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They are based on facts and circumstances known to us as of the date the statements are made.
−Removed: All aspects of our business are subject to uncertainties, risks and other influences, many of which we do not control.
−Removed: Any of these factors, either alone or taken together, could have a material adverse effect on us and could change whether any forward-looking statement ultimately turns out to be true.
−Removed: Additionally, we assume no obligation to update any forward-looking statement as a result of future events, circumstances or developments.
The following discussion should be read together with the Consolidated Financial Statements and the notes thereto.
−Removed: Outlined below are some of the risks that we believe could affect our business and financial statements for 2021 and beyond and could cause actual results to be materially different from those that may be set forth in forward-looking statements made by the Company.
+Added: Outlined below are some of the risks that we believe could affect our business and financial statements for 2022 and beyond and could cause actual results to be materially different from those set forth in forward-looking statements made by the Company.
In addition to the following risks, there may be additional risks and uncertainties that adversely affect our business, performance, or financial condition in the future that are not presently known or are not currently believed to be material.
+Added: The Company continues to be optimistic about volume recovery and overall economic recovery from the impacts of the COVID-19 pandemic.
+Added: However, uncertainty remains with respect to various factors that influence the pace of economic recovery, including the risks discussed below and the potential for future resurgence in transmission of COVID-19 and related business closures due to virus variants or otherwise.
+Added: Such conditions could have an unanticipated adverse impact on our business.
+Added: We assume no obligation to update any forward-looking statement, whether as a result of future events, circumstances or developments or otherwise.
Strategy and Operational Risks
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● We may be unsuccessful in implementing improvements to operational efficiency and such efforts may not yield the intended result.
−Removed: ● We may not be able to maintain cost savings achieved through optimization efforts.
+Added: ● We may not be able to maintain cost savings achieved through optimization efforts, due to inflationary cost pressure or otherwise.
● Strategic decisions with respect to our asset portfolio may result in impairments to our assets.
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● Execution of our strategy, particularly growth through acquisitions, may cause us to incur substantial additional indebtedness, which may divert capital away from our traditional business operations and other financial plans.
+Added: ● As we complete the integration of our prior acquisition of Advanced Disposal Services, Inc.
+Added: (“Advanced Disposal”), we may not continue to realize the strategic benefits and cost synergies anticipated.
● We continue to seek to divest underperforming and non-strategic assets if we cannot improve their profitability.
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Even if we are able to implement some or all of the initiatives of our business strategy successfully, our operating results may not improve to the extent we anticipate, or at all.
−Removed: We may not realize the strategic benefits and cost synergies that are anticipated from our acquisition of Advanced Disposal Services, Inc.
−Removed: (“Advanced Disposal”), and we may encounter difficulties integrating Advanced Disposal’s operations and systems that could impact the effectiveness of our internal controls over financial reporting.
−Removed: The benefits that are expected to result from our acquisition of Advanced Disposal will depend, in part, on our ability to successfully integrate Advanced Disposal’s operations and systems and realize anticipated cost synergies.
−Removed: There is a significant degree of difficulty and management distraction inherent in the process of integrating an acquisition of this size.
−Removed: The process of integrating operations could cause business interruption and distraction.
−Removed: Some members of our management may be required to devote considerable time to this integration process, which will decrease the time they will have to manage our Company, service existing customers, attract new customers and develop new products or strategies.
−Removed: If management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business, financial condition and results of operations could suffer.
−Removed: The acquisition of Advanced Disposal may not result in realization of the benefits and cost synergies that we currently expect, and we cannot guarantee that these benefits and cost synergies will be achieved within anticipated time frames or at all.
−Removed: Additionally, we may incur substantial expenses in connection with the ongoing integration of Advanced Disposal, which may exceed expectations and offset certain benefits.
−Removed: As described further in Item 9A.
−Removed: Controls and Procedures , in accordance with SEC staff guidance, we have excluded Advanced Disposal from the assessment of the effectiveness of our internal control over financial reporting as of December 31, 2020 contained in this Annual Report on Form 10-K;
−Removed: however, this exclusion may not extend beyond one year from the October 30, 2020 closing date.
−Removed: We are in the process of integrating Advanced Disposal’s operations and systems to ensure the effectiveness of the internal control over financial reporting for this acquired business.
−Removed: Establishing, testing and maintaining an effective system of internal control over financial reporting requires significant resources and time commitments on the part of our management and our finance staff, and the time and expenditures needed may exceed our expectations.
−Removed: If we encounter difficulties integrating Advanced Disposal operations and systems into our system of internal control over financial reporting, and if we are unable to correct any issues encountered in a timely manner, our ability to record, process, summarize, and report financial data may be adversely affected, which may impact the accuracy,
−Removed: quality and completeness of our financial statements.
−Removed: Such failure could materially and adversely impact our business and subject us to potential investigations, liability, and penalties.
−Removed: Additionally, if we are unable to conclude that our internal control over financial reporting is effective in any future period (or if our auditors are unable to express an opinion on the effectiveness of our internal controls or conclude that our internal controls are ineffective), we could lose investor confidence and suffer an adverse effect on our stock price.
Our operations must comply with extensive existing regulations, and changes in regulations and/or enforcement of regulations can restrict or alter our operations, increase our operating costs, increase our tax rate, or require us to make additional capital expenditures.
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Regulations affecting the siting, design and closure of landfills require us, at times, to undertake investigatory or remedial activities, curtail operations or close landfills temporarily or permanently.
−Removed: We have significant financial obligations relating to final capping, closure, post-closure and environmental remediation at our existing landfills and we establish accruals for these estimated costs.
+Added: We have significant financial
+Added: obligations relating to final capping, closure, post-closure and environmental remediation at our existing landfills and we establish accruals for these estimated costs.
Expenditures could be accelerated or materially exceed our accruals due to the types of waste collected and manner in which it is transported and disposed of, including actions taken in the past by companies we have acquired or third-party landfill operators;
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new information about waste types previously collected, such as PFAS or other emerging contaminates, and other reasons.
−Removed: Various states have enacted, or are considering enacting, laws that restrict the disposal within the state of solid waste generated outside the state.
−Removed: From time to time, the U.S.
