UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the period ended September 14, 2015
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-12154
WASTE MANAGEMENT RETIREMENT SAVINGS
PLAN FOR BARGAINING UNIT EMPLOYEES
Waste Management, Inc.
1001 Fannin Street
Houston, TX 77002
WASTE MANAGEMENT RETIREMENT SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
Report of Independent Registered Public Accounting Firm
Administrative Committee
Waste Management Retirement Savings Plan
for Bargaining Unit Employees
We have audited the accompanying statements of net assets available for benefits of the Waste Management Retirement Savings Plan for Bargaining Unit Employees (the Plan) as of September 14, 2015 and December 31, 2014, and the related statement of changes in net assets available for benefits for the period ended September 14, 2015. These financial statements are the responsibility of Plan management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also 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 net assets available for benefits of the Plan as of September 14, 2015 and December 31, 2014, and the changes in net assets available for benefits for the period ended September 14, 2015, in conformity with accounting principles generally accepted in the United States of America.
/s/ WEAVER AND TIDWELL, L.L.P.
Houston, Texas
February 23, 2016
1
Waste Management Retirement Savings Plan
For Bargaining Unit Employees
Statements of Net Assets Available for Benefits
September 14, 2015 and December 31, 2014
| September 14, 2015 |
December 31, 2014 |
|||||||
| ASSETS: |
||||||||
| INVESTMENTS: |
||||||||
| Plan interest in the Master Trust at fair value |
$ | — | $ | 27,797,587 | ||||
| Plan interest in the Master Trust at contract value |
— | 4,135,103 | ||||||
|
|
|
|
|
|||||
| Total investments (Note 3) |
— | 31,932,690 | ||||||
|
|
|
|
|
|||||
| RECEIVABLES: |
||||||||
| Employee contributions |
— | 36,251 | ||||||
| Employer contributions |
— | 13,310 | ||||||
| Notes receivable from participants |
— | 1,708,589 | ||||||
|
|
|
|
|
|||||
| Total receivables |
— | 1,758,150 | ||||||
|
|
|
|
|
|||||
| NET ASSETS AVAILABLE FOR BENEFITS |
$ | — | $ | 33,690,840 | ||||
|
|
|
|
|
|||||
The accompanying notes are an integral part of these financial statements.
2
Waste Management Retirement Savings Plan
For Bargaining Unit Employees
Statement of Changes in Net Assets Available for Benefits
Period Ended September 14, 2015
| ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS: |
||||
| Contributions: |
||||
| Employee |
$ | 1,372,593 | ||
| Employer |
660,216 | |||
|
|
|
|||
| 2,032,809 | ||||
| Interest income on notes receivable from participants |
47,273 | |||
|
|
|
|||
| Total additions |
2,080,082 | |||
|
|
|
|||
| DEDUCTIONS FROM NET ASSETS AVAILABLE FOR BENEFITS: |
||||
| Net investment loss from the Master Trust (Note 3) |
295,056 | |||
| Benefits paid to participants |
2,148,644 | |||
|
|
|
|||
| Total deductions |
2,443,700 | |||
|
|
|
|||
| NET DECREASE BEFORE TRANSFERS |
(363,618 | ) | ||
| TRANSFERS FROM THE PLAN |
(33,327,222 | ) | ||
|
|
|
|||
| NET DECREASE IN NET ASSETS AVAILABLE FOR BENEFITS |
(33,690,840 | ) | ||
| NET ASSETS AVAILABLE FOR BENEFITS: |
||||
| Beginning of period |
33,690,840 | |||
|
|
|
|||
| End of period |
$ | — | ||
|
|
|
The accompanying notes are an integral part of these financial statements.
3
Waste Management Retirement Savings Plan
For Bargaining Unit Employees
September 14, 2015
1. Description of Plan
The following description of the Waste Management Retirement Savings Plan for Bargaining Unit Employees (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description and the plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan sponsored by Waste Management Holdings, Inc. on behalf of participating affiliates (collectively “Waste Management”) for the benefit of eligible employees and their beneficiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
On September 14, 2015, the Plan was merged with and into the Waste Management Retirement Savings Plan. The merger combined the principle union and non-union defined contribution plans maintained by Waste Management, Inc. and Waste Management Holdings, Inc. on behalf of participating affiliates. Coincident with the merger, the surviving Plan was amended and restated effective as of September 14, 2015, to reflect the merger and certain administrative changes associated with the transfer to a new third party recordkeeper, Bank of America/Merrill Lynch, and a new trustee, Bank of America.
