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Document and Company Information - USD ($) $ in Billions	12 Months Ended
Document and Company Information - USD ($) $ in Billions	Dec. 31, 2009	Feb. 11, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	WASTE MANAGEMENT INC
Entity Central Index Key	0000823768
Document Type	10-K
Document Period End Date	Dec. 31, 2009
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 13.8
Entity Common Stock, Shares Outstanding (actual number)		484,972,117

Consolidated Balance Sheets - USD ($) $ in Millions	12 Months Ended
Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$ 1,140	$ 480
Accounts receivable, net of allowance for doubtful accounts of $31 and $39, respectively	1,408	1,463
Other receivables	119	147
Parts and supplies	110	110
Deferred income taxes	116	39
Other assets	117	96
Total current assets	3,010	2,335
Property and equipment, net of accumulated depreciation and amortization of $13,994 and $13,273, respectively	11,541	11,402
Goodwill	5,632	5,462
Other intangible assets, net	238	158
Other assets	733	870
Total assets	21,154	20,227
Current liabilities:
Accounts payable	567	716
Accrued liabilities	1,128	1,034
Deferred revenues	457	451
Current portion of long-term debt	749	835
Total current liabilities	2,901	3,036
Long-term debt, less current portion	8,124	7,491
Deferred income taxes	1,509	1,484
Landfill and environmental remediation liabilities	1,357	1,360
Other liabilities	672	671
Total liabilities	$ 14,563	$ 14,042
Commitments and contingencies
Waste Management, Inc. stockholders' equity:
Common stock, $0.01 par value; 1,500,000,000 shares authorized; 630,282,461 shares issued	$ 6	$ 6
Additional paid-in capital	4,543	4,558
Retained earnings	6,053	5,631
Accumulated other comprehensive income	208	88
Treasury stock at cost, 144,162,063 and 139,546,915 shares, respectively	(4,525)	(4,381)
Total Waste Management, Inc. stockholders' equity	6,285	5,902
Noncontrolling interests	306	283
Total equity	6,591	6,185
Total liabilities and equity	$ 21,154	$ 20,227

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Allowance for doubtful accounts	$ 31,000,000	$ 39,000,000
Accumulated depreciation and amortization	13,994,000,000	13,273,000,000
Waste Management, Inc. stockholders' equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized (actual number)	1,500,000,000	1,500,000,000
Common stock, shares issued (actual number)	630,282,461	630,282,461
Treasury stock, shares (actual number)	144,162,063	139,546,915

Consolidated Statements of Operations - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Statements of Operations [Abstract]
Operating revenues	$ 11,791	$ 13,388	$ 13,310
Costs and expenses:
Operating	7,241	8,466	8,402
Selling, general and administrative	1,364	1,477	1,432
Depreciation and amortization	1,166	1,238	1,259
Restructuring	50	2	10
(Income) expense from divestitures, asset impairments and unusual items	83	(29)	(47)
Total costs and expenses	9,904	11,154	11,056
Income from operations	1,887	2,234	2,254
Other income (expense):
Interest expense	(426)	(455)	(521)
Interest income	13	19	47
Equity in net losses of unconsolidated entities	(2)	(4)	(35)
Other, net	1	3	4
Total other income (expense)	(414)	(437)	(505)
Income before income taxes	1,473	1,797	1,749
Provision for income taxes	413	669	540
Consolidated net income	1,060	1,128	1,209
Less: Net income attributable to noncontrolling interests	66	41	46
Net income attributable to Waste Management, Inc.	$ 994	$ 1,087	$ 1,163
Basic earnings per common share	$ 2.02	$ 2.21	$ 2.25
Diluted earnings per common share	2.01	2.19	2.23
Cash dividends declared per common share	$ 1.16	$ 1.08	$ 0.96

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Cash flows from operating activities:
Consolidated net income	$ 1,060	$ 1,128	$ 1,209
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	1,166	1,238	1,259
Deferred income tax (benefit) provision	(94)	150	70
Interest accretion on landfill liabilities	80	77	74
Interest accretion on and discount rate adjustments to environmental remediation liabilities and recovery assets	(30)	41	17
Provision for bad debts	48	50	43
Equity-based compensation expense	30	48	37
Equity in net losses of unconsolidated entities, net of distributions	2	1	39
Net gain from disposal of assets	(13)	(33)	(27)
Effect of (income) expense from divestitures, asset impairments and unusual items	83	(29)	(47)
Excess tax benefits associated with equity-based transactions	(4)	(7)	(26)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Receivables	29	216	(22)
Other current assets	(4)	(9)	6
Other assets	20	5	5
Accounts payable and accrued liabilities	51	(183)	(88)
Deferred revenues and other liabilities	(62)	(118)	(110)
Net cash provided by operating activities	2,362	2,575	2,439
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired	(281)	(280)	(90)
Capital expenditures	(1,179)	(1,221)	(1,211)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets	28	112	278
Purchases of short-term investments	0	0	(1,220)
Proceeds from sales of short-term investments	0	0	1,404
Net receipts from restricted trust and escrow accounts	196	178	120
Other	(14)	28	(42)
Net cash used in investing activities	(1,250)	(1,183)	(761)
Cash flows from financing activities:
New borrowings	1,749	1,525	944
Debt repayments	(1,335)	(1,785)	(1,200)
Common stock repurchases	(226)	(410)	(1,421)
Cash dividends	(569)	(531)	(495)
Exercise of common stock options and warrants	20	37	142
Excess tax benefits associated with equity-based transactions	4	7	26
Distributions paid to noncontrolling interests	(50)	(56)	(20)
Other	(50)	(43)	78
Net cash used in financing activities	(457)	(1,256)	(1,946)
Effect of exchange rate changes on cash and cash equivalents	5	(4)	2
Increase (decrease) in cash and cash equivalents	660	132	(266)
Cash and cash equivalents at beginning of year	480	348	614
Cash and cash equivalents at end of year	$ 1,140	$ 480	$ 348

Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Statement [Line Items]
Beginning	$ 6,185	$ 6,102	$ 6,497
Net income	1,060	1,128	1,209
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively	(21)	40	(34)
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively	32	(39)	47
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively	10	(18)	2
Foreign currency translation adjustments	99	(127)	89
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively	6	(8)	3
Other comprehensive income (loss)	126	(152)	107
Comprehensive income	1,186	976	1,316
Cash dividends declared	(569)	(531)	(495)
Equity-based compensation transactions, including dividend equivalents, net of taxes	64	106	210
Common stock repurchases	(226)	(410)	(1,421)
Distributions paid to noncontrolling interests	(50)	(56)	(20)
Cumulative effect of initial adoption of FIN 48			4
Cumulative effect of initial adoption of FAS 158		(1)
Other	1	(1)	11
Ending	6,591	6,185	6,102
Common Stock
Statement [Line Items]
Beginning	$ 6	$ 6	$ 6
Shares, Beginning (in thousands)	630,282	630,282	630,282
Shares, Ending (in thousands)	630,282	630,282	630,282
Ending	$ 6	$ 6	$ 6
Additional Paid-In Capital
Statement [Line Items]
Beginning	4,558	4,542	4,513
Equity-based compensation transactions, including dividend equivalents, net of taxes	(15)	16	30
Other			(1)
Ending	4,543	4,558	4,542
Treasury Stock
Statement [Line Items]
Beginning	$ (4,381)	$ (4,065)	$ (2,836)
Shares, Beginning (in thousands)	(139,547)	(130,164)	(96,599)
Equity-based compensation transactions, including dividend equivalents, net of taxes	$ 82	$ 94	$ 182
Equity-based compensation transactions, including dividend equivalents, net of taxes, shares	2,610	2,995	6,067
Common stock repurchases	$ (226)	$ (410)	$ (1,421)
Common stock repurchases, shares (in thousands)	(7,237)	(12,390)	(39,946)
Other			$ 10
Other, shares	12	12	314
Shares, Ending (in thousands)	(144,162)	(139,547)	(130,164)
Ending	$ (4,525)	$ (4,381)	$ (4,065)
Retained Earnings
Statement [Line Items]
Beginning	5,631	5,080	4,410
Net income	994	1,087	1,163
Cash dividends declared	(569)	(531)	(495)
Equity-based compensation transactions, including dividend equivalents, net of taxes	(3)	(4)	(2)
Cumulative effect of initial adoption of FIN 48			4
Cumulative effect of initial adoption of FAS 158		(1)
Ending	6,053	5,631	5,080
Accumulated Other Comprehensive Income (Loss)
Statement [Line Items]
Beginning	88	229	129
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively	(21)	40	(34)
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively	32	(39)	47
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively	4	(7)	(5)
Foreign currency translation adjustments	99	(127)	89
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively	6	(8)	3
Ending	208	88	229
Noncontrolling Interests
Statement [Line Items]
Beginning	283	310	275
Net income	66	41	46
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively	6	(11)	7
Distributions paid to noncontrolling interests	(50)	(56)	(20)
Other	1	(1)	2
Ending	306	283	310
Comprehensive Income
Statement [Line Items]
Net income	1,060	1,128	1,209
Unrealized gains (losses) resulting from changes in fair values of derivative instruments, net of taxes of $13, $25, $22 for 2009, 2008 and 2007 respectively	(21)	40	(34)
Realized gains (losses) on derivative instruments reclassified into earnings, net of taxes of $21, $24, $30 for 2009, 2008 and 2007 respectively	32	(39)	47
Unrealized gains (losses) on marketable securities, net of taxes of $2, $4, $3 for 2009, 2008 and 2007 respectively	10	(18)	2
Foreign currency translation adjustments	99	(127)	89
Change in funded status of defined benefit plan liabilities, net of taxes of $4, $5 and $3 for 2009, 2008 and 2007 respectively	6	(8)	3
Other comprehensive income (loss)	126	(152)	107
Comprehensive income	$ 1,186	$ 976	$ 1,316

Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Statement [Line Items]
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments	$ 13	$ 25	$ 22
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings	21	24	30
Tax effects on unrealized gains (losses) on marketable securities	2	4	3
Tax effects on change in funded status of defined benefit plan liabilities	4	5	3
Accumulated Other Comprehensive Income (Loss)
Statement [Line Items]
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments	13	25	22
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings	21	24	30
Tax effects on unrealized gains (losses) on marketable securities	2	4	3
Tax effects on change in funded status of defined benefit plan liabilities	4	5	3
Comprehensive Income
Statement [Line Items]
Tax effects on unrealized gains (losses) resulting from changes in fair values of derivative instruments	13	25	22
Tax effects on realized gains (losses) on derivative instruments reclassified into earnings	21	24	30
Tax effects on unrealized gains (losses) on marketable securities	2	4	3
Tax effects on change in funded status of defined benefit plan liabilities	$ 4	$ 5	$ 3

Business

12 Months Ended

Dec. 31, 2009

Business [Abstract]

Business


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 “WMI,” we are referring only to Waste Management, Inc., the parent holding company.

We are the leading provider of integrated waste services in North America. Using our vast network of assets and employees, we provide a comprehensive range of waste management services. Through our subsidiaries we provide collection, transfer, recycling, disposal and waste-to-energy services. In providing these services, we actively pursue projects and initiatives that we believe make a positive difference for our environment, including recovering and processing the methane gas produced naturally by landfills into a renewable energy source. Our customers include commercial, industrial, municipal and residential customers, other waste management companies, electric utilities and governmental entities.

We manage and evaluate our principal operations through five Groups. Our four geographic Groups, which include our Eastern, Midwest, Southern and Western Groups, provide collection, transfer, recycling and disposal services. Our fifth Group is the Wheelabrator Group, which provides waste-to-energy services. We also provide additional services that are not managed through our five Groups, which are presented in this report as “Other.” Additional information related to our segments, including changes in the basis for our reported segments from December 31, 2008, can be found under “Reclassifications” in Note 2 and in Note 21.

Accounting Changes and Reclassifications

12 Months Ended

Dec. 31, 2009

Accounting Changes and Reclassifications [Abstract]

Accounting Changes and Reclassifications


2.	Accounting Changes and Reclassifications

Accounting Changes

Fair Value Measurements — In September 2006, the Financial Accounting Standards Board issued authoritative guidance associated with fair value measurements. This guidance defined fair value, established a framework for measuring fair value, and expanded disclosures about fair value measurements. In February 2008, the FASB delayed the effective date of the guidance for all non-financial assets and non-financial liabilities, except those that are measured at fair value on a recurring basis. Accordingly, we adopted this guidance for assets and liabilities recognized at fair value on a recurring basis effective January 1, 2008 and adopted the guidance for non-financial assets and liabilities measured on a non-recurring basis effective 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.

Business Combinations — In December 2007, the FASB issued revisions to the authoritative guidance associated with business combinations. This guidance clarified and revised the principles for how an acquirer recognizes and measures identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree. This guidance also addressed the recognition and measurement of goodwill acquired in business combinations and expanded disclosure requirements related to business combinations. Effective January 1, 2009, we adopted the FASB’s revised guidance associated with business combinations. The portions of this guidance that relate to business combinations completed before January 1, 2009 did not have a material impact on our consolidated financial statements. Further, business combinations completed in 2009, which are discussed in Note 19, have not been material to our financial position, results of operations or cash flows. However, to the extent that future business combinations are material, our adoption of the FASB’s revised authoritative guidance associated with business combinations may significantly impact our accounting and reporting for future acquisitions, principally as a result of (i) expanded requirements to value acquired assets, liabilities and contingencies at their fair values when such amounts can be determined; and (ii) the requirement that acquisition-related transaction and restructuring costs be expensed as incurred rather than capitalized as a part of the cost of the acquisition.

Noncontrolling Interests in Consolidated Financial Statements — In December 2007, the FASB issued authoritative guidance that established accounting and reporting standards for noncontrolling interests in subsidiaries and for the de-consolidation of a subsidiary. The guidance also established that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. We adopted this guidance on January 1, 2009. The presentation and disclosure requirements of this guidance, which must be applied retrospectively for all periods presented, have resulted in reclassifications to our prior period consolidated financial information and the remeasurement of our 2008 and 2007 effective tax rates, which are discussed in Note 9.

Accounting for Uncertainty in Income Taxes — In June 2006, the FASB issued authoritative guidance associated with accounting for uncertainty in income taxes. This guidance prescribed a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in tax returns. This guidance also addressed the de-recognition, classification and disclosure of tax positions, as well as the accounting for related interest and penalties. In May 2007, the FASB issued authoritative guidance associated with the criteria that must be evaluated in determining if a tax position has been effectively settled and should be recognized as a tax benefit. Our adoption of this guidance effective January 1, 2007 resulted in the recognition of a $28 million increase in our liabilities for unrecognized tax benefits, a $32 million increase in our non-current deferred tax assets and a $4 million increase in our beginning retained earnings as a cumulative effect of change in accounting principle. Refer to Note 9 for additional information about our unrecognized tax benefits.

Employers’ Accounting for Defined Benefit Pension and Other Post-retirement Plans — In September 2006, the FASB issued revisions to the authoritative guidance associated with the accounting and reporting of post-retirement benefit plans. This guidance required companies to recognize the overfunded or underfunded status of their defined benefit pension and other post-retirement plans as an asset or liability and to recognize changes in that funded status through comprehensive income in the year in which the changes occur. We adopted these recognition provisions effective December 31, 2006. The FASB’s revised guidance also required companies to measure the funded status of defined benefit pension and other post-retirement plans as of their year-end reporting date. These measurement date provisions were effective for us as of December 31, 2008. We applied the measurement provisions by measuring our benefit obligations as of September 30, 2007, our prior measurement date, and recognizing a pro-rata share of net benefit costs for the transition period from October 1, 2007 to December 31, 2008 as a cumulative effect of change in accounting principle in retained earnings as of December 31, 2008. The application of the recognition and measurement provisions of this revised authoritative guidance did not have a material impact on our financial position or results of operations for the periods presented.

Subsequent Events — In May 2009, the FASB established standards related to accounting for, and disclosure of, events that occur after the balance sheet date, but before financial statements are issued or are available to be issued. We have adopted the provisions of this guidance, which became effective for interim and annual reporting periods ending after June 15, 2009. We have evaluated subsequent events through the date and time the financial statements were issued on February 16, 2010. No material subsequent events have occurred since December 31, 2009 that required recognition or disclosure in our current period financial statements.

Reclassifications

Segments — During the first quarter of 2009, we transferred responsibility for the oversight of day-to-day recycling operations at our material recovery facilities and secondary processing facilities to the management teams of our four geographic Groups. We believe that, by integrating the management of our recycling facilities’ operations with our other solid waste business, we can more efficiently provide comprehensive environmental solutions to our customers and ensure that we are focusing on maximizing the profitability and return on invested capital of our business on an integrated basis. As a result of this operational change, we also changed the way we review the financial results of our geographic Groups. Beginning in 2009, the financial results of our material recovery facilities and secondary processing facilities are included as a component of their respective geographic Group and the financial results of our recycling brokerage business and electronics recycling services are included as part of our “Other” operations. We have reflected the impact of these changes for all periods presented to provide financial information that consistently reflects our current approach to managing our geographic Group operations. Refer to Note 21 for further discussion about our reportable segments.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2009

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies


3.	Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of WMI, its wholly-owned and majority-owned subsidiaries and certain variable interest entities for which we have determined that we are the primary beneficiary. All material intercompany balances and transactions have been eliminated. Investments in entities in which we do not have a controlling financial interest are accounted for under either the equity method or cost method of accounting, as appropriate.

Estimates and Assumptions

In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methods. In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, asset impairments, and self-insurance reserves and recoveries. Each of these items is discussed in additional detail below. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash on deposit and money market funds that invest in United States government obligations with original maturities of three months or less.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments held within our trust funds and escrow accounts, accounts receivable and derivative instruments. We make efforts to control our exposure to credit risk associated with these instruments by (i) placing our assets and other financial interests with a diverse group of credit-worthy financial institutions; (ii) holding high-quality financial instruments while limiting investments in any one instrument; and (iii) maintaining strict policies over credit extension that include credit evaluations, credit limits and monitoring procedures, although generally we do not have collateral requirements for credit extensions. Our overall credit risk associated with trade receivables is limited due to the large number of geographically diverse customers we service. At December 31, 2009 and 2008, no single customer represented greater than 5% of total accounts receivable.

