Waste Management 2013 Annual Report Download - page 153

The following table reflects our landfill liabilities and our environmental remediation liabilities as of
December 31, 2013 and 2012, and summarizes significant changes in these amounts during 2013 (in millions):
Landfill
Environmental
Remediation
December 31, 2012 ............................................. $1,338 $253
Obligations incurred and capitalized ................................ 59 —
Obligations settled .............................................. (71) (20)
Interest accretion ............................................... 87 4
Revisions in estimates and interest rate assumptions ................... 6 (6)
Acquisitions, divestitures and other adjustments ...................... 2 (4)
December 31, 2013 ............................................. $1,421 $227
Landfill Costs and Expenses — As disclosed in the Operating Expenses section above, our landfill operating
costs include interest accretion on asset retirement obligations, interest accretion on and discount rate
adjustments to environmental remediation liabilities and recovery assets, leachate and methane collection and
treatment, landfill remediation costs, and other landfill site costs. The following table summarizes these costs for
each of the three years indicated (in millions):
Years Ended December 31,
2013 2012 2011
Interest accretion on landfill liabilities ............................... $ 87 $ 84 $ 84
Interest accretion on and discount rate adjustments to environmental
remediation liabilities and recovery assets .......................... (9) 6 23
Leachate and methane collection and treatment ........................ 77 67 76
Landfill remediation costs ......................................... 9 — —
Other landfill site costs ........................................... 68 67 72
Total landfill operating costs ....................................... $232 $224 $255
The comparison of these costs for the reported periods has been significantly affected by accounting for
changes in the risk-free discount rate that we use to estimate the present value of our environmental remediation
liabilities and environmental remediation recovery assets, which is based on the rate for U.S. Treasury bonds
with a term approximating the weighted-average period until settlement of the underlying obligations.
Amortization of landfill airspace, which is included as a component of “Depreciation and amortization”
expense, includes the following:
‰the amortization of landfill capital costs, including (i) costs that have been incurred and capitalized and
(ii) estimated future costs for landfill development and construction required to develop our landfills to
their remaining permitted and expansion airspace; and
‰the amortization of asset retirement costs arising from landfill final capping, closure and post-closure
obligations, including (i) costs that have been incurred and capitalized and (ii) projected asset retirement
costs.
Amortization expense is recorded on a units-of-consumption basis, applying cost as a rate per ton. The rate
per ton is calculated by dividing each component of the amortizable basis of a landfill by the number of tons
needed to fill the corresponding asset’s airspace. Landfill capital costs and closure and post-closure asset
retirement costs are generally incurred to support the operation of the landfill over its entire operating life and
are, therefore, amortized on a per-ton basis using a landfill’s total airspace capacity. Final capping asset
retirement costs are related to a specific final capping event and are, therefore, amortized on a per-ton basis using
each discrete final capping event’s estimated airspace capacity. Accordingly, each landfill has multiple per-ton
amortization rates.
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