Republic Services, Inc. Reports Fourth Quarter Results And Provides 2013 Guidance

   Republic Services, Inc. Reports Fourth Quarter Results And Provides 2013
                                   Guidance

For 2012, Republic Reports Adjusted Free Cash Flow of $768 Million and Returns
$655 Million in Cash to Stockholders

PR Newswire

PHOENIX, Feb. 7, 2013

PHOENIX, Feb. 7, 2013 /PRNewswire/ -- Republic Services, Inc. (NYSE: RSG)
today reported net income of $127.0 million, or $0.35 per diluted share, for
the three months ended Dec.31, 2012, versus $191.0 million, or $0.51 per
diluted share, for the comparable 2011 period.

(Logo: http://photos.prnewswire.com/prnh/20100304/RSLOGO) 

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

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

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

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

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

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

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

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

Fiscal Year 2013 Guidance

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

Specific guidance is as follows:

  oAdjusted Free Cash Flow: We expect adjusted free cash flow for 2013 to be
    $675 million to $700 million. Adjusted free cash flow excludes a number
    of charges and other expenses and benefits. Detail relating to the
    computation of Adjusted Free Cash Flow is contained in the Reconciliation
    of Certain Non-GAAP Measures section of this document.
  oAdjusted Diluted Earnings per Share: We expect 2013 adjusted diluted
    earnings per share to be in the range of $1.86 to $1.91. This assumes a
    full year effective tax rate of approximately 38 percent. Adjusted
    diluted earnings per share excludes loss on extinguishment of debt, if
    any, negotiation and withdrawal costs - Central States Pension Fund,
    restructuring charges and (gain) loss on disposition of assets and
    impairments, net, if any.
  oRevenue: We expect an increase in revenue for 2013 of 2.0 to 2.5 percent
    comprised of the following:

                                 Increase

                                 (Decrease)
Core price                       1.0 to 1.5
Volume                           0.0
Fuel recovery fees               0.2
Recycling commodities            (0.2)
Acquisitions / divestitures, net 1.0
Total change                     2.0 to 2.5

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

  oProperty and Equipment: In 2013, we anticipate receiving $860 million of
    property and equipment. Purchases of property and equipment as reflected
    on our consolidated statement of cash flows for 2013 are expected to be
    $880 million and represent amounts to be paid during 2013 for such
    expenditures. The $20 million difference between property and equipment
    received and purchases of property and equipment represents property and
    equipment received during 2012, but paid for in 2013.
  oMargins: We expect EBITDA margins for 2013 to be approximately 29
    percent.
  oTaxes: We expect our provision for income taxes in 2013 to be 38 percent
    and to approximate our cash taxes.

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

Company Declares Quarterly Dividend

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

About Republic

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

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



SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION
AND OPERATING DATA
REPUBLIC SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
                                                    December 31,  December 31,
                                                    2012          2011
                                                    (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                           $  67.6       $  66.3
Accounts receivable, less allowance for doubtful    836.6         825.8
accounts of $45.3 and $48.1, respectively
Prepaid expenses and other current assets           209.3         215.9
Deferred tax assets                                 117.8         157.7
Total current assets                                1,231.3       1,265.7
Restricted cash and marketable securities           164.2         189.6
Property and equipment, net                         6,910.3       6,792.3
Goodwill                                            10,690.0      10,647.0
Other intangible assets, net                        358.7         409.6
Other assets                                        262.4         247.3
Total assets                                        $  19,616.9   $  19,551.5
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                    $  474.5      $  563.6
Notes payable and current maturities of long-term   19.4          34.8
debt
Deferred revenue                                    313.2         290.2
Accrued landfill and environmental costs, current   195.5         184.2
portion
Accrued interest                                    68.8          72.2
Other accrued liabilities                           623.6         752.5
Total current liabilities                           1,695.0       1,897.5
Long-term debt, net of current maturities           7,051.1       6,887.0
Accrued landfill and environmental costs, net of    1,420.6       1,396.5
current portion
Deferred income taxes and other long-term tax       1,232.7       1,161.1
liabilities
Self-insurance reserves, net of current portion     290.9         303.9
Other long-term liabilities                         220.9         222.1
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; 405.2 and 402.1 issued including shares 4.1           4.0
held in treasury, respectively
Additional paid-in capital                          6,588.9       6,495.6
Retained earnings                                   2,403.2       2,164.7
Treasury stock, at cost (44.1 and 32.2 shares,      (1,287.1)     (961.5)
respectively)
Accumulated other comprehensive loss, net of tax    (5.8)         (21.5)
Total Republic Services, Inc. stockholders' equity  7,703.3       7,681.3
Noncontrolling interests                            2.4           2.1
Total stockholders' equity                          7,705.7       7,683.4
Total liabilities and stockholders' equity          $  19,616.9   $  19,551.5



