Table	of	Contents

# UNITED	STATES	SECURITIES	AND	EXCHANGE	COMMISSION

(Mark	One)

þ	ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2015

¨	TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# REPUBLIC	SERVICES,	INC.

(Exact	Name	of	Registrant	as	Specified	in	its	Charter)

Delaware

(State	or	Other	Jurisdiction	of	Incorporation	or	Organization)

18500	North	Allied	Way Phoenix,	Arizona

(IRS	Employer	Identification	No.)

(Zip	Code)

(Address	of	Principal	Executive	Offices)

# Registrant's	telephone	number,	including	area	code:	(480)	627-2700

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

# Title	of	Each	Class

Common	Stock,	par	value	$0.01	per	share

Name	of	Each	Exchange	on	which	Registered

The	New	York	Stock	Exchange

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				Yes		þ				No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.				Yes		¨				No		þ

Indicate	by	check	mark	whether	the	registrant:	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past 90	days.				Yes		þ				No		¨

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Website,	if	any,	every	Interactive	Data	File	required	to be	submitted	and	posted	pursuant	to	Rule	405	of	Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant was	required	to	submit	and	post	such	files).				Yes		þ				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any amendment	to	this	Form	10-K.				þ

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the definitions	of	"large	accelerated	filer,"	"accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one):

Large	accelerated	filer		þ Accelerated	filer		o

	 Non-accelerated	filer		o

Smaller	reporting	company		o

(Do	not	check	if	a	smaller	reporting	company)

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		¨				No		þ

As	of	June	30,	2015,	the	aggregate	market	value	of	the	shares	of	the	Common	Stock	held	by	non-affiliates	of	the	registrant	was	$13.7	billion. As	of	February	4,	2016,	the	registrant	had	outstanding	344,869,692	shares	of	Common	Stock	(excluding	treasury	shares	of	1,303,802).

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	Registrant's	Proxy	Statement	relative	to	the	2016	Annual	Meeting	of	Shareholders	are	incorporated	by	reference	in	Part	III	hereof.

# PART	II

Unless	the	context	requires	otherwise,	all	references	in	this	Form	10-K	to	"Republic,"	"the	Company,"	"we,"	"us"	and	"our"	refer	to	Republic	Services,	Inc.	and	its consolidated	subsidiaries.

# PART	I

# ITEM	1. BUSINESS

# Overview

Republic	is	the	second	largest	provider	of	non-hazardous	solid	waste	collection,	transfer,	disposal,	recycling,	and	energy	services	in	the	United	States,	as	measured	by revenue.	As	of	December	31,	2015,	we	operated	in	41	states	and	Puerto	Rico	through	340	collection	operations,	201	transfer	stations,	193	active	landfills,	67	recycling centers,	8	treatment,	recovery	and	disposal	facilities,	and	12	salt	water	disposal	wells.	We	also	operated	69	landfill	gas	and	renewable	energy	projects	and	had	post- closure	responsibility	for	126	closed	landfills.	We	were	incorporated	in	Delaware	in	1996.

Based	on	an	industry	trade	publication,	the	United	States	non-hazardous	solid	waste	services	industry	generates	annual	revenue	of	approximately	$60	billion,	of	which approximately	45%	is	generated	by	publicly	owned	waste	companies.	Industry	data	also	indicates	that	the	non-hazardous	solid	waste	services	industry	in	the	United States	remains	fragmented	as	privately	held	companies	and	municipal	and	other	local	governmental	authorities	generate	approximately	35%	and	20%,	respectively,	of total	industry	revenue.	We	believe	growth	in	the	solid	waste	industry	historically	has	been	linked	primarily	to	population	growth	and	growth	in	the	overall	economy, including	the	level	of	new	household	and	business	formation	and	changes	in	residential	and	commercial	construction	activity.

Our	operations	are	national	in	scope,	but	the	physical	collection	and	disposal	of	waste	is	very	much	a	local	business	and	the	dynamics	and	opportunities	differ	in	each	of our	markets.	By	combining	local	operating	management	with	standardized	business	practices,	we	drive	greater	overall	operating	efficiency	across	the	Company	while maintaining	day-to-day	operating	decisions	at	the	local	level,	closest	to	the	customer.

# The	Five	Pillars	of	Our	Strategy	-	Profitable	Growth	through	Differentiation

We	believe	that	our	products	and	services	are	valuable,	and	that	by	developing	a	superior	team	and	delivering	superior	products,	we	can	differentiate	ourselves	from	our competitors.	Differentiation	allows	us	to	attract	and	retain	the	best	talent,	win	more	customers,	increase	loyalty,	and	ultimately	drive	higher	revenue	and	profits.	Our strategy	of	Profitable	Growth	through	Differentiation	is	built	on	five	key	pillars	including	(1)	market	position,	(2)	operating	model,	(3)	people	and	talent	agenda,	(4) customer	zeal,	and	(5)	digital	platform.

# Market	Position

The	goal	of	our	market	position	pillar	is	to	develop	the	best	vertically	integrated	market	position	to	enable	us	to	build	density	and	improve	returns.	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.	In situations	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.

We	have	a	robust	market	planning	process	to	identify	opportunities	to	grow	internally	through	capital	investments	and	infrastructure	development,	and	externally through	acquisitions	and	public-private	partnerships.	Additionally,	our	market	planning	process	allows	us	to	analyze	market	conditions	and	proactively	adjust	to	trends	as they	emerge,	including	the	effects	of	demographic	shifts,	market	changes	and	the	competitive	landscape.

# Internal	Growth

•Volume	Growth	-	We	believe	waste	volumes	are	driven	by	population	growth,	household	formation	and	new	business	formation.	Volume	growth	through increases	in	our	customer	base	and	service	offerings	is	the	most	capital	efficient	method	to	grow	our	business.	We	seek	to	obtain	long-term	contracts	for collecting	solid	waste	under	residential	collection	contracts	with	municipalities,	exclusive	franchise	agreements,	and	small-container	commercial	and	large- container	industrial	contracts.	By	obtaining	such	long-term	agreements,	we	can	grow	our	contracted	revenue	base	at	the	same	rate	as	the	underlying	economic growth	in	these	markets.	In	addition,	by	securing	a	base	of	long-term	recurring	revenue,	we	are	better	able	to	protect	our	market	position	from	competition.	We work	to	increase	volumes	while	ensuring	that	prices	charged	for	services	provide	an	appropriate	return	on	our	capital	investment.

•Price	Increases	-	We	seek	to	secure	price	increases	necessary	to	offset	increased	costs,	improve	our	operating	margins	and	earn	an	adequate	return	on	our substantial	investments	in	vehicles,	equipment,	landfills,	transfer	stations	and	recycling	centers.

•Expansion	of	Recycling	Capabilities	-	Based	on	an	industry	trade	publication,	we	believe	approximately	34%	of	municipal	solid	waste	is	recycled. Communities	have	increasingly	committed	to	their	residents	to	enhance	and	expand	their	recycling	programs.	We	continue	to	focus	on	innovative	waste disposal	processes	and	programs	to	help	our	customers	achieve	their	goals	related	to	sustainability	and	environmentally	sound	waste	practices	while	also generating	an	acceptable	return.	During	2015,	we	invested	approximately	$36	million	to	develop	and	upgrade	our	recycling	centers.	We	will	continue	to	look for	opportunities	to	expand	our	recycling	capabilities	in	markets	where	these	services	are	desired	and	provide	an	appropriate	return	on	our	investment.

•Infrastructure	Development	-	We	seek	to	identify	opportunities	to	further	our	position	as	an	integrated	service	provider	in	markets	where	we	are	not	fully integrated.	Our	goal	is	to	create	market-specific,	vertically	integrated	operations	typically	consisting	of	one	or	more	collection	operations,	transfer	stations, landfills	and	recycling	centers.	Where	appropriate,	we	obtain	permits	to	build	transfer	stations,	recycling	centers	and	landfills	that	would	vertically	integrate our	waste	services	or	expand	the	service	areas	for	our	existing	disposal	sites.	Development	projects,	while	generally	less	capital	intensive	than	acquisitions, typically	require	extensive	permitting	efforts	that	can	take	years	to	complete	with	no	assurance	of	success.	We	undertake	development	projects	when	we	believe there	is	a	reasonable	probability	of	success	and	where	reasonably	priced	acquisition	opportunities	are	not	available.

# External	Growth

•Acquisitions	and	Public-Private	Partnerships	-	Our	acquisition	growth	strategy	focuses	primarily	on	acquiring	privately	held	solid	waste	and	recycling companies	that	complement	our	existing	business	platform.	We	believe	our	ability	to	successfully	complete	these	acquisitions	is	enhanced	by	the	challenges facing	many	privately	held	companies,	including	increasing	competition	in	the	solid	waste	industry,	increasing	capital	requirements	due	to	changes	in	solid waste	regulatory	requirements	and	the	limited	number	of	exit	strategies	for	privately	held	companies.	We	also	evaluate	opportunities	to	acquire	operations	and facilities	that	are	being	divested	by	other	publicly	owned	waste	companies.

We	continue	to	invest	in	accretive	acquisitions	in	existing	markets.	Generally,	we	expect	to	maintain	a	steady	pace	of	tuck-in	acquisition	investment	of approximately	$100	million	annually.	Given	our	free	cash	flow,	availability	under	our	credit	facilities	and	our	ability	to	access	the	public	capital	markets,	we have	the	flexibility	to	make	additional	acquisitions	that	will	complement	our	existing	business	platform,	including	larger	acquisitions	if	the	right	opportunities present	themselves.

We	also	focus	on	growth	through	public-private	partnerships,	which	include	the	waste	and	recycling	operations	and	facilities	of	municipal	and	other	local governments.	We	believe	we	have	an	opportunity	to	acquire	operations	and	facilities	from	municipalities,	as	they	increasingly	seek	to	raise	capital	and	reduce risk.

We	realize	synergies	from	consolidating	businesses	into	our	existing	operations,	whether	through	acquisitions	or	public-private	partnerships,	which	allow	us	to reduce	capital	and	expense	requirements	associated	with	truck	routing,	personnel,	fleet	maintenance,	inventories	and	back-office	administration.

# Operating	Model

The	goal	of	our	operating	model	pillar	is	to	deliver	a	consistent,	high	quality	service	to	all	of	our	customers	through	the	Republic	Way:	One	Way.	Everywhere.	Every day.	This	approach	of	developing	standardized	processes	with	rigorous	controls	and	tracking	allows	us	to	leverage	our	scale	and	deliver	durable	operational	excellence. The	Republic	Way	is	the	key	to	harnessing	the	best	of	what	we	do	as	operators	and	translating	that	across	all	facets	of	our	business.

A	key	enabler	of	the	Republic	Way	is	our	organizational	structure	that	fosters	a	high	performance	culture	by	maintaining	360	degree	accountability	and	full	profit	and loss	responsibility	with	general	management,	supported	by	a	functional	structure	to	provide	subject	matter	expertise.	This	structure	allows	us	to	take	advantage	of	our scale	by	coordinating	functionally	across	all	of	our	markets,	while	empowering	local	management	to	respond	to	unique	market	dynamics.

We	have	rolled	out	several	productivity	and	cost	control	initiatives	designed	to	deliver	the	best	service	possible	to	our	customers	in	the	most	efficient	and environmentally	sound	way.

# Fleet	Automation

Approximately	72%	of	our	residential	routes	have	been	converted	to	automated	single	driver	trucks.	By	converting	our	residential	routes	to	automated	service,	we	reduce labor	costs,	improve	driver	productivity,	decrease	emissions	and	create	a	safer	work	environment	for	our	employees.	Additionally,	communities	using	automated vehicles	have	higher	participation	rates	in	recycling	programs,	thereby	complementing	our	initiative	to	expand	our	recycling	capabilities.

# Fleet	Conversion	to	Compressed	Natural	Gas	(CNG)

Approximately	16%	of	our	fleet	operates	on	CNG.	We	expect	to	continue	our	gradual	fleet	conversion	to	CNG,	our	preferred	alternative	fuel	technology,	as	part	of	our ordinary	annual	fleet	replacement	process.	We	believe	a	gradual	fleet	conversion	is	most	prudent	to	realize	the	full	value	of	our	previous	fleet	investments. Approximately	33%	of	our	replacement	vehicle	purchases	during	2015	were	CNG	vehicles.	We	believe	using	CNG	vehicles	provides	us	a	competitive	advantage	in communities	with	strict	clean	emission	initiatives	that	focus	on	protecting	the	environment.	Although	upfront	costs	are	higher,	using	CNG	reduces	our	overall	fleet operating	costs	through	lower	fuel	expenses.	As	of	December	31,	2015,	we	operated	38	CNG	fueling	stations.

# Standardized	Maintenance

Based	on	an	industry	trade	publication,	we	operate	the	ninth	largest	vocational	fleet	in	the	United	States.	As	of	December	31,	2015,	our	average	fleet	age	in	years,	by	line of	business,	was	as	follows:

|  | Approximate	Number	of<br>Vehicles | Approximate<br>Average	Age |
| :--- | :--- | :--- |
| Residential | 7,200 | 7 |
| Small-container\tCommercial | 4,400 | 7 |
| Large-container\tIndustrial | 4,000 | 9 |
| Total | 15,600 | 7.5 |

OneFleet,	our	standardized	vehicle	maintenance	program,	enables	us	to	use	best	practices	for	fleet	management,	truck	care	and	maintenance.	Through	standardization	of core	functions,	we	believe	we	can	minimize	variability	in	our	maintenance	processes,	resulting	in	higher	vehicle	quality	and	a	lower	environmental	footprint,	while extending	the	average	service	life	of	our	fleet	by	one	year.	We	believe	operating	a	more	reliable,	greener,	safer	and	more	efficient	fleet	will	lower	our	operating	costs. We	have	implemented	standardized	maintenance	programs	for	approximately	78%	of	our	fleet	maintenance	operations	as	of	December	31,	2015.	We	expect	to	finish implementing	our	standardized	maintenance	program	in	2016.

# Organizational	Structure

During	2015,	we	managed	and	evaluated	our	operations	through	three	geographic	regions	-	East,	Central	and	West	-	which	we	identified	as	our	reportable	segments. Each	region	was	organized	into	several	areas	and	each	area	contained	multiple	business	units	or	operating	locations.	Each	of	our	regions	and	all	of	our	areas	provided collection,	transfer,	recycling	and	landfill	services.	See	Note	14,	Segment	Reporting,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K	for	further discussion	of	our	operating	segments.

In	January	2016,	we	realigned	our	field	support	functions	by	combining	two	organizational	layers	into	one.	This	included	the	elimination	of	our	three	regions,	the consolidation	of	our	20	areas	into	10	and	the	streamlining	of	select	roles	at	our	Phoenix	headquarters.	We	will	reinvest	and	deploy	resources	into	our	areas	by	creating	10 area	offices	equipped	with	enhanced	teams	of	operators	and	functional	support	roles.		These	area	teams	will	be	the	resource	epicenter	for	the	Company's	business	units that	are	closest	to	and	serve	our	customers.	The	areas	will	be	grouped	and	overseen	by	two	Executive	Vice	Presidents	of	Operations.		In	connection	with	our restructuring,	we	will	further	evaluate	our	2016	reporting	segments.

# People	and	Talent	Agenda

The	goal	of	our	people	and	talent	agenda	pillar	is	to	create	an	environment	to	attract	and	retain	the	best	talent.	Our	people	continue	to	be	the	most	critical	component	in successfully	executing	our	strategy.	We	strive	to	make	Republic	a	desirable	place	to	work	for	our	approximately	33,000	full-time	employees	by	creating	learning experiences,	programs,	compensation	and	benefits	that	attract,	develop,	train,	engage,	motivate,	reward	and	retain	the	best	workforce.	We	aspire	to	be	a	company	where the	best	people	want	to	work	and	are	engaged	every	day.	We	accomplish	this	through	our	focus	on	safety,	learning	and	talent	development,	and	diversity	and	inclusion.

# Safety

Republic	is	dedicated	to	the	safety	of	our	employees,	customers	and	the	communities	we	serve.	Due	to	the	nature	of	our	industry,	we	prioritize	safety	above	all	else	and we	recognize	and	reward	employees	for	outstanding	safety	records.	Over	the	past	8	years,	our	safety	performance	(based	on	OSHA	recordable	rates)	has	been	42% better	than	the	industry	average.	Our	Think,	Choose,	Live	slogan	encapsulates	our	everyday	safety	messaging	to	our	employees	to:	Think	about	what	you	are	doing, Choose	the	safe	answer,	and	Live	to	go	home	to	your	family.	With	the	phrase	printed	on	numerous	items,	including	hard	hats	and	equipment	our	employees	touch,	there are	constant	reminders	for	employees	to	go	home	in	the	same	condition	that	they	came	to	work.	Our	goal	is	to	ensure	every	one	of	our	employees	returns	home	safely each	night.

We	are	proud	of	our	two	safety	incentive	programs:	Dedicated	to	Safety	and	Dedicated	to	Excellence.	For	Dedicated	to	Safety,	employees	must	meet	all	safety requirements	for	the	year,	including	no	preventable	accidents	and	no	safety	warnings.	For	Dedicated	to	Excellence,	employees	must	earn	the	Dedicated	to	Safety	Award and	meet	additional	criteria	for	customer	service,	attendance	and	other	performance	metrics.	Further,	our	industry-leading	safety	training	program,	Focus	6,	provides employees	with	tips	and	techniques	to	prevent	the	six	most	common	types	of	serious	accidents:	backing,	intersections,	push-pull-lift,	rear	collisions,	rollover,	and pedestrian.

We	take	pride	in	recognizing	employees	who	demonstrate	a	relentless	commitment	to	safety.	Employees	with	the	best	driving	records	are	eligible	for	the	industry's	most prestigious	award,	the	National	Waste	&	Recycling	Association's	Driver	of	the	Year.	Republic	drivers	have	won	14	of	the	18	Driver	of	the	Year	awards	issued	for	the large	truck	category	since	2009.

# Learning	and	Talent	Development

We	are	committed	to	developing	our	employees	throughout	their	careers.	Targeted	onboarding	experiences,	including	our	Driver	Training	Center,	Supervisor Onboarding	and	Sales	Acceleration	programs,	focus	on	providing	the	fundamental	skills	each	employee	needs	to	succeed	in	his	or	her	role.	Our	Leadership	Trainee Program,	an	18-month	rotational	experience	for	recent	graduates,	is	another	example	of	our	commitment	to	providing	opportunities	for	growth.

Developing	our	leaders	is	also	a	critical	part	of	our	people	and	talent	agenda.	From	Leadership	Fundamentals,	a	program	for	new	front	line	supervisors,	to	our	Republic Services	Executive	Institute,	a	program	for	our	highest	potential	executives,	we	have	developed	programs	and	experiences	to	ensure	that	as	our	leaders	progress,	they	are accumulating	the	skills	necessary	to	be	successful	at	each	level.	Over	the	last	year,	more	than	1,000	leaders	have	completed	our	Leadership	Fundamentals	program, creating	a	common	language	and	toolkit	for	how	we	coach	and	develop	employees.

# Diversity	and	Inclusion

We	are	actively	and	intentionally	creating	an	environment	in	which	all	individuals	are	welcomed	and	valued.	In	2013,	we	launched	Mosaic	as	our	renewed	approach	and commitment	to	diversity	and	inclusion.	Through	Mosaic,	we	have	developed	new	strategies	and	activities	to	continue	creating	a	more	diverse	workforce	and	inclusive work	environment.	In	this	way,	we	can	leverage	our	best	thinking	to	improve	our	culture	and	better	serve	our	customers.

We	believe	there	is	no	better	way	to	protect	our	planet	than	to	recruit	and	hire	the	heroes	who	have	protected	our	country.	We	actively	recruit	and	hire	veterans	-	those transitioning	from	military	life	as	well	as	those	long	discharged	from	active	duty.	We	value	the	skills,	experience	and	operational	excellence	they	bring	to	our organization,	as	well	as	their	commitment	to	a	better	tomorrow.	Historically,	we	have	had	great	success	hiring	veterans.	In	2015,	for	example,	28%	of	general	managers, 27%	of	operations	managers,	and	35%	of	maintenance	managers	that	we	hired	self-identified	as	having	served	in	the	U.S.	Army,	Navy,	Marines	Air	Force	or	Coast Guard.

# Customer	Zeal

The	goal	of	our	customer	zeal	pillar	is	to	drive	customer	loyalty	by	offering	differentiated	products	and	services	specifically	designed	to	meet	our	customers'	needs.	We believe	this	increases	customer	loyalty	and	willingness	to	pay	for	a	higher	value	service.

To	help	our	sales	team	with	their	ability	to	identify	specific	customer	needs	and	configure	the	right	offering,	we	launched	Priority	Based	Selling	(PBS)	and	our	Capture pricing	tool	nationwide.

•PBS	enables	us	to	identify	and	segment	customers'	buying	priorities,	and	attract	customers	that	are	willing	to	pay	for	enhanced offerings.

•Capture	is	a	cloud-based	pricing	tool	that	creates	a	more	professional	sales	experience,	helps	realize	better	pricing	levels	at	the	point	of	sale	and	provides enhanced	controls	over	the	quoting	process.

To	ensure	a	consistent	customer	experience	we	are	investing	in	our	customer	service	capabilities	and	are	in	the	process	of	consolidating	over	100	customer	service locations	into	three	Customer	Resource	Centers.	The	new	state-of-the-art	facilities	and	the	technology	deployed	will	provide	our	customer	service	employees	with	the tools	and	capabilities	they	need	to	provide	better	levels	of	service	across	a	myriad	of	touch	points,	including	voice,	email,	text,	social	media	channels	and	live	chat.

To	ensure	our	efforts	are	making	an	impact	and	building	customer	loyalty,	we	also	have	enhanced	the	way	we	receive	feedback	from	our	customers,	including	net promoter	score,	to	ensure	that	every	General	Manager	receives	recent,	relevant	feedback	that	allows	him	or	her	the	ability	to	reach	out	to	customers	directly	and	address issues	immediately.

# Digital	Platform

The	goal	of	our	digital	platform	pillar	is	to	allow	us	to	provide	a	consistent	experience	across	our	business	while	enabling	our	customers	to	do	business	with	us	through more	channels	and	with	better	access	to	information.

We	are	responding	to	our	customers'	requests	for	options	to	do	business	with	us	digitally.	By	increasing	the	ease	of	use	and	functionality	of	our	web-based	market presence,	we	believe	we	enhance	customer	satisfaction,	interaction,	and	connectivity	while	lowering	our	costs.	These	tools	reinforce	to	our	customers	that	they	can	rely on	us	to	handle	their	recycling	and	waste	needs	in	a	way	that	is	easy	and	convenient	for	them.

•Our	MyResource	customer	portal	and	mobile	app	are	online	account	management	tools,	allowing	customers	access	to	their	accounts	and	our	services. Approximately	1.2	million	customers	have	enrolled	in	MyResource,	significantly	enhancing	our	customer	interaction	and	connectivity.

•Our	click-to-buy	channel	allows	customers	to	secure	services	on	a	real-time	basis,	and	provides	capabilities	to	meet	our	customer's	buying preferences.

We	believe	that	leveraging	technology	to	improve	our	core	business	strengthens	our	existing	model	and	customer	relationships,	and	will	serve	to	solidify	our differentiated	offering.

# Corporate	Responsibility	and	Sustainability

In	addition	to	being	committed	to	our	customers	and	employees,	we	are	also	committed	to	the	communities	we	serve	and	to	the	environment.	We	strive	to	be	America's preferred	recycling	and	waste	services	partner.	At	Republic,	we	believe	in	the	preservation	of	our	Blue	Planet	-	a	cleaner,	safer	and	healthier	world.

We	believe	we	have	a	responsibility	to	regenerate	our	planet	with	the	materials	we	are	entrusted	to	handle	every	day	by	driving	increased	recycling,	generating renewable	energy,	and	helping	our	customers	be	more	resourceful.	Additionally,	we	must	lead	by	example,	working	diligently	to	improve	our	relationship	with	the environment	and	society	through	decreased	vehicle	emissions,	innovative	landfill	technologies,	use	of	renewable	energy,	community	engagement	and	employee	growth opportunities.	Sustainability	contributes	to	a	cleaner	world,	while	also	providing	opportunities	to	improve	brand	awareness,	to	increase	customer	loyalty,	to	grow	our business,	to	motivate	our	employees	and	to	differentiate	Republic	from	our	competitors.

To	maximize	our	efforts,	we	have	chosen	to	focus	our	sustainability	platform	around	the	following	five	areas:

•Operations.	We	are	working	to	minimize	the	impact	of	our	operations	around	our	fleet,	our	landfills	and	our	buildings.	Whenever	we	reduce	waste	and inefficiency,	we	become	more	sustainable	and	we	reduce	our	costs.

•Materials	Management.	We	recognize	we	have	an	opportunity	to	extract	value	from	materials	in	the	waste	stream	in	the	form	of	commodities	and	energy	and also	reduce	greenhouse	gas	emission	from	those	materials.

•Communities.	We	are	devoted	to	being	a	good	neighbor	through	customer	engagement,	philanthropic	giving,	and	infrastructure investments.

•Safety.	We	are	committed	to	creating	a	safe	environment	for	our	employees,	our	customers	and	the	communities	we

serve.

•People.	We	employ	and	develop	talented	professionals	who	are	committed	to	our	planet,	our	customers	and	our

Company.

Each	of	these	areas	has	a	significant	impact	on	the	environment	and	society	and	contributes	to	preserving	our	Blue	Planet,	while	forming	the	foundation	of	our	business going	forward.	We	have	developed	programs	that	will	enable	us	to	reduce	our	emissions	by	2.5	million	tons	of	carbon	dioxide	equivalent	over	the	next	four	years, including	developing	at	least	two	landfill

gas-to-energy	projects	each	year,	adding	at	least	150,000	tons	per	year	of	recycling	capacity,	and	reducing	the	greenhouse	gas	emissions	from	our	fleet	by	3%	by	2018.

We	are	tracking	our	progress	and	performance	and	benchmarking	against	our	industry	peers	and	other	companies	outside	of	our	industry.	In	2015,	we	participated	in	the Carbon	Disclosure	Project	(CDP)	S&P	500	Climate	Change	Assessment.	The	resulting	report	represents	the	progress	companies	achieve	in	reducing	emissions, responding	to	climate-related	risks	and	opportunities,	and	mobilizing	influence	to	manage	climate	change.	Our	2015	CDP	Report	score	improved	strongly	from	the	prior year.	In	2014,	our	inaugural	year,	we	established	our	baseline	for	future	submissions.	In	2015,	we	earned	a	disclosure	score	of	98	out	of	100,	which	reflects	our	strong commitment	to	transparency,	thoroughness	and	responsibility,	and	an	A-	band	in	performance,	which	is	one	of	the	highest	performance	scores	possible.	We	also released	a	Sustainability	Report	that	modeled	the	GRI	G4	protocol	which	is	available	on	our	website	at	www.republicservices.com.

Additionally,	our	board	of	directors	formed	a	Sustainability	and	Corporate	Responsibility	Committee	during	2015.	This	committee	has	oversight	responsibility	with respect	to	our	sustainability	performance,	our	corporate	responsibilities,	our	role	as	a	socially	responsible	organization	and	our	enterprise	risk,	including	cyber	security, environmental	and	reputational	risks.

# Cash	Utilization	Strategy

We	believe	our	ability	to	consistently	increase	free	cash	flow	drives	shareholder	value	and	also	provides	useful	information	regarding	the	recurring	cash	provided	by	our operations.	Free	cash	flow	also	demonstrates	our	ability	to	execute	our	cash	utilization	strategy,	which	includes	investments	in	acquisitions	and	returning	a	majority	of free	cash	flow	to	our	shareholders	through	dividends	and	share	repurchases.	We	are	committed	to	an	efficient	capital	structure	and	maintaining	our	investment	grade credit	ratings	on	our	senior	debt,	which	was	rated	BBB+	by	Standard	&	Poor's	Ratings	Services,	BBB	by	Fitch	Ratings,	Inc.	and	Baa3	by	Moody's	Investors	Service, Inc.	as	of	December	31,	2015.	Such	ratings	have	allowed	us,	and	should	continue	to	allow	us,	to	readily	access	capital	markets	at	competitive	rates.

We	manage	our	free	cash	flow	by	ensuring	that	capital	expenditures	and	operating	asset	levels	are	appropriate	in	light	of	our	existing	business	and	growth	opportunities, and	by	closely	managing	our	working	capital,	which	consists	primarily	of	accounts	receivable,	accounts	payable,	and	accrued	landfill	and	environmental	costs.

# Dividends

In	July	2015,	our	board	of	directors	approved	an	increase	in	the	quarterly	dividend	to	$0.30	per	share,	representing	a	7.1%	increase	over	the	prior	year.	Over	the	last	5 years,	our	dividend	has	increased	at	a	compounded	annual	growth	rate	of	8.4%.	We	expect	to	continue	paying	quarterly	cash	dividends	and	may	consider	additional dividend	increases	if	we	believe	they	will	enhance	shareholder	value.

# Share	Repurchases

In	October	2015,	our	board	of	directors	added	$900	million	to	the	existing	share	repurchase	authorization.	As	of	December	31,	2015,	there	were	$855.5	million remaining	under	our	share	repurchase	authorization.	At	least	annually,	our	board	of	directors	reviews	the	intrinsic	value	of	our	stock.	During	2016,	we	expect	to	use approximately	$400	million	of	our	remaining	authorization	to	repurchase	shares	of	our	common	stock.

# Shareholder	Value

We	are	committed	to	creating	long-term	shareholder	value	by	generating	consistent	earnings	and	cash	flow	growth,	while	continually	improving	returns	on	invested capital.	Our	incentive	compensation	programs	are	aligned	with	these	objectives	at	all	levels	of	management.	We	have	an	active	shareholder	outreach	program	and routinely	interact	with	shareholders	on	a	number	of	matters,	including	governance	and	executive	compensation.

# Management	Team

We	believe	we	have	one	of	the	most	experienced	management	teams	in	the	solid	waste	industry.

Donald	W.	Slager	became	our	Chief	Executive	Officer	(CEO)	and	remained	our	President	on	January	1,	2011,	after	having	served	as	our	President	and	Chief	Operating Officer	(COO)	from	the	Allied	Waste	Industries,	Inc.	(Allied)	acquisition	in	December	2008	until	then.	In	addition	to	his	duties	as	CEO,	Mr.	Slager	resumed	the	role	of principal	operating	executive	from	November	2011	until	August	2012	and	then	from	October	2013	to	June	2014.	Prior	to	the	Allied	acquisition,	Mr.	Slager	worked	for Allied	from	1992	through	2008	and	served	in	various	management	positions,	including	President	and	COO	from	2004	through	2008	and	Executive	Vice	President	and COO	from	2003	to	2004.	From	2001	to	2003,	Mr.	Slager	served	as	Senior	Vice	President,	Operations.	Mr.	Slager	held	various	management	positions	at	Allied	from 1992	to	2003,	and	was

previously	General	Manager	at	National	Waste	Services,	where	he	served	in	various	management	positions	since	1985.	Mr.	Slager	has	over	35	years	of	experience	in the	solid	waste	industry.	Mr.	Slager	has	been	a	member	of	our	Board	of	Directors	since	June	24,	2010.

Jeffrey	A.	Hughes	was	named	Executive	Vice	President,	Chief	Administrative	Officer	in	December	2008.	Before	that,	Mr.	Hughes	served	as	Senior	Vice	President, Eastern	Region	Operations	for	Allied	from	2004	until	the	Allied	acquisition	in	December	2008.	Mr.	Hughes	served	as	Assistant	Vice	President	of	Operations	Support	for Allied	from	1999	to	2004	and	as	a	District	Manager	for	Allied	from	1988	to	1999.	Mr.	Hughes	has	over	28	years	of	experience	in	the	solid	waste	industry.

Robert	A.	Maruster	was	elected	Executive	Vice	President,	Chief	Operating	Officer	in	June	2014.	Mr.	Maruster	has	years	of	broad-based	operational	experience	in	the airline	industry.	He	joined	Republic	from	JetBlue	Airways	Corporation,	where	he	was	its	COO/Executive	Vice	President	from	2009	to	April	2014.	Prior	to	that,	Mr. Maruster	served	JetBlue	as	its	Senior	Vice	President,	Customer	Service	and	Vice	President,	Operational	Planning.	Before	joining	JetBlue	in	2005,	he	served	for	12	years in	various	management	roles	for	Delta	Air	Lines,	culminating	in	his	role	running	the	Atlanta	Hub	as	Vice	President,	Operations	and	Customer	Service.

Michael	P.	Rissman	has	served	as	our	Executive	Vice	President,	Chief	Legal	Officer	and	Corporate	Secretary	since	August	2009.	Previously,	Mr.	Rissman	had	served	as acting	General	Counsel	and	Corporate	Secretary	from	March	2009.	Mr.	Rissman	joined	Allied	as	Vice	President	and	Deputy	General	Counsel	in	July	2007	and continued	in	the	same	positions	at	Republic	following	the	Allied	acquisition	in	December	2008.	Prior	to	joining	Allied,	Mr.	Rissman	was	a	partner	at	Mayer	Brown	LLP in	Chicago,	where	he	worked	from	1990	until	coming	to	Allied.

Charles	F.	Serianni	was	appointed	Executive	Vice	President,	Chief	Financial	Officer	in	August	2014.	Mr.	Serianni	is	a	seasoned	senior	executive	with	31	years	of experience	in	a	variety	of	progressively	more	responsible	roles.	He	was	named	Vice	President,	Region	Controller	for	the	Company's	former	West	Region	in	July	2013. Before	that,	Mr.	Serianni	served	as	our	Assistant	Controller	starting	in	June	1998	and	progressed	to	Senior	Vice	President,	Chief	Accounting	Officer	in	December	2008. He	served	as	the	Accounting	Operations	Director	for	Republic	Industries,	Inc.	(AutoNation)	from	February	1997	to	June	1998.	Before	that,	Mr.	Serianni	served	as	the Accounting	Operations	Director	for	Sunglass	Hut	International,	Inc.	from	May	1993	to	February	1997,	and	as	Manager,	Accounting	and	Auditing	Services	for	Deloitte &	Touche	from	September	1984	to	May	1993.

Our	local	and	area	management	teams	have	extensive	industry	experience	in	growing,	operating	and	managing	solid	waste	companies	and	have	substantial	experience in	their	local	geographic	markets.	This	allows	us	to	quickly	respond	to	and	meet	our	customers'	needs	and	stay	in	touch	with	local	businesses	and	municipalities.	We believe	our	strong	area	management	teams	allow	us	to	effectively	and	efficiently	drive	our	initiatives	and	help	ensure	consistency	throughout	the	organization.	Our	area management	teams	and	area	presidents	have	extensive	authority,	responsibility	and	autonomy	for	operations	within	their	respective	geographic	markets.	As	a	result	of retaining	experienced	managers	with	extensive	knowledge	of	and	involvement	in	their	local	communities,	we	are	proactive	in	anticipating	customers'	needs	and adjusting	to	changes	in	our	markets.	We	also	seek	to	implement	the	best	practices	of	our	various	business	units	throughout	our	operations	to	continue	improving	our operations	and	our	operating	margins.

# Integrated	Operations

We	believe	Republic	is	a	company	with	a	strong,	national	operating	platform	that	allows	us	to	compete	more	effectively	and	efficiently	in	the	local	markets	in	which	we operate.	We	seek	to	achieve	a	high	rate	of	internalization	by	controlling	waste	streams	from	the	point	of	collection	through	processing	or	disposal.	During	the	year	ended December	31,	2015,	approximately	68%	of	the	total	waste	volume	we	collected	was	disposed	at	landfills	we	own	or	operate	(internalization).	Our	fully	integrated markets	generally	have	a	lower	cost	of	operations	and	more	favorable	cash	flows	than	our	non-integrated	markets.	Through	acquisitions,	landfill	operating	agreements and	other	market	development	activities,	we	create	market-specific,	integrated	operations	typically	consisting	of	one	or	more	collection	operations,	transfer	stations	and landfills.	We	also	operate	recycling	centers	in	markets	where	diversion	of	waste	is	a	priority,	it	is	profitable	to	do	so,	and	we	can	earn	an	appropriate	return	on	our investment.

Our	operations	primarily	consist	of	providing	collection,	transfer	and	disposal	of	non-hazardous	solid	waste,	recovering	and	recycling	of	certain	materials,	and	energy services.

# Collection	Services

We	provide	residential,	small-container	commercial,	and	large-container	industrial	solid	waste	collection	services	through	340	collection	operations.	In	2015, approximately	76%	of	our	revenue	was	derived	from	our	collection	business.	Within	collection,	approximately	25%	of	our	revenue	relates	to	residential	services, approximately	31%	relates	to	small-container	commercial	services,	and	approximately	21%	relates	to	large-container	industrial	services.

Our	residential	collection	business	involves	the	curbside	collection	of	waste	for	transport	to	transfer	stations,	or	directly	to	landfills	or	recycling	centers.	We	typically perform	residential	solid	waste	collection	services	under	contracts	with	municipalities,	which	we	generally	secure	by	competitive	bid	and	which	give	us	exclusive	rights to	service	all	or	a	portion	of	the	homes	in	the	municipalities.	These	contracts	usually	range	in	duration	from	one	to	five	years,	although	some	of	our	exclusive	franchises are	for	significantly	longer	periods.	We	also	perform	residential	services	on	a	subscription	basis,	in	which	individual	households	contract	directly	with	us.	The	fees received	for	subscription	residential	collection	are	based	primarily	on	the	market,	collection	frequency,	type	of	service,	the	distance	to	the	disposal	facility	and	the	cost	of disposal.	In	general,	subscription	residential	collection	fees	are	paid	quarterly	in	advance	by	the	customers	receiving	the	service.

In	our	small-container	commercial	business,	we	supply	our	customers	with	waste	containers	of	varying	sizes.	We	typically	perform	commercial	collection	services under	one-	to	three-year	service	agreements,	and	fees	are	determined	based	on	a	number	of	factors	including	the	market,	collection	frequency,	type	of	equipment furnished,	type	and	volume	or	weight	of	the	waste	collected,	transportation	costs	and	the	cost	of	disposal.	Our	small-container	commercial	services	are	typically	offered to	small	business	complexes,	multi-family	housing	and	strip	malls,	and	include	industries	such	as	restaurants,	retail,	real-estate,	and	professional	and	other	services.

Our	large-container	industrial	collection	business	includes	both	recurring	and	temporary	customer	relationships.	For	the	recurring	portion,	we	supply	our	customers	with waste	containers	of	varying	sizes	and	rent	compactors	to	large	waste	generators.	We	typically	perform	the	collection	services	under	one-	to	three-year	service agreements,	and	fees	are	determined	based	on	a	number	of	factors	including	the	market,	collection	frequency,	type	of	equipment	furnished,	type	and	volume	or	weight	of the	waste	collected,	transportation	costs	and	the	cost	of	disposal.	Our	recurring	large-container	industrial	services	are	typically	offered	to	larger	facilities,	hotels	and office	buildings,	and	include	industries	such	as	manufacturing,	retail,	hospitality	and	professional	and	other	services.

For	the	temporary	portion	of	our	large-container	industrial	collection	business,	the	majority	of	the	waste	relates	to	construction	and	demolition	activities	and	is	typically event-driven.	We	provide	temporary	waste	collection	services	on	a	contractual	basis	with	terms	ranging	from	a	single	pickup	to	one-year	or	longer.

We	also	provide	recycling	collection	services	tailored	to	our	customers'	requirements	to	complete	our	service	offerings.

# Transfer	Services

We	own	or	operate	201	transfer	stations.	Revenue	at	our	transfer	stations	is	primarily	generated	by	charging	tipping	or	disposal	fees,	which	accounted	for	approximately 5%	of	our	revenue	during	2015.	Our	collection	operations	deposit	waste	at	these	transfer	stations,	as	do	other	private	and	municipal	haulers,	for	compaction	and	transfer to	disposal	sites	or	recycling	centers.	Transfer	stations	provide	collection	operations	with	a	cost	effective	means	to	consolidate	waste	and	reduce	transportation	costs while	providing	our	landfills	with	an	additional	"gate"	to	extend	their	geographic	reach.

When	our	own	collection	operations	use	our	transfer	stations,	this	improves	internalization	by	allowing	us	to	retain	fees	we	would	otherwise	pay	to	third-party	disposal sites.	It	also	allows	us	to	manage	costs	associated	with	waste	disposal	because:	(1)	transfer	trucks	have	larger	capacities	than	collection	trucks,	allowing	us	to	deliver more	waste	to	the	landfill	in	each	trip;	(2)	waste	is	accumulated	and	compacted	at	strategically	located	transfer	stations	to	increase	efficiency;	and	(3)	we	can	retain volume	by	managing	the	waste	to	one	of	our	own	landfills	rather	than	to	a	competitor's.

# Landfill	Services

We	own	or	operate	193	active	landfills.	We	charge	tipping	fees	to	third	parties,	which	accounted	for	approximately	12%	of	our	revenue	during	2015.	As	of	December	31, 2015,	we	had	approximately	37,100	permitted	acres	and	total	available	permitted	and	probable	expansion	disposal	capacity	of	approximately	5	billion	in-place	cubic yards.	The	in-place	capacity	of	our	landfills	is	subject	to	change	based	on	engineering	factors,	requirements	of	regulatory	authorities,	our	ability	to	continue	to	operate our	landfills	in	compliance	with	applicable	regulations,	and	our	ability	to	successfully	renew	operating	permits	and	obtain	expansion	permits	at	our	sites.	Some	of	our landfills	accept	non-hazardous	special	waste,	including	utility	ash,	asbestos	and	contaminated	soils.

Most	of	our	active	landfill	sites	have	the	potential	for	expanded	disposal	capacity	beyond	the	currently	permitted	acreage.	We	monitor	the	availability	of	permitted disposal	capacity	at	each	of	our	landfills	and	evaluate	whether	to	pursue	an	expansion	at	a	given	landfill	based	on	estimated	future	waste	volumes	and	prices,	market needs,	remaining	capacity	and	the	likelihood	of	obtaining	an	expansion.	To	satisfy	future	disposal	demand,	we	are	currently	seeking	to	expand	permitted	capacity	at certain	landfills;	however,	we	cannot	assure	you	that	all	proposed	or	future	expansions	will	be	permitted	as	designed.

Republic	is	committed	to	harnessing	landfill	gas,	the	natural	byproduct	of	decomposing	waste,	and	converting	it	to	energy.	The	use	of	landfill	gas	provides	our	economy with	benefits,	including	reducing	air	pollution	through	the	capture	and	use	of	methane.	As	of	December	31,	2015,	we	operated	69	landfill	gas	and	renewable	energy projects.

We	also	have	responsibility	for	126	closed	landfills,	for	which	we	have	associated	closure	and	post-closure	obligations.

# Recycling	Services

We	own	or	operate	67	recycling	centers.	These	facilities	generate	revenue	through	the	processing	and	sale	of	old	corrugated	cardboard	(OCC),	old	newspaper	(ONP), aluminum,	glass	and	other	materials,	which	accounted	for	approximately	4%	of	our	revenue	during	2015.	Approximately	70%	of	our	recycling	center	volume	relates	to OCC,	ONP	and	other	mixed	paper.	Of	the	5.1	million	tons	we	sold	during	2015,	2.5	million	moved	through	our	recycling	centers	and	2.6	million	we	collected	and delivered	to	third	parties.

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	$27	million	and	$18	million,	respectively.

In	certain	instances	we	issue	recycling	rebates	to	municipalities	or	large	industrial	customers,	which	can	be	based	on	the	price	we	receive	upon	the	final	sale	of	recycled commodities,	a	fixed	contractual	rate	or	other	measures.	We	also	receive	rebates	when	we	dispose	of	recycled	commodities	at	third-party	facilities.

As	consumer	demand	for	recycling	services	has	increased,	we	have	met	that	demand	by	integrating	recycling	components	to	each	of	our	collection	service	offerings. Our	goal	is	to	provide	a	complete	waste	stream	management	solution	to	our	customers	in	an	environmentally	sustainable	way.

We	continue	to	invest	in	proven	technologies	to	control	costs	and	to	simplify	and	streamline	recycling	for	our	customers.	For	example,	advanced	sorting	equipment,	such as	disk	screens,	magnets	and	optical	sorters,	identifies	and	separates	different	kinds	of	paper,	metals,	plastics	and	other	materials	to	increase	efficiency	and	maximize	our recycling	efforts.

# Energy	Services

In	addition	to	certain	of	our	landfill	disposal	sites,	we	own	or	operate	8	treatment,	recovery	and	disposal	facilities	and	12	salt	water	disposal	wells.	Energy	services waste	is	generated	from	the	by-products	of	oil	and	natural	gas	exploration	and	production	activity,	including	waste	created	throughout	the	initial	drilling	and	completion of	an	oil	or	natural	gas	well,	production	wastes	and	water	produced	during	a	well's	operating	life,	contaminated	soils	that	require	treatment	during	site	reclamation, substances	that	require	clean-up	after	a	spill,	as	well	as	waste	generated	by	coal-fired	power	plants.	Revenue	is	therefore	primarily	generated	through	vertical	and horizontal	drilling,	hydraulic	fracturing,	production	and	clean-up	activity,	as	well	as	other	complementary	services	including	closed	loop	collection	systems	and	the	sale of	recovered	products.	In	2015,	approximately	1%	of	our	revenue	was	derived	from	energy	services.	Energy	services	activity	varies	across	market	areas	that	are	tied	to the	natural	resource	basins	in	which	the	drilling	activity	occurs	and	reflects	the	regulatory	environment,	pricing	and	disposal	alternatives	available	in	any	given	market.

# Other	Services

Other	revenue	consists	primarily	of	National	Accounts	revenue	generated	from	nationwide	contracts	in	markets	outside	our	operating	areas	where	the	associated	waste handling	services	are	subcontracted	to	local	operators.	Consequently,	substantially	all	of	this	revenue	is	offset	with	related	subcontract	costs,	which	are	recorded	in	cost of	operations.

# Competition

We	operate	in	a	competitive	industry.	Competition	in	the	non-hazardous	solid	waste	industry	comes	from	a	few	other	large,	national	publicly	owned	companies,	several regional	publicly	and	privately	owned	companies,	and	thousands	of	small	privately-owned	companies.	In	any	given	market,	competitors	may	have	larger	operations	and greater	resources.	In	addition,	we	compete	with	municipalities	that	maintain	waste	collection	or	disposal	operations.	These	municipalities	may	have	financial	advantages due	to	the	availability	of	tax	revenue	and	tax-exempt	financing.

We	compete	for	collection	accounts	primarily	on	the	basis	of	price	and	the	quality	of	our	services.	From	time-to-time,	our	competitors	reduce	the	price	of	their	services in	an	effort	to	expand	market	share	or	to	win	a	competitively	bid	municipal	contract.	Our	ability	to	maintain	and	increase	prices	in	certain	markets	may	be	impacted	by our	competitors'	pricing	policies.	This	may	have	an	impact	on	our	future	revenue	and	profitability.

# Seasonality	and	Severe	Weather

Our	operating	revenues	tend	to	be	somewhat	higher	in	the	summer	months,	primarily	due	to	higher	volumes	of	construction	and	demolition	waste.	The	volumes	of	large- container	industrial	and	residential	waste	in	certain	regions	of	the	country	also	tend	to	increase	during	the	summer	months.	Our	second	and	third	quarter	revenues	and results	of	operations	typically	reflect	this	seasonality.

Our	operations	can	be	adversely	affected	by	periods	of	inclement	or	severe	weather,	which	could	increase	the	volume	of	waste	collected	under	our	existing	contracts (without	corresponding	compensation),	delay	the	collection	and	disposal	of	waste,	reduce	the	volume	of	waste	delivered	to	our	disposal	sites	or	delay	the	construction	or expansion	of	our	landfill	sites	and	other	facilities.	Our	operations	also	can	be	favorably	affected	by	severe	weather,	which	could	increase	the	volume	of	waste	in situations	where	we	are	able	to	charge	for	our	additional	services.

# Regulation

Our	facilities	and	operations	are	subject	to	a	variety	of	federal,	state	and	local	requirements	that	regulate,	among	other	things,	the	environment,	public	health,	safety, zoning	and	land	use.	Operating	and	other	permits,	licenses	and	other	approvals	generally	are	required	for	landfills	and	transfer	stations,	certain	solid	waste	collection vehicles,	fuel	storage	tanks	and	other	facilities	that	we	own	or	operate.	These	permits	are	subject	to	denial,	revocation,	modification	and	renewal	in	certain circumstances.	Federal,	state	and	local	laws	and	regulations	vary,	but	generally	govern	wastewater	or	storm	water	discharges,	air	emissions,	the	handling,	transportation, treatment,	storage	and	disposal	of	hazardous	and	non-hazardous	waste,	and	the	remediation	of	contamination	associated	with	the	release	or	threatened	release	of hazardous	substances.	These	laws	and	regulations	provide	governmental	authorities	with	strict	powers	of	enforcement,	which	include	the	ability	to	revoke	or	decline	to renew	any	of	our	operating	permits,	obtain	injunctions,	or	impose	fines	or	penalties	in	the	event	of	violations,	including	criminal	penalties.	The	U.S.	Environmental Protection	Agency	(EPA)	and	various	other	federal,	state	and	local	authorities	administer	these	regulations.

We	strive	to	conduct	our	operations	in	compliance	with	applicable	laws,	regulations	and	permits.	However,	from	time	to	time	we	have	been	issued	citations	or	notices from	governmental	authorities	that	have	resulted	in	the	need	to	expend	funds	for	remedial	work	and	related	activities	at	various	landfills	and	other	facilities	or	in	the need	to	expend	funds	for	fines,	penalties	or	settlements.	We	cannot	assure	you	that	citations	and	notices	will	not	be	issued	in	the	future	despite	our	strong	regulatory compliance	efforts.	We	have	established	final	capping,	closure,	post-closure	and	remediation	reserves	that	we	believe,	based	on	currently	available	information,	will	be adequate	to	cover	our	current	estimates	of	regulatory	costs;	however,	we	cannot	assure	you	that	actual	costs	will	not	exceed	our	reserves.

# Federal	Regulation

The	following	summarizes	the	primary	federal	environmental	and	occupational	health	and	safety-related	statutes	that	affect	our	facilities	and	operations:

•	The	Solid	Waste	Disposal	Act,	including	the	Resource	Conservation	and	Recovery	Act	(RCRA).		RCRA	establishes	a	framework	for	regulating	the	handling, transportation,	treatment,	storage	and	disposal	of	hazardous	and	non-hazardous	solid	waste,	and	requires	states	to	develop	programs	to	ensure	the	safe	disposal of	solid	waste	in	sanitary	landfills.

Subtitle	D	of	RCRA	establishes	a	framework	for	regulating	the	disposal	of	municipal	solid	waste.	Regulations	under	Subtitle	D	currently	include	minimum comprehensive	solid	waste	management	criteria	and	guidelines,	including	location	restrictions,	facility	design	and	operating	criteria,	final	capping,	closure	and post-closure	requirements,	financial	assurance	standards,	groundwater	monitoring	requirements	and	corrective	action	standards.	All	of	the	states	in	which	we operate	have	implemented	permit	programs	pursuant	to	RCRA	and	Subtitle	D.	These	state	permit	programs	may	include	landfill	requirements	that	are	more stringent	than	those	of	Subtitle	D.	Our	failure	to	comply	with	any	of	these	environmental	requirements	at	any	of	our	locations	may	lead	to	temporary	or permanent	loss	of	an	operating	permit,	which	would	result	in	costs	in	connection	with	securing	new	permits	and	reduced	revenue	from	lost	operational	time.

All	of	our	planned	landfill	expansions	and	new	landfill	development	projects	have	been	engineered	to	meet	or	exceed	Subtitle	D	requirements.	Operating	and design	criteria	for	existing	operations	have	been	modified	to	comply	with	these	regulations.	Compliance	with	Subtitle	D	regulations	has	resulted	in	increased costs	and	may	in	the	future	require	substantial	additional	expenditures	in	addition	to	other	costs	normally	associated	with	our	waste	management	activities.

•The	Comprehensive	Environmental	Response,	Compensation	and	Liability	Act	of	1980	(CERCLA).	CERCLA,	among	other	things,	provides	for	the	cleanup	of sites	from	which	there	is	a	release	or	threatened	release	of	a	hazardous	substance	into	the	environment.	CERCLA	may	impose	strict	joint	and	several	liability for	the	costs	of	cleanup	and	for

damages	to	natural	resources	upon	current	owners	and	operators	of	a	site,	parties	who	were	owners	or	operators	of	a	site	at	the	time	the	hazardous	substances were	disposed	of,	parties	who	transported	the	hazardous	substances	to	a	site,	and	parties	who	arranged	for	the	disposal	of	the	hazardous	substances	at	a	site. Under	the	authority	of	CERCLA	and	its	implementing	regulations,	detailed	requirements	apply	to	the	manner	and	degree	of	investigation	and	remediation	of facilities	and	sites	where	hazardous	substances	have	been	or	are	threatened	to	be	released	into	the	environment.	Liability	under	CERCLA	is	not	dependent	on the	existence	or	disposal	of	only	"hazardous	wastes,"	but	also	can	be	based	upon	the	existence	of	small	quantities	of	more	than	700	"substances"	characterized by	the	EPA	as	"hazardous,"	many	of	which	are	found	in	common	household	waste.	Among	other	things,	CERCLA	authorizes	the	federal	government	to investigate	and	remediate	sites	at	which	hazardous	substances	have	been	or	are	threatened	to	be	released	into	the	environment,	or	to	order	persons	potentially liable	for	the	cleanup	of	the	hazardous	substances	to	do	so	themselves.	In	addition,	the	EPA	has	established	a	National	Priorities	List	of	sites	at	which hazardous	substances	have	been,	or	are	threatened	to	be,	released	and	which	require	investigation	or	cleanup.

CERCLA	liability	is	strict	liability.	It	can	be	founded	upon	the	release	or	threatened	release,	even	as	a	result	of	unintentional,	non-negligent	or	lawful	action,	of hazardous	substances,	including	very	small	quantities	of	such	substances.	Thus,	even	if	we	have	never	knowingly	transported	or	received	hazardous	substances, it	is	likely	that	hazardous	substances	have	been	deposited	or	"released"	at	landfills	or	other	facilities	that	we	presently	or	historically	have	owned	or	operated, or	at	properties	owned	by	third	parties	to	which	we	have	transported	waste.	Therefore,	we	could	be	liable	under	CERCLA	for	the	cost	of	cleaning	up	such hazardous	substances	at	such	sites	and	for	damages	to	natural	resources,	even	if	those	substances	were	deposited	at	our	facilities	before	we	acquired	or	operated them.	The	costs	of	a	CERCLA	cleanup	can	be	very	expensive	and	can	include	the	costs	of	disposing	of	hazardous	substances	at	appropriately-licensed facilities.	Given	the	difficulty	of	obtaining	insurance	for	environmental	impairment	liability,	any	such	liability	could	have	a	material	impact	on	our	business, financial	condition,	results	of	operations	and	cash	flows.

