Waste Management 2008 Annual Report Download - page 111
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Please find page 111 of the 2008 Waste Management annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Depreciation and amortization expense, including amortization expense for assets recorded as capital leases,
was comprised of the following for the years ended December 31 (in millions):
2008 2007 2006
Depreciation of tangible property and equipment ................. $ 785 $ 796 $ 829
Amortization of landfill airspace ............................. 429 440 479
Depreciation and amortization expense ........................ $1,214 $1,236 $1,308
6. Goodwill and Other Intangible Assets
We incurred no impairment of goodwill as a result of our annual, fourth quarter goodwill impairment tests in
2008, 2007 or 2006. Additionally, we did not encounter any events or changes in circumstances that indicated that
an impairment was more likely than not during interim periods in 2008, 2007 or 2006. However, there can be no
assurance that goodwill will not be impaired at any time in the future.
In late 2008, our WMRA segment experienced a rapid decline in commodity prices due to a significant
decrease in demand for recyclable commodities both domestically and internationally. This decline was considered
in our annual impairment test for 2008. Although we currently believe that these market conditions are temporary in
nature, a sustained period of depressed commodity prices and/or demand for recyclables could result in a significant
decline in the estimated fair value of WMRA. Such a decline could require us to record a non-cash impairment
charge to WMRA’s goodwill balance, which was $143 million at December 31, 2008. The estimated fair value of
WMRA is based upon discounted cash flow analysis, and is directly impacted by our expectations for the recovery
of commodity prices and the demand for recyclables, our cost of goods sold and interest rates used for discounting.
Refer to Note 20 for a summary of changes in our goodwill during 2008 and 2007 by reportable segment.
Our other intangible assets as of December 31, 2008 and 2007 were comprised of the following (in millions):
Customer
Contracts and
Customer
Lists
Covenants
Not-to-
Compete
Licenses,
Permits
and Other Total
December 31, 2008
Intangible assets ......................... $134 $ 55 $ 72 $ 261
Less accumulated amortization............... (56) (30) (17) (103)
$ 78 $ 25 $ 55 $ 158
December 31, 2007
Intangible assets ......................... $109 $ 55 $ 60 $ 224
Less accumulated amortization............... (52) (34) (14) (100)
$ 57 $ 21 $ 46 $ 124
Landfill operating permits are not presented above and are recognized on a combined basis with other landfill
assets and amortized using our landfill amortization method. Amortization expense for other intangible assets was
$24 million for 2008, $23 million for 2007 and $26 million for 2006. At December 31, 2008, we had $24 million of
other intangible assets that are not subject to amortization. The intangible asset amortization expense estimated as
of December 31, 2008 is $24 million in 2009; $21 million in 2010; $19 million in 2011; $17 million in 2012; and
$14 million in 2013.
77
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)