Waste Management reports record free cash flow, ends Q2 with $137 million cash and equivalents

By Lisa Kerner

Charlotte, N.C., July 29 – Waste Management, Inc. generated its highest free cash flow for the six-month period ended June 30 of $474 million, a $100 million increase from the prior-year period, according to chief financial officer Jim Fish.

Year to date, the company has generated total free cash flow of $931 million (or $665 million, excluding divestiture proceeds), Fish said during Waste Management’s earnings call on Tuesday.

As a result, Waste Management is on track to meet or exceed the upper end of its full-year free cash flow goal of between $1.4 billion and $1.5 billion, said Fish.

During the quarter, the Houston-based collection, recycling and disposal company divested its Puerto Rican operations and other assets for about $100 million. Waste Management also announced the sale of its Wheelabrator business for expected proceeds of $1.85 billion.

While Waste Management had suspended its share repurchase program, Fish said the company now plans to fund a three- to six-month $600 million share purchase program on Aug. 1. The company returned $175 million in dividends to shareholders during the quarter.

Waste Management ended the quarter on June 30 with cash and cash equivalents of $137 million compared to $58 million at Dec. 31.

Debt repayments for the first half of the year totaled $1.93 billion compared to $658 million for the prior-year period, according to a form 10-Q filed with the Securities and Exchange Commission.

The average weighted cost of debt at quarter-end was 4.79%, and the floating-rate portion of the company’s debt was 12%, Fish said.

As of June 30, Waste Management had $517 million of debt maturing within the next 12 months, including $350 million of 6.375% senior notes that mature in March 2015, $102 million of tax-exempt bonds, $105 million of short-term borrowings outstanding under the U.S. revolving credit facility and $905 million of tax-exempt borrowings subject to repricing within the next 12 months, the SEC filing stated.

Waste Management reported second-quarter revenues of $3.56 billion, up 1% from a year ago.

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