WASTE MANAGEMENT INC - FORM 10-K - EX-12.1 - February 18, 2016

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10-K - 10-K - WASTE MANAGEMENT INCd83265d10k.htm
EX-4.8 - EX-4.8 - WASTE MANAGEMENT INCd83265dex48.htm
EX-95 - EX-95 - WASTE MANAGEMENT INCd83265dex95.htm
EX-31.2 - EX-31.2 - WASTE MANAGEMENT INCd83265dex312.htm
EX-32.1 - EX-32.1 - WASTE MANAGEMENT INCd83265dex321.htm
EX-23.1 - EX-23.1 - WASTE MANAGEMENT INCd83265dex231.htm
EX-21.1 - EX-21.1 - WASTE MANAGEMENT INCd83265dex211.htm
EX-31.1 - EX-31.1 - WASTE MANAGEMENT INCd83265dex311.htm
EX-32.2 - EX-32.2 - WASTE MANAGEMENT INCd83265dex322.htm
EX-10.5 - EX-10.5 - WASTE MANAGEMENT INCd83265dex105.htm

Exhibit 12.1

WASTE MANAGEMENT, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(In Millions, Except Ratios)

(Unaudited)

 

     Years Ended December 31,  
     2015      2014      2013      2012      2011  

Income before income taxes and losses in equity investments(b)

    $ 1,109       $ 1,805       $ 535       $ 1,350       $ 1,557   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Fixed charges deducted from income:

               

Interest expense

      391         471         481         488         481   

Implicit interest in rents

      46         53         56         59         45   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     437         524         537         547         526   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Earnings available for fixed charges(b)

    $ 1,546       $ 2,329       $ 1,072       $ 1,897       $ 2,083   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Interest expense

    $ 391       $ 471       $ 481       $ 488       $ 481   

Capitalized interest

      16         16         19         21         22   

Implicit interest in rents

      46         53         56         59         45   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total fixed charges(b)

    $ 453       $ 540       $ 556       $ 568       $ 548   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ratio of earnings to fixed charges(a)

      3.4x         4.3x         1.9x         3.3x         3.8x   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted ratio of earnings to fixed charges(c)

      4.9x         4.2x         3.7x         3.6x         3.9x   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(a)

We have computed the ratio of earnings to fixed charges by dividing earnings available for fixed charges by fixed charges. For this purpose, earnings available for fixed charges consist of consolidated earnings before taxes, cumulative effects of changes in accounting principles, losses in equity investments and fixed charges. Fixed charges consist of interest expense, capitalized interest, and the portion of our operating lease rental expense that represents an interest factor, which we refer to as implicit interest in rents.

(b)

To the extent interest may be assessed by taxing authorities on any underpayment of income tax, such amounts are classified as a component of income tax expense in our Consolidated Statements of Operations. For purposes of this disclosure, we have elected to exclude interest expense related to income tax matters from our measurements of “Earnings available for fixed charges” and “Total fixed charges” for all periods presented, as amounts are immaterial.

(c)

This adjusted ratio of earnings to fixed charges (“Adjusted Ratio”) excludes the impact of restructuring charges, impairments, divestitures and losses on early extinguishment of debt. A reconciliation showing the effect of these items on our “Income before income taxes and losses in equity investments” used to calculate our earnings available for fixed charges is as follows (in millions):

 

     Years Ended December 31,  
     2015      2014      2013      2012      2011  

As reported income before income taxes and losses in equity investments

    $ 1,109       $ 1,805       $ 535       $ 1,350       $ 1,557   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjustments to Income before income taxes and losses in equity investments:

               

Restructuring costs

      15         82         18         67         19   

Goodwill impairments

      —           10         509         4         1   

Asset impairments (other than goodwill)

      89         345         472         79         8   

(Income) expense from divestitures

      (7 )       (515 )       (8 )       —           1   

Loss on early extinguishment of debt

      555         —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income before income taxes and losses in equity investments

    $ 1,761       $ 1,727       $ 1,526       $ 1,500       $ 1,586   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

We believe that the Adjusted Ratio is useful to investors as an indicator of our ability to meet our fixed obligations because it is independent of significant non-cash impacts and other items that management believes are not representative of our results. The Adjusted Ratio is a measurement not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and may not be comparable to similarly titled measures used by other companies. You should not rely on the Adjusted Ratio as a substitute for the ratio of earnings to fixed charges calculated and presented in accordance with GAAP or any other GAAP financial measure.

WASTE MANAGEMENT INC Reports