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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our audited consolidated financial statements and the notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. This discussion may contain forward-looking statements that anticipate results that are subject to uncertainty. We discuss in more detail various factors that could cause actual results to differ from expectations in Part I, Item 1A, Risk Factors in this Annual Report on Form 10-K.

For further discussion regarding our results of operations for the year ended December 31, 2020 as compared to the year ended December 31, 2019, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Impact of the COVID-19 Pandemic

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

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

In April 2020, we launched our Committed to Serve initiative and committed $20 million to support frontline employees and

their families, as well as small business customers in the local communities where we serve. In addition to this initiative, we

have experienced an increase in certain costs of doing business as a direct result of the COVID-19 pandemic, including costs

for additional safety equipment and hygiene products and increased facility and equipment cleaning. These costs are intended to

assist in protecting the safety of our frontline employees as we continue to provide an essential service to our customers. In

2020 and 2021, we recognized our frontline employees for their commitment and contributions to their communities during the pandemic with awards that were paid in January 2021 and November 2021, respectively. In addition, we incurred incremental costs associated with expanding certain aspects of our existing healthcare programs. We may continue to incur similar costs in future years, although we expect the annual amount of such costs to be less than those incurred in 2020.

The effects of the COVID-19 pandemic on our business are described in more detail in the Results of Operations discussion in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Recent Developments

Acquisition of US Ecology

On February 8, 2022, we entered into a definitive agreement to acquire all outstanding shares of US Ecology, Inc. (US Ecology) in a transaction valued at approximately $2.2 billion, including debt. US Ecology is a leading provider of environmental solutions offering treatment, recycling and disposal of hazardous, non-hazardous and specialty waste. We intend to finance the transaction using existing and new sources of debt.

The guidance included herein does not contemplate the impact from the pending acquisition of US Ecology, which is subject to regulatory and other approvals.

2022 Financial Guidance

In 2022, we will focus on driving profitable growth, making disciplined acquisition investments, maintaining an inclusive and engaging culture for our people, delivering a superior customer experience, and advancing technology to drive operational excellence. Our team remains focused on executing our strategy to deliver consistent earnings and free cash flow growth, and improving return on invested capital, while partnering with customers to create a more sustainable world. We are committed to maintaining an efficient capital structure, preserving our investment grade credit ratings and increasing cash returned to our shareholders.

Our guidance is based on current economic conditions and does not assume any significant changes in the overall economy in 2022. Specific guidance follows:

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Revenue

We expect an increase in average yield of approximately 3.4% and volume growth to be in a range of 1.5% to 2.0%.

Adjusted Diluted Earnings per Share

The following is a summary of anticipated adjusted diluted earnings per share for the year ending December 31, 2022 compared to the actual adjusted diluted earnings per share for the year ended December 31, 2021. Adjusted diluted earnings per share is not a measure determined in accordance with U.S. GAAP:

Diluted earnings per share $ 4.53 to 4.60 $ 4.04

Restructuring charges 0.05 0.04

Loss on business divestitures and impairments, net — 0.02

Accelerated vesting of compensation expense for CEO transition — 0.07

Adjusted diluted earnings per share $ 4.58 to 4.65 $ 4.17

We believe that the presentation of adjusted diluted earnings per share provides an understanding of operational activities before the financial effect of certain items. We use this measure, and believe investors will find it helpful, in understanding the ongoing performance of our operations separate from items that have a disproportionate effect on our results for a particular period. We have incurred comparable charges and costs in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Our definition of adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies.

The guidance set forth above constitutes forward-looking information and is not a guarantee of future performance. The

guidance is based upon the current beliefs and expectations of our management and is subject to significant risk and

uncertainties that could cause actual results to differ materially from those shown above. See Item 1A. Risk Factors - Disclosure Regarding Forward-Looking Statements.

Overview

Republic is one of the largest providers of environmental services in the United States, as measured by revenue. As of December 31, 2021, we operated facilities in 41 states through 356 collection operations, 239 transfer stations, 198 active landfills, 71 recycling processing centers, 3 treatment, recovery and disposal facilities, 3 treatment, storage and disposal facilities (TSDF), 6 salt water disposal wells, and 7 deep injection wells. We are engaged in 77 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 124 closed landfills.

Revenue for the year ended December 31, 2021 increased by 11.2% to $11,295.0 million compared to $10,153.6 million in 2020. This change in revenue is due to increased volume of 3.8%, average yield of 2.9%, acquisitions, net of divestitures of 2.8%, recycling processing and commodity sales of 1.1%, and fuel recovery fees of 0.8%, partially offset by decreased environmental solutions revenue of 0.1%. Additionally, revenue decreased 0.1% due to one less workday in 2021 as compared to 2020.

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The following table summarizes our revenue, costs and expenses for the years ended December 31, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Expenses:

Amortization of other intangible assets 33.3 0.3 21.2 0.2

Withdrawal costs - multiemployer pension funds — — 34.5 0.3

Loss on business divestitures and impairments, net 0.5 — 77.7 0.8

Our pre-tax income was $1,575.1 million for the year ended December 31, 2021, compared to $1,142.7 million in 2020. Our net income attributable to Republic Services, Inc. was $1,290.4 million, or $4.04 per diluted share for 2021, compared to $967.2 million, or $3.02 per diluted share, for 2020.

During 2021 and 2020, we recorded a number of charges, other expenses and benefits that impacted our pre-tax income, net income attributable to Republic Services, Inc. (net income – Republic) and diluted earnings per share as noted in the following table (in millions, except per share data). Additionally, see our Results of Operations section of this Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of other items that impacted our earnings during the years ended December 31, 2021 and 2020. For comparative purposes, prior year amounts have been reclassified to conform to current year presentation.

Loss on extinguishment of debt and other related costs — — — 99.1 73.0 0.23

Withdrawal costs - multiemployer pension funds — — — 34.5 25.5 0.08

Bridgeton insurance recovery — — — (10.8) (8.2) (0.03)

We believe that presenting adjusted pre-tax income, adjusted net income – Republic, and adjusted diluted earnings per share, which are not measures determined in accordance with U.S. GAAP, provide an understanding of operational activities before the financial impact of certain items. We use these measures, and believe investors will find them helpful, in understanding the ongoing performance of our operations separate from items that have a disproportionate impact on our results for a particular period. We have incurred comparable charges and costs in prior periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Our definitions of adjusted pre-tax income, adjusted net income – Republic, and adjusted diluted earnings per share may not be comparable to similarly titled measures presented by other companies. Further information on each of these adjustments is included below.

Loss on extinguishment of debt and other related costs. During 2020, we incurred a loss on the early extinguishment of debt and other related costs related to the early extinguishment of our $600.0 million 5.250% senior notes due November 2021 (the 2021 Notes) and our $850.0 million 3.550% senior notes due June 2022 (the 2022 Notes), and to redeem $250.0 million of the $550.0 million outstanding 4.750% senior notes due May 2023 (the 2023 Notes). We paid total cash premiums of $99.1 million and

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incurred non-cash charges related to the proportional share of unamortized discounts and deferred issuance costs of $2.8 million. The unamortized proportional share of certain cash flow hedges reclassified to earnings as non-cash interest expense was $1.8 million, and the proportional share of our fair value hedges (related to the 2023 Notes) that were dedesignated and recognized in earnings as a reduction to non-cash interest expense was $4.7 million. During 2021, we did not incur a loss on the early extinguishment of debt.

