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. 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 managed waste-to-energy facilities and independent power production plants, continued to be a separate reportable segment until the sale of the business in the fourth quarter of 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)
2014
Solid Waste:
Tier 1	$	3,495	$	(537	)	$	2,958	$	893		$	271	$	266	$	3,661
Tier 2		6,416		(1,173	)		5,243		1,318			510		428		8,556
Tier 3		3,538		(573	)		2,965		588			275		268		5,030
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		2,965

Total	$	16,457	$	(2,461	)	$	13,996	$	2,299		$	1,292	$	1,181	$	22,003

2013
Solid Waste:
Tier 1	$	3,487	$	(553	)	$	2,934	$	852		$	277	$	217	$	3,682
Tier 2		6,438		(1,202	)		5,236		1,291			522		526		8,572
Tier 3		3,552		(569	)		2,983		291			279		258		5,288
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		1,459

Total	$	16,507	$	(2,524	)	$	13,983	$	1,079		$	1,333	$	1,267	$	23,215

2012
Solid Waste:
Tier 1	$	3,370	$	(521	)	$	2,849	$	851		$	273	$	242	$	3,664
Tier 2		6,273		(1,096	)		5,177		1,270			512		511		8,394
Tier 3		3,413		(523	)		2,890		504			259		271		5,088
Wheelabrator		846		(123	)		723		113			69		36		2,605
Other(a)		2,106		(96	)		2,010		(242	)		111		239		2,495

		16,008		(2,359	)		13,649		2,496			1,224		1,299		22,246
Corporate and Other(b)		—		—			—		(645	)		73		139		1,551

Total	$	16,008	$	(2,359	)	$	13,649	$	1,851		$	1,297	$	1,438	$	23,797

(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 and electronic recycling services; and (iii) the impacts of investments in expanded service offerings, such as portable self-storage, 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 during the fourth quarter. In 2013, we recognized $981 million of impairment charges, the most significant of which impacted our Tier 3 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,
	2014			2013			2012
Total assets, as reported above	$	22,003		$	23,215		$	23,797
Elimination of intercompany investments and advances		(591	)		(612	)		(700	)

Total assets, per Consolidated Balance Sheet	$	21,412		$	22,603		$	23,097

(h)

Goodwill is included within each segment’s total assets. For segment reporting purposes, our material recovery facilities and secondary processing facilities are included as a component of their respective Areas and our recycling brokerage business and electronics recycling services are included as part of our “Other” operations. As discussed in Note 19, the goodwill associated with our acquisition of Greenstar, has been assigned to our Areas and to a lesser extent “Other”. Our acquisition of RCI has been assigned to our Eastern Canada Area, which is included in Tier 3. The following table presents changes in goodwill during 2013 and 2014 by reportable segment (in millions):


	Solid Waste
	Tier 1			Tier 2			Tier 3			Wheelabrator			Other			Total
Balance, December 31, 2012	$	1,186		$	2,828		$	1,374		$	788		$	115		$	6,291
Acquired goodwill		41			56			210			—			20			327
Divested goodwill, net of assets held-for-sale		(1	)		(2	)		(9	)		—			—			(12	)
Impairments		—			—			(10	)		(483	)		(16	)		(509	)
Translation and other adjustments		(5	)		—			(18	)		—			(4	)		(27	)

Balance, December 31, 2013	$	1,221		$	2,882		$	1,547		$	305		$	115		$	6,070
Acquired goodwill		4			13			14			—			—			31
Divested goodwill, net of assets held-for-sale		—			—			(3	)		(305	)		—			(308	)
Impairments		—			—			—			—			(10	)		(10	)
Translation and other adjustments		(9	)		—			(34	)		—			—			(43	)

Balance, December 31, 2014	$	1,216		$	2,895		$	1,524		$	—		$	105		$	5,740

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


	Years Ended December 31,
	2014			2013			2012
Commercial	$	3,393		$	3,423		$	3,417
Residential		2,543			2,608			2,584
Industrial		2,231			2,209			2,129
Other		340			273			275

Total collection		8,507			8,513			8,405
Landfill		2,849			2,790			2,685
Transfer		1,353			1,329			1,296
Wheelabrator		817			845			846
Recycling		1,370			1,447			1,360
Other(a)		1,561			1,583			1,416
Intercompany(b)		(2,461	)		(2,524	)		(2,359	)

Operating revenues	$	13,996		$	13,983		$	13,649

(a)	The “Other” line of business includes Strategic Business Solutions, landfill gas-to-energy operations, Port-O-Let^® services, portable self-storage, 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,
	2014		2013		2012
United States and Puerto Rico(a)	$	13,064	$	13,054	$	12,812
Canada		932		929		837

Total	$	13,996	$	13,983	$	13,649

(a)	We sold our Puerto Rico operations in the second quarter of 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,
	2014		2013		2012
United States and Puerto Rico(a)	$	9,586	$	11,198	$	11,293
Canada		1,071		1,146		1,358

Total	$	10,657	$	12,344	$	12,651

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