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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-7327
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WMX TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
DELAWARE 36-2660763
<S> <C>
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
3003 BUTTERFIELD ROAD, OAK BROOK, ILLINOIS 60521
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (708) 572-8800
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
<S> <C> <C>
COMMON STOCK, $1.00 PAR NEW YORK STOCK EXCHANGE ZURICH STOCK EXCHANGE
VALUE CHICAGO STOCK EXCHANGE GENEVA STOCK EXCHANGE
LONDON STOCK EXCHANGE BASLE STOCK EXCHANGE
FRANKFURT STOCK EXCHANGE
</TABLE>
<TABLE>
<S> <C>
LIQUID YIELD OPTION NOTES DUE 2001 NEW YORK STOCK EXCHANGE
8 3/4% DEBENTURES DUE 2018 NEW YORK STOCK EXCHANGE
LIQUID YIELD OPTION NOTES DUE 2012 NEW YORK STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE REGISTRANT HELD BY
STOCKHOLDERS WHO WERE NOT AFFILIATES (AS DEFINED BY REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION) OF THE REGISTRANT WAS APPROXIMATELY
$14,108,866,000 AT FEBRUARY 1, 1994 (BASED ON THE CLOSING SALE PRICE ON THE NEW
YORK STOCK EXCHANGE COMPOSITE TAPE ON JANUARY 31, 1994, AS REPORTED BY THE WALL
STREET JOURNAL (MIDWEST EDITION)). AT MARCH 23, 1994, THE REGISTRANT HAD ISSUED
AND OUTSTANDING AN AGGREGATE OF 483,615,700 SHARES OF ITS COMMON STOCK OF
RECORD.
DOCUMENTS INCORPORATED BY REFERENCE
THOSE SECTIONS OR PORTIONS OF THE REGISTRANT'S 1993 ANNUAL REPORT TO
STOCKHOLDERS AND OF THE REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 13, 1994 DESCRIBED IN PARTS II, III AND IV
HEREOF ARE INCORPORATED BY REFERENCE IN THIS REPORT.
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<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
WMX Technologies, Inc. (formerly named Waste Management, Inc.) is a leading
international provider of environmental, engineering and construction,
industrial and related services. Unless the context indicates to the contrary,
as used in this report the terms "Company" and "WMX Technologies" refer to WMX
Technologies, Inc. and its subsidiaries.
Through Waste Management, Inc. (formerly named Waste Management of North
America, Inc.), a wholly owned subsidiary of the Company (referred to herein,
together with its subsidiaries and certain affiliated companies providing solid
waste management and related services, as "Waste Management" or "WMI"), the
Company provides integrated solid waste management services in North America to
commercial, industrial, municipal and residential customers, as well as to
other waste management companies. These services consist of solid waste
collection, transfer, resource recovery and disposal services. As part of these
services, the Company is engaged in providing, through its Recycle America(R)
and Recycle Canada(R) programs, paper, glass, plastic and metal recycling
services to commercial and industrial operations and curbside recycling
services for such materials to residences; in removing methane gas from
sanitary landfill facilities for use in electricity generation; and in
providing medical and infectious waste management services to hospitals and
other health care and related facilities. In addition, through WMI the Company
provides street sweeping and parking lot cleaning services, portable fencing
and power pole services and Port-O-Let(R) portable sanitation services to
municipalities and commercial customers.
Chemical Waste Management, Inc., an approximately 79%-owned subsidiary of the
Company (referred to herein, together with its subsidiaries other than Rust (as
defined below), as "CWM"), is a leading provider of hazardous waste management
services in the United States. Its chemical waste management services,
including transportation, treatment, resource recovery and disposal, are
furnished to commercial and industrial customers, as well as to other waste
management companies and to governmental entities. CWM also furnishes
radioactive waste management services, primarily to electric utilities and
governmental entities.
Wheelabrator Technologies Inc., an approximately 55%-owned subsidiary of the
Company (referred to herein, together with its subsidiaries, as "WTI"),
provides a wide array of environmental products and services in North America
and abroad. WTI's clean energy group is a leading developer of facilities and
systems for, and provider of services to, the trash-to-energy, energy, and
independent power markets. Through the clean energy group, WTI develops,
arranges financing for, operates and owns facilities that dispose of trash and
other waste materials in an environmentally acceptable manner by recycling it
into energy in the form of electricity and steam. WTI's clean water group is
principally involved in the design, manufacture and operation of facilities and
systems used to purify water, to treat municipal and industrial wastewater, to
treat and manage biosolids resulting from the treatment of wastewater by
converting them into useful fertilizers, and to recycle organic wastes into
compost material useable for horticultural and agricultural purposes. The clean
water group also designs and manufactures various products and systems used in
water and wastewater treatment facilities and industrial facilities, precision
profile wire screens for use in groundwater wells and other industrial
applications, and certain other industrial equipment. WTI's clean air group
designs, fabricates and installs technologically advanced air pollution
emission control and measurement systems and equipment, including systems which
remove pollutants from the emissions of WTI's trash-to-energy facilities as
well as power plants and other industrial facilities.
Rust International Inc., a subsidiary owned approximately 56% by CWM and 40%
by WTI (referred to herein, together with its subsidiaries, as "Rust"),
furnishes engineering, construction, environmental and infrastructure
consulting, hazardous substance remediation and a variety of other on-site
industrial and related services primarily to clients in government and in the
chemical, petrochemical, nuclear, energy, utility, pulp and paper,
manufacturing, environmental services and other industries.
Printed on recycled paper LOGO
2
<PAGE>
The Company provides comprehensive waste management and related services
internationally, primarily through Waste Management International plc, a
subsidiary owned 56% by the Company, 12% by Rust and 12% by WTI (referred to
herein, together with its subsidiaries, as "Waste Management International").
Waste Management International provides a wide range of solid and hazardous
waste management services (or has interests in projects or companies providing
such services) in various countries in Europe and in Argentina, Australia,
Brunei, Hong Kong, Indonesia, Malaysia, New Zealand, Singapore and Taiwan.
On January 1, 1993, CWM and WTI formed Rust and acquired 58% and 42%,
respectively, of Rust's outstanding shares. Rust was created to serve the
engineering, construction, environmental and infrastructure consulting,
hazardous substance remediation and on-site industrial and related services
markets, which the managements of CWM, WTI and The Brand Companies, Inc.
(referred to herein as "Brand") believed could be served more effectively by
organizing the Company's several business units serving those markets into a
single integrated company. WTI contributed primarily its engineering and
construction and environmental and infrastructure consulting services
businesses and its recently formed international engineering unit based in
London. CWM contributed primarily its hazardous substance remediation services
business, its approximately 56% ownership interest in Brand, and its 12%
ownership interest in Waste Management International. On May 7, 1993, Brand was
merged into a subsidiary of Rust, and shares of Brand (other than those owned
by Rust or exchanged for cash in the merger) were converted into shares of
Rust. As a result of such merger, Brand is now a wholly owned subsidiary of
Rust.
The Company also owns an approximately 28% interest in ServiceMaster Consumer
Services L.P., a provider of lawn care, pest control and other consumer
services. The remaining ownership interest is held indirectly by ServiceMaster
Limited Partnership.
Through the end of 1992, the Company categorized its operations into four
industry segments-solid waste management and related services; hazardous waste
management and related services; energy, environmental and industrial projects
and systems; and international waste management and related services
(consisting of comprehensive waste management and related services provided
outside the United States, Canada and Mexico). Beginning in 1993, the Company
categorized the operations of Rust, which was formed from businesses
contributed by CWM and WTI, as a fifth industry segment--engineering,
construction, industrial and related services--and modified the name of its
energy, environmental and industrial projects and systems segment to "trash-to-
energy, water treatment, air quality and related services."
The following table shows the respective revenues of these segments for the
Company's last three years, presented as if the above-described Rust
transaction had occurred prior to the periods presented:
<TABLE>
<CAPTION>
(000'S OMITTED)
YEAR ENDED DECEMBER 31
----------------------------------
1991 1992 1993
---------- ---------- ----------
<S> <C> <C> <C>
Solid Waste Management and Related
Services.................................. $3,961,111 $4,309,614 $4,702,166
Hazardous Waste Management and Related
Services.................................. 720,048 755,088 661,860
Engineering, Construction, Industrial and
Related Services.......................... 1,236,979 1,441,050 1,534,465
Trash-to-Energy, Water Treatment, Air
Quality and Related Services.............. 746,042 928,313 1,142,219
International Waste Management and Related
Services.................................. 1,075,070 1,445,734 1,411,211
Eliminations of Intercompany Revenue....... (188,336) (218,772) (316,344)
---------- ---------- ----------
Consolidated Revenue....................... $7,550,914 $8,661,027 $9,135,577
========== ========== ==========
</TABLE>
For information relating to expenses and identifiable assets attributable to
the Company's different industry segments, see Note 10 to the Company's
Consolidated Financial Statements filed as an exhibit to
3
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this report and incorporated by reference herein. For interim periods, the
revenues and net income of certain of the Company's businesses may fluctuate
for a number of reasons, including there being for some businesses less
activity during the winter months.
Regulatory or technological developments relating to the environment may
require companies engaged in environmental services businesses, including the
Company, to modify, supplement or replace equipment and facilities at costs
which may be substantial. Because certain of the businesses in which the
Company is engaged are intrinsically connected with the protection of the
environment and the potential discharge of materials into the environment, a
material portion of the Company's capital expenditures is, directly or
indirectly, related to such items. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" set forth on pages 32 to 39 of
the Company's 1993 Annual Report to Stockholders (which discussion is filed as
an exhibit to this report and incorporated by reference herein) for a review of
property and equipment expenditures by the Company for the last three years.
The Company does not expect such expenditures, which are incurred in the
ordinary course of business, to have a materially adverse impact on its and its
subsidiaries' combined earnings or its or its subsidiaries' competitive
position in the foreseeable future because the Company's businesses are based
upon compliance with environmental laws and regulations and its services are
priced accordingly.
Although the Company strives to conduct its operations in compliance with
applicable laws and regulations, the Company believes that in the existing
climate of heightened legal, political and citizen awareness and concerns,
companies in the environmental services industry, including the Company, will
be faced, in the normal course of operating their businesses, with fines and
penalties and the need to expend funds for remedial work and related activities
with respect to waste treatment, disposal and trash-to-energy facilities. Where
the Company concludes that it is probable that a liability has been incurred, a
provision is made in the Company's financial statements for the Company's best
estimate of the liability based on management's judgment and experience,
information available from regulatory agencies and the number, financial
resources and relative degree of responsibility of other potentially
responsible parties who are jointly and severally liable for remediation of a
specific site, as well as the typical allocation of costs among such parties.
If a range of possible outcomes is estimated and no amount within the range
appears to be a better estimate than any other, then the Company provides for
the minimum amount within the range, in accordance with generally accepted
accounting principles. Such estimates are subsequently revised, as necessary,
as additional information becomes available. While the Company does not
anticipate that the amount of any such revision will have a material adverse
effect on the Company's operations or financial condition, the measurement of
environmental liabilities is inherently difficult and the possibility remains
that technological, regulatory or enforcement developments, the results of
environmental studies, or other factors could materially alter this expectation
at any time. Such matters could have a material adverse impact on earnings for
one or more fiscal quarters or years.
While in general the Company's environmental services businesses have
benefited substantially from increased governmental regulation, the
environmental services industry itself has become subject to extensive and
evolving regulation by federal, state, local and foreign authorities. Due to
the complexity of regulation of the industry and to public pressure,
implementation of existing and future laws, regulations or initiatives by
different levels of government may be inconsistent and difficult to foresee.
The Company makes a continuing effort to anticipate regulatory, political and
legal developments that might affect its operations but is not always able to
do so. The Company cannot predict the extent to which any legislation or
regulation that may be enacted or enforced in the future may affect its
operations.
The Company was incorporated in Delaware in 1968 and subsequently succeeded
to certain businesses owned by its organizers and others. The Company's common
stock is listed on the New York Stock Exchange under the trading symbol "WMX"
and is also listed on the Frankfurt Stock Exchange, the London Stock Exchange,
the Chicago Stock Exchange and the Swiss Stock Exchanges in Basle, Zurich and
Geneva.
4
<PAGE>
Unless the context indicates to the contrary, all statistical and financial
information under Item 1 and Item 2 of this report is given as of December 31,
1993 and, where such information relates to any period prior to 1993, it is
presented as if Rust had been in existence throughout such period. Statistical
and financial data appearing under the caption "Solid Waste Management and
Related Services" relate only to the Company's WMI group of subsidiaries and do
not include any data relating to CWM, Rust, WTI or Waste Management
International. See "Hazardous Waste Management and Related Services,"
"Engineering, Construction, Industrial and Related Services," "Trash-to-Energy,
Water Treatment, Air Quality and Related Services" and "International Waste
Management and Related Services."
SOLID WASTE MANAGEMENT AND RELATED SERVICES
At December 31, 1993, Waste Management conducted solid waste management and
related services operations in 49 states, the District of Columbia and five
Canadian provinces. During 1991, 1992 and 1993, operations in California,
Florida and Pennsylvania together accounted for approximately 35%, 34% and 34%,
respectively, of WMI revenue. No customer accounted for as much as 2% of WMI
revenue in 1991, 1992 or 1993.
Fees paid to Waste Management by its solid waste collection customers
(including charges paid by such customers for disposal) accounted for
approximately 78% of WMI revenue in 1991 and 77% in 1992 and 1993. Transfer and
disposal services provided to municipalities, counties and other waste
management companies accounted for approximately 22% of such revenue in 1991
and 23% in 1992 and 1993.
Collection
Waste Management provides solid waste collection services to approximately
1,004,100 commercial and industrial customers. Collection services are also
provided to approximately 11,276,700 homes and apartment units. Waste
Management's revenue from commercial, industrial and apartment collection
services (including revenues from recycling services) accounted for
approximately 70% of its solid waste collection revenue in 1991, 1992 and 1993.
See "Recycling and Resource Recovery--Recycling" for a description of recycling
services.
Commercial and Industrial
Many of Waste Management's commercial and industrial customers utilize
containers to store solid waste. These containers, ranging from 1 to 45 cubic
yards in size, are usually provided to the customer as part of WMI's services.
Stationary compactors, which reduce the volume of the stored waste prior to
collection, are frequently installed on the premises of large volume customers
and are usually provided to these customers in conjunction with WMI's
collection services. Containerization enables Waste Management to service most
of its commercial and industrial customers with collection vehicles operated by
a single employee. Compaction serves to decrease the frequency of collection.
Commercial and industrial collection services (which include containerized
service to apartment buildings) are generally performed under one- to three-
year service agreements, and fees are determined by such considerations as
market factors, collection frequency, type of equipment furnished, the type and
volume or weight of the waste collected, the distance to the disposal facility
and cost of disposal.
Residential
Most of Waste Management's residential solid waste collection services are
performed under contracts with, or franchises granted by, municipalities giving
WMI exclusive rights to service all or a portion of the homes in their
respective jurisdictions. Such contracts or franchises usually range in
duration from one to five years. The fees received by Waste Management are
based primarily on market factors, frequency and type of service, the distance
to processing or disposal facilities and cost of processing or disposal.
Residential collection fees are either paid by the municipalities out of tax
revenues or service charges or are paid directly by the residents receiving the
service.
5
<PAGE>
TRANSFER
In order to reduce costs of transportation from collection points to disposal
sites, Waste Management operates 117 solid waste transfer stations. A transfer
station is a facility where solid waste is received from collection vehicles
and then transferred to and compacted in large, specially constructed trailers
for transportation to disposal or resource recovery facilities. This procedure
reduces costs by improving utilization of collection personnel and equipment.
The services of these facilities are provided to municipalities or counties
and in most instances are also used by Waste Management and by other collection
companies. Fees are generally based upon such considerations as market factors,
the type and volume or weight of the waste transferred, the extent of
recycling, the transport distance involved and the cost of disposal.
Recycling and Resource Recovery
Recycling
Waste Management provides recycling services in the United States and Canada
through its Recycle America(R) and Recycle Canada(R) programs. Recycling
involves the removal of reusable materials from the waste stream for processing
and sale for use in various applications. Participating commercial and
industrial operations use containers to separate recyclable paper, glass,
plastic and metal wastes for collection, processing and sale by WMI. Fees are
determined by such considerations as market factors, frequency of collection,
the type and volume or weight of the recyclable material, the distance the
recyclable material must be transported and the value of the recyclable
material.
As part of its residential solid waste collection services,WMI provides
curbside recycling services to municipalities in the United States and Canada,
also through its Recycle America(R) and Recycle Canada(R) programs. Curbside
recycling services involve the use of specially designed, compartmentalized
vehicles to collect recyclable paper, glass, plastic and metal waste materials
which may be separated by residents into different waste containers provided to
them for such purpose. The recyclable materials are then typically deposited at
a local facility where they are sorted further and processed for resale.
In 1993,WMI provided curbside recycling services to approximately 5.8 million
households pursuant to more than 750 contracts in the United States and Canada.
In 1992, WMI provided such services to more than 5.2 million households.
Waste Management operates 113 materials recovery facilities for the
processing of recyclable materials. Such processing consists of separating
recyclable materials according to type and baling or otherwise preparing the
separated materials for sale.
Waste Management also participates in joint ventures with Stone Container
Corporation and American National Can Corporation to engage, respectively, in
the businesses of marketing paper fibre and aluminum, steel, and glass
containers for recycling. In each case WMI sells to the joint venture, or has
the joint venture market, the paper fibre or containers collected by WMI. The
joint ventures sell or market the materials to Stone Container, American
National Can or other parties who will process them for reuse. The joint
venture with American National Can also owns and operates three glass
processing facilities. During 1993, the joint ventures processed approximately
3.7 million tons of recyclable materials. WMI also provides tire recycling and
yard waste composting services.
Energy Recovery
At 31 WMI-owned or -operated sanitary landfill facilities, Waste Management
is engaged in methane gas recovery operations. These operations involve the
installation of a gas collection system into a sanitary landfill facility.
Through the gas collection system, gas generated by decomposing solid waste is
collected and
6
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transported to a gas-processing facility at the landfill site. Through physical
processes methane gas is separated from contaminants. The processed methane gas
is then either (i) sold directly to industrial users or (ii) sold to an
affiliate of the Company which uses it as a fuel to power an electricity-
generation facility. Electricity generated by the facility is sold, usually to
public utilities. WMI or an affiliate of WMI typically enters into long-term
sales contracts, often under terms or conditions which are subject to approval
by regulatory authorities.
WMX Technologies also engages in other resource recovery activities through
WTI's trash-to-energy and independent power operations and Waste Management
International's operations. See "Trash-to-Energy, Water Treatment, Air Quality
and Related Services" and "International Waste Management and Related
Services."
Disposal
Waste Management operates 133 solid waste sanitary landfill facilities. Of
this number, 105 are owned by Waste Management and the remainder are leased
from, or operated under contract with, others. Additional facilities are in
various stages of development. All of the sanitary landfill facilities are
subject to governmental regulation. See "Regulation--Solid Waste."
A sanitary landfill site must have geological and hydrological properties and
design features which limit the possibility of water pollution, directly or by
leaching. Sanitary landfill operations, which include carefully planned
excavation, continuous spreading and compacting of solid waste and covering of
the waste, are designed to maintain sanitary conditions, insure optimum
utilization of the airspace and prepare the site for ultimate use for other
purposes.
Suitable sanitary landfill facilities have become increasingly difficult to
obtain because of land scarcity, local resident opposition and expanding
governmental regulation. As its existing facilities become filled, the solid
waste disposal operations of Waste Management are and will continue to be
materially dependent on its ability to purchase, lease or obtain operating
rights for additional sites and obtain the necessary permits from regulatory
authorities to operate them. To develop a new facility, WMI must expend
significant time and capital resources without any certainty that a permit will
ultimately be issued for such facility. In addition, there can be no assurance
that additional sites can be obtained or that existing facilities can continue
to be operated. However, management believes that the facilities currently
available to WMI are sufficient to meet the needs of its current operations for
the foreseeable future.
In varying degrees, Waste Management utilizes its own sanitary landfill
facilities to accommodate its disposal requirements for collection and transfer
operations. In 1991, 1992, and 1993 approximately 48%, 50%, and 52%,
respectively, of the solid waste collected by WMI was disposed of in sanitary
landfill facilities operated by it. Usually these facilities are also used by
other companies and government agencies on a noncontract basis for fees
determined by such considerations as market factors and the type and volume or
weight of the waste.
Related Services
Waste Management also provides several types of services which are compatible
with its solid waste collection operations. Included in these operations are
medical and infectious waste management services, portable fencing and power
pole services, portable sanitation services and street sweeping and parking lot
cleaning services.
Waste Management's medical and infectious waste management services consist
of collecting, transporting, treating and disposing of medical and infectious
waste generated by hospitals, pharmaceutical manufacturers, medical clinics,
physician and dentist offices and other sources.
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Waste Management provides portable fencing and power pole services to
construction sites, port facilities and industrial and governmental customers.
Rental rates vary depending on the type and size of the fencing or power poles
provided to the customer, the duration of the rental period and local market
conditions. Waste Management also provides portable sanitation services to the
same types of customers. The portable sanitation services, which are marketed
under the Port-O-Let(R) trade name, are also used at numerous public
gatherings.
These related services are marketed and performed primarily by employees
operating out of WMI's solid waste operations facilities who also may have
responsibility for some phase of solid waste marketing or operations.
HAZARDOUS WASTE MANAGEMENT AND RELATED SERVICES
CWM's principal business (excluding Rust) is to provide hazardous waste
management services consisting of chemical and radioactive waste
transportation, treatment, resource recovery and disposal services. For each of
the three years in the period ended December 31, 1993, such services accounted
for the following percentages of CWM's hazardous waste management and related
services revenue:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------
1991 1992 1993
------- ------- -------
<S> <C> <C> <C>
Treatment, resource recovery and disposal............ 63.2% 68.5% 70.6%
Special services..................................... 21.4 15.3 18.6
Transportation....................................... 15.4 16.2 10.8
</TABLE>
Until December 31, 1992, CWM also provided environmental and industrial
specialty contracting services through a group of regional and local companies
owned by Brand, as well as hazardous substance remediation services, which
businesses were contributed to Rust on January 1, 1993. See "General."
Chemical Waste Management Services
In the United States, most chemical wastes generated by industrial processes
are handled "on-site" at the generators' facilities. Since the mid-1970's,
public awareness of the harmful effects of unregulated disposal of chemical
wastes on the environment and health has led to extensive and evolving federal,
state and local regulation of chemical waste management activities. The major
federal statutes regulating the management of chemical wastes include the
Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), the Toxic
Substances Control Act ("TSCA") and the Comprehensive Environmental Response,
Compensation and Liabilities Act of 1980, as amended ("CERCLA" or "Superfund"),
all primarily administered by the United States Environmental Protection Agency
("EPA"). CWM's business is heavily dependent upon the extent to which
regulations promulgated under these or similar state statutes and their
enforcement over time effectively require wastes to be managed in facilities of
the type owned and operated by CWM. See "Regulation--Hazardous Waste," "--RCRA"
and "--Superfund."
The chemical wastes handled by CWM include industrial by-products and
residues that have been identified as "hazardous" pursuant to RCRA, as well as
other materials contaminated with a wide variety of chemical substances. CWM
operates chemical waste treatment, storage and disposal facilities in 18 states
and is able to service customers in most parts of the country through this
network of facilities. Additionally, certain chemical wastes, such as
polychlorinated biphenyls ("PCBs"), are transported greater distances because
they can be accepted only at a limited number of treatment or disposal
facilities. CWM also owns a majority interest in a subsidiary which operates a
resource recovery facility, a disposal facility and storage facilities in
Mexico.
The ongoing chemical waste management services provided by CWM are typically
performed pursuant to nonexclusive service agreements that obligate CWM to
accept from the customer chemical wastes conforming to the provisions of the
agreement. Fees are determined by such factors as the chemical
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composition and volume or weight of the wastes involved, the type of
transportation or processing equipment utilized and distance to the processing
or disposal facility. CWM periodically reviews and adjusts the fees charged for
its services.
Treatment, Resource Recovery and Disposal
CWM's treatment and resource recovery operations involve processing chemical
wastes through the use of thermal, physical, chemical or other treatment
methods at one or more of CWM's facilities. The residual material produced by
these interim processing operations is either disposed of by burial in a secure
disposal cell or by deep well injection, or it may be managed through one of
CWM's resource recovery programs.
Thermal treatment refers primarily to processes that use incineration as the
principal mechanism for waste destruction. Physical treatment methods include
distillation, evaporation and separation, all of which basically result in the
separation or removal of solid materials from liquids. Chemical treatment
methods include chemical oxidation and reduction, chemical precipitation of
heavy metals, hydrolysis and neutralization of acid and alkaline wastes and
essentially involve the transformation of wastes into inert materials through
one or more chemical reaction processes. CWM has developed a program of
reclamation and reuse of certain chemical wastes, particularly solvent-based
wastes, that are generated by certain industrial cleaning operations and metal
finishing and other industrial processes.
CWM's secure land disposal facilities either have interim status or have been
issued permits under RCRA. See "Regulation--RCRA." In general, CWM's secure
land disposal facilities have received the necessary permits and approvals to
accept chemical wastes, although some of such sites may accept only certain
chemical wastes. Only chemical wastes in a stable, solid form which meet
applicable regulatory requirements may be buried in CWM's secure disposal
cells. These land disposal facilities are sited, constructed and operated in a
manner designed to provide long-term containment of such waste.
At three of its locations, CWM isolates treated chemical wastes in liquid
form by injection into deep wells. Deep well technology involves drilling wells
in suitable rock formations far below the base of fresh water and separated
from it by other substantial geological confining layers.
Transportation
Chemical waste may be collected from customers and transported by CWM or
delivered by customers to CWM's facilities. Chemical waste is transported by
CWM primarily in specially constructed tankers and semi-trailers, including
stainless steel and rubber or epoxy-lined tankers and vacuum trucks, or in
containers or drums on trailers designed to comply with applicable regulations
and specifications of the U.S. Department of Transportation ("DOT") relating to
the transportation of hazardous materials. CWM's chemical waste transportation
fleet includes approximately 400 tractors and 920 trailers. CWM may utilize the
services of subcontractors to transport waste in some circumstances. CWM
operates 35 transportation centers from which its fleet is dispatched or at
which fleet maintenance operations are conducted. CWM also operates several
facilities at which waste collected from or delivered by customers may be
analyzed and consolidated prior to further shipment.
Low-Level and Other Radioactive Waste Services
Radioactive wastes with varying degrees of radioactivity are generated by
nuclear reactors and by medical, industrial, research and governmental users of
radioactive material. Radioactive wastes are generally classified as either
high-level or low-level. High-level radioactive waste, such as spent nuclear
fuel and waste generated during the reprocessing of spent fuel from nuclear
reactors, contains substantial quantities of long-lived radionuclides and is
the ultimate responsibility of the federal government. Low-level radioactive
waste, which decays more quickly than high-level waste, largely consists of dry
compressible wastes (such as
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contaminated gloves, paper, tools and clothing), resins and filters which have
removed radioactive contaminants from nuclear reactor cooling water, solidified
wastes from power plants which have become contaminated with radioactive
substances and irradiated hardware.
CWM provides comprehensive low-level radioactive waste management services in
the United States consisting of disposal, processing and various other special
services, and transportation. To a lesser extent, it provides services with
respect to radioactive waste that has become mixed with regulated chemical
waste. CWM generally enters into long-term service agreements with its
customers. A particular agreement may include all or part of the services
performed by CWM.
Disposal
CWM's radioactive disposal operations currently involve low-level radioactive
waste only. Its Barnwell, South Carolina facility is one of two licensed
commercial low-level radioactive waste disposal facilities in the United States
and has been in operation since 1971.
Fees for burial are set by CWM based upon volume, level of radioactivity and
handling considerations. A trust has been established and funded to pay the
estimated cost of decommissioning the Barnwell facility. A second fund, for the
extended care of the facility, is funded by a surcharge on each cubic foot of
waste received. CWM may be liable for additional costs if the extra charges
collected to restore and maintain the facility are insufficient to cover the
cost of restoring or maintaining the site after its closure (which CWM has no
reason to expect).
Eight southeastern states have joined together to form the Southeast
Interstate Low-Level Radioactive Waste Management Compact (the "Southeast
Compact"). The Southeast Compact initially designated the Barnwell site as the
disposal facility to receive all low-level radioactive waste generated in the
eight-state compact region through 1992, and designated North Carolina as the
next state to host the regional disposal facility. Federal law allows continued
access to the Barnwell facility by generators located outside the compact
region. In exchange for such continued access, generators outside of the
Southeast Compact region pay surcharges to the State of South Carolina for each
cubic foot of waste disposed by CWM. Federal law also establishes milestones
for states that are not part of a compact region with an operating disposal
facility. If the development of new facilities does not progress in accordance
with such milestones, penalties may be imposed in the form of higher surcharges
for disposal at the Barnwell facility and, ultimately, denial of access to the
Barnwell facility. During 1992, South Carolina adopted legislation allowing the
Barnwell site to continue operating until December 31, 1995, and to continue
receiving waste generated outside the Southeast Compact until June 30, 1994.
The Southeast Compact subsequently increased the surcharges payable by
generators located outside the compact region. CWM has advised the Company that
CWM expects the South Carolina legislature to consider extending to December
31, 1995 the date the Barnwell site must stop accepting waste generated outside
the Southeast Compact, but there can be no assurance that such extension will
be obtained.
During the third quarter of 1989, CWM entered into contracts with the
responsible agencies for the Southeast Compact and the Central Midwest Low-
Level Radioactive Waste Compact (whose member states are Illinois and Kentucky)
(the "Central Midwest Compact") to site, license, construct, operate and close
new regional low-level radioactive waste disposal facilities for those
Compacts, which facilities are intended to be located in North Carolina and
Illinois, respectively. During the third quarter of 1990, CWM also entered into
a similar contract for the Appalachian States Low-Level Radioactive Waste
Compact (whose member states are Pennsylvania, West Virginia, Maryland and
Delaware). The terms of these contracts range from 20 to 30 years. Because of
the difficulties associated with the process of siting and licensing such
facilities, their development has not in each case proceeded in the manner and
on the schedule contemplated by the respective Compact authorities. For
example, in October 1992, a special state commission which had been examining
the siting of the proposed disposal facility in Illinois declined to approve
it, as a consequence of which the timetable for establishing such a facility is
uncertain. CWM was subsequently directed to stop certain of its work under its
contract with the Central Midwest Compact.
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At this time the Company and CWM are unable to predict the effect which these
developments might have upon CWM's business.
Special Services
CWM processes low-level radioactive waste at its customers' plants to enable
such waste to be shipped in dry rather than liquid form to meet the
requirements for receipt at disposal facilities and to reduce the volume of
waste that must be transported. Processing operations include solidification,
demineralization, dewatering and filtration.
Other services offered by CWM include decommissioning nuclear facilities,
which involves dismantling buildings and equipment (projects that typically are
nonrecurring), providing electro-chemical, abrasive and chemical removal of
radioactive contamination, and providing management services for spent nuclear
fuel storage pools.
Transportation
Most low-level radioactive waste is transported by truck to burial sites.
CWM's transportation fleet consists of 25 tractors and 85 heavy-duty trailers,
including specialty trailers such as shielded vans, drop decks and lowboys.
Transportation terminals are located in South Carolina and Illinois.
Low-level radioactive waste requiring additional shielding must be
transported in shipping casks licensed by the U. S. Nuclear Regulatory
Commission ("NRC"). CWM owns 60 such casks, as well as a variety of other
containers designed to meet the varying needs of the nuclear industry.
ENGINEERING, CONSTRUCTION, INDUSTRIAL AND RELATED SERVICES
Rust is a leading provider, through its subsidiaries, of engineering,
construction and environmental and infrastructure consulting services,
hazardous substance remediation services and other on-site industrial and
related services, primarily to clients in government and in the chemical,
petrochemical, nuclear, energy, utility, pulp and paper, manufacturing,
environmental services and other industries. The types of engineering,
construction and environmental and infrastructure consulting services provided
by Rust include process and design engineering, plant, facility and related
infrastructure construction, project and construction management and oversight
services, site analyses, remedial investigations, feasibility studies,
environmental assessments, and architectural services. The types of hazardous
substance remediation and other on-site industrial and related services
provided by Rust include on-site remediation of hazardous substances,
scaffolding, industrial cleaning and maintenance and nuclear and utility
services and maintenance. In addition, Rust provides engineering and
environmental and infrastructure consulting services to clients in several
countries outside of North America.
Until May 1993, Brand engaged in the asbestos abatement business. In May
1993, Brand sold substantially all of its asbestos abatement business to NSC
Corporation ("NSC"). See "Acquisitions and Dispositions." As a result of that
transaction Rust has an approximately 40% interest in NSC, of which the
remaining ownership interests are held approximately 40% by OHM Corporation and
20% by the public.
Engineering, Construction and Environmental and Infrastructure Consulting
Services
The industrial engineering services provided by Rust are of two general
types, process engineering and facility design engineering. Process engineers
create the processes by which facilities operate, such as chemical,
petrochemical, energy and pulp and paper plants. Design engineering services
provided by Rust encompass the following disciplines: architectural;
electrical; control systems; process piping; mechanical; structural; heating,
ventilation and air conditioning ("HVAC"); and civil. The construction services
provided by Rust include primarily the new construction and retrofitting of
power generation and industrial facilities, including chemical, petrochemical,
pulp and paper, food and beverage, iron and steel, automotive, utility and
industrial power and other manufacturing facilities. Rust also requisitions and
procures equipment and construction materials for clients and performs quality
assurance and quality control oversight of vendor manufacturing practices and
provides infrastructure and marine construction, dredging, underwater diving
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and dismantling and demolition services. Rust's engineering and construction
services are provided on a stand-alone basis but are also provided together
under engineering, procurement and construction contracts which include
engineering services, procurement of facility equipment and materials and
construction services.
Rust's environmental and infrastructure consulting services provide
alternative solutions for client problems relating to removing and disposing of
hazardous and toxic substances, and managing solid waste, water and wastewater,
groundwater and air resources. Such services are provided primarily to private
industry and also to federal, state and local governments, including the
Department of Defense (the "DOD") and the Department of Energy (the "DOE"). The
services include performing remedial investigations for the purpose of
characterizing hazardous waste sites, preparing feasibility studies setting
forth recommended alternative remedial actions, and providing engineering
design and construction oversight services for remediation projects. The
services provided also include the siting, permitting, design and construction
oversight of solid and hazardous waste landfills and related facilities. Study,
design and construction oversight services are also provided, primarily to
municipalities, in connection with wastewater collection and treatment, potable
water supply treatment and distribution, stormwater management and the building
of streets, highways, airports, bridges, waterways and rail services.
Additional services provided through Rust include environmental assessment
services, the design of systems to properly and safely store, convey, treat and
dispose of industrial, hazardous and radioactive materials and consulting
services regarding disposal, waste minimization methods and techniques, air
quality regulation and industrial hygiene and safety.
Through a series of acquisitions completed during the period from late 1992
through February 1994, Rust has developed an international engineering and
consulting business performing projects in 24 countries. In Europe, Rust has
offices in the United Kingdom, Germany, Sweden and Italy, and in the Asia-
Pacific region, in Australia, Hong Kong, China, Singapore, Malaysia and
Indonesia. Rust also has an office in Dubai, U.A.E. Rust's foreign subsidiaries
provide process and design engineering services, environmental and
infrastructure engineering services and construction management services to
national, regional and local governments and to clients in the utility and
industrial power and general manufacturing industries. In addition, Rust
provides engineering and consulting services to Waste Management International
worldwide.
Rust received 45%, 43%, and 52% of its total consolidated revenues in 1991,
1992 and 1993, respectively, from the performance of engineering, construction
and environmental and infrastructure consulting services.
Remediation and Other On-Site Industrial and Related Services
Hazardous Substance Remediation Services
Rust performs on-site hazardous chemical and radioactive substance
remediation services for clients in the chemical, petrochemical, automotive and
other manufacturing industries and for federal, state and local government
entities, including the DOD and the DOE in connection with such projects as the
remediation of military bases and other government installations, the EPA in
connection with CERCLA projects and various state environmental agencies. Rust
treats hazardous substances on-site using a variety of methods and
technologies, including, among others, mobile incineration technology, thermal
desorption to separate organic contaminants from soils or solids for subsequent
treatment of the organic vapor stream, sludge drying, soil washing,
stabilization and, to a lesser extent, bioremediation, which involves the
breakdown of hazardous substances with microorganisms. Rust's hazardous
substance remediation services also include the containment and closure of
contaminated sites and the cleaning, relining and sealing of liquid containment
and treatment ponds, lagoons, and other surface impoundments.
Hazardous substance remediation services provided to Rust's private industry
clients often involve the implementation of "records of decision" promulgated
by the EPA in response to results of EPA
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environmental analysis and investigation. In connection with the remediation of
military bases and other government installations, the DOD and DOE are
experimenting with awarding multi-disciplined remediation contracts to a single
company capable of providing the management services necessary to oversee the
entire project. The company selected is, in effect, the project's general
contractor. In August 1993, the U.S. Army Corps of Engineers awarded to Rust
two such contracts under which Rust could be paid up to $350 million over a
ten-year period. Under such contracts, Rust will perform work pursuant to
individual delivery orders negotiated on a project-by-project basis, and there
can be no assurance that the delivery orders ultimately issued or successfully
negotiated and performed by Rust will aggregate $350 million in fees. Rust
intends to utilize its integrated approach to providing a full range of
engineering, construction, environmental consulting, on-site hazardous
substance remediation and other industrial services to pursue additional
comprehensive federal government environmental services contracts.
On-Site Industrial and Related Services
Rust provides various on-site industrial and related services. Such services
consist primarily of scaffolding, industrial cleaning, catalyst handling, plant
and nuclear and utility services. Rust provides scaffolding services primarily
to the chemical, petrochemical and utilities industries, as well as other
clients. In most cases, the scaffolding services are provided in conjunction
with periodic, routine cleaning and maintenance of refineries, chemical plants
and utilities, although such services are also performed in connection with new
construction projects. Rust performs four types of industrial cleaning
services--water blasting, chemical cleaning, vacuuming and water filtration--
primarily for clients in the petrochemical, chemical, and pulp and paper
industries, utilities and, to a lesser extent, the government sector. Rust's
catalyst handling services include the unloading, screening, classifying for
reuse, disposing and reloading of catalyst, primarily to customers in the
refining, petrochemical, chemical and gas processing industries using solid
catalyst in reactors to convert, through chemical reactions, various
hydrocarbon substances into higher grades or specific products and to remove
unwanted byproducts. Rust's on-site plant services include providing personnel
to perform mechanical and electrical services, equipment installation, welding,
HVAC, warehousing and inventory management services and technical support in
the area of industrial hygiene and safety training. Rust assists clients in the
nuclear and utility industries in solving electrical, mechanical, engineering
and related technical services problems. Rust also provides spent fuel storage
(rerack) services to the nuclear power industry.
Rust received 55%, 57% and 48% of its total consolidated revenues in 1991,
1992 and 1993, respectively, from the performance of hazardous substance
remediation and other on-site industrial and related services (including
asbestos abatement services until the May 1993 transfer of that business, as
described in "Acquisitions and Dispositions").
TRASH-TO-ENERGY, WATER TREATMENT, AIR QUALITY AND RELATED SERVICES
Wheelabrator Clean Energy
WTI, through Wheelabrator Environmental Systems Inc. and its subsidiaries, is
a leading developer, operator and owner of trash-to-energy and independent
power facilities in the United States. These facilities, either owned, operated
or under construction, give WTI nearly 800 megawatts of electric generating
capacity, which ranks it among the nation's largest independent power
producers.
WTI's trash-to-energy projects utilize proven boiler and grate technology
capable of processing up to 3,000 tons of trash per day per facility. The heat
from this combustion process is converted into high-pressure steam, which
typically is used to generate electricity for sale to public utility companies
under long-term contracts.
WTI's trash-to-energy development activities involve a number of contractual
arrangements with a variety of private and public entities, including
municipalities (which supply trash for combustion), utilities
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or other power users (which purchase the energy produced by the facility),
lenders, public debtholders, joint venture partners and equity investors (which
provide financing for the project) and the contractors or subcontractors
responsible for building the facility. In addition, WTI often identifies and
acquires sites for the facility and for the disposal of residual ash produced
by the facility and obtains necessary permits and licenses from local, state
and federal regulatory authorities.
WTI also develops, operates and, in some cases, owns independent power
projects, which either cogenerate electricity and thermal energy or generate
electricity alone for sale to utilities. Cogeneration is a technology which
allows the consecutive use of two or more useful forms of energy from a single
primary fuel source, thus providing a more efficient use of a fuel's total
energy content.
Wheelabrator Clean Water
Through its Wheelabrator Clean Water group ("Wheelabrator Clean Water"), WTI
develops projects that purify water, treat wastewater, treat and manage
biosolids, and compost organic wastes. WTI also provides technologies and
services used to treat drinking water as well as industrial and municipal
process and water. Wheelabrator Clean Water provides a range of biosolids
management services to over 400 communities, including land application,
drying, pelletizing, stabilization and composting of non-hazardous biosolids.
Wheelabrator Clean Water typically enters into multi-year contracts with
biosolids generators under which WTI is paid by the generator to beneficially
reuse the biosolids.
Land application involves the application of non-hazardous biosolids as a
natural fertilizer on farmland pursuant to rigorous site-specific permits
issued by applicable state authorities. Biosolids are also used in land-
reclamation projects such as strip mines. Regulations governing sludge
management were issued by the EPA in December 1992 under the Clean Water Act.
The regulations encourage the beneficial use of municipal sewage sludge by
recognizing the resource value of biosolids as a fertilizer and soil
conditioner, and establish requirements for land application designed to
protect health and the environment.
Wheelabrator Clean Water also develops and operates facilities at which
biosolids are dried and pelletized. WTI has three facilities currently in
operation, including a recently completed facility in New York City, and two
other facilities, one under construction and the other in the late stages of
development, in Baltimore, Maryland. WTI has approximately 565 dry-tons-per-day
of biosolids drying capacity either in operation, under construction or in
advanced stages of development. Sludge which has been dried is generally used
as fertilizer by farmers, commercial landscapers and nurseries and as a bulking
agent by fertilizer manufacturers. Development of dryer facilities generally
involves various contractual arrangements with a variety of private and public
entities, including municipalities (which generate the biosolids), lenders,
contractors and subcontractors which build the facilities, and end-users of the
fertilizer generated from the treatment process.
Wheelabrator Clean Water is also a leading provider of a comprehensive range
of water and wastewater treatment services to municipalities throughout the
United States, including water and wastewater treatment plant start-up
assistance, plant operations and maintenance planning and management, training
of plant supervisors, operators and laboratory and maintenance personnel,
refining process systems, management systems for process control, and plant
diagnostic evaluations and energy audits. Wheelabrator Clean Water also designs
and supplies enclosed automated composting systems which recycle organic wastes
into beneficial products which are used by commercial landscapers, nurseries
and fertilizer manufacturers.
Though its Wheelabrator Engineered Systems Inc. subsidiary ("WES"),
Wheelabrator Clean Water engineers and manufacturers a variety of environmental
products and systems. WES provides single-source, advanced-systems solutions
related to drinking water, industrial process water, wastewater, slurry pumping
and high solids dewatering. WES also provides systems designed to remove solids
from liquid streams through the use of self-cleaning bar/filter screens,
grinders, macerators, conveyors and compactor systems. WES provides high
technology water purification and wastewater treatment systems which utilize a
variety of technologies including demineralizers, reverse osmosis and vacuum
degasification products. WES also designs
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and installs process technology systems utilizing evaporators, crystallizers,
electrodialysis, dialysis, reverse osmosis and ultrafiltration for treating
industrial process wastewater. Through its Johnson Screen unit, WES produces
profile wire screen products for groundwater production, hydrocarbon
processing, food processing and coal/mineral processing.
WTI also manufactures Wheelabrator machines, a line of nonpolluting materials
cleaning equipment for use by a variety of industrial customers, including
foundries, steel processors, automobile producers and rubber and plastics
producers, in cleaning and finishing metal and other materials. WTI also
manufactures high-alloy combustion grates used in the high-temperature furnaces
of its trash-to-energy facilities.
