News Releases

Republic Services, Inc. Reports Third Quarter Earnings of $0.41 Per Share
* On Target to Achieve 2004 Earnings and Free Cash Flow Guidance * Declares Quarterly Dividend of $0.12 per Share
PRNewswire-FirstCall
FORT LAUDERDALE, Fla.

Republic Services, Inc. today reported net income of $62.5 million, or $0.41 per diluted share, for the three months ended September 30, 2004, versus net income of $44.7 million, or $0.28 per diluted share, for the comparable period last year. Net income for the three months ended September 30, 2003 included an additional accrual for self-insurance of $14.9 million (or approximately $0.09 per share), net of tax, related to existing claims. Revenue in the third quarter of 2004 increased 8.0 percent to $699.9 million from $648.0 million for the same period in 2003. Operating income for the three months ended September 30, 2004 was $116.5 million, compared to operating income of $87.3 million (which included an additional accrual of $24.0 million for self-insurance) for the same quarter last year.

For the nine months ended September 30, 2004, net income was $180.3 million, or $1.16 per diluted share, versus net income of $159.7 million, or $0.98 per diluted share, for the comparable period last year before the cumulative effect of changes in accounting principles. Revenue for the nine months ended September 30, 2004 increased 7.5 percent to $2,020.4 million from $1,879.9 million for the same period in 2003. Operating income for the nine months ended September 30, 2004 was $342.7 million compared to operating income of $306.2 million (which included an additional accrual of $24.0 million for self-insurance) for the same period last year.

"We remain on target to achieve the 2004 guidance that was provided to investors in January 2004 which was to earn between $1.50 and $1.55 per share and generate free cash flow of $340 million," said James E. O'Connor, Chairman and Chief Executive Officer of Republic Services, Inc.

Republic also announced that its Board of Directors declared a regular quarterly dividend of $0.12 per share for shareholders of record on January 3, 2005. The dividend will be paid on January 17, 2005. Additionally, during the three months ended September 30, 2004, Republic purchased 1.7 million shares in the open market for $50.1 million. For the nine months ended September 30, 2004, Republic purchased 8.8 million shares of stock in the open market for $242.8 million.

Republic Services, Inc. is a leading provider of solid waste collection, transfer and disposal services in the United States. The Company's operating units are focused on providing solid waste services for commercial, industrial, municipal and residential customers.

Certain statements and information included herein constitute "forward- looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied in or by such forward-looking statements. Such factors include, among other things, whether the Company's estimates and assumptions concerning its selected balance sheet accounts, final capping, closure, post-closure and remediation costs, available airspace, and projected costs and expenses related to the Company's landfills and property and equipment, and labor, fuel rates and economic and inflationary trends, turn out to be correct or appropriate, and various factors that will impact the actual business and financial performance of the Company such as competition and demand for services in the solid waste industry; the Company's ability to manage growth; compliance with, and future changes in, environmental regulations; the Company's ability to obtain approval from regulatory agencies in connection with expansions at the Company's landfills; the ability to obtain financing on acceptable terms to finance the Company's operations and growth strategy and for the Company to operate within the limitations imposed by financing arrangements; the ability of the Company to repurchase common stock at prices that are accretive to earnings per share; the Company's dependence on key personnel; general economic and market conditions including, but not limited to, inflation and changes in commodity pricing, fuel, labor and other variable costs that are generally not within the control of the Company; dependence on large, long-term collection contracts; dependence on acquisitions for growth; risks associated with undisclosed liabilities of acquired businesses; risks associated with pending legal proceedings; and other factors contained in the Company's filings with the Securities and Exchange Commission.

                           REPUBLIC SERVICES, INC.
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In millions, except per share data)


                                            Three Months Ended September 30,

                                                   2004              2003


      Revenue                                     $699.9            $648.0

      Expenses:
        Cost of operations                         442.0             433.7
        Depreciation, amortization and
         depletion                                  69.2              61.7
        Accretion                                    3.5               3.2
        Selling, general and
         administrative                             68.7              62.1

      Operating income                             116.5              87.3

      Interest expense, net                        (16.6)            (16.2)
      Other income (expense), net                    0.9               0.9

      Income before income taxes                   100.8              72.0

      Provision for income taxes                    38.3              27.3

      Net income                                   $62.5             $44.7


      Basic earnings per share                     $0.41             $0.28

      Weighted average common shares
         outstanding                               151.3             160.0


      Diluted earnings per share                   $0.41             $0.28

      Weighted average common and
       common equivalent shares outstanding        153.8             162.2


      Cash dividends per common share              $0.12             $0.06



                           REPUBLIC SERVICES, INC.
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In millions, except per share data)



