorded could have a material adverse effect on our consolidated financial position, results of operations and cash flows.
12.
million shares of common stock reserved for future grants under the 2021 Plan.In February 2007, our Board of Directors approved the 2007 Stock Incentive Plan (the 2007 Plan); in May 2007 our shareholders approved the 2007 Plan. In March 2011, our Board of Directors approved the Amended and Restated 2007 Stock Incentive Plan (the Amended and Restated 2007 SIP); in May 2011 our shareholders approved the Amended and Restated 2007 SIP. In March 2013, our Board of Directors approved the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (the Republic Amended and Restated 2007 SIP); in May 2013 our shareholders approved the Republic Amended and Restated 2007 SIP (the 2007 Plan, the Amended and Restated 2007 SIP and the Republic Amended and Restated 2007 SIP are collectively referred to as the Amended and Restated 2007 Stock Incentive Plan). No further awards will be made under the Amended and Restated 2007 Stock Incentive Plan.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | | | | | Granted | | | | $ | | | | | | |
| Vested and issued | () | | | $ | | | | | | |
| Forfeited | () | | | $ | | | | | | |
Unissued as of December 31, 2022 | | | | $ | | | | | | |
| Granted | | | | $ | | | | | | |
| Vested and issued | () | | | $ | | | | | | |
| Forfeited | () | | | $ | | | | | | |
Unissued as of December 31, 2023 | | | | $ | | | | | | |
| Granted | | | | $ | | | | | | |
| Vested and issued | () | | | $ | | | | | | |
| Forfeited | () | | | $ | | | | | | |
Unissued as of December 31, 2024 | | | | $ | | | | | | $ | | |
Vested and unissued as of December 31, 2024 | | | | $ | | | | | | |
During the years ended December 31, 2024, 2023 and 2022, we awarded our non-employee directors , and RSUs, respectively, which vested upon issuance.
During the years ended December 31, 2024, 2023 and 2022, we awarded , and RSUs, respectively, to executives and employees that vest in equal annual installments beginning on the anniversary date of the original grant or cliff vest after three or .
During the years ended December 31, 2024, 2023 and 2022, we granted an additional , and RSUs, respectively, as dividend equivalents.
The RSUs do not carry any voting or dividend rights, except the right to receive additional RSUs in lieu of dividends.
Compensation Expense
The fair value of RSUs is based on the closing market price on the date of the grant. The compensation expense related to RSUs is amortized ratably over the vesting period, or to the employee's retirement eligible date, if earlier.
During the years ended December 31, 2024, 2023 and 2022, compensation expense related to RSUs totaled $ million, $ million and $ million, respectively. As of December 31, 2024, total unrecognized compensation expense related to outstanding RSUs was $ million, which will be recognized over a weighted average period of approximately .
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | Granted | | | | $ | | |
| Vested and issued | () | | | $ | | |
| Forfeited | () | | | $ | | |
Outstanding as of December 31, 2022 | | | | $ | | |
| Granted | | | | $ | | |
| Vested and issued | () | | | $ | | |
| Forfeited | () | | | $ | | |
Outstanding as of December 31, 2023 | | | | $ | | |
| Granted | | | | $ | | |
| Vested and issued | () | | | $ | | |
| Forfeited | () | | | $ | | |
Outstanding and Exercisable as of December 31, 2024 | | | | $ | | |
During the years ended December 31, 2024, 2023 and 2022, we awarded , and PSUs to our executive officers, respectively. These awards are performance-based as the number of shares ultimately earned depends on performance against pre-determined targets for return on invested capital (ROIC), cash flow value creation (CFVC) and total shareholder return relative to the S&P 500 index (RTSR). The PSUs are payable % in shares of common stock and % in cash after the end of a performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from % to % of the targeted amount, depending on the performance against the pre-determined targets.
During the years ended December 31, 2024, 2023 and 2022, we awarded , and PSUs to our employees other than our executive officers, respectively. The PSUs are payable % in shares of common stock after the end of a performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from % to % of the targeted amount, depending on the performance against the pre-determined targets.
The PSUs do not carry any voting or dividend rights, except the right to accumulate additional PSUs in lieu of dividends.
During the years ended December 31, 2024, 2023 and 2022, we granted an additional , and PSUs to our executive officers, respectively, as dividend equivalents.
Compensation Expense
For the stock-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is measured using the fair value of our common stock at the grant date. For the cash-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is recorded based on the fair value of our common stock at the end of each reporting period. Compensation expense is recognized ratably over the performance period based on our estimated achievement of the established performance criteria. Compensation expense is only recognized for the portion of the award that we expect to vest, which we estimate based on an assessment of the probability that the performance criteria will be achieved.
For the stock-settled portion of the award that vests based on RTSR, the grant date fair value is based on a Monte Carlo valuation and compensation expense is recognized on a straight-line basis over the vesting period. For the cash-settled portion of the award that vests based on RTSR, compensation expense also incorporates the fair value of our PSUs at the end of each reporting period. Compensation expense is recognized for the RTSR portion of the award whether or not the market conditions are achieved.
During the years ended December 31, 2024, 2023 and 2022, compensation expense related to PSUs totaled $ million, $ million and $ million, respectively. As of December 31, 2024, total unrecognized compensation expense related to outstanding PSUs was $ million, which will be recognized over a weighted average period of approximately years.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Multiemployer Pension Plans
We participate in multiemployer pension plans that generally provide retirement benefits to participants of contributing employers. We do not administer these plans. In general, these plans are managed by a board of trustees with the unions appointing certain trustees and other contributing employers of the plan appointing certain members. We generally are not represented on the board of trustees.
