In connection with our waste management services, we process both hazardous and non-hazardous waste, which we transport to our own, or other, facilities for destruction or disposal. As a result of disposing of hazardous substances, in the event any cleanup is required, we could be a potentially responsible party for the costs of the cleanup notwithstanding any absence of fault on our part.

 

In the normal course of conducting our business, we are involved in various litigation. We are not a party to any litigation or governmental proceeding which our management believes could result in any judgments or fines against us that would have a material adverse effect on our financial position, liquidity or results of future operations.

The Company has a -year finite risk insurance policy entered into in with American International Group, Inc. (“AIG”), which provides financial assurance to the applicable states for our permitted facilities in the event of unforeseen closure. The policy, as amended, provides for a maximum allowable coverage of and has available capacity to allow for annual inflation and other performance and surety bond requirements. All of the required payments for this finite risk insurance policy, as amended, were previously made by the Company. At our financial assurance coverage amount under this policy totaled approximately The Company has recorded and in sinking funds related to this policy in other long term assets on the accompanying Consolidated Balance Sheets at and respectively, which includes interest earned of and on the sinking funds as of and respectively. Interest income for the months ended and was approximately and respectively. If the Company so elects, AIG is obligated to pay the Company an amount equal to of the sinking fund account balance in return for complete release of liability from both the Company and any applicable regulatory agency using this policy as an instrument to comply with financial assurance requirements.

 

In the Company entered into a finite risk insurance policy for our PFNWR (“PFNWR policy”) facility with AIG. The policy provided an initial of financial assurance coverage with an annual growth rate of which at the end of the year term policy, provides maximum coverage of The Company has made all of the required payments on this policy. At our financial assurance coverage amount under this policy totaled approximately The Company had initially recorded and in sinking funds related to this policy in other long term assets on the accompanying Consolidated Balance Sheets at (see a discussion of the subsequent reclassification of the in finite risk sinking funds at to finite risk sinking fund receivable in current assets on the accompanying Consolidated Balance Sheets at below) and respectively, which includes interest earned of and on the sinking fund as of and respectively. Interest income for the months ended and was approximately and respectively. This policy has been renewed annually at the end of the year term with a nominal fee for the variance between the coverage requirement and the sinking fund balance.

 

During the latter part of the Company initiated a plan to secure other options in providing financial assurance coverage for our PFNWR facility, including acquiring a separate bonding mechanism that would allow for the release of the sinking funds securing the PFNWR policy as discussed above. At the Company was waiting for final approvals on the releases of the PFNWR policy from state and federal regulators (the releases were obtained by the Company subsequent to quarter ended The releases allow the Company to cancel the PFNWR policy with AIG which would result in the release of the approximate in sinking funds securing the PFNWR policy back to the Company. The Company has acquired a new bonding mechanism in the required amount of approximately (“new bonds”) to replace the PFNWR policy in providing financial assurance for the PFNWR facility. The new bonds require approximately in collateral and the new bonding agency has agreed to allow the Company to provide this collateral with a standby letter of credit to be issued by the Company’s lender upon AIG’s release of the approximate in finite sinking funds under the PFNWR policy which is expected to be completed in the quarter of Accordingly, at the Company reclassified the in finite risk sinking funds initially included in other long term assets on the accompanying Consolidated Balance Sheets to finite risk sinking fund receivable included in current assets on the accompanying Consolidated Balance Sheets (See “Note – Subsequent Events – Closure Policy and Credit Facility” for release of the finite sinking fund by AIG).

 

From time to time, we are required to post standby letters of credit and various bonds to support contractual obligations to customers and other obligations, including facility closures. At the total amount of these bonds and letters of credit outstanding was approximately (which include bonds purchased totaling approximately for our PFNWR facility as discussed above), of which the majority of the amount relates to various bonding requirements.