PHOENIX, May 5, 2021 /PRNewswire/ -- Republic
Services, Inc. (NYSE: RSG) today reported net income of
$295.9 million, or $0.93 per diluted share, for the three months
ended March 31, 2021, versus
$246.3 million, or $0.77 per diluted share, for the comparable 2020
period. Excluding certain benefits and expenses, on an adjusted
basis, net income for the three months ended March 31, 2021 was $297.2
million, or $0.93 per diluted
share, versus $241.1 million, or
$0.75 per diluted share, for the
comparable 2020 period.
"Thanks to our strong foundation, resilient business model and
talented team, Republic Services once again delivered outstanding
results in the first quarter of 2021," said Donald W. Slager, chief executive officer. "I am
proud of all we have achieved during my tenure as CEO, and I have
been humbled to lead the extraordinary women and men who make this
company great. The Company has the right strategic plan, leadership
team and dedicated employees to continue building on our progress
in serving our customers, operating efficiently and sustainably,
and creating value for our shareholders."
"We started the year strong by building on the momentum in our
business and capitalizing on improving market conditions," said Jon
Vander Ark, president and incoming CEO. "During the first quarter
we achieved a 24 percent increase in adjusted earnings per share
and expanded adjusted EBITDA margin 270 basis points. As a result
of our solid first quarter performance and outlook for the balance
of the year, we now expect to exceed our original 2021 full-year
adjusted earnings and free cash flow guidance."
First-Quarter 2021 Highlights:
- First quarter EPS was $0.93 per
share, and adjusted EPS, a non-GAAP measure, was $0.93 per share, an increase of 24 percent over
the prior year.
- Cash provided by operating activities was $661.0 million, an increase of 11 percent versus
the prior year. Adjusted free cash flow, a non-GAAP measure, was
$464.2 million, an increase of 62
percent versus the prior year.
- The Company expanded adjusted EBITDA margin, a non-GAAP
measure, 270 basis points to 30.7 percent.
- The Company closed on the acquisition of Santek on May 5, 2021.
- Total cash returned to shareholders through dividends and share
repurchases was $148 million.
- Core price increased revenue by 4.3 percent. Core price
consisted of 5.2 percent in the open market and 2.8 percent in the
restricted portion of the business.
- Revenue growth from average yield was 2.3 percent and volume
performance improved sequentially to (0.8) percent.
- The Company's average recycled commodity price per ton sold
during the first quarter was $133.
This represents a sequential increase from the fourth quarter of
$23 per ton and an increase of
$57 per ton versus the prior
year.
- Republic continued to convert CPI-based contracts to more
favorable pricing mechanisms for the annual price adjustment. The
Company now has approximately $931
million in annual revenue, or 37 percent of its legacy
$2.5 billion CPI-based book of
business, tied to the water-sewer-trash index or a fixed-rate
increase of 3 percent or greater.
- The Company was named one of Fortune's 2021 World's Most
Admired Companies and to Barron's 100 Most Sustainable Companies
List.
- Republic released its inaugural climate disclosure report
aligned with recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD).
Raised Full-Year 2021 Adjusted EPS and
Adjusted Free Cash Flow Guidance
Republic raised its full-year adjusted diluted EPS guidance to
$3.74 to $3.79 and its full-year adjusted free cash flow
guidance to $1,350 million to
$1,400 million.
Please refer to the Information Regarding Forward-Looking
Statements section of this document.
Company Declares Quarterly Dividend
Republic announced today that its Board of Directors declared a
regular quarterly dividend of $0.425
per share for stockholders of record on July
1, 2021. The dividend will be paid on July 15, 2021.
Presentation of Certain Non-GAAP
Measures
Adjusted diluted earnings per share, adjusted net income,
adjusted EBITDA, adjusted EBITDA margin and adjusted free cash flow
are described in the Reconciliation of Certain Non-GAAP Measures
section of this document.
About Republic Services
Republic Services, Inc. is a
leader in the U.S. environmental services industry. Through its
subsidiaries, the Company provides superior customer experience
while fostering a sustainable Blue Planet® for future
generations to enjoy a cleaner, safer and healthier world. For more
information, visit RepublicServices.com, or follow us at
Facebook.com/RepublicServices, @RepublicService on Twitter or
Republic Services on LinkedIn.
