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Segment and Related Information | 12 Months Ended
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Dec. 31, 2020
Segment and Related Information |
Segment and Related Information | 20. 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 operating segments and 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. In 2019, as part of our annual review process, we analyzed the Areas’ income from operations margins for purposes of segment reporting and 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. As a result, we reclassified Western Canada from Tier 1 to Tier 2 and Northern California from Tier 3 to Tier 2. Reclassifications have been made to our prior period consolidated financial information to conform to the current year presentation. No realignment was necessary as part of our 2020 annual review process. The results from Advanced Disposal are included within our Tiers. Tier 1 is comprised of our operations across the Southern U.S., with the exception of the Southern California Area and the Florida Area, and also includes the New England Area and the tri-state Area of Michigan, Indiana and Ohio. Tier 2 includes California, Canada, and the Wisconsin and Minnesota Area. Tier 3 encompasses all the remaining operations including the Pacific Northwest, the Mid-Atlantic region of the U.S., the Florida Area, and the Illinois and Missouri Valley Area. 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 as of December 31 and for the year then ended is shown in the following table (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Income | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Gross | ​ | Intercompany | ​ | Net | ​ | from |  | Depreciation | ​ | Capital | ​ | Total
​ | ​ | Operating | ​ | Operating | ​ | Operating | ​ | Operations |  | and | ​ | Expenditures | ​ | Assets
​ |  | Revenues |  | Revenues(c) |  | Revenues |  | (d)(e) |  | Amortization |  | (f) |  | (g)(h)
Years Ended December 31: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2020 |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |
Solid Waste: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |
Tier 1 | ​ | $ | 6,052 | ​ | $ | (1,158) | ​ | $ | 4,894 | ​ | $ | 1,575 | ​ | $ | 603 | ​ | $ | 392 | ​ | $ | 9,527
Tier 2 | ​ |  | 3,827 | ​ |  | (815) | ​ |  | 3,012 | ​ |  | 849 | ​ |  | 347 | ​ |  | 287 | ​ |  | 6,244
Tier 3 | ​ |  | 6,235 | ​ |  | (1,187) | ​ |  | 5,048 | ​ |  | 1,071 | ​ |  | 589 | ​ |  | 323 | ​ |  | 10,004
Solid Waste | ​ |  | 16,114 | ​ |  | (3,160) | ​ |  | 12,954 | ​ |  | 3,495 | ​ |  | 1,539 | ​ |  | 1,002 | ​ |  | 25,775
Other (a) | ​ |  | 2,364 | ​ |  | (100) | ​ |  | 2,264 | ​ |  | (38) | ​ |  | 87 | ​ |  | 75 | ​ |  | 2,064
​ | ​ | ​ | 18,478 | ​ | ​ | (3,260) | ​ | ​ | 15,218 | ​ | ​ | 3,457 | ​ | ​ | 1,626 | ​ | ​ | 1,077 | ​ | ​ | 27,839
Corporate and Other (b) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (1,023) | ​ |  | 45 | ​ |  | 508 | ​ |  | 1,810
Total | ​ | $ | 18,478 | ​ | $ | (3,260) | ​ | $ | 15,218 | ​ | $ | 2,434 | ​ | $ | 1,671 | ​ | $ | 1,585 | ​ | $ | 29,649
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2019 | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Solid Waste: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Tier 1 | ​ | $ | 6,136 | ​ | $ | (1,141) | ​ | $ | 4,995 | ​ | $ | 1,719 | ​ | $ | 551 | ​ | $ | 508 | ​ | $ | 7,519
Tier 2 | ​ |  | 3,865 | ​ |  | (777) | ​ |  | 3,088 | ​ |  | 881 | ​ |  | 327 | ​ |  | 329 | ​ |  | 5,558
Tier 3 | ​ |  | 6,386 | ​ |  | (1,209) | ​ |  | 5,177 | ​ |  | 1,173 | ​ |  | 585 | ​ |  | 453 | ​ |  | 8,243
Solid Waste | ​ |  | 16,387 | ​ |  | (3,127) | ​ |  | 13,260 | ​ |  | 3,773 | ​ |  | 1,463 | ​ |  | 1,290 | ​ |  | 21,320
Other (a) | ​ |  | 2,317 | ​ |  | (122) | ​ |  | 2,195 | ​ |  | (161) | ​ |  | 75 | ​ |  | 118 | ​ |  | 1,648
​ | ​ |  | 18,704 | ​ |  | (3,249) | ​ |  | 15,455 | ​ |  | 3,612 | ​ |  | 1,538 | ​ |  | 1,408 | ​ |  | 22,968