Administration
The Administrative Committee of the Waste Management Employee Benefit Plans (the “Administrative Committee”) has been named to serve as administrator and fiduciary of the Plan. Waste Management, Inc. (“WM”) has entered into a Defined Contribution Plans Master Trust Agreement (the “Master Trust”) with State Street Bank and Trust Company (“State Street”) whereby State Street serves as trustee of the Plan. Voya Institutional Plan Services, LLC, formerly ING Institutional Plan Services, LLC, serves as recordkeeper.
Eligibility
Employees (as defined by the Plan) are eligible to participate in the Plan if they are covered by a collective bargaining agreement that so provides. The entry date for participation is generally following completion of a 90-day period of service (as defined in the Plan) unless other provisions are set forth in the collective bargaining agreement.
Individuals who are ineligible to participate in the Plan consist of (a) leased employees; (b) individuals providing services to Waste Management and who are designated as independent contractors; (c) any individual who is not regularly employed in, or a citizen of, the United States; and (d) individuals who are participants in certain other pension, retirement, profit-sharing, stock bonus, thrift or savings plans maintained by Waste Management other than the Waste Management Pension Plan for Collectively Bargained Employees or such other plans as may from time to time be determined by the Administrative Committee.
Contributions
Participants may contribute from one percent to 25 percent of their pre-tax compensation, as defined by the Plan, not to exceed certain limits as described in the plan document (“Employee Contribution”). After-tax contributions are not permitted by the Plan. Participants may also contribute amounts representing distributions from other qualified plans (“Rollover Contributions”). The Plan provides for Employer Contributions on behalf of eligible participants under the terms of certain applicable collective bargaining agreements.
4
Investment Options
The Plan, through its investments in the Master Trust, offers participants diversified investment options. During 2015, the Plan offered the following: (a) 12 common collective trust funds (including 10 target retirement-date funds); (b) five mutual funds; (c) a WM common stock fund (which is an Employee Stock Ownership Plan); (d) a stable value fund, which includes direct investments and investments in common collective trust funds, managed by Galliard Capital Management (“Galliard”); and (e) a self-managed account, which allows participants to select various securities sold on the New York Stock Exchange, American Stock Exchange and NASDAQ. Participants direct investment of their accounts among the investment options offered under the Plan. A participant may make such an election on any business day. The Plan utilizes cash equivalents to temporarily hold monies pending settlement for transactions initiated by participants.
If a participant invests in the WM common stock fund, the participant can elect to receive in cash any dividends paid on the common stock in the participant’s account. If a participant does not make such an election, dividends will automatically be reinvested in the WM common stock fund. Each participant who has invested in the WM common stock fund has the right to vote the shares of stock in his or her account with respect to any matter that comes before the shareholders for a vote.
With respect to the self-managed account, several restrictions apply and a minimum balance is required to participate. Additionally, if a participant invests in the self-managed account, the participant has the right to vote the shares of securities held in the participant’s account.
Vesting
Participants are immediately vested in their Employee Contributions, Rollover Contributions and Employer Contributions, plus earnings thereon.
Participant Accounts
Each participant’s account is credited with the participant’s Employee Contribution, Rollover Contribution and any Employer Contribution and an allocation of investment income and loss and expenses. Investment income and loss is allocated to a participant’s account based upon a participant’s proportionate share of the funds within the Master Trust.
Payment of Benefits
Upon retirement, disability or termination of employment, participants or, in the case of a participant’s death, their designated beneficiaries, may make withdrawals from their accounts as specified by the Plan. Prior to termination, participants who have reached age 59-1/2 may withdraw from their accounts. Distributions are made by a single lump-sum payment or direct rollover. Distributions of accounts invested in WM common stock may be taken in whole shares of common stock or cash.
