Waste Management 2013 Annual Report Download - page 146

Income from Operations
The following table summarizes income from operations for the years ended December 31 (dollars in
millions):
2013
Period-to-
Period
Change 2012
Period-to-
Period
Change 2011
Solid Waste:
Tier 1 .............................. $ 852 $ 1 0.1% $ 851 $ (8) (0.9)% $ 859
Tier 2 .............................. 1,291 21 1.7 1,270 33 2.7 1,237
Tier 3 .............................. 291 (213) (42.3) 504 (8) (1.6) 512
Solid Waste ....................... 2,434 (191) (7.3) 2,625 17 0.7 2,608
Wheelabrator .......................... (517) (630) * 113 (59) (34.3) 172
Other ................................ (171) 71 (29.3) (242) (78) 47.6 (164)
Corporate and other ..................... (667) (22) 3.4 (645) (57) 9.7 (588)
Total ............................. $1,079 $(772) (41.7)% $1,851 $(177) (8.7)% $2,028
*Percentage change does not provide a meaningful comparison.
Items affecting the comparability of our results of operations during 2013 and 2012 include (i) restructuring
charges recognized in 2012 associated with our July 2012 restructuring; (ii) subsequent benefits realized as a
result of our July 2012 restructuring and ongoing cost containment efforts; (iii) increased labor costs due to merit
increases effective in 2013 and 2011 and (iv) lower 2012 year-over-year incentive compensation payouts. Also
affecting comparability, excluding Wheelabrator, was the reclassification of employees to Solid Waste from
Other and Corporate and Other.
Solid Waste — Our Solid Waste business income from operations declined $191 million when comparing
2013 with 2012, principally as a result of $279 million of net charges primarily related to impairments
recognized in 2013. The most significant impairment charges were in our Eastern Canada Area, which is
included in Tier 3, and were associated with the impairment of certain landfills as discussed above in (Income)
Expense from Divestitures, Asset Impairments (Other than Goodwill) and Unusual Items. Other significant items
affecting the results of operations of our Solid Waste business during the three years ended December 31, 2013
are summarized below:
‰Our base business benefited from (i) internal revenue growth, principally in our collection and disposal
business and (ii) increased fuel cost recovery in 2013. These favorable variances were offset, in part, by
net cost increases mainly driven by higher operating expenses including maintenance and repair and
transfer and disposal in 2012;
‰Results from our recycling business were lower compared to prior year periods due primarily to (i) lower
prices for commodities primarily affecting the 2012 period; (ii) higher processing costs driven in part by
increased outbound quality control in 2013 and (iii) operating losses related to the acquired operations of
Greenstar in 2013;
‰The accretive benefits of the RCI acquisition;
‰A decrease in bad debt expense during 2013 due primarily to the collection of receivables previously
reserved during 2012, principally in Puerto Rico, which is included in Tier 3;
‰A charge for the withdrawal from an underfunded multiemployer pension plan in New England in 2012,
which is included in Tier 2;
‰Incremental operating expenses due to a labor union dispute in the Pacific Northwest Area in 2012, which
is included in Tier 3; and
‰A charge associated with a litigation loss in Southern California in 2011, which is included in Tier 2.
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