•The	Federal	Water	Pollution	Control	Act	of	1972	(the	Clean	Water	Act).	This	act	regulates	the	discharge	of	pollutants	from	a	variety	of	sources,	including	solid waste	disposal	sites,	into	streams,	rivers	and	other	waters	of	the	United	States.	Runoff	from	our	landfills	and	transfer	stations	that	is	discharged	into	surface waters	through	discrete	conveyances	must	be	covered	by	discharge	permits	that	generally	require	us	to	conduct	sampling	and	monitoring,	and,	under	certain circumstances,	to	reduce	the	quantity	of	pollutants	in	those	discharges.	Storm	water	discharge	regulations	under	the	Clean	Water	Act	require	a	permit	for certain	construction	activities	and	for	runoff	from	industrial	operations	and	facilities,	which	may	affect	our	operations.	If	a	landfill	or	transfer	station	discharges wastewater	through	a	sewage	system	to	a	publicly	owned	treatment	works,	the	facility	must	comply	with	discharge	limits	imposed	by	that	treatment	works.	In addition,	states	may	adopt	groundwater	protection	programs	under	the	Clean	Water	Act	or	the	Safe	Drinking	Water	Act	that	could	affect	the	manner	in	which our	landfills	monitor	and	control	their	waste	management	activities.	Furthermore,	if	development	at	any	of	our	facilities	alters	or	affects	wetlands,	we	may	be required	to	secure	permits	before	such	development	starts.	In	these	situations,	permitting	agencies	may	require	mitigation	of	wetland	impacts.

•The	Clean	Air	Act.		The	Clean	Air	Act	imposes	limitations	on	emissions	from	various	sources,	including	landfills.	In	March	1996,	the	EPA	promulgated regulations	that	require	large	municipal	solid	waste	landfills	to	install	landfill	gas	monitoring	systems.	These	regulations	apply	to	landfills	that	commenced construction,	reconstruction	or	modification	on	or	after	May	30,	1991,	and,	principally,	to	landfills	that	can	accommodate	2.5	million	cubic	meters	or	more	of municipal	solid	waste.	The	regulations	apply	whether	the	landfills	are	active	or	closed.	The	date	by	which	each	affected	landfill	must	have	a	gas	collection	and control	system	installed	and	made	operational	varies	depending	on	calculated	emission	rates	at	the	landfill.	On	August	14,	2015,	the	EPA	issued	proposed amendments	to	its	regulations	that	would	require	large	landfills	that	commenced	construction,	reconstruction,	or	modification	on	or	after	July	17,	2014	to capture	additional	landfill	gas	to	reduce	emissions	of	methane	and	certain	non-methane	gases,	which	are	recognized	as	greenhouse	gases.	In	a	separate	action commenced	that	same	day,	the	EPA	proposed	updates	to	its	1996	Emission	Guidelines	to	reduce	emissions	of	landfill	gas	from	existing	active	landfills.	Both actions	are	part	of	the	Obama	Administration's	Climate	Action	Plan	-	Strategy	to	Reduce	Methane	Emissions.	These	and	other	efforts	to	curtail	the	emission	of greenhouse	gases	and	to	ameliorate	the	effect	of	climate	change	may	require	our	landfills	to	deploy	more	stringent	emission	controls	and	monitoring	systems, with	resulting	capital	or	operating	costs.	Many	state	regulatory	agencies	also	currently	require	monitoring	systems	for	the	collection	and	control	of	certain landfill	gas.	Certain	of	these	state	agencies	are	also	implementing	greenhouse	gas	control	regulations	that	would	also	apply	to	landfill	gas	emissions.	See Item	1A,	Risk	Factors	–	"Regulation	of	greenhouse	gas	emissions	could	impose	costs	on	our	operations,	the	magnitude	of	which	we	cannot	yet	estimate,"	in	this Form	10-K.

In	addition,	our	vehicle	fleet	also	may	become	subject	to	higher	efficiency	standards	or	other	carbon-emission	restrictions.	Over	the	past	two	years,	the	EPA and	the	National	Highway	Traffic	Safety	Administration	(NHTSA)	have	adopted	regulations	mandating	the	reduction	of	vehicle	tail	pipe	emissions	as	a	means of	reducing	greenhouse	gas

emissions.	The	regulations	take	the	form	of	fuel	economy	standards.	The	EPA	and	the	NHTSA	have	developed	fuel	economy	standards	in	two	vehicle categories:	(1)	conventional	automobiles	and	light-duty	trucks;	and	(2)	heavy-duty	trucks,	including	solid	waste	collection	vehicles	and	tractor	trailers.	We	own and	operate	vehicles	in	both	categories.	For	conventional	automobiles	and	light-duty	trucks,	in	May	2010	the	EPA	and	the	NHTSA	finalized	fuel	economy standards	for	model	years	2012	through	2016.	In	October	2011,	the	EPA	and	the	NHTSA	initiated	a	second	round	of	rulemaking	for	conventional	automobiles and	pick-up	trucks	in	model	years	2017	through	2025.	In	August	2011,	the	EPA	and	the	NHTSA	finalized	standards	for	heavy-duty	trucks,	including	solid waste	collection	vehicles	and	tractor	trailers,	for	model	years	2014	through	2018.	On	June	19,	2015,	EPA	and	NHTSA	proposed	additional	regulations	that would	impose	more	stringent	standards	for	heavy-duty	vehicles	through	model-year	2027.	In	issuing	the	proposed	fuel	economy	standards	for	heavy-duty trucks	and	tractor	trailers,	the	government	estimated	that	the	increased	equipment	cost	would	be	recouped	over	a	period	of	two	years	for	a	tractor/trailer	combo, and	over	a	period	of	6	years	for	a	garbage	truck,	and	each	vehicle	would	continue	to	save	fuel	costs	over	its	operating	life.

•The	Occupational	Safety	and	Health	Act	of	1970	(OSHA).		This	act	authorizes	the	Occupational	Safety	and	Health	Administration	of	the	U.S.	Department	of Labor	to	promulgate	occupational	safety	and	health	standards.	A	number	of	these	standards,	including	standards	for	notices	of	hazardous	chemicals	and	the handling	of	asbestos,	apply	to	our	facilities	and	operations.

# State	and	Local	Regulation

Each	state	in	which	we	operate	has	its	own	laws	and	regulations	governing	solid	waste	disposal,	water	and	air	pollution,	and,	in	most	cases,	releases	and	cleanup	of hazardous	substances	and	liabilities	for	such	matters.	States	also	have	adopted	regulations	governing	the	design,	operation,	maintenance	and	closure	of	landfills	and transfer	stations.	Some	counties,	municipalities	and	other	local	governments	have	adopted	similar	laws	and	regulations.	In	addition,	our	operations	may	be	affected	by the	trend	in	many	states	toward	requiring	solid	waste	reduction	and	recycling	programs.	For	example,	several	states	have	enacted	laws	that	require	counties	or municipalities	to	adopt	comprehensive	plans	to	reduce,	through	solid	waste	planning,	composting,	recycling	or	other	programs,	the	volume	of	solid	waste	deposited	in landfills.	Additionally,	laws	and	regulations	restricting	the	disposal	of	certain	waste	in	solid	waste	landfills,	including	yard	waste,	newspapers,	beverage	containers, unshredded	tires,	lead-acid	batteries,	electronic	wastes	and	household	appliances,	have	been	adopted	in	several	states	and	are	being	considered	in	others.	Legislative	and regulatory	measures	to	mandate	or	encourage	waste	reduction	at	the	source	and	waste	recycling	also	have	been	considered,	or	are	under	consideration	by,	the U.S.	Congress	and	the	EPA.

To	construct,	operate	and	expand	a	landfill,	we	must	obtain	one	or	more	construction	or	operating	permits,	as	well	as	zoning	and	land	use	approvals.	These	permits	and approvals	may	be	burdensome	to	obtain	and	to	comply	with,	are	often	opposed	by	neighboring	landowners	and	citizens'	groups,	may	be	subject	to	periodic	renewal,	and are	subject	to	denial,	modification,	non-renewal	and	revocation	by	the	issuing	agency.	Significant	compliance	disclosure	obligations	often	accompany	these	processes.	In connection	with	our	acquisition	of	existing	landfills,	we	may	be	required	to	spend	considerable	time,	effort	and	money	to	bring	the	acquired	facilities	into	compliance with	applicable	requirements	and	to	obtain	the	permits	and	approvals	necessary	to	increase	their	capacity.

# Other	Regulations

Many	of	our	facilities	own	and	operate	underground	storage	tanks	that	are	generally	used	to	store	petroleum-based	products.	These	tanks	are	subject	to	federal,	state	and local	laws	and	regulations	that	mandate	their	periodic	testing,	upgrading,	closure	and	removal.	In	the	event	of	leaks	or	releases	from	these	tanks,	these	regulations	require that	polluted	groundwater	and	soils	be	remediated.	We	believe	that	all	of	our	underground	storage	tanks	meet	all	applicable	regulations.	If	underground	storage	tanks	we own	or	operate	leak,	we	could	be	liable	for	response	costs	and,	if	the	leakage	migrates	onto	the	property	of	others,	we	could	be	liable	for	damages	to	third	parties.	We	are unaware	of	facts	indicating	that	issues	of	compliance	with	regulations	related	to	underground	storage	tanks	will	have	a	material	adverse	effect	on	our	consolidated financial	condition,	results	of	operations	or	cash	flows.

With	regard	to	our	solid	waste	transportation	operations,	we	are	subject	to	the	jurisdiction	of	the	Surface	Transportation	Board	and	are	regulated	by	the	Federal	Highway Administration,	Office	of	Motor	Carriers,	and	by	regulatory	agencies	in	states	that	regulate	such	matters.	Various	state	and	local	government	authorities	have	adopted,	or are	considering	adopting,	laws	and	regulations	that	would	restrict	the	transportation	of	solid	waste	across	state,	county,	or	other	jurisdictional	lines.	In	1978,	the U.S.	Supreme	Court	ruled	that	a	law	that	restricts	the	importation	of	out-of-state	solid	waste	is	unconstitutional;	however,	states	have	attempted	to	distinguish	proposed laws	from	those	involved	in	and	implicated	by	that	ruling.	In	1994,	the	U.S.	Supreme	Court	ruled	that	a	flow	control	law,	which	attempted	to	restrict	solid	waste	from leaving	its	place	of	generation,	imposes	an	impermissible	burden	upon	interstate	commerce	and	is	unconstitutional.	In	2007,	however,	the	U.S.	Supreme	Court	upheld the	right	of	a	local	government	to	direct	the	flow	of	solid	waste	to	a	publicly-owned	and	publicly-operated	waste	facility.	A

number	of	county	and	other	local	jurisdictions	have	enacted	ordinances	or	other	regulations	restricting	the	free	movement	of	solid	waste	across	jurisdictional boundaries.	Other	governments	may	enact	similar	regulations	in	the	future.	These	regulations	may	cause	a	decline	in	volumes	of	waste	delivered	to	our	landfills	or transfer	stations	and	may	increase	our	costs	of	disposal,	thereby	adversely	affecting	our	operations	and	our	financial	results.

# Liabilities	Established	for	Landfill	and	Environmental	Costs

We	have	established	reserves	for	landfill	and	environmental	costs,	which	include	landfill	site	final	capping,	closure	and	post-closure	costs.	We	periodically	reassess	such costs	based	on	various	methods	and	assumptions	regarding	landfill	airspace	and	the	technical	requirements	of	Subtitle	D	of	RCRA,	and	we	adjust	our	rates	used	to expense	final	capping,	closure	and	post-closure	costs	accordingly.	Based	on	current	information	and	regulatory	requirements,	we	believe	that	our	recorded	reserves	for such	landfill	and	environmental	expenditures	are	adequate;	however,	environmental	laws	may	change,	and	we	cannot	assure	you	that	our	recorded	reserves	will	be adequate	to	cover	requirements	under	existing	or	new	environmental	laws	and	regulations,	future	changes	or	interpretations	of	existing	laws	and	regulations,	or	adverse environmental	conditions	previously	unknown	to	us.	Refer	to	the	"Contractual	Obligations"	section	of	our	Management's	Discussion	and	Analysis	of	Financial Condition	and	Results	of	Operations	contained	in	Item	7	of	this	Form	10-K	and	to	Note	2,	Summary	of	Significant	Accounting	Policies,	to	our	consolidated	financial statements	in	Item	8	of	this	Form	10-K	for	further	information.

# Liability	Insurance	and	Bonding

The	nature	of	our	business	exposes	us	to	the	possible	risk	of	liabilities	arising	out	of	our	operations,	including	damages	to	the	environment,	property,	employees	or	the general	public.	Although	we	focus	on	operating	safely	and	prudently,	we	occasionally	receive	claims,	alleging	damages,	negligence	or	other	wrongdoing	in	the	planning or	performance	of	work,	which	resulted	in	harm	to	the	environment,	property,	employees	or	the	general	public.	These	liabilities	can	be	significant.	We	also	could	be subject	to	fines	and	civil	and	criminal	penalties	in	connection	with	alleged	violations	of	regulatory	requirements.	We	maintain	various	policies	of	insurance	that,	subject to	limitations,	exclusions,	or	deductibles,	provide	coverage	for	these	types	of	claims.	While	we	believe	the	amount	of	insurance	is	appropriate	for	our	type	of	business, we	can	neither	assure	you	that	such	insurance	would	be	adequate,	in	scope	or	amount,	in	the	event	of	a	major	loss,	nor	that	we	will	not	be	exposed	to	uninsured liabilities	that	could	have	a	material	adverse	effect	on	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.	We	also	cannot	assure	you	that	we	would continue	to	maintain	the	insurance	should	market	conditions	in	the	insurance	industry	make	such	coverage	cost	prohibitive.

Accruals	for	deductibles	are	based	on	claims	filed	and	actuarial	estimates	of	claims	development	and	claims	incurred	but	not	reported.	Due	to	the	variable	condition	of the	insurance	market,	we	have	experienced,	and	may	experience	in	the	future,	increased	deductible	retention	levels	and	increased	premiums	or	unavailability	of insurance.	As	we	assume	more	risk	through	higher	retention	levels,	we	may	experience	more	variability	in	our	insurance	reserves	and	expense.

In	the	normal	course	of	business,	we	also	purchase	surety	bonds,	insurance	policies,	letters	of	credit	or	marketable	securities	deposits	in	connection	with	municipal residential	collection	contracts,	financial	assurance	for	closure	and	post-closure	of	landfills,	environmental	remediation,	environmental	permits,	and	business	licenses	and permits	as	a	financial	guarantee	of	our	performance.

# Availability	of	Reports	and	Other	Information

Our	corporate	website	is	www.republicservices.com.	We	make	available	on	that	website,	free	of	charge,	access	to	our	Annual	Reports	on	Form	10-K,	Quarterly	Reports on	Form	10-Q,	Current	Reports	on	Form	8-K,	Proxy	Statements	on	Schedule	14A,	and	amendments	to	those	materials	filed	or	furnished	with	the	Securities	and Exchange	Commission	(SEC)	pursuant	to	Section	13(a)	or	15(d)	of	the	Securities	Exchange	Act	of	1934.	We	make	such	materials	available	as	soon	as	reasonably practicable	after	we	electronically	submit	them	to	the	SEC.	Our	corporate	website	also	contains	our	Certificate	of	Incorporation,	Bylaws,	Corporate	Governance Guidelines,	Code	of	Ethics,	Political	Contributions	Policy,	and	Charters	of	the	Audit	Committee,	Management	Development	and	Compensation	Committee,	Nominating and	Corporate	Governance	Committee,	and	Sustainability	and	Corporate	Responsibility	Committee	of	the	board	of	directors.	In	addition,	the	SEC	makes	available	at	its website	(www.sec.gov),	free	of	charge,	reports,	proxy	statements,	and	other	information	regarding	issuers,	such	as	us,	that	file	electronically	with	the	SEC.	Information on	our	website	or	the	SEC	website	is	not	part	of	this	Form	10-K.	We	intend	to	satisfy	the	disclosure	requirements	under	Item	5.05	of	Form	8-K	and	applicable	New	York Stock	Exchange	(NYSE)	rules	regarding	amendments	to	or	waivers	of	our	Code	of	Ethics	by	posting	this	information	on	our	website	at	www.republicservices.com.

# ITEM	1A. RISK	FACTORS

This	Form	10-K	contains	certain	forward-looking	information	about	us	that	is	intended	to	be	covered	by	the	safe	harbor	for	"forward-looking	statements"	provided	by the	Private	Securities	Litigation	Reform	Act	of	1995.	Forward-looking	statements	are	statements	that	are	not	historical	facts.	Words	such	as	"guidance,"	"expect," "will,"	"may,"	"anticipate,"	"plan,"	"estimate,"	"project,"	"intend,"	"should,"	"can,"	"likely,"	"could,"	"outlook,"	"believe"	and	similar	expressions	are	intended	to identify	forward-looking	statements.	These	statements	include	statements	about	our	plans,	strategies	and	prospects.	Forward-looking	statements	are	not	guarantees	of performance.	These	statements	are	based	upon	our	management's	current	beliefs	and	expectations	and	are	subject	to	risk	and	uncertainties,	including	the	risks	set	forth below	in	these	Risk	Factors,	which	could	cause	actual	results	to	differ	materially	from	those	expressed	in,	or	implied	or	projected	by,	the	forward-looking	information and	statements.	Although	we	believe	that	the	expectations	reflected	in	the	forward-looking	statements	are	reasonable,	we	cannot	assure	you	that	the	expectations	will prove	to	be	correct.	Accordingly,	you	should	not	place	undue	reliance	on	the	forward-looking	statements,	which	speak	only	as	of	the	date	of	this	Form	10-K.	Except	to the	extent	required	by	applicable	law	or	regulation,	we	undertake	no	obligation	to	update	or	publish	revised	forward-looking	statements	to	reflect	events	or circumstances	after	the	date	of	this	Form	10-K	or	to	reflect	the	occurrence	of	unanticipated	events.

# General	economic	conditions	can	directly	and	adversely	affect	our	operating	results.

Our	business	is	directly	affected	by	changes	in	national	and	general	economic	factors	and	overall	economic	activity	that	are	outside	of	our	control,	including	consumer confidence	and	interest	rates.	A	weak	economy	generally	results	in	decreases	in	volumes	of	waste	generated,	which	adversely	affects	our	revenues.	In	addition,	we	have a	relatively	high	fixed-cost	structure,	which	is	difficult	to	adjust	quickly	to	match	declining	waste	volume	levels.	Consumer	uncertainty	and	the	loss	of	consumer confidence	may	decrease	overall	economic	activity	and	thereby	limit	the	amount	of	services	we	provide.	Additionally,	the	decline	in	waste	volumes	may	result	in increased	competitive	pricing	pressure	and	increased	customer	turnover,	resulting	in	lower	revenue	and	increased	operating	costs.	We	cannot	assure	you	that	worsening economic	conditions	would	not	have	a	significant	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.	Further,	recovery	in	the solid	waste	industry	historically	has	lagged	behind	recovery	in	the	general	economy.	Accordingly,	we	cannot	assure	you	that	an	improvement	in	general	economic conditions	will	result	in	an	immediate,	or	any,	improvement	in	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.

# Weakness	in	the	U.S.	economy	may	expose	us	to	credit	risk	for	amounts	due	from	governmental	agencies,	large	national	accounts,	industrial	customers	and	others.

Weakness	in	the	U.S.	economy	reduces	the	amount	of	taxes	collected	by	various	governmental	agencies.	We	provide	services	to	a	number	of	these	agencies,	including numerous	municipalities.	These	governmental	agencies	may	suffer	financial	difficulties	resulting	from	a	decrease	in	tax	revenue	and	may	ultimately	be	unable	or unwilling	to	pay	amounts	owed	to	us.	In	addition,	weakness	in	the	economy	may	cause	other	customers,	including	our	large	national	accounts,	or	industrial	or	energy services	clients,	to	suffer	financial	difficulties	and	ultimately	to	be	unable	or	unwilling	to	pay	amounts	owed	to	us.	This	could	negatively	impact	our	consolidated financial	condition,	results	of	operations	and	cash	flows.

# The	waste	industry	is	highly	competitive	and	includes	competitors	that	may	have	greater	financial	and	operational	resources,	flexibility	to	reduce	prices	or	other competitive	advantages	that	could	make	it	difficult	for	us	to	compete	effectively.

We	principally	compete	with	large	national	waste	management	companies,	numerous	municipalities,	and	numerous	regional	and	local	companies.	Competition	for collection	accounts	is	primarily	based	on	price	and	the	quality	of	services.	Competition	for	disposal	business	is	primarily	based	on	price,	geographic	location	and	quality of	operations.	One	of	our	competitors	may	have	greater	financial	and	operational	resources	than	we	do.	Further,	many	counties	and	municipalities	that	operate	their	own waste	collection	and	disposal	facilities	have	the	benefits	of	tax	revenue	or	tax-exempt	financing.	Our	ability	to	obtain	solid	waste	volume	for	our	landfills	also	may	be limited	by	the	fact	that	some	major	collection	operations	also	own	or	operate	landfills	to	which	they	send	their	waste.	In	certain	markets	in	which	we	do	not	own	or operate	a	landfill,	from	time	to	time	our	collection	operations	may	have	difficulty	competing	effectively.	If	we	were	to	lose	market	share	or	if	we	were	to	lower	prices	to address	competitive	issues,	it	could	negatively	impact	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# Price	increases	may	not	be	adequate	to	offset	the	impact	of	increased	costs	and	may	cause	us	to	lose	volume.

We	seek	to	secure	price	increases	necessary	to	offset	higher	costs,	to	maintain	or	improve	operating	margins,	and	to	obtain	adequate	returns	on	our	substantial investments	in	assets	such	as	our	landfills.	From	time	to	time,	our	competitors	reduce	their	prices	in	an	effort	to	expand	their	market	share.	Contractual,	general economic	or	market-specific	conditions	also	may	limit	our	ability	to	raise	prices.	For	example,	many	of	our	contracts	have	price	adjustment	provisions	that	are	tied	to	an index	such	as	the

consumer	price	index.	Particularly	in	a	weak	U.S.	economy	such	as	the	current	one,	our	costs	may	increase	in	excess	of	the	increase,	if	any,	in	the	consumer	price	index. This	may	continue	to	be	the	case	even	when	the	U.S.	economy	recovers	because	a	recovery	in	the	solid	waste	industry	historically	has	lagged	behind	a	recovery	in	the general	economy.	As	a	result,	we	may	be	unable	to	offset	increases	in	costs,	improve	our	operating	margins	and	obtain	adequate	investment	returns	through	price increases.	Price	increases	also	might	cause	us	to	lose	volume	to	lower-cost	competitors.

# Increases	in	the	cost	of	fuel	or	petrochemicals	would	increase	our	operating	expenses,	and	we	cannot	assure	you	that	we	would	be	able	to	recover	such	cost increases	from	our	customers.

We	depend	on	fuel	purchased	in	the	open	market	to	operate	our	collection	and	transfer	trucks	and	other	equipment	used	for	collection,	transfer	and	disposal.	Fuel	prices are	unpredictable	and	fluctuate	significantly	based	on	events	beyond	our	control,	including	geopolitical	developments,	actions	by	the	Organization	of	the	Petroleum Exporting	Countries	and	other	oil	and	gas	producers,	supply	and	demand	for	oil	and	gas,	war,	terrorism	and	unrest	in	oil-producing	countries,	adverse	weather	and regional	production	patterns.	Due	to	contractual	or	market	factors,	we	may	not	be	able	to	offset	such	volatility	through	fuel	recovery	fees.	Our	fuel	costs	were	$362.4 million	in	2015,	or	4.0%	of	revenue,	compared	to	$500.0	million	in	2014,	or	5.7%	of	revenue.

To	manage	our	exposure	to	volatility	in	fuel	prices,	we	have	entered	into	multiple	swap	agreements	whereby	we	receive	or	make	payments	to	counter-parties	should	the price	of	fuel	vary	from	a	specified	amount.	During	2015,	approximately	20%	of	our	fuel	volume	purchases	were	hedged	with	swap	agreements.	Additionally,	we	are	able to	collect	fuel	recovery	fees	from	some	customers.	In	general,	we	recover	approximately	80%	of	our	fuel	costs	with	fuel	recovery	fees.	At	current	consumption	levels,	a twenty-cent	per	gallon	change	in	the	price	of	diesel	fuel	changes	our	fuel	costs	by	approximately	$22	million	on	an	annual	basis.	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 changes	our	fuel	recovery	fee	by	approximately	$22	million.	Accordingly,	a	substantial	rise	or	drop	in	fuel	costs	could	result	in	a	material	impact	to	our	revenue	and	cost of	operations.

Over	the	last	several	years,	regulations	have	been	adopted	mandating	changes	in	the	composition	of	fuels	for	motor	vehicles.	The	renewable	fuel	standards	that	the	EPA sets	annually	affect	the	type	of	fuel	our	motor	vehicle	fleet	uses.	Pursuant	to	the	Energy	Independence	and	Security	Act	of	2007,	the	EPA	establishes	annual	renewable fuel	volume	requirements	for	four	different	categories	of	renewable	fuels	(renewable	fuel,	advanced	biofuel,	cellulosic	biofuel,	and	biomass-based	diesel).	These	volume requirements	set	standards	for	the	proportion	of	refiners'	or	importers'	total	fuel	volume	that	must	contain	renewable	fuels	(as	designated	by	regulation).	The	total	volume metrics	for	each	year	vary	based	upon	a	number	of	factors	(e.g.,	the	availability	of	such	fuels),	and	it	is	difficult	to	predict	the	ultimate	quantity	that	the	EPA	will eventually	mandate	for	2016	and	beyond.	These	regulations	are	one	of	many	factors	that	may	affect	the	cost	of	the	fuel	we	use.

Our	operations	also	require	the	use	of	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.	Petrochemical	prices,	and	hence	our	operating	and capital	costs,	may	be	further	affected	by	regulatory	efforts	to	reduce	greenhouse	gases	from	the	industries	that	produce	such	petrochemicals.	We	are	also	susceptible	to increases	in	indirect	fuel	recovery	fees	from	our	vendors.

# Fluctuations	in	prices	for	recycled	commodities	that	we	sell	to	customers	may	adversely	affect	our	consolidated	financial	condition,	results	of	operations	and	cash flows.

We	purchase	or	collect	and	process	recyclable	materials	such	as	paper,	cardboard,	plastics,	aluminum	and	other	metals	for	sale	to	third	parties.	Our	results	of	operations may	be	affected	by	changing	prices	or	market	requirements	for	recyclable	materials.	The	resale	and	purchase	prices	of,	and	market	demand	for,	recyclable	materials	are volatile	due	to	changes	in	economic	conditions	and	numerous	other	factors	beyond	our	control.	These	fluctuations	may	affect	our	consolidated	financial	condition, results	of	operations	and	cash	flows.	Approximately	70%	of	our	recycling	center	volume	relates	to	OCC,	ONP	and	other	mixed	paper.

Historically,	to	manage	our	exposure	to	fluctuations	in	prices	for	recycled	commodities,	we	have	entered	into	multiple	hedging	arrangements	whereby	we	receive	or make	payments	to	counter-parties	should	the	price	of	recycled	commodities	vary	from	a	specified	amount	or	range.	We	currently	have	no	hedges	outstanding.	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 $27	million	and	$18	million,	respectively,	on	an	annual	basis.	Accordingly,	a	substantial	rise	or	drop	in	recycled	commodity	prices	could	result	in	a	material	impact	to our	revenue	and	cost	of	operations.

# Adverse	weather	conditions,	including	those	brought	about	by	climate	change,	may	limit	our	operations	and	increase	the	costs	of	collection	and	disposal.

Our	collection	and	landfill	operations	could	be	adversely	impacted	by	extended	periods	of	inclement	weather,	or	by	increased	severity	of	weather	and	climate	extremes resulting	from	climate	change,	some	of	which	we	may	already	be	experiencing.	Recent	studies	suggest	that	global	warming	is	occurring	faster	than	previously	projected, with	the	EPA	projecting	a	3°	to	12°	Fahrenheit	temperature	increase	in	the	United	States	by	the	end	of	the	century.	In	addition	to	sea	level	rise,	this	temperature	increase is	expected	to	result	in	more	severe	droughts,	floods,	and	other	extreme	weather	events.	Any	of	these	factors	could	increase	the	volume	of	waste	collected	under	our existing	contracts	(without	corresponding	compensation),	interfere	with	collection	and	landfill	operations,	delay	the	development	of	landfill	capacity	or	reduce	the volume	of	waste	generated	by	our	customers.	In	addition,	adverse	weather	conditions	may	result	in	the	temporary	suspension	of	our	operations,	which	can	significantly affect	our	operating	results	in	the	affected	regions	during	those	periods.

# The	solid	waste	industry	is	a	capital-intensive	industry	and	our	capital	expenditures	may	exceed	current	expectations,	which	could	require	us	to	obtain	additional funding	for	our	operations	or	impair	our	ability	to	grow	our	business.

Our	ability	to	remain	competitive	and	to	grow	our	business	largely	depends	on	our	cash	flow	from	operations	and	access	to	capital.	If	our	capital	efficiency	programs cannot	offset	the	impact	of	inflation	and	business	growth,	it	may	be	necessary	to	increase	the	amount	we	spend.	Additionally,	if	we	make	acquisitions	or	further	expand our	operations,	the	amount	we	spend	on	capital,	capping,	closure,	post-closure,	environmental	remediation	and	other	items	will	increase.	Our	cash	needs	also	will increase	if	the	expenditures	for	capping,	closure,	post-closure	and	remediation	activities	increase	above	our	current	estimates,	which	may	occur	over	a	long	period	due	to changes	in	federal,	state	or	local	government	requirements	and	other	factors	beyond	our	control.	Increases	in	expenditures	would	negatively	impact	our	cash	flows.

# We	may	be	unable	to	obtain	or	maintain	required	permits	or	to	expand	existing	permitted	capacity	of	our	landfills,	which	could	decrease	our	revenue	and	increase our	costs.

We	cannot	assure	you	that	we	will	be	able	to	obtain	or	maintain	the	permits	we	require	to	operate	because	permits	to	operate	new	landfills	and	transfer	stations,	or	to expand	the	permitted	capacity	of	existing	landfills,	have	become	more	difficult	and	expensive	to	obtain	and	maintain.	Permits	often	take	years	to	obtain	as	a	result	of numerous	hearings	and	compliance	requirements	with	regard	to	zoning,	environmental	and	other	regulations.	These	permits	are	also	often	subject	to	resistance	from citizen	or	other	groups	and	other	political	pressures.	Local	communities	and	citizen	groups,	adjacent	landowners	or	governmental	agencies	may	oppose	the	issuance	of	a permit	or	approval	we	may	need,	allege	violations	of	the	permits	under	which	we	currently	operate	or	laws	or	regulations	to	which	we	are	subject,	or	seek	to	impose liability	on	us	for	environmental	damage.	Responding	to	these	challenges	has	at	times	increased	our	costs	and	extended	the	time	associated	with	establishing	new landfills	and	transfer	stations	and	expanding	existing	landfills.	In	addition,	failure	to	receive	regulatory	and	zoning	approval	may	prohibit	us	from	establishing	new landfills	or	transfer	stations	or	expanding	existing	landfills.	Our	failure	to	obtain	the	required	permits	to	operate	our	landfills	and	transfer	stations	could	have	a	material adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.	In	addition,	we	may	have	to	dispose	collected	waste	at	landfills	operated	by our	competitors	or	haul	the	waste	long	distances	at	a	higher	cost	to	one	of	our	other	landfills,	either	of	which	could	significantly	increase	our	waste	disposal	costs.

# If	we	do	not	appropriately	estimate	landfill	capping,	closure,	post-closure	and	remediation	costs,	our	financial	condition	and	results	of	operations	may	be	adversely affected.

A	landfill	must	be	closed	and	capped,	and	post-closure	maintenance	commenced,	once	the	landfill's	permitted	capacity	is	reached	and	additional	capacity	is	not authorized.	Further,	we	undertake	remediation	activities	at	some	of	our	solid	waste	facilities.	We	have	significant	financial	obligations	relating	to	capping,	closure,	post- closure	and	remediation	costs	at	our	existing	owned	or	operated	landfills,	and	will	have	material	financial	obligations	with	respect	to	any	future	owned	or	operated landfills.	We	establish	accruals	for	the	estimated	costs	associated	with	capping,	closure,	post-closure	and	remediation	obligations.	We	could	underestimate	such	costs, and	our	financial	obligations	for	capping,	closure,	post-closure	or	remediation	costs	could	exceed	the	amounts	accrued	or	amounts	otherwise	receivable	pursuant	to	trust funds	established	for	this	purpose.	Additionally,	if	a	landfill	must	be	closed	earlier	than	expected	or	its	remaining	airspace	is	reduced	for	any	other	reason,	the	accruals for	capping,	closure,	post-closure	and	remediation	could	be	required	to	be	accelerated.	If	our	capping,	closure,	post-closure	or	remediation	costs	exceed	the	amounts accrued,	or	if	such	accruals	are	required	to	be	accelerated,	this	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and cash	flows.

# Alternatives	to	landfill	disposal	could	reduce	our	disposal	volumes	and	cause	our	revenues	and	operating	results	to	decline.

Most	of	the	states	in	which	we	operate	landfills	require	counties	and	municipalities	to	formulate	comprehensive	plans	to	reduce	the	volume	of	solid	waste	deposited	in landfills	through	waste	planning,	composting,	recycling	or	other	programs.	Some	state

and	local	governments	mandate	waste	reduction	at	the	source	and	prohibit	the	disposal	of	certain	types	of	wastes,	such	as	yard	waste,	at	landfills.	Further,	many	of	our customers	voluntarily	are	diverting	waste	to	alternatives	to	landfill	disposal,	such	as	recycling	and	composting,	while	also	working	to	reduce	the	amount	of	waste	they generate.	Many	of	the	largest	companies	in	the	U.S.	are	setting	zero-waste	goals	in	which	they	strive	to	send	no	waste	to	landfills.	Although	such	actions	help	to	protect our	environment,	they	have	reduced,	and	will	in	the	future	reduce,	the	volume	of	waste	going	to	landfills	and	may	affect	the	prices	that	we	can	charge	for	landfill disposal.	Accordingly,	we	cannot	assure	you	that	we	will	be	able	to	operate	our	landfills	at	their	current	volumes	or	charge	current	prices	for	landfill	disposal	services due	to	possible	decreases	in	demand	for	such	services.	If	we	cannot	expand	our	service	offerings	and	grow	lines	of	business	to	service	waste	streams	that	do	not	go	to landfills	and	to	provide	services	for	customers	that	wish	to	reduce	waste	entirely,	this	could	have	a	negative	impact	on	our	consolidated	financial	condition,	results	of operations	and	cash	flows.	Further,	even	if	we	can	develop	such	service	offerings	and	lines	of	business,	disposal	alternatives	nonetheless	could	have	a	negative	impact	on our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# The	possibility	of	landfill	and	transfer	station	site	development	projects,	or	expansion	projects	not	being	completed	or	certain	other	events	could	result	in	material charges	to	income.

In	accordance	with	U.S.	GAAP,	we	capitalize	certain	expenditures	relating	to	development,	expansion	and	other	projects.	If	a	facility	or	operation	is	permanently	shut down	or	determined	to	be	impaired,	or	a	development,	expansion	or	other	project	is	not	completed	or	is	determined	to	be	impaired,	we	will	charge	against	earnings	any unamortized	capitalized	expenditures	relating	to	such	facility	or	project	that	we	are	unable	to	recover	through	sale,	transfer	or	otherwise.	We	also	carry	a	significant amount	of	goodwill	on	our	consolidated	balance	sheets,	which	we	must	assess	for	impairment	annually,	and	more	frequently	in	the	case	of	certain	triggering	events.	We may	incur	charges	against	earnings	in	accordance	with	this	policy,	or	other	events	may	cause	impairments.	Such	charges	could	have	a	material	adverse	impact	on	our results	of	operations.

# We	are	subject	to	costly	environmental	regulations	and	flow-control	regulations	that	may	affect	our	operating	margins,	restrict	our	operations	and	subject	us	to additional	liability.

Complying	with	laws	and	regulations	governing	the	collection,	treatment,	storage,	transfer	and	disposal	of	solid	and	hazardous	wastes	and	materials,	air	quality	and emissions	of	greenhouse	gases,	water	quality	and	the	remediation	of	contamination	associated	with	the	release	of	hazardous	substances	is	costly.	Laws	and	regulations often	require	us	to	enhance	or	replace	our	equipment	and	to	modify	landfill	operations	or	initiate	final	closure	of	a	landfill.	We	cannot	assure	you	that	we	will	be	able	to implement	price	increases	sufficient	to	offset	the	costs	of	complying	with	these	laws	and	regulations.	In	addition,	environmental	regulatory	changes	could	accelerate	or increase	expenditures	for	capping,	closure,	post-closure	and	environmental	and	remediation	activities	at	solid	waste	facilities	and	obligate	us	to	spend	sums	in	addition to	those	presently	accrued	for	such	purposes.

Our	collection,	transfer,	and	landfill	operations	are	and	will	continue	to	be	affected	by	state	or	local	laws	or	regulations	that	restrict	the	transportation	of	solid	waste across	state,	county	or	other	jurisdictional	lines	or	that	direct	the	flow	of	waste	to	a	specified	facility	or	facilities.	Such	laws	and	regulations	could	negatively	affect	our operations,	resulting	in	declines	in	landfill	volumes	and	increased	costs	of	alternate	disposal.

# Regulation	of	greenhouse	gas	emissions	could	impose	costs	on	our	operations,	the	magnitude	of	which	we	cannot	yet	estimate.

Efforts	to	curtail	the	emission	of	greenhouse	gases	and	to	ameliorate	the	effects	of	climate	change	continue	to	progress.	Our	landfill	operations	emit	anthropogenic methane,	identified	as	a	greenhouse	gas,	and	our	vehicle	fleet	emits,	among	other	things,	carbon	dioxide,	which	also	is	a	greenhouse	gas.	Conventional	wisdom	still suggests	that	passage	of	comprehensive,	federal	climate	change	legislation	is	highly	unlikely.	Nonetheless,	should	comprehensive	federal	climate	change	legislation	be enacted,	we	expect	it	to	impose	costs	on	our	operations,	the	materiality	of	which	we	cannot	predict.

Absent	comprehensive	federal	legislation	to	control	greenhouse	gas	emissions,	the	EPA	is	moving	ahead	administratively	under	its	existing	Clean	Air	Act	authority.	The EPA	is	compelled	to	issue	rules	by	the	U.S.	Supreme	Court's	April	2007	Massachusetts	v.	EPA	ruling	that	greenhouse	gases	are	"pollutants"	for	purposes	of	the	Clean Air	Act	and	the	EPA's	December	2009	finding	that	continued	emissions	of	greenhouse	gases	endanger	human	health	and	welfare.	With	respect	to	our	light-	and	heavy- duty	vehicle	fleet,	the	EPA	has	since	finalized	regulations	limiting	greenhouse	gas	emissions	and	increasing	fuel	economy	standards.	The	EPA	and	the	NHTSA	have finalized	such	regulations	applicable	to	heavy-duty	vehicles	through	model-year	2018	and	to	light-duty	vehicles	through	model-year	2025.	On	June	19,	2015,	EPA	and NHTSA	proposed	additional	regulations	that	would	impose	more	stringent	standards	for	heavy-duty	vehicles	through	model-year	2027.	We	cannot	assure	you	that federal	efforts	to	curtail	greenhouse	gas	emissions	and	to	increase	the	fuel	efficiency	of	light-duty	and	heavy-duty	vehicles	will	not	have	a	material	effect	on	our consolidated	financial	condition,	results	of	operations	or	cash	flows.

With	regard	to	greenhouse	gas	emissions	from	our	landfills,	on	August	14,	2015,	the	EPA	issued	proposed	amendments	to	its	regulations	that	would	require	large landfills	that	commenced	construction,	reconstruction	or	modification	on	or	after	July	17,	2014	to	capture	additional	landfill	gas	to	reduce	emissions	of	methane	and certain	non-methane	gases,	which	are	recognized	as	greenhouse	gases.	In	a	separate	action	commenced	that	same	day,	the	EPA	proposed	updates	to	its	1996	Emission Guidelines	to	reduce	emissions	of	landfill	gas	from	existing	active	landfills.	Both	actions	are	part	of	the	Obama	Administration's	Climate	Action	Plan	-	Strategy	to Reduce	Methane	Emissions.	These	regulations,	if	finally	adopted,	may	require	our	landfills	to	deploy	more	stringent	emission	controls	and	monitoring	systems,	with resulting	capital	or	operating	costs.	We	cannot	assure	you	that	the	application	of	these	or	other	greenhouse	gas	regulations	to	our	landfills	will	not	have	a	material	effect on	our	landfill	operations	or	on	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.

# We	may	have	environmental	liabilities	that	are	not	covered	by	our	insurance.	Changes	in	insurance	markets	also	may	impact	our	financial	results.

We	may	incur	environmental	liabilities	arising	from	our	operations	or	properties.	We	maintain	high	deductibles	for	our	environmental	liability	insurance	coverage.	If	we were	to	incur	substantial	liability	for	environmental	damage,	our	insurance	coverage	may	be	inadequate	to	cover	such	liability.	This	could	have	a	material	adverse impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

Also,	due	to	the	variable	condition	of	the	insurance	market,	we	have	experienced,	and	may	experience	in	the	future,	increased	insurance	retention	levels	and	increased premiums	or	unavailability	of	insurance.	As	we	assume	more	risk	for	insurance	through	higher	retention	levels,	we	may	experience	more	variability	in	our	insurance reserves	and	expense.

# Despite	our	efforts,	we	may	incur	additional	liability	under	environmental	laws	in	excess	of	amounts	presently	known	and	accrued.

We	are	a	potentially	responsible	party	at	many	sites	under	CERCLA,	which	provides	for	the	remediation	of	contaminated	facilities	and	imposes	strict,	joint	and	several liability	for	the	cost	of	remediation	on	current	owners	and	operators	of	a	facility	at	which	there	has	been	a	release	or	a	threatened	release	of	a	"hazardous	substance." CERCLA	liability	also	extends	to	parties	who	were	site	owners	and	operators	at	the	time	hazardous	substances	were	disposed,	and	on	persons	who	arrange	for	the disposal	of	such	substances	at	the	facility	(i.e.,	generators	of	the	waste	and	transporters	who	selected	the	disposal	site).	Hundreds	of	substances	are	defined	as "hazardous"	under	CERCLA	and	their	presence,	even	in	minute	amounts,	can	result	in	substantial	liability.

Notwithstanding	our	efforts	to	comply	with	applicable	environmental	laws,	we	may	have	additional	liability	under	environmental	laws	in	excess	of	our	current	reserves because,	among	other	things,	hazardous	substances	may	be	present	in	waste	collected	by	us	or	disposed	of	in	our	landfills	(or	in	waste	collected,	transported	or	disposed of	in	the	past	by	companies	we	have	acquired),	environmental	laws	may	change,	or	there	may	be	adverse	environmental	conditions	that	develop	or	were	otherwise previously	unknown	to	us.	For	example,	during	2012	through	2014,	we	recorded	an	aggregate	of	approximately	$400	million	in	charges	relating	to	environmental remediation	at	our	closed	landfill	in	Bridgeton,	Missouri.	Actual	costs	for	liabilities	at	Bridgeton	or	other	sites	could	be	significantly	greater	than	amounts	we	have accrued	for	these	purposes.	Environmental	liabilities	in	excess	of	our	current	reserves	could	have	a	material	adverse	impact	on	our	consolidated	financial	position, results	of	operations	and	cash	flows.

# We	have	substantial	indebtedness,	which	may	limit	our	financial	flexibility.

As	of	December	31,	2015,	we	had	approximately	$7.6	billion	in	principal	value	of	debt	and	capital	leases	outstanding.	This	amount	of	indebtedness	and	our	debt	service requirements	may	limit	our	financial	flexibility	to	access	additional	capital	and	make	capital	expenditures	and	other	investments	in	our	business,	to	withstand	economic downturns	and	interest	rate	increases,	to	plan	for	or	react	to	changes	in	our	business	and	our	industry,	and	to	comply	with	the	financial	and	other	covenants	of	our	debt instruments.	Further,	our	ability	to	comply	with	these	financial	and	other	covenants	may	be	affected	by	changes	in	economic	or	business	conditions	or	other	events	that are	beyond	our	control.	If	we	do	not	comply	with	these	covenants,	we	may	be	required	to	take	actions	such	as	reducing	or	delaying	capital	expenditures,	reducing	or eliminating	dividends	or	stock	repurchases,	selling	assets,	restructuring	or	refinancing	all	or	part	of	our	existing	debt,	or	seeking	additional	equity	capital.

# We	may	be	unable	to	maintain	our	credit	ratings	or	execute	our	financial	strategy.

Our	ability	to	execute	our	financial	strategy	depends	in	part	on	our	ability	to	maintain	investment	grade	ratings	on	our	debt.	The	credit	rating	process	is	contingent	upon	a number	of	factors,	many	of	which	are	beyond	our	control.	We	cannot	assure	you	that	we	will	be	able	to	maintain	our	investment	grade	ratings	in	the	future.	If	we	were unable	to	do	so,	our	interest	expense	would	increase	and	our	ability	to	obtain	financing	on	favorable	terms	may	be	adversely	affected.

Our	financial	strategy	also	depends	on	our	ability	to	generate	sufficient	cash	flow	to	reinvest	in	our	existing	business,	fund	internal	growth,	acquire	other	solid	waste businesses,	pay	dividends,	repurchase	stock,	and	take	other	actions	to	enhance	shareholder	value.	We	cannot	assure	you	that	we	will	succeed	in	executing	our	broad- based	pricing	initiatives,	that	we	will	generate	sufficient	cash	flow	to	execute	our	financial	strategy,	that	we	will	be	able	to	pay	cash	dividends	at	our	present	rate,	or increase	them,	or	that	we	will	be	able	to	continue	our	share	repurchase	program.

# Currently	pending	or	future	litigation	or	governmental	proceedings	could	result	in	material	adverse	consequences,	including	judgments	or	settlements.

We	are	and	will	continue	to	be	involved	in	lawsuits,	regulatory	inquiries,	and	governmental	and	other	legal	proceedings	arising	out	of	the	ordinary	course	of	our business.	Many	of	these	matters	raise	complicated	factual	and	legal	issues	and	are	subject	to	uncertainties.	The	timing	of	the	final	resolutions	to	lawsuits,	regulatory inquiries,	and	governmental	and	other	legal	proceedings	is	uncertain.	Further,	the	possible	outcomes	or	resolutions	to	these	matters	could	include	adverse	judgments	or settlements,	either	of	which	could	require	substantial	payments	and	adversely	affect	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

For	example,	we	incur	costs	to	defend	against	litigation	brought	by	government	agencies	and	private	parties	who	allege	we	are	in	violation	of	our	permits	and	applicable environmental	laws	and	regulations,	or	who	assert	claims	alleging	nuisance,	environmental	damage,	personal	injury	or	property	damage.	As	a	result,	we	may	be	required to	pay	fines	or	judgments	or	implement	corrective	measures,	or	we	may	have	our	permits	and	licenses	modified	or	revoked.	A	significant	judgment	against	us,	the	loss	of a	significant	permit	or	license,	or	the	imposition	of	a	significant	fine	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations and	cash	flows.	We	establish	accruals	for	our	estimates	of	the	costs	associated	with	our	litigation	matters	obligations.	We	could	underestimate	such	accruals.	Such shortfalls	could	result	in	significant	unanticipated	charges	to	income.

# We	may	be	unable	to	manage	our	growth	effectively.

Our	growth	strategy	places	significant	demands	on	our	financial,	operational	and	management	resources.	To	continue	our	growth,	we	may	need	to	add	administrative and	other	personnel,	and	may	need	to	make	additional	investments	in	operations	and	systems.	We	cannot	assure	you	that	we	will	be	able	to	find	and	train	qualified personnel,	or	do	so	on	a	timely	basis,	or	to	expand	our	operations	and	systems	to	the	extent,	and	in	the	time,	required.

# We	may	be	unable	to	execute	our	acquisition	growth	strategy.

Our	ability	to	execute	our	growth	strategy	depends	in	part	on	our	ability	to	identify	and	acquire	desirable	acquisition	candidates	and	on	our	ability	to	successfully integrate	acquired	operations	into	our	business.	The	integration	of	our	operations	with	those	of	acquired	companies	may	present	significant	challenges	to	our management.	In	addition,	competition	for	acquisition	candidates	may	prevent	us	from	acquiring	certain	acquisition	candidates.	Thus,	we	cannot	assure	you	that:

•desirable	acquisition	candidates	exist	or	will	be

identified;

•we	will	be	able	to	acquire	any	of	the	candidates identified;

•we	will	effectively	integrate	and	manage	companies	we

acquire;	or

•any	acquisitions	will	be	profitable	or	accretive	to	our

earnings.

If	any	of	these	factors	force	us	to	alter	our	growth	strategy,	our	growth	prospects	could	be	adversely	affected.

# Businesses	we	acquire	may	have	undisclosed	liabilities.

Our	due	diligence	investigations	of	acquisition	candidates	may	fail	to	discover	certain	undisclosed	liabilities.	If	we	acquire	a	company	having	undisclosed	liabilities	such as	environmental,	remediation	or	contractual	liabilities,	as	a	successor	owner	we	may	be	responsible	for	such	undisclosed	liabilities.	We	try	to	minimize	our	exposure	to such	liabilities	by	conducting	due	diligence,	by	obtaining	indemnification	from	each	seller	of	the	acquired	companies,	by	deferring	payment	of	a	portion	of	the	purchase price	as	security	for	the	indemnification	and	by	acquiring	only	specified	assets.	However,	we	cannot	assure	you	that	we	will	be	able	to	obtain	indemnification	or	that	any indemnification	obtained	will	be	enforceable,	collectible	or	sufficient	in	amount,	scope	or	duration	to	fully	offset	any	undisclosed	liabilities	arising	from	our acquisitions.

# Our	consolidated	financial	statements	are	based	on	estimates	and	assumptions	that	may	differ	from	actual	results.

Our	consolidated	financial	statements	have	been	prepared	in	accordance	with	U.S.	GAAP	and	necessarily	include	amounts	based	on	management's	estimates.	Actual results	may	differ	from	these	amounts.	Significant	items	requiring	management	to	make	subjective	or	complex	judgments	about	matters	that	are	inherently	uncertain include	the	recoverability	of	long-lived	assets,	the	depletion	and	amortization	of	landfill	development	costs,	accruals	for	final	capping,	closure	and	post-closure	costs,

valuation	allowances	for	accounts	receivable	and	deferred	tax	assets,	liabilities	for	potential	litigation,	claims	and	assessments,	and	liabilities	for	environmental remediation,	multiemployer	pension	plans,	employee	benefit	plans,	deferred	taxes,	uncertain	tax	positions,	insurance	and	our	estimates	of	the	fair	values	of	assets acquired	and	liabilities	assumed	in	any	acquisition.	We	cannot	assure	you	that	the	liabilities	recorded	for	items	such	as	these	will	be	adequate	to	cover	the	costs	we ultimately	will	face.

# The	introduction	of	new	accounting	rules,	laws	or	regulations	could	adversely	impact	our	reported	results	of	operations.

Complying	with	new	accounting	rules,	laws	or	regulations	could	adversely	impact	our	results	of	operations	or	cause	unanticipated	fluctuations	in	our	results	of operations	or	financial	conditions	in	future	periods.

# We	may	be	subject	to	workforce	influences,	including	work	stoppages,	which	could	increase	our	operating	costs	and	disrupt	our	operations.

As	of	December	31,	2015,	approximately	26%	of	our	workforce	was	represented	by	various	local	labor	unions.	If	our	unionized	workers	were	to	engage	in	strikes,	work stoppages	or	other	slowdowns,	we	could	experience	a	significant	disruption	of	our	operations	and	an	increase	in	our	operating	costs,	which	could	have	an	adverse	impact on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.	Additional	groups	of	employees	may	seek	union	representation	in	the	future	and,	if successful,	the	negotiation	of	collective	bargaining	agreements	could	divert	management's	attention	and	result	in	increased	operating	costs.	If	a	greater	percentage	of	our workforce	becomes	unionized,	our	consolidated	financial	condition,	results	of	operations	and	cash	flows	could	be	adversely	impacted	due	to	the	potential	for	increased operating	costs.

# Our	obligation	to	fund	multiemployer	pension	plans	to	which	we	contribute,	or	our	withdrawal	from	such	plans,	may	have	an	adverse	impact	on	us.

We	contribute	to	27	multiemployer	pension	plans	under	collective	bargaining	agreements	(CBAs)	covering	union-represented	employees.	Approximately	21%	of	our total	current	employees	participate	in	such	multiemployer	plans.	We	do	not	administer	these	plans	and	generally	are	not	represented	on	the	boards	of	trustees	of	these plans.	The	Pension	Protection	Act	enacted	in	2006	(the	PPA)	requires	under-funded	pension	plans	to	improve	their	funding	ratios.	Based	on	the	information	available	to us,	we	believe	that	some	of	the	multiemployer	plans	to	which	we	contribute	are	either	"critical"	or	"endangered"	as	those	terms	are	defined	in	the	PPA.	We	cannot presently	determine	the	amount	of	additional	funding,	if	any,	we	may	be	required	to	make	to	these	plans.	However,	plan	assessments	could	have	an	adverse	impact	on our	results	of	operations	or	cash	flows	for	a	given	period.

Further,	under	current	law,	upon	the	termination	of	a	multiemployer	pension	plan,	or	in	the	event	of	a	withdrawal	by	us	(which	we	consider	from	time	to	time)	or	a	mass withdrawal	of	contributing	employers	(each,	a	Withdrawal	Event),	we	would	be	required	to	make	payments	to	the	plan	for	our	proportionate	share	of	the	plan's	unfunded vested	liabilities.	We	cannot	assure	you	that	there	will	not	be	a	Withdrawal	Event	with	respect	to	any	of	the	multiemployer	pension	plans	to	which	we	contribute	or	that, in	the	event	of	such	a	Withdrawal	Event,	the	amounts	we	would	be	required	to	contribute	would	not	have	a	material	adverse	impact	on	our	consolidated	financial condition,	results	of	operations	and	cash	flows.

For	additional	discussion	and	detail	regarding	multiemployer	pension	plans	see,	Note	11,	Employee	Benefit	Plans,	to	our	consolidated	financial	statements	in	Item	8	of this	Form	10-K.

# The	costs	of	providing	for	pension	benefits	and	related	funding	requirements	are	subject	to	changes	in	pension	fund	values	and	fluctuating	actuarial	assumptions, and	may	have	a	material	adverse	impact	on	our	results	of	operations	and	cash	flows.

We	sponsor	a	defined	benefit	pension	plan	that	is	funded	with	trustee	assets	invested	in	a	diversified	portfolio	of	debt	and	equity	securities.	Our	costs	for	providing	such benefits	and	related	funding	requirements	are	subject	to	changes	in	the	market	value	of	plan	assets.	Our	pension	expenses	and	related	funding	requirements	are	also subject	to	various	actuarial	calculations	and	assumptions,	which	may	differ	materially	from	actual	results	due	to	changing	market	and	economic	conditions,	interest	rates and	other	factors.	A	significant	increase	in	our	pension	obligations	and	funding	requirements	could	have	a	material	adverse	impact	on	our	consolidated	financial condition,	results	of	operations	and	cash	flows.

# The	loss	of	key	personnel	could	have	a	material	adverse	effect	on	our	consolidated	financial	condition,	results	of	operations,	cash	flows	and	growth	prospects.

Our	future	success	depends	on	the	continued	contributions	of	several	key	employees	and	officers.	The	loss	of	the	services	of	key	employees	and	officers,	whether	such loss	is	through	resignation	or	other	causes,	or	the	inability	to	attract	additional	qualified	personnel,	could	have	a	material	adverse	effect	on	our	financial	condition, results	of	operations,	cash	flows	and	growth	prospects.