SUPPLEMENTAL
UNAUDITED FINANCIAL INFORMATION
|
AND OPERATING
DATA
|
|
|
|
|
REPUBLIC SERVICES,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
millions, except per share amounts)
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
(Unaudited)
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
23.2
|
|
|
$
|
38.2
|
|
Accounts receivable,
less allowance for doubtful accounts and other of $36.0 and $34.7,
respectively
|
1,095.4
|
|
|
1,091.3
|
|
Prepaid expenses and
other current assets
|
324.5
|
|
|
392.3
|
|
Total current
assets
|
1,443.1
|
|
|
1,521.8
|
|
Restricted cash and
marketable securities
|
134.6
|
|
|
149.1
|
|
Property and
equipment, net
|
8,679.2
|
|
|
8,726.2
|
|
Goodwill
|
12,047.2
|
|
|
12,046.4
|
|
Other intangible
assets, net
|
181.5
|
|
|
173.1
|
|
Other
assets
|
767.0
|
|
|
817.4
|
|
Total
assets
|
$
|
23,252.6
|
|
|
$
|
23,434.0
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
678.3
|
|
|
$
|
779.0
|
|
Notes payable and
current maturities of long-term debt
|
168.7
|
|
|
168.1
|
|
Deferred
revenue
|
359.3
|
|
|
345.6
|
|
Accrued landfill and
environmental costs, current portion
|
116.9
|
|
|
114.5
|
|
Accrued
interest
|
53.2
|
|
|
54.6
|
|
Other accrued
liabilities
|
772.4
|
|
|
820.2
|
|
Total current
liabilities
|
2,148.8
|
|
|
2,282.0
|
|
Long-term debt, net
of current maturities
|
8,594.2
|
|
|
8,766.1
|
|
Accrued landfill and
environmental costs, net of current portion
|
1,713.6
|
|
|
1,694.7
|
|
Deferred income taxes
and other long-term tax liabilities, net
|
1,254.7
|
|
|
1,238.8
|
|
Insurance reserves,
net of current portion
|
284.4
|
|
|
281.8
|
|
Other long-term
liabilities
|
618.6
|
|
|
681.8
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock, par
value $0.01 per share; 50 shares authorized; none issued
|
—
|
|
|
—
|
|
Common stock, par
value $0.01 per share; 750 shares authorized; 319.3 and 318.8
issued including shares held
in treasury, respectively
|
3.2
|
|
|
3.2
|
|
Additional paid-in
capital
|
2,757.3
|
|
|
2,741.4
|
|
Retained
earnings
|
5,911.2
|
|
|
5,751.8
|
|
Treasury stock, at
cost; 0.3 and — shares, respectively
|
(27.5)
|
|
|
(0.1)
|
|
Accumulated other
comprehensive loss, net of tax
|
(11.3)
|
|
|
(12.4)
|
|
Total Republic
Services, Inc. stockholders' equity
|
8,632.9
|
|
|
8,483.9
|
|
Non-controlling
interests in consolidated subsidiary
|
5.4
|
|
|
4.9
|
|
Total stockholders'
equity
|
8,638.3
|
|
|
8,488.8
|
|
Total liabilities and
stockholders' equity
|
$
|
23,252.6
|
|
|
$
|
23,434.0
|
|
REPUBLIC SERVICES,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
(in
millions, except per share data)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Revenue
|
$
|
2,596.4
|
|
|
$
|
2,553.9
|
|
Expenses:
|
|
|
|
Cost of
operations
|
1,534.3
|
|
|
1,550.0
|
|
Depreciation,
amortization and depletion
|
282.1
|
|
|
268.6
|
|
Accretion
|
20.5
|
|
|
20.9
|
|
Selling, general and
administrative
|
265.4
|
|
|
277.1
|
|
Withdrawal costs -
multiemployer pension funds
|
—
|
|
|
4.3
|
|
Gain on business
divestitures and impairments, net
|
(1.1)
|
|
|
(3.9)
|
|
Restructuring
charges
|
2.8
|
|
|
3.8
|
|
Operating
income
|
492.4
|
|
|
433.1
|
|
Interest
expense
|
(78.4)
|
|
|
(96.7)
|
|
Loss from
unconsolidated equity method investments
|
(16.5)
|
|
|
(13.2)
|
|
Interest
income
|
0.8
|
|
|
0.3
|
|
Other income (loss),
net
|
1.8
|
|
|
(0.9)
|
|
Income before income
taxes
|
400.1
|
|
|
322.6
|
|
Provision for income
taxes
|
103.7
|
|
|
75.8
|
|
Net income
|
296.4
|
|
|
246.8
|
|
Net income
attributable to non-controlling interests in consolidated
subsidiary
|
(0.5)
|
|
|
(0.5)
|
|
Net income
attributable to Republic Services, Inc.
