Waste Management Inc.

The stable rating outlook on Waste Management reflects S&P Global Ratings' expectation that the company's strong position in solid waste services will enable it to maintain good operating performance and financial ratios over the next two years. The outlook encompasses our view that the company will maintain discipline regarding its financial policy decisions, including share repurchases and acquisitions, such that the funds from operations (FFO)-to-adjusted debt ratio remains between 20% and 30% and adjusted debt to EBITDA remains between 3.0x remains 4.0x. We could lower the ratings if an unexpectedly severe economic downturn significantly weakens pricing and volumes of waste services, such that revenue contracts by over 5% and EBITDA margins deteriorate to below 22%, resulting in an FFO to

...Waste Management continues to show resilience through another recession. Waste Management Inc. (WM) managed through the low point of the recession this year, with revenues down almost 10% in the second quarter yet holding adjusted EBITDA margins at about 30%. In the third quarter of 2020, adjusted EBITDA returned to near pre-pandemic levels, despite a large drop off in commercial and industrial volumes that began to return as economies opened up through the summer. WM took an approach to assist their customers through the pandemic instead of maximizing their results, such as pausing price increases and fees for small business customers, and providing a free month of service to certain businesses as they reopened. In response to revenue loss, WM has been able to control costs through actions such as decreased over-time hours, route reductions, and fleet optimizations. Management has stated that many of the cost-reduction actions taken will likely be permanent and will remain post-pandemic....

Full Report