−Removed: Congress has considered legislation authorizing states to adopt regulations, restrictions, or taxes on the importation of out-of-state or out-of-jurisdiction waste.
−Removed: Additionally, several state and local governments have enacted “flow control” regulations, which attempt to require that all waste generated within the state or local jurisdiction be deposited at specific sites.
−Removed: Congress’ adoption of legislation allowing restrictions on interstate transportation of out-of-state or out-of-jurisdiction waste certain types of flow control, or courts’ interpretations of interstate waste and flow control legislation, could adversely affect our solid and hazardous waste management services.
Additionally, regulations establishing extended producer responsibility (“EPR”) are being considered or implemented in many places around the world, including in the U.S.
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A significant reduction in the waste, recycling and other streams we manage could have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: The regulatory environment in which we operate is influenced by changes in leadership at the federal, state, provincial and local levels.
−Removed: The policies set forth under the previous U.S.
−Removed: administration, for example, included substantial changes to foreign trade policy and generally were in favor of reducing regulation and corporate taxation.
−Removed: While it is anticipated that the new administration will reverse course on various regulatory policies impacting our Company, we cannot predict what impact the change in administrations will have on specific regulations, nor can we predict the timing of any such changes.
−Removed: It is likely that some policies adopted by the new administration will benefit us and others will negatively affect us.
Our business is subject to operational and safety risks, including the risk of personal injury to employees and others.
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These permits are also often subject to resistance from citizen or other groups and other political pressures.
−Removed: 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 subjected, or seek to impose liability on us for environmental damage.
−Removed: States and municipalities are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.
+Added: 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 subjected, or seek to impose liability on us for alleged environmental damage.
+Added: Federal, state and local governments are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.
These policies generally require permitting agencies to give heightened attention to the potential for projects to disproportionately impact low-income and minority communities.
Responding to permit challenges has, at times, increased our costs and extended the time associated with establishing new facilities and expanding existing facilities.
−Removed: In addition, failure to receive regulatory and zoning approval may prohibit us from establishing new facilities or expanding existing facilities.
+Added: In addition, failure to receive regulatory and zoning approval may prohibit us from establishing new facilities or
+Added: expanding existing facilities.
Our failure to obtain the required permits to operate our landfills could have a material adverse impact on our financial condition, results of operations and cash flows.
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Our operations require us to attract, hire, develop and retain a high-quality workforce to provide a superior customer experience.
−Removed: This includes key individuals in leadership and specialty roles, as well as a very large number of drivers,
−Removed: technicians and other front-line and back-office team members necessary to provide our environmental services.
+Added: This includes key individuals in leadership and specialty roles, as well as a very large number of drivers, technicians and other front-line and back-office team members necessary to provide our environmental services.
We experience significant competition to hire and retain individuals for certain front-line positions, such as commercial truck drivers, from within and outside our industry.
−Removed: Additionally, the market for employees that serve on our digital team is highly competitive.
+Added: (Also see Item 1A.
+Added: Risk Factors — Market disruption, including labor shortages and supply chain constraints, and macroeconomic pressures, including the heightened pace of inflation, have adversely impacted our business and results of operations .) Additionally, the market for employees that serve on our digital team is highly competitive.
As we have accelerated our investments in our digital platform, it is increasingly important that we are able to attract and retain employees with the skills and expertise necessary to implement and manage our technology-led strategy.
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We believe we have developed a reputation for high-quality service, reliability and social and environmental responsibility, and we believe our brand symbolizes these attributes.
−Removed: The Waste Management brand name, trademarks and logos and our reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting them.
−Removed: Adverse publicity, whether or not justified, relating to activities by our operations, employees or agents could tarnish our reputation and reduce the value of our brand.
−Removed: Damage to our reputation and loss of brand equity could reduce demand for our services.
−Removed: This reduction in demand, together with the dedication of time and expense necessary to defend our reputation, could have an adverse effect on our financial condition, liquidity and results of operations, as well as require additional resources to rebuild our reputation and restore the value of our brand.
+Added: The WM brand name, trademarks and logos and our reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting them.
+Added: Adverse publicity, whether or not justified, relating to activities by our operations, employees or agents, or challenges to our assertions of social and environmental responsibility, could tarnish our reputation and reduce the value of our brand.
+Added: Damage to our reputation could reduce demand for our services and potentially have an adverse effect on our financial condition, liquidity and results of operations, as well as require additional resources to rebuild our reputation and restore the value of our brand.
We have made significant investments in an extensive natural gas truck fleet, which makes us partially dependent on the availability of natural gas and fueling infrastructure and vulnerable to natural gas prices, and requirements to transition to other vehicle types could impair these investments.
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This is resulting in a reduction in tax incentives and grants for natural gas trucks.
−Removed: Although current options for heavy-duty electric vehicles lack sufficient range and proven experience for our operations, we proactively engage in pilots of electric powered heavy duty vehicles and anticipate that we could redirect future planned capital investments in our fleet toward these assets when the vehicles prove economically and operationally viable.
+Added: Although current options for heavy-duty electric vehicles lack sufficient range and proven experience for our operations,
+Added: we are proactively engaging in pilots of electric powered heavy-duty vehicles and anticipate that we could redirect future planned capital investments in our fleet toward these assets when the vehicles prove economically and operationally viable.
Should regulation mandate an accelerated transition to electric powered vehicles, our cost to acquire vehicles needed to service our customers could increase, capital investment required to establish sufficient charging infrastructure could be significant and investments we have made in an industry-leading natural gas fleet and infrastructure could be impaired.
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Labor unions continually attempt to organize our employees, and these efforts will likely continue in the future.
−Removed: Certain groups of our employees are currently represented by unions, and we have negotiated collective bargaining
−Removed: agreements with these unions.
+Added: Certain groups of our employees are currently represented by unions, and we have negotiated collective bargaining agreements with these unions.
Additional groups of employees may seek union representation in the future, and, if successful, would enhance organized labor’s leverage to obtain higher than expected wage and benefits costs and resist the introduction of new technology and other initiatives, which can result in increased operating expenses and lower net income.
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Any of these matters could adversely affect our financial condition, results of operations and cash flows.