Trade and Other Receivables

Our receivables are recorded when billed or when cash is advanced and represent claims against third parties that will be settled in cash. The carrying value of our receivables, net of the allowance for doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based on historical collection trends; type of customer, such as municipal or commercial; the age of outstanding receivables; and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectibility of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when our internal collection efforts have been unsuccessful. Also, we recognize interest income on long-term interest-bearing notes receivable as the interest accrues under the terms of the notes.

Landfill Accounting

Cost Basis of Landfill Assets — We capitalize various costs that we incur to make a landfill ready to accept waste. These costs generally include expenditures for land (including the landfill footprint and required landfill buffer property), permitting, excavation, liner material and installation, landfill leachate collection systems, landfill gas collection systems, environmental monitoring equipment for groundwater and landfill gas, directly related engineering, capitalized interest, on-site road construction and other capital infrastructure costs. The cost basis of our landfill assets also includes asset retirement costs, which represent estimates of future costs associated with landfill final capping, closure and post-closure activities. These costs are discussed below.

Final Capping, Closure and Post-Closure Costs — Following is a description of our asset retirement activities and our related accounting:


	•	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.

We develop our estimates of these obligations using input from our operations personnel, engineers and accountants. Our estimates are based on our interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Absent quoted market prices, the estimate of fair value should be based on the best available information, including the results of present value techniques. In many cases, we contract with third parties to fulfill our obligations for final capping, closure and post-closure. We use historical experience, professional engineering judgment and quoted and actual prices paid for similar work to determine the fair value of these obligations. We are required to recognize these obligations at market prices whether we plan to contract with third parties or perform the work ourselves. In those instances where we perform the work with internal resources, the incremental profit margin realized is recognized as a component of operating income when the work is performed.

Once we have determined the final capping, closure and post-closure costs, we inflate those costs to the expected time of payment and discount those expected future costs back to present value. During the years ended December 31, 2009 and 2008, we inflated these costs in current dollars until the expected time of payment using an inflation rate of 2.5%. We discount these costs to present value using the credit-adjusted, risk-free rate effective at the time an obligation is incurred consistent with the expected cash flow approach. Any changes in expectations that result in an upward revision to the estimated cash flows are treated as a new liability and discounted at the current rate while downward revisions are discounted at the historical weighted-average rate of the recorded obligation. As a result, the credit-adjusted, risk-free discount rate used to calculate the present value of an obligation is specific to each individual asset retirement obligation. The weighted-average rate applicable to our asset retirement obligations at December 31, 2009 is between 6.0% and 8.0%, the range of the credit-adjusted, risk-free discount rates effective since we adopted the FASB’s authoritative guidance related to asset retirement obligations in 2003. We expect to apply a credit-adjusted, risk-free discount rate of 6.0% to liabilities incurred in the first quarter of 2010.

We record the estimated fair value of final capping, closure and post-closure liabilities for our landfills based on the capacity consumed through the current period. The fair value of final capping obligations is developed based on our estimates of the airspace consumed to date for each final capping event and the expected timing of each final capping event. The fair value of closure and post-closure obligations is developed based on our estimates of the airspace consumed to date for the entire landfill and the expected timing of each closure and post-closure activity. Because these obligations are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final capping, closure and post-closure activities could result in a material change in these liabilities, related assets and results of operations. We assess the appropriateness of the estimates used to develop our recorded balances annually, or more often if significant facts change.

Changes in inflation rates or the estimated costs, timing or extent of future final capping and closure and post-closure activities typically result in both (i) a current adjustment to the recorded liability and landfill asset; and (ii) a change in liability and asset amounts to be recorded prospectively over either the remaining capacity of the related discrete final capping event or the remaining permitted and expansion airspace (as defined below) of the landfill. Any changes related to the capitalized and future cost of the landfill assets are then recognized in accordance with our amortization policy, which would generally result in amortization expense being recognized prospectively over the remaining capacity of the final capping event or the remaining permitted and expansion airspace of the landfill, as appropriate. Changes in such estimates associated with airspace that has been fully utilized result in an adjustment to the recorded liability and landfill assets with an immediate corresponding adjustment to landfill airspace amortization expense.

During the years ended December 31, 2009, 2008 and 2007, adjustments associated with changes in our expectations for the timing and cost of future final capping, closure and post-closure of fully utilized airspace resulted in $14 million, $3 million and $17 million in net credits to landfill airspace amortization expense, respectively, with the majority of these credits resulting from revised estimates associated with final capping changes. In managing our landfills, our engineers look for ways to reduce or defer our construction costs, including final capping costs. The benefit recognized in these years was generally the result of (i) concerted efforts to improve the operating efficiencies of our landfills and volume declines, both of which have allowed us to delay spending for final capping activities; (ii) effectively managing the cost of final capping material and construction; or (iii) landfill expansions that resulted in reduced or deferred final capping costs.

Interest accretion on final capping, closure and post-closure liabilities is recorded using the effective interest method and is recorded as final capping, closure and post-closure expense, which is included in “Operating” costs and expenses within our Consolidated Statements of Operations.

Amortization of Landfill Assets — The amortizable basis of a landfill includes (i) amounts previously expended and capitalized; (ii) capitalized landfill final capping, closure and post-closure costs; (iii) projections of future purchase and development costs required to develop the landfill site to its remaining permitted and expansion capacity; and (iv) projected asset retirement costs related to landfill final capping, closure and post-closure activities.

Amortization is recorded on a units-of-consumption basis, applying expense as a rate per ton. The rate per ton is calculated by dividing each component of the amortizable basis of a landfill by the number of tons needed to fill the corresponding asset’s airspace. For landfills that we do not own, but operate through operating or lease arrangements, the rate per ton is calculated based on expected capacity to be utilized over the lesser of the contractual term of the underlying agreement or the life of the landfill.

We apply the following guidelines in determining a landfill’s remaining permitted and expansion airspace:


	•	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.

For unpermitted airspace to be initially included in our estimate of remaining permitted and expansion airspace, the expansion effort must meet all of the criteria listed above. These criteria are evaluated by our field-based engineers, accountants, managers and others to identify potential obstacles to obtaining the permits. Once the unpermitted airspace is included, our policy provides that airspace may continue to be included in remaining permitted and expansion airspace even if these criteria are no longer met, based on the facts and circumstances of a specific landfill. In these circumstances, continued inclusion must be approved through a landfill-specific review process that includes approval of our Chief Financial Officer and a review by the Audit Committee of our Board of Directors on a quarterly basis. Of the 39 landfill sites with expansions at December 31, 2009, 14 landfills required the Chief Financial Officer to approve the inclusion of the unpermitted airspace. Nine of these landfills required approval by our Chief Financial Officer because of community or political opposition that could impede the expansion process. The remaining five landfills required approval primarily due to the permit application processes not meeting the one- or five-year requirements.

When we include the expansion airspace in our calculations of remaining permitted and expansion airspace, we also include the projected costs for development, as well as the projected asset retirement costs related to final capping, and closure and post-closure of the expansion in the amortization basis of the landfill.

Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization factor, or AUF, is established to calculate the remaining permitted and expansion capacity in tons. The AUF is established using the measured density obtained from previous annual surveys and is then adjusted to account for settlement. The amount of settlement that is forecasted will take into account several site-specific factors including 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. In addition, the initial selection of the AUF is subject to a subsequent multi-level review by our engineering group, and the AUF used is reviewed on a periodic basis and revised as necessary. Our historical experience generally indicates that the impact of settlement at a landfill is greater later in the life of the landfill when the waste placed at the landfill approaches its highest point under the permit requirements.

After determining the costs and remaining permitted and expansion capacity at each of our landfills, we determine the per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the costs by the corresponding number of tons. We calculate per ton amortization rates for each landfill for assets associated with each final capping event, for assets related to closure and post-closure activities and for all other costs capitalized or to be capitalized in the future. These rates per ton are updated annually, or more often, as significant facts change.

It is possible that actual results, including the amount of costs incurred, the timing of final capping, closure and post-closure activities, our airspace utilization or the success of our expansion efforts could ultimately turn out to be significantly different from our estimates and assumptions. To the extent that such estimates, or related assumptions, prove to be significantly different than actual results, lower profitability may be experienced due to higher amortization rates, or higher expenses; or higher profitability may result if the opposite occurs. Most significantly, if it is determined that expansion capacity should no longer be considered in calculating the recoverability of a landfill asset, we may be required to recognize an asset impairment or incur significantly higher amortization expense. If it is determined that the likelihood of receiving an expansion permit has become remote, the capitalized costs related to the expansion effort are expensed immediately.

Environmental Remediation Liabilities — We are subject to an array of laws and regulations relating to the protection of the environment. Under current laws and regulations, we may have liabilities for environmental damage caused by operations, or for damage caused by conditions that existed before we acquired a site. These liabilities include potentially responsible party, or PRP, investigations, settlements, and certain legal and consultant fees, as well as costs directly associated with site investigation and clean up, such as materials, external contractor costs and incremental internal costs directly related to the remedy. We provide for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. We routinely review and evaluate sites that require remediation and determine our estimated cost for the likely remedy based on a number of estimates and assumptions.

Where it is probable that a liability has been incurred, we estimate costs required to remediate sites based on site-specific facts and circumstances. We routinely review and evaluate sites that require remediation, considering whether 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 remedy are then either developed using our internal resources or by third-party environmental engineers or other service providers. Internally developed estimates are based on:


	•	Management’s 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.

There can sometimes be a range of reasonable estimates of the costs associated with the likely remedy of a site. In these cases, we use the amount within the range that constitutes our best estimate. If no amount within the range appears to be a better estimate than any other, we use the amount that is the low end of such range. If we used the high ends of such ranges, our aggregate potential liability would be approximately $150 million higher on a discounted basis than the $256 million recorded in the Consolidated Financial Statements as of December 31, 2009.

Estimating our degree of responsibility for remediation is inherently difficult. Determining the method and ultimate cost of remediation requires that a number of assumptions be made. Our ultimate responsibility may differ materially from current estimates. It is possible that technological, regulatory or enforcement developments, the results of environmental studies, the inability to identify other PRPs, the inability of other PRPs to contribute to the settlements of such liabilities, or other factors could require us to record additional liabilities. Additionally, our ongoing review of our remediation liabilities could result in revisions that could cause upward or downward adjustments to income from operations.

Where we believe that both the amount of a particular environmental remediation liability and the timing of the payments are reliably determinable, we inflate the cost in current dollars (by 2.5% at both December 31, 2009 and 2008) 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 of the underlying obligation. We determine the risk-free discount rate and the inflation rate on an annual basis unless interim changes would significantly impact our results of operations. For remedial liabilities that have been discounted, we include interest accretion, based on the effective interest method, in “Operating” costs and expenses in our Consolidated Statements of Operations. The following table summarizes the impacts of revisions in the risk-free discount rate applied to our environmental remediation liabilities and recovery assets during the reported periods (in millions) and the risk-free discount rate applied as of each reporting date:


	Years Ended December 31,
	2009			2008			2007

Charge (reduction) to Operating expenses(a)	$	(35	)	$	33		$	8
Risk-free discount rate applied to environmental remediation liabilities and recovery assets		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.

The portion of our recorded environmental remediation liabilities that has never been subject to inflation or discounting as the amounts and timing of payments are not readily determinable was $44 million at December 31, 2009 and $47 million at December 31, 2008. Had we not inflated and discounted any portion of our environmental remediation liability, the amount recorded would have increased by $20 million at December 31, 2009 and decreased by $6 million at December 31, 2008.

Property and Equipment (exclusive of landfills, discussed above)

We record property and equipment at cost. Expenditures for major additions and improvements are capitalized and maintenance activities are expensed as incurred. We depreciate property and equipment over the estimated useful life of the asset using the straight-line method. We assume no salvage value for our depreciable property and equipment. When property and equipment are retired, sold or otherwise disposed of, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is included in results of operations as an offset or increase to operating expense for the period.

The estimated useful lives for significant property and equipment categories are as follows (in years):


	Useful Lives

Vehicles — excluding rail haul cars		3 to 10
Vehicles — rail haul cars		10 to 20
Machinery and equipment		3 to 30
Buildings and improvements — excluding waste-to-energy facilities		5 to 40
Waste-to-energy facilities and related equipment		up to 50
Furniture, fixtures and office equipment		3 to 10

We include capitalized costs associated with developing or obtaining internal-use software within furniture, fixtures and office equipment. These costs include direct external costs of materials and services used in developing or obtaining the software and internal costs for employees directly associated with the software development project. As of December 31, 2009, capitalized costs for software placed in service, net of accumulated depreciation, were $33 million. In addition, our furniture, fixtures and office equipment includes $46 million as of December 31, 2009 and $90 million as of December 31, 2008 for costs incurred for software under development. The significant decrease in capitalized costs for software under development from December 31, 2008 to December 31, 2009 is attributable to the recognition of a $51 million charge recognized during 2009 as a result of our determination to abandon the SAP waste and recycling revenue management software. Refer to Note 13 for additional information related to the management determination to abandon this software development project.

Leases

We lease property and equipment in the ordinary course of our business. Our most significant lease obligations are for property and equipment specific to our industry, including real property operated as a landfill, transfer station or waste-to-energy facility and equipment such as compactors. Our leases have varying terms. Some may include renewal or purchase options, escalation clauses, restrictions, penalties or other obligations that we consider in determining minimum lease payments. The leases are classified as either operating leases or capital leases, as appropriate.

Operating Leases (excluding landfills discussed below) — The majority of our leases are operating leases. This classification generally can be attributed to either (i) relatively low fixed minimum lease payments as a result of real property lease obligations that vary based on the volume of waste we receive or process or (ii) minimum lease terms that are much shorter than the assets’ economic useful lives. Management expects that in the normal course of business our operating leases will be renewed, replaced by other leases, or replaced with fixed asset expenditures. Our rent expense during each of the last three years and our future minimum operating lease payments for each of the next five years for which we are contractually obligated as of December 31, 2009 are disclosed in Note 11.

Capital Leases (excluding landfills discussed below) — Assets under capital leases are capitalized using interest rates determined at the inception of each lease and are amortized over either the 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 Leases — From an operating perspective, landfills that we lease are similar to landfills we own because generally we own the landfill’s operating permit and will operate the landfill for the entire lease term, which in many cases is the life of the landfill. As a result, our landfill leases are generally capital leases. The most significant portion of our rental obligations for landfill leases is contingent upon operating factors such as disposal volumes and often there are no contractual minimum rental obligations. Contingent rental obligations are expensed as incurred. For landfill capital leases that provide for minimum contractual rental obligations, we record the present value of the minimum obligation as part of the landfill asset, which is amortized on a units-of-consumption basis over the shorter of the lease term or the life of the landfill.

Acquisitions

We generally recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition.

Contingent Consideration — In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain negotiated goals, such as targeted revenue levels, targeted disposal volumes or the issuance of permits for expanded landfill airspace. For acquisitions completed in 2009, we have recognized liabilities for these contingent obligations based on their estimated fair value at the date of acquisition with any differences between the acquisition-date fair value and the ultimate settlement of the obligations being recognized as an adjustment to income from operations. For acquisitions completed before 2009, these obligations were recognized as incurred and accounted for as an adjustment to the initial purchase price of the acquired assets.

Assumed Assets and Liabilities — Assets and liabilities arising from contingencies such as pre-acquisition environmental matters and litigation are recognized at their acquisition-date fair value when their respective fair values can be determined. If the fair values of such contingencies cannot be determined, they are recognized at the acquisition date if the contingencies are probable and an amount can be reasonably estimated. Acquisition-date fair value estimates are revised as necessary if, and when, additional information regarding these contingencies becomes available to further define and quantify assets acquired and liabilities assumed.

Beginning in 2009, all acquisition-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 over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but as discussed in the “Asset impairments” section below, we assess our goodwill for impairment at least annually.

Other intangible assets consist primarily of customer contracts, customer lists, covenants not-to-compete, licenses, permits (other than landfill permits, as all landfill-related intangible assets are combined with landfill tangible assets and amortized using our landfill amortization policy), and other contracts. Other intangible assets are recorded at cost and are amortized using either a 150% declining balance approach or a straight-line basis as we determine appropriate. Customer contracts and customer lists are generally amortized over seven to ten years. Covenants not-to-compete are amortized over the term of the non-compete covenant, which is generally two to five years. Licenses, permits and other contracts are amortized over the definitive terms of the related agreements. If the underlying agreement does not contain definitive terms and the useful life is determined to be indefinite, the asset is not amortized.

Asset Impairments

We monitor the carrying value of our long-lived assets for potential impairment and test the recoverability of such assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. These events or changes in circumstances are referred to as impairment indicators. If an impairment indicator occurs, , we perform a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment has occurred for the group of assets for which we can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset or asset group to its carrying value. Fair value is generally determined by considering (i) internally developed discounted projected cash flow analysis of the asset or asset group; (ii) actual third-party valuations; and/or (iii) information available regarding the current market for similar assets. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs and is included in the “(Income) expense from divestitures, asset impairments and unusual items” line item in our Consolidated Statement of Operations. Estimating future cash flows requires significant judgment and projections may vary from the cash flows eventually realized, which could impact our ability to accurately assess whether an asset has been impaired. There are additional considerations for impairments of landfills and goodwill, as described below.

Landfills — Certain impairment indicators require significant judgment and understanding of the waste industry when applied to landfill development or expansion projects. For example, a regulator may initially deny a landfill expansion permit application though the expansion permit is ultimately granted. In addition, management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace. Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment of our landfill assets due to the unique nature of the waste industry.

