Republic Services, Inc. · NYSE:RSG
Republic Services — Merger or Acquisition (July 2008)
22 slides from Republic Services's merger presentation, Jul 16, 2008
Slide 1: Creating an Environmental Services Leader
Creating an Environmental Services Leader July 2008
Slide 2: Discussion of Forward-Looking Statements
Discussion of Forward-Looking Statements Information Regarding Forward-Looking Statements Certain statements and information included herein constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995 these forward-looking statements are
Slide 3: Transaction Overview
Transaction Overview Transaction: Friendly, negotiated merger of Republic Services and Allied Waste Consideration: 100% stock Exchange Ratio: 0.45 shares of Republic Services stock per share of Allied Waste stock Synergies: $150mm run rate operating synergies achieved by year 3 Anticipated Closing:
Slide 4: Why is This Merger Different?
Why is This Merger Different? Two mature companies Not a "roll up" Focus on shareholder value Companies have similar business practices and performance metrics Opportunity to adopt best practices Timely integration process
Slide 5: Compelling Strategic and Financial Merger Rationale
Compelling Strategic and Financial Merger Rationale National scope and scale, with stronger platform for profitable growth Improved vertical integration through large network of landfills Complementary geographies, assets and cultures, with shared commitment to customer service Significant corporate
Slide 6: Strong Asset Position Drives Vertical Integration Model
Strong Asset Position Drives Vertical Integration Model Combined (pro forma) Assets Landfill 58 161 219 Transfer 94 161 255 Collection 136 291 427 Recycling 33 53 86 Employees 13,000 23,000 36,000 Revenue $3.2 billion $6.1 billion $9.3 billion 1. As of December 2007 1 1
Slide 7: National Footprint
National Footprint Approximately 54% of Revenue from Sun Belt States Headquarters - Phoenix, AZ
Slide 8: Well-Diversified in Customers, Revenue Mix and Geography
Other Transfer & Disposal Commercial Residential C & D Permanent Roll-Off Recycling 0.04 0.2 0.27 0.21 0.07 0.14 0.07 Commercial Roll-off Residential Transfer & Disposal Other Recycling Residential 0.26 0.21 0.2 0.21 0.05 0.07 Other Transfer & Disposal Commercial Residential C & D Permanent Roll-Off
Slide 9: Merger Alters Industry Landscape
value Republic Services 3.2 Allied Waste 6.1 Waste Management 11.8 Merger Alters Industry Landscape value value PF Republic 9.3 Waste Management 11.8 2007 Revenue ($ Billions) Core U.S. Solid Waste 2007 Revenue ($ Billions) Core U.S. Solid Waste
Slide 10: Significant Synergy Opportunities
Significant Synergy Opportunities Merger expected to drive at least $150 million in synergies Initial savings from easily identified actions and basic integration Synergies are 1.5% to 2.0% of combined revenue Incentive compensation based on return on capital and improving free cash flow 2007 Republ
Slide 11: Synergy Opportunities: SG&A
Synergy Opportunities: SG&A Approximately 50% of savings or $75 million will be realized through SG&A reductions Corporate Close Fort Lauderdale headquarters and integrate operations in Phoenix Focused on supporting field operations Field Operations Opportunity to rationalize regional and area/divis
Slide 12: Synergy Opportunities: Operations
Synergy Opportunities: Operations Approximately 50% of savings or $75 million realized through field operations Phase one focus on basic integration Internalize volumes currently delivered to third-party landfills Re-route trucks to access most efficient landfill Capture national account revenues cu
Slide 13: Synergy Opportunities: Financing
Synergy Opportunities: Financing Investment grade rating of BBB/Baa3 No collateral in debt structure Municipal marketing opportunities 2009 through 2011 focus is debt reduction Over $2 billion in debt reduction in 36 months Initial synergies of up to $8 million related to reducing financial assuranc
Slide 14: Conservative Assumptions
Conservative Assumptions Initial synergies based on easily identifiable opportunities Savings assume divestitures required by the DOJ review Expect to realize approximately 60% of synergies in first year following completion of merger Transaction and integration costs will offset benefit Run rate of
Slide 15: Commitment to Seamless Integration
Commitment to Seamless Integration Integration planning already well underway Outside consultant retained to facilitate and measure results Integration team comprised of function experts from both companies Focus on maintaining high level of customer service Process will be completed in a timely man
Slide 16: Integration Plan
Integration Plan Well planned process Deloitte Consulting engaged to assist 2 day planning session completed week of July 7 Executive management actively involved Management from both companies involved
Slide 17: Additional Opportunities to Drive Value: National Accounts
Additional Opportunities to Drive Value National accounts Merger strengthens operating platform and value equation National account market estimated at $3 billion Purchasing and maintenance Combined company will have annual capital expenditures of over $1 billion that can be impacted through central
Slide 18: Additional Opportunities to Drive Value: Renewable Energy
Additional Opportunities to Drive Value Renewable energy Combined company will control valuable landfill gas reserves Landfill gas plants operating at only 30% of the combined company's landfills Appropriate investment in recycling capacity Capitalize on network of 86 recycling centers to provide gr
Slide 19: Strong Cash Flow Provides Financial Flexibility
Strong Cash Flow Provides Financial Flexibility Dividend policy Maintain current dividend policy Future moderate increases will be considered Invest for internal growth Most efficient means to growth Debt reduction Maintain strong capital structure Republic will maintain its consistent balanced, con
Slide 20: Merger Creates Unique Benefits for All Stakeholders
Merger Creates Unique Benefits for All Stakeholders Shareholder Benefits Significant achievable cost synergies Strengthens vertical integration Improved capital structure with investment grade credit rating Dividend policy and cash return strategy Customer Benefits Unmatched customer service Greater
Slide 21: Relative Valuation
Relative Valuation EV/EBITDA Dividend Yield Price/Earnings ____________________ Source: Public filings and Wall Street research. Note: Pricing data as of July 11, 2008. WCN WMI RSG AW 9.5 7.4 7.3 6.9 WCN WMI RSG AW 20.9 16.4 15.4 12.7 WMI RSG WCN AW 0.03 0.024 0 0
Slide 22: Creating an Environmental Services Leader
Creating an Environmental Services Leader
Republic Services — Merger or Acquisition (July 2008) on 6ix