Corporate and Other (b) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (906) | ​ |  | 36 | ​ |  | 407 | ​ |  | 5,042
Total | ​ | $ | 18,704 | ​ | $ | (3,249) | ​ | $ | 15,455 | ​ | $ | 2,706 | ​ | $ | 1,574 | ​ | $ | 1,815 | ​ | $ | 28,010
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2018 | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Solid Waste: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Tier 1 | ​ | $ | 5,730 | ​ | $ | (1,045) | ​ | $ | 4,685 | ​ | $ | 1,655 | ​ | $ | 493 | ​ | $ | 584 | ​ | $ | 6,736
Tier 2 | ​ |  | 3,675 | ​ |  | (724) | ​ |  | 2,951 | ​ |  | 812 | ​ |  | 317 | ​ |  | 322 | ​ |  | 5,224
Tier 3 | ​ |  | 6,132 | ​ |  | (1,146) | ​ |  | 4,986 | ​ |  | 1,028 | ​ |  | 546 | ​ |  | 493 | ​ |  | 7,878
Solid Waste | ​ |  | 15,537 | ​ |  | (2,915) | ​ |  | 12,622 | ​ |  | 3,495 | ​ |  | 1,356 | ​ |  | 1,399 | ​ |  | 19,838
Other (a) | ​ |  | 2,487 | ​ |  | (195) | ​ |  | 2,292 | ​ |  | (29) | ​ |  | 91 | ​ |  | 72 | ​ |  | 1,571
​ | ​ |  | 18,024 | ​ |  | (3,110) | ​ |  | 14,914 | ​ |  | 3,466 | ​ |  | 1,447 | ​ |  | 1,471 | ​ |  | 21,409
Corporate and Other (b) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (677) | ​ |  | 30 | ​ |  | 200 | ​ |  | 1,487
Total | ​ | $ | 18,024 | ​ | $ | (3,110) | ​ | $ | 14,914 | ​ | $ | 2,789 | ​ | $ | 1,477 | ​ | $ | 1,671 | ​ | $ | 22,896
(a) | “Other” includes (i) our Strategic Business Solutions (‘WMSBS”) business; (ii) those elements of our landfill gas-to-energy operations and third-party subcontract and administration revenues managed by our Energy and Environmental (“EES”) and WM Renewable Energy businesses that are not included in the operations of our reportable segments; (iii) our recycling brokerage services and (iv) certain other expanded service offerings and solutions. In addition, our “Other” segment reflects the results of non-operating entities that provide financial assurance and self-insurance support for our Solid Waste business, net of intercompany activity.
Income from operations for the Other segment for the twelve months ended December 31, 2020 was impacted primarily by an increase in revenue for (i) our WMSBS business as a result of new contract activities in the current year periods and (ii) our WM Renewable Energy business, as a result of a new renewable energy facility coming online, which drove an increase in commodity sales. Additionally, the twelve month period is impacted by a $16 million non-cash charge to write off certain equipment costs recorded in the prior year period offset, in part, by (i) a decrease in revenue within our EES business and (ii) the non-cash impairment of certain assets within our WM Renewable Energy business in the current year period.
(b) | Corporate operating results reflect certain costs incurred for various support services that are not allocated to our reportable segments. These support services include, among other things, treasury, legal, digital, 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 lines of business. 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 2020, we revised allocations between our segments including (i) the discontinuation of certain allocations from Corporate and Other to Solid Waste and (ii) allocating certain insurance costs from Other to Solid Waste. Reclassifications have been made to our prior period information for comparability purposes.
In the second quarter of 2020, we recognized $61 million of non-cash impairment charges, including $41 million related to our energy services assets in our Tier 1 segment. Refer to Note 12 for additional information. Our 2020 operating results were also negatively impacted by revenue declines, as a result of the COVID-19 pandemic, in our landfill and industrial and commercial collection businesses beginning in March 2020 and continuing through the date of this report, although we began to experience improvement in volumes during the second half of 2020 when compared to the more acute impacts we experienced earlier in the year.
