2020
Financial Performance Demonstrates Strength and
Resiliency
Company
Maintains Disciplined Focus on Cost and Capital
Management
Recent ESG
Accolades Complement Strong Financial Results
Waste Management, Inc. (NYSE: WM) today announced financial
results for the quarter and year ended December 31, 2020.
Three
Months Ended
Year
Ended
December
31, 2020
December
31, 2019
December
31, 2020
December
31, 2019
(in
millions, except per share amounts)
(in
millions, except per share amounts)
As Reported
As Adjusted(a)
As Reported
As Adjusted(a)
As Reported
As Adjusted(a)
As Reported
As Adjusted(a)
Revenue
$4,067
$4,067
$3,846
$3,846
$15,218
$15,218
$15,455
$15,455
Income from Operations
$654
$706
$655
$726
$2,434
$2,650
$2,706
$2,809
Operating EBITDA(b)
$1,090
$1,142
$1,050
$1,121
$4,105
$4,321
$4,280
$4,383
Operating EBITDA Margin
26.8
%
28.1
%
27.3
%
29.1
%
27.0
%
28.4
%
27.7
%
28.4
%
Net Income(c)
$438
$481
$447
$507
$1,496
$1,713
$1,670
$1,881
Diluted EPS
$1.03
$1.13
$1.05
$1.19
$3.52
$4.03
$3.91
$4.40
The Company’s fourth quarter results continued the positive
momentum from the third quarter, as organic revenue growth in the
collection and disposal business was nearly flat year-over-year and
improved 250 basis points sequentially and 890 basis points from
the low in the second quarter. Additionally, the Company maintained
its disciplined focus on cost and capital management. As a result,
fourth quarter adjusted operating EBITDA increased 4.1%
year-over-year when normalized to exclude the acquisition of
Advanced Disposal as well as timing differences in the government
approvals of alternative fuel tax credits.(a) This growth was
achieved despite macroeconomic challenges stemming from the
COVID-19 pandemic.
“I am extremely proud of how our team worked through the
challenges during 2020 to provide reliable, high quality service,
and continued to do so as we welcomed new customers and team
members following our acquisition of Advanced Disposal,” said Jim
Fish, Waste Management’s President and Chief Executive Officer.
“Our focus on operational execution and efficiency allowed us to
match the highest full-year adjusted operating EBITDA margin we
have ever achieved at 28.4%.(a) So, in a year where many companies
suffered significant financial impacts from the pandemic and
resulting economic crisis, Waste Management delivered full-year
2020 results within 1.5% of our record-high 2019 adjusted operating
EBITDA.(a)
“Complementing our strong financial performance is the
recognition that we continue to receive for leading the way to a
more sustainable future. Fortune magazine recently named Waste
Management to its 2021 World’s Most Admired Companies List, and for
the fifth consecutive year, CDP included Waste Management on its ‘A
List’ for climate leadership. We remain committed not only to
managing waste responsibly but also investing in recycling
infrastructure and renewable energy projects and collaborating with
our stakeholders to create new, sustainable environmental
solutions.”
KEY HIGHLIGHTS FOR THE FOURTH QUARTER AND THE FULL YEAR
2020
Revenue
- In the fourth quarter of 2020, revenue increased $185 million
in the Company’s collection and disposal business compared to the
fourth quarter of 2019, primarily driven by $202 million in
acquisition revenue and $79 million of growth from yield partially
offset by $93 million in volume declines. For the full year,
revenue decreased $141 million in the Company’s collection and
disposal business compared to 2019, primarily driven by $669
million in volume declines partially offset by $299 million of
growth from yield and $244 million in acquisition revenue.
- Core price for the fourth quarter of 2020 was 3.2% compared to
4.3% in the fourth quarter of 2019. For the full year, core price
was 2.9% for 2020 compared to 4.2% in 2019.(d)
- Collection and disposal yield was 2.3% in the fourth quarter of
2020 compared to 3.2% in the fourth quarter of 2019. For the full
year, collection and disposal yield was 2.2% in 2020 compared to
2.8% in 2019.
