How did the COVID-19 pandemic impact Waste Management's third-quarter performance?

The COVID-19 pandemic had a notable impact on Waste Management's third-quarter results, primarily leading to revenue declines of approximately $240 million due to reduced waste service needs from customers, particularly in industrial and commercial collection and landfill services. While volumes declined, the company implemented proactive cost management strategies, including optimizing routes, reducing overtime, and controlling discretionary expenses, which helped to mitigate the impact on operating expenses and profitability. The company also saw some volume recovery and improved customer receipts during the quarter.

What is the significance of the Advanced Disposal acquisition?

The acquisition of Advanced Disposal, which closed on October 30, 2020, is a significant strategic move for Waste Management. It expands the company's footprint, particularly in the Eastern half of the U.S., and adds approximately three million new commercial, industrial, and residential customers. To gain regulatory approval, WM completed necessary divestitures to GFL Environmental Inc. for $856.4 million in cash.

How did Waste Management manage its debt during this period?

Waste Management actively managed its debt during the nine months ended September 30, 2020. Key activities included the redemption of $3.0 billion of senior notes (SMR Notes) in July 2020 due to the acquisition's timeline, which resulted in a $52 million loss on early extinguishment of debt. The company also issued $181 million in new tax-exempt bonds and repaid $212 million of existing tax-exempt bonds. Despite the redemption, the company maintained access to its $3.5 billion revolving credit facility and had $600 million outstanding under its commercial paper program, demonstrating strong liquidity.

What is the outlook for Waste Management given the ongoing pandemic?

Waste Management acknowledges that the ultimate impacts of the COVID-19 pandemic on its long-term outlook remain uncertain and depend on future developments, including the pandemic's duration and the pace of economic recovery. However, the company's essential services, diversified customer base, and resilient business model provide a solid foundation. They continue to focus on operational execution, cost management, and strategic investments in technology to emerge from the pandemic as a stronger company and remain the service provider of choice.

WM 10-Q Quarterly Report Q3 FY2020 — Revenue, Net Income, EPS

Summary

Waste Management, Inc. (WM) reported its third-quarter results for the period ending September 29, 2020. The company demonstrated resilience in a challenging economic environment impacted by COVID-19, with revenues declining by 2.7% year-over-year to $3.86 billion, an improvement from the previous quarter's decline. Despite revenue headwinds, particularly in industrial and commercial collection and landfill services, WM managed operating expenses effectively, achieving a 60.4% ratio to revenue, down from 61.5% in the prior year. This cost management, coupled with a slight increase in collection and disposal yield, helped mitigate the impact on income from operations, which stood at $680 million, a decrease from $734 million in the prior year. The company also highlighted strong free cash flow generation of $691 million, an increase from $478 million in the prior year, supported by disciplined capital expenditure management and improved cash from operations. The acquisition of Advanced Disposal was completed on October 30, 2020, significantly expanding WM's footprint, with the company also completing necessary divestitures. WM maintained a strong liquidity position, with $703 million in cash and cash equivalents and significant unused credit facilities.

Financial Highlights

51 data points

Beta

Revenue

$3.86B

0.4% Gross Margin

Net Income

$390.00M

0.1% Net Margin

EPS (Diluted)

$0.92

Total Assets

$24.77B

Cash & Equivalents

$703.00M

Free Cash Flow

$1.03B

Financial Statements

Beta

Revenue	$3.86B
Cost of Revenue	$2.33B
Gross Profit	$1.53B
SG&A Expenses	$416.00M
Operating Expenses	$3.18B
Operating Income	$680.00M
Net Income	$390.00M
EPS (Basic)	$0.92
EPS (Diluted)	$0.92
Shares Outstanding (Basic)	422.70M
Shares Outstanding (Diluted)	424.60M

Key Highlights

1Revenues for the third quarter of 2020 were $3.86 billion, a slight decrease of 2.7% year-over-year, showing a recovery trend compared to the second quarter.
2Operating expenses were managed effectively, decreasing to 60.4% of revenue compared to 61.5% in the prior year, demonstrating cost control in a challenging environment.
3Income from operations was $680 million, down from $734 million in the prior year, reflecting the impact of reduced volumes due to COVID-19.
4The company generated strong free cash flow of $691 million in the third quarter, up from $478 million in the prior year, supported by operational efficiency and capital discipline.
5Waste Management successfully closed the acquisition of Advanced Disposal on October 30, 2020, expanding its market reach and customer base.
6The company maintained a strong liquidity position with $703 million in cash and cash equivalents and access to significant credit facilities.
7Despite pandemic-related challenges, Waste Management saw improvement in customer receipts and a reduction in the provision for bad debts during the third quarter.

WASTE MANAGEMENT INC Quarterly Report for Q3 Ended Sep 30, 2020

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions