our company to negotiate volume discounts for certain purchases, including waste disposal rates at
landÑlls operated by third parties. Furthermore, we have taken steps to increase utilization of our
assets. For example, to reduce the number of collection vehicles and maximize the eÇciency of our
Öeet, we have instituted a grid productivity program which allows us to benchmark the performance of
all of our drivers. In our larger markets, we also use a route optimization program to minimize drive
times and improve operating density. By using assets more eÇciently, operating expenses can be
signiÑcantly reduced.
‚ High Levels of Customer Satisfaction. Our goal of maintaining high levels of customer satisfaction
complements our operating strategy. Our personalized sales process is oriented towards maintaining
relationships and ensuring that service is being properly provided.
‚ Utilize Systems to Improve Consistency in Financial and Operational Reporting. We continue to
focus on systems and training initiatives that complement our operating strategy. These initiatives
include contact management, billing, productivity, maintenance and general ledger systems. These
systems provide us with detailed information, prepared in a consistent manner, that will allow us to
quickly analyze and act upon trends in our business.
For certain risks related to our operating strategy, see ""Risk Factors.''
Growth Strategy
Our growth strategy focuses on increasing revenue, gaining market share and enhancing stockholder value
through internal growth and acquisitions. For certain risks related to our growth strategy, see ""Risk Factors.''
‚ Internal Growth. Our internal growth strategy focuses on retaining existing customers and obtaining
commercial, municipal and industrial customers through our well-managed sales and marketing
activities.
Pricing Activities. We seek to secure price increases necessary to oÅset increased costs. During the
fourth quarter of 2003, we implemented a broad-based pricing initiative across all lines of our business.
Long-Term Contracts. We seek to obtain long-term contracts for collecting solid waste in high-
growth markets. These include exclusive franchise agreements with municipalities as well as commer-
cial and industrial contracts. By obtaining such long-term agreements, we have the opportunity to grow
our contracted revenue base at the same rate as the underlying population growth in these markets. For
example, we have secured exclusive, long-term franchise agreements in high-growth markets such as
Los Angeles, Orange and Contra Costa Counties in California, Las Vegas, Nevada, Arlington, Texas,
and many areas of Florida. We believe that this positions our company to experience internal growth
rates that are generally higher than our industry's overall growth rate. In addition, we believe that by
securing a base of long-term recurring revenue in growth markets, we are better able to protect our
market position from competition and our business may be less susceptible to downturns in economic
conditions.
Sales and Marketing Activities. We seek to manage our sales and marketing activities to enable our
company to capitalize on our leading positions in many of the markets in which we operate. We
currently have approximately 500 sales and marketing employees in the Ñeld, who are compensated
using a commission structure that is focused on generating high levels of quality revenue. For the most
part, these employees directly solicit business from existing and prospective commercial, industrial,
municipal and residential customers. We emphasize our rate and cost structures when we train new
and existing sales personnel. In addition, we utilize a contact management system that assists our sales
people in tracking leads. It also tracks renewal periods for potential commercial, industrial and
franchise contracts.
Development Activities. We seek to identify opportunities to further our position as an integrated