Waste Management 2011 Annual Report Download - page 129

continue to refurbish the facility; and (iii) additional expenses recognized during 2011 for litigation reserves
and associated compliance costs. A portion of the expenses for litigation reserves and associated costs were
initially recognized in “Other” during the fourth quarter of 2010. The impact of these unfavorable items was
partially offset by the efforts to control costs across each of our facilities.
The decrease in the Group’s 2010 income from operations as compared with 2009 was driven by an
increase in maintenance-related outages as compared with the prior year, which resulted in decreased
electricity generation and increased plant maintenance costs. These increases were attributable to the
acceleration of repair and maintenance expenses at our facility in Portsmouth, Virginia that we acquired in
April 2010, and expenses at certain of our other facilities. The Group also experienced an increase in
litigation settlement costs as compared with 2009. These unfavorable items were partially offset by the
benefit of increased revenues from the sale of metals.
Significant items affecting the comparability of the remaining components of our results of operations for
the years ended December 31, 2011, 2010 and 2009 are summarized below:
Other — Our “Other” income from operations include (i) the effects of those elements of our in-plant
services, landfill gas-to-energy operations, and third-party subcontract and administration revenues managed by
our Sustainability Services, Renewable Energy and Strategic Accounts organizations, including Oakleaf,
respectively, that are not included with the operations of our reportable segments; (ii) our recycling brokerage and
electronic recycling services; and (iii) the impacts of investments that we are making in expanded service
offerings, such as portable self-storage and fluorescent lamp recycling, and in oil and gas producing properties. In
addition, our “Other” income from operations reflects the impacts of (i) non-operating entities that provide
financial assurance and self-insurance support for the Groups or financing for our Canadian operations; and
(ii) certain year-end adjustments recorded in consolidation related to the reportable segments that were not
included in the measure of segment profit or loss used to assess their performance for the periods disclosed.
Significant items affecting the comparability of income from operations for the periods presented
include (i) the reversal in 2011 of adjustments initially recorded in consolidation in the fourth quarter of
2010 related to our reportable segments, which are now included in the measure of segment income from
operations in 2011 and (ii) losses from our growth initiatives. The adjustments recorded in consolidation
were primarily related to $15 million of additional expense for litigation reserves and associated costs in our
Southern and Wheelabrator Groups. The losses from our growth initiatives are expected to drive year-over-
year improvements in future periods.
Corporate and Other — Significant items affecting the comparability of expenses for the periods
presented include:
‰a benefit in 2010 of $77 million resulting from a litigation settlement that occurred in April 2010
and $51 million in charges recognized during 2009 for the abandonment of licensed software associated
with the revenue management software implementation that was suspended in 2007 and abandoned in 2009;
‰increases in “Selling, general and administrative” expenses for the periods presented as a result of cost
increases attributable to (i) consulting fees primarily associated with our new cost savings programs
focusing on procurement, operational efficiency and back office efficiency and (ii) additional
compensation expense due to annual salary and wage increases, headcount increases to support the
Company’s strategic growth plans, and an increase in costs attributable to our equity compensation. Also
affecting the comparison during the periods presented is increased compensation expense during 2011
due to transfers of certain field sales organization employees to the Corporate sales organization and a
favorable litigation settlement that occurred in 2010;
‰the recognition of a $9 million favorable adjustment during 2011 and net charges of $50 million during
2010 for estimates associated with environmental remediation liabilities at certain of our closed sites;
‰changes in U.S. Treasury rates used to estimate the present value of our environmental remediation
obligations and recovery assets. As a result of changes in U.S. Treasury rates, we recognized $17 million
of unfavorable adjustments during 2011 and $2 million of unfavorable adjustments during 2010,
compared with $35 million of favorable adjustments during 2009;
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