15. Condensed Consolidating Financial Statements

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

CONDENSED CONSOLIDATING BALANCE SHEETS

March 31, 2019

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	57	$	—	$	57
Other current assets		167		6		2,395		(137)		2,431
		167		6		2,452		(137)		2,488
Property and equipment, net		—		—		12,390		—		12,390
Investments in affiliates		25,116		25,576		—		(50,692)		—
Advances to affiliates		—		—		17,391		(17,391)		—
Other assets		6		11		8,478		—		8,495
Total assets	$	25,289	$	25,593	$	40,711	$	(68,220)	$	23,373

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	903	$	—	$	140	$	—	$	1,043
Accounts payable and other current liabilities		68		6		2,632		(137)		2,569
		971		6		2,772		(137)		3,612
Long-term debt, less current portion		7,098		304		1,921		—		9,323
Due to affiliates		17,511		169		6,709		(24,389)		—
Other liabilities		3		—		4,018		—		4,021
Total liabilities		25,583		479		15,420		(24,526)		16,956
Equity:
Stockholders’ equity		6,415		25,114		25,578		(50,692)		6,415
Advances to affiliates		(6,709)		—		(289)		6,998		—
Noncontrolling interests		—		—		2		—		2
		(294)		25,114		25,291		(43,694)		6,417
Total liabilities and equity	$	25,289	$	25,593	$	40,711	$	(68,220)	$	23,373

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2018


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	61	$	—	$	61
Other current assets		2		5		2,577		—		2,584
		2		5		2,638		—		2,645
Property and equipment, net		—		—		11,942		—		11,942
Investments in affiliates		24,676		25,097		—		(49,773)		—
Advances to affiliates		—		—		17,258		(17,258)		—
Other assets		8		31		8,024		—		8,063
Total assets	$	24,686	$	25,133	$	39,862	$	(67,031)	$	22,650

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	258	$	—	$	174	$	—	$	432
Accounts payable and other current liabilities		82		9		2,585		—		2,676
		340		9		2,759		—		3,108
Long-term debt, less current portion		7,377		304		1,913		—		9,594
Due to affiliates		17,398		146		6,709		(24,253)		—
Other liabilities		5		—		3,667		—		3,672
Total liabilities		25,120		459		15,048		(24,253)		16,374
Equity:
Stockholders’ equity		6,275		24,674		25,099		(49,773)		6,275
Advances to affiliates		(6,709)		—		(286)		6,995		—
Noncontrolling interests		—		—		1		—		1
		(434)		24,674		24,814		(42,778)		6,276
Total liabilities and equity	$	24,686	$	25,133	$	39,862	$	(67,031)	$	22,650

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2019

(Unaudited)


			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,742	$	(46)	$	3,696
Costs and expenses		46		—		3,075		(46)		3,075
Income from operations		(46)		—		667		—		621
Other income (expense):
Interest expense, net		(80)		(5)		(11)		—		(96)
Equity in earnings of subsidiaries, net of tax		440		447		—		(887)		—
Other, net		—		(3)		(60)		—		(63)
		360		439		(71)		(887)		(159)
Income before income taxes		314		439		596		(887)		462
Income tax expense (benefit)		(33)		(1)		149		—		115
Consolidated net income		347		440		447		(887)		347
Less: Net loss attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	347	$	440	$	447	$	(887)	$	347

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

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended March 31:
2019
Comprehensive income	$	349	$	440	$	479	$	(887)	$	381
Less: Comprehensive loss attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	349	$	440	$	479	$	(887)	$	381

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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2019

(Unaudited)


			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	890	$	—	$	890
Investing activities		—		—		(800)		—		(800)
Financing activities		—		—		42		—		42
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		—		—		132		—		132
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		—		—		183		—		183
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	—	$	—	$	315	$	—	$	315

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

(a)

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