# A	cyber	security	incident	could	negatively	impact	our	business	and	our	relationships	with	customers.

We	use	computers	in	substantially	all	aspects	of	our	business	operations.	We	also	use	mobile	devices,	social	networking	and	other	online	activities	to	connect	with	our employees	and	our	customers.	Such	uses	give	rise	to	cyber	security	risks,	including	security	breach,	espionage,	system	disruption,	theft	and	inadvertent	release	of information.	Our	business	involves	the	storage	and	transmission	of	numerous	classes	of	sensitive	and/or	confidential	information	and	intellectual	property,	including customers'	personal	information,	private	information	about	employees,	and	financial	and	strategic	information	about	the	Company	and	its	business	partners.	We	also rely	on	a	Payment	Card	Industry	compliant	third	party	to	protect	our	customers'	credit	card	information.	While	the	Company	pursues	its	strategy	to	grow	through acquisitions	and	to	pursue	new	initiatives	that	improve	our	operations	and	cost	structure,	the	Company	is	also	expanding	and	improving	its	information	technologies, resulting	in	a	larger	technological	presence	and	corresponding	exposure	to	cyber	security	risk.	If	we	fail	to	assess	and	identify	cyber	security	risks	associated	with acquisitions	and	new	initiatives,	we	may	become	increasingly	vulnerable	to	such	risks.	Additionally,	while	we	have	implemented	measures	to	prevent	security	breaches and	cyber	incidents,	our	preventive	measures	and	incident	response	efforts	may	not	be	entirely	effective.	The	theft,	destruction,	loss,	misappropriation,	or	release	of sensitive	and/or	confidential	information	or	intellectual	property,	or	interference	with	our	information	technology	systems	or	the	technology	systems	of	third	parties	on which	we	rely,	could	result	in	business	disruption,	negative	publicity,	brand	damage,	violation	of	privacy	laws,	loss	of	customers,	potential	liability	and	competitive disadvantage.

# ITEM	1B. UNRESOLVED	STAFF	COMMENTS

None.

# ITEM	2. PROPERTIES

Our	corporate	office	is	located	at	18500	North	Allied	Way,	Phoenix,	Arizona	85054,	where	we	currently	lease	approximately	145,000	square	feet	of	office	space.

Our	principal	property	and	equipment	consists	of	land,	landfills,	buildings,	vehicles	and	equipment.	We	own	or	lease	real	property	in	the	states	in	which	we	conduct operations.	As	of	December	31,	2015,	we	owned	or	operated	340	collection	operations,	201	transfer	stations,	193	active	landfills,	67	recycling	centers,	8	treatment, recovery	and	disposal	facilities,	and	12	salt	water	disposal	wells	in	41	states	and	Puerto	Rico.	In	the	aggregate,	our	active	solid	waste	landfills	total	approximately 106,000	acres,	including	approximately	37,100	permitted	acres.	We	also	have	post-closure	responsibility	for	126	closed	landfills.	We	believe	that	our	property	and equipment	are	adequate	for	our	current	needs.

# ITEM	3. LEGAL	PROCEEDINGS

# General	Legal	Proceedings

We	are	subject	to	extensive	and	evolving	laws	and	regulations	and	have	implemented	safeguards	to	respond	to	regulatory	requirements.	In	the	normal	course	of	our business,	we	become	involved	in	legal	proceedings.	Some	may	result	in	fines,	penalties	or	judgments	against	us,	which	may	impact	earnings	and	cash	flows	for	a particular	period.	Although	we	cannot	predict	the	ultimate	outcome	of	any	legal	matter	with	certainty,	we	do	not	believe	the	outcome	of	any	of	our	pending	legal proceedings	will	have	a	material	adverse	impact	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

As	used	herein,	the	term	legal	proceedings	refers	to	litigation	and	similar	claims	against	us	and	our	subsidiaries,	excluding:	(1)	ordinary	course	accidents,	general commercial	liability	and	workers'	compensation	claims,	which	are	covered	by	insurance	programs,	subject	to	customary	deductibles,	and	which,	together	with	self- insured	employee	health	care	costs,	are	discussed	in	Note	7,	Other	Liabilities,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K;	and (2)	environmental	remediation	liabilities,	which	are	discussed	in	Note	8,	Landfill	and	Environmental	Costs,	to	our	consolidated	financial	statements	in	Item	8	of	this Form	10-K.

We	accrue	for	legal	proceedings	when	losses	become	probable	and	reasonably	estimable.	We	have	recorded	an	aggregate	accrual	of	approximately	$65	million	relating to	our	outstanding	legal	proceedings	as	of	December	31,	2015.	As	of	the	end	of	each	applicable	reporting	period,	we	review	each	of	our	legal	proceedings	and,	where	it is	probable	that	a	liability	has	been	incurred,	we	accrue	for	all	probable	and	reasonably	estimable	losses.	Where	we	are	able	to	reasonably	estimate	a	range	of	losses	we may	incur	with	respect	to	such	a	matter,	we	record	an	accrual	for	the	amount	within	the	range	that	constitutes	our	best	estimate.	If	we	are	able	to	reasonably	estimate	a range	but	no	amount	within	the	range	appears	to	be	a	better	estimate	than	any	other,	we	use	the	amount	that	is	the	low	end	of	such	range.	If	we	had	used	the	high	ends	of such	ranges,	our	aggregate	potential	liability	would	be	approximately	$62	million	higher	than	the	amount	recorded	as	of	December	31,	2015.

# Legal	Proceedings	over	Certain	Environmental	Matters	Involving	Governmental	Authorities	with	Possible	Sanctions	of	$100,000	or	More

Item	103	of	the	SEC's	Regulation	S-K	requires	disclosure	of	certain	environmental	matters	when	a	governmental	authority	is	a	party	to	the	proceedings	and	the proceedings	involve	potential	monetary	sanctions	unless	we	reasonably	believe	the	monetary	sanctions	will	not	equal	or	exceed	$100,000.	We	are	disclosing	the following	matters	in	accordance	with	that	requirement:

# Bridgeton	Landfill	Matters	-	Regulatory

On	July	23,	2012,	the	Missouri	Department	of	Natural	Resources	(MDNR)	issued	a	notice	of	violation	(NOV)	to	the	closed	Bridgeton	Landfill	in	Bridgeton,	Missouri after	it	determined	that	a	sub-surface	smoldering	event	(SSE)	was	occurring	at	the	landfill.	The	NOV	specified	required	actions	intended	to	prevent	the	spread	of	the SSE,	offsite	odors,	and	environmental	pollution.	On	March	27,	2013,	the	Missouri	Attorney	General's	Office,	on	behalf	of	MDNR,	sued	Republic	Services,	Inc.,	and	our subsidiaries	Allied	Services,	LLC,	and	Bridgeton	Landfill,	LLC	in	the	Circuit	Court	of	St.	Louis	County	in	connection	with	odors	and	leachate	from	the	landfill.	The action	alleges,	among	other	things,	violations	of	the	Missouri	Solid	Waste	Management,	Hazardous	Waste	Management,	Clean	Water,	and	Air	Conservation	Laws,	and claims	for	nuisance,	civil	penalties,	costs,	and	natural	resource	damages.	The	suit	seeks	a	preliminary	and	permanent	injunction	requiring	us	to	take	measures	to	remedy the	alleged	resulting	nuisance,	civil	penalties	of	approximately	$37	million,	and	other	relief.	On	May	13,	2013,	the	court	entered	a	stipulated	preliminary	injunction under	which,	the	Bridgeton	Landfill,	LLC	agreed,	among	other	things,	to	continue	remedial	work	plans	previously	approved	by	MDNR	and	to	continue	reporting	to MDNR.	On	June	19,	2014,	the	court	entered	an	agreed	amendment	to	the	injunction	providing	for	increased	frequency	in	some	carbon	monoxide	monitoring,	three	new rounds	of	air	sampling,	implementation	of	an	Odor	Management	Plan,	and	cost	reimbursement	to	MDNR.	On	October	1,	2015,	we	removed	the	case	to	the	United	States District	Court	for	the	Eastern	District	of	Missouri.	The	Missouri	Attorney	General's	motion	to	remand	the	case	to	the	Circuit	Court	of	St.	Louis	County	is	pending.

# Sunshine	Canyon	Landfill	Matter

The	Sunshine	Canyon	Landfill,	in	Sylmar,	California,	entered	into	settlement	agreements	with	the	South	Coast	Air	Quality	Management	District	(SCAQMD)	in	2012 and	2013.	The	settlement	agreements	resolved	claims	for	excess	emission	charges,	civil	penalties,	and	investigative	and	administrative	costs	relating	to	odor-related	and surface	emissions	NOVs	received	from	SCAQMD.	Since	the	period	covered	by	the	2013	settlement	agreement	through	February	5,	2016,	Sunshine	Canyon	has	received an	additional	84	NOVs	from	SCAQMD	for	odors	and	excess	surface	emissions.	We	have	not	received	a	demand	from	the	SCAQMD	for	the	payment	of	any	further amounts,	nor	have	we	received	from	SCAQMD	any	proposed	abatement	order	or	other	demand	in	connection	with	these	NOVs.

# Rainbow	AQMD	Matter

Rainbow	Transfer/Recycling,	Inc.	(Rainbow)	has	entered	into	a	Stipulated	Order	of	Abatement	and	a	separate	Settlement	Agreement	with	the	SCAQMD.	The	settlement agreement	resolves	Rainbow's	potential	liability	for	civil	penalties	under	several	NOVs	issued	by	the	SCAQMD	against	Rainbow	for	alleged	violations	of	SCAQMD rules	relating	to	facility	enclosure	requirements,	odors,	vehicle	track-out	and	equipment	emissions.		Rainbow	paid	$170,000	to	resolve	these	NOVs	in	January	2016.

# ITEM	4. MINE	SAFETY	DISCLOSURES

# ITEM	5. MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY SECURITIES

# Market	Information,	Holders	and	Dividends

The	principal	market	for	our	common	stock	is	the	New	York	Stock	Exchange,	and	it	is	traded	under	the	symbol	RSG.	The	following	table	sets	forth	the	range	of	the high	and	low	sale	prices	per	share	of	our	common	stock	on	the	New	York	Stock	Exchange	and	the	cash	dividends	declared	per	share	of	common	stock	for	the	periods indicated:

|  | High | Low | Dividends<br>Declared |
| :--- | :--- | :--- | :--- |
| Year\tEnded\tDecember\t31,\t2015: |  |  |  |
| First\tquarter | $42.05 | $38.95 | $0.28 |
| Second\tquarter | 41.46 | 38.99 | 0.28 |
| Third\tquarter | 43.71 | 39.17 | 0.30 |
| Fourth\tquarter | 45.35 | 40.67 | 0.30 |
| Year\tEnded\tDecember\t31,\t2014: |  |  |  |
| First\tquarter | $34.65 | $31.42 | $0.26 |
| Second\tquarter | 38.13 | 33.99 | 0.26 |
| Third\tquarter | 39.66 | 36.72 | 0.28 |
| Fourth\tquarter | 41.12 | 37.18 | 0.28 |

There	were	662	holders	of	record	of	our	common	stock	at	February	4,	2016,	which	does	not	include	beneficial	owners	for	whom	Cede	&	Co.	or	others	act	as	nominees.

In	February	2016,	our	board	of	directors	declared	a	regular	quarterly	dividend	of	$0.30	per	share	for	shareholders	of	record	on	April	1,	2016.	We	expect	to	continue	to pay	quarterly	cash	dividends,	and	we	may	consider	increasing	our	dividends	if	we	believe	it	will	enhance	shareholder	value.

We	have	the	ability	under	our	credit	facilities	to	pay	dividends	and	repurchase	our	common	stock	if	we	are	in	compliance	with	the	financial	covenants	in	our	credit facilities.	As	of	December	31,	2015,	we	were	in	compliance	with	those	financial	covenants.

# Issuer	Purchases	of	Equity	Securities

The	following	table	provides	information	relating	to	our	purchases	of	shares	of	our	common	stock	during	the	three	months	ended	December	31,	2015:

|  | Total	Number<br>of	Shares<br>Purchased	(a) | Average	Price	Paid<br>per	Share	(a) | Total	Number	of	Shares<br>Shares	Purchased	as<br>Part	of	Publicly<br>Announced	Program	(b) | Approximate	Dollar<br>Value	of		Shares	that<br>May	Yet	Be	Purchased<br>Under	the	Program	(c) |
| :--- | :--- | :--- | :--- | :--- |
| October\t2015 | 810,000 | $42.51 | 810,000 | $932,585,438 |
| November\t2015 | 854,900 | 43.80 | 854,900 | 895,138,013 |
| December\t2015 | 900,800 | 43.97 | 900,800 | 855,525,797 |
|  | 2,565,700 |  | 2,565,700 |  |

(a) In	October	2015,	our	board	of	directors	added	$900.0	million	to	the	existing	share	repurchase	authorization	that	now	extends	through	December	31,	2017. Share	repurchases	under	the	program	may	be	made	through	open	market	purchases	or	privately	negotiated	transactions	in	accordance	with	applicable	federal securities	laws.	While	the	board	of	directors	has	approved	the	program,	the	timing	of	any	purchases,	the	prices	and	the	number	of	shares	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,	2015,	0.1	million	repurchased	shares	were	pending	settlement	and	$3.7	million	were	unpaid	and included	within	other	accrued	liabilities.

(b) The	total	number	of	shares	purchased	as	part	of	the	publicly	announced	program	were	all	purchased	pursuant	to	the	October	2013	and	October	2015 authorizations.

(c) Shares	that	may	be	purchased	under	the	program	exclude	shares	of	common	stock	that	may	be	surrendered	to	satisfy	statutory	minimum	tax	withholding obligations	in	connection	with	the	vesting	of	restricted	stock	units	issued	to	employees.

# Recent	Sales	of	Unregistered	Securities

There	were	no	sales	of	unregistered	securities	during	the	three	months	ended	December	31,	2015.

# Performance	Graph

The	following	graph	compares	the	performance	of	our	common	stock	to	the	Standard	&	Poor's	500	Stock	Index	(S&P	500	Index)	and	the	Dow	Jones	Waste	&	Disposal Services	Index	(DJ	W&DS	Index).	The	graph	covers	the	period	from	December	31,	2010	to	December	31,	2015	and	assumes	that	the	value	of	the	investment	in	our common	stock	and	in	each	index	was	$100	as	of	December	31,	2010	and	that	all	dividends	were	reinvested.

|  |  |  | Indexed	Returns	for	the	Years	Ended	December	31, | Indexed	Returns	for	the	Years	Ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Republic\tServices,\tInc. | $100.00 | $94.96 | $104.47 | $121.84 | $151.99 | $172.08 |
| S&amp;P\t500\tIndex | 100.00 | 102.11 | 118.45 | 156.82 | 178.28 | 180.75 |
| DJ\tW&amp;DS\tIndex | 100.00 | 100.18 | 108.70 | 135.80 | 154.48 | 160.95 |

# ITEM	6. SELECTED	FINANCIAL	DATA

You	should	read	the	following	Selected	Financial	Data	in	conjunction	with	Item	8,	Financial	Statements	and	Supplementary	Data,	which	includes	our	consolidated financial	statements	and	notes	thereto	as	of	December	31,	2015	and	2014	and	for	each	of	the	three	years	ended	December	31,	2015,	2014	and	2013	and	Item	7,

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations,	in	this	Form	10-K.

See	Notes	1,	2,	3,	8,	9,	10	and	12	to	our	consolidated	financial	statements	in	Item	8,	Financial	Statements	and	Supplementary	Data,	of	this	Form	10-K	for	a	discussion	of basis	of	presentation,	significant	accounting	policies,	business	acquisitions	and	divestitures,	landfill	and	environmental	costs,	debt,	income	taxes	and	stockholders'	equity and	their	effect	on	comparability	of	year-to-year	data.	These	historical	results	are	not	necessarily	indicative	of	the	results	to	be	expected	in	the	future.	Amounts	are	in millions,	except	per	share	data.

|  | 2015 | 2014 | Years	Ended	December	31,<br>2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statement\tof\tOperations\tData: |  |  |  |  |  |
| Revenue | $9,115.0 | $8,803.3 | $8,417.2 | $8,118.3 | $8,192.9 |
| Expenses: |  |  |  |  |  |
| Cost\tof\toperations | 5,518.6 | 5,643.1 | 5,234.7 | 5,005.7 | 4,865.1 |
| Depreciation,\tamortization\tand\tdepletion | 970.6 | 906.9 | 877.4 | 848.5 | 843.6 |
| Accretion | 79.4 | 78.0 | 76.6 | 78.4 | 78.0 |
| Selling,\tgeneral\tand\tadministrative | 983.1 | 918.9 | 853.8 | 820.9 | 825.4 |
| Negotiation\tand\twithdrawal\tcosts\t-\tCentral\tStates\tPension\tand\tOther\tFunds | 4.5 | 1.5 | 157.7 | 35.8 | — |
| Loss\t(gain)\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | — | 20.0 | (1.9) | (2.7) | 28.1 |
| Restructuring\tcharges | — | 1.8 | 8.6 | 11.1 | — |
| Operating\tincome | 1,558.8 | 1,233.1 | 1,210.3 | 1,320.6 | 1,552.7 |
| Interest\texpense | (364.9) | (348.7) | (360.0) | (388.5) | (440.2) |
| Loss\ton\textinguishment\tof\tdebt | — | (1.4) | (2.1) | (112.6) | (210.8) |
| Interest\tincome | 0.8 | 0.6 | 0.7 | 1.0 | 0.3 |
| Other\tincome,\tnet | 1.2 | 1.7 | 2.3 | 3.4 | 4.3 |
| Income\tbefore\tincome\ttaxes | 1,195.9 | 885.3 | 851.2 | 823.9 | 906.3 |
| Provision\tfor\tincome\ttaxes | 445.5 | 337.4 | 262.1 | 251.8 | 317.4 |
| Net\tincome | 750.4 | 547.9 | 589.1 | 572.1 | 588.9 |
| Net\t(income)\tloss\tattributable\tto\tnoncontrolling\tinterests | (0.5) | (0.3) | (0.2) | (0.3) | 0.3 |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $749.9 | $547.6 | $588.9 | $571.8 | $589.2 |
| Basic\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders: |  |  |  |  |  |
| Basic\tearnings\tper\tshare | $2.14 | $1.54 | $1.63 | $1.56 | $1.57 |
| Weighted\taverage\tcommon\tshares\toutstanding | 350.0 | 356.7 | 362.1 | 366.9 | 376.0 |
| Diluted\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders: |  |  |  |  |  |
| Diluted\tearnings\tper\tshare | $2.13 | $1.53 | $1.62 | $1.55 | $1.56 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 351.4 | 358.1 | 363.4 | 368.0 | 377.6 |
| Cash\tdividends\tper\tcommon\tshare | $1.16 | $1.08 | $0.99 | $0.91 | $0.84 |
| Other\tOperating\tData: |  |  |  |  |  |
| Cash\tprovided\tby\toperating\tactivities | $1,679.7 | $1,529.8 | $1,548.2 | $1,513.8 | $1,766.7 |
| Purchases\tof\tproperty\tand\tequipment | 945.6 | 862.5 | 880.8 | 903.5 | 936.5 |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 21.2 | 35.7 | 23.9 | 28.7 | 34.6 |
| Balance\tSheet\tData: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $32.4 | $75.2 | $213.3 | $67.6 | $66.3 |
| Restricted\tcash\tand\tmarketable\tsecurities | 100.3 | 115.6 | 169.7 | 164.2 | 189.6 |
| Total\tassets | 20,577.2 | 20,094.0 | 19,949.2 | 19,616.9 | 19,551.5 |
| Total\tdebt | 7,574.2 | 7,061.2 | 7,018.1 | 7,070.5 | 6,921.8 |
| Total\tstockholders'\tequity | 7,776.6 | 7,747.8 | 7,906.1 | 7,705.7 | 7,683.4 |

# 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	elsewhere	in	Item	8	of	this 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	Item	1A,	Risk	Factors	in	this	Form	10-K.

Republic	is	the	second	largest	provider	of	services	in	the	domestic	non-hazardous	solid	waste	industry,	as	measured	by	revenue.	As	of	December	31,	2015,	we	operated in	41	states	and	Puerto	Rico	through	340	collection	operations,	201	transfer	stations,	193	active	landfills,	67	recycling	centers,	8	treatment,	recovery	and	disposal facilities,	and	12	salt	water	disposal	wells.	We	also	operated	69	landfill	gas	and	renewable	energy	projects	and	had	post-closure	responsibility	for	126	closed	landfills.

Revenue	for	the	year	ended	December	31,	2015	increased	by	3.5%	to	$9,115.0	million	compared	to	$8,803.3	million	in	2014.	This	change	in	revenue	is	due	to	increases in	average	yield	of	2.3%,	volume	of	1.1%,	and	acquisitions,	net	of	divestitures	of	2.2%,	partially	offset	by	decreases	in	fuel	recovery	fees	of	1.4%	and	recycled commodities	of	0.7%.

The	following	table	summarizes	our	revenue,	costs	and	expenses	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars	and	as	a	percentage	of revenue):

| Revenue | $9,115.0 | 100.0% | $8,803.3 | 100.0% | $8,417.2 | 100.0% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Expenses: |  |  |  |  |  |  |
| Cost\tof\toperations | 5,518.6 | 60.5 | 5,643.1 | 64.1 | 5,234.7 | 62.2 |
| Depreciation,\tamortization\tand\tdepletion\tof\nproperty\tand\tequipment | 898.7 | 9.9 | 838.5 | 9.5 | 806.7 | 9.6 |
| Amortization\tof\tother\tintangible\tassets\tand\nother\tassets | 71.9 | 0.8 | 68.4 | 0.8 | 70.7 | 0.8 |
| Accretion | 79.4 | 0.9 | 78.0 | 0.9 | 76.6 | 0.9 |
| Selling,\tgeneral\tand\tadministrative | 983.1 | 10.8 | 918.9 | 10.4 | 853.8 | 10.1 |
| Negotiation\tand\twithdrawal\tcosts\t-\tCentral\nStates\tPension\tand\tOther\tFunds | 4.5 | — | 1.5 | — | 157.7 | 1.9 |
| Loss\t(gain)\ton\tdisposition\tof\tassets\tand\nimpairments,\tnet | — | — | 20.0 | 0.3 | (1.9) | — |
| Restructuring\tcharges | — | — | 1.8 | — | 8.6 | 0.1 |
| Operating\tincome | $1,558.8 | 17.1% | $1,233.1 | 14.0% | $1,210.3 | 14.4% |

During	each	of	2015,	2014	and	2013,	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 "Cost	of	Operations,"	"Selling,	General	and	Administrative	Expenses"	and	"Income	Taxes"	discussions	contained	in	the	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.

|  | Year	Ended	December	31,	2015 | Year	Ended	December	31,	2015 |  | Year	Ended	December	31,	2014 | Year	Ended	December	31,	2014 | Year	Ended	December	31,	2014 | Year	Ended	December	31,	2013 | Year	Ended	December	31,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pre-tax\nIncome | Net\nIncome\t-\nRepublic | Diluted\nEarnings\nper\nShare | Pre-tax\nIncome | Net\nIncome\t-\nRepublic | Diluted\nEarnings\nper\nShare | Pre-tax\nIncome | Net\nIncome\t-\nRepublic | Diluted\nEarnings\nper\nShare |
| As\treported | $1,195.9 | $749.9 | $2.13 | $885.3 | $547.6 | $1.53 | $851.2 | $588.9 | $1.62 |
| Bridgeton\t(insurance\trecovery)\t/\nremediation\tcharge\tand\tother | (50.0) | (30.3) | (0.08) | 227.1 | 137.6 | 0.38 | 108.7 | 65.6 | 0.18 |
| Negotiation\tand\twithdrawal\tcosts |  |  |  |  |  |  |  |  |  |
| -\tCentral\tStates\tPension\tand |  |  |  |  |  |  |  |  |  |
| Other\tFunds(1) | 4.5 | 2.7 | 0.01 | 1.5 | 0.9 | 0.00 | 157.7 | 98.3 | 0.27 |
| Restructuring\tcharges(1) | — | — | — | 1.8 | 1.0 | 0.00 | 8.6 | 5.6 | 0.02 |
| Loss\ton\textinguishment\tof\tdebt(1) | — | — | — | 1.4 | 0.9 | 0.00 | 2.1 | 1.3 | — |
| Loss\t(gain)\ton\tdisposition\tof |  |  |  |  |  |  |  |  |  |
| assets\tand\timpairments,\tnet | — | — | — | 20.0 | 12.6 | 0.04 | (1.9) | (0.9) | — |
| Tax\tvaluation\tallowance\nadjustment | — | — | — | — | — | — | — | (43.5) | (0.12) |
| Total\tadjustments | (45.5) | (27.6) | (0.07) | 251.8 | 153.0 | 0.43 | 275.2 | 126.4 | 0.35 |
| As\tadjusted | $1,150.4 | $722.3 | $2.06 | $1,137.1 | $700.6 | $1.96 | $1,126.4 | $715.3 | $1.97 |

(1)	The	aggregate	impact	of	the	noted	items	to	adjusted	diluted	earnings	per	share	totals	to	$0.01	for	the	year	ended	December	31,	2014.

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	accounting	principles	generally	accepted	in	the	United	States	(U.S.	GAAP),	provides	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	and	have	recorded	similar	recoveries	in prior	periods,	and	similar	types	of	adjustments	can	reasonably	be	expected	to	be	recorded	in	future	periods.	In	the	case	of	the	Bridgeton	remediation	charges	and insurance	recovery,	we	are	adjusting	such	amounts	due	to	their	significant	effect	on	our	operating	results;	however,	in	the	ordinary	course	of	our	business,	we	often	incur remediation	charges	and	recoveries	that	we	do	not	adjust	from	our	operating	results.	Our	definition	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.

Bridgeton	(insurance	recovery)	/	remediation	charge	and	other.	During	2015,	we	collected	an	insurance	recovery	of	$50.0	million	related	to	our	closed	Bridgeton Landfill	in	Missouri.	As	such,	we	recorded	a	reduction	of	remediation	expenses	included	in	our	cost	of	operations.	During	2014,	we	updated	our	cost	and	timeline estimates	to	build	and	operate	a	leachate	management	facility	and	related	infrastructure,	manage	the	remediation	area	and	monitor	the	site.	Accordingly,	we	recorded environmental	remediation	charges	of	$210.6	million.	Additionally,	we	recorded	certain	remediation	charges	for	the	superfund	site	and	ongoing	litigation	costs.	During 2013,	we	recorded	environmental	remediation	charges	in	the	amount	of	$108.7	million	to	manage	the	remediation	area	and	monitor	the	site.

Negotiation	and	withdrawal	costs	-	Central	States	Pension	and	Other	Funds.	During	2015,	we	recorded	charges	to	earnings	of	$4.1	million	for	withdrawal	events	at	the multiemployer	pension	plan	to	which	we	contribute	related	to	our	operations	in	Puerto	Rico,	as	well	as	$0.4	million	of	legal	charges.	During	2014,	we	recorded	charges to	earnings	of	$1.5	million,	primarily	related	to	costs	associated	with	our	2013	withdrawal	from	the	Central	States,	Southeast	and	Southwest	Areas	Pension	Fund	(the Fund).	During	2013,	we	recorded	charges	to	earnings	of	$157.7	million	primarily	related	to	our	negotiation	and	withdrawal	liability	from	the	Fund.

Restructuring	charges.	During	the	fourth	quarter	of	2012,	we	announced	a	restructuring	of	our	field	and	corporate	operations	to	create	a	more	efficient	and	competitive company.	These	changes	included	consolidating	our	field	regions	from	four	to	three	and	our	areas	from	28	to	20,	relocating	office	space,	and	reducing	administrative staffing	levels.	During	2014,	we	incurred	costs	of	$1.8	million	due	to	a	change	in	estimate	of	amounts	recoverable	from	sublet	income	associated	with	abandoned	office space	with	non-cancellable	lease	terms.	During	2013,	we	incurred	$8.6	million	of	restructuring	charges,	which	consisted	of	severance	and	other	employee	termination benefits,	relocation	benefits,	and	the	closure	of	offices	with	lease	agreements	with	non-cancelable	terms.	For	a	detailed	discussion	of	our	2016	restructuring,	see	our "Recent	Developments"	discussion	contained	in	this	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

Loss	on	extinguishment	of	debt.	We	refinanced	our	credit	facilities	and	certain	of	our	tax-exempt	financings	in	2014,	resulting	in	non-cash	charges	for	deferred	issuance costs	of	$1.4	million.	During	2013,	we	refinanced	certain	of	our	tax-exempt	financings	that	resulted	in	a	$2.1	million	non-cash	charge	for	deferred	issuance	costs.	For	a more	detailed	discussion	of	the	components	of	these	costs	and	the	debt	series	to	which	they	relate,	see	our	"Loss	on	Extinguishment	of	Debt"	discussion	contained	in	the Results	of	Operations	section	of	this	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

Loss	(gain)	on	disposition	of	assets	and	impairments,	net.	During	2014,	we	recorded	a	charge	to	earnings	of	$20.0	million	primarily	related	to	costs	associated	with	one of	our	divested	landfills,	of	which	$14.1	million	is	related	to	closure	and	post-closure	costs	and	$5.9	million	is	related	to	remediation	expenditures.	During	2013,	we recorded	a	net	gain	on	disposition	of	assets	of	and	impairments	related	to	a	divestiture	of	$1.9	million.	For	a	more	detailed	discussion	of	the	components	of	this,	see	our "Loss	(gain)	on	Disposition	of	Assets	and	Impairments,	Net"	discussion	contained	in	the	Results	of	Operations	section	of	this	Management's	Discussion	and	Analysis	of Financial	Condition	and	Results	of	Operations.

Tax	valuation	allowance	adjustment.	During	the	fourth	quarter	of	2013,	we	reduced	our	valuation	allowance	related	to	certain	deferred	tax	assets	for	state	net	operating loss	carryforwards	due	to	our	determination	that	it	is	more	likely	than	not	that	a	portion	of	these	carryforwards	would	be	utilized	in	future	years.

# Recent	Developments

# 2016	Financial	Guidance

In	2016,	we	will	continue	to	focus	on	managing	the	controllable	aspects	of	our	business	by	enhancing	the	quality	of	our	revenue,	investing	in	profitable	growth opportunities	and	reducing	costs.	Our	team	remains	focused	on	executing	our	strategy	to	deliver	consistent	earnings	and	free	cash	flow	growth,	and	improve	return	on invested	capital.	We	are	committed	to	an	efficient	capital	structure,	maintaining	our	investment	grade	credit	ratings	and	increasing	cash	returns	to	our	shareholders.

Our	guidance	is	based	on	current	economic	conditions	and	does	not	assume	any	significant	changes	in	the	overall	economy	in	2016.	Specific	guidance	follows:

# Revenue

We	expect	2016	revenue	to	increase	by	approximately	2.5%	to	3.0%	comprised	of	the	following:

|  | Increase<br>(Decrease) |
| :--- | :--- |
| Average\tyield | 2.0% |
| Volume | \t\t\t\t\t\t0.5\tto\t1.0 |
| Energy\tservices | — |
| Fuel\trecovery\tfees | (1.0) |
| Recycled\tcommodities | — |
| Acquisitions | 1.0 |

Changes	in	price	are	restricted	on	approximately	50%	of	our	annual	service	revenue.	Of	these	restricted	pricing	arrangements:

•approximately	60%	of	the	revenue	has	price	changes	based	on	fluctuations	in	a	specific	index	(primarily	the	consumer	price	index)	as	defined	in	the contract;

•approximately	20%	of	the	revenue	has	fixed	price	increases	based	on	stated	contract

terms;	and

•approximately	20%	of	the	revenue	has	price	changes	based	on	a	cost	plus	a	specific	profit	margin	or	other measurement.

The	consumer	price	index	varies	from	a	single	historical	stated	period	of	time	or	an	average	of	trailing	historical	rates	over	a	stated	period	of	time.	In	addition,	the	initial impact	of	pricing	resets	typically	lags	6	to	12	months	from	the	end	of	the	index	measurement	period	to	the	date	the	revised	pricing	goes	into	effect.	As	a	result,	current changes	in	a	specific	index	may	not	manifest	themselves	in	our	reported	pricing	for	several	quarters	into	the	future.

# Adjusted	Diluted	Earnings	per	Share

The	following	is	a	summary	of	anticipated	adjusted	diluted	earnings	per	share	for	the	year	ending	December	31,	2016	compared	to	the	actual	adjusted	diluted	earnings per	share	for	the	year	ended	December	31,	2015.	Adjusted	diluted	earnings	per	share	is	not	a	measure	determined	in	accordance	with	U.S.	GAAP:

|  | (Anticipated)<br>Year	Ending<br>December	31,	2016 | (Actual)<br>Year	Ended<br>December	31,	2015 |
| :--- | :--- | :--- |
| Diluted\tearnings\tper\tshare | $\t2.07\t-\t2.11 | $2.13 |
| Restructuring\tcharges | 0.06 | — |
| Bridgeton\tinsurance\trecovery | — | (0.08) |
| Withdrawal\tcosts\t-\tOther\tFunds | — | 0.01 |
| Adjusted\tdiluted\tearnings\tper\tshare | $\t2.13\t-\t2.17 | $2.06 |

The	2016	anticipated	adjusted	diluted	earnings	per	share	assumes	an	effective	tax	rate	of	approximately	39.5%.

We	believe	that	the	presentation	of	adjusted	diluted	earnings	per	share,	which	excludes	restructuring	charges,	Bridgeton	insurance	recovery,	and	withdrawal	costs	- Other	Funds,	provides	an	understanding	of	operational	activities	before	the	financial	impact	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	impact	on	our	results	for	a	particular	period.	We have	incurred	comparable	charges	and	costs	and	have	recorded	similar	recoveries	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.

# Property	and	Equipment,	Net

In	2016,	we	anticipate	receiving	approximately	$900	million	of	property	and	equipment,	net	of	proceeds	from	sales	of	property	and	equipment,	as	follows:

| Trucks	and	equipment | $339 |
| :--- | :--- |
| Landfill | 327 |
| Containers | 135 |
| Facilities\tand\tother | 114 |
| Property\tand\tequipment\treceived\tduring\t2016 | 915 |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | (15) |
| Property\tand\tequipment\treceived,\tnet\tof\tproceeds,\tduring\t2016 | $900 |

# Restructuring

In	January	2016,	we	realigned	our	field	support	functions	by	combining	two	organizational	layers	into	one.	This	includes	the	elimination	of	our	three	regions,	the consolidation	of	our	20	areas	into	10	and	the	streamlining	of	select	roles	at	our	Phoenix	headquarters.	We	will	reinvest	and	deploy	resources	into	our	areas	by	creating	10 area	offices	equipped	with	enhanced	teams	of	operators	and	functional	support	roles.		We	expect	to	reduce	administrative	staffing	levels,	relocate	office	space	and	close certain	office	locations.		As	such,	we	will	incur	restructuring	charges	of	approximately	$25	million	primarily	for	severance	benefits,	transition	costs	and	lease termination	costs.		Substantially	all	of	these	charges	will	be	recorded	in	our	corporate	segment,	and	we	expect	the	majority	of	the	charges	to	be	incurred	in	the	first	half of	2016.		We	expect	the	savings	realized	from	these	restructuring	efforts	will	be	re-invested	in	our	customer-focused	programs	and	other	initiatives	we	recently launched.

Additionally,	as	part	of	these	customer	initiatives,	we	also	will	be	consolidating	our	call	center	operations.	Over	the	next	two	years,	we	will	consolidate	over	100 customer	service	locations	into	three	Customer	Resource	Centers.	The	new	state-of-the-art	facilities	and	the	technology	deployed	will	provide	our	customer	service employees	with	the	tools	and	capabilities	they	need	to	provide	better	service	to	customers	across	a	myriad	of	touch	points,	including	voice,	email,	text,	social	channels and	live	chat.		We	expect	severance	and	other	restructuring	related	charges	may	approximate	$10	million	over	the	consolidation	period.

# Results	of	Operations

We	generate	revenue	primarily	from	our	solid	waste	collection	operations.	Our	remaining	revenue	is	from	other	services,	including	transfer	station,	landfill	disposal, recycling,	and	energy	services.	Our	residential	and	small-container	commercial	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	the	consumer	price index.	We	generally	provide	small-container	commercial	and	large-container	industrial	collection	services	to	customers	under	contracts	with	terms	up	to	three	years.	Our transfer	stations,	landfills	and,	to	a	lesser	extent,	our	recycling	facilities	generate	revenue	from	disposal	or	tipping	fees	charged	to	third	parties.	In	general,	we	integrate our	recycling	operations	with	our	collection	operations	and	obtain	revenue	from	the	sale	of	recycled	commodities.	Our	revenue	from	energy	services	consists	mainly	of fees	we	charge	for	the	treatment	of	liquid	and	solid	waste	derived	from	the	production	of	oil	and	natural	gas,	as	well	as	waste	generated	by	coal-fired	power	plants. Other	non-core	revenue	consists	primarily	of	revenue	from	National	Accounts,	which	represents	the	portion	of	revenue	generated	from	nationwide	contracts	in	markets outside	our	operating	areas	where	the	associated	waste	handling	services	are	subcontracted	to	local	operators.	Consequently,	substantially	all	of	this	revenue	is	offset with	related	subcontract	costs,	which	are	recorded	in	cost	of	operations.

The	following	table	reflects	our	revenue	by	service	line	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars	and	as	a	percentage	of	revenue):

| Residential | $2,242.3 | 24.6% | $2,193.6 | 24.9% | $2,175.5 | 25.8% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Small-container\tcommercial | 2,799.9 | 30.7 | 2,723.3 | 30.9 | 2,616.9 | 31.1 |
| Large-container\tindustrial | 1,890.2 | 20.7 | 1,784.0 | 20.3 | 1,639.4 | 19.5 |
| Other | 39.8 | 0.4 | 37.2 | 0.4 | 34.7 | 0.4 |
| Total\tcollection | 6,972.2 | 76.4 | 6,738.1 | 76.5 | 6,466.5 | 76.8 |
| Transfer | 1,112.7 |  | 1,062.6 |  | 1,021.8 |  |
| Less:\tintercompany | (682.3) |  | (654.4) |  | (615.2) |  |
| Transfer,\tnet | 430.4 | 4.7 | 408.2 | 4.6 | 406.6 | 4.8 |
| Landfill | 2,036.4 |  | 1,975.8 |  | 1,923.0 |  |
| Less:\tintercompany | (951.9) |  | (928.1) |  | (902.2) |  |
| Landfill,\tnet | 1,084.5 | 11.9 | 1,047.7 | 11.9 | 1,020.8 | 12.1 |
| Energy\tservices | 95.8 | 1.1 | 38.7 | 0.5 | 4.2 | 0.1 |
| Other: |  |  |  |  |  |  |
| Sale\tof\trecycled\tcommodities | 372.0 | 4.1 | 405.8 | 4.6 | 374.6 | 4.5 |
| Other\tnon-core | 160.1 | 1.8 | 164.8 | 1.9 | 144.5 | 1.7 |
| Total\tother | 532.1 | 5.9 | 570.6 | 6.5 | 519.1 | 6.2 |
| Total\trevenue | $9,115.0 | 100.0% | $8,803.3 | 100.0% | $8,417.2 | 100.0% |

The	following	table	reflects	changes	in	components	of	our	revenue,	as	a	percentage	of	total	revenue,	for	the	years	ended	December	31,	2015,	2014	and	2013:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Average\tyield | 2.3\t% | 1.4% | 1.3% |
| Fuel\trecovery\tfees | (1.4) | 0.1 | 0.3 |
| Total\tprice | 0.9 | 1.5 | 1.6 |
| Volume | 1.1 | 2.0 | 1.3 |
| Recycled\tcommodities | (0.7) | 0.1 | 0.3 |
| Total\tinternal\tgrowth | 1.3 | 3.6 | 3.2 |
| Acquisitions\t/\tdivestitures,\tnet | 2.2 | 0.8 | 0.5 |
| Total | 3.5\t% | 4.4% | 3.7% |
| Core\tprice | 3.6\t% | 3.1% | 3.3% |

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	and	fuel	recovery	fees,	to	determine	the	effectiveness	of	our	pricing	strategies. Average	yield	as	a	percentage	of	related-business	revenue	was	2.6%,	1.5%,	and	1.4%	for	2015,	2014	and	2013,	respectively.	Core	price	as	a	percentage	of	related- business	revenue	was	4.0%,	3.4%,	and	3.6%	for	2015,	2014	and	2013,	respectively.

During	2015,	we	experienced	the	following	changes	in	our	revenue	as	compared	to	2014:

•Average	yield	increased	revenue	by	2.3%	due	to	positive	pricing	in	all	lines	of

business.

•The	fuel	recovery	fee	program,	which	mitigates	our	exposure	to	increases	in	fuel	prices,	decreased	revenue	by	1.4%.	These	fees	fluctuate	with	the	price	of	fuel and,	consequently,	any	decrease	in	fuel	prices	results	in	a	decrease	in	our	revenue.	Lower	fuel	recovery	fees	for	2015	resulted	primarily	from	the	decrease	in fuel	prices.

•Volume	increased	revenue	by	1.1%	due	to	volume	growth	in	all	lines	of	business.	The	volume	increase	in	our	landfill	line	of	business	is	primarily	attributable	to increased	municipal	solid	waste	and	construction	and	demolition	volumes,	partially	offset	by	a	decline	in	energy	services	volumes.

•Recycled	commodities	decreased	revenue	by	0.7%	primarily	due	to	lower	commodity	prices,	partially	offset	by	an	increase	in	production	volumes.	The	average price	for	old	corrugated	cardboard	for	2015	was	$103	per	ton	compared	to	$116	per	ton	for	2014.	The	average	price	of	old	newspaper	for	2015	was	$80	per	ton compared	to	$89	per	ton	for	2014.	Our	processed	recycled	commodity	volume	for	2015	of	2.5	million	tons	sold	was	approximately	11%	higher	than	the	volume in	2014,	primarily	due	to	acquisitions	of	recycling	facilities.

•Acquisitions	increased	revenue	by	2.2%	primarily	due	to	the	acquisitions	of	Rainbow	Disposal	Co.,	Inc.	in	October	2014,	Tervita,	LLC	(Tervita)	in	February 2015,	and	our	waste	management	contract	with	the	County	of	Sonoma,	California	that	was	executed	in	April	2015.

•The	fuel	recovery	fee	program	generated	0.1%	of	the	total	revenue	growth.	Higher	fuel	recovery	fees	for	2014	resulted	primarily	from	an	increase	in	the	fuel recovery	rates	charged.

•Volume	increased	revenue	by	2.0%	primarily	due	to	volume	increases	in	our	large-container	industrial	and	small-container	commercial	collection	and	landfill lines	of	business	due	to	improving	business	activity	and	new	National

Accounts	contracts,	partially	offset	by	declines	in	our	residential	collection	and	transfer	station	lines	of	business.	Volume	increases	in	our	landfill	line	of business	were	primarily	attributable	to	increased	special	waste	volumes.

•Recycled	commodities	increased	revenue	by	0.1%	primarily	due	to	the	mix	of	materials	and	increased	production	volumes,	offset	by	lower	commodity	prices. The	average	price	for	old	corrugated	cardboard	for	2014	was	$116	per	ton	compared	to	$128	per	ton	for	2013.	The	average	price	of	old	newspaper	for	2014	was $89	per	ton	compared	to	$93	per	ton	for	2013.	Our	recycled	commodity	volume	for	2014	of	2.3	million	tons	sold	was	approximately	4%	higher	than	the	volume in	2013	as	a	result	of	our	continued	investment	in	recycling	centers	along	with	increases	in	brokering	of	recycled	commodity	volumes	on	behalf	of	our	National Accounts	customers.

# 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 waste	to	disposal	facilities	and	costs	for	local	operators	who	provide	waste	handling	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	franchise	fees	and	taxes,	consisting	of	landfill	taxes, municipal	franchise	fees,	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	includes	casualty	insurance	premiums	and	claims;	cost	of	goods	sold,	which	includes	material	costs	paid to	suppliers	associated	with	recycled	commodities;	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,	2015,	2014	and	2013	(in	millions	of	dollars	and	as	a percentage	of	revenue):

| Labor	and	related	benefits | $1,848.9 | 20.3	% | $1,724.1 | 19.6% | $1,651.6 | 19.6% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Transfer\tand\tdisposal\tcosts | 724.4 | 7.9 | 685.3 | 7.8 | 637.0 | 7.6 |
| Maintenance\tand\trepairs | 853.3 | 9.3 | 786.7 | 8.9 | 736.0 | 8.7 |
| Transportation\tand\tsubcontract\tcosts | 510.7 | 5.6 | 500.0 | 5.7 | 469.1 | 5.6 |
| Fuel | 362.4 | 4.0 | 500.0 | 5.7 | 516.7 | 6.1 |
| Franchise\tfees\tand\ttaxes | 443.6 | 4.9 | 427.7 | 4.9 | 412.5 | 4.9 |
| Landfill\toperating\tcosts | 151.5 | 1.7 | 145.1 | 1.6 | 116.4 | 1.4 |
| Risk\tmanagement | 167.7 | 1.8 | 179.4 | 2.0 | 158.7 | 1.9 |
| Cost\tof\tgoods\tsold | 168.0 | 1.8 | 170.9 | 1.9 | 132.8 | 1.6 |
| Other | 338.1 | 3.7 | 306.8 | 3.5 | 295.2 | 3.5 |
| Subtotal | 5,568.6 | 61.0 | 5,426.0 | 61.6 | 5,126.0 | 60.9 |
| Bridgeton\t(insurance\trecovery)\t/\tremediation\ncharge | (50.0) | (0.5) | 217.1 | 2.5 | 108.7 | 1.3 |
| Total\tcost\tof\toperations | $5,518.6 | 60.5\t% | $5,643.1 | 64.1% | $5,234.7 | 62.2% |

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	cost	of	operations	by	cost	component	to	that	of	other	companies.

Excluding	the	impact	of	the	Bridgeton	insurance	recovery,	our	cost	of	operations	increased	for	2015	compared	to	2014,	primarily	as	a	result	of	the	following:

•Labor	and	related	benefits	increased	due	to	increased	hourly	and	salaried	wages	as	a	result	of	merit	increases,	increased	headcount,	higher	collection	volumes and	acquisitions.	Additionally,	there	was	an	increase	in	health	care	costs.

•Transfer	and	disposal	costs	increased	primarily	due	to	higher	collection	volumes.	During	both	2015	and	2014,	approximately	68%	of	the	total	waste	volume	we collected	was	disposed	at	landfill	sites	that	we	own	or	operate	(internalization).

•Maintenance	and	repairs	expense	increased	due	to	higher	collection	volumes,	cost	of	parts,	internal	labor,	third	party	truck	repairs,	vehicle	complexity	and	costs associated	with	our	fleet	maintenance	initiative.

•Our	fuel	costs	decreased	due	to	lower	prices	of	diesel	fuel,	our	continued	conversion	to	lower	cost	compressed	natural	gas	(CNG),	and	higher	alternative	fuel tax	credits	recognized	in	2015.	The	national	average	fuel	cost	per	gallon	for	2015	was	$2.71	compared	to	$3.83	for	2014,	a	decrease	of	$1.12	or	approximately 29%.

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	$22	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	changes	our	fuel	recovery	fee	by	approximately	$22	million	per	year.

•Franchise	fees	and	taxes	increased	primarily	due	to	changes	in	the	relative	mix	of	landfill

volumes.

•Risk	management	expenses	decreased	primarily	due	to	favorable	actuarial	developments	in	our	workers'	compensation	program,	partially	offset	by	unfavorable developments	in	our	vehicle	liability	insurance	program.

•Other	expenses	increased	primarily	due	to	higher	facility	operating	costs,	including	outside	facility	maintenance	repairs,	a	lower	net	gain	on	sale	of	operating assets,	and	property	taxes.

•During	2015,	we	collected	an	insurance	recovery	of	$50.0	million	related	to	our	closed	Bridgeton	Landfill	in	Missouri.	As	such,	we	recorded	a	reduction	of remediation	expenses.	During	2014,	we	updated	our	cost	and	timeline	estimates	to	build	and	operate	a	leachate	management	facility	and	related	infrastructure, manage	the	remediation	area	and	monitor	our	Bridgeton	Landfill.	Accordingly,	we	recorded	environmental	remediation	charges	of	$210.6	million.	Additionally, we	recorded	certain	remediation	charges	for	the	adjacent	superfund	site.

Our	cost	of	operations	increased	for	2014	compared	to	2013,	primarily	as	a	result	of	the	following:

•Labor	and	related	benefits	increased	due	to	increased	hourly	and	salaried	wages	as	a	result	of	merit	increases	and	higher	collection	volumes.	The	Central	and East	Regions	experienced	unfavorable	weather	conditions	during	the	first	quarter	of	2014,	which	contributed	to	increases	in	labor	expense,	resulting	from	lower labor	productivity.

•Maintenance	and	repairs	expense	increased	due	to	higher	collection	volume,	cost	of	parts,	internal	labor,	third	party	truck	repairs,	vehicle	complexity	and	costs associated	with	our	fleet	maintenance	initiative.

•Transportation	and	subcontract	costs	increased	primarily	due	to	new	National	Accounts	contracts	and	subcontracted	work	resulting	from	growth	in	landfill special	waste	volume.

•Our	fuel	costs	decreased	due	to	our	continued	conversion	to	lower	cost	CNG,	lower	prices	of	diesel	fuel,	and	higher	alternative	fuel	tax	credits	recognized	in 2014.	The	national	average	fuel	cost	per	gallon	for	2014	was	$3.83	compared	to	$3.92	for	2013,	a	decrease	of	$0.09	or	approximately	2%.

•Franchise	fees	and	taxes	increased	due	primarily	to	volume	increases	in	our	landfill	line	of

•Landfill	operating	expenses	increased	due	to	volume	increases	in	our	landfill	line	of	business.	Additionally,	during	2013,	we	recorded	favorable	remediation adjustments	of	$17.1	million,	of	which	$15.0	million	relates	to	changes	in	the	estimated	timing	of	payments	for	our	remediation	obligations,	which	did	not recur	in	2014.

•Risk	management	expenses	increased	primarily	due	to	unfavorable	actuarial	developments	in	our	vehicle	liability	program	in	2014,	compared	to	favorable actuarial	developments	in	our	workers'	compensation,	vehicle	liability	and	general	liability	insurance	programs	in	2013.	During	2014,	we	continued	to	see favorable	developments	in	our	workers'	compensation	program.

•Cost	of	goods	sold	relates	to	rebates	paid	for	volumes	delivered	to	our	recycling	facilities.	Cost	of	goods	sold	increased	primarily	due	to	an	increase	in brokering	and	production	of	recycled	commodity	volumes.

•Other	expenses	increased	primarily	due	to	higher	facility	operating	costs,	including	property	taxes	related	to	infrastructure	investments.	Other	expenses	also increased	due	to	higher	utility	costs	associated	with	the	unfavorable	weather	conditions	experienced	in	our	Central	and	East	Regions	during	the	first	quarter	of 2014,	as	well	as	$4.8	million	of	2012	alternative	fuel	tax	credits	recognized	during	the	first	quarter	of	2013,	that	did	not	recur	in	2014.

•During	2014,	we	updated	our	cost	and	timeline	estimates	to	build	and	operate	a	leachate	management	facility	and	related	infrastructure,	manage	the remediation	area	and	monitor	our	Bridgeton	Landfill.	Accordingly,	we	recorded	environmental	remediation	charges	of	$210.6	million.	Additionally,	we recorded	certain	remediation	charges	for	the	adjacent	superfund	site.	During	2013,	we	recorded	environmental	remediation	charges	in	the	amount	of	$108.7 million	to	manage	the	remediation	area	and	monitor	the	site.

# 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,	2015,	2014	and	2013	(in	millions of	dollars	and	as	a	percentage	of	revenue):

| and	equipment | $613.4 | 6.8% | $575.5 | 6.5% | $544.8 | 6.5% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Landfill\tdepletion\tand\tamortization | 285.3 | 3.1 | 263.0 | 3.0 | 261.9 | 3.1 |
| Depreciation,\tamortization\tand\tdepletion\n\t\t\texpense | $898.7 | 9.9% | $838.5 | 9.5% | $806.7 | 9.6% |

# Depreciation,	Amortization	and	Depletion	of	Property	and	Equipment	-	2015	compared	to	2014

Depreciation	and	amortization	of	property	and	equipment	increased	primarily	due	to	higher	acquisition	costs	of	replacement	vehicles,	increased	trucks	to	support	volume growth,	additional	assets	acquired	with	our	acquisitions,	and	an	increased	number	of	CNG	vehicles	in	our	fleet,	which	are	more	expensive	to	purchase	than	diesel vehicles.	In	addition,	we	made	increased	investments	in	new	and	upgraded	recycling	infrastructure	projects	that	became	operational	over	the	past	several	quarters.

Landfill	depletion	and	amortization	expense	increased	primarily	due	to	increased	landfill	disposal	volumes	and	an	overall	increase	in	our	average	depletion	rate. Additionally,	during	2015,	we	recorded	favorable	amortization	adjustments	of	$0.7	million	relative	to	asset	retirement	obligations,	compared	to	favorable	amortization adjustments	of	$13.3	million	during	2014.

Depreciation	and	amortization	of	property	and	equipment	increased	primarily	due	to	higher	acquisition	costs	of	replacement	vehicles	and	an	increased	number	of	CNG vehicles	in	our	fleet.	In	addition,	we	made	increased	investments	in	new	and	upgraded	recycling	infrastructure	projects.

Landfill	depletion	and	amortization	expense	increased	primarily	due	to	increased	landfill	disposal	volumes	and	an	overall	increase	in	our	average	depletion	rate. Offsetting	these	increases	were	favorable	amortization	adjustments	of	$13.3	million	that	were	recognized	in	2014	relative	to	asset	retirement	obligations,	compared	to favorable	adjustments	of	$0.3	million	in	2013.	Included	in	these	favorable	adjustments	are	increases	in	deemed	probable	expansion	airspace	at	certain	of	our	active	solid waste	landfills.

# Amortization	of	Other	Intangible	Assets	and	Other	Assets

Expenses	for	amortization	of	other	intangible	assets	and	other	assets	were	$71.9	million,	$68.4	million	and	$70.7	million	for	the	years	ended	December	31,	2015,	2014 and	2013,	respectively,	or	0.8%	of	revenue	for	each	of	2015,	2014	and	2013.	Our	other	intangible	assets	and	other	assets	primarily	relate	to	customer	relationships, franchise	agreements,	other	municipal	agreements,	favorable	lease	assets	and,	to	a	lesser	extent,	non-compete	agreements	and	trade	names.	The	increase	in	amortization expense	is	the	result	of	assets	acquired	in	the	acquisitions	of	various	waste	businesses	throughout	the	year,	partially	offset	by	certain	intangible	assets	now	being	fully amortized.

# Accretion	Expense

Accretion	expense	was	$79.4	million,	$78.0	million	and	$76.6	million,	or	0.9%	of	revenue,	for	each	of	the	years	ended	December	31,	2015,	2014	and	2013,	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	below.

The	following	table	summarizes	our	selling,	general	and	administrative	expenses	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars	and	as	a percentage	of	revenue):

| Salaries | $636.6 | 7.0% | $579.8 | 6.6% | $545.4 | 6.5% |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Provision\tfor\tdoubtful\taccounts | 22.7 | 0.2 | 22.6 | 0.3 | 16.1 | 0.2 |
| Other | 323.8 | 3.6 | 316.5 | 3.5 | 292.3 | 3.4 |
| Total\tselling,\tgeneral\tand\tadministrative\texpenses | $983.1 | 10.8% | $918.9 | 10.4% | $853.8 | 10.1% |

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.

# Selling,	General	and	Administrative	Expenses	–	2015	compared	to	2014

Salaries	increased	primarily	due	to	higher	wages,	benefits,	and	other	payroll	related	items	resulting	from	merit	increases	and	increased	headcount,	as	well	as	higher management	incentive	compensation.