|
$
|
295.9
|
|
|
$
|
246.3
|
|
Basic earnings per
share attributable to Republic Services, Inc.
stockholders:
|
|
|
|
Basic earnings per
share
|
$
|
0.93
|
|
|
$
|
0.77
|
|
Weighted average
common shares outstanding
|
319.4
|
|
|
319.6
|
|
Diluted earnings per
share attributable to Republic Services, Inc.
stockholders:
|
|
|
|
Diluted earnings per
share
|
$
|
0.93
|
|
|
$
|
0.77
|
|
Weighted average
common and common equivalent shares outstanding
|
319.8
|
|
|
320.2
|
|
Cash dividends per
common share
|
$
|
0.425
|
|
|
$
|
0.405
|
|
REPUBLIC SERVICES,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
millions)
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash provided by
operating activities:
|
|
|
|
Net income
|
$
|
296.4
|
|
|
$
|
246.8
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, depletion and accretion
|
302.6
|
|
|
289.5
|
|
Non-cash interest
expense
|
16.0
|
|
|
15.0
|
|
Stock-based
compensation
|
12.6
|
|
|
9.9
|
|
Deferred tax
provision
|
15.3
|
|
|
17.6
|
|
Provision for doubtful
accounts, net of adjustments
|
4.3
|
|
|
4.9
|
|
Gain on disposition of
assets and asset impairments, net
|
(0.6)
|
|
|
(4.9)
|
|
Environmental
adjustments
|
(1.5)
|
|
|
(0.4)
|
|
Loss from
unconsolidated equity method investments
|
16.5
|
|
|
13.2
|
|
Other non-cash
items
|
(0.5)
|
|
|
5.5
|
|
Change in assets and
liabilities, net of effects from business acquisitions and
divestitures:
|
|
|
|
Accounts
receivable
|
(8.9)
|
|
|
28.0
|
|
Prepaid expenses and
other assets
|
62.5
|
|
|
88.2
|
|
Accounts
payable
|
27.6
|
|
|
(37.2)
|
|
Capping, closure and
post-closure expenditures
|
(11.0)
|
|
|
(8.7)
|
|
Remediation
expenditures
|
(8.9)
|
|
|
(17.2)
|
|
Other
liabilities
|
(61.4)
|
|
|
(54.4)
|
|
Cash provided by
operating activities
|
661.0
|
|
|
595.8
|
|
Cash used in
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(331.0)
|
|
|
(373.1)
|
|
Proceeds from sales of
property and equipment
|
2.1
|
|
|
6.0
|
|
Cash used in
acquisitions and investments, net of cash and restricted cash
acquired
|
(18.0)
|
|
|
(61.0)
|
|
Cash received from
business divestitures
|
0.8
|
|
|
(0.2)
|
|
Purchases of
restricted marketable securities
|
(7.4)
|
|
|
(14.0)
|
|
Sales of restricted
marketable securities
|
8.9
|
|
|
5.6
|
|
Other
|
—
|
|
|
(25.0)
|
|
Cash used in investing
activities
|
(344.6)
|
|
|
(461.7)
|
|
Cash (used in)
provided by financing activities:
|
|
|
|
Proceeds from notes
payable and long-term debt, net of fees
|
1,242.4
|
|
|
1,974.9
|
|
Proceeds from issuance
of senior notes, net of discount and fees
|
—
|
|
|
985.6
|
|
Payments of notes
payable and long-term debt
|
(1,422.5)
|
|
|
(2,688.7)
|
|
Issuances of common
stock
|
(12.3)
|
|
|
(9.5)
|
|
Purchases of common
stock for treasury
|
(12.7)
|
|
|
(98.8)
|
|
Cash dividends
paid
|
(135.5)
|
|
|
(129.2)
|
|
Distributions paid to
non-controlling interests in consolidated subsidiary
|
—
|
|
|
(0.2)
|
|
Contingent
consideration payments
|
(1.7)
|
|
|
(2.2)
|
|
Cash (used in)
provided by financing activities
|
(342.3)
|
|
|
31.9
|
|
(Decrease) increase
in cash, cash equivalents, restricted cash and restricted cash
equivalents
|
(25.9)
|
|
|
166.0
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at
beginning of period
|
114.2
|
|
|
177.4
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at end
of period
|
$
|
88.3
|
|
|
$
|
343.4
|
|
You should read the following information in conjunction with
our audited consolidated financial statements and notes thereto
appearing in our Annual Report on Form 10-K as of and for the year
ended December 31, 2020. All amounts
below are in millions and as a percentage of our revenue, except
per share data.