Restructuring charges. In 2020, we incurred costs related to the redesign of certain back-office software systems, which continued into 2021. In addition, in July 2020, we eliminated certain back-office support positions in response to a decline in the underlying demand for services resulting from the COVID-19 pandemic. In 2021 and 2020, we incurred restructuring charges of $16.6 million and $20.0 million, respectively. We paid $17.2 million and $15.5 million during 2021 and 2020, respectively, related to these restructuring efforts.

In 2022, we expect to incur additional restructuring charges of approximately $20 million primarily related to the redesign of certain of our back-office software systems. Substantially all of these restructuring charges will be recorded in our corporate entities and other segment.

Loss on business divestitures and impairments, net. During 2021, we recorded a loss of $0.5 million related to business divestitures and asset impairments in certain markets. Additionally, we recognized an increase in our deferred tax provision of $5.5 million due to a change in our U.S. operational footprint as a result of certain acquisitions that closed during the period.

During 2020, we recorded a net loss on business divestitures and impairments of $77.7 million, including $42.6 million resulting from management’s decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

Withdrawal costs - multiemployer pension funds. During 2020, we recorded charges to earnings of $34.5 million for withdrawal events at multiemployer pension funds to which we contribute. As we obtain updated information regarding multiemployer pension funds, the factors used in deriving our estimated withdrawal liabilities will be subject to change, which may adversely impact our reserves for withdrawal costs.

Bridgeton insurance recovery. During 2020, we recognized an insurance recovery of $10.8 million, related to our closed Bridgeton Landfill in Missouri, which we recognized as a reduction of remediation expenses in our cost of operations.

Accelerated vesting of compensation expense for CEO transition. In June 2021, Donald W. Slager retired as Chief Executive Officer (CEO) of Republic Services, Inc. During 2021, we recognized a charge of $22.0 million primarily related to the accelerated vesting of his compensation awards that were previously scheduled to vest in 2022 and beyond.

Results of Operations

Revenue

We generate revenue by providing environmental services to our customers, including the collection and processing of recyclable materials, collection, transfer and disposal of non-hazardous solid waste, and other environmental solutions. Our residential, small-container and large-container collection operations in some markets are based on long-term contracts with municipalities. Certain of our municipal contracts have annual price escalation clauses that are tied to changes in an underlying base index such as a consumer price index. We generally provide small-container and large-container collection services to customers under contracts with terms up to three years. Our transfer stations and landfills generate revenue from disposal or tipping fees charged to third parties. Our recycling processing centers generate revenue from tipping fees charged to third parties and the sale of recycled commodities. Our revenue from environmental solutions consists mainly of fees we charge for

disposal of hazardous and non-hazardous solid and liquid material and in-plant services, such as transportation and logistics,

including at our TSDFs. 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.

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The following table reflects our revenue by service line for the years ended December 31, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Collection:

Other:

The following table reflects changes in components of our revenue, as a percentage of total revenue, for the years ended December 31, 2021 and 2020:

Average yield 2.9 % 2.6 %

Fuel recovery fees 0.8 (0.7)

Change in workdays (0.1) —

Recycling processing and commodity sales 1.1 0.3

Environmental solutions (0.1) (0.9)

Total internal growth 8.4 (1.8)

Acquisitions / divestitures, net 2.8 0.4

Core price 5.0 % 4.8 %

Average yield is defined as revenue growth from the change in average price per unit of service, expressed as a percentage. Core price is defined as price increases to our customers and fees, excluding fuel recovery, net of price decreases to retain customers. We also measure changes in average yield and core price as a percentage of related-business revenue, defined as total revenue excluding recycled commodities, fuel recovery fees and environmental solutions revenue to determine the effectiveness of our pricing strategies. Average yield as a percentage of related-business revenue was 3.1% and 2.8% for 2021 and 2020, respectively. Core price as a percentage of related-business revenue was 5.3% and 5.1% for 2021 and 2020, respectively.

During 2021, we experienced the following changes in our revenue as compared to 2020:

•Average yield increased revenue by 2.9% due to positive pricing changes in all lines of business.

•The fuel recovery fee program, which mitigates our exposure to increases in fuel prices, increased revenue by 0.8%, primarily due to an increase in fuel prices compared to the same period in 2020 and an increase in the total revenue subject to the fuel recovery fees.

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•Volume increased revenue by 3.8% during 2021 as compared to 2020 primarily due to volume growth in our landfill, transfer, and small- and large-container collection lines of business, partially offset by a decline in residential collection volumes. The volume increase in our landfill line of business is primarily attributable to increased solid and special waste event driven volumes. In mid-March 2020, certain customers in these lines of business began adjusting their services levels as a result of the COVID-19 pandemic. This decline in service activity peaked in the first half of April 2020 and sequentially improved thereafter. These increases were partially offset by one less workday as compared to 2020.

•Recycling processing and commodity sales increased revenue by 1.1% primarily due to an increase in overall commodity prices as compared to 2020. The average price for recycled commodities, excluding glass and organics for 2021 was $187 per ton compared to $96 per ton for 2020.

Changing market demand for recycled commodities causes volatility in commodity prices. At current volumes and mix of materials, we believe a $10 per ton change in the price of recycled commodities will change annual revenue and operating income by approximately $22 million and $10 million, respectively.

•During 2021, environmental solutions decreased revenue by 0.1% primarily due to a decrease in rig counts, drilling activity, and the delay of in-plant project work as a result of lower demand for crude oil which began in 2020.

•Acquisitions, net of divestitures, increased revenue by 2.8% due to our continued growth strategy of acquiring privately held environmental services companies that complement our existing business platform.

Cost of Operations

Cost of operations includes labor and related benefits, which consists of salaries and wages, health and welfare benefits, incentive compensation and payroll taxes. It also includes transfer and disposal costs representing tipping fees paid to third party disposal facilities and transfer stations; maintenance and repairs relating to our vehicles, equipment and containers, including related labor and benefit costs; transportation and subcontractor costs, which include costs for independent haulers that transport our material to disposal facilities and costs for local operators who provide environmental services associated with our National Accounts in markets outside our standard operating areas; fuel, which includes the direct cost of fuel used by our vehicles, net of fuel tax credits; disposal fees and taxes, consisting of landfill taxes, host community fees and royalties; landfill operating costs, which includes financial assurance, leachate disposal, remediation charges and other landfill maintenance costs; risk management costs, which include insurance premiums and claims; cost of goods sold, which includes material costs paid to suppliers; and other, which includes expenses such as facility operating costs, equipment rent and gains or losses on sale of assets used in our operations.

The following table summarizes the major components of our cost of operations for the years ended December 31, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Bridgeton insurance recovery — — (10.8) (0.1)

These cost categories may change from time to time and may not be comparable to similarly titled categories presented by other companies. As such, you should take care when comparing our cost of operations by component to that of other companies and of ours for prior periods.

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Our cost of operations increased for the year ended December 31, 2021 compared to the same period in 2020 as a result of the following:

•Labor and related benefits increased in aggregate dollars due to higher hourly and salaried wages as a result of annual merit increases and an increase in service levels attributable to the economic recovery from the COVID-19 pandemic. This increase was partially offset by one less workday during 2021 as compared to 2020.

•Transfer and disposal costs increased in aggregate dollars as a result of higher collection volumes and an increase in third party disposal rates. During both 2021 and 2020, approximately 68% of the total solid waste volume we collected was disposed at landfill sites that we own or operate (internalization).

•Maintenance and repairs expense increased in aggregate dollars due to an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

•Transportation and subcontract costs increased primarily due to higher collection and transfer station volumes, acquisition-related activity, and increased subcontract work attributable to an increase in non-core revenues, partially offset by one less workday during 2021 as compared to 2020.

•Fuel costs increased due to an increase in the average diesel fuel cost per gallon. The national average cost per gallon for diesel fuel in 2021 was $3.29 compared to $2.55 for 2020.

