Waste Management Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income attributable to Waste Management, Inc.	1,816)	1,496)	1,670)	1,925)	1,949)
Net (income) loss attributable to noncontrolling interests	1)	—)	1)	(2)	—)
Net noncash charges	2,395)	2,234)	2,123)	1,676)	1,429)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures	126)	(327)	80)	(29)	(198)
Net cash provided by operating activities	4,338)	3,403)	3,874)	3,570)	3,180)
Interest paid, net of capitalized interest, net of tax¹	299)	364)	315)	273)	246)
Capitalized interest, net of tax²	10)	13)	17)	13)	10)
Capital expenditures	(1,904)	(1,632)	(1,818)	(1,694)	(1,509)
Free cash flow to the firm (FCFF)	2,744)	2,148)	2,388)	2,162)	1,927)

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
FCFF	Free cash flow to the firm is the cash flow available to the Waste Management Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Waste Management Inc. FCFF decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Waste Management Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR¹	22.62%	20.94%	20.61%	19.55%	35.18%
Interest Paid, Net of Tax
Interest paid, net of capitalized interest, before tax	387)	461)	397)	339)	380)
Less: Interest paid, net of capitalized interest, tax²	88)	97)	82)	66)	134)
Interest paid, net of capitalized interest, net of tax	299)	364)	315)	273)	246)
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax	13)	16)	21)	16)	15)
Less: Capitalized interest, tax³	3)	3)	4)	3)	5)
Capitalized interest, net of tax	10)	13)	17)	13)	10)

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).

¹ See details »

² 2021 Calculation
Interest paid, net of capitalized interest, tax = Interest paid, net of capitalized interest × EITR
= 387 × 22.62% = 88

³ 2021 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 13 × 22.62% = 3

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Waste Management Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	72,442)
Free cash flow to the firm (FCFF)	2,744)
Valuation Ratio
EV/FCFF	26.40
Benchmarks
EV/FCFF, Industry
Industrials	31.59

Based on: 10-K (reporting date: 2021-12-31).

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Waste Management Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	72,442)	60,043)	62,701)	51,852)	45,929)
Free cash flow to the firm (FCFF)²	2,744)	2,148)	2,388)	2,162)	1,927)
Valuation Ratio
EV/FCFF³	26.40	27.95	26.26	23.99	23.83
Benchmarks
EV/FCFF, Industry
Industrials	28.18	65.99	30.06	—	—

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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² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 72,442 ÷ 2,744 = 26.40

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Waste Management Inc. EV/FCFF ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Waste Management Inc. (NYSE:WM)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical