EX-99.1 2 a19-13158_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

FOR IMMEDIATE RELEASE

 

 

 

 

Waste Management Announces Second Quarter Earnings

 

 

 

Strength of Collection and Disposal Business Drives Overall Revenue Growth of More Than 5%

 

Company Reaffirms Guidance

 

 

FOR MORE INFORMATION

 

Waste Management

 

Web site

www.wm.com

 

Analysts

Ed Egl

713.265.1656

eegl@wm.com

 

Media

Andy Izquierdo

832.710.5287

aizquierdo@wm.com

 

 

HOUSTON — July 25, 2019 Waste Management, Inc. (NYSE: WM) today announced financial results for its quarter ended June 30, 2019. Revenues for the second quarter of 2019 were $3.95 billion compared with $3.74 billion for the same 2018 period. Net income for the quarter was $381 million, or $0.89 per diluted share, compared with $499 million, or $1.15 per diluted share, for the second quarter of 2018.(a) On an adjusted basis, in the second quarter of 2019, net income was $470 million, or $1.11 per diluted share.(b) On an adjusted basis, in the second quarter of 2018, net income was $438 million, or $1.01 per diluted share.(b)

 

The Company’s adjusted second quarter of 2019 results exclude: a $0.15 per diluted share loss on the early extinguishment of debt, $0.04 per diluted share of non-cash charges to write-off certain assets, and $0.03 per diluted share related to the planned acquisition of Advanced Disposal Services, Inc.

 

The Company’s adjusted second quarter of 2018 results exclude a $0.07 per diluted share tax benefit related to income tax audit settlements and a net $0.07 per diluted share benefit primarily related to the gain on divestiture of an ancillary business.

 

“Our employees continued to produce outstanding results in the second quarter, underpinned by organic revenue growth in the collection and disposal business of more than 7%,” said Jim Fish, President and Chief Executive Officer of Waste Management.  “We leveraged growth in our collection and disposal business to expand operating EBITDA margins by 60 basis points.”

 

KEY HIGHLIGHTS FOR THE SECOND QUARTER OF 2019

 

Profitability

 

·      Total Company operating EBITDA was $1.11 billion for the second quarter of 2019, an increase of $6 million from the second quarter of 2018.(c)  On an adjusted basis, total Company operating EBITDA was $1.13 billion for the second quarter of 2019, an increase of $73 million, or 6.9%, from the second quarter of 2018.(b)

·      Operating EBITDA in the Company’s collection and disposal business increased $112 million, or 9.3%, in the second quarter of 2019 when compared to the second quarter of 2018.

 

Revenue Growth

 

·      In the second quarter of 2019, revenue growth was driven by strong yield and volume growth in the Company’s collection and disposal business, which contributed $230 million of incremental revenue.  This was partially offset by a $38 million year-over-year decline in revenue from the Company’s recycling line of business.

 


 

·      Core price for the second quarter of 2019 was 5.4%, compared to 5.3% in the second quarter of 2018.(d)

·      Internal revenue growth from yield for the collection and disposal business was 2.7% for the second quarter of 2019 versus 2.3% in the second quarter of 2018.

·      Collection and disposal business internal revenue growth from volume was 4.4% in the second quarter of 2019.  Total Company internal revenue growth from volume, which includes the Company’s recycling line of business, was 4.0% in the second quarter of 2019.

 

Recycling

 

·      Operating EBITDA in the Company’s recycling line of business improved by $6 million compared to the second quarter of 2018, despite a $38 million decline in revenue.   The Company was able to overcome pressure from a 33% year-over-year drop in recycling commodity prices by working to develop a sustainable business model that also meets customers’ environmental needs.

·      The Company now expects the recycling business to be a $0.01 to $0.02 per diluted share headwind in 2019 compared to 2018, due to continued expected weakness in recycling commodity prices.

 

Cost Management

 

·      As a percentage of revenue, operating expenses were 61.9% in the second quarter of both 2019 and 2018. On an adjusted basis, operating expenses were 61.5% for the second quarter of 2019.(b)

·      As a percentage of revenue, SG&A expenses were 9.9%, or 9.8% on an adjusted basis, in the second quarter of 2019 compared to 9.8% in the second quarter of 2018.(b)

 

Free Cash Flow & Capital Allocation

 

·      Net cash provided by operating activities was $1.01 billion in the second quarter of 2019, an increase of $35 million, or 3.6%, when compared to the second quarter of 2018.  The growth in net cash provided by operating activities was driven by operating EBITDA growth and the Company’s focus on improving working capital, partially offset by higher taxes and interest.

