Momentum on Cost Optimization Powers Strong
Expansion of Operating EBITDA Margin
WM Increases Full-Year Financial Outlook for
Earnings and Cash Flow
WM (NYSE: WM) today announced financial results for the quarter
ended March 31, 2024.
Three Months Ended
Three Months Ended
March
31, 2024 (in millions, except per share amounts)
March
31, 2023
(in
millions, except per share amounts)
As Reported
As Adjusted(a)
As Reported
As Adjusted(a)
Revenue
$5,159
$5,159
$4,892
$4,892
Income from Operations
$1,016
$1,014
$825
$828
Operating EBITDA(b)
$1,530
$1,528
$1,330
$1,333
Operating EBITDA Margin
29.7%
29.6%
27.2%
27.2%
Net Income(c) (d)
$708
$706
$533
$535
Diluted EPS(d)
$1.75
$1.75
$1.30
$1.31
“We’re pleased with the strong operational and financial
performance the WM team delivered in the first quarter,” said Jim
Fish, WM’s President and Chief Executive Officer. “Adjusted
operating EBITDA growth was 14.6% and margin expanded 240 basis
points, which was powered by optimization of costs in the
Collection and Disposal business and disciplined execution on price
programs. Our results are a testament to the investments we have
made in talent, technology, and assets over the past several
years.”(a)
Fish continued, “We outperformed our own high expectations in
the first quarter, and what really stands out in our results is our
ability to convert more of each revenue dollar to earnings.
Achieving 29.6% adjusted operating EBITDA margin in the first
quarter of the year, which historically has been our lowest margin
quarter of a year, gives us confidence that we are positioned to
deliver full-year margin in the range of 29.7% to 30.2%, expanding
more than 100 basis points from the prior year at the midpoint.
Momentum in capturing cost efficiencies and execution on our
pricing programs allows us to raise our prior outlook for both
adjusted operating EBITDA and free cash flow by $100
million.”(a)
KEY HIGHLIGHTS FOR THE FIRST QUARTER OF 2024
- Total Company revenue grew 5.5%, driven primarily by core price
of 7.2%.(e)
- Collection and Disposal yield was 5.1%, and Collection and
Disposal volume was -0.1%, or 0.3% on a workday adjusted
basis.(f)
- Operating expenses as a percentage of revenue improved 210
basis points to 60.9%, compared to prior year adjusted results,
driven by efficiencies in the Collection and Disposal business.(a)
The Company’s technology and automation investments continue to
provide benefits, driver turnover remained at record lows and
collection efficiency meaningfully improved for the second
consecutive quarter.
- SG&A expenses were 9.5% of revenue, an improvement of 20
basis points from the prior year.
- Total Company adjusted operating EBITDA grew 14.6% to $1.53
billion, and margin expanded 240 basis points to 29.6% on an
adjusted basis.(a)
- The Company’s Collection and Disposal business grew adjusted
operating EBITDA by $212 million to $1.73 billion and margin
expanded 310 basis points to 36.6%.(a)
- Operating EBITDA in the Recycling Processing & Sales and WM
Renewable Energy businesses grew 13.2%, primarily driven by higher
market prices for recycled commodities partially offset by
temporary shutdown costs associated with recycling facility
upgrades.(f)(g)
- The Company continues to progress growth projects in its
recycling and renewable energy businesses, with two significant
projects completed during the first quarter. WM began operations at
its largest upgraded recycling facility, located in Germantown,
Wis., and also commissioned a new renewable natural gas facility
near Dallas, Texas.
- The Company returned $557 million to shareholders, including
$250 million of share repurchases and $307 million of cash
dividends.
UPDATED 2024 OUTLOOK
Current Expectations
Original Expectations
Revenue
5% - 5.75% Growth from Prior
Year
6% - 7% Growth from Prior
Year
Adjusted Operating EBITDA(a) (b)
$6.375 - $6.525 Billion
$6.275 - $6.425 Billion
Adjusted Operating EBITDA Margin(a)
29.7% - 30.2%
29.0% - 29.4%
Free Cash Flow(a)
$2.0 - $2.15 Billion
$1.9 - $2.05 Billion
Fish concluded, “We kicked off the year with great momentum,
thanks to our team's dedication to executing on our strategic
priorities. Our outstanding performance in the first quarter sets
us up for another year of robust financial growth.”
