Segment Reporting

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

SEGMENT REPORTING

8. SEGMENT REPORTING

The Company’s revenues are derived from one industry segment, which includes the collection, transfer, recycling and disposal of non-hazardous solid waste. No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

The Company manages its operations through three geographic operating segments, which are also the Company’s reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. In April 2011, as a result of the County Waste acquisition described in Note 6, the Company realigned its reporting structure and changed its three geographic operating segments from Western, Central and Southern to Western, Central and Eastern. As part of this realignment, the states of Arizona, Louisiana, New Mexico and Texas, which were previously part of the Southern region, are now included in the Central region. Also as part of this realignment, the state of Michigan, which was previously part of the Central region, is now included in the Eastern region (previously referred to as the Southern region). Additionally, the states of New York and Massachusetts, which the Company now operates in as a result of the County Waste acquisition, are included in the Eastern region. The segment information presented herein reflects the realignment of these districts. Under the current orientation, the Company’s Western Region is comprised of operating locations in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central Region is comprised of operating locations in Arizona, Colorado, Kansas, Louisiana, Minnesota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Utah and eastern Wyoming; and the Company’s Eastern Region is comprised of operating locations in Alabama, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Mississippi, New York, North Carolina, South Carolina and Tennessee.

The Company’s Chief Operating Decision Maker (“CODM”) evaluates operating segment profitability and determines resource allocations based on operating income before depreciation, amortization and gain (loss) on disposal of assets. Operating income before depreciation, amortization and gain (loss) on disposal of assets is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. The Company’s management uses operating income before depreciation, amortization and gain (loss) on disposal of assets in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments. A reconciliation of operating income before depreciation, amortization and gain (loss) on disposal of assets to income before income tax provision is included at the end of this Note 8.

Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2012 and 2011, is shown in the following tables:

Three Months Ended March 31, 2012	Gross Revenues		Intercompany Revenues(b)			Net Revenues		Operating Income Before Depreciation, Amortization and Gain (Loss) on Disposal of Assets(c)
Western	$	204,681	$	(24,021	)	$	180,660	$	53,802
Central		119,817		(13,084	)		106,733		37,382
Eastern		107,158		(18,121	)		89,037		24,534
Corporate (a)		—		—			—		(7,143	)
	$	431,656	$	(55,226	)	$	376,430	$	108,575

Three Months Ended March 31, 2011	Gross Revenues		Intercompany Revenues(b)			Net Revenues		Operating Income Before Depreciation, Amortization and Gain (Loss) on Disposal of Assets(c)
Western	$	197,466	$	(22,901	)	$	174,565	$	54,453
Central		111,959		(11,562	)		100,397		35,424
Eastern		69,716		(13,210	)		56,506		16,964
Corporate (a)		—		—			—		(1,277	)
	$	379,141	$	(47,673	)	$	331,468	$	105,564

(a) Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions.

(b) Intercompany 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.

(c) For those items included in the determination of operating income before depreciation, amortization and gain (loss) on disposal of assets, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

The following tables show changes in goodwill during the three months ended March 31, 2012 and 2011, by reportable segment:

	Western		Central			Eastern		Total
Balance as of December 31, 2011	$	313,038	$	424,223		$	379,627	$	1,116,888
Goodwill acquired		56,747		2,867			23		59,637
Goodwill divested		—		(496	)		—		(496	)
Balance as of March 31, 2012	$	369,785	$	426,594		$	379,650	$	1,176,029

	Western		Central		Eastern		Total
Balance as of December 31, 2010	$	313,038	$	305,774	$	309,040	$	927,852
Goodwill acquired		—		576		204		780
Goodwill divested		—		—		—		—
Balance as of March 31, 2011	$	313,038	$	306,350	$	309,244	$	928,632

The Company has no accumulated impairment losses associated with goodwill.

A reconciliation of the Company’s primary measure of segment profitability (operating income before depreciation, amortization and gain (loss) on disposal of assets for reportable segments) to Income before income tax provision in the Condensed Consolidated Statements of Net Income is as follows:

	Three months ended March 31,
	2012			2011
Operating income before depreciation, amortization and gain (loss) on disposal of assets	$	108,575		$	105,564
Depreciation		(37,173	)		(33,037	)
Amortization of intangibles		(5,631	)		(3,977	)
Gain (loss) on disposal of assets		(715	)		25
Interest expense		(12,285	)		(8,833	)
Interest income		133			134
Other income, net		686			394
Income before income tax provision	$	53,590		$	60,270

The following table shows, for the periods indicated, the Company’s total reported revenues by service line and with intercompany eliminations:

	Three months ended March 31,
	2012			2011
Collection	$	277,088		$	239,437
Disposal and transfer		121,995			109,560
Intermodal, recycling and other		32,573			30,144
		431,656			379,141
Less: intercompany elimination		(55,226	)		(47,673	)
Total revenues	$	376,430		$	331,468