Waste Management 2014 Annual Report Download - page 102

operations for a particular reporting period. We reflect any withdrawal liability as an operating expense in our
statement of operations and as a liability on our balance sheet.
We have previously withdrawn several employee bargaining units from underfunded multiemployer pension
plans, and we recognized related expenses of $4 million in 2014, $5 million in 2013 and $10 million in 2012. We
are still negotiating and litigating final resolutions of our withdrawal liability for certain withdrawals, which
could be higher than the charges we have recognized.
Our business is subject to operational and safety risks, including the risk of personal injury to employees
and others.
Providing environmental and waste management services, including constructing and operating landfills,
involves risks such as truck accidents, equipment defects, malfunctions and failures, mass instability or waste
slides, severe weather and natural disasters, which could potentially result in releases of hazardous materials and
odors, injury or death of employees and others, or a need to shut down or reduce operation of our facilities while
remedial actions are undertaken. Additionally, we have built and are operating CNG fueling stations to serve our
growing fleet of CNG trucks, some of which also serve the public or third parties. Operation of fueling stations
and landfill gas collection and control systems involves additional risks of fire and explosion. All of these risks
expose us to potential liability for pollution and other environmental damages, personal injury, loss of life,
business interruption, and property damage or destruction.
While we seek to minimize our exposure to such risks through comprehensive training and compliance
programs, as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in
excess of any applicable insurance, our business, results of operations and financial condition could be adversely
affected. Any such incidents could also tarnish our reputation and reduce the value of our brand.
We have substantial financial assurance and insurance requirements, and increases in the costs of
obtaining adequate financial assurance, or the inadequacy of our insurance coverages, could negatively
impact our liquidity and increase our liabilities.
The amount of insurance we are required to maintain for environmental liability is governed by statutory
requirements. We believe that the cost for such insurance is high relative to the coverage it would provide and,
therefore, our coverages are generally maintained at the minimum statutorily-required levels. We face the risk of
incurring additional costs for environmental damage if our insurance coverage is ultimately inadequate to cover
those damages. We also carry a broad range of other insurance coverages that are customary for a company our
size. We use these programs to mitigate risk of loss, thereby enabling us to manage our self-insurance exposure
associated with claims. The inability of our insurers to meet their commitments in a timely manner and the effect
of significant claims or litigation against insurance companies may subject us to additional risks. To the extent
our insurers are unable to meet their obligations, or our own obligations for claims are more than we estimated,
there could be a material adverse effect to our financial results.
In addition, to fulfill our financial assurance obligations with respect to variable-rate tax-exempt debt, final
capping, closure, post-closure and environmental remediation obligations, we generally obtain letters of credit or
surety bonds, rely on insurance, including captive insurance, fund trust and escrow accounts or rely upon WM
financial guarantees. We currently have in place all financial assurance instruments necessary for our operations.
Our financial position, which can be negatively affected by asset impairments, our credit profile and general
economic factors, may adversely affect the cost of our current financial assurance instruments, and changes in
regulations may impose stricter requirements on the types of financial assurance that will be accepted.
Additionally, in the event we are unable to obtain sufficient surety bonding, letters of credit or third-party
insurance coverage at reasonable cost, or one or more states cease to view captive insurance as adequate
coverage, we would need to rely on other forms of financial assurance. It is possible that we could be forced to
deposit cash to collateralize our obligations. Other forms of financial assurance could be more expensive to
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