8-KEarnings & ResultsExhibits & Filings

REPUBLIC SERVICES, INC. 8-K Report, Financial Results (Oct 27, 2016)

Filed October 27, 2016For Securities:RSG

Summary

Republic Services, Inc. (RSG) filed an 8-K on October 27, 2016, primarily to announce its financial results for the third quarter and nine months ended September 30, 2016, and to provide updated full-year 2016 guidance along with a preliminary outlook for 2017. Investors will find the provided guidance for earnings per share (both diluted and adjusted) and cash flow metrics to be the most crucial takeaways from this filing. The company updated its full-year 2016 guidance, indicating expected diluted EPS between $1.75-$1.76 and adjusted diluted EPS between $2.19-$2.20. Cash flow expectations for the full year were also revised, with cash provided by operations anticipated to be between $1,814 million-$1,824 million and adjusted free cash flow between $840 million-$850 million. Furthermore, RSG offered a preliminary outlook for fiscal year 2017, projecting diluted EPS in the range of $2.29-$2.34 and adjusted diluted EPS between $2.31-$2.36. Adjusted free cash flow for 2017 is projected to be between $875 million-$900 million.

Key Highlights

  • 1Republic Services updated its full-year 2016 diluted EPS guidance to a range of $1.75 to $1.76.
  • 2Updated full-year 2016 adjusted diluted EPS guidance is set between $2.19 and $2.20.
  • 3The company expects full-year 2016 cash provided by operations to be between $1,814 million and $1,824 million.
  • 4Full-year 2016 adjusted free cash flow is projected to be in the range of $840 million to $850 million.
  • 5Preliminary outlook for fiscal year 2017 diluted EPS is projected between $2.29 and $2.34.
  • 6Preliminary fiscal year 2017 adjusted diluted EPS is expected to be between $2.31 and $2.36.
  • 7Projected adjusted free cash flow for 2017 is between $875 million and $900 million.

Frequently Asked Questions

Republic Services updated its full-year 2016 guidance to expect diluted earnings per share (EPS) between $1.75 and $1.76, and adjusted diluted EPS between $2.19 and $2.20. Additionally, the company expects full-year cash provided by operations between $1,814 million and $1,824 million, and adjusted free cash flow between $840 million and $850 million.

For fiscal year 2017, Republic Services provided a preliminary outlook expecting diluted EPS in the range of $2.29 to $2.34 and adjusted diluted EPS between $2.31 and $2.36. Adjusted free cash flow is projected to be between $875 million and $900 million. The company notes this is a preliminary outlook and formal guidance will be provided in February 2017.

Adjusted free cash flow is defined as cash provided by operating activities, less property and equipment received, plus proceeds from the sale of property and equipment, and excludes cash paid for restructuring activities, net of tax. Republic Services presents this metric as it provides insight into recurring operating cash flow after certain expenditures and is a key metric for compensation. However, the company cautions that it has material limitations, does not represent cash available for discretionary expenditures, and may not be comparable to similarly titled measures from other companies.

Yes, the preliminary outlook for 2017 assumes an effective tax rate of 39.5 percent for both diluted and adjusted diluted earnings per share calculations. The company also notes that the preliminary outlook for adjusted free cash flow cannot be reconciled to the closest GAAP measure without unreasonable effort due to limited visibility on future property and equipment transactions.