(a)
The information labeled as
adjusted in this press release, as well as free cash flow, are
non-GAAP measures. Please see “Non-GAAP Financial Measures” below
and the reconciliations in the accompanying schedules for more
information.
(b)
Management defines operating
EBITDA as GAAP income from operations before depreciation and
amortization; this measure may not be comparable to similarly
titled measures reported by other companies.
(c)
For purposes of this press
release, all references to “Net income” refer to the financial
statement line item “Net income attributable to Waste Management,
Inc.”
(d)
In the first quarter, the Company
recognized $37 million of investment tax credits (“ITC”) associated
with the development of renewable natural gas projects as a
reduction to its income tax expense, resulting in a $0.09 per
diluted share benefit. The first quarter benefit is based on the
Company’s projected full year ITC benefit of about $145 million,
which is derived from its projected completion of five new
renewable natural gas facilities by the end of 2024. The amount of
the projected ITC benefit for 2024 is based on a number of
estimates and assumptions, including the timing of project
completion and interpretation of the Inflation Reduction Act.
(e)
Core price is a performance
metric used by management to evaluate the effectiveness of our
pricing strategies; it is not derived from our financial statements
and may not be comparable to measures presented by other companies.
Core price is based on certain historical assumptions, which may
differ from actual results, to allow for comparability between
reporting periods and to reveal trends in results over time.
(f)
In the fourth quarter of 2023,
the Company updated its reportable segments to enhance transparency
regarding its financial performance and underscore its commitment
to sustainability through substantial planned and ongoing
investments in its Recycling Processing and Sales and WM Renewable
Energy businesses. The Company reports through four segments,
referred to as (i) Collection and Disposal – East Tier; (ii)
Collection and Disposal – West Tier; (iii) Recycling Processing and
Sales and (iv) WM Renewable Energy. The Company’s East and West
Tiers along with certain ancillary services not managed through our
Tier segments form its “Collection and Disposal” businesses.
(g)
The Company’s blended average
single stream recycled commodity price was about $84 per ton
compared to about $54 per ton in the prior year period, and the
full-year expectation for pricing has increased to approximately
$80 per ton from approximately $70 per ton. The average value of
Renewable Fuel Standard credits was $3.01 compared to $2.28 in the
prior year period, and the average natural gas price was $2.27 per
MMBtu compared to $2.37 per MMBtu in the prior year period. The
average electricity price was about $62 per megawatt hour compared
to about $66 per megawatt hour in the prior year period.
The Company will host a conference call at 10 a.m. ET on April
25, 2024 to discuss the first quarter 2024 results. Information
contained within this press release will be referenced and should
be considered in conjunction with the call.
Listeners can access a live audio webcast of the conference call
by visiting investors.wm.com and selecting “Events &
Presentations” from the website menu. A replay of the audio webcast
will be available at the same location following the conclusion of
the call.
Conference call participants should register to obtain their
dial in and passcode details. This streamlined process improves
security and eliminates wait times when joining the call.
ABOUT WM
WM (WM.com) is North America's leading provider of comprehensive
environmental solutions. Previously known as Waste Management and
based in Houston, Texas, WM is driven by commitments to put people
first and achieve success with integrity. The company, through its
subsidiaries, provides collection, recycling and disposal services
to millions of residential, commercial, industrial and municipal
customers throughout the U.S. and Canada. With innovative
infrastructure and capabilities in recycling, organics and
renewable energy, WM provides environmental solutions to and
collaborates with its customers in helping them achieve their
sustainability goals. WM has the largest disposal network and
collection fleet in North America, is the largest recycler of
post-consumer materials and is the leader in beneficial use of
landfill gas, with a growing network of renewable natural gas
plants and the most landfill gas-to-electricity plants in North
America. WM's fleet includes more than 12,000 natural gas trucks –
the largest heavy-duty natural gas truck fleet of its kind in North
America. To learn more about WM and the company's sustainability
progress and solutions, visit Sustainability.WM.com.
FORWARD-LOOKING STATEMENTS
The Company, from time to time, provides estimates or
projections of financial and other data, comments on expectations
relating to future periods and makes statements of opinion, view or
belief about current and future events, circumstances or
performance. This press release contains a number of such
forward-looking statements, including all statements under the
heading “Updated 2024 Outlook” and all statements regarding future
performance or financial results of our business; achievement of
financial outlook and growth; drivers of financial performance;
investment tax credit benefits; and future investments and results.
