Republic Services, Inc. Reports Fourth Quarter and Full-Year Results; Provides 2023 Full-Year Guidance

• Fourth Quarter Total Revenue Growth of 20 Percent Included Approximately 11 Percent Growth from Acquisitions

• Fourth Quarter Earnings Per Share of $1.09 and Adjusted Earnings Per Share of $1.13

• Generated Cash Flow from Operations of $3,190 Million and Adjusted Free Cash Flow of $1,742 Million in 2022

• Exceeded Full-Year Financial Guidance by Growing Adjusted Free Cash Flow 15 Percent and Adjusted EPS 18 Percent

• Invested $2.7 Billion in Value-Creating Acquisitions and Returned $796 Million of Cash to Shareholders in 2022

PHOENIX, Feb. 15, 2023 /PRNewswire/ -- Republic Services, Inc. (NYSE: RSG) today reported net income of $346.8 million, or $1.09 per diluted share, for the three months ended December 31, 2022, versus $313.1 million, or $0.98 per diluted share, for the comparable 2021 period. Excluding certain benefits and expenses, on an adjusted basis, net income for the three months ended December 31, 2022 was $358.1 million, or $1.13 per diluted share, versus $325.5 million, or $1.02 per diluted share, for the comparable 2021 period.

For the year ended December 31, 2022, net income was $1,487.6 million, or $4.69 per diluted share, versus $1,290.4 million, or $4.04 per diluted share, for the comparable 2021 period. Excluding certain benefits and expenses, on an adjusted basis, net income for the year ended December 31, 2022 was $1,562.8 million, or $4.93 per diluted share, versus $1,330.6 million, or $4.17 per diluted share, for the comparable 2021 period.

"We finished the year strong by executing our strategy designed to profitably grow the business," said Jon Vander Ark, president and chief executive officer. "During 2022, we delivered double-digit growth in revenue, EBITDA, earnings and free cash flow that exceeded our full-year expectations. Our initiatives that support our differentiated capabilities are driving tangible results, and we continue to successfully integrate the acquisition of US Ecology. I am proud of what the Republic Services team accomplished during the year, which keeps us well-positioned to produce outsized growth in 2023."

Fourth-Quarter 2022 Highlights:

• Total revenue growth of 19.5 percent includes 8.3 percent of organic growth and 11.2 percent of growth from acquisitions.
  
  

• Core price on total revenue increased revenue by 7.4 percent. Core price on related business revenue increased revenue by 8.4 percent, which consisted of 10.4 percent in the open market and 5.1 percent in the restricted portion of the business.
  
  

• Revenue growth from average yield on total revenue was 5.9 percent, and volume increased revenue by 1.5 percent. Revenue growth from average yield on related business revenue was 6.7 percent.
  
  

• Net income was $346.8 million, or 9.8 percent of revenue.
  
  

• EPS was $1.09 per share, an increase of 11.2 percent over the prior year.
  
  

• Adjusted EPS, a non-GAAP measure, was $1.13 per share, an increase of 10.8 percent over the prior year.
  
  

• Adjusted EBITDA, a non-GAAP measure, was $965.0 million and adjusted EBITDA margin, a non-GAAP measure, was 27.3 percent of revenue.
  
  

• The Company's average recycled commodity price per ton sold during the fourth quarter was $88. This represents a decrease from the third quarter of 2022 of $74 per ton and a decrease of $130 per ton over the prior year.
  
  

• Republic was named to the Dow Jones Sustainability Index for the seventh consecutive year and maintained an "A" in MSCI's ESG ratings, which is the highest rating among environmental services providers.

Full-Year 2022 Highlights:

• Total revenue growth of 19.6 percent includes 10.0 percent of organic growth and 9.6 percent of growth from acquisitions.
  
  

• Core price on total revenue increased revenue by 6.7 percent. Core price on related business revenue increased revenue by 7.3 percent, which consisted of 9.2 percent in the open market and 4.3 percent in the restricted portion of the business.
  
  

• Revenue growth from average yield on total revenue was 5.2 percent, and volume increased revenue by 2.4 percent. Revenue growth from average yield on related business revenue was 5.7 percent.
  
  

• Net income was $1.5 billion, or 11.0 percent of revenue.
  
  

• EPS was $4.69 per share, an increase of 16.1 percent over the prior year.
  
  

• Adjusted EPS was $4.93 per share, an increase of 18.2 percent over the prior year. Adjusted EPS exceeded the Company's upwardly revised guidance.
  
  

• Adjusted EBITDA was $3.9 billion and adjusted EBITDA margin was 29.1 percent of revenue.
  
  

• Cash provided by operating activities was $3,190.0 million, an increase of 14.5 percent over the prior year.
  
  

• Adjusted free cash flow, a non-GAAP measure, was $1,742.4 million, an increase of 15.0 percent versus the prior year. Adjusted free cash flow exceeded the Company's upwardly revised guidance.
  
