Waste Management, Inc. (NYSE: WM) today announced that its Board of
Directors has approved a 2.7% increase in the planned quarterly dividend
rate, from $0.365 to $0.375 per share. On an annual basis, the per share
dividend increases from $1.46 to $1.50. This marks the eleventh
consecutive year that the Company has increased its planned quarterly
dividend. Each future quarterly dividend must be declared by its Board
of Directors prior to payment.
The Company also announced today that its Board of Directors has
authorized the purchase of up to $600 million of the Company’s common
stock. Future share repurchases will be made at the discretion of
management and will depend on a number of factors, including the
Company’s net earnings, financial condition, cash required for future
business plans and other factors deemed relevant.
David P. Steiner, Chief Executive Officer of Waste Management, Inc.,
said, “In 2013, we returned over $900 million to our shareholders in the
form of dividends and share repurchases. The increase in both the
planned dividend and share repurchase authorization for 2014
demonstrates our confidence that we will achieve our free cash flow
target. Free cash flow in 2014 is projected to exceed $1.3 billion
despite headwinds of approximately $125 million from cash taxes due to
the expiration of bonus depreciation and incentive compensation
payments.”(a)
The Board of Directors intends to declare the first quarter 2014
dividend in February, at which time the Company will announce the record
and payment dates for this dividend. It is expected that the first
increased dividend will be paid in March of 2014.
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 such forward-looking statements,
including statements regarding the declaration and payment of dividends
in 2014, future share repurchases, 2014 free cash flow, and 2014 cash
taxes and incentive compensation payments. 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,
commodity price fluctuations; increased competition; pricing actions;
failure to implement our optimization and growth initiatives and overall
business strategy; failure to successfully implement our restructuring
actions and/or failure of those actions to achieve the goals and cost
savings intended; business disruption and employee distraction resulting
from our restructuring; changes in our organizational structure and
workforce and resulting restructuring or impairment charges;
environmental and other regulations; disposal alternatives and waste
diversion; declining waste volumes; failure to develop and protect new
technology; 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, for additional information regarding these and
other risks and uncertainties applicable to our 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.
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(a)
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The Company provides a projection of free cash flow, which is a
non-GAAP measure, because it believes that it is indicative of our
ability to pay our quarterly dividends, repurchase common stock,
fund acquisitions and other investments and, in the absence of
refinancings, to repay our debt obligations. Free cash flow is not
intended to replace “Net cash provided by operating activities,”
which is the most comparable U.S. GAAP measure, and investors are
urged to take into account GAAP measures as well as non-GAAP
measures in evaluating the Company. We believe free cash flow
gives investors useful insight into how the Company views its
liquidity. Nonetheless, the use of free cash flow as a liquidity
measure has material limitations because it excludes certain
expenditures that are required or that we have 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 business (net of cash divested) and other
sales of assets. The Company’s definition of free cash flow may
not be comparable to similarly titled measures presented by other
companies.
The following reconciliation illustrates two scenarios that
show our projected free cash flow for 2014. 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.
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(Dollars in Millions, Unaudited)
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Scenario 1
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Scenario 2
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Net cash provided by operating activities
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$
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2,475
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$
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2,525
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Capital expenditures
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(1,250
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)
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(1,300
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)
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Proceeds from divestitures of businesses (net of cash divested)
and other sales of assets
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100
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175
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Projected Full Year 2014 Free Cash Flow
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$ 1,325
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$
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1,400
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ABOUT WASTE MANAGEMENT
Waste Management, Inc., based in Houston, Texas, is the leading provider
of comprehensive waste management services in North America. Through its
subsidiaries, the company provides collection, transfer, recycling and
resource recovery, and disposal services. It is also a leading
developer, operator and owner of waste-to-energy and 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.
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