- The Company’s 2020 pricing results were muted relative to
historical results due to deliberate customer-centric steps taken
during the second quarter to temporarily suspend price increases
and certain fees for customers impacted by the COVID-19 pandemic.
The Company remains firmly committed to its pricing programs as
evidenced by the Company’s strong post-collection and residential
yield.
- Total Company volumes declined 2.6% in the fourth quarter of
2020 compared to a decline of 5.1% in the third quarter of 2020 and
a decline of 0.4% in the fourth quarter of 2019. For the full year,
total Company volumes declined 4.5% in 2020 compared to growth of
2.3% in 2019.
Cost
Management
- Total Company operating expenses were 61.5% of revenue in the
fourth quarter of 2020 compared to 60.2% in the fourth quarter of
2019. The increase was primarily driven by an unfavorable
comparison for alternative fuel tax credits of 150 basis points.
For the full year, total Company operating expenses were 61.4% of
revenue in both 2020 and 2019.
- SG&A expenses were 12.5% of revenue in the fourth quarter
of 2020 compared to 11.6% in the fourth quarter of 2019. On an
adjusted basis, SG&A expenses were 10.4% of revenue in the
fourth quarter of 2020 compared to 10.7% in the fourth quarter of
2019. For the full year, SG&A expenses were 11.4% of revenue in
2020 compared to 10.6% in 2019. On an adjusted basis, SG&A
expenses were 10.2% of revenue in 2020 compared to 10.3% in
2019.(a)
- The recently-closed Advanced Disposal acquisition increased
operating expenses as a percentage of revenue by 40 basis points in
the fourth quarter of 2020 and had an immaterial impact on adjusted
SG&A expenses as a percentage of revenue in the fourth quarter
of 2020.
Profitability
- Total Company operating EBITDA was $1.09 billion, or 26.8% of
revenue, for the fourth quarter of 2020 compared to $1.05 billion,
or 27.3% of revenue, for the fourth quarter of 2019. On an adjusted
basis, total Company operating EBITDA was $1.14 billion, or 28.1%
of revenue, for the fourth quarter of 2020 compared to adjusted
operating EBITDA of $1.12 billion, or 29.1% of revenue, for the
same period in 2019.(a) The margin decreases were driven by an
unfavorable comparison for alternative fuel tax credits of 150
basis points.
- For the full year, total Company operating EBITDA was $4.11
billion, or 27.0% of revenue, for 2020 compared to $4.28 billion,
or 27.7% of revenue, for 2019. On an adjusted basis, total Company
operating EBITDA was $4.32 billion for 2020 compared to adjusted
operating EBITDA of $4.38 billion for 2019. Adjusted operating
EBITDA was 28.4% of revenue in both years, demonstrating the
Company’s strong focus on controlling costs in the lower volume
environment.(a)
- The recently-closed Advanced Disposal acquisition had a
negative 50 basis point impact on adjusted operating EBITDA as a
percentage of revenue in the fourth quarter of 2020.
- In the fourth quarter of 2020, the Company realized between $10
and $15 million of annualized run-rate synergies from the
acquisition of Advanced Disposal.
Free Cash Flow &
Capital Allocation
- In the fourth quarter of 2020, net cash provided by operating
activities was $753 million compared to $1.02 billion in the fourth
quarter of 2019. For the full year, net cash provided by operating
activities was $3.40 billion in 2020 compared to $3.87 billion in
2019. The year-over-year comparisons were impacted by an increase
in cash taxes, which was due in large part to the tax gain realized
on the sale of assets and businesses to GFL Environmental.
- During the second and third quarters of 2020, the Company
deferred payment of payroll taxes as provided for by the CARES Act.
In light of the Company's strong financial performance and
operating cash flow, management elected to pay the previously
deferred 2020 payroll taxes in the fourth quarter. While there is
no impact of this decision on the comparison of 2020 and 2019 cash
flow from operations, this decision decreased fourth quarter and
full year 2020 cash flow by approximately $120 million from prior
outlook.
