Waste Management 2013 Annual Report Download - page 157

‰lower bonus expense of approximately $90 million in 2012 when compared with 2011.
‰Increased income tax payments — Cash paid for income taxes, net of excess tax benefits associated with
equity-based transactions, was approximately $63 million higher on a year-over-year basis as a result of
the decrease in the bonus depreciation allowance from a deduction of 100% of qualifying capital
expenditures for property placed in service in 2011 to a deduction of 50% of qualifying capital
expenditures for property placed in service in 2012. See Liquidity Impacts of Income Tax Items below for
additional information.
‰Forward starting swaps — During the first quarter of 2011 and the third quarter of 2012, the forward-
starting interest rate swaps associated with anticipated fixed-rate debt issuances were terminated
contemporaneously with the actual issuance of senior notes in February 2011 and September 2012, and
we paid cash of $9 million and $59 million, respectively, to settle the liabilities related to these swap
agreements. These cash payments have been classified as a change in “Accounts payable and accrued
liabilities” within “Net cash provided by operating activities” in the Consolidated Statement of Cash
Flows.
‰Termination of interest rate swaps — In April 2012, we elected to terminate our $1 billion interest rate
swap portfolio associated with senior notes that were scheduled to mature from November 2012 through
March 2018. Upon termination of the swaps, we received $72 million in cash for their fair value. The
cash proceeds received from the termination of interest rate swap agreements have been classified as a
change in “Other assets” within “Net cash provided by operating activities” in the Consolidated Statement
of Cash Flows.
‰Changes in assets and liabilities, net of effects from business acquisitions and divestitures — Our cash
flow from operations was unfavorably impacted in 2012 by changes in our working capital accounts.
Although our working capital changes may vary from year to year, they are typically driven by changes in
accounts receivable, which are affected by both revenue changes and timing of payments received, and
accounts payable changes, which are affected by both cost changes and timing of payments.
Net Cash Used in Investing Activities — The most significant items affecting the comparison of our
investing cash flows for the periods presented are summarized below:
‰Capital expenditures — We used $1,271 million during 2013 for capital expenditures, compared with
$1,510 million in 2012 and $1,324 million in 2011. The decrease can generally be attributed to increased
focus on capital spending management. The increase in capital expenditures in 2012 and 2011 is a result
of our increased spending on compressed natural gas vehicles, related fueling infrastructure, and
information technology infrastructure and growth initiatives, as well as our taking advantage of the bonus
depreciation legislation. The year-over-year comparison of 2013 with 2012 was also affected by timing
differences associated with cash payments for the previous years’ fourth quarter capital spending.
Approximately $171 million of our fourth quarter 2012 spending was paid in cash in the first quarter of
2013 compared with approximately $244 million of our fourth quarter 2011 spending that was paid in the
first quarter of 2012.
‰Proceeds from divestitures — Proceeds from divestitures (net of cash divested) and other sales of assets
were $138 million in 2013, $44 million in 2012 and $36 million in 2011. These divestitures were made as
part of our initiative to improve or divest certain underperforming and non-strategic operations. In 2013,
our proceeds from divestitures included approximately $41 million related to investments in oil and gas
producing properties and $14 million related to certain of our medical waste service operations and a
transfer station in our Greater Mid-Atlantic Area. The remaining amount reported for 2013, as well as the
proceeds in 2012 and 2011, generally relate to the sale of fixed assets.
‰Acquisitions — Our spending on acquisitions was $724 million in 2013 compared with $250 million in
2012 and $867 million in 2011. In 2013, our acquisitions consisted primarily of the recycling operations
of Greenstar, for which we paid $170 million, and substantially all of the assets of RCI, for which we paid
$481 million. The remainder of our 2013 acquisitions related to collection and energy services operations.
In 2012, our acquisitions consisted primarily of interests in oil and gas producing properties acquired
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