Waste Management 2010 Annual Report Download

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Solutions for a Changing World
2010 ANNUAL REPORT

Table of contents

  • Page 1
    Solutions for a Changing World 2010 ANNUAL REPORT

  • Page 2
    ...America rely on Waste Management to pick up and dispose of their trash safely and efficiently. But the way the world thinks about waste is changing. People depend on us to help them reduce, reuse and recycle the waste they generate. Businesses are demanding new waste strategies that benefit both the...

  • Page 3
    ... company, focused on growth. We worked hard to reduce costs, we maintained our discipline in pricing our services, and we strengthened our sales and marketing efforts. We made investments in information technologies that help us serve customers better, in green technologies that help us manage...

  • Page 4
    ... filled, customers can call or go online to schedule pickup service by Waste Management's local operation. Bagster is now sold in over 4,000 retail locations across the U.S. and Canada, including ACE Hardware, The Home Depot, Lowe's, TrueValue and others. business. Our continuing investment in new...

  • Page 5
    ... organic wastes into a high-octane transportation fuel •Developing processes to convert syngas made from municipal solid waste into chemical products, through a joint development agreement with Genomatica SOLUTION: Less Waste, More Value A major brewing company turned to Waste Management to help...

  • Page 6
    ...a changing world. We will work to grow our markets by focusing on customer-driven solutions, making strategic acquisitions, maintaining our pricing discipline and making the company operate more efficiently. We will continue to extract more value from the waste stream, invest in greener technologies...

  • Page 7
    Proxy Statement and Form 10-K

  • Page 8
    ... vote on executive compensation; • To vote on a proposal to amend our By-laws to allow stockholders who have held at least a 25% net long position in our Common Stock for one year to call special stockholder meetings; and • To conduct other business that is properly raised at the meeting. Only...

  • Page 9
    ... ...Nominating and Governance Committee ...Related Party Transactions ...Special Committee ...Board of Directors Governing Documents ...Non-Employee Director Compensation ...Election of Directors (Item 1 on the Proxy Card) ...Director Nominee and Officer Stock Ownership ...Persons Owning More than...

  • Page 10
    ... the website referred to in the Notice or request that a printed set of the proxy materials be sent to them. Internet distribution of our proxy materials is designed to expedite receipt by stockholders, lower the costs of the annual meeting, and conserve natural resources. Record Date Quorum Shares...

  • Page 11
    ... of the independent registered public accounting firm; • FOR approval of our executive compensation; • FOR conducting future advisory votes on executive compensation annually; and • FOR the proposal to amend our By-laws to allow stockholders to call special stockholder meetings. If you give us...

  • Page 12
    ... separate copies. This procedure helps reduce our printing costs and postage fees. If you wish to receive a separate copy of this Proxy Statement and the Annual Report, please contact: Waste Management, Inc., Corporate Secretary, 1001 Fannin Street, Suite 4000, Houston, Texas 77002, telephone 713...

  • Page 13
    ...environment, exposures affecting the Company's operations and the Company's plans to address such risks. In addition to information regarding general updates to the Company's operational and financial condition, management reports to the Board on a number of specific issues meant to inform the Board...

  • Page 14
    ... process is in place, and quarterly reports are made to the Audit Committee on all financial and compliance risks in accordance with New York Stock Exchange requirements. Independence of Board Members The Board of Directors has determined that each of the following seven non-employee director...

  • Page 15
    ..., providing waste management services in the ordinary course of business and the Company's subsidiaries purchasing goods and services in the ordinary course of business. The categorical standards our Board uses in determining independence are included in our Corporate Governance Guidelines, which...

  • Page 16
    ... material changes to our accounting principles and matters required to be communicated by Public Company Accounting Oversight Board (United States) Audit Standard AU Section 380 Communication with Audit Committees; • Review our financial reporting, accounting and auditing practices with management...

  • Page 17
    ... & Young, the Company's independent registered public accounting firm for fiscal year 2010, those matters required to be discussed by Public Company Accounting Oversight Board (United States) Audit Standard AU Section 380 Communication with Audit Committees, including information regarding the scope...

  • Page 18
    ...• Conduct an annual evaluation of our Chief Executive Officer by all independent directors to set his compensation; • Oversee the administration of all of our equity-based incentive plans; • Recommend to the full Board new Company compensation and benefit plans or changes to our existing plans...

  • Page 19
    ... MD&C Committee. No member of the MD&C Committee was an officer or employee of Waste Management during 2010; no member of the MD&C Committee is a former officer of the Company; and during 2010, none of our executive officers served as a member of a board of directors or compensation committee of any...

  • Page 20
    ... and payments under directors' and officers' indemnification insurance policies; (v) any transaction between the Company and any entity in which a related party has a relationship solely as a director, a less than 5% equity holder, or an employee (other than an executive officer); and (vi) purchases...

  • Page 21
    ... Conduct free of charge by contacting the Corporate Secretary, c/o Waste Management, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002 or by accessing the "Corporate Governance" section of the "Investor Relations" page on our website at http://www.wm.com. Non-Employee Director Compensation...

  • Page 22
    ... long-term success of the Company. Equity Compensation Non-employee directors receive an annual grant of shares of Common Stock under the Company's 2009 Stock Incentive Plan. There are no restrictions on the shares; however, non-employee directors are subject to ownership guidelines that establish...

  • Page 23
    .... Ms. Cafferty has significant expertise in areas of public policy, strategic planning, and government and community relations through her 34-year professorship with the University of Chicago, as well as her experience serving on public boards and committees at the federal, state and local levels...

  • Page 24
    ..., operations and business critical functions. He also brings over eight years of experience as a member of a public company board of directors. Mr. Gross was a founder of American Management Systems, Inc., a global business and information technology firm, where he was principal executive officer...

  • Page 25
    ...Director of FedEx Corporation since 2009. Mr. Steiner is our President and Chief Executive Officer and, in that capacity, brings extensive knowledge of the details of our Company and its employees, as well as the front-line experiences of running our Company, to his service as a member of our Board...

  • Page 26
    ... Meeting, as well as the number owned by all directors and executive officers as a group. The table also includes information about restricted stock units, stock options and phantom stock granted under various compensation and benefit plans. We did not include information about performance share...