·      Capital expenditures were $578 million in the second quarter of 2019, a $142 million increase from the second quarter of 2018, due to an intentional focus on accelerating certain fleet and landfill spending to support the Company’s strong collection and disposal growth.

·      Free cash flow was $440 million in the second quarter of 2019 compared to $621 million in the second quarter of 2018.(b)  The decline in free cash flow was primarily driven by the increase in capital expenditures in the quarter attributable to year-over-year timing differences in fleet and landfill spending and a reduction in proceeds from divestitures.

·      The Company paid $217 million of dividends to shareholders and repurchased $180 million of its shares in the second quarter of 2019.

·      The Company spent $48 million on acquisitions of traditional solid waste businesses during the second quarter of 2019.

 

Taxes

 

·      The Company’s effective tax rate for the second quarter of 2019 was approximately 23.3%.

 

Fish concluded, “Through the first six months of 2019 we are on track to achieve our full-year goals.  In the second half of 2019, we expect that our collection and disposal business will continue to generate strong earnings and more than offset an anticipated decline in our

 

 


 

recycling business from depressed commodity prices.  Despite our updated expectation for a full-year recycling headwind of $0.01 to $0.02 per diluted share we are reaffirming our full-year 2019 guidance of adjusted earnings per diluted share of $4.28 to $4.38, adjusted operating EBITDA of $4.40 to $4.45 billion, and free cash flow of $2.025 to $2.075 billion.” (b)

 

 

 

 

 

 

(a)    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.”

 

(b)   Adjusted earnings per diluted share, adjusted net income, adjusted operating EBITDA, adjusted operating expenses, adjusted SG&A expenses 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.

 

(c)    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.

 

(d)   Core price consists of price increases net of rollbacks and fees, excluding the Company’s fuel surcharge. It 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.

 

The Company will host a conference call at 10 a.m. (Eastern) today to discuss the second quarter 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 Investor Relations 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 4598118 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 PM (Eastern) today through 5:00 PM (Eastern) on Thursday, August 8, 2019. 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 4598118.

 

ABOUT WASTE MANAGEMENT

Waste Management, based in Houston, Texas, is the leading provider of comprehensive waste management environmental services in North America. 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 or www.thinkgreen.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 statements regarding 2019 earnings per diluted share; 2019 operating EBITDA; 2019 free cash flow; and all statements regarding future performance of our collection and disposal business, recycling business or otherwise.  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, increased competition; pricing actions; 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 the

 

 


 

acquisition of Advanced Disposal Services, Inc. or other acquisitions; failure to obtain the results anticipated from the acquisition of Advanced Disposal Services, Inc. or other acquisitions; environmental and other regulations; commodity price fluctuations; international trade restrictions; disposal alternatives and waste diversion; declining waste volumes; failure to develop and protect new technology; failure of technology to perform as expected; preventing, detecting and addressing cybersecurity incidents; significant environmental or other incidents resulting in liabilities and brand damage; weakness in economic conditions; failure to obtain and maintain necessary permits; labor disruptions; impairment charges; and negative outcomes of  litigation or governmental proceedings.  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, in some instances, has presented adjusted earnings per diluted share, adjusted net income, adjusted operating EBTIDA, adjusted operating expenses, adjusted SG&A expenses and free cash flow, and has also presented projections of adjusted earnings per diluted share, adjusted operating EBITDA, and free cash flow; these 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) 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 and (ii) financial measures the Company uses in the management of its business.

 

The Company’s projected full year 2019 earnings per diluted share, and operating EBITDA are anticipated to exclude the effects of events or circumstances in 2019 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, including transaction costs related to the pending acquisition of Advanced Disposal Services, Inc. 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 adjusted projected full-year earnings per diluted share or operating EBITDA to the comparable GAAP measures.

 

The Company discusses 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 used herein to the most comparable GAAP measures are included in the accompanying schedules, with the exception of projected earnings per diluted share and projected 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

June 30,

 

Six Months Ended

June 30,

 

 

2019

 

2018

 

2019

 

2018

Operating revenues

 

$

3,946

 

 

$

3,739

 

 

$

7,642

 

 

$

7,250

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

2,443

 

 

2,313

 

 

4,741

 

 

4,497

 

Selling, general and administrative

 

391

 

 

365

 

 

800

 

 

738

 

Depreciation and amortization

 

409

 

 

384

 

 

775

 

 

731

 

Restructuring

 

 

 

1

 

 

2

 

 

3

 

(Gain) loss from divestitures, asset impairments and unusual items, net

 

7

 

