(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2009 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 73-1309529 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
1001 Fannin Street, Suite 4000
Houston, Texas (Address of principal executive offices) |
77002
(Zip code) |
Title of Each Class
|
Name of Exchange on Which Registered
|
|
Common Stock, $.01 par value | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Document
|
Incorporated as to
|
|
Proxy Statement for the
2010 Annual Meeting of Stockholders |
Part III |
1
Item 1.
Business.
2
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Years Ended December 31,
2009
2008
2007
$
2,960
$
3,319
$
3,411
2,855
3,267
3,289
3,328
3,740
3,737
3,125
3,387
3,444
841
912
868
628
897
832
(1,946
)
(2,134
)
(2,271
)
$
11,791
$
13,388
$
13,310
Years Ended December 31,
2009
2008
2007
$
7,980
$
8,679
$
8,714
2,547
2,955
3,047
1,383
1,589
1,654
841
912
868
741
1,180
1,135
245
207
163
(1,946
)
(2,134
)
(2,271
)
$
11,791
$
13,388
$
13,310
3
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For commercial and industrial collection services, typically we
have a three-year service agreement. The fees under the
agreements are influenced by factors such as collection
frequency, type of collection equipment we furnish, type and
volume or weight of the waste collected, distance to the
disposal facility, labor costs, cost of disposal and general
market factors. As part of the service, we provide steel
containers to most customers to store their solid waste between
pick-up
dates. Containers vary in size and type according to the needs
of our customers and the restrictions of their communities. Many
are designed to be lifted mechanically and either emptied into a
trucks compaction hopper or directly into a disposal site.
By using these containers, we can service most of our commercial
and industrial customers with trucks operated by only one
employee.
For most residential collection services, we have a contract
with, or a franchise granted by, a municipality,
homeowners association or some other regional authority
that gives us the exclusive right to service all or a portion of
the homes in an area. These contracts or franchises are
typically for periods of one to five years. We also provide
services under individual monthly subscriptions directly to
households. The fees for residential collection are either paid
by the municipality or authority from their tax revenues or
service charges, or are paid directly by the residents receiving
the service.
4
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5
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6
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7
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$
251
1,035
1,848
$
3,134
1,578
371
173
2,122
1,066
16
66
1,148
241
243
$
6,888
(a)
We use surety bonds and insurance policies issued by a
wholly-owned insurance subsidiary, National Guaranty Insurance
Company of Vermont, the sole business of which is to issue
financial assurance to WMI and our subsidiaries. National
Guaranty Insurance Company is authorized to write up to
approximately $1.4 billion in surety bonds or insurance
policies for our closure and post-closure requirements, waste
collection contracts and other business-related obligations.
(b)
We hold a non-controlling financial interest in an entity that
we use to obtain financial assurance. Our contractual agreement
with this entity does not specifically limit the amounts of
surety bonds or insurance that we may obtain, making our
financial assurance under this agreement limited only by the
guidelines and restrictions of surety and insurance regulations.
(c)
WMI has a $2.4 billion revolving credit facility that
matures in August 2011. At December 31, 2009, we had no
outstanding borrowings and $1,578 million of letters of
credit issued and supported by the facility. The unused and
available credit capacity of the facility was $822 million
as of December 31, 2009.
(d)
We have three separate letter of credit facilities, including a
$175 million facility maturing in June 2010; a
$105 million facility maturing June 2013; and a
$100 million facility maturing December 2014. At
December 31, 2009, $371 million of letters of credit
were outstanding under these agreements, leaving an unused and
available capacity of $9 million.
(e)
Our funded trust and escrow accounts generally have been
established to support landfill closure, post-closure and
environmental remediation obligations and our performance under
various operating contracts. Balances maintained in these trust
funds and escrow accounts will fluctuate based on
(i) changes in statutory requirements; (ii) future
deposits made to comply with contractual arrangements;
(iii) the ongoing use of
8
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funds for qualifying activities; (iv) acquisitions or
divestitures of landfills; and (v) changes in the fair
value of the financial instruments held in the trust fund or
escrow accounts. The assets held in our funded trust and escrow
accounts may be drawn and used to meet the obligations for which
the trusts and escrows were established.
(f)
WMI provides financial guarantees on behalf of its subsidiaries
to municipalities, customers and regulatory authorities. They
are provided primarily to support our performance of landfill
closure and post-closure activities.
9
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The Resource Conservation and Recovery Act of 1976, as amended,
regulates handling, transporting and disposing of hazardous and
non-hazardous waste and delegates authority to states to develop
programs to ensure the safe disposal of solid waste. In 1991,
the EPA issued its final regulations under Subtitle D of RCRA,
which set forth minimum federal performance and design criteria
for solid waste landfills. These regulations are typically
implemented by the states, although states can impose
requirements that are more stringent than the Subtitle D
standards. We incur costs in complying with these standards in
the ordinary course of our operations.
The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, which is also known as
Superfund, provides for federal authority to respond directly to
releases or threatened releases of hazardous substances into the
environment that have created actual or potential environmental
hazards. CERCLAs primary means for addressing such
releases is to impose strict liability for cleanup of disposal
sites upon current and former site owners and operators,
generators of the hazardous substances at the site and
transporters who selected the disposal site and transported
substances thereto. Liability under CERCLA is not dependent on
the intentional disposal of hazardous substances; it can be
based upon the release or threatened release, even as a result
of lawful, unintentional and non-negligent action, of hazardous
substances as the term is defined by CERCLA and other applicable
statutes and regulations. Liability may include contribution for
cleanup costs incurred by a defendant in a CERCLA civil action
or by an entity that has previously resolved its liability to
federal or state regulators in an administrative or
judicially-approved settlement. Liability could also include
liability to a PRP that voluntarily expends site
clean-up
costs. Further, liability may include damage to publicly-owned
natural resources. We are subject to potential liability under
CERCLA as an owner or operator of facilities at which hazardous
substances have been disposed or as a generator or transporter
of hazardous substances disposed of at other locations.
The Federal Water Pollution Control Act of 1972, known as the
Clean Water Act, regulates the discharge of pollutants into
streams, rivers, groundwater, or other surface waters from a
variety of sources, including solid and hazardous waste disposal
sites. If run-off from our operations may be discharged into
surface waters, the Clean Water Act requires us to apply for and
obtain discharge permits, conduct sampling and monitoring, and,
under certain circumstances, reduce the quantity of pollutants
in those discharges. In 1990, the EPA issued additional
standards for management of storm water runoff that require
landfills and other waste-handling facilities to obtain storm
water discharge permits. In addition, if a landfill or other
facility discharges wastewater through a sewage system to a
publicly-owned treatment works, the facility must comply with
discharge limits imposed by the treatment works. Also, before
the development or expansion of a landfill can alter or affect
wetlands, a permit may have to be obtained providing
for mitigation or replacement wetlands. The Clean Water Act
provides for civil, criminal and administrative penalties for
violations of its provisions.
The Clean Air Act of 1970, as amended, provides for increased
federal, state and local regulation of the emission of air
pollutants. Certain of our operations are subject to the
requirements of the Clean Air Act, including large municipal
solid waste landfills and large municipal
waste-to-energy
facilities. Standards have also been imposed on manufacturers of
transportation vehicles (including waste collection vehicles).
In 1996 the EPA issued new source performance standards and
emission guidelines controlling landfill gases from new and
existing large landfills. The regulations impose limits on air
emissions from large municipal solid waste landfills, subject
most of our large municipal solid waste landfills to certain
operating permitting requirements under Title V of the
Clean Air Act and, in many instances, require installation of
landfill gas collection and control systems to control emissions
or to treat and utilize landfill gas on or off-site. In general,
controlling emissions involves drilling collection wells into a
landfill and routing the gas to a suitable energy recovery
system or combustion device. We are currently capturing and
utilizing the renewable energy value of landfill gas at 119 of
our solid waste landfills. In January 2003, the EPA issued
additional regulations that required affected landfills to
prepare, by January 2004, startup, shutdown and malfunction
plans to ensure proper operation of gas collection, control and
treatment systems.
10
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The Occupational Safety and Health Act of 1970, as amended,
establishes certain employer responsibilities, including
maintenance of a workplace free of recognized hazards likely to
cause death or serious injury, compliance with standards
promulgated by the Occupational Safety and Health
Administration, and various reporting and record keeping
obligations as well as disclosure and procedural requirements.
Various standards for notices of hazards, safety in excavation
and demolition work and the handling of asbestos, may apply to
our operations. The Department of Transportation and OSHA, along
with other federal agencies, have jurisdiction over certain
aspects of hazardous materials and hazardous waste, including
safety, movement and disposal. Various state and local agencies
with jurisdiction over disposal of hazardous waste may seek to
regulate movement of hazardous materials in areas not otherwise
preempted by federal law.
Item
1A.
Risk
Factors.
11
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projections about accounting and finances;
plans and objectives for the future;
projections or estimates about assumptions relating to our
performance; or
our opinions, views or beliefs about the effects of current or
future events, circumstances or performance.
12
Table of Contents
agencies of federal, state, local or foreign governments seek to
impose liability on us under applicable statutes, sometimes
involving civil or criminal penalties for violations, or to
revoke or deny renewal of a permit we need; and
local communities, citizen groups, landowners or governmental
agencies oppose the issuance of a permit or approval we need,
allege violations of the permits under which we operate or laws
or regulations to which we are subject, or seek to impose
liability on us for environmental damage.
13
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limitations on siting and constructing new waste disposal,
transfer or processing facilities or expanding existing
facilities;
limitations, regulations or levies on collection and disposal
prices, rates and volumes;
limitations or bans on disposal or transportation of
out-of-state
waste or certain categories of waste; or
mandates regarding the disposal of solid waste, including
requirements to recycle rather than landfill certain waste
streams.
14
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15
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16
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Item 1B.
Unresolved
Staff Comments.
Item 2.
Properties.
17
Table of Contents
2009
2008
211
212
26
27
36
34
273
273
345
355
90
98
8
6
16
16
5
5
Contracted
Total
Permitted
Expansion
Disposal
Landfills
Acreage(a)
Acreage(b)
Acreage(c)
Sites
40
30,419
6,406
533
7
75
32,347
9,139
1,390
9
76
38,427
12,395
288
13
42
38,452
8,666
993
7
4
781
299
39
237
140,426
36,905
3,243
36
(a)
Total acreage includes permitted acreage, expansion
acreage, other acreage available for future disposal that has
not been permitted, buffer land and other land owned or leased
by our landfill operations.
(b)
Permitted acreage consists of all acreage at the
landfill encompassed by an active permit to dispose of waste.
(c)
Expansion acreage consists of unpermitted acreage
where the related expansion efforts meet our criteria to be
included as expansion airspace. A discussion of the related
criteria is included within the
Managements Discussion
and Analysis of Financial Condition and Results of
Operations Critical Accounting Estimates and
Assumptions
section included herein.
Item 3.
Legal
Proceedings.
Item 4.
Submission
of Matters to a Vote of Security Holders.
18
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30
125
126
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
High
Low
$
34.64
$
28.10
39.24
33.33
37.34
31.05
33.43
24.51
$
33.99
$
22.10
29.00
25.06
30.80
26.31
34.18
28.28
$
35.00
$
31.30
$100
$104
$129
$118
$124
$131
$100
$105
$121
$128
$ 81
$102
$100
$106
$130
$136
$128
$146
19
Table of Contents
Total Number of
Total
Shares Purchased as
Approximate Maximum
Number of
Average
Part of Publicly
Dollar Value of Shares that
Shares
Price Paid
Announced Plans or
May Yet be Purchased Under
Purchased
per Share(a)
Programs
the Plans or Programs
1,218,000
$
29.93
1,218,000
$
293 million
2,383,900
$
32.22
2,383,900
$
216 million
1,272,900
$
33.22
1,272,900
$
174 million
4,874,800
$
31.91
4,874,800
(a)
This amount represents the weighted average price paid per share
and includes a per share commission paid for all repurchases.
20
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Item 6.
Selected
Financial Data.
Years Ended December 31,
2009(a)
2008(a)
2007(a)
2006
2005
(In millions, except per share amounts)
$
11,791
$
13,388
$
13,310
$
13,363
$
13,074
7,241
8,466
8,402
8,587
8,631
1,364
1,477
1,432
1,388
1,276
1,166
1,238
1,259
1,334
1,361
50
2
10
28
83
(29
)
(47
)
25
68
9,904
11,154
11,056
11,334
11,364
1,887
2,234
2,254
2,029
1,710
(414
)
(437
)
(505
)
(511
)
(570
)
1,473
1,797
1,749
1,518
1,140
413
669
540
325
(90
)
1,060
1,128
1,209
1,193
1,230
66
41
46
44
48
$
994
$
1,087
$
1,163
$
1,149
$
1,182
$
2.02
$
2.21
$
2.25
$
2.13
$
2.11
$
2.01
$
2.19
$
2.23
$
2.10
$
2.09
$
1.16
$
1.08
$
0.96
$
0.66
$
1.02
$
1.16
$
1.08
$
0.96
$
0.88
$
0.80
$
109
$
(701
)
$
(118
)
$
(86
)
$
194
5,870
5,620
5,530
5,413
5,514
21,154
20,227
20,175
20,600
21,135
8,873
8,326
8,337
8,317
8,687
6,285
5,902
5,792
6,222
6,121
6,591
6,185
6,102
6,497
6,402
(a)
For more information regarding these financial data, see the
Managements Discussion and Analysis of Financial
Condition and Results of Operations
section included in this
report. For disclosures associated with the impact of the
adoption of new accounting pronouncements and changes in our
accounting policies on the comparability of this information,
see Note 2 of the Consolidated Financial Statements.
21
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Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
Revenues of $11.8 billion and internal revenue growth from
yield from collection and disposal operations of 2.9%;
Income from operations of $1.9 billion and income from
operations as a percentage of revenue of 16.0%, in spite of the
recognition of $83 million of non-cash impairment charges,
which were primarily a result of (i) our decision to
abandon the SAP software as our revenue management system; and
(ii) a change in expectations for the future operations of
a landfill in California;
Effective tax rate of 28.1% due principally to the favorable
impacts of fourth quarter adjustments to our provision for
income taxes related to the carry-back of a capital loss,
recognition of state net operating losses and tax credits, and
revaluation of deferred taxes due to Canadian tax rate
reductions;
Diluted earnings per share of $2.01; and
Cash flow generated from operating activities of
$2.4 billion and free cash flow of $1.2 billion.
22
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Years Ended
December 31,
2009
2008
$
2,362
$
2,575
(1,179
)
(1,221
)
28
112
$
1,211
$
1,466
23
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24
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Personnel are actively working to obtain land use and local,
state or provincial approvals for an expansion of an existing
landfill;
It is likely that the approvals will be received within the
normal application and processing time periods for approvals in
the jurisdiction in which the landfill is located;
We have a legal right to use or obtain land to be included in
the expansion plan;
There are no significant known technical, legal, community,
business, or political restrictions or similar issues that could
impair the success of such expansion;
Financial analysis has been completed, and the results
demonstrate that the expansion has a positive financial and
operational impact; and
Airspace and related costs, including additional closure and
post-closure costs, have been estimated based on conceptual
design.
25
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26
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Managements judgment and experience in remediating our own
and unrelated parties sites;
Information available from regulatory agencies as to costs of
remediation;
The number, financial resources and relative degree of
responsibility of other PRPs who may be liable for remediation
of a specific site; and
The typical allocation of costs among PRPs unless the actual
allocation has been determined.
27
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Years Ended December 31,
2009
2008
2007
$
2,960
$
3,319
$
3,411
2,855
3,267
3,289
3,328
3,740
3,737
3,125
3,387
3,444
841
912
868
628
897
832
(1,946
)
(2,134
)
(2,271
)
$
11,791
$
13,388
$
13,310
28
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Years Ended December 31,
2009
2008
2007
$
7,980
$
8,679
$
8,714
2,547
2,955
3,047
1,383
1,589
1,654
841
912
868
741
1,180
1,135
245
207
163
(1,946
)
(2,134
)
(2,271
)
$
11,791
$
13,388
$
13,310
Period-to-Period
Period-to-Period
Change
Change
2009 vs. 2008
2008 vs. 2007
As a % of
As a % of
Total
Total
Amount
Company(a)
Amount
Company(a)
$
(528
)
(3.9
)%
$
644
4.9
%
(1,078
)
(8.1
)
(557
)
(4.2
)
(1,606
)
(12.0
)
87
0.7
97
0.7
117
0.9
(37
)
(0.2
)
(130
)
(1.0
)
(51
)
(0.4
)
4
$
(1,597
)
(11.9
)%
$
78
0.6
%
(a)
Calculated by dividing the amount of current year increase or
decrease by the prior years total company revenue
($13,388 million and $13,310 million for 2009 and
2008, respectively) adjusted to exclude the impacts of current
year divestitures ($37 million and $130 million for
2009 and 2008, respectively).
(b)
The amounts reported herein represent the changes in our revenue
attributable to average yield for the total Company. We analyze
the changes in average yield in terms of related business
revenues in order to differentiate the changes in yield
attributable to our pricing strategies from the changes that are
caused by market-driven price changes in commodities. The
following table summarizes changes in revenues from average
yield on a related-business basis:
29
Table of Contents
Period-to-Period
Period-to-Period
Change
Change
2009 vs. 2008
2008 vs. 2007
As a % of
As a % of
Related
Related
Amount
Business(i)
Amount
Business(i)
$
321
3.0
%
$
347
3.2
%
2
0.5
3
0.7
323
2.9
350
3.1
(447
)
(36.3
)
81
6.9
(76
)
(21.3
)
24
7.1
(328
)
(46.5
)
189
36.5
$
(528
)
(3.9
)
$
644
4.9
(i)
Calculated by dividing the increase or decrease for the current
year by the prior-years related business revenue, adjusted
to exclude the impacts of divestitures for the current year
($37 million and $130 million for 2009 and 2008,
respectively). The table below summarizes the related business
revenues for each year, adjusted to exclude the impacts of
divestitures:
Denominator
2009
2008
$
10,622
$
10,715
434
431
11,056
11,146
1,233
1,180
356
336
706
518
$
13,351
$
13,180
(ii)
Average revenue growth from yield from Collection and
disposal excludes all electricity-related revenues
generated by our Wheelabrator Group, which are reported as
Electricity revenues. Before 2009, we reported
electricity-related revenues from Wheelabrators IPPs as
Electricity and electricity-related revenues from
Wheelabrators
waste-to-energy
facilities in
Waste-to-energy.