−Removed: The seasonal nature of our business, severe weather events resulting from climate change and event driven special projects cause our results to fluctuate, and prior performance is not necessarily indicative of our future results.
+Added: The seasonal nature of our business, severe weather events resulting from climate change and event driven special projects cause our results to fluctuate, and prior performance may not be indicative of our future results.
Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher construction and demolition waste volumes.
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Our second and third quarter revenues and results of operations typically reflect these seasonal trends.
−Removed: Service disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the Areas affected.
+Added: Service disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the geographic areas affected.
On the other hand, certain destructive weather and climate conditions, such as wildfires in the Western U.S.
and hurricanes that most often impact our operations in the Southern and Eastern U.S.
−Removed: during the second half of the year, can increase our revenues in the Areas affected as a result of the waste volumes generated by these events.
+Added: during the second half of the year, can increase our revenues in the geographic areas affected as a result of the waste volumes generated by these events.
While weather-related and other event driven special projects can boost revenues through additional work for a limited time, due to significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.
−Removed: For these and other reasons, operating results in any interim period are not necessarily indicative of operating results for an entire year, and operating results for any historical period are not necessarily indicative of operating results for a future period.
+Added: For these and other reasons, operating results in any period may not be indicative of operating results for any other period.
Our stock price may be negatively impacted by interim variations in our results.
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The COVID-19 global pandemic has caused a significant disruption in social and commercial activity throughout North America, and the continuation of the COVID-19 pandemic, or other similar pandemic conditions, may have a material adverse impact on our business, financial condition, results of operations and cash flows.
−Removed: During 2020 and continuing into 2021, federal, state and local governments throughout North America have imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of COVID-19.
+Added: During 2020 and continuing into 2021, federal, state and local governments throughout North America imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of COVID-19.
The pandemic and related measures have had a significant adverse impact on many sectors of the economy, including environmental services.
−Removed: The resulting business closures, increases in unemployment and loss of consumer financial stability and confidence has resulted in volume declines and reductions in customers’ waste service needs, which has negatively impacted our results of operations and cash flows.
−Removed: We have incurred costs related to health, safety and financial security of our workforce during the COVID-19 pandemic.
−Removed: This included transitioning back-office employees to work-from-home and providing financial certainty to employees by guaranteeing all full-time hourly employees compensation for a 40-hour work week regardless of service decreases and reduced work schedules that resulted from the COVID-19 pandemic.
−Removed: It could be necessary for us to incur additional such costs in the future related to pandemic conditions.
−Removed: If a large portion of our employee base were to become ill, it could impact our ability to provide timely and reliable service.
−Removed: Additionally, the transition of most of our back-office employees to work-from-home increases various operational risks, including potential exposure to cyber incidents, loss of data, fraud, internal control challenges and other disruptions as a consequence of more employees accessing Company systems and information remotely in the course of their ordinary work.
−Removed: A broad-based economic slowdown resulting from prolonged negative effects of COVID-19 could have significant adverse consequences for the financial condition of our customers or suppliers.
−Removed: As a result, customers may seek to reduce service levels or terminate our contracts, or they may be unable to timely pay outstanding receivables owed to us, each of which would adversely affect our results of operations and cash flows.
−Removed: Additionally, such factors have made it more challenging to implement our pricing strategy and are likely to negatively impact our ability to negotiate, renew or expand service contracts with acceptable margins.
−Removed: Volume changes can fluctuate dramatically by line of business and decreases in volumes in higher margin businesses, such as what we have seen with COVID-19, can impact key financial metrics.
−Removed: Additionally, as stay-at-home orders and work from home trends continue, the costs to service our residential customers could continue to negatively impact our margins.
−Removed: To the extent our suppliers experience a deterioration in financial condition or operational capability as a result of the impacts of COVID-19, we may experience material supply chain disruptions and delays, which could also increase our operating costs.
−Removed: We are not able to estimate the full impact of COVID-19 on our business, but we expect that this situation will continue to have an adverse impact on the economy in general and on the Company’s results of operations until a substantial portion of the U.S.
−Removed: population is vaccinated and social distancing restrictions are lifted.
−Removed: Should these or similar pandemic-related conditions persist for a prolonged period, it may have a material adverse impact on our financial condition, results of operations and cash flows and hinder our ability to grow our business and execute our business strategy.
+Added: The initial business closures and negative impact on general economic conditions resulted in volume declines and reductions in customers’ waste service needs, which negatively impacted our results of operations and cash flows.
+Added: In particular, COVID-19 caused decreases in volumes in higher margin businesses, impacting key financial metrics.
+Added: Throughout 2021, our volumes recovered from the sharp decline experienced in April 2020, with minimal impact from the resurgence in transmission of COVID-19 associated with recent virus variants, as communities and businesses remained open.
+Added: However, uncertainty remains with respect to various factors that influence the pace of economic recovery, including factors discussed in the two risk factors immediately below.
+Added: The potential for future resurgence in transmission of COVID-19 and related business closures, due to COVID-19 variants or other pandemic conditions, could adversely impact our volumes and costs in the future.
+Added: If such conditions were to deepen and extend the broad-based economic slow-down, it may have a material adverse impact on our financial condition, results of operations and cash flows and hinder our ability to grow our business and execute our business strategy.
+Added: Additionally, if a large portion of our employee base were to become ill, it could impact our ability to provide timely and reliable service.
+Added: Governmental regulations requiring mandatory COVID-19 vaccination of employees could adversely impact our ability to perform or compete for certain contracts and negatively affect our results of operations.
+Added: In September 2021, President Biden issued an executive order requiring all employers with U.S.
+Added: government contracts to ensure that their U.S.-based employees, contractors and subcontractors that work on or in support of U.S.
+Added: government contracts, with some exceptions, to be fully vaccinated against COVID-19.
+Added: We are currently party to certain service agreements with the U.S.
+Added: The vaccine mandate is facing legal challenges and currently is enjoined nationwide.
+Added: In November 2021, OSHA announced an Emergency Temporary Standard (“ETS”) mandating either full vaccination against COVID-19 or weekly testing of employees for employers with 100 or more employees;
+Added: however, the agency withdrew the ETS in January 2022 following an unfavorable decision by the U.S.