Participants may make withdrawals from their contributions, including certain earnings on those contributions, in the event of proven financial hardship of the participant. Not more than one hardship withdrawal is permitted in any 12-month period, and the participant is not permitted to contribute to the Plan or any other plans maintained by Waste Management for six months after receiving the hardship distribution.
Notes Receivable from Participants
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. No allowance for credit losses has been recorded as of December 31, 2014. If a participant ceases to make loan repayments and the Plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded. Participants who are active employees may obtain loans of not less than $1,000 and a maximum of 50 percent of a participant’s vested accounts (excluding any amounts invested in the self-managed account) immediately preceding the loan grant date. In no event shall a loan exceed $50,000, reduced by the greater of (a) the highest outstanding balance of loans during the one-year period ending on the date before a new loan is made or modified, or (b) the outstanding balance of loans on the date a new loan is made or modified. Not more than one loan shall be outstanding at any time, except for multiple loans which (a) result from a merger of another plan into this Plan, or (b) result from a participant’s loan becoming taxable under Section 72(p) of the Internal Revenue Code of 1986, as amended (the “Code”). Interest rates and repayment terms are established by the Administrative Committee. Such loans shall be repaid by payroll deduction
5
or any other method approved by the Administrative Committee. The Administrative Committee requires that: (a) repayments be made no less frequently than quarterly; (b) loans be repaid over a period not to exceed 54 months; and (c) repayments, including interest, be made in equal periodic payments over the term of the loan and applied to principal using a level amortization over the repayment period. Prepayment of a participant’s total principal amount outstanding is allowed at any time.
Administrative Expenses
Master Trust administrative expenses, including trustee, recordkeeping and investment management fees, are allocated in proportion to the investment balances of the underlying plans and are netted against investment income. Loan administration fees are charged directly to the account balance of the participant requesting the loan. Administrative expenses are reflected as a reduction of Master Trust investment income and are included in “Net investment loss from the Master Trust” in the accompanying Statement of Changes in Net Assets Available for Benefits. In 2015, Waste Management elected to pay certain audit and legal fees of the Plan.
2. Summary of Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). Benefits are recorded when paid to participants.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires the Plan’s management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ materially from the estimates and assumptions used in the preparation of the financial statements.
Investments
The purpose of the Master Trust is the collective investment of the assets of participating employee benefit plans of Waste Management. The Master Trust’s assets are allocated among participating plans by assigning to each plan those transactions (primarily contributions, benefit payments and certain administrative expenses) that can be specifically identified, and by allocating among participating plans, in proportion to the fair value of the assets assigned to each plan, income and expenses resulting from the collective investment of the assets of the Master Trust.
Corporate stocks, mutual funds and publicly-traded partnership interests held by the Master Trust are stated at fair value based on quoted market prices as of the financial statement date. The fair values of the common collective trust funds held by the Master Trust are generally based on net asset values established by the issuer of the common collective trust funds based on fair values of the underlying assets. The investment options available within the Plan include a stable value fund that invests in fully benefit-responsive guaranteed investment contracts (“GICs”) and synthetic investment contracts (“Synthetic GICs”). These investments held by the stable value fund are presented at contract value in the Statement of Net Assets Available for Benefits. Contract value is the relevant measurement attribute for fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The fair value measurement of these investments is discussed further in Note 4. Short-term investments (included in amounts reported as common collective trust funds herein) are stated at cost, which approximates fair value.
The Master Trust records purchases and sales of securities on a trade-date basis and dividends on the ex-dividend date. Interest income is recorded on the accrual basis.
6
Risks and Uncertainties
The Plan provides for investments in various securities that, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Statements of Net Assets Available for Benefits and participant account balances.