Goodwill — At least annually, we assess whether goodwill is impaired. We assess whether an impairment exists by comparing the fair value of each operating segment to its carrying value, including goodwill. We use a combination of two valuation methods, a market approach and an income approach, to estimate the fair value of our operating segments. Fair value computed by these two methods is arrived at using a number of factors, including projected future operating results, economic projections, anticipated future cash flows, comparable marketplace data and the cost of capital. There are inherent uncertainties related to these factors and to our judgment in applying them to this analysis. However, we believe that these two methods provide a reasonable approach to estimating the fair value of our operating segments.

The market approach estimates fair value by measuring the aggregate market value of publicly-traded companies with similar characteristics of our business as a multiple of their reported cash flows. We then apply that multiple to our operating segment’s cash flows to estimate their fair value. We believe that this approach is appropriate because it provides a fair value estimate using valuation inputs from entities with operations and economic characteristics 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 flows and the risks inherent in those cash flows. We believe that this approach is appropriate because it provides a fair value estimate based upon our operating segments’ expected long-term performance considering the economic and market conditions that generally affect our business.

Additional impairment assessments may be performed on an interim basis if we encounter 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 December 31, 2009, our restricted trust and escrow accounts consist principally of (i) funds deposited for purposes of settling landfill closure, post-closure and environmental remediation obligations; and (ii) funds received from the issuance of tax-exempt bonds held in trust for the construction of various projects or facilities. As of December 31, 2009 and 2008, we had $306 million and $381 million, respectively, of restricted trust and escrow accounts, which are primarily included in long-term “Other assets” in our Consolidated Balance Sheets.

Closure, Post-Closure and Environmental Remediation Funds — At several of our landfills, we provide financial assurance by depositing cash into restricted trust funds or escrow accounts for purposes of settling closure, post-closure and environmental remediation obligations. 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 funds for qualifying closure, post-closure and environmental remediation 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.

Tax-Exempt Bond Funds — We obtain funds from the issuance of industrial revenue bonds for the construction of collection and disposal facilities and for equipment necessary to provide waste management services. Proceeds from these arrangements are directly deposited into trust accounts, and we do not have the ability to use the funds in regular operating activities. Accordingly, these borrowings are excluded from financing activities in our Consolidated Statements of Cash Flows. At the time our construction and equipment expenditures have been documented and approved by the applicable bond trustee, the funds are released and we receive cash. These amounts are reported in the Consolidated Statements of Cash Flows as an investing activity when the cash is released from the trust funds. Generally, the funds are fully expended within a few years of the debt issuance. When the debt matures, we repay our obligation with cash on hand and the debt repayments are included as a financing activity in the Consolidated Statements of Cash Flows.

Foreign Currency

We have operations in Canada. The functional currency of our Canadian subsidiaries is Canadian dollars. The assets and liabilities of our foreign operations are translated to U.S. dollars using the exchange rate at the balance sheet date. Revenues and expenses are translated to U.S. dollars using the average exchange rate during the period. The resulting translation difference is reflected as a component of comprehensive income.

Derivative Financial Instruments

We primarily use derivative financial instruments to manage our risk associated with fluctuations in interest rates and foreign currency exchange rates. We use interest rate swaps to maintain a strategic portion of our long-term debt obligations at variable, market-driven interest rates. In 2009, we entered into interest rate derivatives in anticipation of senior note issuances planned for 2010 through 2014 to effectively lock in a fixed interest rate for those anticipated issuances. Foreign currency exchange rate derivatives are used to hedge our exposure to changes in exchange rates for anticipated cash transactions between WM Holdings and its Canadian subsidiaries.

We obtain current valuations of our interest rate and foreign currency hedging instruments from third-party pricing models. The estimated fair values of derivatives used to hedge risks fluctuate over time and should be viewed in relation to the underlying hedged transaction and the overall management of our exposure to fluctuations in the underlying risks. The fair value of derivatives is included in other current assets, other long-term assets, accrued liabilities or other long-term liabilities, as appropriate. Any ineffectiveness present in either fair value or cash flow hedges is recognized immediately in earnings without offset. There was no significant ineffectiveness in 2009, 2008 or 2007.


	•	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 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.

Self-Insurance Reserves and Recoveries

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 and associated expenses, including incurred but not reported losses, generally is estimated with the assistance of external actuaries and by factoring in pending claims and historical trends and data. The gross estimated liability associated with settling unpaid claims is included in “Accrued liabilities” in our Consolidated Balance Sheets if expected to be settled within one year, or otherwise is included in long-term “Other liabilities.” Estimated insurance recoveries related to recorded liabilities are reflected as current “Other receivables” or long-term “Other assets” in our Consolidated Balance Sheets when we believe that the receipt of such amounts is probable.

Revenue Recognition

Our revenues are generated from the fees we charge for waste collection, transfer, disposal and recycling services and the sale of recycled commodities, electricity and steam. The fees charged for our services are generally defined in our service agreements and vary based on contract-specific terms such as frequency of service, weight, volume and the general market factors influencing a region’s rates. The fees we charge for our services generally include fuel surcharges, which are intended to pass through increased direct and indirect costs incurred because of changes in market prices for fuel. We generally recognize revenue as services are performed or products are delivered. For example, revenue typically is recognized as waste is collected, tons are received at our landfills or transfer stations, recycling commodities are delivered or as kilowatts are delivered to a customer by a waste-to-energy facility or independent power production plant.

We bill for certain services prior to performance. Such services include, among others, certain residential contracts that are billed on a quarterly basis and equipment rentals. These advance billings are included in deferred revenues and recognized as revenue in the period service is provided.

Capitalized Interest

We capitalize interest on certain projects under development, including internal-use software and landfill expansion projects, and on certain assets under construction, including operating landfills and waste-to-energy facilities. During 2009, 2008 and 2007, total interest costs were $443 million, $472 million, and $543 million, respectively, of which $17 million for 2009, $17 million for 2008, and $22 million for 2007, were capitalized, primarily for landfill construction costs. The capitalization of interest for operating landfills is based on the costs incurred in the pursuit of probable landfill expansions and on discrete landfill cell construction projects that are expected to exceed $500,000 and require over 60 days to construct. In addition to the direct cost of the cell construction project, the calculation of capitalized interest includes an allocated portion of the common landfill site costs. The common landfill site costs include the development costs of a landfill project or the purchase price of an operating landfill, and the ongoing infrastructure costs benefiting the landfill over its useful life. These costs are amortized to expense in a manner consistent with other landfill site costs.

Income Taxes

The Company is subject to income tax in the United States, Canada and Puerto Rico. Current tax obligations associated with our provision for income taxes are reflected in the accompanying Consolidated Balance Sheets as a component of “Accrued liabilities,” and the deferred tax obligations are reflected in “Deferred income taxes.”

Deferred income taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred income tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carry-forwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions may be challenged and potentially disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes.

To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component of income tax expense in our Consolidated Statements of Operations.

Contingent Liabilities

We estimate the amount of potential exposure we may have with respect to claims, assessments and litigation in accordance with accounting principles generally accepted in the United States. We are party to pending or threatened legal proceedings covering a wide range of matters in various jurisdictions. It is not always possible to predict the outcome of litigation, as it is subject to many uncertainties. Additionally, it is not always possible for management to make a meaningful estimate of the potential loss or range of loss associated with such contingencies.

Supplemental Cash Flow Information


	Years Ended December 31,
	2009		2008		2007

Cash paid during the year (in millions) for:
Interest, net of capitalized interest and periodic settlements from interest rate swap agreements	$	416	$	478	$	543
Income taxes		466		603		416

Non-cash investing and financing activities are excluded from the Consolidated Statements of Cash Flows. For the years ended December 31, 2009, 2008 and 2007, non-cash activities included proceeds from tax-exempt borrowings, net of principal payments made directly from trust funds, of $105 million, $169 million and $144 million, respectively.

Landfill and Environmental Remediation Liabilities

12 Months Ended

Dec. 31, 2009

Landfill and Environmental Remediation Liabilities [Abstract]

Landfill and Environmental Remediation Liabilities


4.	Landfill and Environmental Remediation Liabilities

Liabilities for landfill and environmental remediation costs are presented in the table below (in millions):


	December 31, 2009						December 31, 2008
			Environmental						Environmental
	Landfill		Remediation		Total		Landfill		Remediation		Total

Current (in accrued liabilities)	$	125	$	41	$	166	$	108	$	49	$	157
Long-term		1,142		215		1,357		1,110		250		1,360

	$	1,267	$	256	$	1,523	$	1,218	$	299	$	1,517

The changes to landfill and environmental remediation liabilities for the years ended December 31, 2008 and 2009 are reflected in the table below (in millions):


				Environmental
	Landfill			Remediation

December 31, 2007	$	1,178		$	284
Obligations incurred and capitalized		51			—
Obligations settled		(72	)		(38	)
Interest accretion		77			8
Revisions in cost estimates and interest rate assumptions(a)		(13	)		49
Acquisitions, divestitures and other adjustments		(3	)		(4	)

December 31, 2008		1,218			299
Obligations incurred and capitalized		39			—
Obligations settled		(80	)		(43	)
Interest accretion		80			6
Revisions in cost estimates and interest rate assumptions(a)		5			(7	)
Acquisitions, divestitures and other adjustments		5			1

December 31, 2009	$	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.

Our recorded liabilities as of December 31, 2009 include the impacts of inflating certain of these costs based on our expectations for the timing of cash settlement and of discounting certain of these costs to present value. Anticipated payments of currently identified environmental remediation liabilities as measured in current dollars are $41 million in 2010; $36 million in 2011; $23 million in 2012; $17 million in 2013; $14 million in 2014; and $146 million thereafter.

At several of our landfills, we provide financial assurance by depositing cash into restricted trust funds or escrow accounts for purposes of settling closure, post-closure and environmental remediation obligations. The fair value of these escrow accounts and trust funds was $231 million at December 31, 2009 and $213 million at December 31, 2008, and is primarily included as long-term “Other assets” in our Consolidated Balance Sheets.

Property and Equipment

12 Months Ended

Dec. 31, 2009

Property and Equipment [Abstract]

Property and Equipment


5.	Property and Equipment

Property and equipment at December 31 consisted of the following (in millions):


	2009			2008

Land	$	632		$	606
Landfills		12,301			11,716
Vehicles		3,660			3,683
Machinery and equipment		3,251			3,079
Containers		2,264			2,272
Buildings and improvements		2,745			2,635
Furniture, fixtures and office equipment		682			684

		25,535			24,675
Less accumulated depreciation on tangible property and equipment		(7,546	)		(7,220	)
Less accumulated landfill airspace amortization		(6,448	)		(6,053	)

	$	11,541		$	11,402

Depreciation and amortization expense, including amortization expense for assets recorded as capital leases, was comprised of the following for the years ended December 31 (in millions):


	2009		2008		2007

Depreciation of tangible property and equipment	$	779	$	785	$	796
Amortization of landfill airspace		358		429		440

Depreciation and amortization expense	$	1,137	$	1,214	$	1,236

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2009

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets


6.	Goodwill and Other Intangible Assets

Goodwill was $5,632 million as of December 31, 2009 compared with $5,462 million as of December 31, 2008. The $170 million increase in our goodwill during 2009 was primarily related to consideration paid for acquisitions in excess of net assets acquired of $125 million and accounting for foreign currency translation.

We incurred no impairment of goodwill as a result of our annual, fourth quarter goodwill impairment tests in 2009, 2008 or 2007. Additionally, we did not encounter any events or changes in circumstances that indicated that an impairment was more likely than not during interim periods in 2009, 2008 or 2007. However, there can be no assurance that goodwill will not be impaired at any time in the future.

As previously disclosed, in late 2008, there was a rapid and sharp decline in recyclable commodity prices due to a significant decrease in demand for recyclable commodities, both domestically and internationally. This significant shift in recycling market conditions was analyzed for purposes of our 2008 annual goodwill impairment test, although no impairment was required. Consistent with our expectations, the unprecedented declines in recyclable commodity prices and demand experienced during late 2008 and early 2009 were temporary in nature. Accordingly, we believe that the estimates and assumptions made with respect to the fair value of our recycling operations for our annual goodwill impairment tests in 2008 and 2009 appropriately considered the effects of commodity risks on this business.

Our other intangible assets as of December 31, 2009 and 2008 were comprised of the following (in millions):


	Customer
	Contracts and			Covenants			Licenses,
	Customer			Not-to-			Permits
	Lists			Compete			and Other			Total

December 31, 2009
Intangible assets	$	197		$	63		$	93		$	353
Less accumulated amortization		(68	)		(29	)		(18	)		(115	)

	$	129		$	34		$	75		$	238

December 31, 2008
Intangible assets	$	134		$	55		$	72		$	261
Less accumulated amortization		(56	)		(30	)		(17	)		(103	)

	$	78		$	25		$	55		$	158

Additional information related to intangible assets acquired through 2009 business combinations is included in Note 19.

Amortization expense for other intangible assets was $29 million for 2009, $24 million for 2008 and $23 million for 2007. At December 31, 2009, we had $40 million of intangible assets that are not subject to amortization, which are primarily operating permits that do not have stated expirations or that have routine, administrative renewal processes. The intangible asset amortization expense estimated as of December 31, 2009 is $34 million in 2010; $30 million in 2011; $28 million in 2012; $23 million in 2013; and $18 million in 2014.

Debt

12 Months Ended

Dec. 31, 2009

Debt [Abstract]

Debt


7.	Debt

The following table summarizes the major components of debt at December 31 (in millions) and provides the maturities and interest rates of each major category as of December 31, 2009:


	2009		2008

Revolving credit facility (weighted average interest rate of 2.4% at December 31, 2008)	$	—	$	300
Letter of credit facilities		—		—
Canadian credit facility (weighted average interest rate of 1.3% at December 31, 2009 and 3.3% at December 31, 2008)		255		242
Senior notes and debentures, maturing through 2039, interest rates ranging from 5.0% to 7.75% (weighted average interest rate of 6.8% at December 31, 2009 and 2008)		5,465		4,628
Tax-exempt bonds maturing through 2039, fixed and variable interest rates ranging from 0.2% to 7.4% (weighted average interest rate of 3.5% at December 31, 2009 and 3.9% at December 31, 2008)		2,749		2,684
Tax-exempt project bonds, principal payable in periodic installments, maturing through 2029, fixed and variable interest rates ranging from 0.3% to 5.4% (weighted average interest rate of 3.1% at December 31, 2009 and 4.9% at December 31, 2008)		156		220
Capital leases and other, maturing through 2050, interest rates up to 12%		248		252

	$	8,873	$	8,326
Less current portion		749		835

	$	8,124	$	7,491

Debt Classification

As of December 31, 2009, we had (i) $998 million of debt maturing within twelve months, consisting primarily of U.S.$255 million under our Canadian credit facility and $600 million of 7.375% senior notes that mature in August 2010; and (ii) $767 million of fixed-rate tax-exempt borrowings subject to re-pricing within the next twelve months. Under accounting principles generally accepted in the United States, this $1,765 million of debt must be classified as current unless we have the intent and ability to refinance it on a long-term basis. As discussed below, as of December 31, 2009, we had the intent and ability to refinance $1,016 million of this debt on a long-term basis. We have classified the remaining $749 million as current obligations as of December 31, 2009.

All of the borrowings outstanding under the Canadian credit facility mature less than one year from the date of issuance, but may be renewed under the terms of the facility, which matures in November 2012. As of December 31, 2009, we intend to repay U.S.$57 million of the outstanding borrowings under the facility with available cash during the next twelve months and refinance the remaining balance under the terms of the facility. As a result, as of December 31, 2009, U.S.$198 million of advances under the facility were classified as long-term based on our intent and ability to refinance the obligations on a long-term basis under the terms of the facility.

Additionally, we have classified the $767 million of tax-exempt bonds subject to re-pricing within twelve months as long-term as of December 31, 2009 based on our intent and ability to refinance any failed re-pricings using our $2.4 billion revolving credit facility. Although we also intend to refinance the $600 million of senior notes maturing in August 2010 on a long-term basis, an aggregate of $1,578 million of capacity under our revolving credit facility is currently utilized to support outstanding letters of credit and we currently forecast available capacity under the facility during the next twelve months to be $4 million less than the current available capacity. After giving effect to these items, only $51 million of capacity is forecasted to be available under the revolving credit facility, giving us the ability to classify only $51 million of the August 2010 maturity as long-term as of December 31, 2009.

As of December 31, 2009, we also have $771 million of variable-rate tax-exempt bonds and $46 million of variable-rate tax-exempt project bonds. The interest rates on these bonds are reset on either a daily or weekly basis through a remarketing process. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to us. These bonds are supported by letters of credit guaranteeing repayment of the bonds in this event. We classified these borrowings as long-term in our Consolidated Balance Sheet at December 31, 2009 because the borrowings are supported by letters of credit issued under our five-year revolving credit facility, which is long-term.

Access to and Utilization of Credit Facilities

Revolving Credit Facility — In August 2006, WMI entered into a five-year, $2.4 billion revolving credit facility. This facility provides us with credit capacity to be used for either cash borrowings or to support letters of credit. 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.

The $300 million of outstanding borrowings at December 31, 2008 was repaid in the first quarter of 2009 with proceeds from the February 2009 issuance of senior notes discussed below.

Letter of Credit Facilities — As of 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. These facilities are currently being used to back letters of credit issued to support our bonding and financial assurance needs. Our letters of credit generally have terms providing for automatic renewal after one year. In the event of an unreimbursed draw on a letter of credit, the amount of the draw paid by the letter of credit provider generally converts into a term loan for the remaining term of the respective facility. Through December 31, 2009, we had not experienced any unreimbursed draws on letters of credit under these facilities.

As of December 31, 2009, no borrowings were outstanding under these letter of credit facilities, and we had unused and available credit capacity of $9 million.

Canadian Credit Facility — In November 2005, Waste Management of Canada Corporation, one of our wholly-owned subsidiaries, entered into a three-year credit facility agreement with an initial credit capacity of up to C$410 million. The agreement was entered into to facilitate WMI’s repatriation of accumulated earnings and capital from its Canadian subsidiaries. In December 2007, we amended the agreement, increasing the available capacity, which had been reduced to C$305 million due to debt repayments, to C$340 million. The amendment also extended the maturity date of the facility to November 2012 and added an uncommitted option to increase the capacity by an additional C$25 million.

