Document and Company Informatio
Document and Company Information (USD $) | |||
In Billions, except Share data | 12 Months Ended
Dec. 31, 2009 | Feb. 11, 2010
| Jun. 30, 2009
|
Document and Company Information [Abstract] | |||
Entity Registrant Name | WASTE MANAGEMENT INC | ||
Entity Central Index Key | 0000823768 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-12-31 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | 13.8 | ||
Entity Common Stock, Shares Outstanding (actual number) | 484,972,117 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and cash equivalents | $1,140 | $480 |
Accounts receivable, net of allowance for doubtful accounts of $31 and $39, respectively | 1,408 | 1,463 |
Other receivables | 119 | 147 |
Parts and supplies | 110 | 110 |
Deferred income taxes | 116 | 39 |
Other assets | 117 | 96 |
Total current assets | 3,010 | 2,335 |
Property and equipment, net of accumulated depreciation and amortization of $13,994 and $13,273, respectively | 11,541 | 11,402 |
Goodwill | 5,632 | 5,462 |
Other intangible assets, net | 238 | 158 |
Other assets | 733 | 870 |
Total assets | 21,154 | 20,227 |
Current liabilities: | ||
Accounts payable | 567 | 716 |
Accrued liabilities | 1,128 | 1,034 |
Deferred revenues | 457 | 451 |
Current portion of long-term debt | 749 | 835 |
Total current liabilities | 2,901 | 3,036 |
Long-term debt, less current portion | 8,124 | 7,491 |
Deferred income taxes | 1,509 | 1,484 |
Landfill and environmental remediation liabilities | 1,357 | 1,360 |
Other liabilities | 672 | 671 |
Total liabilities | 14,563 | 14,042 |
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 | 4,543 | 4,558 |
Retained earnings | 6,053 | 5,631 |
Accumulated other comprehensive income | 208 | 88 |
Treasury stock at cost, 144,162,063 and 139,546,915 shares, respectively | (4,525) | (4,381) |
Total Waste Management, Inc. stockholders' equity | 6,285 | 5,902 |
Noncontrolling interests | 306 | 283 |
Total equity | 6,591 | 6,185 |
Total liabilities and equity | $21,154 | $20,227 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Millions, except Share data | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Allowance for doubtful accounts | $31 | $39 |
Accumulated depreciation and amortization | $13,994 | $13,273 |
Waste Management, Inc. stockholders' equity: | ||
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized (actual number) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (actual number) | 630,282,461 | 630,282,461 |
Treasury stock, shares (actual number) | 144,162,063 | 139,546,915 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Statements of Operations [Abstract] | |||
Operating revenues | $11,791 | $13,388 | $13,310 |
Costs and expenses: | |||
Operating | 7,241 | 8,466 | 8,402 |
Selling, general and administrative | 1,364 | 1,477 | 1,432 |
Depreciation and amortization | 1,166 | 1,238 | 1,259 |
Restructuring | 50 | 2 | 10 |
(Income) expense from divestitures, asset impairments and unusual items | 83 | (29) | (47) |
Total costs and expenses | 9,904 | 11,154 | 11,056 |
Income from operations | 1,887 | 2,234 | 2,254 |
Other income (expense): | |||
Interest expense | (426) | (455) | (521) |
Interest income | 13 | 19 | 47 |
Equity in net losses of unconsolidated entities | (2) | (4) | (35) |
Other, net | 1 | 3 | 4 |
Total other income (expense) | (414) | (437) | (505) |
Income before income taxes | 1,473 | 1,797 | 1,749 |
Provision for income taxes | 413 | 669 | 540 |
Consolidated net income | 1,060 | 1,128 | 1,209 |
Less: Net income attributable to noncontrolling interests | 66 | 41 | 46 |
Net income attributable to Waste Management, Inc. | $994 | $1,087 | $1,163 |
Basic earnings per common share | 2.02 | 2.21 | 2.25 |
Diluted earnings per common share | 2.01 | 2.19 | 2.23 |
Cash dividends declared per common share | 1.16 | 1.08 | 0.96 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Cash flows from operating activities: | |||
Consolidated net income | $1,060 | $1,128 | $1,209 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,166 | 1,238 | 1,259 |
Deferred income tax (benefit) provision | (94) | 150 | 70 |
Interest accretion on landfill liabilities | 80 | 77 | 74 |
Interest accretion on and discount rate adjustments to environmental remediation liabilities and recovery assets | (30) | 41 | 17 |
Provision for bad debts | 48 | 50 | 43 |
Equity-based compensation expense | 30 | 48 | 37 |
Equity in net losses of unconsolidated entities, net of distributions | 2 | 1 | 39 |
Net gain from disposal of assets | (13) | (33) | (27) |
Effect of (income) expense from divestitures, asset impairments and unusual items | 83 | (29) | (47) |
Excess tax benefits associated with equity-based transactions | (4) | (7) | (26) |
Change in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||
Receivables | 29 | 216 | (22) |
Other current assets | (4) | (9) | 6 |
Other assets | 20 | 5 | 5 |
Accounts payable and accrued liabilities | 51 | (183) | (88) |
Deferred revenues and other liabilities | (62) | (118) | (110) |
Net cash provided by operating activities | 2,362 | 2,575 | 2,439 |
Cash flows from investing activities: | |||
Acquisitions of businesses, net of cash acquired | (281) | (280) | (90) |
Capital expenditures | (1,179) | (1,221) | (1,211) |
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets | 28 | 112 | 278 |
Purchases of short-term investments | 0 | 0 | (1,220) |
Proceeds from sales of short-term investments | 0 | 0 | 1,404 |
Net receipts from restricted trust and escrow accounts | 196 | 178 | 120 |
Other | (14) | 28 | (42) |
Net cash used in investing activities | (1,250) | (1,183) | (761) |
Cash flows from financing activities: | |||
New borrowings | 1,749 | 1,525 | 944 |
Debt repayments | (1,335) | (1,785) | (1,200) |
Common stock repurchases | (226) | (410) | (1,421) |
Cash dividends | (569) | (531) | (495) |
Exercise of common stock options and warrants | 20 | 37 | 142 |
Excess tax benefits associated with equity-based transactions | 4 | 7 | 26 |
Distributions paid to noncontrolling interests | (50) | (56) | (20) |
Other | (50) | (43) | 78 |
Net cash used in financing activities | (457) | (1,256) | (1,946) |
Effect of exchange rate changes on cash and cash equivalents | 5 | (4) | 2 |
Increase (decrease) in cash and cash equivalents | 660 | 132 | (266) |
Cash and cash equivalents at beginning of year | 480 | 348 | 614 |
Cash and cash equivalents at end of year | $1,140 | $480 | $348 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (USD $) | ||||
In Millions, except Share data in Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | Dec. 31, 2006
|
Beginning | $6,185 | $6,102 | $6,497 | |
Net income | 1,060 | 1,128 | 1,209 | |
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively | (21) | 40 | (34) | |
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively | 32 | (39) | 47 | |
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively | 10 | (18) | 2 | |
Foreign currency translation adjustments | 99 | (127) | 89 | |
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively | 6 | (8) | 3 | |
Other comprehensive income (loss) | 126 | (152) | 107 | |
Comprehensive income | 1,186 | 976 | 1,316 | |
Cash dividends declared | (569) | (531) | (495) | |
Equity-based compensation transactions, including dividend equivalents, net of taxes | 64 | 106 | 210 | |
Common stock repurchases | (226) | (410) | (1,421) | |
Distributions paid to noncontrolling interests | (50) | (56) | (20) | |
Cumulative effect of initial adoption of FIN 48 | 4 | |||
Cumulative effect of initial adoption of FAS 158 | (1) | |||
Other | 1 | (1) | 11 | |
Ending | 6,591 | 6,185 | 6,102 | 6,497 |
Common Stock | ||||
Beginning | 6 | 6 | 6 | |
Shares, Beginning (in thousands) | 630,282 | 630,282 | 630,282 | |
Shares, Ending (in thousands) | 630,282 | 630,282 | 630,282 | 630,282 |
Ending | 6 | 6 | 6 | 6 |
Additional Paid-In Capital | ||||
Beginning | 4,558 | 4,542 | 4,513 | |
Equity-based compensation transactions, including dividend equivalents, net of taxes | (15) | 16 | 30 | |
Other | (1) | |||
Ending | 4,543 | 4,558 | 4,542 | 4,513 |
Treasury Stock | ||||
Beginning | (4,381) | (4,065) | (2,836) | |
Shares, Beginning (in thousands) | (139,547) | (130,164) | (96,599) | |
Equity-based compensation transactions, including dividend equivalents, net of taxes | 82 | 94 | 182 | |
Equity-based compensation transactions, including dividend equivalents, net of taxes, shares | 2,610 | 2,995 | 6,067 | |
Common stock repurchases | (226) | (410) | (1,421) | |
Common stock repurchases, shares (in thousands) | (7,237) | (12,390) | (39,946) | |
Other | 10 | |||
Other, shares | 12 | 12 | 314 | |
Shares, Ending (in thousands) | (144,162) | (139,547) | (130,164) | (96,599) |
Ending | (4,525) | (4,381) | (4,065) | (2,836) |
Retained Earnings | ||||
Beginning | 5,631 | 5,080 | 4,410 | |
Net income | 994 | 1,087 | 1,163 | |
