10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended September 30, 2017
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to
Commission file number 1-12154

Waste Management, Inc.

(Exact name of registrant as specified in its charter)

Delaware	73-1309529
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1001 Fannin Street

Houston, Texas 77002

(Address of principal executive offices)

(713) 512-6200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☑  No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☑  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer ☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company ☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐  No  ☑

The number of shares of Common Stock, $0.01 par value, of the registrant outstanding at October 19, 2017 was 434,216,159 (excluding treasury shares of 196,066,302).

PART I.

Item 1.    Financial Statements.

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share and Par Value Amounts)

	September 30,		December 31,
	2017		2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35	$	32
Accounts receivable, net of allowance for doubtful accounts of $26 and $24, respectively		1,790		1,700
Other receivables		212		432
Parts and supplies		99		90
Other assets		164		122
Total current assets		2,300		2,376
Property and equipment, net of accumulated depreciation and amortization of $17,826 and $17,152, respectively		11,136		10,950
Goodwill		6,267		6,215
Other intangible assets, net		561		591
Investments in unconsolidated entities		287		320
Other assets		398		407
Total assets	$	20,949	$	20,859
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	789	$	799
Accrued liabilities		1,136		1,085
Deferred revenues		484		493
Current portion of long-term debt		850		417
Total current liabilities		3,259		2,794
Long-term debt, less current portion		8,495		8,893
Deferred income taxes		1,452		1,482
Landfill and environmental remediation liabilities		1,727		1,675
Other liabilities		716		695
Total liabilities		15,649		15,539
Commitments and contingencies
Equity:
Waste Management, Inc. stockholders’ equity:
Common stock, $0.01 par value; 1,500,000,000 shares authorized; 630,282,461 shares issued		6		6
Additional paid-in capital		4,806		4,850
Retained earnings		7,871		7,388
Accumulated other comprehensive income (loss)		14		(80)
Treasury stock at cost, 196,076,817 and 190,966,584 shares, respectively		(7,419)		(6,867)
Total Waste Management, Inc. stockholders’ equity		5,278		5,297
Noncontrolling interests		22		23
Total equity		5,300		5,320
Total liabilities and equity	$	20,949	$	20,859

See notes to Condensed Consolidated Financial Statements.

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WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except per Share Amounts)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Operating revenues	$	3,716	$	3,548	$	10,833	$	10,149
Costs and expenses:
Operating		2,302		2,216		6,758		6,339
Selling, general and administrative		356		330		1,099		1,032
Depreciation and amortization		350		336		1,034		988
Restructuring		(2)		—		—		4
Expense from divestitures, asset impairments and unusual items, net		9		106		10		107
		3,015		2,988		8,901		8,470
Income from operations		701		560		1,932		1,679
Other income (expense):
Interest expense, net		(90)		(94)		(272)		(282)
Equity in net losses of unconsolidated entities		(8)		(9)		(53)		(32)
Other, net		—		—		—		(53)
		(98)		(103)		(325)		(367)
Income before income taxes		603		457		1,607		1,312
Income tax expense		215		153		561		466
Consolidated net income		388		304		1,046		846
Less: Net income (loss) attributable to noncontrolling interests		2		2		—		(1)
Net income attributable to Waste Management, Inc.	$	386	$	302	$	1,046	$	847
Basic earnings per common share	$	0.88	$	0.68	$	2.37	$	1.91
Diluted earnings per common share	$	0.87	$	0.68	$	2.36	$	1.89
Cash dividends declared per common share	$	0.425	$	0.41	$	1.275	$	1.23

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Millions)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Consolidated net income	$	388	$	304	$	1,046	$	846
Other comprehensive income (loss), net of tax:
Derivative instruments, net		2		2		6		11
Available-for-sale securities, net		—		—		2		2
Foreign currency translation adjustments		46		(16)		86		51
Post-retirement benefit obligation, net		(1)		—		—		—
Other comprehensive income (loss), net of tax		47		(14)		94		64
Comprehensive income		435		290		1,140		910
Less: Comprehensive income (loss) attributable to noncontrolling interests		2		2		—		(1)
Comprehensive income attributable to Waste Management, Inc.	$	433	$	288	$	1,140	$	911

See notes to Condensed Consolidated Financial Statements.

3

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

	Nine Months Ended
	September 30,
	2017		2016
Cash flows from operating activities:
Consolidated net income	$	1,046	$	846
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization		1,034		988
Deferred income tax expense (benefit)		(46)		20
Interest accretion on landfill liabilities		68		67
Interest accretion on and discount rate adjustments to environmental remediation liabilities and recovery assets		2		8
Provision for bad debts		31		27
Equity-based compensation expense		74		67
Net gain from disposal of assets		(7)		(18)
Expense from divestitures, asset impairments and other, net		38		106
Equity in net losses of unconsolidated entities, net of dividends		25		32
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Receivables		112		32
Other current assets		(25)		(21)
Other assets		—		76
Accounts payable and accrued liabilities		105		73
Deferred revenues and other liabilities		(67)		(51)
Net cash provided by operating activities		2,390		2,252
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		(80)		(600)
Capital expenditures		(981)		(962)
Proceeds from divestitures of businesses and other assets (net of cash divested)		19		32
Other, net		58		(20)
Net cash used in investing activities		(984)		(1,550)
Cash flows from financing activities:
New borrowings		122		2,536
Debt repayments		(749)		(2,210)
Net commercial paper borrowings		501		—
Common stock repurchase program		(750)		(500)
Cash dividends		(566)		(546)
Exercise of common stock options		92		57
Tax payments associated with equity-based compensation transactions		(47)		(30)
Other, net		(7)		(18)
Net cash used in financing activities		(1,404)		(711)
Effect of exchange rate changes on cash and cash equivalents		1		—
Increase (decrease) in cash and cash equivalents		3		(9)
Cash and cash equivalents at beginning of period		32		39
Cash and cash equivalents at end of period	$	35	$	30

See notes to Condensed Consolidated Financial Statements.

4

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(In Millions, Except Shares in Thousands)

(Unaudited)

			Waste Management, Inc. Stockholders’ Equity
										Accumulated
						Additional				Other
			Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Noncontrolling
	Total		Shares	Amounts		Capital		Earnings		Income (Loss)		Shares	Amounts		Interests
Balance, December 31, 2016	$	5,320	630,282	$	6	$	4,850	$	7,388	$	(80)	(190,967)	$	(6,867)	$	23
Consolidated net income		1,046	—		—		—		1,046		—	—		—		—
Other comprehensive income (loss), net of tax		94	—		—		—		—		94	—		—		—
Cash dividends		(566)	—		—		—		(566)		—	—		—		—
Equity-based compensation transactions, net		157	—		—		11		3		—	3,974		143		—
Common stock repurchase program		(750)	—		—		(55)		—		—	(9,082)		(695)		—
Other, net		(1)	—		—		—		—		—	(2)		—		(1)
Balance, September 30, 2017	$	5,300	630,282	$	6	$	4,806	$	7,871	$	14	(196,077)	$	(7,419)	$	22

See notes to Condensed Consolidated Financial Statements.

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WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    Basis of Presentation

The financial statements presented in this report represent the consolidation of Waste Management, Inc., a Delaware corporation; its wholly-owned and majority-owned subsidiaries; and certain variable interest entities for which Waste Management, Inc. or its subsidiaries are the primary beneficiaries as described in Note 13. Waste Management, Inc. is a holding company and all operations are conducted by its subsidiaries. When the terms “the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste Management, Inc., its consolidated subsidiaries and consolidated variable interest entities. When we use the term “WM,” we are referring only to Waste Management, Inc., the parent holding company.

We are North America’s leading provider of comprehensive waste management environmental services. We partner with our residential, commercial, industrial and municipal customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. Our “Solid Waste” business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provides collection, transfer, disposal, and recycling and resource recovery services. Through our subsidiaries, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the United States.

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. We also provide additional services that are not managed through our Solid Waste business, which are presented in this report as “Other.” Additional information related to our segments is included in Note 7.

The Condensed Consolidated Financial Statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 are unaudited. In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The financial statements presented herein should be read in conjunction with the financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2016.

In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with precision from available data or simply cannot be calculated. In some cases, these estimates are difficult to determine, and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that present the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, long-lived asset impairments and reserves associated with our insured and self-insured claims. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Adoption of New Accounting Standards

Equity-Based Compensation — In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑09 associated with equity-based compensation as part of its simplification initiative to reduce the cost and complexity of compliance with U.S. Generally Accepted Accounting Principles (“GAAP”), while maintaining or improving the usefulness of the information provided. This amended guidance was effective for the Company on January 1, 2017 and required the following changes to the presentation of our financial statements:

· Excess tax benefits or deficiencies for share-based payments are now recorded as a discrete item in the period shares vest or stock options are exercised as an adjustment to income tax expense or benefit rather than additional

6

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

paid-in capital. This change was applied prospectively as of January 1, 2017. The Company did not have any excess tax benefits that were not previously recognized as of January 1, 2017. See Note 4 for discussion of the current year impact;

· As of January 1, 2017, the calculation of diluted weighted average shares outstanding was changed prospectively to no longer include excess tax benefits as assumed proceeds. This change did not have a material impact on our current year diluted earnings per share;

· Cash flows related to excess tax benefits or deficiencies are included in net cash provided by operating activities rather than as a financing activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $27 million for the nine months ended September 30, 2016;

· Cash paid to taxing authorities when withholding shares from an employee’s vesting or exercise of equity-based compensation awards for tax-withholding purposes is now considered a repurchase of the Company’s equity instruments and is classified as net cash used in financing activities rather than as an operating activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $18 million for the nine months ended September 30, 2016; and

· The Company has elected to continue to estimate forfeitures rather than account for forfeitures as they occur.

Goodwill Impairment Testing — In January 2017, the FASB issued ASU 2017‑04 which simplifies the goodwill impairment test by eliminating Step 2 of the quantitative assessment and should reduce the cost and complexity of evaluating goodwill for impairment. Under the amended guidance, when a quantitative assessment is required, an entity will perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be measured as the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of recorded goodwill. This amended guidance, effective for the Company on January 1, 2020, permits early adoption. The Company’s early adoption on January 1, 2017 did not have an impact on our consolidated financial statements.

Reclassifications

When necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

2.    Landfill and Environmental Remediation Liabilities

Liabilities for landfill and environmental remediation costs are presented in the table below (in millions):

	September 30, 2017						December 31, 2016
			Environmental						Environmental
	Landfill		Remediation		Total		Landfill		Remediation		Total
Current (in accrued liabilities)	$	140	$	23	$	163	$	119	$	28	$	147
Long-term		1,500		227		1,727		1,457		218		1,675
	$	1,640	$	250	$	1,890	$	1,576	$	246	$	1,822

7

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The changes to landfill and environmental remediation liabilities for the nine months ended September 30, 2017 are reflected in the table below (in millions):

			Environmental
	Landfill		Remediation
December 31, 2016	$	1,576	$	246
Obligations incurred and capitalized		51		—
Obligations settled		(74)		(14)
Interest accretion		68		2
Revisions in estimates and interest rate assumptions (a)		14		16
Acquisitions, divestitures and other adjustments		5		—
September 30, 2017	$	1,640	$	250

(a) Includes a $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as further discussed in Note 6.

At several of our landfills, we provide financial assurance by depositing cash into restricted trust funds or escrow accounts for purposes of settling final capping, closure, post-closure and environmental remediation obligations. Generally, these trust funds are established to comply with statutory requirements and operating agreements. See Note 13 for additional information related to these trusts.

3.    Debt

The following table summarizes the major components of debt as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of September 30, 2017:

	September 30,		December 31,
	2017		2016
$2.25 billion revolving credit facility, maturing July 2020 (weighted average interest rate of 1.9% as of December 31, 2016)	$	—	$	426
Commercial paper program (weighted average interest rate of 1.4% as of September 30, 2017)		502		—
Other letter of credit facilities, maturing through December 2018		—		—
Canadian term loan and revolving credit facility, maturing March 2019 (weighted average effective interest rate of 2.5% as of September 30, 2017 and 2.1% as of December 31, 2016)		143		239
Senior notes maturing through 2045, interest rates ranging from 2.4% to 7.75% (weighted average interest rate of 4.6% as of September 30, 2017 and December 31, 2016)		6,033		6,033
Tax-exempt bonds, maturing through 2045, fixed and variable interest rates ranging from 1.0% to 5.7% (weighted average interest rate of 1.9% as of September 30, 2017 and 1.8% as of December 31, 2016)		2,339		2,304
Capital leases and other, maturing through 2055, interest rates up to 12%		328		308
		9,345		9,310
Current portion of long-term debt		850		417
	$	8,495	$	8,893

Debt Classification

As of September 30, 2017, we had $1,821 million of debt maturing within the next 12 months, including (i) $590 million of 6.1% senior notes that mature in March 2018; (ii) $551 million of tax-exempt bonds with term interest

8

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $502 million of short-term borrowings under our commercial paper program and (iv) $178 million of other debt with scheduled maturities within the next 12 months, including $119 million of tax-exempt bonds. As of September 30, 2017, we have classified $971 million of debt as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our long-term U.S. revolving credit facility (“$2.25 billion revolving credit facility”), as discussed below. The remaining $850 million is classified as current obligations.

As of September 30, 2017, we also have $471 million of variable-rate tax-exempt bonds that are supported by letters of credit. The interest rates on our variable-rate tax-exempt bonds are generally reset on either a daily or weekly basis through a remarketing process. All recent tax-exempt bond remarketings have successfully placed Company bonds with investors at market-driven rates and we currently expect future remarketings to be successful. However, if the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, we have the intent and ability to refinance these bonds on a long-term basis as supported by the forecasted available capacity under our $2.25 billion revolving credit facility, as discussed below. Accordingly, we have also classified these borrowings as long-term in our Condensed Consolidated Balance Sheet as of September 30, 2017.

Access to and Utilization of Credit Facilities and Commercial Paper Program

$2.25 Billion Revolving Credit Facility — Our $2.25 billion revolving credit facility maturing in July 2020 provides us with credit capacity to be used for either cash borrowings or to support letters of credit or commercial paper. The rates we pay for outstanding loans are generally based on LIBOR plus a spread depending on the Company’s debt rating assigned by Moody’s Investors Service and Standard and Poor’s. As of September 30, 2017, we had no outstanding borrowings under this facility. We had $777 million of letters of credit issued and $502 million of outstanding borrowings under our commercial paper program, both supported by this facility, leaving unused and available credit capacity of $971 million as of September 30, 2017.

Commercial Paper Program — In August 2016, we entered into a $1.5 billion commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates. The commercial paper program is fully supported by our $2.25 billion revolving credit facility.

Canadian Term Loan and Revolving Credit Facility — We have a Canadian credit agreement (which includes a term loan and revolving credit facility) that matures in March 2019. This agreement provides the Company (i) C$50 million of revolving credit capacity, which can be used for borrowings or letters of credit, and (ii) C$460 million of non-revolving term credit that is prepayable without penalty and principal amounts repaid may not be reborrowed. As of September 30, 2017, we had no borrowings or letters of credit outstanding under the Canadian revolving credit facility.

Other Letter of Credit Facilities — As of September 30, 2017, we had utilized $508 million of other letter of credit facilities, which are both committed and uncommitted, with terms maturing through December 2018.

Debt Borrowings and Repayments

$2.25 Billion Revolving Credit Facility — During the nine months ended September 30, 2017, we had net repayments of $426 million under our $2.25 billion revolving credit facility, all of which was replaced with net borrowings under our commercial paper program.

Commercial Paper Program — During the nine months ended September 30, 2017, we had net borrowings of $501 million (net of the related discount on issuance) for general corporate purposes.

9

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Canadian Term Loan — During the nine months ended September 30, 2017, we repaid C$142 million, or $108 million, of net advances under our Canadian term loan with available cash. The remaining change in the carrying value of outstanding borrowings under our Canadian term loan is due to foreign currency translation.

Tax-Exempt Bonds — During the nine months ended September 30, 2017, we repaid $40 million of our tax-exempt bonds with available cash at their scheduled maturities. We issued $75 million of tax-exempt bonds in August 2017. The proceeds from the issuance of these bonds were deposited directly into a trust fund and may only be used for the specific purpose for which the money was raised, which is generally to finance expenditures for landfill and solid waste disposal facility construction and development. Accordingly, the restricted funds provided by these financing activities have not been included in new borrowings in our Condensed Consolidated Statement of Cash Flows.

Capital Leases and Other — During the nine months ended September 30, 2017, we had net repayments of $53million of other debt paid with available cash. We also entered into $73 million in new capital leases during the nine months ended September 30, 2017 to support new business opportunities.

Cross-Currency Swaps

In March 2016, our Canadian subsidiaries repaid C$370 million of intercompany debt to WM Holdings with proceeds from our Canadian term loan. Concurrent with the repayment of the intercompany debt, we terminated the related cross-currency swaps and received $67 million in cash. The cash received from our termination of these swaps was classified as a change in other current assets and other assets within net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. In addition, we recognized $8 million of expense associated with the termination of these swaps during the first quarter of 2016, which was included in other, net in the Condensed Consolidated Statement of Operations.

4.    Income Taxes

Our effective income tax rate for the three and nine months ended September 30, 2017 was 35.7% and 34.9%, respectively, compared with 33.7% and 35.5%, respectively, for the comparable prior year periods. We evaluate our effective income tax rate at each interim period and adjust it as facts and circumstances warrant. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended September 30, 2017 was primarily due to the unfavorable impact of state and local income taxes offset, in part, by the favorable impact of federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the nine months ended September 30, 2017 was primarily due to the favorable impact of federal tax credits, excess tax benefits related to equity-based compensation and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments.

The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended September 30, 2016 was primarily due to the favorable impact of federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments and capital losses. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the nine months ended September 30, 2016 was primarily due to the unfavorable impact of state and local income taxes and nondeductible impairments and capital losses offset, in part, by the favorable impact of federal tax credits, adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns, and tax audit settlements.

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WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Equity-Based Compensation — During the three and nine months ended September 30, 2017, we recognized a reduction in our income tax expense of $1 million and $35 million, respectively, for excess tax benefits related to the vesting or exercise of equity-based compensation awards. See Note 1 for discussion of our adoption of ASU 2016‑09.

Investments Qualifying for Federal Tax Credits — We have significant financial interests in entities established to invest in and manage low-income housing properties and a refined coal facility. We support the operations of these entities in exchange for a pro-rata share of the tax credits they generate. The low-income housing investments and the coal facility’s refinement processes qualify for federal tax credits that we expect to realize through 2020 under Section 42 and through 2019 under Section 45, respectively, of the Internal Revenue Code.

We account for our investments in these entities using the equity method of accounting, recognizing our share of each entity’s results of operations and other reductions in the value of our investments in equity in net losses of unconsolidated entities, within our Condensed Consolidated Statements of Operations. During the three and nine months ended September 30, 2017, we recognized $6 million and $21 million of net losses and a reduction in our income tax expense of $14 million and $39 million, respectively, primarily because of tax credits realized from these investments. During the three and nine months ended September 30, 2016, we recognized $7 million and $22 million of net losses and a reduction in our income tax expense of $15 million and $40 million, respectively, primarily because of tax credits realized from these investments. Interest expense associated with our investment in low-income housing properties was not material for the periods presented. See Note 13 for additional information related to these unconsolidated variable interest entities.

5.    Earnings Per Share

Basic and diluted earnings per share were computed using the following common share data (shares in millions):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Number of common shares outstanding at end of period	434.2	442.0	434.2	442.0
Effect of using weighted average common shares outstanding	3.6	0.9	6.1	2.3
Weighted average basic common shares outstanding	437.8	442.9	440.3	444.3
Dilutive effect of equity-based compensation awards and other contingently issuable shares (a)	3.0	2.8	3.0	2.8
Weighted average diluted common shares outstanding	440.8	445.7	443.3	447.1
Potentially issuable shares	8.2	9.2	8.2	9.2
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding	1.9	0.5	2.3	0.5

(a) As of January 1, 2017, we adopted ASU 2016‑09 prospectively and no longer include excess tax benefits as assumed proceeds. See Note 1 for further discussion.

6.    Commitments and Contingencies

Financial Instruments — We have obtained letters of credit, surety bonds and insurance policies and have established trust funds and issued financial guarantees to support tax-exempt bonds, contracts, performance of landfill final capping, closure and post-closure requirements, environmental remediation and other obligations. Letters of credit generally are supported by our $2.25 billion revolving credit facility and other credit facilities established for that purpose. These facilities are discussed further in Note 3. Surety bonds and insurance policies are supported by (i) a diverse group of third-party surety and insurance companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) wholly-owned insurance companies, the sole business of which is to issue surety bonds and/or insurance policies on our behalf.

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Management does not expect that any claims against or draws on these instruments would have a material adverse effect on our financial condition, results of operations or cash flows. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations. In an ongoing effort to mitigate risks of future cost increases and reductions in available capacity, we continue to evaluate various options to access cost-effective sources of financial assurance.

Insurance — We carry insurance coverage for protection of our assets and operations from certain risks including general liability, automobile liability, real and personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability and other coverages we believe are customary to the industry. Our exposure to loss for insurance claims is generally limited to the per incident deductible under the related insurance policy. Our exposure could increase if our insurers are unable to meet their commitments on a timely basis.

We have retained a significant portion of the risks related to our general liability, automobile liability and workers’ compensation claims programs. “General liability” refers to the self-insured portion of specific third-party claims made against us that may be covered under our commercial General Liability Insurance Policy. For our self-insured retentions, the exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial valuation or internal estimates. The accruals for these liabilities could be revised if future occurrences or loss development significantly differ from such valuations and estimates. We do not expect the impact of any known casualty, property, environmental or other contingency to have a material impact on our financial condition, results of operations or cash flows.

Guarantees — In the ordinary course of our business, WM and WM Holdings enter into guarantee agreements associated with their subsidiaries’ operations. Additionally, WM and WM Holdings have each guaranteed all of the senior debt of the other entity. No additional liabilities have been recorded for these intercompany guarantees because all of the underlying obligations are reflected in our Condensed Consolidated Balance Sheets. See Note 14 for further discussion.

We have also guaranteed the obligations and certain performance requirements of, and provided indemnification to, third parties as of September 30, 2017 in connection with both consolidated and unconsolidated entities, including agreements guaranteeing certain market value losses for approximately 850 homeowners’ properties adjacent to or near 22 of our landfills. Our indemnification obligations generally arise from divestitures and provide that we will be responsible for liabilities associated with our operations for events that occurred prior to the sale of the operations. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets or other market conditions are achieved post-closing and we have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. We do not currently believe that contingent obligations to provide indemnification or pay additional post-closing consideration in connection with our divestitures or acquisitions will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In December 2014, we sold our Wheelabrator business, which provides waste-to-energy services and manages waste-to-energy facilities and independent power production plants. Before the divestiture of our Wheelabrator business, WM had guaranteed certain operational and financial performance obligations of Wheelabrator and its subsidiaries in the ordinary course of business. In conjunction with the divestiture, certain WM guarantees of Wheelabrator obligations were terminated, but others continued and are now guarantees of third-party obligations. When possible, Wheelabrator seeks to have the applicable third-party beneficiaries release WM from these guarantees, but until such efforts are successful or the underlying financial commitments are restructured, WM has agreed to retain the guarantees and, in exchange, receive a credit support fee or other financial assurances guaranteed by a third-party financial institution to protect WM in the event of non-compliance by Wheelabrator. The most significant of these guarantees specifically define WM’s maximum financial obligation over the course of the relevant agreements. As of September 30, 2017 and December 31, 2016, WM’s maximum future payments under these guarantees was $96 million. WM’s exposure under certain of the performance guarantees is variable and a maximum exposure is not defined. We have recorded the fair value of the operational and

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financial performance guarantees, some of which could extend through 2038 if not terminated, in our Condensed Consolidated Balance Sheets. The estimated fair value of WM’s potential obligation associated with guarantees of Wheelabrator’s obligations (net of credit support fee or indemnification asset) decreased from $11 million as of December 31, 2016 to $3 million as of September 30, 2017 primarily due to the release of certain performance guarantees by third-party beneficiaries. We currently do not expect the financial impact of such operational and financial performance guarantees to materially exceed the recorded fair value.

Environmental Matters — A significant portion of our operating costs and capital expenditures could be characterized as costs of environmental protection. The nature of our operations, particularly with respect to the construction, operation and maintenance of our landfills, subjects us to an array of laws and regulations relating to the protection of the environment. Under current laws and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by conditions that existed before we acquired a site. In addition to remediation activity required by state or local authorities, such liabilities include potentially responsible party (“PRP”) investigations. The costs associated with these liabilities can include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated with site investigation and clean-up.

Estimating our degree of responsibility for remediation is inherently difficult. We recognize and accrue for an estimated remediation liability when we determine that such liability is both probable and reasonably estimable. Determining the method and ultimate cost of remediation requires that a number of assumptions be made. There can sometimes be a range of reasonable estimates of the costs associated with the likely site remediation alternatives identified in the environmental impact investigation. In these cases, we use the amount within the range that is our best estimate. If no amount within a range appears to be a better estimate than any other, we use the amount that is the low end of such range. If we used the high ends of such ranges, our aggregate potential liability would be approximately $140 million higher than the $250 million recorded in the Condensed Consolidated Balance Sheet as of September 30, 2017. Our ultimate responsibility may differ materially from current estimates. It is possible that technological, regulatory or enforcement developments, the results of environmental studies, the inability to identify other PRPs, the inability of other PRPs to contribute to the settlements of such liabilities, or other factors could require us to record additional liabilities. Our ongoing review of our remediation liabilities, in light of relevant internal and external facts and circumstances, could result in revisions to our accruals that could cause upward or downward adjustments to our balance sheet and income from operations. These adjustments could be material in any given period.

As of September 30, 2017, we have been notified by the government that we are a PRP in connection with 75 locations listed on the Environmental Protection Agency’s (“EPA’s”) Superfund National Priorities List (“NPL”). Of the 75 sites at which claims have been made against us, 15 are sites we own. Each of the NPL sites we own was initially developed by others as a landfill disposal facility. At each of these facilities, we are working in conjunction with the government to evaluate or remediate identified site problems, and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or are working toward a cost-sharing agreement. We generally expect to receive any amounts due from other participating parties at or near the time that we make the remedial expenditures. The other 60 NPL sites, which we do not own, are at various procedural stages under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, known as CERCLA or Superfund.