Accounting Changes
In July 2015, the Financial Accounting Standards Board (“FASB”) issued amended authoritative guidance associated with plan accounting comprised of three parts. Part I eliminates the requirements to measure the fair value of fully benefit-responsive investment contracts and provide certain disclosures. Contract value is the only required measure for fully benefit-responsive investment contracts. Part II eliminates the requirements to disclose individual investments that represent five percent or more of net assets available for benefits and the net appreciation or depreciation in fair value of investments by general type. Part II also simplifies the level of disaggregation of investments that are measured using fair value. Plans will continue to disaggregate investments that are measured using fair value by general type; however, plans are no longer required to also disaggregate investment by nature, characteristics and risks. Further, the disclosure of information about fair value measurements shall be provided by general type of plan asset. Part III is not applicable to the Plan. The amended guidance permits early adoption, which the Plan elected. The Plan’s early adoption of this guidance in 2015 was applied retrospectively and did not have a material impact on its financial statements.
Reclassifications
Certain reclassifications have been made to the 2014 financial statements to conform to the 2015 financial statement presentation. These reclassifications had no effect on changes in net assets available for benefits.
3. Plan Interest in the Master Trust
The Plan investments are held in the Master Trust along with the Waste Management Retirement Savings Plan (the “Non-Union Plan”). As of December 31, 2014, the Plan’s beneficial interest in the net assets of the Master Trust was 1.61%.
Neither the Plan nor the Non-Union Plan has an undivided interest in the investments held in the Master Trust since each plan’s interest in the investments of the Master Trust is based on the account balances of the participants and their elected investment fund options. However, the Plan’s beneficial interest in each of the underlying investment fund options does not vary significantly from the Plan’s beneficial interest in the total net assets of the Master Trust. In connection with the merger of the Plan with and into the Waste Management Retirement Savings Plan on September 14, 2015, the assets of the Plan were consolidated into one Trust and the Master Trust was dissolved.
7
The net assets of the Master Trust at December 31, 2014 consist of the following:
| Plan Interest% |
Master Trust | |||||||
| Assets: |
||||||||
| Investments, at fair value: |
||||||||
| Common collective trust funds |
2.6 | % | $ | 729,470,207 | ||||
| WM common stock |
0.7 | % | 128,850,510 | |||||
| Self-managed accounts |
— | 47,846,995 | ||||||
| Mutual funds |
1.0 | % | 761,042,250 | |||||
|
|
|
|||||||
| Total investments at fair value |
1.7 | % | 1,667,209,962 | |||||
|
|
|
|||||||
| Investments at contract value: |
||||||||
| Stable value fund |
1.3 | % | 320,549,991 | |||||
|
|
|
|||||||
| Total investments at contract value |
1.3 | % | 320,549,991 | |||||
|
|
|
|||||||
| Total investments |
1.6 | % | 1,987,759,953 | |||||
|
|
|
|||||||
| Interest receivable |
263,913 | |||||||
| Cash, non-interest bearing |
23,243 | |||||||
|
|
|
|||||||
| Total assets |
1,988,047,109 | |||||||
|
|
|
|||||||
| Liabilities: |
||||||||
| Securities purchased payable, net |
19,908 | |||||||
| Administrative fees payable |
742,634 | |||||||
|
|
|
|||||||
| Total liabilities |
762,542 | |||||||
|
|
|
|||||||
| Net assets, fully benefit-responsive investment contracts at contract value |
$ | 1,987,284,567 | ||||||
|
|
|
|||||||
Respective interests in the net assets of the Master Trust by the Non-Union Plan and the Plan at December 31, 2014 are as follows:
| Non-Union Plan interest |
$ | 1,955,351,877 | ||
| Plan interest |
31,932,690 | |||
|
|
|
|||
| Total |
$ | 1,987,284,567 | ||
|
|
|
8
Changes in net assets of the Master Trust for the period ended September 14, 2015, are as follows:
| ADDITIONS: |
||||
| Interest |
$ | 668 | ||
| Dividends – WM common stock |
1,859,303 | |||
| Dividends – other than WM common stock |
6,830,466 | |||
| Other, net |
551 | |||
|
|
|
|||
| Total additions |
8,690,988 | |||
|
|
|
|||
| DEDUCTIONS: |
||||
| Net depreciation of investments |
33,729,458 | |||
| Administrative fees |
1,678,965 | |||
|
|
|
|||
| Total deductions |
35,408,423 | |||
|
|
|
|||
| NET DECREASE BEFORE TRANSFERS |
(26,717,435 | ) | ||
| TRANSFERS IN (a) |
181,630,628 | |||
| TRANSFERS OUT (b) |
(2,142,197,760 | ) | ||
|
|
|
|||
| NET DECREASE IN NET ASSETS |
(1,987,284,567 | ) | ||
| NET ASSETS: |
||||
| Beginning of period |
1,987,284,567 | |||
|
|
|
|||
| End of period |
$ | — | ||
|
|
|
|||
| Non-Union Plan interest in net investment loss from the Master Trust |
$ | (26,422,379 | ) | |
| Plan interest in net investment loss from the Master Trust |
(295,056 | ) | ||
|
|
|
|||
| $ | (26,717,435 | ) | ||
|
|
|
| (a) | Includes contributions, rollovers, transfers in and net participant loan activity. |
| (b) | Includes benefit payments to participants and transfers out. |
4. Investment Contracts
The trust funds held by the Master Trust include a stable value fund that invests in fully benefit-responsive GICs and Synthetic GICs. The following disclosures provide information about the nature of these investments and how fair values of these investments are measured.