Wheelabrator Clean Air
WTI's Wheelabrator Clean Air group ("Wheelabrator Clean Air") designs,
fabricates and installs advanced air pollution emission control and measurement
technologies. WTI offers electrostatic precipitators, flue-gas desulfurization
systems (scrubbers), fabric-filter systems (baghouses) and nitrogen oxide
("NOx") control systems, which remove pollutants from the emissions of WTI's
trash-to-energy systems, as well as power plants and other industrial
facilities. Wheelabrator Clean Air also designs and constructs tall concrete
chimneys and silos to help utilities and industrial companies meet
environmental requirements. Wheelabrator Clean Air's activities involve both
custom and pre-engineered systems for emission control. The custom engineering
division licenses a patented process for the removal of hydrogen sulfide from
gaseous and liquid streams. The process prevents the formation of sulfur
dioxide emissions, thereby controlling acid rain and odor problems.
Wheelabrator Clean Air also provides a full range of technologies and services
for destroying or recycling volatile organic compounds ("VOCs") from air and
liquid sources and NOx from air sources. Both VOCs and NOx are major
contributors to the creation of smog. WTI's VOC and NOx control systems are
utilized by customers in a variety of industries, including oil refineries,
chemical plants and automobile production facilities. Complementing the
emission control divisions is a measurement division which designs and installs
continuous emissions monitoring systems ("CEMs") for the utility, trash-to-
energy, industrial furnace and petrochemical industries, all of which are
affected by regulations requiring the continuous monitoring of stack emissions.
WTI anticipates that the Clean Air Act Amendments of 1990, along with existing
and proposed regulations issued thereunder, will generate additional business
opportunities for its expertise in VOC and NOx control systems and scrubbers,
as well as additional applications for CEMs. See "Regulation--Trash-to-Energy,
Water Treatment, Air Quality and Related Services."
INTERNATIONAL WASTE MANAGEMENT AND RELATED SERVICES
The Company is a leading provider of comprehensive waste management and
related services internationally, primarily through Waste Management
International, which conducts essentially all of the waste management
operations of the Company located outside North America. The operations of
Waste Management International are managed on a country by country basis and
are divisible into two broad categories: collection services and treatment and
disposal services.
The Company has had international operations since the mid-1970's. However,
the bulk of the Company's international operations and revenues are derived
from the acquisition over the last six years of numerous companies and
interests in Europe in various of its service lines. In 1993, the Company
completed numerous acquisitions including, among others: in the U. K., the
acquisition by the joint venture company formed in 1992 by Waste Management
International and Wessex Water Plc ("Wessex") (an English publicly traded
company providing water distribution, wastewater treatment and sewerage
services, in which Waste Management International acquired a 15% interest in
1991, which was increased to 20% in February 1993) of Waste Management Limited,
a solid waste collection and disposal company, and related business and assets;
in France, a company engaged in solid waste collection in industrial cleaning;
in The Netherlands, a company engaged in the collection and transportation of
solid waste and the sorting of demolition waste; and in Germany, a group of
companies providing waste collection services and recyclables sorting. In 1993,
Waste Management International also acquired other businesses in the U. K.,
Germany, France, The Netherlands, Finland, Italy, Denmark, Sweden, Austria,
Australia, New Zealand and Taiwan.
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In accordance with its objective of maintaining a local identity, Waste
Management International, in certain cases, operates through companies or joint
ventures in which Waste Management International and its affiliates own less
than a 100% interest.
Because of the timing, number and size of Waste Management International's
Italian acquisitions, the portion of Waste Management International's revenues
in 1991, 1992 and 1993 derived from Italian operations was 46%, 38% and 32%,
respectively. During 1991 and 1992, revenues from Sweden were also 10% or more
of Waste Management International's revenues. Revenues from The Netherlands
were more than 10% of Waste Management International's revenues in 1993.
While Waste Management International has considerable experience in
mobilizing for and managing foreign projects, its operations continue to be
subject generally to such risks as currency fluctuations and exchange controls,
the need to recruit and retain suitable local labor forces and to control and
coordinate operations in different jurisdictions, changes in foreign laws or
governmental policies or attitudes concerning their enforcement, political
changes, local economic conditions and international tensions. In addition,
price adjustment provisions based on certain formulas or indices may not
accurately reflect the actual impact of inflation on the cost of performance.
In August 1991, each of CWM and WTI acquired a 15% fully diluted interest in
a predecessor of Waste Management International from a subsidiary of the
Company pursuant to the exercise of previously granted options. See
"Acquisitions and Dispositions." In April 1992, Waste Management International
sold 75,000,000 ordinary shares (20% of the post-offering outstanding shares)
in an initial public offering. The proceeds of the offering, approximately
$700,000,000, were used to retire third party debt and to repay advances from
the Company. Immediately following the public offering, Waste Management
International was owned 56%, 12% and 12% by the Company, WTI and CWM,
respectively. CWM subsequently transferred its interest in Waste Management
International to Rust in connection with the formation of Rust in January 1993.
Collection Services
Collection services include collection and transportation of solid, hazardous
and medical wastes and recyclable material from residential, commercial and
industrial customers. The residential solid waste collection process, as well
as the commercial and industrial solid and hazardous waste collection process,
is similar to that utilized by the Company in the United States. Waste
Management International provides collection services as of the date of this
report to governmental and private customers in ten European countries,
Argentina, Australia, Brunei, Malaysia, New Zealand and Taiwan. Business is
obtained through public bids or tenders, negotiated contracts, and, in the case
of commercial and industrial customers, direct contracts. Waste Management
International operates 76 waste transfer facilities, 15 of which are for
hazardous waste, 58 of which are for solid waste and three of which are for
both types of waste.
At December 31, 1993, Waste Management International's collection services
encompassed approximately 1,700 separate municipal contracts (the largest
number of which are in Italy) serving over 6.3 million households (including
provision of recycling services to over one million households) and commercial
and industrial collection services to more than 140,000 solid waste and
approximately 29,600 hazardous waste customers, as well as related services.
The size, specifications, provisions and duration of municipal contracts vary
substantially, with some such contracts also covering landfill disposal or
street-sweeping or other cleaning services. Pricing for municipal contracts is
generally based on volume of waste, number and frequency of collection pick-ups
and disposal arrangements. Longer-term contracts typically have formulas for
periodic price increases or adjustments.
Street, industrial premises, office, parking lot and port cleaning services
are also performed by Waste Management International, along with portable
sanitation/toilet services for such occasions as outdoor concerts and special
events.
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Waste Management International's commercial and industrial solid and
hazardous waste collection services are generally contracted for by individual
establishments. In addition to solid waste collection customers, customers
include small quantity waste generators, as well as larger petrochemical,
pharmaceutical and other industrial customers, which may seek collection of
hazardous, chemical or medical wastes or residues. Contract terms and prices
vary substantially between jurisdictions and types of customer.
Treatment and Disposal Services
Treatment and disposal services include processing of recyclable materials,
operation of both solid and hazardous waste landfills, operation of municipal,
trash-to-energy and hazardous waste incinerators, and provision of hazardous
waste treatment and site remediation services and water treatment services. The
operation of solid waste landfills is currently Waste Management
International's most significant treatment and disposal service. Treatment and
disposal services are provided under contracts which may be obtained through
public bid or tender or direct negotiation, and are also provided directly to
other waste service companies. At December 31, 1993, Waste Management
International operated 23 waste treatment facilities, 32 recycling and
recyclables processing facilities, 11 incinerators and 57 landfills; three of
the 11 incinerators are hazardous waste incinerators.
Once collected, solid wastes may be processed in a recyclables processing
facility. Unprocessed solid wastes, or the portion of the waste stream
remaining after recovery of recyclable materials, require disposal, which may
be accomplished through incineration (in connection with which the energy value
may be recovered in a trash-to-energy facility) or through disposal in a solid
waste landfill. The relative use of landfills versus incinerators differs from
country to country and will depend on many factors, including the availability
of land, geological and hydrological conditions, the availability and cost of
technology and capital, and the regulatory environment. The main determinant of
disposal method is generally the disposal cost per cubic meter at local
landfills, as incineration is generally more expensive.
At present, in most countries in which Waste Management International
operates, landfilling is the predominant disposal method employed. Waste
Management International owns or operates landfills in Italy, Sweden, France,
Spain, Australia, the United Kingdom, Germany, Denmark, Argentina and New
Zealand. The Company is also constructing a solid waste landfill in Hong Kong.
Landfill disposal agreements may be separate contracts or an integrated portion
of collection or treatment contracts. In addition, landfills may accept waste
on a reserved space or per load basis. Waste Management International believes
it has access to sufficient solid waste landfill capacity to meet its current
needs.
Demand for solid waste incineration is affected by landfill disposal costs
and government regulations. The incineration process for non-hazardous solid
waste has also been influenced by two significant factors in recent years: (i)
increasingly strict control over air emissions from incinerators; and (ii)
increasing emphasis on trash-to-energy incinerators, which utilize heat
produced by incinerators to generate electricity and other energy. Incineration
generates approximately 30% residue (by weight), which is either landfilled or,
where permitted, recycled for use as a road base or in other construction uses.
Waste Management International's trash-to-energy incinerator in Hamm is a
German-designed plant and the only privately operated trash-to-energy facility
in Germany. It is among the first trash-to-energy facilities to fully comply
with that country's stringent new air pollution requirements. The facility
serves the household and commercial solid waste incineration needs of a
population of over 550,000 in Hamm and nearby towns. Under its current permits,
the facility is able to produce 18 megawatts of steam-generated electricity and
sold approximately 69,000 megawatt hours to the local power grid in 1993
(enough power for about 17,000 homes). In 1992, Waste Management International
entered into a contract with the County of Gutersloh, Germany to design,
construct, own and operate a trash-to-energy facility. The facility is being
designed with a capacity of converting 268,000 metric tons per year of
municipal waste and sewage sludge into energy and the County has guaranteed to
provide to the facility at least 205,000 metric tons of waste
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and sewage sludge per year. The facility would be capable of producing enough
electricity to power more than 35,000 homes. Waste Management International
also operates five small conventional municipal solid waste incinerators in
Italy and one small plant in each of Sweden and New Zealand.
Waste Management International owns or operates hazardous waste treatment
facilities in Finland, Italy, Sweden, France, Germany, the United Kingdom, The
Netherlands, Hong Kong and New Zealand, has nearly completed the construction
of a hazardous waste treatment facility in Indonesia, and has entered into
agreements with the governments of Argentina and Venezuela to develop hazardous
waste treatment facilities in those countries. The Brescia hazardous waste
treatment plant in Italy reduces and stabilizes waste through a number of
treatment processes, including physical-chemical treatment, biological
treatment, filtration and sludge stabilization, prior to final landfilling at
Waste Management International's nearby secure hazardous waste landfill or
other permitted disposal. The facility has a modern laboratory for analyzing
waste streams. The SAKAB facility in Norrtorp, Sweden is the largest hazardous
waste treatment facility in Sweden and utilizes physical-chemical treatment,
incineration and landfilling technologies. Waste Management International's ATM
facility in Moerdijk, which is near Rotterdam in The Netherlands, handles a
broad range of chemical wastes, polluted liquids (including wastewater
associated with ship cleaning services) and contaminated soils. A paint waste
treatment facility began operation at Waste Management International's ATM
facility in 1992. In Hong Kong, a comprehensive hazardous waste treatment
facility (including a hazardous waste incinerator) began commercial operation
in June 1993.
In addition, Waste Management International believes that water and
wastewater treatment offer future opportunities. In Europe, higher
environmental standards, particularly for wastewater discharges have expanded
demand for upgrading and refurbishing as well as for new facilities. In the
developing nations of Asia and South America, the major growth in demand is for
greenfield projects to provide secure sources of clean water and to ensure the
safe treatment of industrial wastewater. In 1993, Waste Management
International established, in connection with Wessex, one of the United
Kingdom's leading water companies, a new central organization to jointly
develop activities in this sector outside of England and Wales. Waste
Management International believes it is well equipped to take advantage of
these opportunities, particularly in conjunction with the design, construction
and operating expertise of WTI and Rust.
REGULATION
While in general the Company's environmental services businesses have
benefited substantially from increased governmental regulation, the
environmental services industry itself has become subject to extensive and
evolving regulation by federal, state, local and foreign authorities. In
particular, the regulatory process requires firms in the Company's industries
to obtain and retain numerous governmental permits to conduct various aspects
of their operations, any of which may be subject to revocation, modification or
denial. As a result of governmental policies and attitudes relating to the
industries, which are subject to reassessment and change, the Company believes
that its ability to obtain applicable permits from governmental authorities on
a timely basis, and to retain such permits, could be impaired. The Company is
not in a position at the present time to assess the extent of the impact of
such potential changes in governmental policies and attitudes on the permitting
processes, but it could be significant. In particular, adverse decisions by
governmental authorities on permit applications submitted by the Company may
result in abandonment of projects, premature closure of facilities or
restriction of operations, which could have a material adverse effect on the
Company's earnings for one or more fiscal quarters or years.
Federal, state, local and foreign governments have also from time to time
proposed or adopted other types of laws, regulations or initiatives with
respect to the environmental services industry. Included among them are laws,
regulations and initiatives to ban or restrict the international, interstate or
intrastate shipment of wastes, impose higher taxes on out-of-state waste
shipments than in-state shipments, reclassify certain categories of hazardous
wastes as non-hazardous and regulate disposal facilities as public utilities.
Certain state and local governments have promulgated "flow control"
regulations, which attempt to require that all waste generated within the state
or local jurisdiction must go to certain disposal sites. The United States
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Congress has from time to time considered legislation that would enable or
facilitate such bans, restrictions, taxes and regulations. Due to the
complexity of regulation of the industry and to public pressure, implementation
of existing or future laws, regulations or initiatives by different levels of
government may be inconsistent and difficult to foresee. The Company makes a
continuing effort to anticipate regulatory, political and legal developments
that might affect operations but is not always able to do so. The Company
cannot predict the extent to which any legislation or regulation that may be
enacted or enforced in the future may affect its operations. Such matters could
have a material adverse impact on the Company's financial condition or earnings
for one or more fiscal quarters or years.
In addition to environmental laws and regulations, federal government
contractors, including the Company, are subject to extensive regulation under
the Federal Acquisition Regulation and numerous statutes which deal with the
accuracy of cost and pricing information furnished to the government, the
allowability of costs charged to the government, the conditions under which
contracts may be modified or terminated, and other similar matters. Various
aspects of the Company's operations are subject to audit by agencies of the
federal government in connection with its performance of work under such
contracts as well as its submission of bids or proposals to the government.
Failure to comply with contract provisions or other applicable requirements may
result in termination of the contract, the imposition of civil and criminal
penalties against the Company, or the suspension or debarment of all or a part
of the Company from federal government work, which could have a material
adverse impact upon the Company's financial condition or earnings for one or
more fiscal quarters or years. Among the reasons for debarment are violations
of various statutes, including those related to employment practices, the
protection of the environment, the accuracy of records and the recording of
costs. Some state and local governments have similar suspension and debarment
laws or regulations.
Because of heightened public awareness of environmental issues, companies in
the environmental service business, including the Company, may in the normal
course of their business be expected periodically to become subject to judicial
and administrative proceedings. Governmental agencies may seek to impose fines
on the Company or revoke, deny renewal of, or modify the Company's operating
permits or licenses. The Company is also subject to actions brought by private
parties or special interest groups in connection with the permitting or
licensing of its operations, alleging violations of such permits and licenses,
or other matters. In addition, increasing governmental scrutiny of the
environmental compliance records of the Company, CWM, WTI, Rust, Waste
Management International or their affiliates could cause a private or public
entity seeking environmental services to disqualify the Company from competing
for one or more projects, on the grounds that these records display inadequate
attention to environmental compliance.
Solid Waste
Operating permits are generally required at the state and local level for
landfills, transfer stations and collection vehicles. Operating permits need to
be renewed periodically and may be subject to revocation, modification, denial
or non-renewal for various reasons, including failure of the Company to satisfy
regulatory concerns. With respect to solid waste collection, regulation takes
such forms as licensing of collection vehicles, truck safety requirements,
vehicular weight limitations and, in certain localities, limitations on rates,
area, time and frequency of collection. With respect to solid waste disposal,
regulation covers various matters, including landfill location and design,
groundwater monitoring, gas control, liquid runoff and rodent, pest, litter and
traffic control. Zoning and land use requirements and limitations are
encountered in the solid waste collection, transfer, resource recovery and
disposal phases of the Company's business. In almost all cases the Company is
required to obtain conditional use permits or zoning law changes in order to
develop transfer station, resource recovery or disposal facilities. In
addition, the Company's disposal facilities are subject to water pollution laws
and regulations. Air and noise pollution laws and regulations may also affect
the Company's operations. Governmental authorities have the power to enforce
compliance with these various laws and regulations and violators are subject to
injunctions, fines and revocation of permits. Private individuals may also have
the right to sue to enforce compliance. Safety standards under the Occupational
Safety and Health Act ("OSHA") are also applicable.
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In September 1991, the EPA promulgated rules pursuant to RCRA amendments
adopted in 1984 which will serve as minimum requirements for land disposal of
municipal wastes. States seeking delegation of EPA's authority to regulate the
local disposal of municipal waste programs were required to adopt rules that
meet the minimum federal requirements by October 1993. The federal regulations
require many states to adopt more stringent requirements than previously
applied to the siting, construction, operation and closure of municipal waste
landfill facilities. Failure by states to adopt more stringent minimum
requirements resulted in the imposition of such requirements by law in October
1993 as to all but the smallest landfills. States without delegation of
authority to administer their programs in lieu of the federal programs under
the new requirements may not issue permits for new facilities or for the
expansion of existing facilities in certain circumstances in certain areas. In
addition, the failure of states to receive delegation of authority to
administer programs may increase costs to meet inconsistent federal and state
laws applicable to the same facility. The Company does not believe that the
adoption of the more stringent minimum requirements will have a material
adverse effect on the Company's operations. See also "RCRA" and "Superfund"
below for additional regulatory information.
Hazardous Waste
CWM is required to obtain federal, state, local and foreign governmental
permits for its chemical waste treatment (including resource recovery), storage
and disposal facilities. Such permits are difficult to obtain, and in most
instances extensive geological studies, tests and public hearings are required
before permits may be issued. CWM's chemical waste treatment, storage and
disposal facilities are also subject to siting, zoning and land use
restrictions, as well as to regulations (including certain requirements
pursuant to federal statutes) which may govern operating procedures and water
and air pollution, among other matters. In particular, CWM's operations in the
United States are subject to the Safe Drinking Water Act (which regulates deep
well injection), TSCA (pursuant to which the EPA has promulgated regulations
concerning the disposal of PCBs), the Clean Water Act (which regulates the
discharge of pollutants into surface waters and sewers by municipal, industrial
and other sources) and the Clean Air Act (which regulates emissions into the
air of certain potentially harmful substances). In its transportation
operations, CWM is subject to the jurisdiction of the Interstate Commerce
Commission and regulated by the DOT and by regulatory agencies in each state.
Employee safety and health standards under OSHA are also applicable.
Of CWM's chemical waste treatment, resource recovery or disposal facilities
in the United States, all but three have been issued permits under RCRA. Such
facilities without RCRA permits continue to have interim status. Final permits
are to be issued jointly by authorized states, subject to EPA oversight, and by
the EPA. The regulations governing issuance of permits contain detailed
standards for hazardous waste facilities on matters such as waste analysis,
security, inspections, training, preparedness and prevention, emergency
procedures, reporting and recordkeeping. Once issued, a final permit has a
maximum fixed term of 10 years, and such permits for land disposal facilities
are required to be reviewed five years from the date of issuance. The issuing
agency (either the EPA or an authorized state) may review or modify a permit at
any time during its term.
The Company believes that CWM maintains each of its operating treatment,
storage or disposal facilities in substantial compliance with the applicable
requirements promulgated pursuant to RCRA, and CWM expects that each facility
with interim status ultimately can qualify to be issued a RCRA permit. It is
possible, however, that the issuance of a permit could be made conditional upon
the initiation or completion of modifications or corrective actions at
facilities, which might involve substantial additional capital expenditures on
the part of CWM. Although the Company is informed that CWM anticipates the
reauthorization of each permit at the end of its term if the facility's
operations are in compliance with applicable requirements, there can be no
assurance that such will be the case.
The radioactive waste services of CWM are also subject to extensive
governmental regulation. Due to the extensive geological and hydrological
testing and environmental data required, and the complex political
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environment, it is difficult to obtain permits for radioactive waste disposal
facilities. Various phases of CWM's low-level radioactive waste management
services are regulated by various state agencies, the NRC and the DOT.
Regulations applicable to CWM's operations include those dealing with
packaging, handling, labeling and routing of radioactive materials, and
prescribe detailed safety and equipment standards and requirements for
training, quality control and insurance, among other matters. Employee safety
and health standards under OSHA are also applicable.
See also "RCRA" and "Superfund" below for additional regulatory information.
Engineering, Construction, Industrial and Related Services
RCRA, state law analogues, TSCA and other environmental statutes and
regulations impose strict operational requirements on the performance of
certain aspects of hazardous substances remedial work. These requirements
specify complex methods for identification, storage, treatment and disposal of
wastes generated during a project. Failure to meet these requirements could
result in termination of contracts, substantial fines and other penalties. In
addition, when Rust's remedial activities at any site involve the treatment,
storage or disposal of hazardous waste, it must adhere to the permitting and
substantive requirements of these regulations. The cost and complexity of
permit or license applications for remedial work can be considerable;
frequently, such applications must undergo significant and time-consuming
redrafting before being deemed complete by the regulatory agency. Furthermore,
Rust may not receive the necessary permits at the end of this application
process, for any of a variety of reasons such as perceived compliance problems,
the permitting authority's judgment that the application, even if complete,
fails to meet technical or regulatory requirements and community opposition to
the project. Any of these reasons can also cause significant delays in the
issuance of necessary permits. It is also possible that the liability imposed
by Superfund could, under certain limited factual circumstances, apply to
activities of Rust. See also "RCRA" and "Superfund" below for additional
regulatory information.
The practice of engineering and architecture is regulated by state statutes.
All states require architects and engineers to be registered by their
respective state registration boards as a condition to offering or rendering
professional services. Many states also require companies offering or rendering
professional services, such as Rust, to obtain certificates of authority.
Rust's businesses are also subject to OSHA and to DOT regulations concerning
the transportation of hazardous materials.
Trash-to-Energy, Water Treatment, Air Quality and Related Services
WTI's business activities are subject to environmental regulation under
federal, state and local laws and regulations, including the Clean Air Act, the
Clean Water Act and RCRA. The Company believes that WTI's business is conducted
in an environmentally responsible manner in material compliance with applicable
laws and regulations. The Company does not anticipate that WTI's maintaining
compliance with current requirements will result in any material decrease in
earnings. There can be no assurance, however, that such requirements will not
change so as to require significant additional expenditures. In particular,
pursuant to the Clean Air Act Amendments of 1990 it is probable that the air
pollution control systems at certain trash-to-energy projects owned or operated
by WTI's subsidiaries will be required to be modified by the end of the decade
to comply with the more stringent regulations promulgated thereunder. Although
the expenditures related to such modifications, if required, will likely be
significant, they are not expected to have a material adverse effect on WTI's
liquidity or results of operations. While WTI frequently obtains the right to
pass on to the long-term contract users of its facilities increased capital and
operating costs resulting from changes in law, there can be no assurance that
in such event WTI would be able to recover, for each project, all such
increased costs from its customers. Moreover, it is possible that future
developments, such as increasingly strict requirements of environmental laws,
and enforcement policies thereunder, could affect the manner in which WTI
operates its projects and conducts its business, including the handling,
processing or disposal of the wastes, by-products and residues generated
thereby. The Clean Air Act Amendments of 1990 specifically
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prohibit the EPA from regulating ash generated from trash-to-energy facilities
as a hazardous waste under RCRA for a two-year period following enactment.
Whether or not such ash may be regulated as a hazardous waste under RCRA has
been the subject of conflicting court decisions. Although WTI does not
anticipate that regulation of such ash, if and when it occurs, will adversely
affect WTI in any material manner, any such development could require
significant additional expenditures to achieve compliance with such
requirements or policies. There can be no assurance that in such event WTI
would be able to recover all such costs from its customers.
WTI's businesses are also subject to the provisions of various energy-related
laws and regulations, including the Public Utility Regulatory Policies Act of
1978 ("PURPA"). The ability of WTI's trash-to-energy and small power production
facilities to sell power to electric utilities on advantageous terms and
conditions and to avoid burdensome public utility regulation depends, in part,
upon the continuance in effect of PURPA, which generally exempts WTI from state
and federal regulatory control over electricity prices charged by, and the
finances of, WTI and its energy-producing subsidiaries. While most of WTI's
existing projects sell electricity pursuant to long-term contracts or rate
orders, which WTI believes would not be affected by the repeal or modification
of PURPA, the future growth of WTI's trash-to-energy and other small power
facilities business and the legal status of its existing projects could be
materially and adversely affected if the various benefits of PURPA were
repealed or substantially reduced.
RCRA
Pursuant to RCRA, the EPA has established and administers a comprehensive,
"cradle-to-grave" system for the management of a wide range of industrial by-
products and residues identified as "hazardous" wastes. States that have
adopted hazardous waste management programs with standards at least as
stringent as those promulgated by the EPA may be authorized by the EPA to
administer their programs in lieu of RCRA.
Under RCRA and federal transportation laws, a transporter must deliver
hazardous waste in accordance with a manifest prepared by the generator of the
waste and only to a treatment, storage or disposal facility having a RCRA
permit or interim status under RCRA. Every facility that treats or disposes of
hazardous wastes must obtain a RCRA permit from the EPA or an authorized state
and must comply with certain operating standards. The RCRA permitting process
involves applying for interim status and also for a final permit. Under RCRA
and the implementing regulations, facilities which have obtained interim status
are allowed to continue operating by complying with certain minimum standards
pending issuance of a permit.
Amendments to RCRA enacted in 1984 expanded its scope by, among other things,
adding certain wastes to the hazardous category and providing for the
regulation of hazardous wastes generated in quantities greater than 100
kilograms per month. Additionally, the amendments impose restrictions on land
disposal of certain hazardous wastes and prescribe more stringent standards for
hazardous waste land disposal facilities. Land disposal of certain types of
untreated hazardous wastes was banned except where the EPA determined that land
disposal of such wastes and treatment residuals should be permitted. In
accordance with the amendments, the disposal of liquids in hazardous waste land
disposal facilities was prohibited in 1985.
The EPA currently is considering a number of fundamental changes to its
regulations under RCRA that could facilitate exemptions from hazardous waste
management requirements, including policies and regulations that could
implement the following changes: redefine the criteria for determining whether
wastes are hazardous; prescribe treatment levels which, if achieved, could
render wastes non-hazardous; encourage further recycling and waste
minimization; reduce treatment requirements for certain wastes to encourage
alternatives to incineration; establish new operating standards for combustion
technologies; and indirectly encourage on-site remediation.
In addition to the foregoing provisions, RCRA regulations require the Company
to demonstrate financial responsibility for possible bodily injury and property
damage to third parties caused by both sudden and
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nonsudden accidental occurrences. See "Insurance." Also, RCRA regulations
require WMI and CWM to provide financial assurance that funds will be available
when needed for closure and post-closure care at their waste treatment, storage
and disposal facilities, the costs of which could be substantial. Such
regulations allow the financial assurance requirements to be satisfied by
various means, including letters of credit, surety bonds, trust funds, a
financial (net worth) test and a guarantee by a parent corporation.
SUPERFUND
Superfund provides for EPA-coordinated response and removal actions to
releases of hazardous substances into the environment, and authorizes the
federal government either to clean up facilities at which hazardous substances
have created actual or potential environmental hazards or to order persons
responsible for the situation to do so. Superfund assigns liability for these
response and other related costs to parties involved in the generation,
transfer and disposal of such hazardous substances. Superfund has been
interpreted as creating strict, joint and several liability for costs of
removal and remediation, other necessary response costs and damage to natural
resources. Liability extends to owners and operators of waste disposal
facilities (and waste transportation vehicles) from which a release occurs,
persons who owned or operated such facilities at the time the hazardous
substances were disposed, persons who arranged for disposal or treatment of a
hazardous substance at or transportation of a hazardous substance to such a
facility, and waste transporters who selected such facilities for treatment or
disposal of hazardous substances, as well as to generators of such substances.
Liability may be trebled if the responsible party fails to perform a removal or
remedial action ordered under the law. For additional information concerning
potential Superfund liability, see "Legal Proceedings" below.
Superfund created a revolving fund to be used by the federal government to
pay for the cleanup efforts. In late 1990, federal Superfund spending through
the end of the government's 1994 fiscal year was authorized to a maximum of
$5.1 billion.
The U. S. Congress is expected to reauthorize and revise the Superfund
statute in 1994 or 1995. In addition to possible changes in the statute's
funding mechanisms and provisions for allocating cleanup responsibility, it is
possible that Congress also will fundamentally alter the statute's provisions
governing the selection of appropriate site cleanup remedies. For example,
Congress is expected to consider whether to continue Superfund's current
reliance on stringent technology standards issued under other statutes (such as
RCRA) to govern removal and treatment of remediation wastes or to adopt new
approaches such as national or site-specific risk based standards. This and
other potential policy changes could significantly affect the stringency and
extent of site remediation, the types of remediation techniques that will be
employed, and the degree to which permitted hazardous waste management
facilities will be used for remediation wastes.
International Waste Management and Related Services
Waste Management International's operations are subject to the general
business and environmental laws and regulations of the countries where the
services are performed and, in Europe, to European Union regulations and
directives. In general, environmental laws and regulations and enforcement
thereof outside the United States are not as stringent as in the United States,
with certain exceptions. However, such laws and regulations vary markedly from
country to country and are evolving rapidly. The treaty on European Union,
signed in December 1991, came into force in November 1993 and will in the
future further strengthen the development and enforcement of European Union
environmental law. Increased privatization of solid waste services, increased
public awareness of the potentially harmful effects of unregulated disposal of
hazardous wastes on the environment and human health, and technological
advances have led to extensive and evolving national and European Union
regulation of waste management activities. While Waste Management International
believes that its waste management and related services operations are in
substantial compliance with applicable laws and regulations, Waste Management
International is unable to predict the course of development of such laws and
regulations.
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COMPETITION
Waste Management is the largest provider of comprehensive solid waste
management services in North America and CWM is a leading provider of
comprehensive hazardous waste management services in the United States.
Waste Management encounters intense competition, primarily in the pricing and
rendering of services, from various sources in all phases of its solid waste
management and related operations. In the solid waste collection phase,
competition is encountered, for the most part, from national, regional and
local collection companies as well as from municipalities and counties (which,
through use of tax revenues, may be able to provide such services at lower
direct charges to the customer than can Waste Management) and some large
commercial and industrial companies which handle their own waste collection. In
the solid waste transfer, resource recovery and disposal phases of its
operations, competition is encountered primarily from municipalities, counties,
local governmental agencies, other national or regional waste management
companies and certain large corporations not primarily involved in the solid
waste management services business. The Company also encounters intense
competition in pricing and rendering of services in its medical and infectious
waste management, portable fencing and power pole, portable sanitation and
street sweeping and parking lot cleaning services businesses from numerous
large and small competitors.
CWM encounters competition from a number of sources, including several
national or regional firms specializing primarily in chemical waste management,
local waste management concerns and, to a much greater extent, generators of
chemical wastes which seek to reduce the volume of or otherwise process and
dispose of such wastes themselves. The basis of competition is primarily
technical expertise and the price, quality and reliability of service.
The service industries in which Rust competes are highly competitive. Rust
encounters intense competition, primarily in pricing, quality and reliability
of services from various sources in all aspects of its engineering,
construction, environmental and infrastructure consulting, hazardous substance
remediation, and on-site industrial and related services operations.
WTI experiences substantial competition in all aspects of its business. It
competes with a large number of firms, both nationally and internationally some
of which may have substantially greater financial and technical resources than
WTI. The principal competitive factors with respect to its project development
activities include technological performance, service, technical know-how,
price and performance guarantees. Competing for selection as a project
developer may require commitment of substantial resources over a long period of
time, without any certainty of being ultimately selected. Competition for
attractive development opportunities is intense, as there are a number of
competitors in the industry interested in such opportunities.
Waste Management International encounters intense competition from local
companies and governmental entities in particular countries, as well as from
major international companies. Pricing, quality of service and type of
equipment utilized are the primary methods of competition for collection
services, and proximity of suitable treatment or disposal facilities, technical
expertise, price, quality and reliability of services are the primary methods
of competition for treatment and disposal services.
Pursuant to the First Amended and Restated International Business
Opportunities Agreement, dated January 1, 1993, by and among CWM, WTI, Waste
Management International, Inc., Waste Management International, Rust and the
Company (as amended, the "IBOA"), which agreement is also a successor to
certain prior agreements among certain of the parties, each of CWM, WTI and
Rust has agreed that, until the later of July 1, 2000 or the date on which the
Company ceases to beneficially own a majority of the outstanding voting equity
interests of such subsidiary or ceases to beneficially own a majority of the
outstanding voting equity interests of Waste Management International, and in
each case no longer has an option to obtain such ownership, such subsidiary
will not engage in waste management services; design,
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development, construction and operation of trash-to-energy facilities;
collection, storage, processing, treatment or disposal of hazardous wastes
(including hazardous substance remediation services); or design, engineering
and construction (where the customer is seeking third-party operation), and
maintenance of water, wastewater and sewage treatment facilities (including
facilities for treating hazardous waste streams whether or not the customer is
seeking third-party operation) outside North America (i.e., the United States,
its territories and possessions, Canada and Mexico) (the "Waste Management
International Allocated Activities"), except with respect to licensing of
technology and minor interests by CWM, WTI or Rust in publicly held entities.
WTI may engage outside North America in the design, engineering, construction,
operation and maintenance of chimneys and air pollution control facilities (the
"WTI Allocated Activities"). Rust may engage outside North America in
activities relating to (i) architectural services, (ii) engineering and design
services and procurement, construction and construction management services
(including marine construction and dredging), other than those relating to the
Waste Management International Allocated Activities and the WTI Allocated
Activities, (iii) scaffolding services, (iv) demolition and dismantling
services, (v) environmental consulting services, and (vi) industrial facility
and power plant maintenance services (the "Rust Allocated Activities"). Each of
CWM, WTI, Rust and the Company have agreed that, until the later of (x) July 1,
2000 or (y) the date on which the Company ceases to beneficially own a majority
of the outstanding voting equity interests of Waste Management International
(including ordinary shares owned by Rust and WTI, if majority-owned by the
Company), and no longer has an option to obtain such ownership, it and its
affiliated entities shall not participate outside North America in the Waste
Management International Allocated Activities except through Waste Management
International. Sales by the Company of recyclables, licensing of technology,
minor investments by the Company in publicly held entities and the interest of
the Company in an existing city cleaning business in Venezuela are also
permitted activities of the Company outside North America. Waste Management
International has agreed that for the same time periods as are applicable to
CWM, WTI, Rust and the Company above in this paragraph, it will not engage in
North America in the type of activities included within the Waste Management
International Allocated Activities outside North America, in the WTI Allocated
Activities or the Rust Allocated Activities. Businesses or assets acquired by a
party to the IBOA which are in the domain of another party thereto (according
to the allocations described above) must be offered for sale to the other party
at fair market value.
By agreement among the parties, the Company is responsible for determining
business allocations among CWM, WTI, Rust, the Company and Waste Management
International which are not controlled by the allocations set forth in the
preceding paragraph. In this connection CWM, WTI, Rust, the Company and Waste
Management International have agreed that in order to minimize the potential
for conflicts of interest among various subsidiaries under the common control
of the Company and for so long as the Company shall have beneficial ownership
of a majority of the outstanding voting equity interests of such subsidiary (or
an option to obtain such ownership), the Company has the right to direct future
business opportunities to the Company or the Company-controlled subsidiary
which, in the Company's reasonable and good faith judgment, has the most
experience and expertise in that line of business, provided that the Company
may not allocate a business opportunity to a particular subsidiary if such
business opportunity would involve the subsidiary in a breach of its agreement
not to compete as described in the immediately preceding paragraph.
Opportunities outside North America relating to the provision of future waste
management services are generally to be allocated to Waste Management
International, except that opportunities outside North America relating to the
WTI Allocated Activities and the Rust Allocated Activities are generally to be
allocated to WTI and Rust, as the case may be. Environmental opportunities
other than waste management activities are to be allocated in the Company's
good faith judgment. No party is liable for consequential damages, except for
lost profits, for any breach of the IBOA. Until such time as the Company ceases
to control a majority of the shares of CWM, the Company has also agreed not to
engage directly or indirectly in the storage, processing, treatment or disposal
of certain radioactive or hazardous waste in the United States, Canada or
Mexico, except through CWM.
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INSURANCE
While the Company believes it operates professionally and prudently, its
business exposes it to risks such as the potential for harmful substances
escaping into the environment and causing damage or injuries, the cost of which
could be substantial. The Company currently maintains liability insurance
coverage for occurrences under various environmental impairment, primary
casualty and excess liability insurance policies. The Company believes that its
policies comply with applicable environmental regulatory financial
responsibility requirements.
The market for non-sudden environmental impairment liability insurance is
still constricted, with only a few insurance companies currently offering
coverage and with coverage entailing limited amounts with restrictive terms and
high premium costs. Consequently, the Company has determined to maintain
coverage under only one non-sudden environmental impairment liability insurance
policy. Under that policy, losses paid by the carrier must be reimbursed by the
Company over a period of years, subject to a requirement that the Company make
advance deposits with the carrier for such purpose. A claim under such an
insurance policy which does not transfer risk, if successful and of sufficient
magnitude, could have a material adverse effect on the Company's business,
results of operations or financial condition.
EMPLOYEES
WMX Technologies and its subsidiaries employ a total of approximately 72,600
persons in their worldwide operations. Of this number, the Company employs
approximately 32,100 persons in its WMI solid waste and related services
operations, including approximately 24,000 persons employed in solid waste
collection, transfer, resource recovery and disposal activities, and
approximately 8,100 persons employed in managerial, executive, sales, clerical,
data processing and other solid waste and related activities. At December 31,
1993, approximately 5,260 of Waste Management's employees in its solid waste
and related services operations were represented by various labor unions under
collective bargaining agreements expiring on various dates through 1998.
Agreements covering an aggregate of approximately 1,670 employees expire in
1994. Waste Management has not experienced a significant work stoppage and
considers its employee relations to be good.
CWM (excluding Rust) employed approximately 4,400 persons at December 31,
1993. Approximately 200 of CWM's employees were employed as managers or
executives, approximately 3,200 were employed in hazardous waste
transportation, treatment, resource recovery and disposal activities (including
approximately 900 performing technical, analytical or engineering services),
and approximately 1,000 were employed in sales, clerical, data processing and
other hazardous waste-related activities. At December 31, 1993, approximately
250 of CWM's employees were represented by various labor unions under
collective bargaining agreements expiring on various dates through 1997. Five
collective bargaining agreements will expire in 1994. CWM has not experienced a
significant work stoppage and considers its employee relations to be good.
At December 31, 1993, WTI had approximately 3,800 full-time employees. WTI
considers relations with its employees to be good.
Rust employed approximately 15,900 persons at December 31, 1993, of whom
approximately 5,100 provided technical or engineering services (excluding craft
personnel hired on a temporary basis). At that date, approximately 2,100 of
Rust's employees were represented by various labor unions. Rust believes its
employee relations are good.
As of December 31, 1993, Waste Management International employed
approximately 16,400 persons. Of this number, Waste Management International
employed approximately 12,900 persons in its collection service operations,
1,400 in its treatment and disposal services operations and 2,100 in
administrative functions. At December 31, 1993, approximately 12,700 Waste
Management International employees were represented by labor unions. Waste
Management International considers its employee relations to be good.
26
<PAGE>
ACQUISITIONS AND DISPOSITIONS
Since August 1971, the Company has acquired a number of companies, and
certain assets of other companies, engaged in various phases of the
environmental services industry. See Note 2 to WMX Technologies' Consolidated
Financial Statements filed as an exhibit to this report and incorporated herein
by reference. The amounts and types of consideration generally have been
determined by direct negotiations with the owners of the businesses acquired.
In most instances, the owners of the acquired businesses were few in number,
and often certain key former owners have continued to operate the businesses
following acquisition by the Company. During 1993, the Company continued to
acquire additional operations in the environmental services industry.
Acquisitions have historically contributed significantly to the Company's
growth. The Company's growth prospects may be affected by the availability of
additional business acquisitions at reasonable prices and the Company's ability
to finance such acquisitions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" filed as an exhibit to this
report and incorporated herein by reference for a discussion of capital
expenditures by the Company, including acquisitions. Other well-capitalized
companies also compete intensely for businesses available to be acquired. The
Company is continually engaged in the process of considering and negotiating
additional acquisitions, although with many of the Company's strategic goals
achieved, the emphasis will be on businesses that promise above-average returns
or meet remaining strategic objectives. Some future acquisitions could be
material. The acquisition of businesses also entails certain inherent risks.
Although the Company generally performs an investigation of businesses to be
acquired, because of the nature of the liabilities involved in these
businesses, there can be liabilities which will not become known until after
the transactions are consummated. The Company seeks to minimize the impact of
these liabilities and expenditures by obtaining indemnities and warranties from
the seller which may be supported by deferring payment of a portion of the
purchase price. These indemnities and warranties, if obtained, may not,
however, fully cover the liabilities due to their limited scope, amount, or
duration, the financial limitations of the indemnitor or warrantor, or other
reasons. Businesses purchased may require expenditures to make up for deferred
maintenance and to improve the quality or quantity of assets acquired. In
certain cases, the Company establishes reserves in respect of the anticipated
costs of remediation for acquired sites.
In September 1988, CWM acquired newly issued common and convertible preferred
shares from Brand equivalent to a 49% ownership interest in Brand. Most of the
consideration was paid in cash, with the balance consisting of CWM's asbestos
abatement businesses which were transferred to Brand and CWM's agreement, among
other matters, to furnish certain services to Brand. In October 1990, CWM
exercised options increasing its ownership of Brand capital stock to a majority
interest. In January 1993, CWM contributed its Brand shares to Rust.
In September 1990, the Company engaged in a merger transaction whereby WTI
became a majority-owned subsidiary of the Company. In the transaction, each
share of WTI common stock (other than those held by the Company, WTI or their
respective affiliated companies) was converted into the right to receive .574
of a share of WTI common stock and .469 of a share of common stock of the
Company, which resulted in the Company's issuance of a total of 14,855,341
shares of its common stock. Prior to the merger, the Company owned
approximately 22% of the outstanding shares of common stock of WTI. The
Company's 22% interest in WTI was acquired as the result of the Company's
contribution of certain businesses to a subsidiary of WTI in 1988.
As part of the merger, the Company, WTI and CWM also entered into certain
ancillary agreements. The principal elements of the ancillary agreements
include (i) an agreement of the Company to use all reasonable efforts to assist
WTI in obtaining and maintaining a rating of "A" or better for WTI's debt
securities (and in connection with which the Company may be required to
purchase up to $200 million of WTI subordinated debt or preferred stock), (ii)
an option permitting WTI to purchase the Company's medical waste disposal
business at a 15% discount from the fair market value of such business, (iii)
provisions for the
27
<PAGE>
joint development by WTI and the Company of recycling services and technology,
and including the grant to WTI of royalty-free licenses to certain recycling
and gas-recovery technology owned by the Company, and (iv) an agreement (as
amended and restated effective as of July 1, 1993) (A) pursuant to which the
Company will make various services available to WTI, WTI will lend its excess
cash to the Company, the Company will fund WTI's capital requirements (subject
to a limit of the amount of funds loaned by WTI to the Company plus, until
September 1995, $100 million) and the Company will assist WTI in procuring
insurance and surety bonds, (B) which provided for the allocation of business
opportunities among the Company and its majority-owned subsidiaries (such
provisions having been superseded by the arrangements described above under
"Competition") and (C) which includes an option enabling the Company to
maintain its majority ownership of WTI.
The ancillary agreements also included certain options whereby in August
1991, CWM and WTI each acquired a 15% fully diluted equity interest in newly
issued common stock of a predecessor of Waste Management International, which
predecessor then held substantially all of the waste management and related
services business interests of the Company outside North America. CWM financed
the purchase by issuing a 10-year, convertible subordinated debenture to the
Company in the amount of $168,974,000 with interest payable at 6% per year. In
December 1992, the debenture was converted in accordance with its terms into
8,046,380 shares of CWM common stock. WTI acquired the Waste Management
International shares by issuing approximately 12,000,000 shares (as adjusted
for a two-for-one stock split) of its common stock to the Company. Each of the
interests acquired by CWM and WTI in the option exercise was converted into a
15% equity interest in Waste Management International in 1991, which became 12%
as a result of the Waste Management International initial public offering in
April 1992. In January 1993, CWM contributed its interest in Waste Management
International to Rust.
