01—Abstract
Summary
Summary of the 10-K filed February 12, 2016. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported a solid financial performance for the year ending December 31, 2015.
The company, a leading provider of non-hazardous solid waste management services, saw revenue increase by 3.5% to $9.115 billiona, driven by a combination of price increases (average yield), volume growth, and strategic acquisitions. Net income attributable to Republic Services, Inc. rose significantly to $749.9 million, translating to diluted earnings per share of $2.13, up from $1.53 in the prior year. This performance reflects the company's successful execution of its 'Profitable Growth through Differentiation' strategy, which focuses on market leadership, operational efficiency, people development, customer focus, and digital innovation.
The company demonstrated strong cash flow generation, with cash provided by operating activities reaching $1.68 billionb. Republic Services continued to return value to shareholders through increased dividends and share repurchases.
The company also highlighted its commitment to sustainability and efficient operations, including fleet modernization with Compressed Natural Gas (CNG) vehicles and a focus on safety. Despite potential risks related to economic conditions, fuel price volatility, and regulatory changes, Republic Services appears well-positioned for continued growth and profitability.
02—Key points
Key Highlights
- Revenue increased by 3.5% to $9.115 billion, driven by price increases, volume growth, and acquisitions.
- Net income attributable to Republic Services, Inc. grew to $749.9 million, resulting in diluted earnings per share of $2.13, a significant increase from $1.53 in the prior year.
- Cash flow from operations was robust at $1.68 billion, supporting investments and shareholder returns.
- The company continued its commitment to shareholder returns by increasing dividends and executing share repurchases.
- Republic Services is actively modernizing its fleet with 16% of vehicles operating on CNG and continuing to convert its fleet to this more environmentally friendly fuel.
- The company emphasized its strategic focus on 'Profitable Growth through Differentiation,' underpinned by five key pillars: market position, operating model, people and talent, customer zeal, and digital platform.
- Significant remediation charges and insurance recoveries related to the Bridgeton Landfill were noted, with an insurance recovery of $50 million in 2015 offsetting remediation expenses.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Republic Services, Inc. kept $0.08.
- Revenue$9.12B100.0%
- Cost of revenue−$5.52B60.5%
- Gross profit$3.60B39.5%
- Operating costs−$2.04B22.4%
- Operating income$1.56B17.1%
- Interest, other & tax−$808.9M8.9%
- Net income$749.9M8.2%
Where FY2015 revenue went
$9.12B- Cost of revenue: $5.52B, 61% of revenue
- Net income: $749.9M, 8.2% of revenue
- SG&A: $983.1M, 11% of revenue
- Other operating costs: $1.05B, 12% of revenue
- Interest, other & tax: $808.9M, 8.9% of revenue
Kept 8.2% as net incomeNet income $749.9M · 8.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 12, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $9.12B$8.80B | +3.5% |
| Cost of Revenue | $5.52B$5.64B | −2.2% |
| Gross Profit | $3.60B$3.16B | +13.8% |
| SG&A Expenses | $983.10M$918.90M | +7.0% |
| Operating Income | $1.56B$1.23B | +26.4% |
| Interest Expense | $364.90M$348.70M | +4.6% |
| Net Income | $749.91M$547.60M | +36.9% |
| EPS (Basic) | $2.14$1.54 | +39.0% |
| EPS (Diluted) | $2.13$1.53 | +39.2% |
| Shares Outstanding (Basic) | 349.98M356.67M | −1.9% |
| Shares Outstanding (Diluted) | 351.39M358.11M | −1.9% |
05—Questions
Frequently Asked Questions
What was Republic Services' revenue and net income for the fiscal year ending December 31, 2015?
For the fiscal year ending December 31, 2015, Republic Services reported revenue of $9.115 billion and net income attributable to Republic Services, Inc. of $749.9 million, or $2.13 per diluted share.
How did Republic Services drive revenue growth in 2015?
Republic Services' revenue growth in 2015 was driven by a 2.3% increase in average yield (pricing), a 1.1% increase in volume, and a 2.2% increase from acquisitions, partially offset by a 1.4% decrease in fuel recovery fees and a 0.7% decrease in recycled commodity revenue.
What is the company's strategy for operational efficiency and sustainability?
Republic Services focuses on operational efficiency through its 'Republic Way' initiative, standardizing processes and leveraging scale. Sustainability efforts include fleet modernization (e.g., CNG vehicles), landfill gas-to-energy projects, and an increased focus on recycling capabilities.
Are there any significant ongoing legal or environmental matters impacting the company?
The company is involved in legal proceedings, including matters related to the Bridgeton Landfill in Missouri concerning odors, leachate, and alleged environmental violations, which led to a lawsuit seeking significant civil penalties. Republic Services believes it has adequate reserves to address legal matters, but the outcomes remain uncertain and could materially impact financial results.
06—Continue