Waste Management 2015 Annual Report Download - page 126

•Increase in bonus payments — Payments for our annual incentive plans are typically made in the first
quarter of the year based on prior year performance. Our cash flow from operations was unfavorably
impacted by approximately $65 million on a year-over-year basis, as the annual incentive plan
payments made in the first quarter of 2015 were significantly higher than payments made in the first
quarter of 2014.
•Forward-starting swaps — During the first quarter of 2014, the forward-starting interest rate swaps
associated with the anticipated issuance of senior notes in 2014 matured, and we paid cash of $36
million to settle the liabilities related to the swaps, as discussed further in Note 8 to the Consolidated
Financial Statements. This cash payment was classified as a change in “Accounts payable and accrued
liabilities” 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 on a year-over-year basis by changes in our assets and
liabilities accounts, particularly non-trade related items including payroll and incentive accruals.
However, we did experience continued improvement in both trade accounts receivable and accounts
payable. 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.
The most significant items affecting the comparisons of our operating cash flows in 2014 as compared to
2013 are summarized below:
•Increase in earnings — Our income from operations, excluding depreciation and amortization,
increased by $1.2 billion, on a year-over-year basis. Certain of the more significant drivers of our
earnings improvement include:
• Lower non-cash impairment charges of $652 million in 2014 as compared to 2013; and
• The net gain on the sale of our Wheelabrator business of $519 million in 2014.
After considering these items, and certain other non-cash items included in our comparative results, our
earnings drove an improvement in our cash flows from operating activities of approximately $100
million.
•Increase in tax payments — Cash paid for income taxes, net of excess tax benefits associated with
equity-based transactions, was approximately $242 million higher on a year-over-year basis due to
(i) higher pre-tax earnings; (ii) approximately $210 million anticipated overpayment during 2014,
when comparing our year-end tax provisions to payments made throughout the year and (iii) taxes
associated with the divestiture of our Puerto Rico operations.
•Forward-starting swaps — During 2014, the forward-starting interest rate swaps associated with the
anticipated issuance of senior notes in 2014 matured, and we paid cash of $36 million to settle the
liabilities related to the swaps. This cash payment has 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.
•Changes in other operating assets and liabilities, net of effects from business acquisitions and
divestitures — Our cash flow from operations was favorably impacted on a year-over-year basis 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.
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