Table	of	Contents

# UNITED	STATES	SECURITIES	AND	EXCHANGE	COMMISSION

(Mark	One)

# 	 ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15	(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2009

o TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	transition	period	from										to

# REPUBLIC	SERVICES,	INC.

(Exact	Name	of	Registrant	as	Specified	in	its	Charter)

Delaware

(State	of	Incorporation)

Phoenix,	Arizona

(Address	of	Principal	Executive	Offices)

Registrant's	telephone	number,	including	area	code:	(480)	627-2700

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

# Title	of	Each	Class

Common	Stock,	par	value	$.01	per	share

(I.R.S.	Employer	Identification	No.)

(Zip	Code)

Name	of	Each	Exchange	on	which	Registered

# The	New	York	Stock	Exchange

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.		Yes	þ					No	o

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.		Yes	o					No	þ

Indicate	by	check	mark	whether	the	registrant:	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such	shorter period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.		Yes	þ					No	o

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Website,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule	405 of	Regulation	S-T	(Section	232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such	files)		Yes	þ					No	o

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.	o

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large	accelerated	filer," "accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one):

Large	accelerated	filer	þ Accelerated	filer	o Non-accelerated	filer	o Smaller	reporting	company	o (Do	not	check	if	a	smaller	reporting	company)

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).		Yes	o					No	þ

As	of	June	30,	2009,	the	aggregate	market	value	of	the	shares	of	the	Common	Stock	held	by	non-affiliates	of	the	registrant	was	$9.3	billion.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	Registrant's	Proxy	Statement	relative	to	the	2010	Annual	Meeting	of	Stockholders	are	incorporated	by	reference	in	Part	III	hereof.

# PART	I

Item	1. Business

Item	1A. Risk	Factors

Item	1B. Unresolved	Staff	Comments

Item	2. Properties

Item	3. Legal	Proceedings

Item	4. Submission	of	Matters	to	a	Vote	of	Security	Holders 32

# PART	II

Item	5. Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities 32

Item	6. Selected	Financial	Data 35

Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

Item	7A. Quantitative	and	Qualitative	Disclosures	About	Market	Risk

Item	8. Financial	Statements	and	Supplementary	Data

Item	9. Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure

Item	9A. Controls	and	Procedures 162

# PART	III

Item	10. Directors,	Executive	Officers	and	Corporate	Governance 163

Item	11. Executive	Compensation 163

Item	12. Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

# PART	IV

# 	EX-101	INSTANCE	DOCUMENT

	EX-101	SCHEMA	DOCUMENT

# 	EX-101	CALCULATION	LINKBASE	DOCUMENT

	EX-101	LABELS	LINKBASE	DOCUMENT

	EX-101	PRESENTATION	LINKBASE	DOCUMENT

	EX-101	DEFINITION	LINKBASE	DOCUMENT

Unless	the	context	requires	otherwise,	all	references	in	this	Annual	Report	on	Form	10-K	to	"Republic",	"the	company,"	"we,"	"us"	and	"our"	refer	to	Republic	Services,	Inc.	and	its	consolidated subsidiaries,	including	Allied	Waste	Industries,	Inc.	and	its	subsidiaries	(Allied)	for	periods	on	or	after	December	5,	2008.

# Overview

We	are	the	second	largest	provider	of	services	in	the	domestic	non-hazardous	solid	waste	industry	as	measured	by	revenue.	We	provide	non-hazardous	solid	waste	collection	services	for	commercial, industrial,	municipal	and	residential	customers	through	376	collection	companies	in	40	states	and	Puerto	Rico.	We	own	or	operate	223	transfer	stations,	192	active	solid	waste	landfills	and	78	recycling facilities.	We	also	operate	74	landfill	gas	and	renewable	energy	projects.	We	were	incorporated	as	a	Delaware	corporation	in	1996.

Based	on	analysts'	reports	and	industry	trade	publications,	we	believe	that	the	United	States	non-hazardous	solid	waste	services	industry	generates	annual	revenue	of	approximately	$56	billion,	of	which approximately	58%	is	generated	by	publicly	owned	waste	companies.	We	believe	that	we	and	one	other	public	waste	company	generated	in	excess	of	60%	of	the	publicly	owned	companies'	total revenue.	Additionally,	industry	data	indicates	that	the	non-hazardous	waste	industry	in	the	United	States	remains	fragmented	as	privately	held	companies	and	municipal	and	other	local	governmental authorities	generate	approximately	16%	and	26%,	respectively,	of	total	industry	revenue.	In	general,	growth	in	the	solid	waste	industry	is	linked	to	growth	in	the	overall	economy,	including	the	level	of new	household	and	business	formation	and	is	subject	to	changes	in	residential	and	commercial	construction	activity.

Our	operations	are	national	in	scope,	but	the	physical	collection	and	disposal	of	waste	is	very	much	a	local	business;	therefore,	the	dynamics	and	opportunities	differ	in	each	of	our	markets.	By	combining local	operating	management	with	standardized	business	practices,	we	can	drive	greater	overall	operating	efficiency	across	the	company,	while	maintaining	day-to-day	operating	decisions	at	the	local level,	closest	to	the	customer.	We	implement	this	strategy	through	an	organizational	structure	that	groups	our	operations	within	a	corporate,	region	and	area	structure.	We	manage	our	operations	through four	geographic	operating	segments	which	are	also	our	reportable	segments:	Eastern,	Midwest,	Southern	and	Western.	The	boundaries	of	our	operating	segments	have	changed	and	may	continue	to change	from	time	to	time.	Each	of	our	regions	is	organized	into	several	operating	areas	and	each	area	contains	multiple	operating	locations.	Each	of	our	regions	and	substantially	all	our	areas	provide collection,	transfer,	recycling	and	disposal	services.	We	believe	this	structure	facilitates	the	integration	of	our	operations	within	each	region,	which	is	a	critical	component	of	our	operating	strategy,	and allows	us	to	maximize	the	growth	opportunities	in	each	of	our	markets	and	to	operate	the	business	efficiently,	while	maintaining	effective	controls	and	standards	over	operational	and	administrative matters,	including	financial	reporting.	See	Note	14,	Segment	Reporting,	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K	for	further	discussion	of	our	operating	segments.

On	December	5,	2008,	we	acquired	all	of	the	issued	and	outstanding	shares	of	Allied	in	a	stock-for-stock	transaction	for	an	aggregate	purchase	price	of	$12.1	billion,	which	included	approximately $5.4	billion	of	debt,	at	fair	value.	As	a	condition	of	the	merger	with	Allied,	the	Department	of	Justice	(DOJ)	required	us	to	divest	of	certain	assets	and	related	liabilities.	As	of	September	30,	2009,	we completed	our	required	divestitures.	As	a	result	of	our	acquisition	of	Allied,	we	committed	to	a	restructuring	plan	related	to	our	corporate	overhead	and	other	administrative	and	operating	functions.	The plan	included	closing	our	corporate	office	in	Florida,	consolidating	administrative	functions	to	Arizona,	the	former	headquarters	of	Allied,	and	reducing	staffing	levels.	The	plan	also	included	closing	and consolidating	certain	operating	locations	and	terminating	certain	leases.	We	believe	that	our	merger	with	Allied	created	a	strong	operating	platform	that	will	allow	us	to	continue	to	provide	quality	service to	our	customers	and	superior	returns	to	our	stockholders.

We	had	revenue	of	$8.2	billion	and	$3.7	billion	and	operating	income	of	$1.6	billion	and	$0.3	billion	for	the	years	ended	December	31,	2009	and	2008,	respectively.	In	addition	to	our	merger	with	Allied, a	number	of

items	impacted	our	2009	and	2008	financial	results.	For	a	description	of	these	items,	see	Item	7,	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	Overview	of Our	Business	and	Consolidated	Results	of	Operations	included	elsewhere	in	this	Annual	Report	on	Form	10-K.

During	the	past	several	years,	we	supported	our	internal	growth	strategy	with	our	presence	in	markets	with	higher	than	average	population	growth.	We	believe	our	presence	in	these	markets	positions	us to	experience	growth	at	rates	that	are	generally	higher	than	those	of	declining	population	growth.

We	continue	to	focus	on	enhancing	shareholder	value	by	implementing	our	financial,	operating	and	growth	strategies.	In	order	to	ensure	that	our	goals	relative	to	these	strategies	are	achieved,	we	have developed	and	implemented	incentive	programs	that	help	focus	our	entire	company	on	realizing	key	performance	metrics	which	include	increasing	free	cash	flow,	achieving	targeted	earnings, maintaining	and	improving	returns	on	invested	capital,	as	well	as	achieving	and	maintaining	integration	synergies.	Our	financial,	operating	and	growth	strategies	are	described	further	herein.

# Financial	Strategy

Key	components	of	our	financial	strategy	include	our	ability	to	generate	free	cash	flow	and	sustain	or	improve	our	return	on	invested	capital.	Our	definition	of	free	cash	flow,	which	is	not	a	measure determined	in	accordance	with	United	States	generally	accepted	accounting	principles	(U.S.	GAAP),	is	cash	provided	by	operating	activities	less	purchases	of	property	and	equipment,	plus	proceeds	from sales	of	property	and	equipment	as	presented	in	our	consolidated	statements	of	cash	flows.	We	believe	that	free	cash	flow	is	a	driver	of	shareholder	value	and	provides	useful	information	regarding	the recurring	cash	provided	by	our	operating	activities	after	expenditures	for	property	and	equipment,	net	of	proceeds	from	sales	of	property	and	equipment.	Free	cash	flow	also	demonstrates	our	ability	to execute	our	financial	strategy,	which	includes	reinvesting	in	capital	assets	to	ensure	a	high	level	of	customer	service,	investing	in	capital	assets	to	facilitate	growth	in	our	customer	base	and	services provided,	maintaining	our	investment	grade	ratings	and	minimizing	debt,	paying	cash	dividends,	repurchasing	our	stock	and	maintaining	and	improving	our	market	position	through	business optimization.	In	addition,	free	cash	flow	is	a	key	metric	used	to	determine	management's	compensation.

We	manage	our	free	cash	flow	by	ensuring	that	capital	expenditures	and	operating	asset	levels	are	appropriate	in	light	of	our	existing	business	and	growth	opportunities	and	by	closely	managing	our working	capital,	which	consists	primarily	of	accounts	receivable	and	accounts	payable.

We	have	used	and	will	continue	to	use	our	cash	flow	to	maximize	shareholder	value	as	well	as	our	return	on	invested	capital.	Our	strategy	includes:

•		Customer	Service.	We	will	continue	to	reinvest	in	our	existing	fleet	of	vehicles,	equipment,	landfills	and	facilities	to	ensure	the	highest	level	of	service	to	our	customers	and	the communities	we	serve.	Because	of	the	economic	slowdown,	we	were	able	to	lower	our	capital	reinvestment	during	2009	below	that	which	otherwise	would	have	been	expected	for	the combined	companies.	However,	we	remain	acutely	focused	on	ensuring	that	we	are	not	under	investing	in	our	business	and	that	we	have	the	appropriate	complement	of	physical	assets	to take	advantage	of	additional	business	resulting	from	an	economic	recovery.	In	addition,	we	continue	to	focus	on	innovative	waste	disposal	processes	and	programs	to	help	our	customers achieve	their	goals	related	to	sustainability	and	environmentally	sound	waste	practices.	We	believe	that	these	in	turn	will	help	us	achieve	profitable	growth.

# •		Internal	Growth.

Price	Growth.	Growth	through	price	increases	helps	ensure	that	we	obtain	an	adequate	return	on	our	substantial	capital	investment	and	the	business	risk	associated	with	such	investment. Price	increases	also	allow	us	to	recover	historical	and	current	year	increases	in	operating	costs,	which	ultimately	enhances	our	operating	margins.

Volume	Growth.	Growth	through	increases	in	our	customer	base	and	services	provided	is	the	most	capital	efficient	means	for	us	to	build	our	business.	This	includes	not	only	expanding landfill	and	transfer	capacity	and	investing	in	trucks	and	containers,	but	also	includes	investing	in	information

tools	and	training	needed	to	ensure	high	productivity	and	quality	service	throughout	all	functional	areas	of	our	business.	We	work	to	increase	collection	and	disposal	volumes	while	ensuring that	prices	charged	for	such	services	provide	an	appropriate	return	on	our	capital	investment.

•		Debt.	During	2009,	payments	of	debt	net	of	borrowings	were	$865.9	million.	During	2009,	we	repaid	approximately	$1.6	billion	of	senior	notes	and	amounts	outstanding	under	our	credit facilities	primarily	using	proceeds	from	offering	$1.3	billion	of	senior	notes,	proceeds	from	disposition	of	assets	and	cash	flow	from	operations.	As	a	result,	we	reduced	the	average	coupon rate	on	our	senior	notes,	on	a	weighted	average	basis,	by	more	than	130	basis	points	while	extending	our	debt	maturities	thereby	giving	greater	stability	to	our	capital	structure.	Furthermore, we	anticipate	taking	advantage	of	capital	market	opportunities	to	mitigate	our	financial	risk	by	issuing	new	debt	and	using	the	proceeds	to	repay	existing	debt.

•		Credit	Ratings.	We	believe	that	a	key	component	of	our	financial	strategy	includes	maintaining	investment	grade	ratings	on	our	senior	debt,	which	was	rated	BBB	by	Standard	&	Poor's, BBB-	by	Fitch	and	Baa3	by	Moody's	as	of	December	31,	2009.	Such	ratings	have	allowed	us,	and	should	continue	to	allow	us,	to	readily	access	capital	markets	at	competitive	rates.	Our cash	utilization	strategy	will	continue	to	focus	on	maintaining	our	investment	grade	ratings.

•		Dividends.	In	July	2003,	our	Board	of	Directors	initiated	a	quarterly	cash	dividend	of	$0.04	per	share.	Our	quarterly	dividend	has	increased	from	time	to	time	thereafter,	the	latest	increase occurring	in	the	third	quarter	of	2008,	representing	an	average	annualized	growth	rate	of	approximately	30%.	Our	current	quarterly	cash	dividend	per	share	is	$0.19.	We	will	consider increasing	our	quarterly	cash	dividend	if	we	believe	it	will	enhance	shareholder	value.

•		Market	Growth	and	Optimization.	Within	our	markets,	our	goal	is	to	deliver	sustainable,	long-term	profitable	growth	while	efficiently	operating	our	assets	to	generate	acceptable	rates	of return.	We	allocate	capital	to	businesses,	markets	and	development	projects	to	support	growth	while	achieving	acceptable	rates	of	return.	We	develop	previously	non-permitted,	non- contiguous	landfill	sites	(greenfield	landfill	sites).	We	also	expand	our	existing	landfill	sites,	when	possible.	We	supplement	this	organic	growth	with	acquisitions	of	operating	assets,	such as	landfills,	transfer	stations,	and	tuck-in	acquisitions	of	collection	and	disposal	operations	in	existing	markets.	We	continuously	evaluate	our	existing	operating	assets	and	their	deployment within	each	market	to	determine	if	we	have	optimized	our	position	and	to	ensure	appropriate	investment	of	capital.	Where	operations	are	not	generating	acceptable	returns,	we	examine opportunities	to	achieve	greater	efficiencies	and	returns	through	the	integration	of	additional	assets.	If	such	enhancements	are	not	possible,	we	may	ultimately	decide	to	divest	the	existing assets	and	reallocate	resources	to	other	markets.

•		Share	Repurchase.	Once	we	reduce	our	debt	to	EBITDA	ratio,	as	defined	in	our	credit	agreement,	we	will	consider	reinstituting	our	share	repurchase	program.	We	believe	that	this	may occur	sometime	during	2011.	We	intend	to	execute	our	financial	strategy	while	maintaining	flexibility	to	take	advantage	of	market	growth	opportunities	and	maintaining	our	investment grade	ratings.	EBITDA	is	a	non-GAAP	measure.	In	this	context,	EBITDA	is	used	solely	to	provide	information	regarding	the	extent	to	which	we	are	in	compliance	with	debt	covenants	and is	not	comparable	to	EBITDA	used	by	other	companies.

For	certain	risks	related	to	our	financial	strategy,	see	Item	1A.	Risk	Factors.

# Operating	Strategy

We	seek	to	leverage	existing	assets	and	revenue	growth	to	increase	operating	margins	and	enhance	shareholder	value.	Our	operating	strategy	for	accomplishing	this	goal	includes	the	following:

•		utilize	the	extensive	industry	knowledge	and	experience	of	our	executive	management	team,

•		integrate	waste	operations,

•		utilize	a	decentralized	management	structure	in	overseeing	day-to-day	operations,

•		improve	operating	margins	through	economies	of	scale,	cost	efficiencies	and	asset	utilization,

•		achieve	high	levels	of	customer	satisfaction,	and

•		utilize	business	information	systems	to	improve	consistency	in	financial	and	operational	performance.

Experienced	Executive	Management	Team.	We	believe	that	we	have	one	of	the	most	experienced	executive	management	teams	in	the	solid	waste	industry.

James	E.	O'Connor,	who	has	served	as	our	Chief	Executive	Officer	(CEO)	since	December	1998,	also	became	our	Chairman	in	January	2003.	He	worked	at	Waste	Management,	Inc.	from	1972	to	1978 and	from	1982	to	1998.	During	that	time,	he	served	in	various	management	positions,	including	Senior	Vice	President	in	1997	and	1998,	and	Area	President	of	Waste	Management	of	Florida,	Inc.	from 1992	to	1997.	Mr.	O'Connor	has	35	years	of	experience	in	the	solid	waste	industry.

Donald	W.	Slager	became	our	President	and	Chief	Operating	Officer	(COO)	upon	our	merger	with	Allied	in	December	2008.	Prior	to	the	merger,	Mr.	Slager	worked	for	Allied	from	1992	through	2008 and	served	in	various	management	positions,	including	President	and	COO	from	2004	through	2008	and	Executive	Vice	President	and	COO	from	2003	to	2004.	From	2001	to	2003,	Mr.	Slager	served	as Senior	Vice	President,	Operations.	He	held	various	management	positions	at	Allied	from	1992	to	2003,	and	was	previously	General	Manager	at	National	Waste	Services,	where	he	served	in	various management	positions	since	1985.	Mr.	Slager	has	over	24	years	of	experience	in	the	solid	waste	industry.

Tod	C.	Holmes	has	served	as	our	Chief	Financial	Officer	(CFO)	since	August	1998.	Mr.	Holmes	served	as	our	Vice	President	of	Finance	from	June	1998	until	August	1998	and	as	Vice	President	of Finance	of	our	former	parent	company's	Solid	Waste	Group	from	January	1998	until	June	1998.	From	1987	to	1998,	Mr.	Holmes	served	in	various	management	positions	with	Browning-Ferris Industries,	Inc.,	including	Vice	President,	Investor	Relations	from	1996	to	1998,	Divisional	Vice	President,	Collection	Operations	from	1995	to	1996,	Divisional	Vice	President	and	Regional Controller	—	Northern	Region	from	1993	to	1995,	and	Divisional	Vice	President	and	Assistant	Corporate	Controller	from	1991	to	1993.	Mr.	Holmes	has	over	22	years	of	experience	in	the	solid	waste industry.

Our	regional	senior	vice	presidents	have	an	average	of	22	years	of	experience	in	the	industry.

Continuing	Merger	Integration	Strategy.	On	December	5,	2008	we	completed	our	merger	with	Allied.	We	believe	that	our	merger	integration	strategy	is	well	underway,	and	we	continue	to	believe	this merger	is	different	from	historical	attempts	to	consolidate	the	waste	industry	for	a	number	of	reasons,	including	the	following:

•		Two	Mature	Companies.	Most	previous	attempts	to	consolidate	the	waste	industry	focused	on	a	"roll	up"	strategy	often	involving	relatively	young	companies	solely	focused	on	increasing revenue	through	acquisitions.	Our	merger	with	Allied	involved	two	mature	companies	with	similar	business	practices	and	performance	metrics	that	have	been	developed	and	refined	over the	course	of	a	number	of	years.	We	believe	that	the	combination	of	our	maturity	and	proven	business	practices	and	performance	metrics	has	been	a	critical	component	of	our	success	in 2009	and	will	be	a	critical	component	of	our	future	success.

•		Best	Practices.	Our	merger	also	affords	us	the	opportunity	to	select	the	best	tools	and	systems	and	to	adopt	the	best	practices	of	two	successful	companies.	Republic	had	a	history	of financial	discipline	evident	in	the	consistent	generation	of	increasing	levels	of	free	cash	flow.	Allied	was	noted	for	its	integrated	operations	and	focus	on	procurement.	We	believe	that	our merger	has	given	us	an	unique	opportunity	to	combine	the	strengths	of	these	two	successful	organizations	and	create	a	best-in-class	waste	management	company.

•		Timely	and	Focused	Integration	Process.	We	are	acutely	aware	that	previous	acquisitions	in	the	waste	management	and	other	industries	failed	because	of	a	lack	of	focus	on	integration.	As such,	we	began	to	develop	our	integration	process	and	strategy	in	June	2008,	long	before	our	merger	was	consummated.	Our	process	identified	specific	integration	related	tasks	focused	on all	levels	of	the

organization,	especially	our	individual	business	units.	We	engaged	employees	at	all	levels	of	the	company	to	develop	a	detailed	integration	plan	and	to	ensure	that	each	of	our	employees understands	their	role	in	the	process.	The	integration	process	is	well	underway	and	is	ahead	of	schedule.

•		Strong	Operating	Platform.	The	merger	has	created	a	company	with	a	strong,	national	operating	platform.	The	foundation	of	this	platform	is	our	large	network	of	disposal	sites.	This disposal	network	provides	us	with	a	far	stronger	vertically	integrated	operating	structure	than	either	company	would	have	been	able	to	achieve	on	its	own.	We	believe	that	our	improved vertically	integrated	operations	will	be	a	key	driver	of	our	future	profitability.

•		Complementary	Operations	and	Cultures.	The	overlay	of	our	operating	locations	reflects	another	compelling	attribute	of	our	merger.	Republic	and	Allied	operated	complementary geographies	and	shared	very	similar	cultures	that	are	centered	on	a	commitment	to	providing	"industry-leading	solid	waste	and	environmental	services	that	exceed	our	customers'	highest expectations."

•		Significant	Synergies.	Prior	to	the	effective	date	of	our	merger	with	Allied,	we	identified	$150	million	of	annual	run-rate	integration	synergies.	We	also	developed	a	detailed	plan	for realizing	this	goal	that	includes	participation	at	all	levels	throughout	the	company	from	the	drivers	of	our	fleet	of	collection	vehicles	to	our	board	of	directors.	This	plan	anticipated achieving	$100	million	of	annual	run-rate	integration	synergies	by	the	end	of	fiscal	2009.	As	of	December	31,	2009,	we	have	already	met	our	original	goal	of	$150	million	of	run-rate synergies	and	have	increased	our	total	goal	for	annual	run-rate	synergies	to	$165	million	to	$175	million.	We	expect	to	achieve	this	goal	by	the	end	of	2010.

•		Strong	Capital	Structure.	Republic	enjoys	a	strong	capital	structure	and	investment	grade	credit	ratings	post-merger.	Our	combination	with	Allied	has	created	a	company	that	produces substantial	annual	free	cash	flow.	This	strong	cash	producing	characteristic	will	allow	us	to	pursue	our	mission	of	increasing	shareholder	value	by	focusing	on	investing	in	our	business, paying	down	our	debt,	funding	dividends	and	reinstituting	our	share	repurchase	program.

Decentralized	Management	Structure.	We	rely	on	a	decentralized	management	structure	to	minimize	administrative	overhead	costs	and	to	manage	our	day-to-day	operations	more	efficiently.	Our	local management	has	extensive	industry	experience	in	growing,	operating	and	managing	solid	waste	companies	and	has	substantial	experience	in	their	local	geographic	markets.	Each	regional	management team	includes	a	senior	vice	president,	vice	president-controller,	vice	president	of	human	resources,	vice	president	of	sales,	vice	president	of	operations	support,	director	of	safety,	director	of	engineering and	environmental	management,	and	director	of	market	planning	and	development.	We	believe	that	our	strong	regional	management	teams	allow	us	to	more	effectively	and	efficiently	drive	our initiatives	and	help	ensure	consistency	throughout	our	organization.	Our	regional	management	teams	and	our	area	presidents	have	extensive	authority,	responsibility	and	autonomy	for	operations	within their	respective	geographic	markets.	Compensation	for	our	area	management	teams	is	primarily	based	on	improving	operating	income	produced	and	the	free	cash	flow	and	return	on	invested	capital generated	in	each	manager's	geographic	area	of	responsibility.	In	addition,	through	long-term	incentive	programs,	including	stock	options,	we	believe	we	have	achieved	one	of	the	lowest	turnover	levels in	the	industry	for	our	local	management	teams.	As	a	result	of	retaining	experienced	managers	with	extensive	knowledge	of	and	involvement	in	their	local	communities,	we	are	proactive	in	anticipating our	customers'	needs	and	adjusting	to	changes	in	our	markets.	We	also	seek	to	implement	the	best	practices	of	our	various	regions	and	areas	throughout	our	operations	to	improve	operating	margins.

Integrated	Operations.	We	seek	to	achieve	a	high	rate	of	internalization	by	controlling	waste	streams	from	the	point	of	collection	through	disposal.	We	expect	that	our	fully	integrated	markets	generally will	have	a	lower	cost	of	operations	and	more	favorable	cash	flows	than	our	non-integrated	markets.	Through	acquisitions,	landfill	operating	agreements	and	other	market	development	activities,	we create	market-specific,	integrated	operations	typically	consisting	of	one	or	more	collection	companies,	transfer	stations	and	landfills.	We	consider	acquiring	companies	that	own	or	operate	landfills	with significant	permitted	disposal	capacity	and	appropriate	levels	of	waste	volume.	We	also	seek	to	acquire	solid	waste	collection	companies	in	markets	in	which	we	own	or	operate	landfills.	In	addition,	we generate	internal	growth	in	our	disposal	operations	by	developing	new	landfills	and	expanding	our	existing	landfills	from	time	to	time	in	markets	in	which	we	have

significant	collection	operations	or	in	markets	that	we	determine	lack	sufficient	disposal	capacity.	During	the	years	ended	December	31,	2009	and	2008,	approximately	68%	and	58%,	respectively,	of	the total	waste	volume	that	we	collected	was	disposed	at	landfill	sites	that	we	own	or	operate	(internalization).	This	increase	in	internalization	is	due	to	a	higher	concentration	of	integrated	hauling	and	landfill operations	acquired	in	our	merger	with	Allied.	In	a	number	of	our	larger	markets,	we	and	our	competitors	are	required	to	take	waste	to	government-controlled	disposal	facilities	(flow-control).	This provides	us	with	an	opportunity	to	effectively	compete	in	these	markets	without	investing	in	landfill	capacity.	Because	we	do	not	have	landfill	facilities	or	government-controlled	disposal	facilities	for	all markets	in	which	we	provide	collection	services,	we	believe	that	landfill	and	transfer	station	acquisitions,	operating	agreements,	and	market	development	give	us	the	opportunity	to	increase	our	waste internalization	rate	and	further	integrate	our	operations.	By	further	integrating	operations	in	existing	markets,	we	may	be	able	to	reduce	our	disposal	costs.

Economies	of	Scale,	Cost	Efficiencies	and	Asset	Utilization.	We	continue	to	identify	and	implement	best	practices	throughout	our	organization	with	the	goal	of	permanently	improving	overall	operating and	financial	results.	These	best	practice	initiatives	focus	on	critical	areas	of	our	operations	such	as	landfill	operations,	truck	routing,	maintenance	and	related	service	efficiencies,	purchasing	and administrative	activities.	The	consolidation	of	acquired	businesses	into	existing	operations	reduces	costs	by	decreasing	capital	and	expenses	used	for	truck	routing,	personnel,	equipment	and	vehicle maintenance,	inventories	and	back-office	administration.	Generally,	we	consolidate	our	acquired	administrative	centers	to	reduce	our	general	and	administrative	costs.	Of	particular	benefit	are	the opportunities	associated	with	the	blending	of	operations	as	a	result	of	the	Allied	merger.	Scheduled	for	full	completion	by	the	first	half	of	2010,	these	markets	offer	the	potential	for	marked	improvement in	operating	results.	Generally	speaking,	there	are	significant	opportunities	in	these	markets	to	leverage	economies	of	scale	and	the	existing	asset	base,	while	realizing	improved	operating	efficiencies. Upon	the	completion	of	the	integration	of	Allied,	our	goal	is	to	maintain	our	selling,	general	and	administrative	costs	at	no	more	than	10.0%	of	revenue,	which	we	believe	is	appropriate	given	our existing	business	platform.	In	addition,	our	procurement	initiatives	ensure	that	we	negotiate	the	best	volume	discounts	for	goods	and	services	purchased,	including	waste	disposal	rates	at	landfills	operated by	third	parties.	Furthermore,	we	have	taken	steps	to	maximize	the	utilization	of	our	assets.	For	example,	to	reduce	the	number	of	collection	vehicles	and	maximize	the	efficiency	of	our	fleet	and	drivers, we	use	a	route	optimization	program	to	minimize	drive	times	and	improve	operating	density.	By	using	assets	more	efficiently,	operating	expenses	can	be	reduced.

High	Levels	of	Customer	Satisfaction.	We	strive	to	provide	the	highest	level	of	service	to	our	customer	base.	Our	policy	is	to	periodically	visit	each	commercial	account	to	ensure	customer	satisfaction and	to	verify	that	we	are	providing	the	appropriate	level	of	service.	In	addition	to	visiting	existing	customers,	a	salesperson	develops	a	base	of	prospective	customers	within	each	market.	We	also	have municipal	marketing	representatives	in	most	service	areas	that	are	responsible	for	working	with	each	municipality	or	community	to	which	we	provide	residential	service	to	ensure	customer	satisfaction. Additionally,	the	municipal	representatives	organize	and	drive	the	effort	to	obtain	new	or	renew	municipal	contracts	in	their	service	areas.

Focus	on	Systems	Utilization.	We	continue	to	invest	in	the	integration	and	expansion	of	our	information	systems	and	technology	platform.	Our	future	platform	will	consist	of	best-in-class	legacy	systems from	both	Republic	and	Allied.	During	2009,	we	converted	the	entire	company	to	a	single	payable	and	general	ledger	system.	Additionally,	we	made	significant	progress	in	converting	to	a	single operating	system.	We	expect	to	complete	our	operating	system	conversion	by	the	third	quarter	of	2010.	In	addition,	during	January	2010,	we	converted	the	entire	company	to	a	single	payroll	and	human resource	system.	Our	future	technology	related	initiatives	will	include	customer	relationship	management,	billing,	productivity	and	maintenance	systems.	We	believe	that	the	combination	of	these	systems will	prove	to	be	a	competitive	advantage	for	our	company.

For	certain	risks	related	to	our	operating	strategy,	see	Item	1A.	Risk	Factors.

# Growth	Strategy

Our	growth	strategy	focuses	on	increasing	revenue,	gaining	market	share	and	enhancing	shareholder	value	through	internal	growth	and	acquisitions.	We	manage	our	growth	strategy	as	follows:

Internal	Growth.	Our	internal	growth	strategy	focuses	on	retaining	existing	customers	and	obtaining	new	commercial,	municipal	and	industrial	customers	through	our	well-managed	sales	and	marketing activities.

•		Pricing	Activities.	We	seek	to	secure	price	increases	necessary	to	offset	increased	costs,	to	improve	our	operating	margins	and	to	obtain	adequate	returns	on	our	substantial	investments	in	assets such	as	our	landfills.	During	2009,	we	continued	to	secure	broad-based	price	increases	across	all	lines	of	our	business	to	offset	various	escalating	capital	and	operating	costs.	Price	increases	will remain	a	major	component	of	our	overall	future	operating	strategy.

•		Long-Term	Contracts.	We	seek	to	obtain	long-term	contracts	for	collecting	solid	waste	in	markets	with	growing	populations.	These	include	exclusive	franchise	agreements	with	municipalities	as well	as	commercial	and	industrial	contracts.	By	obtaining	such	long-term	agreements,	we	have	the	opportunity	to	grow	our	contracted	revenue	base	at	the	same	rate	as	the	underlying	population growth	in	these	markets.	We	believe	it	is	important	to	have	secured	exclusive,	long-term	franchise	agreements	in	growing	market	areas.	We	believe	that	this	positions	us	to	experience	internal growth	rates	that	are	generally	higher	than	our	industry's	overall	growth	rate.	In	addition,	we	believe	that	by	securing	a	base	of	long-term	recurring	revenue	in	growing	population	markets,	we	are better	able	to	protect	our	market	position	from	competition	and	our	business	may	be	less	susceptible	to	downturns	in	economic	conditions.

•		Sales	and	Marketing	Activities.	We	seek	to	manage	our	sales	and	marketing	activities	to	enable	us	to	capitalize	on	our	leading	position	in	many	of	the	markets	in	which	we	operate.	We	provide	a National	Accounts	program	in	response	to	the	needs	of	our	national	clients,	centralizing	services	to	effectively	manage	their	needs,	such	as	minimizing	their	procurement	costs.	We	currently	have approximately	1,000	sales	and	marketing	employees	in	the	field	who	are	compensated	using	a	commission	structure	that	is	focused	on	generating	high	levels	of	quality	revenue.	For	the	most	part, these	employees	directly	solicit	business	from	existing	and	prospective	commercial,	industrial,	municipal	and	residential	customers.	We	emphasize	our	rate	and	cost	structures	when	we	train	new and	existing	sales	personnel.	In	addition,	we	utilize	a	customer	relationship	management	system	that	assists	our	sales	people	in	tracking	leads.	It	also	tracks	renewal	periods	for	potential commercial,	industrial	and	franchise	contracts.

•		Development	Activities.	We	seek	to	identify	opportunities	to	further	our	position	as	an	integrated	service	provider	in	markets	where	we	provide	services	for	a	portion	of	the	waste	stream.	Where appropriate,	we	seek	to	obtain	permits	to	build	transfer	stations,	recycling	facilities,	and	landfills	that	would	provide	vertically	integrated	waste	services	or	expand	the	service	areas	for	our	existing disposal	sites.	Development	projects,	while	generally	less	capital	intensive	than	acquiring	such	projects,	typically	require	extensive	permitting	efforts	that	can	take	years	to	complete	with	no assurance	of	success.	We	undertake	development	projects	when	we	believe	there	is	a	reasonable	probability	of	success	and	where	reasonably	priced	acquisition	opportunities	are	not	available.

Acquisition	Growth.	We	look	to	acquire	businesses	that	complement	our	existing	business	platform.	Our	acquisition	growth	strategy	focuses	primarily	on	privately	held	solid	waste	companies	and	the waste	operations	of	municipal	and	other	local	governmental	authorities.	We	believe	that	our	ability	to	acquire	privately	held	companies	is	enhanced	by	increasing	competition	in	the	solid	waste	industry, increasing	capital	requirements	as	a	result	of	changes	in	solid	waste	regulatory	requirements,	and	the	limited	number	of	exit	strategies	for	these	privately	held	companies'	owners.	We	also	seek	to	acquire operations	and	facilities	from	municipalities	that	are	privatizing,	as	they	seek	to	increase	available	capital	and	reduce	risk.	In	addition,	we	will	continue	to	evaluate	opportunities	to	acquire	operations	and facilities	that	are	being	divested	by	other	publicly	owned	waste	companies.	In	sum,	our	acquisition	growth	strategy	focuses	primarily	on	the	following:

•		acquiring	privately	held	businesses	that	position	us	for	growth	in	existing	and	new	markets,

•		acquiring	well-managed	companies	and,	when	appropriate,	retaining	local	management,	and

•		acquiring	operations	and	facilities	from	municipalities	that	are	privatizing	and	from	publicly	owned	companies	that	are	divesting	of	assets.

We	also	seek	to	acquire	landfills,	transfer	stations	and	collection	companies	that	operate	in	markets	that	we	are	already	servicing	in	order	to	fully	integrate	our	operations	from	collection	to	disposal.	In addition,	we	have	in	the	past	and	may	continue	in	the	future	to	exchange	businesses	with	other	solid	waste	companies	if	by	doing	so	there	is	a	net	benefit	to	our	business	platform.	These	activities	allow	us to	increase	our	revenue	and	market	share,	lower	our	cost	of	operations	as	a	percentage	of	revenue,	and	consolidate	duplicative	facilities	and	functions	to	maximize	cost	efficiencies	and	economies	of scale.

For	certain	risks	related	to	our	growth	strategy,	see	Item	1A.	Risk	Factors.

# Operations

Our	operations	primarily	consist	of	the	collection,	transfer	and	disposal	of	non-hazardous	solid	waste.

Collection	Services.	We	provide	solid	waste	collection	services	to	commercial,	industrial,	municipal	and	residential	customers	through	376	collection	companies.	In	2009,	76.9%	of	our	revenue	was derived	from	collection	services.	Within	the	collection	line	of	business,	35%	of	our	revenue	is	from	services	provided	to	municipal	and	residential	customers,	40%	is	from	services	provided	to	commercial customers,	and	25%	is	from	services	provided	to	industrial	and	other	customers.

Our	residential	collection	operations	involve	the	curbside	collection	of	refuse	from	small	containers	into	collection	vehicles	for	transport	to	transfer	stations	or	directly	to	landfills.	Residential	solid	waste collection	services	are	typically	performed	under	contracts	with	municipalities,	which	we	generally	secure	by	competitive	bid	and	which	give	us	exclusive	rights	to	service	all	or	a	portion	of	the	homes	in their	respective	jurisdictions.	These	contracts	or	franchises	usually	range	in	duration	from	one	to	five	years,	although	some	of	our	exclusive	franchises	are	for	significantly	longer	periods.	Residential solid	waste	collection	services	may	also	be	performed	on	a	subscription	basis,	in	which	individual	households	contract	directly	with	us.	The	fees	received	for	subscription	residential	collection	are	based primarily	on	market	factors,	frequency	and	type	of	service,	the	distance	to	the	disposal	facility	and	the	cost	of	disposal.	In	general,	subscription	residential	collection	fees	are	paid	quarterly	in	advance	by the	residential	customers	receiving	the	service.

In	our	commercial	and	industrial	collection	operations,	we	supply	our	customers	with	waste	containers	of	varying	sizes.	We	also	rent	compactors	to	large	waste	generators.	Commercial	collection services	are	generally	performed	under	one-	to	three-year	service	agreements,	and	fees	are	determined	by	considerations	such	as	market	factors,	collection	frequency,	type	of	equipment	furnished,	the	type and	volume	or	weight	of	the	waste	collected,	transportation	costs,	the	distance	to	the	disposal	facility,	and	the	cost	of	disposal.

We	also	provide	waste	collection	services	to	industrial	and	construction	facilities	on	a	contractual	basis	with	terms	ranging	from	a	single	pickup	to	one	year	or	longer.	Our	construction	services	are provided	to	the	commercial	construction	and	home	building	sectors.	We	collect	the	containers	or	compacted	waste	and	transport	the	waste	either	to	a	landfill	or	a	transfer	station	for	disposal.

We	also	provide	recycling	services	in	certain	markets	in	compliance	with	local	laws	or	the	terms	of	our	franchise	agreements.	These	services	include	the	curbside	collection	of	residential	recyclable	waste and	the	provision	of	a	variety	of	recycling	services	to	commercial	and	industrial	customers.

Transfer	and	Disposal	Services.	We	own	or	operate	223	transfer	stations.	We	deposit	waste	at	these	transfer	stations,	as	do	other	private	haulers	and	municipal	haulers,	for	compaction	and	transfer	to trailers	for	transport	to	disposal	sites	or	recycling	facilities.	In	2009,	transfer	and	disposal	services	accounted	for	18.9%	of	our	revenue.

As	of	December	31,	2009,	we	owned	or	operated	192	active	landfills,	which	had	approximately	35,000	permitted	acres	and	total	available	permitted	and	probable	expansion	disposal	capacity	of approximately	4.6	billion	in-place	cubic	yards.	The	in-place	capacity	of	our	landfills	is	subject	to	change	based	on	engineering	factors,	requirements	of	regulatory	authorities,	our	ability	to	continue	to operate	our	landfills	in	compliance	with	applicable	regulations,	and	our	ability	to	successfully	renew	operating	permits	and	obtain

expansion	permits	at	our	sites.	Some	of	our	landfills	accept	non-hazardous	special	waste,	including	utility	ash,	asbestos	and	contaminated	soils.

Most	of	our	active	landfill	sites	have	the	potential	for	expanded	disposal	capacity	beyond	the	currently	permitted	acreage.	We	monitor	the	availability	of	permitted	disposal	capacity	at	each	of	our landfills	and	evaluate	whether	to	pursue	an	expansion	at	a	given	landfill	based	on	estimated	future	waste	volumes	and	prices,	market	needs,	remaining	capacity	and	likelihood	of	obtaining	an	expansion. To	satisfy	future	disposal	demand,	we	are	currently	seeking	to	expand	permitted	capacity	at	certain	of	our	landfills.	However,	we	cannot	assure	you	that	all	proposed	or	future	expansions	will	be permitted	as	designed.

We	also	have	responsibility	for	132	closed	landfills,	for	which	we	have	associated	closure	and	post-closure	obligations.

Landfill	Gas	and	Renewable	Energy	Projects.	During	2009,	we	brought	eleven	landfill	gas-to-energy	projects	on	line,	bringing	our	total	number	of	such	projects	to	74	or	over	one	third	of	our	active landfills.	These	projects	consist	of	the	following:

•		51	electric	generating	plants	powered	by	landfill	gas,

•		14	medium	Btu	plants	that	provide	landfill	gas	to	industrial	users,

•		6	high	Btu	plants	that	produce	pipeline	quality	gas,	and

•		3	projects	that	use	landfill	gas	to	power	leachate	evaporating	equipment.

Our	51	electric	projects	generate	323	megawatts	of	electricity,	enough	to	power	approximately	192,000	homes.	Our	23	other	projects	provide	or	process	more	than	58,000	square	cubic	feet	per	minute	of gas,	enough	to	heat	almost	200,000	homes.	The	environmental	benefit	of	all	of	our	projects	combined	is	the	equivalent	of	removing	nearly	4	million	cars	from	the	road.

During	2009,	we	also	combined	a	first-of-its-kind	solar	technology	with	an	existing	gas-to-energy	system	which	turned	our	Tessman	Road	Landfill	in	San	Antonio,	Texas	into	a	sustainable	energy	park. A	closed	portion	of	the	landfill	is	now	capped	with	a	Solar	Energy	Cover,	developed	by	Republic,	which	generates	electricity	for	homes	and	businesses	in	the	surrounding	area.	We	expect	to	install	a similar	system	at	one	or	more	of	our	landfills	during	2010.

Many	of	our	landfills	that	do	not	have	gas-to-energy	or	renewable	energy	projects	are	capable	of	supporting	such	projects.	As	a	result,	we	intend	to	bring	several	of	these	projects	on	line	each	year	for many	years	to	come.

Recycling	Facilities	and	Other	Services.	We	own	or	operate	78	materials	recovery	facilities	and	other	recycling	operations.	These	facilities	sort	recyclable	paper,	aluminum,	glass	and	other	materials. Most	of	these	recyclable	materials	are	internally	collected	by	our	residential	collection	operations.	In	some	areas,	we	receive	commercial	and	industrial	solid	waste	that	is	sorted	at	our	facilities	into recyclable	materials	and	non-recyclable	waste.	The	recyclable	materials	are	salvaged,	repackaged	and	sold	to	third	parties,	and	the	non-recyclable	waste	is	disposed	of	at	landfills	or	incinerators.

# Sales	and	Marketing

We	seek	to	provide	quality	services	that	will	enable	us	to	maintain	high	levels	of	customer	satisfaction.	We	derive	our	business	from	a	broad	customer	base,	which	we	believe	will	enable	us	to	experience stable	growth.	We	focus	our	marketing	efforts	on	continuing	and	expanding	our	business	with	existing	customers,	as	well	as	attracting	new	customers.

We	employ	approximately	1,000	sales	and	marketing	employees.	Our	sales	and	marketing	strategy	is	to	provide	high-quality,	comprehensive	solid	waste	collection,	recycling,	transfer	and	disposal services	to	our	customers	at	competitive	prices.	We	target	potential	customers	of	all	sizes,	from	small	quantity	generators	to	large	"Fortune	500"	companies	and	municipalities.

Most	of	our	marketing	activity	is	local	in	nature.	However,	we	also	provide	a	national	accounts	program	in	response	to	the	needs	of	some	of	our	national	and	regional	customers.	Our	national	accounts program	is	designed	to	provide	the	best	total	solution	to	our	customers'	evolving	waste	management	needs	in	an	environmentally	responsible	manner.	We	partner	with	our	national	clients	to	reach	their sustainability	goals,	optimize	waste	streams,	balance	equipment	and	service	intervals,	and	provide	customized	reporting.	The	national	accounts	program	centralizes	services	to	effectively	manage customer	needs,	while	helping	minimize	procurement	costs.	With	our	extended	geographic	reach,	our	national	accounts	program	effectively	serves	40	states	and	Puerto	Rico.	As	industry	leaders,	our mission	is	to	utilize	our	strengths	and	expertise	to	exceed	customer	expectations	by	consistently	delivering	the	best	national	program	available.

We	generally	do	not	change	the	trade	names	of	the	local	businesses	we	acquire,	and	therefore	we	do	not	operate	nationally	under	any	one	mark	or	trade	name.

# Customers

We	provide	services	to	a	broad	base	of	commercial,	industrial,	municipal	and	residential	customers.	No	one	customer	has	individually	accounted	for	more	than	5%	of	our	consolidated	revenue	or	of	our reportable	segment	revenue	in	any	of	the	last	three	years.

# Competition

We	operate	in	a	highly	competitive	industry.	Entry	into	our	business	and	the	ability	to	operate	profitably	in	the	industry	require	substantial	amounts	of	capital	and	managerial	experience.

Competition	in	the	non-hazardous	solid	waste	industry	comes	from	a	few	large,	national	publicly	owned	companies,	including	Waste	Management,	Inc.,	several	regional	publicly	and	privately	owned solid	waste	companies,	and	thousands	of	small	privately	owned	companies.	In	any	given	market,	competitors	may	have	larger	operations	and	greater	resources.	In	addition	to	national	and	regional	firms and	numerous	local	companies,	we	compete	with	municipalities	that	maintain	waste	collection	or	disposal	operations.	These	municipalities	may	have	financial	advantages	due	to	the	availability	of	tax revenue	and	tax-exempt	financing.

We	compete	for	collection	accounts	primarily	on	the	basis	of	price	and	the	quality	of	our	services.	From	time	to	time,	our	competitors	may	reduce	the	price	of	their	services	in	an	effort	to	expand	market share	or	to	win	a	competitively	bid	municipal	contract.	Our	ability	to	increase	prices	in	certain	markets	may	be	impacted	by	the	pricing	policies	of	our	competitors.	This	may	have	an	impact	on	our	future revenue	and	profitability.

# Seasonality	and	Severe	Weather

Our	operations	can	be	adversely	affected	by	periods	of	inclement	or	severe	weather,	which	could	increase	the	volume	of	waste	collected	under	our	existing	contracts	(without	corresponding compensation),	delay	the	collection	and	disposal	of	waste,	reduce	the	volume	of	waste	delivered	to	our	disposal	sites,	or	delay	the	construction	or	expansion	of	our	landfill	sites	and	other	facilities.

# Regulation

Our	facilities	and	operations	are	subject	to	a	variety	of	federal,	state	and	local	requirements	that	regulate	the	environment,	public	health,	safety,	zoning	and	land	use.	Operating	and	other	permits,	licenses and	other	approvals	generally	are	required	for	landfills	and	transfer	stations,	certain	solid	waste	collection	vehicles,	fuel	storage	tanks	and	other	facilities	that	we	own	or	operate.	These	permits	are	subject to	denial,	revocation,	modification	and	renewal	in	certain	circumstances.	Federal,	state	and	local	laws	and	regulations	vary,	but	generally	govern	wastewater	or	storm	water	discharges,	air	emissions,	the handling,	transportation,	treatment,	storage	and	disposal	of	hazardous	and	non-hazardous	waste,	and	the	remediation	of	contamination	associated	with	the	release	or	threatened	release	of	hazardous substances.	These	laws	and	regulations	provide	governmental	authorities	with	strict	powers	of	enforcement,	which	include	the	ability	to	revoke	or	decline	to	renew	any	of	our	operating	permits,	obtain injunctions,	or	impose	fines	or	penalties	in	the	case	of	violations,	including

criminal	penalties.	The	U.S.	Environmental	Protection	Agency	(EPA)	and	various	other	federal,	state	and	local	authorities	administer	these	regulations.

We	strive	to	conduct	our	operations	in	compliance	with	applicable	laws,	regulations	and	permits.	However,	in	the	existing	climate	of	heightened	environmental	concerns,	from	time	to	time	we	have	been issued	citations	or	notices	from	governmental	authorities	that	have	resulted	in	the	need	to	expend	funds	for	remedial	work	and	related	activities	at	various	landfills	and	other	facilities.	We	cannot	assure you	that	citations	and	notices	will	not	be	issued	in	the	future	despite	our	regulatory	compliance	efforts.	We	have	established	final	capping,	closure,	post-closure	and	remediation	liabilities	that	we	believe, based	on	currently	available	information,	will	be	adequate	to	cover	our	current	estimates	of	regulatory	costs.	However,	we	cannot	assure	you	that	actual	costs	will	not	exceed	our	reserves.	Refer	to	the Contractual	Obligations	table	within	Item	7.	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations"	contained	elsewhere	herein	for	further	information.

Federal	Regulation.	The	following	summarizes	the	primary	federal	environmental	and	occupational	health	and	safety-related	statutes	that	affect	our	facilities	and	operations:

•		The	Solid	Waste	Disposal	Act,	including	the	Resource	Conservation	and	Recovery	Act	(RCRA).	RCRA	establishes	a	framework	for	regulating	the	handling,	transportation,	treatment,	storage	and disposal	of	hazardous	and	non-hazardous	solid	waste,	and	requires	states	to	develop	programs	to	ensure	the	safe	disposal	of	solid	waste	in	sanitary	landfills.

Subtitle	D	of	RCRA	establishes	a	framework	for	regulating	the	disposal	of	municipal	solid	waste.	Regulations	under	Subtitle	D	currently	include	minimum	comprehensive	solid	waste	management criteria	and	guidelines,	including	location	restrictions,	facility	design	and	operating	criteria,	final	capping,	closure	and	post-closure	requirements,	financial	assurance	standards,	groundwater monitoring	requirements	and	corrective	action	standards,	many	of	which	had	not	commonly	been	in	effect	or	enforced	in	the	past	in	connection	with	municipal	solid	waste	landfills.	Each	state	was required	to	submit	to	the	EPA	a	permit	program	designed	to	implement	Subtitle	D	regulations	by	April	9,	1993.	All	of	the	states	in	which	we	operate	have	implemented	permit	programs	pursuant	to RCRA	and	Subtitle	D.	These	state	permit	programs	may	include	landfill	requirements	which	are	more	stringent	than	those	of	Subtitle	D.	Our	failure	to	comply	with	the	environmental	requirements	of federal,	state	and	local	authorities	at	any	of	our	locations	may	lead	to	temporary	or	permanent	loss	of	an	operating	permit.

All	of	our	planned	landfill	expansions	and	new	landfill	development	projects	have	been	engineered	to	meet	or	exceed	Subtitle	D	requirements.	Operating	and	design	criteria	for	existing	operations have	been	modified	to	comply	with	these	regulations.	Compliance	with	Subtitle	D	regulations	has	resulted	in	increased	costs	and	may	in	the	future	require	substantial	additional	expenditures	in addition	to	other	costs	normally	associated	with	our	waste	management	activities.

•		The	Comprehensive	Environmental	Response,	Compensation	and	Liability	Act	of	1980	(CERCLA).	CERCLA,	among	other	things,	provides	for	the	cleanup	of	sites	from	which	there	is	a	release	or threatened	release	of	a	hazardous	substance	into	the	environment.	CERCLA	may	impose	strict	joint	and	several	liability	for	the	costs	of	cleanup	and	for	damages	to	natural	resources	upon	current owners	and	operators	of	a	site,	parties	who	were	owners	or	operators	of	a	site	at	the	time	the	hazardous	substances	were	disposed	of,	parties	who	transported	the	hazardous	substances	to	a	site	and parties	who	arranged	for	the	disposal	of	the	hazardous	substances	at	a	site.	Under	the	authority	of	CERCLA	and	its	implementing	regulations,	detailed	requirements	apply	to	the	manner	and	degree of	investigation	and	remediation	of	facilities	and	sites	where	hazardous	substances	have	been	or	are	threatened	to	be	released	into	the	environment.	Liability	under	CERCLA	is	not	dependent	on	the existence	or	disposal	of	only	"hazardous	wastes,"	but	can	also	be	based	upon	the	existence	of	small	quantities	of	more	than	700	"substances"	characterized	by	the	EPA	as	"hazardous,"	many	of which	are	found	in	common	household	waste.

Among	other	things,	CERCLA	authorizes	the	federal	government	to	investigate	and	remediate	sites	at	which	hazardous	substances	have	been	or	are	threatened	to	be	released	into	the	environment	or to	order	(or	offer	an	opportunity	to)	persons	potentially	liable	for	the	cleanup	of	the	hazardous	substances	to	do	so.

In	addition,	the	EPA	has	established	a	National	Priorities	List	of	sites	at	which	hazardous	substances	have	been	or	are	threatened	to	be	released	and	which	require	investigation	or	cleanup.

CERCLA	liability	is	strict	liability.	It	can	be	founded	upon	the	release	or	threatened	release,	even	as	a	result	of	unintentional,	non-negligent	or	lawful	action,	of	hazardous	substances,	including	very small	quantities	of	such	substances.	Thus,	even	if	we	have	never	knowingly	transported	or	received	hazardous	waste,	it	is	likely	that	hazardous	substances	have	been	deposited	or	"released"	at landfills	or	other	properties	owned	by	third	parties	where	we	have	transported	to	and	disposed	of	waste	or	at	our	landfills	or	at	other	properties	that	we	currently	own	or	operate	or	may	have	owned or	operated.	Therefore,	we	could	be	liable	under	CERCLA	for	the	cost	of	cleaning	up	such	hazardous	substances	at	such	sites	and	for	damages	to	natural	resources,	even	if	those	substances	were deposited	at	our	facilities	before	we	acquired	or	operated	them.	The	costs	of	a	CERCLA	cleanup	can	be	very	expensive.	Given	the	difficulty	of	obtaining	insurance	for	environmental	impairment liability,	such	liability	could	have	a	material	impact	on	our	business,	financial	condition,	results	of	operations	and	cash	flows.

•		The	Federal	Water	Pollution	Control	Act	of	1972	(the	Clean	Water	Act).	This	act	regulates	the	discharge	of	pollutants	from	a	variety	of	sources,	including	solid	waste	disposal	sites,	into	streams, rivers	and	other	waters	of	the	United	States.	Point	source	runoff	from	our	landfills	and	transfer	stations	that	is	discharged	into	surface	waters	must	be	covered	by	discharge	permits	that	generally require	us	to	conduct	sampling	and	monitoring,	and,	under	certain	circumstances,	reduce	the	quantity	of	pollutants	in	those	discharges.	Storm	water	discharge	regulations	under	the	Clean	Water	Act require	a	permit	for	certain	construction	activities	and	discharges	from	industrial	operations	and	facilities,	which	may	affect	our	operations.	If	a	landfill	or	transfer	station	discharges	wastewater through	a	sewage	system	to	a	publicly	owned	treatment	works,	the	facility	must	comply	with	discharge	limits	imposed	by	that	treatment	works.	In	addition,	states	may	adopt	groundwater	protection programs	under	the	Clean	Water	Act	or	the	Safe	Drinking	Water	Act	that	could	affect	solid	waste	landfills.	Furthermore,	development	which	alters	or	affects	wetlands	generally	must	be	permitted prior	to	such	development	commencing,	and	permitting	agencies	may	require	mitigation.

•		The	Clean	Air	Act.	The	Clean	Air	Act	imposes	limitations	on	emissions	from	various	sources,	including	landfills.	In	March	1996,	the	EPA	promulgated	regulations	that	require	large	municipal solid	waste	landfills	to	install	landfill	gas	monitoring	systems.	These	regulations	apply	to	landfills	that	commenced	construction,	reconstruction	or	modification	on	or	after	May	30,	1991,	and, principally,	to	landfills	that	can	accommodate	2.5	million	cubic	meters	or	more	of	municipal	solid	waste.	The	regulations	apply	whether	the	landfill	is	active	or	closed.	The	date	by	which	each affected	landfill	is	required	to	have	a	gas	collection	and	control	system	installed	and	made	operational	varies	depending	on	calculated	emission	rates	at	the	landfill.	Efforts	to	curtail	the	emission	of greenhouse	gases	and	to	ameliorate	the	effect	of	climate	change	may	require	our	landfills	to	deploy	more	stringent	emission	controls,	with	resulting	capital	or	operating	costs.	See	Item	1A.	Risk Factors	—	"Regulation	of	greenhouse	gas	emissions	could	impose	costs	on	our	operations,	the	magnitude	of	which	we	cannot	yet	estimate."	Many	state	regulatory	agencies	also	currently	require monitoring	systems	for	the	collection	and	control	of	certain	landfill	gas.

•		The	Occupational	Safety	and	Health	Act	of	1970	(OSHA).	OSHA	authorizes	the	Occupational	Safety	and	Health	Administration	of	the	U.S.	Department	of	Labor	to	promulgate	occupational	safety and	health	standards.	A	number	of	these	standards,	including	standards	for	notices	of	hazardous	chemicals	and	the	handling	of	asbestos,	apply	to	our	facilities	and	operations.

State	and	Local	Regulation.	Each	state	in	which	we	operate	has	its	own	laws	and	regulations	governing	solid	waste	disposal,	water	and	air	pollution,	and,	in	most	cases,	releases	and	cleanup	of hazardous	substances	and	liabilities	for	such	matters.	States	also	have	adopted	regulations	governing	the	design,	operation,	maintenance	and	closure	of	landfills	and	transfer	stations.	Some	counties, municipalities	and	other	local	governments	have	adopted	similar	laws	and	regulations.	Our	facilities	and	operations	are	likely	to	be	subject	to	these	types	of	requirements.	In	addition,	our	solid	waste collection	and	landfill	operations	may	be	affected	by	the	trend	in	many	states	toward	requiring	the	development	of	solid	waste	reduction	and	recycling	programs.	For	example,	several	states	have	enacted laws	that	require	counties	or	municipalities	to	adopt	comprehensive	plans	to	reduce,	through	solid	waste	planning,	composting,	recycling	or	other	programs,	the	volume	of	solid	waste	deposited	in

landfills.	Additionally,	laws	and	regulations	restricting	the	disposal	of	certain	waste	in	solid	waste	landfills,	including	yard	waste,	newspapers,	beverage	containers,	unshredded	tires,	lead-acid	batteries, electronic	wastes	and	household	appliances,	have	been	promulgated	in	several	states	and	are	being	considered	in	others.	Legislative	and	regulatory	measures	to	mandate	or	encourage	waste	reduction	at the	source	and	waste	recycling	also	have	been	or	are	under	consideration	by	the	U.S.	Congress	and	the	EPA.

To	construct,	operate	and	expand	a	landfill,	we	must	obtain	one	or	more	construction	or	operating	permits,	as	well	as	zoning	and	land	use	approvals.	These	permits	and	approvals	may	be	difficult	and time-consuming	to	obtain	and	to	operate	in	compliance	with,	are	often	opposed	by	neighboring	landowners	and	citizens'	groups,	may	be	subject	to	periodic	renewal,	and	are	subject	to	denial, modification,	non-renewal	and	revocation	by	the	issuing	agency.	In	connection	with	our	acquisition	of	existing	landfills,	we	may	be	required	to	expend	considerable	time,	effort	and	money	to	bring	the acquired	facilities	into	compliance	with	applicable	requirements	and	to	obtain	the	permits	and	approvals	necessary	to	increase	their	capacity.

Other	Regulations.	Many	of	our	facilities	own	and	operate	underground	storage	tanks	that	are	generally	used	to	store	petroleum-based	products.	These	tanks	are	generally	subject	to	federal,	state	and local	laws	and	regulations	that	mandate	their	periodic	testing,	upgrading,	closure	and	removal,	and	that,	in	the	event	of	leaks,	require	that	polluted	groundwater	and	soils	be	remediated.	We	believe	that	all of	our	underground	storage	tanks	currently	meet	all	applicable	regulations.	If	underground	storage	tanks	we	own	or	operate	leak,	we	could	be	liable	for	response	costs	and,	if	the	leakage	migrates	onto	the property	of	others,	we	could	be	liable	for	damages	to	third	parties.	We	are	unaware	of	facts	indicating	that	issues	of	compliance	with	regulations	related	to	underground	storage	tanks	will	have	a	material adverse	effect	on	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.

With	regard	to	our	solid	waste	transportation	operations,	we	are	subject	to	the	jurisdiction	of	the	Surface	Transportation	Board	and	are	regulated	by	the	Federal	Highway	Administration,	Office	of	Motor Carriers,	and	by	regulatory	agencies	in	states	that	regulate	such	matters.	Various	states	and	local	government	authorities	have	enacted	or	promulgated,	or	are	considering	enacting	or	promulgating,	laws and	regulations	that	would	restrict	the	transportation	of	solid	waste	across	state,	county,	or	other	jurisdiction	lines.	In	1978,	the	U.S.	Supreme	Court	ruled	that	a	law	that	restricts	the	importation	of out-of-state	solid	waste	was	unconstitutional;	however,	states	have	attempted	to	distinguish	proposed	laws	from	those	involved	in	and	implicated	by	that	ruling.	In	1994,	the	Supreme	Court	ruled	that	a flow	control	law,	which	attempted	to	restrict	solid	waste	from	leaving	its	place	of	generation,	imposed	an	impermissible	burden	upon	interstate	commerce,	and,	therefore,	was	unconstitutional.	In	2007, the	Supreme	Court	upheld	the	right	of	a	local	government	to	direct	the	flow	of	solid	waste	to	a	publicly	owned	waste	facility.	A	number	of	county	and	other	local	jurisdictions	have	enacted	ordinances	or other	regulations	restricting	the	free	movement	of	solid	waste	across	jurisdictional	boundaries.	Other	governments	may	enact	similar	regulations	in	the	future.	These	regulations	may,	in	some	cases,	cause a	decline	in	volumes	of	waste	delivered	to	our	landfills	or	transfer	stations	and	may	increase	our	costs	of	disposal,	thereby	adversely	affecting	our	operations.

Liabilities	Established	for	Landfill	and	Environmental	Costs.	We	have	established	liabilities	for	landfill	and	environmental	costs,	which	include	landfill	site	final	capping,	closure	and	post-closure	costs. We	periodically	reassess	such	costs	based	on	various	methods	and	assumptions	regarding	landfill	airspace	and	the	technical	requirements	of	Subtitle	D	of	RCRA,	and	we	adjust	our	rates	used	to	expense final	capping,	closure	and	post-closure	costs	accordingly.	Based	on	current	information	and	regulatory	requirements,	we	believe	that	our	liabilities	recorded	for	such	landfill	and	environmental expenditures	are	adequate.	However,	environmental	laws	may	change,	and	we	cannot	assure	you	that	our	recorded	liabilities	will	be	adequate	to	cover	requirements	under	existing	or	new	environmental laws	and	regulations,	future	changes	or	interpretations	of	existing	laws	and	regulations,	or	adverse	environmental	conditions	previously	unknown	to	us.

# Liability	Insurance	and	Bonding

The	nature	of	our	business	exposes	us	to	the	risk	of	liabilities	arising	out	of	our	operations,	including	possible	damages	to	the	environment.	Such	potential	liabilities	could	involve,	for	example,	claims	for remediation	costs,	personal	injury,	property	damage	and	damage	to	the	environment	in	cases	where	we	may	be	held

responsible	for	the	escape	of	harmful	materials;	claims	of	employees,	customers	or	third	parties	for	personal	injury	or	property	damage	occurring	in	the	course	of	our	operations;	or	claims	alleging negligence	or	other	wrongdoing	in	the	planning	or	performance	of	work.	We	could	also	be	subject	to	fines	and	civil	and	criminal	penalties	in	connection	with	alleged	violations	of	regulatory requirements.	Because	of	the	nature	and	scope	of	the	possible	environmental	damages,	liabilities	imposed	in	environmental	litigation	can	be	significant.	Our	solid	waste	operations	have	third	party environmental	liability	insurance	with	limits	in	excess	of	those	required	by	permit	regulations,	subject	to	certain	limitations	and	exclusions.	However,	we	cannot	assure	you	that	such	environmental liability	insurance	would	be	adequate,	in	scope	or	amount,	in	the	event	of	a	major	loss,	nor	can	we	assure	you	that	we	would	continue	to	carry	excess	environmental	liability	insurance	should	market conditions	in	the	insurance	industry	make	such	coverage	costs	prohibitive.

We	have	general	liability,	vehicle	liability,	employment	practices	liability,	pollution	liability,	directors	and	officers'	liability,	workers'	compensation	and	employer's	liability	coverage,	as	well	as	umbrella liability	policies	to	provide	excess	coverage	over	the	underlying	limits	contained	in	these	primary	policies.	We	also	carry	property	insurance.	Although	we	try	to	operate	safely	and	prudently	and	we	have, subject	to	limitations	and	exclusions,	substantial	liability	insurance,	we	cannot	assure	you	that	we	will	not	be	exposed	to	uninsured	liabilities	that	could	have	a	material	adverse	effect	on	our	consolidated financial	condition,	results	of	operations	and	cash	flows.

Our	insurance	programs	for	workers'	compensation,	general	liability,	vehicle	liability	and	employee-related	health	care	benefits	are	effectively	self-insured.	Claims	in	excess	of	self-insurance	levels	are insured	subject	to	the	excess	policy	limits	and	exclusions.	Accruals	are	based	on	claims	filed	and	actuarial	estimates	of	claims	development	and	claims	incurred	but	not	reported.	Due	to	the	variable condition	of	the	insurance	market,	we	have	experienced,	and	may	experience	in	the	future,	increased	self-insurance	retention	levels	and	increased	premiums.	As	we	assume	more	risk	for	self-insurance through	higher	retention	levels,	we	may	experience	more	variability	in	our	self-insurance	reserves	and	expense.

In	the	normal	course	of	business,	we	post	performance	bonds,	insurance	policies,	letters	of	credit,	or	cash	or	marketable	securities	deposits	in	connection	with	municipal	residential	collection	contracts, the	operation,	closure	or	post-closure	of	landfills,	environmental	remediation,	environmental	permits,	and	business	licenses	and	permits	as	a	financial	guarantee	of	our	performance.	To	date,	we	have satisfied	financial	responsibility	requirements	by	making	cash	or	marketable	securities	deposits	or	by	obtaining	bank	letters	of	credit,	insurance	policies	or	surety	bonds.

# Employees

As	of	December	31,	2009,	we	employed	approximately	31,000	full-time	employees,	approximately	27%	of	whom	were	covered	by	collective	bargaining	agreements.	From	time	to	time,	our	operating locations	may	experience	union	organizing	efforts.	We	have	not	historically	experienced	any	significant	work	stoppages.	We	currently	have	no	disputes	or	bargaining	circumstances	that	we	believe	could cause	significant	disruptions	in	our	business.	Our	management	believes	that	we	have	good	relations	with	our	employees.

# Availability	of	Reports	and	Other	Information

Our	corporate	website	is	http://www.republicservices.com.	We	make	available	on	this	website,	free	of	charge,	access	to	our	Annual	Reports	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q,	Current Reports	on	Form	8-K,	Proxy	Statements	on	Schedule	14A	and	amendments	to	those	materials	filed	or	furnished	pursuant	to	Section	13(a)	or	15(d)	of	the	Securities	and	Exchange	Act	of	1934.	We	make such	materials	available	as	soon	as	reasonably	practicable	after	we	electronically	submit	them	to	the	Securities	and	Exchange	Commission	(SEC).	Our	corporate	website	also	contains	our	Corporate Governance	Guidelines,	Code	of	Ethics	and	Charters	of	the	Nominating	and	Corporate	Governance	Committee,	Audit	Committee	and	Compensation	Committee	of	the	Board	of	Directors.	In	addition,	the SEC	website	is	http://www.sec.gov.	The	SEC	makes	available	on	this	website,	free	of	charge,	reports,	proxy	and	information	statements,	and	other	information	regarding	issuers,	such	as	us,	that	file electronically	with	the	SEC.	Information	on	our	website	or	the	SEC	website	is	not	part	of	this	Annual	Report	on	Form	10-K.	We	intend	to	satisfy	the	disclosure	requirements	under	Item	5.05	of

Form	8-K	and	applicable	New	York	Stock	Exchange	(NYSE)	rules	regarding	amendments	to	or	waivers	of	our	Code	of	Ethics	by	posting	this	information	on	our	website	at	www.republicservices.com.

This	Annual	Report	on	Form	10-K	contains	certain	forward-looking	information	about	us	that	is	intended	to	be	covered	by	the	safe	harbor	for	"forward-looking	statements"	provided	by	the	Private Securities	Litigation	Reform	Act	of	1995.	Forward-looking	statements	are	statements	that	are	not	historical	facts.	Words	such	as	"expect,"	"will,"	"may,"	"anticipate,"	"plan,"	"estimate,"	"project," "intend,"	"should,"	"can,"	"likely,"	"could"	and	similar	expressions	are	intended	to	identify	forward-looking	statements.	These	statements	include	statements	about	the	expected	benefits	of	the	merger, our	plans,	strategies	and	prospects.	Forward-looking	statements	are	not	guarantees	of	performance.	These	statements	are	based	upon	the	current	beliefs	and	expectations	of	our	management	and	are subject	to	risk	and	uncertainties,	including	the	risks	set	forth	below	in	these	risk	factors,	which	could	cause	actual	results	to	differ	materially	from	those	expressed	in,	or	implied	or	projected	by,	the forward-looking	information	and	statements.

In	light	of	these	risks,	uncertainties,	assumptions	and	factors,	the	results	anticipated	by	the	forward-looking	statements	discussed	in	this	Annual	Report	on	Form	10-K	may	not	occur.	You	should	not	place undue	reliance	on	these	forward-looking	statements,	which	speak	only	as	of	the	date	of	this	Annual	Report	on	Form	10-K.	Except	to	the	extent	required	by	applicable	law	or	regulation,	we	undertake	no obligation	to	update	or	publish	revised	forward-looking	statements	to	reflect	events	or	circumstances	after	the	date	of	this	Annual	Report	on	Form	10-K	or	to	reflect	the	occurrence	of	unanticipated events.

# We	have	substantial	indebtedness,	which	may	limit	our	financial	flexibility.

As	of	December	31,	2009,	we	had	approximately	$7.4	billion	in	principal	value	of	debt	and	capital	leases	outstanding.	This	amount	of	indebtedness	and	our	debt	service	requirements	may	limit	our financial	flexibility	to	access	additional	capital	and	make	capital	expenditures	and	other	investments	in	our	business,	to	withstand	economic	downturns	and	interest	rate	increases,	to	plan	for	or	react	to changes	in	our	business	and	our	industry,	and	to	comply	with	the	financial	and	other	restrictive	covenants	of	our	debt	instruments.	Further,	our	ability	to	comply	with	the	financial	and	other	covenants contained	in	our	debt	instruments	may	be	affected	by	changes	in	economic	or	business	conditions	or	other	events	that	are	beyond	our	control.	If	we	do	not	comply	with	these	covenants	and	restrictions, we	may	be	required	to	take	actions	such	as	reducing	or	delaying	capital	expenditures,	reducing	dividends,	selling	assets,	restructuring	or	refinancing	all	or	part	of	our	existing	debt,	or	seeking	additional equity	capital.

# The	downturn	in	the	U.S.	economy	may	continue	to	have	an	adverse	impact	on	our	operating	results.

A	weak	economy	generally	results	in	decreases	in	the	volumes	of	waste	generated.	In	2009,	weakness	in	the	U.S.	economy	had	a	negative	effect	on	our	revenue,	operating	results	and	operating	cash flows.	The	current	and	previous	economic	slowdowns	have	negatively	impacted	the	portion	of	our	collection	business	servicing	the	manufacturing	and	construction	industries	and	our	proceeds	from	sales of	recycled	commodities.	As	a	result	of	the	global	economic	crisis,	we	may	experience	the	negative	effects	of	increased	competitive	pricing	pressure	and	customer	turnover	as	well.	We	cannot	assure	you that	worsening	economic	conditions	or	a	prolonged	or	recurring	recession	will	not	have	a	significant	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.	Further, we	cannot	assure	you	that	an	improvement	in	economic	conditions	will	result	in	an	immediate,	or	any,	improvement	in	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.

# The	downturn	in	the	U.S.	economy	may	expose	us	to	credit	risk	for	amounts	due	from	governmental	agencies,	large	national	accounts	and	others.

The	weak	U.S.	economy	has	reduced	the	amount	of	taxes	collected	by	various	governmental	agencies.	We	provide	services	to	a	number	of	these	agencies	including	numerous	municipalities.	These governmental	agencies	may	suffer	financial	difficulties	resulting	from	a	decrease	in	tax	revenue	and	may	ultimately	be

unable	or	unwilling	to	pay	amounts	owed	to	us.	In	addition,	the	weak	economy	may	cause	other	customers,	including	our	large	national	accounts,	to	suffer	financial	difficulties	and	ultimately	to	be	unable or	unwilling	to	pay	amounts	owed	to	us.	This	could	have	a	negative	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# The	downturn	in	the	U.S.	economy	and	in	the	financial	markets	could	expose	us	to	counter-party	risk	associated	with	our	derivatives.

To	reduce	our	exposure	to	fluctuations	in	various	commodities	and	interest	rates,	we	have	entered	into	a	number	of	derivative	agreements.	These	derivative	agreements	require	us	or	the	counter-party	to such	agreements	to	make	payments	to	the	other	party	if	the	price	of	certain	commodities	or	interest	rates	vary	from	a	specified	amount.	A	continued	downturn	in	the	U.S.	economy	or	in	the	financial markets	could	adversely	impact	the	financial	stability	of	the	counter-parties	with	which	we	do	business,	potentially	limiting	their	ability	to	fulfill	their	obligations	under	our	derivative	agreements.	This could	have	a	negative	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# The	waste	industry	is	highly	competitive	and	includes	competitors	that	may	have	greater	financial	and	operational	resources,	flexibility	to	reduce	prices	and	other	competitive	advantages	that	could make	it	difficult	for	us	to	compete	effectively.

We	principally	compete	with	large	national	waste	management	companies,	municipalities	and	numerous	regional	and	local	companies	for	collection	and	disposal	accounts.	Competition	for	collection accounts	is	primarily	based	on	price	and	the	quality	of	services.	Competition	for	disposal	business	is	primarily	based	on	disposal	costs,	geographic	location	and	quality	of	operations.	Some	of	our competitors	may	have	greater	financial	and	operational	resources	than	us.	Many	counties	and	municipalities	that	operate	their	own	waste	collection	and	disposal	facilities	have	the	benefits	of	tax	revenue or	tax-exempt	financing.	Our	ability	to	obtain	solid	waste	volume	for	our	landfills	may	also	be	limited	by	the	fact	that	some	major	collection	companies	also	own	or	operate	landfills	to	which	they	send their	waste.	In	markets	in	which	we	do	not	own	or	operate	a	landfill,	our	collection	operations	may	operate	at	a	disadvantage	to	fully	integrated	competitors.	As	a	result	of	these	factors,	we	may	have difficulty	competing	effectively	from	time	to	time	or	in	certain	markets.	If	we	were	to	lower	prices	to	address	these	competitive	issues,	it	could	negatively	impact	our	revenue	growth	and	profitability.

# Price	increases	may	not	be	adequate	to	offset	the	impact	of	increased	costs	and	may	cause	us	to	lose	volume.

We	seek	to	secure	price	increases	necessary	to	offset	increased	costs	(including	fuel	and	environmental	costs),	to	improve	operating	margins	and	to	obtain	adequate	returns	on	our	substantial	investments in	assets	such	as	our	landfills.	From	time	to	time,	our	competitors	may	reduce	their	prices	in	an	effort	to	expand	their	market	share.	Contractual,	general	economic	or	market-specific	conditions	may	also limit	our	ability	to	raise	prices.	As	a	result,	we	may	be	unable	to	offset	increases	in	costs,	improve	our	operating	margins	and	obtain	adequate	investment	returns	through	price	increases.	We	may	also	lose volume	to	lower-cost	competitors.

# Increases	in	the	cost	of	fuel	or	petrochemicals	will	increase	our	operating	expenses,	and	we	cannot	assure	you	that	we	will	be	able	to	recover	fuel	or	oil	cost	increases	from	our	customers.