Other	selling,	general	and	administrative	expenses	increased	primarily	due	to	costs	associated	with	strategic	growth	initiatives,	as	well	as	acquisition-related	transaction and	integration	costs	primarily	associated	with	our	acquisition	of	Tervita	in	February	2015.	This	increase	was	partially	offset	by	favorable	litigation	results	during	2015.

Salaries	increased	primarily	due	to	higher	wages	resulting	from	merit	increases,	increased	headcount	and	management	incentive	pay.

Provision	for	doubtful	accounts	increased	primarily	due	to	a	net	favorable	adjustment,	recorded	in	our	corporate	segment	in	2013,	of	$8.3	million	resulting	from	a change	in	our	estimated	future	bad	debts.

Other	selling,	general	and	administrative	expenses	increased	primarily	due	to	costs	associated	with	strategic	growth	initiatives,	as	well	as	costs	incurred	with	the acquisition	of	various	solid	waste	businesses.

# Negotiation	and	Withdrawal	Costs	-	Central	States	Pension	and	Other	Funds

During	2015,	we	recorded	charges	to	earnings	of	$4.1	million	for	withdrawal	events	at	the	multiemployer	pension	plan	to	which	we	contribute	related	to	our	operations in	Puerto	Rico,	as	well	as	$0.4	million	of	legal	charges.	During	2014,	we	recorded	charges	to	earnings	of	$1.5	million,	primarily	related	to	costs	associated	with	our	2013 withdrawal	from	the	Fund.	During	2013,	we	recorded	charges	to	earnings	of	$157.7	million,	primarily	related	to	our	negotiation	and	withdrawal	liability	from	the	Fund.

For	additional	discussion	and	detail	regarding	our	settlement	with	the	Fund,	see	our	Central	States,	Southeast	and	Southwest	Areas	Pension	Fund	discussion	in	Note	11, Employee	Benefit	Plans,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K.

# Loss	(Gain)	on	Disposition	of	Assets	and	Impairments,	Net

During	2014,	we	recorded	a	charge	to	earnings	of	$20.0	million	primarily	related	to	costs	associated	with	one	of	our	divested	landfills,	of	which	$14.1	million	is	related to	closure	and	post-closure	costs	and	$5.9	million	is	related	to	remediation	expenditures.	During	2013,	we	recorded	a	net	gain	on	disposition	of	assets	of	and impairments	of	$1.9	million,	primarily	related	to	the	contingent	sales	price	of	$1.0	million	received	in	connection	with	a	2011	business	divestiture	in	our	West	Region.

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.	In	situations	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.	Asset	or	business	divestitures	could	result	in	gains,	losses	or	asset	impairment	charges	that	may	be	material	to	our	results of	operations	in	a	given	period.

# Restructuring	Charges

During	the	fourth	quarter	of	2012,	we	announced	a	restructuring	of	our	field	and	corporate	operations	to	create	a	more	efficient	and	competitive	company.	These changes	included	consolidating	our	field	regions	from	four	to	three	and	our	areas	from	28	to	20,	relocating	office	space,	and	reducing	administrative	staffing	levels. During	2014,	we	incurred	costs	of	$1.8	million	due	to	a	change	in	estimate	of	amounts	recoverable	from	sublet	income	associated	with	abandoned	office	space	with	non- cancellable	lease	terms.	During	2013,	we	incurred	$8.6	million	of	restructuring	charges,	which	consisted	of	severance	and	other	employee	termination	benefits, relocation	benefits,	and	the	closure	of	offices	with	lease	agreements	with	non-cancelable	terms.

# 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):

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | $324.6 | $310.3 | $319.8 |
| Accretion\tof\tdebt\tdiscounts | 7.4 | 6.6 | 6.9 |
| Accretion\tof\tremediation\tliabilities\tand\tother | 39.7 | 38.2 | 40.6 |
| Less:\tcapitalized\tinterest | (6.8) | (6.4) | (7.3) |
| Total\tinterest\texpense | $364.9 | $348.7 | $360.0 |

Total	interest	expense	increased	during	2015	due	to	the	issuance	of	$500.0	million	of	3.20%	notes	in	March	2015,	as	well	as	borrowings	under	our	Credit	Facilities.

During	the	second	half	of	2013,	we	entered	into	various	interest	rate	swap	agreements	relative	to	our	4.750%	fixed	rate	senior	notes	due	in	May	2023.	These	swap agreements,	which	were	designated	as	fair	value	hedges,	have	a	total	notional	value	of	$300.0	million	and	resulted	in	a	$7.5	million	reduction	in	interest	expense	during 2015,	compared	to	a	$7.7	million	reduction	in	interest	expense	during	2014	and	a	$2.0	million	reduction	in	interest	expense	during	2013.	Additionally,	there	were	lower variable	rates	on	our	tax-exempt	financings,	which	also	contributed	to	the	reduction	in	interest	expense	during	2014.

# Loss	on	Extinguishment	of	Debt

We	refinanced	our	credit	facilities	and	certain	of	our	tax-exempt	financings	in	2014,	resulting	in	non-cash	charges	for	deferred	issuance	costs	of	$1.4	million.	During 2013,	we	refinanced	certain	of	our	tax-exempt	financings	that	resulted	in	a	$2.1	million	non-cash	charge	for	deferred	issuance	costs.

# Income	Taxes

Our	provision	for	income	taxes	was	$445.5	million,	$337.4	million	and	$262.1	million	for	2015,	2014	and	2013,	respectively.	Our	effective	income	tax	rate	was	37.3%, 38.1%	and	30.8%	for	2015,	2014	and	2013,	respectively.	Our	2015	effective	tax	rate	was	favorably	impacted	by	$17.4	million	due	to	the	resolution	of	outstanding	tax matters	in	various	states	and	Puerto	Rico.	Our	2014	effective	tax	rate	was	favorably	impacted	by	$5.1	million	due	to	the	realization	of	tax	credits	and	lower	state	rates due	to	changes	in	estimates.	Our	2013	effective	tax	rate	was	favorably	impacted	by	approximately	$42	million	for	adjustments	to	our	valuation	allowance,	primarily	due to	the	determination	that	it	was	more	likely	than	not	the	Company	would	be	able	to	realize	certain	state	loss	carryforwards.	In	addition,	our	2013	effective	tax	rate	was favorably	impacted	by	approximately	$14	million	due	to	a	settlement	for	tax	years	2009	to	2010	with	the	Internal	Revenue	Service	appeals	division	and	the	Joint Committee	of	Taxation.	Lastly,	our	2013	effective	tax	rate	was	favorably	impacted	by	the	realization	of	tax	credits	and	lower	state	rates	due	to	changes	in	estimates	of $9.6	million.

We	made	income	tax	payments	(net	of	refunds	received)	of	approximately	$321	million,	$382	million	and	$288	million	for	2015,	2014	and	2013,	respectively.

Income	taxes	paid	in	2015	reflect	the	favorable	tax	depreciation	provisions	of	the	Protecting	Americans	from	Tax	Hikes	Act	signed	into	law	in	December	2015.	This legislation	extends	bonus	depreciation	for	property	placed	in	service	through	2019.	Bonus	depreciation	for	assets	placed	in	service	in	2015	to	2017	is	50%	and	decreases to	40%	in	2018	and	30%	in	2019.

Income	taxes	paid	in	2014	reflect	the	favorable	tax	depreciation	provisions	of	the	Tax	Increase	Protection	Act	of	2014,	signed	into	law	in	December	2014.	This legislation	extended	50%	bonus	depreciation	for	property	placed	in	service	during	2014.

Income	taxes	paid	in	2013	reflect	the	favorable	tax	depreciation	provisions	of	the	American	Tax	Relief	Act	of	2012	signed	into	law	in	January	2013.	This	legislation extended	50%	bonus	depreciation	for	property	placed	in	service	during	2013.

For	additional	discussion	and	detail	regarding	our	income	taxes,	see	Note	10,	Income	Taxes,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K.

# Reportable	Segments

During	2015,	we	managed	and	evaluated	our	operations	through	three	regions:	East,	Central	and	West.	These	regions	all	provided	integrated	waste	management	services consisting	of	non-hazardous	solid	waste	collection,	transfer,	recycling,	disposal	and	energy	services.	These	three	regions	are	presented	below	as	our	2015	reportable segments.

Summarized	financial	information	concerning	our	reportable	segments	for	the	years	ended	December	31,	2015,	2014	and	2013	is	shown	in	the	following	table	(in millions	of	dollars	and	as	a	percentage	of	revenue	in	the	case	of	operating	margin):

|  | Net<br>Revenue | Depreciation,<br>Amortization,<br>Depletion	and<br>Accretion	Before<br>Adjustments	for<br>Asset	Retirement<br>Obligations | Adjustments	to<br>Amortization<br>Expense<br>for	Asset<br>Retirement<br>Obligations | Depreciation,<br>Amortization,<br>Depletion	and<br>Accretion | (Loss)	Gain	on<br>Disposition	of<br>Assets	and<br>Impairments,	Net | Operating<br>Income<br>(Loss) | Operating<br>Margin |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2015: |  |  |  |  |  |  |  |
| East | $2,527.8 | $271.4 | $0.4 | $271.8 | $— | $475.0 | 18.8% |
| Central | 2,682.7 | 332.9 | (0.9) | 332.0 | — | 527.7 | 19.7 |
| West | 3,739.9 | 404.1 | 0.3 | 404.4 | — | 832.4 | 22.3 |
| Corporate\tentities | 164.6 | 42.3 | (0.5) | 41.8 | — | (276.3) |  |
| Total | $9,115.0 | $1,050.7 | $(0.7) | $1,050.0 | $— | $1,558.8 | 17.1% |
| 2014: |  |  |  |  |  |  |  |
| East | $2,501.0 | $269.4 | $(3.2) | $266.2 | $— | $429.6 | 17.2% |
| Central | 2,629.9 | 324.7 | (6.1) | 318.6 | — | 503.6 | 19.1 |
| West | 3,494.2 | 360.7 | (5.6) | 355.1 | — | 825.7 | 23.6 |
| Corporate\tentities | 178.2 | 43.4 | 1.6 | 45.0 | (20.0) | (525.8) |  |
| Total | $8,803.3 | $998.2 | $(13.3) | $984.9 | $(20.0) | $1,233.1 | 14.0% |
| 2013: |  |  |  |  |  |  |  |
| East | $2,456.0 | $252.9 | $4.7 | $257.6 | $— | $451.0 | 18.4% |
| Central | 2,512.1 | 307.4 | (2.8) | 304.6 | — | 494.5 | 19.7 |
| West | 3,324.4 | 345.8 | (3.0) | 342.8 | 1.9 | 766.6 | 23.1 |
| Corporate\tentities | 124.7 | 48.2 | 0.8 | 49.0 | — | (501.8) |  |
| Total | $8,417.2 | $954.3 | $(0.3) | $954.0 | $1.9 | $1,210.3 | 14.4% |

Corporate	entities	include	legal,	tax,	treasury,	information	technology,	risk	management,	human	resources,	closed	landfills	and	other	administrative	functions.	National Accounts	revenue	included	in	corporate	entities	represents	the	portion	of	revenue	generated	from	nationwide	contracts	in	markets	outside	our	operating	areas	where	the associated	waste	handling	services	are	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	2015	compared	to	2014,	and	2014	compared	to	2013,	are	discussed	below.

# East	Region

Revenue	for	2015	increased	1.1%	from	2014	primarily	due	to	increases	in	average	yield	in	all	collection	lines	of	business,	and	volume	increases	in	our	large-container industrial	and	residential	collection	and	transfer	station	lines	of	business.	These	increases	were	partially	offset	by	declines	in	volume	in	our	small-container	commercial collection	line	of	business,	as	well	as	a	decline	in	volume	in	our	landfill	line	of	business	resulting	from	lower	special	waste	volumes.	Additionally,	we	recognized	lower recycled	commodity	revenue	due	to	the	decline	in	commodity	prices.

Operating	income	in	our	East	Region	increased	from	$429.6	million	for	2014,	or	a	17.2%	operating	margin,	to	$475.0	million	for	2015,	or	an	18.8%	operating	margin. The	following	cost	categories	impacted	operating	income:

•Cost	of	operations	favorably	impacted	operating	income	margin	primarily	due	to	lower	fuel	costs	resulting	from	lower	prices	of	diesel	fuel	and	lower	risk management	expenses.	These	favorable	items	were	partially	offset	by	higher	labor	and	related	benefits	and	repair	and	maintenance	costs.

•Landfill	depletion	and	amortization	unfavorably	impacted	operating	income	margin	primarily	due	to	unfavorable	adjustments	for	asset	retirement	obligations	of $0.4	million	during	2015,	compared	to	favorable	adjustments	of	$3.2	million	during	2014.	Partially	offsetting	this	unfavorable	impact	was	an	overall	decrease	in our	average	depletion	rate.

•Selling,	general	and	administrative	expenses	favorably	impacted	operating	income	margin	primarily	due	to	favorable	legal	settlements	from	matters	occurring in	the	ordinary	course	of	business,	compared	to	unfavorable	legal	settlement	charges	during	2014.	This	favorable	impact	was	partially	offset	by	higher	wages and	payroll	related	items	resulting	from	merit	increases	and	increased	headcount,	as	well	as	higher	management	incentive	compensation.

# Central	Region

Revenue	for	2015	increased	2.0%	from	2014	primarily	due	to	average	yield	increases	in	all	lines	of	business	and	volume	increases	in	our	small-container	commercial and	large-container	industrial	collection	and	landfill	lines	of	business.	Volume	increases	in	our	landfill	line	of	business	were	primarily	attributable	to	increased	municipal solid	waste	volumes,	offset	by	a	decline	in	our	special	waste	volumes.	Additionally,	there	was	a	decline	in	volume	in	our	transfer	station	line	of	business	and	lower recycled	commodity	revenue	due	to	the	decline	in	commodity	prices.

Operating	income	in	our	Central	Region	increased	from	$503.6	million,	or	a	19.1%	operating	margin,	to	$527.7	million,	or	a	19.7%	operating	margin.	The	following cost	categories	impacted	operating	income:

•Cost	of	operations	favorably	impacted	operating	income	margin	primarily	due	to	lower	fuel	costs	resulting	from	lower	prices	of	diesel	fuel,	partially	offset	by higher	labor	and	related	benefits	and	repair	and	maintenance	costs.

•Depreciation	and	amortization	of	property	and	equipment	unfavorably	impacted	operating	income	margin	due	to	higher	acquisition	costs	of	replacement vehicles.	Landfill	depletion	and	amortization	also	unfavorably	impacted	operating	income	margin	due	to	higher	favorable	amortization	adjustments	in	2014 relative	to	asset	retirement	obligations.	During	2015,	we	recognized	favorable	amortization	adjustments	of	$0.9	million,	compared	to	favorable	amortization adjustments	of	$6.1	million	during	2014.

•Selling,	general	and	administrative	expenses	unfavorably	impacted	operating	income	margin	primarily	due	to	higher	wages	and	payroll	related	items	resulting from	merit	increases	and	increased	headcount,	as	well	as	higher	management	incentive	compensation.

# West	Region

Revenue	for	2015	increased	7.0%	from	2014	primarily	due	to	acquisitions,	including	a	waste	management	contract	with	the	County	of	Sonoma,	California	that	was executed	in	April	2015.	On	an	aggregate	basis,	acquisitions	increased	revenue	by	$142.1	million.	Excluding	the	impact	of	acquisitions,	revenue	increased	due	to increases	in	average	yield	in	all	lines	of	business	and	volume	increases	in	all	collection	lines	of	business.	Additionally,	revenue	increased	due	to	volume	increases	in	our landfill	line	of	business,	except	for	our	base	energy	services	waste	volumes.	Partially	offsetting	these	revenue	increases	was	lower	recycled	commodity	revenue	due	to the	decline	in	commodity	prices.

Operating	income	in	our	West	Region	increased	from	$825.7	million	for	2014	to	$832.4	million	for	2015.	Operating	margin	decreased	from	23.6%	for	2014	to	22.3%	for 2015.	Overall,	our	operating	margins	were	unfavorably	impacted	due	to	the	impact	of	commodity	prices	on	our	recycling	business	and	higher	integration,	transition	and operating	costs	in	our	acquired	energy	services	business.	The	following	cost	categories	impacted	operating	income:

•Cost	of	operations	unfavorably	impacted	operating	income	margin	primarily	due	to	higher	labor	and	related	benefits,	transfer	and	disposal	costs,	and	repair	and maintenance	costs.	Partially	offsetting	these	unfavorable	items	were	lower	fuel	costs	resulting	from	lower	prices	of	diesel	fuel.

•Depreciation	and	amortization	of	property	and	equipment	unfavorably	impacted	operating	income	margin	primarily	due	to	higher	asset	acquisition	costs. Landfill	depletion	and	amortization	also	was	unfavorably	impacted	by	the	unfavorable	amortization	adjustment	of	$0.3	million	in	2015,	compared	to	the favorable	amortization	adjustment	of	$5.6	million	that	occurred	during	2014	due	to	an	increase	in	deemed	airspace	at	one	of	our	active	landfills.	Additionally, landfill	depletion	and	amortization	was	unfavorably	impacted	in	the	aggregate	by	increased	landfill	disposal	volumes	and	an	overall	increase	in	our	average depletion	rate.

•Selling,	general	and	administrative	expenses	unfavorably	impacted	operating	income	margin	primarily	due	to	higher	labor	and	related	benefits,	and	acquisition- related	transaction	and	integration	costs	associated	with	our	recent	acquisitions.

# Corporate	Entities

Operating	loss	in	our	Corporate	Entities	decreased	from	$525.8	million	for	2014	to	$276.3	million	for	2015	primarily	due	to	an	insurance	recovery	of	$50.0	million related	to	our	closed	Bridgeton	Landfill	during	2015,	compared	to	unfavorable	remediation	and	litigation	adjustments	in	2014	of	$227.1	million.	Partially	offsetting	this improvement	were	additional	costs	associated	with	strategic	growth	initiatives,	as	well	as	acquisition-related	transaction	costs	primarily	associated	with	our	acquisition of	Tervita	in	February	2015.	Additionally,	we	recognized	an	unfavorable	impact	from	higher	labor	and	related	benefits,	including	management	incentive	compensation.

Revenue	for	2014	increased	1.8%	from	2013	primarily	due	to	increases	in	average	yield	in	all	lines	of	business	except	for	landfill	construction	and	demolition.	Volumes increased	in	our	small-container	commercial	and	large-container	industrial	collection,	transfer	station,	and	landfill	special	waste	and	construction	and	demolition	lines	of business	but	were	partially	offset	by	the	decline	in	volume	in	our	residential	collection	line	of	business.	These	increases	were	also	partially	offset	by	lower	recycled commodity	revenue.

Operating	income	in	our	East	Region	decreased	from	$451.0	million	for	2013,	or	an	18.4%	operating	margin,	to	$429.6	million	for	2014,	or	a	17.2%	operating	margin. The	following	cost	categories	impacted	operating	income:

•Cost	of	operations	unfavorably	impacted	operating	income	margin	primarily	due	to	higher	repair	and	maintenance	costs,	increased	labor	and	benefits,	and utility	costs	resulting	largely	from	unfavorable	weather	conditions	during	the	first	quarter	of	2014.	These	unfavorable	items	were	partially	offset	by	lower	cost of	goods	sold	and	decreased	fuel	costs	due	to	lower	diesel	fuel	prices.

•Depreciation	and	amortization	of	property	and	equipment	unfavorably	impacted	operating	income	margin	due	to	higher	acquisition	costs	of	replacement vehicles.	Landfill	depletion	and	amortization	also	unfavorably	impacted	operating	income	margin	due	to	an	overall	increase	in	the	average	depletion	rate, partially	offset	by	favorable	adjustments	for	asset	retirement	obligations	of	$3.2	million,	compared	to	net	unfavorable	adjustments	of	$4.7	million	in	2013.

•Selling,	general	and	administrative	expenses	unfavorably	impacted	operating	income	primarily	due	to	$10.6	million	of	legal	settlement	charges	from	matters occurring	in	the	ordinary	course	of	business,	compared	to	$3.1	million	of	legal	settlement	charges	in	2013.

Revenue	for	2014	increased	4.7%	from	2013	primarily	due	to	average	yield	increases	in	our	small-container	commercial	and	large-container	industrial	collection	and transfer	station	lines	of	business,	as	well	as	volume	increases	in	all	collection	and	landfill	lines	of	business	except	for	construction	and	demolition.	These	increases	were partially	offset	by	lowered	recycled	commodity	revenue	and	a	decrease	in	volume	in	our	transfer	station	line	of	business.

Operating	income	increased	and	operating	margin	decreased	in	our	Central	Region	from	$494.5	million	for	2013,	or	a	19.7%	operating	margin,	to	$503.6	million	for 2014,	or	a	19.1%	operating	margin.

The	following	cost	categories	impacted	operating	income:

•Cost	of	operations	favorably	impacted	operating	income	margin	primarily	due	to	decreased	fuel	costs	resulting	from	lower	diesel	fuel	prices,	partially	offset	by higher	repair	and	maintenance	costs	and	cost	of	goods	sold.

•For	2014,	the	depreciation	and	amortization	of	property	and	equipment	margin	impact	was	flat.

•Selling,	general	and	administrative	expenses	unfavorably	impacted	operating	income	margin	primarily	due	to	$0.5	million	of	legal	settlement	charges,

compared	to	favorable	legal	settlements	recorded	during	2013	of	$16.7	million,	which	resulted	from	legal	matters	occurring	in	the	ordinary	course	of	business.

Revenue	for	2014	increased	5.1%	from	2013	due	to	increases	in	average	yield	in	all	core	lines	of	business	and	increases	in	volume	in	our	collection	and	landfill	lines	of business.	Volume	increases	in	our	landfill	line	of	business	were	primarily	attributable	to	increased	special	waste	volumes.

Operating	income	in	our	West	Region	increased	from	$766.6	million	for	2013,	or	a	23.1%	operating	margin,	to	$825.7	million	for	2014,	or	a	23.6%	operating	margin, primarily	as	a	result	of	increased	revenue	and	the	following:

•Cost	of	operations	favorably	impacted	operating	income	margin	primarily	due	to	decreased	fuel	costs	resulting	from	lower	diesel	fuel	prices,	partially	offset	by higher	cost	of	goods	sold.

•Landfill	depletion	was	favorably	impacted	by	the	amortization	adjustments	of	$5.6	million	primarily	due	to	an	increase	in	deemed	probable	airspace	expansion at	one	of	our	active	landfills	in	2014.	Partially	offsetting	this	favorable	impact	was	higher	depletion	rates	resulting	from	the	acquisition	of	the	San	Angelo Landfill	in	the	third	quarter	of	2014.

•Selling,	general	and	administrative	expenses	favorably	impacted	operating	income	margin	during	2014	due	to	$7.6	million	of	legal	settlement	charges	incurred, compared	to	$13.8	million	of	legal	settlement	charges	incurred	during	2013,	from	matters	occurring	in	the	ordinary	course	of	business.

•Gain	on	disposition	of	assets	and	impairments,	net	unfavorably	impacted	operating	income	margin	during	2014	primarily	due	to	contingent	sale	price	of	$1.0 million	received	in	2013	on	a	2011	business	divestiture.

Operating	loss	in	our	Corporate	Entities	increased	from	$501.8	million	for	2013	to	$525.8	million	for	2014.	The	increase	in	operating	loss	primarily	relates	to unfavorable	remediation	and	litigation	adjustments	in	2014	of	$227.1	million	recorded	at	our	closed	Bridgeton	Landfill,	compared	to	$108.7	million	recorded	in	2013. Additionally,	during	2013	we	recorded	a	net	favorable	adjustment	of	$8.3	million	resulting	from	a	change	in	our	estimated	future	bad	debts,	favorable	remediation adjustments	of	$17.1	million	relating	to	changes	in	the	estimated	timing	of	payments	for	our	remediation	obligations	and	a	favorable	remediation	adjustment	for	a	closed landfill	site	of	$12.1	million,	which	did	not	recur	in	2014.	Partially	offsetting	this	increase	in	operating	loss	was	a	charge	to	earnings	of	$140.7	million	in	2013	for	our partial	withdrawal	liability	from	the	Fund	and	Puerto	Rico	multiemployer	pension	plans,	which	also	did	not	recur	in	2014.

In	January	2016,	we	realigned	our	field	support	functions	by	combining	two	organizational	layers	into	one.	This	includes	the	elimination	of	our	three	regions,	the consolidation	of	our	20	areas	into	10	and	the	streamlining	of	select	roles	at	our	Phoenix	headquarters.		The	areas	will	be	grouped	and	overseen	by	two	Executive	Vice Presidents	of	Operations.		In	connection	with	our	restructuring	we	will	further	evaluate	our	2016	reporting	segments.

# 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	and	disposal,	methane	gas	and	groundwater	monitoring and	system	maintenance,	interim	cap	maintenance,	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	costs,	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.

# Available	Airspace

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.

As	of	December	31,	2015,	we	owned	or	operated	193	active	solid	waste	landfills	with	total	available	disposal	capacity	estimated	to	be	4,966.6	million	in-place	cubic yards.	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.	As	of	December	31,	2015,	total	available	disposal	capacity	is	estimated	to	be	4,676.5 million	in-place	cubic	yards	of	permitted	airspace	plus	290.1	million	in-place	cubic	yards	of	probable	expansion	airspace.	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,	to	our	consolidated	financial	statements	in	Item	8	of	this	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,	2015,	twelve	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	twelve	landfills	have	an	estimated	remaining	average	site	life	of	46	years,	including	probable	expansion	airspace.	The	average	estimated remaining	life	of	all	of	our	landfills	is	65	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,	2015:

|  | Number<br>of	Sites<br>without<br>Probable<br>Expansion<br>Airspace | Number<br>of	Sites<br>with<br>Probable<br>Expansion<br>Airspace | Total<br>Sites | Percent<br>of<br>Total |
| :--- | :--- | :--- | :--- | :--- |
| 0\tto\t5\tyears | 19 | — | 19 | 9.8% |
| 6\tto\t10\tyears | 14 | — | 14 | 7.3 |
| 11\tto\t20\tyears | 34 | 2 | 36 | 18.7 |
| 21\tto\t40\tyears | 41 | 3 | 44 | 22.7 |
| 41+\tyears | 73 | 7 | 80 | 41.5 |
| Total | 181 | 12 | 193 | 100.0% |

# Final	Capping,	Closure	and	Post-Closure	Costs

As	of	December	31,	2015,	accrued	final	capping,	closure	and	post-closure	costs	were	$1,181.6	million,	of	which	$87.4	million	were	current	and	$1,094.2	million	were long-term	as	reflected	in	our	consolidated	balance	sheets	in	accrued	landfill	and	environmental	costs	included	in	Item	8	of	this	Form	10-K.

# Remediation	and	Other	Charges	for	Landfill	Matters

It	is	reasonably	possible	that	we	will	need	to	adjust	our	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	or	cash	flows.

The	following	is	a	discussion	of	certain	of	our	significant	remediation	matters:

Bridgeton	Landfill.		During	the	year	ended	December	31,	2015,	we	paid	$34.5	million	related	to	management	and	monitoring	of	the	remediation	area	for	our	closed Bridgeton	Landfill	in	Missouri.	We	continue	to	work	with	state	and	federal	regulatory	agencies	on	our	remediation	efforts.		From	time	to	time,	this	may	require	us	to modify	our	future	operating	timeline	and	procedures,	which	could	result	in	changes	to	our	expected	liability.	As	of	December	31,	2015,	the	remediation	liability	recorded for	this	site	is	$217.5	million,	of	which	$21.7	million	is	expected	to	be	paid	during	2016.	We	believe	the	remaining	reasonably	possible	high	end	of	our	range	would	be approximately	$164	million	higher	than	the	amount	recorded	as	of	December	31,	2015.

During	2015,	we	collected	an	insurance	recovery	of	$50.0	million	related	to	our	Bridgeton	Landfill.	As	such,	we	recorded	a	reduction	of	remediation	expenses	included in	our	cost	of	operations	during	the	year	ended	December	31,	2015.

Congress	Landfill.	In	August	2010,	Congress	Development	Company	agreed	with	the	State	of	Illinois	to	have	a	Final	Consent	Order	(Final	Order)	entered	by	the	Circuit Court	of	Illinois,	Cook	County.	Pursuant	to	the	Final	Order,	we	agreed	to	continue	to	implement	certain	remedial	activities	at	the	Congress	Landfill.	The	remediation liability	recorded	as	of	December	31,	2015	is	$78.5	million,	of	which	$3.4	million	is	expected	to	be	paid	during	2016.	We	believe	the	remaining	reasonably	possible high	end	of	our	range	would	be	approximately	$16	million	higher	than	the	amount	recorded	as	of	December	31,	2015.	Because	favorable	developments	have	occurred with	respect	to	(1)	the	volume	of	leachate	pumped	at	the	site	and	(2)	our	ability	to	dispose	of	leachate	in	the	local	publicly	owned	treatment	works,	we	no	longer	need	to expand	the	onsite	treatment	facility	and

our	expected	costs	have	decreased	from	prior	years.	Further,	the	majority	of	the	Final	Order	requirements	have	been	satisfied	and	the	site	now	is	primarily	going	through routine	operation	for	a	closed	landfill.	Accordingly,	we	will	omit	the	Congress	Landfill	from	future	reports.

# Investment	in	Landfills

The	following	tables	reflect	changes	in	our	investment	in	landfills	for	the	years	ended	December	31,	2015,	2014	and	2013	and	the	future	expected	investment	as	of December	31,	2015	(in	millions):

|  | Balance<br>as	of<br>December	31,<br>2014 | Capital<br>Additions | Retirements | Acquisitions<br>Net	of<br>Divestitures | Non-cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Additions<br>Charged<br>to<br>Expense | Impairments,<br>Transfers<br>and<br>Other<br>Adjustments | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Balance<br>as	of<br>December	31,<br>2015 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Non-depletable\nlandfill\tland | $162.2 | $1.9 | $— | $— | $— | $— | $1.5 | $— | $165.6 |
| Landfill |  |  |  |  |  |  |  |  |  |
| development |  |  |  |  |  |  |  |  |  |
| costs | 5,645.3 | 4.6 | — | 173.1 | 39.4 | — | 235.4 | (19.7) | 6,078.1 |
| Construction-in- |  |  |  |  |  |  |  |  |  |
| progress\t- |  |  |  |  |  |  |  |  |  |
| landfill | 140.8 | 287.6 | — | — | — | — | (236.8) | — | 191.6 |
| Accumulated |  |  |  |  |  |  |  |  |  |
| depletion\tand |  |  |  |  |  |  |  |  |  |
| amortization | (2,437.4) | — | — | — | — | (286.7) | 0.5 | 0.6 | (2,723.0) |
| Net\tinvestment\tin |  |  |  |  |  |  |  |  |  |
| landfill\tland |  |  |  |  |  |  |  |  |  |
| and |  |  |  |  |  |  |  |  |  |
| development |  |  |  |  |  |  |  |  |  |
| costs | $3,510.9 | $294.1 | $— | $173.1 | $39.4 | $(286.7) | $0.6 | $(19.1) | $3,712.3 |

|  | Balance<br>as	of<br>December	31,<br>2013 | Capital<br>Additions | Retirements | Acquisitions<br>Net	of<br>Divestitures | Non-cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Additions<br>Charged<br>to<br>Expense | Impairments,<br>Transfers<br>and<br>Other<br>Adjustments | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Balance<br>as	of<br>December	31,<br>2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Non-depletable\nlandfill\tland | $164.2 | $— | $(2.0) | $— | $— | $— | $— | $— | $162.2 |
| Landfill |  |  |  |  |  |  |  |  |  |
| development |  |  |  |  |  |  |  |  |  |
| costs | 5,392.7 | 4.9 | (0.3) | 26.6 | 38.6 | — | 195.0 | (12.2) | 5,645.3 |
| Construction-in- |  |  |  |  |  |  |  |  |  |
| progress\t- |  |  |  |  |  |  |  |  |  |
| landfill | 72.5 | 261.5 | — | — | — | — | (193.2) | — | 140.8 |
| Accumulated |  |  |  |  |  |  |  |  |  |
| depletion\tand |  |  |  |  |  |  |  |  |  |
| amortization | (2,160.2) | — | 0.1 | — | — | (276.5) | — | (0.8) | (2,437.4) |
| Net\tinvestment\tin |  |  |  |  |  |  |  |  |  |
| landfill\tland |  |  |  |  |  |  |  |  |  |
| and |  |  |  |  |  |  |  |  |  |
| development |  |  |  |  |  |  |  |  |  |
| costs | $3,469.2 | $266.4 | $(2.2) | $26.6 | $38.6 | $(276.5) | $1.8 | $(13.0) | $3,510.9 |

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,	2015,	2014	and	2013:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Number\tof\tlandfills\towned\tor\toperated | 193 | 189 | 190 |
| Net\tinvestment,\texcluding\tnon-depletable\tland\t(in\tmillions) | $3,546.7 | $3,348.7 | $3,305.0 |
| Total\testimated\tavailable\tdisposal\tcapacity\t(in\tmillions\tof\tcubic\tyards) | 4,966.6 | 4,845.8 | 4,873.5 |
| Net\tinvestment\tper\tcubic\tyard | $0.71 | $0.69 | $0.68 |
| Landfill\tdepletion\tand\tamortization\texpense\t(in\tmillions) | $285.3 | $263.0 | $261.9 |
| Accretion\texpense\t(in\tmillions) | 79.4 | 78.0 | 76.6 |
|  | 364.7 | 341.0 | 338.5 |
| Airspace\tconsumed\t(in\tmillions\tof\tcubic\tyards) | 77.0 | 74.6 | 73.3 |
| Depletion,\tamortization\tand\taccretion\texpense\tper\tcubic\tyard\tof\tairspace\tconsumed | $4.74 | $4.57 | $4.62 |

During	2015	and	2014,	our	average	compaction	rate	was	approximately	2,000	pounds	per	cubic	yard	based	on	a	three-year	historical	moving	average.

As	of	December	31,	2015,	we	expect	to	spend	an	estimated	additional	$8.2	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	$11.7	billion,	or	$2.36	per	cubic	yard,	is	used	in determining	our	depletion	and	amortization	expense	based	on	airspace	consumed	using	the	units-of-consumption	method.

# Property	and	Equipment

The	following	tables	reflect	the	activity	in	our	property	and	equipment	accounts	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars):

|  |  |  |  | Gross	Property	and	Equipment | Gross	Property	and	Equipment |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2014 | Capital\nAdditions | Retirements | Acquisitions,\nNet\tof\nDivestitures | Non-Cash\nAdditions\nfor\tAsset\nRetirement\nObligations | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2015 |
| Land | $401.3 | $0.3 | $(0.6) | $23.6 | $— | $— | $0.8 | $425.4 |
| Non-depletable\tlandfill\tland | 162.2 | 1.9 | — | — | — | — | 1.5 | 165.6 |
| Landfill\tdevelopment\tcosts | 5,645.3 | 4.6 | — | 173.1 | 39.4 | (19.7) | 235.4 | 6,078.1 |
| Vehicles\tand\tequipment | 5,834.1 | 547.4 | (301.1) | 78.5 | — | — | 52.9 | 6,211.8 |
| Buildings\tand\timprovements | 1,002.3 | 47.3 | (3.9) | 54.9 | — | — | (2.0) | 1,098.6 |
| Construction-in-progress\t- |  |  |  |  |  |  |  |  |
| \t\t\tlandfill | 140.8 | 287.6 | — | — | — | — | (236.8) | 191.6 |
| Construction-in-progress\t-\n\t\t\tother | 10.1 | 66.7 | — | 1.4 | — | — | (52.7) | 25.5 |
| Total | $13,196.1 | $955.8 | $(305.6) | $331.5 | $39.4 | $(19.7) | $(0.9) | $14,196.6 |

|  |  |  | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2014 | Additions\nCharged\nto\nExpense | Retirements | Acquisitions,\nNet\tof\nDivestitures | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2015 |
| Landfill\tdevelopment\tcosts | $(2,437.4) | $(286.7) | $— | $— | $0.6 | $0.5 | $(2,723.0) |
| Vehicles\tand\tequipment | (3,273.3) | (566.6) | 284.5 | — | — | 0.4 | (3,555.0) |
| Buildings\tand\timprovements | (320.1) | (48.8) | 3.0 | — | — | 0.1 | (365.8) |
| Total | $(6,030.8) | $(902.1) | $287.5 | $— | $0.6 | $1.0 | $(6,643.8) |

|  |  |  |  | Gross	Property	and	Equipment | Gross	Property	and	Equipment |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2013 | Capital\nAdditions | Retirements | Acquisitions,\nNet\tof\nDivestitures | Non-Cash\nAdditions\nfor\tAsset\nRetirement\nObligations | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2014 |
| Land | $377.6 | $0.7 | $(2.8) | $25.7 | $— | $— | $0.1 | $401.3 |
| Non-depletable\tlandfill\tland | 164.2 | — | (2.0) | — | — | — | — | 162.2 |
| Landfill\tdevelopment\tcosts | 5,392.7 | 4.9 | (0.3) | 26.6 | 38.6 | (12.2) | 195.0 | 5,645.3 |
| Vehicles\tand\tequipment | 5,403.7 | 530.4 | (155.3) | 39.1 | — | — | 16.2 | 5,834.1 |
| Buildings\tand\timprovements | 935.6 | 28.9 | (3.3) | 11.3 | — | — | 29.8 | 1,002.3 |
| Construction-in-progress\t- |  |  |  |  |  |  |  |  |
| \t\t\tlandfill | 72.5 | 261.5 | — | — | — | — | (193.2) | 140.8 |
| Construction-in-progress\t-\n\t\t\tother | 13.3 | 48.7 | — | — | — | — | (51.9) | 10.1 |
| Total | $12,359.6 | $875.1 | $(163.7) | $102.7 | $38.6 | $(12.2) | $(4.0) | $13,196.1 |

|  |  |  | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2013 | Additions\nCharged\nto\nExpense | Retirements | Acquisitions,\nNet\tof\nDivestitures | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2014 |
| Landfill\tdevelopment\tcosts | $(2,160.2) | $(276.5) | $0.1 | $— | $(0.8) | $— | $(2,437.4) |
| Vehicles\tand\tequipment | (2,883.8) | (535.0) | 145.4 | — | — | 0.1 | (3,273.3) |
| Buildings\tand\timprovements | (278.8) | (42.6) | 1.1 | — | — | 0.2 | (320.1) |
| Total | $(5,322.8) | $(854.1) | $146.6 | $— | $(0.8) | $0.3 | $(6,030.8) |

# Gross	Property	and	Equipment

|  |  |  |  | Gross	Property	and	Equipment | Gross	Property	and	Equipment |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2012 | Capital\nAdditions | Retirements | Acquisitions,\nNet\tof\nDivestitures | Non-Cash\nAdditions\nfor\tAsset\nRetirement\nObligations | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2013 |
| Land | $376.9 | $0.1 | $(1.1) | $— | $— | $— | $1.7 | $377.6 |
| Non-depletable\tlandfill\tland | 166.0 | 2.3 | (4.3) | — | — | — | 0.2 | 164.2 |
| Landfill\tdevelopment\tcosts | 5,018.0 | 2.6 | — | — | 36.5 | 12.0 | 323.6 | 5,392.7 |
| Vehicles\tand\tequipment | 4,946.4 | 546.9 | (144.6) | 18.0 | — | — | 37.0 | 5,403.7 |
| Buildings\tand\timprovements | 864.2 | 28.9 | (2.0) | 0.1 | — | — | 44.4 | 935.6 |
| Construction-in-progress\t- |  |  |  |  |  |  |  |  |
| \t\t\tlandfill | 134.5 | 259.5 | — | — | — | — | (321.5) | 72.5 |
| Construction-in-progress\t-\n\t\t\tother | 53.3 | 42.3 | — | — | — | — | (82.3) | 13.3 |
| Total | $11,559.3 | $882.6 | $(152.0) | $18.1 | $36.5 | $12.0 | $3.1 | $12,359.6 |

|  |  |  | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion | Accumulated	Depreciation,	Amortization	and	Depletion |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\nas\tof\nDecember\t31,\n2012 | Additions\nCharged\nto\nExpense | Retirements | Acquisitions,\nNet\tof\nDivestitures | Adjustments\nfor\nAsset\nRetirement\nObligations | Impairments,\nTransfers\nand\nOther\nAdjustments | Balance\nas\tof\nDecember\t31,\n2013 |
| Landfill\tdevelopment\tcosts | $(1,896.4) | $(262.2) | $— | $— | $0.3 | $(1.9) | $(2,160.2) |
| Vehicles\tand\tequipment | (2,512.3) | (507.7) | 135.8 | — | — | 0.4 | (2,883.8) |
| Buildings\tand\timprovements | (240.3) | (39.7) | 1.5 | — | — | (0.3) | (278.8) |
| Total | $(4,649.0) | $(809.6) | $137.3 | $— | $0.3 | $(1.8) | $(5,322.8) |

# Liquidity	and	Capital	Resources

The	major	components	of	changes	in	cash	flows	for	2015,	2014	and	2013	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,	2015,	2014	and	2013	(in	millions	of	dollars):

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $1,679.7 | $1,529.8 | $1,548.2 |
| Net\tcash\tused\tin\tinvesting\tactivities | (1,482.8) | (959.8) | (933.9) |
| Net\tcash\tused\tin\tfinancing\tactivities | (239.7) | (708.1) | (468.6) |

# Cash	Flows	Provided	by	Operating	Activities

The	most	significant	items	affecting	the	comparison	of	our	operating	cash	flows	for	2015	and	2014	are	summarized	below:

Changes	in	assets	and	liabilities,	net	of	effects	from	business	acquisitions	and	divestitures,	decreased	our	cash	flow	from	operations	by	$316.7	million	in	2015,	compared to	a	decrease	of	$295.6	million	in	2014,	primarily	as	a	result	of	the	following:

•Our	accounts	receivable,	exclusive	of	the	change	in	allowance	for	doubtful	accounts	and	customer	credits,	increased	$15.7	million	during	2015	due	to	the timing	of	billings	net	of	collections,	compared	to	a	$54.3	million	increase	in	2014.	As	of	December	31,	2015	and	2014,	our	days	sales	outstanding	were	38	days, or	26	and	25	days	net	of	deferred	revenue,	respectively.

•Our	accounts	payable	increased	$35.6	million	and	$3.3	million	during	2015	and	2014,	respectively,	due	to	the	timing	of	payments	as	of	December	31, 2015.

•Cash	paid	for	capping,	closure	and	post-closure	obligations	was	$33.8	million	higher	during	2015	compared	to	2014	primarily	due	to	required	capping	at	one	of our	landfills	that	closed	during	2015.

•Cash	paid	for	remediation	obligations	was	$19.4	million	lower	during	2015	compared	to	2014	primarily	due	to	remediation	activity	at	our	closed	Bridgeton Landfill.

•In	December	2015	we	settled	outstanding	liabilities	with	respect	to	the	withdrawal	events	and	paid	$153.5	million	to	the

Fund.

In	addition,	cash	paid	for	income	taxes	was	approximately	$321	million	and	$382	million	for	2015	and	2014,	respectively.	Income	taxes	paid	in	2015	reflect	the favorable	tax	depreciation	provisions	of	the	Protecting	Americans	from	Tax	Hikes	Act	signed	into	law	in	December	2015.	Cash	paid	for	interest	was	$327.6	million	and $320.2	million	for	2015	and	2014,	respectively.

Changes	in	assets	and	liabilities,	net	of	effects	of	business	acquisitions	and	divestitures,	decreased	our	cash	flow	from	operations	by	$295.6	million	in	2014,	compared	to a	decrease	of	$256.6	million	in	2013,	primarily	as	a	result	of	the	following:

•Our	prepaid	expenses	and	other	assets	increased	$41.3	million	during	2014	which	is	primarily	due	to	the	timing	of	withdrawals	to	fund	payroll,	compared	to	an $11.4	million	increase	in	2013.

•Cash	paid	for	restructuring	expenditures	was	$14.5	million	lower	during	2014	compared	to	2013	due	to	the	expiration	of	severance	and	other	employee termination	benefits,	relocation	benefits	and	the	closure	of	offices	with	lease	agreements	with	non-cancelable	terms	associated	with	our	restructuring	activities during	the	fourth	quarter	of	2012.

•Cash	paid	for	capping,	closure	and	post-closure	obligations	was	$31.0	million	lower	during	2014	compared	to	2013	primarily	due	to	a	$17.8	million	payment	to settle	our	post-closure	liability	for	one	of	our	divested	closed	landfill	sites	in	2013.

•Our	other	liabilities	decreased	$32.1	million	during	2014	primarily	due	to	the	timing	of	payment	for	certain	tax	related	accruals	and	other	accrued	expenses,	as compared	to	a	$2.4	million	increase	in	2013.

In	addition,	cash	paid	for	income	taxes	was	approximately	$382	million	and	$288	million	for	2014	and	2013,	respectively.	The	increase	was	primarily	due	to	higher expected	taxable	income	and	the	related	deductible	timing	differences	associated	with	certain	remediation	charges.

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	2015,	2014	and	2013	are	summarized	below:

acquisitions.

respectively.	The	decrease	of	$15.3	million	during	2015	is	due	to	a	release	of	funds	restricted	for	certain	construction	related	activities,	whereas	the	decrease	of $70.8	million	during	2014	was	due	to	a	release	of	restricted	investments	related	to	a	change	in	certain	of	our	closure	and	post-closure	obligation	requirements and	a	release	of	restricted	investments	related	to	our	insurance	programs.	The	increase	of	$5.5	million	during	2013	was	primarily	due	to	investments	in restricted	cash	related	to	our	insurance	program.	We	received	$50.0	million	and

$25.0	million	in	connection	with	issuances	of	tax-exempt	bonds	during	2014	and	2013,	respectively.	Funds	received	from	issuances	of	tax-exempt	bonds	are deposited	directly	into	trust	accounts	by	the	bonding	authority	at	the	time	of	issuance.	Reimbursements	from	the	trust	for	qualifying	expenditures	or	for repayments	of	the	related	tax-exempt	bonds	are	presented	as	investing	activities	in	our	consolidated	statements	of	cash	flows.	Such	reimbursements	amounted to	$18.7	million,	$51.1	million	and	$27.8	million	during	2015,	2014	and	2013,	respectively.

We	intend	to	finance	capital	expenditures	and	acquisitions	through	cash	on	hand,	restricted	cash	held	for	capital	expenditures,	cash	flows	from	operations,	our	revolving credit	facilities,	and	tax-exempt	bonds	and	other	financings.	We	expect	to	primarily	use	cash	for	consideration	paid	for	future	business	acquisitions.

# Cash	Flows	Used	in	Financing	Activities

The	most	significant	items	affecting	the	comparison	of	our	cash	flows	used	in	financing	activities	for	2015,	2014	and	2013	are	summarized	below:

•During	2015,	we	issued	$500.0	million	of	notes	for	net	cash	proceeds	of	$497.9	million.	Net	proceeds	of	notes	payable	and	long-term	debt	were	$2.7	million during	2015,	compared	to	net	payments	of	$15.1	million	and	$58.9	million	during	2014	and	2013,	respectively.	For	a	more	detailed	discussion,	see	the "Financial	Condition"	section	of	this	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

•In	October	2015,	our	board	of	directors	added	$900.0	million	to	the	existing	share	repurchase	authorization.	As	of	December	31,	2015,	there	were	$855.5 million	remaining	under	our	share	repurchase	authorization.	During	2015,	we	repurchased	9.8	million	shares	of	our	stock	for	$404.7	million.	During	2014,	we repurchased	11.1	million	shares	of	our	stock	for	$400.4	million.

# Financial	Condition

# Cash	and	Cash	Equivalents

As	of	December	31,	2015,	we	had	$32.4	million	of	cash	and	cash	equivalents	and	$100.3	million	of	restricted	cash	deposits	and	restricted	marketable	securities, including	$2.1	million	of	restricted	cash	and	marketable	securities	held	for	capital	expenditures	under	certain	debt	facilities,	$16.8	million	pursuant	to	a	holdback arrangement,	$27.3	million	of	restricted	cash	and	marketable	securities	pledged	to	regulatory	agencies	and	governmental	entities	as	financial	guarantees	of	our performance	related	to	our	final	capping,	closure	and	post-closure	obligations	at	our	landfills,	and	$54.1	million	of	restricted	cash	and	marketable	securities	related	to our	insurance	obligations.

We	intend	to	use	excess	cash	on	hand	and	cash	from	operating	activities	to	fund	capital	expenditures,	acquisitions,	dividend	payments,	share	repurchases	and	debt repayments.	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	from	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.

# Credit	Facilities

In	June	2014,	we	entered	into	a	$1.25	billion	unsecured	revolving	credit	facility	(the	Replacement	Credit	Facility),	which	replaced	our	$1.0	billion	credit	facility maturing	in	April	2016.	The	Replacement	Credit	Facility	matures	in	June	2019	and	includes	a	feature	that	allows	us	to	increase	availability,	at	our	option,	by	an aggregate	amount	up	to	$500.0	million	through	increased	commitments	from	existing	lenders	or	the	addition	of	new	lenders.	At	our	option,	borrowings	under	the Replacement	Credit	Facility	bear	interest	at	a	Base	Rate,	or	a	Eurodollar	Rate,	plus	an	applicable	margin	based	on	our	Debt	Ratings	(all	as	defined	in	the	agreements).

Contemporaneous	with	the	execution	of	the	Replacement	Credit	Facility,	we	entered	into	Amendment	No.	3	to	our	existing	$1.25	billion	unsecured	credit	facility	(the Existing	Credit	Facility	and,	together	with	the	Replacement	Credit	Facility,	the	Credit	Facilities),	to	reduce	the	commitments	under	the	Existing	Credit	Facility	to	$1.0 billion	and	conform	certain	terms	of	the

Existing	Credit	Facility	with	those	of	the	Replacement	Credit	Facility.	Amendment	No.	3	does	not	extend	the	maturity	date	of	the	Existing	Credit	Facility,	which matures	in	May	2017.	The	Existing	Credit	Facility	also	maintains	the	feature	that	allows	us	to	increase	availability,	at	our	option,	by	an	aggregate	amount	of	up	to $500.0	million	through	increased	commitments	from	existing	lenders	or	the	addition	of	new	lenders.

The	credit	agreements	require	us	to	comply	with	financial	and	other	covenants.	To	the	extent	we	are	not	in	compliance	with	these	covenants,	we	cannot	pay	dividends and	repurchase	common	stock.	Compliance	with	covenants	also	is	a	condition	for	any	incremental	borrowings	under	our	Credit	Facilities,	and	failure	to	meet	these covenants	would	enable	the	lenders	to	require	repayment	of	any	outstanding	loans	(which	would	adversely	affect	our	liquidity).	As	of	December	31,	2015,	our	EBITDA to	interest	ratio	was	7.17	compared	to	the	3.00	minimum	required	by	the	covenants,	and	our	total	debt	to	EBITDA	ratio	was	2.89	compared	to	the	3.75	maximum	allowed by	the	covenants.	In	connection	with	entering	into	the	Replacement	Credit	Facility	and	Amendment	No.	3	to	the	Existing	Credit	Facility,	our	maximum	total	debt	to EBITDA	ratio	was	increased	to	3.75	for	each	fiscal	quarter	ending	before	and	including	December	31,	2015,	and	3.50	for	each	fiscal	quarter	ending	thereafter.	As	of December	31,	2015,	we	were	in	compliance	with	the	covenants	under	our	Credit	Facilities,	and	we	expect	to	be	in	compliance	throughout	2016.

EBITDA,	which	is	a	non-U.S.	GAAP	measure,	is	calculated	as	defined	in	our	Credit	Facility	agreements.	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	our	Credit	Facilities,	as	well	as	the	occurrence	of	certain	material	adverse	events,	would	constitute defaults	and	would	allow	the	lenders	under	our	Credit	Facilities	to	accelerate	the	maturity	of	all	indebtedness	under	the	related	agreements.	This	could	also	have	an adverse	impact	on	the	availability	of	financial	assurances.	In	addition,	maturity	acceleration	on	our	Credit	Facilities	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	our	Credit	Facilities	for	relief	from	the	financial covenants	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	our	Credit	Facilities	or	raise sufficient	capital	to	repay	such	obligations	in	the	event	the	maturities	are	accelerated.

Availability	under	our	Credit	Facilities	totaled	$1,727.7	million	and	$1,615.4	million	as	of	December	31,	2015	and	2014,	respectively,	and	can	be	used	for	working capital,	capital	expenditures,	acquisitions,	letters	of	credit	and	other	general	corporate	purposes.	As	of	December	31,	2015	and	2014,	we	had	no	borrowings	under	our Credit	Facilities.	We	had	$503.3	million	and	$615.1	million	of	letters	of	credit	outstanding	under	our	Credit	Facilities	as	of	December	31,	2015	and	2014,	respectively.

We	also	have	a	$125.0	million	unsecured	credit	facility	agreement	(the	Uncommitted	Credit	Facility)	bearing	interest	at	LIBOR	plus	an	applicable	margin.	Our Uncommitted	Credit	Facility	is	subject	to	facility	fees	defined	in	the	agreement,	regardless	of	usage.	We	can	use	borrowings	under	the	Uncommitted	Credit	Facility	for working	capital	and	other	general	corporate	purposes.	The	agreements	governing	our	Uncommitted	Credit	Facility	require	us	to	comply	with	covenants.	The Uncommitted	Credit	Facility	may	be	terminated	by	either	party	at	any	time.	As	of	December	31,	2015,	we	had	$19.0	million	of	borrowings	under	our	Uncommitted Credit	Facility.

# Senior	Notes	and	Debentures

During	2015,	we	issued	$500.0	million	of	3.20%	notes	due	2025	(the	3.20%	Notes).	The	3.20%	Notes	are	unsubordinated	and	unsecured	obligations.	We	used	the	net proceeds	from	the	3.20%	Notes	to	refinance	debt	incurred	in	connection	with	our	acquisition	of	all	of	the	equity	interests	of	Tervita	during	2015.

# Interest	Rate	Swap	Agreements

During	the	second	half	of	2013,	we	entered	into	various	interest	rate	swap	agreements	relative	to	our	4.750%	fixed	rate	senior	notes	due	in	May	2023.	The	goal	was	to reduce	overall	borrowing	costs	and	rebalance	our	debt	portfolio's	ratio	of	fixed	to	floating	interest	rates.	As	of	December	31,	2015,	these	swap	agreements	have	a	total notional	value	of	$300.0	million	and	require	us	to	pay	interest	at	floating	rates	based	on	changes	in	LIBOR,	and	receive	interest	at	a	fixed	rate	of	4.750%.	For	2015	and 2014,	we	recognized	$7.5	million	and	$7.7	million,	respectively,	as	offsetting	benefits	to	our	interest	expense	from	these	swap	agreements,	which	mature	in	May	2023.

# Tax-Exempt	Financings

As	of	December	31,	2015	and	2014,	we	had	$1,079.1	million	and	$1,083.8	million,	respectively,	of	fixed	and	variable	rate	tax-exempt	financings	outstanding	with maturities	ranging	from	2019	to	2044.	Approximately	90%	of	our	tax-exempt	financings	are	remarketed	quarterly	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.	To	date,	the	remarketing	agents	have	been	able	to remarket	our	variable	rate	unsecured	tax-exempt	bonds.	These	bonds	have	been	classified	as	long-term	because	of	our	ability	and	intent	to	refinance	them	using availability	under	our	Credit	Facilities,	if	necessary.

As	of	December	31,	2015,	we	had	$100.3	million	of	restricted	cash	and	marketable	securities,	of	which	$2.1	million	represented	proceeds	from	the	issuance	of	tax- exempt	bonds	and	other	tax-exempt	financings	and	will	be	used	to	fund	capital	expenditures	under	the	terms	of	the	agreements.	Restricted	cash	and	marketable	securities also	include	amounts	held	in	trust	as	a	financial	guarantee	of	our	performance.

