Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONDENSED CONSOLIDATING BALANCE SHEETS

September 30, 2014

(Unaudited)


	WM		WM Holdings		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	183	$	—		$	183
Investments in and advances to affiliates(a)		—		1,216		—		(1,216	)		—
Other current assets(a)		—		6		3,927		—			3,933

		—		1,222		4,110		(1,216	)		4,116
Property and equipment, net		—		—		10,849		—			10,849
Investments in and advances to affiliates		16,669		16,400		5,292		(38,361	)		—
Other assets		41		28		7,177		—			7,246

Total assets	$	16,710	$	17,650	$	27,428	$	(39,577	)	$	22,211


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	946	$	—	$	195	$	—		$	1,141
Accounts payable and other current liabilities(a)		68		5		2,575		—			2,648

		1,014		5		2,770		—			3,789
Long-term debt, less current portion		5,567		449		3,007		—			9,023
Due to affiliates		4,765		527		—		(5,292	)		—
Other liabilities		—		—		3,736		—			3,736

Total liabilities		11,346		981		9,513		(5,292	)		16,548
Equity:
Stockholders’ equity		5,364		16,669		17,616		(34,285	)		5,364
Noncontrolling interests		—		—		299		—			299

		5,364		16,669		17,915		(34,285	)		5,663

Total liabilities and equity	$	16,710	$	17,650	$	27,428	$	(39,577	)	$	22,211

(a)

Amounts reported for Non-Guarantor Subsidiaries include $1.9 billion of assets and $0.4 billion of liabilities associated with our Wheelabrator business, which are reflected in “Businesses held-for-sale” in our Condensed Consolidated Balance Sheet. The related ownership for WM Holdings’ net investment is reported in current assets. Refer to Note 9 for additional information.

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2013


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	58	$	—		$	58
Other current assets		—		6		2,435		—			2,441

		—		6		2,493		—			2,499
Property and equipment, net		—		—		12,344		—			12,344
Investments in and advances to affiliates(b)		15,802		16,845		4,268		(36,915	)		—
Other assets		42		12		7,706		—			7,760

Total assets	$	15,844	$	16,863	$	26,811	$	(36,915	)	$	22,603


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	587	$	—	$	139	$	—		$	726
Accounts payable and other current liabilities		109		13		2,166		—			2,288

		696		13		2,305		—			3,014
Long-term debt, less current portion		5,772		449		3,279		—			9,500
Due to affiliates(b)		3,669		599		—		(4,268	)		—
Other liabilities		—		—		4,087		—			4,087

Total liabilities		10,137		1,061		9,671		(4,268	)		16,601
Equity:
Stockholders’ equity		5,707		15,802		16,845		(32,647	)		5,707
Noncontrolling interests		—		—		295		—			295

		5,707		15,802		17,140		(32,647	)		6,002

Total liabilities and equity	$	15,844	$	16,863	$	26,811	$	(36,915	)	$	22,603

(b)

In conjunction with the preparation of our September 30, 2014 Condensed Consolidating Financial Statements, we identified corrections associated with the presentation of affiliate obligations previously reported in WM and WM Holdings’ “Investments in and advances to affiliates”. Accordingly, the 2013 Condensed Consolidating Balance Sheet included herein has been revised.

Condensed Consolidating Statements of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2014

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,602		$	—		$	3,602
Costs and expenses		—			—			3,056			—			3,056

Income from operations		—			—			546			—			546

Other income (expense):
Interest expense, net		(89	)		(8	)		(19	)		—			(116	)
Equity in earnings of subsidiaries, net of taxes		324			329			—			(653	)		—
Other, net		—			—			(16	)		—			(16	)

		235			321			(35	)		(653	)		(132	)

Income before income taxes		235			321			511			(653	)		414
Provision for (benefit from) income taxes		(35	)		(3	)		171			—			133

Consolidated net income		270			324			340			(653	)		281
Less: Net income attributable to noncontrolling interests		—			—			11			—			11

Net income attributable to Waste Management, Inc.	$	270		$	324		$	329		$	(653	)	$	270

Three Months Ended September 30, 2013

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,621		$	—		$	3,621
Costs and expenses		—			—			3,044			—			3,044

Income from operations		—			—			577			—			577

Other income (expense):
Interest expense, net		(88	)		(8	)		(23	)		—			(119	)
Equity in earnings of subsidiaries, net of taxes		344			349			—			(693	)		—
Other, net		—			—			(6	)		—			(6	)

		256			341			(29	)		(693	)		(125	)

Income before income taxes		256			341			548			(693	)		452
Provision for (benefit from) income taxes		(35	)		(3	)		193			—			155

Consolidated net income		291			344			355			(693	)		297
Less: Net income attributable to noncontrolling interests		—			—			6			—			6

Net income attributable to Waste Management, Inc.	$	291		$	344		$	349		$	(693	)	$	291

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued)

Nine Months Ended September 30, 2014

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	10,559		$	—		$	10,559
Costs and expenses		—			(34	)		9,046			—			9,012

Income from operations		—			34			1,513			—			1,547

Other income (expense):
Interest expense, net		(263	)		(24	)		(65	)		—			(352	)
Equity in earnings of subsidiaries, net of taxes		867			848			—			(1,715	)		—
Other, net		—			—			(43	)		—			(43	)

		604			824			(108	)		(1,715	)		(395	)

Income before income taxes		604			858			1,405			(1,715	)		1,152
Provision for (benefit from) income taxes		(104	)		(9	)		525			—			412