  • Page 27
    ... to the executive officers under our 2009 Stock Incentive Plan. The restricted stock units will be paid out in shares of our Common Stock upon vesting, subject to forfeiture in certain circumstances. PERSONS OWNING MORE THAN 5% OF WASTE MANAGEMENT COMMON STOCK The table below shows information for...

  • Page 28
    ... Management Company reports that it may be deemed to be the beneficial owner of 23,990,195 shares of Common Stock in its capacity as investment adviser. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The federal securities laws require our executive officers and directors to file reports...

  • Page 29
    ... Customer Service, Operations, CNO Financial Group Inc. (insurance holding company) from October 2008 to December 2010. • Senior Vice President - National Practice Leader U.S., Aon Corporation (provider of risk management services, insurance and reinsurance brokerage and human resources consulting...

  • Page 30
    ... Age Positions Held and Business Experience for Past Five Years Carl V. Rush, Jr ... 55 • Senior Vice President - Organic Growth since December 2010. • Vice President - Organic Growth from January 2006 to December 2010. • Senior Vice President and Chief Financial Officer since March 2004...

  • Page 31
    ... next year's executive compensation discussion and analysis, these changes include: • Increasing the weighting of stock options in our long-term incentive plan awards to 70% stock options and 30% performance share units, which better aligns the Company with equity compensation practices of growth...

  • Page 32
    ...long-term incentive opportunities should be within a range around the competitive median. Highlights of 2010 Named Executive Officer Compensation • The Company's salary freeze, put into effect in early 2009, was lifted, and each of Mr. Steiner and Mr. Simpson received a 2% increase in base pay, in...

  • Page 33
    ...our 2009 Stock Incentive Plan. For several years, it has been our practice to grant performance share units with a performance period of three years to motivate our named executive officers to act in a manner that can increase the value of the Company over time. The number of performance share units...

  • Page 34
    ... of 2010 in connection with the annual grant of long-term equity awards at a regularly scheduled MD&C Committee meeting. Post-Employment Compensation. The compensation our named executives receive post-employment is based on provisions included in individual equity award agreements, retirement plan...

  • Page 35
    ... total compensation, including the base salary, target annual bonus award opportunities, long-term incentive award opportunities and other benefits, including potential severance payments for each of our named executive officers. At a regularly scheduled meeting each year, the MD&C Committee reviews...

  • Page 36
    ... the 2010 executive compensation program, the independent consultant provided the MD&C Committee with a competitive analysis of total direct compensation levels and compensation mixes for our executive officers, using information from: • market data of 61 general industry companies with...

  • Page 37
    ... Steiner's total compensation. Chief Executive Officer 17% 39% 19% 64% 28% 33% Senior Group Vice Presidents (average) Base Salary Annual Cash Incentive Long-Term Incentive In the process of establishing the 2011 executive compensation program, the MD&C Committee determined that the compensation of...

  • Page 38
    ...' individual performance and impact on the Company. In early 2009, the MD&C Committee determined that because of economic conditions, no named executive officers would receive an annual merit increase; however, that salary freeze was lifted for all Company employees in 2010, and each of Mr. Steiner...

  • Page 39
    ... average rate per unit increase, based on commercial, residential and industrial collection operations; transfer stations; and municipal solid waste and construction and demolition volumes at our landfills. Named Executive Officer Pricing Improvement Target Required* Corporate: Mr. Steiner ...Mr...

  • Page 40
    ... expected selling and administrative costs. Based on this information and in light of general economic conditions and indicators in early 2010, the MD&C Committee determined that the target performance under the annual bonus plan should be increased as compared to the prior year's target and actual...

  • Page 41
    ... closed sites; (ii) the accounting effect of changes in ten-year Treasury rates, which are used to discount remediation reserves; (iii) expense charges incurred as a result of employees of five bargaining units agreeing to our proposal to withdraw them from an under-funded multiemployer pension plan...

  • Page 42
    ... of the named executives' responsibility for meeting the Company's strategic objectives. Once dollar values of targeted awards were set, those values were divided by the average of the high and low price of our Common Stock over the 30 trading days preceding the MD&C Committee meeting at which the...

  • Page 43
    ... annual grant of long-term equity awards at a regularly scheduled MD&C Committee meeting in order to direct focus on increasing the market value of our Common Stock. The MD&C Committee believes use of stock options is appropriate to support the growth strategy of the Company. The number of options...

  • Page 44
    ... new compensation arrangements that would obligate the Company to pay a death benefit or gross up-payment to an executive officer unless such arrangement receives stockholder approval. The policy is subject to certain exceptions, including benefits generally available to managementlevel employees...

  • Page 45
    ... of our executive compensation philosophy, programs and decisions. • As described in the CD&A, equity awards granted to the named executive officers in 2010 include performance share units earned over a three-year performance period, after which shares of Common Stock may be issued depending on...

  • Page 46
    Summary Compensation Table Salary ($) Stock Awards ($)(1) Option Awards ($)(2) Non-Equity All Other Incentive Plan Compensation Compensation ($)(4) ($)(3) Total ($) Name and Principal Position Year David P. Steiner ...2010 1,073,077 2,331,306 1,943,017 President and Chief Executive Officer 2009 ...

  • Page 47
    ... variable costs. We own or operate our aircraft primarily for business use; therefore, we do not include the fixed costs associated with the ownership or operation such as pilots' salaries, purchase costs and non-trip related maintenance. Information concerning Mr. O'Donnell's severance payment can...

  • Page 48
    ...the number of shares of Common Stock potentially issuable upon the exercise of options granted under our 2009 Stock Incentive Plan. Please see "Compensation Discussion and Analysis - Named Executive's 2010 Compensation Program - Long-Term Equity Incentives - Stock Options" for additional information...

  • Page 49
    ... were cancelled at the time of his termination. Outstanding Equity Awards at December 31, 2010 Option Awards Stock Awards(1) Equity Incentive Equity Plan Incentive Awards: Plan Market or Awards: Payout Number of Value of Unearned Unearned Shares, Shares, Units or Units or Other Other Rights That...

