20. Quarterly Financial Data (Unaudited)

The following table summarizes the unaudited quarterly results of operations for 2017 and 2016 (in millions, except per share amounts):


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2017
Operating revenues	$	3,440	$	3,677	$	3,716	$	3,652
Income from operations		558		673		701		704
Consolidated net income		297		361		388		903
Net income attributable to Waste Management, Inc.		298		362		386		903
Basic earnings per common share		0.68		0.82		0.88		2.08
Diluted earnings per common share (a)		0.67		0.81		0.87		2.06

2016
Operating revenues	$	3,176	$	3,425	$	3,548	$	3,460
Income from operations		508		611		560		617
Consolidated net income		256		286		304		334
Net income attributable to Waste Management, Inc.		258		287		302		335
Basic earnings per common share		0.58		0.65		0.68		0.76
Diluted earnings per common share		0.58		0.64		0.68		0.75

(a)

As of January 1, 2017, we adopted ASU 2016‑09 prospectively and no longer include excess tax benefits as assumed proceeds in the calculation of diluted weighted shares outstanding. See Note 2 for further discussion.

Basic and diluted earnings per common share for each of the quarters presented above is based on the respective weighted average number of common and dilutive potential common shares outstanding for each quarter and the sum of the quarters may not necessarily be equal to the full year basic and diluted earnings per common share amounts.

Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends. Additionally, from time to time, our operating results are significantly affected by certain transactions or events that management believes are not indicative or representative of our results. The following items significantly impacted our operating results during the periods indicated:

First Quarter 2017

A reduction in our income tax expense of $32 million for excess tax benefits related to the vesting or exercise of equity-based compensation awards and a $25 million pre-tax charge to write down an equity method investment in a waste diversion technology company to its fair value. These items had a favorable impact of $0.01 on our diluted earnings per share.

Third Quarter 2017

The recognition of pre-tax charges including (i) an $11 million charge for the withdrawal from an underfunded Multiemployer Pension Plan and (ii) a $9 million charge to adjust our subsidiary’s estimated potential share of an environmental remediation liability and related costs for a closed site in Harris County, Texas. These charges had a negative impact of $0.03 on our diluted earnings per share.

Fourth Quarter 2017

An income tax benefit of $529 million related to enactment of the Act, consisting of a net tax benefit of $595 million related to the re-measurement of our deferred income tax assets and liabilities, partially offset by income tax expense of $66 million for a one-time, mandatory transition tax on the deemed repatriation of previously tax-deferred and unremitted foreign earnings. This net tax benefit had a favorable impact of $1.21 on our diluted earnings per share.

The recognition of net pre-tax gains of $26 million primarily related to (i) gains of $31 million from the sale of certain oil and gas producing properties and (ii) a gain of $30 million related to the reduction in post-closing, performance-based contingent consideration obligations associated with an acquired business in our EES organization; partially offset by goodwill impairment charges of $34 million, primarily related to our EES organization. These net gains had a favorable impact of $0.03 on our diluted earnings per share.

The recognition of pre-tax charges of $11 million related to the impairment of investments in waste diversion technology companies. These impairments were not deductible for income taxes and had a negative impact of $0.02 on our diluted earnings per share.

The recognition of a pre-tax loss of $6 million associated with the early extinguishment of $590 million of 6.1% senior notes ahead of their scheduled maturity date, which had a negative impact of $0.01 on our diluted earnings per share.

Second Quarter 2016

The recognition of pre-tax charges of $45 million, primarily related to the impairment of minority-owned investments in waste diversion technology companies. These impairments were substantially not deductible for income taxes and had a negative impact of $0.10 on our diluted earnings per share.

Third Quarter 2016

The recognition of pre-tax charges of $106 million consisting primarily of (i) a $43 million impairment due to a loss of expected volumes for a landfill; (ii) a $42 million charge to adjust our subsidiary’s estimated environmental remediation liability and related costs for a closed site in Harris County, Texas; (iii) a $10 million goodwill impairment charge related to our LampTracker® reporting unit and (iv) an $8 million loss on the sale of a majority-owned organics company. These charges had a negative impact of $0.16 on our diluted earnings per share.