+Added: Supreme Court.
+Added: OSHA has indicated that it will continue to pursue the vaccine and testing requirements of the ETS through the traditional rulemaking process, and additional vaccine mandates may be announced in jurisdictions in which our businesses operate.
+Added: We cannot currently predict the impact of any such vaccine requirements on our workforce, although implementation may result in our inability to perform or compete for certain contracts, as well as significant cost, operational disruption, attrition and difficulty securing future labor needs in the already-constrained labor market.
+Added: Market disruption, including labor shortages and supply chain constraints, and macroeconomic pressures, including the heightened pace of inflation, have adversely impacted our business and results of operations.
+Added: Certain macroeconomic pressures and market disruption, driven in part by the COVID-19 pandemic, intensified during the second half of 2021 and are continuing.
+Added: The constrained labor market has resulted in increased costs for wage adjustments, overtime hours and training new hires to address operational challenges servicing customers.
+Added: The COVID-19 pandemic and the constrained labor market have also contributed to significant global supply chain disruption and inflationary pressure for the goods and services we purchase, with a particular impact on our repair and maintenance costs.
+Added: Supply chain constraints have also caused delayed delivery of fleet, steel containers and other purchases.
+Added: Aspects of our business rely on third-party transportation providers, and such services have become more limited and expensive.
+Added: Additionally, we are currently experiencing margin pressures from commodity-driven business impacts, particularly from recycling brokerage rebates and higher fuel prices.
+Added: The extent and duration of the impact of these labor market, supply chain and transportation challenges are subject to numerous factors, including the continuing impact of the COVID-19 pandemic;
+Added: size, location and qualifications of the labor pool;
+Added: behavioral changes;
+Added: wage and price structures;
+Added: adoption of new or revised regulations;
+Added: and broader macroeconomic conditions.
+Added: If we are not able to overcome limitations on labor availability, it could materially impact our ability to service our customers and our financial results.
+Added: Accelerated and pronounced economic pressures, such as the recent inflationary cost pressures on labor and the goods and services we rely upon to deliver service to our customers, have had and continue to have a significant impact on our cost structure and capital expenditures.
+Added: Significant components of our operating expenses vary directly as we experience changes in revenue due to volume and a heightened pace of inflation, and we may not be able to dynamically manage our cost structure in response to such changes.
+Added: A significant portion of our revenue is tied to a price escalation index with a lookback provision, resulting in a timing lag in our ability to recover increased costs under those contracts during this period of rapid inflation.
+Added: Separately, for many of our customers we provide services under multi-year contracts that can restrict our ability to increase prices and the timing of such increases.
+Added: Our overall strategic pricing efforts are focused on recovering as much of the inflationary cost increases we experience in our business as possible by increasing our average unit rate, but such efforts may not be successful for various reasons including the pace of inflation, operating cost inefficiencies, contractual limitations, and market responses.
+Added: The inability to adequately increase prices to offset increased
+Added: costs and inflationary pressures, or otherwise mitigate the impact of these macroeconomic conditions and market disruptions on our business, will increase our costs of doing business and reduce our margins.
+Added: If such impacts are prolonged and substantial, they could have a material negative effect on our results of operations.
The waste industry is highly competitive, and if we cannot successfully compete in the marketplace, our business, financial condition and operating results may be materially adversely affected.
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Enforcement or implementation of foreign and domestic regulations can affect our ability to export products.
−Removed: In 2017, the Chinese government announced bans on certain scrap materials and begun to enforce extremely restrictive quality and other requirements, which significantly reduced China’s import of recyclables.
−Removed: As of January 1, 2021, China ceased importing virtually all recyclables, including those exported by us.
−Removed: Many other markets, both domestic and foreign, have also tightened their quality expectations and limited or restricted the import of certain recyclables.
−Removed: As an example, on January 1, 2021, new restrictions on the trade of most plastics went into effect as part of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.
−Removed: is not a party to the Basel Convention, but most countries to which we export are, which may limit exports of certain plastics.
−Removed: Such trade restrictions have disrupted the global trade of recyclables, particularly fiber, creating excess supply and decreasing recyclable commodity prices.
−Removed: We have been actively working to identify alternative markets for recycling commodities, but there may not be demand for all of the material we produce.
−Removed: The heightened quality requirements have been difficult for the industry to achieve and have driven up operating costs.
−Removed: In particular, single-stream MRFs process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, which results in increased
−Removed: processing and residual disposal costs to achieve quality standards.
−Removed: As recyclable commodity prices have fallen and operating costs have increased, we and other recyclers are passing cost increases through to customers.
−Removed: The resulting price increase for recycling services in communities and at businesses in the U.S.
−Removed: has resulted in some customers reducing or eliminating their recycling service.
−Removed: COVID-19 placed additional financial stress on municipalities, resulting in recycling programs being paused or eliminated.
−Removed: When combined with the impacts of the global markets shifts caused by China’s termination of imports, the most recent financial stress has led to a number of states considering EPR regulations.
−Removed: Reductions in market prices for recycling commodities, and reduction in demand for recycling commodities and recycling services, negatively impacted our operating income and cash flows in 2019.
−Removed: The decline in market prices in 2019 for recycling commodities resulted in a decrease in revenue of $248 million.
−Removed: In 2020, we saw a modest recovery in commodity prices due in part to an increased demand for recycled materials, resulting in increased revenue of $75 million.
−Removed: As we have increased the size of our recycling operations, we have also increased our exposure to commodity price fluctuations.
−Removed: Additionally, future regulation, tariffs, international trade policies or initiatives may result in further reduced demand or increased operating costs, which would cause the profitability of our recycling operations to decline.
+Added: Attention on waste in the environment has led to new international laws restricting the flow of certain recyclables.
+Added: As an example, on January 1, 2021, new restrictions on the international trade of most plastics went into effect as part of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.
+Added: At this time, the U.S.
+Added: is not a party to the Basel Convention, but most countries to which we export commodities are, which may limit our ability to export certain plastics.
+Added: In recent years, changes in regulations affecting the international flow of recyclables, have led to a reduction in export activity for recyclables, higher quality requirements and higher processing costs.