(f) | Includes non-cash items. Capital expenditures are reported in our reportable segments at the time they are recorded within the segments’ property 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 Sheets as of December 31 is as follows (in millions):
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018
Total assets, as reported above | ​ | $ | 29,649 | ​ | $ | 28,010 | ​ | $ | 22,896
Elimination of intercompany investments and advances | ​ |  | (304) | ​ |  | (267) | ​ |  | (246)
Total assets, per Consolidated Balance Sheet | ​ | $ | 29,345 | ​ | $ | 27,743 | ​ | $ | 22,650
​ (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 services are included as part of our “Other” operations. The following table presents changes in goodwill during the reported periods by segment (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Solid Waste | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Tier 1 |  | Tier 2 |  | Tier 3 |  | Other |  | Total
Balance, December 31, 2018 | ​ | $ | 2,193 | ​ | $ | 1,584 | ​ | $ | 2,556 | ​ | $ | 97 | ​ | $ | 6,430
Acquired goodwill (a) | ​ |  | 90 | ​ |  | 12 | ​ |  | 6 | ​ |  | — | ​ |  | 108
Divested goodwill | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Impairments | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (27) | ​ |  | (27)
Foreign currency translation and other | ​ |  | — | ​ |  | 21 | ​ |  | — | ​ |  | — | ​ |  | 21
Balance, December 31, 2019 | ​ | $ | 2,283 | ​ | $ | 1,617 | ​ | $ | 2,562 | ​ | $ | 70 | ​ | $ | 6,532
Acquired goodwill | ​ |  | 1,109 | ​ |  | 374 | ​ |  | 987 | ​ |  | — | ​ |  | 2,470
Divested goodwill | ​ |  | — | ​ |  | (12) | ​ |  | (3) | ​ |  | — | ​ |  | (15)
Impairments | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Foreign currency translation and other | ​ |  | (1) | ​ |  | 9 | ​ |  | (1) | ​ |  | — | ​ |  | 7
Balance, December 31, 2020 | ​ | $ | 3,391 | ​ | $ | 1,988 | ​ | $ | 3,545 | ​ | $ | 70 | ​ | $ | 8,994
(a) | Includes $3 million of post-closing acquisition adjustments related to prior year acquisitions.
The mix of operating revenues from our major lines of business for the years ended December 31 are as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018
Commercial | ​ | $ | 4,102 | ​ | $ | 4,229 | ​ | $ | 3,972
Residential | ​ |  | 2,716 | ​ |  | 2,613 | ​ |  | 2,529
Industrial | ​ |  | 2,770 | ​ |  | 2,916 | ​ |  | 2,773
Other collection | ​ |  | 465 | ​ |  | 482 | ​ |  | 450
Total collection | ​ |  | 10,053 | ​ |  | 10,240 | ​ |  | 9,724
Landfill | ​ |  | 3,667 | ​ |  | 3,846 | ​ |  | 3,560
Transfer | ​ |  | 1,855 | ​ |  | 1,820 | ​ |  | 1,711
Recycling | ​ |  | 1,127 | ​ |  | 1,040 | ​ |  | 1,293
Other (a) | ​ |  | 1,776 | ​ |  | 1,758 | ​ |  | 1,736
Intercompany (b) | ​ |  | (3,260) | ​ |  | (3,249) | ​ |  | (3,110)
Total | ​ | $ | 15,218 | ​ | $ | 15,455 | ​ | $ | 14,914
(a) | The “Other” line of business includes (i) our WMSBS business; (ii) our landfill gas-to-energy operations; (iii) certain services within our EES business, including our construction and remediation services and our services associated with the disposal of fly ash and (iv) certain other expanded service offerings and solutions. In addition, our “Other” line of business reflects the results of non-operating entities that provide financial assurance and self-insurance support for our Solid Waste business, net of intercompany activity. Activity related to collection, landfill, transfer and recycling within “Other” has been reclassified to the appropriate line of business for purposes of presentation in this table.
(b) | Intercompany revenues between lines of business are eliminated in the Consolidated Financial Statements included within this report.
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. Typically, our revenues and income from operations 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 financial results for 2020 reflect declines in our collection and disposal lines of business as a result of the negative impacts of COVID-19. These impacts began in March 2020 and continued through the date of this report, although we began to experience improvement in volumes during the second half of 2020 when compared to the more acute impacts we experienced earlier in the year. Improved economic conditions in the second half of 2020 positioned us to resume most business practices in accordance with our contractual terms. Service disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the Areas affected. On the other hand, certain destructive weather and climate conditions, such as wildfires in the Western U.S. and hurricanes that most often impact our operations in the Southern and Eastern U.S. during the second half of the year, can increase our revenues in the Areas affected as a result of the waste volumes generated by these events. While weather-related 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. Net operating revenues relating to operations in the U.S. and Canada for the year ended December 31 are as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018
U.S. | ​ | $ | 14,505 | ​ | $ | 14,701 | ​ | $ | 14,167
Canada | ​ |  | 713 | ​ |  | 754 | ​ |  | 747
Total | ​ | $ | 15,218 | ​ | $ | 15,455 | ​ | $ | 14,914
​ Property and equipment, net of accumulated depreciation and amortization, relating to operations in the U.S. and Canada for the year ended December 31 are as follows (in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2020 |  | 2019 |  | 2018
U.S. | ​ | $ | 13,168 | ​ | $ | 11,941 | ​ | $ | 11,044
Canada | ​ |  | 980 | ​ |  | 952 | ​ |  | 898
Total | ​ | $ | 14,148 | ​ | $ | 12,893 | ​ | $ | 11,942
​

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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