You should view these statements with caution. They are based on
the facts and circumstances known to the Company as of the date the
statements are made. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to be
materially different from those set forth in such forward-looking
statements, including but not limited to failure to implement our
optimization, automation, growth, and cost savings initiatives and
overall business strategy; failure to obtain the results
anticipated from strategic initiatives, investments, acquisitions
or new lines of business; failure to identify acquisition targets,
consummate and integrate acquisitions; environmental and other
regulations, including developments related to emerging
contaminants, gas emissions, renewable energy, extended producer
responsibility and our natural gas fleet; significant
environmental, safety or other incidents resulting in liabilities
or brand damage; failure to obtain and maintain necessary permits
due to land scarcity, public opposition or otherwise; diminishing
landfill capacity, resulting in increased costs and the need for
disposal alternatives; failure to attract, hire and retain key team
members and a high quality workforce; increases in labor costs due
to union organizing activities or changes in wage and labor related
regulations; disruption and costs resulting from severe weather and
destructive climate events; failure to achieve our sustainability
goals or execute on our sustainability-related strategy and
initiatives, including within planned timelines or anticipated
budgets due to disruptions, delays, cost increases or changes in
environmental or tax regulations; focus on, and regulation of,
environmental and sustainability-related disclosures, which could
lead to increased costs, risk of non-compliance, brand damage and
litigation risk related to our sustainability efforts;
macroeconomic conditions, geopolitical conflict and large-scale
market disruption resulting in labor, supply chain and
transportation constraints, inflationary cost pressures and
fluctuations in commodity prices, fuel and other energy costs;
increased competition; pricing actions; impacts from international
trade restrictions; competitive disposal alternatives, diversion of
waste from landfills and declining waste volumes; weakness in
general economic conditions and capital markets, including
potential for an economic recession; instability of financial
institutions; adoption of new tax legislation; fuel shortages;
failure to develop and protect new technology; failure of
technology to perform as expected; failure to prevent, detect and
address cybersecurity incidents or comply with privacy regulations;
inability to adapt and manage the benefits and risks of artificial
intelligence; negative outcomes of litigation or governmental
proceedings; and decisions or developments that result in
impairment charges. Please also see the Company’s filings with the
SEC, including Part I, Item 1A of the Company’s most recently filed
Annual Report on Form 10-K, as updated by subsequent Quarterly
Reports on Form 10-Q, for additional information regarding these
and other risks and uncertainties applicable to its business. The
Company assumes no obligation to update any forward-looking
statement, including financial estimates and forecasts, whether as
a result of future events, circumstances or developments or
otherwise.
NON-GAAP FINANCIAL MEASURES
To supplement its financial information, the Company has
presented, and/or may discuss on the conference call, adjusted
earnings per diluted share, adjusted net income, adjusted income
from operations, adjusted operating EBITDA and margin, and free
cash flow. All of these items are non-GAAP financial measures, as
defined in Regulation G of the Securities Exchange Act of 1934, as
amended. The Company reports its financial results in compliance
with GAAP but believes that also discussing non-GAAP measures
provides investors with (i) financial measures the Company uses in
the management of its business and (ii) additional, meaningful
comparisons of current results to prior periods’ results by
excluding items that the Company does not believe reflect its
fundamental business performance and are not representative or
indicative of its results of operations.
In addition, the Company’s projected future operating EBITDA and
margin is anticipated to exclude the effects of other events or
circumstances that are not representative or indicative of the
Company’s results of operations. Such excluded items are not
currently determinable, but may be significant, such as asset
impairments and one-time items, charges, gains or losses from
divestitures or litigation, and other items. Due to the uncertainty
of the likelihood, amount and timing of any such items, the Company
does not have information available to provide a quantitative
reconciliation of such projection to the comparable GAAP
measure.
The Company discusses free cash flow and provides a projection
of free cash flow because the Company believes that it is
indicative of its ability to pay its quarterly dividends,
repurchase common stock, fund acquisitions and other investments
and, in the absence of refinancings, to repay its debt obligations.
Free cash flow is not intended to replace “Net cash provided by
operating activities,” which is the most comparable GAAP measure.