Based on the information available to us, we believe that some of the multiemployer plans to which we contribute are either critical or endangered as those terms are defined in the Pension Protection Act (PPA). The PPA requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. Until the plan trustees develop the funding improvement plans or rehabilitation plans as required by the PPA, we cannot determine the amount of any additional contribution or other financial obligations that we may be subject to, if any. Accordingly, we cannot presently determine the effect that the PPA may have on our consolidated financial position, results of operations or cash flows.
Furthermore, under current law regarding multiemployer benefit plans, a plan’s termination, our voluntary withdrawal (which we consider from time to time), or the mass withdrawal from any under-funded multiemployer pension plan would require us to make payments to the plan for our proportionate share of the multiemployer plan’s unfunded vested liabilities. During the course of operating our business, we may incur withdrawal events regarding certain of the multiemployer pension plans in which we participate. We accrue for such events when losses become probable and reasonably estimable.
million in any period disclosed to be individually significant. The most recent PPA zone status available in 2024 and 2023 is for the plans’ year ended September 30, or December 31, 2023 and 2022, respectively. The status is based on information that Republic received from the plans and is certified by the plans’ actuary. Among other factors, plans in the critical red zone are generally less than % funded, plans in the endangered yellow zone are less than % funded and plans in the safe green zone are at least % funded. Plans in the critical and declining zone are classified as critical and projected to be insolvent in the current year or any of the 14 following plan years. The last column lists the expiration dates of the CBAs to which the plans are subject. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Pension Protection
Act Zone Status | | Funding
Improvement
or Rehabilitation
Plan Status
Pending / | | Republic
Contributions to Plan | | Surcharge | | Expiration Dates |
| Legal Plan Name | EIN | | 2024 | | 2023 | | Implemented | | 2024 | | 2023 | | 2022 | | Imposed | | of CBAs |
Western Conference of
Teamsters Pension Plan | 91-6145047 | | Safe | | Safe | | No | | $ | | | | $ | | | | $ | | | | No | | Various dates through 9/30/2029 |
| All other plans | N/A | | N/A | | N/A | | N/A | | | | | | | | | | | N/A | | |
| Total | | | | | | | | | $ | | | | $ | | | | $ | | | | | | |
Defined Contribution Plan
We maintain the Republic Services 401(k) Plan (the 401(k) Plan), which is a defined contribution plan covering all eligible employees. Under the 401(k) Plan, participants may direct us to defer a portion of their compensation to the 401(k) Plan, subject to Internal Revenue Code limitations. We provide for an employer matching contribution equal to % of the first % of eligible compensation and % of the next % of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately.
Total expense recorded for matching 401(k) contributions in 2024, 2023 and 2022 was $ million, $ million and $ million, respectively.
Deferred Compensation Plan
We provide eligible Republic employees, officers and directors with the opportunity to voluntarily defer base salary, bonus payments, long-term incentive awards and other compensation, as applicable, on a pre-tax basis through the Republic Services, Inc. Deferred Compensation Plan (the DCP). The DCP is a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. Eligible participants can defer up to % of base salary and up to % of bonus,
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Republic invested in corporate-owned life insurance policies to satisfy future obligations under the DCP. These corporate-owned life insurance policies are held in a Rabbi Trust and are recorded at the amount that can be realized under insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The aggregate cash surrender value of these life insurance policies was $ million and $ million as of December 31, 2024 and 2023, respectively, and is classified in other assets in our consolidated balance sheets. The DCP liability was $ million and $ million as of December 31, 2024 and 2023, respectively, and is classified in other long-term liabilities in our consolidated balance sheets.
13.
million shares of common stock reserved for future grants under the Republic Services, Inc. 2021 Stock Incentive Plan.Share Repurchases
In October 2020, our Board of Directors approved a $ billion share repurchase authorization effective starting January 1, 2021 and extending through December 31, 2023. In October 2023, our Board of Directors approved a $ billion share repurchase authorization effective starting January 1, 2024 and extending through December 31, 2026. Share repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws. While the Board of Directors has approved the program, the timing of any purchases, the prices and the number of shares of common stock to be purchased will be determined by our management, at its discretion, and will depend upon market conditions and other factors. The share repurchase program may be extended, suspended or discontinued at any time. On a quarterly basis, our Board of Directors reviews the intrinsic value of our stock and the parameters around which we repurchase our shares.
| | | | | | | | Amount paid | $ | | | | $ | | | | $ | | |
| Weighted average cost per share | $ | | | | $ | | | | $ | | |
The average price paid per share, total repurchase costs and approximate maximum dollar value of the shares that may yet be purchased under the plans or programs exclude a 1% excise tax.
As of December 31, 2024, there were less than million repurchased shares pending settlement, resulting in an associated $ million of share repurchases unpaid and included within other accrued liabilities. As of December 31, 2023 and 2022, there were repurchased shares pending settlement. As of December 31, 2024, the remaining authorized purchase capacity under our October 2023 repurchase program was $ billion.
