Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2011

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

13.   Condensed Consolidating Financial Statements

WM Holdings has fully and unconditionally guaranteed all of WM’s senior indebtedness. WM has fully and unconditionally guaranteed all of WM Holdings’ senior indebtedness. None of WM’s other subsidiaries have guaranteed any of WM’s or WM Holdings’ debt. As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information (in millions):

CONDENSED CONSOLIDATING BALANCE SHEETS

June 30, 2011

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	325	$	—	$	46	$	—		$	371
Other current assets		6		—		1,997		—			2,003
		331		—		2,043		—			2,374
Property and equipment, net		—		—		11,919		—			11,919
Investments in and advances to affiliates		11,310		14,261		3,135		(28,706	)		—
Other assets		114		12		7,164		—			7,290
Total assets	$	11,755	$	14,273	$	24,261	$	(28,706	)	$	21,583
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	35	$	—	$	163	$	—		$	198
Accounts payable and other current liabilities		84		13		2,000		—			2,097
		119		13		2,163		—			2,295
Long-term debt, less current portion		5,323		449		3,067		—			8,839
Other liabilities		22		—		3,804		—			3,826
Total liabilities		5,464		462		9,034		—			14,960
Equity:
Stockholders’ equity		6,291		13,811		14,895		(28,706	)		6,291
Noncontrolling interests		—		—		332		—			332
		6,291		13,811		15,227		(28,706	)		6,623
Total liabilities and equity	$	11,755	$	14,273	$	24,261	$	(28.706	)	$	21,583

December 31, 2010

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	465	$	—	$	74	$	—		$	539
Other current assets		4		1		1,938		—			1,943
		469		1		2,012		—			2,482
Property and equipment, net		—		—		11,868		—			11,868
Investments in and advances to affiliates		10,757		13,885		2,970		(27,612	)		—
Other assets		91		12		7,023		—			7,126
Total assets	$	11,317	$	13,898	$	23,873	$	(27,612	)	$	21,476
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	1	$	232	$	—		$	233
Accounts payable and other current liabilities		93		17		2,142		—			2,252
		93		18		2,374		—			2,485
Long-term debt, less current portion		4,951		596		3,127		—			8,674
Other liabilities		13		—		3,713		—			3,726
Total liabilities		5,057		614		9,214		—			14,885
Equity:
Stockholders’ equity		6,260		13,284		14,328		(27,612	)		6,260
Noncontrolling interests		—		—		331		—			331
		6,260		13,284		14,659		(27,612	)		6,591
Total liabilities and equity	$	11,317	$	13,898	$	23,873	$	(27,612	)	$	21,476

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended June 30, 2011

(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,347		$	—		$	3,347
Costs and expenses		—			—			2,841			—			2,841
Income from operations		—			—			506			—			506
Other income (expense):
Interest income (expense)		(86	)		(8	)		(23	)		—			(117	)
Equity in subsidiaries, net of taxes		290			295			—			(585	)		—
Other, net		—			—			(8	)		—			(8	)
		204			287			(31	)		(585	)		(125	)
Income before income taxes		204			287			475			(585	)		381
Provision for (benefit from) income taxes		(33	)		(3	)		167			—			131
Consolidated net income		237			290			308			(585	)		250
Less: Net income attributable to noncontrolling interests		—			—			13			—			13
Net income attributable to Waste Management, Inc.	$	237		$	290		$	295		$	(585	)	$	237

Three Months Ended June 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,158		$	—		$	3,158
Costs and expenses		—			—			2,572			—			2,572
Income from operations		—			—			586			—			586
Other income (expense):
Interest income (expense)		(78	)		(9	)		(27	)		—			(114	)
Equity in subsidiaries, net of taxes		293			299			—			(592	)		—
Other, net		—			—			(8	)		—			(8	)
		215			290			(35	)		(592	)		(122	)
Income before income taxes		215			290			551			(592	)		464
Provision for (benefit from) income taxes		(31	)		(3	)		240			—			206
Consolidated net income		246			293			311			(592	)		258
Less: Net income attributable to noncontrolling interests		—			—			12			—			12
Net income attributable to Waste Management, Inc.	$	246		$	293		$	299		$	(592	)	$	246

