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.

Consistent with prior years, we have analyzed the Areas’ income from operations margin for purposes of segment reporting and have realigned our Solid Waste tiers to reflect recent changes in their relative economic characteristics and prospects. These changes are the results of various factors including acquisitions, divestments, business mix and the economic climate of various geographies. Reclassifications have been made to our prior period consolidated financial information in order to conform to the current year presentation.

Tier 1 is now comprised of our operations across the Southern United States, with the exception of Southern California and the Florida peninsula and also includes the New England states, the tri-state area of Michigan, Indiana and Ohio and Western Canada. Tier 2 includes Southern California, Eastern Canada, Wisconsin, Minnesota and a portion of the lower Mid-Atlantic region of the United States. Tier 3 encompasses all the remaining operations including the Pacific Northwest and Northern California, the majority of the Mid-Atlantic region of the United States, the Florida peninsula, Illinois and Missouri.

Our Wheelabrator business, which managed waste-to-energy facilities and independent power production plants, was a separate reportable segment until the sale of the business in 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)
2015
Solid Waste:
Tier 1	$	5,083	$	(856	)	$	4,227	$	1,290		$	428	$	382	$	6,098
Tier 2		3,304		(613	)		2,691		629			280		251		5,394
Tier 3		4,898		(813	)		4,085		808			379		412		5,930
Wheelabrator		—		—			—		—			—		—		—
Other(a)		2,065		(107	)		1,958		(160	)		94		128		1,701

		15,350		(2,389	)		12,961		2,567			1,181		1,173		19,123
Corporate and Other(b)		—		—			—		(522	)		64		56		1,835

Total	$	15,350	$	(2,389	)	$	12,961	$	2,045		$	1,245	$	1,229	$	20,958

2014
Solid Waste:
Tier 1	$	5,117	$	(834	)	$	4,283	$	1,301		$	408	$	388	$	6,150
Tier 2		3,516		(663	)		2,853		711			287		223		5,648
Tier 3		4,816		(786	)		4,030		787			361		351		5,449
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		2,850

Total	$	16,457	$	(2,461	)	$	13,996	$	2,299		$	1,292	$	1,181	$	21,888

2013
Solid Waste:
Tier 1	$	5,130	$	(871	)	$	4,259	$	1,246		$	418	$	367	$	6,180
Tier 2		3,479		(650	)		2,829		454			284		267		5,850
Tier 3		4,868		(803	)		4,065		734			376		367		5,512
Wheelabrator		845		(112	)		733		(517	)		61		17		2,037
Other(a)		2,185		(88	)		2,097		(171	)		122		126		2,177

		16,507		(2,524	)		13,983		1,746			1,261		1,144		21,756
Corporate and Other(b)		—		—			—		(667	)		72		123		1,346

Total	$	16,507	$	(2,524	)	$	13,983	$	1,079		$	1,333	$	1,267	$	23,102

(a)

Our “Other” net operating revenues and “Other” income from operations include (i) the effects of those elements of our landfill gas-to-energy operations and third-party subcontract and administration revenues managed by our Energy and Environmental Services and Renewable Energy organizations, that are not included with the operations of our reportable segments; (ii) our recycling brokerage services and (iii) the impacts of investments in expanded service offerings, such as portable self-storage, long distance moving services, fluorescent lamp recycling and oil and gas producing properties. In addition, our “Other” income from operations reflects the impacts of non-operating entities that provide financial assurance and self-insurance support for the segments or financing for our Canadian operations.

(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

The mix of operating revenues from our major lines of business is reflected in the table below (in millions):


	Years Ended December 31,
	2015			2014			2013
Collection:
Commercial	$	3,332		$	3,393		$	3,423
Residential		2,499			2,543			2,608
Industrial		2,252			2,231			2,209
Other		356			340			273

Total collection		8,439			8,507			8,513
Landfill		2,919			2,849			2,790
Transfer		1,377			1,353			1,329
Wheelabrator		—			817			845
Recycling		1,163			1,370			1,447
Other(a)		1,452			1,561			1,583
Intercompany(b)		(2,389	)		(2,461	)		(2,524	)

Total	$	12,961		$	13,996		$	13,983

(a)	The “Other” line of business includes Strategic Business Solutions, landfill gas-to-energy operations, Port-O-Let^® services, portable self-storage, long distance moving services, fluorescent lamp recycling, and oil and gas producing properties.

(b)	Intercompany revenues between lines of business are eliminated within the Consolidated Financial Statements included herein.

Net operating revenues relating to operations in the United States and Puerto Rico, as well as Canada are as follows (in millions):


	Years Ended December 31,
	2015		2014		2013
United States and Puerto Rico(a)	$	12,196	$	13,064	$	13,054
Canada		765		932		929

Total	$	12,961	$	13,996	$	13,983

(a)	We sold our Puerto Rico operations in 2014. Refer to Note 19 for additional information.

Property and equipment (net) relating to operations in the United States and Puerto Rico, as well as Canada are as follows (in millions):


	December 31,
	2015		2014		2013
United States and Puerto Rico(a)	$	9,778	$	9,586	$	11,198
Canada		887		1,071		1,146

Total	$	10,665	$	10,657	$	12,344

(a)	We sold our Puerto Rico operations in 2014. Refer to Note 19 for additional information.