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Segment and Related Information
9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segment and Related Information

8.    Segment and Related Information

Our senior management evaluates, oversees and manages the financial performance of our Solid Waste subsidiaries through our 17 geographic 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 considered 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, and we concluded that 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 manages waste-to-energy facilities and independent power production plants, continues to be a separate reportable segment as it meets one of the quantitative disclosure thresholds. The operating segments not evaluated and overseen through the 17 Areas or Wheelabrator 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 three and nine months ended September 30 is shown in the following table (in millions):

 

     Gross
Operating
Revenues
     Intercompany
Operating
Revenues
     Net
Operating
Revenues
     Income
from
Operations
 

Three Months Ended:

           

September 30, 2013

           

Solid Waste:

           

Tier 1

   $ 898       $ (140    $ 758       $ 224   

Tier 2

     1,670         (311      1,359         347   

Tier 3

     940         (157      783         148   

Wheelabrator

     214         (29      185         39   

Other

     561         (25      536         (31
  

 

 

    

 

 

    

 

 

    

 

 

 
     4,283         (662      3,621         727   

Corporate and Other

                             (150
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4,283       $ (662    $ 3,621       $ 577   
  

 

 

    

 

 

    

 

 

    

 

 

 

September 30, 2012

           

Solid Waste:

           

Tier 1

   $ 854       $ (138    $ 716       $ 213   

Tier 2

     1,596         (290      1,306         328   

Tier 3

     862         (137      725         126   

Wheelabrator

     218         (30      188         46   

Other

     553         (27      526         (68
  

 

 

    

 

 

    

 

 

    

 

 

 
     4,083         (622      3,461         645   

Corporate and Other

                             (145
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4,083       $ (622    $ 3,461       $ 500   
  

 

 

    

 

 

    

 

 

    

 

 

 

Nine Months Ended:

           

September 30, 2013

           

Solid Waste:

           

Tier 1

   $ 2,632       $ (417    $ 2,215       $ 652   

Tier 2

     4,827         (899      3,928         970   

Tier 3

     2,637         (424      2,213         388   

Wheelabrator

     634         (83      551         52   

Other

     1,649         (73      1,576         (99
  

 

 

    

 

 

    

 

 

    

 

 

 
     12,379         (1,896      10,483         1,963   

Corporate and Other

                             (474
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 12,379       $ (1,896    $ 10,483       $ 1,489   
  

 

 

    

 

 

    

 

 

    

 

 

 

September 30, 2012

           

Solid Waste:

           

Tier 1

   $ 2,531       $ (386    $ 2,145       $ 641   

Tier 2

     4,698         (805      3,893         946   

Tier 3

     2,523         (381      2,142         370   

Wheelabrator

     631         (92      539         68   

Other

     1,565         (69      1,496         (167
  

 

 

    

 

 

    

 

 

    

 

 

 
     11,948         (1,733      10,215         1,858   

Corporate and Other

                             (491
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 11,948       $ (1,733    $ 10,215       $ 1,367   
  

 

 

    

 

 

    

 

 

    

 

 

 

Fluctuations in our operating results may be caused by many factors, including period-to-period changes in the relative contribution of revenue by each line of business, changes in commodity prices and by general economic conditions. In addition, our revenues and income from operations typically reflect seasonal patterns. Our operating revenues tend to be somewhat higher in the summer months, primarily due to the higher volume of construction and demolition waste. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.

Additionally, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern U.S., can actually increase our revenues in the areas affected. While weather-related and other “one-time” occurrences can boost revenues through additional work for a limited time span, as a result of significant start-up costs and other factors, such revenue sometimes generates earnings at comparatively lower margins. Certain weather conditions, including severe winter storms, may result in the temporary suspension of our operations, which can significantly affect the operating results of the affected regions. The operating results of our first quarter also often reflect higher repair and maintenance expenses because we rely on the slower winter months, when waste flows are generally lower, to perform scheduled maintenance at our waste-to-energy facilities.