Beginning in 2009, all of Wheelabrators
electricity-related revenues are included in
Electricity and only the disposal revenues are
included in
Waste-to-energy
disposal. We have reflected the impact of this change for
all years presented to provide information that consistently
reflects our current approach.
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31
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32
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33
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Period-to-
Period-to-
2009
Period Change
2008
Period Change
2007
$
2,260
$
(160
)
(6.6
)%
$
2,420
$
8
0.3
%
$
2,412
937
(111
)
(10.6
)
1,048
(100
)
(8.7
)
1,148
1,033
(41
)
(3.8
)
1,074
(5
)
(0.5
)
1,079
700
(201
)
(22.3
)
901
(1
)
(0.1
)
902
488
(324
)
(39.9
)
812
43
5.6
769
414
(301
)
(42.1
)
715
134
23.1
581
578
(30
)
(4.9
)
608
6
1.0
602
222
(69
)
(23.7
)
291
30
11.5
261
211
2
1.0
209
(8
)
(3.7
)
217
398
10
2.6
388
(43
)
(10.0
)
431
$
7,241
$
(1,225
)
(14.5
)%
$
8,466
$
64
0.8
%
$
8,402
When comparing 2009 with 2008, the cost declines were generally
a result of (i) headcount and overtime reductions related
to volume declines; (ii) effects of foreign currency
translation; (iii) a benefit from the restructuring we
initiated in January of 2009, although most of these savings are
reflected in our selling, general and administrative expenses;
and (iv) cost savings provided by our operational
improvement initiatives. These cost savings have been offset, in
part, by higher hourly wages due to merit increases; and
(ii) increased accrued bonus expense as our performance
against targets established by our annual incentive plans was
stronger than it had been in 2008.
When comparing 2008 with 2007, wages increased due to annual
merit adjustments, although these higher costs were more than
offset by headcount reductions due to operational efficiencies
and divestitures. We experienced additional overtime and other
labor costs due to severe winter weather conditions during the
first quarter of 2008 in our Midwest Group. Our accrued bonus
expenses were lower in 2008 because our performance against
targets established by our incentive plans was not as strong as
it had been in 2007.
The comparability of our labor and related benefits costs for
the periods presented has also been affected by costs incurred
for the resolution of labor disputes with certain collective
bargaining units. Such costs increased our 2009 expense by
$9 million and our 2008 expense by $42 million. The
costs incurred during 2009 and 2008 were primarily associated
with the withdrawal of certain bargaining units from underfunded
multi-employer pension plans.
34
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In 2009, we had a significant increase in the property taxes
assessed for one of our
waste-to-energy
facilities.
In 2008 and 2007, we had relatively higher gains recognized on
the sales of assets due to our focus on identifying and selling
under-utilized assets in order to increase our efficiency.
In 2007, our Western Group incurred Other operating
expenses of $33 million for security, labor, lodging,
travel and other costs incurred as a result of labor disruptions
in Oakland and Los Angeles, California.
In 2007, we incurred $21 million of lease termination costs
associated with the purchase of one of our independent power
production plants that had previously been operated through a
lease agreement.
Period-to-
Period-to-
2009
Period Change
2008
Period Change
2007
$
775
$
(78
)
(9.1
)%
$
853
$
18
2.2
%
$
835
167
(1
)
(0.6
)
168
8
5.0
160
54
(3
)
(5.3
)
57
8
16.3
49
368
(31
)
(7.8
)
399
11
2.8
388
$
1,364
$
(113
)
(7.7
)%
$
1,477
$
45
3.1
%
$
1,432
35
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36
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Period-to-
Period-to-
Period
Period
2009
Change
2008
Change
2007
$
779
$
(6
)
(0.8
)%
$
785
$
(11
)
(1.4
)%
$
796
358
(71
)
(16.6
)
429
(11
)
(2.5
)
440
29
5
20.8
24
1
4.3
23
$
1,166
$
(72
)
(5.8
)%
$
1,238
$
(21
)
(1.7
)%
$
1,259
37
Table of Contents
Years Ended December 31,
2009
2008
2007
$
$
(33
)
$
(59
)
83
4
12
$
83
$
(29
)
$
(47
)
38
Table of Contents
Period-to-
Period-to-
Period
Period
2009
Change
2008
Change
2007
$
483
$
(40
)
(7.6
)%
$
523
$
(27
)
(4.9
)%
$
550
450
(25
)
(5.3
)
475
(49
)
(9.4
)
524
768
(104
)
(11.9
)
872
46
5.6
826
521
(91
)
(14.9
)
612
(6
)
(1.0
)
618
235
(88
)
(27.2
)
323
31
10.6
292
(136
)
(76
)
*
(60
)
(22
)
*
(38
)
(434
)
77
(15.1
)
(511
)
7
(1.4
)
(518
)
$
1,887
$
(347
)
(15.5
)%
$
2,234
$
(20
)
(0.9
)%
$
2,254
*
Percentage change does not provide a meaningful comparison.
During 2009 and 2008, each Group experienced declines in
revenues due to lower volumes, resulting in decreased income
from operations. The volume declines were generally the result
of the significant downturn in the overall economic environment,
particularly in our industrial collection line of business,
which has been affected by the sharp decline in residential and
commercial construction across the United States.
Significantly lower recycling commodity prices in 2009 as
compared with 2008 had an unfavorable effect on each of the four
geographic Groups results. During the fourth quarter of
2008, commodity prices dropped sharply from the prices we
experienced throughout 2007 and the first nine months of 2008.
This decline was a result of a significant decrease in the
demand for commodities both domestically and internationally.
The resulting near-historic low prices and reduced demand
carried into 2009 and, although prices have steadily recovered,
they remained significantly below the levels of the prior two
years. When comparing 2008 to 2007, the significant decline in
commodity prices that occurred during the fourth quarter of 2008
resulted in operating losses that more than offset the increases
in operating income generated during the first nine months of
2008.
During 2009, we recorded $50 million of charges associated
with our January 2009 restructuring. During 2008 and 2007, we
recorded restructuring charges of $2 million and
$10 million, respectively. Refer to Note 12 of our
Consolidated Financial Statements for information related to the
impact of these charges on each of our reportable segments.
39
Table of Contents
40
Table of Contents
the recognition of $34 million of favorable adjustments
during 2009 by our closed sites management group due to
increases in U.S. Treasury rates used to estimate the
present value of our environmental remediation obligations and
environmental remediation recovery assets, while in 2008 and
2007, the same group recognized charges to landfill operating
costs of $32 million and $8 million, respectively, due
to declines in U.S. Treasury rates during those periods;
a significant decline in Selling, general and
administrative expenses in 2009 resulting from workforce
reductions associated with the January 2009 restructuring,
increased efforts to reduce our controllable spending and lower
equity compensation costs;
$51 million of non-cash abandonment charges recognized
during 2009 associated with the determination that we would not
pursue alternatives associated with the development and
implementation of a revenue management system that would include
the licensed SAP software;
2008 cost decreases attributable to lower risk management
expenses due to reduced actuarial projections of claim losses
for workers compensation and auto and general liability
claims and lower bonus expense due to relatively weak
performance against established targets offset, in part, by
costs incurred for a proposed acquisition;
restructuring charges of $9 million in 2009 and
$6 million in 2007; and
employee healthcare coverage expenses in the third quarter of
2007 due to unusually high claims activity.
(Increase) Decrease to Interest Expense Due to Hedge
Years Ended December 31,
2009
2008
2007
$
46
$
8
$
(48
)
19
42
37
$
65
$
50
$
(11
)
(a)
These amounts represent the net of our periodic variable-rate
interest obligations and the swap counterparties
fixed-rate interest obligations. Our variable-rate obligations
are based on a spread from the three-month LIBOR. Three-month
LIBOR rates have varied significantly during the reported
periods. During
41
Table of Contents
2007, the three-month LIBOR exceeded 5.0% for most of the year,
while during 2008 the rate was as high as 4.8% and as low as
1.4% and during 2009 rates were consistently below 1.0% for most
of the year.
(b)
The amortization to interest expense of terminated swap
agreements has decreased due to the maturity of certain
previously hedged senior notes. In addition, in 2008, this
amount included a $10 million net reduction in interest
expense associated with the early retirement of
$244 million of 8.75% senior notes. At
December 31, 2009, $18 million (on a pre-tax basis) of
the carrying value of debt associated with terminated swap
agreements is scheduled to be reclassified as a reduction to
interest expense over the next twelve months.
42
Table of Contents
Utilization of capital loss carry-back
During
2009, we generated a capital loss from the liquidation of a
foreign subsidiary and determined that the capital loss could be
utilized to offset capital gains from prior years (specifically
2006 and 2007). The utilization of this capital loss resulted in
a reduction to our 2009 Provision for income taxes
of $65 million, representing a 4.4 percentage point
reduction in our effective tax rate.
State net operating loss and credit carry-forwards
During 2009 and 2008, we realized state net operating loss and
credit carry-forwards by reducing related valuation allowances,
resulting in a reduction to our Provision for income
taxes for those periods of $35 million and
$3 million, respectively. No corresponding benefit was
recognized in 2007.
Canadian and state effective tax rates
During
2009, the provincial tax rates in Ontario were reduced, which
resulted in a $13 million tax benefit as a result of the
revaluation of the related deferred tax balances. During 2007,
the Canadian federal government enacted tax rate reductions,
which resulted in a $30 million tax benefit for the
revaluation of the related deferred tax balances. We did not
have any comparable adjustments to Canadian rates during 2008.
During 2009, our current state tax rate increased from 6.0% to
6.25% and our deferred state tax rate increased from 5.5% to
5.75%. During 2008, our current state tax rate increased from
5.5% to 6.0%. The increases in these rates was primarily due to
changes in state law.
Tax audit settlements
Excluding the effects
of interest income, the settlement of various tax audits
resulted in reductions in income tax expense of $11 million
for the year ended December 31, 2009, $26 million for
the year ended December 31, 2008 and $40 million for
the year ended December 31, 2007.
Non-conventional fuel tax credits
Through
December 31, 2007, non-conventional fuel tax credits were
derived from our landfills and our investments in two
coal-based, synthetic fuel production facilities. Our income
taxes for the year ended December 31, 2007 included
$50 million of non-conventional fuel tax credits. These tax
credits resulted in a 2.9 percentage point reduction in our
effective tax rate for the year ended December 31, 2007.
Non-conventional fuel tax credits expired at the end of 2007.
43
Table of Contents
December 31, 2009
December 31, 2008
Remaining
Remaining
Permitted
Expansion
Total
Permitted
Expansion
Total
Capacity
Capacity
Capacity
Capacity
Capacity
Capacity
4,546
739
5,285
4,456
816
5,272
4,075
726
4,801
3,979
794
4,773
0 to 5
6 to 10
11 to 20
21 to 40
41+
Total
14
11
37
68
81
211
5
4
5
5
7
26
12
5
10
5
4
36
31
20
52
78
92
273
(a)
From an operating perspective, landfills we operate through
lease agreements are similar to landfills we own because we own
the landfills operating permit and will operate the
landfill for the entire lease term, which in many cases is the
life of the landfill. We are usually responsible for the closure
and post-closure obligations of the landfills we lease.
(b)
For operating contracts, the property owner owns the permit and
we operate the landfill for a contracted term, which may be the
life of the landfill. The property owner is generally
responsible for closure and post-closure obligations under our
operating contracts.
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Table of Contents
December 31, 2009
December 31, 2008
Remaining
Remaining
Permitted
Expansion
Total
Permitted
Expansion
Total
Capacity
Capacity
Capacity
Capacity
Capacity
Capacity
3,979
794
4,773
3,787
893
4,680
33
33
20
15
35
83
83
94
94
129
(129
)
228
(228
)
(92
)
(92
)
(107
)
(107
)
26
(22
)
4
51
20
71
4,075
726
4,801
3,979
794
4,773
(a)
Amounts reflected here relate to the combined impacts of
(i) new expansions pursued; (ii) increases or
decreases in the airspace being pursued for ongoing expansion
efforts; (iii) adjustments for differences between the
airspace being pursued and airspace granted; and
(iv) decreases due to decisions to no longer pursue
expansion permits.
(b)
We received expansion permits at ten of our landfills during
2009 and 28 of our landfills during 2008, demonstrating our
continued success in working with municipalities and regulatory
agencies to expand the disposal capacity of our existing
landfills.
(c)
Changes in engineering estimates can result in changes to the
estimated available remaining capacity of a landfill or changes
in the utilization of such landfill capacity, affecting the
number of tons that can be placed in the future. Estimates of
the amount of waste that can be placed in the future are
reviewed annually by our engineers and are based on a number of
factors, including standard engineering techniques and
site-specific factors such as current and projected mix of waste
type; initial and projected waste density; estimated number of
years of life remaining; depth of underlying waste; anticipated
access to moisture through precipitation or recirculation of
landfill leachate; and operating practices. We continually focus
on improving the utilization of airspace through efforts that
include recirculating landfill leachate where allowed by permit;
optimizing the placement of daily cover materials; and
increasing initial compaction through improved landfill
equipment, operations and training.
2009
2008
# of
Total
Tons
# of
Total
Tons
Sites
Tons
per Day
Sites
Tons
per Day
268
(a)
91,901
337
267
106,731
391
5
1,026
4
6
1,384
5
273
92,927
341
273
108,115
396
4
328
9
882
93,255
(b)
108,997
(b)
(a)
In 2009, we acquired 3 landfills, closed 4 landfills
and resumed operations at one landfill that we had previously
closed.
45
Table of Contents
(b)
These amounts include 1.5 million tons at December 31,
2009 and 2.0 million tons at December 31, 2008 that
were received at our landfills but were used for beneficial
purposes and generally were redirected from the permitted
airspace to other areas of the landfill. Waste types that are
frequently identified for beneficial use include green waste for
composting and clean dirt for
on-site
construction projects.
Accumulated
Cost Basis of
Landfill Airspace
Landfill Assets
Amortization
Landfill Assets
$
11,716
$
(6,053
)
$
5,663
380
380
39
39
35
35
(358
)
(358
)
169
(45
)
124
(38
)
8
(30
)
$
12,301
$
(6,448
)
$
5,853
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Environmental
Landfill
Remediation
$
1,218
$
299
39
(80
)
(43
)
80
6
5
(7
)
5
1
$
1,267
$
256
Years Ended December 31,
2009
2008
2007
$
80
$
77
$
74
(30
)
41
17
69
69
59
23
17
17
80
87
94
$
222
$
291
$
261
the amortization of landfill capital costs, including
(i) costs that have been incurred and capitalized and
(ii) estimated future costs for landfill development and
construction required to develop our landfills to their
remaining permitted and expansion airspace; and
the amortization of asset retirement costs arising from landfill
final capping, closure and post-closure obligations, including
(i) costs that have been incurred and capitalized and
(ii) projected asset retirement costs.
47
Table of Contents
Years Ended December 31,
2009
2008
2007
$
358
$
429
$
440
92
107
114
$
3.90
$
4.01
$
3.86
48
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2009
2008
$
1,140
$
480
$
65
$
123
231
213
35
10
10
$
306
$
381
$
749
$
835
8,124
7,491
$
8,873
$
8,326
$
91
$
150
49
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2009
2008
$
1,578
$
1,803
371
272
173
91
$
2,122
$
2,166
(a)
WMIs $2.4 billion revolving credit facility matures
in August 2011. At December 31, 2009, we had no outstanding
borrowings and $1,578 million of letters of credit issued
and supported by the facility. The unused and available credit
capacity was $822 million at December 31, 2009.
(b)
At December 31, 2009, we have a $175 million letter of
credit facility that expires in June 2010, a $105 million
letter of credit facility that expires in June 2013 and a
$100 million letter of credit facility that expires in
December 2014. At December 31, 2009, no borrowings were
outstanding under these agreements, and we had $9 million
of unused and available capacity.
(c)
These letters of credit are outstanding under various
arrangements that do not obligate the counterparty to provide a
committed capacity.
2009
2008
2007
$
2,362
$
2,575
$
2,439
$
(1,250
)
$
(1,183
)
$
(761
)
$
(457
)
$
(1,256
)
$
(1,946
)
Decrease in earnings
Our income from
operations, excluding depreciation and amortization, decreased
by $419 million on a
year-over-year
basis. However, this earnings decline included the impact of the
following non-cash charges:
The determination to abandon the SAP software as our revenue
management system resulted in non-cash impairment charges of
$51 million
The recognition of a $27 million non-cash charge in the
fourth quarter of 2009 as a result of a change in expectations
for the future operations of a landfill in California.
50
Table of Contents
Change in receivables
There was a significant
decrease in the operating cash flows provided by changes in our
receivables balances, net of effects of acquisitions and
divestitures, when comparing 2009 with 2008. This decrease is
primarily attributable to unusual activity in 2008, including
(i) the significant decrease in sequential quarter revenues
when comparing the fourth quarter of 2008 with the third quarter
of 2008, which was driven by the decline in the demand and
market prices for recyclable commodities; and (ii) the
collection of a $60 million outstanding receivable related
to our investments in synthetic fuel production facilities that
provided us with Section 45K tax credits through 2007.
Decreased income tax payments
Cash paid for
income taxes, net of excess tax benefits associated with
equity-based transactions, was approximately $140 million
lower on a
year-over-year
basis. The comparability of our effective tax rates is discussed
in the
Provision for income taxes
section above.