- In the fourth quarter of 2020, capital expenditures were $394
million compared to $286 million in the fourth quarter of 2019. For
the full year, capital expenditures were $1.63 billion in 2020
compared to $1.82 billion in 2019 as the Company took prudent steps
to reduce and defer certain aspects of capital spending.
- In the fourth quarter of 2020, the Company closed on the sale
to GFL Environmental of the assets required to be divested by the
U.S. Department of Justice in connection with the Advanced Disposal
acquisition. Proceeds from divestures were $865 million during the
fourth quarter of 2020, with $856 million of this related to the
divestitures to GFL Environmental. For the full year, proceeds from
divestures were $885 million in 2020 compared to $49 million in
2019.
- In the fourth quarter of 2020, free cash flow was $1.22 billion
compared to $756 million in the fourth quarter of 2019. For the
full year, free cash flow was $2.66 billion in 2020 compared to
$2.11 billion in 2019.(a)
- During the fourth quarter of 2020, the Company paid $231
million of dividends to shareholders.
2021 OUTLOOK
Revenue
Growth
- Total Company revenue growth is expected to be between 10.75%
and 11.25%. Combined internal revenue growth from yield and volume
in the collection and disposal business is expected to be between
4% and 4.5%, primarily driven by the Company’s disciplined pricing
programs which are expected to result in core price of 4.0% or
greater and yield of approximately 2.5%.
Profitability
- Adjusted operating EBITDA is expected to be between $4.75 and
$4.9 billion for the full year.(a)
- Synergies from the completed acquisition of Advanced Disposal
are included in this measure and are expected to be between $50
million and $60 million in 2021.
Free Cash Flow &
Capital Allocation
- Free cash flow is projected to be between $2.25 and $2.35
billion.(a)
- Capital expenditures are expected to be in the range of $1.78
to $1.88 billion.
- The Company is committed to returning its leverage ratio, as
defined in its revolving credit facility financial covenant, to its
targeted long-term range of between 2.5 and 3-to-1 during
2021.
- The Board of Directors has indicated its intention to increase
the dividend by $0.12 per share to $2.30 on an annual basis for an
approximate annual cost of $975 million. This represents the 18th
consecutive year of increases in the Company’s per share dividend.
The Board of Directors must separately approve and declare each
dividend.
- In December 2020, the Board of Directors refreshed the
Company’s share repurchase authorization, allowing for the
repurchase of up to $1.35 billion of the Company’s common stock,
signaling confidence in the cash flow outlook.
Fish concluded, “In 2020, we quickly and successfully learned to
operate our business with a lower cost structure while maintaining
our focus on exceptional customer service. We also completed the
acquisition of Advanced Disposal and accelerated our customer
service digitalization investments, all while matching our highest
adjusted operating EBITDA margin and generating strong cash flow.
In 2021, we will continue to make investments in technology that
transform our business and integrate the Advanced Disposal
business, and we are well-positioned to generate strong
returns.”
(a)
The information labeled "As
Adjusted" in the table above, as well as adjusted SG&A
expenses, adjusted operating EBITDA outlook and 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)
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.
Beginning with the fourth quarter 2019, the Company has updated its
core price calculation. With advancements in technology, the
Company began collecting additional transactional customer level
data, which provides improved clarity of the impact of the
Company’s pricing activities. While this does not change the
year-over-year core price performance result, the new measure
reflects a more precise calculation in the evaluation of revenue
changes.
The Company will host a conference call at 10 a.m. (Eastern)
today to discuss the fourth quarter and full year results.
Information contained within this press release will be referenced
and should be considered in conjunction with the call.
The conference call will be webcast live from the Investors
section of Waste Management’s website www.wm.com. To access the
conference call by telephone, please dial (877) 710-6139
approximately 10 minutes prior to the scheduled start of the call.
If you are calling from outside of the United States or Canada,
please dial (706) 643-7398. Please utilize conference ID number
1965816 when prompted by the conference call operator.
