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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2011
Employee Benefit Plans [Abstract] |
EMPLOYEE BENEFIT PLANS | 11. EMPLOYEE BENEFIT PLANS Stock-Based Compensation In July 1998, we adopted the 1998 Stock Incentive Plan (1998 Plan) to provide for grants of options to purchase shares of common stock, restricted stock and other equity based compensation to our employees and non-employee directors who are eligible to participate in the 1998 Plan. The 1998 Plan expired on June 30, 2008. In February 2007, our board of directors approved the 2007 Stock Incentive Plan (2007 Plan). In March 2011, our board of directors approved the Amended and Restated Republic Services, Inc. 2007 Stock Incentive Plan (the Amended and Restated Plan). The Amended and Restated Plan was ratified by the Company’s stockholders in May 2011. We currently have 22.1 million shares of common stock reserved for future grants under our Amended and Restated Plan. Options granted under the 1998 Plan, the 2007 Plan and the Amended and Restated Plan are non-qualified and are granted at a price equal to the fair market value of our common stock at the date of grant. Generally, options granted have a term of seven to ten years from the date of grant, and vest in increments of 25% per year over a four year period beginning on the first anniversary date of the grant. Options granted to non-employee directors have a term of ten years and are fully vested at the grant date. In December 2008, the board of directors amended and restated the Republic Services, Inc. 2006 Incentive Stock Plan (formerly known as the Allied Waste Industries, Inc. 2006 Incentive Stock Plan (the 2006 Plan)). Allied’s stockholders approved the 2006 Plan in May 2006. The 2006 Plan was amended and restated in December 2008 to reflect that Republic Services, Inc. is the new sponsor of the Plan, that any references to shares of common stock is to shares of common stock of Republic Services, Inc., and to adjust outstanding awards and the number of shares available under the Plan to reflect the acquisition. The 2006 Plan, as amended and restated, provides for the grant of non-qualified stock options, incentive stock options, shares of restricted stock, shares of phantom stock, stock bonuses, restricted stock units, stock appreciation rights, performance awards, dividend equivalents, cash awards, or other stock-based awards. Awards granted under the 2006 Plan prior to December 5, 2008 became fully vested and nonforfeitable upon the closing of the acquisition. Awards may be granted under the 2006 Plan, as amended and restated, after December 5, 2008 only to employees and consultants of Allied Waste Industries, Inc. and its subsidiaries who were not employed by Republic Services, Inc. prior to such date. At December 31, 2011, there were approximately 15.5 million shares of common stock reserved for future grants under the 2006 Plan. Stock Options We use a binomial option-pricing model to value our stock option grants. We recognize compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award, or to the employee’s retirement eligible date, if earlier. Expected volatility is based on the weighted average of the most recent one-year volatility and a historical rolling average volatility of our stock over the expected life of the option. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option. We use historical data to estimate future option exercises, forfeitures (at 3.0% for each of the period presented) and expected life of the options. When appropriate, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The weighted-average estimated fair values of stock options granted during the years ended December 31, 2011, 2010 and 2009 were $5.35, $5.28 and $3.79 per option, respectively, which were calculated using the following weighted-average assumptions:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Expected volatility |  |  | 27.3 | % |  |  | 28.6 | % |  |  | 28.7 | %
Risk-free interest rate |  |  | 1.7 | % |  |  | 2.4 | % |  |  | 1.4 | %
Dividend yield |  |  | 2.7 | % |  |  | 2.9 | % |  |  | 3.1 | %
Expected life (in years) |  |  | 4.4 |  |  |  | 4.3 |  |  |  | 4.2 |
Contractual life (in years) |  |  | 7 |  |  |  | 7 |  |  |  | 7 |
The following table summarizes the stock option activity for the years ended December 31, 2009, 2010 and 2011:
|  | Number of Shares |  |  | Weighted Average Exercise Price per Share |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2008 |  |  | 18.7 |  |  | $ | 23.57 |  |  |  |  |  |  |  |  |
