Waste Management 2015 Annual Report Download - page 87

and result in increased operating expenses and lower net income. If we are unable to negotiate acceptable
collective bargaining agreements, our operating expenses could increase significantly as a result of work
stoppages, including strikes. Any of these matters could adversely affect our financial condition, results of
operations and cash flows.
We could face significant liabilities for withdrawal from multiemployer pension plans.
We are a participating employer in a number of trustee-managed multiemployer, defined benefit pension
plans for employees who are covered by collective bargaining agreements. In the event of our withdrawal from
multiemployer pension plan, we may incur expenses associated with our obligations for unfunded vested benefits
at the time of the withdrawal. Depending on various factors, future withdrawals could have a material adverse
effect on results of operations or cash flows for a particular reporting period. We have previously withdrawn
several employee bargaining units from underfunded multiemployer pension plans, and we recognized related
expenses of $51 million in 2015, $4 million in 2014 and $5 million in 2013. See Notes 10 and 11 to the
Consolidated Financial Statements for more information related to our participation in multiemployer pension
plans.
Our business is subject to operational and safety risks, including the risk of personal injury to employees
and others.
Providing environmental and waste management services, including constructing and operating landfills,
involves risks such as truck accidents, equipment defects, malfunctions and failures. Additionally, we closely
monitor and manage landfills to minimize the risk of waste mass instability, releases of hazardous materials, and
odors that could be triggered by weather or natural disasters. There may also be risks presented by the potential
for subsurface chemical reactions causing elevated landfill temperatures and increased production of leachate,
landfill gas and odors. We also build and operate natural gas fueling stations, some of which also serve the public
or third parties. Operation of fueling stations and landfill gas collection and control systems involves additional
risks of fire and explosion. Any of these risks could potentially result in injury or death of employees and others,
a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for
pollution and other environmental damage, and property damage or destruction.
While we seek to minimize our exposure to such risks through comprehensive training, compliance and
response and recovery programs, as well as vehicle and equipment maintenance programs, if we were to incur
substantial liabilities in excess of any applicable insurance, our business, results of operations and financial
condition could be adversely affected. Any such incidents could also tarnish our reputation and reduce the value
of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced
scrutiny and regulation of our industry, with a corresponding increase in operating expense.
We have substantial financial assurance and insurance requirements, and increases in the costs of
obtaining adequate financial assurance, or the inadequacy of our insurance coverages, could negatively
impact our liquidity and increase our liabilities.
The amount of insurance we are required to maintain for environmental liability is governed by statutory
requirements. We believe that the cost for such insurance is high relative to the coverage it would provide and,
therefore, our coverages are generally maintained at the minimum statutorily-required levels. We face the risk of
incurring additional costs for environmental damage if our insurance coverage is ultimately inadequate to cover
those damages. We also carry a broad range of other insurance coverages that are customary for a company our
size. We use these programs to mitigate risk of loss, thereby enabling us to manage our self-insurance exposure
associated with claims. The inability of our insurers to meet their commitments in a timely manner and the effect
of significant claims or litigation against insurance companies may subject us to additional risks. To the extent
our insurers are unable to meet their obligations, or our own obligations for claims are more than we estimated,
there could be a material adverse effect to our financial results.
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