  

• Cash invested in acquisitions was $2.7 billion, $2.2 billion of which related to the acquisition of US Ecology.
  
  

• Cash returned to shareholders was $796.4 million, which included $203.5 million of share repurchases and $592.9 million of dividends paid.
  
  

• The Company's average recycled commodity price per ton sold during the year was $170. This represents a decrease from the prior year of $17 per ton.

2023 Financial Guidance

Republic's financial guidance is based on current economic conditions and does not assume any significant changes in the overall economy in 2023. Please refer to the Reconciliation of 2023 Financial Guidance section of this document for detail relating to the computation of non-GAAP measures as well as the Information Regarding Forward-Looking Statements section of this document.

Full-year 2023 financial guidance is as follows:

• Revenue: Republic expects revenue to be in the range of $14.650 billion to $14.800 billion. The Company expects growth from average yield on total revenue of approximately 5.5% and volume growth to be in the range of 0.5% to 1.0%. Average yield on related business revenue is expected to be 6.5%.
  
  

• Adjusted EBITDA: Republic expects adjusted EBITDA to be in the range of $4.275 billion to $4.325 billion.
  
  

• Adjusted Diluted Earnings per Share: The Company expects adjusted diluted earnings per share to be in the range of $5.15 to $5.23.
  
  

• Adjusted Free Cash Flow: Republic expects adjusted free cash flow to be in the range of $1.86 billion to $1.90 billion. The Company expects to receive between $1.65 billion to $1.67 billion of property and equipment, net of proceeds from the sale of property and equipment.
  
  

• Acquisitions: Republic expects to invest at least $500 million in acquisitions in 2023. The 2023 financial guidance only includes the expected contribution from acquisitions that closed through December 31, 2022.

"We expect to deliver high single-digit growth in revenue, EBITDA and free cash flow in 2023, even with the headwinds from lower recycled commodity prices and higher interest rates," said Mr. Vander Ark. "Our strong financial guidance is underpinned by pricing in excess of cost inflation, leveraging digital tools to drive productivity improvements and increase customer retention, and continuing to invest in sustainability initiatives to produce value-creating growth."

Company Declares Quarterly Dividend

Republic previously announced that its Board of Directors declared a regular quarterly dividend of $0.495 per share for shareholders of record on April 3, 2023. The dividend will be paid on April 14, 2023.

Presentation of Certain Key Performance Metrics and Non-GAAP Measures

Adjusted diluted earnings per share, adjusted net income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA by business type, adjusted EBITDA margin by business type and adjusted free cash flow are described in the Key Performance Metrics and Reconciliations of Certain Non-GAAP Measures section of this document.

About Republic Services
Republic Services, Inc. is a leader in the environmental services industry. Through its subsidiaries, the Company provides customers with the most complete set of products and services, including recycling, solid waste, special waste, hazardous waste, container rental and field services. Republic's industry-leading commitments to advance circularity, reduce emissions and decarbonize operations are helping deliver on its vision to partner with customers to create a more sustainable world. For more information, please visit RepublicServices.com.

For more information, contact:
Media Inquiries	Investor Inquiries
Donna Egan (480) 757-9770	Aaron Evans (480) 718-0309
media@RepublicServices.com	investor@RepublicServices.com

SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION
AND OPERATING DATA
REPUBLIC SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
	December 31,		December 31,
	2022		2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$ 143.4		$ 29.0
Accounts receivable, less allowance for doubtful accounts and other of $51.9 and $38.5, respectively	1,677.2		1,271.4
Prepaid expenses and other current assets	536.5		410.4
Total current assets	2,357.1		1,710.8
Restricted cash and marketable securities	127.6		139.0
Property and equipment, net	10,743.2		9,232.1
Goodwill	14,451.5		12,826.0
Other intangible assets, net	347.2		259.5
Other assets	1,024.3		787.6
Total assets	$ 29,050.9		$ 24,955.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$ 1,221.8		$ 910.0
Notes payable and current maturities of long-term debt	455.9		8.2
Deferred revenue	443.0		381.3
Accrued landfill and environmental costs, current portion	132.6		124.5
Accrued interest	79.0		62.1
Other accrued liabilities	1,056.0		929.5
Total current liabilities	3,388.3		2,415.6
Long-term debt, net of current maturities	11,328.8		9,546.2
Accrued landfill and environmental costs, net of current portion	2,141.3		1,837.7
Deferred income taxes and other long-term tax liabilities, net	1,528.8		1,229.5
Insurance reserves, net of current portion	315.1		303.9
Other long-term liabilities	661.8		642.4
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; 320.3 and 319.6 issued including shares held in treasury, respectively	3.2		3.2
Additional paid-in capital	2,843.2		2,789.5
Retained earnings	7,356.3		6,475.6
Treasury stock, at cost; 4.2 and 2.4 shares, respectively	(504.6)		(274.8)
Accumulated other comprehensive loss, net of tax	(12.1)		(14.6)
Total Republic Services, Inc. stockholders' equity	9,686.0		8,978.9
Non-controlling interests in consolidated subsidiary	0.8		0.8
Total stockholders' equity	9,686.8		8,979.7
Total liabilities and stockholders' equity	$ 29,050.9		$ 24,955.0