 

(39

)

 

7

 

 

(42

)

 

 

3,250

 

 

3,024

 

 

6,325

 

 

5,927

 

Income from operations

 

696

 

 

715

 

 

1,317

 

 

1,323

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(100

)

 

(93

)

 

(196

)

 

(184

)

Loss on early extinguishment of debt

 

(84

)

 

 

 

(84

)

 

 

Equity in net losses of unconsolidated entities

 

(16

)

 

(13

)

 

(25

)

 

(20

)

Other, net

 

1

 

 

 

 

(53

)

 

1

 

 

 

(199

)

 

(106

)

 

(358

)

 

(203

)

Income before income taxes

 

497

 

 

609

 

 

959

 

 

1,120

 

Income tax expense

 

115

 

 

110

 

 

230

 

 

226

 

Consolidated net income

 

382

 

 

499

 

 

729

 

 

894

 

Less: Net income (loss) attributable to noncontrolling interests

 

1

 

 

 

 

1

 

 

(1

)

Net income attributable to Waste Management, Inc.

 

$

381

 

 

$

499

 

 

$

728

 

 

$

895

 

Basic earnings per common share

 

$

0.90

 

 

$

1.16

 

 

$

1.71

 

 

$

2.07

 

Diluted earnings per common share

 

$

0.89

 

 

$

1.15

 

 

$

1.70

 

 

$

2.06

 

Weighted average basic common shares outstanding

 

424.8

 

 

429.9

 

 

424.6

 

 

431.6

 

Weighted average diluted common shares outstanding

 

427.5

 

 

432.3

 

 

427.2

 

 

434.1

 

 


 

WASTE MANAGEMENT, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

2019

 

2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,250

 

 

$

61

 

Receivables, net

 

2,260

 

 

2,275

 

Other

 

326

 

 

309

 

Total current assets

 

4,836

 

 

2,645

 

Property and equipment, net

 

12,665

 

 

11,942

 

Goodwill

 

6,512

 

 

6,430

 

Other intangible assets, net

 

547

 

 

572

 

Other

 

1,426

 

 

1,061

 

Total assets

 

$

25,986

 

 

$

22,650

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable, accrued liabilities and deferred revenues

 

$

2,730

 

 

$

2,676

 

Current portion of long-term debt

 

116

 

 

432

 

Total current liabilities

 

2,846

 

 

3,108

 

Long-term debt, less current portion

 

12,623

 

 

9,594

 

Other

 

4,050

 

 

3,672

 

Total liabilities

 

19,519

 

 

16,374

 

Equity:

 

 

 

 

 

 

Waste Management, Inc. stockholders’ equity

 

6,466

 

 

6,275

 

Noncontrolling interests

 

1

 

 

1

 

Total equity

 

6,467

 

 

6,276

 

Total liabilities and equity

 

$

25,986

 

 

$

22,650

 

 


 

WASTE MANAGEMENT, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30, 

 

 

 

2019

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

Consolidated net income

 

$

729

 

$

894

 

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

775

 

731

 

Loss on early extinguishment of debt

 

84

 

 

Other

 

195

 

57

 

Change in operating assets and liabilities, net of effects of acquisitions and divestitures

 

117

 

102

 

Net cash provided by operating activities

 

1,900

 

1,784

 

Cash flows from investing activities:

 

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

(440)

 

(263)

 

Capital expenditures

 

(1,049)

 

(836)

 

Proceeds from divestitures of businesses and other assets (net of cash divested)

 

20

 

96

 

Other, net

 

(96)

 

(7)

 

Net cash used in investing activities

 

(1,565)

 

(1,010)

 

Cash flows from financing activities:

 

 

 

 

 

New borrowings

 

3,971

 

83

 

Debt repayments

 

(385)

 

(196)

 

Premiums paid on early extinguishment of debt

 

(84)

 

 

Net commercial paper borrowings (repayments)

 

(1,001)

 

443

 

Common stock repurchase program

 

(248)

 

(550)

 

Cash dividends

 

(440)

 

(406)

 

Exercise of common stock options

 

45

 

33

 

Tax payments associated with equity-based compensation transactions

 

(30)

 

(28)

 

Other, net

 

(6)

 

(26)

 

Net cash provided by (used in) financing activities

 

1,822

 

(647)

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents

 

2

 

(1)

 

Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents

 

2,159

 

126

 

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period

 

183

 

293

 

Cash, cash equivalents and restricted cash and cash equivalents at end of period

 

$

2,342

 

$

419

 

 


 

WASTE MANAGEMENT, INC.