+Added: COVID-19 placed additional financial stress on recyclers and municipalities, resulting in some recycling programs being paused or eliminated.
+Added: These changes have led to a number of states considering EPR regulations.
+Added: Prices and demand for recyclables fluctuate.
+Added: Recycling revenue increased $537 million and $75 million in 2021 and 2020, respectively, as compared with the prior year periods primarily from higher market prices for recycling commodities.
+Added: To support recent increases in both quality requirements and demand for commodities, we have increased our investment in recycling infrastructure and the size of our recycling operations.
+Added: This, in turn, increases our exposure to commodity price fluctuations.
+Added: Additionally, future regulation, tariffs, international trade policies or other initiatives may impact supply and demand of material, or increase operating costs, which could impact the profitability of our recycling operations.
Fluctuation in energy prices also affects our business, including recycling of plastics manufactured from petroleum products.
−Removed: Significant variations in the price of methane gas, electricity and other energy-related products that are marketed and sold by our landfill gas recovery operations can result in a corresponding significant impact to our revenue from yield from such operations.
+Added: Significant variations in the price of biogas, electricity and other energy-related products that are marketed and sold by our landfill gas recovery operations can result in a corresponding significant impact to our revenue from yield from such operations.
Additionally, we provide specialized disposal services for oil and gas exploration and production operations through our EES business.
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Our customers are increasingly diverting waste to alternatives to landfill disposal, such as recycling and composting, while also working to reduce the amount of waste they generate.
−Removed: In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of waste, such as yard waste, food waste and electronics at landfills.
−Removed: Where such organic waste is not banned from the landfill, some large customers such as grocery stores and restaurants are choosing to divert their organic waste from landfills.
+Added: In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of materials at landfills, such as recyclables (cardboard, bottles and cans), yard waste, food waste and electronics.
+Added: Where organic waste is not banned from the landfill, some large customers such as grocery stores and restaurants are choosing to divert their organic waste from landfills.
Zero-waste goals (sending no waste to the landfill) have been set by many of the U.S.
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Our landfills currently provide our highest income from operations margins.
−Removed: If we are not successful in expanding our service offerings, growing lines of businesses to service waste streams that do not go to landfills providing services for customers that wish to reduce waste entirely, then our revenues and operating results may decline.
+Added: If we are not successful in expanding our service offerings, growing lines of businesses to service waste streams that do not go to landfills, and providing alternative services for customers that wish to reduce waste entirely, then our revenues and operating results may decline.
Additionally, despite the development of new service offerings and lines of business, it is possible that our revenues and our income from operations margins could be negatively affected due to disposal alternatives.
With a heightened awareness of the global problems caused by plastic waste in the environment, an increasing number of cities and states across the country have passed ordinances banning certain types of plastics from sale or use.
−Removed: The most common materials banned include plastic straws, polystyrene plastic and single use packaging.
−Removed: These bans have increased pressure by manufacturers on our recycling facilities to accept a broader array of materials in curbside recycling programs to alleviate public pressures to ban the sale of those materials.
−Removed: However, there are currently no viable end markets for recycling these materials, and inclusion of such materials in our recycling stream increases contamination and operating costs and can negatively affect the results of our recycling operations.
+Added: The most common materials banned include plastic bags and straws, polystyrene plastic and some types of single use packaging.
+Added: These bans have increased pressure by manufacturers on our recycling facilities to accept a broader array of materials in curbside recycling and composting programs to alleviate public pressures to ban the sale of those materials.
+Added: However, there are currently no viable end markets for recycling many of these materials, and inclusion of such materials in our recycling stream increases contamination and operating costs that can negatively affect the results of our recycling operations.
General economic conditions can directly and adversely affect revenues for environmental services 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.
−Removed: A weak economy generally results in
−Removed: decreased consumer spending and decreases in volumes of waste generated, which negatively impacts the ability to grow through new business or service upgrades, and may result in customer turnover and reduction in customers’ waste service needs.
+Added: A weak economy generally results in decreased consumer spending and decreases in volumes of waste generated, which negatively impacts the ability to grow through new business or service upgrades, and may result in customer turnover and reduction in customers’ waste service needs.
Consumer uncertainty and the loss of consumer confidence may also reduce the number and variety of services requested by customers.
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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.
−Removed: As of December 31, 2020, we had $1.2 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months and $54 million of variable-rate tax-exempt bonds with interest rates reset on either a daily or a weekly basis.
+Added: As of December 31, 2021, we had $645 million of tax-exempt bonds with term interest rate periods that expire within the next 12 months and $54 million of variable-rate tax-exempt bonds with interest rates reset on a weekly basis.
If market dynamics resulted in repricing of our tax-exempt bonds at significantly higher interest rates, we would incur increased interest expenses that may negatively affect our operating results and cash flows.
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corporate statutory tax rate and eliminated or limited the deduction of several expenses that were previously deductible, among other things.
−Removed: The results of the 2020 U.S.
−Removed: federal elections could lead to further changes in tax laws that would negatively impact the Company’s effective tax rate.
−Removed: The new presidential administration has provided information on what tax law changes it is likely to support, including increasing the U.S.
+Added: However, future changes in tax laws could reverse the impacts of the Tax Act, and the current presidential administration has previously indicated support for increasing the U.S.
corporate statutory tax rate.
−Removed: If ultimately enacted into law, this could materially impact our tax provision, cash tax liability and effective tax rate.
+Added: If ultimately enacted into law, such an increase could materially impact our tax provision, cash tax liability, effective tax rate and net deferred tax liabilities.
Significant shortages in diesel fuel supply or increases in diesel fuel prices will increase our operating expenses.
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We need diesel fuel to run a significant portion of our collection and transfer trucks and our equipment used in our landfill operations.
−Removed: Supply shortages could substantially increase our operating expenses.
−Removed: Additionally, if fuel prices
−Removed: increase, our direct operating expenses increase and many of our vendors raise their prices to offset their own rising costs.
+Added: Fuel supply shortages and price increases could substantially increase our operating expenses.
We have in place a fuel surcharge program, designed to offset increased fuel expenses;
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Our existing and proposed service offerings to customers require that we invest in, develop or license, and protect new technologies.