REPUBLIC SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
	Three Months Ended December 31,				Years Ended December 31,
	2022		2021		2022		2021
Revenue	$ 3,529.7		$ 2,952.9		$ 13,511.3		$ 11,295.0
Expenses:
Cost of operations	2,181.3		1,809.9		8,205.0		6,737.7
Depreciation, amortization and depletion	349.8		299.0		1,351.6		1,185.5
Accretion	22.7		20.8		89.6		82.7
Selling, general and administrative	395.3		315.5		1,454.3		1,195.8
Adjustment to withdrawal liability for a multiemployer pension fund	(3.8)		—		(1.6)		—
Gain (loss) on business divestitures and impairments, net	(1.0)		0.7		(6.3)		0.5
Restructuring charges	8.2		5.4		27.0		16.6
Operating income	577.2		501.6		2,391.7		2,076.2
Interest expense	(112.9)		(79.7)		(395.6)		(314.6)
Loss from unconsolidated equity method investments	(96.4)		(144.5)		(165.6)		(188.5)
Interest income	1.4		0.6		3.3		2.5
Other income (expense), net	4.1		(1.1)		(2.3)		(0.5)
Income before income taxes	373.4		276.9		1,831.5		1,575.1
Provision (benefit) for income taxes	26.4		(36.2)		343.9		282.8
Net income	347.0		313.1		$ 1,487.6		1,292.3
Net income attributable to non-controlling interests in consolidated subsidiary	(0.2)		—		—		(1.9)
Net income attributable to Republic Services, Inc.	$ 346.8		$ 313.1		$ 1,487.6		$ 1,290.4
Basic earnings per share attributable to Republic Services, Inc. stockholders:
Basic earnings per share	$ 1.10		$ 0.99		$ 4.70		$ 4.05
Weighted average common shares outstanding	316.5		317.6		316.5		318.8
Diluted earnings per share attributable to Republic Services, Inc. stockholders:
Diluted earnings per share	$ 1.09		$ 0.98		$ 4.69		$ 4.04
Weighted average common and common equivalent shares outstanding	317.1		318.5		317.1		319.4
Cash dividends per common share	$ 0.495		$ 0.460		$ 1.910		$ 1.770

REPUBLIC SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
	Years Ended December 31,
	2022		2021
Cash provided by operating activities:
Net income	$ 1,487.6		$ 1,292.3
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization, depletion and accretion	1,441.2		1,268.2
Non-cash interest expense	71.6		70.5
Stock-based compensation	38.8		57.0
Deferred tax provision (benefit)	181.1		(15.5)
Provision for doubtful accounts, net of adjustments	41.5		19.9
(Gain) loss on disposition of assets and asset impairments, net	(9.2)		0.4
Environmental adjustments	2.9		0.5
Loss from unconsolidated equity method investments	165.6		188.5
Other non-cash items	(0.1)		(1.1)
Change in assets and liabilities, net of effects from business acquisitions and divestitures:
Accounts receivable	(198.8)		(135.4)
Prepaid expenses and other assets	(83.8)		(57.0)
Accounts payable	106.4		113.8
Capping, closure and post-closure expenditures	(64.6)		(59.6)
Remediation expenditures	(54.7)		(57.1)
Other liabilities	64.5		101.3
Cash provided by operating activities	3,190.0		2,786.7
Cash (used in) provided by investing activities:
Purchases of property and equipment	(1,454.0)		(1,316.3)
Proceeds from sales of property and equipment	32.8		19.5
Cash used in acquisitions and investments, net of cash and restricted cash acquired	(3,038.5)		(1,221.7)
Cash received from business divestitures	50.6		46.3
Purchases of restricted marketable securities	(19.6)		(30.8)
Sales of restricted marketable securities	19.7		37.9
Other	(14.0)		(1.0)
Cash used in investing activities	(4,423.0)		(2,466.1)
Cash provided by (used in) financing activities:
Proceeds from credit facilities and notes payable, net of fees	16,446.3		5,154.3
Proceeds from issuance of senior notes, net of discount and fees	—		692.3
Payments of credit facilities and notes payable	(14,281.7)		(5,304.5)
Issuances of common stock, net	(13.6)		(12.0)
Purchases of common stock for treasury	(203.5)		(252.2)
Cash dividends paid	(592.9)		(552.6)
Distributions paid to non-controlling interests in consolidated subsidiary	(0.8)