01—Abstract
Summary
Summary of the 10-K filed February 7, 2023. Cited figures are marked; the original filing is the authoritative source.
Waste Management, Inc. (WM) reported solid financial results for the fiscal year ended December 31, 2022, with revenues increasing by 9.9% to $19.7 billiona.
This growth was driven by a combination of higher yield (pricing increases) across its collection and disposal services and a modest increase in volumes. The company successfully navigated inflationary cost pressures, particularly in fuel, maintenance, and labor, by implementing fuel surcharges and other fees, and by focusing on operational efficiencies and automation investments. WM continues its strategic focus on sustainability, investing in its recycling and renewable energy businesses.
The company announced a 7.7%b increase in its quarterly dividend, marking the 20th consecutive year of dividend increases, signaling strong and consistent cash flow generation. Shareholder returns were also supported by substantial share repurchases. The company's robust balance sheet and operational execution position it well for continued growth and shareholder value creation.
02—Key points
Key Highlights
- Revenue growth of 9.9% to $19.7 billion, driven by higher yield and volume in collection and disposal services.
- Income from operations increased by 13.5% to $3.37 billion, with operating margins improving to 17.1% from 16.5%.
- Announced a 7.7% increase in the quarterly dividend to $0.70 per share, marking the 20th consecutive annual increase.
- Continued strategic investments in recycling and renewable energy businesses, including opening five new MRFs with advanced technology.
- Managed inflationary cost pressures through strategic pricing and operational efficiencies, despite a 3.0% increase in operating expenses as a percentage of revenue.
- Significant capital allocation towards capital expenditures ($2.59 billion) and shareholder returns ($2.58 billion) through dividends and share repurchases.
- Strong operating cash flow of $4.54 billion, though free cash flow decreased to $1.98 billion due to increased capital spending.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Waste Management Inc kept $0.11.
- Revenue$19.70B100.0%
- Cost of revenue−$12.29B62.4%
- Gross profit$7.40B37.6%
- Operating costs−$4.04B20.5%
- Operating income$3.37B17.1%
- Interest, other & tax−$1.13B5.7%
- Net income$2.24B11.4%
Where FY2022 revenue went
$19.70B- Cost of revenue: $12.29B, 62% of revenue
- Net income: $2.24B, 11% of revenue
- SG&A: $1.94B, 9.8% of revenue
- Other operating costs: $2.10B, 11% of revenue
- Interest, other & tax: $1.13B, 5.7% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 7, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $19.70B$17.93B | +9.9% |
| Cost of Revenue | $12.29B$11.11B | +10.6% |
| Gross Profit | $7.40B$6.82B | +8.6% |
| SG&A Expenses | $1.94B$1.86B | +4.0% |
| Operating Expenses | $16.33B$14.97B | +9.1% |
| Operating Income | $3.37B$2.96B | +13.5% |
| Net Income | $2.24B$1.82B | +23.2% |
| EPS (Basic) | $5.42$4.32 | +25.5% |
| EPS (Diluted) | $5.39$4.29 | +25.6% |
| Shares Outstanding (Basic) | 412.80M420.40M | −1.8% |
| Shares Outstanding (Diluted) | 415.00M422.90M | −1.9% |
05—Questions
Frequently Asked Questions
What was Waste Management's revenue performance in 2022?
Waste Management's revenue increased by 9.9% to $19.7 billion in 2022, primarily driven by higher yield (pricing adjustments) and volume growth in its collection and disposal operations. The company also benefited from its fuel surcharge program.
How is the company addressing inflationary cost pressures?
Waste Management is addressing inflationary cost pressures, particularly in fuel, maintenance, and labor, through strategic pricing initiatives, including yield management and fuel surcharges. The company is also focusing on operational efficiencies, automation investments, and cost controls.
What is the outlook for shareholder returns?
The company announced a 7.7% increase in its quarterly dividend, which is the 20th consecutive annual increase, demonstrating a commitment to returning value to shareholders. Significant share repurchases also contributed to shareholder returns.
How is the company investing in sustainability?
Waste Management is continuing its strategic investments in its recycling and renewable energy businesses. This includes opening new material recovery facilities (MRFs) with advanced technology and expanding its renewable natural gas (RNG) production capabilities.
06—Continue