We	depend	on	fuel	to	run	our	collection	and	transfer	trucks	and	other	equipment	used	for	collection,	transfer,	and	disposal.	We	buy	fuel	in	the	open	market.	Fuel	prices	are	unpredictable	and	can	fluctuate significantly	based	on	events	beyond	our	control,	including	geopolitical	developments,	actions	by	the	Organization	of	the	Petroleum	Exporting	Countries	and	other	oil	and	gas	producers,	supply	and demand	for	oil	and	gas,	war,	terrorism	and	unrest	in	oil-producing	countries,	and	regional	production	patterns.	We	may	not	be	able	to	offset	such	volatility	through	fuel	surcharges.	For	example,	our	fuel costs	were	$349.8	million	in	2009,	representing	7.2%	of	our	cost	of	operations	compared	to	$235.3	million	in	2008,	representing	9.7%	of	our	cost	of	operations.	This	decrease	in	fuel	costs	as	a	percent	of our	cost	of	operations	primarily	reflects	a	decrease	in	the	price	of	fuel.

In	order	to	manage	our	exposure	to	volatility	in	fuel	prices,	we	have	entered	into	multiple	swap	agreements	whereby	we	receive	or	make	payments	to	counter-parties	if	the	price	of	fuel	varies	from	a specified	amount.	However,	we	do	not	hedge	our	entire	fuel	usage.	During	2009,	only	6.4%	of	our	fuel	purchases	were	hedged.

Over	the	last	several	years,	regulations	have	been	adopted	mandating	the	reduction	of	vehicle	tail	pipe	emissions	and,	in	October	2009,	the	EPA	indicated	it	will	establish	the	first	U.S.	standards	for greenhouse	gas	emissions	from	automobiles.	The	regulations	could	affect	the	type	of	fuel	our	trucks	use	and	could	materially	increase	the	cost	and	consumption	of	our	fuel.	Our	operations	also	require the	use	of	products	(such	as	liners	at	our	landfills)	whose	costs	may	vary	with	the	price	of	petrochemicals.	An	increase	in	the	price	of	petrochemicals	could	increase	the	cost	of	those	products,	which would	increase	our	operating	and	capital	costs.	We	are	also	susceptible	to	increases	in	indirect	fuel	surcharges	from	our	vendors.

# Fluctuations	in	prices	for	recycled	commodities	that	we	sell	to	customers	may	adversely	affect	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

We	process	recyclable	materials	such	as	paper,	cardboard,	plastics,	aluminum	and	other	metals	for	sale	to	third	parties.	Our	results	of	operations	may	be	affected	by	changing	prices	or	market requirements	for	recyclable	materials.	The	resale	and	purchase	prices	of,	and	market	demand	for,	recyclable	materials	can	be	volatile	due	to	changes	in	economic	conditions	and	numerous	other	factors beyond	our	control.	These	fluctuations	may	affect	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# Adverse	weather	conditions	may	limit	our	operations	and	increase	the	costs	of	collection	and	disposal.

Our	collection	and	landfill	operations	could	be	adversely	impacted	by	extended	periods	of	inclement	weather,	or	by	increased	severity	of	weather	and	climate	extremes	resulting	in	the	future	from	climate change,	any	of	which	could	increase	the	volume	of	waste	collected	under	our	existing	contracts	(without	corresponding	compensation),	interfere	with	collection	and	landfill	operations,	delay	the development	of	landfill	capacity	or	reduce	the	volume	of	waste	generated	by	our	customers.	In	addition,	adverse	weather	conditions	may	result	in	the	temporary	suspension	of	our	operations,	which	can significantly	affect	our	operating	results	in	the	affected	regions	during	those	periods.

# We	currently	have	matters	pending	with	the	Internal	Revenue	Service	(the	"IRS"),	which	could	result	in	large	cash	expenditures	and	could	have	a	material	adverse	impact	on	our	operating	results and	cash	flows.

We	are	currently	under	examination	by	the	IRS	with	regard	to	Allied's	federal	income	tax	returns	for	tax	years	2007	and	2008,	and	Allied's	2000	through	2006	federal	income	tax	returns	are	at	appeals. Republic	is	under	audit	for	its	2007	and	2008	federal	income	tax	returns,	and	under	examination	for	its	2008	federal	income	tax	return.

During	its	examination	of	Allied's	2002	tax	year,	the	IRS	asserted	that	a	2002	redemption	of	four	partnership	interests	in	waste-to-energy	businesses	should	have	been	recharacterized	as	disguised	sale transactions.	This	issue	is	currently	before	the	Appeals	Division	of	the	IRS.	The	Company	believes	its	position	is	supported	by	relevant	technical	authorities	and	strong	business	purpose	and	we	intend	to vigorously	defend	our	position	on	this	matter.	The	potential	tax	and	interest	through	December	31,	2009	(to	the	extent	unpaid)	have	been	fully	reserved	in	our	consolidated	balance	sheet.	A	disallowance would	not	materially	affect	our	consolidated	results	of	operations;	however,	a	deficiency	payment	would	adversely	impact	our	cash	flow	in	the	period	the	payment	was	made.	The	accrual	of	additional interest	charges	through	the	time	this	matter	is	resolved	will	affect	our	consolidated	results	of	operations.	In	addition,	the	successful	assertion	by	the	IRS	of	penalty	and	penalty-related	interest	in connection	with	this	matter	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

Additionally,	during	its	examination	of	Allied's	2000	through	2003	tax	years,	the	IRS	proposed	that	certain	landfill	costs	be	allocated	to	the	collection	and	control	of	methane	gas	that	is	naturally	emitted from	landfills.	The	IRS'	position	is	that	the	methane	gas	emitted	by	a	landfill	constitutes	a	joint	product	resulting	from	landfill	operations	and,	therefore,	associated	costs	should	not	be	expensed	until	the methane	gas	is	sold	or	otherwise	disposed.	We	believe	we	have	several	meritorious	defenses,	including	the	fact	that	methane	gas	is

not	actively	produced	for	sale	by	us	but	rather	arises	naturally	in	the	context	of	providing	disposal	services.	Therefore,	we	believe	that	the	resolution	of	this	issue	will	not	have	a	material	adverse	impact on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

For	additional	information	on	these	matters,	see	Note	10,	Income	Taxes,	to	our	consolidated	financial	statements	in	Item	8	of	this	Annual	Report	on	Form	10-K.

Other	matters	may	also	arise	in	the	course	of	tax	audits	that	could	adversely	impact	our	consolidated	financial	condition,	results	of	operations	or	cash	flows.

# We	may	be	unable	to	execute	our	financial	strategy.

Our	ability	to	execute	our	financial	strategy	depends	on	our	ability	to	maintain	investment	grade	ratings	on	our	senior	debt.	The	credit	rating	process	is	contingent	upon	a	number	of	factors,	many	of which	are	beyond	our	control.	We	cannot	assure	you	that	we	will	be	able	to	maintain	our	investment	grade	ratings	in	the	future.	Our	interest	expense	would	increase	and	our	ability	to	obtain	financing	on favorable	terms	may	be	adversely	affected	should	we	fail	to	maintain	investment	grade	ratings.

Our	financial	strategy	is	also	dependent	on	our	ability	to	generate	sufficient	cash	flow	to	reinvest	in	our	existing	business,	fund	internal	growth,	acquire	other	solid	waste	businesses,	pay	dividends,	reduce indebtedness	and	minimize	borrowings,	and	take	other	actions	to	enhance	shareholder	value.	We	cannot	assure	you	that:	we	will	be	successful	in	executing	our	broad-based	pricing	program;	we	will generate	sufficient	cash	flow	to	execute	our	financial	strategy;	we	will	be	able	to	pay	cash	dividends	at	our	present	rate,	that	we	will	be	able	to	increase	the	amount	of	such	dividends,	or	that	we	will	be able	to	reinstitute	our	share	repurchase	program.

# A	downgrade	in	our	bond	ratings	could	adversely	affect	our	liquidity	by	increasing	the	cost	of	debt	and	financial	assurance	instruments.

While	downgrades	of	our	bond	ratings	may	not	have	an	immediate	impact	on	our	cost	of	debt	or	liquidity,	they	may	impact	our	cost	of	debt	and	liquidity	over	the	near	to	medium	term.	If	the	rating agencies	downgrade	our	debt,	this	may	increase	the	interest	rate	we	must	pay	to	issue	new	debt,	and	it	may	even	make	it	prohibitively	expensive	for	us	to	issue	new	debt.	If	our	debt	ratings	are downgraded,	future	access	to	financial	assurance	markets	at	a	reasonable	cost,	or	at	all,	also	may	be	adversely	impacted.

# The	solid	waste	industry	is	a	capital-intensive	industry	and	the	amount	we	spend	on	capital	expenditures	may	exceed	current	expectations,	which	could	require	us	to	obtain	additional	funding	for our	operations	or	impair	our	ability	to	grow	our	business.

Our	ability	to	remain	competitive	and	to	grow	and	expand	our	operations	largely	depends	on	our	cash	flow	from	operations	and	access	to	capital.	If	our	capital	efficiency	programs	are	unable	to	offset	the impact	of	inflation	and	business	growth,	it	may	be	necessary	to	increase	the	amount	we	spend.	Additionally,	if	we	make	acquisitions	or	further	expand	our	operations,	the	amount	we	expend	on	capital, capping,	closure,	post-closure	and	environmental	remediation	expenditures	will	increase.	Our	cash	needs	also	will	increase	if	the	expenditures	for	capping,	closure,	post-closure	and	remediation	activities increase	above	our	current	estimates,	which	may	occur	over	a	long	period	due	to	changes	in	federal,	state	or	local	government	requirements	and	other	factors	beyond	our	control.	Increases	in	expenditures would	negatively	impact	our	cash	flows.

Over	the	last	several	years,	regulations	have	been	adopted	mandating	the	reduction	of	vehicle	tail	pipe	emissions.	These	regulations	have	caused	some	increases	in	the	costs	of	the	collection	vehicles	we buy.	The	EPA	recently	has	indicated	it	intends	to	adopt	further	regulations	addressing	greenhouse	gas	emissions	from	automobiles.	As	a	result,	we	could	experience	an	increase	in	capital	costs.	This	also could	cause	an	increase	in	vehicle	operating	costs	or	a	reduction	in	operating	efficiency.	We	may	reduce	the	number	of	vehicles	we	purchase	until	manufacturers	adopt	the	new	standards	to	increase efficiency.

# We	may	be	unable	to	obtain	or	maintain	required	permits	or	to	expand	existing	permitted	capacity	of	our	landfills,	which	could	decrease	our	revenue	and	increase	our	costs.

We	cannot	assure	you	that	we	will	successfully	obtain	or	maintain	the	permits	we	require	to	operate	our	business	because	permits	to	operate	non-hazardous	solid	waste	landfills	and	to	expand	the permitted	capacity	of	existing	landfills	have	become	more	difficult	and	expensive	to	obtain	and	maintain.	Permits	often	take	years	to	obtain	as	a	result	of	numerous	hearings	and	compliance	requirements with	regard	to	zoning,	environmental	and	other	regulations.	These	permits	are	also	often	subject	to	resistance	from	citizen	or	other	groups	and	other	political	pressures.	Local	communities	and	citizen groups,	adjacent	landowners	or	governmental	agencies	may	oppose	the	issuance	of	a	permit	or	approval	we	may	need,	allege	violations	of	the	permits	under	which	we	currently	operate	or	laws	or regulations	to	which	we	are	subject,	or	seek	to	impose	liability	on	us	for	environmental	damage.	Responding	to	these	challenges	has,	at	times,	increased	our	costs	and	extended	the	time	associated	with establishing	new	facilities	and	expanding	existing	facilities.	In	addition,	failure	to	receive	regulatory	and	zoning	approval	may	prohibit	us	from	establishing	new	facilities,	maintaining	permits	for	our facilities	or	expanding	existing	facilities.	Our	failure	to	obtain	the	required	permits	to	operate	our	non-hazardous	solid	waste	landfills	could	have	a	material	adverse	impact	on	our	consolidated	financial condition,	results	of	operations	and	cash	flows.	In	addition,	we	may	have	to	dispose	collected	waste	at	landfills	operated	by	our	competitors	or	haul	the	waste	long	distances	at	a	higher	cost	to	one	of	our landfills,	either	of	which	could	significantly	increase	our	waste	disposal	costs.

The	waste	industry	is	subject	to	extensive	government	regulation,	and	existing	or	future	regulations	may	restrict	our	operations,	increase	our	costs	of	operations	or	require	us	to	make	additional	capital expenditures.

# If	we	inadequately	accrue	for	landfill	capping,	closure	and	post-closure	costs,	our	financial	condition	and	results	of	operations	may	be	adversely	affected.

A	landfill	must	be	closed	and	capped,	and	post-closure	maintenance	commenced,	once	the	permitted	capacity	of	the	landfill	is	reached	and	additional	capacity	is	not	authorized.	We	have	significant financial	obligations	relating	to	capping,	closure	and	post-closure	costs	at	our	existing	owned	or	operated	landfills,	and	will	have	material	financial	obligations	with	respect	to	any	future	owned	or operated	landfills.	We	establish	accruals	for	the	estimated	costs	associated	with	capping,	closure	and	post-closure	financial	obligations.	We	could	underestimate	such	accruals,	and	our	financial obligations	for	capping,	closure	or	post-closure	costs	could	exceed	the	amount	accrued	or	amounts	otherwise	receivable	pursuant	to	trust	funds	established	for	this	purpose.	Such	a	shortfall	could	result	in significant	unanticipated	charges	to	income.	Additionally,	if	a	landfill	is	required	to	be	closed	earlier	than	expected	or	its	remaining	airspace	is	reduced	for	any	other	reason,	the	accruals	for	capping, closure	and	post-closure	could	be	required	to	be	accelerated,	which	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# We	cannot	assure	you	that	we	will	continue	to	operate	our	landfills	at	current	volumes	due	to	the	use	of	alternatives	to	landfill	disposal	caused	by	state	requirements	or	voluntary	initiatives.

Most	of	the	states	in	which	we	operate	landfills	require	counties	and	municipalities	to	formulate	comprehensive	plans	to	reduce	the	volume	of	solid	waste	deposited	in	landfills	through	waste	planning, composting	and	recycling,	or	other	programs.	Some	state	and	local	governments	mandate	waste	reduction	at	the	source	and	prohibit	the	disposal	of	certain	types	of	wastes,	such	as	yard	waste,	at	landfills. Although	such	actions	are	useful	in	protecting	our	environment,	these	actions,	as	well	as	voluntary	private	initiatives	by	customers	to	reduce	waste	or	seek	disposal	alternatives,	have	and	may	in	the	future reduce	the	volume	of	waste	going	to	landfills	in	certain	areas.	If	this	occurs,	we	cannot	assure	you	that	we	will	be	able	to	operate	our	landfills	at	their	current	volumes	or	charge	current	prices	for	landfill disposal	services	due	to	the	decrease	in	demand	for	such	services.

# The	possibility	of	landfill	and	transfer	station	site	development	projects,	expansion	projects	or	pending	acquisitions	not	being	completed	or	certain	other	events	could	result	in	a	material	charge	to income.

We	capitalize	certain	expenditures	relating	to	development,	expansion	and	other	projects.	If	a	facility	or	operation	is	permanently	shut	down	or	determined	to	be	impaired,	or	a	development	or	expansion project	is	not	completed	or	is	determined	to	be	impaired,	we	will	charge	any	unamortized	capitalized	expenditures	to	income	relating	to	such	facility	or	project	that	we	are	unable	to	recover	through	sale, transfer	or	otherwise.	In	future	periods,	we	may	incur	charges	against	earnings	in	accordance	with	this	policy,	or	other	events	may	cause	impairments.	Such	charges	could	have	a	material	adverse	impact on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# We	are	subject	to	costly	environmental	regulations	and	flow-control	regulations	that	may	affect	our	operating	margins,	restrict	our	operations	and	subject	us	to	additional	liability.

Complying	with	laws	and	regulations	governing	the	use,	treatment,	storage,	transfer	and	disposal	of	solid	and	hazardous	wastes	and	materials,	air	quality,	water	quality	and	the	remediation	of contamination	associated	with	the	release	of	hazardous	substances	is	costly.	Laws	and	regulations	often	require	us	to	enhance	or	replace	our	equipment	and	to	modify	landfill	operations	or	initiate	final closure	of	a	landfill.	We	cannot	assure	you	that	we	will	be	able	to	implement	price	increases	sufficient	to	offset	the	costs	of	complying	with	these	laws	and	regulations.	In	addition,	environmental regulatory	changes	could	accelerate	or	increase	expenditures	for	capping,	closure	and	post-closure,	and	environmental	and	remediation	activities	at	solid	waste	facilities	and	obligate	us	to	spend	sums	in addition	to	those	presently	accrued	for	such	purposes.

Our	collection,	transfer,	and	landfill	operations	are,	and	may	in	the	future	continue	to	be,	affected	by	state	or	local	laws	or	regulations	that	restrict	the	transportation	of	solid	waste	across	state,	county	or other	jurisdictional	lines.	Such	laws	and	regulations	could	negatively	affect	our	operations,	resulting	in	declines	in	landfill	volumes	and	increased	costs	of	alternate	disposal.

In	addition	to	the	costs	of	complying	with	environmental	regulations,	we	incur	costs	to	defend	against	litigation	brought	by	government	agencies	and	private	parties	who	may	allege	we	are	in	violation	of our	permits	and	applicable	environmental	laws	and	regulations,	or	who	assert	claims	alleging	environmental	damage,	personal	injury	or	property	damage.	As	a	result,	we	may	be	required	to	pay	fines	or implement	corrective	measures,	or	we	may	have	our	permits	and	licenses	modified	or	revoked.	A	significant	judgment	against	us,	the	loss	of	a	significant	permit	or	license,	or	the	imposition	of	a significant	fine	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.	We	establish	accruals	for	our	estimates	of	the	costs	associated	with	our environmental	obligations.	We	could	underestimate	such	accruals	and	remediation	costs	could	exceed	amounts	accrued.	Such	shortfalls	could	result	in	significant	unanticipated	charges	to	income.

# Regulation	of	greenhouse	gas	emissions	could	impose	costs	on	our	operations,	the	magnitude	of	which	we	cannot	yet	estimate.

Efforts	to	curtail	the	emission	of	greenhouse	gases	(GHGs),	to	ameliorate	the	effect	of	climate	change,	continue	to	advance	on	the	federal,	regional,	and	state	level.	Our	landfill	operations	emit	methane, identified	as	a	GHG.	In	June	2009,	the	U.S.	House	of	Representatives	passed	a	bill	that	would	regulate	GHGs	comprehensively.	While	the	centerpiece	of	that	bill	would	be	a	GHG	emission	allowance cap-and-trade	system,	landfills	would	not	be	compelled	to	hold	allowances	for	their	GHG	emissions.	Rather,	they	would	be	subject	to	certain	further	emission	controls	to	be	determined	through administrative	rule-making.	Senate	passage	of	counterpart	legislation,	and	whether	such	legislation	would	treat	landfills	in	the	same	manner,	is	uncertain.	Should	comprehensive	federal	climate	change legislation	be	enacted,	we	expect	it	to	impose	costs	on	our	operations,	the	materiality	of	which	we	cannot	predict.

Absent	comprehensive	federal	legislation	to	control	GHG	emissions,	EPA	is	moving	ahead	administratively	under	its	existing	Clean	Air	Act	authority.	In	October	2009,	EPA	published	a	Proposed Prevention	of	Significant	Deterioration	and	Title	V	Greenhouse	Gas	Tailoring	Rule	("PSD	tailoring	rule").	The	proposed	rule	would	set	new	thresholds	for	GHG	emissions	that	define	when	Clean	Air Act	permits	would	be	required	and

would	"tailor"	these	programs	to	limit	which	facilities	would	be	required	to	obtain	permits.	EPA's	legal	authority	to	"tailor"	this	rule	in	the	manner	it	proposed	has	been	challenged.	If	finalized	as proposed,	many	of	our	landfills	would	be	subject	to	the	PSD	tailoring	rule,	which	could	require	permit	amendments	and	additional	emission	controls.	In	December	2009,	EPA	finalized	its	finding	that	six GHGs	endanger	public	health.	While	EPA	made	its	finding	in	the	context	of	regulating	air	emissions	from	motor	vehicles,	other	Clean	Air	Act	provisions	appear	to	compel	EPA	to	make	comparable findings	for	stationary	sources,	such	as	landfills.	We	cannot	predict	the	requirements	or	effective	date	of	stationary	source	rules	that	might	apply	to	landfills	as	a	result	of	this	endangerment	finding	and, accordingly,	we	cannot	assure	you	that	further	developments	in	this	area	will	not	have	a	material	effect	on	our	landfill	operations	or	on	our	consolidated	financial	condition,	results	of	operations	or	cash flows.

# We	may	have	potential	environmental	liabilities	that	are	not	covered	by	our	insurance.	Changes	in	insurance	markets	also	may	impact	our	financial	results.

We	may	incur	liabilities	for	the	deterioration	of	the	environment	as	a	result	of	our	operations.	We	maintain	high	deductibles	for	our	environmental	liability	insurance	coverage.	If	we	were	to	incur substantial	liability	for	environmental	damage,	our	insurance	coverage	may	be	inadequate	to	cover	such	liability.	This	could	have	a	material	adverse	impact	on	our	consolidated	financial	condition, results	of	operations	and	cash	flows.

Also,	due	to	the	variable	condition	of	the	insurance	market,	we	may	experience	future	increases	in	self-insurance	levels	as	a	result	of	increased	retention	levels	and	increased	premiums.	As	we	assume more	risk	for	self-insurance	through	higher	retention	levels,	we	may	experience	more	variability	in	our	self-insurance	reserves	and	expense.

# Despite	our	efforts,	we	may	incur	additional	hazardous	substances	liability	in	excess	of	amounts	presently	known	and	accrued.

We	are	a	potentially	responsible	party	at	many	sites	under	CERCLA,	which	provides	for	the	remediation	of	contaminated	facilities	and	imposes	strict,	joint	and	several	liability	for	the	cost	of	remediation on	current	owners	and	operators	of	a	facility	at	which	there	has	been	a	release	or	a	threatened	release	of	a	"hazardous	substance,"	on	parties	who	were	site	owners	and	operators	at	the	time	hazardous substances	were	disposed	of,	and	on	persons	who	arrange	for	the	disposal	of	such	substances	at	the	facility	(i.e.,	generators	of	the	waste	and	transporters	who	selected	the	disposal	site).	Hundreds	of substances	are	defined	as	"hazardous"	under	CERCLA	and	their	presence,	even	in	minute	amounts,	can	result	in	substantial	liability.	Notwithstanding	our	efforts	to	comply	with	applicable	regulations and	to	avoid	transporting	and	receiving	hazardous	substances,	we	may	have	additional	liability	under	CERCLA	or	similar	laws	in	excess	of	our	current	reserves	because	such	substances	may	be	present	in waste	collected	by	us	or	disposed	of	in	our	landfills,	or	in	waste	collected,	transported	or	disposed	of	in	the	past	by	companies	we	have	acquired.	Actual	costs	for	these	liabilities	could	be	significantly greater	than	amounts	presently	accrued	for	these	purposes,	which	could	have	a	material	adverse	impact	on	our	consolidated	financial	position,	results	of	operations	and	cash	flows.

# Currently	pending	or	future	litigation	or	governmental	proceedings	could	result	in	material	adverse	consequences,	including	judgments	or	settlements.

We	are,	and	from	time	to	time	become,	involved	in	lawsuits,	regulatory	inquiries,	and	governmental	and	other	legal	proceedings	arising	out	of	the	ordinary	course	of	our	business.	Many	of	these	matters raise	difficult	and	complicated	factual	and	legal	issues	and	are	subject	to	uncertainties	and	complexities.	The	timing	of	the	final	resolutions	to	lawsuits,	regulatory	inquiries,	and	governmental	and	other legal	proceedings	is	uncertain.	Additionally,	the	possible	outcomes	or	resolutions	to	these	matters	could	include	adverse	judgments	or	settlements,	either	of	which	could	require	substantial	payments, adversely	affecting	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# We	may	experience	difficulties	completing	the	integration	of	Allied's	business,	and	we	may	incur	unexpected	expenses	in	connection	with	that	integration.

Achieving	the	anticipated	benefits	of	the	merger	with	Allied	will	depend	significantly	on	whether	we	can	continue	to	integrate	Allied's	business	in	an	efficient	and	effective	manner.	The	ongoing integration	may	result	in	additional	and	unforeseen	expenses,	and	the	anticipated	benefits	of	the	integration	plan	may	not	be	fully	realized.	We	may	not	be	able	to	accomplish	the	integration	process smoothly,	successfully	or	on	a	timely	basis.	Any	inability	of	our	management	to	successfully	and	timely	integrate	the	operations	of	the	two	companies	could	have	a	material	adverse	effect	on	our consolidated	financial	condition,	results	of	operations	and	cash	flows.

# We	may	not	realize	the	anticipated	synergies	and	related	benefits	from	the	merger	with	Allied	fully	or	within	the	timing	anticipated.

We	believe	our	merger	with	Allied	has	been	and	will	continue	to	be	beneficial	to	our	stockholders	as	a	result	of	the	actual	and	anticipated	synergies	resulting	from	the	combined	operations.	While	we	are currently	ahead	of	our	original	timeline,	we	may	not	be	able	to	achieve	the	anticipated	operating	and	cost	synergies	or	the	long-term	strategic	benefits	of	the	merger	fully	or	within	the	timing	anticipated. For	example,	elimination	of	duplicative	costs	may	not	be	fully	achieved	or	may	take	longer	than	anticipated.	For	at	least	the	first	year	after	an	acquisition,	and	possibly	longer,	the	benefits	from	the acquisition	will	be	offset	by	the	costs	incurred	in	integrating	the	businesses	and	operations.	The	inability	to	realize	the	full	extent	of	the	anticipated	synergies	or	other	benefits	of	the	merger,	or	our encountering	unexpected	costs	or	delays	in	the	integration	process	(which	may	delay	the	timing	of	such	synergies	or	other	benefits),	could	have	a	material	adverse	effect	on	our	consolidated	financial condition,	results	of	operations	and	cash	flows.

# We	may	be	unable	to	manage	our	growth	effectively.

Our	growth	strategy	places	significant	demands	on	our	financial,	operational	and	management	resources.	To	continue	our	growth,	we	may	need	to	add	administrative	and	other	personnel,	and	will	need	to make	additional	investments	in	operations	and	systems.	We	cannot	assure	you	that	we	will	be	able	to	find	and	train	qualified	personnel,	or	do	so	on	a	timely	basis,	or	expand	our	operations	and	systems	to the	extent,	and	in	the	time,	required.

# We	may	be	unable	to	execute	our	acquisition	growth	strategy.

Our	ability	to	execute	our	growth	strategy	depends	in	part	on	our	ability	to	identify	and	acquire	desirable	acquisition	candidates	as	well	as	our	ability	to	successfully	consolidate	acquired	operations	into our	business.	The	consolidation	of	our	operations	with	those	of	acquired	companies	may	present	significant	challenges	to	our	management.	In	addition,	competition	among	our	competitors	for	acquisition candidates	may	prevent	us	from	acquiring	certain	acquisition	candidates.	As	such,	we	cannot	assure	you	that:

•		desirable	acquisition	candidates	exist	or	will	be	identified;

•		we	will	be	able	to	acquire	any	of	the	candidates	identified;

•		we	will	effectively	consolidate	companies	we	acquire;	or

•		any	acquisitions	will	be	profitable	or	accretive	to	our	earnings.

If	any	of	the	aforementioned	factors	force	us	to	alter	our	growth	strategy,	our	growth	prospects	could	be	adversely	affected.

# Businesses	we	acquire	may	have	undisclosed	liabilities.

In	pursuing	our	acquisition	strategy,	our	due	diligence	investigations	of	the	acquisition	candidates	may	fail	to	discover	certain	undisclosed	liabilities	of	the	acquisition	candidates.	If	we	acquire	a company	having	undisclosed	liabilities	such	as	environmental,	remediation	or	contractual,	as	a	successor	owner	we	may	be	responsible	for	such	undisclosed	liabilities.	We	expect	to	try	to	minimize	our exposure	to	such	liabilities	by

conducting	due	diligence,	by	obtaining	indemnification	from	each	of	the	sellers	of	the	acquired	companies,	by	deferring	payment	of	a	portion	of	the	purchase	price	as	security	for	the	indemnification	and by	acquiring	only	specified	assets.	However,	we	cannot	assure	you	that	we	will	be	able	to	obtain	indemnification	or	that	any	indemnification	obtained	will	be	enforceable,	collectible	or	sufficient	in amount,	scope	or	duration	to	fully	offset	any	undisclosed	liabilities	arising	from	our	acquisitions.

# Our	consolidated	financial	statements	are	based	on	estimates	and	assumptions	that	may	differ	from	actual	results.

Our	consolidated	financial	statements	have	been	prepared	in	accordance	with	U.S.	GAAP	and	necessarily	include	amounts	based	on	estimates	and	assumptions	made	by	management.	Actual	results	could differ	from	these	amounts.	Significant	items	requiring	management	to	make	subjective	or	complex	judgments	about	matters	that	are	inherently	uncertain	include	the	carrying	value	of	long-lived	assets,	the depletion	and	amortization	of	landfill	development	costs,	accruals	for	final	capping,	closure	and	post-closure	costs,	valuation	allowances	for	accounts	receivable	and	deferred	tax	assets,	liabilities	for potential	litigation,	claims	and	assessments,	and	liabilities	for	environmental	remediation,	employee	benefit	and	pension	plans,	deferred	taxes,	uncertain	tax	positions	and	self-insurance.

We	cannot	assure	you	that	the	liabilities	recorded	for	landfill	and	environmental	costs	will	be	adequate	to	cover	the	requirements	of	existing	environmental	regulations,	future	changes	to	or	interpretations of	existing	regulations,	or	the	identification	of	adverse	environmental	conditions	previously	unknown	to	management.

# The	introduction	of	new	accounting	rules,	laws	or	regulations	could	adversely	impact	our	results	of	operations.

Complying	with	new	accounting	rules,	laws	or	regulations	could	adversely	impact	our	financial	condition,	results	of	operations	or	cash	flows,	or	cause	unanticipated	fluctuations	in	our	results	of operations	in	future	periods.

# We	may	be	subject	to	workforce	influences,	including	work	stoppages,	which	could	increase	our	operating	costs	and	disrupt	our	operations.

As	of	December	31,	2009,	approximately	27%	of	our	workforce	was	represented	by	various	local	labor	unions.	If	our	unionized	workers	were	to	engage	in	a	strike,	work	stoppage	or	other	slowdown,	we could	experience	a	significant	disruption	of	our	operations	and	an	increase	in	our	operating	costs,	which	could	have	an	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and cash	flows.	In	addition,	if	a	greater	percentage	of	our	workforce	becomes	unionized,	our	business	and	financial	results	could	be	materially	and	adversely	impacted	due	to	the	potential	for	increased operating	costs.

# Our	obligation	to	fund	multi-employer	pension	plans	to	which	we	contribute	may	have	an	adverse	impact	on	us.

We	contribute	to	at	least	25	multi-employer	pension	plans	covering	at	least	17%	of	our	current	employees.	We	do	not	administer	these	plans	and	generally	are	not	represented	on	the	boards	of	trustees	of these	plans.	The	Pension	Protection	Act	enacted	in	2006	(the	PPA)	requires	under-funded	pension	plans	to	improve	their	funding	ratios.	Based	on	the	information	available	to	us,	we	believe	that	some	of the	multi-employer	plans	to	which	we	contribute	are	either	"critical"	or	"endangered"	as	those	terms	are	defined	in	the	PPA.	We	cannot	determine	at	this	time	the	amount	of	additional	funding,	if	any,	we may	be	required	to	make	to	these	plans	and,	therefore,	have	not	recorded	any	related	liabilities.	However,	plan	assessments	could	have	an	adverse	impact	on	our	results	of	operations	or	cash	flows	for	a given	period.	Furthermore,	under	current	law,	upon	the	termination	of	a	multi-employer	pension	plan,	or	in	the	event	of	a	withdrawal	by	us	(which	we	consider	from	time	to	time)	or	a	mass	withdrawal	of contributing	employers	(each,	a	"Withdrawal	Event"),	we	would	be	required	to	make	payments	to	the	plan	for	our	proportionate	share	of	the	plan's	unfunded	vested	liabilities.	We	cannot	assure	you	that there	will	not	be	a	Withdrawal	Event	with	respect	to	any	of	the	multi-employer	pension	plans	to	which	we	contribute	or	that,	in	the	event	of	such	a	Withdrawal	Event,	the	amounts	we	would	be

required	to	contribute	would	not	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# The	costs	of	providing	for	pension	benefits	and	related	funding	requirements	are	subject	to	changes	in	pension	fund	values	and	fluctuating	actuarial	assumptions,	and	may	have	a	material	adverse impact	on	our	results	of	operations	and	cash	flows.

We	sponsor	a	defined	benefit	pension	plan	which	is	funded	with	trustee	assets	invested	in	a	diversified	portfolio	of	debt	and	equity	securities.	Our	costs	for	providing	such	benefits	and	related	funding requirements	are	subject	to	changes	in	the	market	value	of	plan	assets.	Our	pension	expenses	and	related	funding	requirements	are	also	subject	to	various	actuarial	calculations	and	assumptions,	which may	differ	materially	from	actual	results	due	to	changing	market	and	economic	conditions,	interest	rates	and	other	factors.	A	significant	increase	in	our	pension	obligations	and	funding	requirements could	have	a	material	adverse	impact	on	our	consolidated	financial	condition,	results	of	operations	and	cash	flows.

# The	loss	of	key	personnel	could	have	a	material	adverse	effect	on	our	consolidated	financial	condition,	results	of	operations,	cash	flows	and	growth	prospects.

Our	future	success	depends	on	the	continued	contributions	of	several	key	employees	and	officers.	The	loss	of	the	services	of	key	employees	and	officers,	whether	such	loss	is	through	resignation	or	other causes,	or	the	inability	to	attract	additional	qualified	personnel,	could	have	a	material	adverse	effect	on	our	financial	condition,	results	of	operations,	cash	flows	and	growth	prospects.

None.

Our	corporate	office	is	located	at	18500	North	Allied	Way,	Phoenix,	Arizona	85054,	where	we	currently	lease	approximately	145,000	square	feet	of	office	space.	We	also	maintain	regional administrative	offices	in	all	of	our	regions.

Our	principal	property	and	equipment	consists	of	land,	landfills,	buildings,	vehicles	and	equipment.	We	own	or	lease	real	property	in	the	states	in	which	we	conduct	operations.	At	December	31,	2009,	we owned	or	operated	376	collection	companies,	223	transfer	stations,	192	active	solid	waste	landfills	and	78	recycling	facilities	within	40	states	and	Puerto	Rico.	In	aggregate,	our	active	solid	waste landfills	total	approximately	97,300	acres,	including	approximately	35,000	permitted	acres.	We	also	own	or	have	responsibilities	for	132	closed	landfills.	We	believe	that	our	property	and	equipment	are adequate	for	our	current	needs.

We	are	involved	in	routine	judicial	and	administrative	proceedings	that	arise	in	the	ordinary	course	of	business	and	that	relate	to,	among	other	things,	personal	injury	or	property	damage	claims, employment	matters	and	commercial	and	contractual	disputes.	We	are	subject	to	federal,	state	and	local	environmental	laws	and	regulations.	Due	to	the	nature	of	our	business,	we	are	also	routinely	a party	to	judicial	or	administrative	proceedings	involving	governmental	authorities	and	other	interested	parties	related	to	environmental	regulations	or	liabilities.	From	time	to	time,	we	may	also	be	subject to	actions	brought	by	citizens'	groups,	adjacent	landowners	or	others	in	connection	with	the	permitting	and	licensing	of	our	landfills	or	transfer	stations,	or	alleging	personal	injury,	environmental damage,	or	violations	of	the	permits	and	licenses	pursuant	to	which	we	operate.

We	are	subject	to	various	federal,	state	and	local	tax	rules	and	regulations.	These	rules	are	extensive	and	often	complex,	and	we	are	required	to	interpret	and	apply	them	to	our	transactions.	Positions taken	in	tax	filings	are	subject	to	challenge	by	taxing	authorities.	Accordingly,	we	may	have	exposure	for	additional	tax	liabilities	if,	upon	audit,	any	positions	taken	are	disallowed	by	the	taxing authorities.

The	following	is	a	discussion	of	certain	proceedings	against	us.	Although	the	ultimate	outcome	of	any	legal	matter	cannot	be	predicted	with	certainty,	except	as	otherwise	described	below,	we	do	not believe	that	the	outcome	of	our	pending	litigation,	environmental	and	other	administrative	proceedings	will	have	a	material	adverse	impact	on	our	consolidated	financial	position,	results	of	operations	or cash	flows.

# Litigation,	Environmental	and	Other	Administrative	Matters

# Countywide	Matters

On	March	26,	2007,	the	Ohio	Environmental	Protection	Agency	(OEPA)	issued	Final	Findings	and	Orders	(F&Os)	to	Republic	Services	of	Ohio	II,	LLC	(Republic-Ohio),	an	Ohio	limited	liability company	and	our	wholly	owned	subsidiary.	The	F&Os	related	to	environmental	conditions	attributed	to	a	chemical	reaction	resulting	from	the	disposal	of	certain	aluminum	production	waste	at	the Countywide	Recycling	and	Disposal	facility	(Countywide)	in	East	Sparta,	Ohio.	The	F&Os,	and	certain	other	remedial	actions	Republic-Ohio	agreed	with	the	OEPA	to	undertake	to	address	the environmental	conditions,	included,	without	limitation,	the	following	actions:	(a)	prohibiting	leachate	recirculation,	(b)	refraining	from	the	disposal	of	solid	waste	in	certain	portions	of	the	site, (c)	updating	engineering	plans	and	specifications	and	providing	further	information	regarding	the	integrity	of	various	engineered	components	at	the	site,	(d)	performing	additional	data	collection, (e)	taking	additional	measures	to	address	emissions,	(f)	expanding	the	gas	collection	and	control	system,	(g)	installing	an	isolation	break,	(h)	removing	liquids	from	gas	extraction	wells,	and (i)	submitting	a	plan	to	the	OEPA	to	suppress	the	chemical	reaction	and,	following	approval	by	the	OEPA,	implementing	such	plan.	Republic-Ohio	has	performed	certain	interim	remedial	actions required	by	the	OEPA.	Republic-Ohio	subsequently	received	additional	orders	from	the	OEPA	requiring	certain	actions	to	be	taken	by	Republic-Ohio,	in	addition	to	or	in	lieu	of	requirements	contained	in prior	orders,	including	additional	air	quality	monitoring	and	the	installation	and	continued	maintenance	of	gas	well	dewatering	systems.

On	September	30,	2009,	Republic-Ohio	entered	into	two	legally	binding	agreements	with	the	State	of	Ohio	designed	to	further	refine	the	activities	necessary	to	resolve	alleged	compliance	and	licensing issues	at	the	Countywide	facility.

The	first	agreement	is	a	Consent	Order	that	resolves	ongoing	allegations	of	noncompliance	at	the	facility	and	reflects	agreements	regarding	the	status	of	facility	licensing.	The	allegations	of noncompliance	were	summarized	in	a	complaint	that	was	filed	by	the	Ohio	Attorney	General	in	the	Stark	County	Court	of	Common	Pleas	and	resolved	the	same	day	in	accordance	with	terms	of	an agreed	upon	Consent	Order	entered	into	between	Republic-Ohio	and	the	State	of	Ohio.	The	Consent	Order	with	Ohio	requires	Republic-Ohio	to	pay	civil	penalties	and	financial	relief	of	$10.0	million, submit	updated	permit	documents,	and	assess,	evaluate,	and	determine	the	appropriate	time	to	address	certain	compliance	issues	at	the	facility.	All	civil	penalties	and	financial	relief	required	by	the Consent	Order	have	been	satisfied.	Compliance	with	the	terms	of	the	Consent	Order	and	other	applicable	rules	will	result	in	Countywide	being	considered	to	be	in	substantial	compliance	or	on	a	legally enforceable	schedule	to	return	to	compliance	for	annual	licensing	purposes.

The	second	agreement	is	a	set	of	F&Os	that	were	agreed	to	and	entered	into	with	the	Ohio	EPA.	The	F&Os	require	the	implementation	of	a	comprehensive	operation	and	maintenance	program	that contains	specific	requirements	for	managing	the	remediation	area.	The	operation	and	maintenance	program	is	ultimately	designed	to	result	in	the	final	capping	and	closure	of	the	88-acre	remediation	area at	Countywide.	The	September	30,	2009	F&Os	supersede	all	previous	F&Os	(discussed	above)	that	were	issued	to	Republic-Ohio	regarding	the	reaction	in	the	remediation	area	of	the	landfill.	The operation	and	maintenance	program	requires	Countywide	to,	among	other	things,	maintain	the	temporary	cap	and	other	engineering	controls	designed	to	prevent	odors	and	isolate	and	contain	the	reaction. The	operation	and	maintenance	program	also	contains	provisions	that	require	the	installation	of	a	composite	cap	in	the	remediation	area	when	conditions	become	conducive	to	such	installation.

Republic-Ohio	has	also	entered	into	an	Agreed	Order	on	Consent	(AOC)	with	the	EPA	requiring	the	reimbursement	of	costs	incurred	by	the	EPA	and	requiring	Republic-Ohio	to	(a)	design	and	install	a temperature	and	gas	monitoring	system,	(b)	design	and	install	a	composite	cap	or	cover,	and	(c)	develop	and	implement	an	air	monitoring	program.	The	AOC	became	effective	on	April	17,	2008	and Republic-Ohio	has

complied	with	the	terms	of	the	AOC.	Republic-Ohio	also	has	completed	construction	of	an	isolation	break	under	the	authority	and	supervision	of	the	EPA	and	reimbursed	the	EPA	for	certain	costs associated	with	the	EPA's	involvement	in	overseeing	implementation	of	the	AOC.	On	November	20,	2009,	the	EPA	issued	a	Notification	of	Completion	and	Determination	of	Compliance	to	Countywide memorializing	Countywide's	completion	of	the	work	required	under	the	AOC.

The	Commissioner	of	the	Stark	County	Health	Department	(Commissioner)	previously	recommended	that	the	Stark	County	Board	of	Health	(Board	of	Health)	suspend	Countywide's	2007	annual operating	license.	The	Commissioner	also	intended	to	recommend	that	the	Board	of	Health	deny	Countywide's	license	application	for	2008.	Republic-Ohio	obtained	a	preliminary	injunction	on November	28,	2007	prohibiting	the	Board	of	Health	from	suspending	its	2007	operating	license.	Republic-Ohio	also	obtained	a	preliminary	injunction	on	February	15,	2008	prohibiting	the	Board	of Health	from	denying	its	2008	operating	license	application.	The	litigation	with	the	Board	of	Health	has	been	concluded	pursuant	to	a	Consent	Order	entered	into	between	Republic-Ohio	and	the	Board	of Health	in	the	Stark	County	Court	of	Common	Pleas.	The	Consent	Order	requires	the	Board	of	Health	to	issue	conditional	and/or	final	operating	licenses	to	Countywide	and	requires	Republic-Ohio	to reimburse	the	Board	of	Health	for	certain	expenses	not	to	exceed	$300,000	incurred	related	to	monitoring	and	investigation	of	complaints	regarding	Countywide.	Countywide's	2009	operating	license	has been	challenged	by	Tuscarawas	County,	and	the	Board	of	Health	issued	Countywide	its	2010	operating	license	on	December	30,	2009,	which	also	has	been	challenged	by	a	local	citizens'	group,	Club 3000.

We	believe	that	we	have	performed	or	are	diligently	performing	all	actions	required	under	the	F&Os,	the	AOC,	and	any	applicable	Consent	Orders	and	that	Countywide	does	not	pose	a	threat	to	the environment.	Additionally,	we	believe	that	we	satisfy	the	rules	and	regulations	that	govern	the	operating	license	at	Countywide.

In	a	suit	filed	on	October	8,	2008	in	the	Tuscarawas	County	Ohio	Court	of	Common	Pleas,	approximately	700	plaintiffs	have	named	Republic	Services,	Inc.	and	Republic-Ohio	as	defendants.	The	claims alleged	are	negligence	and	nuisance	and	arise	from	the	operation	of	Countywide.	Republic-Ohio	has	owned	and	operated	Countywide	since	February	1,	1999.	Waste	Management,	Inc.	and	Waste Management	Ohio,	Inc.,	previous	owners	and	operators	of	Countywide,	have	been	named	as	defendants	as	well.	Plaintiffs	are	individuals	and	businesses	located	in	the	geographic	area	around Countywide.	They	claim	that	due	to	the	acceptance	of	a	specific	waste	stream	and	operational	issues	and	conditions,	the	landfill	has	generated	odors	and	other	unsafe	emissions	which	have	allegedly impaired	the	use	and	value	of	their	property.	There	are	also	allegations	that	the	emissions	from	the	landfill	may	have	adverse	health	effects.	A	second	almost	identical	lawsuit	was	filed	on	October	13, 2009	in	the	Tuscarawas	County	Ohio	Court	of	Common	Pleas	with	approximately	82	plaintiffs.	These	plaintiffs	named	Republic	Services,	Inc.,	Republic-Ohio,	Waste	Management,	Inc.,	and	Waste Management	Ohio,	Inc.	as	defendants.	The	relief	requested	on	behalf	of	each	plaintiff	in	both	actions	is:	(1)	an	award	of	compensatory	damages	according	to	proof	in	an	amount	in	excess	of	$25,000	for each	of	the	three	counts	of	the	amended	complaint;	(2)	an	award	of	punitive	damages	in	the	amount	of	two	times	compensatory	damages,	pursuant	to	applicable	statute,	or	in	such	amount	as	may	be awarded	at	trial	for	each	of	the	three	counts	of	the	amended	complaint,	(3)	costs	for	medical	screening	and	monitoring	of	each	plaintiff;	(4)	interest	on	the	damages	according	to	law;	(5)	costs	and disbursements	of	the	lawsuit;	(6)	reasonable	fees	for	attorneys	and	expert	witnesses;	and	(7)	any	other	and	further	relief	as	the	court	deems	just,	proper	and	equitable.	We	anticipate	that	the	two	cases	will be	consolidated.	Answers	have	been	filed	in	both	cases	and	discovery	is	ongoing.	164	plaintiffs	in	the	first	case	and	41	plaintiffs	in	the	second	case	have	been	dismissed	or	are	in	the	process	of	being dismissed	for	failing	to	comply	with	discovery.	We	intend	to	vigorously	defend	against	the	plaintiffs'	allegations	in	both	actions.

# Luri	Matter

On	August	17,	2007,	a	lawsuit	was	filed	by	a	former	employee,	Ronald	Luri	v.	Republic	Services,	Inc.,	Republic	Services	of	Ohio	Hauling	LLC,	Republic	Services	of	Ohio	I	LLC,	Jim	Bowen	and	Ron Krall	in	the	Cuyahoga	County	Common	Pleas	Court	in	Ohio.	On	July	3,	2008,	a	jury	verdict	was	awarded	against	us	in	the	amount	of	$46.6	million,	including	$43.1	million	in	punitive	damages.	On September	24,	2008,	the	Court	awarded	pre-judgment	interest	of	$0.3	million	and	attorney	fees	and	litigation	costs	of	$1.1	million.	Post-

judgment	interest	accrued	at	a	rate	of	8%	for	2008	and	5%	for	2009,	and	is	accruing	at	a	rate	of	4%	for	2010.	Management	anticipates	that	post-judgment	interest	could	accrue	through	the	middle	of	2011 for	a	total	of	$7.7	million.	Post-judgment	motions	filed	on	our	behalf	and	certain	of	our	subsidiaries	were	denied,	and	on	October	1,	2008,	we	filed	a	notice	of	appeal.	The	parties	submitted	their	appeal briefs	and	oral	argument	was	scheduled	for	October	27,	2009.	On	October	23,	2009,	the	Court	of	Appeals	dismissed	the	appeal	holding	that	the	trial	court	had	not	entered	a	final,	appealable	order.	The case	has	been	returned	to	the	trial	court	for	additional	proceedings	which	may	include	entry	of	additional	order(s)	by	the	trial	court	followed	by	another	appeal.	It	is	reasonably	possible	that	following	all appeals	a	final	judgment	of	liability	for	compensatory	and	punitive	damages	may	be	assessed	against	us	related	to	this	matter.	Although	it	is	not	possible	to	predict	the	ultimate	outcome,	management believes	that	the	amount	of	any	final,	non-appealable	judgment	will	not	be	material.

# Forward	Matters

The	District	Attorney	for	San	Joaquin	County	filed	a	civil	action	against	Forward,	Inc.	and	Allied	Waste	Industries,	Inc.	on	February	14,	2008	in	the	Superior	Court	of	California,	County	of	San	Joaquin. Forward	and	Allied	each	filed	answers	in	November	2008,	denying	all	material	allegations	of	the	complaint.	The	complaint	seeks	civil	penalties	of	$2,500	for	each	alleged	violation,	but	no	less	than $10.0	million,	and	an	injunction	against	Forward	and	Allied	for	alleged	permit	and	regulatory	violations	at	the	Forward	Landfill.	The	District	Attorney	contends	that	the	alleged	violations	constitute	unfair business	practices	under	the	California	Business	and	Professions	Code	section	17200,	et	seq.,	by	virtue	of	violations	of	Public	Resources	Code	Division	30,	Part	4,	Chapter	3,	Article	1,	sections	44004 and	44014(b);	California	Code	of	Regulations	Title	27,	Chapter	3,	Subchapter	4,	Article	6,	sections	20690(11)	and	20919.5;	and	Health	and	Safety	Code	sections	25200,	25100,	et	seq.,	and	25500,	et	seq. Although	the	complaint	is	worded	very	broadly	and	does	not	identify	specific	permit	or	regulatory	violations,	the	District	Attorney	has	articulated	three	primary	concerns	in	past	communications,	alleging that	the	landfill:	(1)	used	green	waste	containing	food	as	alternative	daily	cover,	(2)	exceeded	its	daily	solid	waste	tonnage	receipt	limitations	under	its	solid	waste	facility	permit,	and	(3)	received hazardous	waste	in	violation	of	its	permit	(i.e.,	auto	shredder	waste).	Additionally,	it	is	alleged	that	the	landfill	allowed	a	concentration	of	methane	gas	in	excess	of	five	percent.	Discovery	is	currently underway.	We	are	vigorously	defending	against	the	allegations.

On	February	5,	2010,	the	U.S.	Environmental	Protection	Agency	(EPA)	Region	IX	delivered	a	Finding	and	Notice	of	Violation	to	the	Forward	Landfill	as	a	result	of	alleged	violations	of	the	Title	V permit	issued	under	the	Clean	Air	Act.	The	facility	is	jointly	regulated	by	the	EPA	and	the	San	Joaquin	Valley	Air	Pollution	Control	District.	The	alleged	violations	include	operating	gas	collection wellheads	at	greater	than	15%	oxygen,	experiencing	a	subsurface	oxidation	event	on	multiple	occasions,	and	submitting	inaccurate	compliance	certifications.	We	have	requested	a	conference	with	the agencies	and	intend	to	vigorously	defend	against	the	allegations.

# Carbon	Limestone	Matter

On	May	4,	2009,	the	Ohio	Environmental	Protection	Agency	(OEPA)	issued	Proposed	Findings	and	Orders	(F&Os)	to	Carbon	Limestone	Landfill,	LLC,	our	wholly	owned	subsidiary.	The	proposed F&Os	allege	violations	regarding	the	acceptance	of	hazardous	waste	from	two	customers	and	issues	regarding	the	site's	leachate	management	collection	system	and	groundwater	monitoring	program,	and seek	corrective	actions	and	a	civil	penalty	of	$155,311.	After	negotiations	with	OEPA,	on	December	15,	2009,	Carbon	Limestone	Landfill,	LLC	and	the	OEPA	agreed	to	a	Director's	Findings	and	Final Order	(DFFO)	specifying	a	schedule	of	corrective	actions	and	a	civil	penalty	of	$73,846,	comprised	of	a	single	payment	of	$59,077,	and	funding	of	a	supplemental	environmental	project	costing	$14,769. We	have	commenced	payment	and	instituting	the	corrective	actions	as	required	by	the	DFFO.

# Litigation	Related	to	Fuel	and	Environmental	Fees

On	July	8,	2009,	CLN	Properties,	Inc.	and	Maevers	Management	Company,	Inc.,	filed	a	complaint	against	the	Company	and	one	of	its	subsidiaries	in	the	United	States	District	Court	in	Arizona,	in	which plaintiffs

complain	about	fuel	recovery	fees	and	environmental	recovery	fees	charged	by	the	Company	or	one	of	its	subsidiaries.	On	July	23,	2009,	Klingler's	European	Bake	Shop	&	Deli,	Inc.,	filed	a	complaint against	the	Company	and	one	of	its	subsidiaries	in	the	Circuit	Court	of	Jefferson	County,	Alabama,	in	which	plaintiff	complains	about	fuel/environmental	recovery	fees	and	administrative	fees	charged by	the	Company	or	one	of	its	subsidiaries.	The	CLN	Properties/Maevers	complaint,	which	the	plaintiffs	amended	on	August	31,	2009,	purports	to	be	filed	on	behalf	of	a	nationwide	class	of	similarly- situated	plaintiffs,	while	the	Klingler's	complaint	purports	to	be	filed	on	behalf	of	a	class	of	similarly	situated	plaintiffs	in	Alabama.	Each	complaint	asserts	various	legal	and	equitable	theories	of	recovery and	alleges	in	essence	that	the	fees	were	not	properly	disclosed,	were	unfair,	and	were	contrary	to	contract.	We	filed	motions	to	dismiss	in	both	actions.	On	January	13,	2010,	the	court	in	the CLN/Maevers	case	granted	our	motion	to	dismiss	in	part	and	denied	it	in	part.	Plaintiff	in	the	Klingler's	case	voluntarily	dismissed	the	action	without	prejudice	on	October	23,	2009	and	subsequently	re- filed	a	virtually	identical	complaint	against	a	different	subsidiary	of	the	company	on	November	20,	2009.	We	recently	moved	to	dismiss	this	new	complaint.	We	will	continue	to	vigorously	defend	the claims	in	both	lawsuits.

# Imperial	Landfill	Matter

On	May	18,	2009,	the	Pennsylvania	Department	of	Environmental	Protection	(PADEP)	and	the	Allegheny	County	Health	Department	issued	to	the	Imperial	Landfill	a	proposed	consent	order	and agreement	for	a	series	of	alleged	violations	related	to	landfill	gas,	leachate	control,	cover	management,	and	resulting	nuisance	odor	complaints	in	late	2008	and	2009.	PADEP	subsequently	issued additional	notices	of	violation	for	similar	alleged	violations.	The	combined	penalties	proposed	by	the	agencies	total	approximately	$1	million.	We	are	engaging	in	ongoing	discussions	with	the	agencies	to reach	a	negotiated	settlement,	and	have	been	aggressively	working	to	correct	any	issues	alleged	in	the	order.

# Litigation	Related	to	the	Merger	with	Allied

On	December	3,	2008,	the	DOJ	and	seven	state	attorneys	general	filed	a	complaint,	Hold	Separate	Stipulation	and	Order,	and	competitive	impact	statement,	together	with	a	proposed	final	judgment,	in the	United	States	District	Court	for	the	District	of	Columbia,	in	connection	with	approval	under	the	HSR	Act	of	our	merger	with	Allied.	The	court	entered	the	Hold	Separate	Stipulation	and	Order	on December	4,	2008,	which	terminated	the	waiting	period	under	the	HSR	Act	and	allowed	the	parties	to	close	the	transaction	subject	to	the	conditions	described	in	the	Hold	Separate	Stipulation	and	Order. These	conditions	include	the	divestiture	of	certain	assets	which	were	completed	by	September	30,	2009.	However,	the	final	judgment	can	only	be	approved	by	the	court	after	the	DOJ	publishes	a	notice	in the	Federal	Register	and	considers	comments	it	receives.	During	this	period,	if	the	DOJ	believes	that	the	final	judgment	is	no	longer	in	the	public	interest,	the	DOJ	may	withdraw	its	support	of	the	final judgment	and	seek	to	prevent	the	final	judgment	from	becoming	final	in	its	present	form.	Likewise,	the	court	may,	in	its	discretion,	modify	the	divestitures	or	other	relief	sought	by	the	DOJ	if	the	court believes	that	such	modification	is	in	the	public	interest.	On	July	16,	2009,	the	DOJ	and	the	seven	state	attorneys	general	filed	a	motion	seeking	entry	of	the	proposed	final	judgment.	The	precise	timing for	the	confirmation	of	the	final	judgment	is	not	known.	Management	believes	that	the	court	will	enter	the	final	judgment	and	that	modifications	to	the	final	judgment,	if	any,	will	not	be	material.

# Proxy	Disclosure	Matter

In	late	2009,	a	Republic	stockholder	brought	a	lawsuit	in	Federal	court	in	Delaware	challenging	our	disclosures	in	our	2009	proxy	statement	with	respect	to	the	Executive	Incentive	Plan	("EIP")	that	was approved	by	our	stockholders	at	the	2009	annual	meeting.	The	lawsuit	is	styled	as	a	combined	proxy	disclosure	claim	and	derivative	action.	We	are	a	defendant	only	with	respect	to	the	proxy	disclosure claim,	which	seeks	only	to	require	us	to	make	additional	disclosures	regarding	the	EIP	and	to	hold	a	new	stockholder	vote	prior	to	making	any	payments	under	the	EIP.	The	derivative	claim	is	purportedly brought	on	behalf	of	our	company	against	all	of	our	directors	and	the	individuals	who	were	executive	officers	at	the	time	of	the	2009	annual	meeting	and	alleges,	among	other	things,	breach	of	fiduciary duty.	That	claim	also	seeks	injunctive	relief	and	seeks	to	recoup	on	behalf	of	our	company	an	unspecified	amount	of	the	incentive	compensation	that	may	be

paid	to	our	executives	under	the	EIP,	as	well	as	the	amount	of	any	tax	deductions	that	may	be	lost	if	the	EIP	does	not	comply	with	Section	162(m)	of	the	Internal	Revenue	Code.	We	believe	the	lawsuit	is without	merit	and	is	not	material	and	intend	to	vigorously	defend	against	the	plaintiff's	allegations.

# Contracting	Matter

We	recently	discovered	actions	of	non-compliance	by	one	of	our	subsidiaries	with	the	subcontracting	provisions	of	certain	government	contracts	in	one	of	our	markets.	We	reported	the	discovery	to,	and expect	further	discussions	with,	law	enforcement	authorities.	Such	non-compliance	could	result	in	payments	by	us	in	the	form	of	restitution,	damages,	or	penalties,	or	the	loss	of	future	business.	Based	on the	information	currently	available	to	us,	including	our	expectation	that	our	self-disclosure	will	be	viewed	favorably	by	the	applicable	authorities,	we	presently	believe	that	the	resolution	of	the	matter, while	it	may	have	a	material	impact	on	our	results	of	operations	or	cash	flows	in	the	period	in	which	it	is	recognized	or	paid,	will	not	have	a	material	adverse	effect	on	our	consolidated	financial	position.

# Congress	Development	Landfill	Matters

Congress	Development	Co.	(CDC)	is	a	general	partnership	that	owns	and	operates	the	Congress	Landfill.	The	general	partners	in	CDC	are	our	subsidiary,	Allied	Waste	Transportation,	Inc.	(Allied Transportation),	and	an	unaffiliated	entity,	John	Sexton	Sand	&	Gravel	Corporation	(Sexton).	Sexton	was	the	operator	of	the	landfill	through	early	2007,	when	Allied	Transportation	took	over	as	the operator.	The	general	partners	likely	will	be	jointly	and	severally	liable	for	the	costs	associated	with	the	following	matters	relating	to	the	Congress	Landfill.

In	January	2006,	CDC	was	issued	an	Agreed	Preliminary	Injunction	and	Order	by	the	Circuit	Court	of	Illinois,	Cook	County.	Subsequently,	the	court	issued	two	additional	Supplemental	Orders	that required	CDC	to	implement	certain	remedial	actions	at	the	Congress	Landfill,	which	remedial	actions	are	underway.

In	a	suit	originally	filed	on	December	23,	2009	in	the	Circuit	Court	of	Cook	County,	Illinois	and	subsequently	amended	to	add	additional	plaintiffs,	approximately	1,000	plaintiffs	sued	our	subsidiaries Allied	Transportation	and	Allied	Waste	Industries,	Inc.,	CDC	and	Sexton.	The	plaintiffs	allege	bodily	injury,	property	damage	and	inability	to	have	normal	use	and	enjoyment	of	property	arising	from, among	other	things,	odors	and	other	damages	arising	from	landfill	gas	leaking,	and	they	base	their	claims	on	negligence,	trespass,	and	nuisance.	The	plaintiffs	have	requested	actual	damages	in	excess	of $50	million	and	punitive	damages	of	$50	million.	We	intend	to	vigorously	defend	against	the	plaintiffs'	allegations	in	this	action.	We	cannot	at	this	time	predict	the	ultimate	outcome	of	this	matter	or	the reasonably	probable	loss,	if	any.

# Livingston	Matter

On	October	13,	2009,	the	Twenty-First	Judicial	District	Court,	Parish	of	Livingston,	State	of	Louisiana,	issued	its	Post	Class	Certification	Findings	of	Fact	and	Conclusions	of	Law	in	a	lawsuit	alleging nuisance	from	the	activities	of	the	CECOS	hazardous	waste	facility	located	in	Livingston	Parish,	Louisiana.	The	court	granted	class	certification	for	all	those	living	within	a	six	mile	radius	of	the	CECOS site	between	the	years	1977	and	1990.	The	site	last	accepted	waste	in	June	1990.	The	class	certification	order	remains	subject	to	appeal,	and	we	intend	to	continue	to	defend	this	lawsuit	vigorously.

# Sunshine	Canyon	Matter

On	November	17,	2009,	the	South	Coast	Air	Quality	Management	District	(District)	issued	an	Order	for	Abatement	as	a	result	of	a	series	of	odor	complaints	alleged	to	be	associated	with	the	operations at	the	Sunshine	Canyon	Landfill	located	in	Sylmar,	California.	The	Order	describes	eight	notices	of	violation	beginning	in	November	2008	and	continuing	to	November	2009.	The	District	Hearing	Board held	a	compliance	hearing	on	December	17,	2009,	at	which	we	described	the	measures	to	mitigate	the	odors.	A	final	order	and	settlement	document	has	not	been	issued.

# Tax	Matters

We	and	our	subsidiaries	are	subject	to	income	tax	in	the	U.S.	and	Puerto	Rico,	as	well	as	income	tax	in	multiple	state	jurisdictions.	We	have	acquired	Allied's	open	tax	periods	as	part	of	the	acquisition. Allied	is	currently	under	examination	or	administrative	review	by	various	state	and	federal	taxing	authorities	for	certain	tax	years,	including	federal	income	tax	audits	for	calendar	years	2000	through 2007.	Prior	to	the	merger,	the	IRS	had	commenced	an	examination	of	our	2005	through	2007	tax	years	and	this	exam	is	currently	ongoing.	In	2009,	the	IRS	opened	an	examination	of	our	2008	tax	year. We	are	also	under	state	examination	in	various	jurisdictions	for	various	tax	years.	These	audits	are	ongoing.

# Risk	Management	Companies

Prior	to	Allied's	acquisition	of	Browning	Ferris	Industries	(BFI)	in	July	1999,	certain	BFI	operating	companies,	as	part	of	a	risk	management	initiative	to	manage	and	reduce	costs	associated	with	certain liabilities,	contributed	assets	and	existing	environmental	and	self-insurance	liabilities	to	six	fully	consolidated	BFI	risk	management	companies	(RMCs)	in	exchange	for	stock	representing	a	minority ownership	interest	in	the	RMCs.	Subsequently,	the	BFI	operating	companies	sold	that	stock	in	the	RMCs	to	third	parties	at	fair	market	value	which	resulted	in	a	capital	loss	of	approximately	$902	million for	tax	purposes,	calculated	as	the	excess	of	the	tax	basis	of	the	stock	over	the	cash	proceeds	received.

On	January	18,	2001,	the	IRS	designated	this	type	of	transaction	and	other	similar	transactions	as	a	"potentially	abusive	tax	shelter"	under	IRS	regulations.	During	2002,	the	IRS	proposed	the disallowance	of	all	of	this	capital	loss.	In	April	2005,	the	Appeals	Office	of	the	IRS	upheld	the	disallowance	of	the	capital	loss	deduction	with	respect	to	BFI	tax	years	prior	to	the	acquisition.	In	July 2005,	Allied	filed	a	suit	for	refund	in	the	United	States	Court	of	Federal	Claims	(CFC)	relating	to	the	BFI	tax	years.	In	January	2009,	we	paid	all	tax,	interest	and	penalty	asserted	by	the	IRS	with	respect to	the	BFI	tax	years	and	withdrew	our	suit	for	refund	in	the	CFC.

In	August	2008,	Allied	received	from	the	IRS	a	Statutory	Notice	of	Deficiency	related	to	its	utilization	of	BFI's	capital	loss	carryforward	on	Allied's	1999	tax	return.	In	October	2008,	Allied	filed	a	suit for	refund	in	federal	district	court	in	Arizona	with	respect	to	Allied's	1999	tax	year.	In	December	2009,	we	reached	a	settlement	with	both	the	DOJ	and	IRS	for	Allied's	1999	tax	year	and	all	subsequent tax	years.	Under	the	settlement,	the	company	resolved	all	remaining	liability	for	this	matter	(including	federal	and	state	tax,	penalty	and	interest)	for	approximately	$125	million.	We	paid	approximately $58	million	in	the	first	quarter	of	2010	and	expect	to	pay	the	remainder,	approximately	$67	million,	later	in	2010.	While	the	final	settlement	amount	is	less	than	the	amount	previously	accrued	for	this matter,	the	accrual	and	the	adjustment	thereto	are	reflected	in	our	allocation	of	purchase	price	associated	with	the	acquisition	of	Allied	and	had	no	impact	on	our	consolidated	statement	of	income.

# Exchange	of	Partnership	Interests

In	April	2002,	Allied	exchanged	minority	partnership	interests	in	four	waste-to-energy	facilities	for	majority	partnership	interests	in	equipment	purchasing	businesses,	which	are	now	wholly	owned subsidiaries.	In	November	2008,	the	IRS	issued	a	formal	disallowance	to	Allied	contending	that	the	exchange	was	instead	a	sale	on	which	a	corresponding	gain	should	have	been	recognized.	We	believe our	position	is	supported	by	relevant	technical	authorities	and	strong	business	purpose	and	we	intend	to	vigorously	defend	our	position	on	this	matter.	Although	we	intend	to	vigorously	defend	our position	on	this	matter,	if	the	exchange	is	treated	as	a	sale,	we	estimate	it	could	have	a	potential	federal	and	state	cash	tax	impact	of	approximately	$156	million	plus	accrued	interest	through December	31,	2009	of	approximately	$59	million.	In	addition,	the	IRS	has	asserted	a	penalty	of	20%	of	the	additional	income	tax	due.	The	potential	tax	and	interest	(but	not	penalty	or	penalty-related interest)	of	a	full	adjustment	for	this	matter	have	been	fully	reserved	in	our	consolidated	balance	sheet	at	December	31,	2009.	The	successful	assertion	by	the	IRS	of	penalty	and	penalty-related	interest	in connection	with	this	matter	could	have	a	material	adverse	impact	on	our	consolidated	results	of	operations	and	cash	flows.

# Methane	Gas

As	part	of	its	examination	of	Allied's	2000	through	2006	federal	income	tax	returns,	the	IRS	reviewed	Allied's	treatment	of	costs	associated	with	its	landfill	operations.	As	a	result	of	this	review,	the	IRS has	proposed	that	certain	landfill	costs	be	allocated	to	the	collection	and	control	of	methane	gas	that	is	naturally	produced	within	the	landfill.	The	IRS'	position	is	that	the	methane	gas	produced	by	a landfill	is	a	joint	product	resulting	from	operation	of	the	landfill	and,	therefore,	these	costs	should	not	be	expensed	until	the	methane	gas	is	sold	or	otherwise	disposed.

We	have	protested	this	matter	to	the	Appeals	Office	of	the	IRS.	We	believe	we	have	several	meritorious	defenses,	including	the	fact	that	methane	gas	is	not	actively	produced	for	sale	by	us	but	rather arises	naturally	in	the	context	of	providing	disposal	services.	Therefore,	we	believe	that	the	subsequent	resolution	of	this	issue	will	not	have	a	material	adverse	impact	on	our	consolidated	financial position,	results	of	operations	or	cash	flows.

# ITEM	5.	MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER

# MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY	SECURITIES

# Market	Information,	Holders	and	Dividends

The	principal	market	for	our	common	stock	is	the	New	York	Stock	Exchange	(NYSE),	and	it	is	traded	under	the	symbol	"RSG".	The	following	table	sets	forth	the	range	of	the	high	and	low	sale	prices per	share	of	our	common	stock	on	the	NYSE	and	the	cash	dividends	declared	per	share	of	common	stock	for	the	periods	indicated:

|  | High | Low | Declared |
| :--- | :--- | :--- | :--- |
| Year\tEnded\tDecember\t31,\t2009: |  |  |  |
| First\tQuarter | $\t26.81 | $15.05 | $0.19 |
| Second\tQuarter | 24.45 | 16.31 | 0.19 |
| Third\tQuarter | 27.34 | 23.32 | 0.19 |
| Fourth\tQuarter | 29.82 | 25.44 | 0.19 |
| Year\tEnded\tDecember\t31,\t2008: |  |  |  |
| First\tQuarter | $32.00 | $\t27.30 | $\t0.17 |
| Second\tQuarter | 34.44 | 29.09 | 0.17 |
| Third\tQuarter | 36.52 | 27.29 | 0.19 |
| Fourth\tQuarter | 29.96 | 18.25 | 0.19 |

There	were	879	holders	of	record	of	our	common	stock	at	February	16,	2010,	which	does	not	include	beneficial	owners	for	whom	Cede	&	Co.	or	others	act	as	nominees.

In	February	2010,	our	Board	of	Directors	declared	a	regular	quarterly	dividend	of	$0.19	per	share	for	stockholders	of	record	on	April	1,	2010.	We	expect	to	continue	to	pay	quarterly	cash	dividends,	and we	may	consider	increasing	our	quarterly	cash	dividends	if	we	believe	it	will	enhance	shareholder	value.

We	have	the	ability	under	our	credit	facilities	to	pay	dividends	and	repurchase	our	common	stock	subject	to	our	compliance	with	the	financial	covenants	in	our	credit	facilities.	As	of	December	31,	2009, we	were	in	compliance	with	the	financial	covenants	of	our	credit	facilities.

# Issuer	Purchases	of	Equity	Securities

From	2000	through	2009,	our	Board	of	Directors	authorized	the	repurchase	of	up	to	$2.6	billion	of	our	common	stock.	As	of	December	31,	2009,	we	had	paid	$2.3	billion	to	repurchase	82.6	million shares	of	our	common	stock.	We	suspended	our	share	repurchase	program	in	the	second	quarter	of	2008	due	to	the	pending	merger	with	Allied.	We	expect	that	our	share	repurchase	program	will	continue to	be	suspended	until	approximately	2011.	The	following	table	provides	information	relating	to	our	purchases	of	shares	of	our	common	stock	during	the	three	months	ended	December	31,	2009:

# Total	Number	of

|  | Shares	(or	Units)<br>Purchased	(a) | Average	Price	Paid<br>per	Share |
| :--- | :--- | :--- |
| October\t2009 |  | —\t $— |
| November\t2009 | — | — |
| December\t2009 | 20,098 | \t\t28.83 |
|  | 20,098 | $\t\t\t\t\t\t\t\t\t\t\t\t28.83 |

(a) This	amount	represents	shares	withheld	upon	vesting	of	restricted	stock	to	satisfy	statutory	minimum	tax	withholding	obligations.	We	intend	to	continue	to	satisfy	minimum	tax	withholding obligations	in	connection	with	the	vesting	of	outstanding	restricted	stock	through	the	withholding	of	shares.

# Recent	Sales	of	Unregistered	Securities

# Performance	Graph

The	following	graph	compares	the	performance	of	our	common	stock	to	the	Standard	&	Poor's	500	Stock	Index	(S&P	500	Index)	and	the	Dow	Jones	Waste	&	Disposal	Services	Index	(DJW&DS	Index). The	graph	covers	the	period	from	December	31,	2004	to	December	31,	2009	and	assumes	that	the	value	of	the	investment	in	our	common	stock	and	in	each	index	was	$100	at	December	31,	2004	and	that all	dividends	were	reinvested.

# Comparison	of	Five	Year	Cumulative	Total	Return

# Assumes	Initial	Investment	of	$100

# Indexed	Returns	For	Years	Ending

# December	31,

|  | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Republic\tServices,\tInc. | $100.00 | $113.61 | $124.87 | $146.98 | $119.27 | $140.74 |
| S&amp;P\t500\tStock\tIndex | \t100.00 | \t104.91 | \t121.48 | \t128.16 | 80.74 | \t102.11 |
| DJW&amp;DS\tIndex | \t100.00 | \t106.06 | \t130.32 | \t136.29 | \t127.99 | \t145.69 |

The	following	Selected	Financial	Data	should	be	read	in	conjunction	with	our	consolidated	financial	statements	and	notes	thereto	as	of	December	31,	2009	and	2008	and	for	each	of	the	three	years	in	the period	ended	December	31,	2009	and	Item	7,	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	included	elsewhere	in	this	Annual	Report	on	Form	10-K.

Our	merger	with	Allied	was	effective	December	5,	2008	and	has	been	accounted	for	as	an	acquisition	of	Allied	by	Republic.	The	consolidated	financial	statements	include	the	operating	results	of	Allied from	the	date	of	the	acquisition,	and	have	not	been	retroactively	restated	to	include	Allied's	historical	financial	position	or	results	of	operations.	In	accordance	with	the	purchase	method	of	accounting, the	purchase	price	paid	has	been	allocated	to	the	assets	and	liabilities	acquired	based	upon	their	estimated	fair	values	as	of	the	acquisition	date,	with	the	excess	of	the	purchase	price	over	the	net	assets acquired	being	recorded	as	goodwill.

Our	shares,	per	share	data	and	weighted	average	common	and	common	equivalent	shares	outstanding	have	been	retroactively	adjusted	for	all	periods	prior	to	2007	to	reflect	a	3-for-2	stock	split	in	the form	of	a	stock	dividend	that	was	effective	on	March	16,	2007.

See	Notes	1,	2,	3,	8,	9,	10	and	12	of	the	notes	to	our	consolidated	financial	statements	in	Item	8	of	this	Form	10-K	for	a	discussion	of	basis	of	presentation,	significant	accounting	policies,	business acquisitions	and	divestitures,	assets	held	for	sale,	restructuring	charges,	landfill	and	environmental	costs,	debt,	income	taxes	and	stockholders'	equity	and	their	effect	on	comparability	of	year-to-year	data.

These	historical	results	are	not	necessarily	indicative	of	the	results	to	be	expected	in	the	future	(in	millions,	except	per	share	amounts).

|  | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statement\tof\tOperations\tData: |  |  |  |  |  |
| Revenue | $\t\t8,199.1 | $\t\t3,685.1 | $\t\t3,176.2 | $\t\t3,070.6 | $\t\t2,863.9 |
| Expenses: |  |  |  |  |  |
| Cost\tof\toperations | 4,844.2 | 2,416.7 | 2,003.9 | 1,924.4 | 1,803.9 |
| Depreciation,\tamortization\tand\tdepletion | 869.7 | 354.1 | 305.5 | 296.0 | 278.8 |
| Accretion | 88.8 | 23.9 | 17.1 | 15.7 | 14.5 |
| Selling,\tgeneral\tand\tadministrative | 880.4 | 434.7 | 313.7 | 315.0 | 289.5 |
| Loss\t(gain)\ton\tdisposition\tof\tassets\tand |  |  |  |  |  |
| impairments,\tnet | (137.0) | 89.8 | — | — | — |
| Restructuring\tcharges | 63.2 | 82.7 | — | — | — |
| Operating\tincome | 1,589.8 | 283.2 | 536.0 | 519.5 | 477.2 |
| Interest\texpense | (595.9) | (131.9) | (94.8) | (95.8) | (81.0) |
| Loss\ton\textinguishment\tof\tdebt | (134.1) | — | — | — | — |
| Interest\tincome | 2.0 | 9.6 | 12.8 | 15.8 | 11.4 |
| Other\tincome\t(expense),\tnet | 3.2 | (1.6) | 14.1 | 4.2 | 1.6 |
| Income\tbefore\tincome\ttaxes | 865.0 | 159.3 | 468.1 | 443.7 | 409.2 |
| Provision\tfor\tincome\ttaxes | 368.5 | 85.4 | 177.9 | 164.1 | 155.5 |
| Net\tincome | 496.5 | 73.9 | 290.2 | 279.6 | 253.7 |
| Less:\tIncome\tattributable\tto\tnoncontrolling\tinterests | (1.5) | (0.1) | — | — | — |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $495.0 | $73.8 | $290.2 | $279.6 | $253.7 |
| Basic\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders:\nBasic\tearnings\tper\tshare | $1.30 | $0.38 | $1.53 | $1.41 | $1.23 |
| Weighted\taverage\tcommon\tshares\toutstanding | 379.7 | 196.7 | 190.1 | 198.2 | 207.0 |
| Diluted\tearnings\tper\tshare\tattributable\tto\tRepublic |  |  |  |  |  |
| Services,\tInc.\tstockholders: |  |  |  |  |  |
| Diluted\tearnings\tper\tshare | $1.30 | $0.37 | $1.51 | $1.39 | $1.20 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 381.0 | 198.4 | 192.0 | 200.6 | 210.8 |
| Cash\tdividends\tper\tcommon\tshare | $0.7600 | $0.7200 | $0.5534 | $0.4000 | $0.3466 |

|  | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Other\tOperating\tData: |  |  |  |  |  |
| Cash\tflows\tfrom\toperating\tactivities | $1,396.5 | $512.2 | $661.3 | $511.2 | $747.8 |
| Capital\texpenditures | 826.3 | 386.9 | 292.5 | 326.7 | 309.0 |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 31.8 | 8.2 | 6.1 | 18.5 | 10.1 |
| Balance\tSheet\tData: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $48.0 | $68.7 | $21.8 | $29.1 | $131.8 |
| Restricted\tcash\tand\tmarketable\tsecurities | 240.5 | 281.9 | 165.0 | 153.3 | 255.3 |
| Total\tassets | 19,540.3 | 19,921.4 | 4,467.8 | 4,429.4 | 4,550.5 |
| Total\tdebt | 6,962.6 | 7,702.5 | 1,567.8 | 1,547.2 | 1,475.1 |
| Total\tstockholders'\tequity | 7,567.1 | 7,282.5 | 1,303.8 | 1,422.1 | 1,605.8 |

The	following	discussion	should	be	read	in	conjunction	with	our	audited	consolidated	financial	statements	and	the	notes	thereto,	included	elsewhere	herein.	This	discussion	may	contain	forward-looking statements	that	anticipate	results	based	on	management's	plans	that	are	subject	to	uncertainty.	We	discuss	in	more	detail	various	factors	that	could	cause	actual	results	to	differ	from	expectations	in Item	1A.	Risk	Factors.