−Removed: Our Company and others are increasingly focusing on new technologies that innovate our operations, improve the customer experience and provide alternatives to traditional disposal and maximize the resource value of waste.
−Removed: In 2020, we are continuing our multi-year commitment to strategic investments in technology, including accelerated investments in customer service digitalization.
+Added: Our Company and others are increasingly focusing on new technologies that innovate our operations,
+Added: improve the customer experience and provide alternatives to traditional disposal and maximize the resource value of waste.
+Added: We are continuing our multi-year commitment to strategic investments in technology, including accelerated investments in customer service digitalization.
Research, development and implementation of enhanced technology often requires significant spending that may divert capital investment away from our traditional business operations.
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Inabilities and delays in implementing new systems can also affect our ability to realize projected cost savings or other benefits.
−Removed: Additionally, any system failures could impede our ability to timely collect and report financial results in accordance with applicable laws and regulations.
−Removed: We are implementing a new enterprise resource planning system, and challenges with the implementation of the system may impact our business and operations.
−Removed: We are in the process of a complex, multi-year implementation of a new enterprise resource planning (“ERP”) system.
−Removed: The ERP system implementation requires the integration of the new ERP system with multiple new and existing information systems and business processes and is designed to accurately maintain our books and records and provide information to our management team important to the operation of the business.
−Removed: Such an implementation is a major
−Removed: undertaking from a financial, management, and personnel perspective.
−Removed: The implementation of the ERP system may prove to be more difficult, costly, or time consuming than expected, and it is possible that the system will not yield the benefits anticipated.
−Removed: Any disruptions, delays or deficiencies in the design and implementation of our new ERP system could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations, resulting in negative impacts on our business and operations and subject us to potential liability.
−Removed: Additionally, our implementation of the ERP system involves greater utilization of third-party “cloud” computing services in connection with our business operations.
+Added: Significant system failures could impede our ability to timely collect and report financial results in accordance with applicable laws and regulations.
+Added: Employee work-from-home arrangements prompted by the COVID-19 pandemic increase various technology risks, including potential exposure to cyber incidents, loss of data, fraud, internal control challenges and other disruptions as a consequence of more employees accessing Company systems and information remotely in the course of their ordinary work.
+Added: We are implementing a new enterprise resource planning and human capital management system, and challenges with the implementation of the system may impact our business and operations.
+Added: We are in the process of a complex, multi-year implementation of a new enterprise resource planning and human capital management (“ERP/HCM”) system.
+Added: The ERP/HCM system implementation requires the integration of the new system with multiple new and existing information systems and business processes and is designed to accurately maintain our books and records and provide information to our management team important to the operation of the business.
+Added: Such an implementation is a major undertaking from a financial, management, and personnel perspective, and we have made interim adjustments to our implementation timeline to accommodate aspects that have proven more difficult, or time consuming than initially predicted.
+Added: Any material disruptions, delays, deficiencies or cost increases associated with the design and implementation of our new ERP/HCM system could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations, resulting in negative impacts on our business and operations and subject us to potential liability.
+Added: Additionally, our implementation of the ERP/HCM system involves greater utilization of third-party “cloud” computing services in connection with our business operations.
Problems faced by us or our third-party providers, including technological or business-related disruptions, as well as cybersecurity threats, could adversely impact our business, results of operations and financial condition for future periods.
−Removed: A cybersecurity incident could negatively impact our business and our relationships with customers, vendors and employees and expose us to increased liability.
+Added: Significant cybersecurity incidents negatively impact our business and our relationships with customers, vendors and employees and expose us to increased liability.
Substantially all aspects of our business operations rely on digital technology.
−Removed: We use computers, mobile devices, social networking and other online platforms to connect with our employees and our customers.
+Added: We use computers, mobile devices, social networking and other online platforms to connect with our employees, customers, and vendors.
These uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information.
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Cyber intrusions require a significant amount of time and effort to assess and remedy, and our incident response efforts may not be effective in all cases.
−Removed: The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, direct financial loss, negative publicity, brand damage, alleged violation of privacy laws, loss of customers, potential regulatory enforcement or private litigation liability and competitive disadvantage.
+Added: The Company experienced a cyber intrusion in the first quarter of 2021 that was promptly detected, and the third-party software vulnerability was quickly remediated.
+Added: There was no impact to the Company’s operations, services or financial statements.
+Added: A subsidiary of WMI provided notice to potentially affected individuals, U.S.
+Added: state and federal regulators, and Canadian regulators.
+Added: As a result of the cyber intrusion, regulatory investigations may result in costs, fines, penalties, or other obligations.
+Added: Additionally, a subsidiary of WMI is party to a class action case related to this incident.
+Added: The Company intends to vigorously defend itself against any such proceedings and does not expect that the outcome of any proceedings related to the 2021 incident will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows;
+Added: however, assessing and responding to this intrusion required a significant amount of time and management attention.
+Added: An incident that results in a material theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or material interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, direct financial loss, negative publicity, brand damage, alleged violation of privacy laws, loss of customers, potential regulatory enforcement or private litigation liability and competitive disadvantage.
While we do maintain insurance for cyber incidents, due to policy terms, limits and exclusions, it may not apply in all cases, and it may not be adequate to cover all liabilities incurred.
−Removed: Further, as the Company pursues its strategy to grow through acquisitions, including our recent acquisition of Advanced Disposal, and to pursue new initiatives that improve our operations and cost structure, the Company is also expanding and improving its information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
+Added: As the Company pursues its strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, the Company is also expanding and improving its information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
Certain new technologies, such as use of autonomous vehicles, remote-controlled equipment and virtual reality, present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation.
If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks.
+Added: Increased regulation by state and federal governments related to cybersecurity protections and disclosures may require additional resources for compliance, and any inability, or perceived inability, to adequately address new requirements could subject us to regulatory enforcement, private litigation, public criticism, disrupt our operations, cause us to lose customers, result in additional costs and legal liability, damage our reputation, and otherwise harm our business.
Increasing regulatory focus on privacy and data protection issues and expanding laws could negatively impact our business, subject us to criticism and expose us to increased liability.
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Government officials, regulators, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data.