The Company believes free cash flow gives investors useful insight
into how the Company views its liquidity, but the use of free cash
flow as a liquidity measure has material limitations because it
excludes certain expenditures that are required or that the Company
has committed to, such as declared dividend payments and debt
service requirements. The Company defines free cash flow as net
cash provided by operating activities, less capital expenditures,
plus proceeds from divestitures of businesses and other assets (net
of cash divested); this definition may not be comparable to
similarly-titled measures reported by other companies.
The quantitative reconciliations of non-GAAP measures to the
most comparable GAAP measures are included in the accompanying
schedules, with the exception of projected adjusted operating
EBITDA and margin. Non-GAAP measures should not be considered a
substitute for financial measures presented in accordance with
GAAP.
WASTE MANAGEMENT, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In Millions, Except per Share
Amounts)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Operating revenues
$
5,159
$
4,892
Costs and expenses:
Operating
3,140
3,086
Selling, general and administrative
491
476
Depreciation, depletion and
amortization
514
505
Restructuring
—
3
(Gain) loss from divestitures, asset
impairments and unusual items, net
(2
)
(3
)
4,143
4,067
Income from operations
1,016
825
Other income (expense):
Interest expense, net
(130
)
(120
)
Equity in net losses of unconsolidated
entities
(19
)
(11
)
Other, net
2
2
(147
)
(129
)
Income before income taxes
869
696
Income tax expense
162
164
Consolidated net income
707
532
Less: Net income (loss) attributable to
noncontrolling interests
(1
)
(1
)
Net income attributable to Waste
Management, Inc.
$
708
$
533
Basic earnings per common share
$
1.76
$
1.31
Diluted earnings per common share
$
1.75
$
1.30
Weighted average basic common shares
outstanding
401.7
407.4
Weighted average diluted common shares
outstanding
403.5
409.0
WASTE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Millions)
(Unaudited)
March 31,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
322
$
458
Receivables, net
2,685
2,870
Other
522
476
Total current assets
3,529
3,804
Property and equipment, net
17,044
16,968
Goodwill
9,246
9,254
Other intangible assets, net
728
759
Other
2,119
2,038
Total assets
$
32,666
$
32,823
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued liabilities and
deferred revenues
$
3,613
$
3,892
Current portion of long-term debt
336
334
Total current liabilities
3,949
4,226
Long-term debt, less current portion
15,762
15,895
Other
5,877
5,806
Total liabilities
25,588
25,927
Equity:
Waste Management, Inc. stockholders’
equity
7,082
6,903
Noncontrolling interests
(4
)
(7
)
Total equity
7,078
6,896
Total liabilities and equity
$
32,666
$
32,823
WASTE MANAGEMENT, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Consolidated net income
$
707
$
532
Adjustments to reconcile consolidated net
income to net cash provided by operating activities:
Depreciation, depletion and
amortization
514
505
Other
137
107
Change in operating assets and
liabilities, net of effects of acquisitions and divestitures
9
(100
)
Net cash provided by operating
activities
1,367
1,044
Cash flows from investing activities:
Acquisitions of businesses, net of cash
acquired
(11
)
(34
)
Capital expenditures
(668
)
(660
)
Proceeds from divestitures of businesses
and other assets, net of cash divested
15
11
Other, net
(91
)
(95
)
Net cash used in investing activities
(755
)
(778
)
Cash flows from financing activities:
New borrowings
4,412
6,885
Debt repayments
(4,570
)
(6,548
)
Common stock repurchase program
(250
)
(350
)
Cash dividends
(307
)
(289
)
Exercise of common stock options
32
12
Tax payments associated with equity-based
compensation transactions
(48
)
(28
)
Other, net
(6
)
(1
)
Net cash used in financing activities
(737
)
(319
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash and cash equivalents
(2
)
—
(Decrease) increase in cash, cash
equivalents and restricted cash and cash equivalents
(127
)
(53
)
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
552
445
Cash, cash equivalents and restricted cash
and cash equivalents at end of period
$
425
$
392
WASTE MANAGEMENT, INC.
