Company Sees Double Digit Growth in Earnings and Net Cash Provided by
Operating Activities
Waste Management, Inc. (NYSE: WM) today announced financial results for
its quarter ended June 30, 2015. Revenues for the second quarter of 2015
were $3.32 billion compared with $3.56 billion for the same 2014 period.
Net income for the quarter was $274 million, or $0.60 per diluted share,
compared with net income of $210 million, or $0.45 per diluted share,
for the second quarter of 2014. On an as-adjusted basis, excluding
certain items, net income was $306 million, or $0.67 per diluted share,
in the second quarter of 2015, compared with $270 million, or $0.58 per
diluted share, in the second quarter of 2014.(b)
The Company’s as-adjusted second quarter 2015 results exclude a $0.07
per diluted share charge to operating expenses associated with resolving
the Company’s withdrawal liability from certain underfunded
multiemployer pension plans. The Company’s second quarter 2014 results
have been adjusted to exclude a negative impact of $0.15 per diluted
share, primarily related to the divestiture of operations in Puerto
Rico, and the earnings from businesses and assets divested in 2014,
which contributed $0.02 per diluted share to earnings in the second
quarter of 2014.(b)
David P. Steiner, President and Chief Executive Officer of Waste
Management, commented, “Our strong second quarter results reflect our
continued commitment to disciplined core price growth and cost controls.
After adjusting for the items noted above, each of our net income,
operating income and margin, operating EBITDA and margin, and earnings
per diluted share improved when compared to the second quarter of 2014,
despite year-over-year headwinds of $0.03 per diluted share from lower
recycling commodity prices and the unfavorable impact of foreign
currency fluctuations.(b)
“In the second quarter, we also saw improvement in our volumes
year-over-year and sequentially. In addition, commercial and industrial
new business revenue exceeded lost business revenue for the first time
in three years. We are encouraged by the volume performance as we
maintain our focus on more profitable volumes, and we expect them to
strengthen through the rest of 2015 and into 2016.
“Our net cash provided by operating activities and free cash flow were
very strong at $816 million and $579 million, respectively. Combined
with the proceeds from our 2014 divestitures, we are in a strong cash
position to improve our business and return cash to our shareholders.”
Steiner added, “To update our plans to deploy our excess cash, we
continue to seek accretive acquisitions in our solid waste business, and
we expect to reach agreements in the second half of this year to acquire
an additional $50 to $75 million of operating EBITDA. We expect to close
those acquisitions in 2016. In the second quarter, we repurchased $300
million of our outstanding shares and we returned $175 million to our
shareholders in the form of cash dividends. We currently anticipate that
we will repurchase an additional $300 million of our outstanding shares
in the third quarter of 2015. In the fourth quarter, and going forward,
we will continue to balance our acquisitions, share repurchases, and our
dividend to provide the maximum benefit for our shareholders while
maintaining a strong balance sheet.”
KEY HIGHLIGHTS FOR THE SECOND QUARTER 2015
-
Overall revenue declined by 6.9%, or $246 million, compared to the
second quarter of 2014. The Company saw a $54 million increase in
revenues from acquisitions and a $33 million increase in its
traditional solid waste business. The overall revenue decline stemmed
from a $193 million decline from divestitures, a $59 million decline
from lower recycling revenues, $45 million in lower fuel surcharge
revenues and $27 million in foreign currency fluctuations.
-
Core price, which consists of price increases and fees, other than the
Company’s fuel surcharge, net of rollbacks, was 4.1%, up from 4.0% in
the second quarter of 2014. (c) Internal revenue growth
from yield for collection and disposal operations was 1.7%.
-
Internal revenue growth from volume in the Company’s traditional solid
waste business declined 0.6% in the second quarter of 2015 versus a
decline of 2.3% in the second quarter of 2014, an improvement of 170
basis points. Sequentially, this was a 60 basis point improvement from
the 1.2% decline in the first quarter of 2015. Overall internal
revenue growth from volume declined 1.3% in the second quarter,
compared to the negative 3.0% in the first quarter of 2015, an
improvement of 170 basis points.
-
Average recycling commodity prices were approximately 13.0% lower in
the second quarter of 2015 compared with the prior year period.
Recycling volumes declined 5.7% in the second quarter. In total,
recycling operations negatively affected earnings by $0.02 per diluted
share when compared to the prior year period.
-
Operating expenses improved by $138 million compared to the prior year
period. Excluding divestitures and items excluded from the Company’s
as-adjusted results, operating expenses improved $56 million.(b)
Lower fuel and subcontractor costs, commodity rebates, and continued
route optimization drove the improvement. As a percent of revenue,
operating expenses were 63.6% in the second quarter of 2015, as
compared to 64.2% in the second quarter of 2014, an improvement of 60
basis points.
-
SG&A expenses improved by $31 million compared with the second quarter
of 2014. As a percent of revenue, SG&A expenses improved 20 basis
points to 9.7%. Excluding divestitures from the second quarter of
2014, SG&A expenses improved by $18 million and improved 40 basis
points as a percent of revenue compared with the second quarter of
2014.(b)
-
Net cash provided by operating activities was $816 million, compared
to $555 million in the second quarter of 2014, an improvement of $261
million driven by a $216 million reduction in cash taxes. Capital
expenditures were $296 million. The Company had $59 million of
divestiture proceeds in the quarter.