REVENUE
The following table reflects our total revenue by line of
business for the three months ended March
31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Collection:
|
|
|
|
|
|
|
|
Residential
|
$
|
593.1
|
|
|
22.8
|
%
|
|
$
|
568.5
|
|
|
22.3
|
%
|
Small-container
|
810.5
|
|
|
31.2
|
|
|
805.7
|
|
|
31.5
|
|
Large-container
|
540.1
|
|
|
20.8
|
|
|
552.4
|
|
|
21.6
|
|
Other
|
14.2
|
|
|
0.5
|
|
|
12.3
|
|
|
0.5
|
|
Total
collection
|
1,957.9
|
|
|
75.3
|
|
|
1,938.9
|
|
|
75.9
|
|
Transfer
|
331.3
|
|
|
|
|
321.9
|
|
|
|
Less:
intercompany
|
(185.1)
|
|
|
|
|
(185.6)
|
|
|
|
Transfer,
net
|
146.2
|
|
|
5.6
|
|
|
136.3
|
|
|
5.3
|
|
Landfill
|
562.6
|
|
|
|
|
558.3
|
|
|
|
Less:
intercompany
|
(249.3)
|
|
|
|
|
(252.3)
|
|
|
|
Landfill,
net
|
313.3
|
|
|
12.1
|
|
|
306.0
|
|
|
12.0
|
|
Environmental
solutions
|
30.0
|
|
|
1.2
|
|
|
46.8
|
|
|
1.8
|
|
Other:
|
|
|
|
|
|
|
|
Recycling processing
and commodity sales
|
87.6
|
|
|
3.4
|
|
|
67.8
|
|
|
2.7
|
|
Other
non-core
|
61.4
|
|
|
2.4
|
|
|
58.1
|
|
|
2.3
|
|
Total other
|
149.0
|
|
|
5.8
|
|
|
125.9
|
|
|
5.0
|
|
Total
revenue
|
$
|
2,596.4
|
|
|
100.0
|
%
|
|
$
|
2,553.9
|
|
|
100.0
|
%
|
The following table reflects changes in components of our
revenue, as a percentage of total revenue, for the three months
ended March 31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Average
yield
|
2.3
|
%
|
|
2.9
|
%
|
Fuel recovery
fees
|
(0.4)
|
|
|
(0.2)
|
|
Total price
|
1.9
|
|
|
2.7
|
|
Volume
|
(0.8)
|
|
|
(0.1)
|
|
Change in
workdays
|
(0.5)
|
|
|
0.5
|
|
Recycling processing
and commodity sales
|
0.8
|
|
|
(0.2)
|
|
Environmental
solutions
|
(0.7)
|
|
|
(0.5)
|
|
Total internal
growth
|
0.7
|
|
|
2.4
|
|
Acquisitions /
divestitures, net
|
1.0
|
|
|
1.0
|
|
Total
|
1.7
|
%
|
|
3.4
|
%
|
|
|
|
|
Core price
|
4.3
|
%
|
|
5.2
|
%
|
Average yield is defined as revenue growth from the change in
average price per unit of service, expressed as a percentage. Core
price is defined as price increases to our customers and fees,
excluding fuel recovery fees, net of price decreases to retain
customers. We also measure changes in average yield and core price
as a percentage of related-business revenue, defined as total
revenue excluding recycled commodities and fuel recovery fees, to
determine the effectiveness of our pricing strategies. Average
yield as a percentage of related-business revenue was 2.5% and 3.0%
for the three months ended March 31,
2021 and 2020, respectively. Core price as a percentage of
related-business revenue was 4.6% and 5.5% for the three months
ended March 31, 2021 and 2020,
respectively.
