01—Abstract
Summary
Summary of the 10-K filed February 13, 2014. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) filed its 10-K for the fiscal year ended December 30, 2013, highlighting its position as the second-largest provider of non-hazardous solid waste services in the United States.
The company operates a vast network of 336 collection operations across 39 states and Puerto Rico, supported by 199 transfer stations, 190 landfills, and 69 recycling centers. The report emphasizes the company's commitment to safety, compliance, sustainability, and customer experience as core operational priorities. Financial performance for 2013 showed revenue growth driven by yield, volume, and acquisition activity, though operating income saw a slight decline due to increased costs, including significant pension withdrawal liabilities.
RSG is focused on creating shareholder value through consistent earnings and cash flow growth, supported by a solid capital structure and an investment-grade credit rating. The company continued its strategic initiatives, including fleet automation and conversion to compressed natural gas (CNG), as well as investments in recycling capabilities.
Shareholder returns were further supported by dividend payments and an active share repurchase program. Investors should note the material impact of the Central States Pension Fund withdrawal costs, environmental remediation charges at Bridgeton Landfill, and the ongoing competitive landscape within the waste management industry.
02—Key points
Key Highlights
- Republic Services is the second-largest provider of non-hazardous solid waste services in the US, operating extensive collection, transfer, recycling, and landfill operations.
- The company emphasizes core priorities including safety, compliance, sustainability, and customer experience.
- Revenue for 2013 grew by 3.7% to $8.4 billion, driven by price increases (yield and fuel recovery), volume, and acquisitions.
- Significant one-time charges impacted operating income, notably $157.7 million related to the Central States Pension and Other Funds and $108.7 million for Bridgeton remediation.
- The company returned capital to shareholders through dividends and share repurchases, totaling $348.5 million and $213.6 million, respectively, in 2013.
- RSG maintained a strong capital structure with investment-grade credit ratings and had $1.5 billion in availability under its credit facilities as of year-end 2013.
- The company is strategically converting its fleet to compressed natural gas (CNG), with 12% of the fleet operating on natural gas by the end of 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Republic Services, Inc. kept $0.07.
- Revenue$8.42B100.0%
- Cost of revenue−$5.23B62.2%
- Gross profit$3.18B37.8%
- Operating costs−$1.97B23.4%
- Operating income$1.21B14.4%
- Interest, other & tax−$621.4M7.4%
- Net income$588.9M7.0%
Where FY2013 revenue went
$8.42B- Cost of revenue: $5.23B, 62% of revenue
- Other operating costs: $1.12B, 13% of revenue
- Net income: $588.9M, 7.0% of revenue
- SG&A: $853.8M, 10% of revenue
- Interest, other & tax: $621.4M, 7.4% of revenue
Kept 7.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 13, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $8.42B$8.12B | +3.7% |
| Cost of Revenue | $5.23B$5.01B | +4.6% |
| Gross Profit | $3.18B$3.11B | +2.2% |
| SG&A Expenses | $853.80M$820.90M | +4.0% |
| Operating Income | $1.21B$1.32B | −8.4% |
| Interest Expense | $360.00M$388.50M | −7.3% |
| Net Income | $588.90M$571.80M | +3.0% |
| EPS (Basic) | $1.63$1.56 | +4.5% |
| EPS (Diluted) | $1.62$1.55 | +4.5% |
| Shares Outstanding (Basic) | 362.05M366.88M | −1.3% |
| Shares Outstanding (Diluted) | 363.42M368.02M | −1.2% |
05—Questions
Frequently Asked Questions
What was Republic Services' revenue and profitability in 2013?
In 2013, Republic Services reported revenue of $8.42 billion, a 3.7% increase from 2012. Operating income was $1.21 billion, a decrease from $1.32 billion in 2012, primarily due to significant charges related to pension withdrawal liabilities and environmental remediation.
How is the company managing its debt and capital structure?
Republic Services maintains a focus on an efficient capital structure and investment-grade credit ratings. As of December 31, 2013, the company had approximately $7 billion in total debt. It had $1.5 billion in availability under its credit facilities and was in compliance with all debt covenants. The company refinanced debt in previous years to reduce average coupon rates and extend maturities.
What are the key growth strategies and investments for Republic Services?
The company's growth strategies include internal growth through price and volume increases, acquisitions of complementary businesses, and expansion of recycling capabilities. Investments in 2013 included approximately $880.8 million in property and equipment, with a focus on fleet automation (66% of residential routes converted) and a gradual fleet conversion to compressed natural gas (CNG), with 50% of replacement vehicle purchases in 2013 being CNG vehicles.
What significant charges or one-time items impacted the company's financial results in 2013?
The company incurred substantial charges in 2013, including $157.7 million for negotiation and withdrawal costs related to the Central States Pension and Other Funds, and $108.7 million for environmental remediation at the Bridgeton Landfill. A tax valuation allowance adjustment also favorably impacted the effective tax rate.
06—Continue