# Overview	of	Our	Business

We	are	the	second	largest	provider	of	services	in	the	domestic	non-hazardous	solid	waste	industry,	as	measured	by	revenue.	We	provide	non-hazardous	solid	waste	collection	services	for	commercial, industrial,	municipal	and	residential	customers	through	376	collection	companies	in	40	states	and	Puerto	Rico.	We	own	or	operate	223	transfer	stations,	192	active	solid	waste	landfills	and	78	recycling facilities.	We	also	operate	74	landfill	gas	and	renewable	energy	projects.	We	completed	our	merger	with	Allied	Waste	Industries,	Inc.	(Allied)	in	December	2008.	We	believe	that	this	merger	creates	a strong	operating	platform	that	will	allow	us	to	continue	to	provide	quality	service	to	our	customers	and	superior	returns	to	our	stockholders.

Despite	the	challenging	economic	environment,	our	business	performed	well	during	2009	due	in	large	part	to	the	indispensable	nature	of	our	services	and	the	scalability	of	our	business.	Revenue	for	the year	ended	December	31,	2009	increased	by	122.5%	to	$8.2	billion	compared	to	$3.7	billion	during	the	comparable	period	in	2008.	This	increase	in	revenue	is	attributable	to	our	merger	with	Allied. Assuming	our	merger	with	Allied	occurred	on	January	1,	2008,	and	the	revenue	associated	with	the	related	divestitures	is	eliminated	in	the	period	the	assets	were	sold	along	with	the	comparable	prior year	period,	core	revenue	for	the	year	ended	December	31,	2009	would	have	decreased	10.7%	consisting	of	a	3.0%	increase	in	core	price	offset	by	decreases	of	9.5%	in	core	volume,	2.5%	in	fuel	charges and	1.7%	in	commodity	price.	The	core	price	increase,	together	with	cost	control	steps	taken	by	our	operations	management	to	scale	the	business	down	for	lower	volumes,	served	to	moderate	profit margin	declines	associated	with	rising	costs	and	declining	revenue	resulting	from	decreases	in	service	volumes.

# 2010	Business	Initiatives

We	expect	that	the	economic	challenges	we	experienced	during	the	latter	part	of	2008	and	all	of	2009	will	extend	into	2010.	We	anticipate	continued	year-over-year	decreases	in	volumes	in	all	lines	of our	business.	However,	we	believe	that	we	will	continue	to	benefit	from	our	cost	control	and	pricing	initiatives.	Our	business	is	capital	intensive.	Slower	growth	allows	us	to	reduce	capital	spending,	thus maintaining	strong	free	cash	flow	despite	a	weaker	economy.	In	addition,	our	attention	is	focused	on	completing	the	integration	of	our	newly	merged	company,	achieving	cost	synergies	and	pursuing other	revenue	enhancing	and	cost	reduction	opportunities.

Our	business	initiatives	for	2010	focus	on	completing	the	integration	of	our	operations	with	Allied's,	while	remaining	focused	on	the	aspects	of	our	operations	that	have	made	us	successful.	Our	initiatives include:

•		Safety.	Safety	remains	our	highest	priority	for	all	of	our	employees.	Republic	has	a	long-standing	commitment	to	ensuring	a	safe	working	environment	for	our	employees.	Our	commitment	to	safety is	unwavering	and	is	evident	in	our	mission	statement.	We	will	continue	to	foster	a	safe	work	environment	for	our	employees	and	the	communities	that	we	service.	In	addition,	we	will	continue	to reward	our	people	for	operating	in	a	safe	and	conscientious	manner.

•		Service	Delivery.	We	believe	that	our	focus	on	service	delivery	differentiates	us	from	others	in	the	waste	management	industry.	During	2010,	we	will	continue	to	exceed	our	customers' expectations	through	the	consistent	delivery	of	high	quality	service.	We	will	also	focus	on	increasing	the	efficiency	of	our	service	delivery.	We	believe	that	our	attention	to	efficient	delivery	of	high quality	customer	service	will	enhance	customer	retention.

•		Synergy	Capture.	Prior	to	the	effective	date	of	our	merger	with	Allied,	we	identified	$150	million	of	annual	run-rate	integration	synergies.	We	also	developed	a	detailed	plan	for	realizing	this	goal that	includes	participation	at	all	levels	throughout	the	company	from	the	drivers	of	our	fleet	of	collection	vehicles	to	our	board	of	directors.	This	plan	anticipated	achieving	$100	million	of	annual run-rate	integration	synergies	by	the	end	of	fiscal	2009.	As	of	December	31,	2009,	we	have	already	met	our	original	goal	of	$150	million	of	run-rate	synergies	and	have	increased	our	total	goal	for annual	run-rate	synergies	to	$165	to	$175	million.	We	expect	to	achieve	this	goal	by	the	end	of	2010.	We	also	expect	to	spend	approximately	$34	million	in	one-time	costs	during	2010	directly attributable	to	achieving	our	synergy	goal.

•		Other	Opportunities.	With	our	synergy	goals	well	within	our	reach,	during	2010	we	intend	to	redirect	our	attention	to	other	opportunities	that	were	identified	during	our	synergy	planning discussions,	but	were	assigned	a	lower	priority.	These	opportunities	include	enhancing	pricing	systems	and	return	on	investment	models,	standardizing	prospecting,	sales	reporting	and	disposal optimization	tools,	standardizing	repair	and	maintenance	procedures,	developing	a	new	operating	platform	for	our	national	accounts	program	to	ensure	customer	satisfaction,	and	consolidating	and standardizing	our	customer	call	centers.	We	believe	that	these	initiatives	will	provide	our	company	with	substantial	earnings	benefit	when	they	are	fully	implemented.

•		Return	on	Invested	Capital.	Enhancing	our	return	on	invested	capital	is	the	culmination	of	all	our	2010	initiatives.	We	will	maintain	our	focus	on	disciplined	growth	and	investing	in	our	business	to ensure	increasing	returns	on	invested	capital	and	shareholder	value.

# Recent	Developments

In	the	first	quarter	of	2010,	we	notified	the	registered	holders	of	our	6.125%	Senior	Notes	due	2014	(the	6.125%	Senior	Notes)	that	we	will	redeem	all	of	the	notes	outstanding	in	March	2010.	The 6.125%	Senior	Notes	will	be	redeemed	at	a	price	equal	to	102.042%	of	the	principal	amount,	of	which	$425.0	million	is	outstanding,	plus	accrued	and	unpaid	interest.	We	expect	to	incur	a	charge	upon extinguishment	of	the	6.125%	Senior	Notes	of	approximately	$52	million.	We	expect	this	charge	will	be	reflected	in	our	first	quarter	2010	financial	results.

In	the	fourth	quarter	of	2009,	we	notified	the	registered	holders	of	our	7.875%	Senior	Notes	due	2013,	our	4.250%	Senior	Subordinated	Convertible	Debentures	due	2034	and	our	7.375%	Senior	Notes due	2014	that	we	will	redeem	all	of	the	notes	outstanding	in	November	and	December	of	2009.	The	7.875%	Senior	Notes	due	2013	were	redeemed	at	102.625%,	the	4.250%	Senior	Subordinated Convertible	Debentures	due	2034	were	redeemed	at	par	and	the	7.375%	Senior	Notes	due	2014	were	redeemed	at	103.688%.	With	respect	to	these	redemptions,	as	well	as	additional	secondary	market repurchases	of	our	senior	notes,	we	incurred	a	fourth	quarter	loss	on	extinguishment	of	debt	of	$102.3	million.	Additionally,	in	September	2009,	we	purchased	and	retired	$325.5	million	of	our outstanding	senior	notes	maturing	in	2010	and	2011	resulting	in	a	third	quarter	loss	on	extinguishment	of	debt	of	$31.8	million.	For	the	year	ended	December	31,	2009,	total	loss	on	extinguishment	of debt	was	$134.1	million.

The	repayment	of	the	senior	notes	was	primarily	funded	by	the	issuance	of	$650.0	million	of	5.500%	Senior	Notes	due	2019	and	$600.0	million	of	5.250%	Senior	Notes	due	2021	in	two	separate	private placement	transactions.	The	notes	are	general	senior	unsecured	obligations	of	our	parent	company.	The	notes	are	guaranteed	by	each	of	our	subsidiaries	that	also	guarantee	our	Credit	Facilities.	These guarantees	are	general	senior	unsecured	obligations	of	the	subsidiary	guarantors.	In	addition,	we	entered	into	a	Registration	Rights	Agreements	with	the	representatives	of	the	initial	purchasers	of	the notes.	Under	the	Registration	Rights	Agreements,	we	agreed	to	use	our	reasonable	best	efforts	to	cause	to	become	effective	a	registration	statement	to	exchange	the	notes	for	freely	tradable	notes	issued by	us.	If	we	are	unable	to	effect	the	exchange	offer	within	365	days,	we	agreed	to	pay	additional	interest	on	the	notes.

In	the	future	we	may	choose	to	voluntarily	retire	certain	portions	of	our	outstanding	debt	before	their	maturity	dates	using	cash	from	operations	or	additional	borrowings.	We	may	also	explore opportunities	in	capital	markets	to	fund	redemptions	should	market	conditions	be	favorable.	The	early	extinguishment	of	debt	may	result	in	an	impairment	charge	in	the	period	in	which	the	debt	is repurchased	and	retired.	The	loss	on	early	extinguishment	of	debt	relates	to	premiums	paid	to	effectuate	the	repurchase	and	the	relative	portion	of	unamortized	note	discounts	and	debt	issue	costs.

# Business	Acquisitions	and	Divestitures

We	make	decisions	to	acquire,	invest	in	or	divest	of	businesses	based	on	financial	and	strategic	considerations.	Businesses	acquired	are	accounted	for	under	the	purchase	method	of	accounting	and	are included	in	our	consolidated	financial	statements	from	the	date	of	acquisition.

# Merger	with	Allied	Waste	Industries,	Inc.

On	December	5,	2008,	we	acquired	all	the	issued	and	outstanding	shares	of	Allied	in	a	stock-for-stock	transaction	for	an	aggregate	purchase	price	of	$12.1	billion,	which	included	approximately $5.4	billion	of	debt,	at	fair	value.	We	completed	our	purchase	price	allocation	for	this	acquisition	during	2009.	Adjustments,	if	any,	after	the	allocation	period	made	to	the	valuation	of	assets	and	liabilities acquired	will	be	recorded	in	the	consolidated	statement	of	income	in	the	period	in	which	such	adjustments	become	known.	All	of	the	approximate	$9.7	billion	of	goodwill	and	other	intangible	assets resulting	from	the	acquisition	will	be	non-deductible	for	income	tax	purposes.

As	a	condition	of	the	merger	with	Allied	in	December	2008,	the	Department	of	Justice	(DOJ)	required	us	to	divest	of	certain	assets	and	related	liabilities.	As	such,	we	classified	these	assets	and	liabilities as	assets	held	for	sale	in	our	consolidated	balance	sheet	at	December	31,	2008.	As	of	December	31,	2009,	we	have	completed	our	required	divestitures	and	we	recognized	a	net	gain	on	disposition	of	our legacy	Republic	net	assets	of	$153.5	million.

As	a	result	of	our	acquisition	of	Allied,	we	committed	to	a	restructuring	plan	related	to	our	corporate	overhead	and	other	administrative	and	operating	functions.	The	plan	included	closing	our	corporate office	in	Florida,	consolidating	administrative	functions	to	Arizona,	the	former	headquarters	of	Allied,	and	reducing	staffing	levels.	The	plan	also	included	closing	and	consolidating	certain	operating locations	and	terminating	certain	leases.	During	the	year	ended	December	31,	2009,	we	incurred	$63.2	million	of	restructuring	and	integration	charges	related	to	our	integration	of	Allied,	of	which $34.0	million	consists	of	charges	for	severance	and	other	employee	termination	and	relocation	benefits.	The	remainder	of	the	charges	primarily	related	to	consulting	and	professional	fees.	Substantially	all the	charges	are	recorded	in	our	corporate	segment.	During	2010,	we	expect	to	incur	additional	charges	approximating	$12	million	to	complete	our	plan.	We	expect	that	the	majority	of	these	charges	will be	paid	during	2010	and	extend	into	2011.	As	a	result	of	our	integration	activities,	we	expect	to	achieve	$165	million	to	$175	million	of	annual	run-rate	synergies	by	the	end	of	2010.

# Other	Business	Acquisitions	and	Divestitures

In	October	2009,	we	divested	a	hauling	operation	in	Miami-Dade	County,	Florida	and	received	proceeds	of	$32.7	million	and	recognized	a	loss	of	$10.2	million.

In	addition	to	the	acquisition	of	Allied	in	December	2008,	we	acquired	various	other	solid	waste	businesses	during	the	years	ended	December	31,	2008,	and	2007.	The	aggregate	purchase	price	we	paid for	these	transactions	was	$13.4	million	and	$4.4	million,	respectively.

In	November	2007,	we	divested	of	our	Texas-based	compost,	mulch	and	soil	business	and	received	proceeds	of	$36.5	million.	A	gain	of	$12.5	million	was	recorded	in	2007	on	this	divestiture.

# Consolidated	Results	of	Operations

The	following	table	summarizes	our	operating	revenue,	costs	and	expenses	in	millions	of	dollars	and	as	a	percentage	of	our	revenue	for	the	years	ended	December	31,	2009,	2008	and	2007:

|  | 2009 | 2009 | 2008 | 2008 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $8,199.1 | 100.0% | $3,685.1 | 100.0% | $3,176.2 | 100.0% |
| Cost\tof\toperations | 4,844.2 | 59.1 | 2,416.7 | 65.6 | 2,003.9 | 63.1 |
| Depreciation,\tamortization\tand\tdepletion\tof\tproperty\tand\tequipment | 799.1 | 9.7 | 342.3 | 9.3 | 299.0 | 9.4 |
| Amortization\tof\tother\tintangible\tassets | 70.6 | 0.9 | 11.8 | 0.3 | 6.5 | 0.2 |
| Accretion | 88.8 | 1.1 | 23.9 | 0.7 | 17.1 | 0.5 |
| Selling,\tgeneral\tand\tadministrative | 880.4 | 10.7 | 434.7 | 11.8 | 313.7 | 9.9 |
| (Gain)\tloss\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | (137.0) | (1.7) | 89.8 | 2.4 | - | - |
| Restructuring\tcharges | 63.2 | 0.8 | 82.7 | 2.2 | - | - |
| Operating\tincome | $\t\t1,589.8 | 19.4% | $283.2 | 7.7% | $536.0 | 16.9% |

During	each	of	the	two	years	ended	December	31,	2009	and	2008,	we	recorded	a	number	of	gains,	charges	(recoveries)	and	other	expenses	that	impacted	our	pre-tax	income,	net	income	attributable	to Republic	Services,	Inc.	(Net	Income	-	Republic)	and	diluted	earnings	per	share.	These	items	primarily	consist	of	the	following	(in	millions,	except	per	share	data):

|  | Year	Ended	December	31,	2009 | Year	Ended	December	31,	2009 | Year	Ended	December	31,	2009 | Year	Ended	December	31,	2008 | Year	Ended	December	31,	2008 | Year	Ended	December	31,	2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pre-tax\nIncome | Net\nIncome\t-\nRepublic | Diluted\nEarnings\nper\tShare | Pre-tax\nIncome | Net\nIncome\t-\nRepublic | Diluted\nEarnings\nper\tShare |
| As\treported | $865.0 | $495.0 | $1.30 | $159.3 | $73.8 | $0.37 |
| Loss\ton\textinguishment\tof\tdebt | 134.1 | 83.3 | 0.22 | - | - | - |
| Restructuring\tcharges | 63.2 | 38.6 | 0.10 | 82.7 | 49.9 | 0.25 |
| Costs\tto\tachieve\tsynergies | 41.8 | 25.6 | 0.06 | 2.9 | 1.7 | 0.01 |
| (Gain)\tloss\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | (137.0) | (73.8) | (0.19) | 89.8 | 54.1 | 0.27 |
| Remediation\t(recoveries)\tcharges | (6.8) | (4.1) | (0.01) | 156.8 | 94.6 | 0.48 |
| Tax\teffect\tof\tpermanent\titems | - | - | - | - | 31.1 | 0.16 |
| Adjusted | $\t960.3 | $\t564.6 | $\t\t\t\t1.48 | $\t491.5 | $\t305.2 | $\t\t\t\t\t1.54 |

Loss	on	extinguishment	of	debt.	During	the	third	and	fourth	quarters	of	2009	we	issued	$1,250.0	million	of	senior	notes,	the	proceeds	of	which	were	primarily	used	to	purchase	and	retire	outstanding senior	notes	maturing	in	2010	through	2034.	Additionally,	we	repurchased	certain	of	our	outstanding	senior	notes	in	the	secondary	market.

Restructuring	charges.	During	2009	and	the	fourth	quarter	of	2008,	we	incurred	$63.2	million	and	$82.7	million,	respectively,	of	restructuring	and	integration	charges	related	to	our	merger	with	Allied. These	charges	consist	of	severance	and	other	employee	termination	and	relocation	benefits	as	well	as	consulting	and	professional	fees.	Substantially	all	of	these	charges	were	recorded	in	our	"Corporate entities"	segment.

Costs	to	achieve	synergies.	During	2009	and	the	fourth	quarter	of	2008,	we	incurred	$41.8	million	and	$2.9	million,	respectively,	of	incremental	costs	to	achieve	our	synergy	plans.	These	incremental costs	primarily	relate	to	a	synergy	incentive	plan	as	well	as	other	integration	costs.	In	2010,	we	expect	that	we	will	continue	to	accrue	approximately	$34	million	for	our	synergy	incentive	plan.

(Gain)	loss	on	disposition	of	assets	and	impairments,	net.	During	2009,	we	recorded	(gain)	loss	on	disposition	of	assets,	net	of	costs	to	sell	of	$(137.0)	million	related	to	the	mandatory	disposition	of	assets as	required	by	DOJ	as	well	as	discretionary	dispositions.	During	2008,	we	recorded	asset	impairments	of	$89.8	million	primarily	related	to	our	Countywide	facility,	our	former	corporate	office	in	Florida and	expected	losses	on	sales	of	DOJ	required	divestitures.

Remediation	(recoveries)	charges.	During	2009,	we	recovered	$(12.0)	million	of	insurance	proceeds	related	to	remediation	costs	at	our	Countywide	facility,	which	were	partially	offset	by	additional charges	of	$5.2	million	at	our	closed	disposal	facility	in	California.	Remediation	and	related	charges	of	$156.8	million	during	2008	were	attributable	to	changes	to	our	cost	estimates	at	our	Countywide facility,	our	closed	disposal	facility	in	California,	and	the	Sunrise	Landfill	in	Nevada.

Tax	effect	of	permanent	items	in	adjustments.	During	2008,	our	effective	tax	rate	was	impacted	by	several	expenses	associated	with	the	merger	that	were	not	tax	deductible.

In	addition	we	incurred	the	following	charges	for	the	year	ended	December	31,	2008:

•		Conforming	adjustments	for	accounting	policies.	During	2008,	we	recorded	bad	debt	expense	of	$14.2	million	related	to	conforming	Allied's	methodology	for	recording	the	allowance	for doubtful	accounts	for	accounts	receivable	with	our	methodology	and	$5.4	million	to	provide	for	specific	bankruptcy	exposures.

•		Legal	reserves.	During	2008,	we	incurred	$24.3	million	of	charges	related	to	our	estimates	of	the	outcome	of	various	legal	matters.

•		Landfill	amortization.	During	2008,	we	recorded	$2.8	million	of	incremental	landfill	amortization	expense	as	compared	to	the	amortization	expense	Allied	would	have	recorded	for	the same	period.

We	believe	that	the	presentation	of	adjusted	pre-tax	income,	adjusted	net	income	attributable	to	Republic	Services,	Inc.	and	adjusted	diluted	earnings	per	share,	which	are	not	measures	determined	in accordance	with	U.S.	GAAP,	provide	an	understanding	of	operational	activities	before	the	financial	impact	of	certain	items.	We	use	these	measures,	and	believe	investors	will	find	them	helpful,	in understanding	the	ongoing	performance	of	our	operations	separate	from	items	that	have	a	disproportionate	impact	on	our	results	for	a	particular	period.	Comparable	charges	and	costs	have	been	incurred in	prior	periods,	and	similar	types	of	adjustments	can	reasonably	be	expected	to	be	recorded	in	future	periods.	Our	definition	of	adjusted	pre-tax	income,	adjusted	net	income	attributable	to	Republic Services,	Inc.	and	adjusted	diluted	earnings	per	share	may	not	be	comparable	to	similarly	titled	measures	presented	by	other	companies.

These	gains	and	charges	affected	our	consolidated	statements	of	income	for	the	years	ended	December	31,	2009	and	2008,	as	follows	(in	millions):

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Expenses: |  |  |
| Cost\tof\toperations | $6.8 | $(153.9) |
| Selling,\tgeneral\tand\tadministrative | (41.8) | (4.8) |
| Gain\t(loss)\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | 137.0 | (89.8) |
| Restructuring\tcharges | (63.2) | (82.7) |
| Loss\ton\textinguishment\tof\tdebt | (134.1) | - |
| Other\tincome\t(expense),\tnet | - | (1.0) |
| Total\tcharges,\tnet | $\t\t(95.3) | $\t\t(332.2) |

# Revenue

We	generate	revenue	primarily	from	our	solid	waste	collection	operations.	Our	remaining	revenue	is	from	other	services	including	landfill	disposal	and	recycling.	Our	revenue	from	collection	operations consists	of	fees	we	receive	from	commercial,	industrial,	municipal	and	residential	customers.	Our	residential	and	commercial	collection	operations	in	some	markets	are	based	on	long-term	contracts	with municipalities.	Certain	of	our	municipal	contracts	have	annual	price	escalation	clauses	that	are	tied	to	changes	in	an	underlying	base	index	such	as	the	consumer	price	index.	We	generally	provide commercial	and	industrial	collection	services	to	individual	customers	under	contracts	with	terms	up	to	three	years.	Our	transfer	station,	landfill	and	to	a	lesser	extent	our	material	recovery	facilities generate	revenue	from	disposal	or	tipping	fees	charged	to	third	parties.	In	general,	we	integrate	our	recycling	operations	with	our	collection	operations	and	obtain	revenue	from	the	sale	of	recyclable materials.	Other	revenue	consists	primarily	of	revenue	from	sales	of	recycled	materials	and	revenue	from	national	accounts	acquired	from	Allied.	National	accounts	revenue	included	in	other	revenue represents	the	portion	of	revenue	generated	from	nationwide	contracts	in	markets	outside	our	operating	areas,	and,	as	such,	the	associated	waste	handling	services	are	subcontracted	to	local	operators. Consequently,	substantially	all	of	this	revenue	is	offset	with	related	subcontract	costs,	which	are	recorded	in	cost	of	operations.	No	one	customer	has	individually	accounted	for	more	than	5%	of	our consolidated	revenue	or	of	our	reportable	segment	revenue	in	any	of	the	periods	presented.

The	following	table	reflects	our	revenue	by	service	line	for	the	respective	years	ended	December	31	(in	millions):

The	following	table	summarizes	our	adjusted	revenue	for	the	years	ended	December	31,	2009	and	2008,	assuming	our	merger	with	Allied	occurred	on	January	1,	2008	(in	millions):

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Republic\tServices,\tInc. | $8,199.1 | $3,685.1 |
| Allied\tWaste\tIndustries,\tInc. | - | 5,677.1 |
|  | 8,199.1 | 9,362.2 |
| Less:\tDivestitures | (9.0) | (160.6) |
| Less:\tIntercompany\trevenue | - | (25.2) |
| Adjusted\trevenue | $\t\t8,190.1 | $\t\t9,176.4 |

Adjusted	revenue	is	used	to	calculate	internal	growth	for	the	year	ended	December	31,	2009.	Intercompany	revenue	relates	to	prior	year	transactions	between	Republic	and	Allied	that	would	have	been eliminated	if	the	companies	had	merged	on	January	1,	2008.

The	following	table	reflects	changes	in	our	core	adjusted	revenue	for	the	years	ended	December	31,	2009,	2008	and	2007.	We	have	presented	the	components	of	our	revenue	changes	for	the	year	ended December	31,	2009	assuming	our	merger	with	Allied	occurred	on	January	1,	2008:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Core\tprice | 3.0% | 4.4% | 4.4% |
| Fuel\tsurcharges | (2.5) | 1.8 | 0.2 |
| Commodities | (1.7) | 0.1 | 0.9 |
| Total\tprice | (1.2) | 6.3 | 5.5 |
| Core\tvolume | (9.5) | (3.8) | (1.6) |
| Total\tinternal\tgrowth | \t(10.7)% | \t\t\t\t\t2.5% | \t\t\t\t\t3.9% |

Certain	prior	year	amounts	have	been	reclassified	to	conform	to	the	current	year's	presentation.

We	believe	that	the	preceding	presentation	of	adjusted	revenue	and	changes	in	adjusted	revenue	provides	useful	information	to	investors	because	it	allows	investors	to	understand	increases	or	decreases	in our	revenue	that	are	driven	by	changes	in	the	operations	of	the	newly	combined	company	and	not	merely	by	the	addition	of	Allied's	revenues	for	periods	after	the	merger.	This	information	has	been prepared	for	illustrative	purposes	and	is	not	intended	to	be	indicative	of	the	revenue	that	would	have	been	realized	had	the	merger	been	consummated	at	the	beginning	of	the	periods	presented	or	the future	results	of	the	combined	operations.

•		Changes	in	core	price	increased	revenue	by	3.0%	and	4.4%	in	2009	and	2008,	respectively,	due	to	our	broad-based	pricing	initiative	which	we	started	during	the	fourth	quarter	of	2003.	We anticipate	that	we	will	continue	to	realize	this	benefit	throughout	2010.

•		Changes	in	fuel	surcharges	decreased	revenue	by	2.5%	in	2009	compared	to	an	increase	of	1.8%	in	2008.	Revenue	benefited	from	fuel	surcharges	resulting	from	high	fuel	costs	that	were passed	along	to	our	customers	during	2008.	The	decline	in	fuel	surcharges	in	2009	compared	to	2008	is	directly	attributable	to	a	decline	in	fuel	costs.

•		Changes	in	commodity	prices	decreased	revenue	by	1.7%	in	2009	compared	to	an	increase	of	0.1%	in	2008.	During	2009,	lower	market	demand	resulted	in	lower	pricing	for	the commodities	we	sell.

•		Changes	in	core	volume	decreased	revenue	by	9.5%	and	3.8%	in	2009	and	2008,	respectively.	During	2009,	we	experienced	negative	core	volume	growth	in	all	lines	of	business,	especially in	our	industrial	collection	and	landfill	businesses,	as	a	result	of	the	challenging	economic	environment.	We	expect	to	continue	to	experience	year-over-year	volume	declines	until	economic conditions	improve.

•		Changes	in	core	price	increased	revenue	by	4.4%	in	2008	and	2007,	respectively,	due	to	our	broad-based	pricing	initiative	which	we	started	during	the	fourth	quarter	of	2003.

•		Changes	in	fuel	surcharges	increased	revenue	by	1.8%	and	0.2%	in	2008	and	2007,	respectively.	Revenue	benefited	from	fuel	surcharges	due	to	high	fuel	costs	that	were	passed	along	to	our customers.	The	increase	in	fuel	surcharges	in	2008	compared	to	2007	is	directly	attributable	to	an	increase	in	fuel	costs.

•		Changes	in	commodity	prices	increased	revenue	by	0.1%	and	0.9%	in	2008	and	2007,	respectively.	The	decline	in	revenue	growth	is	primarily	due	to	a	decline	in	global	demand.

•		Changes	in	core	volume	decreased	revenue	by	3.8%	and	1.6%	in	2008	and	2007,	respectively,	due	to	decreases	across	all	lines	of	business	as	a	result	of	the	slowdown	in	the	economy	in 2008.

We	anticipate	internal	revenue	from	core	operations	to	decrease	approximately	0.5%	-	2.0%	during	2010.	This	decrease	consists	of	expected	growth	in	core	pricing	of	approximately	2.0%	-	2.5%	offset by	an	expected	decline	in	volume	of	approximately	3.0%	-	4.0%.	Our	projections	assume	no	deterioration	or	improvement	in	the	overall	economy	from	that	experienced	at	the	end	of	2009.	However,	our internal	growth	may	be	more	or	less	than	expected	in	2010	depending	on	economic	conditions	and	our	success	in	implementing	pricing	initiatives.

# Cost	of	Operations

Cost	of	operations	includes	labor	and	related	benefits,	which	consists	of	salaries	and	wages,	health	and	welfare	benefits,	incentive	compensation	and	payroll	taxes.	It	also	includes	transfer	and	disposal costs	representing	tipping	fees	paid	to	third	party	disposal	facilities	and	transfer	stations;	maintenance	and	repairs	relating	to	our	vehicles,	equipment	and	containers,	including	related	labor	and	benefit costs;	transportation	and	subcontractor	costs,	which	include	costs	for	independent	haulers	who	transport	our	waste	to	disposal	facilities	and	costs	for	local	operators	who	provide	waste	handling	services associated	with	our	national	accounts	in	markets	outside	our	standard	operating	areas;	fuel,	which	includes	the	direct	cost	of	fuel	used	by	our	vehicles,	net	of	fuel	credits;	disposal	franchise	fees	and	taxes consisting	of	landfill	taxes,	municipal	franchise	fees,	host	community	fees	and	royalties;	landfill	operating	costs,	which	includes	landfill	accretion,	financial	assurance,	leachate	disposal	and	other	landfill maintenance	costs;	risk	management,	which	includes	casualty	insurance	premiums	and	claims;	cost	of	goods	sold,	which	includes	material	costs	paid	to	suppliers	associated	with	recycling	commodities; and	other,	which	includes	expenses	such	as	facility	operating	costs,	equipment	rent	and	gains	or	losses	on	sale	of	assets	used	in	our	operations.

The	following	table	summarizes	the	major	components	of	our	cost	of	operations	for	the	years	ended	December	31,	2009,	2008	and	2007	(in	millions	of	dollars	and	as	a	percentage	of	our	revenue):

|  | 2009 | 2009 | 2008 | 2008 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Labor\tand\trelated\tbenefits | $1,561.0 | 19.0% | $707.0 | 19.2% | $620.0 | 19.5% |
| Transfer\tand\tdisposal\tcosts | 695.6 | 8.5 | 348.7 | 9.5 | 328.0 | 10.3 |
| Maintenance\tand\trepairs | 649.2 | 7.9 | 281.8 | 7.6 | 242.2 | 7.6 |
| Transportation\tand\tsubcontract\tcosts | 505.3 | 6.2 | 244.4 | 6.6 | 206.0 | 6.5 |
| Fuel | 349.8 | 4.3 | 235.3 | 6.4 | 180.3 | 5.7 |
| Franchise\tfees\tand\ttaxes | 403.7 | 4.9 | 139.0 | 3.8 | 105.8 | 3.3 |
| Landfill\toperating\tcosts | 117.8 | 1.4 | 190.5 | 5.2 | 75.6 | 2.4 |
| Risk\tmanagement | 205.9 | 2.5 | 111.8 | 3.0 | 91.9 | 2.9 |
| Cost\tof\tgoods\tsold | 60.2 | 0.8 | 50.3 | 1.4 | 59.8 | 1.9 |
| Other | 295.7 | 3.6 | 107.9 | 2.9 | 94.3 | 3.0 |
| Total\tcost\tof\toperations | $\t\t4,844.2 | \t\t59.1% | $\t\t2,416.7 | \t\t65.6% | $\t\t2,003.9 | \t\t63.1% |

The	cost	categories	shown	above	may	change	from	time	to	time	and	may	not	be	comparable	to	similarly	titled	categories	used	by	other	companies.	As	such,	care	should	be	taken	when	comparing	our	cost of	operations	by	cost	component	to	that	of	other	companies.

Our	cost	of	operations,	as	a	percentage	of	revenue,	improved	6.5%	to	59.1%	for	the	year	ended	December	31,	2009	compared	to	65.6%	for	the	year	ended	December	31,	2008,	primarily	as	a	result	of	the following:

•		Transfer	and	disposal	costs	decreased	as	a	percentage	of	revenue	primarily	due	to	lower	fuel	and	disposal	costs.	In	addition,	transfer	and	disposal	costs	were	also	favorably	impacted	by increased	internalization	of	our	waste	streams	into	landfills	either	owned	or	operated	by	us.

•		Fuel	costs	decreased	approximately	35%	from	an	average	of	$3.80	per	gallon	during	2008	to	an	average	of	$2.47	per	gallon	during	2009.

•		Landfill	operating	costs	decreased	3.8%	as	a	percentage	of	revenue,	primarily	due	to	charges	we	recorded	during	2008	consisting	of	$98.0	million	related	to	estimated	costs	to	comply	with F&Os	issued	by	the	OEPA	and	the	AOC	issued	by	the	EPA	in	response	to	environmental	conditions	at	our	Countywide	facility,	$21.9	million	related	to	environmental	conditions	at	our closed	disposal	facility	in	California	and	$34.0	million	related	to	environmental	conditions	at	the	Sunrise	Landfill.	These	charges	increased	our	2008	cost	of	operations	as	a	percentage	of revenue	by	4.2%	for	the	year	ended	December	31,	2008.

•		Other	cost	of	operations	increased	0.7%	as	a	percentage	of	revenue	primarily	due	to	increases	in	occupancy	and	facility	expenses	as	well	as	equipment	rental	expense.

Our	cost	of	operations,	as	a	percentage	of	revenue,	increased	2.5%	to	65.6%	for	the	year	ended	December	31,	2008	compared	to	63.1%	for	the	year	ended	December	31,	2007,	primarily	as	a	result	of	the following:

•		Labor	and	related	benefits	as	a	percentage	of	revenue	for	the	year	ended	December	31,	2008	versus	2007	decreased	due	to	higher	revenue	resulting	from	improved	pricing	and	lower	labor costs	associated	with	volume	decreases	in	various	lines	of	business.

•		Fuel	costs	increased	0.7%	as	a	percentage	of	revenue	during	the	year	ended	December	31,	2008	versus	the	year	ended	December	31,	2007.	Our	average	cost	of	fuel	per	gallon	increased approximately	38%	from	$2.76	per	gallon	during	2007	to	$3.80	per	gallon	during	2008.

•		Landfill	operating	costs	increased	as	a	percentage	of	revenue	for	the	year	ended	December	31,	2008	versus	2007,	primarily	due	to	charges	we	recorded	during	2008	consisting	of $98.0	million	related	to	our	Countywide	facility,	$21.9	million	related	to	our	closed	disposal	facility	in	California	and	$34.0	million	charge	related	to	the	Sunrise	Landfill.	This	increase	was partially	offset	by	a	$41.0	million	charge	related	to	our	Countywide	facility	and	an	$8.1	million	charge	related	to	our	closed	disposal	facility	in	California	recorded	during	2007.

# Depreciation,	Amortization	and	Depletion	of	Property	and	Equipment

The	following	table	summarizes	depreciation,	amortization	and	depletion	of	property	and	equipment	for	the	years	ended	December	31,	2009,	2008	and	2007	(in	millions	of	dollars	and	as	a	percentage	of revenue):

| revenue): |  |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2009 | 2009 | 2008 | 2008 | 2007 | 2007 |
| Depreciation\tand\tamortization\tof\tproperty\tand\tequipment | $520.6 | 6.3% | $222.6 | 6.0% | $188.9 | 5.9% |
| Landfill\tdepletion\tand\tamortization | 278.5 | 3.4 | 119.7 | 3.3 | 110.1 | 3.5 |
| Depreciation,\tamortization\tand\tdepletion\texpense | $\t\t799.1 | \t\t9.7% | $\t\t342.3 | \t\t9.3% | $\t\t299.0 | \t\t9.4% |

Depreciation,	amortization	and	depletion	expenses	for	property	and	equipment	were	$799.1	million,	$342.3	million	and	$299.0	million,	or,	as	a	percentage	of	revenue,	9.7%,	9.3%	and	9.4%,	for	the	years ended	December	31,	2009,	2008	and	2007,	respectively.	The	increase	in	such	expenses	in	aggregate	dollars	for	the	years	ended	December	31,	2009	and	2008	versus	2007	is	primarily	due	to	our acquisition	of	Allied	in	December	2008.

# Depreciation,	Amortization	and	Depletion	of	Property	and	Equipment	–	2009	versus	2008

The	increase	in	depreciation,	amortization	and	depletion	expenses	as	a	percentage	of	revenue	is	primarily	due	to	increases	in	depreciation	and	depletion	expense	associated	with	equipment	and	landfills acquired	from	Allied	and	recorded	at	their	current	fair	values.	We	allocated	$2.6	billion	of	fair	value	to	the	landfills	we	acquired	from	Allied.	The	increase	in	the	landfill	depletion	and	amortization	in aggregate	dollars	is	directly	attributable	to	this	allocation	of	fair	value.

The	decrease	in	such	expenses	as	a	percentage	of	revenue	for	the	year	ended	December	31,	2008	versus	2007	is	primarily	due	to	a	reduction	of	amortization	expense	associated	with	lower	landfill volumes.	In	addition,	during	the	year	ended	December	31,	2007,	we	incurred	approximately	$3.3	million	of	additional	depletion	and	amortization	expense	associated	with	a	reduction	of	estimated remaining	available	airspace	at	our	Countywide	facility.

# Amortization	of	Intangible	and	Other	Assets

Expenses	for	amortization	of	intangible	and	other	assets	were	$70.6	million,	$11.8	million	and	$6.5	million,	or,	as	a	percentage	of	revenue,	0.9%,	0.3%	and	0.2%	for	the	years	ended	December	31,	2009, 2008	and	2007,	respectively.	Our	other	intangible	and	other	assets	primarily	relate	to	customer	lists,	franchise	agreements,	municipal	contracts,	trade	names,	favorable	lease	assets	and	to	a	lesser	extent non-compete	agreements.	The	increase	in	such	expenses	in	aggregate	dollars	and	as	a	percentage	of	revenue	for	the	year	ended	December	31,	2009	and	2008	versus	2007	is	due	to	the	amortization	of intangible	assets	recorded	as	a	result	of	our	acquisition	of	Allied.

# Accretion	Expense

expenses	in	aggregate	dollars	in	2009	and	2008	versus	2007	is	primarily	due	to	an	increase	in	asset	retirement	obligations	associated	with	our	acquisition	of	Allied.	The	asset	retirement	obligations acquired	from	Allied	are	recorded	using	a	discount	rate	of	9.75%,	which	is	higher	than	the	credit-adjusted,	risk-free	rate	we	have	used	historically	to	record	such	obligations.

# Selling,	General	and	Administrative	Expenses

Selling,	general	and	administrative	expenses	include	salaries,	health	and	welfare	benefits	and	incentive	compensation	for	corporate	and	field	general	management,	field	support	functions,	sales	force, accounting	and	finance,	legal,	management	information	systems	and	clerical	and	administrative	departments.	Other	expenses	include	rent	and	office	costs,	fees	for	professional	services	provided	by	third parties,	marketing,	investor	and	community	relations,	directors'	and	officers'	insurance,	general	employee	relocation,	travel,	entertainment	and	bank	charges,	but	excludes	any	such	amounts	recorded	as restructuring	charges.

The	following	table	provides	the	components	of	our	selling,	general	and	administrative	costs	for	the	three	years	ended	December	31,	2009,	2008	and	2007	(in	millions	of	dollars	and	as	a	percentage	of revenue):

|  | 2009 | 2009 | 2008 | 2008 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Salaries | $548.1 | 6.7% | $237.6 | 6.4% | $206.3 | 6.5% |
| Provision\tfor\tdoubtful\taccounts | 27.3 | 0.3 | 36.5 | 1.0 | 3.9 | 0.1 |
| Costs\tto\tachieve\tsynergies | 41.6 | 0.5 | 2.9 | 0.1 | - | - |
| Other | 263.4 | 3.2 | 157.7 | 4.3 | 103.5 | 3.3 |
| Total\tselling,\tgeneral\tand\tadministrative\texpenses | $\t\t880.4 | \t\t10.7% | $\t\t434.7 | \t\t11.8% | $\t\t313.7 | \t\t9.9% |

The	cost	categories	shown	above	may	change	from	time	to	time	and	may	not	be	comparable	to	similarly	titled	categories	used	by	other	companies.	As	such,	care	should	be	taken	when	comparing	our selling,	general	and	administrative	expenses	by	cost	component	to	that	of	other	companies.

# Selling,	General	and	Administrative	Expenses	–	2009	versus	2008

Selling,	general	and	administrative	expenses	in	2009	include	$41.6	million	of	costs	to	achieve	synergies	related	to	the	Allied	merger.	These	costs	primarily	consist	of	a	synergy	related	bonus	of approximately	$34	million	accrued	in	2009.	We	expect	to	incur	an	additional	$34.0	million	of	expense	during	2010	to	fully	accrue	for	the	synergy	related	bonus.

For	the	year	ended	December	31,	2008,	we	recorded	$14.2	million	of	bad	debt	expense	related	to	conforming	Allied's	methodology	for	recording	the	allowance	for	doubtful	accounts	on	accounts receivable	with	ours	and	$5.4	million	to	provide	for	specific	bankruptcy	exposures.	We	also	recorded	$24.3	million	of	settlement	charges	related	to	our	estimates	of	the	outcome	of	various	legal	matters and	a	charge	of	$2.9	million	related	to	the	synergy	related	bonus.

Excluding	charges	for	synergies,	conforming	accounting	policies,	bankruptcies	and	certain	legal	matters,	selling,	general	and	administrative	expenses	for	the	years	ended	December	31,	2009	and	2008 would	have	been	$838.8	million	and	$387.9	million,	or	10.2%	and	10.5%	as	a	percentage	of	revenue,	respectively.	Upon	the	completion	of	the	integration	of	Allied,	our	goal	is	to	maintain	our	selling, general	and	administrative	costs	at	no	more	than	10.0%	of	revenue,	which	we	believe	is	appropriate	given	our	existing	business	platform.

The	increase	in	selling,	general	and	administrative	expenses	(excluding	the	costs	mentioned	above)	in	aggregate	dollars	during	2008	versus	2007	is	primarily	due	to	our	merger	with	Allied.	The	increase in	such

expenses	as	a	percentage	of	revenue	for	2008	versus	2007	is	primarily	due	to	our	merger	with	Allied	and	a	$4.3	million	reduction	in	our	allowance	for	doubtful	accounts	which	we	recorded	during	the year	ended	December	31,	2007	as	a	result	of	refining	our	estimate	for	our	allowance	based	on	our	historical	collection	experience.

# (Gain)	Loss	on	Disposition	of	Assets	and	Impairments,	Net

(Gain)	loss	on	disposition	of	assets	and	impairments,	net	of	costs	to	sell	was	$(137.0)	million	and	$89.8	million	for	the	years	ended	December	31,	2009	and	2008,	respectively,	and	nil	for	the	year	ended December	31,	2007.

During	the	year	ended	December	31,	2009,	we	divested	of	certain	assets	as	required	by	the	DOJ	as	a	condition	of	the	merger	with	Allied	and	recorded	a	gain	of	$153.5	million.	Offsetting	this	gain	was	a loss	of	$10.2	million	recognized	in	connection	with	the	divestiture	of	a	hauling	operation	in	Miami-Dade	County,	Florida	as	well	as	$7.1	million	of	additional	asset	impairments,	primarily	related	to	our former	corporate	offices	and	other	assets	sold	or	held	for	sale.

During	the	year	ended	December	31,	2008,	we	recorded	a	charge	of	$75.9	million	related	to	the	impairment	of	our	Countywide	facility.	This	impairment	relates	to	the	anticipated	loss	of	permitted airspace	associated	with	complying	with	F&Os	issued	by	the	OEPA	and	the	AOC	issued	by	the	EPA	based	upon	recent	negotiations	with	the	OEPA	and	the	EPA.	Also	during	the	year	ended December	31,	2008,	we	recorded	$7.8	million	of	other	impairment	charges,	consisting	primarily	of	charges	related	to	our	former	corporate	office	in	South	Florida.

# Restructuring	Charges

As	a	result	of	our	acquisition	of	Allied,	we	committed	to	a	restructuring	plan	related	to	our	corporate	overhead	and	other	administrative	and	operating	functions.	The	plan	included	closing	our	corporate office	in	Florida,	consolidating	administrative	functions	to	Arizona,	the	former	headquarters	of	Allied,	and	reducing	staffing	levels.	The	plan	also	included	closing	and	consolidating	certain	operating locations	and	terminating	certain	leases.	During	the	year	ended	December	31,	2009,	we	incurred	$63.2	million	of	restructuring	and	integration	charges	related	to	our	integration	of	Allied,	of	which $34.0	million	consists	of	charges	for	severance	and	other	employee	termination	and	relocation	benefits.	The	remainder	of	the	charges	primarily	related	to	consulting	and	professional	fees.	Substantially, all	the	charges	are	recorded	in	our	corporate	segment.	During	2010,	we	expect	to	incur	additional	charges	approximating	$12	million	to	complete	our	plan.	We	expect	that	the	majority	of	these	charges will	be	paid	during	2010	and	will	extend	into	2011.

# Interest	Expense

Interest	expense	was	$595.9	million,	$131.9	million	and	$94.8	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	The	following	table	provides	the	components	of	interest expense,	including	accretion	of	debt	discounts	and	accretion	of	discounts	primarily	associated	with	environmental	and	self-funded	risk	insurance	liabilities	assumed	in	the	acquisition	of	Allied:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | $453.5 | $123.9 | $97.8 |
| Accretion\tof\tdebt\tdiscounts | 92.1 | 10.1 | - |
| Accretion\tof\tremediation\tand\trisk\treserves | 58.1 | 0.5 | - |
| Less:\tcapitalized\tinterest | (7.8) | (2.6) | (3.0) |
| Total\tinterest\texpense | $\t\t595.9 | $\t\t131.9 | $\t\t94.8 |

The	increase	in	interest	expense	during	the	year	ended	December	31,	2009	versus	2008	is	primarily	due	to	the	additional	debt	we	assumed	as	a	result	of	our	acquisition	of	Allied.	Interest	expense	also increased	as	a	result	of	accreting	discounts	applied	to	debt	or	imputing	interest	on	environmental	and	risk	reserves	assumed	from	Allied.

# Loss	on	Extinguishment	of	Debt

Loss	on	early	extinguishment	of	debt	was	$134.1	million	for	the	year	ended	December	31,	2009,	resulting	from	the	following:

•		In	September	2009,	we	issued	$650.0	million	of	5.500%	Senior	Notes	due	2019	with	an	unamortized	discount	of	$4.5	million	at	December	31,	2009.	A	portion	of	the	net	proceeds	from these	notes	was	used	to	purchase	and	retire	$325.5	million	of	our	outstanding	senior	notes	maturing	in	2010	and	2011.

•		In	addition,	during	2009	we	repurchased	and	retired	certain	of	our	senior	notes	in	the	secondary	market.

The	loss	on	extinguishment	of	debt	recorded	during	2009	consists	of	premiums	paid	to	repurchase	debt,	the	charge	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase. In	the	future	we	may	chose	to	voluntarily	retire	certain	portions	of	our	outstanding	debt	before	their	maturity	using	cash	from	operations	or	additional	borrowings.	We	may	also	explore	opportunities	in capital	markets	to	fund	redemptions.	The	early	extinguishment	of	debt	may	result	in	an	impairment	charge	in	the	period	in	which	the	debt	is	repurchased	and	retired.

# Interest	Income	and	Other	Income	(Expense),	Net

# Income	Taxes

Our	provision	for	income	taxes	was	$368.5	million,	$85.4	million	and	$177.9	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	Our	effective	income	tax	rate	was	42.6%, 53.6%	and	38.0%	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	Our	effective	income	tax	rate	is	adversely	impacted	by	expenses	incurred	which	are	non-deductible	for	tax,

disposition	of	assets	that	have	little	or	no	basis	for	tax,	and	accruals	for	penalties	and	interest	on	uncertain	tax	positions.

In	the	future	we	may	choose	to	divest	certain	operating	assets	that	have	little	or	no	tax	basis,	thereby	resulting	in	a	higher	taxable	gain	than	otherwise	would	be	recognized.	The	higher	taxable	gain	will increase	our	effective	rate	in	the	quarter	in	which	the	divestiture	is	consummated.

With	respect	to	the	settlement	of	certain	tax	liabilities	regarding	our	risk	management	companies,	we	paid	approximately	$58	million	in	the	first	quarter	of	2010	and	anticipate	paying	the	remainder, approximately	$67	million,	later	in	2010.

During	the	year	ended	December	31,	2008,	we	incurred	expenses	that	were	not	tax	deductible	as	a	result	of	the	merger	with	Allied.	In	addition,	lower	pre-tax	earnings	contributed	to	the	increase	in	our effective	tax	rate.

During	the	year	ended	December	31,	2007,	we	recorded	a	net	tax	benefit	of	$4.8	million	in	our	provision	for	income	taxes	related	to	the	resolution	of	various	income	tax	matters,	including	the	effective completion	of	Internal	Revenue	Service	audits	of	our	consolidated	tax	returns	for	fiscal	years	2001	through	2004.

# Reportable	Segments

Our	operations	are	managed	and	reviewed	through	four	geographic	regions	that	we	designate	as	our	reportable	segments.	Summarized	financial	information	concerning	our	reportable	segments	for	the years	ended

December	31,	2009,	2008	and	2007	is	shown	in	the	following	table	(in	millions	of	dollars	and	as	a	percentage	of	revenue):

|  | Net<br>Revenue | Amortization,<br>Depletion	and<br>Accretion	Before<br>Adjustments	for<br>Asset	Retirement<br>Obligations | Adjustments	to<br>Amortization<br>Expense<br>for	Asset<br>Retirement<br>Obligations | Depreciation,<br>Amortization,<br>Depletion	and<br>Accretion | Gain	(Loss)	on<br>Disposition	of<br>Assets,	Net<br>and	Asset<br>Impairment | Operating<br>Income<br>(Loss) | Operating<br>Margin |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2009: |  |  |  |  |  |  |  |
| Eastern | $2,115.0 | $215.5 | $(1.2) | $214.3 | $4.0 | $483.0 | 22.8% |
| Midwest | 1,777.0 | 227.3 | (1.4) | 225.9 | 27.1 | 369.1 | 20.8 |
| Southern | 2,046.2 | 241.9 | (8.8) | 233.1 | 29.8 | 522.9 | 25.6 |
| Western | 2,170.0 | 228.5 | 6.4 | 234.9 | 88.1 | 582.0 | 26.8 |
| Corporate\tentities | 90.9 | 50.4 | (0.1) | 50.3 | (12.0) | (367.2) | - |
| Total | $\t8,199.1 | $\t963.6 | $\t(5.1) | $\t958.5 | $\t137.0 | $\t1,589.8 | \t19.4 |
| 2008: |  |  |  |  |  |  |  |
| Eastern | $989.9 | $89.6 | $5.5 | $95.1 | $(82.0) | $(2.5) | (0.3)% |
| Midwest | 771.7 | 97.7 | (0.9) | 96.8 | (0.8) | 127.6 | 16.5 |
| Southern | 970.2 | 94.3 | 0.5 | 94.8 | - | 184.8 | 19.0 |
| Western | 942.6 | 84.7 | (5.0) | 79.7 | (1.2) | 154.9 | 16.4 |
| Corporate\tentities | 10.7 | 11.1 | 0.5 | 11.6 | (5.8) | (181.6) | - |
| Total | $3,685.1 | $377.4 | $0.6 | $378.0 | $(89.8) | $283.2 | 7.7 |
| 2007: |  |  |  |  |  |  |  |
| Eastern | $865.6 | $77.8 | $(0.4) | $77.4 | $- | $149.7 | 17.3% |
| Midwest | 647.5 | 88.0 | (5.0) | 83.0 | - | 118.9 | 18.4 |
| Southern | 848.9 | 76.6 | 0.8 | 77.4 | - | 155.9 | 18.4 |
| Western | 813.5 | 69.7 | 7.9 | 77.6 | - | 175.6 | 21.6 |
| Corporate\tentities | 0.7 | 7.2 | - | 7.2 | - | (64.1) | - |
| Total | $\t\t3,176.2 | $\t\t\t\t\t\t319.3 | $\t\t\t\t\t\t\t3.3 | $\t\t\t\t\t322.6 | $\t\t\t\t\t- | $\t\t\t\t\t536.0 | 16.9 |

Corporate	entities	include	legal,	tax,	treasury,	information	technology,	risk	management,	human	resources,	corporate	accounts	and	other	typical	administrative	functions.	National	accounts	revenue included	in	corporate	entities	represents	the	portion	of	revenue	generated	from	nationwide	contracts	in	markets	outside	our	operating	areas,	and,	as	such,	the	associated	waste	handling	services	are subcontracted	to	local	operators.	Consequently,	substantially	all	of	this	revenue	is	offset	with	related	subcontract	costs,	which	are	recorded	in	cost	of	operations.

We	completed	the	reorganization	of	our	operating	segments	related	to	our	acquisition	of	Allied	in	the	first	quarter	of	2009,	and	are	providing	internal	and	external	reporting	in	accordance	with	our reorganized	structure.	Significant	changes	in	the	revenue	and	operating	margins	of	our	reportable	segments	comparing	2009	with	2008	and	comparing	2008	with	2007	are	discussed	in	the	following paragraphs.	The	increase	in	aggregate	dollars	for	revenue,	depreciation,	amortization,	depletion	and	accretion,	and	operating	income	(loss)	for	each	of	our	reportable	segments	is	due	to	our	acquisition	of Allied.	The	results	of	our	reportable	segments	were	also	affected	by	the	disposition	of	certain	assets	and	liabilities,	as	required	by	the	DOJ.	Where	the	effect	was	significant,	we	have	noted	our	operating margin	exclusive	of	these	gains	and	losses.	Additionally,	the	decrease	in	revenue	resulting	from	declines	in	volumes	and	commodity	prices	noted	below	are	attributable	to	the	economic	slowdown.

•		Eastern	Region.	Revenue	for	the	year	ended	December	31,	2009	benefited	from	core	price	growth	in	all	lines	of	business.	However,	the	increase	in	revenue	from	core	price	was	more	than	offset	by volume

declines	in	all	lines	of	business,	especially	in	our	industrial	and	landfill	lines	of	business.	We	also	experienced	declines	in	fuel	surcharges.

In	2009,	we	realized	a	$4.0	million	net	gain	from	the	disposition	of	assets,	which	increased	operating	margins	by	0.2%.	We	also	recovered	$12.0	million	of	insurance	proceeds	related	to	remediation costs	at	our	Countywide	facility	in	Ohio,	which	increased	operating	margins	by	0.6%.

In	2008,	we	incurred	a	$99.9	million	charge	for	environmental	conditions	at	our	Countywide	facility,	which	reduced	our	operating	margin	for	the	year	ended	December	31,	2008	by	10.1%.	We incurred	a	$75.9	million	charge	related	to	the	anticipated	loss	of	permitted	airspace	at	Countywide	based	upon	negotiations	with	the	OEPA	and	EPA,	which	reduced	our	operating	margin	by	7.7%. We	also	incurred	$11.0	million	in	legal	settlement	costs,	which	decreased	operating	margins	by	1.1%.

The	remaining	increase	in	operating	margins	is	attributed	to	lower	fuel,	disposal,	and	selling,	general	and	administrative	expenses,	partially	offset	by	higher	depreciation	and	amortization	costs resulting	from	assets	acquired	from	Allied	and	higher	labor	and	facilities	expense.

•		Midwest	Region.	Revenue	for	the	year	ended	December	31,	2009	benefited	from	core	price	growth	in	all	lines	of	business.	However,	the	increase	in	revenue	from	core	price	was	more	than	offset by	volume	declines	in	all	lines	of	business,	especially	in	our	industrial	and	landfill	lines	of	business.	We	also	experienced	declines	in	fuel	surcharges.

In	2009,	we	realized	net	gains	from	the	disposition	of	assets	of	$27.1	million,	which	increased	operating	margins	by	1.5%.	Otherwise,	the	improvement	in	operating	margin	for	the	year	ended December	31,	2009	is	primarily	due	to	lower	transportation,	fuel,	and	selling,	general	and	administrative	expenses.	The	increase	in	operating	margin	was	partially	offset	by	increased	depreciation and	amortization	expense	resulting	from	assets	acquired	from	Allied	and	higher	facilities	expense.

•		Southern	Region.	Revenue	for	the	year	ended	December	31,	2009	benefited	from	core	price	growth	in	all	lines	of	business.	However,	the	increase	in	revenue	from	core	price	was	more	than	offset by	volume	declines	in	all	lines	of	business,	especially	in	our	industrial	and	landfill	lines	of	business.	We	also	experienced	declines	in	fuel	surcharges.

For	the	year	ended	December	31,	2009,	we	realized	net	gains	from	the	disposition	of	assets	of	$29.8	million,	which	impacted	operating	margins	by	1.5%.	We	also	realized	in	2009	an	$8.8	million favorable	adjustment	to	amortization	expense	for	asset	retirement	obligations	which	increased	our	operating	margin	by	0.4%.	Otherwise	the	improvement	in	operating	margin	for	the	year	ended December	31,	2009,	is	primarily	due	to	lower	disposal,	transport	and	fuel	costs,	partially	offset	by	increased	depreciation	and	amortization	expense	resulting	from	assets	acquired	from	Allied	and higher	facilities	expense.

•		Western	Region.	Revenue	for	the	year	ended	December	31,	2009	benefited	from	core	price	growth	in	all	lines	of	business.	However,	the	increase	in	revenue	from	core	price	was	more	than	offset by	volume	declines	in	all	lines	of	business,	especially	in	our	industrial	and	landfill	lines	of	business.	We	also	experienced	declines	in	fuel	surcharges.

For	the	year	ended	December	31,	2009,	we	realized	gains	from	the	disposition	of	assets	of	$88.1	million,	which	increased	operating	margins	by	4.1%.	Partially	offsetting	these	gains	was	an unfavorable	adjustment	to	amortization	expense	for	asset	retirement	obligations	of	$6.4	million,	reducing	operating	margin	by	0.3%,	and	remediation	charges	totaling	$5.2	million,	reducing operating	margin	by	0.3%	related	to	environmental	conditions	at	our	closed	disposal	facility	in	California.	In	addition,	lower	landfill	revenue	(which	has	higher	margins	than	our	collection	line	of business)	negatively	impacted	2009	margins.

In	the	second	quarter	of	2008,	we	incurred	a	$34.0	million	charge	at	the	Sunrise	Landfill	and	a	$21.9	million	charge	at	our	closed	disposal	facility	in	California	for	environmental	conditions	at	each of	these	locations.	The	charges	reduced	operating	margin	by	5.9%.	Margins	were	favorably	impacted	by	lower	labor,	fuel,	transportation	and	selling,	general	and	administrative	expenses,	offset	by increased	depreciation	and	amortization	expense	resulting	from	assets	acquired	from	Allied	and	higher	facilities	expense.

•		Corporate	Entities.	The	increase	in	net	revenue	relates	to	Allied's	national	accounts	program.	The	increase	in	depreciation,	amortization,	depletion	and	accretion	expense,	and	the	increase	in	the operating	loss	are	attributable	to	the	acquisition	of	Allied.	Included	in	our	gain	(loss)	on	disposition	of	assets	and	impairments,	net	for	the	year	ended	December	31,	2009	are	transaction	related expenses	of	$8.2	million	from	the	disposition	of	assets	in	the	other	segments	and	a	$3.7	million	charge	for	the	asset	impairment	associated	with	our	former	corporate	office	in	Florida.

•		Eastern	Region.	Revenue	in	our	Eastern	Region	increased	during	2008	compared	to	2007	due	to	the	addition	of	operating	results	for	Allied	from	the	date	of	the	acquisition	which	was	effective December	5,	2008.	The	increase	in	revenue	is	also	due	to	price	increases	in	all	lines	of	business.	This	increase	in	revenue	was	partially	offset	by	a	decrease	in	volumes	in	all	lines	of	business	and	a decrease	in	the	prices	of	commodities.	The	decrease	in	volume	is	primarily	attributable	to	less	temporary	work	and	lower	transfer	station	volumes	due	to	less	construction	activity.

The	operating	loss	in	2008	includes	remediation	charges	of	$99.9	million	related	to	estimated	costs	to	comply	with	the	F&Os	issued	by	the	OEPA	and	the	AOC	issued	by	the	EPA	related	to	our Countywide	facility	and	an	impairment	charge	of	$75.9	million	related	to	the	anticipated	loss	of	permitted	airspace	at	Countywide	based	upon	negotiations	with	the	OEPA	and	EPA.	It	also	includes $11.0	million	of	settlement	costs	for	certain	legal	matters.

Operating	income	for	2007	includes	a	$44.6	million	charge	to	operating	expenses	associated	with	environmental	conditions	at	Countywide.

•		Midwest	Region.	Revenue	increased	during	2008	compared	to	2007	due	to	the	acquisition	of	Allied	and	price	increases	in	all	lines	of	business.	This	increase	in	revenue	was	partially	offset	by	lower volumes	in	all	lines	of	business	and	lower	prices	of	commodities	due	to	the	economic	slowdown.

Operating	margins	decreased	during	2008	compared	to	2007	due	to	an	adjustment	to	amortization	expense	for	asset	retirement	obligations	during	2007	and	due	to	higher	fuel	costs.

•		Southern	Region.	The	acquisition	of	Allied	and	price	increases	in	all	lines	of	business	resulted	in	an	increase	in	revenue	during	2008	compared	to	2007.	This	increase	in	revenue	was	partially	offset by	volume	declines	in	our	industrial	collection	line	of	business	and	at	our	landfills.	This	increase	in	revenue	was	also	partially	offset	by	the	sale	of	our	Texas-based	compost,	mulch	and	soil business	in	November	2007.

Operating	margins	increased	during	2008	compared	to	2007	due	to	higher	revenue,	lower	disposal	costs	and	lower	insurance	costs,	partially	offset	by	higher	fuel	costs.

•		Western	Region.	The	acquisition	of	Allied	and	price	increases	in	all	lines	of	business	resulted	in	an	increase	in	revenue	during	2008	compared	to	2007.	This	increase	in	revenue	was	partially	offset by	a	decrease	in	industrial	collection,	commercial	collection,	transfer	station	and	landfill	volumes	resulting	from	the	economic	slowdown.	This	increase	in	revenue	was	also	partially	offset	by	lower prices	of	commodities.

Operating	income	in	2008	includes	a	$34.0	million	charge	related	to	estimated	costs	to	comply	with	a	Consent	Decree	and	Settlement	Agreement	signed	with	the	EPA,	the	Bureau	of	Land Management	and	Clark	County,	Nevada	related	to	the	Sunrise	Landfill.	It	also	includes	a	$21.9	million	charge	recorded	during	2008	associated	with	environmental	conditions	at	our	closed	disposal facility	in	California.

Operating	income	in	2007	includes	an	$8.1	million	increase	in	landfill	operating	costs	and	a	$5.2	million	increase	in	amortization	expense	for	asset	retirement	obligations	associated	with environmental	conditions	at	our	closed	disposal	facility	in	California.

•		Corporate	Entities.	The	increase	in	operating	costs	includes	professional	fees,	distributions	under	cash	and	equity	award	programs,	and	relocation,	severance	and	other	employee	termination benefits	related	to	our	merger	with	Allied.	Included	in	our	gain	(loss)	on	disposition	of	assets	and	impairments,	net	for	the	year

ended	December	31,	2008	is	a	$6.0	million	charge	for	the	asset	impairment	associated	with	our	former	corporate	office	in	Florida.

# Landfill	and	Environmental	Matters

Our	landfill	costs	include	daily	operating	expenses,	costs	of	capital	for	cell	development,	costs	for	final	capping,	closure	and	post-closure,	and	the	legal	and	administrative	costs	of	ongoing	environmental compliance.	Daily	operating	expenses	include	leachate	treatment	and	disposal,	methane	gas	and	groundwater	monitoring	and	system	maintenance,	interim	cap	maintenance,	and	costs	associated	with	the application	of	daily	cover	materials.	We	expense	all	indirect	landfill	development	costs	as	they	are	incurred.	We	use	life	cycle	accounting	and	the	units-of-consumption	method	to	recognize	certain	direct landfill	costs	related	to	landfill	development.	In	life	cycle	accounting,	certain	direct	costs	are	capitalized	and	charged	to	depletion	expense	based	on	the	consumption	of	cubic	yards	of	available	airspace. These	costs	include	all	costs	to	acquire	and	construct	a	site,	including	excavation,	natural	and	synthetic	liners,	construction	of	leachate	collection	systems,	installation	of	methane	gas	collection	and monitoring	systems,	installation	of	groundwater	monitoring	wells,	and	other	costs	associated	with	the	acquisition	and	development	of	the	site.	Obligations	associated	with	final	capping,	closure	and	post- closure	are	capitalized	and	amortized	on	a	units-of-consumption	basis	as	airspace	is	consumed.

Cost	and	airspace	estimates	are	developed	at	least	annually	by	engineers.	These	estimates	are	used	by	our	operating	and	accounting	personnel	to	adjust	the	rates	we	use	to	expense	capitalized	costs. Changes	in	these	estimates	primarily	relate	to	changes	in	costs,	available	airspace,	inflation	and	applicable	regulations.	Changes	in	available	airspace	include	changes	in	engineering	estimates,	changes	in design	and	changes	due	to	the	addition	of	airspace	lying	in	expansion	areas	that	we	believe	have	a	probable	likelihood	of	being	permitted.

# Available	Airspace

The	following	tables	reflect	landfill	airspace	activity	for	active	landfills	owned	or	operated	by	us	for	the	years	ended	December	31,	2009,	2008	and	2007:

|  | Balance<br>as	of<br>December	31,<br>2008 | New<br>Expansions<br>Undertaken | Landfills<br>Acquired,<br>Net	of<br>Divestitures | Permits<br>Granted,<br>Net	of<br>Closures | Airspace<br>Consumed | Changes<br>in<br>Engineering<br>Estimates | Balance<br>as	of<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Cubic\tyards\t(in\tmillions): |  |  |  |  |  |  |  |
| Permitted\tairspace | 4,559.6 | 249.0 | (176.8) | (114.8) | (86.9) | 6.3 | 4,436.4 |
| Probable\texpansion\tairspace | 386.2 | (106.1) | (62.2) | (4.7) | - | (0.7) | 212.5 |
| Total\tcubic\tyards | 4,945.8 | 142.9 | (239.0) | (119.5) | (86.9) | 5.6 | 4,648.9 |
| Number\tof\tsites:\nPermitted\tairspace | 213 |  | (9) | (12) |  |  | 192 |
| Probable\texpansion\tairspace | 23 | (9) | (1) | (1) |  |  | 12 |

Changes	in	engineering	estimates	typically	include	modifications	to	the	available	disposal	capacity	of	a	landfill	based	on	a	refinement	of	the	capacity	calculations	resulting	from	updated	information. Changes	in	design	typically	include	significant	modifications	to	a	landfill's	footprint	or	vertical	slopes.

As	of	December	31,	2009,	we	owned	or	operated	192	active	solid	waste	landfills	with	total	available	disposal	capacity	estimated	to	be	4.6	billion	in-place	cubic	yards.	Total	available	disposal	capacity represents	the	sum	of	estimated	permitted	airspace	plus	an	estimate	of	probable	expansion	airspace.	These	estimates	are	developed	at	least	annually	by	engineers	utilizing	information	provided	by	annual aerial	surveys.	As	of	December	31,	2009,	total	available	disposal	capacity	is	estimated	to	be	4.4	billion	in-place	cubic	yards	of	permitted	airspace	plus	0.2	billion	in-place	cubic	yards	of	probable expansion	airspace.	Before	airspace	included	in	an	expansion	area	is	determined	to	be	probable	expansion	airspace	and,	therefore,	included	in	our	calculation	of	total	available	disposal	capacity,	it	must meet	all	of	our	expansion	criteria.	See	Note	2,	Summary	of	Significant	Accounting	Policies,	and	Note	8,	Landfill	and	Environmental	Costs,	to	our	consolidated	financial	statements	in	Item	8	of	this Annual	Report	on	Form	10-K	for	further	information.	During	2009,	total	available	airspace	decreased	by	a	net	296.9	million	cubic	yards	primarily	due	to	divestitures,	closures	and	airspace	consumed, partially	offset	by	new	expansions.

During	2008,	total	available	airspace	increased	by	a	net	3.2	billion	cubic	yards	due	to	the	merger	with	Allied	in	December,	which	contributed	157	active	landfills	representing	3.3	billion	cubic	yards	of permitted	and	probable	expansion	airspace.	Excluding	the	merger	with	Allied,	total	available	airspace	related	to	Republic's	pre-merger	operations	decreased	by	a	net	0.1	billion	cubic	yards,	primarily	due to	airspace	consumed,	changes	in	engineering	estimates	and	changes	in	design.	The	decrease	during	2008	due	to	changes	in	engineering	estimates	is	primarily	due	to	a	reduction	of	remaining	airspace	at our	Countywide	facility.

During	2007,	total	available	airspace	increased	by	a	net	7.5	million	cubic	yards	due	to	new	expansions	undertaken,	changes	in	engineering	estimates	and	permits	granted,	partially	offset	by	airspace consumed	and	changes	in	design.	In	addition,	total	available	airspace	increased	as	a	result	of	obtaining	a	new	contract	to	operate	a	landfill	in	Texas,	which	was	substantially	offset	by	a	reduction	resulting from	not	renewing	a	contract	to	operate	a	small	landfill	in	Texas.	Changes	in	design	in	2007	are	primarily	due	to	a	reduction	of	estimated	remaining	available	airspace	at	our	Countywide	facility.

At	December	31,	2006,	7.2%	of	our	total	available	airspace,	or	124.6	million	cubic	yards,	consisted	of	probable	expansion	airspace	at	eight	of	our	landfills.	At	December	31,	2009,	4.6%	of	our	total available	airspace,	or	212.5	million	cubic	yards,	consisted	of	probable	expansion	airspace	at	twelve	of	our	landfills.	Between	December	31,	2006	and	December	31,	2009,	we	received	permits	for	twelve of	our	probable	expansions,	which	demonstrates	our	continued	success	in	obtaining	permits	for	expansion	airspace.

As	of	December	31,	2009,	twelve	of	our	landfills	meet	all	of	our	criteria	for	including	their	probable	expansion	airspace	in	their	total	available	disposal	capacity,	eight	of	which	were	added	as	a	result	of our	acquisition	of	Allied.	At	projected	annual	volumes,	these	landfills	have	an	estimated	remaining	average	site	life	of	39	years,	including	probable	expansion	airspace.	The	average	estimated	remaining life	of	all	of	our	landfills	is	46	years.	We	have	other	expansion	opportunities	that	are	not	included	in	our	total	available	airspace	because	they	do	not	meet	all	of	our	criteria	for	probable	expansion airspace.

The	following	table	reflects	the	estimated	operating	lives	of	our	active	landfill	sites	based	on	available	and	probable	disposal	capacity	using	current	annual	volumes	as	of	December	31,	2009:

|  | Number	of<br>Sites<br>without<br>Expansion<br>Airspace | Number	of<br>Sites<br>with<br>Expansion<br>Airspace | Total<br>Sites | Percent<br>of<br>Total |
| :--- | :--- | :--- | :--- | :--- |
| 0\tto\t5\tyears | 20 | - | 20 | 10.4% |
| 6\tto\t10\tyears | 23 | 1 | 24 | 12.5% |
| 11\tto\t20\tyears | 50 | 4 | 54 | 28.1% |
| 21\tto\t40\tyears | 45 | 5 | 50 | 26.1% |
| 41+\tyears | 42 | 2 | 44 | 22.9% |
| Total | \t\t\t\t\t180 | \t\t\t\t\t12 | \t\t\t\t\t192 | \t\t\t\t\t100.0% |

# Final	Capping,	Closure	and	Post-Closure	Costs

As	of	December	31,	2009,	accrued	final	capping,	closure	and	post-closure	costs	were	$1,074.5	million,	of	which	$137.5	million	is	current	and	$937.0	million	is	long-term	as	reflected	in	our	consolidated balance	sheets	in	accrued	landfill	and	environmental	costs.

# Remediation	and	Other	Charges	for	Landfill	Matters

In	December	2009,	we	finalized	our	purchase	price	allocation	for	the	environmental	liabilities	we	assumed	as	part	of	the	acquisition	of	Allied.	These	liabilities	represent	our	estimate	of	costs	to	remediate sites	that	were	previously	owned	or	operated	by	Allied	or	sites	at	which	Allied,	or	a	predecessor	company	that	it	had	acquired,	had	been	identified	as	a	potentially	responsible	party.	The	remediation	of these	sites	is	in	various	stages	of	completion	from	having	received	an	initial	notice	from	a	regulatory	agency	and	commencing	investigation	to	being	in	the	final	stages	of	post	remedial	monitoring.	See also	Note	2,	Summary	of	Significant	Accounting	Policies	—	Environmental	Remediation	Liabilities,	for	further	information.	We	have	recorded	these	liabilities	at	their	estimated	fair	values	using	a discount	rate	of	9.75%.	Discounted	liabilities	are	accreted	to	interest	expense	through	the	period	that	they	are	paid.

The	following	is	a	discussion	of	certain	of	our	significant	remediation	matters:

Countywide	Landfill.	In	2007,	we	were	issued	Final	Findings	and	Orders	(F&Os)	by	the	Ohio	Environmental	Protection	Agency	(OEPA)	related	to	environmental	conditions	at	our	Countywide	Recycling and	Disposal	Facility	(Countywide)	in	East	Sparta,	Ohio	and	we	agreed	to	undertake	certain	other	remedial	actions	with	the	OEPA	as	well.	During	2008,	Republic	Services	of	Ohio	II,	LLC	(Republic- Ohio),	an	Ohio	limited	liability	company	and	wholly	owned	subsidiary	of	ours	and	parent	of	Countywide,	entered	into	an	Agreed	Order	on	Consent	(AOC)	with	the	EPA	requiring	the	reimbursement	of costs	incurred	by	the	EPA	and	requiring	Republic-Ohio	to	perform	certain	remediation	activities	at	Countywide.	Republic-Ohio	also	has	completed	construction	of	an	isolation	break	under	the	authority and	supervision	of	the	U.S.	EPA.	On	September	30,	2009,	Republic-Ohio	entered	into	a	set	of	F&Os	with	the	OEPA	that	supersede	previous	F&Os	mentioned	above.	The	F&Os	require	the implementation	of	a	comprehensive	operation	and	maintenance	program	for	managing	the	remediation	area.	The	operation	and	maintenance	program	requires	Republic-Ohio	to	maintain	the	temporary cap	and	other	engineering	controls	to	prevent	odors	and	isolate	and	contain	the	reaction.	The	operation	and	maintenance	program	also	requires	the	installation	of	a	composite	cap	in	the	remediation	area when	conditions	become	conducive	to	such	installation,	and	is	ultimately	designed	to	result	in	the	final	capping	and	closure	of	the	88-acre	remediation	area	at	Countywide.	The	remediation	liability	for Countywide	recorded	as	of	December	31,	2009	is	$74.2	million,	of	which	approximately	$5.7	million	is	expected	to	be	paid	during	2010.

