On Oct. 29, Republic Services Inc. released financial results for the third quarter of 2015, reporting a net income of $215 million, or 61 cents per share, compared to $185.8 million, or 52 cents per share, for the comparable period in 2014.

Republic Services reported a net income of $577.7 million for the nine months ended Sept. 30, or $1.64 per diluted share, compared to $497.3 million, or $1.39 per diluted share for the comparable period in the prior year.

“Our results continue to demonstrate the progress we have made with our strategy of profitable growth through differentiation, while capturing the benefits of a steady improvement in solid waste trends,” said Donald Slager, president and CEO. “Our initiatives are delivering strong results through a heightened focus on the customer experience and improving service delivery, while reducing costs through operational programs and efficiencies.”

Adjusted diluted earnings per share was 53 cents per share and year-to-date adjusted free cash flow was $603 million. Revenue growth from average yield was 2.5 percent and volumes increased 0.6 percent. Core price was 3.6 percent, which consisted of 4.7 percent in the open market and 1.8 percent in the restricted portion of our business. The company reported adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin was consistent with the prior year at 28.1 percent of revenue. Republic Services’ solid waste business experience margin expansion primarily from lower fuel costs, which was offset by headwinds in its recycling business and the impact of recent acquisitions.

Year-to-date adjusted EBITDA margin was 28.4 percent of revenue, an improvement of 40 basis points from the prior year, primarily due to the positive impact from higher pricing levels and lower fuel costs.

The post-collection business made up of third-party landfill and transfer station volumes decreased 1.1 percent. Landfill decreased 1 percent, which includes positive MSW volumes of 3.3 percent and C&D at 6.2 percent, offset by a decline in special waste volumes of 6.7 percent. Chuck Serianni, the company’s chief financial officer, said that it was a tough comparison to the prior year, since Republic Services accepted a record level of special waste in the third quarter of 2014.

Fuel recovery fees decreased by 150 basis points. Serianni said on the call that the change relates to the decline in the cost of fuel, which decreased approximately $35 million in comparison to the prior year. Average price per gallon of diesel decreased $2.63 in the third quarter from $3.84 in the prior year, a decrease of 31 percent. The current average diesel price is $2.50 per gallon. “We will recover approximately 80 percent of fuel recovery costs through our fuel recovery fee program,” Serianni said.

The company reported that approximately $191 million was returned to its shareholders in the third quarter through share repurchases and dividends. On a year-to-date basis approximately $594 million has been returned.

Republic Services also announced on Oct. 29 that its board of directors approved a $900 million share repurchase authorization, which extends through Dec. 31, 2017. According to the release, at current prices, $967 million represents over 6 percent of the company’s outstanding shares of stock.

“We are pleased with our performance and remain well-positioned to achieve our full-year financial guidance, which we raised in July,” Slager said.

During the conference call, the company reported progress was being made on its fleet-based initiatives designed to improve productivity and lower costs. Currently 16 percent of Republic Services’ fleet operates on natural gas, 71 percent is automated and 74 percent is certified under its standardized maintenance program.

Slager reported in the company’s second quarter results that 15 percent of the total fleet operates on natural gas. Seventy percent of the residential fleet is currently automated, as well as 70 percent of total fleet has been certified under the One Fleet maintenance program.

The company provided a preliminary outlook for next year. The company expects to be in the range of $2.13 to $2.17 diluted earnings per share. This range assumes an effective tax rate of 39.5 percent, which results in a 3-cent tax headwind in comparison to the company’s expected 2015 results. Adjusted free cash flow is expected to be in the range of $790 million to $810 million in 2016.

“Our preliminary outlook represents mid- to high- single-digit growth excluding the anticipated increase in our effective tax rate,” Slager said.

Earlier this year, Republic Services announced a new landfill gas-to-energy (LFGTE) project located at Sunshine Canyon Landfill near Los Angeles. The 20-MW renewable energy project is capable of generating enough electricity to power nearly 25,000 area homes. Republic Services partnered with Sunshine Gas Producers, a joint venture between DTE Biomass Energy and Aria Energy, to develop the Sunshine Canyon LFGTE project.

The 2013 Annual Report for the Los Angeles County Countywide Integrated Waste Management Plan is now available. Please click the below link to download.