A replay of the conference call will be available on the
Company’s website www.wm.com and by telephone from approximately
1:00 p.m. (Eastern) today through 5:00 p.m. (Eastern) on Thursday,
March 4, 2021. To access the replay telephonically, please dial
(855) 859-2056, or from outside of the United States or Canada dial
(404) 537-3406 and use the replay conference ID number 1965816.
ABOUT WASTE MANAGEMENT
Waste Management, based in Houston, Texas, is the leading
provider of comprehensive waste management environmental services
in North America, providing services throughout the United States
and Canada. Through its subsidiaries, the Company provides
collection, transfer, disposal services, and recycling and resource
recovery. It is also a leading developer, operator and owner of
landfill gas-to-energy facilities in the United States. The
Company’s customers include residential, commercial, industrial,
and municipal customers throughout North America. To learn more
information about Waste Management, visit www.wm.com.
FORWARD-LOOKING STATEMENTS
The Company, from time to time, provides estimates 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. This press release contains a number of such
forward-looking statements, including but not limited to, all
statements under the heading “2021 Outlook”, as well as all
statements regarding future performance or financial results of our
business; future investments and results from investments; cost
structure or efficiencies; integration of, and benefits from, the
acquisition of Advanced Disposal Services, Inc. (“Advanced
Disposal”); future leverage ratio; future share repurchases and
future sustainability efforts. 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, growth, and
cost savings initiatives and overall business strategy; failure to
identify acquisition targets and negotiate attractive terms;
failure to consummate or integrate acquisitions; failure to obtain
the results anticipated from acquisitions; failure to successfully
integrate the acquisition of Advanced Disposal, realize anticipated
synergies or obtain the results anticipated from such acquisition;
environmental and other regulations, including developments related
to emerging contaminants, gas emissions and renewable fuel;
significant environmental, safety or other incidents resulting in
liabilities or brand damage; failure to obtain and maintain
necessary permits; failure to attract, hire and retain key team
members and a high quality workforce; labor disruptions and
wage-related regulations; significant storms and destructive events
influenced by climate change; public health risk and other impacts
of COVID-19 or similar pandemic conditions, including increased
costs, social and commercial disruption and service reductions;
increased competition; pricing actions; commodity price
fluctuations; international trade restrictions; disposal
alternatives and waste diversion; declining waste volumes; weakness
in general economic conditions and capital markets; adoption of new
tax legislation; fuel shortages; failure to develop and protect new
technology; failure of technology to perform as expected, including
implementation of a new enterprise resource planning system;
failure to prevent, detect and address cybersecurity incidents or
comply with privacy regulations; 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 our 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 SG&A expenses, adjusted operating
EBITDA, adjusted operating EBITDA margin, and free cash flow, as
well as projections of adjusted operating EBITDA and free cash flow
for 2021. 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 full year 2021 adjusted
operating EBITDA is anticipated to exclude the effects of other
events or circumstances in 2021 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. 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
Years Ended
December 31,
December 31,
2020
2019
2020
2019
Operating revenues
$
4,067
$
3,846
$
15,218
$
15,455
Costs and expenses:
Operating
2,500
2,314
9,341
9,496
Selling, general and administrative
510
445
1,728
1,631
Depreciation and amortization
436
395
1,671
1,574
Restructuring
—
3
9
6
(Gain) loss from divestitures, asset
impairments and unusual items, net
(33)
34
35
42
3,413
3,191
12,784
12,749
Income from operations
654
655
2,434
2,706
Other income (expense):
Interest expense, net
(97)
(110)
(425)
(411)
Loss on early extinguishment of debt,
net
(1)
—
(53)
(85)
Equity in net losses of unconsolidated
entities
(12)
(16)
(68)
(55)
Other, net
3
2
5
(50)
(107)
(124)
(541)
(601)
Income before income taxes
547
531
1,893
2,105
Income tax expense
109
84
397
434
Consolidated net income
438
447
1,496
1,671
Less: Net income (loss) attributable to
noncontrolling interests
—
—
—
1
Net income attributable to Waste
Management, Inc.