# Fuel	Hedges

We	use	derivative	instruments	designated	as	cash	flow	hedges	to	manage	our	exposure	to	changes	in	diesel	fuel	prices.	We	have	entered	into	multiple	agreements	related to	forecasted	diesel	fuel	purchases.	The	agreements	qualified	for,	and	were	designated	as,	effective	hedges	of	changes	in	the	prices	of	forecasted	diesel	fuel	purchases (fuel	hedges).	For	a	summary	of	our	outstanding	fuel	hedges	as	of	December	31,	2015,	see	Note	16,	Financial	Instruments,	to	our	consolidated	financial	statements	in Item	8	of	this	Form	10-K.

The	aggregate	fair	values	of	our	outstanding	fuel	hedges	as	of	December	31,	2015	and	2014	were	current	liabilities	of	$37.8	million	and	$34.4	million,	respectively,	and have	been	recorded	in	other	accrued	liabilities	in	our	consolidated	balance	sheets.

The	effective	portions	of	the	changes	in	fair	values	as	of	December	31,	2015	and	2014,	net	of	tax,	of	$22.3	million	and	$20.3	million,	respectively,	have	been	recorded	in stockholders'	equity	as	components	of	accumulated	other	comprehensive	loss.

During	2015	and	2014,	approximately	20%	of	our	fuel	volume	purchases	were	hedged	with	swap	agreements.	Additionally,	we	generally	recover	approximately	80%	of our	fuel	costs	with	fuel	recovery	fees	from	customers.

# Recycling	Commodity	Hedges

Revenue	from	the	sale	of	recycled	commodities	is	primarily	from	sales	of	old	corrugated	cardboard	and	old	newspaper.	From	time	to	time	we	use	derivative	instruments such	as	swaps	and	costless	collars	designated	as	cash	flow	hedges	to	manage	our	exposure	to	changes	in	prices	of	these	commodities.	We	had	no	outstanding	recycling commodity	hedges	as	of	December	31,	2015	and	December	31,	2014.	For	further	discussion,	see	Note	16,	Financial	Instruments,	to	our	consolidated	financial statements	in	Item	8	of	this	Form	10-K.

# Contractual	Obligations

The	following	table	summarizes	our	contractual	obligations	as	of	December	31,	2015	(in	millions):

| Year	Ending<br>December	31, | Operating<br>Leases | Maturities	of<br>Notes	Payable,<br>Capital	Leases<br>and	Other	Long-<br>Term	Debt | Scheduled<br>Interest	Payment<br>Obligations | Final	Capping,<br>Closure	and<br>Post-Closure | Remediation | Unconditional<br>Purchase<br>Commitments | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2016 | $26.1 | $4.7 | $323.7 | $87.4 | $62.4 | $251.9 | $756.2 |
| 2017 | 26.9 | 5.0 | 323.5 | 106.5 | 89.3 | 92.4 | 643.6 |
| 2018 | 24.3 | 705.6 | 310.1 | 96.7 | 62.9 | 52.7 | 1,252.3 |
| 2019 | 22.3 | 689.8 | 296.5 | 83.3 | 64.8 | 38.7 | 1,195.4 |
| 2020 | 20.8 | 926.2 | 239.0 | 90.5 | 62.4 | 32.9 | 1,371.8 |
| Thereafter | 92.8 | 5,304.5 | 2,243.4 | 5,571.5 | 546.5 | 557.1 | 14,315.8 |
| Total | $213.2 | $7,635.8 | $3,736.2 | $6,035.9 | $888.3 | $1,025.7 | $19,535.1 |

Scheduled	interest	payment	obligations	in	the	above	table	were	calculated	using	stated	coupon	rates	for	fixed	rate	debt	and	interest	rates	applicable	as	of	December	31, 2015	for	variable	rate	debt.	The	impact	of	our	outstanding	interest	rate	swaps	on	the	interest	payments	of	our	4.750%	fixed	rate	senior	notes	is	also	included	based	on	the floating	rates	in	effect	as	of	December	31,	2015.

The	present	value	of	capital	lease	obligations	is	included	in	our	consolidated	balance	sheets.

The	estimated	remaining	final	capping,	closure	and	post-closure	and	remediation	expenditures	presented	above	are	not	inflated	or	discounted	and	reflect	the	estimated future	payments	for	liabilities	incurred	and	recorded	as	of	December	31,	2015	and	for	liabilities	yet	to	be	incurred	over	the	remaining	life	of	our	landfills.

Unconditional	purchase	commitments	consist	primarily	of	(1)	disposal	related	agreements	that	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.

# Financial	Assurance

We	must	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	under	applicable	environmental	regulations	relating	to	our	landfill operations	for	capping,	closure	and	post-closure	costs,	and	related	to	our	performance	under	certain	collection,	landfill	and	transfer	station	contracts.	We	satisfy	these financial	assurance	requirements	by	providing	surety	bonds,	letters	of	credit,	or	insurance	policies	(Financial	Assurance	Instruments),	or	trust	deposits,	which	are included	in	restricted	cash	and	marketable	securities	and	other	assets	in	our	consolidated	balance	sheets.	The	amount	of	the	financial	assurance	requirements	for	capping, closure	and	post-closure	costs	is	determined	by	applicable	state	environmental	regulations.	The	financial	assurance	requirements	for	capping,	closure	and	post-closure costs	may	be	associated	with	a	portion	of	the	landfill	or	the	entire	landfill.	Generally,	states	require	a	third-party	engineering	specialist	to	determine	the	estimated capping,	closure	and	post-closure	costs	that	are	used	to	determine	the	required	amount	of	financial	assurance	for	a	landfill.	The	amount	of	financial	assurance	required can,	and	generally	will,	differ	from	the	obligation	determined	and	recorded	under	U.S.	GAAP.	The	amount	of	the	financial	assurance	requirements	related	to	contract performance	varies	by	contract.	Additionally,	we	must	provide	financial	assurance	for	our	insurance	program	and	collateral	for	certain	performance	obligations.	We	do not	expect	a	material	increase	in	financial	assurance	requirements	during	2016,	although	the	mix	of	Financial	Assurance	Instruments	may	change.

These	Financial	Assurance	Instruments	are	issued	in	the	normal	course	of	business	and	are	not	considered	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.

# Off-Balance	Sheet	Arrangements

We	have	no	off-balance	sheet	debt	or	similar	obligations,	other	than	operating	leases	and	financial	assurances,	which	are	not	classified	as	debt.	We	have	no	transactions or	obligations	with	related	parties	that	are	not	disclosed,	consolidated	into	or	reflected	in	our	reported	financial	position	or	results	of	operations.	We	have	not	guaranteed any	third-party	debt.

# Free	Cash	Flow

We	define	free	cash	flow,	which	is	not	a	measure	determined	in	accordance	with	U.S.	GAAP,	as	cash	provided	by	operating	activities	less	purchases	of	property	and equipment,	plus	proceeds	from	sales	of	property	and	equipment,	as	presented	in	our	consolidated	statements	of	cash	flows.

The	following	table	calculates	our	free	cash	flow	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars):

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Cash\tprovided\tby\toperating\tactivities | $1,679.7 | $1,529.8 | $1,548.2 |
| Purchases\tof\tproperty\tand\tequipment | (945.6) | (862.5) | (880.8) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 21.2 | 35.7 | 23.9 |
| Free\tcash\tflow | $755.3 | $703.0 | $691.3 |

For	a	discussion	of	the	changes	in	the	components	of	free	cash	flow,	see	our	discussion	regarding	Cash	Flows	Provided	By	Operating	Activities	and	Cash	Flows	Used	In Investing	Activities	contained	elsewhere	in	this	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

Purchases	of	property	and	equipment	as	reflected	in	our	consolidated	statements	of	cash	flows	and	as	presented	in	the	free	cash	flow	table	above	represent	amounts	paid during	the	period	for	such	expenditures.	The	following	table	reconciles	property	and	equipment	reflected	in	the	consolidated	statements	of	cash	flows	to	property	and equipment	received	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions	of	dollars):

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Purchases\tof\tproperty\tand\tequipment\tper\tthe\tconsolidated\tstatements\tof\tcash\n\t\t\tflows | $945.6 | $862.5 | $880.8 |
| Adjustments\tfor\tproperty\tand\tequipment\treceived\tduring\tthe\tprior\tperiod\tbut\n\t\t\tpaid\tfor\tin\tthe\tfollowing\tperiod,\tnet | 7.4 | 10.4 | (1.0) |
| Property\tand\tequipment\treceived\tduring\tthe\tperiod | $953.0 | $872.9 | $879.8 |

The	adjustments	noted	above	do	not	affect	our	net	change	in	cash	and	cash	equivalents	as	reflected	in	our	consolidated	statements	of	cash	flows.

We	believe	that	presenting	free	cash	flow	provides	useful	information	regarding	our	recurring	cash	provided	by	operating	activities	after	expenditures	for	property	and equipment	received,	plus	proceeds	from	sales	of	property	and	equipment.	It	also	demonstrates	our	ability	to	execute	our	financial	strategy,	which	includes	reinvesting	in existing	capital	assets	to	ensure	a	high	level	of	customer	service,	investing	in	capital	assets	to	facilitate	growth	in	our	customer	base	and	services	provided,	maintaining our	investment	grade	credit	ratings	and	minimizing	debt,	paying	cash	dividends	and	repurchasing	common	stock,	and	maintaining	and	improving	our	market	position through	business	optimization.	In	addition,	free	cash	flow	is	a	key	metric	used	to	determine	executive	compensation.	The	presentation	of	free	cash	flow	has	material limitations.	Free	cash	flow	does	not	represent	our	cash	flow	available	for	discretionary	expenditures	because	it	excludes	certain	expenditures	that	are	required	or	that	we have	committed	to	such	as	debt	service	requirements	and	dividend	payments.	Our	definition	of	free	cash	flow	may	not	be	comparable	to	similarly	titled	measures presented	by	other	companies.

# Contingencies

For	a	description	of	our	commitments	and	contingencies,	see	Note	8,	Landfill	and	Environmental	Costs,	Note	10,	Income	Taxes,	and	Note	17,	Commitments	and Contingencies,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K.

# 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.	Such	critical	accounting	policies, estimates	and	judgments	are	applicable	to	all	of	our	operating	segments.

We	have	noted	examples	of	the	residual	accounting	and	business	risks	inherent	in	the	accounting	for	these	areas.	Residual	accounting	and	business	risks	are	defined	as the	inherent	risks	that	we	face	after	the	application	of	our	policies	and	processes	that	are	generally	outside	of	our	control	or	ability	to	forecast.

# 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.

# Landfill	Development	Costs

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.

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.

# Residual	risks:

•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.

•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.

•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.

•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.

# Residual	risk:

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

•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.

# Landfill	Asset	Retirement	Obligations

We	have	two	types	of	retirement	obligations	related	to	landfills:	(1)	capping	and	(2)	closure	and	post-closure.

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	the	technical	design	of	the	landfill	site	process	previously	described.

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	(2.0%	in	2015,	2.3%	in	2014,	and 2.5%	in	2013).

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 (4.75%	in	2015,	4.5%	in	2014,	and	5.0%	in	2013).

Retirement	obligations	are	increased	each	year	to	reflect	the	passage	of	time	by	accreting	the	balance	at	the	weighted	average	credit-adjusted	risk-free	rate	that	was	used to	calculate	each	layer	of	the	recorded	liabilities.	This	accretion	is	charged	to	operating	expenses.	Actual	cash	expenditures	reduce	the	asset	retirement	obligation liabilities	as	they	are	made.

Corresponding	retirement	obligation	assets	are	recorded	for	the	same	value	as	the	additions	to	the	capping,	closure	and	post-closure	liabilities.	The	retirement	obligation assets	are	amortized	to	expense	on	a	per-ton	basis	as	disposal	capacity	is	consumed.	The	per-ton	rate	is	calculated	by	dividing	the	sum	of	each	of	the	recorded	retirement obligation	asset's	net	book	value	and	expected	future	additions	to	the	retirement	obligation	asset	by	the	remaining	disposal	capacity.	A	per-ton	rate	is	determined	for each	separate	capping	event	based	on	the	disposal	capacity	relating	to	that	event.	Closure	and	post-closure	per-ton	rates	are	based	on	the	total	disposal	capacity	of	the landfill.

•Changes	in	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.

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.

•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	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	the	acquisition	of	Allied,	environmental obligations	are	recorded	on	an	undiscounted	basis.	Environmental	obligations	assumed	in	the	acquisition	of	Allied,	which	were	initially	estimated	on	a	discounted	basis, are	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.	We	have	not	reduced	the	liabilities	we	have	recorded	for	recoveries	from	other	potentially	responsible parties	or	insurance	companies.

•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	such	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	statement	of

income.

# Insurance	Reserves	and	Related	Costs

Our	insurance	programs	for	workers'	compensation,	commercial	general	and	auto	liability,	environmental	and	remediation	liability,	and	employee-related	health	care benefits	are	subject	to	high	deductible	insurance	policies.	Accruals	for	insurance	or

deductible	reserves	are	based	on	claims	filed	and	estimates	of	claims	incurred	but	not	reported.	We	maintain	high	deductibles	for	commercial	general	liability, automobile	liability	and	workers'	compensation	coverage,	ranging	from	$3.0	million	to	$5.0	million.

•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	statement	of	income	in	the	period	in	which	such	adjustment	is	known.

•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.

# Loss	Contingencies

We	are	subject	to	various	legal	proceedings,	claims	and	regulatory	matters,	the	outcomes	of	which	are	subject	to	significant	uncertainty.	We	determine	whether	to disclose	material	loss	contingencies	or	accrue	for	loss	contingencies	based	on	an	assessment	of	whether	the	risk	of	loss	is	remote,	reasonably	possible	or	probable,	and whether	it	can	be	reasonably	estimated.	We	analyze	our	litigation	and	regulatory	matters	based	on	available	information	to	assess	the	potential	liabilities.	Management develops	its	assessment	based	on	an	analysis	of	possible	outcomes	under	various	strategies.	We	record	and	disclose	loss	contingencies	pursuant	to	the	applicable accounting	guidance	for	such	matter.

We	record	losses	related	to	contingencies	in	cost	of	operations	or	selling,	general	and	administrative	expenses,	depending	on	the	nature	of	the	underlying	transaction leading	to	the	loss	contingency.

•Actual	costs	may	vary	from	our	estimates	for	a	variety	of	reasons,	including	differing	interpretations	of	laws,	opinions	on	culpability	and	assessments	of	the amount	of	damages.

•Loss	contingency	assumptions	involve	judgments	that	are	inherently	subjective	and	generally	involve	matters	that	are	by	their	nature	complex	and unpredictable.	If	a	loss	contingency	results	in	an	adverse	judgment	or	is	settled	for	a	significant	amount,	it	could	have	a	material	adverse	impact	on	our consolidated	financial	position,	results	of	operations	or	cash	flows	in	the	period	in	which	such	judgment	or	settlement	occurs.

•New	claims	may	be	asserted	that	are	not	included	in	our	loss

# Asset	Impairment

Valuation	methodology.		We	evaluate	our	long-lived	assets	(other	than	goodwill)	for	impairment	whenever	events	or	changes	in	circumstances	indicate	the	carrying amount	of	the	asset	or	asset	group	may	not	be	recoverable	based	on	projected	cash	flows	anticipated	to	be	generated	from	the	ongoing	operation	of	those	assets	or	we intend	to	sell	or	otherwise	dispose	of	the	assets.

•If	events	or	changes	in	circumstances	occur,	including	reductions	in	anticipated	cash	flows	generated	by	our	operations	or	determinations	to	divest	assets, certain	assets	could	be	impaired,	which	would	result	in	a	non-cash	charge	to	earnings.

Evaluation	criteria.				We	test	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	amounts	of	the	assets	may	not	be recoverable.	Examples	of	such	events	could	include	a	significant	adverse	change	in	the	extent	or	manner	in	which	we	use	a	long-lived	asset,	a	change	in	its	physical condition,	or	new	circumstances	that	could	cause	an	expectation	that	it	is	more	likely	than	not	that	we	would	sell	or	otherwise	dispose	of	a	long-lived	asset	significantly before	the	end	of	its	previously	estimated	useful	life.

•Our	most	significant	asset	impairment	exposure,	other	than	goodwill	(which	is	discussed	below),	relates	to	our	landfills.	A	significant	reduction	in	our	estimated disposal	capacity	as	a	result	of	unanticipated	events	such	as	regulatory	developments,	revocation	of	an	existing	permit	or	denial	of	an	expansion	permit,	or changes	in	our	assumptions	used	to	calculate	disposal	capacity,	could	trigger	an	impairment	charge.

Recognition	criteria.		If	such	circumstances	arise,	we	recognize	impairment	for	the	difference	between	the	carrying	amount	and	fair	value	of	the	asset	if	the	net	book value	of	the	asset	exceeds	the	sum	of	the	estimated	undiscounted	cash	flows	expected	to	result	from	its	use	and	eventual	disposition.	We	generally	use	the	present	value of	the	expected	cash	flows	from	that	asset	to	determine	fair	value.

# Goodwill	Recoverability

We	have	historically	evaluated	goodwill	for	impairment	annually	as	of	December	31,	or	when	an	indicator	of	impairment	exists.	During	2015	we	changed	the	date	of	our annual	goodwill	impairment	assessment	for	our	reporting	units	to	October	1st.	This	voluntary	change	in	the	annual	goodwill	testing	date	is	a	change	in	accounting principle,	which	we	believe	is	preferable	as	it	better	aligns	the	timing	of	the	assessment	with	our	planning	and	forecasting	process	and	also	provides	additional	time	to complete	our	annual	assessment	in	advance	of	our	year-end	reporting.	This	change	in	assessment	date	was	applied	prospectively	and	did	not	delay,	accelerate	or	avoid	a potential	impairment	charge.

We	test	goodwill	for	impairment	using	a	two-step	process.	The	first	step	is	a	screen	for	potential	impairment,	while	the	second	step	measures	the	amount	of	the impairment,	if	any.	The	first	step	compares	the	fair	value	of	a	reporting	unit	with	its	carrying	amount,	including	goodwill.

During	2015,	we	managed	and	evaluated	our	operations	through	three	regions:	East,	Central	and	West.	In	determining	fair	value,	we	primarily	use	discounted	future cash	flows	and	operating	results	based	on	a	comparative	multiple	of	earnings	or	revenues.

Significant	estimates	used	in	our	fair	value	calculation	using	discounted	future	cash	flows	include:	(1)	estimates	of	future	revenue	and	expense	growth	by	reporting	unit, which	we	estimate	to	range	from	3%	to	5%;	(2)	future	estimated	effective	tax	rates,	which	we	estimate	to	be	40%;	(3)	future	estimated	capital	expenditures	as	well	as future	required	investments	in	working	capital;	(4)	estimated	discount	rates,	which	we	estimate	to	range	between	6%	and	8%;	and	(5)	the	future	terminal	value	of	the reporting	unit,	which	is	based	on	its	ability	to	exist	into	perpetuity.	Significant	estimates	used	in	the	fair	value	calculation	using	market	value	multiples	include: (a)	estimated	future	growth	potential	of	the	reporting	unit;	(b)	estimated	multiples	of	revenue	or	earnings	a	willing	buyer	is	likely	to	pay;	and	(c)	the	estimated	control premium	a	willing	buyer	is	likely	to	pay.

In	addition,	we	evaluate	a	reporting	unit	for	impairment	if	events	or	circumstances	change	between	annual	tests,	indicating	a	possible	impairment.	Examples	of	such events	or	circumstances	include:	(1)	a	significant	adverse	change	in	legal	factors	or	in	the	business	climate;	(2)	an	adverse	action	or	assessment	by	a	regulator;	(3)	a	more likely	than	not	expectation	that	a	reporting	unit	or	a	significant	portion	thereof	will	be	sold;	(4)	continued	or	sustained	losses	at	a	reporting	unit;	(5)	a	significant	decline in	our	market	capitalization	as	compared	to	our	book	value;	or	(6)	the	testing	for	recoverability	of	a	significant	asset	group	within	the	reporting	unit.

We	assign	assets	and	liabilities	from	our	corporate	operating	segment	to	our	three	reporting	units	to	the	extent	that	such	assets	or	liabilities	relate	to	the	cash	flows	of	the reporting	unit	and	would	be	included	in	determining	the	reporting	unit's	fair	value.

In	preparing	our	annual	test	for	impairment	as	of	October	1,	2015,	we	determined	that	our	indicated	fair	value	of	total	invested	capital	exceeded	our	total	market capitalization.	We	believe	one	of	the	primary	reconciling	differences	between	the	indicated	fair	value	of	total	invested	capital	and	our	total	market	capitalization	is	due	to a	control	premium.	We	believe	the	control	premium	represents	the	value	a	market	participant	could	extract	as	savings	and/or	synergies	by	obtaining	control.

As	of	October	1,	2015,	we	determined	that	the	indicated	fair	value	of	our	reporting	units	exceeded	their	carrying	value	by	approximately	50%	on	average	and,	therefore, we	noted	no	indicators	of	impairment	at	our	reporting	units.

Our	operating	segments,	which	also	represent	our	reporting	units,	are	comprised	of	several	vertically	integrated	businesses.	When	an	individual	business	within	an integrated	operating	segment	is	divested,	goodwill	is	allocated	to	that	business	based	on	its	fair	value	relative	to	the	fair	value	of	its	operating	segment.

•Future	events	could	cause	us	to	conclude	that	impairment	indicators	exist	and	that	goodwill	associated	with	acquired	businesses	is impaired.

•The	valuation	of	identifiable	goodwill	requires	significant	estimates	and	judgment	about	future	performance,	cash	flows	and	fair	value.	Our	future	results	could be	affected	if	these	current	estimates	of	future	performance	and	fair	value	change.	For	example,	a	reduction	in	long-term	growth	assumptions	could	reduce	the estimated	fair	value	of	the	operating	segments	to	below	their	carrying	values,	which	could	trigger	an	impairment	charge.	Similarly,	an	increase	in	our	discount rate	could	trigger	an	impairment	charge.	Any	resulting	impairment	charge	could	have	a	material	adverse	impact	on	our	financial	condition	and	results	of operations.

In	January	2016,	we	realigned	our	field	support	functions	by	combining	two	organizational	layers	into	one.	This	includes	the	elimination	of	our	three	regions,	the consolidation	of	our	20	areas	into	10	and	the	streamlining	of	select	roles	at	our	Phoenix	headquarters.		The	areas	will	be	grouped	and	overseen	by	two	Executive	Vice Presidents	of	Operations.		In	connection	with	our	restructuring,	we	will	further	evaluate	our	2016	reporting	segments.		We	have	considered	the	implications	of	our restructuring	on	our	reporting	units	used	to	measure	for	goodwill	impairment,	and	we	have	noted	no	indicators	of	goodwill	impairment.

Our	income	tax	expense,	deferred	taxes	and	liabilities	for	unrecognized	tax	benefits	reflect	management's	best	assessment	of	estimated	future	taxes	to	be	paid.	We	are subject	to	U.S.	federal	income	taxes	and	to	the	income	taxes	of	numerous	states	and	Puerto	Rico.	Significant	judgments	and	estimates	are	required	in	determining	the combined	income	tax	expense.

Deferred	income	taxes	arise	from	temporary	differences	between	the	financial	reporting	and	income	tax	bases	of	assets	(other	than	non-deductible	goodwill)	and liabilities,	which	will	result	in	taxable	or	deductible	amounts	in	the	future.	Deferred	tax	assets	and	liabilities	are	measured	using	the	income	tax	rate	in	effect	during	the year	in	which	the	differences	are	expected	to	reverse.

We	record	net	deferred	tax	assets	to	the	extent	we	believe	these	assets	will	more	likely	than	not	be	realized.	In	making	this	determination,	we	consider	all	available positive	and	negative	evidence,	including	scheduled	reversals	of	deferred	tax	liabilities,	projected	future	taxable	income,	tax	planning	strategies	and	recent	financial operations.	The	assumptions	about	future	taxable	income	require	the	use	of	significant	judgment	and	are	consistent	with	the	plans	and	estimates	we	are	using	to	manage the	underlying	businesses.	In	the	event	we	determine	that	we	would	be	able	to	realize	our	deferred	income	tax	assets	in	the	future	in	excess	of	their	net	recorded	amount, we	will	make	an	adjustment	to	the	valuation	allowance	which	would	reduce	our	provision	for	income	taxes.

The	calculation	of	our	tax	liabilities	involves	dealing	with	uncertainties	in	the	application	of	complex	tax	laws	and	regulations	in	a	multitude	of	jurisdictions.	Regarding the	accounting	for	uncertainty	in	income	taxes	recognized	in	the	financial	statements,	we	record	unrecognized	tax	benefits	as	liabilities	in	accordance	with	ASC	740 when	it	is	more	likely	than	not	that	the	position	will	be	sustained	upon	examination,	including	resolutions	of	any	related	appeals	or	litigation	processes,	based	on	the technical	merits.	We	recognize	interest	and	penalties	related	to	uncertain	tax	positions	within	the	provision	for	income	taxes	in	our	consolidated	statements	of	income. Accrued	interest	and	penalties	are	included	within	other	accrued	liabilities,	deferred	income	taxes	and	other	long-term	tax	liabilities	in	our	consolidated	balance	sheets. We	adjust	these	liabilities	when	our	judgment	changes	as	a	result	of	the	evaluation	of	new	information	not	previously	available.	Because	of	the	complexity	of	some	of these	uncertainties,	the	ultimate	resolution	may	result	in	a	payment	that	is	materially	different	from	our	current	estimate	of	the	unrecognized	tax	benefit	liabilities.	These differences	will	be	reflected	as	increases	or	decreases	to	income	tax	expense	in	the	period	in	which	new	information	is	available.

•Income	tax	assets	and	liabilities	established	in	purchase	accounting	for	acquisitions	are	based	on	assumptions	that	could	differ	from	the	ultimate	outcome	of	the tax	matters.	Such	adjustments	would	be	charged	or	credited	to	earnings,	unless	they	meet	certain	remeasurement	criteria	and	are	allowed	to	be	adjusted	to goodwill.

•Changes	in	the	estimated	realizability	of	deferred	tax	assets	could	result	in	adjustments	to	our	provision	for	income

taxes.

•Valuation	allowances	for	deferred	tax	assets	and	the	realizability	of	net	operating	loss	carryforwards	for	tax	purposes	are	based	on	our	judgment.	If	our judgments	and	estimates	concerning	valuation	allowances	and	the	realizability	of	net	operating	loss	carryforwards	are	incorrect,	our	provision	for	income	taxes would	change.

•We	are	regularly	under	examination	or	administrative	review	by	various	taxing	authorities.	The	Internal	Revenue	Code,	state	tax	laws	and	income	tax regulations	are	a	complex	set	of	rules	that	we	must	interpret	and	apply.	Positions	taken	in	tax	years	under	examination	or	subsequent	years	are	subject	to challenge.	Accordingly,	we	may	have	exposure	for	additional	tax	liabilities	arising	from	these	audits	if	any	positions	taken	by	us	or	by	companies	we	have acquired	are	disallowed	by	the	taxing	authorities.

•We	adjust	our	liabilities	for	uncertain	tax	positions	when	our	judgment	changes	as	a	result	of	the	evaluation	of	new	information	not	previously	available.	Due	to the	complexity	of	some	of	these	uncertainties,	their	ultimate	resolution	may	result	in	payments	that	are	materially	different	from	our	current	estimates	of	the	tax liabilities.	These	differences	will	be	reflected	as	increases	or	decreases	to	our	provision	for	income	taxes	in	the	period	in	which	they	are	determined.

# Defined	Benefit	Pension	Plans

We	currently	have	one	qualified	defined	benefit	pension	plan,	the	BFI	Retirement	Plan	(the	Plan).	The	Plan	covers	certain	employees	in	the	United	States,	including some	employees	subject	to	collective	bargaining	agreements.	The	Plan's	benefit	formula	is	based	on	a	percentage	of	compensation	as	defined	in	the	Plan	document.	The benefits	of	approximately	97%	of	the	current	plan	participants	were	frozen	upon	Allied's	acquisition	of	BFI	in	1999.

Our	pension	contributions	are	made	in	accordance	with	funding	standards	established	by	the	Employee	Retirement	Income	Security	Act	of	1974	and	the	Internal Revenue	Code,	as	amended	by	the	Pension	Protection	Act	of	2006.

The	Plan's	assets	are	invested	as	determined	by	our	Employee	Benefits	Committee.	As	of	December	31,	2015,	the	plan	assets	were	invested	in	fixed	income	funds, equity	funds	and	cash.	The	Employee	Benefits	Committee	annually	reviews	and	adjusts	the	plan's	asset	allocation	as	deemed	necessary.	As	of	December	31,	2015	and 2014,	the	Plan	was	underfunded	by	$5.4	million	and	$4.2	million,	respectively.

•Changes	in	the	plan's	investment	mix	and	performance	of	the	equity	and	bond	markets	and	fund	managers	could	impact	the	amount	of	pension	income	or expense	recorded,	the	funded	status	of	the	plan	and	the	need	for	future	cash	contributions.

Assumptions.		The	benefit	obligation	and	associated	income	or	expense	related	to	the	Plan	are	determined	based	on	assumptions	concerning	items	such	as	discount	rates, mortality	rates,	expected	rates	of	return	and	average	rates	of	compensation	increases.	Our	assumptions	are	reviewed	annually	and	adjusted	as	deemed	necessary.

We	determine	the	discount	rate	based	on	a	model	that	matches	the	timing	and	amount	of	expected	benefit	payments	to	maturities	of	high	quality	bonds	priced	as	of	the Plan	measurement	date.	Where	that	timing	does	not	correspond	to	a	published	high-quality	bond	rate,	our	model	uses	an	expected	yield	curve	to	determine	an appropriate	current	discount	rate.	The	yield	on	the	bonds	is	used	to	derive	a	discount	rate	for	the	liability.	If	the	discount	rate	were	to	increase	by	1%,	our	benefit obligation	would	decrease	by	approximately	$20	million.	If	the	discount	rate	were	to	decrease	by	1%,	our	benefit	obligation	would	increase	by	approximately $24	million.

In	developing	our	expected	rate	of	return	assumption,	we	evaluate	long-term	expected	and	historical	returns	on	the	Plan	assets,	giving	consideration	to	our	asset	mix	and the	anticipated	duration	of	the	Plan	obligations.	The	average	rate	of	compensation	increase	reflects	our	expectations	of	average	pay	increases	over	the	periods	benefits are	earned.	There	are	no	participants	in	the	Plan	that	continue	to	earn	service	benefits.

•Our	assumed	discount	rate	is	sensitive	to	changes	in	market-based	interest	rates.	A	decrease	in	the	discount	rate	will	increase	our	related	benefit	plan obligation.

•Our	annual	pension	expense	would	be	impacted	if	the	actual	return	on	plan	assets	were	to	vary	from	the	expected

return.

# New	Accounting	Standards

For	a	description	of	new	accounting	standards	that	may	affect	us,	see	Note	2,	Summary	of	Significant	Accounting	Policies,	to	our	consolidated	financial	statements	in Item	8	of	this	Form	10-K.

# ITEM	7A. QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET

# Interest	Rate	Risk

Our	major	market	risk	exposure	of	our	financial	instruments	is	changing	interest	rates	in	the	United	States	and	fluctuations	in	LIBOR.	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.	The	table	below	provides	information	about	certain	of	our	market-sensitive	financial	instruments	and	constitutes	a	"forward-looking statement."

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | Fair	Value<br>as	of<br>December	31,<br>2015 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed\trate\tdebt: |  |  |  |  |  |  |  |  |
| Amount\toutstanding\t(in\nmillions) | $4.7 | $5.0 | $705.6 | $654.8 | $855.0 | $4,424.3 | $6,649.4 | $7,209.4 |
| Average\tinterest\trates | 7.3% | 7.3% | 3.8% | 5.5% | 5.0% | 5.0% | 4.9% |  |
| Variable\trate\tdebt: |  |  |  |  |  |  |  |  |
| Amount\toutstanding\t(in\nmillions) | $— | $— | $— | $35.0 | $71.2 | $880.2 | $986.4 | $986.4 |
| Average\tinterest\trates | —% | —% | —% | 0.6% | 0.5% | 0.6% | 0.6% |  |

The	fixed	and	variable	rate	debt	amounts	above	exclude	the	remaining	non-cash	discounts,	premiums	and	adjustments	to	fair	value	recorded	in	purchase	accounting totaling	$61.6	million.	Additionally,	during	the	second	half	of	2013,	we	entered	into	various	interest	rate	swap	agreements	relative	to	our	4.750%	fixed	rate	senior	notes due	in	May	2023.	The	goal	was	to	reduce	overall	borrowing	costs	and	rebalance	our	debt	portfolio's	ratio	of	fixed	to	floating	interest	rates.	These	swap	agreements, which	were	designated	as	fair	value	hedges,	have	a	total	notional	value	of	$300.0	million	as	of	December	31,	2015.	Our	interest	rate	swap	contracts	have	been	authorized pursuant	to	our	policies	and	procedures.	We	do	not	use	financial	instruments	for	trading	purposes	and	are	not	a	party	to	any	leveraged	derivatives.

# 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.	Where	appropriate,	we	have	implemented	a	fuel	recovery	fee	that	is	designed	to	recover	our	fuel	costs.	While	we	charge	fuel	recovery	fees	to	a majority	of	our	customers,	we	are	unable	to	charge	such	fees	to	all	customers.	Consequently,	an	increase	in	fuel	costs	results	in	(1)	an	increase	in	our	cost	of	operations, (2)	a	smaller	increase	in	our	revenue	(from	the	fuel	recovery	fee)	and	(3)	a	decrease	in	our	operating	margin	percentage.	Conversely,	a	decrease	in	fuel	costs	results	in (1)	a	decrease	in	our	cost	of	operations,	(2)	a	smaller	decrease	in	our	revenue	and	(3)	an	increase	in	our	operating	margin	percentage.

At	current	consumption	levels,	we	believe	a	twenty-cent	per	gallon	change	in	the	price	of	diesel	fuel	changes	our	fuel	costs	by	approximately	$22	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	changes	our	fuel	recovery	fee	by	approximately	$22	million	per	year.

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	indirect	fuel	recovery	fees	from	our	vendors.

For	additional	discussion	and	detail	of	our	fuel	hedges,	see	Note	16,	Financial	Instruments,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K.

# Commodities	Prices

We	market	recycled	products	such	as	cardboard	and	newspaper	from	our	recycling	centers.	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	$27	million	and	$18	million,	respectively.

| Report	of	Independent	Registered	Public	Accounting	Firm | 64 |
| :--- | :--- |
| Report\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm\ton\tInternal\tControl\tOver\tFinancial\tReporting | 65 |
| Consolidated\tBalance\tSheets\tas\tof\tDecember\t31,\t2015\tand\t2014 | 66 |
| Consolidated\tStatements\tof\tIncome\tfor\tEach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2015 | 67 |
| Consolidated\tStatements\tof\tComprehensive\tIncome\tfor\tEach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2015 | 68 |
| Consolidated\tStatement\tof\tStockholders'\tEquity\tfor\tEach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2015 | 69 |
| Consolidated\tStatements\tof\tCash\tFlows\tfor\tEach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t\t31,\t2015 | 70 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 71 |

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors	and	Stockholders	of	Republic	Services,	Inc.:

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Republic	Services,	Inc.	as	of	December	31,	2015	and	2014,	and	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,	2015.	These	financial	statements	are the	responsibility	of	Republic	Services,	Inc.'s	management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test	basis, evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant	estimates made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated	financial	position	of	Republic	Services,	Inc.	at December	31,	2015	and	2014,	and	the	consolidated	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2015,	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),	Republic	Services,	Inc.'s	internal	control over	financial	reporting	as	of	December	31,	2015,	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	11,	2016	expressed	an	unqualified	opinion	thereon.

/s/	Ernst	&	Young	LLP

Phoenix,	Arizona

# ON	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

We	have	audited	Republic	Services,	Inc.'s	internal	control	over	financial	reporting	as	of	December	31,	2015,	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).	Republic	Services, Inc.'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	Republic	Services,	Inc.'s	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	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.

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.

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	Tervita,	LLC,	which	is	included	in	the	2015 consolidated	financial	statements	of	Republic	Services,	Inc.	and	constituted	approximately	$500	million	of	total	assets	as	of	December	31,	2015	and	less	than	1%	of revenues	for	the	year	then	ended.	Our	audit	of	internal	control	over	financial	reporting	of	Republic	Services,	Inc.	also	did	not	include	an	evaluation	of	the	internal control	over	financial	reporting	of	Tervita,	LLC.

In	our	opinion,	Republic	Services,	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	the COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of	Republic Services,	Inc.	as	of	December	31,	2015	and	2014,	and	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,	2015	of	Republic	Services,	Inc.	and	our	report	dated	February	11,	2016	expressed	an	unqualified	opinion thereon.

# CONSOLIDATED	BALANCE	SHEETS

# (in	millions,	except	per	share	data)

| ASSETS | December	31,	2015 | December	31,	2014 |
| :--- | :--- | :--- |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $32.4 | $75.2 |
|  | 962.9 | 930.4 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 235.0 | 263.4 |
| Deferred\ttax\tassets | — | 122.0 |
| Total\tcurrent\tassets | 1,230.3 | 1,391.0 |
| Restricted\tcash\tand\tmarketable\tsecurities | 100.3 | 115.6 |
| Property\tand\tequipment,\tnet | 7,552.8 | 7,165.3 |
| Goodwill | 11,145.5 | 10,830.9 |
| Other\tintangible\tassets,\tnet | 246.4 | 298.9 |
| Other\tassets | 301.9 | 292.3 |
| Total\tassets | $20,577.2 | $20,094.0 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| Current\tliabilities: |  |  |
| Accounts\tpayable | $577.4 | $527.3 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | 5.5 | 10.4 |
| Deferred\trevenue | 313.9 | 306.3 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tcurrent\tportion | 149.8 | 164.3 |
| Accrued\tinterest | 71.6 | 67.0 |
| Other\taccrued\tliabilities | 716.6 | 750.7 |
| Total\tcurrent\tliabilities | 1,834.8 | 1,826.0 |
| Long-term\tdebt,\tnet\tof\tcurrent\tmaturities | 7,568.7 | 7,050.8 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tnet\tof\tcurrent\tportion | 1,677.9 | 1,677.5 |
| Deferred\tincome\ttaxes\tand\tother\tlong-term\ttax\tliabilities | 1,131.8 | 1,149.0 |
| Insurance\treserves,\tnet\tof\tcurrent\tportion | 278.1 | 298.0 |
| Other\tlong-term\tliabilities | 309.3 | 344.9 |
| Commitments\tand\tcontingencies |  |  |
| Stockholders'\tequity: |  |  |
|  | — | — |
| treasury,\trespectively | 3.5 | 4.1 |
| Additional\tpaid-in\tcapital | 4,677.7 | 6,876.9 |
| Retained\tearnings | 3,138.3 | 2,795.0 |
| Treasury\tstock,\tat\tcost\t(0.4\tand\t61.7\tshares,\trespectively) | (14.9) | (1,901.8) |
| Accumulated\tother\tcomprehensive\tloss,\tnet\tof\ttax | (30.5) | (28.9) |
| Total\tRepublic\tServices,\tInc.\tstockholders'\tequity | 7,774.1 | 7,745.3 |
| Noncontrolling\tinterests | 2.5 | 2.5 |
| Total\tstockholders'\tequity | 7,776.6 | 7,747.8 |
| Total\tliabilities\tand\tstockholders'\tequity | $20,577.2 | $20,094.0 |

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

# CONSOLIDATED	STATEMENTS	OF	INCOME

|  |  | Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Revenue | $9,115.0 | $8,803.3 | $8,417.2 |
| Expenses: |  |  |  |
| Cost\tof\toperations | 5,518.6 | 5,643.1 | 5,234.7 |
| Depreciation,\tamortization\tand\tdepletion | 970.6 | 906.9 | 877.4 |
| Accretion | 79.4 | 78.0 | 76.6 |
| Selling,\tgeneral\tand\tadministrative | 983.1 | 918.9 | 853.8 |
| Negotiation\tand\twithdrawal\tcosts\t-\tCentral\tStates\tPension\tand\tOther\tFunds | 4.5 | 1.5 | 157.7 |
| Loss\t(gain)\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | — | 20.0 | (1.9) |
| Restructuring\tcharges | — | 1.8 | 8.6 |
| Operating\tincome | 1,558.8 | 1,233.1 | 1,210.3 |
| Interest\texpense | (364.9) | (348.7) | (360.0) |
| Loss\ton\textinguishment\tof\tdebt | — | (1.4) | (2.1) |
| Interest\tincome | 0.8 | 0.6 | 0.7 |
| Other\tincome,\tnet | 1.2 | 1.7 | 2.3 |
| Income\tbefore\tincome\ttaxes | 1,195.9 | 885.3 | 851.2 |
| Provision\tfor\tincome\ttaxes | 445.5 | 337.4 | 262.1 |
| Net\tincome | 750.4 | 547.9 | 589.1 |
| Net\tincome\tattributable\tto\tnoncontrolling\tinterests | (0.5) | (0.3) | (0.2) |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $749.9 | $547.6 | $588.9 |
| Basic\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders: |  |  |  |
| Basic\tearnings\tper\tshare | $2.14 | $1.54 | $1.63 |
| Weighted\taverage\tcommon\tshares\toutstanding | 350.0 | 356.7 | 362.1 |
| Diluted\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders: |  |  |  |
| Diluted\tearnings\tper\tshare | $2.13 | $1.53 | $1.62 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 351.4 | 358.1 | 363.4 |
| Cash\tdividends\tper\tcommon\tshare | $1.16 | $1.08 | $0.99 |

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

# (in	millions)

|  |  | Years	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Net\tincome | $750.4 | $547.9 | $589.1 |
| Other\tcomprehensive\t(loss)\tincome,\tnet\tof\ttax |  |  |  |
| Hedging\tactivity: |  |  |  |
| Settlements | (16.4) | 0.3 | 1.7 |
| Realized\tloss\t(gain)\treclassified\tinto\tearnings | 18.7 | 1.2 | (0.2) |
| Unrealized\t(loss)\tgain | (2.0) | (24.1) | 2.3 |
| Pension\tactivity: |  |  |  |
| Change\tin\tfunded\tstatus\tof\tpension\tplan\tobligations | (1.9) | (9.3) | 7.1 |
| Gain\trelated\tto\tpension\tsettlement\treclassified\tto\tearnings | — | — | (2.1) |
| Other\tcomprehensive\t(loss)\tincome,\tnet\tof\ttax | (1.6) | (31.9) | 8.8 |
| Comprehensive\tincome | 748.8 | 516.0 | 597.9 |
| Comprehensive\tincome\tattributable\tto\tnoncontrolling\tinterests | (0.5) | (0.3) | (0.2) |
| Comprehensive\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $748.3 | $515.7 | $597.7 |

# CONSOLIDATED	STATEMENT	OF	STOCKHOLDERS'	EQUITY

|  |  |  | Republic	Services,	Inc.	Stockholders'	Equity | Republic	Services,	Inc.	Stockholders'	Equity | Republic	Services,	Inc.	Stockholders'	Equity |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common\tStock\nShares | Amount | Additional\nPaid-In\nCapital | Retained\nEarnings | Treasury\nStock\nShares | Amount | Accumulated\nOther\tComprehensive\n(Loss)\tIncome,\tNet\tof\nTax | Noncontrolling\tInterests | Total |
| Balance\tas\tof\tDecember\t31,\t2012 | 405.2 | $4.1 | $6,588.9 | $2,403.2 | (44.1) | $(1,287.1) | $(5.8) | $2.4 | $7,705.7 |
| Net\tincome | — | — | — | 588.9 | — | — | — | 0.2 | 589.1 |
| Change\tin\tthe\tvalue\tof |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$1.0 | — | — | — | — | — | — | 3.8 | — | 3.8 |
| Employee\tbenefit\tplan |  |  |  |  |  |  |  |  |  |
| liability\tadjustments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$12.2 | — | — | — | — | — | — | 5.0 | — | 5.0 |
| Cash\tdividends\tdeclared | — | — | — | (357.3) | — | — | — | — | (357.3) |
| Issuances\tof\tcommon\tstock | 5.8 | — | 158.8 | — | — | — | — | — | 158.8 |
| Stock-based\tcompensation | — | — | 17.2 | (2.1) | — | — | — | — | 15.1 |
| Purchase\tof\tcommon\tstock\tfor |  |  |  |  |  |  |  |  |  |
| treasury | — | — | — | — | (6.5) | (214.1) | — | — | (214.1) |
| Balance\tas\tof\tDecember\t31,\t2013 | 411.0 | 4.1 | 6,764.9 | 2,632.7 | (50.6) | (1,501.2) | 3.0 | 2.6 | 7,906.1 |
| Net\tincome | — | — | — | 547.6 | — | — | — | 0.3 | 547.9 |
| Change\tin\tthe\tvalue\tof |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$15.1 | — | — | — | — | — | — | (22.6) | — | (22.6) |
| Employee\tbenefit\tplan |  |  |  |  |  |  |  |  |  |
| liability\tadjustments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$6.3 | — | — | — | — | — | — | (9.3) | — | (9.3) |
| Cash\tdividends\tdeclared | — | — | — | (383.6) | — | — | — | — | (383.6) |
| Issuances\tof\tcommon\tstock | 3.4 | — | 92.9 | — | — | — | — | — | 92.9 |
| Stock-based\tcompensation | — | — | 19.1 | (1.7) | — | — | — | — | 17.4 |
| Purchase\tof\tcommon\tstock\tfor |  |  |  |  |  |  |  |  |  |
| treasury | — | — | — | — | (11.1) | (400.6) | — | — | (400.6) |
| Distributions\tpaid\tto\tnoncontrolling\ninterests | — | — | — | — | — | — | — | (0.4) | (0.4) |
| Balance\tas\tof\tDecember\t31,\t2014 | 414.4 | 4.1 | 6,876.9 | 2,795.0 | (61.7) | (1,901.8) | (28.9) | 2.5 | 7,747.8 |
| Net\tincome | — | — | — | 749.9 | — | — | — | 0.5 | 750.4 |
| Change\tin\tthe\tvalue\tof |  |  |  |  |  |  |  |  |  |
| derivative\tinstruments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$0.6 | — | — | — | — | — | — | 0.3 | — | 0.3 |
| Employee\tbenefit\tplan |  |  |  |  |  |  |  |  |  |
| liability\tadjustments,\tnet\tof |  |  |  |  |  |  |  |  |  |
| tax\tof\t$1.2 | — | — | — | — | — | — | (1.9) | — | (1.9) |
| Cash\tdividends\tdeclared | — | — | — | (404.3) | — | — | — | — | (404.3) |
| Issuances\tof\tcommon\tstock | 2.8 | — | 74.3 | — | — | — | — | — | 74.3 |
| Stock-based\tcompensation | — | — | 21.2 | (2.3) | — | — | — | — | 18.9 |
| Purchase\tof\tcommon\tstock\tfor\ntreasury | — | — | — | — | (9.9) | (408.4) | — | — | (408.4) |
| Shares\treturned\tto\tunissued\tstatus | (71.2) | (0.6) | (2,294.7) |  | 71.2 | 2,295.3 | — | — | — |
| Distributions\tpaid\tto\tnoncontrolling\ninterests | — | — | — | — | — | — | — | (0.5) | (0.5) |
| Balance\tas\tof\tDecember\t31,\t2015 | 346.0 | 3.5 | $4,677.7 | $3,138.3 | (0.4) | $(14.9) | $(30.5) | $2.5 | $7,776.6 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Cash\tprovided\tby\toperating\tactivities: |  |  |  |
| Net\tincome | $750.4 | $547.9 | $589.1 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation,\tamortization,\tdepletion\tand\taccretion | 1,050.0 | 984.9 | 954.0 |
| Non-cash\tinterest\texpense | 47.1 | 44.8 | 47.5 |
| Restructuring\trelated\tcharges | — | 1.8 | 8.6 |
| Stock-based\tcompensation | 18.9 | 17.4 | 19.2 |
| Deferred\ttax\tprovision\t(benefit) | 116.7 | (9.0) | (38.5) |
| Provision\tfor\tdoubtful\taccounts,\tnet\tof\tadjustments | 22.7 | 22.6 | 16.1 |
| Loss\ton\textinguishment\tof\tdebt | — | 1.4 | 2.1 |
| Gain\ton\tdisposition\tof\tassets,\tnet\tand\tasset\timpairments | (1.6) | (14.7) | (11.0) |
| Withdrawal\tliability\t-\tCentral\tStates\tPension\tFund\tand\tOther\tFunds | 4.5 | — | 140.7 |
| Environmental\tadjustments | (1.6) | 233.2 | 83.7 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock-based\tcompensation\tactivity\tand\tother\tnon-cash\titems | (10.7) | (4.9) | (6.7) |
| Change\tin\tassets\tand\tliabilities,\tnet\tof\teffects\tfrom\tbusiness\tacquisitions\tand\tdivestitures: |  |  |  |
| Accounts\treceivable | (15.7) | (54.3) | (61.6) |
| Prepaid\texpenses\tand\tother\tassets | (8.7) | (41.3) | (11.4) |
| Accounts\tpayable | 35.6 | 3.3 | 37.9 |
| Restructuring\texpenditures | — | (1.3) | (15.8) |
| Capping,\tclosure\tand\tpost-closure\texpenditures | (88.4) | (54.6) | (85.6) |
| Remediation\texpenditures | (80.0) | (99.4) | (122.5) |
| Withdrawal\texpenditures\t-\tCentral\tStates\tPension\tFund | (153.5) | (15.9) | — |
| Other\tliabilities | (6.0) | (32.1) | 2.4 |
| Cash\tprovided\tby\toperating\tactivities | 1,679.7 | 1,529.8 | 1,548.2 |
| Cash\tused\tin\tinvesting\tactivities: |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | (945.6) | (862.5) | (880.8) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 21.2 | 35.7 | 23.9 |
| Cash\tused\tin\tbusiness\tacquisitions,\tnet\tof\tcash\tacquired | (572.7) | (195.7) | (68.7) |
| Cash\tproceeds\tfrom\tdivestitures,\tnet\tof\tcash\tdivested | — | — | 2.7 |
| Change\tin\trestricted\tcash\tand\tmarketable\tsecurities | 15.3 | 70.8 | (5.5) |
| Other | (1.0) | (8.1) | (5.5) |
| Cash\tused\tin\tinvesting\tactivities | (1,482.8) | (959.8) | (933.9) |
| Cash\tused\tin\tfinancing\tactivities: |  |  |  |
| Proceeds\tfrom\tnotes\tpayable\tand\tlong-term\tdebt | 918.4 | 1,383.3 | 1,219.2 |
| Proceeds\tfrom\tissuance\tof\tsenior\tnotes,\tnet\tof\tdiscount | 497.9 | — | — |
| Payments\tof\tnotes\tpayable\tand\tlong-term\tdebt | (915.7) | (1,398.4) | (1,278.1) |
| Fees\tpaid\tto\tissue\tsenior\tnotes\tand\tretire\tcertain\thedging\trelationships | (3.2) | (4.0) | (1.6) |
| Issuances\tof\tcommon\tstock | 65.9 | 88.6 | 150.8 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock-based\tcompensation\tactivity | 8.5 | 4.3 | 3.8 |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (404.7) | (400.6) | (214.1) |
| Cash\tdividends\tpaid | (399.3) | (378.6) | (348.5) |
| Distributions\tpaid\tto\tnoncontrolling\tinterests | (0.5) | (0.4) | (0.2) |
| Other | (7.0) | (2.3) | 0.1 |
| Cash\tused\tin\tfinancing\tactivities | (239.7) | (708.1) | (468.6) |
| (Decrease)\tincrease\tin\tcash\tand\tcash\tequivalents | (42.8) | (138.1) | 145.7 |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 75.2 | 213.3 | 67.6 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tyear | $32.4 | $75.2 | $213.3 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# PRESENTATION

Republic	Services,	Inc.,	a	Delaware	corporation,	and	its	consolidated	subsidiaries	(also	referred	to	collectively	as	Republic,	the	Company,	we,	us,	or	our),	is	the	second largest	provider	of	non-hazardous	solid	waste	collection,	transfer,	recycling,	disposal	and	energy	services	in	the	United	States,	as	measured	by	revenue.	During	2015,	we managed	and	evaluated	our	operations	through	three	geographic	regions	-	East,	Central	and	West,	which	we	identified	as	our	reportable	segments.

The	consolidated	financial	statements	include	the	accounts	of	Republic	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 either	the	equity	method	or	cost	method	of	accounting,	as	appropriate.	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

In	preparing	our	financial	statements,	we	make	numerous	estimates	and	assumptions	that	affect	the	amounts	reported	in	these	financial	statements	and	accompanying notes.	We	must	make	these	estimates	and	assumptions	because	certain	information	we	use	is	dependent	on	future	events,	cannot	be	calculated	with	a	high	degree	of precision	from	data	available	or	simply	cannot	be	readily	calculated	based	on	generally	accepted	methodologies.	In	preparing	our	financial	statements,	the	more	critical and	subjective	areas	that	deal	with	the	greatest	amount	of	uncertainty	relate	to	our	accounting	for	our	long-lived	assets,	including	recoverability,	landfill	development costs,	and	final	capping,	closure	and	post-closure	costs;	our	valuation	allowances	for	accounts	receivable	and	deferred	tax	assets;	our	liabilities	for	potential	litigation, claims	and	assessments;	our	liabilities	for	environmental	remediation,	multiemployer	pension	plans,	employee	benefit	plans,	deferred	taxes,	uncertain	tax	positions,	and insurance	reserves;	and	our	estimates	of	the	fair	values	of	assets	acquired	and	liabilities	assumed	in	any	acquisition.	Each	of	these	items	is	discussed	in	more	detail elsewhere	in	these	Notes	to	Consolidated	Financial	Statements.	Our	actual	results	may	differ	significantly	from	our	estimates.

We	consider	liquid	investments	with	a	maturity	at	the	date	of	acquisition	of	three	months	or	less	to	be	cash	equivalents.

We	may	have	net	book	credit	balances	in	our	primary	disbursement	accounts	at	the	end	of	a	reporting	period.	We	classify	such	credit	balances	as	accounts	payable	in our	consolidated	balance	sheets	as	checks	presented	for	payment	to	these	accounts	are	not	payable	by	our	banks	under	overdraft	arrangements,	and,	therefore,	do	not represent	short-term	borrowings.	As	of	December	31,	2015	and	2014,	there	were	net	book	credit	balances	of	$84.4	million	and	$36.4	million,	respectively,	in	our	primary disbursement	accounts	that	were	classified	as	accounts	payable	on	our	consolidated	balance	sheets.

