Waste Management 2013 Annual Report Download - page 147

Wheelabrator — The decrease in income from operations of our Wheelabrator business for the year ended
December 31, 2013 as compared to 2012 was largely driven by (i) $627 million of pre-tax charges to impair
goodwill and certain waste-to-energy facilities as discussed above in Goodwill Impairments and (Income)
Expense from Divestitures, Asset Impairments (Other than Goodwill) and Unusual Items; (iii) higher labor costs
and (iv) a disposal surcharge at one of our waste-to-energy facilities. The impact of these unfavorable items was
offset, in part, by improved energy pricing and metal sales.
The decrease in income from operations in 2012 as compared to 2011 was largely driven by (i) lower
revenues due to the expiration of long-term contracts at certain of our waste-to-energy facilities; (ii) lower energy
pricing at our merchant facilities; (iii) increased maintenance and repair costs, primarily due to differences in the
timing and scope of planned maintenance activities and (iv) increased international development costs.
Other — Our “Other” income from operations includes (i) those elements of our in-plant services, landfill
gas-to-energy operations, and third-party subcontract and administration revenues managed by our Sustainability
Services and Renewable Energy organizations, that are not included with the operations of our reportable
segments; (ii) our recycling brokerage and electronic recycling services and (iii) the results 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 results of (i) non-
operating entities that provide financial assurance and self-insurance support for our Solid Waste business and
(ii) reclasses to include the costs of our former geographic Group offices that, prior to our 2012 restructuring,
were included in our operating segments.
Significant items affecting the comparability of expenses for the periods presented include:
‰Impairment charges recognized in 2013 and 2012 as discussed in Goodwill Impairments, Asset
Impairments,(Income) Expense from Divestitures, Asset Impairments (Other than Goodwill) and Unusual
Items, Equity in Net Losses of Unconsolidated Entities and Other, net;
‰Improved results from our organics and medical waste service businesses in 2013;
‰Losses in 2013 and 2012 from our efforts to integrate our strategic accounts business with Oakleaf,
including the loss of certain strategic accounts. However, in 2013, we have experienced year-over-year
improvements as a result of our system and process enhancements; and
‰A favorable adjustment to contingent consideration associated with the Greenstar acquisition, offset by
higher administrative and restructuring costs associated with the acquired operations.
Corporate and Other — Significant items affecting the comparability of expenses for the periods presented
include:
‰Lower year-over-year professional fees primarily due to higher consulting fees incurred during 2012 and
2011 in connection with the start-up phase of our cost savings programs;
‰Favorable adjustments in 2013 and unfavorable adjustments in both 2012 and 2011 related to changes in
U.S. Treasury rates used to discount the present value of our environmental remediation obligations and
recovery assets;
‰Favorable adjustments to our estimated environmental remediation obligations in 2013 and 2011; and
‰Higher year-over-year risk management expense in 2013 and 2012, primarily due to increased overall
costs associated with auto and general liability insurance.
Interest Expense
Our interest expense was $481 million in 2013, $488 million in 2012 and $481 million in 2011. During
2013, our debt balances increased by approximately $300 million, which can generally be attributed to the debt
financing of our acquisition of RCI offset by debt repayments. In spite of this increase in debt, we reduced our
interest costs by (i) reducing the interest rate periods of some of our tax-exempt bonds, allowing us to benefit
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