7.	Segment and Related Information

We evaluate, oversee and manage the financial performance of our Solid Waste business 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 geographies 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 are 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.

Tier 1 is 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.

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 is shown in the following table (in millions):


	Gross Operating Revenues		Intercompany Operating Revenues			Net Operating Revenues		Income from Operations
Three Months Ended June 30:
2017
Solid Waste:
Tier 1	$	1,417	$	(258	)	$	1,159	$	395
Tier 2		916		(169	)		747		190
Tier 3		1,426		(256	)		1,170		248

Solid Waste		3,759		(683	)		3,076		833
Other		657		(56	)		601		(18	)

		4,416		(739	)		3,677		815
Corporate and Other		—		—			—		(142	)

Total	$	4,416	$	(739	)	$	3,677	$	673

2016
Solid Waste:
Tier 1	$	1,316	$	(229	)	$	1,087	$	362
Tier 2		856		(158	)		698		157
Tier 3		1,347		(233	)		1,114		235

Solid Waste		3,519		(620	)		2,899		754
Other		572		(46	)		526		(20	)

		4,091		(666	)		3,425		734
Corporate and Other		—		—			—		(123	)

Total	$	4,091	$	(666	)	$	3,425	$	611


	Gross Operating Revenues		Intercompany Operating Revenues			Net Operating Revenues		Income from Operations
Six Months Ended June 30:
2017
Solid Waste:
Tier 1	$	2,757	$	(496	)	$	2,261	$	761
Tier 2		1,758		(322	)		1,436		347
Tier 3		2,753		(489	)		2,264		475

Solid Waste		7,268		(1,307	)		5,961		1,583
Other		1,260		(104	)		1,156		(50	)

		8,528		(1,411	)		7,117		1,533
Corporate and Other		—		—			—		(302	)

Total	$	8,528	$	(1,411	)	$	7,117	$	1,231

2016
Solid Waste:
Tier 1	$	2,557	$	(441	)	$	2,116	$	696
Tier 2		1,637		(300	)		1,337		302
Tier 3		2,607		(445	)		2,162		443

Solid Waste		6,801		(1,186	)		5,615		1,441
Other		1,072		(86	)		986		(56	)

		7,873		(1,272	)		6,601		1,385
Corporate and Other		—		—			—		(266	)

Total	$	7,873	$	(1,272	)	$	6,601	$	1,119

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 general economic conditions. In addition, our revenues and income from operations typically reflect seasonal patterns. Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes. 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.

Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes resulting from climate change can significantly affect the operating results of the Areas affected. On the other hand, 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 United States, can increase our revenues in the Areas affected. While weather conditions and other event driven special projects can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.