−Removed: We must continually monitor the development and adoption of new and emerging laws and regulations, such as the California Consumer Privacy Act (“CCPA”) that took effect on January 1, 2020.
−Removed: The CCPA, among other things, contains disclosure obligations for businesses that collect personal information about California residents and affords those individuals new rights relating to their personal information that can expand the scope of our potential liability.
−Removed: We must commit substantial time and resources toward compliance with
−Removed: the CCPA and similar laws and regulations.
+Added: We must continually monitor the development and adoption of new and emerging laws and regulations and commit substantial time and resources towards compliance with new laws and regulations.
+Added: These laws provide disclosure obligations for businesses that collect personal information, individual rights relating to personal information, collection and storage requirements, automated decision-making transparency, and potential liability expansion.
Any inability, or perceived inability, to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations, including at newly acquired companies, could subject us to regulatory enforcement, private litigation, public criticism, disrupt our operations, cause us to lose customers, result in additional costs and legal liability, damage our reputation, and otherwise harm our business.
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Under current law, we could also be held liable for damage caused by conditions that existed before we acquired the assets or operations involved and for conditions resulting from waste types or compounds previously considered non-hazardous but later determined to present possible threat to public health or the environment.
−Removed: The risks of successor liability and emerging contaminants are of particular concern as we execute our growth strategy, partially though acquisitions, because we may be unsuccessful in identifying and assessing potential liabilities during our due diligence investigations.
+Added: The risks of successor liability and emerging contaminants are of particular concern as we execute our growth strategy, partially through acquisitions, because we may be unsuccessful in identifying and assessing potential liabilities during our due diligence investigations.
Further, the counterparties in such transactions may be unable to perform their indemnification obligations owed to us.
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In the ordinary course of our business, we have in the past, we are currently, and we may in the future, become involved in legal and administrative proceedings relating to land use and environmental laws and regulations.
−Removed: These include proceedings in which governmental entities, private groups or individuals seek to impose liability on us for environmental damage or violation of statutes or desire to revoke or deny permits required for our operations.
+Added: These include proceedings in which governmental entities, private groups or individuals seek to impose liability on us for alleged environmental damage or violation of statutes or desire to revoke or deny permits required for our operations.
We generally seek to work with the authorities or other persons involved in these proceedings to resolve any issues raised.
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Costs to remediate or restore the condition of closed sites may be significant.
−Removed: Changes in regulations applicable to oil and gas exploration, production and disposal could adversely affect our EES business.
−Removed: Our EES business provides specialized environmental management and disposal services for fluids used and wastes generated by customers engaged in oil and gas exploration and production, and these disposal services include the use of underground injection wells.
−Removed: Demand for these services is adversely affected if drilling activity slows due to regulation and industry conditions beyond our control, in addition to changes in oil and gas prices.
−Removed: There is heightened federal regulatory focus on emissions of methane that occur during drilling and transportation, as well as state attention to protective disposal of drilling residuals.
−Removed: There also remains heightened attention from the public, some states and the EPA to the alleged potential for hydraulic fracturing that occurs during drilling to impact drinking water supplies.
−Removed: Increased regulation of oil and gas exploration and production, including GHG emissions or hydraulic fracturing, could make it more difficult or cost-prohibitive for our EES customers to continue operations, adversely affecting our business.
−Removed: Additionally, any new regulations regarding the treatment and disposal of wastes associated with exploration and production operations, including through the use of injection wells, could increase our costs to provide oilfield services and reduce our margins and revenue from such services.
−Removed: Conversely, any loosening of regulations regarding how such wastes are handled or disposed of could adversely impact demand for our EES services.
−Removed: Changes to federal and state renewable fuel policies could affect our financial performance in that sector as a renewable fuel producer.
+Added: Changes to federal and state renewable fuel policies could affect our financial performance in that sector as a renewable fuel producer and impact our projected future investments.
The primary drivers of renewable fuel development at our landfills are federal and state incentive programs, such as the federal RFS program and the California Low Carbon Fuel Standard.
At the federal level, oil refiners and importers are required through the RFS program to blend specified volumes of renewable transportation fuels with gasoline or buy credits, referred to as RINs, from renewable fuel producers.
−Removed: The Company has invested, and continues to invest, in facilities that capture and convert landfill gas into renewable natural gas so that we can participate in the program.
−Removed: The value of the RINs associated with our landfill gas is set through a market established by the program.
+Added: The Company has invested, and continues to invest, in facilities that capture and convert landfill and dairy digester gas into renewable natural gas so that we can participate in the program, and the Company has stated its intention to grow its asset base to notably increase its RNG production by 2026.
+Added: RINs prices generally respond to regulations enacted by the EPA or other regulatory bodies, as well as fluctuations in supply and demand.
+Added: The value of the RINs associated with renewable natural gas is set through a market established by the program.
Each year, the EPA is required to finalize a rule establishing refiners’ obligations to purchase renewable natural gas and other cellulosic biofuels under the RFS program.
Market uncertainty stemming from these annual rulemakings, as well as the EPA’s administration of other aspects of the RFS program, led to a rapid decline in RIN values in 2019 and much of 2020 before rebounding in November 2020.
−Removed: We will continue to advocate for the new administration to implement policies that ensure long-term stability for renewable transportation fuels, as changes in the RFS market or the structure of the RFS program can and has reduced the value of renewable natural gas RINs and negatively impacted the financial performance of the facilities constructed to capture and treat the gas.
+Added: We will continue to advocate for the current administration to implement policies that ensure long-term stability for renewable transportation fuels.
+Added: Changes in the RFS market, the structure of the RFS program or RINs prices and demand can and has impacted the financial performance of the facilities constructed to capture and treat the gas and could impact or alter our projected future investments.
The impact of climate change, and the adoption of climate change legislation or regulations restricting emissions of greenhouse gases, could increase our costs to operate.
We continue to assess the physical risks to our operations from the effects of climate change.
−Removed: Although we have made investments to mitigate risk associated with severe storm events, damage to our facilities or disruption of service caused by more frequent or more severe storms associated with climate extremes could negatively impact operating results.