REPUBLIC SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
                     Three Months Ended December 31,  Years Ended December 31,
                     2012              2011           2012          2011
Revenue              $   2,028.3       $  2,025.2     $  8,118.3    $ 8,192.9
Expenses:
Cost of operations   1,283.5           1,207.7        5,005.7       4,865.1
Depreciation,
amortization and     216.4             214.2          848.5         843.6
depletion
Accretion            19.3              19.4           78.4          78.0
Selling, general and 207.3             213.9          820.9         825.4
administrative
Negotiation and
withdrawal costs -   1.2               —              35.8          —
Central
StatesPension Fund
Loss (gain) on
disposition of       0.7               3.3            (2.7)         28.1
assets and
impairments, net
Restructuring        11.1              —              11.1          —
charges
Operating income     288.8             366.7          1,320.6       1,552.7
Interest expense     (92.2)            (104.8)        (388.5)       (440.2)
Loss on
extinguishment of    —                 (3.5)          (112.6)       (210.8)
debt
Interest income      0.2               0.1            1.0           0.3
Other income, net    2.3               0.5            3.4           4.3
Income before income 199.1             259.0          823.9         906.3
taxes
Provision for income 72.1              68.0           251.8         317.4
taxes
Net income           127.0             191.0          572.1         588.9
Net (income) loss
attributable to      —                 —              (0.3)         0.3
noncontrolling
interests
Net income
attributable to      $   127.0         $  191.0       $  571.8      $ 589.2
Republic Services,
Inc.
Basic earnings per
share attributable
to Republic
Services,Inc.
stockholders:
Basic earnings per   $   0.35          $  0.52        $  1.56       $ 1.57
share
Weighted average
common shares        363.2             370.3          366.9         376.0
outstanding
Diluted earnings per
share attributable
to Republic
Services, Inc.
stockholders:
Diluted earnings per $   0.35          $  0.51        $  1.55       $ 1.56
share
Weighted average
common and common    364.3             371.6          368.0         377.6
equivalent shares
outstanding
Cash dividends per   $   0.235         $  0.220       $  0.910      $ 0.840
common share



REPUBLIC SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
                                                      Years Ended December 31,
                                                      2012          2011
Cash provided by operating activities:
Net income                                            $   572.1     $  588.9
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation, amortization, depletion and accretion   926.9         921.6
Non-cash interest expense                             58.4          75.4
Restructuring related charges                         11.1          —
Stock-based compensation                              21.2          20.6
Deferred tax provision                                83.9          334.8
Provision for doubtful accounts, net of adjustments   29.7          21.0
Loss on extinguishment of debt                        112.6         210.8
(Gain) loss on disposition of assets, net and asset   (14.1)        6.1
impairments
Withdrawal liability - Central States Pension Fund    30.7          —
Environmental adjustments                             62.4          3.6
Excess income tax benefit from stock option exercises (4.1)         (9.2)
and other non-cash items
Change in assets and liabilities, net of effects from
business acquisitions and divestitures:
Accounts receivable                                   (37.2)        (16.0)
Prepaid expenses and other assets                     (13.9)        (5.1)
Accounts payable                                      (49.6)        11.9
Restructuring and synergy related payments            (70.3)        (3.0)
Capping, closure and post-closure payments            (77.6)        (105.7)
Remediation payments                                  (73.1)        (45.0)
Other liabilities                                     (55.3)        (244.0)
Cash provided by operating activities                 1,513.8       1,766.7
Cash used in investing activities:
Purchases of property and equipment                   (903.5)       (936.5)
Proceeds from sales of property and equipment         28.7          34.6
Cash used in business acquisitions and development    (95.3)        (42.6)
projects, net of cash acquired
Cash proceeds from divestitures, net of cash divested 9.6           14.2
Change in restricted cash and marketable securities   23.2          (16.8)
Other                                                 (0.3)         (3.1)
Cash used in investing activities                     (937.6)       (950.2)
Cash used in financing activities:
Proceeds from notes payable and long-term debt        2,771.4       1,416.4
Proceeds from issuance of senior notes, net of        847.6         1,844.9
discount
Payments of notes payable and long-term debt          (3,568.2)     (3,224.5)
Premiums paid on extinguishment of debt               (25.8)        (89.6)
Fees paid to issue and retire senior notes and        (17.5)        (58.8)
certain hedging relationships
Issuances of common stock                             70.4          40.7
Excess income tax benefit from stock option exercises 1.9           2.5
Purchases of common stock for treasury                (325.6)       (460.7)
Cash dividends paid                                   (329.1)       (309.4)
Cash used in financing activities                     (574.9)       (838.5)
Increase (decrease) in cash and cash equivalents      1.3           (22.0)
Cash and cash equivalents at beginning of period      66.3          88.3
Cash and cash equivalents at end of period            $   67.6      $  66.3