The following table reflects changes in average yield and
volume, as a percentage of total revenue by line of business, for
the three months ended March 31, 2021
and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
|
Yield
|
|
Volume
|
|
Yield
|
|
Volume
|
Collection:
|
|
|
|
|
|
|
|
Residential
|
3.3
|
%
|
|
(0.6)
|
%
|
|
2.5
|
%
|
|
(1.3)
|
%
|
Small-container
|
3.1
|
%
|
|
(2.8)
|
%
|
|
3.8
|
%
|
|
(0.1)
|
%
|
Large-container
|
1.1
|
%
|
|
(2.1)
|
%
|
|
3.5
|
%
|
|
(0.3)
|
%
|
Landfill:
|
|
|
|
|
|
|
|
Municipal solid
waste
|
2.5
|
%
|
|
3.5
|
%
|
|
3.1
|
%
|
|
(0.5)
|
%
|
Construction and
demolition waste
|
4.4
|
%
|
|
(2.4)
|
%
|
|
3.5
|
%
|
|
21.2
|
%
|
Special
waste
|
—
|
%
|
|
1.9
|
%
|
|
—
|
%
|
|
(3.6)
|
%
|
COST OF OPERATIONS
The following table summarizes the major components of our cost
of operations for the three months ended March 31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Labor and related
benefits
|
$
|
555.7
|
|
|
21.4
|
%
|
|
$
|
556.9
|
|
|
21.8
|
%
|
Transfer and disposal
costs
|
192.4
|
|
|
7.4
|
|
|
198.5
|
|
|
7.8
|
|
Maintenance and
repairs
|
237.4
|
|
|
9.2
|
|
|
247.3
|
|
|
9.7
|
|
Transportation and
subcontract costs
|
168.8
|
|
|
6.5
|
|
|
167.3
|
|
|
6.6
|
|
Fuel
|
78.9
|
|
|
3.0
|
|
|
79.6
|
|
|
3.1
|
|
Disposal fees and
taxes
|
77.7
|
|
|
3.0
|
|
|
77.3
|
|
|
3.0
|
|
Landfill operating
costs
|
57.4
|
|
|
2.2
|
|
|
64.7
|
|
|
2.5
|
|
Risk
management
|
59.3
|
|
|
2.3
|
|
|
61.9
|
|
|
2.4
|
|
Other
|
106.7
|
|
|
4.1
|
|
|
107.3
|
|
|
4.2
|
|
Subtotal
|
1,534.3
|
|
|
59.1
|
|
|
1,560.8
|
|
|
61.1
|
|
Bridgeton insurance
recovery
|
—
|
|
|
—
|
|
|
(10.8)
|
|
|
(0.4)
|
|
Total cost of
operations
|
$
|
1,534.3
|
|
|
59.1
|
%
|
|
$
|
1,550.0
|
|
|
60.7
|
%
|
These cost categories may change from time to time and may not
be comparable to similarly titled categories used by other
companies. As such, you should take care when comparing our cost of
operations by cost component to that of other companies and of ours
for prior periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The following table provides the components of our selling,
general and administrative expenses for the three months ended
March 31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Salaries
|
$
|
194.3
|
|
|
7.4
|
%
|
|
$
|
191.3
|
|
|
7.5
|
%
|
Provision for
doubtful accounts
|
4.3
|
|
|
0.2
|
|
|
4.9
|
|
|
0.2
|
|
Other
|
66.8
|
|
|
2.6
|
|
|
80.9
|
|
|
3.2
|
|
Total selling, general
and administrative expenses
|
$
|
265.4
|
|
|
10.2
|
%
|
|
$
|
277.1
|
|
|
10.9
|
%
|
These cost categories may change from time to time and may not
be comparable to similarly titled categories used by other
companies. As such, you should take care when comparing our
selling, general and administrative expenses by cost component to
those of other companies and of ours for prior periods.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES
EBITDA
The following table calculates EBITDA, which is not a measure
determined in accordance with U.S. generally accepted accounting
principles (U.S. GAAP), for the three months ended March 31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Net income
attributable to Republic Services, Inc.