$
438
$
447
$
1,496
$
1,670
Basic earnings per common share
$
1.04
$
1.05
$
3.54
$
3.93
Diluted earnings per common share
$
1.03
$
1.05
$
3.52
$
3.91
Weighted average basic common shares
outstanding
422.9
424.5
423.0
424.6
Weighted average diluted common shares
outstanding
425.1
427.4
425.1
427.5
WASTE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Millions)
(Unaudited)
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
553
$
3,561
Receivables, net
2,624
2,319
Other
363
329
Total current assets
3,540
6,209
Property and equipment, net
14,148
12,893
Goodwill
8,994
6,532
Other intangible assets, net
1,024
521
Other
1,639
1,588
Total assets
$
29,345
$
27,743
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued liabilities and
deferred revenues
$
3,002
$
2,926
Current portion of long-term debt
551
218
Total current liabilities
3,553
3,144
Long-term debt, less current portion
13,259
13,280
Other
5,079
4,249
Total liabilities
21,891
20,673
Equity:
Waste Management, Inc. stockholders’
equity
7,452
7,068
Noncontrolling interests
2
2
Total equity
7,454
7,070
Total liabilities and equity
$
29,345
$
27,743
WASTE MANAGEMENT, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
Years Ended
December 31,
2020
2019
Cash flows from operating activities:
Consolidated net income
$
1,496
$
1,671
Adjustments to reconcile consolidated net
income to net cash provided by operating activities:
Depreciation and amortization
1,671
1,574
Loss on early extinguishment of debt,
net
53
85
Other
510
464
Change in operating assets and
liabilities, net of effects of acquisitions and divestitures
(327)
80
Net cash provided by operating
activities
3,403
3,874
Cash flows from investing activities:
Acquisitions of businesses, net of cash
acquired
(4,085)
(521)
Capital expenditures
(1,632)
(1,818)
Proceeds from divestitures of businesses
and other assets (net of cash divested)
885
49
Other, net
(15)
(86)
Net cash used in investing activities
(4,847)
(2,376)
Cash flows from financing activities:
New borrowings
5,790
4,683
Debt repayments
(7,807)
(533)
Premiums paid on early extinguishment of
debt
(30)
(84)
Net commercial paper borrowings
(repayments)
1,808
(1,001)
Common stock repurchase program
(402)
(248)
Cash dividends
(927)
(876)
Exercise of common stock options
63
67
Tax payments associated with equity-based
compensation transactions
(34)
(33)
Other, net
(20)
(11)
Net cash (used in) provided by financing
activities
(1,559)
1,964
Effect of exchange rate changes on cash,
cash equivalents and restricted cash and cash equivalents
4
2
(Decrease) increase in cash, cash
equivalents and restricted cash and cash equivalents
(2,999)
3,464
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
3,647
183
Cash, cash equivalents and restricted cash
and cash equivalents at end of period
$
648
$
3,647
WASTE MANAGEMENT, INC.
SUMMARY DATA SHEET
(In Millions)
(Unaudited)
Operating Revenues by Line of
Business
Three Months Ended
Years Ended
December 31,
December 31,
2020
2019
2020
2019
Commercial
$
1,086
$
1,082
$
4,102
$
4,229
Residential
747
657
2,716
2,613
Industrial
743
726
2,770
2,916
Other collection
118
121
465
482
Total collection
2,694
2,586
10,053
10,240
Landfill
960
966
3,667
3,846
Transfer
493
463
1,855
1,820
Recycling
308
240
1,127
1,040
Other
479
413
1,776
1,758
Intercompany (a)
(867)
(822)
(3,260)
(3,249)
Total
$
4,067
$
3,846
$
15,218
$
15,455
Internal Revenue Growth
Period-to-Period Change for
the
Three Months Ended
December 31, 2020 vs.
2019
Period-to-Period Change for
the
Year Ended
December 31, 2020 vs.