As of December 31, 2009, we had U.S.$257 million of principal (U.S.$255 million net of discount) outstanding under this credit facility. Advances under the facility do not accrue interest during their terms. Accordingly, the proceeds we initially received were for the principal amount of the advances net of the total interest obligation due for the term of the advance, and the debt was initially recorded based on the net proceeds received. The advances have a weighted average effective interest rate of 1.3% at December 31, 2009, which is being amortized to interest expense with a corresponding increase in our recorded debt obligation using the effective interest method. During the year ended December 31, 2009, we increased the carrying value of the debt for the recognition of U.S.$6 million of interest expense. A total of U.S.$31 million of advances under the facility matured during 2009 and were repaid with available cash. Accounting for changes in the Canadian currency translation rate increased the carrying value of these borrowings by U.S.$38 million during 2009.

Debt Borrowings and Repayments

Senior Notes — In February 2009, we issued $350 million of 6.375% senior notes due March 2015 and $450 million of 7.375% senior notes due March 2019. The net proceeds from the debt issuance were $793 million. A portion of the proceeds was used to repay $300 million of outstanding borrowings under the revolving credit facility and the remaining proceeds were used in repaying $500 million of 6.875% senior notes that matured in May 2009.

In November 2009, we issued $600 million of 6.125% senior notes due in November 2039. The net proceeds from the debt issuance were $592 million. We intend to use a portion of the proceeds to fund our anticipated purchase of a 40% equity investment in Shanghai Environment Group for approximately $140 million, as discussed in Note 11. We are actively pursuing other acquisitions and investment opportunities in our waste-to energy and solid waste businesses and expect to spend up to an additional $350 million over the next six months from the proceeds of this offering on such acquisitions and investments. All remaining proceeds will be used for general corporate purposes. Pending application of the offering proceeds as described, we have temporarily invested the proceeds in money market funds, which are reflected as cash equivalents in our December 31, 2009 Consolidated Balance Sheet.

The remaining change in the carrying value of our senior notes from December 31, 2008 to December 31, 2009 is due to accounting for our fixed-to-floating interest rate swap agreements, which are accounted for as fair value hedges resulting in all fair value adjustments being reflected as a component of the carrying value of the underlying debt. For additional information regarding our interest rate derivatives, refer to Note 8.

Tax-Exempt Bonds — We actively issue tax-exempt bonds as a means of accessing low-cost financing for capital expenditures. We issued $130 million of tax-exempt bonds during 2009. The proceeds from these debt issuances may only be used for the specific purpose for which the money was raised, which is generally to finance expenditures 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, 2009, $65 million of our tax-exempt bonds were repaid with available cash.

Tax-Exempt Project Bonds — Tax-exempt project bonds have been used by our Wheelabrator Group to finance the development of waste-to-energy facilities. These facilities are integral to the local communities they serve, and, as such, are supported by long-term contracts with multiple municipalities. The bonds generally have periodic amortizations that are supported by the cash flow of each specific facility being financed. During the year ended December 31, 2009, we repaid $64 million of our tax-exempt project bonds with either available cash or debt service funds.

Capital Leases and Other — The decrease in our capital leases and other debt obligations in 2009 is primarily related to the repayment of various borrowings upon their scheduled maturities.

Scheduled Debt and Capital Lease Payments — Scheduled debt and capital lease payments for the next five years are as follows: $985 million in 2010; $259 million in 2011; $584 million in 2012; $174 million in 2013; and $430 million in 2014. Our recorded debt and capital lease obligations include non-cash adjustments associated with discounts, premiums and fair value adjustments for interest rate hedging activities, which have been excluded from these amounts because they will not result in cash payments.

Secured Debt

Our debt balances are generally unsecured, except for $70 million of the tax-exempt project bonds outstanding at December 31, 2009 that were issued by certain subsidiaries within our Wheelabrator Group. These bonds are secured by the related subsidiaries’ assets that have a carrying value of $301 million and the related subsidiaries’ future revenue.

Debt Covenants

Our revolving credit facility and certain other financing agreements contain financial covenants. The most restrictive of these financial covenants are contained in our revolving credit facility. The following table summarizes the requirements of these financial covenants and the results of the calculation, as defined by the revolving credit facility:

Requirement

December 31,

Covenant

per Facility

2009

2008

Interest coverage ratio

> 2.75 to 1

4.3 to 1

4.7 to 1

Total debt to EBITDA

< 3.5 to 1

2.9 to 1

2.4 to 1

Our revolving credit facility and senior notes also contain certain restrictions intended to monitor our level of indebtedness, types of investments and net worth. We monitor our compliance with these restrictions, but do not believe that they significantly impact our ability to enter into investing or financing arrangements typical for our business. As of December 31, 2009, we were in compliance with the covenants and restrictions under all of our debt agreements.

Interest Rate and Foreign Currency Derivatives

12 Months Ended

Dec. 31, 2009

Interest Rate and Foreign Currency Derivatives [Abstract]

Interest Rate and Foreign Currency Derivatives


8.	Interest Rate and Foreign Currency Derivatives

The following table summarizes the fair values of derivative instruments recorded in our Consolidated Balance Sheets as of December 31, 2009 (in millions):


Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value

Interest rate contracts	Current other assets	$	13
Interest rate contracts	Long-term other assets		32

Total derivative assets		$	45

Foreign exchange contracts	Current accrued liabilities	$	18

Total derivative liabilities		$	18

The following table summarizes the fair values of derivative instruments recorded in our Consolidated Balance Sheets as of December 31, 2008 (in millions):


Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value

Interest rate contracts	Current other assets	$	3
Interest rate contracts	Long-term other assets		89
Foreign exchange contracts	Current other assets		1
Foreign exchange contracts	Long-term other assets		27

Total derivative assets		$	120

For information related to the methods used to measure our derivative assets and liabilities at fair value, refer to Note 18.

Interest Rate Derivatives

Interest Rate Swaps

We use interest rate swaps to maintain a portion of our debt obligations at variable market interest rates. As of December 31, 2009, we had approximately $5.4 billion in fixed-rate senior notes outstanding. The interest payments on $1.1 billion, or 20%, of these senior notes have been swapped to variable interest rates to protect the debt against changes in fair value due to changes in benchmark interest rates. As of December 31, 2008, we had approximately $4.5 billion in fixed-rate senior notes outstanding, of which $2.0 billion, or 43%, had been swapped to variable interest rates. The significant terms of our interest rate swap agreements as of December 31, 2009 and 2008 are summarized in the table below (in millions):


	Notional
As of	Amount		Receive	Pay	Maturity Date

December 31, 2009	$	1,100	Fixed 5.00%-7.65%	Floating 0.05%-4.64%	Through March 15, 2018
December 31, 2008	$	1,950	Fixed 5.00%-7.65%	Floating 1.22%-5.82%	Through March 15, 2018

The decrease in the notional amount of our interest rate swaps from December 31, 2008 to December 31, 2009 is due to (i) the scheduled maturity of interest rate swaps with a notional amount of $500 million in May 2009; and (ii) our election to terminate interest rate swaps with a notional amount of $350 million in December 2009. The terminated interest rate swaps 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 associated fair value adjustments to long-term debt will be amortized as a reduction to interest expense over the remaining term of the underlying debt using the effective interest method. The cash proceeds received from our termination of the swaps have been classified as a change in other assets within “Net cash provided by operating activities” in the Consolidated Statement of Cash Flows.

We have designated our interest rate swaps as fair value hedges of our fixed-rate senior notes. Fair value hedge accounting for interest rate swap contracts increased the carrying value of debt instruments by $91 million as of December 31, 2009 and $150 million as of December 31, 2008. The following table summarizes the accumulated fair value adjustments from interest rate swap agreements at December 31 (in millions):


Increase in Carrying Value of Debt Due to Hedge
Accounting for Interest Rate Swaps	2009		2008

Senior notes:
Active swap agreements	$	32	$	92
Terminated swap agreements		59		58

	$	91	$	150

Gains or losses on the derivatives as well as the offsetting losses or gains on the hedged items attributable to our interest rate swaps are recognized in current earnings. We include gains and losses on our interest rate swaps as adjustments to interest expense, which is the same financial statement line item where offsetting gains and losses on the related hedged items are recorded. The following table summarizes the impact of changes in the fair value of our interest rate swaps and the underlying hedged items on our results of operations (in millions):


Years Ended		Statement of Operations		Gain (Loss) on	Gain (Loss) on
December 31,		Classification		Swap	Fixed-Rate Debt

	2009		Interest expense	$(60)	$	60
	2008		Interest expense	$120	$	(120	)
	2007		Interest expense	$90	$	(90	)

We also recognize the impacts of (i) net periodic settlements of current interest on our active interest rate swaps and (ii) the amortization of previously terminated interest rate swap agreements as adjustments to interest expense. The following table summarizes the impact of periodic settlements of active swap agreements and the impact of terminated swap agreements on our results of operations (in millions):


(Increase) Decrease to Interest Expense Due to Hedge	Years Ended December 31,
Accounting for Interest Rate Swaps	2009		2008		2007

Periodic settlements of active swap agreements(a)	$	46	$	8	$	(48	)
Terminated swap agreements(b)		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.

Treasury Rate Locks

During the third quarter of 2009, we entered into Treasury rate locks with a total notional value of $200 million to hedge the risk of changes in semi-annual interest payments that are expected for senior notes that the Company plans to issue late in the second quarter of 2010. We have designated our Treasury rate lock derivatives as cash flow hedges. As of December 31, 2009, the fair value of these interest rate derivatives is comprised of $4 million of current assets. We recognized pre-tax and after-tax gains of $4 million and $2 million, respectively, to other comprehensive income for changes in their fair value during the year ended December 31, 2009. There was no significant ineffectiveness associated with these hedges during the year ended December 31, 2009.

Our “Accumulated other comprehensive income” also includes deferred losses, net of taxes, of $16 million as of December 31, 2009 and $20 million as of December 31, 2008 related to Treasury rate locks that had been executed in previous years in anticipation of senior note issuances. As these instruments also were designated as cash flow hedges, the deferred losses are being reclassified to earnings over the term of the hedged cash flows, which extend through 2032. As of December 31, 2009, $7 million (on a pre-tax basis) is scheduled to be reclassified into interest expense over the next twelve months.

Forward-Starting Interest Rate Swaps

The Company currently expects to issue fixed-rate debt in March 2011, November 2012 and March 2014 and has executed forward-starting interest rate swaps for these anticipated debt issuances with notional amounts of $150 million, $200 million and $175 million, respectively. We entered into the forward-starting interest rate swaps during the fourth quarter of 2009 to hedge the risk of changes in the anticipated semi-annual interest payments due to fluctuations in the forward ten-year LIBOR swap rate. Each of the forward-starting swaps has an effective date of the anticipated date of debt issuance and a tenor of ten years.

We have designated our forward-starting interest rate swaps as cash flow hedges. As of December 31, 2009, the fair value of these interest rate derivatives is comprised of $9 million of long-term assets. We recognized pre-tax and after-tax gains of $9 million and $5 million, respectively, to other comprehensive income for changes in the fair value of our forward-starting interest rate swaps during the year ended December 31, 2009. There was no significant ineffectiveness associated with these hedges during the year ended December 31, 2009.

Credit-Risk Features

Certain of our interest rate derivative instruments contain provisions related to the Company’s credit ratings. If the Company’s credit rating were to fall below investment grade, the counterparties have the ability to cancel the derivative agreements and request immediate payment of any net liability positions. We do not have any derivative instruments with credit-risk-related contingent features that are in a net liability position at December 31, 2009.

Foreign Exchange Derivatives

We use foreign currency exchange rate derivatives to hedge our exposure to changes in exchange rates for anticipated intercompany cash transactions between WM Holdings and its Canadian subsidiaries. As of December 31, 2009, we have foreign currency forward contracts outstanding for all of our anticipated cash flows associated with an outstanding debt arrangement with these wholly-owned subsidiaries. The hedged cash flows include C$370 million of principal payments, which are scheduled for December 31, 2010, and C$22 million of interest payments scheduled for December 31, 2010. We have designated our foreign currency derivatives as cash flow hedges.

Gains or losses on the derivatives and the offsetting losses or gains on the hedged items attributable to foreign currency exchange risk are recognized in current earnings. We include gains and losses on our foreign currency forward contracts as adjustments to other income and expense, which is the same financial statement line item where offsetting gains and losses on the related hedged items are recorded. The following table summarizes the pre- tax impacts of our foreign currency cash flow derivatives on our results of operations and comprehensive income (in millions):


		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
December 31,		(Effective Portion)			Classification	(Effective Portion)

	2009	$	(47	)	Other income (expense)	$	(47	)
	2008	$	65		Other income (expense)	$	72
	2007	$	(45	)	Other income (expense)	$	(56	)

The above table represents the impacts of our foreign exchange contracts on a pre-tax basis. Amounts reported in other comprehensive income and accumulated other comprehensive income are reported net of tax. Adjustments to other comprehensive income for changes in the fair value of our foreign currency cash flow hedges resulted in the recognition of an after-tax loss of $28 million during the year ended December 31, 2009; an after-tax gain of $40 million during the year ended December 31, 2008; and an after-tax loss of $28 million during the year ended December 31, 2007. Adjustments for the reclassification of gains or (losses) from accumulated other comprehensive income into income were $(28) million during the year ended December 31, 2009; $44 million during the year ended December 31, 2008; and $(34) million during the year ended December 31, 2007. There was no significant ineffectiveness associated with these hedges during the years ended December 31, 2009, 2008 or 2007. Ineffectiveness has been included in other income and expense during each of the reported periods.

Income Taxes

12 Months Ended

Dec. 31, 2009

Income Taxes [Abstract]

Income Taxes


9.	Income Taxes

Provision for Income Taxes

Our “Provision for income taxes” consisted of the following (in millions):


	Years Ended December 31,
	2009			2008			2007

Current:
Federal	$	407		$	436		$	412
State		74			52			33
Foreign		26			31			25

		507			519			470

Deferred:
Federal		(45	)		126			91
State		(35	)		27			(3	)
Foreign		(14	)		(3	)		(18	)

		(94	)		150			70

Provision for income taxes	$	413		$	669		$	540

The U.S. federal statutory income tax rate is reconciled to the effective rate as follows:


	Years Ended December 31,
	2009			2008			2007

Income tax expense at U.S. federal statutory rate		35.00	%		35.00	%		35.00	%
State and local income taxes, net of federal income tax benefit		3.75			3.63			2.62
Non-conventional fuel tax credits		—			—			(2.54	)
Noncontrolling interests		(1.56	)		(0.80	)		(0.92	)
Taxing authority audit settlements and other tax adjustments		(2.89	)		(0.99	)		(1.19	)
Nondeductible costs relating to acquired intangibles		0.18			0.79			1.08
Tax rate differential on foreign income		(0.24	)		(0.03	)		0.04
Cumulative effect of change in tax rates		(0.49	)		—			(1.76	)
Utilization of capital loss		(4.44	)		—			—
Other		(1.24	)		(0.37	)		(1.46	)

Provision for income taxes		28.07	%		37.23	%		30.87	%

The comparability of our income taxes for the reported periods has been significantly affected by variations in our income before income taxes, tax audit settlements, changes in effective state and Canadian statutory tax rates, utilization of state net operating loss and credit carry-forwards, utilization of a capital loss carry-back and non-conventional fuel tax credits. For financial reporting purposes, income before income taxes showing domestic and foreign sources was as follows (in millions) for the years ended December 31, 2009, 2008 and 2007:


	Years Ended December 31,
	2009		2008		2007

Domestic	$	1,396	$	1,693	$	1,651
Foreign		77		104		98

Income before income taxes	$	1,473	$	1,797	$	1,749

Tax Audit Settlements — The Company and its subsidiaries file income tax returns in the United States and Puerto Rico, as well as various state and local jurisdictions and Canada. We are currently under audit by the IRS and from time to time we are audited by other taxing authorities. Our audits are in various stages of completion.

During 2009, we effectively settled an IRS audit for the 2008 tax year as well as various state tax audits. The settlement of these tax audits resulted in a reduction to our “Provision for income taxes” of $11 million, or $0.02 per diluted share, for the year ended December 31, 2009.

During 2008, we settled IRS audits for the 2006 and 2007 tax years as well as various state tax audits. In addition, we settled Canadian audits for the tax years 2002 through 2005. The settlement of these tax audits resulted in a reduction to our “Provision for income taxes” of $26 million, or $0.05 per diluted share, for the year ended December 31, 2008.

During 2007, we settled an IRS audit for the tax years 2004 and 2005 and various state tax audits, resulting in a reduction in income tax expense of $40 million, or $0.08 per diluted share. Our 2007 “Net income attributable to Waste Management, Inc.” was also increased by $1 million due to interest income recognized from audit settlements.

We are currently in the examination phase of an IRS audit for the 2009 tax year and expect this audit to be completed within the next 12 months. We participate in the IRS’s Compliance Assurance Program, which means we work with the IRS throughout the year in order to resolve any material issues prior to the filing of our year-end return. We are also currently undergoing audits by various state and local jurisdictions that date back to 1999 and examinations associated with Canada that date back to 1998.

Effective State Tax Rate Change — 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%, resulting in an increase to our provision for income taxes of $3 million and $6 million, respectively. During 2008, our current state tax rate increased from 5.5% to 6.0%, resulting in an increase to our income taxes of $5 million. The increases in these rates are primarily due to changes in state law. The comparison of our effective state tax rate during the reported periods has also been affected by return-to-accrual adjustments, which reduced our “Provision for income taxes” in 2009, 2008 and 2007.

Canada Statutory Tax Rate 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. In addition, during 2007, the Canadian federal government enacted tax rate reductions, which resulted in a $30 million tax benefit on the revaluation of the related deferred tax balances. We did not have any comparable adjustments during the year ended December 31, 2008.

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.

