Condensed Consolidating Financial Statements

9 Months Ended

Sep. 30, 2011

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

15.   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

September 30, 2011

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	184	$	—	$	98	$	—		$	282
Other current assets		2		—		2,135		—			2,137
		186		—		2,233		—			2,419
Property and equipment, net		—		—		11,911		—			11,911
Investments in and advances to affiliates		11,664		14,576		3,029		(29,269	)		—
Other assets		141		12		7,569		—			7,722
Total assets	$	11,991	$	14,588	$	24,742	$	(29,269	)	$	22,052
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	35	$	—	$	190	$	—		$	225
Accounts payable and other current liabilities		94		5		2,203		—			2,302
		129		5		2,393		—			2,527
Long-term debt, less current portion		5,846		449		3,093		—			9,388
Other liabilities		68		—		3,784		—			3,852
Total liabilities		6,043		454		9,270		—			15,767
Equity:
Stockholders’ equity		5,948		14,134		15,135		(29,269	)		5,948
Noncontrolling interests		—		—		337		—			337
		5,948		14,134		15,472		(29,269	)		6,285
Total liabilities and equity	$	11,991	$	14,588	$	24,742	$	(29,269	)	$	22,052

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 September 30, 2011

(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,522		$	—		$	3,522
Costs and expenses		—			—			2,979			—			2,979
Income from operations		—			—			543			—			543
Other income (expense):
Interest income (expense)		(85	)		(8	)		(24	)		—			(117	)
Equity in earnings of subsidiaries, net of taxes		323			328			—			(651	)		—
Other, net		—			—			(5	)		—			(5	)
		238			320			(29	)		(651	)		(122	)
Income before income taxes		238			320			514			(651	)		421
Provision for (benefit from) income taxes		(34	)		(3	)		173			—			136
Consolidated net income		272			323			341			(651	)		285
Less: Net income attributable to noncontrolling interests		—			—			13			—			13
Net income attributable to Waste Management, Inc.	$	272		$	323		$	328		$	(651	)	$	272

Three Months Ended September 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,235		$	—		$	3,235
Costs and expenses		—			—			2,691			—			2,691
Income from operations		—			—			544			—			544
Other income (expense):
Interest income (expense)		(88	)		(9	)		(28	)		—			(125	)
Equity in earnings of subsidiaries, net of taxes		298			303			—			(601	)		—
Other, net		—			—			(8	)		—			(8	)
		210			294			(36	)		(601	)		(133	)
Income before income taxes		210			294			508			(601	)		411
Provision for (benefit from) income taxes		(34	)		(4	)		191			—			153
Consolidated net income		244			298			317			(601	)		258
Less: Net income attributable to noncontrolling interests		—			—			14			—			14
Net income attributable to Waste Management, Inc.	$	244		$	298		$	303		$	(601	)	$	244

Nine Months Ended September 30, 2011
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	9,972		$	—		$	9,972
Costs and expenses		—			—			8,496			—			8,496
Income from operations		—			—			1,476			—			1,476
Other income (expense):
Interest income (expense)		(256	)		(25	)		(71	)		—			(352	)
Equity in earnings of subsidiaries, net of taxes		850			865			—			(1,715	)		—
Other, net		—			—			(16	)		—			(16	)
		594			840			(87	)		(1,715	)		(368	)
Income before income taxes		594			840			1,389			(1,715	)		1,108
Provision for (benefit from) income taxes		(101	)		(10	)		488			—			377
Consolidated net income		695			850			901			(1,715	)		731
Less: Net income attributable to noncontrolling interests		—			—			36			—			36
Net income attributable to Waste Management, Inc.	$	695		$	850		$	865		$	(1,715	)	$	695

Nine Months Ended September 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	9,328		$	—		$	9,328
Costs and expenses		—			—			7,786			—			7,786
Income from operations		—			—			1,542			—			1,542
Other income (expense):
Interest income (expense)		(241	)		(28	)		(82	)		—			(351	)
Equity in earnings of subsidiaries, net of taxes		819			836			—			(1,655	)		—
Other, net		—			—			(14	)		—			(14	)
		578			808			(96	)		(1,655	)		(365	)
Income before income taxes		578			808			1,446			(1,655	)		1,177
Provision for (benefit from) income taxes		(94	)		(11	)		574			—			469
Consolidated net income		672			819			872			(1,655	)		708
Less: Net income attributable to noncontrolling interests		—			—			36			—			36
Net income attributable to Waste Management, Inc.	$	672		$	819		$	836		$	(1,655	)	$	672

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


Nine Months Ended September 30, 2011
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	695		$	850		$	901		$	(1,715	)	$	731
Equity in earnings of subsidiaries, net of taxes		(850	)		(865	)		—			1,715			—
Other adjustments		8			(11	)		1,009			—			1,006
Net cash provided by (used in) operating activities		(147	)		(26	)		1,910			—			1,737
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(645	)		—			(645	)
Capital expenditures		—			—			(909	)		—			(909	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			22			—			22
Net receipts from restricted trust and escrow accounts and other, net		(5	)		—			2			—			(3	)
Net cash used in investing activities		(5	)		—			(1,530	)		—			(1,535	)
Cash flows from financing activities:
New borrowings		893			—			108			—			1,001
Debt repayments		—			(147	)		(278	)		—			(425	)
Common stock repurchases		(528	)		—			—			—			(528	)
Cash dividends		(481	)		—			—			—			(481	)
Exercise of common stock options		40			—			—			—			40
Distributions paid to noncontrolling interests and other		(10	)		—			(56	)		—			(66	)
(Increase) decrease in intercompany and investments, net		(43	)		173			(130	)		—			—
Net cash provided by (used in) financing activities		(129	)		26			(356	)		—			(459	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			—			—
Increase (decrease) in cash and cash equivalents		(281	)		—			24			—			(257	)
Cash and cash equivalents at beginning of period		465			—			74			—			539
Cash and cash equivalents at end of period	$	184		$	—		$	98		$	—		$	282

Nine Months Ended September 30, 2010
(Unaudited)

				WM			Non-Guarantor
	WM			Holdings			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income	$	672		$	819		$	872		$	(1,655	)	$	708
Equity in earnings of subsidiaries, net of taxes		(819	)		(836	)		—			1,655			—
Other adjustments		12			(13	)		946			—			945
Net cash provided by (used in) operating activities		(135	)		(30	)		1,818			—			1,653
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(343	)		—			(343	)
Capital expenditures		—			—			(737	)		—			(737	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			36			—			36
Net receipts from restricted trust and escrow accounts and other, net		(2	)		—			(129	)		—			(131	)
Net cash used in investing activities		(2	)		—			(1,173	)		—			(1,175	)
Cash flows from financing activities:
New borrowings		592			—			183			—			775
Debt repayments		(617	)		(35	)		(280	)		—			(932	)
Common stock repurchases		(443	)		—			—			—			(443	)
Cash dividends		(454	)		—			—			—			(454	)
Exercise of common stock options		28			—			—			—			28
Distributions paid to noncontrolling interests and other		(10	)		—			(33	)		—			(43	)
(Increase) decrease in intercompany and investments, net		405			65			(470	)		—			—
Net cash provided by (used in) financing activities		(499	)		30			(600	)		—			(1,069	)
Effect of exchange rate changes on cash and cash equivalents		—			—			1			—			1
Increase (decrease) in cash and cash equivalents		(636	)		—			46			—			(590	)
Cash and cash equivalents at beginning of period		1,093			—			47			—			1,140
Cash and cash equivalents at end of period	$	457		$	—		$	93		$	—		$	550