West	Contra	Costa	County	Landfill.	In	2006,	we	were	issued	an	Enforcement	Order	by	the	California	Department	of	Toxic	Substance	Control	(DTSC)	for	the	Class	1	Hazardous	waste	cell	at	the	West Contra	Costa	County	Landfill	(West	County).	Subsequently,	we	entered	into	a	Consent	Agreement	with	DTSC	in	2007	at	which	time	we	agreed	to	undertake	certain	remedial	actions.	The	remediation liability	for	West	County	recorded	as	of	December	31,	2009	is	$46.8	million,	of	which	approximately	$1.6	million	is	expected	to	be	paid	during	2010.

Sunrise	Landfill.	On	August	1,	2008,	Republic	Services	of	Southern	Nevada	(RSSN),	our	wholly	owned	subsidiary,	signed	a	Consent	Decree	with	the	EPA,	the	Bureau	of	Land	Management	and	Clark County,	Nevada	related	to	the	Sunrise	Landfill.	Under	the	Consent	Decree,	RSSN	has	agreed	to	perform	certain	remedial	actions	at	the	Sunrise	Landfill	for	which	RSSN	and	Clark	County	were	otherwise jointly	and	severally	liable.	RSSN	is	currently	working	with	the	Clark	County	Staff	and	Board	of	Commissioners	to	develop	a	mechanism	to	fund	the	costs	to	comply	with	the	Consent	Decree.	However, we	have	not	recorded	any	potential	recoveries.	The	remediation	liability	for	Sunrise	recorded	as	of	December	31,	2009	is	$37.0	million,	of	which	approximately	$12.8	million	is	expected	to	be	paid during	2010.

Congress	Development	Landfill.	In	January	2006,	Congress	Development	Co.	(CDC)	was	issued	an	Agreed	Preliminary	Injunction	and	Order	by	the	Circuit	Court	of	Illinois,	Cook	County.	Subsequently, the	court	issued	two	additional	Supplemental	Orders	that	required	CDC	to	implement	certain	remedial	actions	at	the	Congress	Landfill.	The	remediation	liability	recorded	for	CDC	as	of	December	31, 2009	is	$82.5	million,	of	which	approximately	$19.9	million	is	expected	to	be	paid	during	2010.

It	is	reasonably	possible	that	we	will	need	to	adjust	the	charges	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.

# Investment	in	Landfills

The	following	tables	reflect	changes	in	our	investment	in	landfills	for	the	years	ended	December	31,	2009,	2008	and	2007	and	the	future	expected	investment	as	of	December	31,	2009	(in	millions):

|  | Balance<br>as	of<br>December	31,<br>2008 | Capital<br>Additions | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Non-cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Additions<br>Charged<br>to	Expense | Transfers<br>and<br>Other<br>Adjustments | and<br>Transfers	to<br>Assets<br>Held	for<br>Sale | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Balance<br>as	of<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Non-depletable\tlandfill\tland | $169.3 | $5.9 | $(2.6) | $(7.9) | $- | $- | $(17.0) | $(5.0) | $- | $142.7 |
| Landfill\tdevelopment\tcosts | 4,126.3 | 11.7 | (0.3) | (3.2) | 32.5 | - | 132.6 | (8.5) | (60.2) | 4,230.9 |
| Construction-in-progress\t-\tlandfill | 76.2 | 278.8 | - | - | - | - | (109.5) | (0.4) | - | 245.1 |
| Accumulated\tdepletion\tand\tamortization | (1,004.2) | - | - | 1.2 | - | (282.5) | - | 5.2 | 4.9 | (1,275.4) |
| Net\tinvestment\tin\tlandfill\tland\tand\tdevelopment\tcosts | $\t\t\t\t3,367.6 | $\t296.4 | $\t\t\t\t\t(2.9) | $\t\t\t\t\t\t(9.9) | $\t\t\t\t\t\t32.5 | $\t(282.5) | $\t\t\t\t\t\t6.1 | $(8.7) | $\t\t\t\t(55.3) | $\t\t\t\t3,343.3 |

|  | as	of<br>December	31,<br>2009 | Expected<br>Future<br>Investment | Total<br>Expected<br>Investment |
| :--- | :--- | :--- | :--- |
| Non-depletable\tlandfill\tland | $142.7 | $- | $142.7 |
| Landfill\tdevelopment\tcosts | 4,230.9 | 5,993.5 | 10,224.4 |
| Construction-in-progress\t-\tlandfill | 245.1 | - | 245.1 |
| Accumulated\tdepletion\tand\tamortization | (1,275.4) | - | (1,275.4) |
| Net\tinvestment\tin\tlandfill\tland\tand\tdevelopment\tcosts | $\t\t3,343.3 | $\t\t5,993.5 | $\t\t9,336.8 |

|  | Balance<br>as	of<br>December	31,<br>2007 | Capital<br>Additions | Acquisition<br>of<br>Allied | Non-Cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Additions<br>Charged<br>to	Expense | Transfers<br>and<br>Other<br>Adjustments | and<br>Transfers	to<br>Assets<br>Held	for<br>Sale | Balance<br>as	of<br>December	31,<br>2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Non-depletable\tlandfill\tland | $52.7 | $0.2 | $115.7 | $- | $- | $- | $0.7 | $- | $169.3 |
| Landfill\tdevelopment\tcosts | 1,809.1 | 3.6 | 2,610.8 | 20.5 | (33.2) | - | 74.8 | (359.3) | 4,126.3 |
| Construction-in-progress\t-\tlandfill | 66.4 | 105.1 | 0.3 | - | - | - | (74.0) | (21.6) | 76.2 |
| Accumulated\tdepletion\tand\tamortization | \t\t(1,039.5) | - | (1.2) | - | 0.6 | (119.1) | - | 155.0 | (1,004.2) |
| Net\tinvestment\tin\tlandfill\tland\tand\tdevelopment\tcosts | $888.7 | $\t108.9 | $\t2,725.6 | $\t\t\t\t\t20.5 | $\t\t\t\t\t(32.6) | $\t\t(119.1) | $\t\t\t\t\t\t1.5 | $\t\t\t\t\t(225.9) | $\t\t3,367.6 |

|  | Balance<br>as	of<br>December	31,<br>2006 | Capital<br>Additions | Retirements | Landfill<br>Operating<br>Contracts | Additions<br>for	Asset<br>Retirement<br>Obligations | Additions<br>Charged<br>to	Expense | Transfers<br>and<br>Other<br>Adjustments | for<br>Asset<br>Retirement<br>Obligations | Balance<br>as	of<br>December	31,<br>2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Non-depletable\tlandfill\tland | $52.7 | $- | $- | $- | $- | $- | $- | $- | $52.7 |
| Landfill\tdevelopment\tcosts | \t\t\t\t1,710.6 | 0.9 | (2.5) | 2.5 | 19.5 | - | 78.8 | (0.7) | 1,809.1 |
| Construction-in-progress\t-\tlandfill | 61.1 | 95.9 | - | - | - | - | (90.6) | - | 66.4 |
| Accumulated\tdepletion\tand\tamortization | (930.6) | - | 2.3 | - | - | (110.1) | - | (1.1) | (1,039.5) |
| Net\tinvestment\tin\tlandfill\tland\tand\tdevelopment\tcosts | $893.8 | $\t\t96.8 | $\t\t\t\t\t(0.2) | $\t\t\t\t\t2.5 | $\t\t\t\t\t19.5 | $\t\t(110.1) | $\t\t\t\t(11.8) | $\t\t\t\t\t(1.8) | $\t\t\t\t\t888.7 |

The	following	table	reflects	our	net	investment	in	our	landfills,	excluding	non-depletable	land,	and	our	depletion,	amortization	and	accretion	expense	for	the	years	ended	December	31,	2009,	2008	and 2007:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Number\tof\tlandfills\towned\tor\toperated | 192 | 213 | 58 |
| Net\tinvestment,\texcluding\tnon-depletable\tland\t(in\tmillions) | $\t3,200.6 | $\t3,198.3 | $\t836.0 |
| Total\testimated\tavailable\tdisposal\tcapacity\t(in\tmillions\tof\tcubic\tyards) | 4,648.9 | 4,945.8 | 1,729.3 |
| Net\tinvestment\tper\tcubic\tyard | $0.69 | $0.65 | $0.48 |
| Landfill\tdepletion\tand\tamortization\texpense\t(in\tmillions) | $278.5 | $119.7 | $110.1 |
| Accretion\texpense\t(in\tmillions) | 88.8 | 23.9 | 17.1 |
|  | 367.3 | 143.6 | 127.2 |
| Airspace\tconsumed\t(in\tmillions\tof\tcubic\tyards) | 86.9 | 42.7 | 40.3 |
| Depletion,\tamortization\tand\taccretion\texpense\tper\tcubic\tyard\tof\tairspace\tconsumed | $4.23 | $3.36 | $3.16 |

The	increase	in	the	investment	in	our	landfills,	both	in	aggregate	dollars	and	as	an	investment	per	cubic	yard,	is	primarily	due	to	the	acquisition	of	Allied	in	December	2008.	Landfill	development	cost	in the	above	table	includes	$2.6	billion	of	purchase	price	for	the	acquisition	that	has	been	allocated	to	the	permitted	and	probable	expansion	airspace	acquired	based	on	its	fair	value	as	of	the	date	of	the acquisition.	Depletion,	amortization	and	accretion	expense	increased	from	2008	to	2009	and	from	2007	to	2008	primarily	due	to	accretion	expense	associated	with	capping,	closure	and	post-closure liabilities	assumed	from	Allied.	The	asset	retirement	obligations	assumed	from	Allied	are	recorded	using	a	discount	rate	of	9.75%,	which	is	higher	than	the	rate	we	have	historically	used.	See	Note	2, Summary	of	Significant	Accounting	Policies,	regarding	asset	retirement	obligation	adjustments.

During	the	years	ended	December	31,	2009,	2008	and	2007,	our	weighted-average	compaction	rate	was	approximately	1,700	pounds	per	cubic	yard	based	on	our	three-year	historical	moving	average. Our	compaction	rates	may	improve	as	a	result	of	the	settlement	and	decomposition	of	waste.

As	of	December	31,	2009,	we	expect	to	spend	an	estimated	additional	$6.0	billion	on	existing	landfills,	primarily	related	to	cell	construction	and	environmental	structures,	over	their	expected	remaining lives.	Our	total	expected	investment,	excluding	non-depletable	land,	estimated	to	be	$9.2	billion,	or	$1.98	per	cubic	yard,	is	used	in	determining	our	depletion	and	amortization	expense	based	on	airspace consumed	using	the	units-of-consumption	method.

# Property	and	Equipment

The	following	tables	reflect	the	activity	in	our	property	and	equipment	accounts	for	the	years	ended	December	31,	2009,	2008	and	2007	(in	millions):

|  | Balance<br>as	of<br>December	31,<br>2008 | Capital<br>Additions | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Non-Cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Transfers<br>and<br>Other<br>Adjustments | Impairments<br>and	Transfers<br>to	Assets<br>Held	for<br>Sale | Balance<br>as	of<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Other\tland | $464.4 | $10.1 | $(3.5) | $(48.3) | $- | $- | $(0.4) | $(3.6) | $418.7 |
| Non-depletable\tlandfill\tland | 169.3 | 5.9 | (2.6) | (7.9) | - | - | (17.0) | (5.0) | 142.7 |
| Landfill\tdevelopment\tcosts | 4,126.3 | 11.7 | (0.3) | (3.2) | 32.5 | (60.2) | 132.6 | (8.5) | 4,230.9 |
| Vehicles\tand\tequipment | 3,432.3 | 509.1 | (126.1) | (7.5) | - | - | 2.0 | (17.4) | 3,792.4 |
| Buildings\tand\timprovements | 706.0 | 17.6 | (12.1) | (0.8) | - | - | 31.2 | (0.3) | 741.6 |
| Construction-in-progress\t-\tlandfill | 76.2 | 278.8 | - | - | - | - | (109.5) | (0.4) | 245.1 |
| Construction-in-progress\t-\tother | 26.3 | 29.3 | - | 6.9 | - | - | (39.3) | (0.2) | 23.0 |
| Total | $\t\t\t\t\t\t9,000.8 | $\t\t\t\t862.5 | $\t\t\t\t\t(144.6) | $\t\t\t\t\t\t(60.8) | $\t\t\t\t\t\t32.5 | $\t\t\t\t\t\t(60.2) | $\t\t\t\t\t\t\t(0.4) | $\t\t\t\t\t\t\t(35.4) | $\t\t\t\t\t9,594.4 |

# Accumulated	Depreciation,	Depletion	and	Amortization

|  | Balance<br>as	of<br>December	31,<br>2008 | Additions<br>Charged<br>to<br>Expense | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Impairments<br>and	Transfers<br>to	Assets<br>Held	for	Sale | Balance<br>as	of<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Landfill\tdevelopment\tcosts | $(1,004.2) | $(282.5) | $- | $1.2 | $4.9 | $5.2 | $(1,275.4) |
| Vehicles\tand\tequipment | (1,147.3) | (490.3) | 107.5 | 4.7 | - | 7.2 | (1,518.2) |
| Buildings\tand\timprovements | (111.1) | (36.9) | 1.4 | (0.7) | - | 4.2 | (143.1) |
| Total | $\t\t\t\t\t(2,262.6) | $\t\t(809.7) | $\t\t\t\t\t108.9 | $\t\t\t\t\t\t\t\t\t\t5.2 | $\t\t\t\t\t\t\t\t\t4.9 | $\t\t\t\t\t\t\t\t\t16.6 | $\t\t\t\t\t(2,936.7) |

|  | Balance<br>as	of<br>December	31,<br>2007 | Capital<br>Additions | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Non-Cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Transfers<br>and<br>Other<br>Adjustments | Impairments<br>and	Transfers<br>to	Assets<br>Held	for<br>Sale | Balance<br>as	of<br>December	31,<br>2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Other\tland | $105.7 | $1.4 | $(0.1) | $358.5 | $- | $- | $\t\t\t\t\t\t\t(0.7) | $(0.4) | $464.4 |
| Non-depletable\tlandfill\tland | 52.7 | 0.2 | - | 115.7 | - | - | 0.7 | - | 169.3 |
| Landfill\tdevelopment\tcosts | 1,809.1 | 3.6 | - | 2,610.8 | 20.5 | (33.2) | 74.8 | (359.3) | 4,126.3 |
| Vehicles\tand\tequipment | 1,965.1 | 232.8 | (87.8) | 1,380.4 | - | - | 2.8 | (61.0) | 3,432.3 |
| Buildings\tand\timprovements | 346.7 | 5.0 | (7.5) | 379.9 | - | - | 19.9 | (38.0) | 706.0 |
| Construction-in-progress\t-\tlandfill | 66.4 | 105.1 | - | 0.3 | - | - | (74.0) | (21.6) | 76.2 |
| Construction-in-progress\t-\tother | 11.8 | 23.9 | - | 14.2 | - | - | (23.5) | (0.1) | 26.3 |
| Total | $\t\t\t\t\t4,357.5 | $\t\t372.0 | $\t\t\t\t\t(95.4) | $\t\t\t\t4,859.8 | $\t\t\t\t\t\t20.5 | $\t\t\t\t\t\t(33.2) | $\t\t\t\t\t\t\t- | $\t\t\t\t\t\t(480.4) | $\t\t\t\t\t9,000.8 |

|  | Balance<br>as	of<br>December	31,<br>2007 | Additions<br>Charged<br>to<br>Expense | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Impairments<br>and	Transfers<br>to	Assets<br>Held	for	Sale | Balance<br>as	of<br>December	31,<br>2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Landfill\tdevelopment\tcosts | $(1,039.5) | $(119.1) | $- | $\t\t\t\t\t\t\t\t\t(1.2) | $\t\t\t\t\t\t\t\t\t0.6 | $155.0 | $(1,004.2) |
| Vehicles\tand\tequipment | (1,052.7) | (208.3) | 87.5 | 2.9 | - | 23.3 | (1,147.3) |
| Buildings\tand\timprovements | (101.0) | (15.0) | 1.0 | - | - | 3.9 | (111.1) |
| Total | $\t\t\t\t\t\t(2,193.2) | $\t\t(342.4) | $\t\t\t\t\t\t\t88.5 | $1.7 | $0.6 | $\t\t\t\t\t\t182.2 | $\t\t\t\t\t(2,262.6) |

|  | Balance<br>as	of<br>December	31,<br>2006 | Capital<br>Additions | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Non-Cash<br>Additions<br>for	Asset<br>Retirement<br>Obligations | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Transfers<br>and<br>Other<br>Adjustments | Balance<br>as	of<br>December	31,<br>2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Other\tland | $105.9 | $1.4 | $(0.3) | $(3.1) | $- | $- | $\t\t\t\t\t\t\t1.8 | $105.7 |
| Non-depletable\tlandfill\tland | 52.7 | - | - | - | - | - | - | 52.7 |
| Landfill\tdevelopment\tcosts | 1,710.6 | 0.9 | (2.5) | 2.5 | 19.5 | (0.7) | 78.8 | 1,809.1 |
| Vehicles\tand\tequipment | 1,886.8 | 173.4 | (77.8) | (22.1) | - | - | 4.8 | 1,965.1 |
| Buildings\tand\timprovements | 319.1 | 2.6 | (0.1) | (2.5) | - | - | 27.6 | 346.7 |
| Construction-in-progress\t-\tlandfill | 61.1 | 95.9 | - | - | - | - | (90.6) | 66.4 |
| Construction-in-progress\t-\tother | 12.3 | 21.9 | - | - | - | - | (22.4) | 11.8 |
| Total | $\t\t\t\t\t4,148.5 | $\t\t296.1 | $\t\t\t\t\t\t(80.7) | $\t\t\t\t\t\t\t(25.2) | $\t\t\t\t\t\t19.5 | $\t\t\t\t\t\t\t(0.7) | $- | $\t\t\t\t\t\t4,357.5 |

|  | Balance<br>as	of<br>December	31,<br>2006 | Additions<br>Charged<br>to<br>Expense | Retirements | Acquisitions,<br>Net	of<br>Divestitures | Adjustments<br>for<br>Asset<br>Retirement<br>Obligations | Impairments<br>and	Transfers<br>to	Assets<br>Held	for	Sale | Balance<br>as	of<br>December	31,<br>2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Landfill\tdevelopment\tcosts | $(930.6) | $(110.1) | $2.3 | $- | $(1.1) | $- | $(1,039.5) |
| Vehicles\tand\tequipment | (963.5) | (176.7) | 72.1 | 15.7 | - | (0.3) | (1,052.7) |
| Buildings\tand\timprovements | (90.6) | (12.2) | 0.2 | 1.6 | - | - | (101.0) |
| Total | $\t(1,984.7) | $\t(299.0) | $\t74.6 | $\t17.3 | $\t(1.1) | $\t(0.3) | $\t(2,193.2) |

# Liquidity	and	Capital	Resources

The	major	components	of	changes	in	cash	flows	for	the	years	ended	December	31,	2009,	2008	and	2007	are	discussed	in	the	following	paragraphs.	The	following	table	summarizes	our	cash	flow	from operating	activities,	investing	activities	and	financing	activities	for	the	years	ended	December	31,	2009,	2008	and	2007:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $1,396.5 | $512.2 | $661.3 |
| Net\tcash\tused\tin\tinvesting\tactivities | (242.5) | (934.7) | (260.3) |
| Net\tcash\t(used\tin)\tprovided\tby\tfinancing\tactivities | (1,174.7) | 469.4 | (408.3) |

# Cash	Flows	Provided	by	Operating	Activities

The	most	significant	items	affecting	the	comparison	of	our	operating	cash	flows	for	2009	and	2008	are	summarized	below:

Earnings	increase.	Our	net	income	increased	by	$422.6	million,	on	a	year-over-year	basis,	primarily	due	to	the	acquisition	of	Allied	in	December	2008,	which	positively	affected	our	cash	flow	from operations	in	2009.

Changes	in	assets	and	liabilities,	net	of	effects	from	business	acquisitions	and	divestitures.	Changes	in	assets	and	liabilities	negatively	affected	our	cash	flow	from	operations	by	$251.9	million	in	2009 versus	a	negative	impact	of	$78.9	million	in	2008,	primarily	as	a	result	of	the	following:

•		During	2009,	the	cash	we	paid	to	settle	our	capping,	closure,	post-closure	and	remediation	obligations	increased	by	$85.9	million.	The	increase	in	cash	paid	for	closure	and	post closure	activities	is	primarily	due	to	our	acquisition	of	Allied.

•		During	2009,	we	paid	$66.5	million	for	restructuring	and	synergy	related	costs	incurred	in	connection	with	the	restructuring	plan	formulated	as	a	result	of	our	acquisition	of	Allied. The	plan	included	closing	our	corporate	office	in	Florida,	consolidating	administrative	functions	to	Arizona,	the	former	headquarters	of	Allied,	and	reducing	staffing	levels.

•		During	2009,	we	made	income	tax	payments	(net	of	refunds	received)	of	approximately	$444	million,	of	which	approximately	$105	million	relates	to	taxes	on	our	divestitures. During	2008,	we	made	income	tax	payments	(net	of	refunds	received)	of	approximately	$128	million.	During	2008,	approximately	$32	million	of	federal	tax	payments	were deferred	and	paid	in	2009	as	a	result	of	the	merger	with	Allied.	With	respect	to	the	settlement	of	certain	tax	liabilities	regarding	our	risk	management	companies,	we	paid approximately	$58	million	in	the	first	quarter	of	2010	and	expect	to	pay	the	remainder,	approximately	$67	million,	later	in	2010.

Cash	provided	by	operating	activities	was	$512.2	million	and	$661.3	million	for	the	years	ended	December	31,	2008	and	2007,	respectively.	The	changes	in	cash	provided	by	operating	activities	during the	periods	are	primarily	due	to	the	expansion	of	our	business,	the	timing	of	payments	received	for	accounts	receivable,	and	the	timing	of	payments	made	for	accounts	payable	and	federal	income	taxes.

We	use	cash	flows	from	operations	to	fund	capital	expenditures,	acquisitions,	dividend	payments	and	debt	repayments.

# Cash	Flows	Used	in	Investing	Activities

The	most	significant	items	affecting	the	comparison	of	our	investing	cash	flows	for	the	periods	presented	are	summarized	below:

Capital	expenditures.	Capital	expenditures	during	2009	were	$826.3	million,	compared	with	$386.9	million	in	2008	and	$292.5	million	in	2007.	Capital	expenditures	in	2009	were	higher	than	either	2008 or	2007	due	to	our	acquisition	of	Allied	in	December	2008.	During	2010,	we	expect	our	capital	expenditures	to	approximate	$870	million.	However,	we	expect	property	and	equipment	received	during 2010	to	be	$790	million,	which	excludes	$80	million	of	property	and	equipment	received	during	2009	but	paid	for	during	2010.

Cash	paid	for	acquisitions,	net	of	cash	acquired.	Cash	paid	for	acquisitions	decreased	from	$553.8	million	during	2008	to	$0.1	million	during	2009.	Cash	paid	for	acquisitions	in	2008	relates	to	the retirement	of	Allied's	credit	facility	at	the	close	of	the	acquisition,	net	of	cash	acquired,	and	$13.4	million	of	cash	paid	for	other	acquisitions.

Proceeds	from	divestitures.	Proceeds	from	divestitures	(net	of	cash	divested)	and	other	sales	of	assets	were	$511.1	million	in	2009,	$3.3	million	in	2008	and	$42.1	million	in	2007.	Proceeds	from divestitures	in	2009	were	the	result	of	divestitures	of	certain	assets	as	required	by	the	DOJ	as	a	condition	of	the	merger	with	Allied	and	certain	other	business	dispositions.	Proceeds	from	divestitures	in 2007	related	primarily	to	the	disposition	of	our	compost,	mulch	and	soil	business	in	Texas.

Change	in	restricted	cash	and	marketable	securities.	Changes	in	our	restricted	cash	and	marketable	securities	balances,	which	are	largely	related	to	the	issuance	of	tax-exempt	bonds	for	our	capital	needs and	amounts	held	in	trust	as	a	guarantee	of	performance,	contributed	$41.6	million	to	our	investing	activities	in	2009	compared	to	uses	of	cash	of	$5.3	million	and	$11.6	million	in	2008	and	2007, respectively.	The	funds	received	from	issuances	of	tax-exempt	bonds	are	deposited	directly	into	trust	accounts	by	the	bonding	authority	at	the	time	of	issuance.	As	we	do	not	have	the	ability	to	use	these funds	for	general	operating	purposes,	they	are	classified	as	restricted	cash	in	our	consolidated	balance	sheets.	Proceeds	from	bond	issuances	represent	cash	used	in	investing	activities	in	our	consolidated statements	of	cash	flows.	Reimbursements	from	the	trust	for	qualifying	expenditures	are	presented	as	cash	provided	by	investing	activities	in	our	consolidated	statements	of	cash	flows.	During	2009,	our reimbursements	from	restricted	cash	accounts	exceeded	funds	received	from	the	issuance	of	tax-exempt	bonds.

We	intend	to	finance	capital	expenditures	and	acquisitions	through	cash	on	hand,	restricted	cash	held	for	capital	expenditures,	cash	flows	from	operations,	our	revolving	credit	facilities,	and	tax-exempt bonds	and	other	financings.	We	expect	to	use	primarily	cash	for	future	business	acquisitions.

# Cash	Flows	Provided	by	(Used	in)	Financing	Activities

The	most	significant	items	affecting	the	comparison	of	our	cash	flows	from	financing	activities	for	the	periods	presented	are	summarized	below:

Net	debt	repayments	or	borrowings.	Payments	of	notes	payable	and	long-term	debt	net	of	proceeds	from	notes	payable	and	long-term	debt	and	issuance	of	senior	notes	were	$865.9	million	in	2009 versus	net	borrowing	of	$712.8	million	and	$11.1	million	in	2008	and	2007,	respectively.	During	2009,	we	issued	$650.0	million	of	5.500%	Senior	Notes	due	2019	and	$600.0	million	of	5.250%	Senior Notes	due	2021.	The	primary	use	of	proceeds	from	the	notes	together	with	draws	on	our	Credit	Facilities	was	to	purchase	and	retire:	(i)	$325.5	million	of	varied	senior	notes	maturing	in	2010	and	2011 pursuant	to	our	September	2009	tender	offer;	(ii)	$450.0	million	of	7.875%	of	Senior	Notes	due	2013;	(iii)	$400.0	million	of	7.375%	Senior	Notes	due	2014;	(iv)	$230.0	million	of	4.250%	Senior Subordinated	Convertible	Debentures	due	2034	and;	(v)	repurchase	certain	of	our	senior	notes	maturing	in	2010	and	2011	in	the	secondary	market.	Additionally,	our	senior	unsecured	notes	bearing interest	at	a	fixed	rate	of	7.125%	matured	during	2009.	We	repaid	the	remaining	principal	balance	of	$99.3	million	in	May	2009.	Net	borrowings	reflected	in	our	cash	flows	provided	by	financing activities	in	2008	were	primarily	related	to	the	merger	with	Allied.	We	used	proceeds	from	our	revolver	to	refinance	extensions	of	credit	under	Allied's	senior	credit	facility,	to	pay

fees	and	expenses	in	connection	therewith,	and	to	pay	fees	and	expenses	incurred	in	connection	with	the	merger.

Premiums	and	fees	paid	to	issue	and	retire	senior	notes.	In	connection	with	the	issuance	of	our	senior	notes	as	well	as	purchasing	and	retiring	certain	indebtedness	in	2009,	we	incurred	cash	premiums and	fees	totaling	$61.6	million.

Purchase	of	common	stock	for	treasury.	From	2000	through	2008,	our	Board	of	Directors	authorized	the	repurchase	of	up	to	$2.6	billion	of	our	common	stock.	As	of	December	31,	2008,	we	had	paid $2.3	billion	to	repurchase	82.6	million	shares	of	our	common	stock,	of	which	$138.4	million	was	paid	during	2008	to	repurchase	4.6	million	shares	and	$362.8	million	was	paid	during	2007	to	repurchase 11.1	million	shares	of	our	common	stock.	The	stock	repurchase	program	was	suspended	in	the	second	quarter	of	2008	due	to	the	pending	merger	with	Allied.	We	expect	that	the	share	repurchase	program will	continue	to	be	suspended	until	at	least	2011.

Cash	dividends	paid.	We	initiated	a	quarterly	cash	dividend	in	July	2003.	The	dividend	has	been	increased	each	year	thereafter,	with	the	latest	increase	occurring	in	the	third	quarter	of	2008.	Our	current quarterly	dividend	per	share	is	$0.19.	Dividends	paid	were	$288.3	million,	$128.3	million	and	$93.9	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.

# Financial	Condition

As	of	December	31,	2009,	we	had	$48.0	million	of	cash	and	cash	equivalents,	and	$240.5	million	of	restricted	cash	deposits	and	restricted	marketable	securities,	including	$93.1	million	of	restricted	cash held	for	capital	expenditures	under	certain	debt	facilities.

In	April	2007,	we	increased	our	unsecured	revolving	credit	facility	from	$750.0	million	to	$1.0	billion	and	extended	the	term	from	2010	to	2012.	In	conjunction	with	the	merger	with	Allied,	in	September 2008,	we	entered	into	an	additional	$1.75	billion	revolving	credit	facility	with	a	group	of	banks.	This	credit	facility	was	used	initially	at	the	time	of	the	merger	to	refinance	extensions	of	credit	under Allied's	senior	credit	facility,	to	pay	fees	and	expenses	in	connection	therewith,	and	to	pay	fees	and	expenses	incurred	in	connection	with	the	merger.	We	also	amended	our	existing	$1.0	billion	credit facility	to	conform	certain	terms	of	the	facility	to	those	included	in	our	new	$1.75	billion	credit	facility.	We	did	not	change	the	maturity	date	of	the	$1.0	billion	credit	facility.

The	$1.0	billion	revolving	credit	facility	due	April	2012	and	the	$1.75	billion	revolving	credit	facility	due	September	2013	(collectively,	Credit	Facilities)	bear	interest	at	a	Base	Rate,	or	a	Eurodollar Rate,	plus	an	applicable	margin	based	on	our	Debt	Ratings	(all	as	defined	in	the	agreements).	As	of	December	31,	2009	and	2008,	the	interest	rate	for	our	borrowings	under	our	Credit	Facilities	was 1.82%	and	3.43%,	respectively.	Our	Credit	Facilities	are	also	subject	to	facility	fees	based	on	applicable	rates	defined	in	the	agreements	and	the	aggregate	commitments,	regardless	of	usage.	Borrowings under	our	Credit	Facilities	can	be	used	for	working	capital,	capital	expenditures,	letters	of	credit	and	other	general	corporate	purposes.	We	had	$0.3	billion	and	$0.6	billion	of	Eurodollar	Rate	borrowings, and	$1.6	billion	and	$1.7	billion	of	letters	of	credit	utilizing	availability	under	our	Credit	Facilities,	leaving	$0.8	billion	and	$0.4	billion	of	availability	under	our	Credit	Facilities	at	December	31,	2009 and	2008,	respectively.

The	agreements	governing	the	Credit	Facilities	require	us	to	comply	with	certain	financial	and	other	covenants.	We	have	the	ability	to	pay	dividends	and	to	repurchase	common	stock	provided	that	we	are in	compliance	with	these	covenants.	Compliance	with	these	covenants	is	a	condition	for	any	incremental	borrowings	under	the	Credit	Facilities	and	failure	to	meet	these	covenants	would	enable	the lenders	to	require	repayment	of	any	outstanding	loans	(which	would	adversely	affect	our	liquidity).	At	December	31,	2009,	our	EBITDA	to	interest	ratio	was	4.01	compared	to	the	3.00	minimum	required by	the	covenants.	In	addition,	at	December	31,	2009,	our	total	debt	to	EBITDA	ratio	was	2.87	compared	to	the	4.00	maximum	allowed	by	the	covenants.	At	December	31,	2009,	we	were	in	compliance with	the	covenants	of	the	Credit	Facilities,	and	during	2010	we	expect	to	be	in	compliance.

EBITDA,	which	is	a	non-GAAP	measure,	is	calculated	as	defined	in	our	Credit	Facility	agreements.	In	this	context,	EBITDA	is	used	solely	to	provide	information	regarding	the	extent	to	which	we	are	in compliance	with	debt	covenants	and	is	not	comparable	to	EBITDA	used	by	other	companies	or	used	by	us	for	other	purposes.

In	December	2009	we	used	cash	on	hand	and	incremental	borrowings	under	our	Credit	Facilities	to	redeem	$400.0	million	of	our	7.375%	Senior	Notes	due	2014.	The	Senior	Notes	were	redeemed	at	a price	equal	to	103.688%	of	the	principal	amount	of	the	notes,	plus	accrued	and	unpaid	interest.	We	incurred	a	charge	of	$46.0	million	for	premiums	paid	to	repurchase	debt,	the	charge	for	unamortized debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase.

In	November	2009,	we	issued	$600.0	million	of	Senior	Notes	with	a	fixed	interest	rate	of	5.250%	due	2021	in	a	private	placement	transaction.	The	notes	are	general	senior	unsecured	obligations	and mature	on	November	15,	2021.	Interest	is	payable	semi-annually	on	May	15	and	November	15,	beginning	May	15,	2010.	These	Senior	Notes	are	guaranteed	by	each	of	our	subsidiaries	that	also guarantee	our	Credit	Facilities.	These	guarantees	are	general	senior	unsecured	obligations	of	the	subsidiary	guarantors.	In	addition,	we	entered	into	a	Registration	Rights	Agreement	with	the	initial purchasers	of	the	notes.	Under	the	Registration	Rights	Agreement,	we	agreed	to	use	our	reasonable	best	efforts	to	cause	to	become	effective	a	registration	statement	to	exchange	the	notes	for	freely tradable	notes	issued	by	us.	If	we	are	unable	to	effect	the	exchange	offer	within	365	days,	we	agreed	to	pay	additional	interest	on	the	notes.	We	used	the	net	proceeds	from	the	notes,	cash	on	hand	or incremental	borrowings	under	our	Credit	Facilities	as	follows:	(i)	to	redeem	$450.0	million	of	our	7.875%	Senior	Notes	due	2013	at	102.625%,	and	(ii)	to	redeem	$230.0	million	of	our	4.250%	Senior Subordinated	Convertible	Debentures	due	2034	at	par.	We	incurred	a	loss	of	$51.9	million	for	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees	paid	to effectuate	the	repurchase.

In	September	2009,	we	issued	$650.0	million	of	5.500%	Senior	Notes	due	2019	with	an	unamortized	discount	of	$4.5	million	at	December	31,	2009.	The	notes	are	general	senior	unsecured	obligations and	mature	on	September	15,	2019.	Interest	is	payable	semi-annually	on	March	15	and	September	15,	beginning	March	15,	2010.	The	notes	are	guaranteed	by	each	of	our	subsidiaries	that	also	guarantee our	Credit	Facilities.	These	guarantees	are	general	senior	unsecured	obligations	of	subsidiary	guarantors.	In	addition,	we	entered	into	a	Registration	Rights	Agreement	with	the	initial	purchasers	of	the notes.	Under	the	Registration	Rights	Agreement,	we	agreed	to	use	our	reasonable	best	efforts	to	cause	to	become	effective	a	registration	statement	to	exchange	the	notes	for	freely	tradable	notes	issued	by us.	If	we	are	unable	to	effect	the	exchange	offer	within	365	days,	we	agreed	to	pay	additional	interest	on	the	notes.	We	used	the	net	proceeds	from	the	notes,	cash	on	hand	or	incremental	borrowings	under our	Credit	Facilities	as	follows:	(i)	$325.5	million	to	tender	for	certain	outstanding	senior	notes	maturing	in	2010	and	2011	that	were	issued	by	us	or	one	of	our	subsidiaries;	(ii)	approximately $250	million	to	reduce	amounts	outstanding	under	our	Credit	Facilities,	and	(iii)	approximately	$105	million	to	remit	estimated	tax	payments	related	to	our	divestiture	of	assets	in	connection	with	our merger	with	Allied.	We	incurred	a	loss	of	$31.8	million	for	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase.

During	2009,	we	repurchased	a	portion	of	our	senior	notes	maturing	in	2010	and	2011	in	the	secondary	market,	and	as	a	result,	we	incurred	additional	losses	on	extinguishment	of	debt	of	$4.4	million related	to	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase.	Also	during	2009,	we	completed	the	required	divestitures under	the	consent	decree	with	the	DOJ.	Proceeds	from	the	sales	of	the	divested	assets	were	primarily	used	to	reduce	amounts	outstanding	under	our	Credit	Facilities.	Additionally,	our	senior	unsecured notes	bearing	interest	at	a	fixed	rate	of	7.125%	matured	during	2009.	We	repaid	the	remaining	principal	balance	of	$99.3	million	in	May	2009.

In	the	first	quarter	of	2010	we	called	$425.0	million	of	our	6.125%	senior	notes	due	2014.	We	expect	to	incur	a	loss	upon	extinguishment	of	the	debt	of	approximately	$52	million.

We	have	an	accounts	receivable	securitization	program	with	two	financial	institutions	that	allows	us	to	borrow	up	to	$300.0	million	on	a	revolving	basis	under	loan	agreements	secured	by	receivables.	As of	December	31,	2009,	receivables	secured	loans	totaled	$300.0	million.	In	May	2009,	we	renewed	the	facility	for	364	days	and	reduced	the	borrowing	capacity	from	$400.0	million	to	$300.0	million. We	expect	to	repay	the	facility	from

free	cash	flow,	draws	on	our	Credit	Facilities	or	proceeds	from	other	note	offerings	on	or	before	the	May	2010	maturity.

In	order	to	manage	risk	associated	with	fluctuations	in	interest	rates,	we	have	entered	into	interest	rate	swap	agreements	with	investment	grade-rated	financial	institutions.	Our	outstanding	swap agreements	have	a	total	notional	value	of	$210.0	million	and	require	us	to	pay	interest	at	floating	rates	based	on	changes	in	LIBOR	and	receive	interest	at	a	fixed	rate	of	6.75%.	Our	swap	agreements mature	in	August	2011.

At	December	31,	2009,	we	had	$1,223.7	million	of	tax-exempt	bonds	and	other	tax-exempt	financings.	Borrowings	under	these	bonds	and	other	financings	bear	interest	based	on	fixed	or	floating	interest rates	at	the	prevailing	market	ranging	from	0.20%	to	8.25%	at	December	31,	2009	and	have	maturities	ranging	from	2010	to	2037.	As	of	December	31,	2009,	we	had	$93.1	million	of	restricted	cash related	to	proceeds	from	tax-exempt	bonds	and	other	tax-exempt	financings.	This	restricted	cash	will	be	used	to	reimburse	capital	expenditures	under	the	terms	of	the	agreements.

We	intend	to	use	excess	cash	on	hand	and	cash	from	operating	activities	to	repay	debt,	which	may	include	purchases	of	our	outstanding	indebtedness	in	the	secondary	market	or	otherwise.	We	believe that	our	excess	cash,	cash	from	operating	activities	and	proceeds	from	our	revolving	credit	facilities	provide	us	with	sufficient	financial	resources	to	meet	our	anticipated	capital	requirements	and obligations	as	they	come	due.

In	the	future	we	may	choose	to	voluntarily	retire	certain	portions	of	our	outstanding	debt	before	their	maturity	date	using	cash	from	operations	or	additional	borrowings.	We	may	also	explore opportunities	in	capital	markets	to	fund	redemptions	should	market	conditions	be	favorable.	The	early	extinguishment	of	debt	may	result	in	an	impairment	charge	in	the	period	in	which	the	debt	is repurchased	and	retired.	The	loss	on	early	extinguishment	of	debt	relates	to	premiums	paid	to	effectuate	the	repurchase	and	the	relative	portion	of	unamortized	note	discounts	and	debt	issue	costs.

# Credit	Rating

We	have	received	investment	grade	credit	ratings.	As	of	December	31,	2009,	our	senior	debt	was	rated	BBB,	Baa3,	and	BBB-	by	Standard	&	Poor's	Rating	Services,	Inc.,	Moody's	Investors	Service,	Inc. and	Fitch,	Inc.,	respectively.

# Fuel	Hedges

We	use	derivative	instruments	designated	as	cash	flow	hedges	to	manage	our	exposure	to	changes	in	diesel	fuel	prices.	We	have	entered	into	multiple	swap	agreements	related	to	forecasted	diesel	fuel purchases.	The	swaps	qualified	for,	and	were	designated	as,	effective	hedges	of	changes	in	the	prices	of	forecasted	diesel	fuel	purchases	(fuel	hedges).

We	have	the	following	fuel	hedges	outstanding	at	December	31,	2009	and	2008:

| Inception	Date | Commencement	Date | Termination	Date | (in	Gallons<br>per	Month) | Contract	Price<br>per	Gallon |
| :--- | :--- | :--- | :--- | :--- |
| January\t26,\t2007 | January\t5,\t2009 | December\t28,\t2009 | 500,000 | $2.83 |
| January\t26,\t2007 | January\t4,\t2010 | December\t27,\t2010 | 500,000 | 2.81 |
| November\t5,\t2007 | January\t5,\t2009 | December\t30,\t2013 | 60,000 | 3.28 |
| March\t17,\t2008 | January\t5,\t2009 | December\t31,\t2012 | 50,000 | 3.72 |
| March\t17,\t2008 | January\t5,\t2009 | December\t31,\t2012 | 50,000 | 3.74 |
| September\t22,\t2008 | January\t1,\t2009 | December\t31,\t2011 | 150,000 | 4.16\t-\t4.17 |
| July\t10,\t2009 | January\t1,\t2010 | December\t31,\t2010 | 100,000 | 2.84 |
| July\t10,\t2009 | January\t1,\t2011 | December\t31,\t2011 | 100,000 | 3.05 |
| July\t10,\t2009 | January\t1,\t2012 | December\t31,\t2012 | 100,000 | 3.20 |

If	the	national	U.S.	on-highway	average	price	for	a	gallon	of	diesel	fuel	(average	price)	as	published	by	the	Department	of	Energy	exceeds	the	contract	price	per	gallon,	we	receive	the	difference	between the	average

price	and	the	contract	price	(multiplied	by	the	notional	gallons)	from	the	counter-party.	If	the	national	U.S.	on-highway	average	price	for	a	gallon	of	diesel	fuel	is	less	than	the	contract	price	per	gallon, we	pay	the	difference	to	the	counter-party.

The	fair	values	of	our	fuel	hedges	are	obtained	from	third-party	counter-parties	and	are	determined	using	standard	option	valuation	models	with	assumptions	about	commodity	prices	being	based	on	those observed	in	underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	aggregated	fair	values	of	the	outstanding	fuel	hedges	at	December	31,	2009	and	2008	were	current	assets	of	$3.2	million	and $1.2	million,	respectively,	and	accrued	liabilities	of	$4.9	million	and	$12.9	million,	respectively,	and	have	been	recorded	in	other	current	assets	and	other	accrued	liabilities	in	our	consolidated	balance sheets,	respectively.

The	effective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009	and	2008,	net	of	tax,	of	$1.0	million	and	$7.1	million,	respectively,	have	been	recorded	in	stockholders'	equity	as	components of	accumulated	other	comprehensive	income.	The	ineffective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009,	2008	and	2007	were	immaterial	and	have	been	recorded	in	other	income (expense),	net	in	our	consolidated	statements	of	income.	Realized	(losses)	gains	of	$(7.3)	million,	$5.9	million	and	$(1.6)	million	related	to	these	fuel	hedges	are	included	in	cost	of	operations	in	our consolidated	statements	of	income	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.

# Commodity	Hedges

We	use	derivative	instruments	designated	as	cash	flow	hedges	to	manage	our	exposure	to	changes	in	prices	of	certain	commodities.	We	have	entered	into	multiple	agreements	related	to	certain	forecasted commodity	sales.	The	swaps	qualified	for,	and	were	designated	as,	effective	hedges	of	changes	in	the	prices	of	certain	forecasted	commodity	sales	(commodity	hedges).

We	have	the	following	commodity	hedges	outstanding	at	December	31,	2009	and	2008:

If	the	price	per	short	ton	of	the	hedging	instrument	(average	price)	as	reported	on	the	Official	Board	Market	is	less	than	the	contract	price	per	short	ton,	we	receive	the	difference	between	the	average price	and	the	contract	price	(multiplied	by	the	notional	short	tons)	from	the	counter-party.	If	the	price	of	the	commodity	exceeds	the	contract	price	per	short	ton,	we	pay	the	difference	to	the	counter-party.

The	fair	values	of	our	commodity	hedges	are	obtained	from	third-party	counter-parties	and	are	determined	using	standard	option	valuation	models	with	assumptions	about	commodity	prices	being	based on	those	observed	in	underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	aggregated	fair	values	of	the	outstanding	commodity	hedges	at	December	31,	2009	and	2008	were	current	assets	of $1.8	million	and	$8.8	million,	respectively,	and	current	liabilities	of	$0.8	million	and	nil,	respectively,	and	have	been	recorded	in	other	current	assets	and	other	accrued	liabilities	in	our	consolidated balance	sheets,	respectively.

The	effective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009	and	2008,	net	of	tax,	of	$0.6	million	and	$5.3	million	have	been	recorded	in	stockholders'	equity	as	a	component	of accumulated	other

comprehensive	income.	The	ineffective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009	and	2008	were	immaterial	and	have	been	recorded	in	other	income	(expense),	net	in	our consolidated	statements	of	income.

# Contractual	Obligations

The	following	table	summarizes	our	contractual	obligations	as	of	December	31,	2009	(in	millions):

| Year	Ending<br>December	31, | Operating<br>Leases | Capital	Leases<br>and	Other	Long-<br>Term	Debt | Final	Capping,<br>Closure	and<br>Post-Closure | Remediation | Unconditional<br>Purchase<br>Commitments | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2010 | $38.0 | $550.3 | $137.5 | $107.9 | $213.4 | $1,047.1 |
| 2011 | 29.7 | 871.6 | 93.2 | 77.1 | 108.4 | 1,180.0 |
| 2012 | 22.1 | 29.9 | 101.6 | 58.5 | 85.1 | 297.2 |
| 2013 | 18.8 | 330.7 | 115.2 | 57.9 | 65.2 | 587.8 |
| 2014 | 15.4 | 440.7 | 91.5 | 38.4 | 54.7 | 640.7 |
| Thereafter | 77.4 | 5,206.9 | 4,416.6 | 415.4 | 234.5 | 10,350.8 |
| Total | $\t\t\t\t\t201.4 | $\t\t\t\t\t\t\t\t\t7,430.1 | $\t\t\t\t\t\t4,955.6 | $\t\t\t\t\t\t755.2 | $\t\t\t\t\t\t\t761.3 | $\t14,103.6 |

The	present	value	of	capital	lease	obligations	is	included	in	our	consolidated	balance	sheets.

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,	2009.

Unconditional	purchase	commitments	consist	primarily	of	(i)	disposal	related	agreements	which	include	fixed	or	minimum	royalty	payments,	host	agreements	and	take-or-pay	and	put-or-pay	agreements and	(ii)	other	obligations	including	committed	capital	expenditures	and	consulting	service	agreements.

In	addition	to	the	above,	we	have	unrecognized	tax	benefits	at	December	31,	2009	of	$242.2	million,	of	which	we	expect	to	settle	approximately	$10	million	to	$20	million	within	the	next	twelve	months. Due	to	the	uncertainty	with	respect	to	the	timing	of	future	cash	flows	associated	with	the	unrecognized	tax	benefits	at	December	31,	2009,	we	are	unable	to	make	reasonably	reliable	estimates	of	the timing	of	any	cash	settlements.

We	also	have	letters	of	credit	of	$1.7	billion,	of	which	$1.6	billion	utilize	availability	under	our	Credit	Facilities	at	December	31,	2009.

# Debt	covenants

Our	Credit	Facilities	contain	financial	covenants.	We	have	the	ability	to	pay	dividends	and	to	repurchase	common	stock	provided	that	we	are	in	compliance	with	these	covenants.	At	December	31,	2009, we	were	in	compliance	with	all	financial	and	other	covenants	under	our	Credit	Facilities.	We	were	also	in	compliance	with	the	non-financial	covenants	of	the	indentures	relating	to	our	senior	notes	as	of December	31,	2009.	We	expect	to	be	in	compliance	with	our	covenants	during	2010.

On	December	10,	2008,	we	received	the	requisite	consents	for	a	previously	announced	consent	solicitation	to	amend	the	supplemental	indentures	governing	certain	outstanding	debt	securities	of	Allied Waste	North	America,	Inc.	(AWNA).	The	amendment	to	each	supplemental	indenture	modified	the	ongoing	reporting	obligations	required	of	Allied.	Under	the	amended	supplemental	indentures,	the ongoing	reporting	obligations	may	be	satisfied	by	Republic.

The	collateral	that	had	secured	the	AWNA	senior	notes	and	the	BFI	debentures	equally	and	ratably	with	the	Allied	bank	credit	facility	was	released	upon	the	completion	of	the	merger	with	Allied	and	the repayment	of	that	facility.

Failure	to	comply	with	the	financial	and	other	covenants	under	our	Credit	Facilities,	as	well	as	the	occurrence	of	certain	material	adverse	events,	would	constitute	defaults	and	would	allow	the	lenders under	our	Credit	Facilities	to	accelerate	the	maturity	of	all	indebtedness	under	the	related	agreements.	This	could	also	have	an	adverse	impact	on	the	availability	of	financial	assurances.	In	addition, maturity	acceleration	on	our	Credit	Facilities	constitutes	an	event	of	default	under	our	other	debt	instruments,	including	our	senior	notes,	and,	therefore,	our	senior	notes	would	also	be	subject	to acceleration	of	maturity.	If	such	acceleration	were	to	occur,	we	would	not	have	sufficient	liquidity	available	to	repay	the	indebtedness.	We	would	likely	have	to	seek	an	amendment	under	our	Credit Facilities	for	relief	from	the	financial	covenants	or	repay	the	debt	with	proceeds	from	the	issuance	of	new	debt	or	equity,	or	asset	sales,	if	necessary.	We	may	be	unable	to	amend	our	Credit	Facilities	or raise	sufficient	capital	to	repay	such	obligations	in	the	event	the	maturities	are	accelerated.

# Financial	assurance

We	are	required	to	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	under	applicable	environmental	regulations	relating	to	our	landfill	operations	for	capping,	closure and	post-closure	costs,	and	related	to	our	performance	under	certain	collection,	landfill	and	transfer	station	contracts.	We	satisfy	these	financial	assurance	requirements	by	providing	surety	bonds,	letters of	credit,	insurance	policies	or	trust	deposits.	The	amount	of	the	financial	assurance	requirements	for	capping,	closure	and	post-closure	costs	is	determined	by	applicable	state	environmental	regulations. The	financial	assurance	requirements	for	capping,	closure	and	post-closure	costs	may	be	associated	with	a	portion	of	the	landfill	or	the	entire	landfill.	Generally,	states	will	require	a	third-party engineering	specialist	to	determine	the	estimated	capping,	closure	and	post-closure	costs	that	are	used	to	determine	the	required	amount	of	financial	assurance	for	a	landfill.	The	amount	of	financial assurance	required	can,	and	generally	will,	differ	from	the	obligation	determined	and	recorded	under	U.S.	GAAP.	The	amount	of	the	financial	assurance	requirements	related	to	contract	performance varies	by	contract.

Additionally,	we	are	required	to	provide	financial	assurance	for	our	insurance	program	and	collateral	for	certain	performance	obligations.	We	do	not	expect	a	material	increase	in	financial	assurance requirements	during	2010,	although	the	mix	of	financial	assurance	instruments	may	change.

These	financial	instruments	are	issued	in	the	normal	course	of	business	and	are	not	debt	of	our	company.	Since	we	currently	have	no	liability	for	these	financial	assurance	instruments,	they	are	not reflected	in	our	consolidated	balance	sheets.	However,	we	record	capping,	closure	and	post-closure	liabilities	and	self-insurance	liabilities	as	they	are	incurred.	The	underlying	obligations	of	the	financial assurance	instruments,	in	excess	of	those	already	reflected	in	our	consolidated	balance	sheets,	would	be	recorded	if	it	is	probable	that	we	would	be	unable	to	fulfill	our	related	obligations.	We	do	not expect	this	to	occur.

# Off-Balance	Sheet	Arrangements

We	have	no	off-balance	sheet	debt	or	similar	obligations,	other	than	financial	assurance	instruments	and	operating	leases	that	are	not	classified	as	debt.	We	do	not	guarantee	any	third-party	debt.

# Free	Cash	Flow

We	define	free	cash	flow,	which	is	not	a	measure	determined	in	accordance	with	U.S.	GAAP,	as	cash	provided	by	operating	activities	less	purchases	of	property	and	equipment,	plus	proceeds	from	sales of	property	and	equipment	as	presented	in	our	consolidated	statements	of	cash	flows.

Our	free	cash	flow	for	the	years	ended	December	31,	2009,	2008	and	2007	is	calculated	as	follows	(in	millions):

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Cash\tprovided\tby\toperating\tactivities | $\t1,396.5 | $\t512.2 | $\t661.3 |
| Purchases\tof\tproperty\tand\tequipment | (826.3) | (386.9) | (292.5) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 31.8 | 8.2 | 6.1 |
| Free\tcash\tflow | $602.0 | $133.5 | $374.9 |

For	a	discussion	of	the	changes	in	the	components	of	free	cash	flow,	you	should	read	our	discussion	regarding	Cash	Flows	Provided	By	Operating	Activities	and	Cash	Flows	Used	In	Investing	Activities contained	elsewhere	herein.

Purchases	of	property	and	equipment	as	reflected	in	our	consolidated	statements	of	cash	flows	and	as	presented	in	the	free	cash	flow	table	above	represent	amounts	paid	during	the	period	for	such expenditures.	A	reconciliation	of	property	and	equipment	reflected	in	the	consolidated	statements	of	cash	flows	to	property	and	equipment	received	during	the	period	for	the	years	ended	December	31, 2009,	2008	and	2007	is	as	follows	(in	millions):

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Purchases\tof\tproperty\tand\tequipment\tper\tthe\tconsolidated\tstatements\tof\tcash\tflows | $\t826.3 | $\t386.9 | $\t292.5 |
| Adjustments\tfor\tproperty\tand\tequipment\treceived\tduring\tthe\tprior\tperiod\tbut\tpaid\tfor\tin\tthe\tfollowing\tperiod,\tnet | 36.3 | (14.9) | 3.2 |
| Property\tand\tequipment\treceived\tduring\tthe\tperiod | $862.6 | $372.0 | $295.7 |

The	adjustments	noted	above	do	not	affect	our	net	change	in	cash	and	cash	equivalents	as	reflected	in	our	consolidated	statements	of	cash	flows.

We	believe	that	the	presentation	of	free	cash	flow	provides	useful	information	regarding	our	recurring	cash	provided	by	operating	activities	after	expenditures	for	property	and	equipment	received,	plus proceeds	from	sales	of	property	and	equipment.	It	also	demonstrates	our	ability	to	execute	our	financial	strategy	which	includes	reinvesting	in	existing	capital	assets	to	ensure	a	high	level	of	customer service,	investing	in	capital	assets	to	facilitate	growth	in	our	customer	base	and	services	provided,	maintaining	our	investment	grade	rating	and	minimizing	debt,	paying	cash	dividends,	and	maintaining and	improving	our	market	position	through	business	optimization.	In	addition,	free	cash	flow	is	a	key	metric	used	to	determine	compensation.	The	presentation	of	free	cash	flow	has	material	limitations. Free	cash	flow	does	not	represent	our	cash	flow	available	for	discretionary	expenditures	because	it	excludes	certain	expenditures	that	are	required	or	that	we	have	committed	to	such	as	debt	service requirements	and	dividend	payments.	Our	definition	of	free	cash	flow	may	not	be	comparable	to	similarly	titled	measures	presented	by	other	companies.

# Contingencies

For	a	description	of	our	contingencies,	see	Note	10,	Income	Taxes,	and	Note	16,	Commitments	and	Contingencies,	to	our	consolidated	financial	statements	included	under	Item	8	of	this	Annual	Report	on Form	10-K.

# Critical	Accounting	Judgments	and	Estimates

Our	consolidated	financial	statements	have	been	prepared	in	accordance	with	U.S.	GAAP	and	necessarily	include	certain	estimates	and	judgments	made	by	management.	The	following	is	a	list	of accounting	policies	that	we	believe	are	the	most	critical	in	understanding	our	consolidated	financial	position,	results	of	operations	or	cash	flows	and	that	may	require	management	to	make	subjective	or complex	judgments	about	matters	that	are	inherently	uncertain.	Such	critical	accounting	policies,	estimates	and	judgments	are	applicable	to	all	of	our	operating	segments.

We	have	noted	examples	of	the	residual	accounting	and	business	risks	inherent	in	the	accounting	for	these	areas.	Residual	accounting	and	business	risks	are	defined	as	the	inherent	risks	that	we	face	after the	application	of	our	policies	and	processes	that	are	generally	outside	of	our	control	or	ability	to	forecast.

# Accounting	for	the	Acquisition	of	Allied

Acquisitions	of	businesses	are	accounted	for	using	the	purchase	method	of	accounting.	The	purchase	method	of	accounting	requires	that	the	purchase	price	paid	for	an	acquisition	be	allocated	to	the	assets acquired	and	liabilities	assumed	based	on	their	estimated	fair	values	as	of	the	effective	date	of	the	acquisition,	with	the

excess	of	the	purchase	price	over	the	net	assets	acquired	being	recorded	as	goodwill.	The	consolidated	financial	statements	of	the	acquirer	include	the	operating	results	of	the	acquired	business	from	the date	of	the	acquisition,	and	are	not	retroactively	restated	to	include	the	historical	position	or	the	results	of	operations	of	the	acquired	business.	These	estimates	are	revised	during	the	allocation	period when	the	information	necessary	to	finalize	the	fair	value	estimates	is	received	and	analyzed,	or	if	information	regarding	contingencies	becomes	available	to	further	define	and	quantify	the	assets	and liabilities	acquired.

We	have	completed	valuing	all	of	the	assets	acquired	and	liabilities	assumed	in	our	acquisition	of	Allied.	Adjustments,	if	any,	to	our	estimates	of	fair	values	and	the	resulting	purchase	price	allocation	in future	periods	will	be	reflected	in	our	consolidated	statement	of	income.	The	significant	areas	of	accounting	where	estimates	of	fair	values	are	reflected	in	our	consolidated	financial	statements	include landfills	and	other	property	and	equipment,	other	intangible	assets,	landfill	asset	retirement	obligations,	legal	and	environmental	reserves,	self-insurance	reserves,	income	taxes,	other	non-current	assets and	long-term	obligations,	and	assets	held	for	sale.	Our	consolidated	financial	statements	also	include	our	estimates	of	restructuring	costs	incurred	through	December	31,	2009,	a	portion	of	which	will	be paid	in	future	periods.

# Residual	risks:

The	residual	risks	identified	below	related	to	critical	accounting	judgments	and	estimates	are	relevant	to	the	fair	value	estimation	processes	for	acquisitions.	For	discussion	of	other	significant	residual risks	inherent	in	the	accounting	for	acquisitions,	see	Item	1A.	Risk	Factors.

# Landfill	Accounting

Landfill	operating	costs	are	treated	as	period	expenses	and	are	not	discussed	further	herein.

Our	landfill	assets	and	liabilities	fall	into	the	following	two	categories,	each	of	which	requires	accounting	judgments	and	estimates:

•		Landfill	development	costs	that	are	capitalized	as	an	asset.

•		Landfill	retirement	obligations	relating	to	our	capping,	closure	and	post-closure	liabilities	which	result	in	a	corresponding	landfill	retirement	asset.

# Landfill	Development	Costs

We	use	life-cycle	accounting	and	the	units-of-consumption	method	to	recognize	landfill	development	costs	over	the	life	of	the	site.	In	life-cycle	accounting,	all	costs	to	acquire	and	construct	a	site	are capitalized,	and	charged	to	expense	based	on	the	consumption	of	cubic	yards	of	available	airspace.	Obligations	associated	with	final	capping,	closure	and	post-closure	are	also	capitalized,	and	amortized on	a	units-of-consumption	basis	as	airspace	is	consumed.	Cost	and	airspace	estimates	are	developed	at	least	annually	by	engineers.

Site	permits.	In	order	to	develop,	construct	and	operate	a	landfill,	we	are	required	to	obtain	permits	from	various	regulatory	agencies	at	the	local,	state	and	federal	levels.	The	permitting	process	requires an	initial	site	study	to	determine	whether	the	location	is	feasible	for	landfill	operations.	The	initial	studies	are	reviewed	by	our	environmental	management	group	and	then	submitted	to	the	regulatory agencies	for	approval.	During	the	development	stage	we	capitalize	certain	costs	that	we	incur	after	site	selection	but	prior	to	the	receipt	of	all	required	permits	if	we	believe	that	it	is	probable	that	the	site will	be	permitted.

•		Changes	in	legislative	or	regulatory	requirements	may	cause	changes	to	the	landfill	site	permitting	process.	These	changes	could	make	it	more	difficult	and	costly	to	obtain	and	maintain	a landfill	permit.

•		Studies	performed	could	be	inaccurate,	which	could	result	in	the	denial	or	revocation	of	a	permit	and	changes	to	accounting	assumptions.	Conditions	could	exist	that	were	not	identified	in the	study,	which	may	make	the	location	not	feasible	for	a	landfill	and	could	result	in	the	denial	of	a	permit.	Denial	or	revocation	of	a	permit	could	impair	the	recorded	value	of	the	landfill asset.

•		Actions	by	neighboring	parties,	private	citizen	groups	or	others	to	oppose	our	efforts	to	obtain,	maintain	or	expand	permits	could	result	in	denial,	revocation	or	suspension	of	a	permit,	which could	adversely	impact	the	economic	viability	of	the	landfill	and	could	impair	the	recorded	value	of	the	landfill.	As	a	result	of	opposition	to	our	obtaining	a	permit,	improved	technical information	as	a	project	progresses,	or	changes	in	the	anticipated	economics	associated	with	a	project,	we	may	decide	to	reduce	the	scope	of	or	abandon	a	project,	which	could	result	in	an asset	impairment.

Technical	landfill	design.	Upon	receipt	of	initial	regulatory	approval,	technical	landfill	designs	are	prepared.	The	technical	designs,	which	include	the	detailed	specifications	to	develop	and	construct	all components	of	the	landfill,	including	the	types	and	quantities	of	materials	that	will	be	required,	are	reviewed	by	our	environmental	management	group.	The	technical	designs	are	submitted	to	the regulatory	agencies	for	approval.	Upon	approval	of	the	technical	designs,	the	regulatory	agencies	issue	permits	to	develop	and	operate	the	landfill.

•		Changes	in	legislative	or	regulatory	requirements	may	require	changes	in	the	landfill	technical	design.	These	changes	could	make	it	more	difficult	and	costly	to	meet	new	design	standards.

•		Technical	design	requirements,	as	approved,	may	need	modifications	at	some	future	point	in	time.

•		Technical	designs	could	be	inaccurate	and	could	result	in	increased	construction	costs,	difficulty	in	obtaining	a	permit	or	the	use	of	rates	to	recognize	the	amortization	of	landfill development	costs	and	asset	retirement	obligations	that	are	not	appropriate.

Permitted	and	probable	landfill	disposal	capacity.	Included	in	the	technical	designs	are	factors	that	determine	the	ultimate	disposal	capacity	of	the	landfill.	These	factors	include	the	area	over	which	the landfill	will	be	developed,	such	as	the	depth	of	excavation,	the	height	of	the	landfill	elevation	and	the	angle	of	the	side-slope	construction.	The	disposal	capacity	of	the	landfill	is	calculated	in	cubic	yards. This	measurement	of	volume	is	then	converted	to	a	disposal	capacity	expressed	in	tons	based	on	a	site-specific	expected	density	to	be	achieved	over	the	remaining	operating	life	of	the	landfill.

•		Estimates	of	future	disposal	capacity	may	change	as	a	result	of	changes	in	legislative	or	regulatory	design	requirements.

•		The	density	of	waste	may	vary	due	to	variations	in	operating	conditions,	including	waste	compaction	practices,	site	design,	climate	and	the	nature	of	the	waste.

•		Capacity	is	defined	in	cubic	yards	but	waste	received	is	measured	in	tons.	The	number	of	tons	per	cubic	yard	varies	by	type	of	waste.

Development	costs.	The	types	of	costs	that	are	detailed	in	the	technical	design	specifications	generally	include	excavation,	natural	and	synthetic	liners,	construction	of	leachate	collection	systems, installation	of	methane	gas	collection	systems	and	monitoring	probes,	installation	of	groundwater	monitoring	wells,	construction	of	leachate	management	facilities	and	other	costs	associated	with	the development	of	the	site.	We	review	the	adequacy	of	our	cost	estimates	on	an	annual	basis	by	comparing	estimated	costs	with	third-party	bids	or	contractual	arrangements,	reviewing	the	changes	in	year over	year	cost	estimates	for	reasonableness,	and	comparing	our	resulting	development	cost	per	acre	with	prior	period	costs.	These	development	costs,	together	with	any	costs	incurred	to	acquire,	design and	permit	the	landfill,	including	capitalized	interest,	are	recorded	to	the	landfill	asset	on	the	balance	sheet	as	incurred.

Residual	risk:

•		Actual	future	costs	of	construction	materials	and	third-party	labor	could	differ	from	the	costs	we	have	estimated	because	of	the	availability	of	the	required	materials	and	labor.	Technical designs	could	be	altered	due	to	unexpected	operating	conditions,	regulatory	changes	or	legislative	changes.

Landfill	development	asset	amortization.	In	order	to	match	the	expense	related	to	the	landfill	asset	with	the	revenue	generated	by	the	landfill	operations,	we	amortize	the	landfill	development	asset	over	its operating	life	on	a	per-ton	basis	as	waste	is	accepted	at	the	landfill.	The	landfill	asset	is	fully	amortized	at	the	end	of	a	landfill's	operating	life.	The	per-ton	rate	is	calculated	by	dividing	the	sum	of	the landfill	development	asset	net	book	value	plus	estimated	future	development	costs	(as	described	above)	for	the	landfill	by	the	landfill's	estimated	remaining	disposal	capacity.	The	expected	future development	costs	are	not	inflated	or	discounted,	but	rather	expressed	in	nominal	dollars.	This	rate	is	applied	to	each	ton	accepted	at	the	landfill	to	arrive	at	amortization	expense	for	the	period.

Amortization	rates	are	influenced	by	the	original	cost	basis	of	the	landfill,	including	acquisition	costs,	which	in	turn	is	determined	by	geographic	location	and	market	values.	We	secure	significant	landfill assets	through	business	acquisitions	and	value	them	at	the	time	of	acquisition	based	on	fair	value.	Amortization	rates	are	also	influenced	by	site-specific	engineering	and	cost	factors.

•		Changes	in	our	future	development	cost	estimates	or	our	disposal	capacity	will	normally	result	in	a	change	in	our	amortization	rates	and	will	impact	amortization	expense	prospectively.	An unexpected	significant	increase	in	estimated	costs	or	reduction	in	disposal	capacity	could	affect	the	ongoing	economic	viability	of	the	landfill	and	result	in	asset	impairment.

On	at	least	an	annual	basis,	we	update	the	estimates	of	future	development	costs	and	remaining	disposal	capacity	for	each	landfill.	These	costs	and	disposal	capacity	estimates	are	reviewed	and	approved by	senior	operations	management	annually.	Changes	in	cost	estimates	and	disposal	capacity	are	reflected	prospectively	in	the	landfill	amortization	rates	that	are	updated	annually.

# Landfill	Asset	Retirement	Obligations

We	have	two	types	of	retirement	obligations	related	to	landfills:	(1)	capping	and	(2)	closure	and	post-closure.

Obligations	associated	with	final	capping	activities	that	occur	during	the	operating	life	of	the	landfill	are	recognized	on	a	units-of-consumption	basis	as	airspace	is	consumed	within	each	discrete	capping event.	Obligations	related	to	closure	and	post-closure	activities	that	occur	after	the	landfill	has	ceased	operations	are	recognized	on	a	units-of-consumption	basis	as	airspace	is	consumed	throughout	the entire	life	of	the	landfill.	Landfill	retirement	obligations	are	capitalized	as	the	related	liabilities	are	recognized	and	amortized	using	the	units-of-consumption	method	over	the	airspace	consumed	within the	capping	event	or	the	airspace	consumed	within	the	entire	landfill,	depending	on	the	nature	of	the	obligation.	All	obligations	are	initially	measured	at	estimated	fair	value.	Fair	value	is	calculated	on	a present	value	basis	using	an	inflation	rate	and	our	credit-adjusted,	risk-free	rate	in	effect	at	the	time	the	liabilities	were	incurred.	Future	costs	for	final	capping,	closure	and	post-closure	are	developed	at least	annually	by	engineers,	and	are	inflated	to	future	value	using	estimated	future	payment	dates	and	inflation	rate	projections.

Landfill	capping.	As	individual	areas	within	each	landfill	reach	capacity,	we	are	required	to	cap	and	close	the	areas	in	accordance	with	the	landfill	site	permit.	These	requirements	are	detailed	in	the technical	design	of	the	landfill	site	process	previously	described.

Closure	and	post-closure.	Closure	costs	are	costs	incurred	after	a	landfill	site	stops	receiving	waste,	but	prior	to	being	certified	as	closed.	After	the	entire	landfill	site	has	reached	capacity	and	is	certified closed,	we	are	required	to	maintain	and	monitor	the	site	for	a	post-closure	period,	which	generally	extends	for	30	years.	Costs	associated	with	closure	and	post-closure	requirements	generally	include maintenance	of	the	site	and	the	monitoring	of	methane	gas	collection	systems	and	groundwater	systems,	and	other	activities	that	occur	after	the	site	has	ceased	accepting	waste.	Costs	associated	with	post- closure	monitoring	generally	include	groundwater	sampling,	analysis	and	statistical	reports,	third-party	labor	associated	with	gas	system	operations	and	maintenance,	transportation	and	disposal	of leachate,	and	erosion	control	costs	related	to	the	final	cap.

The	initial	liabilities	recorded	as	part	of	our	acquisition	of	Allied	were	recorded	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we	gathered	and	assessed	new information	obtained	about	the	facts	and	circumstances	surrounding	our	remediation	sites,	and	as	a	result	increased	the	fair	value	of	our	closure	and	post-closure	reserves	by	$72.3	million.	Any	further adjustments	to	our	reserves

resulting	in	changes	in	estimate	or	settlements	will	be	reflected	in	our	consolidated	statement	of	income	in	the	periods	in	which	such	adjustments	become	known.

Landfill	retirement	obligation	liabilities	and	assets.	Estimates	of	the	total	future	costs	required	to	cap,	close	and	monitor	the	landfill	as	specified	by	each	landfill	permit	are	updated	annually.	The estimates	include	inflation,	the	specific	timing	of	future	cash	outflows,	and	the	anticipated	waste	flow	into	the	capping	events.	Our	cost	estimates	are	inflated	to	the	period	of	performance	using	an estimate	of	inflation,	which	is	updated	annually	(2.5%	in	both	2009	and	2008).

The	present	value	of	the	remaining	capping	costs	for	specific	capping	events	and	the	remaining	closure	and	post-closure	costs	for	the	landfill	are	recorded	as	incurred	on	a	per-ton	basis.	These	liabilities are	incurred	as	disposal	capacity	is	consumed	at	the	landfill.

Capping,	closure	and	post-closure	liabilities	are	recorded	in	layers	and	discounted	using	our	credit-adjusted	risk-free	rate	in	effect	at	the	time	the	obligation	is	incurred	(7.5%	in	2009	and	6.6%	in	2008).

Retirement	obligations	are	increased	each	year	to	reflect	the	passage	of	time	by	accreting	the	balance	at	the	same	credit-adjusted	risk-free	rate	that	was	used	to	calculate	each	layer	of	the	recorded liabilities.	This	accretion	expense	is	charged	to	operating	expenses.	Actual	cash	expenditures	reduce	the	asset	retirement	obligation	liabilities	as	they	are	made.

Corresponding	retirement	obligation	assets	are	recorded	for	the	same	value	as	the	additions	to	the	capping,	closure	and	post-closure	liabilities.	The	retirement	obligation	assets	are	amortized	to	expense on	a	per-ton	basis	as	disposal	capacity	is	consumed.	The	per-ton	rate	is	calculated	by	dividing	the	sum	of	each	of	the	recorded	retirement	obligation	asset's	net	book	value	and	expected	future	additions	to the	retirement	obligation	asset	by	the	remaining	disposal	capacity.	A	per-ton	rate	is	determined	for	each	separate	capping	event	based	on	the	disposal	capacity	relating	to	that	event.	Closure	and	post- closure	per-ton	rates	are	based	on	the	total	disposal	capacity	of	the	landfill.

•		Changes	in	legislative	or	regulatory	requirements,	including	changes	in	capping,	closure	activities	or	post-closure	monitoring	activities,	types	and	quantities	of	materials	used,	or	term	of post-closure	care,	could	cause	changes	in	our	cost	estimates.

•		Changes	in	the	landfill	retirement	obligation	due	to	changes	in	the	anticipated	waste	flow,	changes	in	airspace	compaction	estimates	or	changes	in	the	timing	of	expenditures	for	closed landfills	and	fully	incurred	but	unpaid	capping	events	are	recorded	in	results	of	operations	prospectively.	This	could	result	in	unanticipated	increases	or	decreases	in	expense.

•		Actual	timing	of	disposal	capacity	utilization	could	differ	from	projected	timing,	causing	differences	in	timing	of	when	amortization	and	accretion	expense	is	recognized	for	capping, closure	and	post-closure	liabilities.

•		Changes	in	inflation	rates	could	impact	our	actual	future	costs	and	our	total	liabilities.

•		Changes	in	our	capital	structure	or	market	conditions	could	result	in	changes	to	the	credit-adjusted	risk-free	rate	used	to	discount	the	liabilities,	which	could	cause	changes	in	future	recorded liabilities,	assets	and	expense.

•		Amortization	rates	could	change	in	the	future	based	on	the	evaluation	of	new	facts	and	circumstances	relating	to	landfill	capping	design,	post-closure	monitoring	requirements,	or	the inflation	or	discount	rate.

On	an	annual	basis,	we	update	our	estimates	of	future	capping,	closure	and	post-closure	costs	and	of	future	disposal	capacity	for	each	landfill.	Revisions	in	estimates	of	our	costs	or	timing	of	expenditures are	recognized	immediately	as	increases	or	decreases	to	the	capping,	closure	and	post-closure	liabilities	and	the	corresponding	retirement	obligation	assets.	Changes	in	the	assets	result	in	changes	to	the amortization	rates	which	are	applied	prospectively,	except	for	fully	incurred	capping	events	and	closed	landfills,	where	the	changes	are	recorded	immediately	in	results	of	operations	since	the	associated disposal	capacity	has	already	been	consumed.

In	connection	with	the	2008	annual	review	of	our	calculations	with	respect	to	landfill	asset	retirement	obligations,	we	made	a	change	in	estimate,	which	is	considered	to	be	a	change	in	accounting estimate	that	is	effected	by	a	change	in	accounting	principle.	This	change,	which	we	believe	is	preferable,	was	made	to	better

align	the	estimated	amount	of	waste	placed	in	an	area	to	be	capped	(which	is	used	to	calculate	our	capping	rates)	with	the	physical	operation	of	our	landfills.	The	expected	costs	related	to	our	capping events	did	not	change	and	we	will	continue	to	use	separate	rates	for	each	capping	event.	This	change	resulted	in	a	$32.6	million	decrease	in	our	capping	asset	retirement	obligations	and	related	assets.

These	assets	will	be	amortized	to	expense	prospectively	as	a	change	in	estimate.	This	change	in	estimate	will	not	have	a	material	impact	on	our	consolidated	financial	position,	results	of	operations	or	cash flows.

Permitted	and	probable	disposal	capacity.	As	described	previously,	disposal	capacity	is	determined	by	the	specifications	detailed	in	the	landfill	permit.	We	classify	this	disposal	capacity	as	permitted.

We	also	include	probable	expansion	disposal	capacity	in	our	remaining	disposal	capacity	estimates,	thus	including	additional	disposal	capacity	being	sought	through	means	of	a	permit	expansion. Probable	expansion	disposal	capacity	has	not	yet	received	final	approval	from	the	applicable	regulatory	agencies,	but	we	have	determined	that	certain	critical	criteria	have	been	met	and	the	successful completion	of	the	expansion	is	probable.	We	have	developed	six	criteria	that	must	be	met	before	an	expansion	area	is	designated	as	probable	expansion	airspace.	We	believe	that	satisfying	all	of	these criteria	demonstrates	a	high	likelihood	that	expansion	airspace	that	is	incorporated	in	our	landfill	costing	will	be	permitted.	However,	because	some	of	these	criteria	are	judgmental,	they	may	exclude expansion	airspace	that	will	eventually	be	permitted	or	include	expansion	airspace	that	will	not	be	permitted.	In	either	of	these	scenarios,	our	amortization,	depletion	and	accretion	expense	could	change significantly.	Our	internal	criteria	to	classify	disposal	capacity	as	probable	expansion	are	as	follows:

•		We	own	the	land	associated	with	the	expansion	airspace	or	control	it	pursuant	to	an	option	agreement;

•		We	are	committed	to	supporting	the	expansion	project	financially	and	with	appropriate	resources;

•		There	are	no	identified	fatal	flaws	or	impediments	associated	with	the	project,	including	political	impediments;

•		Progress	is	being	made	on	the	project;

•		The	expansion	is	attainable	within	a	reasonable	time	frame;	and

•		We	believe	it	is	likely	the	expansion	permit	will	be	received.

