Waste Management Announces Fourth Quarter and Full Year 2007 Earnings
Waste Management Announces Fourth Quarter and Full Year 2007 Earnings Increases Earnings per Diluted Share by 32.6% in Fourth Quarter of 2007 Expands Full Year 2007 Income from Operations as a Percent of Revenue by Over 170 Basis Points HOUSTON — February 13, 2008 — Waste Management, Inc. (NYSE: WMI) today announced financial results for its fourth quarter and for the year ended December 31, 2007. Revenues for the fourth quarter 2007 were $3.36 billion compared with $3.28 billion in the 2006 period, an increase of 2.4%. Net income for the quarter was $309 million, or $0.61 per diluted share, compared with $246 million, or $0.46 per diluted share, for the fourth quarter 2006, or a 32.6% increase in earnings per diluted share. The Company noted several items that impacted the results in the 2006 and 2007 fourth quarters. Excluding these items, net income would have been $276 million, or $0.54 per diluted share, in the fourth quarter of 2007 compared with $252 million, or $0.47 per diluted share, in the fourth quarter of 2006, or a 14.9% increase in earnings per diluted share.(a) Income from operations as a percent of revenue, as adjusted for these items, increased 150 basis points to 16.9% in the fourth quarter of 2007 compared with 15.4% in the fourth quarter of 2006.(a) Results in the fourth quarter of 2007 included a net $0.07 per diluted share benefit consisting of: • A $31 million income tax benefit resulting primarily from reductions in the Canadian income tax rate.
• A $7 million benefit in net income due to gains from divestitures of operations.
• A $5 million reduction in net income related to labor disruptions in California.
Results in the fourth quarter of 2006 included a net charge of $0.01 per diluted share consisting of after-tax charges of $24 million for asset impairments and unusual items partially offset by a combined $18 million benefit to net income from income tax related items. “We ended the year on a strong note and are poised for additional earnings growth in 2008. We grew revenues by 2.4% during the fourth quarter due mainly to our disciplined approach to pricing, which led to internal revenue growth on base business from yield of 3.3%, and the strength of recycling commodity prices. Partially offsetting these increases were revenue declines caused by lower volumes of 3.8%, primarily in the collection lines of business, as well as the impact of divestitures of certain under-performing operations,” stated David P. Steiner, Chief Executive Officer of Waste Management. “We are pleased with our accomplishments in both the fourth quarter and the full year as we exceeded our expectations for earnings per share growth, margin expansion and the generation of free cash flow.” For the full year 2007, the Company reported revenues of $13.31 billion compared with $13.36 billion in 2006. Earnings per diluted share were $2.23 for the full year 2007 compared with $2.10 for the full year 2006. Income from operations as a percent of revenue increased 170 basis points to 16.9% for the full year of 2007. During fiscal years 2006 and 2007, the Company noted in its earnings press releases a number of items that impacted the full-year results. Excluding the 2007 items, earnings per diluted share were an adjusted $2.07 for the full year 2007. Excluding the 2006 items, earnings per diluted share were an adjusted $1.81 for the full year 2006. On this basis, earnings per diluted share increased 14% during 2007.(a) Steiner continued, “We generated $593 million in net cash from operating activities and $146 million of free