-
Free cash flow was $579 million in the second quarter of 2015, an
increase of $245 million when excluding free cash flow from operations
divested in 2014.(b)
-
The Company returned $475 million to shareholders, including $300
million in share repurchases and $175 million in the form of dividends.
-
The effective tax rate was approximately 29.6%. Adjusting for items
excluded from the Company’s as-adjusted results, the tax rate was
30.9%.(b) Lower taxes benefited earnings per diluted share
by $0.02 in the second quarter when compared to the second quarter of
2014, driven primarily by a reduction in deferred taxes and
utilization of state net operating losses.
Steiner concluded, “We are pleased with the strong results through the
first half of 2015. Combining the first half results with our outlook
for continued price and cost control discipline and improving volumes,
we are confident that the momentum we saw in the first half of the year
will continue in the second half of the year. We now expect that our
2015 adjusted earnings per diluted share should be at the high end of
our previously announced guidance of between $2.48 and $2.55, despite
negative headwinds to diluted earnings per share of between $0.07 and
$0.10 from recycling operations and about $0.04 from the impact of
foreign currency translation adjustments. We also expect to achieve the
upper end of our full year free cash flow guidance of between $1.4 and
$1.5 billion.” (b)
--------------------------------------------------------------------------------------------------------------
(a) For purposes of this press release, all references to “Net
loss” and “Net income” refer to the financial statement line items “Net
income (loss) attributable to Waste Management, Inc.” and “Net income
attributable to Waste Management, Inc.,” respectively.
(b) This press release contains a discussion of non-GAAP 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.
Accordingly, net income, earnings per diluted share, operating income
and margin, operating EBITDA and margin, operating expenses, SG&A
expenses, and our effective tax rate have been presented in certain
instances excluding items identified in the reconciliations provided.
The Company’s projected full year 2015 earnings per diluted share
is not based on GAAP net earnings per diluted share and are anticipated
to be adjusted to exclude the effects of events or circumstances in 2015
that are not representative or indicative of the Company’s results of
operations including the items excluded from our as-adjusted first and
second quarter results. Projected GAAP earnings per diluted share for
the full year would require inclusion of the projected impact of future
excluded items, including items that are not currently determinable, but
may be significant, such as asset impairments and one-time items,
charges, gains or losses from divestitures or litigation, or 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 adjusted projected full year
earnings per diluted share or projected earnings growth to a GAAP
earnings per diluted share projection.
The Company also discusses free cash flow and provides projections
of free cash flow. Free cash flow is a non-GAAP measure. 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 U.S. GAAP measure. However, the Company
believes free cash flow gives investors useful insight into how the
Company views its liquidity. Nevertheless, 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 (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, and therefore is
not subject to comparison.
The Company defines operating EBITDA as income from operations
before depreciation and amortization; this measure may not be comparable
to similarly titled measures reported by other companies. Management
uses this measure as an indicator of the Company’s operating performance
and ability to pay dividends, fund acquisitions, capital expenditures
and other investments and, in the absence of refinancing, to repay debt
obligations. Adjusted operating EBITDA is a non-GAAP measure and is not
intended to replace net income, income from operations or net cash
provided by operating activities.
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.
Non-GAAP measures should not be considered a substitute for financial
measures presented in accordance with GAAP, and investors are urged to
take into account GAAP measures as well as non-GAAP measures in
evaluating the Company.
(c) Core price is a performance metric used by management and is
based on certain historical assumptions to allow for comparability
between reporting periods.
The Company will host a conference call at 10:00 AM (Eastern) today to
discuss the second quarter 2015 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 64809894 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) Thursday, July 23,
2015 through 5:00 PM (Eastern) on Thursday, August 6, 2015. 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 64809894.
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 2015
earnings per diluted share; 2015 free cash flow; future results from
price and cost control discipline; volume trends and improvement;
execution, timing, closing and impact of future acquisitions; future
share repurchases; future recycling commodity prices; results from
recycling operations; and future foreign currency translation
adjustments. 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 such acquisitions; failure to obtain the results
anticipated from acquisitions; environmental and other regulations;
commodity price fluctuations; 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.
ABOUT WASTE MANAGEMENT
Waste Management, 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 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.
|
|
|
|
Waste Management, Inc.
|
Condensed Consolidated Statements of Operations
|
(In Millions, Except Per Share Amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
3,315
|
|
|
|
$
|
3,561
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Operating
|
|
|
|
2,163
|
|
|
|
|
2,301
|
|
Selling, general and administrative
|
|
|
|
322
|
|
|
|
|
353
|
|
Depreciation and amortization
|
|
|
|
322
|
|
|
|
|
339
|
|
Restructuring
|
|
|
|
4
|
|
|
|
|
1
|
|
(Income) expense from divestitures, asset impairments and unusual
items
|
|
|
|
2
|
|
|
|
|
35
|
|
|
|
|
|
2,813
|
|
|
|
|
3,029
|
|
Income from operations
|
|
|
|
502
|
|
|
|
|
532
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(95
|
)
|
|
|
|
(115
|
)
|
Loss on early extinguishment of debt
|
|
|
|
(2
|
)
|
|
|
|
-
|
|
Equity in net losses of unconsolidated entities
|
|
|
|
(15
|
)
|
|
|
|
(13
|
)
|
Other, net
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
|
|
(113
|
)
|
|
|
|
(130
|
)
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
389
|
|
|
|
|
402
|
|
Provision for income taxes
|
|
|
|
116
|
|
|
|
|
180
|
|
Consolidated net income
|
|
|
|
273
|
|
|
|
|
222
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
(1
|
)
|
|
|
|
12
|
|
Net income attributable to Waste Management, Inc.