Granted |  |  | 0.3 |  |  |  | 21.03 |  |  |  |  |  |  |  |  |
Exercised |  |  | (2.1 | ) |  |  | 18.12 |  |  |  |  |  |  | $ | 17.8 |
Forfeited or expired |  |  | (1.8 | ) |  |  | 28.59 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2009 |  |  | 15.1 |  |  |  | 23.69 |  |  |  |  |  |  |  |  |
Granted |  |  | 3.1 |  |  |  | 27.48 |  |  |  |  |  |  |  |  |
Exercised |  |  | (3.9 | ) |  |  | 21.73 |  |  |  |  |  |  | $ | 34.3 |
Forfeited or expired |  |  | (0.7 | ) |  |  | 27.38 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2010 |  |  | 13.6 |  |  |  | 24.97 |  |  |  |  |  |  |  |  |
Granted |  |  | 3.0 |  |  |  | 29.83 |  |  |  |  |  |  |  |  |
Exercised |  |  | (1.7 | ) |  |  | 22.31 |  |  |  |  |  |  | $ | 14.4 |
Forfeited or expired |  |  | (0.6 | ) |  |  | 28.63 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2011 |  |  | 14.3 |  |  | $ | 26.13 |  |  |  | 4.2 |  |  | $ | 32.8 |
Exercisable at December 31, 2011 |  |  | 8.6 |  |  | $ | 24.92 |  |  |  | 3.4 |  |  | $ | 28.3 |
During 2011, 2010 and 2009, compensation expense for stock options was $13.1 million, $12.8 million and $7.8 million, respectively. As of December 31, 2011, total unrecognized compensation expense related to outstanding stock options was $10.8 million, which will be recognized over a weighted average period of 1.8 years. The total fair value of stock options that vested in 2011, 2010 and 2009 was $8.7 million, $4.0 million and $3.9 million, respectively. We classified excess tax benefits of $2.5 million, $3.5 million and $2.5 million as cash flows from financing activities for 2011, 2010 and 2009, respectively. All other tax benefits related to stock options have been presented as a component of cash flows from operating activities. Other Stock Awards The following table summarizes the restricted stock unit and restricted stock activity for the years ended December 31, 2009, 2010 and 2011:
|  | Number of Restricted Stock Units and Shares of Restricted Stock (In Thousands) |  |  | Weighted-Average Grant Date Fair Value per Share |  |  | Weighted-Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Unissued at December 31, 2008 |  |  | 236.2 |  |  | $ | 23.50 |  |  |  |  |  |  |  |  |
Granted |  |  | 516.0 |  |  |  | 23.92 |  |  |  |  |  |  |  |  |
Vested and issued |  |  | (67.0 | ) |  |  | 23.28 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (32.0 | ) |  |  | 23.50 |  |  |  |  |  |  |  |  |
Unissued at December 31, 2009 |  |  | 653.2 |  |  |  | 23.85 |  |  |  |  |  |  |  |  |
Granted |  |  | 367.9 |  |  |  | 29.14 |  |  |  |  |  |  |  |  |
Vested and issued |  |  | (171.8 | ) |  |  | 22.63 |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Unissued at December 31, 2010 |  |  | 849.3 |  |  |  | 26.39 |  |  |  |  |  |  |  |  |
Granted |  |  | 179.2 |  |  |  | 29.97 |  |  |  |  |  |  |  |  |
Vested and issued |  |  | (250.5 | ) |  |  | 26.61 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (8.0 | ) |  |  | 24.97 |  |  |  |  |  |  |  |  |
Unissued at December 31, 2011 |  |  | 770.0 |  |  | $ | 27.17 |  |  |  | 0.4 |  |  | $ | 21.2 |
Vested and unissued at December 31, 2011 |  |  | 396.1 |  |  | $ | 26.88 |  |  |  |  |  |  |  |  |
During 2011 our non-employee directors were awarded 82,500 restricted stock units under our Amended and Restated Plan, which vested immediately. During 2011 we awarded 76,699 restricted stock units to executives that vest in four equal annual installments beginning on the anniversary date of the original grant. In addition, 20,039 restricted stock units were earned as dividend equivalents. The restricted stock units do not carry any voting or dividend rights, except the right to receive additional restricted stock units in lieu of dividends. The directors receive the underlying shares only after their board service ends or a change in control occurs. During 2010 we awarded 92,894 restricted stock units to our non-employee directors under our Amended and Restated Plan, of which 88,732 vested immediately. The remaining restricted stock units awarded during the year ended December 31, 2010 vest in three equal annual installments beginning on the anniversary date of the original grant. During 2010 we awarded 210,437 restricted stock units to executives and other officers that vest in four equal annual installments beginning on the anniversary date of the original grant. During 2009 we awarded 320,354 restricted stock units to our non-employee directors under our 1998 Plan. During 2009, we awarded 195,611 shares of restricted stock to executives and other officers and directors, of which 110,669 of the shares vested May 14, 2010 and 38,670 of the