Cash dividends declared | (569) | (531) | (495) | |
Equity-based compensation transactions, including dividend equivalents, net of taxes | (3) | (4) | (2) | |
Cumulative effect of initial adoption of FIN 48 | 4 | |||
Cumulative effect of initial adoption of FAS 158 | (1) | |||
Ending | 6,053 | 5,631 | 5,080 | 4,410 |
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning | 88 | 229 | 129 | |
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively | (21) | 40 | (34) | |
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively | 32 | (39) | 47 | |
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively | 4 | (7) | (5) | |
Foreign currency translation adjustments | 99 | (127) | 89 | |
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively | 6 | (8) | 3 | |
Ending | 208 | 88 | 229 | 129 |
Noncontrolling Interests | ||||
Beginning | 283 | 310 | 275 | |
Net income | 66 | 41 | 46 | |
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively | 6 | (11) | 7 | |
Distributions paid to noncontrolling interests | (50) | (56) | (20) | |
Other | 1 | (1) | 2 | |
Ending | 306 | 283 | 310 | 275 |
Comprehensive Income | ||||
Net income | 1,060 | 1,128 | 1,209 | |
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively | (21) | 40 | (34) | |
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively | 32 | (39) | 47 | |
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively | 10 | (18) | 2 | |
Foreign currency translation adjustments | 99 | (127) | 89 | |
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively | 6 | (8) | 3 | |
Other comprehensive income (loss) | 126 | (152) | 107 | |
Comprehensive income | $1,186 | $976 | $1,316 |
1_Consolidated Statements of Ch
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments | $13 | $25 | $22 |
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings | 21 | 24 | 30 |
Tax effects on unrealized gains (losses) on marketable securities | 2 | 4 | 3 |
Tax effects on change in funded status of defined benefit plan liabilities | 4 | 5 | 3 |
Accumulated Other Comprehensive Income (Loss) | |||
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments | 13 | 25 | 22 |
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings | 21 | 24 | 30 |
Tax effects on unrealized gains (losses) on marketable securities | 2 | 4 | 3 |
Tax effects on change in funded status of defined benefit plan liabilities | 4 | 5 | 3 |
Comprehensive Income | |||
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments | 13 | 25 | 22 |
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings | 21 | 24 | 30 |
Tax effects on unrealized gains (losses) on marketable securities | 2 | 4 | 3 |
Tax effects on change in funded status of defined benefit plan liabilities | $4 | $5 | $3 |
Business
Business | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Business [Abstract] | |
Business | 1. Business The financial statements presented in this report represent the consolidation of Waste Management, Inc., a Delaware corporation; Waste Managements wholly-owned and majority-owned subsidiaries; and certain variable interest entities for which Waste Management or its subsidiaries are the primary beneficiary as described in Note20. Waste Management 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 WMI, we are referring only to Waste Management, Inc., the parent holding company. We are the leading provider of integrated waste services in North America. Using our vast network of assets and employees, we provide a comprehensive range of waste management services. Through our subsidiaries we provide collection, transfer, recycling, disposal and waste-to-energy services. In providing these services, we actively pursue projects and initiatives that we believe make a positive difference for our environment, including recovering and processing the methane gas produced naturally by landfills into a renewable energy source. Our customers include commercial, industrial, municipal and residential customers, other waste management companies, electric utilities and governmental entities. We manage and evaluate our principal operations through five Groups. Our four geographic Groups, which include our Eastern, Midwest, Southern and Western Groups, provide collection, transfer, recycling and disposal services. Our fifth Group is the Wheelabrator Group, which provides waste-to-energy services. We also provide additional services that are not managed through our five Groups, which are presented in this report as Other. Additional information related to our segments, including changes in the basis for our reported segments from December31, 2008, can be found under Reclassifications in Note2 and in Note21. |
Accounting Changes and Reclassi
Accounting Changes and Reclassifications | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Accounting Changes and Reclassifications [Abstract] | |
Accounting Changes and Reclassifications | 2. Accounting Changes and Reclassifications Accounting Changes Fair Value Measurements In September 2006, the Financial Accounting Standards Board issued authoritative guidance associated with fair value measurements. This guidance defined fair value, established a framework for measuring fair value, and expanded disclosures about fair value measurements. In February 2008, the FASB delayed the effective date of the guidance for all non-financial assets and non-financial liabilities, except those that are measured at fair value on a recurring basis. Accordingly, we adopted this guidance for assets and liabilities recognized at fair value on a recurring basis effective January1, 2008 and adopted the guidance for non-financial assets and liabilities measured on a non-recurring basis effective January1, 2009. The application of the fair value framework did not have a material impact on our consolidated financial position, results of operations or cash flows. Business Combinations In December 2007, the FASB issued revisions to the authoritative guidance associated with business combinations. This guidance clarified and revised the principles for how an acquirer recognizes and measures identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree. This guidance also addressed the recognition and measurement of goodwill acquired in business combinations and expanded disclosure requirements related to business combinations. Effective January1, 2009, we adopted the FASBs revised guidance associated with business combinations. The portions of this guidance that relate to business combinations completed before January1, 2009 did not have a material impact on our consolidated financial statements. Further, business combinations completed in 2009, which are discussed in Note19, have not been material to our financial position, results of operations or cash flows. However, to the extent that future business combinations are material, our adoption of the FASBs revised authoritative guidance associated with business combinations may significantly impact our accounting and reporting for future acquisitions, principally as a result of (i)expanded requirements to value acquired assets, liabilities and contingencies at their fair values when such amounts can be determined; and (ii)the requirement that acquisition-related transaction and restructuring costs be expensed as incurred rather than capitalized as a part of the cost of the acquisition. Noncontrolling Interests in Consolidated Financial Statements In December 2007, the FASB issued authoritative guidance that established accounting and reporting standards for noncontrolling interests in subsidiaries and for the de-consolidation of a subsidiary. The guidance also established that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. We adopted this guidance on January1, 2009. The presentation and disclosure requirements of this guidance, which must be applied retrospectively for all periods presented, have resulted in recla |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of WMI, its wholly-owned and majority-owned subsidiaries and certain variable interest entities for which we have determined that we are the primary beneficiary. All material intercompany balances and transactions have been eliminated. Investments in entities in which we do not have a controlling financial interest are accounted for under either the equity method or cost method of accounting, as appropriate. 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 a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methods. In some cases, these estimates are particularly 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 deal with the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, asset impairments, and self-insurance reserves and recoveries. Each of these items is discussed in additional detail below. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements. Cash and Cash Equivalents Cash and cash equivalents consist primarily of cash on deposit and money market funds that invest in United States government obligations with original maturities of three months or less. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments held within our trust funds and escrow accounts, accounts receivable and derivative instruments. We make efforts to control our exposure to credit risk associated with these instruments by (i)placing our assets and other financial interests with a diverse group of credit-worthy financial institutions; (ii)holding high-quality financial instruments while limiting investments in any one instrument; and (iii)maintaining strict policies over credit extension that include credit evaluations, credit limits and monitoring procedures, although generally we do not have collateral requirements for credit extensions. Our overall credit risk associated with trade receivables is limited due to the large number of geographically diverse customers we service. At December31, 2009 and 2008, no single customer represented greater than 5% of total accounts receivable. Trade and Other Receivables Our receivables are recorded when billed or when cash is advanced and represent claims against third parties that will be settled in cash. The carrying value of our receivables, net of the allowance |