  • Page 50
    ...of our Common Stock on the date of payment. Mr. Woods elected to defer the receipt of the shares until he leaves the Company. Information about deferrals of performance share units can be found in the "Compensation Discussion and Analysis - Key Elements of Our Compensation Program - Long-Term Equity...

  • Page 51
    ... represent the general market gains (or losses) on investments, rather than amounts or rates set by the Company for the benefit of the named executives. (4) Accounts are distributed as either a lump sum payment or in annual installments (i) when the employee has reached at least 65 years of age...

  • Page 52
    ...incentive payments and performance share units when the recipient's personal misconduct results in a restatement or otherwise affects the payout calculations for the awards. The terms "Cause," "Good Reason," and "Change-in-Control" as used in the table below are defined in the executives' employment...

  • Page 53
    ... one-half payable in bi-weekly installments over a twoyear period) ...• Continued coverage under health and welfare benefit plans for two years ...• Prorated payment of performance share units . . Total ...Severance Benefits • Three times base salary plus target annual cash bonus, paid in lump...

  • Page 54
    ...Benefits • Two times base salary plus target annual cash bonus (one-half payable in lump sum; one-half payable in bi-weekly installments over a twoyear period) ...• Continued coverage under health and welfare benefit plans for two years ...• Prorated payment of performance share units. . Total...

  • Page 55
    ...; one-half payable in bi-weekly installments over a twoyear period) ...• Continued coverage under health and welfare benefit plans for two years ...• Prorated payment of performance share units. . Total ...Severance Benefits • Three times base salary plus target annual cash bonus, paid in lump...

  • Page 56
    ... Continued coverage under benefit plans for two years • Health and Welfare Benefit Plans ...• Deferred Savings Plan Contributions ...• 401(k) Contributions ...• Prorated payment of performance share units Total ...Severance Benefits • Two times base salary plus target annual cash bonus...

  • Page 57
    ... The insurance benefit is a payment by an insurance company under the terms of an insurance policy pursuant to Waste Management's practice to provide all benefits eligible employees with life insurance that pays one times annual base salary upon death. (3) The performance share unit award agreements...

  • Page 58
    ... earned in 2010 prorated to date of termination payable in lump sum in March 2011 ...Value of Company match in Deferral Plan for two years payable in lump sum ...Value of group long-term disability and group life insurance coverage for two years payable over two years...Value of group health and...

  • Page 59
    ...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 MD&C Committee may decide; provided, that the exercise price of options...

  • Page 60
    ...: 2010 2009 (In millions) Audit Fees ...Audit-Related Fees ...Tax Fees ...All Other Fees ... ... $5.7 1.3 0.0 0.0 $7.0 $7.1 1.2 0.1 0.0 $8.4 Total ... Audit includes fees for the annual audit, reviews of the Company's Quarterly Reports on Form 10-Q, work performed to support the Company's debt...

  • Page 61
    ... new policy that prohibits the Company from entering into new agreements with executive officers that provide for certain death benefits or tax gross-up payments. The Board and the MD&C Committee believe that the Company's executive compensation program effectively achieved its objectives and helped...

  • Page 62
    ... compensation that occurs annually is the most appropriate interval. Conducting an advisory vote on executive compensation every year will enhance stockholder communication and provide the Company with regular feedback on its executive compensation practices and philosophy. Accordingly, our Board...

  • Page 63
    ..., which results in significant legal, printing and mailing expenses, as well as other costs normally associated with holding a meeting of stockholders. Additionally, preparing for stockholder meetings requires significant attention of the Company's directors, officers and employees, diverting their...

  • Page 64
    OTHER MATTERS We do not intend to bring any other matters before the Annual Meeting, nor do we have any present knowledge that any other matters will be presented by others for action at the meeting. If any other matters are properly presented, your proxy card authorizes the people named as proxy ...

  • Page 65
    ... (A) the name and address, as they appear in the Corporation's stock ledger, of each stockholder signing such request (or on whose behalf the Stockholder Special Meeting Request is signed), (B) the class, if applicable, and the number of shares of common stock of the Corporation that are owned of...

  • Page 66
    ... executive offices. In fixing a date and time for any Stockholder Requested Special Meeting, the Board of Directors may consider such factors as it deems relevant within the good faith exercise of business judgment, including, without limitation, the nature of the matters to be considered, the facts...

  • Page 67
    ...was computed by using the closing price of the common stock as of that date on the New York Stock Exchange ("NYSE"). (For purposes of calculating this amount only, all directors and executive officers of the registrant have been treated as affiliates.) The number of shares of Common Stock, $0.01 par...

  • Page 68
    ...9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...Item 9A. Controls and Procedures ...Item 9B. Other Information ...Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation...

  • Page 69
    ...our recycling operations, we provide cost-efficient, environmentally sound programs for municipalities, businesses and households across the U.S. and Canada. In addition to traditional waste operations, we are also expanding to increase the service offerings we provide for our customers. Our Company...

  • Page 70
    ... each year; • Grow our customer loyalty, in part through the use of enabling technologies; • Grow into new markets by investing in greener technologies; and • Pursue initiatives that improve our operations and cost structure. We believe that execution of our strategy, including making the...

  • Page 71
    ... are carefully planned to maintain environmentally safe conditions and to maximize the use of the airspace. All solid waste management companies must have access to a disposal facility, such as a solid waste landfill. The significant capital requirements of developing and operating a landfill serve...

  • Page 72
    ... to the prices charged for changes in market conditions such as inflation, electricity prices and other general market factors. During 2010 and 2009, several of our long-term energy contracts and short-term pricing arrangements expired, significantly increasing our waste-to-energy revenues...

  • Page 73
    ... report for additional information about the Company's current considerations related to the management of this market exposure. We continue to look at opportunities to expand our waste-to-energy business. In 2010, we made two investments which increased the total assets of our Wheelabrator Group...

  • Page 74
    ...solutions and services include the collection of project waste, including construction debris and household or yard waste, through our Bagster» program; the development, operation and marketing of plasma gasification facilities; operation of a landfill gas-to-liquid natural gas plant; solar powered...

  • Page 75
    ..., post-closure and environmental remedial obligations at many of our landfills. We establish financial assurance using surety bonds, letters of credit, insurance policies, trust and escrow agreements and financial guarantees. The type of assurance used is based on several factors, most importantly...

