10-QPeriod: Q3 FY2015

REPUBLIC SERVICES, INC. Quarterly Report for Q3 Ended Sep 30, 2015

Filed October 30, 2015For Securities:RSG

Summary

Republic Services, Inc. (RSG) reported solid financial results for the nine months ended September 30, 2015. Revenue increased by 3.8% year-over-year, driven by a combination of average yield increases, volume growth, and strategic acquisitions. The company demonstrated effective cost management, with operating income increasing by 13.0% for the nine-month period, resulting in improved operating margins. Key financial highlights include robust operating cash flow generation and a significant increase in capital expenditures, largely due to acquisitions. The company also continued its commitment to returning capital to shareholders through share repurchases and dividend payments. Despite ongoing investments and acquisitions, Republic Services maintained a strong liquidity position, with substantial availability under its credit facilities.

Financial Highlights

54 data points
Beta

Revenue

$2.34B

40.7% Gross Margin

Net Income

$215.00M

9.2% Net Margin

EPS (Diluted)

$0.61

Total Assets

$20.79B

Cash & Equivalents

$102.50M

Free Cash Flow

$190.50M

Financial Statements
Beta
Revenue$2.34B
Cost of Revenue$1.39B
Gross Profit$953.80M
SG&A Expenses$244.10M
Operating Income$442.90M
Interest Expense$91.80M
Net Income$215.00M
EPS (Basic)$0.62
EPS (Diluted)$0.61
Shares Outstanding (Basic)348.94M
Shares Outstanding (Diluted)350.28M

Key Highlights

  • 1Revenue increased by 3.8% to $6.82 billion for the nine months ended September 30, 2015, compared to $6.57 billion in the prior year period.
  • 2Operating income grew by 13.0% to $1.20 billion for the nine months ended September 30, 2015, from $1.07 billion in the same period last year.
  • 3Diluted earnings per share (EPS) increased to $1.64 for the nine months ended September 30, 2015, up from $1.39 in the comparable period of 2014.
  • 4Cash provided by operating activities was $1.32 billion for the nine months ended September 30, 2015, an increase from $1.10 billion in the prior year.
  • 5Capital expenditures for the nine months ended September 30, 2015 totaled $732.0 million, up from $683.1 million in the prior year, driven by acquisitions and investments in property and equipment.
  • 6The company repurchased $293.3 million of its stock during the nine months ended September 30, 2015, and paid $295.0 million in dividends.
  • 7Total assets grew to $20.79 billion as of September 30, 2015, compared to $20.09 billion at the end of 2014, reflecting acquisitions and asset growth.

Frequently Asked Questions

Revenue growth was primarily driven by increases in average yield (pricing strategies), positive volume growth across various service lines, and contributions from acquisitions, partially offset by decreases in fuel recovery fees and recycled commodity prices.

The company demonstrated effective cost management. While certain costs like labor and maintenance increased, these were offset by decreases in fuel costs due to lower market prices and efficiency initiatives. The company also benefited from an insurance recovery related to the Bridgeton Landfill.

Republic Services is actively investing in its business through capital expenditures, including those related to acquisitions. Concurrently, the company returned capital to shareholders through a significant share repurchase program totaling $293.3 million and dividend payments of $295.0 million during the first nine months of 2015. The company also has a substantial share repurchase authorization in place.

The company is involved in ongoing remediation efforts at the Bridgeton Landfill, which included a significant insurance recovery in the third quarter of 2015. Additionally, the company has accrued approximately $61.3 million for pending legal proceedings, though it believes the outcome of these matters will not have a material adverse impact on its financial position.