SUPPLEMENTARY INFORMATION (Notes)

12 Months Ended

Dec. 31, 2020

Notes To Financial Statements [Abstract]

SUPPLEMENTARY INFORMATION

perating Expense, net

Insurance Recoveries

Fairfax County WtE Facility

In February 2017, our Fairfax County WtE facility experienced a fire in the front-end receiving portion of the facility. During the first quarter of 2017, we completed our evaluation of the impact of this event and recorded an immaterial asset impairment, which we have since recovered from insurance proceeds. The facility resumed operations in December 2017.

The cost of repair or replacement of assets and business interruption losses for the above matter was insured under the terms of applicable insurance policies, subject to deductibles.

We recorded insurance gains, as a reduction to Other operating expense, net in our consolidated statement of operations as follows (in millions):

	Year Ended December 31,
	2020		2019		2018
Insurance gains for property and clean-up costs, net of impairment charges	$	1	$	—	$	18
Insurance gains for business interruption costs, net of costs incurred	$	1	$	2	$	19

Impairment Charges

Impairment charges were as follows (in millions):

	Year Ended December 31,
	2020		2019		2018
Impairment charges	$	19	$	2	$	86

The goodwill recorded for our CES reporting unit totaled $46 million as of December 31, 2019, and resulted from previously acquired materials processing facilities that are specially designed to process, treat, recycle, and dispose of solid and liquid wastes, which includes waste from the commercial sector. We performed the required annual impairment review of our recorded goodwill as of October 1, 2019. Based on the results of the test performed, we determined that the estimated fair value of the CES reporting unit exceeded the carrying value by 5%; therefore, we did not record a goodwill impairment charge for the year ended December 31, 2019.

Due to the marginal outcome of our review of goodwill recorded for our CES reporting unit as of October 1, 2019, we continued to monitor the CES reporting unit for impairment through the end of the first quarter of 2020. We considered the economic impacts of the novel coronavirus ("COVID-19") pandemic and the decline in waste volumes from the commercial and industrial sectors to be a triggering event and reviewed the goodwill held at the CES reporting unit. We performed an interim impairment test via a quantitative valuation as of March 31, 2020. As a result, in the first quarter of 2020, we recorded an impairment of $16 million, net of tax benefit of $3 million, which represents the carrying amount of our CES reporting unit in excess of its estimated fair value as of the testing date.

For our CES reporting unit, we determined an estimate of the fair value of this reporting unit by combining both the income and market approaches. The market approach was based on current trading multiples of EBITDA for companies operating in businesses similar to our CES reporting unit. In performing the test under the income approach, we utilized a discount rate of 12% and a long-term terminal growth rate of 2.5% beyond our planning period. The assumptions used in evaluating goodwill for impairment are subject to change and are tracked against historical performance.

We continued to monitor the CES reporting unit for impairment through the end of 2020, and believe the assumptions utilized were reasonable and commensurate with the views of a market participant. As part of the qualitative assessment, we updated key assumptions, including lowering the discount rate, increasing forecasts for revenue, and the operating margin. The results of the qualitative assessment indicated that it is not more likely than not the fair value of CES reporting unit is less than its carrying amount. For additional information, see Note 1. Organization and Summary of Significant Accounting Policies - Goodwill and Note 12. Intangible Assets and Goodwill.

During the year ended December 31, 2018, we identified an indicator of impairment associated with certain of our WtE facilities where the current expectation is that, more likely than not, the assets will not be operated through their previously estimated economic useful life. We performed recoverability tests to determine if these facilities were impaired as of the respective balance sheet date. As a result, based on expected cash flows utilizing Level 3 inputs, we recorded a non-cash impairment charge for the year ended December 31, 2018 of $86 million, to reduce the carrying value of the assets to their estimated fair value.

For more information regarding fair value measurements, see Note 14. Financial Instruments.

Selected Supplementary Balance Sheet Information

Selected supplementary balance sheet information is as follows (in millions):

	As of December 31,
	2020		2019
Prepaid expenses	$	32	$	27
Other receivable	26		22
Spare parts	23		20
Other	36		36
Total prepaid expenses and other current assets	$	117	$	105
Operating expenses, payroll and related expenses	$	137	$	139
Deferred revenue	10		12
Accrued liabilities to client communities	26		16
Interest payable	46		27
Dividends payable	15		38
Insurance premium financing	28		24
Other	41		36
Total accrued expenses and other current liabilities	$	303	$	292

Geographic Information

Our operations are principally located in the U.S. The summary of our operating revenues and total assets by geographic region was as follows (in millions):

	U.S.		Other		Total
Operating Revenue:
Year Ended December 31, 2020	$	1,832	$	72	$	1,904
Year Ended December 31, 2019	$	1,800	$	70	$	1,870
Year Ended December 31, 2018	$	1,785	$	83	$	1,868
	U.S.		Other		Total
Total Assets:
As of December 31, 2020	$	3,305	$	401	$	3,706
As of December 31, 2019	$	3,466	$	249	$	3,715
As of December 31, 2018	$	3,635	$	208	$	3,843