Consolidated net income		708			867			880			(1,715	)		740
Less: Net income attributable to noncontrolling interests		—			—			32			—			32

Net income attributable to Waste Management, Inc.	$	708		$	867		$	848		$	(1,715	)	$	708

Nine Months Ended September 30, 2013

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	10,483		$	—		$	10,483
Costs and expenses		—			1			8,993			—			8,994

Income from operations		—			(1	)		1,490			—			1,489

Other income (expense):
Interest expense, net		(268	)		(24	)		(69	)		—			(361	)
Equity in earnings of subsidiaries, net of taxes		865			881			—			(1,746	)		—
Other, net		—			—			(31	)		—			(31	)

		597			857			(100	)		(1,746	)		(392	)

Income before income taxes		597			856			1,390			(1,746	)		1,097
Provision for (benefit from) income taxes		(106	)		(9	)		483			—			368

Consolidated net income		703			865			907			(1,746	)		729
Less: Net income attributable to noncontrolling interests		—			—			26			—			26

Net income attributable to Waste Management, Inc.	$	703		$	865		$	881		$	(1,746	)	$	703

Condensed Consolidating Statements of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	WM		WM Holdings		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Three Months Ended September 30, 2014
Comprehensive income	$	271	$	324	$	281	$	(653	)	$	223
Less: Comprehensive income attributable to noncontrolling interests		—		—		11		—			11

Comprehensive income attributable to Waste Management, Inc.	$	271	$	324	$	270	$	(653	)	$	212

Three Months Ended September 30, 2013
Comprehensive income	$	292	$	344	$	389	$	(693	)	$	332
Less: Comprehensive income attributable to noncontrolling interests		—		—		6		—			6

Comprehensive income attributable to Waste Management, Inc.	$	292	$	344	$	383	$	(693	)	$	326


	WM		WM Holdings		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Nine Months Ended September 30, 2014
Comprehensive income	$	708	$	867	$	803	$	(1,715	)	$	663
Less: Comprehensive income attributable to noncontrolling interests		—		—		32		—			32

Comprehensive income attributable to Waste Management, Inc.	$	708	$	867	$	771	$	(1,715	)	$	631

Nine Months Ended September 30, 2013
Comprehensive income	$	714	$	865	$	872	$	(1,746	)	$	705
Less: Comprehensive income attributable to noncontrolling interests		—		—		26		—			26

Comprehensive income attributable to Waste Management, Inc.	$	714	$	865	$	846	$	(1,746	)	$	679

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2014

(Unaudited)


				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	708		$	867		$	880		$	(1,715	)	$	740
Equity in earnings of subsidiaries, net of taxes		(867	)		(848	)		—			1,715			—
Other adjustments		(46	)		(8	)		1,125			—			1,071

Net cash provided by (used in) operating activities		(205	)		11			2,005			—			1,811

Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(32	)		—			(32	)
Capital expenditures		—			—			(781	)		—			(781	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			42			277			—			319
Net receipts from restricted trust and escrow accounts and other, net		—			—			(82	)		—			(82	)

Net cash provided by (used in) investing activities		—			42			(618	)		—			(576	)

Cash flows from financing activities:
New borrowings		2,157			—			207			—			2,364
Debt repayments		(1,995	)		—			(397	)		—			(2,392	)
Common stock repurchases		(600	)		—			—			—			(600	)
Cash dividends		(521	)		—			—			—			(521	)
Exercise of common stock options		70			—			—			—			70
Distributions paid to noncontrolling interests and other		3			—			(31	)		—			(28	)
(Increase) decrease in intercompany and investments, net		1,091			(53	)		(1,038	)		—			—

Net cash provided by (used in) financing activities		205			(53	)		(1,259	)		—			(1,107	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(3	)		—			(3	)

Increase (decrease) in cash and cash equivalents		—			—			125			—			125
Cash and cash equivalents at beginning of period		—			—			58			—			58

Cash and cash equivalents at end of period	$	—		$	—		$	183		$	—		$	183

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)

Nine Months Ended September 30, 2013

(Unaudited)


				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	703		$	865		$	907		$	(1,746	)	$	729
Equity in earnings of subsidiaries, net of taxes		(865	)		(881	)		—			1,746			—
Other adjustments		(19	)		(8	)		1,156			—			1,129

Net cash provided by (used in) operating activities		(181	)		(24	)		2,063			—			1,858

Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(698	)		—			(698	)
Capital expenditures		—			—			(824	)		—			(824	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			113			—			113
Net receipts from restricted trust and escrow accounts and other, net		—			—			(23	)		—			(23	)

Net cash provided by (used in) investing activities		—			—			(1,432	)		—			(1,432	)

Cash flows from financing activities:
New borrowings		615			—			1,042			—			1,657
Debt repayments		(875	)		—			(808	)		—			(1,683	)
Cash dividends		(512	)		—			—			—			(512	)
Exercise of common stock options		116			—			—			—			116
Distributions paid to noncontrolling interests and other		12			—			(49	)		—			(37	)
(Increase) decrease in intercompany and investments, net		765			24			(789	)		—			—

Net cash provided by (used in) financing activities		121			24			(604	)		—			(459	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(4	)		—			(4	)

Increase (decrease) in cash and cash equivalents		(60	)		—			23			—			(37	)
Cash and cash equivalents at beginning of period		60			—			134			—			194

Cash and cash equivalents at end of period	$	—		$	—		$	157		$	—		$	157