Waste Management 2007 Annual Report Download - page 122

Download and view the complete annual report

Please find page 122 of the 2007 Waste Management annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 162

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162

changes to our net insurance liabilities for the years ended December 31, 2006 and 2007 are summarized below (in
millions):
Gross Claims
Liability
Estimated Insurance
Recoveries(a)
Net Claims
Liability
Balance, December 31, 2004 . . . ............... $681 $(321) $ 360
Self-insurance expense (benefit) .............. 227 (57) 170
Cash (paid) received ....................... (248) 67 (181)
Balance, December 31, 2005 . . . ............... 660 (311) 349
Self-insurance expense (benefit) .............. 233 (31) 202
Cash (paid) received ....................... (241) 75 (166)
Balance, December 31, 2006 . . . ............... 652 (267) 385
Self-insurance expense (benefit) .............. 144 (1) 143
Cash (paid) received ....................... (225) 54 (171)
Balance, December 31, 2007 . . . ............... $571 $(214) $ 357
Current portion at December 31, 2007 ........... $147 $ (73) $ 74
Long-term portion at December 31, 2007 ......... $424 $(141) $ 283
(a) Amounts reported as estimated insurance recoveries are related to both paid and unpaid claims liabilities.
For the 14 months ended January 1, 2000, we insured certain risks, including auto, general liability and
workers’ compensation, with Reliance National Insurance Company, whose parent filed for bankruptcy in June
2001. In October 2001, the parent and certain of its subsidiaries, including Reliance National Insurance Company,
were placed in liquidation. We believe that because of probable recoveries from the liquidation, currently estimated
to be $18 million, it is unlikely that events relating to Reliance will have a material adverse impact on our financial
statements.
We do not expect the impact of any known casualty, property, environmental or other contingency to have a
material impact on our financial condition, results of operations or cash flows.
Operating leases — Rental expense for leased properties was $135 million, $122 million and $129 million
during 2007, 2006 and 2005, respectively. These amounts primarily include rents under operating leases. Minimum
contractual payments due during each of the next five years for our operating lease obligations are noted below (in
millions):
2008 2009 2010 2011 2012
$87 $69 $61 $48 $41
Our minimum contractual payments for lease agreements during future periods is significantly less than
current year rent expense because our significant lease agreements at landfills have variable terms based either on a
percentage of revenue or a rate per ton of waste received.
Other commitments — We have the following unconditional obligations:
•Share Repurchases — In November 2007, we entered into a plan under SEC Rule 10b5-1 to effect market
purchases of our common stock during the first quarter of 2008. See Note 14 for additional information
related to this agreement.
•Fuel Supply — We have purchase agreements expiring at various dates through 2011 that require us to
purchase minimum amounts of waste and conventional fuels at our independent power production plants.
These fuel supplies are used to produce electricity for sale to electric utilities, which is generally subject to
87
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)