Waste Management 2015 Annual Report Download - page 197

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(b) Corporate operating results reflect the costs incurred for various support services that are not allocated to
our reportable segments. These support services include, among other things, treasury, legal, information
technology, tax, insurance, centralized service center processes, other administrative functions and the
maintenance of our closed landfills. Income from operations for “Corporate and other” also includes costs
associated with our long-term incentive program and any administrative expenses or revisions to our
estimated obligations associated with divested operations.
(c) Intercompany operating revenues reflect each segment’s total intercompany sales, including intercompany
sales within a segment and between segments. Transactions within and between segments are generally
made on a basis intended to reflect the market value of the service.
(d) For those items included in the determination of income from operations, the accounting policies of the
segments are the same as those described in Note 3.
(e) The income from operations provided by our Solid Waste business is generally indicative of the margins
provided by our collection, landfill, transfer and recycling businesses. From time to time the operating
results of our reportable segments are significantly affected by certain transactions or events that
management believes are not indicative or representative of our results. In 2014, we recognized a $519
million gain on the sale of our Wheelabrator business. In 2013, we recognized $981 million of impairment
charges, the most significant of which impacted our Tier 2 and Wheelabrator segments by $253 million and
$627 million, respectively. Refer to Note 12 and Note 13 for an explanation of certain other transactions and
events affecting our operating results.
(f) Includes non-cash items. Capital expenditures are reported in our reportable segments at the time they are
recorded within the segments’ property, plant and equipment balances and, therefore, may include amounts
that have been accrued but not yet paid.
(g) The reconciliation of total assets reported above to “Total assets” in the Consolidated Balance Sheet is as
follows (in millions):
December 31,
2015 2014 2013
Total assets, as reported above ......................... $20,958 $21,888 $23,102
Elimination of intercompany investments and advances ..... (539) (591) (612)
Total assets, per Consolidated Balance Sheet .............. $20,419 $21,297 $22,490
(h) Goodwill is included within each segment’s total assets. For segment reporting purposes, our material recovery
facilities are included as a component of their respective Areas and our recycling brokerage business is included
as part of our “Other” operations. As discussed in Note 19, the goodwill associated with our acquisition of
Deffenbaugh has been assigned to our Areas, primarily in Tier 3 and to a lesser extent Tier 1. The following table
presents changes in goodwill during 2014 and 2015 by reportable segment (in millions):
Solid Waste
Tier 1 Tier 2 Tier 3 Wheelabrator Other Total
Balance, December 31, 2013 ................... $2,183 $1,814 $1,653 $ 305 $115 $6,070
Acquired goodwill ........................... 4 16 11 — — 31
Divested goodwill, net of assets held-for-sale ...... — (1) (2) (305) — (308)
Impairments ................................ — — — — (10) (10)
Translation and other adjustments ............... (9) (34) — — — (43)
Balance, December 31, 2014 ................... $2,178 $1,795 $1,662 $ — $105 $5,740
Acquired goodwill ........................... 27 42 151 — 105 325
Divested goodwill, net of assets held-for-sale ...... — (6) (1) — — (7)
Translation and other adjustments ............... (15) (59) — — — (74)
Balance, December 31, 2015 ................... $2,190 $1,772 $1,812 $ — $210 $5,984
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