Waste Management 2014 Annual Report Download - page 112

Our calculation of free cash flow and reconciliation to “Net cash provided by operating activities” is shown
in the table below (in millions), and may not be calculated the same as similarly-titled measures presented by
other companies:
Years Ended December 31,
2014 2013 2012
Net cash provided by operating activities .............. $2,331 $ 2,455 $ 2,295
Capital expenditures ............................... (1,151) (1,271) (1,510)
Proceeds from divestitures of businesses and other assets
(net of cash divested) ............................ 2,253 138 44
Free cash flow ................................... $3,433 $ 1,322 $ 829
When comparing our cash flows from operating activities for the year ended December 31, 2014 to the
comparable period in 2013, the decrease of $124 million is primarily related to higher income tax payments of
$247 million in the current year and a payment of $36 million made in the first quarter of 2014 to terminate our
forward starting swaps. These decreases were partially offset by higher cash earnings and favorable working
capital changes.
When comparing our cash flows from operating activities for the year ended December 31, 2013 to the
comparable period in 2012, the increase of $160 million was primarily related to the impact of higher cash
earnings, favorable impacts of working capital changes and the payment of $59 million to settle the liabilities
associated with the termination of our forward starting swaps in September 2012. The increase was partially
offset by an increase in tax payments of $145 million and the favorable cash receipt of $72 million resulting from
the termination of interest rate swaps in April 2012.
The decrease in capital expenditures when comparing the year ended December 31, 2014 to the comparable
period in 2013 and comparing the year ended December 31, 2013 to the comparable period in 2012 can generally
be attributed to increased focus on capital spending management.
The increase in proceeds from divestitures of businesses and other assets (net of cash divested) for the year
ended December 31, 2014 from the comparable period in 2013 is largely driven by (i) the sale of our
Wheelabrator business in the fourth quarter of 2014 for $1.95 billion; (ii) the sale of our investment in Shanghai
Environment Group (“SEG”), which was part of our Wheelabrator business, in the first quarter of 2014 for
$155 million; (iii) the sale of our Puerto Rico operations and certain other collection and landfill assets in the
second quarter of 2014, for proceeds of $80 million, including $65 million in cash; (iv) the sale of certain landfill
and collection operations in our Eastern Canada Area in the third quarter of 2014 for $39 million and (v) the sale
of a vacant facility in the second quarter of 2014 for $19 million.
Pending Acquisition
On September 17, 2014, the Company signed a definitive agreement to acquire the outstanding stock of
Deffenbaugh Disposal, Inc., one of the largest privately owned collection and disposal firms in the Midwest.
Closing of the acquisition is expected to occur in early 2015, subject to the receipt of regulatory approvals and
the satisfaction of customary closing conditions.
Acquisitions
Greenstar, LLC — On January 31, 2013, we paid $170 million inclusive of certain adjustments, to acquire
Greenstar, LLC (“Greenstar”). Pursuant to the sale and purchase agreement, up to an additional $40 million is
payable to the sellers during the period from 2014 to 2018, of which $20 million is guaranteed. The remaining
$20 million of this consideration is contingent based on changes in certain recyclable commodity indexes and
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