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 $26 million per year. Offsetting these changes in fuel expense would be 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 $26 million per year.

•Disposal fees and taxes increased in aggregate dollars due to an increase in service levels attributable to the economic recovery from the COVID-19 pandemic.

•Risk management expenses increased primarily due to unfavorable actuarial development in our auto liability claims as well as higher premium costs, partially offset by favorable workers' compensation development in prior year programs.

•During 2020, we recognized an insurance recovery of $10.8 million, related to our closed Bridgeton Landfill in Missouri, which we recognized as a reduction of remediation expenses included in our cost of operations in our consolidated statement of income.

Depreciation, Amortization and Depletion of Property and Equipment

The following table summarizes depreciation, amortization and depletion of property and equipment for the years ended December 31, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Depreciation and amortization of property and equipment increased primarily due to additional assets acquired with our acquisitions, an increase in the cost of replacement vehicles and container assets, as well as increased capital expenditures on vehicles to support volume growth.

Landfill depletion and amortization increased due to higher landfill disposal volumes, primarily driven by increased solid and special waste volumes, coupled with increased depletion rates. Additionally, we recognized favorable amortization adjustments related to our asset retirement obligations in 2020 that did not recur in 2021.

Amortization of Other Intangible Assets

Expenses for amortization of other intangible assets were $33.3 million, or 0.3% of revenue, for the year ended December 31, 2021, compared to $21.2 million, or 0.2% of revenue for 2020. Our other intangible assets primarily relate to customer relationships and, to a lesser extent, non-compete agreements. Amortization expense increased due to additional assets acquired as a result of our business acquisitions.

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Amortization of Other Assets

Expenses for amortization of other assets were $40.5 million, or 0.4% of revenue, for the year ended December 31, 2021, compared to $38.8 million, or 0.4% of revenue, for 2020. Our other assets primarily relate to the prepayment of fees and capitalized implementation costs associated with cloud-based hosting arrangements.

Accretion Expense

Accretion expense was $82.7 million, or 0.7% of revenue, and $82.9 million, or 0.8% of revenue, for the years ended December 31, 2021 and 2020, respectively. Accretion expense has remained relatively unchanged as our asset retirement obligations remained relatively consistent period over period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include salaries, health and welfare benefits, and incentive compensation for corporate and field general management, field support functions, sales force, accounting and finance, legal, management information systems, and clerical and administrative departments. Other expenses include rent and office costs, fees for professional services provided by third parties, legal settlements, marketing, investor and community relations services, directors’ and officers’ insurance, general employee relocation, travel, entertainment and bank charges. Restructuring charges are excluded from selling, general and administrative expenses and are discussed separately.

The following table summarizes our selling, general and administrative expenses for the years ended December 31, 2021 and 2020 (in millions of dollars and as a percentage of revenue):

Accelerated vesting of compensation expense for CEO transition 22.0 0.2 — —

These cost categories may change from time to time and may not be comparable to similarly titled categories used by other companies. As such, you should take care when comparing our selling, general and administrative expenses by cost component to those of other companies and of ours for prior periods.

The most significant items affecting our selling, general and administrative expenses during 2021 as compared to 2020 are summarized below:

•Salaries and related benefits increased primarily due to higher management incentive expenses as a result of outperforming our annual incentive metrics.

•In 2021, the provision for doubtful accounts decreased as a result of an improved trend in historical collections. Our days sales outstanding changed from 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021 compared to 38.6, or 26.4 days net of deferred revenue, as of December 31, 2020.

•Other selling, general and administrative expenses increased during 2021, primarily due to an increase in recruiting, advertising, and bank fees. Meetings and events expenses also increased during 2021 following a decrease in 2020 as a result of the COVID-19 pandemic. These increases were partially offset by a decrease in professional fees, acquisition deal costs and unfavorable changes in certain legal reserves during 2020, which did not recur in 2021.

•During 2021, we recognized a charge of $22.0 million primarily related to the accelerated vesting of Donald W. Slager's compensation awards that were previously scheduled to vest in 2022 and beyond as a result of his retirement as Chief Executive Officer (CEO) of Republic Services, Inc. in June 2021.

Withdrawal Costs - Multiemployer Pension Funds

During 2020, we recorded charges to earnings of $34.5 million for withdrawal events at multiemployer pension funds to which we contribute. We paid $34.4 million during 2020 relative to these withdrawal events. As we obtain updated information regarding multiemployer pension funds, the factors used in deriving our estimated withdrawal liabilities will be subject to change, which may adversely impact our reserves for withdrawal costs.

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Loss (Gain) on Business Divestitures and Impairments, Net

We strive to have a number one or number two market position in each of the markets we serve, or have a clear path on how we will achieve a leading market position over time. Where we cannot establish a leading market position, or where operations are not generating acceptable returns, we may decide to divest certain assets and reallocate resources to other markets. Business divestitures could result in gains, losses or impairment charges that may be material to our results of operations in a given period.

During 2021, we recorded a net loss on business divestitures and impairments of $0.5 million, which was due to business divestitures in certain markets. During 2020, we recorded a net loss on business divestitures and impairments of $77.7 million, including $42.6 million resulting from management's decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

Restructuring Charges

In 2020, we incurred costs related to the redesign of certain back-office software systems, which continued into 2021. In addition, in July 2020, we eliminated certain back-office support positions in response to a decline in the underlying demand for services resulting from the COVID-19 pandemic. During 2021 and 2020, we incurred restructuring charges of $16.6 million and $20.0 million, respectively. We paid $17.2 million and $15.5 million during 2021 and 2020, respectively, related to these restructuring efforts.

Interest Expense

The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions (in millions of dollars):

Less: capitalized interest (5.0) (6.2)

Total interest expense for 2021 decreased compared to 2020 primarily due to lower interest rates on our floating and fixed rate debt. The decrease attributable to our fixed rate debt is primarily due to the issuance of senior notes in 2020 with coupons ranging from 0.875% to 3.050%, the proceeds of which were used to repay outstanding senior notes with coupons ranging from 3.550% to 5.500%.

During 2021 and 2020, cash paid for interest, excluding net swap settlements for our fixed to floating interest rate swaps, was $249.4 million and $325.1 million, respectively.

Loss on Extinguishment of Debt

During 2020, we incurred a $101.9 million loss on the early extinguishment of debt. We paid total cash premiums during the year totaling $99.1 million and incurred non-cash charges related to the proportional share of unamortized discounts and deferred issuance costs of $2.8 million.

Income Taxes

Our provision for income taxes was $282.8 million and $173.1 million for 2021 and 2020, respectively. Our effective income tax rate was 18.0% and 15.2% for 2021 and 2020, respectively. We made income tax payments (net of refunds) of approximately $300 million and $124 million for 2021 and 2020, respectively. Income taxes paid in 2021 and 2020 reflect benefits from tax credits from our continuing investments in solar energy. For 2020, cash taxes paid reflect benefits from 100% bonus depreciation on qualified assets.

During 2021, we acquired non-controlling interests in limited liability companies established to own solar energy assets that qualified for investment tax credits under Section 48 of the Internal Revenue Code. We account for these investments using the equity method of accounting 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 2021 tax provision reflects a benefit of approximately $126 million due to the tax credits related to these investments.

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Our 2020 tax provision was reduced by $11.6 million from excess tax benefits related to stock compensation, approximately $100 million related to the tax credits from our non-controlling interest in limited liability companies established to own solar energy assets, $17.2 million for adjustments to our valuation allowance due to the realizability of certain state loss carryforwards, and $8.2 million due to the realization of additional federal and state benefits as well as adjustments to deferred taxes due to the completion of our 2019 tax returns.

