Waste Management 2015 Annual Report Download - page 111

The following table summarizes the major components of our selling, general and administrative expenses
for the years ended December 31 (dollars in millions):
2015
Period-to-
Period
Change 2014
Period-to-
Period
Change 2013
Labor and related benefits ................... $ 874 $ (59) (6.3)% $ 933 $ 2 0.2% $ 931
Professional fees ........................... 112 (14) (11.1) 126 (5) (3.8) 131
Provision for bad debts ...................... 36 (5) (12.2) 41 — — 41
Other .................................... 321 (60) (15.7) 381 16 4.4 365
$1,343 $(138) (9.3)% $1,481 $ 13 0.9% $1,468
Our 2014 divestitures, primarily the sale of our Wheelabrator business in December 2014, favorably
affected all cost categories when comparing expenses in 2015 to 2014. In addition to the impact of divestitures,
other significant items by category of expense include:
Labor and related benefits — Factors affecting the year-over-year changes in our labor and related benefits
costs include:
• Cost savings from our August 2014 reorganization, which favorably affected both periods presented;
• Lower incentive compensation costs in 2015 as compared to both 2014 and 2013; and
• Merit increases in both 2015 and 2014.
Other — Changes in our other expenses are a result of higher litigation settlement costs in 2014 and our
continued focus on controlling costs.
Depreciation and Amortization
Depreciation and amortization includes (i) depreciation of property and equipment, including assets
recorded for capital leases, on a straight-line basis from three to 40 years; (ii) amortization of landfill costs,
including those incurred and all estimated future costs for landfill development, construction and asset retirement
costs arising from closure and post-closure, on a units-of-consumption method as landfill airspace is consumed
over the total estimated remaining capacity of a site, which includes both permitted capacity and expansion
capacity that meets our Company-specific criteria for amortization purposes; (iii) amortization of landfill asset
retirement costs arising from final capping obligations on a units-of-consumption method as airspace is
consumed over the estimated capacity associated with each final capping event and (iv) amortization of
intangible assets with a definite life, using either a 150% declining balance approach or a straight-line basis over
the definitive terms of the related agreements, which are generally from two to 15 years depending on the type of
asset.
The following table summarizes the components of our depreciation and amortization expenses for the years
ended December 31 (dollars in millions):
2015
Period-to-
Period
Change 2014
Period-to-
Period
Change 2013
Depreciation of tangible property and equipment . . . $ 760 $(74) (8.9)% $ 834 $(19) (2.2)% $ 853
Amortization of landfill airspace ................ 409 29 7.6 380 (20) (5.0) 400
Amortization of intangible assets ................ 76 (2) (2.6) 78 (2) (2.5) 80
$1,245 $(47) (3.6)% $1,292 $(41) (3.1)% $1,333
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