+Added: Although we have made investments to mitigate risk associated with severe storm events, damage to our facilities or disruption of service caused
+Added: by more frequent or more severe storms associated with climate extremes could negatively impact operating results.
We have also identified risk to our assets and our employees associated with drought or water scarcity, flooding, extreme heat and rain events, and fire conditions associated with climate change.
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Should comprehensive federal climate change legislation be enacted, we expect it could impose costs on our operations that might not be offset by the revenue increases associated with our lower-carbon service options, the materiality of which we cannot predict.
−Removed: In 2010, the EPA published a Prevention of Significant Deterioration and Title V GHG Tailoring Rule, which expanded the EPA’s federal air permitting authority to include the six GHGs.
−Removed: The rule sets new thresholds for GHG emissions that define when Clean Air Act permits are required.
−Removed: The current requirements of these rules have not significantly affected our operations or cash flows, due to the tailored thresholds and exclusions of certain emissions from regulation.
−Removed: However, future GHG regulations may require landfill gas emission quantification and/or emission reduction requirements beyond what is currently required, and such amendments could have an adverse effect on our operating costs.
We could be subject to significant fines and penalties, and our reputation could be adversely affected, if our businesses, or third parties with whom we have a relationship, were to fail to comply with U.S.
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Foreign Corrupt Practices Act, and with applicable local laws of the foreign countries in which we operate, and we monitor our local partners’ compliance with such laws as well.
−Removed: Our reputation may be adversely affected if we were reported to be associated with corrupt practices
−Removed: or if we or our local partners failed to comply with such laws.
−Removed: Such damage to our reputation could adversely affect our ability to grow our business.
+Added: Our reputation may be adversely affected if we were reported to be associated with corrupt practices or if we or our local partners failed to comply with such laws.
Additionally, violations of such laws could subject us to significant fines and penalties.
Currently pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.
−Removed: From time to time we are involved in governmental proceedings relating to the conduct of our business.
−Removed: We are also party to civil litigation.
As a large company with operations across the U.S.
−Removed: and Canada, we are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of our business.
+Added: and Canada, we are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of our business, including governmental proceedings.
Actions that have been filed against us, and that may be filed against us in the future, include personal injury, property damage, commercial, customer, and employment-related claims, including purported state and national class action lawsuits related to:
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If economic conditions or other risks and uncertainties cause a significant reduction in our cash flows from operations, we may reduce or suspend capital expenditures, growth and acquisition activity, implementation of our business strategy, dividend declarations or share repurchases.
−Removed: We may choose to incur indebtedness to pay for these activities, although our access to capital markets is not assured and we may not be able to incur indebtedness at a cost that is consistent with current borrowing rates.
+Added: We may choose to incur indebtedness to pay for these activities, although our
+Added: access to capital markets is not assured and we may not be able to incur indebtedness at a cost that is consistent with current borrowing rates.
We also may need to incur indebtedness to refinance scheduled debt maturities, and it is possible that the cost of financing could increase significantly, thereby increasing our expenses and decreasing our net income.
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The amount of insurance we are required to maintain for environmental liability is governed by statutory requirements.
−Removed: 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.
−Removed: 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.
−Removed: We use these programs to mitigate risk of loss, thereby enabling us to manage our self-insurance exposure associated with claims.
−Removed: 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.
−Removed: 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.
−Removed: In addition, to fulfill our financial assurance obligations with respect to variable-rate tax-exempt debt, final capping, closure, post-closure and environmental remediation obligations, we generally obtain letters of credit or surety bonds, rely on insurance, including captive insurance, fund trust and escrow accounts or rely upon WM financial guarantees.
−Removed: We currently have in place all financial assurance instruments necessary for our operations.
−Removed: Our financial position, which can be negatively affected by asset impairments, our credit profile and general economic factors, may adversely affect the cost of our current financial assurance instruments, and changes in regulations may impose stricter requirements on the types of financial assurance that will be accepted.
−Removed: Additionally, in the event we are unable to obtain sufficient surety bonding, letters of credit or third-party insurance coverage at reasonable cost, or one or more states cease to view captive insurance as adequate coverage, we would need to rely on other forms of financial assurance.
−Removed: It is possible that we could be forced to deposit cash to collateralize our obligations.
−Removed: Other forms of financial assurance could be more expensive to obtain, and any requirements to use cash to support our obligations would negatively impact our liquidity and capital resources and could affect our ability to meet our obligations as they become due.
+Added: To the extent our obligations for claims are more than we estimated, our insurance coverage is inadequate to cover our obligations, or our insurers are unable to meet their obligations, the requirement that we pay such obligations could have a material adverse effect on our financial results.
+Added: In addition, to fulfill our financial assurance obligations with respect to variable-rate tax-exempt debt, and final capping, closure, post-closure and environmental remediation obligations, we generally obtain letters of credit or surety bonds, rely on insurance, including captive insurance, fund trust and escrow accounts or rely upon WMI financial guarantees.
+Added: Our financial position, which can be negatively affected by asset impairments, our credit profile and general economic factors, may increase the cost of our current financial assurance instruments, and changes in regulations may impose stricter requirements on the types of financial assurance that will be accepted.
+Added: In the event we are unable to obtain sufficient surety bonding, letters of credit or third-party insurance coverage at reasonable cost, or one or more states cease to view captive insurance as adequate coverage, we would need to rely on other forms of financial assurance.
+Added: It is possible that we could be required to deposit cash to collateralize certain obligations, which could negatively impact our liquidity.
We may record material charges against our earnings due to impairments to our assets.
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If we determine an asset or expansion project is impaired, we will charge against earnings any unamortized capitalized expenditures and advances relating to such asset or project reduced by any portion of the capitalized costs that we estimate will be recoverable, through sale or otherwise.
−Removed: We also carry a significant amount of goodwill on our Consolidated Balance Sheets, which is required to be assessed for impairment annually, and more frequently in the case of certain triggering events.
+Added: We also carry a significant amount of
+Added: goodwill on our Consolidated Balance Sheets, which is required to be assessed for impairment annually, and more frequently in the case of certain triggering events.
We have in the past and may in the future be required to incur charges against earnings if such impairment tests indicate that the fair value of a reporting unit is below its carrying amount.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.