Profitability
· Total Company operating EBITDA was $987 million for the first quarter of 2019, an increase of $32
million, or 3.4%, from the first quarter of 2018. The Company achieved this increase without the benefit
of the expired federal natural gas fuel credits that added $28 million to operating EBITDA in the first
quarter of 2018.
· Operating EBITDA in the Company’s collection and disposal business increased $76 million, or about
7.0%, in the first quarter of 2019 when compared to the first quarter of 2018.
Revenue Growth
· In the first quarter of 2019, revenue growth was driven by strong yield and volume growth in the
Company’s collection and disposal business, which contributed $190 million of incremental revenue.
This was partially offset by a $16 million decline in revenue from the Company’s recycling line of
business on a year-over-year basis in the first quarter of 2019.
Core price for the first quarter of 2019 was 5.8%, compared to 4.9% in the first quarter of 2018.
· Internal revenue growth from yield for the collection and disposal business was 2.7% for the first quarter
of 2019 versus 2.3% in the first quarter of 2018.
· Collection and disposal business internal revenue growth from volume was 3.6%, or 4.1% on a workday
adjusted basis, in the first quarter of 2019. Total Company internal revenue growth from volume, which
includes our recycling business, was 3.4%, or 4.0% on a workday adjusted basis, in the first quarter of
2019.
Recycling
· Average recycling commodity prices at the Company’s facilities were approximately 28% lower in the
first quarter of 2019 compared to the prior year period. Recycling brokerage volumes increased 7.1% in
the first quarter of 2019 on a workday adjusted basis.
· Operating EBITDA in the Company’s recycling line of business improved by $11 million from breakeven
in the first quarter of 2018. The improvement was driven by the Company’s efforts to develop a
sustainable business model that meets customers’ environmental needs.
Cost Management
· As a percent of revenue, total Company operating expenses were 62.2% in both the first quarter of
2019 and 2018. The Company’s focus on improving efficiency in its collection business, controlling
costs and maintaining discipline in its pricing programs delivered margin expansion sufficient to offset
an 80-basis point headwind from federal natural gas fuel credits received in 2018.
· As a percentage of revenue, SG&A expenses were 11.1% in the first quarter of 2019 compared to
10.6% in the first quarter of 2018. The increase was primarily related to planned investments in
technology as well as litigation reserves.
Free Cash Flow & Capital Allocation
· Net cash provided by operating activities was $890 million in the first quarter of 2019, an increase of
$81 million, or 10.0%, when compared to the first quarter of 2018.
· Capital expenditures were $471 million in the first quarter of 2019, a $71 million increase from the first
quarter of 2018.
· Free cash flow was $431 million in the first quarter of 2019 compared to $423 million in the first quarter
of 2018.
· The Company paid $223 million of dividends to shareholders. Cash allocated to share repurchases of
$68 million in the first quarter of 2019 was less than both prior year and the Company’s plan due to
completed and contemplated acquisition spending.
· The Company spent $394 million on acquisitions during the first quarter of 2019.
Taxes
· The Company’s effective tax rate for the first quarter of 2019 was approximately 24.8%. On an
adjusted basis, the Company’s tax rate was 22.2%. The Company expects its 2019 full-year adjusted
tax rate to be approximately 24%.
Fish concluded, “We are poised for another successful year at Waste Management. As we indicated when we
announced our agreement to acquire Advanced Disposal Services last week, exclusive of acquisition-related
considerations, we are on track to achieve our full-year 2019 guidance of adjusted earnings per diluted share of
between $4.28 and $4.38, adjusted operating EBITDA of between $4.40 and $4.45 billion, and free cash flow of
between $2.025 and $2.075 billion.”
#1 de 1
