- 2009 results exceed original guidance for adjusted earnings per
share, free cash flow and EBITDA margins - Achieves annual run rate
synergy savings of $150 million one year ahead of schedule - 2010
guidance anticipates double digit earnings growth PHOENIX, Feb. 11
/PRNewswire-FirstCall/ -- Republic Services, Inc. (NYSE: RSG) today
reported net income of $35.6 million, or $0.09 per diluted share,
including merger-related costs and other charges as further
described in this release, for the three months ended December 31,
2009, versus a loss of $(131.7) million, or $(0.55) per diluted
share, for the comparable period last year. Results for the three
and twelve months ended December 31, 2009 and 2008 include Allied
Waste Industries, Inc. from December 5, 2008, the date on which
Allied merged with Republic. Republic's net income for the three
months ended December 31, 2009 includes a loss on extinguishment of
debt, restructuring charges, costs to achieve synergies, loss on
disposition of assets and impairments, net, and remediation
charges. Republic's net income for the three months ended December
31, 2008 includes restructuring charges, costs to achieve
synergies, loss on disposition of assets and impairments, net,
remediation charges, and the tax effect of permanent items. A
detail of these costs and charges is contained in the
Reconciliation of Non-GAAP Measures section of this document.
Excluding these items, net income for the three months ended
December 31, 2009 and 2008 would have been $126.0 million, or $0.33
per diluted share, and $58.1 million, or $0.26 per diluted share,
respectively. Earnings before interest, taxes, depreciation,
amortization, depletion and accretion (EBITDA) for the three months
ended December 31, 2009 was $561.6 million compared to $26.0
million for the comparable period in 2008. Excluding certain costs
and charges recorded during 2009 and 2008 as previously described,
adjusted EBITDA for the three months ended December 31, 2009 would
have been $588.2 million, or 29.4% as a percentage of revenue,
compared to $289.2 million, or 23.2% as a percentage of revenue,
for the comparable 2008 period. Revenue for the three months ended
December 31, 2009 increased to $1,999.0 million compared to
$1,244.4 million for the same period in 2008. This increase in
revenue is attributable to our merger with Allied. Core price for
the three months ended December 31, 2009 (assuming the merger with
Allied had occurred on January 1, 2008) increased 2.5% and
commodity pricing increased 0.7%. Offsetting this growth of 3.2%
for the three months ended December 31, 2009 were decreases of 9.7%
in core volume and 2.2% in fuel charges. For the year ended
December 31, 2009, net income was $495.0 million, or $1.30 per
diluted share, versus $73.8 million, or $0.37 per diluted share,
for the comparable period in 2008. Republic's net income for the
twelve months ended December 31, 2009 includes a loss on
extinguishment of debt, restructuring charges, costs to achieve
synergies, gains on disposition of assets and impairments, net, and
remediation recoveries. Republic's net income for the twelve months
ended December 31, 2008 includes restructuring charges, costs to
achieve synergies, loss on disposition of assets and impairments,
net, remediation charges, and the tax effect of permanent items.
Excluding these items, net income for the years ended December 31,
2009 and 2008 would have been $564.6 million, or $1.48 per diluted
share, and $305.2 million, or $1.54 per diluted share,
respectively. EBITDA for the year ended December 31, 2009 was
$2,548.3 million compared to $661.2 million for the comparable
period in 2008. Excluding certain costs and charges recorded during
2009 and 2008 as previously described, adjusted EBITDA for the year
ended December 31, 2009 would have been $2,509.5 million, or 30.6%
as a percentage of revenue, compared to $992.4 million, or 26.9% as
a percentage of revenue, for the comparable period in 2008. Revenue
for the year ended December 31, 2009 increased to $8,199.1 million
compared to $3,685.1 million for the same period in 2008. This
increase in revenue is attributable to our merger with Allied. Core
price for the year ended December 31, 2009 (assuming the merger
with Allied had occurred on January 1, 2008) increased 3.0%.
Offsetting the core price growth of 3.0% for the year ended
December 31, 2009 were decreases of 9.5% in core volume, 1.7% of
commodity pricing and 2.5% in fuel charges. "We are pleased to
report that we have exceeded our original 2009 guidance for
earnings, free cash flow and margins," said James E. O'Connor,
Chairman and Chief Executive Officer of Republic Services, Inc. "We
achieved annual run rate synergy savings of $150 million, well
ahead of our plan. During 2009, we repaid $740 million of our debt.