                                             Nine Months Ended September 30,

                                                  2004              2003


     Revenue                                    $2,020.4          $1,879.9

     Expenses:
       Cost of operations                        1,276.7           1,200.7
       Depreciation, amortization and
        depletion                                  192.7             177.9
       Accretion                                    10.2               9.4
       Selling, general and
        administrative                             198.1             185.7

     Operating income                              342.7             306.2

     Interest expense, net                         (53.1)            (51.9)
     Other income (expense), net                     1.2               3.2

     Income before income taxes                    290.8             257.5

     Provision for income taxes                    110.5              97.8

     Income before cumulative effect of
      changes in accounting principles             180.3             159.7

     Cumulative effect of changes in
       accounting principles, net of tax             --              (37.8)

     Net income                                   $180.3            $121.9

     Basic earnings per share:

       Before cumulative effect of
        changes in accounting principles           $1.17              $0.99

       Cumulative effect of changes in
         accounting principles, net of tax            --              (0.23)

       Basic earnings per share                    $1.17              $0.76

       Weighted average common shares
        outstanding                                153.5              160.9




                           REPUBLIC SERVICES, INC.
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
                     (In millions, except per share data)


                                             Nine Months Ended September 30,

                                                   2004             2003


      Diluted earnings per share:

        Before cumulative effect of
         changes in accounting principles           $1.16           $0.98

        Cumulative effect of changes in
          accounting principles, net of tax           --            (0.23)

        Diluted earnings per share                  $1.16           $0.75


        Weighted average common and
         common equivalent shares outstanding       156.0           162.7


      Cash dividends per common share               $0.24           $0.06



                         REPUBLIC SERVICES, INC.
               SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION

The following information should be read in conjunction with the Company's audited Consolidated Financial Statements and notes thereto appearing in the Company's Form 10-K as of and for the year ended December 31, 2003. It also should be read in conjunction with the Company's Unaudited Condensed Consolidated Financial Statements and notes thereto appearing in the Company's Form 10-Q as of and for the three and six months ended June 30, 2004.

CHANGES IN ACCOUNTING PRINCIPLES

During the first quarter of 2003, the Company adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (SFAS 143). SFAS 143 required the Company to change the methodology it used to record closure and post-closure costs related to its landfills. Upon adopting SFAS 143, the Company no longer records closure and post-closure expense as a component of cost of operations. Instead, amortization expense is recorded on the capitalized portion of the obligation and accretion expense is recorded using the effective interest method.

As of January 1, 2003, the Company recorded an after-tax expense of $20.8 million as a cumulative effect of a change in accounting principle resulting from the adoption of SFAS 143. In addition, the Company also recorded an after-tax expense of $17.0 million as a cumulative effect of a change in accounting principle relating to its accounting for methane gas collection systems.

  OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION, DEPLETION AND
  ACCRETION

Operating income before depreciation, amortization, depletion, and accretion, which is not a measure determined in accordance with generally accepted accounting principles (GAAP), for the three and nine months ended September 30, 2004 and 2003 is calculated as follows (in millions):

                                           Three months      Nine months
                                              ended             ended
                                           September 30,    September 30,
                                            2004    2003     2004    2003

  Net income                                $62.5   $44.7  $180.3   $121.9
  Cumulative effect of changes in
   accounting principles, net of tax          --      --      --      37.8
  Provision for income taxes                 38.3    27.3   110.5     97.8
  Other (income) expense, net                 (.9)    (.9)   (1.2)    (3.2)
  Interest expense, net                      16.6    16.2    53.1     51.9
  Depreciation, amortization and             69.2    61.7   192.7    177.9
   depletion
  Accretion                                   3.5     3.2    10.2      9.4
   Operating income before
    depreciation, amortization,
    depletion and accretion                $189.2  $152.2   $545.6   $493.5

The Company believes that the presentation of operating income before depreciation, amortization, depletion and accretion is useful to investors because it provides important information concerning the Company's operating performance exclusive of certain non-cash costs. Although depreciation, amortization, depletion and accretion are considered operating costs in accordance with GAAP, they represent the allocation of non-cash costs associated with long-lived assets acquired or constructed in prior years. Operating income before depreciation, amortization, depletion and accretion also demonstrates the Company's ability to execute its 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 the Company's customer base and services provided, pursuing strategic acquisitions that augment the Company's existing business platform, repurchasing shares of common stock at prices that provide value to the Company's shareholders, paying cash dividends, maintaining the Company's investment grade rating and minimizing debt.

CASH FLOW

During the three months ended September 30, 2004, cash provided by operating activities was $175.4 million, cash used in investing activities was $74.7 million and cash used in financing activities was $50.6 million. During the nine months ended September 30, 2004, cash provided by operating activities was $537.3 million, cash used in investing activities was $90.7 million and cash used in financing activities was $450.0 million.

The Company defines free cash flow, which is not a measure determined in accordance with GAAP, as cash provided by operating activities less purchases of property and equipment plus proceeds from the sale of property and equipment as presented in the Company's consolidated statement of cash flows. The Company's free cash flow for the three and nine months ended September 30, 2004 is calculated as follows (in millions):

                                      Three months ended  Nine months ended
                                      September 30, 2004  September 30, 2004

  Cash provided by operating
    activities                               $175.4            $537.3
  Purchases of property and
     equipment                                (78.6)           (196.6)
  Proceeds from the sale of
   property and equipment                       1.5               4.1
  Free cash flow                              $98.3            $344.8

The Company believes that the presentation of free cash flow, which is a non-GAAP financial measure, provides useful information regarding the Company's recurring cash provided by operating activities after expenditures for property and equipment, net of proceeds from the sale of property and equipment. It also demonstrates the Company's ability to execute its financial strategy as previously discussed and is a key metric used by the Company to determine compensation. Free cash flow does not represent the Company's cash flow available for discretionary expenditures because it excludes certain expenditures that are required or that the Company has committed to such as debt service requirements and dividend payments. The Company's definition of free cash flow may not be comparable to similarly titled measures presented by other companies.

Capital expenditures include $.7 million and $1.1 million of capitalized interest for the three months ended September 30, 2004 and 2003, respectively, and $1.5 million and $2.1 million for the nine months ended September 30, 2004 and 2003, respectively.

As of September 30, 2004, accounts receivable were $285.9 million, net of allowance for doubtful accounts of $15.8 million, resulting in days sales outstanding of approximately 37 (or 25 days net of deferred revenue).

STOCK REPURCHASE PROGRAM

During the three months ended September 30, 2004, the Company paid approximately $50.1 million to repurchase 1.7 million shares of its stock. During the nine months ended September 30, 2004, the Company repurchased a total of 8.8 million shares of its stock for approximately $242.8 million. At September 30, 2004, the Company was authorized to repurchase up to an additional $22.9 million under its existing repurchase program. In October 2004, the Board of Directors authorized the repurchase of an additional $275.0 million of the Company's common stock.

DIVIDEND

In July 2004, the Company paid a dividend of $9.1 million to shareholders of record as of July 1, 2004. During the third quarter of 2004, the Company increased its quarterly cash dividend from $.06 to $.12 per share. As of September 30, 2004, the Company recorded a dividend payable of approximately $18.1 million to shareholders of record at the close of business on October 1, 2004, which has been paid. In October 2004, the Company's Board of Directors declared a regular quarterly dividend of $.12 per share for shareholders of record on January 3, 2005.

REVENUE

The following table reflects total revenue of the Company by revenue source for the three and nine months ended September 30, 2004 and 2003 (in millions):

                                          Three months      Nine months
                                              ended            ended
                                           September 30,    September 30,
                                           2004    2003     2004     2003

  Collection:
      Residential                        $166.4   $151.2   $487.7   $446.0
      Commercial                          184.6    177.4    550.1    527.0
      Industrial                          146.8    137.8    416.9    391.3
      Other                                15.9     12.7     44.0     37.7
       Total collection                   513.7    479.1  1,498.7  1,402.0


  Transfer and disposal                   274.4    257.6    772.3    722.2
  Less: Intercompany                     (136.6)  (129.1)  (390.5)  (369.2)
      Transfer and disposal, net          137.8    128.5    381.8    353.0
  Other                                    48.4     40.4    139.9    124.9
      Total revenue                      $699.9   $648.0 $2,020.4 $1,879.9

The following table reflects the Company's revenue growth for the three and nine months ended September 30, 2004 and 2003:

                                      Three months      Nine months
                                          ended            ended
                                      September 30,     September 30,
                                    2004     2003       2004      2003
  Core price                        2.1%      1.7%       2.2%     1.6%
  Fuel surcharges                     .2       .2         .1        .2
  Commodities                         .5      (.4)        .5        .1
     Total price                     2.8      1.5        2.8       1.9

  Core volume                        3.7      2.2        3.6       2.2
  Non-core volume                     .4       .2         .1        .3
     Total volume                    4.1      2.4        3.7       2.5

  Total internal growth              6.9      3.9        6.5       4.4

  Acquisitions                       1.1      2.1        1.0       1.9
  Taxes (a)                           --       .3         --        .5

     Total revenue growth            8.0%     6.3%       7.5%      6.8%

(a) Represents taxes levied on landfill volumes in certain states that are passed on to customers.

SOURCE: Republic Services, Inc.

CONTACT: Media, Will Flower, +1-954-769-6392, or Investors, Tod Holmes,
+1-954-769-2387, or Ed Lang, +1-954-769-3591, all of Republic Services