Landfill and Environmental Reme
Landfill and Environmental Remediation Liabilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Landfill and Environmental Remediation Liabilities [Abstract] | |
Landfill and Environmental Remediation Liabilities | 4. Landfill and Environmental Remediation Liabilities Liabilities for landfill and environmental remediation costs are presented in the table below (in millions): December31, 2009 December31, 2008 Environmental Environmental Landfill Remediation Total Landfill Remediation Total Current (in accrued liabilities) $ 125 $ 41 $ 166 $ 108 $ 49 $ 157 Long-term 1,142 215 1,357 1,110 250 1,360 $ 1,267 $ 256 $ 1,523 $ 1,218 $ 299 $ 1,517 The changes to landfill and environmental remediation liabilities for the years ended December31, 2008 and 2009 are reflected in the table below (in millions): Environmental Landfill Remediation December31, 2007 $ 1,178 $ 284 Obligations incurred and capitalized 51 Obligations settled (72 ) (38 ) Interest accretion 77 8 Revisions in cost estimates and interest rate assumptions(a) (13 ) 49 Acquisitions, divestitures and other adjustments (3 ) (4 ) December31, 2008 1,218 299 Obligations incurred and capitalized 39 Obligations settled (80 ) (43 ) Interest accretion 80 6 Revisions in cost estimates and interest rate assumptions(a) 5 (7 ) Acquisitions, divestitures and other adjustments 5 1 December31, 2009 $ 1,267 $ 256 (a) The amounts reported for our environmental remediation liabilities include the impacts of revisions in the risk-free discount rates used to measure these obligations. The significant fluctuations in the applicable discount rates during the reported periods and the effects of those changes are discussed in Note3. Our recorded liabilities as of December31, 2009 include the impacts of inflating certain of these costs based on our expectations for the timing of cash settlement and of discounting certain of these costs to present value. Anticipated payments of currently identified environmental remediation liabilities as measured in current dollars are $41million in 2010; $36million in 2011; $23million in 2012; $17million in 2013; $14million in 2014; and $146million thereafter. At several of our landfills, we provide financial assurance by depositing cash into restricted trust funds or escrow accounts for purposes of settling closure, post-closure and environmental remediation obligations. The fair value of these escrow accounts and trust funds was $231mi |
Property and Equipment
Property and Equipment | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Property and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment at December 31 consisted of the following (in millions): 2009 2008 Land $ 632 $ 606 Landfills 12,301 11,716 Vehicles 3,660 3,683 Machinery and equipment 3,251 3,079 Containers 2,264 2,272 Buildings and improvements 2,745 2,635 Furniture, fixtures and office equipment 682 684 25,535 24,675 Less accumulated depreciation on tangible property and equipment (7,546 ) (7,220 ) Less accumulated landfill airspace amortization (6,448 ) (6,053 ) $ 11,541 $ 11,402 Depreciation and amortization expense, including amortization expense for assets recorded as capital leases, was comprised of the following for the years ended December 31 (in millions): 2009 2008 2007 Depreciation of tangible property and equipment $ 779 $ 785 $ 796 Amortization of landfill airspace 358 429 440 Depreciation and amortization expense $ 1,137 $ 1,214 $ 1,236 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets Goodwill was $5,632million as of December31, 2009 compared with $5,462million as of December31, 2008. The $170million increase in our goodwill during 2009 was primarily related to consideration paid for acquisitions in excess of net assets acquired of $125million and accounting for foreign currency translation. We incurred no impairment of goodwill as a result of our annual, fourth quarter goodwill impairment tests in 2009, 2008 or 2007. Additionally, we did not encounter any events or changes in circumstances that indicated that an impairment was more likely than not during interim periods in 2009, 2008 or 2007. However, there can be no assurance that goodwill will not be impaired at any time in the future. As previously disclosed, in late 2008, there was a rapid and sharp decline in recyclable commodity prices due to a significant decrease in demand for recyclable commodities, both domestically and internationally. This significant shift in recycling market conditions was analyzed for purposes of our 2008 annual goodwill impairment test, although no impairment was required. Consistent with our expectations, the unprecedented declines in recyclable commodity prices and demand experienced during late 2008 and early 2009 were temporary in nature. Accordingly, we believe that the estimates and assumptions made with respect to the fair value of our recycling operations for our annual goodwill impairment tests in 2008 and 2009 appropriately considered the effects of commodity risks on this business. Our other intangible assets as of December31, 2009 and 2008 were comprised of the following (in millions): Customer Contracts and Covenants Licenses, Customer Not-to- Permits Lists Compete and Other Total December31, 2009 Intangible assets $ 197 $ 63 $ 93 $ 353 Less accumulated amortization (68 ) (29 ) (18 ) (115 ) $ 129 $ 34 $ 75 $ 238 December31, 2008 Intangible assets $ 134 $ 55 $ 72 $ 261 Less accumulated amortization (56 ) (30 ) (17 ) (103 ) $ 78 $ 25 $ 55 $ 158 Additional information related to intangible assets acquired through 2009 business combinations is included in Note19. Amortization expense for other intangible assets was $29million for 2009, $24million for 2008 and $23million for 2007. At December31, 2009, we had $40million of intangible assets that are not subject to amortization, which are primarily operating permits that do not have stated expirations or that |
Debt
Debt | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Debt [Abstract] | |
Debt | 7. Debt The following table summarizes the major components of debt at December 31 (in millions) and provides the maturities and interest rates of each major category as of December31, 2009: 2009 2008 Revolving credit facility (weighted average interest rate of 2.4% at December31, 2008) $ $ 300 Letter of credit facilities Canadian credit facility (weighted average interest rate of 1.3% at December31, 2009 and 3.3% at December31, 2008) 255 242 Senior notes and debentures, maturing through 2039, interest rates ranging from 5.0% to 7.75% (weighted average interest rate of 6.8% at December31, 2009 and 2008) 5,465 4,628 Tax-exempt bonds maturing through 2039, fixed and variable interest rates ranging from 0.2% to 7.4% (weighted average interest rate of 3.5% at December31, 2009 and 3.9% at December31, 2008) 2,749 2,684 Tax-exempt project bonds, principal payable in periodic installments, maturing through 2029, fixed and variable interest rates ranging from 0.3% to 5.4% (weighted average interest rate of 3.1% at December31, 2009 and 4.9% at December31, 2008) 156 220 Capital leases and other, maturing through 2050, interest rates up to 12% 248 252 $ 8,873 $ 8,326 Less current portion 749 835 $ 8,124 $ 7,491 Debt Classification As of December31, 2009, we had (i)$998million of debt maturing within twelve months, consisting primarily of U.S.$255million under our Canadian credit facility and $600million of 7.375%senior notes that mature in August 2010; and (ii)$767million of fixed-rate tax-exempt borrowings subject to re-pricing within the next twelve months. Under accounting principles generally accepted in the United States, this $1,765million of debt must be classified as current unless we have the intent and ability to refinance it on a long-term basis. As discussed below, as of December31, 2009, we had the intent and ability to refinance $1,016million of this debt on a long-term basis. We have classified the remaining $749million as current obligations as of December31, 2009. All of the borrowings outstanding under the Canadian credit facility mature less than one year from the date of issuance, but may be renewed under the terms of the facility, which matures in November 2012. As of December31, 2009, we intend to repay U.S.$57million of the outstanding borrowings under the facility with available cash during the next twelve months and refinance the remaining balance under the terms of the facility. As a result, as of December31, 2009, U.S.$198million of advances under the facility were classified as long-term based on our intent and ability to refinance the obligations on a long-term basis under the terms of the facility. Additionally, we have classified the $767million of tax-exempt bonds subject to re-pricing within twelve months as long-term as of December31, 2009 based on our |
