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Industry Analysis: Waste Management Group 10 Amanda Bowling, Bhavik Shah, Jaimin Chokshi. Curtis Anderson, Michael Stewart, Aesha Desai University of North Alabama Management Policy
Table of Contents 1. 2. 3. 4. 5. Executive Summary 6 Industry Profile 8 Trends and Driving Forces 10 Industry Segment Data 11 Solid Waste Segment 14 A. Table 1 Profitability 16 6. 7. Comparative Company Analysis 16 Strategies 17 A. Waste Management 17 B. Allied 17 C. Republic Services 19 8. Core Competencies 20
A. Waste Management 21 B. Allied 21 C. Republic Services 21 9. Products and Services 21 A. Waste Management 21 For Residents 22 For Businesses 22 Transfer Stations 22 Recycling 22 Landfills 23 Waste-to-Energy 23 B. Allied 24 Collection 24 Transfer Stations 24 Recycling 24 Landfills 25 C. Republic Services 25 Collection 25 Transfer Stations 25 Landfills 26 10. Management 26 A. Waste Management 26 B. Allied 27 C. Republic Services 27
Marketing 28 A. Waste Management 28 B. Allied 29 C. Republic Services 29
Technology and R&D 29 Strategic Groups 30
14. Financial Analysis 31 A. General Income Data 31 1. Table 2 Revenue 31-32 2. Table 3 Net Income 32 B. Profitability Ratios 32 1. Gross Profit Margin Table 4 32-33 2. Operating Profit Margin Table 5 33 3. Net Profit Margin Table 6 33-34 4. Return on Assets and Equity Table 7 & 8 34 C. Liquidity Ratios 35 1. Current & Quick Ratio Table 9 & 10 35 D. Leverage Ratios 35 1. Leverage & Return on Equity Table 11 & 12 36 E. Interest Coverage Table 13 36 1. ST Debt Ratio Table 14 36-37 F. Turnover Ratios 37 1. Receivable Turnover Table 15 37 2. Fixed Asset Turnover Table 16 37-38
3. Total Asset Turnover Table 17 38 G. Solvency Ratios 38 1. Solvency Ratio Table 18 39 2. Operating Cash Flow Table 19 39 15. 16. 17. 18. BCG Matrix (Figure 1) & Table 20 41 Global Segment 43 Competition 44 Demographic Forces 46
19. Population Demographics 46 A. Figure 2 48 20. 21. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. Ethnic Mix 48 Socio-cultural Forces 49 Existing Trends 50 Size of Industry 51 Sales and Marketing 51 Technological Forces 53 Role of Research and Development 55 Porter’s Five Forces 57 Intensity of Rivalry 57 Threat of New Entrants 57 Threat of Substitute Products 58 Supplier Power 59 Buyer Power 60 Collective Application of Five Forces Figure 3 60
Mergers and Acquisitions 63 A. Table 22 & Table 23 63-64
Worksheet on Industry Structure 67 A. Tables 24-29 67-74
Complementors 74 Government Regulation 75
37. Conclusion 76 38. Opportunities and Threats 76 39. Industry Attractiveness 77 40. Key Success Factors 78 41. References 80
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Industry Analysis: Waste Management Executive Summary
The waste management industry services individuals, companies, and governments. The industry itself is segmented into the following: water treatment, pollution control,
remediation and consulting services, and solid waste management. The trends in this industry are moving toward being more environmentally focused. Services in the solid waste segment include: recycling, collection, transfer, disposal, and wasteto-energy services. However, only one firm holds the advantage of waste-to-energy technology, Waste Management. The industry is highly regulated being subject to such government acts such as, the Clean Air Act, Clean Water Act, and Solid Waste Disposal Act, to name a few. Overall the waste management industry is profitable, but due to increases in fuel prices and decreases in volume, companies are currently focusing on cost efficiency and price increases to generate most of their profit. Current strategies in the industry focus on cost saving initiatives in order to minimize the amount of cost passed on to the customers. The top three contenders within the solid waste segment are Waste Management Incorporated with 28.5% market share, Allied Waste with 13% market share, and Republic Services with 6.6% market share. However, competition within the solid waste segment is highly fragmented. The industry itself is most likely in the mature stage of its lifecycle, with competition competing
