01—Abstract
Summary
Summary of the 10-K filed February 17, 2015. Cited figures are marked; the original filing is the authoritative source.
Waste Management Inc. (WM) reported solid financial results for the year ended December 31, 2014, demonstrating resilience and strategic execution.
Total revenues remained stable year-over-year at approximately $14 billiona, supported by yield improvements in collection and disposal services, and contributions from strategic acquisitions. A significant event during the year was the sale of the Wheelabrator business, which generated substantial proceeds intended for reinvestment in core operations and shareholder value creation through acquisitions and potential share repurchases. Operationally, WM focused on its five key priorities: customer service, operational performance, growth, yield management, and cost control.
These efforts contributed to a notable increase in income from operations, largely driven by a significant gain from the Wheelabrator divestiture and favorable comparisons to prior-year impairment charges. The company also demonstrated a commitment to shareholder returns, increasing dividends and actively repurchasing shares. Despite a challenging market environment for some commodities, WM's diversified business model and strategic focus position it for continued financial strength and value generation.
02—Key points
Key Highlights
- Total revenues were largely flat at $13.996 billion for 2014, reflecting stable core operations.
- Income from operations saw a substantial increase to $2.299 billion, primarily due to the $519 million gain on the sale of the Wheelabrator business and reduced impairment charges compared to the prior year.
- The company successfully completed the sale of its Wheelabrator waste-to-energy business for $1.95 billion, generating significant proceeds for future strategic investments.
- Free cash flow remained robust at $3.433 billion, enabling the company to return capital to shareholders through dividends ($693 million) and share repurchases ($600 million).
- WM is strategically focused on enhancing its core Solid Waste business through operational improvements, yield management, and disciplined cost control, while exploring accretive acquisition opportunities.
- The company plans to increase its quarterly dividend in 2015, signaling confidence in its ability to generate consistent cash flows.
- Total assets decreased to $21.412 billion from $22.603 billion, partly due to the Wheelabrator divestiture.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Waste Management Inc kept $0.09.
- Revenue$14.00B100.0%
- Cost of revenue−$9.00B64.3%
- Gross profit$4.99B35.7%
- Operating costs−$2.69B19.3%
- Operating income$2.30B16.4%
- Interest, other & tax−$1.00B7.2%
- Net income$1.30B9.3%
Where FY2014 revenue went
$14.00B- Cost of revenue: $9.00B, 64% of revenue
- Net income: $1.30B, 9.3% of revenue
- SG&A: $1.48B, 11% of revenue
- Other operating costs: $1.21B, 8.7% of revenue
- Interest, other & tax: $1.00B, 7.2% of revenue
Kept 9.3% as net incomeNet income $1.30B · 9.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 17, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $14.00B$13.98B | +0.1% |
| Cost of Revenue | $9.00B$9.11B | −1.2% |
| Gross Profit | $4.99B$4.87B | +2.5% |
| SG&A Expenses | $1.48B$1.47B | +0.9% |
| Operating Expenses | $11.70B$12.90B | −9.4% |
| Operating Income | $2.30B$1.08B | +113.1% |
| Net Income | $1.30B$98.00M | +1224.5% |
| EPS (Basic) | $2.80$0.21 | +1233.3% |
| EPS (Diluted) | $2.79$0.21 | +1228.6% |
| Shares Outstanding (Basic) | 462.60M467.70M | −1.1% |
| Shares Outstanding (Diluted) | 465.60M469.80M | −0.9% |
05—Questions
Frequently Asked Questions
What was Waste Management's financial performance in 2014?
Waste Management reported total revenues of $13.996 billion for the year ended December 31, 2014, which was largely in line with the prior year. Income from operations significantly increased to $2.299 billion, primarily due to a $519 million gain from the sale of its Wheelabrator business and a reduction in prior-year impairment charges. The company generated strong free cash flow of $3.433 billion.
What was the significance of the Wheelabrator divestiture?
Waste Management completed the sale of its Wheelabrator business in December 2014 for $1.95 billion. This strategic move generated substantial cash proceeds, which the company intends to reinvest in its core Solid Waste business, pursue acquisitions, and enhance shareholder returns through dividends and share repurchases.
How did the company manage its capital and return value to shareholders?
The company demonstrated a commitment to shareholder returns by paying $693 million in cash dividends in 2014 and repurchasing $600 million of its common stock. The strong free cash flow generation of $3.433 billion supported these capital allocation strategies. Additionally, WM announced an expected increase in its quarterly dividend for 2015.
What are Waste Management's key strategic priorities?
Waste Management's strategy is guided by five key priorities: focusing on customers, continuously improving operational performance in its traditional waste business, pursuing growth opportunities (including acquisitions), managing yield through pricing leadership, and minimizing operating and SG&A costs. These priorities aim to drive financial performance and maintain industry leadership.
06—Continue