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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 24, 2023

 

Waste Management, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware   1-12154   73-1309529
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

800 Capitol Street, Suite 3000, Houston, Texas   77002
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s Telephone number, including area code: (713) 512-6200

 

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.01 par value   WM   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

Waste Management, Inc. (the “Company”) issued a press release today announcing its financial results for the third quarter of 2023, a copy of which is furnished as Exhibit 99.1 to this Form 8-K. The Company is conducting an audio webcast to discuss these results beginning at 9:00 a.m. Central Time on October 25, 2023. Listeners can access the live audio webcast 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.

 

On the webcast, management of the Company is expected to discuss certain non-GAAP financial measures. The Company has provided information regarding its use of non-GAAP measures and reconciliations of such measures to their most comparable GAAP measures in the notes and tables that accompany the press release.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Index

 

Exhibit
Number
  Description
99.1   Press Release dated October 24, 2023
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

 2 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  WASTE MANAGEMENT, INC.
 
Date: October 24, 2023 By: /s/ Charles C. Boettcher
    Charles C. Boettcher
    Executive Vice President, Corporate Development and Chief Legal Officer

 

 

Exhibit 99.1

 

For Immediate Release

 

 

 

WM Announces Third Quarter Earnings

 

 

The Company Delivers Another Quarter of Strong Expansion
in Operating EBITDA Margin

 

 

Houston — Oct. 24, 2023 — WM (NYSE: WM) today announced financial results for the quarter ended September 30, 2023.

 

   Three Months Ended  Three Months Ended
   September 30, 2023
(in millions, except per share amounts)
 

September 30, 2022

(in millions, except per share amounts)

             
   As Reported  As Adjusted(a)  As Reported  As Adjusted(a)
             
Revenue  $5,198  $5,198  $5,075  $5,075
             
Income from Operations  $1,021  $1,022  $942  $950
             
Operating EBITDA(b)  $1,540  $1,541  $1,445  $1,453
             
Operating EBITDA Margin  29.6%  29.6%  28.5%  28.6%
             
Net Income(c)  $663  $664  $639  $645
             
Diluted EPS  $1.63  $1.63  $1.54  $1.56

 

“Over the course of the year, our team has consistently delivered strong results driven by our focus on pricing discipline and optimization of our cost structure,” said Jim Fish, WM’s President and Chief Executive Officer. “In the third quarter, organic growth in our collection and disposal business, operating cost improvements, and our commitment to SG&A cost management translated into more than 6% growth in adjusted operating EBITDA and 100 basis points of adjusted operating EBITDA margin expansion.”(a)

 

Key Highlights for the THIRD Quarter OF 2023

 

Revenue

 

·Core price for the third quarter of 2023 was 6.6% compared to 8.2% in the third quarter of 2022.(d) Core price exceeded inflationary cost increases in the quarter by an estimated 100 basis points, contributing to margin and earnings growth.
·Collection and disposal yield was 5.0% in the third quarter of 2023 compared to 7.1% in the third quarter of 2022.(e)
·On a workday adjusted basis, total Company volumes increased 1.0% and collection and disposal volumes increased 0.7% in the third quarter of 2023. On a reported basis, total Company volumes increased 0.5% and collection and disposal volumes increased 0.3% in the third quarter of 2023 compared to 1.0% and 1.4%, respectively, in the third quarter of 2022.

 

 

 

 

 

 

 

 

 

 

FOR MORE
INFORMATION

 

Waste
Management

 

Website

www.wm.com

 

Analysts

Ed Egl

713.265.1656

eegl@wm.com

 

Media

Toni Werner

media@wm.com

 

 

 

 

 

 

Cost Management

 

·Operating expenses as a percentage of revenue were 61.3% in the third quarter of 2023 compared to 62.2% in the third quarter of 2022.
·SG&A expenses were 9.0% of revenue in the third quarter of 2023 compared to 9.3% in the third quarter of 2022. SG&A expenses as a percentage of revenue improved 20 basis points in the third quarter of 2023 from 9.2%, on an adjusted basis, in the third quarter of 2022.(a)

 

Profitability

 