Capital Loss Carry-Back — During 2009, we generated a capital loss from the liquidation of a foreign subsidiary. We have determined that the capital loss can be utilized to offset capital gains from 2006 and 2007, which resulted in a reduction to our 2009 “Provision for income taxes” of $65 million.

Non-Conventional Fuel Tax Credits — The favorable impact of non-conventional fuel tax credits on our 2007 effective tax rate was derived from our investments in two coal-based, synthetic fuel production facilities, which provided $37 million of tax credits in 2007, and our landfill gas-to-energy projects, which provided $13 million of tax credits in 2007. The fuel generated from the facilities and our landfill gas-to-energy projects qualified for tax credits through 2007 under Section 45K of the Internal Revenue Code.

Our noncontrolling interests in the coal-based synthetic fuel production facilities resulted in the recognition of our pro-rata share of the facilities’ losses, the amortization of our investments, and additional expense associated with other estimated obligations all being recorded as “Equity in net losses of unconsolidated entities” within our Consolidated Statements of Operations. In 2007, our equity in the net losses of the facilities was $42 million and we recognized a tax benefit associated with the losses and the associated tax credits of $53 million.

Unremitted Earnings in Foreign Subsidiaries — At December 31, 2009, remaining unremitted earnings in foreign operations were approximately $550 million, which are considered permanently invested and, therefore, no provision for U.S. income taxes has been accrued for these unremitted earnings.

Deferred Tax Assets (Liabilities)

The components of the net deferred tax assets (liabilities) at December 31 are as follows (in millions):


	December 31,
	2009			2008

Deferred tax assets:
Net operating loss, capital loss and tax credit carry-forwards	$	259		$	168
Landfill and environmental remediation liabilities		54			21
Miscellaneous and other reserves		176			249

Subtotal		489			438
Valuation allowance		(139	)		(135	)
Deferred tax liabilities:
Property and equipment		(941	)		(1,012	)
Goodwill and other intangibles		(802	)		(736	)

Net deferred tax liabilities	$	(1,393	)	$	(1,445	)

At December 31, 2009, we had $28 million of federal net operating loss, or NOL, carry-forwards, $1.4 billion of state NOL carry-forwards, and $12 million of Canadian NOL carry-forwards. The federal and state NOL carry-forwards have expiration dates through the year 2029. The Canadian NOL carry-forwards are expected to be utilized in 2010. We also realized a capital loss, $76 million of which is carried forward and expires in 2014. In addition, we have $39 million of state tax credit carry-forwards at December 31, 2009.

We have established valuation allowances for uncertainties in realizing the benefit of certain tax loss and credit carry-forwards and other deferred tax assets. While we expect to realize the deferred tax assets, net of the valuation allowances, changes in estimates of future taxable income or in tax laws may alter this expectation. The valuation allowance increased $4 million in 2009. This was primarily due to an increase of $26 million resulting from our capital loss carry-forward, offset, in part, by a $24 million state tax benefit due to a reduction in the valuation allowance related to the expected utilization of state NOL and credit carry-forwards. The remaining increase in our valuation allowance was due to changes in our gross deferred tax assets due to changes in state NOL and credit carry-forwards.

Liabilities for Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits, including accrued interest for 2009, 2008 and 2007 is as follows (in millions):


	2009			2008			2007

Balance at January 1	$	84		$	102		$	117
Additions based on tax positions related to the current year		6			9			10
Additions related to tax positions of prior years		—			11			4
Accrued interest		4			4			7
Reductions for tax positions of prior years		(1	)		—			(1	)
Settlements		(10	)		(36	)		(26	)
Lapse of statute of limitations		(8	)		(6	)		(9	)

Balance at December 31	$	75		$	84		$	102

These liabilities are primarily included as a component of long-term “Other liabilities” in our Consolidated Balance Sheets because the Company generally does not anticipate that settlement of the liabilities will require payment of cash within the next twelve months. As of December 31, 2009, $50 million of unrecognized tax benefits, if recognized in future periods, would impact our effective tax rate.

We recognize interest expense related to unrecognized tax benefits in tax expense. During the years ended December 31, 2009, 2008 and 2007 we recognized approximately $4 million, $4 million and $7 million, respectively, of such interest expense as a component of our “Provision for income taxes.” We had approximately $11 million and $9 million of accrued interest in our Consolidated Balance Sheets as of December 31, 2009 and 2008, respectively. We do not have any accrued liabilities or expense for penalties related to unrecognized tax benefits for the years ended December 31, 2009, 2008 and 2007.

We anticipate that approximately $20 million of liabilities for unrecognized tax benefits, including accrued interest, and $7 million of related deferred tax assets may be reversed within the next 12 months. The anticipated reversals are related to various federal and state tax items, none of which are material, and are expected to result from audit settlements or the expiration of the applicable statute of limitations period.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2009

Employee Benefit Plans [Abstract]

Employee Benefit Plans


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 generally eligible to participate in the plans following a 90-day waiting period after hire and may contribute as much as 25% of their annual compensation, subject to annual contribution limitations established by the IRS. Under our largest retirement savings plan, we match, in cash, 100% of employee contributions on the first 3% of their eligible compensation and match 50% of employee contributions on the next 3% of their eligible compensation, resulting in a maximum match of 4.5%. Both employee and Company contributions vest immediately. Charges to “Operating” and “Selling, general and administrative” expenses for our defined contribution plans were $50 million in 2009, $59 million in 2008 and $54 million in 2007.

Defined Benefit Plans — Certain of the Company’s subsidiaries sponsor pension plans that cover employees not covered by the Savings Plan. 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, 2009, the combined benefit obligation of these pension plans was $69 million, and the plans had $51 million of plan assets, resulting in an unfunded benefit obligation for these plans of $18 million.

In addition, Waste Management Holdings, Inc. and certain of its subsidiaries provided post-retirement health care and other benefits to eligible employees. In conjunction with our acquisition of WM Holdings in July 1998, we limited participation in these plans to participating retired employees as of December 31, 1998. The unfunded benefit obligation for these plans was $45 million at December 31, 2009.

Our accrued benefit liabilities for our defined benefit pension and other post-retirement plans are $63 million as of December 31, 2009 and are included as components of “Accrued liabilities” and long-term “Other liabilities” in our Consolidated Balance Sheet.

We are a participating employer in a number of trustee-managed multi-employer, defined benefit pension plans for employees who participate in collective bargaining agreements. Contributions of $34 million in 2009, $35 million in 2008 and $33 million in 2007 were charged to operations for our subsidiaries’ ongoing participation in these defined benefit plans. Our portion of the projected benefit obligation, plan assets and unfunded liability of the multi-employer pension plans are not material to our financial position. Specific benefit levels provided by union pension plans are not negotiated with or known by the employer contributors.

Based on our negotiations with collective bargaining units and our review of the plans in which they participate, we may negotiate for the complete or partial withdrawal from one or more of these pension plans. If we elect to withdraw from these plans, we may incur expenses associated with our obligations for unfunded vested benefits at the time of the withdrawal. As discussed in Note 11, in 2009 and 2008, we recognized aggregate charges of $9 million and $39 million, respectively, to “Operating” expenses for the withdrawal of certain bargaining units from multi-employer pension plans.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2009

Commitments and Contingencies [Abstract]

Commitments and Contingencies


11.	Commitments and Contingencies

Financial Instruments — We have obtained letters of credit, performance bonds and insurance policies and have established trust funds and issued financial guarantees to support tax-exempt bonds, contracts, performance of landfill closure and post-closure requirements, environmental remediation, and other obligations.

Historically, our revolving credit facilities have been used to obtain letters of credit to support our bonding and financial assurance needs. We also have three letter of credit facilities that were established to provide us with additional sources of capacity from which we may obtain letters of credit. These facilities are discussed further in Note 7. We obtain surety bonds and insurance policies from an entity in which we have a noncontrolling financial interest. We also obtain insurance from a wholly-owned insurance company, the sole business of which is to issue policies for the parent holding company and its other subsidiaries, to secure such performance obligations. In those instances where our use of financial assurance from entities we own or have financial interests in is not allowed, we generally have available alternative bonding mechanisms.

Because virtually no claims have been made against the financial instruments we use to support our obligations, and considering our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our consolidated financial statements. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations. In an ongoing effort to mitigate risks of future cost increases and reductions in available capacity, we continue to evaluate various options to access cost-effective sources of financial assurance.

Insurance — We carry insurance coverage for protection of our assets and operations from certain risks including automobile liability, general liability, real and personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability and other coverages we believe are customary to the industry. Our exposure to loss for insurance claims is generally limited to the per incident deductible under the related insurance policy. Our exposure, however, could increase if our insurers were 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 retentions, the exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial valuation and internal estimates. The estimated accruals for these liabilities could be affected if future occurrences or loss development significantly differ from the assumptions used. As of December 31, 2009, our general liability insurance program carried self-insurance exposures of up to $2.5 million per incident and our workers’ compensation insurance program carried self-insurance exposures of up to $5 million per incident. As of December 31, 2009, our auto liability insurance program included a per-incident base deductible of $5 million, subject to additional aggregate deductibles in the $5 million to $10 million layer of $4.8 million. Self-insurance claims reserves acquired as part of our acquisition of WM Holdings in July 1998 were discounted at 3.75% at December 31, 2009, 2.25% at December 31, 2008 and 4.0% at December 31, 2007. The changes to our net insurance liabilities for the three years ended December 31, 2009 are summarized below (in millions):


	Gross Claims			Estimated Insurance			Net Claims
	Liability			Recoveries(a)			Liability

Balance, December 31, 2006	$	652		$	(267	)	$	385
Self-insurance expense (benefit)		144			(1	)		143
Cash (paid) received		(225	)		54			(171	)

Balance, December 31, 2007		571			(214	)		357
Self-insurance expense (benefit)		169			(28	)		141
Cash (paid) received		(209	)		51			(158	)

Balance, December 31, 2008		531			(191	)		340
Self-insurance expense (benefit)		184			(32	)		152
Cash (paid) received		(174	)		29			(145	)

Balance, December 31, 2009(b)	$	541		$	(194	)	$	347

Current portion at December 31, 2009	$	149		$	(63	)	$	86
Long-term portion at December 31, 2009	$	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.

For the 14 months ended January 1, 2000, we insured certain risks, including auto, general liability and workers’ compensation, with Reliance National Insurance Company, whose parent filed for bankruptcy in June 2001. In October 2001, the parent and certain of its subsidiaries, including Reliance National Insurance Company, were placed in liquidation. We believe that because of probable recoveries from the liquidation, currently estimated to be $14 million, it is unlikely that events relating to Reliance will have a material adverse impact on our financial statements.

We do not expect the impact of any known casualty, property, environmental or other contingency to have a material impact on our financial condition, results of operations or cash flows.

Operating Leases — Rental expense for leased properties was $114 million during both 2009 and 2008 and $135 million during 2007. These amounts primarily include rents under operating leases. Minimum contractual payments due for our operating lease obligations are $88 million in 2010, $75 million in 2011, $72 million in 2012, $58 million in 2013 and $47 million in 2014.

Our minimum contractual payments for lease agreements during future periods is significantly less than current year rent expense because our significant lease agreements at landfills have variable terms based either on a percentage of revenue or a rate per ton of waste received.

Purchase Commitment — We continue to focus on the expansion of our waste-to-energy business and are actively pursuing various projects in the United States and internationally. In August 2009, we entered into an agreement to purchase a 40% equity investment in Shanghai Environment Group (“SEG”), a subsidiary of Shanghai Chengtou Holding, for approximately $140 million. As a joint venture partner in SEG, we will participate in the operation and management of waste-to-energy and other waste services in the Chinese market. SEG will also focus on building new waste-to-energy facilities in China. The Ministry of Commerce of the People’s Republic of China approved the transaction in January 2010 and we currently expect the transaction to close during the first half of 2010.

Other Commitments


	•	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.

Our unconditional obligations are established in the ordinary course of our business and are structured in a manner that provides us with access to important resources at competitive, market-driven rates. Our actual future obligations under these outstanding agreements are generally quantity driven, and, as a result, our associated financial obligations are not fixed as of December 31, 2009. For these contracts, we have estimated our future obligations based on the current market values of the underlying products or services. Our estimated minimum obligations for the above-described purchase obligations are $166 million in 2010, $61 million in 2011, $53 million in 2012, $31 million in 2013 and $18 million in 2014. We currently expect the products and services provided by these agreements to continue to meet the needs of our ongoing operations. Therefore, we do not expect these established arrangements to materially impact our future financial position, results of operations or cash flows.

Guarantees — We have entered into the following guarantee agreements associated with our operations:


	•	As of December 31, 2009, WM Holdings has fully and unconditionally guaranteed all of WMI’s 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 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.

We currently do not believe it is reasonably likely that we would be called upon to perform under these guarantees and do not believe that any of the obligations would have a material effect on our financial position, results of operations and cash flows.

Environmental Matters — A significant portion of our operating costs and capital expenditures could be characterized as costs of environmental protection, as we are subject to an array of laws and 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 or local authorities, such liabilities include PRP investigations. The costs associated with these liabilities can include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated with site investigation and clean-up.

As of December 31, 2009, we had been notified that we are a PRP in connection with 74 locations listed on the EPA’s National Priorities List, or NPL. Of the 74 sites at which claims have been made against us, 16 are sites we own. Each of the NPL sites we own was initially developed by others as a landfill disposal facility. At each of these facilities, we are working in conjunction with the government to characterize or remediate identified site problems, and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or 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 Response, Compensation and Liability Act of 1980, as amended, known as CERCLA or Superfund.

The majority of these proceedings involve allegations that certain of our subsidiaries (or their predecessors) transported hazardous substances to the sites, often prior to our acquisition of these subsidiaries. CERCLA generally provides for liability for those parties owning, operating, transporting to or disposing at the sites. Proceedings arising under Superfund typically involve numerous waste generators and other waste transportation and disposal companies and seek to allocate or recover costs associated with site investigation and remediation, which costs could be substantial and could have a material adverse effect on our consolidated financial statements. At some of the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a governmental decision and an agreement among liable parties as to the share each will pay for implementing that remedy. At other sites, where no remedy has been selected or the liable parties have been unable to agree on an appropriate allocation, our future costs are uncertain.

Litigation — In April 2002, two former participants in the ERISA plans of Waste Management Holdings, Inc., a wholly-owned subsidiary we acquired in 1998 (“WM Holdings”), filed a lawsuit in the U.S. District Court for the District of Columbia in a case entitled William S. Harris, et al. v. James E. Koenig, et al. The lawsuit named as defendants WM Holdings; the members of WM Holdings’ Board of Directors prior to July 1998; the administrative and investment committees of WM Holdings’ ERISA plans and their individual members; WMI’s retirement savings plan; the investment committees of WMI’s plan and its individual members; and State Street Bank & Trust, the trustee and investment manager of the ERISA plans. The lawsuit attempts to increase the recovery of a class of ERISA plan participants based on allegations related to both the events alleged in, and the settlements relating to, the securities class action against WM Holdings that was settled in 1998 and the securities class action against WMI that was settled in 2001. The defendants filed motions to dismiss the complaints on the pleadings, and the Court granted in part and denied in part the defendants’ motions in the first quarter of 2009. However, in December 2009, the Court granted the plaintiffs’ motion for leave to file a fourth amended complaint to overcome the dismissal of certain complaints and motion for leave to file a substitute fourth amended complaint to add two new claims. Each of Mr. Pope, Mr. Rothmeier and Ms. San Juan Cafferty, members of our Board of Directors, was a member of the WM Holdings’ Board of Directors and therefore is a named defendant in these actions, as is Mr. Simpson, our Chief Financial Officer, by virtue of his membership on the WMI ERISA plan Investment Committee at that time. All of the defendants intend to continue to defend themselves vigorously.

There are two separate wage and hour lawsuits pending against certain of our subsidiaries in California, each seeking class certification. The actions were coordinated to proceed in San Diego County. Both lawsuits make the same general allegations that the defendants failed to comply with certain California wage and hour laws, including allegedly failing to provide meal and rest periods, and failing to properly pay hourly and overtime wages. We deny the claims and intend to continue to vigorously defend these matters. Given the inherent uncertainties of litigation, the ultimate outcome cannot be predicted at this time, nor can possible damages, if any, be reasonably estimated. Similarly, a purported class action lawsuit was filed against WMI in August 2008 in federal court in Minnesota alleging that we violated the Fair Labor Standards Act. The court in the Minnesota lawsuit denied the plaintiffs’ motion for conditional class certification, after which 33 separate lawsuits were filed in 32 states in addition to Minnesota, all pursuing the same claims contained in the class action lawsuit, but on state-by-state bases. In December 2009, we reached a tentative settlement to resolve all 33 lawsuits.

From time to time, we also are named as defendants in personal injury and property damage lawsuits, including purported class actions, on the basis of having owned, operated or transported waste to a disposal facility that is alleged to have contaminated the environment or, in certain cases, on the basis of having conducted environmental remediation activities at sites. Some of the lawsuits may seek to have us pay the costs of monitoring of allegedly affected sites and health care examinations of allegedly affected persons for a substantial period of time even where no actual damage is proven. While we believe we have meritorious defenses to these lawsuits, the ultimate resolution is often substantially uncertain due to the difficulty of determining the cause, extent and impact of alleged contamination (which may have occurred over a long period of time), the potential for successive groups of complainants to emerge, the diversity of the individual plaintiffs’ circumstances, and the potential contribution or indemnification obligations of co-defendants or other third parties, among other factors.

As a large company with operations across the United States and Canada, we are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of our business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions filed against us include commercial, customer, and employment-related claims, including purported class action lawsuits related to our customer service agreements and purported class actions involving federal and state wage and hour and other laws. The plaintiffs in some actions seek unspecified damages or injunctive relief, or both. These actions are in various procedural stages, and some are covered in part by insurance. We currently do not believe that any such actions will ultimately have a material adverse impact on our consolidated financial statements.

