01—Abstract
Summary
Summary of the 10-K filed February 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Waste Management, Inc. (WM) reported solid financial results for 2023, demonstrating resilience and strategic execution.
The company achieved revenue growth driven by its core Collection and Disposal segments, with positive contributions from yield improvements and acquisitions. WM continues to invest in its sustainability growth strategy, particularly in its Recycling Processing and Sales and WM Renewable Energy businesses, which are key areas for future expansion. Despite facing inflationary pressures and higher labor costs, WM managed its operating expenses effectively, leading to improved income from operations and a strengthened operating margin.
The company also returned significant value to shareholders through dividends and share repurchases, signaling confidence in its financial health and future prospects. WM's focus on automation, technology, and a people-first approach positions it well to navigate industry challenges and capitalize on growth opportunities in the evolving environmental solutions market.
02—Key points
Key Highlights
- Revenue increased by 3.7% to $20.4 billion in 2023, driven by higher yield in Collection and Disposal, acquisitions, and increased volumes.
- Income from operations rose by 6.2% to $3.6 billion, with an improved operating margin of 17.5%, showcasing effective cost management.
- The company returned $2.4 billion to shareholders in 2023 through dividends ($1.1 billion) and share repurchases ($1.3 billion), including a 7.1% expected increase in the quarterly dividend for 2024.
- WM continued its strategic investments in Recycling Processing and Sales and WM Renewable Energy segments, indicating a commitment to long-term growth and sustainability initiatives.
- Despite inflationary cost pressures, particularly in maintenance, repairs, and labor, operating expenses as a percentage of revenue improved due to revenue growth and cost control measures.
- Free cash flow was $1.9 billion in 2023, though slightly down from the prior year, reflecting increased capital expenditures for growth investments.
- The company maintained effective internal controls over financial reporting, as attested by their independent registered public accounting firm, Ernst & Young LLP.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Waste Management Inc kept $0.11.
- Revenue$20.43B100.0%
- Cost of revenue−$12.61B61.7%
- Gross profit$7.82B38.3%
- Operating costs−$4.25B20.8%
- Operating income$3.58B17.5%
- Interest, other & tax−$1.27B6.2%
- Net income$2.30B11.3%
Where FY2023 revenue went
$20.43B- Cost of revenue: $12.61B, 62% of revenue
- Net income: $2.30B, 11% of revenue
- SG&A: $1.93B, 9.4% of revenue
- Other operating costs: $2.32B, 11% of revenue
- Interest, other & tax: $1.27B, 6.2% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 13, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $20.43B$19.70B | +3.7% |
| Cost of Revenue | $12.61B$12.29B | +2.5% |
| Gross Profit | $7.82B$7.40B | +5.6% |
| SG&A Expenses | $1.93B$1.94B | −0.6% |
| Operating Expenses | $16.85B$16.33B | +3.2% |
| Operating Income | $3.58B$3.37B | +6.2% |
| Net Income | $2.30B$2.24B | +2.9% |
| EPS (Basic) | $5.69$5.42 | +5.0% |
| EPS (Diluted) | $5.66$5.39 | +5.0% |
| Shares Outstanding (Basic) | 404.90M412.80M | −1.9% |
| Shares Outstanding (Diluted) | 406.90M415.00M | −2.0% |
05—Questions
Frequently Asked Questions
What was Waste Management's overall financial performance in 2023?
Waste Management reported a strong financial performance in 2023, with total revenues reaching $20.4 billion, a 3.7% increase from 2022. Income from operations grew by 6.2% to $3.6 billion, and the company maintained an improved operating margin of 17.5%. This growth was driven by increases in yield and volume within its core Collection and Disposal businesses, as well as strategic acquisitions.
How is Waste Management addressing inflationary pressures and rising costs?
Waste Management is actively managing inflationary pressures, particularly in labor, maintenance, and repair costs. The company is focusing on operational efficiencies, investments in technology and automation to reduce labor dependency, and adjusting its pricing strategies. While these efforts are ongoing, they helped to improve operating costs as a percentage of revenue in 2023 compared to the prior year.
What is Waste Management's strategy for future growth, particularly regarding sustainability initiatives?
Waste Management is strategically investing in its Recycling Processing and Sales and WM Renewable Energy segments as key drivers for future growth. The company is focused on expanding its recycling capabilities and developing projects for the beneficial use of landfill gas to produce renewable natural gas and electricity. These initiatives align with the company's commitment to sustainability and its long-term strategy to provide comprehensive environmental solutions.
How is Waste Management returning value to its shareholders?
Waste Management demonstrated a strong commitment to shareholder returns in 2023 by returning $2.4 billion through dividends and share repurchases. The company's Board of Directors expects to increase the quarterly dividend by 7.1% in 2024, marking the 21st consecutive year of dividend increases, reflecting its consistent cash flow generation.
06—Continue