·Operating EBITDA in the Company’s collection and disposal business, adjusted on the same basis as total Company operating EBITDA, increased by approximately $105 million to $1.70 billion for the third quarter of 2023. Operating EBITDA as a percentage of revenue in the Company’s collection and disposal business was 32.6% for the third quarter of 2023 compared to 31.9% for the third quarter of 2022.(f)
·Operating EBITDA in the Company’s recycling line of business declined by $10 million compared to the third quarter of 2022, which was in line with the Company’s expectations. The decline was driven by the approximately 40% decrease in market prices for single-stream recycled commodities.(g)  WM’s automated facilities continue to see strong improvements in product quality, throughput, and labor costs, which is mitigating the commodity price pressure on earnings.
·Operating EBITDA in the Company’s renewable energy business declined by $13 million compared to the third quarter of 2022, which was in line with expectations and primarily driven by decreases in the value of energy prices and renewable fuel standard credits.(g)

 

Free Cash Flow & Capital Allocation

 

  Three Months Ended 
 

September 30,

(in millions)

  2023        2022 
Net cash provided by operating activities  $ 1,263   1,182
Capital expenditures to support the business     (493)      (547)
Proceeds from divestitures of businesses and other assets,
  net of cash divested 
   22      7
Free cash flow without sustainability growth investments     792      642
Capital expenditures - sustainability growth investments     (180)      (210)
Free cash flow   612    432

 

·Cash flow from operations increased 6.9% in the third quarter of 2023, driven by strong operating EBITDA growth.
·During the third quarter of 2023, $653 million was returned to shareholders, including $283 million of cash dividends and $370 million of share repurchases.

 

Sustainability Update

 

·The Company continues to advance its sustainability growth investments in both the renewable energy and recycling businesses, and management continues to expect that the previously announced investments will deliver approximately $740 million in incremental annual adjusted operating EBITDA contributions beginning in 2026, with approximately $500 million coming from renewable energy investments and approximately $240 million coming from recycling investments.(a)(h)
·

In the third quarter, technology and automation upgrades were completed at two of WM’s recycling facilities, and another two automation projects and a new market facility are expected to be in service by the end of the year. Additionally, the Company expects to

 

 

 

 

 

  have its seventh renewable natural gas facility, the third in its growth program, in service in January.
·The Company now expects sustainability growth capital spending of about $750 million in 2023. The decrease from prior expectations is based on a shift in the timing of spending across the next few quarters. As a result of lower anticipated capital spending, 2023 free cash flow is expected to be in the range of $1.825 and $1.925 billion.(a)
·WM released its 2023 Sustainability Report during the third quarter, providing details about the Company’s sustainability ambitions, strategy, and progress toward its goals.

 

“We are pleased with our results in the initial three quarters of the year across all key financial metrics giving us confidence in our ability to deliver on the guidance we communicated in July. Our team remains focused on continuing to drive operating leverage in the business to deliver a strong finish to this year and lay the groundwork for further growth in 2024,” Fish concluded.

 

-------------------------------------------------------------------------------------------------------------------------------------------------

(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)Core price is a performance metric measuring cumulative price changes net of churn plus price changes from ancillary fees excluding fuel surcharges. It is 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.

 

(e)Collection and disposal yield reflects the effect on revenue from the pricing activities of collection, transfer and landfill operations, exclusive of volume changes. It is 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.

 

(f)In the first quarter of 2023, the Company updated its collection and disposal operating EBITDA calculation with a more accurate allocation of costs to this line of business. The Company has restated the prior periods to be consistent with the current year presentation.

 

(g)In the third quarter of 2023, the Company’s average recycled commodity price was $58 per ton compared to $94 per ton in the third quarter of 2022.  The blended average value of renewable fuel standard credits was $2.65 in the third quarter compared to $2.86 in the prior year period. The average natural gas price was $2.11 per MMBtu in the third quarter compared to $7.21 per MMBtu in the prior year period, and the average electricity price was $65 per megawatt hour in the third quarter compared to about $81 per megawatt hour in the prior year period.

 

(h)Projections are based on commodity price assumptions of $26 per MMBtu for renewable natural gas and $125 per ton for the blended average value of single-stream recycled commodities. In the recycling business, projected incremental annual operating EBITDA by 2026 ranges from $200 to $260 million assuming commodity prices range from $75 to $150 per ton.

