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Waste Management Inc. (NYSE:WM)

This company has been moved to the archive! The financial data has not been updated since February 15, 2022.

Common-Size Income Statement

Waste Management Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Operating revenues 100.00 100.00 100.00 100.00 100.00
Operating costs -61.97 -61.38 -61.44 -62.02 -62.28
Gross profit 38.03% 38.62% 38.56% 37.98% 37.72%
Selling, general and administrative -10.40 -11.35 -10.55 -9.74 -10.13
Depreciation and amortization -11.15 -10.98 -10.18 -9.90 -9.50
Restructuring -0.04 -0.06 -0.04 -0.03 0.00
Gain (loss) from divestitures, asset impairments and unusual items, net 0.09 -0.23 -0.27 0.39 0.11
Income from operations 16.54% 15.99% 17.51% 18.70% 18.20%
Interest expense -2.09 -3.00 -3.00 -2.57 -2.54
Interest income 0.06 0.21 0.34 0.07 0.03
Interest expense, net -2.04% -2.79% -2.66% -2.51% -2.51%
Loss on early extinguishment of debt, net -1.23 -0.35 -0.55 0.00 -0.04
Equity in net losses of unconsolidated entities -0.20 -0.45 -0.36 -0.27 -0.47
Other, net 0.03 0.03 -0.32 0.01 -0.06
Other income (expense) -3.44% -3.56% -3.89% -2.77% -3.07%
Income before income taxes 13.10% 12.44% 13.62% 15.93% 15.13%
Income tax expense -2.97 -2.61 -2.81 -3.04 -1.67
Consolidated net income 10.13% 9.83% 10.81% 12.89% 13.46%
Net (income) loss attributable to noncontrolling interests -0.01 0.00 -0.01 0.01 0.00
Net income attributable to Waste Management, Inc. 10.13% 9.83% 10.81% 12.91% 13.46%

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).

An analysis of the common-size income statement reveals a gradual compression of net profit margins over the five-year period from 2017 to 2021. While gross profitability remained relatively stable, the consolidated net income attributable to Waste Management, Inc. declined from 13.46% of operating revenues in 2017 to 10.13% in 2021.

Gross Profitability and Direct Costs
Operating costs have remained consistent, fluctuating narrowly between 61.38% and 62.28% of revenues. This stability resulted in a gross profit margin that hovered around 38%, peaking at 38.62% in 2020 before retreating slightly to 38.03% in 2021. This suggests a strong and predictable ability to manage direct costs relative to revenue growth.
Operating Expense Trends
Operating income margins experienced a downward trend, moving from 18.20% in 2017 to 16.54% in 2021. This contraction is primarily driven by a steady increase in depreciation and amortization, which rose from 9.50% to 11.15% of revenues over the period, indicating an expanding capital asset base. Additionally, selling, general, and administrative expenses showed volatility, peaking at 11.35% in 2020.
Non-Operating Expenses and Financial Costs
Net interest expenses remained relatively stable for most of the period but showed a notable improvement in 2021, decreasing to 2.04% of revenues from a high of 2.79% in 2020. However, losses on the early extinguishment of debt became more pronounced in 2021, reaching 1.23% of operating revenues, which offset some of the gains from reduced interest expenses.
Net Income and Tax Impact
Income before income taxes declined from a peak of 15.93% in 2018 to 13.10% in 2021. The effective tax expense as a percentage of revenues increased from 1.67% in 2017 to a range of 2.61% to 3.04% in subsequent years. The cumulative effect of rising depreciation, fluctuating SG&A, and increased tax burdens contributed to the overall reduction in the bottom-line margin.

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