In December 2024, our board of directors changed the status of million treasury shares to authorized and unissued. In doing so, the number of our issued shares was reduced by the stated amount. Our accounting policy is to deduct the par value from common stock and to reflect the excess of cost over par value as a deduction from additional paid-in capital. The reduction in issued shares resulted in a change of $ million in treasury stock which was reclassified as less than million in common stock, and $ million in additional paid-in capital. There was no effect on our total stockholders' equity position as a result of the change.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
14.
| | $ | | | | $ | | | | Weighted average common shares outstanding | | | | | | | | |
| Basic earnings per share | $ | | | | $ | | | | $ | | |
| Diluted earnings per share: | | | | | |
| Net income attributable to Republic Services, Inc. | $ | | | | $ | | | | $ | | |
| Weighted average common shares outstanding | | | | | | | | |
| Effect of dilutive securities: | | | | | |
| |
| Unvested RSU awards | | | | | | | | |
| Unvested PSU awards | | | | | | | | |
| Weighted average common and common equivalent shares outstanding | | | | | | | | |
| Diluted earnings per share | $ | | | | $ | | | | $ | | |
antidilutive securities outstanding. During each of the years ended December 31, 2023 and 2022, million antidilutive securities outstanding.
15.
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 in geographic areas located across the United States and Canada. These groups are presented below as our reportable segments, which each provide integrated environmental services, including but not limited to collection, transfer, recycling and disposal.We generated $ million, $ million and $ million of revenue in Canada for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, we had $ million and $ million, respectively, of long-lived assets in Canada. The remainder of our revenue and assets were related to our United States operations.
Our chief operating decision maker (CODM) is Jon Vander Ark, President and Chief Executive Officer of Republic Services, Inc. Adjusted EBITDA is the single financial measure our CODM uses to evaluate segment profitability and returns, which informs resource allocation. For all segments, the CODM uses adjusted EBITDA to evaluate income generated from segment assets (return on invested capital). The CODM considers budget-to-actual variances and year-over-year growth on a monthly basis to assess the performance of each segment. Cost of operations and selling, general and administrative are significant segment expenses used in the evaluation.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Intercompany Revenue | () | | | () | | | () | | | () | | | () | | | () | |
| Revenue Allocations | | | | | | | | | | | | | () | | | — | |
| Net Revenue | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Cost of Operations | | | | | | | | | | | | | — | | | | |
| SG&A | | | | | | | | | | | | | — | | | | |
| Other Segment Items | | | | | | | | | | | | | — | | | | |
| Adjusted EBITDA | $ | | | | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | |
| Capital Expenditures | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Total Assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Group 1 | | Group 2 | | Recycling & Waste Subtotal(1) | | Group 3
(Environmental Solutions) | | Corporate entities and other | | Total |
| 2023 |
| Gross Revenue | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Intercompany Revenue | () | | | () | | | () | | | () | | | () | | | () | |
| Revenue Allocations | | | | | | | | | | () | | | () | | | — | |
| Net Revenue | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Cost of Operations | | | | | | | | | | | | | — | | | | |
| SG&A | | | | | | | | | | | | | — | | | | |
| Other Segment Items | | | | | | | | | | () | | | — | | | () | |
| Adjusted EBITDA | $ | | | | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | |
| Capital Expenditures | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Total Assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Group 1 | | Group 2 | | Recycling & Waste Subtotal(1) | | Group 3
(Environmental Solutions) | | Corporate entities and other | | Total |
| 2022 |
| Gross Revenue | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Intercompany Revenue | () | | | () | | | () | | | () | | | () | | | () | |
| Revenue Allocations | | | | | | | | | | () | | | () | | | — | |
| Net Revenue | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Cost of Operations | | | | | | | | | | | | | — | | | | |
| SG&A | | | | | | | | | | | | | — | | | | |
| Other Segment Items | | | | | | | | | | () | | | — | | | () | |
| Adjusted EBITDA | $ | | | | $ | | | | $ | | | | $ | | | | $ | — | | | $ | | |
| Capital Expenditures | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Total Assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
(1) The Recycling & Waste Subtotal represents the combined results of our Group 1 and Group 2 reportable segments.
Corporate functions include marketing, operations support, business development, legal, tax, treasury, information technology, risk management, human resources and other administrative functions. National Accounts revenue included in Corporate entities and other represents the portion of revenue generated from nationwide and regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators. Revenue and overhead costs of Corporate entities and other are either specifically assigned or allocated on a rational and consistent basis among our reportable
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | | Group 2 Adjusted EBITDA | | | | | | | | | |
| Group 3 Adjusted EBITDA | | | | | | | | | |
| Total Adjusted EBITDA | | | | | | | | | |
| Other income (expense), net | () | | | () | | | | | |
| Interest income | () | | | () | | | () | | |
| Interest expense | | | | | | | | | |
| Depreciation, depletion and amortization | | | | | | | | | |
| Accretion | | | | | | | | | |
| Loss from unconsolidated equity method investments | | | | | | | | | |
Adjustment to withdrawal liability for multiemployer pension funds | | | | | | | () | | |
| Restructuring charges | | | | | | | | | |
| Gain on certain divestitures and impairments, net | () | | | () | | | () | | |
| US Ecology, Inc. acquisition integration and deal costs | | | | | | | | | |
| | |
| Loss on extinguishment of debt and other related costs | | | | | | | | | |
| Income before income taxes | $ | | | | $ | | | | $ | | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
16.