We have deferred tax assets related to state net operating loss carryforwards with an estimated tax effect of approximately $87 million available as of December 31, 2021. These state net operating loss carryforwards expire at various times between 2022 and 2041. 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, 2021, we have provided a valuation allowance of approximately $43 million.

Reportable Segments

Our senior management evaluates the financial performance of our operations through three operating segments. Group 1 primarily consists of geographic areas located in the western United States, and Group 2 primarily consists of geographic areas located in the southeastern and mid-western United States, and the eastern seaboard of the United States. Our Environmental Solutions operating segment, which provides environmental solutions for daily operations of industrial, petrochemical and refining facilities, is aggregated with Corporate entities and other as it only represents approximately 2% of our consolidated revenue. Each operating segment provides integrated environmental services, including collection, transfer, recycling, and disposal.

Summarized financial information concerning our reportable segments for the years ended December 31, 2021 and 2020 is shown in the following table (in millions of dollars and as a percentage of revenue in the case of operating margin):

Financial information for the year ended December 31, 2020 reflects the transfer of our Environmental Solutions operating segment from Group 2 to Corporate entities and other, to align with how our chief operating decision maker began evaluating our operations in December 2020.

Corporate entities and other include legal, tax, treasury, information technology, risk management, human resources, closed landfills, other administrative functions and environmental solutions. National Accounts revenue included in corporate entities 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. Consequently, substantially all of this revenue is offset with related subcontract costs, which are recorded in cost of operations.

Significant changes in the revenue and operating margins of our reportable segments for 2021 compared to 2020 are discussed below.

Group 1

Revenue for 2021 increased 9.9% from 2020 due to an increase in both average yield and volume in all lines of business.

Operating income in Group 1 increased from $1,343.3 million for 2020, or a 26.6% operating margin, to $1,495.7 million for 2021, or a 26.9% operating margin. Operating income margin during 2021 was favorably impacted by the increase in revenue

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attributable to economic recovery coupled with the effective management of certain operating costs. This benefit was partially offset by an increase in fuel costs.

Group 2

Revenue for 2021 increased 11.3% from 2020 due to an increase in average yield in all lines of business. Additionally, volume increased in our landfill, transfer station, and small- and large-container collection lines of business, partially offset by volume declines in our residential line of business.

Operating income in Group 2 increased from $966.8 million for 2020, or a 20.2% operating margin, to $1,135.7 million for 2021, or a 21.3% operating margin. Operating income margin for 2021 was favorably impacted by the increase in revenue attributable to economic recovery coupled with the effective management of certain operating costs. This benefit was partially offset by an increase in fuel costs.

Corporate Entities and Other

The Corporate entities and other operating loss decreased from $601.0 million for 2020 to $555.2 million for 2021. During 2021, we recorded a net loss on business divestitures and impairments of $0.5 million. During 2020, we recorded a net loss on business divestitures and impairments of $77.7 million, including $42.6 million resulting from management’s decision to exit certain product offerings and geographic basins in our upstream environmental solutions business.

Landfill and Environmental Matters

Our landfill costs include daily operating expenses, costs of capital for cell development, costs for final capping, closure and post-closure, and the legal and administrative costs of ongoing environmental compliance. Daily operating expenses include leachate treatment, transportation and disposal costs, methane gas and groundwater monitoring and system maintenance costs, interim cap maintenance costs, and costs associated with applying daily cover materials. We expense all indirect landfill development costs as they are incurred. We use life cycle accounting and the units-of-consumption method to recognize certain direct landfill costs related to landfill development. In life cycle accounting, certain direct costs are capitalized and charged to depletion expense based on the consumption of cubic yards of available airspace. These costs include all costs to acquire and construct a site, including excavation, natural and synthetic liners, construction of leachate collection systems, installation of methane gas collection and monitoring systems, installation of groundwater monitoring wells, and other costs associated with acquiring and developing the site. Obligations associated with final capping, closure and post-closure are capitalized and amortized on a units-of-consumption basis as airspace is consumed.

Cost and airspace estimates are developed at least annually by engineers. Our operating and accounting personnel use these estimates to adjust the rates we use to expense capitalized costs. Changes in these estimates primarily relate to changes in cost estimates, available airspace, inflation and applicable regulations. Changes in available airspace include changes in engineering estimates, changes in design and changes due to the addition of airspace lying in expansion areas that we believe have a probable likelihood of being permitted. Changes in engineering estimates typically include modifications to the available disposal capacity of a landfill based on a refinement of the capacity calculations resulting from updated information.

Available Airspace

As of December 31, 2021 and 2020, we owned or operated 198 and 186 active solid waste landfills, respectively, with total available disposal capacity estimated to be 5.0 billion in-place cubic yards in both years. For these landfills, the following table reflects changes in capacity and remaining capacity, as measured in cubic yards of airspace:

Cubic yards (in millions):

Number of sites:

Probable expansion airspace 11 2 (2) 11

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Cubic yards (in millions):

Number of sites:

Probable expansion airspace 12 2 (3) 11

Total available disposal capacity represents the sum of estimated permitted airspace plus an estimate of probable expansion airspace. Engineers develop these estimates at least annually using information provided by annual aerial surveys. Before airspace included in an expansion area is determined to be probable expansion airspace and, therefore, included in our calculation of total available disposal capacity, it must meet all of our expansion criteria. See Note 2, Summary of Significant Accounting Policies, and Note 8, Landfill and Environmental Costs, of the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information. Also see our Critical Accounting Judgments and Estimates section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

As of December 31, 2021, 11 of our landfills met all of our criteria for including their probable expansion airspace in their total available disposal capacity. At projected annual volumes, these 11 landfills have an estimated remaining average site life of 33 years, including probable expansion airspace. The average estimated remaining life of all of our landfills is 59 years. We have other expansion opportunities that are not included in our total available airspace because they do not meet all of our criteria for treatment as probable expansion airspace.

The following table reflects the estimated operating lives of our active landfill sites based on available and probable disposal capacity using current annual volumes as of December 31, 2021:

Final Capping, Closure and Post-Closure Costs

As of December 31, 2021, accrued final capping, closure and post-closure costs were $1,507.3 million, of which $68.4 million were current and $1,438.9 million were long-term as reflected in our consolidated balance sheets in accrued landfill and environmental costs included in Part II, Item 8 of this Annual Report on Form 10-K.

Remediation and Other Charges for Landfill Matters

It is reasonably possible that we will need to adjust our accrued landfill and environmental liabilities to reflect the effects of new or additional information, to the extent that such information impacts the costs, timing or duration of the required actions. Future changes in our estimates of the costs, timing or duration of the required actions could have a material adverse effect on our consolidated financial position, results of operations and cash flows.

In 2020, we recognized an insurance recovery of $10.8 million related to our closed Bridgeton Landfill in Missouri as a reduction of remediation expenses included in our cost of operations.

For a description of our significant remediation matters, see Note 8, Landfill and Environmental Costs, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

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Investment in Landfills

As of December 31, 2021, we expect to spend an estimated additional $9.6 billion on existing landfills, primarily related to cell construction and environmental structures, over their remaining lives. Our total expected investment, excluding non-depletable land, estimated to be $13.8 billion, or $2.75 per cubic yard, is used in determining our depletion and amortization expense based on airspace consumed using the units-of-consumption method.

