REPUBLIC SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tables in millions, except per share data) Ì (Continued)
SFAS 123(R) must be adopted no later than July 1, 2005. Early adoption will be permitted in periods in
which Ñnancial statements have not been issued. The Company expects to adopt SFAS 123(R) on July 1,
2005.
SFAS 123(R) permits public companies to adopt its requirements using one of two methods:
1. A ""modiÑed-prospective'' method in which compensation cost is recognized beginning with the
eÅective date (a) based on the requirements of SFAS 123(R) for all share-based payments
granted after the eÅective date and (b) based on the requirements of SFAS 123 for all awards
granted to employees prior to the eÅective date of SFAS 123(R) that remain unvested on the
eÅective date.
2. A ""modiÑed-retrospective'' method which includes the requirements of the modiÑed-prospective
method described above, but also permits entities to restate based on the amounts previously
reÖected in their SFAS 123 pro forma disclosures either (a) all prior periods presented or
(b) prior interim periods of the year of adoption.
The Company plans to adopt SFAS 123(R) using the modiÑed-prospective method.
As permitted by SFAS 123, the Company currently accounts for share-based payments to employees
using APB 25's intrinsic value method and, as such, generally recognizes no compensation cost for employee
stock options. Accordingly, the adoption of SFAS 123(R)'s fair value method may have a signiÑcant impact
on its result of operations, although it will have no impact on its overall Ñnancial position. The impact of
adoption of SFAS 123(R) cannot be predicted at this time because it will depend on levels of share-based
payments granted in the future. SFAS 123(R) also requires the beneÑts of tax deductions in excess of
recognized compensation cost to be reported as a Ñnancing cash Öow, rather than as an operating cash Öow as
required under current literature. This requirement will reduce net operating cash Öows and increase net
Ñnancing cash Öows in periods after adoption. While the Company cannot estimate what those amounts will
be in the future (because they depend on, among other things, when employees exercise stock options), the
amount of operating cash Öows recognized in prior periods for such excess tax deductions were $10.6 million,
$6.7 million, and $4.0 million in 2004, 2003 and 2002, respectively.
3. ACCRUED LANDFILL AND ENVIRONMENTAL COSTS
LandÑll and Environmental Costs
A summary of landÑll and environmental liabilities is as follows:
December 31,
2004 2003
LandÑll Ñnal capping, closure and post-closure liabilitiesÏÏÏÏÏÏÏÏ $216.8 $204.7
RemediationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 54.0 54.7
Environmental and legal costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.7 3.7
274.5 263.1
Less: Current portion (included in other current liabilities) ÏÏÏÏÏ (21.0) (37.6)
$253.5 $225.5
Life Cycle Accounting
The Company uses life cycle accounting and the units-of-consumption method to recognize certain
landÑll costs over the life of the site. In life cycle accounting, all costs to acquire and construct a site are
capitalized and charged to expense based upon the consumption of cubic yards of available airspace. Costs and
airspace estimates are developed annually by engineers. These estimates are used by the Company's operating
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