shares awarded vested effective January 31, 2012. Additionally, 26,914 shares awarded vest in four equal annual installments beginning on the anniversary date of the original grant. The remaining 15,904 shares awarded vested during 2009 and 3,454 shares vested during 2010. During the vesting period, the participants have voting rights and receive dividends declared and paid on the shares, but the shares may not be sold, assigned, transferred or otherwise encumbered. Granted but unvested shares are forfeited if the participant resigns employment with us for other than good reason. The fair value of restricted stock and restricted stock units is based on the closing market price on the date of the grant. The compensation expense related to restricted stock units and restricted stock is amortized ratably over the vesting period. During 2011, 2010 and 2009, compensation expense related to restricted stock units and restricted shares totaled $7.5 million, $11.7 million and $7.2 million, respectively. Defined Benefit Pension Plan We currently have one qualified defined benefit pension plan, the BFI Retirement Plan (the Plan). The Plan covers certain employees in the United States, including some employees subject to collective bargaining agreements. The Plan benefits are frozen. Interest credits continue to be earned by participants in the Plan, and participants whose collective bargaining agreements provide for additional benefit accruals under the Plan continue to receive those credits in accordance with the terms of their bargaining agreements. The Plan was converted from a traditional defined benefit plan to a cash balance plan in 1993. Prior to the conversion of the cash balance design, benefits payable as a single life annuity under the Plan were based on the participant’s highest five years of earnings out of the last ten years of service. Upon conversion to the cash balance plan, the existing accrued benefits were converted to a lump-sum value using the actuarial assumptions in effect at the time. Participants’ cash balance accounts are increased until retirement by certain benefit and interest credits under the terms of their bargaining agreements. Participants may elect early retirement with the attainment of age 55 and completion of 10 years of credited service at reduced benefits. Participants with 35 years of service may retire at age 62 without any reduction in benefits. Effective January 1, 2011, the Plan was amended to solicit participants in the Plan to take a lump sum distribution of their eligible retirement benefits. During the year ended December 31, 2011, we made $67.0 million of lump sum payments to participants. We recognized $3.6 million, net of tax, of deferred actuarial gain within our selling, general and administrative expenses as a result of settlement accounting applied to these transactions. Our pension contributions are made in accordance with funding standards established by Employee Retirement Income Security Act of 1974 and the Internal Revenue Code, as amended by the Pension Protection Act enacted in 2006 (the PPA). We made a $10.0 million voluntary contribution to the Plan in 2010. No contributions were made in either 2011 or 2009. We must separately recognize the overfunded or underfunded status of our pension plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases, if any. The PBO is equal to the accumulated benefit obligation (ABO) as the present value of these liabilities is not affected by assumed future salary increases. We use a measurement date that coincides with our year end of December 31. The following table presents the ABO and reconciliations of the changes in the PBO, the plan assets and the accounting funded status of our defined benefit pension plan for the years ended December 31, 2011 and 2010.
|  | Defined Benefit Pension Plan |
|  | 2011 |  |  | 2010 |
Accumulated Benefit Obligation |  | $ | 343.5 |  |  | $ | 371.6 |
Change in Projected Benefit Obligation: |  |  |  |  |  |  |  |
Projected benefit obligation at beginning of year |  | $ | 371.6 |  |  | $ | 364.7 |
Service cost |  |  | - |  |  |  | 0.2 |
Interest cost |  |  | 17.0 |  |  |  | 20.5 |
Amendments |  |  | - |  |  |  | 1.2 |
Actuarial loss |  |  | 30.2 |  |  |  | 2.2 |
Benefits paid |  |  | (75.3 | ) |  |  | (17.2 | )
Projected benefit obligation at end of year |  | $ | 343.5 |  |  | $ | 371.6 |
Change in Plan Assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 363.9 |  |  | $ | 333.3 |
Actual return on plan assets |  |  | 18.0 |  |  |  | 37.8 |
Employer contributions |  |  | - |  |  |  | 10.0 |
Estimated expenses |  |  | (3.0 | ) |  |  | - |