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 December31, 2012 (when
filed). 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 and years ended December31:

             Three Months Ended December 31,           Years Ended December 31,
             2012                 2011                 2012                 2011
Collection:
Residential  $ 541.7     26.7  %  $ 534.1     26.4  %  $ 2,155.7   26.6  %  $ 2,135.7   26.1  %
Commercial   638.8       31.5     616.0       30.4     2,523.2     31.1     2,487.5     30.4
Industrial   389.5       19.2     373.7       18.5     1,544.2     19.0     1,515.4     18.5
Other        8.5         0.4      8.5         0.4      33.4        0.4      32.9        0.4
Total        1,578.5     77.8     1,532.3     75.7     6,256.5     77.1     6,171.5     75.4
collection
Transfer     241.5                243.3                964.5                994.2
Less:        (146.2)              (139.8)              (575.3)              (572.8)
Intercompany
Transfer,    95.3        4.7      103.5       5.1      389.2       4.8      421.4       5.1
net
Landfill     454.6                467.3                1,863.3              1,867.6
Less:        (212.5)              (210.7)              (862.5)              (846.9)
Intercompany
Landfill,    242.1       11.9     256.6       12.7     1,000.8     12.3     1,020.7     12.5
net
Sale of
recyclable   82.5        4.1      97.3        4.8      349.0       4.3      438.6       5.4
materials
Other        29.9        1.5      35.5        1.7      122.8       1.5      140.7       1.6
non-core
Other        112.4       5.6      132.8       6.5      471.8       5.8      579.3       7.0
Total        $ 2,028.3   100.0 %  $ 2,025.2   100.0 %  $ 8,118.3   100.0 %  $ 8,192.9   100.0 %
revenue



The following table reflects changes in our revenue for the three months and
years ended December 31:

                         Three Months Ended December    Years Ended December
                         31,                            31,
                         2012               2011        2012          2011
Core price               1.1       %        0.6      %  0.8     %     0.8    %
Fuel recovery fees       0.2                1.0         0.1           1.0
Total price              1.3                1.6         0.9           1.8
Volume                   (0.8)              (0.2)       (1.0)         (0.4)
Recycling commodities    (0.8)              (0.1)       (1.2)         1.0
San Mateo and Toronto    —                  (1.4)       —             (1.4)
contract losses
Total internal growth    (0.3)              (0.1)       (1.3)         1.0
Acquisitions /           0.5                0.3         0.4           0.1
divestitures, net
Total                    0.2       %        0.2      %  (0.9)   %     1.1    %



COST OF OPERATIONS

The following table summarizes the major components of our cost of operations
for the three months and years ended December 31:

               Three Months Ended December 31,         Years Ended December 31,
               2012                2011                2012                2011
Labor and
related        $ 401.5     19.8 %  $ 382.0     18.9 %  $ 1,573.9   19.4 %  $ 1,530.4   18.7 %
benefits
Transfer and   156.0       7.7     152.8       7.5     616.4       7.6     636.1       7.8
disposal costs
Maintenance    170.9       8.4     160.7       7.9     682.7       8.4     632.1       7.7
and repairs
Transportation
and            107.5       5.3     113.2       5.6     431.9       5.3     443.4       5.4
subcontract
costs
Fuel           134.6       6.6     128.3       6.3     530.1       6.5     516.5       6.3
Franchise fees 99.7        4.9     99.5        4.9     401.9       5.0     395.7       4.8
and taxes
Landfill
operating      68.5        3.4     33.3        1.6     198.1       2.5     126.1       1.5
costs
Risk           45.3        2.2     37.6        1.9     177.3       2.2     167.5       2.0
management
Cost of goods  24.8        1.2     33.0        1.6     114.6       1.4     146.8       1.8
sold
Other          74.7        3.8     67.3        3.4     278.8       3.4     270.5       3.4
Total cost of  $ 1,283.5   63.3 %  $ 1,207.7   59.6 %  $ 5,005.7   61.7 %  $ 4,865.1   59.4 %
operations



The cost categories shown above 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. Landfill operating costs for the three months and
year ended December 31, 2012 include a charge of $37.0 million and $74.1
million, respectively, recorded in response to conditions at a closed disposal
facility in Missouri.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

The following table provides the components of our selling, general and
administrative costs for the three months and years ended December 31:

               Three Months Ended December 31,     Years Ended December 31,
               2012              2011              2012              2011
Salaries       $ 131.1   6.5  %  $ 140.1   6.9  %  $ 539.4   6.6  %  $ 539.6   6.6  %
Provision for
doubtful       9.0       0.4     10.1      0.5     29.7      0.4     20.9      0.3
accounts
Other          67.2      3.3     63.7      3.2     251.8     3.1     264.9     3.2
Total selling,
general
and       $ 207.3   10.2 %  $ 213.9   10.6 %  $ 820.9   10.1 %  $ 825.4   10.1 %
administrative
expenses



The cost categories shown above 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 that of other companies.

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization and
Accretion

The following table calculates earnings before interest, taxes, depreciation,
depletion, amortization and accretion (EBITDA), which is not a measure
determined in accordance with U.S. generally accepted accounting principles
(GAAP), for the three months and years ended December 31:

                         Three Months Ended December  Years Ended December 31,
                         31,
                         2012            2011         2012          2011
Net income attributable
to Republic Services,    $   127.0       $  191.0     $  571.8      $ 589.2
Inc.
Net income (loss)
attributable to          —               —            0.3           (0.3)
noncontrolling interests
Provision for income     72.1            68.0         251.8         317.4
taxes
Other income, net        (2.3)           (0.5)        (3.4)         (4.3)
Interest income          (0.2)           (0.1)        (1.0)         (0.3)
Loss on extinguishment   —               3.5          112.6         210.8
of debt
Interest expense         92.2            104.8        388.5         440.2
Depreciation,
amortization and         216.4           214.2        848.5         843.6
depletion
Accretion                19.3            19.4         78.4          78.0
EBITDA                   $   524.5       $  600.3     $  2,247.5    $ 2,474.3



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 rating 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 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 were $0.35 and $1.55 for the three months
and year ended December 31, 2012 versus $0.51 and $1.56 for the comparable
2011 periods. During the three months and years ended December 31, 2012 and
2011, we recorded a number of charges, other expenses and net (gain) loss on
disposition of assets 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, 2012    Three Months Ended December 31, 2011
                                   Net       Diluted                       Net       Diluted
                         Pre-tax   Income -  Earnings            Pre-tax   Income -  Earnings
               EBITDA    Income    Republic  per       EBITDA    Income    Republic  per
                                             Share                                   Share
As reported    $ 524.5   $ 199.1   $ 127.0   $  0.35   $ 600.3   $ 259.0   $ 191.0   $  0.51
Negotiation
and withdrawal
costs -        1.2       1.2       1.0       —         —         —         —         —
Central States
Pension Fund
Loss on
extinguishment —         —         (0.1)     —         —         3.5       2.1       0.01
of debt
Restructuring  11.1      11.1      6.6       0.02      —         —         —         —
charges
(Gain) loss on
disposition of
assets and     (1.7)     (1.7)     (1.1)     —         3.3       3.3       2.2       0.01
impairments,
net
Adjusted       $ 535.1   $ 209.7   $ 133.4   $  0.37   $ 603.6   $ 265.8   $ 195.3   $  0.53



