Waste Management 2011 Annual Report Download - page 84

The services we provide include collection, landfill (solid and hazardous waste landfills), transfer,
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:
Years Ended December 31,
2011 2010 2009
Collection .............................................. $ 8,406 $ 8,247 $ 7,980
Landfill ................................................ 2,611 2,540 2,547
Transfer ............................................... 1,280 1,318 1,383
Wheelabrator ........................................... 877 889 841
Recycling .............................................. 1,580 1,169 741
Other .................................................. 655 314 245
Intercompany ........................................... (2,031) (1,962) (1,946)
Total ................................................ $13,378 $12,515 $11,791
Collection. Our commitment to customers begins with a vast waste collection network. Collection
involves picking up and transporting waste and recyclable materials from where it was generated to a transfer
station, material recovery facility (“MRF”) 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 three 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. At December 31, 2011, we
owned or operated 266 solid waste landfills, which represents the largest network of landfills in North America. Solid
waste landfills are constructed and operated on land with engineering safeguards that limit the possibility of water and
air pollution, and are operated under procedures prescribed by regulation. A landfill must meet federal, state or
provincial, and local regulations during its design, construction, operation and closure. The operation and closure
activities of a solid waste landfill include excavation, construction of liners, continuous spreading and compacting of
waste, covering of waste with earth or other acceptable material and constructing final capping of the landfill. These
operations are carefully planned to maintain environmentally safe conditions and to maximize the use of the airspace.
All solid waste management companies must have access to a disposal facility, such as a solid waste landfill.
The significant capital requirements of developing and operating a landfill serve as a barrier to landfill ownership
and, as a result, third-party haulers often dispose of waste at our landfills. 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.
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