REPUBLIC SERVICES, INC.

Republic Services is one of the largest providers of environmental services in North America, as measured by revenue. The total addressable United States and Canada environmental services market in which the Company operates generates approximately $163 billion of annual revenue, which includes the $110 billion recycling and waste industry, $37 billion of the broader environmental solutions industry, and $16 billion in sustainability innovation and emerging waste and recycling technologies ¹. The Company operates across the United States and Canada through 377 collection operations, 255 transfer stations, 79 recycling centers, 207 active landfills, 2 treatment, recovery and disposal facilities, 24 treatment, storage and disposal facilities (TSDF), 5 salt water disposal wells, 15 deep injection wells, 9 industrial wastewater treatment facilities, and 2 polymer centers ². Republic is engaged in 84 landfill gas-to-energy and other renewable energy projects and had post-closure responsibility for 124 closed landfills ³.

The Company competes with a few other large, national publicly-owned companies, several regional publicly- and privately-owned companies, and thousands of small privately-owned companies, as well as municipalities that maintain material collection or disposal operations. Republic competes for collection accounts primarily based on product offering, quality of service, and price. The Company's strategy is designed to generate profitable growth by sustainably managing customers' needs, underpinned by three foundational elements: market position, operating model, and people and talent focus. Republic's differentiating capabilities include customer zeal, digital, and sustainability. The Company believes its value proposition increases customer loyalty and willingness to pay for its differentiated offerings. Republic drivers have won 66% of the Driver of the Year awards issued for the large truck category since 2009 ⁴.

Republic generates revenue by providing environmental services to customers, including the collection and processing of recyclable materials, the collection, treatment, consolidation, transfer and disposal of hazardous and non-hazardous waste and other environmental solutions. Revenue is derived from residential, small-container, and large-container collection services, transfer station tipping fees, landfill tipping fees, environmental solutions, and recycling processing and commodity sales. In 2025, approximately 68% of total revenue was derived from the collection business, of which approximately 18% related to residential services, approximately 30% related to small-container services, approximately 19% related to large-container services, and approximately 1% related to other collection services ⁵. Transfer station revenue accounted for approximately 5% of revenue, landfill tipping fees accounted for approximately 12% of revenue, recycling processing and commodity sales accounted for approximately 3% of revenue, and environmental solutions accounted for approximately 11% of revenue ⁶.

The Company's collection services include residential, small-container, and large-container collection. Residential collection is typically performed under contracts with municipalities, which generally range in duration from one to five years, although some exclusive franchises are for significantly longer periods ⁷. Small-container and large-container collection services are typically performed under one- to three-year service agreements ⁸. Transfer services generate revenue primarily by charging tipping or disposal fees. Recycling processing services generate revenue through the processing and sale of old corrugated containers (OCC), old newsprint (ONP), aluminum, glass and other materials. During 2025, Republic processed and sold 2.2 million tons, excluding glass and organics, from its recycling centers, and an additional 1.8 million tons were collected by the Company and delivered to third parties ⁹. The Company processed 1.1 million tons and sold 0.4 million tons of organic materials through its organics infrastructure in 2025 ¹⁰. Landfill services generate revenue from tipping fees charged to third parties. As of December 31, 2025, Republic had 41,158 estimated permitted acres and estimated total available disposal capacity of 5.0 billion in-place cubic yards ¹¹.

Environmental solutions offerings include collection, treatment, consolidation, disposal and recycling of hazardous and non-hazardous waste; field and industrial services; equipment rental; emergency response and standby services; and in-plant services. The Company owns or operates 6 active hazardous waste landfills, 9 active energy waste landfills, 2 treatment, recovery and disposal facilities, 24 treatment, storage and disposal facilities, 5 salt water disposal wells, 15 deep injection wells, and 9 industrial wastewater treatment facilities ¹². In sustainability innovation, Republic commenced operations at its second Polymer Center in Indianapolis, Indiana in 2025 and began construction at its third Polymer Center in Allentown, Pennsylvania ¹³. Each facility is expected to produce more than 100 million pounds per year of recycled plastic ¹⁴. In 2025, operations commenced at the first Blue Polymers facility in Indianapolis, Indiana, and a second Blue Polymers facility is currently being constructed in Buckeye, Arizona ¹⁵. As of December 31, 2025, Republic was engaged in 77 landfill gas-to-energy projects at its landfills, with more than 30 landfill gas-to-energy projects in development that are expected to begin operations in the coming years ¹⁶. The Company also produces renewable energy through solar projects hosted at seven sites ¹⁷.