In May 1993, pursuant to an agreement (the "NSC Purchase Agreement") by and
among NSC, NSC's wholly owned subsidiary, NSC Industrial Services Corp., Brand,
WMX and OHM Corporation, previously an approximately 70% stockholder of NSC,
Brand transferred its asbestos abatement business to NSC in exchange for an
approximately 41% interest in NSC Corporation and two industrial services
companies of NSC. Rust assumed the rights and obligations of Brand under the
NSC Purchase Agreement upon consummation of the merger of Brand into a
subsidiary of Rust.
In August 1993, Rust acquired EnClean, Inc., an industrial and environmental
services business providing hydroblasting, industrial vacuuming, chemical
cleaning, separation technology, site remediation and catalyst handling
services. The acquisition expanded Rust's presence primarily in the Gulf Coast
area and added chemical cleaning and catalyst handling to the services already
provided by Rust.
In September 1993, CWM announced plans to, among other things, eliminate
approximately 1,200 positions by year-end 1994, consolidate operations in its
treatment and land disposal group, restructure its sales and service regions,
sell selected service centers in marginal service lines and geographies, seek
joint venture partners and review other strategic alternatives for its Port
Arthur, Texas incinerator and centralize additional functions. CWM is
restructuring its hazardous waste management and related services operations on
the assumption that future base business revenue growth, if any, will not keep
pace with the recovery in the general economy, and plans not to make
investments which are primarily supported by non-recurring (event business)
volumes.
In January 1994, the Company agreed to sell its Modulaire(R) mobile office
services business to the GE Modular Space Division of Transport International
Pool, Inc., a subsidiary of General Electric Co. The sale is expected to be
closed prior to the end of the second quarter of 1994.
The Company has also acquired numerous companies and interests in companies
internationally through Waste Management International or its predecessors. See
"International Waste Management and Related Services."
28
<PAGE>
ITEM 2. PROPERTIES.
The principal property and equipment of the Company consists of land
(primarily disposal sites), buildings and waste treatment or processing
facilities (other than disposal sites), and vehicles and equipment, which as of
December 31, 1993 represented approximately 18%, 6% and 30%, respectively, of
the Company's and its subsidiaries' total consolidated assets. The Company
believes that its vehicles, equipment and operating properties are well
maintained and suitable for its current operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" filed
as an exhibit to this report and incorporated by reference herein for a
discussion of property and equipment expenditures by the Company for the last
three years and the capital budget for 1994. The Company's subsidiaries lease
numerous office and operating facilities throughout the world. For the year
ended December 31, 1993, aggregate annual rental payments on real estate leased
by the Company and its subsidiaries approximated $117,296,000.
The principal fixed assets of Waste Management consist of vehicles and
equipment (which include, among other items, approximately 18,200 collection
and transfer vehicles, 1,453,000 containers and 18,000 stationary compactors in
the United States and Canada). WMI owns or leases real property in most states
and Canadian provinces in which it is doing business. At December 31, 1993, 105
solid waste disposal facilities, aggregating approximately 65,700 total acres
including approximately 15,745 permitted acres, were owned by Waste Management
in the United States and Canada and 28 facilities, aggregating approximately
11,640 total acres including approximately 6,530 permitted acres, were leased
from parties not affiliated with Waste Management under leases expiring from
1994 to 2085.
The principal fixed assets of CWM (excluding Rust) consist of its network of
transportation, treatment, storage and disposal facilities and its fleet of
transportation vehicles. At December 31, 1993, CWM owned or leased in the
United States a total of 20 treatment, resource recovery or disposal
facilities. At such date, CWM's chemical waste facilities with secure land
disposal sites aggregated approximately 10,500 acres, including approximately
3,050 permitted acres. CWM believes that, at current rates of utilization, the
permitted and other potentially useable acres included in such total have
sufficient capacity to enable CWM to conduct secure land disposal operations
for more than 30 years, although not all of CWM's facilities have such
capacity.
The principal property and equipment of Rust consist of Rust's headquarters
buildings, vehicles, equipment and scaffolding inventory, which as of December
31, 1993 represented approximately 20% of Rust's total consolidated assets. The
principal fixed assets utilized in Rust's operations at December 31, 1993
consisted of vehicles and equipment (which included, among other items, air
monitoring equipment, decontamination trailers, mobile laboratory trailers,
vacuum trucks, office trailers, pieces of heavy excavating machinery, mobile
waste treatment units and scaffolding inventory). Rust believes that its
vehicles, equipment and scaffolding inventory are well maintained and suitable
for its current operations. Rust leases numerous office, warehouse and
equipment and scaffolding yard facilities in various locations throughout the
United States.
WTI currently owns, operates or leases 14 trash-to-energy facilities, five
cogeneration and small power production facilities, two coal handling
facilities, three biosolids drying and pelletizing facilities and various other
manufacturing, office and warehouse facilities. Facilities leased or operated
(but not owned) by WTI are under leases or agreements having terms expiring
from the years 1996 to 2011, subject to renewal options in certain cases.
The principal property and equipment of Waste Management International
consist of land (primarily disposal sites), buildings and other waste treatment
or processing facilities (other than disposal sites), vehicles and equipment.
Waste Management International believes that its vehicles, equipment, and
operating properties are well maintained and suitable for its current
operations, although, due to its many recent acquisitions, vehicles are not
standardized. The principal fixed assets utilized in Waste Management
International's collection services operations at December 31, 1993 consisted
of vehicles and equipment
29
<PAGE>
(which included, among other items, approximately 6,300 collection,
transportation, and other route vehicles and approximately 280 pieces of
landfill and other heavy equipment), approximately 270,000 containers, and
approximately 2,300 stationary compactors. In addition, Waste Management
International owns approximately 690 pieces of hazardous waste equipment,
consisting predominately of containers and collection vehicles. The principal
fixed assets utilized in Waste Management International's treatment and
disposal services operations at December 31, 1993 consisted of (i) 16 solid
waste landfills, aggregating approximately 1,200 total acres including
approximately 1,060 permitted acres, owned by Waste Management International,
(ii) 14 solid waste landfills, aggregating approximately 890 total acres
including approximately 860 permitted acres, leased from parties not affiliated
with Waste Management International under leases expiring from 1995 to 2015,
(iii) seven secure hazardous waste landfills owned or leased by Waste
Management International aggregating approximately 830 acres including
approximately 520 permitted acres, and (iv) owned, operated or leased trash-to-
energy facilities, other treatment, storage, or disposal facilities and various
other manufacturing, office and warehouse facilities. Waste Management
International also operates 20 other solid waste landfills.
ITEM 3. LEGAL PROCEEDINGS.
Some of the businesses in which the Company is engaged are intrinsically
connected with the protection of the environment and the potential for the
unintended or unpermitted discharge of materials into the environment. In the
ordinary course of conducting its business activities, the Company becomes
involved in judicial and administrative proceedings involving governmental
authorities at the federal, state and local level including, in certain
instances, proceedings instituted by citizens or local governmental authorities
seeking to overturn governmental action where governmental officials or
agencies are named as defendants together with the Company or one or more of
its subsidiaries, or both. In the majority of the situations where proceedings
are commenced by governmental authorities, the matters involved relate to
alleged technical violations of licenses or permits pursuant to which the
Company operates or is seeking to operate or laws or regulations to which its
operations are subject or are the result of different interpretations of the
applicable requirements. From time to time the Company pays fines or penalties
in environmental proceedings relating primarily to waste treatment, storage or
disposal facilities. At December 31, 1993, CWM and its subsidiaries (other than
Rust) were involved in three governmental proceedings (other than those
described below) and WTI and Rust were each involved in one such proceeding
where it is believed that sanctions involved in each instance may exceed
$100,000.
On November 12, 1993, the Supreme Court of the State of Louisiana denied
CWM's application for a writ of review of an opinion of the Louisiana First
Circuit Court of Appeal affirming an administrative order that imposed a fine
of approximately $262,000 for certain incidents occurring in 1987 and 1988 at
CWM's Lake Charles, Louisiana facility, including alleged unpermitted storage
of waste and alleged failures to mark the accumulation date on two containers,
to remove or overpack waste from a container in poor condition, to keep
hazardous waste containers closed, to properly design and operate the
containment system in a fuels loading and unloading area, to provide an
adequate number of warning signs, and to take certain actions to prevent fires.
On December 30, 1993, a subsidiary of CWM entered into a stipulation of
settlement with the New Jersey Department of Environmental Protection and
Energy in connection with certain matters occurring in 1992 and 1993 at CWM's
Newark, New Jersey facility, including alleged failures to follow required
procedures for rejecting hazardous wastes, to comply with certain requirements
for managing incompatible wastes and to prepare a manifest before transporting
certain waste, and the alleged shipment of waste to an unauthorized facility.
CWM's subsidiary agreed to pay civil penalties aggregating approximately
$218,000. In settling these matters, CWM's subsidiary did not admit violations
of law.
The Company or certain of its subsidiaries have been identified as
potentially responsible parties in a number of governmental investigations and
actions relating to waste disposal facilities which may be subject to remedial
action under Superfund. The majority of these proceedings are based on
allegations that certain
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<PAGE>
subsidiaries of the Company (or their predecessors) transported hazardous
substances to the facilities in question, often prior to acquisition of such
subsidiaries by the Company. Such 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 cleanup, which costs could be substantial.
As of December 31, 1993, the Company or its subsidiaries had been notified
that they are potentially responsible parties in connection with 104 locations
listed on the Superfund National Priority List ("NPL"). Of the 104 NPL sites at
which claims have been made against the Company, 19 are sites which the Company
has come to own over time. All of the NPL sites owned by the Company were
initially sited by others as land disposal facilities. At each of the 19 owned
facilities, the Company is working in conjunction with the government to
characterize or to remediate identified site problems. In addition, at these 19
facilities the Company has either agreed with other legally liable parties on
an arrangement for sharing the costs of remediation or is pursuing resolution
of an allocation formula. The 85 NPL sites at which claims have been made
against the Company and which are not owned by the Company are at different
procedural stages under Superfund. At some, the Company's liability is well
defined as a consequence of a governmental decision as to the appropriate
remedy and an agreement among liable parties as to the share each will pay for
implementing that remedy. At others, where no remedy has been selected or the
liable parties have been unable to agree on an appropriate allocation, the
Company's future costs are substantially uncertain.
The Company periodically reviews its role, if any, with respect to each such
location, giving consideration to the nature of the Company's alleged
connection to the location (e.g., owner, operator, transporter or generator),
the extent of the Company's alleged connection to the location (e.g., amount
and nature of waste hauled to the location, number of years of site operation
by the Company or other relevant factors), the accuracy and strength of
evidence connecting the Company to the location, the number, connection and
financial ability of other named and unnamed potentially responsible parties at
the location, and the nature and estimated cost of the likely remedy. Where the
Company concludes that it is probable that a liability has been incurred, a
provision is made in the Company's financial statements for the Company's best
estimate of the liability based on management's judgment and experience,
information available from regulatory agencies and the number, financial
resources and relative degree of responsibility of other potentially
responsible parties who are jointly and severally liable for remediation of a
specific site, as well as the typical allocation of costs among such parties.
If a range of possible outcomes is estimated and no amount within the range
appears to be a better estimate than any other, then the Company provides for
the minimum amount within the range, in accordance with generally accepted
accounting principles. Sites subject to state action under state laws similar
to the federal Superfund statute are treated by the Company in the same way as
NPL sites.
The Company's estimates are subsequently revised, as deemed necessary, as
additional information becomes available. While the Company does not anticipate
that the amount of any such revisions will have a material adverse effect on
the Company's operations or financial condition, the measurement of
environmental liabilities is inherently difficult and the possibility remains
that technological, regulatory or enforcement developments, the results of
environmental studies, or other factors could materially alter this expectation
at any time. Such matters could have a material adverse impact on financial
condition or earnings for one or more fiscal quarters or years.
The Company and certain of its subsidiaries are currently involved in civil
litigation and governmental proceedings relating to the conduct of their
business. While the outcome of any particular lawsuit or governmental
investigation cannot be predicted with certainty, the Company believes that
these matters will not have a material adverse effect on its results of
operations or financial condition.
On September 17, 1993, H. Peter Kriendler, a stockholder of CWM, filed suit
in the U. S. District Court for the Northern District of Illinois, Eastern
Division, alleging that CWM had violated Section 10(b) of the
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Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Two similar suits
were filed in that Court on September 30, 1993 and October 13, 1993, and on
October 29, 1993 the Court and the parties agreed to consolidate them with the
first action. These lawsuits allege that CWM violated federal securities laws
by engaging in misrepresentations of, or failures to disclose, material
information concerning primarily (i) alleged overvaluation of certain of CWM's
assets, principally its incineration facilities, (ii) alleged overstatement of
CWM's earnings for 1992 and the first quarter of 1993 due to failure to write
down the value of such assets and other matters and (iii) the alleged existence
of certain adverse hazardous waste treatment and disposal industry conditions
and trends. The lawsuits also allege, among other things, liability on the part
of the Company for the above-described alleged violations. The lawsuits seek to
represent a class of persons consisting of all purchasers of CWM's common stock
during the period of February 4, 1993 through September 3, 1993 and to recover
compensation for damages allegedly suffered by such class due to the above-
described alleged violations. The Company and CWM believe that they have
meritorious defenses to these lawsuits and intend to contest the lawsuits
vigorously.
In an examination of WTI's federal income tax returns for the period 1986-
1988, the Internal Revenue Service (the "IRS") in January 1993 proposed a
significant adjustment related to the 1988 sale of a former subsidiary, which
WTI disputed. Under a tax sharing agreement between WTI and a predecessor of
WTI, WTI is indemnified by the predecessor for the full amount of any liability
assessed with regard to this issue by the IRS. In March 1994, WTI and the IRS
filed a Stipulation of Settlement with the U.S. Tax Court which resolved the
dispute. WTI believes that the predecessor will be able to meet its
indemnification obligation in respect of the agreed tax liability.
The Company has brought suit against a substantial number of insurance
carriers in an action entitled Waste Management, Inc. et al. v. The Admiral
Insurance Company, et al. pending in the Superior court in Hudson County, New
Jersey. In this action the Company is seeking a declaratory judgment that
environmental liabilities asserted against the Company or its subsidiaries, or
that may be asserted in the future, are covered by insurance policies purchased
by the Company or its subsidiaries. The Company is also seeking to recover
defense costs and other damages incurred as a result of the assertion of
environmental liabilities against the Company or its subsidiaries for events
occurring over at least the last 25 years at approximately 130 sites and the
defendant insurance carriers' denial of coverage of such liabilities. The
defendants have denied liability to the Company and have asserted various
defenses, including that environmental liabilities of the type for which the
Company is seeking relief are not risks covered by the insurance policies in
question. The defendants have indicated that they intend to contest these
claims vigorously. Discovery is currently underway in this proceeding and is
expected to continue for several years. No trial date has been set. The Company
is unable at this time to predict the outcome of this proceeding. No amounts
have been recognized in the Company's financial statements for any potential
recoveries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to the Company's security holders during the fourth
quarter of 1993.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below are the names and ages of the Company's executive officers
(as defined by regulations of the Securities and Exchange Commission), the
positions they hold with the Company and summaries of their business
experience. Executive officers are elected by the Board of Directors and serve
at the discretion of the Board.
J. Steven Bergerson, age 51, has been Senior Vice President-Law and
Compliance, since August 1992. He has been a Vice President of the Company
since 1984 and was General Counsel of the Company from 1974 until August 1992.
Mr. Bergerson has been employed by the Company since 1973.
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Dean L. Buntrock, age 62, has been a director of the Company and has served
as Chairman of the Board and Chief Executive Officer of the Company since 1968.
From September 1980 to November 1984, he also served as President. Since May
1993, Mr. Buntrock has also been Chairman of the Board of CWM, a position he
previously held from 1986 to September 1991. Mr. Buntrock is also a director of
WTI, Rust, Waste Management International, Boston Chicken, Inc., Stone
Container Corporation and First Chicago Corporation.
Herbert A. Getz, age 38, has been a Vice President of the Company since May
1990 and General Counsel since August 1992. He has also been Secretary of the
Company since January 1988. He also served as Assistant General Counsel of the
Company from December 1985 until August 1992. Mr. Getz has also held the
offices of Vice President, General Counsel and Secretary at WMI from April 1989
until December 1993, and has been Vice President and Secretary of Rust since
January 1993. He served as Vice President, Secretary and General Counsel at WTI
from November 1990 until May 1993. He is a director of NSC. Mr. Getz commenced
employment with the Company in 1983.
Thomas C. Hau, age 58, has been a Vice President and the Controller and
Principal Accounting Officer of the Company since he commenced employment with
the Company in September 1990. From 1971 until his employment by the Company,
Mr. Hau was a partner of Arthur Andersen & Co.
James E. Koenig, age 46, has been a Senior Vice President of the Company
since May 1992, Treasurer of the Company since 1986 and its Chief Financial
Officer since 1989. Mr. Koenig first became a Vice President of the Company in
1986. From 1984 to 1986, Mr. Koenig was Staff Vice President and Assistant to
the Chief Financial Officer of the Company. Mr. Koenig has been employed by the
Company since 1977. Mr. Koenig also served as Vice President, Chief Financial
Officer and Treasurer of WTI from November 1990 to May 1993. He also serves as
a director of WTI, Waste Management International, Rust and CWM.
Phillip B. Rooney, age 49, has served as a director of the Company since 1981
and as its President and Chief Operating Officer since November 1984. Since
January 1994, he has also served as Chairman of the Board and Chief Executive
Officer of WMI. Mr. Rooney commenced employment with the Company in 1969 and
first became an officer of the Company in 1971. Since November 1990, he has
served as Chairman of the Board and Chief Executive Officer of WTI, and since
January 1993 he has served as Chairman of the Board of Rust. Mr. Rooney is also
a director of CWM, Waste Management International, Rust, WTI, Illinois Tool
Works, Inc., Caremark International Inc., Urban Shopping Centers, Inc., and
ServiceMaster Management Corporation, the general partner of ServiceMaster
Limited Partnership.
Donald A. Wallgren, age 52, has been Vice President and Chief Environmental
Officer of the Company since January 1994. From 1993 to January 1994, Mr.
Wallgren was Vice President--Environmental Management of the Company's former
corporate service subsidiary, WMX Technology and Services, Inc. He held the
same position at the Company from 1992 to 1993 and at WMI from 1989 to May
1990. From 1990 to 1992 he served as Vice President--Recycling, Development and
Environmental Management of WMI. Mr. Wallgren has been employed by the Company
since 1979.
33
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is traded on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "WMX." The following table sets forth
by quarter for the last two years the high and low sale prices of the Company's
common stock on the New York Stock Exchange Composite Tape as reported by the
Dow Jones News Retrieval Service, and the dividends declared by the Board of
Directors of the Company on its common stock.
<TABLE>
<CAPTION>
1992 QUARTERLY SUMMARY
---------------------- CASH DIVIDENDS
HIGH LOW DECLARED PER SHARE
---------- ---------- ------------------
<S> <C> <C> <C>
First......................... 46 5/8 37 3/4 $.11
Second........................ 41 1/4 32 7/8 .13
Third......................... 36 7/8 32 .13
Fourth........................ 41 5/8 34 .13
<CAPTION>
1993 QUARTERLY SUMMARY
---------------------- CASH DIVIDENDS
HIGH LOW DECLARED PER SHARE
---------- ---------- ------------------
<S> <C> <C> <C>
First......................... 40 1/4 33 5/8 $.13
Second........................ 36 3/8 29 1/4 .15
Third......................... 33 1/8 29 1/2 .15
Fourth........................ 30 5/8 23 .15
</TABLE>
At March 23, 1994, the Company had approximately 71,250 stockholders of
record.
Due in part to the high level of public awareness of the business in which
the Company is engaged, regulatory enforcement proceedings or other unfavorable
developments involving the Company's operations or facilities, including those
in the ordinary course of business, may be expected to engender substantial
publicity which could from time to time have an adverse impact upon the market
price for the Company's common stock.
In September 1990, WMX Technologies announced its authorization to purchase
up to 25,000,000 shares of its common stock from time to time over the
following 24-month period in the open market or in privately negotiated
transactions. This program has been extended through September 1996. During
1992, the Company purchased approximately 7.6 million shares of its common
stock under this program. During 1993, the Company purchased approximately 8.4
million shares of its common stock under this program.
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ITEM 6. SELECTED FINANCIAL DATA.
The following selected consolidated financial information for each of the
five years in the period ended December 31, 1993 is derived from the Company's
Consolidated Financial Statements, which have been audited by Arthur Andersen &
Co., independent public accountants, whose report thereon is incorporated by
reference in this report. The information below should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Company's Consolidated Financial Statements, and the
related Notes, and the other financial information which are filed as exhibits
to this report and incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------------
1989/1/ 1990/2/ 1991/3/ 1992/4/ 1993/5/
---------- ----------- ----------- ----------- -----------
(000'S OMITTED, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Revenue................. $4,413,742 $ 6,034,406 $ 7,550,914 $ 8,661,027 $ 9,135,577
Net income.............. $ 562,135 $ 684,762 $ 606,323 $ 850,036 $ 452,776
Earnings per common and
common equivalent
share.................. $ 1.22 $ 1.44 $ 1.23 $ 1.72 $ .93
Total assets............ $6,405,209 $10,518,243 $12,572,310 $14,114,180 $16,264,476
Long-term debt, less
portion payable within
one year............... $1,503,817 $ 3,139,623 $ 3,782,973 $ 4,312,511 $ 6,145,584
Dividends per share..... $ .29 $ .35 $ .42 $ .50 $ .58
</TABLE>
- --------
/1/The results for 1989 include a non-taxable gain of $70,826,000 resulting
from the public offering of 5,000,000 shares of common stock of CWM in
October 1989 and special charges of $112,000,000 before tax.
/2/The results for 1990 include an extraordinary charge of $24,547,000, or $.05
per share, representing the Company's percentage interest in the writedown
by WTI of WTI's investment in the stock of The Henley Group, Inc. and Henley
Properties Inc. to market value.
/3/The results for 1991 include a special charge of $296,000,000, before tax
and minority interest, primarily to reflect then current estimates of the
environmental remediation liabilities at waste disposal sites previously
used or operated by the Company and its subsidiaries or their predecessors.
See Note 11 to the Company's Consolidated Financial Statements.
/4/The results for 1992 include a non-taxable gain of $240,000,000 (before
minority interest) resulting from the initial public offering of Waste
Management International; special charges of $219,900,000, before tax and
minority interest, primarily related to writedowns of the Company's medical
waste business, CWM incinerators in Chicago, Illinois and Tijuana, Mexico
and Brand's investment in its asbestos abatement business and certain
restructuring costs incurred by Brand and CWM related to the formation of
Rust, and one time after-tax charges aggregating $71,139,000, or $.14 per
share, related to the cumulative effect of adopting two new accounting
standards. See Notes 1, 9 and 11 to the Company's Consolidated Financial
Statements.
/5/The results for 1993 include a non-taxable gain of $15,109,000 relating to
the issuance of shares by Rust, as well as the Company's share of a special
asset revaluation and restructuring charge of $550,000,000, before tax and
minority interest, recorded by CWM related primarily to a revaluation of
CWM's thermal treatment business, and a provision of approximately
$14,000,000 to adjust deferred income taxes resulting from the 1993 tax law
change. See Notes 1 and 11 to the Company's Consolidated Financial
Statements.
/6/Certain amounts have been restated to conform to 1993 classifications.
Reference is made to the ratio of earnings to fixed charges for each of the
years ended December 31, 1989, 1990, 1991, 1992 and 1993, as set forth in
Exhibit 12 to this report, which ratios are incorporated herein by reference.
35
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations set forth on pages 32 to 39 of the
Company's 1993 Annual Report to Stockholders (the "Annual Report"), which
discussion is filed as an exhibit to this report and incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
(a) The Consolidated Balance Sheets as of December 31, 1992 and 1993,
Consolidated Statements of Income, Cash Flows and Stockholders' Equity for each
of the years in the three-year period ended December 31, 1993 and Notes to
Consolidated Financial Statements set forth on pages 40 to 58 of the Annual
Report are filed as an exhibit to this report and incorporated herein by
reference.
(b) Selected Quarterly Financial Data (Unaudited) is set forth in Note 13 to
the Consolidated Financial Statements referred to in Item 8(a) above and
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Reference is made to the information set forth in the 12 paragraphs under the
caption "Election of Directors" beginning on page 1 of the Company's proxy
statement for the annual meeting scheduled for May 13, 1994 (the "Proxy
Statement") for a description of the directors of the Company, which paragraphs
are incorporated herein by reference. Information concerning the executive
officers of the Company is set forth above under "Executive Officers of the
Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
Reference is made to the information set forth under the caption
"Compensation" on pages 11 through 19 of the Proxy Statement, which
information, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Reference is made to the information, including the tables and the footnotes
thereto, set forth under the caption "Securities Ownership of Management" on
pages 4 through 10 of the Proxy Statement, for certain information respecting
ownership of common stock of the Company, CWM, WTI, Waste Management
International and Rust, which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Reference is made to the first paragraph on page 18 and the paragraph under
the caption "Compensation Committee Interlocks and Insider Participation" on
page 19 of the Proxy Statement and the information set forth under the caption
"Certain Transactions" beginning on page 25 of the Proxy Statement for certain
information with respect to certain relationships and related transactions,
which paragraphs are incorporated herein by reference.
36
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Financial Statements, Schedules and Exhibits.
I. Financial Statements--filed as an exhibit hereto and incorporated
herein by reference.
(i) Consolidated Statements of Income for the years ended December
31, 1991, 1992 and 1993;
(ii) Consolidated Balance Sheets--December 31, 1992 and 1993;
(iii) Consolidated Statements of Cash Flows for the years ended
December 31, 1991, 1992 and 1993;
(iv) Consolidated Statements of Stockholders' Equity for the three
years ended December 31, 1993;
(v) Notes to Consolidated Financial Statements; and
(vi) Report of Independent Public Accountants.
II. Schedules.
(i) Schedule II--Amounts Receivable from Officers and Employees;
(ii) Schedule V--Property and Equipment;
(iii) Schedule VI--Accumulated Depreciation and Amortization of
Property and Equipment;
(iv) Schedule VIII--Reserves;
(v) Schedule IX--Short-term Borrowings;
(vi) Schedule X--Supplementary Income Statement Information; and
(vii) Report of Independent Public Accountants on Schedules.
All other schedules have been omitted since the required information
is not significant or is included in the financial statements or the
notes thereto, or is not applicable.
III. Exhibits.
The exhibits to this report are listed in the Exhibit Index elsewhere
herein. Included in the exhibits listed therein are the following
exhibits which constitute management contracts or compensatory plans or
arrangements/1/:
<TABLE>
<C> <S>
(i) 1981 Stock Option Plan for Non-Employee Directors of registrant
(Exhibit 19 to registrant's report on Form 10-Q for the quarter
ended June 30, 1982)
(ii) WMX Technologies, Inc. 1982 Stock Option Plan, as amended to
March 11, 1988 (Exhibit 10.3 to registrant's 1988 annual report
on Form 10-K)
(iii) Deferred Director's Fee Plan, as amended (Exhibit 10.3 to
registrant's 1990 annual report on Form 10-K)
(iv) Director's Phantom Stock Plan (Exhibit 10.9 to registrant's 1984
annual report on Form 10-K)
(v) Employment Agreement, dated as of September 1, 1986, by and
between the registrant and Phillip B. Rooney (Exhibit 19.4 to
registrant's report on Form 10-Q for the quarter ended September
30, 1986)
(vi) WMX Technologies, Inc. Corporate Incentive Bonus Plan (filed
with this report)
(vii) WMX Technologies, Inc. Supplemental Executive Retirement Plan,
as amended and restated May 14, 1993 (Exhibit 10 to the
registrant's report on Form 8-K dated July 15, 1993)
(viii) Chemical Waste Management Inc. 1992 Stock Option Plan (Exhibit
10.31 to Chemical Waste Management, Inc.'s 1991 annual report on
Form 10-K)
</TABLE>
37
<PAGE>
<TABLE>
<C> <S>
(ix) Supplemental Retirement Benefit Agreement, dated as of January
1, 1989, by and between the registrant and Peter H. Huizenga
(Exhibit 10.16 to Post-Effective Amendment No. 2 to registrant's
registration statement on Form S-1, Registration No. 33-13839)
(x) Chemical Waste Management, Inc. 1986 Stock Option Plan, as
amended (Exhibit 10.1 to Chemical Waste Management, Inc.'s 1989
annual report on Form 10-K)
(xi) Chemical Waste Management, Inc. 1986 Stock Option Plan for Non-
Employee Directors (Exhibit 10.2 to Chemical Waste Management,
Inc.'s registration statement on Form S-1, Registration No. 33-
8509)
(xii) Chemical Waste Management, Inc. Deferred Director's Fee Plan
(Exhibit 10.5 to Chemical Waste Management, Inc.'s registration
statement on Form S-1, Registration No. 33-8509)
(xiii) WMX Technologies, Inc. Director's Charitable Endowment Plan
(Exhibit 10.20 to registrant's 1989 annual report on Form 10-K)
(xiv) Supplemental Retirement Benefit Agreement dated as of January 1,
1991 by and between registrant and Donald F. Flynn (Exhibit
10.17 to registrant's 1990 annual report on Form 10-K)
(xv) Consulting Agreement dated as of January 1, 1991 by and between
registrant and Donald F. Flynn (Exhibit 10.18 to registrant's
1990 annual report on Form 10-K)
(xvi) Restricted Unit Plan for Non-Employee Directors of Wheelabrator
Technologies Inc. as amended through June 10, 1991 (Exhibit
19.03 to the report on Form 10-Q of Wheelabrator Technologies
Inc. for the quarter ended June 30, 1991)
(xvii) 1988 Stock Plan for Executive Employees of Wheelabrator
Technologies Inc. and its subsidiaries (the "WTI 1988 Stock
Plan") (Exhibit 28.1 to Amendment No. 1 to the registration
statement of Wheelabrator Technologies Inc. on Form S-8,
Registration No. 33-31523)
(xviii) Amendments dated as of September 7, 1990 to the WTI 1988 Stock
Plan (Exhibit 19.02 to the 1990 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xix) Amendment dated as of November 1, 1990 to the WTI 1988 Stock
Plan (Exhibit 19.04 to the 1990 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xx) 1986 Stock Plan for Executive Employees of Wheelabrator
Technologies Inc. and its subsidiaries (the "WTI 1986 Stock
Plan") (Exhibit 28.2 to Amendment No. 1 to the registration
statement of Wheelabrator Technologies Inc. on Form S-8,
Registration No. 33-31523)
(xxi) Amendment dated as of November 1, 1990 to the WTI 1986 Stock
Plan (Exhibit 19.03 to the 1990 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xxii) Description of consulting agreement between registrant and
Alexander B. Trowbridge (Exhibit 10.22 to registrant's 1989
annual report on Form 10-K)
(xxiii) WMX Technologies, Inc. 1992 Stock Option Plan (Exhibit 10.31 to
registrant's registration statement on Form S-1, Registration
No. 33-44849)
(xxiv) WMX Technologies, Inc. 1992 Stock Option Plan for Non-Employee
Directors (Exhibit 10.32 to registrant's registration statement
on Form S-1, Registration No.
33-44849)
(xxv) Wheelabrator Technologies Inc. 1992 Stock Option Plan (Exhibit
10.45 to the 1991 annual report on Form 10-K of Wheelabrator
Technologies Inc.)
(xxvi) Deferred Director's Fee Plan of Wheelabrator Technologies Inc.
adopted June 10, 1991 (Exhibit 19.02 to the quarterly report on
Form 10-Q of Wheelabrator Technologies Inc. for the quarter
ended June 30, 1991)
</TABLE>
38
<PAGE>
<TABLE>
<C> <S>
(xxvii) Waste Management International plc Share Option Plan (Exhibit
10.1 to the registration statement on Form F-1 of Waste
Management International plc, Registration No. 33-46511)
(xxviii) Amendment dated as of December 6, 1991 to the WTI 1986 Stock
Plan (Exhibit 19.01 to the 1991 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xxix) Amendment dated as of December 6, 1991 to the WTI 1988 Stock
Plan (Exhibit 19.02 to the 1991 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xxx) Amendment dated as of December 6, 1991 to the Restricted Unit
Plan for Non-Employee Directors of Wheelabrator Technologies
Inc. (Exhibit 19.05 to the 1991 annual report on Form 10-K of
Wheelabrator Technologies Inc.)
(xxxi) Rust International Inc. 1993 Stock Option Plan (Exhibit 10.41 to
the registrant's 1992 annual report on Form 10-K)
(xxxii) Rust International Inc. 1993 Stock Option Plan for Non-Employee
Directors (Exhibit 10.42 to the registrant's 1992 annual report
on Form 10-K)
(xxxiii) Amendment No. 1 dated as of May 29, 1992 to Consulting Agreement
dated as of January 1, 1991 by and between registrant and Donald
F. Flynn (Exhibit 19.1 to the registrant's 1992 annual report on
Form 10-K)
(xxxiv) WMX Technologies, Inc. Long Term Incentive Plan (as amended and
restated as of January 27, 1994) (filed with this report)
</TABLE>
- --------
/1/In the case of reference to documents filed under the Securities Exchange
Act of 1934, the registrant's file number under that Act is 1-7327, Chemical
Waste Management, Inc.'s file number under that Act is 1-9253 and Wheelabrator
Technologies Inc.'s file number under that Act is 0-14246.
(b) Reports on Form 8-K.
The registrant did not file any reports on Form 8-K during the fiscal
quarter ended December 31, 1993.
39
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE II--AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTIONS
BALANCE ---------------------- BALANCE
BEGINNING AMOUNTS AMOUNTS END OF
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF YEAR
- -------------- --------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
1991
E. Bacom................. $ -- $118 $ -- $-- $ 118
S. Bergerson............. -- 545 -- -- 545
R. Broglio............... 913 17 (930) -- --
H. Buirkle............... 2,100 19 (2,119) -- --
D. Buntrock.............. 1,619 492 (1,619) -- 492
D. Coleman............... 147 -- (147) -- --
T. Collins............... 146 -- (146) -- --
J. Dempsey............... 1,240 -- (1,240) -- --
M. Dingman............... 8,316 121 (8,437) -- --
C. Dirkes................ 680 28 (360) -- 348
E. Falkman............... 194 -- (2) -- 192
M. Farrell............... 361 5 (366) -- --
P. Feira................. 798 25 (484) -- 339
D. Flynn................. 440 406 (440) -- 406
H. Gershowitz............ 110 -- (110) -- --
R. Gilbert............... 1,458 35 (1,493) -- --
J. Girsch................ 208 -- (208) -- --
J. Groenboom............. -- 103 -- -- 103
F. Habeishi.............. 457 3 (460) -- --
E. Hardin................ 146 1 (147) -- --
J. Heeney................ 195 4 (199) -- --
R. Houpt................. 100 -- (100) -- --
W. Hulligan.............. 372 -- (372) -- --
C. Jasperse.............. -- 181 -- -- 181
R. Jeffrey............... -- 129 -- -- 129
R. Jericho............... 151 -- (151) -- --
W. Katzman............... 337 2 (339) -- --
J. Kehoe................. 1,712 79 (1,157) -- 634
W. Keightley............. 570 13 (583) -- --
B. Keough................ 1,142 21 (1,163) -- --
A. Leibowitz............. 101 1 (102) -- --
P. Meister............... 3,692 145 (2,007) -- 1,830
P. Montrone.............. 5,544 92 (5,636) -- --
F. Moore................. -- 109 -- -- 109
D. Neel.................. 457 2 (459) -- --
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
40
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE II--AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
(CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTIONS
BALANCE --------------------- BALANCE
BEGINNING AMOUNTS AMOUNTS END OF
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF YEAR
- -------------- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
1991 (CONTINUED)
T. Noel..................... $ -- $ 281 $ -- $ -- $ 281
R. Patel.................... 434 28 (300) -- 162
W. Poor..................... 685 3 (688) -- --
D. Price.................... -- 159 -- -- 159
J. Range.................... 190 -- (190) -- --
J. Rohrer................... 457 14 (271) -- 200
D. Rozendale................ 1,142 5 (1,147) -- --
R. Russell.................. 1,188 10 (1,198) -- --
J. Sanford.................. 685 47 -- -- 732
D. Schmitt.................. 1,142 15 (1,157) -- --
G. Seegers.................. 173 -- (173) -- --
S. Shapiro.................. 913 12 (925) -- --
L. Shipp.................... 457 2 (459) -- --
S. Sillars.................. 247 7 (175) -- 79
K. Skiles................... 123 -- (123) -- --
M. Sylvers.................. 457 15 (271) -- 201
B. Tobecksen................ 133 54 -- -- 187
P. Vardy.................... 121 -- (121) -- --
R. Whitaker................. 570 33 (603) -- --
N. Wichowski................ -- 110 -- -- 110
J. Wood..................... 131 2 (133) -- --
T. Wright................... -- 780 -- -- 780
====== ====== ======= ==== =========
1992
E. Bacom.................... $ 118 $ 117 $ (118) $ -- $ 117
P. Banfield................. -- 167 -- -- 167
S. Bergerson................ 545 -- (545) -- --
B. Biggs.................... -- 210 -- -- 210
T. Blackman................. -- 1,945 -- -- 1,945
D. Buntrock................. 492 -- (492) -- --
S. Clark.................... -- 100 -- -- 100
J. Dempsey.................. -- 1,228 -- -- 1,228
C. Dirkes................... 348 -- (348) -- --
E. Falkman.................. 192 -- (3) -- 189
P. Feira.................... 339 -- (339) -- --
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
41
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE II--AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
(CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTIONS
BALANCE --------------------- BALANCE
BEGINNING AMOUNTS AMOUNTS END OF
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF YEAR
- -------------- --------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
1992 (CONTINUED)
D. Flynn...................... $ 406 $248 $ (406) $ -- $ 248
J. Girsch..................... -- 282 -- -- 282
J. Groenboom.................. 103 -- (103) -- --
J. Haden...................... -- 207 -- -- 207
W. Hulligan................... -- 132 -- -- 132
J. Jack....................... -- 151 -- -- 151
C. Jasperse................... 181 -- (181) -- --
R. Jeffrey.................... 129 -- (129) -- --
W. Katzman.................... -- 400 -- -- 400
J. Kehoe...................... 634 7 (641) -- --
D. Kelly...................... -- 100 -- -- 100
J. Koenig..................... -- 310 -- -- 310
R. Kraai...................... -- 180 -- -- 180
J. Kruszka.................... -- 163 (1) -- 162
P. Meister.................... 1,830 40 (1,870) -- --
F. Moore...................... 109 -- (109) -- --
T. Noel....................... 281 -- (281) -- --
T. O'Brien.................... -- 300 -- -- 300
R. Patel...................... 162 5 (167) -- --
R. Paul....................... -- 169 -- -- 169
D. Price...................... 159 -- (159) -- --
J. Rohrer..................... 200 -- (200) -- --
J. Rooney..................... -- 238 (38) -- 200
J. Sanford.................... 732 12 (744) -- --
F. Schroeder.................. -- 313 -- -- 313
S. Sillars.................... 79 -- (79) -- --
R. Stevenson.................. -- 120 -- -- 120
S. Storelli................... -- 270 (85) -- 185
M. Sylvers.................... 201 -- (201) -- --
B. Tobecksen.................. 187 -- (187) -- --
N. Wichowski.................. 110 -- (110) -- --
D. Wilt....................... -- 100 -- -- 100
T. Wright..................... 780 -- (780) -- --
====== ===== ======= ==== ======
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
42
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE II--AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
(CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTIONS
BALANCE --------------------- BALANCE
BEGINNING AMOUNTS AMOUNTS END OF
NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF YEAR
- -------------- --------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
1993
E. Bacom...................... $ 117 $ 55 $ (117) $ -- $ 55
P. Banfield................... 167 167 (167) -- 167
B. Biggs...................... 210 187 (182) -- 215
T. Blackman................... 1,945 -- (515) -- 1,430
S. Clark...................... 100 -- -- -- 100
J. Dempsey.................... 1,228 310 (1,538) -- --
E. Falkman.................... 189 -- (189) -- --
D. Flynn...................... 248 177 (248) -- 177
J. Girsch..................... 282 -- (282) -- --
J. Haden...................... 207 -- (207) -- --
W. Hulligan................... 132 -- (132) -- --
J. Jack....................... 151 -- (151) -- --
W. Katzman.................... 400 130 (24) -- 506
D. Kelly...................... 100 3 (103) -- --
J. Koenig..................... 310 -- (310) -- --
R. Kraai...................... 180 -- (40) -- 140
J. Kruszka.................... 162 -- (1) -- 161
M. Magee...................... -- 170 (20) -- 150
T. O'Brien.................... 300 -- -- -- 300
R. Paul....................... 169 -- (169) -- --
W. Reichert................... -- 160 -- -- 160
J. Rooney..................... 200 -- -- -- 200
D. Schoenberger............... -- 206 (37) -- 169
F. Schroeder.................. 313 -- -- -- 313
R. Stevenson.................. 120 -- (12) -- 108
S. Storelli................... 185 20 -- -- 205
D. Wilt....................... 100 -- -- -- 100
====== ====== ======= ==== ======
</TABLE>
The Company's general policy is not to advance monies to officers or employees
except for relocation or temporary situations. It has, however, adopted a
policy of making interest-free loans available to employees whose exercise of
non-qualified stock options results in ordinary income to them in excess of
$10,000 at the time of such exercise. These receivables are due on or before
April 15 of the year following such exercise (extended to November 30, 1992 for
loans made by the Company and CWM in 1991 and to May 31, 1993 for loans made by
the Company and CWM in 1992). Sufficient shares are withheld from the shares
issued to the debtor to fully secure the loan at the time it is made. In
addition, certain receivables included above were owed by officers or employees
of acquired companies at the time of acquisition by the Company.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
43
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE V--PROPERTY AND EQUIPMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE ASSETS OF
BEGINNING PURCHASED ADDITIONS RETIREMENTS BALANCE END OF
OF YEAR COMPANIES AT COST OR SALES OTHER YEAR
----------- --------- ---------- ----------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1991
Land, primarily disposal
sites.................. $ 1,943,112 $ 63,526 $ 501,084 $ (28,498) $ (466) $2,478,758
Buildings............... 780,905 15,498 156,522 (17,508) 23,782 959,199
Vehicles and equipment.. 4,660,466 83,169 752,015 (144,933) (28,052) 5,322,665
Leasehold improvements.. 69,944 2,845 12,159 (3,603) 4,736 86,081
----------- -------- ---------- --------- -------- ----------
Total.................. $ 7,454,427 $165,038 $1,421,780 $(194,542) $ -- $8,846,703
=========== ======== ========== ========= ======== ==========
<CAPTION>
EFFECT OF
BALANCE ASSETS OF FOREIGN
BEGINNING PURCHASED ADDITIONS RETIREMENTS CURRENCY BALANCE END
OF YEAR COMPANIES AT COST OR SALES OTHER TRANSLATION(A) OF YEAR
----------- --------- ---------- ----------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1992
Land, primarily disposal
sites.................. $ 2,478,758 $124,180 $ 515,309 $ (44,002) $ 3,335 $ (28,746) $ 3,048,834
Buildings............... 959,199 33,275 149,437 (18,490) 2,014 (23,608) 1,101,827
Vehicles and equipment.. 5,322,665 169,636 957,390 (205,469) (1,702) (101,198) 6,141,322
Leasehold improvements.. 86,081 3,439 10,529 (4,256) (3,647) (1,454) 90,692
----------- -------- ---------- --------- -------- ---------- -----------
Total.................. $ 8,846,703 $330,530 $1,632,665 $(272,217) $ -- $ (155,006) $10,382,675
=========== ======== ========== ========= ======== ========== ===========
1993
Land, primarily disposal
sites.................. $ 3,048,834 $129,047 $ 531,179 $ (70,746) $ 4,721 $ (17,623) $ 3,625,412
Buildings............... 1,101,827 46,907 115,835 (31,424) 4,728 (14,734) 1,223,139
Vehicles and equipment.. 6,141,322 259,727 1,047,288 (521,104) (7,140) (64,049) 6,856,044
Leasehold improvements.. 90,692 7,854 24,876 (19,651) (2,309) (1,200) 100,262
----------- -------- ---------- --------- -------- ---------- -----------
Total.................. $10,382,675 $443,535 $1,719,178 $(642,925) $ -- $ (97,606) $11,804,857
=========== ======== ========== ========= ======== ========== ===========
</TABLE>
(A) Effect of foreign currency translation not material in 1991.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
44
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE VI--ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND
EQUIPMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE PROVISION BALANCE
BEGINNING CHARGED RETIREMENTS END OF
OF YEAR TO INCOME OR SALES OTHER YEAR
---------- --------- ----------- -------- ---------------
1991
<S> <C> <C> <C> <C> <C> <C>
Landfill improvements... $ 338,098 $116,311 $ (8,968) $ (1,391) $ 444,050
Buildings............... 99,189 36,149 (12,754) 18,270 140,854
Vehicles and equipment.. 1,272,444 371,991 (97,287) (17,834) 1,529,314
Leasehold improvements.. 27,683 6,927 (2,555) 955 33,010
---------- -------- --------- -------- ----------
Total.................. $1,737,414 $531,378 $(121,564) $ -- $2,147,228
========== ======== ========= ======== ==========
<CAPTION>
EFFECT OF
BALANCE PROVISION FOREIGN BALANCE
BEGINNING CHARGED RETIREMENTS CURRENCY END OF
OF YEAR TO INCOME OR SALES OTHER TRANSLATION (A) YEAR
---------- --------- ----------- -------- --------------- ----------
1992
<S> <C> <C> <C> <C> <C> <C>
Landfill improvements... $ 444,050 $148,197 $ (2,845) $ 727 $ (5,914) $ 584,215
Buildings............... 140,854 47,378 (1,474) 6,708 (2,945) 190,521
Vehicles and equipment.. 1,529,314 432,578 (117,109) (5,354) (24,932) 1,814,497
Leasehold improvements.. 33,010 8,772 (3,474) (2,081) (988) 35,239
---------- -------- --------- -------- ---------- ----------
Total.................. $2,147,228 $636,925 $(124,902) $ -- $ (34,779) $2,624,472
========== ======== ========= ======== ========== ==========
1993
Landfill improvements... $ 584,215 $166,100 $ (11,726) $ 108 $ (4,007) $ 734,690
Buildings............... 190,521 54,521 (3,295) 1,025 (2,350) 240,422
Vehicles and equipment.. 1,814,497 471,274 (247,167) 125 (16,350) 2,022,379
Leasehold improvements.. 35,239 10,405 (5,947) (1,258) (532) 37,907
---------- -------- --------- -------- ---------- ----------
Total.................. $2,624,472 $702,300 $(268,135) $ -- $ (23,239) $3,035,398
========== ======== ========= ======== ========== ==========
</TABLE>
(A) Effect of foreign currency translation not material in 1991.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
45
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE VIII--RESERVES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECT OF
BALANCE CHARGED ACCOUNTS FOREIGN BALANCE
BEGINNING TO WRITTEN CURRENCY END OF
OF YEAR INCOME OFF OTHER (A) TRANSLATION (B) YEAR
--------- ------- -------- --------- --------------- -------
<S> <C> <C> <C> <C> <C> <C>
1991--Reserve for
doubtful accounts (C).. $39,366 $30,318 $(26,856) $6,323 $ -- $49,151
======= ======= ======== ====== ======= =======
1992--Reserve for
doubtful accounts (C).. $49,151 $31,195 $(24,080) $6,301 $(4,732) $57,835
======= ======= ======== ====== ======= =======
1993--Reserve for
doubtful accounts (C).. $57,835 $33,326 $(33,518) $7,646 $(1,970) $63,319
======= ======= ======== ====== ======= =======
</TABLE>
- --------
(A)Reserves of companies accounted for as purchases.
