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Republic Services files Q4 report

On February 7, 2013 Republic Services, Inc. (NYSE: RSG) issued its fourth quarter results.


On February 7, 2013 Republic Services, Inc. (NYSE: RSG) issued its fourth quarter results.

The company announced a net income of $127.0 million, or $0.35 per diluted share, for the three months ended Dec. 31, 2012, versus $191.0 million, or $0.51 per diluted share, for the comparable 2011 period.

Republic’s net income for the three months ended Dec. 31, 2012 and 2011, includes a number of charges and other expenses and benefits that impacted its results.  A detail of these charges, other expenses and benefits is contained in the Reconciliation of Certain Non-GAAP Measures section of this document.  Excluding these items, net income for the three months ended Dec. 31, 2012 and 2011, would have been $133.4 million, or $0.37per diluted share, and $195.3 million, or $0.53 per diluted share, respectively.

Excluding certain charges, other expenses and benefits recorded during 2012 and 2011, as described in the Reconciliation of Certain Non-GAAP Measures section of this document, adjusted earnings before interest, taxes, depreciation, depletion, amortization and accretion (adjusted EBITDA) for the three months ended Dec. 31, 2012, would have been$535.1 million, or 26.4 percent of revenue, compared to $603.6 million, or 29.8 percent of revenue, for the comparable 2011 period.

Revenue for the three months ended Dec. 31, 2012, increased to $2,028.3 million from$2,025.2 million for the comparable 2011 period.  This increase in revenue of 0.2 percent was made up of increases in core price of 1.1 percent, fuel recovery fees of 0.2 percent and acquisitions, net of divestitures of 0.5 percent that were partially offset by decreases in volumes of 0.8 percent and recycling commodities of 0.8 percent.

For the year ended Dec. 31, 2012, net income was $571.8 million, or $1.55 per diluted share, versus $589.2 million, or $1.56 per diluted share, for the comparable 2011 period.

Republic’s net income for the years ended Dec. 31, 2012 and 2011, includes a number of charges, other expenses and benefits that impacted its results.  A detail of these charges, other expenses and benefits is contained in the Reconciliation of Certain Non-GAAP Measures section of this document.  Excluding these items, net income for the years ended Dec. 31, 2012 and 2011 would have been $663.4 million, or $1.80 per diluted share, and$738.3 million, or $1.96 per diluted share, respectively.

Excluding certain charges, other expenses and benefits recorded during 2012 and 2011 as described in the Reconciliation of Certain Non-GAAP Measures section of this document, adjusted EBITDA for the year ended Dec. 31, 2012, would have been $2,289.1 million, or 28.2 percent of revenue, compared to $2,502.4 million, or 30.5 percent of revenue, for the comparable 2011 period.

Revenue for the year ended Dec. 31, 2012, decreased to $8,118.3 million from $8,192.9 million for the comparable 2011 period.  This decrease in revenue of 0.9 percent was made up of increases in core price of 0.8 percent, fuel recovery fees of 0.1 percent and acquisitions, net of divestitures of 0.4 percent that were more than offset by decreases in volumes of 1.0 percent and recycling commodities of 1.2 percent.

Commenting on these results, Donald W. Slager, president and chief executive officer, said, “We faced a number of challenges during 2012.  However, we responded by remaining committed to our long-term strategy, which allowed us to achieve adjusted free cash flow in line with our expectation. Our cash flow performance and disciplined approach to cash utilization enabled us to re-invest in the business, complete accretive acquisitions and return approximately $655 million in cash to our stockholders through dividends and share repurchases.”

Fiscal Year 2013 Guidance

Republic’s guidance is based on current economic conditions and does not assume any significant changes in the overall economy in 2013.  Please refer to the Information Regarding Forward-Looking Statements section of this document.

Specific guidance is as follows:

  • Adjusted Free Cash Flow:  We expect adjusted free cash flow for 2013 to be $675 million to $700 million.  Adjusted free cash flow excludes a number of charges and other expenses and benefits.  Detail relating to the computation of Adjusted Free Cash Flow is contained in the Reconciliation of Certain Non-GAAP Measures section of this document.

  • Adjusted Diluted Earnings per Share:  We expect 2013 adjusted diluted earnings per share to be in the range of $1.86 to $1.91.  This assumes a full year effective tax rate of approximately 38 percent.  Adjusted diluted earnings per share excludes loss on extinguishment of debt, if any, negotiation and withdrawal costs – Central States Pension Fund, restructuring charges and (gain) loss on disposition of assets and impairments, net, if any.  

  • Revenue:  We expect an increase in revenue for 2013 of 2.0 to 2.5 percent comprised of the following:

 

Increase

(Decrease)

Core price

1.0 to 1.5

Volume

0.0

Fuel recovery fees

0.2

Recycling commodities

(0.2)

Acquisitions / divestitures, net

1.0

Total change

2.0 to 2.5 

       

Our guidance for fuel and commodities assumes pricing consistent with current levels.

  • Property and Equipment:  In 2013, we anticipate receiving $860 million of property and equipment.  Purchases of property and equipment as reflected on our consolidated statement of cash flows for 2013 are expected to be $880 million and represent amounts to be paid during 2013 for such expenditures. The $20 million difference between property and equipment received and purchases of property and equipment represents property and equipment received during 2012, but paid for in 2013.

  • Margins:  We expect EBITDA margins for 2013 to be approximately 29 percent.

  • Taxes:  We expect our provision for income taxes in 2013 to be 38 percent and to approximate our cash taxes.

Mr. Slager, commenting on the Company’s guidance, stated, “We have seen some encouraging signs in the economy evidenced by two consecutive quarters of positive volume growth in our collection business.  In 2013, we will remain focused on increasing returns through effective pricing programs, growth initiatives, selective acquisitions, and standardized operating practices.  We are committed to maintaining a strong credit profile and investment grade ratings as we continue to invest in the business and efficiently return cash to stockholders through share repurchases and dividends.”

Company Declares Quarterly Dividend

Republic also announced that its Board of Directors declared a regular quarterly dividend of $0.235 per share for stockholders of record on April 1, 2013.  The dividend will be paid on April 15, 2013.

About Republic

Republic is an industry leader in the U.S. non-hazardous solid waste industry.  Through its subsidiaries, Republic’s collection companies, transfer stations, recycling centers and landfills focus on providing reliable environmental services and solutions for commercial, industrial, municipal and residential customers.  Republic and its employees believe in protecting the planet and applying common sense solutions to customers’ waste and recycling challenges.

Republic participates in investor presentations and conferences throughout the year.  Interested parties can find a schedule of these conferences at republicservices.com by selecting “Calendar” on the investor relations page.  Audio and other presentations from earnings calls and investor conferences are also available on the investor relations page of the website.


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