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Operating Revenues by Line of
Business
Three Months Ended
March 31,
2024
2023
Gross
Intercompany
Net
Gross
Intercompany
Net
Operating
Operating
Operating
Operating
Operating
Operating
Revenues
Revenues
Revenues
Revenues
Revenues
Revenues
Commercial
$
1,501
$
(185
)
$
1,316
$
1,412
$
(161
)
$
1,251
Industrial
934
(187
)
747
933
(177
)
756
Residential
876
(22
)
854
854
(25
)
829
Other collection
751
(53
)
698
689
(50
)
639
Total collection
4,062
(447
)
3,615
3,888
(413
)
3,475
Landfill
1,177
(385
)
792
1,150
(391
)
759
Transfer
560
(251
)
309
540
(251
)
289
Total Collection and Disposal
$
5,799
$
(1,083
)
$
4,716
$
5,578
$
(1,055
)
$
4,523
Recycling Processing and Sales
436
(68
)
368
374
(80
)
294
WM Renewable Energy
70
(1
)
69
70
(1
)
69
Corporate and Other
12
(6
)
6
12
(6
)
6
Total
$
6,317
$
(1,158
)
$
5,159
$
6,034
$
(1,142
)
$
4,892
WASTE MANAGEMENT, INC.
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Internal Revenue Growth
Period-to-Period Change for
the Three Months Ended March 31, 2024 vs. 2023
As a % of
As a % of
Related
Total
Amount
Business(a)
Amount
Company(b)
Collection and Disposal
$
218
5.1
%
Recycling Processing and Sales and WM
Renewable Energy(c)
60
15.7
Energy surcharges and mandated fees(d)
(28
)
(11.3
)
Total average yield(e)
$
250
5.1
%
Volume(f)
(1
)
—
Internal revenue growth
249
5.1
Acquisitions
19
0.4
Divestitures
(1
)
—
Foreign currency translation
—
—
Total
$
267
5.5
%
Period-to-Period Change for
the
Three Months Ended
March 31, 2024 vs.
2023
As a % of Related
Business(a)
Yield
Volume(g)
Commercial
6.8
%
0.7
%
Industrial
5.8
(3.9
)
Residential
6.4
(2.9
)
Total collection
6.1
(1.6
)
MSW
4.6
3.4
Transfer
5.5
2.8
Total collection and disposal
5.1
%
0.3
%
________________________________________
(a)
Calculated by dividing the
increase or decrease for the current year by the prior year’s
related business revenue adjusted to exclude the impacts of
divestitures for the current year.
(b)
Calculated by dividing the
increase or decrease for the current year by the prior year’s total
Company revenue adjusted to exclude the impacts of divestitures for
the current year.
(c)
Includes combined impact of
commodity price variability in both our Recycling Processing and
Sales and WM Renewable Energy segments, as well as changes in
certain recycling fees charged by our collection and disposal
operations.
(d)
Our energy surcharge was revised
in the second quarter of 2023 to incorporate market prices for both
diesel and compressed natural gas (“CNG”).
(e)
The amounts reported herein
represent the changes in our revenue attributable to average yield
for the total Company.
(f)
Includes activities from our
Corporate and Other businesses.
(g)
Workday adjusted volume impact.
WASTE MANAGEMENT, INC.
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Free Cash Flow(a)
Three Months Ended
March 31,
2024
2023
Net cash provided by operating
activities
$
1,367
$
1,044
Capital expenditures to support the
business
(502
)
(504
)
Proceeds from divestitures of businesses
and other assets, net of cash divested
15
11
Free cash flow before sustainability
growth investments
880
551
Capital expenditures - sustainability
growth investments
(166
)
(156
)
Free cash flow
$
714
$
395
Three Months Ended
March 31,
2024
2023
Supplemental Data
Internalization of waste, based on
disposal costs
68.3
%
68.5
%
Landfill depletable tons (in millions)
29.0
29.3
Acquisition Summary(b)
Gross annualized revenue acquired
$
1
$
18
Total consideration, net of cash
acquired
3
34
Cash paid for acquisitions consummated
during the period, net of cash acquired
2
31
Cash paid for acquisitions including
contingent consideration and other items from prior periods, net of
cash acquired
18
34
Landfill Amortization and Accretion
Expenses:
Three Months Ended
March 31,
2024
2023
Landfill depletion expense:
Cost basis of landfill assets
$
146
$
142
Asset retirement costs
30
36
Total landfill depletion expense(c)
176
178
Accretion expense
33
32
Landfill depletion and accretion
expense
$
209
$
210
________________________________________
(a)
The summary of free cash flow has
been prepared to highlight and facilitate understanding of the
principal cash flow elements. Free cash flow is not a measure of
financial performance under generally accepted accounting
principles and is not intended to replace the consolidated
statement of cash flows that was prepared in accordance with
generally accepted accounting principles.