2019
As a % of
As a % of
As a % of
As a % of
Related
Total
Related
Total
Amount
Business(b)
Amount
Company(c)
Amount
Business(b)
Amount
Company(c)
Collection and disposal
$
79
2.3
%
$
299
2.2
%
Recycling commodities (d)
71
31.7
75
7.6
Fuel surcharges and mandated fees
(33
)
(22.8
)
(151
)
(24.7
)
Total average yield (e)
$
117
3.1
%
$
223
1.5
%
Volume
(99
)
(2.6
)
(692
)
(4.5
)
Internal revenue growth
18
0.5
(469
)
(3.0
)
Acquisitions
205
5.3
248
1.7
Divestitures
(5
)
(0.2
)
(8
)
(0.1
)
Foreign currency translation
3
0.1
(8
)
(0.1
)
Total
$
221
5.7
%
$
(237
)
(1.5
)
%
Period-to-Period Change for
the Three Months Ended December 31, 2020 vs. 2019
Period-to-Period Change for
the Year Ended December 31, 2020 vs. 2019
As a % of Related
Business(b)
As a % of Related
Business(b)
Yield
Volume
Yield
Volume(f)
Commercial
1.9
%
(4.3)
%
2.4
%
(4.8)
%
Industrial
3.2
(6.2)
2.7
(8.6)
Residential
3.7
(1.4)
2.9
(2.1)
Total collection
2.6
(3.8)
2.5
(4.8)
MSW
2.4
1.2
2.3
(2.0)
Transfer
2.9
(2.1)
3.0
(1.3)
Total collection and disposal
2.3
%
(2.7)
%
2.2
%
(5.0)
%
_____________________________
(a)
Intercompany revenues between lines of
business are eliminated in the Condensed Consolidated Financial
Statements included herein.
(b)
Calculated by dividing the increase or
decrease for the current year period by the prior year period’s
related business revenue adjusted to exclude the impacts of
divestitures for the current year period.
(c)
Calculated by dividing the increase or
decrease for the current year period by the prior year period’s
total Company revenue adjusted to exclude the impacts of
divestitures for the current year period.
(d)
Net impact of commodity price variability
and changes in fees.
(e)
The amounts reported herein represent the
changes in our revenue attributable to average yield for the total
Company.
(f)
Workday adjusted volume impact.
WASTE MANAGEMENT, INC. SUMMARY DATA SHEET (In
Millions) (Unaudited) Free Cash Flow (a)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Net cash provided by operating activities
$
753
$
1,022
$
3,403
$
3,874
Capital expenditures
(394)
(286)
(1,632)
(1,818)
Proceeds from divestitures of businesses and other assets (net of
cash divested)
865
20
885
49
Free cash flow
$
1,224
$
756
$
2,656
$
2,105
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Supplemental Data Internalization of waste, based on
disposal costs
67.9%
67.1%
68.3%
66.6%
Landfill amortizable tons (in millions)
29.1
29.0
112.0
120.7
Acquisition Summary (b) Gross annualized
revenue acquired
1,209
1
1,212
171
Total consideration, net of cash acquired
4,083
2
4,085
515
Cash paid for acquisitions consummated during the period,
net of cash acquired
4,083
2
4,085
512
Cash paid for acquisitions including contingent
consideration and other items from prior periods, net of cash
acquired
4,084
9
4,088
527
Amortization, Accretion and Other Expenses for
Landfills:
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Landfill amortization expense: Cost basis of landfill assets
$
127
$
117
$
472
$
489
Asset retirement costs
7
18
96
86
Total landfill amortization expense
134
135
568
575
Accretion and other related expense
29
26
105
102
Landfill amortization, accretion and other related expense
$
163
$
161
$
673
$
677
(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.
