Waste Management 2013 Annual Report Download - page 125

‰Selling, general and administrative expenses of $1,468 million in 2013, or 10.5% of revenues, compared
with $1,472 million, or 10.8% of revenues, in 2012. This decrease of $4 million is primarily due to our
restructuring efforts and cost control initiatives and the collection of reserved receivables in Puerto Rico
offset, in part, by higher compensation costs due to an increase in the accrual for incentive plan payouts
due to improved performance;
‰Income from operations of $1.1 billion, or 7.7% of revenues, in 2013 compared with $1.9 billion, or
13.6% of revenues, in 2012, the decrease of which is primarily attributable to the impairment charges
discussed below;
‰Net income attributable to Waste Management, Inc. of $98 million, or $0.21 per diluted share for 2013, as
compared with $817 million, or $1.76 per diluted share for 2012, the decrease of which is primarily
attributable to the impairment charges discussed below;
‰Net cash provided by operating activities of $2,455 million in 2013, as compared with $2,295 million in
2012, an increase $160 million; and
‰In 2013, we returned $683 million and $239 million to our shareholders through dividends and share
repurchases, respectively, compared with $658 million through dividends in 2012.
The following explanation of certain items that impacted the comparability of our 2013 results with 2012
has been provided to support investors’ understanding of our performance. Our 2013 results were affected by the
following:
‰The recognition of net pre-tax charges aggregating $1.0 billion, primarily related to (i) a $483 million
charge to impair goodwill associated with our Wheelabrator business; (ii) $262 million of charges to
impair certain landfills, primarily in our Eastern Canada Area; (iii) $144 million of charges to write down
the carrying value of three waste-to-energy facilities and (iv) $71 million of impairment charges relating
to investments in waste diversion technology companies. We do not expect these impairment charges to
materially impact our future results of operations or cash flows. These items had a negative impact of
$1.91 on our diluted earnings per share; and
‰The recognition of pre-tax charges aggregating $23 million primarily related to our acquisitions of
Greenstar and RCI as well as our July 2012 restructuring and other charges. These items had a negative
impact of $0.03 on our diluted earnings per share.
The following explanation of certain notable items that impacted the comparability of our 2012 results with
2011 has been provided to support investors’ understanding of our performance. Our 2012 results were affected
by the following:
‰The recognition of pre-tax impairment charges aggregating $109 million attributable primarily to
facilities in our medical waste services business and investments in waste diversion technologies. These
items had a negative impact of $0.17 on our diluted earnings per share;
‰The recognition of pre-tax restructuring costs aggregating $82 million primarily related to our July 2012
restructuring as well as integration costs associated with our acquisition of Oakleaf. These items had a
negative impact of $0.11 on our diluted earnings per share;
‰The recognition of a pre-tax charge of $10 million related to the withdrawal from an underfunded
multiemployer pension plan and a pre-tax charge of $6 million resulting from a labor union dispute.
These items had a negative impact of $0.02 on our diluted earnings per share; and
‰The recognition of pre-tax charges aggregating $10 million related to an accrual for legal reserves and the
impact of a decrease in the risk-free discount rate used to measure our environmental remediation
liabilities. These items had a negative impact of $0.01 on our diluted earnings per share.
Our 2011 results were affected by the following:
‰The recognition of a pre-tax charge of $24 million as a result of a litigation loss, which had a negative
impact of $0.03 on our diluted earnings per share;
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