text: **REPUBLIC SERVICES, INC. AND SUBSIDIARIES**
  
  **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(All tables in millions, except per share data) Ì (Continued)**
  
  The Company's estimates of costs to discharge asset retirement obligations for landÑlls are developed in 
  today's dollars. These costs are inÖated each year to reÖect a normal escalation of prices up to the year they 
  are expected to be paid. The Company uses a 2.5% inÖation rate, which is based upon the ten year average 
  increase in the consumer price index and is the rate used by most waste industry participants. 
  
  These estimated costs are then discounted to their present value using a credit-adjusted, risk-free rate. 
  The Company's credit-adjusted, risk-free rate was determined to be 6.50% and 6.75% for years ended 
  December 31, 2004 and 2003, respectively, based upon the estimated all-in yield the Company believes it 
  would need to oÅer to sell thirty-year debt in the public market. Changes in asset retirement obligations due to 
  the passage of time are measured by recognizing accretion expense in a manner that results in a constant 
  eÅective interest rate being applied to the average carrying amount of the liability. The eÅective interest rate 
  used to calculate accretion expense is the Company's credit-adjusted, risk-free rate. 