We also took advantage of the favorable interest rate environment
by issuing $1.25 billion of new debt and using the proceeds to
repay existing debt. Our strong operational and financial
performance during 2009 has left us well positioned for future
success, as evidenced by our double digit 2010 earnings growth
guidance." Quarterly Dividend Declared Republic Services also
announced that its Board of Directors declared a regular quarterly
dividend of $0.19 per share for shareholders of record on April 1,
2010. The dividend will be paid on April 15, 2010. Fiscal Year 2010
Outlook Our objectives for 2010 remain consistent with previous
years and focus on enhancing shareholder value by increasing
returns on invested capital and through the efficient use of free
cash flow. We remain committed to continuing our broad-based
pricing program across all lines of business to recover increasing
costs and to expand our operating margins. Our guidance is based on
current economic conditions and does not assume any improvement or
deterioration in the overall economy in 2010. Specific guidance is
as follows: -- Adjusted Free Cash Flow: Adjusted free cash flow for
2010 is expected to be $700 million to $725 million. Adjusted free
cash flow consists of cash provided by operating activities, less
property and equipment received, plus proceeds from the sales of
property and equipment, plus merger related expenditures, net of
tax, plus tax settlement related to BFI risk management companies.
-- Adjusted Earnings Per Diluted Share: We expect adjusted 2010
earnings per diluted share to be in the range of $1.63 to $1.67.
Adjusted earnings per diluted share exclude restructuring charges,
costs to achieve synergies and loss on extinguishment of debt. --
Revenue: We expect 2010 revenue to decrease by approximately 0.5 to
2.0 percent. This consists of an increase of 2.0 to 2.5 percent
resulting from price increases offset by a decline of 3.0 to 4.0
percent due to 2009 volume declines and divestitures, as shown
below: Increase (Decrease) --------------- Price 2.0 to 2.5% Volume
(4.0) to (3.0)% Divestitures (1.0)% Fuel fees 0.5% Commodities 0.5%
--------------- Total change (2.0) to (0.5)% =============== --
Property and Equipment: In 2010, we anticipate receiving $790
million of property and equipment. Purchases of property and
equipment as reflected on our consolidated statement of cash flows
for 2010 are expected to be $870 million and represents amounts
paid during 2010 for such expenditures. The difference between
property and equipment received and purchases of property and
equipment is adjustments for approximately $80 million of property
and equipment received during 2009 but paid for in 2010. --
Margins: EBITDA margins for 2010 are anticipated to be
approximately 31% excluding restructuring charges and costs to
achieve synergies. -- Taxes: Our provision for income taxes is
expected to be 42%. -- Merger Synergies: We expect to achieve run
rate synergies of $165 to $175 million by the end of 2010.
Commenting on the Company's performance, Donald W. Slager,
President and Chief Operating Officer, said "Our field organization
remains focused on revenue and cost control initiatives while
providing superior service to our customers and a safe work
environment for our employees. This focus, coupled with our
integration efforts, provides us with the platform we need to
achieve strong earnings growth in 2010." Republic Services, Inc.
provides recycling and solid waste collection, transfer and
disposal services in the United States and Puerto Rico. The
Company's various operating units including collection companies,
transfer stations, recycling centers and landfills are focused on
providing reliable environmental services and solutions for
commercial, industrial, municipal and residential customers. For
more information, visit the Republic Services web site at
http://www.republicservices.com/ SUPPLEMENTAL UNAUDITED FINANCIAL
INFORMATION AND OPERATING DATA (in millions, except per share
amounts and percentages) REPUBLIC SERVICES, INC. CONSOLIDATED
BALANCE SHEETS December 31, December 31, 2009 2008 -----------
----------- ASSETS Current assets: Cash and cash equivalents $48.0
$68.7 Accounts receivable, less allowance for doubtful accounts of
$55.2 and $65.7, respectively 865.1 945.5 Prepaid expenses and
other current assets 156.5 174.7 Deferred tax assets 195.3 136.8
----- ----- Total current assets 1,264.9 1,325.7 Restricted cash
and marketable securities 240.5 281.9 Property and equipment, net
6,657.7 6,738.2 Goodwill, net 10,667.1 10,521.5 Other intangible
assets, net 500.0 564.1 Other assets 210.1 490.0 ----- ----- Total
assets $19,540.3 $19,921.4 ========= ========= LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 592.8
564.0 Notes payable and current maturities of long-term debt 543.0
504.0 Deferred revenue 331.1 359.9 Accrued landfill and
