10-KPeriod: FY2016

REPUBLIC SERVICES, INC. Annual Report, Year Ended Dec 31, 2016

Filed February 17, 2017For Securities:RSG

Summary

Republic Services, Inc.'s 2016 10-K filing details a company focused on strategic growth and operational efficiency within the competitive non-hazardous solid waste services industry. The company emphasizes its 'Five Pillars of Strategy'—market position, operating model, people and talent agenda, customer zeal, and digital platform—as drivers for profitable growth. Republic's extensive operations span 39 states and Puerto Rico, supported by a robust network of collection operations, transfer stations, landfills, and recycling centers. The company is actively investing in fleet automation and the transition to compressed natural gas (CNG) vehicles to enhance efficiency and environmental sustainability. Acquisitions remain a key growth driver, with a stated annual investment of approximately $100 million, complemented by a focus on organic growth through volume and price increases. The company is also committed to returning value to shareholders through dividends and share repurchases, underscoring its financial discipline and commitment to long-term shareholder value creation.

Financial Highlights

54 data points
Beta

Revenue

$9.39B

38.6% Gross Margin

Net Income

$612.59M

6.5% Net Margin

EPS (Diluted)

$1.78

Total Assets

$20.63B

Cash & Equivalents

$67.80M

Free Cash Flow

$920.00M

Financial Statements
Beta
Revenue$9.39B
Cost of Revenue$5.76B
Gross Profit$3.62B
SG&A Expenses$969.80M
Operating Income$1.54B
Interest Expense$371.30M
Net Income$612.59M
EPS (Basic)$1.79
EPS (Diluted)$1.78
Shares Outstanding (Basic)343.02M
Shares Outstanding (Diluted)344.39M

Key Highlights

  • 1Republic Services is the second-largest provider of non-hazardous solid waste collection, transfer, recycling, disposal, and energy services in the United States.
  • 2The company's strategy, 'Profitable Growth through Differentiation,' is built on five key pillars: market position, operating model, people and talent agenda, customer zeal, and digital platform.
  • 3Operations are conducted across 39 states and Puerto Rico, utilizing a network of 333 collection operations, 204 transfer stations, 192 active landfills, and 64 recycling centers.
  • 4Significant investment in fleet automation (74% of residential routes automated) and a gradual conversion to Compressed Natural Gas (CNG) vehicles are underway to improve efficiency and reduce emissions.
  • 5The company maintains a disciplined acquisition strategy, with a steady pace of tuck-in acquisitions expected to be around $100 million annually, alongside flexibility for larger strategic acquisitions.
  • 6Republic Services is committed to enhancing shareholder value through a consistent dividend increase (7% in 2016) and a robust share repurchase program.
  • 7The company highlights its strong safety record, noting it has been 41% better than the industry average over the past nine years, and drivers have won 75% of NWRA Driver of the Year awards since 2009.

Frequently Asked Questions

Republic Services generates revenue primarily from its solid waste collection services (approximately 76% of total revenue), which include residential, small-container commercial, and large-container industrial collection. Additional revenue comes from transfer station fees, landfill disposal tipping fees, recycling services, and energy services.

The company focuses on operational efficiency through initiatives like fleet automation (74% of residential routes use automated trucks), conversion of its fleet to Compressed Natural Gas (CNG) vehicles (18% of fleet in 2016), and a standardized vehicle maintenance program called 'OneFleet'. These efforts aim to reduce labor costs, improve driver productivity, decrease emissions, and create a safer work environment.

Republic Services pursues growth through a combination of internal and external strategies. Internal growth is driven by volume increases (population and business growth) and price increases to offset costs and improve margins. External growth is achieved through acquisitions of complementary solid waste and recycling companies and public-private partnerships. The company plans for steady tuck-in acquisitions of approximately $100 million annually.

The company is committed to environmental responsibility and sustainability, focusing on five areas: operations, materials management, communities, safety, and people. Initiatives include reducing vehicle emissions, developing landfill gas-to-energy projects, increasing recycling capacity, and reducing greenhouse gas emissions. Republic Services has been recognized for its sustainability efforts, including being named to the CDP Climate A List and inducted into the Dow Jones Sustainability Indices.