Waste Management 2015 Annual Report Download - page 187

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,
2015 2014 2013
Number of common shares outstanding at year-end ................... 447.2 458.5 464.3
Effect of using weighted average common shares outstanding ........... 5.5 4.1 3.4
Weighted average basic common shares outstanding .................. 452.7 462.6 467.7
Dilutive effect of equity-based compensation awards and other
contingently issuable shares .................................... 3.2 3.0 2.1
Weighted average diluted common shares outstanding ................. 455.9 465.6 469.8
Potentially issuable shares ....................................... 10.2 11.3 12.3
Number of anti-dilutive potentially issuable shares excluded from diluted
common shares outstanding .................................... 2.0 0.4 0.1
18. Fair Value Measurements
Assets and Liabilities Accounted for at Fair Value
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. When measuring assets and
liabilities that are required to be recorded at fair value, the Company considers the principal or most
advantageous market in which the Company would transact. Fair value is estimated by applying the following
hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization
within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted
prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of
assumptions that market participants would use in pricing the asset or liability.
We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs. In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe
market participants would use in pricing an asset or liability, including assumptions about risk when appropriate. Our
assets and liabilities that are measured at fair value on a recurring basis include the following (in millions):
Fair Value Measurements at
December 31, 2015 Using
Total
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Money market funds ....................... $ 35 $ 35 $— $—
Available-for-sale securities ................. 43 — 43 —
Fixed-income securities .................... 40 — 40 —
Redeemable preferred stock ................. 47 — — 47
Foreign currency derivatives ................ 78 — 78 —
Total assets .......................... $243 $ 35 $161 $ 47
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