Interest Rate and Foreign Curre
Interest Rate and Foreign Currency Derivatives | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Interest Rate and Foreign Currency Derivatives [Abstract] | |
Interest Rate and Foreign Currency Derivatives | 8. Interest Rate and Foreign Currency Derivatives The following table summarizes the fair values of derivative instruments recorded in our Consolidated Balance Sheets as of December31, 2009 (in millions): Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Interest rate contracts Current other assets $ 13 Interest rate contracts Long-term other assets 32 Total derivative assets $ 45 Foreign exchange contracts Current accrued liabilities $ 18 Total derivative liabilities $ 18 The following table summarizes the fair values of derivative instruments recorded in our Consolidated Balance Sheets as of December31, 2008 (in millions): Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Interest rate contracts Current other assets $ 3 Interest rate contracts Long-term other assets 89 Foreign exchange contracts Current other assets 1 Foreign exchange contracts Long-term other assets 27 Total derivative assets $ 120 For information related to the methods used to measure our derivative assets and liabilities at fair value, refer to Note18. Interest Rate Derivatives Interest Rate Swaps We use interest rate swaps to maintain a portion of our debt obligations at variable market interest rates. As of December31, 2009, we had approximately $5.4billion in fixed-rate senior notes outstanding. The interest payments on $1.1billion, or 20%, of these senior notes have been swapped to variable interest rates to protect the debt against changes in fair value due to changes in benchmark interest rates. As of December31, 2008, we had approximately $4.5billion in fixed-rate senior notes outstanding, of which $2.0billion, or 43%, had been swapped to variable interest rates. The significant terms of our interest rate swap agreements as of December31, 2009 and 2008 are summarized in the table below (in millions): Notional As of Amount Receive Pay Maturity Date December31, 2009 $ 1,100 Fixed 5.00%-7.65% Floating 0.05%-4.64% Through March 15, 2018 December31, 2008 $ 1,950 Fixed 5.00%-7.65% Floating 1.22%-5.82% Through March 15, 2018 The decrease in the notional amount of our interest rate swaps from December31, 2008 to December31, 2009 is due to (i)the scheduled maturity of interest rate swaps with a notional amount of $500million in May 2009; and (ii)our election to terminate interest rate swaps with a notional amount of $350million in December 2009. The terminated interest rate swaps were scheduled to mature in November 2012. Upon termination of the swaps, we received $20million in cash for their fair value plus accrued interest receivable. The associated fair value adjustments to long-term debt will be am |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 9. Income Taxes Provision for Income Taxes Our Provision for income taxes consisted of the following (in millions): Years Ended December31, 2009 2008 2007 Current: Federal $ 407 $ 436 $ 412 State 74 52 33 Foreign 26 31 25 507 519 470 Deferred: Federal (45 ) 126 91 State (35 ) 27 (3 ) Foreign (14 ) (3 ) (18 ) (94 ) 150 70 Provision for income taxes $ 413 $ 669 $ 540 The U.S.federal statutory income tax rate is reconciled to the effective rate as follows: Years Ended December31, 2009 2008 2007 Income tax expense at U.S. federal statutory rate 35.00 % 35.00 % 35.00 % State and local income taxes, net of federal income tax benefit 3.75 3.63 2.62 Non-conventional fuel tax credits (2.54 ) Noncontrolling interests (1.56 ) (0.80 ) (0.92 ) Taxing authority audit settlements and other tax adjustments (2.89 ) (0.99 ) (1.19 ) Nondeductible costs relating to acquired intangibles 0.18 0.79 1.08 Tax rate differential on foreign income (0.24 ) (0.03 ) 0.04 Cumulative effect of change in tax rates (0.49 ) (1.76 ) Utilization of capital loss (4.44 ) Other (1.24 ) (0.37 ) (1.46 ) Provision for income taxes 28.07 % 37.23 % 30.87 % The comparability of our income taxes for the reported periods has been significantly affected by variations in our income before income taxes, tax audit settlements, changes in effective state and Canadian statutory tax rates, utilization of state net operating loss and credit carry-forwards, utilization of a capital loss carry-back and non-conventional fuel tax credits. For financial reporting purposes, income before income taxes showing domestic and foreign sources was as follows (in millions) for the years ended December31, 2009, 2008 and 2007: Years Ended December31, 2009 2008 2007 Domestic $ 1,396 $ 1,693 $ 1,651 Foreign 77 104 98 Income before income taxes $ 1,473 $ 1,797 $ 1,749 |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 10. Employee Benefit Plans Defined Contribution Plans Our Waste Management retirement savings plans are 401(k) plans that cover employees, except those working subject to collective bargaining agreements that do not allow for coverage under such plans. Employees are generally eligible to participate in the plans following a 90-day waiting period after hire and may contribute as much as 25% of their annual compensation, subject to annual contribution limitations established by the IRS. Under our largest retirement savings plan, we match, in cash, 100% of employee contributions on the first 3% of their eligible compensation and match 50% of employee contributions on the next 3% of their eligible compensation, resulting in a maximum match of 4.5%. Both employee and Company contributions vest immediately. Charges to Operating and Selling, general and administrative expenses for our defined contribution plans were $50million in 2009, $59million in 2008 and $54million in 2007. Defined Benefit Plans Certain of the Companys subsidiaries sponsor pension plans that cover employees not covered by the Savings Plan. These employees are members of collective bargaining units. In addition, Wheelabrator Technologies Inc., a wholly-owned subsidiary, sponsors a pension plan for its former executives and former Board members. As of December31, 2009, the combined benefit obligation of these pension plans was $69million, and the plans had $51million of plan assets, resulting in an unfunded benefit obligation for these plans of $18million. In addition, Waste Management Holdings, Inc. and certain of its subsidiaries provided post-retirement health care and other benefits to eligible employees. In conjunction with our acquisition of WMHoldings in July 1998, we limited participation in these plans to participating retired employees as of December31, 1998. The unfunded benefit obligation for these plans was $45million at December31, 2009. Our accrued benefit liabilities for our defined benefit pension and other post-retirement plans are $63million as of December31, 2009 and are included as components of Accrued liabilities and long-term Other liabilities in our Consolidated Balance Sheet. We are a participating employer in a number of trustee-managed multi-employer, defined benefit pension plans for employees who participate in collective bargaining agreements. Contributions of $34million in 2009, $35million in 2008 and $33million in 2007 were charged to operations for our subsidiaries ongoing participation in these defined benefit plans. Our portion of the projected benefit obligation, plan assets and unfunded liability of the multi-employer pension plans are not material to our financial position. Specific benefit levels provided by union pension plans are not negotiated with or known by the employer