# Concentration	of	Credit	Risk

Financial	instruments	that	potentially	subject	us	to	concentrations	of	credit	risk	consist	of	cash	and	cash	equivalents,	trade	accounts	receivable	and	derivative instruments.	We	place	our	cash	and	cash	equivalents	with	high	quality	financial	institutions.	Such	balances	may	be	in	excess	of	FDIC	insured	limits.	To	manage	the related	credit	exposure,	we	continually	monitor	the	credit	worthiness	of	the	financial	institutions	where	we	have	deposits.	Concentrations	of	credit	risk	with	respect	to trade	accounts	receivable	are	limited	due	to	the	wide	variety	of	customers	and	markets	in	which	we	provide	services,	as	well	as	the	dispersion	of	our	operations	across many	geographic	areas.	We	provide	services	to	small-container	commercial,	large-container	industrial,	municipal	and	residential	customers	in	the	United	States	and Puerto	Rico.	We	perform	ongoing	credit	evaluations	of	our	customers,	but	generally	do	not	require	collateral	to	support	customer	receivables.	We	establish	an	allowance for	doubtful	accounts	based	on	various	factors	including	the	credit	risk	of	specific	customers,	age	of	receivables	outstanding,	historical	trends,	economic	conditions	and other	information.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS—(Continued)

# Accounts	Receivable,	Net

Accounts	receivable	represent	receivables	from	customers	for	collection,	transfer,	recycling,	disposal,	energy	services	and	other	services.	Our	receivables	are	recorded when	billed	or	when	the	related	revenue	is	earned,	if	earlier,	and	represent	claims	against	third	parties	that	will	be	settled	in	cash.	The	carrying	value	of	our	receivables, net	of	the	allowance	for	doubtful	accounts	and	customer	credits,	represents	their	estimated	net	realizable	value.	Provisions	for	doubtful	accounts	are	evaluated	on	a monthly	basis	and	are	recorded	based	on	our	historical	collection	experience,	the	age	of	the	receivables,	specific	customer	information	and	economic	conditions.	We also	review	outstanding	balances	on	an	account-specific	basis.	In	general,	reserves	are	provided	for	accounts	receivable	in	excess	of	90	days	outstanding.	Past	due receivable	balances	are	written-off	when	our	collection	efforts	have	been	unsuccessful	in	collecting	amounts	due.

The	following	table	reflects	the	activity	in	our	allowance	for	doubtful	accounts	for	the	years	ended	December	31:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $38.9 | $38.3 | $45.3 |
| Additions\tcharged\tto\texpense | 22.7 | 22.6 | 16.1 |
| Accounts\twritten-off | (14.9) | (22.0) | (23.1) |
| Balance\tat\tend\tof\tyear | $46.7 | $38.9 | $38.3 |

# Restricted	Cash	and	Marketable	Securities

As	of	December	31,	2015,	we	had	$100.3	million	of	restricted	cash	and	marketable	securities.	We	obtain	funds	through	the	issuance	of	tax-exempt	bonds	for	the	purpose of	financing	qualifying	expenditures	at	our	landfills,	transfer	stations,	collection	and	recycling	centers.	The	funds	are	deposited	directly	into	trust	accounts	by	the bonding	authorities	at	the	time	of	issuance.	As	the	use	of	these	funds	is	contractually	restricted,	and	we	do	not	have	the	ability	to	use	these	funds	for	general	operating purposes,	they	are	classified	as	restricted	cash	and	marketable	securities	in	our	consolidated	balance	sheets.

In	the	normal	course	of	business,	we	may	be	required	to	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	in	connection	with municipal	residential	collection	contracts,	closure	or	post-closure	of	landfills,	environmental	remediation,	environmental	permits,	and	business	licenses	and	permits	as	a financial	guarantee	of	our	performance.	At	several	of	our	landfills,	we	satisfy	financial	assurance	requirements	by	depositing	cash	into	restricted	trust	funds	or	escrow accounts.

We	record	property	and	equipment	at	cost.	Expenditures	for	major	additions	and	improvements	to	facilities	are	capitalized,	while	maintenance	and	repairs	are	charged	to expense	as	incurred.	When	property	is	retired	or	otherwise	disposed,	the	related	cost	and	accumulated	depreciation	are	removed	from	the	accounts	and	any	resulting	gain or	loss	is	reflected	in	the	consolidated	statements	of	income.

We	revise	the	estimated	useful	lives	of	property	and	equipment	acquired	through	business	acquisitions	to	conform	with	our	policies.	We	depreciate	assets	over	their estimated	useful	lives	using	the	straight-line	method.	We	assume	no	salvage	value	for	our	depreciable	property	and	equipment.	The	estimated	useful	lives	of	our	property and	equipment	are	as	follows:

| Buildings	and	improvements | 7	-	40	years |
| :--- | :--- |
| Vehicles | 5\t-\t12\tyears |
| Landfill\tequipment | 5\t-\t7\tyears |
| Other\tequipment | 3\t-\t20\tyears |
| Furniture\tand\tfixtures | 10\tyears |

Landfill	development	costs	also	are	included	in	property	and	equipment.	Landfill	development	costs	include	direct	costs	incurred	to	obtain	landfill	permits	and	direct costs	incurred	to	acquire,	construct	and	develop	sites,	as	well	as	final	capping,	closure	and	post-closure	assets.	These	costs	are	amortized	or	depleted	based	on	consumed airspace.	All	indirect	landfill	development	costs	are	expensed	as	incurred.	For	additional	information,	see	Note	8,	Landfill	and	Environmental	Costs.

# Capitalized	Interest

We	capitalize	interest	on	landfill	cell	construction	and	other	construction	projects	if	they	meet	the	following	criteria:

•Total	construction	costs	are	$50,000	or	greater;

•The	construction	phase	is	one	month	or	longer;	and

•The	assets	have	a	useful	life	of	one	year	or

longer.

Interest	is	capitalized	on	qualified	assets	while	they	undergo	activities	to	ready	them	for	their	intended	use.	Capitalization	of	interest	ceases	once	an	asset	is	placed	into service	or	if	construction	activity	is	suspended	for	more	than	a	brief	period	of	time.	Our	interest	capitalization	rate	is	based	on	our	weighted	average	cost	of	indebtedness. Interest	capitalized	was	$6.8	million,	$6.4	million	and	$7.3	million	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

# Fair	Value	of	Financial	Instruments

Our	financial	instruments	include	cash	and	cash	equivalents,	restricted	cash	and	marketable	securities,	fuel,	commodity	and	interest	rate	hedges,	long-term	debt,	and assets	in	our	defined	benefit	pension	plan.	Accounting	standards	include	disclosure	requirements	around	fair	values	used	for	certain	financial	instruments	and	establish	a fair	value	hierarchy.	The	hierarchy	prioritizes	valuation	inputs	into	three	levels	based	on	the	extent	to	which	inputs	used	in	measuring	fair	value	are	observable	in	the market.		Each	fair	value	measurement	is	reported	in	one	of	three	levels:

•Level	1	–	inputs	are	based	upon	unadjusted	quoted	prices	for	identical	instruments	traded	in	active

markets.

•Level	2	–	inputs	are	based	upon	quoted	prices	for	similar	instruments	in	active	markets,	quoted	prices	for	identical	or	similar	instruments	in	markets	that	are	not active,	and	model-based	valuation	techniques	for	which	all	significant	assumptions	are	observable	in	the	market	or	can	be	corroborated	by	observable	market data	for	substantially	the	full	term	of	the	assets	or	liabilities.

•Level	3	–	inputs	are	generally	unobservable	and	typically	reflect	management's	estimates	of	assumptions	that	market	participants	would	use	in	pricing	the	asset or	liability.	The	fair	values	are	therefore	determined	using	model-based	techniques	that	include	option	pricing	models,	discounted	cash	flow	models,	and	similar techniques.

See	Note	11,	Employee	Benefit	Plans,	and	Note	16,	Financial	Instruments,	for	fair	value	disclosures	related	to	our	defined	benefit	pension	plan	investments	and financial	instruments,	respectively.

# Investments	Other	Than	Derivatives

Investments	other	than	derivatives	primarily	include	money	market	funds,	common	stock,	mutual	funds,	real	estate	investment	trusts,	U.S.	government	and	agency securities,	municipal	and	corporate	bonds,	and	foreign	government	bonds.	In	general,	and	where	applicable,	we	use	quoted	prices	in	active	markets	for	identical	assets	or liabilities	to	determine	fair	value.		This	pricing	methodology	applies	to	our	Level	1	investments,	such	as	money	market	funds,	common	stock	and	certain	mutual	funds. If	quoted	prices	in	active	markets	for	identical	assets	or	liabilities	are	not	available	to	determine	fair	value,	then	we	use	quoted	prices	for	similar	assets	and	liabilities	or inputs	other	than	the	quoted	prices	that	are	observable	either	directly	or	indirectly.		These	investments	are	included	in	Level	2	and	consist	primarily	of	corporate	bonds, foreign	government	bonds,	real	estate	investment	trusts	and	certain	agency	securities.

# Derivative	Financial	Instruments

We	use	derivative	financial	instruments	to	manage	our	risk	associated	with	changing	interest	rates	and	changing	prices	for	commodities	we	frequently	purchase	or	sell by	creating	offsetting	market	exposures.	We	use	interest	rate	swap	agreements	to	manage	risk	associated	with	fluctuations	in	interest	rates.	We	have	entered	into	multiple agreements	designated	as	cash	flow	hedges	to	mitigate	some	of	our	exposure	to	changes	in	diesel	fuel	prices	and	prices	of	certain	recycling	commodities.

All	derivatives	are	measured	at	fair	value	and	recognized	in	the	balance	sheet	as	assets	or	liabilities,	as	appropriate.	For	derivatives	designated	as	cash	flow	hedges, changes	in	fair	value	of	the	effective	portions	of	derivative	instruments	are	reported	in	stockholders'	equity	as	components	of	other	comprehensive	income	until	the forecasted	transaction	occurs	or	is	not	probable	of	occurring.	When	the	forecasted	transaction	occurs	or	is	not	probable	of	occurring,	the	realized	net	gain	or	loss	is	then recognized	in	the	consolidated	statements	of	income.	Changes	in	fair	value	of	the	ineffective	portions	of	derivative	instruments	are	recognized	currently	in	earnings.

The	fair	values	of	our	diesel	fuel	and	recycling	commodity	hedges	are	determined	using	standard	valuation	models	with	assumptions	about	prices	and	other	relevant information	based	on	those	observed	in	the	underlying	markets	(Level	2	in	the	fair

value	hierarchy).	The	estimated	fair	values	of	derivatives	used	to	hedge	risks	fluctuate	over	time	and	should	be	viewed	in	relation	to	the	underlying	hedged	transactions.

# Landfill	and	Environmental	Costs

# Life	Cycle	Accounting

We	use	life-cycle	accounting	and	the	units-of-consumption	method	to	recognize	certain	landfill	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.

Costs	and	airspace	estimates	are	developed	at	least	annually	by	engineers.	We	use	these	estimates	to	adjust	the	rates	we	use	to	deplete	capitalized	costs.	Changes	in	these estimates	primarily	relate	to	changes	in	available	airspace,	inflation	and	applicable	regulations.	Changes	in	available	airspace	include,	but	are	not	limited	to,	changes	due to	the	addition	of	airspace	lying	in	probable	expansion	areas,	airspace	consumed	and	changes	in	engineering	estimates.

# Probable	Expansion	Airspace

We	classify	landfill	disposal	capacity	as	either	permitted	(having	received	the	final	permit	from	the	applicable	regulatory	agency)	or	as	probable	expansion	airspace. Before	airspace	included	in	an	expansion	area	is	determined	to	be	probable	expansion	airspace	and,	therefore,	is	included	in	our	calculation	of	total	available	disposal capacity,	all	of	the	following	criteria	must	be	met:

•We	believe	it	is	likely	the	expansion	permit	will	be

received.

Upon	meeting	our	expansion	criteria,	the	rates	used	at	each	applicable	landfill	to	expense	costs	to	acquire,	construct,	cap,	close	and	maintain	a	site	during	the	post- closure	period	are	adjusted	to	include	both	the	probable	expansion	airspace	and	the	additional	costs	to	be	capitalized	or	accrued	associated	with	that	expansion	airspace.

We	have	identified	three	steps	that	landfills	generally	follow	to	obtain	expansion	permits.	These	steps	are	as	follows:

•Obtaining	approval	from	local

authorities;

•Submitting	a	permit	application	to	state

authorities;	and

•Obtaining	permit	approval	from	state

We	continually	monitor	our	progress	toward	obtaining	permits	for	each	of	our	sites	with	probable	airspace.	If	we	determine	that	a	landfill	expansion	area	no	longer	meets our	criteria,	the	probable	expansion	airspace	is	removed	from	the	landfill's	total	available	capacity	and	the	rates	used	at	the	landfill	to	deplete	costs	to	acquire,	construct, cap,	close	and	maintain	a	site	during	the	post-closure	period	are	adjusted	accordingly.	In	addition,	any	amounts	capitalized	for	the	probable	expansion	airspace	are charged	to	expense	in	the	period	in	which	it	is	determined	that	the	criteria	are	no	longer	met.

# Capitalized	Landfill	Costs

Capitalized	landfill	costs	include	expenditures	for	land,	permitting,	cell	construction	and	environmental	structures.	Capitalized	permitting	and	cell	construction	costs	are limited	to	direct	costs	relating	to	these	activities,	including	legal,	engineering	and	construction	costs	associated	with	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	the	development	of	the	site.	Interest	is	capitalized	on	landfill	construction	projects	while	the	assets	are	undergoing	activities	to	ready	them	for	their	intended	use. Capitalized	landfill	costs	also	include	final	capping,	closure	and	post-closure	assets	and	are	depleted	as	airspace	is	consumed	using	the	units-of-consumption	method.

Costs	related	to	acquiring	land,	excluding	the	estimated	residual	value	of	unpermitted,	non-buffer	land,	and	costs	related	to	permitting	and	cell	construction	are	depleted as	airspace	is	consumed	using	the	units-of-consumption	method.

Capitalized	landfill	costs	also	may	include	an	allocation	of	purchase	price	paid	for	landfills.	For	landfills	purchased	as	part	of	a	group	of	assets,	the	purchase	price assigned	to	the	landfill	is	determined	based	on	the	estimated	fair	value	of	the	landfill.	If	the

landfill	meets	our	expansion	criteria,	the	purchase	price	is	further	allocated	between	permitted	airspace	and	expansion	airspace	based	on	the	respective	ratios	to	total available	airspace.	Landfill	purchase	price	is	amortized	using	the	units-of-consumption	method	over	the	total	available	airspace,	including	probable	expansion	airspace, where	appropriate.

# Final	capping

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.	The permit	requirements	are	based	on	the	Subtitle	C	and	Subtitle	D	regulations	of	the	Resource	Conservation	and	Recovery	Act,	as	implemented	and	applied	on	a	state-by- state	basis.	We	define	final	capping	as	activities	required	to	permanently	cover	a	portion	of	a	landfill	that	has	been	completely	filled	with	waste.	Final	capping	typically includes	installing	flexible	membrane	and	geosynthetic	clay	liners,	drainage	and	compact	soil	layers,	and	topsoil,	and	is	constructed	over	an	area	of	the	landfill	where total	airspace	capacity	has	been	consumed	and	waste	disposal	operations	have	ceased.	These	final	capping	activities	occur	in	phases	as	needed	throughout	the	operating life	of	a	landfill	as	specific	areas	are	filled	to	capacity	and	the	final	elevation	for	that	specific	area	is	reached	in	accordance	with	the	provisions	of	the	operating	permit. We	consider	final	capping	events	to	be	discrete	activities	that	are	recognized	as	asset	retirement	obligations	separately	from	other	closure	and	post-closure	obligations. As	a	result,	we	use	a	separate	rate	per	ton	for	recognizing	the	principal	amount	of	the	liability	and	related	asset	associated	with	each	capping	event.	We	amortize	the	asset recorded	pursuant	to	this	approach	as	waste	volume	related	to	the	capacity	covered	by	the	capping	event	is	placed	into	the	landfill	based	on	the	consumption	of	cubic yards	of	available	airspace.

# Closure	and	post-closure

Closure	and	post-closure	activities	occur	after	the	entire	landfill	ceases	to	accept	waste	and	closes.	These	activities	involve	methane	gas	control,	leachate	management and	groundwater	monitoring,	surface	water	monitoring	and	control,	and	other	operational	and	maintenance	activities	that	occur	after	the	site	ceases	to	accept	waste. Obligations	associated	with	monitoring	and	controlling	methane	gas	migration	and	emissions	are	set	forth	in	applicable	landfill	permits	and	these	requirements	are	based on	the	provisions	of	the	Clean	Air	Act.	The	post-closure	period	generally	runs	for	30	years	after	final	site	closure	for	municipal	solid	waste	landfills	and	a	shorter	period for	construction	and	demolition	landfills	and	inert	landfills.	We	recognize	asset	retirement	obligations	and	the	related	amortization	expense	for	closure	and	post-closure (excluding	obligations	for	final	capping)	using	the	units-of-consumption	method	over	the	total	remaining	capacity	of	the	landfill,	including	probable	expansion	airspace.

# Estimated	future	expenditures

Estimates	of	future	expenditures	for	final	capping,	closure	and	post-closure	are	developed	at	least	annually	by	engineers.	Management	reviews	these	estimates	and	our operating	and	accounting	personnel	use	them	to	adjust	the	rates	used	to	capitalize	and	amortize	these	costs.	These	estimates	involve	projections	of	costs	that	will	be incurred	during	the	remaining	life	of	the	landfill	for	final	capping	activities,	after	the	landfill	ceases	operations	and	during	the	legally	required	post-closure	monitoring period.	We	currently	retain	post-closure	responsibility	for	126	closed	landfills.

# Fair	value	measurements

In	general,	we	engage	third	parties	to	perform	most	of	our	final	capping,	closure	and	post-closure	activities.	Accordingly,	the	fair	value	of	these	activities	is	based	on quoted	and	actual	prices	paid	for	similar	work.	We	also	perform	some	of	our	final	capping,	closure	and	post-closure	activities	using	internal	resources.	Where	we	expect internal	resources	to	be	used	to	fulfill	an	asset	retirement	obligation,	we	add	a	profit	margin	to	the	estimated	cost	of	such	services	to	better	reflect	their	fair	value.	If	we perform	these	services	internally,	the	added	profit	margin	is	recognized	as	a	component	of	operating	income	in	the	period	the	obligation	is	settled.

Our	estimates	of	costs	to	discharge	asset	retirement	obligations	for	landfills	are	developed	in	today's	dollars.	These	costs	are	inflated	each	year	to	reflect	a	normal escalation	of	prices	up	to	the	year	they	are	expected	to	be	paid.	We	use	a	2.0%	inflation	rate,	which	is	based	on	the	ten-year	historical	moving	average	increase	of	the U.S.	Consumer	Price	Index,	and	is	the	rate	used	by	most	waste	industry	participants.

These	estimated	costs	are	then	discounted	to	their	present	values	using	a	credit-adjusted,	risk-free	interest	rate.	The	credit-adjusted,	risk-free	interest	rate	we	used	for liability	recognition	was	4.75%	and	4.50%	for	the	years	ended	December	31,	2015	and	2014,	respectively,	which	was	based	on	the	estimated	all-in	yield	we	would	have needed	to	offer	to	sell	thirty-year	debt	in	the	public	market.	However,	as	part	of	the	initial	application	of	purchase	accounting,	our	capping,	closure	and	post-closure

obligations	acquired	from	Allied	Waste	Industries,	Inc.	(Allied)	were	recorded	at	their	fair	values	as	of	the	acquisition	date,	and	were	discounted	using	a	rate	of	9.75% due	to	market	conditions	at	the	time	of	the	acquisition.

# Changes	in	assets	retirement	obligations

A	liability	for	an	asset	retirement	obligation	is	recognized	in	the	period	in	which	it	is	incurred	and	is	initially	measured	at	fair	value.	The	offset	to	the	liability	is capitalized	as	part	of	the	carrying	amount	of	the	related	long-lived	asset.	Changes	in	the	liabilities	due	to	revisions	to	estimated	future	cash	flows	are	recognized	by increasing	or	decreasing	the	liabilities	with	the	offsets	adjusting	the	carrying	amounts	of	the	related	long-lived	assets,	and	may	also	require	immediate	adjustments	to amortization	expense	in	the	consolidated	statement	of	income.	Upward	revisions	in	the	amount	of	undiscounted	estimated	cash	flows	used	to	record	a	liability	are discounted	using	the	credit-adjusted,	risk-free	interest	rate	in	effect	at	the	time	of	the	change.	Downward	revisions	in	the	amount	of	undiscounted	estimated	cash	flows used	to	record	a	liability	are	discounted	using	the	credit-adjusted,	risk-free	rate	that	existed	when	the	original	liability	was	recognized.

Changes	in	asset	retirement	obligations	due	to	the	passage	of	time	are	measured	by	recognizing	accretion	expense	in	a	manner	that	results	in	a	constant	effective	interest rate	being	applied	to	the	average	carrying	amount	of	the	liability.	The	effective	interest	rate	used	to	calculate	accretion	expense	is	our	credit-adjusted,	risk-free	interest rate	in	effect	at	the	time	the	liabilities	were	recorded.

We	review	our	calculations	with	respect	to	landfill	asset	retirement	obligations	at	least	annually.	If	there	is	a	significant	change	in	the	facts	and	circumstances	related	to	a landfill	during	the	year,	we	will	review	our	calculations	for	the	landfill	as	soon	as	practical	after	the	change	has	occurred.

# Landfill	operating	expenses

Costs	associated	with	daily	maintenance	activities	and	environmental	compliance	during	the	operating	life	of	the	landfill	are	expensed	as	incurred.	These	costs	include, among	other	things,	leachate	treatment	and	disposal,	methane	gas	and	groundwater	monitoring	and	systems	maintenance,	interim	cap	maintenance,	costs	associated	with the	application	of	daily	cover	materials,	and	the	legal	and	administrative	costs	of	ongoing	environmental	compliance.

# Business	Combinations

We	acquire	businesses	in	the	waste	industry,	including	non-hazardous	waste	collection,	transfer,	recycling,	disposal	and	energy	services	operations,	as	part	of	our	growth strategy.	Businesses	are	included	in	the	consolidated	financial	statements	from	the	date	of	acquisition.

We	recognize,	separately	from	goodwill,	the	identifiable	assets	acquired	and	liabilities	assumed	at	their	estimated	acquisition-date	fair	values.	We	measure	and recognize	goodwill	as	of	the	acquisition	date	as	the	excess	of:	(1)	the	aggregate	of	the	fair	value	of	consideration	transferred,	the	fair	value	of	any	noncontrolling	interest in	the	acquiree	(if	any)	and	the	acquisition	date	fair	value	of	our	previously	held	equity	interest	in	the	acquiree	(if	any),	over	(2)	the	fair	value	of	assets	acquired	and liabilities	assumed.	If	information	about	facts	and	circumstances	existing	as	of	the	acquisition	date	is	incomplete	by	the	end	of	the	reporting	period	in	which	a	business combination	occurs,	we	report	provisional	amounts	for	the	items	for	which	the	accounting	is	incomplete.	The	measurement	or	allocation	period	ends	once	we	receive	the information	we	are	seeking;	however,	this	period	will	not	exceed	one	year	from	the	acquisition	date.	Any	material	adjustments	recognized	during	the	measurement period	will	be	reflected	retrospectively	in	the	consolidated	financial	statements	of	the	subsequent	period.	We	recognize	third-party	transaction	related	costs	as	expense currently	in	the	period	in	which	they	are	incurred.

# Goodwill	and	Other	Intangible	Assets

Significant	estimates	used	in	our	fair	value	calculation	using	discounted	future	cash	flows	include:	(1)	estimates	of	future	revenue	and	expense	growth	by	reporting	unit, which	we	estimate	to	range	from	3%	to	5%	annually;	(2)	future	estimated	effective	tax	rates,	which	we	estimate	to	be	40%;	(3)	future	estimated	capital	expenditures	and future	required	investments	in	working	capital;	(4)	estimated	discount	rates,	which	we	estimate	to	range	between	6%	and	8%;	and	(5)	the	future	terminal	value	of	the reporting	unit,	which	is	based	on	its	ability	to	exist	into	perpetuity.	Significant	estimates	used	in	the	fair	value	calculation	utilizing	market	value	multiples	include: (a)	estimated	future	growth	potential	of	the	reporting	unit;	(b)	estimated	multiples	of	revenue	or	earnings	a	willing	buyer	is	likely	to	pay;	and	(c)	the	estimated	control premium	a	willing	buyer	is	likely	to	pay.

In	preparing	our	annual	test	for	impairment	as	of	October	1,	2015,	we	determined	that	our	indicated	fair	value	of	total	invested	capital	exceeded	our	total	market capitalization.	We	believe	one	of	the	primary	reconciling	differences	between	the	indicated	fair	value	of	total	invested	capital	and	our	total	market	capitalization	is	due	to a	control	premium.	We	believe	the	control	premium	represents	the	value	a	market	participant	could	extract	as	savings	or	synergies	by	obtaining	control.

Other	intangible	assets	include	values	assigned	to	customer	relationships,	franchise	agreements,	other	municipal	agreements,	non-compete	agreements	and	trade	names and	are	amortized	generally	on	a	straight-line	basis	over	periods	ranging	from	1	to	20	years.

# Asset	Impairments

We	continually	consider	whether	events	or	changes	in	circumstances	have	occurred	that	may	warrant	revision	of	the	estimated	useful	lives	of	our	long-lived	assets	(other than	goodwill)	or	whether	the	remaining	balances	of	those	assets	should	be	evaluated	for	possible	impairment.	Long-lived	assets	include,	for	example,	capitalized landfill	costs,	other	property	and	equipment,	and	identifiable	intangible	assets.	Events	or	changes	in	circumstances	that	may	indicate	that	an	asset	may	be	impaired include	the	following:

•A	significant	decrease	in	the	market	price	of	an	asset	or	asset

group;

•A	significant	adverse	change	in	the	extent	or	manner	in	which	an	asset	or	asset	group	is	being	used	or	in	its	physical condition;

•A	significant	adverse	change	in	legal	factors	or	in	the	business	climate	that	could	affect	the	value	of	an	asset	or	asset	group,	including	an	adverse	action	or assessment	by	a	regulator;

•An	accumulation	of	costs	significantly	in	excess	of	the	amount	originally	expected	for	the	acquisition	or	construction	of	a	long-lived asset;

•A	current	period	operating	or	cash	flow	loss	combined	with	a	history	of	operating	or	cash	flow	losses	or	a	projection	or	forecast	that	demonstrates	continuing losses	associated	with	the	use	of	a	long-lived	asset	or	asset	group;

•A	current	expectation	that,	more	likely	than	not,	a	long-lived	asset	or	asset	group	will	be	sold	or	otherwise	disposed	of	significantly	before	the	end	of	its previously	estimated	useful	life;	or

•An	impairment	of	goodwill	at	a	reporting

unit.

There	are	certain	indicators	listed	above	that	require	significant	judgment	and	understanding	of	the	waste	industry	when	applied	to	landfill	development	or	expansion. For	example,	a	regulator	may	initially	deny	a	landfill	expansion	permit	application	though	the	expansion	permit	is	ultimately	granted.	In	addition,	management	may periodically	divert	waste	from	one	landfill	to	another	to	conserve	remaining	permitted	landfill	airspace.	Therefore,	certain	events	could	occur	in	the	ordinary	course	of business	and	not	necessarily	be	considered	indicators	of	impairment	due	to	the	unique	nature	of	the	waste	industry.

If	indicators	of	impairment	exist,	the	asset	or	asset	group	is	reviewed	to	determine	whether	its	recoverability	is	impaired.	We	assess	the	recoverability	of	the	asset	or	asset group	by	comparing	its	carrying	value	to	an	estimate	(or	estimates)	of	its	undiscounted	future	cash	flows	over	its	remaining	life.	If	the	estimated	undiscounted	cash flows	are	not	sufficient	to	recover	the	carrying	value	of	the	asset	or	asset	group,	we	measure	an	impairment	loss	as	the	amount	by	which	the	carrying	amount	of	the	asset exceeds	its	fair	value.	The	loss	is	recorded	in	the	consolidated	statement	of	income	in	the	period	in	which	such	impairment	is	identified.	Estimating	future	cash	flows requires	significant	judgment,	and	our	projections	of	future	cash	flows	and	remaining	useful	lives	may	vary	materially	from	actual	results.

# Insurance	Reserves

Our	insurance	programs	for	workers'	compensation,	commercial	general	and	auto	liability,	environmental	and	remediation	liability,	and	employee-related	health	care benefits	are	subject	to	high	deductible	insurance	policies.	Accruals	for	insurance	reserves	are	based	on	claims	filed	and	estimates	of	claims	incurred	but	not	reported.	We consider	our	past	claims	experience,	including	both	frequency	and	settlement	amount	of	claims,	in	determining	these	estimates.	It	is	possible	that	recorded	reserves	may not	be	adequate	to	cover	the	future	payment	of	claims.	Adjustments,	if	any,	to	estimates	recorded	resulting	from	ultimate	claim	payments	will	be	reflected	in	the consolidated	statements	of	income	in	the	periods	in	which	such	adjustments	are	known.

In	general,	our	insurance	reserves	are	recorded	on	an	undiscounted	basis;	however,	the	insurance	liabilities	we	acquired	in	the	Allied	acquisition	have	been	recorded	at estimated	fair	value,	and	therefore	have	been	discounted	to	present	value	based	on	our	estimate	of	the	timing	of	the	related	cash	flows.

# Costs	Associated	with	Exit	Activities

We	record	costs	associated	with	exit	activities	such	as	employee	termination	benefits	that	represent	a	one-time	benefit	when	management	approves	and	commits	to	a plan	of	termination,	and	communicates	the	termination	arrangement	to	the	employees,	or	over	the	future	service	period,	if	any.	Other	costs	associated	with	exit	activities may	include	contract	termination	costs,	including	costs	related	to	leased	facilities	to	be	abandoned	or	subleased,	and	facility	and	employee	relocation	costs.

# Contingent	Liabilities

We	are	subject	to	various	legal	proceedings,	claims	and	regulatory	matters,	the	outcomes	of	which	are	subject	to	significant	uncertainty.	In	general,	we	determine whether	to	disclose	or	accrue	for	loss	contingencies	based	on	an	assessment	of	whether	the	risk	of	loss	is	remote,	reasonably	possible	or	probable,	and	whether	it	can	be reasonably	estimated.	We	assess	our	potential	liability	relating	to	litigation	and	regulatory	matters	based	on	information	available	to	us.	Management	develops	its assessment	based	on	an	analysis	of	possible	outcomes	under	various	strategies.	We	accrue	for	loss	contingencies	when	such	amounts	are	probable	and	reasonably estimable.	If	a	contingent	liability	is	only	reasonably	possible,	we	disclose	the	potential	range	of	the	loss,	if	estimable.	Contingent	liabilities	recorded	in	purchase accounting	are	recorded	at	their	fair	values.	These	fair	values	may	be	different	from	the	values	we	would	have	otherwise	recorded,	had	the	contingent	liability	not	been assumed	as	part	of	an	acquisition	of	a	business.

# Accumulated	Other	Comprehensive	Income

Accumulated	other	comprehensive	income	is	a	component	of	stockholders'	equity	and	includes	the	effective	portion	of	the	net	changes	in	fair	value	of	our	cash	flow hedges	that	consist	of	prices	for	diesel	fuel	and	recycled	commodities,	net	of	tax,	settlement	and	amortization	of	our	interest	rate	locks	and	certain	adjustments	to liabilities	associated	with	our	employee	defined	benefit	pension	plan	liabilities,	net	of	tax.

# Revenue	Recognition

We	generally	provide	services	under	contracts	with	municipalities	or	individual	customers.	Municipal	and	small-container	commercial	contracts	are	generally	long-term and	often	have	renewal	options.	Advance	billings	are	recorded	as	deferred	revenue,	and	revenue	is	recognized	over	the	period	services	are	provided.

We	recognize	revenue	when	all	four	of	the	following	criteria	are	met:

•Persuasive	evidence	of	an	arrangement	exists	such	as	a	service	agreement	with	a	municipality,	a	hauling	customer	or	a	disposal customer;

•Services	have	been	performed	such	as	the	collection	and	hauling	of	waste	or	the	disposal	of	waste	at	a	disposal	facility	we	own	or operate;

•The	price	of	the	services	provided	to	the	customer	is	fixed	or determinable;	and

•Collectibility	is	reasonably

assured.

We	account	for	income	taxes	under	the	asset	and	liability	method,	which	requires	the	recognition	of	deferred	tax	assets	and	liabilities	for	the	expected	future	tax consequences	of	events	that	have	been	included	in	the	financial	statements.	Under	this	method,	we	record	deferred	income	taxes	to	reflect	the	effects	of	temporary differences	between	the	carrying	amounts	of	assets	and	liabilities	and	their	tax	bases	using	enacted	tax	rates	that	we	expect	to	be	in	effect	when	the	taxes	are	actually paid	or	recovered.	The	effect	of	a	change	in	tax	rates	on	deferred	tax	assets	and	liabilities	is	recognized	in	income	in	the	period	that	includes	the	enactment	date.

We	record	net	deferred	tax	assets	to	the	extent	we	believe	these	assets	will	more	likely	than	not	be	realized.	In	making	these	determinations,	we	consider	all	available positive	and	negative	evidence,	including	scheduled	reversals	of	deferred	tax	liabilities,	tax	planning	strategies,	projected	future	taxable	income	and	recent	financial operating	results.	The	weight	given	to	the	positive	and	negative	evidence	is	commensurate	with	the	extent	such	evidence	can	be	objectively	verified.	If	we	determine	that we	would	be	able	to	realize	a	deferred	income	tax	asset	in	the	future	in	excess	of	its	net	recorded	amount,	we	would	make	an	adjustment	to	the	valuation	allowance, which	would	reduce	the	provision	for	income	taxes.

We	record	uncertain	tax	positions	in	accordance	with	ASC	740.	A	tax	benefit	from	an	uncertain	tax	position	may	be	recognized	when	it	is	more	likely	than	not	that	the position	will	be	sustained	upon	examination,	including	resolution	of	any	related	appeals	or	litigation	processes,	based	on	the	technical	merits.	Income	tax	positions	must meet	a	more-likely-than-not	recognition	threshold	at	the	effective	date	to	be	recognized.

We	recognize	interest	and	penalties	related	to	uncertain	tax	positions	in	the	provision	for	income	taxes	in	the	accompanying	consolidated	statements	of	income.	Accrued interest	and	penalties	are	included	in	other	accrued	liabilities,	deferred	income	taxes	and	other	long-term	tax	liabilities	in	the	consolidated	balance	sheets.

# Defined	Benefit	Pension	Plan

We	currently	have	one	qualified	defined	benefit	pension	plan,	the	BFI	Retirement	Plan	(the	Plan).	The	Plan	covers	certain	current	and	former	employees	of	Allied	in	the United	States,	including	some	employees	subject	to	collective	bargaining	agreements.	The	Plan's	benefit	formula	is	based	on	a	percentage	of	compensation	as	defined	in the	Plan	document.	However,	the	benefits	of	approximately	97%	of	the	current	plan	participants	were	frozen	upon	Allied's	acquisition	of	BFI	in	1999.

Our	pension	contributions	are	made	in	accordance	with	funding	standards	established	by	the	Employee	Retirement	Income	Security	Act	of	1974	and	the	Internal Revenue	Code,	as	amended	by	the	Pension	Protection	Act	of	2006.	The	Plan's	assets	have	been	invested	as	determined	by	our	Employee	Benefits	Committee.	The Employee	Benefits	Committee	reviews	and	adjusts	the	Plan's	asset	allocation	as	deemed	necessary.

The	benefit	obligation	and	associated	income	or	expense	related	to	the	Plan	are	determined	using	annually	established	assumptions	for	discount	rates,	expected	rates	of return,	mortality	rates	and	average	rates	for	compensation	increases.	We	determine	the	discount	rate	based	on	a	model	that	matches	the	timing	and	amount	of	expected benefit	payments	to	maturities	of	high	quality	bonds	priced	as	of	the	pension	plan	measurement	date.	When	that	timing	does	not	correspond	to	a	published	high-quality bond	rate,	our	model	uses	an	expected	yield	curve	to	determine	an	appropriate	current	discount	rate.	The	yields	on	the	bonds	are	used	to	derive	a	discount	rate	for	the liability.	In	developing	our	expected	rate	of	return	assumption,	we	evaluate	long-term	expected	and	historical	actual	returns	on	the	Plan	assets,	giving	consideration	to the	asset	mix	and	the	anticipated	duration	of	our	Plan	obligations.	The	average	rate	of	compensation	increase	reflects	our	expectations	of	average	pay	increases	over	the period	benefits	are	earned.	Our	assumptions	are	reviewed	annually	and	adjusted	as	deemed	necessary.

# Equity-Based	Compensation	Plans

We	recognize	equity-based	compensation	expense	on	the	estimated	grant-date	fair	value	of	stock	options	and	restricted	stock	units	issued	as	compensation	to	employees over	the	requisite	service	periods	for	each	separately	vesting	portion	of	the	award,	or	to	the	employee's	retirement-eligible	date,	if	earlier.

The	fair	value	of	each	option	on	the	date	of	grant	is	estimated	using	a	lattice	binomial	option-pricing	model	based	on	certain	valuation	assumptions.	Expected	volatility	is based	on	the	weighted	average	of	the	most	recent	one	year	volatility	and	a	historical	rolling	average	volatility	of	our	stock	over	the	expected	life	of	the	option.	The	risk- free	interest	rates	are	based	on	the	published	U.S.	Treasury	yield	curve	in	effect	at	the	time	of	the	grant	for	instruments	with	a	similar	life.	The	dividend	yield	reflects	our dividend	yield	at	the	date	of	grant.	The	expected	life	represents	the	period	that	the	stock	options	are	expected	to	be	outstanding,	taking	into	consideration	the	contractual terms	of	the	options	and	our	employees'	historical	exercise	and	post-vesting	employment	termination	behavior,	weighted	to	reflect	the	job	level	demographic	profile	of the	employees	receiving	the	option	grants.	The	estimated	forfeiture	rate	used	to	record	compensation	expense	is	based	on	historical	forfeitures	and	is	adjusted periodically	based	on	actual	results.

Compensation	expense	associated	with	our	performance	shares	that	vest	based	on	future	performance	targets	is	measured	using	the	fair	value	of	our	common	stock	at	the grant	date	for	the	stock-settled,	equity	classified	awards,	and	the	fair	value	of	our	common	stock	at	the	end	of	each	reporting	period	for	the	cash-settled,	liability classified	awards.	Compensation	expense	is	recognized	ratably	over	the	performance	period	based	on	our	estimated	achievement	of	the	established	performance	criteria. Compensation	expense	is	only	recognized	for	those	awards	that	we	expect	to	vest,	which	we	estimate	based	on	an	assessment	of	the	probability	that	the	performance criteria	will	be	achieved.

Cash	flows	resulting	from	tax	benefits	related	to	tax	deductions	in	excess	of	those	recorded	for	compensation	expense,	resulting	from	the	exercise	of	stock	options	and the	vesting	of	restricted	stock	units,	are	classified	as	cash	flows	from	financing	activities.	All	other	tax	benefits	related	to	stock	options	have	been	presented	as	a component	of	cash	flows	from	operating	activities.

# Stock	Repurchases

Share	repurchases	under	our	share	repurchase	authorization	may	be	made	through	open	market	purchases	or	privately	negotiated	transactions	at	the	current	market prices.	From	time-to-time,	the	Company	returns	treasury	shares	acquired	through	share	repurchases	to	the	status	of	authorized	but	unissued.	Our	accounting	policy	is	to deduct	the	par	value	from	common	stock	and	to	reflect	any	excess	of	cost	over	par	value	as	a	deduction	from	additional	paid-in	capital.

# Leases

We	lease	property	and	equipment	in	the	ordinary	course	of	our	business.	Our	most	significant	lease	obligations	are	for	property	and	equipment	specific	to	our	industry, including	real	property	operated	as	a	landfill	or	transfer	station	and	operating	equipment.	Our	leases	have	varying	terms.	Some	may	include	renewal	or	purchase	options, escalation	clauses,	restrictions,	penalties	or	other	obligations	that	we	consider	in	determining	minimum	lease	payments.	Leases	are	classified	as	either	operating	leases	or capital	leases,	as	appropriate.

# Operating	Leases

Many	of	our	leases	are	operating	leases.	This	classification	generally	can	be	attributed	to	either	(1)	relatively	low	fixed	minimum	lease	payments	(including,	for example,	real	property	lease	payments	that	are	not	fixed	and	vary	based	on	the	volume	of	waste	we	receive	or	process),	or	(2)	minimum	lease	terms	that	are	much	shorter than	the	assets'	economic	useful	lives.	We	expect	that,	in	the	normal	course	of	business,	our	operating	leases	will	be	renewed,	replaced	by	other	leases,	or	replaced	with fixed	asset	expenditures.	We	record	rental	expense	over	the	lease	term	as	it	becomes	payable.

# Capital	Leases

We	capitalize	assets	acquired	under	capital	leases	at	the	inception	of	each	lease	and	amortize	them	to	depreciation	expense	over	the	lesser	of	the	useful	life	of	the	asset	or the	lease	term	on	either	a	straight-line	or	a	units-of-consumption	basis,	depending	on	the	asset	leased.	We	record	the	present	value	of	the	related	lease	payments	as	a	debt obligation.	Our	capital	lease	liability	relates	primarily	to	certain	long-term	landfill	operating	agreements	that	require	minimum	lease	payments	with	offsetting	capital lease	assets	recorded	as	part	of	the	landfill	development	costs.

# Related	Party	Transactions

It	is	our	policy	that	transactions	with	related	parties	must	be	on	terms	that,	on	the	whole,	are	no	less	favorable	than	those	that	would	be	available	from	unaffiliated parties.

# New	Accounting	Pronouncements

In	May	2014,	the	Financial	Accounting	Standards	Board	(FASB)	amended	the	Accounting	Standards	Codification	and	created Topic	606,	Revenue	from	Contracts	with	Customers,	to	clarify	the	principles	for	recognizing	revenue.	In	July	2015,	the	FASB voted	to	amend	the	guidance	by	approving	a	one-year	deferral	of	the	effective	date	and	providing	the	option	to	early	adopt	the standard	on	the	original	effective	date	of	2017.	Republic	will	adopt	the	standard	beginning	January	1,	2018.	The	new	standard must	be	adopted	using	either	a	full	retrospective	approach	for	all	periods	presented	in	the	period	of	adoption	or	a	modified retrospective	approach.	We	are	currently	assessing	the	method	of	adoption	and	the	potential	impact	this	guidance	may	have	on our	consolidated	financial	statements.

In	April	2015,	the	FASB	issued	Accounting	Standards	Update	2015-03,	Interest	-	Imputation	of	Interest	(Subtopic	835-30)	-

Simplifying	the	Presentation	of	Debt	Issuance	Costs.	This	guidance	requires	that	debt	issuance	costs	related	to	a	recognized	debt	liability	be	presented	in	the	balance sheet	as	a	direct	deduction	from	the	carrying	amount	of	that	debt	liability,	consistent	with	the	presentation	of	debt	discounts.	The	standard	is	effective	for	fiscal	years beginning	after	December	15,	2015	and	interim	periods	within	those	fiscal	years.	Early	adoption	is	permitted	for	financial	statements	that	have	not	been	previously issued.	The	balance	sheet	presentation	of	Republic's	debt	issuance	costs	and	related	debt	liabilities	will	be	affected	beginning	January	1,	2016.

In	November	2015,	the	FASB	issued	Accounting	Standards	Update	(ASU)	2015-17,	Income	Taxes	(Topic	740)	-	Balance	Sheet	Classification	of	Deferred	Taxes,	which simplifies	the	presentation	of	deferred	income	taxes.	This	guidance	requires	that	deferred	tax	assets	and	liabilities	be	classified	as	noncurrent	in	the	balance	sheet.	The standard	is	effective	for	fiscal	years	beginning	after	December	15,	2016	and	interim	periods	within	those	annual	periods.	Early	adoption	is	permitted	for	financial statements	that	have	not	been	previously	issued.	We	have	elected	early	adoption	of	this	standard	on	a	prospective	basis	in	the	fourth	quarter	of	2015.	Adoption	of	this ASU	resulted	in	a	reclassification	of	our	net	current	deferred	tax	asset	to	the	net	noncurrent	deferred	tax	liability	in	our	consolidated	balance	sheet	as	of	December	31, 2015.	No	prior	periods	were

retrospectively	adjusted.	The	adoption	of	this	guidance	had	no	impact	on	our	consolidated	results	of	income	or	comprehensive	income.

# 3. BUSINESS	ACQUISITIONS

We	acquired	various	waste	businesses	during	the	years	ended	December	31,	2015	and	2014.		The	purchase	price	paid	for	these	acquisitions	and	the	allocations	of	the purchase	price	follow:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Purchase\tprice: |  |  |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | $572.7 | $195.7 |
| Contingent\tconsideration | 70.6 | — |
| Holdbacks | 5.1 | 25.4 |
| Fair\tvalue,\tfuture\tguaranteed\tpayments | — | 6.8 |
| Fair\tvalue,\tfuture\tminimum\tlease\tpayments | 1.5 | 25.2 |
| Total | $649.9 | $253.1 |
| Allocated\tas\tfollows: |  |  |
| Accounts\treceivable | 39.2 | 8.5 |
| Restricted\tcash | — | 16.8 |
| Landfill\tairspace | 173.1 | 26.6 |
| Property\tand\tequipment | 158.4 | 76.1 |
| Other\tassets | 1.8 | 5.6 |
| Accounts\tpayable | (7.1) | — |
| Future\tservice\tobligations | — | (11.0) |
| Environmental\tremediation\tliabilities | (5.3) | — |
| Closure\tand\tpost-closure\tliabilities | (27.0) | (3.2) |
| Other\tliabilities | (10.3) | (21.8) |
| Fair\tvalue\tof\ttangible\tassets\tacquired\tand\tliabilities\tassumed | 322.8 | 97.6 |
| Excess\tpurchase\tprice\tto\tbe\tallocated | $327.1 | $155.5 |
| Excess\tpurchase\tprice\tto\tbe\tallocated\tas\tfollows: |  |  |
| Other\tintangible\tassets | $14.8 | $46.8 |
| Goodwill | 312.3 | 108.7 |
| Total\tallocated | $327.1 | $155.5 |

The	purchase	price	allocations	are	preliminary	and	are	based	on	information	existing	at	the	acquisition	dates.	Accordingly,	the	purchase	price	allocations	are	subject	to change.	Substantially	all	of	the	goodwill	and	intangible	assets	recorded	for	these	acquisitions	are	deductible	for	tax	purposes.	These	acquisitions	are	not	material	to	the Company's	results	of	operations,	individually	or	in	the	aggregate.	As	a	result,	no	pro	forma	financial	information	is	provided.

In	April	2015,	we	entered	into	a	waste	management	contract	with	the	County	of	Sonoma,	California	(Sonoma).	Under	the agreement,	Sonoma	grants	us	the	exclusive	right	to	use	and	operate	the	county's	waste	management	facilities.	We	will	operate and	manage	the	Sonoma	County	Landfill	for	the	remaining	life	of	the	site,	which	we	estimate	to	be	approximately	30	years.	We also	have	assumed	all	closure	and	post-closure	obligations	for	the	site.	In	addition	to	the	landfill,	we	will	operate	five	transfer stations	and	a	gas-to-energy	plant.	By	entering	this	agreement,	we	have	effectively	obtained	control	of	the	business	through contract.	In	exchange,	we	have	agreed	to	pay	a	contingent	concession	fee	per	ton	of	waste	disposed	at	the	landfill.	The potential	undiscounted	amount	of	all	future	contingent	payments	that	we	could	be	required	to	make	under	the	agreement	is

estimated	to	be	between	approximately	$92	million	and	$180	million.	The	fair	value	of	the	contingent	consideration	was	recorded	as	a	$70.1	million	liability	as	of	the acquisition	date	and	was	determined	using	probability	assessments	of	the	expected	future	consideration	payments	over	the	remaining	useful	life	of	the	landfill,	and applying	a	discount	rate	of	4.0%.	The	fair	value	measure	is	based	on	significant	inputs	that	are	not	observable	in	the	market.	Key	assumptions	include	volume	of	annual tons	disposed	at	the	landfill,	price	paid	per	annual	ton,	and	the	discount	rate	that	represent	the	best	estimates	of	management,	which	are	subject	to	remeasurement	at	each reporting	date.	The	contingent	consideration	and	purchase	price	allocation	are	preliminary	and	are	subject	to	revision.

In	February	2015,	we	acquired	all	of	the	equity	interests	of	Tervita,	LLC	(Tervita)	in	exchange	for	a	cash	payment	of	$479.6	million.	Tervita	is	an	environmental solutions	provider	serving	oil	and	natural	gas	producers	in	the	United	States.	Tervita

provides	energy	services	to	its	diverse	customer	base	and	operates	three	types	of	waste	management	and	disposal	facilities:

treatment,	recovery	and	disposal	facilities,	engineered	landfills	and	salt	water	disposal	injection	wells.	Additionally,	Tervita	provides	closed	loop	solids	control	systems and	transportation	services.	Tervita's	assets	complement	Republic's	existing	energy	services	business,	core	competencies	and	expertise	in	waste	handling,	recovery	and disposal.	We	retained	an	independent

third-party	appraiser	to	assist	us	in	our	valuations.	Based	on	valuation	work	performed	through	December	31,	2015,	we	allocated	$109.3	million	of	the	purchase	price	to property	and	equipment,	$85.5	million	to	landfill	airspace,	and	$7.2	million	to	intangible	assets.	We	also	assumed	$6.9	million	of	closure	and	post-closure	obligations and	$5.3	million	of	environmental	remediation	liabilities.	During	the	fourth	quarter	of	2015,	we	settled	working	capital	and	other	seller-related	items	for	approximately $3	million,	which	resulted	in	a	reduction	to	our	purchase	price	and	an	allocation	of	$19.2	million	of	the	purchase	price	to	net	working	capital.	Approximately	$268 million	of	the	remaining	purchase	price	was	allocated	to	goodwill	and	represents	the	future	economic	benefits	expected	to	arise	from	other	assets	acquired	that	could	not be	individually	identified	and	separately	recognized.	The	purchase	price	allocation	is	still	preliminary	and	remains	subject	to	revision.	Adjustments	may	be	made	to	the carrying	value	of	the	assets	acquired	and	liabilities	assumed	as	additional	information	is	obtained	about	the	facts	and	circumstances	that	existed	at	the	valuation	date. The	preliminary	allocation	of	the	purchase	price	is	based	on	the	best	estimates	of	management	and	is	subject	to	revision	based	on	the	final	valuations.	These	final valuations	and	assessments	will	be	completed	in	early	2016.

In	October	2014,	we	acquired	all	of	the	shares	of	Rainbow	Disposal	Co.,	Inc.	(Rainbow)	for	$112.0	million	cash,	of	which	$16.8	million	of	the	funds	were	placed	into	an escrow	account	pursuant	to	a	holdback	arrangement	and	classified	as	restricted	cash.	We	also	assumed	a	capital	lease	agreement	with	a	fair	value	of	$25.2	million	for operational	facilities	in	Southern	California,	and	entered	into	agreements	not	to	compete,	along	with	other	restrictive	covenants,	with	key	executives.	We	allocated	$53.5 million	of	the	purchase	price	to	property	and	equipment	and	$34.8	million	to	intangible	assets.	We	also	assumed	$18.9	million	of	liabilities.	Approximately	$66	million of	the	remaining	purchase	price	was	allocated	to	goodwill	and	represents	the	future	economic	benefits	expected	to	arise	from	other	assets	acquired	that	could	not	be individually	identified	and	separately	recognized.		Rainbow's	operations	in	Southern	California	include	hauling	routes,	a	recycling	facility,	a	transfer	station,	a compressed	natural	gas	(CNG)	refueling	station,	and	a	CNG-powered	vehicle	fleet.	The	acquisition	is	not	material	to	the	Company's	results	of	operations.

In	August	2014,	we	entered	into	a	life-of-site	operating	agreement	for	the	City	of	San	Angelo	Landfill	located	in	Texas,	which	we	have	recorded	as	the	acquisition	of	a business.		Previously,	we	operated	the	site	on	behalf	of	the	City	of	San	Angelo	under	an	agreement	that	expired	in	July	2014.	Consideration	transferred	included	cash	of $10.3	million	and	future	guaranteed	payments	of	$6.8	million.	We	assumed	future	service	obligations	of	$11.0	million	and	closure	and	post-closure	obligations	of	$3.2 million.		We	allocated	$26.6	million	of	purchase	price	to	landfill	airspace	and	no	purchase	price	was	allocated	to	goodwill.

A	summary	of	property	and	equipment,	net	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Land | $425.4 | $401.3 |
| Non-depletable\tlandfill\tland | 165.6 | 162.2 |
| Landfill\tdevelopment\tcosts | 6,078.1 | 5,645.3 |
| Vehicles\tand\tequipment | 6,211.8 | 5,834.1 |
| Buildings\tand\timprovements | 1,098.6 | 1,002.3 |
| Construction-in-progress\t-\tlandfill | 191.6 | 140.8 |
| Construction-in-progress\t-\tother | 25.5 | 10.1 |
|  | $14,196.6 | $13,196.1 |
| Less:\taccumulated\tdepreciation,\tdepletion\tand\tamortization |  |  |
| Landfill\tdevelopment\tcosts | $(2,723.0) | $(2,437.4) |
| Vehicles\tand\tequipment | (3,555.0) | (3,273.3) |
| Buildings\tand\timprovements | (365.8) | (320.1) |
|  | (6,643.8) | (6,030.8) |
| Property\tand\tequipment,\tnet | $7,552.8 | $7,165.3 |

Depreciation,	amortization	and	depletion	of	property	and	equipment	was	$898.7	million,	$838.5	million	and	$806.7	million	for	the	years	ended	December	31,	2015, 2014	and	2013,	respectively.

# 5. GOODWILL	AND	OTHER	INTANGIBLE	ASSETS,	NET

# Goodwill

A	summary	of	the	activity	and	balances	in	goodwill	accounts	by	reporting	segment	follows:

|  | Balance	as	of	December<br>31,	2014 | Acquisitions | Adjustments	to<br>Acquisitions | Balance	as	of	December<br>31,	2015 |
| :--- | :--- | :--- | :--- | :--- |
| East | $3,046.0 | $16.7 | $(0.4) | $3,062.3 |
| Central | 3,279.0 | 16.2 | (0.5) | 3,294.7 |
| West | 4,505.9 | 279.4 | 3.2 | 4,788.5 |
| Total | $10,830.9 | $312.3 | $2.3 | $11,145.5 |

|  | Balance	as	of	December<br>31,	2013 | Acquisitions | Adjustments	to<br>Acquisitions | Balance	as	of	December<br>31,	2014 |
| :--- | :--- | :--- | :--- | :--- |
| East | $3,020.2 | $26.0 | $(0.2) | $3,046.0 |
| Central | 3,264.8 | 15.4 | (1.2) | 3,279.0 |
| West | 4,439.1 | 67.3 | (0.5) | 4,505.9 |
| Total | $10,724.1 | $108.7 | $(1.9) | $10,830.9 |

Adjustments	to	acquisitions	during	the	year	ended	December	31,	2015	primarily	related	to	working	capital	and	deferred	taxes,	which	were	recorded	to	goodwill	in purchase	accounting.	During	2014,	adjustments	to	acquisitions	related	to	deferred	tax	asset	adjustments	resulting	from	the	exercise	of	legacy	Allied	stock	options.