environmental costs, current portion 245.4 233.4 Accrued interest
96.2 107.7 Other accrued liabilities 740.2 796.8 ----- ----- Total
current liabilities 2,548.7 2,565.8 Long-term debt, net of current
maturities 6,419.6 7,198.5 Accrued landfill and environmental
costs, net of current portion 1,383.2 1,197.1 Deferred income taxes
and other long-term liabilities 1,040.5 1,239.9 Self-insurance
reserves, net of current portion 302.0 234.5 Other long-term
liabilities 279.2 203.1 Commitments and contingencies Stockholders'
equity: Preferred stock, par value $0.01 per share; 50.0 shares
authorized; none issued - - Common stock, par value $0.01 per
share; 750.0 shares authorized; 395.7 and 393.4 issued including
shares held in treasury, respectively 4.0 3.9 Additional paid-in
capital 6,316.1 6,260.1 Retained earnings 1,683.1 1,477.2 Treasury
stock, at cost (14.9 shares) (457.7) (456.7) Accumulated other
comprehensive income (loss), net of tax 19.0 (3.1) ---- ---- Total
Republic Services, Inc. stockholders' equity 7,564.5 7,281.4
Noncontrolling interests 2.6 1.1 --- --- Total stockholders' equity
7,567.1 7,282.5 ------- ------- Total liabilities and stockholders'
equity $19,540.3 $19,921.4 ========= ========= REPUBLIC SERVICES,
INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in millions,
except per share data) Three Months Ended Year Ended December 31,
December 31, ------------------ ---------------- 2009 2008 2009
2008 ------ ------ ------ ------ Revenue $1,999.0 $1,244.4 $8,199.1
$3,685.1 Expenses: Cost of operations 1,201.1 863.2 4,844.2 2,416.7
Depreciation, amortization and depletion 211.0 127.2 869.7 354.1
Accretion 21.4 10.4 88.8 23.9 Selling, general and administrative
221.7 182.7 880.4 434.7 Loss (gain) on disposition of assets and
impairments, net 7.3 89.8 (137.0) 89.8 Restructuring charges 7.3
82.7 63.2 82.7 --- ---- ---- ---- Operating income (loss) 329.2
(111.6) 1,589.8 283.2 Interest expense (147.1) (66.8) (595.9)
(131.9) Loss on extinguishment of debt (102.3) - (134.1) - Interest
income 0.3 1.7 2.0 9.6 Other income (expense), net 0.4 (0.9) 3.2
(1.6) --- ---- --- ---- Income (loss) before income taxes 80.5
(177.6) 865.0 159.3 Provision (benefit) for income taxes 44.6
(46.0) 368.5 85.4 ---- ----- ----- ---- Net income (loss) 35.9
(131.6) 496.5 73.9 Less: net income attributable to noncontrolling
interests (0.3) (0.1) (1.5) (0.1) ---- ---- ---- ---- Net income
(loss) attributable to Republic Services, Inc. $35.6 $(131.7)
$495.0 $73.8 ===== ======= ====== ===== Basic earnings per share
attributable to Republic Services, Inc. stockholders: Basic
earnings per share $0.09 $(0.55) $1.30 $0.38 ===== ====== =====
===== Weighted average common shares outstanding 380.8 239.1 379.7
196.7 ===== ===== ===== ===== Diluted earnings per share
attributable to Republic Services, Inc. stockholders: Diluted
earnings per share $0.09 $(0.55) $1.30 $0.37 ===== ====== =====
===== Weighted average common and common equivalent shares
outstanding 382.6 239.1 381.0 198.4 ===== ===== ===== ===== Cash
dividends per common share $0.19 $0.19 $0.76 $0.72 ===== =====
===== ===== REPUBLIC SERVICES, INC. UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31,
------------- 2009 2008 ---- ---- Cash Provided by Operating
Activities: Net income $496.5 $73.9 Adjustments to reconcile net
income to cash provided by operating activities: Depreciation and
amortization of property and equipment 520.6 222.6 Landfill
depletion and amortization 278.5 119.7 Amortization of intangible
and other assets 70.6 11.8 Accretion 88.8 23.9 Non-cash interest
expense - debt 92.1 10.1 Non-cash interest expense - other 58.1 0.5
Restructuring and synergy related charges 34.0 - Stock-based
compensation 15.0 24.0 Deferred tax benefit (24.6) (30.4) Provision
for doubtful accounts, net of adjustments 27.3 36.5 Excess income
tax benefit from stock option exercises (2.5) 2.8 Asset impairments
7.1 89.8 Loss on extinguishment of debt 134.1 - Gain on disposition
of assets, net (147.1) (1.4) Other non-cash items (0.1) 7.3 Change
in assets and liabilities, net of effects from business
acquisitions and divestitures: Accounts receivable 53.1 21.1
Prepaid expenses and other assets (11.9) 15.8 Accounts payable and
accrued liabilities (121.0) (198.2) Restructuring and synergy
related expenditures (66.5) - Capping, closure and post-closure
expenditures (100.9) (27.9) Remediation expenditures (56.2) (43.3)
Other liabilities 51.5 153.6 ---- ----- Cash Provided by Operating
Activities 1,396.5 512.2 ------- ----- Cash Used in Investing
Activities: Purchases of property and equipment (826.3) (386.9)
Proceeds from sales of property and equipment 31.8 8.2 Cash used in
acquisitions, net of cash acquired (0.1) (553.8) Cash proceeds from
divestitures, net of cash divested 511.1 3.3 Change in restricted
cash and marketable securities 41.6 (5.3) Other (0.6) (0.2) ----
