Waste Management 2011 Annual Report Download - page 154

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2011, 2010 and 2009
1. Business
The financial statements presented in this report represent the consolidation of Waste Management, Inc., a
Delaware corporation; Waste Management’s wholly-owned and majority-owned subsidiaries; and certain
variable interest entities for which Waste Management or its subsidiaries are the primary beneficiary as described
in Note 20. Waste Management is a holding company and all operations are conducted by its subsidiaries. When
the terms “the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste
Management, Inc., its consolidated subsidiaries and consolidated variable interest entities. When we use the term
“WM,” we are referring only to Waste Management, Inc., the parent holding company.
We are the leading provider of comprehensive waste management services in North America. Our
subsidiaries provide collection, 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 currently manage and evaluate our principal operations through five Groups. Our four geographic
operating Groups, which are comprised of our Eastern, Midwest, Southern and Western Groups, provide
collection, transfer, disposal (in both 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 also provide additional services that are not managed
through our five Groups, including the operations of Oakleaf Global Holdings and its primary operations
(“Oakleaf”) acquired on July 28, 2011, which are presented in this report as “Other.” Additional information
related to our segments and to our acquisition of Oakleaf can be found in Note 21 and in Note 19, respectively.
2. Accounting Changes and Reclassifications
Accounting Changes
Goodwill Impairment Testing — In September 2011, the Financial Accounting Standards Board (“FASB”)
amended authoritative guidance associated with goodwill impairment testing. The amended guidance provides
companies the option to first assess qualitative factors to determine whether the existence of events or
circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less
than its carrying amount before performing the two-step impairment test. If, after assessing the totality of events
or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less
than its carrying amount, then performing the two-step impairment test is unnecessary. The amendments are
effective for goodwill impairment tests performed for fiscal years beginning after December 15, 2011; however,
early adoption was permitted. The Company’s early adoption of this guidance in 2011 did not have an impact on
our consolidated financial statements. Additional information on impairment testing can be found in Note 3.
Multiple-Deliverable Revenue Arrangements — In October 2009, the FASB amended authoritative
guidance associated with multiple-deliverable revenue arrangements. This amended guidance addresses the
determination of when individual deliverables within an arrangement are required to be treated as separate units
of accounting and modifies the manner in which consideration is allocated across the separately identifiable
deliverables. The amendments to authoritative guidance associated with multiple-deliverable revenue
arrangements became effective for the Company on January 1, 2011. The new accounting standard has been
applied prospectively to arrangements entered into or materially modified after the date of adoption. The
adoption of this guidance has not had a material impact on our consolidated financial statements.
Consolidation of Variable Interest Entities — In June 2009, the FASB issued revised authoritative guidance
associated with the consolidation of variable interest entities. The new guidance primarily uses a qualitative
approach for determining whether an enterprise is the primary beneficiary of a variable interest entity and, is
therefore, required to consolidate the entity. This new guidance generally defines the primary beneficiary as the
entity that has (i) the power to direct the activities of the variable interest entity that can most significantly impact
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