After	successfully	meeting	these	criteria,	the	disposal	capacity	that	will	result	from	the	planned	expansion	is	included	in	our	remaining	disposal	capacity	estimates.	Additionally,	for	purposes	of calculating	landfill	amortization	and	capping,	closure	and	post-closure	rates,	we	include	the	incremental	costs	to	develop,	construct,	close	and	monitor	the	related	probable	expansion	disposal	capacity. Residual	risk:

•		We	may	be	unsuccessful	in	obtaining	permits	for	probable	expansion	disposal	capacity	because	of	the	failure	to	obtain	the	final	local,	state	or	federal	permits	or	due	to	other	unknown reasons.	If	we	are	unsuccessful	in	obtaining	permits	for	probable	expansion	disposal	capacity,	or	the	disposal	capacity	for	which	we	obtain	approvals	is	less	than	what	was	estimated,	both our	estimated	total	costs	and	disposal	capacity	will	be	reduced,	which	generally	increases	the	rates	we	charge	for	landfill	amortization	and	capping,	closure	and	post-closure	accruals.	An unexpected	decrease	in	disposal	capacity	could	also	cause	an	asset	impairment.

# Environmental	Liabilities

We	are	subject	to	an	array	of	laws	and	regulations	relating	to	the	protection	of	the	environment,	and	we	remediate	sites	in	the	ordinary	course	of	our	business.	Under	current	laws	and	regulations,	we	may be	responsible	for	environmental	remediation	at	sites	that	we	either	own	or	operate,	including	sites	that	we	have	acquired,	or	sites	where	we	have	(or	a	company	that	we	have	acquired	has)	delivered waste.	Our	environmental	remediation	liabilities	primarily	include	costs	associated	with	remediating	groundwater,	surface	water	and	soil	contamination,	as	well	as	controlling	and	containing	methane	gas migration	and	the	related	legal	costs.	To	estimate	our	ultimate	liability	at	these	sites,	we	evaluate	several	factors,	including	the	nature	and	extent	of	contamination	at	each	identified	site,	the	required remediation	methods,	the	apportionment	of	responsibility	among	the	potentially	responsible	parties	and	the	financial	viability	of	those	parties.	We	accrue	for	costs	associated	with	environmental remediation	obligations	when	such	costs	are	probable	and	reasonably	estimable

in	accordance	with	accounting	for	loss	contingencies.	We	periodically	review	the	status	of	all	environmental	matters	and	update	our	estimates	of	the	likelihood	of	and	future	expenditures	for	remediation as	necessary.	Changes	in	the	liabilities	resulting	from	these	reviews	are	recognized	currently	in	earnings	in	the	period	in	which	the	adjustment	is	known.	Adjustments	to	estimates	are	reasonably	possible in	the	near	term	and	may	result	in	changes	to	recorded	amounts.	We	have	not	reduced	the	liabilities	we	have	recorded	for	recoveries	from	other	potentially	responsible	parties	or	insurance	companies.

The	environmental	liabilities	assumed	from	Allied	relate	to	impacts	at	both	owned	and	unowned	sites.	In	the	case	of	owned	sites,	we	are	actively	working	with	the	appropriate	regulatory	entity	under	the applicable	regulations	(typically	RCRA	or	CERCLA)	to	characterize	and	remediate	potential	issues.	At	unowned	sites,	we	are	working	within	the	regulatory	and	procedural	framework	established	by CERCLA	to	characterize	and	remediate	potential	issues,	in	conjunction	with	other	potentially	liable	parties	at	each	location.	Pursuant	to	the	purchase	method	of	accounting,	we	have	recorded	the environmental	remediation	liabilities	assumed	from	Allied	based	upon	estimates	of	their	fair	value,	using	an	estimate	of	future	cash	flows	or	settlement.	Previously,	and	consistent	with	our	method	of accounting,	Allied	recorded	remediation	liabilities	based	upon	accounting	for	loss	contingencies,	however,	amounts	recorded	under	this	method	are	generally	not	at	fair	value.

Since	the	date	of	acquisition,	our	process	for	deriving	fair	value	for	the	environmental	liabilities	assumed	from	Allied	included	first	identifying	the	population	of	remediation	sites	where	we	are	either fully	or	partially	responsible	for	remediation	or	potential	remediation.	The	population	of	remediation	sites	was	then	stratified	into	categories	based	on	(i)	the	maturity	of	the	issue	relative	to	recognized stages	in	the	applicable	regulation	(typically	CERCLA	or	RCRA)	and	(ii)	the	extent	of	our	participation	in	the	remediation	activity.	Using	these	categories,	we	applied	one	of	the	following	multiple estimation	processes	to	quantify	fair	value:

•		For	sites	with	established	responsibility	but	a	high	level	of	uncertainty	with	the	outcome	of	the	remedial	process,	we	developed	multiple	remediation	scenarios.	We	then	probability weighted	the	remediation	scenarios	to	develop	a	fair	value	estimate.

•		For	sites	where	the	level	of	responsibility	was	less	defined,	we	developed	a	fair	value	estimate	of	the	settlement	costs	based	upon	market	participant	assessments	from	external	legal	counsel.

•		For	sites	which	we	own	and	are	in	the	earliest	stages	of	the	remedial	process,	we	identified	the	most	applicable	standard	remedial	techniques	and	then	probability	weighted	the	use	of	each technique	to	develop	a	fair	value	estimate.

•		For	the	remaining	sites	with	low	levels	of	uncertainty,	we	developed	a	primary	remedial	strategy	and	cost	estimate	to	determine	the	fair	value	of	the	liability.

The	initial	liabilities	recorded	as	part	of	our	acquisition	of	Allied	were	recorded	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we	gathered	and	assessed	new information	obtained	about	the	facts	and	circumstances	surrounding	Allied's	remediation	sites.	In	certain	situations,	we	used	external	engineers	and	attorneys	to	assist	in	the	development	of	our	fair	value estimates.	As	a	result	of	the	process,	we	increased	the	fair	value	of	our	remediation	reserves	by	$181.9	million.	Any	further	adjustments	to	our	remediation	reserves	resulting	from	changes	in	estimates	or reserve	settlements	will	be	reflected	currently	in	earnings	in	the	periods	in	which	such	adjustments	become	known.

•		We	cannot	determine	with	precision	the	ultimate	amounts	of	our	environmental	remediation	liabilities.	Our	estimates	of	these	liabilities	require	assumptions	about	future	events	that	are uncertain.	Consequently,	our	estimates	could	change	substantially	as	additional	information	becomes	available	regarding	the	nature	or	extent	of	contamination,	the	required	remediation methods,	the	final	apportionment	of	responsibility	among	the	potentially	responsible	parties	identified,	the	financial	viability	of	those	parties,	and	the	actions	of	governmental	agencies	or private	parties	with	interests	in	the	matter.

•		Actual	amounts	could	differ	from	the	estimated	liabilities	as	a	result	of	changes	in	estimated	future	litigation	costs	to	pursue	the	matter	to	ultimate	resolution.

•		An	unanticipated	environmental	liability	that	arises	could	result	in	a	material	charge	to	our	consolidated	statement	of	income.

# Self-Insurance	Reserves	and	Related	Costs

Our	insurance	programs	for	workers'	compensation,	general	liability,	vehicle	liability	and	employee-related	health	care	benefits	are	effectively	self-insured.	Accruals	for	self-insurance	reserves	are	based on	claims	filed	and	estimates	of	claims	incurred	but	not	reported.	We	maintain	high	deductibles	for	commercial	general	liability,	automobile	liability	and	workers'	compensation	coverage,	ranging	from $1.0	million	to	$3.0	million.

•		Incident	rates,	including	frequency	and	severity,	and	other	actuarial	assumptions	could	change	causing	our	current	and	future	actuarially	determined	obligations	to	change,	which	would	be reflected	in	our	consolidated	statement	of	income	in	the	period	in	which	such	adjustment	is	known.

•		It	is	possible	that	recorded	reserves	may	not	be	adequate	to	cover	the	future	payment	of	claims.	Adjustments,	if	any,	to	estimates	recorded	resulting	from	ultimate	claim	payments	would	be reflected	in	the	consolidated	statements	of	income	in	the	periods	in	which	such	adjustments	are	known.

•		The	settlement	costs	to	discharge	our	obligations,	including	legal	and	health	care	costs,	could	increase	or	decrease	causing	current	estimates	of	our	self-insurance	reserves	to	change.

# Loss	Contingencies

We	are	subject	to	various	legal	proceedings,	claims	and	regulatory	matters,	the	outcomes	of	which	are	subject	to	significant	uncertainty.	We	determine	whether	to	disclose	or	accrue	for	loss	contingencies based	on	an	assessment	of	whether	the	risk	of	loss	is	remote,	reasonably	possible	or	probable,	and	whether	it	can	be	reasonably	estimated.	We	analyze	our	litigation	and	regulatory	matters	based	on available	information	to	assess	the	potential	liabilities.	Management's	assessment	is	developed	based	on	an	analysis	of	possible	outcomes	under	various	strategies.	We	record	and	disclose	loss contingencies	pursuant	to	the	applicable	accounting	guidance	for	such	matter.

We	record	losses	related	to	contingencies	in	cost	of	operations	or	selling,	general	and	administrative	expenses,	depending	on	the	nature	of	the	underlying	transaction	leading	to	the	loss	contingency. Residual	risks:

•		Actual	costs	can	vary	from	our	estimates	for	a	variety	of	reasons,	including	differing	interpretations	of	laws,	opinions	on	culpability	and	assessments	of	the	amount	of	damages.

•		Loss	contingency	assumptions	involve	judgments	that	are	inherently	subjective	and	generally	involve	business	matters	that	are	by	their	nature	unpredictable.	If	a	loss	contingency	results	in an	adverse	judgment	or	is	settled	for	significant	amounts,	it	could	have	a	material	adverse	impact	on	our	consolidated	financial	position,	result	of	operations	or	cash	flows	in	the	period	in which	such	judgment	or	settlement	occurs.

# Asset	Impairment

Valuation	methodology.	We	evaluate	our	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate	the	carrying	amount	of	the	asset	or	asset	group	may	not	be	recoverable based	on	projected	cash	flows	anticipated	to	be	generated	from	the	ongoing	operation	of	those	assets	or	we	intend	to	sell	or	otherwise	dispose	of	the	assets.

•		If	events	or	changes	in	circumstances	occur,	including	reductions	in	anticipated	cash	flows	generated	by	our	operations	or	determinations	to	divest	assets,	certain	assets	could	be	impaired which	would	result	in	a	non-cash	charge	to	earnings.

Evaluation	criteria.	We	test	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	amounts	of	the	assets	may	not	be	recoverable.	Examples	of	such events	could	include	a	significant	adverse	change	in	the	extent	or	manner	in	which	we	use	a	long-lived	asset,	a	change	in	its	physical	condition,	or	new	circumstances	that	could	cause	an	expectation	that it	is	more	likely	than	not	that	we	would	sell	or	otherwise	dispose	of	a	long-lived	asset	significantly	before	the	end	of	its	previously	estimated	useful	life.

•		Our	most	significant	asset	impairment	exposure,	other	than	goodwill	(which	is	discussed	below)	relates	to	our	landfills.	A	significant	reduction	in	our	estimated	disposal	capacity	as	a	result of	unanticipated	events	such	as	regulatory	developments,	revocation	of	an	existing	permit	or	denial	of	an	expansion	permit,	or	changes	in	our	assumptions	used	to	calculate	disposal capacity,	could	trigger	an	impairment	charge.

Recognition	criteria.	If	such	circumstances	arise,	we	recognize	impairment	for	the	difference	between	the	carrying	amount	and	fair	value	of	the	asset	if	the	net	book	value	of	the	asset	exceeds	the	sum	of the	estimated	undiscounted	cash	flows	expected	to	result	from	its	use	and	eventual	disposition.	We	generally	use	the	present	value	of	the	expected	cash	flows	from	that	asset	to	determine	fair	value.

# Goodwill	Recoverability

We	annually	test	goodwill	at	December	31	for	impairment	using	the	two-step	process.	The	first	step	is	a	screen	for	potential	impairment,	while	the	second	step	measures	the	amount	of	the	impairment,	if any.	The	first	step	of	the	goodwill	impairment	test	compares	the	fair	value	of	a	reporting	unit	with	its	carrying	amount,	including	goodwill.

We	have	defined	our	reporting	units	to	be	consistent	with	our	operating	segments:	Eastern,	Midwest,	Southern,	and	Western.	In	determining	fair	value,	we	primarily	utilize	discounted	future	cash	flows and	operating	results	based	on	a	comparative	multiple	of	earnings	or	revenues.

Significant	estimates	used	in	our	fair	value	calculation	utilizing	discounted	future	cash	flows	include,	but	are	not	limited	to:	(i)	estimates	of	future	revenue	and	expense	growth	by	reporting	unit,	which	we estimate	to	range	from	3%	to	5%;	(ii)	future	estimated	effective	tax	rates,	which	we	estimate	to	be	40%;	(iii)	future	estimated	capital	expenditures	as	well	as	future	required	investments	in	working capital;	(iv)	estimated	discount	rates,	which	we	estimate	to	range	between	8%	and	10%;	and	(v)	the	future	terminal	value	of	the	reporting	unit,	which	is	based	on	its	ability	to	exist	into	perpetuity. Significant	estimates	used	in	the	fair	value	calculation	utilizing	market	value	multiples	include	but	are	not	limited	to:	(i)	estimated	future	growth	potential	of	the	reporting	unit;	(ii)	estimated	multiples	of revenue	or	earnings	a	willing	buyer	is	likely	to	pay;	and	(iii)	estimated	control	premium	a	willing	buyer	is	likely	to	pay.

In	addition,	we	evaluate	a	reporting	unit	for	impairment	if	events	or	circumstances	change	between	annual	tests,	indicating	a	possible	impairment.	Examples	of	such	events	or	circumstances	include:	(i)	a significant	adverse	change	in	legal	factors	or	in	the	business	climate;	(ii)	an	adverse	action	or	assessment	by	a	regulator;	(iii)	a	more	likely	than	not	expectation	that	a	reporting	unit	or	a	significant	portion thereof	will	be	sold;	(iv)	continued	or	sustained	losses	at	a	reporting	unit;	(v)	a	significant	decline	in	our	market	capitalization	as	compared	to	our	book	value;	or	(vi)	the	testing	for	recoverability	of	a significant	asset	group	within	the	reporting	unit.

We	assign	assets	and	liabilities	from	our	corporate	reporting	segment	to	our	four	operating	segments	to	the	extent	that	such	assets	or	liabilities	relate	to	the	cash	flows	of	the	reporting	unit	and	would	be included	in	determining	the	reporting	unit's	fair	value.

In	preparing	our	annual	test	for	impairment	as	of	December	31,	2009,	we	determined	that	the	aggregate	sum	of	our	reporting	unit	fair	values	exceeded	our	market	capitalization.	We	determined	market capitalization	as	the	fair	value	of	our	common	shares	outstanding	at	the	closing	market	price	on	December	31,	2009.	We	believe	one	of	the	primary	reconciling	differences	between	fair	value	and	our market	capitalization	is	due	to	a

control	premium.	We	believe	the	control	premium	represents	the	value	a	market	participant	could	extract	as	savings	and	/	or	synergies	by	obtaining	control,	and	thereby	eliminating	duplicative	overhead and	operating	costs	resulting	from	the	consolidation	of	routes	and	internalization	of	waste	streams.

As	of	December	31,	2009,	we	determined	that	the	indicated	fair	value	of	our	reporting	units	exceeded	the	carrying	value	of	our	reporting	units	by	a	range	of	125%	to	150%	and,	as	such,	we	noted	no indicators	of	impairment	at	our	reporting	units.

We	will	continuously	monitor	market	trends	in	our	business,	the	related	expected	cash	flows	and	our	calculation	of	market	capitalization	for	purposes	of	identifying	possible	indicators	of	impairment.	If our	book	value	per	share	exceeds	our	market	price	per	share	or	if	we	have	other	indicators	of	impairment,	we	will	be	required	to	perform	an	interim	step	one	impairment	analysis,	which	may	lead	to	a	step two	analysis	and	possible	impairment	of	our	goodwill.	Additionally,	we	would	then	be	required	to	review	our	remaining	long-lived	assets	for	impairment.

Our	operating	segments,	which	also	represent	our	reporting	units,	are	comprised	of	several	vertically	integrated	businesses.	When	an	individual	business	within	an	integrated	operating	segment	is divested,	goodwill	is	allocated	to	that	business	based	on	its	fair	value	relative	to	the	fair	value	of	its	operating	segment.

•		Future	events	could	cause	us	to	conclude	that	impairment	indicators	exist	and	that	goodwill	associated	with	acquired	businesses	is	impaired.

•		The	valuation	of	identifiable	goodwill	requires	significant	estimates	and	judgment	about	future	performance,	cash	flows	and	fair	value.	Our	future	results	could	be	affected	if	these	current estimates	of	future	performance	and	fair	value	change.	For	example,	a	reduction	in	long-term	growth	assumptions	could	reduce	the	estimated	fair	value	of	the	operating	segments	to	below their	carrying	values,	which	could	trigger	an	impairment	charge.	Similarly,	an	increase	in	our	discount	rate	could	trigger	an	impairment	charge.	Any	resulting	impairment	charge	could have	a	material	adverse	impact	on	our	financial	condition	and	results	of	operations.

Deferred	tax	assets	and	liabilities	are	determined	based	on	differences	between	the	financial	reporting	and	income	tax	bases	of	assets	(other	than	non-deductible	goodwill)	and	liabilities.	Deferred	tax assets	and	liabilities	are	measured	using	the	income	tax	rate	in	effect	during	the	year	in	which	the	differences	are	expected	to	reverse.

We	record	net	deferred	tax	assets	to	the	extent	we	believe	these	assets	will	more	likely	than	not	be	realized.	In	making	this	determination,	we	consider	all	available	positive	and	negative	evidence, including	scheduled	reversals	of	deferred	tax	liabilities,	projected	future	taxable	income,	tax	planning	strategies	and	recent	financial	operations.	In	the	event	we	determine	that	we	would	be	able	to	realize our	deferred	income	tax	assets	in	the	future	in	excess	of	their	net	recorded	amount,	we	will	make	an	adjustment	to	the	valuation	allowance	which	would	reduce	our	provision	for	income	taxes.

Effective	January	1,	2007,	we	adopted	new	guidance	which	clarifies	the	accounting	for	uncertainty	in	income	taxes	recognized	in	the	financial	statements.	This	new	guidance	provides	that	a	tax	benefit from	an	uncertain	tax	position	may	be	recognized	when	it	is	more	likely	than	not	that	the	position	will	be	sustained	upon	examination,	including	resolutions	of	any	related	appeals	or	litigation	processes, based	on	the	technical	merits.	This	new	guidance	also	provides	guidance	on	measurement,	de-recognition,	classification,	interest	and	penalties,	and	accounting	in	interim	periods.

We	recognize	interest	and	penalties	related	to	uncertain	tax	positions	within	the	provision	for	income	taxes	in	our	consolidated	statements	of	income.	Accrued	interest	and	penalties	are	included	within other	accrued	liabilities	and	deferred	income	taxes	and	other	long-term	tax	liabilities	in	our	consolidated	balance	sheets.

•		Income	tax	assets	and	liabilities	established	in	purchase	accounting	for	acquisitions	are	based	on	assumptions	that	could	differ	from	the	ultimate	outcome	of	the	tax	matters.	Such adjustments	would	be	charged	or	credited	to	earnings,	unless	they	meet	certain	remeasurement	criteria	and	are	allowed	to	be	adjusted	to	goodwill.

•		Changes	in	the	estimated	realizability	of	deferred	tax	assets	could	result	in	adjustments	to	our	provision	for	income	taxes.

•		Valuation	allowances	for	deferred	tax	assets	and	the	realizability	of	net	operating	loss	carryforwards	for	tax	purposes	are	based	on	our	judgment.	If	our	judgments	and	estimates	concerning valuation	allowances	and	the	realizability	of	net	operating	loss	carryforwards	are	incorrect,	our	provision	for	income	taxes	would	change.

•		We	are	currently	under	examination	or	administrative	review	by	various	state	and	federal	taxing	authorities	for	certain	tax	years.	The	Internal	Revenue	Code	(IRC)	and	income	tax regulations	are	a	complex	set	of	rules	that	we	are	required	to	interpret	and	apply.	Positions	taken	in	tax	years	under	examination	or	subsequent	years	are	subject	to	challenge.	Accordingly, we	may	have	exposure	for	additional	tax	liabilities	arising	from	these	audits	if	any	positions	taken	by	us	or	by	companies	we	have	acquired	are	disallowed	by	the	taxing	authorities.

•		We	adjust	our	liabilities	for	uncertain	tax	positions	when	our	judgment	changes	as	a	result	of	the	evaluation	of	new	information	not	previously	available.	Due	to	the	complexity	of	some	of these	uncertainties,	their	ultimate	resolution	may	result	in	payments	that	are	materially	different	from	our	current	estimates	of	the	tax	liabilities.	These	differences	will	be	reflected	as increases	or	decreases	to	our	provision	for	income	taxes	in	the	period	in	which	they	are	determined.

# Defined	Benefit	Pension	Plans

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's	benefit	formula	is	based	on	a	percentage	of	compensation	as	defined	in	the	Plan	document.	The	benefits	of	approximately	97%	of	the	current	plan	participants	were frozen	upon	Allied's	acquisition	of	BFI	in	1999.

Our	pension	contributions	are	made	in	accordance	with	funding	standards	established	by	the	Employee	Retirement	Income	Security	Act	of	1974	and	IRC,	as	amended	by	the	Pension	Protection	Act	of 2006.	No	contributions	were	required	during	the	last	three	years	and	no	contributions	are	required	for	2010.

The	Plan's	assets	are	invested	as	determined	by	our	Retirement	Benefits	Committee.	At	December	31,	2009,	the	plan	assets	were	invested	in	fixed	income	bond	funds,	equity	funds	and	cash.	We annually	review	and	adjust	the	plan's	asset	allocation	as	deemed	necessary.

•		Changes	in	the	plan's	investment	mix	and	performance	of	the	equity	and	bond	markets	and	fund	managers	could	impact	the	amount	of	pension	income	or	expense	recorded,	the	funded status	of	the	plan	and	the	need	for	future	cash	contributions.

Assumptions.	The	benefit	obligation	and	associated	income	or	expense	related	to	the	Plan	are	determined	based	on	assumptions	concerning	items	such	as	discount	rates,	expected	rates	of	return	and average	rates	of	compensation	increases.	Our	assumptions	are	reviewed	annually	and	adjusted	as	deemed	necessary.

We	determine	the	discount	rate	based	on	a	model	which	matches	the	timing	and	amount	of	expected	benefit	payments	to	maturities	of	high	quality	bonds	priced	as	of	the	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	yield	on	the	bonds	is	used	to	derive	a discount	rate	for	the	liability.	If	the	discount	rate	increases	by	1%,	our	benefit	obligation	would	decrease	by	approximately	$31.5	million.	If

the	discount	rate	were	to	decrease	by	1%,	our	benefit	obligation	would	increase	by	approximately	$36.6	million.

In	developing	our	expected	rate	of	return	assumption,	we	evaluate	long-term	expected	and	historical	returns	on	the	Plan	assets,	giving	consideration	to	our	asset	mix	and	the	anticipated	duration	of	the Plan	obligations.	The	average	rate	of	compensation	increase	reflects	our	expectations	of	average	pay	increases	over	the	periods	benefits	are	earned.	Less	than	3%	of	participants	in	the	Plan	continue	to earn	service	benefits.

•		Our	assumed	discount	rate	is	sensitive	to	changes	in	market-based	interest	rates.	A	decrease	in	the	discount	rate	will	increase	our	related	benefit	plan	obligation.

•		Our	annual	pension	expense	would	be	impacted	if	the	actual	return	on	plan	assets	were	to	vary	from	the	expected	return.

# New	Accounting	Standards

For	a	description	of	the	new	accounting	standards	that	may	affect	us,	see	Note	2,	Summary	of	Significant	Accounting	Policies,	to	our	consolidated	financial	statements	included	in	Item	8	of	this Form	10-K.

# Interest	Rate	Risk

Our	major	market	risk	exposure	of	our	financial	instruments	is	changing	interest	rates	in	the	United	States	and	fluctuations	in	LIBOR.	We	intend	to	manage	interest	rate	risk	through	the	use	of	a combination	of	fixed	and	floating	rate	debt.	The	carrying	value	of	our	variable	rate	debt	approximates	fair	value	because	interest	rates	are	variable	and,	accordingly,	approximates	current	market	rates	for instruments	with	similar	risk	and	maturities.	The	fair	value	of	our	debt	is	determined	as	of	the	balance	sheet	date	and	is	subject	to	change.	The	table	below	provides	information	about	certain	of	our market-sensitive	financial	instruments	and	constitutes	a	"forward-looking	statement".

|  | 2010 |  | 2011 | 2012 |  | 2013 |  | 2014 |  | Thereafter |  | Total | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed\tRate\tDebt: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Amount\toutstanding\t(in\tmillions) | $250.3 |  | $871.6 | $29.9 |  | $5.3 |  | $440.7 |  | $4,404.0 |  | $6,001.8 | $6,205.4 |
| Average\tinterest\trates | 6.58% | 6.58% | 6.35% | 5.00% | 5.00% | 5.24 |  | 6.11% | 6.11% |  | 6.47% | 6.45% |  |
| Variable\tRate\tDebt |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Amount\toutstanding\t(in\tmillions) | $300.0 |  | $- | $- |  | $325.4 |  | $- |  | $802.9 |  | $1,428.3 | $1,428.3 |
| Average\tinterest\trates | 1.57% | 1.57% | - | - |  | 1.82% | 1.82% | - |  |  | 1.78% | 1.74% |  |
| Interest\tRate\tSwaps: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fixed\tto\tvariable\tnotional\tamount\t(in\tmillions) | $- |  | $210.0 | $- |  | $- |  | $- |  | $- |  | $210.0 | $9.9 |
| Average\tpay\trate | - | % | 2.57% | - | % | - | % | - | % | - | % | 2.57% |  |
| Average\treceive\trate | - | % | 6.75% | - | % | - | % | - | % | - | % | 6.75% |  |

The	fixed	and	variable	rate	debt	amounts	above	exclude	non-cash	discounts,	premiums,	adjustments	to	fair	value	related	to	hedging	transactions	and	adjustments	to	fair	value	recorded	in	purchase accounting	totaling	$467.5	million.

# Fuel	Price	Risk

Fuel	costs	represent	a	significant	operating	expense.	When	economically	practical,	we	may	enter	into	new	or	renewal	contracts,	or	engage	in	other	strategies	to	mitigate	market	risk.	Where	appropriate,	we have	implemented	a	fuel	recovery	fee	that	is	designed	to	recover	our	fuel	costs.	While	we	charge	these	fees	to	a	majority	of	our	customers,	we	are	unable	to	charge	such	fees	to	all	customers. Consequently,	an	increase	in	fuel	costs	results	in

(1)	an	increase	in	our	cost	of	operations,	(2)	a	smaller	increase	in	our	revenue	(from	the	fuel	recovery	fee)	and	(3)	a	decrease	in	our	operating	margin	percentage,	because	the	increase	in	revenue	is	more than	offset	by	the	increase	in	cost.	Conversely,	a	decrease	in	fuel	costs	results	in	(1)	a	decrease	in	our	cost	of	operations,	(2)	a	smaller	decrease	in	our	revenue	and	(3)	an	increase	in	our	operating	margin percentage.

At	our	current	consumption	levels,	a	one-cent	change	in	the	price	of	diesel	fuel	changes	our	fuel	costs	by	approximately	$1.5	million	on	an	annual	basis,	which	would	be	partially	offset	by	a	smaller change	in	the	fuel	recovery	fees	charged	to	our	customers.	Accordingly,	a	substantial	rise	or	drop	in	fuel	costs	could	result	in	a	material	impact	to	our	revenue	and	cost	of	operations.

Our	operations	also	require	the	use	of	certain	petrochemical-based	products	(such	as	liners	at	our	landfills)	whose	costs	may	vary	with	the	price	of	petrochemicals.	An	increase	in	the	price	of petrochemicals	could	increase	the	cost	of	those	products,	which	would	increase	our	operating	and	capital	costs.	We	are	also	susceptible	to	increases	in	indirect	fuel	surcharges	from	our	vendors.

# Commodities	Prices

We	market	recycled	products	such	as	cardboard	and	newspaper	from	our	material	recycling	facilities.	As	a	result,	changes	in	the	market	prices	of	these	items	will	impact	our	results	of	operations. Revenue	from	sales	of	recycled	cardboard	and	newspaper	in	2009,	2008	and	2007	were	approximately	$181.2	million,	$121.1	million	and	$113.9	million,	respectively.

| Report	of	Independent	Registered	Public	Accounting	Firm | 81 |
| :--- | :--- |
| Report\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm\ton\tInternal\tControl\tOver\tFinancial\tReporting | 82 |
| Consolidated\tBalance\tSheets\tas\tof\tDecember\t31,\t2009\tand\t2008 | 83 |
| Consolidated\tStatements\tof\tIncome\tfor\teach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2009 | 84 |
| Consolidated\tStatements\tof\tStockholders'\tEquity\tand\tComprehensive\tIncome\tfor\teach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2009 | 85 |
| Consolidated\tStatements\tof\tCash\tFlows\tfor\teach\tof\tthe\tThree\tYears\tin\tthe\tPeriod\tEnded\tDecember\t31,\t2009 | 86 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 87 |

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

The	Board	of	Directors	and	Stockholders	of	Republic	Services,	Inc.:

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Republic	Services,	Inc.	and	subsidiaries	as	of	December	31,	2009	and	2008,	and	the	related	consolidated	statements	of	income, stockholders'	equity	and	comprehensive	income,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2009.	These	financial	statements	are	the	responsibility	of	the	Company's management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated	financial	position	of	Republic	Services,	Inc.	and	subsidiaries	at	December	31,	2009	and 2008,	and	the	consolidated	results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2009,	in	conformity	with	U.S.	generally	accepted	accounting principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	Republic	Services,	Inc.'s	internal	control	over	financial	reporting	as	of December	31,	2009,	based	on	criteria	established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	and	our	report	dated February	24,	2010	expressed	an	unqualified	opinion	thereon.

# ON	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

We	have	audited	Republic	Services,	Inc.'s	internal	control	over	financial	reporting	as	of	December	31,	2009,	based	on	criteria	established	in	Internal	Control	-	Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(the	COSO	criteria).	Republic	Services,	Inc.'s	management	is	responsible	for	maintaining	effective	internal	control	over	financial reporting,	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting	included	in	the	accompanying	Report	of	Management	on	Republic	Services,	Inc.'s	Internal	Control	over Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	the	company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit	included	obtaining	an	understanding	of	internal	control	over financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of	effectiveness	to	future	periods	are	subject	to	the risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	Republic	Services,	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2009,	based	on	the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of	Republic	Services,	Inc.	and	subsidiaries	as of	December	31,	2009	and	2008,	and	the	related	consolidated	statements	of	income,	stockholders'	equity	and	comprehensive	income,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended December	31,	2009	of	Republic	Services,	Inc.	and	our	report	dated	February	24,	2010	expressed	an	unqualified	opinion	thereon.

# CONSOLIDATED	BALANCE	SHEETS

# (in	millions,	except	per	share	amounts)

| ASSETS | December	31,<br>2009 | December	31,<br>2008 |
| :--- | :--- | :--- |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $48.0 | $68.7 |
|  | 865.1 | 945.5 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 156.5 | 174.7 |
| Deferred\ttax\tassets | 195.3 | 136.8 |
| Total\tcurrent\tassets | 1,264.9 | 1,325.7 |
| Restricted\tcash\tand\tmarketable\tsecurities | 240.5 | 281.9 |
| Property\tand\tequipment,\tnet | 6,657.7 | 6,738.2 |
| Goodwill,\tnet | 10,667.1 | 10,521.5 |
| Other\tintangible\tassets,\tnet | 500.0 | 564.1 |
| Other\tassets | 210.1 | 490.0 |
| Total\tassets | $\t\t\t\t\t19,540.3 | $\t\t\t\t\t19,921.4 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| Current\tliabilities: |  |  |
| Accounts\tpayable | $592.8 | $564.0 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | 543.0 | 504.0 |
| Deferred\trevenue | 331.1 | 359.9 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tcurrent\tportion | 245.4 | 233.4 |
| Accrued\tinterest | 96.2 | 107.7 |
| Other\taccrued\tliabilities | 740.2 | 796.8 |
| Total\tcurrent\tliabilities | 2,548.7 | 2,565.8 |
| Long-term\tdebt,\tnet\tof\tcurrent\tmaturities | 6,419.6 | 7,198.5 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tnet\tof\tcurrent\tportion | 1,383.2 | 1,197.1 |
| Deferred\tincome\ttaxes\tand\tother\tlong-term\ttax\tliabilities | 1,040.5 | 1,239.9 |
| Self-insurance\treserves,\tnet\tof\tcurrent\tportion | 302.0 | 234.5 |
| Other\tlong-term\tliabilities | 279.2 | 203.1 |
| Commitments\tand\tcontingencies |  |  |
| Stockholders'\tequity: |  |  |
|  | - | - |
|  | 4.0 | 3.9 |
| Additional\tpaid-in\tcapital | 6,316.1 | 6,260.1 |
| Retained\tearnings | 1,683.1 | 1,477.2 |
| Treasury\tstock,\tat\tcost\t(14.9\tshares) | (457.7) | (456.7) |
| Accumulated\tother\tcomprehensive\tincome\t(loss),\tnet\tof\ttax | 19.0 | (3.1) |
| Total\tRepublic\tServices,\tInc.\tstockholders'\tequity | 7,564.5 | 7,281.4 |
| Noncontrolling\tinterests | 2.6 | 1.1 |
| Total\tstockholders'\tequity | 7,567.1 | 7,282.5 |
| Total\tliabilities\tand\tstockholders'\tequity | $19,540.3 | $19,921.4 |

The	accompanying	notes	are	an	integral	part	of	these	financial	statements.

# CONSOLIDATED	STATEMENTS	OF	INCOME

# (in	millions,	except	per	share	data)

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Revenue | $\t8,199.1 | $\t3,685.1 | $\t3,176.2 |
| Expenses: |  |  |  |
| Cost\tof\toperations | 4,844.2 | 2,416.7 | 2,003.9 |
| Depreciation,\tamortization\tand\tdepletion | 869.7 | 354.1 | 305.5 |
| Accretion | 88.8 | 23.9 | 17.1 |
| Selling,\tgeneral\tand\tadministrative | 880.4 | 434.7 | 313.7 |
| (Gain)\tloss\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | (137.0) | 89.8 | - |
| Restructuring\tcharges | 63.2 | 82.7 | - |
| Operating\tincome | 1,589.8 | 283.2 | 536.0 |
| Interest\texpense | (595.9) | (131.9) | (94.8) |
| Loss\ton\textinguishment\tof\tdebt | (134.1) | - | - |
| Interest\tincome | 2.0 | 9.6 | 12.8 |
| Other\tincome\t(expense),\tnet | 3.2 | (1.6) | 14.1 |
| Income\tbefore\tincome\ttaxes | 865.0 | 159.3 | 468.1 |
| Provision\tfor\tincome\ttaxes | 368.5 | 85.4 | 177.9 |
| Net\tincome | 496.5 | 73.9 | 290.2 |
| Less:\tnet\tincome\tattributable\tto\tnoncontrolling\tinterests | (1.5) | (0.1) | - |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $495.0 | $73.8 | $290.2 |
| Basic\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders:\nBasic\tearnings\tper\tshare | $1.30 | $0.38 | $1.53 |
| Weighted\taverage\tcommon\tshares\toutstanding | 379.7 | 196.7 | 190.1 |
| Diluted\tearnings\tper\tshare\tattributable\tto\tRepublic\tServices,\tInc.\tstockholders:\nDiluted\tearnings\tper\tshare | $1.30 | $0.37 | $1.51 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 381.0 | 198.4 | 192.0 |
| Cash\tdividends\tper\tcommon\tshare | $0.76 | $0.72 | $0.55 |

# CONSOLIDATED	STATEMENT	OF	STOCKHOLDERS'	EQUITY

# AND	COMPREHENSIVE	INCOME

# (in	millions)

# Republic	Services,	Inc.	Stockholders'	Equity

|  |  |  |  |  |  |  |  | Other |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Common\tStock | Common\tStock | Additional |  |  | Comprehensive |  |
|  | Total | Comprehensive\nIncome | Shares,\nNet | Par\nValue | Paid-In\nCapital | Retained\nEarnings | Treasury\nStock | Income\t(Loss),\nNet\tof\tTax | Noncontrolling\nInterests |
| Balance\tas\tof\tDecember\t31,\t2006 | $\t1,422.1 |  | 194.5 | $\t1.9 | $\t1,617.5 | $\t1,602.6 | $\t(1,800.8) | $\t0.9 | $\t- |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome | 290.2 | $290.2 | - | - | - | 290.2 | - | - | - |
| Other\tcomprehensive\tincome,\tnet\tof\ttax: |  |  |  |  |  |  |  |  |  |
|  | 8.2 | 8.2 | - | - | - | - | - | 8.2 | - |
| Other\tcomprehensive\tincome | 8.2 | 8.2 |  |  |  |  |  |  |  |
| Comprehensive\tincome | 298.4 | $\t\t\t\t\t\t\t\t\t298.4 |  |  |  |  |  |  |  |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple | (5.6) |  | - | - | - | (5.6) | - | - | - |
| Stock\tsplit | - |  | - | - | (1,635.0) | (210.3) | 1,845.3 | - | - |
| Cash\tdividends\tdeclared | (104.6) |  | - | - | - | (104.6) | - | - | - |
| Issuances\tof\tcommon\tstock | 45.4 |  | 1.9 | 0.1 | 45.3 | - | - | - | - |
| Issuances\tof\trestricted\tstock\tand\tdeferred\tstock\tunits | - |  | 0.1 | - | - | - | - | - | - |
| Stock-based\tcompensation | 10.9 |  | - | - | 10.9 | - | - | - | - |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (362.8) |  | (11.1) | - | - | - | (362.8) | - | - |
| Balance\tas\tof\tDecember\t31,\t2007 | 1,303.8 |  | 185.4 | 2.0 | 38.7 | 1,572.3 | (318.3) | 9.1 | - |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome | 73.9 | $73.9 | - | - | - | 73.8 | - | - | 0.1 |
| Other\tcomprehensive\tloss,\tnet\tof\ttax: |  |  |  |  |  |  |  |  |  |
|  | (8.6) | (8.6) | - | - | - | - | - | (8.6) | - |
| Employee\tbenefit\tplan\tliability\tadjustments,\tnet\tof\ttax\tof\t$1.9 | (3.6) | (3.6) | - | - | - | - | - | (3.6) | - |
| Other\tcomprehensive\tloss | (12.2) | (12.2) |  |  |  |  |  |  |  |
| Comprehensive\tincome | 61.7 | $61.7 |  |  |  |  |  |  |  |
| Cash\tdividends\tdeclared | (168.9) |  | - | - | - | (168.9) | - | - | - |
| Issuances\tof\tcommon\tstock\tother | 27.7 |  | 1.5 | - | 27.7 | - | - | - | - |
| Issuances\tof\tcommon\tstock\tdue\tto\tthe\tacquisition\tof\tAllied | 6,113.7 |  | 195.8 | 1.9 | 6,111.8 | - | - | - | - |
| Equity\tissuance\tcosts\tdue\tto\tthe\tacquisition\tof\tAllied | (1.8) |  | - | - | (1.8) | - | - | - | - |
| Acquisition\tof\tnoncontrolling\tinterest | 1.0 |  | - | - | - | - | - | - | 1.0 |
| Value\tof\tstock\toptions\tissued\tto\treplace\tAllied\tstock\toptions | 61.2 |  | - | - | 61.2 | - | - | - | - |
| Issuances\tof\trestricted\tstock\tand\tdeferred\tstock\tunits | - |  | 0.4 | - | - | - | - | - | - |
| Stock-based\tcompensation | 24.0 |  | - | - | 24.0 | - | - | - | - |
| Adjustment\tto\tdeferred\ttax\tbenefits\tfor\tdeferred\tstock\tunits | (1.5) |  | - | - | (1.5) | - | - | - | - |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (138.4) |  | (4.6) | - | - | - | (138.4) | - | - |
| Balance\tas\tof\tDecember\t31,\t2008 | 7,282.5 |  | 378.5 | 3.9 | 6,260.1 | 1,477.2 | (456.7) | (3.1) | 1.1 |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome | 496.5 | $496.5 | - | - | - | 495.0 | - | - | 1.5 |
| Other\tcomprehensive\tincome\t(loss),\tnet\tof\ttax: |  |  |  |  |  |  |  |  |  |
|  | (0.1) | (0.1) | - | - | - | - | - | (0.1) | - |
| Employee\tbenefit\tplan\tliability\tadjustments,\tnet\tof\ttax\tof\t$12.8 | 22.2 | 22.2 | - | - | - | - | - | 22.2 | - |
| Other\tcomprehensive\tincome | 22.1 | 22.1 |  |  |  |  |  |  |  |
| Comprehensive\tincome | 518.6 | $518.6 |  |  |  |  |  |  |  |
| Cash\tdividends\tdeclared | (288.7) |  | - | - | - | (288.7) | - | - | - |
| Issuances\tof\tcommon\tstock | 40.7 |  | 2.4 | 0.1 | 40.6 | - | - | - | - |
| Stock-based\tcompensation | 15.0 |  | - | - | 15.4 | (0.4) | - | - | - |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (1.0) |  | (0.1) | - | - | - | (1.0) | - | - |
| Balance\tas\tof\tDecember\t31,\t2009 | $7,567.1 |  | 380.8 | $4.0 | $\t\t6,316.1 | $1,683.1 | $(457.7) | $\t\t\t\t\t\t\t\t\t\t\t19.0 | $\t\t\t\t\t\t\t\t\t\t\t2.6 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Cash\tProvided\tby\tOperating\tActivities: |  |  |  |
| Net\tincome | $496.5 | $73.9 | $290.2 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization\tof\tproperty\tand\tequipment | 520.6 | 222.6 | 188.9 |
| Landfill\tdepletion\tand\tamortization | 278.5 | 119.7 | 110.1 |
| Amortization\tof\tintangible\tand\tother\tassets | 70.6 | 11.8 | 6.5 |
| Accretion | 88.8 | 23.9 | 17.1 |
| Non-cash\tinterest\texpense\t–\tdebt | 92.1 | 10.1 | 0.5 |
| Non-cash\tinterest\texpense\t–\tother | 58.1 | 0.5 | - |
| Restructuring\trelated\tcharges | 34.0 | - | - |
| Stock-based\tcompensation | 15.0 | 24.0 | 10.9 |
| Deferred\ttax\t(benefit)\tprovision | (24.6) | (30.4) | 27.8 |
| Provision\tfor\tdoubtful\taccounts,\tnet\tof\tadjustments | 27.3 | 36.5 | 3.9 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock\toption\texercises | (2.5) | 2.8 | 7.9 |
| Asset\timpairments | 7.1 | 89.8 | - |
| Loss\ton\textinguishment\tof\tdebt | 134.1 | - | - |
| Gain\ton\tdisposition\tof\tassets,\tnet | (147.1) | (1.4) | (13.8) |
| Other\tnon-cash\titems | (0.1) | 7.3 | 1.2 |
| Change\tin\tassets\tand\tliabilities,\tnet\tof\teffects\tfrom\tbusiness\tacquisitions\tand\tdivestitures: |  |  |  |
| Accounts\treceivable | 53.1 | 21.1 | (13.6) |
| Prepaid\texpenses\tand\tother\tassets | (11.9) | 15.8 | (17.3) |
| Accounts\tpayable\tand\taccrued\tliabilities | (121.0) | (198.2) | 2.9 |
| Restructuring\trelated\texpenditures | (66.5) | - | - |
| Capping,\tclosure\tand\tpost-closure\texpenditures | (100.9) | (27.9) | (14.7) |
| Remediation\texpenditures | (56.2) | (43.3) | (29.0) |
| Other\tliabilities | 51.5 | 153.6 | 81.8 |
| Cash\tProvided\tby\tOperating\tActivities | 1,396.5 | 512.2 | 661.3 |
| Cash\tUsed\tin\tInvesting\tActivities: |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | (826.3) | (386.9) | (292.5) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | 31.8 | 8.2 | 6.1 |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | (0.1) | (553.8) | (4.4) |
| Cash\tproceeds\tfrom\tdivestitures,\tnet\tof\tcash\tdivested | 511.1 | 3.3 | 42.1 |
| Change\tin\trestricted\tcash\tand\tmarketable\tsecurities | 41.6 | (5.3) | (11.6) |
| Other | (0.6) | (0.2) | - |
| Cash\tUsed\tin\tInvesting\tActivities | (242.5) | (934.7) | (260.3) |
| Cash\t(Used\tin)\tProvided\tby\tFinancing\tActivities: |  |  |  |
| Proceeds\tfrom\tnotes\tpayable\tand\tlong-term\tdebt | 1,472.6 | 1,453.4 | 313.5 |
| Proceeds\tfrom\tissuance\tof\tsenior\tnotes,\tnet\tof\tdiscount | 1,245.4 | - | - |
| Payments\tof\tnotes\tpayable\tand\tlong-term\tdebt | (3,583.9) | (740.6) | (302.4) |
| Premiums\tpaid\ton\textinguishment\tof\tdebt | (47.3) | - | - |
| Fees\tpaid\tto\tissue\tand\tretire\tsenior\tnotes\tand\tcertain\thedging\trelationships | (14.3) | - | - |
| Issuances\tof\tcommon\tstock | 39.6 | 24.6 | 31.3 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock\toption\texercises | 2.5 | 4.5 | 6.0 |
| Payment\tfor\tdeferred\tstock\tunits | - | (4.0) | - |
| Equity\tissuance\tcost | - | (1.8) | - |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (1.0) | (138.4) | (362.8) |
| Cash\tdividends\tpaid | (288.3) | (128.3) | (93.9) |
| Cash\t(Used\tin)\tProvided\tby\tFinancing\tActivities | (1,174.7) | 469.4 | (408.3) |
| (Decrease)\tIncrease\tin\tCash\tand\tCash\tEquivalents | (20.7) | 46.9 | (7.3) |
| Cash\tand\tCash\tEquivalents\tat\tBeginning\tof\tPeriod | 68.7 | 21.8 | 29.1 |
| Cash\tand\tCash\tEquivalents\tat\tEnd\tof\tPeriod | $48.0 | $68.7 | $21.8 |

# REPUBLIC	SERVICES,	INC.	AND	SUBSIDIARIES

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1. BASIS	OF	PRESENTATION

Republic	Services,	Inc.	(a	Delaware	corporation)	and	its	subsidiaries	(also	referred	to	collectively	as	Republic,	we,	us,	our,	or	the	Company	in	this	report)	is	the	second	largest	provider	of	non-hazardous solid	waste	collection,	transfer,	recycling	and	disposal	services	in	the	United	States,	as	measured	by	revenue.	We	manage	and	evaluate	our	operations	through	four	geographic	regions	—	Eastern, Midwest,	Southern,	and	Western,	which	we	have	identified	as	our	reportable	segments.	We	acquired	Allied	Waste	Industries,	Inc.	(Allied)	on	December	5,	2008,	and	have	included	all	of	the	operating results	of	Allied	starting	on	that	date	in	our	consolidated	financial	statements.	See	Note	3,	Business	Acquisitions	and	Divestitures,	Assets	Held	for	Sale	and	Restructuring	Charges,	for	additional information.

The	consolidated	financial	statements	include	the	accounts	of	Republic,	its	wholly	owned	and	majority	owned	subsidiaries	in	accordance	with	accounting	principles	generally	accepted	in	the	United States	of	America	(U.S.	GAAP).	We	account	for	investments	in	entities	in	which	we	do	not	have	a	controlling	financial	interest	under	either	the	equity	method	or	cost	method	of	accounting,	as appropriate.	Our	investments	in	variable	interest	entities	are	not	material	to	our	consolidated	financial	statements.	All	material	intercompany	accounts	and	transactions	have	been	eliminated	in consolidation.

In	January	2007,	our	Board	of	Directors	approved	a	3-for-2	stock	split	in	the	form	of	a	stock	dividend,	effective	on	March	16,	2007,	to	stockholders	of	record	as	of	March	5,	2007.	Our	shares,	per	share amounts,	and	weighted	average	common	and	common	equivalent	shares	have	been	adjusted	to	reflect	the	stock	split.

For	comparative	purposes,	certain	prior	year	amounts	have	been	reclassified	to	conform	to	the	current	year	presentation.	All	amounts	are	in	millions,	except	per	share	amounts	and	unless	otherwise	noted.

# 2. SUMMARY	OF	SIGNIFICANT	ACCOUNTING	POLICIES

# Management's	Estimates	and	Assumptions

In	preparing	our	financial	statements,	we	make	numerous	estimates	and	assumptions	that	affect	the	accounting,	recognition	and	disclosure	of	assets,	liabilities,	stockholders'	equity,	revenue	and	expenses. We	must	make	these	estimates	and	assumptions	because	certain	information	that	we	use	is	dependent	on	future	events,	cannot	be	calculated	with	a	high	degree	of	precision	from	data	available	or	simply cannot	be	readily	calculated	based	on	generally	accepted	methodologies.	In	some	cases,	these	estimates	are	particularly	difficult	to	determine	and	we	must	exercise	significant	judgment.	In	preparing	our financial	statements,	the	most	difficult,	subjective	and	complex	estimates	and	assumptions	that	deal	with	the	greatest	amount	of	uncertainty	relate	to	our	accounting	for	our	long-lived	assets,	landfill development	costs,	and	final	capping,	closure	and	post-closure	costs,	our	valuation	allowances	for	accounts	receivable	and	deferred	tax	assets,	our	liabilities	for	potential	litigation,	claims	and assessments,	our	liabilities	for	environmental	remediation,	employee	benefit	plans,	deferred	taxes,	uncertain	tax	positions	and	self-insurance,	and	our	estimates	of	the	fair	values	of	the	assets	and liabilities	acquired	in	our	acquisition	of	Allied.	Each	of	these	items	is	discussed	in	more	detail	in	the	following	discussion.	Our	actual	results	may	differ	significantly	from	our	estimates.

# Cash	and	Cash	Equivalents

We	consider	liquid	investments	with	an	original	maturity	of	three	months	or	less	to	be	cash	equivalents.

We	may	have	net	book	credit	balances	in	our	primary	disbursement	accounts	at	the	end	of	a	reporting	period.	We	classify	such	credit	balances	as	accounts	payable	in	our	consolidated	balance	sheets	as checks	presented	for	payment	to	these	accounts	are	not	payable	by	our	banks	under	overdraft	arrangements,	and,	as	such,	do	not	represent	short-term	borrowings.	As	of	December	31,	2008,	there	were	no net	book	credit	balances	in	our	primary	disbursement	accounts.	As	of	December	31,	2009,	there	were	net	book	credit	balances	of	$89.9	million

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS,	CONTINUED

in	our	primary	disbursement	accounts	which	were	reclassified	as	accounts	payable	and	other	accrued	liabilities	on	our	consolidated	balance	sheet.

# Concentration	of	Credit	Risk

Financial	instruments	that	potentially	subject	us	to	concentrations	of	credit	risk	consist	of	cash	and	cash	equivalents,	trade	accounts	receivable	and	derivative	instruments.	We	place	our	cash	and	cash equivalents	with	high	quality	financial	institutions.	Such	balances	may	be	in	excess	of	FDIC	insured	limits.	In	order	to	manage	the	related	credit	exposure,	we	continually	monitor	the	credit	worthiness	of the	financial	institutions	where	we	have	deposits.	Concentrations	of	credit	risk	with	respect	to	trade	accounts	receivable	are	limited	due	to	the	wide	variety	of	customers	and	markets	in	which	we	provide services,	as	well	as	the	dispersion	of	our	operations	across	many	geographic	areas.	We	provide	services	to	commercial,	industrial,	municipal	and	residential	customers	in	the	United	States	and	Puerto Rico.	We	perform	ongoing	credit	evaluations	of	our	customers,	but	do	not	require	collateral	to	support	customer	receivables.	We	establish	an	allowance	for	doubtful	accounts	based	on	various	factors including	the	credit	risk	of	specific	customers,	age	of	receivables	outstanding,	historical	trends,	economic	conditions	and	other	information.	No	customer	exceeded	5%	of	our	outstanding	accounts receivable	balance	at	December	31,	2009	or	2008.

# Accounts	Receivable,	Net	of	Allowance	for	Doubtful	Accounts

Accounts	receivable	represent	receivables	from	customers	for	collection,	transfer,	recycling,	disposal	and	other	services.	Our	receivables	are	recorded	when	billed	or	when	the	related	revenue	is	earned,	if earlier,	and	represent	claims	against	third	parties	that	will	be	settled	in	cash.	The	carrying	value	of	our	receivables,	net	of	the	allowance	for	doubtful	accounts,	represents	their	estimated	net	realizable value.	Provisions	for	doubtful	accounts	are	evaluated	on	a	monthly	basis	and	are	recorded	based	on	our	historical	collection	experience,	the	age	of	the	receivables,	specific	customer	information	and economic	conditions.	We	also	review	outstanding	balances	on	an	account-specific	basis.	In	general,	reserves	are	provided	for	accounts	receivable	in	excess	of	ninety	days	old.	Past	due	receivable	balances are	written-off	when	our	collection	efforts	have	been	unsuccessful	in	collecting	amounts	due.

The	following	table	reflects	the	activity	in	our	allowance	for	doubtful	accounts	for	the	years	ended	December	31,	2009,	2008	and	2007:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $\t\t\t\t\t65.7 | $\t\t\t\t\t14.7 | $\t\t\t\t\t18.8 |
| Additions\tcharged\tto\texpense | 27.3 | 36.5 | 3.9 |
| Accounts\twritten-off | (37.8) | (12.7) | (7.8) |
| Acquisitions | - | 27.2 | (0.2) |
| Balance\tat\tend\tof\tyear | $\t\t\t\t\t55.2 | $\t\t\t\t\t65.7 | $\t\t\t\t\t14.7 |

Subsequent	to	our	acquisition	of	Allied,	we	recorded	a	provision	for	doubtful	accounts	of	$14.2	million	to	adjust	the	allowance	acquired	from	Allied	to	conform	to	Republic's	accounting	policies.	We	also recorded	$5.4	million	to	provide	for	specific	bankruptcy	exposures	in	2008.

In	2007,	we	recorded	a	$4.3	million	reduction	in	our	allowance	for	doubtful	accounts	as	a	result	of	refining	our	estimate	of	the	allowance	based	on	our	historical	collection	experience.

# Restricted	Cash

As	of	December	31,	2009,	we	had	$236.6	million	of	restricted	cash,	of	which	$93.1	million	was	proceeds	from	the	issuance	of	tax-exempt	bonds	and	other	tax-exempt	financings	and	will	be	used	to	fund capital

expenditures	under	the	terms	of	the	applicable	agreements.	Restricted	cash	also	includes	amounts	held	in	trust	as	a	guarantee	of	performance.

We	obtain	funds	through	the	issuance	of	tax-exempt	bonds	for	the	purpose	of	financing	qualifying	expenditures	at	our	landfills,	transfer	stations,	and	collection	and	recycling	facilities.	The	funds	are deposited	directly	into	trust	accounts	by	the	bonding	authorities	at	the	time	of	issuance.	As	we	do	not	have	the	ability	to	use	these	funds	for	general	operating	purposes,	they	are	classified	as	restricted cash	in	our	consolidated	balance	sheets.

In	the	normal	course	of	business,	we	may	be	required	to	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	in	connection	with	municipal	residential	collection	contracts, the	operation,	closure	or	post-closure	of	landfills,	environmental	remediation,	environmental	permits,	and	business	licenses	and	permits	as	a	financial	guarantee	of	our	performance.	At	several	of	our landfills,	we	satisfy	financial	assurance	requirements	by	depositing	cash	into	restricted	trust	funds	or	escrow	accounts.

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	reflected	in	the	consolidated	statements	of income.

We	revise	the	estimated	useful	lives	of	property	and	equipment	acquired	through	business	acquisitions	to	conform	with	our	policies	regarding	property	and	equipment.	Depreciation	is	provided	over	the estimated	useful	lives	of	the	assets	involved	using	the	straight-line	method.	We	assume	no	salvage	value	for	our	depreciable	property	and	equipment.	The	estimated	useful	lives	of	our	property	and equipment	are	as	follows:

Landfill	development	costs	are	also	included	in	property	and	equipment.	Landfill	development	costs	include	direct	costs	incurred	to	obtain	landfill	permits	and	direct	costs	incurred	to	acquire,	construct and	develop	sites	as	well	as	final	capping,	closure	and	post-closure	assets.	These	costs	are	amortized	or	depleted	based	on	consumed	airspace.	All	indirect	landfill	development	costs	are	expensed	as incurred.	(For	additional	information,	see	Landfill	and	Environmental	Costs.)

# Capitalized	Interest

We	capitalize	interest	on	landfill	cell	construction	and	other	construction	projects	if	they	meet	the	following	criteria:

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	qualified	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.	Our	interest	capitalization	rate	is	based	on	our	weighted	average	cost	of

# Fair	Value	of	Financial	Instruments

Our	financial	instruments	include	cash	and	cash	equivalents,	restricted	cash	and	marketable	securities,	accounts	receivable,	accounts	payable,	accrued	liabilities,	long-term	debt	and	the	assets	in	our defined	benefit	plan.	The	fair	value	hierarchy	under	U.S.	GAAP	distinguishes	between	assumptions	based	on	market	data	(observable	inputs)	and	an	entity's	own	assumptions	(unobservable	inputs).	The hierarchy	consists	of	three	levels:

•		Level	one	–	Quoted	market	prices	in	active	markets	for	identical	assets	or	liabilities;

•		Level	two	–	Inputs	other	than	level	one	inputs	that	are	either	directly	or	indirectly	observable;	and

•		Level	three	–	Unobservable	inputs	developed	using	estimates	and	assumptions,	which	are	developed	by	the	reporting	entity	and	reflect	those	assumptions	that	a	market	participant	would use.

We	have	determined	the	estimated	fair	values	of	our	financial	instruments	using	available	market	information	and	commonly	accepted	valuation	methodologies.	However,	considerable	judgment	is required	in	interpreting	market	data	to	develop	the	estimates	of	fair	value.	Accordingly,	our	estimates	are	not	necessarily	indicative	of	the	amounts	that	we,	or	holders	of	the	instruments,	could	realize	in	a current	market	exchange.	The	use	of	different	assumptions	or	valuation	methodologies	could	have	a	material	effect	on	the	estimated	fair	value	amounts.	The	fair	value	estimates	are	based	on	information available	as	of	December	31,	2009	and	2008.	These	amounts	have	not	been	revalued	since	those	dates,	and	current	estimates	of	fair	value	could	differ	significantly	from	the	amounts	presented.

The	carrying	value	of	cash	and	cash	equivalents,	restricted	cash	and	marketable	securities,	accounts	receivable,	accounts	payable	and	accrued	liabilities	approximate	their	respective	fair	values	due	to	the short-term	maturities	of	these	instruments.	See	Note	9,	Debt,	for	the	fair	value	disclosures	related	to	our	long-term	debt.

# Derivative	Financial	Instruments

We	use	derivative	financial	instruments	to	manage	our	risk	associated	with	changing	interest	rates	and	changing	prices	for	commodities	we	frequently	purchase	or	sell	by	creating	offsetting	market exposures.	We	use	interest	rate	swap	agreements	to	manage	risk	associated	with	fluctuations	in	interest	rates.	We	have	entered	into	multiple	agreements	designated	as	cash	flow	hedges	to	mitigate	some of	our	exposure	to	changes	in	diesel	fuel	prices	and	prices	of	certain	commodities.

All	derivatives	are	measured	at	fair	value	and	recognized	in	the	balance	sheet	as	assets	or	liabilities,	as	appropriate.	For	derivatives	designated	as	cash	flow	hedges,	changes	in	fair	value	of	the	effective portions	of	derivative	instruments	are	reported	in	stockholders'	equity	as	components	of	other	comprehensive	income	until	the	forecasted	transaction	occurs	or	is	not	probable	of	occurring.	When	the forecasted	transaction	occurs	or	is	not	probable	of	occurring,	the	realized	net	gain	or	loss	is	then	recognized	in	the	consolidated	statements	of	income.	Changes	in	fair	value	of	the	ineffective	portions	of derivative	instruments	are	recognized	currently	in	earnings.

The	fair	values	of	our	interest	rate	swap	agreements	and	the	fair	values	of	our	diesel	fuel	and	other	commodity	hedges	are	obtained	from	third-party	counter-parties	and	are	determined	using	standard valuation	models	with	assumptions	about	prices	and	other	relevant	information	based	on	those	observed	in	the	underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	estimated	fair	values	of derivatives	used	to	hedge	risks	fluctuate	over	time	and	should	be	viewed	in	relation	to	the	underlying	hedged	transactions.

# Goodwill	and	Other	Intangible	Assets

In	preparing	our	annual	test	for	impairment	as	of	December	31,	2009,	we	determined	that	the	aggregate	sum	of	our	reporting	unit	fair	values	exceeded	our	market	capitalization.	We	determined	market capitalization	as	the	fair	value	of	our	common	shares	outstanding	at	the	closing	market	price	on	December	31,	2009.	We	believe	one	of	the	primary	reconciling	differences	between	fair	value	and	our market	capitalization	is	due	to	a	control	premium.	We	believe	the	control	premium	represents	the	value	a	market	participant	could	extract	as	savings	and	/	or	synergies	by	obtaining	control,	and	thereby eliminating	duplicative	overhead	and	operating	costs	resulting	from	the	consolidation	of	routes	and	internalization	of	waste	streams.

Other	intangible	assets	include	values	assigned	to	customer	relationships,	long-term	contracts,	covenants	not	to	compete	and	trade	names,	and	are	amortized	generally	on	a	straight-line	basis	over	periods ranging	from	2	to	23	years.

# Landfill	and	Environmental	Costs

# Life	Cycle	Accounting

We	use	life-cycle	accounting	and	the	units-of-consumption	method	to	recognize	certain	landfill	costs	over	the	life	of	the	site.	In	life	cycle	accounting,	all	costs	to	acquire	and	construct	a	site	are capitalized,	and	charged	to	expense	based	on	the	consumption	of	cubic	yards	of	available	airspace.

Costs	and	airspace	estimates	are	developed	at	least	annually	by	engineers.	We	use	these	estimates	to	adjust	the	rates	we	use	to	deplete	capitalized	costs.	Changes	in	these	estimates	primarily	relate	to changes	in	available	airspace,	inflation	and	applicable	regulations.	Changes	in	available	airspace	include	but	are	not	limited	to	changes	due	to	the	addition	of	airspace	lying	in	probable	expansion	areas, airspace	consumed	and	changes	in	engineering	estimates.

# Total	Available	Disposal	Capacity

As	of	December	31,	2009,	we	owned	or	operated	192	active	solid	waste	landfills	with	total	available	disposal	capacity	of	approximately	4.6	billion	in-place	cubic	yards.	Total	available	disposal	capacity represents	the	sum	of	estimated	permitted	airspace	plus	our	estimate	of	expansion	airspace	that	has	a	probable	likelihood	of	being	permitted.

# Probable	Expansion	Airspace

We	classify	landfill	disposal	capacity	as	either	permitted	(having	received	the	final	permit	from	the	applicable	regulatory	agency)	or	as	probable	expansion	airspace.	Before	airspace	included	in	an expansion	area	is	determined	to	be	probable	expansion	airspace	and,	therefore,	is	included	in	our	calculation	of	total	available	disposal	capacity,	the	following	criteria	must	be	met:

Upon	meeting	our	expansion	criteria,	the	rates	used	at	each	applicable	landfill	to	expense	costs	to	acquire,	construct,	cap,	close	and	maintain	a	site	during	the	post-closure	period	are	adjusted	to	include both	the	probable	expansion	airspace	and	the	additional	costs	to	be	capitalized	or	accrued	associated	with	that	expansion	airspace.

We	have	identified	three	steps	that	landfills	generally	follow	to	obtain	expansion	permits.	These	steps	are	as	follows:

1.		Obtaining	approval	from	local	authorities,

2.		Submitting	a	permit	application	to	state	authorities,	and

3.		Obtaining	permit	approval	from	state	authorities.

We	continually	monitor	our	progress	toward	obtaining	permits	for	each	of	our	sites	with	probable	airspace.	If	at	any	point	it	is	determined	that	a	landfill	expansion	area	no	longer	meets	our	criteria,	the probable	expansion	airspace	is	removed	from	the	landfill's	total	available	capacity	and	the	rates	used	at	the	landfill	to	deplete	costs	to	acquire,	construct,	cap,	close	and	maintain	a	site	during	the	post- closure	period	are	adjusted	accordingly.	In	addition,	any	amounts	capitalized	for	the	probable	expansion	airspace	are	charged	to	expense	in	the	period	in	which	it	is	determined	that	the	criteria	are	no longer	met.

# Capitalized	Landfill	Costs

Capitalized	landfill	costs	include	expenditures	for	land,	permitting,	cell	construction	and	environmental	structures.	Capitalized	permitting	and	cell	construction	costs	are	limited	to	direct	costs	relating	to these	activities,	including	legal,	engineering	and	construction	costs	associated	with	excavation,	natural	and	synthetic	liners,	construction	of	leachate	collection	systems,	installation	of	methane	gas collection	and	monitoring	systems,	installation	of	groundwater	monitoring	wells	and	other	costs	associated	with	the	development	of	the	site.	Interest	is	capitalized	on	landfill	construction	projects	while the	assets	are	undergoing	activities	to	ready	them	for	their	intended	use.	Capitalized	landfill	costs	also	include	final	capping,	closure	and	post-closure	assets	and	are	depleted	as	airspace	is	consumed	using the	units-of-consumption	method.

Costs	related	to	acquiring	land,	excluding	the	estimated	residual	value	of	unpermitted,	non-buffer	land,	and	costs	related	to	permitting	and	cell	construction	are	depleted	as	airspace	is	consumed	using	the units-of-consumption	method.

Capitalized	landfill	costs	may	also	include	an	allocation	of	purchase	price	paid	for	landfills.	For	landfills	purchased	as	part	of	a	group	of	assets,	the	purchase	price	assigned	to	the	landfill	is	determined based	on	the	estimated	fair	value	of	the	landfill	relative	to	the	fair	value	of	other	assets	within	the	acquired	group.	If	the	landfill	meets	our	expansion	criteria,	the	purchase	price	is	further	allocated between	permitted	airspace	and	expansion	airspace	based	on	the	ratio	of	permitted	versus	probable	expansion	airspace	to	total	available	airspace.	Landfill	purchase	price	is	amortized	using	the units-of-consumption	method	over	the	total	available	airspace	including	probable	expansion	airspace	where	appropriate.

We	have	future	obligations	for	final	capping,	closure	and	post-closure	costs	with	respect	to	the	landfills	we	own	or	operate	as	set	forth	in	applicable	landfill	permits.	Final	capping,	closure	and	post- closure	costs	include	estimated	costs	to	be	incurred	for	final	capping	and	closure	of	landfills	and	estimated	costs	for	providing	required	post-closure	monitoring	and	maintenance	of	landfills.	The	permit requirements	are	based	on	the	Subtitle	C	and	Subtitle	D	regulations	of	the	Resource	Conservation	and	Recovery	Act	(RCRA),	as	implemented	and	applied	on	a	state-by-state	basis.	Obligations	associated with	monitoring	and	controlling	methane	gas	migration	and	emissions	are	set	forth	in	applicable	landfill	permits	and	these	requirements	are	based	on	the	provisions	of	the	Clean	Air	Act	of	1970,	as amended.	Final	capping	typically	includes	installing	flexible	membrane	and	geosynthetic	clay	liners,	drainage	and	compact	soil	layers,	and	topsoil,	and	is	constructed	over	an	area	of	the	landfill	where total	airspace	capacity	has	been	consumed	and	waste	disposal	operations	have	ceased.	These	final	capping	activities	occur	as	needed	throughout	the	operating	life	of	a	landfill.	Other	closure	activities	and post-closure	activities	occur	after	the	entire	landfill	ceases	to	accept	waste	and	closes.	These	activities	involve	methane	gas	control,	leachate	management	and	groundwater	monitoring,	surface	water monitoring	and	control,	and	other	operational	and	maintenance	activities	that	occur	after	the	site	ceases	to	accept	waste.	The	post-closure	period	generally	runs	for	up	to	30	years	after	final	site	closure	for municipal	solid	waste	landfills	and	a	shorter	period	for	construction	and	demolition	landfills	and	inert	landfills.

Estimates	of	future	expenditures	for	final	capping,	closure	and	post-closure	are	developed	at	least	annually	by	engineers.	These	estimates	are	reviewed	by	management	and	are	used	by	our	operating	and accounting

personnel	to	adjust	the	rates	used	to	capitalize	and	amortize	these	costs.	These	estimates	involve	projections	of	costs	that	will	be	incurred	during	the	remaining	life	of	the	landfill	for	final	capping activities,	after	the	landfill	ceases	operations	and	during	the	legally	required	post-closure	monitoring	period.	We	currently	retain	post-closure	responsibility	for	132	closed	landfills.

A	liability	for	an	asset	retirement	obligation	must	be	recognized	in	the	period	in	which	it	is	incurred	and	should	be	initially	measured	at	fair	value.	Absent	quoted	market	prices,	the	estimate	of	fair	value is	based	on	the	best	available	information,	including	the	results	of	present	value	techniques.	The	offset	to	the	liability	is	capitalized	as	part	of	the	carrying	amount	of	the	related	long-lived	asset.	Changes in	the	liabilities	due	to	the	passage	of	time	are	recognized	as	operating	expenses	in	the	consolidated	statement	of	income	and	are	referred	to	as	accretion	expense.	Changes	in	the	liabilities	due	to	revisions to	estimated	future	cash	flows	are	recognized	by	increasing	or	decreasing	the	liabilities	with	the	offsets	adjusting	the	carrying	amounts	of	the	related	long-lived	assets,	and	may	also	require	immediate adjustments	to	amortization	expense	in	the	consolidated	statement	of	income.

Landfill	asset	retirement	obligations	include	estimates	of	all	costs	related	to	final	capping,	closure	and	post-closure.	Costs	associated	with	daily	maintenance	activities	during	the	operating	life	of	the landfill,	such	as	leachate	disposal,	groundwater	and	gas	monitoring,	and	other	pollution	control	activities,	are	charged	to	expense	as	incurred.	In	addition,	costs	historically	accounted	for	as	capital expenditures	during	the	operating	life	of	a	landfill,	such	as	cell	development	costs,	are	capitalized	when	incurred,	and	charged	to	expense	using	life	cycle	accounting	and	the	units-of-consumption	method based	on	the	consumption	of	cubic	yards	of	available	airspace.

We	define	final	capping	as	activities	required	to	permanently	cover	a	portion	of	a	landfill	that	has	been	completely	filled	with	waste.	Final	capping	occurs	in	phases	as	needed	throughout	the	operating life	of	a	landfill	as	specific	areas	are	filled	to	capacity	and	the	final	elevation	for	that	specific	area	is	reached	in	accordance	with	the	provisions	of	the	operating	permit.	We	consider	final	capping	events	to be	discrete	activities	that	are	recognized	as	asset	retirement	obligations	separately	from	other	closure	and	post-closure	obligations.	These	capping	events	generally	occur	during	the	operating	life	of	a landfill	and	can	be	associated	with	waste	placed	in	an	area	to	be	capped.	As	a	result,	we	use	a	separate	rate	per	ton	for	recognizing	the	principal	amount	of	the	liability	and	related	asset	associated	with each	capping	event.	We	amortize	the	asset	recorded	pursuant	to	this	approach	as	waste	volume	related	to	the	capacity	covered	by	the	capping	event	is	placed	into	the	landfill	based	on	the	consumption	of cubic	yards	of	available	airspace.

In	connection	with	the	2008	annual	review	of	our	calculations	with	respect	to	landfill	asset	retirement	obligations,	we	made	a	change	in	estimate,	which	is	considered	to	be	a	change	in	accounting estimate	that	is	effected	by	a	change	in	accounting	principle.	This	change,	which	we	believe	is	preferable,	was	made	to	better	align	the	estimated	amount	of	waste	to	be	placed	in	an	area	to	be	capped (which	is	used	to	calculate	our	capping	rates)	with	the	physical	operation	of	our	landfills.	The	expected	costs	related	to	our	capping	events	did	not	change	and	we	will	continue	to	use	separate	rates	for each	capping	event.	This	change	resulted	in	a	$32.6	million	decrease	in	our	capping	asset	retirement	obligations	and	related	assets.	These	assets	will	be	amortized	to	expense	prospectively	as	a	change	in estimate.	This	change	in	estimate	did	not	have	a	material	impact	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

We	recognize	asset	retirement	obligations	and	the	related	amortization	expense	for	closure	and	post-closure	(excluding	obligations	for	final	capping)	using	the	units-of-consumption	method	over	the	total remaining	capacity	of	the	landfill.	The	total	remaining	capacity	includes	probable	expansion	airspace.

In	general,	we	engage	third	parties	to	perform	most	of	our	final	capping,	closure	and	post-closure	activities.	Accordingly,	the	fair	market	value	of	these	obligations	is	based	on	quoted	and	actual	prices paid	for	similar	work.	We	also	perform	some	of	our	final	capping,	closure	and	post-closure	activities	using	internal	resources.	Where	internal	resources	are	expected	to	be	used	to	fulfill	an	asset retirement	obligation,	we	have	added	a

profit	margin	to	the	estimated	cost	of	such	services	to	better	reflect	their	fair	market	value.	If	we	perform	these	services	internally,	the	added	profit	margin	would	be	recognized	as	a	component	of operating	income	in	the	period	the	obligation	is	settled.

An	estimate	of	fair	value	should	include	the	price	that	marketplace	participants	are	able	to	receive	for	bearing	the	uncertainties	in	cash	flows.	However,	when	utilizing	discounted	cash	flow	techniques, reliable	estimates	of	market	premiums	may	not	be	obtainable.	In	this	situation,	it	is	not	necessary	to	consider	a	market	risk	premium	in	the	determination	of	expected	cash	flows.	While	the	cost	of	asset retirement	obligations	associated	with	final	capping,	closure	and	post-closure	can	be	quantified	and	estimated,	there	is	not	an	active	market	that	can	be	utilized	to	determine	the	fair	value	of	these activities.	In	the	waste	industry,	there	generally	is	not	a	market	for	selling	the	responsibility	for	final	capping,	closure	and	post-closure	independent	of	selling	the	landfill	in	its	entirety.	Accordingly,	we believe	that	it	is	not	possible	to	develop	a	methodology	to	reliably	estimate	a	market	risk	premium	and	have	excluded	a	market	risk	premium	from	our	determination	of	expected	cash	flow	for	landfill asset	retirement	obligations.

Our	estimates	of	costs	to	discharge	asset	retirement	obligations	for	landfills	are	developed	in	today's	dollars.	These	costs	are	inflated	each	year	to	reflect	a	normal	escalation	of	prices	up	to	the	year	they are	expected	to	be	paid.	We	use	a	2.5%	inflation	rate,	which	is	based	on	the	ten-year	historical	moving	average	increase	of	the	U.S.	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.	In	general,	the	credit-adjusted,	risk-free	rate	we	used	for	liability	recognition	was	7.5%	and	6.6%	for the	years	ended	December	31,	2009	and	2008,	respectively,	which	was	based	on	the	estimated	all-in	yield	we	would	have	needed	to	offer	to	sell	thirty-year	debt	in	the	public	market.	However,	our capping,	closure	and	post-closure	obligations	acquired	from	Allied	were	recorded	at	their	fair	values	as	of	the	acquisition	date,	and	were	discounted	using	a	rate	of	9.75%	due	to	market	conditions	in effect	at	the	time	of	the	acquisition.

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	effective	interest	rate	being	applied	to	the	average carrying	amount	of	the	liability.	The	effective	interest	rate	used	to	calculate	accretion	expense	is	our	credit-adjusted,	risk-free	rate	in	effect	at	the	time	the	liabilities	were	recorded.

