01—Abstract
Summary
Summary of the 10-K filed February 9, 2018. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported strong performance in its 2017 10-K filing, showcasing a 7.0% increase in revenue to $10.04 billiona, driven by a combination of price increases, volume growth, and strategic acquisitions.
The company highlighted its "Five Pillars of Strategy" focused on Profitable Growth through Differentiation, emphasizing market position, operational efficiency, people and talent, customer zeal, and a digital platform. This strategic approach aims to enhance customer loyalty and drive higher revenue and profits. The company also demonstrated a commitment to shareholder returns, increasing its quarterly dividend and continuing its share repurchase program.
Republic Services continues to invest in fleet modernization, with a growing percentage of its fleet operating on compressed natural gas (CNG), and maintains a strong focus on safety and employee development, evidenced by its safety performance being 41%b better than the industry average over the past decade. Despite facing competitive pressures and regulatory environments, Republic Services appears well-positioned for continued growth and value creation.
02—Key points
Key Highlights
- Revenue increased by 7.0% to $10.04 billion in 2017, driven by price increases (2.9%), volume growth (1.8%), acquisitions (0.8%), recycled commodities (0.9%), and energy services (0.6%).
- The company operates under a 'Five Pillars of Strategy' focusing on market position, operating model, people and talent, customer zeal, and digital platform to achieve profitable growth.
- Republic Services returned significant capital to shareholders, increasing the quarterly dividend by 8% and adding $2.0 billion to its share repurchase authorization.
- The company is investing in fleet modernization, with 19% of its fleet operating on Compressed Natural Gas (CNG) and 75% of residential routes automated.
- Safety remains a priority, with the company reporting 41% better safety performance than the industry average over the past decade.
- Despite a challenging regulatory environment and competitive landscape, the company maintains strong market positions in its served areas.
- Republic Services' landfill operations have a significant estimated remaining disposal capacity, with an average site life of 63 years, providing a long-term operational runway.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Republic Services, Inc. kept $0.13.
- Revenue$10.04B100.0%
- Cost of revenue−$6.21B61.9%
- Gross profit$3.83B38.1%
- Operating costs−$2.16B21.5%
- Operating income$1.67B16.6%
- Interest, other & tax−$390.1M3.9%
- Net income$1.28B12.7%
Where FY2017 revenue went
$10.04B- Cost of revenue: $6.21B, 62% of revenue
- Net income: $1.28B, 13% of revenue
- SG&A: $1.06B, 11% of revenue
- Other operating costs: $1.10B, 11% of revenue
- Interest, other & tax: $390.1M, 3.9% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 9, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $10.04B$9.39B | +7.0% |
| Cost of Revenue | $6.21B$5.76B | +7.8% |
| Gross Profit | $3.83B$3.62B | +5.6% |
| SG&A Expenses | $1.06B$969.80M | +9.0% |
| Operating Income | $1.67B$1.54B | +8.5% |
| Interest Expense | $361.90M$371.30M | −2.5% |
| Net Income | $1.28B$612.59M | +108.7% |
| EPS (Basic) | $3.79$1.79 | +111.7% |
| EPS (Diluted) | $3.77$1.78 | +111.8% |
| Shares Outstanding (Basic) | 337.05M343.02M | −1.7% |
| Shares Outstanding (Diluted) | 338.98M344.39M | −1.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of Republic Services' revenue growth in 2017?
Republic Services' revenue grew by 7.0% in 2017 to $10.04 billion. This growth was primarily driven by price increases (2.9%), volume growth (1.8%), and contributions from acquisitions (0.8%), along with positive impacts from recycled commodities (0.9%) and energy services (0.6%).
How is Republic Services focusing on sustainability and environmental responsibility?
Republic Services is committed to sustainability, focusing on five areas: operations, materials management, communities, safety, and people. They aim to reduce emissions, increase recycling capacity, and are investing in landfill gas-to-energy projects. The company has also been recognized for its sustainability performance by being named to the North American and World Dow Jones Sustainability Indices for a second consecutive year.
What is the company's strategy for capital allocation and shareholder returns?
Republic Services employs a balanced approach to capital allocation, prioritizing investment in acquisitions and returning the majority of free cash flow to shareholders through dividends and share repurchases. The company has a consistent track record of increasing its quarterly dividend and has a substantial share repurchase authorization.
What are the company's key operational strengths or differentiators?
The company's strategy is built on five pillars: market position (aiming for number one or two in markets), operating model ('The Republic Way' for consistent service), people and talent (attracting and retaining top employees), customer zeal (driving loyalty through differentiated services), and a digital platform (enhancing customer convenience and access to information).
06—Continue