Waste Management 2007 Annual Report Download - page 38

The services we provide include collection, landfill (solid and hazardous waste landfills), transfer, Wheela-
brator (waste-to-energy facilities and independent power production plants), recycling and other services, as
described below. The following table shows revenues (in millions) contributed by these services for each of the three
years indicated:
2007 2006 2005
Years Ended December 31,
Collection ........................................... $ 8,714 $ 8,837 $ 8,633
Landfill ............................................. 3,047 3,197 3,089
Transfer............................................. 1,654 1,802 1,756
Wheelabrator ......................................... 868 902 879
Recycling and other .................................... 1,298 1,074 1,183
Intercompany. ........................................ (2,271) (2,449) (2,466)
Total ............................................. $13,310 $13,363 $13,074
Collection. Our commitment to customers begins with a vast waste collection network. Collection involves
picking up and transporting waste from where it was generated to a transfer station or disposal site. We generally
provide collection services under one of two types of arrangements:
• For commercial and industrial collection services, typically we have a three-year service agreement. The
fees under the agreements are influenced by factors such as collection frequency, type of collection
equipment we furnish, type and volume or weight of the waste collected, distance to the disposal facility,
labor costs, cost of disposal and general market factors. As part of the service, we provide steel containers to
most customers to store their solid waste between pick-up dates. Containers vary in size and type according
to the needs of our customers and the restrictions of their communities. Many are designed to be lifted
mechanically and either emptied into a truck’s compaction hopper or directly into a disposal site. By using
these containers, we can service most of our commercial and industrial customers with trucks operated by
only one employee.
• For most residential collection services, we have a contract with, or a franchise granted by, a municipality,
homeowners’ association or some other regional authority that gives us the exclusive right to service all or a
portion of the homes in an area. These contracts or franchises are typically for periods of one to five years.
We also provide services under individual monthly subscriptions directly to households. The fees for
residential collection are either paid by the municipality or authority from their tax revenues or service
charges, or are paid directly by the residents receiving the service.
Landfill. Landfills are the main depositories for solid waste in North America and we have the largest
network of landfills in North America. Solid waste landfills are built and operated on land with geological and
hydrological properties that limit the possibility of water pollution, and are operated under prescribed procedures. A
landfill must be maintained to meet federal, state or provincial, and local regulations. The operation and closure of a
solid waste landfill includes excavation, construction of liners, continuous spreading and compacting of waste,
covering of waste with earth or other inert material and constructing final capping of the landfill. These operations
are carefully planned to maintain sanitary conditions, to maximize the use of the airspace and to prepare the site so it
can ultimately be used for other purposes.
All solid waste management companies must have access to a disposal facility, such as a solid waste landfill.
We believe it is usually preferable for our collection operations to use disposal facilities that we own or operate, a
practice we refer to as internalization, rather than using third-party disposal facilities. Internalization generally
allows us to realize higher consolidated margins and stronger operating cash flows. The fees charged at disposal
facilities, which are referred to as tipping fees, are based on several factors, including competition and the type and
weight or volume of solid waste deposited.
We also operate secure hazardous waste landfills in the United States. Under federal environmental laws, the
federal government (or states with delegated authority) must issue permits for all hazardous waste landfills. All of
our hazardous waste landfills have obtained the required permits, although some can accept only certain types of
hazardous waste. These landfills must also comply with specialized operating standards. Only hazardous waste in a
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