|
|
|
$
|
274
|
|
|
|
$
|
210
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
|
$
|
0.60
|
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
$
|
0.60
|
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
Basic common shares outstanding
|
|
|
|
455.5
|
|
|
|
|
465.9
|
|
|
|
|
|
|
|
|
Diluted common shares outstanding
|
|
|
|
458.0
|
|
|
|
|
468.0
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
|
$
|
0.385
|
|
|
|
$
|
0.375
|
|
|
|
|
|
Waste Management, Inc.
|
Earnings Per Share
|
(In Millions, Except Per Share Amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
EPS Calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Waste Management, Inc.
|
|
|
$
|
274
|
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares outstanding at end of period
|
|
|
|
451.8
|
|
|
|
465.9
|
Effect of using weighted average common shares outstanding
|
|
|
|
3.7
|
|
|
|
-
|
Weighted average basic common shares outstanding
|
|
|
|
455.5
|
|
|
|
465.9
|
Dilutive effect of equity-based compensation awards and
|
|
|
|
|
|
|
other contingently issuable shares
|
|
|
|
2.5
|
|
|
|
2.1
|
Weighted average diluted common shares outstanding
|
|
|
|
458.0
|
|
|
|
468.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
|
$
|
0.60
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
$
|
0.60
|
|
|
$
|
0.45
|
|
|
|
|
Waste Management, Inc.
|
Condensed Consolidated Statements of Operations
|
(In Millions, Except Per Share Amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
6,355
|
|
|
|
$
|
6,957
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Operating
|
|
|
|
4,109
|
|
|
|
|
4,533
|
|
Selling, general and administrative
|
|
|
|
670
|
|
|
|
|
728
|
|
Depreciation and amortization
|
|
|
|
614
|
|
|
|
|
656
|
|
Restructuring
|
|
|
|
5
|
|
|
|
|
2
|
|
(Income) expense from divestitures, asset impairments and unusual
items
|
|
|
|
15
|
|
|
|
|
37
|
|
|
|
|
|
5,413
|
|
|
|
|
5,956
|
|
Income from operations
|
|
|
|
942
|
|
|
|
|
1,001
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(199
|
)
|
|
|
|
(236
|
)
|
Loss on early extinguishment of debt
|
|
|
|
(552
|
)
|
|
|
|
-
|
|
Equity in net losses of unconsolidated entities
|
|
|
|
(23
|
)
|
|
|
|
(22
|
)
|
Other, net
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
|
|
|
|
(775
|
)
|
|
|
|
(263
|
)
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
167
|
|
|
|
|
738
|
|
Provision for income taxes
|
|
|
|
25
|
|
|
|
|
279
|
|
Consolidated net income
|
|
|
|
142
|
|
|
|
|
459
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
(3
|
)
|
|
|
|
21
|
|
Net income attributable to Waste Management, Inc.
|
|
|
$
|
145
|
|
|
|
$
|
438
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
|
$
|
0.32
|
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
$
|
0.32
|
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
Basic common shares outstanding
|
|
|
|
457.0
|
|
|
|
|
465.6
|
|
|
|
|
|
|
|
|
Diluted common shares outstanding
|
|
|
|
459.6
|
|
|
|
|
467.5
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
|
$
|
0.77
|
|
|
|
$
|
0.75
|
|
|
|
|
|
Waste Management, Inc.
|
Earnings Per Share
|
(In Millions, Except Per Share Amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
EPS Calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Waste Management, Inc.
|
|
|
$
|
145
|
|
|
$
|
438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares outstanding at end of period
|
|
|
|
451.8
|
|
|
|
465.9
|
|
Effect of using weighted average common shares outstanding
|
|
|
|
5.2
|
|
|
|
(0.3
|
)
|
Weighted average basic common shares outstanding
|
|
|
|
457.0
|
|
|
|
465.6
|
|
Dilutive effect of equity-based compensation awards and
|
|
|
|
|
|
|
other contingently issuable shares
|
|
|
|
2.6
|
|
|
|
1.9
|
|
Weighted average diluted common shares outstanding
|
|
|
|
459.6
|
|
|
|
467.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
|
$
|
0.32
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
$
|
0.32
|
|
|
$
|
0.94
|
|
|
|
|
|
Waste Management, Inc.
