15.

Condensed Consolidating Financial Statements

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

CONDENSED CONSOLIDATING BALANCE SHEETS

March 31, 2016

(Unaudited)


	WM		WM Holdings		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	104	$	—		$	104
Other current assets		4		6		2,188		—			2,198

		4		6		2,292		—			2,302
Property and equipment, net		—		—		10,796		—			10,796
Investments in and advances to affiliates		18,861		19,285		7,401		(45,547	)		—
Other assets		18		29		7,636		—			7,683

Total assets	$	18,883	$	19,320	$	28,125	$	(45,547	)	$	20,781


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	341	$	—	$	183	$	—		$	524
Accounts payable and other current liabilities		60		4		1,972		—			2,036

		401		4		2,155		—			2,560
Long-term debt, less current portion		5,927		304		2,841		—			9,072
Due to affiliates		7,250		151		—		(7,401	)		—
Other liabilities		15		—		3,824		—			3,839

Total liabilities		13,593		459		8,820		(7,401	)		15,471
Equity:
Stockholders’ equity		5,290		18,861		19,285		(38,146	)		5,290
Noncontrolling interests		—		—		20		—			20

		5,290		18,861		19,305		(38,146	)		5,310

Total liabilities and equity	$	18,883	$	19,320	$	28,125	$	(45,547	)	$	20,781

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

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		23		29		7,305		—			7,357

Total assets	$	18,583	$	18,946	$	27,671	$	(44,833	)	$	20,367


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		5,801		304		2,571		—			8,676
Due to affiliates		7,289		76		—		(7,365	)		—
Other liabilities		24		—		3,790		—			3,814

Total liabilities		13,238		389		8,738		(7,365	)		15,000
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	$	18,583	$	18,946	$	27,671	$	(44,833	)	$	20,367

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2016

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,176		$	—		$	3,176
Costs and expenses		—			—			2,668			—			2,668

Income from operations		—			—			508			—			508

Other income (expense):
Interest expense, net		(74	)		(5	)		(16	)		—			(95	)
Loss on early extinguishment of debt		(1	)		—			—			—			(1	)
Equity in earnings of subsidiaries, net of taxes		304			307			—			(611	)		—
Other, net		—			—			(16	)		—			(16	)

		229			302			(32	)		(611	)		(112	)

Income (loss) before income taxes		229			302			476			(611	)		396
Provision for (benefit from) income taxes		(29	)		(2	)		171			—			140

Consolidated net income (loss)		258			304			305			(611	)		256
Less: Net income (loss) attributable to noncontrolling interests		—			—			(2	)		—			(2	)

Net income (loss) attributable to Waste Management, Inc.	$	258		$	304		$	307		$	(611	)	$	258

Three Months Ended March 31, 2015

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,040		$	—		$	3,040
Costs and expenses		—			6			2,594			—			2,600

Income from operations		—			(6	)		446			—			440

Other income (expense):
Interest expense, net		(79	)		(7	)		(18	)		—			(104	)
Loss on early extinguishment of debt		(498	)		(52	)		—			—			(550	)
Equity in earnings of subsidiaries, net of taxes		231			273			—			(504	)		—
Other, net		—			—			(8	)		—			(8	)

		(346	)		214			(26	)		(504	)		(662	)

Income (loss) before income taxes		(346	)		208			420			(504	)		(222	)
Provision for (benefit from) income taxes		(217	)		(23	)		149			—			(91	)

Consolidated net income (loss)		(129	)		231			271			(504	)		(131	)
Less: Net income (loss) attributable to noncontrolling interests		—			—			(2	)		—			(2	)

Net income (loss) attributable to Waste Management, Inc.	$	(129	)	$	231		$	273		$	(504	)	$	(129	)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	WM			WM Holdings		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended March 31, 2016
Comprehensive income (loss)	$	260		$	304	$	372		$	(611	)	$	325
Less: Comprehensive income (loss) attributable to noncontrolling interests		—			—		(2	)		—			(2	)

Comprehensive income (loss) attributable to Waste Management, Inc.	$	260		$	304	$	374		$	(611	)	$	327

Three Months Ended March 31, 2015
Comprehensive income (loss)	$	(125	)	$	231	$	194		$	(504	)	$	(204	)
Less: Comprehensive income (loss) attributable to noncontrolling interests		—			—		(2	)		—			(2	)

Comprehensive income (loss) attributable to Waste Management, Inc.	$	(125	)	$	231	$	196		$	(504	)	$	(202	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2016

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income (loss)	$	258		$	304		$	305		$	(611	)	$	256
Equity in earnings of subsidiaries, net of taxes		(304	)		(307	)		—			611			—
Other adjustments		(20	)		(6	)		476			—			450

Net cash provided by (used in) operating activities		(66	)		(9	)		781			—			706

Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(537	)		—			(537	)
Capital expenditures		—			—			(317	)		—			(317	)
Proceeds from divestitures of businesses and other assets (net of cash divested)		—			—			13			—			13
Net receipts from restricted trust and escrow accounts and other, net		—			—			(6	)		—			(6	)

Net cash used in investing activities		—			—			(847	)		—			(847	)

Cash flows from financing activities:
New borrowings		914			—			387			—			1,301
Debt repayments		(487	)		—			(160	)		—			(647	)
Premiums paid on early extinguishment of debt		(1	)		—			—			—			(1	)
Common stock repurchases		(250	)		—			—			—			(250	)
Cash dividends		(183	)		—			—			—			(183	)
Exercise of common stock options		18			—			—			—			18
Other, net		7			—			(39	)		—			(32	)
(Increase) decrease in intercompany and investments, net		48			9			(57	)		—			—

Net cash provided by (used in) financing activities		66			9			131			—			206

Effect of exchange rate changes on cash and cash equivalents		—			—			—			—			—

Increase (decrease) in cash and cash equivalents		—			—			65			—			65
Cash and cash equivalents at beginning of period		—			—			39			—			39

Cash and cash equivalents at end of period	$	—		$	—		$	104		$	—		$	104

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)

Three Months Ended March 31, 2015

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Consolidated net income (loss)	$	(129	)	$	231		$	271		$	(504	)	$	(131	)
Equity in earnings of subsidiaries, net of taxes		(231	)		(273	)		—			504			—
Other adjustments		(23	)		(10	)		663			—			630

Net cash provided by (used in) operating activities		(383	)		(52	)		934			—			499

Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(445	)		—			(445	)
Capital expenditures		—			—			(233	)		—			(233	)
Proceeds from divestitures of businesses and other assets (net of cash divested)		—			—			19			—			19
Net receipts from restricted trust and escrow accounts and other, net		—			—			31			—			31

Net cash used in investing activities		—			—			(628	)		—			(628	)

Cash flows from financing activities:
New borrowings		1,781			—			36			—			1,817
Debt repayments		(1,820	)		(144	)		(65	)		—			(2,029	)
Premiums paid on early extinguishment of debt		(502	)		(52	)		—			—			(554	)
Cash dividends		(176	)		—			—			—			(176	)
Exercise of common stock options		39			—			—			—			39
Other, net		5			—			—			—			5
(Increase) decrease in intercompany and investments, net		(11	)		248			(237	)		—			—

Net cash provided by (used in) financing activities		(684	)		52			(266	)		—			(898	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(3	)		—			(3	)

Increase (decrease) in cash and cash equivalents		(1,067	)		—			37			—			(1,030	)
Cash and cash equivalents at beginning of period		1,235			—			72			—			1,307

Cash and cash equivalents at end of period	$	168		$—			$	109		$—			$	277