               Year Ended December 31, 2012             Year Ended December 31, 2011
                                     Net       Diluted                           Net       Diluted
                           Pre-tax   Income -  Earnings              Pre-tax     Income -  Earnings
               EBITDA      Income    Republic  per       EBITDA      Income      Republic  per
                                               Share                                       Share
As reported    $ 2,247.5   $ 823.9   $ 571.8   $  1.55   $ 2,474.3   $ 906.3     $ 589.2   $  1.56
Negotiation
and withdrawal
costs -        35.8        35.8      21.6      0.06      —           —           —         —
Central States
Pension Fund
Loss on
extinguishment —           112.6     68.6      0.18      —           210.8       129.3     0.34
of debt
Restructuring  11.1        11.1      6.6       0.02      —           —           —         —
charges
(Gain) loss on
disposition of
assets and     (5.3)       (5.3)     (5.2)     (0.01)    28.1        28.1        19.8      0.06
impairments,
net
Adjusted       $ 2,289.1   $ 978.1   $ 663.4   $  1.80   $ 2,502.4   $ 1,145.2   $ 738.3   $  1.96



We believe that presenting 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,
provides 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 and costs 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.

Adjusted Free Cash Flow

The following table calculates our adjusted free cash flow, which is not a
measure determined in accordance with GAAP, for the years ended December 31:

                                                        2012        2011
Cash provided by operating activities                   $ 1,513.8   $ 1,766.7
Property and equipment received                         (866.7)     (885.7)
Proceeds from sales of property and equipment           28.7        34.6
Merger-related payments, net of tax                     41.0        9.2
BFI risk management and Allied exchange of partnership  54.9        —
interest tax payments
Cash tax benefit for debt extinguishment                (9.5)       (33.0)
Divestiture related tax payments                        1.5         17.0
Cash paid related to negotiation and withdrawal costs - 3.1         —
Central States Pension Fund, net of tax
Restructuring payments, net of tax                      1.4         —
Adjusted free cash flow                                 $ 768.2     $ 908.8



We believe that presenting adjusted free cash flow provides useful information
regarding our recurring cash provided by operating activities after certain
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 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 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 for the
three months and years ended December 31:

                     Three Months Ended December 31,  Years Ended December 31,
                     2012              2011           2012          2011
Purchases of
property and
equipment per the
unaudited            $   196.1         $   240.4      $  903.5      $  936.5
consolidated
statements of cash
flows
Adjustments for
property and
equipment received
duringthe prior     (3.1)             43.5           (36.8)        (50.8)
period but paid for
in the following
period, net
Property and
equipment received   $   193.0         $   283.9      $  866.7      $  885.7
during the period



The adjustments noted above do not affect our net change in cash and cash
equivalents as reflected in our consolidated statements of cash flows.

As of December 31, 2012 and 2011, accounts receivable were $836.6 million and
$825.8 million, net of allowance for doubtful accounts of $45.3 million and
$48.1 million, resulting in days sales outstanding of 38 (or 23 net of
deferred revenue) and 37 (or 24 net of deferred revenue), respectively.

CASH DIVIDENDS

In October 2012, we paid a cash dividend of $85.7 million to stockholders of
record as of October 1, 2012. As of December 31, 2012, we recorded a dividend
payable of $84.9 million to stockholders of record as of January 2, 2013,
which was paid on January 16, 2013. In February 2013, our board of directors
declared a regular quarterly dividend of $0.235 per share to be paid on April
15, 2013 to stockholders of record as of April 1, 2013.

STOCK REPURCHASE PROGRAM

We have had a share repurchase program since November 2010. From November 2010
to December31, 2012, we used $825.6million to repurchase 29.0million shares
at a weighted average cost per share of $28.49. During the three months ended
December 31, 2012, we repurchased 4.3 million shares of our stock for $117.3
million at a weighted average cost per share of $27.56.

As of December 31, 2012, we had 361.2 million shares of common stock issued
and outstanding.

RECONCILIATION OF 2013 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, 2013 compared to the actual adjusted diluted
earnings per share for the year ended December 31, 2012. Adjusted diluted
earnings per share is not a measure determined in accordance with GAAP:

                                  (Anticipated)              (Actual)

                                  Year                       Year

                                  Ending                     Ended
                                  December 31, 2013          December 31, 2012
Diluted earnings per share        $ 1.83 - 1.88  $     1.55
Loss on extinguishment of debt    —                          0.18
Negotiation and withdrawal costs  —                          0.06
- Central States Pension Fund
(Gain) loss on disposition of     —                          (0.01)
assets and impairments, net
Restructuring charges             0.03                       0.02
Adjusted diluted earnings per     $ 1.86 - 1.91  $     1.80
share



At this time, we are unable to estimate the magnitude or timing of charges
associated with our loss on extinguishment of debt, negotiation and withdrawal
costs from collective bargaining agreements under which we have obligations to
contribute to the Central States Pension Fund or (gain) loss on disposition of
assets and impairments, net.

