Waste Management 2008 Annual Report Download - page 125
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Please find page 125 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.• WM Holdings has guaranteed all reimbursement obligations of WMI under its $280 million letter of credit
and term loan agreements. Under those facilities, WMI must reimburse the entities funding the facilities for
any draw on a letter of credit supported by the facilities. As of December 31, 2008, we had $272 million in
outstanding letters of credit under these facilities.
• Certain of our subsidiaries have guaranteed the market or contractually determined value of certain
homeowners’ properties that are adjacent to certain of our landfills. These guarantee agreements extend
over the life of the respective landfill. Under these agreements, we would be responsible for the difference, if
any, between the sale value and the guaranteed market or contractually determined value of the homeowners’
properties. Generally, it is not possible to determine the contingent obligation associated with these
guarantees, but we do not believe that these contingent obligations will have a material effect on our
financial position, results of operations or cash flows.
• We have indemnified the purchasers of businesses or divested assets for the occurrence of specified events
under certain of our divestiture agreements. Other than certain identified items that are currently recorded as
obligations, we do not believe that it is possible to determine the contingent obligations associated with these
indemnities. Additionally, under certain of our acquisition agreements, we have provided for additional
consideration to be paid to the sellers if established financial targets are achieved post-closing. The costs
associated with any additional consideration requirements have been accounted for as incurred.
• WMI and WM Holdings guarantee the service, lease, financial and general operating obligations of certain
of their subsidiaries. If such a subsidiary fails to meet its contractual obligations as they come due, the
guarantor has an unconditional obligation to perform on its behalf. No additional liability has been recorded
for service, financial or general operating guarantees because the subsidiaries’ obligations are properly
accounted for as costs of operations as services are provided or general operating obligations as incurred. No
additional liability has been recorded for the lease guarantees because the subsidiaries’ obligations are
properly accounted for as operating or capital leases, as appropriate.
We currently do not believe it is reasonably likely that we would be called upon to perform under these
guarantees and do not believe that any of the obligations would have a material effect on our financial position,
results of operations and cash flows.
Environmental matters — Our business is intrinsically connected with the protection of the environment. As
such, a significant portion of our operating costs and capital expenditures could be characterized as costs of
environmental protection. Such costs may increase in the future as a result of legislation or regulation. However, we
generally do not believe that increases in environmental regulation negatively affect our business, because such
regulations increase the demand for our services, and we have the resources and experience to manage environ-
mental risk.
As of December 31, 2008, we had been notified that we are a PRP in connection with 74 locations listed on the
EPA’s National Priorities List, or NPL. Of the 74 sites at which claims have been made against us, 16 are sites we
own. Each of the NPL sites we own was 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 58 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
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)