Waste Management 2014 Annual Report Download - page 139

• the amortization of asset retirement costs arising from landfill final capping, closure and post-closure
obligations, including (i) costs that have been incurred and capitalized and (ii) projected asset
retirement costs.
Amortization expense is recorded on a units-of-consumption basis, applying cost as a rate per ton. The rate
per ton is calculated by dividing each component of the amortizable basis of a landfill by the number of tons
needed to fill the corresponding asset’s airspace. Landfill capital costs and closure and post-closure asset
retirement costs are generally incurred to support the operation of the landfill over its entire operating life and
are, therefore, amortized on a per-ton basis using a landfill’s total airspace capacity. Final capping asset
retirement costs are related to a specific final capping event and are, therefore, amortized on a per-ton basis using
each discrete final capping event’s estimated airspace capacity. Accordingly, each landfill has multiple per-ton
amortization rates.
The following table presents our landfill airspace amortization expense on a per-ton basis:
Years Ended December 31,
2014 2013 2012
Amortization of landfill airspace (in millions) ............... $380 $400 $395
Tons received, net of redirected waste (in millions) ........... 96 93 92
Average landfill airspace amortization expense per ton ........ $3.96 $4.29 $4.30
Different per-ton amortization rates are applied at each of our 252 landfills, and per-ton amortization rates
vary significantly from one landfill to another due to (i) inconsistencies that often exist in construction costs and
provincial, state and local regulatory requirements for landfill development and landfill final capping, closure and
post-closure activities and (ii) differences in the cost basis of landfills that we develop versus those that we
acquire. Accordingly, our landfill airspace amortization expense measured on a per-ton basis can fluctuate due to
changes in the mix of volumes we receive across the Company year-over-year.
Liquidity and Capital Resources
We continually monitor our actual and forecasted cash flows, our liquidity and our capital resources,
enabling us to plan for our present needs and fund unbudgeted business activities that may arise during the year
as a result of changing business conditions or new opportunities. In addition to our working capital needs for the
general and administrative costs of our ongoing operations, we have cash requirements for: (i) the construction
and expansion of our landfills; (ii) additions to and maintenance of our trucking fleet and landfill equipment;
(iii) construction, refurbishments and improvements at materials recovery facilities; (iv) the container and
equipment needs of our operations; (v) final capping, closure and post-closure activities at our landfills; (vi) the
repayment of debt and discharging of other obligations and (vii) capital expenditures, acquisitions and
investments in support of our strategic growth plans. We also are committed to providing our shareholders with a
return on their investment through dividend payments, and we have also returned value to our shareholders
through share repurchases.
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