(B)Effect of foreign currency translation not material in 1991.
(C)Includes reserves for doubtful long-term notes receivable.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
46
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE IX--SHORT-TERM BORROWINGS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAXIMUM WEIGHTED
BALANCE WEIGHTED AMOUNT AVERAGE AMOUNT AVERAGE
END OF AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
YEAR INTEREST RATE DURING YEAR DURING YEAR (A) DURING YEAR (B)
---------- ------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
1991--Commercial Paper $ 470,447 5.72% $ 729,630 $ 598,055 6.81%
========== ==== ========== ========== ====
1992--Commercial Paper $ 837,733 3.72% $ 855,277 $ 625,833 4.27%
========== ==== ========== ========== ====
1993--Commercial Paper $1,376,197 3.36% $1,983,147 $1,436,289 3.41%
========== ==== ========== ========== ====
</TABLE>
- --------
(A) Average is computed using daily balances.
(B) Weighted average rate is computed by dividing interest expense applicable
to commercial paper by the weighted average amount outstanding during the
year.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
47
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL STATEMENT SCHEDULES
($000'S OMITTED)
SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
During 1991, 1992 and 1993 maintenance and repairs charged to costs and
expenses in the Consolidated Statements of Income were as follows:
<TABLE>
<CAPTION>
1991 1992 1993
-------- -------- --------
<S> <C> <C> <C>
Maintenance and repairs............................. $442,478 $513,444 $550,732
======== ======== ========
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
48
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To WMX Technologies, Inc.:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in the WMX Technologies, Inc.
(formerly Waste Management, Inc.) Annual Report to Stockholders for 1993 filed
as an exhibit to and incorporated by reference in this Form 10-K, and have
issued our report thereon dated February 16, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules included on pages 40 through 48 of this Form 10-K are the
responsibility of the Company's management and are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
February 16, 1994
49
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN OAK BROOK,
ILLINOIS ON THE 29TH DAY OF MARCH 1994.
WMX TECHNOLOGIES, INC.
/s/ Dean L. Buntrock,
By___________________________________
Dean L. Buntrock,
Chairman of the Board and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Dean L. Buntrock )
- ------------------------------------ )
Dean L. Buntrock Director, Chairman of the )
Board and Chief Executive )
Officer )
/s/ Jerry E. Dempsey )
- ------------------------------------ )
Jerry E. Dempsey Director )
/s/ Phillip B. Rooney )
- ------------------------------------ )
Phillip B. Rooney Director )
/s/ Donald F. Flynn )
- ------------------------------------ )
Donald F. Flynn Director )
/s/ Peter H. Huizenga )
- ------------------------------------ )
Peter H. Huizenga Director )
/s/ Peer Pedersen )
- ------------------------------------ )
Peer Pedersen Director )
/s/ James R. Peterson )
- ------------------------------------ )
James R. Peterson Director ) March 29, 1994
/s/ Alexander B. Trowbridge )
- ------------------------------------ )
Alexander B. Trowbridge Director )
/s/ Howard H. Baker, Jr. )
- ------------------------------------ )
Howard H. Baker, Jr. Director )
/s/ H. Jesse Arnelle )
- ------------------------------------ )
H. Jesse Arnelle Director )
/s/ Thomas C. Hau )
- ------------------------------------ )
Thomas C. Hau Vice President, Controller )
and Principal Accounting )
Officer )
/s/ James E. Koenig )
- ------------------------------------ )
James E. Koenig Senior Vice President, Chief )
Financial Officer, )
Treasurer and Principal )
Financial Officer )
</TABLE>
50
<PAGE>
WMX TECHNOLOGIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION*
------- ---------------------
<C> <S> <C>
1. Inapplicable
2. Inapplicable
3.1(a) Restated Certificate of Incorporation of registrant, as amended
as of May 24, 1985 (incorporated by reference to Exhibit 4.1 to
registrant's report on Form 10-Q for the quarter ended
June 30, 1985)
3.1(b) Certificate of Amendment of Restated Certificate of
Incorporation of registrant, recorded May 23, 1986 (incorporated
by reference to Exhibit 4(c) to registrant's registration
statement on Form S-8, Registration No. 33-6265)
3.1(c) Certificate of Designation of Preferred Stock of registrant,
filed January 30, 1987 (incorporated by reference to Exhibit
3.1(c) to registrant's 1986 annual report on Form 10-K)
3.1(d) Certificate of Amendment of Restated Certificate of
Incorporation of registrant, recorded May 15, 1987 (incorporated
by reference to Exhibit 4.5(d) to registrant's registration
statement on Form S-4, Registration No. 33-15518)
3.1(e) Certificate of Amendment of Restated Certificate of
Incorporation of registrant, filed May 19, 1989 (incorporated by
reference to Exhibit 3(e) to registrant's registration statement
on Form S-3, Registration No. 33-30190)
3.1(f) Certificate of Amendment of Restated Certificate of
Incorporation of registrant, filed May 18, 1990 (incorporated by
reference to Exhibit 4(h) to registrant's registration statement
on Form S-8, Registration No. 33-35936)
3.1(g) Conformed copy of Certificate of Incorporation of registrant, as
amended (incorporated by reference to Exhibit 3.1(g) to
registrant's registration statement on Form S-4, Registration
No. 33-36119)
3.2 By-laws of registrant, as amended and restated as of December
12, 1991 (incorporated by reference to Exhibit 3.2 to
registrant's registration statement on Form S-1, Registration
No. 33-44849)
4.1(a) Rights Agreement dated as of February 6, 1987, between the
registrant and Harris Trust and Savings Bank, which includes as
Exhibit A the form of Certificate of Designation of Preferred
Stock, as Exhibit B, the form of Rights Certificate and, as
Exhibit C, the Summary of Rights (incorporated by reference to
Exhibit 4 to registrant's report on Form 8-K dated January 26,
1987)
4.1(b) Certificate of Adjustment relating to April 1987 stock split
pursuant to Section 12 of the Rights Agreement (incorporated by
reference to Exhibit 4.3(b) to registrant's registration
statement on Form S-1, Registration No. 33-13839)
</TABLE>
- --------
*In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the registrant's file number under that Act is
1-7327, Chemical Waste Management, Inc.'s file number under that Act is 1-9253
and Wheelabrator Technologies Inc.'s file number under that Act is 0-14246.
EX-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION*
------- ---------------------
<C> <S> <C>
4.1(c) Certificate of Adjustment relating to December 1989 stock split
pursuant to Section 12 of the Rights Agreement (incorporated by
reference to Exhibit 4.3(c) to registrant's 1989 annual report
on Form 10-K)
4.2 Trust Indenture for Liquid Yield Option Notes due 2012
(incorporated by reference to Exhibit 4(a) to registrant's
registration statement on Form S-3, Registration No. 33-24615)
4.3(a) Trust Indenture dated as of August 1, 1989 (incorporated by
reference to Exhibit 4.3(a) to registrant's 1990 annual report
on Form 10-K)
4.3(b) First Supplemental Indenture dated as of December 1, 1990
(incorporated by reference to Exhibit 4.3(b) to registrant's
1990 annual report on Form 10-K)
4.3(c) Trust Indenture dated as of June 1, 1993 (incorporated by
reference to Exhibit 4 to the registrant's current report on
Form 8-K dated July 15, 1993)
5. Inapplicable
6. Inapplicable
7. Inapplicable
8. Inapplicable
9. None
10.1 1981 Stock Option Plan for Non-Employee Directors of registrant
(incorporated by reference to Exhibit 19 to registrant's report
on Form 10-Q for the quarter ended June 10, 1982)
10.2 WMX Technologies, Inc. 1982 Stock Option Plan, as amended to
March 11, 1988 (incorporated by reference to Exhibit 10.3 to
registrant's 1988 annual report on Form 10-K)
10.3 Deferred Director's Fee Plan, as amended (incorporated by
reference to Exhibit 10.3 to registrant's 1990 annual report on
Form 10-K)
10.4 Director's Phantom Stock Plan (incorporated by reference to
Exhibit 10.9 to registrant's 1984 annual report on Form 10-K)
10.5 Employment Agreement, dated as of September 1, 1986, by and
between the registrant and Phillip B. Rooney (incorporated by
reference to Exhibit 19.4 to registrant's report on Form 10-Q
for the quarter ended September 30, 1986)
10.6 Intercorporate Agreement, dated as of September 3, 1986, between
Chemical Waste Management, Inc. and the registrant (the "CWM
Intercorporate Agreement") (incorporated by reference to Exhibit
10.6 to Chemical Waste Management, Inc.'s registration statement
on Form S-1, Registration No. 33-8509)
10.7 Amendment No. 1 dated as of January 1, 1992 to CWM
Intercorporate Agreement (incorporated by reference to Exhibit
10.7(b) to registrant's 1991 annual report on Form 10-K)
</TABLE>
- --------
*In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the registrant's file number under that Act is
1-7327, Chemical Waste Management, Inc.'s file number under that Act is 1-9253
and Wheelabrator Technologies Inc.'s file number under that Act is 0-14246.
EX-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION*
------- ---------------------
<C> <S> <C>
10.8 WMX Technologies, Inc. Corporate Incentive Bonus Plan
10.9 WMX Technologies, Inc. Supplemental Executive Retirement Plan,
as amended and restated as of May 14, 1993 (incorporated by
reference to Exhibit 10 to the registrant's current report on
Form 8-K dated July 15, 1993)
10.10 WMX Technologies, Inc. Long Term Incentive Plan (as amended and
restated as of January 27, 1994)
10.11 Supplemental Retirement Benefit Agreement, dated as of January
1, 1989, by and between the registrant and Peter H. Huizenga
(incorporated by reference to Exhibit 10.16 to Post-Effective
Amendment No. 2 to registrant's registration statement on Form
S-1, Registration No. 33-13839)
10.12 Chemical Waste Management, Inc. 1986 Stock Option Plan, as
amended (incorporated by reference to Exhibit 10.1 to Chemical
Waste Management, Inc.'s 1989 annual report on Form 10-K)
10.13 Chemical Waste Management, Inc. 1986 Stock Option Plan for Non-
Employee Directors (incorporated by reference to Exhibit 10.2 to
Chemical Waste Management, Inc.'s registration statement on Form
S-1, Registration No. 33-8509)
10.14 Chemical Waste Management, Inc. Deferred Director's Fee Plan
(incorporated by reference to Exhibit 10.5 to Chemical Waste
Management, Inc.'s registration statement on Form S-1,
Registration No. 33-8509)
10.15 WMX Technologies, Inc. Director's Charitable Endowment Plan
(incorporated by reference to Exhibit 10.20 to registrant's 1989
annual report on Form 10-K)
10.16 Supplemental Retirement Benefit Agreement dated as of January 1,
1991 by and between registrant and Donald F. Flynn (incorporated
by reference to Exhibit 10.17 to registrant's 1990 annual report
on Form 10-K)
10.17 Consulting Agreement dated as of January 1, 1991 by and between
registrant and Donald F. Flynn (incorporated by reference to
Exhibit 10.18 to registrant's 1990 annual report on Form 10-K)
10.18 Restricted Unit Plan for Non-Employee Directors of Wheelabrator
Technologies Inc. as amended through June 10, 1991 (incorporated
by reference to Exhibit 19.03 to the report on Form 10-Q of
Wheelabrator Technologies Inc. for the quarter ended June 30,
1991)
10.19 1988 Stock Plan for Executive Employees of Wheelabrator
Technologies Inc. and its subsidiaries (the "WTI 1988 Stock
Plan") (incorporated by reference to Exhibit 28.1 to Amendment
No. 1 to the registration statement of Wheelabrator Technologies
Inc. on Form S-8, Registration No. 33-31523)
10.20 Amendments dated as of September 7, 1990 to the WTI 1988 Stock
Plan (incorporated by reference to Exhibit 19.02 to the 1990
annual report on Form 10-K of Wheelabrator Technologies Inc.)
</TABLE>
- --------
*In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the registrant's file number under that Act is
1-7327, Chemical Waste Management, Inc.'s file number under that Act is 1-9253
and Wheelabrator Technologies Inc.'s file number under that Act is 0-14246.
EX-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION*
------- ---------------------
<C> <S> <C>
10.21 Amendment dated as of November 1, 1990 to the WTI 1988 Stock
Plan (incorporated by reference to Exhibit 19.04 to the 1990
annual report on Form 10-K of Wheelabrator Technologies Inc.)
10.22 1986 Stock Plan for Executive Employees of Wheelabrator
Technologies Inc. and its subsidiaries (the "WTI 1986 Stock
Plan") (incorporated by reference to Exhibit 28.2 to Amendment
No. 1 to the registration statement of Wheelabrator Technologies
Inc. on Form S-8, Registration No. 33-31523)
10.23 Amendment dated as of November 1, 1990 to the WTI 1986 Stock
Plan (incorporated by reference to Exhibit 19.03 to the 1990
annual report on Form 10-K of Wheelabrator Technologies Inc.)
10.24 Description of consulting agreement between registrant and
Alexander B. Trowbridge (incorporated by reference to Exhibit
10.22 to registrant's 1989 annual report on Form 10-K)
10.25 WMX Technologies, Inc. 1992 Stock Option Plan (incorporated by
reference to Exhibit 10.31 to registrant's registration
statement on Form S-1, Registration No.
33-44849)
10.26 WMX Technologies, Inc. 1992 Stock Option Plan for Non-Employee
Directors (incorporated by reference to Exhibit 10.32 to
registrant's registration statement on Form S-1, Registration
No. 33-44849)
10.27 Wheelabrator Technologies Inc. 1992 Stock Option Plan
(incorporated by reference to Exhibit 10.45 to the 1991 annual
report on Form 10-K of Wheelabrator Technologies Inc.)
10.28 Deferred Director's Fee Plan of Wheelabrator Technologies Inc.
adopted June 10, 1991 (incorporated by reference to Exhibit
19.02 to the quarterly report on Form 10-Q of Wheelabrator
Technologies Inc. for the quarter ended June 30, 1991)
10.29 Waste Management International plc Share Option Plan
(incorporated by reference to Exhibit 10.1 to the registration
statement on Form F-1 of Waste Management International plc,
Registration No. 33-46511)
10.30 Amendment dated as of December 6, 1991 to the WTI 1986 Stock
Plan (incorporated by reference to Exhibit 19.01 to the 1991
annual report on Form 10-K of Wheelabrator Technologies Inc.)
10.31 Amendment dated as of December 6, 1991 to the WTI 1988 Stock
Plan (incorporated by reference to Exhibit 19.02 to the 1991
annual report on Form 10-K of Wheelabrator Technologies Inc.)
10.32 Amendment dated as of December 6, 1991 to the Restricted Unit
Plan for Non-Employee Directors of Wheelabrator Technologies
Inc. (incorporated by reference to Exhibit 19.05 to the 1991
annual report on Form 10-K of Wheelabrator Technologies Inc.)
</TABLE>
- --------
*In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the registrant's file number under that Act is
1-7327, Chemical Waste Management, Inc.'s file number under that Act is 1-9253
and Wheelabrator Technologies Inc.'s file number under that Act is 0-14246.
EX-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION*
------- ---------------------
<C> <S> <C>
10.33 Rust International Inc. 1993 Stock Option Plan (incorporated by
reference to Exhibit 10.41 to registrant's 1992 annual report on
Form 10-K)
10.34 Rust International Inc. 1993 Stock Option Plan for Non-Employee
Directors (incorporated by reference to Exhibit 10.42 to
registrant's 1992 annual report on Form 10-K)
10.35 Amendment No. 1 dated as of May 29, 1992 to Consulting Agreement
dated as of January 1, 1991 by and between registrant and Donald
F. Flynn (incorporated by reference to Exhibit 19.1 to
registrant's 1992 annual report on Form 10-K)
10.36 First Amended and Restated International Business Opportunities
Agreement by and among registrant, Chemical Waste Management,
Inc., Wheelabrator Technologies Inc., Waste Management
International, Inc., Waste Management International plc and Rust
International Inc., dated as of January 1, 1993 (incorporated by
reference to Exhibit 28 to the registration statement on Form S-
3 of Wheelabrator Technologies Inc., Registration No. 33-59606)
10.37 Amendment Agreement dated as of January 28, 1994 relating to the
International Business Opportunities Agreement (incorporated by
reference to Exhibit 10.19 to the 1993 annual report on Form 10-
K of Chemical Waste Management, Inc.)
10.38 Chemical Waste Management, Inc. 1992 Stock Option Plan
(incorporated by reference to Exhibit 10.20 to the 1991 annual
report on Form 10-K of Chemical Waste Management, Inc.)
11. None
12. Computation of ratio of earnings to fixed charges
13.1 Management's Discussion and Analysis of Financial Condition and
Results of Operations
13.2 Financial Statements, Supplementary Data and Report of
Independent Accountants
14. Inapplicable
15. Inapplicable
16. None
17. Inapplicable
18. None
19. Inapplicable
20. Inapplicable
21. List of subsidiaries of registrant
22. Inapplicable
23. Consent of Independent Public Accountants
24. None
25. Inapplicable
26. Inapplicable
27. Inapplicable
28. None
</TABLE>
- --------
*In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the registrant's file number under that Act is
1-7327, Chemical Waste Management, Inc.'s file number under that Act is 1-9253
and Wheelabrator Technologies Inc.'s file number under that Act is 0-14246.
EX-5
<PAGE>
EXHIBIT 10.8
WMX TECHNOLOGIES, INC.
CORPORATE INCENTIVE BONUS PLAN
1. PURPOSE. The purpose of the WMX Technologies, Inc. Corporate Incentive
Bonus Plan (the "Plan") is to advance the interests of WMX Technologies, Inc.
(the "Company") by providing for annual bonuses for officers of the Company, so
as to attract and retain such officers, make their compensation competitive with
other opportunities and provide them with an incentive to strive to increase the
Company's earnings.
2. ADMINISTRATION. With respect to participation in the Plan by individuals
who are executive officers of the Company, the Plan shall be administered by the
Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of the Company (the "Board"). The Board may in its discretion
designate the Board or a committee other than the Committee to administer the
Plan, in which event the Board or such other committee shall be deemed the
"Committee" hereunder. Notwithstanding the foregoing, with respect to
participation in the Plan by individuals who are not executive officers of the
Company, the Plan shall be administered by a management committee composed of
the Company's Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer (or one or more persons designated by them), and all
references herein to the "Committee" shall be deemed to mean such committee as
to matters involving the participation of such officers in the Plan.
3. PARTICIPANTS; TERMINATION OF EMPLOYMENT
(a) Participants in the Plan shall be selected by the Committee on an
annual basis. Participation shall be limited to officers of the Company.
(b) Officers who become eligible to participate in the Plan after the
beginning of a calendar year (a "Plan Year") shall, subject to selection and
approval by the Committee, be entitled to a bonus prorated to reflect such
participant's actual number of full months of participation during the Plan
Year.
(c) If, during the Plan Year, a participant's job assignment is modified
such that the participant's target bonus (as described below) is no longer
representative of the participant's position, the participant's target bonus
shall be adjusted, subject to Committee approval, as of the first day of the
month following the change in position to a target bonus commensurate with the
participant's new position. Thereafter, the participant shall be entitled to a
performance award under the Plan prorated between the target bonus categories to
reflect the number of months during the Plan Year during which the participant
participated under each such category.
(d) A participant whose employment with the Company or its subsidiary
terminates during the Plan Year shall not be entitled to the payment of a bonus
under the Plan, except as the Committee may otherwise determine in its sole
discretion. Nothing contained in the Plan shall confer upon any
1
<PAGE>
participant any right to be continued in the employ of the Company or interfere
in any way with the right of the Company to terminate a participant's employment
at any time.
4. BONUSES. (a) Each participant in the Plan shall be eligible to receive
such bonus, if any, for each Plan Year as may be payable pursuant to the
performance criteria described below. The Committee shall, on an annual basis,
establish a "target bonus" for each participant equal to a percentage of base
salary of such participant paid for such Plan Year. The maximum amount of a
target bonus that may be awarded to a participant for a Plan Year shall be 200%
of such base salary.
(b) (i) Participants shall have their bonuses, if any, determined on the
basis of:
(A) the percentage of the budgeted earnings per share of the Company's
common stock (the "Common Stock") achieved by the Company for the Plan Year
("EPS Targeted Attainment Percentage");
(B) the percentage of budgeted earnings per share, in the case of an
operating group which is a public subsidiary of the Company, or pre-tax
income, in the case of other operating groups, for the Plan Year achieved
by one or more operating groups for which such participant has substantial
management responsibility; or
(C) a weighted average of (A) and (B) above.
The Committee shall for each Plan Year establish (x) the performance
criteria from (A), (B) and (C) above to apply to each participant, (y) as to the
participants to whom the criterion in clause (A) is applicable (whether by
itself or as part of a weighted average), percentages of target bonus earned at
various EPS Targeted Attainment Percentages, including the minimum EPS Targeted
Attainment Percentage below which no portion of target bonus shall be earned as
to the EPS Targeted Attainment Percentage, and (z) as to participants to whom
the criterion in clause (B) is applicable (whether by itself or as part of a
weighted average), percentages of target bonus earned at various percentages
described above in clause (B), including the minimum percentage described above
in clause (B) below which no portion of target bonus shall be earned as to such
percentage.
(ii) Notwithstanding the foregoing, no bonus shall be payable to the
Chief Executive Officer or Chief Operating Officer of the Company if the
Committee determines that he has not established programs and systems which are
adequate to further the implementation of each of the Principles in the WMX
Technologies, Inc. Environmental Policy.
(iii) The earnings per share of the Common Stock for any year shall be
as determined by the Company's independent public accountants on a primary,
rather than fully-diluted, basis. In the event that there are recorded special
items in income or expense, or changes in generally accepted accounting
principles or accounting methods are implemented, which render the earnings or
pre-tax income data not comparable between years or the targeted objectives
specified above incompatible with the purpose and intent of the Plan, the
Committee may in its sole discretion make appropriate
2
<PAGE>
adjustments to the earnings or pre-tax income data or such objectives.
5. PAYMENT. Payment of bonuses for any Plan Year shall be in cash and made as
promptly as practicable following completion of the Company's consolidated
financial statements for such Plan Year.
6. ADJUSTMENTS FOR CHANGES IN STOCK, MERGERS, ETC. In the event of dividends
payable in Common Stock or in the case of the subdivision or combination of
Common Stock, appropriate revision shall be made in the earnings per share
objectives set forth in Section 4 above. In the event of a Change in Control
(as such term is defined in the Company's 1992 Stock Option Plan, as amended
from time to time) of the Company (i) the Plan Year shall end as of the end of
the calendar quarter coincident with or next following the date of such Change
in Control (or such other date as established by the Committee), (ii) the
Committee shall cause the bonuses payable to participants to be promptly
calculated and (iii) the Company shall pay such bonuses to participants as
promptly as practicable following the Committee's determination, notwithstanding
any Plan provision to the contrary. In calculating the bonuses payable to
participants in connection with a Change in Control, the Committee is authorized
to take into consideration such factors as the shortened Plan Year, and any
other equitable adjustments to the formulae established by the Committee
pursuant to Section 4 as it deems appropriate.
7. PARTICIPANT'S INTERESTS. A participant's benefits hereunder shall at all
times be reflected on the Company's books as a general unsecured and unfunded
obligation of the Company and the Plan shall not give any person any right or
security interest in any asset of the Company nor shall it imply any trust or
segregation of assets by the Company.
8. NON-ALIENATION OF BENEFITS. All rights and benefits under the Plan are
personal to the participant and neither the Plan nor any right or interest of a
participant or any person arising under the Plan is subject to voluntary or
involuntary alienation, sale, transfer, or assignment without the Company's
consent.
9. WITHHOLDING FOR TAXES. Notwithstanding any other provisions of this Plan,
the Company may withhold from any payment made by it under the Plan such amount
or amounts as may be required for purposes of complying with the tax withholding
or other provisions of the Internal Revenue Code or the Social Security Act or
any state's income tax act or for purposes of paying any estate, inheritance or
other tax attributable to any amounts payable hereunder.
10. NO EMPLOYMENT RIGHTS. The Plan is not a contract of employment and
participation in the Plan will not cause any participant to have any rights to
continue as an employee of the Company, or any right or claim to any benefit
under the Plan, except as specifically provided herein.
11. GENDER AND NUMBER. Where the context admits, words denoting men include
women, the plural includes the singular, and the singular includes the plural.
3
<PAGE>
12. COMMITTEE OR COMPANY DETERMINATIONS FINAL. Each determination provided for
in the Plan shall be made by the Committee or the Company, as the case may be,
under such procedures as may from time to time be prescribed by the Committee or
the Company and shall be made in the sole discretion of the Committee or the
Company as the case may be. Any such determination shall be conclusive.
13. AMENDMENT OR TERMINATION. The Committee may in its sole discretion
terminate or amend the Plan from time to time. No such termination or amendment
shall alter a participant's right to receive a distribution as previously
awarded to such participant.
14. SUCCESSORS. The Plan is binding on and will inure to the benefit of any
successor to the Company, whether by way of merger, consolidation, purchase or
otherwise.
15. CONTROLLING LAW. The Plan shall be construed in accordance with the
internal laws of the State of Illinois.
4
<PAGE>
EXHIBIT 10.10
WMX TECHNOLOGIES, INC.
LONG TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED AS OF 1/27/94)
1. PURPOSE. The purpose of the WMX Technologies, Inc. Long Term Incentive
Plan (the "Plan") is to advance the interests of WMX Technologies, Inc. (the
"Company") by providing for long-term performance awards for officers of the
Company or one or more of its subsidiaries so as to attract and retain such
officers, make their compensation competitive with other opportunities, and
cause them to strive to increase the Company's cumulative returns to its
stockholders.
2. ADMINISTRATION. With respect to participation in the Plan by individuals
who are executive officers of the Company, the Plan shall be administered by the
Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of the Company (the "Board"). The Board may in its discretion
designate the Board or another Committee thereof to administer the Plan, in
which event the Board or such other Committee shall be deemed the "Committee"
hereunder. Notwithstanding the foregoing, with respect to participation in the
Plan by individuals who are not executive officers of the Company, the Plan
shall be administered by a management committee composed of the Company's Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer (or one
or more persons designated by them), and all references herein to the
"Committee" shall be deemed to mean such committee as to matters involving the
participation of such officers in the Plan.
3. PARTICIPANTS; PERFORMANCE PERIODS; PRORATION OF AWARDS.
(a) Participants in the Plan shall be selected by the Committee.
Participation shall be limited to employees who are officers of the Company or
one or more of its subsidiaries.
(b) Such officers who become participants in the Plan after June 1, 1993
shall, subject to selection and approval by the Committee, be entitled to target
and performance awards pursuant to Section 4 hereof for each Performance Period
(as hereinafter defined) determined pursuant hereto. For purposes hereof, each
"Performance Period" during the term of the Plan shall begin on a January 1 and
shall terminate on the December 31 of the third calendar year ending thereafter;
provided that the first Performance Period pursuant to the Plan shall begin on
June 1, 1993 and shall end on December 31, 1995.
(c) If an officer of the Company or one or more of its subsidiaries
becomes a participant in the Plan during any Performance Period, the
participant's award for such Performance Period shall be prorated to reflect
such participant's actual number of full months of participation. If, during
any Performance Period, a participant's job assignment is modified such that the
participant's target award (as described below) is no longer representative of
the participant's position, the participant's target award shall be adjusted,
subject to Committee approval, as of the first day of the month following the
change in position to a target award commensurate with the participant's new
position. Thereafter, the participant shall be entitled to a performance award
under the Plan prorated between the target award categories to reflect the
number of months during the Performance Period during which the participant
participated under each such category.
4. TARGET AND PERFORMANCE AWARDS.
(a) The Committee shall establish a percentage of each participant's
annual base salary as of the last day of each Performance Period as a "target
award" for such Performance Period.
<PAGE>
(b) Each participant in the Plan shall be entitled to a performance award
for each Performance Period based on the percentile rank of the Company's Total
Stockholder Return (as hereinafter defined) among the Total Stockholder Returns
of the companies that comprise the Dow Jones Industrial Average (the "DJIA")
during such Performance Period. The Committee shall determine a target
percentile rank applicable to each Performance Period and shall for each
Performance Period establish percentages of target awards earned at various
percentile rankings of the Company in relation to the DJIA companies for such
Performance Period, including a percentile rank below which no portion of a
target award shall be earned. For purposes hereof, "Total Stockholder Return"
of the Company shall mean the cumulative return on its common stock, $1.00 par
value ("Common Stock"), expressed as a percentage, determined by dividing (i)
the sum of (a) the cumulative amount of dividends paid for the applicable
Performance Period, assuming dividend reinvestment, and (b) the difference
between the average of the closing sales prices of Common Stock on the last five
trading days of such Performance Period and the last five trading days preceding
the first day of such Performance Period, by (ii) the average of the closing
sales prices of Common Stock on the last five trading days preceding the first
day of such Performance Period. The "Total Stockholder Return" of any of the
companies that comprise the DJIA shall mean the cumulative return on its common
stock expressed as a percentage, determined by dividing (i) the sum of (a) the
cumulative amount of dividends paid for the applicable Performance Period,
assuming dividend reinvestment, and (b) the difference between the closing sales
price of such common stock on the last trading day of such Performance Period
and the last trading day preceding the first day of such Performance Period, by
(ii) the closing sales price of such common stock on the last trading day
preceding the first day of such Performance Period.
(c) The Committee may determine, in its sole discretion, that a
participant's award for any Performance Period shall be calculated, in whole or
in part, based upon the formula established with respect to a long term
incentive plan of any subsidiary of the Company.
5. CASH AND DEFERRED AWARDS.
(a) Performance awards for each Performance Period shall be payable as
follows:
(i) An amount equal to 50% of the performance award (the "Cash Award")
shall be paid in cash as soon as practicable after the end of the Performance
Period; and
(ii) An amount equal to 50% of the performance award (the "Deferred
Award"), adjusted as set forth in Section 6 hereof, shall be paid in cash as
soon as practicable after the date of vesting, determined pursuant to Section 7
hereof.
(b) The maximum amount of a performance award that may be awarded pursuant
to Section 4(b) hereof to a participant with respect to any Performance Period
pursuant to this Plan shall be limited to 250% of the participant's base salary
as of the last day of the Performance Period. The Deferred Award portion of each
performance award shall be subject to adjustment as contemplated by Section 6
hereof.
6. DEFERRED AWARD GRANT AND PAYMENT. (a) An amount equal to the Deferred
Award granted to each participant pursuant hereto shall be credited to a
bookkeeping account maintained by the Company in the name of each participant (a
"Deferred Account") as of the last day of each Performance Period with respect
to which a Deferred Award is payable. Each amount so credited shall be deemed
to have been invested in shares of Common Stock as of the last trading day of
such Performance Period. During the period that any part or all of a
participant's Deferred Account is
2
<PAGE>
deemed to have been invested in shares of Common Stock, such Deferred Account
shall be deemed to receive all dividends (whether in the form of stock or cash)
and stock splits which would be received with respect to such shares as if such
investment had actually been made and such amounts shall be deemed to be
reinvested in shares of Common Stock as of the date of receipt, and appropriate
credit shall be made to the participant's Deferred Account to reflect such
deemed receipts and reinvestments. The investments described above shall be
deemed to have been made at a price equal to the average of the closing sales
prices of the Common Stock on the New York Stock Exchange Composite Tape (as
reported in The Wall Street Journal, Midwest Edition), on each of the five
trading days immediately preceding the date as of which a deemed investment is
made.
(b) As soon as practicable following the date of vesting of a Deferred
Award pursuant to Section 7 hereof, the shares of Common Stock deemed reflected
in each participant's Deferred Account shall be deemed to have been sold at a
price equal to the average of the closing sales prices of the Common Stock on
the New York Stock Exchange Composite Tape (as reported in The Wall Street
Journal, Midwest Edition), on each of the five trading days immediately
preceding the date of such vesting, and the proceeds thereof shall be
distributed as soon as practicable to each participant or designated beneficiary
in cash.
(c) Subject to Section 8 hereof, in the event of a merger, consolidation,
exchange of shares or recapitalization of the Company, a similar event affecting
the Common Stock, or any other event determined by the Committee in its sole
discretion, the Common Stock deemed reflected by a participant's Deferred
Account may be deemed by the Committee, in its sole discretion, to be sold,
exchanged or otherwise disposed of, and the Committee may make appropriate
adjustments in each participant's Deferred Account to recognize such event, and
the assumed proceeds of any such disposition may be deemed to be reinvested in
any security which the Committee in its sole discretion determines is an
appropriate replacement security, or, alternatively, paid to the participant in
cash, in the discretion of the Committee.
7. VESTING.
(a) Unless the Committee shall otherwise determine, in its sole discretion,
a participant whose employment as an officer of the Company or one of its
subsidiaries is terminated during any Performance Period shall not be entitled
to the payment of a performance award under the Plan for such Performance
Period.
(b) A participant's right to receive a Cash Award or any portion thereof
for any Performance Period shall not vest until the close of business on the
last day of such Performance Period; provided that if the participant is not an
officer of the Company or one of its subsidiaries on such date, such award or
any portion thereof shall not vest unless the Committee shall otherwise
determine, in its sole discretion.
(c) A participant's right to receive a Deferred Award or any portion
thereof for any Performance Period shall not vest until the close of business on
the date three years after the last day of such Performance Period; provided
that if the participant is not an officer of the Company or one of its
subsidiaries on such date, then such award or any portion thereof shall not
vest, except as hereinafter provided, or as the Committee shall otherwise
determine, in its sole discretion. If the participant is not an officer of the
Company or one of its subsidiaries on such date as a result of the participant's
normal retirement at or after age 65, death or total disability, the participant
or his beneficiary designated pursuant to Section 10 hereof shall be entitled to
payment of such Deferred Award as soon as practicable after such normal
retirement, death or total disability, in an amount
3
<PAGE>
equal to the value of such Deferred Account as of the last day of the month in
which such normal retirement, death or total disability occurs.
8. CHANGE IN CONTROL. In the event of a Change in Control (as such term is
defined in the Company's 1992 Stock Option Plan, as amended from time to time)
of the Company, (i) each Performance Period which has not yet ended shall end as
of the calendar quarter coincident with or next following the date of such
Change in Control (or such other date as established by the Committee), (ii)
each unpaid Cash Award from such Performance Periods and each unpaid Deferred
Award from such Performance Periods and from prior Performance Periods shall
vest as of the close of business on the last day of each such Performance Period
(or such other date established by the Committee), (iii) the Committee shall
cause the performance awards payable to participants to be promptly calculated,
and (iv) the Company shall pay such performance awards to participants as
promptly as practicable following the Committee's determination, notwithstanding
any Plan provision to the contrary. In calculating the performance awards
payable to participants in connection with a Change in Control, the Committee is
authorized to take into consideration and make adjustments for such factors as
it deems appropriate.
9. PARTICIPANTS' INTERESTS. Although Deferred Awards payable to a participant
hereunder are measured by the value of and income derived from the investments
deemed made in Common Stock, the Company will not issue any such shares or make
any such investment on behalf of a participant. A participant's benefits
hereunder shall at all times be reflected on the Company's books as a general
unsecured and unfunded obligation of the Company and the Plan shall not give any
person any right or security interest in any asset of the Company nor shall it
imply any trust or segregation of assets by the Company.
10. DESIGNATION OF BENEFICIARIES. A participant from time to time may name in
writing any person or persons (who may be named concurrently, contingently or
successively) to whom his or her benefits are to be paid if he or she dies
before complete payment of such benefits. Each such beneficiary designation will
revoke all prior designations by the participant with respect to the Plan, shall
not require the consent of any previously named beneficiary, shall be in a form
prescribed by the Committee, and will be effective only when filed with the
Committee during the participant's lifetime. If the participant fails to
designate a beneficiary before his or her death, as provided above, or if the
beneficiary designated by the participant dies before the date of the
participant's death or before complete payment of the participant's benefits,
the Company, in its discretion, may pay the remaining unpaid portion of the
participant's benefits to either (i) one or more of the participant's relatives
by blood, adoption or marriage and in such proportion as the Company determines;
or (ii) the legal representative or representatives of the estate of the last to
die of the participant and his or her designated beneficiary.
11. FACILITY OF PAYMENT. If a participant or his or her beneficiary is entitled
to payments under the Plan and in the Company's opinion such person becomes in
any way incapacitated so as to be unable to manage his or her financial affairs,
the Company may make payments to the participant's or beneficiary's legal
representative, or to a relative or friend of the participant or beneficiary for
such person's benefit, or the Company may make payments for the benefits of the
participant or beneficiary in any manner that it considers advisable. Any
payment made in accordance with the preceding sentence shall be a full and
complete discharge of any liability for such payment hereunder.
12. NON-ALIENATION OF BENEFITS. All rights and benefits under the Plan are
personal to the participant and neither the Plan nor any right or interest of a
participant or any person arising
4
<PAGE>
under the Plan is subject to voluntary or involuntary alienation, sale,
transfer, or assignment without the Company's consent.
13. WITHHOLDING FOR TAXES. Notwithstanding any other provisions of this Plan,
the Company may withhold from any payment made by it under the Plan such amount
or amounts as may be required for purposes of complying with the tax withholding
or other provisions of the Internal Revenue Code or the Social Security Act or
any state's income tax act or for purposes of paying any estate, inheritance or
other tax attributable to any amounts payable hereunder.
14. NO EMPLOYMENT RIGHTS. The Plan is not a contract of employment and
participation in the Plan will not cause any participant to have any rights to
continue as an employee of the Company (or any affiliated entity), or any right
or claim to any benefit under the Plan, unless the right or claim has
specifically vested under the Plan.
15. COMMITTEE OR COMPANY DETERMINATIONS FINAL. Each determination provided for
in the Plan shall be made by the Committee or the Company, as the case may be,
under such procedures as may from time to time be prescribed by the Committee or
the Company and shall be made in the absolute discretion of the Committee or the
Company, as the case may be. Any such determination shall be conclusive.
16. AMENDMENT OR TERMINATION. The Committee may in its sole discretion terminate
or amend the Plan from time to time. No such termination or amendment shall
alter a participant's right to receive a vested award under the Plan.
17. SUCCESSORS. Unless otherwise agreed to, the Plan is binding on and will
inure to the benefit of any successor to the Company, whether by way of merger,
consolidation, purchase or otherwise.
18. CONTROLLING LAW. The Plan shall be construed in accordance with the internal
laws of the State of Illinois.
5
<PAGE>
Exhibit 12
WMX TECHNOLOGIES, INC.
Ratio of Earnings to Fixed Charges
(Unaudited)
(millions of dollars, except ratio)
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------
1989(1) 1990(2) 1991(3) 1992(4) 1993(5)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Income Before Income Taxes,
Minority Interest, Extraordinary
Item and Cumulative Effect of
Accounting Changes............... $ 920.5 $1,253.7 $1,139.4 $1,555.2 $ 867.2
Interest Expense.................... 129.1 192.1 279.9 311.0 401.5
Capitalized Interest................ (53.8) (81.4) (111.4) (87.9) (100.6)
One-Third of Rents Payable
in the Next Year................... 12.2 23.6 46.7 44.7 48.5
-------- -------- -------- -------- --------
Income Before Income Taxes,
Minority Interest, Extraordinary
Item, Cumulative Effect of
Accounting Changes, Interest and
One-Third of Rents............... $1,008.0 $1,388.0 $1,354.6 $1,823.0 $1,216.6
======== ======== ======== ======== ========
Interest Expense.................... $ 129.1 $ 192.1 $ 279.9 $ 311.0 $ 401.5
One-Third of Rents Payable in the
Next Year.......................... 12.2 23.6 46.7 44.7 48.5
-------- -------- -------- -------- --------
Interest Expense plus One-Third
of Rents........................... $ 141.3 $ 215.7 $ 326.6 $ 355.7 $ 450.0
======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges............................ 7.13 to 1 6.43 to 1 4.15 to 1 5.13 to 1 2.70 to 1
</TABLE>
- ----------
(1) The results for 1989 include a non-taxable gain ($70.8 million) resulting
from the public offering of five million shares of common stock of Chemical
Waste Management, Inc. in October 1989 and special charges ($112.0 million
before tax).
(2) The results for 1990 exclude an extraordinary charge ($24.5 million)
reflecting the Company's percentage interest in the writedown by Wheelabrator
Technologies Inc. of Wheelabrator's investment in the stock of The Henley Group,
Inc. and Henley Properties Inc. to market value.
(3) The results for 1991 include a special charge ($296.0 million before tax
and minority interest) primarily to reflect then current estimates of the
environmental remediation liabilities at waste disposal sites previously used or
operated by the Company and its subsidiaries or their predecessors.
(4) The results for 1992 include a non-taxable gain ($240.0 million before
minority interest) resulting from the initial public offering of Waste
Management International plc in April 1992 as well as special charges ($219.9
million before tax and minority interest). The results for 1992 exclude the
cumulative effect of accounting changes ($71.1 million after tax and minority
interest) related to the adoption of Statements of Financial Accounting
Standards Nos. 106 and 109.
(5) The results for 1993 include a non-taxable gain ($15.1 million) relating
to the issuance of shares by Rust International Inc. as well as a special asset
revaluation and restructuring charge ($550.0 million before tax and minority
interest) related primarily to a revaluation of Chemical Waste Management,
Inc.'s thermal treatment business.
<PAGE>
EXHIBIT 13.1
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS:
CONSOLIDATED: Consolidated 1993 revenue of WMX Technologies, Inc.
(formerly Waste Management, Inc.) and its subsidiaries ("WMX" or the "Company")
was $9,135,577,000 compared with $8,661,027,000 in 1992 and $7,550,914,000 in
1991.