In 2025, Republic acquired all of the issued and outstanding shares of COP Shamrock Parent, Inc. (Shamrock), a leading provider of environmental solutions offering industrial waste and wastewater treatment services, for a total purchase price of $1,084 million ¹⁸. In March 2025, the Company issued $500 million of 4.750% senior notes due 2030 and $700 million of 5.150% senior notes due 2035 ¹⁹. In July 2025, the Board of Directors approved an increase in the quarterly dividend to $0.625 per share, representing an increase of approximately 8% over the prior year and the 22nd consecutive year of a dividend increase ²⁰. During 2025, Republic repurchased 3.8 million shares of its common stock for $864 million ²¹. In February 2026, the Company acquired certain assets and assumed certain liabilities from Hamm, LLC and related entities constituting a vertically-integrated recycling and waste business located in Kansas, paying approximately $400 million for acquisitions closed through that date ²².

Revenue for the year ended December 31, 2025 increased by 3.5% to $16.591 billion compared to $16.032 billion in 2024 ²³. Net income attributable to Republic Services, Inc. was $2.139 billion, or $6.85 per diluted share, for 2025, compared to $2.043 billion, or $6.49 per diluted share, for 2024 ²⁴. Operating income was $3.302 billion, or 19.9% of revenue, for 2025, compared to $3.196 billion, or 19.9% of revenue, for 2024 ²⁵. Net cash provided by operating activities was $4.296 billion for 2025, compared to $3.936 billion for 2024 ²⁶.

Management provided specific financial guidance for the year ending December 31, 2026. Revenue is expected to be in the range of $17.050 billion to $17.150 billion ²⁷. Growth from average yield on total revenue is expected to be in a range of 3.2% to 3.7%, and related revenue is expected to be in a range of 4.0% to 4.5% ²⁸. The impact from volume on total revenue is expected to be approximately (1.0)% ²⁹. Adjusted diluted earnings per share is anticipated to be in the range of $7.20 to $7.28, compared to actual adjusted diluted earnings per share of $7.02 for the year ended December 31, 2025 ³⁰. Diluted earnings per share guidance is $7.14 to $7.22, with restructuring charges of $0.06 per share and no labor disruption charges anticipated ³¹.

A key growth vector is the expansion of recycling capabilities through Polymer Centers and the Blue Polymers joint venture. Republic is the first company to manage the plastics stream through an integrated process from curbside collection to delivery of high-quality recycled content for consumer packaging. The Company plans to commence operations at its Allentown, Pennsylvania Polymer Center in 2027 ³². Additional Blue Polymers facilities are planned to open over the coming years, with products expected to include custom-blended and compounded materials for individual customers to help them achieve their sustainability goals and comply with federal, state or local requirements for recycled content ³³. Another growth vector is the expansion of landfill gas-to-energy and other renewable energy projects. Republic presently has more than 30 landfill gas-to-energy projects in development that are expected to begin operations in the coming years, many of which are expected to produce renewable natural gas ³⁴.

The Company's growth strategy also focuses on acquisitions of privately held environmental services businesses that complement its existing business platform. Republic expects to invest approximately $1 billion in acquisitions in 2026 ³⁵. The Company also focuses on growth through public-private partnerships, which include the recycling and waste operations and facilities of municipal and other local governments. Republic believes over time it has an opportunity to acquire operations and facilities from municipalities and other local governments as they seek to raise capital and/or reduce risk ³⁶.

