Waste Management 2013 Annual Report Download - page 139

The expiration and renegotiation of two long-term waste-to-energy disposal contracts in South Florida at
lower rates negatively impacted our revenue growth from yield in our waste-to-energy line of business by $6
million and $21 million for the years ended December 31, 2013 and 2012, respectively. The year-over-year
negative impact from the renegotiated contracts will continue through the first half of 2014.
Revenues from our environmental fee, which are included in average yield on collection and disposal,
totaled $344 million in both 2013 and 2012 and $303 million in 2011. Revenue increase from environmental fees
flattened, as we did not implement fee increases in 2013 commensurate with the prior year. Additionally, as
mentioned above, we instituted a new regulatory cost recovery fee in April 2013 that contributed approximately
$43 million to revenue growth for the year ended December 31, 2013.
Recycling commodities — Year-over-year commodity price declines of approximately 5% and 25% resulted
in decreased revenues of $79 million and $428 million for the years ended December 31, 2013 and 2012,
respectively. The estimated negative impact on income from operations was approximately $20 million and $130
million for years ended December 31, 2013 and 2012, respectively.
Fuel surcharges and mandated fees — These revenues, which are predominantly generated by our fuel
surcharge program, increased by $32 million and $33 million for the years ended December 31, 2013 and 2012,
respectively. These revenues fluctuate in response to changes in the national average prices for diesel fuel on
which our surcharge is based. Although we experienced lower year-over-year average fuel prices in 2013, our
fuel surcharge revenues increased as a result of a revision of the surcharge calculation implemented to better
capture price increases intended to be recovered by the surcharge. The mandated fees included in this line item
are primarily related to pass-through fees and taxes assessed by various state, county and municipal government
agencies at our landfills and transfer stations.
Volume — Changes in our volume caused our revenue to decrease $133 million, or 1.0%, for the year ended
December 31, 2013. This is a notable decrease when compared to our revenue increase on account of volume of
$67 million, or 0.5%, for the year ended December 31, 2012. Our volume fluctuations are generally attributable
to economic conditions, pricing changes, competition and diversion of waste by customers. Our collection
business experienced revenue declines due to lower volumes in both periods presented. Collection business
revenue declines due to lower volumes were $170 million for 2013 and $65 million in 2012. Our more aggressive
pricing strategy during 2013 was a significant contributor to the higher volume declines.
Other drivers affecting the comparability of volumes for the periods presented include:
‰Strategic accounts — We experienced revenue declines due to lower volumes associated with the loss of
certain strategic accounts including certain large retail mall customers in 2013.
‰Hurricane Sandy — The $26 million of revenues resulting from the Hurricane Sandy cleanup efforts in
the fourth quarter of 2012, primarily in the landfill line of business, negatively affected our year-over-
year volume change for the year ended December 31, 2013 while favorably affecting volume in 2012.
‰Higher landfill volumes — We experienced higher landfill volumes in both comparable periods. In 2013,
higher landfill volumes were primarily driven by our municipal solid waste business while higher special
waste volumes in the eastern and mid-western parts of the country were the principal contributor to our
higher landfill volumes in 2012.
‰Recycling commodities — Revenues increased from year-over-year volume growth in our recycling
brokerage business and our material recovery facilities for both 2013 and 2012. The additional recycling
capacity that we added in 2011 and 2012 contributed to this increase in revenues due to volume.
Acquisitions — Revenues increased $292 million and $535 million for the years ended December 31, 2013
and 2012, respectively, due to acquisitions. In 2013, the revenue increase due to acquisition was principally
associated with the acquisition of Greenstar, which is reported in our “Recycling” line of business, and the
acquisition of RCI, which is reported primarily in our “Collection” line of business. In 2012, the significant
revenue increase due to acquisitions was principally associated with Oakleaf, included in our “Other” business,
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