Consolidated 1993 net income was $452,776,000 or $.93 per share, compared with
$850,036,000 or $1.72 per share in 1992 and $606,323,000 or $1.23 per share in
1991.
Earnings per share for all three years were impacted by special charges and
gains from stock transactions of subsidiaries; in 1992 by changes in accounting
principles; and in 1993 by an increase in U.S. tax rates. The following table
reconciles reported earnings per share to earnings excluding such items:
<TABLE>
<CAPTION>
1991 1992 1993
- -----------------------------------------------------------
<S> <C> <C> <C>
Reported earnings per share $1.23 $1.72 $0.93
Gains on stock transactions
of subsidiaries (0.03) (0.42) (0.02)
Special charges (see Note 11 to
Consolidated Financial
Statements)--
Chemical Waste
Management, Inc.
("CWM") asset revaluation
and restructuring charge - - 0.59
Provision for estimated
environmental liabilities 0.37 - -
Other - 0.24 -
Adjustment to deferred income taxes
resulting from 1993 tax law change - - 0.03
Changes in accounting principles - 0.14 -
----- ----- -----
Earnings per share excluding
above items $1.57 $1.68 $1.53
===== ===== =====
</TABLE>
In addition, the higher U. S. tax rates in effect in 1993 negatively impacted
1993 income by approximately $.04 per share compared with 1992 and 1991.
During the three-year period, the Company has invested substantial financial
resources and senior management time in an aggressive expansion into new service
lines and geographic markets. Waste Management International plc ("WM
International") successfully completed an initial public offering ("IPO") and
has expanded rapidly, particularly in the Far East. Wheelabrator Technologies
Inc. ("WTI") has broadened its business lines through targeted acquisitions of
water, wastewater and air pollution control technologies. The formation of Rust
International Inc. ("Rust") on January 1, 1993, as discussed below, created a
leading environmental and infrastructure engineering, consulting, remediation
and industrial services company. These efforts have positioned WMX as a leader
in the global environmental services market. At the same time, core North
American solid and hazardous waste operations have faced difficult business
conditions, including a lengthy recession. During 1993, the Company moved to
address these developments, first with a major restructuring of CWM. As a result
of that effort, CWM has streamlined its business and is concentrating on
generating increased returns from the markets in which it participates.
During the fourth quarter of 1993, the Company turned its attention to its
Waste Management, Inc. ("WMI", formerly Waste Management of North America,
Inc.) North American solid waste subsidiary. A new corporate management team was
formed and the organization was returned to its nine-group management structure.
The reorganization is intended to focus the senior management of WMI on
division-level operations and profitability, operating cost reductions, improved
returns on capital and business growth.
The Company provides comprehensive environmental, engineering and
construction, industrial and related services through five principal
subsidiaries, each of which operates in a relatively discrete portion of the
environmental services industry or geographic area. WMI provides integrated
solid waste services and CWM provides hazardous waste collection,
transportation, treatment and disposal services in North America. WM
International provides these services, as well as trash-to-energy services,
outside North America. WTI is involved in trash-to-energy and independent power
projects, water and wastewater treatment, including biosolids management, and
air quality control, primarily in North America. Rust serves the engineering,
construction, environmental and infrastructure consulting, hazardous substance
remediation and on-site industrial and related services markets in the United
States and a number of foreign countries.
Rust was formed on January 1, 1993, through the contribution by CWM of its
hazardous substance remediation services business, its approximately 56%
ownership in The Brand Companies, Inc. ("Brand"), and its 12% ownership interest
in WM International, together with certain other assets, and the contribution by
WTI of its engineering and construction and environmental and infrastructure
consulting businesses, its London-based international engineering unit, and
certain other assets. Brand was subsequently merged into a subsidiary of Rust.
At December 31, 1993, Rust was owned approximately 56% by CWM and approximately
40% by WTI, with the remaining ownership held by the public.
Following is an analysis of operating results by principal subsidiary. The
analysis comparing 1993 to 1992, with respect to CWM, WTI and Rust, assumes that
the formation of Rust had occurred as of January 1, 1992, and the comparative
information for 1992 in that analysis is stated on a pro forma basis reflecting
that assumption.
- ----------------------------------------------------------------------------
1992 OPERATIONS COMPARED TO 1991:
WMI WMI revenues were $4,309,614,000 in 1992 compared with
$3,961,111,000 in 1991, an increase of 8.8%. Revenue growth by business line is
shown in the following table:
<TABLE>
<S> <C>
Residential 10.9%
Commercial 8.5
Rolloff and industrial 8.1
Disposal, transfer and other 7.9
Total 8.8%
</TABLE>
Revenue growth in 1992 was attributable in approximately equal proportions to
volume and acquisitions. Price increases were nominal. Solid waste collection
and disposal pricing during the year were under pressure from low inflation,
depressed volumes and, in some markets, excess disposal capacity. Volumes per
customer in the commercial and industrial sectors, particularly in certain
industries, declined due to the weak U.S. economy. WMI was able to offset this
impact through increased market
32
<PAGE>
share and special waste volume.
Operating margins (after operating, selling and administrative expenses
and goodwill amortization, but before special charges) were 21.0% of revenue in
1992 compared with 22.5% in 1991. Operating expenses in 1992 were under upward
pressure in the domestic solid waste industry due to shifting public attitudes
and legislative and regulatory mandates. These factors increased disposal costs
while diverting portions of the waste stream away from land disposal to
alternatives such as recycling, which has lower margins. Competition for the
remaining waste volumes, which were depressed by economic conditions, put
additional pressure on margins. Selling and administrative expenses as a
percentage of revenue were 11.5% in 1992 and 1991. Benefits of an aggressive
administrative cost reduction program begun in 1989 and the ability to spread
fixed costs over a larger revenue base were offset by an inability to increase
prices and by the cost in 1992 of a substantial investment in the sales and
marketing organization.
CWM Revenues for CWM were $1,519,000,000 in 1992, compared with
$1,358,000,000 in 1991, an increase of 11.8%. Price accounted for revenue
growth of approximately 1.9%, volume 6.3%, and purchased businesses 3.6%.
Although revenues were adversely affected by the sluggish economy, a
reduction of hazardous waste taxes in Alabama and Louisiana in the latter part
of 1992 aided revenue growth. Base business revenue increased 10% in 1992 from
1991, and event business revenue (revenue from relatively larger, typically non-
recurring projects) increased 22%, although disposal volume from environmental
cleanups began to decline in the 1992 fourth quarter and this trend continued
into 1993. Revenue during the first half of 1992 was helped by disposal volume
accelerating ahead of a regulatory land-ban of certain waste categories which
became effective in May of that year.
Operating expenses (excluding special charges) as a percentage of
revenue were 69.8% in 1992 compared with 70.0% in 1991. The slight improvement
in 1992 resulted from a shift in revenue mix to treatment, resource recovery
and disposal services, which have better margins, from on-site remediation,
which has lower margins. Selling and administrative expenses were 13.6% of
revenue in 1992, compared with 14.5% in 1991. The decline resulted from
continued emphasis on cost reduction, and revenue growth (excluding
acquisitions) providing a larger base over which to spread the fixed portion of
these costs.
WTI During 1992 and 1991, WTI operated in two primary business segments.
The Environmental Operations segment included trash-to-energy and independent
power facility operations, water and wastewater treatment services, composting,
biosolids management, and air quality control systems. The Environmental and
Infrastructure Engineering Services segment provided environmental
engineering, architectural, scientific and photogrammetric services, as well as
industrial process design and engineering and project management services, and
substantially comprised the operations transferred to Rust effective January 1,
1993. Revenue by business segment is summarized as follows ($000's omitted):
1991 1992
- ----------------------------------------------------------------------------
Environmental operations $ 775,673 $ 928,313
Environmental and infrastructure
engineering services 397,776 554,741
---------- ----------
Total $1,173,449 $1,483,054
========== ==========
1992 revenues in the Environmental Operations segment increased 20%
compared with 1991. Air and water quality control businesses acquired in 1991
and 1992 contributed approximately 40% of this revenue growth. These
acquisitions provided WTI with an operating base and necessary technical
expertise to address the biosolids management requirements of municipal and
industrial customers and broadened its air quality product offerings.
Trash-to-energy revenues increased in 1992 as a result of a full year of
operations at one of two 2,250 ton-per-day facilities in Broward County,
Florida, which commenced operations in 1991, as well as commencement of
commercial operations in early 1992 at a second Broward County facility and an
800 ton-per-day plant in Spokane, Washington. WTI's energy, water and air lines
of business represented approximately 59%, 30% and 11%, respectively, of total
1992 segment revenue, compared with 63%, 32% and 5%, respectively, in 1991.
Environmental and Infrastructure Engineering Services revenue
increased, primarily due to the acquisition and formation of the SEC Donohue,
Inc. environmental consulting business. Partially offsetting this increase was
a decline in process engineering revenue as a result of the economic conditions
impacting engineering and construction activity generally in the United States.
The shift in business toward Environmental Operations resulted in a decline of
operating expenses as a percentage of revenue from 77% in 1991 to 75% in 1992.
Selling and administrative expenses increased in dollar terms in 1992
primarily as a result of acquisitions. As a percentage of revenue, these
expenses were flat in 1992, compared to 1991.
WM INTERNATIONAL WM International is a UK corporation which prepares its
financial statements in pounds sterling under accounting principles prevailing
in the United Kingdom. Such accounting principles differ in certain respects
from those generally accepted in the United States ("US GAAP"). The discussion
and analysis of WM International is based on US GAAP financial statements with
pounds sterling translated to U.S. dollars at the rates used to translate WM
International financial statements for inclusion in the Company's consolidated
financial statements.
WM International revenue was $1,445,734,000 in 1992 compared with
$1,075,070,000 in 1991. Components of revenue growth were as follows:
Price increases 5.5%
Volume (including start-ups) 10.9
Purchased businesses 16.1
Foreign currency translation 2.0
----
Total 34.5%
====
The volume increase in 1992 relates to the construction of the Hong
Kong Chemical Waste Treatment Facility, various new
33
<PAGE>
contracts, and construction of a landfill in Brisbane, Australia. Growth from
acquisitions relates to the full-year impact of businesses acquired in 1991 as
well as additional acquisitions in 1992.
Income from operations was 14.0% of revenue in 1991 and 13.9% in 1992.
WM International reduced operating expenses as a percent of revenue by
initiating efficiencies at acquired businesses, as well as by spreading fixed
costs over greater volumes. These efforts were partially offset by
deteriorating economic conditions in many of its markets. In addition, selling
and administrative expenses increased to 14.6% of revenue in 1992 compared to
14.1% in 1991, as a result of enhancing country management organizations, as
well as the corporate headquarters group, to more efficiently manage and
control the business.
- ----------------------------------------------------------------------------
1993 OPERATIONS COMPARED TO 1992:
WMI Revenues for WMI were $4,702,166,000 in 1993 compared with
$4,309,614,000 in 1992. 1993 revenue growth by line of business is analyzed in
the following table:
Residential 9.2%
Commercial 7.1
Rolloff and industrial 10.1
Disposal, transfer and other 10.7
Total 9.1%
Volume increases accounted for revenue growth of approximately 6.8%,
whereas acquisitions accounted for approximately 2.8%. Pricing pressures
experienced by the solid waste industry in the United States in 1992 persisted
in 1993. Prior to the fourth quarter of 1993, prices in general had not
increased in twelve to eighteen months, and had deteriorated slightly in the
latter portion of the period. WMI implemented selective price increases
effective October 1, 1993, but the ability to sustain or expand the scope of
such price increases remains uncertain. For the year, price had a negative
impact of about .5% on 1993 revenue growth. Volume increases in 1993 came from
continued growth in special waste and increased market share as a result of a
substantial investment in the sales and marketing areas during the third and
fourth quarters of 1992. Disposal volume in 1993 was also helped by a contract
to dispose of debris from Hurricane Andrew in Florida.
While the slow recovery from the recent recession is believed to have
been a significant factor in WMI's results, there is some evidence that the
real rate of growth in the generation of solid waste in the United States is
slowing. In addition, a greater percentage of the waste is being recycled than
was the case ten years ago, and recycling is anticipated to continue growing
for the next several years. The result is that landfill volumes are tending to
remain relatively constant and may even decline slightly. As a consequence,
WMI's revenue growth is expected to slow and pressure on disposal margins is
expected to continue.
Operating margins (after operating, selling and administrative
expenses, and goodwill amortization, but before special charges) were 20.4% of
revenue in 1993 compared to 21.0% in 1992. Operating expenses as a percentage
of revenue benefited from increased volumes to absorb the fixed portion of such
costs as well as WMI's progress in internalizing disposal volume, but price
weakness largely offset these gains. Selling and administrative expenses at the
beginning of the year reflected the significant 1992 investment in the sales
and marketing areas discussed above, but moved downward steadily as a
percentage of revenue through the first three quarters of 1993, as personnel
were trained and became more productive and administrative cost reduction
programs were implemented. Both operating and selling and administrative
expenses increased, in both dollars and as a percentage of revenue, in the
fourth quarter as a result of reorganization-related expenses, including
workforce reductions and relocations. While it is anticipated that such
increased costs will carry over into 1994, management believes that when
completed, the reorganization will improve efficiency and enhance margins.
CWM CORE BUSINESS (EXCLUDING RUST) Revenues were $661,860,000 in 1993
compared with $755,088,000 on a pro forma basis for 1992. The 12.3% net
decrease in 1993 revenue was attributable approximately .4% to price and 14.2%
to volume, partially offset by a 2.3% increase related to acquisitions. Price
decreases in chemical waste services were partially offset by price increases
in low-level radioactive waste services. Volume declines resulted from a
decline in environmental remediation projects generating hazardous waste for
offsite treatment and disposal at CWM facilities, an uncertain regulatory
environment regarding hazardous waste management, Superfund and other special
cleanup requirements for industry, the effects of the sluggish economy on CWM's
customers, and softness in the commercial hazardous waste incineration market,
leading to reduced pricing. CWM believes that there is currently excess capacity
in the incineration marketplace and that this situation will continue for the
foreseeable future. CWM's results were also impacted by reduced activity
resulting from the change in Federal government administration and unusual
weather in some western and eastern states in the first quarter of 1993 as well
as continuing efforts by American industry to reduce waste and manage it on
site. 1992 revenue was helped by disposal volume accelerating ahead of a
regulatory land-ban of certain waste categories which became effective in May of
that year.
Base business revenue declined approximately 7% and event business
revenue declined approximately 41% in 1993 compared with 1992. Event business
accounted for 10.6% of revenue in 1993 compared with 15.8% in 1992.
In the third quarter of 1993, CWM completed a study of its business and
announced a strategic reconfiguration of its operations to meet current market
demand. Among the actions CWM is taking as part of its program to reduce costs
and improve efficiency are elimination of approximately 1,200 positions by
year-end 1994, consolidation of operations in its treatment and land disposal
group, restructuring of its sales and service regions, sale of selected service
centers in marginal service lines and geographies, seeking of one or more joint
venture partners and
34
<PAGE>
consideration of other strategic alternatives for its Port Arthur, Texas
incinerator, and centralization of several functions to improve efficiencies.
CWM is restructuring its operations on the assumption that future base business
revenue growth, if any, will not keep pace with the economic recovery, and it
will not make investments which are primarily supported by event business
volumes.
In connection with the restructuring, CWM recorded a charge of
$550,000,000 before tax, including $381,000,000 to write down assets, primarily
incinerators, and $169,000,000 for probable cash expenditures (the majority of
which will be made by the end of 1994 except for closure, post-closure and
related costs at facilities closed or to be closed) related to actions CWM has
taken or plans to take as part of its program to reduce costs, improve
efficiency and structure the company to meet the current market demand. CWM
expects that the cash expenditures will be primarily funded by cash flow from
operations and income tax refunds. CWM estimates that the full impact of the
restructuring will reduce overhead, including depreciation and amortization, by
approximately $60 million annually.
Operating expenses (excluding special charges) as a percentage of
revenue were 76.5% in 1993 compared with 56.3% in 1992. The shift in revenue
mix toward an increased percentage of treatment revenue, which has lower
margins, compared to direct disposal services revenue, which has higher
margins, increased operating expenses in dollars as well as a percentage of
revenue in 1993. Also, a large component of operating expenses in the core
business is fixed and, as 1993 revenue decreased, such expenses increased as a
percentage of revenue.
Selling and administrative expenses as a percentage of revenue were
19.3% in 1993 compared with 15.4% in 1992. The increase is due primarily to the
decline in revenue.
WTI Revenues for 1993 increased 23%, to $1,142,219,000, compared with
pro forma revenue of $928,313,000 for the previous year. Approximately 40% of
this growth came from air and water quality control companies acquired during
1992 and 1993. Businesses acquired during 1993 significantly expanded WTI's
capability to meet the water and wastewater management needs of industrial
customers and provided entry into certain regional biosolids and air quality
equipment markets, as well as additional wastewater treatment technology.
Successful project development efforts are responsible for an additional 30% of
the 1993 revenue increase and include the full year impact of the North Broward
County trash-to-energy facility, the third quarter 1993 start of commercial
operations at WTI's NYOFCO biosolids pelletizer facility located in New York
City, and construction revenue from the Lisbon, Connecticut trash-to-energy
facility being built by WTI for the Eastern Connecticut Resource Recovery
Authority ("ECRRA"). Construction began in the third quarter of 1993 on the
Lisbon facility, which will be operated by WTI under a long-term contract with
ECRRA following scheduled facility completion in late 1995. Existing business
growth contributed the remaining 30% of revenue growth in 1993 compared with
1992. Major factors in this internal growth were higher revenues from air
quality control system construction and installation, and greater tonnage at
certain trash-to-energy facilities with related increases in trash disposal and
electrical generation revenue. Pricing for non-contract, or spot, trash
disposal remained, on average, at approximately 1992 levels. Energy businesses
represented approximately 52% of consolidated 1993 revenue, while the water and
air businesses accounted for 32% and 16%, respectively.
On February 16, 1994, a Connecticut Superior Court judge issued his
decision on appeals of the Connecticut Department of Environmental Protection's
("DEP") issuance of a permit to construct the Lisbon, Connecticut trash-to-
energy facility currently being built by WTI. In his ruling, the judge agreed
with WTI's position on all issues raised in the appeals but remanded the permit
back to the DEP for further proceedings on an uncontested permit condition that
requires the Lisbon facility to dispose of only Connecticut waste. WTI intends
to pursue aggressively favorable resolution of this permit remand through
appropriate judicial and regulatory procedures. Although WTI believes that the
probability of an adverse determination as a result of the judge's remand order
is remote, such a determination could result in the permanent termination of
facility construction. Through a guarantee agreement with ECRRA, the facility's
owner, such consequences might require WTI to redeem the debt issued to finance
the facility. In the unlikely event this were to occur, the resulting payments
could have a material adverse impact on WTI's financial condition and results of
operations. The impact on the Company's consolidated financial condition and
results of operations, although adverse, would not likely be material.
Operating expenses increased to 69.4% of revenue in 1993 from 68.3% in
1992. This increase reflects primarily the effects, including the amortization
of goodwill associated with acquisitions, of changes in business mix brought
about by the growth of air and water operations. In part because they are less
capital intensive, these businesses typically have lower gross margins than
WTI's energy operations. Selling and administrative expenses increased in
absolute terms in 1993 compared with pro forma 1992 levels but decreased as a
percent of revenue to 9.4% for 1993 compared with 10.5% the previous year. The
decline is attributable to the integration of acquired companies into existing
businesses and to continuing company-wide administrative cost containment
efforts.
<PAGE>
WM INTERNATIONAL WM International revenue was $1,411,211,000 in 1993
compared with $1,445,734,000 in 1992. Components of revenue change are as
follows:
<TABLE>
<CAPTION>
Percentage
Increase/(Decrease)
- ----------------------------------------------------------------------------
<S> <C>
Price increases 3.7%
Volume (including start-ups) (6.2)
Purchased businesses 17.7
Foreign currency translation (17.6)
------
Total (2.4)%
======
</TABLE>
WM International was able to achieve revenue growth (excluding currency
translation) despite a depressed economy in Europe, which accounts for roughly
80% of total revenue, and the volume decrease which relates primarily to the
transition of the Hong Kong Chemical Waste Treatment Facility from the
construction phase of the project to the operational phase in the first quarter
of 1993. Price increases slowed in the second half of 1993 as inflation
declined. Landfill revenues were constrained by delays in obtaining permits,
particularly in Italy. While WM International continues to pursue attractive
acquisitions, it believes that it is
35
<PAGE>
now well positioned in many of its markets, and intends to be more selective
with respect to acquisitions.
WM International is also focusing on certain markets, particularly in
the developing countries of Asia, which offer few attractive acquisition
targets but present opportunities in environmental infrastructure projects
which WM International is pursuing. Growth in these markets will be dependent
on the ability of WM International to win and to finance such projects.
A significant portion of WM International's revenues arise in
currencies other than pounds sterling (its reporting currency) or U.S. dollars.
As a result, foreign currency movement has had and will continue to have an
impact on reported revenue, expenses and net income. Stated in pounds sterling,
WM International's revenue grew 15.3% in 1993 compared to 1992.
Operating expenses were 71.5% of revenue in both 1993 and 1992. Ongoing
improvements in operating efficiency and the effect of changes in country and
business mix of revenues were offset by increased goodwill amortization.
Selling and administrative expenses were 14.1% of revenue in 1993 compared with
14.6% in 1992. The improvement results from an expanded revenue base to absorb
the investment in country and corporate management and administrative
infrastructure, as well as the continuing integration of acquired businesses.
RUST Rust is an engineering and construction company with two broad
lines of business: engineering, construction and environmental and
infrastructure consulting services, and environmental remediation and other
on-site industrial services. Rust also operated an asbestos abatement business
through the first four months of 1993. This business was transferred to NSC
Corporation ("NSC") in May, 1993, in exchange for a 41% equity interest in NSC
and NSC's ownership interest in two industrial services businesses.
Excluding the effect of the asbestos abatement business, revenues
increased 16% in 1993 compared with 1992. Revenue by line of business is shown
in the following tables ($000's omitted):
<TABLE>
<CAPTION>
1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Engineering, construction and
consulting services $ 619,096 $ 798,340
Remediation and
industrial services 677,444 704,360
Asbestos abatement 144,510 31,765
---------- ----------
Total $1,441,050 $1,534,465
========== ==========
</TABLE>
Engineering, construction and consulting services revenue grew by 29%
in 1993. Acquisitions accounted for 17%, the result of domestic and
international acquisitions completed in 1993 and in the latter part of 1992.
Price/volume increases in 1993 (12%) were the result of the start-up of several
large projects, including one waste-to-energy plant and several
manufacturing/processing facilities. Backlog in this business line increased by
$219 million, to $719 million at December 31, 1993.
Remediation and industrial services revenue grew by 4% in 1993 compared
with 1992. A decline in revenue related to project delays and cancellations of
remedial projects by customers and prospective customers as a result of poor
economic conditions was more than offset by an increase in industrial services
revenues due to market share gains in existing businesses and 1992 and 1993
acquisitions. Backlog in this business line at December 31, 1993, was $653
million, an increase of $251 million from December 31, 1992.
Revenue from the WMX family of companies increased $117 million in
1993, to $243 million for the year. Approximately $86 million of this increase
related to engineering design and construction projects, with the balance
coming from consulting services.
Operating expenses as a percentage of revenue were 81.5% in 1993
compared with 85.3% in 1992. The improvement resulted from a shift in revenue
mix in favor of industrial services and environmental and infrastructure
consulting services and projects, which have relatively lower operating costs,
improvements in the profitability of the environmental and infrastructure
consulting businesses as a result of synergies realized by combining offices
with a resulting higher utilization of personnel, and improved operating
margins from Rust's international operations.
During 1992, Brand recorded a special charge of approximately $35.2
million pretax to write down its investment in its asbestos abatement business
and provide for certain restructuring costs related to the formation of Rust.
Rust had no special charges in 1993.
Selling and administrative expenses were 10.2% of revenue in 1993
compared with 10.1% in 1992. The increase is primarily due to acquisitions,
particularly the acquisition of EnClean, Inc. ("EnClean") in the third quarter
of 1993. Acquisitions tend to increase selling and administrative expenses as a
percentage of revenue initially but this reverses as the acquired businesses
are integrated into existing operations.
- ----------------------------------------------------------------------------
OTHER ITEMS:
GAINS FROM STOCK TRANSACTIONS OF SUBSIDIARIES AND EXCHANGE OF EXCHANGEABLE
LYONS Gains from stock transactions of subsidiaries arise when common stock
is issued by any of the Company's subsidiaries for acquisitions, public
offerings, or the exercise of employee stock options. Gains from the exchange
of Exchangeable LYONs arise when the holders of such securities exchange them
for common stock of CWM owned by the Company.
The significant increase in gains from stock transactions of subsidiaries
in 1992, compared with the 1991 and 1993 amounts, results from the gain
($240,000,000) recognized by the Company, CWM and WTI as a result of the
WM International IPO in April of that year. Gains from the exchange of
Exchangeable LYONs have declined as the market price of CWM shares has dropped
below the point at which an exchange creates an economic benefit to the holder
of the LYONs.
Gains on stock transactions of subsidiaries and the exchange of
Exchangeable LYONs may recur in the future; however, the
36
<PAGE>
amount or timing of any future gains is largely dependent upon the future market
price of the stock of the respective subsidiary. As such gains are recorded by
the Company, the minority interest in the related subsidiary will increase.
INTEREST The following table sets forth the components of consolidated
interest expense, net ($000's omitted):
<TABLE>
<CAPTION>
1991 1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest expense $279,941 $310,949 $401,469
Interest income (55,800) (57,693) (41,432)
Capitalized interest (111,383) (87,897) (100,591)
-------- -------- --------
Interest expense, net $112,758 $165,359 $259,446
======== ======== ========
</TABLE>
Net interest expense has increased during the three-year period,
partially as a result of a management decision, initially made in 1988, to
increase the leverage of the Company. The impact of that decision was mitigated
in 1992 by lower U.S. interest rates and by the use of the proceeds of the WM
International IPO to repay debt. Debt levels increased in 1993 to fund stock
repurchase programs, acquisitions and capital expenditures, and approximately
$130,000,000 paid to former stockholders of Brand who elected to receive cash
in connection with the Brand--Rust merger. Capitalized interest varies,
depending upon the level of capital projects such as solid waste landfills,
hazardous waste incineration facilities and trash-to-energy plants, that are in
process at any point in time.
MINORITY INTEREST Minority interest increased in 1992 compared with 1991
primarily as a result of the minority share of the gain recognized by CWM and
WTI on the WM International IPO, and the minority interest in WM International
following the IPO, as well as higher earnings from CWM and WTI. The decline in
1993 reflects the lower earnings of subsidiaries in that year and the minority
interest (approximately $78.6 million) in the special charge recorded by CWM.
SUNDRY INCOME, NET Sundry income was basically flat between 1991 and
1992 and increased in 1993 as a result of a gain recognized in the first
quarter by CWM on the sale of shares of common stock of WTI it had held for
investment, as well as the Company's increased equity in ServiceMaster Consumer
Services Limited Partnership ("ServiceMaster") and Wessex Water Plc ("Wessex").
INCOME TAXES In August 1993, the U.S. Congress passed and the President
signed the Omnibus Budget Reconciliation Act of 1993, which, among other
things, increased U.S. Federal income taxes for the Company and its domestic
subsidiaries, retroactive in certain cases to January 1, 1993. The provision
for income taxes for 1993 is approximately $34 million higher than would have
been the case under the 1992 tax law, as a result of the requirement to adjust
deferred income taxes in accordance with Statement of Financial Accounting
Standards ("FAS") No. 109, and to apply the higher tax rate effective January
1, 1993.
- ----------------------------------------------------------------------------
ACCOUNTING PRINCIPLES:
Effective January 1, 1992, the Company, CWM and WTI adopted FAS No. 106 and
FAS No. 109 issued by the Financial Accounting Standards Board ("FASB"). FAS
No. 106 requires that the expected costs of certain future postretirement
benefits other than pensions be charged to expense during the years in which
the employees render service. Previously, the companies recognized these costs
on a cash basis. FAS No. 109 required a change in the method of accounting for
income taxes to an asset and liability approach.
As permitted by the FASB, the Company recorded a charge, after tax and
minority interest, of $71,139,000 or $.14 per share, for the cumulative effect
of these accounting changes. The pro forma effect of these accounting changes
on 1991 and, except for the one-time charge, on 1992 earnings was not
significant.
The FASB has issued FAS No. 112--Employers' Accounting for
Postemployment Benefits--and FAS No. 115--Accounting for Certain Investments in
Debt and Equity Securities. The Company and its subsidiaries will be required
to adopt both Statements in the first quarter of 1994. Based upon its analysis
to date, the Company does not believe the adoption of FAS No. 112 will have a
material impact on its financial statements as its current accounting is
substantially in compliance with the new standard. Other than for short-term
investments which are currently accounted for in accordance with the new
statement, the Company does not have and does not contemplate acquiring
significant investments of the type covered in FAS No. 115.
- ----------------------------------------------------------------------------
ENVIRONMENTAL MATTERS:
The majority of the businesses in which the Company is engaged are
intrinsically connected with the protection of the environment. As such, a
significant portion of the Company's operating costs and capital expenditures
could be characterized as costs of environmental protection. While the Company
is faced, in the normal course of its business, with the need to expend funds
for environmental protection and remediation, it does not expect such
expenditures to have a material adverse effect on its financial condition or
results of operations because its business is based upon compliance with
environmental laws and regulations and its services are priced accordingly.
Such costs may increase in the future as a result of legislation or regulation;
however, the Company believes that in general it benefits from increased
government regulation, which increases the demand for its services, and that it
has the resources and experience to manage environmental risk.
As part of its ongoing operations, the Company provides for estimated
closure and post-closure monitoring costs over the operating life of disposal
sites as airspace is consumed. Such costs include a final cap and cover on the
site, methane gas and leachate management, and groundwater monitoring. The
accrual for closure and post-closure monitoring costs covers expenditures to be
incurred after a facility ceases to accept waste; to the extent similar costs
are incurred during the active life of a site, they are expensed as incurred as
normal operating costs of a disposal site.
The Company has also established procedures to evaluate potential
remedial liabilities at closed sites which it owns or operated, or to which it
transported waste, including 104 sites listed on the Superfund National
Priority List ("NPL") as of December 31, 1993. In the majority of situations,
the Company's connection with NPL sites relates to allegations that its
subsidiaries
37
<PAGE>
(or their predecessors) transported waste to the facilities in question, often
prior to the acquisition of such subsidiaries by the Company. The Company
routinely reviews and evaluates sites requiring remediation, including NPL
sites, giving consideration to the nature (e.g., owner, operator, transporter or
generator), and the extent (e.g., amount and nature of waste hauled to the
location, number of years of site operation by the Company, or other relevant
factors) of the Company's alleged connection with the site, the accuracy and
strength of evidence connecting the Company to the location, the number,
connection and financial ability of other named and unnamed potentially
responsible parties ("PRP's"), and the nature and estimated cost of the likely
remedy. Where the Company concludes that it is probable that a liability has
been incurred, provision is made in the financial statements. Cost estimates are
based upon management's judgement and experience in remediating such sites for
the Company as well as for unrelated parties, information available from
regulatory agencies as to costs of remediation, and the number, financial
resources and relative degree of responsibility of other PRP's who are jointly
and severably liable for remediation of a specific site, as well as the typical
allocation of costs among PRP's. These estimates sometimes involve a range of
possible outcomes. In such cases, the Company provides for the amount within the
range which constitutes its best estimate. If no amount within the range appears
to be a better estimate than any other amount, then the Company provides for the
minimum amount within the range, in accordance with FAS No. 5. See Note 4 to the
Consolidated Financial Statements for additional details regarding the Company's
environmental liabilities.
Estimates of the extent of the Company's degree of responsibility for
remediation of a particular site and the method and ultimate cost of
remediation require a number of assumptions and are inherently difficult, and
the ultimate outcome may differ from current estimates. However, the Company
believes that its extensive experience in the environmental services business,
as well as its involvement with a large number of sites, provides a reasonable
basis for estimating its aggregate liability. As additional information becomes
available, estimates are adjusted as necessary. While the Company does not
anticipate that any such adjustment would be material to its financial
statements, it is reasonably possible that technological, regulatory or
enforcement developments, the results of environmental studies or other factors
could alter this expectation and necessitate the recording of additional
liabilities which could be material. The impact of such future events cannot be
estimated at the current time.
The Company spent $26,100,000, $24,800,000 and $34,800,000 on remedial
activities at closed sites in 1991, 1992 and 1993, respectively, and
anticipates expenditures of approximately $51,700,000 in 1994.
In 1991, the Company recorded a charge of $296,000,000 before tax and
minority interest, to reflect its then-current estimate of environmental
remediation liabilities arising as a result of the Comprehensive Environmental
Response Compensation and Liability Act ("CERCLA"), at disposal sites
previously used or operated by the Company and its North American subsidiaries
or their predecessors. Amounts charged to income in 1992 and 1993 for
remediation liabilities were not material.
The Company has filed several lawsuits against approximately 160
insurance carriers seeking reimbursement for past and future remedial, defense
and tort claim costs at approximately 130 sites. The past cost portion of these
claims currently aggregates in excess of $200 million. The carriers have denied
coverage and are vigorously defending these claims. No amounts have been
recognized in the financial statements for any potential insurance recoveries.
The Company also becomes involved, in the normal course of business, in
judicial and administrative proceedings related to alleged violations of
licenses, permits, laws or regulations, or differing interpretations of
applicable requirements. From time to time, the Company pays fines and
penalties as a result of such proceedings. Such fines and penalties were not
material to the Consolidated Statements of Income for 1991, 1992 or 1993.
- ----------------------------------------------------------------------------
FINANCIAL CONDITION:
LIQUIDITY AND CAPITAL RESOURCES: The Company is in a service industry
and has neither significant inventory nor seasonal variation in receivables.
Accordingly, cash flow from operating activities is used primarily for the
purchase of property and equipment and acquisitions of businesses. The Company
had working capital of $99,958,000 at December 31, 1993, compared to
$128,800,000 at December 31, 1992. Current debt increased $156,817,000, a
result of the financing requirements discussed below. Accounts receivable
increased by $180,567,000 while accounts payable and accrued expenses increased
$105,121,000, both results of business growth and acquisitions. Smaller changes
in other current asset and current liability accounts represent the balance of
the decrease in working capital.
Long-term and short-term debt increased approximately $1.99 billion
from December 31, 1992 to December 31, 1993. Proceeds from the additional
borrowings were used to fund acquisitions (including increased equity
investments in ServiceMaster and Wessex), capital expenditures, the Brand
shares acquired for cash in connection with the Rust--Brand merger, and stock
repurchases by the Company and CWM.
At December 31, 1993, short-term and long-term debt (excluding WTI
project debt) were 52.5% of short-term debt and total capital (including
minority interest in subsidiaries). In October 1993, Standard and Poor's
Corporation announced that it had lowered its rating on the Company's long-term
debt from AA to AA-. The Company's short-term debt ratings were not affected.
Moody's Investors Service retained the Company's debt rating of A-1. The
Company believes its current debt ratings are among the best in its industry
and that it is well positioned and has adequate liquidity to meet its current
capital needs and finance anticipated growth. In addition, substantial cash is
provided by operating activities and a major portion of capital expenditures,
including acquisitions and development projects, is discretionary and could be
deferred if necessary. Management intends to place increased emphasis on
generating positive cash flows in 1994.
38
<PAGE>
ACQUISITIONS AND CAPITAL EXPENDITURES: Capital expenditures, including
$165,038,000, $330,530,000 and $443,535,000 for property and equipment of
purchased businesses in 1991, 1992 and 1993, respectively, are shown in the
following table ($000's omitted):
<TABLE>
<CAPTION>
1991 1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Land (primarily
disposal sites) $ 564,610 $ 639,489 $ 660,226
Buildings and
leasehold
improvements 187,024 196,680 195,472
Vehicles 293,805 270,712 373,055
Containers 159,153 168,721 231,586
Other equipment 382,226 687,593 702,374
---------- ---------- ----------
Total $1,586,818 $1,963,195 $2,162,713
========== ========== ==========
</TABLE>
During 1993, the Company and its principal subsidiaries acquired 97
businesses for $551,901,000 in cash and notes, 1,046,801 shares of the
Company's common stock and 1,635,471 shares of WTI common stock. During 1992,
118 businesses were acquired for $599,045,000 in cash and notes, 1,826,450
shares of the Company's common stock and 6,886,594 shares of common stock of
WTI. The Company intends to continue its acquisition program in 1994, but with
many of its strategic goals achieved, the emphasis will be on businesses that
promise above-average returns or meet remaining strategic objectives. The Board
of Directors has approved a capital expenditure budget of $1.55 billion,
including intangible assets relating to acquired businesses, for 1994. The
Company expects to finance this through cash flow from operations.
CAPITAL STRUCTURE: During 1988, the Company made the decision to finance
capital expenditures and acquisitions primarily by increasing leverage. During
1991, 1992 and 1993 the Company continued to finance these transactions
primarily through the use of debt, taking advantage of favorable interest rates.
In April 1992, WM International sold 75 million newly issued ordinary
shares, representing 20% of the post-offering outstanding shares of WM
International, to the public. Subsequent to this offering, the Company, CWM and
WTI owned 56%, 12% and 12% respectively, of the outstanding shares of WM
International. Proceeds of the offering, net of commissions and expenses,
amounted to approximately $700 million and were used to retire then outstanding
third party debt of WM International and to repay advances from the Company. In
connection with the formation of Rust on January 1, 1993, CWM transferred its
ownership in WM International to Rust.
The following table reflects the increased leveraging of the Company's
capital structure due to financing capital expenditures and acquisitions
primarily with debt (except for the WM International IPO discussed above):
<TABLE>
<CAPTION>
December 31
--------------------------------------
1991 1992 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Long-term debt as a percent
of total capital 35.8% 38.2% 49.4%
Short-term debt and long-term debt
as a percent of short-term debt
and total capital 39.6% 41.8% 52.5%
</TABLE>
The ratios shown above include Minority Interest in Subsidiaries as
part of total capital, and exclude project debt of WTI. A significant portion
of WTI's debt is project debt, the interest and principal of which is expected
to be paid by cash generated from operations of specific projects. The Company
believes that its percentage of debt to total capital can be supported by the
net cash provided by operating activities.
The Boards of Directors of each of WMX, CWM and WTI have authorized
their respective companies to repurchase shares of their own common stock in
the open market or in privately negotiated transactions. The programs extend
into 1994 in the case of CWM and 1996 in the case of WTI and WMX. During 1993,
WMX repurchased approximately 8.4 million of its shares and CWM repurchased
approximately 3.3 million of its shares. During 1992, WMX repurchased
approximately 7.6 million shares, WTI approximately 4.2 million shares and CWM
approximately 1.5 million shares.
Subsequent to December 31, 1993, the Company formed an Employee Stock
Benefit Trust and sold the 12.8 million shares of treasury stock held at year
end to the Trust in return for a 30-year, 7.33% note with interest payable
quarterly and principal due at maturity. The Company has agreed to contribute
to the Trust each quarter funds sufficient, when added to dividends on the
shares held by the Trust, to pay interest on the note as well as principal
outstanding at maturity. At the direction of an administrative committee
comprised of Company officers, the trustee will use the shares or proceeds from
the sale of shares to pay employee benefits, and to the extent of such payments
by the Trust, the Company will forgive principal and interest on the note.
Subsequent to December 31, 1993, WMX sold put options on 4.3 million
shares of its common stock. The put options give the holders the right at
maturity to require the Company to repurchase a share of its common stock at
specified prices, which range from $24.375 to $24.841 per share. The options
mature in November, 1994. The proceeds ($8,747,000) from the sale of the put
options were credited to additional paid-in capital.
39
<PAGE>
EXHIBIT 13.2
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
(000'S OMITTED EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1991 1992 1993
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE $7,550,914 $8,661,027 $9,135,577
- ---------------------------------------------------------------------------------------------
Operating Expenses $5,165,319 $5,945,762 $6,346,914
Special Charges 296,000 219,900 550,000
Selling and Administrative Expenses 910,935 1,048,047 1,128,202
Goodwill Amortization 61,682 77,144 94,391
Gains from Stock Transactions of Subsidiaries (38,046) (263,489) (15,109)
Gains from Exchange of Exchangeable LYONs (15,470) (191) -
Interest Expense 168,558 223,052 300,878
Interest Income (55,800) (57,693) (41,432)
Minority Interest 111,496 156,824 57,986
Sundry Income, Net (81,659) (86,741) (95,424)
- ---------------------------------------------------------------------------------------------
Income Before Income Taxes and Cumulative Effect
of Accounting Changes $1,027,899 $1,398,412 $ 809,171
Provision For Income Taxes 421,576 477,237 356,395
- ---------------------------------------------------------------------------------------------
Income Before Cumulative Effect of Accounting Changes $ 606,323 $ 921,175 $ 452,776
Cumulative Effect of Accounting Changes,
Net of Minority Interest in Portion
Relating to Subsidiaries--
Postretirement Benefits, Net of Tax - (36,579) -
Income Taxes - (34,560) -
- ---------------------------------------------------------------------------------------------
NET INCOME $ 606,323 $ 850,036 $ 452,776
=============================================================================================
AVERAGE SHARES AND EQUIVALENT SHARES OUTSTANDING 493,167 493,948 485,374
=============================================================================================
EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE:
Before Cumulative Effect of Accounting Changes $1.23 $1.86 $0.93
Cumulative Effect of Accounting Changes--
Postretirement Benefits - (.07) -
Income Taxes - (.07) -
- ---------------------------------------------------------------------------------------------
NET INCOME $1.23 $1.72 $0.93
=============================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
40
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1992 AND 1993
($000's OMITTED EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 6,473 $ --
Short-term investments 61,599 126,382
Accounts receivable, less reserve of
$57,493 in 1992 and $63,146 in 1993 1,574,798 1,762,091
Employee receivables 16,396 9,670
Parts and supplies 126,594 148,022
Costs and estimated earnings in excess of
billings on uncompleted contracts 379,841 339,364
Refundable income taxes 35,084 54,001
Prepaid expenses 307,587 337,990
- ----------------------------------------------------------------------------
Total Current Assets $ 2,508,372 $ 2,777,520
- ----------------------------------------------------------------------------
PROPERTY AND EQUIPMENT, at cost
Land, primarily disposal sites $ 3,048,834 $ 3,625,412
Buildings 1,101,827 1,223,139
Vehicles and equipment 6,141,322 6,856,044
Leasehold improvements 90,692 100,262
- ----------------------------------------------------------------------------
$10,382,675 $11,804,857
Less--Accumulated depreciation and
amortization (2,624,472) (3,035,398)
- ----------------------------------------------------------------------------
Total Property and Equipment, Net $ 7,758,203 $ 8,769,459
- ----------------------------------------------------------------------------
OTHER ASSETS
Intangible assets relating to acquired
businesses, net $ 2,779,616 $ 3,461,331
Funds held by trustees for acquisition or
construction 153,803 116,949
Sundry, including other investments 914,186 1,139,217
- ----------------------------------------------------------------------------
Total Other Assets $ 3,847,605 $ 4,717,497
- ----------------------------------------------------------------------------
Total Assets $14,114,180 $16,264,476
============================================================================
CURRENT LIABILITIES
Portion of long-term debt payable within
one year $ 597,674 $ 754,491
Accounts payable 724,418 818,501
Accrued expenses 852,436 863,474
Unearned revenue 205,044 241,096
- ----------------------------------------------------------------------------
Total Current Liabilities $ 2,379,572 $ 2,677,562
- ----------------------------------------------------------------------------
DEFERRED ITEMS
Income taxes $ 375,316 $ 448,706
Investment credit 30,606 27,006
Other 1,417,643 1,457,607
- ----------------------------------------------------------------------------
Total Deferred Items $ 1,823,565 $ 1,933,319
- ----------------------------------------------------------------------------
LONG-TERM DEBT, less portion payable within
one year $ 4,312,511 $ 6,145,584
- ----------------------------------------------------------------------------
MINORITY INTEREST IN SUBSIDIARIES $ 1,278,887 $ 1,348,559
- ----------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES $ $
- ----------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value (issuable
in series); 50,000,000 shares authorized;
none outstanding during the years $ -- $ --
Common stock, $1 par value; 1,500,000,000
shares authorized; 496,203,373 shares issued
in 1992 and 496,216,829 in 1993 496,203 496,217
Additional paid-in capital 708,296 668,470
Cumulative translation adjustment (166,566) (245,587)
Retained earnings 3,521,190 3,693,108
- ----------------------------------------------------------------------------
$ 4,559,123 $ 4,612,208
Less--Treasury stock; 6,026,274 shares in 1992
and 12,763,884 in 1993, at cost 204,490 425,097
1988 Employee Stock Ownership Plan 34,988 27,659
- ----------------------------------------------------------------------------
Total Stockholders' Equity $ 4,319,645 $ 4,159,452
- ----------------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity $14,114,180 $16,264,476
============================================================================
</TABLE>
The accompanying notes are an integral part of these balance sheets.