---- Cash Used in Investing Activities (242.5) (934.7) ------
------ Cash (Used in) Provided by Financing Activities: Proceeds
from notes payable and long-term debt 1,472.6 1,453.4 Proceeds from
issuance of senior notes, net of discount 1,245.4 - Payments of
notes payable and long-term debt (3,583.9) (740.6) Premiums paid on
extinguishment of debt (47.3) - Fees paid to issue and retire
senior notes and certain hedging relationships (14.3) - Issuances
of common stock 39.6 24.6 Excess income tax benefit from stock
option exercises 2.5 4.5 Payments of deferred stock units - (4.0)
Equity issuance costs - (1.8) Purchases of common stock for
treasury (1.0) (138.4) Cash dividends paid (288.3) (128.3) ------
------ Cash (Used in) Provided by Financing Activities (1,174.7)
469.4 -------- ----- (Decrease) Increase in Cash and Cash
Equivalents (20.7) 46.9 Cash and Cash Equivalents at Beginning of
Period 68.7 21.8 ---- ---- Cash and Cash Equivalents at End of
Period $48.0 $68.7 ===== ===== The following information should be
read in conjunction with our audited consolidated financial
statements and notes thereto appearing in our Form 10-K as of and
for the year ended December 31, 2008 and 2009 when filed and our
current report on Form 8-K filed June 5, 2009. It should also be
read in conjunction with our unaudited consolidated financial
statements and notes thereto appearing in our Form 10-Q as of and
for the nine months ended September 30, 2009. All amounts below are
in millions, except per share data. REVENUE The following table
reflects our total revenue by line of business for the three and
twelve months ended December 31, 2009 and 2008: Three Months Ended
Year Ended December 31, December 31, ------------------
-------------- 2009 2008 2009 2008 ------ ------ ------ ------
Collection: Residential $542.4 $332.6 $2,187.0 $966.0 Commercial
626.6 398.9 2,553.4 1,161.4 Industrial 368.0 235.1 1,541.4 711.4
Other 6.8 7.0 26.9 23.2 --- --- ---- ---- Total collection 1,543.8
973.6 6,308.7 2,862.0 Transfer and disposal 738.6 456.8 3,113.5
1,343.4 Less: Intercompany (372.8) (228.3) (1,564.1) (683.5) ------
------ -------- ------ Transfer and disposal, net 365.8 228.5
1,549.4 659.9 Other 89.4 42.3 341.0 163.2 ---- ---- ----- -----
Total revenue $1,999.0 $1,244.4 $8,199.1 $3,685.1 ======== ========
======== ======== The following table summarizes our adjusted
revenue for the three and twelve months ended December 31, 2009 and
2008 which assumes our merger with Allied occurred on January 1,
2008: Three Months Ended Year Ended December 31, December 31,
------------------ ---------------- 2009 2008 2009 2008 ------
------ ------ ------ Republic Services, Inc. $1,999.0 $1,244.4
$8,199.1 $3,685.1 Allied Waste Industries, Inc. - 1,004.4 - 5,677.1
------- ------- ------- ------- 1,999.0 2,248.8 8,199.1 9,362.2
Less: Divestitures - (56.1) (9.0) (160.6) Less: Intercompany
revenue - (3.1) - (25.2) ------- ---- ------- ----- Adjusted
revenue $1,999.0 $2,189.6 $8,190.1 $9,176.4 ======== ========
======== ======== Adjusted revenue is used to calculate internal
growth for the three and twelve months ended December 31, 2009.
Intercompany revenue relates to prior year transactions between
Republic and Allied that would have been eliminated if the
companies had merged on January 1, 2008. The following table
reflects changes in our core adjusted revenue for the three and
twelve months ended December 31, 2009 and 2008. For comparative
purposes, we have presented the components of our revenue changes
for the three and twelve months ended December 31, 2009 assuming
our merger with Allied occurred on January 1, 2008. Our
presentation also eliminates revenue associated with divested
assets in the quarter the assets were sold and the comparable
quarter in the prior year. Three Months Ended Year Ended December
31, December 31, ------------------ -------------- 2009 2008 2009
2008 ------ ------ ------ ------ Core price 2.5% 4.8% 3.0% 4.4%
Fuel surcharges (2.2) 1.1 (2.5) 1.8 Commodities 0.7 (1.3) (1.7) 0.1
--- ---- ---- --- Total price 1.0 4.6 (1.2) 6.3 Core volume (9.7)
(6.6) (9.5) (3.8) ---- ---- ---- ---- Total internal growth (8.7)%
(2.0)% (10.7)% 2.5% ==== ==== ===== === Certain prior year amounts
have been reclassified to conform to the current year's
presentation. We believe that the presentation of adjusted revenue
and changes in adjusted revenue above provides useful information
to investors because it allows investors to understand increases or
decreases in our revenue that are driven by changes in the
operations of the newly combined company, and not merely by the
addition of Allied's revenues for periods after the merger. This
information has been prepared for illustrative purposes and is not
intended to be indicative of the revenue that would have been
realized had the merger been consummated at the beginning of the
periods presented or the future results of the combined operations.