The majority of proceedings involving NPL sites that we do not own are based on allegations that certain of our subsidiaries (or their predecessors) transported hazardous substances to the sites, often prior to our acquisition of these subsidiaries. CERCLA generally provides for liability for those parties owning, operating, transporting to or disposing at the sites. Proceedings arising under Superfund typically involve numerous waste generators and other waste transportation and disposal companies and seek to allocate or recover costs associated with site investigation and remediation, which costs could be substantial and could have a material adverse effect on our consolidated financial statements. At some of the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a governmental decision and an agreement among liable parties as to the share each will pay for implementing that remedy. At other sites,

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where no remedy has been selected or the liable parties have been unable to agree on an appropriate allocation, our future costs are uncertain.

On October 11, 2017, the EPA issued its Record of Decision (“ROD”) with respect to the previously proposed remediation plan for the San Jacinto waste pits in Harris County, Texas. McGinnes Industrial Maintenance Corporation (“MIMC”), an indirect wholly-owned subsidiary of WM, has been named as a PRP. MIMC operated the waste pits from 1965 to 1966. In 1998, WM acquired the stock of the parent entity of MIMC. MIMC has been working with the EPA and other named PRPs as the process of addressing the site proceeds. During 2016, MIMC’s environmental remediation liability reserves were increased by $44 million to record its estimated potential share of the EPA’s proposed remedy and related costs and MIMC filed comments, detailing its disagreement with the proposed remedy. MIMC remains in disagreement with the remedy set forth in the ROD, and continues to recommend a solution that better protects the environment and public health. Due to the increased estimated cost of the remedy set forth in the ROD, MIMC’s environmental remediation liability reserves have been further increased by $9 million during the current quarter to record its estimated potential share and related costs. MIMC’s ultimate liability could be materially different from current estimates. Allocation of responsibility among the PRPs for the proposed remedy has not been established, and MIMC will continue to engage the EPA regarding the remediation plan selected in the ROD. As of September 30, 2017 and December 31, 2016, our recorded liability for MIMC’s estimated potential share of the EPA’s proposed remedy and related costs was $54 million and $46 million, respectively.

Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings, or such proceedings are known to be contemplated, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $100,000. The following matters are disclosed in accordance with that requirement. We do not currently believe that the eventual outcome of any such matters, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

On January 10, 2017, the Pennsylvania Department of Environmental Protection (“DEP”) solid waste program advised us that it intends to seek civil penalties against the Grows North and Tullytown Landfills (“Grows/Tullytown”), located in southeast Pennsylvania and owned by indirect wholly-owned subsidiaries of WM, related to operational issues, including litter and leachate discharges. Additionally, we received notice on March 15, 2017 that the DEP clean water program also intends to seek civil penalties related to similar underlying events and operational issues at Grows/Tullytown. On September 19, 2017, we received an updated assessment proposal from the DEP for these matters. Our internal review of these matters is in process.

On July 10, 2013, the EPA issued a Notice of Violation ("NOV") to Waste Management of Wisconsin, Inc., an indirect wholly-owned subsidiary of WM, alleging violations of the Resource Conservation Recovery Act concerning acceptance of certain waste that was not permitted to be disposed of at the Metro Recycling & Disposal Facility in Franklin, Wisconsin. The parties are exchanging information and working to resolve the NOV.

Waste Management of Hawaii, Inc. (“WMHI”), an indirect wholly-owned subsidiary of WM, may face civil claims from the Hawaii Department of Health and/or the EPA based on stormwater discharges at the Waimanalo Gulch Sanitary Landfill, which WMHI operates for the city and county of Honolulu, following two major rainstorms in December 2010 and January 2011 and alleged violations of stormwater permit requirements prior to and after the storms.

From time to time, we are also named as defendants in personal injury and property damage lawsuits, including purported class actions, on the basis of having owned, operated or transported waste to a disposal facility that is alleged to have contaminated the environment or, in certain cases, on the basis of having conducted environmental remediation activities at sites. Some of the lawsuits may seek to have us pay the costs of monitoring of allegedly affected sites and health care examinations of allegedly affected persons for a substantial period of time even where no actual damage is

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proven. While we believe we have meritorious defenses to these lawsuits, the ultimate resolution is often substantially uncertain due to the difficulty of determining the cause, extent and impact of alleged contamination (which may have occurred over a long period of time), the potential for successive groups of complainants to emerge, the diversity of the individual plaintiffs’ circumstances, and the potential contribution or indemnification obligations of co-defendants or other third parties, among other factors. Additionally, we often enter into agreements with landowners imposing obligations on us to meet certain regulatory or contractual conditions upon site closure or upon termination of the agreements. Compliance with these agreements inherently involves subjective determinations and may result in disputes, including litigation.

Litigation — As a large company with operations across the United States and Canada, we are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of our business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions that have been filed against us, and that may be filed against us in the future, include personal injury, property damage, commercial, customer, and employment-related claims, including purported state and national class action lawsuits related to: alleged environmental contamination, including releases of hazardous material and odors; sales and marketing practices, customer service agreements and prices and fees; and federal and state wage and hour and other laws. The plaintiffs in some actions seek unspecified damages or injunctive relief, or both. These actions are in various procedural stages, and some are covered, in part, by insurance. We currently do not believe that the eventual outcome of any such actions will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

WM’s charter and bylaws provide that WM shall indemnify against all liabilities and expenses, and upon request shall advance expenses to any person, who is subject to a pending or threatened proceeding because such person is or was a director or officer of the Company. Such indemnification is required to the maximum extent permitted under Delaware law. Accordingly, the director or officer must execute an undertaking to reimburse the Company for any fees advanced if it is later determined that the director or officer was not permitted to have such fees advanced under Delaware law. Additionally, the Company has direct contractual obligations to provide indemnification to each of the members of WM’s Board of Directors and each of WM’s executive officers. The Company may incur substantial expenses in connection with the fulfillment of its advancement of costs and indemnification obligations in connection with actions or proceedings that may be brought against its former or current officers, directors and employees.

Multiemployer Defined Benefit Pension Plans — About 20% of our workforce is covered by collective bargaining agreements with various local unions across the United States and Canada. As a result of some of these agreements, certain of our subsidiaries are participating employers in a number of trustee-managed multiemployer defined benefit pension plans (“Multiemployer Pension Plans”) for the covered employees. In connection with our ongoing renegotiation of various collective bargaining agreements, we may discuss and negotiate for the complete or partial withdrawal from one or more of these Multiemployer Pension Plans. A complete or partial withdrawal from a Multiemployer Pension Plan may also occur if employees covered by a collective bargaining agreement vote to decertify a union from continuing to represent them. Any other circumstance resulting in a decline in Company contributions to a Multiemployer Pension Plan through a reduction in the labor force, whether through attrition over time or through a business event (such as the discontinuation or nonrenewal of a customer contract, the decertification of a union, or relocation, reduction or discontinuance of certain operations) may also trigger a complete or partial withdrawal from one or more of these pension plans.

During the third quarter of 2017, we recognized an $11 million charge in operating expenses for the withdrawal from an underfunded Multiemployer Pension Plan. We do not believe that any future liability relating to our past or current participation in, or withdrawals from, the Multiemployer Pension Plans to which we contribute will have a material adverse effect on our business, financial condition or liquidity. However, liabilities for future withdrawals could have a material adverse effect on our results of operations or cash flows for a particular reporting period, depending on the number of employees withdrawn and the financial condition of the Multiemployer Pension Plan(s) at the time of such withdrawal(s).

Tax Matters — We participate in the IRS’s Compliance Assurance Process, which means we work with the IRS throughout the year towards resolving any material issues prior to the filing of our annual tax return. Any unresolved issues

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as of the tax return filing date are subject to routine examination procedures. We are currently in the examination phase of IRS audits for the 2014 through 2017 tax years and expect these audits to be completed within the next 27 months. We are also currently undergoing audits by various state and local jurisdictions for tax years that date back to 2009, with the exception of affirmative claims in a limited number of jurisdictions that date back to 2000. We maintain a liability for uncertain tax positions, the balance of which management believes is adequate. Results of audit assessments by taxing authorities are not currently expected to have a material adverse effect on our financial condition, results of operations or cash flows.

7.    Segment and Related Information

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. The 17 Areas constitute our operating segments and none of the Areas individually meet the quantitative criteria to be a separate reportable segment. We have evaluated the aggregation criteria and concluded that, based on the similarities between our Areas, including the fact that our Solid Waste business is homogenous across geographies with the same services offered across the Areas, aggregation of our Areas is appropriate for purposes of presenting our reportable segments. Accordingly, we have aggregated our 17 Areas into three tiers that we believe have similar economic characteristics and future prospects based in large part on a review of the Areas’ income from operations margins. The economic variations experienced by our Areas are attributable to a variety of factors, including regulatory environment of the Area; economic environment of the Area, including level of commercial and industrial activity; population density; service offering mix and disposal logistics, with no one factor being singularly determinative of an Area’s current or future economic performance.

Tier 1 is comprised of our operations across the Southern United States, with the exception of Southern California and the Florida peninsula, and also includes the New England states, the tri-state area of Michigan, Indiana and Ohio, and Western Canada. Tier 2 includes Southern California, Eastern Canada, Wisconsin, Minnesota and a portion of the lower Mid-Atlantic region of the United States. Tier 3 encompasses all the remaining operations including the Pacific Northwest and Northern California, the majority of the Mid-Atlantic region of the United States, the Florida peninsula, Illinois and Missouri.

The operating segments not evaluated and overseen through the 17 Areas are presented herein as “Other” as these operating segments do not meet the criteria to be aggregated with other operating segments and do not meet the quantitative criteria to be separately reported.

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Summarized financial information concerning our reportable segments is shown in the following table (in millions):

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Three Months Ended September 30:
2017
Solid Waste:
Tier 1	$	1,432	$	(258)	$	1,174	$	398
Tier 2		924		(171)		753		180
Tier 3		1,447		(256)		1,191		275
Solid Waste		3,803		(685)		3,118		853
Other		662		(64)		598		(16)
		4,465		(749)		3,716		837
Corporate and Other		—		—		—		(136)
Total	$	4,465	$	(749)	$	3,716	$	701
2016
Solid Waste:
Tier 1	$	1,364	$	(238)	$	1,126	$	369
Tier 2		885		(162)		723		121
Tier 3		1,382		(241)		1,141		238
Solid Waste		3,631		(641)		2,990		728
Other		608		(50)		558		(30)
		4,239		(691)		3,548		698
Corporate and Other		—		—		—		(138)
Total	$	4,239	$	(691)	$	3,548	$	560

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	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Nine Months Ended September 30:
2017
Solid Waste:
Tier 1	$	4,189	$	(754)	$	3,435	$	1,159
Tier 2		2,682		(493)		2,189		527
Tier 3		4,200		(745)		3,455		750
Solid Waste		11,071		(1,992)		9,079		2,436
Other		1,922		(168)		1,754		(66)
		12,993		(2,160)		10,833		2,370
Corporate and Other		—		—		—		(438)
Total	$	12,993	$	(2,160)	$	10,833	$	1,932
2016
Solid Waste:
Tier 1	$	3,921	$	(679)	$	3,242	$	1,065
Tier 2		2,522		(462)		2,060		423
Tier 3		3,989		(686)		3,303		681
Solid Waste		10,432		(1,827)		8,605		2,169
Other		1,680		(136)		1,544		(86)
		12,112		(1,963)		10,149		2,083
Corporate and Other		—		—		—		(404)
Total	$	12,112	$	(1,963)	$	10,149	$	1,679

Fluctuations in our operating results may be caused by many factors, including period-to-period changes in the relative contribution of revenue by each line of business, changes in commodity prices and general economic conditions. In addition, our revenues and income from operations typically reflect seasonal patterns. Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.

Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes resulting from climate change can significantly affect the operating results of the Areas affected. On the other hand, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern United States, can increase our revenues in the Areas affected. While weather conditions and other event driven special projects can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.

8.    Acquisitions

Southern Waste Systems/Sun Recycling (“SWS”) — On January 8, 2016, Waste Management Inc. of Florida, an indirect wholly-owned subsidiary of WM, acquired certain operations and business assets of SWS in Southern Florida for total consideration of $525 million. The acquired business assets include residential, commercial and industrial solid waste collection, processing/recycling and transfer operations, equipment, vehicles, real estate and customer agreements.

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9.    Asset Impairments and Unusual Items

Expense from divestitures, asset impairments and unusual items, net

During the nine months ended September 30, 2016, we recognized net charges of $107 million, primarily related to (i) a $43 million charge to impair a landfill in Western Pennsylvania due to a loss of expected volumes; (ii) a $42 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6; (iii) a $10 million goodwill impairment charge related to our LampTracker® reporting unit and (iv) an $8 million loss on the sale of a majority-owned organics company.

During the third quarter of 2017, we recognized an additional $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6.

Equity in net losses of unconsolidated entities

During the nine months ended September 30, 2017, we recognized $28 million of impairment charges to write down equity method investments in waste diversion technology companies to their estimated fair values.

Other, net

During the second quarter of 2016, we recognized $41 million of impairment charges to write down minority-owned investments in waste diversion technology companies to their estimated fair values.

10.  Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, which is included as a component of Waste Management, Inc. stockholders’ equity, are as follows (in millions, with amounts in parentheses representing decreases to accumulated other comprehensive income):

					Foreign		Post-
			Available-		Currency		Retirement
	Derivative		for-Sale		Translation		Benefit
	Instruments		Securities		Adjustments		Obligations		Total
Balance, December 31, 2016	$	(40)	$	13	$	(47)	$	(6)	$	(80)
Other comprehensive income before reclassifications, net of tax expense of $0,  $2,  $0 and $0, respectively		—		2		86		—		88
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $3,  $0,  $0 and $0, respectively		6		—		—		—		6
Net current period other comprehensive income		6		2		86		—		94
Balance, September 30, 2017	$	(34)	$	15	$	39	$	(6)	$	14

There have been no derivatives outstanding subsequent to March 31, 2016. For the three months ended March 31, 2016, other comprehensive loss before reclassifications associated with the effective portion of derivatives designated as cash flow hedges for foreign currency derivatives was $7 million, net of tax benefit of $4 million.

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The significant amounts reclassified out of each component of accumulated other comprehensive income (loss) associated with our previously terminated cash flow hedges are as follows (in millions, with amounts in parentheses representing debits to the statement of operations classification):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Statement of
	2017		2016		2017		2016		Operations Classification
Forward-starting interest rate swaps	$	(2)	$	(2)	$	(8)	$	(8)	Interest expense, net
Treasury rate locks		(1)		(1)		(1)		(1)	Interest expense, net
Foreign currency derivatives		—		—		—		(20)	Other, net
		(3)		(3)		(9)		(29)	Total before tax
		1		1		3		11	Tax benefit
Total reclassifications for the period	$	(2)	$	(2)	$	(6)	$	(18)	Net of tax

11.  Common Stock Repurchase Program

The Company repurchases shares of its common stock as part of capital allocation programs authorized by our Board of Directors.

In November 2016, we entered into an accelerated share repurchase (“ASR”) agreement to repurchase $225 million of our common stock. At the beginning of the repurchase period, we delivered $225 million in cash and received 2.8 million shares based on a stock price of $63.41. The ASR agreement completed in February 2017, at which time we received 0.4 million additional shares based on a final weighted average price per share during the repurchase period of $69.43.

In June 2017, we entered into an ASR agreement to repurchase $250 million of our common stock. At the beginning of the repurchase period, we delivered $250 million in cash and received 2.7 million shares based on a stock price of $73.46. The ASR agreement completed in August 2017, at which time we received 0.7 million additional shares based on a final weighted average price per share during the repurchase period of $74.31.

In August 2017, we entered into an ASR agreement to repurchase $500 million of our common stock. At the beginning of the repurchase period, we delivered $500 million in cash and received 5.3 million shares based on a stock price of $75.25. The final number of shares to be repurchased and the final average price per share under the ASR agreement will depend on the volume-weighted average price of our stock, less a discount, during the term of the agreement. Purchases under the ASR agreement are expected to be completed in December 2017.

Following the execution of the August 2017 ASR agreement, the Company has no remaining authorization outstanding from our Board of Directors to execute share repurchases.

We account for ASR agreements as two separate transactions: (i) as shares of reacquired common stock for the shares delivered to us upon effectiveness of the ASR agreement and (ii) as a forward contract indexed to our own common stock for the undelivered shares. The initial delivery of shares is included in treasury stock at cost and results in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share. The forward contracts indexed to our own common stock meet the criteria for equity classification, and these amounts are initially recorded in additional paid-in capital and reclassified to treasury stock upon completion of the ASR agreement.

20

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.  Fair Value Measurements

Assets and Liabilities Accounted for at Fair Value

Our assets and liabilities that are measured at fair value on a recurring basis include the following (in millions):

			Fair Value Measurements as of
			September 30, 2017 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	16	$	16	$	—	$	—
Available-for-sale securities		54		—		54		—
Fixed-income securities		46		—		46		—
Redeemable preferred stock		55		—		—		55
Total assets	$	171	$	16	$	100	$	55

			Fair Value Measurements as of
			December 31, 2016 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	35	$	35	$	—	$	—
Available-for-sale securities		46		—		46		—
Fixed-income securities		39		—		39		—
Redeemable preferred stock		54		—		—		54
Total assets	$	174	$	35	$	85	$	54

(a) When available, Level 3 investments have been measured based on third-party investors’ recent or pending transactions in these securities, which are considered the best evidence of fair value. When this evidence is not available, we use other valuation techniques as appropriate and available. These valuation methodologies may include transactions in similar instruments, discounted cash flow analysis, third-party appraisals or industry multiples and public comparables. There has not been any significant change in the fair value of the redeemable preferred stock since our assessment as of December 31, 2016.

Fair Value of Debt

As of September 30, 2017 and December 31, 2016, the carrying value of our debt was $9.3 billion. The estimated fair value of our debt was approximately $9.9 billion and $9.7 billion as of September 30, 2017 and December 31, 2016, respectively. The fair value of our fixed-rate debt is estimated by using a discounted cash flow approach and current market rates for similar types of instruments. The carrying value of our variable-rate debt approximates fair value due to the short-term nature of the interest rates. The increase in fair value of our debt when comparing September 30, 2017 to December 31, 2016 is primarily related to decreases in current market rates for similar types of instruments.

Although we have determined the estimated fair value amounts using available market information and commonly accepted valuation methodologies, considerable judgment is required in interpreting market data to develop the estimates

21

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of fair value. Accordingly, our estimates are not necessarily indicative of the amounts that we, or holders of the instruments, could realize in a current market exchange. The use of different assumptions or estimation methodologies could have a material effect on the estimated fair values. The fair value estimates are based on Level 2 inputs of the fair value hierarchy available as of September 30, 2017 and December 31, 2016. These amounts have not been revalued since those dates, and current estimates of fair value could differ significantly from the amounts presented.

13.  Variable Interest Entities

Following is a description of our financial interests in unconsolidated and consolidated variable interest entities that we consider significant:

Low-Income Housing Properties and Refined Coal Facility Investments

We have investments in entities established to manage low-income housing properties and a refined coal facility. We support the operations of these entities in exchange for a pro-rata share of the tax credits they generate. We do not consolidate these entities as we have determined we are not the primary beneficiary of these entities as we do not have the power to individually direct the activities of these entities. Accordingly, we account for these investments under the equity method of accounting. Our aggregate investment balance in these two entities was $65 million and $84 million, as of September 30, 2017 and December 31, 2016, respectively. The debt balance related to our investment in low-income housing properties was $40 million and $57 million as of September 30, 2017 and December 31, 2016, respectively. Additional information related to these investments is discussed in Note 4.

Trust Funds for Final Capping, Closure, Post-Closure or Environmental Remediation Obligations

We have significant financial interests in trust funds that were created to settle certain of our final capping, closure, post-closure or environmental remediation obligations. These trust funds are established such that we are either the sole beneficiary of these restricted balances or we share benefit with the host community in which we operate. We have determined that these trust funds are variable interest entities; however, we are not the primary beneficiary of certain of these entities, as described further below. As the party with primary responsibility to fund the related final capping, closure, post-closure or environmental remediation activities for these trust funds, we are exposed to risk of loss if there are declines in the fair value of the assets of the trust. We currently expect the trust funds to continue to meet the statutory requirements for which they were established.

Unconsolidated Variable Interest Entities — Trust funds that are established for both the benefit of the Company and the host community in which we operate are not consolidated because we are not the primary beneficiary of these entities as we either do not have the (i) power to direct the significant activities of the trusts or (ii) power over the trusts’ significant activities is shared. Our interests in these trusts are accounted for as investments in unconsolidated entities and receivables. These amounts are recorded in other receivables, investments in unconsolidated entities and long-term other assets in our Condensed Consolidated Balance Sheets, as appropriate. We also reflect our share of the unrealized gains and losses on available-for-sale securities held by these trusts as a component of our accumulated other comprehensive income (loss). Our investments and receivables related to these trusts had an aggregate carrying value of $99 million and $93 million as of September 30, 2017 and December 31, 2016, respectively.

Consolidated Variable Interest Entities — Trust funds for which we are the sole beneficiary are consolidated because we are the primary beneficiary. We account for these trust funds as long-term other assets in our Condensed Consolidated Balance Sheets. Unrealized gains and losses on available-for-sale securities held by these trusts are recorded as a component of our accumulated other comprehensive income (loss). These trusts had a fair value of $101 million and $95 million as of September 30, 2017 and December 31, 2016, respectively.

22

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14.  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, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	35	$	—	$	35
Other current assets		3		5		2,257		—		2,265
		3		5		2,292		—		2,300
Property and equipment, net		—		—		11,136		—		11,136
Investments in affiliates		21,105		21,607		—		(42,712)		—
Advances to affiliates		—		—		14,171		(14,171)		—
Other assets		12		31		7,470		—		7,513
Total assets	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	736	$	—	$	114	$	—	$	850
Accounts payable and other current liabilities		61		4		2,344		—		2,409
		797		4		2,458		—		3,259
Long-term debt, less current portion		5,911		304		2,280		—		8,495
Due to affiliates		14,425		231		5,299		(19,955)		—
Other liabilities		8		—		3,887		—		3,895
Total liabilities		21,141		539		13,924		(19,955)		15,649
Equity:
Stockholders’ equity		5,278		21,104		21,608		(42,712)		5,278
Advances to affiliates		(5,299)		—		(485)		5,784		—
Noncontrolling interests		—		—		22		—		22
		(21)		21,104		21,145		(36,928)		5,300
Total liabilities and equity	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949

23

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2016

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	32	$	—	$	32
Other current assets		5		5		2,334		—		2,344
		5		5		2,366		—		2,376
Property and equipment, net		—		—		10,950		—		10,950
Investments in affiliates		19,924		20,331		—		(40,255)		—
Advances to affiliates		—		—		13,000		(13,000)		—
Other assets		14		30		7,489		—		7,533
Total assets	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	269	$	—	$	148	$	—	$	417
Accounts payable and other current liabilities		81		9		2,287		—		2,377
		350		9		2,435		—		2,794
Long-term debt, less current portion		6,229		304		2,360		—		8,893
Due to affiliates		13,350		128		5,299		(18,777)		—
Other liabilities		16		—		3,836		—		3,852
Total liabilities		19,945		441		13,930		(18,777)		15,539
Equity:
Stockholders’ equity		5,297		19,925		20,330		(40,255)		5,297
Advances to affiliates		(5,299)		—		(478)		5,777		—
Noncontrolling interests		—		—		23		—		23
		(2)		19,925		19,875		(34,478)		5,320
Total liabilities and equity	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859

24

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,716	$	—	$	3,716
Costs and expenses		—		—		3,015		—		3,015
Income from operations		—		—		701		—		701
Other income (expense):
Interest expense, net		(75)		(5)		(10)		—		(90)
Equity in earnings of subsidiaries, net of tax		432		435		—		(867)		—
Other, net		—		—		(8)		—		(8)
		357		430		(18)		(867)		(98)
Income before income taxes		357		430		683		(867)		603
Income tax expense (benefit)		(29)		(2)		246		—		215
Consolidated net income		386		432		437		(867)		388
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	386	$	432	$	435	$	(867)	$	386

Three Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,548	$	—	$	3,548
Costs and expenses		—		—		2,988		—		2,988
Income from operations		—		—		560		—		560
Other income (expense):
Interest expense, net		(77)		(5)		(12)		—		(94)
Equity in earnings of subsidiaries, net of tax		349		352		—		(701)		—
Other, net		—		—		(9)		—		(9)
		272		347		(21)		(701)		(103)
Income before income taxes		272		347		539		(701)		457
Income tax expense (benefit)		(30)		(2)		185		—		153
Consolidated net income		302		349		354		(701)		304
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	302	$	349	$	352	$	(701)	$	302

25

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued)

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,833	$	—	$	10,833
Costs and expenses		—		—		8,901		—		8,901
Income from operations		—		—		1,932		—		1,932
Other income (expense):
Interest expense, net		(223)		(15)		(34)		—		(272)
Equity in earnings of subsidiaries, net of tax		1,181		1,190		—		(2,371)		—
Other, net		—		—		(53)		—		(53)
		958		1,175		(87)		(2,371)		(325)
Income before income taxes		958		1,175		1,845		(2,371)		1,607
Income tax expense (benefit)		(88)		(6)		655		—		561
Consolidated net income		1,046		1,181		1,190		(2,371)		1,046
Less: Net income (loss) attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	1,046	$	1,181	$	1,190	$	(2,371)	$	1,046

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,149	$	—	$	10,149
Costs and expenses		—		—		8,470		—		8,470
Income from operations		—		—		1,679		—		1,679
Other income (expense):
Interest expense, net		(227)		(15)		(40)		—		(282)
Equity in earnings of subsidiaries, net of tax		986		995		—		(1,981)		—
Other, net		(1)		—		(84)		—		(85)
		758		980		(124)		(1,981)		(367)
Income before income taxes		758		980		1,555		(1,981)		1,312
Income tax expense (benefit)		(89)		(6)		561		—		466
Consolidated net income		847		986		994		(1,981)		846
Less: Net income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	847	$	986	$	995	$	(1,981)	$	847

26

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended September 30:
2017
Comprehensive income	$	388	$	432	$	482	$	(867)	$	435
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	388	$	432	$	480	$	(867)	$	433
2016
Comprehensive income	$	303	$	349	$	339	$	(701)	$	290
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	303	$	349	$	337	$	(701)	$	288

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Nine Months Ended September 30:
2017
Comprehensive income	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
2016
Comprehensive income	$	852	$	986	$	1,053	$	(1,981)	$	910
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management Inc.	$	852	$	986	$	1,054	$	(1,981)	$	911

27

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,390	$	—	$	2,390
Investing activities		—		—		(984)		—		(984)
Financing activities		—		—		(1,404)		—		(1,404)
Effect of exchange rate changes on cash and cash equivalents		—		—		1		—		1
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		3		—		3
Cash and cash equivalents at beginning of period		—		—		32		—		32
Cash and cash equivalents at end of period	$	—	$	—	$	35	$	—	$	35

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,252	$	—	$	2,252
Investing activities		—		—		(1,550)		—		(1,550)
Financing activities		—		—		(711)		—		(711)
Effect of exchange rate changes on cash and cash equivalents		—		—		—		—		—
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		(9)		—		(9)
Cash and cash equivalents at beginning of period		—		—		39		—		39
Cash and cash equivalents at end of period	$	—	$	—	$	30	$	—	$	30

(a) Cash receipts and payments of WM and WM Holdings are transacted by Non-Guarantor Subsidiaries.