contributors. Based on our negotiations with collective bargaining units and our review of the plans in which they participate, we may negotiate for the complete or partial withdrawal from one or more of these pension plans. If we elect to withdraw from these plans, we may incur expenses associated with our obligations for unfu |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Financial Instruments We have obtained letters of credit, performance bonds and insurance policies and have established trust funds and issued financial guarantees to support tax-exempt bonds, contracts, performance of landfill closure and post-closure requirements, environmental remediation, and other obligations. Historically, our revolving credit facilities have been used to obtain letters of credit to support our bonding and financial assurance needs. We also have three letter of credit facilities that were established to provide us with additional sources of capacity from which we may obtain letters of credit. These facilities are discussed further in Note7. We obtain surety bonds and insurance policies from an entity in which we have a noncontrolling financial interest. We also obtain insurance from a wholly-owned insurance company, the sole business of which is to issue policies for the parent holding company and its other subsidiaries, to secure such performance obligations. In those instances where our use of financial assurance from entities we own or have financial interests in is not allowed, we generally have available alternative bonding mechanisms. Because virtually no claims have been made against the financial instruments we use to support our obligations, and considering our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our consolidated financial statements. 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 automobile liability, general 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, however, could increase if our insurers were unable to meet their commitments on a timely basis. We have retained a significant portion of the risks related to our automobile, general liability and workers compensation insurance programs. 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 and internal estimates. The estimated accruals for these liabilities could be affected if future occurrences or loss development significantly differ from the assumptions used. As of December31, 2009, our general liability insurance program carried self-insurance exposures of up to $2.5million per incident and our workers compensation insurance program carried self-insurance exposures of up to $5million per inc |
Restructuring
Restructuring | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Restructuring [Abstract] | |
Restructuring | 12. Restructuring 2009 Restructuring In January 2009, we took steps to further streamline our organization by (i)consolidating our Market Areas; (ii)integrating the management of our recycling operations with our other solid waste business; and (iii)realigning our Corporate organization with this new structure in order to provide support functions more efficiently. Our principal operations are managed through our Groups, which are discussed in Note21. Each of our four geographic Groups had been further divided into 45 Market Areas. As a result of our restructuring, the Market Areas were consolidated into 25 Areas. We found that our larger Market Areas generally were able to achieve efficiencies through economies of scale that were not present in our smaller Market Areas, and this reorganization has allowed us to lower costs and to continue to standardize processes and improve productivity. In addition, during the first quarter of 2009, responsibility for the oversight of day-to-day recycling operations at our material recovery facilities and secondary processing facilities was transferred from our Waste Management Recycle America, or WMRA, organization to our four geographic Groups. By integrating the management of our recycling facilities operations with our other solid waste business, we are able to more efficiently provide comprehensive environmental solutions to our customers. In addition, as a result of this realignment, we have significantly reduced the overhead costs associated with managing this portion of our business and have increased the geographic Groups focus on maximizing the profitability and return on invested capital of our business on an integrated basis. This restructuring eliminated over 1,500employee positions throughout the Company. During 2009, we recognized $50million of pre-tax charges associated with this restructuring, of which $41million were related to employee severance and benefit costs. The remaining charges were primarily related to operating lease obligations for property that will no longer be utilized. The following table summarizes the charges recognized in 2009 for this restructuring by each of our reportable segments and our Corporate and Other organizations (in millions): Eastern $ 12 Midwest 11 Southern 10 Western 6 Wheelabrator 1 Corporate and Other 10 Total $ 50 Through December31, 2009, we had paid approximately $36million of the employee severance and benefit costs incurred as a result of this restructuring. The length of time we are obligated to make severance payments varies, with the longest obligation continuing through the fourth quarter of 2010. 2008 Restructuring The $2million of restructuring expenses recognized during 2008 was related to a reorganization of customer service functions in our Western Group and the realignment of certain operations in our Southern Group. 2007 Restructuring In 2007, we restructured certain operations and functions, resulting in the recognition of a charge of $10million. Approximately |
Sheet1
(Income) Expense from Divestitures, Asset Impairments and Unusual Items | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
(Income) Expense from Divestitures, Asset Impairments and Unusual Items [Abstract] | |
(Income) Expense from Divestitures, Asset Impairments and Unusual Items | 13. (Income) Expense from Divestitures, Asset Impairments and Unusual Items The following table summarizes the major components of (Income) expense from divestitures, asset impairments and unusual items for the year ended December 31 for the respective periods (in millions): Years Ended December31, 2009 2008 2007 (Income) expense from divestitures (including held-for-sale impairments) $ $ (33 ) $ (59 ) Asset impairments (excluding held-for-sale impairments) 83 4 12 $ 83 $ (29 ) $ (47 ) (Income) Expense from Divestitures (including held-for-sale impairments) The net gains from divestitures during 2008 and 2007 were a result of our focus on selling underperforming businesses. In 2008, these gains were primarily related to the divestiture of underperforming collection operations in our Southern Group; and in 2007, the gains were related to the divestiture of underperforming collection, transfer and recycling operations in our Eastern, Western and Southern Groups. Asset Impairments (excluding held-for-sale impairments) Through December31, 2008, we had capitalized $70million of accumulated costs associated with the development of our waste and recycling revenue management system. A significant portion of these costs was specifically associated with the purchase of the license of SAPs waste and recycling revenue management software and the efforts required to develop and configure that software for our use. After a failed pilot implementation of the software in one of our smallest Market Areas, the development efforts associated with the SAP revenue management system were suspended in 2007. As disclosed in Note11, in March 2008, we filed suit against SAP and are currently scheduled for trial in May 2010. During 2009, we determined to enhance and improve our existing revenue management system and not pursue alternatives associated with the development and implementation of a revenue management system that would include the licensed SAP software. Accordingly, after careful consideration of the failures of the SAP software, we determined to abandon any alternative that would include the use of the SAP software. The determination to abandon the SAP software as our revenue management system resulted in a non-cash charge of $51million, $49million of which was recognized during the first quarter of 2009 and $2million of which was recognized during the fourth quarter of 2009. We recognized an additional $32million of impairment charges during 2009, $27million of which was recognized by the West Group during the fourth quarter of 2009 to fully impair a landfill in California as a result of a change in our expectations for the future operations of the landfill. The remaining impairment charges were primarily attributable to a charge required to write down certain of our investments in portable self-storage operations to their fair value as a result of our acquisition of a controlling financial intere |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | 14. Accumulated Other Comprehensive Income The components of accumulated other comprehensive income were as follows (in millions): December31, 2009 2008 2007 Accumulated unrealized loss on derivative instruments, net of taxes of $4 for 2009, $12 for 2008, and $13 for 2007 $ (8 ) $ (19 ) $ (20 ) Accumulated unrealized gain (loss) on marketable securities, net of taxes of $1 for 2009, $1 for 2008, and $3 for 2007 2 (2 ) 5 Foreign currency translation adjustments 212 113 240 Funded status of post-retirement benefit obligations, net of taxes of $1 for 2009, $5 for 2008 and $0 for 2007 2 (4 ) 4 $ 208 $ 88 $ 229 |
