01—Abstract
Summary
Summary of the 10-K filed February 15, 2022. Cited figures are marked; the original filing is the authoritative source.
Waste Management Inc. (WM) demonstrated robust performance in its 2021 fiscal year, marked by significant revenue growth driven by the strategic acquisition of Advanced Disposal, strong commodity pricing in recycling, and improved yield across its collection and disposal services.
The company navigated inflationary pressures and labor market challenges effectively, resulting in a notable increase in income from operations and net income compared to the previous year. WM continues to focus on its long-term strategy of focused differentiation and continuous improvement, underscored by its commitment to sustainability and technological investment. Key financial highlights include a substantial increase in total revenue to $17.9 billiona, up 17.8% year-over-year, and a 21.8% increase in income from operations to $2.97 billion.
The company also returned significant capital to shareholders through dividends and share repurchases, signaling confidence in its ongoing cash flow generation. Despite facing macroeconomic headwinds such as labor shortages and rising costs, WM's disciplined pricing strategies and operational efficiencies allowed it to deliver strong results and maintain its leadership position in the waste management industry.
02—Key points
Key Highlights
- Revenue increased by 17.8% to $17.93 billion, primarily driven by the Advanced Disposal acquisition, strong recycling commodity prices, and higher yield in collection and disposal services.
- Income from operations rose by 21.8% to $2.97 billion, reflecting improved operational performance and successful integration of acquired businesses.
- Net income attributable to Waste Management, Inc. increased to $1.82 billion, or $4.29 per diluted share, from $1.49 billion, or $3.52 per diluted share, in the prior year.
- The company generated strong operating cash flow of $4.34 billion, a significant increase from $3.40 billion in the prior year.
- Free cash flow was $2.53 billion, slightly down from $2.66 billion in the prior year, impacted by changes in proceeds from divestitures.
- Waste Management announced a planned 13.0% increase in its quarterly dividend for 2022, marking the 19th consecutive year of dividend increases.
- Capital expenditures for 2021 were $1.90 billion, supporting growth initiatives, fleet modernization, and technology investments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Waste Management Inc kept $0.10.
- Revenue$17.93B100.0%
- Cost of revenue−$11.11B62.0%
- Gross profit$6.82B38.0%
- Operating costs−$3.85B21.5%
- Operating income$2.96B16.5%
- Interest, other & tax−$1.15B6.4%
- Net income$1.82B10.1%
Where FY2021 revenue went
$17.93B- Cost of revenue: $11.11B, 62% of revenue
- Net income: $1.82B, 10% of revenue
- SG&A: $1.86B, 10% of revenue
- Other operating costs: $1.99B, 11% of revenue
- Interest, other & tax: $1.15B, 6.4% of revenue
Kept 10% as net incomeNet income $1.82B · 10%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 15, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $17.93B$15.22B | +17.8% |
| Cost of Revenue | $11.11B$9.34B | +18.9% |
| Gross Profit | $6.82B$5.88B | +16.0% |
| SG&A Expenses | $1.86B$1.73B | +7.9% |
| Operating Expenses | $14.97B$12.78B | +17.1% |
| Operating Income | $2.96B$2.43B | +21.8% |
| Net Income | $1.82B$1.50B | +21.4% |
| EPS (Basic) | $4.32$3.54 | +22.0% |
| EPS (Diluted) | $4.29$3.52 | +21.9% |
| Shares Outstanding (Basic) | 420.40M423.00M | −0.6% |
| Shares Outstanding (Diluted) | 422.90M425.10M | −0.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of Waste Management's revenue growth in 2021?
The primary drivers of Waste Management's revenue growth in 2021 were the acquisition of Advanced Disposal, record-high increases in the market prices for recycling commodities, higher yield in its collection and disposal lines of business, and strong overall volume growth.
How did Waste Management address inflationary cost pressures and labor market challenges?
Waste Management addressed inflationary cost pressures and labor market challenges through disciplined pricing programs to recover cost increases, strategic investments in digital platforms and technology to improve operational efficiencies and labor productivity, and market wage adjustments to attract and retain talent. The company also focused on cost controls and optimizing its operational structure.
What is the outlook for Waste Management's dividends and share repurchases?
Waste Management announced its intention to increase its quarterly dividend by 13.0% for 2022, continuing its history of consecutive dividend increases. The company also has an authorized share repurchase program of up to $1.5 billion, which will be executed at the discretion of management based on various factors, including financial condition and future business plans.
How did the acquisition of Advanced Disposal impact the company's financial performance?
The acquisition of Advanced Disposal significantly contributed to revenue growth and expanded Waste Management's footprint. While integration costs were incurred, the acquired operations were successfully integrated into the existing segments, contributing positively to the company's overall financial performance by the end of 2021.
06—Continue