Six Months Ended June 30, 2011
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	6,450		$	—		$	6,450
Costs and expenses		—			—			5,517			—			5,517
Income from operations		—			—			933			—			933
Other income (expense):
Interest income (expense)		(171	)		(17	)		(47	)		—			(235	)
Equity in subsidiaries, net of taxes		527			537			—			(1,064	)		—
Other, net		—			—			(11	)		—			(11	)
		356			520			(58	)		(1,064	)		(246	)
Income before income taxes		356			520			875			(1,064	)		687
Provision for (benefit from) income taxes		(67	)		(7	)		315			—			241
Consolidated net income		423			527			560			(1,064	)		446
Less: Net income attributable to noncontrolling interests		—			—			23			—			23
Net income attributable to Waste Management, Inc.	$	423		$	527		$	537		$	(1,064	)	$	423

Six Months Ended June 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	6,093		$	—		$	6,093
Costs and expenses		—			—			5,095			—			5,095
Income from operations		—			—			998			—			998
Other income (expense):
Interest income (expense)		(153	)		(19	)		(54	)		—			(226	)
Equity in subsidiaries, net of taxes		521			533			—			(1,054	)		—
Other, net		—			—			(6	)		—			(6	)
		368			514			(60	)		(1,054	)		(232	)
Income before income taxes		368			514			938			(1,054	)		766
Provision for (benefit from) income taxes		(60	)		(7	)		383			—			316
Consolidated net income		428			521			555			(1,054	)		450
Less: Net income attributable to noncontrolling interests		—			—			22			—			22
Net income attributable to Waste Management, Inc.	$	428		$	521		$	533		$	(1,054	)	$	428

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


Six Months Ended June 30, 2011
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	423		$	527		$	560		$	(1,064	)	$	446
Equity in earnings of subsidiaries, net of taxes		(527	)		(537	)		—			1,064			—
Other adjustments		2			(3	)		633			—			632
Net cash provided by (used in) operating activities		(102	)		(13	)		1,193			—			1,078
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(157	)		—			(157	)
Capital expenditures		—			—			(596	)		—			(596	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			13			—			13
Net receipts from restricted trust and escrow accounts and other, net		(5	)		—			(79	)		—			(84	)
Net cash used in investing activities		(5	)		—			(819	)		—			(824	)
Cash flows from financing activities:
New borrowings		396			—			8			—			404
Debt repayments		—			(147	)		(167	)		—			(314	)
Common stock repurchases		(168	)		—			—			—			(168	)
Cash dividends		(323	)		—			—			—			(323	)
Exercise of common stock options		35			—			—			—			35
Distributions paid to noncontrolling interests and other		(10	)		—			(49	)		—			(59	)
(Increase) decrease in intercompany and investments, net		37			160			(197	)		—			—
Net cash provided by (used in) financing activities		(33	)		13			(405	)		—			(425	)
Effect of exchange rate changes on cash and cash equivalents		—			—			3			—			3
Decrease in cash and cash equivalents		(140	)		—			(28	)		—			(168	)
Cash and cash equivalents at beginning of period		465			—			74			—			539
Cash and cash equivalents at end of period	$	325		$	—		$	46		$	—		$	371

Six Months Ended June 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	428		$	521		$	555		$	(1,054	)	$	450
Equity in earnings of subsidiaries, net of taxes		(521	)		(533	)		—			1,054			—
Other adjustments		9			(2	)		519			—			526
Net cash provided by (used in) operating activities		(84	)		(14	)		1,074			—			976
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(237	)		—			(237	)
Capital expenditures		—			—			(475	)		—			(475	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			27			—			27
Net receipts from restricted trust and escrow accounts and other, net		—			—			(138	)		—			(138	)
Net cash used in investing activities		—			—			(823	)		—			(823	)
Cash flows from financing activities:
New borrowings		592			—			114			—			706
Debt repayments		(17	)		(35	)		(161	)		—			(213	)
Common stock repurchases		(286	)		—			—			—			(286	)
Cash dividends		(305	)		—			—			—			(305	)
Exercise of common stock options		13			—			—			—			13
Distributions paid to noncontrolling interests and other		(13	)		—			(25	)		—			(38	)
(Increase) decrease in intercompany and investments, net		39			52			(91	)		—			—
Net cash provided by (used in) financing activities		23			17			(163	)		—			(123	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1	)		—			(1	)
Increase (decrease) in cash and cash equivalents		(61	)		3			87			—			29
Cash and cash equivalents at beginning of period		1,093			—			47			—			1,140
Cash and cash equivalents at end of period	$	1,032		$	3		$	134		$	—		$	1,169