| | | % | | $ | | | | | % | | $ | | | | | % | | Small-container | | | | | | | | | | | | | | | | | |
| Large-container | | | | | | | | | | | | | | | | | |
| Other | | | | | | | | | | | | | | | | | |
Total collection | | | | | | | | | | | | | | | | | |
| Transfer | | | | | | | | | | | | | | |
| Less: intercompany | () | | | | | () | | | | | () | | | |
| Transfer, net | | | | | | | | | | | | | | | | | |
| Landfill | | | | | | | | | | | | | | |
| Less: intercompany | () | | | | | () | | | | | () | | | |
| Landfill, net | | | | | | | | | | | | | | | | | |
| Environmental solutions | | | | | | | | | | | | | | |
| Less: intercompany | () | | | | | () | | | | | () | | | |
| Environmental solutions, net | | | | | | | | | | | | | | | | | |
| Other: | | | | | | | | | | | |
Recycling processing and commodity sales | | | | | | | | | | | | | | | | | |
| Other non-core | | | | | | | | | | | | | | | | | |
| Total other | | | | | | | | | | | | | | | | | |
| Total revenue | $ | | | | | % | | $ | | | | | % | | $ | | | | | % |
Other non-core revenue consists primarily of revenue from National Accounts, which represents the portion of revenue generated from nationwide or regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators. Consequently, substantially all of this revenue is offset with related subcontract costs, which are recorded in cost of operations.
See Note 15, Segment Reporting, for additional information regarding revenue by reportable segment.
Revenue by Service Line
Collection Services
Our collection business involves the collection of material for transport to transfer stations, or directly to landfills or recycling centers. Our collection services business includes both recurring and temporary customer relationships. Our standard contract duration is three years, although some of our exclusive franchises are for significantly longer periods. The fees received for collection services are based primarily on the market, collection frequency, type of service, type and volume or weight of the material collected, the distance to the disposal facility and the cost of disposal.
In general, small-container and residential collection fees are billed monthly or quarterly in advance. Our large-container customers are typically billed on a monthly basis based on the nature of the services provided during the period.
Revenue recognized under these agreements is variable in nature based on the number of residential homes or businesses serviced during the period, the frequency of collection and the volume of material collected. In addition, certain of our contracts have annual price escalation clauses that are tied to changes in an underlying base index such as a consumer price index which are unknown at contract inception.
Transfer Services
Revenue at our transfer stations is primarily generated by charging tipping or disposal fees. The fees received for transfer services are based primarily on the market, type and volume or weight of the material accepted, the distance to the disposal facility and the cost of disposal. In general, fees are billed and revenue is recognized at the time the service is performed.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17.
) | | $ | | | | $ | | | | $ | () | | | Other comprehensive loss before reclassifications | | | | () | | | () | | | | |
| Amounts reclassified from accumulated other comprehensive loss | | | | | | | | | | | |
| Net current-period other comprehensive income (loss) | | | | () | | | () | | | | |
Balance as of December 31, 2022 | () | | | | | | () | | | () | |
| Other comprehensive income (loss) before reclassifications | | | | | | | () | | | | |
| Amounts reclassified from accumulated other comprehensive loss | () | | | | | | | | | () | |
| Net current-period other comprehensive income (loss) | | | | | | | () | | | | |
Balance as of December 31, 2023 | () | | | | | | () | | | () | |
| Other comprehensive income (loss) before reclassifications | | | | () | | | () | | | | |
| Amounts reclassified from accumulated other comprehensive loss | () | | | () | | | | | | () | |
| Net current-period other comprehensive income (loss) | () | | | () | | | () | | | () | |
Balance as of December 31, 2024 | $ | () | | | $ | | | | $ | () | | | $ | () | |
| | | | | | | |
) | | $ | () | | | $ | () | | | Interest expense | | 2022 Interest Rate Swap | | | | | | | | | | | Interest expense |
| Total before tax | | | | | | | | () | | | |
| Tax (provision) benefit | | () | | | () | | | | | | |
| Net of tax | | | | | | | | () | | | |
| | | | | | | | |
| Pension gains: | | | | | | | | |
| Pension settlement | | | | | | | | | | | Other income |
| Tax provision | | () | | | | | | | | | |
| Net of tax | | | | | | | | | | | |
Total income (loss) reclassified into earnings, net of tax | | $ | | | | $ | | | | $ | | | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18.
| | $ | | | | $ | | | | $ | | | | $ | | | Bonds and fixed income - restricted cash and marketable securities and other assets | | | | | | | | | | | | | | |
| Derivative and hedging assets - other assets, prepaid expenses and other current assets | | | | | | | | | | | | | | |
| Total assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Liabilities: | | | | | | | | | |
| Derivative and hedging liabilities - other accrued liabilities and other long-term liabilities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | |
| Contingent consideration - other accrued liabilities and other long-term liabilities | | | | | | | | | | | | | | |
| Total liabilities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | $ | | | | $ | | | | $ | | | | Bonds - restricted cash and marketable securities and other assets | | | | | | | | | | | | | | |
| Derivative and hedging assets - other assets | | | | | | | | | | | | | | |
| Total assets | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Liabilities: | | | | | | | | | |
| Derivative and hedging liabilities - other accrued liabilities and other long-term liabilities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Contingent consideration - other accrued liabilities and other long-term liabilities | | | | | | | | | | | | | | |
| Total liabilities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
Total Debt
As of December 31, 2024 and 2023, the carrying value of our total debt was $ billion and $ billion, respectively, and the fair value of our total debt was $ billion and $ billion, respectively. The estimated fair value of our fixed rate senior notes and debentures is based on quoted market prices. The fair value of our remaining notes payable, tax-exempt financings and borrowings under our credit facilities approximates the carrying value because the interest rates are variable. The fair value estimates are based on Level 2 inputs of the fair value hierarchy as of December 31, 2024 and 2023. See Note 9, Debt, for further information related to our debt.