Capital Stock, Share Repurchase
Capital Stock, Share Repurchases and Dividends | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Capital Stock, Share Repurchases and Dividends [Abstract] | |
Capital Stock, Share Repurchases and Dividends | 15. Capital Stock, Share Repurchases and Dividends Capital Stock As of December31, 2009, we have 486.1million shares of common stock issued and outstanding. We have 1.5billion shares of authorized common stock with a par value of $0.01 per common share. The Board of Directors is authorized to issue preferred stock in series, and with respect to each series, to fix its designation, relative rights (including voting, dividend, conversion, sinking fund, and redemption rights), preferences (including dividends and liquidation) and limitations. We have ten million shares of authorized preferred stock, $0.01par value, none of which is currently outstanding. Share Repurchases In 2007, the maximum amount of capital allocated to our share repurchases and dividend payments by our Board of Directors was $2.1billion. In 2008, our Board of Directors approved a capital allocation program that included the authorization for up to $1.4billion in combined cash dividends and common stock repurchases. Additionally, $184million of the capital allocated to share repurchases in 2007 remained available for 2008 repurchases. In July 2008, we suspended our share repurchases in connection with a proposed acquisition. In the fourth quarter of 2008, we determined that, given the state of the economy and the financial markets, it would be prudent to suspend repurchases for the foreseeable future. As a result, share repurchases made during 2008 were significantly less than that which was authorized. In June 2009, we decided that the improvement in the capital markets and the economic environment supported a decision to resume repurchases of our common stock during the second half of 2009. The following is a summary of activity under our stock repurchase programs for each year presented: Years Ended December31, 2009 2008 2007 Shares repurchased (in thousands) 7,237 12,390 39,946 Per share purchase price $28.06-$33.80 $28.98-$38.44 $33.00-$40.13 Total repurchases (in millions) $226 $410 $1,421 In December 2009, we entered into a plan under SEC Rule10b5-1 to effect market purchases of our common stock in 2010. These common stock repurchases were made in accordance with our Board approved capital allocation program. We repurchased $68 million of our common stock pursuant to the plan, which was completed on February12, 2010. Future share repurchases will be made within the limits approved by our Board of Directors at the discretion of management, and will depend on factors similar to those considered by the Board in making dividend declarations. Dividends Our quarterly dividends have been declared by our Board of Directors and paid in accordance with the capital allocation programs discussed above. Cash dividends declared and paid were $569million in 2009, or $1.16 per common share; $531million in 2008, or $1.08 per common share; and $495million in 2007, or $0.96 per common share. In December 2009, we announced that our Board of Directors expects to increase the per share quarterly dividend from $0.29 to $0.315 for |
Stock-Based Compensation
Stock-Based Compensation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 16. Stock-Based Compensation Employee Stock Purchase Plan We have an Employee Stock Purchase Plan under which employees that have been employed for at least 30days may purchase shares of our common stock at a discount. The plan provides for two offering periods for purchases: January through June and July through December. At the end of each offering period, employees are able to purchase shares of our common stock at a price equal to 85% of the lesser of the market value of the stock on the first and last day of such offering period. The purchases are made through payroll deductions, and the number of shares that may be purchased is limited by IRS regulations. The total number of shares issued under the plan for the offering periods in each of 2009, 2008 and 2007 was approximately 969,000, 839,000 and 713,000, respectively. Including the impact of the January 2010 issuance of shares associated with the July to December 2009 offering period, approximately 2.5million shares remain available for issuance under the plan. Accounting for our Employee Stock Purchase Plan increased annual compensation expense by approximately $6million, or $4million net of tax, for both 2009 and 2008 and by approximately $5million, or $3million net of tax, for 2007. Employee Stock Incentive Plans Pursuant to our stock incentive plan, we have the ability to issue stock options, stock awards and stock appreciation rights, all on terms and conditions determined by the Management Development and Compensation Committee of our Board of Directors. The Companys 2004 Stock Incentive Plan, which authorized the issuance of up to 34million shares of our common stock, terminated by its terms in May 2009, at which time stockholders approved our 2009 Stock Incentive Plan. Under the 2009 Plan, up to 26.2million shares of our common stock are available for issuance. All of our stock-based compensation awards described herein have been made under either our 2004 or 2009 Plan. We currently utilize treasury shares to meet the needs of our equity-based compensation programs under the 2009 Plan and to settle outstanding awards granted pursuant to previous incentive plans. During the three years ended December31, 2009, the Companys long-term incentive plan, or LTIP, has included an annual grant of restricted stock units and performance share units for key employees. Beginning in 2008, the annual LTIP grant made to the Companys senior leadership team, which generally represents the Companys executive officers, has been comprised solely of performance share units. During the reported periods, the Company has also granted restricted stock units to employees working on key initiatives; in connection with new hires and promotions; and to field-based managers. Restricted Stock Units A summary of our restricted stock units is presented in the table below (units in thousands): Years Ended December31, 2009 2008 2007 Weighted Weighted Weighted Average Average Average |
Earnings Per Share
Earnings Per Share | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 17. Earnings Per Share Basic and diluted earnings per share were computed using the following common share data (shares in millions): Years Ended December31, 2009 2008 2007 Number of common shares outstanding at year-end 486.1 490.7 500.1 Effect of using weighted average common shares outstanding 5.1 1.4 17.2 Weighted average basic common shares outstanding 491.2 492.1 517.3 Dilutive effect of equity-based compensation awards, warrants and other contingently issuable shares 2.4 3.3 4.5 Weighted average diluted common shares outstanding 493.6 495.4 521.8 Potentially issuable shares 13.2 15.1 18.2 Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding 0.3 0.8 2.4 |
Fair Value Measurements
Fair Value Measurements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 18. Fair Value Measurements Assets and Liabilities Accounted for at Fair Value Authoritative guidance associated with fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level1 inputs) and the lowest priority to unobservable inputs (Level3 inputs). We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability, including assumptions about risk when appropriate. As of December31, 2009, our assets and liabilities that are measured at fair value on a recurring basis include the following (in millions): Fair Value Measurements Using Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents $ 1,096 $ 1,096 $ $ Available-for-sale securities 308 308 Interest rate derivatives 45 45 Total assets $ 1,449 $ 1,404 $ 45 $ Liabilities: Foreign currency derivatives $ 18 $ $ 18 $ Total liabilities $ 18 $ $ 18 $ Cash and Cash Equivalents Cash equivalents are reflected at fair value in our Consolidated Financial Statements based upon quoted market prices and consist primarily of money market funds that invest in United States government obligations with original maturities of three months or less. Available-for-Sale Securities Available for-sale securities are recorded at fair value based on quoted market prices. These assets include restricted trusts and escrow accounts invested in money market mutual funds, equity-based mutual funds and other equity securities. The cost basis of restricted trusts and escrow accounts invested in equity-based mutual funds and other equity securities was $77million as of December31, 2009 and 2008. Unrealized holding gains and losses on these instruments are recorded as either an increase or decrease to the asset balance and deferred as a component of Accumulated other comprehensive income in the equity section of our Consolidated Balance Sheets. The net unrealized holding gains on these instruments, net of taxes, were $2milli |