Decreased interest payments
Cash paid for
interest was approximately $60 million lower on a
year-over-year
basis. This decrease is primarily due to a decline in market
interest rates, which (i) increased the benefits to our
interest costs provided by our active interest rate swap
agreements; and (ii) reduced the interest costs associated
with our variable-rate tax-exempt debt.
Decreased bonus payments
Employee bonus
payments earned in 2008, which were paid in the first quarter of
2009, were lower than the bonus payments earned in 2007 but paid
in 2008 due to the relative strength of our financial
performance against incentive measures in 2007 as compared with
2008. The
year-over-year
decrease in cash bonuses favorably affected the comparison of
our cash flow from operations by approximately $35 million.
Termination of interest rate swaps
In
December 2009, we elected to terminate interest rate swaps with
a notional amount of $350 million that were scheduled to
mature in November 2012. Upon termination of the swaps, we
received $20 million in cash for their fair value plus
accrued interest receivable. The cash proceeds received from the
termination of interest rate swap agreements have been
classified as a change in other assets within Net cash
provided by operating activities in the Consolidated
Statement of Cash Flows.
Accounts payable processes
We continue to
work to improve our working capital management, including
continuing to manage our accounts payable process in a manner
that provides optimal cash management, which has favorably
impacted our
year-over-year
cash flow from operations change by approximately
$20 million.
Earnings decline
Our income from operations,
net of depreciation and amortization, decreased by
$41 million, on a
year-over-year
basis, which negatively affected our cash flow from operations
in 2008.
Receivables
The change in our trade
receivables balances, net of effects of acquisitions and
divestitures, provided a source of cash of approximately
$185 million in 2008. In 2008, our receivables balances
declined primarily due to a decrease in fourth quarter revenues
as compared with the prior year, but also due to improved
efficiency of collections. Additionally, during the third
quarter of 2008, we collected an outstanding receivable related
to our investments in the synthetic fuel production facilities
that provided us with Section 45K tax credits through 2007.
Approximately $60 million of the cash we received
represented a refund of amounts that we paid to the facilities
during 2006 and 2007 for which we did not ultimately realize a
tax benefit, and was reflected as an operating cash inflow.
Increased income tax payments
Cash paid for
income taxes, net of excess tax benefits associated with
equity-based transactions, was approximately $170 million
higher on a
year-over-year
basis, due in large part to an increase in both our taxable
income and our effective tax rate. The comparability of our
effective tax rates is discussed in the
Provision for income
taxes
section above. In addition, the overpayment of income
taxes in 2006 reduced our 2007 tax payments.
51
Table of Contents
Decreased interest payments
Cash paid
for interest was approximately $65 million lower on a
year-over-year
basis. This decline is due primarily to a decline in our
weighted average borrowing rate, which can be attributed to the
maturity of higher rate debt that we refinanced at lower rates
and a decline in market rates.
Accounts payable processes
In 2008, we
began various initiatives to improve our working capital
management, including reviewing our accounts payable process to
ensure vendor payments are made on a basis that results in more
optimal cash management. The changes made to the timing of our
vendor payments favorably impacted our cash flow from operations
on a
year-over-year
basis by approximately $30 million.
Acquisitions
Our spending on acquisitions
increased from $90 million during 2007 to $280 million
during 2008 and to $281 million in 2009 due to an increased
focus on acquisitions and other investments.
Divestitures
Proceeds from divestitures (net
of cash divested) and other sales of assets were
$28 million in 2009, $112 million in 2008, and
$278 million in 2007. Our proceeds from divestitures for
all three years have been driven by the divestiture of
underperforming and non-strategic operations. The decrease in
proceeds from divestitures in 2008 and 2009 was largely a result
of having fewer underperforming operations to sell as part of
our
fix-or-seek-exit
initiative.
Capital expenditures
We used
$1,179 million during 2009 for capital expenditures,
compared with $1,221 million in 2008 and
$1,211 million in 2007.
Net receipts from restricted funds
Net funds
received from our restricted trust and escrow accounts, which
are largely generated from the issuance of tax-exempt bonds for
our capital needs, contributed $196 million to our
investing activities in 2009 compared with $178 million in
2008 and $120 million in 2007.
Purchases and sales of short-term investments
Net sales of short-term investments provided
$184 million of cash in 2007. We used proceeds from the
sale of our short-term investments to provide cash that we used
to fund our common stock repurchases, dividend payments and debt
repayments, which are discussed below. We did not hold any
short-term investments during 2008 or 2009.
Share repurchases and dividend payments
Our
2009, 2008 and 2007 share repurchases and dividend payments
have been made in accordance with capital allocation programs
approved by our Board of Directors.
52
Table of Contents
Proceeds and tax benefits from the exercise of options and
warrants
The exercise of common stock options
and warrants and the related excess tax benefits generated a
total of $24 million of financing cash inflows during 2009
compared with $44 million during 2008 and $168 million
in 2007.
Net debt repayments
Net debt borrowings were
$414 million in 2009, and net debt repayments were
$260 million in 2008 and $256 million in 2007. The
following summarizes our most significant cash borrowings and
debt repayments made during each year (in millions):
Years Ended December 31,
2009
2008
2007
$
$
350
$
300
364
581
644
1,385
594
$
1,749
$
1,525
$
944
$
(310
)
$
(371
)
$
(395
)
(634
)
(680
)
(500
)
(633
)
(300
)
(65
)
(19
)
(52
)
(39
)
(67
)
(61
)
(26
)
(61
)
(107
)
$
(1,335
)
$
(1,785
)
$
(1,200
)
$
414
$
(260
)
$
(256
)
Accrued liabilities for checks written in excess of cash
balances
Changes in our accrued liabilities for
checks written in excess of cash balances are reflected as
Other financing activities in the Consolidated
Statement of Cash Flows. There are significant changes in these
accrued liability balances as of each year-end, which is
generally attributable to the timing of cash deposits.
53
Table of Contents
2010
2011
2012
2013
2014
Thereafter
Total
$
125
$
100
$
96
$
90
$
90
$
1,947
$
2,448
41
36
23
17
14
146
277
166
136
119
107
104
2,093
2,725
985
259
584
174
430
6,358
8,790
88
75
72
58
47
258
598
166
61
53
31
18
278
607
$
1,405
$
531
$
828
$
370
$
599
$
8,987
$
12,720
(a)
Environmental liabilities include final capping, closure,
post-closure and environmental remediation costs. The amounts
included here reflect environmental liabilities recorded in our
Consolidated Balance Sheet as of December 31, 2009 without
the impact of discounting and inflation. Our recorded
environmental liabilities for final capping, closure and
post-closure will increase as we continue to place additional
tons within the permitted airspace at our landfills.
(b)
The amounts reported here represent the scheduled principal
payments related to our long-term debt, excluding related
interest.
(c)
Our debt obligations as of December 31, 2009 include
$767 million of tax-exempt bonds subject to re-pricing
within the next twelve months, which is prior to their scheduled
maturities. If the re-offerings of the bonds are unsuccessful,
then the bonds can be put to us, requiring immediate repayment.
We have classified the anticipated cash flows for these
contractual obligations based on the scheduled maturity of the
borrowing for purposes of this disclosure. For additional
information regarding the classification of these borrowings in
our Consolidated Balance Sheet as of December 31, 2009,
refer to Note 7 to the Consolidated Financial Statements.
(d)
Our recorded debt obligations include non-cash adjustments
associated with discounts, premiums and fair value adjustments
for interest rate hedging activities. These amounts have been
excluded here because they will not result in an impact to our
liquidity in future periods.
(e)
Our unrecorded obligations represent operating lease obligations
and purchase commitments from which we expect to realize an
economic benefit in future periods. We have also made certain
guarantees, as discussed in Note 11 to the Consolidated
Financial Statements, that we do not expect to materially affect
our current or future financial position, results of operations
or liquidity.
(f)
Our unconditional purchase obligations are for various
contractual obligations that we generally incur in the ordinary
course of our business. Certain of our obligations are quantity
driven. For these contracts, we have estimated our future
obligations based on the current market values of the underlying
products or services. Accordingly, the amounts reported in the
table are not necessarily indicative of our actual cash flow
obligations. See Note 11 to the Consolidated Financial
Statements for discussion of the nature and terms of our
unconditional purchase obligations.
(g)
In December 2009, we entered into a plan under SEC
Rule 10b5-1
to effect market purchases of our common stock. We have included
$58 million of common stock repurchases in our 2010
contractual obligations because this amount represents the
minimum amount of common stock that could be repurchased under
the terms of the plan. We repurchased $68 million of our common
stock pursuant to the plan, which was completed on
February 12, 2010.
54
Table of Contents
(h)
In August 2009, we entered into an agreement to purchase a 40%
equity investment in Shanghai Environment Group, a subsidiary of
Shanghai Chengtou Holding, for approximately $140 million.
As of December 31, 2009, our investment was subject to
regulatory approval. Accordingly, the impact of this cash
investment was excluded from amounts reported herein. The
Ministry of Commerce of the Peoples Republic of China
approved the transaction in January 2010 and we currently expect
the transaction to close during the first half of 2010.
55
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Item 7A.
Quantitative
and Qualitative Disclosure About Market Risk.
56
Table of Contents
57
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Item 8.
Financial
Statements and Supplementary Data.
Page
59
60
62
63
64
65
67
58
Table of Contents
OVER FINANCIAL REPORTING
59
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60
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61
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CONSOLIDATED BALANCE SHEETS
(In Millions, Except Share and Par Value
Amounts)
December 31,
2009
2008
$
1,140
$
480
1,408
1,463
119
147
110
110
116
39
117
96
3,010
2,335
11,541
11,402
5,632
5,462
238
158
733
870
$
21,154
$
20,227
LIABILITIES AND EQUITY
$
567
$
716
1,128
1,034
457
451
749
835
2,901
3,036
8,124
7,491
1,509
1,484
1,357
1,360
672
671
14,563
14,042
6
6
4,543
4,558
6,053
5,631
208
88
(4,525
)
(4,381
)
6,285
5,902
306
283
6,591
6,185
$
21,154
$
20,227
62
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CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except per Share
Amounts)
Years Ended December 31,
2009
2008
2007
$
11,791
$
13,388
$
13,310
7,241
8,466
8,402
1,364
1,477
1,432
1,166
1,238
1,259
50
2
10
83
(29
)
(47
)
9,904
11,154
11,056
1,887
2,234
2,254
(426
)
(455
)
(521
)
13
19
47
(2
)
(4
)
(35
)
1
3
4
(414
)
(437
)
(505
)
1,473
1,797
1,749
413
669
540
1,060
1,128
1,209
66
41
46
$
994
$
1,087
$
1,163
$
2.02
$
2.21
$
2.25
$
2.01
$
2.19
$
2.23
$
1.16
$
1.08
$
0.96
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Years Ended December 31,
2009
2008
2007
$
1,060
$
1,128
$
1,209
1,166
1,238
1,259
(94
)
150
70
80
77
74
(30
)
41
17
48
50
43
30
48
37
2
1
39
(13
)
(33
)
(27
)
83
(29
)
(47
)
(4
)
(7
)
(26
)
29
216
(22
)
(4
)
(9
)
6
20
5
5
51
(183
)
(88
)
(62
)
(118
)
(110
)
2,362
2,575
2,439
(281
)
(280
)
(90
)
(1,179
)
(1,221
)
(1,211
)
28
112
278
(1,220
)
1,404
196
178
120
(14
)
28
(42
)
(1,250
)
(1,183
)
(761
)
1,749
1,525
944
(1,335
)
(1,785
)
(1,200
)
(226
)
(410
)
(1,421
)
(569
)
(531
)
(495
)
20
37
142
4
7
26
(50
)
(56
)
(20
)
(50
)
(43
)
78
(457
)
(1,256
)
(1,946
)
5
(4
)
2
660
132
(266
)
480
348
614
$
1,140
$
480
$
348
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Millions, Except Shares in Thousands)
Waste Management, Inc. Stockholders Equity
Accumulated
Other
Additional
Comprehensive
Comprehensive
Common Stock
Paid-In
Retained
Income
Treasury Stock
Noncontrolling
Total
Income
Shares
Amounts
Capital
Earnings
(Loss)
Shares
Amounts
Interests
$
6,497
630,282
$
6
$
4,513
$
4,410
$
129
(96,599
)
$
(2,836
)
$
275
1,209
$
1,209
1,163
46
(34
)
(34
)
(34
)
47
47
47
2
2
(5
)
7
89
89
89
3
3
3
107
107
1,316
$
1,316
(495
)
(495
)
210
30
(2
)
6,067
182
(1,421
)
(39,946
)
(1,421
)
(20
)
(20
)
4
4
11
(1
)
314
10
2
$
6,102
630,282
$
6
$
4,542
$
5,080
$
229
(130,164
)
$
(4,065
)
$
310
1,128
$
1,128
1,087
41
40
40
40
(39
)
(39
)
(39
)
(18
)
(18
)
(7
)
(11
)
(127
)
(127
)
(127
)
(8
)
(8
)
(8
)
(152
)
(152
)
976
$
976
(531
)
(531
)
106
16
(4
)
2,995
94
(410
)
(12,390
)
(410
)
(56
)
(56
)
(1
)
(1
)
(1
)
12
(1
)
$
6,185
630,282
$
6
$
4,558
$
5,631
$
88
(139,547
)
$
(4,381
)
$
283
65
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Waste Management, Inc. Stockholders Equity
Accumulated
Other
Additional
Comprehensive
Comprehensive
Common Stock
Paid-In
Retained
Income
Treasury Stock
Noncontrolling
Total
Income
Shares
Amounts
Capital
Earnings
(Loss)
Shares
Amounts
Interests
$
6,185
630,282
$
6
$
4,558
$
5,631
$
88
(139,547
)
$
(4,381
)
$
283
1,060
$
1,060
994
66
(21
)
(21
)
(21
)
32
32
32
10
10
4
6
99
99
99
6
6
6
126
126
1,186
$
1,186
(569
)
(569
)
64
(15
)
(3
)
2,610
82
(226
)
(7,237
)
(226
)
(50
)
(50
)
1
12
1
$
6,591
630,282
$
6
$
4,543
$
6,053
$
208
(144,162
)
$
(4,525
)
$
306
66
Table of Contents
1.
Business
2.
Accounting
Changes and Reclassifications
67
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68
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3.
Summary
of Significant Accounting Policies
69
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Final Capping
Involves the installation of
flexible membrane liners and geosynthetic clay liners, drainage
and compacted soil layers and topsoil over areas of a landfill
where total airspace capacity has been consumed. Final capping
asset retirement obligations are recorded on a
units-of-consumption
basis as airspace is consumed related to the specific final
capping event with a corresponding increase in the landfill
asset. Each final capping event is accounted for as a discrete
obligation and recorded as an asset and a liability based on
estimates of the discounted cash flows and capacity associated
with each final capping event.
Closure
Includes the construction of the
final portion of methane gas collection systems (when required),
demobilization and routine maintenance costs. These are costs
incurred after the site ceases to accept waste, but before the
landfill is certified as closed by the applicable state
regulatory agency. These costs are accrued as an asset
retirement obligation as airspace is consumed over the life of
the landfill with a corresponding increase in the landfill
asset. Closure obligations are accrued over the life of the
landfill based on estimates of the discounted cash flows
associated with performing closure activities.
Post-Closure
Involves the maintenance and
monitoring of a landfill site that has been certified closed by
the applicable regulatory agency. Generally, we are required to
maintain and monitor landfill sites for a
30-year
period. These maintenance and monitoring costs are accrued as an
asset retirement obligation as airspace is consumed over the
life of the landfill with a corresponding increase in the
landfill asset. Post-closure obligations are accrued over the
life of the landfill based on estimates of the discounted cash
flows associated with performing post-closure activities.
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71
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Remaining Permitted Airspace
Our engineers,
in consultation with third-party engineering consultants and
surveyors, are responsible for determining remaining permitted
airspace at our landfills. The remaining permitted airspace is
determined by an annual survey, which is then used to compare
the existing landfill topography to the expected final landfill
topography.
Expansion Airspace
We also include currently
unpermitted expansion airspace in our estimate of remaining
permitted and expansion airspace in certain circumstances.
First, to include airspace associated with an expansion effort,
we must generally expect the initial expansion permit
application to be submitted within one year, and the final
expansion permit to be received within five years. Second, we
must believe the success of obtaining the expansion permit is
likely, considering the following criteria:
Personnel are actively working to obtain land use and local,
state or provincial approvals for an expansion of an existing
landfill;
It is likely that the approvals will be received within the
normal application and processing time periods for approvals in
the jurisdiction in which the landfill is located;
We have a legal right to use or obtain land to be included in
the expansion plan;
There are no significant known technical, legal, community,
business, or political restrictions or similar issues that could
impair the success of such expansion;
Financial analysis has been completed, and the results
demonstrate that the expansion has a positive financial and
operational impact; and
Airspace and related costs, including additional closure and
post-closure costs, have been estimated based on conceptual
design.
72
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Managements judgment and experience in remediating our own
and unrelated parties sites;
Information available from regulatory agencies as to costs of
remediation;
The number, financial resources and relative degree of
responsibility of other PRPs who may be liable for remediation
of a specific site; and
73
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The typical allocation of costs among PRPs unless the actual
allocation has been determined.
Years Ended December 31,
2009
2008
2007
$
(35
)
$
33
$
8
3.75
%
2.25
%
4.00
%
(a)
In 2009, $9 million of the reduction in
Operating expenses was attributable to
noncontrolling interests and in 2008, $6 million of the
charge to Operating expenses was attributable to
noncontrolling interests.
