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FOR IMMEDIATE RELEASE
Waste Management Announces Fourth Quarter and Full-Year 2018 Earnings |
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The Company Generates Its Best Ever Full-Year Income and Cash Flow from Operations |
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FOR MORE INFORMATION | |
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Waste Management | |
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HOUSTON February 14, 2019 Waste Management, Inc. (NYSE: WM) today announced financial results for its quarter ended December 31, 2018. Revenues for the fourth quarter of 2018 were $3.84 billion, compared with $3.65 billion for the same 2017 period. Net income for the quarter was $531 million, or $1.24 per diluted share, compared with net income of $903 million, or $2.06 per diluted share, for the fourth quarter of 2017.(a) On an adjusted basis, earnings per diluted share were $1.13 for the fourth quarter of 2018, compared with $0.85 for the fourth quarter of 2017.(b)
For the full year 2018, the Company reported revenues of $14.91 billion, compared with $14.49 billion for 2017. Earnings per diluted share were $4.45 for the full year 2018 compared with $4.41 for the full year 2017. On an adjusted basis, earnings per diluted share were $4.20 for the full year 2018 versus $3.22 for the full year 2017.(b)
Jim Fish, President and Chief Executive Officer of Waste Management, commented, 2018 was a record-setting year for Waste Management, driven by our traditional solid waste performance. We grew operating EBITDA by more than 5%, which led to an increase in net cash provided by operations of more than 12% to $3.57 billion.(c) This growth translated into free cash flow of over $2 billion and the most cash returned to our shareholders in over a decade.(b) Our strong 2018 results validate that our focus on outstanding customer experience and cost management drives solid growth in our business. |
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Web site www.wm.com
Analysts Ed Egl 713.265.1656 eegl@wm.com
Media Tiffiany Moehring 720.346.5372 tmoehrin@wm.com
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KEY HIGHLIGHTS FOR THE FOURTH QUARTER AND THE FULL YEAR 2018 |
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Profitability |
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Operating EBITDA was $1.14 billion for the fourth quarter of 2018 and $4.27 billion for the full year. Adjusted operating EBITDA was $1.09 billion for the fourth quarter of 2018 and $4.22 billion for the full year. On a year-over-year basis, adjusted operating EBITDA grew $73 million, or 7.2%, in the fourth quarter and $210 million, or 5.2%, for the year. Adjusted operating EBITDA margin improved 50 basis points in the fourth quarter and 60 basis points for the full year.(b) |
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Revenue Growth |
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In the fourth quarter, revenue growth was driven by strong yield and volume growth in the Companys collection and disposal business, which contributed $203 million of incremental revenue on a year-over-year basis. Revenue from the Companys recycling business increased $18 million in the fourth quarter of 2018. For the full year, yield and volume growth in the Companys collection and disposal business contributed $693 million of incremental revenue. This was partially offset by a decline in revenue from the Companys recycling business, which fell by $197 million year-over-year, due to lower market prices for commodities net of contamination fees. |
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This increase of $228 million is primarily attributable to higher volumes and cost inflation in the current year period, partially offset by (i) changes in accounting for rebates and certain franchise fees required by the adoption of ASU 2014-09 and (ii) decreased cost of goods sold due to lower market prices for recycling commodities; Selling, general and administrative expenses of $1,453 million in 2018, or 9.7% of revenues, compared with $1,468 million, or 10.1% of revenues, in 2017.
Landfill Operating Costs The following table summarizes our landfill operating costs for the years ended December 31 (in millions): Amortization of Landfill Airspace Amortization of landfill airspace, which is included as a component of depreciation and amortization expenses, includes the following: the amortization of landfill capital costs, including (i) costs that have been incurred and capitalized and (ii) estimated future costs for landfill development and construction required to develop our landfills to their remaining permitted and expansion airspace; and the amortization of asset retirement costs arising from landfill final capping, closure and post-closure obligations, including (i) costs that have been incurred and capitalized and (ii) projected asset retirement costs.
Disruptions in the global movement of recycling commodities, due in part to actions by the Chinese government, resulted in significantly lower average markets prices in 2018 compared to 2017; however, we currently expect market price declines for recycling commodities to moderate in 2019.
The generally favorable macro-economic environment, including steady spending by consumers and businesses and construction starts, has benefited our volume growth and gross margins in recent quarters.
In addition, the following items affected 2017 when compared with 2016: Increased expenses in 2017 as a result of higher incentive compensation accruals and severance costs.
The increase in dividend payments...Read more
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Our selling, general and administrative...Read more
Indefinite-Lived Intangible Assets, Including Goodwill...Read more
During 2018, we continued to...Read more
Risk Management ? The increase...Read more
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However, all future dividend declarations...Read more
The increase in 2018 is...Read more
The Company continues to maintain...Read more
Recycling Commodities ? Fluctuations in...Read more
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However, such events occur in...Read more
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Partially offsetting these increases was...Read more
(b) The amount reported for...Read more
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Net Cash Provided by Operating...Read more
? Commercial Paper Program ?...Read more
We use long-term borrowings in...Read more
The increase in cost of...Read more
This decrease of $15 million...Read more
These gains were partially offset...Read more
The clean-up efforts of natural...Read more
Of the $990 million of...Read more
We recorded income tax expense...Read more
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A reduction in contingent consideration...Read more
(b) We received expansion permits...Read more
The Company continued its commitment...Read more
In December 2018, we announced...Read more
The reduction consisted of a...Read more
To the extent that such...Read more
Our operating cash flows increased...Read more
Provision for Bad Debts ?...Read more
Furthermore, our WMSBS organization experienced...Read more
Landfill capital costs and closure...Read more
Revenue growth from collection and...Read more
Fuel Surcharges and Mandated Fees...Read more
The volume growth is the...Read more
Management?s Discussion and Analysis of...Read more
The remaining amortizable basis of...Read more
We continually focus on improving...Read more
Internally developed estimates are based...Read more
The period-to-period changes are as...Read more
During 2018, Tier 1 also...Read more
In addition, the following items...Read more
The increase in fuel costs...Read more
The following table summarizes revenues...Read more
These cost increases were partially...Read more
These increases were offset, in...Read more
We also experienced revenue decline...Read more
Additionally, a volume increase from...Read more
The possibility of changing legal...Read more
Drivers affecting the comparability of...Read more
The following table summarizes the...Read more
We have experienced significant volume...Read more
We monitor the availability of...Read more
Volume Our revenues from volume...Read more
The current year was favorably...Read more
Accounting for landfills requires that...Read more
For debt balances outstanding under...Read more
We define free cash flow...Read more
Any future share repurchases will...Read more
As of December 31, 2018,...Read more
Actual results could differ materially...Read more
The following table summarizes our...Read more
For debt balances outstanding under...Read more
Under current laws and regulations,...Read more
Key items of our 2018...Read more
Our industry is directly affected...Read more
At transition, lessees and lessors...Read more
These charges were partially offset...Read more
Disposal and Franchise Fees and...Read more
Financial Statements, Disclosures and Schedules
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Ticker: WM
CIK: 823768
Form Type: 10-K Annual Report
Accession Number: 0001558370-19-000662
Submitted to the SEC: Thu Feb 14 2019 6:54:21 AM EST
Accepted by the SEC: Thu Feb 14 2019
Period: Monday, December 31, 2018
Industry: Refuse Systems