Waste Management 2014 Annual Report Download - page 196

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
See Notes 3 and 21 for additional information related to the accounting policy and analysis involved in
identifying and calculating impairments; and information related to the impact of impairments on the results of
operations of our reportable segments, respectively.
Equity in net losses of unconsolidated entities
During the year ended December 31, 2014, we recognized charges of $11 million primarily to write down equity
method investments in waste diversion technology companies to their fair value. 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, 2014, we recognized impairment charges of $22 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.
In the first quarter of 2014, we sold our investment in SEG, which was part of our Wheelabrator business.
We received cash proceeds from the sale of $155 million, which have been included in “Proceeds from
divestitures of businesses and other assets (net of cash divested)” within “Net cash used in investing activities” in
the Consolidated Statement of Cash Flows. The losses recognized related to the sale were not material.
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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