74
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Useful Lives
3 to 10
10 to 20
3 to 30
5 to 40
up to 50
3 to 10
75
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76
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77
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Interest Rate Derivatives
Our receive
fixed, pay variable interest rate swaps associated with
outstanding fixed-rate senior notes have been designated as fair
value hedges for accounting purposes. Accordingly, derivative
assets are accounted for as an increase in the carrying value of
our underlying debt obligations and derivative liabilities are
accounted for as a decrease in the carrying value of our
underlying debt instruments. These fair value adjustments are
deferred and recognized as an adjustment to interest expense
over the remaining term of the hedged instruments. Treasury
locks and forward-starting swaps executed in 2009 are hedges of
anticipated debt issuances and have been designated as cash flow
hedges for accounting purposes. Unrealized changes in the fair
value of these derivative instruments are recorded in
Accumulated other comprehensive income within the
equity section of our Consolidated
78
Table of Contents
Balance Sheets. The associated balance in other comprehensive
income will be reclassified to earnings as the hedged cash flows
occur. The impacts of our use of interest rate derivatives on
the carrying value of our debt, accumulated other comprehensive
income and interest expense are discussed in Note 8.
Foreign Currency Derivatives
Our foreign
currency derivatives have been designated as cash flow hedges
for accounting purposes, which results in the unrealized changes
in the fair value of the derivative instruments being recorded
in Accumulated other comprehensive income within the
equity section of our Consolidated Balance Sheets. The
associated balance in other comprehensive income is reclassified
to earnings as the hedged cash flows occur. In each of the
periods presented, these derivatives have effectively mitigated
the impacts of the hedged transactions, resulting in immaterial
impacts to our results of operations for the periods presented.
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Years Ended December 31,
Cash paid during the year (in millions) for:
2009
2008
2007
$
416
$
478
$
543
466
603
416
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4.
Landfill
and Environmental Remediation Liabilities
December 31, 2009
December 31, 2008
Environmental
Environmental
Landfill
Remediation
Total
Landfill
Remediation
Total
$
125
$
41
$
166
$
108
$
49
$
157
1,142
215
1,357
1,110
250
1,360
$
1,267
$
256
$
1,523
$
1,218
$
299
$
1,517
Environmental
Landfill
Remediation
$
1,178
$
284
51
(72
)
(38
)
77
8
(13
)
49
(3
)
(4
)
1,218
299
39
(80
)
(43
)
80
6
5
(7
)
5
1
$
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 Note 3.
81
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5.
Property
and Equipment
2009
2008
$
632
$
606
12,301
11,716
3,660
3,683
3,251
3,079
2,264
2,272
2,745
2,635
682
684
25,535
24,675
(7,546
)
(7,220
)
(6,448
)
(6,053
)
$
11,541
$
11,402
2009
2008
2007
$
779
$
785
$
796
358
429
440
$
1,137
$
1,214
$
1,236
6.
Goodwill
and Other Intangible Assets
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Customer
Contracts and
Covenants
Licenses,
Customer
Not-to-
Permits
Lists
Compete
and Other
Total
$
197
$
63
$
93
$
353
(68
)
(29
)
(18
)
(115
)
$
129
$
34
$
75
$
238
$
134
$
55
$
72
$
261
(56
)
(30
)
(17
)
(103
)
$
78
$
25
$
55
$
158
7.
Debt
2009
2008
$
$
300
255
242
5,465
4,628
2,749
2,684
156
220
248
252
$
8,873
$
8,326
749
835
$
8,124
$
7,491
83
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84
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85
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Requirement
December 31,
December 31,
per Facility
2009
2008
> 2.75 to 1
4.3 to 1
4.7 to 1
< 3.5 to 1
2.9 to 1
2.4 to 1
86
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8.
Interest
Rate and Foreign Currency Derivatives
Fair Value
Current other assets
$
13
Long-term other assets
32
$
45
Current accrued liabilities
$
18
$
18
Fair Value
Current other assets
$
3
Long-term other assets
89
Current other assets
1
Long-term other assets
27
$
120
Notional
As of
Amount
Receive
Pay
Maturity Date
$
1,100
Fixed 5.00%-7.65%
Floating 0.05%-4.64%
Through March 15, 2018
$
1,950
Fixed 5.00%-7.65%
Floating 1.22%-5.82%
Through March 15, 2018
87
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Increase in Carrying Value of Debt Due to Hedge
2009
2008
$
32
$
92
59
58
$
91
$
150
Years Ended
Statement of Operations
Gain (Loss) on
Gain (Loss) on
Swap
Fixed-Rate Debt
2009
Interest expense
$
(60
)
$
60
2008
Interest expense
$
120
$
(120
)
2007
Interest expense
$
90
$
(90
)
(Increase) Decrease to Interest Expense Due to Hedge
Years Ended December 31,
2009
2008
2007
$
46
$
8
$
(48
)
19
42
37
$
65
$
50
$
(11
)
(a)
These amounts represent the net of our periodic variable-rate
interest obligations and the swap counterparties
fixed-rate interest obligations. Our variable-rate obligations
are based on a spread from the three-month LIBOR. Three-month
LIBOR rates have varied significantly during the reported
periods. During 2007, the three-month LIBOR exceeded 5.0% for
most of the year, while during 2008 the rate was as high as 4.8%
and as low as 1.4% and during 2009 rates were consistently below
1.0% for most of the year.
(b)
The amortization to interest expense of terminated swap
agreements has decreased due to the maturity of certain
previously hedged senior notes. In addition, in 2008, this
amount included a $10 million net reduction in interest
expense associated with the early retirement of
$244 million of 8.75% senior notes. At
December 31, 2009, $18 million (on a pre-tax basis) of
the carrying value of debt associated with terminated swap
agreements is scheduled to be reclassified as a reduction to
interest expense over the next twelve months.
88
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89
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Amount of Gain or
Amount of Gain or
(Loss) Recognized
(Loss) Reclassified
in OCI on
Statement of
from AOCI into
Years Ended
Derivatives
Operations
Income
(Effective Portion)
(Effective Portion)
2009
$
(47
)
Other income (expense)
$
(47
)
2008
$
65
Other income (expense)
$
72
2007
$
(45
)
Other income (expense)
$
(56
)
9.
Income
Taxes
Years Ended December 31,
2009
2008
2007
$
407
$
436
$
412
74
52
33
26
31
25
507
519
470
(45
)
126
91
(35
)
27
(3
)
(14
)
(3
)
(18
)
(94
)
150
70
$
413
$
669
$
540
90
Table of Contents
Years Ended December 31,
2009
2008
2007
35.00
%
35.00
%
35.00
%
3.75
3.63
2.62
(2.54
)
(1.56
)
(0.80
)
(0.92
)
(2.89
)
(0.99
)
(1.19
)
0.18
0.79
1.08
(0.24
)
(0.03
)
0.04
(0.49
)
(1.76
)
(4.44
)
(1.24
)
(0.37
)
(1.46
)
28.07
%
37.23
%
30.87
%
Years Ended December 31,
2009
2008
2007
$
1,396
$
1,693
$
1,651
77
104
98
$
1,473
$
1,797
$
1,749
91
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92
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December 31,
2009
2008
$
259
$
168
54
21
176
249
489
438
(139
)
(135
)
(941
)
(1,012
)
(802
)
(736
)
$
(1,393
)
$
(1,445
)
2009
2008
2007
$
84
$
102
$
117
6
9
10
11
4
4
4
7
(1
)
(1
)
(10
)
(36
)
(26
)
(8
)
(6
)
(9
)
$
75
$
84
$
102
93
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10.
Employee
Benefit Plans
94
Table of Contents
11.
Commitments
and Contingencies
95
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Gross Claims
Estimated Insurance
Net Claims
Liability
Recoveries(a)
Liability
$
652
$
(267
)
$
385
144
(1
)
143
(225
)
54
(171
)
571
(214
)
357
169
(28
)
141
(209
)
51
(158
)
531
(191
)
340
184
(32
)
152
(174
)
29
(145
)
$
541
$
(194
)
$
347
$
149
$
(63
)
$
86
$
392
$
(131
)
$
261
(a)
Amounts reported as estimated insurance recoveries are related
to both paid and unpaid claims liabilities.
(b)
We currently expect substantially all of our recorded
obligations to be settled in cash in the next five years.
96
Table of Contents
Share Repurchases
In December 2009, we
entered into a plan under SEC
Rule 10b5-1
to effect market purchases of our common stock during the first
quarter of 2010. See Note 15 for additional information
related to this arrangement.
Fuel Supply
We have purchase agreements
expiring at various dates through 2011 that require us to
purchase minimum amounts of wood waste, anthracite coal waste
(culm) and conventional fuels at our independent power
production plants. These fuel supplies are used to produce steam
that is sold to industrial and commercial users and electricity
that is sold to electric utilities, which is generally subject
to the terms and conditions of long-term contracts. Our purchase
agreements have been established based on the plants
anticipated fuel supply needs to meet the demands of our
customers under these long-term electricity sale contracts.
Under our fuel supply
take-or-pay
contracts, we are generally obligated to pay for a minimum
amount of waste or conventional fuel at a stated rate even if
such quantities are not required in our operations.
Disposal
We have several agreements expiring
at various dates through 2052 that require us to dispose of a
minimum number of tons at third-party disposal facilities. Under
these
put-or-pay
agreements, we are required to pay for the agreed upon minimum
volumes regardless of the actual number of tons placed at the
facilities. We generally fulfill our minimum contractual
obligations by disposing of volumes collected in the ordinary
course of business at these disposal facilities.
Waste Paper
We are party to a waste paper
purchase agreement that requires us to purchase a minimum number
of tons of waste paper. The cost per ton we pay is based on
market prices plus the cost of delivery to our customers. We
currently expect to fulfill our purchase obligations by 2013.
Royalties
We have various arrangements that
require us to make royalty payments to third parties including
prior land owners, lessors or host communities where our
operations are located. Certain of these agreements provide for
minimum royalties and require that we make fixed, periodic
payments. Our obligations expire at various dates through 2025.
Although minimum payments are required under certain of the
royalty agreements, our obligations generally are based on per
ton rates for waste actually received at our transfer stations,
landfills or
waste-to-energy
facilities.
Property
From time to time, we make
commitments to purchase assets that we expect to use in our
operations. We are currently party to an agreement to purchase a
corporate aircraft to replace an existing aircraft, the lease
for which is expiring in early 2011. The agreement requires that
we make installment payments between now and delivery, expected
in 2010, based on the total purchase price for the aircraft.
As of December 31, 2009, WM Holdings has fully and
unconditionally guaranteed all of WMIs senior
indebtedness, including its senior notes, revolving credit
agreement and certain letter of credit facilities, which matures
through 2039. WMI has fully and unconditionally guaranteed all
of the senior indebtedness of WM Holdings, which matures
through 2026. Performance under these guarantee agreements would
be required if either party defaulted on their respective
obligations. No additional liabilities have been recorded
97
Table of Contents
for these guarantees because the underlying obligations are
reflected in our Consolidated Balance Sheets. See Note 23
for further information.
WMI and WM Holdings have guaranteed the tax-exempt bonds
and other debt obligations of their subsidiaries. If a
subsidiary fails to meet its obligations associated with its
debt agreements as they come due, WMI or WM Holdings will
be required to perform under the related guarantee agreement. No
additional liabilities have been recorded for these guarantees
because the underlying obligations are reflected in our
Consolidated Balance Sheets. See Note 7 for information
related to the balances and maturities of our tax-exempt bonds.
We have guaranteed certain financial obligations of
unconsolidated entities. The related obligations, which mature
through 2020, are not recorded on our Consolidated Balance
Sheets. As of December 31, 2009, our maximum future
payments associated with these guarantees are approximately
$9 million. We do not believe that it is likely that we
will be required to perform under these guarantees.
Certain of our subsidiaries have guaranteed the market or
contractually-determined value of certain homeowners
properties that are adjacent to certain of our landfills. These
guarantee agreements extend over the life of the respective
landfill. Under these agreements, we would be responsible for
the difference, if any, between the sale value and the
guaranteed market or contractually-determined value of the
homeowners properties. Generally, it is not possible to
determine the contingent obligation associated with these
guarantees, but we do not believe that these contingent
obligations will have a material effect on our financial
position, results of operations or cash flows.
We have indemnified the purchasers of businesses or divested
assets for the occurrence of specified events under certain of
our divestiture agreements. Other than certain identified items
that are currently recorded as obligations, we do not believe
that it is possible to determine the contingent obligations
associated with these indemnities. Additionally, under certain
of our acquisition agreements, we have provided for additional
consideration to be paid to the sellers if established financial
targets are achieved post-closing. For acquisitions completed in
2009, we have recognized liabilities for these contingent
obligations based on an estimate of the fair value of these
contingencies at the time of acquisition. For acquisitions
completed before 2009, the costs associated with any additional
consideration requirements are accounted for as incurred.
Contingent obligations related to indemnifications arising from
our divestitures and contingent consideration provided for by
our acquisitions are not expected to be material to our
financial position, results of operations or cash flows.
WMI and WM Holdings guarantee the service, lease, financial
and general operating obligations of certain of their
subsidiaries. If such a subsidiary fails to meet its contractual
obligations as they come due, the guarantor has an unconditional
obligation to perform on its behalf. No additional liability has
been recorded for service, financial or general operating
guarantees because the subsidiaries obligations are
properly accounted for as costs of operations as services are
provided or general operating obligations as incurred. No
additional liability has been recorded for the lease guarantees
because the subsidiaries obligations are properly
accounted for as operating or capital leases, as appropriate.
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99
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100
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12.
Restructuring
101
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$
12
11
10
6
1
10
$
50
13.
(Income)
Expense from Divestitures, Asset Impairments and Unusual
Items
Years Ended December 31,
2009
2008
2007
$
$
(33
)
$
(59
)
83
4
12
$
83
$
(29
)
$
(47
)
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14.
Accumulated
Other Comprehensive Income
December 31,
2009
2008
2007
$
(8
)
$
(19
)
$
(20
)
2
(2
)
5
212
113
240
2
(4
)
4
$
208
$
88
$
229
15.
Capital
Stock, Share Repurchases and Dividends
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Years Ended December 31,
2009
2008
2007
7,237
12,390
39,946
$28.06-$33.80
$28.98-$38.44
$33.00-$40.13
$226
$410
$1,421
16.
Stock-Based
Compensation
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Years Ended December 31,
2009
2008
2007
Weighted
Weighted
Weighted
Average
Average
Average
Fair
Fair
Fair
Units
Value
Units
Value
Units
Value
1,121
$
33.46
1,124
$
32.58
1,279
$
30.63
369
$
23.66
359
$
33.33
324
$
37.28
(412
)
$
31.49
(338
)
$
30.41
(376
)
$
30.43
(48
)
$
32.81
(24
)
$
33.22
(103
)
$
30.94
1,030
$
30.76
1,121
$
33.46
1,124
$
32.58
(a)
The total fair market value of the shares issued upon the
vesting of restricted stock units during the years ended
December 31, 2009, 2008 and 2007 was $13 million,
$11 million and $14 million, respectively.
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Table of Contents
Years Ended December 31,
2009
2008
2007
Weighted
Weighted
Weighted
Average
Average
Average
Fair
Fair
Fair
Units
Value
Units
Value
Units
Value
2,644
$
34.10
2,134
$
32.72
1,391
$
29.52
1,159
$
22.66
1,169
$
32.92
907
$
37.28
(635
)
$
31.93
(615
)
$
27.05
(53
)
$
27.05
(86
)
$
33.59
(44
)
$
34.48
(111
)
$
32.86
3,082
$
30.26
2,644
$
34.10
2,134
$
32.72
(a)
The units that vested in 2009 and 2008 were subject to
three-year performance targets that were established when the
awards were granted. The Companys financial results for
the three-year periods ended December 31, 2008 and
December 31, 2007, as measured for purposes of these
awards, were lower than the target levels established.
Accordingly, in 2009, we issued approximately
594,000 shares for vested units, or 94% of the established
target and in 2008, we issued approximately 561,000 shares
for vested units, or 91% of the established target. The
Companys performance exceeded the target level established
for the awards that vested in 2007 and we issued approximately
65,000 shares.
(b)
The shares issued upon the vesting of performance share units
had a fair market value of $17 million in 2009,
$19 million in 2008 and $2 million in 2007.
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Table of Contents
Years Ended December 31,
2009
2008
2007
Weighted
Weighted
Weighted
Average
Average
Average
Exercise
Exercise
Exercise
Shares
Price
Shares
Price
Shares
Price
11,045
$
26.97
14,620
$
29.33
21,779
$
29.52
1
$
27.90
6
$
35.27
17
$
38.47
(1,285
)
$
30.20
(1,506
)
$
24.95
(5,252
)
$
25.96
(961
)
$
39.62
(2,075
)
$
45.09
(1,924
)
$
40.75
8,800
$
25.98
11,045
$
26.97
14,620
$
29.33
8,798
$
25.98
11,044
$
26.97
14,618
$
29.33
(a)
Although we stopped granting stock options in 2005, some of our
outstanding options have a reload feature that provides for the
automatic grant of a new stock option when the exercise price of
the existing stock option is paid using already owned shares of
common stock. The new option will be for the same number of
shares used as payment of the exercise price.
(b)
The aggregate intrinsic value of stock options exercised during
the years ended December 31, 2009, 2008 and 2007 was
$12 million, $16 million and $62 million,
respectively.
(c)
Stock options outstanding as of December 31, 2009 have a
weighted average remaining contractual term of 2.9 years
and an aggregate intrinsic value of $69 million based on
the market value of our common stock on December 31, 2009.
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Weighted Average
Weighted Average
Shares
Exercise Price
Remaining Years
1,525
$
19.21
2.87
7,006
$
27.18
2.91
267
$
33.18
2.77
8,798
$
25.98
2.90
17.
Earnings
Per Share
Years Ended December 31,
2009
2008
2007
486.1
490.7
500.1
5.1
1.4
17.2
491.2
492.1
517.3
2.4
3.3
4.5
493.6
495.4
521.8
13.2
15.1
18.2
0.3
0.8
2.4
18.
Fair
Value Measurements
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Table of Contents
Fair Value Measurements Using
Quoted
Significant
Prices in
Other
Significant
Active
Observable
Unobservable
Markets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
$
1,096
$
1,096
$
$
308
308
45
45
$
1,449
$
1,404
$
45
$
$
18
$
$
18
$
$
18
$
$
18
$
109
Table of Contents
19.