MERGER WITH ALLIED We completed our acquisition of Allied effective
December 5, 2008. In accordance with the purchase method of
accounting, the purchase price paid was allocated to assets and
liabilities acquired based upon their estimated fair values as of
the effective date of the merger, with the excess of the purchase
price over the net assets acquired being recorded as goodwill.
Future adjustments, if any, made to assets and liabilities acquired
will be recorded in the consolidated statement of income. The
following table summarizes our revenue, costs and expenses for the
three and twelve months ended December 31, 2008 assuming the merger
with Allied occurred on January 1, 2008: Three Months Ended Year
Ended December 31, 2008 December 31, 2008 -------------------------
------------------------ Allied Republic Total Allied Republic
Total ------ -------- ----- ------ -------- ----- Revenue $1,004.4
$1,244.4 $2,248.8 $5,677.1 $3,685.1 $9,362.2 Cost of operations
594.5 863.2 1,457.7 3,463.3 2,416.7 5,880.0 ----- ----- -------
------- ------- ------- Gross profit 409.9 381.2 791.1 2,213.8
1,268.4 3,482.2 Depreciation, amortization, depletion, and
accretion 94.0 137.6 231.6 548.6 378.0 926.6 Selling, general and
administrative 113.5 182.7 296.2 555.7 434.7 990.4 Loss on
disposition of assets and merger related costs 61.3 172.5 233.8
106.3 172.5 278.8 ---- ----- ----- ----- ----- ----- Operating
income (loss) $141.1 $(111.6) $29.5 $1,003.2 $283.2 $1,286.4 ======
======= ===== ======== ====== ======== We believe that the
presentation of revenue and expenses above provides useful
information to investors because it allows investors to understand
increases or decreases in our revenue and expenses that are driven
by changes in the operations of the newly combined company, and not
merely by the addition of Allied's revenues and expenses for
periods after the merger. This information has been prepared for
illustrative purposes and is not intended to be indicative of the
results of operations that would have actually occurred had the
acquisition been consummated at the beginning of the periods
presented or the future results of the combined operations.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES Earnings before
Interest, Taxes, Depreciation, Depletion, Amortization and
Accretion Earnings before interest, taxes, depreciation, depletion,
amortization and accretion (EBITDA), which is not a measure
determined in accordance with GAAP, for the three and twelve months
ended December 31, 2009 and 2008 is calculated as follows: Three
Months Ended Year Ended December 31, December 31,
------------------ -------------- 2009 2008 2009 2008 -------
------ ------ ------ Net income (loss) attributable to Republic
Services, Inc. $35.6 $(131.7) $495.0 $73.8 Net income attributable
to noncontrolling interest 0.3 0.1 1.5 0.1 Provision (benefit) for
income taxes 44.6 (46.0) 368.5 85.4 Other (income) expense, net
(0.4) 0.9 (3.2) 1.6 Interest income (0.3) (1.7) (2.0) (9.6) Loss on
extinguishment of debt 102.3 - 134.1 - Interest expense 147.1 66.8
595.9 131.9 Depreciation, amortization and depletion 211.0 127.2
869.7 354.1 Accretion 21.4 10.4 88.8 23.9 ---- ---- ---- ----
EBITDA $561.6 $26.0 $2,548.3 $661.2 ====== ===== ======== ====== We
believe that the presentation of EBITDA is useful to investors
because it provides important information concerning our operating
performance exclusive of certain non-cash 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 rating and minimizing debt,
paying cash dividends, and maintaining and improving our market
position through business optimization. This measure has
limitations. Although depreciation, amortization, depletion and
accretion are considered operating costs in accordance with 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 We
reported diluted earnings per share were $0.09 and $(0.55) for the
three months ended December 31, 2009 and 2008, respectively, and
$1.30 and $0.37 for the twelve months ended December 31, 2009 and
2008, respectively. During the three and twelve months ended
December 31, 2009 and 2008, we recorded a number of gains, charges
(recoveries) and other expenses that impacted our EBITDA, pre-tax
income, net income attributable to Republic Services, Inc., (Net
Income - Republic) and diluted earnings per share. These items
primarily consist of the following: Three Months Ended December 31,
2009 --------------------------------------------- Net Diluted
Pre-tax Income - Earnings EBITDA Income Republic per Share ------
------- -------- --------- As reported $561.6 $80.5 $35.6 $0.09
Loss on extinguishment of debt - 102.3 63.7 0.17 Restructuring
charges 7.3 7.3 4.5 0.01 Costs to achieve synergies 9.9 9.9 6.1
0.02 Loss on disposition of assets and impairments, net 7.3 7.3
14.8 0.04 Remediation charges 2.1 2.1 1.3 - Tax effect of permanent
items - - - - --- --- --- --- Adjusted $588.2 $209.4 $126.0 $0.33
====== ====== ====== ===== Three Months Ended December 31, 2008
--------------------------------------------- Pre-tax Net Income
Diluted Income (Loss) - Earnings EBITDA (Loss) Republic per Share
------ ------- -------- --------- As reported $26.0 $(177.6)