Changes	due	to	revisions	of	the	estimates	of	the	amount	or	timing	of	the	original	undiscounted	cash	flows	used	to	record	a	liability	are	recognized	by	increasing	or	decreasing	the	carrying	amount	of	the asset	retirement	obligation	liability	and	the	carrying	amount	of	the	related	asset.	Upward	revisions	in	the	amount	of	undiscounted	estimated	cash	flows	used	to	record	a	liability	are	discounted	using	the credit-adjusted,	risk-free	rate	in	effect	at	the	time	of	the	change.	Downward	revisions	in	the	amount	of	undiscounted	estimated	cash	flows	used	to	record	a	liability	are	discounted	using	the	credit-adjusted, risk-free	rate	that	existed	when	the	original	liability	was	recognized.

We	review	our	calculations	with	respect	to	landfill	asset	retirement	obligations	at	least	annually.	If	there	is	a	significant	change	in	the	facts	and	circumstances	related	to	a	landfill	during	the	year,	we	will review	our	calculations	for	the	landfill	as	soon	as	practical	after	the	change	has	occurred.

# Environmental	Operating	Costs

In	the	normal	course	of	business,	we	expense	currently	as	incurred	various	operating	costs	associated	with	environmental	compliance.	These	costs	include,	among	other	things,	leachate	treatment	and disposal,	methane	gas	and	groundwater	monitoring	and	systems	maintenance,	interim	cap	maintenance,	costs	associated	with	the	application	of	daily	cover	materials,	and	the	legal	and	administrative costs	of	ongoing	environmental	compliance.

We	are	subject	to	an	array	of	laws	and	regulations	relating	to	the	protection	of	the	environment,	and	we	remediate	sites	in	the	ordinary	course	of	our	business.	Under	current	laws	and	regulations,	we	may be	responsible	for	environmental	remediation	at	sites	that	we	either	own	or	operate,	including	sites	that	we	have	acquired,	or	sites	where	we	have	(or	a	company	that	we	have	acquired	has)	delivered waste.	Our	environmental	remediation	liabilities	primarily	include	costs	associated	with	remediating	groundwater,	surface	water	and	soil	contamination,	as	well	as	controlling	and	containing	methane	gas migration	and	the	related	legal	costs.	To	estimate	our	ultimate	liability	at	these	sites,	we	evaluate	several	factors,	including	the	nature	and	extent	of	contamination	at	each	identified	site,	the	required remediation	methods,	the	apportionment	of	responsibility	among	the	potentially	responsible	parties	and	the	financial	viability	of	those	parties.	We	accrue	for	costs	associated	with	environmental remediation	obligations	when	such	costs	are	probable	and	reasonably	estimable	in	accordance	with	accounting	for	loss	contingencies.	We	periodically	review	the	status	of	all	environmental	matters	and update	our	estimates	of	the	likelihood	of	and	future	expenditures	for	remediation	as	necessary.	Changes	in	the	liabilities	resulting	from	these	reviews	are	recognized	currently	in	earnings	in	the	period	in which	the	adjustment	is	known.	Adjustments	to	estimates	are	reasonably	possible	in	the	near	term	and	may	result	in	changes	to	recorded	amounts.	We	have	not	reduced	the	liabilities	we	have	recorded	for recoveries	from	other	potentially	responsible	parties	or	insurance	companies.

The	environmental	liabilities	assumed	from	Allied	relate	to	impacts	at	both	owned	and	unowned	sites.	In	the	case	of	owned	sites,	we	are	actively	working	with	the	appropriate	regulatory	entity	under	the applicable	regulations	(typically	RCRA	or	Comprehensive	Environmental	Response,	Compensation	and	Liability	Act	of	1980	(CERCLA))	to	characterize	and	remediate	potential	issues.	At	unowned sites,	we	are	working	within	the	regulatory	and	procedural	framework	established	by	CERCLA	to	characterize	and	remediate	potential	issues,	in	conjunction	with	other	potentially	liable	parties	at	each location.	Pursuant	to	the	purchase	method	of	accounting,	we	have	recorded	the	environmental	remediation	liabilities	assumed	from	Allied	based	upon	estimates	of	their	fair	value,	using	an	estimate	of future	cash	flows	or	settlement.	Previously,	and	consistent	with	our	method	of	accounting,	Allied	recorded	remediation	liabilities	based	upon	accounting	for	loss	contingencies,	however,	amounts recorded	under	this	method	are	generally	not	at	fair	value.

•		For	sites	where	the	level	of	responsibility	was	less	defined,	we	developed	a	fair	value	estimate	of	the	settlement	costs	based	upon	market	participant	assessments	from	external	legal	counsel. •		For	sites	which	we	own	and	are	in	the	earliest	stages	of	the	remedial	process,	we	identified	the	most	applicable	standard	remedial	techniques	and	then	probability	weighted	the	use	of	each technique	to	develop	a	fair	value	estimate.

The	initial	liabilities	recorded	as	part	of	our	acquisition	of	Allied	were	recorded	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we	gathered	and	assessed	new information	obtained	about	the	facts	and	circumstances	surrounding	Allied's	remediation	sites.	In	certain	situations,	we	used	external	engineers	and	attorneys	to	assist	in	the	development	of	our	fair	value estimates.	As	a	result	of

the	process,	we	increased	the	fair	value	of	our	remediation	reserves	by	$181.9	million.	Any	further	adjustments	to	our	remediation	reserves	resulting	in	changes	in	estimate	or	reserve	settlements	will	be reflected	currently	in	earnings	in	the	periods	in	which	such	adjustments	become	known.

# Asset	Impairments

We	continually	evaluate	whether	events	or	changes	in	circumstances	have	occurred	that	may	warrant	revision	of	the	estimated	useful	lives	of	our	long-lived	assets	or	whether	the	remaining	balances	of those	assets	should	be	evaluated	for	possible	impairment.	Long-lived	assets	include,	for	example,	capitalized	landfill	costs,	other	property	and	equipment,	and	identifiable	intangible	assets.	Events	or changes	in	circumstances	that	may	indicate	that	an	asset	may	be	impaired	include	the	following:

•		A	significant	decrease	in	the	market	price	of	an	asset	or	asset	group,

•		A	significant	adverse	change	in	the	extent	or	manner	in	which	an	asset	or	asset	group	is	being	used	or	in	its	physical	condition,

•		A	significant	adverse	change	in	legal	factors	or	in	the	business	climate	that	could	affect	the	value	of	an	asset	or	asset	group,	including	an	adverse	action	or	assessment	by	a	regulator,

•		An	accumulation	of	costs	significantly	in	excess	of	the	amount	originally	expected	for	the	acquisition	or	construction	of	a	long-lived	asset,

•		A	current	period	operating	or	cash	flow	loss	combined	with	a	history	of	operating	or	cash	flow	losses	or	a	projection	or	forecast	that	demonstrates	continuing	losses	associated	with	the	use of	a	long-lived	asset	or	asset	group,

•		A	current	expectation	that,	more	likely	than	not,	a	long-lived	asset	or	asset	group	will	be	sold	or	otherwise	disposed	of	significantly	before	the	end	of	its	previously	estimated	useful	life,	or •		An	impairment	of	goodwill	at	a	reporting	unit.

There	are	certain	indicators	listed	above	that	require	significant	judgment	and	understanding	of	the	waste	industry	when	applied	to	landfill	development	or	expansion.	For	example,	a	regulator	may initially	deny	a	landfill	expansion	permit	application	though	the	expansion	permit	is	ultimately	granted.	In	addition,	management	may	periodically	divert	waste	from	one	landfill	to	another	to	conserve remaining	permitted	landfill	airspace.	Therefore,	certain	events	could	occur	in	the	ordinary	course	of	business	and	not	necessarily	be	considered	indicators	of	impairment	due	to	the	unique	nature	of	the waste	industry.

If	indicators	of	impairment	exist,	the	asset	or	asset	group	is	reviewed	to	determine	whether	its	recoverability	is	impaired.	We	assess	the	recoverability	of	the	asset	or	asset	group	by	comparing	its	carrying value	to	an	estimate	(or	estimates)	of	its	undiscounted	future	cash	flows	over	its	remaining	life.	If	the	estimated	undiscounted	cash	flows	are	not	sufficient	to	recover	the	carrying	value	of	the	asset	or	asset group,	we	measure	an	impairment	loss	as	the	amount	by	which	the	carrying	amount	of	the	asset	exceeds	its	fair	value.	The	loss	is	recorded	in	the	consolidated	statement	of	income	in	the	current	period. Estimating	future	cash	flows	requires	significant	judgment,	and	our	projections	of	future	cash	flows	and	remaining	useful	lives	may	vary	materially	from	actual	results.

# Self-Insurance	Reserves

Our	insurance	programs	for	workers'	compensation,	general	liability,	vehicle	liability	and	employee-related	health	care	benefits	are	effectively	self-insured.	Accruals	for	self-insurance	reserves	are	based on	claims	filed	and	estimates	of	claims	incurred	but	not	reported.	We	consider	our	past	claims	experience,	including	both	frequency	and	settlement	amount	of	claims,	in	determining	these	estimates.	It	is possible	that	recorded	reserves	may	not	be	adequate	to	cover	the	future	payment	of	claims.	Adjustments,	if	any,	to	estimates	recorded	resulting	from	ultimate	claim	payments	will	be	reflected	in	the consolidated	statements	of	income	in	the	periods	in	which	such	adjustments	are	known.	In	general,	our	self-insurance	reserves	are	recorded	on	an	undiscounted	basis.	However,	our	estimate	of	the	self- insurance	liabilities	we	acquired	in	the	acquisition	of

Allied	have	been	recorded	at	fair	value,	and,	therefore,	have	been	discounted	to	present	value	based	on	our	estimate	of	the	timing	of	the	related	cash	flows.

As	we	are	the	primary	obligor	for	payment	of	all	claims,	we	report	our	insurance	claim	liabilities	on	a	gross	basis	in	other	current	and	long-term	liabilities	and	any	associated	recoveries	from	our	insurers are	recorded	in	other	assets.

# Business	Combinations

We	acquire	businesses	in	the	waste	industry,	including	non-hazardous	waste	collection,	transfer	and	disposal	operations,	as	part	of	our	growth	strategy.	For	all	acquisitions	completed	prior	to December	31,	2008	(prior	to	the	effective	date	of	the	new	business	combinations	pronouncement	as	discussed	in	Recently	Issued	Accounting	Pronouncements),	businesses	are	included	in	the	consolidated financial	statements	from	the	date	of	acquisition.	The	cost	of	the	acquired	businesses	is	allocated	to	the	assets	acquired	and	the	liabilities	assumed	based	on	estimates	of	fair	values	thereof.	These	estimates are	revised	during	the	allocation	period	as	necessary	if,	and	when,	information	regarding	contingencies	becomes	available	to	further	define	and	quantify	assets	acquired	and	liabilities	assumed.	The allocation	period	generally	does	not	exceed	one	year.	To	the	extent	contingencies	such	as	pre-acquisition	environmental	matters,	litigation	and	related	legal	fees	are	resolved	or	settled	during	the allocation	period,	such	items	are	included	in	the	revised	allocation	of	the	purchase	price.	After	the	allocation	period,	the	effect	of	changes	in	such	contingencies	is	included	in	results	of	operations	in	the periods	in	which	the	adjustments	are	determined.

For	all	acquisitions	completed	under	the	new	business	combinations	pronouncement,	as	of	the	respective	acquisition	dates,	we	recognize,	separately	from	goodwill,	the	identifiable	assets	acquired	and liabilities	assumed	at	their	estimated	acquisition-date	fair	values.	We	measure	and	recognize	goodwill	as	of	the	acquisition	date	as	the	excess	of:	(i)	the	aggregate	of	the	fair	value	of	consideration transferred,	the	fair	value	of	any	noncontrolling	interest	in	the	acquiree	(if	any)	and	the	acquisition-date	fair	value	of	the	our	previously	held	equity	interest	in	the	acquiree	(if	any),	over	(ii)	the	fair	value of	assets	acquired	and	liabilities	assumed.	If	information	about	facts	and	circumstances	existing	as	of	the	acquisition	date	is	incomplete	by	the	end	of	the	reporting	period	in	which	a	business	combination occurs,	we	will	report	provisional	amounts	for	the	items	for	which	the	accounting	is	incomplete.	The	measurement	or	allocation	period	ends	once	we	receive	the	information	we	were	seeking;	however, this	period	will	not	exceed	one	year	from	the	acquisition	date.	Any	material	adjustments	recognized	during	the	measurement	period	will	be	reflected	retrospectively	in	the	consolidated	financial statements	of	the	subsequent	period.	We	will	recognize	third-party	transaction	related	costs	as	expense	currently	in	the	period	in	which	they	are	incurred.

# Discontinued	Operations

We	analyze	our	operations	that	have	been	divested	or	classified	as	held-for-sale	in	order	to	determine	if	they	qualify	for	discontinued	operations	accounting.	Only	operations	that	qualify	as	a	component of	an	entity	under	U.S.	GAAP	can	be	included	in	discontinued	operations.	In	addition,	only	components	where	we	do	not	have	significant	continuing	involvement	with	the	divested	operations	would qualify	for	discontinued	operations	accounting.	For	our	purposes,	continuing	involvement	would	include	continuing	to	receive	waste	at	our	landfill	or	recycling	facility	from	a	divested	hauling	operation or	transfer	station	or	continuing	to	dispose	of	waste	at	a	divested	landfill	or	transfer	station.

# Costs	Associated	with	Exit	Activities

We	record	costs	associated	with	exit	activities	such	as	for	employee	termination	benefits	that	represent	a	one-time	benefit	when	management	approves	and	commits	to	a	plan	of	termination,	and communicates	the	termination	arrangement	to	the	employees,	or	over	the	future	service	period,	if	any.	Other	costs	associated	with

exit	activities	may	include	contract	termination	costs,	including	costs	related	to	leased	facilities	to	be	abandoned	or	subleased,	and	facility	and	employee	relocation	costs.

In	addition,	we	account	for	costs	to	exit	an	activity	of	an	acquired	company	and	involuntary	employee	termination	benefits	associated	with	acquired	businesses	in	the	purchase	price	allocation	of	the acquired	business	if	a	plan	to	exit	an	activity	of	an	acquired	company	exists,	and	those	costs	have	no	future	economic	benefit	to	us	and	will	be	incurred	as	a	direct	result	of	the	exit	plan,	or	the	exit	costs represent	amounts	to	be	incurred	by	us	under	a	contractual	obligation	of	the	acquired	entity	that	existed	prior	to	the	acquisition	date.	We	recognize	employee	termination	benefits	as	liabilities	assumed	as of	the	acquisition	date	when	management	approves	and	commits	to	a	plan	of	termination,	and	communicates	the	termination	arrangement	to	the	employees,	if	the	future	service	period	for	these	employees is	less	than	sixty	days	from	their	date	of	notification.

# Contingent	Liabilities

We	are	subject	to	various	legal	proceedings,	claims	and	regulatory	matters,	the	outcomes	of	which	are	subject	to	significant	uncertainty.	In	general,	we	determine	whether	to	disclose	or	accrue	for	loss contingencies	based	on	an	assessment	of	whether	the	risk	of	loss	is	remote,	reasonably	possible	or	probable	and	whether	it	can	be	reasonably	estimated.	We	assess	our	potential	liability	relating	to litigation	and	regulatory	matters	based	on	information	available	to	us.	Management's	assessment	is	developed	based	on	an	analysis	of	possible	outcomes	under	various	strategies.	We	accrue	for	loss contingencies	when	such	amounts	are	probable	and	reasonably	estimable.	If	a	contingent	liability	is	only	reasonably	possible,	we	will	disclose	the	potential	range	of	the	loss,	if	estimable.

Contingent	liabilities	recorded	in	purchase	accounting	are	recorded	at	their	fair	values.	These	fair	values	may	be	different	from	the	values	we	would	have	otherwise	recorded,	had	the	contingent	liability not	been	assumed	as	part	of	an	acquisition	of	a	business.

# Accumulated	Other	Comprehensive	Income

Accumulated	other	comprehensive	income	is	a	component	of	stockholders'	equity	and	includes	the	effective	portion	of	the	net	changes	in	fair	value	of	our	cash	flow	hedges	which	consist	of	prices	for diesel	fuel	and	other	commodities,	net	of	tax,	and	certain	adjustments	to	liabilities	associated	with	our	employee	benefit	plan	liabilities,	net	of	tax.

# Revenue	Recognition

We	generally	provide	services	under	contracts	with	municipalities	or	individual	customers.	Municipal	and	commercial	contracts	are	generally	long-term	and	often	have	renewal	options.	Advance	billings are	recorded	as	deferred	revenue,	and	revenue	is	recognized	over	the	period	services	are	provided.	No	one	customer	has	individually	accounted	for	more	than	5%	of	our	consolidated	revenue	or	of	our reportable	segment	revenue	in	any	of	the	past	three	years.

We	recognize	revenue	when	all	four	of	the	following	criteria	are	met:

•		Persuasive	evidence	of	an	arrangement	exists	such	as	a	service	agreement	with	a	municipality,	a	hauling	customer	or	a	disposal	customer,

•		Services	have	been	performed	such	as	the	collection	and	hauling	of	waste	or	the	disposal	of	waste	at	a	disposal	facility	owned	or	operated	by	us,

•		The	price	of	the	services	provided	to	the	customer	is	fixed	or	determinable,	and

•		Collectibility	is	reasonably	assured.

We	are	subject	to	income	taxes	in	the	United	States	and	Puerto	Rico.	We	record	deferred	income	taxes	to	reflect	the	effects	of	temporary	differences	between	the	carrying	amounts	of	assets	and	liabilities and	their	tax	bases	using	enacted	tax	rates	that	we	expect	to	be	in	effect	when	the	taxes	are	actually	paid	or	recovered.

We	record	net	deferred	tax	assets	to	the	extent	we	believe	these	assets	will	more	likely	than	not	be	realized.	In	making	these	determinations,	we	consider	all	available	positive	and	negative	evidence, including	scheduled	reversals	of	deferred	tax	liabilities,	tax	planning	strategies,	projected	future	taxable	income	and	recent	financial	operating	results.	In	the	event	we	determine	that	we	would	be	able	to realize	a	deferred	income	tax	asset	in	the	future	in	excess	of	its	net	recorded	amount,	we	would	make	an	adjustment	to	the	valuation	allowance	which	would	reduce	the	provision	for	income	taxes.

Effective	January	1,	2007,	we	adopted	new	guidance	which	clarifies	the	accounting	for	uncertainty	in	income	taxes	recognized	in	the	financial	statements.	This	new	guidance	provides	that	a	tax	benefit from	an	uncertain	tax	position	may	be	recognized	when	it	is	more	likely	than	not	that	the	position	will	be	sustained	upon	examination,	including	resolutions	of	any	related	appeals	or	litigation	processes, based	on	the	technical	merits.	Income	tax	positions	must	meet	a	more-likely-than-not	recognition	threshold	at	the	effective	date	to	be	recognized.	This	interpretation	also	provides	guidance	on measurement,	de-recognition,	classification,	interest	and	penalties,	accounting	in	interim	periods,	disclosure	and	transition.

We	recognize	interest	and	penalties	related	to	uncertain	tax	positions	in	the	provision	for	income	taxes	in	the	accompanying	consolidated	statements	of	income.	Accrued	interest	and	penalties	are	included in	other	accrued	liabilities,	and	deferred	income	taxes	and	other	long-term	tax	liabilities,	in	the	consolidated	balance	sheets.

# Defined	Benefit	Pension	Plan

We	currently	have	one	qualified	defined	pension	plan,	the	BFI	Retirement	Plan	(the	Plan).	The	Plan	covers	certain	current	and	former	employees	of	Allied	in	the	United	States,	including	some	employees subject	to	collective	bargaining	agreements.	The	Plan's	benefit	formula	is	based	on	a	percentage	of	compensation	as	defined	in	the	Plan	document.	However,	the	benefits	of	approximately	97%	of	the current	plan	participants	were	frozen	upon	Allied's	acquisition	of	BFI	in	1999.

Our	pension	contributions	are	made	in	accordance	with	funding	standards	established	by	the	Employee	Retirement	Income	Security	Act	of	1974	(ERISA)	and	the	Internal	Revenue	Code	(IRC),	as amended	by	the	Pension	Protection	Act	of	2006.	The	Plan's	assets	have	been	invested	as	determined	by	our	Retirement	Benefits	Committee.	We	annually	review	and	adjust	the	Plan's	asset	allocation	as deemed	necessary.

The	benefit	obligation	and	associated	income	or	expense	related	to	the	Plan	are	determined	using	annually	established	assumptions	for	discount	rates,	expected	rates	of	return	and	average	rates	for compensation	increases.	We	determine	the	discount	rate	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.	When	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.	In	developing	our	expected	rate	of	return	assumption,	we	evaluate	long-term	expected	and	historical	actual	returns	on	the	plan	assets,	giving consideration	to	our	asset	mix	and	the	anticipated	duration	of	our	plan	obligations.	The	average	rate	of	compensation	increase	reflects	our	expectations	of	average	pay	increases	over	the	periods	benefits are	earned.	Our	assumptions	are	reviewed	annually	and	adjusted	as	deemed	necessary.

# Equity-Based	Compensation	Plans

We	recognize	equity-based	compensation	expense	on	the	estimated	fair	value	of	stock	options	and	similar	equity	instruments	issued	as	compensation	to	employees	over	the	requisite	service	periods.

Cash	flows	resulting	from	tax	benefits	related	to	tax	deductions	in	excess	of	those	recorded	for	compensation	expense,	resulting	from	the	exercise	of	stock	options,	are	classified	as	cash	flows	from financing	activities.	All	other	tax	benefits	related	to	stock	options	have	been	presented	as	a	component	of	cash	flows	from	operating	activities.

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.

The	fair	value	of	each	option	on	the	date	of	grant	is	estimated	using	a	lattice	binomial	option-pricing	model	based	on	certain	valuation	assumptions.	Expected	volatilities	are	based	on	our	historical	stock prices	over	the	contractual	terms	of	the	options	and	other	factors.	The	risk-free	interest	rates	are	based	on	the	published	U.S.	Treasury	yield	curve	in	effect	at	the	time	of	the	grant	for	instruments	with	a similar	life.	The	dividend	yield	reflects	our	dividend	yield	at	the	date	of	grant.	The	expected	life	represents	the	period	that	the	stock	options	are	expected	to	be	outstanding,	taking	into	consideration	the contractual	terms	of	the	options	and	our	employees'	historical	exercise	and	post-vesting	employment	termination	behavior,	weighted	to	reflect	the	job	level	demographic	profile	of	the	employees receiving	the	option	grants.	The	estimated	forfeiture	rate	used	to	record	compensation	expense	is	based	on	historical	forfeitures	and	is	adjusted	periodically	based	on	actual	results.

# Leases

We	lease	property	and	equipment	in	the	ordinary	course	of	our	business.	Our	most	significant	lease	obligations	are	for	property	and	equipment	specific	to	our	industry,	including	real	property	operated	as a	landfill	or	transfer	station	and	operating	equipment.	Our	leases	have	varying	terms.	Some	may	include	renewal	or	purchase	options,	escalation	clauses,	restrictions,	penalties	or	other	obligations	that	we consider	in	determining	minimum	lease	payments.	The	leases	are	classified	as	either	operating	leases	or	capital	leases,	as	appropriate.

# Operating	Leases

Many	of	our	leases	are	operating	leases.	This	classification	generally	can	be	attributed	to	either	(i)	relatively	low	fixed	minimum	lease	payments	(including,	for	example,	real	property	lease	payments	that are	not	fixed	and	vary	based	on	the	volume	of	waste	we	receive	or	process),	or	(ii)	minimum	lease	terms	that	are	much	shorter	than	the	assets'	economic	useful	lives.	Management	expects	that,	in	the normal	course	of	business,	our	operating	leases	will	be	renewed,	replaced	by	other	leases,	or	replaced	with	fixed	asset	expenditures.

# Capital	Leases

Assets	acquired	under	capital	leases	are	capitalized	at	the	inception	of	each	lease	and	are	amortized	to	depreciation	expense	over	the	lesser	of	the	useful	life	of	the	asset	or	the	lease	term	on	either	a straight-line	or	a	units-of-consumption	basis,	depending	on	the	asset	leased.	The	present	value	of	the	related	lease	payments	is	recorded	as	a	debt	obligation.

# Related	Party	Transactions

It	is	our	policy	that	transactions	with	related	parties	must	be	on	terms	that,	on	the	whole,	are	no	less	favorable	than	those	that	would	be	available	from	unaffiliated	parties.

# Recently	Issued	Accounting	Pronouncements

# Convertible	Debt	Instruments

In	May	2008,	the	Financial	Accounting	Standards	Board	(FASB)	issued	new	accounting	guidance	for	convertible	debt	instruments	that,	by	their	stated	terms,	may	be	settled	in	cash	(or	other	assets)	upon conversion,	including	partial	cash	settlement	of	the	conversion	option.	The	guidance	requires	bifurcation	of	the	instrument	into	a	debt	component	that	is	initially	recorded	at	fair	value	and	an	equity component.	The	difference	between	the	fair	value	of	the	debt	component	and	the	initial	proceeds	from	issuance	of	the	instrument	is	recorded	as	a	component	of	equity.	The	liability	component	of	the	debt instrument	is	accreted	to	par	using	the	effective	yield	method;	accretion	is	reported	as	a	component	of	interest	expense.	The	equity	component	is	not	subsequently	re-valued	as	long	as	it	continues	to qualify	for	equity	treatment.	We	adopted	this	guidance	on	January	1,	2009,	and	adoption	did	not	have	a	material	effect	on	our	consolidated	financial	position	or	results	of	operations.

In	December	2007,	the	FASB	issued	new	guidance	for	business	combinations	applicable	to	all	transactions	and	other	events	in	which	one	entity	obtains	control	over	one	or	more	other	businesses.	Under this	new	guidance	all	transaction	and	restructuring	charges	are	required	to	be	recognized	as	expenses	as	incurred.	The	new	guidance	requires	the	fair	value	of	the	purchase	consideration,	including	the issuance	of	equity	securities,	to	be	determined	as	of	the	acquisition	date.	It	also	requires	the	acquirer	to	recognize	assets	acquired,	liabilities	assumed,	consideration	paid	and	any	noncontrolling	interests acquired	at	their	acquisition-date	fair	values.	Changes	in	deferred	tax	asset	valuation	allowances	and	liabilities	for	tax	uncertainties	subsequent	to	the	acquisition	date	that	do	not	meet	certain remeasurement	criteria	are	recorded	in	the	income	statement.	The	impact	of	the	adoption	of	this	new	guidance	on	our	consolidated	financial	statements	is	dependent	on	the	nature	and	volume	of	future acquisitions,	and,	therefore,	can	not	be	determined	at	this	time.

This	new	guidance	is	required	to	be	applied	prospectively,	and,	in	general,	will	be	effective	for	businesses	we	acquire	on	or	after	January	1,	2009.	However,	in	the	case	of	deferred	tax	asset	valuation allowances	and	uncertain	tax	position	liabilities,	the	guidance	applies	to	the	accounting	for	all	business	acquisitions,	whether	the	acquisition	occurred	before	or	after	adoption.

# Determination	of	the	Useful	Life	of	Intangible	Assets

In	April	2008,	the	FASB	directed	the	FASB	Staff	to	issue	an	amendment	to	the	factors	that	should	be	considered	in	developing	renewal	or	extension	assumptions	used	for	purposes	of	determining	the useful	life	of	a	recognized	intangible	asset	under	previously	existing	guidance.	The	amendment	is	intended	to	improve	the	consistency	between	the	useful	life	of	a	recognized	intangible	asset	and	the period	of	expected	cash	flows	used	to	measure	the	fair	value	of	the	asset	under	GAAP.	We	adopted	the	amendment	on	January	1,	2009	and	adoption	of	this	amendment	did	not	have	a	material	effect	on our	consolidated	financial	position	or	results	of	operations.

# Fair	Value	Measurements

In	September	2006,	the	FASB	issued	new	guidance	that	defines	fair	value,	establishes	a	framework	for	measuring	fair	value	in	accordance	with	GAAP	and	expands	disclosures	about	fair	value measurements.	The	new	guidance	was	effective	for	us	on	January	1,	2008.	However,	in	February	2008,	the	FASB	issued	an	amendment	to	this	new	guidance	which	delayed	the	effective	date	for	non- financial	assets	and	non-financial	liabilities,	except	for	items	that	are	recognized	or	disclosed	at	fair	value	in	the	financial	statements	on	a	recurring	basis,	for	one	year.	We	adopted	the	guidance	with respect	to	financial	assets	and	liabilities	beginning	January	1,	2008	and	with	respect	to	our	non-financial	assets	and	liabilities	effective	January	1,	2009	pursuant

to	the	requirements	of	the	amendment.	The	impact	of	adopting	this	guidance	and	related	amendment	did	not	have	a	material	effect	on	our	consolidated	financial	position	or	results	of	operations.

# Noncontrolling	Interests

In	December	2007,	the	FASB	issued	new	guidance	requiring	noncontrolling	interests	or	minority	interests	to	be	treated	as	a	separate	component	of	equity,	not	as	a	liability	or	other	item	outside	of permanent	equity.	Upon	a	loss	of	control,	the	interests	sold,	as	well	as	any	interest	retained,	are	required	to	be	measured	at	fair	value,	with	any	gain	or	loss	recognized	in	earnings.	Additionally,	when control	is	obtained	and	a	previous	equity	interest	was	held,	a	gain	or	loss	will	be	recognized	in	earnings	for	the	difference	between	the	fair	value	of	the	previously	held	equity	interest	and	its	carrying value.	Based	on	the	new	guidance,	assets	and	liabilities	will	not	change	for	subsequent	purchase	or	sale	transactions	with	noncontrolling	interests	as	long	as	control	is	maintained.	Differences	between	the fair	value	of	consideration	paid	or	received	and	the	carrying	value	of	noncontrolling	interests	are	to	be	recognized	as	an	adjustment	to	the	parent	interest's	equity.	We	adopted	this	new	guidance	on January	1,	2009,	and	the	implementation	did	not	have	a	material	impact	on	our	consolidated	financial	position	or	results	of	operations.

# Determining	Whether	an	Instrument	is	Indexed	to	an	Entity's	Own	Stock

In	June	2008,	the	FASB	issued	guidance	for	determining	whether	an	instrument	(or	an	embedded	feature)	is	indexed	to	an	entity's	own	stock	when	evaluating	the	instrument	as	a	derivative.	An instrument	that	is	both	indexed	to	an	entity's	own	stock	and	classified	in	stockholder's	equity	in	the	entity's	statement	of	financial	position	is	not	considered	a	derivative.	This	new	guidance	provides	a two-step	process	to	determine	whether	an	equity-linked	instrument	(or	embedded	feature)	is	indexed	to	its	own	stock	first	by	evaluating	the	instrument's	contingent	exercise	provisions,	if	any,	and second,	by	evaluating	the	instrument's	settlement	provisions.	We	adopted	this	new	guidance	on	January	1,	2009	and	the	adoption	did	not	have	a	material	effect	on	our	consolidated	financial	position	or results	of	operations.

# Consolidation	of	Variable	Interest	Entities

In	June	2009,	the	FASB	issued	an	amendment	to	the	accounting	and	disclosure	requirements	for	the	consolidation	of	variable	interest	entities	(VIEs)	and	requires	an	enterprise	to	perform	an	analysis	to determine	whether	the	enterprise's	variable	interest	or	interests	give	it	a	controlling	financial	interest	in	a	VIE.	Under	this	new	guidance,	an	enterprise	has	a	controlling	financial	interest	when	it	has	(i)	the power	to	direct	the	activities	of	a	VIE	that	most	significantly	impact	the	entity's	economic	performance	and	(ii)	the	obligation	to	absorb	losses	of	the	entity	or	the	right	to	receive	benefits	from	the	entity that	could	potentially	be	significant	to	the	VIE.	An	enterprise	is	required	to	assess	whether	it	has	an	implicit	financial	responsibility	to	ensure	that	a	VIE	operates	as	designed	when	determining	whether	it has	power	to	direct	the	activities	of	the	VIE	that	most	significantly	impact	the	entity's	economic	performance.	It	also	requires	ongoing	assessments	of	whether	an	enterprise	is	the	primary	beneficiary	of	a VIE,	requires	enhanced	disclosures	and	eliminates	the	scope	exclusion	for	qualifying	special-purpose	entities.	This	new	guidance	is	effect	for	annual	reporting	periods	beginning	after	November	15, 2009.	We	do	not	believe	the	impact	of	adopting	this	guidance	will	have	a	material	effect	on	our	consolidated	financial	position	or	results	of	operations.

# 3. BUSINESS	ACQUISITIONS	AND	DIVESTITURES,	ASSETS	HELD	FOR	SALE	AND	RESTRUCTURING	CHARGES

# Rationale	for	the	Merger

We	believe	that	our	merger	with	Allied	results	in	a	combined	company	that	has	greater	financial	strength,	operational	efficiencies,	earning	power	and	growth	potential	than	either	we	or	Allied	would have	on	our	own.	We	believe	that	there	is	a	substantial	strategic	fit	between	the	markets	serviced	by	Republic,	which	are	located	predominantly	in	high-growth	Sunbelt	markets,	and	those	served	by Allied,	which	has	a	national	footprint.	Since	our	collection	markets	are	highly	complementary,	the	combined	company	is	diversified	across	geographic	markets,	customer	segments	and	service	offerings. This	balance	will	allow	our	combined	company	to	capitalize	on	attractive	business	opportunities,	mitigate	geographic	risk,	and	results	in	greater	stability	and	predictability	of	revenue	and	free	cash	flow. We	also	believe	that	the	merger	will	result	in	a	number	of	important	synergies,	primarily	from	achieving	greater	operating	efficiencies,	capturing	inherent	economies	of	scale	and	leveraging	corporate resources.	Therefore,	we	believe	that	the	premium	we	paid	to	effectuate	the	merger	was	reasonable.

# Purchase	Price

The	purchase	price	paid	for	Allied,	which	was	acquired	on	December	5,	2008,	includes	the	value	of	Republic's	common	stock	issued	in	exchange	for	Allied's	outstanding	common	stock,	the	conversion of	Allied's	outstanding	stock	options	and	unvested	restricted	stock	awards	into	Republic's	equity-based	awards,	cash	paid	to	retire	Allied's	revolving	credit	facility,	the	fair	value	of	Allied's	debt	less	cash assumed	at	closing	and	Republic's	transaction	costs.

In	summary,	the	purchase	price	paid	for	the	acquisition	of	Allied	and	the	allocation	of	the	purchase	price	is	as	follows:

|  | December	5,<br>2008 | Adjustments | December	31,<br>2008 | Adjustments | December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Purchase\tprice: |  |  |  |  |  |
| Value\tof\tRepublic\tcommon\tstock\tissued\tin\texchange\tfor\tAllied\tcommon |  |  |  |  |  |
| stock\toutstanding | $6,113.7 | $- | $6,113.7 | $(0.8) | $6,112.9 |
| Value\tof\tRepublic\tstock\toptions\tissued\tto\treplace\tAllied\tstock\toptions | 61.2 | - | 61.2 | - | 61.2 |
| Cash\tpaid\tto\tretire\tAllied's\tcredit\tfacility | 671.8 | - | 671.8 | - | 671.8 |
| Debt,\tfair\tvalue | 5,402.0 | - | 5,402.0 | (45.8) | 5,356.2 |
| Less:\tcash\tacquired | (131.3) | - | (131.3) | - | (131.3) |
| Transaction\tcosts | 57.4 | - | 57.4 | 1.5 | 58.9 |
| Total\tpurchase\tprice | 12,174.8 | - | 12,174.8 | (45.1) | 12,129.7 |
| Allocated\tas\tfollows: |  |  |  |  |  |
| Current\tassets | 910.8 | (0.9) | 909.9 | - | 909.9 |
| Landfill\tdevelopment\tcosts | 2,600.0 | - | 2,600.0 | - | 2,600.0 |
| Other\tproperty\tand\tequipment | 2,256.8 | 1.9 | 2,258.7 | 3.6 | 2,262.3 |
| Other\tassets | 226.6 | (1.1) | 225.5 | (36.7) | 188.8 |
| Current\tliabilities | (1,336.3) | - | (1,336.3) | (97.0) | (1,433.3) |
| Capping,\tclosure\tand\tpost-closure\tliabilities | (813.1) | - | (813.1) | (72.3) | (885.4) |
| Environmental\tliabilities | (208.1) | - | (208.1) | (181.9) | (390.0) |
| Deferred\tincome\ttaxes\tand\tother\tlong-term\ttax\tliabilities | (774.1) | 0.9 | (773.2) | 136.0 | (637.2) |
| Other\tlong-term\tliabilities | (235.1) | - | (235.1) | 3.3 | (231.8) |
| Net\tbook\tvalue\tof\tassets\tacquired\tand\tliabilities\tassumed | 2,627.5 | 0.8 | 2,628.3 | (245.0) | 2,383.3 |
| Excess\tpurchase\tprice\tto\tbe\tallocated | $\t\t9,547.3 | $\t\t(0.8) | $\t\t\t\t\t\t\t9,546.5 | $\t\t\t\t\t\t199.9 | $\t\t9,746.4 |
| Allocated\tas\tfollows: |  |  |  |  |  |
| Goodwill | $9,006.3 | $(0.8) | $9,005.5 | $194.1 | $9,199.6 |
| Other\tintangible\tassets |  |  |  |  |  |
| Customer\trelationships | 420.0 | - | 420.0 | - | 420.0 |
| Franchise\tagreements | 60.0 | - | 60.0 | - | 60.0 |
| Other\tmunicipal\tagreements | 30.0 | - | 30.0 | - | 30.0 |
| Tradenames | 30.0 | - | 30.0 | - | 30.0 |
| Favorable\tlease\tagreements | - | - | - | 5.8 | 5.8 |
| Non-compete\tagreements | 1.0 | - | 1.0 | - | 1.0 |
| Total\tallocated | $\t\t\t\t\t9,547.3 | $\t\t\t\t\t\t\t(0.8) | $\t\t\t\t\t9,546.5 | $\t\t\t\t\t199.9 | $\t\t\t\t\t\t9,746.4 |

Adjustments	in	future	periods,	if	any,	made	to	assets	acquired	and	liabilities	assumed	will	be	recorded	in	our	consolidated	statement	of	income.

The	intangible	assets	identified	that	were	determined	to	have	value	as	a	result	of	our	analysis	of	Allied's	projected	revenue	streams	and	their	related	profits	include	customer	relationships,	franchise agreements,	other	municipal	agreements,	non-compete	agreements	and	trade	names.	The	fair	values	for	these	intangible	assets	are	reflected	in	the	previous	table.	Other	intangible	assets	were	identified that	are	considered	to	be	components	of	either	property	and	equipment	or	goodwill	under	U.S.	GAAP,	including	the	value	of	the	permitted	and	probable	airspace	at	Allied's	landfills	(property	and equipment),	the	going	concern	element	of	Allied's	business	(goodwill)	and	its	assembled	workforce	(goodwill).	The	going	concern	element	represents	the	ability	of	an	established	business	to	earn	a	higher rate	of	return	on	an	assembled	collection	of	net	assets	than	would	be	expected	if	those	assets	had	to	be	acquired	separately.	A	substantial	portion	of	this	going	concern	element	acquired	is	represented	by Allied's	infrastructure	of	market-based	collection	routes	and	its	related	integrated	waste	transfer	and	disposal	channels,	whose	value	has	been	included	in	goodwill.

All	of	the	goodwill	and	other	intangible	assets	resulting	from	the	acquisition	of	Allied	will	not	be	deductible	for	income	tax	purposes.

# Pro	Forma	Information

The	consolidated	financial	statements	presented	for	Republic	include	the	operating	results	of	Allied	from	the	date	of	the	acquisition.	The	following	pro	forma	information	is	presented	assuming	the merger	had	been	completed	as	of	January	1,	2007.	The	unaudited	pro	forma	information	presented	has	been	prepared	for	illustrative	purposes	and	is	not	intended	to	be	indicative	of	the	results	of operations	that	would	have	actually	occurred	had	the	acquisition	been	consummated	at	the	beginning	of	the	periods	presented	or	of	future	results	of	the	combined	operations.	Furthermore,	the	pro	forma results	do	not	give	effect	to	all	cost	savings	or	incremental	costs	that	occur	as	a	result	of	the	integration	and	consolidation	of	the	acquisition	(in	millions,	except	share	and	per	share	amounts).

|  | Year	Ended<br>December	31,<br>2008<br>(unaudited) | Year	Ended<br>December	31,<br>2007<br>(unaudited) |
| :--- | :--- | :--- |
| Revenue | $\t\t\t\t\t9,362.2 | $\t\t\t\t\t9,244.9 |
| Net\tincome | 285.7 | 423.2 |
| Basic\tearnings\tper\tshare | 0.76 | 1.10 |
| Diluted\tearnings\tper\tshare | 0.75 | 1.09 |

The	unaudited	pro	forma	financial	information	includes	adjustments	for	amortization	of	identifiable	intangible	assets,	accretion	of	discounts	to	fair	value	associated	with	debt,	environmental,	self- insurance	and	other	liabilities,	accretion	of	capping,	closure	and	post-closure	obligations	and	amortization	of	the	related	assets,	and	provision	for	income	taxes.

# Assets	Held	For	Sale

As	a	condition	of	the	merger	with	Allied,	the	Department	of	Justice	(DOJ)	required	us	to	divest	of	certain	assets	and	related	liabilities.	As	such,	we	classified	these	assets	and	liabilities	as	assets	held	for sale	in	our	consolidated	balance	sheet	at	December	31,	2008.	Certain	of	the	legacy	Republic	assets	classified	as	held	for	sale	were	adjusted	to	their	estimated	fair	values	less	costs	to	sell	and	resulted	in	the recognition	of	an	asset	impairment	loss	of	$1.8	million	and	$6.1	million	in	our	consolidated	statements	of	income	for	the	years	ended	December	31,	2009	and	2008,	respectively.	The	assets	held	for	sale related	to	operations	that	were	Allied's	were	recorded	at	their	estimated	fair	values	in	our	consolidated	balance	sheet	as	of	December	31,	2008	in

| Prepaid	expenses	and	other	current	assets | $					17.5 |
| :--- | :--- |
| Other\tassets | 285.1 |
| Total\tassets | $302.6 |
| Accrued\tliabilities | $3.1 |
| Other\tlong-term\tliabilities | 31.0 |
| Total\tliabilities | $34.1 |

The	following	table	reflects	the	activity	during	the	year	ended	December	31,	2009	associated	with	the	liabilities	(included	in	other	accrued	liabilities)	incurred	in	connection	with	the	restructuring	charges:

|  | Balance	at<br>December	31,<br>2008 | Additions | Payments | Balance	at<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- |
| Severance\tand\tother\ttermination\tbenefits | $\t\t\t\t\t12.5 | $\t\t\t\t\t31.4 | $(24.3) | $\t\t\t\t\t19.6 |
| Relocation | 17.9 | 2.6 | (15.3) | 5.2 |
| Total | $\t\t\t\t\t\t\t\t\t\t30.4 | $\t\t\t\t\t34.0 | $\t\t\t\t\t\t\t(39.6) | $\t\t\t\t\t\t\t\t\t24.8 |

# Accrued	Liabilities	Related	to	Allied

The	following	table	reflects	the	activity	during	the	year	ended	December	31,	2009	associated	with	the	liabilities	(included	in	other	accrued	liabilities)	incurred	in	connection	with	termination	benefits	for employees	who	were	employed	by	Allied	at	the	date	of	the	acquisition	and	notified	that	their	employment	was	terminated:

| employees	who	were	employed	by	Allied	at	the	date	of	the	acquisition	and	notified	that	their	employment	was	terminated: |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tat |  |  |  | Balance\tat |
| December\t31,\n2008 | December\t31,\n2008 | Additions | Payments | December\t31,\n2009 |
| Severance\tand\tother\ttermination\tbenefits | $\t\t\t\t\t\t\t\t\t\t22.6 | $\t\t\t\t\t6.7 | $\t\t\t\t\t(26.9) | $\t\t\t\t\t\t\t\t\t\t2.4 |

The	initial	legal	contingencies	recorded	as	part	of	our	acquisition	of	Allied	were	estimated	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we	gathered	and assessed	new	information	obtained	about	the	facts	and	circumstances	surrounding	various	Allied	legal	matters,	and	as	a

result	increased	the	legal	reserves	by	$53.9	million.	Any	further	adjustments	to	our	Allied	legal	matter	reserves	resulting	from	changes	in	estimates	or	reserve	settlements	will	be	reflected	in	our consolidated	statement	of	income	in	the	periods	in	which	such	adjustments	become	known.	As	of	December	31,	2009	and	2008,	we	recorded	$85.4	million	and	$31.5	million,	respectively,	of	accrued liabilities	in	purchase	accounting	for	the	estimated	liabilities	related	to	various	Allied	legal	matters.

During	2009,	we	recorded	additional	liabilities	for	unfavorable	contract	and	lease	exit	costs	of	$22.6	million	and	$7.7	million,	respectively.	The	underlying	lease	agreements	and	contracts	have	remaining non-cancellable	terms	ranging	from	1	to	21	years.	The	following	table	reflects	activity	during	the	year	ended	December	31,	2009	associated	with	unfavorable	contracts	and	lease	exit	liabilities:

|  | Balance	at<br>December	31,<br>2008 | Additions | Payments	/<br>Amortization | Balance	at<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- |
| Lease\texit\tcosts | $- | $7.7 | $(1.3) | $6.4 |
| Unfavorable\tcontracts | 33.3 | 22.6 | (6.9) | 49.0 |
| Total | $\t\t\t\t\t\t\t\t\t\t33.3 | $\t\t\t\t\t\t\t30.3 | $\t\t\t\t\t\t\t\t\t\t(8.2) | $\t\t\t\t\t\t\t\t\t\t55.4 |

# Other	Acquisitions

In	addition	to	our	acquisition	of	Allied,	we	acquired	various	other	solid	waste	businesses	during	the	years	ended	December	31,	2008	and	2007.	The	aggregate	purchase	price	paid	for	these	transactions was	$13.4	million	and	$4.4	million,	respectively.	In	summary,	the	purchase	price	paid	for	these	acquisitions	(excluding	Allied)	and	the	allocation	of	the	purchase	price	as	of	December	31	is	as	follows:

|  | 2008 | 2007 |
| :--- | :--- | :--- |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | $\t\t\t\t\t\t13.4 | $\t\t\t\t\t4.4 |
| Allocated\tas\tfollows: |  |  |
| Working\tcapital\tsurplus\t(deficit) | 0.4 | (0.8) |
| Property\tand\tequipment | 5.7 | 3.6 |
| Other\tliabilities,\tnet | (1.3) | - |
| Net\tbook\tvalue\tof\tassets\tacquired\tand\tliabilities\tassumed | 4.8 | 2.8 |
| Excess\tpurchase\tprice\tto\tbe\tallocated | $8.6 | $1.6 |
| Allocated\tas\tfollows: |  |  |
| Goodwill | $1.7 | $1.0 |
| Other\tintangible\tassets | 6.9 | 0.6 |
| Total\tallocated | $\t\t\t\t\t\t8.6 | $\t\t\t\t\t\t\t1.6 |

Substantially	all	of	the	intangible	assets	recorded	for	these	acquisitions	are	deductible	for	tax	purposes.

# Other	Divestitures

In	October	2009,	we	divested	a	hauling	operation	in	Miami-Dade	County,	Florida	and	received	proceeds	of	$32.7	million	and	recognized	a	loss	of	$10.2	million.	In	November	2007,	we	divested	our Texas-based	compost,	mulch	and	soil	business	and	received	proceeds	of	$36.5	million.	A	gain	of	$12.5	million	was	recorded	in	2007	on	this	divesture.

# 4. PROPERTY	AND	EQUIPMENT,	NET

A	summary	of	property	and	equipment	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Other\tland | $418.7 | $464.4 |
| Non-depletable\tlandfill\tland | 142.7 | 169.3 |
| Landfill\tdevelopment\tcosts | 4,230.9 | 4,126.3 |
| Vehicles\tand\tequipment | 3,792.4 | 3,432.3 |
| Buildings\tand\timprovements | 741.6 | 706.0 |
| Construction-in-progress\t-\tlandfill | 245.1 | 76.2 |
| Construction-in-progress\t-\tother | 23.0 | 26.3 |
|  | 9,594.4 | 9,000.8 |
| Less:\tAccumulated\tdepreciation,\tdepletion\tand\tamortization: |  |  |
| Landfill\tdevelopment\tcosts | (1,275.4) | (1,004.2) |
| Vehicles\tand\tequipment | (1,518.2) | (1,147.3) |
| Buildings\tand\timprovements | (143.1) | (111.1) |
|  | (2,936.7) | (2,262.6) |
| Property\tand\tequipment,\tnet | $6,657.7 | $6,738.2 |

Property	and	equipment,	net	excludes	assets	classified	as	held	for	sale	of	$214.1	million	as	of	December	31,	2008.

# 5. GOODWILL	AND	OTHER	INTANGIBLE	ASSETS,	NET

# Goodwill,	Net

A	summary	of	the	activity	and	balances	in	our	goodwill	accounts,	net,	by	operating	segment	is	as	follows:

|  | Balance	at<br>December	31,<br>2008 | Adjustments<br>to<br>Acquisitions | Divestitures | Adjustments<br>to	Assets<br>Held	for	Sale | Balance	at<br>December	31,<br>2009 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Eastern | $\t\t\t\t\t2,772.5 | $\t\t\t\t\t45.0 | $\t\t\t\t\t(11.2) | $\t\t\t\t\t12.2 | $\t\t\t\t\t2,818.5 |
| Midwest | 2,083.8 | 34.7 | - | (0.3) | 2,118.2 |
| Southern | 2,715.6 | 48.6 | (61.8) | 22.3 | 2,724.7 |
| Western | 2,949.6 | 56.1 | - | - | 3,005.7 |
| Total | $10,521.5 | $184.4 | $(73.0) | $34.2 | $10,667.1 |

|  | Balance	at<br>December	31,<br>2007 | Acquisitions | Divestitures | Impairments	and<br>Adjustments<br>to	Assets<br>Held	for	Sale | Balance	at<br>December	31,<br>2008 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Eastern | $\t\t\t\t\t510.0 | $\t\t\t\t\t2,281.0 | $\t\t\t\t\t(0.2) | $\t\t\t\t\t(18.3) | $\t\t\t\t\t2,772.5 |
| Midwest | 374.1 | 1,710.7 | (0.2) | (0.8) | 2,083.8 |
| Southern | 340.7 | 2,397.4 | (0.2) | (22.3) | 2,715.6 |
| Western | 330.9 | 2,618.9 | (0.2) | - | 2,949.6 |
| Total | $\t\t\t\t\t\t\t1,555.7 | $\t\t\t\t\t\t\t9,008.0 | $\t\t\t\t\t\t\t\t\t\t(0.8) | $\t\t\t\t\t\t\t(41.4) | $\t\t\t\t\t10,521.5 |

Adjustments	to	acquisitions	for	the	year	ended	December	31,	2009	includes	a	$9.7	million	adjustment	for	deferred	taxes	pertaining	to	prior	years'	acquisitions.

# Other	Intangible	Assets,	Net

Other	intangible	assets,	net,	include	values	assigned	to	customer	relationships	franchise	agreements,	other	municipal	agreements,	non-compete	agreements	and	trade	names,	and	are	amortized	over periods	ranging	from	2	to	23	years.	A	summary	of	the	activity	and	balances	in	other	intangible	assets	accounts	by	operating	segment	is	as	follows:

Based	on	the	amortizable	assets	recorded	in	the	balance	sheet	at	December	31,	2009,	amortization	expense	for	each	of	the	next	five	years	is	estimated	to	be	as	follows	(in	millions):

# 6. OTHER	ASSETS

# Prepaid	Expenses	and	Other	Current	Assets

A	summary	of	prepaid	expenses	and	other	current	assets	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Inventories | $33.7 | $37.1 |
| Prepaid\texpenses | 59.3 | 58.6 |
| Other\tnon-trade\treceivables | 57.1 | 47.7 |
| Income\ttaxes\treceivable | - | 3.0 |
| Assets\theld\tfor\tsale | - | 17.5 |
| Other\tcurrent\tassets | 6.4 | 10.8 |
| Total | $\t156.5 | $\t174.7 |

Other	current	assets	include	the	fair	value	of	fuel	and	commodity	hedges	of	$5.0	million	and	$10.0	million	at	December	31,	2009	and	2008,	respectively.

A	summary	of	other	assets	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Deferred\tfinancing\tcosts | $32.4 | $27.4 |
| Deferred\tcompensation\tplan | 15.2 | 13.0 |
| Notes\tand\tother\treceivables | 45.1 | 57.2 |
| Assets\theld\tfor\tsale | - | 285.1 |
| Other | 117.4 | 107.3 |
| Total | $\t210.1 | $\t490.0 |

Notes	and	other	receivables	include	the	fair	value	of	interest	rate	swaps	of	$9.9	million	and	$15.1	million	at	December	31,	2009	and	2008,	respectively.

# 7. OTHER	LIABILITIES

# Other	Accrued	Liabilities

A	summary	of	other	accrued	liabilities	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Accrued\tpayroll\tand\tbenefits | $\t\t\t\t\t169.6 | $\t\t\t\t\t130.6 |
| Accrued\tfees\tand\ttaxes | 114.4 | 118.7 |
| Self-insurance\treserves,\tcurrent\tportion | 110.9 | 173.6 |
| Accrued\tdividends | 72.4 | 72.0 |
| Current\ttax\tliabilities | 70.0 | 47.1 |
| Restructuring\tliabilities | 24.8 | 30.4 |
| Accrued\tprofessional\tfees\tand\tlegal\tsettlement\treserves | 21.7 | 43.7 |
| Other | 156.4 | 180.7 |
| Total | $\t\t\t\t\t\t\t740.2 | $\t\t\t\t\t\t\t796.8 |

Other	accrued	liabilities	includes	the	fair	value	of	fuel	and	commodity	hedges	of	$5.7	million	and	$12.9	million	at	December	31,	2009	and	2008,	respectively.

# Other	Long-Term	Liabilities

A	summary	of	other	long-term	liabilities	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Deferred\tcompensation\tliability | $\t\t\t\t\t15.7 | $\t\t\t\t\t13.2 |
| Pension\tand\tother\tpostretirement\tliabilities | 38.1 | 74.8 |
| Liabilities\trelated\tto\tassets\theld\tfor\tsale | - | 31.0 |
| Contingent\tlegal\tliabilities | 112.0 | - |
| Other | 113.4 | 84.1 |
| Total | $\t\t\t\t\t\t\t279.2 | $\t\t\t\t\t\t\t203.1 |

In	general,	our	self-insurance	reserves	are	recorded	on	an	undiscounted	basis.	However,	our	estimate	of	the	self-insurance	liabilities	we	assumed	in	the	acquisition	of	Allied	have	been	recorded	at	fair value,	and,	therefore,	have	been	discounted	to	present	value	using	a	rate	of	9.75%.	Discounted	reserves	are	accreted	to	interest	expense	through	the	period	that	they	are	paid.

Our	liabilities	for	unpaid	and	incurred	but	not	reported	claims	at	December	31,	2009	(which	includes	claims	for	workers'	compensation,	general	liability,	vehicle	liability	and	employee	health	care benefits)	were	$412.9	million	under	our	current	risk	management	program	and	are	included	in	other	accrued	liabilities	and	self-insurance	reserves,	net	of	current	portion	in	our	consolidated	balance sheets.	While	the	ultimate	amount	of	claims	incurred	is	dependent	on	future	developments,	we	believe,	recorded	reserves	are	adequate	to	cover	the	future	payment	of	claims.	However,	it	is	possible	that recorded	reserves	may	not	be	adequate	to	cover	the	future	payment	of	claims.	Adjustments,	if	any,	to	estimates	recorded	resulting	from	ultimate	claim	payments	will	be	reflected	in	our	consolidated statements	of	income	in	the	periods	in	which	such	adjustments	are	known.	The	following	table	summarizes	the	activity	in	our	self-insurance	reserves	for	the	years	ended	December	31:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $\t\t\t\t\t408.1 | $\t\t\t\t\t178.0 | $\t\t\t\t\t157.7 |
| Additions\tcharged\tto\texpense | 481.3 | 203.0 | 188.2 |
| Payments | (489.7) | (180.9) | (167.9) |
| Acquisition\tof\tAllied | - | 206.8 | - |
| Accretion\texpense | 13.2 | 1.2 | - |
| Balance\tat\tend\tof\tyear | 412.9 | 408.1 | 178.0 |
| Less:\tCurrent\tportion | (110.9) | (173.6) | (59.5) |
| Long-term\tportion | $\t\t302.0 | $\t\t234.5 | $\t\t118.5 |

As	of	December	31,	2009,	we	owned	or	operated	192	active	solid	waste	landfills	with	total	available	disposal	capacity	of	approximately	4.6	billion	in-place	cubic	yards.	Additionally,	we	currently	have post-closure	responsibility	for	132	closed	landfills.

# Accrued	Landfill	and	Environmental	Costs

A	summary	of	our	landfill	and	environmental	liabilities	as	of	December	31	is	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Landfill\tfinal\tcapping,\tclosure\tand\tpost-closure\tliabilities | $\t\t\t\t\t1,074.5 | $\t\t\t\t\t1,040.6 |
| Remediation | 554.1 | 389.9 |
|  | 1,628.6 | 1,430.5 |
| Less:\tCurrent\tportion | (245.4) | (233.4) |
| Long-term\tportion | $1,383.2 | $1,197.1 |

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:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Asset\tretirement\tobligation\tliabilities,\tbeginning\tof\tyear | $\t\t1,040.6 | $\t\t277.7 | $\t\t257.6 |
| Non-cash\tasset\tadditions | 32.5 | 20.5 | 19.5 |
| Additions\tdue\tto\tacquisitions | 72.3 | 813.1 | - |
| Asset\tretirement\tobligation\tadjustments | (57.4) | (32.6) | (1.8) |
| Payments | (100.9) | (27.9) | (14.7) |
| Accretion\texpense | 88.8 | 23.9 | 17.1 |
| Adjustments\tto\tliabilities\trelated\tto\tassets\theld\tfor\tsale | (1.4) | (34.1) | - |
| Asset\tretirement\tobligation\tliabilities,\tend\tof\tyear | 1,074.5 | 1,040.6 | 277.7 |
| Less:\tCurrent\tportion | (137.5) | (130.6) | (32.6) |
| Long-term\tportion | $937.0 | $910.0 | $245.1 |

The	initial	liabilities	recorded	as	part	of	our	acquisition	of	Allied	were	developed	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we	gathered	and	assessed	new information	about	the	facts	and	circumstances	surrounding	our	sites,	and,	as	a	result,	increased	the	fair	value	of	our	closure	and	post-closure	reserves	by	$72.3	million.	The	amounts	we	have	recorded	for these	obligations	are	not	comparable	to	the	amounts	Allied	recorded.	We	have	recorded	these	obligations	at	their	estimated	fair	values,	inflated	them	to	the	expected	payment	date	and	then	discounted	the obligations	using	our	credit-adjusted,	risk-free	rate	at	the	time	of	the	acquisition	of	9.75%.	Any	further	adjustments	to	our	final	capping,	closure	and	post-closure	liabilities	will	be	reflected	prospectively in	our	consolidated	statement	of	income	in	the	periods	in	which	such	adjustments	become	known.

We	review	our	landfill	asset	retirement	obligations	annually.	As	a	result,	we	recorded	a	net	decrease	in	amortization	expense	of	$5.1	million	for	the	year	ended	December	31,	2009	and	a	net	increase	in amortization	expense	of	$0.6	million	and	$3.3	million	for	the	years	ended	December	31,	2008	and	2007,	respectively,	primarily	related	to	changes	in	estimates	and	assumptions	concerning	the	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	$58.5	million	at	December	31,	2009	and	is	included	in restricted	cash	in	our	consolidated	balance	sheet.

The	expected	future	payments	for	final	capping,	closure	and	post-closure	as	of	December	31,	2009	are	as	follows:

# Environmental	Remediation	Liabilities

The	following	table	summarizes	the	activity	in	our	environmental	remediation	liabilities	for	the	years	ended	December	31:

The	initial	liabilities	recorded	at	December	31,	2008	as	part	of	our	acquisition	of	Allied	were	developed	using	provisional	amounts	based	upon	information	available	at	that	time.	During	2009,	we gathered	and	assessed	new	information	about	the	facts	and	circumstances	surrounding	Allied's	remediation	sites,	and,	as	a	result,	increased	the	fair	value	of	our	remediation	reserves	by	$181.9	million. Any	further	adjustments	to	our	remediation	reserves	resulting	from	changes	in	estimates	or	reserve	settlements	will	be	reflected	in	our	consolidated	statement	of	income	in	the	periods	in	which	such adjustments	become	known.	The	remediation	of	these	sites	is	in	various	stages	of	completion	from	having	received	an	initial	notice	from	a	regulatory	agency	and	commencing	an	investigation	to	being	in the	final	stages	of	post	remedial	monitoring.	See	also	Note	2,	Summary	of	Significant	Accounting	Policies	—	Environmental	Remediation	Liabilities,	for	further	information.	We	recorded	the	liabilities assumed	from	Allied	at	their	estimated	fair	values	using	a	discount	rate	of	9.75%.	Discounted	liabilities	are	accreted	to	interest	expense	through	the	period	that	they	are	paid.

The	expected	undiscounted	future	payments	for	remediation	costs	as	of	December	31,	2009	are	as	follows:

The	following	is	a	discussion	of	our	significant	remediation	matters:

Countywide	Landfill.	In	2007,	we	were	issued	Final	Findings	and	Orders	(F&Os)	by	the	Ohio	Environmental	Protection	Agency	(OEPA)	related	to	environmental	conditions	at	our	Countywide	Recycling and	Disposal	Facility	(Countywide)	in	East	Sparta,	Ohio	and	we	agreed	with	the	OEPA	to	undertake	certain	other	remedial	actions	as	well.	During	2008,	Republic	Services	of	Ohio	II,	LLC	(Republic- Ohio),	an	Ohio	limited	liability	company	and	wholly	owned	subsidiary	of	ours	and	parent	of	Countywide,	entered	into	an	Agreed	Order	on	Consent	(AOC)	with	the	EPA	requiring	the	reimbursement	of costs	incurred	by	the	EPA	and	requiring	Republic-Ohio	to	perform	certain	remediation	activities	at	Countywide.	Republic-Ohio	also	has	completed	construction	of	an	isolation	break	under	the	authority and	supervision	of	the	EPA.	On	September	30,	2009,	Republic-Ohio	entered	into	a	set	of	F&Os	with	the	OEPA	that	supersede	previous	F&Os	mentioned	above.	The	F&Os	require	the	implementation	of a	comprehensive	operation	and	maintenance	program	for	managing	the	remediation	area.	The	operation	and	maintenance	program	requires	Republic-Ohio	to	maintain	the	temporary	cap	and	other engineering	controls	to	prevent	odors	and	isolate	and	contain	the	reaction.	The	operation	and	maintenance	program	is	ultimately	designed	to	result	in	the	final	capping	and	closure	of	the	88-acre remediation	area	at	Countywide.	The	remediation	liability	for	Countywide	recorded	as	of	December	31,	2009	is	$74.2	million,	of	which	approximately	$5.7	million	is	expected	to	be	paid	during	2010.

Sunrise	Landfill.	On	August	1,	2008,	Republic	Services	of	Southern	Nevada	(RSSN),	our	wholly	owned	subsidiary,	signed	a	Consent	Decree	with	the	EPA,	the	Bureau	of	Land	Management	and	Clark County,	Nevada	related	to	the	Sunrise	Landfill.	Under	the	Consent	Decree,	RSSN	has	agreed	to	perform	certain	remedial	actions	at	the	Sunrise	Landfill	for	which	RSSN	and	Clark	County	were	otherwise jointly	and	severally	liable.	We	also	paid	$1.0	million	in	sanctions	related	to	the	Consent	Decree.	RSSN	is	currently	working	with	the	Clark	County	Staff	and	Board	of	Commissioners	to	develop	a mechanism	to	fund	the	costs	to	comply	with	the	Consent	Decree.	However,	we	have	not	recorded	any	potential	recoveries.	The	remediation	liability	for	Sunrise	recorded	as	of	December	31,	2009	is $37.0	million,	of	which	approximately	$12.8	million	is	expected	to	be	paid	during	2010.

Our	notes	payable,	capital	leases	and	long-term	debt	at	December	31,	2009	and	2008	are	listed	in	the	following	table,	and	are	presented	net	of	unamortized	discounts	and	premiums,	adjustments	to	fair value	related	to	hedging	transactions	and	the	unamortized	portion	of	adjustments	to	fair	value	recorded	in	purchase	accounting.	The	debt	we	acquired	as	part	of	the	acquisition	of	Allied	was	recorded	at fair	value	as	of	the	acquisition	date.

|  | December	31,	2009 | December	31,	2008 |
| :--- | :--- | :--- |
| $1.0\tbillion\tRevolver\tdue\t2012 | $\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t-\t $\t\t- |  |
| $1.75\tbillion\tRevolver\tdue\t2013,\tEurodollar\tand\tBase\tRate\tborrowings | 315.4 | 665.0 |
| Receivables\tsecured\tloans | 300.0 | 400.0 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t7.125%,\tdue\t2009 | - | 99.3 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.500%,\tdue\t2010 | 216.5 | 333.2 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t5.750%,\tdue\t2011 | 252.5 | 371.1 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.375%,\tdue\t2011 | 209.1 | 257.7 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.750%,\tdue\t2011 | 396.4 | 464.2 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t7.875%,\tdue\t2013 | - | 422.4 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.125%,\tdue\t2014 | 379.3 | 370.5 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t7.375%,\tdue\t2014 | - | 363.5 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t7.250%,\tdue\t2015 | 540.2 | 531.7 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t7.125%,\tdue\t2016 | 526.7 | 518.7 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.875%,\tdue\t2017 | 654.4 | 645.7 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t5.500%,\tdue\t2019 | 645.5 | - |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t5.250%,\tdue\t2021 | 600.0 | - |
| Debentures,\tfixed\tinterest\trate\tof\t9.250%,\tdue\t2021 | 93.1 | 92.8 |
| Senior\tnotes,\tfixed\tinterest\trate\tof\t6.086%,\tdue\t2035 | 249.4 | 249.1 |
| Debentures,\tfixed\tinterest\trate\tof\t7.400%,\tdue\t2035 | 266.8 | 266.0 |
| Senior\tsubordinated\tdebentures,\tfixed\tinterest\trate\tof\t4.250%,\tdue\t2034 | - | 201.3 |
| 8.25%;\tmaturities\tranging\tfrom\t2010\tto\t2037 | 1,223.7 | 1,308.2 |
| Other\tdebt\tunsecured\tand\tsecured\tby\treal\tproperty,\tequipment\tand\tother\tassets;\tinterest\trates\tranging\tfrom |  |  |
| 5.99%\tto\t11.90%\tmaturing\tthrough\t2042 | 93.6 | 142.1 |
| Total\tdebt | 6,962.6 | 7,702.5 |
| Less:\tCurrent\tportion | (543.0) | (504.0) |
| Long-term\tportion | $\t\t\t\t\t6,419.6 | $\t\t\t\t\t\t\t\t\t\t\t\t7,198.5 |

# Impact	of	Allied	Merger	on	Supplemental	Indentures	for	Certain	Debt

On	December	10,	2008,	we	received	the	requisite	consents	to	amend	the	supplemental	indentures	governing	certain	outstanding	debt	securities	of	Allied	Waste	North	America,	Inc.	(AWNA).	The amendment	to	each	supplemental	indenture	modified	the	ongoing	reporting	obligations	required	of	Allied.	Under	the	amended	supplemental	indentures,	the	ongoing	reporting	obligations	may	be	satisfied by	Republic.

The	collateral	that	had	secured	the	AWNA	senior	notes	and	the	BFI	Debentures	(as	defined	below)	equally	and	ratably	with	the	Allied	bank	credit	facility	was	released	upon	the	completion	of	our	merger with	Allied	and	the	repayment	of	that	facility.

# Credit	Facilities

In	April	2007,	we	increased	our	unsecured	revolving	credit	facility	from	$750.0	million	to	$1.0	billion	and	extended	the	term	from	2010	to	2012.	In	conjunction	with	the	merger	with	Allied,	in	September 2008,	we	entered	into	an	additional	$1.75	billion	revolving	credit	facility	with	a	group	of	banks.	This	credit	facility	was	used	initially	at	the	time	of	the	merger	to	refinance	extensions	of	credit	under Allied's	senior	credit	facility,	to	pay	fees	and	expenses	in	connection	therewith,	and	to	pay	fees	and	expenses	incurred	in	connection	with	the	merger.	We	also	amended	our	existing	$1.0	billion	credit facility	to	conform	certain	terms	of	the	facility	to	be	consistent	with	the	new	$1.75	billion	credit	facility.	We	did	not	change	the	maturity	date	of	the	$1.0	billion	credit	facility.

The	$1.0	billion	revolving	credit	facility	due	April	2012	and	the	$1.75	billion	revolving	credit	facility	due	September	2013	(collectively,	Credit	Facilities)	bear	interest	at	a	Base	Rate,	or	a	Eurodollar Rate,	both	terms	defined	in	the	agreements,	plus	an	applicable	margin	based	on	our	Debt	Ratings,	also	a	term	defined	in	the	agreements.	As	of	December	31,	2009	and	2008,	the	interest	rate	for	our borrowings	under	our	Credit	Facilities	was	1.82%	and	3.43%,	respectively.	Our	Credit	Facilities	are	also	subject	to	facility	fees	based	on	applicable	rates	defined	in	the	agreements	and	the	aggregate commitments,	regardless	of	usage.	Borrowings	under	our	Credit	Facilities	can	be	used	for	working	capital,	capital	expenditures,	letters	of	credit	and	other	general	corporate	purposes.	The	agreements governing	our	Credit	Facilities	require	us	to	maintain	certain	financial	and	other	covenants.	We	have	the	ability	to	pay	dividends	and	to	repurchase	common	stock	provided	that	we	are	in	compliance	with these	covenants.	We	had	$0.3	billion	and	$0.6	billion	of	Eurodollar	Rate	borrowings,	and	$1.6	billion	and	$1.7	billion	of	letters	of	credit	utilizing	availability	under	our	Credit	Facilities,	leaving $0.8	billion	and	$0.4	billion	of	availability	under	our	Credit	Facilities	at	December	31,	2009	and	2008,	respectively.	At	December	31,	2009,	we	were	in	compliance	with	the	covenants	under	our	Credit Facilities.

# Receivables	Secured	Loans

We	have	an	accounts	receivable	securitization	program	with	two	financial	institutions	that	allows	us	to	borrow	up	to	$300.0	million	on	a	revolving	basis	under	loan	agreements	secured	by	receivables.	As of	December	31,	2009,	receivables	secured	loans	totaled	$300.0	million.	In	May	2009,	we	renewed	the	facility	for	364	days	and	reduced	the	borrowing	capacity	from	$400.0	million	to	$300.0	million. We	expect	to	repay	the	facility	from	free	cash	flow,	draws	on	our	Credit	Facilities	or	proceeds	from	other	note	offerings	on	or	before	the	May	2010	maturity.

The	receivables	securitizing	this	facility	are	held	in	and	owned	by	a	wholly	owned	and	fully	consolidated	subsidiary.	This	subsidiary	is	a	separate	corporate	entity	whose	assets,	or	collateral	securing	the borrowings,	are	available	first	to	satisfy	the	claims	of	the	subsidiary's	creditors.	At	December	31,	2009,	the	total	amount	of	accounts	receivable	(gross)	serving	as	collateral	securing	the	borrowing	was $442.4	million.	This	facility	is	accounted	for	as	a	secured	borrowing	with	a	pledge	of	collateral.	The	receivables	and	debt	obligation	remain	on	our	consolidated	balance	sheet.	At	December	31,	2009,	we had	outstanding	borrowings	under	this	program	of	$300.0	million.	The	borrowings	under	this	program	bear	interest	at	the	financial	institutions'	commercial

paper	rate	plus	an	applicable	spread	and	interest	is	payable	monthly.	As	of	December	31,	2009	and	2008	the	interest	rate	for	our	borrowings	under	this	facility	was	1.57%	and	2.95%,	respectively.

# Senior	Notes	and	Debentures

In	December	2009	we	used	cash	on	hand	and	incremental	borrowings	under	our	Credit	Facilities	to	redeem	$400.0	million	of	our	7.375%	Senior	Notes	due	2014.	The	Senior	Notes	were	redeemed	at	a price	equal	to	103.688%	of	the	principal	amount	of	the	notes,	plus	accrued	and	unpaid	interest.	We	incurred	a	loss	of	$46.0	million	for	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt discounts	and	professional	fees	paid	to	effectuate	the	repurchase.

In	November	2009,	we	issued	$600.0	million	of	senior	notes	with	a	fixed	interest	rate	of	5.250%	due	2021	in	a	private	placement	transaction.	The	notes	are	general	senior	unsecured	obligations	and mature	on	November	15,	2021.	Interest	is	payable	semi-annually	on	May	15	and	November	15,	beginning	May	15,	2010.	These	senior	notes	are	guaranteed	by	each	of	our	subsidiaries	that	also	guarantee our	Credit	Facilities.	These	guarantees	are	general	senior	unsecured	obligations	of	the	subsidiary	guarantors.	In	addition,	we	entered	into	Registration	Rights	Agreements	with	the	initial	purchasers	of	the notes.	Under	the	Registration	Rights	Agreements,	we	agreed	to	use	our	reasonable	best	efforts	to	cause	to	become	effective	a	registration	statement	to	exchange	the	notes	for	freely	tradable	notes	issued by	us.	If	we	are	unable	to	effect	the	exchange	offer	within	365	days,	we	agreed	to	pay	additional	interest	on	the	notes.	We	used	the	net	proceeds	from	the	notes,	cash	on	hand	or	incremental	borrowings under	our	Credit	Facilities	as	follows:	(i)	to	redeem	$450.0	million	of	our	7.875%	Senior	Notes	due	2013	at	102.625%,	and	(ii)	to	redeem	$230.0	million	of	our	4.250%	Senior	Convertible	Debentures due	2034	at	par.	We	incurred	a	loss	of	$51.9	million	for	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase.

In	September	2009,	we	issued	$650.0	million	of	5.500%	senior	notes	due	2019	with	an	unamortized	discount	of	$4.5	million	at	December	31,	2009.	The	notes	are	general	senior	unsecured	obligations and	mature	on	September	15,	2019.	Interest	is	payable	semi-annually	on	March	15	and	September	15,	beginning	March	15,	2010.	The	notes	are	guaranteed	by	each	of	our	subsidiaries	that	also	guarantee our	Credit	Facilities.	These	guarantees	are	general	senior	unsecured	obligations	of	subsidiary	guarantors.	In	addition,	in	September	2009,	we	entered	into	a	Registration	Rights	Agreement	with	the representatives	of	the	initial	purchasers	of	the	notes.	Under	the	Registration	Rights	Agreement,	we	agreed	to	use	our	reasonable	best	efforts	to	cause	to	become	effective	a	registration	statement	to exchange	the	notes	for	freely	tradable	notes	issued	by	us.	If	we	are	unable	to	effect	the	exchange	offer	within	365	days,	we	agreed	to	pay	additional	interest	on	the	notes.	We	used	the	net	proceeds	from	the notes,	cash	on	hand	or	incremental	borrowings	under	our	Credit	Facilities	as	follows:	(i)	to	tender	for	$325.5	million	of	certain	outstanding	senior	notes	maturing	in	2010	and	2011	that	were	issued	by	us or	one	of	our	subsidiaries;	(ii)	approximately	$250	million	to	reduce	amounts	outstanding	under	our	Credit	Facility,	and	(iii)	approximately	$105	million	to	remit	estimated	tax	payments	related	to	our divestiture	of	assets	in	connection	with	our	merger	with	Allied.	We	incurred	a	loss	of	$31.8	million	for	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees paid	to	effectuate	the	repurchase.

During	2009	we	repurchased	a	portion	of	our	senior	notes	maturing	in	2010	and	2011	in	the	secondary	market.	As	a	result,	we	incurred	additional	losses	on	extinguishment	of	debt	of	$4.4	million	related to	premiums	paid	to	repurchase	debt,	charges	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchase.	Also	during	2009,	we	completed	the	required	divestitures	under	the consent	decree	with	the	DOJ.	Proceeds	from	the	sales	of	the	divested	assets	were	primarily	used	to	reduce	amounts	outstanding	under	our	Credit	Facilities.	Additionally,	our	senior	unsecured	notes bearing	interest	at	a	fixed	rate	of	7.125%	matured	during	2009.	We	repaid	the	remaining	principal	balance	of	$99.3	million	in	May	2009.

As	of	December	31,	2009	and	2008,	the	following	are	our	other	senior	notes	and	debentures:

•		Senior	notes	totaling	$216.5	million	and	$333.2	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$5.1	million	and	$16.8	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2010	and	bear	interest	at	a	fixed	rate	of	6.500%	which	is	payable	semi-annually	in	February	and	August.	These	senior	notes have	a	make-whole	call	provision	that	is	exercisable	at	any	time	at	a	stated	redemption	price.

