Waste Management 2006 Annual Report Download - page 47

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cash flows or other aspects of our operations or operating results. Forward-looking statements generally include
statements containing:
• projections about accounting and finances;
• plans and objectives for the future;
• projections or estimates about assumptions relating to our performance; and
• our opinions, views or beliefs about current or future events, circumstances or performance.
You should view these statements with caution. These statements are not guarantees of future performance,
circumstances or events. They are based on the facts and circumstances known to us as of the date the statements are
made. All phases of our business are subject to uncertainties, risks and other influences, many of which we do not
control. Any of these factors, either alone or taken together, could have a material adverse effect on us and could
change whether any forward-looking statement ultimately turns out to be true. Additionally, we assume no
obligation to update any forward-looking statement as a result of future events, circumstances or developments. The
following discussion should be read together with the Consolidated Financial Statements and the notes thereto.
Outlined below are some of the risks that we face and that could affect our business and financial statement for 2007
and beyond. However, they are not the only risks that we face. There may be other risks that we do not presently
know or that we currently believe are immaterial that could also impair our business or financial position.
The waste industry is highly competitive, and if we cannot successfully compete in the marketplace, our
business, financial condition and operating results may be materially adversely affected.
We encounter intense competition from governmental, quasi-governmental and private sources in all aspects
of our operations. In North America, the industry consists of large national waste management companies, and local
and regional companies of varying sizes and financial resources. We compete with these companies as well as with
counties and municipalities that maintain their own waste collection and disposal operations. These counties and
municipalities may have financial competitive advantages because tax revenues are available to them and tax-
exempt financing is more readily available to them. Also, such governmental units may attempt to impose flow
control or other restrictions that would give them a competitive advantage.
In addition, competitors may reduce their prices to expand sales volume or to win competitively bid contracts.
When this happens, we may rollback prices or offer lower pricing to attract or retain our customers, resulting in a
negative impact to our revenue growth from yield on base business.
If we do not successfully manage our costs, our income from operations could be lower than expected.
In recent years, we have implemented several profit improvement initiatives aimed at lowering our costs and
enhancing our revenues, and we continue to seek ways to reduce our selling, general and administrative and
operating expenses. While generally we have been successful in managing our selling, general and administrative
costs, subcontractor costs and the effect of fuel price increases, our initiatives may not be sufficient. Even as our
revenues increase, if we are unable to control variable costs or increases to our fixed costs in the future, we will be
unable to maintain or expand our margins.
We cannot guarantee that we will be able to successfully implement our plans and strategies to improve
margins and increase our income from operations.
We have announced several programs and strategies that we have implemented or planned to improve our
margins and operating results. For example, except when prohibited by contract, we have implemented price
increases and environmental fees, and we continue our fuel surcharge programs, all of which have increased our
internal revenue growth. The loss of volumes as a result of price increases may negatively affect our cash flows or
results of operations. Additionally, we have announced plans to divest under-performing and non-strategic assets if
we cannot improve their profitability. We may not be able to successfully negotiate the divestiture of under-
performing and non-strategic operations, which could result in asset impairments or the continued operation of low-
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