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

June 30, 2018

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	47	$	—	$	47
Other current assets		91		7		2,326		—		2,424
		91		7		2,373		—		2,471
Property and equipment, net		—		—		11,625		—		11,625
Investments in affiliates		23,466		23,921		—		(47,387)		—
Advances to affiliates		—		—		15,969		(15,969)		—
Other assets		8		31		7,879		—		7,918
Total assets	$	23,565	$	23,959	$	37,846	$	(63,356)	$	22,014

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	491	$	—	$	337	$	—	$	828
Accounts payable and other current liabilities		84		9		2,384		—		2,477
		575		9		2,721		—		3,305
Long-term debt, less current portion		6,936		304		1,728		—		8,968
Due to affiliates		16,069		181		6,073		(22,323)		—
Other liabilities		4		—		3,681		—		3,685
Total liabilities		23,584		494		14,203		(22,323)		15,958
Equity:
Stockholders’ equity		6,054		23,465		23,922		(47,387)		6,054
Advances to affiliates		(6,073)		—		(281)		6,354		—
Noncontrolling interests		—		—		2		—		2
		(19)		23,465		23,643		(41,033)		6,056
Total liabilities and equity	$	23,565	$	23,959	$	37,846	$	(63,356)	$	22,014

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 June 30, 2018

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,783	$	(44)	$	3,739
Costs and expenses		44		—		3,024		(44)		3,024
Income from operations		(44)		—		759		—		715
Other income (expense):
Interest expense, net		(78)		(4)		(11)		—		(93)
Equity in earnings of subsidiaries, net of tax		588		591		—		(1,179)		—
Other, net		—		—		(13)		—		(13)
		510		587		(24)		(1,179)		(106)
Income before income taxes		466		587		735		(1,179)		609
Income tax expense (benefit)		(33)		(1)		144		—		110
Consolidated net income		499		588		591		(1,179)		499
Less: Net loss attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	499	$	588	$	591	$	(1,179)	$	499

Three Months Ended June 30, 2017

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,677	$	—	$	3,677
Costs and expenses		—		—		3,004		—		3,004
Income from operations		—		—		673		—		673
Other income (expense):
Interest expense, net		(74)		(5)		(11)		—		(90)
Equity in earnings of subsidiaries, net of tax		406		409		—		(815)		—
Other, net		—		—		(13)		—		(13)
		332		404		(24)		(815)		(103)
Income before income taxes		332		404		649		(815)		570
Income tax expense (benefit)		(30)		(2)		241		—		209
Consolidated net income		362		406		408		(815)		361
Less: Net loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	362	$	406	$	409	$	(815)	$	362

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued)

Six Months Ended June 30, 2018

(Unaudited)


			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	7,338	$	(88)	$	7,250
Costs and expenses		88		—		5,927		(88)		5,927
Income from operations		(88)		—		1,411		—		1,323
Other income (expense):
Interest expense, net		(154)		(9)		(21)		—		(184)
Equity in earnings of subsidiaries, net of tax		1,073		1,080		—		(2,153)		—
Other, net		—		—		(19)		—		(19)
		919		1,071		(40)		(2,153)		(203)
Income before income taxes		831		1,071		1,371		(2,153)		1,120
Income tax expense (benefit)		(64)		(2)		292		—		226
Consolidated net income		895		1,073		1,079		(2,153)		894
Less: Net loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Net income attributable to Waste Management, Inc.	$	895	$	1,073	$	1,080	$	(2,153)	$	895

Six Months Ended June 30, 2017

(Unaudited)


			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	7,117	$	—	$	7,117
Costs and expenses		—		—		5,886		—		5,886
Income from operations		—		—		1,231		—		1,231
Other income (expense):
Interest expense, net		(148)		(10)		(24)		—		(182)
Equity in earnings of subsidiaries, net of tax		749		755		—		(1,504)		—
Other, net		—		—		(45)		—		(45)
		601		745		(69)		(1,504)		(227)
Income before income taxes		601		745		1,162		(1,504)		1,004
Income tax expense (benefit)		(59)		(4)		409		—		346
Consolidated net income		660		749		753		(1,504)		658
Less: Net loss attributable to noncontrolling interests		—		—		(2)		—		(2)
Net income attributable to Waste Management, Inc.	$	660	$	749	$	755	$	(1,504)	$	660

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended June 30:
2018
Comprehensive income	$	501	$	588	$	568	$	(1,179)	$	478
Less: Comprehensive loss attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	501	$	588	$	568	$	(1,179)	$	478

2017
Comprehensive income	$	364	$	406	$	439	$	(815)	$	394
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management, Inc.	$	364	$	406	$	440	$	(815)	$	395


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Six Months Ended June 30:
2018
Comprehensive income	$	899	$	1,073	$	1,023	$	(2,153)	$	842
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(1)		—		(1)
Comprehensive income attributable to Waste Management, Inc.	$	899	$	1,073	$	1,024	$	(2,153)	$	843

2017
Comprehensive income	$	664	$	749	$	796	$	(1,504)	$	705
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(2)		—		(2)
Comprehensive income attributable to Waste Management, Inc.	$	664	$	749	$	798	$	(1,504)	$	707

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2018

(Unaudited)


			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	1,784	$	—	$	1,784
Investing activities		—		—		(1,010)		—		(1,010)
Financing activities		—		—		(647)		—		(647)
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		—		—		126		—		126
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	$	—	$	—	$	419	$	—	$	419

Six Months Ended June 30, 2017

(Unaudited)


			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	1,535	$	—	$	1,535
Investing activities		—		—		(673)		—		(673)
Financing activities		—		—		(859)		—		(859)
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		—		—		3		—		3
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	$	—	$	—	$	97	$	—	$	97

(a)

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