41
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
INCREASE (DECREASE) IN CASH
($000'S OMITTED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1991 1992 1993
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Income before cumulative effect of
accounting changes $ 606,323 $ 921,175 $ 452,776
Adjustments to reconcile income before
cumulative effect of accounting changes to
net cash provided by operating activities:
Depreciation and amortization 592,788 714,069 796,691
Deferred income taxes and investment credit 97,132 233,791 278,088
Interest on Liquid Yield Option Notes (LYONs) 34,804 36,424 37,162
Gain on sale of property and equipment, and
of investments by subsidiary (4,486) (4,659) (14,061)
Contribution to 1988 Employee Stock Ownership Plan 3,231 5,551 7,329
Gains from stock transactions of subsidiaries (38,046) (263,489) (15,109)
Gains from exchange of Exchangeable LYONs (15,470) (191) --
Special charges, net of tax and minority interest 181,112 116,375 285,300
Changes in assets and liabilities, net of effects of
acquired companies:
Receivables (100,023) (89,467) (112,489)
Other current assets (14,588) (350,315) 41,038
Sundry other assets (96,269) 39,862 (29,445)
Accounts payable 10,057 23,155 33,328
Accrued expenses and unearned revenue (26,253) 10,750 (301,039)
Deferred other items 33,853 (201,530) (147,321)
Minority interest in subsidiaries 211,480 79,140 84,037
- ----------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,475,645 $ 1,270,641 $ 1,396,285
- ----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Short-term investments $ 18,996 $ 72,913 $ (56,891)
Capital expenditures (1,409,780) (1,632,665) (1,719,178)
Proceeds from sale of property and equipment, and
of investments by subsidiary 66,991 95,942 134,169
Cost of acquisitions, net of cash acquired (459,812) (599,045) (551,901)
Other investments (140,387) 66,414 (185,256)
Purchase of Brand stock related to Rust merger -- -- (129,524)
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED FOR INVESTING ACTIVITIES $(1,923,992) $(1,996,441) $(2,508,581)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
42
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
1991 1992 1993
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from financing activities:
Cash dividends paid $(206,427) $ (246,050) $ (280,858)
Proceeds from issuance of indebtedness 943,511 1,274,549 3,407,759
Repayments of indebtedness (261,808) (807,682) (1,712,794)
Proceeds from exercise of stock options, net 27,507 49,391 12,018
Proceeds from Waste Management International
plc initial public offering -- 700,032 --
Stock repurchases by Company and subsidiaries (45,950) (339,966) (315,302)
Preferred stock redemption by subsidiary -- -- (5,000)
- -------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 456,833 $ 630,274 $ 1,105,823
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash $ 8,486 $ (95,526) $ (6,473)
Cash at beginning of year 93,513 101,999 6,473
- -------------------------------------------------------------------------------------------------------------------------
Cash at end of year $ 101,999 $ 6,473 $ --
=========================================================================================================================
The Company considers cash to include currency on hand
and demand deposits with banks.
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized $ 133,754 $ 186,628 $ 263,716
Income taxes, net of refunds received $ 355,556 $ 246,922 $ 331,803
Supplemental schedule of noncash investing and
financing activities:
LYONs converted into common stock of the Company $ 2,753 $ 2,390 $ 3,329
Exchangeable LYONs exchanged into common stock
of CWM owned by the Company $ 21,976 $ 340 $ --
Liabilities assumed in acquisitions of businesses $ 346,388 $ 405,558 $ 673,129
Fair market value of Company and subsidiary stock
issued for acquired businesses $ 168,331 $ 178,885 $ 64,500
</TABLE>
43
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
($000'S OMITTED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1988
Cumulative Employee
Additional Translation Stock
Common Paid-in Adjustment Retained Treasury Ownership
Stock Capital Gain/(Loss) Earnings Stock Plan
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 1, 1991 $488,665 $675,963 $ 34,851 $2,517,308 $ -- $43,770
- -----------------------------------------------------------------------------------------------------------------------------------
Net income for the year $ -- $ -- $ -- $ 606,323 $ -- $ --
Cash dividends -- -- -- (206,427) -- --
Stock issued upon exercise of stock options 1,371 12,813 -- -- (12,277) --
Treasury stock received in connection
with exercise of stock options -- -- -- -- 11,821 --
Contribution to 1988 ESOP (238,384 shares) -- -- -- -- -- (3,231)
Treasury stock received as settlement for claims -- -- -- -- 456 --
Common stock issued upon
conversion of LYONs 226 2,527 -- -- -- --
Common stock issued for acquisitions 3,359 30,371 -- -- -- --
Tax benefit of non-qualified
stock options exercised -- 12,867 -- -- -- --
Transfer of equity interests
among controlled subsidiaries -- (12,190) -- -- -- --
Cumulative translation adjustment
of foreign currency statements -- -- 5,612 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1991 $493,621 $722,351 $ 40,463 $2,917,204 $ -- $40,539
- -----------------------------------------------------------------------------------------------------------------------------------
Net income for the year $ -- $ -- $ -- $ 850,036 $ -- $ --
Cash dividends -- -- -- (246,050) -- --
Stock repurchase (7,588,300 shares) -- -- -- -- 257,950 --
Stock issued upon exercise of stock options 809 (19,000) -- -- (62,432) --
Treasury stock received in connection
with exercise of stock options -- -- -- -- 15,153 --
Contribution to 1988 ESOP (303,226 shares) -- -- -- -- -- (5,551)
Treasury stock received as settlement for claims -- -- -- -- 1,717 --
Stock issued upon conversion of LYONs 44 (2,200) -- -- (4,546) --
Stock issued for acquisitions 1,729 6,462 -- -- (3,352) --
Tax benefit of non-qualified
stock options exercised -- 20,303 -- -- -- --
Transfer of equity interests
among controlled subsidiaries -- (19,620) -- -- -- --
Cumulative translation adjustment
of foreign currency statements -- -- (207,029) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1992 $496,203 $708,296 $(166,566) $3,521,190 $204,490 $34,988
- ----------------------------------------------------------------------------------------------------------------------------------
Net income for the year $ -- $ -- $ -- $ 452,776 $ -- $ --
Cash dividends -- -- -- (280,858) -- --
Stock repurchase (8,443,400 shares) -- -- -- -- 278,363 --
Stock issued upon exercise of stock options 14 (8,749) -- -- (18,285) --
Treasury stock received in connection
with exercise of stock options -- -- -- -- 357 --
Contribution to 1988 ESOP (362,036 shares) -- -- -- -- -- (7,329)
Treasury stock received as settlement for claims -- -- -- -- 3,429 --
Stock issued upon conversion of LYONs -- (4,553) -- -- (7,882) --
Stock issued for acquisitions -- (4,655) -- -- (35,375) --
Tax benefit of non-qualified
stock options exercised -- 2,825 -- -- -- --
Transfer of equity interests
among controlled subsidiaries -- (24,694) -- -- -- --
Cumulative translation adjustment
of foreign currency statements -- -- (79,021) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 $496,217 $668,470 $(245,587) $3,693,108 $425,097 $27,659
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
44
<PAGE>
WMX TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(000's OMITTED IN ALL TABLES EXCEPT PER SHARE AMOUNTS)
NOTE 1
SUMMARY OF ACCOUNTING POLICIES
- ----------------------------------------------------------------------------
REVENUE RECOGNITION The Company recognizes revenue from long-term
engineering and construction contracts on the percentage-of-completion basis
with losses recognized in full when identified. Other revenues are recognized
when the services are performed.
PRINCIPLES OF CONSOLIDATION The Company's financial statements are
prepared on a consolidated basis and include the Company and its majority-owned
subsidiaries. All significant intercompany transactions and balances are
eliminated.
FOREIGN CURRENCY Certain foreign subsidiaries' assets and liabilities
are translated at the rates of exchange at the balance sheet date while income
statement accounts are translated at the average exchange rates in effect
during the period. The resulting translation adjustments are charged or
credited directly to stockholders' equity. Foreign exchange gains (losses)
(net of related income taxes and minority interest) of ($2,634,000), $5,100,000
and ($529,000) are included in the Consolidated Statements of Income for 1991,
1992 and 1993, respectively.
INCOME TAXES Effective January 1, 1992, the Company and its principal
subsidiaries changed their method of accounting for income taxes as a result of
the early adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("FAS 109"). The 1992 cumulative effect of this
change, after minority interest in the portion relating to Wheelabrator
Technologies Inc. ("WTI"), was a charge of $34,560,000, or $.07 per share. The
cumulative charge resulted primarily from increasing deferred taxes previously
discounted, a method not permitted under FAS 109, valuation allowances against
deferred tax assets and adjustments for rate differences. The proforma effect
of this accounting change on previously reported 1991 and, except for the
one-time charge, on 1992 earnings was not significant.
In accordance with FAS 109, the Company recorded an increase in the tax
provision of $14,000,000 in the third quarter of 1993 for the impact of the
Omnibus Budget Reconciliation Act of 1993 on deferred taxes.
The following tables set forth income before income taxes, showing
domestic and international sources, and the income tax provision indicating
amounts relating to the respective governmental entities shown, for the years
indicated:
<TABLE>
<CAPTION>
INCOME BEFORE INCOME TAXES 1991 1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $ 879,807 $1,214,342 $637,636
International 148,092 184,070 171,535
---------- ---------- --------
$1,027,899 $1,398,412 $809,171
========== ========== ========
INCOME TAX PROVISION (BENEFIT)
- ----------------------------------------------------------------------------
Current tax expense
U. S. Federal $ 276,988 $ 159,795 $137,966
State and local 58,701 46,208 30,715
Foreign 49,730 53,376 36,532
---------- ---------- --------
Total current $ 385,419 $ 259,379 $205,213
---------- ---------- --------
Deferred tax expense
U. S. Federal $ 21,262 $ 152,742 $ 92,171
State and local 3,318 38,319 30,284
Foreign 15,494 30,799 32,327
---------- ---------- --------
Total deferred $ 40,074 $ 221,860 $154,782
---------- ---------- --------
U. S. Federal benefit from
amortization of deferred
investment credit $ (3,917) $ (4,002) $ (3,600)
---------- ---------- --------
Total provision $ 421,576 $ 477,237 $356,395
========== ========== ========
The Federal statutory tax
rate in 1991, 1992 and 1993 is
reconciled to the effective tax
rate as follows:
- ----------------------------------------------------------------------------
Federal statutory rate 34.0% 34.0% 35.0%
State and local taxes, net of
Federal benefit 4.0 4.0 4.9
Amortization of deferred
investment credit (0.4) (0.3) (0.4)
Amortization of intangible assets
relating to acquired businesses 2.0 1.9 4.1
Federal tax credits (0.8) (0.6) (1.4)
Non-taxable gains on issuance of
stock by subsidiaries (1.3) (6.4) (0.7)
Non-deductible minority interest 4.0 3.4 2.9
Adjustment of deferred income
taxes due to Omnibus Budget
Reconciliation Act -- -- 1.7
Other, net (0.5) (1.9) (2.1)
---- ---- ----
Effective tax rate 41.0% 34.1% 44.0%
==== ==== ====
</TABLE>
45
<PAGE>
The Company uses the "deferral method" of accounting for investment
credit, whereby the credit is recorded in income over the composite life of the
related equipment.
Deferred income taxes result from the recognition, in different
periods, of revenue and expense for tax and financial statement purposes. For
1991, the primary components were the tax over financial statement depreciation
and the future tax benefits of the special charges discussed in Note 11. The
adoption of FAS 109 required a change in the method of accounting for income
taxes to an asset and liability approach. The primary components that comprise
the 1992 and 1993 deferred tax (assets) liabilities are as follows:
<TABLE>
<CAPTION>
1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Reserves not deductible until paid $ (484,778) $ (538,062)
Deferred revenue (28,352) (27,714)
Net operating losses and tax
credit carryforwards (20,176) (43,028)
Other (172,272) (104,059)
Valuation allowance 35,637 29,890
---------- ----------
Subtotal $ (669,941) $ (682,973)
---------- ----------
Property and equipment $ 845,420 $ 948,024
Other 199,837 183,655
---------- ----------
Subtotal $1,045,257 $1,131,679
---------- ----------
Net deferred tax liabilities $ 375,316 $ 448,706
========== ==========
</TABLE>
The Company's subsidiaries have approximately $21 million of
alternative minimum tax credit carryforwards that may be carried forward
indefinitely. Also, various subsidiaries have operating loss carryforwards of
approximately $225 million with expiration dates through the year 2008.
Valuation allowances have been established for uncertainties in realizing the
tax benefit of certain net loss carryforwards and tax benefits attributed to
the basis differences in certain assets. In 1993, the valuation allowance
decreased as a result of changes in legislation regarding tax amortization of
intangibles, partially offset by increases due to uncertainty of certain state
and foreign tax benefits.
The Company has concluded that development and expansion of its foreign
business requires that the undistributed earnings of its foreign subsidiaries
be reinvested indefinitely outside the United States. If the reinvested
earnings were to be remitted, the U.S. income taxes due under current tax law
would not be material.
The gain of $38,046,000 before minority interest in 1991 resulting from
the issuance of shares by Chemical Waste Management, Inc. ("CWM"), WTI and The
Brand Companies Inc. ("Brand"), the gain of $240,000,000 before minority
interest in 1992 resulting from the initial public offering of 75,000,000
ordinary shares of Waste Management International plc ("WM International") and
the gain of $15,109,000 before minority interest recognized by CWM and WTI in
connection with shares issued by Rust International Inc. ("Rust") as part of
the Brand merger in 1993 were non-taxable events. The Company intends to
control its investments in CWM and WTI, and the Company, WTI and CWM intend to
control their investments in WM International and Rust to maintain the
non-taxable status of the gains; therefore, deferred income taxes have not been
provided.
SHORT-TERM INVESTMENTS The Company's short-term investments primarily
consist of securities having an investment grade of not less than A and a term
to maturity generally of less than one year, and because the investments are
always held to maturity, are carried at cost. Such investments include, but are
not limited to, tax-exempt securities, certificates of deposit and Euro-dollar
time deposits.
The Financial Accounting Standards Board ("FASB") has issued Statement
No. 115--Accounting for Certain Investments in Debt and Equity Securities ("FAS
115"). The Company and its subsidiaries will be required to adopt this
statement in the first quarter of 1994. Other than the short-term investments
discussed above, which are accounted for in compliance with FAS 115, the
Company does not have and does not contemplate acquiring significant
investments of the type covered in FAS 115.
CELL DEVELOPMENT COST Preparation costs for individual secure land
disposal cells are recorded as prepaid expenses and amortized as the airspace
is filled. Significant costs capitalized for such cells include excavation and
grading costs, costs relating to the design and construction of liner systems
and gas collection and leachate collection systems. Unamortized prepaid cell
construction cost at December 31, 1992 and 1993, was $124,638,000 and
$146,985,000, respectively.
ENVIRONMENTAL LIABILITIES The Company provides for estimated closure
and post-closure monitoring costs over the operating life of disposal sites as
airspace is consumed. Such costs for U.S. landfills are estimated based on the
technical requirements of the Subtitle C and D Regulations of the U.S.
Environmental Protection Agency or the applicable state requirements, whichever
are stricter, and the proposed air emissions standards under the Clean Air Act,
and include such items as final cap and cover on the site, methane gas and
leachate management, and groundwater monitoring. Substantially the same
standards are applied to estimate costs for foreign sites, even though current
regulations in some foreign jurisdictions are less strict. The accrual for
closure and post-closure costs relates to expenditures to be incurred after a
facility ceases to accept waste; to the extent similar costs are incurred
during the active life of the site, they are expensed as incurred.
The Company has also established procedures to evaluate potential
remedial liabilities at closed sites which it owns or operated, or to which it
transported waste, including 104 sites listed on the Superfund National
Priority List (NPL). In the majority of situations, the Company's connection
with NPL sites relates to allegations that its subsidiaries (or their
predecessors) transported waste to the facilities in question, often prior to
the acquisition of such subsidiaries by the Company. The Company routinely
reviews and evaluates sites requiring remediation, including NPL sites, giving
consideration to the nature (e.g., owner, operator, transporter or generator),
and the extent (e.g., amount and nature of waste hauled to the location, number
of years of site operation by the Company, or other relevant factors) of the
Company's alleged connection with the site, the accuracy and strength of
evidence connecting the Company to the location, the number, connection and
financial ability of other named and unnamed potentially responsible parties
("PRP's") and the nature and estimated cost of the likely remedy. Where the
Company concludes that it is probable that a liability has been incurred,
provision is made in the financial statements, based upon management's
judgement and prior experience, for the Company's best estimate of the
liability. Such estimates are subsequently revised as deemed necessary as
additional information becomes available.
See Note 4 for additional information.
46
<PAGE>
CONTRACTS IN PROCESS Information with respect to contracts in process at
December 31, 1992 and 1993 is as follows:
<TABLE>
<CAPTION>
1992 1993
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Costs and estimated earnings on uncompleted contracts $ 3,924,029 $ 3,741,386
Less: Billings on uncompleted contracts (3,586,419) (3,474,386)
----------- -----------
Total contracts in process $ 337,610 $ 267,000
=========== ===========
</TABLE>
Contracts in process are included in the Consolidated Balance Sheets under
the following captions:
<TABLE>
<S> <C> <C>
Costs and estimated earnings in excess of billings on
uncompleted contracts $ 379,841 $ 339,364
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in unearned revenue) (42,231) (72,364)
----------- -----------
Total contracts in process $ 337,610 $ 267,000
=========== ===========
</TABLE>
All contracts in process are expected to be billed and collected within
five years.
Accounts receivable includes retainage which has been billed, but which is
not due pursuant to contract provisions until completion. Such retainage at
December 31, 1993, is $44,828,000, including $7,601,000 that is expected to be
collected after one year. At December 31, 1992, retainage was $26,897,000.
PROPERTY AND EQUIPMENT Property and equipment (including major repairs and
improvements) are capitalized and stated at cost. Items of an ordinary
maintenance or repair nature are charged directly to operations. Disposal sites
are carried at cost and to the extent this exceeds end use realizable value,
such excess is amortized over the estimated life of the disposal site. Disposal
site improvement costs are capitalized and charged to operations over the
shorter of the estimated usable life of the site or the improvement.
DEPRECIATION AND AMORTIZATION The cost, less estimated salvage value, of
property and equipment is depreciated over the estimated useful lives on the
straight-line method as follows: buildings--10 to 40 years; vehicles and
equipment--3 to 20 years; leasehold improvements--over the life of the
applicable lease.
INTANGIBLE ASSETS Intangible assets relating to acquired businesses as of
December 31, 1992 and 1993, consist primarily of the cost of purchased
businesses in excess of market value of net assets acquired ("goodwill"). Such
goodwill is being amortized on a straight-line basis over a period of forty
years. The accumulated amortization of intangible assets amounted to
$284,508,000 and $364,251,000 as of December 31, 1992 and 1993, respectively.
On an ongoing basis, the Company measures realizability of goodwill by
the ability of the acquired business to generate current and expected future
operating income in excess of annual amortization. If such realizability is in
doubt, an adjustment is made to reduce the carrying value of the goodwill. Such
adjustments have not historically been material to the Company's financial
statements.
CAPITALIZED INTEREST Interest has been capitalized on significant landfills,
trash-to-energy plants and other projects under development in accordance with
Statement of Financial Accounting Standards No. 34. Amounts capitalized and
netted against Interest Expense in the Consolidated Statements of Income were
$111,383,000 in 1991, $87,897,000 in 1992 and $100,591,000 in 1993.
GAIN RECOGNITION ON SALE OF SUBSIDIARIES' STOCK It is the Company's policy
to record in income gains from the sale or other issuance of previously unissued
stock by its subsidiaries.
RESTATEMENT Certain amounts in previously issued financial statements have
been restated to conform to 1993 classifications.
- --------------------------------------------------------------------------------
NOTE 2
BUSINESS COMBINATIONS
All significant businesses acquired through December 31, 1993, and treated as
poolings of interests have been included retroactively in the financial
statements as if the companies had operated as one entity since inception. All
businesses acquired through December 31, 1993, and accounted for as purchases
are included in the financial statements from the date of acquisition.
During 1991, the Company and its principal subsidiaries acquired 94
businesses for $459,812,000 in cash (net of cash acquired) and notes, 3,359,041
shares of the Company's common stock, 1,429,490 shares of Brand common stock and
3,162,476 shares of WTI common stock. In addition, in March 1991, CWM exercised
an option to acquire an additional 660,806 shares of Brand. Thirty-two of the
aforementioned 1991 acquisitions, which otherwise met pooling of interests
criteria, were not significant in the aggregate and, consequently, prior period
financial statements were not restated. The remaining acquisitions were
accounted for as purchases.
During 1992, the Company and its principal subsidiaries acquired 118
businesses for $599,045,000 in cash (net of cash acquired) and notes, 1,826,450
shares of the Company's common stock and 6,886,594 shares of common stock of
WTI. Twenty-seven of the aforementioned 1992 acquisitions, which otherwise met
pooling of interests criteria, were not significant in the aggregate and,
consequently, prior period financial statements were not restated. The remaining
acquisitions were accounted for as purchases.
During 1993, the Company and its principal subsidiaries acquired 97
businesses for $551,901,000 in cash (net of cash acquired) and notes, 1,046,801
shares of the Company's common stock and 1,635,471 shares of common stock of
WTI. These acquisitions were accounted for as purchases.
47
<PAGE>
The following summarizes the pro forma effect of businesses acquired
and accounted for as purchases (including those which otherwise met pooling of
interests criteria but were not significant in the aggregate) in 1991, 1992 and
1993 as if they had been acquired as of January 1 of the preceding year
(Unaudited):
<TABLE>
<CAPTION>
1991 1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue as reported $7,550,914 $8,661,027 $9,135,577
Revenue of purchased businesses
for period prior to acquisition
as stated above 892,947 1,000,812 290,613
---------- ---------- ----------
Pro forma revenue $8,443,861 $9,661,839 $9,426,190
========== ========== ==========
Income before cumulative effect of
accounting changes as reported $ 606,323 $ 921,175 $ 452,776
Net income of purchased businesses
for period prior to acquisition
as stated above 25,391 30,685 3,429
Adjustment for interest
and goodwill amortization (52,752) (59,229) (13,417)
---------- ---------- ----------
Pro forma income before cumulative
effect of accounting changes $ 578,962 $ 892,631 $ 442,788
========== ========== ==========
Earnings per share before cumulative
effect of accounting changes
as reported $ 1.23 $ 1.86 $ 0.93
Effect of purchased businesses prior
to acquisition as stated above (.06) (.05) (.02)
---------- ---------- ----------
Pro forma earnings per share
before cumulative effect
of accounting changes $ 1.17 $ 1.81 $ 0.91
========== ========== ==========
</TABLE>
In August 1991, CWM and WTI each acquired a 15% fully-diluted equity
interest in WM International, a corporation which holds substantially all of
the waste management and related service business interests of the Company
outside of North America. WTI acquired the shares by issuing approximately
12,000,000 shares of its common stock to the Company. CWM financed the purchase
by issuing a 10-year, convertible subordinated debenture to the Company in the
amount of $168,974,000 with interest payable at 6% per year. The debenture was
converted, in accordance with its terms, into 8,046,380 shares of CWM common
stock on December 31, 1992.
In April 1992, WM International sold 75,000,000 newly issued ordinary
shares, representing 20% of the post-offering outstanding shares of that
company, to the public. Following the offering, the Company, CWM and WTI owned
56%, 12% and 12%, respectively, of the outstanding shares of WM International.
Rust was formed on January 1, 1993, through the contribution by CWM of
its hazardous substance remediation services business, its approximately 56%
ownership in Brand and its 12% ownership interest in WM International, together
with certain other assets, and the contribution by WTI of its engineering and
construction and environment and infrastructure consulting businesses, its
London-based international engineering unit and certain other assets. On May 7,
1993, Brand was merged into a subsidiary of Rust. As of December 31, 1993, Rust
was owned approximately 56% by CWM and approximately 40% by WTI, with the
remaining shares held by the public.
- -------------------------------------------------------------------------------
NOTE 3
DEBT
The details relating to debt (including capitalized leases, which are not
material) as of December 31, 1992 and 1993, are as follows:
<TABLE>
<CAPTION>
1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper, interest 3.19% to 3.58% $ 837,733 $1,376,197
Tailored Rate ESOP Notes, interest 2.68% to 2.87% 50,000 50,000
Debentures, interest 8-3/4%, due 2018 250,000 249,085
Notes, interest 4-5/8% to 7.875%, due 1995-2011 1,074,500 2,200,000
Step-Up Notes, interest 4.1% through September 30,
1994 and 7.7% thereafter, due 2002 300,000 300,000
Solid waste disposal revenue bonds,
interest 6% to 9.75%, due 1994-2013 284,720 280,685
Installment loans and notes payable,
interest 6% to 9.4%, due 1994-2020 555,439 978,691
Project Debt, interest 2.5% to 13-7/8%,
due 1994-2010 894,970 810,612
Other long-term borrowings 37,129 35,616
Liquid Yield Option Notes, zero coupon-
subordinated, interest 9%, due 2001 13,618 11,334
Liquid Yield Option Notes, zero coupon-
subordinated, interest 6%, due 2012 409,216 426,005
Liquid Yield Option Notes, zero coupon-
subordinated, interest 6%, due 2010 202,860 181,850
---------- ----------
Total debt $4,910,185 $6,900,075
Less--current portion 597,674 754,491
---------- ----------
Long-term portion $4,312,511 $6,145,584
========== ==========
</TABLE>
The long-term debt as of December 31, 1993, is due as follows:
<TABLE>
<S> <C>
Second year $ 982,945
Third year 2,557,849
Fourth year 667,204
Fifth year 148,138
Sixth year and thereafter 1,789,448
----------
$6,145,584
==========
</TABLE>
Certain of the Company's borrowings are redeemable at the option of the
holders prior to maturity. Such amounts and certain other borrowings which
would otherwise be classified as current liabilities have been classified as
long-term debt because the Company intends to refinance such borrowings on a
long-term basis and has available $1,805,000,000 of committed long-term
borrowing facilities. The committed facilities provide for
48
<PAGE>
unsecured long-term loans at interest rates of prime, Federal funds to Federal
funds plus one-half percent, money market rate, or LIBOR plus one-quarter to
one-half percent and commitment fees of 10 to 12.5 basis points per annum.
There are no compensating balance requirements or any informal arrangements in
connection with loans which would be made under these facilities.
In April 1985, the Company issued and sold Convertible Liquid Yield
Option Notes ("Convertible LYONs") in the principal amount at maturity of
$840,000,000 due in 2001. The Convertible LYONs, which are zero-coupon notes
subordinated to all existing and future senior debt, were originally priced to
yield 9% if held to maturity, are convertible into 34.88 shares of the
Company's common stock per Convertible LYON, subject to adjustment, and are
redeemable at the option of the individual noteholders. During 1992 and 1993,
5,054 and 6,582 Convertible LYONs were converted into 176,257 and 229,561
shares of the Company's common stock, respectively. As of December 31, 1993,
there were 21,088 Convertible LYONs outstanding with a maturity value amounting
to $21,088,000.
In November 1988, the Company issued and sold $1,620,000,000 principal
amount at maturity of Exchangeable Liquid Yield Option Notes ("Exchangeable
LYONs") due in April 2012. The Exchangeable LYONs, which are zero-coupon notes
subordinated to all existing and future senior debt, will yield 6% if held to
maturity and are exchangeable at the option of the holder at any time, at the
rate per Exchangeable LYON of 17.218 shares of CWM common stock owned by the
Company, subject to adjustment. The Exchangeable LYONs are redeemable by the
Company at a price equal to the issue price plus accrued original issue
discount to the redemption date. The Exchangeable LYONs will be purchased for
cash by the Company at the option of the holder on June 30, 1994, and on each
June 30 thereafter prior to maturity, at a price determined in the manner
described above. As of December 31, 1993, there were 1,255,395 Exchangeable
LYONs outstanding with a maturity value amounting to $1,255,395,000.
In August 1990, CWM issued and sold Convertible Liquid Yield Option
Notes ("CWM LYONs") in the principal amount at maturity of $575,000,000, due in
August 2010. The CWM LYONs, which are zero-coupon notes subordinated to all
existing and future senior debt of CWM, will yield 6% if held to maturity, and
are convertible at the option of the holder at any time into 11.676 shares of
CWM common stock per CWM LYON, subject to adjustment. The CWM Convertible LYONs
are redeemable by CWM at a price equal to the issue price plus accrued original
issue discount to the redemption date. The CWM Convertible LYONs will be
purchased for cash by CWM at the option of the holder on June 30, 1994, and on
each June 30 thereafter prior to maturity, at a price determined in the manner
described above. As of December 31, 1993, there were 485,800 CWM LYONs
outstanding with a maturity value of $485,800,000.
In July 1992, the Company issued $250,000,000 of 6.375% Notes due July
1, 1997 at a price of 98.85%. In October 1992, the Company issued $300,000,000
of Step-Up Notes, at par, due October 1, 2002, the holders of which may elect
to have the Step-Up Notes or any portion thereof repaid on October 1, 1994, at
100% of their principal amount together with accrued interest. The interest
rate on the Step-Up Notes is 4.1% through September 30, 1994, increasing to
7.7% through maturity. Neither of these two issues of debt securities is
redeemable at the option of the Company prior to maturity.
In December 1992, the Michigan Strategic Fund issued and sold
$35,000,000 of 6-5/8% Limited Obligation Revenue Bonds (Waste Management, Inc.
Project), Series 1992, maturing December 1, 2012, and loaned the proceeds to
the Company.
In January 1993, the Company issued $250,000,000 of 4-7/8% Notes due
July 1, 1995, at a price of 99.75%. In April 1993, the Company issued
$200,000,000 of 4-5/8% Notes due April 14, 1996 at a price of 99.516%. In June
1993, the Company issued $300,000,000 of 4-7/8% Notes due June 15, 1996 at a
price of 99.628%. In December 1993, the Company issued $500,000,000 of 6-3/8%
Notes due December 1, 2003 at a price of 99.875%. These Notes are not
redeemable prior to maturity.
In November 1993, the Michigan Strategic Fund issued and sold
$35,000,000 of 6% Limited Obligation Revenue Bonds (WMX Technologies, Inc.
Project), Series 1993, maturing December 1, 2013, and loaned the proceeds to
the Company. The unexpended bond proceeds held by the trustee at December 31,
1993, amounted to $18,336,000 and were invested in Euro-dollar time deposits.
The Company intends to refinance portions of the long-term debt due in
1995 and thereafter and, if necessary, other borrowings which are redeemable at
the option of the holders prior to maturity, using long-term facilities which
are available at the time.
Subsequent to December 31, 1993, WM International entered into interest
rate swap agreements, interest rate collars, forward interest rate agreements,
interest rate swap options and arrears swap agreements to reduce the impact of
changes in interest rates on its underlying investments and variable rate
borrowings. These agreements have been made with several commercial banks in
five currencies and have a total notional principal amount of $295,000,000.
While WM International is exposed to market risk to the extent that receipts
and payments under interest rate agreements are affected by market interest
rates, any such fluctuations will be offset by changes to interest receipts or
payments made on variable rate investments and borrowings. WM International is
also exposed to credit loss in the event of nonperformance by the other parties
to the interest rate swap agreements. However, WM International does not
anticipate nonperformance by the counterparties. The termination dates for
these agreements range from 1994 to 1999.
- ----------------------------------------------------------------------------
NOTE 4
ENVIRONMENTAL COSTS AND LIABILITIES
The Company is in the environmental services industry and the majority of
its operations are involved with the protection of the environment. As a
result, a material portion of consolidated revenue, operating expenses and
capital expenditures is directly or indirectly related to such matters. While
the Company is faced, in the normal course of its business, with the need to
expend funds for environmental protection and remediation, it does not expect
such expenditures to have a material adverse effect on its financial condition
or results of operations because its business is based upon compliance with
environmental laws and regulations and its services are priced accordingly.
The Company provides for closure and post-closure monitoring
49
<PAGE>
costs over the operating life of disposal sites as airspace is consumed. The
accrual for closure and post-closure costs relates to expenditures to be
incurred after a facility ceases to accept waste. Similar costs incurred during
the active life of a site are charged to expense as incurred.
The Company also provides for its estimated share of the cost of
necessary remediation at sites which it owns or operated or to which it
transported waste. Cost estimates are based upon management's judgement and
experience in remediating such sites for the Company as well as for unrelated
parties, information available from regulatory agencies as to costs of
remediation, and the number, financial resources and relative degree of
responsibility of other PRP's who are jointly and severably liable for
remediation of a specific site, as well as the typical allocation of costs
among PRP's. These estimates sometimes are a range of possible outcomes. In
such cases, the Company provides for the amount within the range which
constitutes its best estimate. If no amount within the range appears to be a
better estimate than any other amount, then the Company provides for the
minimum amount within the range in accordance with Statement of Financial
Accounting Standards No. 5 ("FAS 5"). The Company believes that it is
"reasonably possible'', as that term is defined in FAS 5 ("more than remote but
less than likely"), that its potential liability at the high end of such ranges
would be approximately $150 million higher in the aggregate than the current
estimate as of December 31, 1993.
Estimates of the extent of the Company's degree of responsibility for
remediation of a particular site and the method and ultimate cost of
remediation require a number of assumptions and are inherently difficult, and
the ultimate outcome may differ from current estimates. However, the Company
believes that its extensive experience in the environmental services business,
as well as its involvement with a large number of sites, provides a reasonable
basis for estimating its aggregate liability. As additional information becomes
available, estimates are adjusted as necessary. While the Company does not
anticipate that any such adjustment would be material to its financial
statements, it is reasonably possible that technological, regulatory or
enforcement developments, the results of environmental studies or other factors
could alter this expectation and necessitate the recording of additional
liabilities which could be material. The impact of such future events cannot be
estimated at the current time.
As of December 31, the Company had recorded liabilities for closure and
post-closure monitoring and environmental remediation costs as follows:
<TABLE>
<CAPTION>
1992 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Current portion, included in
Accrued Expenses $157,931 $130,863
Non-current portion, included
in Other Deferred Items 718,991 745,637
-------- --------
Total $876,922 $876,500
======== ========
</TABLE>
The reduction in the current portion from 1992 to 1993 is primarily
attributable to the settlement of a portion of the Company's liability at a
Superfund site.
Where the Company believes that both the amount of a particular
environmental liability and the timing of the payments are reliably
determinable, the cost in current dollars is inflated at 3% until expected time
of payment and then discounted to present value at 7%. Had the Company not
discounted any portion of its liability, the amount recorded would have been
increased by approximately $154 million at December 31, 1993.
The Company's active landfill sites have estimated remaining lives
ranging from one to over 100 years based upon current site plans and
anticipated annual volumes of waste. During this remaining site life, the
Company will provide for an additional $937,000,000 of closure and post-closure
costs, including accretion for the discount recognized to date.
The Company has filed several lawsuits against approximately 160
insurance carriers seeking reimbursement for past and future remedial, defense
and tort claims costs at approximately 130 sites. The past cost portion of
these claims currently aggregates in excess of $200 million. The carriers have
denied coverage and are vigorously defending these claims. No amounts have been
recognized in the financial statements for any potential insurance recoveries.
- ----------------------------------------------------------------------------
NOTE 5
STOCK OPTIONS
The Company has four stock option plans currently in effect: the 1992 Stock
Option Plan (the "1992 Plan"), the 1992 Stock Option Plan for Non-Employee
Directors (the "Directors' Plan"), the Replacement Stock Option Plan (the
"Replacement Plan") and the 1990 ServiceShares Stock Option Plan (the
"ServiceShares Plan").
Options granted under the 1992 Plan and the ServiceShares Plan are
generally exercisable in equal cumulative installments over a three- to
five-year period beginning one year after the date of grant. Options granted
under the Directors' Plan become exercisable in five equal annual installments
beginning six months after the date of grant.
Under the 1992 Plan, non-qualified stock options may be granted at a
price equal to 100% of the market value on the date of grant, for a term of not
less than five years nor more than ten years. Twelve million five hundred
thousand shares of the Company's common stock were initially reserved for
issuance under this plan.
Pursuant to the Directors' Plan, 150,000 shares of the Company's common
stock were initially reserved. Options for 15,000 shares are to be granted, at
the time of election to the board, to each person who is not an officer or
full-time employee of the Company or any of its subsidiaries.
Under the Replacement Plan, the Compensation and Stock Option Committee
of the Board of Directors ("Committee") may, until August 1, 1997, grant
options for a total of not more than 1,000,000 shares of the Company's common
stock to eligible individuals in connection with acquisitions. The purchase
price and exercise dates of options granted under the Replacement Plan are
determined by the Committee. It is anticipated that the options will be granted
by the Committee on economic terms which will match the acquired companies'
options being replaced.
Under the ServiceShares Plan, 5,000,000 shares of the Company's common
stock have been reserved for issuance upon exercise of non-qualified options.
Options may be granted at a price equal to 100% of the market value on the date
of grant, for a term of not less than five years nor more than ten years.
Generally, full-time employees who are not represented by a bargaining unit,
have three years of service with the Company and are not covered by another
Company option plan are eligible to participate in this plan.
50
<PAGE>
The status of the plans (including predecessor plans under which
options remain outstanding) during the three years ended December 31, 1993, was
as follows:
<TABLE>
<CAPTION>
Shares Option Price
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
January 1, 1991--
Outstanding 8,063 $ .76 - $41.63
Available for future grant 12,136 --
1991--
Granted 2,497 $33.44 - $39.50
Exercised 1,677 $ .76 - $35.44
Cancelled 240 $ 3.20 - $41.63
Reduction in shares available under the Replacement Plan 3,000 --
------
December 31, 1991--
Outstanding 8,643 $ 3.20 - $41.63
Available for future grant 6,879 --
------
1992--
Granted 4,003 $33.44 - $41.80
Exercised 2,562 $ 3.20 - $35.44
Cancelled 301 $ 7.95 - $41.80
Shares cancelled upon expiration of the 1982 Plan 4,154 --
Additional shares reserved for future grant under 1992 plans 15,799 --
------
December 31, 1992--
Outstanding 9,783 $ 3.46 - $41.80
Available for future grant 14,822 --
------
1993--
Granted 2,957 $30.90 - $38.45
Exercised 551 $ 3.46 - $35.44
Cancelled--
1982 Plan 179 $18.84 - $41.80
Current plans 328 $30.69 - $41.80
------
December 31, 1993--
Outstanding 11,682 $ 4.33 - $41.80
Available for future grant 12,193 --
======
Options were exercisable with respect to 5,584,959 shares
at December 31, 1993.
</TABLE>
- ----------------------------------------------------------------------------
Note 6
CAPITAL STOCK
The Board of Directors has the authority to create and issue up to
50,000,000 shares of $1 par preferred stock at such time or times, in such
series, with such designations, preferences and relative participating,
optional or other special rights and qualifications, limitations or
restrictions thereof as it may determine. No shares of the preferred stock have
been issued.
Pursuant to a plan adopted by the Company in January 1987, each share
of the Company's common stock carries the right (referred to herein as a
"Right") to purchase one four-hundredth (subject to adjustment) of a share of
Series A Preferred Stock, $1.00 par value ("Preferred Stock"), at a price of
$68.75 (subject to adjustment). The Rights are tradeable only with the
Company's common stock until they become exercisable. The Rights become
exercisable ten days after the earlier of a public announcement that a person
has acquired 20% or more of the Company's outstanding voting stock or a
person's commencement or announcement of a tender or exchange offer that would
result in his owning 30% or more of the Company's outstanding voting stock. The
Rights are subject to redemption by the Company at a price of $.0125 per Right,
subject to certain limitations, and will expire on February 6, 1997. The
Preferred Stock carries certain preferential dividend and liquidation rights
and certain voting and other rights.
If the Company or its assets are acquired in certain merger or other
transactions after a person acquires Company voting stock or commences or
announces an offer as provided above, each holder of a Right may purchase at
the exercise price of the Right, shares of common stock of the acquiring
company having a market value of two times the exercise price of the Right. If
the Company is the survivor in certain merger transactions or in the event of
certain other "self-dealing" transactions, each holder of a Right may purchase
at the exercise price of the Right, shares of Preferred Stock having a market
value of twice the exercise price of the Right. Rights held by an acquiring
person become void upon the occurrence of such events.
51
<PAGE>
- ----------------------------------------------------------------------------
NOTE 7
EARNINGS PER SHARE
Earnings per share are computed on the basis of the weighted average number
of common and common equivalent shares outstanding during each year. Common
stock equivalents relate to the impact of options outstanding under the
Company's stock option plans.
The following table reconciles the number of common shares shown as
outstanding in the Consolidated Balance Sheets with the number of common shares
used in computing earnings per share:
1992 1993
- ----------------------------------------------------------------------------
[S] [C] [C]
Common shares issued, net of
treasury shares, per Consolidated
Balance Sheets 490,177 483,453
Effect of shares issuable under stock
options after applying the "treasury
stock" method 1,414 489
Effect of using weighted average
common shares outstanding
during the year 2,357 1,432
-------- --------
Common shares used in computing
earnings per share 493,948 485,374
======== ========
- ----------------------------------------------------------------------------
NOTE 8
COMMITMENTS AND CONTINGENCIES
The Company leases several of its operating and office facilities for
various terms. Rents charged to costs and expenses in the Consolidated
Statements of Income amounted to $189,112,000 in 1991, $195,092,000 in 1992 and
$181,168,000 in 1993. These amounts include rents under long-term leases,
short-term cancellable leases and rents charged as a percentage of revenue, but
are exclusive of financing leases capitalized for accounting purposes.
The long-term rental obligations as of December 31, 1993, are due as
follows:
First year $ 145,394
Second year 137,569
Third year 123,750
Fourth year 115,143
Fifth year 109,779
Sixth through tenth years 498,937
Eleventh year and thereafter 468,860
----------
$1,599,432
==========
Subsequent to December 31, 1993, WMX sold put options on 4.3 million
shares of its common stock. The put options give the holders the right at
maturity to require the Company to repurchase a share of its common stock at
specified prices, which range from $24.375 to $24.841 per share. The options
mature in November 1994. The proceeds ($8,747,000) from the sale of the put
options were credited to additional paid-in capital.
Insurance coverage in large amounts for non-sudden and accidental
Environmental Impairment Liability ("EIL") risk continues to be unavailable at
a cost which management believes is reasonable. The coverage terms and cost of
the limited EIL insurance which is available to the Company are such that
insurance has not been purchased. To satisfy existing government requirements,
the Company has secured EIL insurance coverage in amounts believed to be in
compliance with Federal and state law. The Company must either prefund or
reimburse the carrier for losses incurred under coverage of this policy. In the
event the Company continues to not purchase risk-transfer EIL insurance
coverage, the Company's net income could be adversely affected in the future if
uninsured losses were to be incurred.
The Company has issued or is a party to approximately 2,700 bank
letters of credit, performance bonds and other guarantees. Such financial
instruments (averaging approximately $552,000 each), including those provided
for affiliates and not otherwise recorded, are given in the ordinary course of
business. Because virtually no claims have been made against these financial
instruments in the past, management does not expect these guarantees will have
a material adverse effect on the consolidated financial position or results of
operations of the Company.
On February 16, 1994, a Connecticut Superior Court judge issued his
decision on appeals of the Connecticut Department of Environmental Protection's
("DEP") issuance of a permit to construct the Lisbon, Connecticut
trash-to-energy facility currently being built by WTI. In his ruling, the judge
agreed with WTI's position on all issues raised in the appeals but remanded the
permit back to the DEP for further proceedings on an uncontested permit
condition that requires the Lisbon facility to dispose of only Connecticut
waste. WTI intends to pursue aggressively favorable resolution of this permit
remand through appropriate judicial and regulatory procedures. Although WTI
believes that the probability of an adverse determination as a result of the
judge's remand order is remote, such a determination could result in the
permanent termination of facility construction. Through a guarantee agreement
with the Eastern Connecticut Resource Recovery Authority, the facility's owner,
such consequences might require WTI to redeem the debt issued to finance the
facility. In the unlikely event this were to occur, the resulting payments
could have a material adverse impact on WTI's financial condition and results
of operations. The impact on the Company's consolidated financial condition and
results of operations, although adverse, would not likely be material.