Acquisitions and Divestitures
Acquisitions and Divestitures | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions and Divestitures | 19. Acquisitions and Divestitures Acquisitions We continue to pursue the acquisition of businesses that are accretive to our solid waste operations and enhance and expand our existing service offerings. We have seen the greatest opportunities for realizing superior returns from tuck-in acquisitions, which are primarily the purchases of collection operations that enhance our existing route structures and are strategically located near our existing disposal operations. In 2009, we acquired businesses primarily related to our collection operations. Total consideration, net of cash acquired, for acquisitions was $336million, which included $266million in cash payments, a liability for additional cash payments with an estimated fair value of $46million, and assumed liabilities of $24million. The additional cash payments are contingent upon achievement by the acquired businesses of certain negotiated goals, which generally included targeted revenues. At the date of acquisition, our estimated obligations for the contingent cash payments were between $42million and $56million. As of December31, 2009, we had paid $15million of this contingent consideration. The allocation of purchase price was primarily to Property and equipment, which had an estimated fair value of $102million; Other intangible assets, which had an estimated fair value of $105million; and Goodwill of $125million. Goodwill is a result of expected synergies from combining the acquired businesses with our existing operations and is tax deductible. Our 2009 acquisitions included the purchase of the remaining equity interest in one of our portable self-storage investments, increasing our equity interest in this entity from 50% to 100%. As a result of this acquisition, we recognized a $4million loss for the remeasurement of the fair value of our initial equity investment, which was determined to be $5million. This loss was recognized as a component of (Income) expense from divestitures, asset impairments and unusual items in our Statement of Operations. In 2008 and 2007, we completed several acquisitions for a cost, net of cash acquired, of $280million and $90million, respectively. Divestitures The aggregate sales price for divestitures of operations was $1million in 2009, $59million in 2008, and $224million in 2007. The proceeds from these sales were comprised substantially of cash. We recognized net gains on these divestitures of $33million in 2008, and $59million in 2007. The impact to our 2009 income from operations of gains and losses on divestitures was less than $1million. These divestitures were made as part of our initiative to improve or divest certain underperforming and non-strategic operations. |
Variable Interest Entities
Variable Interest Entities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | 20. Variable Interest Entities Following is a description of our financial interests in variable interest entities that we consider significant, including (i)those for which we have determined that we are the primary beneficiary of the entity and, therefore, have consolidated the entity into our financial statements; and (ii)those that represent a significant interest in an unconsolidated entity. As disclosed in Note24, we are in the process of assessing revised guidance from the FASB related to variable interest entities that is effective for the Company January1, 2010. Consolidated Variable Interest Entities Waste-to-Energy LLCs On June30, 2000, two limited liability companies were established to purchase interests in existing leveraged lease financings at three waste-to-energy facilities that we lease, operate and maintain. We own a 0.5% interest in one of the LLCs (LLC I) and a 0.25% interest in the second LLC (LLC II). John Hancock Life Insurance Company owns 99.5% of LLC I and 99.75% of LLC II is owned by LLC I and the CIT Group. In 2000, Hancock and CIT made an initial investment of $167million in the LLCs, which was used to purchase the three waste-to-energy facilities and assume the sellers indebtedness. Under the LLC agreements, the LLCs shall be dissolved upon the occurrence of any of the following events: (i)a written decision of all members of the LLCs; (ii)December31, 2063; (iii)a courts dissolution of the LLCs; or (iv)the LLCs ceasing to own any interest in the waste-to-energy facilities. Income, losses and cash flows of the LLCs are allocated to the members based on their initial capital account balances until Hancock and CIT achieve targeted returns; thereafter, we will receive 80% of the earnings of each of the LLCs and Hancock and CIT will be allocated the remaining 20% based on their respective equity interests. All capital allocations made through December31, 2009 have been based on initial capital account balances as the target returns have not yet been achieved. Our obligations associated with our interests in the LLCs are primarily related to the lease of the facilities. In addition to our minimum lease payment obligations, we are required to make cash payments to the LLCs for differences between fair market rents and our minimum lease payments. These payments are subject to adjustment based on factors that include the fair market value of rents for the facilities and lease payments made through the re-measurement dates. In addition, we may be required under certain circumstances to make capital contributions to the LLCs based on differences between the fair market value of the facilities and defined termination values as provided for by the underlying lease agreements, although we believe the likelihood of the occurrence of these circumstances is remote. We determined that we are the primary beneficiary of the LLCs because our interest in the entities is subject to variability based on changes in the fair market value of the leased facilities, while Hancocks and CITs interests are structured to provide targeted returns based on their respective initial investments. As of Dece |
Segment and Related Information
Segment and Related Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Segment and Related Information [Abstract] | |
Segment and Related Information | 21. Segment and Related Information We currently manage and evaluate our operations primarily through our Eastern, Midwest, Southern, Western and Wheelabrator Groups. These five Groups are presented below as our reportable segments. Our segments provide integrated waste management services consisting of collection, disposal (solid waste and hazardous waste landfills), transfer, waste-to-energy facilities and independent power production plants that are managed by Wheelabrator, recycling services and other services to commercial, industrial, municipal and residential customers throughout the United States and in Puerto Rico and Canada. The operations not managed through our five Groups are presented herein as Other. As a result of the transfer of responsibility for the oversight of day-to-day recycling operations at our material recovery facilities and secondary processing facilities to the management teams of our geographic Groups, we also changed the way we review the financial results of our geographic Groups. Beginning in 2009, the financial results of our material recovery facilities and secondary processing facilities are included as a component of their respective geographic Group and the financial results of our recycling brokerage business and electronics recycling services are included as part of our Other operations. We have reflected the impact of these changes for all periods presented to provide financial information that consistently reflects our current approach to managing our geographic Group operations. Summarized financial information concerning our reportable segments for the respective years ended December 31 is shown in the following table (in millions): Income Gross Intercompany Net from Depreciation Capital Total Operating Operating Operating Operations and Expenditures Assets Revenues Revenues(c) Revenues (d),(e) Amortization (f),(g) (h),(i) 2009 Eastern $ 2,960 $ (533 ) $ 2,427 $ 483 $ 276 $ 216 $ 4,326 Midwest 2,855 (426 ) 2,429 450 261 218 4,899 Southern 3,328 (431 ) 2,897 768 274 242 3,250 Western 3,125 (412 ) 2,713 521 226 195 3,667 Wheelabrator 841 (123 ) 718 235 57 11 2,266 Other(a) 628 (21 ) 607 (136 ) 29 128 1,112 13,737 (1,946 ) 11,791 2,321 1,123 1,010 19,520 |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Quarterly Financial Data (Unaudited) [Abstract] | |