$(131.7) $(0.55) Loss on extinguishment of debt - - - -
Restructuring charges 82.7 82.7 49.9 0.21 Costs to achieve
synergies 2.9 2.9 1.7 0.01 Loss on disposition of assets and
impairments, net 89.8 89.8 54.1 0.23 Remediation charges 87.8 87.8
53.0 0.22 Tax effect of permanent items - - 31.1 0.14 --- --- ----
---- Adjusted $289.2 $85.6 $58.1 $0.26 ====== ===== ===== =====
Year Ended December 31, 2009
--------------------------------------------- Net Diluted Pre-tax
Income - Earnings EBITDA Income Republic per Share ------ -------
-------- --------- As reported $2,548.3 $865.0 $495.0 $1.30 Loss on
extinguishment of debt - 134.1 83.3 0.22 Restructuring charges 63.2
63.2 38.6 0.10 Costs to achieve synergies 41.8 41.8 25.6 0.06
(Gain) loss on disposition of assets and impairments, net (137.0)
(137.0) (73.8) (0.19) Remediation (recoveries) charges (6.8) (6.8)
(4.1) (0.01) Tax effect of permanent items - - - - --- --- --- ---
Adjusted $2,509.5 $960.3 $564.6 $1.48 ======== ====== ====== =====
Year Ended December 31, 2008
--------------------------------------------- Net Diluted Pre-tax
Income - Earnings EBITDA Income Republic per Share ------ -------
-------- --------- As reported $661.2 $159.3 $73.8 $0.37 Loss on
extinguishment of debt - - - - Restructuring charges 82.7 82.7 49.9
0.25 Costs to achieve synergies 2.9 2.9 1.7 0.01 (Gain) loss on
disposition of assets and impairments, net 89.8 89.8 54.1 0.27
Remediation (recoveries) charges 155.8 156.8 94.6 0.48 Tax effect
of permanent items - - 31.1 0.16 --- --- ---- ---- Adjusted $992.4
$491.5 $305.2 $1.54 ====== ====== ====== ===== We believe that the
presentation of adjusted EBITDA, adjusted pre-tax income, adjusted
net income attributable to Republic Services Inc., and adjusted
diluted earnings per share, which are not measures determined in
accordance with 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. Comparable charges and costs have been incurred
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
attributable to Republic Services Inc., and adjusted diluted
earnings per share may not be comparable to similarly titled
measures presented by other companies. Cash Flow We define free
cash flow, which is not a measure determined in accordance with
GAAP, as cash provided by operating activities less purchases of
property and equipment plus proceeds from sales of property and
equipment as presented in our consolidated statements of cash
flows. Our free cash flow for the three and twelve months ended
December 31, 2009 and 2008 is calculated as follows: Three Months
Ended Year Ended December 31, December 31, ------------------
-------------- 2009 2008 2009 2008 ------ ------ ------ ------ Cash
provided by operating activities $384.1 $38.0 $1,396.5 $512.2
Purchases of property and equipment (283.8) (122.8) (826.3) (386.9)
Proceeds from sales of property and equipment 9.0 2.4 31.8 8.2 ---
--- ---- --- Free cash flow $109.3 $(82.4) $602.0 $133.5 ======
====== ====== ====== Purchases of property and equipment as
reflected on our consolidated statements of cash flows and the free
cash flow presented above represent amounts paid during the period
for such expenditures. A reconciliation of property and equipment
reflected on our consolidated statements of cash flows to property
and equipment received during the period is as follows: Three
Months Ended Year Ended December 31, December 31,
------------------ -------------- 2009 2008 2009 2008 ------ ------
------ ------ Purchases of property and equipment per the
consolidated statements of cash flows $283.8 $122.8 $826.3 $386.9
Adjustments for property and equipment received during the prior
period but paid for in the following period, net 77.8 11.5 36.3
(14.9) ---- ---- ---- ----- Property and equipment received during
the period $361.6 $134.3 $862.6 $372.0 ====== ====== ====== ======
The adjustments noted above do not affect either our net change in
cash and cash equivalents as reflected in our consolidated
statements of cash flows. We define adjusted free cash flow, which
is not a measure determined in accordance with GAAP, as cash
provided by operating activities, less property and equipment
received, plus proceeds from sales of property and equipment, plus
merger related expenditures, net of tax, plus tax settlement
related to BFI risk management companies, plus divesture related
tax payments. Our adjusted free cash flow for the twelve months
ended December 31, 2009 is calculated as follows: Year Ended
December 31, 2009 ------------- Cash provided by operating
activities $1,396.5 Property and equipment received (862.6)
Proceeds from sales of property and equipment 31.8 Merger related
expenditures, net of tax 75.4 Divestiture related tax payments
105.0 ----- Adjusted free cash flow $746.1 ====== We believe that
the presentation of adjusted free cash flow provides useful
information regarding our recurring cash provided by operating
activities after expenditures for property and equipment received,
plus proceeds from sales of property and equipment, plus merger
related expenditures, net of tax, plus tax settlement related to
BFI risk management companies, plus divesture related tax payments.