|
$
|
295.9
|
|
|
$
|
246.3
|
|
Net income
attributable to noncontrolling interests
|
0.5
|
|
|
0.5
|
|
Provision (benefit)
for income taxes
|
103.7
|
|
|
75.8
|
|
Other (income) loss,
net
|
(1.8)
|
|
|
0.9
|
|
Interest
income
|
(0.8)
|
|
|
(0.3)
|
|
Interest
expense
|
78.4
|
|
|
96.7
|
|
Depreciation,
amortization and depletion
|
282.1
|
|
|
268.6
|
|
Accretion
|
20.5
|
|
|
20.9
|
|
EBITDA
|
$
|
778.5
|
|
|
$
|
709.4
|
|
We believe that presenting EBITDA is useful to investors because
it provides important information concerning our operating
performance exclusive of certain non-cash and other costs. EBITDA
demonstrates our ability to execute our financial strategy, which
includes reinvesting in existing capital assets to ensure a high
level of customer service, investing in capital assets to
facilitate growth in our customer base and services provided,
maintaining our investment grade credit ratings and minimizing
debt, paying cash dividends, repurchasing our common stock, and
maintaining and improving our market position through business
optimization. This measure has limitations. Although depreciation,
depletion, amortization and accretion are considered operating
costs in accordance with U.S. GAAP, they represent the allocation
of non-cash costs generally associated with long-lived assets
acquired or constructed in prior years. Our definition of EBITDA
may not be comparable to similarly titled measures presented by
other companies.
Adjusted Earnings
Reported diluted earnings per share was $0.93 and $0.77 for
the three months ended March 31, 2021
and 2020, respectively. During the three months ended March 31, 2021 and 2020, we recorded a number of
charges and other expenses and gains that impacted our EBITDA,
pre-tax income, net income attributable to Republic Services, Inc.
(net income – Republic) and diluted earnings per share. For
comparative purposes, certain prior year amounts have been
reclassified to conform to current year presentation. The table
below sets forth such measures on an adjusted basis to exclude such
charges, other expenses and gains:
|
|
Three Months Ended
March 31, 2021
|
|
Three Months Ended
March 31, 2020
|
|
|
|
|
|
|
Net
|
|
Diluted
|
|
|
|
|
|
Net
|
|
Diluted
|
|
|
|
|
Pre-tax
|
|
Income -
|
|
Earnings
|
|
|
|
Pre-tax
|
|
Income -
|
|
Earnings
|
|
|
EBITDA
|
|
Income
|
|
Republic
|
|
per Share
|
|
EBITDA
|
|
Income
|
|
Republic
|
|
per Share
|
As
reported
|
|
$
|
778.5
|
|
|
$
|
400.1
|
|
|
$
|
295.9
|
|
|
$
|
0.93
|
|
|
$
|
709.4
|
|
|
$
|
322.6
|
|
|
$
|
246.3
|
|
|
$
|
0.77
|
|
Loss from
unconsolidated equity method investments
|
|
16.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restructuring charges
(1)
|
|
2.8
|
|
|
2.8
|
|
|
2.1
|
|
|
—
|
|
|
3.8
|
|
|
3.8
|
|
|
2.8
|
|
|
0.01
|
|
Gain on business
divestitures and impairments, net (1)
|
|
(1.1)
|
|
|
(1.1)
|
|
|
(0.8)
|
|
|
—
|
|
|
(3.9)
|
|
|
(3.9)
|
|
|
(2.9)
|
|
|
(0.01)
|
|
Withdrawal costs -
multiemployer pension funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
4.3
|
|
|
3.1
|
|
|
0.01
|
|
Bridgeton insurance
recovery
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.8)
|
|
|
(10.8)
|
|
|
(8.2)
|
|
|
(0.03)
|
|
Total
adjustments
|
|
18.2
|
|
|
1.7
|
|
|
1.3
|
|
|
—
|
|
|
6.6
|
|
|
(6.6)
|
|
|
(5.2)
|
|
|
(0.02)
|
|
As
adjusted
|
|
$
|
796.7
|
|
|
$
|
401.8
|
|
|
$
|
297.2
|
|
|
$
|
0.93
|
|
|
$
|
716.0
|
|
|
$
|
316.0
|
|
|
$
|
241.1
|
|
|
$
|
0.75
|
|
|
(1) The aggregate
impact to adjusted diluted earnings per share totals to less than
$0.01 for the three months ended March 31, 2021.