We believe that the presentation of adjusted diluted earnings per share, as
calculated in the above table, 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 and costs 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, 2013,
and our actual adjusted free cash flow for the year ended December 31, 2012,
which are not measures determined in accordance with GAAP, are calculated as
follows:

                                         (Anticipated)       (Actual)

                                         Year Ending         Year Ended

                                         December 31, 2013  December 31, 2012
Cash provided by operating activities    $ 1,495 - 1,520    $    1,513.8
Property and equipment received          (860)               (866.7)
Proceeds from sales of property and      25                  28.7
equipment
Merger related payments, net of tax      —                   41.0
BFI risk management and Allied exchange  —                   54.9
of partnership interest tax payments
Cash tax benefit for debt extinguishment —                   (9.5)
Divestiture related tax payments         —                   1.5
Cash paid related to negotiation and
withdrawal costs - Central States        —                   3.1
Pension Fund, net of tax
Restructuring payments, net of tax       15                  1.4
Adjusted free cash flow                  $ 675 - 700  $    768.2



We anticipate our adjusted free cash flow for 2013 will decrease from 2012
primarily due to an expected increase in taxes paid related to a reduction in
bonus depreciation and favorable settlements in 2012 that are not expected to
repeat. At this time we are unable to estimate the magnitude or timing of
charges associated with our negotiation or withdrawal from collective
bargaining agreements under which we have obligations to contribute to the
Central States Pension Fund.

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 Ending December 31,  Year Ended

                                  2013                     December 31, 2012
Purchases of property and
equipment per the unaudited       $       880               $     903.5
consolidated statements of cash
flows
Adjustments for property and
equipment received during the     (20)                      (36.8)
prior period but paid for in the
following period, net
Property and equipment received   $       860               $     866.7
during the period



We believe that presenting adjusted free cash flow provides useful information
regarding our recurring cash provided by operating activities after certain
expenditures. 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 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 document 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 statements 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 risks 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:

  othe impact on us of our substantial 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;
  ogeneral economic and market conditions, including 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;
  owhether 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;
  ocompetition and demand for services in the solid waste industry;
  oprice increases to our customers may not be adequate to offset the impact
    of increased costs, including labor, third-party disposal and fuel, and
    may cause us to lose volume;
  oour ability to manage growth and execute our growth strategy;
  oour 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;
  oour ability to retain our investment grade ratings for our debt;
  oour dependence on key personnel;
  oour dependence on large, long-term collection, transfer and disposal
    contracts;
  oour business is capital intensive and may consume cash in excess of cash
    flow from operations;
  oany exposure to environmental liabilities, to the extent not adequately
    covered by insurance, could result in substantial expenses;
  orisks associated with undisclosed liabilities of acquired businesses;
  orisks associated with pending and future legal proceedings, including
    litigation, audits or investigations brought by or before any governmental
    body;
  osevere weather conditions, including those brought about by climate
    change, which could impair our financial results by causing increased
    costs, loss of revenue, reduced operational efficiency or disruptions to
    our operations;
  ocompliance 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;
  opotential increases in our costs if we are required to provide additional
    funding to any multi-employer pension plan to which we contribute or if an
    additional withdrawal event or events occur with respect to Central States
    Pension Fund or if a withdrawal event occurs with respect to any other
    multi-employer pension plan to which we contribute;
  othe negative impact on our operations of union organizing campaigns, work
    stoppages or labor shortages;
  othe 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;
  ochanges by the Financial Accounting Standards Board or other accounting
    regulatory bodies to generally accepted accounting principles or policies;
    and
  oacts 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.

The risks included here are not exhaustive. Refer to "PartI, Item1A — Risk
Factors" in our Annual Report on Form 10-K for the year ended December31,
2011 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, or 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. You should not 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.

SOURCE Republic Services, Inc.

Website: http://www.republicservices.com
Contact: Media, Darcie Brossart, +1-480-718-6565; or Investors, Ed Lang,
+1-480-627-7128, or Brian DelGhiaccio, +1-480-627-2741