REPUBLIC SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tables in millions, except per share data) Ì (Continued)
Current Practice
Description Historical Practice (EÅective January 1, 2003)
Post-Closure Includes routine monitoring and No change, except it includes
maintenance of a landÑll after it has methane gas collection systems in all
been certiÑed as closed by the cases where the need for such
applicable state regulatory agency. systems are considered probable.
DISCOUNT RATE: Not applicable. Credit-adjusted, risk-free rate of 6.5%
and 6.75% for the years ending
December 31, 2004 and 2003,
respectively.
INFLATION: Not applicable. InÖation rate of 2.5%.
COST ESTIMATES: Cost estimates generally assume work No change, except that the cost of
will be performed by third parties. any activities performed internally is
increased to represent an estimate of
the amount a third party would
charge to perform such activity. This
third party proÑt is taken in to
income in the period the work is
performed internally.
METHANE GAS COLLECTION Capitalized when constructed and During the active life of a landÑll,
SYSTEMS: charged to expense through included in cell development costs
depreciation over the shorter of their when the need for such systems is
useful life or the life of the landÑll. considered probable; charged to
expense through depletion as airspace
is consumed using the units-of-
consumption method. Systems
associated with the last Ñnal capping
event at a landÑll are included in
closure costs.
RECOGNITION OF LIABILITY:
Final Capping Accrued over the life of the landÑll. All Ñnal capping costs are recorded as
Costs are charged to cost of a liability and asset at fair value as
operations and accrued liabilities as the obligation is incurred. The
airspace is consumed using the discounted cash Öow associated with
units-of-consumption method. Costs each Ñnal capping event is recorded
are not discounted. to an accrued liability, with a
corresponding increase to landÑll
assets as airspace is consumed related
to the speciÑc Ñnal capping event.
Interest is accreted on the liability
using the eÅective interest method
until the liability is paid.
STATEMENT OF INCOME:
Cost of Operations Expense charged to cost of operations Not applicable.
equal to amount of liability accrued.
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