REPUBLIC SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tables in millions, except per share data) Ì (Continued)
Prepaid Expenses and Other Current Assets
A summary of prepaid expenses and other current assets is as follows:
December 31,
2004 2003
InventoryÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $19.1 $ 17.7
Prepaid expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17.8 20.5
Other non-trade receivables ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17.4 27.9
Income taxes receivable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19.7 87.6
Note receivable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 23.0
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.4 5.4
$76.4 $182.1
Inventories consist primarily of compost, mulch, and soil materials, equipment parts and fuel that are
valued under a method that approximates the lower of cost (Ñrst-in, Ñrst-out) or market.
The Company expenses substantially all advertising expenditures as incurred.
Property and Equipment
Property and equipment are recorded at cost. Expenditures for major additions and improvements to
facilities are capitalized, while maintenance and repairs are charged to expense as incurred. When property is
retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts
and any resulting gain or loss is reÖected in the Consolidated Statements of Income.
The Company revises the estimated useful lives of property and equipment acquired through business
acquisitions to conform with its policies regarding property and equipment. Depreciation is provided over the
estimated useful lives of the assets involved using the straight-line method. The estimated useful lives are
seven to forty years for buildings and improvements, Ñve to twelve years for vehicles, seven to ten years for
most landÑll equipment, three to Ñfteen years for all other equipment, and Ñve to twelve years for furniture and
Ñxtures.
LandÑlls and landÑll improvements are stated at cost and are amortized or depleted based on consumed
airspace. LandÑll improvements include direct costs incurred to obtain landÑll permits and direct costs
incurred to acquire, construct and develop sites. These costs are amortized or depleted based on consumed
airspace. All indirect landÑll development costs are expensed as incurred. (For further information, see
Note 3, Accrued LandÑll and Environmental Costs.)
The Company capitalizes interest on landÑll cell construction and other construction projects in
accordance with Statement of Financial Accounting Standards No. 34, ""Capitalization of Interest Cost.''
Construction projects must meet the following criteria before interest is capitalized:
1. Total construction costs are $50,000 or greater,
2. The construction phase is one month or longer, and
3. The assets have a useful life of one year or longer.
Interest is capitalized on qualiÑed assets while they undergo activities to ready them for their intended
use. Capitalization of interest ceases once an asset is placed into service or if construction activity is suspended
for more than a brief period of time. The interest capitalization rate is based upon the Company's weighted
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