Advanced Disposal Services, Inc. operates as an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under arrangements.
The company has a presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, serving approximately 2.7 million residential customers and 200,000 commercial and industrial (C&I) customers through its network of...
Advanced Disposal Services, Inc. operates as an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under arrangements.
The company has a presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, serving approximately 2.7 million residential customers and 200,000 commercial and industrial (C&I) customers through its network of 95 collection operations, 73 transfer stations, 3 material recycling facilities, 19 locations where it receives and bales recyclable material and 41 owned or operated active landfills.
Strategy
The company’s strategy is to drive financial performance in markets in which it owns or operates a landfill or in certain disposal-neutral markets, where the landfill is owned by a municipality. Its strategy is to create and maintain vertically integrated operations through which it manages a majority of its customers' waste from the point of collection through the point of disposal, a process it refers to as internalization.
Operations
The company’s integrated environmental services operations could be classified into three lines of business, such as collection services; disposal services, which include transfer stations and landfills; and recycling services. It serves both primary (densely populated) and secondary (less populated) markets.
The company’s operations are managed through three regional offices located in the South, Midwest and East regions of the United States. Each of the regions has a portfolio of collection, transfer, landfill and recycling operations. The services that the company provides include non-hazardous solid waste collection, transfer, recycling and disposal services for residential, C&I customers.
Collection Services
The company serves approximately 2.7 million residential customers, 200,000 C&I customers and 800 municipalities through its 95 collection operations. It internalized 62% of the waste collected into its own landfills for the year ended December 31, 2019.
The company’s residential collection operations consist of curbside collection of residential refuse from small carts or containers into collection vehicles for transport to a disposal/recycling site. These services are typically performed either under long-term contracts with local government entities or on a subscription basis, whereby individual households contract directly with the company for its collection services. The company’s municipal residential contracts allow for annual rate increases.
The company secures its contracts with municipalities through a bid process and such contracts gives it rights to service all or a portion of the homes in the respective municipalities. These contracts range in term from three to ten years. Municipal contracts could be designed as either mandatory or non-mandatory franchises. Mandatory franchises allow the company to become the provider of waste management services for the areas of the municipality included in the contract, which requires all residential customers within those areas to use its services for solid waste collection and disposal. Non-mandatory franchises allow the company to retain the right to service the specified areas of the municipality, with no competitor permitted to offer services to residential customers, but residential customers might choose not to use its services.
The fees that the company receives for residential collection on an individual subscription basis are based primarily on market factors, frequency and type of service, the distance to the disposal facility and the cost of disposal.
For C&I operations, the company supplies its customers with waste containers suitable for their needs and rent or sell compactors to large waste generators. Standard service agreements with C&I customers are typically three to five years in length with pricing based on estimated disposal weight and time required to service the account. The company bills commercial customers monthly in advance. Industrial customers are billed in arrears for its services. In addition, contracts typically are renewed automatically unless the customer specifically requests cancellation. The company’s standard C&I service contracts allow for rate increases and represent approximately 54% of its overall collection revenue.
The company’s construction and demolition (C&D) waste services provide C&D sites with rolloff containers and waste collection, transportation and disposal services. C&D services are typically provided pursuant to arrangements in which the customer provides 24-hour advance notice of its disposal needs and is billed on a per pull plus disposal basis. While the majority of its rolloff services are provided to customers under long-term contracts, the company do not enter into contracts with its C&D customers that utilize temporary rolloff containers due to the short-term nature of most C&D projects. The company’s temporary rolloff customers pay the company in arrears for its services.
Disposal Services
Landfill disposal services represent the final stage in the company’s vertically integrated waste collection and disposal services solution. The company owned or operated 34 active municipal solid waste (MSW) landfills and 7 active C&D landfills, as of December 31, 2019, enabling it to offer service to its customers. For the year ended December 31, 2019, the company’s landfills accepted 17.3 million tons of waste. The company charges tipping or disposal fees to third parties.
As of December 31, 2019, the company’s landfills had approximately 377.5 million cubic yards of utilized airspace and total permitted and deemed permitted airspace of approximately 1,041.4 million cubic yards. Its active landfills that are accepting waste have an average of 37.4 years of aggregate remaining permitted and deemed permitted life. Some its landfills accept non-hazardous special waste, including utility ash, asbestos and contaminated soils.
The company monitors the availability of permitted disposal capacity at each of its landfills and evaluates whether to pursue an expansion at a given landfill based on estimated future waste volumes and prices, market needs, remaining capacity and the likelihood of obtaining an expansion. It also has responsibility for 5 MSW and 2 C&D closed landfills, for which it has associated closure and post-closure obligations. The post-closure period runs for 30 years after final site closure for landfills.
As part of its vertically integrated solid waste disposal services, the company operates 73 transfer stations. Transfer stations receive, consolidate and transfer solid waste to landfills and recycling facilities. Transfer stations enable the company to increase the operational reach of its landfill operations; increase the volume of disposal revenue at its landfills; and build relationships with municipalities and other operators that deliver waste to its transfer stations, leading to additional growth and acquisition opportunities.
Recycling Services
The company has a network of 3 recycling facilities that it manages or operates and 19 locations where it receives and bales recyclable materials. These facilities generate revenue through the collection, processing and sale of old corrugated cardboard, old newspaper, mixed paper, aluminum, glass and other materials. These recyclable materials are internally collected by the company’s residential, C&I collection operations, as well as third-party haulers.
Fuel and Environmental Charges
The amounts charged for collection, disposal, transfer, and recycling services might include fuel charges and environmental charges.
Other Services
Other revenue include ancillary revenue-generating activities, such as landfill gas-to-energy operations at MSW landfills, management of third-party owned landfills, broker revenue, customer service charges relating to overdue payments, customer administrative fees relating to customers who request paper copies of invoices rather than opting for electronic invoices and compliance fees.
Regulation
The primary federal environmental and occupational health and safety-related statutes that affect the company’s facilities and operations include the Resource Conservation and Recovery Act, as amended; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Federal Water Pollution Control Act of 1972, as amended, known as the Clean Water Act; the Clean Air Act; the United States Environmental Protection Agency; and the Occupational Safety and Health Act of 1970, as amended.
With regard to the company’s solid waste transportation operations, it is subject to the jurisdiction of the Surface Transportation Board and is regulated by the Federal Highway Administration, Office of Motor Carriers, and by regulatory agencies in states that regulate such matters.
History
The company was founded in 2000. It was incorporated in 2012 in the state of Delaware. The company was formerly known as ADS Waste Holdings, Inc. and changed its name to Advanced Disposal Services, Inc. in 2016.
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