15.  New Accounting Standards Pending Adoption

Income Taxes — In October 2016, the FASB issued ASU 2016‑16 associated with the timing of recognition of income taxes for intra-entity transfers of assets other than inventory. The amended guidance requires the recognition of income taxes when the transfer of the asset occurs, which replaces current GAAP that defers the recognition of income taxes until the transferred asset is sold to a third party or otherwise recovered through use. The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Statement of Cash Flows — In August 2016, the FASB issued ASU 2016‑15 associated with the classification of certain cash receipts and cash payments in the statement of cash flows. In November 2016, the FASB issued ASU 2016‑18 associated with the presentation of restricted cash and cash equivalents in the statement of cash flows. The objective of both amendments was to reduce existing diversity in practice. The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

28

WASTE MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Financial Instrument Credit Losses — In June 2016, the FASB issued ASU 2016‑13 associated with the measurement of credit losses on financial instruments. The amended guidance replaces the current incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. The amended guidance is effective for the Company on January 1, 2020, with early adoption permitted beginning January 1, 2019. We are assessing the provisions of this amended guidance and evaluating the impact on our consolidated financial statements.

Leases — In February 2016, the FASB issued ASU 2016‑02 associated with lease accounting. The amended guidance requires the recognition of lease assets and lease liabilities on the balance sheet for those leases with terms in excess of 12 months and currently classified as operating leases. The disclosure of key information about leasing arrangements will also be required. The amended guidance is effective for the Company on January 1, 2019. We are assessing the provisions of this amended guidance and we have (i) formed an implementation work team; (ii) performed training for the various organizations that will be most affected by the new standard and (iii) acquired a software solution to manage and account for leases under the new standard. We are still evaluating the impact of this amended guidance on our consolidated financial statements.

Financial Instruments — In January 2016, the FASB issued ASU 2016‑01 associated with the recognition and measurement of financial assets and liabilities. The amended guidance will require certain equity investments that are not consolidated to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Revenue Recognition — In May 2014, the FASB issued ASU 2014‑09 associated with revenue recognition. The amended guidance requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the amendments will require enhanced qualitative and quantitative disclosures regarding customer contracts. The amended guidance associated with revenue recognition is effective for the Company on January 1, 2018. The amended guidance may be applied retrospectively for all periods presented (“full retrospective method”) or retrospectively with the cumulative effect of initially applying the amended guidance recognized at the date of initial adoption (“modified retrospective method”). The Company is currently planning to adopt the amended guidance using the modified retrospective method as of January 1, 2018.

To assess the impact of the standard, we utilized internal resources to lead the implementation effort and supplemented them with external resources. Our internal resources read the amended guidance, attended trainings and consulted with other accounting professionals to assist with interpretation of the amended guidance. Surveys were sent to and returned by all operating segments to assess the potential impact of the amended guidance and to tailor specific procedures to evaluate the potential impact. Based on the results of these surveys, we judgmentally selected a sample of contracts based on size and specifically identified contract traits that could be accounted for differently under the amended guidance. We also selected a representative sample of contracts to corroborate the survey results.

Based on our work to date, we believe we have identified all material contract types and costs that may be impacted by this amended guidance. We currently do not expect the amended guidance to have a material impact on operating revenues. However, upon adoption of the amended guidance, we anticipate recognizing an asset from the capitalization of certain sales incentives as contract acquisitions costs. Under the amended guidance, certain sales incentives will be capitalized and amortized to selling, general and administrative expense over the expected life of the customer relationship. Additionally, under the amended guidance we anticipate recognizing certain consideration payable to our customers as a reduction in operating revenues, which under current guidance is recorded as operating expenses.

29

Item 2.    Management’s Discussion and Analysis of Financial Condition andResults of Operations.

The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included under Item 1 and our Consolidated Financial Statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10‑K for the year ended December 31, 2016.

In an effort to keep our stockholders and the public informed about our business, we may make “forward-looking statements.” Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words, “will,” “may,” “should,” “continue,” “anticipate,” “believe,” “expect,” “plan,” “forecast,” “project,” “estimate,” “intend,” and words of a similar nature and generally include statements containing:

· projections about accounting and finances;

· plans and objectives for the future;

· projections or estimates about assumptions relating to our performance; or

· our opinions, views or beliefs about the effects of current or future events, circumstances or performance.

You should view these statements with caution. These statements are not guarantees of future performance, circumstances or events. They are based on facts and circumstances known to us as of the date the statements are made. All aspects of our business are subject to uncertainties, risks and other influences, many of which we do not control. Any of these factors, either alone or taken together, could have a material adverse effect on us and could change whether any forward-looking statement ultimately turns out to be true. Additionally, we assume no obligation to update any forward-looking statement as a result of future events, circumstances or developments.

Some of the risks that we believe could affect our business and financial statements for 2017 and beyond and that could cause actual results to be materially different from those that may be set forth in forward-looking statements made by the Company include the following:

· competition may negatively affect our profitability or cash flows, our pricing strategy may have negative effects on volumes, and inability to execute our pricing strategy while retaining and attracting customers may negatively affect our average yield on collection and disposal lines of business;

· we may fail in implementing or maintaining our cost saving, optimization and growth initiatives and overall business strategy, which could adversely impact our financial performance and growth, and implementation of our initiatives and strategy may have associated negative consequences, such as increased indebtedness, asset impairments, business disruption, exposure to purported class action lawsuits related to our customer service agreements and regulatory issues;

· a key element of our strategy is yield management through focus on price leadership, which has presented challenges to keep existing business and win new business at reasonable returns; the loss of volumes as a result of price increases and our unwillingness to pursue lower margin volumes may negatively affect our cash flows or results of operations;

· we may be unable to identify desirable acquisition targets, negotiate advantageous transactions or realize the benefits expected from such transactions, which could adversely impact our growth strategy, earnings and cash flow;

· integration of acquisitions and/or new service offerings could increase our exposure to environmental liabilities for past operations and the risk of inadvertent noncompliance with laws and regulations;

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· compliance with existing or increased future regulations may impact our business by, among other things, restricting our operations, increasing operating costs or requiring additional capital expenditures, and a decrease in regulation may lower barriers to entry for our competitors;

· possible changes in our estimates of costs for site remediation requirements, final capping, closure and post-closure obligations, compliance and regulatory developments may increase our expenses and future cash outflows;

· certain materials processed by our recycling operations are subject to significant commodity price fluctuations, as are methane gas, electricity and other energy-related products marketed and sold by our landfill gas recovery operations; fluctuations in commodity prices may have negative effects on our operating results;

· a significant portion of the recycled fiber we market is shipped to export markets across the globe, particularly China; changes in international or domestic regulations, restrictions or tariffs on exports could increase operating expense;

· changes in oil and gas prices and drilling activity, and changes in applicable regulations, could adversely affect our Energy and Environmental Services organization;

· increasing customer preference for alternatives to traditional disposal, government mandates supporting diversion of waste and recycling and prohibiting disposal of certain types of waste, and overall reduction of waste generated could continue to have a negative effect on volumes of waste going to our landfills;

· developments in technology could trigger a fundamental change in the waste management industry, as waste streams are increasingly viewed as a resource, which may adversely impact volumes at our landfills and our profitability;

· our existing and proposed service offerings to customers may require that we develop or license, and protect, new technologies; and our inability to obtain or protect new technologies could impact our services to customers and development of new revenue sources;

· we are investing in technologies to provide enhanced customer service and/or disposal alternatives; such technologies may not perform as intended or may experience other difficulties or delays that prevent us from realizing a return on our investment;

· adverse publicity (whether or not justified) relating to activities by our operations, employees or agents could tarnish our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense;

· there is a risk of incurring significant environmental liabilities in the use, treatment, storage, transfer and disposal of waste materials; any substantial liability for environmental damage could have a material adverse effect on our financial condition and cash flows;

· weak economic conditions may negatively affect the volumes of waste generated and demand for post-consumer fiber and metals processed by our recycling operations;

· some of our customers, including governmental entities, have suffered financial difficulties that could affect our business and operating results, due to their credit risk and the impact of the municipal debt market on remarketing of our tax-exempt bonds;

· if we are unable to obtain and maintain permits needed to open, operate, and/or expand our facilities, our results of operations will be negatively impacted;

· diesel fuel price increases or diesel fuel supply shortages may increase our expenses and restrict our ability to operate;

· we are increasingly dependent on the availability of natural gas and fueling infrastructure and vulnerable to natural gas prices; difficulty obtaining natural gas and increases in natural gas prices could increase our operating costs;

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· problems with the operation of current information technology or the development and deployment of new information systems could decrease our efficiencies and increase our costs;

· a cybersecurity incident could negatively impact our business and our relationships with customers and expose us to litigation risk;

· efforts by labor unions to organize our employees may increase operating expenses and we may be unable to negotiate acceptable collective bargaining agreements with those who have chosen to be represented by unions, which could lead to labor disruptions, including strikes and lock-outs, which could adversely affect our results of operations and cash flows;

· we could face significant liability for our past and current participation in multiemployer pension plans;

· we are subject to operational and safety risks; we closely monitor and manage landfills to minimize the risk of waste mass instability and releases of hazardous materials and odors, as well as risks presented by the potential for subsurface heat reactions causing elevated temperatures and increased production of leachate. These and other such risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction;

· increased costs for financial assurance or the inadequacy of our insurance coverage could negatively impact our liquidity and increase our liabilities;

· possible charges as a result of shut-down operations, uncompleted development or expansion projects or other events may negatively affect earnings;

· we may reduce or suspend capital expenditures, acquisition activity, dividend declarations or share repurchases if we suffer a significant reduction in cash flows;

· we may be unable to incur future indebtedness to support our growth and development plans or to refinance our debt obligations, including near-term maturities, on terms consistent with current borrowings, and higher interest rates and market conditions may increase our expense;

· climate change legislation, including possible limits on carbon emissions, may negatively impact our results of operations by increasing expenses;

· weather conditions and other event driven special projects cause our results to fluctuate, and harsh weather or natural disasters may cause us to temporarily suspend operations; these seasonal or event driven items can result in interim variations in our results;

· we could be subject to significant fines and penalties, and our reputation could be adversely affected, if our business, or third parties with whom we have relationships, were to fail to comply with United States or foreign laws or regulations;

· we are subject to various lawsuits, proceedings and disputes; claims asserted against us include property damage, commercial, customer and employment-related matters, including purported class action lawsuits related to alleged environmental contamination, sales and marketing practices, customer service agreements, prices and fees and federal and state wage and hour laws. Such lawsuits and proceedings may increase our costs, limit our ability to conduct or expand our operations, limit our ability to execute our business plans and strategies and adversely affect our liquidity; and

· the adoption of new accounting standards or interpretations may cause fluctuations in reported quarterly results of operations or adversely impact our reported results of operations.

General

Our principal executive offices are located at 1001 Fannin Street, Houston, Texas 77002. Our telephone number is (713) 512‑6200. Our website address is www.wm.com. Our annual reports on Form 10‑K, quarterly reports on Form 10‑Q  

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and current reports on Form 8‑K are all available, free of charge, on our website as soon as practicable after we file the reports with the SEC. Our stock is traded on the New York Stock Exchange under the symbol “WM.”

We are North America’s leading provider of comprehensive waste management environmental services. We partner with our residential, commercial, industrial and municipal customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. Our “Solid Waste” business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provides collection, transfer, disposal, and recycling and resource recovery services. Our “Traditional Solid Waste” business excludes our recycling and resource recovery services. Through our subsidiaries, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the United States.

Overview

Our Company’s goals are targeted at serving our customers, our employees, the environment, the communities in which we work and our stockholders. Increasingly, customers want more of their waste materials recovered, while waste streams are becoming more complex, and our aim is to address the current needs, while anticipating the expanding and evolving needs, of our customers.

We believe we are uniquely equipped to meet the challenges of the changing waste industry and our customers’ waste management needs, both today and as we work together to envision and create a more sustainable future. As the waste industry leader, we have the expertise necessary to collect and handle our customers’ waste efficiently and responsibly by delivering environmental performance — maximizing resource value, while minimizing environmental impact — so that both our economy and our environment can thrive.

Our fundamental strategy has not changed; we remain dedicated to providing long-term value to our stockholders by successfully executing our core strategy of focused differentiation and continuous improvement, with the current state of our strategy taking into account economic conditions, the regulatory environment, asset and resource availability and current technology. We believe that focused differentiation in our industry, driven by capitalizing on our extensive, well-placed network of assets, will deliver profitable growth and competitive advantages. Simultaneously, we believe the combination of cost control, process improvement and operational efficiency will deliver on the Company’s strategy of continuous improvement and yield an attractive total cost structure and enhanced service quality. While we will continue to monitor emerging diversion technologies that may generate additional value and related market dynamics, our current attention will be on improving existing diversion technologies, such as our recycling operations. We believe that execution of our strategy will deliver shareholder value and leadership in a dynamic industry.

Key items of our financial results for the current quarter include:

· Revenues of $3,716 million compared with $3,548 million in the prior year period, an increase of $168 million, or 4.7%. This increase is primarily attributable to (i) yield and volume growth in our collection and disposal lines of business, which increased our revenues by $93 million and (ii) higher market prices for recycling commodities, which contributed $60 million of revenue growth in our recycling line of business;

· Operating expenses of $2,302 million, or 61.9% of revenues, compared with $2,216 million, or 62.5% of revenues, in the prior year period. This increase of $86 million is primarily attributable to (i) increased cost of goods sold primarily related to higher market prices for recycling commodities; (ii) higher volumes; (iii) increased labor and related benefits costs due to merit increases, headcount increases and an $11 million charge for the withdrawal from an underfunded multiemployer pension plan; (iv) increased maintenance and repair costs and (v) increased fuel costs, due to higher fuel prices and the expiration of certain natural gas fuel excise tax credits. These increases were partially offset by decreased landfill leachate management costs;

· Selling, general and administrative expenses of $356 million, or 9.6% of revenues, compared with $330 million, or 9.3% of revenues, in the prior year period. This increase of $26 million is primarily due to (i) an increase in certain costs, including incentive compensation accruals, that vary with revenue and earnings growth; (ii) the

33

impact of a favorable litigation settlement in the third quarter of 2016 and (iii) charitable contributions made for hurricane relief efforts;

· Income from operations of $701 million, or 18.9% of revenues, compared with $560 million, or 15.8% of revenues, in the prior year period; and

· Net income attributable to Waste Management, Inc. of $386 million, or $0.87 per diluted share, compared with $302 million, or $0.68 per diluted share, in the prior year period. 

Our third quarter 2017 results were affected by certain pre-tax charges including (i) an $11 million charge for the withdrawal from an underfunded multiemployer pension plan and (ii) a $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas. These charges had a negative after-tax impact of $12 million, or $0.03 per diluted share.

Our third quarter 2016 results were affected by the recognition of pre-tax charges of $106 million primarily related to (i) a $43 million charge to impair a landfill due to a loss of expected volumes; (ii) a  $42 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas; (iii) a  $10 million goodwill impairment charge related to our LampTracker® reporting unit and (iv) an $8 million loss on the sale of a majority-owned organics company. These charges had a negative after-tax impact of $72 million, or $0.16 per diluted share.

Free Cash Flow

As is our practice, we are presenting free cash flow, which is a non-GAAP measure of liquidity, in our disclosures because we use this measure in the evaluation and management of our business. We define free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other assets (net of cash divested). We believe it is indicative of our ability to pay our quarterly dividends, repurchase common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay our debt obligations. Free cash flow is not intended to replace net cash provided by operating activities, which is the most comparable GAAP measure. However, we believe free cash flow gives investors useful insight into how we view our liquidity. Nonetheless, the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that we have committed to, such as declared dividend payments and debt service requirements.

Our calculation of free cash flow and reconciliation to net cash provided by operating activities is shown in the table below (in millions), and may not be calculated the same as similarly-titled measures presented by other companies:

	Three Months				Nine Months
	Ended				Ended
	September 30,				September 30,
	2017		2016		2017		2016
Net cash provided by operating activities (a)	$	856	$	758	$	2,390	$	2,252
Capital expenditures		(350)		(333)		(981)		(962)
Proceeds from divestitures of businesses and other assets (net of cash divested)		6		8		19		32
Free cash flow (a)	$	512	$	433	$	1,428	$	1,322

(a) Prior year information has been revised to reflect the adoption of Accounting Standards Update (“ASU”) 2016‑09, which is discussed below in Adoption of New Accounting Standards, and conform to our current year presentation. See Note 1 to the Condensed Consolidated Financial Statements.

Our net cash flows provided by operating activities increased by $98 million and $138 million for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods. The three and nine months ended September 30, 2017 were impacted by (i) higher earnings from our Traditional Solid Waste and recycling businesses; (ii) net favorable changes in our assets and liabilities, net of effects of acquisitions and divestitures, exclusive of items

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noted separately and (iii) higher income tax payments. The nine months ended September 30, 2017 was further impacted by (i) cash proceeds of $67 million from the termination of our cross-currency swaps in the first quarter of 2016 and (ii) higher annual incentive plan cash payments of $41 million in the current year period.

Capital expenditures for the three and nine months ended September 30, 2017 were comparable to the prior year periods. The Company continues to maintain a disciplined focus on capital management, and fluctuations in our capital expenditures are a result of new business opportunities, growth in our existing business and timing of replacement of aging assets.

Acquisitions

Southern Waste Systems/Sun Recycling (“SWS”) — On January 8, 2016, Waste Management Inc. of Florida, an indirect wholly-owned subsidiary of WM, acquired certain operations and business assets of SWS in Southern Florida for total consideration of $525 million. The acquired business assets include residential, commercial and industrial solid waste collection, processing/recycling and transfer operations, equipment, vehicles, real estate and customer agreements.

Adoption of New Accounting Standards

Equity-Based Compensation — In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016‑09 associated with equity-based compensation as part of its simplification initiative to reduce the cost and complexity of compliance with U.S. Generally Accepted Accounting Principles (“GAAP”), while maintaining or improving the usefulness of the information provided. This amended guidance was effective for the Company on January 1, 2017 and required the following changes to the presentation of our financial statements:

· Excess tax benefits or deficiencies for share-based payments are now recorded as a discrete item in the period shares vest or stock options are exercised as an adjustment to income tax expense or benefit rather than additional paid-in capital. This change was applied prospectively as of January 1, 2017. The Company did not have any excess tax benefits that were not previously recognized as of January 1, 2017. See Note 4 to the Condensed Consolidated Financial Statements for discussion of the current year impact;

· As of January 1, 2017, the calculation of diluted weighted average shares outstanding was changed prospectively to no longer include excess tax benefits as assumed proceeds. This change did not have a material impact on our current year diluted earnings per share;

· Cash flows related to excess tax benefits or deficiencies are included in net cash provided by operating activities rather than as a financing activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $27 million for the nine months ended September 30, 2016;

· Cash paid to taxing authorities when withholding shares from an employee’s vesting or exercise of equity-based compensation awards for tax-withholding purposes is now considered a repurchase of the Company’s equity instruments and is classified as net cash used in financing activities rather than as an operating activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $18 million for the nine months ended September 30, 2016; and

· The Company has elected to continue to estimate forfeitures rather than account for forfeitures as they occur.

Goodwill Impairment Testing — In January 2017, the FASB issued ASU 2017‑04 which simplifies the goodwill impairment test by eliminating Step 2 of the quantitative assessment and should reduce the cost and complexity of evaluating goodwill for impairment. Under the amended guidance, when a quantitative assessment is required, an entity will perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be measured as the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of recorded goodwill. This amended guidance, effective for the Company on

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January 1, 2020, permits early adoption. The Company’s early adoption on January 1, 2017 did not have an impact on our consolidated financial statements.

Critical Accounting Estimates and Assumptions

In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with precision from available data or simply cannot be calculated. In some cases, these estimates are difficult to determine and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that present the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, long-lived asset impairments and reserves associated with our insured and self-insured claims, as described in Item 7 of our Annual Report on Form 10‑K for the year ended December 31, 2016. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Results of Operations

Operating Revenues

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. We also provide additional services that are not managed through our Solid Waste business, including services provided by our Strategic Business Solutions (“WMSBS”) and Energy and Environmental Services organizations, recycling brokerage services, landfill gas-to-energy services and expanded service offerings and solutions. Our expanded service offerings and solutions include (i) portable self-storage and long distance moving services; (ii) fluorescent bulb and universal waste mail-back through our LampTracker® program; (iii) portable restroom servicing under the name Port-o-Let® and (iv) street and parking lot sweeping services. In addition, we hold interests in oil and gas producing properties. These operations are presented in our “Other” segment in the table below. The following table summarizes revenues during each period (in millions):

	Three Months				Nine Months
	Ended				Ended
	September 30,				September 30,
	2017		2016		2017		2016
Solid Waste	$	3,803	$	3,631	$	11,071	$	10,432
Other		662		608		1,922		1,680
Intercompany		(749)		(691)		(2,160)		(1,963)
Total	$	3,716	$	3,548	$	10,833	$	10,149

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The mix of operating revenues from our major lines of business is reflected in the table below (in millions):

	Three Months				Nine Months
	Ended				Ended
	September 30,				September 30,
	2017		2016		2017		2016
Commercial	$	936	$	881	$	2,764	$	2,592
Residential		635		630		1,888		1,862
Industrial		673		633		1,930		1,807
Other		107		110		330		317
Total collection		2,351		2,254		6,912		6,578
Landfill		884		831		2,487		2,330
Transfer		412		397		1,192		1,134
Recycling		375		325		1,122		883
Other		443		432		1,280		1,187
Intercompany		(749)		(691)		(2,160)		(1,963)
Total	$	3,716	$	3,548	$	10,833	$	10,149

The following table provides details associated with the period-to-period change in revenues (dollars in millions):

	Period-to-Period				Period-to-Period
	Change for the				Change for the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017 vs. 2016				2017 vs. 2016
			As a % of				As a % of
			Total				Total
	Amount		Company(a)		Amount		Company(a)
Average yield (b)	$	133	3.8	%	$	473	4.6	%
Volume		24	0.7			198	2.0
Internal revenue growth		157	4.5			671	6.6
Acquisitions		12	0.3			33	0.3
Divestitures		(9)	(0.3)			(26)	(0.3)
Foreign currency translation		8	0.2			6	0.1
Total	$	168	4.7	%	$	684	6.7	%

(a) Calculated by dividing the increase or decrease for the current year period by the prior year period’s total Company revenue adjusted to exclude the impacts of divestitures for the current year period ($3,539 million and $10,123 million for the three and nine months, respectively).

(b) The amounts reported herein represent the changes in our revenue attributable to average yield for the total Company. We also analyze the changes in average yield in terms of related business revenues to differentiate the changes in yield attributable to our pricing strategies from the changes that are caused by market-driven price changes in commodities. The following table summarizes changes in revenues from average yield on a related business basis (dollars in millions):

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	Period-to-Period				Period-to-Period
	Change for the				Change for the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017 vs. 2016				2017 vs. 2016
			As a % of				As a % of
			Related				Related
	Amount		Business(i)		Amount		Business(i)
Collection and disposal	$	61	2.0	%	$	175	1.9	%
Recycling commodities		60	18.9			247	29.0
Fuel surcharge and mandated fees		12	10.0			51	15.4
Total	$	133	3.8	%	$	473	4.6	%

(i) Calculated by dividing the increase or decrease for the current year period by the prior year period’s related business revenue, adjusted to exclude the impacts of divestitures for the current year period.

Our revenues increased $168 million, or 4.7%, and $684 million, or 6.7%, for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods, driven by (i) higher market prices for the recycling commodities we sell; (ii) higher volumes; (iii) revenue growth from yield on our collection and disposal lines of business and (iv) higher revenues from our fuel surcharge program due to higher diesel fuel prices.

The following provides further details associated with our period-to-period change in revenues:

Average Yield

Collection and Disposal Average Yield — This measure reflects the effect on our revenue from the pricing activities of our collection, transfer and landfill lines of business, exclusive of volume changes. Revenue growth from collection and disposal average yield includes not only base rate changes and environmental and service fee increases, but also (i) certain average price changes related to the overall mix of services, which are due to the types of services provided; (ii) changes in average price from new and lost business and (iii) price decreases to retain customers.

Revenue growth from collection and disposal average yield was $61 million, or 2.0%, and $175 million, or 1.9%, for the three and nine months ended September 30, 2017, respectively. We experienced growth in all of our collection and disposal lines of business in the current year periods. The details are as follows (dollars in millions):

	Period-to-Period				Period-to-Period
	Change for the				Change for the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017 vs. 2016				2017 vs. 2016
			As a % of				As a % of
			Related				Related
	Amount		Business		Amount		Business
Commercial	$	22	2.7	%	$	72	3.0	%
Industrial		20	3.3			50	2.9
Residential		9	1.5			29	1.6
Total collection		51	2.4			151	2.4
Landfill		8	1.5			15	1.0
Transfer		2	0.8			9	1.5
Total collection and disposal	$	61	2.0	%	$	175	1.9	%

Our increase in collection and disposal yield for the three and nine months ended September 30, 2017, compared to the prior year periods, includes increased revenues from our environmental fees of $17 million and $51 million, respectively.

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Recycling Commodities — Increases in the market prices for recycling commodities resulted in revenue growth of $60 million and $247 million for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods. Disruptions in the global movement of recycling commodities and the impact of natural disasters along the Gulf Coast reduced volume and lessened the increase in revenue from market prices for recycling commodities during the third quarter of 2017. Market prices for recycling commodities decreased from the levels we had seen earlier in 2017 and at the end of the third quarter of 2017 had returned to market prices seen in the third quarter of 2016. We expect these disruptions in the market for recycling commodities to continue into the fourth quarter of 2017 and through the first half of 2018, which will continue to put downward pressure on average market prices for recycling commodities.

Fuel Surcharge and Mandated Fees — These revenues, which are predominantly generated by our fuel surcharge program, increased $12 million and $51 million for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods.  These revenues fluctuate in response to changes in the national average prices for diesel fuel on which our surcharge is based. Market prices for diesel fuel increased 10% and 15% for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods, which contributed to the revenue growth in our fuel surcharge program. The mandated fees included in this line item are primarily related to pass-through fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations. These fees did not have a significant impact on the comparability of the periods.