Contingent Consideration
In 2015, we entered into a waste management contract with the County of Sonoma, California to operate the county's waste management facilities. As of December 31, 2024, the Sonoma contingent consideration represents the fair value of $ million payable to the County of Sonoma based on the achievement of future annual tonnage targets through the expected remaining capacity of the landfill. The potential undiscounted amount of all future contingent payments that we could be required to make under the waste management contract is estimated to be between approximately $ million and $ million. During 2024, the activity in the contingent consideration liability included accretion, which was offset by concession payments made in the ordinary course of business. There were changes to the estimate of fair value.
19.
million relating to our outstanding legal proceedings as of December 31, 2024. As of the end of each applicable reporting period, we review each of our legal proceedings and, where it is probable that a liability has been
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Multiemployer Pension Plans
We participate in multiemployer pension plans that generally provide retirement benefits to participants of contributing employers. We do not administer these plans.
Under current law regarding multiemployer pension plans, our withdrawal (which we consider from time to time) or the mass withdrawal from any under-funded multiemployer pension plan (each, a Withdrawal Event) could require us to make payments to the plan for our proportionate share of the plan’s unfunded vested liabilities. During the course of operating our business, we incur Withdrawal Events regarding certain of the multiemployer pension plans in which we participate. We accrue for such events when losses become probable and reasonably estimable.
Unconditional Purchase Commitments
Royalties
We have entered into agreements to pay royalties to prior landowners or host communities, based on, among other things, revenue received and waste tonnage disposed at specified landfills. These royalties are generally payable quarterly and amounts incurred, but not paid, are accrued in our consolidated balance sheets. Royalties are accrued as revenue is received or tonnage is disposed of, as applicable, in the landfills.
Disposal Agreements
We have several agreements that require us to dispose of a minimum number of tons at third-party disposal facilities. Under these put-or-pay agreements, we must pay for agreed-upon minimum volumes regardless of the actual number of tons placed at the facilities.
Our unconditional purchase commitments have varying expiration dates, with some extending through the remaining life of the respective landfill.
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| Thereafter | | |
| $ | | |
Cash and Cash Equivalents and Restricted Cash and Marketable Securities
Restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows.
| | $ | | | | $ | | | | Restricted cash and marketable securities | | | | | | | | | |
| Less: restricted marketable securities | | () | | | () | | | () | |
| Cash, cash equivalents, restricted cash and restricted cash equivalents | | $ | | | | $ | | | | $ | | |
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
| | $ | | | | Insurance | | | | | |
|
| Total restricted cash and marketable securities | $ | | | | $ | | |
We must provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping, closure and post-closure costs and our performance under certain collection, landfill and transfer station contracts. We satisfy our financial assurance requirements by providing surety bonds, letters of credit, insurance policies or trust deposits. The amount of the financial assurance requirements for capping, closure and post-closure costs is determined by applicable state environmental regulations, which vary by state. The financial assurance requirements for capping, closure and post-closure costs can either be for costs associated with a portion of the landfill or the entire landfill. Generally, states will require a third-party engineering specialist to determine the estimated capping, closure and post-closure costs that are used to determine the required amount of financial assurance for a landfill. The amount of financial assurance required can, and generally will, differ from the obligation determined and recorded under U.S. GAAP. The amount of the financial assurance requirements related to contract performance varies by contract. Additionally, we are required to provide financial assurance for our insurance program and collateral for certain performance obligations.
| | $ | | | | Surety bonds | $ | | | | $ | | |
We had $ million and $ million of letters of credit outstanding under our Credit Facility as of December 31, 2024 and 2023, respectively. Surety bonds subject to expiration will expire on various dates through 2032.
These financial instruments are issued in the normal course of business and are not classified as debt. Because we currently have no liability for this financial assurance, it is not reflected in our consolidated balance sheets. However, we have recorded capping, closure and post-closure obligations and insurance reserves as they are incurred.
We own a % interest in a company that, among other activities, issues financial surety bonds to secure capping, closure and post-closure obligations for companies operating in the environmental services industry. We account for this investment using an alternative measurement approach. There have been no identified events or changes in circumstances that may have a significant adverse effect on the recoverability of this investment. This investee company and the parent company of the investee had written surety bonds for us relating primarily to our landfill operations for capping, closure and post-closure, of which $ million were outstanding as of December 31, 2024. Our reimbursement obligations under these bonds are secured by an indemnity agreement with the investee and a surety bond.
Off-Balance Sheet Arrangements
We have no off-balance sheet debt or similar obligations, other than short-term operating leases and financial assurances, which are not classified as debt. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported financial position or results of operations. We have not guaranteed any third-party debt.
Guarantees
We enter into contracts in the normal course of business that include indemnification clauses. Indemnifications relating to known liabilities are recorded in the consolidated financial statements based on our best estimate of required future payments. Certain of these indemnifications relate to contingent events or occurrences, such as the imposition of additional taxes due to a change in the tax law or adverse interpretation of the tax law and indemnifications made in divestiture agreements where we indemnify the buyer for liabilities that relate to our activities prior to the divestiture and that may become known in the future. We do not believe that these contingent obligations will have a material effect on our consolidated financial position, results of operations or cash flows.
REPUBLIC SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
REPORT OF MANAGEMENT ON REPUBLIC SERVICES, INC.’S INTERNAL CONTROL OVER FINANCIAL REPORTING
We, as members of management of Republic Services, Inc., are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, our internal control systems and procedures may not prevent or detect misstatements. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
We, under the supervision of and with the participation of our management, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, based on criteria for effective internal control over financial reporting described in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, we concluded that we maintained effective internal control over financial reporting as of December 31, 2024, based on the specified criteria.