WASTE MANAGEMENT, INC. RECONCILIATION OF CERTAIN NON-GAAP
MEASURES (In Millions, Except Per Share Amounts)
(Unaudited) Three Months EndedDecember 31,
2020 Income from Operations Pre-tax Income Tax
Expense Net Income (a) Diluted Per Share Amount
As reported amounts
$
654
$
547
$
109
$
438
$
1.03
Adjustments: Advanced Disposal acquisition-related costs
80
80
17
63
Gain from divestitures, net (b)
(33)
(33)
(8)
(25)
Enterprise resource planning system related costs
5
5
1
4
Loss on extinguishment of debt
-
1
-
1
52
53
10
43
0.10
As adjusted amounts
$
706
$
600
$
119
(c)
$
481
$
1.13
Depreciation and amortization
436
As adjusted operating EBITDA
$
1,142
Three Months EndedDecember 31, 2019 Income
from Operations Pre-tax Income Tax Expense Net
Income (a) Diluted Per Share Amount As reported
amounts
$
655
$
531
$
84
$
447
$
1.05
Adjustments: Loss from divestitures, asset impairments and
unusual items, net
34
34
6
28
Advanced Disposal acquisition-related costs
24
28
6
22
Enterprise resource planning system related costs
10
10
2
8
Restructuring
3
3
1
2
71
75
15
60
0.14
As adjusted amounts
$
726
$
606
$
99
(c)
$
507
$
1.19
Depreciation and amortization
395
As adjusted operating EBITDA
$
1,121
(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 net gain from divestitures is related to the sale of
our assets and businesses to GFL Environmental pursuant to an
agreement executed to address divestitures required by the U.S.
Department of Justice in connection with our acquisition of
Advanced Disposal.
(c) 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 fourth quarter 2020
and 2019 adjusted effective tax rates were 19.8% and 16.3%,
respectively.
WASTE MANAGEMENT, INC. RECONCILIATION OF
CERTAIN NON-GAAP MEASURES (In Millions, Except Per Share
Amounts) (Unaudited) Year EndedDecember
31, 2020 Income from Operations Pre-tax Income
Tax Expense Net Income (a) Diluted Per Share
Amount As reported amounts
$
2,434
$
1,893
$
397
$
1,496
$
3.52
Adjustments: Advanced Disposal acquisition-related costs
146
146
29
117
Loss on extinguishment of debt
-
53
13
40
(Gain) loss from divestitures, asset impairments and unusual items,
net
38
45
9
36
Enterprise resource planning system related costs
25
25
6
19
Restructuring
7
7
2
5
216
276
59
217
0.51
As adjusted amounts
$
2,650
$
2,169
$
456
(b)
$
1,713
$
4.03
Depreciation and amortization
1,671
As adjusted operating EBITDA
$
4,321
Year EndedDecember 31, 2019
Income from Operations
Pre-tax Income
Tax Expense
Net Income (a)
Diluted Per Share
Amount
As reported amounts
$
2,706
$
2,105
$
434
$
1,670
$
3.91
Adjustments: Loss on early extinguishment of debt
-
84
20
64
Impairment of an investment and other
-
55
-
55
Loss from divestitures, asset impairments and unusual items, net
57
57
12
45
Advanced Disposal acquisition-related costs
33
45
8
37
Enterprise resource planning system related costs
10
10
2
8
Restructuring
3
3
1
2
103
254
43
211
0.49
As adjusted amounts
$
2,809
$
2,359
$
477
(b)
$
1,881
$
4.40
Depreciation and amortization
1,574
As adjusted operating EBITDA
$
4,383
(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 full year 2020 and
2019 adjusted effective tax rate were 21.0% and 20.2%,
respectively.
WASTE MANAGEMENT, INC. RECONCILIATION OF
CERTAIN NON-GAAP MEASURES (In Millions)
(Unaudited) Three Months Ended
December 31, 2020 December 31, 2019 Adjusted
Operating EBITDA and Adjusted Operating EBITDA Margin
Amount
As a % of Revenues
Amount
As a % of Revenues
Operating revenues, as reported
$
4,067
$
3,846
Advanced disposal contribution
(205)
-
Adjusted operating revenues
$
3,862
$
3,846
Income from operations, as reported
654
655
Depreciation and amortization, as reported
436
395
Operating EBITDA, as reported
$
1,090
26.8%
$
1,050
27.3%
Adjustments: Advanced Disposal acquisition-related costs
80
24
(Gain) loss from divestitures, asset impairments and unusual items,
net
(33)
34
Enterprise resource planning system related costs
5
10
Restructuring
-
3
Adjusted operating EBITDA
$
1,142
28.1%
$
1,121
29.1%
Adjustments for Advanced Disposal's contribution: Income
from operations, as reported
4
-
Depreciation and amortization, as reported
(42)
-
Adjusted operating EBITDA less Advanced Disposal's operating
EBITDA
$
1,104
28.6%
$
1,121
29.1%
Fuel tax credits
(13)
(73)
Further adjusted operating EBITDA (a)
$
1,091
28.2%
$
1,048
27.2%
Years Ended December 31, 2020
December 31, 2019 Adjusted Operating EBITDA and Adjusted
Operating EBITDA Margin
Amount
As a % of Revenues
Amount
As a % of Revenues
Operating revenues, as reported
$
15,218
$
15,455
Advanced Disposal's contribution - operating revenues, as reported
(205)
-
Adjusted operating revenues
$
15,013
$
15,455
Income from operations, as reported
2,434
2,706
Depreciation and amortization, as reported
1,671
1,574
Operating EBITDA, as reported
$
4,105
27.0%
$
4,280
27.7%
Adjustments: Advanced Disposal acquisition-related costs
146
33
(Gain) loss from divestitures, asset impairments and unusual items,
net
38
57
Enterprise resource planning system related costs
25
10
Restructuring
7
3
Adjusted operating EBITDA
$
4,321
28.4%
$
4,383
28.4%
Adjustments for Advanced Disposal's contribution: Income
from operations, as reported
4
Depreciation and amortization, as reported
(42)
Adjusted operating EBITDA less Advanced Disposal's operating
EBITDA
$
4,283
28.5%
(a) Further adjusting for Advanced
Disposal's operating EBITDA contribution and the fuel tax credit
benefit, our fourth quarter 2020 operating EBITDA grew $43 million
or 4.1% as compared with the same period prior year.
WASTE
MANAGEMENT, INC. RECONCILIATION OF CERTAIN NON-GAAP
MEASURES (In Millions) (Unaudited)
Three Months Ended
December 31, 2020
December 31, 2019
Adjusted SG&A Expenses and Adjusted SG&A Expenses
Margin
Amount
As a % of Revenues
Amount
As a % of Revenues
Operating revenues, as reported
$
4,067
$
3,846
SG&A expenses, as reported
$
510
12.5%
$
445
11.6%
Adjustments: Advanced Disposal acquisition-related costs
(80)
(24)
Enterprise resource planning system related costs
(5)
(10)
Adjusted SG&A expenses
$
425
10.4%
$
411
10.7%
Years Ended
December 31, 2020
December 31, 2019
Adjusted SG&A Expenses and Adjusted SG&A Expenses
Margin
Amount
As a % of Revenues
Amount
As a % of Revenues
Operating revenues, as reported
$
15,218
$
15,455
SG&A expenses, as reported
$
1,728
11.4%
$
1,631
10.6%
Adjustments: Advanced Disposal acquisition-related costs
(146)
(33)
Enterprise resource planning system related costs
(25)
(10)
Adjusted SG&A expenses
$
1,557
10.2%
$
1,588
10.3%
Advanced Disposal SG&A spending
(25)
Further adjusted SG&A expenses (a)
$
1,532
2021 Projected Free Cash Flow Reconciliation
(b) Scenario 1 Scenario 2 Net cash
provided by operating activities
$
3,980
$
4,130
Capital expenditures
(1,780)
(1,880)
Proceeds from divestitures of businesses and other assets (net of
cash divested)
50
100
Free cash flow
$
2,250
$
2,350
(a) Excluding the $25 million of
SG&A spending associated with the acquired Advanced Disposal
operations, SG&A improved by $56 million for the full year 2020
as compared with same period prior year.
(b) The
reconciliation includes two scenarios that illustrate our projected
free cash flow range for 2021. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210218005556/en/
Web site www.wm.com
Analysts Ed Egl 713.265.1656 eegl@wm.com
Media Janette Micelli 602.579.6152 jmicelli@wm.com
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