Volume

Our revenues increased $24 million, or 0.7%, and $198 million, or 2.0%, for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods, due to higher volumes. The year-over-year comparison does not include volumes from acquisitions.

We experienced higher volumes due to improving market conditions and improved sales performance supported by our focus on disciplined growth throughout 2017. The most significant contributors to our volume growth were commercial and industrial collection; municipal solid waste and construction and demolition landfills; transfer stations; our recycling brokerage business and our WMSBS organization. Our residential line of business experienced volume declines in the current year periods because of our continued focus on renegotiating existing contracts and winning new contracts with reasonable rates of returns.

Our commercial and industrial collection and our landfill revenue growth in the third quarter of 2017 was consistent with the first half of 2017, but our overall volume growth rate in the current quarter was unfavorably affected by:

· The completion of certain project work performed throughout 2016 and into the first quarter of 2017 in our other collection line of business;

· Our recycling line of business, as discussed above, was negatively impacted by disruptions in the global movement of recycling commodities and the natural disasters along the Gulf Coast during the third quarter of 2017;

· One less workday during the third quarter of 2017 when compared with the same prior year period;

· The anniversary of a large contract addition in our WMSBS organization; and

· Volume declines in our ancillary service businesses.

Acquisitions and Divestitures

Acquisitions increased revenues $12 million and $33 million for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods. These revenues were offset by revenue decreases due to divestitures of $9 million and $26 million for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods.

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Operating Expenses

The following table summarizes the major components of our operating expenses (dollars in millions):

	Three Months								Nine Months
	Ended				Period-to-				Ended				Period-to-
	September 30,				Period				September 30,				Period
	2017		2016		Change				2017		2016		Change
Labor and related benefits	$	641	$	617	$	24	3.9	%	$	1,865	$	1,794	$	71	4.0	%
Transfer and disposal costs		253		252		1	0.4			743		735		8	1.1
Maintenance and repairs		297		277		20	7.2			864		802		62	7.7
Subcontractor costs		311		316		(5)	(1.6)			916		887		29	3.3
Cost of goods sold		260		232		28	12.1			754		623		131	21.0
Fuel		93		81		12	14.8			276		219		57	26.0
Disposal and franchise fees and taxes		198		185		13	7.0			566		525		41	7.8
Landfill operating costs		77		92		(15)	(16.3)			246		265		(19)	(7.2)
Risk management		56		51		5	9.8			168		158		10	6.3
Other		116		113		3	2.7			360		331		29	8.8
	$	2,302	$	2,216	$	86	3.9	%	$	6,758	$	6,339	$	419	6.6	%

Our operating expenses increased $86 million, or 3.9%, and $419 million, or 6.6%, for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods. Our operating expenses as a percentage of revenues decreased to 61.9% for the three months ended September 30, 2017 from 62.5% for the three months ended September 30, 2016, and to 62.4% for the nine months ended September 30, 2017 from 62.5% for the nine months ended September 30, 2016.

We experienced higher operating expenses for the three and nine months ended September 30, 2017 when compared to the prior year periods, primarily related to:

· Higher market prices for recycling commodities, which increased cost of goods sold; and

· Higher volumes, as discussed above in Operating Revenues, which increased operating expenses, most significantly (i) subcontractor costs; (ii) disposal and franchise fees and taxes; (iii) labor and related benefits costs and (iv) maintenance and repairs costs.

Other significant items affecting the comparability of operating expenses for the periods presented include:

Labor and Related Benefits — The increase in labor and related benefits costs was also due to merit increases and a charge in the current quarter for the withdrawal from an underfunded multiemployer pension plan.

Maintenance and Repairs — The increase in maintenance and repairs costs was also due to (i) higher labor costs due to increased headcount, merit increases, and retention and training efforts and (ii) higher third-party repairs and parts costs.

Fuel — The increase in fuel costs was primarily due to higher fuel prices and the expiration of certain natural gas fuel excise tax credits as of December 31, 2016. These cost increases were offset, in part, by lower costs resulting from the ongoing conversion of our fleet to natural gas vehicles.

Subcontractor Costs — Cost increases from higher volumes were more than offset in the current quarter, and partially offset in the nine months ended September 30, 2017, by the completion of certain project work performed throughout 2016 and into the first quarter of 2017 by our remediation and construction services.

Landfill Operating Costs — The decrease in landfill operating costs was driven primarily by decreased landfill leachate management costs.

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Selling, General and Administrative Expenses

The following table summarizes the major components of our selling, general and administrative expenses (dollars in millions):

	Three Months								Nine Months
	Ended				Period-to-				Ended				Period-to-
	September 30,				Period				September 30,				Period
	2017		2016		Change				2017		2016		Change
Labor and related benefits	$	238	$	230	$	8	3.5	%	$	755	$	706	$	49	6.9	%
Professional fees		25		23		2	8.7			71		69		2	2.9
Provision for bad debts		10		8		2	25.0			30		26		4	15.4
Other		83		69		14	20.3			243		231		12	5.2
	$	356	$	330	$	26	7.9	%	$	1,099	$	1,032	$	67	6.5	%

Our selling, general and administrative expenses increased by $26 million, or 7.9%, and $67 million, or 6.5%, for the three and nine months ended September 30, 2017, respectively, as compared with the prior year periods. As a percentage of revenue, our selling, general and administrative expenses increased from 9.3% for the three months ended September 30, 2016 to 9.6% for the three months ended September 30, 2017, and decreased to 10.1% for the nine months ended September 30, 2017 from 10.2% for the nine months ended September 30, 2016.

Labor and related benefits costs increased primarily due to (i) an increase in certain costs, including incentive compensation accruals, that vary with revenue and earnings growth and (ii) merit increases. Additionally, severance costs for former executives contributed to the increase in labor and related benefits costs for the nine months ended September 30, 2017, compared to the prior year period. Our other expenses increased primarily due to (i) a favorable litigation settlement providing for the reimbursement of certain legal fees in the third quarter of 2016 and (ii) charitable contributions made for hurricane relief efforts in the current quarter.

Depreciation and Amortization Expenses

The following table summarizes the components of our depreciation and amortization expenses (dollars in millions):

	Three Months								Nine Months
	Ended				Period-to-				Ended				Period-to-
	September 30,				Period				September 30,				Period
	2017		2016		Change				2017		2016		Change
Depreciation of tangible property and equipment	$	196	$	193	$	3	1.6	%	$	582	$	581	$	1	0.2	%
Amortization of landfill airspace		130		118		12	10.2			381		333		48	14.4
Amortization of intangible assets		24		25		(1)	(4.0)			71		74		(3)	(4.1)
	$	350	$	336	$	14	4.2	%	$	1,034	$	988	$	46	4.7	%

The increase in amortization of landfill airspace during the three and nine months ended September 30, 2017, compared to the prior year periods, was primarily due to increased volumes at our landfills and changes in our landfill estimates.

Expense from Divestitures, Asset Impairments and Unusual Items, Net

During the nine months ended September 30, 2016, we recognized net charges of $107 million, primarily related to (i) a $43 million charge to impair a landfill in Western Pennsylvania due to a loss of expected volumes; (ii) a  $42 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6 to the Condensed Consolidated Financial Statements; (iii) a  $10 million goodwill impairment charge related to our LampTracker® reporting unit and (iv) an $8 million loss on the sale of a majority-owned organics company.

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During the third quarter of 2017, we recognized an additional $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6 to the Condensed Consolidated Financial Statements.

Income from Operations

The following table summarizes income from operations for our reportable segments (dollars in millions):

	Three Months								Nine Months
	Ended				Period-to-				Ended				Period-to-
	September 30,				Period				September 30,				Period
	2017		2016		Change				2017		2016		Change
Solid Waste:
Tier 1	$	398	$	369	$	29	7.9	%	$	1,159	$	1,065	$	94	8.8	%
Tier 2		180		121		59	48.8			527		423		104	24.6
Tier 3		275		238		37	15.5			750		681		69	10.1
Solid Waste		853		728		125	17.2			2,436		2,169		267	12.3
Other		(16)		(30)		14	(46.7)			(66)		(86)		20	(23.3)
Corporate and Other		(136)		(138)		2	(1.4)			(438)		(404)		(34)	8.4
Total	$	701	$	560	$	141	25.2	%	$	1,932	$	1,679	$	253	15.1	%

Our reportable segments are discussed further in Note 7 to the Condensed Consolidated Financial Statements.

Solid Waste — The most significant items affecting the results of operations of our Solid Waste business during the three and nine months ended September 30, 2017 as compared with the prior year periods are summarized below:

· Our Traditional Solid Waste business benefited from internal revenue growth;

· Our recycling line of business was favorable compared to the prior year periods principally due to higher market prices for recycling commodities;

· The impairment of a landfill in the prior year period in Tier 2 due to a loss of expected volumes;

· Higher labor and related benefits costs in the current year periods primarily due to merit increases and a charge for the withdrawal from an underfunded multiemployer pension plan in Tier 2;

· Decreased landfill leachate management costs in Tier 2;

· Increased maintenance and repairs costs; and

· Higher landfill amortization expense related to increased volumes at our landfills and changes in our landfill estimates, primarily in Tiers 1 and 3.

Significant items affecting the comparison of the remaining components of our results of operations for the three and nine months ended September 30, 2017 with the comparable prior year periods are summarized below:

Other — The most significant items affecting the comparability for the periods presented include increased expenses from divestitures, asset impairments and unusual items related to a loss on the sale of a majority-owned organics company and the goodwill impairment associated with our LampTracker®  reporting unit, both in the prior year period.

Corporate and Other — The most significant items affecting the comparability for the periods presented include:

· Increases in both periods to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, primarily in the prior year;

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· Higher labor and related benefits costs in the current year periods were primarily related to higher incentive compensation accruals.  Additionally, severance costs for former executives contributed to higher costs for the nine months ended September 30, 2017; and

· A favorable litigation settlement providing for the reimbursement of certain legal fees in the prior year periods.

Equity in Net Losses of Unconsolidated Entities

We recognized equity in net losses of unconsolidated entities of $8 million and $53 million during the three and nine months ended September 30, 2017, respectively, compared with $9 million and $32 million during the three and nine months ended September 30, 2016, respectively. During the nine months ended September 30, 2017, we recognized $28 million of impairment charges to write down equity method investments in waste diversion technology companies to their estimated fair values. The remaining losses for each period are primarily related to our noncontrolling interests in entities established to invest in and manage low-income housing properties and a refined coal facility. The tax impacts realized as a result of these investments are discussed below in Income Tax Expense. Refer to Notes 4 and 13 to the Condensed Consolidated Financial Statements for more information related to these investments.

Other, Net

We recognized other, net expense of $53 million for the nine months ended September 30, 2016 primarily related to impairment charges of $41 million to write down minority-owned investments in waste diversion technology companies to their estimated fair values during the second quarter of 2016. In addition, we recognized $8 million of expense during the first quarter of 2016 associated with the termination of our cross-currency swaps, which is discussed further in Note 3 to the Condensed Consolidated Financial Statements.

Income Tax Expense

Our income tax expense and effective income tax rates were $215 million, or 35.7%, and $561 million, or 34.9%, for the three and nine months ended September 30, 2017, respectively, compared to $153 million, or 33.7%, and $466 million, or 35.5%, for the three and nine months ended September 30, 2016, respectively.

Our income tax expense and effective income tax rate for the three months ended September 30, 2017 was unfavorably impacted primarily by state and local income taxes offset, in part, by the favorable impact of federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns. Our income tax expense and effective income tax rate for the nine months ended September 30, 2017 was favorably impacted primarily by federal tax credits, excess tax benefits related to equity-based compensation and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments.

Our income tax expense and effective income tax rate for the three months ended September 30, 2016 was favorably impacted primarily by federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments and capital losses. Our income tax expense and effective income tax rate for the nine months ended September 30, 2016 was unfavorably impacted primarily by state and local income taxes and nondeductible impairments and capital losses offset, in part, by the favorable impact of federal tax credits, adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns, and tax audit settlements.

The excess tax benefits related to the vesting or exercise of equity-based compensation awards reduced our income tax expense by $1 million and $35 million for the three and nine months ended September 30, 2017, respectively. See Note 1 to the Condensed Consolidated Financial Statements for discussion of our adoption of ASU 2016‑09.

Our investments in low-income housing properties and the refined coal facility reduced our income tax expense by $14 million and $39 million for the three and nine months ended September 30, 2017, respectively, and by $15 million

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and $40 million for the three and nine months ended September 30, 2016, respectively. Refer to Notes 4 and 13 to the Condensed Consolidated Financial Statements for more information related to these investments.

Liquidity and Capital Resources

Summary of Cash and Cash Equivalents, Restricted Trust and Escrow Accounts and Debt Obligations

The following is a summary of our cash and cash equivalents, restricted trust and escrow accounts and debt balances (in millions):

	September 30,		December 31,
	2017		2016
Cash and cash equivalents	$	35	$	32
Restricted trust and escrow accounts:
Final capping, closure, post-closure and environmental remediation funds	$	101	$	95
Other		16		10
Total restricted trust and escrow accounts	$	117	$	105
Debt:
Current portion	$	850	$	417
Long-term portion		8,495		8,893
Total debt	$	9,345	$	9,310

As of September 30, 2017, we had $1,821 million of debt maturing within the next 12 months, including (i) $590 million of 6.1% senior notes that mature in March 2018; (ii) $551 million of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $502 million of short-term borrowings under our commercial paper program and (iv) $178 million of other debt with scheduled maturities within the next 12 months, including $119 million of tax-exempt bonds. As of September 30, 2017, we have classified $971 million of debt as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our long-term U.S. revolving credit facility (“$2.25 billion revolving credit facility”). The remaining $850 million is classified as current obligations.

As of September 30, 2017, we also have $471 million of variable-rate tax-exempt bonds that are supported by letters of credit. The interest rates on our variable-rate tax-exempt bonds are generally reset on either a daily or weekly basis through a remarketing process. All recent tax-exempt bond remarketings have successfully placed Company bonds with investors at market-driven rates and we currently expect future remarketings to be successful. However, if the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, we have the intent and ability to refinance these bonds on a long-term basis as supported by the forecasted available capacity under our $2.25 billion revolving credit facility. Accordingly, we have also classified these borrowings as long-term in our Condensed Consolidated Balance Sheet as of September 30, 2017.

Summary of Cash Flow Activity

The following is a summary of our cash flows for the nine months ended September 30 (in millions):

	2017		2016
Net cash provided by operating activities (a)	$	2,390	$	2,252
Net cash used in investing activities	$	(984)	$	(1,550)
Net cash used in financing activities (a)	$	(1,404)	$	(711)

(a) Prior year information has been revised to reflect the adoption of ASU 2016‑09 and conform to our current year presentation. See Note 1 to the Condensed Consolidated Financial Statements for further discussion.

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Net Cash Provided by Operating Activities — The most significant items affecting our operating cash flows for the nine months ended September 30, 2017, compared with the prior year period, are summarized below:

· Increase in Earnings — Our income from operations, excluding depreciation and amortization, and asset impairments and unusual items, increased by $202 million on a year-over-year basis, principally driven by higher earnings from our Traditional Solid Waste and recycling businesses.

· Increase in Income Tax Payments —  Cash paid for income taxes was $170 million higher on a year-over-year basis, largely driven by higher earnings in the current year period and timing of income tax payments.

· Cross-Currency Swaps — During the first quarter of 2016, we terminated our cross-currency swaps associated with the anticipated cash flows of intercompany loans between WM Holdings and its wholly-owned Canadian subsidiaries, as discussed further in Note 3 to the Condensed Consolidated Financial Statements. In connection with the termination, we received cash proceeds of $67 million, which were classified as a change in other current assets and other assets.

· Increase in Annual Incentive Plan Cash Payments — Payments for our annual incentive plans are typically made in the first quarter of the year based on prior year performance. Our net cash provided by operating activities was unfavorably impacted by $41 million on a year-over-year basis, due to higher annual incentive cash payments made in the current year period.

· Changes in Assets and Liabilities, Net of Effects of Acquisitions and Divestitures — Our net cash provided by operating activities was favorably impacted on a year-over-year basis by net changes in our assets and liabilities, exclusive of the items noted above.

Net Cash Used in Investing Activities — The most significant items included in our investing cash flows for the nine months ended September 30, 2017 and 2016 are summarized below:

· Acquisitions — We spent $80 million and $600 million on acquisitions during the nine months ended September 30, 2017 and 2016, respectively. In 2016, our acquisitions consisted primarily of certain operations and business assets of SWS as discussed in Note 8 to the Condensed Consolidated Financial Statements.

· Capital Expenditures — We used $981 million and $962 million for capital expenditures during the nine months ended September 30, 2017 and 2016, respectively. The Company continues to maintain a disciplined focus on capital management, and fluctuations in our capital expenditures are a result of new business opportunities, growth in our existing business and the timing of replacement of aging assets.

· Other, Net — Other, net cash flows provided $58 million during the nine months ended September 30, 2017, which was primarily driven by $72 million of cash received from a tax-exempt bond trust fund. The funds received relate to an August 2017 issuance of tax-exempt debt, which was treated as a non-cash financing activity. We recognize the cash proceeds as an investing cash inflow as qualifying capital expenditures are reimbursed from the trust fund.

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Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash flows for the nine months ended September 30, 2017 and 2016 are summarized below:

· Debt Borrowings (Repayments) — The following summarizes our cash borrowings and debt repayments (excluding our commercial paper program discussed below) for the nine months ended September 30 (in millions):

	2017		2016
Borrowings:
$2.25 billion revolving credit facility	$	25	$	1,403
Canadian term loan and revolving credit facility		5		347
Senior notes		—		496
Tax-exempt bonds		—		143
Other debt		92		147
	$	122	$	2,536
Repayments:
$2.25 billion revolving credit facility	$	(451)	$	(1,128)
Canadian term loan and revolving credit facility		(113)		(159)
Senior notes		—		(510)
Tax-exempt bonds		(40)		(246)
Other debt		(145)		(167)
	$	(749)	$	(2,210)
Net borrowings (repayments)	$	(627)	$	326

Refer to Note 3 to the Condensed Consolidated Financial Statements for additional information related to our debt borrowings and repayments.

· Commercial Paper Program — During the nine months ended September 30, 2017, we had net borrowings of $501 million (net of the related discount on issuance) under our commercial paper program. Refer to Note 3 to the Condensed Consolidated Financial Statements for additional information related to our commercial paper program.

· Common Stock Repurchase Program — We paid $750 million and $500 million for common stock repurchases during the nine months ended September 30, 2017 and 2016, respectively. See Note 11 to the Condensed Consolidated Financial Statements for additional information.

· Cash Dividends — We paid cash dividends of $566 million and $546 million during the nine months ended September 30, 2017 and 2016, respectively. The increase in dividend payments is primarily due to our quarterly per share dividend increasing from $0.41 in 2016 to $0.425 in 2017 and has been offset, in part, by a reduction in our common stock outstanding during 2017 as a result of our common stock repurchase program.

Off-Balance Sheet Arrangements

We have financial interests in unconsolidated variable interest entities as discussed in Note 13 to the Condensed Consolidated Financial Statements. Additionally, we are party to guarantee arrangements with unconsolidated entities as discussed in the Guarantees section of Note 6 to the Condensed Consolidated Financial Statements. These arrangements have not materially affected our financial position, results of operations or liquidity during the nine months ended September 30, 2017, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

New Accounting Standards Pending Adoption

Income Taxes — In October 2016, the FASB issued ASU 2016‑16 associated with the timing of recognition of income taxes for intra-entity transfers of assets other than inventory. The amended guidance requires the recognition of income taxes when the transfer of the asset occurs, which replaces current GAAP that defers the recognition of income taxes until the transferred asset is sold to a third party or otherwise recovered through use. The amended guidance is effective for the

46

Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Statement of Cash Flows — In August 2016, the FASB issued ASU 2016‑15 associated with the classification of certain cash receipts and cash payments in the statement of cash flows. In November 2016, the FASB issued ASU 2016‑18 associated with the presentation of restricted cash and cash equivalents in the statement of cash flows. The objective of both amendments was to reduce existing diversity in practice. The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Financial Instrument Credit Losses — In June 2016, the FASB issued ASU 2016‑13 associated with the measurement of credit losses on financial instruments. The amended guidance replaces the current incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. The amended guidance is effective for the Company on January 1, 2020, with early adoption permitted beginning January 1, 2019. We are assessing the provisions of this amended guidance and evaluating the impact on our consolidated financial statements.

Leases — In February 2016, the FASB issued ASU 2016‑02 associated with lease accounting. The amended guidance requires the recognition of lease assets and lease liabilities on the balance sheet for those leases with terms in excess of 12 months and currently classified as operating leases. The disclosure of key information about leasing arrangements will also be required. The amended guidance is effective for the Company on January 1, 2019. We are assessing the provisions of this amended guidance and we have (i) formed an implementation work team; (ii) performed training for the various organizations that will be most affected by the new standard and (iii) acquired a software solution to manage and account for leases under the new standard. We are still evaluating the impact of this amended guidance on our consolidated financial statements.

Financial Instruments — In January 2016, the FASB issued ASU 2016‑01 associated with the recognition and measurement of financial assets and liabilities. The amended guidance will require certain equity investments that are not consolidated to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Revenue Recognition — In May 2014, the FASB issued ASU 2014‑09 associated with revenue recognition. The amended guidance requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the amendments will require enhanced qualitative and quantitative disclosures regarding customer contracts. The amended guidance associated with revenue recognition is effective for the Company on January 1, 2018. The amended guidance may be applied retrospectively for all periods presented (“full retrospective method”) or retrospectively with the cumulative effect of initially applying the amended guidance recognized at the date of initial adoption (“modified retrospective method”). The Company is currently planning to adopt the amended guidance using the modified retrospective method as of January 1, 2018.

To assess the impact of the standard, we utilized internal resources to lead the implementation effort and supplemented them with external resources. Our internal resources read the amended guidance, attended trainings and consulted with other accounting professionals to assist with interpretation of the amended guidance. Surveys were sent to and returned by all operating segments to assess the potential impact of the amended guidance and to tailor specific procedures to evaluate the potential impact. Based on the results of these surveys, we judgmentally selected a sample of contracts based on size and specifically identified contract traits that could be accounted for differently under the amended guidance. We also selected a representative sample of contracts to corroborate the survey results.

Based on our work to date, we believe we have identified all material contract types and costs that may be impacted by this amended guidance. We currently do not expect the amended guidance to have a material impact on operating

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revenues. However, upon adoption of the amended guidance, we anticipate recognizing an asset from the capitalization of certain sales incentives as contract acquisitions costs. Under the amended guidance, certain sales incentives will be capitalized and amortized to selling, general and administrative expense over the expected life of the customer relationship.  Additionally, under the amended guidance we anticipate recognizing certain consideration payable to our customers as a reduction in operating revenues, which under current guidance is recorded as operating expenses.

Seasonal Trends

Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.

Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes resulting from climate change can significantly affect the operating results of the Areas affected. On the other hand, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern United States, can increase our revenues in the Areas affected. While weather conditions and other event driven special projects can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.

Inflation

While inflationary increases in costs can affect our income from operations margins, we believe that inflation generally has not had, and in the near future is not expected to have, any material adverse effect on our results of operations. However, a portion of our collection revenues are generated under long-term agreements with price adjustments based on various indices intended to measure inflation. Additionally, management’s estimates associated with inflation have had, and will continue to have, an impact on our accounting for landfill and environmental remediation liabilities.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

Information about market risks as of September 30, 2017, does not differ materially from that discussed under Item 7A in our Annual Report on Form 10‑K for the year ended December 31, 2016.

Item 4.    Controls and Procedures.

Effectiveness of Controls and Procedures

Our management, with the participation of our principal executive and financial officers, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s  rules and forms, including ensuring that such information is accumulated and communicated to management (including the principal executive and financial officers) as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of September 30, 2017 (the end of the period covered by this Quarterly Report on Form 10‑Q).

Changes in Internal Control over Financial Reporting

Management, together with our CEO and CFO, evaluated the changes in our internal control over financial reporting during the quarter ended September 30, 2017. We determined that there were no changes in our internal control over financial reporting during the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

Item 1. Legal Proceedings.

Information regarding our legal proceedings can be found under the Environmental Matters and Litigation sections of Note 6 to the Condensed Consolidated Financial Statements.

Item 1A. Risk Factors.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10‑K for the year ended December 31, 2016 in response to Item 1A to Part I of Form 10‑K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table summarizes common stock repurchases made during the third quarter of 2017 (shares in millions):

Issuer Purchases of Equity Securities

				Total Number of
	Total			Shares Purchased as	Approximate Maximum
	Number of	Average		Part of Publicly	Dollar Value of Shares that
	Shares	Price Paid		Announced Plans or	May Yet be Purchased Under
Period	Purchased	per Share		Programs	the Plans or Programs
July 1 — 31	—	$	—	—	$	500 million
August 1 — 31	6.0	$	75.15	6.0		—
September 1 — 30	—	$	—	—		—
Total	6.0	$	75.15	6.0

In June 2017, we entered into an accelerated share repurchase (“ASR”) agreement to repurchase $250 million of our common stock. At the beginning of the repurchase period, we delivered $250 million in cash and received 2.7 million shares. The ASR agreement completed in August 2017,  at which time we received 0.7 million additional shares.

In August 2017, we entered into an ASR agreement to repurchase $500 million of our common stock. At the beginning of the repurchase period, we delivered $500 million in cash and received 5.3 million shares. The final number of shares to be repurchased and the final average price per share under the ASR agreement will depend on the volume-weighted average price of our stock, less a discount, during the term of the agreement. Purchases under the ASR agreement are expected to be completed in December 2017.

The “Average Price Paid per Share” in the table above is measured as the weighted average of (i) the final weighted average price per share paid for the 3.4 million shares repurchased through the June 2017 ASR agreement and (ii) the initial average price per share for the August 2017 ASR agreement.

Item 4. Mine Safety Disclosures.

Information concerning mine safety and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this quarterly report.

