LANDFILL AND ENVIRONMENTAL COSTS
As of December 31, 2013, we owned or operated 190 active solid waste landfills with total available disposal capacity of approximately 4.9 billion in-place cubic yards. Additionally, we currently have post-closure responsibility for 124 closed landfills.
A summary of our accrued landfill and environmental liabilities as of December 31 is as follows:
|
| | | | | | | |
| 2013 | | 2012 |
Landfill final capping, closure and post-closure liabilities | $ | 1,091.3 |
| | $ | 1,052.4 |
|
Environmental remediation | 551.7 |
| | 563.7 |
|
Total accrued landfill and environmental costs | 1,643.0 |
| | 1,616.1 |
|
Less: current portion | (178.7 | ) | | (195.5 | ) |
Long-term portion | $ | 1,464.3 |
| | $ | 1,420.6 |
|
Final Capping, Closure and Post-Closure Costs
The following table summarizes the activity in our asset retirement obligation liabilities, which include liabilities for final capping, closure and post-closure, for the years ended December 31:
|
| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
Asset retirement obligation liabilities, beginning of year | $ | 1,052.4 |
| | $ | 1,037.0 |
| | $ | 1,046.5 |
|
Non-cash additions | 36.5 |
| | 33.8 |
| | 33.9 |
|
Acquisitions and other adjustments | (0.6 | ) | | (14.6 | ) | | 15.8 |
|
Asset retirement obligation adjustments | 12.0 |
| | (4.6 | ) | | (31.5 | ) |
Payments | (85.6 | ) | | (77.6 | ) | | (105.7 | ) |
Accretion expense | 76.6 |
| | 78.4 |
| | 78.0 |
|
Asset retirement obligation liabilities, end of year | 1,091.3 |
| | 1,052.4 |
| | 1,037.0 |
|
Less: current portion | (93.6 | ) | | (110.4 | ) | | (85.2 | ) |
Long-term portion | $ | 997.7 |
| | $ | 942.0 |
| | $ | 951.8 |
|
We review our landfill asset retirement obligations annually. As a result, we recorded a net increase (decrease) in amortization expense of $(0.3) million, $4.9 million and $(9.6) million for 2013, 2012 and 2011, respectively, primarily related to changes in estimates and assumptions concerning the anticipated waste flow, cost and timing of future final capping, closure and post-closure activities.
The fair value of assets that are legally restricted for purposes of settling final capping, closure and post-closure obligations was approximately $56.0 million as of December 31, 2013 and is included in restricted cash and marketable securities in our consolidated balance sheet.
The expected future payments for final capping, closure and post-closure as of December 31, 2013 are as follows:
|
| | | |
2014 | $ | 93.6 |
|
2015 | 119.4 |
|
2016 | 79.4 |
|
2017 | 78.1 |
|
2018 | 88.8 |
|
Thereafter | 5,052.5 |
|
| $ | 5,511.8 |
|
The estimated remaining final capping, closure and post-closure expenditures presented above are not inflated and not discounted and reflect the estimated future payments for liabilities incurred and recorded as of December 31, 2013.
Environmental Remediation Liabilities
We accrue for remediation costs when they become probable and can be reasonably estimated. There can sometimes be a range of reasonable estimates of the costs associated with remediation of a site. In these cases, we use the amount within the range that constitutes our best estimate. If no amount within the range appears to be a better estimate than any other, we use the amount that is at the low end of such range. It is reasonably possible that we will need to adjust the liabilities recorded for remediation to reflect the effects of new or additional information, to the extent such information impacts the costs, timing or duration of the required actions. If we used the reasonably possible high ends of our ranges, our aggregate potential remediation liability as of December 31, 2013 would be approximately $446 million higher than the amounts recorded. Future changes in our estimates of the cost, timing or duration of the required actions could have a material adverse effect on our consolidated financial position, results of operations or cash flows.
The following table summarizes the activity in our environmental remediation liabilities for the years ended December 31:
|
| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
Environmental remediation liabilities, beginning of year | $ | 563.7 |
| | $ | 543.7 |
| | $ | 552.1 |
|
Net additions charged to expense | 83.7 |
| | 62.4 |
| | 3.6 |
|
Payments | (122.5 | ) | | (73.1 | ) | | (45.0 | ) |
Accretion expense (non-cash interest expense) | 26.8 |
| | 30.7 |
| | 33.0 |
|
Environmental remediation liabilities, end of year | 551.7 |
| | 563.7 |
| | 543.7 |
|
Less: Current portion | (85.1 | ) | | (85.1 | ) | | (99.0 | ) |
Long-term portion | $ | 466.6 |
| | $ | 478.6 |
| | $ | 444.7 |
|
The expected undiscounted future payments for remediation costs as of December 31, 2013 are as follows:
|
| | | |
2014 | $ | 85.1 |
|
2015 | 49.8 |
|
2016 | 44.6 |
|
2017 | 35.6 |
|
2018 | 42.3 |
|
Thereafter | 349.0 |
|
| $ | 606.4 |
|
The following is a discussion of certain of our significant remediation matters:
Bridgeton Landfill. In June 2013, we recorded an environmental remediation charge at our closed Bridgeton Landfill in Missouri of $108.7 million to manage the remediation area and monitor the site. As of December 31, 2013, the remediation liability recorded for this site is $93.9 million, of which $30.9 million is expected to be paid during the next twelve months. We believe the remaining reasonably possible range of loss for remediation costs is $63 million to $342 million.
Countywide Landfill. In September 2009, Republic Services of Ohio II, LLC entered into Final Findings and Orders with the Ohio Environmental Protection Agency that require us to implement a comprehensive operation and maintenance program to manage the remediation area at the Countywide Recycling and Disposal Facility (Countywide). The remediation liability for Countywide recorded as of December 31, 2013 is $47.0 million, of which $4.6 million is expected to be paid during during the next twelve months. We believe the reasonably possible range of loss for remediation costs is $46 million to $67 million.
Congress Landfill. In August 2010, Congress Development Company agreed with the State of Illinois to have a Final Consent Order (Final Order) entered by the Circuit Court of Illinois, Cook County. Pursuant to the Final Order, we have agreed to continue to implement certain remedial activities at the Congress Landfill. The remediation liability recorded as of December 31, 2013 is $82.7 million, of which $9.9 million is expected to be paid during the next twelve months. We believe the reasonably possible range of loss for remediation costs is $53 million to $153 million.
It is reasonably possible that we will need to adjust the liabilities noted above to reflect the effects of new or additional information, to the extent that such information impacts the costs, timing or duration of the required actions. Future changes in our estimates of the costs, timing or duration of the required actions could have a material adverse effect on our consolidated financial position, results of operations or cash flows.
