Waste Management 2015 Annual Report Download - page 72

collected, treatment requirements, risk of handling or disposal, frequency of collections, distance to final disposal
sites, the availability of airspace within the geographic region, labor costs and amount and type of equipment
furnished to the customer. We face intense competition in our Solid Waste business based on pricing and quality
of service. We have also begun competing for business based on breadth of service offerings. As companies,
individuals and communities look for ways to be more sustainable, we are investing in greener technologies and
promoting our comprehensive services that go beyond our core business of collecting and disposing of waste.
Seasonal Trends
Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher volume
of construction and demolition waste. The volumes of industrial and residential waste in certain regions where
we operate also tend to increase during the summer months. Our second and third quarter revenues and results of
operations typically reflect these seasonal trends.
Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes can
significantly affect the operating results of the affected Areas. On the other hand, certain destructive weather
conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our
operations in the Southern and Eastern U.S., can actually increase our revenues in the areas affected. While
weather-related and other “one-time” occurrences can boost revenues through additional work for a limited time,
as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively
lower margins.
Employees
At December 31, 2015, we had approximately 40,600 full-time employees, of which approximately 7,400
were employed in administrative and sales positions and the balance in operations. Approximately 8,200 of our
employees are covered by collective bargaining agreements.
Financial Assurance and Insurance Obligations
Financial Assurance
Municipal and governmental waste service contracts generally require contracting parties to demonstrate
financial responsibility for their obligations under the contract. Financial assurance is also a requirement for
(i) obtaining or retaining disposal site or transfer station operating permits; (ii) supporting variable-rate tax-
exempt debt and (iii) estimated final capping, closure, post-closure and environmental remedial obligations at
many of our landfills. We establish financial assurance using surety bonds, letters of credit, insurance policies,
trust and escrow agreements and financial guarantees. The type of assurance used is based on several factors,
most importantly: the jurisdiction, contractual requirements, market factors and availability of credit capacity.
Surety bonds and insurance policies are supported by (i) a diverse group of third-party surety and insurance
companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) wholly-owned insurance
subsidiary, National Guaranty Insurance Company of Vermont, the sole business of which is to issue surety
bonds and/or insurance policies on our behalf. Letters of credit generally are supported by our long-term U.S.
revolving credit facility (“$2.25 billion revolving credit facility”) and other credit facilities established for that
purpose.
Insurance
We carry a broad range of insurance coverages, including general liability, automobile liability, real and
personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability, business
interruption and other coverages we believe are customary to the industry. Our exposure to loss for insurance
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