2013 Annual Report, May 2015 (link)

The Annual Report provides an annual update to the Countywide Integrated Waste Management Plan as required by the California Integrated Waste Management Act of 1989 (AB 939). It also provides an in-depth analyses of the County’s disposal capacity needs, updates on the remaining permitted in-County disposal capacity, and the County’s strategies for maintaining adequate disposal capacities through a 15-year planning period.

If you have any questions, please contact Mr. Martin Aiyetiwa at MAIYET@dpw.lacounty.gov or (626)458-3553.


NEW RUSSIA TWP. — State officials are considering a lawsuit against the Lorain County landfill if something isn’t done about the stench of garbage, a problem neighbors have been complaining about for years.

In a July 23 letter to Republic Services, which operates the landfill, Assistant Ohio Attorney General Nicholas Bryan urged the company to fix the ongoing problem as part of a settlement rather than face a full-blown lawsuit. Bryan’s letter also said the state was considering a lawsuit against Lorain County LFG Power Station, which converts the gas from rotting garbage at the landfill into electricity.

According to documents from the Ohio Environmental Protection Agency, complaints about the odor of garbage emanating from the landfill date back at least to 2003. The EPA received 10 odor complaints in 2007, 43 complaints in 2008, 87 complaints in 2009 and had received 46 complaints through July 7 of this year, the documents said.

“Citizens have described landfill odors as ‘unbearable’ and ‘sickening,’ ” Clarissa Gereby, an environmental specialist with the EPA’s Division of Solid and Infectious Waste Management, wrote in a Nov. 27, 2009, notice of violation to the landfill’s environmental manager, Chris Jaquet.

Gereby also wrote in November that the EPA officials had visited the area to check on the smell and found odors five out of six times.

In a July 7 letter to Jaquet, Gereby wrote that she had conducted “odor surveillance” on the evening of March 16 and the smell was a three out of four on the scale the EPA uses to rate landfill odors.

“A ‘3’ is ‘an odor strong enough to cause a person to avoid it completely,’ ” Gereby wrote.

Lorain County General Health District Environmental Health Director Jim Boddy said Tuesday that his office has also received complaints about the smell of the landfill.

Over the years, Republic — and Allied Waste and BFI, the two companies that operated the landfill before Republic — has made some efforts to fix the problem, but those apparently haven’t been enough, said Mike Settles, an EPA spokesman.
“The problem becomes when we make them aware of the situation and they don’t correct it,” he said.

Jeff Kraus, area community relations manager for Republic, said the company is aware of the issue and taking steps to stop the smell.

“Nothing is more important than operating our landfill in a safe and environmentally sound manner for our employees and our neighbors,” Kraus said in a statement. “We are committed to continue doing the right thing and will cooperate with all parties involved including the state of Ohio.”

Settles said Republic has told the state that it is interested in heading off the potential lawsuit through a settlement, which could mean lower civil penalties and court costs as well as a more company-friendly schedule to address the odor problem.

“It’s good that the company is willing to negotiate,” Settles said.

But the state hasn’t always been convinced that Republic wanted to deal with the problem.

In a March 15 letter to Heath Eddleblute, Republic’s area president, Pamela Allen, chief of the Division of Solid and Infectious Waste Management, complained that Jaquet had asked the EPA to rescind a violation notice dealing with the landfill’s gas collection and control system, which is supposed to help control the landfill’s odor.

“I am troubled that Lorain seems more concerned with debating the gas evaluation (notice of violation) than with abating the nuisance odors that persist in the community,” Allen wrote.

Kraus said the Republic has taken steps to fix the gas control issue, including improving its gas extraction system by installing 10 new landfill gas wells and redrilling 26 other gas wells. The landfill has 145 gas wells, he said.

“More improvements to the gas extraction system are planned for the fall,” Kraus said.

Jennifer Kurko, environmental supervisor in the Division of Solid and Infectious Waste Management, said it isn’t uncommon for landfills such as the one in Lorain County to have odor and other issues that require the EPA to step in.

According to the EPA documents, the Lorain County landfill has had issues over the years ranging from accepting — and then failing to promptly report — hazardous waste to not properly covering up the working areas of the landfill at night and garbage fires.

Most of those problems were addressed in one fashion or another when they’ve come up, but the smell has remained a constant issue, Kurko said.

“The driver right now is the persistent odor,” she said.