Our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.
Changes in Internal Control Over Financial Reporting
Based on an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, there has been no change in our internal control over financial reporting during the quarter
ended December 31, 2024 identified in connection with that evaluation, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2024, no director or officer or any contract, instrument or written plan for the purchase or sale of Republic securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement as defined in Item 408(c) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required by this item is incorporated by reference to the material appearing under the headings Proposal 1 - Election of Directors, Biographical Information Regarding Director Nominees, Board of Directors and Corporate Governance Matters, Delinquent Section 16(a) Reports and Executive Officers in the Proxy Statement for the 2025 Annual Meeting of Shareholders.
ITEM 11.EXECUTIVE COMPENSATION
Information required by this item is incorporated by reference to the material appearing under the headings Executive Compensation and Director Compensation in the Proxy Statement for the 2025 Annual Meeting of Shareholders.
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information required by this item is incorporated by reference to the material appearing under the headings Security Ownership of Five Percent Shareholders and Security Ownership of the Board of Directors and Management in the Proxy Statement for the 2025 Annual Meeting of Shareholders.
The following table sets forth certain information regarding equity compensation plans as of December 31, 2024 (number of securities in millions): | | | | | | | | | | | | | | | | | |
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights (b) | | Weighted Average Exercise Price of Outstanding Options and Rights (c) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in the first column) (d) |
Equity compensation plans approved by security holders (a) | 1 | | | $ | 190.57 | | | 29 | |
| Equity compensation plans not approved by security holders | — | | | — | | | — | |
| Total | 1 | | | $ | 190.57 | | | 29 | |
____________
(a)Includes our 2006 Plan, Amended and Restated 2007 Stock Incentive Plan, our 2018 Employee Stock Purchase Plan (ESPP) and our 2021 Stock Incentive Plan.
(b)Includes no stock options as all were exercised in or prior to 2020, approximately 1 million shares underlying restricted stock units, less than 1 million shares underlying performance shares and less than 1 million shares underlying purchase rights that accrue under the ESPP.
(c)Excludes restricted stock units and performance shares as these awards do not have exercise prices.
(d)The shares remaining available for future issuances include approximately 11 million shares under our 2021 Stock Incentive Plan and approximately 2 million shares under our ESPP. No further awards will be granted under the Amended and Restated 2007 Stock Incentive Plan after December 31, 2020.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required by this item is incorporated by reference to the material appearing under the headings Board of Directors and Corporate Governance Matters and Certain Relationships and Related Party Transactions in the Proxy Statement for the 2025 Annual Meeting of Shareholders.
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by this item is incorporated by reference to the material appearing under the heading Audit and Related Fees in the Proxy Statement for the 2025 Annual Meeting of Shareholders.
PART IV
ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
1. Financial Statements
Our consolidated financial statements are set forth under Part II, Item 8 of this Annual Report on Form 10-K.
2. Financial Statement Schedules
All schedules are omitted as the required information is not applicable or the information is presented in the consolidated financial statements and notes thereto in Part II, Item 8 of this Annual Report on Form 10-K.
3. Exhibits
The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC, as indicated in the description of each, File No. 1-14267 in the case of Republic and File No. 1-14705 and No. 0-19285 in the case of Allied, and File No. 1-06805 in the case of Browning-Ferris Industries, Inc. | | | | | | | | |
Exhibit Number | | Description |
| | |
| | |
| | |
| | |
| | Indenture, dated as of August 15, 2001 between Republic Services, Inc. and The Bank of New York, as trustee, including the form of notes (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed August 16, 2001). |
| | Second Supplemental Indenture, dated as of March 21, 2005, to the Indenture dated as of August 15, 2001, by and between Republic Services, Inc. and The Bank of New York, as trustee, including the form of 6.086% Note due March 15, 2035 (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005). |
| | |
| | Fourth Supplemental Indenture, dated as of May 9, 2011, to the Indenture dated as of September 8, 2009, by and among Republic Services, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, including the form of 5.700% Notes due 2041 (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K dated May 9, 2011). |
| | Indenture, dated as of November 25, 2009, by and between Republic Services, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated November 25, 2009). |
| | Third Supplemental Indenture, dated as of March 4, 2010, to the Indenture dated as of November 25, 2009, by and among Republic Services, Inc., the guarantors named therein and U.S. Bank National Association, as trustee, including the form of 6.20% Notes due 2040 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K dated March 4, 2010). |
| | Restated Indenture, dated as of September 1, 1991, by and between Browning-Ferris Industries, Inc. and First City, Texas-Houston, National Association, as trustee (incorporated by reference to Exhibit 4.22 of Allied’s Registration Statement on Form S-4/A (No. 333-61744)). |
| | First Supplemental Indenture, dated as of July 30, 1999, to the Restated Indenture dated as of September 1, 1991, by and among Allied Waste Industries, Inc., Allied Waste North America, Inc., Browning-Ferris Industries, Inc. and Chase Bank of Texas, National Association, as trustee (incorporated by reference to Exhibit 4.23 of Allied’s Registration Statement on Form S-4/A (No. 333-61744)). |
| | | | | | | | |
Exhibit Number | | Description |
