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Waste Management CEO David Steiner on the company’s recycling business, the cleanup after Superstorm Sandy and financial benefits of using natural g...
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You don't have to field out in the dumps on this Valentine's Day it -- is great for a company like Waste Management because you guys will all eventually throw out the -- roses.
And the chocolate boxes and all of the presence that got wrapped Waste Management.
Today is giving shareholders a bit of a sweet treat in the form of an annual dividend increase.
And that is despite missing Wall Street expectations for its fourth quarter of let's bring in David Steiner he's Waste Management CEO and president joining me now Fox Business exclusives.
From Houston did great to see you everyone loves a good dividend move don't -- Well I hope it's a happy Valentine's Day for our shareholders and and happy Valentine's Day do you listen and to my wife Judy.
All hi Judy thanks and and we appreciate that you know your company did deliver profit.
But missed Wall Street's expectations.
Lower recycling and waste to energy commodity prices and costs and it as it then.
A drag on the business and how long do you expect that to continue to be -- track.
-- clearly recycling commodity prices and natural gas which drive electricity prices are waste energy plants.
Have been a drag on us now for about for about twelve month.
We expect to see a slight drag from that in 2013.
But we're gonna make up for that by having great cost controls are pricing programs.
And driving that free cash flow you know when you talk about Waste Management the first thing you think about.
Is the generation of free cash and as we said we're gonna grow free cash in 2013 by 33 to 45%.
And generate about one point one to one point two billion dollars in free cash watch out Warren Buffett's looking she loves free cash flow of that.
Well you know.
-- -- through through bill gates foundation.
Are certainly shareholders bars and so they're getting that free cash -- right.
And they're getting the dividend to I'm -- he absolutely loves that green star your company recently announced that it was purchasing.
And this is really one of the largest private recycling operation so you're in the recycling business for real.
Tell us about that I put my basket might -- out every Wednesday and Thursday -- you know I I do the mixing and all of that is America.
Really getting into recycling and went -- you immediately get to see some opportunity there fort making a lot of money for the bottom line.
Absolutely you know we're the largest recycler in North America certainly one of the largest in the world.
And -- -- from our point of view it's not just about recycling is about all the things that we do to extract value from materials right.
When we look at the materials that we put -- -- landfill every year.
They're worth about ten to thirteen billion dollars now were about a thirteen to fourteen billion dollar in revenue company so if we can take those materials and extract value out of them.
Think about all the money that we can create for our shareholders you know it's always good when your at a company.
We can do something that makes sense for your shareholders sure but also makes sense for the environment and that's what recycling -- Out for a stadium though -- -- business guy so that comes first -- you feel that that's an opportunity so you won't be selling any recycling assets.
Absolutely not you know our customers are increasingly asking us to give them solutions that allow them to take the materials that they create.
And put them back into the stream of commerce and so.
-- you know we're gonna do about eight million tonnes with the addition of green star that would go to about 99 and a half million tonnes.
Our ultimate goals to do twenty million tons of recycling but point one.
By 20/20 global market on the calendar let me ask you about sandy hurricane sandy that we it was McDonald one of our reporters we sent around to landfills as.
There was so much debris it was just unbelievable.
In a way the demolition and construction sequence after hurricane sandy walk what kind of not that we want to see anybody benefit from misery but.
Hey again its business will you see a real benefit there at some point.
-- you know its interest in Liz.
You know I have a brother that the firefighter.
And before 2001 my brother was -- the firefighter after September 11 he became joke the hero because we all know.
How we thought about firefighters after September 11.
And we think about sandy I like to think about our folks that are out there on the street -- Without them you wouldn't have the clean up you know when you look at our drivers don't just look at it and say there's a guy going -- picking up the garbage.
Think about what they do for the communities on an everyday basis much less when something like sandy happen so I like to think of our employees.
As the real heroes you know from a financial point of view.
You know with with hurricanes obviously you have a lot of debris that need to pick up and for -- that was about a penny of earnings in the fourth quarter.
You know but we expected to continue a little bit through the first quarter and then you always have the rebuilding cycle luckily that one thing we know about the folks in New York they're gonna rebuild.
And when they rebuild that's going to be good for our business to.
Okay thank you for for addressing that -- your natural gas truck fleet I can't let you go without talking about that because.
You have brought one out here in the past to show us we -- very gonna -- on the opportunities here.
You've -- up that you've -- them they're becoming even more modern.
How is this are real bottom line addition how does this add to your money.
Yet you know for us that the price differential between natural gas and diesel fuel is tremendous.
I'm right now we're we're we're doing compressed natural gas at about.
A dollar 62 a dollar 75 equivalent that that relates to about four dollars a gallon for for diesel such a huge financial benefit but look.
You know it really is what waste management's all about no matter -- -- whether you're talking about recycling or she NG.
We love it when we can do something that's good for the environment and something that's good for our bottom line and that's what CNG trucks are all about for -- Well in the end Waste Management moving higher by wanted to touch down at about 30% here its stock is up 6% -- every year to decent dividend here three point 9% good to see Dave please come back.
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