The following table reflects our future expected investment as of December 31, 2021 (in millions):

Balance as of December 31, 2021 ExpectedFutureInvestment TotalExpectedInvestment

Non-depletable landfill land $ 197.7 $ — $ 197.7

Construction-in-progress - landfill 279.3 — 279.3

Accumulated depletion and amortization (4,625.6) — (4,625.6)

The following table reflects our net investment in our landfills, excluding non-depletable land, and our depletion, amortization and accretion expense for the years ended December 31, 2021 and 2020:

Number of landfills owned or operated 198 186

Net investment, excluding non-depletable land (in millions) $ 4,193.3 $ 4,046.0

Net investment per cubic yard $ 0.84 $ 0.81

Landfill depletion and amortization expense (in millions) $ 377.5 $ 323.0

Accretion expense (in millions) 82.7 82.9

Airspace consumed (in millions of cubic yards) 79.3 76.1

During 2021 and 2020, our average compaction rate was approximately 2,000 pounds per cubic yard based primarily on a three-year historical moving average.

Property and Equipment

The following tables reflect the activity in our property and equipment accounts for the years ended December 31, 2021 and 2020 (in millions of dollars):

Gross Property and Equipment

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Accumulated Depreciation, Amortization and Depletion

Gross Property and Equipment

Accumulated Depreciation, Amortization and Depletion

Liquidity and Capital Resources

Cash and Cash Equivalents

The following is a summary of our cash and cash equivalents and restricted cash and marketable securities balances as of December 31:

Cash and cash equivalents $ 29.0 $ 38.2

Restricted cash and marketable securities 139.0 149.1

Less: restricted marketable securities (62.4) (73.1)

Our restricted cash and marketable securities include, among other things, restricted cash related to proceeds from the issuance of tax-exempt bonds that will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, restricted cash and marketable securities pledged to regulatory agencies and governmental entities as financial guarantees of our performance under certain collection, landfill and transfer station contracts and permits, and relating to our final capping, closure and post-closure obligations at our landfills, and restricted cash and marketable securities related to our insurance obligations.

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The following table summarizes our restricted cash and marketable securities as of December 31:

Financing proceeds $ 12.4 $ —

Capping, closure and post-closure obligations 42.4 31.5

Total restricted cash and marketable securities $ 139.0 $ 149.1

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) share repurchases, (5) repayments to service debt and other long-term obligations, and (6) payments for asset retirement obligations and environmental liabilities.

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 spend approximately $1.3 billion on capital expenditures in 2022.

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, 2021, the amount of total future lease payments under operating and finance leases was $315.4 million and $433.6 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 solid waste companies and environmental solutions businesses that complement our existing business platform. We continue to invest in value-enhancing acquisitions in existing markets. In 2022, we expect to invest at least $500 million in acquisitions.

Dividend Payments

In October 2021, our Board of Directors approved a quarterly dividend of $0.46 per share. Aggregate cash dividends declared were $563.0 million for the year ended December 31, 2021. As of December 31, 2021, we recorded a quarterly dividend payable of $145.9 million to shareholders of record at the close of business on January 3, 2022, which was paid on January 14, 2022.

Share Repurchases

In October 2020, our Board of Directors approved a $2.0 billion share repurchase authorization effective starting January 1, 2021 and extending through December 31, 2023. 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, 2021, the remaining authorized purchase capacity under our October 2020 repurchase program was $1.7 billion.

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.

As of December 31, 2021, the total principal value of our debt was $9.7 billion of which $8.2 million is due in 2022.

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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, consisting 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, 2021 such purchase commitments, which do not qualify for recognition on our Consolidated Balance Sheets, amount to $772.3 million, of which $142.6 million is short-term.

For additional detail regarding our debt and known contractual and other obligation, 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, 2021, our future obligations for final capping, closure and post-closure costs totaled $1.5 billion of which $68.4 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, 2021, our environmental liabilities totaled $454.9 million of which $56.1 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.

Summary of Cash Flow Activity

The major components of changes in cash flows for 2021 and 2020 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, 2021 and 2020 (in millions of dollars):

Net cash provided by operating activities $ 2,786.7 $ 2,471.6

Net cash used in investing activities $ (2,466.1) $ (1,922.8)

Net cash used in financing activities $ (329.2) $ (612.0)

Cash Flows Provided by Operating Activities

The most significant items affecting the comparison of our operating cash flows for 2021 and 2020 are summarized below.

Changes in assets and liabilities, net of effects from business acquisitions and divestitures, decreased our cash flow from operations by $94.0 million in 2021, compared to a decrease of $129.9 million in 2020, primarily as a result of the following:

•Our accounts receivable, exclusive of the change in allowance for doubtful accounts and customer credits, increased $135.4 million during 2021, compared to a $13.8 million decrease in 2020. As of December 31, 2021, our days sales outstanding were 39.2, or 27.5 days net of deferred revenue, as of December 31, 2021 compared to 38.6, or 26.4 days net of deferred revenue, as of December 31, 2020.

•Our prepaid expenses and other assets increased $57.0 million in 2021 compared to a decrease of $6.5 million in 2020, primarily due to additional SaaS implementation costs incurred related to the redesign of certain back-office software systems in 2021. The decrease in 2020 was primarily attributable to the receipt of the Bridgeton landfill settlement in the first quarter of 2020, and an increase in alternative fuel tax credit receipts during 2020 compared to 2019, partially offset by an increase of prepaid taxes due to the timing of our estimated tax payments. We made income tax payments (net of refunds) of approximately $300 million and $124 million for 2021 and 2020, respectively. Income taxes paid in 2021 and 2020 reflected benefits from tax credits from our continuing investments in solar energy. In 2020, cash taxes paid also reflected a benefit from 100% bonus depreciation on qualified assets.

•Our accounts payable increased $113.8 million during 2021 compared to a decrease of $46.7 million during 2020, due to the timing of payments.

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•Cash paid for capping, closure and post-closure obligations was $1.0 million higher during 2021 compared to 2020. The increase 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 $6.4 million lower during 2021 compared to 2020, primarily due to $18.9 million in payments related to management and monitoring of the remediation area of our closed Bridgeton Landfill in Missouri during 2021 as compared to $25.6 million of payments during 2020.

In addition, cash paid for interest was $249.4 million and $325.1 million, excluding net swap settlements for our fixed to floating interest rate swaps, for 2021 and 2020, respectively.

We use cash flows from operations to fund capital expenditures, acquisitions, dividend payments, share repurchases and debt repayments.

Cash Flows Used in Investing Activities

The most significant items affecting the comparison of our cash flows used in investing activities for 2021 and 2020 are summarized below:

•Capital expenditures during 2021 were $1,316.3 million as compared to $1,194.6 million for 2020.

•Proceeds from sales of property and equipment during 2021 were $19.5 million as compared to $30.1 million for 2020.

•During 2021 and 2020, we used $1,221.7 million and $769.5 million, respectively, for acquisitions and investments, net of cash acquired. During 2021 and 2020, we received $46.3 million and $32.9 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.

Cash Flows Used in Financing Activities

The most significant items affecting the comparison of our cash flows used in financing activities for 2021 and 2020 are summarized below:

•During 2021, we issued $700.0 million of senior notes for cash proceeds, net of discounts and fees, of $692.3 million. During 2020, we issued $2,750.0 million of senior notes for cash proceeds, net of discounts and fees, of $2,716.1 million. Net payments of notes payable and long-term debt were $150.2 million during 2021, compared to net payments of $2,595.9 in 2020. 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 2020, we paid $99.1 million in cash premiums on the redemption of senior notes.

•During 2021, we repurchased 2.2 million shares of our stock for $252.2 million. During 2020, we repurchased 1.2 million shares of our stock for $98.8 million.

•In July 2021, our Board of Directors approved an increase in our quarterly dividend to $0.46 per share. Dividends paid were $552.6 million and $522.5 million in 2021 and 2020, respectively.

