14.

Condensed Consolidating Financial Statements

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

CONDENSED CONSOLIDATING BALANCE SHEETS

March 31, 2017

(Unaudited)


	WM			WM Holdings		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—	$	30		$	—		$	30
Other current assets		4			5		2,184			—			2,193

		4			5		2,214			—			2,223
Property and equipment, net		—			—		10,929			—			10,929
Investments in affiliates		20,267			20,686		—			(40,953	)		—
Advances to affiliates		—			—		13,389			(13,389	)		—
Other assets		14			36		7,448			—			7,498

Total assets	$	20,285		$	20,727	$	33,980		$	(54,342	)	$	20,650


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	255		$	—	$	141		$	—		$	396
Accounts payable and other current liabilities		61			4		2,097			—			2,162

		316			4		2,238			—			2,558
Long-term debt, less current portion		6,027			304		2,315			—			8,646
Due to affiliates		13,712			153		5,299			(19,164	)		—
Other liabilities		12			—		3,896			—			3,908

Total liabilities		20,067			461		13,748			(19,164	)		15,112
Equity:
Stockholders’ equity		5,517			20,266		20,687			(40,953	)		5,517
Advances to affiliates		(5,299	)		—		(476	)		5,775			—
Noncontrolling interests		—			—		21			—			21

		218			20,266		20,232			(35,178	)		5,538

Total liabilities and equity	$	20,285		$	20,727	$	33,980		$	(54,342	)	$	20,650

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)

December 31, 2016


	WM			WM Holdings		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—	$	32		$	—		$	32
Other current assets		5			5		2,334			—			2,344

		5			5		2,366			—			2,376
Property and equipment, net		—			—		10,950			—			10,950
Investments in affiliates		19,924			20,331		—			(40,255	)		—
Investments to affiliates		—			—		13,000			(13,000	)		—
Other assets		14			30		7,489			—			7,533

Total assets	$	19,943		$	20,366	$	33,805		$	(53,255	)	$	20,859


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	269		$	—	$	148		$	—		$	417
Accounts payable and other current liabilities		81			9		2,287			—			2,377

		350			9		2,435			—			2,794
Long-term debt, less current portion		6,229			304		2,360			—			8,893
Due to affiliates		13,350			128		5,299			(18,777	)		—
Other liabilities		16			—		3,836			—			3,852

Total liabilities		19,945			441		13,930			(18,777	)		15,539
Equity:
Stockholders’ equity		5,297			19,925		20,330			(40,255	)		5,297
Advances to affiliates		(5,299	)		—		(478	)		5,777			—
Noncontrolling interests		—			—		23			—			23

		(2	)		19,925		19,875			(34,478	)		5,320

Total liabilities and equity	$	19,943		$	20,366	$	33,805		$	(53,255	)	$	20,859

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2017

(Unaudited)


	WM			WM Holdings			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenues	$	—		$	—		$	3,440		$	—		$	3,440
Costs and expenses		—			—			2,882			—			2,882

Income from operations		—			—			558			—			558

Other income (expense):
Interest expense, net		(74	)		(5	)		(13	)		—			(92	)
Equity in earnings of subsidiaries, net of tax expense		343			346			—			(689	)		—
Other, net		—			—			(32	)		—			(32	)

		269			341			(45	)		(689	)		(124	)

Income before income taxes		269			341			513			(689	)		434
Income tax expense (benefit)		(29	)		(2	)		168			—			137

Consolidated net income		298			343			345			(689	)		297
Less: Net loss attributable to noncontrolling interests		—			—			(1	)		—			(1	)

Net income attributable to Waste Management, Inc.	$	298		$	343		$	346		$	(689	)	$	298

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	)
Equity in earnings of subsidiaries, net of tax expense		304			307			—			(611	)		—
Other, net		(1	)		—			(16	)		—			(17	)

		229			302			(32	)		(611	)		(112	)

Income before income taxes		229			302			476			(611	)		396
Income tax expense (benefit)		(29	)		(2	)		171			—			140

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

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

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	WM		WM Holdings		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended March 31, 2017
Comprehensive income	$	300	$	343	$	357		$	(689	)	$	311
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(1	)		—			(1	)

Comprehensive income attributable to Waste Management, Inc.	$	300	$	343	$	358		$	(689	)	$	312

Three Months Ended March 31, 2016
Comprehensive income	$	260	$	304	$	372		$	(611	)	$	325
Less: Comprehensive loss attributable to noncontrolling interests		—		—		(2	)		—			(2	)

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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2017

(Unaudited)


	WM(a)		WM Holdings(a)		Non-Guarantor Subsidiaries(a)			Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	721		$	—	$	721
Investing activities		—		—		(340	)		—		(340	)
Financing activities		—		—		(383	)		—		(383	)
Effect of exchange rate changes on cash and cash equivalents		—		—		—			—		—
Intercompany activity		—		—		—			—		—

Increase (decrease) in cash and cash equivalents		—		—		(2	)		—		(2	)
Cash and cash equivalents at beginning of period		—		—		32			—		32

Cash and cash equivalents at end of period	$	—	$	—	$	30		$	—	$	30

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

Three Months Ended March 31, 2016

(Unaudited)


	WM(b)		WM Holdings(b)		Non-Guarantor Subsidiaries(b)			Eliminations		Consolidated
Cash flows provided by (used in):
Operating activities	$	—	$	—	$	732		$	—	$	732
Investing activities		—		—		(847	)		—		(847	)
Financing activities		—		—		180			—		180
Effect of exchange rate changes on cash and cash equivalents		—		—		—			—		—
Intercompany activity		—		—		—			—		—

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

(b)	Cash receipts and payments of WM and WM Holdings are transacted by Non-Guarantor Subsidiaries. We have revised the prior year presentation to reflect all relevant cash flow activities in the Non-Guarantor Subsidiaries column.