Waste Management 2008 Annual Report Download - page 71
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Please find page 71 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.Other — In 2006, we recognized a $26 million charge for the impact of an arbitration ruling against us related
to the termination of a joint venture relationship in 2000.
Income From Operations by Reportable Segment
The following table summarizes income from operations by reportable segment for the years ended December
31 (dollars in millions):
2008
Period-to-
Period Change 2007
Period-to-
Period Change 2006
Operating segments:
Eastern ............................ $ 501 $(19) (3.7)% $ 520 $131 33.7% $ 389
Midwest............................ 463 (39) (7.8) 502 47 10.3 455
Southern ........................... 863 47 5.8 816 12 1.5 804
Western ............................ 601 (3) (0.5) 604 (16) (2.6) 620
Wheelabrator ........................ 323 31 10.6 292 (23) (7.3) 315
WMRA............................ 52 (26) (33.3) 78 64 * 14
Other................................ (58) (18) 45.0 (40) (17) * (23)
Corporate and other ..................... (511) 7 (1.4) (518) 27 (5.0) (545)
Total ................................ $2,234 $(20) (0.9)% $2,254 $225 11.1% $2,029
* Percentage change does not provide a meaningful comparison.
Operating segments — The most significant items affecting the results of operations of our geographic
operating segments during the three-year period ended December 31, 2008, are (i) increased revenue from yield on
base business as a result of our pricing strategies, particularly in our collection operations; (ii) declines in revenues
due to lower volumes, which can be attributed to pricing competition, the significant downturn in construction and
the slowdown of the general economy; and (iii) our continued focus on controlling costs through operating
efficiencies. For the first nine months of 2008, our Groups also experienced an unfavorable effect on operating
income of significantly higher fuel costs. However, during the fourth quarter of 2008, fuel costs decreased
significantly enough to reverse this trend, resulting in an immaterial impact to the full year. See additional
discussion in the Operating Revenues section above.
Summarized below are the other significant items specific to each operating segment’s results of operations for
the years ended December 31, 2008, 2007 and 2006:
Eastern — The Group’s operating income for the year ended December 31, 2008 was negatively affected
by a $14 million charge related to the withdrawal of certain collective bargaining units from underfunded
multi-employer pension plans. This charge was offset, in part, by a reduction in landfill amortization expense
as a result of changes in certain estimates related to our final capping, closure and post-closure obligations. The
Group’s operating income for the year ended December 31, 2007 was favorably affected by (i) net divestiture
gains of $33 million; (ii) an $18 million decrease in disposal fees and taxes due to the favorable resolution of a
disposal tax matter; and (iii) a reduction in landfill amortization expense as a result of changes in certain
estimates related to our final capping, closure and post-closure obligations. The Group’s operating income for
the year ended December 31, 2006 was negatively affected by $26 million in impairment charges associated
with (i) businesses being sold as part of our divestiture program; and (ii) a change in our expectations for future
operations of a landfill. In 2006, the Group also incurred $14 million of strike-related costs incurred primarily
in the New York City area.
Midwest — The Group’s 2008 operating results were negatively affected by $44 million of additional
operating expenses primarily incurred as a result of a labor dispute in Milwaukee, Wisconsin. Included in the
labor dispute expenses is a $32 million charge related to the withdrawal of certain of the Group’s bargaining
units from underfunded multi-employer pension plans. In addition, the Group experienced unfavorable
weather conditions in the first quarter of 2008. Positively affecting operating results both in 2008 and in 2007
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