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

March 31, 2018

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	52	$	—	$	52
Other current assets		139		5		2,295		—		2,439
		139		5		2,347		—		2,491
Property and equipment, net		—		—		11,637		—		11,637
Investments in affiliates		22,878		23,351		—		(46,229)		—
Advances to affiliates		—		—		15,398		(15,398)		—
Other assets		5		31		7,942		—		7,978
Total assets	$	23,022	$	23,387	$	37,324	$	(61,627)	$	22,106

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	544	$	—	$	512	$	—	$	1,056
Accounts payable and other current liabilities		76		3		2,238		—		2,317
		620		3		2,750		—		3,373
Long-term debt, less current portion		6,954		304		1,643		—		8,901
Due to affiliates		15,472		203		6,073		(21,748)		—
Other liabilities		5		—		3,762		—		3,767
Total liabilities		23,051		510		14,228		(21,748)		16,041
Equity:
Stockholders’ equity		6,044		22,877		23,352		(46,229)		6,044
Advances to affiliates		(6,073)		—		(277)		6,350		—
Noncontrolling interests		—		—		21		—		21
		(29)		22,877		23,096		(39,879)		6,065
Total liabilities and equity	$	23,022	$	23,387	$	37,324	$	(61,627)	$	22,106

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2017


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	22	$	—	$	22
Other current assets		5		5		2,592		—		2,602
		5		5		2,614		—		2,624
Property and equipment, net		—		—		11,559		—		11,559
Investments in affiliates		22,393		22,893		—		(45,286)		—
Advances to affiliates		—		—		15,349		(15,349)		—
Other assets		9		31		7,606		—		7,646
Total assets	$	22,407	$	22,929	$	37,128	$	(60,635)	$	21,829

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	537	$	—	$	202	$	—	$	739
Accounts payable and other current liabilities		55		9		2,459		—		2,523
		592		9		2,661		—		3,262
Long-term debt, less current portion		6,457		304		1,991		—		8,752
Due to affiliates		15,404		224		6,073		(21,701)		—
Other liabilities		8		—		3,765		—		3,773
Total liabilities		22,461		537		14,490		(21,701)		15,787
Equity:
Stockholders’ equity		6,019		22,392		22,894		(45,286)		6,019
Advances to affiliates		(6,073)		—		(279)		6,352		—
Noncontrolling interests		—		—		23		—		23
		(54)		22,392		22,638		(38,934)		6,042
Total liabilities and equity	$	22,407	$	22,929	$	37,128	$	(60,635)	$	21,829

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2018

(Unaudited)


			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,555	$	(44)	$	3,511
Costs and expenses		44		—		2,903		(44)		2,903
Income from operations		(44)		—		652		—		608
Other income (expense):
Interest expense, net		(76)		(5)		(10)		—		(91)
Equity in earnings of subsidiaries, net of tax		485		489		—		(974)		—
Other, net		—		—		(6)		—		(6)
		409		484		(16)		(974)		(97)
Income before income taxes		365		484		636		(974)		511
Income tax expense (benefit)		(31)		(1)		148		—		116
Consolidated net income		396		485		488		(974)		395
Less: Net loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	396	$	485	$	489	$	(974)	$	396

Three Months Ended March 31, 2017

(Unaudited)


			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,440	$	—	$	3,440
Costs and expenses		—		—		2,882		—		2,882
Income from operations		—		—		558		—		558
Other income (expense):
Interest expense, net		(74)		(5)		(13)		—		(92)
Equity in earnings of subsidiaries, net of tax		343		346		—		(689)		—
Other, net		—		—		(32)		—		(32)
		269		341		(45)		(689)		(124)
Income before income taxes		269		341		513		(689)		434
Income tax expense (benefit)		(29)		(2)		168		—		137
Consolidated net income		298		343		345		(689)		297
Less: Net loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	298	$	343	$	346	$	(689)	$	298

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended March 31:
2018
Comprehensive income	$	398	$	485	$	455	$	(974)	$	364
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management, Inc.	$	398	$	485	$	456	$	(974)	$	365

2017
Comprehensive income	$	300	$	343	$	357	$	(689)	$	311
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management, Inc.	$	300	$	343	$	358	$	(689)	$	312

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2018

(Unaudited)


			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	809	$	—	$	809
Investing activities		—		—		(637)		—		(637)
Financing activities		—		—		(38)		—		(38)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents		—		—		(1)		—		(1)
Intercompany activity		—		—		—		—		—
Increase in cash, cash equivalents and restricted cash and cash equivalents		—		—		133		—		133
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		—		—		293		—		293
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	—	$	—	$	426	$	—	$	426

Three Months Ended March 31, 2017

(Unaudited)


			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	722	$	—	$	722
Investing activities		—		—		(337)		—		(337)
Financing activities		—		—		(385)		—		(385)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents		—		—		—		—		—
Intercompany activity		—		—		—		—		—
Increase in cash, cash equivalents and restricted cash and cash equivalents		—		—		—		—		—
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		—		—		94		—		94
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	—	$	—	$	94	$	—	$	94

(a)

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