Waste Management Inc. (NYSE:WM)

The analysis of the financial data reveals several notable trends in the company's operating performance over the five-year period.

Profitability and Cost Structure

Operating costs as a percentage of operating revenues remained relatively stable, fluctuating slightly between -62.28% and -61.38%, indicating consistent cost control relative to revenues. Gross profit margins exhibited a modest upward trend from 37.72% in 2017 to a peak of 38.62% in 2020, before slightly declining to 38.03% in 2021. This suggests gradual improvement in profitability at the gross level, though the slight dip in the final year requires attention.

Operating Expenses

Selling, general and administrative expenses as a percentage of operating revenues showed some variability, with a decrease from -10.13% in 2017 to -9.74% in 2018, followed by an increase reaching -11.35% in 2020 before settling at -10.4% in 2021. Depreciation and amortization expenses displayed a consistent upward trend, increasing each year from -9.5% in 2017 to -11.15% in 2021, reflecting higher capital investment or asset base adjustments. Restructuring costs were minimal but present from 2018 through 2021, peaking at -0.06% in 2020, indicating intermittent operational adjustments.

Non-Recurring and Unusual Items

Gains and losses from divestitures, asset impairments, and unusual items varied over the period, with positive contributions noted in 2017, 2018, and 2021, but negative impacts in 2019 and 2020. These fluctuations suggest episodic effects on profitability from non-core activities.

Operating Income

Income from operations as a percentage of operating revenues demonstrated a decreasing trend overall, declining from 18.2% in 2017 to a low of 15.99% in 2020, with a partial recovery to 16.54% in 2021. This indicates some pressure on operating profit margins in recent years, potentially due to the increases in depreciation and administrative costs.

Interest and Financing Costs

Net interest expense as a percentage of operating revenues generally declined from -2.51% in 2017 to -2.04% in 2021, suggesting improved management of interest costs relative to revenue size. However, the loss on early extinguishment of debt rose notably in 2019 (-0.55%) and peaked at -1.23% in 2021, which could reflect strategic refinancing activities incurring additional short-term expenses.

Other Income and Expenses

Equity in net losses of unconsolidated entities remained negative throughout the period, fluctuating around -0.2% to -0.47%, indicating consistent small losses in these investments. Other income (expense), net, stayed negative with some variability, ranging from -3.07% to -3.89%, suggesting ongoing non-operational expenses impacting overall profitability.

Net Income and Taxation

Income before income taxes followed a declining trajectory from 15.93% in 2018 to 12.44% in 2020, with a slight improvement to 13.1% in 2021. Income tax expense as a percentage of operating revenues saw fluctuations, notably increasing to -3.04% in 2018, then moderating thereafter. Consolidated net income experienced a consistent decline from 13.46% in 2017 to a low of 9.83% in 2020, with a modest rebound to 10.13% in 2021. Correspondingly, net income attributable to the company followed the same pattern.