# Other	Intangible	Assets,	Net

Other	intangible	assets,	net,	include	values	assigned	to	customer	relationships,	franchise	agreements,	other	municipal	agreements,	non-compete	agreements	and	trade names,	and	are	amortized	over	periods	ranging	from	1	to	20	years.	A	summary	of	the	activity	and	balances	by	intangible	asset	type	follows:

|  | Balance	as	of<br>December	31,<br>2014 | Gross	Intangible	Assets<br>Acquisitions | Balance	as	of<br>December	31,<br>2015 | Balance	as	of<br>December	31,<br>2014 | Accumulated	Amortization<br>Additions<br>Charged<br>to	Expense | Balance	as	of<br>December	31,<br>2015 | Other	Intangible	Assets,<br>Net	as	of	December	31,<br>2015 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Customer\trelationships, |  |  |  |  |  |  |  |
| \t\t\tfranchise\tand\tother\tmunicipal |  |  |  |  |  |  |  |
| \t\t\tagreements | $641.2 | $10.4 | $651.6 | $(369.1) | $(61.9) | $(431.0) | $220.6 |
| Non-compete\tagreements | 26.8 | 4.0 | 30.8 | (18.2) | (3.9) | (22.1) | 8.7 |
| Other\tintangible\tassets | 65.2 | 0.4 | 65.6 | (47.0) | (1.5) | (48.5) | 17.1 |
| Total | $733.2 | $14.8 | $748.0 | $(434.3) | $(67.3) | $(501.6) | $246.4 |

|  | Balance	as	of<br>December	31,<br>2013 | Gross	Intangible	Assets<br>Acquisitions | Balance	as	of<br>December	31,<br>2014 | Balance	as	of<br>December	31,<br>2013 | Accumulated	Amortization<br>Additions<br>Charged<br>to	Expense | Balance	as	of<br>December	31,<br>2014 | Other	Intangible	Assets,<br>Net	as	of	December	31,<br>2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Customer\trelationships, |  |  |  |  |  |  |  |
| \t\t\tfranchise\tand\tother\tmunicipal |  |  |  |  |  |  |  |
| \t\t\tagreements | $598.9 | $42.3 | $641.2 | $(309.7) | $(59.4) | $(369.1) | $272.1 |
| Non-compete\tagreements | 23.6 | 3.2 | 26.8 | (14.8) | (3.4) | (18.2) | 8.6 |
| Other\tintangible\tassets | 63.9 | 1.3 | 65.2 | (46.1) | (0.9) | (47.0) | 18.2 |
| Total | $686.4 | $46.8 | $733.2 | $(370.6) | $(63.7) | $(434.3) | $298.9 |

Based	on	the	amortizable	intangible	assets	recorded	in	the	consolidated	balance	sheet	as	of	December	31,	2015,	amortization	expense	for	each	of	the	next	five	years	is estimated	as	follows:

| estimated	as	follows: |  |
| :--- | :--- |
| 2016 | $66.3 |
| 2017 | 64.3 |
| 2018 | 51.8 |
| 2019 | 9.2 |
| 2020 | 7.0 |

# ASSETS

# Prepaid	Expenses	and	Other	Current	Assets

A	summary	of	prepaid	expenses	and	other	current	assets	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Inventories | $38.8 | $35.9 |
| Prepaid\texpenses | 66.1 | 55.0 |
| Other\tnon-trade\treceivables | 34.6 | 57.0 |
| Reinsurance\treceivable | 12.5 | 12.4 |
| Income\ttax\treceivable | 78.5 | 101.6 |
| Other\tcurrent\tassets | 4.5 | 1.5 |
| Total | $235.0 | $263.4 |

# Other	Assets

A	summary	of	other	assets	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\tfinancing\tcosts | $44.6 | $47.2 |
| Deferred\tcompensation\tplan | 90.5 | 77.1 |
| Amounts\trecoverable\tfor\tcapping,\tclosure\tand\tpost-closure\tobligations | 25.9 | 24.3 |
| Reinsurance\treceivable | 44.0 | 48.4 |
| Interest\trate\tswaps | 16.5 | 14.1 |
| Other | 80.4 | 81.2 |
| Total | $301.9 | $292.3 |

# Other	Accrued	Liabilities

A	summary	of	other	accrued	liabilities	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Accrued\tpayroll\tand\tbenefits | $187.8 | $180.2 |
| Accrued\tfees\tand\ttaxes | 126.5 | 125.6 |
| Insurance\treserves,\tcurrent\tportion | 127.7 | 118.6 |
| Ceded\tinsurance\treserves,\tcurrent\tportion | 12.5 | 12.4 |
| Accrued\tdividends | 103.7 | 98.7 |
| Current\ttax\tliabilities | 0.5 | 16.3 |
| Fuel\thedge\tliabilities | 41.0 | 35.3 |
| Accrued\tprofessional\tfees\tand\tlegal\tsettlement\treserves | 44.2 | 61.2 |
| Withdrawal\tliability\t-\tCentral\tStates\tPension\tand\tOther\tFunds | — | 15.9 |
| Other | 72.7 | 86.5 |
| Total | $716.6 | $750.7 |

# 	Other	Long-Term	Liabilities

A	summary	of	other	long-term	liabilities	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\tcompensation\tplan | $83.3 | $76.3 |
| Pension\tand\tother\tpost-retirement\tliabilities | 12.1 | 11.0 |
| Legal\tsettlement\treserves | 24.7 | 10.8 |
| Ceded\tinsurance\treserves | 44.0 | 48.4 |
| Withdrawal\tliability\t-\tCentral\tStates\tPension\tand\tOther\tFunds | 6.1 | 139.6 |
| Contingent\tconsideration\tand\tacquisition\tholdbacks | 78.0 | — |
| Other | 61.1 | 58.8 |
| Total | $309.3 | $344.9 |

Our	liabilities	for	unpaid	and	incurred	but	not	reported	claims	as	of	December	31,	2015	and	2014	(which	include	claims	for	workers'	compensation,	commercial	general and	auto	liability,	and	employee-related	health	care	benefits)	were	$405.8	million	and	$416.6	million,	respectively,	under	our	risk	management	program	and	are included	in	other	accrued	liabilities	and	insurance	reserves,	net	of	current	portion,	in	our	consolidated	balance	sheets.	While	the	ultimate	amount	of	claims	incurred depends	on	future	developments,	we	believe	the	recorded	reserves	are	adequate	to	cover	the	future	payment	of	claims;	however,	it	is	possible	that	these	recorded reserves	may	not	be	adequate	to	cover	the	future	payment	of	claims.	Adjustments,	if

any,	to	estimates	recorded	resulting	from	ultimate	claim	payments	will	be	reflected	in	our	consolidated	statements	of	income	in	the	periods	in	which	such	adjustments are	known.	The	following	table	summarizes	the	activity	in	our	insurance	reserves	for	the	years	ended	December	31:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $416.6 | $431.5 | $426.4 |
| Additions\tcharged\tto\texpense | 360.4 | 354.8 | 379.1 |
| Payments | (373.1) | (372.2) | (377.2) |
| Accretion\texpense | 1.9 | 2.5 | 3.2 |
| Balance\tat\tend\tof\tyear | 405.8 | 416.6 | 431.5 |
| Less:\tcurrent\tportion | (127.7) | (118.6) | (136.6) |
| Long-term\tportion | $278.1 | $298.0 | $294.9 |

# 8. LANDFILL	AND	ENVIRONMENTAL

# COSTS

As	of	December	31,	2015,	we	owned	or	operated	193	active	landfills	with	total	available	disposal	capacity	of	approximately	5.0	billion	in-place	cubic	yards.

Additionally,	we	had	post-closure	responsibility	for	126	closed	landfills.

A	summary	of	our	accrued	landfill	and	environmental	liabilities	as	of	December	31	follows:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Landfill\tfinal\tcapping,\tclosure\tand\tpost-closure\tliabilities | $1,181.6 | $1,144.3 |
| Environmental\tremediation | 646.1 | 697.5 |
| Total\taccrued\tlandfill\tand\tenvironmental\tcosts | 1,827.7 | 1,841.8 |
| Less:\tcurrent\tportion | (149.8) | (164.3) |
| Long-term\tportion | $1,677.9 | $1,677.5 |

The	following	table	summarizes	the	activity	in	our	asset	retirement	obligation	liabilities,	which	include	liabilities	for	final	capping,	closure	and	post-closure,	for	the years	ended	December	31:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Asset\tretirement\tobligation\tliabilities,\tbeginning\tof\tyear | $1,144.3 | $1,091.3 | $1,052.4 |
| Non-cash\tadditions | 39.4 | 38.6 | 36.5 |
| Acquisitions\tand\tother\tadjustments | 27.1 | 3.8 | (0.6) |
| Asset\tretirement\tobligation\tadjustments | (20.2) | (12.8) | 12.0 |
| Payments | (88.4) | (54.6) | (85.6) |
| Accretion\texpense | 79.4 | 78.0 | 76.6 |
| Asset\tretirement\tobligation\tliabilities,\tend\tof\tyear | 1,181.6 | 1,144.3 | 1,091.3 |
| Less:\tcurrent\tportion | (87.4) | (87.9) | (93.6) |
| Long-term\tportion | $1,094.2 | $1,056.4 | $997.7 |

We	review	our	landfill	asset	retirement	obligations	at	least	annually.	As	a	result,	we	recorded	a	net	decrease	in	amortization	expense	of	$0.7	million,	$13.3	million	and $0.3	million	for	2015,	2014	and	2013,	respectively,	primarily	related	to	changes	in	estimates	and	assumptions	concerning	the	anticipated	waste	flow,	cost	and	timing	of future	final	capping,	closure	and	post-closure	activities.

The	fair	value	of	assets	that	are	legally	restricted	for	purposes	of	settling	final	capping,	closure	and	post-closure	obligations	was	approximately	$27.3	million	as	of December	31,	2015	and	is	included	in	restricted	cash	and	marketable	securities	in	our	consolidated	balance	sheet.

The	expected	future	payments	for	final	capping,	closure	and	post-closure	as	of	December	31,	2015	follows:

| 2016 | $87.4 |
| :--- | :--- |
| 2017 | 106.5 |
| 2018 | 96.7 |
| 2019 | 83.3 |
| 2020 | 90.5 |
| Thereafter | 5,571.5 |

The	estimated	remaining	final	capping,	closure	and	post-closure	expenditures	presented	above	are	not	inflated	and	not	discounted	and	reflect	the	estimated	future payments	for	liabilities	incurred	and	recorded	as	of	December	31,	2015	and	for	liabilities	yet	to	be	incurred	over	the	remaining	life	of	our	landfills.

# Environmental	Remediation	Liabilities

We	accrue	for	remediation	costs	when	they	become	probable	and	can	be	reasonably	estimated.	There	can	sometimes	be	a	range	of	reasonable	estimates	of	the	costs associated	with	remediation	of	a	site.	In	these	cases,	we	use	the	amount	within	the	range	that	constitutes	our	best	estimate.	If	no	amount	within	the	range	appears	to	be	a better	estimate	than	any	other,	we	use	the	amount	that	is	at	the	low	end	of	such	range.	It	is	reasonably	possible	that	we	will	need	to	adjust	the	liabilities	recorded	for remediation	to	reflect	the	effects	of	new	or	additional	information,	to	the	extent	such	information	impacts	the	costs,	timing	or	duration	of	the	required	actions.	If	we	used the	reasonably	possible	high	ends	of	our	ranges,	our	aggregate	potential	remediation	liability	as	of	December	31,	2015	would	be	approximately	$350	million	higher	than the	amounts	recorded.	Future	changes	in	our	estimates	of	the	cost,	timing	or	duration	of	the	required	actions	could	have	a	material	adverse	effect	on	our	consolidated financial	position,	results	of	operations	or	cash	flows.

The	following	table	summarizes	the	activity	in	our	environmental	remediation	liabilities	for	the	years	ended	December	31:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Environmental\tremediation\tliabilities,\tbeginning\tof\tyear | $697.5 | $551.7 | $563.7 |
| Net\tadditions\tcharged\tto\texpense | (1.6) | 219.1 | 83.7 |
| Payments | (80.0) | (99.4) | (122.5) |
| Accretion\texpense\t(non-cash\tinterest\texpense) | 24.9 | 25.3 | 26.8 |
| Acquisitions\tand\tother | 5.3 | 0.8 | — |
| Environmental\tremediation\tliabilities,\tend\tof\tyear | 646.1 | 697.5 | 551.7 |
| Less:\tcurrent\tportion | (62.4) | (76.4) | (85.1) |
| Long-term\tportion | $583.7 | $621.1 | $466.6 |
| The\texpected\tundiscounted\tfuture\tpayments\tfor\tremediation\tcosts\tas\tof\tDecember\t31,\t2015\tfollows: |  |  |  |
| 2016 | 2016 | 2016 | $62.4 |
| 2017 |  |  | 89.3 |
| 2018 | 2018 | 2018 | 62.9 |
| 2019 |  |  | 64.8 |
| 2020 | 2020 | 2020 | 62.4 |
| Thereafter |  |  | 546.5 |

Congress	Landfill.	In	August	2010,	Congress	Development	Company	agreed	with	the	State	of	Illinois	to	have	a	Final	Consent	Order	(Final	Order)	entered	by	the	Circuit Court	of	Illinois,	Cook	County.	Pursuant	to	the	Final	Order,	we	agreed	to	continue	to	implement	certain	remedial	activities	at	the	Congress	Landfill.	The	remediation liability	recorded	as	of	December	31,	2015	is	$78.5	million,	of	which	$3.4	million	is	expected	to	be	paid	during	2016.	We	believe	the	remaining	reasonably	possible high	end	of	our	range	would	be	approximately	$16	million	higher	than	the	amount	recorded	as	of	December	31,	2015.	Because	favorable	developments	have	occurred with	respect	to	(1)	the	volume	of	leachate	pumped	at	the	site	and	(2)	our	ability	to	dispose	of	leachate	in	the	local	publicly	owned	treatment	works,	we	no	longer	need	to expand	the	on-site	treatment	facility	and	our	expected	costs	have	decreased	from	prior	years.	Further,	the	majority	of	the	Final	Order	requirements	have	been	satisfied and	the	site	now	is	primarily	going	through	routine	operation	for	a	closed	landfill.	Accordingly,	we	will	omit	the	Congress	Landfill	from	future	reports.

The	carrying	value	of	our	notes	payable,	capital	leases	and	long-term	debt	as	of	December	31,	2015	and	2014	is	listed	in	the	following	table,	and	is	adjusted	for	the	fair value	of	interest	rate	swaps,	unamortized	discounts	and	the	unamortized	portion	of	adjustments	to	fair	value	recorded	in	purchase	accounting.	Original	issue	discounts and	adjustments	to	fair	value	recorded	in	purchase	accounting	are	amortized	to	interest	expense	over	the	term	of	the	applicable	instrument	using	the	effective	interest method.

|  |  |  | 2015 |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Maturity | Interest\tRate | Principal | Adjustments | \t Carrying\tValue | Principal | Adjustments | \t Carrying\tValue |
| Credit\tfacilities: |  |  |  |  |  |  |  |
| Uncommitted\tCredit\tFacility | Variable | $19.0 | $— | $19.0 | $— | $— | $— |
| Puerto\tRico\tUncommitted\nFacility | Variable | — | — | — | — | — | — |
| May\t2017 | Variable | — | — | — | — | — | — |
| June\t2019 | Variable | — | — | — | — | — | — |
| Senior\tnotes: |  |  |  |  |  |  |  |
| May\t2018 | 3.800 | 700.0 | (0.1) | 699.9 | 700.0 | (0.1) | 699.9 |
| September\t2019 | 5.500 | 650.0 | (2.0) | 648.0 | 650.0 | (2.5) | 647.5 |
| March\t2020 | 5.000 | 850.0 | (0.1) | 849.9 | 850.0 | (0.1) | 849.9 |
| November\t2021 | 5.250 | 600.0 | — | 600.0 | 600.0 | — | 600.0 |
| June\t2022 | 3.550 | 850.0 | (1.6) | 848.4 | 850.0 | (1.8) | 848.2 |
| May\t2023 | 4.750 | 550.0 | 12.4 | 562.4 | 550.0 | 11.5 | 561.5 |
| March\t2025 | 3.200 | 500.0 | (1.9) | 498.1 | — | — | — |
| March\t2035 | 6.086 | 275.7 | (23.3) | 252.4 | 275.7 | (23.9) | 251.8 |
| March\t2040 | 6.200 | 650.0 | (0.5) | 649.5 | 650.0 | (0.5) | 649.5 |
| May\t2041 | 5.700 | 600.0 | (3.2) | 596.8 | 600.0 | (3.2) | 596.8 |
| Debentures: |  |  |  |  |  |  |  |
| May\t2021 | 9.250 | 35.3 | (1.4) | 33.9 | 35.3 | (1.6) | 33.7 |
| September\t2035 | 7.400 | 165.2 | (39.9) | 125.3 | 165.3 | (40.5) | 124.8 |
| Tax-exempt: |  |  |  |  |  |  |  |
| 2019\t-\t2044 | 0.450\t-\t5.625 | 1,079.1 | — | 1,079.1 | 1,083.8 | — | 1,083.8 |
| Capital\tleases: |  |  |  |  |  |  |  |
| 2018\t-\t2046 | 4.000\t-\t12.203 | 111.5 | — | 111.5 | 113.8 | — | 113.8 |
| Total\tDebt |  | $7,635.8 | $(61.6) | 7,574.2 | $7,123.9 | $(62.7) | 7,061.2 |
| Less:\tcurrent\tportion |  |  |  | (5.5) |  |  | (10.4) |
| Long-term\tportion |  |  |  | $7,568.7 |  |  | $7,050.8 |

During	2014,	we	refinanced	our	credit	facilities	and	certain	of	our	tax-exempt	financings,	resulting	in	non-cash	charges	for	deferred	issuance	costs	of	$1.4	million.

During	2013,	we	refinanced	certain	of	our	tax-exempt	financings	that	resulted	in	a	$2.1	million	non-cash	charge	for	deferred	issuance	costs.

In	June	2014,	we	entered	into	a	$1.25	billion	unsecured	revolving	credit	facility	(the	Replacement	Credit	Facility),	which	replaced	our	$1.0	billion	credit	facility maturing	in	April	2016.	The	Replacement	Credit	Facility	matures	in	June	2019	and	includes	a	feature	that	allows	us	to	increase	availability,	at	our	option,	by	an aggregate	amount	up	to	$500.0	million	through

increased	commitments	from	existing	lenders	or	the	addition	of	new	lenders.	At	our	option,	borrowings	under	the	Replacement	Credit	Facility	bear	interest	at	a	Base Rate,	or	a	Eurodollar	Rate,	plus	an	applicable	margin	based	on	our	Debt	Ratings	(all	as	defined	in	the	agreements).

Contemporaneous	with	the	execution	of	the	Replacement	Credit	Facility,	we	entered	into	Amendment	No.	3	to	our	existing	$1.25	billion	unsecured	credit	facility	(the Existing	Credit	Facility	and,	together	with	the	Replacement	Credit	Facility,	the	Credit	Facilities),	to	reduce	the	commitments	under	the	Existing	Credit	Facility	to	$1.0 billion	and	conform	certain	terms	of	the	Existing	Credit	Facility	with	those	of	the	Replacement	Credit	Facility.	Amendment	No.	3	does	not	extend	the	maturity	date	of the	Existing	Credit	Facility,	which	matures	in	May	2017.	The	Existing	Credit	Facility	also	maintains	the	feature	that	allows	us	to	increase	availability,	at	our	option,	by an	aggregate	amount	of	up	to	$500.0	million	through	increased	commitments	from	existing	lenders	or	the	addition	of	new	lenders.

Our	Credit	Facilities	are	subject	to	facility	fees	based	on	applicable	rates	defined	in	the	agreements	and	the	aggregate	commitments,	regardless	of	usage.	Availability under	our	Credit	Facilities	totaled	$1,727.7	million	and	$1,615.4	million	as	of	December	31,	2015	and	2014,	respectively,	and	can	be	used	for	working	capital,	capital expenditures,	acquisitions,	letters	of	credit	and	other	general	corporate	purposes.	The	credit	agreements	require	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,	2015	and	2014,	we	had	no	borrowings	under	our	Credit Facilities.	We	had	$503.3	million	and	$615.1	million	of	letters	of	credit	outstanding	under	our	Credit	Facilities,	as	of	December	31,	2015	and	2014,	respectively.

We	also	have	a	$125.0	million	unsecured	credit	facility	agreement	(the	Uncommitted	Credit	Facility)	bearing	interest	at	LIBOR	plus	an	applicable	margin.	Our Uncommitted	Credit	Facility	is	subject	to	facility	fees	defined	in	the	agreement,	regardless	of	usage.	We	can	use	borrowings	under	the	Uncommitted	Credit	Facility	for working	capital	and	other	general	corporate	purposes.	The	agreements	governing	our	Uncommitted	Credit	Facility	require	us	to	comply	with	covenants.	The Uncommitted	Credit	Facility	may	be	terminated	by	either	party	at	any	time.	As	of	December	31,	2015,	we	had	$19.0	million	of	borrowings	under	our	Uncommitted Credit	Facility.	We	had	no	borrowings	under	our	Uncommitted	Credit	Facility	as	of	December	31,	2014.

In	January	2015,	we	entered	into	a	$20.0	million	uncommitted	credit	facility	agreement	(the	Puerto	Rico	Facility)	that	matured	in	January	2016.

Our	senior	notes	are	general	senior	unsecured	obligations.	Interest	is	payable	semi-annually.	These	senior	notes	have	a	make-whole	provision	that	is	exercisable	at	any time	prior	to	the	respective	maturity	dates	per	the	debt	table	above	at	a	stated	redemption	price.

# Future	Maturities	of	Debt

Aggregate	principal	maturities	of	notes	payable,	capital	leases	and	other	long-term	debt	as	of	December	31,	2015	follow:

# Interest	Expense	and	Interest	Paid

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | $324.6 | $310.3 | $319.8 |
| Accretion\tof\tdebt\tdiscounts | 7.4 | 6.6 | 6.9 |
| Accretion\tof\tremediation\tliabilities\tand\tother | 39.7 | 38.2 | 40.6 |
| Less:\tcapitalized\tinterest | (6.8) | (6.4) | (7.3) |
| Total\tinterest\texpense | $364.9 | $348.7 | $360.0 |

# Interest	Rate	Swap	and	Lock	Agreements

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

# Fair	Value	Hedges

During	the	second	half	of	2013,	we	entered	into	various	interest	rate	swap	agreements	relative	to	our	4.750%	fixed	rate	senior	notes	due	in	May	2023.	The	goal	was	to reduce	overall	borrowing	costs	and	rebalance	our	debt	portfolio's	ratio	of	fixed	to	floating	interest	rates.	As	of	December	31,	2015,	these	swap	agreements	have	a	total notional	value	of	$300.0	million	and	mature	in	May	2023,	which	is	identical	to	the	maturity	of	the	hedged	senior	notes.	We	pay	interest	at	floating	rates	based	on changes	in	LIBOR	and	receive	interest	at	a	fixed	rate	of	4.750%.	These	transactions	were	designated	as	fair	value	hedges	because	the	swaps	hedge	against	the	changes	in fair	value	of	the	fixed	rate	senior	notes	resulting	from	changes	in	interest	rates.

As	of	December	31,	2015	and	2014,	the	interest	rate	swap	agreements	are	reflected	at	their	fair	value	of	$16.5	million	and	$14.1	million,	respectively,	and	are	included	in other	assets	in	our	consolidated	balance	sheets.	To	the	extent	they	are	effective,	these	interest	rate	swap	agreements	are	included	as	an	adjustment	to	long-term	debt	in our	consolidated	balance	sheets.	We	recognized	net	interest	income	of	$7.5	million,	$7.7	million	and	$2.0	million,	respectively,	during	2015,	2014	and	2013	related	to net	swap	settlements	for	these	interest	rate	swap	agreements,	which	is	included	as	an	offset	to	interest	expense	in	our	consolidated	statements	of	income.

For	the	years	ended	December	31,	2015,	2014	and	2013,	we	recognized	a	loss	(gain)	of	$0.8	million,	$12.6	million	and	$(4.5)	million,	respectively,	on	the	change	in	fair value	of	the	hedged	senior	notes	attributable	to	changes	in	the	benchmark	interest	rate,	with	an	offsetting	gain	(loss)	of	$2.3	million,	$14.1	million	and	$(4.4)	million, respectively,	on	the	related	interest	rate	swaps.	The	difference	of	these	fair	value	changes	represents	hedge	ineffectiveness,	which	is	recorded	directly	in	earnings	as	other income,	net.

# Cash	Flow	Hedges

During	2015,	we	entered	into	a	number	of	interest	rate	lock	agreements	having	an	aggregate	notional	amount	of	$200.0	million	with	fixed	interest	rates	ranging	from 2.155%	to	2.270%	to	manage	exposure	to	fluctuations	in	interest	rates	in	anticipation	of

the	planned	issuance	of	the	3.20%	Notes.	Upon	issuance	of	the	3.20%	Notes,	we	terminated	the	interest	rate	locks	and	received	$1.2	million	from	the	counterparties. This	transaction	was	accounted	for	as	a	cash	flow	hedge.

As	of	December	31,	2015	and	2014,	no	interest	rate	lock	cash	flow	hedges	were	outstanding.	The	effective	portion	of	the	interest	rate	locks,	recorded	as	a	component	of accumulated	other	comprehensive	loss,	net	of	tax,	was	$19.4	million	and	$21.6	million	as	of	December	31,	2015	and	2014,	respectively.	The	effective	portion	of	the interest	rate	locks	is	amortized	as	an	adjustment	to	interest	expense	over	the	life	of	the	issued	debt	using	the	effective	interest	method.	We	expect	to	amortize	$2.8 million	of	net	expense	over	the	next	twelve	months	as	a	yield	adjustment	of	our	senior	notes.

The	effective	portion	of	the	interest	rate	locks	amortized	as	a	net	increase	to	interest	expense	during	the	years	ended	December	31,	2015,	2014	and	2013	was	$2.5 million,	$2.7	million	and	$2.7	million,	respectively.

The	components	of	the	provision	for	income	taxes	for	the	years	ended	December	31	follows:

Our	2015	effective	tax	rate	was	favorably	impacted	by	$17.4	million	due	to	the	resolution	of	outstanding	tax	matters	in	various	states	and	Puerto	Rico.

Our	2014	effective	tax	rate	was	favorably	impacted	by	$5.1	million	due	to	the	realization	of	tax	credits	and	lower	state	rates	due	to	changes	in	estimates.

Our	2013	effective	tax	rate	was	favorably	impacted	by	approximately	$42	million	for	adjustments	to	our	valuation	allowance,	primarily	due	to	the	determination	that	it was	more	likely	than	not	the	Company	would	be	able	to	realize	certain	state	loss	carryforwards.	In	addition,	our	2013	effective	tax	rate	was	favorably	impacted	by approximately	$14	million	due	to	a	settlement	for	tax	years	2009	to	2010	with	the	Internal	Revenue	Service	appeals	division	and	the	Joint	Committee	of	Taxation. Lastly,	our	2013	effective	tax	rate	was	favorably	impacted	by	the	realization	of	tax	credits	and	lower	state	rates	due	to	changes	in	estimates	of	$9.6	million.

The	components	of	the	net	deferred	income	tax	asset	and	liability	as	of	December	31	follow:

We	have	deferred	tax	assets	related	to	state	net	operating	loss	carryforwards.	We	provide	a	partial	valuation	allowance	due	to	uncertainty	surrounding	the	future utilization	of	these	carryforwards	in	the	taxing	jurisdictions	where	the	loss	carryforwards	exist.	When	determining	the	need	for	a	valuation	allowance,	we	consider	all positive	and	negative	evidence,	including	recent

financial	results,	scheduled	reversals	of	deferred	tax	liabilities,	projected	future	taxable	income	and	tax	planning	strategies.	The

weight	given	to	the	positive	and	negative	evidence	is	commensurate	with	the	extent	such	evidence	can	be	objectively	verified.	We	adjust	the	valuation	allowance	in	the period	management	determines	it	is	more	likely	than	not	that	deferred	tax	assets	will	or	will	not	be	realized.

During	2015,	we	completed	a	tax	restructuring	between	two	of	our	subsidiaries	that	possess	the	majority	of	our	state	loss	carryforwards.	This	resulted	in	a	reduction	to the	valuation	allowance	of	$10.2	million.	This	reduction	was	offset	by	a	corresponding	decrease	to	our	deferred	tax	asset	related	to	those	same	state	loss	carryforwards.

During	the	year	ended	December	31,	2013,	we	determined	that	it	is	more	likely	than	not	that	we	would	realize	a	portion	of	our	deferred	tax	asset	related	to	certain	state loss	carryforwards.	Most	of	these	loss	carryforwards	were	attributable	to	a	specific	subsidiary	for	which	we	had	historically	provided	a	valuation	allowance	due	to uncertainty	surrounding	the	future	utilization	of	these	carryforwards	in	the	taxing	jurisdictions	where	the	loss	carryforwards	existed.	Evaluating	both	positive	and negative	evidence,	and	most	notably,	the	exit	by	the	specific	subsidiary	from	a	cumulative	loss	position,	we	determined	it	was	more	likely	than	not	that	a	portion	of	these loss	carryforwards	would	be	realized.	This	resulted	in	a	reduction	to	our	valuation	allowance	of	approximately	$44	million	for	the	year	ended	December	31,	2013.

Substantially	all	of	our	valuation	allowance	is	associated	with	state	loss	carryforwards.	The	realization	of	our	deferred	tax	asset	for	state	loss	carryforwards	ultimately depends	upon	the	existence	of	sufficient	taxable	income	in	the	appropriate	state	taxing	jurisdictions	in	future	periods.	We	continue	to	regularly	monitor	both	positive	and negative	evidence	in	determining	the	ongoing	need	for	a	valuation	allowance.

We	have	deferred	tax	assets	related	to	state	net	operating	loss	carryforwards	with	an	estimated	tax	effect	of	$100.9	million	available	as	of	December	31,	2015.	These state	net	operating	loss	carryforwards	expire	at	various	times	between	2016	and	2035.	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,	2015, we	have	provided	a	valuation	allowance	of	$61.0	million.	Also	as	of	December	31,	2015,	we	have	provided	a	valuation	allowance	of	$2.7	million	for	certain	other deferred	tax	assets.

Deferred	income	taxes	have	not	been	provided	on	the	undistributed	earnings	of	our	Puerto	Rican	subsidiaries	of	approximately	$49	million	as	of	December	31,	2015	as such	earnings	are	considered	to	be	permanently	reinvested.	This	amount	would	become	taxable	upon	a	repatriation	of	assets	or	a	sale	or	liquidation	of	the	subsidiaries.	If such	an	event	were	to	occur,	we	would	incur	approximately	$17	million	of	federal	income	taxes.

Income	taxes	paid	in	2015	reflect	the	favorable	tax	depreciation	provisions	of	the	Protecting	Americans	from	Tax	Hikes	Act	signed	into	law	in	December	2015.	This legislation	extends	bonus	depreciation	for	property	placed	in	service	through	2019.	Bonus	depreciation	for	assets	placed	in	service	in	2015	to	2017	is	50%	and	later decreases	to	40%	in	2018	and	30%	in	2019.

We	are	subject	to	income	tax	in	the	United	States	and	Puerto	Rico,	as	well	as	income	tax	in	multiple	state	jurisdictions.	Our	compliance	with	income	tax	rules	and regulations	is	periodically	audited	by	tax	authorities.	These	authorities	may	challenge	the	positions	taken	in	our	tax	filings.	Thus,	to	provide	for	certain	potential	tax exposures,	we	maintain	liabilities	for	uncertain	tax	positions	for	our	estimate	of	the	final	outcome	of	the	examinations.	Our	federal	statute	of	limitations	is	closed	for	all years	prior	to	2012.	We	are	currently	under	state	examination	or	administrative	review	in	various	jurisdictions	for	tax	years	2003	to	2013.

The	following	table	summarizes	the	activity	in	our	gross	unrecognized	tax	benefits	for	the	years	ended	December	31:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $70.1 | $72.0 | $84.7 |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tcurrent\tyear | 0.2 | 0.8 | 0.3 |
| Additions\tfor\ttax\tpositions\tof\tprior\tyears | 1.4 | 5.0 | 11.4 |
| Reductions\tfor\ttax\tpositions\tof\tprior\tyears | (10.2) | (6.0) | (2.4) |
| Reductions\tfor\ttax\tpositions\tresulting\tfrom\tlapse\tof\tstatute\tof\tlimitations | (0.6) | (0.2) | (1.3) |
| Settlements | (13.9) | (1.5) | (20.7) |
| Balance\tat\tend\tof\tyear | $47.0 | $70.1 | $72.0 |

During	2015,	we	settled	tax	matters	in	various	states	and	Puerto	Rico	which	reduced	our	gross	unrecognized	tax	benefits	by	$13.9	million.

During	2014,	we	settled	tax	matters	in	various	jurisdictions	and	reduced	our	gross	unrecognized	tax	benefits	by	$1.5	million.

During	2013,	we	settled	with	the	IRS	appeals	division	and	the	Joint	Committee	on	Taxation	our	2009	and	2010	tax	years.	The	resolution	of	these	tax	periods	in	addition to	various	state	tax	resolutions	during	the	year	reduced	our	gross	unrecognized	tax	benefits	by	$20.7	million.

Included	in	our	gross	unrecognized	tax	benefits	as	of	December	31,	2015	and	2014	are	$30.5	million	and	$45.6	million	of	unrecognized	tax	benefits	(net	of	the	federal benefit	on	state	matters)	that,	if	recognized,	would	affect	our	effective	income	tax	rate	in	future	periods.

We	recognize	interest	and	penalties	as	incurred	within	the	provision	for	income	taxes	in	our	consolidated	statements	of	income.	Related	to	the	unrecognized	tax	benefits previously	noted,	we	recorded	interest	expense	of	approximately	$1.2	million	during

2015	and,	in	total	as	of	December	31,	2015,	have	recognized	a	liability	for	penalties	of	$0.5	million	and	interest	of	$10.3	million.

During	2014,	we	accrued	interest	of	approximately	$1.5	million	and,	in	total	as	of	December	31,	2014,	had	recognized	a	liability	for	penalties	of	$0.5	million	and	interest of	$18.7	million.	During	2013,	we	accrued	interest	of	approximately	$1.2	million	and,	in	total	as	of	December	31,	2013,	had	recognized	a	liability	for	penalties	of	$0.5 million	and	interest	of	$17.0	million.

Gross	unrecognized	benefits	that	we	expect	to	settle	in	the	following	twelve	months	are	in	the	range	of	$0	to	$10	million;	however,	it	is	reasonably	possible	that	the amount	of	unrecognized	tax	benefits	may	either	increase	or	decrease	in	the	next	twelve	months.

We	are	currently	under	examination	or	administrative	review	by	state	and	local	taxing	authorities	for	various	tax	years.	These	state	audits	are	ongoing.

We	believe	the	recorded	liabilities	for	uncertain	tax	positions	are	adequate.	However,	a	significant	assessment	against	us	in	excess	of	the	liabilities	recorded	could	have	a material	adverse	effect	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

# 11. EMPLOYEE	BENEFIT	PLANS

# Stock-Based	Compensation

In	February	2007,	our	board	of	directors	approved	the	2007	Stock	Incentive	Plan	(2007	Plan),	and	in	May	2007	our	shareholders	ratified	the	2007	Plan.	In	March	2011, our	board	of	directors	approved	the	Amended	and	Restated	2007	Stock	Incentive	Plan,	and	in	May	2011	our	shareholders	ratified	the	Amended	and	Restated	2007	Stock Incentive	Plan.	In	March	2013,	our	board	of	directors	approved	the	Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	(the	Amended	and Restated	Plan),	and	in	May	2013	our	shareholders	ratified	the	Amended	and	Restated	Plan.	We	currently	have	approximately	15.6	million	shares	of	common	stock reserved	for	future	grants	under	the	Amended	and	Restated	Plan.

Options	granted	under	the	2007	Plan	and	the	Amended	and	Restated	Plan	are	non-qualified	and	are	granted	at	a	price	equal	to	the	fair	market	value	of	our	common	stock at	the	date	of	grant.	Generally,	options	granted	have	a	term	of	seven	to	ten	years	from	the	date	of	grant,	and	vest	in	increments	of	25%	per	year	over	a	period	of	four years	beginning	on	the	first	anniversary	date	of	the	grant.	Options	granted	to	non-employee	directors	have	a	term	of	ten	years	and	are	fully	vested	at	the	grant	date.

In	December	2008,	the	board	of	directors	amended	and	restated	the	Republic	Services,	Inc.	2006	Incentive	Stock	Plan	(formerly	known	as	the	Allied	Waste	Industries, Inc.	2006	Incentive	Stock	Plan)	(the	2006	Plan).	Allied's	shareholders	approved	the	2006	Plan	in	May	2006.	The	2006	Plan	was	amended	and	restated	in	December	2008 to	reflect	Republic	as	the	new	sponsor	of	the	Plan,	to	reflect	that	any	references	to	shares	of	common	stock	are	to	shares	of	common	stock	of	Republic,	and	to	adjust outstanding	awards	and	the	number	of	shares	available	under	the	Plan	to	reflect	the	Allied	acquisition.	The	2006	Plan,	as	amended	and	restated,	provided	for	the	grant	of non-qualified	stock	options,	incentive	stock	options,	shares	of	restricted	stock,	shares	of	phantom	stock,	stock	bonuses,	restricted	stock	units,	stock	appreciation	rights, performance	awards,	dividend	equivalents,	cash	awards,	or	other	stock-based	awards.	Awards	granted	under	the	2006	Plan	prior	to	December	5,	2008	became	fully vested	and	nonforfeitable	upon	the	closing	of	the	Allied	acquisition.	No	further	awards	will	be	made	under	the	2006	Plan.

# Stock	Options

We	use	a	lattice	binomial	option-pricing	model	to	value	our	stock	option	grants.	We	recognize	compensation	expense	on	a	straight-line	basis	over	the	requisite	service period	for	each	separately	vesting	portion	of	the	award,	or	to	the	employee's	retirement	eligible	date,	if	earlier.	Expected	volatility	is	based	on	the	weighted	average	of the	most	recent	one	year	volatility	and	a	historical	rolling	average	volatility	of	our	stock	over	the	expected	life	of	the	option.	The	risk-free	interest	rate	is	based	on Federal	Reserve	rates	in	effect	for	bonds	with	maturity	dates	equal	to	the	expected	term	of	the	option.	We	use	historical	data	to	estimate	future	option	exercises, forfeitures	(at	3.0%	for	2014	and	2013)	and	expected	life	of	the	options.	When	appropriate,	separate	groups	of	employees	that	have	similar	historical	exercise	behavior are	considered	separately	for	valuation	purposes.	We	did	not	grant	stock	options	during	the	year	ended	December	31,	2015.	The	weighted-average	estimated	fair	values of	stock	options	granted	during	the	years	ended	December	31,	2014	and	2013	were	$5.74	and	$5.27	per	option,	respectively,	which	were

calculated	using	the	following	weighted-average	assumptions:

|  | 2014 | 2013 |
| :--- | :--- | :--- |
| Expected\tvolatility | 27.5% | 28.9% |
| Risk-free\tinterest\trate | 1.4% | 0.7% |
| Dividend\tyield | 3.2% | 3.2% |
| Expected\tlife\t(in\tyears) | 4.6 | 4.5 |
| Contractual\tlife\t(in\tyears) | 7.0 | 7.0 |

The	following	table	summarizes	stock	option	activity	for	the	years	ended	December	31,	2015,	2014	and	2013:

|  | Number	of<br>Shares	(in	millions) | Weighted	Average<br>Exercise<br>Price	per	Share | Weighted	Average<br>Remaining<br>Contractual	Term<br>(years) | Aggregate<br>Intrinsic<br>Value<br>(in	millions) |
| :--- | :--- | :--- | :--- | :--- |
| Outstanding\tas\tof\tDecember\t31,\t2012 | 13.7 | $27.51 |  |  |
| Granted | 3.0 | 31.21 |  |  |
| Exercised | (5.5) | 26.48 |  | $36.0 |
| Forfeited\tor\texpired | (0.7) | 30.02 |  |  |
| Outstanding\tas\tof\tDecember\t31,\t2013 | 10.5 | 28.91 |  |  |
| Granted | 0.5 | 33.76 |  |  |
| Exercised | (3.0) | 27.98 |  | $24.5 |
| Forfeited\tor\texpired | (0.4) | 31.02 |  |  |
| Outstanding\tas\tof\tDecember\t31,\t2014 | 7.6 | 29.49 |  |  |
| Granted | — | — |  |  |
| Exercised | (2.4) | 28.14 |  | $31.2 |
| Forfeited\tor\texpired | (0.2) | 30.39 |  |  |
| Outstanding\tas\tof\tDecember\t31,\t2015 | 5.0 | $30.08 | 3.2 | $69.7 |
| Exercisable\tas\tof\tDecember\t31,\t2015 | 3.1 | $29.41 | 2.6 | $45.4 |

# Compensation	Expense

As	of	December	31,	2015,	total	unrecognized	compensation	expense	related	to	outstanding	stock	options	was	$1.2	million,	which	will	be	recognized	over	a	weighted average	period	of	1.1	years.	The	total	fair	value	of	stock	options	that	vested	in	2015,	2014	and	2013	was	$9.0	million,	$12.5	million	and	$10.8	million,	respectively.

We	classified	excess	tax	benefits	of	$8.5	million,	$4.3	million	and	$3.8	million	as	cash	flows	from	financing	activities	for	2015,	2014	and	2013,	respectively.	All	other tax	benefits	related	to	stock	options	have	been	presented	as	a	component	of	cash	flows	from	operating	activities.

# Restricted	Stock	Units

The	following	table	summarizes	restricted	stock	unit	(RSU)	activity	for	the	years	ended	December	31,	2015,	2014	and	2013:

|  | Number	of<br>RSUs<br>(in	thousands) | Weighted-Average<br>Grant	Date	Fair<br>Value	per	Share |
| :--- | :--- | :--- |
| Unissued\tas\tof\tDecember\t31,\t2012 | 905.3 | $27.51 |
| Granted | 361.8 | 30.16 |
| Vested\tand\tissued | (243.0) | 28.16 |
| Forfeited | (27.1) | 30.66 |
| Unissued\tas\tof\tDecember\t31,\t2013 | 997.0 | 28.48 |
| Granted | 784.9 | 33.38 |
| Vested\tand\tissued | (258.4) | 28.07 |
| Forfeited | (67.3) | 33.14 |
| Unissued\tas\tof\tDecember\t31,\t2014 | 1,456.2 | 24.07 |
| Granted | 722.5 | 39.12 |
| Vested\tand\tissued | (405.1) | 30.56 |
| Forfeited | (46.3) | 36.44 |
| Unissued\tas\tof\tDecember\t31,\t2015 | 1,727.3 | $34.15 |
| Vested\tand\tunissued\tas\tof\tDecember\t31,\t2015 | 561.5 | $29.79 |

During	2015,	we	awarded	our	non-employee	directors	75,000	RSUs,	which	vested	immediately.	During	2015,	we	awarded	599,356	RSUs	to	executives	and	employees that	vest	in	four	equal	annual	installments	beginning	on	the	anniversary	date	of	the	original	grant	or	cliff	vest	after	four	years.	In	addition,	48,163	RSUs	were	earned	as dividend	equivalents.	The	RSUs	do	not	carry	any	voting	or	dividend	rights,	except	the	right	to	receive	additional	RSUs	in	lieu	of	dividends.

During	2014,	we	awarded	our	non-employee	directors	86,425	RSUs,	which	vested	immediately.	During	2014,	we	awarded	657,476	RSUs	to	executives	and	employees that	vest	in	four	equal	annual	installments	beginning	on	the	anniversary	date	of	the	original	grant	or	cliff	vest	after	four	years.	In	addition,	41,032	RSUs	were	earned	as dividend	equivalents.

During	2013,	we	awarded	our	non-employee	directors	72,842	RSUs,	which	vested	immediately.	During	2013,	we	awarded	258,944	RSUs	to	executives	that	vest	in	four equal	annual	installments	beginning	on	the	anniversary	date	of	the	original	grant.	In	addition,	30,009	RSUs	were	earned	as	dividend	equivalents.

The	fair	value	of	RSUs	is	based	on	the	closing	market	price	on	the	date	of	the	grant.	The	compensation	expense	related	to	RSUs	is	amortized	ratably	over	the	vesting period,	or	to	the	employee's	retirement	eligible	date,	if	earlier.

During	2015,	2014	and	2013,	compensation	expense	related	to	RSUs	totaled	$15.6	million,	$11.1	million	and	$6.3	million,	respectively.	As	of	December	31,	2015,	total unrecognized	compensation	expense	related	to	outstanding	RSUs	was	$28.9	million,	which	will	be	recognized	over	a	weighted	average	period	of	2.7	years.

# Performance	Shares

During	the	year	ended	December	31,	2015,	we	awarded	140,443	performance	shares	(PSUs)	to	our	named	executive	officers.	These	awards	are	performance-based	as	the number	of	shares	ultimately	earned	depends	on	performance	against	pre-determined	targets	for	return	on	invested	capital	(ROIC)	and	cash	flow	value	creation	(CFVC), as	well	as	total	shareholder	return	relative	to	the	S&P	500	index	(RTSR).	The	PSUs	are	payable	50%	in	shares	of	common	stock	and	50%	in	cash	after	the	end	of	a	three- year	performance	period,	when	the	Company's	financial	performance	for	the	entire	performance	period	is	reported,	typically	in	February	of	the	succeeding	year.	At	the end	of	the	performance	period,	the	number	of	PSUs	awarded	can	range	from	0%	to	150%	of	the	targeted	amount,	depending	on	the	performance	against	the	pre- determined	targets.

The	following	table	summarizes	PSU	activity	for	the	year	ended	December	31,	2015:

|  | Number	of<br>PSUs<br>(in	thousands) | Weighted	Average<br>Grant	Date	Fair<br>Value	per	Share |
| :--- | :--- | :--- |
| Outstanding\tas\tof\tDecember\t31,\t2014 | — | $— |
| Granted | 143.4 | 38.69 |
| Vested\tand\tissued | — | — |
| Forfeited | — | — |
| Outstanding\tas\tof\tDecember\t31,\t2015 | 143.4 | $38.69 |

During	2015,	2,946	PSUs	accumulated	as	dividend	equivalents.	The	PSUs	do	not	carry	any	voting	or	dividend	rights,	except	the	right	to	accumulate	additional	PSUs	in lieu	of	dividends.

For	the	stock-settled	portion	of	the	award	that	vests	based	on	future	ROIC	and	CFVC	performance,	compensation	expense	is	measured	using	the	fair	value	of	our common	stock	at	the	grant	date.	For	the	cash-settled	portion	of	the	award	that	vests	based	on	future	ROIC	and	CFVC	performance,	compensation	expense	is	recorded based	on	the	fair	value	of	our	common	stock	at	the	end	of	each	reporting	period.	Compensation	expense	is	recognized	ratably	over	the	performance	period	based	on	our estimated	achievement	of	the	established	performance	criteria.	Compensation	expense	is	only	recognized	for	the	portion	of	the	award	that	we	expect	to	vest,	which	we estimate	based	on	an	assessment	of	the	probability	that	the	performance	criteria	will	be	achieved.

For	the	stock-settled	portion	of	the	award	that	vests	based	on	RTSR,	the	grant	date	fair	value	is	based	on	a	Monte	Carlo	valuation	and	compensation	expense	is recognized	on	a	straight-line	basis	over	the	vesting	period.	For	the	cash-settled	portion	of	the	award	that	vests	based	on	RTSR,	compensation	expense	also	incorporates the	fair	value	of	our	PSUs	at	the	end	of	each	reporting	period.	Compensation	expense	is	recognized	for	RTSR	portion	of	the	award	whether	or	not	the	market	conditions are	achieved.

During	2015,	compensation	expense	related	to	PSUs	totaled	$1.8	million.	As	of	December	31,	2015,	total	unrecognized	compensation	expense	related	to	outstanding PSUs	was	$3.7	million,	which	will	be	recognized	over	a	weighted	average	period	of	2.1	years.

We	currently	have	one	qualified	defined	benefit	pension	plan,	the	BFI	Retirement	Plan	(the	Plan).	The	Plan	covers	certain	employees	in	the	United	States,	including some	employees	subject	to	collective	bargaining	agreements.

The	Plan	benefits	are	frozen.	Interest	credits	continue	to	be	earned	by	participants	in	the	Plan,	and	participants	whose	collective	bargaining	agreements	provide	for additional	benefit	accruals	under	the	Plan	continue	to	receive	those	credits	in	accordance	with	the	terms	of	their	bargaining	agreements.	The	Plan	was	converted	from	a traditional	defined	benefit	plan	to	a	cash	balance	plan	in	1993.

Prior	to	the	conversion	to	the	cash	balance	design,	benefits	payable	as	a	single	life	annuity	under	the	Plan	were	based	on	the	participant's	highest	five	years	of	earnings out	of	the	last	ten	years	of	service.	Upon	conversion	to	the	cash	balance	plan,	the	existing	accrued	benefits	were	converted	to	a	lump-sum	value	using	the	actuarial assumptions	in	effect	at	the	time.	Participants'	cash	balance	accounts	are	increased	until	retirement	by	certain	benefit	and	interest	credits	under	the	terms	of	their bargaining	agreements.	Participants	may	elect	early	retirement	with	the	attainment	of	age	55	and	completion	of	ten	years	of	credited	service	at	reduced	benefits. Participants	with	35	years	of	service	may	retire	at	age	62	without	any	reduction	in	benefits.

Our	pension	contributions	are	made	in	accordance	with	funding	standards	established	by	the	Employee	Retirement	Income	Security	Act	of	1974	and	the	Internal Revenue	Code,	as	amended	by	the	Pension	Protection	Act	enacted	in	2006	(the	PPA).	No	contributions	were	made	in	2015	or	2014.

We	must	separately	recognize	the	overfunded	or	underfunded	status	of	the	Plan	as	an	asset	or	liability.	The	funded	status	represents	the	difference	between	the	projected benefit	obligation	(PBO)	and	the	fair	value	of	the	Plan	assets.	The	PBO	is	the	present	value	of	benefits	earned	to	date	by	Plan	participants,	including	the	effect	of assumed	future	salary	increases,	if	any.	The

PBO	is	equal	to	the	accumulated	benefit	obligation	(ABO)	as	the	present	value	of	these	liabilities	is	not	affected	by	assumed	future	salary	increases.	We	use	a measurement	date	that	coincides	with	our	year	end	of	December	31.

The	following	table	presents	the	ABO	and	reconciliations	of	the	changes	in	the	PBO,	the	Plan	assets	and	the	accounting	funded	status	of	our	defined	benefit	pension plan	for	the	years	ended	December	31:

|  | Defined	Benefit<br>Pension	Plan |  |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| Accumulated\tbenefit\tobligation | $251.6 | $276.8 |
| Change\tin\tprojected\tbenefit\tobligation: |  |  |
| Projected\tbenefit\tobligation\tat\tbeginning\tof\tyear | $276.8 | $261.7 |
| Interest\tcost | 9.9 | 11.3 |
| Actuarial\t(gain)\tloss | (17.1) | 24.7 |
| Benefits\tpaid | (18.0) | (20.9) |
| Projected\tbenefit\tobligation\tat\tend\tof\tyear | $251.6 | $276.8 |
| Change\tin\tplan\tassets: |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tbeginning\tof\tyear | $272.6 | $269.8 |
| Actual\treturn\ton\tplan\tassets | (5.5) | 26.5 |
| Estimated\texpenses | (2.9) | (2.8) |
| Benefits\tpaid | (18.0) | (20.9) |
| Fair\tvalue\tof\tplan\tassets\tat\tend\tof\tyear | $246.2 | $272.6 |
| Underfunded\tstatus | $(5.4) | $(4.2) |
| Amounts\trecognized\tin\tthe\tstatement\tof\tfinancial\tposition\tconsist\tof: |  |  |
| Noncurrent\tliabilities | $(5.4) | $(4.2) |
| Net\tamount\trecognized | $(5.4) | $(4.2) |
| Weighted\taverage\tassumptions\tused\tto\tdetermine\tbenefit\tobligations: |  |  |
| Discount\trate | 4.19% | 3.70% |
| Rate\tof\tcompensation\tincrease | N/A | N/A |

The	amounts	included	in	accumulated	other	comprehensive	loss	on	the	consolidated	balance	sheets	that	have	not	yet	been	recognized	as	components	of	net	periodic benefit	cost	as	of	December	31,	2015	and	2014	were	$16.9	million	and	$19.9	million,	respectively.

The	components	of	the	net	periodic	benefit	cost	for	the	years	ended	December	31	are	summarized	below:

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Components\tof\tnet\tperiodic\tbenefit\tcost: |  |  |  |
| Service\tcost | $2.9 | $2.8 | $2.9 |
| Interest\tcost | 9.9 | 11.3 | 11.0 |
| Expected\treturn\ton\tplan\tassets | (14.7) | (16.4) | (16.2) |
| Recognized\tnet\tactuarial\tgain | — | (1.0) | (0.2) |
| Amortization\tof\tprior\tservice\tcost | 0.1 | 0.1 | 0.1 |
| Settlement\tincome | — | — | (3.5) |
| Net\tperiodic\tbenefit\tcost | $(1.8) | $(3.2) | $(5.9) |
| Weighted\taverage\tassumptions\tused\tto\tdetermine\tnet\tperiodic\tbenefit\tcost: |  |  |  |
| Discount\trate | 3.70% | 4.50% | 3.90% |
| Expected\treturn\ton\tplan\tassets | 5.64% | 6.35% | 6.00% |
| Rate\tof\tcompensation\tincrease | N/A | N/A | N/A |

We	determine	the	discount	rate	used	in	the	measurement	of	our	obligations	based	on	a	model	that	matches	the	timing	and	amount	of	expected	benefit	payments	to maturities	of	high	quality	bonds	priced	as	of	the	Plan	measurement	date.	When	that	timing	does	not	correspond	to	a	published	high-quality	bond	rate,	our	model	uses	an expected	yield	curve	to	determine	an	appropriate	current	discount	rate.	The	yields	on	the	bonds	are	used	to	derive	a	discount	rate	for	the	liability.	The	term	of	our obligation,	based	on	the	expected	retirement	dates	of	our	workforce,	is	approximately	eight	years.

In	developing	our	expected	rate	of	return	assumption,	we	have	evaluated	the	actual	historical	performance	and	long-term	return	projections	of	the	Plan	assets,	which give	consideration	to	the	asset	mix	and	the	anticipated	timing	of	the	Plan	outflows.	We	employ	a	total	return	investment	approach	whereby	a	mix	of	equity	and	fixed income	investments	are	used	to	maximize	the	long-term	return	of	Plan	assets	for	what	we	consider	a	prudent	level	of	risk.	The	intent	of	this	strategy	is	to	minimize	Plan expenses	by	outperforming	Plan	liabilities	over	the	long	run.	Risk	tolerance	is	established	through	careful	consideration	of	Plan	liabilities,	Plan	funded	status	and	our financial	condition.	The	investment	portfolio	contains	a	diversified	blend	of	equity	and	fixed	income	investments.	Furthermore,	equity	investments	are	diversified	across U.S.	and	non-U.S.	stocks	as	well	as	growth,	value,	and	small	and	large	capitalizations.	Derivatives	may	be	used	to	gain	market	exposure	in	an	efficient	and	timely manner;	however,	derivatives	may	not	be	used	to	leverage	the	portfolio	beyond	the	market	value	of	the	underlying	investments.	Investment	risk	is	measured	and monitored	on	an	ongoing	basis	through	annual	liability	measurements,	periodic	asset	and	liability	studies,	and	quarterly	investment	portfolio	reviews.

The	following	table	summarizes	our	target	asset	allocation	for	2015	and	actual	asset	allocation	as	of	December	31,	2015	and	2014	for	our	Plan:

|  | Target<br>Asset<br>Allocation | 2015<br>Actual<br>Asset<br>Allocation | 2014<br>Actual<br>Asset<br>Allocation |
| :--- | :--- | :--- | :--- |
| Debt\tsecurities | 72% | 72% | 70% |
| Equity\tsecurities | 28 | 28 | 30 |
| Total | 100% | 100% | 100% |

For	2016,	the	investment	strategy	for	pension	plan	assets	is	to	maintain	a	broadly	diversified	portfolio	designed	to	achieve	our	target	of	an	average	long-term	rate	of return	of	5.64%.	While	we	believe	we	can	achieve	a	long-term	average	return	of	5.64%,	we	cannot	be	certain	that	the	portfolio	will	perform	to	our	expectations.	Assets are	strategically	allocated	among	debt	and	equity	portfolios	to	achieve	a	diversification	level	that	reduces	fluctuations	in	investment	returns.	Asset	allocation	target ranges	and	strategies	are	reviewed	periodically	with	the	assistance	of	an	independent	external	consulting	firm.

