8-KEarnings & ResultsExhibits & Filings

WASTE MANAGEMENT INC 8-K Report, Financial Results (Apr 29, 2009)

Filed April 29, 2009For Securities:WM

Summary

Waste Management, Inc. (WM) filed an 8-K on April 29, 2009, reporting its first-quarter 2009 financial results. The company highlighted its earnings and provided a conference call to discuss these results, including the use of non-GAAP financial measures. Key adjustments were made to net income and earnings per share to reflect the impact of restructuring, SAP abandonment, and income tax audit settlements. The company also detailed adjustments for the negative impact of the downturn in recyclable commodity markets, which significantly affected its reported earnings. Furthermore, WM provided insights into its operating expenses as a percentage of revenue, both as reported and adjusted for commodity and fuel price impacts. The report also outlined the company's definition and calculation of free cash flow, providing a reconciliation for the first quarter of 2009 and projections for the full year. Investors are encouraged to review the attached press release (Exhibit 99.1) for a comprehensive understanding of the financial details and management's discussion.

Key Highlights

  • 1WM reported Q1 2009 results via an 8-K filing, including a press release (Exhibit 99.1).
  • 2The company held a conference call to discuss Q1 2009 earnings, utilizing non-GAAP financial measures.
  • 3Adjusted Net Income and EPS for Q1 2009 included charges for restructuring ($23M) and SAP abandonment ($30M).
  • 4Significant impact from the decline in recyclable commodity prices in Q1 2009, resulting in a $70M adjustment to net income.
  • 5Operating expenses as a percentage of revenue were presented both as reported (61.4%) and adjusted for commodity and fuel impacts (62.7%) for Q1 2009.
  • 6Free cash flow for Q1 2009 was $199 million.
  • 7Full-year 2009 projected free cash flow is estimated to be between $1.3 billion and $1.4 billion.

Frequently Asked Questions

For the quarter ended March 31, 2009, Waste Management reported net income attributable to WMI of $155 million, or $0.31 per diluted share. This compares to $241 million, or $0.48 per diluted share, for the same period in 2008. The company also noted that operating revenues were $2,810 million compared to $3,266 million in Q1 2008.

The decline in prices and demand for recyclable commodities compared to Q1 2008 had a significant negative impact. The company reported an adjustment of $70 million (or $0.09 per share) to net income to reflect this downturn. This adjustment is separate from other adjustments for restructuring and SAP abandonment.

Waste Management defines free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other sales of assets. For the three months ended March 31, 2009, free cash flow was $199 million. Projections for the full year 2009 indicate a free cash flow range of $1.3 billion to $1.4 billion, based on two different operating scenarios.

Waste Management discussed several non-GAAP measures, including adjusted diluted earnings per share (which accounts for restructuring, SAP abandonment, and commodity market impacts), operating expense as a percentage of revenue excluding commodity and fuel price impacts, and free cash flow. The company states these measures provide investors with additional analytical tools for evaluating performance.