REPUBLIC SERVICES INC
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
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FY2024 · Filed Feb 14, 2025
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Item 8. Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Republic Services, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Republic Services, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 13, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| Landfill Development Asset Depletion | |
| Description of the Matter | Landfill development asset depletion expense for the year ended December 31, 2024 was $408 million As discussed in Note 2, management updates the assumptions used to estimate the landfill development asset depletion expense at least annually, or more often if there is a significant change in facts and circumstances related to a landfill. Significant assumptions used in the calculation of the expense include estimated future development costs and available disposal capacity. |
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| Auditing landfill development asset depletion expense is complex due to the highly judgmental nature of the significant assumptions, as discussed above, used in the calculation of the expense. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding of, evaluated the design, and tested the operating effectiveness of the Company’s controls over landfill development asset depletion expense. Our audit procedures included, among others, testing controls over the Company’s process for evaluating and updating the significant assumptions used in the calculation of landfill development asset depletion expense and the accuracy of depletion expense recorded. |
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| To test the landfill development asset depletion expense, our audit procedures included, among others, assessing methodologies and testing the significant assumptions discussed above. To test the future development costs, we compared the estimated costs used by management to comparable landfills accepting the same type of waste. We also tested the completeness and accuracy of the data utilized in the development of depletion expense. Regarding disposal capacity, we evaluated the Company’s annual utilization and estimation of the landfill disposal capacity through a comparison of airspace to historical estimates and annual aerial surveys. In addition, we considered the professional qualifications and objectivity of management’s specialist responsible for performing the aerial surveys. We involved EY engineering specialists to assist us with evaluating estimated future development costs. | |
| Landfill Final Capping, Closure and Post-Closure Costs | |
| Description of the Matter | At December 31, 2024, the carrying value of the Company’s landfill final capping, closure and post-closure costs totaled $2,144 million. As discussed in Notes 2 and 8 of the consolidated financial statements, management updates the assumptions used to estimate the asset retirement obligations at least annually, or more often if there is a significant change in facts and circumstances related to a landfill. These assumptions include estimated future costs associated with the final capping, closure and post-closure activities at each landfill, projected timing of capping, and estimated inflation rate. |
| Auditing the landfill asset retirement obligations is complex due to the highly judgmental nature of the significant assumptions, as discussed above, used in the calculation of the asset retirement obligations. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding of, evaluated the design, and tested the operating effectiveness of the Company’s controls over the calculation of asset retirement obligations. Our procedures included, among others, testing controls over the Company’s process for evaluating and updating the significant assumptions used in the calculation of the landfill asset retirement obligations and the accuracy of the asset retirement obligations recorded. |
| To test the landfill asset retirement obligations, our audit procedures included, among others, assessing methodologies used by the Company, testing the completeness of activities included in the estimate and testing the significant assumptions discussed above. To test the estimated future costs, we compared the estimated future costs used by management to comparable landfills accepting the same type of waste. We also tested the completeness and accuracy of the data utilized in preparing the cost estimate. Regarding the projected timing of capping assumption, we evaluated the Company’s annual utilization and estimation of the landfill disposal capacity through a comparison of airspace to historical estimates and annual aerial surveys. We also performed a sensitivity analysis of the inflation rate assumption. In addition, we considered the professional qualifications and objectivity of management’s specialist responsible for performing the aerial surveys. We involved EY engineering specialists to assist us with evaluating assumptions used in estimated costs for the capping, closure and post-closure activities. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2002.
Phoenix, Arizona
February 13, 2025
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