Waste Management 2014 Annual Report Download - page 193

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We are still negotiating and litigating final resolutions of our withdrawal liability for certain previous
withdrawals. Except in the case of our withdrawals from the Central States Pension Plan, we do not believe any
additional liability above the charges we have already recognized for such previous withdrawals could be
material to the Company’s business, financial condition, liquidity, results of operations or cash flows. In addition
to charges recognized in prior years, we currently estimate that we could incur up to approximately $40 million
in future charges based on demands from representatives of the Central States Pension Plan. As a result, we do
not anticipate that the final resolution of the Central States Pension Plan matter could be material to the
Company’s business, financial condition or liquidity; however, such loss could have a material adverse effect on
our cash flows and, to a lesser extent, our results of operations, for a particular reporting period. Similarly, we
also do not believe that any future withdrawals, individually or in the aggregate, from the multiemployer pension
plans to which we contribute, could have a material adverse effect on our business, financial condition or
liquidity. However, such withdrawals could have a material adverse effect on our results of operations or cash
flows for a particular reporting period, depending on the number of employees withdrawn in any future period
and the financial condition of the multiemployer pension plan(s) at the time of such withdrawal(s).
Tax Matters — We participate in the IRS’s Compliance Assurance Process, which means we work with the
IRS throughout the year in order to resolve any material issues prior to the filing of our annual tax return. We are
currently in the examination phase of IRS audits for the tax years 2013, 2014 and 2015 and expect these audits to
be completed within the next three, 15 and 27 months, respectively. We are also currently undergoing audits by
various state and local jurisdictions for tax years that date back to 2009, with the exception of affirmative claims
in a limited number of jurisdictions that date back to 2000. We are also under audit in Canada for the tax years
2012 and 2013. In 2011, we acquired Oakleaf, which is subject to potential IRS examination for the year 2011.
Pursuant to the terms of our acquisition of Oakleaf, we are entitled to indemnification for Oakleaf’s pre-
acquisition period tax liabilities. We maintain a liability for uncertain tax positions, the balance of which
management believes is adequate. Results of audit assessments by taxing authorities are not currently expected to
have a material adverse impact on our results of operations or cash flows.
12. Restructuring
The following table summarizes pre-tax restructuring charges, including employee severance and benefit
costs and other charges, for the years ended December 31 for the respective periods (in millions):
2014 2013 2012
Solid Waste .............................................. $10 $ 7 $19
Wheelabrator ............................................. 1 1 3
Corporate and Other ........................................ 71 10 45
$82 $18 $67
2014 Restructuring — In August 2014, we announced a consolidation and realignment of several Corporate
functions to better support achievement of the Company’s strategic goals, including cost reduction. Voluntary
separation arrangements were offered to all salaried employees within these organizations. Approximately 650
employees have separated from our Corporate and recycling organizations in connection with this restructuring,
but we do not anticipate that all of these positions will be permanently eliminated.
During the year ended December 31, 2014 we recognized a total of $82 million of pre-tax restructuring
charges, of which $70 million was related to employee severance and benefit costs. The remaining charges were
primarily related to operating lease obligations for property that will no longer be utilized. We do not expect to
incur any material charges associated with our 2014 restructuring in future periods.
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