Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Waste Management Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Goodwill	9,028)	8,994)	6,532)	6,430)	6,247)
Customer and supplier relationships	1,355)	1,436)	906)	949)	880)
Covenants not-to-compete	43)	68)	72)	60)	48)
Licenses, permits and other	142)	142)	110)	109)	124)
Intangible assets, gross	1,540)	1,646)	1,088)	1,118)	1,052)
Accumulated amortization	(642)	(622)	(567)	(546)	(505)
Intangible assets, net	898)	1,024)	521)	572)	547)
Goodwill and other intangible assets	9,926)	10,018)	7,053)	7,002)	6,794)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Waste Management Inc. goodwill increased from 2019 to 2020 and from 2020 to 2021.
Intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Waste Management Inc. intangible assets, net increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Goodwill and other intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Waste Management Inc. goodwill and other intangible assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Waste Management Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	29,097)	29,345)	27,743)	22,650)	21,829)
Less: Goodwill	9,028)	8,994)	6,532)	6,430)	6,247)
Total assets (adjusted)	20,069)	20,351)	21,211)	16,220)	15,582)
Adjustment to Total Waste Management, Inc. Stockholders’ Equity
Total Waste Management, Inc. stockholders’ equity (as reported)	7,124)	7,452)	7,068)	6,275)	6,019)
Less: Goodwill	9,028)	8,994)	6,532)	6,430)	6,247)
Total Waste Management, Inc. stockholders’ equity (adjusted)	(1,904)	(1,542)	536)	(155)	(228)
Adjustment to Net Income Attributable To Waste Management, Inc.
Net income attributable to Waste Management, Inc. (as reported)	1,816)	1,496)	1,670)	1,925)	1,949)
Add: Goodwill impairment charges	—)	—)	27)	—)	34)
Net income attributable to Waste Management, Inc. (adjusted)	1,816)	1,496)	1,697)	1,925)	1,983)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Waste Management Inc., Financial Data: Reported vs. Adjusted

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Waste Management Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	10.13%	9.83%	10.81%	12.91%	13.46%
Adjusted net profit margin	10.13%	9.83%	10.98%	12.91%	13.69%
Total Asset Turnover
Reported total asset turnover	0.62	0.52	0.56	0.66	0.66
Adjusted total asset turnover	0.89	0.75	0.73	0.92	0.93
Financial Leverage
Reported financial leverage	4.08	3.94	3.93	3.61	3.63
Adjusted financial leverage	—	—	39.57	—	—
Return on Equity (ROE)
Reported ROE	25.49%	20.08%	23.63%	30.68%	32.38%
Adjusted ROE	—	—	316.60%	—	—
Return on Assets (ROA)
Reported ROA	6.24%	5.10%	6.02%	8.50%	8.93%
Adjusted ROA	9.05%	7.35%	8.00%	11.87%	12.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Waste Management Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Waste Management Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Waste Management Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Waste Management Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Waste Management, Inc.	1,816)	1,496)	1,670)	1,925)	1,949)
Operating revenues	17,931)	15,218)	15,455)	14,914)	14,485)
Profitability Ratio
Net profit margin¹	10.13%	9.83%	10.81%	12.91%	13.46%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Waste Management, Inc.	1,816)	1,496)	1,697)	1,925)	1,983)
Operating revenues	17,931)	15,218)	15,455)	14,914)	14,485)
Profitability Ratio
Adjusted net profit margin²	10.13%	9.83%	10.98%	12.91%	13.69%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net income attributable to Waste Management, Inc. ÷ Operating revenues
= 100 × 1,816 ÷ 17,931 = 10.13%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Operating revenues
= 100 × 1,816 ÷ 17,931 = 10.13%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Waste Management Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Operating revenues	17,931)	15,218)	15,455)	14,914)	14,485)
Total assets	29,097)	29,345)	27,743)	22,650)	21,829)
Activity Ratio
Total asset turnover¹	0.62	0.52	0.56	0.66	0.66
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Operating revenues	17,931)	15,218)	15,455)	14,914)	14,485)
Adjusted total assets	20,069)	20,351)	21,211)	16,220)	15,582)
Activity Ratio
Adjusted total asset turnover²	0.89	0.75	0.73	0.92	0.93

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Operating revenues ÷ Total assets
= 17,931 ÷ 29,097 = 0.62

² Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 17,931 ÷ 20,069 = 0.89

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Waste Management Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	29,097)	29,345)	27,743)	22,650)	21,829)
Total Waste Management, Inc. stockholders’ equity	7,124)	7,452)	7,068)	6,275)	6,019)
Solvency Ratio
Financial leverage¹	4.08	3.94	3.93	3.61	3.63
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	20,069)	20,351)	21,211)	16,220)	15,582)
Adjusted total Waste Management, Inc. stockholders’ equity	(1,904)	(1,542)	536)	(155)	(228)
Solvency Ratio
Adjusted financial leverage²	—	—	39.57	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Waste Management, Inc. stockholders’ equity
= 29,097 ÷ 7,124 = 4.08

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Waste Management, Inc. stockholders’ equity
= 20,069 ÷ -1,904 = —

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Waste Management, Inc.	1,816)	1,496)	1,670)	1,925)	1,949)
Total Waste Management, Inc. stockholders’ equity	7,124)	7,452)	7,068)	6,275)	6,019)
Profitability Ratio
ROE¹	25.49%	20.08%	23.63%	30.68%	32.38%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Waste Management, Inc.	1,816)	1,496)	1,697)	1,925)	1,983)
Adjusted total Waste Management, Inc. stockholders’ equity	(1,904)	(1,542)	536)	(155)	(228)
Profitability Ratio
Adjusted ROE²	—	—	316.60%	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income attributable to Waste Management, Inc. ÷ Total Waste Management, Inc. stockholders’ equity
= 100 × 1,816 ÷ 7,124 = 25.49%

² Adjusted ROE = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Adjusted total Waste Management, Inc. stockholders’ equity
= 100 × 1,816 ÷ -1,904 = —

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Waste Management, Inc.	1,816)	1,496)	1,670)	1,925)	1,949)
Total assets	29,097)	29,345)	27,743)	22,650)	21,829)
Profitability Ratio
ROA¹	6.24%	5.10%	6.02%	8.50%	8.93%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Waste Management, Inc.	1,816)	1,496)	1,697)	1,925)	1,983)
Adjusted total assets	20,069)	20,351)	21,211)	16,220)	15,582)
Profitability Ratio
Adjusted ROA²	9.05%	7.35%	8.00%	11.87%	12.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income attributable to Waste Management, Inc. ÷ Total assets
= 100 × 1,816 ÷ 29,097 = 6.24%

² Adjusted ROA = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Adjusted total assets
= 100 × 1,816 ÷ 20,069 = 9.05%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Waste Management Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Waste Management Inc. (NYSE:WM)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Waste Management Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Waste Management Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)