(b)
Represents amounts associated
with business acquisitions consummated during the applicable period
except where noted.
(c)
The decrease in landfill
depletion for the three months ended March 31, 2024 as compared to
the quarter ended March 31, 2023 was primarily driven by the
closure of a landfill in our East Tier partially offset by
increases due to changes in estimates.
WASTE MANAGEMENT, INC.
RECONCILIATION OF CERTAIN
NON-GAAP MEASURES
(In Millions, Except Per Share
Amounts)
(Unaudited)
Three Months Ended March 31,
2024
Income from
Pre-tax
Tax
Net
Diluted Per
Operations
Income
Expense
Income(a)
Share Amount
As reported amounts
$
1,016
$
869
$
162
$
708
$
1.75
Adjustment:
Gain from asset impairments and unusual
items, net
(2
)
(2
)
0
(2
)
0
As adjusted amounts
$
1,014
$
867
$
162
(b)
$
706
$
1.75
Depreciation, depletion and
amortization
514
As adjusted operating EBITDA
$
1,528
Adjusted operating EBITDA
margin
29.6
%
Three Months Ended March 31,
2023
Income from
Pre-tax
Tax
Net
Diluted Per
Operations
Income
Expense
Income(a)
Share Amount
As reported amounts
$
825
$
696
$
164
$
533
$
1.30
Adjustments:
Collective bargaining agreement costs
6
6
2
4
Reversal of legacy loss contingency
reserve
(3
)
(3
)
(1
)
(2
)
Restructuring
3
3
1
2
Gain from asset impairments and unusual
items, net
(3
)
(3
)
(1
)
(2
)
3
3
1
2
0.01
As adjusted amounts
$
828
$
699
$
165
(b)
$
535
$
1.31
Depreciation, depletion and
amortization
505
As adjusted operating EBITDA
$
1,333
Adjusted operating EBITDA
margin
27.2
%
________________________________________
(a)
For purposes of this press
release table, all references to "Net income" refer to the
financial statement line item "Net income attributable to Waste
Management, Inc."
(b)
The Company calculates its
effective tax rate based on actual dollars. When the effective tax
rate is calculated by dividing the Tax Expense amount in the table
above by the Pre-tax Income amount, differences occur due to
rounding, as these items have been rounded in millions. The first
quarter 2024 and 2023 adjusted effective tax rates were 18.6% and
23.6%, respectively.
WASTE MANAGEMENT, INC.
RECONCILIATION OF CERTAIN
NON-GAAP MEASURES
(In Millions)
(Unaudited)
Quarter Ended March 31,
2024
Recycling
WM
Collection
Processing
Renewable
Corporate
and Disposal
and Sales
Energy
and Other
Total
Operating revenues, as reported
$
4,716
$
368
$
69
$
6
$
5,159
Income from Operations, as
reported
$
1,279
$
19
$
21
$
(303
)
$
1,016
Depreciation, depletion and
amortization
450
29
8
27
514
Operating EBITDA, as reported
$
1,729
$
48
$
29
$
(276
)
$
1,530
Adjustment:
Gain from asset impairments and unusual
items, net
(2
)
0
0
0
(2
)
Adjusted operating EBITDA
$
1,727
$
48
$
29
$
(276
)
$
1,528
Operating EBITDA margin, as
reported
36.7
%
13.0
%
42.0
%
N/A
29.7
%
Adjusted operating EBITDA
margin
36.6
%
13.0
%
42.0
%
N/A
29.6
%
Quarter Ended March 31,
2023
Recycling
WM
Collection
Processing
Renewable
Corporate
and Disposal
and Sales
Energy
and Other
Total
Operating revenues, as reported
$
4,523
$
294
$
69
$
6
$
4,892
Income from Operations, as
reported
$
1,064
$
13
$
20
$
(272
)
$
825
Depreciation, depletion and
amortization
445
27
8
25
505
Operating EBITDA, as reported
$
1,509
$
40
$
28
$
(247
)
$
1,330
Adjustments:
Collective bargaining agreement costs
6
0
0
0
6
Gain from asset impairments and other,
net
0
0
0
(3
)
(3
)
6
0
0
(3
)
3
Adjusted operating EBITDA
$
1,515
$
40
$
28
$
(250
)
$
1,333
Operating EBITDA margin, as
reported
33.4
%
13.6
%
40.6
%
N/A
27.2
%
Adjusted operating EBITDA
margin
33.5
%
13.6
%
40.6
%
N/A
27.2
%
WASTE MANAGEMENT, INC.