WMI’s charter and bylaws require indemnification of its officers and directors if statutory standards of conduct have been met and allow the advancement of expenses to these individuals upon receipt of an undertaking by the individuals to repay all expenses if it is ultimately determined that they did not meet the required standards of conduct. Additionally, WMI has entered into separate indemnification agreements with each of the members of its Board of Directors as well as its Chief Executive Officer, its President and its Chief Financial Officer. The Company may incur substantial expenses in connection with the fulfillment of its advancement of costs and indemnification obligations in connection with current actions involving former officers of the Company or its subsidiaries, including the Harris lawsuit mentioned above, or other actions or proceedings that may be brought against its former or current officers, directors and employees.

On March 20, 2008, we filed a lawsuit in state district court in Harris County, Texas against SAP AG and SAP America, Inc., alleging fraud and breach of contract. The lawsuit relates to our 2005 software license from SAP for a waste and recycling revenue management system and agreement for SAP to implement the software on a fixed-fee basis. We have alleged (i) that SAP demonstrated and sold software that SAP represented was a mature, “out-of-the-box” software solution that met the specific business requirements of the Company; (ii) that SAP represented no production, modification or customization would be necessary; and (iii) that SAP represented the software would be fully implemented throughout the Company in 18 months. We are vigorously pursuing all claims available, including recovery of all payments we have made, costs we have incurred and the benefits we have not realized. SAP filed a general denial to the suit. Discovery is ongoing and trial is currently scheduled for May 2010.

During the first quarter of 2009, we determined to enhance and improve our existing revenue management system and not pursue alternatives associated with the development and implementation of a revenue management system that would include the licensed SAP software. Accordingly, after careful consideration of the failures and immaturity of the SAP software, we determined to abandon any alternative that includes the use of the SAP software. Our determination to abandon the SAP software resulted in non-cash impairment charges of $51 million. Refer to Note 13 for additional information related to the impairment charge.

Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that we reasonably believe could exceed $100,000. The following matter pending as of December 31, 2009 is disclosed in accordance with that requirement:

On April 4, 2006, the EPA issued a Finding and Notice of Violation (“FNOV”) to Waste Management of Hawaii, Inc., an indirect wholly-owned subsidiary of WMI, and to the City and County of Honolulu for alleged violations of the federal Clean Air Act, based on alleged failure to submit certain reports and design plans required by the EPA, and the failure to begin and timely complete the installation of a gas collection and control system for the Waimanalo Gulch Sanitary Landfill on Oahu. The FNOV did not propose a penalty amount and the parties have been in confidential settlement negotiations. Pursuant to an indemnity agreement, any penalty assessed will be paid by the Company, and not by the City and County of Honolulu.

Multi-Employer, Defined Benefit Pension Plans — Over 20% of our workforce is covered by collective bargaining agreements, which are with various union locals across the United States. As a result of some of these agreements, certain of our subsidiaries are participating employers in a number of trustee-managed multi-employer, defined benefit pension plans for the affected employees. One of the most significant multi-employer pension plans in which we participate is the Central States Southeast and Southwest Areas Pension Plan (“Central States Pension Plan”), which has reported that it adopted a rehabilitation plan as a result of its actuarial certification for the plan year beginning January 1, 2008. The Central States Pension Plan is in “critical status,” as defined by the Pension Protection Act of 2006.

In connection with our ongoing re-negotiation of various collective bargaining agreements, we may discuss and negotiate for the complete or partial withdrawal from one or more of these pension plans. In 2008, we recognized an aggregate charge of $39 million to “Operating” expenses for the withdrawal of certain bargaining units from multi-employer pension plans, including a $35 million charge resulting from our partial withdrawal from the Central States Pension Plan. In 2009, we recognized an additional charge of $9 million to “Operating” expenses for the withdrawal of certain bargaining units in the East from multi-employer pension plans. We do not believe that our withdrawals from the multi-employer plans, individually or in the aggregate, would have a material adverse effect on our financial condition or liquidity. However, withdrawals of other bargaining units in the future could have a material adverse effect on our results of operations for the period in which any such withdrawals may be recorded.

Tax Matters — During 2009, we effectively settled our 2008 federal tax audit and various state tax audits resulting in a tax benefit of $11 million. We are currently in the examination phase of an IRS audit for the 2009 tax year and expect this audit to be completed within the next 12 months. We participate in the IRS’s Compliance Assurance Program, which means we work with the IRS throughout the year in order to resolve any material issues prior to the filing of our year-end tax return. We are also currently undergoing audits by various state and local jurisdictions that date back to 1999 and examinations associated with Canada that date back to 1998. To provide for certain potential tax exposures, we maintain a liability for unrecognized tax benefits, the balance of which management believes is adequate. Results of audit assessments by taxing authorities are not currently expected to have a material adverse impact on our results of operations or cash flows.

Restructuring

12 Months Ended

Dec. 31, 2009

Restructuring [Abstract]

Restructuring


12.	Restructuring

2009 Restructuring — In January 2009, we took steps to further streamline our organization by (i) consolidating our Market Areas; (ii) integrating the management of our recycling operations with our other solid waste business; and (iii) realigning our Corporate organization with this new structure in order to provide support functions more efficiently.

Our principal operations are managed through our Groups, which are discussed in Note 21. Each of our four geographic Groups had been further divided into 45 Market Areas. As a result of our restructuring, the Market Areas were consolidated into 25 Areas. We found that our larger Market Areas generally were able to achieve efficiencies through economies of scale that were not present in our smaller Market Areas, and this reorganization has allowed us to lower costs and to continue to standardize processes and improve productivity. In addition, during the first quarter of 2009, responsibility for the oversight of day-to-day recycling operations at our material recovery facilities 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 comprehensive environmental solutions to our customers. In addition, as a result of this realignment, we have significantly reduced the overhead costs associated with managing this portion of our business and have increased the geographic Groups’ focus on maximizing the profitability and return on invested capital of our business on an integrated basis.

This restructuring eliminated over 1,500 employee positions throughout the Company. During 2009, we recognized $50 million of pre-tax charges associated with this restructuring, of which $41 million were related to employee severance and benefit costs. The remaining charges were primarily related to operating lease obligations for property that will no longer be utilized. The following table summarizes the charges recognized in 2009 for this restructuring by each of our reportable segments and our Corporate and Other organizations (in millions):


Eastern	$	12
Midwest		11
Southern		10
Western		6
Wheelabrator		1
Corporate and Other		10

Total	$	50

Through December 31, 2009, we had paid approximately $36 million of the employee severance and benefit costs incurred as a result of this restructuring. The length of time we are obligated to make severance payments varies, with the longest obligation continuing through the fourth quarter of 2010.

2008 Restructuring — The $2 million of restructuring expenses recognized during 2008 was related to a reorganization of customer service functions in our Western Group and the realignment of certain operations in our Southern Group.

2007 Restructuring — In 2007, we restructured certain operations and functions, resulting in the recognition of a charge of $10 million. Approximately $7 million of our restructuring costs was incurred by our Corporate organization, $2 million was incurred by our Midwest Group and $1 million was incurred by our Western Group. These charges included $8 million for employee severance and benefit costs and $2 million related to operating lease agreements.

(Income) Expense from Divestitures, Asset Impairments and Unusual Items

12 Months Ended

Dec. 31, 2009

(Income) Expense from Divestitures, Asset Impairments and Unusual Items [Abstract]

(Income) Expense from Divestitures, Asset Impairments and Unusual Items


13.	(Income) Expense from Divestitures, Asset Impairments and Unusual Items

The following table summarizes the major components of “(Income) expense from divestitures, asset impairments and unusual items” for the year ended December 31 for the respective periods (in millions):


	Years Ended December 31,
	2009		2008			2007

(Income) expense from divestitures (including held-for-sale impairments)	$	—	$	(33	)	$	(59	)
Asset impairments (excluding held-for-sale impairments)		83		4			12

	$	83	$	(29	)	$	(47	)

(Income) Expense from Divestitures (including held-for-sale impairments) — The net gains from divestitures during 2008 and 2007 were a result of our focus on selling underperforming businesses. In 2008, these gains were primarily related to the divestiture of underperforming collection operations in our Southern Group; and in 2007, the gains were related to the divestiture of underperforming collection, transfer and recycling operations in our Eastern, Western and Southern Groups.

Asset Impairments (excluding held-for-sale impairments) — Through December 31, 2008, we had capitalized $70 million of accumulated costs associated with the development of our waste and recycling revenue management system. A significant portion of these costs was specifically associated with the purchase of the license of SAP’s waste and recycling revenue management software and the efforts required to develop and configure that software for our use. After a failed pilot implementation of the software in one of our smallest Market Areas, the development efforts associated with the SAP revenue management system were suspended in 2007. As disclosed in Note 11, in March 2008, we filed suit against SAP and are currently scheduled for trial in May 2010.

During 2009, we determined to enhance and improve our existing revenue management system and not pursue alternatives associated with the development and implementation of a revenue management system that would include the licensed SAP software. Accordingly, after careful consideration of the failures of the SAP software, we determined to abandon any alternative that would include the use of the SAP software. The determination to abandon the SAP software as our revenue management system resulted in a non-cash charge of $51 million, $49 million of which was recognized during the first quarter of 2009 and $2 million of which was recognized during the fourth quarter of 2009.

We recognized an additional $32 million of impairment charges during 2009, $27 million of which was recognized by the West Group during the fourth quarter of 2009 to fully impair a landfill in California as a result of a change in our expectations for the future operations of the landfill. The remaining impairment charges were primarily attributable to a 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.

During 2008, we recognized a $4 million impairment charge, primarily as a result of a decision to close a landfill in our Southern Group. During 2007, we recognized $12 million in impairment charges related to two landfills in our Southern Group. The impairments were necessary as a result of the re-evaluation of our business alternatives for one landfill and the expiration of a contract that we had expected would be renewed that had significantly contributed to the volumes for the second landfill.

Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2009

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income


14.	Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income were as follows (in millions):


	December 31,
	2009			2008			2007

Accumulated unrealized loss on derivative instruments, net of taxes of $4 for 2009, $12 for 2008, and $13 for 2007	$	(8	)	$	(19	)	$	(20	)
Accumulated unrealized gain (loss) on marketable securities, net of taxes of $1 for 2009, $1 for 2008, and $3 for 2007		2			(2	)		5
Foreign currency translation adjustments		212			113			240
Funded status of post-retirement benefit obligations, net of taxes of $1 for 2009, $5 for 2008 and $0 for 2007		2			(4	)		4

	$	208		$	88		$	229

Capital Stock, Share Repurchases and Dividends

12 Months Ended

Dec. 31, 2009

Capital Stock, Share Repurchases and Dividends [Abstract]

Capital Stock, Share Repurchases and Dividends


15.	Capital Stock, Share Repurchases and Dividends

Capital Stock

As of December 31, 2009, we have 486.1 million shares of common stock issued and outstanding. We have 1.5 billion shares of authorized common stock with a par value of $0.01 per common share. The Board of Directors is authorized to issue preferred stock in series, and with respect to each series, to fix its designation, relative rights (including voting, dividend, conversion, sinking fund, and redemption rights), preferences (including dividends and liquidation) and limitations. We have ten million shares of authorized preferred stock, $0.01 par value, none of which is currently outstanding.

Share Repurchases

In 2007, the maximum amount of capital allocated to our share repurchases and dividend payments by our Board of Directors was $2.1 billion. In 2008, our Board of Directors approved a capital allocation program that included the authorization for up to $1.4 billion in combined cash dividends and common stock repurchases. Additionally, $184 million of the capital allocated to share repurchases in 2007 remained available for 2008 repurchases. In July 2008, we suspended our share repurchases in connection with a proposed acquisition. In the fourth quarter of 2008, we determined that, given the state of the economy and the financial markets, it would be prudent to suspend repurchases for the foreseeable future. As a result, share repurchases made during 2008 were significantly less than that which was authorized.

In June 2009, we decided that the improvement in the capital markets and the economic environment supported a decision to resume repurchases of our common stock during the second half of 2009.

The following is a summary of activity under our stock repurchase programs for each year presented:


	Years Ended December 31,
	2009	2008	2007

Shares repurchased (in thousands)	7,237	12,390	39,946
Per share purchase price	$28.06-$33.80	$28.98-$38.44	$33.00-$40.13
Total repurchases (in millions)	$226	$410	$1,421

In December 2009, we entered into a plan under SEC Rule 10b5-1 to effect market purchases of our common stock in 2010. These common stock repurchases were made in accordance with our Board approved capital allocation program. We repurchased $68 million of our common stock pursuant to the plan, which was completed on February 12, 2010.

Future share repurchases will be made within the limits approved by our Board of Directors at the discretion of management, and will depend on factors similar to those considered by the Board in making dividend declarations.

Dividends

Our quarterly dividends have been declared by our Board of Directors and paid in accordance with the capital allocation programs discussed above. Cash dividends declared and paid were $569 million in 2009, or $1.16 per common share; $531 million in 2008, or $1.08 per common share; and $495 million in 2007, or $0.96 per common share.

In December 2009, we announced that our Board of Directors expects to increase the per share quarterly dividend from $0.29 to $0.315 for dividends declared in 2010. However, all future dividend declarations are at the discretion of the Board of Directors, and depend on various factors, including our net earnings, financial condition, cash required for future business plans and other factors the Board may deem relevant.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2009

Stock-Based Compensation [Abstract]

Stock-Based Compensation


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 provides for two offering periods for purchases: January through June and July through December. At the end of each offering period, employees are able to purchase shares of our common stock at a price equal to 85% of the lesser of the market value of the stock on the first and last day of such offering period. The purchases are made through payroll deductions, and the number of shares that may be purchased is limited by IRS regulations. The total number of shares issued under the plan for the offering periods in each of 2009, 2008 and 2007 was approximately 969,000, 839,000 and 713,000, respectively. Including the impact of the January 2010 issuance of shares associated with the July to December 2009 offering period, approximately 2.5 million shares remain available for issuance under the plan.

Accounting for our Employee Stock Purchase Plan increased annual compensation expense by approximately $6 million, or $4 million net of tax, for both 2009 and 2008 and by approximately $5 million, or $3 million net of tax, for 2007.

Employee Stock Incentive Plans

Pursuant to our stock incentive plan, we have the ability to issue stock options, stock awards and stock appreciation rights, all on terms and conditions determined by the Management Development and Compensation Committee of our Board of Directors.

The Company’s 2004 Stock Incentive Plan, which authorized the issuance of up to 34 million shares of our common stock, terminated by its terms in May 2009, at which time stockholders approved our 2009 Stock Incentive Plan. Under the 2009 Plan, up to 26.2 million shares of our common stock are available for issuance. All of our stock-based compensation awards described herein have been made under either our 2004 or 2009 Plan. We currently utilize treasury shares to meet the needs of our equity-based compensation programs under the 2009 Plan and to settle outstanding awards granted pursuant to previous incentive plans.

During the three years ended December 31, 2009, the Company’s long-term incentive plan, or LTIP, has included an annual grant of restricted stock units and performance share units for key employees. Beginning in 2008, the annual LTIP grant made to the Company’s senior leadership team, which generally represents the Company’s executive officers, has been comprised solely of performance share units. During the reported periods, the Company has also granted restricted stock units to employees working on key initiatives; in connection with new hires and promotions; and to field-based managers.

Restricted Stock Units — A summary of our restricted stock units is presented in the table below (units in thousands):


	Years Ended December 31,
	2009					2008					2007
				Weighted					Weighted					Weighted
				Average					Average					Average
				Fair					Fair					Fair
	Units			Value		Units			Value		Units			Value

Unvested, Beginning of year		1,121		$	33.46		1,124		$	32.58		1,279		$	30.63
Granted		369		$	23.66		359		$	33.33		324		$	37.28
Vested(a)		(412	)	$	31.49		(338	)	$	30.41		(376	)	$	30.43
Forfeited		(48	)	$	32.81		(24	)	$	33.22		(103	)	$	30.94

Unvested, End of year		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.

Restricted stock units provide award recipients with dividend equivalents during the vesting period, but the units may not be voted or sold until time-based vesting restrictions have lapsed. Restricted stock units provide for three-year cliff vesting. Unvested units are subject to forfeiture in the event of voluntary or for-cause termination. Restricted stock units are subject to pro-rata vesting upon an employee’s retirement or involuntary termination other than for cause and become immediately vested in the event of an employee’s death or disability.

Compensation expense associated with restricted stock units is measured based on the grant-date fair value of our common stock and is recognized on a straight-line basis over the required employment period, which is generally the vesting period. Compensation expense is only recognized for those awards that we expect to vest, which we estimate based upon an assessment of current period and historical forfeitures.

Performance Share Units — Performance share units are payable in shares of common stock based on the achievement of certain financial measures, after the end of a three-year performance period. At the end of the three-year period, the number of shares awarded can range from 0% to 200% of the targeted amount. A summary of our performance share units is presented in the table below (units in thousands):


	Years Ended December 31,
	2009					2008					2007
				Weighted					Weighted					Weighted
				Average					Average					Average
				Fair					Fair					Fair
	Units			Value		Units			Value		Units			Value

Unvested, Beginning of year		2,644		$	34.10		2,134		$	32.72		1,391		$	29.52
Granted		1,159		$	22.66		1,169		$	32.92		907		$	37.28
Vested(a),(b)		(635	)	$	31.93		(615	)	$	27.05		(53	)	$	27.05
Forfeited		(86	)	$	33.59		(44	)	$	34.48		(111	)	$	32.86

Unvested, End of year		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 Company’s 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 Company’s 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.

Performance share units have no voting rights and dividend equivalents are paid out in cash based on actual performance at the end of the awards’ performance period. Performance share units are payable to an employee (or his beneficiary) upon death or disability as if that employee had remained employed until the end of the performance period, are subject to pro-rata vesting upon an employee’s retirement or involuntary termination other than for cause and are subject to forfeiture in the event of voluntary or for-cause termination.

Compensation expense associated with performance share units that continue to vest based on future performance is measured based on the grant-date fair value of our common stock. Compensation expense is recognized ratably over the performance period based on our estimated achievement of the established performance criteria. Compensation expense is only recognized for those awards that we expect to vest, which we estimate based upon an assessment of both the probability that the performance criteria will be achieved and current period and historical forfeitures.

