Waste Management 2013 Annual Report Download - page 149

‰Investment in Low-Income Housing Properties — Our low-income housing investment and the resulting
federal tax credits reduced our provision for income taxes by $38 million for each of the years ended
December 31, 2013, 2012 and 2011. Refer to Note 9 to the Consolidated Financial Statements for more
information related to our low-income housing investment.
‰Tax Audit Settlements — The settlement of various tax audits resulted in reductions in income tax
expense of $11 million, $10 million and $12 million for the years ended December 31, 2013, 2012 and
2011, respectively.
‰State Net Operating Loss and Credit Carry-forwards — During 2013, 2012 and 2011, we recognized
state net operating loss and credit carry-forwards resulting in a reduction to our provision for income
taxes of $16 million, $5 million and $4 million, respectively.
‰Federal Net Operating Loss Carry-Forwards — During 2012, we recognized additional federal net
operating loss carry-forwards resulting in a reduction to our provision for income taxes of $8 million.
‰Tax Implications of Impairments — During 2013 and 2012, the recording of impairments and the related
income tax impacts resulted in permanent differences which increased our provision for income taxes by
$235 million and $7 million, respectively. See Notes 6 and 13 to the Consolidated Financial Statements
for more information related to asset impairments and unusual items.
We expect our 2014 recurring effective tax rate will be approximately 35.0% based on projected income
levels, federal tax credits and other permanent items.
The American Taxpayer Relief Act of 2012 was signed into law on January 2, 2013 and included an
extension for one year of the bonus depreciation allowance. As a result, 50% of qualifying capital expenditures
on property placed in service before January 1, 2014 were depreciated immediately. The acceleration of
deductions on 2013 qualifying capital expenditures resulting from the bonus depreciation provisions had no
impact on our effective income tax rate for 2013. However, the ability to accelerate depreciation deductions
decreased our 2013 cash taxes by approximately $70 million. Taking the accelerated tax depreciation will result
in increased cash taxes in subsequent periods when the deductions for these capital expenditures would have
otherwise been taken.
Noncontrolling Interests
Net income attributable to noncontrolling interests was $32 million in 2013, $43 million in 2012 and $48
million in 2011. These amounts are principally related to third parties’ equity interests in two limited liability
companies that own three waste-to-energy facilities operated by our Wheelabrator business. Refer to Note 20 to
the Consolidated Financial Statements for information related to the consolidation of these variable interest
entities. The decrease in 2013 is primarily due to the net loss of $10 million attributable to noncontrolling interest
holders associated with the $20 million impairment charge related to a majority-owned waste diversion
technology company discussed above in (Income) Expense from Divestitures, Asset Impairments (Other than
Goodwill) and Unusual Items.
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