Benefits paid |  |  | (75.3 | ) |  |  | (17.2 | )
Fair value of plan assets at end of year |  | $ | 303.6 |  |  | $ | 363.9 |
Unfunded status |  | $ | 39.9 |  |  | $ | 7.7 |
Amounts recognized in the statement of financial position consist of: |  |  |  |  |  |  |  |
Noncurrent liabilities |  | $ | 39.9 |  |  | $ | 7.7 |
Net amount recognized |  | $ | 39.9 |  |  | $ | 7.7 |
Weighted average assumptions used to determine benefit obligations: |  |  |  |  |  |  |  |
Discount rate |  |  | 4.25 | % |  |  | 5.25 | %
Rate of compensation increase |  |  | N/A |  |  |  | N/A |
The amounts included in accumulated other comprehensive income on the consolidated statement of financial position that have not yet been recognized as components of net periodic benefit cost at December 31, 2011 and 2010 are as follows:
|  | Pension Benefits |
|  | 2011 |  |  | 2010 |
Accumulated other comprehensive loss (income) |  |  |  |  |  |  |  |
Net actuarial loss (gain) |  | $ | 1.7 |  |  | $ | (40.2 | )
The components of the net periodic benefit cost are summarized below:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Components of Net Periodic Benefit Cost: |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 3.0 |  |  | $ | 0.2 |  |  | $ | 0.2 |
Interest cost |  |  | 17.0 |  |  |  | 20.5 |  |  |  | 20.2 |
Expected return on plan assets |  |  | (23.5 | ) |  |  | (23.6 | ) |  |  | (21.4 | )
Recognized net actuarial gain |  |  | (0.5 | ) |  |  | - |  |  |  | - |
Amortization of prior service cost |  |  | 0.1 |  |  |  | - |  |  |  | - |
Settlement income |  |  | (5.9 | ) |  |  | - |  |  |  | - |
Net periodic benefit cost |  | $ | (9.8 | ) |  | $ | (2.9 | ) |  | $ | (1.0 | )
Weighted average assumptions used to determine net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 5.25 | % |  |  | 5.75 | % |  |  | 5.75 | %
Expected return on plan assets |  |  | 7.25 | % |  |  | 7.25 | % |  |  | 7.25 | %
Rate of compensation increase |  |  | N/A |  |  |  | 4.00 | % |  |  | 4.00 | %
We determine the discount rate used in the measurement of our obligations based on a model that matches the timing and amount of expected benefit payments to maturities of high quality bonds priced as of the pension plan measurement date. Where that timing does not correspond to a published high-quality bond rate, our model uses an expected yield curve to determine an appropriate current discount rate. The yields on the bonds are used to derive a discount rate for the liability. The term of our obligation, based on the expected retirement dates of our workforce, is approximately ten years. In developing our expected rate of return assumption, we have evaluated the actual historical performance and long-term return projections of the Plan assets, which give consideration to the asset mix and the anticipated timing of the pension plan outflows. We employ a total return investment approach whereby a mix of equity and fixed income investments are used to maximize the long-term return of plan assets for what we consider a prudent level of risk. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and our financial condition. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks as well as growth, value, and small and large capitalizations. Derivatives may be used to gain market exposure in an efficient and timely manner. However, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset and liability studies, and quarterly investment portfolio reviews. The following table summarizes our target asset allocation for 2011 and actual asset allocation at December 31, 2011 and 2010 for our defined benefit pension plan:
|  | Target Asset Allocation |  |  | 2011 Actual Asset Allocation |  |  | 2010 Actual Asset Allocation |
Debt securities |  |  | 65 | % |  |  | 66 | % |  |  | 57 | %
Equity securities |  |  | 35 |  |  |  | 33 |  |  |  | 42 |
Cash or cash equivalents |  |  | - |  |  |  | 1 |  |  |  | 1 |
Total |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
For 2012, the investment strategy for pension plan assets is to maintain a broadly diversified portfolio designed to achieve our target of an average long-term rate of return of 6.50%. While we believe we can achieve a long-term average return of 6.50%, we cannot be certain that the portfolio will perform to our expectations. Assets are strategically allocated among debt and equity portfolios to achieve a diversification level that dampens fluctuations in investment returns. Asset allocation target ranges and strategies are reviewed periodically with the assistance of an independent external consulting firm. The pension assets are measured at fair value. The following table summarizes, by level, within the fair value hierarchy, the investments of the Plan at fair value as of December 31, 2011 and 2010:
|  |  |  |  | Fair Value Measurements Using |
|  | Total as of December 31, 2011 |  |  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Money market account |  | $ | 3.3 |  |  | $ | 3.3 |  |  | $ | - |  |  | $ | - |
Common stock |  |  | 13.7 |  |  |  | 13.7 |  |  |  | - |  |  |  | - |
Mutual funds and real estate investment trusts |  |  | 206.1 |  |  |  | 162.4 |  |  |  | 43.7 |  |  |  | - |
Bonds |  |  | 80.1 |  |  |  | - |  |  |  | 80.1 |  |  |  | - |
Limited partnerships |  |  | 0.4 |  |  |  | - |  |  |  | - |  |  |  | 0.4 |
Total assets |  | $ | 303.6 |  |  | $ | 179.4 |  |  | $ | 123.8 |  |  | $ | 0.4 |
|  |  |  |  | Fair Value Measurements Using |
|  | Total as of December 31, 2010 |  |  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Money market account |  | $ | 4.6 |  |  | $ | 4.6 |  |  | $ | - |  |  | $ | - |
Common stock |  |  | 37.1 |  |  |  | 37.1 |  |  |  | - |  |  |  | - |
Mutual funds and real estate investment trusts |  |  | 231.2 |  |  |  | 158.6 |  |  |  | 72.6 |  |  |  | - |
Bonds |  |  | 90.5 |  |  |  | - |  |  |  | 90.5 |  |  |  | - |
Limited partnerships |  |  | 0.5 |  |  |  | - |  |  |  | - |  |  |  | 0.5 |
Total assets |  | $ | 363.9 |  |  | $ | 200.3 |  |  | $ | 163.1 |  |  | $ | 0.5 |
Estimated future benefit payments for the next ten years under the Plan are as follows:
2012 |  | $ | 24.4 |
2013 |  |  | 20.7 |
2014 |  |  | 21.9 |
2015 |  |  | 21.2 |
2016 |  |  | 21.9 |
2017 through 2021 |  |  | 113.7 |
Multiemployer Pension Plans We contribute to 27 multiemployer pension plans under collective bargaining agreements covering union-represented employees. Approximately 20% of our total current employees are participants in such multiemployer plans. These plans generally provide retirement benefits to participants based on their service to contributing employers. We do not administer these multiemployer plans. In general, these plans are managed by a board of trustees with the unions appointing certain trustees and other contributing employers of the plan appointing certain members. We generally are not represented on the board of trustees. Based on the information available to us, we believe that some of the multiemployer plans to which we contribute are either “critical” or “endangered” as those terms are defined in the PPA. The PPA requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. Until the plan trustees develop the funding improvement plans or rehabilitation plans as required by the PPA, we cannot determine the amount of assessments we may be subject to, if any. Accordingly, we cannot determine at this time the impact that the PPA may have on our consolidated financial position, results of operations or cash flows. Furthermore, under current law regarding multiemployer benefit plans, a plan’s termination, our voluntary withdrawal (which we consider from time to time), or the mass withdrawal of all contributing employers from any under-funded multiemployer pension plan would require us to make payments to the plan for our proportionate share of the multiemployer plan’s unfunded vested liabilities. It is possible that there may be a mass withdrawal of employers contributing to these plans or plans may terminate in the near future. We could have adjustments to our estimates for these matters in the near term that could have a material effect on our consolidated financial condition, results of operations or cash flows. Republic’s participation in individually significant multiemployer pension plans for the year ended December 31, 2011 is outlined in the table below. Only with respect to multiemployer pension plans, we considered contributions in excess of $3.0 million in any period disclosed to be individually significant. The most recent PPA zone status available in 2011 and 2010 is for the plans’ year ended September 30 or December 31, 2010 and 2009, respectively. The status is based on information that Republic received from the plan and is certified by the plans’ actuary. Among other factors, plans in the “critical” red zone are generally less than 65% funded, plans in the “endangered” yellow zone are less than 80% funded, and plans in the “safe” green zone are at least 80% funded. The last column lists the expiration dates(s) of the collective-bargaining agreement(s) (CBA) to which the plans are subject. There have been no significant changes that affect the comparability of the 2011, 2010 and 2009 contributions.