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Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended, of James C. Fish, Jr., President and Chief Executive Officer.
31.2	Certification Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended, of Devina A. Rankin, Senior Vice President and Chief Financial Officer.
32.1	Certification Pursuant to 18 U.S.C. §1350 of James C. Fish, Jr., President and Chief Executive Officer.
32.2	Certification Pursuant to 18 U.S.C. §1350 of Devina A. Rankin, Senior Vice President and Chief Financial Officer.
95	Mine Safety Disclosures.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WASTE MANAGEMENT, INC.
	By:	/s/ DEVINA A. RANKIN
		Devina A. Rankin
		Senior Vice President and
		Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)
Date: October 26, 2017

51

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James C.  Fish, Jr., certify that:

i.   I have reviewed this report on Form 10-Q of Waste Management, Inc.;

ii.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

iii. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

iv. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a — 15(f) and 15d — 15(f)) for the registrant and have:

A.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

v.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

A.  All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ James C. Fish, Jr.
		James C. Fish, Jr.
		President and Chief Executive Officer
Date: October 26, 2017

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Devina A. Rankin, certify that:

i.   I have reviewed this report on Form 10-Q of Waste Management, Inc.;

ii.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

iii. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

iv. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a — 15(f) and 15d — 15(f)) for the registrant and have:

A.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

v.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

A.  All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ DEVINA A. RANKIN
		Devina A. Rankin
		Senior Vice President and Chief Financial Officer
Date: October 26, 2017

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Waste Management, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James C. Fish, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ JAMES C. FISH, JR.
		James C. Fish, Jr.
		President and Chief Executive Officer
October 26, 2017

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Waste Management, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Devina A. Rankin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ DEVINA A. RANKIN
		Devina A. Rankin
		Senior Vice President andChief Financial Officer
October 26, 2017

EX-95

EXHIBIT 95

Mine Safety Disclosures

This exhibit contains certain specified disclosures regarding mine safety required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K. Certain of our subsidiaries have permits for surface mining operations that are incidental to excavation work for landfill development.

During the quarter ended September 30, 2017, we did not receive any of the following: (a) a citation from the U.S. Mine Safety and Health Administration (“MSHA”) for a violation of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the Federal Mine Safety and Health Act of 1977 (the “Mine Safety Act”); (b) an order issued under section 104(b) of the Mine Safety Act; (c) a citation or order for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the Mine Safety Act; (d) a flagrant violation under section 110(b)(2) of the Mine Safety Act; (e) an imminent danger order under section 107(a) of the Mine Safety Act; or (f) a proposed assessment from the MSHA.

In addition, during the quarter ended September 30, 2017, we had no mining-related fatalities, we had no pending legal actions before the Federal Mine Safety and Health Review Commission involving a coal or other mine, and we did not receive any written notice from the MSHA involving a pattern of violations, or the potential to have such a pattern, of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under section 104(e) of the Mine Safety Act.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 19, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Entity Registrant Name	WASTE MANAGEMENT INC
Entity Central Index Key	0000823768
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		434,216,159

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 35	$ 32
Accounts receivable, net of allowance for doubtful accounts of $26 and $24, respectively	1,790	1,700
Other receivables	212	432
Parts and supplies	99	90
Other assets	164	122
Total current assets	2,300	2,376
Property and equipment, net of accumulated depreciation and amortization of $17,826 and $17,152, respectively	11,136	10,950
Goodwill	6,267	6,215
Other intangible assets, net	561	591
Investments in unconsolidated entities	287	320
Other assets	398	407
Total assets	20,949	20,859
Current liabilities:
Accounts payable	789	799
Accrued liabilities	1,136	1,085
Deferred revenues	484	493
Current portion of long-term debt	850	417
Total current liabilities	3,259	2,794
Long-term debt, less current portion	8,495	8,893
Deferred income taxes	1,452	1,482
Landfill and environmental remediation liabilities	1,727	1,675
Other liabilities	716	695
Total liabilities	15,649	15,539
Commitments and contingencies
Waste Management, Inc. stockholders' equity:
Common stock, $0.01 par value; 1,500,000,000 shares authorized; 630,282,461 shares issued	6	6
Additional paid-in capital	4,806	4,850
Retained earnings	7,871	7,388
Accumulated other comprehensive income (loss)	14	(80)
Treasury stock at cost, 196,076,817 and 190,966,584 shares, respectively	(7,419)	(6,867)
Total Waste Management, Inc. stockholders' equity	5,278	5,297
Noncontrolling interests	22	23
Total equity	5,300	5,320
Total liabilities and equity	$ 20,949	$ 20,859

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Balance Sheets
Allowance for doubtful accounts	$ 26	$ 24
Accumulated depreciation and amortization	$ 17,826	$ 17,152
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,500,000,000	1,500,000,000
Common stock, shares issued	630,282,461	630,282,461
Treasury stock, shares	196,076,817	190,966,584

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statements Of Operations
Operating revenues	$ 3,716	$ 3,548	$ 10,833	$ 10,149
Costs and expenses:
Operating	2,302	2,216	6,758	6,339
Selling, general and administrative	356	330	1,099	1,032
Depreciation and amortization	350	336	1,034	988
Restructuring	(2)			4
Expense from divestitures, asset impairments and unusual items, net	9	106	10	107
Total costs and expenses	3,015	2,988	8,901	8,470
Income from operations	701	560	1,932	1,679
Other income (expense):
Interest expense, net	(90)	(94)	(272)	(282)
Equity in net losses of unconsolidated entities	(8)	(9)	(53)	(32)
Other, net				(53)
Total other income (expense)	(98)	(103)	(325)	(367)
Income (loss) before income taxes	603	457	1,607	1,312
Income tax expense	215	153	561	466
Consolidated net income	388	304	1,046	846
Less: Net income (loss) attributable to noncontrolling interests	2	2		(1)
Net income attributable to Waste Management, Inc.	$ 386	$ 302	$ 1,046	$ 847
Basic earnings per common share	$ 0.88	$ 0.68	$ 2.37	$ 1.91
Diluted earnings per common share	0.87	0.68	2.36	1.89
Cash dividends declared per common share	$ 0.425	$ 0.41	$ 1.275	$ 1.23

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statements of Comprehensive Income
Consolidated net income	$ 388	$ 304	$ 1,046	$ 846
Derivative instruments, net	2	2	6	11
Available-for-sale securities, net			2	2
Foreign currency translation adjustments	46	(16)	86	51
Post-retirement benefit obligation, net	(1)
Other comprehensive income (loss), net of tax	47	(14)	94	64
Comprehensive income	435	290	1,140	910
Less: Comprehensive income (loss) attributable to noncontrolling interests	2	2		(1)
Comprehensive income attributable to Waste Management, Inc.	$ 433	$ 288	$ 1,140	$ 911

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Consolidated net income	$ 1,046	$ 846
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	1,034	988
Deferred income tax expense (benefit)	(46)	20
Interest accretion on landfill liabilities	68	67
Interest accretion on and discount rate adjustments to environmental remediation liabilities and recovery assets	2	8
Provision for bad debts	31	27
Equity-based compensation expense	74	67
Net gain from disposal of assets	(7)	(18)
Expense from divestitures, asset impairments and other, net	38	106
Equity in net losses of unconsolidated entities, net of dividends	25	32
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Receivables	112	32
Other current assets	(25)	(21)
Other assets		76
Accounts payable and accrued liabilities	105	73
Deferred revenues and other liabilities	(67)	(51)
Net cash provided by operating activities	2,390	2,252
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired	(80)	(600)
Capital expenditures	(981)	(962)
Proceeds from divestitures of businesses and other assets (net of cash divested)	19	32
Other, net	58	(20)
Net cash used in investing activities	(984)	(1,550)
Cash flows from financing activities:
New borrowings	122	2,536
Debt repayments	(749)	(2,210)
Net commercial paper borrowings	501
Common stock repurchase program	(750)	(500)
Cash dividends	(566)	(546)
Exercise of common stock options	92	57
Tax payments associated with equity-based compensation transactions	(47)	(30)
Other, net	(7)	(18)
Net cash used in financing activities	(1,404)	(711)
Effect of exchange rate changes on cash and cash equivalents	1
Increase (decrease) in cash and cash equivalents	3	(9)
Cash and cash equivalents at beginning of period	32	39
Cash and cash equivalents at end of period	$ 35	$ 30

XML

Condensed Consolidated Statement of Changes in Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Millions	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Noncontrolling Interests [Member]	Total
Beginning balance at Dec. 31, 2016	$ 6	$ 4,850	$ 7,388	$ (80)	$ (6,867)	$ 23	$ 5,320
Beginning balance, shares at Dec. 31, 2016	630,282				(190,967)
Equity roll forward
Consolidated net income			1,046				1,046
Other comprehensive income, net of tax				94			94
Cash dividends			(566)				(566)
Equity-based compensation transactions, net		11	3		$ 143		157
Equity-based compensation transaction, shares					3,974
Common stock repurchase program		(55)			$ (695)		(750)
Common stock repurchase program, shares					(9,082)
Other, net						(1)	(1)
Other, net, shares					(2)
Ending balance at Sep. 30, 2017	$ 6	$ 4,806	$ 7,871	$ 14	$ (7,419)	$ 22	$ 5,300
Ending balance, shares at Sep. 30, 2017	630,282				(196,077)

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2017

Basis of Presentation

Basis of Presentation

1.    Basis of Presentation

The financial statements presented in this report represent the consolidation of Waste Management, Inc., a Delaware corporation; its wholly-owned and majority-owned subsidiaries; and certain variable interest entities for which Waste Management, Inc. or its subsidiaries are the primary beneficiaries as described in Note 13. Waste Management, Inc. is a holding company and all operations are conducted by its subsidiaries. When the terms “the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste Management, Inc., its consolidated subsidiaries and consolidated variable interest entities. When we use the term “WM,” we are referring only to Waste Management, Inc., the parent holding company.

We are North America’s leading provider of comprehensive waste management environmental services. We partner with our residential, commercial, industrial and municipal customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. Our “Solid Waste” business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provides collection, transfer, disposal, and recycling and resource recovery services. Through our subsidiaries, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the United States.

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. We also provide additional services that are not managed through our Solid Waste business, which are presented in this report as “Other.” Additional information related to our segments is included in Note 7.

The Condensed Consolidated Financial Statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 are unaudited. In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The financial statements presented herein should be read in conjunction with the financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2016.

In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with precision from available data or simply cannot be calculated. In some cases, these estimates are difficult to determine, and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that present the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, long-lived asset impairments and reserves associated with our insured and self-insured claims. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Adoption of New Accounting Standards

Equity-Based Compensation — In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑09 associated with equity-based compensation as part of its simplification initiative to reduce the cost and complexity of compliance with U.S. Generally Accepted Accounting Principles (“GAAP”), while maintaining or improving the usefulness of the information provided. This amended guidance was effective for the Company on January 1, 2017 and required the following changes to the presentation of our financial statements:

· Excess tax benefits or deficiencies for share-based payments are now recorded as a discrete item in the period shares vest or stock options are exercised as an adjustment to income tax expense or benefit rather than additional paid-in capital. This change was applied prospectively as of January 1, 2017. The Company did not have any excess tax benefits that were not previously recognized as of January 1, 2017. See Note 4 for discussion of the current year impact;

· As of January 1, 2017, the calculation of diluted weighted average shares outstanding was changed prospectively to no longer include excess tax benefits as assumed proceeds. This change did not have a material impact on our current year diluted earnings per share;

· Cash flows related to excess tax benefits or deficiencies are included in net cash provided by operating activities rather than as a financing activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $27 million for the nine months ended September 30, 2016;

· Cash paid to taxing authorities when withholding shares from an employee’s vesting or exercise of equity-based compensation awards for tax-withholding purposes is now considered a repurchase of the Company’s equity instruments and is classified as net cash used in financing activities rather than as an operating activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $18 million for the nine months ended September 30, 2016; and

· The Company has elected to continue to estimate forfeitures rather than account for forfeitures as they occur.

Goodwill Impairment Testing — In January 2017, the FASB issued ASU 2017‑04 which simplifies the goodwill impairment test by eliminating Step 2 of the quantitative assessment and should reduce the cost and complexity of evaluating goodwill for impairment. Under the amended guidance, when a quantitative assessment is required, an entity will perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be measured as the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of recorded goodwill. This amended guidance, effective for the Company on January 1, 2020, permits early adoption. The Company’s early adoption on January 1, 2017 did not have an impact on our consolidated financial statements.

Reclassifications

When necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

XML

Landfill and Environmental Remediation Liabilities

9 Months Ended

Sep. 30, 2017

Landfill and Environmental Remediation Liabilities

Landfill and Environmental Remediation Liabilities

2.    Landfill and Environmental Remediation Liabilities

Liabilities for landfill and environmental remediation costs are presented in the table below (in millions):

	September 30, 2017						December 31, 2016
			Environmental						Environmental
	Landfill		Remediation		Total		Landfill		Remediation		Total
Current (in accrued liabilities)	$	140	$	23	$	163	$	119	$	28	$	147
Long-term		1,500		227		1,727		1,457		218		1,675
	$	1,640	$	250	$	1,890	$	1,576	$	246	$	1,822

The changes to landfill and environmental remediation liabilities for the nine months ended September 30, 2017 are reflected in the table below (in millions):

			Environmental
	Landfill		Remediation
December 31, 2016	$	1,576	$	246
Obligations incurred and capitalized		51		—
Obligations settled		(74)		(14)
Interest accretion		68		2
Revisions in estimates and interest rate assumptions (a)		14		16
Acquisitions, divestitures and other adjustments		5		—
September 30, 2017	$	1,640	$	250

(a) Includes a $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as further discussed in Note 6.

At several of our landfills, we provide financial assurance by depositing cash into restricted trust funds or escrow accounts for purposes of settling final capping, closure, post-closure and environmental remediation obligations. Generally, these trust funds are established to comply with statutory requirements and operating agreements. See Note 13 for additional information related to these trusts.

XML

Debt

9 Months Ended

Sep. 30, 2017

Debt

Debt

3.    Debt

The following table summarizes the major components of debt as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of September 30, 2017:

	September 30,		December 31,
	2017		2016
$2.25 billion revolving credit facility, maturing July 2020 (weighted average interest rate of 1.9% as of December 31, 2016)	$	—	$	426
Commercial paper program (weighted average interest rate of 1.4% as of September 30, 2017)		502		—
Other letter of credit facilities, maturing through December 2018		—		—
Canadian term loan and revolving credit facility, maturing March 2019 (weighted average effective interest rate of 2.5% as of September 30, 2017 and 2.1% as of December 31, 2016)		143		239
Senior notes maturing through 2045, interest rates ranging from 2.4% to 7.75% (weighted average interest rate of 4.6% as of September 30, 2017 and December 31, 2016)		6,033		6,033
Tax-exempt bonds, maturing through 2045, fixed and variable interest rates ranging from 1.0% to 5.7% (weighted average interest rate of 1.9% as of September 30, 2017 and 1.8% as of December 31, 2016)		2,339		2,304
Capital leases and other, maturing through 2055, interest rates up to 12%		328		308
		9,345		9,310
Current portion of long-term debt		850		417
	$	8,495	$	8,893

Debt Classification

As of September 30, 2017, we had $1,821 million of debt maturing within the next 12 months, including (i) $590 million of 6.1% senior notes that mature in March 2018; (ii) $551 million of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $502 million of short-term borrowings under our commercial paper program and (iv) $178 million of other debt with scheduled maturities within the next 12 months, including $119 million of tax-exempt bonds. As of September 30, 2017, we have classified $971 million of debt as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our long-term U.S. revolving credit facility (“$2.25 billion revolving credit facility”), as discussed below. The remaining $850 million is classified as current obligations.

As of September 30, 2017, we also have $471 million of variable-rate tax-exempt bonds that are supported by letters of credit. The interest rates on our variable-rate tax-exempt bonds are generally reset on either a daily or weekly basis through a remarketing process. All recent tax-exempt bond remarketings have successfully placed Company bonds with investors at market-driven rates and we currently expect future remarketings to be successful. However, if the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, we have the intent and ability to refinance these bonds on a long-term basis as supported by the forecasted available capacity under our $2.25 billion revolving credit facility, as discussed below. Accordingly, we have also classified these borrowings as long-term in our Condensed Consolidated Balance Sheet as of September 30, 2017.

Access to and Utilization of Credit Facilities and Commercial Paper Program

$2.25 Billion Revolving Credit Facility — Our $2.25 billion revolving credit facility maturing in July 2020 provides us with credit capacity to be used for either cash borrowings or to support letters of credit or commercial paper. The rates we pay for outstanding loans are generally based on LIBOR plus a spread depending on the Company’s debt rating assigned by Moody’s Investors Service and Standard and Poor’s. As of September 30, 2017, we had no outstanding borrowings under this facility. We had $777 million of letters of credit issued and $502 million of outstanding borrowings under our commercial paper program, both supported by this facility, leaving unused and available credit capacity of $971 million as of September 30, 2017.

Commercial Paper Program — In August 2016, we entered into a $1.5 billion commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates. The commercial paper program is fully supported by our $2.25 billion revolving credit facility.

Canadian Term Loan and Revolving Credit Facility — We have a Canadian credit agreement (which includes a term loan and revolving credit facility) that matures in March 2019. This agreement provides the Company (i) C$50 million of revolving credit capacity, which can be used for borrowings or letters of credit, and (ii) C$460 million of non-revolving term credit that is prepayable without penalty and principal amounts repaid may not be reborrowed. As of September 30, 2017, we had no borrowings or letters of credit outstanding under the Canadian revolving credit facility.

Other Letter of Credit Facilities — As of September 30, 2017, we had utilized $508 million of other letter of credit facilities, which are both committed and uncommitted, with terms maturing through December 2018.

Debt Borrowings and Repayments

$2.25 Billion Revolving Credit Facility — During the nine months ended September 30, 2017, we had net repayments of $426 million under our $2.25 billion revolving credit facility, all of which was replaced with net borrowings under our commercial paper program.

Commercial Paper Program — During the nine months ended September 30, 2017, we had net borrowings of $501 million (net of the related discount on issuance) for general corporate purposes.

Canadian Term Loan — During the nine months ended September 30, 2017, we repaid C$142 million, or $108 million, of net advances under our Canadian term loan with available cash. The remaining change in the carrying value of outstanding borrowings under our Canadian term loan is due to foreign currency translation.

Tax-Exempt Bonds — During the nine months ended September 30, 2017, we repaid $40 million of our tax-exempt bonds with available cash at their scheduled maturities. We issued $75 million of tax-exempt bonds in August 2017. The proceeds from the issuance of these bonds were deposited directly into a trust fund and may only be used for the specific purpose for which the money was raised, which is generally to finance expenditures for landfill and solid waste disposal facility construction and development. Accordingly, the restricted funds provided by these financing activities have not been included in new borrowings in our Condensed Consolidated Statement of Cash Flows.

Capital Leases and Other — During the nine months ended September 30, 2017, we had net repayments of $53million of other debt paid with available cash. We also entered into $73 million in new capital leases during the nine months ended September 30, 2017 to support new business opportunities.

Cross-Currency Swaps

In March 2016, our Canadian subsidiaries repaid C$370 million of intercompany debt to WM Holdings with proceeds from our Canadian term loan. Concurrent with the repayment of the intercompany debt, we terminated the related cross-currency swaps and received $67 million in cash. The cash received from our termination of these swaps was classified as a change in other current assets and other assets within net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. In addition, we recognized $8 million of expense associated with the termination of these swaps during the first quarter of 2016, which was included in other, net in the Condensed Consolidated Statement of Operations.

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Taxes

Income Taxes

4.    Income Taxes

Our effective income tax rate for the three and nine months ended September 30, 2017 was 35.7% and 34.9%, respectively, compared with 33.7% and 35.5%, respectively, for the comparable prior year periods. We evaluate our effective income tax rate at each interim period and adjust it as facts and circumstances warrant. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended September 30, 2017 was primarily due to the unfavorable impact of state and local income taxes offset, in part, by the favorable impact of federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the nine months ended September 30, 2017 was primarily due to the favorable impact of federal tax credits, excess tax benefits related to equity-based compensation and adjustments to our accruals and related deferred taxes due to the filing of our 2016 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments.

The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the three months ended September 30, 2016 was primarily due to the favorable impact of federal tax credits and adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns offset, in part, by the unfavorable impact of state and local income taxes and nondeductible impairments and capital losses. The difference between federal income taxes computed at the federal statutory rate and reported income taxes for the nine months ended September 30, 2016 was primarily due to the unfavorable impact of state and local income taxes and nondeductible impairments and capital losses offset, in part, by the favorable impact of federal tax credits, adjustments to our accruals and related deferred taxes due to the filing of our 2015 income tax returns, and tax audit settlements.

Equity-Based Compensation — During the three and nine months ended September 30, 2017, we recognized a reduction in our income tax expense of $1 million and $35 million, respectively, for excess tax benefits related to the vesting or exercise of equity-based compensation awards. See Note 1 for discussion of our adoption of ASU 2016‑09.

Investments Qualifying for Federal Tax Credits — We have significant financial interests in entities established to invest in and manage low-income housing properties and a refined coal facility. We support the operations of these entities in exchange for a pro-rata share of the tax credits they generate. The low-income housing investments and the coal facility’s refinement processes qualify for federal tax credits that we expect to realize through 2020 under Section 42 and through 2019 under Section 45, respectively, of the Internal Revenue Code.

We account for our investments in these entities using the equity method of accounting, recognizing our share of each entity’s results of operations and other reductions in the value of our investments in equity in net losses of unconsolidated entities, within our Condensed Consolidated Statements of Operations. During the three and nine months ended September 30, 2017, we recognized $6 million and $21 million of net losses and a reduction in our income tax expense of $14 million and $39 million, respectively, primarily because of tax credits realized from these investments. During the three and nine months ended September 30, 2016, we recognized $7 million and $22 million of net losses and a reduction in our income tax expense of $15 million and $40 million, respectively, primarily because of tax credits realized from these investments. Interest expense associated with our investment in low-income housing properties was not material for the periods presented. See Note 13 for additional information related to these unconsolidated variable interest entities.

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Earnings Per Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share

Earnings Per Share

5.    Earnings Per Share

Basic and diluted earnings per share were computed using the following common share data (shares in millions):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Number of common shares outstanding at end of period	434.2	442.0	434.2	442.0
Effect of using weighted average common shares outstanding	3.6	0.9	6.1	2.3
Weighted average basic common shares outstanding	437.8	442.9	440.3	444.3
Dilutive effect of equity-based compensation awards and other contingently issuable shares (a)	3.0	2.8	3.0	2.8
Weighted average diluted common shares outstanding	440.8	445.7	443.3	447.1
Potentially issuable shares	8.2	9.2	8.2	9.2
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding	1.9	0.5	2.3	0.5

(a) As of January 1, 2017, we adopted ASU 2016‑09 prospectively and no longer include excess tax benefits as assumed proceeds. See Note 1 for further discussion.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies.

Commitments and Contingencies

6.    Commitments and Contingencies

Financial Instruments — We have obtained letters of credit, surety bonds and insurance policies and have established trust funds and issued financial guarantees to support tax-exempt bonds, contracts, performance of landfill final capping, closure and post-closure requirements, environmental remediation and other obligations. Letters of credit generally are supported by our $2.25 billion revolving credit facility and other credit facilities established for that purpose. These facilities are discussed further in Note 3. Surety bonds and insurance policies are supported by (i) a diverse group of third-party surety and insurance companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) wholly-owned insurance companies, the sole business of which is to issue surety bonds and/or insurance policies on our behalf.

Management does not expect that any claims against or draws on these instruments would have a material adverse effect on our financial condition, results of operations or cash flows. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations. In an ongoing effort to mitigate risks of future cost increases and reductions in available capacity, we continue to evaluate various options to access cost-effective sources of financial assurance.

Insurance — We carry insurance coverage for protection of our assets and operations from certain risks including general liability, automobile liability, real and personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability and other coverages we believe are customary to the industry. Our exposure to loss for insurance claims is generally limited to the per incident deductible under the related insurance policy. Our exposure could increase if our insurers are unable to meet their commitments on a timely basis.

We have retained a significant portion of the risks related to our general liability, automobile liability and workers’ compensation claims programs. “General liability” refers to the self-insured portion of specific third-party claims made against us that may be covered under our commercial General Liability Insurance Policy. For our self-insured retentions, the exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial valuation or internal estimates. The accruals for these liabilities could be revised if future occurrences or loss development significantly differ from such valuations and estimates. We do not expect the impact of any known casualty, property, environmental or other contingency to have a material impact on our financial condition, results of operations or cash flows.

Guarantees — In the ordinary course of our business, WM and WM Holdings enter into guarantee agreements associated with their subsidiaries’ operations. Additionally, WM and WM Holdings have each guaranteed all of the senior debt of the other entity. No additional liabilities have been recorded for these intercompany guarantees because all of the underlying obligations are reflected in our Condensed Consolidated Balance Sheets. See Note 14 for further discussion.

We have also guaranteed the obligations and certain performance requirements of, and provided indemnification to, third parties as of September 30, 2017 in connection with both consolidated and unconsolidated entities, including agreements guaranteeing certain market value losses for approximately 850 homeowners’ properties adjacent to or near 22 of our landfills. Our indemnification obligations generally arise from divestitures and provide that we will be responsible for liabilities associated with our operations for events that occurred prior to the sale of the operations. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets or other market conditions are achieved post-closing and we have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. We do not currently believe that contingent obligations to provide indemnification or pay additional post-closing consideration in connection with our divestitures or acquisitions will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In December 2014, we sold our Wheelabrator business, which provides waste-to-energy services and manages waste-to-energy facilities and independent power production plants. Before the divestiture of our Wheelabrator business, WM had guaranteed certain operational and financial performance obligations of Wheelabrator and its subsidiaries in the ordinary course of business. In conjunction with the divestiture, certain WM guarantees of Wheelabrator obligations were terminated, but others continued and are now guarantees of third-party obligations. When possible, Wheelabrator seeks to have the applicable third-party beneficiaries release WM from these guarantees, but until such efforts are successful or the underlying financial commitments are restructured, WM has agreed to retain the guarantees and, in exchange, receive a credit support fee or other financial assurances guaranteed by a third-party financial institution to protect WM in the event of non-compliance by Wheelabrator. The most significant of these guarantees specifically define WM’s maximum financial obligation over the course of the relevant agreements. As of September 30, 2017 and December 31, 2016, WM’s maximum future payments under these guarantees was $96 million. WM’s exposure under certain of the performance guarantees is variable and a maximum exposure is not defined. We have recorded the fair value of the operational and financial performance guarantees, some of which could extend through 2038 if not terminated, in our Condensed Consolidated Balance Sheets. The estimated fair value of WM’s potential obligation associated with guarantees of Wheelabrator’s obligations (net of credit support fee or indemnification asset) decreased from $11 million as of December 31, 2016 to $3 million as of September 30, 2017 primarily due to the release of certain performance guarantees by third-party beneficiaries. We currently do not expect the financial impact of such operational and financial performance guarantees to materially exceed the recorded fair value.