In the ordinary course of conducting its business, the Company becomes
involved in lawsuits, administrative proceedings and governmental
investigations, including antitrust and environmental matters. Some of these
proceedings may result in fines, penalties or judgements being assessed against
the Company which, from time to time, may have an impact on earnings for a
particular quarter or year. The Company does not believe that these
proceedings, individually or in the aggregate, are material to its business or
financial condition.
The Company is a party to a lawsuit that alleges that it and CWM
violated Federal securities laws by engaging in misrepresentations of, or
failing to disclose, material information concerning primarily the
overvaluation of certain of CWM's assets, principally its incineration
facilities, and the existence of certain adverse hazardous waste treatment and
disposal industry conditions and trends, and overstating CWM's and the
Company's earnings for 1992 and the first quarter of 1993 due to failure to
write down the value of such assets and other matters. The suit seeks to
represent a class of persons and to recover compensation for damages suffered
by those purchasing CWM's common stock during the period February 4 through
September 3, 1993, due to the previously described alleged violations. The
Company and CWM believe that they have meritorious defenses to this lawsuit and
intend to contest it vigorously.
52
<PAGE>
- ----------------------------------------------------------------------------
NOTE 9
BENEFIT PLANS
The Company has a defined benefit pension plan for all eligible non-union
domestic employees. The benefits are based on the employee's years of service
and compensation during the highest five consecutive years out of the last ten
years of employment. The Company's funding policy is to contribute annually the
minimum required amount determined by its actuaries.
Net periodic pension expense for 1991, 1992 and 1993, based on discount
rates of 10.0%, 8.75% and 8.5%, respectively, included the following components:
<TABLE>
<CAPTION>
1991 1992 1993
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost--benefits earned during the year $12,070 $12,922 $10,785
Interest cost on projected benefit obligation 8,367 9,320 9,507
Expected return on plan assets (10,627) (12,547) (11,055)
Net amortization and deferral (1,218) (813) (1,451)
------- ------- -------
Net periodic pension expense $ 8,592 $ 8,882 $ 7,786
======= ======= =======
</TABLE>
Assumptions as of December 31, which are used to determine the plan's
funded status at the respective dates and to compute pension expense for the
following year, are as follows:
<TABLE>
<CAPTION>
1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
Discount rate 8.5% 7.25%
Rate of increase in compensation levels 4.0% 4.0%
Expected long-term rate of return on assets 9.0% 9.0%
The following table sets forth the plan's funded status and the amount
recognized in the Company's Consolidated Balance Sheets at December 31, 1992
and 1993 for its pension plan:
</TABLE>
<TABLE>
<CAPTION>
1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit
obligations:
Accumulated benefit obligations,
including vested benefits of $77,749
and $118,597 at December 31, 1992 and
1993, respectively $ (92,929) $(136,830)
========= ==========
Projected benefit obligation $(121,594) $(164,094)
Plan assets at fair value, primarily
common stocks, bonds and
real estate 123,137 136,244
--------- ----------
Plan assets in excess of (less than)
projected benefit obligation $ 1,543 $ (27,850)
Unrecognized net loss 16,248 36,530
Unrecognized overfunding at date of
adoption (January 1, 1985) of
Statement of Financial Accounting
Standards No. 87, net of
amortization, being recognized
over 15 years (10,642) (9,317)
--------- ---------
Prepaid (accrued) pension cost
included in prepaid (accrued)
expenses $ 7,149 $ (637)
========= =========
</TABLE>
The Company participates in various multi-employer pension plans
covering certain employees not covered under the Company's pension plan,
pursuant to agreements between the Company and collective bargaining units who
are members of such plans. These plans are generally defined benefit plans;
however, in many cases, specific benefit levels are not negotiated with, or
known by the employer-contributors. Contributions of $17,188,000, $19,913,000
and $25,579,000 were made and charged to income in 1991, 1992 and 1993,
respectively.
The Company and its principal subsidiaries adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("FAS 106") on the immediate
recognition basis, effective as of January 1, 1992. This Standard requires that
the expected cost of future benefits be charged to expense during the years in
which the employees render service. Previously, the Company recognized these
costs, which relate primarily to health care costs and were not material, on a
cash basis.
The cumulative effect of this accounting change was to decrease income
for 1992 by $77,837,000 ($36,579,000, or $.07 per share, after tax and minority
interest), representing the amount of the unfunded obligation measured as of
January 1, 1992. The pro forma effect of this accounting change on previously
reported 1991 earnings and, except for the one-time charge, on 1992 earnings,
was not significant.
The following table analyzes the obligation included in other deferred
items on the Consolidated Balance Sheets as of December 31, 1992 and 1993:
<TABLE>
<CAPTION>
1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
Accumulated Postretirement
Benefit Obligations:
Retirees $55,579 $57,395
Other fully eligible participants 21,935 24,400
Other active participants 5,055 5,463
------- -------
$82,569 $87,258
Unrecognized:
Prior service cost -- 347
Gain/(loss) -- (2,658)
------- -------
$82,569 $84,947
======= =======
</TABLE>
For measurement purposes, a 12.0% annual rate of increase in the per
capita cost of covered health care claims was assumed for 1992; the rate was
assumed to decrease by 0.5% per year to 7.5% in 2001 and remain at that level
thereafter. Increasing the assumed health care cost trend by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1993 by approximately $7,643,000, and the
aggregate of the service and interest cost components of net postretirement
health care cost for 1993 by approximately $541,000. The weighted-average
discount rate used in determining the accumulated postretirement benefit
obligation for 1992 and 1993 was 8% and 7.25%, respectively.
The expense for postretirement health care benefits was $258,000 in
1991, $7,600,000 in 1992 and $7,300,000 in 1993. The service and interest
components of the expense for 1992 and 1993 were $2,900,000 and $4,700,000,
respectively, in 1992 and $3,000,000 and $4,300,000, respectively, in 1993.
The Company has an Employee Stock Ownership Plan ("1988 ESOP") for all
eligible non-union United States and Canadian employees. The benefits are based
on the employee's years of service and compensation. The Company contributes
each year an amount, if any, determined by the Board of Directors of the
Company.
53
<PAGE>
Information concerning the 1988 ESOP is as follows:
<TABLE>
<CAPTION>
1991 1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Expense recorded (contribution) $3,231 $5,551 $7,329
====== ====== ======
Interest expense on
1988 ESOP debt $2,749 $1,765 $1,510
====== ====== ======
Dividends on unallocated
1988 ESOP shares used
by the 1988 ESOP $ 926 $ 983 $ 964
====== ====== ======
</TABLE>
The Company has a Profit Sharing and Savings Plan ("PSSP") available to
certain employees. The terms of the PSSP call for annual contributions by the
Company as determined by a specific formula as well as a match of employee
contributions up to $500 per employee. Information concerning charges to
operations for the PSSP is as follows:
<TABLE>
<CAPTION>
1991 1992 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Company Contribution--
profit sharing $ -- $15,031 $ --
====== ======= =======
Company Contribution--
401(k) matching $8,139 $ 9,799 $11,589
====== ======= =======
</TABLE>
Rust and WTI also sponsor several non-contributory and contributory
defined contribution plans covering both salaried and hourly employees.
Contributions are generally based upon fixed amounts of eligible compensation
and amounted to $12,900,000, $16,300,000 and $33,000,000, during 1991, 1992 and
1993, respectively.
In November 1992, the FASB issued Statement No. 112, "Employers'
Accounting for Postemployment Benefits" ("FAS 112"). This new statement
establishes accounting standards for employers who provide benefits to former
or inactive employees after employment but before retirement. The Company is
required to adopt the new statement no later than 1994. The Company does not
believe that the adoption of FAS 112 will have a material impact on its
financial statements as its current accounting is substantially in compliance
with the new standard.
- ----------------------------------------------------------------------------
NOTE 10
COMPANY'S OPERATIONS IN DIFFERENT INDUSTRIES AND GEOGRAPHICAL AREAS
The Company provides comprehensive environmental, engineering and construction,
industrial and related services through five principal subsidiaries, each of
which operates in a relatively discrete portion of the environmental services
industry or geographic area. Waste Management, Inc. ("WMI"), formerly Waste
Management of North America, Inc., provides integrated solid waste services and
CWM provides hazardous waste collection, transportation, treatment and disposal
services in North America. WM International provides these services, as well as
trash-to-energy services outside North America. WTI is involved in trash-to-
energy and independent power projects, water and wastewater treatment, including
biosolids management, and air quality control, primarily in North America. Rust
serves the engineering, construction, environmental and infrastructure
consulting, hazardous substance remediation and on-site industrial and related
services markets.
Rust was formed on January 1, 1993 through the contribution by CWM of
its hazardous substance remediation services business, its approximately 56%
ownership in Brand, and its 12% ownership interest in WM International,
together with certain other assets, and the contribution by WTI of its
engineering and construction and environmental and infrastructure consulting
businesses, its London-based international engineering unit, and certain other
assets.
Whereas solid waste, hazardous waste and trash-to-energy operations are
performed by three distinct organizations in North America, these services are
provided internationally by a single management organization. Because of this
and the different business environment for international operations, the
Company considers WM International to be a discrete segment. Following is an
analysis of the Company's operations by major segment.
<TABLE>
<CAPTION>
Engineering, Trash-To-Energy, International
Construction, Water Treatment Waste Corporate
Solid Hazardous Industrial and Air Quality and Management and
Waste Waste Related Services Related Services Services Eliminations(1) Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1991
Revenue $3,961,111 $ 720,048 $1,236,979 $ 746,042 $1,075,070 $(188,336) $ 7,550,914
Operating expenses
including goodwill
amortization 2,612,787 405,038 1,066,888 517,076 772,794 (147,582) 5,227,001
Special charges 260,000 36,000 -- -- -- -- 296,000
Selling and
administrative
expenses 455,146 121,522 111,196 86,438 151,661 (15,028) 910,935
------------------------------------------------------------------------------------------------------------
Income from
operations $ 633,178 $ 157,488 $ 58,895 $ 142,528 $ 150,615 $ (25,726) $ 1,116,978
============================================================================================================
Identifiable assets $5,108,814 $1,405,632 $ 828,032 $2,535,678 $2,563,379 $ 130,775 $12,572,310
============================================================================================================
Depreciation and
amortization
expense $ 371,898 $ 62,702 $ 24,951 $ 35,776 $ 77,227 $ 20,234 $ 592,788
============================================================================================================
Capital expenditures(2) $ 973,294 $ 157,511 $ 82,548 $ 157,057 $ 182,742 $ 33,666 $ 1,586,818
============================================================================================================
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
Engineering, Trash-To-Energy, International
Construction, Water Treatment Waste Corporate
Solid Hazardous Industrial and Air Quality and Management and
Waste Waste Related Services Related Services Services Eliminations(1) Consolidated
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992
Revenue $4,309,614 $ 755,088 $1,441,050 $ 928,313 $1,445,734 $(218,772) $ 8,661,027
Operating expenses
including goodwill
amortization 2,911,971 425,359 1,228,749 633,614 1,033,263 (210,050) 6,022,906
Special charges 96,000 76,000 35,200 -- -- 12,700 219,900
Selling and
administrative
expenses 494,300 115,913 145,405 97,920 210,891 (16,382) 1,048,047
-----------------------------------------------------------------------------------------------------------
Income from
operations $ 807,343 $ 137,816 $ 31,696 $ 196,779 $ 201,580 $ (5,040) $ 1,370,174
===========================================================================================================
Identifiable assets $5,771,464 $1,651,206 $1,167,495 $2,619,635 $2,792,803 $ 111,577 $14,114,180
===========================================================================================================
Depreciation and
amortization
expense $ 422,793 $ 65,918 $ 36,425 $ 58,410 $ 113,670 $ 16,853 $ 714,069
===========================================================================================================
Capital expenditures(2) $1,066,863 $ 197,567 $ 132,228 $ 263,187 $ 264,761 $ 38,589 $ 1,963,195
===========================================================================================================
1993
Revenue $4,702,166 $ 661,860 $1,534,465 $1,142,219 $1,411,211 $(316,344) $ 9,135,577
Operating expenses
including goodwill
amortization 3,193,183 506,264 1,249,908 792,719 1,009,145 (309,914) 6,441,305
Special charge -- 550,000 -- -- -- -- 550,000
Selling and
administrative
expenses 547,413 128,058 155,753 107,276 198,969 (9,267) 1,128,202
-----------------------------------------------------------------------------------------------------------
Income from
operations $ 961,570 $ (522,462) $ 128,804 $ 242,224 $ 203,097 $ 2,837 $ 1,016,070
===========================================================================================================
Identifiable assets $6,912,271 $1,498,631 $1,625,413 $3,090,278 $3,315,621 $(177,738) $16,264,476
===========================================================================================================
Depreciation and
amortization
expense $ 461,963 $ 63,971 $ 52,300 $ 75,323 $ 121,050 $ 22,084 $ 796,691
===========================================================================================================
Capital expenditures(2) $1,139,004 $ 157,786 $ 132,683 $ 310,839 $ 403,326 $ 19,075 $ 2,162,713
===========================================================================================================
</TABLE>
(1) Includes corporate office expenses, corporate charges and elimination of
intercompany transactions.
(2) Includes property and equipment of purchased businesses.
55
<PAGE>
In addition to the markets served by WM International, the Company has
foreign operations in Canada and Mexico in its consolidated financial
statements, and CWM, WTI and Rust derive an immaterial amount of revenue from
outside the United States. The information relating to the Company's foreign
operations is set forth in the following tables:
United Other
States Europe Foreign Consolidated
- -------------------------------------------------------------------------------
1991
Revenue $ 6,250,710 $ 882,936 $417,268 $ 7,550,914
=========== ========== ======== ===========
Income from operations $ 942,060 $ 125,621 $ 49,297 $ 1,116,978
=========== ========== ======== ===========
Identifiable assets $ 9,806,024 $2,133,249 $633,037 $12,572,310
=========== ========== ======== ===========
1992
Revenue $ 6,973,822 $1,143,496 $543,709 $ 8,661,027
=========== ========== ======== ===========
Income from operations $ 1,161,365 $ 150,910 $ 57,899 $ 1,370,174
=========== ========== ======== ===========
Identifiable assets $11,124,070 $2,326,877 $663,233 $14,114,180
=========== ========== ======== ===========
1993
Revenue $ 7,483,316 $1,241,811 $410,450 $ 9,135,577
=========== ========== ======== ===========
Income from operations $ 788,524 $ 184,412 $ 43,134 $ 1,016,070
=========== ========== ======== ===========
Identifiable assets $12,676,240 $2,955,078 $633,158 $16,264,476
=========== ========== ======== ===========
No single customer accounted for as much as 2% of consolidated revenue
in 1991, 3% in 1992 and 4% in 1993.
- ----------------------------------------------------------------------------
NOTE 11
SPECIAL GAINS AND SPECIAL CHARGES
The Company's results of operations for 1991 include a special charge of
$296,000,000 before tax and minority interest, primarily to reflect then current
estimates of the environmental remediation liabilities at waste disposal sites
previously used or operated by the Company and its subsidiaries or their
predecessors. Results of operations for 1991 also include a pretax gain of
approximately $47,000,000 realized by WTI on the sale of its French abrasives
business.
Results for 1992 include a non-taxable gain of $240,000,000 (before
minority interest) resulting from the initial public offering by WM
International in April 1992, of 75,000,000 newly issued ordinary shares,
representing 20 percent of the post-offering outstanding shares.
During the second quarter of 1992, the Company recorded special charges
of $159,700,000 before tax and minority interest, primarily related to a
writedown of the Company's medical waste business and CWM incinerators in
Chicago, Illinois, and Tijuana, Mexico.
The writedown of the medical waste business resulted from a study by an
independent consultant commissioned by WTI in connection with WTI's ultimate
decision not to exercise its option to purchase this business. The WTI purchase
option was subsequently extended five years.
The CWM charges related in part to an agreement with the Illinois
Environmental Protection Agency concerning the Chicago incinerator. CWM also
revised its plans for a mobile hazardous waste incinerator in Tijuana following
a decision by the Mexican government requiring the unit's relocation. Although
the facility was never operated, funds had been expended to develop site
infrastructure and prepare for trial burns.
During the fourth quarter of 1992, the Company recorded a special
charge of $60,200,000 before tax and minority interest as a result of charges
by Brand and CWM to reflect a writedown of Brand's investment in its asbestos
abatement business and certain restructuring costs incurred by Brand and CWM
related to the formation of Rust.
During the third quarter of 1993, the Company recorded a special charge
of $550,000,000 before tax and minority interest as a result of CWM recording a
special asset revaluation and restructuring charge. The charge consisted of
$381,000,000 to write down assets, primarily incinerators, and $169,000,000
for the probable cash expenditures (the majority of which will be made by the
end of 1994 except for closure, post-closure and related costs at facilities
closed or to be closed) related to actions CWM has taken or plans to take as
part of its program to reduce costs, improve efficiency and structure CWM to
meet current market demand. CWM estimates that the full impact of the
restructuring will reduce overhead, including depreciation and amortization, by
approximately $60 million annually.
The Company's results for 1993 include a gain of $15,109,000 (before
minority interest) relating to the issuance of shares by the Company's Rust
subsidiary in the second quarter.
56
<PAGE>
- ----------------------------------------------------------------------------
NOTE 12
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of Statement of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments." The
estimated fair value amounts have been determined by the Company, using
available market information and commonly accepted valuation methodologies.
However, considerable judgement is necessarily required in interpreting market
data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the Company
or holders of the instruments could realize in a current market exchange. The
use of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts. The fair value estimates
presented herein are based on information available to management as of December
31, 1992 and December 31, 1993. Although management is not aware of any factors
that would significantly affect the estimated fair value amounts, such amounts
have not been revalued since those dates, and current estimates of fair value
may differ significantly from the amounts presented herein.
<TABLE>
<CAPTION>
December 31, 1992
- ----------------------------------------------------------------------------
Estimated
Carrying Fair
Amount Value
- ----------------------------------------------------------------------------
<S> <C> <C>
Liabilities--Debt:
Commercial paper $ 837,733 $ 838,164
Tailored rate ESOP notes 50,000 50,000
Debentures and notes 1,624,500 1,669,520
Solid waste disposal revenue bonds 284,720 306,730
Installment loans and notes payable 555,439 549,618
Project debt 894,970 1,042,843
Other long-term borrowings 37,129 37,320
Liquid Yield Option Notes 625,694 680,099
</TABLE>
<TABLE>
<CAPTION>
December 31, 1993
- ----------------------------------------------------------------------------
Estimated
Carrying Fair
Amount Value
- ----------------------------------------------------------------------------
<S> <C> <C>
Liabilities--Debt:
Commercial paper $1,376,197 $1,376,106
Tailored rate ESOP notes 50,000 50,000
Debentures and notes 2,749,085 2,864,222
Solid waste disposal revenue bonds 280,685 305,303
Installment loans and notes payable 978,691 991,118
Project debt 810,612 977,800
Other long-term borrowings 35,616 36,900
Liquid Yield Option Notes 619,189 611,121
</TABLE>
CASH AND SHORT-TERM INVESTMENTS
The carrying amounts of these items are a reasonable estimate of their fair
value.
DEBT
For debt issues that are publicly traded, fair values are based on quoted
market prices or dealer quotes. Due to the short-term nature of the ESOP notes,
their carrying value approximates fair value. Interest rates that are currently
available to the Company for issuance of debt with similar terms and remaining
maturities are used to estimate fair value for debt issues that are not quoted
on an exchange.
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
In the normal course of business, the Company is a party to financial
instruments with off-balance-sheet risk, such as bank letters of credit,
performance bonds and other guarantees, which are not reflected in the
accompanying balance sheets. Such financial instruments are to be valued based
on the amount of exposure under the instrument and the likelihood of
performance being required. In the Company's past experience, virtually no
claims have been made against these financial instruments. Management does not
expect any material losses to result from these off-balance-sheet instruments
and, therefore, is of the opinion that the fair value of these instruments is
zero.
57
<PAGE>
- ----------------------------------------------------------------------------
NOTE 13
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is an analysis of certain items in the
Consolidated Statements of Income by quarter for 1992 and 1993.
<TABLE>
<CAPTION>
Income
Before EPS Before
Cumulative Cumulative Earnings
Effect of Effect of (Loss)
Gross Accounting Accounting Per Share
1992 Revenue Profit Changes Changes ("EPS")
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First Quarter $2,020,078 $ 594,274 $192,094 $ .39 $ .25
Second Quarter 2,175,179 508,967 329,530 .66 .66
Third Quarter 2,262,690 693,613 216,746 .44 .44
Fourth Quarter 2,203,080 621,367 182,805 .37 .37
---------- ---------- -------- ----- -----
$8,661,027 $2,418,221 $921,175 $1.86 $1.72
========== ========== ======== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Net
Gross Income
1993 Revenue Profit (Loss) EPS(1)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter $2,135,341 $ 635,484 $199,285 $ .41
Second Quarter 2,290,582 687,447 217,724 .45
Third Quarter 2,322,745 139,081 (127,156) (.26)
Fourth Quarter 2,386,909 682,260 162,923 .34
---------- ---------- -------- -----
$9,135,577 $2,144,272 $452,776 $ .93
========== ========== ======== =====
</TABLE>
(1) The sum of the quarterly per share amounts does not equal the annual
amount due to rounding.
See Note 11 to Consolidated Financial Statements for a discussion of the
special gain and special charges affecting the 1992 second and fourth quarter
and full year results, and the special gain and the special charge affecting
the 1993 second and third quarter and full year results.
58
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
===============================================================================
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS OF WMX TECHNOLOGIES, INC.:
We have audited the accompanying consolidated balance sheets of WMX
Technologies, Inc. (formerly Waste Management, Inc.) (a Delaware corporation)
and Subsidiaries as of December 31, 1992 and 1993, and the related consolidated
statements of income, cash flows, and stockholders' equity for each of the three
years in the period ended December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WMX Technologies, Inc. and
Subsidiaries as of December 31, 1992 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in notes 1 and 9 to the consolidated financial statements,
effective January 1, 1992, the Company changed its methods of accounting for
income taxes and postretirement benefits other than pensions.
/s/ Arthur Andersen & Co.
Arthur Andersen & Co.
Chicago, Illinois
February 16, 1994
<PAGE>
EXHIBIT 21
----------
SUBSIDIARIES OF WMX TECHNOLOGIES, INC.
--------------------------------------
The following is a list of all direct and indirect subsidiaries of the
registrant as of March 1, 1994. The state or other jurisdiction of
incorporation or organization is indicated in parentheses following each
subsidiary's name. The names of the divisions or other business units of each
subsidiary are indented and listed below the relevant subsidiary's name.
A & B Builders, Inc. (Texas)
ABC Holdings GmbH (Germany)
Able Industrial Maintenance & Cleaning, Inc. (Illinois)
AeroMap U.S., Inc. (Alaska)
AeroMap U.S., Inc. (Florida)
Aero-Metric Engineering, Inc. (Wisconsin)
Afvalstoffen Terminal Moerdijk B.V. (Netherlands)
A. Grenet (France)
Air Survey Corporation of Virginia (Delaware)
A. Judges & Sons Ltd. (Ontario)
Alderfer & Frank, Inc. (Pennsylvania)
Alfred Crew Consulting Engineers, Inc. (New Jersey)
Allegheny Industrial Electrical Company, Inc. (Delaware)
ALPLAST (Germany)
Am.Eco S.r.l. (Italy)
American Waste Systems, Inc. (California)
Applied Environmental Consulting, Inc. (California)
Applied Environmental, Inc. (California)
Applied Geology (Central) (United Kingdom)
Applied Geology Limited (United Kingdom)
Applied Geology (South Wales) (United Kingdom)
Arabian Cleaning Enterprise, Ltd. (Saudi Arabia)
Arkansas Valley Waste Limited Partnership (Illinois)
Ark BV (Netherlands)
ARS - Waste Management, Ltd. (Illinois)
Aseo S.A. (Argentina)
Aspica s.r.l. (Italy)
Aurec (Germany)
Automated Disposal Systems, Inc. (Delaware)
Automotive Industrial Recyclers Holding Company (Florida)
Automative Industrial Recovery Systems, Inc. (Florida)
Auxiwaste SA (France)
Avica S.r.l. (Italy)
Avonmouth Recycling For Energy Limited (United Kingdom)
Bellenger Industrial & Commercial Services, Inc. (Missouri)
Beam Miljoservice Service A/S (Denmark)
<PAGE>
Belpar Chemical Services, Inc. (West Virginia)
Belpar Environmental, Inc. (Illinois)
Belpar Environmental of Virginia, Inc. (Virginia)
Benfur Engineering Company (Delaware)
Bensalem Power Company (Pennsylvania)
BICS of Tennessee, Inc. (Tennessee)
Bio-Energy Partners (Illinois)
Bio Gro Acquisition Sub, Inc. (Delaware)
Bio Gro Florida, Inc. (Florida)
Blastrac Europe Ltd. (United Kingdom)
Brand Air, Inc. (Delaware)
Brand Construction Services, Inc. (Delaware)
Brand Demolition Services, Inc. (Delaware)
Brand Environmental Services, Inc. (Delaware)
Brand Fire Protection Services, Inc. (Delaware)
Brand H & O, Inc. (New York)
Brand Industrial Services of Ontario, Inc. (Ontario)
Brand Industrial Transition, Inc. (Delaware)
Brand Insulations, Inc. (Illinois)
Brand Management Services Company, Inc. (Delaware)
Brand Marine Services, Inc. (Delaware)
Brand Marine/Utility Services, Inc. (Delaware)
Brand Merger Corp. (Delaware)
Brand MPC, Inc. (Delaware)
Brand Precision Blasting, Inc. (Delaware)
Brand Remediation Services, Inc. (Delaware)
Brand Scaffold Builders, Inc. (Delaware)
Brand Scaffold Rental & Erection, Inc. (Delaware)
Brand Scaffold Services of Canada, Ltd. (Ontario)
Brand Services, Inc. (Delaware)
BRINI of North America, Inc. (Connecticut)
Brundidge Waste Disposal Center, Inc. (Alabama)
Burton, Adams, Kemp & King, Inc. (North Carolina)
Bury House Limited (United Kingdom)
California Acquisition Sub, Inc. (Delaware)
C. A. van Vliet Containertransport (Netherlands)
C. A. van Vliet Techneik B.V. (Netherlands)
Cedar Hammock Refuse Disposal Corporation (Florida)
Waste Management of Manatee County
Waste Management of Sarasota County
Cemtech L.P. (Delaware)
Cemtech Management, Inc. (Delaware)
Central Service Corporation (Florida)
Ceriani Cave (Italy)
2
<PAGE>
Chamberlain Resources, Inc. (Arizona)
Charlotte Landscaping and Sanitation Services, Inc. (Florida)
Chemical Waste Management, Inc. (Delaware)
Controlled Waste
CWM Remedial Services
CWM Transportation
Technical Services
Trade Waste Incineration
Waste Reduction Services
Waste Separation Technologies
Chemical Waste Management Clemson Technical Center, Inc. (South Carolina)
Chemical Waste Management de Mexico, S.A. de C.V. (Mexico)
Chemical Waste Management of Baja California, Inc. (Delaware)
Chemical Waste Management of Indiana, Inc. (Indiana)
Chemical Waste Management of Kansas, Inc. (Kansas)
Chemical Waste Management of New Jersey, Inc. (New Jersey)
Chemical Waste Management of Pennsylvania, Inc. (Delaware)
Chemical Waste Management of the Northwest, Inc. (Washington)
Chem-Nuclear Systems, Inc. (Delaware)
Combined Plant Services Corp. (Delaware)
Community Refuse, Limited (Pennsylvania)
Compania Schreiber de Servicios (Spain)
Controlled Waste Materials, Inc. (Illinois)
Cord Industrienster Amsterdam (The Netherlands) B.V. (Netherlands)
Cord Industrienster Spykerisse BV (Netherlands)
Correct Maintenance Corporation (Indiana)
Cote D'Azur Assainissement (France)
Cote D'Azur Entretien (France)
County Wide Sanitation Partners, L.P. (Illinois)
Curbside Separation & Recycling Ltd. (Ontario)
CWM Cement, Inc. (Delaware)
CWM Chemical Services, Inc. (Delaware)
Chicago Incinerator Facility
Model City Facility
Memphis Service Facility
CWM Chemical Waste Management of Canada, Inc. (Canada)
CWM Consolidation Sub, Inc. (Delaware)
CWM Holdings, Inc. (Delaware)
CWM Resource Recovery, Inc. (Ohio)
Dalamiliho AB (Sweden)
Dan-Clean DK A/S (Denmark)
Dankompost APS (Denmark)
Davies Bros (Waste) Ltd & Greenwood (DB) Containers Ltd. (England)
Dearborn Computer Company, Inc. (Illinois)
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Dearborn Management Group, Inc. (Illinois)
Decker Disposal, Inc. (Florida)
Waste Management of Sarasota County
DeKlok Containers B.V. (Netherlands)
Delta Building and Investment Co., Inc. (Texas)
Demart (France)
Deponie Bentheim Entsorgung GMBH & Co KG (Germany)
Deponie Bentheim Entsorgung Verwaltungsgeskellschaft Mbh (Germany)
Derat France (France)
Derichebourg Services (France)
Diversified Scientific Services, Inc. (Tennessee)
Donohue JRP Ltd. (Hong Kong)
Downfield Services Ltd. (United Kingdom)
Drakeshore Development Ltd. (United Kingdom)
Dr. Born & Dr. Ermel GmbH (Germany)
Dr. Born - Dr. Ermel GmbH, Freital (Germany)
Dr. Ermel-Lentz & Partner GmbH (Germany)
Dunn Corporation (New York)
Dynastar, Inc. (Ohio)
Ecocentro (Italy)
Eco-Consult s.r.l. (Italy)
Ecol Italiana S.p.A. (Italy)
Ecol S.A. (Argentina)
Eco Panama S.A. (Panama)
Ecoservizi S.p.A. (Italy)
Eksjo Renhallning AB (Eksjo)
Eksso Renhallning AB (Sweden)
Elp GmbH (Germany)
EMICA S.r.l. (Italy)
EnClean Environmental Services Group, Inc. (Delaware)
EnClean Specialty Chemicals, Inc. (Delaware)
Enviro-Gro Technologies, Inc. (New York)
Enviro-Gro Technologies II, Inc. (New York)
Enviroland, Incorporated (Michigan)
Environmental Waste Concepts, Ltd. (Illinois)
Environment Service S.A. (France)
Enviropace Limited (Hong Kong)
Envirotech Operating Services, Inc. (Delaware)
Envirotech Operating Services (Petaluma), Inc. (Delaware)
Equipamentos Industriais Ltda. (Brazil)
Erco Tennessee, a general partnership (Tennessee)
Erland Bylunds Akeri AB (Sweden)
Escandell Associates, Inc. (Delaware)
EST Environment Service (France)
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Fempack Limited (United Kingdom)
Filtres Crepines Johnson (France) S.A. (France)
Fineco Italiana S.r.l. (Italy)
Fraktjanst AB (Sweden)
Franchi E Caserio S.r.l. (Italy)
Franz Schreiber GmbH (Germany)
Fratelli Visconti S.r.l. (Italy)
Fritz Ohlig GmbH & Co. Kommanditgesellschaft (Germany)
Gateway Waste Partners, L.P. (Illinois)
GCP Engineering Limited (Hong Kong)
Gebr. Van Vliet B.V. (Netherlands)
General Nuclear Systems, Inc. (Delaware)
General Sanitation Corporation (Florida)
Geological Reclamation Operations and Waste Systems, Inc. (Pennsylvania)
Burlington County Resource Recovery Facilities Complex
Meadowlands Baler Facility
Meadowland Recycling and Disposal Facility
Georgia Waste Systems, Inc. (Georgia)
B. J. Recycling and Disposal Facility
Georgia Waste Systems North
Rolling Hills Recycling and Disposal Facility
Waste Management of Augusta - Aiken
Waste Management of Atlanta
Waste Management of Cobb County
Waste Management of Macon
Gesam Gestione Servizi Ambientali S.p.A. (Italy)
Gestion Des Rebuts D.M.P. Inc. (Quebec)
WMI Mauricie Bois - Franc
WMI Parc Hirondelles
Gestione Servizi Ambientali S.p.A. (Italy)
GMI Holdings Ltd. (United Kingdom)
Gnosjo Renhallning AB (Sweden)
Grand Disposal Partners, L.P. (Illinois)
Green Valley Landfill Limited (Hong Kong)
Gulf Disposal, Inc. (Florida)
Gulf Coast Recycling and Disposal Facility
Gundersen/Viking Corp. (Delaware)
Haagse Recycling Maatschappij (HRM) B.V. (Netherlands)
Hall-ing Refuse Partners, L.P. (Illinois)
Harmony Sanitary Landfill Co. (Pennsylvania)
Harmony Landfill
Harris Disposal Service, Inc. (Florida)
Harris Sanitation, Inc. (Florida)
Hedco Landfill Limited (United Kingdom)
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Helsingin Puhdistuskone OY (Finland)
Hemmings Hygiene Limited (United Kingdom)
Henley Properties Inc. (Delaware)
Holiday Moss (Landfill) Limited (United Kingdom)
Holje Miljotransporter AB (Sweden)
Holland Industriediensten Amsterdam BV (Netherlands)
H. S. Sizemore & Son, Inc. (Texas)
Ibjorgensen Handelaktiesglsk A/B (Denmark)
Ibka Industriservice A/S (Denmark)
Ichochema B.V. (Netherlands)
Icopower B.V. (Netherlands)
Icosloop BV (Netherlands)
Icotech (Netherlands)
Icova B.V. (Netherlands)
Icova/Maltha Glascollecting B.V. (Netherlands)
ICRC Company (Delaware)
IGA Tabasaran GmbH (Germany)
IGM International S.p.A. (Italy)
IGM S.p.A. (Italy)
Industrial Waste Incorporated (Florida)
Infectious Waste Management Limited Partnership (Illinois)
Ingenieria Urbana S.A. (Spain)
Ingenieuroboro Fur Verfahrentechnik Dr. Born & Dr. Ermel GmbH (Germany)
International Coal Refinery Company (Delaware)
International Process Systems Canada Inc. (Ontario)
Intersearch Aktiengersellschaft (Germany)
IPS Quinte Inc. (Ontario)
IPU GmbH (Germany)
IRA S.r.l. (Italy)
Italrifiuti S.p.A. (Italy)
J & F Disposal Partners, L.P. (Illinois)
Jaartsveld Exploitatie B.V. (Netherlands)
Jaartiveld Groen & Milieu B.V. (Netherlands)
Jatekiito OY (Finland)
Jatekuuto OY (Finland)
Jatekyyti Oy (Finland)
JFS (Japan) Ltd. (Japan)
Jinyuan Power Limited Partnership (Delaware)
JLG Scaffolding Ltd. (British Columbia)
Johnson Filtration Systems Inc. (Delaware)
Johnson Filtration Systems Limited (United Kingdom)
Johnson Filtration Systems Limited (Ireland)
Johnson Filtration Systems Limited (United Kingdom)
Johnson Screens (Australia) Pty. Ltd. (Australia)
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J. Roger Preston & Partners (PNG) Pty Ltd. (Papva New Guinea)
JRP Consultants (Malaysia) SDN BHD (Malaysia)
Just-Altpapier-Verwertung GmbH (Germany)
Just GmbH Rohstoffe fur die Papierindustrie (Germany)
KAB/WMI SDN. BHD. (Malaysia)
Karlstad Bilfrakt AB (Sweden)
Karlstad Renhallnings AB (Sweden)
KDK Limited (United Kingdom)
K. D. Skott Limited (United Kingdom)
Keene Road Landfill, Inc. (Florida)
KH Associates Limited (United Kingdom)
Kennedy & Donkin Africa (Botswana) Partnership (Botswana)
Kennedy & Donkin Africa (Malawi) Partnership (Malawi)
Kennedy & Donkin Building Services Limited (United Kingdom)
Kennedy & Donkin Generation & Industrial Limited (United Kingdom)
Kennedy & Donkin Information Systems Ltd. (United Kingdom)
Kennedy & Donkin International Ltd. (Hong Kong)
Kennedy & Donkin Ltd. (United Kingdom)
Kennedy & Donkin (Middle East) Limited (Cyprus)
Kennedy & Donkin Overseas Ltd. (United Kingdom)
Kennedy & Donkin Power Ltd. (United Kingdom)
Kennedy & Donkin Quality Engineering Limited (United Kingdom)
Kennedy & Donkin Quality Incorporated (Delaware)
Kennedy & Donkin Systems Control Ltd. (United Kingdom)
Kennedy & Donkin Transportation Ltd. (United Kingdom)
Kennedy Scott Furphy (PTY) Limited (New South Wales Australia)
KNAB GmbH (Germany)
K.R. & C. Edwards Pty. Ltd. (New South Wales)
Krantz Miljo AB (Sweden)
Kuljetusliike Ralento OV (Finland)
Kulljestuslike Reipas OY (Finland)
Kvicksilver Atervinning I Karlskrona AB (Karlskrona)
Lake Disposal Partners, Ltd. (Illinois)
La Loggese S.r.l. (Italy)
Landskrona-Svalovs Renhallnings AB (Sweden)
Les Services Sanitaires M. J. Lavoie Inc. (Quebec)
Lichliter/Jameson & Associates (Texas)
LJA, Inc. (Texas)
L/JA Water Resources, Inc. (Texas)
Ljusne Renhallnings AB (Sweden)
Lombard Refuse Disposal Co., Inc. (Illinois)
Lombard Disposal
Loristan Services Limited (United Kingdom)
LSR (Sweden)
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LSS & Associates, Inc. (Arizona)
Manchester Tankers Limited (United Kingdom)
Manliba, S.A. (Argentina)
Mantank Cleaning Services Limited (United Kingdom)
M & O Waste Management Limited Partnership (Illinois)
Mashor & Reym Charter Ltd. (Brunei)
Mashor & Reym Malaysia (Malaysia)
Massachusetts Refusetech, Inc. (Delaware)
Matrix Construction, Incorporated (Texas)
Matrix Engineering, Inc. (Texas)
McLellan Disposal Services Limited (Ontario)
McLellan Disposal Services (1986) Limited (Ontario)
Mellanaktoren AB (Sweden)
Mesne Lea Estates Limited (United Kingdom)
Meurthe Et Moselle Service Sarl (France)
Miami Valley Pressure Cleaning, Inc. (Ohio)
Midi Pyrenees Environement Service (France)
Miljotjanst: Malardalan AB (Sweden)
Miljotjanst: Nykoping AB (Sweden)
Miljotjanst: Sodermanland AB (Sweden)
Miljotjanst: Vastmanland AB (Sweden)
Miller Waste Partners, L.P. (Illinois)
Missouri Disposal Partners, L.P. (Illinois)
Modern Trash Removal of York, Inc. (Pennsylvania)
Modern Recycling and Disposal Facility
Montolivet Finanz S.A. (Luxembourg)
Mountain Indemnity Insurance Company (Vermont)
MPF Engineered Filtered Products Inc. (Ontario)
MRI Holding Company (Delaware)
MRM Health Ltd. (United Kingdom)
MRM Holdings Ltd. (United Kingdom)
MRM Leisure International Ltd. (United Kingdom)
MRM Leisure Ltd. (United Kingdom)
MRM Partnership (United Kingdom)
MRM Projecta GmbH & Co. (Germany)
MRM Sandow Ltd. (United Kingdom)
M.S.T.S., Inc. (Delaware)
M.S.T.S. Limited Partnership (Illinois)
Muerthe et Moselle Service S.A.R.L. (MMS) (France)
M.V. Industrial Services, Inc. (Ohio)
Nassjo Renhallning AB (Sweden)
National Industrial Constructors Inc. (Delaware)
National Seal Company (Illinois)
Naylor Industrial Services, Inc. (Texas)
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Nelanco, Ltd. (Missouri)
Neptune Microfloc, Incorporated (Oregon)
Neptune Nichols Limited (United Kingdom)
Neuhaus Entsorgung GmbH & Co. KG (West Germany)
NH/VT Energy Recovery Corporation (New Hampshire)
Nichols Sanitation, Inc. (Florida)
Lake Placid Sanitation
Waste Management of Palm Beach
Nice Mettoyage (France)
Nollmann Entsorgung GmbH & Co KG (West Germany)
Norab Renhallnings AB (Sweden)
Nord Environement Service (France)
Nordisk Avfallskonsult AB (Sweden)
Norrlands Miljosanering I Umea AB (Sweden)
North Broward County Resource Recovery Project, Inc. (Florida)
North Broward Holdings Inc. (Delaware)
Northedge Limited (United Kingdom)
Northern Waste Systems, Inc. (North Dakota)
North Pacific Aerial Surveys, Inc. (Alaska)
Northwest Sanitary Landfill, Inc. (Pennsylvania)
Norwaste Limited (United Kingdom)
Nova Spurghi (Italy)
NSC Sales Corp. (Virgin Islands)
Nu-Way Trash Removal Corp. (Pennsylvania)
Ocean Combustion Service, B.V. (Netherlands)
Ocean Combustion Service GmbH (West Germany)
Ocean Combustion Service, N.V. (Belgium)
Ocean Combustion Service -O.C.S.- Espana S.A. (Spain)
Ocmulgee Disposal, Inc. (Georgia)
Oil & Solvent Process Company (California)
Olshan Asbestos Removal Corportion (Texas)
Olshan Demolishing Company, Inc. (Texas)
Ostjydsk Industrirenovation A/S (Denmark)
Pacific Waste Management Holdings Pty. Limited. (New South Wales)
Pacific Waste Management, Ltd. (New Zealand)
Pacific Waste Management Limited (Hong Kong)
Pacific Waste Management PTE Limited (Singapore)
Pacific Waste Management Pty. Limited (New South Wales)
Paris Suo Hydraulique (France)
Park Services, Inc. (Delaware)
Pecol S.r.l. (Italy)
Penn-Warner Club, Inc. (Delaware)
Peterson-KNAB GmbH (Germany)
Phoenix Systems, Inc. (Maryland)
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Piacentii Srl (Italy)
Pierdan (France)
Pilmuir Waste Disposal Limited (United Kingdom)
Pingliang Power Limited Partnership (Delaware)
P.I.T.E.F. S.r.l. (Italy)
Plant Control Services, Inc. (Texas)
Pottsville Sanitation Service, Inc. (Pennsylvania)
PPK Consultants Pty. Ltd. (Australia)
Progesam Ecosistenmi S.r.l. (Italy)
PT J Roger Preston & Partners (Indonesia)