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 expenditures because it excludes certain
expenditures that are required or that 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. As of December 31, 2009,
accounts receivable was $865.1 million, net of allowance for
doubtful accounts of $55.2 million, resulting in days sales
outstanding of approximately 39 (or 24 net of deferred revenue).
CASH DIVIDENDS In October 2009, we paid a cash dividend of $72.2
million to stockholders of record as of October 1, 2009. As of
December 31, 2009, we recorded a dividend payable of $72.4 million
to stockholders of record at the close of business on January 4,
2010, which has been paid. In February 2010, our Board of Directors
declared a regular quarterly dividend of $0.19 per share payable to
stockholders of record as of April 1, 2010, which will be paid on
April 15, 2010. 2010 FINANCIAL GUIDANCE Adjusted Diluted Earnings
per Share The following is a summary of anticipated adjusted
diluted earnings per share for the year ended December 31, 2010
compared to the actual adjusted diluted earnings per share for the
year ended December 31, 2009 excluding loss on extinguishment of
debt, restructuring charges and costs to achieve synergies, gain on
the disposition of assets and impairments (net) and remediation
recoveries: (Anticipated) (Actual) Year Year Ended Ended December
31, December 31, 2010 2009 ------------- ------------ Diluted
earnings per share $1.48 - 1.52 $1.30 Loss on extinguishment of
debt 0.08 0.22 Restructuring charges and cost to achieve synergies
0.07 0.16 Gain on disposition of assets and impairments, net -
(0.19) Remediation recoveries - (0.01) --- ----- Adjusted diluted
earnings per share $1.63 - 1.67 $1.48 ============ ===== We believe
that the presentation of adjusted diluted earnings per share, which
excludes loss on extinguishment of debt, restructuring charges and
costs to achieve synergies, gains on the disposition of assets and
impairments (net) and remediation recoveries 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 when the integration process is complete. Comparable
charges and costs have been incurred 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 We define adjusted free
cash flow, which is not a measure determined in accordance with
GAAP, as cash provided by operating activities, less property and
equipment received, plus proceeds from sales of property and
equipment, plus merger related expenditures, net of tax, plus tax
settlement related to BFI risk management companies, plus
divestiture related tax payments. Our anticipated adjusted free
cash flow for the year ended December 31, 2010 and our actual
adjusted free cash flow for the year ended December 31, 2009 are
calculated as follows: (Anticipated) (Actual) Year Year Ended Ended
December 31, December 31, 2010 2009 ------------- ------------ Cash
provided by operating activities $1,340 - 1,365 $1,396.5 Property
and equipment received (790) (862.6) Proceeds from sales of
property and equipment 15 31.8 Merger related expenditures, net of
tax 10 75.4 Tax settlement related to BFI risk management companies
125 - Divestiture related tax payments - 105.0 ------------ -----
Adjusted free cash flow $700 - 725 $746.1 ============ ======
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 reflected on our consolidated statements of cash flows to
property and equipment received during the period is as follows:
(Anticipated) (Actual) Year Year Ended Ended December 31, December
31, 2010 2009 ------------- ------------ Purchases (cash payment)
of property and equipment per the consolidated statements of cash
flows $870 $826.3 Adjustments for property and equipment received
during the prior period but paid for in the following period, net
(80) 36.3 --- ---- Property and equipment received during the
period $790 $862.6 ==== ====== We believe that the presentation of
adjusted free cash flow provides useful information regarding our
recurring cash provided by operating activities after expenditures
for property and equipment received, plus proceeds from sales of
property and equipment, plus merger related expenditures, net of
tax, plus tax settlement related to BFI risk management companies,
plus divestiture related tax payments. 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
expenditures because it excludes certain expenditures that are
required or that 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 Certain statements and information included herein
constitute 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," "could" and similar expressions are intended to
identify forward-looking statements. These statements include
statements about the expected benefits of the merger, 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 can give no assurance 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: -- our ability to successfully
integrate Allied's and Republic's operations and to achieve
synergies or create long-term value for stockholders as expected,
including the possibility that we will experience significant and
unexpected transaction- and integration-related costs; -- the