  • Page 76
    ...$3,046 Total insurance policies ...Funded trust and escrow accounts(e) ...Financial guarantees(f) ...Total financial assurance ... (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...

  • Page 77
    ... various other federal, state and local environmental, zoning, transportation, land use, health and safety agencies in the United States and various agencies in Canada. Many of these agencies regularly examine our operations to monitor compliance with these laws and regulations and have the power to...

  • Page 78
    ... 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 2010, the EPA issued...

  • Page 79
    ...or operating costs. See Item 1A. Risk Factors - "The adoption of climate change legislation or regulations restricting emissions of "greenhouse gases" could increase our costs to operate." The EPA has issued new source performance standards and emission guidelines for large and small municipal waste...

  • Page 80
    ... the number or amount of services requested by customers and our ability to implement our pricing strategy. In addition to disruption in the credit markets, recent and continuing economic conditions have negatively affected business and consumer spending generally. If our commercial customers do...

  • Page 81
    ... forth above, implementation of our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, increased operating costs or expenses and changes in industry trends. Further...

  • Page 82
    ...become involved in legal and administrative proceedings relating to land use and environmental laws and regulations. These include proceedings in which: • agencies of federal, state, local or foreign governments seek to impose liability on us under applicable statutes, sometimes involving civil or...

  • Page 83
    ... in the United States and Canada have a substantial impact on our business, and compliance with such regulations is costly. A large number of complex laws, rules, orders and interpretations govern environmental protection, health, safety, land use, zoning, transportation and related matters. Among...

  • Page 84
    ... conditions and environmental concerns. We have seen average quarterly fuel prices increase by as much as 30% on a year-over-year basis and decrease by as much as 47% on a year-over-year basis within the last two years. We need fuel to run our collection and transfer trucks and our equipment used...

  • Page 85
    ... insurance coverages that are customary for a company our size. We use these programs to mitigate risk of loss, thereby enabling us to manage our self-insurance exposure associated with claims. The inability of our insurers to meet their commitments in a timely manner and the effect of significant...

  • Page 86
    ... development of new service offerings and lines of business, it is reasonably possible that our revenues and our operating margins could be negatively affected due to disposal alternatives. Our operating expenses could increase as a result of labor unions organizing or changes in regulations related...

  • Page 87
    ... in implementing new systems can also affect our ability to realize projected or expected cost savings. Additionally, any systems failures could impede our ability to timely collect and report financial results in accordance with applicable laws and regulations. If we are not able to develop and...

  • Page 88
    Our capital requirements could increase our expenses or cause us to change our growth and development plans. Recent economic conditions have reduced our cash flows from operations and could do so in the future. If impacts on our cash flows from operations are significant, we may reduce or suspend ...

  • Page 89
    ... power production plants ... 210 26 35 271 294 98 9 17 5 211 26 36 273 310 90 8 16 5 The following table provides certain information by Group regarding the 236 landfills owned or operated through lease agreements and a count, by Group, of contracted disposal sites as of December 31, 2010...

  • Page 90
    ..., the closing sale price as reported on the NYSE was $38.14 per share. The number of holders of record of our common stock at February 10, 2011 was 13,922. The graph below shows the relative investment performance of Waste Management, Inc. common stock, the Dow Jones Waste & Disposal Services Index...

  • Page 91
    ... table summarizes common stock repurchases made during the fourth quarter of 2010: Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share(a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Maximum Dollar...

  • Page 92
    ... Financial Statements included in this report and in previous annual reports we filed with the SEC. This information should be read together with those Consolidated Financial Statements and the notes thereto. The adoption of new accounting pronouncements, changes in certain accounting policies and...

  • Page 93
    ... to higher customer rebates because of recyclable commodity prices; higher fuel prices; increases in subcontractor costs associated with our oil spill clean-up services along the Gulf Coast; and increases in our landfill operating costs; • Selling, general and administrative expenses increased by...

  • Page 94
    ... operations of an inactive landfill in California. These items had a negative impact of $0.10 on our diluted earnings per share; and • The recognition of pre-tax charges of $50 million related to our 2009 restructuring, primarily related to severance and benefit costs. These restructuring charges...

  • Page 95
    ...April 2010. Payments made in 2009 related to severance and benefits costs associated with our 2009 restructuring also affected the comparability of our operating cash flow for the periods presented. The decrease in capital expenditures in 2010 compared with 2009 can generally be attributed to timing...

  • Page 96
    ...for each event are amortized over the related capacity associated with the event as waste is disposed of at the landfill. We review these costs annually, or more often if significant facts change. Changes in estimates, such as timing or cost of construction, for capping events immediately impact the...

  • Page 97
    ... 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...

  • Page 98
    ...we were an owner, operator, transporter, or generator at the site, the amount and type of waste hauled to the site and the number of years we were associated with the site. Next, we review the same type of information with respect to other named and unnamed PRPs. Estimates of the cost for the likely...

  • Page 99
    ... comparable to our operating segments. The income approach is based on the long-term projected future cash flows of our operating segments. We discount the estimated cash flows to present value using a weighted-average cost of capital that considers factors such as the timing of the cash...

  • Page 100
    ...taking into account our cost of loading, transporting and disposing of the solid waste at a disposal site. Recycling revenue generally consists of tipping fees and the sale of recyclable commodities to third parties. The fees we charge for our collection, disposal, transfer and recycling services 33

  • Page 101
    ... in the consolidated financial statements. The mix of operating revenues from our major lines of business is reflected in the table below (in millions): Years Ended December 31, 2010 2009 2008 Collection ...Landfill ...Transfer ...Wheelabrator . . Recycling ...Other ...Intercompany . ... $ 8,247...

  • Page 102
    ...to exclude the impacts of divestitures: Denominator 2010 2009 Related-business revenues: Collection, landfill and transfer ...Waste-to-energy disposal ...Collection and disposal ...Recycling commodities ...Electricity ...Fuel surcharges and mandated fees ...Total Company ...(ii) $ 9,999 413 10,412...

  • Page 103
    ... and environmental and service fee increases, but also (i) certain average price changes related to the overall mix of services, which are due to both the types of services provided and the geographic locations where our services are provided; (ii) changes in average price from new and lost business...