 

The Company will host a conference call at 10 a.m. ET on October 25, 2023 to discuss the third quarter 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 must 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 nearly 11,000 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 but not limited to statements under the heading “Sustainability Update” and all statements regarding future performance or financial results of our business; achievement of our full-year financial guidance; 2023 free cash flow; future capital expenditures; pricing results; commodity price assumptions; costs management and cost reduction; future execution of and investment in strategic priorities, including technology, automation, and sustainability projects; and timing, outcomes and benefits from investment in such strategic priorities. 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 and environmental, social, and governance performance and disclosure; increasing attention to sustainability matters and heightened scrutiny of sustainability measurements, objectives and disclosures, which could lead to increased litigation risk related to our sustainability efforts; 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 extreme weather and destructive climate events; failure to achieve our sustainability goals or execute on our sustainability-related strategy and initiatives; public health risk, increased costs and disruption due to a future resurgence of pandemic conditions and restrictions; macroeconomic conditions, geopolitical conflict and 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; 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, adjusted operating EBITDA margin, adjusted SG&A expenses, and free cash flow, as well as projections of adjusted operating EBITDA 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 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. 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   Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
Operating revenues  $5,198   $5,075   $15,209   $14,763 
Costs and expenses:                    
Operating   3,188    3,156    9,460    9,201 
Selling, general and administrative   470    473    1,413    1,451 
Depreciation, depletion and amortization   519    503    1,545    1,493 
Restructuring       1    4    1 
(Gain) loss from divestitures, asset impairments and unusual items, net           (3)   17 
    4,177    4,133    12,419    12,163 
Income from operations   1,021    942    2,790    2,600 
Other income (expense):                    
Interest expense, net   (127)   (91)   (372)   (269)
Equity in net losses of unconsolidated entities   (18)   (17)   (41)   (49)
Other, net   (4)   (6)       (7)
    (149)   (114)   (413)   (325)
Income before income taxes   872    828    2,377    2,275 
Income tax expense   210    189    570    535 
Consolidated net income   662    639    1,807    1,740 
Less: Net income (loss) attributable to noncontrolling interests   (1)       (4)   1 
Net income attributable to Waste Management, Inc.  $663   $639   $1,811   $1,739 
Basic earnings per common share  $1.64   $1.55   $4.46   $4.20 
Diluted earnings per common share  $1.63   $1.54   $4.44   $4.18 
Weighted average basic common shares outstanding   404.0    412.0    405.8    414.0 
Weighted average diluted common shares outstanding   405.9    414.3    407.6    416.2 

 

 

 

WASTE MANAGEMENT, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

(Unaudited)

 

   September 30,   December 31, 
   2023   2022 
ASSETS          
Current assets:          
Cash and cash equivalents  $150   $351 
Receivables, net   2,917    2,752 
Other   495    448 
Total current assets   3,562    3,551 
Property and equipment, net   16,229    15,719 
Goodwill   9,398    9,323 
Other intangible assets, net   779    827 
Other   1,967    1,947 
Total assets  $31,935   $31,367 
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable, accrued liabilities and deferred revenues  $3,921   $3,980 
Current portion of long-term debt   297    414 
Total current liabilities   4,218    4,394 
Long-term debt, less current portion   15,133    14,570 
Other   5,618    5,539 
Total liabilities   24,969    24,503 
Equity:          
Waste Management, Inc. stockholders’ equity   6,950    6,849 
Noncontrolling interests   16    15 
Total equity   6,966    6,864 
Total liabilities and equity  $31,935   $31,367 

 

 

 

WASTE MANAGEMENT, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

 

   Nine Months Ended 
   September 30, 
   2023   2022 
Cash flows from operating activities:          
Consolidated net income  $1,807   $1,740 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:          
Depreciation, depletion and amortization   1,545    1,493 
Other   278    199 
Change in operating assets and liabilities, net of effects of acquisitions and divestitures   (293)   55 
Net cash provided by operating activities   3,337    3,487 
Cash flows from investing activities:          
Acquisitions of businesses, net of cash acquired   (139)   (207)
Capital expenditures   (1,853)   (1,725)
Proceeds from divestitures of businesses and other assets, net of cash divested   68    18 
Other, net   (83)   (122)
Net cash used in investing activities   (2,007)   (2,036)
Cash flows from financing activities:          
New borrowings   17,319    5,916 
Debt repayments   (16,991)   (5,429)
Common stock repurchase program   (990)   (1,061)
Cash dividends   (855)   (811)
Exercise of common stock options   29    39 
Tax payments associated with equity-based compensation transactions   (28)   (39)
Other, net   (9)   (6)
Net cash used in financing activities   (1,525)   (1,391)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents       (6)
(Decrease) increase in cash, cash equivalents and restricted cash and cash equivalents   (195)   54 
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period   445    194 
Cash, cash equivalents and restricted cash and cash equivalents at end of period  $250   $248 

 

 

 

WASTE MANAGEMENT, INC.

