market knowledge, community relations and name recognition, and to instill their entrepreneurial drive
at all levels of our operations. By furnishing the local management of such acquired companies with our
Ñnancial and marketing resources and technical expertise, we believe that the acquired companies are
better able to secure additional municipal franchises and other contracts.
Privatize Municipal Operations and Acquire Divested Operations. We also seek to acquire solid
waste collection operations, transfer stations and landÑlls that municipalities and other governmental
authorities are privatizing. Many municipalities are seeking to outsource or sell these types of solid
waste operations, as they lack the capital, technical expertise and/or operational resources necessary to
comply with increasingly stringent regulatory standards and/or to compete eÅectively with private-
sector companies. In addition, we have acquired, and will continue to seek to acquire, operations and
facilities that may be divested by other publicly-owned waste companies.
Operations
Our operations primarily consist of the collection, transfer and disposal of non-hazardous solid waste.
Collection Services.We provide solid waste collection services to commercial, industrial, municipal and
residential customers in 22 states through 140 collection companies. In 2004, 74.3% of our revenue was
derived from collection services consisting of approximately 32.5% from services provided to municipal and
residential customers, 36.6% from services provided to commercial customers, and 30.9% from services
provided to industrial and other customers.
Our residential collection operations involve the curbside collection of refuse from small containers into
collection vehicles for transport to transfer stations or directly to landÑlls. Residential solid waste collection
services are typically performed under contracts with municipalities, which we generally secure by competitive
bid and which give our company exclusive rights to service all or a portion of the homes in their respective
jurisdictions. These contracts or franchises usually range in duration from one to Ñve years, although some of
our exclusive franchises are for signiÑcantly longer periods. Residential solid waste collection services may also
be performed on a subscription basis, in which individual households contract directly with our company. The
fees received for subscription residential collection are based primarily on market factors, frequency and type
of service, the distance to the disposal facility and cost of disposal. In general, subscription residential
collection fees are paid quarterly in advance by the residential customers receiving the service.
In our commercial and industrial collection operations, we supply our customers with waste containers of
varying sizes. We also rent compactors to large waste generators. Commercial collection services are generally
performed under one- to three-year service agreements, and fees are determined by such considerations as:
‚ market factors,
‚ collection frequency,
‚ type of equipment furnished,
‚ the type and volume or weight of the waste collected,
‚ the distance to the disposal facility and
‚ the cost of disposal.
We rent waste containers to construction sites and also provide waste collection services to industrial and
construction facilities on a contractual basis with terms generally ranging from a single pickup to one year or
longer. We collect the containers or compacted waste and transport the waste either to a landÑll or a transfer
station for disposal.
Also, we currently provide recycling services in certain markets primarily to comply with local laws or
obligations under our franchise agreements. These services include the curbside collection of residential
recyclable waste and the provision of a variety of recycling services to commercial and industrial customers.
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