  • Page 104
    ... strategic growth opportunities in new, complementary lines of business. Divestitures accounted for decreased revenues of $2 million and $37 million for the years ended December 31, 2010 and 2009, respectively. Operating Expenses Our operating expenses include (i) labor and related benefits...

  • Page 105
    ... - In both 2010 and 2009, we experienced cost increases attributable to recently acquired businesses and our various growth and business development initiatives. These cost increases have affected each of the operating cost categories identified in the table below. Fuel price changes - Higher market...

  • Page 106
    ... of volume declines. Landfill operating costs - Increases in these costs in the current year were due, in part, to the recognition of additional estimated expense associated with environmental remediation liabilities of $50 million at four closed sites during 2010. The changes in this category for...

  • Page 107
    ... by our annual incentive plans was stronger in 2010 compared with 2009; (iv) increased contract labor costs as a result of our current focus on optimizing our information technology systems; (v) increased severance costs; and (vi) higher non-cash compensation costs incurred for equity awards granted...

  • Page 108
    ... conditions. Additionally, contract labor costs incurred for various Corporate support functions were lower during 2009 than in 2008. Professional fees - In 2010, our professional fees increased due to consulting fees, driven primarily by improvements we are making to our information technology...

  • Page 109
    ... and secondary processing facilities was transferred from our Waste Management Recycle America, or WMRA, organization to our four geographic Groups. By integrating the management of our recycling facilities' operations with our other solid waste business, we are able to more efficiently provide...

  • Page 110
    ... operations in our Southern Group. Asset Impairments - Through December 31, 2008, we capitalized $70 million of accumulated costs associated with the development of a new waste and recycling revenue management system. A significant portion of these costs was specifically associated with the purchase...

  • Page 111
    ... 31, 2010, 2009 and 2008 are summarized below: Eastern - During 2009, the Group recognized (i) an $18 million increase in revenues and income from operations associated with an oil and gas lease at one of our landfills; and (ii) a $9 million charge related to bargaining unit employees in New Jersey...

  • Page 112
    ..., which had a significant impact on the Group's results in 2009 due to the expiration of several long-term energy contracts and short-term pricing arrangements; (ii) an increase in costs for international and domestic business development activities; and (iii) an increase in "Operating" expenses of...

  • Page 113
    ... charges during 2009; • a significant increase in "Selling, general and administrative" expenses during 2010 as result of cost increases related to our equity compensation, consulting fees, bonus expense, annual salary and wage increases and headcount increases to support the Company's strategic...

  • Page 114
    ... landfill gas to third-party owner/operators. The operating results of our landfill gas-to-energy business are included within our geographic reportable segments and "Other". (b) Includes businesses and entities we have acquired or invested in through our organic growth group's business development...

  • Page 115
    ... company established to invest in and manage a refined coal facility. The facility's refinement processes qualify for federal tax credits which we expect to realize through 2019 in accordance with Section 45 of the Internal Revenue Code. The Small Business Jobs Act, signed into law in September 2010...

  • Page 116
    ... related to third parties' equity interests in two limited liability companies that own three waste-to-energy facilities operated by our Wheelabrator Group. However the comparison of these amounts for the reported periods has been affected by (i) our January 2010 acquisition of a controlling...

  • Page 117
    ... 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...

  • Page 118
    ...landfill. Waste types that are frequently identified for beneficial use include green waste for composting and clean dirt for on-site construction projects. When a landfill we own or operate receives certification of closure from the applicable regulatory agency, we generally transfer the management...

  • Page 119
    ... in landfill waste volumes, changes in environmental requirements and other factors impacting landfill operations. Landfill and Environmental Remediation Liabilities - As we accept waste at our landfills, we incur significant asset retirement obligations, which include liabilities associated with...

  • Page 120
    ... liquidity and our capital resources, enabling us to plan for our present needs and fund unbudgeted business activities that may arise during the year as a result of changing business conditions or new opportunities. In addition to our working capital needs for the general and administrative costs...

  • Page 121
    ... funds for approved construction and equipment expenditures and to a decrease in new tax-exempt borrowings. Debt - We use long-term borrowings in addition to the cash we generate from operations as part of our overall financial strategy to support and grow our business. We primarily use senior notes...

  • Page 122
    ...associated with the $2.0 billion revolving credit facility that was executed in June 2010. Summary of Cash Flow Activity The following is a summary of our cash flows for the years ended December 31 (in millions): 2010 2009 2008 Net cash provided by operating activities ...Net cash used in investing...

  • Page 123
    ... of senior notes in November 2009 to support acquisitions and investments made throughout 2010; (ii) significantly higher costs related to the execution and maintenance of our revolving credit facility, which was refinanced in June 2010; and (iii) a decrease in benefits to interest expense provided...

  • Page 124
    ...primarily related to a $142 million payment made to acquire a 40% equity investment in Shanghai Environment Group, a subsidiary of Shanghai Chengtou Holding Co., Ltd. As a joint venture partner in SEG, we will participate in the operation and management of waste-to-energy and other waste services in...

  • Page 125
    ... condition, cash required for future acquisitions and investments and other factors deemed relevant. • Proceeds from the exercise of common stock options- The exercise of common stock options and the related excess tax benefits generated a total of $54 million of financing cash inflows during 2010...

  • Page 126
    ... landfills. (b) The amounts reported here represent the scheduled principal payments related to our long-term debt, excluding related interest. Refer to Note 7 to the Consolidated Financial Statements for information regarding interest rates. (c) Our debt obligations as of December 31, 2010 include...

  • Page 127
    ... long-term agreements with price adjustments based on various indices intended to measure inflation. Additionally, management's estimates associated with inflation have had, and will continue to have, an impact on our accounting for landfill and environmental remediation liabilities. New Accounting...

  • Page 128
    ... of 2011. Our exposure to variability associated with changes in market prices for electricity has increased because several long-term power purchase agreements have expired. The energy markets have changed significantly since the expiring contracts were executed and we have found that medium- and...

  • Page 129
    actively managed energy program, which includes a hedging strategy intended to decrease the exposure of our revenues to volatility due to market prices for electricity. Refer to Note 8 of the Consolidated Financial Statements for additional information regarding our electricity commodity derivatives...