impact on us of our substantial post-merger indebtedness, including
on our ability to obtain financing on acceptable terms to finance
our operations and growth strategy and to operate within the
limitations imposed by financing arrangements and the fact that any
downgrade in our bond ratings could adversely impact us; -- general
economic and market conditions including, but not limited to, the
current global economic and financial market crisis, inflation and
changes in commodity pricing, fuel, labor, risk and health
insurance and other variable costs that are generally not within
our control, and our exposure to credit and counterparty risk; --
whether our estimates and assumptions concerning our selected
balance sheet accounts, income tax accounts, final capping,
closure, post-closure and remediation costs, available airspace,
and projected costs and expenses related to our landfills and
property and equipment (including our estimates of the fair values
of the assets and liabilities acquired in our acquisition of
Allied), and labor, fuel rates and economic and inflationary
trends, turn out to be correct or appropriate; -- competition and
demand for services in the solid waste industry; -- the fact that
price increases or changes in commodity prices may not be adequate
to offset the impact of increased costs, including but not limited
to labor, third-party disposal and fuel, and may cause us to lose
volume; -- our ability to manage growth and execute our growth
strategy; -- our compliance with, and future changes in,
environmental and flow control regulations and our ability to
obtain approvals from regulatory agencies in connection with
operating and expanding our landfills; -- our ability to retain our
investment grade ratings for our debt; -- our dependence on key
personnel; -- our dependence on large, long-term collection,
transfer and disposal contracts; -- the fact that our business is
capital intensive and may consume cash in excess of cash flow from
operations; -- that any exposure to environmental liabilities, to
the extent not adequately covered by insurance, could result in
substantial expenses; -- risks associated with undisclosed
liabilities of acquired businesses; -- risks associated with
pending and any future legal proceedings, including our matters
currently pending with the Department of Justice and Internal
Revenue Service; -- severe weather conditions, which could impair
our financial results by causing increased costs, loss of revenue,
reduced operational efficiency or disruptions to our operations; --
compliance with existing and future legal and regulatory
requirements, including limitations or bans on disposal of certain
types of wastes or on the transportation of waste, which could
limit our ability to conduct or grow our business, increase our
costs to operate or require additional capital expenditures; -- any
litigation, audits or investigations brought by or before any
governmental body; -- workforce factors, including potential
increases in our costs if we are required to provide additional
funding to any multi-employer pension plan to which we contribute
and the negative impact on our operations of union organizing
campaigns, work stoppages or labor shortages; -- the negative
effect that trends toward requiring recycling, waste reduction at
the source and prohibiting the disposal of certain types of wastes
could have on volumes of waste going to landfills; -- changes by
the Financial Accounting Standards Board or other accounting
regulatory bodies to generally accepted accounting principles or
policies; -- acts of war, riots or terrorism, including the events
taking place in the Middle East and the continuing war on
terrorism, as well as actions taken or to be taken by the United
States or other governments as a result of further acts or threats
of terrorism, and the impact of these acts on economic, financial
and social conditions in the United States; and -- the timing and
occurrence (or non-occurrence) of transactions and events which may
be subject to circumstances beyond our control. The risks included
here are not exhaustive. Refer to "Part I, Item 1A -- Risk Factors"
in our Annual Report on Form 10-K for the year ended December 31,
2008 and 2009 when filed, for further discussion regarding our
exposure to risks. Additionally, new risk factors emerge from time
to time and it is not possible for us to predict all such risk
factors, nor to assess the impact such risk factors might have on
our business or the extent to which any factor or combination of
factors may cause actual results to differ materially from those
contained in any forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements
which speak only as of the date hereof. Except to the extent
required by applicable law or regulation, we undertake no
obligation to update or publish revised forward-looking statements
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. DATASOURCE:
Republic Services, Inc. CONTACT: Media, Will Flower,
+1-480-718-6565, or Investors, Ed Lang, +1-480-627-7128, both of
Republic Services, Inc. Web Site: http://www.republicservices.com/
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