Waste Management 2013 Annual Report Download - page 212

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
‰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.
See Note 3 for additional information related to the accounting policy and analysis involved in identifying
and calculating impairments.
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.
Refer to Note 21 for information related to the impact of impairments on the results of operations of our
reportable segments.
Equity in net losses of unconsolidated entities
During the year ended December 31, 2012, we recognized a charge of $10 million related to a payment we
made under a guarantee on behalf of an unconsolidated entity that went into liquidation. This investment was
accounted for under the equity method.
Other income (expense)
During the year ended December 31, 2013, we recognized impairment charges of $71 million relating to
other-than-temporary declines in the value of investments in waste diversion technology companies accounted
for under the cost method. We wrote down the carrying value of our investments to their fair value, which was
primarily determined using an income approach based on estimated future cash flow projections obtained in the
fourth quarter of 2013 and, to a lesser extent, third-party investors’ recent transactions in these
securities. Partially offsetting these charges was a $4 million gain on the sale of a similar investment recognized
in the second quarter of 2013.
During the year ended December 31, 2012, we recognized an impairment charge of $16 million relating to
an other-than-temporary decline in the value of another investment in a waste diversion technology company
accounted for under the cost method. We wrote down the carrying value of our investment to its fair value based
on other third-party investors’ recent transactions in these securities, which are considered to be the best evidence
of fair value currently available.
These net charges are recorded in “Other, net” in our Consolidated Statement of Operations.
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