Republic Services(US:RSG)2025-07-30 01:51PART I — FINANCIAL INFORMATION This section provides the unaudited consolidated financial statements, management's discussion and analysis, and disclosures on market risk and internal controls for Republic Services, Inc Financial Statements This section presents Republic Services, Inc.'s unaudited consolidated financial statements for Q2 and H1 2025, including balance sheets, income, cash flows, and detailed accounting notes Consolidated Financial Statements The consolidated financial statements reflect asset growth to $33.4 billion, with Q2 2025 revenue reaching $4.24 billion and H1 operating cash flow increasing to $2.13 billion Consolidated Balance Sheet Summary | | June 30, 2025 (Unaudited) (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total current assets | $2,416 | $2,406 | | Property and equipment, net | $12,049 | $11,877 | | Goodwill | $16,626 | $15,982 | | Total assets | $33,397 | $32,402 | | Total current liabilities | $3,647 | $4,128 | | Long-term debt, net | $12,546 | $11,851 | | Total liabilities | $20,945 | $20,995 | | Total stockholders' equity | $12,052 | $11,407 | | Total liabilities and stockholders' equity | $33,397 | $32,402 | Consolidated Statements of Income Summary | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,235 | $4,048 | $8,244 | $7,910 | | Operating income | $861 | $814 | $1,665 | $1,547 | | Net income attributable to Republic Services, Inc. | $550 | $512 | $1,045 | $965 | | Diluted earnings per share | $1.75 | $1.62 | $3.33 | $3.06 | Consolidated Statements of Cash Flows Summary | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $2,134 | $1,911 | | Cash used in investing activities | $(1,815) | $(1,113) | | Cash used in financing activities | $(260) | $(435) | Notes to Unaudited Consolidated Financial Statements The notes detail accounting principles, business acquisitions, debt structure, and segment reporting, including the Shamrock acquisition and goodwill allocation - The company operates and reports through three segments: Group 1 (recycling and waste in the western U.S.), Group 2 (recycling and waste in the southeastern/mid-western U.S. and Canada), and Group 3 (environmental solutions across the U.S. and Canada)2494 - In February 2025, the company acquired Shamrock, a provider of industrial waste and wastewater treatment services, to expand its environmental solutions business35 Acquisition Summary | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash used in acquisitions, net | $862 | $41 | | Total Purchase Price | $873 | $41 | | Goodwill allocated | $632 | $16 | | Other intangible assets allocated | $110 | $4 | - Total debt carrying value increased to $12.97 billion as of June 30, 2025, from $12.71 billion at December 31, 2024, with the company issuing $1.2 billion in new senior notes in March 20255868 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q2 and H1 2025 financial results, covering revenue growth, segment performance, cost changes, updated 2025 outlook, liquidity, and capital resources Overview and Outlook The company provides updated full-year 2025 financial guidance, anticipating revenue between $16.675 billion and $16.750 billion, reflecting strategic growth and potential labor impacts Full-Year 2025 Financial Guidance | Guidance for Year Ending Dec 31, 2025 | Anticipated Range | | :--- | :--- | | Revenue | $16.675 billion - $16.750 billion | | Diluted EPS | $6.72 - $6.74 | | Adjusted Diluted EPS | $6.82 - $6.90 | - Revenue for the first six months of 2025 increased by 4.2% to $8.244 billion compared to the same period in 2024, driven by a 4.3% increase in average yield and 1.2% from acquisitions129 Results of Operations This section analyzes H1 2025 income statement results, noting 4.2% revenue growth, reduced cost of operations to 57.8% of revenue, and an improved operating income margin of 20.2% Revenue Growth Components | Revenue Growth Components (%) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Average yield | 4.1% | 4.3% | | Fuel recovery fees | (0.3%) | (0.4%) | | Volume | 0.2% | (0.5%) | | Acquisitions / divestitures, net | 1.5% | 1.2% | | Total Revenue Change | 4.6% | 4.2% | Cost of Operations as Percentage of Revenue | Cost of Operations (% of Revenue) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Labor and related benefits | 19.9% | 20.0% | | Maintenance and repairs | 9.0% | 9.1% | | Fuel | 2.7% | 3.0% | | Total cost of operations | 57.9% | 58.8% | - The national average diesel fuel price per gallon decreased to $3.56 in Q2 2025 from $3.86 in Q2 2024, contributing to lower fuel costs157 - Interest