Acquisitions
and Divestitures
110
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20.
Variable
Interest Entities
111
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21.
Segment
and Related Information
112
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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)
$
2,960
$
(533
)
$
2,427
$
483
$
276
$
216
$
4,326
2,855
(426
)
2,429
450
261
218
4,899
3,328
(431
)
2,897
768
274
242
3,250
3,125
(412
)
2,713
521
226
195
3,667
841
(123
)
718
235
57
11
2,266
628
(21
)
607
(136
)
29
128
1,112
13,737
(1,946
)
11,791
2,321
1,123
1,010
19,520
(434
)
43
66
2,281
$
13,737
$
(1,946
)
$
11,791
$
1,887
$
1,166
$
1,076
$
21,801
$
3,319
$
(599
)
$
2,720
$
523
$
284
$
318
$
4,372
3,267
(475
)
2,792
475
287
296
4,626
3,740
(493
)
3,247
872
294
303
3,218
3,387
(428
)
2,959
612
238
295
3,686
912
(92
)
820
323
56
24
2,359
897
(47
)
850
(60
)
32
81
873
15,522
(2,134
)
13,388
2,745
1,191
1,317
19,134
(511
)
47
45
1,676
$
15,522
$
(2,134
)
$
13,388
$
2,234
$
1,238
$
1,362
$
20,810
$
3,411
$
(633
)
$
2,778
$
550
$
296
$
260
$
4,358
3,289
(500
)
2,789
524
306
297
4,876
3,737
(542
)
3,195
826
300
273
3,139
3,444
(440
)
3,004
618
233
224
3,591
868
(71
)
797
292
57
26
2,399
832
(85
)
747
(38
)
13
66
997
15,581
(2,271
)
13,310
2,772
1,205
1,146
19,360
(518
)
54
(2
)
1,472
$
15,581
$
(2,271
)
$
13,310
$
2,254
$
1,259
$
1,144
$
20,832
(a)
Our Other net operating revenues and
Other income from operations include (i) the
effects of those elements of our in-plant services, landfill
gas-to-energy
operations and third-party
sub-contract
and administration revenues managed by our Upstream, Renewable
Energy and National Accounts organizations that are not included
with the operations of our reportable segments; (ii) our
recycling brokerage and electronic recycling services; and
(iii) the impacts of investments that we are making in
expanded service offerings such
113
Table of Contents
as portable self-storage, fluorescent lamp recycling and
healthcare solutions. In addition, our Other income
from operations reflects the impacts of (i) non-operating
entities that provide financial assurance and self-insurance
support for the Groups or financing for our Canadian operations;
and (ii) certain year-end adjustments recorded in
consolidation related to the reportable segments that were not
included in the measure of segment profit or loss used to assess
their performance for the periods disclosed.
(b)
Corporate operating results reflect the costs incurred for
various support services that are not allocated to our five
Groups. These support services include, among other things,
treasury, legal, information technology, tax, insurance,
centralized service center processes, other administrative
functions and the maintenance of our closed landfills. Income
from operations for Corporate and other also
includes costs associated with our long-term incentive program
and any administrative expenses or revisions to our estimated
obligations associated with divested operations.
(c)
Intercompany operating revenues reflect each segments
total intercompany sales, including intercompany sales within a
segment and between segments. Transactions within and between
segments are generally made on a basis intended to reflect the
market value of the service.
(d)
For those items included in the determination of income from
operations, the accounting policies of the segments are the same
as those described in Note 3.
(e)
The income from operations provided by our four geographic
segments is generally indicative of the margins provided by our
collection, landfill, transfer and recycling businesses. The
operating margins provided by our Wheelabrator segment
(waste-to-energy
facilities and independent power production plants) have
historically been higher than the margins provided by our base
business generally due to the combined impact of long-term
disposal and energy contracts and the disposal demands of the
regions in which our facilities are concentrated. However, the
revenues and operating results of our Wheelabrator Group have
been unfavorably affected by a significant decrease in the rates
charged for electricity under our power purchase contracts,
which correlate with natural gas prices in the markets where we
operate. Exposure to market fluctuations in electricity prices
has increased for the Wheelabrator Group in 2009 due in large
part to the expiration of several long-term energy contracts.
Additionally, the Companys current focus on the expansion
of our
waste-to-energy
business both internationally and domestically has increased
Wheelabrators costs and expenses, which has negatively
affected the comparability of their operating results for the
periods presented. From time to time the operating results of
our reportable segments are significantly affected by unusual or
infrequent transactions or events. Refer to Note 12 and
Note 13 for an explanation of transactions and events
affecting the operating results of our reportable segments.
(f)
Includes non-cash items. Capital expenditures are reported in
our reportable segments at the time they are recorded within the
segments property, plant and equipment balances and,
therefore, may include amounts that have been accrued but not
yet paid.
(g)
Because of the length of time inherent in completing certain
fleet purchases, our Corporate and Other segment initiates
certain fleet-related purchases on behalf of our reportable
segments. The related capital expenditures are recorded in our
Corporate and Other organization until the time at which the
fleet items are delivered to our Groups. Once delivery occurs,
the total cost of the items received are reported as capital
expenditures in our Groups with an offset for the costs
previously reported by the Corporate and Other organization. In
2007, the quantity of fleet purchases previously reported by the
Corporate and Other organization that were delivered to our
Groups more than offset the quantity of new fleet purchases
initiated by our Corporate and Other organization.
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Table of Contents
(h)
The reconciliation of total assets reported above to Total
assets in the Consolidated Balance Sheets is as follows
(in millions):
December 31,
2009
2008
2007
$
21,801
$
20,810
$
20,832
(647
)
(583
)
(657
)
$
21,154
$
20,227
$
20,175
(i)
Goodwill is included within each Groups total assets. As
discussed above, for segment reporting purposes, our material
recovery facilities and secondary processing facilities are
included as a component of their respective geographic Group and
our recycling brokerage business and electronics recycling
services are included as part of our Other
operations. The following table shows changes in goodwill during
2008 and 2009 by reportable segment on a realigned basis (in
millions):
Eastern
Midwest
Southern
Western
Wheelabrator
Other
Total
$
1,489
$
1,334
$
594
$
1,167
$
788
$
34
$
5,406
4
20
54
53
1
132
(3
)
(2
)
(4
)
(9
)
(2
)
(52
)
(1
)
(12
)
(67
)
1,488
1,300
643
1,208
788
35
5,462
10
45
36
7
27
125
2
2
37
6
43
$
1,500
$
1,382
$
679
$
1,221
$
788
$
62
$
5,632
Years Ended December 31,
2009
2008
2007
$
7,980
$
8,679
$
8,714
2,547
2,955
3,047
1,383
1,589
1,654
841
912
868
741
1,180
1,135
245
207
163
(1,946
)
(2,134
)
(2,271
)
$
11,791
$
13,388
$
13,310
(a)
The Other
line-of-business
includes in-plant services, landfill
gas-to-energy
operations,
Port-O-Let
®
services, portable self-storage, fluorescent lamp recycling,
street and parking lot sweeping services and healthcare
solutions services.
(b)
Intercompany revenues between lines of business are eliminated
within the Consolidated Financial Statements included herein.
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Years Ended December 31,
2009
2008
2007
$
11,137
$
12,621
$
12,566
654
767
744
$
11,791
$
13,388
$
13,310
December 31,
2009
2008
2007
$
10,251
$
10,355
$
10,122
1,290
1,047
1,229
$
11,541
$
11,402
$
11,351
22.
Quarterly
Financial Data (Unaudited)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
2,810
$
2,952
$
3,023
$
3,006
372
534
525
456
170
267
292
331
155
247
277
315
0.31
0.50
0.56
0.65
0.31
0.50
0.56
0.64
$
3,266
$
3,489
$
3,525
$
3,108
511
632
632
459
248
331
323
226
241
318
310
218
0.49
0.65
0.63
0.44
0.48
0.64
0.63
0.44
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Table of Contents
Income from operations was positively affected by the
recognition of a $10 million 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 $2 million. The discount rate adjustment
increased the quarters Net income attributable to
Waste Management, Inc. by $5 million, or $0.01 per
diluted share.
Income from operations was negatively affected by a non-cash
charge of $49 million related to the abandonment of the SAP
waste and recycling revenue management software, which reduced
Net income attributable to Waste Management, Inc. by
$30 million, or $0.06 per diluted share. Additionally, we
recognized $38 million of charges related to our January
2009 restructuring, which reduced Net income attributable
to Waste Management, Inc. by $23 million, or $0.05
per diluted share.
Income from operations was positively affected by the
recognition of a $22 million favorable adjustment to
Operating expenses due to an increase from 2.75% to
3.50% in the discount rate used to estimate the present value of
our environmental remediation obligations and recovery assets.
This reduction to Operating expenses resulted in a
corresponding increase in Net income attributable to
noncontrolling interests of $6 million. Additionally,
our Selling, general and administrative expenses
were reduced by $8 million as a result of the reversal of
all compensation costs previously recognized for our 2008
performance share units based on a determination that it is no
longer probable that the targets established for that award will
be met. These items increased the quarters Net
income attributable to Waste Management, Inc. by
$15 million, or $0.03 per diluted share.
Income from operations was negatively affected by (i) a
$9 million charge to Operating expenses for a
withdrawal of bargaining unit employees from an underfunded,
multi-employer pension fund; (ii) $5 million of
charges related to our January 2009 restructuring; and
(iii) a $2 million impairment charge recognized by our
Southern Group due to a change in expectations for the operating
life of a landfill. These items decreased the quarters
Net income attributable to Waste Management, Inc. by
$10 million, or $0.02 per diluted share.
Income from operations was negatively affected by
$3 million of charges related to our January 2009
restructuring. This charge negatively affected Net income
attributable to Waste Management, Inc. for the quarter by
$2 million.
Our Provision for income taxes for the quarter was
reduced by $19 million primarily as a result of the
finalization of our 2008 tax returns and tax audit settlements,
which positively affected Diluted earnings per common
share by $0.04.
Income from operations was positively affected by (i) an
$18 million increase in the revenues of our Eastern Group
for payments received under an oil and gas lease at one of our
landfills; and (ii) a $22 million decrease to
Depreciation and amortization expense for
adjustments associated with changes in our expectations for
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Table of Contents
the timing and cost of future final capping, closure and
post-closure of fully utilized airspace. These items increased
the quarters Net income attributable to Waste
Management, Inc. by $24 million, or $0.05 per diluted
share.
Income from operations was negatively affected by (i) a
$27 million impairment charge recognized by our Western
Group as a result in a change in expectations for the future
operations of an inactive landfill in California; (ii) a
$12 million increase to Selling, general and
administrative expenses for several legal matters;
(iii) a $4 million impairment 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 interest in those operations;
(iv) $4 million of charges related to our January 2009
restructuring; and (v) a $2 million impairment charge
related to the abandonment of the SAP waste and recycling
revenue management software. These items decreased the
quarters Net income attributable to Waste
Management, Inc. by $29 million, or $0.06 per diluted
share.
Our Provision for income taxes for the quarter was
reduced by $108 million as a result of (i) the
liquidation of a foreign subsidiary, which generated a capital
loss that could be utilized to offset capital gains generated in
previous years; (ii) the utilization of state net operating
loss and credit carry-forwards; and (iii) a reduction in
provincial tax rates in Ontario, Canada, which resulted in the
revaluation of related deferred tax balances. This significant
decrease in taxes resulted in an effective tax rate of 4.9% for
the fourth quarter of 2009 and positively affected the
quarters Diluted earnings per common share by
$0.22.
Net income was positively affected by a $6 million
reduction in our Provision for income taxes
recognized as a result of the settlement of tax audits.
Net income was positively affected by (i) a $7 million
reduction in our Provision for income taxes
recognized as a result of the settlement of tax audits; and
(ii) a $10 million net reduction in Interest
expense, or $6 million net of tax, for the immediate
recognition of fair value adjustments associated with terminated
interest rate swaps related to our $244 million of
8.75% senior notes that were repaid in May 2008, but would
have matured in 2018.
Income from operations was positively affected by the
recognition of a $23 million net credit to (Income)
expense from divestitures, asset impairments and unusual
items due to $26 million of gains from divestitures
of underperforming collection operations in our Southern Group,
offset in part by a $3 million impairment charge recognized
as a result of a decision to close a landfill in our Southern
Group. These items positively affected net income for the period
by $14 million, or $0.03 per diluted share.
Income from operations was negatively affected by
$26 million of increased Operating expenses due
to a labor disruption associated with the renegotiation of a
collective bargaining agreement in Milwaukee, Wisconsin and the
related agreement of the bargaining unit to withdraw from the
Central States Pension Fund. These charges negatively affected
net income for the period by $16 million, or $0.03 per
diluted share.
Income from operations was positively affected by (i) a
$6 million reduction in landfill amortization expenses
associated with changes in our expectations for the timing and
cost of future final capping, closure and post-closure of fully
utilized airspace; and (ii) the recognition of a
$5 million net credit to (Income) expense from
divestitures, asset impairments and unusual items for the
divestiture of operations, principally
118
Table of Contents
in our Midwest Group. These items positively affected net income
for the period by $6 million, or $0.01 per diluted share.
Income from operations was negatively affected by
(i) $24 million of increased Operating
expenses due to labor disruptions associated with the
renegotiation of various collective bargaining agreements and
the related withdrawal of the bargaining units from
multi-employer pension plans; and (ii) a $33 million
charge to Operating expenses as a result of a
decrease in the risk-free interest rate used to discount our
environmental remediation liabilities. The charge to
Operating expenses associated with the change in the
discount rate used for our environmental remediation liabilities
resulted in a $6 million decrease in net income
attributable to noncontrolling interests during the period.
Collectively, these items negatively affected net income for the
period by $30 million, or $0.06 per diluted share.
Net income was positively affected by a $13 million
reduction in our Provision for income taxes
recognized as a result of tax audit settlements.
23.
Condensed
Consolidating Financial Statements
119
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120
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121
Table of Contents
WM
Non-Guarantor
WMI
Holdings
Subsidiaries
Eliminations
Consolidated
$
$
$
11,791
$
$
11,791
9,904
9,904
1,887
1,887
(268
)
(41
)
(104
)
(413
)
1,157
1,182
(2,339
)
(1
)
(1
)
889
1,141
(105
)
(2,339
)
(414
)
889
1,141
1,782
(2,339
)
1,473
(105
)
(16
)
534
413
994
1,157
1,248
(2,339
)
1,060
66
66
$
994
$
1,157
$
1,182
$
(2,339
)
$
994
$
$
$
13,388
$
$
13,388
11,154
11,154
2,234
2,234
(274
)
(40
)
(122
)
(436
)
1,254
1,278
(2,532
)
(1
)
(1
)
980
1,238
(123
)
(2,532
)
(437
)
980
1,238
2,111
(2,532
)
1,797
(107
)
(16
)
792
669
1,087
1,254
1,319
(2,532
)
1,128
41
41
$
1,087
$
1,254
$
1,278
$
(2,532
)
$
1,087
122
Table of Contents
WM
Non-Guarantor
WMI
Holdings
Subsidiaries
Eliminations
Consolidated
$
$
$
13,310
$
$
13,310
11,056
11,056
2,254
2,254
(291
)
(66
)
(117
)
(474
)
1,347
1,389
(2,736
)
(31
)
(31
)
1,056
1,323
(148
)
(2,736
)
(505
)
1,056
1,323
2,106
(2,736
)
1,749
(107
)
(24
)
671
540
1,163
1,347
1,435
(2,736
)
1,209
46
46
$
1,163
$
1,347
$
1,389
$
(2,736
)
$
1,163
123
Table of Contents
WM
Non-Guarantor
WMI
Holdings
Subsidiaries
Eliminations
Consolidated
$
994
$
1,157
$
1,248
$
(2,339
)
$
1,060
(1,157
)
(1,182
)
2,339
26
(3
)
1,279
1,302
(137
)
(28
)
2,527
2,362
(281
)
(281
)
(1,179
)
(1,179
)
28
28
182
182
(1,250
)
(1,250
)
1,385
364
1,749
(810
)
(525
)
(1,335
)
(226
)
(226
)
(569
)
(569
)
20
20
3
(99
)
(96
)
977
28
(1,005
)
780
28
(1,265
)
(457
)
5
5
643
17
660
450
30
480
$
1,093
$
$
47
$
$
1,140
124
Table of Contents
WM
Non-Guarantor
WMI
Holdings
Subsidiaries
Eliminations
Consolidated
$
1,087
$
1,254
$
1,319
$
(2,532
)
$
1,128
(1,254
)
(1,278
)
2,532
(22
)
(16
)
1,485
1,447
(189
)
(40
)
2,804
2,575
(280
)
(280
)
(1,221
)
(1,221
)
112
112
(2
)
208
206
(2
)
(1,181
)
(1,183
)
944
581
1,525
(760
)
(244
)
(781
)
(1,785
)
(410
)
(410
)
(531
)
(531
)
37
37
7
(99
)
(92
)
938
284
(1,290
)
68
225
40
(1,589
)
68
(1,256
)
(4
)
(4
)
34
30
68
132
416
(68
)
348
$
450
$
$
30
$
$
480
Table of Contents
WM
Non-Guarantor
WMI
Holdings
Subsidiaries
Eliminations
Consolidated
$
1,163
$
1,347
$
1,435
$
(2,736
)
$
1,209
(1,347
)
(1,389
)
2,736
(53
)
(3
)
1,286
1,230
(237
)
(45
)
2,721
2,439
(90
)
(90
)
(1,211
)
(1,211
)
278
278
(1,220
)
(1,220
)
1,404
1,404
(4
)
82
78
184
(4
)
(941
)
(761
)
300
644
944
(352
)
(848
)
(1,200
)
(1,421
)
(1,421
)
(495
)
(495
)
142
142
26
58
84
1,594
49
(1,636
)
(7
)
(206
)
49
(1,782
)
(7
)
(1,946
)
2
2
(259
)
(7
)
(266
)
675
(61
)
614
$
416
$
$
$
(68
)
$
348
Table of Contents
24.