|
We believe that presenting adjusted EBITDA, adjusted pre-tax
income, adjusted net income - Republic, and adjusted diluted
earnings per share, which are not measures determined in accordance
with U.S. GAAP, provide an understanding of operational activities
before the financial impact of certain items. We use these
measures, and believe investors will find them helpful, in
understanding the ongoing performance of our operations separate
from items that have a disproportionate impact on our results for a
particular period. We have incurred comparable charges, costs and
recoveries in prior periods, and similar types of adjustments can
reasonably be expected to be recorded in future periods. Our
definition of adjusted EBITDA, adjusted pre-tax income, adjusted
net income - Republic, and adjusted diluted earnings per share may
not be comparable to similarly titled measures presented by other
companies. Further information on each of these adjustments is
included below.
Restructuring charges. In 2020, we incurred costs
related to the redesign of certain back-office software systems,
which continued into 2021. In addition, in July 2020, we eliminated certain back-office
support positions in response to a decline in the underlying demand
for services resulting from the COVID-19 pandemic.
Gain on business divestitures and impairments, net.
During the three months ended March 31,
2021 and 2020, we recorded a net gain on business
divestitures and impairments.
Withdrawal costs - multiemployer pension funds.
During 2020, we recorded charges to earnings for withdrawal events
at multiemployer pension funds to which we contribute. As we obtain
updated information regarding multiemployer pension funds, the
factors used in deriving our estimated withdrawal liabilities will
be subject to change, which may adversely impact our reserves for
withdrawal costs.
Bridgeton insurance
recovery. During the three months ended March 31, 2020, we recognized an insurance
recovery related to our closed Bridgeton Landfill in Missouri as a reduction of remediation
expenses in our cost of operations.
Adjusted Free Cash Flow
The following table calculates our adjusted free cash flow,
which is not a measure determined in accordance with U.S.
GAAP, for the three months ended March
31, 2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash provided by
operating activities
|
$
|
661.0
|
|
|
$
|
595.8
|
|
Property and
equipment received
|
(202.1)
|
|
|
(292.6)
|
|
Proceeds from sales
of property and equipment
|
2.1
|
|
|
6.0
|
|
Restructuring
payments, net of tax
|
2.9
|
|
|
2.8
|
|
Divestiture related
tax payments
|
0.3
|
|
|
1.0
|
|
Bridgeton insurance
recovery, net of tax
|
—
|
|
|
(26.4)
|
|
Adjusted free cash
flow
|
$
|
464.2
|
|
|
$
|
286.6
|
|
We believe that presenting adjusted free cash flow provides
useful information regarding our recurring cash provided by
operating activities after certain expenditures or recoveries. It
also demonstrates our ability to execute our financial strategy and
is a key metric we use to determine compensation. The presentation
of adjusted free cash flow has material limitations. Adjusted free
cash flow does not represent our cash flow available for
discretionary payments because it excludes certain payments that
are required or to which we have committed, such as debt service
requirements and dividend payments. Our definition of adjusted free
cash flow may not be comparable to similarly titled measures
presented by other companies.
Purchases of property and equipment as reflected on our
consolidated statements of cash flows represent amounts paid during
the period for such expenditures. A reconciliation of property and
equipment expenditures reflected on our consolidated statements of
cash flows to property and equipment received during the period
follows for the three months ended March 31,
2021 and 2020:
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Purchases of property
and equipment per the unaudited consolidated statements of
cash
flows
|
$
|
331.0
|
|
|
$
|
373.1
|
|
Adjustments for
property and equipment received during the prior period but paid
for in the
following period, net
|
(128.9)
|
|
|
(80.5)
|
|
Property and
equipment received during the period
|
$
|
202.1
|
|
|
$
|
292.6
|
|
The adjustments noted above do not affect our net change in
cash, cash equivalents, restricted cash and restricted cash
equivalents as reflected in our consolidated statements of cash
flows.
ACCOUNTS RECEIVABLE
As of March 31, 2021 and
December 31, 2020, accounts
receivable were $1,095.4 million
and $1,091.3 million, net of
allowance for doubtful accounts of $36.0
million and $34.7 million,
respectively, resulting in days sales outstanding of 38.4, or 25.8
days net of deferred revenue, compared to 38.6, or 26.4 days net of
deferred revenue, respectively.
