Waste Management 2008 Annual Report Download - page 102
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Please find page 102 of the 2008 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.Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization
factor, or AUF, is established to calculate the remaining permitted and expansion capacity in tons. The AUF is
established using the measured density obtained from previous annual surveys and then adjusted to account for
settlement. The amount of settlement that is forecasted will take into account several site-specific factors including
current and projected mix of waste type, initial and projected waste density, estimated number of years of life
remaining, depth of underlying waste, anticipated access to moisture through precipitation or recirculation of
landfill leachate, and operating practices. In addition, the initial selection of the AUF is subject to a subsequent
multi-level review by our engineering group and the AUF used is reviewed on a periodic basis and revised as
necessary. Our historical experience generally indicates that the impact of settlement at a landfill is greater later in
the life of the landfill when the waste placed at the landfill approaches its highest point under the permit
requirements.
When we include the expansion airspace in our calculations of remaining permitted and expansion airspace,
we also include the projected costs for development, as well as the projected asset retirement costs related to final
capping, and closure and post-closure of the expansion in the amortization basis of the landfill.
After determining the costs and remaining permitted and expansion capacity at each of our landfills, we
determine the per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the
costs by the corresponding number of tons. We calculate per ton amortization rates for each landfill for assets
associated with each final capping event, for assets related to closure and post-closure activities and for all other
costs capitalized or to be capitalized in the future. These rates per ton are updated annually, or more often, as
significant facts change.
It is possible that actual results, including the amount of costs incurred, the timing of final capping, closure and
post-closure activities, our airspace utilization or the success of our expansion efforts could ultimately turn out to be
significantly different from our estimates and assumptions. To the extent that such estimates, or related assump-
tions, prove to be significantly different than actual results, lower profitability may be experienced due to higher
amortization rates, higher final capping, closure or post-closure rates, or higher expenses; or higher profitability
may result if the opposite occurs. Most significantly, if it is determined that the expansion capacity should no longer
be considered in calculating the recoverability of the landfill asset, we may be required to recognize an asset
impairment. If it is determined that the likelihood of receiving the expansion permit has become remote, the
capitalized costs related to the expansion effort are expensed immediately.
Environmental Remediation Liabilities — We are subject to an array of laws and regulations relating to the
protection of the environment. Under current laws and regulations, we may have liabilities for environmental damage
caused by operations, or for damage caused by conditions that existed before we acquired a site. Such liabilities
include potentially responsible party, or PRP, investigations, settlements, certain legal and consultant fees, as well as
costs directly associated with site investigation and clean up, such as materials and incremental internal costs directly
related to the remedy. We provide for expenses associated with environmental remediation obligations when such
amounts are probable and can be reasonably estimated. We routinely review and evaluate sites that require remediation
and determine our estimated cost for the likely remedy based on several estimates and assumptions.
We estimate costs required to remediate sites where it is probable that a liability has been incurred based on
site-specific facts and circumstances. We routinely review and evaluate sites that require remediation, considering
whether we were an owner, operator, transporter, or generator at the site, the amount and type of waste hauled to the
site and the number of years we were associated with the site. Next, we review the same type of information with
respect to other named and unnamed PRPs. Estimates of the cost for the likely remedy are then either developed
using our internal resources or by third-party environmental engineers or other service providers. Internally
developed estimates are based on:
• Management’s judgment and experience in remediating our own and unrelated parties’ sites;
• Information available from regulatory agencies as to costs of remediation;
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)