Waste Management 2015 Annual Report Download - page 107

Our revenues decreased $1,035 million, or 7.4%, for the year ended December 31, 2015. Our revenue
decline was driven by (i) divestitures in 2014, principally our Wheelabrator business in December 2014, our
Puerto Rico operations in the second quarter of 2014, and certain landfill and collection operations in our Eastern
Canada Area in the third quarter of 2014; (ii) lower volumes; (iii) lower revenues from our fuel surcharge
program due to declining fuel costs; (iv) lower recyclable commodity prices and (v) foreign currency translation,
which affects revenues from our Canadian operations. Partially offsetting these revenue declines were (i) revenue
growth from yield on our collection and disposal operations and (ii) revenue from acquired operations, primarily
the Deffenbaugh acquisition in March 2015.
Our revenues increased $13 million, or 0.1%, for the year ended December 31, 2014, driven by (i) revenue
growth from yield on our collection and disposal operations; (ii) revenue from acquired operations, particularly
the RCI operations acquired in July 2013 and (iii) fluctuations in electricity prices at Wheelabrator’s merchant
waste-to-energy facilities that favorably affected revenues. Offsetting these revenue increases were (i) revenue
declines due to lower volumes; (ii) divestitures in 2014, primarily our Puerto Rico operations, our Wheelabrator
business and certain landfill and collection operations in our Eastern Canada Area; (iii) foreign currency
translation and (iv) revenue declines resulting from lower recyclable commodity prices.
The following provides further details associated with our period-to-period change in revenues.
Average yield
Collection and disposal average yield — This measure reflects the effect on our revenue from the pricing
activities of our collection, transfer and landfill operations, exclusive of volume changes. Revenue growth from
collection and disposal average yield includes not only base rate changes and environmental and service fee
increases, but also (i) certain average price changes related to the overall mix of services, which are due to the
types of services provided; (ii) changes in average price from new and lost business and (iii) price decreases to
retain customers.
Revenue growth from collection and disposal average yield was $203 million, or 1.8%, and $262 million, or
2.3%, for the years ended December 31, 2015 and 2014, respectively.
Our year-over-year yield growth was driven largely by our continued focus on our pricing strategy with
lower rollbacks and improved new business pricing. We experienced growth in all three of our principal
collection lines of business in both 2015 and 2014. The details are as follows (dollars in millions):
Period-to-Period
Change
2015 vs. 2014
Period-to-Period
Change
2014 vs. 2013
Amount
Asa%of
Related
Business Amount
Asa%of
Related
Business
Commercial .................................... $ 92 3.0% $134 4.3%
Industrial ...................................... 55 2.7 84 4.2
Residential ..................................... 39 1.6 32 1.3
$186 $250
Other drivers affecting both 2015 and 2014 average yield include:
• A fee instituted to help us recover a portion of the significant regulatory costs and fees, such as host
fees and disposal taxes, which are not recouped by our pricing programs. Revenues generated from this
fee are approximately $113 million, $97 million and $43 million for the years ended December 31,
2015, 2014 and 2013, respectively, principally in our collection business, with the most significant
impact in our commercial line of business.
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