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Segment and Related Information (Tables)

6 Months Ended

Jun. 30, 2023

Segment and Related Information

Reportable Segments

Summarized financial information concerning our reportable segments is shown in the following table (in millions):


		Gross			Intercompany			Net			Income
		Operating			Operating			Operating			from
		Revenues			Revenues(d)			Revenues			Operations
Three Months Ended June 30:
2023
Solid Waste:
East Tier		$	2,761		$	(569)		$	2,192		$	625
West Tier			2,666			(582)			2,084			618
Solid Waste (a)			5,427			(1,151)			4,276			1,243
Other (b)			901			(58)			843			(13)
			6,328			(1,209)			5,119			1,230
Corporate and Other (c)			—			—			—			(286)
Total		$	6,328		$	(1,209)		$	5,119		$	944

2022
Solid Waste:
East Tier		$	2,609		$	(496)		$	2,113		$	581
West Tier			2,612			(540)			2,072			608
Solid Waste (a)			5,221			(1,036)			4,185			1,189
Other (b)			901			(59)			842			18
			6,122			(1,095)			5,027			1,207
Corporate and Other (c)			—			—			—			(317)
Total		$	6,122		$	(1,095)		$	5,027		$	890


		Gross			Intercompany			Net			Income
		Operating			Operating			Operating			from
		Revenues			Revenues(d)			Revenues			Operations
Six Months Ended June 30:
2023
Solid Waste:
East Tier		$	5,403		$	(1,103)		$	4,300		$	1,175
West Tier			5,203			(1,136)			4,067			1,190
Solid Waste (a)			10,606			(2,239)			8,367			2,365
Other (b)			1,756			(112)			1,644			(17)
			12,362			(2,351)			10,011			2,348
Corporate and Other (c)			—			—			—			(579)
Total		$	12,362		$	(2,351)		$	10,011		$	1,769

2022
Solid Waste:
East Tier		$	4,992		$	(941)		$	4,051		$	1,112
West Tier			5,018			(1,030)			3,988			1,157
Solid Waste (a)			10,010			(1,971)			8,039			2,269
Other (b)			1,758			(109)			1,649			19
			11,768			(2,080)			9,688			2,288
Corporate and Other (c)			—			—			—			(630)
Total		$	11,768		$	(2,080)		$	9,688		$	1,658

(a)

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.

Income from operations in our Solid Waste business increased primarily due to (i) revenue growth in our collection and disposal business driven by yield and (ii) fuel tax credits recognized in the current year which were nominal in the prior year period as the majority of our fuel tax credits were not recognized until August 2022 due to the timing of the Inflation Reduction Act of 2022 (“IRA”). These increases were partially offset by (i) inflationary cost pressures; (ii) labor cost increases from frontline employee wage adjustments and annual merit increases and (iii) reduced profitability in our recycling business from the decline in recycling commodity prices and lower volumes.

(b)

“Other” includes (i) elements of our Strategic Business Solutions (“WMSBS”) business that are not included in the operations of our reportable segments; (ii) elements of our sustainability business that includes landfill gas-to-energy operations managed by our WM Renewable Energy business, our Sustainability and Environmental Solutions business and recycling brokerage services and not included in the operations of our reportable segments; (iii) certain other expanded service offerings and solutions and (iv) the results of non-operating entities that provide financial assurance and self-insurance support for our Solid Waste business, net of intercompany activity.

The decrease in income from operations was due to (i) reduced profitability in our WM Renewable Energy business due to lower market values for renewable fuel standard credits and lower electricity and natural gas prices and (ii) the decline in recycling brokerage commodity prices affecting profitability in our recycling business.

(c)

“Corporate and Other” 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.

The improvement in income from operations was primarily driven by (i) lower annual incentive compensation costs; (ii) lower professional fees in connection with investments in our digital program, as certain strategic projects have now been implemented and (iii) a charge during the first quarter of 2022 to adjust an indirect wholly-owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a closed site. These lower costs were partially offset by annual merit increases and market adjustments for deferred compensation plans related to investment performance.

(d)	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.

Summary of operating revenues mix

The mix of operating revenues from our major lines of business are as follows (in millions):


		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2023			2022			2023			2022
Commercial		$	1,424		$	1,355		$	2,836		$	2,642
Industrial			974			942			1,907			1,778
Residential			866			832			1,720			1,637
Other collection			191			181			363			334
Total collection			3,455			3,310			6,826			6,391
Landfill			1,265			1,194			2,417			2,245
Transfer			585			554			1,125			1,040
Recycling			370			468			728			921
Other (a)			653			596			1,266			1,171
Intercompany (b)			(1,209)			(1,095)			(2,351)			(2,080)
Total		$	5,119		$	5,027		$	10,011		$	9,688

(a)

The “Other” line of business includes (i) certain services provided by our WMSBS business; (ii) certain services within our sustainability business including our landfill gas-to-energy operations managed by our WM Renewable Energy business; (iii) certain other expanded service offerings and solutions and (iv) the results of non-operating entities that provide financial assurance and self-insurance support for our Solid Waste business, net of intercompany activity. Revenue attributable to collection, landfill, transfer and recycling services provided by our “Other” businesses has been reflected as a component of the relevant line of business for purposes of presentation in this table.

(b)	Intercompany revenues between lines of business are eliminated in the Condensed Consolidated Financial Statements included within this report.