mainly on price. The management of these companies varies from a centralized structure in Waste Management, to a decentralized in Republic and Allied Waste. The financial analysis of this industry includes the liquidity, profitability, leverage, solvency and general income data for the three top competitors. These figures will help you to evaluate the differences in the companies’ structures and returns. A BCG matrix is also provided that visually shows the market share and business growth rate of the firms. Forces such as globalization, demographics, socio-cultural, and technological forces are discussed in regard to industry impact. Porter’s Five Forces is used to discuss industry conditions. In the industry buyer power, supplier power, threat of new entrants, and the threat of substitutes is low. However, there are many competitors in the industry. Complementors include just about anything that has disposable parts. Recent changes in the industry include the possible merger of Allied Waste and Republic Services. This would combine their assets to make them a formidable opponent of Waste Management. Overall the industry displays slow growth potential and would be extremely expensive for new start-up companies. Established companies, such as Waste Management already have the resources and permits required to operate. It would be extremely expensive and difficult for new firms to find landfill space. We
would not recommend a new market entry. For those already established in the industry, although growth is slow, the firms will still be able to make profits, as long as they pursue cost saving initiatives. The major concern for the industry is staying abreast of regulatory changes. Industry Profile The waste management industry is made up of a wide variety of services, including solid waste and hazardous material pickup, water treatment and supply, and pollution products (Scharf, 2008). The private portion of the waste management industry in the United States has over 10,000 companies and annual revenue of $50 billion (Hoover’s, 2008). The other portion of the market is made up by government owned operations. During 2007 the waste and remediation industry employed 351,300 workers (U.S. Department of Labor, 2007). The average worker wages, over all occupations within the industry, is $39,900 a year (U.S. Department of Labor, 2007). This results in a total economic impact of $14 billion in individual earnings and $50 billion in company sales. Gross domestic output during 2006 was $648 billion (U.S. Department of Commerce, 2008). Services in this industry include: collection, treatment and disposal, remediation, recycling, and waste-to-energy plants. Waste collection makes up 55% of industry revenue, treatment and disposal accounts for 20%, and remediation makes
up 15% (Hoover’s, 2008). Over the course of a year over 200 million tons of waste is generated (Hoover’s, 2008). Overall the waste management industry is profitable, but due to increases in fuel prices and decreases in volume companies are currently focusing on cost efficiency and price increases to generate most of their profit. Government regulations impact the waste management segments on varied levels. The larger customers in this industry are generally municipalities, corporations, and individuals (Hoovers, 2008). The industry itself is resistant to recession and has held a steady growth rate of 3% to 4% (Scharf, 2008).
Trends and Driving Forces The current developments and trends throughout the waste management industry are varied among the segments. However, some trends echo throughout the different segments. Cost savings, efficiency, and environmental friendliness seem to be the common elements that link all of the segments. Increases in the regulatory environment are a major determining factor of the industry participants’ strategic goals. The segments that are considered part of the waste management industry include: solid waste management, water treatment, air pollution control, and environmental consulting and remediation services.