RECONCILIATION OF CERTAIN
NON-GAAP MEASURES
(In Millions, Except Per Share
Amounts)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
As a % of
As a % of
Amount
Revenues
Amount
Revenues
Adjusted Operating Expenses and
Adjusted Operating Expenses Margin
Operating revenues, as reported
$
5,159
$
4,892
Operating expenses, as reported
$
3,140
60.9
%
$
3,086
63.1
%
Adjustments:
Collective bargaining agreement costs
0
(6
)
Reversal of legacy loss contingency
reserve
0
3
Operating expenses, as adjusted
$
3,140
60.9
%
$
3,083
63.0
%
2024 Projected Free Cash Flow
Reconciliation(a)
Scenario 1
Scenario 2
Net cash provided by operating
activities
$
5,000
$
5,250
Capital expenditures to support the
business
(2,200
)
(2,300
)
Proceeds from divestitures of businesses
and other assets, net of cash divested
50
100
Free cash flow before sustainability
growth investments
$
2,850
$
3,050
Capital expenditures - sustainability
growth investments
(850
)
(900
)
Free cash flow
$
2,000
$
2,150
________________________________________
(a)
The reconciliation includes two scenarios
that illustrate our projected free cash flow range for 2024. The
amounts used in the reconciliation are subject to many variables,
some of which are not under our control and, therefore, are not
necessarily indicative of actual results.
WASTE MANAGEMENT, INC. SUPPLEMENTAL
INFORMATION PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY (In
Millions) (Unaudited)
Diversity in the structure of recycling contracts results in
different accounting treatment for commodity rebates. In accordance
with revenue recognition guidance, our Company records gross
recycling revenue and records rebates paid to customers as cost of
goods sold. Other contract structures allow for netting of rebates
against revenue.
Additionally, there are differences in whether companies adjust
for accretion expense in their calculation of EBITDA. Our Company
does not adjust for landfill accretion expenses when calculating
operating EBITDA, while other companies do adjust it for the
calculation of their EBITDA measure.
The table below illustrates the impact that differing contract
structures and treatment of accretion expense has on the Company’s
adjusted operating EBITDA margin results. This information has been
provided to enhance comparability and is not intended to replace or
adjust GAAP reported results.
Three Months Ended March
31,
2024
2023
Amount
Change in Adjusted
Operating EBITDA Margin
Amount
Change in Adjusted Operating
EBITDA Margin
Recycling commodity rebates
$
191
1.2
%
$
141
0.9
%
Accretion expense
$
33
0.6
%
$
32
0.6
%
WASTE MANAGEMENT, INC.
SUPPLEMENTAL DATA – 2023
OPERATING REVENUES BY LINE OF BUSINESS
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Quarter Ended June 30,
2023
Gross
Intercompany
Net
Operating
Operating
Operating
Revenues
Revenues
Revenues
Commercial
$
1,424
$
(168
)
$
1,256
Industrial
974
(192
)
782
Residential
866
(25
)
841
Other collection
745
(56
)
689
Total collection
4,009
(441
)
3,568
Landfill
1,263
(417
)
846
Transfer
585
(265
)
320
Total Collection and Disposal
$
5,857
$
(1,123
)
$
4,734
Recycling Processing and Sales
394
(78
)
316
WM Renewable Energy
63
(1
)
62
Corporate and Other
14
(7
)
7
Total
$
6,328
$
(1,209
)
$
5,119
Quarter Ended September 30,
2023
Gross
Intercompany
Net
Operating
Operating
Operating
Revenues
Revenues
Revenues
Commercial
$
1,464
$
(179
)
$
1,285
Industrial
982
(194
)
788
Residential
875
(23
)
852
Other collection
773
(55
)
718
Total collection
4,094
(451
)
3,643
Landfill
1,259
(412
)
847
Transfer
594
(263
)
331
Total Collection and Disposal
$
5,947
$
(1,126
)
$
4,821
Recycling Processing and Sales
386
(81
)
305
WM Renewable Energy
68
(1
)
67
Corporate and Other
12
(7
)
5
Total
$
6,413
$
(1,215
)
$
5,198
WASTE MANAGEMENT, INC.