Pullman-Hoffman, Inc. (Ohio)
Pullman Plumbing, Pipefitting & Mechanical, Inc. (West Virginia)
Pullman Power Products Corporation (Delaware)
Pullman Power Products International Corporation (Delaware)
Pullman Power Products of Canada Limited (Canada)
Pullman Torkelson Utility Fuels Company (Delaware)
Quest Environement Service (France)
Questquill Limited (United Kingdom)
R A Johnson (Haulage) Ltd. (England)
Rancho Estates Properties, Inc. (Delaware)
R.B.S. Pension Trustees Limited (United Kingdom)
RCCD Inc. (Delaware)
RCC Fiber Company, Inc. (Delaware)
Recovery I, Inc. (Louisiana)
Recovery Project, Inc. (Florida)
Recycle First North Andover Inc. (Delaware)
Recycling For Energy Limited (United Kingdom)
Refuse Services, Inc. (Florida)
Clay County Recycling and Disposal Facility
Jacksonville Waste Control
Lake City Waste Control
Sunbeam Recycling and Disposal Facility
Trinity Recycling and Disposal Facility
Waste Management of Clay County
Waste Management of Jacksonville
Waste Management of Putnam County
Regin B.V. (Netherlands)
Rehu Handelsonderneming BV (Netherlands)
Renovadan Miljoservice A/S (Denmark)
Resco Holdings Inc. (Delaware)
Reym & Mashnor Charters Senirian Berhad (Srm. Bhd) (Brunei)
Reym B.V. (Netherlands)
Richmond Waste Partners, Ltd. (Illinois)
RIH Inc. (Delaware)
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Riimaki OY (Finland)
Riley Energy Systems of Lisbon Corporation (Delaware)
Riley Energy Systems of Lisbon Connecticut Corp. (Connecticut)
Rohstoffruckgewinnung Fixheide GmbH & Co. Kg (Germany)
Rupke & Associates Ltd. (Ontario)
Rusk County Landfill, Inc. (Wisconsin)
Rust Associates Ltd. (Canada)
Rust Capital Corporation (Delaware)
Rust CHDA Company (Delaware)
Rust China Ltd. (Delaware)
Rust Controladora, S.A. de C.V. (Mexico)
Rust Construcciones, S.A. de C.V. (Mexico)
Rust Deutschland GmbH (Germany)
Rust Engineering do Brasil Construcoes Ltda. (Brasil)
Rust Environment & Infrastructure Inc. (Wisconsin)
Rust Environment & Infrastructure of Canada Inc. (Alberta)
Rust Environment & Infrastructure of Michigan Inc. (Michigan)
Rust Environment & Infrastructure of North Carolina Inc. (North Carolina)
Rust Environment & Infrastructure of Ohio Inc. (Ohio)
Rust Environmental Pty Ltd (New South Wales, Australia)
Rust Federal Environmental Services Inc. (Delaware)
Rust Federal Services Inc. (Delaware)
Rust Field Services, Inc. (Delaware)
Rust Geotech Inc. (Delaware)
Rust Germany GmbH (Germany)
Rust Industrial Cleaning Inc. (Delaware)
Rust Industrial Cleaning Specialists Inc. (Delaware)
Rust Industrial Services Inc. (Delaware)
Rust International Corporation (Delaware)
Rust International Holdings Inc. (Delaware)
Rust International Inc. (Delaware)
Rust International of North Carolina, P.C. (North Carolina)
Rust JRP Pty Ltd (Australia)
Rust JRP Ltd (Hong Kong)
Rust JRP Pte Ltd (Singapore)
Rust Leasing Corp. (Delaware)
Rust Limited (United Kingdom)
Rust MRM Limited (United Kingdom)
Rust North America Holdings Inc. (Delaware)
Rust Nuclear Remedial Services Inc. (Delaware)
Rust Overseas B.V. (Netherlands)
Rust Overseas Inc. (Delaware)
Rust Plant Services Inc. (South Carolina)
Rust PPK Pty Ltd. (New South Wales, Australia)
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Rust Remedial Services East Inc. (Delaware)
Rust Remedial Services Inc. (Delaware)
Rust Remedial Services Midwest Inc. (Delaware)
Rust Remedial Services South Inc. (Delaware)
Rust Remedial Services West Inc. (Delaware)
Rust Scaffold Services Inc. (Delaware)
Rust Servicios Ambientales e Infraestructura, S.A. de C.V. (Mexico)
Rust Sweden Holdings A B (Sweden)
Rust Utility Services Inc. (Delaware)
Rust VA Projekt AB (Sweden)
Sacagica s.r.l. (Italy)
Saframa S.A. (Argentina)
Sakab Batteri B (Sweden)
Sakab MFA-Forvaltning AB (Sweden)
Salem Waste Disposal Center, Inc. (Alabama)
Salutec, S.A. (Argentina)
Saneanientos Sellberg S.A. (Spain)
S and P, Inc. (New York)
S.A.P. s.p.a. (Italy)
S.A.R.I. S.p.A. (Italy)
S.A.S.P.I S.p.A. (Italy)
S.C.E.A. Du Bosnier (France)
SC Holdings, Inc. (Pennsylvania)
Sanitary Landfill
SCA Services, Inc. (Delaware)
Mohawk Valley Sanitary Landfill
SCA Services of South Carolina, Inc. (South Carolina)
Charleston Landfill
Sandy Pines Landfill
Waste Management Charleston
S.C.E.A. Du Bosnier (France)
Schreiber Stadtereinigung GmbH & Co. KG (West Germany)
Schroeder GmbH & Co. KG (Germany)
S.C.R. Systems, Inc. (Missouri)
Waste Management of Springfield
SCS Contractors Limited (United Kingdom)
Sellbergs Danmark A/S (Denmark)
Sengelose Kompost A/S (Denmark)
S.E.P. s.r.l. (Italy)
Serater S.A. (France)
SERPOL (France)
Service de Rehabilitation des Dechets (S.R.D.) (France)
Servicios Integrales de Protection Ambiental, S.A. de C.V. (Mexico)
Servicios Limpiezas Urbanas S.A. (SELIMURSA) (Spain)
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Servi Jatchuolto OY (Finland)
Servizi Piemonte S.r.l. (Italy)
SES Bridgeport Inc. (Delaware)
SES Brooklyn Inc. (Delaware)
SES Brooklyn Navy Yard Inc. (Delaware)
SES Connecticut Inc. (Delaware)
SES Gloucester Inc. (Delaware)
SES New Jersey Inc. (Delaware)
SES North Andover Inc. (Delaware)
SES Seattle Inc. (Delaware)
Sidel (France)
Sigma Associates, Inc. (Texas)
Signal Capital Sherman Station Inc. (Delaware)
Signal Cleanfuels Inc. (Delaware)
Signal Clean Water Corporation (Delaware)
Signal Own-And-Operate Inc. (Delaware)
Signal Overseas Capital Corporation N.V. (Netherlands)
Signal RESCO, Inc. (Delaware)
Sir-Mas (Italy)
Sirtis Service s.r.l. (Italy)
691208 Ontario Limited (Ontario)
SMC Shaltimenti Controllati S.p.a. (Italy)
SNC Rust Canada Limited (Canada)
Soaring Vista Properties, Inc. (Maryland)
Societa' Appalti Pubblici S.A.P. S.p.A. (Italy)
Societe D'Amenagement Et D'Exploitation De Terrains Agricoles (France)
Societe D'Assainissement Provencal (France)
Societe D'Enlevement Et De Transport Annexe (France)
Societe D'Etude Et De Maintenance D'Assainissement (France)
Societe D'Etudes et de realisation D'Amenagements De Terrains (France)
Societe De Mecanique Et D'Entretretien Du Val De Marne (France)
Societe De Mecanique Hydraulique Et D'Electroite (France)
Societe Parisienne D'Amenagement De Terrains (SPAT) (France)
Sogea S.r.l. (Italy)
Solid Waste Equipment Leasing Limited (Bermuda)
Solna Transport AB (Sweden)
Solna Transport & Renhallning AB (Sweden)
South Broward County Resource Recovery Project, Inc. (Florida)
South Broward Holdings Inc. (Delaware)
Southern Sanitation Partners Limited Partnership (Illinois)
South Simcoe Sanitation Limited (Ontario)
Special Resource Management, Inc. (Montana)
S.P.E.M. S.p.A. (Italy)
St. George's Engineering Ltd. (United Kingdom)
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Suburban Sanitation Partners, Ltd. (Illinois)
Sud Quest Environnement Service (France)
Sunny Farms, Ltd. (Pennsylvania)
Sunset Environmental, Inc. (California)
Svensk Avfallskonvertering AB (Sweden)
S. V. Farming Corp. (New Jersey)
Swenson S.A. (France)
Swindell-Dressler Energy Supply Company (Delaware)
Swindell-Dressler Leasing Company (Delaware)
Swindell Rust Associates Inc. (Delaware)
Swindell Rust Iran Inc. (Delaware)
TC, Inc. (Indiana)
Techim S.r.l. (Italy)
Terra Quest - Mohave, Inc. (Arizona)
Texas Sanitation Service, Inc. (Texas)
The Forge, Inc. Recycling & Resource Recovery Center (Pennsylvania)
The Rust Engineering Company (Delaware)
The Rust Engineering Company Limited (Canada)
The Rust Engineering Company of Michigan (Michigan)
The Rust Engineering Company of New York Inc. (New York)
The Standard Bridge Corporation (New York)
The Standard Engineering Corporation (New York)
The Swindell-Dressler Corporation of Canada Limited (Canada)
The Wahler Company (Nevada)
The Wheelabrator Corporation (Delaware)
The Woodlands of Van Buren, Inc. (Delaware)
Tijuana Equilibrio Ecologico, S.A. de C.V. (Mexico)
Tilghman (Broadheath) Limited (United Kingdom)
Tilghman (Engineers) Limited (United Kingdom)
Tilghman (1988) Limited (United Kingdom)
Tilghman Wheelabrator Limited (United Kingdom)
Tilghman Wheelabrator Special Products Ltd. (United Kingdom)
Tomoka Refuse, Inc. (Florida)
Town and Country Refuse, Inc. (Florida)
Port-O-Let
Trail Ridge Landfill, Inc. (Delaware)
Tra.S.E. S.p.A. (Italy)
Transmetro (Argentina)
Transportbedrijf Van Bliet B.V. (Nederlands)
Transwaste (N.W.) Limited (United Kingdom)
UK Waste Management Holdings Limited (United Kingdom)
U.K. Waste Management Limited (United Kingdom)
Unitech Soils, Inc. (California)
United Waste Partners, L.P. (Illinois)
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Vaggeryds Renhallnings AB (Sweden)
Valdenza S.r.l. (Italy)
Vallentuna Renhallning AB (Sweden)
Vanerborgs Stadbudsbyra AB (Sweden)
Vanersborgs Renhallning AB (Sweden)
Van Vliet Recycling B.V. (Netherlands)
Van Vliet Speciaal Afval B.V. (Netherlands)
Var Assainissement (France)
Venice Park Development Company, Inc. (Michigan)
Venice Resources, Inc. (Michigan)
VE-Part S.r.l. (Italy)
Verwaltungsgesellschaft Neuhaus Entsorgung GmbH (Germany)
Verwaltungsgesellschaft Nollmann Entsorgung GmbH (Germany)
Vliko B.V. (Netherlands)
Vulcanus Shipping Company Pte. Ltd. (Singapore)
Wahler Associates (California)
Wahler Associates Research Company (California)
Walker & Associates, Inc. (Washington)
Walker - Alaska Aerial Survey, Inc. (Alaska)
Warner Company (Delaware)
Washington Waste Hauling & Recycling, Inc. (Delaware)
Port-O-Let
Recycle America
Valley Topsoil
Waste Management - Northwest
Waste Management of Ellensburg
Waste Management of Greater Wenatchee
Waste Management of Kennewick
Waste Management of Seattle
Waste Management of Spokane
Waste Management of Yakima
Waste Management - SnoKing
Waste Management - Rainier
West Group - Northwest Region Office
WMI Services
Washington Waste Systems, Inc. (Washington)
Waste Away Group, Inc. (Alabama)
Waste Clearance (Holdings) Limited (United Kingdom)
Waste Clearance Limited (United Kingdom)
Waste Disposal, Inc. (New Jersey)
Howell Landfill
Waste Management Anniston, Inc. (Delaware)
Waste Management Czechoslovakia s.r.o. (Czechoslovakia)
Waste Management Collection and Recycling, Inc. (California)
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C & H Disposal
Empire Waste Management
Great Western Reclamation
Griffith Disposal
Horizon Rubbish Service
Recycle America
SAWDCO Collection
Valley Waste Management
Waste Management of Inland Valley
Waste Management of Sacramento
Waste Management of San Gabriel/Pomona Valley
Waste Management of Santa Cruz County
Waste Management of Stockton
Waste Management of Woodland
Waste Management de Mexico, S.A. de C.V. (Mexico)
Waste Management Deutschland GmbH (Germany)
Waste Management Disposal Services of Arizona, Inc. (Delaware)
Waste Management Disposal Services of California, Inc. (California)
Bradley Landfill and Recycling Center
Ecolo-Haul
Recycle America
Waste Management Disposal Services of Colorado, Inc. (Colorado)
Central Weld Sanitary Landfill
North Weld Sanitary Landfill
Waste Management Disposal Services of Maine, Inc. (Maine)
Waste Management Disposal Services of Maine - Crossroads
Waste Management Disposal Services of Maryland, Inc. (Maryland)
Sandy Hill
Waste Management Disposal Services of Massachusetts, Inc. (Massachusetts)
Waste Management Disposal Services of Montana, Inc. (Montana)
High Plaines Recycling and Disposal Facility
Waste Management Disposal Services of New York, Inc. (Delaware)
Waste Management Disposal Services of Oregon, Inc. (Delaware)
Waste Management Disposal Services of Pennsylvania, Inc. (Pennsylvania)
Pottstown Landfill and Recycling Center
Waste Management Disposal Services of Virginia, Inc. (Delaware)
Middle Peninsula Landfill and Recycling Facility
Waste Management Disposal Services of Washington, Inc. (Delaware)
Greater Wenatchee Regional Landfill and Recycling Center
Waste Management Do Brasil, Ltda Empreendimentos Ambientals (Brazil)
Waste Management Espana S.A. (Spain)
Waste Management Finland OY (Finland)
Waste Management France (France)
Waste Management France S.A.R.L. (France)
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Waste Management GmbH & Co (Germany)
Waste Management GmbH & DO MVA Hamm OHG (Germany)
Waste Management Greece Anonymous Commercial Company (Greece)
Waste Management Hanford, Inc. (Delaware)
Waste Management, Inc. of Alabama (Delaware)
Waste Management Inc. of Florida (Florida)
Broward Disposal
Central Disposal
Environmental Waste Systems
Florida Environmental Waste
Florida Disposal
Gulf Coast Recycling and Disposal Facility
Hillsborough Heights Recycling and Disposal Facility
Rubbish Gobbler
Southeast Recycling and Disposal Facility
Southern Sanitation Service
South Florida Service Center
United Sanitation Recycling and Disposal Facility
Waste Management of Bay County
Waste Management of Collier County
Waste Management of Dade County
Waste Management of Pasco County
Waste Management of Tampa
Waste Management, Inc. of Tennessee (Tennessee)
Chestnut Ridge Landfill and Recycling Center
Waste Management of Queen City
Waste Management of Tennessee - Jackson
Waste Management of Tennessee - Knoxville
Waste Management of Tennessee- Memphis
Waste Management of Tennessee - Nashville
Waste Management International B.V. (Netherland)
Waste Management International, Inc. (Delaware)
Waste Management International, Ltd. (Bermuda)
Waste Management International, Ltd. Argentine Branch (Argentina)
Waste Management International plc (United Kingdom)
Waste Management International Y CIA (Chile)
Waste Management International Services Limited (United Kingdom)
Waste Management International Services Pension Scheme (Trustees) Limited (UK)
Waste Management Italia S.r.l. (Italy)
Waste Management (Land) Limited (United Kingdom)
Waste Management Limited (England)
Waste Management Nederland B.V. (Netherlands)
Waste Management N.Z. Ltd. (New Zealand)
Waste Management of Alabama, Inc. (Alabama)
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Dixie Waste
Valley View Sanitary Landfill
Waste Management of Alabama - Mobile
Waste Management of Alabama - The Shoals
Waste Management of Birmingham - Recycle America
Waste Management of Mississippi - Gulf Coast
Waste Management of North Mississippi - Tupelo
Waste Management of West Alabama
WMI Services of Birmingham
Waste Management of Alameda County, Inc. (California)
Altamont Landfill and Resource Recovery Facility
Bay City Recycling Services
Central Division
Davis Street Station for Material Recovery and Transfer
East Bay Disposal Co.
Livermore Dublin Disposal
Northern Division
Southern Division
Sunnyvale Recycling and Disposal Facility
Tri-Cities Recycling and Disposal Facility
Waste Management of Arizona, Inc. (California)
Butterfield Station Recycling and Disposal Facility
Modulaire of Arizona
Sky Harbor Regional Transfer & Recycling Center
27th Avenue Recycling and Disposal Facility
Waste Management of Northern Arizona
Waste Management of Phoenix - North
Waste Management of Phoenix - Recycle America
Waste Management of Phoenix - South
Waste Management of Tucson
Waste Management of Tucson - Recycle America
Waste Management of Verde Valley
WMI Services - Phoenix
Waste Management of Arkansas, Inc. (Delaware)
Brushy Island Recycling and Disposal Facility
Jefferson County Landfill and Recycling Center
Shannon Road Recycling and Disposal Facility
Union County Recycling and Disposal Facility
Waste Management of Arkansas North
Waste Management of Arkansas South
Waste Management of California, Inc. (California)
Kirby Canyon Recycling and Disposal Facility
Lancaster Recycling and Disposal Facility
Modulaire of California
18
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Simi Valley Recycling and disposal Facility
Universal Refuse Removal of El Cajon
Waste Management of Fresno County
Waste Management of Lancaster
Waste Management of Los Angeles
Waste Management of Los Angeles - South
Waste Management of North County
Waste Management of San Diego
Waste Management of San Fernando Valley
Waste Management of Santa Clara County
Waste Management of the Desert
Waste Management of Cambridge, Inc. (Delaware)
Adho Disposal
Hunting Ridge Landfill
Waste Management of Carolinas, Inc. (North Carolina)
Piedmont Landfill and Recycling Center
Waste Management of Asheville
Waste Management of Carolinas
Waste Management of Central Carolina
Waste Management of the Piedmont
Waste Management of Raleigh/Durham
Waste Management of Wilmington
Waste Management of the Triad
Waste Management of Central Florida, Inc. (Florida)
Waste Management of Central Jersey, Inc. (New Jersey)
Parklands Recycling and Disposal Facility
Waste Management of Chico, Inc. (Delaware)
Waste Management of Colorado, Inc. (Colorado)
Colorado Springs Recycling and Disposal Facility
Colorado Springs Transfer Station
County Line Recycling and Disposal Facility
Denver/Arapahoe Disposal Site
Englewood Transfer Station
Modulaire of Colorado
Port-O-Let
Waste Management of Aurora
Waste Management of Colorado - Aurora Facility
Waste Management of Colorado - Landfill Division
Waste Management of Colorado - North Facility
Waste Management of Colorado - Recycle Facility
Waste Management of Colorado - South Facility
Waste Management of Colorado Springs
Waste Management of Colorado Springs - Recycle America Processing Facility
Waste Management of Denver
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Waste Management of Denver - Recycle America Processing Facility
Waste Management of Northern Colorado
Waste Management of Pueblo
Waste Management of the Rockies
Waste Management of Columbus, Inc. (Ohio)
Waste Management of Connecticut, Inc. (Connecticut)
New Milford Recycling and Disposal Facility
Waste Management of Connecticut - Cheshire
Waste Management of Connecticut - Norwalk
Waste Management of Connecticut - Wallingford
Waste Management of Delaware, Inc. (Delaware)
Waste Management of Delaware - Wilmington
Waste Management of Delmarva
Waste Management of Five Oaks Recycling and Disposal Facility, Inc. (Delaware)
Waste Management of Florida, Inc. (Delaware)
Waste Management of Gardena, Inc. (Delaware)
Waste Management of Georgia, Inc. (Georgia)
Live Oak Landfill
Waste Management of Chattanooga
Waste Management of Northeast Alabama
Waste Management of Savannah
Waste Management of the Tennessee Valley
Waste Management of Hawaii, Inc. (Hawaii)
Oahu Refuse Systems Company
Waimanalo Gulch Recycling and Disposal Facility
Waste Management of Idaho, Inc. (Idaho)
Waste Management of Illinois, Inc. (Delaware)
Banner/Western Disposal Service
Chain of Rocks Recycling and Disposal Facility
CID
Durbin Paper Stock Company
Five Oaks Recycling and Disposal Facility
Greene Valley Recycling and Disposal Facility
Kankakee Recycling and Disposal Facility
Laraway Recycling and Disposal Facility
McLean County Disposal and Recycling Services
Milam Recycling and Disposal Facility
Settler's Hill Recycling and Disposal Facility
Tazewell Recycling and Disposal Facility
TCD Services
United Waste Systems
Waste Management - Northwest
Waste Management - West
Waste Management of Metro East
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Waste Management of Peoria
Waste Management of the South Suburbs
Wheatland Prairie Recycling and Disposal Facility
Woodland Recycling and Disposal Facility
Waste Management of Indiana, Inc. (Indiana)
Byers Recycling and Disposal Facility
Glenwood Ridge Recycling and Disposal Facility
LaPorte County Recycling and Disposal Facility
Prairie View Recycling and Disposal Facility
Superior Waste Systems
Twin Bridges Recycling and Disposal Facility
Waste Management of Bloomington
Waste Management of Central Indiana
Waste Management of Crawfordsville
Waste Management of East-Central Indiana
Waste Management of Evansville
Waste Management of Fort Wayne
Waste Management of Indianapolis
Waste Management of Indianapolis - Hamilton County Transfer
Waste Management of Indianapolis - Franklin Transfer
Waste Management of Lafayette
Waste Management of Muncie
Waste Management of Northwest Indiana
Waste Management of Warsaw
Wheeler Recycling and Disposal Facility
Waste Management of Iowa, Inc. (Iowa)
Solid Waste Systems
Waste Management of Kansas, Inc. (Kansas)
Forest View Recycling and Disposal Facility
Rolling Meadows Recycling & Disposal Facility
Solid Waste Systems
Topeka Waste Systems
Waste Management of Wichita
Waste Management - Refuse Control
Waste Management of Kentucky, Inc. (Kentucky)
Blue Ridge Recycling and Disposal Facility
Kramer Lane Recycling and Disposal Facility
Lexington Recycling and Disposal Facility
Outer Loop Recycling and Disposal Facility
Waste Management of Kentucky - Gray Disposal
Waste Management of Kentucky - Lexington
Waste Management of Kentucky - Louisville
Waste Management of Kentucky - Madison Disposal
Waste Management of Kentucky - Stevens Dispos-All Service
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Waste Management of Lebanon, Inc. (Delaware)
Waste Management of Leon County, Inc. (Florida)
Springhill Regional Sanitary Landfill
Waste Management of Louisiana, Inc. (Louisiana)
Acadiana Recycling and Disposal Facility
Alexandria Recycling and Disposal Facility
American Waste and Pollution Control-Algiers Residential
American Waste and Pollution Control-Eastern New Orleans Residential
American Waste and Pollution Control-Kelvin Recycling and Disposal Facility
American Waste and Pollution Control-St. Bernard Parish Residential
American Waste and Pollution Control-Slidell Residential
American Waste and Pollution Control-West Jefferson Residential
Jefferson Davis Recycling and Disposal Facility
Kelvin Recycling and Disposal Facility
Magnolia Recycling and Disposal Facility
Pelican Recycling and Disposal Facility
Pelican State Environmental Services
Waste Management of Acadiana
Waste Management of Baton Rouge
Waste Management of the Bayous
Waste Management of Central Louisiana
Waste Management of Lake Charles
Waste Management of New Orleans - Commercial
Waste Management of Northeast Louisiana
Waste Management of Northwest Louisiana
Waste Management of the Pines
Waste Management of St. Landry
Waste Management of St. Tammany
Waste Management of South Louisiana
Waste Management Services of Louisiana
Woodside Recycling and Disposal Facility
Waste Management of Maine, Inc. (Maine)
Waste Management of Maine - Portland
Waste Management of Malaysia Sdn BHd (Malaysia)
Waste Management of Maryland, Inc. (Maryland)
Mobile Offices of Maryland
Waste Management of Greater Washington
Waste Management of Maryland - Baltimore
Waste Management of Southern Maryland
WMI Medical Services
WMI Services of Maryland
Waste Management of Massachusetts, Inc. (Massachusetts)
Waste Management of Boston - North
Waste Management of Central Massachusetts
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Waste Management of Massachusetts - Gloucester
Waste Management of Massachusetts - South Shore
Waste Systems
Waste Management of Michigan, Inc. (Michigan)
Autumn Hills Recycling and Disposal Facility
Cedar Ridge Recycling and Disposal Facility
Eagle Valley Recycling and Disposal Facility
Efficient Sanitation
Northern Oaks Recycling and Disposal Facility
Tri-City Recycling and Disposal Facility
Valley Rubbish
Waste Management of Michigan - Alma Transfer and Recycling Facility
Waste Management of Michigan - Area Disposal
Waste Management of Michigan - Burr Oak
Waste Management of Michigan - Central
Waste Management of Michigan - Detroit North
Waste Management of Michigan - Detroit Transfer and Recycling Facility
Waste Management of Michigan - Detroit West
Waste Management of Michigan - Dowagiac Transfer and Recycling Facility
Waste Management of Michigan - Holland
Waste Management of Michigan - Holland Transfer and Recycling Facility
Waste Management of Michigan - Mideast
Waste Management of Michigan - Mideast/Port Huron
Waste Management of Michigan - Midwest
Waste Management of Michigan - Northern
Waste Management of Michigan - Recycle America/Grand Rapids
Waste Management of Michigan - Southwest
Waste Management of Michigan - Western
Westside Recycling and Disposal Facility
WMI Services - Eastern Michigan/Northwest Ohio
Woodland Meadows Recycling and Disposal Facility
Waste Management of Minnesota, Inc. (Minnesota)
Anoka Recycling and Disposal Facility
Dietman Sanitation & Recycling
Sun Prairie Recycling and Disposal Facility
Waste Management - Blaine
Waste Management - Rochester
Waste Management - Savage
Waste Management of Hastings
Waste Management of LeSueur/St. Peter
WMI Services of Minnesota
Waste Management of Mississippi, Inc. (Mississippi)
Pecan Grove Sanitary Landfill
Pine Ridge Sanitary Landfill
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Plantation Oaks Sanitary Landfill
Prairie Bluff Sanitary Landfill and Recycling Center
Waste Management of Meridian
Waste Management of Mississippi - Gulf Coast
Waste Management of Mississippi - Jackson
Waste Management of Mississippi - Laurel/Hattisburg
Waste Management of Mississippi - Pike County
Waste Management of Mississippi - Natchez
Waste Management of Mississippi - Vicksburg
Waste Management of North Mississippi - Columbus
Waste Management of North Mississippi - Tupelo
Waste Management of Northwest Mississippi - Grenada
Waste Management of Southwest Mississippi
Waste Management of Missouri, Inc. (Delaware)
Environmental Industries
Kahle Recycling and Disposal Facility
Meramec Hauling
Pezold Hauling
Rumble Recycling and Disposal Facility
Waste Management of Kansas City
Waste Management of Springfield
Waste Management of St. Louis
Waste Management of the Ozarks
Waste Management of Montana, Inc. (Delaware)
High Plains Sanitary Landfill and Recycling Center
Waste Management of Great Falls
Waste Management of Nebraska, Inc. (Delaware)
Douglas County Recycling and Disposal Facility
Waste Management of New Hampshire, Inc. (Connecticut)
Turnkey Recycling and Environmental Enterprises
Waste Management of New Hampshire - Laconia
Waste Management of New Hampshire - Londonderry
Waste Management of New Hampshire - Rochester
Waste Management of New Hampshire - Peterborough
Waste Management of New Jersey, Inc. (New Jersey)
Avenue A Transfer & Recycling Center
Recycle America
Waste Management of New Mexico, Inc. (New Mexico)
Hobbs Recycling and Disposal Facility
Modulaire of New Mexico
Otero County Recycling and Disposal Facility
Recycle America Processing Facility
Rio Rancho Recycling and Disposal Facility
San Juan County Recycling and Disposal Facility
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Sunshine Recycling and Disposal Facility
Waste Management of Albuquerque - Recycle America Processing Facility
Waste Management of Four Corners
Waste Management of Southeast New Mexico
Waste Management of the Southwest
Waste Management of New York, Inc. (New York)
High Acres Landfill and Recycling Facility
Waste Management of Eastern New York
Waste Management of New York - Buffalo
Waste Management of New York - Rochester
Waste Management of New York - Syracuse
Waste Management of New York - Utica
Waste Management of Southwestern New York
Waymor Recycling and Disposal Facility
WMI Services of New York
Waste Management of New York City, Inc. (Delaware)
Waste Management, Inc. (Illinois)
Waste Management of North Dakota, Inc. (Delaware)
Waste Management of North Jersey, Inc. (Delaware)
Waste Management of Ohio, Inc. (Delaware)
Countywide Recycling and Disposal Facility
ELDA Recycling and Disposal Facility
Evergreen Recycling and Disposal Facility
Herrick Valley Recycling and Disposal Facility
Lake County Recycling and Disposal Facility
Pinnacle Road Recycling and Disposal Facility
Seneca East Recycling and Disposal Facility
Suburban Recycling and Disposal Facility
Waste Management of Ohio - Akron
Waste Management of Ohio - Blaylock
Waste Management of Ohio - Cleveland Transfer and Recycling Facility
Waste Management of Ohio - Cleveland West
Waste Management of Ohio - Columbus
Waste Management of Ohio - Columbus Transfer and Recycling Facility
Waste Management of Ohio - Findlay
Waste Management of Ohio - IWD
Waste Management of Ohio - Koogler
Waste Management of Ohio - Lima
Waste Management of Ohio - Lima Transfer and Recycling Facility
Waste Management of Ohio - M & M Sanitation
Waste Management of Ohio - Newark
Waste Management of Ohio - Northwest
Waste Management of Ohio - Recycle America/Toledo
Waste Management of Ohio - S.E.M.
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Waste Management of Ohio - Shelby County Transfer
Waste Management of Ohio - Suburban Sanitation Service
Waste Management of Ohio - Youngstown
WMI Services - Ohio
Waste Management of Oklahoma, Inc. (Oklahoma)
East Oak Recycling and Disposal Facility
Waste Management of Oklahoma City
Waste Management of Tulsa
Waste Management of Orange County, Inc. (California)
Waste Management of Oregon, Inc. (Oregon)
Waste Management of Vancouver U.S.A.
Waste Management of Orlando, Inc. (Florida)
Waste Management of Palm Beach, Inc. (Delaware)
Waste Management of Pennsylvania, Inc. (Pennsylvania)
Community Refuse Disposal
E.R.S.
Lake View Landfill (Northern)
Mid-Atlantic Recycling and Distribution Center
Milton Grove Demolition and Tire Recycling
Penn Sanitation
Philadelphia Transfer and Recycling Station
River Road Landfill (Northeast)
Tully Town Resource Recovery Facility
Waste Automation
Waste Management - Allentown
Waste Management - Erie (Northern)
Waste Management - Erie - Recycle America
Waste Management of Central Pennsylvania
Waste Management of Delaware Valley - North
Waste Management of Delaware Valley - Residential
Waste Management of Delaware Valley - South
Waste Management of Greenville
Waste Management of Hazleton
Waste Management of Indian Valley
Waste Management of Northeast Pennsylvania
Waste Management of Pennsylvania - Greater Lancaster
Waste Management of Pennsylvania - Hauling Division
Waste Management of Pennsylvania - Pottstown
Waste Management of Pennsylvania - York
Waste Management of Pittsburgh
Yelinek & Sons
Waste Management of Piedmont, Inc. (Delaware)
Waste Management of Pinellas County, Inc. (Florida)
Suncoast Recycle America Center
26
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Waste Management of Puerto Rico, Inc. (Delaware)
Waste Management of Rhode Island, Inc. (Delaware)
Waste Management of Rhode Island - Newport
Waste Management of South Carolina, Inc. (South Carolina)
Hickory Hill Sanitary Landfill
Palmetto Landfill
Waste Management of Coastal Disposal Service
Waste Management of the Low Country
Waste Management of South Dakota, Inc. (South Dakota)
Waste Management of Sioux Falls
Waste Management of the Black Hills
Waste Management of South Jersey, Inc. (New Jersey)
Waste Management of New Jersey - Mar-Tee Contractors
Waste Management of Texas, Inc. (Texas)
All Waste Paper Recycling
Austin Community Disposal co.
Best Waste Systems
Bluebonnet Recycling and Disposal Facility
Centex Waste Management
Coastal Plains Recycling and Disposal Facility
Comal County Recycling and Disposal Facility
Covell Gardens Landfill
DFW Recycling and Disposal Facility
Eastside Recycling and Disposal Facility
Fabit Waste Management
Garbage Gobbler
Hillside Recycling and Disposal Facility
Lacy Lakeview Recycling and Disposal Facility
Longhorn Disposal
Northwest Transfer Station
Oak Hill Recycling and Disposal Facility
Pecan Prairie Recycling and Disposal Facility
Permian Basin Waste Management
Recycle America - Dallas Bulk Grade Division
Recycle America - Dallas High Grade Division
S & B Trucking & Sanitation
Texas Waste Management
Waste Management of Fort Worth Recycling and Disposal Facility
Waste Management - Golden Triangle
Waste Management of Dallas - East
Waste Management of Dallas Recycle America Processing Facility
Waste Management of Dallas - West
Waste Management of East Texas
Waste Management of Houston
27
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Waste Management of Northeast Texas
Waste Management of Southeast Texas
Waste Management of South Texas
Westside Recycling and Disposal Facility
Williamson County Recycling and Disposal Facility
WMI Services of Dallas
WMI Services of North Texas
WMI Services of Texas
Waste Management of Tri-Cities, Inc. (Delaware)
Waste Management of Utah, Inc. (Utah)
Modulaire of Utah
Reliable Waste Systems
Waste Management of Salt Lake
Waste Management of Van Nuys, Inc. (Delaware)
Waste Management of Virginia, Inc. (Virginia)
Waste Management of Hampton Roads
Waste Management of Northern Virginia
Waste Management of Northern Virginia - Crown Disposal
Waste Management of the Outer Banks
Waste Management of Richmond
Waste Management of Richmond Port-O-let
Waste Management of Virginia - Blue Ridge
WMI Services of Hampton Roads
WMI Services of Virginia
Waste Management of West Virginia, Inc. (Delaware)
Waste Management of Shenandoah Valley
Waste Management of Wilmington, Inc. (Delaware)
Waste Management of Wisconsin, Inc. (Wisconsin)
Best Disposal Systems
Metro/Stone Ridge Recycling and Disposal Facility
Parkview Recycling and Disposal Facility
Pheasant Run Recycling and Disposal Facility
Ridgeview Recycling and Disposal Facility
Timberline Trail Recycling and Disposal Facility
Turtle Creek Recycling and Disposal Facility
United Waste/WMI Services
Valley Trail Recycling and Disposal Facility
Waste Management - Northeast Wisconsin
Waste Management of Fox Valley
Waste Management of La Crosse
Waste Management of Madison
Waste Management of Milwaukee
Waste Management of Muskego
Waste Management of Rockford
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Waste Management Southwest
Waste Management - Tri County
WMI Services of Wisconsin
Waste Management of Wyoming, Inc. (Delaware)
Waste Management Paper Stock Company, Inc. (Delaware)
Southern Sanitation Southeast - Recycle America
Waste Management of Florida - Recycle America
Waste Management of Sarasota - Recycle America
Waste Management of Tampa - Recycle America
Waste Management Partners, Inc. (Delaware)
Waste Management Partners of Bozeman, Ltd. (Illinois)
Waste Management Partners of Midland/Odessa (Illinois)
Waste Management Partners of Paris, Ltd. (Illinois)
Waste Management Partners of Southeast North Dakota, L.P. (Illinois)
Waste Management Plastic Products, Inc. (Delaware)
Waste Management Queensland Pty. Ltd. (Queensland)
Waste Management Recycling and Disposal Services of Illinois, Inc. (Illinois)
Waste Management Recycling and Disposal Services of Michigan, Inc. (Delaware)
Waste Management Remediation Services B.V. (Netherlands)
Waste Management (Rock Common) Limited (United Kingdom)
Waste Management (Roxby) Limited (United Kingdom)
Waste Management Services, C.A. (Venezuela)
Waste Management Services S A (Switzerland)
Waste Management Superior Acquisition, Inc. (Georgia)
Waste Relief Partners, L.P. (Illinois)
Waste Resources Ltd (New Zealand)
Waste Resources of Tampa Bay, Inc. (Florida)
Waste Resources of Tennessee, Inc. (Tennessee)
Waste Transfer and Recycling, Inc. (California)
WB Industrienlagen Consulting GmbH (West Germany)
Wessex Waste Management Limited (United Kingdom)
WESI Baltimore Inc. (Delaware)
WESI Capital Inc. (Delaware)
WESI Peabody Inc. (Delaware)
WESI Peekskill Inc. (Delaware)
WESI Westchester Inc. (Delaware)
WESI Saugus Inc. (Delaware)
WES Medical Services of Florida Inc. (Delaware)
WES Medical Services of North Carolina Inc. (Delaware)
WES Medical Services of Ohio Inc. (Delaware)
WES Medical Services of Texas Inc. (Delaware)
WES Medical Services of Wisconsin Inc. (Delaware)
Westates Carbon-Arizona, Inc. (Arizona)
Western Compliance Services, Inc. (Oregon)
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Western Waste Partners, L.P. (Illinois)
Wheelabrator Air Pollution Control Inc. (Delaware)
Wheelabrator Albion Inc. (Delaware)
Wheelabrator Albion Power Inc. (Delaware)
Wheelabrator Baltimore Inc. (Delaware)
Wheelabrator Bridgeport Inc. (Delaware)
Wheelabrator Broward Inc. (Delaware)
Wheelabrator-Berger (Maschinenfabriken) GmbH (West Germany)
Wheelabrator-Berger Stiftung GmbH (West Germany)
Wheelabrator Canada Inc. (Ontario)
Wheelabrator Cedar Creek Inc. (Delaware)
Wheelabrator Clean Air Holdings Inc. (Delaware)
Wheelabrator Clean Air Systems Inc. (Illinois)
Wheelabrator Cleanfuel Corporation (Delaware)
Wheelabrator Clean Water Holdings Inc. (Delaware)
Wheelabrator Clean Water Systems Inc. (Maryland)
Wheelabrator Coal Refinery Inc. (Delaware)
Wheelabrator Coal Services Company (Delaware)
Wheelabrator Cobb Inc. (Delaware)
Wheelabrator Concord Inc. (Delaware)
Wheelabrator Concord Operating Inc. (Delaware)
Wheelabrator Connecticut Inc. (Delaware)
Wheelabrator Culm Services Inc. (Delaware)
Wheelabrator do Brasil Limitada (Brazil)
Wheelabrator Energy Company Inc. (Delaware)
Wheelabrator Energy Leasing Company (Delaware)
Wheelabrator Energy Systems Inc. (Delaware)
Wheelabrator Engineered Systems Inc. (Delaware)
Wheelabrator Environmental Systems Inc. (Delaware)
Wheelabrator Environmental Systems of New York, Inc. (Delaware)
Wheelabrator EOS Canada Inc. (Ontario)
Wheelabrator EOS Inc. (Delaware)
Wheelabrator EOS Puerto Rico Inc. (Delaware)
Wheelabrator Epping Inc. (Delaware)
Wheelabrator Falls Inc. (Delaware)
Wheelabrator Frackville Energy Company Inc. (Delaware)
Wheelabrator Frackville Properties Inc. (Delaware)
Wheelabrator Fuel Services Inc. (Delaware)
Wheelabrator Fuels Service Corporation (Delaware)
Wheelabrator Genesee Inc. (Delaware)
Wheelabrator Gloucester Inc. (Delaware)
Wheelabrator Hagerstown Inc. (Delaware)
Wheelabrator HPD Inc. (Illinois)
Wheelabrator Hudson Energy Company Inc. (Delaware)
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Wheelabrator Incineration, Inc. (Delaware)
Wheelabrator Land Resources Inc. (Delaware)
Wheelabrator Lee County Inc. (Delaware)
Wheelabrator McKay Bay Inc. (Florida)
Wheelabrator Mecklenburg Inc. (Delaware)
Wheelabrator Mercer Inc. (Delaware)
Wheelabrator Millbury Inc. (Delaware)
Wheelabrator MSW Plant 12 Inc. (Delaware)
Wheelabrator New Hampshire Inc. (Delaware)
Wheelabrator New Jersey Inc. (Delaware)
Wheelabrator NHC Inc. (Delaware)
Wheelabrator Northampton Energy Company Inc. (Delaware)
Wheelabrator Northampton Inc. (Delaware)
Wheelabrator Northampton Linerboard Company Inc. (Delaware)
Wheelabrator North Broward Inc. (Delaware)
Wheelabrator North Shore Inc. (Delaware)
Wheelabrator Norwalk Energy Company Inc. (Delaware)
Wheelabrator Peekskill Inc. (Delaware)
Wheelabrator Penacook Inc. (Delaware)
Wheelabrator Pierce Inc. (Delaware)
Wheelabrator Pinellas Inc. (Delaware)
Wheelabrator Plant Services Inc. (Delaware)
Wheelabrator Polk Inc. (Delaware)
Wheelabrator Pottstown Inc. (Delaware)
Wheelabrator Putnam Inc. (Delaware)
Wheelabrator Ridge Energy Inc. (Delaware)
Wheelabrator-Rust Maintenance Services, Inc. (Delaware)
Wheelabrator San Diego Inc. (Delaware)
Wheelabrator Saugus Inc. (Delaware)
Wheelabrator Shasta Energy Company Inc. (Delaware)
Wheelabrator Sherman Station One Inc. (Delaware)
Wheelabrator Sherman Station Two Inc. (Delaware
Wheelabrator Shrewsbury Inc. (Delaware)
Wheelabrator South Broward Inc. (Delaware)
Wheelabrator Spokane Inc. (Delaware)
Wheelabrator Technologies Environmental Services, Inc. (Delaware)
Wheelabrator Technologies Germany Holding GmbH (Germany)
Wheelabrator Technologies Inc. (Delaware)
Wheelabrator Technologies International Holdings Inc. (Delaware)
Wheelabrator Technologies International Limited (United Kingdom)
Wheelabrator Technologies (UK) Limited (United Kingdom)
Wheelabrator Tidewater Inc. (Delaware)
Wheelabrator Trucking Corporation (Delaware)
Wheelabrator Utility Services Inc. (Delaware)
31
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Williams Disposal Service, Inc. (Florida)
Winnipeg Waste Disposal Limited Partnership (Manitoba)
WMD Miljoservice A/S (Denmark)
WMI Medical Services, Inc. (Delaware)
WMI Medical Services of Arizona, Inc. (Delaware)
WMI Medical Services of California, Inc. (Delaware)
WMI Medical Services of Florida, Inc. (Delaware)
WMI Medical Services of Indiana, Inc. (Indiana)
WMI Medical Services of the Midwest, Inc. (Delaware)
WMI Medical Services of Wisconsin
WMI Medical Waste Services of Illinois
WMI Medical Services of New England, Inc. (Delaware)
WMI Medical Services of the Northeast, Inc. (Delaware)
WMI Medical Services of New Jersey
WMI Medical Services of New York
WMI Medical Services of Pennsylvania
WMI Medical Services of West Virginia
WMI Medical Services of Ohio, Inc. (Ohio)
WMI Medical Services - Dayton
WMI Medical Services - Toledo
WMI Medical Services - Youngstown
WMI Medical Services of the South, Inc. (Delaware)
WMI Medical Services of Texas, Inc. (Delaware)
WMI Medical Waste Services of North Carolina, Inc. (North Carolina)
WMI Properties, Inc. (Pennsylvania)
Warner Company Slag Operation
WMI Sellbergs AB (Sweden)
WMI Services of Nevada, Inc. (Nevada)
WMI Urban Services, Inc. (Delaware)
WMI Waste Management International Ltd. (United Kingdom)
WMI Waste Management of Canada Inc. (Ontario)
Waste Management Big Bear Services
Waste Management Essex/Kent
Waste Management Fraser Valley
Waste Management Halton/Hamilton
Waste Management Materials Processing - Recycle Canada
Waste Management Materials Processing - Toronto Transfer
Waste Management McLellan Disposal
Waste Management of Oxford/Perth
Waste Management of Calgary
Waste Management of Edmonton
Waste Management of Greater Toronto
Waste Management of Greater Vancouver
Waste Management of Southwestern Ontario
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Waste Management of the Okanagan
Waste Management of Thunder Bay
Waste Management York/Simcoe
West Edmonton Recycling and Disposal Facility
WMI du Quebec
WMI - Hull/Ottawa
WMI Recyclage - Quebec
WMI Services - Ontario
WMI Services - Quebec
WM Jatchuolto OY (Finland)
WMNA Container Recycling, Inc. (Delaware)
WMNA Rail-Cycle Sub, Inc. (Delaware)
WM Paper Recycling, Inc. (Delaware)
WMPC, Inc. (Delaware)
WM Portugal (Gestao De Residuos) LDA (Portugal)
WM Umwelttechnik Gmbh (Germany)
WMX Environmental Monitoring Laboratories, Inc. (Delaware)
WMX Mexico Holdings, Inc. (Delaware)
WMX Technology and Services, Inc. (Delaware)
WTI International Holdings Inc. (Delaware)
WTI Jinyuan Limited Inc. (Delaware)
WTI Jinyuan Power Inc. (Delaware)
WTI Pingliang Limited Inc. (Delaware)
WTI Pingliang Power Inc. (Delaware)
WTI Rust Holdings Inc. (Delaware)
W-T Universal Engineering, Inc. (California)
Wuper Recycling Container-Dienst GmbH (Germany)
Y & S Maintenance, Inc. (Pennsylvania)
Zimmark (Shenzhen) Oil Reclamation Limited (China)
Zimmerman Environmental Consultants, Inc. (Louisiana)
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Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports included or incorporated by reference in this Form 10-K, into the
Company's previously filed Registration Statements on Form S-8 (registration
nos. 33-7201, 33-17447, 33-26733, 33-35936, 33-63702 and 33-64266), and
previously filed Registration Statement on Form S-3 (registration no. 33-61108).
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
March 29, 1994
