Waste Management 2014 Annual Report Download - page 138

Landfill and Environmental Remediation Liabilities — As we accept waste at our landfills, we incur
significant asset retirement obligations, which include liabilities associated with landfill final capping, closure
and post-closure activities. These liabilities are accounted for in accordance with authoritative guidance
associated with accounting for asset retirement obligations and are discussed in Note 3 of our Consolidated
Financial Statements. We also have liabilities for the remediation of properties that have incurred environmental
damage, which generally was caused by operations or for damage caused by conditions that existed before we
acquired operations or a site. We recognize environmental remediation liabilities when we determine that the
liability is probable and the estimated cost for the likely remedy can be reasonably estimated.
The following table reflects our landfill liabilities and our environmental remediation liabilities as of
December 31, 2014 and 2013, and summarizes significant changes in these amounts during 2014 (in millions):
Landfill Environmental Remediation
December 31, 2013 ............................. $1,421 $227
Obligations incurred and capitalized ............ 54 —
Obligations settled .......................... (69) (21)
Interest accretion ........................... 88 5
Revisions in estimates and interest rate
assumptions ............................. (9) 25
Acquisitions, divestitures and other adjustments . . (42) (1)
December 31, 2014 ............................. $1,443 $235
Landfill Costs and Expenses — As disclosed in the Operating Expenses section above, our landfill operating
costs include interest accretion on asset retirement obligations, interest accretion on and discount rate
adjustments to environmental remediation liabilities and recovery assets, leachate and methane collection and
treatment, landfill remediation costs, and other landfill site costs. The following table summarizes these costs for
each of the three years indicated (in millions):
Years Ended December 31,
2014 2013 2012
Interest accretion on landfill liabilities ..................... $ 88 $ 87 $ 84
Interest accretion on and discount rate adjustments to
environmental remediation liabilities and recovery assets .... 14 (10) 6
Leachate and methane collection and treatment .............. 84 77 67
Landfill remediation costs .............................. 9 10 —
Other landfill site costs ................................. 71 68 67
Total landfill operating costs ........................ $266 $232 $224
The comparison of these costs for the reported periods has been significantly affected by accounting for
changes in the risk-free discount rate that we use to estimate the present value of our environmental remediation
liabilities and environmental remediation recovery assets, which is based on the rate for U.S. Treasury bonds
with a term approximating the weighted-average period until settlement of the underlying obligations.
Amortization of landfill airspace, which is included as a component of “Depreciation and amortization”
expense, includes the following:
• the amortization of landfill capital costs, including (i) costs that have been incurred and capitalized and
(ii) estimated future costs for landfill development and construction required to develop our landfills to
their remaining permitted and expansion airspace; and
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