SUPPLEMENTAL DATA – 2023
OPERATING REVENUES BY LINE OF BUSINESS
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Quarter Ended December 31,
2023
Gross
Intercompany
Net
Operating
Operating
Operating
Revenues
Revenues
Revenues
Commercial
$
1,501
$
(184
)
$
1,317
Industrial
947
(190
)
757
Residential
879
(23
)
856
Other collection
799
(59
)
740
Total collection
4,126
(456
)
3,670
Landfill
1,191
(391
)
800
Transfer
574
(257
)
317
Total Collection and Disposal
$
5,891
$
(1,104
)
$
4,787
Recycling Processing and Sales
422
(73
)
349
WM Renewable Energy
75
—
75
Corporate and Other
13
(7
)
6
Total
$
6,401
$
(1,184
)
$
5,217
WASTE MANAGEMENT, INC.
SUPPLEMENTAL DATA - 2023
SEGMENT REPORTING BY QUARTER
RECONCILIATION OF CERTAIN
NON-GAAP MEASURES
(In Millions)
(Unaudited)
Quarter Ended June 30,
2023
Recycling
WM
Collection
Processing
Renewable
Corporate
and Disposal
and Sales
Energy
and Other
Total
Operating revenues, as reported
$
4,734
$
316
$
62
$
7
$
5,119
Income from Operations, as
reported
$
1,173
$
24
$
14
$
(267
)
$
944
Depreciation, depletion and
amortization
461
25
9
26
521
Operating EBITDA, as reported
$
1,634
$
49
$
23
$
(241
)
$
1,465
Adjustments:
Collective bargaining agreement costs
1
0
0
0
1
Restructuring
0
0
0
1
1
1
0
0
1
2
Adjusted operating EBITDA
$
1,635
$
49
$
23
$
(240
)
$
1,467
Operating EBITDA margin, as
reported
34.5
%
15.5
%
37.1
%
N/A
28.6
%
Adjusted operating EBITDA
margin
34.5
%
15.5
%
37.1
%
N/A
28.7
%
Quarter Ended September 30,
2023
Recycling
WM
Collection
Processing
Renewable
Corporate
and Disposal
and Sales
Energy
and Other
Total
Operating revenues, as reported
$
4,821
$
305
$
67
$
5
$
5,198
Income from Operations, as
reported
$
1,259
$
18
$
17
$
(273
)
$
1,021
Depreciation, depletion and
amortization
458
28
8
25
519
Operating EBITDA, as reported
$
1,717
$
46
$
25
$
(248
)
$
1,540
Adjustment:
Collective bargaining agreement costs
1
0
0
0
1
Adjusted operating EBITDA
$
1,718
$
46
$
25
$
(248
)
$
1,541
Operating EBITDA margin, as
reported
35.6
%
15.1
%
37.3
%
N/A
29.6
%
Adjusted operating EBITDA
margin
35.6
%
15.1
%
37.3
%
N/A
29.6
%
WASTE MANAGEMENT, INC.
SUPPLEMENTAL DATA - 2023
SEGMENT REPORTING BY QUARTER
RECONCILIATION OF CERTAIN
NON-GAAP MEASURES
(In Millions)
(Unaudited)
Quarter Ended December 31,
2023
Recycling
WM
Collection
Processing
Renewable
Corporate
and Disposal
and Sales
Energy
and Other
Total
Operating revenues, as reported
$
4,787
$
349
$
75
$
6
$
5,217
Income from Operations, as
reported
$
1,325
$
(99
)
$
28
$
(469
)
$
785
Depreciation, depletion and
amortization
448
30
8
40
526
Operating EBITDA, as reported
$
1,773
$
(69
)
$
36
$
(429
)
$
1,311
Adjustment:
(Gain) loss from asset impairments and
other, net
0
122
0
125
247
Adjusted operating EBITDA
$
1,773
$
53
$
36
$
(304
)
$
1,558
Operating EBITDA margin, as
reported
37.0
%
N/A
48.0
%
N/A
25.1
%
Adjusted operating EBITDA
margin
37.0
%
15.2
%
48.0
%
N/A
29.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424494698/en/
Waste Management
Web site www.wm.com
Analysts Ed Egl 713.265.1656 eegl@wm.com
Media Toni Werner media@wm.com
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