|
Condensed Consolidated Balance Sheets
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
273
|
|
|
$
|
1,307
|
Receivables, net
|
|
|
|
1,953
|
|
|
|
1,937
|
Other
|
|
|
|
327
|
|
|
|
397
|
Total current assets
|
|
|
|
2,553
|
|
|
|
3,641
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
10,665
|
|
|
|
10,657
|
Goodwill
|
|
|
|
5,880
|
|
|
|
5,740
|
Other intangible assets, net
|
|
|
|
512
|
|
|
|
440
|
Other assets
|
|
|
|
968
|
|
|
|
934
|
Total assets
|
|
|
$
|
20,578
|
|
|
$
|
21,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable, accrued liabilities, and
|
|
|
|
|
|
|
deferred revenues
|
|
|
$
|
2,281
|
|
|
$
|
2,395
|
Current portion of long-term debt
|
|
|
|
196
|
|
|
|
1,090
|
Total current liabilities
|
|
|
|
2,477
|
|
|
|
3,485
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
|
8,910
|
|
|
|
8,345
|
Other liabilities
|
|
|
|
3,784
|
|
|
|
3,693
|
Total liabilities
|
|
|
|
15,171
|
|
|
|
15,523
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Waste Management, Inc. stockholders' equity
|
|
|
|
5,386
|
|
|
|
5,866
|
Noncontrolling interests
|
|
|
|
21
|
|
|
|
23
|
Total equity
|
|
|
|
5,407
|
|
|
|
5,889
|
Total liabilities and equity
|
|
|
$
|
20,578
|
|
|
$
|
21,412
|
|
|
|
|
|
|
|
Waste Management, Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(In Millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Consolidated net income
|
|
|
$
|
142
|
|
|
|
$
|
459
|
|
Adjustments to reconcile consolidated net income to net cash
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
614
|
|
|
|
|
656
|
|
Loss on early extinguishment of debt
|
|
|
|
552
|
|
|
|
|
-
|
|
Other
|
|
|
|
73
|
|
|
|
|
78
|
|
Change in operating assets and liabilities, net of effects of
|
|
|
|
|
|
|
acquisitions and divestitures
|
|
|
|
(66
|
)
|
|
|
|
(54
|
)
|
Net cash provided by operating activities
|
|
|
|
1,315
|
|
|
|
|
1,139
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
(454
|
)
|
|
|
|
(26
|
)
|
Capital expenditures
|
|
|
|
(529
|
)
|
|
|
|
(474
|
)
|
Proceeds from divestitures of businesses
|
|
|
|
|
|
|
and other assets (net of cash divested)
|
|
|
|
78
|
|
|
|
|
266
|
|
Investments in unconsolidated entities
|
|
|
|
(11
|
)
|
|
|
|
(11
|
)
|
Net receipts from restricted trust and escrow
|
|
|
|
|
|
|
accounts, and other
|
|
|
|
37
|
|
|
|
|
(49
|
)
|
Net cash used in investing activities
|
|
|
|
(879
|
)
|
|
|
|
(294
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
New borrowings
|
|
|
|
1,866
|
|
|
|
|
1,500
|
|
Debt repayments
|
|
|
|
(2,181
|
)
|
|
|
|
(1,925
|
)
|
Premiums paid on early extinguishment of debt
|
|
|
|
(555
|
)
|
|
|
|
-
|
|
Common stock repurchases
|
|
|
|
(300
|
)
|
|
|
|
-
|
|
Cash dividends
|
|
|
|
(351
|
)
|
|
|
|
(349
|
)
|
Exercise of common stock options
|
|
|
|
47
|
|
|
|
|
31
|
|
Other, net
|
|
|
|
5
|
|
|
|
|
(23
|
)
|
Net cash used in financing activities
|
|
|
|
(1,469
|
)
|
|
|
|
(766
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
(1,034
|
)
|
|
|
|
79
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
1,307
|
|
|
|
|
58
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
273
|
|
|
|
$
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waste Management, Inc.
|
Summary Data Sheet
|
(Dollar Amounts in Millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
|
|
|
|
2015
|
|
|
2015
|
|
|
2014
|
|
|
|
Operating Revenues by Lines of Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collection
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
$
|
837
|
|
|
|
$
|
820
|
|
|
|
$
|
856
|
|
|
|
|
Residential
|
|
|
|
631
|
|
|
|
|
612
|
|
|
|
|
643
|
|
|
|
|
Industrial
|
|
|
|
582
|
|
|
|
|
509
|
|
|
|
|
574
|
|
|
|
|
Other
|
|
|
|
91
|
|
|
|
|
76
|
|
|
|
|
88
|
|
|
|
|
Total Collection
|
|
|
|
2,141
|
|
|
|
|
2,017
|
|
|
|
|
2,161
|
|
|
|
|
Landfill
|
|
|
|
758
|
|
|
|
|
635
|
|
|
|
|
732
|
|
|
|
|
Transfer
|
|
|
|
362
|
|
|
|
|
308
|
|
|
|
|
357
|
|
|
|
|
Wheelabrator
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
206
|
|
|
|
|
Recycling
|
|
|
|
299
|
|
|
|
|
282
|
|
|
|
|
351
|
|
|
|
|
Other
|
|
|
|
374
|
|
|
|
|
333
|
|
|
|
|
396
|
|
|
|
|
Intercompany (a)
|
|
|
|
(619
|
)
|
|
|
|
(535
|
)
|
|
|
|
(642
|
)
|
|
|
|
Operating revenues
|
|
|
$
|
3,315
|
|
|
|
$
|
3,040
|
|
|
|
$
|
3,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
June 30, 2015
|
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of Change in Year Over Year
Revenues
|
|
|
Amount
|
|
|
As a % of Total Company
|
|
|
Amount
|
|
|
As a % of Total Company
|
Average yield (i)
|
|
|
$
|
(36
|
)
|
|
|
|
-1.1
|
%
|
|
|
$
|
60
|
|
|
|
|
1.7
|
%
|
Volume
|
|
|
|
(44
|
)
|
|
|
|
-1.3
|
%
|
|
|
|
(51
|
)
|
|
|
|
-1.4
|
%
|