The	pension	assets	are	measured	at	fair	value.	The	following	table	summarizes,	by	level,	within	the	fair	value	hierarchy,	the	investments	of	the	Plan	at	fair	value	as	of December	31,	2015	and	2014:

|  |  |  | Fair	Value	Measurements	Using |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Total\tas\tof\nDecember\t31,\t2015 | Quoted\nPrices\tin\nActive\nMarkets\n(Level\t1) | Significant\nOther\nObservable\nInputs\n(Level\t2) | Significant\nUnobservable\nInputs\n(Level\t\t3) |
| Money\tmarket\taccounts | $2.9 | $2.9 | $— | $— |
| Mutual\tfunds | 242.7 | — | 242.7 | — |
| Limited\tpartnerships | 0.6 | — | — | 0.6 |
| Total\tassets | $246.2 | $2.9 | $242.7 | $0.6 |

# Fair	Value	Measurements	Using

# Collective	Bargaining	Agreements

As	of	December	31,	2015,	approximately	26%	of	our	workforce	was	represented	by	various	labor	unions,	and	approximately	6%	of	our	workforce	was	covered	by collective	bargaining	agreements	(CBAs)	that	are	set	to	expire	during	2016.

# Multiemployer	Pension	Plans

We	contribute	to	27	multiemployer	pension	plans	under	CBAs	covering	union-represented	employees.	As	of	December	31,	2015,	approximately	21%	of	our	total	current employees	were	participants	in	such	multiemployer	plans.	These	plans	generally	provide	retirement	benefits	to	participants	based	on	their	service	to	contributing employers.	We	do	not	administer	these	plans.	In	general,	these	plans	are	managed	by	a	board	of	trustees	with	the	unions	appointing	certain	trustees	and	other contributing	employers	of	the	plan	appointing	certain	members.	We	generally	are	not	represented	on	the	board	of	trustees.

Based	on	the	information	available	to	us,	we	believe	that	some	of	the	multiemployer	plans	to	which	we	contribute	are	either	"critical"	or	"endangered"	as	those	terms	are defined	in	the	PPA.	The	PPA	requires	underfunded	pension	plans	to	improve	their	funding	ratios	within	prescribed	intervals	based	on	the	level	of	their	underfunding. Until	the	plan	trustees	develop	the	funding	improvement	plans	or	rehabilitation	plans	as	required	by	the	PPA,	we	cannot	determine	the	amount	of	assessments	we	may be	subject	to,	if	any.	Accordingly,	we	cannot	presently	determine	the	impact	that	the	PPA	may	have	on	our	consolidated	financial	position,	results	of	operations	or	cash flows.

Furthermore,	under	current	law	regarding	multiemployer	benefit	plans,	a	plan's	termination,	our	voluntary	withdrawal	(which	we	consider	from	time	to	time),	or	the mass	withdrawal	of	all	contributing	employers	from	any	under-funded	multiemployer	pension	plan	would	require	us	to	make	payments	to	the	plan	for	our	proportionate share	of	the	multiemployer	plan's	unfunded	vested	liabilities.	It	is	possible	that	there	may	be	a	mass	withdrawal	of	employers	contributing	to	these	plans	or	plans	may terminate	in	the	near	future.	We	could	have	adjustments	to	our	estimates	for	these	matters	in	the	near	term	that	could	have	a	material	effect	on	our	consolidated	financial position,	results	of	operations	or	cash	flows.

Republic's	participation	in	individually	significant	multiemployer	pension	plans	for	the	year	ended	December	31,	2015	is	outlined	in	the	table	below.	Only	with	respect to	multiemployer	pension	plans,	we	considered	contributions	in	excess	of	$3.0	million	in	any	period	disclosed	to	be	individually	significant.	The	most	recent	PPA	zone status	available	in	2015	and	2014	is	for	the	plans'	year	ended	September	30	or	December	31,	2014	and	2013,	respectively.	The	status	is	based	on	information	that Republic	received	from	the	plans	and	is	certified	by	the	plans'	actuary.	Among	other	factors,	plans	in	the	"critical"	red	zone	are	generally	less	than	65%	funded,	plans	in the	"endangered"	yellow	zone	are	less	than	80%	funded,	and	plans	in	the	"safe"	green	zone	are	at	least	80%	funded.	The	last	column	lists	the	expiration	dates	of	the CBAs	to	which	the	plans	are	subject.	There	have	been	no	significant	changes	that	affect	the	comparability	of	the	2015,	2014	and	2013	contributions.

|  |  | Pension	Protection<br>Act	Zone	Status | Pension	Protection<br>Act	Zone	Status | Funding<br>Improvement<br>or	Rehabilitation<br>Plan	Status<br>Pending	/ |  | Republic<br>Contributions	to	Plan |  | Surcharge | Expiration	Dates |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Legal\tPlan\tName | EIN | 2014 | 2013 | Implemented | 2015 | 2014 | 2013 | Imposed | of\tCBAs |
| Local\t731\tPrivate |  |  |  |  |  |  |  |  |  |
| \t\tScavengers\tand\tGarage |  |  |  |  |  |  |  |  | Various\tdates |
| \t\tAttendants\tPension |  |  |  |  |  |  |  |  | through |
| \t\tTrust\tFund | 36-6513567 | Critical | Critical | Implemented | 10.2 | 9.2 | 6.9 | No | 1/31/19 |
|  |  |  |  |  |  |  |  |  | Various\tdates |
| Western\tConference\tof |  |  |  |  |  |  |  |  | through |
| \t\tTeamsters\tPension\tPlan | 91-6145047 | Safe | Safe | No | 33.4 | 30.8 | 26.6 | No | 10/23/19 |
| Individually\tsignificant\n\t\tplans |  |  |  |  | 43.6 | 40.0 | 33.5 |  |  |
| All\tother\tplans | N/A | N/A | N/A | N/A | 13.2 | 11.8 | 13.2 | N/A |  |
| Total |  |  |  |  | $56.8 | $51.8 | $46.7 |  |  |

We	are	listed	in	the	Form	5500	for	Local	731	Private	Scavengers	and	Garage	Attendants	Pension	Trust	Fund	as	providing	more	than	5%	of	the	total	contributions.	At	the date	these	financial	statements	were	issued,	Forms	5500	were	not	available	for	the	plan	years	ended	in	2015.

# Central	States,	Southeast	and	Southwest	Areas	Pension	Fund

Before	September	30,	2013,	we	had	CBAs	with	local	bargaining	units	of	the	Teamsters	under	which	we	contributed	to	the	Central	States,	Southeast	and	Southwest Areas	Pension	Fund	(the	Fund).	These	CBAs	were	under	negotiation	during	2012	and	2013.	As	part	of	our	CBA	negotiations,	we	partially	withdrew	from	participation in	the	Fund	in	2012	and	completely	withdrew	from	the	Fund	in	2013.	Accordingly,	we	were	required	to	make	payments	to	the	Fund	for	our	allocated	share	of	its unfunded	vested	liabilities.

In	January	2014,	we	received	from	the	Fund	a	notice	and	demand	for	payment	of	the	Fund's	calculated	and	assessed	withdrawal	liabilities.	In	April	2014,	we	submitted to	the	Fund	a	request	for	review	and	an	information	request	for	supporting	documentation	surrounding	the	Fund's	calculation	and	assessment	of	withdrawal	liability.		In September	2014,	we	submitted	a	formal	demand	for	arbitration.

In	December	2015	we	settled	outstanding	liabilities	with	respect	to	the	withdrawal	events	and	paid	$139.0	million	to	the	Fund.	The	settlement	of	the	withdrawal	liability was	based	on	negotiations	and	discussions	between	Republic	and	the	Fund.	As	of	December	31,	2015,	the	settlement	has	been	paid	and	we	have	no	remaining	liability for	our	withdrawal	from	the	Fund.

# Defined	Contribution	Plan

We	maintain	the	Republic	Services	401(k)	Plan	(401(k)	Plan),	which	is	a	defined	contribution	plan	covering	all	eligible	employees.	Under	the	401(k)	Plan,	participants may	direct	us	to	defer	a	portion	of	their	compensation	to	the	401(k)	Plan,	subject	to	Internal	Revenue	Code	limitations.	We	provide	for	an	employer	matching contribution	equal	to	100%	of	the	first	3%	of	eligible	compensation	and	50%	of	the	next	2%	of	eligible	compensation	contributed	by	each	employee,	which	is	funded	in cash.	All	contributions	vest	immediately.

# Deferred	Compensation	Plan

We	provide	eligible	Republic	employees,	officers	and	directors	with	the	opportunity	to	voluntarily	defer	base	salary,	bonus	payments,	long-term	incentive	awards	and other	compensation,	as	applicable,	on	a	pre-tax	basis	through	the	Republic	Services,	Inc.	Deferred	Compensation	Plan	(the	DCP).	The	DCP	is	a	nonqualified	deferred compensation	plan	that	conforms	to	Section	409A	of	the	Internal	Revenue	Code.	Eligible	participants	can	defer	up	to	80%	of	base	salary	and	up	to	100%	of	bonus,	long- term	compensation	and	directors'	fees.	Under	the	DCP,	some	participants	also	are	eligible	for	matching	contributions.	The	matching	contribution	under	the	DCP	is	equal to	the	lesser	of	2%	of	the	participant's	compensation	over	established	401(k)	limits	or	50%	of	the	amount	the	participant	has	deferred.	The	DCP	participants	have	no ownership	or	security	interest	in	any	of	the	amounts	deferred	or	the	measurement	funds	under	the	DCP.	The	right	of	each	participant	in	the	DCP	is	solely	that	of	a general,	unsecured	creditor	of	Republic	with	respect	to	his	or	her	own	interest	under	the	DCP.	Deferred	amounts	may	be	subject	to	forfeiture	and	are	deemed	invested among	investment	funds	offered	under	the	DCP,	as	directed	by	each	participant.	Payments	of	deferred	amounts	are	payable	following	separation	from	service	or	at	a date	or	dates	elected	by	the	participant	when	the	deferral	is	elected.	Payments	of	deferred	amounts	are	made	in	either	a	lump	sum	or	in	annual	installments	over	a	period not	exceeding	15	years.

Republic	invested	in	corporate-owned	life	insurance	policies	to	satisfy	future	obligations	under	the	DCP.	These	corporate-owned	life	insurance	policies	are	held	in	a Rabbi	Trust	and	are	recorded	at	the	amount	that	can	be	realized	under	insurance	contracts	at	the	balance	sheet	date,	which	is	the	cash	surrender	value	adjusted	for	other charges	or	other	amounts	due	that	are	probable	at	settlement.	The	aggregate	cash	surrender	value	of	these	life	insurance	policies	was	$90.5	million	and	$77.1	million	as of	December	31,	2015	and	2014,	respectively,	and	is	classified	in	other	assets	in	our	consolidated	balance	sheets.	The	DCP	liability	was	$83.3	million	and	$76.3	million as	of	December	31,	2015	and	2014,	respectively,	and	is	classified	in	other	long-term	liabilities	in	our	consolidated	balance	sheets.

# Employee	Stock	Purchase	Plan

Republic	employees	are	eligible	to	participate	in	an	employee	stock	purchase	plan.	The	plan	allows	participants	to	purchase	our	common	stock	for	95%	of	its	quoted market	price	on	the	last	day	of	each	calendar	quarter.	For	the	years	ended	December	31,	2015,	2014	and	2013,	issuances	under	this	plan	totaled	141,055	shares, 139,941	shares	and	142,217	shares,	respectively.	As	of	December	31,	2015,	shares	reserved	for	issuance	to	employees	under	this	plan	totaled	0.6	million	and	Republic held	employee	contributions	of	approximately	$1.4	million	for	the	purchase	of	common	stock.

# 12. STOCK	REPURCHASES	AND	DIVIDENDS

Stock	repurchase	activity	during	the	years	ended	December	31,	2015	and	2014	follows	(in	millions	except	per	share	amounts):

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Number\tof\tshares\trepurchased | 9.8 | 11.1 |
| Amount\tpaid | $404.7 | $400.4 |
| Weighted\taverage\tcost\tper\tshare | $41.39 | $35.92 |

As	of	December	31,	2015,	0.1	million	repurchased	shares	were	pending	settlement	and	$3.7	million	were	unpaid	and	included	within	our	accrued	liabilities.

In	October	2015,	our	board	of	directors	added	$900.0	million	to	the	existing	share	repurchase	authorization,	which	now	extends	through	December	31,	2017.	Share repurchases	under	the	program	may	be	made	through	open	market	purchases	or	privately	negotiated	transactions	in	accordance	with	applicable	federal	securities	laws. While	the	board	of	directors	has	approved	the	program,	the	timing	of	any	purchases,	the	prices	and	the	number	of	shares	of	common	stock	to	be	purchased	will	be determined	by	our	management,	at	its	discretion,	and	will	depend	upon	market	conditions	and	other	factors.	The	share	repurchase	program	may	be	extended,	suspended or	discontinued	at	any	time.	As	of	December	31,	2015,	the	October	2015	repurchase	program	had	remaining	authorized	purchase	capacity	of	$855.5	million.

In	December	2015,	our	board	of	directors	changed	the	status	of	71,272,964	treasury	shares	to	authorized	and	unissued.	In	doing	so,	the	number	of	our	issued	shares	was reduced	by	the	stated	amount.	Our	accounting	policy	is	to	deduct	the	par	value	from	common	stock	and	to	reflect	the	excess	of	cost	over	par	value	as	a	deduction	from additional	paid-in	capital.	The	change	in	unissued	shares	resulted	in	a	reduction	of	$2,295.3	million	in	treasury	stock,	$0.6	million	in	common	stock,	and	$2,294.7 million	in	additional	paid-in	capital.	There	was	no	effect	on	our	total	stockholders'	equity	position	as	a	result	of	the	change.

In	October	2015,	our	board	of	directors	approved	a	quarterly	dividend	of	$0.30	per	share.	Cash	dividends	declared	were	$404.3	million,	$383.6	million	and	$357.3 million	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	As	of	December	31,	2015,	we	recorded	a	quarterly	dividend	payable	of	$103.7	million	to shareholders	of	record	at	the	close	of	business	on	January	4,	2016.

# 13. EARNINGS	PER	SHARE

Basic	earnings	per	share	is	computed	by	dividing	net	income	attributable	to	Republic	Services,	Inc.	by	the	weighted	average	number	of	common	shares	(including vested	but	unissued	RSUs)	outstanding	during	the	period.	Diluted	earnings	per	share	is	based	on	the	combined	weighted	average	number	of	common	shares	and common	share	equivalents	outstanding,	which	include,	where	appropriate,	the	assumed	exercise	of	employee	stock	options,	unvested	RSUs	and	unvested	PSUs	at	the expected	attainment	levels.	We	use	the	treasury	stock	method	in	computing	diluted	earnings	per	share.

Earnings	per	share	for	the	years	ended	December	31,	2015,	2014,	and	2013	are	calculated	as	follows	(in	thousands,	except	per	share	amounts):

|  | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Basic\tearnings\tper\tshare: |  |  |  |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $749,906 | $547,600 | $588,900 |
| Weighted\taverage\tcommon\tshares\toutstanding | 349,984 | 356,673 | 362,054 |
| Basic\tearnings\tper\tshare | $2.14 | $1.54 | $1.63 |
| Diluted\tearnings\tper\tshare: |  |  |  |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $749,906 | $547,600 | $588,900 |
| Weighted\taverage\tcommon\tshares\toutstanding | 349,984 | 356,673 | 362,054 |
| Effect\tof\tdilutive\tsecurities: |  |  |  |
| Options\tto\tpurchase\tcommon\tstock | 1,255 | 1,350 | 1,332 |
| Unvested\tRSU\tawards | 137 | 84 | 36 |
| Unvested\tPSU\tawards | 12 | — | — |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 351,388 | 358,107 | 363,422 |
| Diluted\tearnings\tper\tshare | $2.13 | $1.53 | $1.62 |
| Antidilutive\tsecurities\tnot\tincluded\tin\tthe\tdiluted\tearnings\tper\tshare\tcalculations: |  |  |  |
| Options\tto\tpurchase\tcommon\tstock | 9 | 274 | 1,658 |

# 14. SEGMENT	REPORTING

Summarized	financial	information	concerning	our	reportable	segments	for	the	years	ended	December	31,	2015,	2014	and	2013	follows:

|  | Gross<br>Revenue | Intercompany<br>Revenue | Net<br>Revenue | Depreciation,<br>Amortization,<br>Depletion	and<br>Accretion | Operating<br>Income<br>(Loss) | Capital<br>Expenditures | Total	Assets |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2015: |  |  |  |  |  |  |  |
| East | $2,936.0 | $(408.2) | $2,527.8 | $271.8 | $475.0 | $196.0 | $4,483.5 |
| Central | 3,313.9 | (631.2) | 2,682.7 | 332.0 | 527.7 | 233.1 | 5,594.9 |
| West | 4,585.8 | (845.9) | 3,739.9 | 404.4 | 832.4 | 353.8 | 8,999.2 |
| Corporate\tentities | 177.8 | (13.2) | 164.6 | 41.8 | (276.3) | 162.7 | 1,499.6 |
| Total | $11,013.5 | $(1,898.5) | $9,115.0 | $1,050.0 | $1,558.8 | $945.6 | $20,577.2 |
| 2014: |  |  |  |  |  |  |  |
| East | $2,905.7 | $(404.7) | $2,501.0 | $266.2 | $429.6 | $235.5 | $4,538.4 |
| Central | 3,246.2 | (616.3) | 2,629.9 | 318.6 | 503.6 | 270.9 | 5,775.7 |
| West | 4,281.6 | (787.4) | 3,494.2 | 355.1 | 825.7 | 298.7 | 8,413.7 |
| Corporate\tentities | 192.8 | (14.6) | 178.2 | 45.0 | (525.8) | 57.4 | 1,366.2 |
| Total | $10,626.3 | $(1,823.0) | $8,803.3 | $984.9 | $1,233.1 | $862.5 | $20,094.0 |
| 2013: |  |  |  |  |  |  |  |
| East | $2,857.4 | $(401.4) | $2,456.0 | $257.6 | $451.0 | $260.7 | $4,972.3 |
| Central | 3,098.5 | (586.4) | 2,512.1 | 304.6 | 494.5 | 297.5 | 5,794.7 |
| West | 4,049.8 | (725.4) | 3,324.4 | 342.8 | 766.6 | 303.4 | 8,274.9 |
| Corporate\tentities | 139.0 | (14.3) | 124.7 | 49.0 | (501.8) | 19.2 | 907.3 |
| Total | $10,144.7 | $(1,727.5) | $8,417.2 | $954.0 | $1,210.3 | $880.8 | $19,949.2 |

Intercompany	revenue	reflects	transactions	within	and	between	segments	that	generally	are	made	on	a	basis	intended	to	reflect	the	market	value	of	such	services.	Capital expenditures	for	corporate	entities	primarily	include	vehicle	inventory	acquired	but	not	yet	assigned	to	operating	locations	and	facilities.	Corporate	functions	include legal,	tax,	treasury,	information	technology,	risk	management,	human	resources,	closed	landfills	and	other	administrative	functions.	During	the	years	ended	December 31,	2015,	2014	and	2013,	environmental	remediation	charges	and	recoveries	were	incurred	at	our	closed	Bridgeton	Landfill	in	Missouri.	See	Note	8,	Landfill	and Environmental	Costs.	During	2014	and	2013,	we	recorded	charges	related	to	our	withdrawal	from	the	Central	States,	Southeast	and	Southwest	Areas	Pension	Fund	and reached	a	settlement	during	2015.	See	Note	11,	Employee	Benefit	Plans,	for	a	summary	of	our	withdrawal	and	the	related	settlement.	During	2014	and	2013,	we completed	various	refinancing	transactions	that	resulted	in	cash	paid	for	premiums	and	professional	fees	to	repurchase	outstanding	debt,	as	well	as	non-cash	charges	for unamortized	debt	discounts	and	deferred	issuance	costs.	See	Note	9,	Debt.

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

Other	non-core	revenue	consists	primarily	of	revenue	from	National	Accounts,	which	represents	the	portion	of	revenue	generated	from	nationwide	contracts	in	markets outside	our	operating	areas	where	the	associated	waste	handling	services	are	subcontracted	to	local	operators.	Consequently,	substantially	all	of	this	revenue	is	offset with	related	subcontract	costs,	which	are	recorded	in	cost	of	operations.

# 15. CHANGES	IN	ACCUMULATED	OTHER	COMPREHENSIVE	LOSS	(INCOME)	BY COMPONENT

A	summary	of	changes	in	accumulated	other	comprehensive	loss	(income),	net	of	tax,	by	component,	for	the	years	ended	December	31,	2015,	2014	and	2013	follows:

|  | Cash	Flow	Hedges | Defined	Benefit<br>Pension	Plan | Total |
| :--- | :--- | :--- | :--- |
| Balance\tas\tof\tDecember\t31,\t2012 | $23.1 | $(17.3) | $5.8 |
| Other\tcomprehensive\tincome\tbefore\treclassifications | (4.0) | (7.1) | (11.1) |
| Amounts\treclassified\tfrom\taccumulated\tother\n\t\t\tcomprehensive\tloss | 0.2 | 2.1 | 2.3 |
| Net\tcurrent-period\tother\tcomprehensive\tincome | (3.8) | (5.0) | (8.8) |
| Balance\tas\tof\tDecember\t31,\t2013 | 19.3 | (22.3) | (3.0) |
| Other\tcomprehensive\tloss\tbefore\treclassifications | 23.8 | 9.3 | 33.1 |
| Amounts\treclassified\tfrom\taccumulated\tother\ncomprehensive\tincome | (1.2) | — | (1.2) |
| Net\tcurrent-period\tother\tcomprehensive\tloss | 22.6 | 9.3 | 31.9 |
| Balance\tas\tof\tDecember\t31,\t2014 | 41.9 | (13.0) | 28.9 |
| Other\tcomprehensive\tloss\tbefore\treclassifications | 18.4 | 1.9 | 20.3 |
| Amounts\treclassified\tfrom\taccumulated\tother\n\t\t\tcomprehensive\tloss | (18.7) | — | (18.7) |
| Net\tcurrent-period\tother\tcomprehensive\tloss\t(income) | (0.3) | 1.9 | 1.6 |
| Balance\tas\tof\tDecember\t31,\t2015 | $41.6 | $(11.1) | $30.5 |

A	summary	of	reclassifications	out	of	accumulated	other	comprehensive	loss	(income)	for	the	years	ended	December	31,	2015,	2014	and	2013	follows:

| Recycling	commodity	hedges | $— | $— | $0.2 | Revenue |
| :--- | :--- | :--- | :--- | :--- |
| Fuel\thedges | (28.5) | 0.7 | 2.9 | \t Cost\tof\toperations |
| Interest\trate\tcontracts | (2.5) | (2.7) | (2.7) | Interest\texpense |
|  | (31.0) | (2.0) | 0.4 | \t Total\tbefore\ttax |
|  | 12.3 | 0.8 | (0.2) | \t Tax\tbenefit\t(expense) |
|  | (18.7) | (1.2) | 0.2 | \t Net\tof\ttax |
| Pension\tgains:\nPension\tsettlement | $— | $— | $3.5 | Selling,\tgeneral\tand\tadministrative |
|  | — | — | (1.4) | \t Tax\texpense |
|  | — | — | 2.1 | \t Net\tof\ttax |
| Total\t(loss)\tgain\treclassified\tinto\tearnings | $(18.7) | $(1.2) | $2.3 |  |

# 16. FINANCIAL	INSTRUMENTS

We	have	entered	into	multiple	swap	agreements	designated	as	cash	flow	hedges	to	mitigate	some	of	our	exposure	related	to	changes	in	diesel	fuel	prices.	These	swaps qualified	for,	and	were	designated	as,	effective	hedges	of	changes	in	the	prices	of	forecasted	diesel	fuel	purchases	(fuel	hedges).

The	following	table	summarizes	our	outstanding	fuel	hedges	as	of	December	31,	2015:

| Year | Gallons	Hedged | Weighted	Average	Contract<br>Price	per	Gallon |
| :--- | :--- | :--- |
| 2016 | 27,000,000 | $3.57 |
| 2017 | 12,000,000 | 2.92 |

If	the	national	U.S.	on-highway	average	price	for	a	gallon	of	diesel	fuel	as	published	by	the	Department	of	Energy	exceeds	the	contract	price	per	gallon,	we	receive	the difference	between	the	average	price	and	the	contract	price	(multiplied	by	the	notional	gallons)	from	the	counterparty.	If	the	average	price	is	less	than	the	contract	price per	gallon,	we	pay	the	difference	to	the	counterparty.

The	fair	values	of	our	fuel	hedges	are	determined	using	standard	option	valuation	models	with	assumptions	about	commodity	prices	based	on	those	observed	in underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	aggregate	fair	values	of	our	outstanding	fuel	hedges	as	of	December	31,	2015	and	2014	were	current liabilities	of	$37.8	million	and	$34.4	million,	respectively,	and	have	been	recorded	in	other	accrued	liabilities	in	our	consolidated	balance	sheets.	The	ineffective	portions of	the	changes	in	fair	values	resulted	in	a	loss	of	$0.4	million	and	$0.5	million	for	the	years	ended	December	31,	2015	and	2014	respectively,	and	a	gain	of	less	than	$0.1 million	for	the	year	ended	December	31,	2013,	and	have	been	recorded	in	other	income,	net	in	our	consolidated	statements	of	income.

Total	(loss)	gain	recognized	in	other	comprehensive	(loss)	income	for	fuel	hedges	(the	effective	portion)	was	$(2.0)	million,	$(24.2)	million	and	$2.4	million,	for	the years	ended	December	31,	2015,	2014	and	2013,	respectively.

Revenue	from	the	sale	of	recycled	commodities	is	primarily	from	sales	of	old	corrugated	cardboard	and	old	newspaper.	From	time	to	time	we	use	derivative	instruments such	as	swaps	and	costless	collars	designated	as	cash	flow	hedges	to	manage	our	exposure	to	changes	in	prices	of	these	commodities.	We	had	no	outstanding	recycling commodity	hedges	as	of	December	31,	2015	and	2014.	No	amounts	were	recognized	in	other	income,	net	in	our	consolidated	statements	of	income	for	the	ineffective portion	of	the	changes	in	fair	values	during	the	years	ended	December	31,	2015,	2014	and	2013.	Total	gain	(loss)	recognized	in	other	comprehensive	income	for recycling	commodity	hedges	(the	effective	portion)	was	$0.1	million	and	$(0.1)	million	for	the	years	ended	December	31,	2014	and	2013,	respectively.	No	amount	was recognized	in	other	comprehensive	income	for	2015.

In	measuring	fair	values	of	assets	and	liabilities,	we	use	valuation	techniques	that	maximize	the	use	of	observable	inputs	(Level	1)	and	minimize	the	use	of	unobservable inputs	(Level	3).	We	also	use	market	data	or	assumptions	that	we	believe	market	participants	would	use	in	pricing	an	asset	or	liability,	including	assumptions	about	risk when	appropriate.

The	carrying	value	for	certain	of	our	financial	instruments,	including	cash,	accounts	receivable,	accounts	payable	and	certain	other	accrued	liabilities,	approximates	fair value	because	of	their	short-term	nature.

As	of	December	31,	2015	and	2014,	our	assets	and	liabilities	that	are	measured	at	fair	value	on	a	recurring	basis	include	the	following:

|  | Carrying	Amount | Total | Fair	Value<br>Quoted<br>Prices	in<br>Active<br>Markets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Significant<br>Unobservable<br>Inputs<br>(Level	3) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |  |
| Money\tmarket\tmutual\tfunds | $43.0 | $43.0 | $43.0 | $— | $— |
| Bonds\t-\trestricted\tcash\tand\tmarketable\tsecurities\tand\tother\nassets | 56.3 | 56.3 | — | 56.3 | — |
| Interest\trate\tswaps\t-\tother\tassets | 16.5 | 16.5 | — | 16.5 | — |
| Total\tassets | $115.8 | $115.8 | $43.0 | $72.8 | $— |
| Liabilities: |  |  |  |  |  |
| Fuel\thedges\t-\tother\taccrued\tliabilities | $37.8 | $37.8 | $— | $37.8 | $— |
| Contingent\tconsideration\t-\tother\tlong-term\tliabilities | $69.6 | $69.6 | $— | $— | $69.6 |
| Total\tliabilities | $107.4 | $107.4 | $— | $37.8 | $69.6 |

|  | Carrying	Amount | Total | Quoted<br>Prices	in<br>Active<br>Markets<br>(Level	1) | Fair	Value<br>Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Significant<br>Unobservable<br>Inputs<br>(Level	3) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |  |
| Money\tmarket\tmutual\tfunds | $59.7 | $59.7 | $59.7 | $— | $— |
| Bonds\t-\trestricted\tcash\tand\tmarketable\tsecurities\tand\tother\nassets | 56.8 | 56.8 | — | 56.8 | — |
| Interest\trate\tswaps\t-\tother\tassets | 14.1 | 14.1 | — | 14.1 | — |
| Total\tassets | $130.6 | $130.6 | $59.7 | $70.9 | $— |
| Liabilities: |  |  |  |  |  |
| Fuel\thedges\t-\tother\taccrued\tliabilities | $34.4 | $34.4 | $— | $34.4 | $— |
| Total\tliabilities | $34.4 | $34.4 | $— | $34.4 | $— |

# Total	Debt

As	of	December	31,	2015,	the	carrying	value	of	our	total	debt	was	$7.6	billion	and	the	fair	value	of	our	total	debt	was	$8.2	billion.	As	of	December	31,	2014,	the carrying	value	of	our	total	debt	was	$7.1	billion	and	the	fair	value	of	our	total	debt	was	$8.0	billion.	The	estimated	fair	value	of	our	fixed	rate	senior	notes	and	debentures is	based	on	quoted	market	prices.	The	fair	value	of	our	remaining	notes	payable,	tax-exempt	financings	and	borrowings	under	our	credit	facilities	approximates	the carrying	value	because	the	interest	rates	are	variable.	The	fair	value	estimates	are	based	on	Level	2	inputs	of	the	fair	value	hierarchy	as	of	December	31,	2015	and	2014. See	Note	9,	Debt,	for	further	information	related	to	our	debt.

# Contingent	Consideration

In	April	2015,	we	entered	into	a	waste	management	contract	with	Sonoma	to	operate	the	county's	waste	management	facilities.	See	Note	3,	Business	Acquisitions,	for further	information	related	to	our	acquisition.	As	of	December	31,	2015,	the	Sonoma	contingent	consideration	represents	the	fair	value	of	$69.6	million	payable	to	the County	of	Sonoma	based	on	the	achievement	of	future	annual	tonnage	targets	through	the	expected	remaining	capacity	of	the	landfill,	which	we	estimate	to	be approximately	30	years.	The	contingent	consideration	liability	is	classified	within	Level	3	of	the	fair	value	hierarchy.

The	fair	value	of	the	contingent	consideration	was	determined	using	probability	assessments	of	the	expected	future	consideration	payments	over	the	remaining	useful	life of	the	landfill,	and	applying	a	discount	rate	of	4.0%.	The	future	consideration	payments	are	based	on	significant	inputs	that	are	not	observable	in	the	market.	Key assumptions	include	volume	of	annual	tons	disposed	at	the	landfill,	price	paid	per	annual	ton,	and	the	discount	rate	that	represent	the	best	estimates	of	management, which	are	subject	to	remeasurement	at	each	reporting	date.

# 17. COMMITMENTS	AND

# Legal	Proceedings

As	used	herein,	the	term	legal	proceedings	refers	to	litigation	and	similar	claims	against	us	and	our	subsidiaries,	excluding:	(1)	ordinary	course	accidents,	general commercial	liability	and	workers'	compensation	claims,	which	are	covered	by	insurance	programs,	subject	to	customary	deductibles,	and	which,	together	with	insured employee	health	care	costs,	are	discussed	in	Note	7,	Other	Liabilities;	and	(2)	environmental	remediation	liabilities,	which	are	discussed	in	Note	8,	Landfill	and Environmental	Costs.

We	accrue	for	legal	proceedings	when	losses	become	probable	and	reasonably	estimable.	We	have	recorded	an	aggregate	accrual	of	approximately	$65	million	relating to	our	outstanding	legal	proceedings	as	of	December	31,	2015.	As	of	the	end	of

each	applicable	reporting	period,	we	review	each	of	our	legal	proceedings	and,	where	it	is	probable	that	a	liability	has	been	incurred,	we	accrue	for	all	probable	and reasonably	estimable	losses.	Where	we	can	reasonably	estimate	a	range	of	losses	we	may	incur	regarding	such	a	matter,	we	record	an	accrual	for	the	amount	within	the range	that	constitutes	our	best	estimate.	If	we	can	reasonably	estimate	a	range	but	no	amount	within	the	range	appears	to	be	a	better	estimate	than	any	other,	we	use	the amount	that	is	the	low	end	of	such	range.	If	we	had	used	the	high	ends	of	such	ranges,	our	aggregate	potential	liability	would	be	approximately	$62	million	higher	than the	amount	recorded	as	of	December	31,	2015.

# Lease	Commitments

We	and	our	subsidiaries	lease	real	property,	equipment	and	software	under	various	operating	leases	with	remaining	terms	from	one	month	to	30	years.	Rent	expense during	the	years	ended	December	31,	2015,	2014	and	2013	was	$53.6	million,	$49.1	million	and	$47.8	million,	respectively.

Future	minimum	lease	obligations	under	non-cancelable	operating	leases	with	initial	terms	in	excess	of	one	year	as	of	December	31,	2015	are	as	follows:

| 2016 | $26.1 |
| :--- | :--- |
| 2017 | 26.9 |
| 2018 | 24.3 |
| 2019 | 22.3 |
| 2020 | 20.8 |
| Thereafter | 92.8 |

# Unconditional	Purchase	Commitments

# Royalties

We	have	entered	into	agreements	to	pay	royalties	to	prior	landowners,	lessors	or	host	communities,	based	on	waste	tonnage	disposed	at	specified	landfills.	These royalties	are	generally	payable	quarterly	and	amounts	incurred,	but	not	paid,	are	accrued	in	our	consolidated	balance	sheets.	Royalties	are	accrued	as	tonnage	is	disposed of	in	the	landfills.

# Disposal	Agreements

We	have	several	agreements	expiring	at	various	dates	through	2048	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.

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,	2015	are	as	follows:

# Restricted	Cash	and	Other	Financial	Guarantees

We	must	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	under	applicable	environmental	regulations	relating	to	our	landfill operations	for	capping,	closure	and	post-closure	costs,	and	our	performance	under	certain	collection,	landfill	and	transfer	station	contracts.	We	satisfy	our	financial assurance	requirements	by	providing	surety	bonds,	letters	of	credit,	insurance	policies	or	trust	deposits.	The	amount	of	the	financial	assurance	requirements	for	capping, closure

and	post-closure	costs	is	determined	by	applicable	state	environmental	regulations,	which	vary	by	state.	The	financial	assurance	requirements	for	capping,	closure	and post-closure	costs	can	either	be	for	costs	associated	with	a	portion	of	the	landfill	or	the	entire	landfill.	Generally,	states	will	require	a	third-party	engineering	specialist	to determine	the	estimated	capping,	closure	and	post-closure	costs	that	are	used	to	determine	the	required	amount	of	financial	assurance	for	a	landfill.	The	amount	of financial	assurance	required	can,	and	generally	will,	differ	from	the	obligation	determined	and	recorded	under	U.S.	GAAP.	The	amount	of	the	financial	assurance requirements	related	to	contract	performance	varies	by	contract.	Additionally,	we	are	required	to	provide	financial	assurance	for	our	insurance	program	and	collateral	for certain	performance	obligations.

We	had	the	following	financial	instruments	and	collateral	in	place	to	secure	our	financial	assurances	as	of	December	31:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Letters\tof\tcredit | $548.1 | $659.9 |
| Surety\tbonds | 3,055.8 | 2,952.7 |

The	outstanding	letters	of	credit	used	$503.3	million	and	$615.1	million	as	of	December	31,	2015	and	2014,	respectively,	of	availability	under	our	Credit	Facilities. Surety	bonds	subject	to	expiration	will	expire	on	various	dates	through	2021.

These	financial	instruments	are	issued	in	the	normal	course	of	business	and	are	not	debt.	Because	we	currently	have	no	liability	for	this	financial	assurance,	it	is	not reflected	in	our	consolidated	balance	sheets.	However,	we	have	recorded	capping,	closure	and	post-closure	obligations	and	insurance	reserves	as	they	are	incurred.

Our	restricted	cash	and	marketable	securities	include,	among	other	things,	restricted	cash	and	marketable	securities	held	for	capital	expenditures	under	certain	debt facilities,	restricted	cash	pursuant	to	a	holdback	arrangement,	restricted	cash	and	marketable	securities	pledged	to	regulatory	agencies	and	governmental	entities	as financial	guarantees	of	our	performance	related	to	our	final	capping,	closure	and	post-closure	obligations	at	our	landfills,	and	restricted	cash	and	marketable	securities related	to	our	insurance	obligations.

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

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Financing\tproceeds | $2.1 | $20.9 |
| Holdback\tescrow | 16.8 | 16.8 |
| Capping,\tclosure\tand\tpost-closure\tobligations | 27.3 | 26.7 |
| Insurance | 54.1 | 50.4 |
| Other | — | 0.8 |
| Total\trestricted\tcash\tand\tmarketable\tsecurities | $100.3 | $115.6 |

We	own	a	19.9%	interest	in	a	company	that,	among	other	activities,	issues	financial	surety	bonds	to	secure	capping,	closure	and	post-closure	obligations	for	companies operating	in	the	solid	waste	industry.	We	account	for	this	investment	under	the	cost	method	of	accounting.	There	have	been	no	identified	events	or	changes	in circumstances	that	may	have	a	significant	adverse	effect	on	the	recoverability	of	this	investment.	This	investee	company	and	the	parent	company	of	the	investee	had written	surety	bonds	for	us	relating	primarily	to	our	landfill	operations	for	capping,	closure	and	post-closure,	of	which	$1,228.1	million	were	outstanding	as	of December	31,	2015.	Our	reimbursement	obligations	under	these	bonds	are	secured	by	an	indemnity	agreement	with	the	investee	and	letters	of	credit.	There	were	no letters	of	credit	outstanding	as	of	December	31,	2015	and	2014.

We	have	no	off-balance	sheet	debt	or	similar	obligations,	other	than	operating	leases	and	the	financial	assurances	discussed	above,	which	are	not	classified	as	debt.	We have	no	transactions	or	obligations	with	related	parties	that	are	not	disclosed,	consolidated	into	or	reflected	in	our	reported	financial	position	or	results	of	operations.	We have	not	guaranteed	any	third-party	debt.

# Guarantees

We	enter	into	contracts	in	the	normal	course	of	business	that	include	indemnification	clauses.	Indemnifications	relating	to	known	liabilities	are	recorded	in	the consolidated	financial	statements	based	on	our	best	estimate	of	required	future	payments.

Certain	of	these	indemnifications	relate	to	contingent	events	or	occurrences,	such	as	the	imposition	of	additional	taxes	due	to	a	change	in	the	tax	law	or	adverse interpretation	of	the	tax	law,	and	indemnifications	made	in	divestiture	agreements	where	we	indemnify	the	buyer	for	liabilities	that	relate	to	our	activities	prior	to	the divestiture	and	that	may	become	known	in	the	future.	We	do	not	believe	that	these	contingent	obligations	will	have	a	material	effect	on	our	consolidated	financial position,	results	of	operations	or	cash	flows.

We	have	entered	into	agreements	with	property	owners	to	guarantee	the	value	of	property	that	is	adjacent	to	certain	of	our	landfills.	These	agreements	have	varying terms.	We	do	not	believe	that	these	contingent	obligations	will	have	a	material	effect	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

# Other	Matters

Our	business	activities	are	conducted	in	the	context	of	a	developing	and	changing	statutory	and	regulatory	framework.	Governmental	regulation	of	the	waste management	industry	requires	us	to	obtain	and	retain	numerous	governmental	permits	to	conduct	various	aspects	of	our	operations.	These	permits	are	subject	to revocation,	modification	or	denial.	The	costs	and	other	capital	expenditures	that	may	be	required	to	obtain	or	retain	the	applicable	permits	or	comply	with	applicable regulations	could	be	significant.	Any	revocation,	modification	or	denial	of	permits	could	have	a	material	adverse	effect	on	us.

# 18. SELECTED	QUARTERLY	FINANCIAL	DATA	(unaudited)

The	following	tables	summarize	our	unaudited	consolidated	quarterly	results	of	operations	as	reported	for	2015	and	2014:

|  | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter |
| :--- | :--- | :--- | :--- | :--- |
| 2015: |  |  |  |  |
| Revenue | $2,169.4 | $2,311.4 | $2,344.0 | $2,290.2 |
| Operating\tincome | 372.8 | 389.2 | 442.9 | 353.9 |
| Net\tincome | 172.5 | 190.3 | 215.2 | 172.4 |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc.(1) | 172.4 | 190.3 | 215.0 | 172.3 |
| Diluted\tearnings\tper\tcommon\tshare | 0.49 | 0.54 | 0.61 | 0.49 |
| 2014: |  |  |  |  |
| Revenue(1) | $2,077.2 | $2,229.2 | $2,267.9 | $2,229.1 |
| Operating\tincome(1) | 306.1 | 378.3 | 382.4 | 166.4 |
| Net\tincome | 132.6 | 179.0 | 185.8 | 50.5 |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | 132.5 | 179.0 | 185.8 | 50.3 |
| Diluted\tearnings\tper\tcommon\tshare | 0.37 | 0.50 | 0.52 | 0.14 |

(1)	-	Line	items	in	these	rows	do	not	total	to	amounts	reported	in	the	consolidated	statements	of	income	for	the	years	ended	December	31,	2015	and	2014	due	to	rounding.

During	the	fourth	quarter	of	2015,	we	recorded	charges	of	$4.1	million	for	withdrawal	events	at	the	multiemployer	pension	plan	to	which	we	contribute	related	to	our operations	in	Puerto	Rico,	as	well	as	$0.4	million	of	legal	charges.	During	the	third	quarter	of	2015,	we	recorded	a	reduction	to	remediation	expenses	of	$50.0	million related	to	an	insurance	recovery	at	our	closed	Bridgeton	Landfill.	During	2014,	environmental	remediation	charges	were	incurred	at	our	Bridgeton	Landfill,	of	which $36.1	million	was	recorded	during	the	first	quarter	of	2014,	and	$174.5	million	was	recorded	during	the	fourth	quarter	of	2014.

# ITEM	9. CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL DISCLOSURE

# ITEM	9A. CONTROLS	AND

# PROCEDURES

# REPORT	OF	MANAGEMENT	ON	REPUBLIC	SERVICES,	INC.'S	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

We,	as	members	of	management	of	Republic	Services,	Inc.,	are	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	such term	is	defined	in	Exchange	Act	Rule	13a-15(f).	Internal	control	over	financial

reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external purposes	in	accordance	with	generally	accepted	accounting	principles.	Internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	transactions	and	dispositions	of	our	assets;	(2)	provide	reasonable	assurance	that transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	our	receipts and	expenditures	are	being	made	only	in	accordance	with	authorizations	of	our	management	and	directors;	and	(3)	provide	reasonable	assurance	regarding	prevention	or timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	our	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	our	internal	control	systems	and	procedures	may	not	prevent	or	detect	misstatements.	An	internal	control	system,	no	matter	how	well conceived	and	operated,	can	provide	only	reasonable,	not	absolute,	assurance	that	the	objectives	of	the	control	system	are	met.	Because	of	the	inherent	limitations	in	all control	systems,	no	evaluation	of	controls	can	provide	absolute	assurance	that	all	control	issues	and	instances	of	fraud,	if	any,	have	been	detected.	Also,	projections	of any	evaluation	of	effectiveness	to	future	periods	are	subject	to	the	risks	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of compliance	with	the	policies	and	procedures	may	deteriorate.

We,	under	the	supervision	of	and	with	the	participation	of	our	management,	including	the	Chief	Executive	Officer,	Chief	Financial	Officer	and	Chief	Accounting Officer,	assessed	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	criteria	for	effective	internal	control	over	financial reporting	described	in	"Internal	Control	—	Integrated	Framework	(2013)"	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	Based	on this	assessment,	we	concluded	that	we	maintained	effective	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	the	specified	criteria.

Our	internal	control	over	financial	reporting	has	been	audited	by	Ernst	&	Young	LLP,	an	independent	registered	public	accounting	firm,	as	stated	in	their	attestation report	which	is	included	herein.

# Disclosure	Controls	and	Procedures

We	carried	out	an	evaluation,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	of the	effectiveness	of	our	disclosure	controls	and	procedures	(as	defined	in	Exchange	Act	Rules	13a-15(e),	and	15d-15(e))	as	of	the	end	of	the	period	covered	by	this Annual	Report.	Based	upon	that	evaluation,	our	Chief	Executive	Officer	and	Chief	Financial	Officer	concluded	that	our	disclosure	controls	and	procedures	were effective	as	of	the	end	of	the	period	covered	by	this	Annual	Report.

# Changes	in	Internal	Control	Over	Financial	Reporting

Based	on	an	evaluation,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	there has	been	no	change	in	our	internal	control	over	financial	reporting	during	the	period	covered	by	this	Form	10-K	identified	in	connection	with	that	evaluation,	that	has materially	affected,	or	is	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

We	acquired	Tervita	in	February	2015	(refer	to	Note	3,	Business	Acquisitions,	to	our	audited	consolidated	financial	statements	in	Item	8	of	this	Form	10-K).	As permitted	by	the	SEC	Staff	interpretive	guidance	for	newly	acquired	businesses,	we	excluded	Tervita	from	our	evaluation	of	internal	control	over	financial	reporting	as of	December	31,	2015.	We	will	continue	the	process	of	implementing	internal	controls	over	financial	reporting	for	Tervita.	As	of	December	31,	2015,	assets	excluded from	management's	assessment	totaled	approximately	$500	million	and	contributed	less	than	1%	of	revenue	to	our	audited	consolidated	financial	statements	for	the	year ended	December	31,	2015.

# ITEM	9B. OTHER	INFORMATION

# PART	III

# ITEM	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Election	of	Directors,"	"Biographical	Information	Regarding Directors/Nominees	and	Executive	Officers,"	"Board	of	Directors	and	Corporate	Governance	Matters,"	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance" and	"Executive	Officers"	in	the	Proxy	Statement	for	the	2016	Annual	Meeting	of	Shareholders.

# ITEM	11. EXECUTIVE	COMPENSATION

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Executive	Compensation"	and	"Director	Compensation"	in the	Proxy	Statement	for	the	2016	Annual	Meeting	of	Shareholders.

# ITEM	12. SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER MATTERS

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Security	Ownership	of	Five	Percent	Stockholders"	and "Security	Ownership	of	the	Board	of	Directors	and	Management"	in	the	Proxy	Statement	for	the	2016	Annual	Meeting	of	Shareholders.

The	following	table	sets	forth	certain	information	regarding	equity	compensation	plans	as	of	December	31,	2015	(number	of	securities	in	millions):

| Plan	Category | Number	of<br>Securities<br>to	be<br>Issued	Upon<br>Exercise	of<br>Outstanding<br>Options<br>and	Rights	(b) | Weighted	Average<br>Exercise	Price	of<br>Outstanding<br>Options<br>and	Rights	(c) | Number	of<br>Securities<br>Remaining<br>Available<br>for	Future	Issuance<br>Under	Equity<br>Compensation<br>Plans	(excluding<br>securities<br>reflected	in<br>the	first	column)	(d) |
| :--- | :--- | :--- | :--- |
| Equity\tcompensation\tplans\tapproved\tby\tsecurity\tholders\t(a) | 6.8 | $30.17 | 16.2 |
| Equity\tcompensation\tplans\tnot\tapproved\tby\tsecurity\tholders | — | — | — |
| Total | 6.8 | $30.17 | 16.2 |

(a) Includes	our	2006	Incentive	Stock	Plan,	Amended	and	Restated	2007	Stock	Incentive	Plan,	and	our	2009	Employee	Stock	Purchase	Plan (ESPP)

(b) Includes	5.0	million	stock	options,	1.7	million	shares	underlying	restricted	stock	units,	0.1	million	underlying	performance	shares,	and	less	than	0.1	million shares	underlying	purchase	rights	that	accrue	under	the	ESPP.

(c) Excludes	restricted	stock	units	and	performance	shares	as	these	awards	do	not	have	exercise prices.

(d) The	shares	remaining	available	for	future	issuances	include	15.6	million	shares	under	our	2007	Stock	Incentive	Plan	and	0.6	million	shares	under	our ESPP.

# ITEM	13. CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	heading	"Board	of	Directors	and	Corporate	Governance	Matters"	in the	Proxy	Statement	for	the	2016	Annual	Meeting	of	Shareholders.

# ITEM	14. PRINCIPAL	ACCOUNTING	FEES	AND

# SERVICES

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	heading	"Audit	and	Related	Fees"	in	the	Proxy	Statement	for	the	2016 Annual	Meeting	of	Shareholders.

# PART	IV

# ITEM	15. EXHIBITS,	FINANCIAL	STATEMENT	SCHEDULES

(a)	The	following	documents	are	filed	as	part	of	this	report:

# 1.	Financial	Statements

Our	consolidated	financial	statements	are	set	forth	under	Item	8	of	this	Form	10-K.

# 2.	Financial	Statement	Schedules

All	schedules	are	omitted	as	the	required	information	is	not	applicable	or	the	information	is	presented	in	the	consolidated	financial	statements	and	notes	thereto	in Item	8.

# 3.	Exhibits

The	following	exhibits	are	filed	herewith	or	are	incorporated	by	reference	to	exhibits	previously	filed	with	the	Commission,	as	indicated	in	the	description	of	each,	File No.	1-14267	in	the	case	of	Republic	and	File	No.	1-14705	and	No.	0-19285	in	the	case	of	Allied.

10.3+ Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	effective	May	12,	2011	(incorporated	by	reference	to	Appendix	A of	the	Company's	Proxy	Statement	on	Schedule	14A	filed	on	April	1,	2011).

10.4+ Form	of	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(for	awards	prior	to	October	28,	2011) (incorporated	by	reference	to	Exhibit	10.9	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

10.5+ Form	of	Non-NEO	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	(for	awards on	or	after	October	28,	2011)	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarter ended	September	30,	2011).

10.6+ Form	of	NEO	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	2007	Amended	and	Restated	Stock	Incentive	Plan	(for	awards	on or	after	October	28,	2011)	(incorporated	by	reference	to	Exhibit	10.2	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2011).

10.7+ Form	of	Non-NEO	Restricted	Stock	Agreement	under	the	Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	(for awards	on	or	after	October	28,	2011)	(incorporated	by	reference	to	Exhibit	10.3	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the quarter	ended	September	30,	2011).

10.8+ Form	of	NEO	Restricted	Stock	Agreement	under	the	Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	(for	awards on	or	after	October	28,	2011)	(incorporated	by	reference	to	Exhibit	10.4	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarter ended	September	30,	2011).

10.9+ Form	of	Employee	Restricted	Stock	Unit	Agreement	under	the	Republic	Services,	Inc.	Amended	and	Restated	2007	Stock	Incentive	Plan	(for awards	on	or	after	December	27,	2011)	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K	dated December	27,	2011).

10.15+ Employment	Agreement,	effective	as	of	October	29,	2013,	by	and	between	Republic	Services,	Inc.	and	Donald	W.	Slager	(incorporated	by reference	to	Exhibit	10.1	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2013).

10.16+ Employment	Agreement,	dated	December	5,	2008,	between	Michael	Rissman	and	Republic	Services,	Inc.	(now	superseded)	(incorporated	by reference	to	Exhibit	10.1	of	Republic's	Current	Report	on	Form	8-K	filed	on	February	12,	2010).

10.17+ Memorandum	dated	February	9,	2010,	terminating	Employment	Agreement,	dated	December	5,	2008,	between	Michael	Rissman	and Republic	Services,	Inc.(	incorporated	by	reference	to	Exhibit	10.2	of	Republic's	Current	Report	on	Form	8-K	filed	on	February	12,	2010).

10.26+ Republic	Services,	Inc.	2006	Incentive	Stock	Plan	(f/k/a	Amended	and	Restated	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan),	as amended	and	restated	effective	December	5,	2008	(incorporated	by	reference	to	Exhibit	10.51	of	the	Company's	Annual	Report	on	Form	10- K	for	the	year	ended	December	31,	2008).

10.27+ Form	of	Nonqualified	Stock	Option	Agreement	under	the	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan	(incorporated	by	reference to	Exhibit	10.3	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	September	30,	2006).

10.28+ Form	of	Indemnity	Agreement	between	Allied	Waste	Industries,	Inc.	and	legacy	Allied	directors	(incorporated	by	reference	to	Exhibit	10.19 of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	March	31,	2004).

10.34+ Form	of	Employee	Restricted	Stock	Unit	Agreement,	dated	May	23,	2014,	by	and	between	Robert	Maruster	and	Republic	Services,	Inc. (incorporated	by	reference	to	Exhibit	10.2	of	the	Company's	Current	Report	on	Form	8-K	dated	June	2,	2014).

10.35+ Offer	Letter,	dated	August	22,	2014,	by	and	between	Charles	F.	Serianni	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit 10.1	of	the	Company's	Current	Report	on	Form	8-K	dated	August	25,	2014).

10.36+ Clawback	Policy,	dated	October	29,	2014	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K	dated October	30,	2014).

10.39+ Form	of	Employee	Restricted	Stock	Unit	Agreement	-	Senior	Executive,	adopted	January	7,	2015	(incorporated	by	reference	to	Exhibit	10.2 of	the	Company's	Current	Report	on	Form	8-K	dated	January	9,	2015).

10.40+ Amendment	No.	4	to	Republic	Services,	Inc.	Deferred	Compensation	Plan,	effective	February	10,	2015	(incorporated	by	reference	to	Exhibit 10.53	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2014).

21.1* Subsidiaries	of	the	Company.

32.1* Section	1350	Certification	of	Chief	Executive	Officer.

32.2* Section	1350	Certification	of	Chief	Financial	Officer.

101.INS* 	 XBRL	Instance	Document

101.SCH* 	 XBRL	Taxonomy	Extension	Schema	Document

101.CAL* 	 XBRL	Taxonomy	Extension	Calculation	Linkbase	Document

101.LAB* 	 XBRL	Taxonomy	Extension	Labels	Linkbase	Document

101.PRE* 	 XBRL	Taxonomy	Extension	Presentation	Linkbase	Document

101.DEF* 	 XBRL	Taxonomy	Extension	Definition	Linkbase	Document

*	Filed	herewith

**	This	exhibit	is	being	furnished	rather	than	filed,	and	shall	not	be	deemed	incorporated	by	reference	into	any	filing,	in	accordance	with	Item	601	of	Regulation	S-K. +	Indicates	a	management	or	compensatory	plan	or	arrangement.

# Signatures

Pursuant	to	the	requirements	of	Sections	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	Registrant,	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the undersigned,	thereunto	duly	authorized.

Donald	W.	Slager

President	and

Chief	Executive	Officer

(Principal	Executive	Officer)

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	Registrant	and	in	the capacities	and	on	the	dates	indicated.



Question: in 2015 what was the the percentage change in the account balance
Answer: 20.1%