SEPTEMBER 2008

Waste Management posts decline in second quarter earnings
Company posts higher revenue and increased cash from operations

Waste Management, Inc. announced financial results for its second quarter ended June 30, 2008. Revenue for the second quarter of 2008 was $3.49 billion compared with $3.36 billion in the year ago period, an increase of 3.9%. Net income for the quarter was $318 million, or $0.64 per diluted share, compared with $338 million, or $0.64 per diluted share, in the prior year period.

The Company noted several items that impacted the results in the 2007 and 2008 second quarters. Results in the second quarter of 2008 included a net $0.01 per diluted share benefit from income tax items. Results in the second quarter of 2007 included a combined benefit of $0.08 per diluted share, consisting of $0.05 per diluted share from income tax items and $0.03 per diluted share from divestitures of under-performing operations.

Excluding those items, earnings would have been $311 million, or $0.63 per diluted share, in the second quarter of 2008 compared with $296 million, or $0.56 per diluted share, in the second quarter of 2007. This is a 12.5% increase in adjusted earnings per diluted share.

Income from operations as a percent of revenue was 18.1% in the second quarter of 2008. This is a 20 basis point improvement compared with the second quarter of 2007, as adjusted for the items noted above.

For the six months ended June 30, 2008, Waste Management reported operating revenue of $6.76 billion, compared with $6.55 billion for the same period last year. Net income was $559 million, or $1.13 per diluted share, for the six months ended June 30, 2008, compared with $576 million and $1.09 per diluted share, respectively, for the same period in 2007.

Acquisitions contributed 1.0% to higher revenue in the quarter, while divestitures caused a 0.8% decline in revenue in the quarter.

Operating expenses were 62.5% of revenue, up from 62.3% of revenue in the same period in 2007. Excluding the impacts of higher diesel fuel prices and higher recycling commodity prices on both operating expenses and revenue, operating expenses were 61.0% of revenue in the second quarter of 2008, or a 130 basis point improvement compared with the prior year period.