New
Accounting Pronouncements (Unaudited)
127
Table of Contents
Item 9.
Changes
in and Disagreements With Accountants on Accounting and
Financial Disclosure.
Item 9A.
Controls
and Procedures.
Item 9B.
Other
Information.
Item 10.
Directors,
Executive Officers and Corporate Governance.
Item 11.
Executive
Compensation.
128
Table of Contents
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
Number of Securities to
Number of
be Issued Upon
Securities
Exercise
Weighted-Average
Remaining Available
of Outstanding
Exercise Price of
for Future Issuance
Options,
Outstanding Options,
Under Equity
Warrants and Rights
Warrants and Rights
Compensation Plans
12,738,118
(b)
$
26.03
(c)
21,292,299
(d)
173,912
$
23.43
132,714
12,912,030
$
25.98
21,425,013
(a)
Includes our 1993 Stock Incentive Plan, 2000 Stock Incentive
Plan, 1996 Non-Employee Directors Plan, 2004 Stock
Incentive Plan and 2009 Stock Incentive Plan. Only our 2009
Stock Incentive Plan is available for awards. Also includes our
Employee Stock Purchase Plan.
(b)
Excludes purchase rights that accrue under the ESPP. Purchase
rights under the ESPP are considered equity compensation for
accounting purposes; however, the number of shares to be
purchased is indeterminable until the time shares are actually
issued, as automatic employee contributions may be terminated
before the end of an offering period and, due to the look-back
pricing feature, the purchase price and corresponding number of
shares to be purchased is unknown. Includes 8,625,716 stock
options; 3,082,118 shares underlying performance share
units at target performance and 1,030,284 shares underlying
restricted stock units.
(c)
Excludes performance share units and restricted stock units
because those awards do not have exercise prices associated with
them. Also excludes purchase rights under the ESPP for the
reasons described in (b) above.
(d)
The shares remaining available include 18,792,503 shares
under our 2009 Stock Incentive Plan and 2,499,796 shares
under our ESPP. In determining the number of shares available
under the 2009 Stock Incentive Plan, we used the maximum number
of shares that may be issued under our performance share units,
which is two times the number at target. No additional shares
may be issued under any of the other plans approved by
stockholders.
(e)
Includes our 2000 Broad-Based Employee Plan. No awards under the
Broad-Based Plan are held by, or may be granted to, any of our
directors or executive officers. The Broad-Based Plan allows for
the granting of equity awards on such terms and conditions as
the Management Development and Compensation Committee may
decide; provided that the exercise price of options may not be
less than 100% of the fair market value of the stock on the date
of grant, and all options expire no later than ten years from
the date of grant.
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence.
129
Table of Contents
Item 14.
Principal
Accounting Fees and Services.
Item 15.
Exhibits,
Financial Statement Schedules
130
Table of Contents
By:
Chief Executive Officer and Director (Principal Executive
Officer)
February 16, 2010
Senior Vice President and Chief Financial Officer (Principal
Financial Officer)
February 16, 2010
Vice President and Chief Accounting Officer (Principal
Accounting Officer)
February 16, 2010
Director
February 16, 2010
Director
February 16, 2010
Director
February 16, 2010
Chairman of the Board and Director
February 16, 2010
Director
February 16, 2010
Director
February 16, 2010
Director
February 16, 2010
131
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132
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Accounts
Balance
Charged
Written
Balance
Beginning of
(Credited) to
Off/Use of
End of
Year
Income
Reserve
Other(a)
Year
$
51
$
43
$
(44
)
$
(3
)
$
47
$
47
$
50
$
(56
)
$
(2
)
$
39
$
39
$
48
$
(57
)
$
2
$
32
$
1
$
10
$
(7
)
$
$
4
$
4
$
2
$
(4
)
$
$
2
$
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.
133
Table of Contents
Exhibit
3.1
Second Amended and Restated Certificate of Incorporation
[Incorporated by reference to Exhibit 3.1 to
Form 10-Q
for the quarter ended June 30, 2002].
3.2
Amended and Restated Bylaws [Incorporated by reference to
Exhibit 3.2 to
Form 8-K
dated December 11, 2008].
4.1
Specimen Stock Certificate [Incorporated by reference to
Exhibit 4.1 to
Form 10-K
for the year ended December 31, 1998].
4.2
Indenture for Subordinated Debt Securities dated
February 1, 1997, among the Registrant and Texas Commerce
Bank National Association, as trustee [Incorporated by reference
to Exhibit 4.1 to
Form 8-K
dated February 7, 1997].
4.3
Indenture for Senior Debt Securities dated September 10,
1997, among the Registrant and Texas Commerce Bank National
Association, as trustee [Incorporated by reference to
Exhibit 4.1 to
Form 8-K
dated September 10, 1997].
10.1
2009 Stock Incentive Plan [Incorporated by reference to
Appendix A-1
to the Proxy Statement for the 2009 Annual Meeting of
Stockholders].
10.2
2005 Annual Incentive Plan [Incorporated by reference to
Appendix D-1
to the Proxy Statement for the 2004 Annual Meeting of
Stockholders].
10.3
1997 Employee Stock Purchase Plan [Incorporated by reference to
Appendix C to the Proxy Statement for the 2006 Annual
Meeting of Stockholders].
10.4
Waste Management, Inc. 409A Deferral Savings Plan. [Incorporated
by reference to Exhibit 10.4 to
Form 10-K
for the year ended December 31, 2006].
10.5
$2.4 Billion Revolving Credit Agreement by and among Waste
Management, Inc. and Waste Management Holdings, Inc. and certain
banks party thereto and Citibank, N.A. as Administrative Agent,
JP Morgan Chase Bank, N.A. and Bank of America, N.A., as
Syndication Agents and Barclays Bank PLC and Deutsche Bank
Securities Inc. as Documentation Agents and J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as Lead
Arrangers and Bookrunners dated August 17, 2006.
[Incorporated by reference to Exhibit 10.1 to
Form 10-Q
for the quarter ended September 30, 2006].
10.6
Ten-Year Letter of Credit and Term Loan Agreement among the
Company, Waste Management Holdings, Inc., and Bank of America,
N.A., as Administrative Agent and Letter of Credit Issuer and
the Lenders party thereto, dated as of June 30, 2003.
[Incorporated by reference to Exhibit 10.2 to
Form 10-Q
for the quarter ended June 30, 2003].
10.7
Seven-Year Letter of Credit and Term Loan Agreement among the
Company, Waste Management Holdings, Inc., and Bank of America,
N.A., as Administrative Agent and Letter of Credit Issuer and
the Lenders party thereto, dated as of June 30, 2003.
[Incorporated by reference to Exhibit 10.4 to
Form 10-Q
for the quarter ended June 30, 2003].
10.8
2003 Waste Management, Inc. Directors Deferred Compensation Plan
[Incorporated by reference to Exhibit 10.5 to
Form 10-Q
for the quarter ended June 30, 2003].
10.9
Employment Agreement between the Company and Cherie C. Rice
dated August 26, 2005 [Incorporated by reference to
Exhibit 99.1 to
Form 8-K
dated August 26, 2005].
10.10
Employment Agreement between the Company and Greg A. Robertson
dated August 1, 2003 [Incorporated by reference to
Exhibit 10.2 to
Form 10-Q
for the quarter ended June 30, 2004].
10.11
Employment Agreement between the Company and Lawrence
ODonnell III dated January 21, 2000
[Incorporated by reference to Exhibit 10.1 to
Form 10-Q
for the quarter ended June 30, 2000].
10.12
*
Employment Agreement between the Company and Puneet Bhasin dated
December 7, 2009.
10.13
Employment Agreement between the Company and Duane C. Woods
dated October 20, 2004 [Incorporated by reference to
Form 8-K
dated October 20, 2004].
10.14
Employment Agreement between the Company and David Steiner dated
as of May 6, 2002 [Incorporated by reference to
Exhibit 10.1 to
Form 10-Q
for the quarter ended March 31, 2002].
134
Table of Contents
Exhibit
10.15
Employment Agreement between the Company and James E. Trevathan
dated as of June 1, 2000. [Incorporated by reference to
Exhibit 10.19 to
Form 10-K
for the year ended December 31, 2000].
10.16
Employment Agreement between Recycle America Alliance, LLC and
Patrick DeRueda dated as of August 4, 2005 [Incorporated by
reference to Exhibit 99.1 to
Form 8-K
dated August 8, 2005].
10.17
Employment Agreement between the Company and Robert G. Simpson
dated as of October 20, 2004 [Incorporated by reference to
Form 8-K
dated October 20, 2004].
10.18
Employment Agreement between the Company and Barry H. Caldwell
dated as of September 23, 2002 [Incorporated by reference
to Exhibit 10.24 to
Form 10-K
for the year ended December 31, 2002].
10.19
Employment Agreement between the Company and David Aardsma dated
June 16, 2005 [Incorporated by reference to
Exhibit 99.1 to
Form 8-K
dated June 22, 2005].
10.20
Employment Agreement between the Company and Rick L Wittenbraker
dated as of November 10, 2003 [Incorporated by reference to
Exhibit 10.30 to
Form 10-K
for the year ended December 31, 2003].
10.21
Employment Agreement between Wheelabrator Technologies Inc. and
Mark A. Weidman dated May 11, 2006. [Incorporated by
reference to Exhibit 10.1 to
Form 8-K
dated May 11, 2006].
10.22
Employment Agreement between the Company and Jeff Harris dated
December 1, 2006. [Incorporated by reference to
Exhibit 10.1 to
Form 8-K
dated December 1, 2006].
10.23
Employment Agreement between the Company and Michael Jay Romans
dated January 25, 2007. [Incorporated by reference to
Exhibit 10.1 to
Form 8-K
dated January 25, 2007].
10.24
Employment Agreement between Waste Management, Inc. and Brett
Frazier dated July 13, 2007 [Incorporated by reference to
Exhibit 10.1 to
Form 8-K
dated July 13, 2007].
10.25
CDN $410,000,000 Credit Facility Credit Agreement by and between
Waste Management of Canada Corporation (as Borrower), Waste
Management, Inc. and Waste Management Holdings, Inc. (as
Guarantors), BNP Paribas Securities Corp. and Scotia Capital (as
Lead Arrangers and Book Runners) and Bank of Nova Scotia (as
Administrative Agent) and the Lenders from time to time party to
the Agreement dated as of November 30, 2005. [Incorporated
by reference to Exhibit 10.32 to
Form 10-K
for the year ended December 31, 2005].
10.26
First Amendment Agreement dated as of December 21, 2007 to
a Credit Agreement dated as of November 30, 2005 by and
between Waste Management of Canada Corporation as borrower,
Waste Management, Inc. and Waste Management Holdings, Inc. as
guarantors, the lenders from time to time party thereto and the
Bank of Nova Scotia as Administrative Agent [Incorporated by
reference to Exhibit 10.28 to
Form 10-K
for the year ended December 31, 2007].
12.1*
Computation of Ratio of Earnings to Fixed Charges.
21.1*
Subsidiaries of the Registrant.
23.1*
Consent of Independent Registered Public Accounting Firm.
31.1*
Certification Pursuant to
Rule 15d-14(a)
under the Securities Exchange Act of 1934, as amended, of David
P. Steiner, Chief Executive Officer.
31.2*
Certification Pursuant to
Rule 15d-14(a)
under the Securities Exchange Act of 1934, as amended, of Robert
G. Simpson, Senior Vice President and Chief Financial Officer.
32.1*
Certification Pursuant to 18 U.S.C. §1350 of David P.
Steiner, Chief Executive Officer.
32.2*
Certification Pursuant to 18 U.S.C. §1350 of Robert G.
Simpson, Senior Vice President and Chief Financial Officer.
101*
The following materials from Waste Management, Inc.s
Annual Report on
Form 10-K
for the period ended December 31, 2009, formatted in XBRL
(Extensible Business Reporting Language): (i) the
Consolidated Balance Sheets; (ii) the Consolidated
Statements of Operations; (iii) the Consolidated Statements
of Cash Flows; (iv) the Consolidated Statements of Changes
in Equity; and (v) the Notes to Consolidated Financial
Statements, tagged as blocks of text.
*
Filed herewith.
135
2
(i) | For purposes of this Agreement, the term Cause means any of the following: Executives (A) willful or deliberate and continual refusal to perform Executives |
3
employment duties reasonably requested by the Company after receipt of written notice to Executive of such failure to perform, specifying such failure (other than as a result of Executives sickness, illness or injury) and Executives failure to cure such nonperformance within ten (10) days of receipt of said written notice; (B) breach of any statutory or common law duty of loyalty to the Company; (C) conviction of, or plea of nolo contendre to, any felony; (D) willful or intentional cause of material injury to the Company, its property, or its assets; (E) disclosure to unauthorized person(s) of the Companys proprietary or confidential information; (F) material violation or a repeated and willful violation of the Companys policies or procedures, including but not limited to, the Companys Code of Business Conduct and Ethics (or any successor policy) then in effect; or (G) breach of any of the covenants set forth in Section 10 hereof. | |||
(ii) | For purposes of this Agreement, the phrase Notice of Termination for Cause shall mean a written notice that shall indicate the specific termination provision or provisions in Section 5(c)(i) relied upon, and shall set forth in reasonable detail the facts and circumstances which provide the basis for termination for Cause. |
(i) | A termination for Good Reason means a resignation of employment by Executive by written notice (Notice of Termination for Good Reason) given to the Companys Chief Executive Officer within ninety (90) days after the occurrence of the Good Reason event, unless such circumstances are substantially corrected prior to the date of termination specified in the Notice of Termination for Good Reason. For purposes of this Agreement, Good Reason shall mean the occurrence or failure to cause the occurrence, as the case may be, without Executives express written consent, of any of the following circumstances: (A) the Company materially diminishes Executives core duties or responsibility for those core duties, so as to effectively cause Executive to no longer be performing the duties of his position (except in each case in connection with the termination of Executives employment for Death, Total Disability, or Cause, or temporarily as a result of Executives illness or other absence); (B) in the event of the Company becoming a fifty percent or more subsidiary of any other entity, the Company materially diminishes the duties, authority or responsibilities of the person to whom Executive is required to report; (C) removal or the non-reelection of the Executive from the officer position with the Company specified herein, or removal of the Executive from any of his then officer positions; (D) any material breach by the Company of any provision of this Agreement, including without limitation Section 10 hereof; or (E) failure of any successor to the Company (whether direct or indirect and whether by merger, acquisition, consolidation or otherwise) to assume in a writing delivered to Executive upon the assignee becoming such, the obligations of the Company hereunder, resulting in a material negative change in the employment relationship. |
4
(ii) | A Notice of Termination for Good Reason shall mean a notice that shall indicate the specific termination provision or provisions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination for Good Reason. The Notice of Termination for Good Reason shall provide for a date of termination not less than thirty (30) nor more than sixty (60) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Sections 5(d)(i)(A) or (B), the date may be twenty (20) days after the giving of such notice. |
(i) | Any accrued but unpaid Base Salary for services rendered to the date of death, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination, any earned but unpaid bonuses for any prior calendar year, and, to the extent not otherwise paid, a pro-rata bonus or incentive compensation payment for the current calendar year to the extent payments are awarded to senior executives of the Company and paid at the same time as senior executives are paid. | ||
(ii) | Any benefits accrued through the date of termination to which Executive may be entitled pursuant to the plans, policies and arrangements (including those referred to in Section 4(c) hereof), as determined and paid in accordance with the terms of such plans, policies and arrangements. |
5
(i) | Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination, and any earned but unpaid bonuses for any prior calendar year. Executive shall also be eligible for a pro-rata bonus or incentive compensation payment for the current calendar year to the extent such awards are made to senior executives of the Company for the year in which Executive is terminated, and to the extent not otherwise paid to the Executive. | ||
(ii) | Any benefits accrued through the date of termination to which Executive may be entitled pursuant to the plans, policies and arrangements (including those referred to in Section 4(c) hereof) shall be determined and paid in accordance with the terms of such plans, policies and arrangements. |
(i) | Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination, and any earned but unpaid bonuses for any prior calendar year. | ||
(ii) | Any benefits accrued through the date of termination to which Executive may be entitled pursuant to the plans, policies and arrangements (including those referred to in Section 4(c) hereof up to the date of termination) shall be determined and paid in accordance with the terms of such plans, policies and arrangements. |
(i) | Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination, and any earned but unpaid bonuses for any prior calendar year. | ||
(ii) | Any benefits accrued through the date of termination to which Executive may be entitled pursuant to the plans, policies and arrangements (including those referred to in Section 4(c) hereof up to the date of termination) shall be determined and paid in accordance with the terms of such plans, policies and arrangements. |