For the years ended December 31, 2009, 2008 and 2007, we recognized $22 million, $42 million and $31 million, respectively, of compensation expense associated with restricted stock unit and performance share unit 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, 2009, 2008 and 2007 include related deferred income tax benefits of $9 million, $16 million and $12 million, respectively. We have not capitalized any equity-based compensation costs during the years ended December 31, 2009, 2008 and 2007.

Compensation expense recognized in 2009 was significantly less than expense recognized in prior years primarily due to the Company’s determination that it is no longer probable that the targets established for performance share units granted in 2008 will be met. Accordingly, during the second quarter of 2009, we recognized an adjustment to “Selling, general and administrative” expenses for the reversal of all previously recognized compensation expense associated with this award. As of December 31, 2009, we estimate that a total of approximately $30 million of currently unrecognized compensation expense will be recognized in future periods for unvested restricted stock unit and performance share unit awards issued and outstanding. Our estimated unrecognized compensation expense is also lower in 2009 than in prior years as a result of our determination that it is no longer probable that the targets for performance share units granted in 2008 will be achieved. Unrecognized compensation expense associated with all unvested awards currently outstanding is expected to be recognized over a weighted average period of approximately two years.

Stock Options — Prior to 2005, stock options were the primary form of equity-based compensation we granted to our employees.

A summary of our stock options is presented in the table below (shares in thousands):


	Years Ended December 31,
	2009					2008					2007
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price

Outstanding, Beginning of year		11,045		$	26.97		14,620		$	29.33		21,779		$	29.52
Granted(a)		1		$	27.90		6		$	35.27		17		$	38.47
Exercised(b)		(1,285	)	$	30.20		(1,506	)	$	24.95		(5,252	)	$	25.96
Forfeited or expired		(961	)	$	39.62		(2,075	)	$	45.09		(1,924	)	$	40.75

Outstanding, End of year(c)		8,800		$	25.98		11,045		$	26.97		14,620		$	29.33

Exercisable, End of year		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.

We received cash proceeds of $20 million, $37 million and $135 million during the years ended December 31, 2009, 2008 and 2007, respectively, from our employees’ stock option exercises. We also realized tax benefits from these stock option exercises during the years ended December 31, 2009, 2008 and 2007 of $5 million, $6 million and $24 million, respectively. These amounts have been presented as cash inflows in the “Cash flows from financing activities” section of our Consolidated Statements of Cash Flows.

Exercisable stock options at December 31, 2009, were as follows (shares in thousands):


			Weighted Average		Weighted Average
Range of Exercise Prices	Shares		Exercise Price		Remaining Years

$13.31-$20.00		1,525	$	19.21		2.87
$20.01-$30.00		7,006	$	27.18		2.91
$30.01-$39.93		267	$	33.18		2.77

$13.31-$39.93		8,798	$	25.98		2.90

Non-Employee Director Plans

Our non-employee directors currently receive annual grants of shares of our common stock, payable in two equal installments, under the same stock incentive plans we use for employees’ equity grants, described above. Prior to 2008, our directors received deferred stock units and were allowed to elect to defer a portion of their cash compensation in the form of deferred stock units, to be paid out in shares of our common stock at the termination of board service, pursuant to our 2003 Directors’ Deferred Compensation Plan. In late 2007, each member of the Board of Directors elected to receive payment of shares for his deferred stock units at the end of December 2008 and recognized taxable income on such payment. The Board of Directors terminated the 2003 Directors’ Plan in 2009 and, as a result, no shares remain available for issuance under that plan.

Earnings Per Share

12 Months Ended

Dec. 31, 2009

Earnings Per Share [Abstract]

Earnings Per Share


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,
	2009		2008		2007

Number of common shares outstanding at year-end		486.1		490.7		500.1
Effect of using weighted average common shares outstanding		5.1		1.4		17.2

Weighted average basic common shares outstanding		491.2		492.1		517.3
Dilutive effect of equity-based compensation awards, warrants and other contingently issuable shares		2.4		3.3		4.5

Weighted average diluted common shares outstanding		493.6		495.4		521.8

Potentially issuable shares		13.2		15.1		18.2
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding		0.3		0.8		2.4

Fair Value Measurements

12 Months Ended

Dec. 31, 2009

Fair Value Measurements [Abstract]

Fair Value Measurements


18.	Fair Value Measurements

Assets and Liabilities Accounted for at Fair Value

Authoritative guidance associated with fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

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. As of December 31, 2009, our assets and liabilities that are measured at fair value on a recurring basis include the following (in millions):


			Fair Value Measurements Using
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)

Assets:
Cash equivalents	$	1,096	$	1,096	$	—	$	—
Available-for-sale securities		308		308		—		—
Interest rate derivatives		45		—		45		—

Total assets	$	1,449	$	1,404	$	45	$	—

Liabilities:
Foreign currency derivatives	$	18	$	—	$	18	$	—

Total liabilities	$	18	$	—	$	18	$	—

Cash and Cash Equivalents

Cash equivalents are reflected at fair value in our Consolidated Financial Statements based upon quoted market prices and consist primarily of money market funds that invest in United States government obligations with original maturities of three months or less.

Available-for-Sale Securities

Available for-sale securities are recorded at fair value based on quoted market prices. These assets include restricted trusts and escrow accounts invested in money market mutual funds, equity-based mutual funds and other equity securities. The cost basis of restricted trusts and escrow accounts invested in equity-based mutual funds and other equity securities was $77 million as of December 31, 2009 and 2008. Unrealized holding gains and losses on these instruments are recorded as either an increase or decrease to the asset balance and deferred as a component of “Accumulated other comprehensive income” in the equity section of our Consolidated Balance Sheets. The net unrealized holding gains on these instruments, net of taxes, were $2 million as of December 31, 2009 and the net unrealized holding losses on these instruments, net of taxes, were $2 million as of December 31, 2008. The fair value of our remaining available-for-sale securities approximates our cost basis in the investments.

Interest Rate Derivatives

As of December 31, 2009, we are party to (i) fixed-to-floating interest rate swaps that are designated as fair value hedges of our currently outstanding senior notes; (ii) forward-starting interest rate swaps that are designated as cash flow hedges of anticipated interest payments for future fixed-rate debt issuances; and (iii) Treasury rate locks that are designated as cash flow hedges of anticipated interest payments of a future fixed-rate debt issuance. Our fixed-to-floating interest rate swaps and forward-starting interest rate swaps are LIBOR based instruments. Accordingly, these derivatives are valued using a third-party pricing model that incorporates information about LIBOR yield curves for each instrument’s respective term. Our Treasury rate locks are valued using a third-party pricing model that incorporates information about the on-the-run 10-year U.S. Treasury yield curve. The third-party pricing model used to value our interest rate derivatives also incorporates Company and counterparty credit valuation adjustments, as appropriate. Counterparties to our interest rate derivatives are financial institutions who participate in our $2.4 billion revolving credit facility. Valuations of our interest rate derivatives may fluctuate significantly from period-to-period due to volatility in underlying interest rates, which are driven by market conditions and the scheduled maturities of the derivatives. Refer to Note 8 for additional information regarding our interest rate derivatives.

Foreign Currency Derivatives

Our foreign currency derivatives are valued using forward Canadian dollar exchange prices at the reporting date. Counterparties to these contracts are financial institutions who participate in our $2.4 billion revolving credit facility. Valuations may fluctuate significantly from period-to-period due to volatility in the Canadian dollar to U.S. dollar exchange rate. Due to the short-term maturities of the Company’s foreign currency exchange derivatives, counterparty credit risk is not significant. Refer to Note 8 for additional information regarding our foreign currency derivatives.

Fair Value of Debt

At December 31, 2009, the carrying value of our debt was approximately $8.9 billion compared with $8.3 billion at December 31, 2008. The carrying value of our debt includes adjustments for both the unamortized fair value adjustments related to terminated hedge arrangements and fair value adjustments of debt instruments that are currently hedged.

The estimated fair value of our debt was approximately $9.3 billion at December 31, 2009 and approximately $7.7 billion at December 31, 2008. The estimated fair value of our senior notes is based on quoted market prices. The carrying value of remarketable debt approximates fair value due to the short-term nature of the attached interest rates. The fair value of our other debt is estimated using discounted cash flow analysis, based on rates we would currently pay for similar types of instruments. The increase in the fair value of our debt when comparing December 31, 2009 with December 31, 2008 is primarily related to (i) an increase in outstanding debt balances; (ii) an increase in market prices for corporate debt securities due to a significant improvement in the condition of the credit markets as compared with late 2008, which caused a substantial increase in the fair value of our publicly-traded senior notes; and (iii) a significant decrease in current market rates on fixed-rate tax-exempt bonds.

Although we have determined the estimated fair value amounts using available market information and commonly accepted valuation methodologies, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates are not necessarily indicative of the amounts that we, or holders of the instruments, could realize in a current market exchange. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The fair value estimates are based on information available as of December 31, 2009 and December 31, 2008. These amounts have not been revalued since those dates, and current estimates of fair value could differ significantly from the amounts presented.

Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2009

Acquisitions and Divestitures [Abstract]

Acquisitions and Divestitures


19.	Acquisitions and Divestitures

Acquisitions

We continue to pursue the acquisition of businesses that are accretive to our solid waste operations and enhance and expand our existing service offerings. We have seen the greatest opportunities for realizing superior returns from tuck-in acquisitions, which are primarily the purchases of collection operations that enhance our existing route structures and are strategically located near our existing disposal operations.

In 2009, we acquired businesses primarily related to our collection operations. Total consideration, net of cash acquired, for acquisitions was $336 million, which included $266 million in cash payments, a liability for additional cash payments with an estimated fair value of $46 million, and assumed liabilities of $24 million. The additional cash payments are contingent upon achievement by the acquired businesses of certain negotiated goals, which generally included targeted revenues. At the date of acquisition, our estimated obligations for the contingent cash payments were between $42 million and $56 million. As of December 31, 2009, we had paid $15 million of this contingent consideration.

The allocation of purchase price was primarily to “Property and equipment,” which had an estimated fair value of $102 million; “Other intangible assets,” which had an estimated fair value of $105 million; and “Goodwill” of $125 million. Goodwill is a result of expected synergies from combining the acquired businesses with our existing operations and is tax deductible.

Our 2009 acquisitions included the purchase of the remaining equity interest in one of our portable self-storage investments, increasing our equity interest in this entity from 50% to 100%. As a result of this acquisition, we recognized a $4 million loss for the remeasurement of the fair value of our initial equity investment, which was determined to be $5 million. This loss was recognized as a component of “(Income) expense from divestitures, asset impairments and unusual items” in our Statement of Operations.

In 2008 and 2007, we completed several acquisitions for a cost, net of cash acquired, of $280 million and $90 million, respectively.

Divestitures

The aggregate sales price for divestitures of operations was $1 million in 2009, $59 million in 2008, and $224 million in 2007. The proceeds from these sales were comprised substantially of cash. We recognized net gains on these divestitures of $33 million in 2008, and $59 million in 2007. The impact to our 2009 income from operations of gains and losses on divestitures was less than $1 million. These divestitures were made as part of our initiative to improve or divest certain underperforming and non-strategic operations.

Variable Interest Entities

12 Months Ended

Dec. 31, 2009

Variable Interest Entities [Abstract]

Variable Interest Entities


20.	Variable Interest Entities

Following is a description of our financial interests in variable interest entities that we consider significant, including (i) those for which we have determined that we are the primary beneficiary of the entity and, therefore, have consolidated the entity into our financial statements; and (ii) those that represent a significant interest in an unconsolidated entity. As disclosed in Note 24, we are in the process of assessing revised guidance from the FASB related to variable interest entities that is effective for the Company January 1, 2010.

Consolidated Variable Interest Entities

Waste-to-Energy LLCs — On June 30, 2000, two limited liability companies were established to purchase interests in existing leveraged lease financings at three waste-to-energy facilities that we lease, operate and maintain. We own a 0.5% interest in one of the LLCs (“LLC I”) and a 0.25% interest in the second LLC (“LLC II”). John Hancock Life Insurance Company owns 99.5% of LLC I and 99.75% of LLC II is owned by LLC I and the CIT Group. In 2000, Hancock and CIT made an initial investment of $167 million in the LLCs, which was used to purchase the three waste-to-energy facilities and assume the seller’s indebtedness. Under the LLC agreements, the LLCs shall be dissolved upon the occurrence of any of the following events: (i) a written decision of all members of the LLCs; (ii) December 31, 2063; (iii) a court’s dissolution of the LLCs; or (iv) the LLCs ceasing to own any interest in the waste-to-energy facilities.

Income, losses and cash flows of the LLCs are allocated to the members based on their initial capital account balances until Hancock and CIT achieve targeted returns; thereafter, we will receive 80% of the earnings of each of the LLCs and Hancock and CIT will be allocated the remaining 20% based on their respective equity interests. All capital allocations made through December 31, 2009 have been based on initial capital account balances as the target returns have not yet been achieved.

Our obligations associated with our interests in the LLCs are primarily related to the lease of the facilities. In addition to our minimum lease payment obligations, we are required to make cash payments to the LLCs for differences between fair market rents and our minimum lease payments. These payments are subject to adjustment based on factors that include the fair market value of rents for the facilities and lease payments made through the re-measurement dates. In addition, we may be required under certain circumstances to make capital contributions to the LLCs based on differences between the fair market value of the facilities and defined termination values as provided for by the underlying lease agreements, although we believe the likelihood of the occurrence of these circumstances is remote.

We determined that we are the primary beneficiary of the LLCs because our interest in the entities is subject to variability based on changes in the fair market value of the leased facilities, while Hancock’s and CIT’s interests are structured to provide targeted returns based on their respective initial investments. As of December 31, 2009, our Consolidated Balance Sheet includes $331 million of net property and equipment associated with the LLCs’ waste-to-energy facilities and $234 million in noncontrolling interests associated with Hancock’s and CIT’s interests in the LLCs. During the years ended December 31, 2009, 2008 and 2007, we recognized noncontrolling interest expense of $50 million, $41 million and $35 million, respectively, for Hancock’s and CIT’s interests in the LLCs’ earnings, which are largely eliminated in WMI’s consolidation.

Trusts for Closure, Post-Closure or Environmental Remediation Obligations — We have determined that we are the primary beneficiary of trust funds that were created to settle certain of our closure, post-closure or environmental remediation obligations. Although we are not always the sole beneficiary of these trust funds, we have determined that we are the primary beneficiary because we retain a majority of the risks and rewards associated with changes in the fair value of the assets held in trust. As the trust funds are expected to continue to meet the statutory requirements for which they were established, we do not believe that there is any material exposure to loss associated with the trusts. The consolidation of these variable interest entities has not materially affected our financial position or results of operations.

Significant Unconsolidated Variable Interest Entities

Investments in Coal-Based Synthetic Fuel Production Facilities — As discussed in Note 9, through December 31, 2007, we owned an interest in two coal-based synthetic fuel production facilities. Along with the other equity investors, we supported the operations of the entities in exchange for a pro-rata share of the tax credits generated by the facilities. Our obligation to support the facilities’ operations was, therefore, limited to the tax benefit we received. We were not the primary beneficiary of either of these entities. As such, we accounted for these investments under the equity method of accounting and did not consolidate the facilities.

Segment and Related Information

12 Months Ended

Dec. 31, 2009

Segment and Related Information


21.	Segment and Related Information

We currently manage and evaluate our operations primarily through our Eastern, Midwest, Southern, Western and Wheelabrator Groups. These five Groups are presented below as our reportable segments. Our segments provide integrated waste management services consisting of collection, disposal (solid waste and hazardous waste landfills), transfer, waste-to-energy facilities and independent power production plants that are managed by Wheelabrator, recycling services and other services to commercial, industrial, municipal and residential customers throughout the United States and in Puerto Rico and Canada. The operations not managed through our five Groups are presented herein as “Other.”

As a result of the transfer of responsibility for the oversight of day-to-day recycling operations at our material recovery facilities and secondary processing facilities to the management teams of our geographic Groups, we also changed the way we review the financial results of our geographic Groups. Beginning in 2009, the financial results of our material recovery facilities and secondary processing facilities are included as a component of their respective geographic Group and the financial results of our recycling brokerage business and electronics recycling services are included as part of our “Other” operations. We have reflected the impact of these changes for all periods presented to provide financial information that consistently reflects our current approach to managing our geographic Group operations.

Summarized financial information concerning our reportable segments for the respective years ended December 31 is shown in the following table (in millions):


								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)

2009
Eastern	$	2,960	$	(533	)	$	2,427	$	483		$	276	$	216		$	4,326
Midwest		2,855		(426	)		2,429		450			261		218			4,899
Southern		3,328		(431	)		2,897		768			274		242			3,250
Western		3,125		(412	)		2,713		521			226		195			3,667
Wheelabrator		841		(123	)		718		235			57		11			2,266
Other(a)		628		(21	)		607		(136	)		29		128			1,112

		13,737		(1,946	)		11,791		2,321			1,123		1,010			19,520
Corporate and Other(b)		—		—			—		(434	)		43		66			2,281

Total	$	13,737	$	(1,946	)	$	11,791	$	1,887		$	1,166	$	1,076		$	21,801

2008
Eastern	$	3,319	$	(599	)	$	2,720	$	523		$	284	$	318		$	4,372
Midwest		3,267		(475	)		2,792		475			287		296			4,626
Southern		3,740		(493	)		3,247		872			294		303			3,218
Western		3,387		(428	)		2,959		612			238		295			3,686
Wheelabrator		912		(92	)		820		323			56		24			2,359
Other(a)		897		(47	)		850		(60	)		32		81			873

		15,522		(2,134	)		13,388		2,745			1,191		1,317			19,134
Corporate and Other(b)		—		—			—		(511	)		47		45			1,676

Total	$	15,522	$	(2,134	)	$	13,388	$	2,234		$	1,238	$	1,362		$	20,810

2007
Eastern	$	3,411	$	(633	)	$	2,778	$	550		$	296	$	260		$	4,358
Midwest		3,289		(500	)		2,789		524			306		297			4,876
Southern		3,737		(542	)		3,195		826			300		273			3,139
Western		3,444		(440	)		3,004		618			233		224			3,591
Wheelabrator		868		(71	)		797		292			57		26			2,399
Other(a)		832		(85	)		747		(38	)		13		66			997

		15,581		(2,271	)		13,310		2,772			1,205		1,146			19,360
Corporate and Other(b)		—		—			—		(518	)		54		(2	)		1,472

Total	$	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 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 segment’s 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 Company’s current focus on the expansion of our waste-to-energy business both internationally and domestically has increased Wheelabrator’s 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.


