01—Abstract
Summary
Summary of the 10-Q filed October 31, 2014. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported financial results for the nine months ended September 30, 2014, demonstrating solid revenue growth driven by increased volumes and pricing.
For the nine-month period, revenue rose by 4.6% to $6.56 billiona compared to the prior year. Net income attributable to Republic Services, Inc. saw a significant increase of approximately 41% to $497.3 million, resulting in diluted earnings per share of $1.39, up from $0.97 in the same period last year.
This strong performance was partially aided by a decrease in negotiation and withdrawal costs related to the Central States Pension Fund and a substantial decrease in environmental remediation charges, particularly at the Bridgeton Landfill, when compared to the prior year's nine-month period. The company also maintained robust operating income and is actively managing its capital structure and returning value to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Revenue for the first nine months of 2014 increased by 4.6% to $6.56 billion, driven by a 2.1% increase in volume and a 1.3% average yield increase.
- Net income attributable to Republic Services, Inc. grew by approximately 41% to $497.3 million for the nine-month period, with diluted EPS rising to $1.39 from $0.97 year-over-year.
- Operating income for the nine months increased to $1.07 billion, up from $807.7 million in the prior year, reflecting improved operational efficiencies and reduced significant charges.
- The company's balance sheet remained strong, with total assets of $19.99 billion and total liabilities of $11.99 billion as of September 30, 2014.
- Cash provided by operating activities was $1.10 billion for the nine months ended September 30, 2014, demonstrating strong cash generation from core operations.
- Republic Services returned capital to shareholders through $277.3 million in share repurchases and $279.1 million in cash dividends paid during the nine months ended September 30, 2014.
- The company refinanced its credit facilities in June 2014, securing a $1.25 billion revolving credit facility maturing in June 2019, enhancing financial flexibility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2014, Republic Services, Inc. kept $0.08.
- Revenue$2.27B100.0%
- Cost of revenue−$1.40B61.8%
- Gross profit$866.8M38.2%
- Operating costs−$484.4M21.4%
- Operating income$382.4M16.9%
- Interest, other & tax−$196.6M8.7%
- Net income$185.8M8.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2014filed October 31, 2014Financial Statements
Q3 FY2014 against Q3 FY2013
| Line item | Q3 FY2014Q3 FY2013 | Change |
|---|---|---|
| Revenue | $2.27B$2.17B | +4.7% |
| Cost of Revenue | $1.40B$1.32B | +6.3% |
| Gross Profit | $866.80M$847.80M | +2.2% |
| SG&A Expenses | $229.00M$209.60M | +9.3% |
| Operating Income | $382.40M$352.30M | +8.5% |
| Interest Expense | $87.00M$90.00M | −3.3% |
| Net Income | $185.80M$171.40M | +8.4% |
| EPS (Basic) | $0.52$0.47 | +10.6% |
| EPS (Diluted) | $0.52$0.47 | +10.6% |
| Shares Outstanding (Basic) | 356.25M361.67M | −1.5% |
| Shares Outstanding (Diluted) | 357.74M363.00M | −1.4% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the first nine months of 2014?
Revenue growth was primarily driven by an increase in collection and landfill volumes (2.1%) and an average yield increase (1.3%), reflecting improved business activity and positive pricing across various service lines.
How did the company manage its significant environmental remediation charges compared to the prior year?
Republic Services experienced a significant reduction in environmental remediation charges in the first nine months of 2014 compared to the same period in 2013, particularly related to the Bridgeton Landfill. This reduction contributed positively to net income and earnings per share.
What is the company's outlook for earnings per share (EPS) for the full year 2014 and preliminary outlook for 2015?
For the full year 2014, the company anticipated adjusted diluted EPS to be in the range of $1.93 to $1.94. The preliminary outlook for fiscal year 2015 projected diluted EPS to be in the range of $2.02 to $2.06.
How is the company managing its debt and financial flexibility?
Republic Services has a well-managed debt structure, with an investment-grade credit rating. In June 2014, they entered into a new $1.25 billion revolving credit facility maturing in 2019, which replaced a previous facility. This, along with strong operating cash flows, provides ample financial flexibility for operations, capital expenditures, and strategic initiatives.
06—Continue