Waste Management 2007 Annual Report Download - page 125

other PRPs to contribute to the settlements of such liabilities, or other factors could require us to record additional
liabilities that could be material. There can sometimes be a range of reasonable estimates of the costs associated
with the likely remedy of a site. In these cases, we use the amount within the range that constitutes our best estimate.
If no amount within the range appears to be a better estimate than any other, we use the amounts that are the low ends
of such ranges in accordance with SFAS No. 5, Accounting for Contingencies, and its interpretations. If we used the
high ends of such ranges, our aggregate potential liability would be approximately $190 million higher than the
$284 million recorded in the Consolidated Financial Statements as of December 31, 2007. Our ongoing review of
our remediation liabilities could result in revisions that could cause upward or downward adjustments to income
from operations. These adjustments could also be material in any given period.
As of December 31, 2007, we had been notified that we are a PRP in connection with 75 locations listed on the
EPA’s National Priorities List , or NPL. Of the 75 sites at which claims have been made against us, 16 are sites we
own. Each of the NPL sites we own were initially developed by others as landfill disposal facilities. At each of these
facilities, we are working in conjunction with the government to characterize or remediate identified site problems,
and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or
are pursuing resolution of an allocation formula. We generally expect to receive any amounts due from these parties
at or near the time that we make the remedial expenditures. The other 59 NPL sites, which we do not own, are at
various procedural stages under the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, known as CERCLA or Superfund.
The majority of these proceedings involve allegations that certain of our subsidiaries (or their predecessors)
transported hazardous substances to the sites, often prior to our acquisition of these subsidiaries. CERCLA
generally provides for liability for those parties owning, operating, transporting to or disposing at the sites.
Proceedings arising under Superfund typically involve numerous waste generators and other waste transportation
and disposal companies and seek to allocate or recover costs associated with site investigation and remediation,
which costs could be substantial and could have a material adverse effect on our consolidated financial statements.
At some of the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a
governmental decision and an agreement among liable parties as to the share each will pay for implementing that
remedy. At other sites, where no remedy has been selected or the liable parties have been unable to agree on an
appropriate allocation, our future costs are uncertain. Any of these matters potentially could have a material adverse
effect on our consolidated financial statements.
For more information regarding commitments and contingencies with respect to environmental matters, see
Note 3.
Litigation — In December 1999, an individual brought an action against WMI, five former officers of
WM Holdings, and WM Holdings’ former independent auditor, Arthur Andersen LLP, in Illinois state court on
behalf of a proposed class of individuals who purchased WM Holdings common stock before November 3, 1994,
and who held that stock through February 24, 1998. The action is for alleged acts of common law fraud, negligence
and breach of fiduciary duty. This case has been dormant for some time, and based on U.S. Supreme Court
decisions, the Company believes this case will not proceed as a class action, thereby ending the litigation.
In April 2002, a former participant in WM Holdings’ ERISA plans and another individual filed a lawsuit in
Washington, D.C. against WMI, WM Holdings and others, attempting to increase the recovery of a class of ERISA
plan participants based on allegations related to both the events alleged in, and the settlements relating to, the
securities class action against WM Holdings that was settled in 1998 and the securities class action against us that
was settled in November 2001. Subsequently, the issues related to the latter class action have been dropped as to
WMI, its officers and directors. The case is ongoing with respect to WM Holdings and others, and WM Holdings
intends to defend itself vigorously.
There are two separate wage and hour lawsuits pending against us in California, each seeking class
certification. Both actions make the same general allegations that the defendants failed to comply with certain
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)