Management expects to focus on pricing in excess of cost inflation, driving profitable volume growth, investing in sustainability to improve the environment and drive growth, investing in value-creating acquisitions, and advancing technology to improve productivity and increase customer retention ³⁷. In 2026, Republic expects to incur restructuring charges of approximately $25 million, primarily related to the continuation of the design and implementation of its new accounts receivable system as well as the conversion of the general ledger, budgeting and procurement enterprise resource planning (ERP) systems for its environmental solutions segment ³⁸.

Republic expects to receive between $1.96 billion to $2.00 billion of property and equipment, net of proceeds from the sale of property and equipment, in 2026 ³⁹. The Company expects to continue paying quarterly cash dividends and may consider additional dividend increases if they believe it will enhance shareholder value ⁴⁰. As of December 31, 2025, the remaining authorized purchase capacity under the October 2023 share repurchase program was $1.7 billion ⁴¹. The Company does not expect a material increase in financial assurance requirements during 2026 ⁴².

Management identified several headwinds and constraints. The environmental services industry is highly competitive, and competitors may have greater financial and operational resources, flexibility to reduce prices, or other competitive advantages ⁴³. Increases in the cost of fuel or petrochemicals increase operating expenses, and the Company may not be able to recover such cost increases from customers. At current consumption levels, a twenty-cent per gallon change in the price of diesel fuel changes fuel costs by approximately $26 million on an annual basis ⁴⁴. Fluctuations in prices and demand for recycled commodities may adversely affect results. At current volumes and mix of materials, a $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $13 million ⁴⁵. The Company is subject to costly environmental and flow-control regulations and requirements that may affect operating margins, restrict operations, and subject it to additional liability ⁴⁶.

Management also flagged that the Company has substantial indebtedness, with approximately $14 billion in principal value of debt and finance leases outstanding as of December 31, 2025, which may limit financial flexibility ⁴⁷. The Company may be unable to maintain its investment grade credit ratings, which were rated A- by Standard & Poor's Ratings Services, A- by Fitch Ratings, Inc., and A3 by Moody's Investors Service, Inc. as of December 31, 2025 ⁴⁸. If interest rates increased or decreased by 100 basis points on the Company's $2.6 billion of floating rate debt, annualized interest expense and net cash payments for interest would increase or decrease by approximately $26 million ⁴⁹. The Company's ability to execute its acquisition growth strategy depends on identifying and acquiring desirable candidates and successfully integrating acquired operations ⁵⁰.

The environmental services industry is highly competitive, and competitors may have greater financial and operational resources, flexibility to reduce prices, or other competitive advantages that could make it difficult for Republic to compete effectively ⁵¹. Fluctuations in prices and demand for recycled commodities pose a material risk; at current volumes and mix of materials, a $10 per ton change in the price of recycled commodities would change both annual revenue and operating income by approximately $13 million ⁵². The Company is subject to costly environmental and flow-control regulations, including those relating to PFAS and other chemicals of emerging concern, which could accelerate or increase expenditures for capping, closure, post-closure, and environmental remediation activities ⁵³. Republic has substantial indebtedness of approximately $14 billion in principal value of debt and finance leases outstanding as of December 31, 2025, which may limit financial flexibility and ability to access additional capital ⁵⁴. The Company's obligation to fund multiemployer pension plans, or its withdrawal from such plans, may have an adverse effect; as of December 31, 2025, approximately 22% of the workforce was covered by collective bargaining agreements ⁵⁵.

Management's message emphasizes a focus on pricing in excess of cost inflation, driving profitable volume growth, investing in sustainability to improve the environment and drive growth, investing in value-creating acquisitions, and advancing technology to improve productivity and increase customer retention ⁵⁶. Specific forward-looking guidance includes revenue in the range of $17.050 billion to $17.150 billion for 2026 ⁵⁷, and adjusted diluted earnings per share in the range of $7.20 to $7.28 ⁵⁸. The strategic priorities emphasized for the period ahead are: (1) pricing in excess of cost inflation, (2) driving profitable volume growth, (3) investing in sustainability to improve the environment and drive growth, (4) investing in value-creating acquisitions, and (5) advancing technology to improve productivity and increase customer retention ⁵⁹.