Subjective or Disclosure
Policy Description Complex Judgments Reference
Income Taxes:
We account for income Valuation allowances for Note 2, Summary of
taxes in accordance with deferred tax assets and SigniÑcant Accounting
Statement of Financial the realizability of net Policies, and Note 6,
Accounting Standards operating losses for tax Income Taxes in the
No. 109, ""Accounting purposes are based upon Consolidated Financial
for Income Taxes.'' our judgment. If our Statements.
Accordingly, deferred judgment and estimates
taxes have been provided concerning valuation
to show the eÅect of allowances and the
temporary diÅerences realizability of net
between the recognition operating losses are
of revenue and expenses incorrect, our provision
for Ñnancial and income for income taxes would
tax reporting purposes change.
and between the tax
basis of assets and
liabilities and their
reported amounts in the
Ñnancial statements.
After the initial
recognition of a deferred
tax asset, a valuation
allowance is provided if
it is determined that it is
more likely than not that
the asset will not be
realized.
Business Combinations
We make decisions to acquire or invest in businesses based on Ñnancial and strategic considerations.
Businesses acquired are accounted for under the purchase method of accounting and are included in our
Consolidated Financial Statements from the date of acquisition.
We acquired various solid waste businesses during the years ended December 31, 2004, 2003 and 2002.
The aggregate purchase prices we paid for these transactions was $47.4 million, $51.5 million and
$55.8 million, respectively.
Cost in excess of fair value of net assets acquired (goodwill) for 2004 acquisitions totaled approximately
$13.2 million. As of December 31, 2004 we had goodwill, net of accumulated amortization, of
$1,562.7 million.
During 2004, $28.2 million of the total purchase price paid for acquisitions and contingent payments to
former owners was allocated to landÑll airspace. As of December 31, 2004, we had $743.6 million of landÑll
development costs, net of accumulated depletion and amortization, which includes purchase price allocated to
landÑll airspace as well as other capitalized landÑll costs. When a landÑll is acquired as part of a group of
assets, purchase price is allocated to airspace based upon the discounted expected future cash Öows of the
landÑll relative to the other assets within the acquired group and is adjusted for other non-depletable landÑll
assets and liabilities acquired (primarily Ñnal capping, closure and post-closure liabilities). LandÑll purchase
price is amortized using the units-of-consumption method over total available airspace, which includes
probable expansion airspace where appropriate.
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