Waste Management 2011 Annual Report Download - page 214

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
‰Our “Provision for income taxes” for the quarter was increased by the recognition of a tax charge of
$37 million principally related to refinements in estimates of our deferred state income taxes, which had a
negative impact of $0.08 on our diluted earnings per share.
Third Quarter 2010
‰Income from operations was negatively affected by (i) the recognition of pre-tax, non-cash charges
aggregating $16 million related to remediation and closure costs at five closed sites; and (ii) the
recognition of a $6 million unfavorable adjustment to “Operating” expenses due to a decrease from 3.0%
to 2.5% in the discount rate used to estimate the present value of our environmental remediation
obligations and recovery assets. These items decreased the quarter’s “Net Income attributable to Waste
Management, Inc.” by $14 million, or $0.03 per diluted share.
‰Our “Provision for income taxes” for the quarter was increased by the recognition of net tax charges of
$4 million due to adjustments relating to the finalization of our 2009 tax returns, partially offset by
favorable tax audit settlements, which, combined, had a negative impact of $0.01 on our diluted earnings
per share.
Fourth Quarter 2010
‰Income from operations was positively affected by (i) a $23 million decrease to “Depreciation and
amortization” expense for adjustments associated with changes in our expectations for the timing and cost
of future final capping, closure and post-closure of fully utilized airspace; and (ii) the recognition of a
$12 million favorable adjustment to “Operating” expenses due to an increase from 2.5% to 3.5% in the
discount rate used to estimate the present value of our environmental remediation obligations and
recovery assets. These items increased the quarter’s “Net Income attributable to Waste Management,
Inc.” by $22 million, or $0.05 per diluted share.
‰Income from operations was negatively affected by the recognition of pre-tax litigation charges of
$31 million, which had an unfavorable impact of $0.04 on our diluted earnings per share.
‰Our “Provision for income taxes” for the quarter was reduced by $9 million as a result of (i) the
recognition of a benefit of $6 million due to tax audit settlements; and (ii) the realization of state net
operating loss and credit carry-forwards of $3 million. This decrease in taxes positively affected the
quarter’s diluted earnings per common share by $0.02.
23. Condensed Consolidating Financial Statements
WM Holdings has fully and unconditionally guaranteed all of WM’s senior indebtedness. WM has fully and
unconditionally guaranteed all of WM Holdings’ senior indebtedness. None of WM’s other subsidiaries have
guaranteed any of WM’s or WM Holdings’ debt. As a result of these guarantee arrangements, we are required to
present the following condensed consolidating financial information (in millions):
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