Waste Management 2015 Annual Report Download - page 113

During the year ended December 31, 2015, we recognized net charges of $82 million, primarily related to
$66 million of charges to impair certain of our oil and gas producing properties, as a result of the continued
decline in oil and gas prices. We wrote down the carrying value of these properties to their estimated fair value
using an income approach. At December 31, 2015, our remaining book value in these investments was $30
million. We also recognized $18 million of charges to write down or divest of certain assets in our recycling
operations and a $5 million impairment of a landfill in our Western Canada Area due to revised post-closure cost
estimates. Partially offsetting these charges was $7 million in net gains from divestitures, including a $6 million
gain on the sale of an oil and gas producing property in the second quarter of 2015.
During the year ended December 31, 2014, we recognized net gains of $170 million, primarily related to the
following:
•Divestitures — We recognized net gains of $515 million, primarily as a result of a $519 million gain
on the sale of our Wheelabrator business and an $18 million gain on the sale of certain landfill and
collection operations in our Eastern Canada Area. Partially offsetting these gains was a $25 million loss
on the divestiture of our Puerto Rico operations. Refer to Note 19 to the Consolidated Financial
Statements for additional information related to our divestitures.
•Oil and gas properties impairments — We recognized $272 million of charges to impair certain of our
oil and gas producing properties, primarily as a result of the pronounced decrease in oil and gas prices
in the fourth quarter of 2014. We wrote down the carrying value of these properties to their estimated
fair value using an income approach.
•Other impairments — We recognized additional impairment charges of $73 million to write down
assets in our waste diversion technology, renewable energy, recycling and medical waste operations.
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 part, 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.
50