Guaranteed Investment Contracts — GICs are contracts that provide a specified rate of return for a specific period of time. The fair values of the GICs included in the Plan’s stable value fund are measured by the investment manager using a discounted cash flow methodology at market rates.
Synthetic Guaranteed Investment Contracts — Synthetic GICs are comprised of (a) individual assets or investments placed in a trust and (b) wrapper contracts that guarantee that participant transactions will be executed at contract value. The investment portfolio of a Synthetic GIC when coupled with a wrapper contract attempts to replicate the investment characteristics of traditional GICs.
The fair value of the Synthetic GICs included in the Plan’s stable value fund are measured as follows:
| • | Fair value of individual assets and investments — Individual assets and investments are valued at representative quoted market prices when available. Short-term securities, if any, are stated at amortized cost, which approximates fair value. Debt securities are valued by a pricing service based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders. Investments in regulated investment companies or collective investment funds are valued at the net asset value per share or unit on the valuation date. Any accrued interest on the underlying investments is also included as a component of the fair value of those investments. |
9
| • | Fair value of wrapper contracts — The fair value of wrapper contracts is determined using the income approach discounting methodology that incorporates the difference between current market level rates for contract level wrap fees and the wrap fee being charged for the Synthetic GIC. This difference is calculated as a dollar value and discounted by the prevailing discount rate as of the appropriate measurement date. |
The interest crediting rates for the traditional GICs are agreed to in advance with the issuer. The interest crediting rates for Synthetic GICs are calculated on a quarterly basis using the contract value, market value, yield and duration of the underlying securities, but cannot be less than zero.
There are certain events not initiated by the Plan participants that could limit the ability of the Plan to transact with the issuer at GIC or Synthetic GIC contract value. Examples of such events include, but are not limited to: material amendments to the Plan documents or administration; changes to the Plan’s competing investment options including the elimination of equity wash provisions; bankruptcy of the Plan sponsor or other events that would cause a significant withdrawal from the Plan; full or partial termination of the Plan; failure of the Plan to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA; any change in tax code, laws or regulations applicable to the Plan; and delivery of any communication to Plan participants designed to influence participants not to invest in the fund. The Plan sponsor does not believe that the occurrence of any of these events, which would limit the Plan’s ability to transact with the issuer at its contract value, is probable.
Contract issuers are generally not allowed to terminate GICs and settle at an amount different from contract value unless there is a breach of contract which is not corrected within the time permitted by the contract. Synthetic GICs generally are evergreen contracts that contain termination provisions, allowing the fund or the contract issuer to terminate with notice, at any time at fair value, and providing for automatic termination of the contract if the contract value or the fair value of the underlying portfolio equals zero. The issuer is obligated to pay the excess contract value when the fair value of the underlying portfolio equals zero.
5. Fair Value Measurements
For purposes of the Plan’s financial reporting, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring assets and liabilities that are required to be recorded at fair value, the Plan considers the principal or most advantageous market in which the Plan would transact. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Inputs that are generally unobservable and typically reflect the Plan’s estimate of assumptions that market participants would use in pricing the asset or liability. The Plan had no Level 3 assets at December 31, 2014.
We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability, including assumptions about risk when appropriate.
10
The following table provides by level, within the fair value hierarchy, a summary of investments of the Master Trust at December 31, 2014 measured at fair value on a recurring basis:
| Quoted Prices in Active Markets (Level 1): |
||||
| WM common stock |
$ | 128,850,510 | ||
| Self-managed accounts |
40,274,596 | |||
| Mutual funds |
761,042,250 | |||
|
|
|
|||
| Subtotal Level 1 |
930,167,356 | |||
|
|
|
|||
| Significant Other Observable Inputs (Level 2): |
||||
| Self-managed accounts — money market portfolio |
7,572,399 | |||
|
|
|
|||
| Subtotal Level 2 |
7,572,399 | |||
|
|
|
|||
| Investments Measured at Net Asset Value (a): |
||||
| Common collective trust funds |
729,470,207 | |||
|
|
|
|||
| Subtotal Investments Measured at Net Asset Value |
729,470,207 | |||
|
|
|
|||
| Total Investments of the Master Trust |
$ | 1,667,209,962 | ||
|
|
|
| (a) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. |
6. Federal Income Taxes
The Plan has received a determination letter from the Internal Revenue Service (the “IRS”) dated April 30, 2015, stating that the Plan, as amended and restated as of January 1, 2015, is in compliance with the applicable requirements of the Internal Revenue Code (the “Code”), subject to the adoption of proposed submitted amendments. The Plan sponsor timely adopted the proposed amendments. Prior to the merger of the Plan with and into the Waste Management Retirement Savings Plan, no other amendments to the Plan were adopted after the issuance of the determination letter. The Plan administrator and counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. If an operational issue is discovered, the Plan sponsor has indicated that it will take any necessary steps to bring the Plan’s operations into compliance with the Code.
GAAP requires plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of September 14, 2015, there are no uncertain tax positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2012.
7. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2014:
| Net assets available for benefits per the financial statements |
$ | 33,690,840 | ||
| Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
81,231 | |||
|
|
|
|||
| Net assets available for benefits per the Form 5500 |
$ | 33,772,071 | ||
|
|
|
11
The following is a reconciliation of the net decrease in net assets available for benefits per the financial statements to the Form 5500 for the period ended September 14, 2015:
| Net decrease in net assets available for benefits per the financial statements |
$ | (33,690,840 | ) | |
| Adjustment from contract value to fair value for fully benefit-responsive investment contracts at December 31, 2014 |
(81,231 | ) | ||
|
|
|
|||
| Net decrease in assets available for benefits per the Form 5500 |
$ | (33,772,071 | ) | |
|
|
|
The accompanying financial statements present fully benefit-responsive investment contracts at contract value. The Form 5500 requires fully benefit-responsive investment contracts to be reported at fair value. Therefore, the adjustment from fair value to contract value for fully benefit-responsive investment contracts represents a reconciling item.
8. Related Party Transactions
Certain investments of the Plan are managed by State Street, which is the trustee of the Plan, and TD Ameritrade, Inc., which provides securities brokerage services for the self-managed account. The Plan also holds notes receivable representing participant loans. The stable value fund is managed by Galliard, a subsidiary of Wells Fargo Bank, N.A., custodian for the fund. These transactions qualify as party-in-interest transactions. Additionally, a portion of the Plan’s assets are invested in WM common stock. Because WM is the parent of the Plan sponsor, transactions involving WM common stock also qualify as party-in-interest transactions. All of these transactions are exempt from the prohibited transactions rules.
12
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| WASTE MANAGEMENT RETIREMENT | ||||
| SAVINGS PLAN FOR BARGAINING | ||||
| UNIT EMPLOYEES | ||||
| Date: February 23, 2016 | By: | /s/ Gordon Blasius | ||
| Gordon Blasius | ||||
| Vice President, Compensation & Benefits | ||||
| Member, Administrative Committee of the Waste | ||||
| Management Employee Benefit Plans | ||||
13
INDEX TO EXHIBITS
| Exhibit Number |
Description | |
| 23.1 | Consent of Independent Registered Public Accounting Firm | |
14