Internal revenue growth
|
|
|
|
(80
|
)
|
|
|
|
-2.4
|
%
|
|
|
|
9
|
|
|
|
|
0.3
|
%
|
Acquisition
|
|
|
|
54
|
|
|
|
|
1.6
|
%
|
|
|
|
54
|
|
|
|
|
1.5
|
%
|
Divestitures
|
|
|
|
(193
|
)
|
|
|
*
|
|
|
|
|
(14
|
)
|
|
|
|
-0.4
|
%
|
Foreign currency translation
|
|
|
|
(27
|
)
|
|
|
|
-0.8
|
%
|
|
|
|
(14
|
)
|
|
|
|
-0.4
|
%
|
|
|
|
$
|
(246
|
)
|
|
|
|
-6.9
|
%
|
|
|
$
|
35
|
|
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
As a % of Related Business
|
|
|
Amount
|
|
|
As a % of Related Business
|
(i) Average yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collection and disposal
|
|
|
$
|
49
|
|
|
|
|
1.7
|
%
|
|
|
$
|
66
|
|
|
|
|
2.3
|
%
|
Recycling commodities
|
|
|
|
(40
|
)
|
|
|
|
-11.6
|
%
|
|
|
|
(13
|
)
|
|
|
|
-3.6
|
%
|
Electricity
|
|
|
|
-
|
|
|
|
|
0.0
|
%
|
|
|
|
2
|
|
|
|
|
3.1
|
%
|
Fuel surcharges and mandated fees
|
|
|
|
(45
|
)
|
|
|
|
-25.0
|
%
|
|
|
|
5
|
|
|
|
|
2.9
|
%
|
Total
|
|
|
$
|
(36
|
)
|
|
|
|
-1.1
|
%
|
|
|
$
|
60
|
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Free Cash Flow Analysis (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
816
|
|
|
|
$
|
555
|
|
|
|
$
|
1,315
|
|
|
|
$
|
1,139
|
|
Capital expenditures
|
|
|
|
(296
|
)
|
|
|
|
(208
|
)
|
|
|
|
(529
|
)
|
|
|
|
(474
|
)
|
Proceeds from divestitures of businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and other assets (net of cash divested)
|
|
|
|
59
|
|
|
|
|
100
|
|
|
|
|
78
|
|
|
|
|
266
|
|
Free cash flow
|
|
|
$
|
579
|
|
|
|
$
|
447
|
|
|
|
$
|
864
|
|
|
|
$
|
931
|
|
*
|
|
Percentage change does not provide a meaningful comparison.
|
|
|
|
(a)
|
|
Intercompany revenues between lines of business are eliminated
within the Condensed Consolidated Financial Statements
|
|
|
included herein.
|
|
|
|
(b)
|
|
The summary of free cash flows 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.
|
|
|
|
|
|
|
|
Waste Management, Inc. Summary Data Sheet (Dollar
Amounts in Millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2015
|
|
|
2014
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
273
|
|
|
|
$
|
277
|
|
|
|
$
|
137
|
|
|
|
|
|
|
|
|
|
|
|
Debt-to-total capital ratio:
|
|
|
|
|
|
|
|
|
|
Long-term indebtedness, including current
|
|
|
|
|
|
|
|
|
|
portion
|
|
|
$
|
9,106
|
|
|
|
$
|
9,207
|
|
|
|
$
|
9,797
|
|
Total equity
|
|
|
|
5,407
|
|
|
|
|
5,575
|
|
|
|
|
6,147
|
|
Total capital
|
|
|
$
|
14,513
|
|
|
|
$
|
14,782
|
|
|
|
$
|
15,944
|
|
|
|
|
|
|
|
|
|
|
|
Debt-to-total capital
|
|
|
|
62.7
|
%
|
|
|
|
62.3
|
%
|
|
|
|
61.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Capitalized interest
|
|
|
$
|
4
|
|
|
|
$
|
4
|
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition Summary (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross annualized revenue acquired
|
|
|
$
|
9
|
|
|
|
$
|
244
|
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
Total consideration
|
|
|
$
|
13
|
|
|
|
$
|
465
|
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for acquisitions
|
|
|
$
|
9
|
|
|
|
$
|
445
|
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
Other Operational Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internalization of waste, based on disposal costs
|
|
|
|
66.4
|
%
|
|
|
|
64.3
|
%
|
|
|
|
67.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Total landfill disposal volumes (tons in millions)
|
|
|
|
25.4
|
|
|
|
|
20.9
|
|
|
|
|
24.6
|
|
Total waste-to-energy disposal volumes (tons in millions)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1.9
|
|
Total disposal volumes (tons in millions)
|
|
|
|
25.4
|
|
|
|
|
20.9
|
|
|
|
|
26.5
|
|
|
|
|
|
|
|
|
|
|
|
Active landfills
|
|
|
|
254
|
|
|
|
|
254
|
|
|
|
|
262
|
|
|
|
|
|
|
|
|
|
|
|
Landfills reporting volume
|
|
|
|
236
|
|
|
|
|
236
|
|
|
|
|
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization, Accretion and Other
Expenses for
|
|
|
|
|
|
|
|
|
|
Landfills Included in Operating Groups:
|
|
|
|
|
|
|
|
|
|
Landfill amortization expense -
|
|
|
|
|
|
|
|
|
|
Cost basis of landfill assets
|
|
|
$
|
90.2
|
|
|
|
$
|
72.4
|
|
|
|
$
|
87.9
|
|
Asset retirement costs
|
|
|
|
20.8
|
|
|
|
|
16.0
|
|
|
|
|
15.7
|
|
Total landfill amortization expense (b) (c)
|
|
|
|
111.0
|
|
|
|
|
88.4
|
|
|
|
|
103.6
|
|
Accretion and other related expense
|
|
|
|
19.0
|
|
|
|
|
18.4
|
|
|
|
|
18.6
|
|
Landfill amortization, accretion and other related expense
|
|
|
$
|
130.0
|
|
|
|
$
|
106.8
|
|
|
|
$
|
122.2
|
|
|
|
|
(a)
|
|
Represents amounts associated with business acquisitions
consummated during the indicated periods except for Cash paid for
acquisitions, which may include cash payments for business
acquisitions consummated in prior quarters.