Quarterly Financial Data (Unaudited) | 22. Quarterly Financial Data (Unaudited) The following table summarizes the unaudited quarterly results of operations for 2009 and 2008 (in millions, except per share amounts): First Second Third Fourth Quarter Quarter Quarter Quarter 2009 Operating revenues $ 2,810 $ 2,952 $ 3,023 $ 3,006 Income from operations 372 534 525 456 Consolidated net income 170 267 292 331 Net income attributable to Waste Management, Inc. 155 247 277 315 Basic earnings per common share 0.31 0.50 0.56 0.65 Diluted earnings per common share 0.31 0.50 0.56 0.64 2008 Operating revenues $ 3,266 $ 3,489 $ 3,525 $ 3,108 Income from operations 511 632 632 459 Consolidated net income 248 331 323 226 Net income attributable to Waste Management, Inc. 241 318 310 218 Basic earnings per common share 0.49 0.65 0.63 0.44 Diluted earnings per common share 0.48 0.64 0.63 0.44 Basic and diluted earnings per common share for each of the quarters presented above is based on the respective weighted average number of common and dilutive potential common shares outstanding for each quarter and the sum of the quarters may not necessarily be equal to the full year basic and diluted earnings per common share amounts. From time to time, our operating results are significantly affected by unusual or infrequent transactions or events. The following significant and unusual items have affected the comparison of our operating results during the periods presented: First Quarter 2009 Income from operations was positively affected by the recognition of a $10million favorable adjustment to Operating expenses due to an increase from 2.25% to 2.75% in the discount rate used to estimate the present value of our environmental remediation obligations. This reduction to Operating expenses resulted in a corresponding increase in Net income attributable to noncontrolling interests of $2million. The discount rate adjustment increased the quarters Net income attributable to Waste Management, Inc. by $5million, or $0.01 per diluted share. Income from operations was negatively affected by a non-cash charge of $49million related to the abandonment of the SAP waste and recycling revenue management software, which reduced Net income attributable to Waste Management, Inc. by $30million, or $0.06 per diluted share. Additionally, we recognized $38million of charges related to our January 2009 restructuring, which reduced Net income attributable to Waste Management, Inc. by |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Condensed Consolidating Financial Statements [Abstract] | |
Condensed Consolidating Financial Statements | 23. Condensed Consolidating Financial Statements WMHoldings has fully and unconditionally guaranteed all of WMIs senior indebtedness. WMI has fully and unconditionally guaranteed all of WMHoldings senior indebtedness. None of WMIs other subsidiaries have guaranteed any of WMIs or WMHoldings 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 December31, 2009 WM Non-Guarantor WMI Holdings Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,093 $ $ 47 $ $ 1,140 Other current assets 24 1 1,845 1,870 1,117 1 1,892 3,010 Property and equipment, net 11,541 11,541 Investments in and advances to affiliates 10,174 12,770 2,303 (25,247 ) Other assets 62 17 6,524 6,603 Total assets $ 11,353 $ 12,788 $ 22,260 $ (25,247 ) $ 21,154 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 580 $ 35 $ 134 $ $ 749 Accounts payable and other current liabilities 90 17 2,045 2,152 670 52 2,179 2,901 Long-term debt, less current portion 4,398 601 3,125 8,124 Other liabilities 3,538 3,538 Total liabilities 5,068 653 8,842 14,563 Equity: Stockholders equity 6,285 12,135 13,112 (25,247 ) 6,285 Noncontrolling interests 306 306 6,285 12,135 13,418 (25,247 ) 6,591 Total liabilities and equity $ 11,353 $ 12,788 $ 22,260 $ (25,247 ) $ 21,154 December31, 2008 WM Non-Guarantor WMI |
New Accounting Pronouncements
New Accounting Pronouncements (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
New Accounting Pronouncements (Unaudited) [Abstract] | |
Description of new accounting pronouncements not yet adopted | 24. New Accounting Pronouncements (Unaudited) Consolidation of Variable Interest Entities In June 2009, the FASB issued revised authoritative guidance associated with the consolidation of variable interest entities. This revised guidance replaces the current quantitative-based assessment for determining which enterprise has a controlling interest in a variable interest entity with an approach that is now primarily qualitative. This qualitative approach focuses on identifying the enterprise that has (i)the power to direct the activities of the variable interest entity that can most significantly impact the entitys performance; and (ii)the obligation to absorb losses and the right to receive benefits from the entity that could potentially be significant to the variable interest entity. This revised guidance also requires an ongoing assessment of whether an enterprise is the primary beneficiary of a variable interest entity rather than a reassessment only upon the occurrence of specific events. The new FASB-issued authoritative guidance associated with the consolidation of variable interest entities is effective for the Company January1, 2010. The change in accounting may either be applied by recognizing a cumulative-effect adjustment to retained earnings on the date of adoption or by retrospectively restating one or more years and recognizing a cumulative-effect adjustment to retained earnings as of the beginning of the earliest year restated. We are currently in the process of assessing the provisions of this revised guidance and have not determined whether the adoption will have a material impact on our consolidated financial statements. Multiple-Deliverable Revenue Arrangements In September 2009, the FASB amended authoritative guidance associated with multiple-deliverable revenue arrangements. This amended guidance addresses the determination of when individual deliverables within an arrangement may be treated as separate units of accounting and modifies the manner in which transaction consideration is allocated across the separately identifiable deliverables. The amendments to authoritative guidance associated with multiple-deliverable revenue arrangements are effective for the Company January1, 2011, although the FASB does permit early adoption of the guidance provided that it is retroactively applied to the beginning of the year of adoption. The new accounting standard may be applied either retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the date of adoption. We are in the process of assessing the provisions of this new guidance and currently do not expect that the adoption will have a material impact on our consolidated financial statements. However, our adoption of this guidance may significantly impact our accounting and reporting for future revenue arrangements to the extent they are material. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule Of Valuation And Qualifying Accounts Disclosure WASTE MANAGEMENT, INC. SCHEDULEII VALUATION AND QUALIFYING ACCOUNTS (In Millions) Accounts Balance Charged Written Balance Beginning of (Credited) to Off/Use of End of Year Income Reserve Other(a) Year 2007 Reserves for doubtful accounts(b) $ 51 $ 43 $ (44 ) $ (3 ) $ 47 2008 Reserves for doubtful accounts(b) $ 47 $ 50 $ (56 ) $ (2 ) $ 39 2009 Reserves for doubtful accounts(b) $ 39 $ 48 $ (57 ) $ 2 $ 32 2007 Merger and restructuring accruals(c) $ 1 $ 10 $ (7 ) $ $ 4 2008 Merger and restructuring accruals(c) $ 4 $ 2 $ (4 ) $ $ 2 2009 Merger and restructuring accruals(c) $ 2 $ 50 $ (42 ) $ $ 10 (a) The Other activity is related to reserves for doubtful accounts of acquired businesses, reserves associated with dispositions of businesses, reserves reclassified to operations held-for-sale, and reclassifications among reserve accounts. (b) Includes reserves for doubtful accounts receivable and notes receivable. (c) Included in accrued liabilities in our Consolidated Balance Sheets. These accruals represent employee severance and benefit costs and transitional costs. |