(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

Total assets, as reported above	$	21,801		$	20,810		$	20,832
Elimination of intercompany investments and advances		(647	)		(583	)		(657	)

Total assets, per Consolidated Balance Sheets	$	21,154		$	20,227		$	20,175


(i)		Goodwill is included within each Group’s 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

Balance, December 31, 2007	$	1,489		$	1,334		$	594		$	1,167		$	788	$	34	$	5,406
Acquired goodwill		4			20			54			53			—		1		132
Divested goodwill, net of assets held-for-sale		(3	)		(2	)		(4	)		—			—		—		(9	)
Translation and other adjustments		(2	)		(52	)		(1	)		(12	)		—		—		(67	)

Balance, December 31, 2008		1,488			1,300			643			1,208			788		35		5,462
Acquired goodwill		10			45			36			7			—		27		125
Divested goodwill, net of assets held-for-sale		2			—			—			—			—		—		2
Translation adjustments		—			37			—			6			—		—		43

Balance, December 31, 2009	$	1,500		$	1,382		$	679		$	1,221		$	788	$	62	$	5,632

The table below shows the total revenues by principal line of business (in millions):


	Years Ended December 31,
	2009			2008			2007

Collection	$	7,980		$	8,679		$	8,714
Landfill		2,547			2,955			3,047
Transfer		1,383			1,589			1,654
Wheelabrator		841			912			868
Recycling		741			1,180			1,135
Other(a)		245			207			163
Intercompany(b)		(1,946	)		(2,134	)		(2,271	)

Operating revenues	$	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.

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,
	2009		2008		2007

United States and Puerto Rico	$	11,137	$	12,621	$	12,566
Canada		654		767		744

Total	$	11,791	$	13,388	$	13,310

Property and equipment (net) relating to operations in the United States and Puerto Rico, as well as Canada are as follows (in millions):


	December 31,
	2009		2008		2007

United States and Puerto Rico	$	10,251	$	10,355	$	10,122
Canada		1,290		1,047		1,229

Total	$	11,541	$	11,402	$	11,351

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2009

Quarterly Financial Data (Unaudited) [Abstract]

Quarterly Financial Data (Unaudited)


22.	Quarterly Financial Data (Unaudited)

The following table summarizes the unaudited quarterly results of operations for 2009 and 2008 (in millions, except per share amounts):


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter

2009
Operating revenues	$	2,810	$	2,952	$	3,023	$	3,006
Income from operations		372		534		525		456
Consolidated net income		170		267		292		331
Net income attributable to Waste Management, Inc.		155		247		277		315
Basic earnings per common share		0.31		0.50		0.56		0.65
Diluted earnings per common share		0.31		0.50		0.56		0.64
2008
Operating revenues	$	3,266	$	3,489	$	3,525	$	3,108
Income from operations		511		632		632		459
Consolidated net income		248		331		323		226
Net income attributable to Waste Management, Inc.		241		318		310		218
Basic earnings per common share		0.49		0.65		0.63		0.44
Diluted earnings per common share		0.48		0.64		0.63		0.44

Basic and diluted earnings per common share for each of the quarters presented above is based on the respective weighted average number of common and dilutive potential common shares outstanding for each quarter and the sum of the quarters may not necessarily be equal to the full year basic and diluted earnings per common share amounts.

From time to time, our operating results are significantly affected by unusual or infrequent transactions or events. The following significant and unusual items have affected the comparison of our operating results during the periods presented:

First Quarter 2009


	•	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 quarter’s “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.

Second Quarter 2009


	•	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 quarter’s “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 quarter’s “Net income attributable to Waste Management, Inc.” by $10 million, or $0.02 per diluted share.

Third Quarter 2009


	•	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.

Fourth Quarter 2009


	•	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 the timing and cost of future final capping, closure and post-closure of fully utilized airspace. These items increased the quarter’s “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 quarter’s “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 quarter’s “Diluted earnings per common share” by $0.22.

First Quarter 2008


	•	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.

Second Quarter 2008


	•	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.

Third Quarter 2008


	•	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.

Fourth Quarter 2008


	•	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 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.

Condensed Consolidating Financial Statements

12 Months Ended

Dec. 31, 2009

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements


23.	Condensed Consolidating Financial Statements

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

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2009


			WM		Non-Guarantor
	WMI		Holdings		Subsidiaries		Eliminations			Consolidated

ASSETS
Current assets:
Cash and cash equivalents	$	1,093	$	—	$	47	$	—		$	1,140
Other current assets		24		1		1,845		—			1,870

		1,117		1		1,892		—			3,010
Property and equipment, net		—		—		11,541		—			11,541
Investments in and advances to affiliates		10,174		12,770		2,303		(25,247	)		—
Other assets		62		17		6,524		—			6,603

Total assets	$	11,353	$	12,788	$	22,260	$	(25,247	)	$	21,154


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	580	$	35	$	134	$	—		$	749
Accounts payable and other current liabilities		90		17		2,045		—			2,152

		670		52		2,179		—			2,901
Long-term debt, less current portion		4,398		601		3,125		—			8,124
Other liabilities		—		—		3,538		—			3,538

Total liabilities		5,068		653		8,842		—			14,563
Equity:
Stockholders’ equity		6,285		12,135		13,112		(25,247	)		6,285
Noncontrolling interests		—		—		306		—			306

		6,285		12,135		13,418		(25,247	)		6,591

Total liabilities and equity	$	11,353	$	12,788	$	22,260	$	(25,247	)	$	21,154

December 31, 2008


			WM		Non-Guarantor
	WMI		Holdings		Subsidiaries		Eliminations			Consolidated

ASSETS
Current assets:
Cash and cash equivalents	$	450	$	—	$	30	$	—		$	480
Other current assets		6		—		1,849		—			1,855

		456		—		1,879		—			2,335
Property and equipment, net		—		—		11,402		—			11,402
Investments in and advances to affiliates		9,851		11,615		1,334		(22,800	)		—
Other assets		109		18		6,363		—			6,490

Total assets	$	10,416	$	11,633	$	20,978	$	(22,800	)	$	20,227


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	507	$	—	$	328	$	—		$	835
Accounts payable and other current liabilities		76		17		2,108		—			2,201

		583		17		2,436		—			3,036
Long-term debt, less current portion		3,931		638		2,922		—			7,491
Other liabilities		—		—		3,515		—			3,515

Total liabilities		4,514		655		8,873		—			14,042
Equity:
Stockholders’ equity		5,902		10,978		11,822		(22,800	)		5,902
Noncontrolling interests		—		—		283		—			283

		5,902		10,978		12,105		(22,800	)		6,185

Total liabilities and equity	$	10,416	$	11,633	$	20,978	$	(22,800	)	$	20,227

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS


				WM			Non-Guarantor
	WMI			Holdings			Subsidiaries			Eliminations			Consolidated

Year Ended December 31, 2009
Operating revenues	$	—		$	—		$	11,791		$	—		$	11,791
Costs and expenses		—			—			9,904			—			9,904

Income from operations		—			—			1,887			—			1,887

Other income (expense):
Interest income (expense)		(268	)		(41	)		(104	)		—			(413	)
Equity in subsidiaries, net of taxes		1,157			1,182			—			(2,339	)		—
Equity in net losses of unconsolidated entities and other, net		—			—			(1	)		—			(1	)

		889			1,141			(105	)		(2,339	)		(414	)

Income before income taxes		889			1,141			1,782			(2,339	)		1,473
Provision for (benefit from) income taxes		(105	)		(16	)		534			—			413

Consolidated net income		994			1,157			1,248			(2,339	)		1,060
Less: Net income attributable to noncontrolling interests		—			—			66			—			66

Net income attributable to Waste Management, Inc.	$	994		$	1,157		$	1,182		$	(2,339	)	$	994

Year Ended December 31, 2008
Operating revenues	$	—		$	—		$	13,388		$	—		$	13,388
Costs and expenses		—			—			11,154			—			11,154

Income from operations		—			—			2,234			—			2,234

Other income (expense):
Interest income (expense)		(274	)		(40	)		(122	)		—			(436	)
Equity in subsidiaries, net of taxes		1,254			1,278			—			(2,532	)		—
Equity in net losses of unconsolidated entities and other, net		—			—			(1	)		—			(1	)

		980			1,238			(123	)		(2,532	)		(437	)

Income before income taxes		980			1,238			2,111			(2,532	)		1,797
Provision for (benefit from) income taxes		(107	)		(16	)		792			—			669

Consolidated net income		1,087			1,254			1,319			(2,532	)		1,128
Less: Net income attributable to noncontrolling interests		—			—			41			—			41

Net income attributable to Waste Management, Inc.	$	1,087		$	1,254		$	1,278		$	(2,532	)	$	1,087

Year Ended December 31, 2007
Operating revenues	$	—		$	—		$	13,310		$	—		$	13,310
Costs and expenses		—			—			11,056			—			11,056

Income from operations		—			—			2,254			—			2,254

Other income (expense):
Interest income (expense)		(291	)		(66	)		(117	)		—			(474	)
Equity in subsidiaries, net of taxes		1,347			1,389			—			(2,736	)		—
Equity in net losses of unconsolidated entities and other, net		—			—			(31	)		—			(31	)

		1,056			1,323			(148	)		(2,736	)		(505	)

Income before income taxes		1,056			1,323			2,106			(2,736	)		1,749
Provision for (benefit from) income taxes		(107	)		(24	)		671			—			540

Consolidated net income		1,163			1,347			1,435			(2,736	)		1,209
Less: Net income attributable to noncontrolling interests		—			—			46			—			46

Net income attributable to Waste Management, Inc.	$	1,163		$	1,347		$	1,389		$	(2,736	)	$	1,163

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


				WM			Non-Guarantor
	WMI			Holdings			Subsidiaries			Eliminations			Consolidated

Year Ended December 31, 2009
Cash flows from operating activities:
Consolidated net income	$	994		$	1,157		$	1,248		$	(2,339	)	$	1,060
Equity in earnings of subsidiaries, net of taxes		(1,157	)		(1,182	)		—			2,339			—
Other adjustments		26			(3	)		1,279			—			1,302

Net cash provided by (used in) operating activities		(137	)		(28	)		2,527			—			2,362

Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired		—			—			(281	)		—			(281	)
Capital expenditures		—			—			(1,179	)		—			(1,179	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			28			—			28
Net receipts from restricted trust and escrow accounts and other, net		—			—			182			—			182

Net cash used in investing activities		—			—			(1,250	)		—			(1,250	)

Cash flows from financing activities:
New borrowings		1,385			—			364			—			1,749
Debt repayments		(810	)		—			(525	)		—			(1,335	)
Common stock repurchases		(226	)		—			—			—			(226	)
Cash dividends		(569	)		—			—			—			(569	)
Exercise of common stock options		20			—			—			—			20
Distributions paid to noncontrolling interests and other		3			—			(99	)		—			(96	)
(Increase) decrease in intercompany and investments, net		977			28			(1,005	)		—			—

Net cash provided by (used in) financing activities		780			28			(1,265	)		—			(457	)

Effect of exchange rate changes on cash and cash equivalents		—			—			5			—			5

Increase in cash and cash equivalents		643			—			17			—			660
Cash and cash equivalents at beginning of period		450			—			30			—			480

Cash and cash equivalents at end of period	$	1,093		$	—		$	47		$	—		$	1,140

Year Ended December 31, 2008
Cash flows from operating activities:
Consolidated net income	$	1,087		$	1,254		$	1,319		$	(2,532	)	$	1,128
Equity in earnings of subsidiaries, net of taxes		(1,254	)		(1,278	)		—			2,532			—
Other adjustments		(22	)		(16	)		1,485			—			1,447

Net cash provided by (used in) operating activities		(189	)		(40	)		2,804			—			2,575

Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		—			—			(280	)		—			(280	)
Capital expenditures		—			—			(1,221	)		—			(1,221	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			112			—			112
Net receipts from restricted trust and escrow accounts and other, net		(2	)		—			208			—			206

Net cash used in investing activities		(2	)		—			(1,181	)		—			(1,183	)

Cash flows from financing activities:
New borrowings		944			—			581			—			1,525
Debt repayments		(760	)		(244	)		(781	)		—			(1,785	)
Common stock repurchases		(410	)		—			—			—			(410	)
Cash dividends		(531	)		—			—			—			(531	)
Exercise of common stock options		37			—			—			—			37
Distributions paid to noncontrolling interests and other		7			—			(99	)		—			(92	)
(Increase) decrease in intercompany and investments, net		938			284			(1,290	)		68			—

Net cash provided by (used in) financing activities		225			40			(1,589	)		68			(1,256	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(4	)		—			(4	)

Increase in cash and cash equivalents		34			—			30			68			132
Cash and cash equivalents at beginning of period		416			—			—			(68	)		348

Cash and cash equivalents at end of period	$	450		$	—		$	30		$	—		$	480

Year Ended December 31, 2007
Cash flows from operating activities:
Consolidated net income	$	1,163		$	1,347		$	1,435		$	(2,736	)	$	1,209
Equity in earnings of subsidiaries, net of taxes		(1,347	)		(1,389	)		—			2,736			—
Other adjustments		(53	)		(3	)		1,286			—			1,230

Net cash provided by (used in) operating activities		(237	)		(45	)		2,721			—			2,439

Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		—			—			(90	)		—			(90	)
Capital expenditures		—			—			(1,211	)		—			(1,211	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets		—			—			278			—			278
Purchases of short-term investments		(1,220	)		—			—			—			(1,220	)
Proceeds from sales of short-term investments		1,404			—			—			—			1,404
Net receipts from restricted trust and escrow accounts and other, net		—			(4	)		82			—			78

Net cash provided by (used in) investing activities		184			(4	)		(941	)		—			(761	)

Cash flows from financing activities:
New borrowings		300			—			644			—			944
Debt repayments		(352	)		—			(848	)		—			(1,200	)
Common stock repurchases		(1,421	)		—			—			—			(1,421	)
Cash dividends		(495	)		—			—			—			(495	)
Exercise of common stock options		142			—			—			—			142
Distributions paid to noncontrolling interests and other		26			—			58			—			84
(Increase) decrease in intercompany and investments, net		1,594			49			(1,636	)		(7	)		—

Net cash provided by (used in) financing activities		(206	)		49			(1,782	)		(7	)		(1,946	)

Effect of exchange rate changes on cash and cash equivalents		—			—			2			—			2

Decrease in cash and cash equivalents		(259	)		—			—			(7	)		(266	)
Cash and cash equivalents at beginning of period		675			—			—			(61	)		614

Cash and cash equivalents at end of period	$	416		$	—		$	—		$	(68	)	$	348

New Accounting Pronouncements (Unaudited)

12 Months Ended

Dec. 31, 2009

New Accounting Pronouncements (Unaudited) [Abstract]

Description of new accounting pronouncements not yet adopted


24.	New Accounting Pronouncements (Unaudited)

Consolidation of Variable Interest Entities — In June 2009, the FASB issued revised authoritative guidance associated with the consolidation of variable interest entities. This revised guidance replaces the current quantitative-based assessment for determining which enterprise has a controlling interest in a variable interest entity with an approach that is now primarily qualitative. This qualitative approach focuses on identifying the enterprise that has (i) the power to direct the activities of the variable interest entity that can most significantly impact the entity’s performance; and (ii) the obligation to absorb losses and the right to receive benefits from the entity that could potentially be significant to the variable interest entity. This revised guidance also requires an ongoing assessment of whether an enterprise is the primary beneficiary of a variable interest entity rather than a reassessment only upon the occurrence of specific events. The new FASB-issued authoritative guidance associated with the consolidation of variable interest entities is effective for the Company January 1, 2010. The change in accounting may either be applied by recognizing a cumulative-effect adjustment to retained earnings on the date of adoption or by retrospectively restating one or more years and recognizing a cumulative-effect adjustment to retained earnings as of the beginning of the earliest year restated. We are currently in the process of assessing the provisions of this revised guidance and have not determined whether the adoption will have a material impact on our consolidated financial statements.

Multiple-Deliverable Revenue Arrangements — In September 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 may be treated as separate units of accounting and modifies the manner in which transaction consideration is allocated across the separately identifiable deliverables. The amendments to authoritative guidance associated with multiple-deliverable revenue arrangements are effective for the Company January 1, 2011, although the FASB does permit early adoption of the guidance provided that it is retroactively applied to the beginning of the year of adoption. The new accounting standard may be applied either retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the date of adoption. We are in the process of assessing the provisions of this new guidance and currently do not expect that the adoption will have a material impact on our consolidated financial statements. However, our adoption of this guidance may significantly impact our accounting and reporting for future revenue arrangements to the extent they are material.

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2009

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

WASTE MANAGEMENT, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(In Millions)


					Accounts
	Balance		Charged		Written						Balance
	Beginning of		(Credited) to		Off/Use of						End of
	Year		Income		Reserve			Other(a)			Year

2007 — Reserves for doubtful accounts(b)	$	51	$	43	$	(44	)	$	(3	)	$	47
2008 — Reserves for doubtful accounts(b)	$	47	$	50	$	(56	)	$	(2	)	$	39
2009 — Reserves for doubtful accounts(b)	$	39	$	48	$	(57	)	$	2		$	32
2007 — Merger and restructuring accruals(c)	$	1	$	10	$	(7	)	$	—		$	4
2008 — Merger and restructuring accruals(c)	$	4	$	2	$	(4	)	$	—		$	2
2009 — Merger and restructuring accruals(c)	$	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.