Environmental Matters — A significant portion of our operating costs and capital expenditures could be characterized as costs of environmental protection. The nature of our operations, particularly with respect to the construction, operation and maintenance of our landfills, subjects us to an array of laws and regulations relating to the protection of the environment. Under current laws and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by conditions that existed before we acquired a site. In addition to remediation activity required by state or local authorities, such liabilities include potentially responsible party (“PRP”) investigations. The costs associated with these liabilities can include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated with site investigation and clean-up.

Estimating our degree of responsibility for remediation is inherently difficult. We recognize and accrue for an estimated remediation liability when we determine that such liability is both probable and reasonably estimable. Determining the method and ultimate cost of remediation requires that a number of assumptions be made. There can sometimes be a range of reasonable estimates of the costs associated with the likely site remediation alternatives identified in the environmental impact investigation. In these cases, we use the amount within the range that is our best estimate. If no amount within a range appears to be a better estimate than any other, we use the amount that is the low end of such range. If we used the high ends of such ranges, our aggregate potential liability would be approximately $140 million higher than the $250 million recorded in the Condensed Consolidated Balance Sheet as of September 30, 2017. Our ultimate responsibility may differ materially from current estimates. It is possible that technological, regulatory or enforcement developments, the results of environmental studies, the inability to identify other PRPs, the inability of other PRPs to contribute to the settlements of such liabilities, or other factors could require us to record additional liabilities. Our ongoing review of our remediation liabilities, in light of relevant internal and external facts and circumstances, could result in revisions to our accruals that could cause upward or downward adjustments to our balance sheet and income from operations. These adjustments could be material in any given period.

As of September 30, 2017, we have been notified by the government that we are a PRP in connection with 75 locations listed on the Environmental Protection Agency’s (“EPA’s”) Superfund National Priorities List (“NPL”). Of the 75 sites at which claims have been made against us, 15 are sites we own. Each of the NPL sites we own was initially developed by others as a landfill disposal facility. At each of these facilities, we are working in conjunction with the government to evaluate or remediate identified site problems, and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or are working toward a cost-sharing agreement. We generally expect to receive any amounts due from other participating parties at or near the time that we make the remedial expenditures. The other 60 NPL sites, which we do not own, are at various procedural stages under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, known as CERCLA or Superfund.

The majority of proceedings involving NPL sites that we do not own are based on allegations that certain of our subsidiaries (or their predecessors) transported hazardous substances to the sites, often prior to our acquisition of these subsidiaries. CERCLA generally provides for liability for those parties owning, operating, transporting to or disposing at the sites. Proceedings arising under Superfund typically involve numerous waste generators and other waste transportation and disposal companies and seek to allocate or recover costs associated with site investigation and remediation, which costs could be substantial and could have a material adverse effect on our consolidated financial statements. At some of the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a governmental decision and an agreement among liable parties as to the share each will pay for implementing that remedy. At other sites, where no remedy has been selected or the liable parties have been unable to agree on an appropriate allocation, our future costs are uncertain.

On October 11, 2017, the EPA issued its Record of Decision (“ROD”) with respect to the previously proposed remediation plan for the San Jacinto waste pits in Harris County, Texas. McGinnes Industrial Maintenance Corporation (“MIMC”), an indirect wholly-owned subsidiary of WM, has been named as a PRP. MIMC operated the waste pits from 1965 to 1966. In 1998, WM acquired the stock of the parent entity of MIMC. MIMC has been working with the EPA and other named PRPs as the process of addressing the site proceeds. During 2016, MIMC’s environmental remediation liability reserves were increased by $44 million to record its estimated potential share of the EPA’s proposed remedy and related costs and MIMC filed comments, detailing its disagreement with the proposed remedy. MIMC remains in disagreement with the remedy set forth in the ROD, and continues to recommend a solution that better protects the environment and public health. Due to the increased estimated cost of the remedy set forth in the ROD, MIMC’s environmental remediation liability reserves have been further increased by $9 million during the current quarter to record its estimated potential share and related costs. MIMC’s ultimate liability could be materially different from current estimates. Allocation of responsibility among the PRPs for the proposed remedy has not been established, and MIMC will continue to engage the EPA regarding the remediation plan selected in the ROD. As of September 30, 2017 and December 31, 2016, our recorded liability for MIMC’s estimated potential share of the EPA’s proposed remedy and related costs was $54 million and $46 million, respectively.

Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings, or such proceedings are known to be contemplated, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $100,000. The following matters are disclosed in accordance with that requirement. We do not currently believe that the eventual outcome of any such matters, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

On January 10, 2017, the Pennsylvania Department of Environmental Protection (“DEP”) solid waste program advised us that it intends to seek civil penalties against the Grows North and Tullytown Landfills (“Grows/Tullytown”), located in southeast Pennsylvania and owned by indirect wholly-owned subsidiaries of WM, related to operational issues, including litter and leachate discharges. Additionally, we received notice on March 15, 2017 that the DEP clean water program also intends to seek civil penalties related to similar underlying events and operational issues at Grows/Tullytown. On September 19, 2017, we received an updated assessment proposal from the DEP for these matters. Our internal review of these matters is in process.

On July 10, 2013, the EPA issued a Notice of Violation ("NOV") to Waste Management of Wisconsin, Inc., an indirect wholly-owned subsidiary of WM, alleging violations of the Resource Conservation Recovery Act concerning acceptance of certain waste that was not permitted to be disposed of at the Metro Recycling & Disposal Facility in Franklin, Wisconsin. The parties are exchanging information and working to resolve the NOV.

Waste Management of Hawaii, Inc. (“WMHI”), an indirect wholly-owned subsidiary of WM, may face civil claims from the Hawaii Department of Health and/or the EPA based on stormwater discharges at the Waimanalo Gulch Sanitary Landfill, which WMHI operates for the city and county of Honolulu, following two major rainstorms in December 2010 and January 2011 and alleged violations of stormwater permit requirements prior to and after the storms.

From time to time, we are also named as defendants in personal injury and property damage lawsuits, including purported class actions, on the basis of having owned, operated or transported waste to a disposal facility that is alleged to have contaminated the environment or, in certain cases, on the basis of having conducted environmental remediation activities at sites. Some of the lawsuits may seek to have us pay the costs of monitoring of allegedly affected sites and health care examinations of allegedly affected persons for a substantial period of time even where no actual damage is proven. While we believe we have meritorious defenses to these lawsuits, the ultimate resolution is often substantially uncertain due to the difficulty of determining the cause, extent and impact of alleged contamination (which may have occurred over a long period of time), the potential for successive groups of complainants to emerge, the diversity of the individual plaintiffs’ circumstances, and the potential contribution or indemnification obligations of co-defendants or other third parties, among other factors. Additionally, we often enter into agreements with landowners imposing obligations on us to meet certain regulatory or contractual conditions upon site closure or upon termination of the agreements. Compliance with these agreements inherently involves subjective determinations and may result in disputes, including litigation.

Litigation — As a large company with operations across the United States and Canada, we are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of our business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions that have been filed against us, and that may be filed against us in the future, include personal injury, property damage, commercial, customer, and employment-related claims, including purported state and national class action lawsuits related to: alleged environmental contamination, including releases of hazardous material and odors; sales and marketing practices, customer service agreements and prices and fees; and federal and state wage and hour and other laws. The plaintiffs in some actions seek unspecified damages or injunctive relief, or both. These actions are in various procedural stages, and some are covered, in part, by insurance. We currently do not believe that the eventual outcome of any such actions will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

WM’s charter and bylaws provide that WM shall indemnify against all liabilities and expenses, and upon request shall advance expenses to any person, who is subject to a pending or threatened proceeding because such person is or was a director or officer of the Company. Such indemnification is required to the maximum extent permitted under Delaware law. Accordingly, the director or officer must execute an undertaking to reimburse the Company for any fees advanced if it is later determined that the director or officer was not permitted to have such fees advanced under Delaware law. Additionally, the Company has direct contractual obligations to provide indemnification to each of the members of WM’s Board of Directors and each of WM’s executive officers. The Company may incur substantial expenses in connection with the fulfillment of its advancement of costs and indemnification obligations in connection with actions or proceedings that may be brought against its former or current officers, directors and employees.

Multiemployer Defined Benefit Pension Plans — About 20% of our workforce is covered by collective bargaining agreements with various local unions across the United States and Canada. As a result of some of these agreements, certain of our subsidiaries are participating employers in a number of trustee-managed multiemployer defined benefit pension plans (“Multiemployer Pension Plans”) for the covered employees. In connection with our ongoing renegotiation of various collective bargaining agreements, we may discuss and negotiate for the complete or partial withdrawal from one or more of these Multiemployer Pension Plans. A complete or partial withdrawal from a Multiemployer Pension Plan may also occur if employees covered by a collective bargaining agreement vote to decertify a union from continuing to represent them. Any other circumstance resulting in a decline in Company contributions to a Multiemployer Pension Plan through a reduction in the labor force, whether through attrition over time or through a business event (such as the discontinuation or nonrenewal of a customer contract, the decertification of a union, or relocation, reduction or discontinuance of certain operations) may also trigger a complete or partial withdrawal from one or more of these pension plans.

During the third quarter of 2017, we recognized an $11 million charge in operating expenses for the withdrawal from an underfunded Multiemployer Pension Plan. We do not believe that any future liability relating to our past or current participation in, or withdrawals from, the Multiemployer Pension Plans to which we contribute will have a material adverse effect on our business, financial condition or liquidity. However, liabilities for future withdrawals could have a material adverse effect on our results of operations or cash flows for a particular reporting period, depending on the number of employees withdrawn and the financial condition of the Multiemployer Pension Plan(s) at the time of such withdrawal(s).

Tax Matters — We participate in the IRS’s Compliance Assurance Process, which means we work with the IRS throughout the year towards resolving any material issues prior to the filing of our annual tax return. Any unresolved issues as of the tax return filing date are subject to routine examination procedures. We are currently in the examination phase of IRS audits for the 2014 through 2017 tax years and expect these audits to be completed within the next 27 months. We are also currently undergoing audits by various state and local jurisdictions for tax years that date back to 2009, with the exception of affirmative claims in a limited number of jurisdictions that date back to 2000. We maintain a liability for uncertain tax positions, the balance of which management believes is adequate. Results of audit assessments by taxing authorities are not currently expected to have a material adverse effect on our financial condition, results of operations or cash flows.

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Segment and Related Information

9 Months Ended

Sep. 30, 2017

Segment and Related Information

Segment and Related Information

7.    Segment and Related Information

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. The 17 Areas constitute our operating segments and none of the Areas individually meet the quantitative criteria to be a separate reportable segment. We have evaluated the aggregation criteria and concluded that, based on the similarities between our Areas, including the fact that our Solid Waste business is homogenous across geographies with the same services offered across the Areas, aggregation of our Areas is appropriate for purposes of presenting our reportable segments. Accordingly, we have aggregated our 17 Areas into three tiers that we believe have similar economic characteristics and future prospects based in large part on a review of the Areas’ income from operations margins. The economic variations experienced by our Areas are attributable to a variety of factors, including regulatory environment of the Area; economic environment of the Area, including level of commercial and industrial activity; population density; service offering mix and disposal logistics, with no one factor being singularly determinative of an Area’s current or future economic performance.

Tier 1 is comprised of our operations across the Southern United States, with the exception of Southern California and the Florida peninsula, and also includes the New England states, the tri-state area of Michigan, Indiana and Ohio, and Western Canada. Tier 2 includes Southern California, Eastern Canada, Wisconsin, Minnesota and a portion of the lower Mid-Atlantic region of the United States. Tier 3 encompasses all the remaining operations including the Pacific Northwest and Northern California, the majority of the Mid-Atlantic region of the United States, the Florida peninsula, Illinois and Missouri.

The operating segments not evaluated and overseen through the 17 Areas are presented herein as “Other” as these operating segments do not meet the criteria to be aggregated with other operating segments and do not meet the quantitative criteria to be separately reported.

Summarized financial information concerning our reportable segments is shown in the following table (in millions):

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Three Months Ended September 30:
2017
Solid Waste:
Tier 1	$	1,432	$	(258)	$	1,174	$	398
Tier 2		924		(171)		753		180
Tier 3		1,447		(256)		1,191		275
Solid Waste		3,803		(685)		3,118		853
Other		662		(64)		598		(16)
		4,465		(749)		3,716		837
Corporate and Other		—		—		—		(136)
Total	$	4,465	$	(749)	$	3,716	$	701
2016
Solid Waste:
Tier 1	$	1,364	$	(238)	$	1,126	$	369
Tier 2		885		(162)		723		121
Tier 3		1,382		(241)		1,141		238
Solid Waste		3,631		(641)		2,990		728
Other		608		(50)		558		(30)
		4,239		(691)		3,548		698
Corporate and Other		—		—		—		(138)
Total	$	4,239	$	(691)	$	3,548	$	560

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Nine Months Ended September 30:
2017
Solid Waste:
Tier 1	$	4,189	$	(754)	$	3,435	$	1,159
Tier 2		2,682		(493)		2,189		527
Tier 3		4,200		(745)		3,455		750
Solid Waste		11,071		(1,992)		9,079		2,436
Other		1,922		(168)		1,754		(66)
		12,993		(2,160)		10,833		2,370
Corporate and Other		—		—		—		(438)
Total	$	12,993	$	(2,160)	$	10,833	$	1,932
2016
Solid Waste:
Tier 1	$	3,921	$	(679)	$	3,242	$	1,065
Tier 2		2,522		(462)		2,060		423
Tier 3		3,989		(686)		3,303		681
Solid Waste		10,432		(1,827)		8,605		2,169
Other		1,680		(136)		1,544		(86)
		12,112		(1,963)		10,149		2,083
Corporate and Other		—		—		—		(404)
Total	$	12,112	$	(1,963)	$	10,149	$	1,679

Fluctuations in our operating results may be caused by many factors, including period-to-period changes in the relative contribution of revenue by each line of business, changes in commodity prices and general economic conditions. In addition, our revenues and income from operations typically reflect seasonal patterns. Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.

Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes resulting from climate change can significantly affect the operating results of the Areas affected. On the other hand, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern United States, can increase our revenues in the Areas affected. While weather conditions and other event driven special projects can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.

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Acquisitions

9 Months Ended

Sep. 30, 2017

Acquisitions

Acquisitions

8.    Acquisitions

Southern Waste Systems/Sun Recycling (“SWS”) — On January 8, 2016, Waste Management Inc. of Florida, an indirect wholly-owned subsidiary of WM, acquired certain operations and business assets of SWS in Southern Florida for total consideration of $525 million. The acquired business assets include residential, commercial and industrial solid waste collection, processing/recycling and transfer operations, equipment, vehicles, real estate and customer agreements.

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Asset Impairments and Unusual Items

9 Months Ended

Sep. 30, 2017

Asset Impairments and Unusual Items

Asset Impairments and Unusual Items

9.    Asset Impairments and Unusual Items

Expense from divestitures, asset impairments and unusual items, net

During the nine months ended September 30, 2016, we recognized net charges of $107 million, primarily related to (i) a $43 million charge to impair a landfill in Western Pennsylvania due to a loss of expected volumes; (ii) a $42 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6; (iii) a  $10 million goodwill impairment charge related to our LampTracker® reporting unit and (iv) an $8 million loss on the sale of a majority-owned organics company.

During the third quarter of 2017, we recognized an additional $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas, as discussed in Note 6.

Equity in net losses of unconsolidated entities

During the nine months ended September 30, 2017, we recognized $28 million of impairment charges to write down equity method investments in waste diversion technology companies to their estimated fair values.

Other, net

During the second quarter of 2016, we recognized $41 million of impairment charges to write down minority-owned investments in waste diversion technology companies to their estimated fair values.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2017

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

10.  Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, which is included as a component of Waste Management, Inc. stockholders’ equity, are as follows (in millions, with amounts in parentheses representing decreases to accumulated other comprehensive income):

					Foreign		Post-
			Available-		Currency		Retirement
	Derivative		for-Sale		Translation		Benefit
	Instruments		Securities		Adjustments		Obligations		Total
Balance, December 31, 2016	$	(40)	$	13	$	(47)	$	(6)	$	(80)
Other comprehensive income before reclassifications, net of tax expense of $0,  $2,  $0 and $0, respectively		—		2		86		—		88
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $3,  $0,  $0 and $0, respectively		6		—		—		—		6
Net current period other comprehensive income		6		2		86		—		94
Balance, September 30, 2017	$	(34)	$	15	$	39	$	(6)	$	14

There have been no derivatives outstanding subsequent to March 31, 2016. For the three months ended March 31, 2016, other comprehensive loss before reclassifications associated with the effective portion of derivatives designated as cash flow hedges for foreign currency derivatives was $7 million, net of tax benefit of $4 million.

The significant amounts reclassified out of each component of accumulated other comprehensive income (loss) associated with our previously terminated cash flow hedges are as follows (in millions, with amounts in parentheses representing debits to the statement of operations classification):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Statement of
	2017		2016		2017		2016		Operations Classification
Forward-starting interest rate swaps	$	(2)	$	(2)	$	(8)	$	(8)	Interest expense, net
Treasury rate locks		(1)		(1)		(1)		(1)	Interest expense, net
Foreign currency derivatives		—		—		—		(20)	Other, net
		(3)		(3)		(9)		(29)	Total before tax
		1		1		3		11	Tax benefit
Total reclassifications for the period	$	(2)	$	(2)	$	(6)	$	(18)	Net of tax

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Common Stock Repurchase Program

9 Months Ended

Sep. 30, 2017

Common Stock Repurchase Program

Common Stock Repurchase Program

11.  Common Stock Repurchase Program

The Company repurchases shares of its common stock as part of capital allocation programs authorized by our Board of Directors.

In November 2016, we entered into an accelerated share repurchase (“ASR”) agreement to repurchase $225 million of our common stock. At the beginning of the repurchase period, we delivered $225 million in cash and received 2.8 million shares based on a stock price of $63.41. The ASR agreement completed in February 2017, at which time we received 0.4 million additional shares based on a final weighted average price per share during the repurchase period of $69.43.

In June 2017, we entered into an ASR agreement to repurchase $250 million of our common stock. At the beginning of the repurchase period, we delivered $250 million in cash and received 2.7 million shares based on a stock price of $73.46. The ASR agreement completed in August 2017, at which time we received 0.7 million additional shares based on a final weighted average price per share during the repurchase period of $74.31.

In August 2017, we entered into an ASR agreement to repurchase $500 million of our common stock. At the beginning of the repurchase period, we delivered $500 million in cash and received 5.3 million shares based on a stock price of $75.25. The final number of shares to be repurchased and the final average price per share under the ASR agreement will depend on the volume-weighted average price of our stock, less a discount, during the term of the agreement. Purchases under the ASR agreement are expected to be completed in December 2017.

Following the execution of the August 2017 ASR agreement, the Company has no remaining authorization outstanding from our Board of Directors to execute share repurchases.

We account for ASR agreements as two separate transactions: (i) as shares of reacquired common stock for the shares delivered to us upon effectiveness of the ASR agreement and (ii) as a forward contract indexed to our own common stock for the undelivered shares. The initial delivery of shares is included in treasury stock at cost and results in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share. The forward contracts indexed to our own common stock meet the criteria for equity classification, and these amounts are initially recorded in additional paid-in capital and reclassified to treasury stock upon completion of the ASR agreement.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Measurements

Fair Value Measurements

12.  Fair Value Measurements

Assets and Liabilities Accounted for at Fair Value

Our assets and liabilities that are measured at fair value on a recurring basis include the following (in millions):

			Fair Value Measurements as of
			September 30, 2017 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	16	$	16	$	—	$	—
Available-for-sale securities		54		—		54		—
Fixed-income securities		46		—		46		—
Redeemable preferred stock		55		—		—		55
Total assets	$	171	$	16	$	100	$	55

			Fair Value Measurements as of
			December 31, 2016 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	35	$	35	$	—	$	—
Available-for-sale securities		46		—		46		—
Fixed-income securities		39		—		39		—
Redeemable preferred stock		54		—		—		54
Total assets	$	174	$	35	$	85	$	54

(a) When available, Level 3 investments have been measured based on third-party investors’ recent or pending transactions in these securities, which are considered the best evidence of fair value. When this evidence is not available, we use other valuation techniques as appropriate and available. These valuation methodologies may include transactions in similar instruments, discounted cash flow analysis, third-party appraisals or industry multiples and public comparables. There has not been any significant change in the fair value of the redeemable preferred stock since our assessment as of December 31, 2016.

Fair Value of Debt

As of September 30, 2017 and December 31, 2016, the carrying value of our debt was $9.3 billion. The estimated fair value of our debt was approximately $9.9 billion and $9.7 billion as of September 30, 2017 and December 31, 2016, respectively. The fair value of our fixed-rate debt is estimated by using a discounted cash flow approach and current market rates for similar types of instruments. The carrying value of our variable-rate debt approximates fair value due to the short-term nature of the interest rates. The increase in fair value of our debt when comparing September 30, 2017 to December 31, 2016 is primarily related to decreases in current market rates for similar types of instruments.

Although we have determined the estimated fair value amounts using available market information and commonly accepted valuation methodologies, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates are not necessarily indicative of the amounts that we, or holders of the instruments, could realize in a current market exchange. The use of different assumptions or estimation methodologies could have a material effect on the estimated fair values. The fair value estimates are based on Level 2 inputs of the fair value hierarchy available as of September 30, 2017 and December 31, 2016. These amounts have not been revalued since those dates, and current estimates of fair value could differ significantly from the amounts presented.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2017

Variable Interest Entities

Variable Interest Entities

13.  Variable Interest Entities

Following is a description of our financial interests in unconsolidated and consolidated variable interest entities that we consider significant:

Low-Income Housing Properties and Refined Coal Facility Investments

We have investments in entities established to manage low-income housing properties and a refined coal facility. We support the operations of these entities in exchange for a pro-rata share of the tax credits they generate. We do not consolidate these entities as we have determined we are not the primary beneficiary of these entities as we do not have the power to individually direct the activities of these entities. Accordingly, we account for these investments under the equity method of accounting. Our aggregate investment balance in these two entities was $65 million and $84 million, as of September 30, 2017 and December 31, 2016, respectively. The debt balance related to our investment in low-income housing properties was $40 million and $57 million as of September 30, 2017 and December 31, 2016, respectively. Additional information related to these investments is discussed in Note 4.

Trust Funds for Final Capping, Closure, Post-Closure or Environmental Remediation Obligations

We have significant financial interests in trust funds that were created to settle certain of our final capping, closure, post-closure or environmental remediation obligations. These trust funds are established such that we are either the sole beneficiary of these restricted balances or we share benefit with the host community in which we operate. We have determined that these trust funds are variable interest entities; however, we are not the primary beneficiary of certain of these entities, as described further below. As the party with primary responsibility to fund the related final capping, closure, post-closure or environmental remediation activities for these trust funds, we are exposed to risk of loss if there are declines in the fair value of the assets of the trust. We currently expect the trust funds to continue to meet the statutory requirements for which they were established.

Unconsolidated Variable Interest Entities — Trust funds that are established for both the benefit of the Company and the host community in which we operate are not consolidated because we are not the primary beneficiary of these entities as we either do not have the (i) power to direct the significant activities of the trusts or (ii) power over the trusts’ significant activities is shared. Our interests in these trusts are accounted for as investments in unconsolidated entities and receivables. These amounts are recorded in other receivables, investments in unconsolidated entities and long-term other assets in our Condensed Consolidated Balance Sheets, as appropriate. We also reflect our share of the unrealized gains and losses on available-for-sale securities held by these trusts as a component of our accumulated other comprehensive income (loss). Our investments and receivables related to these trusts had an aggregate carrying value of $99 million and $93 million as of September 30, 2017 and December 31, 2016, respectively.

Consolidated Variable Interest Entities — Trust funds for which we are the sole beneficiary are consolidated because we are the primary beneficiary. We account for these trust funds as long-term other assets in our Condensed Consolidated Balance Sheets. Unrealized gains and losses on available-for-sale securities held by these trusts are recorded as a component of our accumulated other comprehensive income (loss). These trusts had a fair value of $101 million and $95 million as of September 30, 2017 and December 31, 2016, respectively.

