Waste Management 2008 Annual Report Download - page 70
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Please find page 70 of the 2008 Waste Management annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.changes in estimates. In each year, the majority of the reduced expense resulting from the revised estimates was
associated with final capping changes that were generally the result of (i) concerted efforts to improve the operating
efficiencies of our landfills and volume declines, both of which have allowed us to delay spending for final capping
activities; (ii) landfill expansions that resulted in reduced or deferred final capping costs; or (iii) completed final
capping construction that cost less than anticipated.
Restructuring
Management continuously reviews our organization to determine if we are operating under the most
advantageous structure. As discussed in Note 24 to the Consolidated Financial Statements, in February 2009
we announced that we were taking steps to streamline our organization by consolidating many of our Market Areas
and realigning our Corporate support organization. In 2008, we recognized $2 million of restructuring expenses for
the reorganization of customer service functions in our Western Group and the realignment of certain operations in
our Southern Group. In the first quarter of 2007, we restructured certain operations and functions, resulting in the
recognition of a charge of approximately $9 million. We incurred an additional $1 million of costs for this
restructuring during the second quarter of 2007, increasing total costs incurred to $10 million. Approximately
$7 million of the 2007 restructuring costs was incurred by our Corporate organization, $2 million was incurred by
our Midwest Group and $1 million was incurred by our Western Group. These charges included approximately
$8 million for employee severance and benefit costs and approximately $2 million related to operating lease
agreements.
The most significant cost savings we have obtained through these restructurings have been attributable to the
labor and related benefits component of our “Selling, general and administrative” expenses.
(Income) Expense from Divestitures, Asset Impairments and Unusual Items
The following table summarizes the major components of “(Income) expense from divestitures, asset
impairments and unusual items” for the year ended December 31 for the respective periods (in millions):
2008 2007 2006
Years Ended
December 31,
(Income) expense from divestitures (including held-for-sale impairments) .... $(33) $(59) $(26)
Impairments of assets held-for-use ................................. 4 12 24
Other ...................................................... — — 27
$(29) $(47) $ 25
(Income) expense from divestitures (including held-for-sale impairments) — The net gains from divestitures in
all three years were a result of our fix-or-seek-exit initiative. In 2008, these gains were primarily related to the
divestiture of underperforming collection operations in our Southern Group; in 2007, the gains were related to the
divestiture of underperforming collection, transfer and recycling operations in our Eastern, Western, Southern and
WMRA Groups; and in 2006, the gains were primarily related to the divestiture of underperforming collection
operations in our Western Group. Gains recognized from divestitures in 2006 were partially offset by the
recognition of aggregate impairment charges of $18 million, which were principally recognized by our Eastern
Group, for business operations held for sale as required by SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets.
Impairments of assets held-for-use — During 2008, we recognized a $4 million impairment charge primarily
as a result of a decision to close a landfill in our Southern Group. During 2007, we recognized $12 million in
impairment charges due to impairments recognized for two landfills in our Southern Group. The impairments were
necessary as a result of the re-evaluation of our business alternatives for one landfill and the expiration of a contract
that we had expected would be renewed that had significantly contributed to the volumes for the second landfill. The
$24 million of impairment charges recognized during 2006 was primarily related to the impairment of a landfill in
our Eastern Group as a result of a change in our expectations for future expansions and the impairment of under-
performing operations in our WMRA Group.
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