|  |  |  | Pension Protection Act Zone Status |  | Funding Improvement or Rehabilitation Plan Status Pending / |  | Republic Contributions to Plan |  |  | Surcharge |  |  | Expiration |
Legal Plan Name |  | EIN |  | 2010 |  | 2009 |  | Implemented |  | 2011 |  |  | 2010 |  |  | 2009 |  |  | Imposed |  |  | of CBA |
Central States, Southeast and Southwest Areas Pension Fund |  | 36-6044243 |  | Critical |  | Critical |  | Implemented |  | $ | 3.9 |  |  | $ | 4.1 |  |  | $ | 4.2 |  |  |  | No |  |  |  | 1/31/12 - 8/31/13 |
Local 731 Private Scavengers and Garage Attendants Pension Trust Fund |  | 36-6513567 |  | Endangered |  | Critical |  | Implemented |  |  | 3.4 |  |  |  | 3.2 |  |  |  | 3.0 |  |  |  | No |  |  |  | 9/30/13 - 1/31/14 |
Western Conference of Teamsters Pension Plan |  | 91-6145047 |  | Safe |  | Safe |  | No |  |  | 31.6 |  |  |  | 32.6 |  |  |  | 30.8 |  |  |  | No |  |  |  | 2/1/12 - 11/30/16 |
Individually significant plans |  |  |  |  |  |  |  |  |  |  | 38.9 |  |  |  | 39.9 |  |  |  | 38.0 |  |  |  |  |  |  |  |  |
All other plans |  | N/A |  | N/A |  | N/A |  | N/A |  |  | 9.8 |  |  |  | 10.5 |  |  |  | 10.5 |  |  |  | N/A |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  | $ | 48.7 |  |  | $ | 50.4 |  |  | $ | 48.5 |  |  |  |  |  |  |  |  |
We are listed in the Form 5500 for Local 731 Private Scavengers and Garage Attendants Pension Trust Fund as providing more than 5 percent of the total contributions. At the date the financial statements were issued, Forms 5500 were not available for the plan years ending September 30, 2011 or December 31, 2011. Defined Contribution Plans We maintain the Republic Services 401(k) Plan (401(k) Plan), which is a defined contribution plan covering all eligible employees. Under the provisions of the 401(k) Plan, participants may direct us to defer a portion of their compensation to the 401(k) Plan, subject to Internal Revenue Code limitations. We provide for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately. In conjunction with the Allied acquisition, we acquired the Allied 401(k) Plan. Participants in the Allied 401(k) Plan are eligible for the same employer matching contribution as those under the 401(k) Plan effective January 1, 2009. Effective July 1, 2009, the 401(k) Plan and the Allied 401(k) Plan were merged to form the Republic Services, Inc. 401(k) Plan. Total expense recorded for matching 401(k) contributions in 2011, 2010 and 2009 was $28.9 million, $32.8 million and $30.5 million, respectively. Deferred Compensation Plan We provide eligible employees, officers and directors of Republic with the opportunity to voluntarily defer base salary, bonus payments, long-term incentive awards and other compensation, as applicable, on a pre-tax basis through Republic Services, Inc. Deferred Compensation Plan (the DCP). The DCP is a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. Eligible participants can defer up to 80% of base salary and up to 100% of bonus, long term compensation and directors’ fees. Under the deferred compensation plan, some participants also are eligible for matching contributions. The matching contribution under the DCP is equal to the lesser of two percent of the participant’s compensation over established 401(k) limits or 50% of the amount the participant has deferred. DCP participants have no ownership or security interest in any of the amounts deferred or the measurement funds under the DCP. The right of each participant in the DCP is solely that of a general, unsecured creditor of Republic with respect to his or her own interest under the DCP. Republic invested in corporate-owned life insurance policies to satisfy future obligations under the DCP. These corporate-owned life insurance policies are held in a Rabbi Trust and are recorded at the amount that can be realized under insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The aggregate cash surrender value of these life insurance policies was $34.5 million and $27.4 million at December 31, 2011 and 2010, respectively, classified in other assets in our consolidated balance sheets. The DCP liability was $31.4 million and $27.7 million at December 31, 2011 and 2010, respectively, classified in other long-term liabilities in our consolidated balance sheets. Employee Stock Purchase Plan Employees of Republic are eligible to participate in an employee stock purchase plan. The plan allows participants to purchase the Company’s common stock for 95% of its quoted market price on the last day of each calendar quarter. For the years ended December 31, 2011, 2010 and 2009, issuances under this plan totaled 136,621 shares, 123,523 shares and 49,918 shares, respectively. At December 31, 2011, shares reserved for issuance to employees under this plan totaled 1.2 million and Republic held employee contributions of approximately $1.0 million for the purchase of common stock. Incentive Compensation Plans Our compensation program includes a management incentive plan, which uses certain performance metrics such as free cash flow, earnings per share and return on invested capital to measure performance. In addition, in connection with the Allied acquisition, our board of directors approved a synergy incentive plan that provides compensation that depends on our achieving targeted synergies of approximately $150 million by the end of 2010. Incentive awards are payable in cash. The synergy incentive plan was fully accrued for $68.1 million and was included in other long-term liabilities as of December 31, 2010.

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