SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Waste Management, Inc.

Delaware (State or Other Jurisdiction of		1-12154 (Commission File Number)		73-1309529 (IRS Employer Identification No.)
Incorporation)

1001 Fannin, Suite 4000 Houston, Texas		77002
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone number, including area code: (713) 512-6200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition

     On July 28, 2005, Waste Management, Inc. (the “Company”) issued a press release announcing its earnings for the fiscal quarter ended June 30, 2005. On the same date, the Company held a conference call, which was open to the public, to discuss these results. A copy of the press release is attached hereto as exhibit 99.1. A replay of the conference call is available beginning at approximately 11:00 a.m. Central time on July 28^th through 5:00 p.m. Central time on August 11th. The replay of the call may be heard over the Internet, by accessing the Company’s website at www.wm.com, or by telephone by dialing 800-642-1687 and entering conference code 7068485.

     The Company is disclosing on its earnings conference call the following non-GAAP financial measures for the second quarter of 2005: (i) free cash flow; (ii) adjusted EBIT margins; and (iii) adjusted EBITDA margins. The Company believes that providing investors with these non-GAAP financial measures gives investors additional information to enable them to assess, in the way management assesses, the Company’s current and continuing operations. Investors are urged to take into account GAAP measures as well as non-GAAP measures in evaluating the Company. Whenever the Company uses a non-GAAP financial measure, it provides a reconciliation of such measure to what it believes to be the most closely applicable GAAP financial measure. A reconciliation of free cash flow to cash flows from operating activities is included in the schedules to the press release that is attached to this Form 8-K as Exhibit 99.1. The Company’s reconciliation of the other non-GAAP measures disclosed by the Company are as follows:

Adjusted EBIT Margins

     The Company’s calculation of EBIT, or earnings before interest and tax, is the same measure as income from operations as presented on the Company’s income statement. EBIT margin represents total operating income as a percentage of revenue. The Company disclosed that EBIT margins had increased by 10 basis points over second quarter 2004 results after excluding the impact of impairments, gains on sales of assets and other unusual items in both years. The following table reconciles the non-GAAP measure to the GAAP measure (dollars in millions):

		Three Months Ended				Three Months Ended
		June 30, 2005				June 30, 2004
As reported:
Revenue		$	3,289			$	3,138
Income from Operations		$	463			$	442
GAAP EBIT margin			14.1	%			14.1	%
Adjustments to Income from Operations
Asset Impairment and Unusual Items		$	(6	)		$	(9	)
As adjusted:
Revenue		$	3,289			$	3,138
Adjusted Income from Operations		$	457			$	433
Adjusted EBIT Margin			13.9	%			13.8	%

Adjusted EBITDA Margins

     The Company defines EBITDA as earnings before interest, tax, depreciation and amortization and calculates that measure by adding depreciation and amortization charges back to income from operations. EBITDA margin represents EBITDA, as defined, as a percentage of revenue. The Company disclosed that the EBITDA margins of its Eastern, Western, Southern and Midwest Groups collectively increased by 10 basis points as compared to the prior year period, after adjusting for asset impairments and the gains on sales of businesses. The following table reconciles these measures (dollars in millions):

		Three Months Ended				Three Months Ended
		June 30, 2005				June 30, 2004
Income from operations of Eastern, Midwest, Southern and Western Groups		$	479			$	439
Add back Depreciation and Amortization		$	313			$	323
EBITDA		$	792			$	762
Adjustments to EBITDA:
Pottstown Landfill impairment		$	35				—
Gains on divestitures		$	(32	)		$	(2	)
Adjusted EBITDA		$	795			$	760
Revenue from Eastern, Midwest, Southern and Western Groups		$	3,268			$	3,140
Adjusted EBITDA Margin			24.3	%			24.2	%

Item 7.01. Regulation FD Disclosure.

Results of Pricing Study

     Below are results of the Company’s pricing study, initiated in January 2005, as of June 30, 2005. All price increases implemented by the Company since January 1, 2005 are included in the results presented. The percentages of tons that received price increases included in the tables below include all third-party tons received at the facilities. The amounts shown as percentages of tons lost due to price increases in the tables are the amounts that the Company has estimated were lost due to price increases based on customer feedback and analyses of monthly volume reports.

     The Company intends to use the information gathered from the pricing study to further develop and implement price increase plans throughout the rest of its landfill and transfer station operations over the next several months. On a going forward basis, the Company intends to report results from the pricing study only for those facilities with material variances in volumes due to price increases and may also report results from the implementation of price increase plans throughout the rest of the Company’s facilities.

