Waste Management 2013 Annual Report Download - page 145

During the year ended December 31, 2013, we recognized net charges of $464 million, primarily related to
the following:
‰Landfill impairments — We recognized $262 million of charges to impair certain of our landfills,
primarily as a result of our consideration of management’s decision in the fourth quarter of 2013 not to
actively pursue expansion and/or development of such landfills. These charges were primarily associated
with two landfills in our Eastern Canada Area, which are no longer accepting waste. We had previously
concluded that receipt of permits for these landfills was probable. However, in connection with our asset
rationalization and capital allocation analysis, which was influenced, in some cases, by our acquisition of
RCI, we determined that the future costs to construct these landfills could be avoided as we are able to
allocate disposal that would have gone to these landfills to other facilities and not materially impact
operations. As a result of management’s decision, we determined that the landfill assets were no longer
able to be recovered by the undiscounted cash flows attributable to these assets. As such, we wrote them
down to their estimated fair values using a market approach considering the highest and best use of the
assets.
‰Waste-to-energy impairments — We recognized $144 million of impairment charges relating to three
waste-to-energy facilities, primarily as a result of closure or anticipated closure due to continued
difficulty securing sufficient volumes to operate the plants at capacity and the prospect of additional
capacity entering the market where the largest facility is located. We wrote down the carrying value of
our facilities to their estimated fair value using a market approach.
‰Other impairments — The remainder of our 2013 charges were attributable to (i) $31 million of charges
to impair various recycling assets; (ii) $20 million of charges to write down assets related to a majority-
owned waste diversion technology company and (iii) a $15 million charge to write down the carrying
value of an oil and gas property to its estimated fair value.
‰Divestitures — Partially offsetting these charges were $8 million of net gains on divestitures.
During the year ended December 31, 2012, we recognized impairment charges aggregating $79 million,
attributable to (i) $45 million of charges related to three facilities in our medical waste services business as a
result of projected operating losses at each of these facilities; (ii) $20 million of charges related to investments in
waste diversion technology companies and (iii) other charges to write down the carrying value of assets to their
estimated fair values, all of which are individually immaterial.
During the year ended December 31, 2011, we recognized impairment charges relating to two facilities in
our medical waste services business, in addition to the three facilities impaired in 2012 discussed above, as a
result of the closure of one site and continuing operating losses at the other site.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Critical Accounting Estimates and Assumptions — Asset Impairments for additional information related to the
accounting policy and analysis involved in identifying and calculating impairments.
In addition to the impairments discussed above, we are continuing to evaluate opportunities associated with
the sale or discontinued use of underperforming assets or assets that may no longer meet our strategic objectives.
Accordingly, it is possible that additional charges may be recorded as assets are sold or become held-for-sale.
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