|
|
|
|
(b)
|
|
The quarter ended June 30, 2015 as compared to the quarter ended
March 31, 2015 reflects an increase in amortization expense of
approximately $22.6 million primarily due to changes in landfill
estimates identified in both quarters and by an increase in
volumes primarily due to seasonality.
|
|
|
|
(c)
|
|
The quarter ended June 30, 2015 as compared to the quarter ended
June 30, 2014 reflects an increase in amortization expense of
approximately $7.4 million primarily due to changes in landfill
estimates identified in both quarters.
|
|
Waste Management, Inc. Reconciliation of Certain
Non-GAAP Measures (Dollars In Millions, Except Per Share
Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, 2015
|
|
Adjusted Net Income and Earnings Per Diluted Share
|
|
|
After-Tax Amount
|
|
|
Tax (Expense)/ Benefit
|
|
|
Per Share Amount
|
|
Net Income and Diluted EPS, as reported
|
|
|
$
|
274
|
|
|
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Net Income and Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
Charges associated with withdrawal from certain underfunded
multiemployer pension plans
|
|
|
|
32
|
|
|
|
23
|
|
|
|
|
0.07
|
|
|
Net Income and Diluted EPS, as adjusted
|
|
|
$
|
306
|
|
|
|
|
|
|
$
|
0.67
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, 2014
|
|
Adjusted Net Income and Earnings Per Diluted Share
|
|
|
After-Tax Amount
|
|
|
Tax (Expense)/ Benefit
|
|
|
Per Share Amount
|
|
Net Income and Diluted EPS, as reported
|
|
|
$
|
210
|
|
|
|
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Net Income and Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
Asset impairments and unusual items
|
|
|
|
67
|
|
|
|
(29
|
)
|
|
|
|
|
Partial withdrawal from multiemployer pension plans
|
|
|
|
2
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
69
|
|
|
|
|
|
|
|
0.15
|
|
|
Net Income and Diluted EPS, as adjusted
|
|
|
$
|
279
|
|
|
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Further Adjustment to Net Income and Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
Earnings from businesses and assets divested in 2014 (b)
|
|
|
|
(9
|
)
|
|
|
(5
|
)
|
|
|
|
(0.02
|
)
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Further Adjusted Net Income and Diluted EPS
|
|
|
$
|
270
|
|
|
|
|
|
|
$
|
0.58
|
|
(a)
|
|
|
|
(a)
|
|
Second quarter 2015 as-adjusted earnings per diluted share increased
$0.09, or almost 16%, as compared with the second quarter of 2014
results adjusted to exclude the earnings from businesses and assets
divested in 2014.
|
(b)
|
|
Primarily includes the divestiture of our waste-to-energy business
and other solid waste assets.