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Condensed Consolidating Financial Statements

9 Months Ended

Sep. 30, 2017

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

14.  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, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	35	$	—	$	35
Other current assets		3		5		2,257		—		2,265
		3		5		2,292		—		2,300
Property and equipment, net		—		—		11,136		—		11,136
Investments in affiliates		21,105		21,607		—		(42,712)		—
Advances to affiliates		—		—		14,171		(14,171)		—
Other assets		12		31		7,470		—		7,513
Total assets	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	736	$	—	$	114	$	—	$	850
Accounts payable and other current liabilities		61		4		2,344		—		2,409
		797		4		2,458		—		3,259
Long-term debt, less current portion		5,911		304		2,280		—		8,495
Due to affiliates		14,425		231		5,299		(19,955)		—
Other liabilities		8		—		3,887		—		3,895
Total liabilities		21,141		539		13,924		(19,955)		15,649
Equity:
Stockholders’ equity		5,278		21,104		21,608		(42,712)		5,278
Advances to affiliates		(5,299)		—		(485)		5,784		—
Noncontrolling interests		—		—		22		—		22
		(21)		21,104		21,145		(36,928)		5,300
Total liabilities and equity	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2016

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	32	$	—	$	32
Other current assets		5		5		2,334		—		2,344
		5		5		2,366		—		2,376
Property and equipment, net		—		—		10,950		—		10,950
Investments in affiliates		19,924		20,331		—		(40,255)		—
Advances to affiliates		—		—		13,000		(13,000)		—
Other assets		14		30		7,489		—		7,533
Total assets	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	269	$	—	$	148	$	—	$	417
Accounts payable and other current liabilities		81		9		2,287		—		2,377
		350		9		2,435		—		2,794
Long-term debt, less current portion		6,229		304		2,360		—		8,893
Due to affiliates		13,350		128		5,299		(18,777)		—
Other liabilities		16		—		3,836		—		3,852
Total liabilities		19,945		441		13,930		(18,777)		15,539
Equity:
Stockholders’ equity		5,297		19,925		20,330		(40,255)		5,297
Advances to affiliates		(5,299)		—		(478)		5,777		—
Noncontrolling interests		—		—		23		—		23
		(2)		19,925		19,875		(34,478)		5,320
Total liabilities and equity	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,716	$	—	$	3,716
Costs and expenses		—		—		3,015		—		3,015
Income from operations		—		—		701		—		701
Other income (expense):
Interest expense, net		(75)		(5)		(10)		—		(90)
Equity in earnings of subsidiaries, net of tax		432		435		—		(867)		—
Other, net		—		—		(8)		—		(8)
		357		430		(18)		(867)		(98)
Income before income taxes		357		430		683		(867)		603
Income tax expense (benefit)		(29)		(2)		246		—		215
Consolidated net income		386		432		437		(867)		388
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	386	$	432	$	435	$	(867)	$	386

Three Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,548	$	—	$	3,548
Costs and expenses		—		—		2,988		—		2,988
Income from operations		—		—		560		—		560
Other income (expense):
Interest expense, net		(77)		(5)		(12)		—		(94)
Equity in earnings of subsidiaries, net of tax		349		352		—		(701)		—
Other, net		—		—		(9)		—		(9)
		272		347		(21)		(701)		(103)
Income before income taxes		272		347		539		(701)		457
Income tax expense (benefit)		(30)		(2)		185		—		153
Consolidated net income		302		349		354		(701)		304
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	302	$	349	$	352	$	(701)	$	302

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued)

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,833	$	—	$	10,833
Costs and expenses		—		—		8,901		—		8,901
Income from operations		—		—		1,932		—		1,932
Other income (expense):
Interest expense, net		(223)		(15)		(34)		—		(272)
Equity in earnings of subsidiaries, net of tax		1,181		1,190		—		(2,371)		—
Other, net		—		—		(53)		—		(53)
		958		1,175		(87)		(2,371)		(325)
Income before income taxes		958		1,175		1,845		(2,371)		1,607
Income tax expense (benefit)		(88)		(6)		655		—		561
Consolidated net income		1,046		1,181		1,190		(2,371)		1,046
Less: Net income (loss) attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	1,046	$	1,181	$	1,190	$	(2,371)	$	1,046

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,149	$	—	$	10,149
Costs and expenses		—		—		8,470		—		8,470
Income from operations		—		—		1,679		—		1,679
Other income (expense):
Interest expense, net		(227)		(15)		(40)		—		(282)
Equity in earnings of subsidiaries, net of tax		986		995		—		(1,981)		—
Other, net		(1)		—		(84)		—		(85)
		758		980		(124)		(1,981)		(367)
Income before income taxes		758		980		1,555		(1,981)		1,312
Income tax expense (benefit)		(89)		(6)		561		—		466
Consolidated net income		847		986		994		(1,981)		846
Less: Net income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	847	$	986	$	995	$	(1,981)	$	847

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended September 30:
2017
Comprehensive income	$	388	$	432	$	482	$	(867)	$	435
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	388	$	432	$	480	$	(867)	$	433
2016
Comprehensive income	$	303	$	349	$	339	$	(701)	$	290
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	303	$	349	$	337	$	(701)	$	288

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Nine Months Ended September 30:
2017
Comprehensive income	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
2016
Comprehensive income	$	852	$	986	$	1,053	$	(1,981)	$	910
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management Inc.	$	852	$	986	$	1,054	$	(1,981)	$	911

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,390	$	—	$	2,390
Investing activities		—		—		(984)		—		(984)
Financing activities		—		—		(1,404)		—		(1,404)
Effect of exchange rate changes on cash and cash equivalents		—		—		1		—		1
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		3		—		3
Cash and cash equivalents at beginning of period		—		—		32		—		32
Cash and cash equivalents at end of period	$	—	$	—	$	35	$	—	$	35

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,252	$	—	$	2,252
Investing activities		—		—		(1,550)		—		(1,550)
Financing activities		—		—		(711)		—		(711)
Effect of exchange rate changes on cash and cash equivalents		—		—		—		—		—
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		(9)		—		(9)
Cash and cash equivalents at beginning of period		—		—		39		—		39
Cash and cash equivalents at end of period	$	—	$	—	$	30	$	—	$	30

(a) Cash receipts and payments of WM and WM Holdings are transacted by Non-Guarantor Subsidiaries.

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New Accounting Standards Pending Adoption

9 Months Ended

Sep. 30, 2017

Accounting Changes and Error Corrections [Abstract]

New Accounting Standards Pending Adoption

15.  New Accounting Standards Pending Adoption

Income Taxes — In October 2016, the FASB issued ASU 2016‑16 associated with the timing of recognition of income taxes for intra-entity transfers of assets other than inventory. The amended guidance requires the recognition of income taxes when the transfer of the asset occurs, which replaces current GAAP that defers the recognition of income taxes until the transferred asset is sold to a third party or otherwise recovered through use. The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Statement of Cash Flows — In August 2016, the FASB issued ASU 2016‑15 associated with the classification of certain cash receipts and cash payments in the statement of cash flows. In November 2016, the FASB issued ASU 2016‑18 associated with the presentation of restricted cash and cash equivalents in the statement of cash flows. The objective of both amendments was to reduce existing diversity in practice. The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Financial Instrument Credit Losses — In June 2016, the FASB issued ASU 2016‑13 associated with the measurement of credit losses on financial instruments. The amended guidance replaces the current incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. The amended guidance is effective for the Company on January 1, 2020, with early adoption permitted beginning January 1, 2019. We are assessing the provisions of this amended guidance and evaluating the impact on our consolidated financial statements.

Leases — In February 2016, the FASB issued ASU 2016‑02 associated with lease accounting. The amended guidance requires the recognition of lease assets and lease liabilities on the balance sheet for those leases with terms in excess of 12 months and currently classified as operating leases. The disclosure of key information about leasing arrangements will also be required. The amended guidance is effective for the Company on January 1, 2019. We are assessing the provisions of this amended guidance and we have (i) formed an implementation work team; (ii) performed training for the various organizations that will be most affected by the new standard and (iii) acquired a software solution to manage and account for leases under the new standard. We are still evaluating the impact of this amended guidance on our consolidated financial statements.

Financial Instruments — In January 2016, the FASB issued ASU 2016‑01 associated with the recognition and measurement of financial assets and liabilities. The amended guidance will require certain equity investments that are not consolidated to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). The amended guidance is effective for the Company on January 1, 2018. We are assessing the provisions of this amended guidance; however, we currently do not expect that the adoption of this amended guidance will have a material impact on our consolidated financial statements.

Revenue Recognition — In May 2014, the FASB issued ASU 2014‑09 associated with revenue recognition. The amended guidance requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the amendments will require enhanced qualitative and quantitative disclosures regarding customer contracts. The amended guidance associated with revenue recognition is effective for the Company on January 1, 2018. The amended guidance may be applied retrospectively for all periods presented (“full retrospective method”) or retrospectively with the cumulative effect of initially applying the amended guidance recognized at the date of initial adoption (“modified retrospective method”). The Company is currently planning to adopt the amended guidance using the modified retrospective method as of January 1, 2018.

To assess the impact of the standard, we utilized internal resources to lead the implementation effort and supplemented them with external resources. Our internal resources read the amended guidance, attended trainings and consulted with other accounting professionals to assist with interpretation of the amended guidance. Surveys were sent to and returned by all operating segments to assess the potential impact of the amended guidance and to tailor specific procedures to evaluate the potential impact. Based on the results of these surveys, we judgmentally selected a sample of contracts based on size and specifically identified contract traits that could be accounted for differently under the amended guidance. We also selected a representative sample of contracts to corroborate the survey results.

Based on our work to date, we believe we have identified all material contract types and costs that may be impacted by this amended guidance. We currently do not expect the amended guidance to have a material impact on operating revenues. However, upon adoption of the amended guidance, we anticipate recognizing an asset from the capitalization of certain sales incentives as contract acquisitions costs. Under the amended guidance, certain sales incentives will be capitalized and amortized to selling, general and administrative expense over the expected life of the customer relationship. Additionally, under the amended guidance we anticipate recognizing certain consideration payable to our customers as a reduction in operating revenues, which under current guidance is recorded as operating expenses.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Basis of Presentation

Basis of Presentation

The financial statements presented in this report represent the consolidation of Waste Management, Inc., a Delaware corporation; its wholly-owned and majority-owned subsidiaries; and certain variable interest entities for which Waste Management, Inc. or its subsidiaries are the primary beneficiaries as described in Note 13. Waste Management, Inc. is a holding company and all operations are conducted by its subsidiaries. When the terms “the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste Management, Inc., its consolidated subsidiaries and consolidated variable interest entities. When we use the term “WM,” we are referring only to Waste Management, Inc., the parent holding company.

We are North America’s leading provider of comprehensive waste management environmental services. We partner with our residential, commercial, industrial and municipal customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. Our “Solid Waste” business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provides collection, transfer, disposal, and recycling and resource recovery services. Through our subsidiaries, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the United States.

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas. We also provide additional services that are not managed through our Solid Waste business, which are presented in this report as “Other.” Additional information related to our segments is included in Note 7.

The Condensed Consolidated Financial Statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 are unaudited. In the opinion of management, these financial statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The financial statements presented herein should be read in conjunction with the financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2016.

In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with precision from available data or simply cannot be calculated. In some cases, these estimates are difficult to determine, and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that present the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, long-lived asset impairments and reserves associated with our insured and self-insured claims. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Adoption of New Accounting Standards

Adoption of New Accounting Standards

Equity-Based Compensation — In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑09 associated with equity-based compensation as part of its simplification initiative to reduce the cost and complexity of compliance with U.S. Generally Accepted Accounting Principles (“GAAP”), while maintaining or improving the usefulness of the information provided. This amended guidance was effective for the Company on January 1, 2017 and required the following changes to the presentation of our financial statements:

· Excess tax benefits or deficiencies for share-based payments are now recorded as a discrete item in the period shares vest or stock options are exercised as an adjustment to income tax expense or benefit rather than additional paid-in capital. This change was applied prospectively as of January 1, 2017. The Company did not have any excess tax benefits that were not previously recognized as of January 1, 2017. See Note 4 for discussion of the current year impact;

· As of January 1, 2017, the calculation of diluted weighted average shares outstanding was changed prospectively to no longer include excess tax benefits as assumed proceeds. This change did not have a material impact on our current year diluted earnings per share;

· Cash flows related to excess tax benefits or deficiencies are included in net cash provided by operating activities rather than as a financing activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $27 million for the nine months ended September 30, 2016;

· Cash paid to taxing authorities when withholding shares from an employee’s vesting or exercise of equity-based compensation awards for tax-withholding purposes is now considered a repurchase of the Company’s equity instruments and is classified as net cash used in financing activities rather than as an operating activity. The Company adopted this change retrospectively, which resulted in an increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities of $18 million for the nine months ended September 30, 2016; and

· The Company has elected to continue to estimate forfeitures rather than account for forfeitures as they occur.

Goodwill Impairment Testing — In January 2017, the FASB issued ASU 2017‑04 which simplifies the goodwill impairment test by eliminating Step 2 of the quantitative assessment and should reduce the cost and complexity of evaluating goodwill for impairment. Under the amended guidance, when a quantitative assessment is required, an entity will perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be measured as the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of recorded goodwill. This amended guidance, effective for the Company on January 1, 2020, permits early adoption. The Company’s early adoption on January 1, 2017 did not have an impact on our consolidated financial statements.

Reclassifications

Reclassifications

When necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

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Landfill and Environmental Remediation Liabilities (Tables)

9 Months Ended

Sep. 30, 2017

Landfill and Environmental Remediation Liabilities

Liabilities for Landfill and Environmental Remediation Costs

Liabilities for landfill and environmental remediation costs are presented in the table below (in millions):

	September 30, 2017						December 31, 2016
			Environmental						Environmental
	Landfill		Remediation		Total		Landfill		Remediation		Total
Current (in accrued liabilities)	$	140	$	23	$	163	$	119	$	28	$	147
Long-term		1,500		227		1,727		1,457		218		1,675
	$	1,640	$	250	$	1,890	$	1,576	$	246	$	1,822

Changes to Landfill and Environmental Remediation Liabilities

The changes to landfill and environmental remediation liabilities for the nine months ended September 30, 2017 are reflected in the table below (in millions):

			Environmental
	Landfill		Remediation
December 31, 2016	$	1,576	$	246
Obligations incurred and capitalized		51		—
Obligations settled		(74)		(14)
Interest accretion		68		2
Revisions in estimates and interest rate assumptions (a)		14		16
Acquisitions, divestitures and other adjustments		5		—
September 30, 2017	$	1,640	$	250

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Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt

Components of Debt

The following table summarizes the major components of debt as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of September 30, 2017:

	September 30,		December 31,
	2017		2016
$2.25 billion revolving credit facility, maturing July 2020 (weighted average interest rate of 1.9% as of December 31, 2016)	$	—	$	426
Commercial paper program (weighted average interest rate of 1.4% as of September 30, 2017)		502		—
Other letter of credit facilities, maturing through December 2018		—		—
Canadian term loan and revolving credit facility, maturing March 2019 (weighted average effective interest rate of 2.5% as of September 30, 2017 and 2.1% as of December 31, 2016)		143		239
Senior notes maturing through 2045, interest rates ranging from 2.4% to 7.75% (weighted average interest rate of 4.6% as of September 30, 2017 and December 31, 2016)		6,033		6,033
Tax-exempt bonds, maturing through 2045, fixed and variable interest rates ranging from 1.0% to 5.7% (weighted average interest rate of 1.9% as of September 30, 2017 and 1.8% as of December 31, 2016)		2,339		2,304
Capital leases and other, maturing through 2055, interest rates up to 12%		328		308
		9,345		9,310
Current portion of long-term debt		850		417
	$	8,495	$	8,893

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share

Common Share Data Used for Computing Basic and Diluted Earnings Per Share

Basic and diluted earnings per share were computed using the following common share data (shares in millions):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Number of common shares outstanding at end of period	434.2	442.0	434.2	442.0
Effect of using weighted average common shares outstanding	3.6	0.9	6.1	2.3
Weighted average basic common shares outstanding	437.8	442.9	440.3	444.3
Dilutive effect of equity-based compensation awards and other contingently issuable shares (a)	3.0	2.8	3.0	2.8
Weighted average diluted common shares outstanding	440.8	445.7	443.3	447.1
Potentially issuable shares	8.2	9.2	8.2	9.2
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding	1.9	0.5	2.3	0.5

As of January 1, 2017, we adopted ASU 2016‑09 prospectively and no longer include excess tax benefits as assumed proceeds. See Note 1 for further discussion

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Segment and Related Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment and Related Information

Reportable Segments

Summarized financial information concerning our reportable segments is shown in the following table (in millions):

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Three Months Ended September 30:
2017
Solid Waste:
Tier 1	$	1,432	$	(258)	$	1,174	$	398
Tier 2		924		(171)		753		180
Tier 3		1,447		(256)		1,191		275
Solid Waste		3,803		(685)		3,118		853
Other		662		(64)		598		(16)
		4,465		(749)		3,716		837
Corporate and Other		—		—		—		(136)
Total	$	4,465	$	(749)	$	3,716	$	701
2016
Solid Waste:
Tier 1	$	1,364	$	(238)	$	1,126	$	369
Tier 2		885		(162)		723		121
Tier 3		1,382		(241)		1,141		238
Solid Waste		3,631		(641)		2,990		728
Other		608		(50)		558		(30)
		4,239		(691)		3,548		698
Corporate and Other		—		—		—		(138)
Total	$	4,239	$	(691)	$	3,548	$	560

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues		Revenues		Operations
Nine Months Ended September 30:
2017
Solid Waste:
Tier 1	$	4,189	$	(754)	$	3,435	$	1,159
Tier 2		2,682		(493)		2,189		527
Tier 3		4,200		(745)		3,455		750
Solid Waste		11,071		(1,992)		9,079		2,436
Other		1,922		(168)		1,754		(66)
		12,993		(2,160)		10,833		2,370
Corporate and Other		—		—		—		(438)
Total	$	12,993	$	(2,160)	$	10,833	$	1,932
2016
Solid Waste:
Tier 1	$	3,921	$	(679)	$	3,242	$	1,065
Tier 2		2,522		(462)		2,060		423
Tier 3		3,989		(686)		3,303		681
Solid Waste		10,432		(1,827)		8,605		2,169
Other		1,680		(136)		1,544		(86)
		12,112		(1,963)		10,149		2,083
Corporate and Other		—		—		—		(404)
Total	$	12,112	$	(1,963)	$	10,149	$	1,679

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2017

Accumulated Other Comprehensive Income (Loss)

Components of Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, which is included as a component of Waste Management, Inc. stockholders’ equity, are as follows (in millions, with amounts in parentheses representing decreases to accumulated other comprehensive income):

					Foreign		Post-
			Available-		Currency		Retirement
	Derivative		for-Sale		Translation		Benefit
	Instruments		Securities		Adjustments		Obligations		Total
Balance, December 31, 2016	$	(40)	$	13	$	(47)	$	(6)	$	(80)
Other comprehensive income before reclassifications, net of tax expense of $0,  $2,  $0 and $0, respectively		—		2		86		—		88
Amounts reclassified from accumulated other comprehensive loss, net of tax benefit of $3,  $0,  $0 and $0, respectively		6		—		—		—		6
Net current period other comprehensive income		6		2		86		—		94
Balance, September 30, 2017	$	(34)	$	15	$	39	$	(6)	$	14

Reclassification of Component of Accumulated Other Comprehensive Income (Loss) Associated with Cash Flow Hedges

The significant amounts reclassified out of each component of accumulated other comprehensive income (loss) associated with our previously terminated cash flow hedges are as follows (in millions, with amounts in parentheses representing debits to the statement of operations classification):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Statement of
	2017		2016		2017		2016		Operations Classification
Forward-starting interest rate swaps	$	(2)	$	(2)	$	(8)	$	(8)	Interest expense, net
Treasury rate locks		(1)		(1)		(1)		(1)	Interest expense, net
Foreign currency derivatives		—		—		—		(20)	Other, net
		(3)		(3)		(9)		(29)	Total before tax
		1		1		3		11	Tax benefit
Total reclassifications for the period	$	(2)	$	(2)	$	(6)	$	(18)	Net of tax

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Measurements

Fair Value of Assets and Liabilities Measured on Recurring Basis

Our assets and liabilities that are measured at fair value on a recurring basis include the following (in millions):

			Fair Value Measurements as of
			September 30, 2017 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	16	$	16	$	—	$	—
Available-for-sale securities		54		—		54		—
Fixed-income securities		46		—		46		—
Redeemable preferred stock		55		—		—		55
Total assets	$	171	$	16	$	100	$	55

			Fair Value Measurements as of
			December 31, 2016 Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)(a)
Assets:
Money market funds	$	35	$	35	$	—	$	—
Available-for-sale securities		46		—		46		—
Fixed-income securities		39		—		39		—
Redeemable preferred stock		54		—		—		54
Total assets	$	174	$	35	$	85	$	54

When available, Level 3 investments have been measured based on third-party investors’ recent or pending transactions in these securities, which are considered the best evidence of fair value. When this evidence is not available, we use other valuation techniques as appropriate and available. These valuation methodologies may include transactions in similar instruments, discounted cash flow analysis, third-party appraisals or industry multiples and public comparables. There has not been any significant change in the fair value of the redeemable preferred stock since our assessment as of December 31, 2016.

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2017

Condensed Consolidating Financial Statements

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS

September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	35	$	—	$	35
Other current assets		3		5		2,257		—		2,265
		3		5		2,292		—		2,300
Property and equipment, net		—		—		11,136		—		11,136
Investments in affiliates		21,105		21,607		—		(42,712)		—
Advances to affiliates		—		—		14,171		(14,171)		—
Other assets		12		31		7,470		—		7,513
Total assets	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	736	$	—	$	114	$	—	$	850
Accounts payable and other current liabilities		61		4		2,344		—		2,409
		797		4		2,458		—		3,259
Long-term debt, less current portion		5,911		304		2,280		—		8,495
Due to affiliates		14,425		231		5,299		(19,955)		—
Other liabilities		8		—		3,887		—		3,895
Total liabilities		21,141		539		13,924		(19,955)		15,649
Equity:
Stockholders’ equity		5,278		21,104		21,608		(42,712)		5,278
Advances to affiliates		(5,299)		—		(485)		5,784		—
Noncontrolling interests		—		—		22		—		22
		(21)		21,104		21,145		(36,928)		5,300
Total liabilities and equity	$	21,120	$	21,643	$	35,069	$	(56,883)	$	20,949

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2016

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	32	$	—	$	32
Other current assets		5		5		2,334		—		2,344
		5		5		2,366		—		2,376
Property and equipment, net		—		—		10,950		—		10,950
Investments in affiliates		19,924		20,331		—		(40,255)		—
Advances to affiliates		—		—		13,000		(13,000)		—
Other assets		14		30		7,489		—		7,533
Total assets	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	269	$	—	$	148	$	—	$	417
Accounts payable and other current liabilities		81		9		2,287		—		2,377
		350		9		2,435		—		2,794
Long-term debt, less current portion		6,229		304		2,360		—		8,893
Due to affiliates		13,350		128		5,299		(18,777)		—
Other liabilities		16		—		3,836		—		3,852
Total liabilities		19,945		441		13,930		(18,777)		15,539
Equity:
Stockholders’ equity		5,297		19,925		20,330		(40,255)		5,297
Advances to affiliates		(5,299)		—		(478)		5,777		—
Noncontrolling interests		—		—		23		—		23
		(2)		19,925		19,875		(34,478)		5,320
Total liabilities and equity	$	19,943	$	20,366	$	33,805	$	(53,255)	$	20,859

Condensed Consolidating Statements of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,716	$	—	$	3,716
Costs and expenses		—		—		3,015		—		3,015
Income from operations		—		—		701		—		701
Other income (expense):
Interest expense, net		(75)		(5)		(10)		—		(90)
Equity in earnings of subsidiaries, net of tax		432		435		—		(867)		—
Other, net		—		—		(8)		—		(8)
		357		430		(18)		(867)		(98)
Income before income taxes		357		430		683		(867)		603
Income tax expense (benefit)		(29)		(2)		246		—		215
Consolidated net income		386		432		437		(867)		388
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	386	$	432	$	435	$	(867)	$	386

Three Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,548	$	—	$	3,548
Costs and expenses		—		—		2,988		—		2,988
Income from operations		—		—		560		—		560
Other income (expense):
Interest expense, net		(77)		(5)		(12)		—		(94)
Equity in earnings of subsidiaries, net of tax		349		352		—		(701)		—
Other, net		—		—		(9)		—		(9)
		272		347		(21)		(701)		(103)
Income before income taxes		272		347		539		(701)		457
Income tax expense (benefit)		(30)		(2)		185		—		153
Consolidated net income		302		349		354		(701)		304
Less: Net income (loss) attributable to noncontrolling interests		—		—		2		—		2
Net income attributable to Waste Management, Inc.	$	302	$	349	$	352	$	(701)	$	302

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued)

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,833	$	—	$	10,833
Costs and expenses		—		—		8,901		—		8,901
Income from operations		—		—		1,932		—		1,932
Other income (expense):
Interest expense, net		(223)		(15)		(34)		—		(272)
Equity in earnings of subsidiaries, net of tax		1,181		1,190		—		(2,371)		—
Other, net		—		—		(53)		—		(53)
		958		1,175		(87)		(2,371)		(325)
Income before income taxes		958		1,175		1,845		(2,371)		1,607
Income tax expense (benefit)		(88)		(6)		655		—		561
Consolidated net income		1,046		1,181		1,190		(2,371)		1,046
Less: Net income (loss) attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	1,046	$	1,181	$	1,190	$	(2,371)	$	1,046

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	10,149	$	—	$	10,149
Costs and expenses		—		—		8,470		—		8,470
Income from operations		—		—		1,679		—		1,679
Other income (expense):
Interest expense, net		(227)		(15)		(40)		—		(282)
Equity in earnings of subsidiaries, net of tax		986		995		—		(1,981)		—
Other, net		(1)		—		(84)		—		(85)
		758		980		(124)		(1,981)		(367)
Income before income taxes		758		980		1,555		(1,981)		1,312
Income tax expense (benefit)		(89)		(6)		561		—		466
Consolidated net income		847		986		994		(1,981)		846
Less: Net income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	847	$	986	$	995	$	(1,981)	$	847

Condensed Consolidating Statements of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended September 30:
2017
Comprehensive income	$	388	$	432	$	482	$	(867)	$	435
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	388	$	432	$	480	$	(867)	$	433
2016
Comprehensive income	$	303	$	349	$	339	$	(701)	$	290
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		2		—		2
Comprehensive income attributable to Waste Management, Inc.	$	303	$	349	$	337	$	(701)	$	288

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Nine Months Ended September 30:
2017
Comprehensive income	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	1,052	$	1,181	$	1,278	$	(2,371)	$	1,140
2016
Comprehensive income	$	852	$	986	$	1,053	$	(1,981)	$	910
Less: Comprehensive income (loss) attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management Inc.	$	852	$	986	$	1,054	$	(1,981)	$	911

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2017

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,390	$	—	$	2,390
Investing activities		—		—		(984)		—		(984)
Financing activities		—		—		(1,404)		—		(1,404)
Effect of exchange rate changes on cash and cash equivalents		—		—		1		—		1
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		3		—		3
Cash and cash equivalents at beginning of period		—		—		32		—		32
Cash and cash equivalents at end of period	$	—	$	—	$	35	$	—	$	35

Nine Months Ended September 30, 2016

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	2,252	$	—	$	2,252
Investing activities		—		—		(1,550)		—		(1,550)
Financing activities		—		—		(711)		—		(711)
Effect of exchange rate changes on cash and cash equivalents		—		—		—		—		—
Intercompany activity		—		—		—		—		—
Increase (decrease) in cash and cash equivalents		—		—		(9)		—		(9)
Cash and cash equivalents at beginning of period		—		—		39		—		39
Cash and cash equivalents at end of period	$	—	$	—	$	30	$	—	$	30

Cash receipts and payments of WM and WM Holdings are transacted by Non-Guarantor Subsidiaries.

