Condensed Consolidating Financial Statements

3 Months Ended

Mar. 31, 2020

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

March 31, 2020

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	3,049	$	—	$	76	$	—	$	3,125
Other current assets		2		4		2,504		—		2,510
		3,051		4		2,580		—		5,635
Property and equipment, net		—		—		12,900		—		12,900
Investments in affiliates		26,650		27,021		—		(53,671)		—
Advances to affiliates		—		—		18,655		(18,655)		—
Other assets		5		10		8,628		—		8,643
Total assets	$	29,706	$	27,035	$	42,763	$	(72,326)	$	27,178
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	164	$	—	$	223	$	—	$	387
Accounts payable and other current liabilities		99		3		2,581		—		2,683
		263		3		2,804		—		3,070
Long-term debt, less current portion		10,589		248		2,228		—		13,065
Due to affiliates		18,818		137		6,709		(25,664)		—
Other liabilities		2		—		4,296		—		4,298
Total liabilities		29,672		388		16,037		(25,664)		20,433
Equity:
Stockholders’ equity		6,743		26,647		27,024		(53,671)		6,743
Advances to affiliates		(6,709)		—		(300)		7,009		—
Noncontrolling interests		—		—		2		—		2
		34		26,647		26,726		(46,662)		6,745
Total liabilities and equity	$	29,706	$	27,035	$	42,763	$	(72,326)	$	27,178

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2019

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	3,485	$	—	$	76	$	—	$	3,561
Other current assets		2		4		2,642		—		2,648
		3,487		4		2,718		—		6,209
Property and equipment, net		—		—		12,893		—		12,893
Investments in affiliates		26,221		26,673		—		(52,894)		—
Advances to affiliates		—		—		19,047		(19,047)		—
Other assets		6		10		8,625		—		8,641
Total assets	$	29,714	$	26,687	$	43,283	$	(71,941)	$	27,743
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	15	$	—	$	203	$	—	$	218
Accounts payable and other current liabilities		105		7		2,814		—		2,926
		120		7		3,017		—		3,144
Long-term debt, less current portion		10,736		248		2,296		—		13,280
Due to affiliates		19,131		214		7,345		(26,690)		—
Other liabilities		4		—		4,245		—		4,249
Total liabilities		29,991		469		16,903		(26,690)		20,673
Equity:
Stockholders’ equity		7,068		26,218		26,676		(52,894)		7,068
Advances to affiliates		(7,345)		—		(298)		7,643		—
Noncontrolling interests		—		—		2		—		2
		(277)		26,218		26,380		(45,251)		7,070
Total liabilities and equity	$	29,714	$	26,687	$	43,283	$	(71,941)	$	27,743

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2020

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,729	$	—	$	3,729
Costs and expenses		—		—		3,156		—		3,156
Income from operations		—		—		573		—		573
Other income (expense):
Interest expense, net		(93)		(4)		(15)		—		(112)
Equity in earnings of subsidiaries, net of tax		429		432		—		(861)		—
Other, net		—		—		(26)		—		(26)
		336		428		(41)		(861)		(138)
Income before income taxes		336		428		532		(861)		435
Income tax expense (benefit)		(25)		(1)		100		—		74
Consolidated net income		361		429		432		(861)		361
Less: Net loss attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	361	$	429	$	432	$	(861)	$	361

Three Months Ended March 31, 2019

(Unaudited)

			WM		Non‑Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Operating revenues	$	—	$	—	$	3,696	$	—	$	3,696
Costs and expenses		—		—		3,075		—		3,075
Income from operations		—		—		621		—		621
Other income (expense):
Interest expense, net		(80)		(5)		(11)		—		(96)
Equity in earnings of subsidiaries, net of tax		406		413		—		(819)		—
Other, net		—		(3)		(60)		—		(63)
		326		405		(71)		(819)		(159)
Income before income taxes		326		405		550		(819)		462
Income tax expense (benefit)		(21)		(1)		137		—		115
Consolidated net income		347		406		413		(819)		347
Less: Net loss attributable to noncontrolling interests		—		—		—		—		—
Net income attributable to Waste Management, Inc.	$	347	$	406	$	413	$	(819)	$	347

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			WM		Non-Guarantor
	WM		Holdings		Subsidiaries		Eliminations		Consolidated
Three Months Ended March 31:
2020
Comprehensive income	$	363	$	429	$	347	$	(861)	$	278
Less: Comprehensive loss attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	363	$	429	$	347	$	(861)	$	278
2019
Comprehensive income	$	349	$	406	$	445	$	(819)	$	381
Less: Comprehensive loss attributable to noncontrolling interests		—		—		—		—		—
Comprehensive income attributable to Waste Management, Inc.	$	349	$	406	$	445	$	(819)	$	381

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2020

(Unaudited)

			WM		Non-Guarantor
	WM(a)		Holdings(a)		Subsidiaries(a)		Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	17	$	—	$	748	$	—	$	765
Investing activities		—		—		(503)		—		(503)
Financing activities		—		—		(668)		—		(668)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents		—		—		(4)		—		(4)
Intercompany activity		(453)		—		453		—		—
Increase in cash, cash equivalents and restricted cash and cash equivalents		(436)		—		26		—		(410)
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		3,485		—		162		—		3,647
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	3,049	$	—	$	188	$	—	$	3,237

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

(a) Cash receipts and payments of WM and WM Holdings are transacted by Non-Guarantor Subsidiaries. Cash, cash equivalents and restricted cash and cash equivalents of WM as of March 31, 2020 include remaining proceeds from our 2019 senior note issuances.