Waste Management, Inc. · NYSE:WM
Waste Management — Friedman Billings Ramsey Investor Conference 2008
31 slides from Waste Management's conference presentation, Nov 26, 2008
Slide 1: Waste Management, Inc. Friedman Billings Ramsey Investor Conference
Waste Management, Inc. Friedman Billings Ramsey Investor Conference December 2, 2008
Slide 2: Forward-Looking Statement
Certain statements provided in this presentation are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When we use words like "may," "should," "could," "will," "likely," "believe," "expect," "anticipat
Slide 3: Non-GAAP Financial Measures
This presentation contains (a) Income from Operations (EBIT) and Income from Operations as a Percentage of Revenue (EBIT Margin), Operating Expenses and Operating Expenses as a Percentage of Revenue, and earnings per diluted share, all as adjusted to exclude the impact of asset impairments and unusu
Slide 4: Pricing and Operational Excellence
Pricing and Operational Excellence
Slide 5: Operating Strategies Linked to Financial Objectives
Operating Strategies Linked to Financial Objectives Profitable Revenue Growth Driven primarily by disciplined approach to pricing Sales force and customer service initiatives designed to increase customer retention and selective acquisition of new accounts Cost Controls through Operational Excellenc
Slide 6: Profitable Revenue Growth
Profitable Revenue Growth During 2008, we have continued to focus on our disciplined approach to pricing "Same store" year-over-year collection price increases are the largest drivers of yield In addition, we benefited from our environmental fee increase from 3.0% to 4.2% New business pricing and se
Slide 7: Fuel Surcharge and Commodity Pricing
Fuel Surcharge and Commodity Pricing Fuel surcharge and commodity pricing are not included in core yield Fuel surcharge is designed to offset fuel price changes Provided additional yield for the first three quarters of 2008: 1.2%, 2.2% and 2.3% Surcharge is updated weekly based on the national avg.
Slide 8: Operational Excellence
Operational Excellence During 2008, we continue to control costs through gains in productivity, maintenance and safety Safety remains a cornerstone to our operating success Primary driver of savings in risk management Utilize training and routing tools to improve collection productivity Critical to
Slide 9: Q3 2008 Operating Costs (as a % of revenue)
Q3 2008 Operating Costs (as a % of revenue)
Slide 10: Operating Costs as a % of Revenue
Year 2005 0.66 2006 0.643 2007 0.631 Operating Costs as a % of Revenue
Slide 11: Safety: Total Recordable Injury Rate (TRIR)
Safety: Total Recordable Injury Rate (TRIR) 2000 2001 2002 2003 2004 2005 2006 2007 YTD 3Q 08 21 14.8 11.3 8.8 7.6 6.1 4.8 4.3 3.7 Our Safety Performance has Driven the Reduction in our Risk Management Costs 23.4% 22.0% 13.8% 19.2% 22.2% 2000 - Q3 2008 Improvement of 82% = YOY Improvement 30.0% 10.4
Slide 12: Reduction in Average Driver Hours
Reduction in Average Driver Hours Driver Hours per Workday 5.2% year-over- year improvement from 3Q 2007 due to a combination of divestitures, flexing down of routes and productivity improvements
Slide 13: Financial Review
Financial Review
Slide 14: Summary of 3Q 2008 - Earnings & Margins
Summary of 3Q 2008 - Earnings & Margins EPS grew 16.7% from 54 cents to 63 cents Income from Ops (adjusted) grew 7.4% from $591 to $635 million. Margins expanded 60 bps to 18.0% Adjusting for diesel fuel prices, IFO margins grew 100 bps to 18.4% Our broad geographic and business mix continues to be
Slide 15: Adj. Income From Ops - Rolling Quarters
Adj. Income From Ops - Rolling 4 Quarters Strong and Consistent Trajectory Income from Operations for each quarter has been adjusted for Income/Expense from Divestitures, Asset Impairments and Unusual Items and Restructuring line items, as presented in our quarterly income statements. See slide 26 f
Slide 16: Adjusted Income from Ops Margin Trends
Q1 Q2 Q3 Q4 2005 0.12 0.142 0.153 0.151 2006 0.135 0.158 0.168 0.154 2007 0.151 0.179 0.174 0.169 2008 0.156 0.181 0.18 Income from Operations as a percent of revenue as adjusted. See slides 23-25 for the reconciliation of this non- GAAP financial measure to its corresponding GAAP financial measure.
Slide 17: Return on Invested Capital
Year Return on Invested Capital See slide 27 for the calculation of ROIC based on the WMI Long-Term Incentive Plan formula.
Slide 18: Free Cash Flow
Year 2005 1405 2006 1451 2007 1506 Free Cash Flow $ in Millions Free cash flow is a non-GAAP financial measure. See slide 28 for the reconciliation of this non-GAAP financial measure to its corresponding GAAP financial measure.
Slide 19: Debt Maturities & Liquidity
Debt Maturities & Liquidity
Slide 20: Debt Maturities and Liquidity Needs
Debt Maturities and Liquidity Needs We generate strong and consistent free cash flow $1.2 billion of free cash flow generated YTD through 9/30/2008 Cash on hand exceeds $500 million Do not have seasonal working capital needs Senior note for $386 million matured in November We paid this note utilizin
Slide 21: Waste Management Investment Thesis
Waste Management Investment Thesis Recession resistant business Strong consistent cash flows Proven track record of maintaining pricing discipline Culture of operational excellence with ability to flex down costs
Slide 22: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures
Slide 23: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures ($ in Millions Un-audited)
Slide 24: Reconciliation of Certain Non-GAAP Measures
($ in Millions Un-audited) Reconciliation of Certain Non-GAAP Measures
Slide 25: Reconciliation of Certain Non-GAAP Measures
($ in Millions Un-audited) Reconciliation of Certain Non-GAAP Measures
Slide 26: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures
Slide 27: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures
Slide 28: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures
Slide 29: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures ($ in Millions Un-audited)
Slide 30: Reconciliation of Certain Non-GAAP Measures
Reconciliation of Certain Non-GAAP Measures ($ in Millions Un-audited)
Slide 31: Waste Management, Inc. Friedman Billings Ramsey Investor Conference
Waste Management, Inc. Friedman Billings Ramsey Investor Conference December 2, 2008
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