Item 2.06. Material Impairments
On February 25, 2009, Waste Management, Inc. (the "Company") determined that it will record a non-cash charge for the impairment of capitalized costs related to revenue management software it licensed from SAP.
As previously disclosed, in 2005 the Company entered into an agreement with SAP to license its waste and recycling revenue management software and for SAP to implement the software on a fixed-fee basis. SAP represented to the Company that the licensed software was a fully integrated, out-of-the-box solution that would require no modifications and that SAP could implement the software within 18 months. Contrary to SAP's representations, SAP had to write new computer code and extensively alter the licensed software in its failed attempt to implement the software for the Company. After protracted delays and a failed pilot in a small market, the Company terminated SAP's implementation. As previously disclosed, in March 2008, the Company filed suit against SAP in Houston, Texas, alleging fraud and breach of contract. The Company has been assessing its options and developing alternatives to the failed SAP revenue management software.
On February 25, 2009, management presented to the Board of Directors a plan to enhance and improve its existing revenue management system and not pursue alternatives that might include the licensed SAP software. The Company has determined to abandon any alternative that includes the use of SAP software after careful consideration of the failures of the software. The Company's determination to abandon the SAP software will result in a non-cash charge of approximately $50 million for the capitalized costs of the SAP license and implementation efforts.

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