10-QPeriod: Q1 FY2021

WASTE MANAGEMENT INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 27, 2021For Securities:WM

Summary

Waste Management Inc. (WM) reported strong financial performance for the first quarter of 2021, exceeding the prior year's results driven by an increase in operating revenues and improved income from operations. This growth was significantly boosted by the acquisition of Advanced Disposal Services, Inc. (Advanced Disposal), which expanded the company's footprint and customer base, particularly in the Eastern U.S. While overall volumes are still recovering from the impact of COVID-19, the company has seen positive trends in its landfill and industrial/commercial collection businesses. The company demonstrated robust cash flow generation, with net cash provided by operating activities significantly increasing year-over-year. This strong operating performance allowed for substantial returns to shareholders through dividends and share repurchases, alongside continued investment in capital expenditures. WM remains focused on its long-term strategy of focused differentiation and continuous improvement, leveraging its extensive asset network and investing in digital transformation to enhance customer experience and operational efficiency.

Financial Statements
Beta

Key Highlights

  • 1Revenue increased by 10.3% to $4.11 billion, primarily driven by the acquisition of Advanced Disposal and higher recycling commodity prices.
  • 2Income from operations grew by 13.4% to $650 million, indicating improved profitability and operational leverage.
  • 3Net income attributable to Waste Management, Inc. was $421 million, or $0.99 per diluted share, a significant increase from $361 million, or $0.85 per diluted share, in the prior year.
  • 4Net cash provided by operating activities surged by 46.4% to $1.12 billion, demonstrating strong cash generation capabilities.
  • 5Free cash flow increased substantially to $865 million from $318 million in the prior year, highlighting enhanced financial flexibility.
  • 6The company returned $497 million to shareholders through dividends ($247 million) and share repurchases ($250 million), signaling confidence and commitment to shareholder value.
  • 7Despite ongoing volume recovery from COVID-19 impacts, the company demonstrated successful integration of Advanced Disposal and maintained cost discipline.

Frequently Asked Questions

The primary driver of revenue growth was the acquisition of Advanced Disposal Services, Inc. (Advanced Disposal), which closed in October 2020. This acquisition expanded Waste Management's operational footprint and customer base. Additionally, higher recycling commodity prices and improved yield in collection and disposal businesses also contributed to the revenue increase.

Profitability improved significantly, with income from operations increasing by 13.4% to $650 million. This improvement was driven by strong operating results in collection and disposal, better profitability in recycling operations, and increased market values for renewable energy credits. The company also benefited from disciplined cost management.

While volumes in the first quarter of 2021 were still below the prior year due to the onset of COVID-19 impacts in March 2020, Waste Management is observing a continued recovery in its landfill and industrial/commercial collection businesses. The company remains optimistic about further recovery as COVID-19 vaccines become more widely available and economies reopen, though uncertainties regarding the pace of recovery persist.

Waste Management is actively returning value to its shareholders through a combination of cash dividends and share repurchases. In the first quarter of 2021, the company paid $247 million in dividends and repurchased $250 million of its common stock, including through an accelerated share repurchase agreement. The company has an authorization for $1.1 billion of future share repurchases.