01—Abstract
Summary
Summary of the 10-K filed February 16, 2012. Cited figures are marked; the original filing is the authoritative source.
Waste Management, Inc. (WM) reported a strong financial performance in its 2011 10-K filing, highlighting revenue growth driven by improved commodity prices, a robust fuel surcharge program, and strategic acquisitions, most notably Oakleaf Global Holdings.
The company generated $13.4 billiona in revenue, a 6.9% increase from the previous year, and $2.5 billion in net cash from operating activities. WM also demonstrated a commitment to shareholder returns, returning $1.2 billion through dividends and share repurchases. Key strategic goals include deepening customer understanding, extracting more value from materials through technology, and enhancing operational efficiency.
The company is investing in "greener technologies" and expanding its service offerings, reflecting a focus on sustainability and adapting to industry changes. Despite facing intense competition and ongoing regulatory environments, WM's diversified operations across collection, landfill, transfer, recycling, and waste-to-energy segments position it as a leader in the North American waste management industry.
02—Key points
Key Highlights
- Revenue grew by 6.9% to $13.4 billion in 2011, primarily driven by improved recyclable commodity prices, a fuel surcharge program, and the acquisition of Oakleaf Global Holdings.
- Net cash provided by operating activities increased by 8.5% to $2.5 billion in 2011.
- The company returned $1.2 billion to shareholders through dividends ($637 million) and share repurchases ($575 million) in 2011.
- WM owns and operates the largest network of landfills in the industry with 271 sites.
- The company is expanding its renewable energy offerings through waste-to-energy and landfill gas-to-energy facilities.
- Acquisition of Oakleaf Global Holdings for $432 million in July 2011 is expected to enhance national accounts customer base and comprehensive environmental solutions.
- Despite a challenging economic environment and competitive landscape, WM is focused on strategic growth initiatives, operational efficiency, and cost savings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Waste Management Inc kept $0.07.
- Revenue$13.38B100.0%
- Cost of revenue−$1.29B9.6%
- Gross profit$12.09B90.4%
- Operating costs−$10.06B75.2%
- Operating income$2.03B15.2%
- Interest, other & tax−$1.07B8.0%
- Net income$961.0M7.2%
Where FY2011 revenue went
$13.38B- Other operating costs: $8.51B, 64% of revenue
- Net income: $961.0M, 7.2% of revenue
- Cost of revenue: $1.29B, 9.6% of revenue
- SG&A: $1.55B, 12% of revenue
- Interest, other & tax: $1.07B, 8.0% of revenue
Kept 7.2% as net incomeNet income $961.0M · 7.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 16, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $13.38B$12.52B | +6.9% |
| Cost of Revenue | $1.29B— | — |
| Gross Profit | $12.09B— | — |
| SG&A Expenses | $1.55B$1.46B | +6.2% |
| Operating Expenses | $11.35B$10.40B | +9.1% |
| Operating Income | $2.03B$2.12B | −4.2% |
| Interest Expense | $503.00M$490.00M | +2.7% |
| Net Income | $961.00M$953.00M | +0.8% |
| EPS (Basic) | $2.05$1.98 | +3.5% |
| EPS (Diluted) | $2.04$1.98 | +3.0% |
| Shares Outstanding (Basic) | 469.70M480.20M | −2.2% |
| Shares Outstanding (Diluted) | 471.40M482.20M | −2.2% |
05—Questions
Frequently Asked Questions
What was Waste Management's revenue in 2011, and what were the main drivers of growth?
Waste Management reported revenue of $13.4 billion in 2011, an increase of 6.9% from the prior year. Key drivers of this growth included improved pricing and volumes in its collection and disposal business (yield), higher prices for recyclable commodities, increased revenue from its fuel surcharge program, and the significant impact of acquisitions, particularly Oakleaf Global Holdings.
How did Waste Management manage shareholder returns in 2011?
In 2011, Waste Management returned $1.2 billion to its shareholders. This included $637 million in cash dividends and $575 million in share repurchases, demonstrating a commitment to returning value to investors.
What is Waste Management's strategy for future growth and profitability?
Waste Management's strategy is focused on three core goals: deeper customer understanding, maximizing value from materials through technology, and continuous improvement in operational efficiency. The company plans to achieve this through customer-focused growth, strategic acquisitions, investment in "greener technologies," and initiatives to improve its operations and cost structure. They also aim to grow customer loyalty and service new markets.
What are the main risks facing Waste Management as highlighted in the 10-K?
Key risks identified include intense competition in the waste industry, the potential failure to implement its business strategy successfully, the impact of extensive government regulations, fluctuations in commodity prices (especially for recycling and energy), increasing customer preference for waste diversion alternatives to landfill and waste-to-energy disposal, and general economic conditions affecting consumer spending and waste volumes.
06—Continue