Waste Management 2014 Annual Report Download - page 99

Further, we often enter into agreements with landowners imposing obligations on us to meet certain
regulatory or contractual conditions upon site closure or upon termination of the agreements. Compliance with
these agreements inherently involves subjective determinations and may result in disputes, including litigation.
Costs to remediate or restore the condition of closed sites may be significant.
General economic conditions can directly and adversely affect our revenues and our income from
operations margins.
Our business is directly affected by changes in national and general economic factors that are outside of our
control, including consumer confidence, interest rates and access to capital markets. A weak economy generally
results in decreased consumer spending and decreases in volumes of waste generated, which decreases our
revenues. A weak market for consumer goods can significantly decrease demand by paper mills for recycled
corrugated cardboard used in packaging; such decrease in demand can negatively impact commodity prices and
our operating income and cash flows. In addition, we have a relatively high fixed-cost structure, which is difficult
to quickly adjust to match shifting volume levels. Consumer uncertainty and the loss of consumer confidence
may limit the number or amount of services requested by customers. Economic conditions may also limit our
ability to implement our pricing strategy. For example, many of our contracts have price adjustment provisions
that are tied to an index such as the Consumer Price Index, and our costs may increase in excess of the increase,
if any, in the Consumer Price Index.
Some of our customers, including governmental entities, have suffered financial difficulties affecting their
credit risk, which could negatively impact our operating results.
We provide service to a number of governmental entities and municipalities, some of which have suffered
significant financial difficulties in recent years, due in part to reduced tax revenue and/or high cost structures.
Some of these entities could be unable to pay amounts owed to us or renew contracts with us at previous or
increased rates.
Many non-governmental customers have also suffered serious financial difficulties, including bankruptcy in
some cases. Purchasers of our recyclable commodities can be particularly vulnerable to financial difficulties in
times of commodity price volatility. The inability of our customers to pay us in a timely manner or to pay
increased rates, particularly large national accounts, could negatively affect our operating results.
In addition, the financial difficulties of municipalities could result in a decline in investors’ demand for
municipal bonds and a correlating increase in interest rates. As of December 31, 2014, we had $501 million of
variable-rate tax-exempt bonds that are subject to repricing on either a daily or a weekly basis through a
remarketing process and $638 million of tax-exempt bonds with term interest rate periods that are subject to
repricing within the next twelve months. If the weakness in the municipal debt market results in repricing of our
tax-exempt bonds at significantly higher interest rates, we will incur increased interest expenses that may
negatively affect our operating results and cash flows.
We may be unable to obtain or maintain required permits or to expand existing permitted capacity of our
landfills, which could decrease our revenue and increase our costs.
Our ability to meet our financial and operating objectives depends in part on our ability to obtain and
maintain the permits necessary to operate landfill sites. Permits to build, operate and expand solid waste
management facilities, including landfills and transfer stations, have become more difficult and expensive to
obtain and maintain. Permits often take years to obtain as a result of numerous hearings and compliance
requirements with regard to zoning, environmental and other regulations. These permits are also often subject to
resistance from citizen or other groups and other political pressures. Local communities and citizen groups,
adjacent landowners or governmental agencies may oppose the issuance of a permit or approval we may need,
allege violations of the permits under which we currently operate or laws or regulations to which we are subject,
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