•During 2021, we paid $32.0 million related to the purchase of the remaining equity interest in a previously held non-controlling interest.

•During 2021 and 2020, cash paid for purchase price holdback releases and contingent purchase price related to acquisitions was $21.3 million and $15.5 million, respectively.

Financial Condition

Debt Obligations

As of December 31, 2021, we had $8.2 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. 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.

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In the event of a failed remarketing, we currently have availability under our $3.0 billion unsecured revolving credit facility to fund these bonds until they are remarketed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2021.

An extended period of economic disruption associated with the COVID-19 pandemic could further disrupt the global supply chain, negatively impact demand for our services, and disrupt financial markets. These effects could materially and adversely affect our business and financial condition, including our access to sources of liquidity. We will continue to monitor the evolving COVID-19 pandemic along with the effect on our business and access to capital markets. Refer to Part I, Item 1A - Risk Factors of this Annual Report on Form 10-K for a discussion of certain risk factors related to this pandemic.

For further discussion of the components of our overall debt, see Note 9, Debt, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Credit Facilities

The Credit Facility

In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the Credit Facility), which replaces the prior $2.25 billion unsecured revolving credit facility which would have matured in June 2023 (the Replaced Credit Facility). Borrowings under the Credit Facility mature in August 2026. As permitted by the Credit Facility, we have the right to request two one-year extensions of the maturity date but none of the lenders are committed to participate in such extension. The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.

At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating London Interbank Offered Rate (LIBOR), or a Eurodollar Rate, plus an applicable margin of 0.910% based on our Debt Ratings (all as defined in the Credit Facility agreement). On the earliest of (i) the date that all available tenors of U.S. dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a secured overnight financing rate (SOFR), the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date.

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. Availability under our Credit Facility and Replaced Credit Facility totaled $2,633.8 million and $1,671.8 million as of December 31, 2021 and 2020, respectively. 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.

As of December 31, 2021 and 2020, we had $24.3 million and $186.0 million of borrowings outstanding under our Credit Facility and Replaced Credit Facility, respectively. We had $341.9 million and $376.5 million of letters of credit outstanding under our Credit Facility and Replaced Credit Facility as of December 31, 2021 and 2020, respectively.

Uncommitted Credit Facility

In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaces the prior $135.0 million uncommitted credit facility (the Replaced Uncommitted Credit Facility). The Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties, rather than a LIBOR or Cost of Funds rate used in the Replaced Uncommitted Credit Facility (as defined in the Replaced Uncommitted Credit Facility agreement). 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, 2021 and 2020, we had no borrowings outstanding under our Replaced Uncommitted Credit Facility.

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). 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 respective term of the Credit Facility agreement. As of December 31, 2021, our total debt to

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EBITDA ratio was 2.89 compared to the 3.75 maximum allowed by the covenants. As of December 31, 2021, we were in compliance with the covenants under the Credit Facility, and we expect to be in compliance throughout 2022.

EBITDA, which is a non-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 agreement. 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 our other debt instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity. 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 agreement 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 agreement or raise sufficient capital to repay such obligations in the event the maturity is accelerated.

Senior Notes and Debentures

In November 2021, we issued $700.0 million of 2.375% senior notes due 2033 (the 2.375% Notes). We used the net proceeds for general corporate purposes, including repayment of amounts outstanding under our unsecured and uncommitted credit facilities. Prior to such use, Republic may have temporarily invested the net proceeds in marketable securities and short-term investments.

During the second quarter of 2021, we paid the entire $35.3 million principal balance of our 9.250% debentures which matured in May 2021.

Our senior notes are general senior unsecured obligations. Interest is payable semi-annually.

Derivative Instruments and Hedging Relationships

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

For a description of our derivative contracts and hedge accounting, see Note 9, Debt, to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Tax-Exempt Financings

As of December 31, 2021, we had $1,181.5 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2023 to 2051. As of December 31, 2020, we had $1,104.7 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2021 to 2050. During the year ended December 31, 2021 and 2020, we issued $205.0 million and $60.0 million, respectively, of new tax-exempt financings.

In the fourth quarter of 2021, the Pennsylvania Economic Development Financing Authority issued, for our benefit, $30.0 million of Solid Waste Disposal Revenue Bonds. The proceeds from the issuance, after deferred issuance costs, will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, of which $17.2 million has been incurred and reimbursed to us. As of December 31, 2021, we had $139.0 million of restricted cash and marketable securities, of which $12.4 million represented proceeds from the issuance of the tax-exempt bonds.

Finance Leases

We had finance lease liabilities of $249.4 million and $206.5 million as of December 31, 2021 and 2020, respectively, with maturities ranging from 2022 to 2063 and 2021 to 2063, respectively.

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.

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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 2022, 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 Accounting

Landfill operating costs are treated as period expenses and are not discussed further in this section.

Our landfill assets and liabilities fall into the following two categories, each of which requires accounting judgments and estimates:

•Landfill development costs that are capitalized as an asset.

•Landfill retirement obligations relating to our capping, closure and post-closure liabilities that result in a corresponding landfill retirement asset.

We use life-cycle accounting and the units-of-consumption method to recognize landfill development costs over the life of the site. In life-cycle accounting, all current and future capitalized costs to acquire and construct a site are calculated, and charged to expense based on the consumption of cubic yards of available airspace. Obligations associated with final capping, closure and post-closure are also capitalized, and amortized on a units-of-consumption basis as airspace is consumed. Cost and airspace estimates are developed at least annually by engineers.

Landfill Development Costs

As of December 31, 2021 and 2020, we had net landfill development costs of $3,914.0 million and $3,742.2 million, respectively. Changes in these estimates may be sensitive to changes in cost estimates, inflation and applicable regulations.

Site permits. To develop, construct and operate a landfill, we must obtain permits from various regulatory agencies at the local, state and federal levels. The permitting process requires an initial site study to determine whether the location is feasible for landfill operations. The initial studies are reviewed by our environmental management group and then submitted to the regulatory agencies for approval. During the development stage we capitalize certain costs that we incur after site selection but before the receipt of all required permits if we believe that it is probable that the site will be permitted.

These estimates are subject to uncertainty attributable to:

•Changes in legislative or regulatory requirements may cause changes to the landfill site permitting process. These changes could make it more difficult and costly to obtain and maintain a landfill permit.

•Studies performed could be inaccurate, which could result in the denial or revocation of a permit and changes to accounting assumptions. Conditions could exist that were not identified in the study, which may make the location not feasible for a landfill and could result in the denial of a permit. Denial or revocation of a permit could impair the recorded value of the landfill asset.

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•Actions by neighboring parties, private citizen groups or others to oppose our efforts to obtain, maintain or expand permits could result in denial, revocation or suspension of a permit, which could adversely impact the economic viability of the landfill and could impair the recorded value of the landfill. As a result of opposition to our obtaining a permit, improved technical information as a project progresses, or changes in the anticipated economics associated with a project, we may decide to reduce the scope of, or abandon, a project, which could result in an asset impairment.

Technical landfill design. Upon receipt of initial regulatory approval, technical landfill designs are prepared. The technical designs, which include the detailed specifications to develop and construct all components of the landfill including the types and quantities of materials that will be required, are reviewed by our environmental management group. The technical designs are submitted to the regulatory agencies for approval. Upon approval of the technical designs, the regulatory agencies issue permits to develop and operate the landfill.

These estimates are subject to uncertainty attributable to:

•Changes in legislative or regulatory requirements may require changes in the landfill technical designs. These changes could make it more difficult and costly to meet new design standards.

•Technical design requirements, as approved, may need modifications at some future point in time.