|
|
|
|
|
|
|
|
|
|
|
Waste Management, Inc. Reconciliation of Certain
Non-GAAP Measures (Dollars In Millions, Except Per Share
Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2015
|
Adjusted Tax Expense Reconciliation and Effective Tax Rate
|
|
|
Pre-Tax Income
|
|
|
Tax Expense
|
|
|
Effective Tax Rate (a)
|
|
|
|
|
|
|
|
|
|
|
As reported amounts
|
|
|
$
|
389
|
|
|
|
$
|
116
|
|
|
|
29.6
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Tax Expense:
|
|
|
|
|
|
|
|
|
|
Charges associated with withdrawal from certain underfunded
multiemployer pension plans
|
|
|
|
55
|
|
|
|
|
23
|
|
|
|
|
As adjusted amounts
|
|
|
$
|
444
|
|
|
|
$
|
139
|
|
|
|
30.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
June 30,
|
|
|
|
Adjusted Operating Expenses and Adjusted Operating Expenses as
a Percent of Revenues
|
|
|
2015
|
|
|
2014
|
|
|
|
As reported:
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
3,315
|
|
|
|
$
|
3,561
|
|
|
|
|
Operating expenses
|
|
|
$
|
2,163
|
|
|
|
$
|
2,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Operating revenues - Businesses and assets divested in 2014
|
|
|
$
|
-
|
|
|
|
$
|
(189
|
)
|
|
|
|
Operating expenses - Withdrawal from multiemployer pension plans
|
|
|
$
|
(55
|
)
|
|
|
$
|
(3
|
)
|
|
|
|
Operating expenses - Businesses and assets divested in 2014
|
|
|
$
|
-
|
|
|
|
$
|
(134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted:
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
3,315
|
|
|
|
$
|
3,372
|
|
|
|
|
Operating expenses (b)
|
|
|
$
|
2,108
|
|
|
|
$
|
2,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Expenses as a Percent of Revenues (b)
|
|
|
|
63.6
|
%
|
|
|
|
64.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Projected Free Cash Flow Reconciliation (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Scenario 1
|
|
|
Scenario 2
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
2,600
|
|
|
|
$
|
2,800
|
|
|
|
|
Capital expenditures
|
|
|
|
(1,200
|
)
|
|
|
|
(1,300
|
)
|
|
|
|
Proceeds from divestitures of businesses
|
|
|
|
|
|
|
|
|
|
and other assets (net of cash divested)
|
|
|
|
50
|
|
|
|
|
100
|
|
|
|
|
Free Cash Flow
|
|
|
$
|
1,450
|
|
|
|
$
|
1,600
|
|
|
|
|
|
|
|
(a)
|
|
The Company calculates its effective tax rate based on actual
dollars. Rounding differences occurred when the effective tax rate
was calculated using Pre-tax Income and Tax Expense amounts included
in the table above, as these items have been rounded in millions.
|
(b)
|
|
Excluding the operating expense associated with withdrawal from
certain underfunded multiemployer pension plans in the second
quarter of 2015 and 2014, as well as operating expense associated
with businesses and assets divested in 2014, the adjusted operating
expense in the second quarter of 2015 improved $56 million, or 60
basis points, to 63.6% of revenues as compared with prior year.
|
(c)
|
|
The reconciliation includes two scenarios that illustrate our
projected free cash flow range for 2015. 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 (Dollars In Millions, Except Per Share
Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, 2015
|
|
Adjusted Income from Operations, Adjusted Operating EBITDA and
each as a percent of Revenues
|
|
|
Amount
|
|
|
|
As a % of Revenues
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues, as reported
|
|
|
$
|
3,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations, as reported
|
|
|
$
|
502
|
|
|
|
|
|
|
Adjustments to Income from Operations:
|
|
|
|
|
|
|
|
|
Charges associated with withdrawal from certain underfunded
multiemployer pension plans (a)
|
|
|
|
55
|
|
|
|
|
|
|
Adjusted Income from Operations
|
|
|
|
557
|
|
(a)
|
|
|
16.8
|
%
|
(a)
|
Depreciation and amortization
|
|
|
|
322
|
|
|
|
|
|
|
Adjusted Operating EBITDA
|
|
|
$
|
879
|
|
(b)
|
|
|
26.5
|
%
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, 2014
|
|
Adjusted Income from Operations, Adjusted Operating EBITDA and
each as a percent of Adjusted Revenues
|
|
|
Amount
|
|
|
|
As a % of Revenues
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues, as reported
|
|
|
$
|
3,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Operating Revenues:
|
|
|
|
|
|
|
|
|
Divested businesses and assets in 2014
|
|
|
|
(189
|
)
|
|
|
|
|
|
Adjusted Operating Revenues
|
|
|
$
|
3,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations, as reported
|
|
|
$
|
532
|
|
|
|
|
|
|
Adjustments to Income from Operations:
|
|
|
|
|
|
|
|
|
Asset impairments and unusual items
|
|
|
|
36
|
|
|
|
|
|
|
Partial withdrawal from multiemployer pension plans
|
|
|
|
3
|
|
|
|
|
|
|
Businesses and assets divested in 2014
|
|
|
|
(26
|
)
|
|
|
|
|
|
Adjusted Income from Operations
|
|
|
$
|
545
|
|
(a)
|
|
|
16.2
|
%
|
(a)
|
Depreciation and amortization (c)
|
|
|
|
323
|
|
|
|
|
|
|
Adjusted Operating EBITDA
|
|
|
$
|
868
|
|
(b)
|
|
|
25.7
|
%
|
(b)
|
|
|
|
(a)
|
|
Adjusted income from operations for the second quarter of 2015
increased $12 million, or 60 basis points as a percent of revenues,
as compared with adjusted results for the same period prior year.
|
(b)
|
|
Adjusted operating EBITDA increased $11 million, or 80 basis points
as a percent of revenues, compared with adjusted results for the
same period prior year.
|
(c)
|
|
Depreciation and amortization has been adjusted to exclude amounts
attributed to businesses and assets divested in 2014. See page 12
for a reconciliation.
|
|
Waste Management, Inc. Supplemental Data - Q2 2014
Impact of Divestitures (Dollars In Millions, Except Per
Share Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
The following table presents certain financial measures that have
been adjusted to exclude amounts attributed to divestitures during
2014, primarily our waste-to-energy business and other solid waste
assets. These pro-forma 2014 financial measures are non-GAAP
measures and should not be considered a substitute for the
as-reported amounts. We have included this information because the
Company had significant divestitures in 2014; accordingly,
management believes that presenting certain financial measures as
adjusted to exclude amounts attributed to divested operations and
assets will provide investors with a more meaningful comparison to
2015 results.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended June 30, 2014
|
|
Selected Financial Information
|
|
Results
|
|
|
LESS: Amounts Attributed to
Divestitures
|
|
|
Pro-Forma
|
|
Operating Revenues
|
|
$
|
3,561
|
|
|
$
|
189
|
|
|
$
|
3,372
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses (a)
|
|
$
|
2,298
|
|
|
$
|
134
|
|
|
$
|
2,164
|
|
|
|
|
|
|
|
|
|
|
|
SG&A Expenses
|
|
$
|
353
|
|
|
$
|
13
|
|
|
$
|
340
|
(b)
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
$
|
339
|
|
|
$
|
16
|
|
|
$
|
323
|
|
|
|
|
|
|
|
|
|
|
|
Income From Operations (a)
|
|
$
|
571
|
|
|
$
|
26
|
|
|
$
|
545
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA (a)
|
|
$
|
910
|
|
|
$
|
42
|
|
|
$
|
868
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (a)
|
|
$
|
279
|
|
|
$
|
9
|
|
|
$
|
270
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Diluted Share (a)
|
|
$
|
0.60
|
|
|
$
|
0.02
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
$
|
555
|
|
|
$
|
16
|
|
|
$
|
539
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
$
|
208
|
|
|
$
|
3
|
|
|
$
|
205
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from Divestitures
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
|
$
|
447
|
|
|
$
|
113
|
|
|
$
|
334
|
(c)
|
|
|
|
(a)
|
|
These amounts have been adjusted for items excluded from the
Company's as-adjusted results in the second quarter of 2014. For a
reconciliation of these adjusted amounts to the most comparable
GAAP measure, please see: operating expense on page 10; income
from operations and operating EBITDA on page 11 and net income and
earnings per diluted share on page 9.
|
(b)
|
|
As-reported SG&A expenses for the second quarter of 2015 were $322
million. As a result, after excluding divestitures from the second
quarter of 2014, SG&A expenses improved by $18 million, or 40 basis
points, to 9.7% of revenues, as compared with the prior year period.
|
(c)
|
|
Free cash flow was $579 million in the second quarter of 2015.
Excluding estimated free cash flow from businesses and assets
divested in 2014, free cash flow improved $245 million when compared
with the prior year period. Please see note (b) to the earnings
press release for a definition and additional information regarding
our use of this non-GAAP measure.
|
|
Waste Management, Inc. Supplemental Data - 2014
Impact of Divestitures by Quarter (Dollars In Millions,
Except Per Share Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents certain financial results attributed to
divestitures during 2014, primarily our waste-to-energy business and
other solid waste assets. We have included this information because
the Company had significant divestitures in 2014; accordingly,
management believes that providing this additional detail regarding
prior financial results attributed to divested operations and assets
will help investors understand the Company’s 2015 financial
projections and provide investors with more meaningful comparisons
to 2015 results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2014
|
|
Q2 2014
|
|
Q3 2014
|
|
Q4 2014
|
|
Year 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Operating Revenues
|
|
|
$
|
253
|
|
|
$
|
218
|
|
|
$
|
204
|
|
|
$
|
177
|
|
|
$
|
852
|
|
Intercompany Operating Revenues
|
|
|
|
(35
|
)
|
|
|
(29
|
)
|
|
|
(28
|
)
|
|
|
(26
|
)
|
|
|
(118
|
)
|
Net Operating Revenues
|
|
|
$
|
218
|
|
|
$
|
189
|
|
|
$
|
176
|
|
|
$
|
151
|
|
|
$
|
734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
$
|
155
|
|
|
$
|
134
|
|
|
$
|
113
|
|
|
$
|
93
|
|
|
$
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A Expenses
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations
|
|
|
$
|
36
|
|
|
$
|
26
|
|
|
$
|
51
|
|
|
$
|
51
|
|
|
$
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA (a)
|
|
|
$
|
51
|
|
|
$
|
42
|
|
|
$
|
55
|
|
|
$
|
52
|
|
|
$
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
$
|
16
|
|
|
$
|
9
|
|
|
$
|
25
|
|
|
$
|
30
|
|
|
$
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Diluted Share
|
|
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
|
$
|
57
|
|
|
$
|
16
|
|
|
$
|
45
|
|
|
$
|
22
|
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from Divestitures
|
|
|
$
|
166
|
|
|
$
|
100
|
|
|
$
|
53
|
|
|
$
|
1,934
|
|
|
$
|
2,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (b)
|
|
|
$
|
221
|
|
|
$
|
113
|
|
|
$
|
94
|
|
|
$
|
1,955
|
|
|
$
|
2,383
|
|
|
|
|
(a)
|
|
Management refers to GAAP income from operations, before
depreciation and amortization, as operating EBITDA.
|
(b)
|
|
Please see note (b) to the earnings press release for a definition
and additional information regarding our use of this non-GAAP
measure.
|
![](http://cts.businesswire.com/ct/CT?id=bwnews&sty=20150723005601r1&sid=ntxv4&distro=nx&lang=en)
View source version on businesswire.com: http://www.businesswire.com/news/home/20150723005601/en/
Copyright Business Wire 2015