Waste Management 2011 Annual Report Download - page 121

Fuel surcharges and mandated fees — These revenues, which are predominantly generated by our fuel
surcharge program, increased by $169 million and $69 million for the years ended December 31, 2011 and 2010,
respectively. This increase is directly attributable to higher national average prices for diesel fuel that we use for
our fuel surcharge program. The mandated fees included in this line item are primarily related to the pass-through
of fees and taxes assessed by various state, county and municipal governmental agencies at our landfills and
transfer stations. These mandated fees have not had a significant impact on the comparability of revenues for the
periods included in the table above.
Volume — Our revenue decline due to volume was $187 million, or 1.5%, for the year ended December 31,
2011. This is a notable improvement in the rate of revenue decline from the prior year when revenue decline due
to volume was $304 million, or 2.6%. Volume declines are generally attributable to economic conditions,
increased pricing, competition and increasing focus on waste reduction and diversion by consumers.
Additionally, the oil spill clean-up activities along the Gulf Coast in 2010 unfavorably impacted our year-over-
year volume change by $94 million for the year ended December 31, 2011.
In 2011, volume declines from our collection business accounted for $327 million of volume-related revenue
decline. We experienced commercial and residential collection revenue declines due to lower volume that we attribute
to the overall weakness in the economy, as well as the effects of pricing, competition and diversion of waste by
consumers. Our industrial collection operations continued to be negatively affected by the current economic
environment due to the construction slowdown across the United States. Lower third-party volumes in our transfer
station operations also caused revenue declines in the current year and can generally be attributed to economic
conditions and the effects of pricing and competition. Furthermore, as noted above, the overall year-over-year
comparison of volumes in the collection line of business was unfavorably impacted by volume we received from the
oil spill clean-up activities along the Gulf Coast in 2010. Additionally, in 2011, we experienced revenue declines at our
waste-to-energy facilities, primarily driven by the expiration of a long-term electric power capacity agreement, which
was offset to some extent by increases in waste tons processed and electricity produced.
Revenue declines due to volume detailed above were offset in part by revenue increases of $101 million for the
year ended December 31, 2011, primarily from year-over-year volume improvements in our recycling brokerage
business and in our material recovery facilities. Our continued pursuit of municipal volumes as well as the addition of
new single stream recycling facilities during 2011 contributed to these revenue increases due to volume. We also
experienced volume-related revenue increases of $37 million for the year ended December 31, 2011 from our strategic
growth businesses and our landfill gas-to-energy operations. Additionally, our total landfill revenues increased
$41 million in 2011 due to higher third-party volumes as compared with the prior year, primarily driven by higher
special waste volumes in our Eastern and Midwest geographic Groups. However, our landfill municipal solid waste
volumes continued to decline in 2011 as compared with the prior year due to economic conditions, increased pricing,
competition and increased focus on waste reduction and diversion by consumers.
In 2010, our collection business accounted for $254 million of the total volume-related revenue decline. We
experienced commercial and residential collection volume declines that we attributed to the overall weakness in the
economy, as well as the effects of pricing, competition and diversion of waste by consumers. Our industrial collection
operations were negatively affected by the economic environment due to the construction slowdown across the United
States. The overall volume decline in the collection line of business was offset in part by an increase in volumes of
$99 million associated with oil spill clean-up activities along the Gulf Coast. Lower third-party volumes in our transfer
station operations also caused revenue declines in 2010, and can generally be attributed to economic conditions and the
effects of pricing and competition. However, in 2010, our landfill revenues increased due to higher third-party
volumes. This increase was principally due to higher special waste volumes in our Midwest and Southern Groups,
driven in part by our focus on our customers and better meeting their needs.
Acquisitions and divestitures — Revenues increased $449 million and $240 million for the years ended
December 31, 2011 and 2010, respectively, due to acquisitions. The significant revenue increase due to
acquisitions in 2011 was principally associated with Oakleaf, included in our “Other” business, demonstrating
our current focus on identifying strategic growth opportunities in new, complementary lines of business.
Additionally, revenue increased due to acquisitions in our collection, recycling and waste-to-energy lines of
business in both periods. Divestitures accounted for decreased revenues of $2 million in each of the years ended
December 31, 2011 and 2010, respectively.
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