 

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

 

Operating Revenues by Line of Business

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
Commercial  $1,464   $1,392   $4,300   $4,034 
Industrial   982    966    2,889    2,744 
Residential   875    846    2,595    2,483 
Other collection   193    187    556    521 
Total collection   3,514    3,391    10,340    9,782 
Landfill   1,261    1,197    3,678    3,442 
Transfer   594    562    1,719    1,602 
Recycling   366    420    1,094    1,341 
Other   678    614    1,944    1,785 
Intercompany (a)   (1,215)   (1,109)   (3,566)   (3,189)
Total  $5,198   $5,075   $15,209   $14,763 

 

Internal Revenue Growth

 

   Period-to-Period Change for the Three Months   Period-to-Period Change for the Nine Months 
   Ended September 30, 2023 vs. 2022   Ended September 30, 2023 vs. 2022 
       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  $215    5.0%            $699    5.6%        
Recycling and WM Renewable Energy(d) (e)   (108)   (23.3)             (399)   (26.8)          
Energy surcharge and mandated fees(e) (f)   (54)   (18.4)             (70)   (8.8)          
Total average yield(g)            $53    1.1%            $230    1.6%
Volume             27    0.5              94    0.6 
Internal revenue growth             80    1.6              324    2.2 
Acquisitions             50    0.9              156    1.0 
Divestitures             (1)                 (5)    
Foreign currency translation             (6)   (0.1)             (29)   (0.2)
Total            $123    2.4%            $446    3.0%

 

  

Period-to-Period Change for the Three Months

Ended September 30, 2023 vs. 2022

  

Period-to-Period Change for the Nine Months

Ended September 30, 2023 vs. 2022

 
   As a % of Related Business(b)   As a % of Related Business(b) 
   Yield   Volume(h)   Yield   Volume(h) 
Commercial   5.9%   0.1%   6.6%   (0.6)%
Industrial   6.1    (2.5)   7.7    (2.3)
Residential   6.3    (3.0)   6.3    (3.4)
Total collection   5.8    (1.2)   6.5    (1.4)
MSW   4.1    1.7    5.0    2.7 
Transfer   7.1    1.4    7.8    0.4 
Total collection and disposal   5.0%   0.7%   5.6%   0.6%

 

 

(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)Includes combined impact of commodity price variability in both our recycling and WM Renewable Energy businesses, as well as changes in fees in our recycling business.

(e)Beginning in 2023, Recycling and WM Renewable Energy includes changes in our revenue attributable to our WM Renewable Energy business. Previously these changes in revenues were included in fuel surcharges and mandated fees. We have revised our prior year results to conform with the current year presentation.

(f)Our energy surcharge was revised in the second quarter of 2023 to incorporate market prices for both diesel and compressed natural gas.

(g)The amounts reported herein represent the changes in our revenue attributable to average yield for the total Company.

(h)Workday adjusted volume impact.

 

 

WASTE MANAGEMENT, INC.

 

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
Supplemental Data                    
                     
Internalization of waste, based on disposal costs   69.0%   68.6%   68.8%   68.6%
                     
Landfill depletable tons (in millions)   31.6    32.1    92.7    93.9 
                     
Acquisition Summary(a)                    
                     
Gross annualized revenue acquired  $10   $132   $121   $135 
                     
Total consideration, net of cash acquired   20    210    138    216 
                     
Cash paid for acquisitions consummated during the period, net of cash acquired   23    197    134    202 
                     
Cash paid for acquisitions including contingent consideration and other items from prior periods, net of cash acquired   21    197    139    207 

  

Landfill Depletion and Accretion Expenses:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
Landfill depletion expense:                    
Cost basis of landfill assets  $155   $150   $453   $436 
Asset retirement costs   33    34    101    103 
Total landfill depletion expense(b)   188    184    554    539 
Accretion expense   32    29    97    84 
Landfill depletion and accretion expense  $220   $213   $651   $623 

 

 

(a)Represents amounts associated with business acquisitions consummated during the applicable period except where noted.