•Technical designs could be inaccurate and could result in increased construction costs, difficulty in obtaining a permit or the use of rates to recognize the amortization of landfill development costs and asset retirement obligations that are not appropriate.

Permitted and probable landfill disposal capacity. Included in the technical designs are factors that determine the ultimate disposal capacity of the landfill. These factors include the area over which the landfill will be developed, such as the depth of excavation, the height of the landfill elevation and the angle of the side-slope construction. The disposal capacity of the landfill is calculated in cubic yards. This measurement of volume is then converted to a disposal capacity expressed in tons based on a site-specific expected density to be achieved over the remaining operating life of the landfill.

These estimates are subject to uncertainty attributable to:

•Estimates of future disposal capacity may change as a result of changes in legislative or regulatory design requirements.

•The density of waste may vary due to variations in operating conditions, including waste compaction practices, site design, climate and the nature of the waste.

•Capacity is defined in cubic yards but waste received is measured in tons. The number of tons per cubic yard varies by type of waste and our rate of compaction.

Development costs. The types of costs that are detailed in the technical design specifications generally include excavation, natural and synthetic liners, construction of leachate collection systems, installation of methane gas collection systems and monitoring probes, installation of groundwater monitoring wells, construction of leachate management facilities and other costs associated with the development of the site. We review the adequacy of our cost estimates on an annual basis by comparing estimated costs with third-party bids or contractual arrangements, reviewing the changes in year-over-year cost estimates for reasonableness, and comparing our resulting development cost per acre with prior period costs. These development costs, together with any costs incurred to acquire, design and permit the landfill, including capitalized interest, are recorded to the landfill asset on the balance sheet as incurred.

These estimates are subject to uncertainty attributable to:

•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. Technical designs could be altered due to unexpected operating conditions, regulatory changes or legislative changes.

Landfill development asset amortization. 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 amortized 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 (as described above) for the landfill, by the landfill’s estimated remaining 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 amortization expense for the period.

Amortization rates may be sensitive to the original cost basis of the landfill, including acquisition costs, which in turn is determined by geographic location and market values. We secure significant landfill assets through business acquisitions and

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value them at the time of acquisition based on fair value. Amortization rates are also influenced by site-specific engineering and cost factors.

These estimates are subject to uncertainty attributable to:

•Changes in our future development cost estimates or our disposal capacity will normally result in a change in our amortization rates and will impact amortization expense prospectively. An unexpected significant increase in estimated costs or reduction in disposal capacity could affect the ongoing economic viability of the landfill and result in asset impairment.

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 amortization rates that are updated annually. 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.

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, 2021 and 2020, our asset retirement obligations related to capping, closure and post-closure were $1,507.3 million and $1,346.4 million, respectively. Changes in these estimates may be sensitive to changes in available airspace, cost estimates, inflation, our credit-adjusted, risk-free interest rate and applicable regulations.

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. 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, transportation and disposal of leachate, and erosion control costs related to the final cap.

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 estimate of inflation, which is updated annually and is based upon the ten year average consumer price index (1.7% in both 2021 and 2020).

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.

Capping, closure and post-closure liabilities are recorded in layers and discounted using our credit-adjusted risk-free rate in effect at the time the obligation is incurred (3.4% in both 2021 and 2020).

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

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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.

These estimates are subject to uncertainty attributable to:

•Changes in legislative or regulatory requirements, including changes in capping, closure activities or post-closure monitoring activities, types and quantities of materials used, or term of post-closure care, could cause changes in our cost estimates.

•Changes in the landfill retirement obligation due to changes in the anticipated waste flow, changes in airspace compaction estimates or changes in the timing of expenditures for closed landfills and fully incurred but unpaid capping events are recorded in results of operations prospectively. This could result in unanticipated increases or decreases in expense.

•Actual timing of disposal capacity utilization could differ from projected timing, causing differences in timing of when amortization and accretion expense is recognized for capping, closure and post-closure liabilities.

•Changes in inflation rates could impact our actual future costs and our total liabilities.

•Changes in our capital structure or market conditions could result in changes to the credit-adjusted risk-free rate used to discount the liabilities, which could cause changes in future recorded liabilities, assets and expense.

•Amortization rates could change in the future based on the evaluation of new facts and circumstances relating to landfill capping design, post-closure monitoring requirements, or the inflation or discount rate.

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. 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.

Permitted and probable disposal capacity. Disposal capacity is determined by the specifications detailed in the landfill permit. We classify this disposal capacity as permitted. We also include probable expansion disposal capacity in our remaining disposal capacity estimates, thus including additional disposal capacity being sought through means of a permit expansion. Probable expansion disposal capacity has not yet received final approval from the applicable regulatory agencies, but we have determined that certain critical criteria have been met and that the successful completion of the expansion is probable. We have developed six criteria that must be met before an expansion area is designated as probable expansion airspace. We believe that satisfying all of these criteria demonstrates a high likelihood that expansion airspace that is incorporated in our landfill costing will be permitted. However, because some of these criteria are judgmental, they may exclude expansion airspace that will eventually be permitted or include expansion airspace that will not be permitted. In either of these scenarios, our amortization, depletion and accretion expense could change significantly. Our internal criteria to classify disposal capacity as probable expansion airspace are as follows:

•We own the land associated with the expansion airspace or control it pursuant to an option agreement;

•We are committed to supporting the expansion project financially and with appropriate resources;

•There are no identified fatal flaws or impediments associated with the project, including political impediments;

•Progress is being made on the project;

•The expansion is attainable within a reasonable time frame; and

•We believe it is likely we will receive the expansion permit.

After successfully meeting these criteria, the disposal capacity that will result from the planned expansion is included in our remaining disposal capacity estimates. Additionally, for purposes of calculating landfill amortization and capping, closure and post-closure rates, we include the incremental costs to develop, construct, close and monitor the related probable expansion disposal capacity.

These estimates are subject to uncertainty attributable to:

•We may be unsuccessful in obtaining permits for probable expansion disposal capacity because of the failure to obtain the final local, state or federal permits or due to other unknown reasons. If we are unsuccessful in obtaining permits for

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probable expansion disposal capacity, or the disposal capacity for which we obtain approvals is less than what was estimated, both our estimated total costs and disposal capacity will be reduced, which generally increases the rates we charge for landfill amortization and capping, closure and post-closure accruals. An unexpected decrease in disposal capacity could also cause an asset impairment.

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 and the related legal costs. 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, 2021 and 2020, we had $454.9 million and $462.8 million of environmental liabilities. Changes in these estimates may be sensitive to changes in cost estimates, timing of estimated costs and settlements, inflation, our credit-adjusted, risk-free interest rate and applicable regulations.

These estimates are subject to uncertainty attributable to:

•We cannot determine with precision the ultimate amounts of our environmental remediation liabilities. Our estimates of these liabilities require assumptions about uncertain future events. 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.

•Actual amounts could differ from the estimated liabilities as a result of changes in estimated future litigation costs to pursue the matter to ultimate resolution.

•An unanticipated environmental liability that arises could result in a material charge to our consolidated statements of income.

Insurance Reserves and Related Costs

Our insurance policies for workers' compensation, commercial general liability, commercial auto liability and environmental liability are high deductible, or retention programs. The deductibles, or retentions, range from $3 million to $10 million. The employee-related health benefits are also subject to a high-deductible insurance policy. Accruals for deductibles or retentions are based on claims filed and actuarial estimates of claims development and claims incurred but not reported. As of December 31, 2021 and 2020, our insurance reserves were $497.4 million and $449.3 million, respectively. Changes in these estimates may be sensitive to changes in the frequency, severity and settlement amount of claims.

These estimates are subject to uncertainty attributable to:

•Incident rates, including frequency and severity, and other actuarial assumptions could change causing our current and future actuarially determined obligations to change, which would be reflected in our consolidated statements of income in the period in which such adjustment is known.

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•Recorded reserves may not be adequate to cover the future payment of claims. Adjustments, if any, to estimates recorded resulting from ultimate claim payments would be reflected in the consolidated statements of income in the periods in which such adjustments are known.

•The settlement costs to discharge our obligations, including legal and health care costs, could increase or decrease causing current estimates of our insurance reserves to change.

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 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 LIBOR or, following the termination of LIBOR, 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 havehistorically 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

Fixed rate debt:

Variable rate debt:

The fixed and variable rate debt amounts above exclude the remaining non-cash discounts, premiums and adjustments to fair value totaling $123.9 million.

As of December 31, 2021, we had $1,213.4 million of floating rate debt and $300.0 million of floating interest rate swap contracts. 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 $15 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 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, 2021, 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.

Our operations also require the use of certain petrochemical-based products (such as liners at our landfills) whose costs 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.

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Our fuel costs were $383.0 million in 2021, or 3.4% of revenue, compared to $271.7 million in 2020, or 2.7% of revenue.

Commodities Price Risk

We market recovered materials such as old corrugated containers and old newsprint from our recycling processing 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, 2021, 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 annual revenue and operating income by approximately $22 million and $10 million, respectively.

Revenue from recycling processing and commodity sales during the years ended December 31, 2021 and 2020 was $420.5 million and $297.1 million, respectively.

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ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 58

Consolidated Balance Sheets as of December 31, 2021 and 2020 61

Notes to Consolidated Financial Statements 66

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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, 2021 and 2020, 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, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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, 2021, 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 10, 2022, 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 Amortization

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Landfill Final Capping, Closure and Post-Closure Costs

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Phoenix, Arizona

February 10, 2022

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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, 2021, 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, 2021, 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 Republic Services, Inc. as of December 31, 2021 and 2020, 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, 2021, and the related notes and our report dated February 10, 2022, expressed an unqualified opinion thereon.

As indicated in the accompanying Report of Management on Republic Services, Inc.’s Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Santek Waste Services, LLC and ACV Enviro Corporation, which are included in the 2021 consolidated financial statements of the Company and constituted less than 2% of revenues for the year ended December 31, 2021. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Santek Waste Services, LLC and ACV Enviro Corporation.

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 10, 2022

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REPUBLIC SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

ASSETS

Current assets:

Cash and cash equivalents $ 29.0 $ 38.2

Prepaid expenses and other current assets 410.4 392.3

Restricted cash and marketable securities 139.0 149.1

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Notes payable and current maturities of long-term debt 8.2 168.1

Accrued landfill and environmental costs, current portion 124.5 114.5

Long-term debt, net of current maturities 9,546.2 8,766.1

Accrued landfill and environmental costs, net of current portion 1,837.7 1,694.7

Deferred income taxes and other long-term tax liabilities, net 1,229.5 1,238.8

Insurance reserves, net of current portion 303.9 281.8

Commitments and contingencies

Stockholders’ equity:

Treasury stock, at cost; 2.4 and — shares, respectively (274.8) (0.1)

Accumulated other comprehensive income, net of tax (14.6) (12.4)

Total Republic Services, Inc. stockholders’ equity 8,978.9 8,483.9

Non-controlling interests in consolidated subsidiary 0.8 4.9

Total liabilities and stockholders’ equity $ 24,955.0 $ 23,434.0

The accompanying notes are an integral part of these financial statements.

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REPUBLIC SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

Years Ended December 31,

Expenses:

Withdrawal costs - multiemployer pension funds — 34.5 —

Loss (gain) on business divestitures and impairments, net 0.5 77.7 (14.7)

Loss from unconsolidated equity method investments (188.5) (118.2) (112.2)

Loss on extinguishment of debt — (101.9) —

Other (expense) income, net (0.5) 4.1 6.4

Net income attributable to Republic Services, Inc. $ 1,290.4 $ 967.2 $ 1,073.3

Basic earnings per share attributable to Republic Services, Inc. stockholders:

Diluted earnings per share attributable to Republic Services, Inc. stockholders:

Diluted earnings per share $ 4.04 $ 3.02 $ 3.33

Cash dividends per common share $ 1.77 $ 1.66 $ 1.56

The accompanying notes are an integral part of these financial statements.

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REPUBLIC SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

Years Ended December 31,

Other comprehensive income (loss), net of tax

Hedging activity:

Realized loss reclassified into earnings 4.6 5.8 1.0

Unrealized loss — (22.5) (30.2)

Pension activity:

Change in funded status of pension plan obligations (6.8) 2.1 (2.5)

Other comprehensive loss, net of tax (2.2) (14.6) (31.7)

Comprehensive income attributable to non-controlling interests (1.9) (2.4) (0.5)

The accompanying notes are an integral part of these financial statements.

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REPUBLIC SERVICES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

Republic Services, Inc. Stockholders’ Equity

Shares Amount Shares Amount

Adoption of accounting standard, net of tax — — — (3.1) — — 3.1 — $ —

Cash dividends declared — — — (499.4) — — — — (499.4)

Stock-based compensation — — 43.0 (4.0) — — — — 39.0

Purchase of common stock for treasury — — — — (4.9) (399.4) — — (399.4)

Distributions paid — — — — — — — (0.2) (0.2)

Cash dividends declared — — — (528.8) — — — — (528.8)

Stock-based compensation — — 40.7 (3.9) — — — — 36.8

Purchase of common stock for treasury — — — — (1.2) (98.8) — — (98.8)

Distributions paid — — — — — — — (0.2) (0.2)

Cash dividends declared — — — (563.0) — — — — (563.0)

Stock-based compensation — — 60.3 (3.6) — — — — 56.7

Purchase of common stock for treasury — — — — (2.2) (252.2) — — (252.2)

Purchase of minority interest — — (22.7) — — — — (4.8) (27.5)

Distributions paid — — — — — — — (1.2) (1.2)

The accompanying notes are an integral part of these financial statements.

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REPUBLIC SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Years Ended December 31,

Cash provided by operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Provision for doubtful accounts, net of adjustments 19.9 27.8 34.0

Loss on extinguishment of debt — 101.9 —

Environmental adjustments 0.5 5.1 (11.9)

Loss from unconsolidated equity method investments 188.5 118.2 112.2

Other non-cash items (1.1) (3.8) (5.6)

Prepaid expenses and other assets (57.0) 6.5 (109.7)

Capping, closure and post-closure expenditures (59.6) (58.6) (78.2)

Payments from retirement of certain hedging relationships — (11.4) —

Cash used in investing activities:

Proceeds from sales of property and equipment 19.5 30.1 21.7

Cash received from business divestitures 46.3 32.9 42.8

Purchases of restricted marketable securities (30.8) (32.9) (14.7)

Sales of restricted marketable securities 37.9 11.2 13.5

Cash used in financing activities:

Premiums paid on extinguishment of debt — (99.1) —

Issuances of common stock, net (12.0) 3.9 9.3

Purchases of common stock for treasury (252.2) (98.8) (399.4)

Contingent consideration payments (21.3) (15.5) (17.2)

The accompanying notes are an integral part of these financial statements.

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REPUBLIC SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.BASIS OF PRESENTATION

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

The 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. All dollar amounts in tabular presentations are in millions, except per share amounts and unless otherwise noted.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management’s Estimates and Assumptions

RSG US Equity

RSG · 10-K · period ended 2021-12-31

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

RSG US Equity☆

RSG · 10-K · period ended 2021-12-31

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

RSG US Equity