  • Page 130
    ...FINANCIAL STATEMENTS Page Management's Report on Internal Control Over Financial Reporting ...Reports of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets as of December 31, 2010 and 2009 ...Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009...

  • Page 131
    ... generally accepted in the United States; and (iii) the safeguarding of assets from unauthorized use or disposition. We conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2010 based on the Internal Control - Integrated Framework issued...

  • Page 132
    ... accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Waste Management, Inc. as of December 31, 2010 and 2009, and the related consolidated statements of operations, cash flows, and changes in equity for each of the three...

  • Page 133
    ... standards of the Public Company Accounting Oversight Board (United States), Waste Management, Inc.'s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the...

  • Page 134
    ...; 1,500,000,000 shares authorized; 630,282,461 shares issued . Additional paid-in capital ...Retained earnings ...Accumulated other comprehensive income ...Treasury stock at cost, 155,235,711 and 144,162,063 shares, respectively ...Total Waste Management, Inc. stockholders' equity ...Noncontrolling...

  • Page 135
    WASTE MANAGEMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Millions, Except per Share Amounts) Years Ended December 31, 2010 2009 2008 Operating revenues...Costs and expenses: Operating ...Selling, general and administrative ...Depreciation and amortization ...Restructuring ...(Income) ...

  • Page 136
    ...14) Net cash used in investing activities ...(1,606) Cash flows from financing activities: New borrowings ...908 Debt repayments ...(1,112) Common stock repurchases ...(501) Cash dividends ...(604) Exercise of common stock options ...54 Excess tax benefits associated with equity-based transactions...

  • Page 137
    WASTE MANAGEMENT, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Millions, Except Shares in Thousands) Waste Management, Inc. Stockholders' Equity Accumulated Other Comprehensive Additional Common Stock Treasury Stock Noncontrolling Comprehensive Income Paid-In Retained (Loss) Shares Amounts ...

  • Page 138
    ... Except Shares in Thousands) Waste Management, Inc. Stockholders' Equity Accumulated Other Comprehensive Additional Treasury Stock Noncontrolling Comprehensive Common Stock Income Paid-In Retained (Loss) Shares Amounts Interests Total Income Shares Amounts Capital Earnings Balance, December 31, 2009...

  • Page 139
    ..., transfer, recycling, and disposal services. We are also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the United States. Our customers include residential, commercial, industrial, and municipal customers throughout North America. We manage and...

  • Page 140
    ...January 1, 2009. The application of the fair value framework did not have a material impact on our consolidated financial position, results of operations or cash flows. Employers' Accounting for Defined Benefit Pension and Other Post-retirement Plans - In September 2006, the FASB issued revisions to...

  • Page 141
    ... procedures, although generally we do not have collateral requirements for credit extensions. We also control our exposure associated with trade receivables by discontinuing service, to the extent allowable, to non-paying customers. However, our overall credit risk associated with trade receivables...

  • Page 142
    ...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...

  • Page 143
    ... associated with capping changes. In managing our landfills, our engineers look for ways to reduce or defer our construction costs, including capping costs. The benefit recognized in these years was generally the result of (i) concerted efforts to improve the operating efficiencies of our landfills...

  • Page 144
    ... 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...

  • Page 145
    ... we were an owner, operator, transporter, or generator at the site, the amount and type of waste hauled to the site and the number of years we were associated with the site. Next, we review the same type of information with respect to other named and unnamed PRPs. Estimates of the costs for the...

  • Page 146
    ... current dollars (by 2.5% at both December 31, 2010 and 2009) until the expected time of payment and discount the cost to present value using a risk-free discount rate, which is based on the rate for United States Treasury bonds with a term approximating the weighted average period until settlement...

  • Page 147
    ... useful life of the asset or the lease term, as appropriate, on a straight-line basis. The present value of the related lease payments is recorded as a debt obligation. Our future minimum annual capital lease payments are included in our total future debt obligations as disclosed in Note 7. Landfill...

  • Page 148
    ...-related transaction costs have been expensed as incurred. For acquisitions completed before 2009, direct costs incurred for a business combination were accounted for as part of the cost of the acquired business. Goodwill and Other Intangible Assets Goodwill is the excess of our purchase cost...

  • Page 149
    ... events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. Refer to Note 6 for additional information related to goodwill impairment considerations made during the reported periods. Restricted Trust and Escrow Accounts As of...

  • Page 150
    ... a material impact to our financial statements for the periods presented. Insured and Self-Insured Claims We have retained a significant portion of the risks related to our health and welfare, automobile, general liability and workers' compensation insurance programs. The exposure for unpaid claims...

  • Page 151
    ...are generated from the fees we charge for waste collection, transfer, disposal and recycling services and the sale of recycled commodities, electricity, steam and landfill gas. The fees charged for our services are generally defined in our service agreements and vary based on contract-specific terms...

  • Page 152
    ... Liabilities for landfill and environmental remediation costs are presented in the table below (in millions): December 31, 2010 Environmental Landfill Remediation Total December 31, 2009 Environmental Landfill Remediation Total Current (in accrued liabilities) ...$ 105 Long-term ...1,161 $1,266...

  • Page 153
    ... 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. Additionally in 2010, we increased our cost estimates associated with environmental remediation obligations, primarily based...

  • Page 154
    ... 31, 2009. The $94 million increase in our goodwill during 2010 was primarily related to consideration paid for acquisitions in excess of net assets acquired of $77 million and accounting for foreign currency translation. We incurred no impairment of goodwill as a result of our annual, fourth...

  • Page 155
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) administrative renewal processes. Additional information related to intangible assets acquired through 2010 business combinations is included in Note 19. As of December 31, 2010, expected annual amortization expense ...

  • Page 156
    ... for landfill construction and development, equipment, vehicles and facilities in support of our operations. Proceeds from bond issues are held in trust until such time as we incur qualified expenditures, at which time we are reimbursed from the trust funds. During the year ended December 31, 2010...

  • Page 157
    ...result in cash payments. Secured Debt Our debt balances are generally unsecured, except for $30 million of the tax-exempt project bonds outstanding at December 31, 2010 that were issued by certain subsidiaries within our Wheelabrator Group. These bonds are secured by the related subsidiaries' assets...