•		Senior	notes	totaling	$252.5	million	and	$371.1	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$10.3	million	and	$28.9	million,	respectively.	These	notes	mature	in 2011	and	bear	interest	at	a	fixed	rate	of	5.750%	which	is	payable	semi-annually	in	February	and	August.	These	senior	notes	have	a	make-whole	call	provision	that	is	exercisable	at	any	time at	a	stated	redemption	price.

•		Senior	notes	totaling	$209.1	million	and	$257.7	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$7.9	million	and	$17.3	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2011	and	bear	interest	at	a	fixed	rate	of	6.375%	which	is	payable	semi-annually	in	April	and	October.	These	senior	notes	have	a make-whole	call	provision	that	is	exercisable	at	any	time	at	a	stated	redemption	price.

•		Senior	notes	totaling	$396.4	million	and	$464.2	million,	respectively,	net	of	unamortized	discount	of	$0.5	million	and	$0.9	million,	respectively,	and	net	of	adjustment	to	fair	market	value of	$9.9	million	and	$15.1	million,	respectively,	which	is	being	amortized	over	the	remaining	term	of	the	notes.	These	notes	mature	in	2011	and	bear	interest	at	a	fixed	rate	of	6.750%	which is	payable	semi-annually	in	February	and	August.

•		Senior	notes	totaling	$379.3	million	and	$370.5	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$45.7	million	and	$54.5	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2014	and	bear	interest	at	a	fixed	rate	of	6.125%	which	is	payable	semi-annually	in	February	and	August.	These	senior	notes have	a	make-whole	call	provision	that	is	exercisable	at	any	time	at	a	stated	redemption	price.

•		Senior	notes	totaling	$540.2	million	and	$531.7	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$59.8	million	and	$68.3	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2015	and	bear	interest	at	a	fixed	rate	of	7.250%	which	is	payable	semi-annually	in	March	and	September.	These	senior	notes have	a	make-whole	call	provision	that	is	exercisable	at	any	time	prior	to	March	15,	2010	at	the	stated	redemption	price.	These	notes	may	also	be	redeemed	on	or	after	March	15,	2010	at	the stated	redemption	price.

•		Senior	notes	totaling	$526.7	million	and	$518.7	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$73.3	million	and	$81.3	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2016	and	bear	interest	at	a	fixed	rate	of	7.125%	which	is	payable	semi-annually	in	May	and	November.	These	senior	notes	have a	make-whole	call	provision	that	is	exercisable	at	any	time	prior	to	May	15,	2011	at	the	stated	redemption	price.	These	notes	may	also	be	redeemed	on	or	after	May	15,	2011	at	the	stated redemption	price.

•		Senior	notes	totaling	$654.4	million	and	$645.7	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$95.6	million	and	$104.3	million,	respectively,	which	is	being amortized	over	the	remaining	term	of	the	notes.	These	notes	mature	in	2017	and	bear	interest	at	a	fixed	rate	of	6.875%	which	is	payable	semi-annually	in	June	and	December.	These	senior notes	have	a	make-whole	call	provision	that	is	exercisable	at	any	time	prior	to	June	1,	2012	at	a	stated	redemption	price.	These	notes	may	also	be	redeemed	on	or	after	June	1,	2012	at	the stated	redemption	price.

•		Debentures	totaling	$93.1	million	and	$92.8	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$6.4	million	and	$6.7	million,	respectively,	which	is	being	amortized	over the	remaining	term	of	the	notes.	These	notes	mature	in	2021	and	bear	interest	at	a	fixed	rate	of	9.250%	which	is	payable	semi-annually	in	May	and	November.	These	debentures	are	not redeemable	prior	to	maturity	and	are	not	subject	to	any	sinking	fund	requirements.

•		Senior	notes	totaling	$249.4	million	and	$249.1	million,	respectively,	net	of	unamortized	discount	of	$26.3	million	and	$26.6	million,	respectively.	During	March	2005,	we	exchanged $275.7	million	of	our	outstanding	7.125%	notes	due	in	2009	for	these	6.086%	senior	notes	due	in	2035.	We	paid	$27.6	million	in	connection	with	the	exchange,	which	is	being	amortized over	the	remaining	term	of	the	notes.

•		Debentures	totaling	$266.8	million	and	$266.0	million,	respectively,	net	of	unamortized	adjustment	to	fair	value	of	$93.2	million	and	$94.0	million,	respectively,	which	is	being	amortized over	the	remaining	term	of	the	notes.	These	notes	mature	in	2035	and	bear	interest	at	a	fixed	rate	of	7.400%	which	is	payable	semi-annually	in	March	and	September.	These	debentures	are not	subject	to	any	sinking	fund	requirements	and	may	be	redeemed	in	whole	or	in	part,	at	our	option	at	any	time.	The	redemption	price	is	equal	to	the	greater	of	the	principal	amount	of	the debentures	and	the	present	value	of	the	future	principal	and	interest	payments	discounted	at	a	rate	specified	under	the	terms	of	the	indenture.

# Tax-Exempt	Financings

As	of	December	31,	2009	and	2008,	we	had	$1,223.7	million	and	$1,308.2	million,	respectively,	of	fixed	and	variable	rate	tax-exempt	financings	outstanding	with	maturities	ranging	from	2010	to	2037. During	2008,	we	assumed	$527.0	million	of	tax-exempt	bonds	and	other	tax-exempt	financings	as	part	of	our	acquisition	of	Allied.	At	December	31,	2009	and	2008,	the	total	of	the	unamortized adjustment	to	fair	value	recorded	in	purchase	accounting	for	the	assumed	tax-exempt	financings	was	$49.0	million	and	$52.9	million,	respectively,	which	is	being	amortized	to	interest	expense	over	the remaining	terms	of	the	debt.

Approximately	two-thirds	of	our	tax-exempt	financings	are	remarketed	weekly	or	daily	by	a	remarketing	agent	to	effectively	maintain	a	variable	yield.	These	variable	rate	tax-exempt	financings	are	credit enhanced	with	letters	of	credit	having	terms	in	excess	of	one	year	issued	by	banks	with	credit	ratings	of	AA	or	better.	The	holders	of	the	bonds	can	put	them	back	to	the	remarketing	agent	at	the	end	of each	interest	period.	To	date,	the	remarketing	agents	have	been	able	to	remarket	our	variable	rate	unsecured	tax-exempt	bonds.

As	of	December	31,	2009,	we	had	$236.6	million	of	restricted	cash,	of	which	$93.1	million	represented	proceeds	from	the	issuance	of	tax-exempt	bonds	and	other	tax-exempt	financings	and	will	be	used to	fund	capital	expenditures	under	the	terms	of	the	agreements.	Restricted	cash	also	includes	amounts	held	in	trust	as	a	financial	guarantee	of	our	performance.

# Other	Debt

Other	debt	primarily	includes	capital	lease	liabilities	of	$91.9	million	and	$139.5	million	as	of	December	31,	2009	and	2008,	respectively,	with	maturities	ranging	from	2010	to	2042.

# Future	Maturities	of	Debt

Aggregate	maturities	of	notes	payable,	capital	leases	and	other	long-term	debt	as	of	December	31,	2009,	excluding	non-cash	discounts,	premiums,	adjustments	to	fair	value	related	to	hedging	transactions and	adjustments	to	fair	value	recorded	in	purchase	accounting	totaling	$467.5	million,	are	as	follows:

Included	in	2010	maturities	is	the	receivables	secured	loan,	which	is	a	364-day	liquidity	facility	maturing	in	May	2010	and	has	a	balance	of	$300.0	million	at	December	31,	2009.	We	expect	to	repay	the facility	on	or	before	the	May	2010	maturity.

# Fair	Value	of	Debt

The	fair	value	of	our	fixed	rate	senior	notes	using	quoted	market	rates	is	$5.7	billion	and	$5.2	billion	at	December	31,	2009	and	2008,	respectively.	The	carrying	value	of	these	fixed	rate	unsecured	notes is	$5.0	billion	at	December	31,	2009	and	2008.	The	carrying	amounts	of	our	remaining	notes	payable	and	tax-exempt	financing	approximate	fair	value	because	interest	rates	are	variable	and,	accordingly, approximate	current	market	rates	for	instruments	with	similar	risk	and	maturities.	The	fair	value	of	our	debt	is	determined	as	of	the	balance	sheet	date	and	is	subject	to	change.

# Guarantees

Substantially	all	of	our	subsidiaries	have	guaranteed	our	obligations	under	the	Credit	Facilities.

Substantially	all	of	our	subsidiaries	guarantee	each	series	of	senior	notes	issued	by	our	parent	company,	Republic	Services,	Inc.	Our	parent	company	and	substantially	all	of	our	subsidiaries	guarantee each	series	of	senior	notes	issued	by	our	subsidiary	Allied	Waste	North	America,	Inc.	(AWNA	notes)	and	each	series	of	senior	notes	issued	by	our	subsidiary	Browning-Ferris	Industries,	LLC	(successor to	Browning-Ferris	Industries,	Inc.)	(BFI	notes).	All	of	these	guarantees	would	be	automatically	released	upon	the	release	of	our	subsidiaries	from	their	guarantee	obligations	under	the	Credit	Facilities, except	the	guarantee	of	Allied	in	the	case	of	the	AWNA	notes,	and	the	guarantees	of	Allied	and	Allied	Waste	North	America,	Inc.	in	the	case	of	the	BFI	notes.

We	have	guaranteed	some	of	the	tax-exempt	bonds	of	our	subsidiaries.	If	a	subsidiary	fails	to	meet	its	obligations	associated	with	tax-exempt	bonds	as	they	come	due,	we	will	be	required	to	perform under	the	related	guarantee	agreement.	No	additional	liability	has	been	recorded	for	these	guarantees	because	the	underlying	obligations	are	reflected	in	our	consolidated	balance	sheets.

# Interest	Paid

Interest	paid	was	$471.6	million,	$93.7	million	and	$95.2	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	The	components	of	interest	expense	are	as	follows:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | $\t\t\t\t\t453.5 | $\t\t\t\t\t123.9 | $\t\t\t\t\t97.8 |
| Accretion\tof\tdebt\tdiscounts | 92.1 | 10.1 | - |
| Accretion\tof\tremediation\tand\trisk\treserves | 58.1 | 0.5 | - |
| Less:\tcapitalized\tinterest | (7.8) | (2.6) | (3.0) |
| Total\tinterest\texpense | $\t\t\t\t\t\t\t595.9 | $\t\t\t\t\t\t\t131.9 | $\t\t\t\t\t\t\t\t\t94.8 |

# Interest	Rate	Swap	Agreements

Our	ability	to	obtain	financing	through	the	capital	markets	is	a	key	component	of	our	financial	strategy.	Historically,	we	have	managed	risk	associated	with	executing	this	strategy,	particularly	as	it	relates to	fluctuations	in	interest	rates,	by	using	a	combination	of	fixed	and	floating	rate	debt.	We	also	entered	into	interest	rate	swap	agreements	to	manage	risk	associated	with	fluctuations	in	interest	rates.	The swap	agreements	have	a	total	notional	value	of	$210.0	million	and	mature	in	August	2011.	This	maturity	is	identical	to	our	unsecured	notes	that	also	mature	in	2011.	Under	the	swap	agreements,	we	pay interest	at	floating	rates	based	on	changes	in	LIBOR	and	receive	interest	at	fixed	rates	of	6.75%.	We	have	designated	these	agreements	as	hedges	of	changes	in	the	fair	value	of	our	fixed-rate	debt.	We have	determined	that	these	agreements	qualify	for	the	short-cut	method	and,	therefore,	changes	in	the	fair	value	of	the	agreements	are	assumed	to	be	perfectly	effective	in	hedging	changes	in	the	fair	value of	our	fixed	rate	debt	due	to	changes	in	interest	rates.

As	of	December	31,	2009	and	2008,	interest	rate	swap	agreements	are	reflected	at	their	fair	value	of	$9.9	million	and	$15.1	million,	respectively,	and	are	included	in	other	assets	and	as	an	adjustment	to long-term	debt	in	our	consolidated	balance	sheets.	During	the	years	ended	December	31,	2009,	2008	and	2007,	we	recorded	net	interest	income	of	$8.7	million	and	$3.8	million	and	net	interest	expense of	$2.3	million,	respectively,	related	to	our	interest	rate	swap	agreements,	which	is	included	in	interest	expense	in	our	consolidated	statements	of	income.

The	following	table	summarizes	the	impact	of	changes	in	the	fair	value	of	our	derivatives	and	the	underlying	hedged	items	on	our	results	of	operations	for	the	years	ended	December	31,	2009	and	2008:

|  | Gain	(Loss)	on	Swap | Gain	(Loss)	on	Swap | Gain	(Loss)	on	Fixed-Rate<br>Debt | Gain	(Loss)	on	Fixed-Rate<br>Debt |
| :--- | :--- | :--- | :--- | :--- |
| Consolidated\tStatement\tof\tIncome\tClassification | 2009 | 2008 | 2009 | 2008 |
| Interest\texpense | $\t8.7 | $\t3.8 | $\t(8.7) | $\t(3.8) |

From	time	to	time,	we	enter	into	treasury	locks	and	other	instruments	for	the	purpose	of	managing	exposure	to	fluctuations	in	interest	rates	in	anticipation	of	future	debt	issuances.	In	September	2009,	we entered	into	treasury	lock	agreements	having	an	aggregate	notional	amount	of	$500.0	million	to	hedge	interest	rates	on	10	year	U.S.	Treasury	Notes	in	connection	with	the	issuance	of	our	$650.0	million 5.500%	Senior	Notes.	Upon	issuance	of	the	notes	we	terminated	the	treasury	locks	and	paid	approximately	$2.5	million	to	the	counterparties.	This	amount,	net	of	tax,	was	recorded	as	a	component	of accumulated	other	comprehensive	income	and	is	being	amortized	as	an	increase	to	interest	expense	over	the	life	of	the	issued	debt.	This	transaction	was	recorded	as	a	cash	flow	hedge.	As	of December	31,	2009,	there	were	no	treasury	lock	cash	flow	hedges	outstanding.

# 10. INCOME	TAXES

The	components	of	the	provision	for	income	taxes	for	the	years	ended	December	31,	are	as	follows:

Our	effective	income	tax	rate	is	adversely	impacted	by	expenses	incurred	which	are	non-deductible	for	tax,	disposition	of	assets	that	have	little	or	no	basis	for	tax	and	accruals	for	penalties	and	interest	on uncertain	tax	positions.	During	the	year	ended	December	31,	2008,	we	incurred	expenses	that	were	not	tax	deductible	as	a	result	of	the	merger	with	Allied.	In	addition,	lower	pre-tax	earnings	contributed to	the	increase	in	our	effective	tax	rate.

The	components	of	the	net	deferred	income	tax	asset	and	liability	at	December	31,	2009	and	2008	are	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Deferred\ttax\tliabilities\trelating\tto: |  |  |
| Differences\tbetween\tbook\tand\ttax\tbasis\tof\tproperty | $(616.6) | $(738.1) |
| Difference\tbetween\tbook\tand\ttax\tbasis\tof\tintangible\tassets | (704.3) | (630.7) |
| Total\tliabilities | (1,320.9) | (1,368.8) |
| Deferred\ttax\tassets\trelating\tto: |  |  |
| Difference\tbetween\tbook\tand\ttax\tbasis\tof\tother\tassets | 68.5 | 105.8 |
| Accruals\tnot\tcurrently\tdeductible | 309.9 | 267.7 |
| Environmental\treserves | 298.4 | 236.3 |
| Deferred\ttaxes\ton\tuncertain\ttax\tpositions | 83.2 | 186.0 |
| State\tnet\toperating\tloss\tcarryforwards | 135.3 | 157.8 |
| Other | 21.8 | 44.6 |
| Total\tassets | 917.1 | 998.2 |
| Valuation\tallowance | (126.5) | (156.4) |
| Net\tdeferred\ttax\tasset | 790.6 | 841.8 |
| Net\tdeferred\ttax\tliabilities | $(530.3) | $(527.0) |

Changes	in	the	deferred	tax	valuation	allowance	for	the	years	ended	December	31,	2009	and	2008	are	as	follows:

We	have	state	net	operating	loss	carryforwards,	with	an	estimated	tax	effect	of	$135.3	million,	available	at	December	31,	2009.	These	state	net	operating	loss	carryforwards	expire	at	various	times between	2010	and	2023.	We	believe	that	it	is	more	likely	than	not	that	the	benefit	from	certain	state	net	operating	loss	carryforwards	will	not	be	realized.	In	recognition	of	this	risk,	we	have	provided	a valuation	allowance	of	$122.9	million	on	deferred	tax	assets	relating	to	these	state	net	operating	loss	carryforwards.	In	assessing	the	realizability	of	deferred	tax	assets,	management	considers	whether	it	is more	likely	than	not	that	some	portion	or	all	of	the	deferred	tax	assets	will	not	be	realized	after	the	initial	recognition	of	the	deferred	tax	asset.	We	provide	valuation	allowances,	as	needed,	to	offset portions	of	deferred	tax	assets	due	to	uncertainty	surrounding	the	future	realization	of	such	deferred	tax	assets.	We	adjust	the	valuation	allowance	in	the	period	management	determines	it	is	more	likely than	not	that	deferred	tax	assets	will	or	will	not	be	realized.

We	have	recorded	$98.2	million	of	deferred	tax	assets	and	$637.2	million	of	deferred	income	taxes	and	other	long-term	tax	liabilities	as	part	of	our	purchase	price	allocation	for	our	acquisition	of	Allied.

During	the	year	ended	December	31,	2009,	we	recorded	a	tax	charge	of	$13.5	million	related	to	non-deductible	goodwill	expensed	as	a	result	of	various	divestitures.	During	the	year	ended	December	31, 2008,	we	recorded	a	tax	charge	of	$12.3	million	related	to	non-deductible	compensation	payouts	as	a	result	of	the	merger	with	Allied.	During	the	year	ended	December	31,	2007,	we	recorded	a	net	tax benefit	of	$4.8	million	in	our	provision	for	income	taxes	related	to	the	resolution	of	various	tax	matters,	including	the	effective	completion	of	the	Internal	Revenue	Service	(IRS)	audits	of	our consolidated	tax	returns	for	fiscal	years	2001	through	2004.

We	made	income	tax	payments	(net	of	refunds	received)	of	approximately	$444	million,	$128	million	and	$152	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	During 2008,	approximately	$32	million	of	federal	tax	payments	were	deferred	and	paid	in	2009	as	a	result	of	the	merger	with	Allied.

The	following	table	summarizes	the	activity	in	our	gross	unrecognized	tax	benefits	for	the	years	ended	December	31:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $\t\t\t\t\t611.9 | $\t\t\t\t\t\t23.2 | $\t\t\t\t\t\t56.4 |
| Additions\tdue\tto\tthe\tacquisition\tof\tAllied | 13.3 | 582.9 | - |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tcurrent\tyear | 3.9 | 10.6 | 16.3 |
| Reductions\tfor\ttax\tpositions\trelated\tto\tthe\tcurrent\tyear | - | (5.1) | (17.2) |
| Additions\tfor\ttax\tpositions\tof\tprior\tyears | 5.6 | 2.0 | 2.0 |
| Reductions\tfor\ttax\tpositions\tof\tprior\tyears | (24.1) | (1.3) | (12.3) |
| Reductions\tfor\ttax\tpositions\tresulting\tfrom\tlapse\tof\tstatute\tof\tlimitations | (0.5) | (0.4) | (0.4) |
| Settlements | (367.9) | - | (21.6) |
| Balance\tat\tend\tof\tyear | $\t\t242.2 | $\t\t\t\t\t\t611.9 | $\t\t\t\t\t\t\t23.2 |

New	accounting	guidance	for	business	combinations	is	effective	for	our	2009	financial	statements.	This	new	guidance	significantly	changes	the	treatment	of	acquired	uncertain	tax	liabilities.	Under previous	guidance,	changes	in	acquired	uncertain	tax	liabilities	were	recognized	through	goodwill.	Under	this	new	guidance,	subsequent	changes	in	acquired	unrecognized	tax	liabilities	are	recognized through	the	income	tax	provision.	As	of	December	31,	2009,	$211.9	million	of	the	$242.2	million	of	unrecognized	tax	benefits	related	to	tax	positions	taken	by	Allied	prior	to	the	merger.

Included	in	the	balance	at	December	31,	2009	are	approximately	$217.6	million	of	unrecognized	tax	benefits	(net	of	the	federal	benefit	on	state	issues)	that,	if	recognized,	would	affect	the	effective income	tax	rate	in	future	periods.

During	2009,	we	settled	our	outstanding	tax	dispute	related	to	Allied's	risk	management	companies	(see	—	Risk	Management	Companies)	with	both	the	DOJ	and	the	IRS.	This	settlement	reduced	our gross	unrecognized	tax	benefits	by	approximately	$299.6	million.	During	2009,	we	also	settled	with	the	IRS,	through	an	accounting	method	change,	our	outstanding	tax	dispute	related	to	intercompany insurance	premiums	paid	to	Allied's	captive	insurance	company.	This	settlement	reduced	our	gross	unrecognized	tax	benefits	by	approximately	$62.6	million.	In	addition	to	these	federal	matters,	we	also resolved	various	state	matters	that,	in	the	aggregate,	reduced	our	gross	unrecognized	tax	benefits	during	2009	by	approximately	$5.8	million.

We	recognize	interest	and	penalties	as	incurred	within	the	provision	for	income	taxes	in	our	consolidated	statements	of	income.	Related	to	the	unrecognized	tax	benefits	previously	noted,	we	accrued interest	of	$24.5	million	during	2009	and,	in	total	as	of	December	31,	2009,	have	recognized	a	liability	for	penalties	of	$1.5	million	and	interest	of	$92.3	million.	During	2008,	we	accrued	penalties	of $0.2	million	and	interest	of	$5.2	million	and,	in	total	at	December	31,	2008,	had	recognized	a	liability	for	penalties	of	$88.1	million	and	interest	of	$180.0	million.	During	2007,	we	accrued	interest	of $0.9	million	and,	in	total	at	December	31,	2007,	had	recognized	a	liability	for	penalties	and	interest	of	$5.5	million.

The	decrease	in	accrued	interest	and	penalties	between	2009	and	2008	was	driven	mainly	by	the	settlements	discussed	previously.	However,	the	current	year	interest	expense	increased	due	to	the	accrual of	a	full	twelve	months	of	interest	expense	on	Allied's	acquired	uncertain	tax	positions	versus	only	one	month	of	accrued	interest	expense	recorded	in	2008.

Gross	unrecognized	tax	benefits	that	we	expect	to	settle	in	the	following	twelve	months	are	in	the	range	of	$10.0	million	to	$20.0	million.	It	is	reasonably	possible	that	the	amount	of	unrecognized	tax benefits	will	increase	or	decrease	in	the	next	twelve	months.

We	and	our	subsidiaries	are	subject	to	income	tax	in	the	U.S.	and	Puerto	Rico,	as	well	as	income	tax	in	multiple	state	jurisdictions.	We	have	acquired	Allied's	open	tax	periods	as	part	of	the	acquisition. Allied	is	currently	under	examination	or	administrative	review	by	various	state	and	federal	taxing	authorities	for	certain	tax	years,	including	federal	income	tax	audits	for	calendar	years	2000	through 2007.

Prior	to	the	merger,	the	IRS	had	commenced	an	examination	of	our	2005	through	2007	tax	years	and	this	exam	is	currently	ongoing.	In	2009,	the	IRS	opened	an	examination	of	our	2008	tax	year.	We	are also	under	state	examination	in	various	jurisdictions	for	various	tax	years.	These	audits	are	ongoing.

We	are	subject	to	numerous	federal,	foreign,	state	and	local	tax	rules	and	regulations.	Our	compliance	with	such	rules	and	regulations	is	periodically	audited	by	tax	authorities.	These	authorities	may challenge	the	positions	taken	in	our	tax	filings.	As	such,	to	provide	for	certain	potential	tax	exposures,	we	maintain	liabilities	for	uncertain	tax	positions	for	our	estimate	of	the	final	outcome	of	the examinations.

We	believe	that	the	liabilities	for	uncertain	tax	positions	recorded	are	adequate.	However,	a	significant	assessment	against	us	in	excess	of	the	liabilities	recorded	could	have	a	material	adverse	effect	on our	consolidated	financial	position,	results	of	operations	or	cash	flows.

In	April	2002,	Allied	exchanged	minority	partnership	interests	in	four	waste-to-energy	facilities	for	majority	partnership	interests	in	equipment	purchasing	businesses,	which	are	now	wholly	owned subsidiaries.	In	November	2008,	the	IRS	issued	a	formal	disallowance	to	Allied	contending	that	the	exchange	was	instead	a	sale	on	which	a	corresponding	gain	should	have	been	recognized.	We	believe our	position	is	supported	by

relevant	technical	authorities	and	strong	business	purpose	and	we	intend	to	vigorously	defend	our	position	on	this	matter.	Although	we	intend	to	vigorously	defend	our	position	on	this	matter,	if	the exchange	is	treated	as	a	sale,	we	estimate	it	could	have	a	potential	federal	and	state	cash	tax	impact	of	approximately	$156	million	plus	accrued	interest	through	December	31,	2009	of	approximately $59	million.	In	addition,	the	IRS	has	asserted	a	penalty	of	20%	of	the	additional	income	tax	due.	The	potential	tax	and	interest	(but	not	penalty	or	penalty-related	interest)	of	a	full	adjustment	for	this matter	have	been	fully	reserved	in	our	consolidated	balance	sheet	at	December	31,	2009.	The	successful	assertion	by	the	IRS	of	penalty	and	penalty-related	interest	in	connection	with	this	matter	could have	a	material	adverse	impact	on	our	consolidated	results	of	operations	and	cash	flows.

# 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)	to	replace	the	1998	Plan	when	it	expired.	The	2007	Plan	was	approved	by	our	stockholders	in	May	2007.	We	believe	that	such	awards	better	align	the	interests	of	our employees	with	those	of	our	stockholders.	There	were	6.8	million	shares	reserved	for	future	grants	under	the	2007	Plan	as	of	December	31,	2009.

Options	granted	under	the	1998	Plan	and	the	2007	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	adopted	the	Republic	Services,	Inc.	2006	Incentive	Stock	Plan	(formerly	known	as	the	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan	(the	2006	Plan)) as	amended	and	restated	effective	December	5,	2008.	Allied's	stockholders	approved	the	2006	Plan	in	May	2006.	The	2006	Plan	was	amended	and	restated	effective	December	5,	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	merger.	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	merger.	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,	2009,	there	were	approximately	15.3	million	shares	of	common	stock	reserved	for	future	grants	under	the	2006	Plan.

# Stock	Options

We	use	a	lattice	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	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,	2009,	2008	and	2007	were	$3.79,	$4.36	and	$6.49 per	option,	respectively,	which	were	calculated	using	the	following	weighted-average	assumptions:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Expected\tvolatility | 28.7% | 27.3% | 23.5% |
| Risk-free\tinterest\trate | 1.4% | 1.7% | 4.8% |
| Dividend\tyield | 3.1% | 2.9% | 1.5% |
| Expected\tlife\t(in\tyears) | 4.2 | 4.2 | 4.0 |
| Contractual\tlife\t(in\tyears) | 7 | 7 | 7 |
| Expected\tforfeiture\trate | 3.0% | 3.0% | 5.0% |

The	following	table	summarizes	the	stock	option	activity	for	the	years	ended	December	31,	2007,	2008	and	2009:

|  | Number<br>of	Shares | Weighted	Average<br>Exercise<br>Price	per	Share | Remaining<br>Contractual	Term<br>(Years) |  | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Outstanding\tat\tDecember\t31,\t2006 | 8.6 | $\t\t\t\t\t\t\t\t16.76 |  |  |  |
| Granted | 1.4 | 29.34 |  |  |  |
| Exercised | (2.2) | 13.58 |  |  | $\t\t\t\t\t\t\t\t\t36.6 |
| Cancelled | (0.1) | 23.39 |  |  |  |
| Outstanding\tat\tDecember\t31,\t2007 | 7.7 | 19.84 |  |  |  |
| Granted: |  |  |  |  |  |
| Granted\tas\treplacement\toptions\tfor\tAllied's\toutstanding\tstock\toptions | 7.6 | 25.77 |  |  |  |
| Granted\tother | 5.2 | 25.46 |  |  |  |
| Exercised | (1.4) | 15.93 |  |  | $19.9 |
| Cancelled | (0.4) | 42.07 |  |  |  |
| Outstanding\tat\tDecember\t31,\t2008 | 18.7 | 23.57 |  |  |  |
| Granted | 0.3 | 21.03 |  |  |  |
| Exercised | (2.1) | 18.12 |  |  | $17.8 |
| Cancelled | (1.8) | 28.59 |  |  |  |
| Outstanding\tat\tDecember\t31,\t2009 | 15.1 | $23.69 |  | 5.0 | $75.0 |
| Exercisable\tat\tDecember\t31,\t2009 | 12.0 | $23.73 |  | 4.8 | $60.3 |

Stock	options	granted	in	2008	primarily	include	stock	options	granted	as	part	of	our	annual	grant	to	employees	in	February	2008,	as	part	of	our	new	annual	grant	program	in	December	2008	and	as	grants of	replacement	options	for	Allied's	outstanding	stock	options	as	of	the	effective	date	of	the	merger,	in	accordance	with	the	terms	of	the	merger	agreement.	In	December	2008,	we	replaced	Allied's outstanding,	vested	and	unvested	stock	options	with	Republic	stock	options	with	similar	terms	and	conditions,	and	recorded	a	credit	to	additional-paid-in-capital	of	$61.2	million	as	part	of	the	purchase price	paid	for	the	acquisition.

Additionally,	as	of	the	effective	date	of	the	merger	with	Allied,	all	of	Republic's	unvested	stock	options	outstanding	were	vested	in	accordance	with	the	change	in	control	provisions	of	the	1998	and	2007 Plans.	We	recorded	compensation	expense	of	$6.5	million	in	December	2008	to	recognize	the	immediate	vesting	of	the	stock	options.

As	of	December	31,	2009,	total	unrecognized	compensation	expense	related	to	outstanding	stock	options	was	$7.4	million,	which	will	be	recognized	over	a	weighted	average	period	of	2.1	years.	The	total fair	value	of	stock	options	that	vested	in	2009,	2008	and	2007	was	$3.9	million,	$21.5	million	and	$2.3	million,	respectively.

We	classified	excess	tax	benefits	of	$2.5	million,	$4.5	million	and	$6.0	million	as	cash	flows	from	financing	activities	for	the	years	ended	December	31,	2009,	2008	and	2007,	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	deferred	stock	unit	and	restricted	stock	activity	for	the	years	ended	December	31,	2007,	2008	and	2009:

|  | Number	of	Deferred<br>Stock	Units	and<br>Restricted	Stock<br>(In	Thousands) | Weighted-Average<br>Grant	Date<br>Fair	Value	per<br>Share | Weighted-Average<br>Remaining<br>Contractual<br>Term	(Years) | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Unissued\tat\tDecember\t31,\t2006 | 289.0 | $23.42 |  |  |
| Granted | 237.7 | 29.33 |  |  |
| Vested\tand\tissued | (127.5) | 23.71 |  |  |
| Unissued\tat\tDecember\t31,\t2007 | 399.2 | 26.84 |  |  |
| Granted | 467.1 | 27.21 |  |  |
| Vested\tand\tissued | (443.8) | 29.67 |  |  |
| Cancelled | (186.3) | 25.27 |  |  |
| Unissued\tat\tDecember\t31,\t2008 | 236.2 | 23.50 |  |  |
| Granted | 516.0 | 23.92 |  |  |
| Vested\tand\tIssued | (67.0) | 23.28 |  |  |
| Cancelled | (32.0) | 23.50 |  |  |
| Unissued\tat\tDecember\t31,\t2009 | 653.2 | $\t23.85 | 1.1 | $\t\t\t\t\t18.5 |
| Vested\tand\tunissued\tat\tDecember\t31,\t2009 | 78.7 | $\t\t\t\t\t\t\t\t\t\t\t\t24.80 |  |  |

During	the	year	ended	December	31,	2009	we	awarded	320,354	deferred	stock	units	and	during	each	of	the	years	ended	December	31,	2008	and	2007,	we	awarded	36,000	deferred	stock	units	to	our	non- employee	directors	under	our	1998	Plan.	These	stock	units	vest	immediately,	but	the	directors	receive	the	underlying	shares	only	after	their	board	service	ends	or	a	change	in	control	occurs,	as	defined	by the	1998	Plan.	The	stock	units	do	not	carry	any	voting	or	dividend	rights,	except	the	right	to	receive	additional	stock	units	in	lieu	of	dividends.

During	the	year	ended	December	31,	2009,	we	awarded	195,611	shares	of	restricted	stock	to	executives	and	other	officers	and	directors,	of	which	110,669	of	the	shares	vest	effective	May	14,	2010	and 38,670	of	the	shares	awarded	vest	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	will	vest	February	19,	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.	Additionally,	granted	but	unvested	shares	are	forfeited	in	the	event	the	participant	resigns	employment	with us	for	other	than	good	reason.

Incentive	Plan.	As	of	the	effective	date	of	the	acquisition	of	Allied,	all	of	Republic's	remaining	unvested	restricted	stock	outstanding	was	vested	in	accordance	with	the	change	in	control	provisions	of	the 1998	Plan.

The	fair	value	of	stock	units	and	restricted	shares	is	based	on	the	closing	market	price	on	the	date	of	grant.	The	compensation	expense	related	to	these	stock	units	and	restricted	shares	is	amortized	ratably over	the	vesting	period,	or	the	accelerated	vesting	period	if	certain	performance	targets	are	achieved.

As	of	the	effective	date	of	the	merger	with	Allied,	all	of	Republic's	outstanding	and	unvested	restricted	stock	was	vested	in	accordance	with	the	change	in	control	provisions	of	the	1998	and	2007	Plans. We	recorded	compensation	expense	of	$5.3	million	in	December	2008	to	recognize	the	immediate	vesting	of	the	restricted	stock.	In	addition,	the	deferred	stock	units	were	vested	and	a	cash	payment	was made	totaling	$4.0	million	based	on	the	fair	value	of	the	deferred	stock	units	as	of	the	date	of	vesting.

During	the	years	ended	December	31,	2009,	2008	and	2007,	compensation	expense	related	to	stock	units	and	restricted	shares	totaled	$7.2	million,	$10.0	million	and	$4.6	million,	respectively.

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.

During	2002,	the	Plan	and	the	Pension	Plan	of	San	Mateo	County	Scavenger	Company	and	Affiliated	Divisions	of	Browning-Ferris	Industries	of	California,	Inc.	(San	Mateo	Pension	Plan)	were	merged into	one	plan.	However,	benefits	continue	to	be	determined	under	two	separate	benefit	structures.

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.

The	San	Mateo	Pension	Plan	covers	certain	employees	at	the	San	Mateo	location	excluding	employees	who	are	covered	under	collective	bargaining	agreements	under	which	benefits	had	been	the	subject of	good	faith	bargaining	unless	the	collective	bargaining	agreement	otherwise	provides	for	such	coverage.	Benefits	are	based	on	the	participant's	highest	five	years	of	average	earnings	out	of	the	last fifteen	years	of	service.	Effective	January	1,	2004,	participants	who	have	attained	the	age	of	55	and	completed	30	years	of	credited	service	may	elect	early	retirement	without	any	reduction	in	benefits. Effective	January	1,	2006,	the	San	Mateo	Pension	Plan	was	amended	to	modify	the	definition	of	eligible	employees	to	exclude	highly	compensated	employees.	In	addition,	no	new	employees	hired	or rehired	after	December	31,	2005	are	eligible	to	participate	in	or	accrue	a	benefit	under	the	San	Mateo	Pension	Plan.

# BFI	Post	Retirement	Healthcare	Plan

The	BFI	Post	Retirement	Healthcare	Plan	provides	continued	medical	coverage	for	certain	current	and	former	employees	following	their	retirement,	including	some	employees	subject	to	collective bargaining	agreements.	Eligibility	for	this	plan	is	limited	to	certain	employees	who	had	ten	or	more	years	of	service	and	were	age	55

or	older	as	of	December	31,	1998,	and	certain	employees	in	California	who	were	hired	on	or	before	December	31,	2005	and	who	retire	on	or	after	age	55	with	at	least	thirty	years	of	service.

# Multi-Employer	Pension	Plans

We	contribute	to	25	multi-employer	pension	plans	under	collective	bargaining	agreements	covering	union-represented	employees.	Approximately	17%	of	our	total	current	employees	are	participants	in such	multi-employer	plans.	These	plans	generally	provide	retirement	benefits	to	participants	based	on	their	service	to	contributing	employers.	We	do	not	administer	these	multi-employer	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	multi-employer	plans	to	which	we	contribute	are	either	"critical"	or	"endangered"	as	those	terms	are	defined	in	the	Pension Protection	Act	enacted	in	2006	(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	are	unable	to	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	multi-employer	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,	multi-employer	pension	plan	would	require	us	to	make	payments	to	the	plan	for	our	proportionate	share	of	the	multi-employer	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.

# Supplemental	Executive	Retirement	Plan

Our	Supplemental	Executive	Retirement	Plan	(SERP)	provides	retirement	benefits	to	certain	of	Allied's	employees	and	former	employees.	SERP	participants	whose	employment	with	us	has	been	severed as	a	result	of	the	merger	received	cash	settlements	six	months	following	their	respective	separation	dates.	Benefits	for	SERP	participants	who	remain	with	Republic	were	frozen	as	of	the	effective	date	of the	merger.	However,	these	active	participants	will	continue	to	accrue	interest	credits	at	the	annual	rate	of	6.0%	until	they	are	eligible	for	retirement.	SERP	participants	who	retired	prior	to	the	acquisition will	continue	to	receive	their	benefits	in	accordance	with	the	original	plan	provisions	which	allow	for	a	maximum	of	ten	years	of	retirement	benefits	equal	to	60%	of	each	participant's	respective	average base	salary	during	the	three	consecutive	full	calendar	years	of	employment	immediately	preceding	their	date	of	retirement.	At	December	31,	2009,	there	were	one	retired	and	two	active	participants	in	the plan.	As	the	SERP	is	frozen,	no	assumptions	are	made	about	future	compensation	levels,	and	as	such,	there	is	no	difference	between	the	projected	benefit	and	the	accumulated	benefit	obligation.

We	also	assumed	post-retirement	medical	obligations	associated	with	the	SERP	totaling	$1.8	million	as	of	the	acquisition	date.	Medical	liabilities	were	$1.4	million	and	$2.0	million	at	December	31, 2009	and	2008	and	are	included	in	the	post	retirement	healthcare	amounts	in	the	table	below.

We	are	required	to	separately	recognize	the	overfunded	or	underfunded	status	of	our	pension	and	other	post	retirement	employee	benefit	plans	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	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	accumulated	benefit	obligation	and	reconciliations	of	the	changes	in	the	projected	benefit	obligations,	the	plan	assets	and	the	accounting	funded	status	of	our	defined benefit	pension	plan,	SERP	and	post	retirement	healthcare	plans	for	the	years	ended	December	31,	2009	and	2008.

|  | Defined	Benefit |  | Postretirement |  | Supplemental	Executive |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pension\tPlan | Pension\tPlan | Healthcare\tPlans | Healthcare\tPlans | Retirement\tPlan | Retirement\tPlan |
|  | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Accumulated\tBenefit\tObligation | $364.7 | $360.6 | $- | $- | $4.7 | $12.7 |
| Change\tin\tProjected\tBenefit\tObligation: |  |  |  |  |  |  |
| Projected\tbenefit\tobligation\tat\tbeginning\tof\tyear | $361.2 | $- | $3.2 | $- | $12.7 | $- |
| Acquisitions | - | 335.9 | - | 3.0 | - | 13.6 |
| Service\tcost | 0.2 | - | - | - | - | - |
| Interest\tcost | 20.2 | 1.8 | 0.2 | - | 0.5 | 0.1 |
| Actuarial\tloss\t(gain) | (1.8) | 25.2 | (0.5) | 0.2 | 0.1 | - |
| Benefits\tpaid | (15.1) | (1.7) | (0.3) | - | (10.6) | (1.1) |
| Curtailment\tloss\t(gain) | - | - | (0.2) | - | 2.0 | 0.1 |
| Projected\tbenefit\tobligation\tat\tend\tof\tyear | $364.7 | $361.2 | $2.4 | $3.2 | $4.7 | $12.7 |
| Change\tin\tPlan\tAssets: |  |  |  |  |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tbeginning\tof\tyear | $293.9 | $- | $- | $- | $- | $- |
| Acquisitions | - | 274.2 | - | - | - | - |
| Actual\treturn\ton\tplan\tassets | 54.5 | 21.4 | - | - | - | - |
| Employer\tcontributions | - | - | 0.3 | - | 10.6 | 1.1 |
| Benefits\tpaid | (15.1) | (1.7) | (0.3) | - | (10.6) | (1.1) |
| Fair\tvalue\tof\tplan\tassets\tat\tend\tof\tyear | $\t333.3 | $293.9 | $- | $- | $- | $- |
| Unfunded\tstatus | $31.4 | $67.3 | $2.4 | $3.2 | $4.7 | $12.7 |
| Amounts\trecognized\tin\tthe\tstatement\tof\tfinancial\tposition\tconsist\tof: |  |  |  |  |  |  |
| Current\tliabilities | $- | $- | $0.2 | $0.2 | $0.2 | $8.2 |
| Noncurrent\tliabilities | 31.4 | 67.3 | 2.2 | 3.0 | 4.5 | 4.5 |
| Net\tamount\trecognized | $\t31.4 | $\t67.3 | $\t\t2.4 | $\t\t3.2 | $\t\t4.7 | $\t\t12.7 |
| Weighted\taverage\tassumptions\tused\tto\tdetermine\tbenefit\tobligations: |  |  |  |  |  |  |
| Discount\trate | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% |
| Rate\tof\tcompensation\tincrease | N/A | N/A | N/A | N/A | 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,	2009	are	as	follows:

|  | Defined	Benefit |  | Postretirement |  | Supplemental	Executive |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pension\tPlan | Pension\tPlan | Healthcare\tPlans | Healthcare\tPlans | Retirement\tPlan | Retirement\tPlan |
|  | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Components\tof\tnet\tperiodic\tbenefit\tcost: |  |  |  |  |  |  |
| Service\tcost | $0.2 | $- | $- | $- | $- | $- |
| Interest\tcost | 20.2 | 1.8 | 0.2 | - | 0.5 | 0.1 |
| Expected\treturn\ton\tplan\tassets | (21.4) | (1.7) | - | - | - | - |
| Curtailment\trecognition | - | - | \t\t\t\t(0.2) | - | 2.0 | 0.1 |
| Net\tperiodic\tbenefit\tcost | $\t\t\t\t(1.0) | $\t\t\t\t\t0.1 | $\t\t- | $\t\t\t\t\t\t\t- | $\t\t\t\t\t2.5 | $\t\t\t\t\t0.2 |
| Weighted\taverage\tassumptions\tused\tto\tdetermine\tnet\tperiodic\tbenefit\tcost: |  |  |  |  |  |  |
| Discount\trate | 5.75% | 6.50% | 5.75% | 6.50% | 5.75% | 6.50% |
| Expected\treturn\ton\tplan\tassets | 7.25% | 7.50% | N/A | N/A | N/A | N/A |
| Rate\tof\tcompensation\tincrease | 4.00% | 4.00% | N/A | N/A | N/A | N/A |

We	determine	the	discount	rate	used	in	the	measurement	of	our	obligations	based	on	a	model	which	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.

A	one	percentage	point	increase	in	the	assumed	health	care	cost	trend	rate	would	not	have	a	material	impact	on	the	service	and	interest	costs	and	would	increase	our	postretirement	benefit	obligation	by $0.1	million	at	December	31,	2009.	A	one	percentage	point	decrease	in	the	assumed	health	care	cost	trend	rate	would	decrease	the	service	and	interest	costs	by	less	than	$0.1	million	and	would	decrease our	postretirement	benefit	obligation	by	$0.1	million	at	December	31,	2009.

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	PPA.	We have	not	made	contributions	to	the	defined	benefit	pension	plan	in	2009,	2008	or	2007	and	we	are	not	required	to	make	any	contributions	in	2010.

Estimated	future	benefit	payments	for	the	next	ten	years	under	the	Plan,	the	postretirement	healthcare	plan	and	the	SERP	are	as	follows:

|  | Defined	Benefit<br>Pension	Plan | Postretirement<br>Healthcare	Plans |  | Retirement	Plan | Executive |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2010 | $\t\t\t\t\t\t\t\t\t\t\t15.6 | $\t\t\t\t\t\t\t\t\t\t\t\t0.3 |  |  | $\t\t0.3 |
| 2011 | 15.9 | 0.2 | 0.2 |  | 0.3 |
| 2012 | 17.9 | 0.2 | 0.2 |  | 0.3 |
| 2013 | 18.5 | 0.2 | 0.2 |  | 0.3 |
| 2014 | 25.4 | 0.2 | 0.2 |  | 0.3 |
| 2015\tthrough\t2019 | 145.8 | 1.3 | 1.3 |  | 5.4 |
| The\tfollowing\ttable\tsummarizes\tour\ttarget\tasset\tallocation\tfor\t2010\tand\tactual\tasset\tallocation\tat\tDecember\t31,\t2009\tand\t2008\tfor\tour\tdefined\tbenefit\tpension\tplan: |  |  |  |  |  |
|  |  |  | 2009 |  | 2008 |
|  |  | Target | Actual |  | Actual |
|  |  | Asset | Asset |  | Asset |
|  |  | Allocation | Allocation |  | Allocation |
| Debt\tsecurities | Debt\tsecurities | 50% |  | 48% | 51% |
| Equity\tsecurities |  | 50 |  | 51 | 48 |
| Cash | Cash | - |  | 1 | 1 |
| Total |  | 100% |  | 100% | 100% |

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	7.25%.	While	we	believe	we	can achieve	a	long-term	average	return	of	7.25%,	we	cannot	be	certain	that	the	portfolio	will	perform	to	our	expectations.	Assets	are	strategically	allocated	among	debt	and	equity	portfolios	in	order	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	valued	at	fair	value.	The	following	is	a	description	of	the	valuation	methodologies	used	for	the	investments	measured	at	fair	value,	including	the	general	classification	of	such instruments	pursuant	to	the	valuation	hierarchy.

•		Money	market	accounts	are	valued	at	the	net	asset	value	of	shares	held	by	the	Plan	at	year	end.	These	investments	are	classified	as	Level	2	investments.

•		Registered	Investment	Companies	are	mutual	funds	and	other	commingled	funds	registered	with	the	Securities	and	Exchange	Commission.	Mutual	funds	are	traded	actively	on	public exchanges.	The	share	prices	for	mutual	funds	are	published	at	the	close	of	each	business	day.	Holdings	of	mutual

funds	are	classified	as	Level	1	investments.	Other	registered	commingled	funds	are	not	publicly	traded,	but	underlying	assets	(stocks	and	bonds)	held	in	these	funds	are	traded	on	active markets	and	the	prices	for	these	assets	are	readily	observable.	Holdings	in	other	registered	commingled	funds	are	classified	as	Level	2	investments.

•		Limited	partnerships	invest	in	privately-held	companies	or	privately	held	real	estate	assets.	Due	to	the	private	nature	of	the	partnership	investments,	pricing	inputs	are	not	readily observable.	Asset	valuations	are	developed	by	the	general	partners	that	manage	the	partnerships.	These	valuations	are	based	on	property	appraisals,	application	of	public	market	multiples	to private	company	cash	flows,	utilization	of	market	transactions	that	provide	valuation	information	for	comparable	companies	and	other	methods.	Holdings	of	limited	partnership	interests	are classified	as	Level	3	investments.

The	following	table	summarizes,	by	level,	within	the	fair	value	hierarchy,	the	investments	of	the	Plan	at	fair	value	as	of	December	31,	2009:

|  | Total | Quoted<br>Prices	in<br>Active<br>Markets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Significant<br>Unobservable<br>Inputs<br>(Level	3) |
| :--- | :--- | :--- | :--- | :--- |
| Money\tmarket\taccount | $1.8 | $- | $1.8 | $- |
| Registered\tInvestment\tCompanies | 330.9 | 215.8 | 115.1 | - |
| Limited\tpartnerships | 0.6 | - | - | 0.6 |
| Total\tassets | $\t\t\t\t\t\t\t\t\t333.3 | $\t\t\t\t\t\t\t\t\t215.8 | $\t\t\t\t\t\t\t\t\t116.9 | $\t\t\t\t\t\t\t\t\t\t\t0.6 |

The	following	table	summarizes	the	changes	in	the	fair	value	of	the	Plan's	investment	in	Level	3	assets	for	the	year	ended	December	31,	2009:

# 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	Plan,	participants	may	direct	us	to	defer	a portion	of	their	compensation	to	the	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	merger	with	Allied,	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.

# 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,	2009,	2008	and	2007,	issuances	under	this	plan	totaled	49,918	shares,	84,918	shares	and	66,078	shares,	respectively.	At	December	31, 2009,	shares	reserved	for	issuance	to	employees	under	this	plan	totaled	699,609	and	Republic	held	employee	contributions	of	approximately	$0.7	million	for	the	purchase	of	common	stock. Compensation	expense	for	plan	participants	in	2009,	2008	and	2007	was	not	material.

# Incentive	Compensation	Plans

Our	compensation	program	includes	a	management	incentive	plan,	which	uses	certain	performance	metrics	such	as	free	cash	flow,	targeted	earnings	and	return	on	invested	capital	to	measure performance.	In	addition,	in	connection	with	our	merger	with	Allied,	our	Board	of	Directors	has	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.

# 12. STOCKHOLDERS'	EQUITY

From	2000	through	2008,	our	Board	of	Directors	authorized	the	repurchase	of	up	to	$2.6	billion	of	our	common	stock.	As	of	December	31,	2008,	we	had	paid	$2.3	billion	to	repurchase	82.6	million shares	of	our	common	stock,	of	which	4.6	million	shares	were	acquired	during	the	year	ended	December	31,	2008	for	$138.4	million.	During	the	second	quarter	of	2008,	we	suspended	our	share repurchase	program	as	a	result	of	the	pending	merger	with	Allied.

In	January	2007,	our	Board	of	Directors	approved	a	3-for-2	stock	split	in	the	form	of	a	stock	dividend,	effective	on	March	16,	2007,	to	stockholders	of	record	as	of	March	5,	2007.	We	distributed 64.5	million	shares	from	treasury	stock	to	effect	the	stock	split.	In	connection	therewith,	we	transferred	$1.6	billion	from	treasury	stock	to	additional	paid-in	capital	and	$0.2	billion	from	treasury	stock	to retained	earnings,	representing	in	total	the	weighted-average	cost	of	the	treasury	shares	distributed.

We	initiated	a	quarterly	cash	dividend	in	July	2003.	The	dividend	has	been	increased	each	year	thereafter,	with	the	latest	increase	occurring	in	the	third	quarter	of	2008.	Our	current	quarterly	dividend	per share	is	$0.19.	Dividends	declared	were	$288.7	million,	$168.9	million	and	$104.6	million	for	the	years	ended	December	31,	2009,	2008	and	2007,	respectively.	As	of	December	31,	2009,	we	recorded	a quarterly	dividend	payable	of	approximately	$72.4	million	to	stockholders	of	record	at	the	close	of	business	on	January	4,	2010.

# 13. EARNINGS	PER	SHARE

Basic	earnings	per	share	is	computed	by	dividing	net	income	by	the	weighted	average	number	of	common	shares	(including	restricted	stock	and	vested	but	unissued	deferred	stock	units)	outstanding during	the	period.	Diluted	earnings	per	share	is	based	on	the	combined	weighted	average	number	of	common	shares	and	common	share	equivalents	outstanding	which	include,	where	appropriate,	the assumed	exercise	of	employee	stock	options	and	unvested	restricted	stock	awards.	In	computing	diluted	earnings	per	share,	we	utilize	the	treasury	stock	method.

Earnings	per	share	for	the	years	ended	December	31,	2009,	2008	and	2007	are	calculated	as	follows	(in	thousands,	except	per	share	amounts):

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Basic\tearnings\tper\tshare:\nNet\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $\t\t495,000 | $\t\t73,800 | $\t\t290,200 |
| Weighted\taverage\tcommon\tshares\toutstanding | 379,749 | 196,703 | 190,103 |
| Basic\tearnings\tper\tshare | $1.30 | $0.38 | $1.53 |
| Diluted\tearnings\tper\tshare:\nNet\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $495,000 | $73,800 | $290,200 |
| Weighted\taverage\tcommon\tshares\toutstanding | 379,749 | 196,703 | 190,103 |
| Effect\tof\tdilutive\tsecurities: |  |  |  |
| Options\tto\tpurchase\tcommon\tstock | 1,172 | 1,646 | 1,924 |
| Unvested\trestricted\tstock\tawards | 40 | 2 | 3 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares\toutstanding | 380,961 | 198,351 | 192,030 |
| Diluted\tearnings\tper\tshare | $1.30 | $0.37 | $1.51 |
| Antidilutive\tsecurities\tnot\tincluded\tin\tthe\tdiluted\tearnings\tper\tshare\tcalculations:\nOptions\tto\tpurchase\tcommon\tstock | 9,836 | 2,179 | 1,112 |

# 14. SEGMENT	REPORTING

Our	operations	are	managed	and	evaluated	through	four	regions:	Eastern,	Midwest,	Southern	and	Western.	These	four	regions	are	presented	below	as	our	reportable	segments.	These	reportable	segments provide	integrated	waste	management	services	consisting	of	collection,	transfer	and	disposal	of	domestic	non-hazardous	solid	waste.

Summarized	financial	information	concerning	our	reportable	segments	for	the	respective	years	ended	December	31,	2009,	2008	and	2007	is	shown	in	the	following	table:

|  | Gross<br>Revenue | Intercompany<br>Revenue | Net<br>Revenue | Depreciation,<br>Amortization,<br>Depletion	and<br>Accretion | Operating<br>Income<br>(Loss) | Capital<br>Expenditures | Total	Assets |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2009: |  |  |  |  |  |  |  |
| Eastern | $2,485.9 | $\t\t\t\t\t\t(370.9) | $2,115.0 | $\t\t\t\t\t\t\t214.3 | $\t483.0 | $\t\t\t\t\t199.1 | $\t\t4,495.1 |
| Midwest | 2,185.4 | (408.4) | 1,777.0 | 225.9 | 369.1 | 208.0 | 3,601.2 |
| Southern | 2,371.7 | (325.5) | 2,046.2 | 233.1 | 522.9 | 168.5 | 4,871.9 |
| Western | 2,652.4 | (482.4) | 2,170.0 | 234.9 | 582.0 | 180.5 | 5,461.2 |
| Corporate\tentities | 123.6 | (32.7) | 90.9 | 50.3 | (367.2) | 70.2 | 1,110.9 |
| Total | $\t9,819.0 | $(1,619.9) | $8,199.1 | $958.5 | $\t\t1,589.8 | $\t\t\t\t\t\t826.3 | $\t\t\t\t19,540.3 |
| 2008: |  |  |  |  |  |  |  |
| Eastern | $1,144.4 | $(154.5) | $989.9 | $95.1 | $(2.5) | $95.7 | $4,608.5 |
| Midwest | 965.0 | (193.3) | 771.7 | 96.8 | 127.6 | 85.9 | 4,218.3 |
| Southern | 1,095.7 | (125.5) | 970.2 | 94.8 | 184.8 | 111.2 | 4,957.3 |
| Western | 1,161.1 | (218.5) | 942.6 | 79.7 | 154.9 | 75.3 | 5,705.0 |
| Corporate\tentities | 13.8 | (3.1) | 10.7 | 11.6 | \t(181.6) | 18.8 | 432.3 |
| Total | $4,380.0 | $(694.9) | $3,685.1 | $378.0 | $283.2 | $386.9 | $19,921.4 |
| 2007: |  |  |  |  |  |  |  |
| Eastern | $1,001.2 | $(135.6) | $865.6 | $77.4 | $149.7 | $78.0 | $1,167.4 |
| Midwest | 824.9 | (177.4) | 647.5 | 83.0 | 118.9 | 68.8 | 1,117.8 |
| Southern | 956.0 | (107.1) | 848.9 | 77.4 | 155.9 | 77.6 | 996.3 |
| Western | 1,013.4 | (199.9) | 813.5 | 77.6 | 175.6 | 64.4 | 927.1 |
| Corporate\tentities | 0.7 | - | 0.7 | 7.2 | (64.1) | 3.7 | 259.2 |
| Total | $3,796.2 | $(620.0) | $3,176.2 | $322.6 | $536.0 | $292.5 | $4,467.8 |

Intercompany	revenue	reflects	transactions	within	and	between	segments	that	are	generally	made	on	a	basis	intended	to	reflect	the	market	value	of	such	services.

Depreciation,	amortization,	depletion	and	accretion	includes	a	net	decrease	in	amortization	expense	of	$5.1	million	recorded	during	2009,	and	net	increases	of	$0.6	million	and	$3.3	million	in	2008	and 2007,	respectively,	related	to	changes	in	estimates	and	assumptions	concerning	the	cost	and	timing	of	future	final	capping,	closure	and	post-closure	activities.

The	following	items	are	included	in	the	above	segment	information:

•		Eastern	Region.	For	the	year	ended	December	31,	2009,	operating	income	includes	a	$4.0	million	net	gain	from	the	disposition	of	assets	and	$12.0	million	of	insurance	proceeds	related	to the	remediation	costs	at	our	Countywide	facility.	For	the	year	ended	December	31,	2008,	operating	loss	includes	a	$99.9	million	charge	for	environmental	conditions	and	a	$75.9	million impairment	charge	at	our	Countywide	facility.

•		Midwest	Region.	For	the	year	ended	December	31,	2009,	operating	income	includes	a	$27.1	million	net	gain	from	the	disposition	of	assets.

•		Southern	Region.	For	the	year	ended	December	31,	2009,	operating	income	includes	a	$29.8	million	net	gain	from	the	disposition	of	assets.

•		Western	Region.	For	the	year	ended	December	31,	2009,	operating	income	includes	an	$88.1	million	net	gain	from	the	disposition	of	assets	and	a	charge	of	$5.2	million	related	to environmental	conditions	at	our	West	County	facility.	For	the	year	ended	December	31,	2008,	operating	income	includes	a	charge	of	$55.9	million,	including	$34.0	million	associated	with conditions	at	the	Sunrise	landfill	and	$21.9	million	at	our	West	County	facility.	For	the	year	ended	December	31,	2007,	operating	income	includes	a	$9.6	million	charge	associated	with	an increase	in	estimated	leachate	treatment	and	disposal	costs	at	our	West	County	facility.

•		Corporate	Entities.	Corporate	functions	include	legal,	tax,	treasury,	information	technology,	risk	management,	human	resources,	corporate	accounts	and	other	typical	administrative functions.	During	the	year	ended	December	31,	2009,	we	incurred	$8.2	million	of	transaction	related	expenses	from	the	disposition	of	assets	in	other	segments	and	a	$3.7	million	charge	for the	asset	impairment	associated	with	our	former	corporate	office	in	Florida.	Capital	expenditures	for	corporate	entities	primarily	include	vehicle	inventory	acquired	but	not	yet	assigned	to operating	locations	and	facilities.

The	following	table	shows	our	total	reported	revenue	by	service	line	for	the	respective	years	ended	December	31.	Intercompany	revenue	has	been	eliminated.

Other	revenue	consists	primarily	of	revenue	from	sales	of	recycled	materials	and	revenue	from	national	accounts	acquired	from	Allied.	National	accounts	revenue	included	in	other	revenue	represents	the portion	of	revenue	generated	from	nationwide	contracts	in	markets	outside	our	operating	areas,	and,	as	such,	the	associated	waste	handling	services	are	subcontracted	to	local	operators.	Consequently, substantially	all	of	this	revenue	is	offset	with	related	subcontract	costs,	which	are	recorded	in	cost	of	operations.

# 15. FINANCIAL	INSTRUMENTS

We	have	entered	into	multiple	swap	agreements	designated	as	cash	flow	hedges	to	mitigate	some	of	our	exposure	related	to	changes	in	diesel	fuel	prices.	The	swaps	qualified	for,	and	were	designated	as, effective	hedges	of	changes	in	the	prices	of	forecasted	diesel	fuel	purchases	(fuel	hedges).

The	following	table	summarizes	our	outstanding	fuel	hedges	at	December	31,	2009	and	2008:

| Inception	Date | Commencement	Date | Termination	Date | (in	Gallons<br>per	Month) | Contract	Price<br>per	Gallon |
| :--- | :--- | :--- | :--- | :--- |
| January\t26,\t2007 | January\t5,\t2009 | December\t28,\t2009 | 500,000 | $2.83 |
| January\t26,\t2007 | January\t4,\t2010 | December\t27,\t2010 | 500,000 | 2.81 |
| November\t5,\t2007 | January\t5,\t2009 | December\t30,\t2013 | 60,000 | 3.28 |
| March\t17,\t2008 | January\t5,\t2009 | December\t31,\t2012 | 50,000 | 3.72 |
| March\t17,\t2008 | January\t5,\t2009 | December\t31,\t2012 | 50,000 | 3.74 |
| September\t22,\t2008 | January\t1,\t2009 | December\t31,\t2011 | 150,000 | 4.16\t-\t4.17 |
| July\t10,\t2009 | January\t1,\t2010 | December\t31,\t2010 | 100,000 | 2.84 |
| July\t10,\t2009 | January\t1,\t2011 | December\t31,\t2011 | 100,000 | 3.05 |
| July\t10,\t2009 | January\t1,\t2012 | December\t31,\t2012 | 100,000 | 3.20 |

If	the	national	U.S.	on-highway	average	price	for	a	gallon	of	diesel	fuel	(average	price)	as	published	by	the	Department	of	Energy	exceeds	the	contract	price	per	gallon,	we	receive	the	difference	between the	average	price	and	the	contract	price	(multiplied	by	the	notional	gallons)	from	the	counter-party.	If	the	national	U.S.	on-highway	average	price	for	a	gallon	of	diesel	fuel	is	less	than	the	contract	price per	gallon,	we	pay	the	difference	to	the	counter-party.

The	fair	values	of	our	fuel	hedges	are	obtained	from	third-party	counter-parties	and	are	determined	using	standard	option	valuation	models	with	assumptions	about	commodity	prices	being	based	on	those observed	in	underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	aggregated	fair	values	of	the	outstanding	fuel	hedges	at	December	31,	2009	and	2008	were	current	assets	of	$3.2	million	and $1.2	million,	respectively,	and	current	liabilities	of	$4.9	million	and	$12.9	million,	respectively,	and	have	been	recorded	in	other	current	assets	and	other	accrued	liabilities	in	our	consolidated	balance sheets,	respectively.

The	following	table	summarizes	the	impact	of	our	fuel	hedges	on	our	results	of	operations	and	comprehensive	income	for	the	years	ended	December	31,	2009	and	2008:

# Recycling	Commodity	Hedges

Our	revenue	from	sales	of	recycling	commodities	is	primarily	from	sales	of	old	corrugated	cardboard	(OCC)	and	old	newspaper	(ONP).	We	have	entered	into	multiple	swap	agreements	related	to	certain forecasted	recycling	commodity	sales	designated	as	cash	flow	hedges	to	mitigate	some	of	our	exposure	related	to	changes	in	commodity	prices.	The	swaps	qualified	for,	and	were	designated	as,	effective hedges	of	changes	in	the	prices	of	certain	forecasted	recycling	commodity	sales	(commodity	hedges).

The	following	table	summarizes	our	outstanding	commodity	hedges	at	December	31,	2009	and	2008:

| Inception	Date | Commencement	Date | Termination	Date | Transaction<br>Hedged | Notional	Amount<br>(in	Short	Tons<br>per	Month) | Contract	Price<br>Per	Short<br>Ton |
| :--- | :--- | :--- | :--- | :--- | :--- |
| April\t28,\t2008 | January\t1,\t2009 | December\t31,\t2010 | OCC | 1,000 | $106.00 |
| April\t28,\t2008 | January\t1,\t2009 | December\t31,\t2010 | OCC | 1,000 | 110.00 |
| April\t28,\t2008 | January\t1,\t2009 | December\t31,\t2010 | ONP | 1,000 | 106.00 |
| April\t28,\t2008 | January\t1,\t2009 | December\t31,\t2010 | ONP | 1,000 | 103.00 |
| May\t16,\t2008 | January\t1,\t2009 | December\t31,\t2010 | OCC | 1,000 | 105.00 |
| May\t16,\t2008 | January\t1,\t2009 | December\t31,\t2010 | OCC | 1,000 | 103.00 |
| May\t16,\t2008 | January\t1,\t2009 | December\t31,\t2010 | ONP | 1,000 | 102.00 |
| May\t16,\t2008 | January\t1,\t2009 | December\t31,\t2010 | ONP | 1,000 | 106.00 |
| December\t8,\t2009 | January\t1,\t2010 | December\t31,\t2011 | ONP | 2,000 | 76.00 |
| December\t10,\t2009 | January\t1,\t2010 | December\t31,\t2011 | OCC | 2,000 | 82.00 |
| December\t11,\t2009 | January\t1,\t2010 | December\t31,\t2011 | OCC | 2,000 | 82.00 |

The	fair	values	of	our	commodity	hedges	are	obtained	from	a	third-party	counter-parties	and	are	determined	using	standard	option	valuation	models	with	assumptions	about	commodity	prices	being	based on	those	observed	in	underlying	markets	(Level	2	in	the	fair	value	hierarchy).	The	aggregated	fair	values	of	the	outstanding	commodity	hedges	at	December	31,	2009	and	2008	were	current	assets	of $1.8	million	and

$8.8	million,	respectively,	and	current	liabilities	of	$0.8	million	and	nil,	respectively,	and	have	been	recorded	in	other	current	assets	and	other	accrued	liabilities	in	our	consolidated	balance	sheets, respectively.

The	effective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009	and	2008,	net	of	tax,	of	$0.6	million	and	$5.3	million	have	been	recorded	in	stockholders'	equity	as	a	component	of accumulated	other	comprehensive	income.	The	ineffective	portions	of	the	changes	in	fair	values	as	of	December	31,	2009	and	2008	were	immaterial	and	have	been	recorded	in	other	income	(expense), net	in	our	consolidated	statements	of	income.

The	following	table	summarizes	the	impact	of	our	commodity	hedges	on	our	results	of	operations	and	comprehensive	income	for	the	years	ended	December	31,	2009	and	2008:

Amount	of	Gain	or	(Loss)

In	measuring	fair	values	of	assets	and	liabilities,	we	use	valuation	techniques	that	maximize	the	use	of	observable	inputs	(Level	1)	and	minimize	the	use	of	unobservable	inputs	(Level	3).	Also,	we	use market	data	or	assumptions	that	we	believe	market	participants	would	use	in	pricing	an	asset	or	liability,	including	assumptions	about	risk	when	appropriate.

As	of	December	31,	2009,	our	assets	and	liabilities	that	are	measured	at	fair	value	on	a	recurring	basis	include	the	following:

|  | Total | Quoted<br>Prices	in<br>Active<br>Markets<br>(Level	1) | Fair	Value	Measurements	Using<br>Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Significant<br>Unobservable<br>Inputs<br>(Level	3) |
| :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |
| Restricted\tcash\tand\tmarketable\tsecurities | $\t240.5 | $\t\t240.5 | $- | $\t\t\t\t\t- |
| Fuel\thedges\t-\tother\tcurrent\tassets | 3.2 | - | 3.2 | - |
| Commodity\thedges\t-\tother\tcurrent\tassets | 1.8 | - | 1.8 | - |
| Interest\trate\tswaps\t-\tother\tassets | 9.9 | - | 9.9 | - |
| Total\tassets | $255.4 | $240.5 | $\t\t\t\t\t\t14.9 | $\t\t\t\t\t\t\t\t\t\t\t\t- |
| Liabilities: |  |  |  |  |
| Commodity\thedges\t-\tother\taccrued\tliabilities | $0.8 | $- | $0.8 | $- |
| Fuel\thedges\t-\tother\taccrued\tliabilities | 4.9 | - | 4.9 | - |
| Total\tliabilities | $5.7 | $- | $5.7 | $- |

# 16. COMMITMENTS	AND	CONTINGENCIES

# Litigation

We	are	subject	to	extensive	and	evolving	laws	and	regulations	and	have	implemented	our	own	safeguards	to	respond	to	regulatory	requirements.	In	the	normal	course	of	conducting	our	operations,	we may	become	involved	in	certain	legal	and	administrative	proceedings.	Some	of	these	actions	may	result	in	fines,	penalties	or	judgments	against	us,	which	may	impact	earnings	and	cash	flows	for	a particular	period.	We	accrue	for	legal	matters	and	regulatory	compliance	contingencies	when	such	costs	are	probable	and	can	be	reasonably	estimated.	Although	the	ultimate	outcome	of	any	legal	matter cannot	be	predicted	with	certainty,	except	as	described	below	or	in	Note	10,	Income	Taxes,	in	the	discussion	of	our	outstanding	tax	dispute	with	the	IRS,	we	do	not	believe	that	the	outcome	of	our pending	legal	and	administrative	proceedings	will	have	a	material	adverse	impact	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

On	March	26,	2007,	the	Ohio	Environmental	Protection	Agency	(OEPA)	issued	Final	Findings	and	Orders	(F&Os)	to	Republic	Services	of	Ohio	II,	LLC	(Republic-Ohio),	an	Ohio	limited	liability company	and	our	wholly	owned	subsidiary.	The	F&Os	related	to	environmental	conditions	attributed	to	a	chemical	reaction	resulting	from	the	disposal	of	certain	aluminum	production	waste	at	the Countywide	Recycling	and	Disposal	facility	(Countywide)	in	East	Sparta,	Ohio.	The	F&Os,	and	certain	other	remedial	actions	Republic-Ohio	agreed	with	the	OEPA	to	undertake	to	address	the environmental	conditions,	included,	without	limitation,	the	following	actions:	(a)	prohibiting	leachate	recirculation,	(b)	refraining	from	the	disposal	of	solid	waste	in

certain	portions	of	the	site,	(c)	updating	engineering	plans	and	specifications	and	providing	further	information	regarding	the	integrity	of	various	engineered	components	at	the	site,	(d)	performing additional	data	collection,	(e)	taking	additional	measures	to	address	emissions,	(f)	expanding	the	gas	collection	and	control	system,	(g)	installing	an	isolation	break,	(h)	removing	liquids	from	gas extraction	wells,	and	(i)	submitting	a	plan	to	the	OEPA	to	suppress	the	chemical	reaction	and,	following	approval	by	the	OEPA,	implementing	such	plan.	Republic-Ohio	has	performed	certain	interim remedial	actions	required	by	the	OEPA.	Republic-Ohio	subsequently	received	additional	orders	from	the	OEPA	requiring	certain	actions	to	be	taken	by	Republic-Ohio,	in	addition	to	or	in	lieu	of requirements	contained	in	prior	orders,	including	additional	air	quality	monitoring	and	the	installation	and	continued	maintenance	of	gas	well	dewatering	systems.

Republic-Ohio	has	also	entered	into	an	Agreed	Order	on	Consent	(AOC)	with	the	EPA	requiring	the	reimbursement	of	costs	incurred	by	the	EPA	and	requiring	Republic-Ohio	to	(a)	design	and	install	a temperature	and	gas	monitoring	system,	(b)	design	and	install	a	composite	cap	or	cover,	and	(c)	develop	and	implement	an	air	monitoring	program.	The	AOC	became	effective	on	April	17,	2008	and Republic-Ohio	has	complied	with	the	terms	of	the	AOC.	Republic-Ohio	also	has	completed	construction	of	an	isolation	break	under	the	authority	and	supervision	of	the	EPA	and	reimbursed	the	EPA	for certain	costs	associated	with	the	EPA's	involvement	in	overseeing	implementation	of	the	AOC.	On	November	20,	2009,	the	EPA	issued	a	Notification	of	Completion	and	Determination	of	Compliance	to Countywide	memorializing	Countywide's	completion	of	the	work	required	under	the	AOC.

The	Commissioner	of	the	Stark	County	Health	Department	(Commissioner)	previously	recommended	that	the	Stark	County	Board	of	Health	(Board	of	Health)	suspend	Countywide's	2007	annual operating	license.	The	Commissioner	also	intended	to	recommend	that	the	Board	of	Health	deny	Countywide's	license	application	for	2008.	Republic-Ohio	obtained	a	preliminary	injunction	on November	28,	2007	prohibiting	the	Board	of	Health	from	suspending	its	2007	operating	license.	Republic-Ohio	also	obtained	a	preliminary	injunction	on	February	15,	2008	prohibiting	the	Board	of Health	from	denying	its	2008	operating	license	application.	The

litigation	with	the	Board	of	Health	has	been	concluded	pursuant	to	a	Consent	Order	entered	into	between	Republic-Ohio	and	the	Board	of	Health	in	the	Stark	County	Court	of	Common	Pleas.	The Consent	Order	requires	the	Board	of	Health	to	issue	conditional	and/or	final	operating	licenses	to	Countywide	and	requires	Republic-Ohio	to	reimburse	the	Board	of	Health	for	certain	expenses	not	to exceed	$300,000	incurred	related	to	monitoring	and	investigation	of	complaints	regarding	Countywide.	Countywide's	2009	operating	license	has	been	challenged	by	Tuscarawas	County,	and	the	Board of	Health	issued	Countywide	its	2010	operating	license	on	December	30,	2009,	which	also	has	been	challenged	by	a	local	citizens'	group,	Club	3000.

On	August	17,	2007,	a	lawsuit	was	filed	by	a	former	employee,	Ronald	Luri	v.	Republic	Services,	Inc.,	Republic	Services	of	Ohio	Hauling	LLC,	Republic	Services	of	Ohio	I	LLC,	Jim	Bowen	and	Ron Krall	in	the	Cuyahoga	County	Common	Pleas	Court	in	Ohio.	On	July	3,	2008,	a	jury	verdict	was	awarded	against	us	in	the	amount	of	$46.6	million,	including	$43.1	million	in	punitive	damages.	On September	24,	2008,	the	Court	awarded	pre-judgment	interest	of	$0.3	million	and	attorney	fees	and	litigation	costs	of	$1.1	million.	Post-judgment	interest	accrued	at	a	rate	of	8%	for	2008	and	5%	for 2009,	and	is	accruing	at	a	rate	of	4%	for	2010.	Management	anticipates	that	post-judgment	interest	could	accrue	through	the	middle	of	2011	for	a	total	of	$7.7	million.	Post-judgment	motions	filed	on	our behalf	and	certain	of	our	subsidiaries	were	denied,	and	on	October	1,	2008,	we	filed	a	notice	of	appeal.	The	parties	submitted	their	appeal	briefs	and	oral	argument	was	scheduled	for	October	27,	2009.	On October	23,	2009,	the	Court	of	Appeals	dismissed	the	appeal	holding	that	the	trial	court	had	not	entered	a	final,	appealable	order.	The	case	has	been	returned	to	the	trial	court	for	additional	proceedings which	may	include	entry	of	additional	order(s)	by	the	trial	court	followed	by	another	appeal.	It	is	reasonably	possible	that	following	all	appeals	a	final	judgment	of	liability	for	compensatory	and

punitive	damages	may	be	assessed	against	us	related	to	this	matter.	Although	it	is	not	possible	to	predict	the	ultimate	outcome,	management	believes	that	the	amount	of	any	final,	non-appealable judgment	will	not	be	material.

On	July	8,	2009,	CLN	Properties,	Inc.	and	Maevers	Management	Company,	Inc.,	filed	a	complaint	against	the	Company	and	one	of	its	subsidiaries	in	the	United	States	District	Court	in	Arizona,	in	which plaintiffs	complain	about	fuel	recovery	fees	and	environmental	recovery	fees	charged	by	the	Company	or	one	of	its	subsidiaries.	On	July	23,	2009,	Klingler's	European	Bake	Shop	&	Deli,	Inc.,	filed	a complaint	against	the	Company	and	one	of	its	subsidiaries	in	the	Circuit	Court	of	Jefferson	County,	Alabama,	in	which	plaintiff	complains	about	fuel/environmental	recovery	fees	and	administrative	fees charged	by	the	Company	or	one	of

its	subsidiaries.	The	CLN	Properties/Maevers	complaint,	which	the	plaintiffs	amended	on	August	31,	2009,	purports	to	be	filed	on	behalf	of	a	nationwide	class	of	similarly-situated	plaintiffs,	while	the Klingler's	complaint	purports	to	be	filed	on	behalf	of	a	class	of	similarly	situated	plaintiffs	in	Alabama.	Each	complaint	asserts	various	legal	and	equitable	theories	of	recovery	and	alleges	in	essence	that the	fees	were	not	properly	disclosed,	were	unfair,	and	were	contrary	to	contract.	We	filed	motions	to	dismiss	in	both	actions.	On	January	13,	2010,	the	court	in	the	CLN/Maevers	case	granted	our	motion to	dismiss	in	part	and	denied	it	in	part.	Plaintiff	in	the	Klingler's	case	voluntarily	dismissed	the	action	without	prejudice	on	October	23,	2009	and	subsequently	re-filed	a	virtually	identical	complaint against	a	different	subsidiary	of	the	company	on	November	20,	2009.	We	recently	moved	to	dismiss	this	new	complaint.	We	will	continue	to	vigorously	defend	the	claims	in	both	lawsuits.