Current industry trends in the solid waste disposal segment are focused on the increasing costs of landfills, landfill life extension, how to improve rates and cut costs, regulations affecting intrastate dumping, regulations affecting international dumping, and the continued increase of recycling. Within the water segment, the trend is on increasing the investment in water supply and treatment facilities within the United States. New water treatment plants and the replacement of the existing support structure are needed. Privatization within the water segment is also slowing, but industry trends point to growth within this segment over the next ten years (Scharf, 2008). The air pollution segment is currently seeing an impact from increased regulations on the emission of vehicle pollution, particularly for diesel vehicles. The Clean Air Interstate Rule is in affect for twenty-eight states, and will likely increase the need for emission control equipment (Scharf, 2008). In the remediation segment, government spending has been reduced, and private customers are determining demand. The industry is trending toward a weaker market in some sectors with the loss of government spending (Scharf, 2008). Industry Segment Data The individual segments, within the waste management industry, each face unique structures and problems. The water
segment of waste management is dominated mainly by a monopoly of municipally owned firms. Major companies within the water supply segment include: American Water Works, Aqua America, American States Water, California Water Services Group, and United Water Resources (Scharf, 2008). The water segment in particular, has to meet certain health regulations. Since the government operates most of the water treatment and supply companies, they set the fees. The water segment’s demand is driven by population, industrial development, and weather. However, U.S. population growth is the main driver. Given this, the growth rate of this segment is projected be .9% annually by the U.S. Census Bureau (Hoovers, 2008). Most of the growth in the water segment comes in the form of price hikes. The segment focusing on air pollution control is mainly focused on the reduction of vehicle and industrial emissions. Some of the major firms include Allied Signal, Corning Inc., Englehard, Johnson Matthey, Comfort Systems, Hamon ResearchCottrell, and Clean Harbors (Scharf, 2008). This segment is also regulated by the EPA, and is subject to the federal regulations of the Clean Air Act (Scharf, 2008). Many firms focus on providing products to assist firms and individuals in the reduction of air pollution. The two biggest markets within the air pollution segment are vehicle and industrial pollution control. The main driver of demand in market for air pollution
control is government regulations and the automotive industry demand. Gross domestic product is an indicator of economic activity. It is estimated that GDP will grow at a rate of 1.1% in 2008. In the consulting and remedial arena, demand is driven by government regulations. This segment is concerned with the clean-up and maintenance of primarily industrial customers. The growth rate in this segment is primarily based economic output and government spending. The major companies in this segment include: IT Group, Fluor Corp., Tetra Tech, CH2M Hill, CET Environmental Services, Sevenson Environmental Services, Roy Western, Bechtel Corp., URS Corp., and Earth Tech (Scharf, 2008). The solid waste disposal sector, of waste management, is broken down into five lines by Standard and Poor’s. These lines are waste collection, landfill operation, transfer stations, recycling, and waste-to-energy incineration. Of course the biggest of these being, waste collection. Waste collection can further be broken down into hazardous and non-hazardous collection and recycling (Gale, 2008). The demand for solid waste disposal is driven by economic output and population growth (Scharf, 2008). The determinants of growth would be influenced by GDP, which is expected to grow at a rate of 1.1%, and population growth, which is expected to grow at a rate of .9% (Hoovers, 2008). This will lead the segment growth rate to
be somewhere around these two indicators. However, recent trends affecting the solid waste disposal sector, is the decline of solid waste relating to construction. This can affect waste volumes by as much as 15% to 30%. Trends in this segment are pointing to a continued focus on recycling and waste-to-energy efforts. Fuel efficiency is also a growing concern for this segment, because of the distance to transport the waste to landfills. This segment continues to pass cost onto customers, but is focused on cutting costs to minimize this and reduce the possibility of losing customers. This segment of the waste industry will be the focus of this paper. Solid Waste Segment The three biggest players, that are publicly traded, in this segment are Waste Management Inc., Allied Waste, and Republic Services. All three combined, make up over 90 % of the public company revenues in this segment (Hampton, 2008). They also control over 40% of the market and service approximately 36.5 million customers (Scharf, 2008). As for market share, Waste Management Inc. holds the biggest share with a 28.5% share, Allied Waste controls around 13% of the market, and Republic Services has 6.6% of the market share (Scharf, 2008). Past the point of these three competitors, there is a highly fragmented market with many competitors (Hoover’s, 2008).
