Waste Management 2008 Annual Report Download - page 41
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Please find page 41 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.also required by regulatory agencies for estimated closure, post-closure and remedial obligations at many of our
landfills. In addition, certain of our tax-exempt borrowings require us to hold funds in trust for the repayment of our
interest and principal obligations.
We establish financial assurance using surety bonds, letters of credit, insurance policies, trust and escrow
agreements and financial guarantees. The type of assurance used is based on several factors; most importantly the
jurisdiction, contractual requirements, market factors and availability of credit capacity. The following table
summarizes the various forms and dollar amounts (in millions) of financial assurance that we had outstanding as of
December 31, 2008:
Surety bonds:
Issued by consolidated subsidiary(a) ................................ $ 273
Issued by affiliated entity(b) ...................................... 1,094
Issued by third-party surety companies .............................. 1,589
Total surety bonds ............................................... $2,956
Letters of credit:
Revolving credit facility(c) ....................................... 1,803
Letter of credit and term loan agreements(d) .......................... 272
Other lines of credit ............................................ 91
Total letters of credit ............................................. 2,166
Insurance policies:
Issued by consolidated subsidiary(a) ................................ 979
Issued by affiliated entity(b) ...................................... 16
Total insurance policies ........................................... 995
Funded trust and escrow accounts(e) .................................. 258
Financial guarantees(f) ............................................ 251
Total financial assurance ........................................... $6,626
(a) We use surety bonds and insurance policies issued by a wholly-owned insurance subsidiary, National Guaranty
Insurance Company of Vermont, the sole business of which is to issue financial assurance to WMI and our
subsidiaries. National Guaranty Insurance Company is authorized to write up to approximately $1.4 billion in
surety bonds or insurance policies for our closure and post-closure requirements, waste collection contracts and
other business related obligations.
(b) We hold a non-controlling financial interest in an entity that we use to obtain financial assurance. Our
contractual agreement with this entity does not specifically limit the amounts of surety bonds or insurance that
we may obtain, making our financial assurance under this agreement limited only by the guidelines and
restrictions of surety and insurance regulations.
(c) WMI has a $2.4 billion revolving credit facility that matures in August 2011. At December 31, 2008,
$1,803 million of letters of credit and $300 million of borrowings were outstanding under the facility, leaving an
unused and available credit capacity of $297 million. The increase in our utilization of this facility during 2008
is due to the expiration of our $350 million letter of credit facility in December 2008. The letters of credit that
had previously been supported by that facility have been issued under the revolving credit facility.
(d) We have a $175 million letter of credit and term loan agreement that expires in June 2010 and a $105 million
letter of credit and term loan agreement that expires in June 2013. At December 31, 2008, $272 million of letters
of credit were outstanding under these agreements, leaving an unused and available credit capacity of
$8 million.
(e) Our funded trust and escrow accounts have been established to support landfill closure, post-closure and
environmental remediation obligations, the repayment of debt obligations and our performance under various
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