| | First [sic] Supplemental Indenture, dated as of December 31, 2004, to the Restated Indenture dated as of September 1, 1991, by and among Browning-Ferris Industries, Inc., BBCO, Inc. and JP Morgan Chase Bank, National Association as trustee (incorporated by reference to Exhibit 4.33 of Allied’s Annual Report on Form 10-K for the year ended December 31, 2004). |
| | Third Supplemental Indenture, dated as of December 5, 2008, to the Restated Indenture dated as of September 1, 1991, by and among Allied Waste Industries, Inc., Allied Waste North America, Inc., Browning-Ferris Industries, LLC (successor to Browning-Ferris Industries, Inc.), BBCO, Inc., Republic Services, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated December 10, 2008). |
| | Fourth Supplemental Indenture, dated as of March 11, 2015, to the Indenture, dated as of November 25, 2009, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 3.20% Notes due 2025 (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated March 11, 2015). |
| | Fifth Supplemental Indenture, dated as of July 5, 2016, to the Indenture, dated as of November 25, 2009, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 2.900% Notes due 2026 (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated July 5, 2016). |
| | Sixth Supplemental Indenture, dated as of November 16, 2017, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 3.375% Notes due 2027 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated November 15, 2017). |
| | Form of Browning-Ferris Industries, Inc. 7.4% Debentures due 2035 (incorporated by reference to Exhibit 4 of Browning-Ferris Industries, Inc.'s Current Report on Form 8-K dated September 15, 1995). |
| | Seventh Supplemental Indenture, dated as of May 14, 2018, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 3.950% Notes due 2028 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated May 3, 2018). |
| | Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.23 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019). |
| | Ninth Supplemental Indenture, dated as of February 27, 2020, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 2.300% Notes due 2030 and the form of 3.050% Notes due 2050 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated February 21, 2020). |
| | Tenth Supplemental Indenture, dated as of August 20, 2020, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 1.450% Notes due 2031 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated August 13, 2020). |
| | Eleventh Supplemental Indenture, dated as of November 24, 2020, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 0.875% Notes due 2025 and the form of 1.750% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated November 12, 2020). |
| | Twelfth Supplemental Indenture, dated as of November 8, 2021, between Republic Services, Inc. and U.S. Bank National Association, as trustee, including the form of 2.375% Notes due 2033 (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated November 4, 2021). |
| | Form of Commercial Paper Dealer Agreement--4(a)(2) Program, dated as of May 25, 2022, between Republic Services, Inc. and the applicable dealer party thereto (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed September 1, 2022). |
| | Thirteenth Supplemental Indenture, dated as of March 28, 2023, between Republic Services, Inc. and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, including the form of 4.875% Notes due 2029 and form of 5.000% Notes due 2034 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated March 23, 2023). |
| | Fourteenth Supplemental Indenture, dated as of December 12, 2023, between Republic Services, Inc. and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, including the form of 5.000% Notes due 2033 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated December 11, 2023). |
| | | | | | | | |
Exhibit Number | | Description |
| | Fifteenth Supplemental Indenture, dated as of June 25, 2024, between Republic Services, Inc. and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, including the form of 5.000% Notes due 2029 and the form of 5.200% Notes due 2034 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated June 20, 2024). |
| | Second Amended and Restated Credit Agreement, dated as of July 26, 2024, by and among Republic Services, Inc., USE Canada Holdings, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated July 31, 2024). |
| | Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan effective May 12, 2011 (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on April 1, 2011). |
| | Republic Services, Inc. Executive Incentive Plan, as amended and restated effective October 26, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020). |
| | Form of Employee Restricted Stock Unit Agreement under the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (for awards on or after December 27, 2011) (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated December 27, 2011). |
| | Form of Non-Employee Director Restricted Stock Unit Agreement (annual vesting) under the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (for awards on or after December 27, 2011) (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated December 27, 2011). |
| | Form of Non-Employee Director Restricted Stock Unit Agreement (3 year vesting) under the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (for awards on or after December 27, 2011) (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K dated December 27, 2011). |
| | Republic Services, Inc. Deferred Compensation Plan, as amended and restated effective January 1, 2025. |
| | Republic Services, Inc. Amended and Restated Executive Incentive Plan, effective February 4, 2014 (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on March 26, 2014). |
| | Republic Services, Inc. Executive Separation Policy, as amended as of February 8, 2023 (incorporated by reference to Exhibit 10.9 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022). |
| | Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan effective May 9, 2013 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013). |
| | Offer Letter, dated July 25, 2016, by and between Catharine D. Ellingsen and Republic Services, Inc. (incorporated by reference to Exhibit 10.37 of the Company’s Annual Report on Form 10-K dated February 16, 2017). |
| | Non-Competition, Non-Solicitation, Confidentiality and Arbitration Agreement, effective February 13, 2024, by and between Catharine D. Ellingsen and Republic Services, Inc. (incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023). |
