10-KPeriod: FY2020

REPUBLIC SERVICES, INC. Annual Report, Year Ended Dec 31, 2020

Filed February 23, 2021For Securities:RSG

Summary

Republic Services, Inc. (RSG) reported its 2020 full-year results, demonstrating resilience despite the economic impacts of the COVID-19 pandemic. The company maintained its position as a leading provider of environmental services in the U.S., operating a vast network of facilities across 41 states. Financially, RSG generated revenue of $10.15 billion, a slight decrease of 1.4% year-over-year, primarily attributed to reduced volumes stemming from the pandemic. However, the company managed its costs effectively, with operating income remaining strong at $1.71 billion. RSG continued its commitment to shareholder returns through dividends and share repurchases, reflecting a stable financial strategy supported by its investment-grade credit ratings. The company also highlighted its strategic focus on operational efficiency, sustainability, and technological advancement as key drivers for future profitable growth.

Financial Highlights

53 data points
Beta

Revenue

$10.15B

39.9% Gross Margin

Net Income

$969.60M

9.5% Net Margin

EPS (Diluted)

$3.02

Total Assets

$23.43B

Cash & Equivalents

$38.20M

Free Cash Flow

$1.28B

Financial Statements
Beta
Revenue$10.15B
Cost of Revenue$6.10B
Gross Profit$4.05B
SG&A Expenses$1.05B
Operating Income$1.71B
Interest Expense$355.60M
Net Income$969.60M
EPS (Basic)$3.03
EPS (Diluted)$3.02
Shares Outstanding (Basic)319.28M
Shares Outstanding (Diluted)319.84M

Key Highlights

  • 1Republic Services reported $10.15 billion in revenue for 2020, a 1.4% decrease year-over-year, largely due to pandemic-related volume declines.
  • 2The company maintained a robust operating income of $1.71 billion, demonstrating effective cost management.
  • 3RSG is committed to shareholder returns, with a quarterly dividend of $0.425 per share and an ongoing $2.0 billion share repurchase authorization.
  • 4The company's operational strategy is underpinned by three foundational elements: market position, operating model ('The Republic Way'), and human capital management.
  • 5Republic Services continues to invest in fleet modernization, with 77% of residential routes automated and ongoing pilots for electric trucks.
  • 6The company is focused on sustainability, with ambitious 2030 goals including reducing Scope 1 and 2 greenhouse gas emissions by 35% and increasing the recovery of key materials by 40%.
  • 7Despite a challenging environment, RSG managed its debt effectively, maintaining investment-grade credit ratings.

Frequently Asked Questions

The COVID-19 pandemic led to a decrease in revenue by 1.4% to $10.15 billion, primarily due to reduced collection volumes from small- and large-container customers and a decline in landfill/transfer station volumes. The company incurred approximately $68.4 million in incremental costs directly related to the pandemic, such as safety equipment and cleaning, but also experienced cost savings in variable operating expenses.

RSG's strategy focuses on profitable growth through three foundational elements: developing a leading market position (aiming for #1 or #2 in each market), executing a standardized operating model ('The Republic Way') for efficiency, and investing in human capital. Growth is driven by internal factors like volume and price increases, and external factors such as acquisitions and public-private partnerships. The company also prioritizes sustainability and digital capabilities to differentiate itself.

As of December 31, 2020, RSG had approximately $9 billion in debt and maintained investment-grade credit ratings. The company's cash utilization strategy involves investing in acquisitions and returning free cash flow to shareholders through dividends and share repurchases. The Board approved a $2.0 billion share repurchase authorization for 2021-2023, and quarterly dividends have been increased, demonstrating a commitment to shareholder value.

Key risks include intense competition in the environmental services industry, fluctuations in fuel and recycled commodity prices, the potential for increased operating costs not fully offset by price increases, the capital-intensive nature of the business, and the impact of environmental and flow control regulations. The company also faces risks related to cybersecurity, climate change, and potential disruptions from labor actions or severe weather.