WASTE MANAGEMENT INC Quarterly Report for Q1 Ended Mar 31, 2018

Summary

Waste Management, Inc. (WM) reported a strong first quarter in 2018, demonstrating year-over-year growth in revenue, income from operations, and net income. Revenue increased by 2.1% to $3.51 billion, driven by higher volumes and improved pricing in its core collection and disposal services. Despite headwinds from lower recycling commodity prices, the company's solid waste business performed well, contributing to a 9.0% increase in operating income to $608 million. Net income attributable to Waste Management, Inc. surged by 32.9% to $396 million, or $0.91 per diluted share, significantly boosted by the recently enacted tax reform that lowered the U.S. federal corporate income tax rate from 35% to 21%.

Key Highlights

• 1Total revenue increased by 2.1% to $3.51 billion in Q1 2018 compared to Q1 2017, driven by yield and volume growth in collection and disposal services.
• 2Income from operations grew by 9.0% to $608 million, reflecting improved operational efficiency and pricing strategies, with operating margin increasing from 16.2% to 17.3%.
• 3Net income attributable to Waste Management, Inc. saw a substantial increase of 32.9% to $396 million ($0.91 per diluted share), primarily due to the benefit of the reduced federal corporate tax rate.
• 4Net cash provided by operating activities increased by 12.0% to $809 million, indicating strong operational cash generation.
• 5The company returned $456 million to shareholders through common stock repurchases ($250 million accelerated share repurchase) and dividends ($206 million) in Q1 2018.
• 6Acquisitions remain a focus, with $246 million spent on seven solid waste businesses during the quarter, signaling continued investment in inorganic growth.
• 7Despite strong operational performance, recycling commodity prices experienced significant downward pressure, leading to a revenue decline in that segment.

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