| | Republic Services, Inc. 2018 Employee Stock Purchase Plan (incorporated by reference to Annex A of the Company’s Proxy Statement on Schedule 14A filed on March 29, 2018). |
| | Offer letter, dated May 29, 2020, by and between Brian DelGhiaccio and Republic Services, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020). |
| | Non-Competition, Non-Solicitation, Confidentiality and Arbitration Agreement, effective February 13, 2024, by and between Brian DelGhiaccio and Republic Services, Inc. (incorporated by reference to Exhibit 10.20 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023). |
| | Offer letter, dated March 26, 2021, by and between Jon Vander Ark and Republic Services, Inc. (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021). |
| | Non-Competition, Non-Solicitation, Confidentiality, and Arbitration Agreement, effective February 13, 2024, by and between Jon Vander Ark and Republic Services, Inc. (incorporated by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023). |
| | Republic Services, Inc. 2021 Stock Incentive Plan (incorporated by reference to Exhibit 10.30 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020). |
| | | | | | | | |
Exhibit Number | | Description |
| | Form of Performance Share Agreement (Executive Officer) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Form of Performance Share Agreement (Other Executive) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Form of Performance Share Agreement (Non-Executive Officer EVP) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Form of Employee Restricted Stock Unit Agreement (Senior Executive) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Form of Employee Restricted Stock Unit Agreement (Senior Executive, Cliff Vesting) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Form of Employee Restricted Stock Unit Agreement (Other Employees) under the Republic Services, Inc. 2021 Stock Incentive Plan. |
| | Non-Competition, Non-Solicitation, Confidentiality, and Arbitration Agreement, effective February 13, 2024, by and between Brian A. Bales and Republic Services, Inc. (incorporated by reference to Exhibit 10.30 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023). |
| | Offer Letter, dated August 18, 2023, by and between Gregg Brummer and Republic Services, Inc.(incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024). |
| | Non-Competition, Non-Solicitation, Confidentiality and Arbitration Agreement, effective February 13, 2024, by and between Gregg Brummer and Republic Services, Inc. (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024). |
| | Amendment No. 1 to Republic Services, Inc. 2018 Employee Stock Purchase Plan, effective February 4, 2025. |
| | Amendment No. 1 to Republic Services, Inc. 2021 Stock Incentive Plan, effective February 4, 2025. |
| | |
| | Insider Trading Procedures. |
| | Republic Services Share Repurchase Policy. |
| | Subsidiaries of the Company. |
| | Consent of Ernst & Young LLP. |
| | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
| | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
| | Section 1350 Certification of Chief Executive Officer. |
| | Section 1350 Certification of Chief Financial Officer. |
| | Amended and Restated Clawback Policy, dated July 19, 2023 (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023). |
| 101.INS* | | XBRL Instance Document. - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH* | | XBRL Taxonomy Extension Schema Document. |
| 101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB* | | XBRL Taxonomy Extension Labels Linkbase Document. |
| 101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document. |
| 104* | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith.
** This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
+ Indicates a management or compensatory plan or arrangement.
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed as exhibits to this Form 10-K certain long-term debt instruments under which the total amount of securities authorized does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of any such instrument to the SEC upon request.
ITEM 16.FORM 10-K SUMMARY
None.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | | | | | | | |
| Date: | February 13, 2025 | | REPUBLIC SERVICES, INC.
|
| | | By: | | /s/ JON VANDER ARK |
| | | | | Jon Vander Ark |
| | | | | President and
Chief Executive Officer
(Principal Executive Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| /s/ JON VANDER ARK | | President, Chief Executive Officer
and Director
(Principal Executive Officer) | | February 13, 2025 |
| Jon Vander Ark | | |
| | | | |
/s/ BRIAN DELGHIACCIO | | Executive Vice President,
Chief Financial Officer
(Principal Financial Officer) | | February 13, 2025 |
Brian DelGhiaccio | | |
| | | | |
| /s/ ELYSE M. CARLSEN | | Vice President and
Chief Accounting Officer
(Principal Accounting Officer) | | February 13, 2025 |
| Elyse M. Carlsen | | |
| | | | |
| /s/ MANUEL KADRE | | Chairman of the Board of Directors | | February 13, 2025 |
| Manuel Kadre | | |
| | | | |
| /s/ TOMAGO COLLINS | | Director | | February 13, 2025 |
| Tomago Collins | | |
| | | | |
| /s/ MICHAEL A. DUFFY | | Director | | February 13, 2025 |
| Michael A. Duffy | | |
| | | | |
| /s/ THOMAS W. HANDLEY | | Director | | February 13, 2025 |
| Thomas W. Handley | | |
| | | | |
| /s/ JENNIFER M. KIRK | | Director | | February 13, 2025 |
| Jennifer M. Kirk | | |
| | | | |
| /s/ MICHAEL LARSON | | Director | | February 13, 2025 |
| Michael Larson | | |
| | | | |
| /s/ N. THOMAS LINEBARGER | | Director | | February 13, 2025 |
| N. Thomas Linebarger | | |
| | | | |
| /s/ MEG REYNOLDS | | Director | | February 13, 2025 |
| Meg Reynolds | | |
| | | | | | | | | | | | | | |
| /s/ JAMES P. SNEE | | Director | | February 13, 2025 |
| James P. Snee | | |
| | | | |
| /s/ BRIAN S. TYLER | | Director | | February 13, 2025 |
| Brian S. Tyler | | |
| | | | |
| /s/ SANDRA M. VOLPE | | Director | | February 13, 2025 |
| Sandra M. Volpe | | |
| | |
| /s/ KATHARINE B. WEYMOUTH | | Director | | February 13, 2025 |
| Katharine B. Weymouth | | |
| | | | |
Similar companies
See also WASTE MANAGEMENT INC -
Annual report 2022 (10-K 2022-12-31)
Annual report 2024 (10-Q 2024-03-31)
See also Waste Connections, Inc. -
Annual report 2022 (10-K 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
See also GFL Environmental Inc.
See also CASELLA WASTE SYSTEMS INC -
Annual report 2022 (10-K 2022-12-31)
Annual report 2023 (10-Q 2023-09-30)
See also Vivakor, Inc. -
Annual report 2022 (10-K 2022-12-31)
Annual report 2025 (NT 10-Q 2025-06-30)
Open main menu