In	late	2009,	a	Republic	stockholder	brought	a	lawsuit	in	Federal	court	in	Delaware	challenging	our	disclosures	in	our	2009	proxy	statement	with	respect	to	the	Executive	Incentive	Plan	("EIP")	that	was approved	by	our	stockholders	at	the	2009	annual	meeting.	The	lawsuit	is	styled	as	a	combined	proxy	disclosure	claim	and	derivative	action.	We	are	a	defendant	only	with	respect	to	the	proxy	disclosure claim,	which	seeks	only	to	require	us	to	make	additional	disclosures	regarding	the	EIP	and	to	hold	a	new	stockholder	vote	prior	to	making	any	payments	under	the	EIP.	The	derivative	claim	is	purportedly brought	on	behalf	of	our	company	against	all	of	our	directors	and	the	individuals	who	were	executive	officers	at	the	time	of	the	2009	annual	meeting	and	alleges,	among	other	things,	breach	of	fiduciary duty.	That	claim	also	seeks	injunctive	relief	and	seeks	to	recoup	on	behalf	of	our	company	an	unspecified	amount	of	the	incentive	compensation	that	may	be	paid	to	our	executives	under	the	EIP,	as	well as	the	amount	of	any	tax	deductions	that	may	be	lost	if	the	EIP

does	not	comply	with	Section	162(m)	of	the	Internal	Revenue	Code.	We	believe	the	lawsuit	is	without	merit	and	is	not	material	and	intend	to	vigorously	defend	against	the	plaintiff's	allegations.

On	November	17,	2009,	the	South	Coast	Air	Quality	Management	District	(District)	issued	an	Order	for	Abatement	as	a	result	of	a	series	of	odor	complaints	alleged	to	be	associated	with	the	operations at	the	Sunshine	Canyon	Landfill	located	in	Sylmar,	California.	The	Order	describes	eight	notices	of	violation	beginning	in	November	2008	and	continuing	to	November	2009.	The	District	Hearing	Board held	a

compliance	hearing	on	December	17,	2009,	at	which	we	described	the	measures	to	mitigate	the	odors.	A	final	order	and	settlement	document	has	not	been	issued.

# Lease	Commitments

We	and	our	subsidiaries	lease	real	property,	equipment	and	software	under	various	operating	leases	with	terms	from	one	month	to	twenty	years.	Rent	expense	during	the	years	ended	December	31,	2009, 2008	and	2007	was	$60.1	million,	$19.3	million	and	$11.5	million,	respectively.

Future	minimum	lease	obligations	under	non-cancelable	real	property,	equipment	and	software	operating	leases	with	initial	terms	in	excess	of	one	year	at	December	31,	2009	are	as	follows:

# Unconditional	Purchase	Commitments

# Royalties

We	have	entered	into	agreements	to	pay	royalties	to	prior	landowners,	lessors	or	host	communities	where	landfills	are	located,	based	on	waste	tonnage	disposed	at	specified	landfills.	The	payments	are generally	payable	quarterly	and	amounts	incurred,	but	not	paid,	are	accrued	in	our	consolidated	balance	sheets.	Royalties	are	accrued	as	tonnage	is	disposed	of	in	the	landfills.

# Disposal	Agreements

We	have	several	agreements	expiring	at	various	dates	through	2025	that	require	us	to	dispose	of	a	minimum	number	of	tons	at	third-party	disposal	facilities.	Under	these	put-or-pay	agreements,	we	are required	to	pay	for	agreed-upon	minimum	volumes	regardless	of	the	actual	number	of	tons	placed	at	the	facilities.

Future	minimum	payments	under	unconditional	purchase	commitments,	consisting	primarily	of	(i)	disposal	related	agreements	which	include	fixed	or	minimum	royalty	payments,	host	agreements	and take-or-pay	and	put-or-pay	agreements	and	(ii)	other	obligations	including	committed	capital	expenditures	and	consulting	service	agreements	at	December	31,	2009	are	as	follows:

# Restricted	Cash	and	Other	Financial	Guarantees

We	are	required	to	provide	financial	assurance	to	governmental	agencies	and	a	variety	of	other	entities	under	applicable	environmental	regulations	relating	to	our	landfill	operations	for	capping,	closure and	post-closure	costs,	and	our	performance	under	certain	collection,	landfill	and	transfer	station	contracts.	We	satisfy	the

financial	assurance	requirements	by	providing	surety	bonds,	letters	of	credit,	insurance	policies	or	trust	deposits.	The	amount	of	the	financial	assurance	requirements	for	capping,	closure	and	post-closure costs	is	determined	by	applicable	state	environmental	regulations,	which	vary	by	state.	The	financial	assurance	requirements	for	capping,	closure	and	post-closure	costs	can	either	be	for	costs	associated with	a	portion	of	the	landfill	or	the	entire	landfill.	Generally,	states	will	require	a	third-party	engineering	specialist	to	determine	the	estimated	capping,	closure	and	post-closure	costs	that	are	used	to determine	the	required	amount	of	financial	assurance	for	a	landfill.	The	amount	of	financial	assurance	required	can,	and	generally	will,	differ	from	the	obligation	determined	and	recorded	under	GAAP. The	amount	of	the	financial	assurance	requirements	related	to	contract	performance	varies	by	contract.	Additionally,	we	are	required	to	provide	financial	assurance	for	our	self-insurance	program	and collateral	for	certain	performance	obligations.

We	had	the	following	financial	instruments	and	collateral	in	place	to	secure	our	financial	assurances	at	December	31:

The	letters	of	credit	include	$1,634.0	million	and	$1,686.5	million	as	of	December	31,	2009	and	2008,	respectively,	of	utilized	availability	under	our	Credit	Facilities.	Surety	bonds	expire	on	various dates	through	2038.

These	financial	instruments	are	issued	in	the	normal	course	of	business	and	are	not	debt.	Since	we	currently	have	no	liability	for	this	financial	assurance,	it	is	not	reflected	in	our	consolidated	balance sheets.	However,	we	have	recorded	capping,	closure	and	post-closure	obligations	and	self-insurance	reserves	as	they	are	incurred.	The	underlying	financial	assurance	obligations,	in	excess	of	those already	reflected	in	our	consolidated	balance	sheets,	would	be	recorded	if	it	is	probable	that	we	would	be	unable	to	fulfill	our	related	obligations.	We	do	not	expect	this	to	occur.

Our	restricted	cash	deposits	include,	among	other	things,	restricted	cash	held	for	capital	expenditures	under	certain	debt	facilities,	and	restricted	cash	pledged	to	regulatory	agencies	and	governmental entities	as	financial	guarantees	of	our	performance	related	to	our	final	capping,	closure	and	post-closure	obligations	at	our	landfills	at	December	31,	as	follows:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Financing\tproceeds | $93.1 | $133.5 |
| Capping,\tclosure\tand\tpost-closure\tobligations | 58.5 | 63.2 |
| Other | 88.9 | 85.2 |
| Total\trestricted\tcash\tand\tmarketable\tsecurities | $\t\t\t\t\t240.5 | $\t\t\t\t\t281.9 |

We	own	a	19.9%	interest	in	a	company	that,	among	other	activities,	issues	financial	surety	bonds	to	secure	final	capping,	landfill	closure	and	post-closure	obligations	for	companies	operating	in	the	solid waste	industry.	We	account	for	this	investment	under	the	cost	method	of	accounting.	There	have	been	no	identified	events	or	changes	in	circumstances	that	may	have	a	significant	adverse	effect	on	the fair	value	of	the	investment.	This	investee	company	and	the	parent	company	of	the	investee	had	written	surety	bonds	for	us	relating	to	our	landfill	operations	for	capping,	closure	and	post-closure,	of which	$775.2	million	and	$753.8	million	were	outstanding	as	of	December	31,	2009	and	2008,	respectively.	Our	reimbursement	obligations	under	these	bonds	are	secured	by	an	indemnity	agreement with	the	investee	and	letters	of	credit	totaling	$67.4	million	and	$41.3	million	as	of	December	31,	2009	and	2008,	respectively.

We	have	no	off-balance	sheet	debt	or	similar	obligations,	other	than	operating	leases	and	the	financial	assurances	discussed	above,	which	are	not	classified	as	debt.	We	have	no	transactions	or	obligations with	related	parties	that	are	not	disclosed,	consolidated	into	or	reflected	in	our	reported	financial	position	or	results	of	operations.	We	have	not	guaranteed	any	third-party	debt.

We	enter	into	contracts	in	the	normal	course	of	business	that	include	indemnification	clauses.	Indemnifications	relating	to	known	liabilities	are	recorded	in	the	consolidated	financial	statements	based	on our	best	estimate	of	required	future	payments.	Certain	of	these	indemnifications	relate	to	contingent	events	or	occurrences,	such	as	the	imposition	of	additional	taxes	due	to	a	change	in	the	tax	law	or adverse	interpretation	of	the	tax	law,	and	indemnifications	made	in	divestiture	agreements	where	we	indemnify	the	buyer	for	liabilities	that	relate	to	our	activities	prior	to	the	divestiture	and	that	may become	known	in	the	future.	We	do	not	believe	that	these	contingent	obligations	will	have	a	material	effect	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

We	have	entered	into	agreements	with	property	owners	to	guarantee	the	value	of	certain	property	that	is	adjacent	to	certain	of	our	landfills.	These	agreements	have	varying	terms.	We	do	not	believe	that these	contingent	obligations	will	have	a	material	effect	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

# Other	Matters

Our	business	activities	are	conducted	in	the	context	of	a	developing	and	changing	statutory	and	regulatory	framework.	Governmental	regulation	of	the	waste	management	industry	requires	us	to	obtain and	retain	numerous	governmental	permits	to	conduct	various	aspects	of	our	operations.	These	permits	are	subject	to	revocation,	modification	or	denial.	The	costs	and	other	capital	expenditures	which may	be	required	to	obtain	or	retain	the	applicable	permits	or	comply	with	applicable	regulations	could	be	significant.	Any	revocation,	modification	or	denial	of	permits	could	have	a	material	adverse effect	on	us.

We	are	subject	to	various	federal,	state	and	local	tax	rules	and	regulations.	Our	compliance	with	such	rules	and	regulations	is	periodically	audited	by	tax	authorities.	These	authorities	may	challenge	the positions	taken	in	our	tax	filings.	As	such,	to	provide	for	certain	potential	tax	exposures,	we	maintain	liabilities	for	uncertain	tax	positions	for	our	estimate	of	the	final	outcome	of	the	examinations.	For further	information	related	to	our	liabilities	for	uncertain	tax	positions,	see	Note	10,	Income	Taxes.

We	believe	that	the	liabilities	we	have	for	uncertain	tax	positions	recorded	are	adequate.	However,	a	significant	assessment	against	us	in	excess	of	the	liabilities	recorded	could	have	a	material	adverse effect	on	our	consolidated	financial	position,	results	of	operations	or	cash	flows.

# 17. SELECTED	QUARTERLY	FINANCIAL	DATA	(unaudited)

The	following	tables	summarize	our	unaudited	consolidated	quarterly	results	of	operations	as	reported	for	2009	and	2008:

|  | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter |
| :--- | :--- | :--- | :--- | :--- |
| 2009: |  |  |  |  |
| Revenue | $\t2,060.5 | $\t2,066.1 | $\t2,073.5 | $\t1,999.0 |
| Operating\tincome | 353.0 | 520.7 | 386.9 | 329.2 |
| Net\tincome | 113.4 | 226.2 | 121.0 | 35.9 |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | 113.0 | 225.9 | 120.5 | 35.6 |
| Diluted\tearnings\tper\tcommon\tshare | 0.30 | 0.59 | 0.32 | 0.09 |
| 2008: |  |  |  |  |
| Revenue | $779.2 | $827.5 | $834.0 | $ 1,244.4 |
| Operating\tincome\t(loss) | 142.2 | 85.6 | 167.0 | (111.6) |
| Net\tincome\t(loss) | 76.1 | 40.7 | 88.7 | (131.6) |
| Net\tincome\t(loss)\tattributable\tto\tRepublic\tServices,\tInc. | 76.1 | 40.7 | 88.7 | (131.7) |
| Diluted\tearnings\tper\tcommon\tshare | 0.41 | 0.22 | 0.48 | (0.55) |

During	2009,	we	recorded	a	number	of	gains,	charges	(recoveries)	and	expenses	that	impacted	our	operating	income	during	each	of	the	quarters	as	follows:

|  | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Restructuring\tcharges | $\t\t\t\t31.3 | $\t\t\t\t12.3 | $\t\t\t\t12.3 | $\t\t\t\t\t7.3 | $\t\t\t\t63.2 |
| Costs\tto\tachieve\tsynergies | 12.9 | 10.1 | 8.9 | 9.9 | 41.8 |
| Loss\t(gain)\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | 4.9 | (150.1) | 0.9 | 7.3 | (137.0) |
| Remediation\t(recoveries)\tcharges | - | - | (8.9) | 2.1 | (6.8) |

Costs	to	achieve	synergies	relate	to	those	incremental	costs	incurred	primarily	for	a	synergy	incentive	plan	as	well	as	other	integration	costs.	In	addition,	we	also	recorded	a	loss	on	early	extinguishment	of debt	of	$31.8	million	and	$102.3	million	during	the	three	months	ended	September	30,	2009	and	December	31,	2009,	respectively.	These	losses	are	associated	with	premiums	paid	to	repurchase	debt, charges	for	unamortized	debt	discounts	and	professional	fees	paid	to	effectuate	the	repurchases.

We	acquired	Allied	Waste	Industries,	Inc.	on	December	5,	2008,	and	have	included	all	of	the	operating	results	of	Allied	starting	on	that	date	in	our	consolidated	financial	statements.	During	2008,	we recorded	a	number	of	charges	and	expenses	that	impacted	our	operating	income	during	the	quarters	as	follows:

|  | First<br>Quarter | Second<br>Quarter | Third<br>Quarter | Fourth<br>Quarter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Restructuring\tcharges | $\t\t\t\t\t\t\t\t\t- | $\t\t\t\t\t\t\t\t\t- | $\t\t\t\t\t\t\t\t\t- | $\t\t\t\t82.7 | $\t\t\t\t82.7 |
| Costs\tto\tachieve\tsynergies | - | - | - | 2.9 | 2.9 |
| Asset\timpairment | - | - | - | 89.8 | 89.8 |
| Remediation\tcharges | - | 68.0 | - | 87.8 | 155.8 |

# 18. CONDENSED	CONSOLIDATING	FINANCIAL	STATEMENTS

We	are	the	primary	obligor	under	certain	of	the	Senior	Notes	issued	by	us.	However,	we	have	no	independent	assets	or	operations,	and	therefore	substantially	all	of	our	subsidiaries	have	jointly	and severally	guaranteed	these	notes.	Each	of	the	subsidiary	guarantors	are	100%	wholly	owned	subsidiaries	of	the	parent,	and	all	guarantees	are	full,	unconditional	and	joint	and	several	with	respect	to principal,	interest	and	liquidated	damages,	if	any.	As	such,	we	present	condensed	consolidating	balance	sheets	as	of	December	31,	2009	and	2008,	and	condensed	consolidating	statements	of	income	and cash	flows	for	the	years	ended	December	31,	2009,	2008	and	2007	for	each	of	Republic	Services,	Inc.	(Parent),	guarantor	subsidiaries	and	the	other	non-guarantor	subsidiaries	with	any	consolidating adjustments.

# Condensed	Consolidating	Balance	Sheets

| ASSETS | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Current\tassets: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $101.8 | $(62.6) | $8.8 | $- | $48.0 |
| Accounts\treceivable,\tnet | - | 391.6 | 473.5 | - | 865.1 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 23.7 | 15.8 | 117.0 | - | 156.5 |
| Deferred\ttax\tassets | 93.1 | 92.0 | 10.2 | - | 195.3 |
| Total\tcurrent\tassets | 218.6 | 436.8 | 609.5 | - | 1,264.9 |
| Restricted\tcash\tand\tmarketable\tsecurities | 67.6 | 85.5 | 87.4 | - | 240.5 |
| Property\tand\tequipment,\tnet | 45.6 | 6,270.1 | 342.0 | - | 6,657.7 |
| Goodwill,\tnet | - | 10,667.1 | - | - | 10,667.1 |
| Other\tintangible\tassets,\tnet | 28.9 | 471.1 | - | - | 500.0 |
| Investment\tand\tnet\tadvances\tto\taffiliate | 10,877.3 | 212.6 | 145.7 | (11,235.6) | - |
| Other\tassets | 58.3 | 102.1 | 49.7 | - | 210.1 |
| Total\tassets | $\t11,296.3 | $\t\t18,245.3 | $\t\t\t\t\t\t\t\t\t1,234.3 | $\t\t(11,235.6) | $\t\t\t\t19,540.3 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |
| Current\tliabilities: |  |  |  |  |  |
| Accounts\tpayable | $114.0 | $441.4 | $37.4 | $- | $592.8 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | - | 243.0 | 300.0 | - | 543.0 |
| Deferred\trevenue | - | 326.7 | 4.4 | - | 331.1 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tcurrent\tportion | - | 245.4 | - | - | 245.4 |
| Accrued\tinterest | 33.5 | 62.3 | 0.4 | - | 96.2 |
| Other\taccrued\tliabilities | 273.5 | 231.1 | 235.6 | - | 740.2 |
| Total\tcurrent\tliabilities | 421.0 | 1,549.9 | 577.8 | - | 2,548.7 |
| Long-term\tdebt,\tnet\tof\tcurrent\tmaturities | 2,902.2 | 3,502.4 | 15.0 | - | 6,419.6 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tnet\tof\tcurrent\tportion | 0.5 | 306.2 | 1,076.5 | - | 1,383.2 |
| Deferred\tincome\ttaxes\tand\tother\tlong-term\ttax\tliabilities | 280.6 | 765.8 | (5.9) | - | 1,040.5 |
| Self-insurance\treserves,\tnet\tof\tcurrent\tportion | - | 129.3 | 172.7 | - | 302.0 |
| Other\tlong-term\tliabilities | 127.5 | 102.0 | 49.7 | - | 279.2 |
| Commitments\tand\tcontingencies |  |  |  |  |  |
| Stockholders'\tequity: |  |  |  |  |  |
| Common\tstock | 4.0 | - | - | - | 4.0 |
| Other\tequity | 7,560.5 | 11,887.1 | (651.5) | (11,235.6) | 7,560.5 |
| Total\tRepublic\tServices,\tInc.\tstockholders'\tequity | 7,564.5 | 11,887.1 | (651.5) | (11,235.6) | 7,564.5 |
| Noncontrolling\tinterests | - | 2.6 | - | - | 2.6 |
| Total\tstockholders'\tequity | 7,564.5 | 11,889.7 | (651.5) | (11,235.6) | 7,567.1 |
| Total\tliabilities\tand\tstockholders'\tequity | $11,296.3 | $18,245.3 | $1,234.3 | $(11,235.6) | $19,540.3 |

| ASSETS | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Current\tassets: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $67.2 | $(10.8) | $12.3 | $- | $68.7 |
| Accounts\treceivable,\tnet | - | 387.1 | 558.4 | - | 945.5 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 33.3 | 121.7 | 19.7 | - | 174.7 |
| Deferred\ttax\tassets | 34.6 | 92.0 | 10.2 | - | 136.8 |
| Total\tcurrent\tassets | 135.1 | 590.0 | 600.6 | - | 1,325.7 |
| Restricted\tcash\tand\tmarketable\tsecurities | 96.1 | 102.8 | 83.0 | - | 281.9 |
| Property\tand\tequipment,\tnet | 28.6 | 6,586.1 | 123.5 | - | 6,738.2 |
| Goodwill,\tnet | - | 10,510.1 | 11.4 | - | 10,521.5 |
| Other\tintangible\tassets,\tnet | - | 564.1 | - | - | 564.1 |
| Investment\tand\tnet\tadvances\tto\taffiliate | 9,940.1 | 148.3 | 139.7 | (10,228.1) | - |
| Other\tassets | 127.8 | 333.3 | 28.9 | - | 490.0 |
| Total\tassets | $\t10,327.7 | $\t\t18,834.7 | $\t\t\t\t\t\t\t\t\t\t987.1 | $\t\t(10,228.1) | $\t\t\t\t19,921.4 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |
| Current\tliabilities: |  |  |  |  |  |
| Accounts\tpayable | $30.9 | $502.5 | $30.6 | $- | $564.0 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | 99.3 | 4.7 | 400.0 | - | 504.0 |
| Deferred\trevenue | - | 348.6 | 11.3 | - | 359.9 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tcurrent\tportion | - | 233.3 | 0.1 | - | 233.4 |
| Accrued\tinterest | 22.5 | 84.2 | 1.0 | - | 107.7 |
| Other\taccrued\tliabilities | 199.3 | 306.8 | 290.7 | - | 796.8 |
| Total\tcurrent\tliabilities | 352.0 | 1,480.1 | 733.7 | - | 2,565.8 |
| Long-term\tdebt,\tnet\tof\tcurrent\tmaturities | 2,152.5 | 5,046.0 | - | - | 7,198.5 |
| Accrued\tlandfill\tand\tenvironmental\tcosts,\tnet\tof\tcurrent\tportion | 0.5 | 287.6 | 909.0 | - | 1,197.1 |
| Deferred\tincome\ttaxes\tand\tother\tlong-term\ttax\tliabilities | 480.0 | 765.7 | (5.8) | - | 1,239.9 |
| Self-insurance\treserves,\tnet\tof\tcurrent\tportion | 43.8 | 162.8 | 27.9 | - | 234.5 |
| Other\tlong-term\tliabilities | 17.5 | 111.9 | 73.7 | - | 203.1 |
| Commitments\tand\tcontingencies |  |  |  |  |  |
| Stockholders'\tequity: |  |  |  |  |  |
| Common\tstock | 3.9 | - | - | - | 3.9 |
| Other\tequity | 7,277.5 | 10,979.5 | (751.4) | (10,228.1) | 7,277.5 |
| Total\tRepublic\tServices,\tInc.\tstockholders'\tequity | 7,281.4 | 10,979.5 | (751.4) | (10,228.1) | 7,281.4 |
| Noncontrolling\tinterests | - | 1.1 | - | - | 1.1 |
| Total\tstockholders'\tequity | 7,281.4 | 10,980.6 | (751.4) | (10,228.1) | 7,282.5 |
| Total\tliabilities\tand\tstockholders'\tequity | $10,327.7 | $18,834.7 | $987.1 | $(10,228.1) | $19,921.4 |

# Condensed	Consolidating	Statements	of	Income

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $- | $\t\t\t\t7,932.6 | $\t\t\t\t\t\t\t\t\t\t\t340.1 | $\t\t\t\t\t\t\t(73.6) | $\t\t\t\t\t8,199.1 |
| Expenses: |  |  |  |  |  |
| Cost\tof\toperations | 3.8 | 4,689.9 | 224.1 | (73.6) | 4,844.2 |
| Depreciation,\tamortization\tand\tdepletion | 14.6 | 834.8 | 20.3 | - | 869.7 |
| Accretion | 0.1 | 30.1 | 58.6 | - | 88.8 |
| Selling,\tgeneral\tand\tadministrative | 184.9 | 681.5 | 14.0 | - | 880.4 |
| (Gain)\tloss\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | 12.0 | (149.0) | - | - | (137.0) |
| Restructuring\tcharges | - | 63.2 | - | - | 63.2 |
| Operating\tincome | (215.4) | 1,782.1 | 23.1 | - | 1,589.8 |
| Interest\texpense | (99.7) | (493.8) | (2.4) | - | (595.9) |
| Loss\ton\textinguishment\tof\tdebt | (7.0) | (127.1) | - | - | (134.1) |
| Interest\tincome | (2.4) | (2.1) | 6.5 | - | 2.0 |
| Other\t(expense)\tincome,\tnet | (0.7) | 1.9 | 2.0 | - | 3.2 |
| Equity\tin\tearnings\tof\tsubsidiaries | 453.4 | 56.4 | 6.0 | (515.8) | - |
| Intercompany\tinterest\tincome\t(expense) | 514.0 | (588.3) | 74.3 | - | - |
| Income\tbefore\tincome\ttaxes | 642.2 | 629.1 | 109.5 | (515.8) | 865.0 |
| Provision\tfor\tincome\ttaxes | 147.2 | 183.0 | 38.3 | - | 368.5 |
| Net\tincome | 495.0 | 446.1 | 71.2 | (515.8) | 496.5 |
| Less:\tnet\tincome\tattributable\tto\tnoncontrolling\tinterests | - | (1.5) | - | - | (1.5) |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $495.0 | $444.6 | $71.2 | $\t(515.8) | $495.0 |

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $- | $\t\t\t\t3,590.7 | $\t\t\t\t\t\t\t\t\t\t\t\t99.9 | $\t\t\t\t\t\t\t\t\t(5.5) | $\t\t\t\t\t3,685.1 |
| Expenses: |  |  |  |  |  |
| Cost\tof\toperations | 7.6 | 2,332.5 | 82.1 | (5.5) | 2,416.7 |
| Depreciation,\tamortization\tand\tdepletion | 7.4 | 342.3 | 4.4 | - | 354.1 |
| Accretion | - | 19.7 | 4.2 | - | 23.9 |
| Selling,\tgeneral\tand\tadministrative | 135.2 | 294.8 | 4.7 | - | 434.7 |
| (Gain)\tloss\ton\tdisposition\tof\tassets\tand\timpairments,\tnet | 5.7 | 84.1 | - | - | 89.8 |
| Restructuring\tcharges | - | 82.7 | - | - | 82.7 |
| Operating\tincome | \t(155.9) | 434.6 | 4.5 | - | 283.2 |
| Interest\texpense | (93.2) | (42.8) | 4.1 | - | (131.9) |
| Interest\tincome | 4.0 | 4.3 | 1.3 | - | 9.6 |
| Other\t(expense)\tincome,\tnet | (0.6) | (1.0) | - | - | (1.6) |
| Equity\tin\tearnings\tof\tsubsidiaries | 258.5 | 3.0 | (2.5) | (259.0) | - |
| Intercompany\tinterest\tincome\t(expense) | - | (7.4) | 7.4 | - | - |
| Income\tbefore\tincome\ttaxes | 12.8 | 390.7 | 14.8 | (259.0) | 159.3 |
| Provision\tfor\tincome\ttaxes | (61.0) | 140.1 | 6.3 | - | 85.4 |
| Net\tincome | 73.8 | 250.6 | 8.5 | (259.0) | 73.9 |
| Less:\tnet\tincome\tattributable\tto\tnoncontrolling\tinterests | - | (0.1) | - | - | (0.1) |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $73.8 | $250.5 | $8.5 | $\t(259.0) | $73.8 |

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $- | $\t\t\t\t3,049.8 | $\t\t\t\t\t\t\t\t\t\t\t127.3 | $\t\t\t\t\t\t\t\t\t(0.9) | $\t\t\t\t\t3,176.2 |
| Expenses: |  |  |  |  |  |
| Cost\tof\toperations | 1.5 | 1,902.4 | 100.9 | (0.9) | 2,003.9 |
| Depreciation,\tamortization\tand\tdepletion | 6.1 | 295.3 | 4.1 | - | 305.5 |
| Accretion | - | 17.0 | 0.1 | - | 17.1 |
| Selling,\tgeneral\tand\tadministrative | 54.5 | 251.4 | 7.8 | - | 313.7 |
| Operating\tincome | (62.1) | 583.7 | 14.4 | - | 536.0 |
| Interest\texpense | (95.0) | 0.2 | - | - | (94.8) |
| Interest\tincome | 6.1 | 4.3 | 2.4 | - | 12.8 |
| Other\t(expense)\tincome,\tnet | (0.1) | 1.2 | 13.0 | - | 14.1 |
| Equity\tin\tearnings\tof\tsubsidiaries | 380.6 | 0.8 | (1.4) | (380.0) | - |
| Intercompany\tinterest\tincome\t(expense) | - | 0.9 | (0.9) | - | - |
| Income\tbefore\tincome\ttaxes | 229.5 | 591.1 | 27.5 | (380.0) | 468.1 |
| Provision\tfor\tincome\ttaxes | (60.7) | 227.6 | 11.0 | - | 177.9 |
| Net\tincome | 290.2 | 363.5 | 16.5 | (380.0) | 290.2 |
| Less:\tnet\tincome\tattributable\tto\tnon\tcontrolling\tinterests | - | - | - | - | - |
| Net\tincome\tattributable\tto\tRepublic\tServices,\tInc. | $\t290.2 | $363.5 | $16.5 | $(380.0) | $290.2 |

# Condensed	Consolidating	Statements	of	Cash	Flows

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Cash\tProvided\tby\tOperating\tActivities: |  |  |  |  |  |
| Net\tincome | $495.0 | $\t\t\t\t\t\t446.1 | $\t\t\t\t\t\t\t\t\t\t\t71.2 | $\t\t\t\t\t\t(515.8) | $\t\t\t\t\t\t\t496.5 |
| Equity\tin\tearnings\tof\tsubsidiaries,\tnet\tof\ttaxes | (453.4) | (56.4) | (6.0) | 515.8 | - |
| Other\tadjustments | 72.2 | 779.7 | 48.1 | - | 900.0 |
| Cash\tProvided\tby\tOperating\tActivities | 113.8 | 1,169.4 | \t\t113.3 | - | 1,396.5 |
| Cash\tUsed\tin\tInvesting\tActivities: |  |  |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | (15.0) | (790.7) | (20.6) | - | (826.3) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | - | 31.8 | - | - | 31.8 |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | - | (0.1) | - | - | (0.1) |
| Cash\tproceeds\tfrom\tdivestitures,\tnet\tof\tcash\tdivested | - | 511.1 | - | - | 511.1 |
| Change\tin\trestricted\tcash\tand\tmarketable\tsecurities | 28.4 | 17.4 | (4.2) | - | 41.6 |
| Other | - | (0.6) | - | - | (0.6) |
| Change\tin\tinvestment\tand\tnet\tadvances\tto\taffiliate | (483.8) | (8.0) | - | 491.8 | - |
| Cash\tUsed\tin\tInvesting\tActivities | (470.4) | (239.1) | (24.8) | 491.8 | (242.5) |
| Cash\tProvided\tby\t(Used\tin)\tFinancing\tActivities: |  |  |  |  |  |
| Proceeds\tfrom\tnotes\tpayable\tand\tlong-term\tdebt | 1,378.6 | - | 94.0 | - | 1,472.6 |
| Proceeds\tfrom\tissuance\tof\tsenior\tnotes,\tnet\tof\tdiscount | 1,245.4 | - | - | - | 1,245.4 |
| Payments\tof\tnotes\tpayable\tand\tlong-term\tdebt | (1,969.3) | (1,420.6) | (194.0) | - | (3,583.9) |
| Premiums\tpaid\ton\textinguishment\tof\tdebt | (4.4) | (42.9) | - | - | (47.3) |
| Fees\tpaid\tto\tissue\tand\tretire\tsenior\tnotes\tand\tcertain\thedging\trelationships | (11.9) | (2.4) | - | - | (14.3) |
| Issuances\tof\tcommon\tstock | 39.6 | - | - | - | 39.6 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock\toption\texercises | 2.5 | - | - | - | 2.5 |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (1.0) | - | - | - | (1.0) |
| Cash\tdividends\tpaid | (288.3) | - | - | - | (288.3) |
| Change\tin\tinvestment\tand\tnet\tadvances\tfrom\tparent | - | 483.8 | 8.0 | (491.8) | - |
| Cash\tProvided\tby\t(Used\tin)\tFinancing\tActivities | 391.2 | (982.1) | (92.0) | (491.8) | (1,174.7) |
| Increase\t(Decrease)\tin\tCash\tand\tCash\tEquivalents | 34.6 | (51.8) | (3.5) | - | (20.7) |
| Cash\tand\tCash\tEquivalents\tat\tBeginning\tof\tPeriod | 67.2 | (10.8) | 12.3 | - | 68.7 |
| Cash\tand\tCash\tEquivalents\tat\tEnd\tof\tPeriod | $101.8 | $(62.6) | $8.8 | $- | $48.0 |

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Cash\t(Used\tin)\tProvided\tby\tOperating\tActivities: |  |  |  |  |  |
| Net\tincome | $73.8 | $\t\t\t\t\t\t250.6 | $\t\t\t\t\t\t\t\t\t\t\t\t\t8.5 | $\t\t\t\t\t\t(259.0) | $\t\t\t\t\t\t\t\t\t73.9 |
| Equity\tin\tearnings\tof\tsubsidiaries,\tnet\tof\ttaxes | (258.5) | (3.0) | 2.5 | 259.0 | - |
| Other\tadjustments | (18.9) | 589.6 | (132.4) | - | 438.3 |
| Cash\t(Used\tin)\tProvided\tby\tOperating\tActivities | (203.6) | 837.2 | (121.4) | - | 512.2 |
| Cash\tUsed\tin\tInvesting\tActivities: |  |  |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | (4.0) | (379.1) | (3.8) | - | (386.9) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | - | 8.2 | - | - | 8.2 |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | - | (553.8) | - | - | (553.8) |
| Cash\tproceeds\tfrom\tdivestitures,\tnet\tof\tcash\tdivested | - | 3.3 | - | - | 3.3 |
| Change\tin\trestricted\tcash\tand\tmarketable\tsecurities | (0.2) | 3.7 | (8.8) | - | (5.3) |
| Other | - | (0.2) | - | - | (0.2) |
| Change\tin\tinvestment\tand\tnet\tadvances\tto\taffiliate | (213.0) | (146.5) | - | 359.5 | - |
| Cash\tUsed\tin\tInvesting\tActivities | (217.2) | (1,064.4) | (12.6) | 359.5 | (934.7) |
| Cash\tProvided\tby\tFinancing\tActivities: |  |  |  |  |  |
| Proceeds\tfrom\tnotes\tpayable\tand\tlong-term\tdebt | 1,453.4 | - | - | - | 1,453.4 |
| Payments\tof\tnotes\tpayable\tand\tlong-term\tdebt | (740.6) | - | - | - | (740.6) |
| Issuances\tof\tcommon\tstock | 24.6 | - | - | - | 24.6 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock\toption\texercises | 4.5 | - | - | - | 4.5 |
| Payment\tfor\tdeferred\tstock\tunits | (4.0) | - | - | - | (4.0) |
| Equity\tissuance\tcost | (1.8) | - | - | - | (1.8) |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (138.4) | - | - | - | (138.4) |
| Cash\tdividends\tpaid | (128.3) | - | - | - | (128.3) |
| Change\tin\tinvestment\tand\tnet\tadvances\tfrom\tparent | - | 213.0 | 146.5 | (359.5) | - |
| Cash\tProvided\tby\tFinancing\tActivities | 469.4 | 213.0 | 146.5 | (359.5) | 469.4 |
| Increase\t(Decrease)\tin\tCash\tand\tCash\tEquivalents | 48.6 | (14.2) | 12.5 | - | 46.9 |
| Cash\tand\tCash\tEquivalents\tat\tBeginning\tof\tPeriod | 18.6 | 3.4 | (0.2) | - | 21.8 |
| Cash\tand\tCash\tEquivalents\tat\tEnd\tof\tPeriod | $67.2 | $(10.8) | $12.3 | $- | $68.7 |

|  | Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Cash\t(Used\tin)\tProvided\tby\tOperating\tActivities: |  |  |  |  |  |
| Net\tincome | $\t\t290.2 | $\t\t\t\t\t\t\t363.5 | $\t\t\t\t\t\t\t\t\t\t\t16.5 | $\t\t\t\t\t\t\t\t\t(380.0) | $\t\t\t\t\t\t\t\t\t290.2 |
| Equity\tin\tearnings\tof\tsubsidiaries,\tnet\tof\ttaxes | (380.6) | (0.8) | \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t1.4 | 380.0 | - |
| Other\tadjustments | 5.2 | 378.3 | (12.4) | - | 371.1 |
| Cash\t(Used\tin)\tProvided\tby\tOperating\tActivities | (85.2) | 741.0 | 5.5 | - | 661.3 |
| Cash\tUsed\tin\tInvesting\tActivities: |  |  |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | - | (288.1) | (4.4) | - | (292.5) |
| Proceeds\tfrom\tsales\tof\tproperty\tand\tequipment | - | 6.1 | - | - | 6.1 |
| Cash\tused\tin\tacquisitions,\tnet\tof\tcash\tacquired | - | (4.4) | - | - | (4.4) |
| Cash\tproceeds\tfrom\tdivestitures,\tnet\tof\tcash\tdivested | - | 42.1 | - | - | 42.1 |
| Change\tin\trestricted\tcash\tand\tmarketable\tsecurities | (8.2) | (3.1) | (0.3) | - | (11.6) |
| Cash\tUsed\tin\tInvesting\tActivities | (8.2) | (247.4) | (4.7) | - | (260.3) |
| Cash\tProvided\tby\t(Used\tin)\tFinancing\tActivities: |  |  |  |  |  |
| Proceeds\tfrom\tnotes\tpayable\tand\tlong-term\tdebt | 313.5 | - | - | - | 313.5 |
| Payments\tof\tnotes\tpayable\tand\tlong-term\tdebt | (300.0) | (2.4) | - | - | (302.4) |
| Issuances\tof\tcommon\tstock | 31.3 | - | - | - | 31.3 |
| Excess\tincome\ttax\tbenefit\tfrom\tstock\toption\texercises | 6.0 | - | - | - | 6.0 |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (362.8) | - | - | - | (362.8) |
| Cash\tdividends\tpaid | (93.9) | - | - | - | (93.9) |
| Change\tin\tinvestment\tand\tnet\tadvances\tfrom\tparent | 490.4 | (490.4) | - | - | - |
| Cash\tProvided\tby\t(Used\tin)\tFinancing\tActivities | 84.5 | (492.8) | - | - | (408.3) |
| (Decrease)\tIncrease\tin\tCash\tand\tCash\tEquivalents | (8.9) | 0.8 | 0.8 | - | (7.3) |
| Cash\tand\tCash\tEquivalents\tat\tBeginning\tof\tPeriod | 27.5 | 2.6 | (1.0) | - | 29.1 |
| Cash\tand\tCash\tEquivalents\tat\tEnd\tof\tPeriod | $18.6 | $3.4 | $(0.2) | $- | $21.8 |

# 19. SUBSEQUENT	EVENTS

In	the	first	quarter	of	2010,	we	notified	the	registered	holders	of	our	6.125%	Senior	Notes	due	2014	(the	6.125%	Senior	Notes)	that	we	will	redeem	all	of	the	notes	outstanding	in	March	2010.	The 6.125%	Senior	Notes	will	be	redeemed	at	a	price	equal	to	102.042%	of	the	principal	amount,	of	which	$425.0	million	is	outstanding,	plus	accrued	and	unpaid	interest.	We	expect	to	incur	a	charge	upon extinguishment	of	the	6.125%	Senior	Notes	of	approximately	$52	million	in	the	first	quarter	of	2010.

We	have	evaluated	subsequent	events	through	February	24,	2010.	No	material	subsequent	events	have	occurred	since	December	31,	2009	that	required	recognition	or	disclosure	in	our	current	period financial	statements,	other	than	those	discussed.

# REPORT	OF	MANAGEMENT	ON	REPUBLIC	SERVICES,	INC.'S	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

We,	as	members	of	management	of	Republic	Services,	Inc.	are	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	such	term	is	defined	in	Exchange	Act Rules	13a-15(f).	Internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for external	purposes	in	accordance	with	generally	accepted	accounting	principles.	Internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	our	assets;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	our	receipts	and	expenditures	are	being	made	only	in	accordance	with	authorizations	of	our management	and	directors;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	our	assets	that	could	have	a	material	effect	on the	financial	statements.

Because	of	its	inherent	limitations,	our	internal	control	systems	and	procedures	may	not	prevent	or	detect	misstatements.	An	internal	control	system,	no	matter	how	well	conceived	and	operated,	can provide	only	reasonable,	not	absolute,	assurance	that	the	objectives	of	the	control	system	are	met.	Because	of	the	inherent	limitations	in	all	control	systems,	no	evaluation	of	controls	can	provide	absolute assurance	that	all	control	issues	and	instances	of	fraud,	if	any,	have	been	detected.	Also,	projections	of	any	evaluation	of	effectiveness	to	future	periods	are	subject	to	the	risks	that	controls	may	become inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	and	procedures	may	deteriorate.

We,	under	the	supervision	of	and	with	the	participation	of	our	management,	including	the	Chief	Executive	Officer,	Chief	Financial	Officer	and	Chief	Accounting	Officer,	assessed	the	effectiveness	of	our internal	control	over	financial	reporting	as	of	December	31,	2009,	based	on	criteria	for	effective	internal	control	over	financial	reporting	described	in	"Internal	Control	—	Integrated	Framework"	issued by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	Based	on	this	assessment,	we	concluded	that	we	maintained	effective	internal	control	over	financial	reporting	as	of December	31,	2009,	based	on	the	specified	criteria.

Our	internal	control	over	financial	reporting	has	been	audited	by	Ernst	&	Young	LLP,	an	independent	registered	public	accounting	firm,	as	stated	in	their	attestation	report	which	is	included	herein.

# Disclosure	Controls	and	Procedures

We	carried	out	an	evaluation,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	of	the	effectiveness	of	our disclosure	controls	and	procedures	(as	defined	in	Exchange	Act	Rules	13a-15(e),	and	15d-15(e))	as	of	the	end	of	the	period	covered	by	this	Annual	Report.	Based	upon	that	evaluation,	our	Chief Executive	Officer	and	Chief	Financial	Officer	concluded	that	our	disclosure	controls	and	procedures	were	effective	as	of	the	end	of	the	period	covered	by	this	Annual	Report.

# Changes	in	Internal	Control	Over	Financial	Reporting

Based	on	an	evaluation,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	there	has	been	no	change	in	our	internal control	over	financial	reporting	during	our	last	fiscal	quarter	identified	in	connection	with	that	evaluation,	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	our	internal	control	over financial	reporting.

# ITEM	9B. OTHER	INFORMATION

# ITEM	10. DIRECTORS	AND	EXECUTIVE	OFFICERS	OF	THE	REGISTRANT

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Biographical	Information	Regarding	Directors/Nominees	and	Executive	Officers",	"Election of	Directors",	"Board	of	Directors	and	Corporate	Governance	Matters",	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	and	"Executive	Officers"	in	the	Proxy	Statement	for	the	2010 Annual	Meeting	of	Stockholders.

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Executive	Compensation"	and	"Director	Compensation"	in	the	Proxy	Statement	for	the	2010 Annual	Meeting	of	Stockholders.

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	headings	"Security	Ownership	of	Five	Percent	Stockholders,"	"Security	Ownership	of	Management"	and "Stockholder	Proposals	and	Nominations"	in	the	Proxy	Statement	for	the	2010	Annual	Meeting	of	Stockholders.

The	following	table	sets	forth	certain	information	regarding	equity	compensation	plans	as	of	December	31,	2009	(number	of	securities	in	millions):

| Plan	Category | Number	of<br>Securities<br>to	be<br>Issued	Upon<br>Exercise	of<br>Outstanding	Options<br>and	Rights	(b) | Weighted	Average<br>Exercise	Price	of<br>Outstanding<br>Options<br>and	Rights	(c) | for	Future	Issuance<br>Under	Equity<br>Compensation<br>(excluding<br>securities<br>reflected	in<br>the	first	column)	(d) |
| :--- | :--- | :--- | :--- |
| Equity\tcompensation\tplans\tapproved\tby\tsecurity\tholders\t(a) | 15.6 | $\t\t22.69 | 22.7 |
| Equity\tcompensation\tplans\tnot\tapproved\tby\tsecurity\tholders | - | - | - |
| Total | 15.6 | $\t\t\t\t\t\t\t\t\t\t\t22.69 | 22.7 |

(a) Includes	our	Amended	and	Restated	1998	Stock	Incentive	Plan,	2006	Incentive	Stock	Plan	and	2007	Stock	Incentive	Plan	(the	Plans).	Also	includes	our	2009	Employee	Stock	Purchase	Plan (ESPP).

(b) Includes	14,926,955	stock	options,	653,254	shares	underlying	restricted	stock	and	restricted	stock	units,	and	24,362	shares	underlying	purchase	rights	that	accrue	under	the	ESPP.

(c) Excludes	restricted	stock	and	restricted	stock	units	as	these	awards	do	not	have	exercise	prices.

(d) The	shares	remaining	available	for	future	issuances	include	22,038,220	shares	under	our	Plans	and	699,609	shares	under	our	ESPP.

# ITEM	13. CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	heading	"Certain	Relationships	and	Related	Transactions"	and	"Board	of	Directors	and	Corporate Governance"	in	the	Proxy	Statement	for	the	2010	Annual	Meeting	of	Stockholders.

# ITEM	14. PRINCIPAL	ACCOUNTING	FEES	AND	SERVICES

Information	required	by	this	item	is	incorporated	by	reference	to	the	material	appearing	under	the	heading	"Audit	and	Related	Fees"	in	the	Proxy	Statement	for	the	2010	Annual	Meeting	of	Stockholders.

# ITEM	15. EXHIBITS	AND	FINANCIAL	STATEMENT	SCHEDULES

(a)	The	following	documents	are	filed	as	part	of	this	report:

# 1. Financial	Statements

Our	consolidated	financial	statements	are	set	forth	under	Item	8	of	this	report	on	Form	10-K.

# 2. Financial	Statement	Schedules

All	schedules	are	omitted	as	the	required	information	is	not	applicable	or	the	information	is	presented	in	the	consolidated	financial	statements	and	notes	thereto	in	Item	8.

# 3. Exhibits

The	following	exhibits	are	filed	herewith	or	are	incorporated	by	reference	to	exhibits	previously	filed	with	the	Commission,	as	indicated	in	the	description	of	each,	File	No.	1-14267	in	the	case	of Republic	and	File	No.	1-14705	and	No.	0-19285	in	the	case	of	Allied.

Number Description

2.1 Agreement	and	Plan	of	Merger,	dated	as	of	June	22,	2008,	by	and	among	Republic	Services,	Inc.,	RS	Merger	Wedge,	Inc.	and	Allied	Waste	Industries,	Inc.	(incorporated	by	reference to	Exhibit	2.1	of	the	Company's	Current	Report	on	Form	8-K	dated	June	23,	2008).

2.2 First	Amendment	to	Agreement	and	Plan	of	Merger,	dated	as	of	July	31,	2008,	by	and	among	Republic	Services,	Inc.,	RS	Merger	Wedge,	Inc.	and	Allied	Waste	Industries,	Inc. (incorporated	by	reference	to	Exhibit	2.1	of	the	Company's	Current	Report	on	Form	8-K	dated	August	6,	2008).

2.3 Second	Amendment	to	Agreement	and	Plan	of	Merger,	dated	as	of	December	5,	2008,	by	and	among	Republic	Services,	Inc.,	RS	Merger	Wedge,	Inc.	and	Allied	Waste	Industries,	Inc. (incorporated	by	reference	to	Exhibit	2.1	of	the	Company's	Current	Report	on	Form	8-K	dated	December	10,	2008).

3.1 Amended	and	Restated	Certificate	of	Incorporation	(incorporated	by	reference	to	Exhibit	3.1	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	1998).

3.2 Certificate	of	Amendment	to	Amended	and	Restated	Certificate	of	Incorporation	of	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's	Registration Statement	on	Form	S-8,	Registration	No.	333-81801,	filed	with	the	Commission	on	June	29,	1999).

3.3 Amended	and	Restated	Bylaws	of	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	3.1	of	the	Company's	Current	Report	on	Form	8-K	dated	October	30,	2009).

	 4.1 Republic	Services,	Inc.	Common	Stock	Certificate	(incorporated	by	reference	to	Exhibit	4.4	of	the	Company's	Registration	Statement	on	Form	S-8,	Registration	No.	333-81801,	filed with	the	Commission	on	June	29,	1999).

	 4.2 Indenture,	dated	as	of	August	15,	2001,	by	and	between	Republic	Services,	Inc.	and	The	Bank	of	New	York,	as	trustee,	including	the	form	of	notes	(incorporated	by	reference	to	Exhibit 4.1	of	the	Company's	Current	Report	on	Form	8-K	dated	August	16,	2001).

	 4.3 First	Supplemental	Indenture,	dated	as	of	August	15,	2001,	to	the	Indenture	dated	as	of	August	15,	2001,	by	and	between	Republic	Services,	Inc.	and	The	Bank	Of	New	York,	as trustee,	including	the	form	of	6.75%	Senior	Notes	due	2011	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's	Current	Report	on	Form	8-K	dated	August	16,	2001).

	 4.4 Second	Supplemental	Indenture,	dated	as	of	March	21,	2005,	to	the	Indenture	dated	as	of	August	15,	2001,	by	and	between	Republic	Services,	Inc.	and	The	Bank	of	New	York,	as trustee,	including	the	form	of	6.086%	Notes	due	2035	(incorporated	by	reference	to	Exhibit	4.1	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2005). 	 4.5 Third	Supplemental	Indenture,	dated	as	of	December	5,	2008,	to	the	Indenture	dated	as	of	August	15,	2001,	by	and	among	Republic	Services,	Inc.,	Allied	Waste	Industries,	Inc.,	the guarantors	party	thereto	and	The	Bank	of	New	York	Mellon	(f/k/a	The	Bank	of	New	York),	as	trustee	(incorporated	by	reference	to	Exhibit	4.8	of	the	Company's	Annual	Report	on Form	10-K	for	the	year	ended	December	31,	2008).

	 4.6 Indenture,	dated	as	of	September	8,	2009,	by	and	between	Republic	Services,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee	(incorporated	by	reference	to Exhibit	4.1	of	the	Company's	Current	Report	on	Form	8-K	dated	September	9,	2009).

	 4.7 First	Supplemental	Indenture,	dated	as	of	September	8,	2009,	to	the	Indenture	dated	as	of	September	8,	2009,	by	and	among	Republic	Services,	Inc.,	the	guarantors	named	therein	and The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee,	including	the	form	of	5.500%	Notes	due	2019	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's	Current Report	on	Form	8-K	dated	September	9,	2009).

	 4.8 Indenture,	dated	as	of	November	25,	2009,	by	and	between	Republic	Services,	Inc.	and	U.S.	Bank	National	Association,	as	trustee	(incorporated	by	reference	to	Exhibit	4.1	of	the Company's	Current	Report	on	Form	8-K	dated	November	25,	2009).

	 4.9 First	Supplemental	Indenture,	dated	as	of	November	25,	2009,	to	the	Indenture	dated	as	of	November	25,	2009,	by	and	among	Republic	Services,	Inc.,	the	guarantors	named	therein	and U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	5.25%	Notes	due	2021	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's	Current	Report	on	Form	8-K	dated November	25,	2009).

	 4.10 Amended	and	Restated	Credit	Agreement,	dated	as	of	April	26,	2007,	by	and	among	Republic	Services,	Inc.,	Bank	of	America	N.A.,	as	administrative	agent,	and	the	several	financial institutions	party	thereto	(incorporated	by	reference	to	Exhibit	4.1	of	the	Company's	Current	Report	on	Form	8-K	dated	May	2,	2007).

	 4.11 Amendment	No.	1,	dated	as	of	September	18,	2008,	to	the	Amended	and	Restated	Credit	Agreement	dated	as	of	April	26,	2007,	by	and	among	Republic	Services,	Inc.,	Bank	of America,	N.A.,	as	administrative	agent,	and	each	of	the	lenders	signatory	thereto	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's	Current	Report	on	Form	8-K	dated September	24,	2008).

	 4.12 Credit	Agreement,	dated	as	of	September	18,	2008,	by	and	among	Republic	Services,	Inc.,	Bank	of	America,	N.A.,	as	administrative	agent,	swing	line	lender	and	l/c	issuer,	JPMorgan Chase	Bank,	N.A.,	as	syndication	agent,	Barclays	Bank	PLC,	BNP	Paribas	and	The	Royal	Bank	of	Scotland	PLC,	as	co-documentation	agents,	and	the	other	lenders	party	thereto (incorporated	by	reference	to	Exhibit	4.1	of	the	Company's	Current	Report	on	Form	8-K	dated	September	24,	2008).

	 4.13 Letter	Agreement,	dated	as	of	December	2,	2008,	by	and	among	Republic	Services,	Inc.,	Blackstone	Capital	Partners	III	Merchant	Banking	Fund	L.P.,	Blackstone	Offshore	Capital Partners	III	L.P.	and	Blackstone	Family	Investment	Partnership	III	L.P.	(incorporated	by	reference	to	Exhibit	4.12	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2008).

	 4.14 Restated	Indenture,	dated	as	of	September	1,	1991,	by	and	between	Browning-Ferris	Industries,	Inc.	and	First	City,	Texas-Houston,	National	Association,	as	trustee	(incorporated	by reference	to	Exhibit	4.22	of	Allied's	Registration	Statement	on	Form	S-4	(No.	333-61744)).

	 4.15 First	Supplemental	Indenture,	dated	as	of	July	30,	1999,	to	the	Indenture	dated	as	of	September	1,	1991,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste	North	America,	Inc., Browning-Ferris	Industries,	Inc.	and	Chase	Bank	of	Texas,	National	Association,	as	trustee	(incorporated	by	reference	to	Exhibit	4.23	of	Allied's	Registration	Statement	on	Form	S-4 (No.	333-61744)).

	 4.16 First	[sic]	Supplemental	Indenture,	dated	as	of	December	31,	2004,	to	the	Indenture	dated	as	of	September	1,	1991,	by	and	among	Browning-Ferris	Industries,	Inc.,	BBCO,	Inc.	and	JP Morgan	Chase	Bank,	National	Association	as	trustee	(incorporated	by	reference	to	Exhibit	4.33	of	Allied's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2004).

	 4.17 Third	Supplemental	Indenture,	dated	as	of	December	5,	2008,	to	the	Indenture	dated	as	of	September	1,	1991,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste	North	America, Inc.,	Browning-Ferris	Industries,	LLC	(successor	to	Browning-Ferris	Industries,	Inc.),	BBCO,	Inc.,	Republic	Services,	Inc.,	the	guarantors	party	thereto	and	The	Bank	of	New	York Mellon	Trust	Company,	N.A.,	as	trustee	(incorporated	by	reference	to	Exhibit	4.1	of	the	Company's	Current	Report	on	Form	8-K	dated	December	10,	2008).

	 4.18 Senior	Indenture,	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	Trust	National	Association,	as	trustee (incorporated	by	reference	to	Exhibit	4.1	of	Allied's	Registration	Statement	on	Form	S-4	(No.	333-70709)).

	 4.19 Eleventh	Supplemental	Indenture,	dated	as	of	November	10,	2003,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied Waste	Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	61/2%	Senior	Notes	due	2010	(incorporated	by	reference	to Exhibit	10.5	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	September	30,	2003).

	 4.20 Twelfth	Supplemental	Indenture,	dated	as	of	January	27,	2004,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied	Waste Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	53/4%	Senior	Notes	due	2011	(incorporated	by	reference	to	Exhibit 10.58	of	Allied's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2003).

	 4.21 Thirteenth	Supplemental	Indenture,	dated	as	of	January	27,	2004,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied Waste	Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	61/8%	Senior	Notes	due	2014	(incorporated	by	reference	to Exhibit	10.59	of	Allied's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2003).

	 4.22 Fifteenth	Supplemental	Indenture,	dated	as	of	April	20,	2004,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied	Waste Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	63/8%	Senior	Notes	due	2011	(incorporated	by	reference	to	Exhibit 10.23	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2004).

	 4.23 Sixteenth	Supplemental	Indenture,	dated	as	of	March	9,	2005,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste	North America,	Inc.	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	71/4%	Senior	Notes	due	2015	(incorporated	by	reference	to	Exhibit	1.01	of	Allied's	Current	Report on	Form	8-K	dated	March	10,	2005).

	 4.24 Seventeenth	Supplemental	Indenture,	dated	as	of	May	17,	2006,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied	Waste Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	71/8%	Senior	Notes	due	2016	(incorporated	by	reference	to	Exhibit 1.01	of	Allied's	Current	Report	on	Form	8-K	dated	May	17,	2006).

	 4.25 Eighteenth	Supplemental	Indenture,	dated	as	of	March	12,	2007,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied	Waste Industries,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee,	including	the	form	of	67/8%	Senior	Notes	due	2017	(incorporated	by	reference	to	Exhibit 1.01	of	Allied's	Current	Report	on	Form	8-K	dated	March	13,	2007).

	 4.26 Nineteenth	Supplemental	Indenture,	dated	as	of	December	2,	2008,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste North	America,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee	(incorporated	by	reference	to	Exhibit	4.27	of	the	Company's	Annual	Report	on	Form 10-K	for	the	year	ended	December	31,	2008).

	 4.27 Twentieth	Supplemental	Indenture,	dated	as	of	December	5,	2008,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste North	America,	Inc.,	Republic	Services,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee	(incorporated	by	reference	to	Exhibit	4.2	of	the	Company's Current	Report	on	Form	8-K	dated	December	10,	2008).

	 4.28 Twenty-First	Supplemental	Indenture,	dated	as	of	December	15,	2008,	to	the	Senior	Indenture	dated	as	of	December	23,	1998,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied Waste	North	America,	Inc.,	Republic	Services,	Inc.,	the	guarantors	party	thereto	and	U.S.	Bank	National	Association,	as	trustee	(incorporated	by	reference	to	Exhibit	4.1	of	the Company's	Current	Report	on	Form	8-K	dated	December	19,	2008).

	 4.29 Registration	Rights	Agreement,	dated	as	of	November	10,	2003,	by	and	among	Allied	Waste	Industries,	Inc.,	the	guarantors	party	thereto	and	the	initial	purchasers,	relating	to	$350.0 million	aggregate	principal	amount	of	61/2%	Senior	Notes	due	2010	(incorporated	by	reference	to	Exhibit	10.4	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended September	30,	2003).

	 4.30 Registration	Rights	Agreement,	dated	as	of	April	20,	2004,	by	and	among	Allied	Waste	Industries,	Inc.,	the	guarantors	party	thereto	and	the	initial	purchasers,	relating	to	$275.0	million aggregate	principal	amount	of	63/8%	Senior	Notes	due	2011	(incorporated	by	reference	to	Exhibit	10.20	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31, 2004).

# Exhibit

4.31 Registration	Rights	Agreement,	dated	as	of	March	9,	2005,	by	and	among	Allied	Waste	Industries,	Inc.,	Allied	Waste	North	America,	Inc.,	J.P.	Morgan	Securities	Inc.,	UBS	Securities LLC,	Credit	Suisse	First	Boston	LLC,	Wachovia	Capital	Markets,	LLC,	Banc	of	America	Securities	LLC,	BNP	Paribas	Securities	Corp.,	Calyon	Securities	(USA)	and	Scotia	Capital (USA)	Inc.,	relating	to	$600.0	million	aggregate	principal	amount	of	71/4%	Senior	Notes	due	2015	(incorporated	by	reference	to	Exhibit	1.02	of	Allied's	Current	Report	on	Form	8-K dated	March	10,	2005).

4.32 Registration	Rights	Agreement,	dated	as	of	May	17,	2006,	by	and	among	Allied	Waste	North	America,	Inc.,	Allied	Waste	Industries,	Inc.,	the	guarantors	party	thereto	and	the	initial purchasers,	relating	to	$600.0	million	aggregate	principal	amount	of	71/8%	Senior	Notes	due	2016	(incorporated	by	reference	to	Exhibit	1.02	of	Allied's	Current	Report	on	Form	8-K dated	May	17,	2006).

4.33 Registration	Rights	Agreement,	dated	as	of	September	8,	2009,	by	and	among	Republic	Services,	Inc.,	the	guarantors	party	thereto	and	Banc	of	America	Securities	LLC,	Barclays Capital	Inc.	and	J.P.	Morgan	Securities	Inc.,	as	representatives	of	the	several	initial	purchasers	named	therein,	relating	to	$650.0	million	aggregate	principal	amount	of	5.500%	Notes due	2019	(incorporated	by	reference	to	Exhibit	4.3	of	the	Company's	Current	Report	on	Form	8-K	dated	September	9,	2009).

4.34 Registration	Rights	Agreement,	dated	as	of	November	25,	2009,	by	and	among	Republic	Services,	Inc.,	the	guarantors	party	thereto	and	Banc	of	America	Securities	LLC,	RBS Securities	Inc.,	BNP	Paribas	Securities	Corp.	and	Wells	Fargo	Securities,	LLC,	as	representatives	of	the	several	initial	purchasers	named	therein,	relating	to	$600.0	million	aggregate principal	amount	of	5.25%	Notes	due	2021	(incorporated	by	reference	to	Exhibit	4.3	of	the	Company's	Current	Report	on	Form	8-K	dated	November	25,	2009).

4.35 The	Company	is	a	party	to	other	agreements	for	unregistered	long-term	debt	securities,	which	do	not	exceed	10%	of	the	Company's	total	assets.	The	Company	agrees	to	furnish	a	copy of	such	agreements	to	the	Commission	upon	request.

	 10.1+ Republic	Services,	Inc.	1998	Stock	Incentive	Plan,	as	amended	and	restated	March	6,	2002	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Quarterly	Report	on	Form	10- Q	for	the	period	ended	March	31,	2002).

	 10.2+ Form	of	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	1998	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.2	of	the	Company's	Annual	Report	on	Form 10-K	for	the	year	ended	December	31,	2008).

	 10.3+ Form	of	Director	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	1998	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.3	of	the	Company's	Annual	Report	on Form	10-K	for	the	year	ended	December	31,	2008).

	 10.4+ Form	of	Executive	Restricted	Stock	Agreement	under	the	Republic	Services,	Inc.	1998	Stock	Incentive	Plan	(1-year	vesting)	(incorporated	by	reference	to	Exhibit	10.4	of	the Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	 10.6+ Form	of	Non-Employee	Director	Stock	Unit	Agreement	under	the	Republic	Services,	Inc.	1998	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.6	of	the	Company's Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	 10.7+ Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	2007).

# Number

# Description

	10.8+ Amendment	to	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.8	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2008).

	10.9+ Form	of	Stock	Option	Agreement	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.9	of	the	Company's	Annual	Report	on	Form	10- K	for	the	year	ended	December	31,	2008).

	10.10+ Form	of	Restricted	Stock	Agreement	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.10	of	the	Company's	Annual	Report	on Form	10-K	for	the	year	ended	December	31,	2008).

	10.11+ Form	of	Non-Employee	Director	Restricted	Stock	Units	Agreement	(3-year	vesting)	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit 10.11	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.12+ Form	of	Non-Employee	Director	Restricted	Stock	Units	Agreement	(immediate	vesting)	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to Exhibit	10.12	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.13+ Form	of	Restricted	Stock	Unit	Award	Agreement	under	the	Republic	Services,	Inc.	2007	Stock	Incentive	Plan	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current Report	on	Form	8-K	dated	January	4,	2010).

	10.14+ Republic	Services,	Inc.	Executive	Incentive	Plan,	effective	January	1,	2003	(incorporated	by	reference	to	Exhibit	10.9	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year ended	December	31,	2003).

	10.15+ First	Amendment,	effective	January	30,	2007,	to	the	Republic	Services,	Inc.	Executive	Incentive	Plan,	effective	January	1,	2003	(incorporated	by	reference	to	Exhibit	10.14	of	the Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.16+ Republic	Services,	Inc.	Deferred	Compensation	Plan,	as	amended	and	restated	November	1,	2003	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form 8-K	dated	January	31,	2005).

	10.17+ Republic	Services,	Inc.	Executive	Incentive	Plan,	effective	May	14,	2009	(incorporated	by	reference	to	Appendix	A	of	the	Company's	Proxy	Statement	on	Schedule	14A	filed	on	April 3,	2009).

	10.18+ Republic	Services,	Inc.	Synergy	Incentive	Plan,	effective	May	14,	2009	(under	the	Republic	Services,	Inc.	Executive	Incentive	Plan)	(incorporated	by	reference	to	Appendix	B	of	the Company's	Proxy	Statement	on	Schedule	14A	filed	on	April	3,	2009).

	10.19+ Consulting	Agreement,	dated	as	of	December	3,	2008,	by	and	between	Harris	W.	Hudson	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.18	of	the	Company's Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008)

	10.20+ Second	Amended	and	Restated	Employment	Agreement,	effective	as	of	the	effective	time	of	the	merger,	by	and	between	James	E.	O'Connor	and	Republic	Services,	Inc.	(incorporated by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K	dated	February	24,	2009).

	10.21+ Amended	and	Restated	Employment	Agreement,	effective	May	14,	2009,	by	and	between	James	E.	O'Connor	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.5	of the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2009).

	10.22+ Amended	and	Restated	Employment	Agreement,	dated	as	of	February	21,	2007,	by	and	between	Michael	Cordesman	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit 10.2	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2007).

	10.23+ First	Amendment,	dated	as	of	December	1,	2008,	to	the	Amended	and	Restated	Employment	Agreement	dated	as	of	February	21,	2007	by	and	between	Michael	Cordesman	and Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K	dated	December	5,	2008).

	10.24+ Amended	and	Restated	Employment	Agreement,	dated	as	of	February	21,	2007,	by	and	between	Tod	C.	Holmes	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.3 of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2007).

	10.25+ Amended	and	Restated	Employment	Agreement,	effective	May	14,	2009,	by	and	between	Tod	C.	Holmes	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.4	of	the Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2009).

	10.26+ Amended	and	Restated	Employment	Agreement,	dated	as	of	February	21,	2007,	by	and	between	David	A.	Barclay	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit 10.4	of	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2007).

	10.27+ First	Amendment,	dated	as	of	December	1,	2008,	to	the	Amended	and	Restated	Employment	Agreement	dated	as	of	February	21,	2007	by	and	between	David	A.	Barclay	and	Republic Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.2	of	the	Company's	Current	Report	on	Form	8-K	dated	December	5,	2008).

	10.28+ Consulting	Agreement,	dated	as	of	December	15,	2008,	by	and	between	David	A.	Barclay	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.25	of	the	Company's Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.29+ Executive	Employment	Agreement,	dated	as	of	March	2,	2007,	by	and	between	Donald	W.	Slager	and	Allied	Waste	Industries,	Inc.	(incorporated	by	reference	to	Exhibit	10.3	of Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	2008).

	10.30+ First	Amendment,	dated	as	of	December	31,	2008,	to	Executive	Employment	Agreement	dated	as	of	March	2,	2007	by	and	between	Donald	W.	Slager	and	Allied	Waste	Industries,	Inc. (incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K	dated	January	7,	2009).

	10.31+ Employment	Agreement,	dated	January	31,	2009,	by	and	between	Republic	Services,	Inc.	and	Donald	W.	Slager	(incorporated	by	reference	to	Exhibit	10.1	of	the	Company's	Current Report	on	Form	8-K	dated	February	5,	2009).

	10.32+ Amended	and	Restated	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	3	of	Allied's	Definitive	Proxy	Statement	in	accordance	with Schedule	14A	dated	April	18,	2001).

	10.33+ First	Amendment	to	the	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	dated	as	of	August	8,	2001	(incorporated	by	reference	to	Exhibit	4.14	of	Allied's	Annual	Report	on Form	10-K	for	the	year	ended	December	31,	2001).

	10.34+ Second	Amendment	to	the	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	dated	as	of	December	12,	2002	(incorporated	by	reference	to	Exhibit	10.49	of	Allied's	Annual Report	on	Form	10-K	for	the	year	ended	December	31,	2002).

	10.35+ Third	Amendment	to	the	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	effective	February	5,	2004	(incorporated	by	reference	to	Exhibit	10.6	of	Allied's	Quarterly	Report	on Form	10-Q	for	the	period	ended	March	31,	2004).

	10.36+ Fourth	Amendment	to	the	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	effective	February	5,	2004	(incorporated	by	reference	to	Exhibit	10.7	of	Allied's	Quarterly	Report on	Form	10-Q	for	the	period	ended	March	31,	2004).

	10.37+ Amended	and	Restated	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	effective	February	5,	2004	(incorporated	by	reference	to	Exhibit	10.8	of	Allied's	Quarterly	Report	on Form	10-Q	for	the	period	ended	March	31,	2004).

	10.38+ First	Amendment	to	the	Amended	and	Restated	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan,	as	amended	and	restated	effective	February	5,	2004	(incorporated	by	reference to	Exhibit	10.03	of	Allied's	Current	Report	on	Form	8-K	dated	December	10,	2004).

	10.39+ Form	of	Nonqualified	Stock	Option	Agreement	under	the	Amended	and	Restated	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	10.01	of Allied's	Current	Report	on	Form	8-K	dated	December	10,	2004).

	10.40+ Form	of	Nonqualified	Stock	Option	Agreement	under	the	Amended	and	Restated	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	10.01	of Allied's	Current	Report	on	Form	8-K	dated	January	5,	2006).

	10.41+ Amendment	to	Certain	Allied	Waste	Industries,	Inc.	Equity	Award	Agreements	(Global	—	Employees)	under	the	Allied	Waste	Industries,	Inc.	1991	Incentive	Stock	Plan	and	the	Allied Waste	Industries,	Inc.	2006	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	10.38	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.42+ Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(incorporated	by	reference	to	Exhibit	10.7	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the period	ended	June	30,	2005).

	10.43+ First	Amendment	to	the	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(incorporated	by	reference	to	Exhibit	10.02	of	Allied's	Current	Report on	Form	8-K	dated	February	14,	2006).

	10.44+ Amended	and	Restated	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan,	effective	January	1,	2008	(incorporated	by	reference	to	Exhibit	10.123 of	Allied's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2007).

	10.45+ Republic	Services,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(f/k/a	Amended	and	Restated	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity Compensation	Plan),	as	amended	and	restated	effective	December	5,	2008	(incorporated	by	reference	to	Exhibit	10.42	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year ended	December	31,	2008).

	10.46+ Form	of	Stock	Option	Agreement	under	the	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(incorporated	by	reference	to	Exhibit	10.4	of Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2005).

	10.47+ Form	of	Restricted	Stock	Agreement	under	the	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(incorporated	by	reference	to	Exhibit	10.2	of Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	March	31,	2005).

	10.48+ Amendment	to	Certain	Allied	Waste	Industries,	Inc.	Equity	Award	Agreements	(Global	—	Directors)	under	the	Allied	Waste	Industries,	Inc.	1994	Non-Employee	Director	Stock Option	Plan	and	the	Allied	Waste	Industries,	Inc.	2005	Non-Employee	Director	Equity	Compensation	Plan	(incorporated	by	reference	to	Exhibit	10.45	of	the	Company's	Annual Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.49+ Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	10.2	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	2006).

	10.50+ First	Amendment	to	the	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan,	dated	as	of	July	27,	2006	(incorporated	by	reference	to	Exhibit	10.1	of	Allied's	Quarterly	Report	on Form	10-Q	for	the	period	ended	September	30,	2006).

	10.51+ Amended	and	Restated	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan,	dated	as	of	July	27,	2006	(incorporated	by	reference	to	Exhibit	10.2	of	Allied's	Quarterly	Report	on Form	10-Q	for	the	period	ended	September	30,	2006).

	10.52+ First	Amendment,	dated	as	of	December	5,	2006,	to	the	Amended	and	Restated	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan,	dated	as	of	July	27,	2006	(incorporated	by reference	to	Exhibit	10.47	of	Allied's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2006).

	10.53+ Amended	and	Restated	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan,	effective	October	24,	2007	(incorporated	by	reference	to	Exhibit	10.122	of	Allied's	Annual	Report	on Form	10-K	for	the	year	ended	December	31,	2007).

	10.54+ Republic	Services,	Inc.	2006	Incentive	Stock	Plan	(f/k/a	Amended	and	Restated	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan),	as	amended	and	restated	effective	December 5,	2008	(incorporated	by	reference	to	Exhibit	10.51	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.55+ Form	of	Nonqualified	Stock	Option	Agreement	under	the	Allied	Waste	Industries,	Inc.	2006	Incentive	Stock	Plan	(incorporated	by	reference	to	Exhibit	10.3	of	Allied's	Quarterly Report	on	Form	10-Q	for	the	period	ended	September	30,	2006).

	10.56+ Allied	Waste	Industries,	Inc.	Supplemental	Executive	Retirement	Plan,	effective	August	1,	2003	(incorporated	by	reference	to	Exhibit	10.10	of	Allied's	Quarterly	Report	on	Form	10-Q for	the	period	ended	March	31,	2004).

	10.57+ Allied	Waste	Industries,	Inc.	Supplemental	Executive	Retirement	Plan,	restated	effective	January	1,	2006	(incorporated	by	reference	to	Exhibit	10.03	of	Allied's	Current	Report	on Form	8-K	dated	February	14,	2006).

	10.58+ Amended	and	Restated	Schedule	A,	dated	as	of	April	11,	2007,	to	the	Allied	Waste	Industries,	Inc.	Supplemental	Executive	Retirement	Plan	(incorporated	by	reference	to	Exhibit 10.55	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

	10.59 Participation	Agreement,	effective	July	1,	2006,	by	and	between	Allied	Waste	Industries,	Inc.	and	CoreTrust	Purchasing	Group	LLC,	the	exclusive	agent,	for	the	purchase	by	Allied	of certain	goods	and	services	(incorporated	by	reference	to	Exhibit	10.4	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	2006).

	10.60+ Amended	and	Restated	Executive	Employment	Agreement,	dated	as	of	June	22,	2008,	by	and	between	Allied	Waste	Industries,	Inc.	and	Timothy	R.	Donovan,	as	assumed	by	Republic Services,	Inc.	at	the	effective	time	of	the	merger	(incorporated	by	reference	to	Exhibit	10.6	of	Allied's	Quarterly	Report	on	Form	10-Q	for	the	period	ended	June	30,	2008).

	10.61+ Employment	Agreement,	dated	December	5,	2008,	between	Michael	Rissman	and	Republic	Services,	Inc.	(now	superseded)	(incorporated	by	reference	to	Exhibit	10.1	of	Republic's Current	Report	on	Form	8-K	filed	on	February	12,	2010).

	10.62+ Memorandum	dated	February	9,	2010,	terminating	Employment	Agreement,	dated	December	5,	2008,	between	Michael	Rissman	and	Republic	Services,	Inc.(	incorporated	by	reference to	Exhibit	10.2	of	Republic's	Current	Report	on	Form	8-K	filed	on	February	12,	2010).

	10.63+ Offer	Letter	dated	August	17,	2009	to	Michael	Rissman	from	Republic	Services,	Inc.	regarding	general	counsel	position	(incorporated	by	reference	to	Exhibit	10.3	of	Republic's Current	Report	on	Form	8-K	filed	on	February	12,	2010).

	10.64+ Non-Solicitation,	Confidentiality	and	Arbitration	Agreement,	dated	February	9,	2010,	between	Michael	Rissman	and	Republic	Services,	Inc.	(incorporated	by	reference	to	Exhibit	10.4 of	Republic's	Current	Report	on	Form	8-K	filed	on	February	12,	2010).

	10.65+ Form	of	Indemnity	Agreement	between	Allied	Waste	Industries,	Inc.	and	legacy	Allied	directors	(incorporated	by	reference	to	Exhibit	10.19	of	Allied's	Quarterly	Report	on	Form	10-Q for	the	quarter	ended	March	31,	2004).

	10.66+* Republic	Services,	Inc.	Executive	Separation	Policy.

18.1 Preferability	Letter	of	Ernst	&	Young	LLP	(incorporated	by	reference	to	Exhibit	18.1	of	the	Company's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008).

21.1* Subsidiaries	of	the	Company.

32.1* Section	1350	Certification	of	Chief	Executive	Officer.

32.2* Section	1350	Certification	of	Chief	Financial	Officer.

	101* The	following	financial	statements	from	the	Republic	Services,	Inc.	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2009,	formatted	in	XBRL	(Extensible	Business Reporting	Language):	(i)	the	consolidated	Balance	Sheets,	(ii)	the	consolidated	Statements	of	Income,	(iii)	the	Consolidated	Statements	of	Stockholders'	Equity	and	Comprehensive Income,	(iv)	the	Consolidated	Statements	of	Cash	Flows,	and	(v)	The	Notes	to	the	Consolidated	Financial	Statements,	tagged	as	blocks	of	text.

* Filed	herewith

+ Indicates	a	management	or	compensatory	plan	or	arrangement.

# Signatures

Pursuant	to	the	requirements	of	Sections	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	Registrant,	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the	undersigned,	thereunto	duly authorized.

James	E.	O'Connor

Chairman	of	the	Board	of	Directors	and

# Chief	Executive	Officer

(Principal	Executive	Officer)

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	Registrant	and	in	the	capacities	and	on	the	dates indicated.



Question: what was the percentage decline in the weighted- average estimated fair values of stock options from 2007 to 2008
Calculation: a = 4.36
b = 6.49
percent_decline = (a - b) / b
answer = percent_decline * 100
Answer: -32.8%