XML

Basis of Presentation (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($) area	Sep. 30, 2016 USD ($)
Segment Reporting Information [Line Items]
Increase to net cash provided by operating activities	$ 2,390	$ 2,252
Increase to net cash used in financing activities	$ (1,404)	$ (711)
Solid Waste [Member]
Segment Reporting Information [Line Items]
Number of areas | area	17
Accounting Standards Update 2016-09 [Member] | Excess Tax Benefits Or Deficiencies [Member]
Segment Reporting Information [Line Items]
Increase to net cash provided by operating activities	$ 27
Increase to net cash used in financing activities	(27)
Accounting Standards Update 2016-09 [Member] | Tax Payments Associated with Equity Based Compensation Transactions [Member]
Segment Reporting Information [Line Items]
Increase to net cash provided by operating activities	18
Increase to net cash used in financing activities	$ (18)

XML

Landfill and Environmental Remediation Liabilities - Summary (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Landfill and environmental remediation liabilities
Total, Environmental Remediation	$ 250
Current (in accrued liabilities)	163	$ 147
Long-term	1,727	1,675
Total	1,890	1,822
Landfill [Member]
Landfill and environmental remediation liabilities
Current (in accrued liabilities), Landfill	140	119
Long-term, Landfill	1,500	1,457
Total, Landfill	1,640	1,576
Environmental Remediation Liabilities [Member]
Landfill and environmental remediation liabilities
Current (in accrued liabilities), Environmental Remediation	23	28
Long-term, Environmental Remediation	227	218
Total, Environmental Remediation	$ 250	$ 246

XML

Landfill and Environmental Remediation Liabilities - Changes (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Landfill and environmental remediation liabilities
Interest accretion		$ 68	$ 67
Ending balance, environmental remediation	$ 250	250
Landfill [Member]
Landfill and environmental remediation liabilities
Beginning balance, landfill		1,576
Obligations incurred and capitalized		51
Obligations settled		(74)
Interest accretion		68
Revisions in estimates and interest rate assumptions		14
Acquisitions, divestitures and other adjustments		5
Ending balance, landfill	1,640	1,640		$ 1,576
Environmental Remediation Liabilities [Member]
Landfill and environmental remediation liabilities
Beginning balance, environmental remediation		246
Obligations settled		(14)
Interest accretion		2
Revisions in estimates and interest rate assumptions		16
Ending balance, environmental remediation	250	250		246
San Jacinto Waste Pits [Member]
Landfill and environmental remediation liabilities
Beginning balance, environmental remediation		46
Revisions in estimates and interest rate assumptions	9	9	$ 42	44
Ending balance, environmental remediation	$ 54	$ 54		$ 46

XML

Debt - Components of Debt (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016	Aug. 31, 2016
Debt
Debt and capital lease obligations	$ 9,345	$ 9,310
Current portion of long-term debt	850	417
Long-term debt, less current portion	8,495	8,893
Revolving Credit Facility [Member]
Debt
Debt and capital lease obligations		426
Credit Facility, aggregate capacity	2,250	$ 2,250
Weighted average interest rate		1.90%
Commercial Paper Program [Member]
Debt
Debt and capital lease obligations	502
Current portion of long-term debt	$ 502
Credit Facility, aggregate capacity			$ 1,500
Weighted average interest rate	1.40%
Canadian Term Loan and Revolving Credit Facility [Member]
Debt
Debt and capital lease obligations	$ 143	$ 239
Weighted average interest rate	2.50%	2.10%
Senior Notes, Aggregate [Member]
Debt
Debt and capital lease obligations	$ 6,033	$ 6,033
Weighted average interest rate	4.60%	4.60%
Tax Exempt Bonds [Member]
Debt
Debt and capital lease obligations	$ 2,339	$ 2,304
Current portion of long-term debt	$ 119
Weighted average interest rate	1.90%	1.80%
Capital Leases and Other [Member]
Debt
Debt and capital lease obligations	$ 328	$ 308
Minimum [Member] | Senior Notes, Aggregate [Member]
Debt
Interest rate	2.40%	2.40%
Minimum [Member] | Tax Exempt Bonds [Member]
Debt
Interest rate	1.00%	1.00%
Maximum [Member] | Senior Notes, Aggregate [Member]
Debt
Interest rate	7.75%	7.75%
Maximum [Member] | Tax Exempt Bonds [Member]
Debt
Interest rate	5.70%	5.70%
Maximum [Member] | Capital Leases and Other [Member]
Debt
Interest rate	12.00%

XML

Debt (Detail) CAD in Millions, $ in Millions	1 Months Ended				3 Months Ended	9 Months Ended
	Aug. 31, 2017 USD ($)	Aug. 31, 2016 USD ($)	Mar. 31, 2016 CAD	Mar. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2017 CAD	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Debt
Debt maturing within twelve months									$ 1,821
Current portion of long-term debt									850	$ 417
Debt classified as long-term due to intent and ability to refinance on long-term basis									971
Debt and capital lease obligations									9,345	9,310
Net commercial paper borrowings							$ 501
Debt repayments							749	$ 2,210
New borrowings							122	$ 2,536
Canadian Subsidiaries [Member]
Debt
Repayments of intercompany debt | CAD			CAD 370
Foreign Currency Derivatives [Member]
Debt
Cash received in termination of foreign exchange cross currency swaps				$ 67
Expense associated with termination of foreign exchange cross currency swaps					$ 8
Commercial Paper Program [Member]
Debt
Current portion of long-term debt									502
Maximum capacity		$ 1,500
Debt and capital lease obligations									502
Debt term		397 days
Net line of credit repayments							501
Tax Exempt Bonds [Member]
Debt
Current portion of long-term debt									119
Debt with interest rate periods that expiring in the next 12 months									551
Variable-rate tax-exempt bonds									471
Debt and capital lease obligations									2,339	2,304
Debt repayments							40
New borrowings	$ 75
6.1% Senior Notes Mature in March 2018 [Member]
Debt
Current portion of long-term debt									$ 590
Interest rate						6.10%			6.10%
Revolving Credit Facility [Member]
Debt
Maximum capacity									$ 2,250	2,250
Outstanding borrowings under credit facility									0
Letters of credit outstanding									777
Debt and capital lease obligations										426
Unused and available credit capacity									971
Net line of credit repayments							426
Canadian Term Loan and Revolving Credit Facility [Member]
Debt
Debt and capital lease obligations									143	239
Canadian Revolving Credit Facility [Member]
Debt
Maximum capacity | CAD						CAD 50
Outstanding borrowings under credit facility									0
Letters of credit outstanding									0
Canadian Term Loan [Member]
Debt
Maximum term credit | CAD						460
Debt repayments						CAD 142	108
Other Letter of Credit Facilities [Member]
Debt
Letters of credit outstanding									508
Capital Leases and Other [Member]
Debt
Debt and capital lease obligations									328	$ 308
Net debt borrowings (repayments)							53
New borrowings							$ 73
Other Debt [Member]
Debt
Current portion of long-term debt									$ 178

XML

Income Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Effective tax rate of income (loss) before income taxes	35.70%	33.70%	34.90%	35.50%
Reduction in income tax expense	$ 1		$ 35
Equity in net losses of unconsolidated entities	8	$ 9	53	$ 32
Investments Qualifying for Federal Tax Credits [Member]
Equity in net losses of unconsolidated entities	6	7	21	22
Income tax (expense) benefit, including tax credits, from equity method investment	$ 14	$ 15	$ 39	$ 40

XML

Earnings Per Share (Detail) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share
Number of common shares outstanding at end of period	434.2	442.0	434.2	442.0
Effect of using weighted average common shares outstanding	3.6	0.9	6.1	2.3
Weighted average basic common shares outstanding	437.8	442.9	440.3	444.3
Dilutive effect of equity-based compensation awards and other contingently issuable shares	3.0	2.8	3.0	2.8
Weighted average diluted common shares outstanding	440.8	445.7	443.3	447.1
Potentially issuable shares	8.2	9.2	8.2	9.2
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding	1.9	0.5	2.3	0.5

XML

Commitments and Contingencies (Detail)	2 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	Jan. 31, 2011 item	Sep. 30, 2017 USD ($) site item	Sep. 30, 2017 USD ($) site item	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Commitments And Contingencies [Line Items]
Approximate number of homeowners' properties adjacent to or near certain of our landfills with agreements guaranteeing market value | item		850	850
Number of landfills adjacent to or near homeowners' properties with agreements guaranteeing market value | item		22	22
Environmental remediation reasonably possible additional losses high estimate		$ 140,000,000	$ 140,000,000
Environmental remediation liabilities		$ 250,000,000	$ 250,000,000
Number of sites listed on the EPA's NPL for which we have been notified we are a PRP | site		75	75
Number of owned sites listed on the EPA's NPL for which we have been notified we are a PRP | site		15	15
Number of non-owned sites listed on the EPA's NPL for which we have been notified we are a PRP | site		60	60
Dollar threshold for environmental matters requiring disclosure under item 103 of the SEC's Regulation S-K		$ 100,000	$ 100,000
Approximate percentage of workforce covered by collective bargaining agreements		20.00%	20.00%
Multiemployer pension withdrawal obligation		$ 11,000,000	$ 11,000,000
Expected time of completion of IRS audits			27 months
San Jacinto Waste Pits [Member]
Commitments And Contingencies [Line Items]
Revisions in estimate		9,000,000	$ 9,000,000	$ 42,000,000	$ 44,000,000
Environmental remediation liabilities		54,000,000	54,000,000		46,000,000
Waimanalo Gulch Sanitary Landfill
Commitments And Contingencies [Line Items]
Number of major rainfalls | item	2
Wheelabrator [Member]
Commitments And Contingencies [Line Items]
Maximum future payments regarding guarantees of unconsolidated entities financial obligations		96,000,000	96,000,000		96,000,000
Operational and financial performance obligations, net liability		3,000,000	3,000,000		11,000,000
Revolving Credit Facility [Member]
Commitments And Contingencies [Line Items]
Credit Facility, aggregate capacity		$ 2,250,000,000	$ 2,250,000,000		$ 2,250,000,000

XML

Segment and Related Information - Additional Information (Detail) - Solid Waste [Member]	9 Months Ended
	Sep. 30, 2017 segment area
Segment Reporting Information [Line Items]
Number of areas | area	17
Number of reportable segments | segment	3

XML

Segment and Related Information - Reportable Segments (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting Information [Line Items]
Operating revenues	$ 3,716	$ 3,548	$ 10,833	$ 10,149
Income from operations	701	560	1,932	1,679
Operating Group Total [Member]
Segment Reporting Information [Line Items]
Operating revenues	3,716	3,548	10,833	10,149
Income from operations	837	698	2,370	2,083
Solid Waste [Member]
Segment Reporting Information [Line Items]
Operating revenues	3,118	2,990	9,079	8,605
Income from operations	853	728	2,436	2,169
Tier 1 [Member]
Segment Reporting Information [Line Items]
Operating revenues	1,174	1,126	3,435	3,242
Income from operations	398	369	1,159	1,065
Tier 2 [Member]
Segment Reporting Information [Line Items]
Operating revenues	753	723	2,189	2,060
Income from operations	180	121	527	423
Tier 3 [Member]
Segment Reporting Information [Line Items]
Operating revenues	1,191	1,141	3,455	3,303
Income from operations	275	238	750	681
Other [Member]
Segment Reporting Information [Line Items]
Operating revenues	598	558	1,754	1,544
Income from operations	(16)	(30)	(66)	(86)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Operating revenues	4,465	4,239	12,993	12,112
Operating Segments [Member] | Operating Group Total [Member]
Segment Reporting Information [Line Items]
Operating revenues	4,465	4,239	12,993	12,112
Operating Segments [Member] | Solid Waste [Member]
Segment Reporting Information [Line Items]
Operating revenues	3,803	3,631	11,071	10,432
Operating Segments [Member] | Tier 1 [Member]
Segment Reporting Information [Line Items]
Operating revenues	1,432	1,364	4,189	3,921
Operating Segments [Member] | Tier 2 [Member]
Segment Reporting Information [Line Items]
Operating revenues	924	885	2,682	2,522
Operating Segments [Member] | Tier 3 [Member]
Segment Reporting Information [Line Items]
Operating revenues	1,447	1,382	4,200	3,989
Operating Segments [Member] | Other [Member]
Segment Reporting Information [Line Items]
Operating revenues	662	608	1,922	1,680
Intercompany Operating Revenues [Member]
Segment Reporting Information [Line Items]
Operating revenues	(749)	(691)	(2,160)	(1,963)
Intercompany Operating Revenues [Member] | Operating Group Total [Member]
Segment Reporting Information [Line Items]
Operating revenues	(749)	(691)	(2,160)	(1,963)
Intercompany Operating Revenues [Member] | Solid Waste [Member]
Segment Reporting Information [Line Items]
Operating revenues	(685)	(641)	(1,992)	(1,827)
Intercompany Operating Revenues [Member] | Tier 1 [Member]
Segment Reporting Information [Line Items]
Operating revenues	(258)	(238)	(754)	(679)
Intercompany Operating Revenues [Member] | Tier 2 [Member]
Segment Reporting Information [Line Items]
Operating revenues	(171)	(162)	(493)	(462)
Intercompany Operating Revenues [Member] | Tier 3 [Member]
Segment Reporting Information [Line Items]
Operating revenues	(256)	(241)	(745)	(686)
Intercompany Operating Revenues [Member] | Other [Member]
Segment Reporting Information [Line Items]
Operating revenues	(64)	(50)	(168)	(136)
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Income from operations	$ (136)	$ (138)	$ (438)	$ (404)

XML

Acquisitions (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($)
Southern Waste Systems [Member]
Business Acquisition [Line Items]
Total consideration, net of cash acquired, for business acquisitions closed during the year	$ 525

XML

Asset Impairments and Unusual Items - Summary (Detail) - USD ($) $ in Millions	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Expense from divestitures, asset impairments and unusual items, net	$ 9	$ 106		$ 10	$ 107
Western Pennsylvania [Member]
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Asset impairments					43
LampTracker Reporting Unit [Member]
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Goodwill impairment charges					10
Waste Diversion Technology Companies [Member]
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Equity method investments impairment charges				28
Cost method investment impairment			$ 41
Investment In Majority Owned Organics Company [Member]
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Loss on sale of business					8
San Jacinto Waste Pits [Member]
Income Expense From Divestitures Asset Impairments And Unusual Items [Line Items]
Revisions in estimate	$ 9			$ 9	$ 42	$ 44

XML

Accumulated Other Comprehensive Loss - Changes (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
AOCI roll forward
Beginning balance			$ 5,320
Other comprehensive income (loss), net of tax	$ 47	$ (14)	94	$ 64
Ending balance	5,300		5,300
Accumulated Other Comprehensive Loss [Member]
AOCI roll forward
Beginning balance			(80)
Other comprehensive income before reclassifications, net of tax			88
Amounts reclassified from accumulated other comprehensive loss net of tax			6
Other comprehensive income (loss), net of tax			94
Ending balance	14		14
Derivative Instrument [Member]
AOCI roll forward
Beginning balance			(40)
Amounts reclassified from accumulated other comprehensive loss net of tax			6
Other comprehensive income (loss), net of tax			6
Ending balance	(34)		(34)
Available for Sale Securities [Member]
AOCI roll forward
Beginning balance			13
Other comprehensive income before reclassifications, net of tax			2
Other comprehensive income (loss), net of tax			2
Ending balance	15		15
Foreign Currency Translation Adjustments [Member]
AOCI roll forward
Beginning balance			(47)
Other comprehensive income before reclassifications, net of tax			86
Other comprehensive income (loss), net of tax			86
Ending balance	39		39
Post - Retirement Benefit Obligation [Member]
AOCI roll forward
Beginning balance			(6)
Ending balance	$ (6)		$ (6)

XML

Accumulated Other Comprehensive Loss - Tax Impact of Changes (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($)
Derivative Instrument [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	$ 0
Amounts reclassified from accumulated other comprehensive (income) loss, tax	3
Available for Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	2
Amounts reclassified from accumulated other comprehensive (income) loss, tax	0
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	0
Amounts reclassified from accumulated other comprehensive (income) loss, tax	0
Post - Retirement Benefit Obligation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	0
Amounts reclassified from accumulated other comprehensive (income) loss, tax	$ 0

XML

Accumulated Other Comprehensive Loss - Derivative (Detail) - Derivative Instrument [Member] - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2016	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive income before reclassifications, tax		$ 0
Foreign Currency Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Outstanding derivatives	$ 0
Other comprehensive loss on derivatives net of tax	7
Other comprehensive income before reclassifications, tax	$ 4

XML

Accumulated Other Comprehensive Loss - Reclassification (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other, net				$ (53)
Income before income taxes	$ 603	$ 457	$ 1,607	1,312
Tax (expense) benefit	(215)	(153)	(561)	(466)
Consolidated net income	388	304	1,046	846
Derivative Instrument [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income taxes	(3)	(3)	(9)	(29)
Tax (expense) benefit	1	1	3	11
Consolidated net income	(2)	(2)	(6)	(18)
Derivative Instrument [Member] | Interest Rate Swaps [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	(2)	(2)	(8)	(8)
Derivative Instrument [Member] | Treasury Lock [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	$ (1)	$ (1)	$ (1)	(1)
Derivative Instrument [Member] | Foreign Currency Derivatives [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other, net				$ (20)

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Common Stock Repurchase Program (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended				9 Months Ended
	Aug. 31, 2017	Jun. 30, 2017	Feb. 28, 2017	Nov. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Accelerated Share Repurchases [Line Items]
Common stock repurchases					$ 750
Cash paid for repurchase of common stock					750	$ 500
Accelerated Share Repurchase Agreement (ASR) [Member]
Accelerated Share Repurchases [Line Items]
Common stock repurchases	$ 500	$ 250		$ 225
Cash paid for repurchase of common stock	$ 500	$ 250		$ 225
Shares of common stock received under ASR	5.3	2.7	0.4	2.8
Additional share received under ASR	0.7
ASR price (dollars per share)	$ 75.25	$ 73.46		$ 63.41
ASR final weighted price (dollars per share)	$ 74.31		$ 69.43
Authorized share repurchases					$ 0

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Fair Value Measurements - Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 171	$ 174
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	16	35
Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	54	46
Fixed-Income Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	46	39
Redeemable Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	55	54
Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	16	35
Quoted Prices in Active Markets (Level 1) [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	16	35
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	100	85
Significant Other Observable Inputs (Level 2) [Member] | Available-for-sale Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	54	46
Significant Other Observable Inputs (Level 2) [Member] | Fixed-Income Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	46	39
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	55	54
Significant Unobservable Inputs (Level 3) [Member] | Redeemable Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 55	$ 54

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Fair Value Measurements - Debt (Detail) - USD ($) $ in Billions	Sep. 30, 2017	Dec. 31, 2016
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Debt		$ 9.3
Significant Other Observable Inputs (Level 2) [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Debt	$ 9.9	$ 9.7

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Variable Interest Entities (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($) item	Dec. 31, 2016 USD ($)
Variable Interest Entity, Not Primary Beneficiary [Member] | Other Receivables, Investments in Unconsolidated Entities and Other Assets [Member]
Variable Interest Entity [Line Items]
Aggregate investment balance	$ 99	$ 93
Investments Qualifying for Federal Tax Credits [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Number of variable interest entities | item	2
Aggregate investment balance	$ 65	84
Investment In Low Income Housing Properties [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Equity method investments debt balance	40	57
Trust For Final Capping, Closure, Post-closure Or Environmental Remediation Obligations [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Long-term other assets [Member]
Variable Interest Entity [Line Items]
Value of consolidated VIEs	$ 101	$ 95

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Condensed Consolidating Financial Statements - Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 35	$ 32	$ 30	$ 39
Other current assets	2,265	2,344
Total current assets	2,300	2,376
Property and equipment, net	11,136	10,950
Other assets	7,513	7,533
Total assets	20,949	20,859
Current liabilities:
Current portion of long-term debt	850	417
Accounts payable and other current liabilities	2,409	2,377
Total current liabilities	3,259	2,794
Long-term debt, less current portion	8,495	8,893
Other liabilities	3,895	3,852
Total liabilities	15,649	15,539
Equity:
Stockholders' equity	5,278	5,297
Noncontrolling interests	22	23
Total equity	5,300	5,320
Total liabilities and equity	20,949	20,859
Eliminations [Member]
Current assets:
Investments in affiliates	(42,712)	(40,255)
Advances to affiliates	(14,171)	(13,000)
Total assets	(56,883)	(53,255)
Current liabilities:
Due to affiliates	(19,955)	(18,777)
Total liabilities	(19,955)	(18,777)
Equity:
Stockholders' equity	(42,712)	(40,255)
Advances to affiliates	5,784	5,777
Total equity	(36,928)	(34,478)
Total liabilities and equity	(56,883)	(53,255)
WM [Member] | Reportable Legal Entities [Member]
Current assets:
Other current assets	3	5
Total current assets	3	5
Investments in affiliates	21,105	19,924
Other assets	12	14
Total assets	21,120	19,943
Current liabilities:
Current portion of long-term debt	736	269
Accounts payable and other current liabilities	61	81
Total current liabilities	797	350
Long-term debt, less current portion	5,911	6,229
Due to affiliates	14,425	13,350
Other liabilities	8	16
Total liabilities	21,141	19,945
Equity:
Stockholders' equity	5,278	5,297
Advances to affiliates	(5,299)	(5,299)
Total equity	(21)	(2)
Total liabilities and equity	21,120	19,943
WM Holdings [Member] | Reportable Legal Entities [Member]
Current assets:
Other current assets	5	5
Total current assets	5	5
Investments in affiliates	21,607	20,331
Other assets	31	30
Total assets	21,643	20,366
Current liabilities:
Accounts payable and other current liabilities	4	9
Total current liabilities	4	9
Long-term debt, less current portion	304	304
Due to affiliates	231	128
Total liabilities	539	441
Equity:
Stockholders' equity	21,104	19,925
Total equity	21,104	19,925
Total liabilities and equity	21,643	20,366
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Current assets:
Cash and cash equivalents	35	32	$ 30	$ 39
Other current assets	2,257	2,334
Total current assets	2,292	2,366
Property and equipment, net	11,136	10,950
Advances to affiliates	14,171	13,000
Other assets	7,470	7,489
Total assets	35,069	33,805
Current liabilities:
Current portion of long-term debt	114	148
Accounts payable and other current liabilities	2,344	2,287
Total current liabilities	2,458	2,435
Long-term debt, less current portion	2,280	2,360
Due to affiliates	5,299	5,299
Other liabilities	3,887	3,836
Total liabilities	13,924	13,930
Equity:
Stockholders' equity	21,608	20,330
Advances to affiliates	(485)	(478)
Noncontrolling interests	22	23
Total equity	21,145	19,875
Total liabilities and equity	$ 35,069	$ 33,805

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Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Condensed Income Statements, Captions [Line Items]
Operating revenues	$ 3,716	$ 3,548	$ 10,833	$ 10,149
Costs and expenses	3,015	2,988	8,901	8,470
Income from operations	701	560	1,932	1,679
Other income (expense):
Interest expense, net	(90)	(94)	(272)	(282)
Other, net	(8)	(9)	(53)	(85)
Total other income (expense)	(98)	(103)	(325)	(367)
Income before income taxes	603	457	1,607	1,312
Income tax expense (benefit)	215	153	561	466
Consolidated net income	388	304	1,046	846
Less: Net income (loss) attributable to noncontrolling interests	2	2		(1)
Net income attributable to Waste Management, Inc.	386	302	1,046	847
Eliminations [Member]
Other income (expense):
Equity in earnings of subsidiaries, net of tax	(867)	(701)	(2,371)	(1,981)
Total other income (expense)	(867)	(701)	(2,371)	(1,981)
Income before income taxes	(867)	(701)	(2,371)	(1,981)
Consolidated net income	(867)	(701)	(2,371)	(1,981)
Net income attributable to Waste Management, Inc.	(867)	(701)	(2,371)	(1,981)
WM [Member] | Reportable Legal Entities [Member]
Other income (expense):
Interest expense, net	(75)	(77)	(223)	(227)
Equity in earnings of subsidiaries, net of tax	432	349	1,181	986
Other, net				(1)
Total other income (expense)	357	272	958	758
Income before income taxes	357	272	958	758
Income tax expense (benefit)	(29)	(30)	(88)	(89)
Consolidated net income	386	302	1,046	847
Net income attributable to Waste Management, Inc.	386	302	1,046	847
WM Holdings [Member] | Reportable Legal Entities [Member]
Other income (expense):
Interest expense, net	(5)	(5)	(15)	(15)
Equity in earnings of subsidiaries, net of tax	435	352	1,190	995
Total other income (expense)	430	347	1,175	980
Income before income taxes	430	347	1,175	980
Income tax expense (benefit)	(2)	(2)	(6)	(6)
Consolidated net income	432	349	1,181	986
Net income attributable to Waste Management, Inc.	432	349	1,181	986
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Income Statements, Captions [Line Items]
Operating revenues	3,716	3,548	10,833	10,149
Costs and expenses	3,015	2,988	8,901	8,470
Income from operations	701	560	1,932	1,679
Other income (expense):
Interest expense, net	(10)	(12)	(34)	(40)
Other, net	(8)	(9)	(53)	(84)
Total other income (expense)	(18)	(21)	(87)	(124)
Income before income taxes	683	539	1,845	1,555
Income tax expense (benefit)	246	185	655	561
Consolidated net income	437	354	1,190	994
Less: Net income (loss) attributable to noncontrolling interests	2	2		(1)
Net income attributable to Waste Management, Inc.	$ 435	$ 352	$ 1,190	$ 995

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Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Comprehensive Income (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Condensed Statement of Income Captions [Line Items]
Comprehensive income	$ 435	$ 290	$ 1,140	$ 910
Less: Comprehensive income (loss) attributable to noncontrolling interests	2	2		(1)
Comprehensive income attributable to Waste Management, Inc.	433	288	1,140	911
Eliminations [Member]
Condensed Statement of Income Captions [Line Items]
Comprehensive income	(867)	(701)	(2,371)	(1,981)
Comprehensive income attributable to Waste Management, Inc.	(867)	(701)	(2,371)	(1,981)
WM [Member] | Reportable Legal Entities [Member]
Condensed Statement of Income Captions [Line Items]
Comprehensive income	388	303	1,052	852
Comprehensive income attributable to Waste Management, Inc.	388	303	1,052	852
WM Holdings [Member] | Reportable Legal Entities [Member]
Condensed Statement of Income Captions [Line Items]
Comprehensive income	432	349	1,181	986
Comprehensive income attributable to Waste Management, Inc.	432	349	1,181	986
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Statement of Income Captions [Line Items]
Comprehensive income	482	339	1,278	1,053
Less: Comprehensive income (loss) attributable to noncontrolling interests	2	2		(1)
Comprehensive income attributable to Waste Management, Inc.	$ 480	$ 337	$ 1,278	$ 1,054

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Condensed Consolidating Financial Statements - Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Condensed Cash Flow Statements, Captions [Line Items]
Operating activities	$ 2,390	$ 2,252
Investing activities	(984)	(1,550)
Financing activities	(1,404)	(711)
Effect of exchange rate changes on cash and cash equivalents	1
Increase (decrease) in cash and cash equivalents	3	(9)
Cash and cash equivalents at beginning of period	32	39
Cash and cash equivalents at end of period	35	30
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Operating activities	2,390	2,252
Investing activities	(984)	(1,550)
Financing activities	(1,404)	(711)
Effect of exchange rate changes on cash and cash equivalents	1
Increase (decrease) in cash and cash equivalents	3	(9)
Cash and cash equivalents at beginning of period	32	39
Cash and cash equivalents at end of period	$ 35	$ 30