expense increased in Q2 and H1 2025 primarily due to higher interest rates on fixed-rate debt162 Reportable Segments Reportable segments showed growth in core recycling and waste businesses, with Group 1 and Group 2 Adjusted EBITDA increasing significantly in Q2 2025, while Group 3 saw a slight decrease Adjusted EBITDA by Segment | Adjusted EBITDA (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Group 1 | $622 | $571 | | Group 2 | $630 | $575 | | Group 3 | $109 | $112 | | Total Adjusted EBITDA | $1,361 | $1,258 | - Group 1's performance was boosted by increased average yield and higher special waste volumes from wildfire remediation in the Los Angeles area175 - Group 2's growth was driven by higher average yield and increased landfill volumes, including construction and demolition waste from Hurricane Helene recovery efforts179 Liquidity and Capital Resources The company maintains strong liquidity, with H1 2025 operating cash flow increasing to $2.13 billion, supporting capital expenditures and acquisitions, and $2.7 billion available under its credit facility Summary of Cash Flows | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $2,134 | $1,911 | | Capital Expenditures | $(866) | $(918) | | Cash used in acquisitions and investments | $(963) | $(201) | | Dividends paid | $(362) | $(337) | | Purchases of common stock for treasury | $(59) | $(168) | - The company expects to invest at least $1 billion in acquisitions in 2025188 - As of June 30, 2025, the company had $2.7 billion of availability under its $3.5 billion Credit Facility202 Quantitative and Qualitative Disclosures About Market Risk This section outlines the company's market risk exposure to fuel prices, recycled commodity prices, and interest rates, with sensitivity analyses indicating potential impacts on costs and income - A twenty-cent per gallon change in the price of diesel fuel would change annual fuel costs by approximately $27 million, which would be more than offset by an estimated $38 million change in fuel recovery fees220 - A $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $11 million224 - A 100 basis point change in interest rates on the company's $1.674 billion of floating-rate debt would change annualized interest expense by approximately $17 million226 Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025227 - The assessment of internal control over financial reporting as of June 30, 2025, did not include the recently acquired Shamrock business, which was acquired in February 2025229 PART II — OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity security purchases, and other disclosures Legal Proceedings The company reports legal proceedings with an aggregate accrual of approximately $16 million as of June 30, 2025, with no expected material adverse impact - As of June 30, 2025, the company has recorded an aggregate accrual of approximately $16 million for outstanding legal proceedings233 - If the high end of the estimated loss ranges were used, the aggregate potential liability would be approximately $7 million higher than the amount recorded233 Risk Factors The company states that there have been no material changes to the risk factors disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024235 Issuer Purchases of Equity Securities Republic Services did not repurchase common stock during Q2 2025, with approximately $2.47 billion remaining available under its $3.0 billion share repurchase authorization Issuer Share Repurchases | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares that May Yet Be Purchased Under the Program | | :--- | :--- | :--- | :--- | | April 1 - 30, 2025 | — | $ — | $2,465,815,052 | | May 1 - 31, 2025 | — | $ — | $2,465,815,052 | | June 1 - 30, 2025 | — | $ — | $2,465,815,052 | - The company has a $3.0 billion share repurchase authorization effective from January 1, 2024, through December 31, 2026241 Defaults upon Senior Securities The company reports no defaults upon senior securities - None238 Mine Safety Disclosures The company reports no mine safety disclosures - None239 Other Information The company reports that no director or officer adopted or terminated a Rule 10b5-1 trading plan or any other non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - During the quarter ended June 30, 2025, no director or officer adopted or terminated any contract, instrument or written plan for the purchase or sale of Republic securities under Rule 10b5-1(c)240 Exhibits This section lists the exhibits filed with the Form 10-Q, including an amendment to the credit agreement, CEO and CFO certifications, and XBRL data files