  • Page 158
    ... swapped to variable interest rates. The significant terms of our interest rate swap agreements as of December 31, 2010 and 2009 are summarized in the table below (in millions): As of Notional Amount Receive Pay Maturity Date December 31, 2010 ...December 31, 2009 ... $ 500 $1,100 Fixed 5.00%-7.65...

  • Page 159
    ... Rate Locks During the third quarter of 2009, we entered into Treasury rate locks with a total notional amount of $200 million to hedge the risk of changes in semi-annual interest payments for a portion of the senior notes that the Company planned to issue in June 2010. The Treasury rate locks were...

  • Page 160
    ...the forward contracts. In December 2010, we also executed a new C$370 million intercompany debt arrangement and entered into new forward contracts for the related principal and interest cash flows. The total notional value of the forward contracts is C$401 million. Scheduled interest payments are as...

  • Page 161
    ... contracts at our waste-to-energy facilities, we use short-term "receive fixed, pay variable" electricity commodity swaps to mitigate the variability in our revenues and cash flows caused by fluctuations in the market prices for electricity. The swaps executed in 2010 hedged 672,360 megawatt hours...

  • Page 162
    ... Change - 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. State Net Operating Loss and Credit Carry-Forwards - During 2010, 2009, and 2008, we released state net operating...

  • Page 163
    ... to our 2009 "Provision for income taxes" of $65 million. Federal Low-income Housing Tax Credits - In April 2010, we acquired a noncontrolling interest in a limited liability company established to invest in and manage low-income housing properties. Our consideration for this investment totaled $221...

  • Page 164
    ...8, 2010 and December 31, 2011. 10. Employee Benefit Plans Defined Contribution Plans - Our Waste Management retirement savings plans are 401(k) plans that cover employees, except those working subject to collective bargaining agreements that do not allow for coverage under such plans. Employees are...

  • Page 165
    ... by the Waste Management retirement savings plans. These employees are members of collective bargaining units. In addition, Wheelabrator Technologies Inc., a wholly-owned subsidiary, sponsors a pension plan for its former executives and former Board members. As of December 31, 2010, the combined...

  • Page 166
    ... related insurance policy. Our exposure, however, could increase if our insurers are unable to meet their commitments on a timely basis. We have retained a significant portion of the risks related to our automobile, general liability and workers' compensation insurance programs. For our self-insured...

  • Page 167
    ... per ton of waste received. Other Commitments • Share Repurchases - In December 2010, we entered into plans under SEC Rule 10b5-1 to effect market purchases of our common stock during the first quarter of 2011. See Note 15 for additional information related to these arrangements. • Fuel Supply...

  • Page 168
    ... regulations relating to the protection of the environment. Under current laws and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by conditions that existed before we acquired a site. In addition to remediation activity required by state...

  • Page 169
    ...are working toward a cost-sharing agreement. We generally expect to receive any amounts due from other participating parties at or near the time that we make the remedial expenditures. The other 58 NPL sites, which we do not own, are at various procedural stages under the Comprehensive Environmental...

  • Page 170
    ... issues and are subject to uncertainties. Actions filed against us include commercial, customer, and employment-related claims, including, as noted above, purported class action lawsuits related to our customer service agreements and purported class actions involving federal and state wage and hour...

  • Page 171
    ... agreements, we may discuss and negotiate for the complete or partial withdrawal from one or more of these pension plans. We recognized charges to "Operating" expenses of $26 million in 2010, $9 million in 2009 and $39 million in 2008 associated with the withdrawal of certain bargaining units...

  • Page 172
    ... and secondary processing facilities was transferred from our Waste Management Recycle America, or WMRA, organization to our four geographic Groups. By integrating the management of our recycling facilities' operations with our other solid waste business, we are able to more efficiently provide...

  • Page 173
    ... operations in our Southern Group. Asset Impairments - Through December 31, 2008, we capitalized $70 million of accumulated costs associated with the development of a new waste and recycling revenue management system. A significant portion of these costs was specifically associated with the purchase...

  • Page 174
    ... future business plans and other factors the Board may deem relevant. 16. Stock-Based Compensation Employee Stock Purchase Plan We have an Employee Stock Purchase Plan under which employees that have been employed for at least 30 days may purchase shares of our common stock at a discount. The plan...

  • Page 175
    ...restricted stock units, or RSUs, and performance share units, or PSUs. The terms and conditions of equity awards granted under the 2009 Plan are determined by the Management Development and Compensation Committee of our Board of Directors. The Company grants equity awards to certain key employees as...

  • Page 176
    ..., 2009 were entitled to receive a payout of approximately 84% on the vested PSUs. In early 2010, we issued approximately 443,000 shares of common stock for these vested PSUs, net of units deferred and units used for payment of associated taxes. (b) The Company's financial results for the three-year...

  • Page 177
    ... FINANCIAL STATEMENTS - (Continued) Stock Options - Prior to 2005, stock options were the primary form of equity-based compensation we granted to our employees. In 2010, the Management Development and Compensation Committee decided to re-introduce stock options as a component of our LTIP awards. All...

  • Page 178
    ... expense associated with RSU, PSU and stock option awards as a component of "Selling, general and administrative" expenses in our Consolidated Statement of Operations. Our "Provision for income taxes" for the years ended December 31, 2010, 2009 and 2008 includes related deferred income tax benefits...

  • Page 179
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 17. Earnings Per Share Basic and diluted earnings per share were computed using the following common share data (shares in millions): Years Ended December 31, 2010 2009 2008 Number of common shares outstanding at year-...

  • Page 180
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Fair Value Measurements at December 31, 2009 Using Quoted Significant Other Significant Prices in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents ...$1,...

  • Page 181
    ..., which are primarily the purchases of collection operations that enhance our existing route structures and are strategically located near our existing disposal operations. In 2010, we acquired businesses primarily related to our collection and waste-to-energy operations. Total consideration, net of...

  • Page 182
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) In 2009, we acquired businesses primarily related to our collection operations. Total consideration, net of cash acquired, for acquisitions was $329 million, which included $259 million in cash payments, a liability for ...