Each firm has similar strategies, but different financial data based on their share of the market, price structure, and cost savings initiatives. Revenue growth rates over the prior year are as follows: Waste Management experienced an increase of .5%, Allied Waste had a .8% increase, and Republic Services a 2.9% growth increase (Hoovers, 2008). Revenues for each firm reflect their varying market shares. Waste Management Inc. had revenues of $13.31 billion (Waste Management Incorporated, 2007). Allied Waste had revenues totaling $6.1 billion (Allied Waste, 2007). Republic Services had $3.2 billion in revenue (Republic Services, 2007). Operating income for Waste Management is $2.2 billion, Allied Waste $1.1 billion, and Republic Services $519.5 million. Table one, below, was obtained from Hoovers.com and depicts the profitability percentages of the top three companies, compared against the industry median. The industry median gives the industry average for these measurements. You can see from the table that return is moderate for Waste Management and Republic Services. Allied is behind the other two competitors in every category except gross profit margin. Allied and Republic are at or better than the industry average in gross profit margin and pre-tax profit margin. Allied ranks lower than the industry median in net profit margin, return on equity, return
on assets, and return on invested capital. Waste Management is above the median in all measures, except for gross profit margin. Industr y Median 37.60% 9.30% 6.60% 11.40% 3.10% 3.80%
Profitability Gross profit margin Pre-Tax Profit Margin Net Profit Margin Return on Equity Return on Assets Return on invested Capital Table 1
WMI 36.80% 13.10% 8.80% 20.80% 5.90% 6.60%
Allied 37.60% 9.60% 5.00% 8.00% 2.20% 2.50%
Republic 37.70% 15.60% 9.80% 23.40% 7.00% 8.00%
The solid waste segment is in the middle or mature age of the business life cycle (Scharf, 2008). A major concern for these firms it to now pay down debt that they surmounted during the start-up and growth phases. The strategies, competencies, and other financial indicators will be discussed in detail, in the next section. Comparative Company Analysis
In this section the three primary competitors will be compared in strategies, management, products and services, technology, and financial situation. During this analysis all of the companies will be profiled so that their strengths and weaknesses will be shown. In the waste industry competition is
intense, and given recent merger discussion between Allied Waste and Republic Services, the industry is constantly. Strategies
Waste Management Waste Management’s corporate strategy has remained unchanged in three years. They have focused on revenue growth through pricing, the lowering of operating and selling expenses, lowering general and administrative costs through process standardization and productivity improvements, improving their business units through their “fix or seek exit” strategy, and generating strong and consistent cash flows from operations, to return to shareholders. Waste Management will continue to divest underperforming operations. Three major divestures in 2007 amounted to $230M in revenue with a total of $278M (Waste Management Incorporated Annual Report, 2007). Allied Waste The corporate strategy of Allied Waste has 5 components. The first component of strategy focuses on operating a vertically integrated non-hazardous solid waste service business. The fundamental objective of this model is to control the waste stream from collection point through disposal with optimization of the economies of the waste cycle.