Landfills

						% of Tons
						Price				Weighted				% of Tons Lost
						Increased				Avg Price				due to Price
Group		Market Area		Landfill		YTD				Increase %				Increase
Canada		Eastern Canada		Ottawa			45	%			11	%			—
		Western Canada		West Edmonton			70	%			3	%			5	%
East		Boston/Western Massachusetts		Fitchburg - RCI			45	%			4	%			25	%
		New Hampshire/Maine		Crossroads			30	%			2	%			—
		Western Pennsylvania		Lake View			95	%			4	%			—
		Western Pennsylvania		Shade - RCC			15	%			4	%			—
Midwest		Illinois		Five Oaks			65	%			3	%			—
		Minnesota		Burnsville			35	%			4	%			—
		Ohio		American			85	%			5	%			—
		Ohio		Mahoning			90	%			5	%			—
		Ohio		Suburban South			80	%			3	%			—
		Wisconsin		Orchard Ridge			65	%			3	%			—
South		Arkansas		Tontitown			85	%			14	%			—
		Carolinas		Palmetto			15	%			8	%			40	%
		Central Texas		Austin Community			75	%			5	%			<5	%
		Gulf Coast		Chastang			100	%			17	%			—
		Louisiana/Mississippi		Pecan Grove			25	%			4	%			—
		North Texas		New Boston			100	%			5	%			—
		Oklahoma		East Oak			60	%			8	%			—
		Tennessee/Alabama/Kentucky		Chestnut Ridge			5	%			13	%			25	%
West		North Bay		Altamont			70	%			20	%			—
		North Bay		Redwood			15	%			2	%			—
		Oregon		Hillsboro			100	%			6	%			—
		Ventura		Simi Valley			25	%			4	%			—
				Totals			50	%			8	%

Transfer Stations

						% of Tons								% of Tons
						Price				Weighted				Lost due to
						Increased				Avg Price				Price
Group		Market Area		Transfer Station		YTD				Increase %				Increase
Canada		Toronto		Clarington			—				—				—
East		Boston/Western Massachusetts		PRTR			50	%			4	%			—
		Eastern Pennsylvania		Indian Valley			80	%			6	%			—
		Eastern Pennsylvania		Philadelphia			60	%			5	%			—
		New Hampshire/Maine		Auburn			20	%			5	%			—
		New Jersey		Park Ridge			25	%			12	%			—
Midwest		Colorado		Colorado Springs			25	%			3	%			—
		Denver		D&R			20	%			2	%			30	%
		Denver		South Metro			90	%			4	%			15	%
		Illinois		Joliet			95	%			6	%			—
		Minnesota		Gallagher			90	%			4	%			—
		Wisconsin		Sheboygan Falls			—				—				—
South		Carolinas		Asheville			10	%			2	%			—
		Gulf Coast		Mobile			95	%			6	%			—
		Louisiana/Mississippi		St. Tammany			50	%			5	%			—
		Puerto Rico		San Juan			—				—				—
		South Florida		Delta - Riviera			90	%			17	%			—
		South Florida		Tall Pines			90	%			17	%			—
		Tennessee/Alabama/Kentucky		Nashville			90	%			3	%			—
West		Los Angeles		Carson			25	%			27	%			—
		North Bay		Davis Street			5	%			7	%			—
		Sacramento		Fresno			—				—				—
		San Diego - Orange County		Orange County			80	%			7	%			—
				Totals			40	%			9	%

Market Areas*

				% of Tons								% of Tons
				Price				Weighted				Lost due to
				Increased				Avg Price				Price
Group		Market Area		YTD				Increase %				Increase
East		Virginia/Maryland			35	%			5	%			1	%
Midwest		Michigan			65	%			6	%			3	%
South		Houston			75	%			4	%			1	%
West		Arizona			40	%			6	%			—

*Results for the Market Areas include essentially all of the transfer stations and landfills within such Market Areas, including the King George and Amelia Landfills in the Virginia/Maryland Market Area, Autumn Hills and Westside Landfills in the Michigan Market Area, Atascocita Landfill in the Houston Market Area and Northwest Regional Landfill in the Arizona Market Area that were originally included in the 30 landfills chosen for the study. These six landfills and transfer stations are included in the Market Area results and are no longer being tracked on an individual basis in the Landfills and Transfer Stations tables above.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit 99.1:       Press Release dated July 28, 2005

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Exhibit Index

Exhibit
Number		Description
99.1		Press Release dated July 28, 2005