Company Press Release
Waste Management Inc. Announces First Quarter Results
HOUSTON--(BUSINESS WIRE)--May 10, 2000--Waste Management Inc. (NYSE:WMI - news) today announced financial results for its first quarter, ended March 31, 2000. Revenues for the quarter were $3.22 billion as compared to $3.07 billion in the year ago period, an increase of 4.8%. The Company reported net income for the first quarter of $55.0 million, or $0.09 per diluted share, compared with $346.7 million, or $0.55 per diluted share, for the first quarter 1999. On a pro forma basis, after adjusting for unusual costs and certain other items discussed below, first quarter 2000 net income was $161.3 million, or $0.26 per diluted share.
The unusual costs and other items adjusted for in the pro forma analysis include: approximately $100 million in consulting fees primarily related to continued stabilization efforts and process improvement initiatives, $79 million for the planned termination of the former Waste Management pension plan, $25 million in additional impairments on held-for-sale assets (primarily related to the international operations), and other unusual expenses of approximately $7 million related principally to employee reimbursements associated with the Employee Stock Purchase Plan. Offsets to these adjustments include a $51 million increase for the addback of suspended depreciation on assets held for sale and the exclusion of $11 million of net gains from asset sales. Additionally, for the pro forma analysis an effective tax rate of 41.7% is utilized. The difference between the pro forma tax rate and the reported results' effective tax rate of 54.1% is primarily due to the asset impairments recorded in the quarter, which are not deductible for tax purposes.
``The Company has continued to make improvements and execute on its strategic plan since year-end results were reported in late March,'' said A. Maurice Myers, chairman, president, and chief executive officer of Waste Management. ``Several new executives have been hired or appointed, the effort to stabilize our systems and accounting processes has reflected continued progress, and the divestiture program has solidly advanced. In fact, the Company has announced agreements for sales of international, non-core, and solid waste assets with proceeds totaling $1.3 billion. The proceeds collected related to the strategic plan are over $500 million, substantially all of which have been received since March 31st and applied to reduce outstanding indebtedness.
``In regards to stabilizing the systems and accounting processes, one piece of evidence is that North American solid waste days sales outstanding further improved to 54 days during the first quarter. Also, total debt outstanding for the Company was reduced by $385 million in the quarter to $11.1 billion,'' Myers added. ``And while you can't actually see this in the numbers, one of the things I am most pleased with is that the quarterly closing process went much more smoothly and predictably this time.''
The Company also noted that important highlights of the first quarter's results include:
Internal growth of 5.3% in the North American solid waste
business, with 1.0%, or $24 million, of that from improved
commodity prices and fuel surcharges
Approximately $13 million in excess fuel cost over budget due
to fuel price variance
Operating cash flow of $675 million (includes a $200 million
tax refund)
Pro forma EBITDA of $883 million
Myers continued, ``As I have said previously, this year will be a transitional year for Waste Management. We will continue to incur unusual expenses during 2000 for accounting and other professional assistance, systems conversions, pension plan termination, and legal related issues. But, we are making progress and remain optimistic about the Company's future.'' |