The second component focuses on best practices, within the company. Their goal is to continue, to identify and implement those practices across all operations. The goal is to improve overall operating and financial values. The third component is the increased focus on customer service excellence, through better hiring practices and continual development of existing employees. Their goal is to retain talented employees, by implementing best practices and investing in a quality asset base. The fourth component is to deliver sustainable long-term profitable growth, while efficiently operating our assets to generate acceptable rates of return. This is done by increasing collection and disposal volumes; allocating capital to businesses, markets, and development projects; developing previously non-permitted, non-contiguous landfill sites; acquisitions of operating assets, such as landfills and transfer stations; evaluating existing operating asset deployment, to optimize their position and investment of capital; and seek opportunities to divest assets. The fifth component is to maintain financial capacity and infrastructure for future growth through sufficient operational cash flows, a revolving line of credit, and letter of credit needs (Allied Waste Annual Report, 2007). Republic Services
The financial strategy of Republic includes the generation of free cash flow, and the sustainment or improvement of return on invested capital. This is accomplished through incentive programs and monthly field operating reviews that underscores the importance of increasing free cash flow and returns on capital. Free cash flow is managed through operational oversight to make sure capital investment and asset levels are appropriate for the existing business and growth opportunities. They also closely focus on reviewing working capital, which consists of accounts receivable and accounts payable, to help realize growth strategies. The operating goal of Republic is to leverage existing assets and revenue growth, to increase operating margins and enhance shareholder value. This includes an operating strategy to include: the utilization of their extensive industry knowledge and experience, their decentralized management structure, and their integrated waste operations. The plan is to improve operating margins through economies of scale, create cost efficiencies and asset utilization, achieve high levels of customer satisfaction, and to utilize business information systems to improve consistency in financial and operational performance. The growth strategy is broken down between internal and external growth. The internal growth strategy is focused on
retaining existing customers and obtaining commercial, municipal, and industrial customers through sales and marketing. Their growth strategy also includes the following: price increases across all lines of business, to offset increased costs and to improve operating margins; secure long-term contracts for collecting waste in high-growth markets; add business through existing and prospective commercial, industrial, municipal, and residential customers; identify opportunities to increase their position through development activities. External growth is tailored toward an acquisition strategy that includes acquiring well-managed businesses that position RSG for growth in existing and new markets; and acquiring facilities from municipalities that are privatizing, and publicly owned companies that are divesting of assets (Republic Services Annual Report, 2007).
Core Competencies Waste Management Waste Management’s core competencies are experience, knowledge, and resources. With its experience, human resources, and financial resources in the waste industry, WMI is unmistakably the leader in solid waste management. Allied Waste
Allied Waste’s core competencies include its knowledge of the industry and its management leadership. Currently Allied Waste is in talks with Republic Services about merging. Republic Services Republic Services’ core competencies are its business leadership skills and its strategy. Republic Services is a very patient company with stable finances and a responsible management team. Products and Services
Waste Management provides collection, transfer, recycling, disposal, and waste-to-energy services. WMI customers include residential, commercial, industrial and municipalities, other waste management companies, electric utilities and governmental entities.
Solid Waste Collection Services For Residents WMI offers services including residential recycling, bulky item disposal, yard waste collection, and many other services. Collection issues are handled effectively and efficiently through WMI customer service centers.
For Business WMI provides waste collection services to more than 2 million commercial businesses in North America. In some locations WMI has the capability to offer same-day emergency services to deal with unexpected volumes. Transfer Stations WMI owns and operates 341 transfer stations that serve as efficient way stations between collection points and landfill disposal. At these stations waste is consolidated and compacted for eventual transport to landfills. Recycling WMI processes more recyclables than any other company in North America. Through it subsidiary, WM Recycle America, WMI partners with the local community to process more than 5.5 million tons of recyclable materials each year through its 109 material recovery facilities. For commercial accounts, WMI offers easy and cost-effective recycling through its singlestream recycling, eCycling or shredding, to regional and national bale routes. Landfills WMI owns and operates the largest network of landfills in the industry. As of December 31, 2007, WMI owned or operated 271 solid waste and six hazardous waste landfills. In addition, it managed 187 closed landfills. WMI utilizes Next Generation
