Waste Management 2014 Annual Report Download - page 214

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As the party with primary responsibility to fund the related final capping, closure, post-closure or
environmental remediation activities, we are exposed to risk of loss as a result of potential changes in the fair
value of the assets of the trust. The fair value of trust assets can fluctuate due to (i) changes in the market value of
the investments held by the trusts and (ii) credit risk associated with trust receivables. Although we are exposed
to changes in the fair value of the trust assets, we currently expect the trust funds to continue to meet the statutory
requirements for which they were established.
21. Segment and Related Information
We evaluate, oversee and manage the financial performance of our Solid Waste subsidiaries through our 17
Areas. The 17 Areas constitute our operating segments and none of the Areas individually meet the quantitative criteria
to be a separate reportable segment. We have evaluated the aggregation criteria and concluded that, based on the
similarities between our Areas, including the fact that our Solid Waste business is homogenous across geography with
the same services offered across the Areas, aggregation of our Areas is appropriate for purposes of presenting our
reportable segments. Accordingly, we have aggregated our 17 Areas into three tiers that we believe have similar
economic characteristics and future prospects based in large part on a review of the Areas’ income from operations
margins. The economic variations experienced by our Areas is attributable to a variety of factors, including regulatory
environment of the Area; economic environment of the Area, including level of commercial and industrial activity;
population density; service offering mix and disposal logistics, with no one factor being singularly determinative of an
Area’s current or future economic performance. As a result of our consideration of economic and other similarities, we
have established the following three reportable segments for our Solid Waste business: Tier 1, which is comprised
almost exclusively of Areas in the Southern United States; Tier 2, which is comprised predominately of Areas located
in the Midwest and Northeast United States; and Tier 3, which encompasses all remaining Areas, including the
Northwest and Mid-Atlantic regions of the United States and Eastern Canada.
Our Wheelabrator business, which managed waste-to-energy facilities and independent power production
plants, continued to be a separate reportable segment until the sale of the business in the fourth quarter of 2014 as
it met the quantitative disclosure thresholds.
The operating segments not evaluated and overseen through the 17 Areas are presented herein as “Other” as
these operating segments do not meet the criteria to be aggregated with other operating segments and do not meet
the quantitative criteria to be separately reported.
Summarized financial information concerning our reportable segments for the respective years ended
December 31 is shown in the following table (in millions):
Gross
Operating
Revenues
Intercompany
Operating
Revenues(c)
Net
Operating
Revenues
Income
from
Operations
(d),(e)
Depreciation
and
Amortization
Capital
Expenditures
(f)
Total
Assets
(g),(h)
2014
Solid Waste:
Tier 1 ............... $ 3,495 $ (537) $ 2,958 $ 893 $ 271 $ 266 $ 3,661
Tier 2 ............... 6,416 (1,173) 5,243 1,318 510 428 8,556
Tier 3 ............... 3,538 (573) 2,965 588 275 268 5,030
Wheelabrator ............ 817 (102) 715 669 37 11 —
Other(a) ................. 2,191 (76) 2,115 (400) 128 134 1,791
16,457 (2,461) 13,996 3,068 1,221 1,107 19,038
Corporate and Other(b) ..... — — — (769) 71 74 2,965
Total ................... $16,457 $(2,461) $13,996 $2,299 $1,292 $1,181 $22,003
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