 

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

 

Operating Revenues by Line of Business

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

Commercial

 

$

1,052

 

$

986

 

$

2,078

 

$

1,941

 

Residential

 

655

 

632

 

1,295

 

1,246

 

Industrial

 

744

 

708

 

1,424

 

1,345

 

Other

 

122

 

115

 

231

 

216

 

Total collection

 

2,573

 

2,441

 

5,028

 

4,748

 

Landfill

 

1,023

 

915

 

1,887

 

1,720

 

Transfer

 

474

 

437

 

886

 

812

 

Recycling

 

264

 

305

 

555

 

617

 

Other

 

445

 

439

 

876

 

866

 

Intercompany (a)

 

(833)

 

(798)

 

(1,590)

 

(1,513)

 

Total

 

$

3,946

 

$

3,739

 

$

7,642

 

$

7,250

 

 

Internal Revenue Growth

 

 

 

Period-to-Period Change for the

 

Period-to-Period Change for the

 

 

 

Three Months Ended
June 30, 2019 vs. 2018

 

Six Months Ended
June 30, 2019 vs. 2018

 

 

 

 

 

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

 

$

87

 

2.7

%

 

 

 

 

$

169

 

2.7

%

 

 

 

 

Recycling commodities

 

(41)

 

(14.2)

 

 

 

 

 

(66)

 

(11.3)

 

 

 

 

 

Fuel surcharges and mandated fees

 

2

 

1.1

 

 

 

 

 

7

 

2.3

 

 

 

 

 

Total average yield (d)

 

 

 

 

 

$

48

 

1.3

%

 

 

 

 

$

110

 

1.5

%

Volume

 

 

 

 

 

146

 

4.0

 

 

 

 

 

263

 

3.7

 

Internal revenue growth

 

 

 

 

 

194

 

5.3

 

 

 

 

 

373

 

5.2

 

Acquisitions

 

 

 

 

 

59

 

1.6

 

 

 

 

 

116

 

1.6

 

Divestitures

 

 

 

 

 

(40)

 

(1.2)

 

 

 

 

 

(82)

 

(1.2)

 

Foreign currency translation

 

 

 

 

 

(6)

 

(0.2)

 

 

 

 

 

(15)

 

(0.2)

 

Total

 

 

 

 

 

$

207

 

5.5

%

 

 

 

 

$

392

 

5.4

%

 

 

 

Period-to-Period Change for the

 

Period-to-Period Change for the

 

 

 

Three Months Ended June 30, 2019 vs. 2018

 

Six Months Ended June 30, 2019 vs. 2018

 

 

 

As a % of Related Business(b)

 

As a % of Related Business(b)

 

 

 

Yield

 

Volume

 

Yield

 

Volume(e)

 

Commercial

 

2.3

 %

2.7

 %

2.3

 %

2.5

 %

Industrial

 

4.2

 

1.2

 

4.2

 

2.1

 

Residential

 

3.3

 

(0.4

)

3.5

 

(0.5

)

Total collection

 

3.0

 

1.7

 

3.1

 

1.9

 

MSW

 

3.6

 

6.1

 

3.5

 

6.0

 

Transfer

 

3.4

 

6.5

 

3.1

 

7.3

 

Total collection and disposal

 

2.7

 

4.4

 

2.7

 

4.3

 

 


(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)

 

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

 

 

 

(e)

 

Workday adjusted volume impact.

 


 

WASTE MANAGEMENT, INC.

 

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

 

Free Cash Flow (a)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

Net cash provided by operating activities

 

$

1,010

 

$

975

 

$

1,900

 

$

1,784

 

Capital expenditures

 

(578)

 

(436)

 

(1,049)

 

(836)

 

Proceeds from divestitures of businesses and other assets (net of cash divested)

 

8

 

82

 

20

 

96

 

Free cash flow

 

$

440

 

$

621

 

$

871

 

$

1,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internalization of waste, based on disposal costs

 

66.6%

 

66.1%

 

66.4%

 

65.7%

 

 

 

 

 

 

 

 

 

 

 

Landfill amortizable tons (in millions)

 

32.5

 

29.7

 

60.4

 

55.9

 

 

 

 

 

 

 

 

 

 

 

Acquisition Summary (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross annualized revenue acquired

 

14

 

10

 

119

 

168

 

 

 

 

 

 

 

 

 

 

 

Total consideration , net of cash acquired

 

41

 

17

 

435

 

266

 

 

 

 

 

 

 

 

 

 

 

Cash paid for acquisitions consummated during the period, net of cash acquired

 

40

 

15

 

431

 

258

 

 

 

 

 

 

 

 

 

 

 

Cash paid for acquisitions including contingent consideration and other items from prior periods, net of cash acquired

 

48

 

21

 

442

 

269

 

 

 

 

 

 

 

 

 

 

 

Amortization, Accretion and Other Expenses for Landfills:

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

Landfill amortization expense:

 

 

 

 

 

 

 

 

 

Cost basis of landfill assets

 

$

133

 

$

113

 

$

243

 

$

213

 

Asset retirement costs

 

28

 

33

 

45

 

53

 

Total landfill amortization expense

 

161

 

146

 

288

 

266

 

Accretion and other related expense

 

25

 

25

 

50

 

49

 

Landfill amortization, accretion and other related expense

 

$

186

 

$

171

 

$

338

 

$

315

 

 

(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 Ended

 

 

 

 June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

Income from

 

Pre-tax

 

Tax

 

Net

 

Per Share

 

 

 

Operations

 

Income (a)

 

Expense

 

Income (b)

 

Amount

 

As reported amounts

 

$

696

 

$

496

 

$

115

 

$

381

 

$

0.89

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Loss on early extinguishment of debt

 

 

84

 

20

 

64

 

0.15

 

Non-cash charges to write-off certain assets

 

23

 

23

 

6

 

17

 

0.04

 

Advanced Disposal acquisition-related costs (c)

 

6

 

9

 

1

 

8

 

0.03

 

As adjusted amounts

 

$

725

 

$

612

 

$

142

 

$

470

 

$

1.11

 

Depreciation and amortization

 

409

 

 

 

 

 

 

 

 

 

Adjusted operating EBITDA

 

$

1,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

Income from

 

Pre-tax

 

Tax

 

Net

 

Per Share

 

 

 

Operations

 

Income

 

Expense

 

Income (b)

 

Amount

 

As reported amounts

 

$

715

 

$

609

 

$

110

 

$

499

 

$

1.15

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Benefit primarily related to the gain on divestiture of an ancillary business

 

(38)

 

(38)

 

(10)

 

(28)

 

(0.07)

 

Tax benefit related to income tax audit settlements

 

 

 

33

 

(33)

 

(0.07)

 

As adjusted amounts

 

$

677

 

$

571

 

$

133

 

$

438

 

$

1.01

 

Depreciation and amortization

 

384

 

 

 

 

 

 

 

 

 

Adjusted operating EBITDA

 

$

1,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019 Projected Free Cash Flow Reconciliation (d)

 

 

 

 

 

 

 

 

 

 

 

 

 

Scenario 1

 

Scenario 2

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

3,675

 

$

3,775

 

 

 

 

 

 

 

Capital expenditures

 

(1,750)

 

(1,750)

 

 

 

 

 

 

 

Proceeds from divestitures of businesses and other assets (net of cash divested)

 

100

 

50

 

 

 

 

 

 

 

Free cash flow

 

$

2,025

 

$

2,075

 

 

 

 

 

 

 

 

 


(a)    Pre-tax income excludes $1 million related to net income attributable to noncontrolling interests.

(b)    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.”

(c)     Includes impact of reducing our common stock repurchases in 2019 from planned levels due to the pending acquisition of Advanced Disposal Services, Inc. (“Advanced Disposal”).

(d)    The reconciliation includes two scenarios that illustrate our projected free cash flow range for 2019. 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.

 

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions, Except Per Share Amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

June 30, 2019

 

June 30, 2018

Adjusted Operating Expenses and Adjusted Operating Expenses Margin

 

Amount

 

As a % of
Revenues

 

Amount

 

As a % of
Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, as reported

 

 $

3,946

 

 

 

 

 

 $

3,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses, as reported

 

 $

2,443

 

 

61.9

%

 

 $

2,313

 

 

61.9

%

Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash charges to write-off certain assets

 

16

 

 

 

 

 

 

 

 

 

 

Adjusted operating expenses

 

 $

2,427

 

 

61.5

%

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30, 2019

 

June 30, 2018

Adjusted Selling, General & Administrative (SG&A) Expenses and
Adjusted SG&A Margin

 

Amount

 

As a % of
Revenues

 

Amount

 

As a % of
Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, as reported

 

 $

3,946

 

 

 

 

 

 $

3,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses, as reported

 

 $

391

 

 

9.9

%

 

 $

365

 

 

9.8

%

Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Disposal acquisition-related costs

 

6

 

 

 

 

 

 

 

 

 

 

Adjusted SG&A expenses

 

 $

385

 

 

9.8

%