Technology that accelerates the decomposition of waste in landfills so that decomposition time is reduced from decades to years. Waste to Energy WMI through its Wheelabrator division has been delivering waste-to-energy projects since the 1970s. The steam that is produced is either sold or used to generate electricity. WMI owns or operates 16 waste-to-energy plants and 5 independent power production plants. Other As of December 31, 2007, WMI was producing commercial quantities of methane gas at 108 of it solid waste landfills, where it is either sold to electricity utilities or to natural gas suppliers. In addition the company through Port-0-Let rents and services outdoor portable restroom facilities, and provides street and parking lot sweeping services to municipalities and commercial customers (WMI Annual Report, 2007). Allied Waste Allied Waste Industries, Inc. provides solid waste collection, transfer, recycling and disposal services for more than 8 million customers. Collection Allied Waste provides collection services under four service lines: commercial, residential, roll-off and recycling
collection. Residential revenue accounted for 28.4% of its collection revenue, while commercial revenue represented 36.2% of its collection revenue. Roll-off collection services represented 30.4% of collection revenue. Recycling accounted for approximately 5% of total collection revenue for 2007. Transfer Stations Allied serves its customers through its use of transfer stations to effectively consolidate solid waste before transport to landfill facilities. On December 31, 2007 Allied Waste owned or operated 161 transfer stations. Recycling Allied Waste operates 53 recycling facilities. Cardboard and paper products represented 73% of its processed recyclable product volume in 2007. Landfills To service its customers Allied Waste owns or operates landfills for its solid waste collection. At the end of 2007, the company had a network of 161 active landfills (AW Annual Report, 2007). Republic Services, Inc. Republic Services operations include the collection, transfer, and disposal of solid waste. Collection
Republic Services provides non-hazardous solid waste collection services for commercial, industrial, municipal and residential customers through 136 collection companies located in 21 states. In 2007 76% of its revenue was from collection services. Revenue within the collection services were as follows: municipal and residential customers, 33.2%; commercial
customers, 39.2%; industrial and others, 27.6%. Transfer Stations As of December 31, 2007, Republic Services owned or operated 94 transfer stations. Waste at these facilities is compacted and transferred to trailers for transport to landfills or recycling facilities.
Landfills Republic Services operates 58 landfills, some of which accept non-hazardous special waste, including utility ash, asbestos and contaminated soil. In addition, Republic Services has 33 recycling facilities and other recycling operations. Recycled materials are salvaged and sold to third parties (RSG Annual Report, 2007). Management Waste Management
Waste Management has a centralized structure. Under corporate management, there are six operating groups, of which four are organized by geographic area and two are organized by function. The geographic groups are Eastern, Midwest, Southern, and Western. The two functional groups are: Wheelabrator and WM
Recycle America (WMRA). Management at WMI has extensive experience in the waste industry, and has through acquisitions expanded their market to become the largest in the business. We believe that management has done a good job in securing WMI’s current position, and taking the necessary steps to strengthen shareholder value through reducing debt and its share buy-back program (WMI Annual Report, 2007).
Allied Waste Allied Waste corporate organization is formed by three areas; corporate, regional, and district. Corporate management defines long-term business plans, outlines business and financial goals, establishes policies and procedures, and monitors performance against goals and standards. Regional management develops and initiates business growth at the regional level and monitors compliance with corporate goals and procedures. District management is responsible for service, and
maintaining vital community relationships. Business unit management is responsible for sales growth and customer service. Allied Waste’s management is in a poor position for growth. It has in the past several years begun addressing the debt problem within its structure, and this has helped. However, the current loan situation does not allow for dividends, so shareholder value can only come through stock appreciation, and eventually shareholder needs have to be addressed. We are not surprised to see AW and Republic Services agreeing to a merger (AW Annual Report, 2007). Republic Services, Inc.
Republic Services management structure is decentralized. RSG relies on its decentralized management structure to minimize administrative overhead costs and to manage its day-to-day operations. There are five regional management teams that include a vice president, controller, sales manager, maintenance manager and an operations manager. The management teams have extensive authority, responsibility and autonomy within their region. Republic Services’ management has been patient in choosing acquisitions that only return sizable profits. Republic’s management has agreed to buy Allied Waste. In doing so, it will increase its territory and customer base to revenues of over 9
billion. This is a bold move for Republic as it hopes to instill its own fiscal discipline into Allied Waste. If the appropriate long-term financing can be secured, and corporate management team assembled, then this will be a good move for both companies (RSG Annual Report, 2007). Marketing
All of the companies in this analysis employ marketing representatives who seek to expand business with existing customers, as well as attract new customers. The following key marketing concepts were taken from each company’s 2007 annual report. Waste Management WMI National Accounts Sales and Service team provides services for national and regional multi-location companies. This was developed in response to needs from customers in various industries. Allied Waste AW has both commercial and municipal representatives who serve their customers as well as develop a base of prospective customers within each market. Republic Services RSG currently has approximately 500 sales and marketing employees in the field who are compensated by a commission
structure that is focused on attracting high levels of quality revenue. Technology, Research and Development
The use of technology in the waste industries is constantly in a state of evolving. Most companies use technology to manage their solid waste streams in a more efficient and cost effective manner. Development in the industry is generally related to building transfer stations and landfill. Development projects in the waste industry require extensive governmental permitting; therefore most companies generally look for acquisitions to expand their disposal sites. Waste Management
WMI has used innovative technologies to reduce environmental emissions, provide a safer work environment, stream-line operational processes and waste-to-energy projects. Key projects include: conversion of more than 425 trucks from
diesel to natural gas; on-board truck computing systems for reducing the need for paper tickets; a highly technical call center who improved and more efficient customer service; Next Generation Technology which accelerates the decomposition of waste in landfills and speeds the production of landfill gas. In addition WMI has deployed FastLane, an automated point-of-sale
system for management of scale house ticketing and Compass, a fleet maintenance system that automates shop functions and repairs (WMI Annual Report, 2007). Allied Waste and Republic Services The majority of Allied Waste and Republic Services use of technology is in the maintenance of their landfills. As the smaller firm Republic Services has no landfill gas projects while Allied Waste has 50 on-going landfill gas projects. Currently neither company has any waste-to-energy facilities. (AW and RSG Annual Report, 2007) Strategic Groups Waste Management, Allied Waste, and Republic Services together manage over fifty percent of the solid waste business in the United States. After these major players the market is highly fragmented with over 10,000 companies in the industry. Many of these companies have operations in small local territories. The main strategic group in this industry is made up of Waste Management, Allied Waste, and Republic Services. Financial Analysis In this section the financial performance of Waste Management will be compared with its top two competitors, Allied Waste and Republic Services. The financial data presented below was compiled from each company’s 2007 annual report and form 10K
from their websites, from Morningstar.com, and Yahoo.com. The majority of the ratios were independently calculated. The financial analysis covers six areas: general income
data, profitability ratios, liquidity ratios, leverage ratios, turnover ratios, and solvency ratios. All of this data was collected from the company websites of Allied Waste, Waste Management, and Republic Services. General income data Revenue As of December 2007, revenues at WMI were 13.31B, down .37% from 2006 (13.36B). Allied Waste (AW) had 2007 revenues of 6.1B up 1.5% from 2006 (6.02B). Republic Services (RSG) revenue for 2007 was 3.19B up 3.9% from 2006 (3.07B).
Revenue - 4 Yr. WMI AW RSG Table 2 Net Income Net income rose at all three companies during 2007. Waste Management’ net income was up 1.2%; Allied Waste had a significant net income increase of 70% from 2006. Republic Waste had a moderate increase of 3.8%. 2004 2005 2006 2007 12,516.0 13,074.0 13,363.0 13,310.0 5,362.0 5,734.8 6,028.8 6,068.7 2,708.1 2,863.9 3,070.6 3,176.2
Net Income - 4 Yr. WMI AW RSG Table 3 Profitability Ratios Profitability ratios show the combined effects of liquidity, asset management, and debt on operating results. 2004 2005 2006 2007 939.0 1,182.0 1,149.0 1,163.0 49.3 203.8 160.9 273.6 237.9 253.7 279.6 290.2
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