6
(i) | Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination, and any earned but unpaid bonuses for any prior calendar year. | ||
(ii) | Any benefits accrued through the date of termination to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. | ||
(iii) | Subject to Executives execution of the Release (as defined in Section 7), Executive shall be eligible for a bonus or incentive compensation payment, at the same time, on the same basis, and to the same extent payments are made to senior executives of the Company, pro-rated for the fiscal year in which the Executive is terminated. | ||
(iv) | Subject to Executives execution of the Release (as defined in Section 7), an amount equal to two (2) times the sum of Executives Base Salary plus his Target Annual Bonus (in each case, as then in effect), of which one-half shall be paid in a lump sum within the calendar quarter in which the 60 th day falls after the employment termination date and one-half shall be paid during the two (2) year period beginning in the calendar quarter within which the 60 th day following Executives employment termination date falls and continuing at the same time and in the same manner as Base Salary would have been paid if Executive had remained in active employment until the end of such period. | ||
(v) | Subject to Executives execution of the Release (as defined in Section 7), the Company will continue for Executive and Executives spouse and eligible dependents coverage under the Companys health benefit plan and disability benefit plans, in which Executive was a participant at any time during the twelve-month period prior to the date of termination, until the earliest to occur of (A) twenty-four (24) months after the date of termination; (B) Executives death (provided that benefits provided to Executives spouse and dependents shall not terminate until twenty-four (24) months after the employment termination date); or (C) with respect to any particular plan, the date Executive becomes eligible to participate in a comparable benefit provided by a subsequent employer. In the event that Executives continued participation in any such Company plan is prohibited, the Company will arrange to provide Executive with benefits substantially similar to those which Executive would have been entitled to receive under such plan, for such 24-month period on a basis which provides Executive with no additional after-tax cost. |
7
(i) | the Company may elect to cancel any and all payments of any benefits otherwise due Executive, but not yet paid, under this Agreement or otherwise; and | ||
(ii) | Executive will refund to the Company any amounts, plus interest, previously paid by Company to Executive pursuant to Subsections 6(e)(iii), 6(e)(iv) or 6(e)(v). |
(i) | The payments and benefits provided for in Section 6(e)(i), (ii), (iv) and (v) in the same form as provided for therein. | ||
(ii) | A one time payment of the sum of Executives Base Salary plus his Target Annual Bonus, and 12 times the applicable monthly COBRA premium for the Companys medical benefit plans in which Executive participates (in each case, as then in effect), which shall be paid in a lump-sum on the 60 th day after the later of the effective date of Executives termination or the Change in Control. | ||
(iii) | Executive shall also receive a bonus or incentive compensation payment for the calendar year of the termination, payable at 100% of the maximum bonus available to Executive, pro-rated as of the effective date of the employment termination. Such bonus payment shall be payable within five (5) days after the later of the effective date of Executives termination or the Change in Control. |
(i) | For purposes of this Agreement, Change in Control means the first to occur on or after the date on which this Agreement is first signed, the occurrence of any of the following events: |
(A) | any Person, or Persons acting as a group (within the meaning of Section 409A of the Code), directly or indirectly, including by purchases, mergers, consolidation or otherwise, acquires ownership of securities of the Company that, together with stock held by such Person or Persons, represents fifty percent (50%) or more of the total voting power or total fair market value of the Companys then outstanding securities; |
8
(B) | any Person, or Persons acting as a group (within the meaning of Section 409A of the Code), acquires, (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) directly or indirectly, including by purchases, merger, consolidation or otherwise, ownership of the securities of the Company that represent thirty percent (30%) or more of the total voting power of the Companys then outstanding voting securities; | ||
(C) | the following individuals cease for any reason to constitute a majority of the number of directors then serving during any 12-month period: individuals who, at the beginning of the 12-month period, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating or the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Companys stockholders was approved or recommended by a vote of at least a majority of the directors before the date of such appointment or election or whose appointment, election or nomination for election was previously so approved or recommended | ||
(D) | a Person or Persons acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, other than a sale or disposition by the Company of such assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by the Company or by the stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. |
(ii) | For purposes of this Agreement, Change in Control Period means the period commencing on the date occurring six months immediately prior to the date on which a Change in Control occurs and ending on the second anniversary of the date on which a Change in Control occurs. | ||
(iii) | For purposes of this Agreement, Exchange Act means the Securities and Exchange Act of 1934, as amended from time to time; | ||
(iv) | For purposes of this Section 7, Person shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (1) the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (3) an employee benefit plan of the Company, (4) an underwriter temporarily holding securities pursuant to an offering of such securities or (5) a corporation owned, directly or indirectly, by the stockholders of the Company in |
9
substantially the same proportions as their ownership of shares of Common Stock of the Company. | |||
(v) | For purposes of this Agreement, Release means that specific document which the Company shall present to Executive for consideration and execution after any termination of employment pursuant to Section 5(e) and Section 6(e), wherein if he agrees to such, he will irrevocably and unconditionally release and forever discharge the Company, it subsidiaries, affiliates and related parties from any and all causes of action which Executive at that time had or may have had against the Company (excluding any claim for indemnity under this Agreement, any claim under state workers compensation or unemployment laws, or any claim under COBRA). |
10
11
12
13
14
15
|
To the Company: | Waste Management, Inc. | ||
|
1001 Fannin, Suite 4000 | |||
|
Houston, Texas 77002 | |||
|
Attention: Corporate Secretary | |||
|
||||
|
To Executive: | At the address for Executive set forth below. |
16
17
18
EXECUTIVE | WASTE MANAGEMENT, INC. | |||||||
|
||||||||
Signature:
|
/s/ Puneet Bhasin
|
By: |
/s/ David P. Steiner
|
|||||
Printed Name:
|
Puneet Bhasin | |||||||
|
||||||||
|
||||||||
Home Address: | ||||||||
|
||||||||
Street | ||||||||
|
||||||||
City, State, Zip |
19
Years Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Income before income taxes and losses in equity investments(a)
|
$ | 1,475 | $ | 1,801 | $ | 1,792 | $ | 1,560 | $ | 1,253 | ||||||||||
Fixed charges deducted from income:
|
||||||||||||||||||||
Interest expense
|
426 | 455 | 521 | 545 | 496 | |||||||||||||||
Implicit interest in rents
|
38 | 38 | 44 | 49 | 51 | |||||||||||||||
464 | 493 | 565 | 594 | 547 | ||||||||||||||||
Earnings available for fixed charges(b)
|
$ | 1,939 | $ | 2,294 | $ | 2,357 | $ | 2,154 | $ | 1,800 | ||||||||||
Interest expense
|
$ | 426 | $ | 455 | $ | 521 | $ | 545 | $ | 496 | ||||||||||
Capitalized interest
|
17 | 17 | 22 | 18 | 9 | |||||||||||||||
Implicit interest in rents
|
38 | 38 | 44 | 49 | 51 | |||||||||||||||
Total fixed charges(b)
|
$ | 481 | $ | 510 | $ | 587 | $ | 612 | $ | 556 | ||||||||||
Ratio of earnings to fixed charges(a)
|
4.0 | x | 4.5 | x | 4.0 | x | 3.5 | x | 3.2 | x | ||||||||||
(a) | Our Income before income taxes and losses in equity investments for the periods presented has been significantly affected by charges for asset impairments, restructurings and other unusual items and income from divestitures. The effect of these non-recurring items on our Income before income taxes and losses in equity investments should be considered when comparing the Ratio of earnings to fixed charges for the periods presented. | |
(b) | To the extent interest may be assessed by taxing authorities on any underpayment of income tax, such amounts are classified as a component of income tax expense in our Consolidated Statements of Operations. For purposes of this disclosure, we have elected to exclude interest expense related to income tax matters from our measurements of Earnings available for fixed charges and Total fixed charges for all periods presented. |
Entity | Jurisdiction | |
0842463 B.C. Ltd.
|
British Columbia | |
1-800-Pack-Rat, LLC
|
Delaware | |
1329409 Ontario Inc.
|
Ontario | |
2M Investments, L.L.C.
|
Utah | |
3368084 Canada Inc.
|
Canada | |
635952 Ontario Inc.
|
Ontario | |
Acaverde S.A. de C.V.
|
Mexico | |
Acaverde Servicios, S.A. de C.V.
|
Mexico | |
Advanced Environmental Technical Services, L.L.C.
|
Delaware | |
Akron Regional Landfill, Inc.
|
Delaware | |
Alabama Waste Disposal Solutions, L.L.C.
|
Alabama | |
Alliance Sanitary Landfill, Inc.
|
Pennsylvania | |
Alpharetta Transfer Station, LLC
|
Georgia | |
American Landfill, Inc.
|
Ohio | |
Anderson Landfill, Inc.
|
Delaware | |
Antelope Valley Recycling and Disposal Facility, Inc.
|
California | |
Arden Landfill, Inc.
|
Pennsylvania | |
Atlantic Waste Disposal, Inc.
|
Delaware | |
Automated Salvage Transport Co., L.L.C.
|
Delaware | |
Auxiwaste Services SA
|
France | |
Avalon South, LLC
|
Delaware | |
Avalon Southwest, Inc.
|
Delaware | |
Azusa Land Reclamation, Inc.
|
California | |
B&B Landfill, Inc.
|
Delaware | |
Barre Landfill Gas Associates, L.P.
|
Delaware | |
Beecher Development Company
|
Illinois | |
Bestan Inc.
|
Quebec | |
Big Dipper Enterprises, Inc.
|
North Dakota | |
Bluegrass Containment, L.L.C.
|
Delaware | |
Burnsville Sanitary Landfill, Inc.
|
Minnesota | |
C&C Disposal, LLC
|
Georgia | |
C.I.D. Landfill, Inc.
|
New York | |
CA Newco, L.L.C.
|
Delaware | |
Cal Sierra Disposal
|
California | |
California Asbestos Monofill, Inc.
|
California | |
Canadian Waste Services Holdings Inc.
|
Ontario | |
Capital Sanitation Company
|
Nevada | |
Capitol Disposal, Inc.
|
Alaska | |
Carolina Grading, Inc.
|
South Carolina | |
Cedar Ridge Landfill, Inc.
|
Delaware | |
Central Disposal Systems, Inc.
|
Iowa | |
Chadwick Road Landfill, Inc.
|
Georgia | |
Chambers Clearview Environmental Landfill, Inc.
|
Mississippi | |
Chambers Development Company, Inc.
|
Delaware | |
Chambers Development of Ohio, Inc.
|
Ohio | |
Chambers of Georgia, Inc.
|
Delaware | |
Chambers of Mississippi, Inc.
|
Mississippi | |
Chemical Waste Management of Indiana, L.L.C.
|
Delaware | |
Chemical Waste Management of the Northwest, Inc.
|
Washington | |
Chemical Waste Management, Inc.
|
Delaware | |
Chesser Island Road Landfill, Inc.
|
Georgia | |
City Disposal Systems, Inc.
|
Delaware | |
City Environmental Services, Inc. of Waters
|
Michigan | |
City Environmental, Inc.
|
Delaware | |
Cleburne Landfill Company Corp.
|
Alabama | |
Coast Waste Management, Inc.
|
California | |
Connecticut Valley Sanitary Waste Disposal, Inc.
|
Massachusetts | |
Conservation Services, Inc.
|
Colorado | |
Continental Waste Industries Arizona, Inc.
|
New Jersey | |
Coshocton Landfill, Inc.
|
Ohio | |
Cougar Landfill, Inc.
|
Texas | |
Countryside Landfill, Inc.
|
Illinois | |
CR Group, LLC
|
Utah | |
Cuyahoga Landfill, Inc.
|
Delaware | |
CWM Chemical Services, L.L.C.
|
Delaware | |
Dafter Sanitary Landfill, Inc.
|
Michigan | |
Dauphin Meadows, Inc.
|
Pennsylvania | |
Deep Valley Landfill, Inc.
|
Delaware |
Page 1
Entity | Jurisdiction | |
Deer Track Park Landfill, Inc.
|
Delaware | |
Del Almo Landfill, L.L.C.
|
Delaware | |
Delaware Recyclable Products, Inc.
|
Delaware | |
Dickinson Landfill, Inc.
|
Delaware | |
Disposal Service, Incorporated
|
West Virginia | |
DLA Investments, Inc.
|
Florida | |
Downtown Diversion Inc.
|
California | |
E.C. Waste, Inc.
|
Puerto Rico | |
Earthmovers Landfill, L.L.C.
|
Delaware | |
East Liverpool Landfill, Inc.
|
Ohio | |
Eastern One Land Corporation
|
Delaware | |
Eco-Vista, LLC
|
Arkansas | |
eCycling Services, L.L.C.
|
Delaware | |
El Coqui Landfill Company, Inc.
|
Puerto Rico | |
El Coqui Waste Disposal, Inc.
|
Delaware | |
ELDA Landfill, Inc.
|
Delaware | |
Elk River Landfill, Inc.
|
Minnesota | |
Envirofil of Illinois, Inc.
|
Illinois | |
Evergreen Landfill, Inc.
|
Delaware | |
Evergreen Recycling and Disposal Facility, Inc.
|
Delaware | |
Farmers Landfill, Inc.
|
Missouri | |
Feather River Disposal, Inc.
|
California | |
G.I. Industries
|
Utah | |
GA Landfills, Inc.
|
Delaware | |
Gallia Landfill, Inc.
|
Delaware | |
Garnet of Maryland, Inc.
|
Maryland | |
Gateway Transfer Station, LLC
|
Georgia | |
Georgia Waste Systems, Inc.
|
Georgia | |
Gestion Des Rebuts D.M.P. Inc.
|
Quebec | |
Giordano Recycling, L.L.C.
|
Delaware | |
Glades Landfill, LLC
|
Florida | |
Glens Sanitary Landfill, Inc.
|
Michigan | |
Grand Central Sanitary Landfill, Inc.
|
Pennsylvania | |
Greenbow, LLC
|
Alabama | |
Grupo WMX, S.A. De C.V.
|
Mexico | |
Guadalupe Rubbish Disposal Co., Inc.
|
California | |
Guam Resource Recovery Partners, L.P.
|
Delaware | |
Harris Sanitation, Inc.
|
Florida | |
Harwood Landfill, Inc.
|
Maryland | |
Hedco Landfill Limited
|
England | |
High Mountain Fuels LLC
|
Delaware | |
Hillsboro Landfill Inc.
|
Oregon | |
Holyoke Sanitary Landfill, Inc.
|
Massachusetts | |
IN Landfills, L.L.C.
|
Delaware | |
Jahner Sanitation, Inc.
|
North Dakota | |
Jay County Landfill, L.L.C.
|
Delaware | |
JFS (UK) Limited
|
England | |
K and W Landfill Inc.
|
Michigan | |
Kahle Landfill, Inc.
|
Missouri | |
Keene Road Landfill, Inc.
|
Florida | |
Kelly Run Sanitation, Inc.
|
Pennsylvania | |
Key Disposal Ltd.
|
British Columbia | |
King George Landfill Properties, LLC
|
Virginia | |
King George Landfill, Inc.
|
Virginia | |
Lakeville Recycling, L.P.
|
Delaware | |
Land Reclamation Company, Inc.
|
Delaware | |
Land South Holdings, LLC
|
Delaware | |
Landfill Services of Charleston, Inc.
|
West Virginia | |
Laurel Highlands Landfill, Inc.
|
Pennsylvania | |
LCS Services, Inc.
|
West Virginia | |
Liberty Landfill, L.L.C.
|
Delaware | |
Liquid Waste Management, Inc.
|
California | |
Longleaf C&D Disposal Facility, Inc.
|
Florida | |
Longmont Landfill, L.L.C.
|
Delaware | |
Looney Bins, Inc.
|
California | |
M.S.T.S., Inc.
|
Delaware | |
Mahoning Landfill, Inc.
|
Ohio | |
Mass Gravel Inc.
|
Massachusetts |
Page 2
Entity | Jurisdiction | |
Mc Ginnes Industrial Maintenance Corporation
|
Texas | |
McDaniel Landfill, Inc.
|
North Dakota | |
McGill Landfill, Inc.
|
Michigan | |
Meadowfill Landfill, Inc.
|
Delaware | |
Michigan Environs, Inc.
|
Michigan | |
Midwest One Land Corporation
|
Delaware | |
Modern-Mallard Energy, LLC
|
Delaware | |
Modesto Garbage Co., Inc.
|
California | |
Moor Refuse, Inc.
|
California | |
Mountain High Medical Disposal Services, Inc.
|
Utah | |
Mountain Indemnity Insurance Company
|
Vermont | |
Mountainview Landfill, Inc. (MD)
|
Maryland | |
Mountainview Landfill, Inc. (UT)
|
Utah | |
Nassau Landfill, L.L.C.
|
Delaware | |
National Guaranty Insurance Company of Vermont
|
Vermont | |
New England CR L.L.C.
|
Delaware | |
New Milford Landfill, L.L.C.
|
Delaware | |
New Orleans Landfill, L.L.C.
|
Delaware | |
NH/VT Energy Recovery Corporation
|
New Hampshire | |
North Manatee Recycling and Disposal Facility, L.L.C.
|
Florida | |
Northwestern Landfill, Inc.
|
Delaware | |
Nu-Way Live Oak Reclamation, Inc.
|
Delaware | |
Oakridge Landfill, Inc.
|
South Carolina | |
Oakwood Landfill, Inc.
|
South Carolina | |
Okeechobee Landfill, Inc.
|
Florida | |
Ozark Ridge Landfill, Inc.
|
Arkansas | |
P & R Environmental Industries, L.L.C.
|
North Carolina | |
Pacific Waste Management L.L.C.
|
Delaware | |
Palo Alto Sanitation Company
|
California | |
Pappy, Inc.
|
Maryland | |
Peltz H.C., LLC
|
Wisconsin | |
Pen-Rob, Inc.
|
Arizona | |
Penuelas Valley Landfill, Inc.
|
Puerto Rico | |
Peoples Landfill, Inc.
|
Delaware | |
Peterson Demolition, Inc.
|
Minnesota | |
Phoenix Resources, Inc.
|
Pennsylvania | |
Pine Grove Landfill, Inc. (PA)
|
Pennsylvania | |
Pine Tree Acres, Inc.
|
Michigan | |
PPP Corporation
|
Delaware | |
Pulaski Grading, L.L.C.
|
Delaware | |
Quail Hollow Landfill, Inc.
|
Delaware | |
Questquill Limited
|
United Kingdom | |
R & B Landfill, Inc.
|
Georgia | |
RAA Colorado, L.L.C.
|
Colorado | |
RAA Trucking, LLC
|
Wisconsin | |
RCI Hudson, Inc.
|
Massachusetts | |
Recycle America Co., L.L.C.
|
Delaware | |
Recycle America Holdings, Inc.
|
Delaware | |
Redwood Landfill, Inc.
|
Delaware | |
Refuse Services, Inc.
|
Florida | |
Refuse, Inc.
|
Nevada | |
Reliable Landfill, L.L.C.
|
Delaware | |
Remote Landfill Services, Inc.
|
Tennessee | |
Reno Disposal Co.
|
Nevada | |
Resco Holdings L.L.C.
|
Delaware | |
Resource Control Composting, Inc.
|
Massachusetts | |
Resource Control, Inc.