CASH DIVIDENDS
In January 2021, we paid a cash
dividend of $135.5 million to
shareholders of record as of January 4,
2021. As of March 31, 2021, we
recorded a quarterly dividend payable of $135.6 million to shareholders of record at the
close of business on April 1, 2021,
which was paid on April 15, 2021.
SHARE REPURCHASE PROGRAM
During the three months ended March 31,
2021, we repurchased 0.1 million shares of our stock for
$12.7 million at a weighted average
cost per share of $89.63. As of
March 31, 2021, the remaining
authorized purchase capacity under our October 2020 repurchase program was $2.0 billion.
RECONCILIATION OF 2021 FINANCIAL GUIDANCE
Adjusted Diluted Earnings per Share
The following is a summary of anticipated adjusted diluted
earnings per share for the year ending December 31, 2021, which is not a measure
determined in accordance with U.S. GAAP:
|
(Anticipated)
Year Ending
December 31, 2021
|
Diluted earnings per
share
|
$ 3.65 to
3.69
|
Restructuring
charges
|
0.03 to
0.04
|
Accelerated vesting
of compensation expense for CEO transition
|
0.06
|
Adjusted diluted
earnings per share
|
$
3.74 to 3.79
|
We believe that presenting adjusted diluted earnings per share
provides an understanding of operational activities before the
financial impact of certain items. We use this measure, and believe
investors will find it helpful, in understanding the ongoing
performance of our operations separate from items that have a
disproportionate impact on our results for a particular period. We
have incurred comparable charges, costs and recoveries in prior
periods, and similar types of adjustments can reasonably be
expected to be recorded in future periods. Our definition of
adjusted diluted earnings per share may not be comparable to
similarly titled measures presented by other companies.
Adjusted Free Cash Flow
Our anticipated adjusted free cash flow for the year ending
December 31, 2021, which is not a measure determined in
accordance with U.S. GAAP, is calculated as follows:
|
(Anticipated)
Year Ending
December 31, 2021
|
Cash provided by
operating activities
|
$
2,500 to 2,595
|
Property and
equipment received
|
(1,175 to
1,225)
|
Proceeds from sales
of property and equipment
|
15
|
Restructuring
payments, net of tax
|
10 to 15
|
Adjusted free cash
flow
|
$
1,350 to 1,400
|
We believe that presenting adjusted free cash flow provides
useful information regarding our recurring cash provided by
operating activities after certain expenditures or recoveries. It
also demonstrates our ability to execute our financial strategy and
is a key metric we use to determine compensation. The presentation
of adjusted free cash flow has material limitations. Adjusted free
cash flow does not represent our cash flow available for
discretionary payments because it excludes certain payments that
are required or to which we have committed, such as debt service
requirements and dividend payments. Our definition of adjusted free
cash flow may not be comparable to similarly titled measures
presented by other companies.
INFORMATION REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains certain forward-looking information
about us that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts. Words such as "guidance,"
"expect," "will," "may," "anticipate," "plan," "estimate,"
"project," "intend," "should," "can," "likely," "could," "outlook"
and similar expressions are intended to identify forward-looking
statements. These statements include information about our plans,
strategies and prospects. Forward-looking statements are not
guarantees of performance. These statements are based upon the
current beliefs and expectations of our management and are subject
to risk and uncertainties that could cause actual results to differ
materially from those expressed in, or implied or projected by, the
forward-looking information and statements. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot assure you that the expectations will
prove to be correct. Among the factors that could cause actual
results to differ materially from the expectations expressed in the
forward-looking statements are the effects of the COVID-19 pandemic
and actions taken in response thereto, acts of war, riots or
terrorism, and the impact of these acts on economic, financial and
social conditions in the United
States as well as our dependence on large, long-term
collection, transfer and disposal contracts. More information on
factors that could cause actual results or events to differ
materially from those anticipated is included from time to time in
our reports filed with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the year ended
December 31, 2020, particularly under
Part I, Item 1A - Risk Factors. Additionally, new risk factors
emerge from time to time and it is not possible for us to predict
all such risk factors, or to assess the impact such risk factors
might have on our business. We undertake no obligation to update
publicly any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
law.
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SOURCE Republic Services, Inc.