Waste Management, Inc - History

History

In the 1890s, Ham Huizenga, a Dutch immigrant, began hauling garbage at $1.25/wagon in Chicago. In 1968, Wayne Huizenga, Dean Buntrock, and Larry Beck founded Waste Management, Inc. and began aggressively purchasing many of the smaller garbage collection services across the country, as the descendant firm of Ham Huizenga. In 1971, Waste Management went public, and by 1972, the company had made 133 acquisitions with $82M in revenue. It had 60,000 commercial and industrial accounts and 600,000 residential customers in 19 states and the provinces of Ontario and Quebec. In the 1980s, Waste Management acquired Service Corporation of America (SCA) to become the largest waste hauler in the country.

Between the years of 1992 and 1997, the executive officers of Waste Management began "cooking" the accounting books by "Refusing to record expenses necessary to write off the costs of unsuccessful and abandoned landfill development projects, Establishing inflated environmental reserves (liabilities) in connection with acquisitions so that the excess reserves could be used to avoid recording unrelated operating expenses, improperly capitalizing a variety of expenses, failing to establish sufficient reserves (liabilities) to pay for income taxes and other expenses, avoiding depreciation expenses on their garbage trucks by both assigning unsupported and inflating salvage values and extending their useful lives, assigned arbitrary salvage values to other assets that previously had no salvage value, failed to record expenses for decreases in the value of landfills as they were filled with waste, used netting to eliminate approximately $490 million in current period operating expenses and accumulated prior period accounting misstatements by offsetting them against unrelated one-time gains on the sale or exchange of assets, and used geography entries to move tens of millions of dollars between various line items on the Company's income statement to, in Koenig's words, "make the financials look the way we want to show them."" according to the American Institute of Certified Public Accountants (2005).

When a new CEO took charge of the company in 1997, he ordered a review of the company's accounting practices in 1997. In 1998 Waste Management restated its 1992-1997 earnings by $1.7 billion, making it the largest restatement in history.

In 1998, in a pivotal development point, Waste Management merged with USA Waste and moved its headquarters from Chicago to Houston. The merged companies retained the Waste Management brand. However, that year also brought trouble for the newly expanded company, in the form of an accounting scandal.

In November 1999, turn-around CE was brought in to help Waste Management recover. The company has since implemented new technologies, safety standards, and operational practices, and is on a steady upward climb.

On July 14, 2008, Waste Management offered a $34 per share bid to acquire arch-competitor Republic Services, Inc. On August 11, 2008, the bid was raised to $37 per share. On August 15, 2008, Republic Services, Inc. denied Waste Management's bid for a second time. On October 13, 2008, Waste Management withdrew its bid for Republic Services, citing financial market turmoil.

In January 2009, a global economic crisis forced Waste Management to aggressively reduce and restructure its corporate workforce.

On February 7, 2010, CBS debuted a new TV series called Undercover Boss after the Super Bowl. Waste Management COO Lawrence O'Donnell III participated in this first episode and got a chance to see up close the inner workings of the company he helped run. O'Donnell left Waste Management on July 1, 2010.

Waste Management also sponsored the #14 car of Sterling Marlin in 2006 until 2007 in the NASCAR Sprint Cup Series.