|
Massachusetts | |
Richland County Landfill, Inc.
|
South Carolina | |
Riegel Ridge, LLC
|
North Carolina | |
Riverbend Landfill Co.
|
Oregon | |
Rolling Meadows Landfill, Inc.
|
Delaware | |
RRT Design & Construction Corp.
|
Delaware | |
RRT Empire of Monroe County, Inc.
|
New York | |
RTS Landfill, Inc.
|
Delaware | |
Rust Engineering & Construction Inc.
|
Delaware | |
Rust Engineering (Thailand) Ltd
|
Thailand | |
Rust International Inc.
|
Delaware | |
S & J Landfill Limited Partnership
|
Texas |
Page 3
Entity | Jurisdiction | |
S & S Grading, Inc.
|
West Virginia | |
S. V. Farming Corp.
|
New Jersey | |
S4 Columbia Ridge Recovery, LLC
|
Delaware | |
S4 Energy Chambers Recovery, LLC
|
Delaware | |
S4 Energy Solutions, LLC
|
Delaware | |
Sanifill de Mexico (US), Inc.
|
Delaware | |
Sanifill de Mexico, S.A. de C.V.
|
Mexico | |
Sanifill Power Corporation
|
Delaware | |
SC Holdings, Inc.
|
Pennsylvania | |
Serubam Servicos Urbanos E Ambientais Ltda
|
Brazil | |
SES Bridgeport L.L.C.
|
Delaware | |
Shade Landfill, Inc.
|
Delaware | |
Sierra Estrella Landfill, Inc.
|
Arizona | |
Southern Alleghenies Landfill, Inc.
|
Pennsylvania | |
Southern One Land Corporation
|
Delaware | |
Southern Plains Landfill, Inc.
|
Oklahoma | |
Southern Waste Services, L.L.C.
|
Delaware | |
Spruce Ridge, Inc.
|
Minnesota | |
Stony Hollow Landfill, Inc.
|
Delaware | |
Suburban Landfill, Inc.
|
Delaware | |
Texarkana Landfill, L.L.C.
|
Delaware | |
Texas Pack Rat Austin #1 LLC
|
Texas | |
Texas Pack Rat Dallas #1 LLC
|
Texas | |
Texas Pack Rat Houston #1 LLC
|
Texas | |
Texas Pack Rat Houston #2 LLC
|
Texas | |
Texas Pack Rat Houston #3 LLC
|
Texas | |
Texas Pack Rat San Antonio #1 LLC
|
Texas | |
Texas Pack Rat Service Company LLC
|
Texas | |
The Peltz Group, LLC
|
Wisconsin | |
The Woodlands of Van Buren, Inc.
|
Delaware | |
Thermal Remediation Solutions, L.L.C.
|
Oregon | |
TNT Sands, Inc.
|
South Carolina | |
Trail Ridge Landfill, Inc.
|
Delaware | |
Transamerican Waste Central Landfill, Inc.
|
Delaware | |
Trash Hunters, Inc.
|
Mississippi | |
Tri-County Sanitary Landfill, L.L.C.
|
Delaware | |
TX Newco, L.L.C.
|
Delaware | |
United Waste Systems Leasing, Inc.
|
Michigan | |
United Waste Systems of Gardner, Inc.
|
Massachusetts | |
USA South Hills Landfill, Inc.
|
Pennsylvania | |
USA Valley Facility, Inc.
|
Delaware | |
USA Waste Geneva Landfill, Inc.
|
Delaware | |
USA Waste Landfill Operations and Transfer, Inc.
|
Texas | |
USA Waste of California, Inc.
|
Delaware | |
USA Waste of Pennsylvania, LLC
|
Delaware | |
USA Waste of Texas Landfills, Inc.
|
Delaware | |
USA Waste of Virginia Landfills, Inc.
|
Delaware | |
USA Waste Services of NYC, Inc.
|
Delaware | |
USA Waste-Management Resources, LLC
|
New York | |
USA-Crinc, L.L.C.
|
Delaware | |
UWS Barre, Inc.
|
Massachusetts | |
Valley Garbage and Rubbish Company, Inc.
|
California | |
Verns Refuse Service, Inc.
|
North Dakota | |
Vickery Environmental, Inc.
|
Ohio | |
Vista Landfill, LLC
|
Florida | |
Voyageur Disposal Processing, Inc.
|
Minnesota | |
Warner Company
|
Delaware | |
Waste Away Group, Inc.
|
Alabama | |
Waste Management Arizona Landfills, Inc.
|
Delaware | |
Waste Management Buckeye, L.L.C.
|
Delaware | |
Waste Management Collection and Recycling, Inc.
|
California | |
Waste Management Disposal Services of Colorado, Inc.
|
Colorado | |
Waste Management Disposal Services of Maine, Inc.
|
Maine | |
Waste Management Disposal Services of Maryland, Inc.
|
Maryland | |
Waste Management Disposal Services of Massachusetts, Inc.
|
Massachusetts | |
Waste Management Disposal Services of Oregon, Inc.
|
Delaware | |
Waste Management Disposal Services of Pennsylvania, Inc.
|
Pennsylvania | |
Waste Management Disposal Services of Virginia, Inc.
|
Delaware |
Page 4
Entity | Jurisdiction | |
Waste Management Financing Corporation
|
Delaware | |
Waste Management Holdings, Inc.
|
Delaware | |
Waste Management Inc. of Florida
|
Florida | |
Waste Management Indycoke, L.L.C.
|
Delaware | |
Waste Management International B.V.
|
Netherlands | |
Waste Management International, Inc.
|
Delaware | |
Waste Management International, Ltd.
|
Bermuda | |
Waste Management Municipal Services of California, Inc.
|
California | |
Waste Management National Services, Inc.
|
Delaware | |
Waste Management New England Environmental Transport, Inc.
|
Delaware | |
Waste Management of Alameda County, Inc.
|
California | |
Waste Management of Alaska, Inc.
|
Delaware | |
Waste Management of Arizona, Inc.
|
California | |
Waste Management of Arkansas, Inc.
|
Delaware | |
Waste Management of California, Inc.
|
California | |
Waste Management of Canada Corporation
|
Ontario | |
Waste Management of Carolinas, Inc.
|
North Carolina | |
Waste Management of Colorado, Inc.
|
Colorado | |
Waste Management of Connecticut, Inc.
|
Delaware | |
Waste Management of Delaware, Inc.
|
Delaware | |
Waste Management of Fairless, L.L.C.
|
Delaware | |
Waste Management of Five Oaks Recycling and Disposal Facility, Inc.
|
Delaware | |
Waste Management of Georgia, Inc.
|
Georgia | |
Waste Management of Hawaii, Inc.
|
Delaware | |
Waste Management of Idaho, Inc.
|
Idaho | |
Waste Management of Illinois, Inc.
|
Delaware | |
Waste Management of Indiana Holdings One, Inc.
|
Delaware | |
Waste Management of Indiana Holdings Two, Inc.
|
Delaware | |
Waste Management of Indiana, L.L.C.
|
Delaware | |
Waste Management of Iowa, Inc.
|
Iowa | |
Waste Management of Kansas, Inc.
|
Kansas | |
Waste Management of Kentucky Holdings, Inc.
|
Delaware | |
Waste Management of Kentucky, L.L.C.
|
Delaware | |
Waste Management of Leon County, Inc.
|
Florida | |
Waste Management of Londonderry, Inc.
|
Delaware | |
Waste Management of Louisiana Holdings One, Inc.
|
Delaware | |
Waste Management of Louisiana, L.L.C.
|
Delaware | |
Waste Management of Maine, Inc.
|
Maine | |
Waste Management of Maryland, Inc.
|
Maryland | |
Waste Management of Massachusetts, Inc.
|
Massachusetts | |
Waste Management of Metro Atlanta, Inc.
|
Georgia | |
Waste Management of Michigan, Inc.
|
Michigan | |
Waste Management of Minnesota, Inc.
|
Minnesota | |
Waste Management of Mississippi, Inc.
|
Mississippi | |
Waste Management of Missouri, Inc.
|
Delaware | |
Waste Management of Montana, Inc.
|
Delaware | |
Waste Management of Nebraska, Inc.
|
Delaware | |
Waste Management of Nevada, Inc.
|
Nevada | |
Waste Management of New Hampshire, Inc.
|
Connecticut | |
Waste Management of New Jersey, Inc.
|
Delaware | |
Waste Management of New Mexico, Inc.
|
New Mexico | |
Waste Management of New York, L.L.C.
|
Delaware | |
Waste Management of North Dakota, Inc.
|
Delaware | |
Waste Management of Ohio, Inc.
|
Ohio | |
Waste Management of Oklahoma, Inc.
|
Oklahoma | |
Waste Management of Oregon, Inc.
|
Oregon | |
Waste Management of Pennsylvania Gas Recovery, L.L.C.
|
Delaware | |
Waste Management of Pennsylvania, Inc.
|
Pennsylvania | |
Waste Management of Plainfield, L.L.C.
|
Delaware | |
Waste Management of Rhode Island, Inc.
|
Delaware | |
Waste Management of South Carolina, Inc.
|
South Carolina | |
Waste Management of South Dakota, Inc.
|
South Dakota | |
Waste Management of Texas Holdings, Inc.
|
Delaware | |
Waste Management of Texas, Inc.
|
Texas | |
Waste Management of Tunica Landfill, Inc.
|
Mississippi | |
Waste Management of Utah, Inc.
|
Utah | |
Waste Management of Virginia, Inc.
|
Virginia | |
Waste Management of Washington, Inc.
|
Delaware |
Page 5
Entity | Jurisdiction | |
Waste Management of West Virginia, Inc.
|
Delaware | |
Waste Management of Wisconsin, Inc.
|
Wisconsin | |
Waste Management of Wyoming, Inc.
|
Delaware | |
Waste Management Partners, Inc.
|
Delaware | |
Waste Management Recycle Asia, L.L.C.
|
Ohio | |
Waste Management Recycling and Disposal Services of California, Inc.
|
California | |
Waste Management Recycling of New Jersey, L.L.C.
|
Delaware | |
Waste Management Security, L.L.C.
|
Delaware | |
Waste Management Service Center, Inc.
|
Delaware | |
Waste Management, Inc. of Tennessee
|
Tennessee | |
Waste Resources of Tennessee, Inc.
|
Tennessee | |
Waste Services of Kentucky, L.L.C.
|
Delaware | |
Waste to Energy Holdings, Inc.
|
Delaware | |
Wastech Inc.
|
Nevada | |
WESI Baltimore Inc.
|
Delaware | |
WESI Capital Inc.
|
Delaware | |
WESI Peekskill Inc.
|
Delaware | |
WESI Westchester Inc.
|
Delaware | |
Westchester Resco Associates, L.P.
|
Delaware | |
Western One Land Corporation
|
Delaware | |
Western Waste Industries
|
California | |
Western Waste of Texas, L.L.C.
|
Delaware | |
Wheelabrator Baltimore L.L.C.
|
Delaware | |
Wheelabrator Baltimore, L.P.
|
Maryland | |
Wheelabrator Bridgeport, L.P.
|
Delaware | |
Wheelabrator Cedar Creek Inc.
|
Delaware | |
Wheelabrator Chambers Inc.
|
Delaware | |
Wheelabrator China Holdings, Limited
|
Hong Kong | |
Wheelabrator Claremont Company, L.P.
|
Delaware | |
Wheelabrator Claremont Inc.
|
Delaware | |
Wheelabrator Concord Company, L.P.
|
Delaware | |
Wheelabrator Concord Inc.
|
Delaware | |
Wheelabrator Connecticut Inc.
|
Delaware | |
Wheelabrator Culm Services Inc.
|
Delaware | |
Wheelabrator Environmental Systems Inc.
|
Delaware | |
Wheelabrator Falls Inc.
|
Delaware | |
Wheelabrator Frackville Energy Company Inc.
|
Delaware | |
Wheelabrator Frackville Properties Inc.
|
Delaware | |
Wheelabrator Frederick Inc.
|
Delaware | |
Wheelabrator Fuel Services Inc.
|
Delaware | |
Wheelabrator Gloucester Company, L.P.
|
New Jersey | |
Wheelabrator Gloucester Inc.
|
Delaware | |
Wheelabrator Guam Inc.
|
Delaware | |
Wheelabrator Hudson Falls L.L.C.
|
Delaware | |
Wheelabrator Lassen Inc.
|
Delaware | |
Wheelabrator Lisbon Inc.
|
Delaware | |
Wheelabrator McKay Bay Inc.
|
Florida | |
Wheelabrator Millbury Inc.
|
Delaware | |
Wheelabrator Netherlands B.V.
|
Netherlands | |
Wheelabrator New Hampshire Inc.
|
Delaware | |
Wheelabrator New Jersey Inc.
|
Delaware | |
Wheelabrator NHC Inc.
|
Delaware | |
Wheelabrator North Andover Inc.
|
Delaware | |
Wheelabrator North Broward Inc.
|
Delaware | |
Wheelabrator Norwalk Energy Company Inc.
|
Delaware | |
Wheelabrator Penacook Inc.
|
Delaware | |
Wheelabrator Pinellas Inc.
|
Delaware | |
Wheelabrator Portsmouth Inc.
|
Delaware | |
Wheelabrator Putnam Inc.
|
Delaware | |
Wheelabrator Ridge Energy Inc.
|
Delaware | |
Wheelabrator Saugus Inc.
|
Delaware | |
Wheelabrator Shasta Energy Company Inc.
|
Delaware | |
Wheelabrator Sherman Energy Company, G.P.
|
Maine | |
Wheelabrator Sherman Station L.L.C.
|
Delaware | |
Wheelabrator Sherman Station One Inc.
|
Delaware | |
Wheelabrator South Broward Inc.
|
Delaware | |
Wheelabrator Spokane Inc.
|
Delaware | |
Wheelabrator Technologies Inc.
|
Delaware |
Page 6
Entity | Jurisdiction | |
Wheelabrator Technologies International Inc.
|
Delaware | |
Wheelabrator Westchester, L.P.
|
Delaware | |
White Lake Landfill, Inc.
|
Michigan | |
Williams Landfill, L.L.C.
|
Delaware | |
Willow Oak Landfill, LLC
|
Georgia | |
WM Arizona Operations, L.L.C.
|
Delaware | |
WM Asphalt Products, LLC
|
Delaware | |
WM Bagco, LLC
|
Delaware | |
WM Conversion Energy, LLC
|
Delaware | |
WM Conversion Fund, LLC
|
Delaware | |
WM Energy Resources, Inc.
|
Delaware | |
WM Energy Solutions, Inc.
|
Delaware | |
WM Green Squad, LLC
|
Delaware | |
WM GreenOps, LLC
|
Delaware | |
WM GTL, Inc.
|
Delaware | |
WM GTL, LLC
|
Delaware | |
WM Healthcare Solutions, Inc.
|
Delaware | |
WM Illinois Renewable Energy, L.L.C.
|
Delaware | |
WM International Holdings, Inc.
|
Delaware | |
WM International Services (UK) Limited
|
England | |
WM LampTracker, Inc.
|
Delaware | |
WM Landfills of Ohio, Inc.
|
Delaware | |
WM Landfills of Tennessee, Inc.
|
Delaware | |
WM Leasing of Arizona, L.L.C.
|
Delaware | |
WM Leasing of Texas, L.P.
|
Delaware | |
WM LNG, Inc.
|
Delaware | |
WM Middle Tennessee Environmental Center, L.L.C.
|
Delaware | |
WM Mobile Bay Environmental Center, Inc.
|
Delaware | |
WM Nevada Renewable Energy, L.L.C.
|
Delaware | |
WM of Texas, L.L.C.
|
Delaware | |
WM Organic Growth, Inc.
|
Delaware | |
WM Pack-Rat of California, LLC
|
Delaware | |
WM Pack-Rat of Illinois, LLC
|
Delaware | |
WM Pack-Rat of Kentucky, LLC
|
Delaware | |
WM Pack-Rat of Maryland, LLC
|
Delaware | |
WM Pack-Rat of Massachusetts, LLC
|
Delaware | |
WM Pack-Rat of Michigan, LLC
|
Delaware | |
WM Pack-Rat of Nevada, LLC
|
Delaware | |
WM Pack-Rat of Ohio, LLC
|
Delaware | |
WM Pack-Rat of Rhode Island, LLC
|
Delaware | |
WM Pack-Rat, LLC
|
Delaware | |
WM Partnership Holdings, Inc.
|
Delaware | |
WM Quebec Inc.
|
Canada | |
WM RA Canada Inc.
|
Ontario | |
WM Recycle America, L.L.C.
|
Delaware | |
WM Recycle Europe, L.L.C.
|
Delaware | |
WM Renewable Energy, L.L.C.
|
Delaware | |
WM Resource Recovery & Recycling Center, Inc.
|
Delaware | |
WM Resources, Inc.
|
Pennsylvania | |
WM Safety Services, L.L.C.
|
Delaware | |
WM Security Services, Inc.
|
Delaware | |
WM Services SA
|
Argentina | |
WM Storage II, Inc.
|
Delaware | |
WM Storage, Inc.
|
Delaware | |
WM Texas Pack Rat, LLC
|
Delaware | |
WM Trash Monitor Plus, L.L.C.
|
Delaware | |
WM WY Energy Resources, LLC
|
Delaware | |
WMI Mexico Holdings, Inc.
|
Delaware | |
WMNA Container Recycling, L.L.C.
|
Delaware | |
WMST Illinois, L.L.C.
|
Illinois | |
WTI Air Pollution Control Inc.
|
Delaware | |
WTI Financial L.L.C.
|
Delaware | |
WTI International Holdings Inc.
|
Delaware | |
WTI Rust Holdings Inc.
|
Delaware | |
WTI UK LTD
|
United Kingdom |
Page 7
By: |
/s/
DAVID
P. STEINER
|
By: |
/s/
ROBERT
G. SIMPSON
|
By: |
/s/
DAVID
P. STEINER
|
By: |
/s/
ROBERT
G. SIMPSON
|