8-KEarnings & ResultsExhibits & Filings

WASTE MANAGEMENT INC 8-K Report, Financial Results (Apr 29, 2015)

Filed April 29, 2015For Securities:WM

Summary

Waste Management, Inc. (WM) filed this 8-K on April 29, 2015, to report its first quarter 2015 financial results. The report highlights the company's financial performance, emphasizing adjusted operating metrics that management believes better reflect ongoing operational performance. Investors should note that the company is using several non-GAAP financial measures to present its results, including Adjusted Income from Operations and Adjusted Operating EBITDA, which exclude certain items such as asset impairments and restructuring costs. The company provided reconciliations for these non-GAAP measures to their closest GAAP equivalents. A key takeaway is the improvement in both Adjusted Income from Operations and Adjusted Operating EBITDA on a percentage of revenue basis compared to the prior year, despite a decrease in reported revenue. This suggests a focus on efficiency and profitability from core operations.

Key Highlights

  • 1Waste Management reported its first quarter 2015 financial results via an 8-K filing on April 29, 2015.
  • 2The company utilized several non-GAAP financial measures, including Adjusted Income from Operations and Adjusted Operating EBITDA, to present performance.
  • 3Adjusted Income from Operations for Q1 2015 was $454 million, representing 14.9% of revenues, an improvement from Q1 2014's adjusted 13.6%.
  • 4Adjusted Operating EBITDA for Q1 2015 increased to $746 million, or 24.5% of revenues, up from Q1 2014's adjusted 23.1%.
  • 5Reported operating revenues decreased in Q1 2015 compared to Q1 2014, partly due to the divestiture of businesses and assets in 2014.
  • 6Operating expenses as a percentage of revenue improved to 64.0% in Q1 2015, after adjustments for divestitures, compared to adjusted 65.4% in Q1 2014.
  • 7The filing included reconciliations of non-GAAP measures to GAAP, explaining adjustments such as asset impairments and divested businesses.

Frequently Asked Questions

The main financial takeaways are the reported decrease in revenue but an improvement in key profitability metrics like Adjusted Income from Operations and Adjusted Operating EBITDA as a percentage of revenue. The company also showed improved operating expense control relative to revenue.

The company states that these non-GAAP measures, such as Adjusted Income from Operations and Adjusted Operating EBITDA, are used because they exclude certain items that management believes are not representative of ongoing performance or indicative of results of operations, such as asset impairments and restructuring costs. They are provided to offer investors a clearer view of the company's operational performance.

The report indicates that a primary reason for the decrease in reported operating revenues is the divestiture of businesses and assets in 2014, including the waste-to-energy business.

Investors should view the 'adjusted' figures as the company's attempt to show profitability and efficiency from its core, ongoing operations by stripping out one-time or non-recurring items. However, it's crucial to also look at the reported GAAP figures and understand the nature and impact of the adjustments made.