(b)The increase in landfill depletion for the nine months ended September 30, 2023, as compared with the prior year period, was primarily driven by the reopening of previously closed landfill in our East Tier.

 

 

 

WASTE MANAGEMENT, INC.

 

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions, Except Per Share Amounts)

(Unaudited)

 

   Three Months Ended September 30, 2023 
   Income from   Pre-tax   Tax   Net   Diluted Per 
   Operations   Income   Expense   Income(a)   Share Amount 
As reported amounts  $1,021   $872   $210   $663   $1.63 
Adjustment:                         
Business readiness costs for collective bargaining agreement negotiations   1    1        1     
As adjusted amounts  $1,022   $873   $210(b)  $664   $1.63 
Depreciation and amortization   519                     
Adjusted operating EBITDA  $1,541                     

 

   Three Months Ended September 30, 2022 
   Income from   Pre-tax   Tax   Net   Diluted Per 
   Operations   Income   Expense   Income(a)   Share Amount 
As reported amounts  $942   $828   $189   $639   $1.54 
Adjustment:                         
Enterprise resource planning system implementation-related costs   8    8    2    6    0.02 
As adjusted amounts  $950   $836   $191(b)  $645   $1.56 
Depreciation and amortization   503                     
Adjusted operating EBITDA  $1,453                     

 

 

(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 third quarter 2023 and 2022 adjusted effective tax rates were 24.1% and 22.8%, respectively.

 

 

 

WASTE MANAGEMENT, INC.

 

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions)

(Unaudited)

 

   Three Months Ended 
   September 30, 2023   September 30, 2022 
       As a % of       As a % of 
   Amount   Revenues   Amount   Revenues 
Adjusted SG&A Expenses and Adjusted SG&A Expenses Margin                    
                     
Operating revenues, as reported  $5,198        $5,075      
                     
SG&A expenses, as reported  $470    9.0%  $473    9.3%
Adjustments:                    
Business readiness costs for collective bargaining agreement negotiations   (1)              
Enterprise resource planning system implementation-related costs            (8)     
Adjusted SG&A expenses  $469    9.0%  $465    9.2%

 

2023 Projected Free Cash Flow Reconciliation(a)  Scenario 1   Scenario 2         
Net cash provided by operating activities  $4,500   $4,650           
Capital expenditures to support the business   (1,975)   (2,075)          
Proceeds from divestitures of businesses and other assets, net of cash divested   50    100           
Free cash flow without sustainability growth investments  $2,575   $2,675           
Capital expenditures - sustainability growth investments   (750)   (750)          
Free cash flow  $1,825   $1,925           

 

 

(a)The reconciliation includes two scenarios that illustrate our projected free cash flow range for 2023. 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 
   September 30, 2023   September 30, 2022 
   Amount   Change in
Adjusted
Operating
EBITDA Margin
   Amount   Change in
Adjusted
Operating
EBITDA Margin
 
Recycling commodity rebates  $143    0.9%  $209    1.3%
Accretion expense  $32    0.6%  $29    0.6%

 

   Nine Months Ended 
   September 30, 2023   September 30, 2022 
   Amount   Change in
Adjusted
Operating
EBITDA Margin
   Amount   Change in
Adjusted
Operating
EBITDA Margin
 
Recycling commodity rebates  $433    0.9%  $661    1.3%
Accretion expense  $97    0.6%  $84    0.6%

 

 

v3.23.3
Cover
Oct. 24, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Oct. 24, 2023
Entity File Number 1-12154
Entity Registrant Name Waste Management, Inc.
Entity Central Index Key 0000823768
Entity Tax Identification Number 73-1309529
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 800 Capitol Street
Entity Address, Address Line Two Suite 3000
Entity Address, City or Town Houston
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77002
City Area Code 713
Local Phone Number 512-6200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol WM
Security Exchange Name NYSE
Entity Emerging Growth Company false

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