Condensed Consolidating Financial Statements | 23. 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 December 31, 2015 WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 39 $ — $ 39 Other current assets 3 6 2,297 — 2,306 3 6 2,336 — 2,345 Property and equipment, net — — 10,665 — 10,665 Investments in and advances to affiliates 18,557 18,911 7,365 (44,833 ) — Other assets 55 29 7,325 — 7,409 Total assets $ 18,615 $ 18,946 $ 27,691 $ (44,833 ) $ 20,419 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 41 $ — $ 212 $ — $ 253 Accounts payable and other current liabilities 83 9 2,165 — 2,257 124 9 2,377 — 2,510 Long-term debt, less current portion 5,833 304 2,591 — 8,728 Due to affiliates 7,289 76 — (7,365 ) — Other liabilities 24 — 3,790 — 3,814 Total liabilities 13,270 389 8,758 (7,365 ) 15,052 Equity: Stockholders’ equity 5,345 18,557 18,911 (37,468 ) 5,345 Noncontrolling interests — — 22 — 22 5,345 18,557 18,933 (37,468 ) 5,367 Total liabilities and equity $ 18,615 $ 18,946 $ 27,691 $ (44,833 ) $ 20,419 CONDENSED CONSOLIDATING BALANCE SHEETS (Continued) December 31, 2014 WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,235 $ — $ 72 $ — $ 1,307 Other current assets 5 6 2,208 — 2,219 1,240 6 2,280 — 3,526 Property and equipment, net — — 10,657 — 10,657 Investments in and advances to affiliates 17,312 17,782 6,745 (41,839 ) — Other assets 50 28 7,036 — 7,114 Total assets $ 18,602 $ 17,816 $ 26,718 $ (41,839 ) $ 21,297 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 957 $ — $ 133 $ — $ 1,090 Accounts payable and other current liabilities 86 13 2,296 — 2,395 1,043 13 2,429 — 3,485 Long-term debt, less current portion 4,958 449 2,938 — 8,345 Due to affiliates 6,703 42 — (6,745 ) — Other liabilities 32 — 3,546 — 3,578 Total liabilities 12,736 504 8,913 (6,745 ) 15,408 Equity: Stockholders’ equity 5,866 17,312 17,782 (35,094 ) 5,866 Noncontrolling interests — — 23 — 23 5,866 17,312 17,805 (35,094 ) 5,889 Total liabilities and equity $ 18,602 $ 17,816 $ 26,718 $ (41,839 ) $ 21,297 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2015 Operating revenues $ — $ — $ 12,961 $ — $ 12,961 Costs and expenses(a) — (1 ) 10,917 — 10,916 Income from operations — 1 2,044 — 2,045 Other income (expense): Interest expense, net (298 ) (22 ) (65 ) — (385 ) Loss on early extinguishment of debt (500 ) (52 ) (3 ) — (555 ) Equity in earnings of subsidiaries, net of taxes 1,245 1,289 — (2,534 ) — Other, net — — (45 ) — (45 ) 447 1,215 (113 ) (2,534 ) (985 ) Income before income taxes 447 1,216 1,931 (2,534 ) 1,060 Provision for (benefit from) income taxes (306 ) (29 ) 643 — 308 Consolidated net income 753 1,245 1,288 (2,534 ) 752 Less: Net income (loss) attributable to noncontrolling interests — — (1 ) — (1 ) Net income attributable to Waste Management, Inc. $ 753 $ 1,245 $ 1,289 $ (2,534 ) $ 753 Year Ended December 31, 2014 Operating revenues $ — $ — $ 13,996 $ — $ 13,996 Costs and expenses(a) — (459 ) 12,156 — 11,697 Income from operations — 459 1,840 — 2,299 Other income (expense): Interest expense, net (351 ) (31 ) (84 ) — (466 ) Equity in earnings of subsidiaries, net of taxes 1,510 1,070 — (2,580 ) — Other, net — — (82 ) — (82 ) 1,159 1,039 (166 ) (2,580 ) (548 ) Income before income taxes 1,159 1,498 1,674 (2,580 ) 1,751 Provision for (benefit from) income taxes (139 ) (12 ) 564 — 413 Consolidated