  • Page 183
    ... equity owners share power over the significant activities of the LLCs; and (iii) we are the entity within the related party group whose activities are most closely associated with the LLCs. As of December 31, 2010, our Consolidated Balance Sheet includes $319 million of net property and equipment...

  • Page 184
    ... solid waste and hazardous waste landfills) and recycling services. Our fifth Group is the Wheelabrator Group, which provides waste-to-energy services and manages waste-to-energy facilities and independent power production plants. We serve residential, commercial, industrial, and municipal customers...

  • Page 185
    ... services, landfill gas-to-energy operations, and third-party subcontract and administration revenues managed by our Upstream», Renewable Energy and Strategic Accounts organizations, respectively, that are not included with the operations of our reportable segments; (ii) our recycling brokerage...

  • Page 186
    ..., 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...

  • Page 187
    ... within the Consolidated Financial Statements included herein. Net operating revenues relating to operations in the United States and Puerto Rico, as well as Canada are as follows (in millions): Years Ended December 31, 2010 2009 2008 United States and Puerto Rico ...Canada ...Total ... $11,784 731...

  • Page 188
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Property and equipment (net) relating to operations in the United States and Puerto Rico, as well as Canada are as follows (in millions): 2010 December 31, 2009 2008 United States and Puerto Rico ...Canada ...Total ......

  • Page 189
    ... non-cash charge of $39 million related to increases in our environmental remediation reserves principally related to two closed landfill sites; and (ii) the recognition of an $8 million unfavorable adjustment to "Operating" expenses due to a decrease from 3.75% to 3.0% in the discount rate used to...

  • Page 190
    ... of bargaining unit employees from an underfunded, multiemployer 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...

  • Page 191
    ... by $111 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 realization of state net operating loss and credit carry-forwards; (iii) a reduction in provincial tax...

  • Page 192
    ... BALANCE SHEETS December 31, 2010 WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents ...Other current assets ...Property and equipment, net ...Investments in and advances to affiliates . . Other assets ...Total assets ...$ 465 4 469...

  • Page 193
    ... (Continued) December 31, 2009 WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents ...Other current assets ...Property and equipment, net ...Investments in and advances to affiliates . . Other assets ...Total assets ...$ 1,093 24...

  • Page 194
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS WM WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated Year Ended December 31, 2010 Operating revenues ...$ Costs and expenses ...Income from operations ......

  • Page 195
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Continued) WM Holdings Non-Guarantor Subsidiaries WM Eliminations Consolidated Year Ended December 31, 2008 Operating revenues ...$ Costs and expenses ...Income from ...

  • Page 196
    ... trust and escrow accounts and other, net ...Net cash provided by (used in) investing activities ...Cash flows from financing activities: New borrowings ...Debt repayments ...Common stock repurchases ...Cash dividends ...Exercise of common stock options...Distributions paid to noncontrolling...

  • Page 197
    ... escrow accounts and other, net ...Net cash used in investing activities...Cash flows from financing activities: New borrowings ...Debt repayments ...Common stock repurchases ...Cash dividends ...Exercise of common stock options...Distributions paid to noncontrolling interests and other ...(Increase...

  • Page 198
    ...escrow accounts and other, net ...Net cash used in investing activities ...Cash flows from financing activities: New borrowings ...Debt repayments ...Common stock repurchases ...Cash dividends ...Exercise of common stock options...Distributions paid to noncontrolling interests and other ...(Increase...

  • Page 199
    WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 24. New Accounting Pronouncements (Unaudited) Multiple-Deliverable Revenue Arrangements - In October 2009, the FASB amended authoritative guidance associated with multiple-deliverable revenue arrangements. This amended ...

  • Page 200
    ...and Chief Accounting Officer, as well as other officers, directors and employees of the Company. The code of ethics, entitled "Code of Conduct," is posted on our website at http://www.wm.com under the section "Corporate Governance" within the "Investor Relations" tab. Item 11. Executive Compensation...

  • Page 201
    ... herein by reference. PART IV Item 15. Exhibits, Financial Statement Schedules (a) (1) Consolidated Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2010 and 2009 Consolidated Statements of Operations for the years ended...

  • Page 202
    ... duly authorized. WASTE MANAGEMENT, INC. By: DAVID P. STEINER David P. Steiner President, Chief Executive Officer and Director /s/ Date: February 17, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 203
    ... PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Waste Management, Inc We have audited the consolidated financial statements of Waste Management, Inc. as of December 31, 2010 and 2009, and for each of the three years in the period ended December 31, 2010, and have issued our report...

  • Page 204
    WASTE MANAGEMENT, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (In Millions) Balance Beginning of Year Charged (Credited) to Income Accounts Written Off/Use of Reserve Balance End of Year Other(a) 2008 - Reserves for doubtful accounts(b) ...2009 - Reserves for doubtful accounts(b) ...2010 ...

  • Page 205
    ...Annual Incentive Plan [Incorporated by reference to Appendix D to the Proxy Statement on Schedule 14A filed April 8, 2004]. Employee Stock Purchase Plan [Incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed March 25, 2009]. Waste Management, Inc. 409A Deferral Savings...

  • Page 206
    ... Termination of Employment dated June 1, 2010 between Waste Management, Inc. and Lawrence O'Donnell, III [Incorporated by reference to Exhibit 10.1 to Form 8-K dated June 1, 2010.] Employment Agreement between the Company and Puneet Bhasin dated December 7, 2009 [Incorporated by reference to Exhibit...

  • Page 207
    ... 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]. Form of 2010 Performance Share Unit Award Agreement [Incorporated by reference to Exhibit 10.1 to Form 8-K dated March 9, 2010]. Form of 2010 Stock Option Award...

  • Page 208
    ... at the corporate address or call (713) 512-6574. ANNUAL MEETING The annual meeting of the shareholders of the Company is scheduled to be held at 11:00 a.m. on May 13, 2011 at: The Maury Myers Conference Center Waste Management, Inc. 1021 Main Street Houston, Texas 77002 WEB SITE www.wm.com DAVID...

  • Page 209
    1001 Fannin, Suite 4000 • Houston, Texas 77002 www.wm.com