10-KPeriod: FY2023

WASTE MANAGEMENT INC Annual Report, Year Ended Dec 31, 2023

Filed February 13, 2024For Securities:WM

Summary

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.

Financial Highlights

51 data points
Beta

Revenue

$20.43B

38.3% Gross Margin

Net Income

$2.30B

11.3% Net Margin

EPS (Diluted)

$5.66

Total Assets

$32.82B

Cash & Equivalents

$458.00M

Free Cash Flow

$4.72B

Financial Statements
Beta
Revenue$20.43B
Cost of Revenue$12.61B
Gross Profit$7.82B
SG&A Expenses$1.93B
Operating Expenses$16.85B
Operating Income$3.58B
Net Income$2.30B
EPS (Basic)$5.69
EPS (Diluted)$5.66
Shares Outstanding (Basic)404.90M
Shares Outstanding (Diluted)406.90M

Key Highlights

  • 1Revenue increased by 3.7% to $20.4 billion in 2023, driven by higher yield in Collection and Disposal, acquisitions, and increased volumes.
  • 2Income from operations rose by 6.2% to $3.6 billion, with an improved operating margin of 17.5%, showcasing effective cost management.
  • 3The 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.
  • 4WM continued its strategic investments in Recycling Processing and Sales and WM Renewable Energy segments, indicating a commitment to long-term growth and sustainability initiatives.
  • 5Despite 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.
  • 6Free cash flow was $1.9 billion in 2023, though slightly down from the prior year, reflecting increased capital expenditures for growth investments.
  • 7The company maintained effective internal controls over financial reporting, as attested by their independent registered public accounting firm, Ernst & Young LLP.

Frequently Asked Questions

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.

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.

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.

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.