net income 1,298 1,510 1,110 (2,580 ) 1,338 Less: Net income (loss) attributable to noncontrolling interests — — 40 — 40 Net income attributable to Waste Management, Inc. $ 1,298 $ 1,510 $ 1,070 $ (2,580 ) $ 1,298 Year Ended December 31, 2013 Operating revenues $ — $ — $ 13,983 $ — $ 13,983 Costs and expenses(a) — — 12,904 — 12,904 Income from operations — — 1,079 — 1,079 Other income (expense): Interest expense, net (355 ) (32 ) (90 ) — (477 ) Equity in earnings of subsidiaries, net of taxes 313 332 — (645 ) — Other, net — — (108 ) — (108 ) (42 ) 300 (198 ) (645 ) (585 ) Income before income taxes (42 ) 300 881 (645 ) 494 Provision for (benefit from) income taxes (140 ) (13 ) 517 — 364 Consolidated net income 98 313 364 (645 ) 130 Less: Net income (loss) attributable to noncontrolling interests — — 32 — 32 Net income attributable to Waste Management, Inc. $ 98 $ 313 $ 332 $ (645 ) $ 98 (a) Includes “Goodwill impairments” and “(Income) expense from divestitures, asset impairments (other than goodwill) and unusual items” as reported in our Consolidated Statements of Operations. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2015 Comprehensive income (loss) $ 762 $ 1,245 $ 1,129 $ (2,534 ) $ 602 Less: Comprehensive income (loss) attributable to noncontrolling interests — — (1 ) — (1 ) Comprehensive income (loss) attributable to Waste Management, Inc. $ 762 $ 1,245 $ 1,130 $ (2,534 ) $ 603 Year Ended December 31, 2014 Comprehensive income (loss) $ 1,300 $ 1,510 $ 977 $ (2,580 ) $ 1,207 Less: Comprehensive income (loss) attributable to noncontrolling interests — — 40 — 40 Comprehensive income (loss) attributable to Waste Management, Inc. $ 1,300 $ 1,510 $ 937 $ (2,580 ) $ 1,167 Year Ended December 31, 2013 Comprehensive income (loss) $ 112 $ 313 $ 311 $ (645 ) $ 91 Less: Comprehensive income (loss) attributable to noncontrolling interests — — 32 — 32 Comprehensive income (loss) attributable to Waste Management, Inc. $ 112 $ 313 $ 279 $ (645 ) $ 59 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2015 Cash flows from operating activities: Consolidated net income (loss) $ 753 $ 1,245 $ 1,288 $ (2,534 ) $ 752 Equity in earnings of subsidiaries, net of taxes (1,245 ) (1,289 ) — 2,534 — Other adjustments 9 (6 ) 1,743 — 1,746 Net cash provided by (used in) operating activities (483 ) (50 ) 3,031 — 2,498 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired — — (554 ) — (554 ) Capital expenditures — — (1,233 ) — (1,233 ) Proceeds from divestitures of businesses and other assets (net of cash divested) — — 145 — 145 Net receipts from restricted trust and escrow accounts and other, net — — 34 — 34 Net cash provided by (used in) investing activities — — (1,608 ) — (1,608 ) Cash flows from financing activities: New borrowings 1,881 — 456 — 2,337 Debt repayments (1,920 ) (145 ) (699 ) — (2,764 ) Premiums paid on early extinguishment of debt (503 ) (52 ) — — (555 ) Common stock repurchases (600 ) — — — (600 ) Cash dividends (695 ) — — — (695 ) Exercise of common stock options 77 — — — 77 Acquisitions of and distributions paid to noncontrolling interests and other 9 — 36 — 45 (Increase) decrease in intercompany and investments, net 999 247 (1,246 ) — — Net cash provided by (used in) financing activities (752 ) 50 (1,453 ) — (2,155 ) Effect of exchange rate changes on cash and cash equivalents — — (3 ) — (3 ) Increase (decrease) in cash and cash equivalents (1,235 ) — (33 ) — (1,268 ) Cash and cash equivalents at beginning of year 1,235 — 72 — 1,307 Cash and cash equivalents at end of year $ — $ — $ 39 $ — $ 39 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued) WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2014 Cash flows from operating activities: Consolidated net income (loss) $ 1,298 $ 1,510 $ 1,110 $ (2,580 ) $ 1,338 Equity in earnings of subsidiaries, net of taxes (1,510 ) (1,070 ) — 2,580 — Other adjustments (36 ) (1 ) 1,030 — 993 Net cash provided by (used in) operating activities (248 ) 439 2,140 — 2,331 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired — — (35 ) — (35 ) Capital expenditures — — (1,151 ) — (1,151 ) Proceeds from divestitures of businesses and other assets (net of cash divested) — 1,618 635 — 2,253 Net receipts from restricted trust and escrow accounts and other, net — — (72 ) — (72 ) Net cash provided by (used in) investing activities — 1,618 (623 ) — 995 Cash flows from financing activities: New borrowings 2,572 — 245 — 2,817 Debt repayments (3,005 ) — (563 ) — (3,568 ) Common stock repurchases (600 ) — — — (600 ) Cash dividends (693 ) — — — (693 ) Exercise of common stock options 93 — — — 93 Acquisitions of and distributions paid to noncontrolling interests and other 5 — (126 ) — (121 ) (Increase) decrease in intercompany and investments, net 3,111 (2,057 ) (1,054 ) — — Net cash provided by (used in) financing activities 1,483 (2,057 ) (1,498 ) — (2,072 ) Effect of exchange rate changes on cash and cash equivalents — — (5 ) — (5 ) Increase (decrease) in cash and cash equivalents 1,235 — 14 — 1,249 Cash and cash equivalents at beginning of year — — 58 — 58 Cash and cash equivalents at end of year $ 1,235 $ — $ 72 $ — $ 1,307 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued) WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2013 Cash flows from operating activities: Consolidated net income (loss) $ 98 $ 313 $ 364 $ (645 ) $ 130 Equity in earnings of subsidiaries, net of taxes (313 ) (332 ) — 645 — Other adjustments (2 ) — 2,327 — 2,325 Net cash provided by (used in) operating activities (217 ) (19 ) 2,691 — 2,455 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired — — (724 ) — (724 ) Capital expenditures — — (1,271 ) — (1,271 ) Proceeds from divestitures of businesses and other assets (net of cash divested) — — 138 — 138 Net receipts from restricted trust and escrow accounts and other, net — — (43 ) — (43 ) Net cash provided by (used in) investing activities — — (1,900 ) — (1,900 ) Cash flows from financing activities: New borrowings 1,140 — 1,092 — 2,232 Debt repayments (1,120 ) — (957 ) — (2,077 ) Common stock repurchases (239 ) — — — (239 ) Cash dividends (683 ) — — — (683 ) Exercise of common stock options 132 — — — 132 Acquisitions of and distributions paid to noncontrolling interests and other 14 — (66 ) — (52 ) (Increase) decrease in intercompany and investments, net 913 19 (932 ) — — Net cash provided by (used in) financing activities 157 19 (863 ) — (687 ) Effect of exchange rate changes on cash and cash equivalents — — (4 ) — (4 ) Increase (decrease) in cash and cash equivalents (60 ) — (76 ) — (136 ) Cash and cash equivalents at beginning of year 60 — 134 — 194 Cash and cash equivalents at end of year $ — $ — $ 58 $ — $ 58 |